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Exhibit 2
DISTRIBUTION AGREEMENT
BY AND BETWEEN
MONSANTO COMPANY,
A DELAWARE CORPORATION,
AND
SOLUTIA INC.,
A DELAWARE CORPORATION
AS OF SEPTEMBER 1, 1997
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DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of September 1, 1997 (this
"Agreement"), by and between Monsanto Company, a Delaware corporation
("Monsanto"), and Solutia Inc., a newly-formed Delaware corporation
("Chemicals").
W I T N E S S E T H:
WHEREAS, the Board of Directors of Monsanto has determined that it is
appropriate and desirable to separate Monsanto and its subsidiaries into two
publicly traded organizations by: (1) consolidating into Chemicals and its newly
formed subsidiaries certain of the businesses conducted by Monsanto directly and
through certain of its other subsidiaries and (2) distributing to the holders of
the issued and outstanding shares of common stock, par value $2.00 per share, of
Monsanto all of the issued and outstanding shares of common stock, par value
$.01 per share, of Chemicals in accordance with Article III hereof (the
"Distribution");
WHEREAS, the Distribution is intended to qualify as a tax-free spinoff
under Section 355 of the Internal Revenue Code of 1986, as amended;
WHEREAS, the parties hereto have determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
the Distribution and to set forth other agreements that will govern certain
other matters prior to and following such Distribution;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 GENERAL. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
1. ACTION: any demand, action, suit, countersuit, arbitration,
inquiry, proceeding or investigation by or before any federal, state,
local, foreign or international Governmental Authority or any arbitration
or mediation tribunal.
2. AFFILIATE: with respect to any specified Person, a Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person;
PROVIDED, HOWEVER, that for purposes of this
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Agreement, no member of either Group shall be deemed to be an Affiliate of any
member of the other Group.
3. AGENT: the distribution agent appointed by Monsanto to distribute
the shares of Chemicals Common Stock pursuant to the Distribution.
4. ARBITRATION ACT: the United States Arbitration Act, 9 U.S.C.
secs.1-14, as the same may be amended from time to time.
5. ARBITRATION DEMAND DATE: as defined in Section 7.03(a) hereof.
6. ARBITRATION DEMAND NOTICE: as defined in Section 7.03(a) hereof.
7. ASSETS: any and all assets, properties and rights (including
goodwill), wherever located (including in the possession of vendors or
other third parties or elsewhere), whether real, personal or mixed,
tangible, intangible or contingent, in each case whether or not recorded or
reflected or required to be recorded or reflected on the books and records
or financial statements of any Person, including, without limitation, the
following:
(i) all accounting and other books, records and files whether in
paper, microfilm, microfiche, computer tape or disc, magnetic tape or
any other form;
(ii) all apparatus, computers and other electronic data
processing equipment, fixtures, trade fixtures, machinery, equipment,
capital and other spares, furniture, office equipment, automobiles,
trucks, aircraft, rolling stock, vessels, motor vehicles, trailers and
other transportation equipment, special and general tools, test
devices, prototypes and models and any other tangible personal
property;
(iii) all inventories of materials, raw materials, catalysts,
precious metals, stores inventories, supplies, work-in-process,
consigned goods and finished goods and products and product samples;
(iv) all interests in real property of whatever nature, including
easements, leases and licenses, whether as owner, mortgagee or holder
of a Security Interest in real property, lessor, sublessor, lessee,
sublessee or otherwise;
(v) all buildings and other improvements to real property and all
leasehold improvements;
(vi) all bonds, notes, debentures or other securities issued by
any Subsidiary or any other Person, all loans, advances or other
extensions of credit or capital contributions to any Subsidiary or any
other Person, all certificates of deposit, bankers' acceptances,
certificates of interest or participation in profit sharing
agreements, collateral trust certificates, preorganization
certificates or subscriptions, transferable shares, investment
contracts, voting trust certificates, fractional
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undivided interests in oil, gas or other mineral rights, puts, calls,
straddles, options and other securities of any kind;
(vii) all license agreements, leases of personal property and
other leases, open purchase orders for raw materials, supplies, parts
or services, unfilled orders for the manufacture or sale of products,
other sales or purchase agreements, other commitments or arrangements,
permits, distribution arrangements, and other contracts, agreements or
commitments;
(viii) all deposits, letters of credit and performance and surety
bonds;
(ix) all technical information, data, specifications, research
and development information, engineering drawings, operating and
maintenance manuals, and materials and analyses prepared by
consultants and other third parties; environmental clean-up
technology, safety and industrial hygiene methods and technology;
(x) all technology, domestic and foreign patents, statutory,
common law and registered copyrights, trade names, registered and
unregistered trademarks, service marks, service names, trade styles,
product bar codes and associated goodwill, and registrations and
applications for any of the foregoing, mask works, trade secrets,
inventions, formulas, processes, designs, know-how, or other data or
information, confidential information, other proprietary information
and licenses from third Persons granting the right to use any of the
foregoing and other rights in, to and under the foregoing (it being
understood that the transfer of Assets described in this clause (x)
shall be made pursuant to the Intellectual Property Agreements);
(xi) all computer applications, programs and other software and
databases (including all embodiments or fixations thereof and related
documentation, registrations and franchises, and all additions,
improvements, enhancements, updates and accessions thereto), all
technical manuals and documentation made in connection with the
foregoing, and the right to ▇▇▇ for past infringement thereof, and all
licenses and rights with respect to the foregoing or of like nature,
including operating software, network software, firmware, middleware,
design software, design tools, systems documentation and instructions;
(xii) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier lists,
customer and vendor data, correspondence and lists, product
literature, artwork, design, development and manufacturing files,
vendor and customer drawings, formulations and specifications, quality
records and reports, lists of advertisers, records pertaining to
advertisers and accounts, and other books, records, studies, surveys,
reports, plans and document forms and any other business information;
(xiii) all prepayments or prepaid expenses, trade accounts and
other accounts and notes receivable and all other current assets;
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(xiv) the right to receive mail, payments on accounts receivable
and other communications;
(xv) all rights under contracts, agreements, warranties or
guaranties, all claims or rights or judgments against any Person, all
rights in connection with any bids or offers and all claims, choses in
action, rights of recovery and rights of set-off or similar rights,
whether accrued or contingent, refunds and deposits;
(xvi) all rights under insurance policies and all rights in the
nature of insurance, indemnification or contribution;
(xvii) all licenses, permits, approvals and authorizations which
have been issued by any Governmental Authority;
(xviii) advertising materials and other printed or written
materials;
(xix) employee contracts, including any rights thereunder to
restrict an employee or former employee from competing in certain
respects, and personnel and medical files and records;
(xx) cash, cash equivalents, bank accounts, lock boxes and other
deposit arrangements; and
(xxi) interest rate, currency, commodity or other swap, collar,
cap, floor, or other hedging or similar agreements or arrangements.
8. BUSINESS TRANSFER AGREEMENTS: the agreements which have been or
will be entered into between certain wholly-owned Chemicals Subsidiaries
incorporated, or having a branch or presence outside the United States and
certain wholly-owned Monsanto Subsidiaries incorporated, or having a branch
or presence outside the United States, providing for the transfer of
Chemicals Assets and assumption of Chemicals Liabilities outside the United
States from such Monsanto Subsidiaries to such Chemicals Subsidiaries. For
purposes hereof, the term Business Transfer Agreement shall also include:
(i) any other agreements related to the transfer of Chemicals Assets and
assumption of Chemicals Liabilities outside the United States, including
without limitation, those agreements which are required by local law or are
executed in connection with or to implement such transfer of Chemicals
Assets and assumption of Chemicals Liabilities; and (ii) the assignment
from Monsanto to Chemicals transferring the operating assets in the United
States.
9. BUSINESS DAY: any day other than a Saturday, a Sunday or a day on
which banking institutions located in the States of Missouri, New York or
Delaware are authorized or obligated by law or executive order to close.
10. CHEMICALS: as defined in the preamble to this Agreement.
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11. CHEMICALS ASSETS: excluding the Excluded Chemicals Assets, and
any Assets sold or otherwise disposed of on or prior to the Distribution
Date (1) all Assets included on the Chemicals Balance Sheet or the
accounting records supporting the Chemicals Balance Sheet, as adjusted by
the pro forma adjustments thereto as set forth in the Proxy Statement and
all Assets of either Group acquired between March 31, 1997 and the
Distribution Date which would have been included on the Chemicals Balance
Sheet had they been owned on March 31, 1997; (2) all Assets exclusively
dedicated to the Chemicals Business and all Assets formerly used in the
Former Chemicals Business which are not used in the Monsanto Business on
the Distribution Date, which in either case, are owned, leased, licensed or
held by any member of either Group on the Distribution Date; (3) real
property (including the buildings, fixtures and improvements located
thereon) listed on Schedule 1.01(11)(a) and such other real property
interests held by members of either Group formerly used in any Former
Chemicals Business which are not used in the Monsanto Business on the
Distribution Date; (4) all of the outstanding shares of all classes of
capital stock of the Chemicals Subsidiaries to the extent owned by any
member of the Monsanto Group; (5) the partnership, joint venture and other
equity interests listed on Schedule 1.01(11)(b), and Chemicals' rights with
respect to and interests in the P4 Joint Venture as provided in the P4
Joint Venture Agreement; (6) all contracts, leases and licenses exclusively
dedicated to the Chemicals Business, and such rights under other contracts,
leases or licenses as the parties have otherwise agreed pursuant to this
Agreement, the Other Agreements or in any other enforceable agreement
executed on behalf of a member of the Chemicals Group, on the one hand, and
a member of the Monsanto Group, on the other hand; (7) warranties,
guarantees, claims or any other rights that members of either Group may
have against any Third Party (including Governmental Authorities) to the
extent relating to the disposition of any Former Chemicals Business; (8)
those books and records to be delivered to the Chemicals Group and rights
of access to other books and records as provided in Article VI of this
Agreement; (9) the rights of Chemicals under the Insurance Policies as
provided in Article IX of this Agreement; (10) any pension assets, pension
funds or other Assets expressly contemplated to be transferred, licensed or
otherwise made available to any member of the Chemicals Group pursuant to
this Agreement or any Other Agreements; and (11) all of the Assets listed
on Schedule 1.01(11)(c).
CHEMICALS ASSETS shall also mean any and all other Assets owned or
held on the Distribution Date by members of the Monsanto Group that are
related to the Chemicals Business and which the parties agree should have
been transferred to the Chemicals Group, if, had the parties given specific
consideration to such Asset as of the date hereof, such Asset would have
been classified as a Chemicals Asset; provided, however, that no Asset
shall be deemed to be a Chemicals Asset solely as a result of this
provision unless a claim with respect thereto is made by a member of the
Chemicals Group on or prior to eighteen months after the Distribution Date.
12. CHEMICALS BALANCE SHEET: the unaudited combined balance sheet of
the Chemicals Business as of March 31, 1997 and the notes thereto as set
forth in the Proxy Statement.
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13. CHEMICALS BUSINESS: (i) all businesses and operations (including
related joint ventures and alliances) of the chemicals businesses of
Monsanto as described in the Proxy Statement in the section "Businesses and
Properties of Chemicals After the Spinoff" and as conducted on the
Distribution Date, consisting principally of those businesses and
operations set forth on Schedule 1.01(13) conducted by the Acrilan(R)
Acrylic Fibers Unit, the Carpet Fibers Unit, the Nylon Plastics and
Polymers Unit, the Nylon Industrial Unit, the Intermediates Unit, the
Saflex(R) Unit, the Phosphorus and Derivatives Unit, the Resins Unit, the
Polymer Modifiers Unit and the Industrial Products Unit and (ii) any other
business or operation on the Distribution Date conducted by or for the
Chemicals Group through the ownership or use of the Chemicals Assets.
14. CHEMICALS CLAIM: any claim with respect to any injury, Loss,
Liability, damage or expense (x) that is or was incurred or asserted to
have been incurred prior to the Distribution Date in, or in connection
with, the Chemicals Business, the Former Chemicals Business, the Chemicals
Assets or the Chemicals Liabilities or the Joint Ownership Properties or
the P4 Business to the extent of Chemicals' rights or obligations under the
P4 Joint Venture Agreement with respect to such claims; or (y) that is or
was incurred prior to the Distribution Date that is against any member of
the Chemicals Group or any employee of any member of the Chemicals Group;
provided, that in the case of any claim under (x) or (y) or claims
identified in (i) through (vi) below, such injury, Loss, Liability, damage
or expense (including costs of defense and reasonable attorneys' fees) are
or may be insured or insurable under one or more of the Insurance Policies.
Chemicals Claims include, without limitation, (i) claims for property or
casualty damage or any other injury, Loss, Liability, damage or expense
with respect to Chemicals Assets; (ii) claims of injury, Loss, Liability,
damage or expense arising from business interruption of any type of the
Chemicals Business or Former Chemicals Business; (iii) claims against any
member of the Chemicals Group whether or not the Chemicals Group has or has
assumed liability for such claims under this Agreement or any of the Other
Agreements; (iv) claims against any member of the Monsanto Group to the
extent any member of the Chemicals Group has assumed liability for such
claims under this Agreement or any of the Other Agreements; (v) claims
involving or against any director, officer, employee, fiduciary or agent of
the Chemicals Group who are entitled or would have been entitled to
indemnification by Monsanto had the Distribution not occurred; and (vi)
claims with respect to the Chemicals Business, the Former Chemicals
Business, the Chemicals Assets, the Chemicals Liabilities or the Joint
Ownership Properties or the P4 Business to the extent of Chemicals rights
or obligations under the P4 Joint Venture Agreement involving any other
Person who is entitled or would have been entitled to indemnification by
any member of the Monsanto Group had the Distribution not occurred.
15. CHEMICALS COMMON STOCK: the common stock, par value $.01 per
share, of Chemicals. References to Chemicals Common Stock shall also
include the associated preferred share purchase rights issued under the
Chemicals Rights Plan.
16. CHEMICALS DIRECTOR: any individual who is a member of the Board
of Directors of Chemicals.
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17. CHEMICALS FACILITIES: facilities which are Chemicals Assets.
18. CHEMICALS GROUP: Chemicals and the Chemicals Subsidiaries of
which Chemicals directly or indirectly owns 100% of the stock or other
equity interest entitled to vote on the election of members to the board of
directors or similar governing body.
19. CHEMICALS LIABILITIES: excluding the Excluded Chemicals
Liabilities and excluding those Liabilities (or portions thereof) which
have been satisfied, paid or discharged prior to the Distribution Date, (1)
all Liabilities included on the Chemicals Balance Sheet or the accounting
records supporting such Chemicals Balance Sheet as adjusted by the pro
forma adjustments thereto as set forth in the Proxy Statement and all
Liabilities of either Group incurred or arising between March 31, 1997 and
the Distribution Date which would have been included on the Chemicals
Balance Sheet had they been incurred or arisen on or prior to March 31,
1997; (2) all Liabilities relating exclusively to or arising exclusively
from the Chemicals Assets, the Chemicals Business or the Former Chemicals
Business or the disposition of any Former Chemicals Business, whether
incurred or arising prior to or after the Distribution Date; (3) except as
expressly provided in the Other Agreements, all Liabilities relating to or
arising from the operation of its business or the use of its Assets by any
member of the Chemicals Group at any time from and after the Distribution
Date; (4) those Liabilities for worker's compensation or Third Party claims
incurred prior to the Distribution Date at a site transferred to the
Chemicals Group as part of the Chemicals Assets; (5) all Liabilities
assumed by any member of the Chemicals Group under an express provision of
this Agreement or an Other Agreement; (6) those Liabilities for
environmental remediation or other environmental responsibilities as
described to be assumed by Chemicals in Schedule 1.01(19)(a); (7) all
Liabilities for products of the Chemicals Business or Former Chemicals
Business sold to Third Parties by any member of either Group; (8) all
Liabilities arising under the Financing Facility and the Third Party
indebtedness listed on Schedule 1.01(19)(b); and (9) all Liabilities listed
on Schedule 1.01(19)(c).
CHEMICALS LIABILITIES shall also mean, any and all other
Liabilities owed on the Distribution Date by members of the Monsanto Group
that are related to the Chemicals Business and which the parties agree
should have been transferred to the Chemicals Group, if, had the parties
given specific consideration to such Liability as of the date hereof, such
Liability would have been classified as a Chemicals Liability; provided,
however, that no Liability shall be deemed to be a Chemicals Liability
solely as a result of this provision unless a claim with respect thereto is
made by a member of the Monsanto Group on or prior to eighteen months after
the Distribution Date.
20. CHEMICALS RIGHTS PLAN: the share purchase rights plan in the form
approved by the Board of Directors of Chemicals prior to the Distribution
Date.
21. CHEMICALS SUBSIDIARIES: all of the corporations listed on
Schedule 1.01(21).
22. CHEMICALS SUPPORT AGREEMENTS: any obligation or agreement of the
Monsanto Group under any guarantee, letter of credit, bond, letter of
comfort or working
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capital maintenance agreement obtained prior to the Distribution Date for
the benefit of the Chemicals Business or any member of the Chemicals Group.
23. CLAIMS ADMINISTRATION: the processing of claims made under the
Insurance Policies, including the reporting of claims to the insurance
carrier, management and defense of claims and providing for appropriate
releases upon settlement of claims.
24. CODE: the Internal Revenue Code of 1986, as amended, or any
successor legislation and the regulations promulgated thereunder.
25. CPR: the Center for Public Resources.
26. DGCL : the Delaware General Corporation Law, as amended.
27. DISTRIBUTION: the distribution to holders of shares of Monsanto
Common Stock to be effected pursuant to Article III on the basis of one
share of Chemicals Common Stock for every five (5) shares of Monsanto
Common Stock held of record as of the Record Date.
28. DISTRIBUTION DATE: the date, to be determined by the Board of
Directors of Monsanto, or such committee of the Board as shall be
designated by the Board of Directors, as of which the Distribution shall be
effected.
29. EMPLOYEE BENEFITS ALLOCATION AGREEMENT: an employee benefits and
compensation allocation agreement to be entered into between Monsanto and
Chemicals substantially in the form attached hereto as Exhibit 1.01(29),
with such changes as may be mutually satisfactory to Monsanto and
Chemicals.
30. ESCALATION NOTICE: as defined in Section 7.02(a) hereof.
31. EXCHANGE ACT: the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.
32. EXCLUDED CHEMICALS ASSETS: (i) (a) the Joint Ownership Properties
and (b) that undivided interest in the P4 Joint Venture that is to continue
to be owned by Monsanto under the P4 Joint Venture Agreement; (ii) the
phosphorus trichloride facility and related Assets at Monsanto's plant in
Luling, Louisiana; (iii) cash and cash equivalents (as such term is used in
connection with the preparation of Monsanto's financial statements) in
excess of $75,000,000; (iv) Monsanto Enviro-Chem Systems, Inc.; (v) ▇▇▇▇▇▇▇
Construction Company; (vi) any loan to, note of, or investment in Camelot
Superabsorbents Ltd.; (vii) all Assets of Monsanto's diamond coatings and
optical/vision business, including without limitation, all Assets which
were formerly owned, leased or controlled by Diamonex, Incorporated, its
subsidiaries and any entity in which it held at any time an equity
interest; (viii) agreements with Third Parties relating to Monsanto Assets,
including without limitation, operating agreements at Monsanto Facilities
which relate to businesses
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sold prior to the Distribution Date; (ix) all Assets of Monsanto's
industrial alginates business; and (x) those Assets listed on Schedule
1.01(32).
33. EXCLUDED CHEMICALS LIABILITIES: those Liabilities listed on
Schedule 1.01(33).
34. FINANCING FACILITY: (i) the commercial paper facility, including
the Issuing and Paying Agency and Assignment and Assumption Agreement, to
be entered into prior to the Distribution Date by Monsanto, Chemicals, and
an agent or co-agents selected by Monsanto, pursuant to which, prior to the
Distribution Date, Monsanto will issue assumable commercial paper such that
the sum of (x) the accreted principal amount on the Distribution Date of
commercial paper that Chemicals will assume on the Distribution Date and
(y) the principal amount, plus accrued interest, on the Distribution Date
of other Third Party indebtedness listed on Schedule 1.01(19)(b) that
Chemicals will assume on the Distribution Date (excluding indebtedness
relating to the Chemicals SIP Trust (as defined in the Employee Benefits
Allocation Agreement)) equals $1,000,000,000; and (ii) the credit agreement
or agreements to be entered into by Chemicals.
35. FOREIGN EXCHANGE RATE: with respect to any currency other than
United States dollars as of any date, the average of the bid and asked
rates at 9:00 a.m., New York City time, on such date at which such currency
may be exchanged for United States dollars as quoted by Citibank, N.A.,
except that, with respect to any Indemnifiable Loss covered by insurance,
the Foreign Exchange Rate for such currency shall be determined as set
forth in Section 4.03(d)(2).
36. FORMER CHEMICALS BUSINESS: those businesses and operations which
were formerly operated by Monsanto as part of its chemicals subsidiaries,
units or divisions and which have been sold, or otherwise disposed of, or
discontinued prior to the Distribution Date including but not limited to
those businesses and operations set forth on Schedule 1.01(36)(a) but
excluding, without limitation (except to the extent set forth on such
Schedule), (i) shut down or sold plant sites and businesses associated with
product families that continue in the Monsanto Group or in the P4 Joint
Venture; (ii) shut down or sold plant sites and businesses previously
closely integrated (supply chain) with upstream or downstream Monsanto
subsidiaries, units or divisions other than a chemicals subsidiary, unit or
division; (iii) businesses or operations relating to any of the following:
(a) health care or vision; (b) pharmaceuticals; (c) environmental products
(e.g., Brinks); (d) food products and additives; (e) feed products and
additives; (f) BST/animal hormones; (g) agricultural chemicals; (h)
pesticides (except for chlorinated cyanuric acids or its salts, 1, 4
dichlorobenzene, 1, 4 nitrophenol); (i) seed and fertilizer; (j) lawn &
garden products; (k) blasting products; (l) animal/plant farms; (m)
construction of sulfuric acid plants/catalysts; (n) Monsanto Enviro-Chem
Systems, Inc.; (o) ▇▇▇▇▇▇▇ Construction Company; (p) controls or control
valves (e.g., ▇▇▇▇▇▇ Controls); (q) electron beam accelerator; (r)
radiation service/products; (s) gas products (e.g., ▇▇▇▇▇▇▇▇); (t) hollow
fibers (e.g., Permea); (u) the Dayton, Ohio plant site; (v) Pristine and
▇▇▇▇▇▇▇▇▇▇▇ offsites; (w) Research Triangle Park site; (x) oil and gas
production and exploration; (y) petroleum refining and retailing; (z)
Monsanto Research Corporation (e.g., Mound Labs); (aa) Hub Property -
Nitro; (bb)
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▇▇▇▇▇▇ ▇▇▇▇▇▇; (cc) metalized fabrics; (dd) DDT; (ee) Phosphorus (P4); and
(ff) those sites and businesses listed on Schedule 1.01(36)(b).
37. GOVERNMENTAL AUTHORITY: any federal, state, local, foreign or
international court, government, department, commission, board, bureau,
agency, the NYSE or other regulatory, administrative or governmental
authority.
38. GROUP: the Monsanto Group or the Chemicals Group as the context
requires.
39. INDEMNIFIABLE LOSSES: all Losses which are subject to being
indemnified by Monsanto or Chemicals pursuant to Article IV.
40. INDEMNIFYING PARTY: a Person who or which is obligated under this
Agreement to provide indemnification.
41. INDEMNITEE: a Person who may seek indemnification under this
Agreement.
42. INDEMNITY PAYMENT: an amount that an Indemnifying Party is
required to pay to an Indemnitee pursuant to Article IV.
43. INFORMATION: all records, books, contracts, instruments, computer
data and other data and information.
44. INSURANCE ADMINISTRATION: with respect to each Insurance Policy,
(1) the accounting for retrospectively-rated premiums, defense costs,
indemnity payments, deductibles and retentions as appropriate under the
terms and conditions of each of the Insurance Policies, (2) the reporting
to excess insurance carriers of any losses or claims which may cause the
per-occurrence or aggregate limits of any Insurance Policy to be exceeded
and (3) the distribution of Insurance Proceeds as contemplated by this
Agreement.
45. INSURANCE POLICY: insurance policies and insurance contracts of
any kind that are owned or maintained by, or provide a benefit in favor of,
any member of either Group or any of its predecessors as the insured
interest, including without limitation, primary and excess policies;
comprehensive general liability policies; automobile insurance policies;
aviation and aircraft insurance policies; worker's compensation insurance
policies (including without limitation, occupational disease); property,
casualty and business interruption insurance policies; directors and
officers liability insurance policies; fiduciary insurance policies;
fidelity insurance policies; self-insurance and captive insurance company
arrangements, together with the rights, benefits and privileges thereunder;
and any insurance policy for directors and officers liability which has
been purchased to provide occurrence coverage for both continuing and
former directors, officers and employees for claims arising from or
relating to events, occurrences or other matters prior to or on the
Distribution Date. The term "Insurance Policy" expressly includes any
insurance policies or insurance contracts issued by Monsure Ltd. or Mongard
Ltd.
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46. INSURANCE PROCEEDS: those monies received by or on behalf of an
insured from an insurance carrier or paid by an insurance carrier on behalf
of the insured.
47. INSURED CLAIMS: those Liabilities and Losses that, individually
or in the aggregate, are covered within the terms and conditions of any of
the Insurance Policies, whether or not subject to deductibles, coinsurance,
uncollectibility or retrospectively-rated premium adjustments, but only to
the extent that such rights or Liabilities are within applicable Insurance
Policy limits, including aggregates.
48. IRB: the arrangements relating to or arising out of any one or
more of the following to the extent that it relates to a Chemicals Asset:
(i) Anniston, Ala. PCRBs, Series 1992; (ii) Anniston SWDA, SWRRRBs, Series
1992; (iii) Caribou County PCRBs, Series 1990; (iv) Caribou County PCRBs,
Series 1994A; (v) Caribou County PCRBs, Series 1994B; (vi) Southwest III
Devel. Auth. Series 1991 (callable 7/15/2004); (vii) Brazos River PCRBs,
Series 1990; (viii) Brazos River PCRBs, Series 1988; (ix) Brazos River
PCRBs, Series 1994; (x) Decatur IRBs, Series 1996; (xi) Decatur PCRBs,
Series 1990; (xii) Decatur PCRBs, Series 1992 Var.; (xiii) Decatur PCRBs,
Series 1994 Var.; (xiv) Escambia County Var. Rate Bonds 1993; (xv) Escambia
County Var. Rate Bonds 1994; (xvi) Gloucester County PCRBs, Series 1992
Var.; (xvii) Greenville IDRBs, Series 1990 (callable 10/01/2000); (xviii)
Missouri PCRBs, Series 1988; (xix) Missouri PCRBs, Var. Rate Series 1993;
(xx) Sauget PCRBs, Series 1996; (xxi) Sauget PCRBs, Series 1992; (xxii)
Sauget PCRBs, Series 1993; (xxiii) Springfield Adj. Rate PCRBs, Sers. 1984
(callable 11/01/1999); (xxiv) Southwest III Devel. Auth. Series 1989.
49. INTELLECTUAL PROPERTY AGREEMENTS: the Intellectual Property
Transfer Agreement, substantially in the form attached hereto as Exhibit
1.01(49), together with various agreements attached thereto as exhibits,
with such changes as may be mutually agreed, which have been or will be
entered into on or prior to the Distribution Date between Monsanto and
Chemicals or members of their respective Groups with respect to transfer
and licensing of intellectual property.
50. IRS: the Internal Revenue Service.
51. JOINT OWNERSHIP PROPERTIES: the properties listed on Schedule
1.01(51).
52. LEASE AGREEMENTS: the lease agreements which have been or will be
entered into on or prior to the Distribution Date between Monsanto and
Chemicals, or the appropriate members of the Monsanto Group and the
Chemicals Group, substantially in the form attached hereto as Exhibit
1.01(52) with respect to the facilities listed on Schedules 1.01(52).
53. LIABILITIES: all debts, liabilities and obligations, whether
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, and whether or
not the same would properly be reflected on a balance sheet, including all
costs and expenses relating thereto.
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54. LITIGATION MATTERS: as defined in Section 6.06(a) hereof.
55. LOSSES: all losses, liabilities, damages, claims, demands,
judgments or settlements of any nature or kind, known or unknown, fixed,
accrued, absolute or contingent, liquidated or unliquidated, including all
reasonable costs and expenses (legal, accounting or otherwise as such costs
are incurred) relating thereto, suffered by an Indemnitee.
56. MONSANTO: as defined in the preamble to this Agreement.
57. MONSANTO ASSETS: all of the Assets other than the Chemicals
Assets held on the Distribution Date by any member of either Group,
including the Excluded Chemicals Assets.
58. MONSANTO BUSINESS: all of the businesses, other than the
Chemicals Business, the Former Chemicals Business or the P4 Business,
conducted on or prior to the Distribution Date by any member of either
Group.
59. MONSANTO CERTIFICATE AMENDMENTS: the amendments to Monsanto's
Certificate of Incorporation proposed by the Board of Directors of Monsanto
for consideration at the Special Meeting.
60. MONSANTO COMMON STOCK: the common stock, par value $2.00 per
share, of Monsanto.
61. MONSANTO DIRECTOR: any individual who is a member of the Board of
Directors of Monsanto following the Distribution Date.
62. MONSANTO FACILITIES: facilities which are Monsanto Assets.
63. MONSANTO GROUP: Monsanto and its Subsidiaries of which Monsanto
directly owns 100% of the stock or other equity interest entitled to vote
on the election of members to the board of directors or similar governing
body, other than members of the Chemicals Group.
64. MONSANTO LIABILITIES: except as expressly provided in the Other
Agreements, all of the Liabilities, other than the Chemicals Liabilities,
of any member of the Monsanto Group whether incurred or arising prior to or
after the Distribution Date, including the Excluded Chemicals Liabilities.
65. NOTICES: as defined in Section 10.05 hereof.
66. NYSE: the New York Stock Exchange, Inc.
67. OFFER OF SETTLEMENT: as defined in Section 7.02(c) hereof.
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68. OFFEREE: as defined in Section 7.02(c) hereof.
69. OFFEROR: as defined in Section 7.02(c) hereof.
70. OPERATING AGREEMENTS: the operating agreements which have been or
will be entered into on or prior to the Distribution Date between members
of the Monsanto Group and members of the Chemicals Group, substantially in
the form attached hereto as Exhibit 1.01(70), with such changes as may be
mutually satisfactory, whereby one party will operate a facility listed on
Schedule 1.01(70) for the benefit of the other.
71. OTHER AGREEMENTS: all Transition Services Agreements, the
Employee Benefits Allocation Agreement, all Business Transfer Agreements,
the Tax Sharing Agreement, the Intellectual Property Agreements, the Lease
Agreements, the Raw Material Supply Agreements, the Plan and Agreement of
Reorganization, the Operating Agreements and the P4 Joint Venture
Agreement.
72. P4 BUSINESS: the mining of phosphorus rock and processing it into
elemental phosphorous together with related activities, including but not
limited to the coking operations at Rock Springs, Wyoming.
73. P4 JOINT VENTURE: the limited liability company created pursuant
to the P4 Joint Venture Agreement.
74. P4 JOINT VENTURE AGREEMENT: the joint venture agreements and
other related agreements which have been or will be entered into on or
prior to the Distribution Date among any of Monsanto, Chemicals and the P4
Joint Venture with respect to the Joint Ownership Properties and the P4
Business, substantially in the forms attached hereto as Exhibits
1.01(74)(a) through 1.01(74)(g), with such changes as may be satisfactory
to Monsanto and Chemicals.
75. PERSON: an individual, a partnership, a joint venture, a
corporation, a trust, a limited liability company, an unincorporated
organization or a government or any department or agency thereof.
76. PLAN: as defined in the Employee Benefits Allocation Agreement.
77. PLAN AND AGREEMENT OF REORGANIZATION: the Plan and Agreement of
Reorganization adopted by Monsanto.
78. PRIME RATE: the rate which Citibank N.A. (or any successor
thereto or other major money center commercial bank agreed to by the
parties hereto) announces from time to time as its prime lending rate, as
in effect from time to time.
79. PRIVILEGED INFORMATION: as defined in Section 6.06(a) hereof.
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80. PROXY STATEMENT: the Proxy Statement dated July 14, 1997 sent to
the holders of shares of Monsanto Common Stock in connection with the
Special Meeting.
81. RAW MATERIAL SUPPLY AGREEMENTS: the agreements which have been or
will be entered into on or prior to the Distribution Date between Monsanto
and Chemicals, substantially in the forms attached hereto as Exhibit
1.01(81)(a) through 1.01(81)(f), with such changes as may be mutually
satisfactory, in each case providing for the supply of raw materials to
members of the Monsanto Group by members of the Chemicals Group, or to
members of the Chemicals Group by members of the Monsanto Group.
82. RECORD DATE: the date determined by the Board of Directors of
Monsanto, or such committee of the Board as shall be designated by the
Board of Directors, as the record date for determining stockholders of
Monsanto entitled to receive the Distribution.
83. REGISTRATION STATEMENT: the registration statement on Form 10 to
effect the registration of the Chemicals Common Stock pursuant to the
Exchange Act.
84. REPRESENTATIVE: with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants,
attorneys and representatives.
85. SEC: the Securities and Exchange Commission.
86. SECURITIES ACT: the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
87. SECURITY INTEREST: means any mortgage, security interest, pledge,
lien, charge, claim, option, right to acquire, voting or other restriction,
right-of-way, covenant, condition, easement, encroachment, restriction on
transfer, or other encumbrance of any nature whatsoever.
88. SERVICE AGREEMENT: any third party administrator or claims
handling agreement of any kind or nature to which any member of either
Group is directly or indirectly a party, in effect as of the date hereof,
related to the handling of Chemicals Claims.
89. SPECIAL MEETING: the special meeting of stockholders of Monsanto
to consider the Distribution and any other matters set forth by the Board
of Directors of Monsanto in the notice of the Special Meeting.
90. SPECIAL MEETING DATE: the date determined by the Board of
Directors of Monsanto, or by such committee of the Board as designated by
the Board of Directors, for the Special Meeting.
91. SPECIAL MEETING RECORD DATE: the record date determined by the
Board of Directors of Monsanto, or by such committee of the Board as
designated by the Board of
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Directors, as the record date for determining stockholders of Monsanto
entitled to vote at the Special Meeting.
92. SUBSIDIARY: with respect to any specified Person, any corporation
or other legal entity of which such Person or any of its Subsidiaries
controls or owns, directly or indirectly, more than 50% of the stock or
other equity interest entitled to vote on the election of members to the
board of directors or similar governing body; PROVIDED, HOWEVER, that for
purposes of this Agreement, (1) the Chemicals Subsidiaries shall be deemed
to be Subsidiaries of Chemicals and (2) Chemicals and the Chemicals
Subsidiaries shall not be deemed to be Subsidiaries of Monsanto or any of
Monsanto's Subsidiaries.
93. TAX: as defined in the Tax Sharing Agreement.
94. TAX SHARING AGREEMENT: the tax sharing and indemnification
agreement which has been or will be entered into on or prior to the
Distribution Date between Monsanto and Chemicals substantially in the form
attached hereto as Exhibit 1.01(94), with such changes as may be mutually
satisfactory to Monsanto and Chemicals.
95. THIRD PARTY: a Person who is not a party hereto or a wholly-owned
Subsidiary thereof.
96. THIRD PARTY CLAIM: any claim, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental or
other regulatory or administrative agency or commission or any arbitration
tribunal asserted by a Third Party.
97. TRANSITION SERVICES AGREEMENT: the transition services agreements
which have been or will be entered into on or prior to the Distribution
Date between the Monsanto Group and the Chemicals Group, substantially in
the form attached hereto as Exhibit 1.01(97), with such changes as may be
mutually satisfactory, providing for (1) the Monsanto Group to make
available certain personnel and services to the Chemicals Group and (2) the
Chemicals Group to make available certain personnel and services to the
Monsanto Group, in each case for a period of up to 18 months following the
Distribution Date.
1.02 REFERENCES TO TIME. All references in this Agreement to times of
the day shall be to St. Louis time, except as otherwise specifically provided
herein.
ARTICLE II
CERTAIN TRANSACTIONS PRIOR TO THE DISTRIBUTION DATE
2.01 SHARE PURCHASE RIGHTS PLAN; CERTIFICATE OF INCORPORATION; BYLAWS.
Prior to the Distribution Date, Chemicals shall adopt the Chemicals Rights Plan.
Monsanto and Chemicals shall take all action necessary so that, at the
Distribution Date, the Restated Certificate
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of Incorporation and Bylaws of Chemicals shall be in the forms attached hereto
as Exhibits 2.01(a) and 2.01(b), respectively.
2.02 ISSUANCE OF STOCK. Prior to or as of the Distribution Date, the
parties hereto shall take all steps necessary to reclassify the outstanding
shares of Chemicals Common Stock so that, except as otherwise contemplated by
this Agreement, immediately prior to or as of the Distribution Date the number
of shares of Chemicals Common Stock outstanding and held by Monsanto shall equal
the number of shares of Monsanto Common Stock outstanding on the Record Date
divided by five (rounded to the next highest whole share).
2.03 TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES. On or prior to
the Distribution Date, the parties hereto shall and shall cause their respective
wholly-owned Subsidiaries (1) to execute instruments of assignment and transfer
and to take such other corporate action as is necessary to transfer to Chemicals
and its wholly-owned Subsidiaries all of the right, title and interest of the
Monsanto Group in the Chemicals Assets; (2) to execute instruments of assignment
and transfer and to take such other corporate action as is necessary to transfer
to Chemicals a 40% ownership interest in the P4 Joint Venture subject to the
terms and conditions set forth in the P4 Joint Venture Agreement; and (3) to
take all action necessary to cause Chemicals or its wholly-owned Subsidiaries to
assume all of the Chemicals Liabilities. A global assignment and assumption
agreement along with Business Transfer Agreements for transfers of Chemicals
Assets and assumption of Chemicals Liabilities will be executed on or prior to
the Distribution Date; provided, however, that in the event of a conflict
between such agreements and this Agreement, this Agreement will control; and
provided further that the transfer of the operating Assets of the Chemicals
Business shall be substantially completed prior to the Special Meeting.
2.04 FINANCING ARRANGEMENTS. Each of the parties hereto agrees that it
will use reasonable efforts to arrange the Financing Facility and Chemicals
agrees that it will assume the obligations with respect to the commercial paper
issued thereunder on the Distribution Date with Monsanto becoming a guarantor of
the commercial paper obligations thereunder outstanding on the Distribution Date
but otherwise having no further liability. Each of the parties hereto agrees
that it will use reasonable efforts to obtain, prior to the Distribution Date,
all necessary consents, waivers or amendments to each bank credit agreement,
debt security or other financing facility to which it or any of its Subsidiaries
is a party or by which it or any of its Subsidiaries is bound, or to refinance
such agreement, security or facility, in each case on terms satisfactory to
Monsanto and Chemicals and to the extent necessary to permit the Distribution to
be consummated without any material breach of the terms of such agreement,
security or facility.
2.05 REGISTRATION AND LISTING. Prior to the Distribution Date:
1. Monsanto and Chemicals shall prepare the Proxy Statement and the
Registration Statement. Chemicals shall file the Registration Statement
with the SEC. Monsanto shall file the Proxy Statement with the SEC and
shall mail the Proxy Statement to the holders of Monsanto Common Stock as
of the Special Meeting Record Date. Monsanto and Chemicals shall use
reasonable efforts to cause the Registration Statement to become effective
under the Exchange Act as promptly as reasonably practicable.
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2. The parties hereto shall use their reasonable efforts to take all
such action as may be necessary or appropriate under state securities and
Blue Sky laws in connection with the transactions contemplated by this
Agreement.
3. Monsanto and Chemicals shall prepare, and Chemicals shall file and
seek to make effective, an application for the listing of the Chemicals
Common Stock on the NYSE, subject to official notice of issuance.
4. The parties hereto shall cooperate in preparing and filing with the
SEC the Proxy Statement and the Registration Statement, and causing to
become effective the Registration Statement and any other registration
statements or any amendments to any thereof which are necessary or
appropriate in order to effect the transactions contemplated hereby or to
reflect the establishment of, or amendments to, any Plans contemplated in
the Employee Benefits Allocation Agreement.
5. The parties hereto shall prepare and mail to the holders of
Monsanto Common Stock such other information or documentation as the
parties shall reasonably determine and as may be required by law. Monsanto
and Chemicals shall prepare, and Monsanto or Chemicals shall, as
applicable, file such documents, and any forms, schedules, or registration
statements and any no action letter requests which are required by
applicable law or which Monsanto determines are necessary or desirable to
effectuate the Distribution, and Monsanto and Chemicals shall each use its
reasonable efforts to obtain all necessary approvals from the SEC with
respect thereto as soon as practicable.
2.06 SPECIAL MEETING. The Board of Directors of Monsanto, or such
committee of the Board as shall be designated and so authorized by the Board of
Directors of Monsanto, shall establish the Special Meeting Record Date and the
Special Meeting Date, and shall take whatever other action such Board of
Directors or such designated committee of the Board deems necessary or
convenient with respect to the Special Meeting.
2.07 AMENDMENT OF MONSANTO CERTIFICATE OF INCORPORATION. At the
Special Meeting, there will be submitted to the Monsanto stockholders for their
vote the Monsanto Certificate Amendments as well as the Distribution.
ARTICLE III
THE DISTRIBUTION
3.01 RECORD DATE AND DISTRIBUTION DATE. Subject to the satisfaction or
waiver of the conditions set forth in Section 10.01(a), the Board of Directors
of Monsanto, or such committee of the Board as shall be authorized and
designated by the Board of Directors, shall establish the Record Date and the
Distribution Date and any appropriate procedures in connection with the
Distribution.
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3.02 THE AGENT. Prior to the Distribution Date, Monsanto shall enter
into an agreement with the Agent providing for, among other things, the payment
of the Distribution to the holders of Monsanto Common Stock in accordance with
this Article III.
3.03 DELIVERY OF SHARE CERTIFICATES TO THE AGENT. Prior to or as of
the Distribution Date, Monsanto shall deliver to the Agent a share certificate
representing all of the outstanding shares of Chemicals Common Stock to be
distributed in connection with the payment of the Distribution. After the
Distribution Date, upon the request of the Agent, Chemicals shall provide all
certificates for shares of Chemicals Common Stock or other evidence of ownership
that the Agent shall require in order to effect the Distribution.
3.04 DISTRIBUTION. Except as otherwise contemplated by this Agreement,
Monsanto shall instruct the Agent to distribute, as of the Distribution Date,
one share of Chemicals Common Stock in respect of every five (5) shares of
Monsanto Common Stock held by holders of record of Monsanto Common Stock on the
Record Date. All shares of Chemicals Common Stock issued in the Distribution
shall be duly authorized, validly issued, fully paid and nonassessable and the
holders thereof will not be entitled to preemptive rights. As soon as
practicable after the Distribution Date certificates for shares of Chemicals
Common Stock will be mailed by the Agent to such holders of record as of the
Record Date unless Chemicals uses a book entry system of stock record keeping in
which event no certificates for shares of Chemicals Common Stock will be issued
unless the stockholder so requests.
3.05 FRACTIONAL SHARES. No certificates or scrip representing
fractional interests in a share of Chemicals Common Stock will be issued.
Instead, if Chemicals does not adopt a book entry system, or if Chemicals does
adopt a book entry system but a stockholder requests a physical stock
certificate, the Agent, will, as soon as practicable after the Distribution
Date, (a) determine the number of whole shares and fractional shares of
Chemicals Common Stock allocable to each holder of record of Monsanto Common
Stock as of the Record Date, (b) aggregate all such fractional shares, and (c)
sell the whole shares attributable to the aggregate of the fractional shares at
the direction of the Agent, in open market transactions or otherwise, in each
case at then prevailing trading prices, and to cause to be distributed to each
such holder, in lieu of any fractional share, such holder's ratable share of the
proceeds of such sale, after making appropriate deductions of the amount
required, if any, to be withheld for United States federal income tax purposes.
ARTICLE IV
SURVIVAL, ASSUMPTION AND INDEMNIFICATION
4.01 SURVIVAL OF AGREEMENTS. All covenants and agreements of the
parties hereto contained in this Agreement and all covenants and agreements of
the parties hereto and their respective wholly-owned Subsidiaries contained in
the Other Agreements shall survive the Distribution Date in accordance with
their respective terms and shall not be merged into any deeds or other transfer
or closing instruments or documents.
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4.02 TAXES. This Article IV shall not be applicable to any
Indemnifiable Losses or Liabilities related to (1) Taxes which shall be governed
by the Tax Sharing Agreement; or (2) which are otherwise expressly provided for
in those Other Agreements (excluding the Business Transfer Agreements).
4.03 ASSUMPTION AND INDEMNIFICATION.
(a) (i) Subject to Sections 4.02 and 4.03(c) and except as expressly
provided in the Other Agreements, from and after the Distribution Date, Monsanto
shall retain or assume, as the case may be, and shall indemnify, defend and hold
harmless each member of the Chemicals Group, and each of their Representatives
and Affiliates, from and against, (1) all Monsanto Liabilities and (2) all
Losses of any such member of the Chemicals Group, Representative or Affiliate
relating to, arising out of or due to the failure to pay, perform or discharge
in due course the Monsanto Liabilities by any member of the Monsanto Group who
has an obligation with respect thereto. Chemicals will use reasonable efforts
not to take and to cause its wholly-owned Subsidiaries not to take any action
outside the ordinary course of business after the Distribution Date which may
reasonably be expected to have the effect of increasing Monsanto's or its
wholly-owned Subsidiaries' Losses with respect to Monsanto Liabilities or the
indemnification provided hereunder, and Chemicals will use reasonable efforts to
take and to cause its wholly-owned Subsidiaries to take, at Monsanto's expense,
such reasonable action as Monsanto or its wholly-owned Subsidiaries may request
to mitigate all such Losses as may be incurred with respect to Monsanto
Liabilities for which Monsanto has agreed to indemnify Chemicals and provided
such actions do not unreasonably interfere with the conduct of Chemicals'
business.
(ii) (A) The Chemicals SpinCo combined financial statements contained
on pages F-1 through F-26 of the Proxy Statement (the "Chemicals Proxy
Financial Statements") are fairly stated in all material respects as of the
dates indicated therein and for the periods then ended and were prepared in
accordance with GAAP consistently applied except as noted therein.
(B) The Statement of Consolidated Income for Monsanto for the
three months and six months ended June 30, 1997, and the Statement of
Consolidated Financial Position as of June 30, 1997, included in the
Company's Quarterly Report on Form 10-Q, insofar as they relate to
Chemicals' assets, liabilities and results of operations, prepared on a
basis consistent with the first paragraph of the Basis of Presentation --
Combined Financial Statements footnote on page F-6 of the Proxy Statement
(the "Chemicals June 1997 Combined Financial Statements"), are fairly
stated in all material respects, except for the effect of certain interim
adjustments related to Chemicals required by Accounting Principles Board
Opinion No. 28 and agreed to by the Chemicals' independent auditor, as of
the dates indicated therein and for the periods then ended and were
prepared in accordance with GAAP consistently applied except as noted
therein.
(C) Management of Chemicals is not aware, except as noted in
paragraph 4.03(a)(ii) (B) above, as of the date hereof, of any fact or
circumstance that, had it existed prior to the preparation of the Chemicals
Proxy Financial Statements and the Chemicals
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June 1997 Combined Financial Statements, would have had a material adverse
effect on the results of operations or the financial position set forth in
such financial statements.
(iii) Due to the difficulty in ascertaining the precise amount of
actual damages which Monsanto would sustain as a result of Chemicals'
representations set forth in paragraph 4.03(a)(ii) above being untrue, the
parties hereby agree and stipulate that liquidated damages are appropriate.
The amount of liquidated damages shall be equal to $20,000,000, and the
parties agree that such sum is reasonable in light of the circumstances and
the nature of the damages that would accrue to Monsanto.
(b) Subject to Section 4.02 and 4.03(c) and except as expressly
provided in the Other Agreements, from and after the Distribution Date,
Chemicals shall retain or assume, as the case may be, and shall indemnify,
defend and hold harmless each member of the Monsanto Group, and each of their
Representatives and Affiliates, from and against, (1) all Chemicals Liabilities,
including without limitation, the indebtedness under the Financing Facility, and
(2) any and all Losses of any such member of the Monsanto Group, Representative
or Affiliate relating to, arising out of or due to the failure to pay, perform
or discharge in due course the Chemicals Liabilities by any member of the
Chemicals Group who has an obligation with respect thereto. Monsanto will use
reasonable efforts not to take and to cause its wholly-owned Subsidiaries not to
take any action outside the ordinary course of business after the Distribution
Date which may reasonably be expected to have the effect of increasing
Chemicals' or its wholly-owned Subsidiaries' Losses with respect to Chemicals
Liabilities or the indemnification provided hereunder and Monsanto will use
reasonable efforts to take and will cause its wholly-owned Subsidiaries to take
at Chemicals' expense such reasonable action as Chemicals or its wholly-owned
Subsidiaries may reasonably request to mitigate all such Losses as may be
incurred with respect to Chemicals Liabilities for which Chemicals has agreed to
indemnify Monsanto and provided such actions do not unreasonably interfere with
the conduct of Monsanto's business.
(c) The amount which an Indemnifying Party is required to pay to any
Indemnitee pursuant to Section 4.03(a) or (b) shall be reduced (including,
without limitation, retroactively) by any Insurance Proceeds and other amounts
(including, without limitation, amounts received from Third Parties in respect
of other indemnification or contribution obligations of Third Parties) actually
recovered by such Indemnitee in reduction of the related Indemnifiable Loss, it
being understood and agreed that each member of the Monsanto Group and the
Chemicals Group shall use its reasonable best efforts, at the expense of the
Indemnifying Party, to collect any such proceeds or other such amounts to which
it or any of its wholly-owned Subsidiaries is entitled, without regard to
whether it is the Indemnified Party hereunder. If an Indemnitee receives an
Indemnity Payment in respect of an Indemnifiable Loss and subsequently receives
Insurance Proceeds or other amounts in respect of such Indemnifiable Loss, then
such Indemnitee shall pay to such Indemnifying Party an amount equal to the
difference between (1) the sum of the amount of such Indemnity Payment and the
amount of such Insurance Proceeds or other amounts actually received and (2) the
amount of such Indemnifiable Loss. An insurer or a Third Party (including,
without limitation, purchasers under any assets purchase agreements, real estate
agreements or any other agreements relating to Chemicals Liabilities or Monsanto
Liabilities, including without limitation, those agreements set forth on
Schedule 4.03(c), who would otherwise be obligated to pay any claim shall not be
relieved of the responsibility with respect thereto, or, solely by virtue of
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the indemnification provisions hereof, have any subrogation rights with respect
thereto, it being expressly understood and agreed that no insurer or any other
Third Party shall be entitled to a "windfall" (i.e., a benefit they would not be
entitled to receive in the absence of the indemnification provisions set forth
herein) by virtue of the indemnification provisions hereof.
(d) If any Indemnity Payment required to be made hereunder or under
any Other Agreement is denominated in a currency other than United States
dollars, the amount of such payment, at the election of the Indemnifying Party,
may be reimbursed in local currency or shall be translated into United States
dollars using the Foreign Exchange Rate for such currency determined in
accordance with the following rules:
(1) with respect to an Indemnifiable Loss arising from payment by
a financial institution under a guarantee, comfort letter, letter of
credit, foreign exchange contract or similar instrument, the Foreign
Exchange Rate for such currency shall be determined as of the date on
which such financial institution is reimbursed;
(2) with respect to an Indemnifiable Loss covered by insurance,
the Foreign Exchange Rate for such currency shall be the Foreign
Exchange Rate employed by the insurance company providing such
insurance in settling such Indemnifiable Loss with the Indemnifying
Party; and
(3) with respect to an Indemnifiable Loss not described in clause
(1) or (2) of this Section 4.03(d), the Foreign Exchange Rate for such
currency shall be determined as of the date of payment to a Third
Party in the case of such payments or as of the date that notice of
the claim with respect to such other Indemnifiable Loss is given to
the Indemnitee.
(e) On the Distribution Date Chemicals shall assume (or shall cause
one of its wholly-owned Subsidiaries to assume) (i) the prosecution of all
claims which are Chemicals Assets and are pending on the Distribution Date; and
(ii) the defense against all Third Party Claims which are Chemicals Liabilities
and are pending on the Distribution Date. Monsanto shall use reasonable efforts
to make available and shall cause its wholly-owned Subsidiaries to use
reasonable efforts to make available to Chemicals and its wholly-owned
Subsidiaries, at Chemicals' expense, (i) any personnel or any books, records or
other documents within its control or which it otherwise has the ability to make
available that Chemicals or such Subsidiary reasonably believes are necessary or
appropriate for such prosecution or defense as provided in Article VI; and (ii)
such other assistance in support of the prosecution or defense of such
litigation as Chemicals or its wholly-owned Subsidiaries may reasonably request,
including without limitation, the right to assert in the name of Monsanto or any
of its wholly-owned Subsidiaries such rights, claims, counterclaims or defenses
that Monsanto or Monsanto's Subsidiary would be or would have been entitled to
assert in such litigation or in the prosecution of or defense against such claim
had the Distribution not occurred; PROVIDED, HOWEVER, that no member of the
Monsanto Group shall be required to take any action, refrain from taking any
action or make available any assistance if doing so would have the effect of
increasing Liabilities of the Monsanto Group. Monsanto will execute and will
cause its wholly-owned Subsidiaries to execute a power of attorney in the form
attached hereto as Exhibit 4.03(e).
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4.04 PROCEDURE FOR INDEMNIFICATION.
(a) If any Indemnitee receives notice of the assertion of any Third
Party Claim with respect to which an Indemnifying Party is obligated under this
Agreement to provide indemnification, such Indemnitee shall give such
Indemnifying Party notice thereof promptly after becoming aware of such Third
Party Claim; PROVIDED, HOWEVER, that the failure of any Indemnitee to give
notice as provided in this Section 4.04 shall not relieve any Indemnifying Party
of its obligations under this Article IV, except to the extent that such
Indemnifying Party is actually prejudiced by such failure to give notice. Such
notice shall describe such Third Party Claim in reasonable detail and, if
practicable, shall indicate the estimated amount of the Indemnifiable Loss that
has been or may be sustained by such Indemnitee.
(b) An Indemnifying Party, at such Indemnifying Party's own expense
and through counsel chosen by such Indemnifying Party (which counsel shall be
reasonably satisfactory to the Indemnitee), may elect to defend any Third Party
Claim. If an Indemnifying Party elects to defend a Third Party Claim, then,
within fifteen Business Days after receiving notice of such Third Party Claim or
sooner (but in no event less than five Business Days) if the nature of such
Third Party Claim so requires), such Indemnifying Party shall notify the
Indemnitee of its intent to do so. Such Indemnitee shall thereupon use
reasonable efforts to make available to such Indemnifying Party, at such
Indemnifying Party's expense, such assistance in support of the prosecution or
defense of such litigation as the Indemnifying Party may reasonably request,
including without limitation, the right to assert in the name of the Indemnitee
such rights, claims, counterclaims or defenses that such Indemnitee would be or
would have been permitted to assert in such litigation or in the prosecution of
a claim or counterclaim against a Third Party or in defense against such Third
Party Claim had the Distribution not occurred. The Indemnitee will execute a
power of attorney in favor of the Indemnifying Party with respect to such Third
Party Claims in substantially the form attached hereto as Exhibit 4.03(e). Such
Indemnifying Party shall pay such Indemnitee's reasonable out-of-pocket expenses
incurred in connection with such cooperation consistent with the provisions of
Article VI. Except as provided herein, after notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof. If an Indemnifying Party
elects not to defend against a Third Party Claim, or fails to notify an
Indemnitee of its election as provided in this Section 4.04 within the period of
fifteen (or five, if applicable) Business Days described above, such Indemnitee
may defend, compromise and settle such Third Party Claim; PROVIDED, HOWEVER,
that no such Indemnitee may compromise or settle any such Third Party Claim
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld or delayed.
(c) Notwithstanding the foregoing, the Indemnifying Party shall not,
without the prior written consent of the Indemnitee, settle or compromise any
Third Party Claim or consent to the entry of any judgment which does not include
as an unconditional term thereof the delivery by the claimant or plaintiff to
the Indemnitee of a written release from all Liability in respect of such Third
Party Claim.
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(d) If an Indemnifying Party chooses to defend or to seek to
compromise any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense.
(e) Any claim on account of an Indemnifiable Loss arising out of or
due to the failure to pay, perform or discharge in due course its respective
Liabilities by any member of the Indemnifying Party's Group who has an
obligation with respect thereto but which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30-day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30-day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under Article VII of this Agreement.
(f) If the amount of any Indemnifiable Loss shall, at any time
subsequent to the payment required by this Agreement, be reduced by recovery,
settlement or otherwise, the amount of such reduction, less any expenses
incurred in connection therewith, shall promptly be repaid by the Indemnitee to
the Indemnifying Party.
(g) In the event of payment by an Indemnifying Party to any Indemnitee
in connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim. Such Indemnitee shall cooperate with such Indemnifying
Party in a reasonable manner, and at the cost and expense of such Indemnifying
Party, in prosecuting any subrogated right or claim, including without
limitation, permitting the Indemnifying Party to bring suit against such Third
Party in the name of the Indemnitee.
ARTICLE V
CERTAIN ADDITIONAL COVENANTS
5.01 FURTHER ASSURANCES.
(a) In addition to the actions specifically provided for elsewhere in
this Agreement and unless otherwise expressly provided in this Agreement or an
Other Agreement, each of the parties hereto shall use its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable laws,
regulations and agreements to consummate and make effective the transactions
contemplated by this Agreement, to confirm Chemicals' title to all Chemicals
Assets and assumption of all Chemical Liabilities, to put Chemicals in actual
possession and operating control of Chemicals Assets and Chemicals Liabilities,
and to permit Chemicals to exercise all rights and to perform its obligations
with respect to Chemicals Assets and Chemicals Liabilities; PROVIDED, that
nothing herein shall be
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deemed to require the transfer of any Assets or the assumption of any
Liabilities which by their terms or operation of law cannot be transferred or
assumed. Without limiting the foregoing, each party hereto shall cooperate with
the other party, and execute and deliver, or use its reasonable efforts to cause
to be executed and delivered, all instruments, including instruments of
conveyance, assignment and transfer, and to make all filings with, and to obtain
all consents, approvals or authorizations of, any governmental or regulatory
authority or any other Person under any permit, license, agreement, indenture or
other instrument, and take all such other actions as such party may reasonably
be requested to take by any other party hereto from time to time, consistent
with the terms of this Agreement, in order to effectuate the provisions and
purposes of this Agreement and the transfers of Assets and Liabilities and the
other transactions contemplated hereby. If any such transfer of Assets or
Liabilities, including but not limited to, assignments of contracts, is not
consummated prior to or at the Distribution Date for any reason, including but
not limited to, the absence of consents to assignment of contracts or approval
by Governmental Authorities for the transfer of permits, then the party hereto
retaining such Asset or Liability shall thereafter hold such Asset in trust for
the use and benefit of the party entitled thereto (at the expense of the party
entitled thereto), or shall retain such Liability for the account of the party
by whom such Liability is to be assumed pursuant hereto, as the case may be, and
shall take such other action as may be reasonably requested by the party to whom
such Asset is to be transferred, or by whom such Liability is to be assumed, as
the case may be, in order to place such party, insofar as reasonably possible,
in the same position as if such Asset or Liability had been transferred as
contemplated hereby. If and when any such Asset or Liability becomes
transferable, such transfer shall be effected forthwith. The parties hereto
agree that, as of the Distribution Date, as between the parties, Chemicals shall
be deemed to have acquired complete and sole beneficial ownership of all of the
Chemicals Assets, together with all rights, powers and privileges incident
thereto, and shall be deemed to have assumed in accordance with the terms of
this Agreement all of the Chemicals Liabilities, and all duties, obligations and
responsibilities incident thereto.
(b) Without limiting the generality of Section 5.01(a), Monsanto, as
the sole stockholder of Chemicals prior to the Distribution, shall ratify any
actions which are reasonably necessary or desirable to be taken by Chemicals to
effectuate the transactions contemplated by this Agreement or the Other
Agreements in a manner consistent with the terms of this Agreement or such Other
Agreements.
(c) In the event any registration, licenses, permits or other rights
granted by Governmental Authorities to the Monsanto Group must be transferred,
amended or issued in order to conduct operations of the Chemicals Business after
the Distribution Date, and such permit transfer, amendment or issuance has not
been accomplished as of such date, Monsanto shall permit Chemicals to use the
registration, license or permit of the Monsanto Group to continue to operate the
Chemicals Facilities until such transfer, amendment or issuance is accomplished,
at Chemicals' expense, if to so do would be permitted by and not violate the
terms of the registration, license or permit or any law, regulation, ordinance
or rule, until such permit is transferred or issued to Chemicals. Chemicals
shall use its reasonable efforts to obtain such registrations, licenses, permits
or other rights granted by Governmental Authorities as soon as reasonably
practicable. Chemicals shall indemnify and hold harmless Monsanto from and
against any and all Third Party Claims arising from or related to Chemicals' use
of the registration, license or permit or other rights granted to the Monsanto
Group by Governmental Authorities.
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(d) Schedule 1.01(11) to this Agreement includes among other items,
certain parcels of real estate which are Chemicals Assets but which, in some
cases, are subject to contracts for sale to Third Parties ("Sale Real Estate")
or which, in other cases, cannot be transferred without one party incurring a
substantial economic detriment which detriment could otherwise be deferred or
avoided ("Non-Sale Real Estate"). Monsanto and Chemicals agree that Monsanto
shall retain title to such Sale Real Estate and Non-Sale Real Estate following
the Distribution Date and shall not transfer to Chemicals the title or assign to
Chemicals the contract(s) for sale or any other permits, licenses or contracts
with respect to such real estate subject to the following terms and conditions:
(i) Monsanto from and after the Distribution Date will hold the Sale Real
Estate and the Non-Sale Real Estate in trust for the benefit of Chemicals;
(ii) Monsanto hereby irrevocably designates Chemicals as its
attorney-in-fact and agent for all purposes with respect to all such Sale Real
Estate and Non-Sale Real Estate, including without limitation, for all
remediation, monitoring and other activities, with respect to such Sale Real
Estate and Non-Sale Real Estate; for all filings, notices and any other
negotiations, activities or discussions with any Governmental Authority and/or
any branch, commission, board or other subdivision thereof; for all discussions,
negotiations or agreements with Third Parties with respect to, or arising from,
such Sale Real Estate and Non-Sale Real Estate; and for all purposes relating to
the execution, delivery and closing of contracts, agreements, documents or
instruments with respect the ownership, use, occupation, sale or lease of the
Sale Real Estate or Non-Sale Real Estate. In furtherance of such designation,
Monsanto will execute powers of attorney in the form attached hereto as Exhibit
5.01(d)(ii) for each site;
(iii) Monsanto will take no action without the prior written consent of
Chemicals which may have the effect of increasing Chemicals' liability with
respect to any Sale Real Estate or Non-Sale Real Estate; and will take such
action as is permitted by contract, in the absence of consent of the other
party, and by law to place Chemicals, insofar as reasonably possible, in the
same position as if such Sale Real Estate and Non-Sale Real Estate had been
transferred, or conveyed to Chemicals on the Distribution Date;
(iv) In the event any Sale Real Estate is not sold or conveyed to a Third
Party pursuant to a contract in existence on the Distribution Date or, at any
other time, upon the request of Chemicals with respect to any parcel of Sale
Real Estate or Non-Sale Real Estate, Monsanto shall transfer and convey title to
the affected parcel of real estate to Chemicals; and
(v) As between Monsanto and Chemicals, such Sale Real Estate and Non-Sale
Real Estate shall be treated as Chemicals Assets, and Liabilities related to or
arising from Sale Real Estate or Non-Sale Real Estate shall be Chemicals
Liabilities and subject to the indemnification provisions contained in Section
4.03(b) notwithstanding the fact that such Sale Real Estate or Non-Sale Real
Estate was not transferred to Chemicals.
(e) If Chemicals elects to pursue any claim or right relating to the
Chemicals Assets, the Chemicals Business or the Former Chemicals Business,
Monsanto, upon request and at Chemicals' expense, shall use reasonable efforts
to make available to Chemicals such assistance in support of
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the prosecution of such litigation as Chemicals may reasonably request,
including without limitation, the right to assert, as needed, in the name of
Monsanto or any member of the Monsanto Group such rights and claims that
Monsanto or such member would be or would have been permitted to assert in such
litigation had the Distribution not occurred; provided, however, that no member
of the Monsanto Group shall be required to take any action, refrain from taking
any action or make available any assistance if doing so would have the effect of
increasing Liabilities of the Monsanto Group. Monsanto or such member of the
Monsanto Group will execute a power of attorney in favor of Chemicals or such
member of the Chemicals Group in the form attached hereto as Exhibit 4.03(e).
5.02 CHEMICALS BOARD. Prior to, or simultaneously with, the
Distribution Date, Chemicals shall take such actions as are necessary such that
the Board of Directors of Chemicals is comprised of those individuals named as
directors of Chemicals in the Proxy Statement.
5.03 FINANCING. Effective as of the Distribution Date:
(a) The obligations under the assumable commercial paper portion of
the Financing Facility shall be assigned to, and assumed by, Chemicals, and
guaranteed by Monsanto, with the effect that Chemicals shall have the
primary obligation thereunder and Monsanto shall become the guarantor with
respect thereto;
(b) On the Distribution Date, Chemicals shall assume from Monsanto,
and indemnify Monsanto from, all Liabilities under the assumable commercial
paper portion of the Financing Facility and the Third Party indebtedness
specified on Schedule 5.03(b); and
(c) (i) Except as provided in Schedule 5.03(c)(i), (w) all
intercompany accounts receivables and payables between members of the
Groups in Europe and in South Africa, and all Third Party receivables and
payables owed to or by members of the Groups in Europe and in South Africa
that arose prior to June 1, 1997, will be treated in accordance with the
related Business Transfer Agreement, including without limitation, those
agreements on Intercompany Receivables and Payables and Bad Debts dated as
of September 1, 1997 between (1) Monsanto Chemicals Europe SA/NV and
Monsanto Europe SA/NV and (2) Monsanto p.l.c. and Monsanto Chemicals U.K.
Limited and certain other entities referred to collectively therein as
DSO's; (x) all intercompany accounts receivables and payables between
members of the Monsanto Group in Europe and in South Africa, and all Third
Party receivables and payables related to the Monsanto Business in Europe
and in South Africa that arose on or after June 1, 1997, will remain as
Monsanto Assets and Monsanto Liabilities; (y) all intercompany accounts
receivables and payables between members of the Chemicals Group in Europe
and in South Africa and all Third Party receivables and payables related to
the Chemicals Business in Europe and South Africa that arose on or after
June 1, 1997 shall remain as Chemicals Assets and Chemicals Liabilities;
and (z) any intercompany receivables and payables that arose after June 1,
1997 between members of the Monsanto Group in Europe and in South Africa
and members of the Chemicals Group in Europe and in South Africa shall
remain with each respective entity on whose books such receivable and
payable exists on the Distribution Date.
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(ii) All intercompany balances relating to products of the
Chemicals Business or Former Chemicals Business between the Monsanto Group
outside of Europe and South Africa and the Chemicals Group outside of
Europe and South Africa and all Third Party payables and receivables
related to the Chemicals Business, Former Chemicals Business or Chemicals
Assets will be transferred to the Chemicals Group as Chemicals Assets and
Chemicals Liabilities on the Distribution Date.
(iii) All intercompany loans or advances between a member of the
Chemicals Group and a member of the Monsanto Group shall remain with, or be
transferred to, the members of the Monsanto Group, it being the intent that
as of the Distribution Date neither Group shall have a continuing
obligation with respect to such loan or and advance to the other Group.
5.04 OTHER AGREEMENTS. Each of Monsanto and Chemicals shall use
reasonable efforts to enter into, or to cause the appropriate members of its
Group to enter into, the Other Agreements on or prior to the Distribution Date.
If there shall be a conflict or an inconsistency between the provisions of this
Agreement and the provisions of an Other Agreement (i) the provisions of this
Agreement shall control over the inconsistent provisions of a Business Transfer
Agreement as to matters within the scope of the Business Transfer Agreement; and
(ii) the provisions of the Other Agreement (other than any Business Transfer
Agreement) shall control over the inconsistent provisions of this Agreement as
to matters within the scope of such Other Agreement.
5.05 CHEMICALS SUPPORT AGREEMENTS. Effective as of the Distribution
Date, and unless otherwise agreed between Monsanto and Chemicals, Chemicals
shall use its reasonable best efforts to cause one or more members of the
Chemicals Group to be substituted in all respects for the Monsanto Group or any
member thereof in respect of all Chemicals Support Agreements. Subsequent to the
Distribution Date, with respect to any uncancelled Chemicals Support Agreement
for which no substitution has yet been effected, Chemicals shall indemnify the
Monsanto Group against any Liabilities under any such Chemicals Support
Agreement in accordance with the provisions of Article IV.
5.06 OFFICERS AND EMPLOYEES.
(a) Subject to the provisions of Section 5.06(b), officers and
employees of either Group who are employed in the Chemicals Business immediately
prior to the Distribution Date shall be officers and employees of the Chemicals
Group immediately following the Distribution Date; PROVIDED, HOWEVER, that
nothing herein shall give to any individual a right of employment, or continued
employment, by any member of the Chemicals Group.
(b) Except as otherwise agreed by the parties hereto, effective as of
the Distribution Date, (1) all officers or employees of the Monsanto Group who
are acting as directors or officers of the Chemicals Group and are not employed
in the Chemicals Business shall resign from such positions with the Chemicals
Group and (2) all officers or employees of the Chemicals Group who are acting as
directors or officers of the Monsanto Group and are not employed in the Monsanto
Business shall resign from such positions with the Monsanto Group.
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5.07 MONSANTO CITIZENSHIP FUND. Prior to the Distribution Date,
Chemicals will establish a political action committee consistent with the rules
of the Federal Election Commission for a separate segregated fund ("Chemicals
PAC") and the Monsanto Citizenship Fund will transfer to such Chemicals PAC
$16,951.00 plus any amounts held by the Monsanto Citizenship Fund for future
earmarking by Chemicals Employees which has been or may be agreed to.
5.08 RECEIVABLES COLLECTION AND OTHER PAYMENTS. If after the
Distribution Date, either party receives payments belonging to the other party,
the recipient shall promptly account for and remit same to the other party.
5.09 LIMITED LEASES, LICENSES AND BENEFITS OF CERTAIN ASSETS.
(a) With respect to sold or discontinued businesses for which
Chemicals has assumed a Chemicals Liability, Monsanto hereby grants a lease or
license, and shall cause its wholly-owned Subsidiaries to grant a lease or
license, to members of the Chemicals Group, without compensation and on a
non-exclusive basis, with respect to such Monsanto Assets (or the benefit of
such Monsanto Assets) relating to sold or discontinued businesses, including
without limitation, those rights under contracts, leases or licenses held on the
Distribution Date, in each case to the extent the use or benefit of such
Monsanto Assets is reasonably necessary to satisfy such Chemicals Liabilities
assumed by any member of the Chemicals Group pursuant to this Agreement or any
Other Agreement.
(b) With respect to a Former Chemicals Business for which Monsanto has
retained a Monsanto Liability, including without limitation, Monsanto
Liabilities under operating agreements with Third Parties, Chemicals hereby
grants a lease or license, and shall cause its wholly-owned Subsidiaries to
grant a lease or license, to members of the Monsanto Group, without compensation
and on a non-exclusive basis with respect to such Chemicals Assets (or the
benefit of such Chemicals Assets) relating to the Former Chemicals Business,
including without limitation, those rights under contracts, leases or licenses
held on the Distribution Date, in each case to the extent the use or benefit of
such Chemicals Assets is reasonably necessary to satisfy such Monsanto
Liabilities.
5.10 CHEMICALS' USE OF CHEMICALS ASSETS SUBJECT TO IRBS. Monsanto is
retaining as Monsanto Liabilities the IRBs and all obligations related to the
payment of principal and interest thereunder and is retaining as Monsanto Assets
all rights with respect to the IRBs except the right to the ownership or
occupancy of the property transferred to Chemicals as Chemicals Assets.
Chemicals, however, agrees that Chemicals shall comply with all of the covenants
and agreements set forth in the IRBs and any related agreements entered into in
connection with the IRBs that are applicable to the owner or operator of the
property or that affect the use of the property and shall not take any action
which, or fail to take any action the failure of which, could increase or
accelerate Monsanto's liabilities under the IRBs or adversely affect the
exclusion from gross income of interest on the IRBs. Chemicals shall not sell or
otherwise transfer any properties or assets relating to the IRBs unless the
transferee agrees to assume Chemicals' obligations under this Section 5.10
pursuant to an agreement reasonably satisfactory to Monsanto.
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Chemicals shall indemnify, defend and hold Monsanto harmless from any
Liabilities or Losses to the extent arising from its breach of its covenants in
this Section 5.10.
ARTICLE VI
ACCESS TO INFORMATION
6.01 PROVISION OF CORPORATE RECORDS. Prior to or as promptly as
practicable after the Distribution Date or from time to time as requested by the
Chemicals Group, the Monsanto Group shall deliver to the Chemicals Group: (i)
all corporate books and records of the Chemicals Group; (ii) originals or copies
of those corporate books and records of the Monsanto Group primarily relating to
the Chemicals Assets, the Chemicals Liabilities, the Chemicals Business or the
Former Chemicals Business; (iii) originals or, at Monsanto's election, copies of
all other corporate records and books of the Monsanto Group relating to the
Chemicals Group, Chemicals Assets, the Chemicals Liabilities, the Chemicals
Business, the Former Chemicals Business, the Joint Ownership Properties, the P4
Business, or the Other Agreements; including without limitation in each case,
all active agreements, active litigation files and government filings; and (iv)
copies of any and all Insurance Policies. From and after the Distribution Date,
all such books, records and copies (where copies are delivered in lieu of
originals) whether or not delivered shall be the property of the Chemicals
Group; provided, however, that all such Information contained in such books,
records or copies relating to the Monsanto Group, Monsanto Assets, the Monsanto
Liabilities, the Monsanto Business, the Joint Ownership Properties, the P4
Business, or the Other Agreements shall be subject to the applicable
confidentiality provisions and restricted use provisions, if any, contained in
this Agreement or the Other Agreements and any confidentiality restrictions
imposed by law. Monsanto, if it so elects, may retain copies of any original
books and records delivered to Chemicals along with those original books and
records of the Monsanto Group authorized herein to be retained (excluding books
and records to the extent relating to Chemicals Technology as defined in the
Intellectual Property Agreements or relating exclusively to Chemicals' use of
Shared Know How as defined in the Intellectual Property Agreements in the
Chemicals Business or Former Chemicals Business); provided, however, that all
such Information contained in such books, records or copies (whether or not
delivered to the Chemicals Group) relating to the Chemicals Group, the Chemicals
Assets, the Chemicals Liabilities, the Chemicals Business, the Former Chemicals
Business, the Joint Ownership Properties, the P4 Business, or the Other
Agreements shall be subject to the applicable confidentiality provisions and
restricted use provisions, if any, contained in this Agreement or the Other
Agreements and any confidentiality restrictions imposed by law.
6.02 ACCESS TO INFORMATION. In addition to the provisions set forth in
Section 6.01 above, from and after the Distribution Date and upon reasonable
notice, each of the Monsanto Group and the Chemicals Group shall afford to the
other and to the other's Representatives at the expense of the other party,
reasonable access and duplicating rights during normal business hours to all
Information developed or obtained prior to the Distribution Date within such
party's possession relating to the other party or its businesses, its former
businesses, its Assets, its Liabilities, the Joint Ownership Properties, the P4
Business, or the Other Agreements, insofar as such access is reasonably
requested by such other party, but subject to the applicable confidentiality
provisions
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and restricted use provisions, if any, contained in this Agreement or the Other
Agreements and any confidentiality restrictions imposed by law. In addition,
without limiting the foregoing, Information may be requested under this Section
6.02 for audit, accounting, claims, intellectual property protection, litigation
and Tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations. In each case, the requesting party agrees to cooperate with the
other party to minimize the risk of unreasonable interference with the other
party's business. In the event access to any Information otherwise required to
be granted herein or in the Other Agreements is restricted by law or otherwise,
the parties agree to take such actions as are reasonably necessary, proper or
advisable to have such restrictions removed or to seek an exemption therefrom or
to otherwise provide the requesting party with the benefit of the Information to
the same extent such actions would have been taken on behalf of the requesting
party had such a restriction existed and the Distribution not occurred.
6.03 LITIGATION SUPPORT AND PRODUCTION OF WITNESSES. After the
Distribution Date, each member of the Monsanto Group and the Chemicals Group
shall use reasonable efforts to provide assistance to the other with respect to
litigation and to make available to the other, upon written request: (i) such
employees who have expertise or knowledge with respect to the other party's
business or products or matters in litigation, for the purpose of consultation
and/or as a witness; and (ii) its directors, officers, other employees and
agents, as witnesses, in each case to the extent that the requesting party
believes any such Person may reasonably be useful or required in connection with
any legal, administrative or other proceedings in which the requesting party may
from time to time be involved. The employing party agrees that such consultant
or witness shall be made available to the requesting party upon reasonable
notice to the same extent that such employing party would have made such
consultant or witness available if the Distribution had not occurred. The
requesting party agrees to cooperate with the employing party in giving
consideration to business demands of such Persons.
6.04 REIMBURSEMENT. Except to the extent otherwise contemplated by
this Agreement or any Other Agreement, a party providing Information,
consultant, or witness services to the other party under this Article VI shall
be entitled to receive from the recipient, upon the presentation of invoices
therefor, payments for such amounts, relating to supplies, disbursements, travel
expenses, and other out-of-pocket expenses (including the direct and indirect
costs of employees providing consulting and expert witness services in
connection with litigation, but excluding direct and indirect costs of employees
who provide Information or are fact witnesses) as may be reasonably incurred in
providing such Information, consulting or witness services.
6.05 RETENTION OF RECORDS. Except as otherwise required by law or
agreed in writing, or as otherwise provided in the Tax Sharing Agreement, each
member of the Monsanto Group and the Chemicals Group shall retain, for the
periods set forth in the Monsanto Company Records Retention Manual dated April,
1994 or such longer period as may be required by law, this Agreement or the
Other Agreements, all significant Information in such party's possession or
under its control relating to the business, former business, Assets or
Liabilities of the other party or the Joint Ownership Properties or the P4
Business or this Agreement or the Other Agreements and, after the expiration of
such applicable period, prior to destroying or disposing of any of such
Information, (a) the party proposing to dispose of or destroy any such
Information shall provide no less than 30 days' prior written notice to the
other party, specifying the Information proposed to be
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destroyed or disposed of, and (b) if, prior to the scheduled date for such
destruction or disposal, the other party requests in writing that any of the
Information proposed to be destroyed or disposed of be delivered to such other
party, the party proposing to dispose of or destroy such Information promptly
shall arrange for the delivery of the requested Information to a location
specified by, and at the expense of, the requesting party.
6.06 PRIVILEGED INFORMATION. In furtherance of the rights and
obligations of the parties set forth in this Article VI:
(a) Each party hereto acknowledges that (1) each of the Monsanto Group
on the one hand, and the Chemicals Group on the other hand, has or may
obtain Information regarding a member of the other Group, or any of its
operations, employees, Assets or Liabilities (whether in documents or
stored in any other form or known to its employees or agents), as
applicable, that is or may be protected from disclosure pursuant to the
attorney-client privilege, the work product doctrine or other applicable
privileges ("Privileged Information"); (2) there are a number of actual,
threatened or future litigations, investigations, proceedings (including
arbitration proceedings), claims or other legal matters that have been or
may be asserted by or against, or otherwise affect, each or both of
Monsanto and Chemicals (or members of either Group) ("Litigation Matters");
(3) Monsanto and Chemicals have a common legal interest in Litigation
Matters, in the Privileged Information, and in the preservation of the
confidential status of the Privileged Information, in each case relating to
the Monsanto Business or the Chemicals Business or any former businesses,
the Assets or the Liabilities of each party or the Joint Ownership
Properties or the P4 Business as it or they existed prior to the
Distribution Date or relating to or arising in connection with the
relationship between the constituent elements of the Groups on or prior to
the Distribution Date; and (4) Monsanto and Chemicals intend that the
transactions contemplated by this Agreement and the Other Agreements and
any transfer of Privileged Information in connection herewith or therewith
shall not operate as a waiver of any potentially applicable privilege.
(b) Each of Monsanto and Chemicals agrees, on behalf of itself and
each member of the Group of which it is a member, not to disclose or
otherwise waive any privilege attaching to any Privileged Information
relating to the Monsanto Business or the Chemicals Business or any former
businesses or Assets or Liabilities of either party or the Joint Ownership
Properties or the P4 Business as they or it existed prior to the
Distribution Date, respectively, or relating to or arising in connection
with the relationship between the Groups on or prior to the Distribution
Date, without providing prompt written notice to and obtaining the prior
written consent of the other, which consent shall not be unreasonably
withheld and shall not be withheld if the other party certifies that such
disclosure is to be made in response to a likely threat of suspension or
debarment or similar action; PROVIDED, HOWEVER, that Monsanto and Chemicals
may make such disclosure or waiver with respect to Privileged Information
if such Privileged Information relates, in the case of Monsanto, solely to
the Monsanto Business, its former businesses (other than the Chemicals
Business or Former Chemicals Business or the P4 Business), the Monsanto
Assets or the Monsanto Liabilities as each existed prior to the
Distribution Date or, in the case of Chemicals, solely to the Chemicals
Business, the Former Chemicals Business, the Chemicals Assets or the
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Chemicals Liabilities, as each existed prior to the Distribution Date. In
the event of a disagreement between any member of the Monsanto Group and
any member of the Chemicals Group concerning the reasonableness of
withholding such consent, no disclosure shall be made prior to (i) a final,
nonappealable resolution of such disagreement by a court of competent
jurisdiction if such requirement to disclose is part of a pending judicial
proceeding; or (ii) a final determination by an arbitrator appointed
pursuant to Article VII if such requirement to disclose is not part of a
pending judicial proceeding.
(c) Upon any member of the Monsanto Group or any member of the
Chemicals Group receiving any subpoena or other compulsory disclosure
notice from a court, other governmental agency or otherwise which requests
disclosure of Privileged Information, in each case relating to the Monsanto
Business, its former businesses (other than the Chemicals Business or
Former Chemicals Business or the P4 Business), the Monsanto Assets or the
Monsanto Liabilities (in the case of the Chemical Group) or the Chemicals
Business, Former Chemicals Business, the Chemicals Assets or the Chemicals
Liabilities (in the case of the Monsanto Group) or the Joint Ownership
Properties or the P4 Business (in the case of either Group), as they or it
existed prior to the Distribution Date or relating to or arising in
connection with the relationship between the constituent elements of the
Groups on or prior to the Distribution Date, the recipient of the notice
shall promptly provide to Monsanto, in the case of receipt by a member of
the Chemicals Group, or to Chemicals, in the case of receipt by a member of
the Monsanto Group, a copy of such notice, the intended response, and all
materials or information relating to the other Group that might be
disclosed. In the event of a disagreement as to the intended response or
disclosure, unless and until the disagreement is resolved as provided in
paragraph (b) above, Monsanto and Chemicals shall cooperate to assert all
defenses to disclosure claimed by either Group, at the cost and expense of
the Group claiming such defense to disclosure, and shall not disclose any
disputed documents or information until all legal defenses and claims of
privilege have been finally determined.
6.07 CONFIDENTIALITY. From and after the Distribution Date, each of
Monsanto and Chemicals shall hold, and shall use its reasonable best efforts to
cause its employees, Affiliates and Representatives to hold, in strict
confidence all Information concerning or belonging to the other party obtained
by it prior to the Distribution Date or furnished to it by such other party
pursuant to this Agreement or the Other Agreements and shall not release or
disclose such Information to any other Person, except its Representatives, who
shall be bound by the provisions of this Section 6.07; PROVIDED, HOWEVER, that
Monsanto and Chemicals and their respective employees, Affiliates and
Representatives may disclose such Information to the extent that (a) disclosure
is compelled by judicial or administrative process or, in the opinion of such
party's counsel, by other requirements of law, or (b) such party can show that
such Information was (1) available to such party after the Distribution Date
from Third Party sources other than employees or former employees of either
party, their Affiliates, former Affiliates, Representatives or former
Representatives, on a nonconfidential basis prior to its disclosure to such
party after the Distribution Date by the other party, (2) in the public domain
through no fault of such party, (3) lawfully acquired by such party from Third
Party sources other than employees or former employees of either party, their
Affiliates, former Affiliates, Representatives or former Representatives, after
the time that it was furnished to such party pursuant to this Agreement or the
Other Agreements or (4) is independently discovered
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or developed after the Distribution Date by employees of such party.
Notwithstanding the foregoing, each of Monsanto and Chemicals and their
respective Representatives and Affiliates shall be deemed to have satisfied its
obligations under this Section 6.07 with respect to any Information if it
exercises the same care with regard to such Information as it takes to preserve
confidentiality for its own similar Information. Each party further covenants
that it shall not disclose to any Third Party (or any successor by merger or
otherwise) the fact that the other party uses Shared Know How (as defined in the
Intellectual Property Agreements) or if known, the particulars of such use.
ARTICLE VII
ARBITRATION; DISPUTE RESOLUTION
7.01 AGREEMENT TO ARBITRATE. Except as otherwise specifically provided
in any Other Agreement, the procedures for discussion, negotiation and
arbitration set forth in this Article VII shall apply to all disputes,
controversies or claims (whether sounding in contract, tort or otherwise) that
may arise out of or relate to, or arise under or in connection with this
Agreement or any Other Agreement, or the transactions contemplated hereby or
thereby (including all actions taken in furtherance of the transactions
contemplated hereby or thereby on or prior to the date hereof), or the
commercial or economic relationship of the parties as it relates to this
Agreement or such Other Agreement between or among any member of the Monsanto
Group and the Chemicals Group. Each party agrees on behalf of itself and each
member of its respective Group that the procedures set forth in this Article VII
shall be the sole and exclusive remedy in connection with any dispute,
controversy or claim relating to any of the foregoing matters and irrevocably
waives any right to commence any Action in or before any Governmental Authority,
except as expressly provided in Sections 7.07(b) and 7.08 and except to the
extent provided under the Arbitration Act in the case of judicial review of
arbitration results or awards.
7.02 ESCALATION.
(a) It is the intent of the parties to use their respective reasonable
best efforts to resolve expeditiously any dispute, controversy or claim between
or among them with respect to the matters covered hereby that may arise from
time to time on a mutually acceptable negotiated basis. In furtherance of the
foregoing, at the request of either party from time to time in a written notice
to the other party, the parties agree to negotiate in good faith to resolve any
controversies, claims or disputes under this Agreement or an Other Agreement. If
the parties cannot otherwise resolve the matter under consideration, then any
party involved in such a dispute, controversy or claim may deliver a notice (an
"Escalation Notice") demanding an in-person meeting of the Chief Executive
Officers (each, a "CEO") of Monsanto and Chemicals who shall meet with respect
to such matters, and who shall thereafter negotiate in good faith with each
other. Each party shall deliver, at the same time the Escalation Notice is
delivered pursuant to the preceding sentence, a copy of any such Escalation
Notice to the General Counsel of each other party involved in the dispute,
controversy or claim (which copy shall state that it is an Escalation Notice
pursuant to this Agreement). Any agenda, location or procedures for such
discussions or negotiations between the parties may be
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established by the parties from time to time; PROVIDED, HOWEVER, that the
parties shall use their reasonable efforts to meet within 30 days of the
delivery of the Escalation Notice.
(b) At any time, the parties may, by mutual consent, retain a mediator
to aid the parties in their discussions and negotiations by informally providing
advice to the parties. Any opinion expressed by the mediator shall be strictly
advisory and shall not be binding on the parties, nor shall any opinion
expressed by the mediator be admissible or be made known to the arbitrator in
any arbitration proceedings. The mediator may be chosen from a list of mediators
previously selected by the parties or by other agreement of the parties. Costs
of the mediation shall be borne equally by the parties involved in the matter,
except that each party shall be responsible for its own expenses. Mediation is
not a prerequisite to a demand for arbitration under Section 7.03.
(c) At any time after the delivery of the Escalation Notice, a party
(the "Offeror") may serve upon the other party (the "Offeree") an offer to
settle the dispute upon the payment or receipt of a specified sum (the "Offer of
Settlement"). If the Offer of Settlement is not accepted within thirty days of
receipt of such Offer or within such other longer period of time as may be
specified in the Offer of Settlement, if the Offeror made its CEO available for
a meeting or discussion and if the award or judgment finally obtained is not
more favorable to the Offeree than the Offer of Settlement, the Offeree must pay
the costs, including reasonable attorney's fees, incurred by the Offeror after
the making of the Offer of Settlement. The fact that an Offer of Settlement is
made and not accepted shall not preclude a subsequent offer by either party. The
Offer of Settlement shall be designated as such and copies of the Offer of
Settlement shall be given to the General Counsel and Chief Executive Officer of
each party involved in the dispute. The parties agree to keep confidential and
not to disclose to the arbitrator the fact or the amount of any Offer of
Settlement made.
7.03 DEMAND FOR ARBITRATION.
(a) At any time after the first to occur of (1) forty-five (45) days
after the date of the meeting actually held pursuant to the applicable
Escalation Notice or (2) ninety (90) days after the delivery of an Escalation
Notice (as applicable, the "Arbitration Demand Date"), any party involved in the
dispute, controversy or claim may make a written demand (the "Arbitration Demand
Notice") that the dispute be resolved by binding arbitration, which Arbitration
Demand Notice shall be given to the parties to the dispute, controversy or claim
in the manner set forth in Section 10.05. In the event that any party shall
deliver an Arbitration Demand Notice to another party, such other party may
itself deliver an Arbitration Demand Notice to such first party with respect to
any related dispute, controversy or claim without the requirement of delivering
an Escalation Notice. No party may assert that the failure to resolve any matter
during any discussions or negotiations or the course of conduct during the
discussions or negotiations in each case, as contemplated by Section 7.02, is a
prerequisite to a demand for arbitration under Section 7.03. In the event that
any party delivers an Arbitration Demand Notice with respect to any dispute,
controversy or claim that is the subject of any then-pending arbitration
proceeding or of a previously delivered Arbitration Demand Notice, all such
disputes, controversies and claims shall be resolved in the arbitration
proceeding for which an Arbitration Demand Notice was first delivered unless the
arbitrator in his or her sole discretion determines that it is impracticable or
otherwise inadvisable to do so.
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(b) The parties agree that the giving of an Escalation Notice or an
Arbitration Demand Notice followed by good faith discussions, negotiations,
mediations or arbitration between the parties pursuant to this Agreement or the
Other Agreements will toll the applicable statute of limitations during the time
period consumed in compliance with this Article VII with respect to such claims.
Subject to Sections 7.07(d) and 7.08, upon delivery of an Arbitration Demand
Notice pursuant to Section 7.03(a), the dispute, controversy or claim shall be
decided by a sole arbitrator in accordance with the rules set forth in this
Article VII.
7.04 ARBITRATORS.
(a) Within 15 days after a valid Arbitration Demand Notice is given,
the parties involved in the dispute, controversy or claim referenced therein
shall attempt to select a sole arbitrator satisfactory to all such parties.
(b) In the event that such parties are not able jointly to select a
sole arbitrator within such 15-day period, such parties shall each appoint an
arbitrator (who need not be disinterested as to the parties or the matter)
within 30 days after delivery of the Arbitration Demand Notice. If one party
appoints an arbitrator within such time period and the other party or parties
fail to appoint an arbitrator within such time period, the arbitrator appointed
by the one party shall be the sole arbitrator of the matter.
(c) In the event that a sole arbitrator is not selected pursuant to
paragraph (a) or (b) above and, instead, two arbitrators are selected pursuant
to paragraph (b) above, the two arbitrators will, within 30 days after the
appointment of the later of them to be appointed, select an additional
arbitrator who shall act as the sole arbitrator of the dispute. After selection
of such sole arbitrator, the initial arbitrators shall have no further role with
respect to the dispute. In the event that the arbitrators so appointed do not,
within 30 days after the appointment of the later of them to be appointed, agree
on the selection of the sole arbitrator, any party involved in such dispute may
apply to CPR, New York, New York to select the sole arbitrator, which selection
shall be made by such organization within 30 days after such application. Any
arbitrator selected pursuant to this paragraph (c) shall be disinterested with
respect to any of the parties and the matter and shall be reasonably competent
in the applicable subject matter. In disputes involving the Tax Sharing
Agreement the arbitrator appointed shall be either a tax attorney or an
independent certified public accountant.
(d) The sole arbitrator selected pursuant to paragraph (a), (b) or (c)
above will set a time for the hearing of the matter which will commence no later
than 90 days after the date of appointment of the sole arbitrator pursuant to
paragraph (a), (b) or (c) above and which hearing will be no longer than 30 days
(unless in the judgment of the arbitrator the matter is unusually complex and
sophisticated and thereby requires a longer time, in which event such hearing
shall be no longer than 90 days). The final award of such arbitrator will be
rendered in writing to the parties not later than 60 days after the last hearing
date, unless otherwise agreed by the parties in writing.
(e) The place of any arbitration hereunder will be St. Louis,
Missouri, unless otherwise agreed by the parties.
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7.05 HEARINGS. Within the time period specified in Section 7.04(d),
the matter shall be presented to the arbitrator at a hearing by means of written
submissions of memoranda and verified witness statements, filed simultaneously,
and responses, if necessary in the judgment of the arbitrator or both the
parties. The arbitrator shall actively manage the arbitration with a view to
achieving a just, speedy and cost-effective resolution of the dispute, claim or
controversy. The arbitrator may, in his or her discretion, set time and other
limits on the presentation of each party's case, its memoranda or other
submissions, and refuse to receive any proffered evidence which the arbitrator,
in his or her discretion, finds to be cumulative, unnecessary, irrelevant or of
low probative nature. Except as otherwise set forth herein, any arbitration
hereunder will be conducted in accordance with the CPR Rules for
Non-Administered Arbitration of Business Disputes then prevailing (except that
the fee schedule of CPR will not apply unless CPR selects the arbitrator in
which event the relevant CPR Fee Schedule will apply). Except as expressly set
forth in Section 7.08(b), the decision of the arbitrator will be final and
binding on the parties, and judgment thereon may be had and will be enforceable
in any court having jurisdiction over the parties. Arbitration awards will bear
interest from the date of the arbitration award at an annual rate of the Prime
Rate per annum. To the extent that the provisions of this Agreement and the
prevailing rules of the CPR conflict, the provisions of this Agreement shall
govern.
7.06 DISCOVERY AND CERTAIN OTHER MATTERS.
(a) In addition to its rights of access to Information under
Article VI of this Agreement and any other rights to Information provided for in
this Agreement or an Other Agreement, any party involved in the applicable
dispute may request limited document production from the other party or parties
at any time following the original meeting request of relevant documents
containing Information developed after the Distribution Date and which
Information would not otherwise be available under Article VI, with the
reasonable expenses of the producing party incurred in such production paid by
the requesting party. Any such discovery (which rights to documents shall be
substantially less than document discovery rights prevailing under the Federal
Rules of Civil Procedure) shall be conducted expeditiously and shall not cause
the hearing provided for in Section 7.05 to be adjourned except upon consent of
all parties involved in the applicable dispute or upon a showing of cause
demonstrating that such adjournment is necessary to permit discovery essential
to a party to the proceeding. Depositions, interrogatories or other forms of
discovery (other than the document production set forth above) shall not occur
except by consent of the parties involved in the applicable dispute. Disputes
concerning the scope of document production and enforcement of the document
production requests will be determined by written agreement of the parties
involved in the applicable dispute or, failing such agreement, will be referred
to the arbitrator for resolution. All discovery requests for Information
developed after the Distribution Date will be subject to the parties' rights to
claim any applicable privilege. In addition to the parties confidentiality and
restricted use obligations with respect to Information contained in this
Agreement or the applicable Other Agreement, the arbitrator will adopt
procedures to protect the proprietary rights of the parties and to maintain the
confidential treatment of the arbitration proceedings (except as may be required
by law). Subject to the foregoing, the arbitrator shall have the power to issue
subpoenas to compel the production of documents relevant to the dispute,
controversy or claim.
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(b) The arbitrator shall have full power and authority to determine
issues of arbitrability but shall otherwise be limited to interpreting or
construing the applicable provisions of this Agreement or any Other Agreement,
and will have no authority or power to limit, expand, alter, amend, modify,
revoke or suspend any condition or provision of this Agreement or any Other
Agreement; it being understood, however, that the arbitrator will have full
authority to implement the provisions of this Agreement or any Other Agreement,
and to fashion appropriate remedies for breaches of this Agreement (including
interim or permanent injunctive relief); PROVIDED that the arbitrator shall not
have (1) any authority in excess of the authority a court having jurisdiction
over the parties and the controversy or dispute would have absent these
arbitration provisions or (2) any right or power to award punitive or treble
damages. It is the intention of the parties that in rendering a decision the
arbitrator give effect to the applicable provisions of this Agreement and the
Other Agreements and follow applicable law (it being understood and agreed that
this sentence shall not give rise to a right of judicial review of the
arbitrator's award).
(c) If a party fails or refuses to appear at and participate in an
arbitration hearing after due notice, the arbitrator may hear and determine the
controversy upon evidence produced by the appearing party.
(d) Arbitration costs will be borne equally by each party involved in
the matter, except that each party will be responsible for its own attorney's
fees and other costs and expenses, including the costs of witnesses selected by
such party. Provided, however, that if an arbitration or court action is
commenced without a meeting of or discussion between the CEO's, the party who
did not make its CEO available for such meeting or discussion will pay all costs
of the arbitration or litigation. In addition, the arbitrator (or the Court in
any action under Article 7.08 or any action to enforce the award) shall be
entitled in his or her discretion to award reasonable attorney's fees to the
prevailing party if the arbitrator (or the Court) finds that the other party did
not make its CEO available for a meeting and that party (a) has asserted claims
or defenses that are frivolous or (b) has unnecessarily and unreasonably
expanded the scope of the proceedings.
7.07 CERTAIN ADDITIONAL MATTERS.
(a) Any arbitration award shall be a bare award limited to a holding
for or against a party and shall be without findings as to facts, issues or
conclusions of law (including with respect to any matters relating to the
validity or infringement of patents or patent applications) and shall be without
a statement of the reasoning on which the award rests, but must be in adequate
form so that a judgment of a court may be entered thereupon. Judgment upon any
arbitration award hereunder may be entered in any court having jurisdiction
thereof.
(b) Prior to the time at which an arbitrator is appointed pursuant to
Section 7.04, any party may seek one or more temporary restraining orders in a
court of competent jurisdiction if necessary in order to preserve and protect
the status quo. Neither the request for, or grant or denial of, any such
temporary restraining order shall be deemed a waiver of the obligation to
arbitrate as set forth herein.
(c) Except as required by law, the parties shall hold, and shall cause
their respective officers, directors, employees, agents and other
representatives to hold, the existence, content and
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result of mediation or arbitration in confidence in accordance with the
provisions of Article VI and except as may be required in order to enforce any
award. Each of the parties shall request that any mediator or arbitrator comply
with such confidentiality requirement.
(d) In the event that at any time the sole arbitrator shall fail to
serve as an arbitrator for any reason, the parties shall select a new arbitrator
who shall be disinterested as to the parties and the matter in accordance with
the procedures set forth herein for the selection of the initial arbitrator. The
extent, if any, to which testimony previously given shall be repeated or as to
which the replacement arbitrator elects to rely on the stenographic record (if
there is one) of such testimony shall be determined by the replacement
arbitrator.
7.08 LIMITED COURT ACTIONS.
(a) Notwithstanding anything herein to the contrary, in the event that
any party reasonably determines the amount in controversy in any dispute,
controversy or claim (or any series of related disputes, controversies or
claims) under this Agreement or any Other Agreement is, or is reasonably likely
to be, in excess of $10 million and if such party desires to commence an Action
in lieu of complying with the arbitration provisions of this Article, such party
shall so state in its Arbitration Demand Notice or by notice given to the other
parties within 20 days after receipt of an Arbitration Demand Notice with
respect thereto. If the other parties to the arbitration do not agree that the
amount in controversy in such dispute, controversy or claim (or such series of
related disputes, controversies or claims) is, or is reasonably likely to be, in
excess of $10 million, the arbitrator selected pursuant to Section 7.04 hereof
shall decide whether the amount in controversy in such dispute, controversy or
claim (or such series of related disputes, controversies or claims) is, or is
reasonably likely to be, in excess of $10 million. The arbitrator shall set a
date that is no later than ten days after the date of his or her appointment for
submissions by the parties with respect to such issue. Except for a party's
rights of access to Information as provided in this Agreement and the Other
Agreements, there shall not be any discovery in connection with such issue. The
arbitrator shall render his or her decision on such issue within five days of
such date so set by the arbitrator. In the event that the arbitrator determines
that the amount in controversy in such dispute, controversy or claim (or such
series of related disputes, controversies or claims) is or is reasonably likely
to be in excess of $10 million, the provisions of Sections 7.04(d) and (e),
7.05, 7.06, 7.07 and 7.10 hereof shall not apply and on or before (but, except
as expressly set forth in Section 7.08(b), not after) the tenth business day
after the date of such decision, any party to the arbitration may elect, in lieu
of arbitration, to commence an Action with respect to such dispute, controversy
or claim (or such series of related disputes, controversies or claims) in any
court of competent jurisdiction. If the arbitrator does not so determine, the
provisions of this Article VII (including with respect to time periods) shall
apply as if no determinations were sought or made pursuant to this Section
7.08(a).
(b) In the event that an arbitration award in excess of $10 million is
issued in any arbitration proceeding commenced hereunder, any party may, within
60 days after the date of such award, commence an Action in a court of competent
jurisdiction relating to the dispute, controversy or claim (or series of related
disputes, controversies or claims) giving rise thereto to a court of competent
jurisdiction, regardless of whether such party or any other party sought to
commence an Action in lieu of proceeding with arbitration in accordance with
Section 7.08(a). In such event,
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each party may present arguments to the court with respect to whether and to
what extent the record developed in arbitration shall be admissible into
evidence and whether any such additional discovery or evidence shall be
permitted.
(c) No party shall raise as a defense the statute of limitations or
repose or a claim of laches if the applicable Notice of Escalation was delivered
on or prior to the applicable statute of limitations or repose or the time
period required to assert a claim of laches and, if applicable, if the matter is
submitted to a court of competent jurisdiction within the 60-day period
specified in Section 7.08(b).
7.09 CONTINUITY OF SERVICE AND PERFORMANCE. Unless otherwise agreed in
writing, the parties will continue to provide service and honor all other
commitments under this Agreement and each Other Agreement during the course of
dispute resolution pursuant to the provisions of this Article VII with respect
to all matters not subject to such dispute, controversy or claim.
7.10 LAW GOVERNING ARBITRATION PROCEDURES. The interpretation of the
provisions of this Article VII, only insofar as they relate to the agreement to
arbitrate and any procedures pursuant thereto, shall be governed by the
Arbitration Act and other applicable federal law. In all other respects, the
interpretation of this Agreement shall be governed as set forth in Section
10.04.
ARTICLE VIII
NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS
8.01 NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS. Chemicals
understands and agrees that no member of the Monsanto Group is, in this
Agreement or in any Other Agreement, representing or warranting to the Chemicals
Group in any way as to the Chemicals Assets, the Chemicals Liabilities, the
Chemicals Business, the Former Chemicals Business or the Chemicals Balance
Sheet, or as to any consents or approvals required in connection with the
consummation of the transactions contemplated by this Agreement, it being agreed
and understood as between the Groups, the members of the Chemicals Group shall
take all of the Chemicals Assets "as is, where is" and that, except as provided
in this Section 8.01 or in Section 5.01, the members of Chemicals Group shall
bear the economic and legal risk that conveyances of the Chemicals Assets shall
prove to be insufficient or that the title of any member of the Chemicals Group
to any Chemicals Assets shall be other than good and marketable and free from
encumbrances. Real property in the United States being transferred to Chemicals
will be conveyed by Special Warranty Deed, in recordable form and warranting
title to be free and clear from all lawful claims of those claiming by, through
or under Monsanto, but not otherwise; provided, however, such Special Warranty
Deed shall be subject to deed restrictions, easements, rights-of-way, and all
other matters of record.
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ARTICLE IX
INSURANCE
9.01 INSURANCE POLICIES AND RIGHTS.
(a) Without limiting the generality of the definition of Chemicals
Assets set forth in Section 1.01 or the effect of Section 2.03, the Chemicals
Assets shall include any and all rights of an insured party, including rights of
indemnity and the right to be defended by or at the expense of the insurer with
respect to all Chemicals Claims, under any Insurance Policies; PROVIDED,
HOWEVER, that nothing in this clause shall be deemed to constitute (or to
reflect) the assignment to Chemicals of any of the Insurance Policies. Except
for Insurance Proceeds paid to or on behalf of any member of the Monsanto Group
at the direction of Chemicals in satisfaction of a claim that would otherwise be
subject to indemnification by Chemicals under Article IV but subject to the
provisions of Section 4.03(c), and except for reimbursement received by Monsanto
for Chemicals Claims which are Monsanto Liabilities and were paid by the
Monsanto Group after the Distribution Date, Chemicals shall be entitled to
receive from the insurer or Monsanto any Insurance Proceeds with respect to any
Chemicals Claim under the Insurance Policies including without limitation,
reimbursement or payment for Chemicals Liabilities, for casualty or business
interruption with respect to the Chemicals Business or the Chemicals Assets, or
for costs or expenses related thereto.
(b) Without limiting the generality of the definition of Monsanto
Assets set forth in Section 1.01, the Monsanto Assets shall include any and all
rights of an insured party including rights of indemnity and the right to be
defended by or at the expense of the insurer, under any Insurance Policies other
than the rights under the Insurance Policies which are included in Chemicals
Assets pursuant to Section 9.01(a). Such rights include claims with respect to
the Joint Ownership Properties or the P4 Business to the extent of Monsanto's
rights or obligations under the P4 Joint Venture Agreement with respect to such
claims.
(c) Solely for purposes of this Article IX, "Monsanto Group" and
"Chemicals Group" shall include their consolidated entities to the extent such
entities were in existence on or prior to the Distribution Date or are set forth
on Schedule 1.01(21).
9.02 CLAIMS.
(a) The parties agree that on or prior to the Distribution Date,
Monsanto shall be deemed: (i) to have assigned to the Chemicals Group, without
need of further documentation, all of the Monsanto Group's rights, if any, as an
insured party, including rights of indemnity and the right to be defended by or
at the expense of the insurer, under all of the Insurance Policies with respect
to such Chemicals Claims as are pending on the Distribution Date, and (ii) to
the extent necessary to provide the Chemicals Group with the benefit of such
insurance with respect to Chemicals Claims, to designate Chemicals, without need
of further documentation, as the agent and attorney-in-fact to assert and to
collect any Insurance Proceeds under such Insurance Policies; provided, however,
that nothing in this Section 9.02 shall be deemed to constitute (or reflect) the
assignment of any of the Insurance Policies to the Chemicals Group. If,
subsequent to the Distribution Date, the Chemicals Group shall be entitled to
payment or reimbursement with respect to a Chemicals Claim or any
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Person shall assert a Chemicals Claim, then Monsanto shall at the time such
Chemicals Claim arises or is asserted be deemed: (i) to assign, without need of
further documentation, to the Chemicals Group all of the Monsanto Group's
rights, if any, as an insured party, including rights of indemnity and the right
to be defended by or at the expense of the insurer, under the applicable
Insurance Policy with respect to such Chemicals Claim; and (ii) to the extent
necessary to provide the Chemicals Group with the benefit of such insurance with
respect to Chemicals Claims, to designate Chemicals, without need of further
documentation, as the agent and attorney-in-fact to assert and to collect any
Insurance Proceeds under such Insurance Policies, PROVIDED, HOWEVER, that
nothing in this Section 9.02 shall be deemed to constitute (or to reflect) the
assignment of any of the Insurance Policies to the Chemicals Group. In the event
an insurer refuses to honor such agency or to pay such Insurance Proceeds to the
Chemicals Group, Monsanto shall collect such Insurance Proceeds and forward it
to Chemicals.
(b) In the event of payment of a Chemicals Claim by the Chemicals
Group after the Distribution Date or any payment of a Chemicals Claim prior to
the Distribution Agreement which is subject to reimbursement or payment by an
insurer or a Third Party, Chemicals, or the applicable member of the Chemicals
Group shall be subrogated to and stand in the place of Monsanto or the Monsanto
Group as to any rights, events or circumstances in respect of which Chemicals or
the applicable member of the Chemicals Group may have any right or claim under
this Agreement, any Other Agreement or otherwise against any such insurer or
Third Party relating to such Chemicals Claim. Monsanto shall cooperate with the
Chemicals Group in a reasonable manner in prosecuting any subrogated right or
claim, including granting Chemicals permission to ▇▇▇ in the name of Monsanto.
9.03 ADMINISTRATION AND RESERVES. Consistent with the provisions of
Article IV, from and after the Distribution Date:
(a) Monsanto shall be responsible for (1) Insurance Administration of
the Insurance Policies with respect to any Monsanto Liabilities, any
Monsanto Assets or any claims as to which the Monsanto Group has retained
rights of reimbursement or subrogation pursuant to this Agreement or any
Other Agreement; and (2) Claims Administration with respect to any Monsanto
Liabilities, any Monsanto Assets or any claims as to which the Monsanto
Group has retained rights of reimbursement or subrogation pursuant to this
Agreement or any Other Agreement. It is understood that the retention of
the Insurance Policies by Monsanto is in no way intended to limit, inhibit
or preclude any right to insurance coverage for any Insured Claim or any
other rights under the Insurance Policies, including without limitation,
claims of Chemicals and any of its operations, Subsidiaries and Affiliates
for insurance coverage, reimbursement, subrogation or otherwise; and
(b) Chemicals shall be responsible for (1) Insurance Administration of
the Insurance Policies with respect to any Chemicals Liabilities, any
Chemicals Assets, or any claims as to which the Chemicals Group has rights
of reimbursement or subrogation pursuant to this Agreement or any Other
Agreement, and (2) Claims Administration with respect to any Chemicals
Liabilities, any Chemicals Assets, or any claims as to which the Chemicals
Group has rights of reimbursement or subrogation pursuant to this Agreement
or an Other Agreement. Subject to the terms of the Transition Services
Agreement, Monsanto
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shall perform the Insurance Administration and provide assistance to the
Chemicals Group with respect to Claims Administration for claims as to
which Chemicals or the Chemicals Group has rights or obligations hereunder
as part of the insurance and risk management services it will perform for
the Chemicals Group after the Distribution Date.
9.04 RETROSPECTIVELY RATED INSURANCE PREMIUMS. Each party shall pay
its share of retrospectively rated premiums incurred after the Distribution Date
for coverage under the Insurance Policies with respect to their respective
Liabilities which are Insured Claims under the Insurance Policies. Such shares
will be determined consistent with the accounting principle in effect on the
Distribution Date which was used to determine shares of such retrospectively
rated premiums prior thereto. Either party shall have the right but not the
obligation to pay such premiums under the Insurance Policies with respect to the
other party's Liabilities which are Insured Claims under the Insurance Policies
to the extent that such other party does not pay such premiums, whereupon the
non-paying party shall forthwith reimburse the payor for any premiums paid by
the payor with respect to such non-paying party's Liabilities.
9.05 ALLOCATION OF INSURANCE PROCEEDS; COOPERATION. (a) Except as
otherwise provided in Section 4.03(c), Insurance Proceeds received with respect
to claims, costs and expenses under the Insurance Policies shall be paid to
Monsanto with respect to Monsanto Liabilities and to Chemicals with respect to
the Chemicals Liabilities. Payment of the allocable portions of indemnity costs
of Insurance Proceeds resulting from the Insurance Policies will be made to the
appropriate party upon receipt from the insurance carrier.
(b) Each of the parties hereto agree to use commercially
reasonable efforts to maximize available coverage under the Insurance Policies
for all Insured Claims whether or not such party is the expected beneficiary of
Insurance Proceeds under such Insurance Policies in respect of such Insured
Claim. As part of such efforts to maximize insurance coverage, each party agrees
to take all commercially reasonable steps to recover such amounts as are or
might be due from all other responsible parties in respect of an Insured Claim,
including but not limited to Insured Claims as to which coverage limits under
the Insurance Policies would be or would have been exceeded as a result of such
Insured Claim and whether or not such party is expected to benefit directly from
such efforts.
(c) Where Monsanto Liabilities and Chemicals Liabilities, as
applicable, are covered under the same Insurance Policies for periods prior to
the Distribution Date, or covering claims made after the Distribution Date with
respect to an event or an occurrence prior to the Distribution Date, then the
Monsanto Group and the Chemicals Group may claim coverage for Insured Claims
under such Insurance Policies as and to the extent that such insurance is
available up to the full extent of the applicable limits of liability or other
coverage of such Insurance Policies. Each party may receive Insurance Proceeds
in respect of its Insured Claims as and when payable under the terms of the
applicable Insurance Policies without regard to whether the Insured Claim covers
a Monsanto Liability or claim or a Chemicals Liability or claim, the relative
amount of deductible paid by either party after the Distribution Date with
respect to an Insured Claim for a Liability for which such party was responsible
or the amount of such Insurance Proceeds paid to either Group after the
Distribution Date with respect to its respective Liabilities. In the event that
the aggregate limits on any Insurance Policy is exceeded by the aggregate of
paid Insured Claims,
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there shall be no further allocation of previously paid deductibles, premiums or
Insurance Proceeds between the Groups and except as expressly provided in this
Agreement, neither Group shall be entitled to reimbursement from the other Group
for deductibles, premiums or Insurance Proceeds paid by an insurer to or on
behalf of such Group; provided, however, that in the event additional insurance
coverage for remaining unpaid Insured Claims may be purchased or reinstated, the
parties agree to share such costs of reinstatement (including premium penalty
adjustments) in the same proportion which the Insurance Proceeds under such
Insurance Policy (both received and expected to be received by such party after
the Distribution Date less deductible paid by such party after the Distribution
Date) bears to the total Insurance Proceeds paid (and payable to the party with
the pending claims under the new coverage limits).
9.06 REIMBURSEMENT OF EXPENSES. Chemicals shall reimburse the relevant
insurer or the relevant third-party administrator, to the extent required under
any Insurance Policy or Service Agreement for any services performed after the
Distribution Date with respect to any and all Chemicals Claims which are not
Monsanto Liabilities which are paid, settled, adjusted, defended and/or
otherwise handled by such insurer or third-party administrator pursuant to the
terms and conditions of such Insurance Policy or Service Agreement.
9.07 INSURER INSOLVENCY. Except for Chemicals Claims which are
Monsanto Liabilities or as otherwise provided in this Agreement, the Monsanto
Group shall not be obligated to reimburse the Chemicals Group for any Chemicals
Claim covered under any Insurance Policies which is not paid because of the
insolvency of such insurer or the refusal by any insurer to pay such Chemicals
Claim; provided, however, that Monsanto shall assign to Chemicals or any member
of the Chemicals Group all of its rights under such Insurance Policies with
respect to such Chemicals Claim and shall cooperate with Chemicals, at
Chemicals' option and expense, in pursuing collection of all or part of such
Chemicals Claim from such insurer or such other Third Parties who may have
liability for such Chemicals Claim (including without limitation, Governmental
Authorities, or others holding insurance reserves available for payment,
trustees in bankruptcy or liquidators of such insurers, etc.).
9.08 DIRECT RESPONSIBILITY FOR CLAIMS. Monsanto agrees to notify
insurers under the Insurance Policies of the Distribution and to seek an
endorsement by such insurers that the coverage provided by such Insurance
Policies will apply to the Monsanto Group and the Chemicals Group with the same
force and effect and subject to the same terms, conditions, and exclusions as if
the separation of Monsanto and the Distribution had not occurred. In the event
such endorsement is refused, Monsanto agrees to take such action as is necessary
to place the Chemicals Group in the same position as it would have been had such
endorsement been agreed upon by such insurers. Chemicals shall have the right to
make reasonable efforts to negotiate agreements with any and all insurers or
third-party administrators whereby Chemicals shall assume direct responsibility
for any and all Liabilities related to it under any Insurance Policies and/or
Service Agreements, and Monsanto shall provide reasonable assistance in this
effort.
9.09 NO REDUCTION OF COVERAGE. Except for such reduction in coverage
resulting from payment of claims paid in accordance with this Agreement or any
Other Agreement, neither party shall take any action to eliminate or reduce
coverage under any Insurance Policy or Service
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Agreement for any claims without the prior written consent of the other party
(which shall not be unreasonably withheld or delayed).
9.10 ASSISTANCE, WAIVER OF CONFLICT AND SHARED DEFENSE. Each of the
parties hereto agrees to provide reasonable assistance to the other parties
hereto as regards any dispute with any third party (including insurers,
third-party administrators and state guaranty funds) as to any matter related to
the Insurance Policies or Service Agreements. In the event that Insured Claims
of more than one Group exist relating to the same occurrence, the parties hereto
agree to defend such Insured Claims jointly and to waive any conflict of
interest necessary to the conduct of such joint defense. Nothing in this Section
9.10 shall be construed to limit or otherwise alter in any way the indemnity
obligations of the parties hereto, including those created by this Agreement or
by operation of law.
ARTICLE X
MISCELLANEOUS
10.01 CONDITIONS TO OBLIGATIONS.
(a) The obligations of the parties hereto to consummate the
Distribution are subject to the satisfaction, as determined by Monsanto in its
sole discretion, of each of the following conditions:
(1) The Distribution shall have been approved by the holders of a
majority of the shares of Monsanto Common Stock present in person or by
proxy at the Special Meeting;
(2) The Monsanto Certificate Amendment shall have been approved by the
holders of a majority of the outstanding shares of Monsanto Common Stock;
(3) The transactions contemplated by Sections 2.01, 2.02, 2.05 and
2.06 shall have been consummated and the transactions contemplated by
Section 2.03 shall have been consummated in all material respects;
(4) The Chemicals Common Stock shall have been approved for listing on
the NYSE, subject to official notice of issuance;
(5) The Registration Statement shall have been filed with the SEC and
shall have become effective, and no stop order with respect thereto shall
be in effect;
(6) All material authorizations, consents, approvals and clearances of
federal, state, local and foreign governmental agencies required to permit
the valid consummation by the parties hereto of the transactions
contemplated by this Agreement shall have been obtained; and no such
authorization, consent, approval or clearance shall contain any conditions
which would have a material adverse effect on (A) the Monsanto Business or
the Chemicals Business, (B) the Assets, results of operations or financial
condition of the Monsanto Group
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or the Chemicals Group, in each case taken as a whole, or (C) the ability of
Monsanto or Chemicals to perform its obligations under this Agreement; and all
statutory requirements for such valid consummation shall have been fulfilled.
(7) No preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a government,
regulatory or administrative agency or commission, and no statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, shall be in effect preventing the consummation of the
Distribution;
(8) The Financing Facility shall be in place and all conditions to
borrowing thereunder (other than any conditions concerning consummation of
the Distribution and the transfers of assets and liabilities described
hereunder) shall have been satisfied, and all necessary consents, waivers
or amendments to each bank credit agreement, debt security or other
financing facility to which any member of the Monsanto Group or the
Chemicals Group is a party or by which any such member is bound shall have
been obtained, or each such agreement, security or facility shall have been
refinanced, in each case on terms satisfactory to Monsanto and to the
extent necessary to permit the Distribution to be consummated without any
material breach of the terms of such agreement, security or facility; and
(9) Monsanto shall have received a ruling from the Internal Revenue
Service that the Distribution is tax-free for federal income tax purposes,
and such ruling shall be in form and substance satisfactory to Monsanto in
its sole discretion.
(b) The foregoing conditions are for the sole benefit of Monsanto and shall
not give rise to any duty on the part of Monsanto or its Board of Directors to
waive or not waive any such condition. Any determination made by the Board of
Directors of Monsanto in good faith on or prior to the Distribution Date
concerning the satisfaction or waiver of any or all of the conditions set forth
in Section 10.01(a) shall be conclusive.
10.02 COMPLETE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, the Other Agreements and the agreements and other documents referred to
herein shall constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter,
including without limitation, the "Spin Principles".
10.03 EXPENSES. All costs and expenses of any party hereto whether
incurred prior to or after the Distribution Date in connection with the
preparation, execution, delivery and implementation of this Agreement and with
the consummation of the transactions contemplated by this Agreement and the
Other Agreements, including but not limited to legal fees, accounting fees,
investment banking fees, and all such other costs and expenses shall be charged
to and paid by Monsanto. Monsanto will contribute to Chemicals all intangible
assets relating to Chemicals' investigatory, pre-opening, start-up and
organizational expenditures which are required to be capitalized for federal
income tax purposes.
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10.04 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware (other than the laws
regarding choice of laws and conflicts of laws) as to all matters, including
matters of validity, construction, effect, performance and remedies.
10.05 NOTICES. All notices, requests, claims, demands and other
communications hereunder (collectively, "Notices") shall be in writing and shall
be given (and shall be deemed to have been duly given upon receipt) by delivery
in person, by cable, telegram, facsimile, electronic mail or other standard form
of telecommunications (provided confirmation is delivered to the recipient the
next Business Day in the case of facsimile, electronic mail or other standard
form of telecommunications) or by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If to Monsanto: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Corporate Vice President
Monsanto Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: General Counsel
Monsanto Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Chemicals: President
G Building
Solutia Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: General Counsel
G Building
Solutia Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 10.05.
10.06 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by a written agreement signed by both of the
parties hereto.
10.07 SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARIES. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their successors and permitted assigns,
but neither this Agreement nor any of the rights, interests and obligations
hereunder shall be assigned by any party hereto without the prior written
consent of the other party (which consent shall not be unreasonably withheld or
delayed). Except for the provisions of Sections 4.03 and 4.04 relating to
Indemnities, which are also for the benefit of the Indemnitees, this Agreement
is solely for the benefit of the parties hereto and their Subsidiaries and
Affiliates and is not intended to confer upon any other Persons any rights or
remedies hereunder.
10.08 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.09 INTERPRETATION. The Article and Section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties hereto and shall not in any way affect the meaning or
interpretation of this Agreement.
10.10 LEGAL ENFORCEABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Each party acknowledges
that money damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.
10.11 REFERENCES; CONSTRUCTION. References to any "Article",
"Exhibit", "Schedule" or "Section", without more, are to Appendices, Articles,
Exhibits, Schedules and Sections to or of this Agreement. Unless otherwise
expressly stated, clauses beginning with the term "including" set forth examples
only and in no way limit the generality of the matters thus exemplified.
10.12 TERMINATION. Notwithstanding any provision hereof this Agreement
may be terminated and the Distribution abandoned at any time prior to the
Distribution Date by and in the sole discretion of the Board of Directors of
Monsanto without the approval of any other party hereto or of Monsanto's
stockholders. In the event of such termination, no party hereto shall have any
Liability to any Person by reason of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
MONSANTO COMPANY,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
______________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice Chairman
SOLUTIA INC.
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ III
______________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇ III
President
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The following is an identification of the contents of all omitted schedules
and exhibits to the Distribution Agreement. Solutia Inc. will furnish
supplementally a copy of any omitted schedule or exhibit to the Securities
and Exchange Commission upon request.
DISTRIBUTION AGREEMENT
EXHIBITS:
1.01(29) - Form of Employee Benefits and Compensation Allocation Agreement
1.01(49) - Form of Intellectual Property Transfer Agreement
1.01(52) - Form of Lease Agreements
1.01(70) - Master Operating Agreement
1.01(74)(a) - (g) - P4 Joint Venture Agreements
1.01(81)(a) - (f) - Raw Material Supply Agreements
1.01(94) - Tax Sharing Agreement
1.01(97) - Transition Services Agreement
2.01(a) - Chemicals' Restated Certificate of Incorporation
2.01(b) - Chemicals' By-Laws
4.03(e) - Form of Power of Attorney - Existing Third Party Claims
5.01(d)(ii) - Form of Power of Attorney - Real Estate
5.01(e) - Form of Power of Attorney - Other
SCHEDULES:
1.01(11)(a) - Chemicals Assets: Real Property
1.01(11)(b) - Chemicals Assets: Partnership, Joint Venture and Other
Equity Interests
1.01(11)(c) - Chemicals Assets: Other
1.01(13) - Chemicals Business: Principal Chemicals Businesses and
Operations
1.01(19)(a) - Chemicals Liabilities: Environmental Remediation
1.01(19)(b) - Chemicals Liabilities: Third Party Indebtedness
1.01(19)(c) - Chemicals Liabilities: Other
1.01(21) - Chemicals Subsidiaries
1.01(32) - Excluded Chemicals Assets: Other
1.01(33) - Excluded Chemicals Liabilities
1.01(36)(a) - Former Chemicals Business: Discontinued Businesses
1.01(36)(b) - Former Chemicals Business: Other
1.01(51) - Joint Ownership Properties
1.01(52) - Lease Agreements: Facilities
1.01(70) - Operating Agreements: Facilities
4.03(c) - Assumption and Indemnification - Purchase Agreements
5.03(b) - Third Party Indebtedness
5.03(c)(i) - Intercompany Accounts - Europe/South Africa Exceptions
