EXHIBIT 2.5
PARTNERSHIP AGREEMENT OF XXXXXXXXX PARTNERSHIP By and Between
Uniroyal Chemical Co./Cie and Bayer Inc.
Effective as of November 20, 1998.
TABLE OF CONTENTS
PAGE NO.
Article I
DEFINITIONS 1
Article II
FORMATION AND PURPOSE 12
2.1 Formation. 12
2.2 Name of the Partnership. 12
2.3 Purpose. 12
2.4 Term. 12
2.5 Principal Office. 12
2.6 Partners. 12
Article III
CAPITAL 13
3.1 Initial Capital Contributions. 13
3.2 No Additional Capital Contributions
Required. 13
3.3 No Interest on Capital Contributions;
Deficit Account. 13
3.4 Return of Capital Contributions. 13
3.5 Form of Return of Capital. 13
3.6 Capital Accounts. 13
3.7 Allocations of income and loss for
income tax purposes. 14
3.8 Currency. 14
3.9 Distributions. 14
Article IV
MANAGEMENT 15
4.1 Board of Representatives. 15
4.2 Representatives; Appointment. 18
4.3 Power to Bind Partnership. 19
4.4 Vacancies. 19
4.5 Quorum. 19
4.6 Meetings. 20
4.7 Action Without a Meeting 20
4.8 Proxy. 20
4.9 Meeting by Telephone or Video Conference. 20
4.10 Resignations and Removal. 20
4.11 Compensation and Expenses. 21
4.12 Board Chairman. 21
4.13 Deadlock. 21
Article V
MEETINGS OF PARTNERS 24
5.1 Meetings of and Voting by Partners. 24
5.2 Services; Intercompany Dealings 25
5.3 Duty of Partners. 25
5.4 Resignation or Withdrawal 26
Article VI
OFFICERS 26
6.1 Officers. 26
6.2 Election and Term of Office. 26
6.3 Removal. 26
6.4 Vacancies. 26
6.5 President. 26
6.6 Vice Presidents. 27
6.7 Secretary. 27
6.8 Chief Financial Officer. 27
6.9 Remuneration. 27
Article VII
INDEMNIFICATION; LIMITATION OF LIABILITY;
OTHER ACTIVITIES; CONFIDENTIALITY 28
7.1 Indemnification by the Partnership. 28
7.2 Notice to Partnership. 28
7.3 Contest by Partnership. 28
7.4 Advances of Expenses by Partnership. 29
7.5 Indemnification by a Partner. 29
7.6 Notice to Partner. 29
7.7 Contest by Partner. 29
7.8 Advances of Expenses by Partner. 30
7.9 Other. 30
7.10 Effect of Interest in Transaction. 30
7.11 No Third Party Rights. 30
7.12 Insurance. 30
7.13 Limitation of Liability 31
7.14 Other Activities. 32
7.15 Confidential Information. 33
7.16 Agreements with the Partnership. 34
Article VIII
TRANSFERS AND ADMISSION OF NEW PARTNERS 35
8.1 Preemption Rights; Right of First Offer;
Rights of First Refusal. 35
8.2 Involuntary Transfers. 39
8.3 Change of Control 40
8.4 Admission of Transferee. 41
8.5 Rights of Unadmitted Transferees. 42
8.6 Preemptive Rights. 42
8.7 Waiver. 42
Article IX
DISSOLUTION AND LIQUIDATION 43
9.1 Events of Dissolution. 43
9.2 Not Dissolution. 43
9.3 Procedure for Winding Up and Dissolution. 43
9.4 Termination. 43
Article X
BOOKS, RECORDS, AND ACCOUNTING 44
10.1 Bank Accounts. 44
10.2 Books and Records. 44
10.3 Annual Accounting Period. 44
10.4 Reports. 45
10.5 Tax Matters Partner. 46
10.6 Tax Elections and Deductions. 46
10.7 Title to Partnership Property. 46
Article XI
AMENDMENTS; GENERAL PROVISIONS 47
11.1 Assurances. 47
11.2 Complete Agreement; Annex and Exhibits. 47
11.3 Applicable Law. 47
11.4 Section Titles. 47
11.5 Binding Provisions. 47
11.6 Notices. 47
11.7 Terms. 49
11.8 Severability of Provisions. 49
11.9 Alternative Dispute Resolution. 49
11.10 Counterparts. 51
11.11 Estoppel Certificate. 51
11.12 Amendment. 51
11.13 Consents. 51
11.14 Legends. 51
11.15 Parties in Interest. 51
11.16 Counting of Time. 52
11.17 English Language. 52
11.18 Exhibits 52
EXHIBITS
Exhibit A Partner's Names, Percentage and Capital
Contributions
Exhibit B Alternative Dispute Resolution Procedures
Exhibit C Forms of Operative Agreements
PARTNERSHIP AGREEMENT
THIS PARTNERSHIP AGREEMENT (this "Agreement") is effective as of November
20, 1998 (the "Effective Date") by and between Uniroyal Chemical Co./Cie
("Uniroyal-CA"), an unlimited liability company organized under the laws of
the Province of Nova Scotia, Canada and Bayer Inc. ("Bayer-CA"), a corporation
organized under the laws of Canada and those parties listed on Exhibit A as
the same may be amended from time to time.
NOW, THEREFORE, for good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the parties, intending legally to be
bound, agree as follows:
Article I
DEFINITIONS
The following capitalized terms shall have the meanings specified in this
Article I. Other terms are defined in the text of this Agreement, and,
throughout this Agreement, those terms shall have the meanings respectively
ascribed to them.
"AAA" shall have the meaning given to such term in Section 4.13.2.
"Act" means the Partnership Act (Ontario), as the same may be amended from
time to time.
"Active Ingredient" or "Active Ingredients" means any and all naturally
occurring or synthetically produced substances, compounds, mixtures, or
Biologicals, whether now existing or hereafter developed, which prevent,
destroy, repel or mitigate any Pest, or accelerate or retard the rate of
growth, germination or maturation, or otherwise protect, or alter the behavior
of, seeds, stored grains, or plants or the products thereof, whether now
existing or hereafter developed.
"Affiliate" or "Affiliates" means, with respect to any Person, any other
Person directly or indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with, such first mentioned Person. As
used in this definition of Affiliate, the term "control" (including "controlled
by", or "under common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities, as
trustee, by contract or otherwise.
"Agency" or "Agencies" means individually and collectively, (i) the Canadian
Federal Departments of Agriculture and Agri-Food, the Environment and Health,
and any other federal, local, provincial or other governmental or regulatory
agency in Canada which now regulates, or may in the future regulate, the use,
development, registration or sale of Active Ingredients or Formulations; and
(ii) the Canadian Intellectual Property Office, and any other federal, local,
provincial or other governmental or regulatory agency in Canada which now
regulates, or may in the future regulate, the protection, use or registration of
Technology.
"Agreement" shall have the meaning given to such term in the Preamble.
"Beneficial Owner" (including with correlative meanings, the term
"Beneficially Owned") means with respect to any Capital Stock, any Person who
would be deemed a Beneficial Owner under Rule 13d-3 (or any successor rule of
similar import) under the United States Securities Exchange Act of 1934, as in
effect on the date in question.
"Biological" or "Biologicals" means any and all naturally occurring or
synthetically produced biological organisms which prevent, destroy, repel or
mitigate any Pest, or accelerate or retard the rate of growth, germination or
maturation, or otherwise protect, or alter the behavior of, seeds, stored
grains or plants or the products thereof.
"Board" means the Partner representative committee consisting of individuals
appointed by the Partners to serve as Representatives pursuant to the
provisions of Article IV.
"Bona Fide Offer" means a written offer to purchase all of a Selling Partner's
Partnership Interest made by a Person who is not an Affiliate of the Selling
Partner, containing at least the following terms of purchase: the offered
price, payment terms, closing date and any significant closing conditions.
"Calculated Purchase Price" means, as to any party's Partnership Interest, an
amount equal to the Calculated Purchase Price of the Partnership multiplied by
the percentage ownership interest in the Partnership represented by such
Partnership Interest. Calculated Purchase Price, as to the Partnership, shall
mean an amount denominated in United States dollars, equal to the product of
(a) the total EBIT of the Partnership for the twenty-four (24) month period
preceding the date of the revised Soliciting Offer divided by two (2) and (b)
13.7.
"Canadian GAAP" means Canadian generally accepted accounting principles,
consistently applied.
"Capital Account" shall have the meaning given to such term in Section 3.6.
"Capital Contribution" means the total amount of cash and the fair market
value of any other assets contributed to the Partnership by a Partner, net of
liabilities assumed by the Partnership or to which the assets are subject.
"Capital Stock" means any and all (i) shares, interests, units, participations
or other equity equivalents of or equity interests (however designated) in any
Person including preferred or preference shares, (ii) partnership interests
(whether general or limited) in any Person which is a partnership, (iii)
membership interests or limited liability company interests in any limited
liability company, and (iv) other equity or ownership interests in any Person.
"Capital Transaction" means any transaction not in the ordinary course of
business that results in the Partnership's receipt of cash or other
consideration other than Capital Contributions, including, without limitation,
proceeds of sales or exchanges or other dispositions of property not in the
ordinary course of business, financings, refinancings, condemnations, recoveries
of damage awards, and insurance proceeds.
"C&K" means Crompton & Xxxxxxx Corporation, a corporation organized under the
laws of the Commonwealth of Massachusetts, United States.
"Change of Control" shall mean, with respect to any Partner:
(i) any event upon which any Person, other than an Affiliate of such
Partner, becomes the Beneficial Owner of Capital Stock representing: (a)
greater than fifty percent (50%) of the Voting Power of such Partner, or its
Parent; or
(b) greater than thirty percent (30%) of the Voting Power of such Partner or
its Parent if any Capital Stock in such Partner or its Parent is Publicly Traded
and if no other Person, immediately after the occurrence of such event, is the
Beneficial Owner of more than thirty percent (30%) of the Voting Power of such
Partner or its Parent; in either of (a) or (b), if and only if such Person
and/or any of its Affiliates is engaged in a Crop Protection Business or is
under an obligation to acquire a Crop Protection Business from other than a
Partner or its Affiliates; and/or
(ii) any event upon which any Person(s), other than an Affiliate of
such Partner, becomes the Beneficial Owner of Capital Stock representing: (a)
greater than fifty percent (50%) of the Voting Power of such Partner, or its
Parent; or
(b) greater than thirty percent (30%) of the Voting Power of any such Partner
or its Parent if any Capital Stock in such Partner or its Parent is Publicly
Traded and if no other Person, immediately after the occurrence of such event,
is the Beneficial Owner of more than thirty percent (30%) of such Voting Power;
in either of (a) or (b), if and only if the direct or indirect ownership of the
Partnership Interest of such Partner constitutes all or substantially all of
the assets of such Partner, or its Parent whose Capital Stock is the subject of
this provision; and/or
(iii) the sale, transfer or other disposition (in one transaction or
a series of transactions) to any Person(s), other than an Affiliate of such
Partner, of all or a material part of the assets of the Crop Protection
Business of such Partner and its Affiliates, taken as a whole as of the
Effective Date of this Agreement, used in the development and manufacture of
Active Ingredients and Formulations with applications to Seed Treatment; and/or
(iv) any event upon which any Person(s), other than an Affiliate of
such Partner, becomes the Beneficial Owner (in one transaction or a series of
transactions) of Capital Stock representing: (a) greater than fifty percent
(50%) of the Voting Power of any Affiliate(s) of such Partner, other than a
Parent (an "Indirect Affiliate"); or (b) greater than thirty percent (30%) of
the Voting Power of any such Indirect Affiliate if any Capital Stock of such
Indirect Affiliate or Parent is Publicly Traded and if no other Person,
immediately after the occurrence of such event, is the Beneficial Owner of more
than thirty percent (30%) of such Voting Power; in either of (a) or (b) if
and only if such Indirect Affiliate(s) owns all or a material part of the
assets of the Crop Protection Business of such Partner and its Affiliates, taken
as a whole as of the Effective ate of this Agreement, used in the development
and manufacture of Active Ingredients and Formulations with applications to Seed
Treatment; and provided, however, the provisions of items (ii), (iii) and (iv)
above notwithstanding, that the sale, transfer, or other disposition, directly
or indirectly, by way of Beneficial Ownership or otherwise to a Person (in one
transaction or a series of related transactions) of ownership or control of both
(1) all or substantially all of the assets of the Crop Protection Business of
such Partner and its Affiliates taken as a whole as of the Effective Date of
this Agreement and (2) the Partnership Interest of such Partner, shall not
constitute a Change of Control for purposes of this Agreement if such Person and
/or any of its Affiliates is not engaged in the Crop Protection Business; and
further provided, however, the provisions of items (i) through (iv) and the
first proviso above notwithstanding, that any spin-off, restructuring or other
transaction in which all or substantially all of the Crop Protection Business of
such Partner and its Affiliates taken as a whole as of the Effective Date of
this Agreement becomes owned (x) by an independent company or (y) by a joint
venture company whether operated as a corporation, limited liability company,
partnership, limited partnership or other form of entity, in which independent
company or joint venture such Partner or Affiliate thereof owns fifty percent
(50%) or more of the Capital Stock or Voting Power therein, shall not in any
such case constitute a Change of Control, if such independent company or joint
venture company undertakes in writing, in a form and substance reasonably
satisfactory to the other Partner, to perform the obligations of an Affiliate
pursuant to the Marketing Agreement and the Post-Exercise Agreement.
"Change of Control Notice" shall have the meaning given to such term in
Section 8.3.
"Compete" or "Competes" means to materially compete in all or a portion of the
Seed Treatment business, or to take substantial steps to materially compete in
all or a portion of the Seed Treatment business.
"Competitor" means a Person that Competes in Canada, either directly or
indirectly.
"Confidential Information" means all confidential and/or proprietary
information of a Person (the "Owning Person"), whether arising under statute,
common law or otherwise, whether belonging wholly or in part to the Owning
Person, and whether subject to license or other grant of rights by or to the
Owning Person as licensor or as licensee; but specifically excluding information
that is generally known to those skilled in a chemical or life sciences field,
including without limitation, the agrochemical field, and information as to a
Person (a "Receiving Person"), and only as to such Receiving Person, that (1) is
lawfully known to such Receiving Person prior to the disclosure by the Owning
Person to such Receiving Person; (2) is lawfully acquired by such Receiving
Person, rightfully furnished to such Receiving Person, or Publicly Available to
such Receiving Person; (3) is information which such Receiving Person can
document is independently developed by such Receiving Person; (4) is lawfully
reverse engineered by such Receiving Person; or (5) is required to be disclosed
by such Receiving Person pursuant to law, provided such Receiving Person uses
reasonable efforts to give the Owning Person reasonably detailed prior notice of
such required disclosure and an opportunity to oppose such disclosure.
"Covered Partnership Person" shall have the meaning given to such term in
Section 7.1.
"Covered Partner Person" shall have the meaning given to such term in Section
7.5.
"Crop Protection Business" means the manufacture, sale or distribution of
Active Ingredients, Formulations, Equipment or Other Products and/or Services.
"Cross License Agreement" means the Technology Cross License Agreement dated
as of the date of this Agreement by and between Agro ST Inc. and the
Partnership.
"Deadlock" means a situation where there is more than one (1) Partner, and a
matter presented to the Board at a meeting or by a proposed written consent
has been considered and voted on by the Board, and thirty (30) days after the
date of the first vote on the matter, there continues to be a failure of the
Board to reach a decision with respect to such matter, because the voting
Representatives are divided, with three (3) voting Representatives voting in
favor of the matter or abstaining from voting, and three (3) voting
Representatives voting against such matter or abstaining from voting.
"Dispute" means any dispute, controversy or claim arising out of or relating
to this Agreement, including without limitation, an alleged failure of a Partner
to perform any of its obligations under this Agreement, or any claim which
relates to the Confidential Information of any Partner, but, specifically
excludingtherefrom, a Deadlock. For purposes of this Agreement, any
disagreement as to whether any dispute, controversy or claim is a "Dispute" to
be resolved pursuant to Section 11.9 hereof or a "Deadlock" to be resolved
pursuant to Section 4.13 hereof shall be deemed to be a "Dispute".
"Distribution" or "Distributions" means any cash paid to a Partner by the
Partnership from the operations or capital of the Partnership, other than for
the payment for goods, equipment, property or services.
"Distributor Agreement" means the Distributor Agreement to be dated as of the
Closing Date by and between Uniroyal-CA and the Partnership.
"EBIT" means for any period, net income or loss, plus, to the extent deducted
in computing net income, interest payments and income taxes paid and/or accrued
during such period.
"Effective Date" shall have the meaning given to such term in the Preamble.
"Equipment" means any and all equipment (i) of a Partner or its Affiliates
that is specifically designed for or directly applicable to Seed Treatment uses
or applications, and (ii) that the Partnership has the right to manufacture,
develop, market or sell whether for Seed Treatment uses and applications or
for other than Seed Treatment uses or applications, including without limitation
seed treaters, size rights, screens, cylinders and samplers.
"Fair Market Value"means, as to any Partner's Partnership Interest, an amount
equal to the Fair Market Value of the Partnership multiplied by the Percentage
Interest of such Partner. Fair Market Value, as to the Partnership, shall
mean the cash fair market value that an unrelated person would pay for a one
hundred percent (100%) interest in the Partnership, in light of all relevant
factors, in an arm's length transaction in which neither party is compelled to
buy or sell, and without any discount or premium representing control of the
enterprise. The Fair Market Value of the Partnership shall be determined using
a valuation methodology that values the Partnership as a going concern and does
not take into account any diminution in value caused by the withdrawal of either
party from the Partnership or the dissolution of the Partnership in accordance
with Article IX.
The parties shall cooperate with all reasonable requests from the Neutral
Investment Bank for information necessary for the making of any such
determination.
"Firm" shall have the meaning given to such term in Section 4.13.4.1.1.
"Fiscal Period" means the fiscal period (as that term is defined in the ITA)
of the Partnership.
"Fiscal Year" means the fiscal year of the Partnership, which shall be the
year ending the Saturday in December closest to the last day of December.
"Formulation" or "Formulations" means a substance or compound, or mixture of
substances or compounds, which include one or more Active Ingredients, whether
now existing or hereafter developed.
"GAAP Loss" shall have the meaning given to such term in the Annex.
"GAAP Profit" shall have the meaning given to such term in the Annex.
"Governing Body" shall have the meaning given to such term in Section 7.14.4.
"Xxxxxxxxx LLC" means the limited liability company formed under the laws of
the State of Delaware, United States of America, with such name.
"ITA" means the Income Tax Act (Canada), as the same may be amended from time
to time.
"IBank Value" shall have the meaning given to such term in Section 8.1.1.4.
"Initial Capital Contribution" shall have the meaning given to such term in
Section 3.1.
"Initial Partner" or "Initial Partners" means Uniroyal-CA and Bayer-CA.
"Initial Period" shall have the meaning given to such term in Section 4.13.3.
"Interest" means an Interest Holder's share of the profits and losses of the
Partnership and right to receive Distributions from the Partnership; but,
specifically excluding any Partnership Rights.
"Interest Holder" means any Person who holds an Interest, whether as a Partner
or as an unadmitted assignee of a Partner.
"Interest Offer" shall have the meaning given to such term in Section 8.2.2.
"Interest Seller" shall have the meaning given to such term in Section 8.2.3.
"Invest or Participate" means: (a) to acquire as a principal, partner,
shareholder, member, Beneficial Owner or in any similar capacity, Capital
Stock in a Person in excess of five percent (5%) of the total Capital Stock of
such Person; or (b) by contract or otherwise, to manage, operate or finance a
Person, or to participate in the management, operation or financing of a Person,
or to act as agent, representative, consultant or in any similar capacity for a
Person, or to permit a Person to use the name of a Partner or its Affiliate.
"Involuntary Transfer" means each of the following: (i) the issuance of a
receiving order against the Partner by a court of competent jurisdiction
pursuant to any petition filed against the Partner under the Bankruptcy and
Insolvency Act (Canada) (the "BIA"); (ii) the issuance of an order by a court of
competent jurisdiction on an initial application made with respect to the
Partner pursuant to the Companies' Creditors Arrangement Act (Canada); (iii) the
issuance of a winding-up order by a court of competent jurisdiction with respect
to the Partner pursuant to the Winding-Up and Restructuring Act (Canada); (iv)
the issuance of an order pursuant to the commencement against the Partner of any
proceedings under any bankruptcy, arrangement, reorganization, dissolution,
liquidation, insolvency, winding-up or similar law now or hereafter in effect,
for the relief from or otherwise affecting creditors of the Partner; (v) the
appointment of a receiver, receiver-manager, interim receiver, monitor,
liquidator, assignee, custodian, trustee, sequestrator or other similar agent
for the Partner or for any substantial part of the Partner's assets or property;
(vi) the commencement of a winding-up, liquidation or dissolution of the
Partner's affairs; (vii) the filing with respect to the Partner of a petition in
bankruptcy, which petition is not dismissed or withdrawn within a period of
thirty (30) days from the dateof its filing; (viii) the commencement by the
Partner of any proceedings under any bankruptcy, arrangement, reorganization,
dissolution, liquidation,insolvency, winding-up or similar law now or hereafter
in effect, for the relief from or otherwise affecting creditors of the Partner;
(ix) the consent by the Partner to the issuance of any order referred to in (i),
(ii), (iii) or (iv) herein or to the appointment of or taking possession by a
receiver, receiver- manager, interim receiver, monitor, liquidator, assignee,
custodian, trustee, sequestrator or other similar agent for the Partner or for
any substantial part of the Partner's assets or property; (x) the making by the
Partner of any assignment for the general benefit of creditors, including
without limitation any assignment made pursuant to the BIA; (xi) the failure by
the Partner to meet its liabilities generally as they become due; (xii) the
entry of an order of garnishment, attachment, charging order, execution,
warrant, sequestration, levy, third party demand or similar proceedings by any
Person who or that has a pledge of or has been granted a lien, security
interest, charge or other encumbrance in or against the Interests; or (xiii) any
other divestiture of a Partner by court order, self-help or other private
action.
"LLC Agreement" means that certain Limited Liability Company Agreement of
Xxxxxxxxx LLC effective as of September 23, 1998, as amended.
"Majority Vote" means (i) in the case of a reconstituted board pursuant to
Section 4.13.3, the affirmative vote of at least three (3) of the five (5)
Representatives on the Board (excluding the President); and (ii) in all other
cases, the vote of at least four (4) of the six (6) Representatives on the
Board (excluding the President), in all cases at a meeting of which a quorum of
Representatives is participating in person, by conference telephone, video or
similar communications equipment or by proxy.
"Marketing Agreement" means that certain Marketing Rights and Margin Agreement
by and among C&K, the Partnership, Xxxxxxxxx LLC, Bayer Corporation and
Bayer-CA dated as of the date of this Agreement.
"Member" shall have the meaning given to such term in the LLC Agreement.
"Neutral Investment Bank" means an investment banking firm of international
reputation which has not been engaged by a Partner or its Affiliates (a) at
any time regarding matters related to the Partnership; and (b) in the last two
(2) years for any other matter, and which the Partner and its Affiliates agree
not to engage in the subsequent two (2) years.
"Non-Notifying Partner" shall have the meaning given to such term in Section
8.3.
"NonSoliciting Partner" shall have the meanings given to such term in Section
8.1.1 and Section 8.1.2, respectively.
"NonSuffering Partner" shall have the meaning given to such term in Section
8.2.1.
"Notifying Partner" shall have the meaning given to such term in Section 8.3.
"Offered Interest" shall have the meaning given to such term in Section 8.2.2.
"Offered Interest Notice" shall have the meaning given to such term in Section
8.2.1.
"Operative Agreements" means the Marketing Agreement, the Pre-Exercise
Agreement, the Post-Exercise Agreement and the Cross License Agreements, the
forms of each of which are attached hereto as Exhibit C, and incorporated herein
by reference.
"Other Products and/or Services" means (i) any products for Seed Treatment
uses or applications other than Active Ingredients, Formulations and Equipment,
including without colorants, dyes, pigments and coatings; and (ii) any
activities of the Partnership, other than those activities set forth in Sections
4.2 and 4.3 of the Pre-Exercise Agreement and the Post-Exercise Agreement,
specifically designed for or directly applicable to Seed Treatment uses or
applications.
"Parent" means, as to a Partner, any Person which is the direct or indirect
Beneficial Owner of fifty percent (50%) or more of the Capital Stock, having
Voting Power, of such Partner.
"Partner" or "Partners" means the Initial Partners signing this Agreement and
any Person who subsequently is admitted as a partner of the Partnership.
"Partner Vote" means, in the case of two Partners, the unanimous affirmative
vote of both Partners.
"Partnership" means the general partnership formed in accordance with this
Agreement.
"Partnership Interest" means a Partner's entire interest in the Partnership,
including without limitation, a Partner's Interest and a Partner's Partnership
Rights.
"Partnership Rights" means the right to: (i) inspect the Partnership's books
and records; (ii) appoint Representatives and to participate in the business,
affairs and management of the Partnership; and (iii) vote on, consent to or
otherwise participate in any decision or action of the Partners pursuant to this
Agreement or the Act; provided, however, that Partnership Rights does not
include any right to disclosure of the existence of any arrangements or
agreements, or any terms thereof, that are protected by confidentiality, secrecy
or similar agreements with third parties, or any other arrangements or
agreements that, if disclosed, would result in the Partnership being in breach
of such arrangements or agreements.
"Percentage" means, as to a Partner, the percentage represented by the
relationship of such Partner's Units to the total number of Units outstanding
and, as to an Interest Holder who is not a Partner, the percentage of the
Partner whose Interest has been acquired by such Interest Holder, to the extent
the Interest Holder has succeeded to that Partner's Interest.
"Percentage Interest" in the Partnership means, as to a Partner, the Partner's
Interest represented as a percentage that such Partner's Units are to the
total number of Units outstanding and, as to an Interest Holder who is not a
Partner, the percentage interest of the Partner whose Interest has been acquired
by such Interest Holder, to the extent the Interest Holder has succeeded that
Partner's Interest.
"Person" means any individual, corporation, governmental authority, limited
liability company, unlimited liability company, partnership, trust, estate,
unincorporated association or other entity.
"Pest" means any plant, animal or other organism, when and if determined by an
Agency to be deleterious to man or the environment.
"Post-Exercise Agreement" means the Post-Exercise Distribution and Technology
License Agreement dated as of the date of this Agreement by and among
Uniroyal-CA, Bayer-CA and the Partnership.
"Pre-Exercise Agreement" means the Pre-Exercise Distribution and Technology
License Agreement dated as of the date of this Agreement by and between
Uniroyal-CA and the Partnership.
"Price" shall have the meaning given to such term in Section 8.2.3.
"Price Notice" shall have the meaning given to such term in Section 8.2.3.
"Proposed Purchase Price" shall have the meaning given to such term in Section
8.1.1.1.
"Publicly Available" means that the information in question is available from
a public source; provided, however, information shall not be deemed to be
Publicly Available to a Person unless the Person contending the information is
Publicly Available (i) has lawfully acquired such information through
experimentation, research or other appropriate method of acquisition, and (ii)
if the form in which the information is held by the Person on a particular date
has commercial value, has acquired such information in the same form in which it
is held on such date.
"Publicly Traded" when used in reference to any Capital Stock at any given
date, means Capital Stock which is listed or authorized for quotation on the New
York Stock Exchange, the American Stock Exchange, the National Market System of
the Nasdaq Stock Market (or any successor to such entities) or any recognized
Canadian stock exchange or listed on or included into the free market of any
of the Xxxxxxxxx, Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxx or Berlin stock
exchanges.
"Purchase and Contribution Agreement" means that certain Purchase and
Contribution Agreement by and between Uniroyal-CA and Bayer-CA dated as of
November , 1998.
"Representative" or "Representatives" means the individuals from time to time
designated pursuant to Article IV of this Agreement as members of the Board.
"Revised Soliciting Offer" shall have the meaning given to such term in
Section 8.1.1.5.
"Seed Treatment" means any and all uses or applications of Active Ingredients,
Formulations, Equipment, and Other Products and/or Services, in connection
with stored grains or seeds for agricultural purposes, whether now existing or
hereinafter developed.
"Solicitation Period" shall have the meaning given to such term in Section
8.1.1.6.
"Soliciting Offer" shall have the meaning given to such term in Section 8.1.1.
"Soliciting Partner" shall have the meanings given to such term in Section
8.1.1 and Section 8.1.2, respectively.
"Subsidiary" means individually and collectively, Agro ST Inc., a corporation
organized under the laws of the State of Delaware, United States of America,
and Industrias Xxxxxxxxx X.X. DE C.V., a corporation organized under the laws of
Mexico, each a wholly owned subsidiary of Xxxxxxxxx LLC.
"Suffering Partner" shall have the meaning given to such term in Section
8.2.1.
"Tax Matters Partner" shall have the meaning given to such term in Section
10.5.
"Technology" means all forms of intellectual property, including without
limitation, copyrights, copyright applications, patents, patent applications,
inventions, industrial designs, processes, production methods, proprietary
information, know-how, trade secrets, information, trademarks, trademark
applications, trade names, logos and slogans, identification lists, product
and technical labels, data, including registration data and Agency data, plans,
blueprints, specifications, designs, manufacturing information, formulation
recipes and techniques, seed safety information, seed testing techniques,
efficacy data, environmental, residue, toxicology and product chemistry
information, discoveries, drawings, recorded knowledge, techniques, ideas,
concepts, surveys, engineering reports, test reports and procedures, manuals,
materials standards, process standards, performance standards, catalogs, flow
charts, formulation or technical registrations, work techniques, circuit
topographies, computer and automatic machinery software and programs, related
object and source code and the like whether or not protected or protectable by
patent, copyright, trademark, trade secret or other proprietary rights or by
any Agency; but specifically excluding Technology that is generally known to
those skilled in a chemical or life sciences field, including without
limitation, the agrochemical field.
"Third Party" or "Third Parties" means any and all Persons other than the
Partnership, Xxxxxxxxx LLC, a Partner, a Member (as that term is defined in
the LLC Agreement) or any of their respective Affiliates.
"Third Party Soliciting Offer Notice" shall have the meaning given to such
term in Section 8.1.2.
"Transfer" means, when used as a noun, any voluntary sale, hypothecation,
pledge, assignment, or other transfer by a Partner and, when used as a verb,
means for a Partner to voluntarily sell, hypothecate, pledge, assign, or
otherwise transfer.
"Transferee" means a Person who is the assignee, purchaser or transferee of an
Interest.
"Units" means the number of units of income, gain, loss and deduction of a
Partner or Interest Holder, as the case may be as determined by agreement
between the Partnership and the Partners or Interest Holders from time to time.
The Initial Partners shall be allocated fifty (50) Units each.
"Voting Power" (which term includes the power to vote or to direct the voting
of) when used in reference to any Capital Stock shall mean the power of the
holders of such Capital Stock generally to vote, with respect to any Person
which is a corporation, for the election of members of the board of directors
and, with respect to any other Person that is not a corporation, for the members
of the Governing Body of such other Person.
Article II
FORMATION AND PURPOSE
2.1 Formation.
Uniroyal-CA and Bayer-CA hereby form a partnership under the laws of
Ontario for the purposes set forth in and in accordance with the provisions of
this Agreement.
2.2 Name of the Partnership.
The name of the Partnership shall be "Xxxxxxxxx Partnership", until
changed by the Board. The Partnership may do business under that name and under
any other name or names that the Board selects. The Partnership shall register
any names under which it does business as required by all applicable laws.
2.3 Purpose.
The Partnership is formed solely for the purposes of developing,
formulating, manufacturing, registering, marketing and selling Active
Ingredients, Formulations, Equipment and Other Products and/or Services for
Seed Treatment uses and applications in Canada, and to do any and all things
necessary, convenient or incidental thereto. Unless both Partners consent, or
unless specifically permitted by the Operative Agreements, the Partnership
shall have no authority to carry on any other business.
2.4 Term.
The term of the Partnership shall begin upon the date of this Agreement
and shall be perpetual, unless its existence is sooner terminated pursuant to
this Agreement.
2.5 Principal Office.
The principal office of the Partnership shall be located at Bay 10, 0000-
00xx Xxxxxx X.X., Xxxxxxx, Xxxxxxx X0X 0X0 or elsewhere that the Board
selects.
2.6 Partners.
The name, Percentage and Capital Contribution of each Partner is set
forth on Exhibit A.
Article III
CAPITAL
3.1 Initial Capital Contributions.
Each Partner shall contribute as the "Initial Capital Contribution" to be
made by it the cash, obligations, other property or services set forth in the
column headed "Initial Capital Contribution" on Exhibit A to this Agreement.
The fair market value (as determined by the Board) of the Initial Capital
Contribution of each Partner shall be recorded by the Board as a contribution
to the capital of the Partnership.
3.2 No Additional Capital Contributions Required .
No Partner shall be obligated, nor shall any Partner have a right, to
contribute any additional capital to the Partnership, except with the prior
consent of both Partners.
3.3 No Interest on Capital Contributions; Deficit Account.
Interest Holders shall not be paid interest on their Capital
Contributions. Except as otherwise required by this Agreement, no Interest
Holder shall have any liability to restore all or any portion of a deficit
balance in a Capital Account.
3.4 Return of Capital Contributions.
Except as otherwise provided in this Agreement, no Interest Holder shall
have the right to receive any return of any Capital Contribution.
3.5 Form of Return of Capital.
If a Partner is entitled to receive a return of a Capital Contribution,
the Interest Holder shall not have the right to receive anything but cash in
return of the Interest Holder's Capital Contribution.
3.6 Capital Accounts.
An account ("Capital Account") shall be maintained by the Partnership for
each Interest Holder in accordance with the following provisions:
3.6.1 An Interest Holder's Capital Account shall be credited with the fair
market value (as determined by the Board) of the Interest Holder's Capital
Contributions, the amount of any Partnership liabilities assumed by the
Interest Holder (other than liabilities secured by Partnership property
distributed to the Interest Holder), and the Interest Holder's allocable share,
as determined by the Partnership in accordance with this Agreement, of GAAP
Profit.
3.6.2 An Interest Holder's Capital Account shall be debited with the amount
of money and the fair market value (as determined by the Board) of any
Partnership property distributed by the Partnership to the Interest Holder
(net of Partnership liabilities secured by such distributed property that such
Interest Holder assumes or takes subject to), the amount of the Interest
Holder's individual liabilities that are assumed by the Partnership (other than
liabilities that reduce the amount of any Capital Contribution made by such
Interest Holder), the Interest Holder's allocable share, as determined by the
Partnership in accordance with this Agreement, of GAAP Loss.
3.6.3 If any Interest is transferred pursuant to the terms of this Agreement,
the Transferee shall succeed to the Capital Account of the transferor to the
extent the Capital Account is attributable to the transferred Interest.
3.7 Allocations of income and loss for income tax purposes.
The income, gains and losses of the Partnership, as determined for income
tax purposes from time to time, shall be allocated among the Interest Holders
according to their Percentage Interest, subject to the provision of the Annex.
If any Interest in the Partnership is transferred during a Fiscal Period, the
allocations contemplated by this Article 3 and by the Annex shall be made as
between the transferee and the transferor as may be agreed between the
transferee and the transferor or, failing such agreement, all relevant amounts
in respect of that portion of such Fiscal Period up to and including the
effective date of such transfer shall be allocated to the transferor and all
such amounts in respect of that portion of such Fiscal Period from and after the
effective date of such transfer shall be allocated to the transferee.
3.8 Currency.
All Capital Contributions to be made to, and Distributions to be paid by,
the Partnership pursuant to this Agreement shall be made in the currency of
Canada. All other payments to be made or calculated pursuant to this
Agreement shall be made and calculated in the currency referred to in the
relevant provision of this Agreement.
3.9 Distributions.
Distributions other than Distributions upon liquidation shall be made to
the Partners in proportion to their Percentage Interest and may be made in cash
or in kind. Distributions upon liquidation shall be made to the Partners as
provided in Section 9.3.
Article IV
MANAGEMENT
4.1 Board of Representatives.
The Board of Representatives shall manage and control, and supervise the
management of the business and affairs of the Partnership, and shall act
together as a group. The Representatives shall have such rights, duties and
powers as are specified in this Agreement.
4.1.1 The Representatives, acting as a Board, have the sole, full and
complete authority, power and discretion to manage and control the business,
affairs and properties of the Partnership, to make all decisions regarding those
matters and to perform any and all other acts or activities necessary or
appropriate to the management of the Partnership's business.
4.1.2 The Board shall have the power to delegate responsibilities and
authority to subcommittees of the Board or such officers as may be appointed by
the Board pursuant to Article VI from time to time, with such general or
specific authority to make any contracts, enter into any transaction, and make
and obtain any commitments on behalf of the Partnership and to otherwise conduct
or further the Partnership's business.
4.1.3 Without limiting the generality of Sections 4.1.1 or 4.1.2, the taking
of any of the following actions by the Partnership shall require the approval
of a Majority Vote of the Board:
4.1.3.1 Review and approval of the budget for the Partnership for each Fiscal
Year, and the annual business and midterm strategic plan for the Partnership
and any subsidiaries thereof.
4.1.3.2 Creation or dissolution of any subsidiaries of the Partnership.
4.1.3.3 Establishment or modification of the Partnership's capital
expenditures budget.
4.1.3.4 Appointment, removal and compensation of the Partnership's President
and other officers.
4.1.3.5 Establishment, modification or termination of the Partnership's
compensation and benefit programs for all employees.
4.1.3.6 Establishment or modification of the Partnership's Distribution
policies.
4.1.3.7 Incurrence of or payment by the Partnership of any expenses for any
capital project that exceeds or is estimated to exceed CDN$200,000.
4.1.3.8 Creation, amendment, termination or modification of any arrangement,
agreement or contract between the Partnership or a Subsidiary and (i) any
Partner, Xxxxxxxxx LLC, a Subsidiary or any Member, (ii) an Affiliate of a
Partner, Xxxxxxxxx LLC, a Subsidiary or a Member, or (iii) an employee,
executive officer or director or other board member or representative of a
Partner,Xxxxxxxxx LLC, a Member or a Subsidiary; provided however that any
sublicense under the Cross License Agreement must be approved by the unanimous
consent of the Board and provided further that any changes in Prices made
pursuant to Article 7 of the Pre-Exercise Agreement shall not require the
Board's approval to be effective; and provided further that any changes to the
Prices (as defined in the Marketing Agreement) agreed to by the Partnership or
a Subsidiary and (i) any Partner, Xxxxxxxxx LLC, a Subsidiary or any Member, or
(ii) an Affiliate of a Partner, Xxxxxxxxx LLC, a Subsidiary or a Member pursuant
to Section 4 of the Marketing Agreement shall not require the Board's approval
to be effective.
4.1.3.9 An acquisition or disposition of any business of the Partnership and
approval of any financing associated with such acquisition or disposition.
4.1.3.10 Entrance into, or any modification of, any material research or
development contract or obligation by the Partnership that would result in the
Partnership exceeding the approved research or development budget by more than
CDN$200,000.
4.1.3.11 Making of any loan or advance or giving any credit by the
Partnership in excess of CDN$100,000, excluding trade credit, or any
modification of the terms thereof.
4.1.3.12 Borrowing of money for and on behalf of the Partnership or any
subsidiary, which borrowing may in the aggregate exceed CDN$100,000, or any
modification of the terms thereof, excluding trade credit.
4.1.3.13 Grant of any mortgages, deeds of trust, security interests or other
liens, or executing and delivering any instruments to encumber any assets of
the Partnership or its subsidiaries, to secure repayment of amounts that in the
aggregate exceed CDN$100,000, or permitting any liens to exist against assets
of the Partnership or in amounts that in the aggregate exceed CDN$100,000.
4.1.3.14 Appointment of outside legal counsel or independent auditors.
4.1.3.15 Change of the accounting principles used by the Partnership.
4.1.3.16 Change of the Partnership's business philosophy.
4.1.3.17 Purchases by the Partnership in excess of CDN$2 million per order.
4.1.3.18 Modification of this Agreement or the certificate of incorporation,
by-laws or any other organizational documents of any subsidiary of the
Partnership.
4.1.3.19 Registration, marketing and development:
(i) any one product or registration, if the cost of
such registering, marketing, and developing is expected to exceed CDN$400,000 in
any one year; and
(ii) products and registrations, if the Partnership
has materially exceeded or will materially exceed the previously approved
budgets for registering, marketing and developing products; or if registering,
marketing and developing costs will, in the aggregate, exceed CDN$1 million for
the current Fiscal Year.
4.1.3.20 Acquisition by purchase, lease, or otherwise of any real property.
4.1.3.21 Entrance into any Capital Transaction.
4.1.3.22 Discontinuance of the Partnership's business.
4.1.3.23 Authorization of any restructuring, reorganization or
recapitalization of the Partnership and the material terms and provisions
thereof.
4.1.3.24 Settlement or confession of judgment in any legal matter exceeding
CDN$250,000.
4.1.3.25 Except as expressly provided in Article IX of this Agreement,
termination, dissolution, liquidation or winding-up of the Partnership.
4.1.3.26 Authorization to make all Partnership elections permitted under the
ITA, including without limitation, elections of methods of depreciation.
4.1.3.27 The issuance of additional Interests or Partnership Interests in the
Partnership or of debt securities of the Partnership.
4.1.4 Notwithstanding anything to the contrary in this Agreement or the
Operative Agreements, no Partner may use its position as a Partner on the
Board or its appointed Representatives on the Board to require that the
Partnership do any act that would require, or condition any contract, agreement
or arrangement with the other Partner or the other Partner's Affiliates on,
disclosure of the Confidential Information or Technology of one Partner or its
Affiliates to the other Partner, or the use of the Confidential Information or
Technology of one Partner or its Affiliates by the other Partner.
4.2 Representatives; Appointment.
4.2.1 Board. Except as provided in Section 4.13 of this Agreement, the Board
shall consist of seven (7) individuals: (i) six (6) Representatives, with each
Representative entitled to one vote, and (ii) the President of the
Partnership, who shall be a non-voting Representative.
4.2.1.1 Initial Appointment. Three (3) of the six (6) initial voting
Representatives of the Board shall be appointed by Uniroyal-CA and the other
three (3) of the initial voting Representatives shall be appointed by
Bayer-CA, and shall serve without additional compensation or benefits from the
Partnership.
4.2.1.2 Subsequent Appointments. Each year at the annual meeting of the
Partners held pursuant to Section 5.1.1, Uniroyal-CA shall be entitled to
appoint three (3) voting Representatives and Bayer-CA shall be entitled to
appoint three (3) voting Representatives. Each voting Representative shall
hold office for a one (1) year term, or until his earlier resignation or
removal in accordance with this Agreement. A voting Representative may be
reappointed for an unlimited number of terms.
4.2.1.3 Subsequent Transfers. Upon the Transfer by a Partner of all of its
Partnership Interest to a Person who is admitted as a Partner, the
transferring Partner shall cause the three (3) voting Representatives appointed
by such Partner to resign, effective upon the sale. Upon the resignation of the
three (3) such voting Representatives, and consummation of the sale, the newly
admitted Partner will be entitled to appoint three (3) Representatives to the
Board. Thereafter, the newly admitted Partner shall be entitled to appoint three
(3) voting Representatives and the non-transferring Partner shall be entitled
to appoint three (3) voting Representatives. Each voting Representative shall
hold office for a one (1) year term, or until his earlier resignation or removal
in accordance with this Agreement. A voting Representative may be reappointed
for an unlimited number of terms.
4.2.1.4 Appointment of President as Non-Voting Representative. The Board
shall appoint the President as a non-voting Representative.
4.2.2 Duty of Representatives. No Representative appointed pursuant to
Section 4.2 or serving as the non-voting Representative shall be liable to the
Partnership, the other Representatives or the Partners for monetary damages
for breach of fiduciary duty as a Representative or otherwise liable,
responsible or accountable to the Partnership, the other Representatives or the
Partners for monetary damages or otherwise for any acts performed, or for any
ailure to act; provided, however, that this provision shall not eliminate or
limit the liability of a Representative (i) for any breach of the
Representative's duty of loyalty to the Partner appointing such Representative,
(ii) for acts or omissions which involve intentional misconduct or a knowing
violation of law, (iii) for any transaction from which the Representative
received any improper personal benefit, or (iv) for disclosing Confidential
Information in violation of the provisions of this Agreement.
4.2.3 Duty of Seventh Voting Representative. No Representative appointed
pursuant to Section 4.13.3.2 shall be liable to the Partnership, the other
Representatives or the Partners for monetary damages for breach of fiduciary
duty as a Representative or otherwise liable, responsible or accountable to the
Partnership, the other Representatives or the Partners for monetary damages or
otherwise for any acts performed, or for any failure to act; provided, however,
that this provision shall not eliminate or limit the liability of such
Representative (i) for any breach of such Representative's duty of loyalty to
the Partnership, (ii) for acts or omissions which involve intentional
misconduct or a knowing violation of law, (iii) for any transaction from
which the Representative received any improper personal benefit, or (iv) for
disclosing Confidential Information in violation of the provisions of this
Agreement.
4.3 Power to Bind Partnership.
Unless specifically authorized to do so by this Agreement or by the
Majority Vote of the Board, no attorney-in-fact, Representative, officer,
employee or other agent of the Partnership shall have any power or authority
to bind the Partnership in any way, to pledge its credit or to render it
liable for any purpose. No Partner shall have any power or authority to
bind the Partnership unless the Partner has been specifically authorized by
a Majority Vote of the Board to act as an agent of the Partnership for that
specific purpose.
4.4 Vacancies.
Any vacancy occurring in the voting Representatives of the Board, whether
caused by death, resignation, removal or otherwise, may be filled only by the
Partner who originally appointed the vacating voting Representative. A voting
Representative appointed to fill a vacancy shall be appointed for the
unexpired term of his predecessor in office.
4.5 Quorum.
The presence, in person, by conference telephone, video or similar
communications equipment, or by proxy of four (4) voting Representatives,
including no less than two (2) voting Representatives from each Partner, shall
constitute a quorum for the transaction of business at a Board meeting. A
Majority Vote of the Board participating in a duly constituted meeting where
there is a quorum shall be the act of the Board, except as may be otherwise
specifically provided by the Act or this Agreement. In the absence of a
quorum, a majority of Representatives present may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present. At a reconvening of such adjourned meeting at which
a quorum shall be present, any business may be transacted that might have
been transacted at the meeting as originally noticed.
4.6 Meetings.
4.6.1 Regular Meetings. Regular meetings of the Board shall be held at such
times and places as the Board shall designate; provided, however, that for two
(2) years from the date of formation of the Partnership, the Board shall meet
at least four (4) times a year. Thereafter, the Board shall meet at least
annually.
4.6.2 Special Meetings. Special meetings of the Board may be called (i) by
the President, (ii) by a Partner, or (ii) at the request of three (3) voting
Representatives. Written or oral notice of special meetings shall be given to
all Representatives at least fourteen (14) days before the dates of such
meetings. No notice need be given to any Representative who attends in person
or to any Representative who, in a writing executed and filed with the records
of the meeting either before or after the meeting, waives such notice. Such
notice or waiver of notice need not state the purpose or purposes of such
meeting.
4.7 Action Without a Meeting.
Any action that may be taken at a meeting of the Board may be taken
without
a meeting if a consent in writing, setting forth the action so taken or to be
taken, shall be signed by all of the voting Representatives. Such consent
shall be filed with the minutes of the Board's meetings.
4.8 Proxy.
A Representative may grant a proxy entitling any other Representative
appointed by the same Partner to exercise his voting rights. Such proxy shall
be in writing and shall specify a termination date. The Representatives
appointed by the other Partner shall be entitled to inspect the proxy on
demand. Any proxy shall be filed with the minutes of the meeting.
4.9 Meeting by Telephone or Video Conference.
A Representative may participate in a meeting of the Board by means of
conference telephone, video or similar communications equipment enabling all
Representatives participating in the meeting to hear one another, and
participation in a meeting shall constitute presence in person at such
meeting.
4.10 Resignations and Removal.
Each Representative shall hold office at the pleasure of the Partner
appointing such Representative. The resignation of any Representative shall
be in writing and shall be effective immediately upon acknowledgment of receipt
by a Partner. Any Representative may be removed, with or without cause, as
follows:
(i) at any time, by the Partner that appointed such Representative; (ii) in
the case of the President, by a Majority Vote of the Board; or (iii) by the
request of the Partner that appointed such Representative, if such request
is made, in preparation of the admission of a newly admitted Partner, and
the appointment of Representatives by such newly admitted Partner as set
forth in Section 4.2.1.
4.11 Compensation and Expenses.
Representatives appointed pursuant to Section 4.2 shall serve without
additional compensation or benefits from the Partnership. Each Partner is
responsible for all expenses incurred by the voting Representatives appointed
by that Partner in connection with such Representatives' activities as a
Representative. The Partners shall share equally the reasonable compensation
for and expenses of the seventh voting Representative appointed pursuant to
Section 4.13.3.1.
4.12 Board Chairman.
The initial voting Representatives may elect from any of the initial
voting Representatives a Chairman of the Board. Thereafter, the Chairman of the
Board shall be a voting Representative appointed by the Partners as follows:
each year at the annual meeting of Partners held pursuant to Section 5.1.1,
the Chairman shall be appointed by a Partner, alternating yearly between
Uniroyal-CA and Bayer-CA. Except as provided in Section 4.13.3.3, the
Chairman shall have no additional vote other than his vote as a
Representative. The Chairman of the Board shall preside at all meetings of
the Board and shall perform such other duties as may be prescribed from time
to time by the Board and by this Agreement.
4.13 Deadlock.
4.13.1 Memorandum. If Deadlock occurs, a Partner may circulate a memorandum
to the other Partner and to the parent company of the other Partner by
registered mail, return receipt requested to the address for such other
Partner and such parent of such other Partner provided in Section 11.6
hereof, stating a summary of the issue, its proposed resolution of the
issue, and the considerations in support of such proposed resolution.
Such memorandum shall be considered by the president, a member of the board
of management or other senior executive (hereinafter "senior executive") of
the parent of the Partner. Within twenty (20) days of receipt of such a
memorandum by the parent of the Partner, the senior executives of the parent
of each Partner shall meet to negotiate in goodfaith a mutually satisfactory
resolution of the Deadlock.
4.13.2 Mediation. If such senior executives are not able to reach a mutually
satisfactory resolution of the Deadlock within thirty (30) days after the date
of the first such meeting, then the Partners shall attempt in good faith to
mediate a resolution to the Deadlock in accordance with the procedures set
forth in this Section 4.13 and Exhibit B, parts A and B, with a mediator that is
mutually acceptable to both Partners. If the Partners cannot agree on such a
mediator within such thirty (30) days, then either or both Partners may
request, by notice to the other Partner, that a mediator be appointed by the
American Arbitration Association ("AAA") to mediate the resolution of the
Deadlock.
4.13.3 Initial Period. For an initial period of five (5) years after the
date of formation of the Partnership ("Initial Period"), the following shall
apply:
4.13.3.1 Reconstitution. If a Deadlock has occurred, and there is no
resolution by Partners within ninety (90) days after the date that the
mediator is agreed to, or if no agreement is reached as to a mediator, then
within ninety (90) days after the date the mediator is appointed by AAA,
either or both Partners may elect by giving written notice to the other
Partner that the Board shall be reconstituted within sixty (60) days
thereafter as an eight (8) person board.
The reconstitution means that the six (6) voting Representatives shall be
removed by the Partners appointing such Representatives, and the following
appointments made: (i) each Partner shall appoint three (3) persons not
previously Representatives of the Partnership as voting Representatives;
(ii) a seventh Representative, independent of both Partners, shall be
appointed by mutual agreement of the Partners as a seventh voting
Representative; and (iii) the resident shall continue as a non-voting
Representative.
4.13.3.2 Seventh Voting Representative. If the Partners cannot mutually
agree
upon a seventh Representative within thirty (30) days after the date of such
reconstitution as provided in Section 4.13.3.1, then each Partner shall select
an independent person and the two (2) persons so chosen shall select the
seventh independent voting Representative. The seventh Representative shall
receive reasonable compensation to serve on the Board, to be paid as provided in
Section 4.11.
4.13.3.3 No Abstention. Following reconstitution of the Board as provided in
Sections 4.13.3.1 and 4.13.3.2, the Board shall vote on the issue which is the
subject of the Deadlock, within a reasonable period of time following the
reconstitution of the Board, but in no event later than three (3) months, and
no voting Representative (including the Chairman, if any) shall abstain from
voting on the issue which is the subject of the Deadlock.
4.13.3.4 Removal after Vote. After the vote on the issue which is the
subject of the Deadlock, the seventh and independent Representative may be
removed by a vote for such removal by any three (3) other voting
Representatives.
4.13.4 Post-Initial Period. If a Deadlock occurs after the expiration of the
Initial Period, and such senior executives are not able to reach a mutually
satisfactory resolution of the issue which is the subject of the Deadlock
within thirty (30) days of the first meeting of such senior executives, then the
Partners shall attempt in good faith to mediate a resolution to the Deadlock
in accordance with this Section 4.13 and Exhibit B, parts A and B, with a
mediator that is mutually acceptable to both Partners. If the Partners
cannot agree on such a mediator within such thirty (30) days after such
first meeting, one or both Partners may request, by notice to the other
Partner, that a mediator be appointed by the AAA to mediate the resolution
of the Deadlock.
4.13.4.1 Sale. In the event that a Deadlock continues for more than six (6)
months after the commencement of mediation in accordance with Section 4.13.4,
then the following shall apply:
4.13.4.1.1 A Partner, by notice to the other Partner, may require the Board
to solicit proposals from internationally recognized investment banking firms to
provide the services outlined in Section 4.13.4.1. The Board shall select an
internationally recognized investment banking firm reasonably acceptable to
both Partners. If the Partners cannot mutually agree upon such firm within
thirty (30) days after the date the proposals are due to the Board, then
each Partner shall select a Neutral Investment Bank, and the two Neutral
Investment Banks so chosen shall select a third internationally recognized
investment banking firm to provide the services outlined in
Section 4.13.4.1. The internationally recognized investment banking
firm selected pursuant to this Section is hereinafter referred to as the "Firm".
4.13.4.1.2 The Firm shall promptly solicit bids from responsible prospective
buyers to purchase (i) all, but not less than all, of the assets of the
Partnership; and/or (ii) all, but not less than all, of the Partnership
Interests in the Partnership.
4.13.4.1.3 Each Partner may submit a bid to the Firm to purchase either the
other Partner's Partnership Interest or all of the assets of the Partnership,
but no Partner may bid, or enter into an agreement with respect to such bid,
with a Person that is not an Affiliate of such Partner.
4.13.4.1.4 If the Partners cannot mutually agree on the selection of a bid
within thirty (30) days of the bid submission date, the Firm shall promptly
determine the highest responsible bid and notify the Partners of its
determination.
4.13.4.1.5 Upon the selection of a bid in accordance with Section 4.13.4.1.4,
each Partner and the Partnership shall comply with the bid. If the bid is to
purchase the assets of the Partnership, each Partner shall cause the
Partnership to sell all of its assets to the selected bidder. If the bid is
to purchase all the Partnership Interests in the Partnership, or in the
case of Section 4.13.4.1.3, the other Partner's Partnership Interest in the
Partnership, each Partner obligated to sell shall sell its Partnership
interest to the selected bidder.
4.13.4.1.6 The net proceeds of any sale occurring pursuant to this Section
4.13 shall be distributed to: (i) each Partner selling its Partnership
Interest, or (ii) both Partners, if the assets of the Partnership are sold,
all in accordance with the terms of this Agreement. The Partnership shall
be responsible for all fees and costs incurred pursuant to this Section 4.13.
4.13.5 The right of first offer and right of first refusal in Section 8.1
shall not be applicable in the event that Deadlock has occurred.
4.13.6 If a sale pursuant to Section 4.13.4.1.5 occurs, then the following
shall apply:
4.13.6.1 In the case of a sale of all the Partnership Interests of both
Partners, or a sale of the Partnership's assets to a Person or Persons not
previously a Partner and not currently an Affiliate of a Partner, the Partners
and the parents of both Partners shall be deemed to have "Divested" and to be
"Divested Sponsors", as those terms are defined in the Marketing Agreement.
For purposes of the Marketing Agreement, the date of such sale shall be the
"Divestment Date."
4.13.6.2 In the case of a sale of one Partner's Partnership Interest to the
other Partner or to an Affiliate of the other Partner, or the sale of the
Partnership's assets to one Partner or to an Affiliate of one Partner, the
Partner and parent of the Partner who sells its Partnership Interest or causes
the Partnership to sell the assets to the other Partner or its Affiliate shall
be deemed to have "Divested" and to be a "Divested Sponsor", as those terms
are defined in the Marketing Agreement. For purposes of the Marketing
Agreement, the date of such sale shall be the "Divestment Date."
4.13.6.3 In the case of a sale of a Partner's Partnership Interest to the
other Partner, to an Affiliate of the other Partner, or to a Person not
currently a Partner, the selling Partner shall have the obligation to
transfer the Post-Exercise Agreement to the purchaser, and Uniroyal-CA shall
have the right, but not the obligation, to transfer the Pre-Exercise
Agreement to the purchaser.
Article V
MEETINGS OF PARTNERS
5.1 Meetings of and Voting by Partners.
5.1.1 Meetings of the Partners shall be held at least annually in the month
of
March or such other time as designated by the Board. A meeting of the
Partners may be called at any time by four (4) voting Representatives or by a
Partner Vote. Meetings of Partners shall be held at the Partnership's
principal place of business or at any other place designated by the Board. Not
less than fourteen (14) days, nor more than ninety (90) days, before each
meeting, the Person calling the meeting shall give written notice of the
meeting to each Partner entitled to vote at the meeting. The notice shall
state the time, place, and purpose of the meeting. Notwithstanding the
foregoing provisions, each Partner who is entitled to notice waives notice if
before or after the meeting the Partner signs a waiver of the notice that is
filed with the records of Partners' meetings or is present at the meeting in
person or by proxy. Unless this Agreement provides otherwise, at a meeting of
the Partners, the presence in person or by proxy of all Partners constitutes a
quorum. A Partner may vote either in person or by written proxy signed by a
duly authorized officer of the Partner.
5.1.2 Except as otherwise provided in this Agreement, the affirmative vote of
all Partners shall be required to approve any matter coming before the
Partners.
5.1.3 In lieu of holding a meeting, the Partners may vote or otherwise take
action by a written instrument indicating the consent of all Partners.
5.1.4 A Partner may grant a proxy entitling any other Person appointed by the
same Partner to exercise its voting rights. Such proxy shall be in writing
and shall specify a termination date. The other Partner shall be entitled to
inspect the proxy on demand. Any proxy shall be filed with the minutes of the
meeting.
5.2 Services; Intercompany Dealings.
5.2.1 No Partner shall be required to perform services for the Partnership
solely by virtue of being a Partner. Unless approved by Majority Vote of the
Board, no Partner shall perform services for the Partnership or be entitled to
compensation for services performed for the Partnership.
5.2.2 Notwithstanding the foregoing, the Partnership is authorized to enter
into the Operative Agreements.
5.3 Duty of Partners.
No Partner or any of its Affiliates, nor any officer, director, employee
or former employee of any Partner or its Affiliates shall have any
obligation, or be liable, to the Partnership, or to any Person, including
any other Partner, or an Affiliate of a Partner, for: (i) exercising any of the
rights of such Partner or such Affiliate under this Agreement or any of the
Operative Agreements to which such Partner or its Affiliate is or will be a
party; (ii) exercising or failing to exercise its rights as a Partner of the
Partnership; or (iii) breach of any fiduciary or other similar duty to the
Partnership, or any Person, including any other Partner or an Affiliate of a
Partner by reason of such conduct, other than a breach of any Operative
Agreement.
5.4 Resignation or Withdrawal
No Partner shall have the right to resign or withdraw from the
Partnership except upon termination of the Partnership as provided in Section
9.4, or upon the transfer of such Partner's Partnership Interest in accordance
with Section 4.13 or Article VIII.
Article VI
OFFICERS
6.1 Officers.
The Board shall have the power and authority to appoint a president,
general manager, secretary, chief financial officer and such other officers
of the Partnership as the business of the Partnership may require, each of whom
shall hold office for such period, have such authority and perform such duties
as are provided in this Agreement or as the Board determines. Any two or more
offices may be filled by the same person, except the offices of president and
chief financial officer.
6.2 Election and Term of Office.
The officers of the Partnership shall be elected by the Board at any
regular or special meeting of the Board. Each officer shall hold office
until his successor shall have been duly elected and qualified or until his
death, resignation or removal. Election or appointment of an officer shall
not of itself create contract rights. The Board may authorize the Partnership
to enter into an employment contract with any officer in accordance with
applicable law, but no such contract shall impair the right of the Board to
remove any officer at any time in accordance with Section 6.3 hereof.
6.3 Removal.
Any officer may be removed by the Board, whenever in its judgment the
best interests of the Partnership will be served thereby, but such removal,
other than for cause, shall be without prejudice to the contract rights, if
any, of the person so removed. The removal of the President shall include
the removal of such individual as a non-voting Representative.
6.4 Vacancies.
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise may be filled by the Board for the unexpired
portion of the term.
6.5 President.
Except as otherwise provided in this Agreement and specifically by
Section 4.1.2 hereof, the President of the Partnership shall act as the chief
executive officer and in general supervise and control the day-to-day
business and affairs of the Partnership. The President shall see that all
orders and resolutions of the Board are carried into effect. He may sign,
with the Secretary of the Partnership or any other officer of the
Partnership duly authorized by the Board, deeds, mortgages, bonds,
Contracts, or other instruments that the Board has authorized to be
executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board or by this Agreement to some
other officer or agent of the Partnership or shall be required by law to be
otherwise signed or executed. The President shall perform such other duties
as may be prescribed by the Board from time to time. Notwithstanding any
provisions in this Agreement, the powers and duties of the President may be
delegated by the Board to the general manager, if such officer is appointed.
6.6 Vice Presidents.
In the absence of the President or in the event of his death, inability
or refusal to act, a Vice President designated by the Board shall perform the
duties of the President, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. Any Vice President
shall perform such duties as from time to time may be assigned to him by the
President and by the Board. The Board may, at its discretion, delegate to
the President the authority to appoint and remove vice presidents.
6.7 Secretary.
The Secretary shall keep the minutes of the meetings of Partners and of
the Board in one or more books provided for such purpose; cause to be given all
notices of meetings of Partners and of the Board; be custodian of the legal
records of the Partnership; have charge of the record of Partners; and in
general perform all duties incident to the office of secretary and such
other duties as from time to time may be assigned to the Secretary by the
President or by the Board.
6.8 Chief Financial Officer.
The Chief Financial Officer shall supervise the receipt and custody of
the Partnership's funds; cause to be kept correct and complete books and records
of account, including full and accurate accounts of receipts and disbursements,
in books belonging to the Partnership; assume investment management
responsibility for all funds and securities of the Partnership; cause to be
prepared, distributed and retained all reports and records required by law
regarding the Partnership's financial status; and perform such other duties
as may be assigned to him, or specifically required to be performed by him,
by the President and by the Board.
6.9 Remuneration.
The remuneration of officers shall be fixed from time to time by the
Board; provided, however, that the Board may delegate to the President the
authority to fix the salary of all or any class of officers except the
office of President.
Article VII
INDEMNIFICATION; LIMITATION OF LIABILITY;
OTHER ACTIVITIES; CONFIDENTIALITY
7.1 Indemnification by the Partnership.
The Partnership, to the fullest extent permitted by applicable law, shall
indemnify, defend and hold harmless any officer, employee or agent of the
Partnership (each a "Covered Partnership Person") from and against any loss,
damage, or claim incurred by such Covered Partnership Person, including
reasonable legal fees, disbursements and reasonable settlement payments,
incurred in connection with any claim, action, suit or proceeding or threat
thereof, made or instituted in which such Covered Partnership Person may be
involved or be made a party by reason of such Covered Partnership Person's
association with the Partnership, or by reason of any act or omission
performed or omitted by such Covered Partnership Person acting in good faith
on behalf of the Partnership and in a manner reasonably believed to be
within the scope of authority conferred on such Covered Partnership Person
by or pursuant to this Agreement, except that no Covered Partnership Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Covered Partnership Person by reason of gross negligence,
bad faith, or willful misconduct with respect to such act or
omissions; provided, however, that any indemnity under this Section 7.1 shall
be provided out of and to the extent of Partnership assets only, and no other
Covered Partnership Person and no Partner or Representative shall have any
personal liability on account thereof.
7.2 Notice to Partnership.
In the event that any claim, demand, action, suit or proceeding shall be
instituted or asserted or any loss, damage or claim shall arise in respect of
which indemnity may be sought pursuant to Section 7.1, such Covered
Partnership Person shall promptly notify the Partnership in writing.
Failure to provide notice shall not affect the obligations hereunder except
to the extent the Partnership is actually prejudiced thereby.
7.3 Contest by Partnership.
The Partnership shall have the right to participate in and/or control the
defense of any such claim, demand, action, suit or proceeding and, in
connection therewith, to retain counsel reasonably satisfactory to each Covered
Partnership Person, at the Partnership's expense, to represent each Covered
Partnership Person and any others the Partnership may designate in such
claim, demand, action, suit or proceeding. The Partnership shall keep the
Covered Partnership Person advised of the status of such claim, demand,
action, suit or proceeding and the defense thereof and shall consider in
good faith recommendations made by the Covered Partnership Person with
respect thereto.
7.4 Advances of Expenses by Partnership.
Expenses incurred by a Covered Partnership Person in defending any claim,
demand, action, suit or proceeding subject to Section 7.1 shall, from time to
time, upon request by the Covered Partnership Person and approval of the
Board, be advanced by the Partnership prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Partnership of an
undertaking by or on behalf of the Covered Partnership Person to repay such
amount if it shall be ultimately determined in a judicial proceeding that such
Covered Partnership Person is not entitled to be indemnified as authorized in
Section 7.1.
7.5 Indemnification by a Partner.
Each Partner, to the fullest extent permitted by applicable law, shall
indemnify, defend and hold harmless the Partnership, each Representative
appointed by such Partner (including those who have been, but no longer are,
such Representatives) and each other Partner (including those who have been,
but no longer are, Partners) (each a "Covered Partner Person") from and
against any loss, damage or claim incurred by such Covered Partner Person,
including reasonable legal fees, disbursements and reasonable settlement
payments incurred in connection with any claim, action, suit or proceeding
or threat thereof, made or instituted (i) in which the Partnership or the
other Partner may be involved, or are brought by the Partnership or the
other Partner by reason of a material breach of such Partner's
representations or covenants under this Agreement or
otherwise or (ii) in which the Representative appointed by such Partner may
be involved or be made a party by reason of such Representative's association
with the Partnership or by reason of any act or omission performed or omitted by
such Representative acting in good faith on behalf of the Partner or the
Partnership and in a manner reasonably believed to be within the scope of
authority conferred on such Representative by such Partner or the
Partnership, except that no Representative shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such
Representative by reason of gross negligence, bad faith or willful
misconduct with respect to such act or omissions.
7.6 Notice to Partner.
In the event that any claim, demand, action, suit or proceeding shall be
instituted or asserted or any loss, damage or claim shall arise in respect of
which indemnity may be sought pursuant to Section 7.5, such Covered Partner
Person shall promptly notify the indemnifying Partner in writing. Failure to
provide notice shall not affect the obligations hereunder except to the extent
the indemnifying Partner is actually prejudiced thereby.
7.7 Contest by Partner.
The indemnifying Partner shall have the right to participate in and/or
control the defense of any such claim, demand, action, suit or proceeding and,
in connection therewith, to retain counsel reasonably satisfactory to each
Covered Partner Person, at the Partner's expense, to represent each Covered
Partner Person and any others the Partner may designate in such claim, demand,
action, suit or proceeding. The Partner shall keep the Covered Partner Person
advised of the status of such claim, demand, action, suit or proceeding and
the
defense thereof and shall consider in good faith recommendations made by the
Covered Partner Person with respect thereto.
7.8 Advances of Expenses by Partner.
Expenses incurred by a Covered Partner Person in defending any claim,
demand, action, suit, or proceeding subject to Section 7.5 shall, from time to
time, upon request by the Covered Partner Person and approval of the
indemnifying
Partner, be advanced by such Partner prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by such Partner of an
undertaking by or on behalf of the Covered Partner Person to repay such amount
if it shall be ultimately determined in a judicial proceeding that such
Covered Partner Person is not entitled to be indemnified as authorized in
Section 7.5.
7.9 Other.
The indemnifications provided by Section 7.1 shall be in addition to any
other rights to which a Covered Partnership Person may be entitled under any
agreement, vote of the Board or otherwise, as a matter of law or equity, both
as to an action in the indemnifying party's capacity as Partnership and as to an
action in another capacity. The indemnifications provided by Section 7.5
shall be in addition to any other rights to which a Covered Partner Person
may be entitled under any agreement, as a matter of law or equity, or
otherwise, both as to an action in the indemnifying party's capacity as a
Partner, and as to an action in another capacity.
7.10 Effect of Interest in Transaction.
No Covered Partnership Person or Covered Partner Person shall be denied
indemnification in whole or in part under this Article VII or otherwise by
reason of the fact that the Covered Partnership Person or Covered Partner
Person had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted or not
expressly prohibited by the terms of this Agreement.
7.11 No Third Party Rights.
The provisions of this Article VII are for the benefit of the Covered
Partnership Persons and the Covered Partner Persons and shall not be deemed to
create any rights for the benefit of any other Persons.
7.12 Insurance.
7.12.1 The Partnership shall maintain, at its expense, an insurance policy or
policies with director (which shall include a person such as a
Representative), officer or employee coverage of at least FIVE MILLION
UNITED STATES DOLLARS (US$5,000,000) to protect itself and any Covered
Partnership Person against liability arising out of this Agreement or
otherwise, whether or not the Partnership would have the power to indemnify
any such person against such liability under applicable laws.
Each Partner shall maintain, at its expense, an insurance policy or policies
to adequately protect itself and any Representative appointed by such
Partner against liability arising out of this Agreement or otherwise,
whether or not the Partner would have the power to indemnify any such
Representative against such liability under applicable
laws.
Each Partner and the Partnership shall provide to one another, upon request,
evidence of such insurance.
7.12.2 The Partnership, at its expense, shall maintain property and casualty
and such other insurance, in such amounts and against such risks, and with such
deductibles and self insured retention limits, as the Board may, by Majority
Vote, determine, provided however, that for the first year after formation of
the Partnership, the Partnership shall maintain such other types and amounts of
property and casualty insurance as was carried and insured against by
Uniroyal-CA with respect to the Business (as defined in the Purchase and
Contribution Agreement). Upon request, the Partnership shall deliver to
each Partner satisfactory evidence of any such coverage.
7.13 Limitation of Liability.
7.13.1 Neither the Partners (nor any of their respective Affiliates), nor the
Representatives, nor the Board shall be liable, responsible or accountable in
damages or otherwise to the Partnership or the Partners for any act or
omission by any such Person (which shall include any applicable entity)
performed in good faith pursuant to the authority granted to such Person by
this Agreement or in accordance with its provisions, and in a manner
reasonably believed by such Person to be within the scope of the authority
granted to such Person and in the best interest of the Partnership;
provided, however, that such Person shall retain liability for acts or
omissions that involve intentional misconduct, a knowing violation of the
law or for any transaction from which the Person will personally receive a
benefit in money, property, or services to which the Person is not legally
entitled.
7.13.2 Each of the Partners shall at all times duly and punctually pay and
discharge its separate debts, liabilities, obligations, duties and agreements,
whether present or future, and keep indemnified and save harmless the
Partnership property and the other Partners and their respective estates and
effects from all actions, proceedings, costs, claims and demands of every
nature or kind whatsoever arising out of or in connection with such
Partner's separate debts, liabilities, obligations, duties and agreements.
7.13.3 Except with the prior approval of the Board, the Partnership shall not
enter into any contract or other obligation under which the Partnership incurs
a financial obligation in excess of CDN$100,000 unless there is contained
therein appropriate provisions limiting the claims of all parties to such
contracts and all Persons benefitting under such obligations to the assets
of the Partnership and expressly waiving any rights of such Persons to
proceed against the Partners to satisfy judgment against the Partnership or
any Partner individually.
7.14 Other Activities.
7.14.1 The Partners and the Partnership each acknowledge that a fundamental
intent of this Agreement and expectation of the Partners and the Partnership
is that, except as expressly provided in this Agreement or in the Operative
Agreements, (i) the Partnership shall be the exclusive distribution channel
for each Partner and their Affiliates for all Active Ingredients, Formulations,
Equipment and Other Products and/or Services for Seed Treatment uses and
applications in Canada, and (ii) the Partnership shall develop, formulate,
manufacture, register, market and sell Active Ingredients, Formulations,
Equipment and Other Products and/or Services only for Seed Treatment uses and
applications inside Canada.
7.14.2 The Partnership and the Partners hereto agree to exercise in good
faith all reasonable efforts to satisfy the intent and expectation set forth in
Section 7.14.1. In furtherance of that intent, and to protect adequately the
Partner's Partnership Interest in the Partnership, it is necessary and
essential that the Partnership and the Partners enter into and adhere to the
covenants contained in this Section 7.14.
7.14.3 Except as otherwise provided in the Operative Agreements, no Partner
or its Affiliates shall, either directly or indirectly: (i) Compete with the
Partnership for Seed Treatment uses and applications in Canada; (ii) Invest or
Participate in any Person that Competes with the Partnership for Seed
Treatment uses and applications in Canada or market or sell any
Post-Exercise Products to any Person; or (iii) sell, market or distribute
Active Ingredients, Formulations, Equipment and Other Products and/or
Services to any Person if that such Partner or such Affiliate knows or has
reason to believe such Person intends to market, sell, distribute,
use or apply such Active Ingredients, Formulations,
Equipment or Other Products and/or Services for Seed Treatment uses or
applications inside Canada.
7.14.4 No employee of the Partnership, or employee or member of the board of
directors, managing board or similar governing body ("Governing Body") of a
Partner or its Affiliates shall serve as an employee or member of a Governing
Body of a Competitor of the Partnership.
7.14.5 Except as otherwise provided in the Operative Agreements, the
Partnership
shall not develop, formulate, manufacture, register, market or sell Active
Ingredients, Formulations, Equipment and Other Products and/or Services for
Seed Treatment uses and applications outside Canada, or for other than Seed
Treatment, regardless of where the use or application occurs, or otherwise
Compete with either Partner in Seed Treatment uses or applications outside
Canada or in other than Seed Treatment, regardless of where the use or
application occurs.
7.14.6 Each of the Partners and the Partnership agree that during the term of
this Agreement, and continuing for twelve (12) months thereafter, it will not,
nor will it permit any of its Affiliates to, solicit for employment or employ
any employee employed by the Partnership or either Partner, other than any
employee that has been terminated by such party prior to such solicitation.
7.14.7 Without limiting the generality or effect of any other provisions of
this Agreement, it is the intention of the Parties that the provisions of this
Agreement shall supercede Sections 29 and 30 of the Act.
7.15 Confidential Information.
7.15.1 Except as may be specifically authorized in this Agreement or the
Operative Agreements, or as may be permitted by agreements with Third Parties,
or as may be specifically agreed to by the Partners and the Partnership in a
writing signed by all parties, the Partnership will hold the Confidential
Information of each Partner, the Partnership and any Third Party in strict
confidence and take all reasonable steps to prevent use by, or disclosure to,
any other Person, which steps will include at least those taken by the
Partnership to protect its own Confidential Information of like kind, or use
or disclose any such Confidential Information for any purpose except as
provided in this Agreement, agreements with Third Parties or the Operative
Agreements.
7.15.2 Except as may be specifically authorized in this Agreement or the
Operative Agreements, or as may be permitted by agreements with Third Parties,
or as may be specifically agreed by the Partners and the Partnership in a
writing signed by all parties, the Partners will hold the Confidential
Information of the other Partner, the Partnership and any Third Party in
strict confidence and take all reasonable steps to prevent use by, or
disclosure to, the other Partner and any other Third Parties, which steps
will include at least those taken by the Partner to protect its own
Confidential Information of like kind, or use or disclose any such
Confidential Information for any purpose except as provided
in this Agreement, agreements with Third Parties or the Operative Agreements;
provided, however that a Partner may disclose Confidential Information of the
Partnership and the other Partner to a Third Party in connection with a sale
of the Partnership Interest pursuant to Sections 4.13 or Article VIII or a
transfer, by merger, consolidation, sale or otherwise, of the shares of a
Partner or its Direct or Indirect Parent or of all or substantially all of
the Crop Protection Business of a Partner or its Direct or Indirect Parent;
provided that prior to such disclosure, such Third Party agrees in writing
not to disclose such Confidential Information to any other Third Parties or
to otherwise use such Confidential Information without the prior written
permission of the disclosing Partner hereto.
7.15.3
7.15.3.1 Except as specifically authorized in this Agreement or the Operative
Agreements, the Partnership shall not disclose any competitively significant
Confidential Information of a Partner to any Representative who works in the
crop protection or agrochemical operations group of the other Partner.
7.15.3.2 Except as permitted by agreements with Third Parties, the
Partnership will not disclose any competitively significant Confidential
Information of a Third Party to any Partner or Representative.
7.15.3.3 Except as may be specifically authorized in this Agreement or the
Operative Agreements, or as may be permitted by agreements with a Partner or
as may be specifically agreed to by a Partner and the Partnership in writing,
the Partnership will hold the Confidential Information of each Partner and each
Partner's Affiliates in strict confidence, and take all reasonable steps to
prevent use by, or disclosure to one Partner of Confidential Information of
the other Partner, or the other Partner's Affiliates, which steps will include
at least those taken by the Partnership to protect its own Confidential
Information of like kind; provided however, the Partnership, subject to Section
7.15.3.1, may disclose Confidential Information of a Partner to the Board to the
extent such disclosure is required to permit the Board to conduct the business
and affairs of the Partnership pursuant to Section 4.1. Each Representative
shall be required to execute an undertaking that, in the event the
Representative of one Partner is given access to the Confidential Information of
the other Partner or its Affiliates as a result of performing his duties on the
Board, the Representative shall hold the Confidential Information of the Partner
or its Affiliates in strict confidence, and will not use the Confidential
Information for any purpose other than to perform his duties on the Board, and
will not disclose the Confidential Information to any Person other than another
Representative who is authorized, pursuant to Section 7.15.3.1, to have access
to such Confidential Information.
7.15.4 Except as required by law, including provincial securities
legislation,
and the applicable regulations of stock exchanges, the Partnership and the
Partners shall not make any announcement, press release or other public
statement relating in any manner to this Agreement, the terms hereof or the
relationship of the Partners without first obtaining the consent of the Partners
to the disclosure proposed to be made. The Partners hereto shall not
unreasonably withhold their consent to any request made by a party pursuant to
this Section 7.15.4. The Partners and the Partnership shall use their best
efforts to consult and coordinate with each other before making any
announcement, press release or other public statement required to be made by law
or pursuant to the applicable provisions of Canadian stock exchanges.
7.16 Agreements with the Partnership.
Neither Partner shall, without the approval of a Majority Vote of the
Board, permit any of its Affiliates to create, amend, terminate or modify any
arrangement, agreement or contract between the Partnership and (i) any
Partner, Xxxxxxxxx LLC, a Subsidiary or any Member, (ii) an Affiliate of a
Partner, Xxxxxxxxx LLC, a Subsidiary or a Member, or (iii) an employee,
executive officer or director or other board member or representative of a
Partner, Xxxxxxxxx LLC, a Member or a Subsidiary. Neither Partner shall,
without the unanimous consent of the Board, permit any sublicense under the
Cross License Agreement by it or any of its Affiliates.
Article VIII
TRANSFERS AND ADMISSION OF NEW PARTNERS
8.1 Preemption Rights; Right of First Offer; Rights of First Refusal.
Except for sales pursuant to Section 4.13, no Partner shall Transfer any or
all of its Partnership Interest without first complying with this Section 8.1.
8.1.1 Right of First Offer. If a Partner desires to Transfer its Partnership
Interest, a Partner may so notify the other Partner in the manner provided in
Section 8.1.1.1 of its willingness to Transfer ("Soliciting Offer"). As used in
this Section 8.1.1, the Partner desiring to Transfer shall be referred to as
the "Soliciting Partner", and the other Partner shall be referred to as the
"NonSoliciting Partner".
8.1.1.1 The Soliciting Partner's Soliciting Offer shall include: (i) the
Percentage of Partnership Interest being proposed for Transfer which shall be
that Soliciting Partner's entire Partnership Interest; (ii) the date for
responding to the Soliciting Offer, which date shall not be less than thirty
(30) days after the date of the Soliciting Offer; (iii) the date of closing of
the purchase of the Partnership Interest, which purchase date shall not be more
than one hundred and eighty (180) days after the date of the Soliciting Offer;
(iv) a proposed purchase price for the Partnership Interest, denominated and
payable in United States dollars at closing ("Proposed Purchase Price"); and (v)
other basic terms and conditions of the proposed Transfer.
8.1.1.2 A Soliciting Offer is provisionally accepted by the NonSoliciting
Partner if a letter of intent is signed by the Soliciting Partner and the
NonSoliciting Partner in the manner and within the time frame required in the
Soliciting Offer, subject to the execution of the definitive purchase
agreement in accordance with the provisions of Section 8.1.1.3.
The closing of the transaction contemplated by such Soliciting Offer shall take
place at the office of the Soliciting Partner's solicitors in Canada on a date
which is the fifth (5) day following the date that Section 8.1.3 has been
satisfied, but in no event later than one hundred and eighty (180) days after
the date of the Soliciting Offer.
8.1.13 If (i) a Soliciting Offer is rejected, or is not accepted by the
NonSoliciting Partner as provided in Section 8.1.1.2, or (ii) a definitive
purchase agreement is not signed by both the Soliciting Partner and the
NonSoliciting Partner within forty-five (45) days of the NonSoliciting
Partner's
acceptance of such Soliciting Offer, despite the good faith efforts of the
Partners to do so, or (iii) the Transfer of the Partnership Interest fails to
close in accordance with the terms of the purchase agreement (including the
failure to satisfy Section 8.1.3), then, upon the occurrence of any of (i),
(ii)
or (iii), during the period ending sixty (60) months following the date of
this Agreement, the Soliciting Partner may provide the NonSoliciting Partner
with a revised Soliciting Offer that replaces the Proposed Purchase Price with
the Calculated Purchase Price and which revises the dates for response and
closing to not less than thirty (30) days from the date of the revised
Soliciting Offer and not more than one hundred and eighty (180) days from the
date of the revised Soliciting Offer, respectively.
8.1.1.4 Upon the occurrence more than sixty (60) months following the date of
this Agreement of any of (i), (ii) or (iii) as provided in Section 8.1.1.3, if
the Soliciting Partner so elects, the Soliciting Partner and the NonSoliciting
Partner shall, within forty-five (45) days of such occurrence, engage a
Neutral
Investment Bank to value the Partnership Interest of the Soliciting Partner,
denominated and payable in United States dollars ("IBank Value"). The
engagement of the Neutral Investment Bank shall be on the following terms and
conditions:
(x) the banker shall be instructed to determine the Fair Market Value of the
entire Partnership Interest of the Soliciting Partner, taking into account the
terms and conditions of the Soliciting Offer, other than price, (y) the
instructions provided to the Neutral Investment Bank are subject to the
NonSoliciting Partner's approval, which approval shall not be unreasonably
withheld, and (z) at no time will the Neutral Investment Bank be advised of
any Partner's current valuation of the Partnership and/or its Partnership
Interest.
Such IBank Value shall be provided within forty-five (45) days of the
engagement of the Neutral Investment Bank.
8.1.1.4.1 The Soliciting Partner, after obtaining the IBank Value as provided
in Section 8.1.1.4, may provide the NonSoliciting Partner with a revised
Soliciting Offer which replaces the Proposed Purchase Price with the IBank
Value and which revises the dates for response and for closing to be thirty (30)
days from the date of the revised Soliciting Offer and one hundred and eighty
(180) days from the date of the revised Soliciting Offer, respectively.
8.1.1.4.2 If within thirty (30) days after obtaining the IBank Value as
provided in Section 8.1.1.4, the Soliciting Partner does not provide the
NonSoliciting Partner with a revised Soliciting Offer as provided in Section
8.1.1.4.1, the Soliciting Partner (i) shall pay the fees of the Neutral
Investment Bank, and (ii) may not Transfer its Partnership Interest in
accordance with this Section 8.1.1 for a period of eighteen (18) months after
the date of receipt of the IBank Value, after which period the Soliciting
Partner may Transfer such interest after again complying with the provisions of
this Section 8.1.1.
8.1.1.5 A revised Soliciting Offer, as provided in Section 8.1.1.3 or Section
8.1.1.4.1 ("Revised Soliciting Offer") is provisionally accepted by the
NonSoliciting Partner if a letter of intent is signed by the Soliciting
Partner and the NonSoliciting Partner in the manner and within the time frame
required in the Revised Soliciting Offer, subject to the execution of the
definitive purchase agreement in accordance with the provisions of Section
8.1.1.6. The closing of the transaction contemplated by such Revised Soliciting
Offer shall take place at the office of the Soliciting Partner's solicitors in
Canada on a date which is the fifth (5) day following the date that Section
8.1.3 has been satisfied, but in no event later than one hundred and eighty
(180) days after the date of the Revised Soliciting Offer, and the fees of any
Neutral Investment Bank engaged as provided in Section 8.1.1.4 shall be paid
one-half by the Soliciting Partner and one-half by the NonSoliciting Partner.
8.1.1.6 If (i) a Revised Soliciting Offer is rejected, or is not accepted by
the NonSoliciting Partner as provided in Section 8.1.1.5, or (ii) a definitive
purchase agreement is not signed by both the Soliciting Partner and the
NonSoliciting Partner within forty-five (45) days of the NonSoliciting
Partner's acceptance of such Revised Soliciting Offer, despite the good faith
efforts of the Partner to do so, or (iii) the Transfer of the Partnership
Interest fails to close in accordance with the terms of the purchase agreement
(including the failure to satisfy Section 8.1.3), then, upon the occurrence of
any of (i), (ii) or (iii) the Soliciting Partner may, during the eighteen (18)
month period following the occurrence of any of (i), (ii) or (iii)
("Solicitation Period"), Transfer all, but not less than all, of the Partnership
Interest to a Third Party, on terms including purchase price which are
reasonably similar to those in the Revised Soliciting Offer and which are
economically equivalent or greater
than those in the Revised Soliciting Offer. Upon the occurrence of any of
(i), (ii) or (iii), the NonSoliciting Partner shall pay the fees of any Neutral
Investment Bank engaged as provided in Section 8.1.1.4.
8.1.1.7 In the event the Partnership Interest is not sold within the periods
provided in Section 8.1.1.6, the Soliciting Partner shall not, after the
periods,
Transfer such Partnership Interest to any Third Party without first complying
with Section 8.1.2 or, at the Soliciting Partner's option, again complying
with this Section 8.1.1.
8.1.2 Right of First Refusal If a Partner at any time receives a Bona Fide
Offer for the purchase of its Partnership Interest, such Partner (the
"Soliciting Partner") may, at its option, give the other Partner (the
"NonSoliciting Partner") notice of such Bona Fide Offer (the "Third Party
Soliciting Offer Notice"), provide with the Third Party Soliciting Offer Notice
a copy of the Bona Fide Offer and offer to Transfer such Partnership Interest to
the NonSoliciting Partner on the same terms and conditions, including purchase
price, as those contained in the Bona Fide Offer, except that the closing shall
take place at least ninety (90) days, and no later than one hundred eighty (180)
days after the date of the Third Party Soliciting Offer Notice.
8.1.2.1 Within thirty (30) days after receipt of the Third Party Soliciting
Offer Notice, the NonSoliciting Partner may elect, by written notice to the
Soliciting Partner, to purchase such Partnership Interest on the same terms
and conditions as contained in the Bona Fide Offer, as modified by the terms of
Section 8.1.2. Any Transfer shall be subject to the satisfaction of any
necessary approvals as provided in Section 8.1.3.
8.1.2.2 In the event the NonSoliciting Partner rejects or fails to accept
such offer within such thirty (30) days as provided in Section 8.1.2.1, the
Soliciting Partner shall be free to Transfer such Partnership Interest to such
Third Party, on the terms and conditions set forth in the Bona Fide Offer,
subject to any approvals required pursuant to Section 8.1.3, provided that such
Transfer occurs within two hundred and seventy (270) days after the rejection or
expiration of the period in which the NonSoliciting Partner might have accepted
the offer set forth in the Third Party Soliciting Offer Notice.
8.1.2.3 Any closing shall take place at the office of the Soliciting
Partner's solicitors in Canada.
8.1.2.4 In the event the Soliciting Partner shall not close the Transfer of
such Partnership Interest to the Third Party, on the terms and conditions in the
Bona Fide Offer, within two hundred seventy (270) days from the date the
NonSoliciting Partner rejects or the expiration of the period in which the
NonSoliciting Partner might have accepted the offer set forth in the Third Party
Offer Notice, then, except as may be otherwise permitted by Section 8.1.1,
should such Soliciting Partner thereafter elect to Transfer such Partnership
Interest to the same or other Third Party, on the same or other terms and
conditions, the Soliciting Partner shall be required to again comply with all of
the terms and provisions of Section 8.1.2.
8.1.2.5 No Partner may accept any offer from a Third Party for the purchase of
such Partner's Partnership Interest without such Partner having provided the
other Partner with a Third Party Soliciting Offer Notice relative to such
offer and having otherwise complied with this Section 8.1.2 or without complying
with Section 8.1.1.
8.1.3 Approvals. The Transfer of any Partnership Interest pursuant to Section
8.1 shall be subject to the requirements of the Competition Act (Canada) and all
other applicable federal and provincial laws and the expiration of any
applicable waiting periods and the receipt of necessary approvals in connection
therewith.
8.1.4 Transfer with Consent. Notwithstanding anything to the contrary in
Section 8.1, no Partner is obligated to comply with Sections 8.1.1 and 8.1.2
prior to the Transfer of such Partner's Partnership Interest to an Affiliate
of
such Partner, if such Transfer is made with the consent of the other Partner,
which consent shall not be unreasonably withheld, delayed or conditioned.
8.2 Involuntary Transfers.
8.2.1 Upon any Involuntary Transfer of all or any part of an Interest to
anyone other than a Partner, the Partner suffering such Involuntary Transfer
(the "Suffering Partner") shall immediately give notice of such Involuntary
Transfer
(the "Offered Interest Notice") to the Partnership and the other Partner (the
"NonSuffering Partner").
8.2.2 If the Interest of a Partner suffers an Involuntary Transfer as described
in Section 8.2.1, the NonSuffering Partner shall have the right to make an offer
to purchase such interest under this Section 8.2.2 upon receipt of the Offered
Interest Notice or upon otherwise learning of the Involuntary Transfer (the
"Offered Interest"). The NonSuffering Partner shall have a period of thirty
(30) days after the date of receipt of the Offered Interest Notice in which to
make a written offer (the "Interest Offer") to purchase the Offered Interest
under the terms and conditions of this Section 8.2. Failure of the NonSuffering
Partner to make an Interest Offer within the required time period shall be
deemed a rejection of the Offered Interest.
8.2.3 The purchase price for the Offered Interest shall be determined in
accordance with this Section 8.2.3. The purchase price to be paid for the
Offered Interest shall be equal to the fair market value of such Offered
Interest
on the date of the offer to purchase the Offered Interest (the "Price"). If
the holder of the Offered Interest ("Interest Seller") and the NonSuffering
Partner are able to reach agreement as to the Price, such agreed Price shall
govern. If the Interest Seller and the NonSuffering Partner cannot agree on a
Price within forty-five (45) days after the date of the Interest Offer, the
Price shall be determined by a Neutral Investment Bank appointed by the Interest
Seller and the NonSuffering Partner within one hundred and five (105) days after
the date of the Interest Offer. If the Interest Seller and the NonSuffering
Partner cannot agree on a Neutral Investment Bank within such period, the Price
shall be determined jointly by a Neutral Investment Bank representing the
Interest Seller and a Neutral Investment Bank representing the NonSuffering
Partner (collectively if more than one), each to be appointed within such sixty
(60) day period. If the Neutral Investment Banks are unable to agree on a Price
within thirty (30) days
after the latest date of appointment, they shall within thirty-five (35) days
after such latest date of appointment select a third Neutral Investment Bank
who shall determine within thirty (30) days after its appointment the Price by
arriving at a valuation either equal to that determined by one of the initial
Neutral Investment Banks or between both initial valuations. Notwithstanding
the foregoing sentence, if the higher of the values determined by the initial
Neutral
Investment Banks is not in excess of 115% of the value determined by the other
Neutral Investment Bank, the Neutral Investment Banks shall be deemed to have
agreed upon a Price equal to the average of the two determinations. If the two
initial Neutral Investment Banks are unable to agree on a third Neutral
Investment Bank, they shall each appoint an independent appraiser within
thirty- five (35) days after the date that they are unable to agree on the third
Neutral Investment Bank. The two independent appraisers shall elect within
thirty (30) days after the latest appointment a third appraiser. Each of the
Interest Seller and the NonSuffering Partner shall bear the cost and expenses of
the appraiser(s) it or they appoint, and each shall bear one-half of the cost
and expenses of the third appraiser or the sole appraiser if only one is
appointed. The NonSuffering Partner shall have a period of ten (10) days after
the date of agreement as to
Price, or after the date of receipt of the Price calculated by the appraisers in
accordance with this Section 8.2.3 in which to give notice that it will
purchase
the Offered Interest at the Price ("Price Notice"). Failure of the NonSuffering
Partner to give such notice within the required time period shall be deemed a
rejection of the Offered Interest.
8.2.4 The Price shall be paid entirely in cash. The closing of the purchase
and
sale of the Offered Interest shall occur on the later of (i) eighty (80) days
following the date of the Interest Offer or (ii) thirty (30) days afer the
Price Notice. The Offered Interest shall be transferred free and clear of all
taxes, debts, claims, judgments, liens, encumbrances or other defects.
8.2.5 Any sale of the Offered Interest shall be subject to the requirements of
the Competition Act (Canada) and all other applicable federal and provincial
laws and the expiration of applicable waiting periods and the receipt of
necessary approvals in connection therewith.
8.2.6 If the Offered Interest is rejected by the NonSuffering Partner as
described in Section 8.2.2 or 8.2.3, the NonSuffering Partner will be deemed to
have consented to the sale of the Offered Interest and the Partnership Rights
associated with such Offered Interest, and the admission of the purchaser of
such Offered Interest as an admitted Partner. If an Involuntary Transfer is not
completed pursuant to Section 8.2, the Interest Seller shall be deemed to have
not received consent from the NonSuffering Partner (unless the NonSuffering
Partner waives in writing its right to consent pursuant to Section 8.6) to the
sale of the Partnership Interest and admission of the purchaser as a Partner;
and accordingly such purchaser shall be a Transferee of any or part of the
Interest of the Interest Seller and shall not be an admitted Partner; and the
Interest Seller shall be deemed to have assigned its Partnership Rights,
including its right to appoint Representatives, as to such Offered Interest to
the NonSuffering
Partner. The Offered Interest shall remain subject to this Section 8.2 with
respect to any later Involuntary Transfer.
8.3 Change of Control
Upon the occurrence of a Change of Control with respect to any Partner (the
"Notifying Partner"), the Notifying Partner shall promptly deliver written
notice thereof (a "Change of Control Notice") to the other Partner (the
"Non-Notifying Partner"), together with reasonable details specifying that the
events described in the applicable section of this Agreement constituting such
Change of Control have occurred, and such additional information reasonably
requested by the Non-Notifying Partner. During the forty-five (45) days
following the date of the Change of Control Notice, the Non-Notifying Partner
shall deliver to the Notifying Partner a written response which shall either (i)
state that the Non-
Notifying Partner will take no action pursuant to this Section regarding such
Change of Control, or (ii) state the Non-Notifying Partner's election to
purchase
the Notifying Partner's Partnership Interest as provided in this Section at the
Calculated Purchase Price. The closing of the resulting transaction will take
place within thirty (30) days after delivery of such response to the Notifying
Partner, subject to the requirements of the Competition Act (Canada) and all
other applicable federal and provincial laws and the expiration of applicable
waiting periods and the receipt of necessary approvals in connection
therewith.
At such closing (x) the Non-Notifying Partner shall deliver to the Notifying
Partner the Calculated Purchase Price in United States dollars, by wire transfer
of same day funds to the account specified by the Notifying Partner in writing
at least two (2) business days prior to such closing and (y) the Notifying
Partner shall deliver to the Non-Notifying Partner a written instrument of
transfer (in form and substance reasonably satisfactory to such Non-Notifying
Partner) duly authorized, executed and delivered by the Notifying Partner,
transferring the Notifying Partner's Partnership Interest to the Non-Notifying
Partner free and clear of all taxes, debts, claims, judgments, liens,
encumbrances or other charges against such Interest or other defects in title
to such Interest. The failure of any Notifying Partner to deliver a Change of
Control Notice as required hereby shall not relieve the Notifying Partner of
its obligations hereunder or otherwise affect the rights and obligations of the
parties hereunder. If the Non-Notifying Partner elects to purchase the
Notifying
Partner's Partnership Interest as provided in this Section and if, due to the
requirements of the Competition Act (Canada) and all other applicable federal
and provincial laws, the transaction is not closed within three hundred sixty
(360) days after delivery to the Notifying Partner of the Non-Notifying
Partner's written response stating such election, the Notifying Partner shall
have no obligation to transfer its Partnership Interest to the Non-Notifying
Partner pursuant to this Section 8.3.
8.4 Admission of Transferee.
A Transferee will be admitted as a Partner only upon the satisfaction or
waiver of conditions set forth in this Section 8.4.
8.4.1 The other Partner must consent to the admission of the Transferee,
which consent may be given or denied in the absolute discretion of the other
Partner.
If a sale is completed pursuant to Section 4.13, 8.1, 8.2 or 8.3, the Partners
or Partner shall be deemed to have consented to the Transfer of Partnership
Interest and the admission of a Transferee of the Interest as an admitted
Partner of the Partnership. If a Partner transfers any or all of its
Partnership Interest to an Affiliate of such Partner with the consent of the
other Partner, the other Partner shall be deemed to have consented to the
admission of such Affiliate as a Partner.
8.4.2 The Interest with respect to which the Transferee is seeking admission
as a Partner must have been acquired in accordance with this Agreement.
8.4.3 The Transferee must become a party to this Agreement as a Partner and
must
execute such documents and instruments as the other Partner may reasonably
request (including without limitation, amendments to the Agreement) to confirm
such Transferee as a Partner in the Partnership and such Transferee's
agreement
to be bound by the terms and conditions of this Agreement.
8.4.4 The Transferee must pay or reimburse the Partnership for all reasonable
legal, filing, and publication costs that the Partnership incurs in connection
with the admission of the Transferee as a Partner with respect to the
transferred Interests.
8.4.5 The Transferee must provide the Partnership with an opinion of counsel
satisfactory to counsel for the Partnership that the Transfer of the Interest
was lawful and in accordance with the provisions of this Agreement.
8.4.6 No Person, including a Transferee, that is not a Canadian resident
within the meaning of the ITA shall be admitted as a Partner in the Partnership.
8.4.7 For greater certainty, notwithstanding anything in this Agreement, no
Person that is not a Canadian resident within the meaning of the ITA shall be
entitled to any allocations or Distributions with respect to any Interest.
8.5 Rights of Unadmitted Transferees.
Subject to Section 8.4.7, a Person who becomes a Transferee of Interest
but who
is not admitted as a Partner pursuant to Section 8.3 shall be entitled only to
allocations and Distributions with respect to such Interest in accordance with
this
Agreement. Such Person shall have no Partnership Rights, no right to appoint
Representatives, no voting rights, no right to participate in the management
of the
business or to see books and records and shall not have any of the rights of a
Partner under this Agreement.
8.6 Preemptive Rights.
The Partners shall have the ability to create and sell any additional
Partnership Interest on terms satisfactory to both Partners and to admit the
purchaser of such Partnership Interest as a Partner pursuant to the terms of
this Agreement. Each Partner shall have preemptive rights with respect to any
additional Partnership Interest or Interest sold by the Partnership.
8.7 Waiver.
The right of first offer and/or first refusal contained in Section 8.1 or
the right to purchase the Offered Interest as provided in Section 8.2 may be
waived in a writing signed by a Partner who is entitled to exercise that right
with respect to a particular Transfer or Involuntary Transfer in which event the
Partnership Interest may be sold, or a previous Transfer or Involuntary Transfer
may be confirmed to be free and clear of the provisions of this Section 8. A
certificate
executed and acknowledged by the president or other duly authorized officer of
a Partner, on behalf of the Partner, stating that the provisions of Sections 8.1
or
8.2 have been met by a Selling Partner, Soliciting Partner or Interest Seller,
or that the provisions have been duly waived by the certifying Partner, or that
the Transfer is exempt from Sections 8.1 and 8.2 shall be conclusive upon the
certifying Partner in favor of all Persons who rely thereon in good faith. Such
certificate shall be furnished to any Partner who has in fact complied with the
provisions of Sections 8.1 or 8.2.
Article IX
DISSOLUTION AND LIQUIDATION
9.1 Events of Dissolution.
The Partnership shall continue until dissolved or terminated in
accordance with
the terms of this Agreement. Notwithstanding any provision of the Act to the
contrary, no Partner shall have the right to, and all Partners agree not to,
dissolve, terminate or liquidate or to petition any court for the dissolution,
termination or liquidation of the Partnership except as provided in this
Article IX.
The Partnership shall be dissolved only upon the happening of any of the
following
events:
9.1.1 upon the written agreement of all Partners; or
9.1.2 automatically upon the acquisition by one Partner of all of the
Interests of the other Partners in the Partnership.
9.2 Not Dissolution.
For greater certainty, the resignation, withdrawal, expulsion, or
bankruptcy of a Partner or the occurrence of any other event that results in a
Partner ceasing to be a Partner in the Partnership shall not result in the
dissolution of the Partnership, unless either of Sections 9.1.1 or 9.1.2 is
applicable, but shall trigger the provisions set forth in Section 8.2. The
admission of a new Partner or Partners to the Partnership (whether by way of
transfer to such new Partner or Partners of a Partnership Interest or otherwise)
shall not result in the dissolution
of the Partnership unless either of Sections 9.1.1 or 9.1.2 is applicable.
9.3 Procedure for Winding Up and Dissolution.
If the Partnership is dissolved, the Board shall wind up its affairs. On
winding up of the Partnership, the assets of the Partnership shall be
distributed,
first, to creditors of the Partnership, including Partners who are creditors,in
satisfaction of the liabilities of the Partnership, and then, amounts in
excess of
any reserves deemed reasonably necessary by the Board to pay all of the
Partnership's claims and obligations shall be distributed to the Interest
Holders in accordance with their Capital Accounts.
9.4 Termination.
The Board shall comply with any requirements of applicable law pertaining
to the winding up of the affairs of the Partnership and the final Distributions
of its assets.
Article X
BOOKS, RECORDS, AND ACCOUNTING
10.1 Bank Accounts.
All funds of the Partnership shall be deposited in a bank account or
accounts
opened in the Partnership's name. The Board shall determine the institution or
institutions at which the accounts will be opened and maintained, the types of
accounts and the Persons who will have authority with respect to the accounts
and the funds therein.
10.2 Books and Records.
10.2.1 The Board shall keep or cause to be kept separate, complete and
accurate
books and records of the Partnership and supporting documentation of the
transactions with respect to the conduct of the Partnership's business. Such
books and records shall include, but not be limited to, the following:
(a) a current list of the full name and last known business,
residence and mailing address of each past and present Partner and
Representative;
(b) copies of the Partnership's tax information returns and
monthly, quarterly and annual financial statements and reports described in
Section 10.4 of this Agreement for the six (6) most recent Fiscal Periods; and
(c) minutes of all meetings of Partners and Representatives.
10.2.2 Each Partner may request and shall promptly receive copies of and/or
may
inspect and copy during ordinary business hours and at the principal place of
business of the Partnership any and all books and records of the Partnership,
including but not limited to, those listed in Section 10.2.1 of this
Agreement;
provided, however, that the Partnership is not obligated to disclose to any
Partner any confidentiality, secrecy or similar agreements with Third Parties,
or any agreements that, by doing so, would result in the Partnership being in
breach of that agreement.
10.2.3 The books and records shall be maintained in accordance with Canadian
GAAP.
10.2.4 Each Partner shall reimburse the Partnership for all costs and
expenses incurred by the Partnership in connection with the Partner's inspection
and copying of the Partnership's books and records, but only to the extent such
copying requires more than one (1) person day of the Partnership's time,
otherwise such copying shall be at the expense of the Partnership.
10.3 Annual Accounting Period.
The annual accounting period of the Partnership shall be its Fiscal Year.
10.4 Reports.
10.4.1 Reports to Partners. The Representatives shall cause to be prepared
and sent to both Partners the following, all at the Partnership's expense:
(a) on or prior to the last business day of the business month
following the end of each fiscal quarter of a Fiscal Year, the Partnership
shall cause to be delivered to each Partner unaudited balance sheets of the
Partnership as at the end of such quarter and the related statements of income
and statements of cash flow for the period from the beginning of such Fiscal
Year to the end of such quarter, and for the period from the beginning of such
quarter to the end of
such quarter, in each case prepared in accordance with Canadian GAAP applied
on a
basis consistent with the audited financial statements of the Partnership,
subject to changes resulting from audit and normal year-end adjustments. The
Partnership
shall also cause to be provided to each Partner, together with such financial
statements, such supplemental financial information of the Partnership as is
necessary to permit the parent of such Partner to prepare consolidated group
financial statements under the accounting standards applicable to the parent
of such Partner;
(b) within ninety (90) days after the end of each Fiscal Year,
the
Partnership shall cause to be delivered to each Partner audited balance sheets
of the Partnership as at the end of such Fiscal Year and the related statements
of income and statements of cash flow of the Partnership for such Fiscal Year,
all in reasonable detail and accompanied by a report thereon of the
Partnership's independent auditors as to such financial statements presenting
fairly the financial position of the Partnership as at the dates indicated, and
the results of their
operations, cash flows and changes in their financial position for the period
indicated in conformity with Canadian GAAP applied on a basis consistent with
prior years (except as noted in the notes thereto), and as to such audit having
been made in accordance with Canadian GAAP. The Partnership shall also cause to
be provided to each Partner, together with such annual financial statements, a
statement of the
balance of such Partner's Capital Account. Not more than once per calendar
year in connection with the annual audit, and not more than once in connection
with each other audit conducted at the unanimous request of the Partners, each
Partner and the principal independent auditor of the parent of such Partner
(acting at the expense of such Partner) shall have full access to the audit work
papers of the Partnership's auditors prepared in connection with issuing their
audit report on the Partnership's financial statements and supporting
Partnership documents (but not to any proprietary data processes of the
Partnership's auditors), and the right to
discuss such matters with the Partnership's auditors and management of the
Partnership;
(c) within fifteen (15) days of the end of each business month,
the
Partnership shall cause to be delivered to each Partner unaudited internal
management reports setting forth unaudited financial statements of the
Partnership, including a balance sheet and profit and loss statement prepared in
accordance with Canadian GAAP;
(d) within five (5) business days following the end of each
business month, the Partnership shall cause to be delivered to each Partner an
unaudited statement of aggregate gross sales and aggregate net sales for such
month; and
(e) no later than ninety (90) days before the end of each Fiscal
Year,
a proposed budget for the next Fiscal Year.
10.5 Tax Matters Partner.
Uniroyal-CA shall be designated as the tax matters partner (the "Tax
Matters Partner"). The Tax Matters Partner shall file any elections pursuant to
subsection
96(3) of the ITA on behalf of the Partnership. The Tax Matters Partner shall
comply with all tax reporting and filing obligations of the Partnership,
including as applicable, the filing on behalf of each of the Partners of the
partnership return contemplated by Regulation 229 to the ITA or any similar
provision.
10.6 Tax Elections and Deductions.
(a) The Board shall have the authority to determine at its sole and
absolute discretion all matters relating to taxation of the Partnership. In
particular, it shall have exclusive authority to decide whether and how much
to claim in respect of any deductions in respect of which discretion is afforded
as to the timing, manner or quantum of deductions. Subject to the election
described immediately below, it shall also have absolute discretion as to
whether to make any
or all Partnership elections permitted under the ITA or any other taxing
statute.
(b) Each Initial Partner and the Partnership shall jointly elect
under subsection 97(2) of the ITA, and under any relevant provincial
tax statute, in a timely manner in respect of the initial contributions of
assets by Uniroyal-CA and Bayer-CA, respectively, to the Partnership.
Each Partner shall bear all costs and
expenses incurred in connection with any such election filed in respect of its
respective initial contribution of assets.
10.7 Title to Partnership Property.
10.7.1 Except as provided in Section 10.7.2, all real and personal property
acquired by the Partnership shall be acquired and held by the Partnership in
its name.
10.7.2 The Board may direct that legal title to all or any portion of the
Partnership's property be acquired or held in a name other than the
Partnership's name. Without limiting the foregoing, the Board may cause title
to be acquired and held in its name or in the names of trustees, nominees, or
straw parties for the
Partnership. It is expressly understood and agreed that the manner of holding
title to the Partnership's property (or any part thereof) is solely for the
convenience
of the Partnership and all of that property shall be treated as Partnership
property.
10.7.3 If a Partner or an Affiliate of a Partner undertakes significant work
with
any auditor engaged by the Partnership, such Partner shall promptly notify the
other Partner. The other Partner shall have the right to request that the
Partnership's auditor resign the engagement with the Partnership. Any auditor
engaged by the Partnership shall agree in the engagement letter that if such
auditor determines atany time during the engagement that a conflict of interest
exists between the auditor and the Partnership or a Partner, the auditor shall
notify the Partnership
and the Partners of the conflict of interest. Upon such notification, the
Partnership or either Partner has the right to request that the Partnership's
auditor resign the engagement with the Partnership.
Article XI
AMENDMENTS; GENERAL PROVISIONS
11.1 Assurances.
Each Partner shall execute all certificates and other documents and shall
do all such filing, recording, publishing, and other acts as the Board deems
appropriate to comply with the requirements of law for the formation and
operation of the Partnership and to comply with any laws, rules, and regulations
relating to the acquisition, operation or holding of the property of the
Partnership.
11.2 Complete Agreement; Annex and Exhibits.
This Agreement constitutes the complete and exclusive statement of the
agreement among the Partners. It supersedes all prior written and oral
statements,
including any prior representation, statement, condition, or warranty relating
to the subject matter of this Agreement. The Annex and Exhibits to this
Agreement are hereby made a part of this Agreement as if set forth in full
herein.
11.3 Applicable Law.
All questions concerning the construction, validity, and interpretation
of this
Agreement and the performance of the obligations imposed by this Agreement
shall be governed by the internal law, not the law of conflicts, of the Province
of Ontario and the federal laws of Canada applicable therein.
11.4 Section Titles.
The headings herein are inserted as a matter of convenience only and do
not
define, limit, or describe the scope of this Agreement or the intent of the
provisions hereof.
11.5 Binding Provisions.
This Agreement is binding upon, and inures to the benefit of, the parties
hereto and their respective administrators, personal and legal
representatives, successors and permitted assigns.
11.6 Notices.
All notices, offers and other communications required or permitted by
this Agreement shall be in writing in the English language, may be given by a
party or its legal counsel, and shall be deemed to have been duly given or made
(i) when personally delivered (provided written confirmation thereof is also
delivered in person or by express courier), or (ii) upon delivery by Federal
Express Mail or
similar nationally recognized express courier service which provides evidence
of delivery, or (iii) upon delivery of a facsimile transmission, provided a copy
thereof is also delivered in person or by express courier:
Notice to Uniroyal-CA shall be sufficient if given to:
Uniroyal Chemical Co./Cie
00 Xxx Xxxxxx
Xxxxxx, XX X0X 0X0
Attention: Xxxxx Xxx, General Manager
Facsimile Number: (000) 000-0000
Telephone Number: (000) 000-0000 Ext. 228
with a copy to
Crompton & Xxxxxxx Corporation
Xxx Xxxxxxx Xxxxx - Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Senior Vice President
and Chief Financial Officer
Facsimile Number: (000) 000-0000
Telephone Number: (000) 000-0000
with a copy to:
Crompton & Xxxxxxx Corporation
Xxx Xxxxxxx Xxxxx - Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx XX, Vice President,
General Counsel and Secretary
Facsimile Number: (000) 000-0000
Telephone Number: (000) 000-0000
Notice to Bayer-CA shall be sufficient if given to:
Bayer Inc.
00 Xxxxxxxx Xxxx
Xxxxxxx, XX X0X 0X0
Attn.: Xxxxxx Xxxxxxxxx,
Vice President and General Counsel
Facsimile Number: (000) 000-0000
Telephone Number: (000) 000-0000
with a copy to:
Bayer Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
Attention: Vice President and Assistant General Counsel
Facsimile Number: 000-000-0000
Telephone Number: 000-000-0000
Notice to the Partnership shall be sufficient if given to:
Xxxxxxxxx Partnership
Bay 00, 0000-00xx Xxxxxx X.X.
Xxxxxxx, XX X0X 0X0
Attn.: General Manager
Facsimile Number: (000) 000-0000
Telephone Number: (000) 000-0000
In the event any Partner gives notice to the Partnership pursuant to this
Agreement, that Partner shall also provide a copy of such notice to the other
Partner. Each party shall have the right to designate other or additional
addresses or addressees for the delivery of notices, by giving notice as
provided in this Section 11.6.
11.7 Terms.
Common nouns and pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular, and plural, as the identity of the Person may in the
context require.
11.8 Severability of Provisions.
Each provision of this Agreement shall be considered severable; and if,
for any reason, any provision or provisions herein are determined to be invalid
and contrary
to any existing or future law, such invalidity shall not impair the operation
of or affect those portions of this Agreement that are valid.
11.9 Alternative Dispute Resolution.
11.9.1 Subject to Sections 11.9.2 and 11.9.3, if a Dispute arises under this
Agreement that cannot be resolved informally by the parties in interest
(including any Disputes between any former Partner or the successors, trustees,
assigns or
administrators of a Partner or former Partner on the one hand and the
Partnership on the other hand), a party to the Dispute shall invoke the
procedures set forth in Exhibit B. All Disputes will be solely and finally
settled by this Section 11.9 and such procedures.
11.9.2 Notwithstanding any thing in Section 11.9.1 to the contrary:
11.9.2.1 Nothing in Section 11.9.1 shall preclude any party from seeking a
preliminary injunction or other provisional relief, either prior to, during or
after
the proceeding provided for in Section 11.9.1, if in its judgment such action is
necessary to avoid irreparable damage or to preserve the status quo.
11.9.2.2 The parties shall accept as correct, final, binding and conclusive
the determination by the outside accountants then employed by the Partnership as
to the calculation of any and all amounts owed by one party to the other
hereunder, and such determination shall not be subject to the provisions of
Section 11.9.1. Disputes as to the proper interpretation of the provisions of
this Agreement that describe how those amounts are to be calculated, however,
shall be subject to the provisions of Section 11.9.1.
11.9.2.3 Any recommendation, approval or determination by the Partners to
remove a Person from office that they are empowered to make, give or withhold,
or take under this Agreement with or without cause when taken in accordance with
the terms and provisions of this Agreement shall not be subject to the
provisions for dispute resolution in this Section 11.9.
11.9.3 Waiver of Trial by Jury. THE PARTNERS, FOR THEMSELVES AND FOR THE
PARTNERSHIP, EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT
EACH MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE OTHER
PARTIES IN CONNECTION HEREWITH.
11.9.4 Consent to Jurisdiction. The Partners, for themselves and for the
Partnership, each irrevocably consent that any action or proceeding against it
under, arising out of or in any manner relating to this Agreement shall be
brought in the courts of the Province of Ontario. The Partners and the
Partnership hereby each expressly and irrevocably assent and submit to the
personal jurisdiction of any such court in any such action or proceeding.
The Partners and the Partnership each
further irrevocably consent to the service of summons, notice or other process
relating to any such action or proceeding by delivery thereof by hand or by
mail in the manner provided for in Section 11.6 of this Agreement and consent
that it may be served with any process or paper by registered mail or by
personal service within or without the Province of Ontario in accordance with
applicable law. The Partners and the Partnership each waive any objection,
claim or defense which it may have at any time to the laying of venue of any
such action or proceeding in any such court;
irrevocably waive any claim that any such action or proceeding brought in any
such court has been brought in an inconvenient forum; and further irrevocably
waive the right to object, with respect to any such action or proceeding brought
in any such court, that such court does not have jurisdiction over such party.
11.9.5 Notwithstanding anything in Section 11.9 to the contrary, a Deadlock
shall not be considered a Dispute and shall not be resolved in accordance with
Section 11.9 or Exhibit B, but shall be resolved in accordance with the
provisions of Section 4.13.
11.10 Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each
of which shall be deemed an original and all of which, when taken together,
constitute one and the same document. The signature of any party to any
counterpart shall be deemed a signature to, and may be appended to, any other
counterpart.
11.11 Estoppel Certificate.
Each Partner shall, within ten (10) days after written request by the
Board, deliver to the requesting Person a certificate stating, to the Partner's
knowledge, that (a) this Agreement is in full force and effect; (b) this
Agreement has not been modified except by any instrument or instruments
identified in the certificate; and
(c) there is no default hereunder by the requesting Person, or if there is a
default, the nature and extent thereof.
11.12 Amendment.
This Agreement may be amended by a unanimous affirmative vote of all
Partners.
11.13 Consents.
Unless otherwise explicitly provided for herein, any and all consents,
agreements or approvals provided for or permitted by this Agreement shall be in
writing and a signed copy thereof shall be filed and kept with the books of the
Partnership.
11.14 Legends.
If certificates for any Interest are issued that evidence a Partner's
Interest,
each such certificate shall bear such legends as may be deemed necessary or
appropriate by the Board to reflect restrictions upon transfer contemplated
herein.
11.15 Parties in Interest.
Nothing in this Agreement is intended to confer any rights or remedies on
any Persons other than the Partnership and the Partners. This Agreement shall
not be construed to relieve or discharge any obligations or liabilities of Third
Parties, nor shall it be construed to give Third Parties any right of
subrogation or action over or against the Partners or the Partnership.
11.16 Counting of Time.
Whenever time is to be counted hereunder, counting will commence on the
day notice is deemed duly given pursuant to Section 11.6 and continue for
consecutive calendar days through and including the final day of the relevant
period provided for in this Agreement.
11.17 English Language.
This Agreement is made and entered into in the English language, which
language shall be controlling in all respects. All communications and notices
from any party to another shall likewise be in the English language.
11.18 Exhibits
The Exhibits to this Agreement are as follows and will be attached hereto
and are incorporated herein by reference.
Exhibit A: Partner's Names, Percentage, Capital Contributions.
Exhibit B: Alternative Dispute Resolution Procedures.
Exhibit C: Forms of Operative Agreements.
(the next page is the signature page)
IN WITNESS WHEREOF, the parties hereto have executed this
Partnership Agreement as of the date and year first above written.
UNIROYAL CHEMICAL CO./CIE
By: /s/Xxxxx Xxx
Name: Xxxxx Xxx
Title: General Manager
BAYER INC.
By: /s/Xxxxxx
Name: Xxxxxx
Title: VP CFO
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
EXHIBIT A
To
Partnership Agreement
of Xxxxxxxxx Partnership
Name of Partner Percentage Initial Capital Contribution
Units
Uniroyal Chemical Co./Cie 50% Uniroyal Assets*
50
Uniroyal Assumed Obligations*
Bayer Inc. 50% Bayer Assets*
50
Bayer Assumed Obligations*
* As defined in the Purchase and Contribution Agreement
EXHIBIT B
To
Partnership Agreement
of Xxxxxxxxx Partnership
ALTERNATIVE DISPUTE RESOLUTION PROCEDURES
A. Method of Invoking ADR Procedures
1. These procedures may be invoked by any party by giving written
notice to the others of the dispute and designating one or more persons
(collectively, the "Designee") to act on behalf of the disputing party regarding
the dispute. The other parties shall be required to respond to the disputing
party's notice within ten (10) business days by designating in writing its own
Designee. A party may choose to represent itself, or if it appoints a Designee,
its officers may nonetheless attend such meetings.
2. The parties, each acting through its Designee, shall meet at a
mutually acceptable time and place within ten (10) business days after the
non-disputing party designates its Designee to the others. At that meeting, the
parties shall attempt in good faith to negotiate a resolution of the dispute, or
failing that, to agree on a method for resolving the claim or dispute.
3. If, within ten (10) business days after the first meeting or
within such longer period of time as the parties may mutually agree, the parties
have not succeeded in negotiating a resolution of the claim or dispute or
agreeing on a dispute resolution mechanism, they shall submit the dispute to
mediation in accordance with the procedures set forth herein.
4. The parties will jointly appoint a mutually acceptable mediator to
mediate the dispute. If the parties are unable to agree on a mutually
acceptable mediator within five (5) business days after the conclusion of the
negotiations described in paragraph 3 above, then the parties shall select a
neutral Third Party from American Arbitration Association ("AAA") in New York,
New York, with the assistance of AAA, unless the parties agree otherwise in
finding a mutually acceptable mediator.
5. Each party to the dispute shall bear an equal share of the fees
and costs of the mediator, and any fees and costs of AAA.
6. The parties agree to participate in good faith in the mediation
and negotiations related thereto for a period of thirty (30) days from
appointment of a mediator by any of the parties or the AAA.
7. The parties agree that the mediation period may be extended for an
additional thirty (30) days beyond the initial thirty (30) day period upon
agreement of the parties. Either party may terminate the mediation at any time
after the initial thirty (30) days or when any agreed upon extension has
expired.
B. Mediation Procedures
1. The mediator shall be neutral and impartial.
2. The mediator shall control the procedural aspects of the
mediation. The parties will cooperate fully with the mediator.
(a) The mediator is free to meet and communicate separately with
each party.
(b) The mediator will decide when to hold joint meetings with the
parties and when to hold separate meetings. There shall be no stenographic
record of any meeting. Formal rules of evidence will not apply.
3. Each party may be represented by more than one person, including
an attorney.
4. The process will be conducted expeditiously.
5. The mediator will not transmit information received from any party
to another party or any third person unless authorized to do so by the party
transmitting the information.
6. The entire process is confidential. The parties and the mediator
will not disclose information regarding the process, including settlement terms,
to third persons, unless the parties otherwise agree. The process shall be
treated as a compromise negotiation for purposes of the applicable rules of
evidence. Further, the parties will not disclose the existence of a dispute or
information regarding the mediation to third persons including, without
limitation, the media.
7. The parties will refrain from pursuing administrative and/or
judicial
remedies during the mediation process, except as otherwise expressly provided
in the agreement which incorporates these procedures. The parties agree that
any and all statutes of limitation or periods of time for taking action shall be
tolled during the time period that the parties are engaged in mediation.
8. Unless all parties and the mediator otherwise agree in writing:
(a) The mediator will be disqualified as a witness, consultant or
expert in any pending or future investigation, action or proceeding relating
to the subject matter of the mediation (including any investigation, action or
proceeding which involves persons not parties to this mediation);
(b) The mediator, at the conclusion of the mediation, will
immediately either destroy and certify destruction of, or return to the
providing party, any and all documents and information in the mediator's
possession, whether or not the mediation was successful; and
(c) The mediator will not be subpoenaed in any such
investigation, action or preceding and all parties will oppose any effort to
have the mediator subpoenaed.
9. The mediator, if a lawyer, may freely express views to the parties
on the legal issues of the dispute.
10. The mediator shall not be liable for any act or omission in
connection with the mediation.
11. The mediator may withdraw at any time by written notice to the
parties (i) for overriding personal reasons, (ii) if the mediator believes
that a party is not acting in good faith, or (iii) if the mediator concludes
that further mediation efforts would not be useful.
C. Litigation
If the parties do not resolve the dispute through mediation within the
period provided in Part A above, the parties may pursue any and/or all
applicable legal and/or equitable remedies available to them.
EXHIBIT C
To
Partnership Agreement
of Xxxxxxxxx Partnership
FORMS OF OPERATIVE AGREEMENTS
1. Marketing Agreement.
2. Pre-Exercise Agreement.
3. Post-Exercise Agreement.
4. Technology Cross-License Agreement by and between Xxxxxxxxx LLC and
Agro ST Inc.
5. Cross-License Agreement.
ANNEX
ALLOCATION OF PROFIT AND LOSS
WHEREAS it is the intention of the Initial Partners that the income
(including gains) and losses of the Partnership be allocated for general
purposes (including Capital Accounts) according to each Partner's Percentage
Interest in the Partnership but that recognition be made for tax purposes of the
fact that eligible capital property acquired by the Partnership from an Initial
Partner pursuant to the Purchase and Contribution Agreement was the subject of
a subsection 97(2) election under the ITA, the Partnership's income and losses
as determined for income tax purposes will be allocated to the Initial Partners
in accordance with the provisions
of this Annex until the loss of deductions to the Partnership resulting from
such election have been fully reflected as additional income inclusions of the
Initial Partner that benefitted from the non-recognition treatment of such
contribution (or as greater loss allocations to other Partner(s)).
1. Defined Terms.
"Adjustment" for a particular Fiscal Period of the Partnership shall
mean an amount equal to A where
A = [7% x (B - C)] + D;
B = 75% of the amount by which the fair market value of all the eligible
capital property contributed by Uniroyal-CA to the Partnership pursuant to the
Purchase and Contribution Agreement, as determined for Capital Account purposes,
exceeds the aggregate of all elected amounts in respect of such eligible capital
property determined for purposes of the Section 97(2) election referred to in
Section 10.5 of this Agreement;
C = the aggregate amount of Adjustments determined for previous Fiscal
Periods; and
D = where the Partnership disposes of all or part of any eligible capital
property which has been contributed by Uniroyal-CA to the Partnership under the
Purchase and Contribution Agreement (such contributed eligible capital
property or
contributed part of the eligible capital property to be referred to as the
"Contributed Eligible Capital Property"), the lesser of:
(i) 75% of the amount of the proceeds received by the Partnership
upon the disposition of such Contributed Eligible Capital Property;
(ii) 75% the amount of the Purchase Price (as defined in the Purchase
and Contribution Agreement) allocated to such Contributed Eligible Capital
Property pursuant to the Purchase and Contribution Agreement; and
(iii) (B - C) - [7% x (B - C)].
"Business Income" or "Business Loss" for any Fiscal Period means the
income or loss, as the case may be, of the Partnership for such Fiscal Period
from carrying on business for the purposes of the ITA.
"Income Carry-Forward Account" of Uniroyal-CA, shall initially be nil
and shall be adjusted at the end of each Fiscal Period in accordance with
Section 3(d) of this Annex.
"GAAP Profit" and "GAAP Loss" for each Fiscal Period (or other period
for which GAAP Profit or GAAP Loss must be computed) means the net income or
net loss from the operations of the Partnership for the period as determined by
Canadian GAAP.
"Proportionate Share", when used with respect to a Partner, shall be
equal to the Percentage Interest of such Partner in the Partnership.
2. Allocation of Profit or Loss for Capital Account Purposes.
Each Partner's Proportionate Share of GAAP Profit or GAAP Loss,
unaffected by this Annex, for each Fiscal Period shall be credited or charged,
as the case may be, to such Partner's Capital Account, as provided in 3.6.1 and
3.6.2 of the Partnership Agreement.
3. Allocation of Income or Loss for Tax Purposes.
(a) General. For each Fiscal Period, the Partnership shall
compute its income or loss from every source pursuant to the ITA.
(b) Allocation of Business Income. Business Income for each
Fiscal
Period shall be allocated between Uniroyal-CA and Bayer-CA as follows and in
the following order of priority:
(i) To Uniroyal-CA, the aggregate of:
(A) for each Fiscal Period, the lesser of (1) the
Business Income of the Partnership for such Fiscal Period, or (2) an amount
equal to the Adjustment for such Fiscal Period; and
(B) the lesser of (1) the Business Income of the
Partnership for such Fiscal Period, less any Business Income for such Fiscal
Period allocated pursuant to Section 3(b)(i)(A) of this Annex, or (2) an amount
equal to the balance of Uniroyal-CA's Income Carry-Forward Account immediately
after the end of the previous Fiscal Period; and
(ii) To each of Uniroyal-CA and Bayer-CA, an amount equal
to such Partner's Proportionate Share of the excess, if any, of the Business
Income of the
Partnership for such Fiscal Period over the aggregate of the Business Income
for such Fiscal Period allocated pursuant to Section 3(b)(i) of this Annex.
(c) Allocation of Business Loss. Business Loss of each Fiscal
Period shall be allocated between Uniroyal-CA and Bayer-CA as follows and in the
following order of priority:
(i) To Bayer-CA, the aggregate of:
(A) for each Fiscal Period, the lesser of (1) the Business
Loss of the Partnership for such Fiscal Period, or (2) an amount equal to the
Adjustment for such Fiscal Period; and
(B) the lesser of (1) the Business Loss of the
Partnership for such Fiscal Period, less any Business Loss for such Fiscal
Period allocated pursuant to Section 3(c)(i)(A) of this Annex, or (2) an amount
equal to the balance of Uniroyal-CA's Income Carry-Forward Account immediately
after the end of the previous Fiscal Period; and
(ii) To each of Uniroyal-CA and Bayer-CA, an amount equal
to such Partner's Proportionate Share of the excess if any, of the Business Loss
of the Partnership for such Fiscal Period over the aggregate of the Business
Loss for such Fiscal Period allocated pursuant to Section 3 (c) (i) of this
Annex.
(d) Adjustments to Income Carry-Forward Account. The Income
Carry-Forward Account of Uniroyal-CA shall be adjusted at the end of each of
Fiscal Period as follows:
(i) Uniroyal-CA's Income Carry-Forward Account shall be
increased by an amount equal to, with respect to each Fiscal Period, the excess,
if any, of the amount described in Section 3(b)(i)(A)(2) of this Annex over the
amount of Business Income allocated to Uniroyal-CA pursuant to Section
3(b)(i)(A) of this Annex for such Fiscal Period;
(ii) Uniroyal-CA's Income Carry-Forward Account shall be
decreased by an amount of Business Income allocated to Uniroyal-CA pursuant to
Section 3(b)(i)(B) of this Annex for such Fiscal Period; and
(iii) Uniroyal-CA's Income Carry-Forward Account shall be
decreased by an amount equal to the aggregate of:
(A) with respect to each Fiscal Period, the amount of
Business Loss allocated to Bayer-CA pursuant to Section 3(c)(i)(A) of this
Annex for such Fiscal Period; and
(B) the amount of Business Loss allocated to Bayer-CA
pursuant to Section 3(c)(i)(B) of this Annex for such Fiscal Period.
(e) Allocation of Other Income or Loss. For each Fiscal Period,
the Partnership shall compute its income or loss ("Non-Business Income or Loss")
from each source other than Business Income or Business Loss pursuant to the
ITA.
In the event that, following the allocations of Business Income and Business
Loss pursuant to Section 3(b) and (c) of this Annex and the corresponding
adjustments pursuant to Section 3(d) of this Annex for such period, the Income
Carry-Forward Account of Uniroyal-CA is greater than nil, then such Non-Business
Income or Loss shall be
allocated between the Partners in accordance with the principles set forth in
Sections 3(b) and (c) of this Annex and the corresponding adjustments shall be
made in the Income Carry-Forward Account of Uniroyal-CA in accordance with the
principles set forth in Section 3(d) of this Annex. Each Partner's
Proportionate share of anyNon-Business Income or Loss not allocated pursuant to
the preceding sentence shall be allocated to such Partner.
(f) Equitable Adjustment. If (i) a Partner transfers its
Interest in the Partnership and the Partnership is not terminated as a result of
such transfer, or (ii) a Partner's Proportionate Share changes, the provisions
of this Section 3 of this Annex shall be amended in an appropriate manner to
give effect to the admission of such transferee to the Partnership or the change
in such Proportionate Share and to ensure that the purposes of this Section 3
are fulfilled.
4. Tax Assessments.
(a) Consultation. No Partner shall make any agreement on its own
behalf with respect to a proposed or threatened assessment, reassessment, or
other tax matter in respect of the activities of the Partnership without
consulting with the other Partner.
(b) Adjustments. If the allocation of income or loss to a Partner in
accordance with the provisions of this Agreement is determined by:
(i) Revenue Canada or a provincial revenue authority not to be
reasonable having regard to all the circumstances, and the Partner agrees to
report a share of income (or loss) from the Partnership for tax purposes that
is higher than (or lower than) the amount allocated in accordance with this
Agreement; or
(ii) a court having jurisdiction in that matter (after all
appeal rights have been exhausted or all times for appeal have expired without
appeals having been taken) not to be reasonable having regard to all the
circumstances;
the income or loss for tax purposes of the other Partner may be adjusted
to reflect the change to the first Partner's income or loss for tax purposes,
and each Partner shall take all reasonable steps to give effect to the
adjustment, including the filing of amended tax returns.
