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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
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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:
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(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 undivided interests in oil, gas or other mineral
rights, puts, calls, straddles, options and other securities of
any kind;
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(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
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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;
(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;
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(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.
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
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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
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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.
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
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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.
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
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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.
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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 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.
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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 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
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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)
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Hub Property - Nitro; (bb) ▇▇▇▇▇▇ Street; (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
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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.
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
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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.
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,
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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.
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66. NYSE: the New York Stock Exchange, Inc.
67. OFFER OF SETTLEMENT: as defined in Section 7.02(c) hereof.
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.
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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.
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 Board of Directors,
as the record date for determining stockholders of Monsanto entitled to
receive the Distribution.
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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 Directors, as the record date for determining
stockholders of Monsanto entitled to vote at the Special Meeting.
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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.
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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 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
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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.
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
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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
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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.
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
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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.
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
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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 June
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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
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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 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;
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(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).
4.04 PROCEDURE FOR INDEMNIFICATION.
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(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
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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.
(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.
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(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 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
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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
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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.
(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,
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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 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).
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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
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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.
(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
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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.
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.
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(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.
Chemicals shall
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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.
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ARTICLE VI
ACCESS TO INFORMATION
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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
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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 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
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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 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:
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(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
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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 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
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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 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.
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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.
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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 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.
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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.
(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.
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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
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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.
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
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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.
(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
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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.
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(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 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
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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, 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
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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).
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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 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
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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 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
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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
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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, 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,
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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 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
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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;
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(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 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.
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(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.
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:
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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: ▇▇▇-▇▇▇-▇▇▇▇
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.
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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
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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. Monsanto Company 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
