EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 19, 1999
AMONG
MONSANTO COMPANY,
MP SUB, INCORPORATED
AND
PHARMACIA & UPJOHN, INC.
TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGER
Section 1.1 The Merger.............................................................................2
Section 1.2 Closing................................................................................2
Section 1.3 Effective Time.........................................................................2
Section 1.4 Effects of the Merger..................................................................2
Section 1.5 Certificate of Incorporation...........................................................3
Section 1.6 By-Laws................................................................................3
Section 1.7 Officers and Directors of Surviving Corporation........................................3
Section 1.8 Effect on Capital Stock................................................................3
Section 1.9 Stock Options and Other Stock Compensation.............................................4
Section 1.10 Certain Adjustments....................................................................5
Section 1.11 Appraisal Rights.......................................................................5
Section 1.12 Transaction Structure..................................................................5
ARTICLE II
EXCHANGE OF CERTIFICATES
Section 2.1 Exchange Fund..........................................................................6
Section 2.2 Exchange Procedures....................................................................6
Section 2.3 Distributions with Respect to Unexchanged Shares.......................................7
Section 2.4 No Further Ownership Rights in PNU Common Stock and PNU Convertible Preferred Stock....7
Section 2.5 No Fractional Shares of Monsanto Common Stock..........................................8
Section 2.6 Termination of Exchange Fund...........................................................8
Section 2.7 No Liability...........................................................................8
Section 2.8 Investment of the Exchange Fund........................................................9
Section 2.9 Lost Certificates......................................................................9
Section 2.10 Withholding Rights.....................................................................9
Section 2.11 Further Assurances.....................................................................9
Section 2.12 Stock Transfer Books...................................................................9
Section 2.13 Affiliates............................................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of PNU.................................................10
(a) Organization, Standing and Power; Subsidiaries..................................10
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(b) Capital Structure...............................................................11
(c) Authority; No Conflicts.........................................................12
(d) Reports and Financial Statements................................................13
(e) Information Supplied............................................................14
(f) Board Approval..................................................................15
(g) Vote Required...................................................................15
(h) Litigation; Compliance with Laws................................................15
(i) Absence of Certain Changes or Events............................................16
(j) Environmental Matters...........................................................16
(k) Intellectual Property...........................................................17
(l) PNU Rights Agreement............................................................17
(m) Brokers or Finders..............................................................18
(n) Opinions of PNU Financial Advisors..............................................18
(o) Accounting Matters..............................................................18
(p) Taxes...........................................................................18
(q) Certain Contracts...............................................................18
(r) Employee Benefits...............................................................18
Section 3.2 Representations and Warranties of Monsanto............................................19
(a) Organization, Standing and Power; Subsidiaries..................................19
(b) Capital Structure...............................................................20
(c) Authority; No Conflicts.........................................................21
(d) Reports and Financial Statements................................................23
(e) Information Supplied............................................................24
(f) Board Approval..................................................................24
(g) Vote Required...................................................................24
(h) Litigation; Compliance with Laws................................................25
(i) Absence of Certain Changes or Events............................................25
(j) Environmental Matters...........................................................25
(k) Intellectual Property...........................................................26
(l) Monsanto Rights Agreement.......................................................26
(m) Brokers or Finders..............................................................26
(n) Opinions of Monsanto Financial Advisors.........................................26
(o) Accounting Matters..............................................................27
(p) Taxes...........................................................................27
(q) Certain Contracts...............................................................27
(r) Employee Benefits...............................................................27
Section 3.3 Representations and Warranties of Monsanto and Merger Sub.............................28
(a) Organization....................................................................28
(b) Corporate Authorization.........................................................28
(c) Non-Contravention...............................................................28
(d) No Business Activities..........................................................28
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Covenants of PNU......................................................................28
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(a) Ordinary Course.................................................................29
(b) Dividends; Changes in Share Capital.............................................29
(c) Issuance of Securities..........................................................30
(d) Governing Documents.............................................................30
(e) No Acquisitions.................................................................30
(f) No Dispositions.................................................................30
(g) Investments; Indebtedness.......................................................31
(h) Pooling; Tax-Free Qualification.................................................31
(i) Compensation....................................................................31
(j) Accounting Methods; Income Tax Elections........................................31
(k) Certain Agreements..............................................................32
(l) PNU Rights Agreement............................................................32
(m) Funding of Benefits.............................................................32
Section 4.2 Covenants of Monsanto.................................................................32
(a) Ordinary Course.................................................................32
(b) Dividends; Changes in Share Capital.............................................33
(c) Issuance of Securities..........................................................33
(d) Governing Documents.............................................................34
(e) No Acquisitions.................................................................34
(f) No Dispositions.................................................................34
(g) Investments; Indebtendess.......................................................34
(h) Pooling; Tax-Free Qualification.................................................35
(i) Compensation....................................................................35
(j) Accounting Methods; Income Tax Elections........................................35
(k) Certain Agreements..............................................................35
(l) Monsanto Rights Agreement.......................................................36
(m) Funding of Benefits.............................................................36
Section 4.3 Acquisitions..........................................................................36
Section 4.4 Governmental Filings..................................................................36
Section 4.5 Control of Other Party's Business.....................................................36
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Preparation of Proxy Statement; Stockholders Meetings.................................37
Section 5.2 Newco Board of Directors; Executives; Name; Headquarters; Monsanto Agribusiness.......38
Section 5.3 Access to Information.................................................................40
Section 5.4 Reasonable Best Efforts...............................................................40
Section 5.5 Acquisition Proposals.................................................................42
Section 5.6 Employee Benefits Matters.............................................................43
(a) Continuation and Comparability of Benefits......................................43
(b) Pre-Existing Limitations; Deductibles; Service Credit...........................44
(c) Grantor Trusts..................................................................45
(d) Pension Plans...................................................................45
(e) Assumption of Employment Agreements.............................................45
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Section 5.7 Fees and Expenses.....................................................................45
Section 5.8 Directors'and Officers'Indemnification and Insurance..................................45
Section 5.9 Public Announcements..................................................................46
Section 5.10 Accounting Matters....................................................................46
Section 5.11 Listing of Shares of Monsanto Common Stock............................................47
Section 5.12 Dividends.............................................................................47
Section 5.13 Affiliates............................................................................47
Section 5.14 Section 16 Matters....................................................................48
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger............................48
(a) Stockholder Approval............................................................48
(b) No Injunctions or Restraints, Illegality........................................48
(c) HSR Act.........................................................................48
(d) EU Antitrust....................................................................48
(e) Governmental and Regulatory Approvals...........................................49
(f) NYSE Listing....................................................................49
(g) Effectiveness of the Form S-4...................................................49
Section 6.2 Additional Conditions to Obligations of PNU...........................................49
(a) Representations and Warranties..................................................49
(b) Performance of Obligations of Monsanto..........................................49
(c) Tax Opinion.....................................................................50
(d) Monsanto Rights Agreement.......................................................50
(e) Governance......................................................................50
Section 6.3 Additional Conditions to Obligations of Monsanto and Merger Sub.......................50
(a) Representations and Warranties..................................................50
(b) Performance of Obligations of PNU...............................................50
(c) Tax Opinion.....................................................................51
(d) PNU Rights Agreement............................................................51
ARTICLE VII
TERMINATION AND AMENDMENT
Section 7.1 Termination...........................................................................51
Section 7.2 Effect of Termination.................................................................52
Section 7.3 Amendment.............................................................................55
Section 7.4 Extension; Waiver.....................................................................55
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations, Warranties and Agreements............................56
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Section 8.2 Notices...............................................................................56
Section 8.3 Interpretation........................................................................57
Section 8.4 Counterparts..........................................................................57
Section 8.5 Entire Agreement; No Third Party Beneficiaries........................................57
Section 8.6 Governing Law.........................................................................57
Section 8.7 Severability..........................................................................57
Section 8.8 Assignment............................................................................58
Section 8.9 Submission to Jurisdiction; Waivers...................................................58
Section 8.10 Enforcement...........................................................................58
Section 8.11 Definitions...........................................................................58
LIST OF EXHIBITS
Exhibit Title
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5.2(e)(1) Form of Charter Amendment
5.2(e)(2) Form of Newco By-Laws
5.13 Form of Affiliate Agreement
6.2(c)(1) Form of PNU Tax Opinion
6.2(c)(2) Form of PNU Representations Letter
6.2(c)(3) Form of Monsanto Representations Letter
6.3(c)(1) Form of Monsanto Tax Opinion
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AGREEMENT AND PLAN OF MERGER, dated as of December 19, 1999 (this
"Agreement"), among Monsanto Company, a Delaware corporation ("Monsanto"), MP
Sub, Incorporated, a Delaware corporation and a direct wholly-owned subsidiary
of Monsanto ("Merger Sub"), and Pharmacia & Upjohn, Inc., a Delaware
corporation ("PNU").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Monsanto and PNU deem it
advisable and in the best interests of each corporation and its respective
stockholders that Monsanto and PNU engage in a business combination as peer
firms in a merger of equals in order to advance the long-term strategic
business interests of Monsanto and PNU;
WHEREAS, the combination of Monsanto and PNU shall be effected by
the terms of this Agreement through a merger as outlined below (the "Merger");
WHEREAS, in furtherance thereof, the respective Boards of Directors
of Monsanto and PNU have approved the Merger, upon the terms and subject to
the conditions set forth in this Agreement, pursuant to which each share of
common stock, par value $0.01 per share, of PNU ("PNU Common Stock") issued
and outstanding immediately prior to the Effective Time (as defined in Section
1.3), other than shares owned or held directly or indirectly by Monsanto or
directly or indirectly by PNU, will be converted into the right to receive
1.19 shares of common stock, par value $2.00 per share, of Monsanto ("Monsanto
Common Stock") as set forth in Section 1.8 and each share of Series A
Convertible Perpetual Preferred Stock, par value $0.01 per share, of PNU ("PNU
Convertible Preferred Stock") issued and outstanding immediately prior to the
Effective Time will be converted into the right to receive one share of a new
series of convertible preferred stock to be issued by Monsanto at the
Effective Time and to be designated as Series A Convertible Perpetual
Preferred Stock ("Monsanto Convertible Preferred Stock") as set forth in
Section 1.8;
WHEREAS, contemporaneously with the execution and delivery
of this Agreement, (i) as a condition and inducement to Monsanto's
willingness to enter into this Agreement and the Monsanto Stock Option
Agreement referred to below, Monsanto and PNU are entering into a Stock Option
Agreement dated as of the date hereof (the "PNU Stock Option Agreement")
pursuant to which PNU is granting to Monsanto an option to purchase shares of
PNU Common Stock and (ii) as a condition and inducement to PNU's willingness
to enter into this Agreement and the PNU Stock Option Agreement, PNU and
Monsanto are entering into a Stock Option Agreement dated as of the date
hereof (the "Monsanto Stock Option Agreement", and together with the PNU
Option Agreement, the "Stock Option Agreements"), pursuant to which Monsanto
is granting to PNU an option to purchase shares of Monsanto Common Stock;
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder; and
WHEREAS, for accounting purposes, it is intended that the Merger
shall be accounted for as a pooling of interests transaction under United
States generally accepted accounting principles ("GAAP"), although such
accounting treatment is not a condition to the consummation of the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement and in the Stock Option Agreements, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Merger Sub shall be merged with and into PNU at
the Effective Time. Following the Merger, the separate corporate existence of
Merger Sub shall cease and PNU shall continue as the surviving corporation
(the "Surviving Corporation").
Section 1.2 Closing. The closing of the Merger and the transactions
contemplated by this Agreement (the "Closing") will take place on the second
Business Day after the satisfaction or waiver (subject to applicable law) of
the conditions (other than conditions that, by their nature, cannot be
satisfied until the Closing Date) set forth in Article VI, unless another time
or date is agreed to in writing by the parties hereto (the actual time and
date of the Closing being referred to herein as the "Closing Date"). The
Closing shall be held at the offices of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, ▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, unless another place is agreed to
in writing by the parties hereto.
Section 1.3 Effective Time. As soon as practicable following the
satisfaction of the conditions set forth in Article VI, at the Closing the
parties shall (i) file a certificate of merger (the "Certificate of Merger")
in such form as is required by and executed in accordance with the relevant
provisions of the DGCL and (ii) make all other filings or recordings required
under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Delaware Secretary of State or at
such subsequent time as Monsanto and PNU shall agree and as shall be specified
in the Certificate of Merger (the date and time the Merger becomes effective
being the "Effective Time").
Section 1.4 Effects of the Merger. At and after the Effective Time,
the Merger will have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all
the property, rights, privileges, powers and franchises of PNU and Merger Sub
shall be vested in the Surviving Corporation, and all debts, liabilities and
duties of PNU and Merger Sub shall become the debts, liabilities and duties of
the Surviving Corporation.
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Section 1.5 Certificate of Incorporation. (a) The certificate of
incorporation of PNU, as in effect immediately prior to the Effective Time,
shall be the certificate of incorporation of the Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law.
Section 1.6 By-Laws. (a) The by-laws of Merger Sub shall be the
by-laws of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
Section 1.7 Officers and Directors of Surviving Corporation. The
officers of PNU as of the Effective Time shall be the officers of the
Surviving Corporation, until the earlier of their resignation or removal or
otherwise ceasing to be an officer or until their respective successors are
duly elected and qualified, as the case may be. The directors of Merger Sub as
of the Effective Time shall become the directors of the Surviving Corporation,
which individuals will serve as directors of the Surviving Corporation until
the earlier of their resignation or removal or otherwise ceasing to be a
director or until their respective successors are duly elected and qualified.
Section 1.8 Effect on Capital Stock. (a) At the Effective Time by
virtue of the Merger and without any action on the part of the holder thereof,
each share of PNU Common Stock issued and outstanding immediately prior to the
Effective Time (other than shares of PNU Common Stock owned by Monsanto or
Merger Sub or held by PNU, all of which shall be canceled as provided in
Section 1.8(d)) shall be converted into the right to receive 1.19 shares (the
"Exchange Ratio") of Monsanto Common Stock (together with any cash in lieu of
fractional shares of Monsanto Common Stock to be paid pursuant to Section 2.5,
the "Common Merger Consideration").
(b) At the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, each share of PNU Convertible
Preferred Stock issued and outstanding immediately prior to the Effective Time
shall, except as provided in Section 1.11 with respect to shares of PNU
Convertible Preferred Stock as to which appraisal rights have been exercised,
be converted into the right to receive one share of Monsanto Convertible
Preferred Stock (the "Preferred Merger Consideration" and together with the
Common Merger Consideration, the "Merger Consideration"). Monsanto shall take
all corporate action necessary to reserve for issuance a sufficient number of
shares of Monsanto Common Stock for delivery upon conversion of the Monsanto
Convertible Preferred Stock.
(c) As a result of the Merger and without any action on the part of
the holders thereof, at the Effective Time, all shares of PNU Common Stock and
PNU Convertible Preferred Stock shall cease to be outstanding and shall be
canceled and retired and shall cease to exist, and each holder of a
certificate or certificates which immediately prior to the Effective Time
represented any such shares of PNU Common Stock ("Common Certificates") or of
PNU Convertible Preferred Stock ("Preferred Certificates" and together with
the Common Certificates, the "Certificates") shall thereafter cease to have
any rights with respect to such shares of PNU Common Stock or PNU Convertible
Preferred Stock, respectively, except as provided herein or by law.
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(d) Each share of PNU Common Stock issued and owned or held by
Monsanto or any of its Subsidiaries or PNU or any of its Subsidiaries at the
Effective Time shall, by virtue of the Merger, cease to be outstanding and
shall be canceled and retired and no stock of Monsanto or other consideration
shall be delivered in exchange therefor.
(e) Each share of common stock of Merger Sub issued and outstanding
immediately prior to the Effective Time, shall remain issued, outstanding and
unchanged as validly issued, fully paid and nonassessable shares of common
stock of the Surviving Corporation as of the Effective Time.
Section 1.9 Stock Options and Other Stock Compensation. (a) On or
prior to the Effective Time, PNU will take all action necessary such that each
PNU Stock Option, each PNU SAR and each PNU Deferred Share (each as defined in
Section 3.1(b)) that was granted pursuant to the PNU Stock Incentive Plans (as
defined in Section 3.1(b)) prior to the Effective Time and which remains
outstanding immediately prior to the Effective Time shall cease to represent a
right with respect to shares of PNU Common Stock and shall be converted, at
the Effective Time, into a right, on the same terms and conditions as were
applicable under the PNU Stock Option, PNU SAR or PNU Deferred Share, as
applicable (but taking into account any changes thereto, including the
acceleration thereof, provided for in the PNU Stock Incentive Plans or in the
terms of such right by reason of this Agreement or the transactions
contemplated hereby), with respect to that number of shares of Monsanto Common
Stock determined by multiplying the number of shares of PNU Common Stock
subject to such PNU Stock Option, PNU SAR or PNU Deferred Share, as
applicable, by the Exchange Ratio, rounded, if necessary, to the nearest whole
share of Monsanto Common Stock, at (in the case of a PNU Stock Option or PNU
SAR) a price per share (rounded to the nearest one-hundredth of a cent) equal
to the per-share exercise price specified in such PNU Stock Option or PNU SAR,
as applicable, divided by the Exchange Ratio; provided, however, that in the
case of any PNU Stock Option to which Section 421 of the Code applies by
reason of its qualification under Section 422 of the Code, the option price,
the number of shares subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner consistent with the
requirements of Section 424(a) of the Code.
(b) As soon as practicable after the Effective Time, Monsanto shall
deliver to the holders of PNU Stock Options, PNU SARs and PNU Deferred Shares
appropriate notices setting forth such holders' rights pursuant to the PNU
Stock Incentive Plans (including that, by virtue of the Merger and pursuant to
the terms of the PNU Stock Incentive Plans, the PNU Stock Options, PNU SARs
and PNU Deferred Shares have become fully vested and exercisable) and the
agreements evidencing the grants of such PNU Stock Options, PNU SARs and PNU
Deferred Shares shall continue in effect on the same terms and conditions
(subject to the adjustments required by this Section 1.9 after giving effect
to the Merger and the terms of the PNU Stock Incentive Plans). To the extent
permitted by law, Monsanto shall comply with the terms of the PNU Stock
Incentive Plans and shall take such reasonable steps as are necessary or
required by, and subject to the provisions of, such PNU Stock Incentive Plans,
to have the PNU Stock
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Options which qualified as incentive stock options prior to the Effective Time
continue to qualify as incentive stock options of Monsanto after the Effective
Time.
(c) Monsanto shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of Monsanto Common Stock for
delivery upon exercise of PNU Stock Options, PNU SARs and PNU Deferred Shares
in accordance with this Section 1.9. Promptly after the Effective Time,
Monsanto shall file a registration statement on Form S-3 or Form S-8, as the
case may be (or any successor or other appropriate forms), with respect to the
shares of Monsanto Common Stock subject to such options, stock appreciation
rights and deferred shares and shall use commercially reasonable efforts to
maintain the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options, stock appreciation rights and
deferred shares remain outstanding. With respect to those individuals who
subsequent to the Merger will be subject to the reporting requirements under
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), where applicable, Monsanto shall administer the PNU Stock
Option Plans in a manner consistent with the exemptions provided by Rule 16b-3
promulgated under the Exchange Act.
Section 1.10 Certain Adjustments. If, between the date of this
Agreement and the Effective Time, the outstanding PNU Common Stock or Monsanto
Common Stock shall have been changed into a different number of shares or
different class by reason of any reclassification, recapitalization, stock
split, reverse stock split, combination or exchange of shares, or a stock
dividend or dividend payable in any other securities shall be declared with a
record date within such period, or any similar event shall have occurred, the
Exchange Ratio shall be appropriately adjusted to provide to the holders of
PNU Common Stock the same economic effect as contemplated by this Agreement
prior to such event.
Section 1.11 Appraisal Rights. Notwithstanding Section 1.8, shares
of PNU Convertible Preferred Stock outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has demanded appraisal for such shares
of PNU Convertible Preferred Stock in accordance with the DGCL shall not be
converted into a right to receive the Preferred Merger Consideration, unless
such holder fails to perfect or withdraws or otherwise loses his right to
appraisal. If after the Effective Time such holder fails to perfect or
withdraws or loses his right to appraisal, such shares of PNU Convertible
Preferred Stock shall be treated as if they had been converted as of the
Effective Time into a right to receive the Preferred Merger Consideration. PNU
shall give Monsanto prompt notice of any demands received by PNU for appraisal
of shares of PNU Convertible Preferred Stock, and Monsanto shall have the
right to participate in all negotiations and proceedings with respect to such
demands. PNU shall not, except with the prior written consent of Monsanto,
make any payment with respect to, or settle or offer to settle, any such
demands.
Section 1.12 Transaction Structure. The parties may, with the
approval of their respective Boards of Directors, at any time prior to the
mailing of the Joint Proxy
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Statement/Prospectus (as defined in Section 5.1)
change the method of effecting the combination between Monsanto and PNU
(including, without limitation, the provisions of this Article I) if and to
the extent the parties agree in writing that such change is necessary,
appropriate or desirable.
ARTICLE II
EXCHANGE OF CERTIFICATES
Section 2.1 Exchange Fund. Prior to the Effective Time, Monsanto
shall appoint a commercial bank or trust company reasonably acceptable to PNU
having net capital of not less than $100,000,000, or a subsidiary thereof, to
act as exchange agent hereunder for the purpose of exchanging Certificates for
the Merger Consideration (the "Exchange Agent"). At or prior to the Effective
Time, Monsanto shall deposit with the Exchange Agent, in trust for the benefit
of holders of shares of PNU Common Stock and PNU Convertible Preferred Stock,
certificates representing the Monsanto Common Stock issuable pursuant to
Section 1.8 in exchange for outstanding shares of PNU Common Stock and
certificates representing the Monsanto Convertible Preferred Stock issuable
pursuant to Section 1.8 in exchange for outstanding shares of PNU Convertible
Preferred Stock. Monsanto agrees to make available to the Exchange Agent from
time to time as needed, cash sufficient to pay cash in lieu of fractional
shares pursuant to Section 2.5 and any dividends and other distributions
pursuant to Section 2.3. Any cash and certificates of Monsanto Common Stock
and Monsanto Convertible Preferred Stock deposited with the Exchange Agent
shall hereinafter be referred to as the "Exchange Fund".
Section 2.2 Exchange Procedures. As soon as reasonably practicable
after the Effective Time, Monsanto shall cause the Exchange Agent to mail to
each holder of a Certificate (i) a letter of transmittal which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent, and which letter shall be in customary form and have such
other provisions as Monsanto may reasonably specify and (ii) instructions for
effecting the surrender of such Certificates in exchange for the applicable
Merger Consideration. Upon surrender of a Certificate to the Exchange Agent
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor (i) in the case of holders
of Common Certificates (A) one or more shares of Monsanto Common Stock (which
shall be in uncertificated book-entry form unless a physical certificate is
requested) representing, in the aggregate, the whole number of shares that
such holder has the right to receive pursuant to Section 1.8 (after taking
into account all shares of PNU Common Stock then held by such holder), and (B)
a check in the amount equal to the cash that such holder has the right to
receive pursuant to the provisions of this Article II, including cash in lieu
of any fractional shares of Monsanto Common Stock pursuant to Section 2.5 and
dividends and other distributions pursuant to Section 2.3 and (ii) in the case
of holders of Preferred Certificates (A) one or more shares of Monsanto
Convertible Preferred Stock (which shall be in uncertificated book-entry form
unless a physical certificate is requested) representing, in the aggregate,
the number of shares that such
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holder has the right to receive pursuant to Section 1.8 and (B) a check in the
amount equal to the cash that such holder has the right to receive pursuant to
the provisions of this Article II, including dividends and other distributions
pursuant to Section 2.3. No interest will be paid or will accrue on any cash
payable pursuant to Section 2.3 or Section 2.5. In the event of a transfer of
ownership of PNU Common Stock or PNU Convertible Preferred Stock which is not
registered in the transfer records of PNU, one or more shares of Monsanto
Common Stock or Monsanto Convertible Preferred Stock, as the case may be,
evidencing, in the aggregate, the proper number of shares of Monsanto Common
Stock or Monsanto Convertible Preferred Stock, as the case may be, a check in
the proper amount of cash in lieu of any fractional shares of Monsanto Common
Stock pursuant to Section 2.5 and any dividends or other distributions to
which such holder is entitled pursuant to Section 2.3, may be issued with
respect to such PNU Common Stock or PNU Convertible Preferred Stock, as the
case may be, to such a transferee if the Certificate representing such shares
is presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
Section 2.3 Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made with respect to shares of
Monsanto Common Stock or Monsanto Convertible Preferred Stock with a record
date after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Monsanto Common Stock or Monsanto
Convertible Preferred Stock, as the case may be, that such holder would be
entitled to receive upon surrender of such Certificate and no cash payment in
lieu of fractional shares of Monsanto Common Stock shall be paid to any such
holder pursuant to Section 2.5 until such holder shall surrender such
Certificate in accordance with Section 2.2. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to such holder of shares of Monsanto Common Stock or Monsanto Convertible
Preferred Stock, as the case may be, issuable in exchange therefor, without
interest, (a) promptly after the time of such surrender, the amount of any
cash payable in lieu of fractional shares of Monsanto Common Stock to which
such holder is entitled pursuant to Section 2.5 and the amount of dividends or
other distributions with a record date after the Effective Time theretofore
paid with respect to such whole shares of Monsanto Common Stock or such shares
of Monsanto Convertible Preferred Stock, as the case may be, and (b) at the
appropriate payment date, the amount of dividends or other distributions with
a record date after the Effective Time but prior to such surrender and a
payment date subsequent to such surrender payable with respect to such shares
of Monsanto Common Stock or Monsanto Convertible Preferred Stock, as the case
may be.
Section 2.4 No Further Ownership Rights in PNU Common Stock and PNU
Convertible Preferred Stock. All shares of Monsanto Common Stock and Monsanto
Convertible Preferred Stock issued and cash paid upon conversion of shares of
PNU Common Stock and PNU Convertible Preferred Stock in accordance with the
terms of Article I and this Article II (including any cash paid pursuant to
Section 2.3 or 2.5) shall be deemed to have been issued or paid in full
satisfaction of all rights pertaining to the shares of PNU Common Stock and
PNU Convertible Preferred Stock.
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Section 2.5 No Fractional Shares of Monsanto Common Stock. (a) No
certificates or scrip or shares of Monsanto Common Stock representing
fractional shares of Monsanto Common Stock or book-entry credit of the same
shall be issued upon the surrender for exchange of Certificates and such
fractional share interests will not entitle the owner thereof to vote or to
have any rights of a shareholder of Monsanto or a holder of shares of Monsanto
Common Stock.
(b) Notwithstanding any other provision of this Agreement, each
holder of shares of PNU Common Stock exchanged pursuant to the Merger who
would otherwise have been entitled to receive a fraction of a share of
Monsanto Common Stock (after taking into account all Certificates delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to the product of (i) such fractional part of a share of Monsanto
Common Stock multiplied by (ii) the closing price for a share of Monsanto
Common Stock on the New York Stock Exchange, Inc. ("NYSE") Composite
Transactions Tape (regular session) on the date of the Effective Time, or if
such date is not a Business Day, the Business Day immediately following the
date on which the Effective Time occurs. As promptly as practicable after the
determination of the amount of cash, if any, to be paid to holders of
fractional interests, the Exchange Agent shall so notify Monsanto, and
Monsanto shall deposit or cause the Surviving Corporation to deposit such
amount with the Exchange Agent and shall cause the Exchange Agent to forward
payments to such holders of fractional interests subject to and in accordance
with the terms hereof.
Section 2.6 Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the holders of Certificates for
six months after the Effective Time shall be delivered to Monsanto or
otherwise on the instruction of Monsanto, and any holders of the Certificates
who have not theretofore complied with this Article II shall thereafter look
only to Monsanto for the Merger Consideration with respect to the shares of
PNU Common Stock or PNU Convertible Preferred Stock, as the case may be,
formerly represented thereby to which such holders are entitled pursuant to
Section 1.8 and Section 2.2, any cash in lieu of fractional shares of Monsanto
Common Stock to which such holders are entitled pursuant to Section 2.5 and
any dividends or distributions with respect to shares of Monsanto Common Stock
or Monsanto Convertible Preferred Stock to which such holders are entitled
pursuant to Section 2.3. Any such portion of the Exchange Fund remaining
unclaimed by holders of shares of PNU Common Stock and PNU Convertible
Preferred Stock five years after the Effective Time (or such earlier date
immediately prior to such time as such amounts would otherwise escheat to or
become property of any Governmental Entity (as defined in Section 3.1(c)(iii))
shall, to the extent permitted by law, become the property of Monsanto free
and clear of any claims or interest of any Person previously entitled thereto.
Section 2.7 No Liability. None of Monsanto, the Surviving
Corporation or the Exchange Agent shall be liable to any Person in respect of
any Merger Consideration from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
-8-
Section 2.8 Investment of the Exchange Fund. The Exchange Agent
shall invest any cash included in the Exchange Fund as directed by Monsanto on
a daily basis. Any interest and other income resulting from such investments
shall promptly be paid to Monsanto.
Section 2.9 Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by Monsanto, the posting by such Person of a bond in such reasonable
amount as Monsanto may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will deliver
in exchange for such lost, stolen or destroyed Certificate the applicable
Merger Consideration with respect to the shares of PNU Common Stock or PNU
Convertible Preferred Stock, as the case may be, formerly represented thereby,
any cash in lieu of fractional shares of Monsanto Common Stock, and unpaid
dividends and distributions on shares of Monsanto Common Stock or Monsanto
Convertible Preferred Stock, as the case may be, deliverable in respect
thereof, pursuant to this Agreement.
Section 2.10 Withholding Rights. Each of the Surviving Corporation
and Monsanto shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of PNU
Common Stock or PNU Convertible Preferred Stock such amounts as it is required
to deduct and withhold with respect to the making of such payment under the
Code and the rules and regulations promulgated thereunder, or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
the Surviving Corporation or Monsanto, as the case may be, such withheld
amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares of PNU Common Stock or PNU Convertible
Preferred Stock, as the case may be, in respect of which such deduction and
withholding was made by the Surviving Corporation or Monsanto, as the case may
be.
Section 2.11 Further Assurances. At and after the Effective Time,
the officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of PNU or Merger Sub, any
deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of PNU or Merger Sub, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties
or assets acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger.
Section 2.12 Stock Transfer Books. The stock transfer books of PNU
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of shares of PNU Common Stock or PNU
Convertible Preferred Stock thereafter on the records of PNU. On or after the
Effective Time, any Certificates presented to the Exchange Agent or Monsanto
for any reason shall be converted into the Merger Consideration with respect
to the shares of PNU Common Stock or PNU Convertible Preferred Stock, as the
case may be, formerly represented thereby, any cash in lieu of fractional
shares of Monsanto Common Stock to which the holders thereof are
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entitled pursuant to Section 2.5 and any dividends or other distributions to
which the holders thereof are entitled pursuant to Section 2.3.
Section 2.13 Affiliates. Notwithstanding anything to the contrary
herein, to the fullest extent permitted by law and pooling of interests
accounting treatment, no certificates representing shares of Monsanto Common
Stock or cash shall be delivered to a Person who may be deemed an "affiliate"
of PNU in accordance with Section 5.13 hereof for purposes of Rule 145 under
the Securities Act of 1933, as amended (the "Securities Act") or, if the
Merger qualifies for pooling of interests accounting treatment under Opinion
16 of the Accounting Principles Board and applicable rules and regulations of
the Securities and Exchange Commission (the "SEC"), for purposes of qualifying
the Merger for pooling of interests accounting treatment until such Person has
executed and delivered a PNU Affiliate Agreement (as defined in Section
5.13(b)) pursuant to Section 5.13.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of PNU. Except as set
forth in the PNU Disclosure Schedule delivered by PNU to Monsanto prior to the
execution of this Agreement (the "PNU Disclosure Schedule") (each section of
which qualifies the correspondingly numbered representation and warranty or
covenant to the extent specified therein) PNU represents and warrants to
Monsanto as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of PNU and each of its Subsidiaries (as defined in
Section 8.11) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation
or organization, has the requisite power and authority to own, lease
and operate its properties and to carry on its business as now being
conducted, except where the failure to be so organized, existing and
in good standing or to have such power and authority would not
reasonably be expected to have a Material Adverse Effect on PNU, and
is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary other
than in such jurisdictions where the failure so to qualify or to be
in good standing would not reasonably be expected to have a Material
Adverse Effect on PNU. The copies of the certificate of incorporation
and by-laws of PNU which were previously furnished or made available
to Monsanto are true, complete and correct copies of such documents
as in effect on the date of this Agreement.
(ii) Exhibit 21 to PNU's Annual Report on Form 10-K for the year
ended December 31, 1998 includes all the Subsidiaries of PNU which
as of the date of this Agreement are Significant Subsidiaries (as
defined in Rule 1-02 of Regulation S-X of the SEC). All the
outstanding shares of capital stock of, or
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other equity interests in, each such Significant Subsidiary have
been validly issued and are fully paid and nonassessable and are
owned directly or indirectly by PNU, free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever (collectively "Liens") and free of any
other restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership
interests). Except as set forth in the PNU SEC Reports (as defined
in Section 3.1(d)), neither PNU nor any of its Subsidiaries directly
or indirectly owns any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for, any
corporation, partnership, joint venture or other business
association or entity (other than Subsidiaries), that is or would
reasonably be expected to be material to PNU and its Subsidiaries
taken as a whole.
(b) Capital Structure.
(i) As of December 16, 1999, the authorized capital stock of PNU
consisted of (A) 1,500,000,000 shares of PNU Common Stock of which
519,388,807 shares were outstanding and 8,353 shares were held in
the treasury of PNU and (B) 100,000,000 shares of Preferred Stock,
par value $0.01 per share, of which (1) 7,500 shares have been
designated as Series A Convertible Perpetual Preferred Stock, par
value $0.01 per share (the "PNU Convertible Preferred Stock"), of
which 6,697.920285 (as of December 15, 1999) shares of PNU
Convertible Preferred Stock were outstanding, and (2) 5,193,888
shares have been authorized as Participating Preferred Stock and
reserved for issuance upon exercise of the rights (the "PNU Rights")
distributed to the holders of PNU Common Stock pursuant to the
Rights Agreement dated as of March 4, 1997 between PNU and ▇▇▇▇▇▇
Trust & Savings Bank, as Rights Agent (the "PNU Rights Agreement").
As of December 16, 1999, PNU had reserved or has available 9,711,984
shares of PNU Common Stock for issuance upon conversion of the PNU
Convertible Preferred Stock. Since December 16, 1999 to the date of
this Agreement, there have been no issuances of shares of the
capital stock of PNU or any other securities of PNU other than
issuances of shares (and accompanying PNU Rights) upon conversion of
the PNU Convertible Preferred Stock or pursuant to options or rights
outstanding as of December 16, 1999 under the PNU Stock Incentive
Plans. All issued and outstanding shares of the capital stock of PNU
are duly authorized, validly issued, fully paid and nonassessable,
and no class of capital stock is entitled to preemptive rights.
There were outstanding as of December 16, 1999 no options, warrants
or other rights to acquire capital stock from PNU other than (x) the
PNU Rights, (y) the PNU Convertible Preferred Stock and (z) options
and other rights representing in the aggregate the right to purchase
no more than 26, 770, 608 shares of PNU Common Stock (collectively,
the "PNU Stock Options") (including stock appreciation rights (the
"PNU SARs") and deferred shares of PNU Common Stock (the "PNU
Deferred Shares")), in each case granted under the Pharmacia &
Upjohn, Inc. Long-Term Incentive Plan, the Pharmacia & Upjohn, Inc.
Equity Compensation Plan and the Pharmacia & Upjohn, Inc. Directors
Equity Compensation and Deferral Plan (collectively, the "PNU Stock
Incentive Plans").
-11-
No options or warrants or other rights to acquire capital stock from
PNU have been issued or granted since December 16, 1999 to the date
of this Agreement.
(ii) No bonds, debentures, notes or other indebtedness of PNU
having the right to vote on any matters on which stockholders of PNU
may vote ("PNU Voting Debt") are issued or outstanding.
(iii) Except for the 12% Senior Convertible Notes of Sugen, Inc.
due 2002 and warrants to acquire $2,656,250 principal amount of such
12% Senior Convertible Notes or as otherwise set forth in this
Section 3.1(b), as of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which PNU or
any of its Subsidiaries is a party or by which any of them is bound
obligating PNU or any of its Subsidiaries to issue, deliver or sell,
or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of PNU or any of its
Subsidiaries or obligating PNU or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking. As
of the date of this Agreement, there are no outstanding obligations
of PNU or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of PNU or any of its
Subsidiaries.
(c) Authority; No Conflicts.
(i) PNU has all requisite corporate power and authority to enter
into this Agreement and the Stock Option Agreements and to
consummate the transactions contemplated hereby and thereby, subject
in the case of the consummation of the Merger to the adoption of
this Agreement by the Required PNU Vote (as defined in Section
3.1(g)). The execution and delivery of this Agreement and the Stock
Option Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of PNU, subject in the case
of the consummation of the Merger to the adoption of this Agreement
by the Required PNU Vote. This Agreement and the Stock Option
Agreements have been duly executed and delivered by PNU and
constitute valid and binding agreements of PNU, enforceable against
it in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally or by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity
or at law).
(ii) The execution and delivery of this Agreement and the Stock
Option Agreements by PNU does not or will not, as the case may be,
and the consummation by PNU of the Merger and the other transactions
contemplated hereby and thereby will not, conflict with, or result
in any violation of, or constitute a default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, amendment, cancellation or acceleration of any
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obligation or the loss of a material benefit under, or the creation
of a lien, pledge, security interest, charge or other encumbrance on
any assets (any such conflict, violation, default, right of
termination, amendment, cancellation or acceleration, loss or
creation, a "Violation") pursuant to: (A) any provision of the
certificate of incorporation or by-laws of PNU, any Significant
Subsidiary of PNU or (B) except as would not reasonably be expected
to have a Material Adverse Effect on PNU or, to the Knowledge of
PNU, Newco following the Merger, subject to obtaining or making the
Necessary Consents (as defined in paragraph (iii) below), any loan
or credit agreement, note, mortgage, bond, indenture, lease, benefit
plan or similar arrangement or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to
PNU, any Subsidiary of PNU or their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational,
national, state, municipal, local or foreign government, any
instrumentality, subdivision, court, administrative agency or
commission or other authority thereof, or any quasi-governmental or
private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority (a "Governmental
Entity"), is required by or with respect to PNU or any Subsidiary of
PNU in connection with the execution and delivery of this Agreement
and the Stock Option Agreements by PNU or the consummation of the
Merger and the other transactions contemplated hereby and thereby,
except for those required under or in relation to (A) the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), (B) state securities or "blue sky" laws (the "Blue
Sky Laws"), (C) the Securities Act, (D) the Exchange Act, (E) the
DGCL with respect to the filing of the Certificate of Merger, (F)
rules and regulations of the NYSE or the Stockholm Stock Exchange,
(G) antitrust or other competition laws of other jurisdictions, and
(H) such consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to make or obtain
would not reasonably be expected to have a Material Adverse Effect
on PNU. Consents, approvals, orders, authorizations, registrations,
declarations and filings required under or in relation to any of the
foregoing clauses (A) through (G) are hereinafter referred to as
"Necessary Consents".
(d) Reports and Financial Statements.
(i) PNU has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other
documents required to be filed by it with the SEC since January 1,
1998 (collectively, including all exhibits thereto, the "PNU SEC
Reports"). No Subsidiary of PNU is required to file any form,
report, registration statement, prospectus or other document with
the SEC. As of their respective dates, none of the PNU SEC Reports
(and, if amended or superseded by a filing prior to the date of this
Agreement or the Closing Date, then on the date of such filing),
contained, and none of the PNU SEC Reports filed subsequent to the
date hereof will contain, any untrue
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statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. Each of the financial statements (including the
related notes) included in the PNU SEC Reports presents fairly, in
all material respects, the consolidated financial position and
consolidated results of operations and cash flows of PNU and its
Subsidiaries as of the respective dates or for the respective
periods set forth therein, all in conformity with GAAP consistently
applied during the periods involved except as otherwise noted
therein, and subject, in the case of the unaudited interim financial
statements, to normal and recurring year-end adjustments that have
not been and are not expected to be material in amount. All of such
PNU SEC Reports, as of their respective dates (and as of the date of
any amendment to the respective PNU SEC Report), complied as to form
in all material respects with the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder.
(ii) Except as disclosed in the PNU SEC Reports filed prior to
the date hereof, since December 31, 1998, PNU and its Subsidiaries
have not incurred any liabilities that are of a nature that would be
required to be disclosed on a balance sheet of PNU and its
Subsidiaries or the footnotes thereto prepared in conformity with
GAAP, other than (A) liabilities incurred in the ordinary course of
business or (B) liabilities that would not, either individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect on PNU.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by PNU
for inclusion or incorporation by reference in (A) the Form S-4 (as
defined in Section 5.1) will, at the time the Form S-4 becomes
effective under the Securities Act or at the time of any
post-effective amendment thereto, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading and (B) the Joint Proxy Statement/Prospectus will, on the
date it is first mailed to Monsanto stockholders or PNU stockholders
or at the time of the Monsanto Stockholders Meeting or the PNU
Stockholders Meeting (each as defined in Section 5.1), contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The Form S-4 and the Joint Proxy
Statement/Prospectus will comply as to form in all material respects
with the requirements of the Exchange Act and the Securities Act and
the rules and regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.1(e), no representation or warranty is made by PNU with respect to
statements made or incorporated by reference in the Form S-4 or the
Joint Proxy Statement/Prospectus based on information supplied by
Monsanto or Merger Sub for inclusion or incorporation by reference
therein.
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(f) Board Approval. The Board of Directors of PNU, by resolutions
duly adopted by unanimous vote at a meeting duly called and held and not
subsequently rescinded or modified in any way (the "PNU Board Approval"), has
duly (i) determined that this Agreement and the Merger are advisable and fair
to and in the best interests of PNU and its stockholders, (ii) approved this
Agreement, the Stock Option Agreements and the Merger and (iii) recommended
that the stockholders of PNU adopt this Agreement and approve the Merger and
directed that this Agreement and the transactions contemplated hereby be
submitted for consideration by PNU's stockholders at the PNU Stockholders
Meeting. The PNU Board Approval constitutes approval of this Agreement, the
PNU Stock Option Agreement and the Merger for purposes of Section 203 of the
DGCL. To the Knowledge of PNU, except for Section 203 of the DGCL (which has
been rendered inapplicable), no state takeover statute is applicable to the
Merger or the other transactions contemplated hereby.
(g) Vote Required. The affirmative vote of the holders of shares of
PNU Common Stock and shares of PNU Convertible Preferred Stock, voting
together as a single class, representing a majority of the total votes
entitled to be cast by the holders of all outstanding shares of PNU Common
Stock and all outstanding shares of PNU Convertible Preferred Stock (the
"Required PNU Vote"), is the only vote of the holders of any class or series
of PNU capital stock necessary to adopt this Agreement and approve the Merger
and the other transactions contemplated by the Merger Agreement.
(h) Litigation; Compliance with Laws.
(i) Except as disclosed in the PNU SEC Reports filed prior to
the date of this Agreement, there is no suit, action or proceeding
pending or, to the Knowledge of PNU, threatened, against or
affecting PNU or any Subsidiary of PNU having, or which would
reasonably be expected to have a Material Adverse Effect on PNU, nor
is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against PNU or any
Subsidiary of PNU having, or which reasonably would be expected to
have a Material Adverse Effect on PNU.
(ii) Except as disclosed in the PNU SEC Reports filed prior to
the date of this Agreement and except as would not reasonably be
expected to have a Material Adverse Effect on PNU, PNU and its
Subsidiaries hold all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities which are
necessary for the operation of the businesses of PNU and its
Subsidiaries, taken as a whole (the "PNU Permits"). PNU and its
Subsidiaries are in compliance with the terms of the PNU Permits,
except where the failure so to comply would not reasonably be
expected to have a Material Adverse Effect on PNU. Except as
disclosed in the PNU SEC Reports filed prior to the date of this
Agreement, the businesses of PNU and its Subsidiaries are not being
conducted in violation of, and PNU has not received any notices of
violations with respect to, any law, ordinance or regulation of any
Governmental Entity, except for possible violations which would not
reasonably be expected to have a Material Adverse Effect on PNU.
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(i) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement or the transactions
contemplated hereby, except as disclosed in the PNU SEC Reports filed prior to
the date of this Agreement, and except as permitted by Section 4.1, since
December 31, 1998, PNU and its Subsidiaries have conducted their business only
in the ordinary course in all material respects and there has not been (i) any
change, circumstance or event which has had, or would reasonably be expected
to have, a Material Adverse Effect on PNU, (ii) any declaration, setting aside
or payment of any dividend or other distribution with respect to its capital
stock, other than regular quarterly cash dividends not exceeding $0.27 with
respect to each share of PNU Common Stock and $629.69 with respect to each
share of PNU Convertible Preferred Stock, (iii) any split, combination or
reclassification of PNU's capital stock or any issuance of or the
authorization of any issuance of any other securities in respect of, in lieu
of or in substitution for, shares of its capital stock, or (iv) any material
change in its accounting policies.
(j) Environmental Matters. Except as would not reasonably be expected
to have a Material Adverse Effect on PNU and except as disclosed in
the PNU SEC Reports filed prior to the date of this Agreement (i) the
operations of PNU and its Subsidiaries have been and are in compliance with
all Environmental Laws and with all licenses required by Environmental Laws
(as defined below), (ii) there are no pending or, to the Knowledge of PNU,
threatened, actions, suits, claims, investigations or other proceedings
(collectively, "Actions") under or pursuant to Environmental Laws against PNU
or its Subsidiaries or involving any real property currently or, to the
Knowledge of PNU, formerly owned, operated or leased by PNU or its
Subsidiaries and (iii) PNU and its Subsidiaries are not subject to any
Environmental Liabilities (as defined below), and, to the Knowledge of PNU, no
facts, circumstances or conditions relating to, arising from, associated with
or attributable to any real property currently or, to the Knowledge of PNU,
formerly owned, operated or leased by PNU or its Subsidiaries or operations
thereon would reasonably be expected to result in Environmental Liabilities.
As used in this Agreement, "Environmental Laws" means any and all
foreign, federal, state, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decisions, injunctions, orders,
decrees, requirements of any Governmental Entity, any and all common law
requirements, rules and bases of liability regulating, relating to or imposing
liability or standards of conduct concerning pollution, Hazardous Materials or
protection of human health, safety or the environment, as in effect on or
prior to the Closing Date and includes the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the
Clean Water Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 33 U.S.C.
Section 2601 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.,
Section 136 et seq., Occupational Safety and Health Act 29 U.S.C. Section 651
et seq. and the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq., as
such laws have been amended or supplemented, and the regulations promulgated
pursuant thereto, and all analogous state or local statutes. As used in this
Agreement, "Environmental Liabilities" with respect to any person means
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any and all liabilities of or relating to such person or any of its
Subsidiaries (including any entity which is, in whole or in part, a
predecessor of such person or any of such Subsidiaries), whether vested or
unvested, contingent or fixed, actual or potential, known or unknown, which
(i) arise under or relate to matters covered by Environmental Laws and (ii)
relate to actions occurring or conditions existing on or prior to the Closing
Date. As used in this Agreement, "Hazardous Materials" means any hazardous or
toxic substances, materials or wastes, defined, listed, classified or
regulated as such in or under any Environmental Laws and which includes
petroleum, petroleum products, friable asbestos, urea formaldehyde and
polychlorinated biphenyls.
(k) Intellectual Property. Except as would not reasonably be
expected to have a Material Adverse Effect on PNU and except as disclosed in
the PNU SEC Reports filed prior to the date of the Agreement, to the Knowledge
of PNU: (a) PNU and each of its Subsidiaries owns, or is licensed to use (in
each case, free and clear of any liens), all Intellectual Property (as defined
below) used in or necessary for the conduct of its business as currently
conducted; (b) the use of any Intellectual Property by PNU and its
Subsidiaries does not infringe on or otherwise violate the rights of any
Person and is in accordance with any applicable license pursuant to which PNU
or any Subsidiary acquired the right to use any Intellectual Property; (c) no
Person is challenging, infringing on or otherwise violating any right of PNU
or any of its Subsidiaries with respect to any Intellectual Property owned by
and/or licensed to PNU or its Subsidiaries; and (d) neither PNU nor any of its
Subsidiaries has received any written notice of any pending claim with respect
to any Intellectual Property used by PNU and its Subsidiaries and no
Intellectual Property owned and/or licensed by PNU or its Subsidiaries is
being used or enforced in a manner that would result in the abandonment,
cancellation or unenforceability of such Intellectual Property. For purposes
of this Agreement, "Intellectual Property" shall mean trademarks, service
marks, brand names, certification marks, trade dress and other indications of
origin, the goodwill associated with the foregoing and registrations in any
jurisdiction of, and applications in any jurisdiction to register, the
foregoing, including any extension, modification or renewal of any such
registration or application; inventions, discoveries and ideas, whether
patentable or not, in any jurisdiction; patents, applications for patents
(including, without limitation, divisions, continuations, continuations in
part and renewal applications), and any renewals, extensions or reissues
thereof, in any jurisdiction; nonpublic information, trade secrets and
confidential information and rights in any jurisdiction to limit the use or
disclosure thereof by any person; writings and other works, whether
copyrightable or not, in any jurisdiction; and registrations or applications
for registration of copyrights in any jurisdiction, and any renewals or
extensions thereof; any similar intellectual property or proprietary rights.
(l) PNU Rights Agreement. The Board of Directors of PNU has taken
the requisite action such that none of Monsanto, Merger Sub or any of their
respective affiliates shall become an "Acquiring Person", and that no "Stock
Acquisition Date" or "Separation Time" (as such terms are defined in the PNU
Rights Agreement) will occur, by reason of the approval, execution or delivery
of this Agreement, the PNU Stock Option Agreement or the consummation of the
transactions contemplated hereby and thereby.
-17-
(m) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of PNU, except Bear, ▇▇▇▇▇▇▇ & Co. Inc. and
▇.▇. ▇▇▇▇▇▇ & Co. Incorporated (the "PNU Financial Advisors"), whose fees and
expenses will be paid by PNU in accordance with PNU's agreements with such
firms, copies of which have been provided to Monsanto.
(n) Opinions of PNU Financial Advisors. PNU has received the
opinions of the PNU Financial Advisors, dated the date of this Agreement, to
the effect that, as of such date, the Exchange Ratio is fair, from a financial
point of view, to PNU's stockholders, copies of which opinions will be made
available to Monsanto.
(o) Accounting Matters. To the Knowledge of PNU as of the date of
this Agreement, neither PNU nor any of its affiliates has taken or has agreed
to take any action on or prior to the date of this Agreement that would
preclude PNU's ability to be a party in a business combination to be accounted
for as a pooling of interests.
(p) Taxes. Each of PNU and its Subsidiaries has filed all Tax
Returns required to have been filed (or extensions have been duly obtained)
and has paid all Taxes required to have been paid by it, except where failure
to file such Tax Returns or pay such Taxes would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect on PNU. For purposes
of this Agreement: (i) "Tax" (and, with correlative meaning, "Taxes") means
any federal, state, local or foreign income, gross receipts, property, sales,
use, license, excise, franchise, employment, payroll, withholding, alternative
or add on minimum, ad valorem, transfer or excise tax, or any other tax,
custom, duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, imposed by any governmental
authority and (ii) "Tax Return" means any return, report or similar statement
required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
(q) Certain Contracts. As of the date hereof, except as set forth in
the PNU SEC Reports filed prior to the date of this Agreement, neither PNU nor
any of its Subsidiaries is a party to or bound by (i) any "material contract"
(as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) or
(ii) any non-competition agreement or any other agreement or arrangement that
limits or otherwise restricts PNU or any of its Subsidiaries or any of their
respective affiliates or any successor thereto, or that would, after the
Effective Time, to the Knowledge of PNU, limit or restrict Newco or any of its
affiliates (including the Surviving Corporation) or any successor thereto,
from engaging or competing in any line of business or in any geographic area,
which agreement or arrangement would reasonably be expected to have a Material
Adverse Effect on Newco and its Subsidiaries (including the Surviving
Corporation and its Subsidiaries), taken together, after giving effect to the
Merger.
(r) Employee Benefits. (i) With respect to each PNU Plan, except for
PNU Plans the liabilities under which are reflected in the financial
statements included in
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the PNU SEC Reports or which, individually or in the aggregate, would not have
a Material Adverse Effect on PNU, PNU has made available to Monsanto a true,
correct and complete copy of: (i) all plan documents, trust agreements, and
insurance contracts and other funding vehicles; (ii) the most recent Annual
Report (Form 5500 Series) and accompanying schedule, if any; (iii) the current
summary plan description and any material modifications thereto, if any (in
each case, whether or not required to be furnished under ERISA); (iv) the most
recent annual financial report, if any; (v) the most recent actuarial report,
if any; and (vi) the most recent determination letter from the IRS, if any.
(ii) With respect to each PNU Employee Benefit Plan, PNU
and its Subsidiaries have complied, and are now in compliance, with all
provisions of ERISA, the Code and all other laws and regulations applicable to
such PNU Employee Benefit Plans and each PNU Employee Benefit Plan has been
administered in accordance with its terms, in each case except as would not
have a Material Adverse Effect on PNU. Each PNU Employee Benefit Plan that is
required by ERISA to be funded is fully funded in accordance with reasonable
actuarial assumptions except as would not have a Material Adverse Effect on
PNU.
(iii) All PNU Employee Benefit Plans subject to the laws
of any jurisdiction outside of the United States (A) have been maintained in
accordance with all applicable requirements, (B) if they are intended to
qualify for special tax treatment meet all requirements for such treatment,
and (C) if they are intended to be funded and/or book-reserved are fully
funded and/or book-reserved, as appropriate, based upon reasonable actuarial
assumptions, in each case except as would not have a Material Adverse Effect
on PNU.
Section 3.2 Representations and Warranties of Monsanto. Except as
set forth in the Monsanto Disclosure Schedule delivered by Monsanto to PNU
prior to the execution of this Agreement (the "Monsanto Disclosure Schedule")
(each section of which qualifies the correspondingly numbered representation
and warranty or covenant to the extent specified therein) (and, if Monsanto
has divested any of the Monsanto Nutrition and Consumer Businesses (as defined
in Section 8.11) prior to the Closing, except in respect of or to the extent
relating to (i) the business or assets of the Monsanto Nutrition and Consumer
Businesses which prior to the Closing have been divested or (ii) the
liabilities of the divested Monsanto Nutrition and Consumer Businesses which
are not retained, contingently or otherwise, by Monsanto or any of its
Subsidiaries as of the Closing Date, as to which Monsanto makes no
representations or warranties), Monsanto represents and warrants to PNU as
follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of Monsanto and each of its Subsidiaries is a
corporation or a limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the requisite power and authority
to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so
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organized, existing and in good standing or to have such power and
authority would not reasonably be expected to have a Material
Adverse Effect on Monsanto and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes
such qualification necessary other than in such jurisdictions where
the failure so to qualify or to be in good standing would not
reasonably be expected to have a Material Adverse Effect on
Monsanto. The copies of the certificate of incorporation and by-laws
of Monsanto which were previously furnished or made available to PNU
are true, complete and correct copies of such documents as in effect
on the date of this Agreement.
(ii) Exhibit 21 to Monsanto's Annual Report on Form 10-K for the
year ended December 31, 1998 includes all the Subsidiaries of
Monsanto which as of the date of this Agreement are Significant
Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the SEC).
All the outstanding shares of capital stock of, or other equity
interests in, each such Significant Subsidiary have been validly
issued and are fully paid and nonassessable and are owned directly
or indirectly by Monsanto, free and clear of all Liens and free of
any other restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other
ownership interests). Except as set forth in the Monsanto SEC
Reports (as defined in Section 3.2(d)), neither Monsanto nor any of
its Subsidiaries directly or indirectly owns any equity or similar
interest in, or any interest convertible into or exchangeable or
exercisable for, any corporation, partnership, joint venture or
other business association or entity (other than Subsidiaries), that
is or would reasonably be expected to be material to Monsanto and
its Subsidiaries taken as a whole.
(b) Capital Structure.
(i) As of December 13, 1999, the authorized capital stock of
Monsanto consisted of (A) 1,000,000,000 shares of Monsanto Common
Stock, of which 636,072,551 shares were outstanding and 210,854,669
shares were held in the treasury of Monsanto (of which 420,880
shares were held in the treasury pursuant to the Monsanto Employee
Stock Purchase Plan) and (B) 10,000,000 shares of Preferred Stock,
without par value ("Monsanto Preferred Stock"), none of which were
outstanding and 700,000 shares of which have been designated Series
A Junior Participating Preferred Stock and reserved for issuance
upon exercise of the rights (the "Monsanto Rights") distributed to
the holders of Monsanto Common Stock pursuant to the Rights
Agreement dated as of January 26, 1990, between Monsanto and First
Chicago Trust Company as successor to First National Bank of Boston,
as Rights Agent, as amended (the "Monsanto Rights Agreement"). Since
December 13, 1999 to the date of this Agreement, there have been no
issuances of shares of the capital stock of Monsanto or any other
securities of Monsanto other than issuances of shares (and
accompanying Monsanto Rights) pursuant to options or rights
outstanding as of December 13, 1999 under the Monsanto Stock Option
Plans. All issued and outstanding shares of the capital stock of
Monsanto are duly authorized, validly issued, fully paid and
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nonassessable, and no class of capital stock is entitled to
preemptive rights. There were outstanding as of December 13, 1999 no
options, warrants or other rights to acquire capital stock from
Monsanto other than (x) the Monsanto Rights, (y) the 6.50%
Adjustable Conversion-rate Equity Security Units and (z) options
representing in the aggregate the right to purchase no more than
99,134,339 shares of Monsanto Common Stock (collectively, the
"Monsanto Stock Options") under the Monsanto Company Non-Employee
Director Equity Incentive Compensation Plan, the ▇▇▇▇▇▇ Monsanto
Stock Option Plan of 1986, the Monsanto Management Incentive Plan of
1988/II, the Monsanto Management Incentive Plan of 1988/I, the
NutraSweet/Monsanto Stock Plan of 1991, the Monsanto Management
Incentive Plan of 1994, the ▇▇▇▇▇▇/Monsanto Stock Plan of 1994, the
NutraSweet/Monsanto Stock Plan of 1994, the Monsanto Management
Incentive Plan of 1996 and the Monsanto Shared Success Option Plan,
as each such plan has been amended (collectively, the "Monsanto
Stock Option Plans"). No options or warrants or other rights to
acquire capital stock from Monsanto have been issued or granted
since December 13, 1999 to the date of this Agreement. References in
this Agreement to the Monsanto Rights shall be deemed to include the
rights issued pursuant to the Rights Agreement, dated as of December
19, 1999, between Monsanto and EquiServe Trust Company N.A., as
Rights Agent (the "New Monsanto Rights Agreement"), in substantially
the form previously provided to PNU.
(ii) No bonds, debentures, notes or other indebtedness of
Monsanto having the right to vote on any matters on which
stockholders may vote ("Monsanto Voting Debt") are issued or
outstanding.
(iii) Except as otherwise set forth in this Section 3.2(b) and as
contemplated by Section 1.8 and Section 1.9, as of the date of this
Agreement, there are no securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any
kind to which Monsanto or any of its Subsidiaries is a party or by
which any of them is bound obligating Monsanto or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other
voting securities of Monsanto or any of its Subsidiaries or
obligating Monsanto or any of its Subsidiaries to issue, grant,
extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. As of the
date of this Agreement, there are no outstanding obligations of
Monsanto or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of Monsanto or any of
its Subsidiaries.
(c) Authority; No Conflicts.
(i) Monsanto has all requisite corporate power and authority to
enter into this Agreement and the Stock Option Agreements and to
consummate the transactions contemplated hereby and thereby,
subject, (A) in the case of the issuance of the shares of Monsanto
Common Stock to be issued in the Merger (the "Share Issuance"), (1)
to the approval by the stockholders of Monsanto, by the
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holders of a majority of the outstanding shares of Monsanto Common
Stock, of an amendment to the Restated Certificate of Incorporation
of Monsanto (i) to increase the number of authorized shares of
Monsanto Common Stock to 3 billion, (ii) to change the par value of
the Monsanto Preferred Stock to $0.01 per share, (iii) to remove the
voting limitations per share of Monsanto Preferred Stock and (iv) to
change the name of Monsanto at the Effective Time to a new name to
be mutually agreed by Monsanto and PNU prior to mailing the Joint
Proxy Statement/Prospectus (the "Charter Amendment") and (2) to the
approval by the stockholders of Monsanto, by a majority of the votes
cast at the Monsanto Stockholders Meeting (as defined in Section
5.1(b)), of the Share Issuance (collectively, the "Required Monsanto
Votes") and the filing of a related Certificate of Amendment with
the Secretary of State of the State of Delaware and (ii) in the case
of the issuance of Monsanto Convertible Preferred Stock to be issued
in the Merger (the "Preferred Share Issuance"), to the filing of a
Certificate of Designations of the Monsanto Convertible Preferred
Stock (the "Monsanto Certificate of Designations") with the
Secretary of State of the State of Delaware. The execution and
delivery of this Agreement and the Stock Option Agreements and the
consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the
part of Monsanto, subject, in the case of the Share Issuance, to the
approval by the stockholders of Monsanto of the Share Issuance and
the Charter Amendment by the Required Monsanto Votes and in the case
of the Preferred Share Issuance, to the filing of the Monsanto
Certificate of Designations. This Agreement and the Stock Option
Agreements have been duly executed and delivered by Monsanto and
constitute valid and binding agreements of Monsanto, enforceable
against it in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally or by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity
or at law).
(ii) The execution and delivery of this Agreement and the Stock
Option Agreements by Monsanto does not or will not, as the case may
be, and the consummation by Monsanto of the Merger and the other
transactions contemplated hereby and thereby will not, conflict
with, or result in a Violation pursuant to: (A) any provision of the
certificate of incorporation or by-laws of Monsanto or any
Significant Subsidiary of Monsanto or (B) except as would not
reasonably be expected to have a Material Adverse Effect on Monsanto
or, to the Knowledge of Monsanto, Newco following the Merger,
subject to obtaining or making the Necessary Consents, any loan or
credit agreement, note, mortgage, bond, indenture, lease, benefit
plan or similar arrangement or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to
Monsanto, any Subsidiary of Monsanto or their respective properties
or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to Monsanto or any Subsidiary of
Monsanto in connection with the
-22-
execution and delivery of this Agreement and the Stock Option
Agreements by Monsanto or the consummation of the Merger and the
other transactions contemplated hereby and thereby, except the
Necessary Consents, the filing of the Charter Amendment and the
Monsanto Certificate of Designations under the DGCL and such
consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to make or obtain
would not reasonably be expected to have a Material Adverse Effect
on Monsanto.
(d) Reports and Financial Statements.
(i) Monsanto has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other
documents required to be filed by it with the SEC since January 1,
1998 (collectively, including all exhibits thereto, the "Monsanto
SEC Reports"). No Subsidiary of Monsanto is required to file any
form, report, registration statement or prospectus or other document
with the SEC. As of their respective dates, none of the Monsanto SEC
Reports (and, if amended or superseded by a filing prior to the date
of this Agreement or the Closing Date, then on the date of such
filing), contained, and none of the Monsanto SEC Reports filed
subsequent to the date hereof will contain, any untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
Each of the financial statements (including the related notes)
included in the Monsanto SEC Reports presents fairly, in all
material respects, the consolidated financial position and
consolidated results of operations and cash flows of Monsanto and
its Subsidiaries as of the respective dates or for the respective
periods set forth therein, all in conformity with GAAP consistently
applied during the periods involved except as otherwise noted
therein, and subject, in the case of the unaudited interim financial
statements, to normal and recurring year-end adjustments that have
not been and are not expected to be material in amount. All of such
Monsanto SEC Reports, as of their respective dates (and as of the
date of any amendment to the respective Monsanto SEC Report),
complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder.
(ii) Except as disclosed in the Monsanto SEC Reports filed prior
to the date hereof, since December 31, 1998, Monsanto and its
Subsidiaries have not incurred any liabilities that are of a nature
that would be required to be disclosed on a balance sheet of
Monsanto and its Subsidiaries or the footnotes thereto prepared in
conformity with GAAP, other than (A) liabilities incurred in the
ordinary course of business or (B) liabilities that would not,
either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Monsanto.
-23-
(e) Information Supplied.
(i) None of the information supplied or to be supplied by
Monsanto for inclusion or incorporation by reference in (A) the Form
S-4 will, at the time the Form S-4 becomes effective under the
Securities Act or at the time of any post-effective amendment
thereto, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and (B) the Joint
Proxy Statement/Prospectus will, on the date it is first mailed to
Monsanto stockholders or PNU stockholders or at the time of the
Monsanto Stockholders Meeting or the PNU Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading. The Form S-4 and the Joint
Proxy Statement/Prospectus will comply as to form in all material
respects with the requirements of the Exchange Act and the
Securities Act and the rules and regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.2(e), no representation or warranty is made by Monsanto with
respect to statements made or incorporated by reference in the Form
S-4 or the Joint Proxy Statement/Prospectus based on information
supplied by PNU for inclusion or incorporation by reference therein.
(f) Board Approval. The Board of Directors of Monsanto, by resolutions
duly adopted by unanimous vote at a meeting duly called and held and not
subsequently rescinded or modified in any way (the "Monsanto Board Approval"),
has duly (i) determined that this Agreement and the Merger are advisable and
fair to and in the best interests of Monsanto and its stockholders, (ii)
approved this Agreement, the Stock Option Agreements, the Merger, the
Certificate of Designations, the Charter Amendment and the Share Issuance and
(iii) recommended that the stockholders of Monsanto approve the Share Issuance
and the Charter Amendment and directed that the Share Issuance and the Charter
Amendment be submitted for consideration by Monsanto's stockholders at the
Monsanto Stockholders Meeting. The Monsanto Board Approval constitutes
approval of this Agreement, the Monsanto Stock Option Agreement and the Merger
for purposes of Section 203 of the DGCL. To the Knowledge of Monsanto, except
for Section 203 of the DGCL (which has been rendered inapplicable), no state
takeover statute is applicable to the Merger or the other transactions
contemplated hereby.
(g) Vote Required. The Required Monsanto Votes are the only votes of
the holders of any class or series of Monsanto capital stock necessary to
adopt this Agreement and approve the transactions contemplated hereby.
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(h) Litigation; Compliance with Laws.
(i) Except as disclosed in the Monsanto SEC Reports filed prior
to the date of this Agreement, there is no suit, action or
proceeding pending or, to the Knowledge of Monsanto, threatened,
against or affecting Monsanto or any Subsidiary of Monsanto having,
or which would reasonably be expected to have a Material Adverse
Effect on Monsanto, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding
against Monsanto or any Subsidiary of Monsanto having, or which
reasonably would be expected to have a Material Adverse Effect on
Monsanto.
(ii) Except as disclosed in the Monsanto SEC Reports filed prior
to the date of the Agreement and except as would not reasonably be
expected to have a Material Adverse Effect on Monsanto, Monsanto and
its Subsidiaries hold all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities necessary for the
operation of the businesses of Monsanto and its Subsidiaries, taken
as a whole (the "Monsanto Permits"). Monsanto and its Subsidiaries
are in compliance with the terms of the Monsanto Permits, except
where the failure so to comply would not reasonably be expected to
have a Material Adverse Effect on Monsanto. Except as disclosed in
the Monsanto SEC Reports filed prior to the date of this Agreement,
the businesses of Monsanto and its Subsidiaries are not being
conducted in violation of, and Monsanto has not received any notices
of violations with respect to, any law, ordinance or regulation of
any Governmental Entity, except for possible violations which would
not reasonably be expected to have a Material Adverse Effect on
Monsanto.
(i) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby, except as disclosed in the Monsanto SEC Reports filed prior to the
date of this Agreement, and except as permitted by Section 4.2, since December
31, 1998, Monsanto and its Subsidiaries have conducted their business only in
the ordinary course in all material respects and there has not been (i) any
change, circumstance or event which has had, or would reasonably be expected
to have, a Material Adverse Effect on Monsanto, (ii) any declaration, setting
aside or payment of any dividend or other distribution with respect to its
capital stock, other than regular quarterly cash dividends not exceeding $0.03
with respect to each share of Monsanto Common Stock, (iii) any split,
combination or reclassification of Monsanto's capital stock or any issuance of
or the authorization of any issuance of any other securities in respect of, in
lieu of or in substitution for, shares of its capital stock, or (iv) any
material change in its accounting policies.
(j) Environmental Matters. Except as would not reasonably be expected
to have a Material Adverse Effect on Monsanto and except as disclosed in the
Monsanto SEC Reports filed prior to the date of this Agreement, (i) the
operations of Monsanto and its Subsidiaries have been and are in compliance
with all Environmental Laws and with all licenses required by Environmental
Laws, (ii) there are no pending or, to the Knowledge of Monsanto, threatened,
Actions under or pursuant to Environmental
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Laws against Monsanto or its Subsidiaries or involving any real property
currently or, to the Knowledge of Monsanto, formerly owned, operated or leased
by Monsanto or its Subsidiaries and (iii) Monsanto and its Subsidiaries are
not subject to any Environmental Liabilities and, to the Knowledge of
Monsanto, no facts, circumstances or conditions relating to, arising from,
associated with or attributable to any real property currently or, to the
Knowledge of Monsanto, formerly owned, operated or leased by Monsanto or its
Subsidiaries or operations thereon would reasonably be expected to result in
Environmental Liabilities.
(k) Intellectual Property. Except as would not reasonably be expected
to have a Material Adverse Effect on Monsanto and except as disclosed in the
Monsanto SEC Reports filed prior to the date of this Agreement, to the
Knowledge of Monsanto, (a) Monsanto and each of its Subsidiaries owns, or is
licensed to use (in each case, free and clear of any liens), all Intellectual
Property used in or necessary for the conduct of its business as currently
conducted; (b) the use of any Intellectual Property by Monsanto and its
Subsidiaries does not infringe on or otherwise violate the rights of any
Person and is in accordance with any applicable license pursuant to which
Monsanto or any Subsidiary acquired the right to use any Intellectual
Property; (c) no Person is challenging, infringing on or otherwise violating
any right of Monsanto or any of its Subsidiaries with respect to any
Intellectual Property owned by and/or licensed to Monsanto or its
Subsidiaries; and (d) neither Monsanto nor any of its Subsidiaries has
received any written notice of any pending claim with respect to any
Intellectual Property used by Monsanto and its Subsidiaries and no
Intellectual Property owned and/or licensed by Monsanto or its Subsidiaries is
being used or enforced in a manner that would result in the abandonment,
cancellation or unenforceability of such Intellectual Property.
(l) Monsanto Rights Agreement. The Board of Directors of Monsanto has
approved the New Monsanto Rights Agreement. Pursuant to the terms of the
Rights Agreement and the New Monsanto Rights Agreement, none of PNU, Merger
Sub or any of their respective affiliates shall become an "Acquiring Person",
and no "Share Acquisition Date" or "Distribution Date" (as such terms are
defined in the Monsanto Rights Agreement and the New Monsanto Rights
Agreement) will occur, by reason of the approval, execution or delivery of
this Agreement, the Monsanto Stock Option Agreement or the consummation of the
transactions contemplated hereby and thereby.
(m) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement, based upon
arrangements made by or on behalf of Monsanto except ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co. Incorporated (the "Monsanto Financial
Advisors"), whose fees and expenses will be paid by Monsanto in accordance
with Monsanto's agreements with such firms, copies of which have been provided
to PNU.
(n) Opinions of Monsanto Financial Advisors. Monsanto has received
the opinions of the Monsanto Financial Advisors, dated the date of this
Agreement, to the
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effect that, as of such date, the Exchange Ratio is fair, from a financial
point of view, to Monsanto, copies of which opinions will be made available to
PNU.
(o) Accounting Matters. To the Knowledge of Monsanto as of the date
of this Agreement, neither Monsanto nor any or its affiliates has taken or
agreed to take any action on or prior to the date of this Agreement that would
prevent Monsanto from accounting for the Merger as a pooling of interests.
(p) Taxes. Each of Monsanto and its Subsidiaries has filed all Tax
Returns required to have been filed (or extensions have been duly obtained)
and has paid all Taxes required to have been paid by it, except where failure
to file such Tax Returns or pay such Taxes would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect on Monsanto.
(q) Certain Contracts. As of the date hereof, except as set forth in
the Monsanto SEC Reports filed prior to the date of this Agreement, neither
Monsanto nor any of its Subsidiaries is a party to or bound by (i) any
"material contract" (as such term is defined in Item 601(b)(10) of Regulation
S-K of the SEC) or (ii) any non-competition agreement or any other agreement
or arrangement that limits or otherwise restricts Monsanto or any of its
Subsidiaries or any of their respective affiliates or any successor thereto or
that would, after the Effective Time, to the Knowledge of Monsanto, limit or
restrict Newco or any of its affiliates (including the Surviving Corporation)
or any successor thereto, from engaging or competing in any line of business
or in any geographic area, which agreement or arrangement would reasonably be
expected to have a Material Adverse Effect on Newco and its Subsidiaries
(including the Surviving Corporation and its Subsidiaries), taken together,
after giving effect to the Merger.
(r) Employee Benefits. (i) With respect to each Monsanto Plan, except
for Monsanto Plans the liabilities under which are reflected in the financial
statements included in the Monsanto SEC Reports or which, individually or in
the aggregate, would not have a Material Adverse Effect, Monsanto has made
available to PNU a true, correct and complete copy of: (i) all plan documents,
trust agreements, and insurance contracts and other funding vehicles; (ii) the
most recent Annual Report (Form 5500 Series) and accompanying schedule, if
any; (iii) the current summary plan description and any material modifications
thereto, if any (in each case, whether or not required to be furnished under
ERISA); (iv) the most recent annual financial report, if any; (v) the most
recent actuarial report, if any; and (vi) the most recent determination letter
from the IRS, if any.
(ii) With respect to each Monsanto Employee Benefit Plan,
Monsanto and its Subsidiaries have complied, and are now in compliance, with
all provisions of ERISA, the Code and all other laws and regulations
applicable to such Monsanto Employee Benefit Plans and each Monsanto Employee
Benefit Plan has been administered in accordance with its terms, in each case
except as would not have a Material Adverse Effect on Monsanto. Each Monsanto
Employee Benefit Plan that is required by ERISA to be funded is fully funded
in accordance with reasonable actuarial assumptions, except as would not have
a Material Adverse Effect on Monsanto.
-27-
(iii) All Monsanto Employee Benefit Plans subject to the laws of
any jurisdiction outside of the United States (A) have been maintained
in accordance with all applicable requirements, (B) if they are intended to
qualify for special tax treatment meet all requirements for such treatment,
and (C) if they are intended to be funded and/or book-reserved are fully
funded and/or book-reserved, as appropriate, based upon reasonable actuarial
assumptions, in each case except as would not have a Material Adverse Effect
on Monsanto.
Section 3.3 Representations and Warranties of Monsanto and Merger Sub.
Monsanto and Merger Sub represent and warrant to Monsanto as follows:
(a) Organization. Merger Sub is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware. Merger Sub
is a direct wholly-owned subsidiary of Monsanto.
(b) Corporate Authorization. Merger Sub has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Merger Sub. This Agreement has been duly
executed and delivered by Merger Sub and constitutes a valid and binding
agreement of Merger Sub, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally, by general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) Non-Contravention. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby do not and will not contravene or conflict
with the certificate of incorporation or by-laws of Merger Sub.
(d) No Business Activities. Merger Sub has not conducted any
activities other than in connection with the organization of Merger Sub, the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby. Merger Sub has no Subsidiaries.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Covenants of PNU. During the period from the date of this
Agreement and continuing until the Effective Time, PNU agrees as to itself and
its Subsidiaries that (except as expressly contemplated or permitted by this
Agreement, the Stock Option Agreements or the PNU Disclosure Schedule or as
required by a Governmental Entity of competent jurisdiction or to the extent
that Monsanto shall
-28-
otherwise consent in writing, which consent shall not be unreasonably withheld
or delayed):
a) Ordinary Course.
(i) PNU and its Subsidiaries shall carry on their respective
businesses in the usual, regular and ordinary course in all material
respects, in substantially the same manner as heretofore conducted,
and shall use all reasonable efforts to preserve intact their
present lines of business, maintain their rights and franchises and
preserve their relationships with customers, suppliers and others
having business dealings with them to the end that their ongoing
businesses shall not be impaired in any material respect at the
Effective Time; provided, however, that no action by PNU or its
Subsidiaries with respect to matters specifically addressed by any
other provision of this Section 4.1 shall be deemed a breach of this
Section 4.1(a)(i) unless such action would constitute a breach of
one or more of such other provisions.
(ii) Other than in connection with acquisitions permitted by
Section 4.1(e), PNU shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any new material line of business or
(B) incur or commit to any capital expenditures or any obligations
or liabilities in connection therewith other than capital
expenditures and obligations or liabilities in connection therewith
incurred or committed to in the ordinary course of business
consistent with past practice and which, together with all such
expenditures incurred or committed since December 1, 1999, are not
in excess of the amounts set forth in Section 4.1(a) of the PNU
Disclosure Schedule.
(b) Dividends; Changes in Share Capital. PNU shall not, and shall
not permit any of its Subsidiaries to, and shall not propose to, (i) declare
or pay any dividends on or make other distributions in respect of any of its
capital stock, except (A) the declaration and payment of regular quarterly
cash dividends not in excess of $ 0.27 per share of PNU Common Stock with
usual record and payment dates for such dividends in accordance with past
dividend practice, (B) the declaration and payment of regular quarterly cash
dividends not in excess of $629.69 per share on the PNU Convertible Preferred
Stock with usual record and payment dates for such dividends in accordance
with past dividend practice and (C) for dividends by wholly owned Subsidiaries
of PNU, (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in
lieu of or in substitution for, shares of its capital stock, except for any
such transaction by a wholly owned Subsidiary of PNU which remains a wholly
owned Subsidiary after consummation of such transaction or (iii) repurchase,
redeem or otherwise acquire any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock except for
the purchase from time to time by PNU of PNU Common Stock (and the associated
PNU Rights) in the ordinary course of business consistent with past practice
in connection with the PNU Employee Benefit Plans.
-29-
(c) Issuance of Securities. PNU shall not, and shall not permit any
of its Subsidiaries to, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock of any class,
any PNU Voting Debt or any securities convertible into or exercisable for, or
any rights, warrants or options to acquire, any such shares or PNU Voting
Debt, or enter into any agreement with respect to any of the foregoing, other
than (i) the issuance of PNU Common Stock (and the associated PNU Rights) upon
the exercise of PNU Stock Options or in connection with other stock-based
benefit plans outstanding on the date hereof, in each case in accordance with
their present terms, (ii) the granting of PNU Stock Options and restricted
stock awards in the ordinary course of business consistent with past practice
not in excess of the amounts set forth in Section 4.1(c) of the PNU Disclosure
Schedule, (iii) issuances by a wholly owned Subsidiary of PNU of capital stock
to such Subsidiary's parent or another wholly owned Subsidiary of PNU, (iv)
pursuant to acquisitions set forth on the PNU Disclosure Schedule or the
financings therefor, (v) issuances in accordance with the PNU Rights Agreement
or (vi) issuances pursuant to the PNU Stock Option Agreement.
(d) Governing Documents. Except to the extent required to comply
with its obligations hereunder, required by law or required by the rules and
regulations of the NYSE, PNU shall not amend or propose to so amend its
certificate of incorporation, by-laws or other governing documents.
(e) No Acquisitions. Other than (i) pursuant to the Monsanto Stock
Option Agreement, (ii) acquisitions disclosed on the PNU Disclosure Schedule
and (iii) acquisitions for cash in existing or related lines of business of
PNU the fair market value of the total consideration (including the value of
indebtedness acquired or assumed) for which does not exceed the amount
specified in the aggregate for all such acquisitions in Section 4.1(e) of the
PNU Disclosure Schedule, PNU shall not, and shall not permit any of its
Subsidiaries to, acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial equity interest in or a substantial portion of
the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof or
otherwise acquire or agree to acquire or in-license any assets or rights
(other than the acquisition or in-license of assets used in the operations of
the business of PNU and its Subsidiaries in the ordinary course consistent
with past practice); provided, however, that the foregoing shall not prohibit
(x) internal reorganizations or consolidations involving existing direct or
indirect wholly owned Subsidiaries of PNU which remain direct or indirect
wholly owned Subsidiaries of PNU or (y) the creation of new direct or indirect
wholly owned Subsidiaries of PNU organized to conduct or continue activities
otherwise permitted by this Agreement.
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing direct or indirect wholly owned Subsidiaries
of PNU which remain direct or indirect wholly owned Subsidiaries of PNU, (ii)
dispositions referred to in PNU SEC Reports filed prior to the date of this
Agreement or (iii) as may be required by or in conformance with law or
regulation in order to permit or facilitate the consummation of the
transactions contemplated hereby or the transactions disclosed in the PNU
Disclosure Schedule, PNU shall not, and shall not permit any of its
Subsidiaries to, sell, lease, out-license, encumber or otherwise dispose of,
or agree to sell,
-30-
lease, out-license, encumber or otherwise dispose of, any of its assets
(including capital stock of Subsidiaries of PNU but excluding inventory in the
ordinary course of business consistent with past practice) the fair market
value of the total consideration (including the value of the indebtedness
acquired or assumed) for which exceeds the amount specified in the aggregate
for all such dispositions in Section 4.1(f) of the PNU Disclosure Schedule.
(g) Investments; Indebtedness. PNU shall not, and shall not permit
any of its Subsidiaries to, other than in connection with actions permitted by
Section 4.1(e), (i) make any loans, advances or capital contributions to, or
investments in, any other Person, other than (x) by PNU or a direct or
indirect wholly owned Subsidiary of PNU to or in PNU or any direct or indirect
wholly owned Subsidiary of PNU, (y) pursuant to any contract or other legal
obligation of PNU or any of its Subsidiaries as in effect at the date of this
Agreement or (z) in the ordinary course of business consistent with past
practice in an aggregate amount not in excess of the aggregate amount
specified in Section 4.1(g) of the PNU Disclosure Schedule or (ii) create,
incur, assume or suffer to exist any indebtedness, issuances of debt
securities, guarantees, loans or advances not in existence as of the date of
this Agreement except pursuant to the credit facilities, indentures (but not
in excess of amounts authorized for issuance thereunder as of the date of this
Agreement) and other arrangements in existence on the date of this Agreement
or trade debt and commercial finance in the ordinary course of business
consistent with past practice, in each case as such credit facilities,
indentures and other arrangements and other existing indebtedness may be
amended, extended, modified, refunded, renewed or refinanced after the date of
this Agreement which does not increase the aggregate principal amount or
amount of the facility, as the case may be.
(h) Pooling; Tax-Free Qualification. PNU shall use its reasonable
best efforts not to, and shall use its reasonable best efforts not to permit
any of its Subsidiaries to, take any action (including any action otherwise
permitted by this Section 4.1) that would prevent or impede the Merger from
qualifying as a "pooling of interests" for accounting purposes or as a
"reorganization" under Section 368(a) of the Code; provided, however, that
nothing hereunder shall limit the ability of PNU to exercise its rights and/or
fulfill its obligations under the Stock Option Agreements.
(i) Compensation. Other than as contemplated by Section 4.1(c) or
4.1(i) of the PNU Disclosure Schedule, and except in the ordinary course of
business consistent with past practice or as required by an existing contract
or agreement as in effect on the date hereof, PNU shall not (i) increase the
amount of compensation of any director or executive officer, (ii) make any
material increase in or commitment to increase materially any employee
benefits or (iii) adopt or make any commitment to adopt any material new
employee benefit plan or make any material contribution, other than regularly
scheduled contributions, to any PNU Benefit Plan.
(j) Accounting Methods; Income Tax Elections. Except as disclosed in
PNU SEC Reports filed prior to the date of this Agreement, or as required by a
Governmental Entity, PNU shall not change its methods of accounting in effect
at December 31, 1998, except as required by changes in GAAP as concurred in by
PNU's
-31-
independent auditors. PNU shall not (i) change its fiscal year or (ii) make any
material Tax election, other than in the ordinary course of business consistent
with past practice.
(k) Certain Agreements. Except as described in Schedule 4.1(f), PNU
shall not, and shall not permit any of its Subsidiaries to, enter into any
agreement or arrangement that limits or otherwise restricts PNU or any of its
Subsidiaries or any of their respective affiliates or any successor thereto or
that could, after the Effective Time, limit or restrict Newco or any of its
affiliates (including the Surviving Corporation) or any successor thereto,
from engaging or competing in any line of business or in any geographic area
which agreement or arrangement would reasonably be expected to have a Material
Adverse Effect on Newco and its Subsidiaries (including the Surviving
Corporation and its Subsidiaries), taken together, after giving effect to the
Merger.
(l) PNU Rights Agreement. PNU shall not amend, modify or waive any
provision of the PNU Rights Agreement, and shall not take any action to redeem
the PNU Rights or render the PNU Rights inapplicable to any transaction, other
than to permit another transaction that the Board of Directors of PNU has
determined is a Superior Proposal (as defined in Section 8.11) to be
consummated after termination of this Agreement.
(m) Funding of Benefits. PNU shall not make any contributions to any
grantor trust or other funding arrangement for any nonqualified deferred
compensation that is considered "unfunded" for purposes of ERISA.
Section 4.2 Covenants of Monsanto. During the period from the date of
this Agreement and continuing until the Effective Time, Monsanto agrees as to
itself and its Subsidiaries that (except as expressly contemplated or
permitted by this Agreement, the Stock Option Agreements or the Monsanto
Disclosure Schedule or as required by a Governmental Entity of competent
jurisdiction or to the extent that PNU shall otherwise consent in writing,
which consent shall not be unreasonably withheld or delayed):
(a) Ordinary Course.
(i) Monsanto and its Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course in
all material respects, in substantially the same manner as
heretofore conducted, and shall use all reasonable efforts to
preserve intact their present lines of business, maintain their
rights and franchises and preserve their relationships with
customers, suppliers and others having business dealings with them
to the end that their ongoing businesses shall not be impaired in
any material respect at the Effective Time other than in connection
with the divestiture of Monsanto's Nutrition and Consumer Businesses
or as contemplated by the Monsanto Agribusiness's Ag Going Forward
Plan (as provided to PNU on or prior to the date hereof); provided,
however, that no action by Monsanto or its Subsidiaries with respect
to matters specifically addressed by any other provision of this
Section 4.2 shall be
-32-
deemed a breach of this Section 4.2(a)(i) unless such action would
constitute a breach of one or more of such other provisions.
(ii) Other than in connection with acquisitions permitted by
Section 4.2(e), Monsanto shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any new material line of business or
(B) incur or commit to any capital expenditures or any obligations
or liabilities in connection therewith other than capital
expenditures and obligations or liabilities in connection therewith
incurred or committed to in the ordinary course of business
consistent with past practice and which, together with all such
expenditures incurred or committed since December 1, 1999, are not
in excess of the amounts set forth in Section 4.2(a) of the Monsanto
Disclosure Schedule.
(b) Dividends; Changes in Share Capital. Monsanto shall not, and shall
not permit any of its Subsidiaries to, and shall not propose to, (i) declare
or pay any dividends on or make other distributions in respect of any of its
capital stock, except (A) the declaration and payment of regular quarterly
cash dividends not in excess of $.03 per share of Monsanto Common Stock with
usual record and payment dates for such dividends in accordance with past
dividend practice and (B) for dividends by wholly owned Subsidiaries of
Monsanto, (ii) split, combine or reclassify any of its capital stock or issue
or authorize or propose the issuance of any other securities in respect of, in
lieu of or in substitution for, shares of its capital stock, except for any
such transaction by a wholly owned Subsidiary of Monsanto which remains a
wholly owned Subsidiary after consummation of such transaction or (iii)
repurchase, redeem or otherwise acquire any shares of its capital stock or any
securities convertible into or exercisable for any shares of its capital stock
except for the purchase from time to time by Monsanto of Monsanto Common Stock
(and the associated Monsanto Rights) in the ordinary course of business
consistent with past practice in connection with the Monsanto Employee Benefit
Plans.
(c) Issuance of Securities. Monsanto shall not, and shall not permit
any of its Subsidiaries to, issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any shares of its capital stock of any
class, any Monsanto Voting Debt or any securities convertible into or
exercisable for, or any rights, warrants or options to acquire, any such
shares or Monsanto Voting Debt, or enter into any agreement with respect to
any of the foregoing, other than (i) the issuance of Monsanto Common Stock
(and the associated Monsanto Rights) upon the exercise of Monsanto Stock
Options or in connection with other stock-based benefit plans outstanding on
the date hereof, in each case in accordance with their present terms, (ii)
issuances by a wholly owned Subsidiary of Monsanto of capital stock to such
Subsidiary's parent or another wholly owned subsidiary of Monsanto, (iii) the
granting of Monsanto Stock Options and restricted stock awards in the ordinary
course of business consistent with past practice not in excess of the amounts
set forth in Section 4.2(c) of the Monsanto Disclosure Schedule, (iv) pursuant
to acquisitions set forth on the Monsanto Disclosure Schedule or the
financings therefor, (v) issuances in accordance with the Monsanto Rights
Agreement or the New Monsanto Rights Agreement or (vi) issuances pursuant to
the Monsanto Stock Option Agreement.
-33-
(d) Governing Documents. Except to the extent required to comply with
its obligations hereunder, required by law or required by the rules and
regulations of the NYSE, Monsanto shall not amend or propose to so amend its
certificate of incorporation, by-laws or other governing documents.
(e) No Acquisitions. Other than (i) pursuant to the PNU Stock Option
Agreement, (ii) acquisitions disclosed on the Monsanto Disclosure Schedule and
(iii) acquisitions for cash in existing or related lines of business of
Monsanto the fair market value of the total consideration (including the value
of indebtedness acquired or assumed) for which does not exceed the amount
specified in the aggregate for all such acquisitions in Section 4.2(e) of the
Monsanto Disclosure Schedule, Monsanto shall not, and shall not permit any of
its Subsidiaries to, acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or
division thereof or otherwise acquire or agree to acquire any assets or
in-license any assets or rights (other than the acquisition or in-licenses of
assets used in the operations of the business of Monsanto and its Subsidiaries
in the ordinary course consistent with past practice); provided, however, that
the foregoing shall not prohibit (x) internal reorganizations or
consolidations involving existing direct or indirect wholly owned Subsidiaries
of Monsanto which remain direct or indirect wholly owned Subsidiaries of
Monsanto or (y) the creation of new direct or indirect wholly owned
Subsidiaries of Monsanto organized to conduct or continue activities otherwise
permitted by this Agreement.
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing direct or indirect wholly owned Subsidiaries
of Monsanto which remain direct or indirect wholly owned Subsidiaries of
Monsanto, (ii) dispositions referred to in Monsanto SEC Reports filed prior to
the date of this Agreement, (iii) as may be required by or in conformance with
law or regulation in order to permit or facilitate the consummation of the
transactions contemplated hereby or the transactions disclosed in the Monsanto
Disclosure Schedule or (iv) disposition of Monsanto's Nutrition and Consumer
Businesses on commercially reasonable terms as determined by the Board of
Directors of Monsanto in the exercise of its good faith business judgment,
Monsanto shall not, and shall not permit any of its Subsidiaries to, sell,
lease, out-license, encumber or otherwise dispose of, or agree to sell, lease,
out-license, encumber or otherwise dispose of, any of its assets (including
capital stock of Subsidiaries of Monsanto but excluding inventory in the
ordinary course of business consistent with past practice) the fair market
value of the total consideration (including the value of the indebtedness
acquired or assumed) for which exceeds the amount specified in the aggregate
for all such dispositions in Section 4.2(f) of the Monsanto Disclosure
Schedule.
(g) Investments; Indebtedness. Monsanto shall not, and shall not
permit any of its Subsidiaries to, other than in connection with actions
permitted by Section 4.2(e), (i) make any loans, advances or capital
contributions to, or investments in, any other Person, other than (x) by
Monsanto or a direct or indirect wholly owned Subsidiary of Monsanto to or in
Monsanto or any direct or indirect wholly owned
-34-
Subsidiary of Monsanto, (y) pursuant to any contract or other legal obligation
of Monsanto or any of its Subsidiaries as in effect at the date of this
Agreement or (z) in the ordinary course of business consistent with past
practice in an aggregate amount not in excess of the aggregate amount
specified in Section 4.2(g) of the Monsanto Disclosure Schedule or (ii)
create, incur, assume or suffer to exist any indebtedness, issuances of debt
securities, guarantees, loans or advances not in existence as of the date of
this Agreement except pursuant to the credit facilities, indentures (but not
in excess of amounts authorized for issuance thereunder as of the date of this
Agreement) and other arrangements in existence on the date of this Agreement
or trade debt and commercial finance in the ordinary course of business
consistent with past practice, in each case as such credit facilities,
indentures and other arrangements and other existing indebtedness may be
amended, extended, modified, refunded, renewed or refinanced after the date of
this Agreement which does not increase the aggregate principal amount or
amount of the facility, as the case may be.
(h) Pooling; Tax-Free Qualification. Monsanto shall use its reasonable
best efforts not to, and shall use its reasonable best efforts not to permit
any of its Subsidiaries to, take any action (including any action otherwise
permitted by this Section 4.2) that would prevent or impede the Merger from
qualifying as a "pooling of interests" for accounting purposes or as a
"reorganization" under Section 368(a) of the Code; provided, however, that
nothing hereunder shall limit the ability of Monsanto to exercise its rights
and/or fulfill its obligations under the Stock Option Agreements.
(i) Compensation. Other than as contemplated by Sections 4.2(c) or
4.2(i) of the Monsanto Disclosure Schedule, and except in the ordinary course
of business consistent with past practice or as required by an existing
contract or agreement as in effect on the date hereof, Monsanto shall not (i)
increase the amount of compensation of any director or executive officer, (ii)
make any material increase in or commitment to increase materially any
employee benefits or (iii) adopt or make any commitment to adopt any material
new employee benefit plan or make any material contribution, other than
regularly scheduled contributions, to any Monsanto Benefit Plan.
(j) Accounting Methods; Income Tax Elections. Except as disclosed in
Monsanto SEC Reports filed prior to the date of this Agreement, or as required
by a Governmental Entity, Monsanto shall not change its methods of accounting
in effect at December 31, 1998, except as required by changes in GAAP as
concurred in by Monsanto's independent auditors. Monsanto shall not (i) change
its fiscal year or (ii) make any material Tax election, other than in the
ordinary course of business consistent with past practice.
(k) Certain Agreements. Except as described in Schedule 4.2(f),
Monsanto shall not, and shall not permit any of its Subsidiaries to, enter
into any agreement or arrangement that limits or otherwise restricts Monsanto
or any of its Subsidiaries or any of their respective affiliates or any
successor thereto, or that could, after the Effective Time, limit or restrict
Newco or any of its affiliates (including the Surviving Corporation) or any
successor thereto, from engaging or competing in any line of business or in
any geographic area which agreement or arrangement would reasonably
-35-
be expected to have a Material Adverse Effect on Newco and its Subsidiaries
(including the Surviving Corporation and its Subsidiaries), taken together,
after giving effect to the Merger.
(l) Monsanto Rights Agreement. Monsanto shall not amend, modify or
waive any provision of the Monsanto Rights Agreement or the New Monsanto
Rights Agreement, and shall not take any action to redeem the Monsanto Rights
or render the Monsanto Rights inapplicable to any transaction, other than to
permit another transaction that the Board of Directors of Monsanto has
determined is a Superior Proposal to be consummated after termination of this
Agreement.
(m) Funding of Benefits. Monsanto shall not make any contributions to
any grantor trust or other funding arrangement for any nonqualified deferred
compensation that is considered "unfunded" for purposes of ERISA.
Section 4.3 Acquisitions. If (i) a party makes a bona fide request for
consent of the other party for an acquisition that would otherwise by
precluded by Section 4.1(e) or Section 4.2(e), (ii) the other party does not
give such consent and (iii) this Agreement is terminated pursuant to Section
7.1, such other party shall not acquire or offer to acquire, directly or
indirectly, the business that was the subject of such request for a period of
one year following such termination. In no event shall the restrictions
contained in the preceding sentence apply with respect to more than four
acquisitions requested by any party. No party may request consent for an
acquisition of a business that has been the subject of a request for consent
by the other party.
Section 4.4 Governmental Filings. Each party shall (a) confer on a
regular and frequent basis with the other and (b) report (to the extent
permitted by law or regulation or any applicable confidentiality agreement) on
operational matters. Monsanto and PNU shall file all reports required to be
filed by each of them with the SEC (and all other Governmental Entities)
between the date of this Agreement and the Effective Time and shall (to the
extent permitted by law or regulation or any applicable confidentiality
agreement) deliver to the other party copies of all such reports,
announcements and publications promptly after the same are filed.
Section 4.5 Control of Other Party's Business. Nothing contained in
this Agreement shall give Monsanto, directly or indirectly, the right to
control or direct PNU's operations prior to the Effective Time. Nothing
contained in this Agreement shall give PNU, directly or indirectly, the right
to control or direct Monsanto's operations prior to the Effective Time. Prior
to the Effective Time, each of Monsanto and PNU shall exercise, consistent
with the terms and conditions of this Agreement, complete control and
supervision over its respective operations.
-36-
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Preparation of Proxy Statement; Stockholders Meetings. (a)
As promptly as reasonably practicable following the date hereof, PNU and
Monsanto shall prepare and file with the SEC proxy materials which shall
constitute the Joint Proxy Statement/Prospectus (such proxy
statement/prospectus, and any amendments or supplements thereto, the "Joint
Proxy Statement/Prospectus") and Monsanto shall prepare and file a
registration statement on Form S-4 with respect to the issuance of Monsanto
Common Stock and Monsanto Convertible Preferred Stock in the Merger (the "Form
S-4"). The Joint Proxy Statement/Prospectus will be included in and will
constitute a part of the Form S-4 as Monsanto's prospectus. Each of PNU and
Monsanto shall use reasonable best efforts to have the Form S-4 declared
effective by the SEC as promptly as reasonably practicable after filing with
the SEC and to keep the Form S-4 effective as long as is necessary to
consummate the Merger and the transactions contemplated thereby. PNU and
Monsanto shall, as promptly as practicable after receipt thereof, provide the
other party copies of any written comments and advise the other party of any
oral comments, with respect to the Joint Proxy Statement/Prospectus received
from the SEC. Monsanto shall provide PNU with a reasonable opportunity to
review and comment on any amendment or supplement to the Form S-4 prior to
filing such with the SEC, and with a copy of all such filings made with the
SEC. Notwithstanding any other provision herein to the contrary, no amendment
or supplement (including by incorporation by reference) to the Joint Proxy
Statement/Prospectus or the Form S-4 shall be made without the approval of
both parties, which approval shall not be unreasonably withheld or delayed;
provided, that with respect to documents filed by a party which are
incorporated by reference in the Form S-4 or Joint Proxy Statement/Prospectus,
this right of approval shall apply only with respect to information relating
to the other party or its business, financial condition or results of
operations. PNU will use reasonable best efforts to cause the Joint Proxy
Statement/Prospectus to be mailed to PNU stockholders, and Monsanto will use
reasonable best efforts to cause the Joint Proxy Statement/Prospectus to be
mailed to Monsanto's stockholders, in each case as promptly as practicable
after the Form S-4 is declared effective under the Securities Act. Monsanto
shall also take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or to file a general consent
to service of process) required to be taken under any applicable state
securities laws in connection with the Share Issuance and PNU shall furnish
all information concerning PNU and the holders of PNU Common Stock and PNU
Convertible Preferred Stock as may be reasonably requested in connection with
any such action. Each party will advise the other party, promptly after it
receives notice thereof, of the time when the Form S-4 has become effective,
the issuance of any stop order, the suspension of the qualification of the
Monsanto Common Stock or the Monsanto Convertible Preferred Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Joint Proxy Statement/Prospectus or
the Form S-4. If at any time prior to the Effective Time any information
relating to PNU or Monsanto, or any of their respective affiliates, officers
or directors, should be discovered by PNU or Monsanto which should be set
forth in an amendment or supplement to any of the Form
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S-4 or the Joint Proxy Statement/Prospectus so that any of such documents
would not include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other party hereto and,
to the extent required by law, rules or regulations, an appropriate amendment
or supplement describing such information shall be promptly filed with the SEC
and disseminated to the stockholders of PNU and Monsanto.
(b) Subject to Section 5.5, Monsanto shall, as promptly as reasonably
practicable following the execution of this Agreement, duly take all lawful
action to call, give notice of, convene and hold a meeting of its stockholders
(the "Monsanto Stockholders Meeting") (which meeting the parties intend to be
held no later than May 15, 2000 or as soon as practicable thereafter) for the
purpose of obtaining the Required Monsanto Votes with respect to the Share
Issuance and the Charter Amendment, and shall take all lawful action to
solicit the approval of the Share Issuance and the Charter Amendment by the
Required Monsanto Votes; and the Board of Directors of Monsanto shall, subject
to its fiduciary duties under applicable law, recommend approval of the Share
Issuance and the Charter Amendment by the stockholders of Monsanto to the
effect as set forth in Section 3.2(f), and shall not, subject to its fiduciary
duties under applicable law, withdraw, modify or materially qualify in any
manner adverse to PNU such recommendation or take any action or make any
statement in connection with the Monsanto Stockholders Meeting materially
inconsistent with such recommendation (any such withdrawal, modification,
qualification or statement (whether or not required), an "Adverse Change in
the Monsanto Recommendation").
(c) Subject to Section 5.5, PNU shall, as promptly as reasonably
practicable following the execution of this Agreement, duly take all lawful
action to call, give notice of, convene and hold a meeting of its stockholders
(the "PNU Stockholders Meeting") (which meeting the parties intend to be held
no later than May 15, 2000 or as soon as practicable thereafter) for the
purpose of obtaining the Required PNU Vote with respect to the transactions
contemplated by this Agreement, and shall take all lawful action to solicit
the adoption of this Agreement by the Required PNU Vote; and the Board of
Directors of PNU shall, subject to its fiduciary duties under applicable law,
recommend adoption of this Agreement by the stockholders of PNU to the effect
as set forth in Section 3.1(f), and shall not, subject to its fiduciary duties
under applicable law, withdraw, modify or materially qualify in any manner
adverse to Monsanto such recommendation or take any action or make any
statement in connection with the PNU Stockholders Meeting materially
inconsistent with such recommendation (any such withdrawal, modification,
qualification or statement (whether of not required), an "Adverse Change in
the PNU Recommendation").
Section 5.2 Newco Board of Directors; Executives; Name; Headquarters;
Monsanto Agribusiness. (a) At or prior to the Effective Time, the parties will
take all action necessary such that (i) the Board of Directors of Newco as of
the Effective Time consists of 20 members to be determined prior to the
mailing of the Joint Proxy Statement/Prospectus, 10 of whom will be designated
by Monsanto and 10 of whom will be designated by PNU, such designees to be
current directors of PNU and
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Monsanto or such other persons as are reasonably acceptable to the other
party, (ii) each of the executive committee, the audit committee, the
compensation committee, the nominating committee and any other committees of
the Board of Directors of Newco as of the Effective Time will consist of an
equal number of members who are directors designated by PNU and directors
designated by Monsanto, (iii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall be appointed
non-executive Chairman of the Board of Directors of Newco and ▇▇▇▇ ▇▇▇▇▇▇
shall be appointed Chief Executive Officer of Newco, each as of the Effective
Time, and (iv) at and effective as of 18 months after the Effective Time, if
▇▇. ▇▇▇▇▇▇ is the Chief Executive Officer of Newco, ▇▇. ▇▇▇▇▇▇ shall be become
Chairman of the Board and Chief Executive Officer of Newco unless otherwise
determined at such time by the affirmative vote of 80% of the members of
Newco's Board of Directors. If ▇▇. ▇▇▇▇▇▇▇ is not the Chief Executive Officer
of Monsanto and/or ▇▇▇▇ ▇▇▇▇▇▇ is not the Chief Executive Officer of PNU, in
each case immediately prior to the Effective Time, PNU and Monsanto will use
their reasonable best efforts to agree upon an individual or individuals to
replace ▇▇. ▇▇▇▇▇▇▇ and/or ▇▇. ▇▇▇▇▇▇ as non-executive Chairman and/or Chief
Executive Officer, as the case may be. Without limiting the foregoing, the
parties intend that the twenty most senior executive positions of Newco (on a
combined basis with its Subsidiaries), excluding the Chairman and the Chief
Executive Officer, shall be held by a combination of ten executives from
Monsanto and ten executives from PNU.
(b) The parties intend that Monsanto shall change its name as of the
Effective Time to a new name to be mutually agreed upon by Monsanto and PNU
prior to the Effective Time. Newco shall use the "Monsanto" name for the
Monsanto Agribusiness (as defined in Section 8.11).
(c) Following the Effective Time, the parties intend that (i) Newco
shall maintain its principal corporate offices and the headquarters of its
pharmaceutical segment in Peapack, New Jersey and (ii) Newco shall maintain
the headquarters of the Monsanto Agribusiness in St. Louis, Missouri.
(d) The parties intend, as promptly as practicable following the
Closing, that Newco would reorganize the Monsanto Agribusiness as a direct or
indirect subsidiary of Newco and sell up to 19.9% of such subsidiary by means
of an initial public offering on the New York Stock Exchange. The parties
contemplate that at the time of any such public offering, such subsidiary
would have a sound capital structure, after giving effect to the repayment of
indebtedness with the proceeds of such initial public offering. The parties
intend that such subsidiary would have a board of directors at the time of
such public offering consisting of 3 members designated by directors of Newco
who are former members of the Board of Directors of Monsanto, 3 members
designated by directors of Newco who are former members of the Board of
Directors of PNU and two members who are independent directors and designated
by the entire Board of Directors of Newco.
(e) Subject to the Required Monsanto Votes, Monsanto shall take all
necessary action to cause the Charter Amendment (Monsanto's Restated
Certificate of Incorporation, as so amended, the "Newco Charter") and the
By-laws (the "Newco By-
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laws"), in substantially the forms attached hereto as Exhibits 5.2(e)(1)
and 5.2(e)(2), respectively, to be effective at and as of the Effective Time.
Section 5.3 Access to Information. (a) Upon reasonable notice, each
party shall (and shall cause its Subsidiaries to) afford to the officers,
employees, accountants, counsel, financial advisors and other representatives
of the other party reasonable access during normal business hours, during the
period prior to the Effective Time, to all its properties, books, contracts,
commitments, records, officers and employees and, during such period, such
party shall (and shall cause its Subsidiaries to) furnish promptly to the
other party (a) a copy of each report, schedule, registration statement and
other document filed, published, announced or received by it during such
period pursuant to the requirements of Federal or state securities laws, as
applicable (other than documents which such party is not permitted to disclose
under applicable law), and (b) consistent with its legal obligations, all
other information concerning it and its business, properties and personnel as
such other party may reasonably request; provided, however, that either party
may restrict the foregoing access to the extent that any law, treaty, rule or
regulation of any Governmental Entity applicable to such party requires such
party or its Subsidiaries to restrict access to any properties or information.
The parties will hold any such information which is non-public in confidence
to the extent required by, and in accordance with, the provisions of the
letter dated October 13, 1999 between Monsanto and PNU (as it may be amended
or supplemented, the "Confidentiality Agreement"). Any investigation by PNU or
Monsanto shall not affect the representations and warranties of Monsanto or
PNU, as the case may be.
(b) Between the date hereof and the Effective Time, Monsanto and PNU
shall provide each other with such documentation and information regarding the
Monsanto Employee Benefit Plans and the PNU Employee Benefit Plans,
respectively, as the other party shall reasonably request, as promptly as is
reasonably practicable.
Section 5.4 Reasonable Best Efforts. (a) Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the Merger and the other transactions contemplated by this
Agreement as soon as practicable after the date hereof, including (i)
preparing and filing as promptly as practicable all documentation to effect
all necessary applications, notices, petitions, filings, tax ruling requests
and other documents and to obtain as promptly as practicable all consents,
waivers, licenses, orders, registrations, approvals, permits, Tax rulings and
authorizations necessary or advisable to be obtained from any third party
and/or any Governmental Entity in order to consummate the Merger or any of the
other transactions contemplated by this Agreement and (ii) taking all
reasonable steps as may be necessary to obtain all such material consents,
waivers, licenses, registrations, permits, authorizations, Tax rulings, orders
and approvals. In furtherance and not in limitation of the foregoing, each
party hereto agrees to make an appropriate filing of a Notification and Report
Form pursuant to the HSR Act and any other Regulatory Law (as defined in
Section 5.4(b)) with respect to the transactions contemplated hereby as
promptly as practicable after the date hereof and to supply as promptly as
practicable any additional information and documentary material
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that may be requested pursuant to the HSR Act and any other Regulatory Law and
to take all other actions necessary to cause the expiration or termination of
the applicable waiting periods under the HSR Act as soon as practicable.
Nothing in this Section 5.4 shall require any of PNU and its Subsidiaries or
Monsanto and its Subsidiaries to sell, hold separate or otherwise dispose of
or conduct their business in a specified manner, or agree to sell, hold
separate or otherwise dispose of or conduct their business in a specified
manner, or permit the sale, holding separate or other disposition of, any
assets of PNU, Monsanto or their respective Subsidiaries or the conduct of
their business in a specified manner, whether as a condition to obtaining any
approval from a Governmental Entity or any other Person or for any other
reason, if such sale, holding separate or other disposition or the conduct of
their business in a specified manner is not conditioned on the Closing or
would reasonably be expected to have a Material Adverse Effect on Newco and
its Subsidiaries (including the Surviving Corporation and its Subsidiaries),
taken together, after giving effect to the Merger.
(b) Each of PNU and Monsanto shall, in connection with the efforts
referenced in Section 5.4(a) to obtain all requisite material approvals and
authorizations for the transactions contemplated by this Agreement under the
HSR Act or any other Regulatory Law, use its reasonable best efforts to (i)
cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry,
including any proceeding initiated by a private party, (ii) promptly inform
the other party of any communication received by such party from, or given by
such party to, the Antitrust Division of the Department of Justice (the
"DOJ"), the Federal Trade Commission (the "FTC") or any other Governmental
Entity and of any material communication received or given in connection with
any proceeding by a private party, in each case regarding any of the
transactions contemplated hereby, and (iii) permit the other party to review
any communication given by it to, and consult with each other in advance of
any meeting or conference with, the DOJ, the FTC or any such other
Governmental Entity or, in connection with any proceeding by a private party,
with any other Person, and to the extent appropriate or permitted by the DOJ,
the FTC or such other applicable Governmental Entity or other Person, give the
other party the opportunity to attend and participate in such meetings and
conferences. For purposes of this Agreement, "Regulatory Law" means the
▇▇▇▇▇▇▇ Act, as amended, Council Regulation No. 4064/89 of the European
Community, as amended (the "EC Merger Regulation"), the ▇▇▇▇▇▇▇ Act, as
amended, the HSR Act, the Federal Trade Commission Act, as amended, and all
other federal, state and foreign, if any, statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines and other laws that are
designed or intended to prohibit, restrict or regulate (i) foreign investment
or (ii) actions having the purpose or effect of monopolization or restraint of
trade or lessening of competition.
(c) Subject to the last sentence of Section 5.4(a), if any
administrative or judicial action or proceeding, including any proceeding by a
private party, is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement as violative of any Regulatory Law,
each of PNU and Monsanto shall cooperate in all respects with each other and
use its respective reasonable best efforts, including without limitation,
selling, holding separate or otherwise disposing of or
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conducting their business in a specified manner, or agreeing to sell, hold
separate or otherwise dispose of or conduct their business in a specified
manner or permitting the sale, holding separate or other disposition of, any
assets of PNU, Monsanto or their respective Subsidiaries or the conducting of
their business in a specified manner, in order to contest and resist any such
action or proceeding (or the threat thereof) and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order,
whether temporary, preliminary or permanent, that is in effect and that
prohibits, prevents or restricts consummation of the transactions contemplated
by this Agreement.
(d) Each of PNU and Monsanto shall cooperate with each other in
obtaining opinions of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to PNU, and ▇▇▇▇▇▇ &
▇▇▇▇▇▇, special tax counsel to Monsanto, to satisfy the conditions set forth
in Section 6.2(c) and Section 6.3(c). In connection therewith, each of PNU and
Monsanto shall deliver to such counsel customary representation letters
substantially in the forms attached hereto as Exhibit 6.2(c)(2) and Exhibit
6.2(c)(3) or otherwise in form and substance reasonably satisfactory to such
counsel.
Section 5.5 Acquisition Proposals. Without limitation on any of such
party's other obligations under this Agreement (including under Article IV
hereof), but except to the extent specifically permitted to such party
pursuant to its Disclosure Schedules under subsections (e) and (f) of Sections
4.1 or 4.2, as the case may be, each of PNU and Monsanto agrees that neither
it nor any of its Subsidiaries nor any of the officers and directors of it or
its Subsidiaries shall, and that it shall use its reasonable best efforts to
cause its and its Subsidiaries' employees, agents and representatives
(including any investment banker, attorney or accountant retained by it or any
of its Subsidiaries) not to, directly or indirectly, initiate, solicit,
encourage or knowingly facilitate (including by way of furnishing information)
any inquiries or the making of any proposal or offer with respect to a merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
it, or any purchase or sale of the consolidated assets (including without
limitation stock of Subsidiaries) of such party and its Subsidiaries, taken as
a whole, having an aggregate value equal to 10% or more of the market
capitalization of such party, or any purchase or sale of, or tender or
exchange offer for, 10% or more of the equity securities of such party (any
such proposal or offer (other than a proposal or offer made by the other party
or an affiliate thereof) being hereinafter referred to as an "Acquisition
Proposal"). Each party agrees that it will promptly inform the other party of
its receipt of any inquiries, offers or proposals received by any of its
directors or executive officers relating to an Acquisition Proposal. Each of
PNU and Monsanto further agrees that neither it nor any of its Subsidiaries
nor any of the officers and directors of it or its Subsidiaries shall, and
that it shall use its reasonable best efforts to cause its and its
Subsidiaries' employees, agents and representatives (including any investment
banker, attorney or accountant retained by it or any of its Subsidiaries) not
to, directly or indirectly, have any discussion with or provide any
confidential information or data to any Person relating to an Acquisition
Proposal, or engage in any negotiations concerning an Acquisition Proposal, or
knowingly facilitate any effort or attempt to make or implement an Acquisition
Proposal or accept an Acquisition Proposal. Notwithstanding anything in this
Agreement to the contrary, each of PNU and Monsanto or its respective Board of
Directors shall
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be permitted to (A) to the extent applicable, comply with Rule
14d-9 and Rule 14e-2 promulgated under the Exchange Act with regard to an
Acquisition Proposal, (B) in response to an unsolicited bona fide written
Acquisition Proposal by any Person, recommend approval of such an unsolicited
bona fide written Acquisition Proposal to its stockholders or effect an
Adverse Change in the PNU Recommendation or an Adverse Change in the Monsanto
Recommendation, as the case may be, or (C) engage in any discussions or
negotiations with, or provide any information to, any Person in response to an
unsolicited bona fide written Acquisition Proposal by any such Person, if and
only to the extent that, in any such case as is referred to in clause (B) or
(C), (i) its Stockholders Meeting shall not have occurred, (ii) its Board of
Directors (x) in the case of clause (B) above, concludes in good faith that
such Acquisition Proposal constitutes a Superior Proposal and provides written
notice of termination of this Agreement pursuant to Section 7.1(f) or (y) in
the case of clause (C) above concludes in good faith that such Acquisition
Proposal could reasonably be expected to result in a Superior Proposal, (iii)
prior to providing any information or data to any Person in connection with an
Acquisition Proposal by any such Person, its Board of Directors receives from
such Person an executed confidentiality agreement containing confidentiality
terms at least as stringent as those contained in the Confidentiality
Agreement, and (iv) prior to providing any information or data to any Person
or entering into discussions or negotiations with any Person, such party
notifies the other party promptly of such inquiries, proposals or offers
received by, any such information requested from, or any such discussions or
negotiations sought to be initiated or continued with, it, its Subsidiaries,
its or its Subsidiaries' officers or directors, or any of its agents or
representatives indicating, in connection with such notice, the name of such
Person and the material terms and conditions of any inquiries, proposals or
offers. Each of PNU and Monsanto agrees that it will promptly keep the other
party informed of the status and terms of any such proposals or offers and the
status and terms of any such discussions or negotiations. Each of PNU and
Monsanto agrees that it will, and will cause its and its Subsidiaries'
officers, directors, agents and representatives to, immediately cease and
cause to be terminated any activities, discussions or negotiations existing as
of the date of this Agreement with any parties conducted heretofore with
respect to any Acquisition Proposal, and request the return or destruction of
all non-public information furnished in connection therewith. Each of PNU and
Monsanto agrees that it will use reasonable best efforts to promptly inform
its directors, officers, key employees, agents and representatives of the
obligations undertaken in this Section 5.5. Nothing in this Section 5.5 shall
(x) permit PNU or Monsanto to terminate this Agreement (except as specifically
provided in Article VII hereof) or (y) affect any other obligation of PNU or
Monsanto under this Agreement.
Section 5.6 Employee Benefits Matters. (a) Continuation and
Comparability of Benefits. Following the Effective Time, Newco shall honor,
and cause the Surviving Corporation to honor, all Monsanto Employee Benefit
Plans and PNU Employee Benefit Plans and the related funding arrangements of
each in accordance with their respective terms and shall interpret such
Monsanto Employee Benefit Plans and PNU Employee Benefit Plans in accordance
with the past practice of Monsanto or PNU, as the case may be. From the
Effective Time until December 31, 2001, Newco and the Surviving Corporation do
not intend to reduce base salary, annual bonus opportunities or long-term
incentive opportunities for employees of PNU, Monsanto and their respective
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Subsidiaries, except as otherwise determined by the Board of Directors or
Compensation Committee of Newco. From the Effective Time until December 31,
2001, Newco and the Surviving Corporation shall provide employee benefits
under employee benefit plans to the employees and former employees of PNU and
Monsanto and their respective Subsidiaries (the "Newco Employees") that are in
the aggregate no less favorable than those provided to such persons pursuant
to the employee benefit plans of each of Monsanto and PNU in effect on the
date hereof (excluding equity and equity-based compensation). Without limiting
the generality of the foregoing, Newco shall provide severance pay and
benefits to Newco Employees whose employment terminates on or before December
31, 2001 in accordance with the following: (i) with respect to such Newco
Employees who are employed by Monsanto or any of its Subsidiaries immediately
before the Effective Time, not less favorable than those provided under the
applicable Monsanto Employee Benefit Plans; and (ii) with respect to such
Newco Employees who are employed by PNU or any of its Subsidiaries immediately
before the Effective Time, not less favorable than those provided under the
applicable PNU Employee Benefit Plans, in each case as interpreted in
accordance with past practice of Monsanto and PNU, respectively. Nothing
herein shall prohibit any changes to the Monsanto Employee Benefit Plans and
PNU Employee Benefit Plans that may be (i) required by law (including, without
limitation, any applicable qualification requirements of Section 401(a) of the
Code), (ii) necessary as a technical matter to reflect the transactions
contemplated hereby or (iii) required for Newco to provide for or permit
investment in its securities. Furthermore, nothing herein shall require Newco
to continue any particular Monsanto Employee Benefit Plan or PNU Employee
Benefit Plan or prevent the amendment or termination thereof (subject to the
maintenance, in the aggregate, of the benefits as provided in this Section
5.6(a) and to the obligation to provide severance pay and benefits as provided
above).
(b) Pre-Existing Limitations; Deductibles; Service Credit. With
respect to any employee benefit plans in which any Newco Employees first
become eligible to participate, on or after the Effective Time, and in which
the Newco Employees did not participate prior to the Effective Time (the "New
Newco Plans"), Newco shall: (A) waive all pre-existing conditions, exclusions
and waiting periods with respect to participation and coverage requirements
applicable to the Newco Employees under any New Newco Plans in which such
employees may be eligible to participate after the Effective Time, except to
the extent such pre-existing conditions, exclusions or waiting periods would
apply under the analogous Monsanto Employee Benefit Plan or PNU Employee
Benefit Plan, as the case may be; (B) provide each Newco Employee with credit
for any co-payments and deductibles paid prior to the Effective Time (to the
same extent such credit was given under the analogous employee benefit plan
prior to the Effective Time) in satisfying any applicable deductible or
out-of-pocket requirements under any New Newco Plans in which such employees
may be eligible to participate after the Effective Time, and (C) recognize all
service of the Newco Employees with PNU and Monsanto, respectively, for all
purposes (including, without limitation, purposes of eligibility to
participate, vesting credit, entitlement to benefits, and, except with respect
to defined benefit pension plans, benefit accrual) in any New Newco Plan in
which such employees may be eligible to participate after the Effective Time,
to the extent such
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service is taken into account under the applicable New Newco Plan; provided,
that the foregoing shall not apply to the extent it would result in
duplication of benefits.
c) Grantor Trusts. Monsanto and PNU shall each take all steps (if any)
that are necessary or appropriate to amend any grantor trusts to which
Monsanto or any of its Subsidiaries, or PNU or any of its Subsidiaries, as
applicable, is a party so that no contributions to such trusts are required to
be made as a result of or in connection with the consummation of the
transactions contemplated hereby.
(d) Pension Plans. (i) PNU shall take all steps necessary or
appropriate to declare void the provisions of the PNU Retirement Plan that,
absent such action, would otherwise become effective upon a change of control.
(ii) Monsanto shall take all steps necessary or appropriate to ensure
that its defined benefit pension plans do not contain provisions that would
become effective upon a change of control.
(e) Assumption of Employment Agreements. Monsanto and PNU shall take
all action necessary or appropriate to effect the assumption by Monsanto,
effective immediately following the Effective Time, of all rights and
obligations of PNU under the employment agreements listed on Schedule 5.6(e).
Section 5.7 Fees and Expenses. Whether or not the Merger is
consummated, all Expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
Expenses, except (a) if the Merger is consummated, the Surviving Corporation
shall pay, or cause to be paid, any and all property or transfer taxes imposed
on PNU or its Subsidiaries and (b) Expenses incurred in connection with the
filing, printing and mailing of the Form S-4 and the Joint Proxy
Statement/Prospectus, which shall be shared equally by PNU and Monsanto. As
used in this Agreement, "Expenses" includes all out-of-pocket expenses
(including, without limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and its
affiliates) incurred by a party or on its behalf in connection with or related
to the authorization, preparation, negotiation, execution and performance of
this Agreement and the transactions contemplated hereby, including the
preparation, printing, filing and mailing of the Joint Proxy
Statement/Prospectus and the solicitation of stockholder approvals and all
other matters related to the transactions contemplated hereby.
Section 5.8 Directors' and Officers' Indemnification and Insurance. T
he Surviving Corporation shall, and Newco shall cause the Surviving
Corporation to, (i) indemnify and hold harmless, and provide advancement of
expenses to, all past and present directors, officers and employees of PNU and
its Subsidiaries (in all of their capacities), to the same extent such persons
are indemnified or have the right to advancement of expenses as of the date of
this Agreement by PNU pursuant to PNU's certificate of incorporation, by-laws
and indemnification agreements, if any, in existence on the date hereof with
any directors, officers and employees of PNU and its Subsidiaries for acts or
omissions occurring at or prior to the Effective Time (including for acts or
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omissions occurring in connection with the approval of this Agreement and the
consummation of the transactions contemplated hereby), (ii) include and cause
to be maintained in effect in the Surviving Corporation's (or any successor's)
certificate of incorporation and by-laws for a period of six years after the
Effective Time, the current provisions regarding elimination of liability of
directors, indemnification of officers, directors and employees and
advancement of expenses contained in the certificate of incorporation and
by-laws of PNU, as the case may be, and (iii) cause to be maintained for a
period of six years after the Effective Time the current policies of
directors' and officers' liability insurance and fiduciary liability insurance
maintained by PNU (provided that the Surviving Corporation (or any successor)
may substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are, in the aggregate, no less
advantageous to the insured) with respect to claims arising from facts or
events that occurred on or before the Effective Time; provided, however, that
in no event shall the Surviving Corporation be required to expend in any one
year an amount in excess of 200% of the annual premiums currently paid by PNU
for such insurance; and, provided, further, that if the annual premiums of
such insurance coverage exceed such amount, the Surviving Corporation shall be
obligated to obtain a policy with the greatest coverage available for a cost
not exceeding such amount.
Section 5.9 Public Announcements. PNU and Monsanto shall use
reasonable best efforts to develop a joint communications plan and each party
shall use reasonable best efforts (i) to ensure that all press releases and
other public statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan, and (ii) unless
otherwise required by applicable law or by obligations pursuant to any listing
agreement with or rules of any securities exchange, to consult with each other
before issuing any press release or, to the extent practical, otherwise making
any public statement with respect to this Agreement or the transactions
contemplated hereby.
Section 5.10 Accounting Matters. (a) PNU shall use reasonable best
efforts to cause to be delivered to Monsanto two letters from PNU's
independent public accountants, one dated approximately the date on which the
Form S-4 shall become effective and one dated the Closing Date, each addressed
to PNU and Monsanto, in form and substance reasonably satisfactory to Monsanto
and customary in scope and substance for comfort letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4.
(b) Monsanto shall use reasonable best efforts to cause to be
delivered to PNU two letters from Monsanto's independent public accountants,
one dated approximately the date on which the Form S-4 shall become effective
and one dated the Closing Date, each addressed to Monsanto and PNU, in form
and substance reasonably satisfactory to PNU and customary in scope and
substance for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.
(c) Each of PNU and Monsanto shall use reasonable best efforts to
cause the transactions contemplated by this Agreement, including the Merger,
to be
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accounted for as a pooling of interests under Opinion 16 of the
Accounting Principles Board and applicable SEC rules and regulations, and such
accounting treatment to be accepted by the SEC; provided, however, that
notwithstanding anything in this Agreement to the contrary, the qualification
of the Merger for pooling of interests accounting treatment shall not be a
condition to the Closing.
Section 5.11 Listing of Shares of Monsanto Common Stock. Monsanto
shall use its reasonable best efforts to cause the shares of Monsanto Common
Stock to be issued in the Merger and the shares of Monsanto Common Stock to be
reserved for issuance upon exercise of the PNU Stock Options (i) to be
approved for listing on the NYSE, subject to official notice of issuance,
prior to the Closing Date and (ii) to be approved for listing on the Stockholm
Stock Exchange, subject to official notice of issuance, prior to the Closing
Date.
Section 5.12 Dividends. After the date of this Agreement, each of PNU
and Monsanto shall coordinate with the other the payment of dividends with
respect to the PNU Common Stock and Monsanto Common Stock and the record dates
and payment dates relating thereto, it being the intention of the parties
hereto that holders of PNU Common Stock and Monsanto Common Stock shall not
receive two dividends, or fail to receive one dividend, for any single
calendar quarter with respect to their shares of PNU Common Stock and/or
Monsanto Common Stock and any shares of Monsanto Common Stock that any such
holder receives in exchange for such shares of PNU Common Stock in the Merger.
Section 5.13 Affiliates. (a) Not less than 45 days prior to the
Effective Time, PNU shall deliver to Monsanto a letter identifying all persons
who, in the judgment of PNU, may be deemed at the time this Agreement is
submitted for adoption by the stockholders of PNU, "affiliates" of PNU for
purposes of Rule 145 under the Securities Act or for purposes of qualifying
the Merger for pooling of interests accounting treatment under Opinion 16 of
the Accounting Principles Board and applicable SEC rules and regulations, and
such list shall be updated as necessary to reflect changes from the date
hereof. PNU shall use reasonable best efforts to cause each person identified
on such list to deliver to Monsanto not less than 30 days prior to the
Effective Time, a written agreement substantially in the form attached as
Exhibit 5.13 hereto (an "Affiliate Agreement").
(b) Not less than 45 days prior to the Effective Time, Monsanto shall
deliver to PNU a letter identifying all persons who, in the judgment of
Monsanto, may be deemed at the time this Agreement is submitted for adoption
by the stockholders of Monsanto, "affiliates" of Monsanto for purposes of
qualifying the Merger for pooling of interests accounting treatment under
Opinion 16 of the Accounting Principles Board and applicable SEC rules and
regulations, and such list shall be updated as necessary to reflect changes
from the date thereof. Monsanto shall use reasonable best efforts to cause
each person identified on such list to deliver to PNU not less than 30 days
prior to the Effective Time, a written agreement including the substance of
paragraphs (C), (D) and (E) of Exhibit 5.13 hereto.
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(c) If the Merger qualifies for pooling of interests accounting
treatment, Newco shall use its reasonable best efforts to publish no later
than 90 days after the end of the first month after the Effective Time in
which there are at least 30 days of post-Merger combined operations (which
month may be the month in which the Effective Time occurs), combined sales and
net income figures as contemplated by and in accordance with the terms of SEC
Accounting Series Release No. 135.
Section 5.14 Section 16 Matters . Prior to the Effective Time, PNU and
Monsanto shall take all such steps as may be required to cause any
dispositions of PNU Common Stock (including derivative securities with respect
to PNU Common Stock) or acquisitions of Monsanto Common Stock (including
derivative securities with respect to Monsanto Common Stock) resulting from
the transactions contemplated by Article I or Article II of this Agreement by
each individual who is subject to the reporting requirements of Section 16(a)
of the Exchange Act with respect to PNU or Monsanto, to be exempt under Rule
16b-3 promulgated under the Exchange Act.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger are
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Stockholder Approval. (i) Monsanto shall have obtained the
Required Monsanto Votes in connection with the approval of the Share Issuance
and the Charter Amendment by the stockholders of Monsanto and (ii) PNU shall
have obtained the Required PNU Vote in connection with the adoption of this
Agreement by the stockholders of PNU.
(b) No Injunctions or Restraints, Illegality. No Laws shall have been
adopted or promulgated, and no temporary restraining order, preliminary or
permanent injunction or other order issued by a court or other Governmental
Entity of competent jurisdiction shall be in effect, (i) having the effect of
making the Merger illegal or otherwise prohibiting consummation of the Merger
or (ii) which otherwise would reasonably be expected to have a Material
Adverse Effect on Newco and its Subsidiaries (including the Surviving
Corporation and its Subsidiaries), taken together after giving effect to the
Merger; provided, however, that the provisions of this Section 6.1(b) shall
not be available to any party whose failure to fulfill its obligations
pursuant to Section 5.4 shall have been the cause of, or shall have resulted
in, such order or injunction.
(c) HSR Act. The waiting period (and any extension thereof) applicable
to the Merger under the HSR Act shall have been terminated or shall have
expired.
(d) EU Antitrust. PNU and Monsanto shall have received in respect of
the Merger and any matters arising therefrom confirmation by way of a decision
from the
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Commission on the European Communities under Regulation 4064/89 (with or
without the initiation of proceedings under Article 6(1)(c) thereof) that the
Merger and any matters arising therefrom are compatible with the common
market.
(e) Governmental and Regulatory Approvals. Other than the filings
provided for under Section 1.5 and filings pursuant to the HSR Act and the EC
Merger Regulation (which are addressed in Section 6.1(c) and Section 6.1(d)),
all consents, approvals and actions of, filings with and notices to any
Governmental Entity required of PNU, Monsanto or any of their Subsidiaries to
consummate the Merger, the Share Issuance and the other transactions
contemplated hereby, the failure of which to be obtained or taken would
reasonably be expected to have a Material Adverse Effect on Newco and its
Subsidiaries (including the Surviving Corporation and its Subsidiaries), taken
together after giving effect to the Merger, shall have been obtained; provided
however, that the provisions of this Section 6.1(e) shall not be available to
any party whose failure to fulfill its obligations pursuant to Section 5.4
shall have been the cause of, or shall have resulted in, the failure to obtain
such consent or approval.
(f) NYSE Listing. The shares of Monsanto Common Stock to be issued in
the Merger and such other shares to be reserved for issuance in connection
with the Merger shall have been approved for listing on the NYSE, subject to
official notice of issuance.
(g) Effectiveness of the Form S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act. No stop order
suspending the effectiveness of the Form S-4 shall have been issued by the SEC
and no proceedings for that purpose shall have been initiated or threatened by
the SEC.
Section 6.2 Additional Conditions to Obligations of PNU. The
obligation of PNU to effect the Merger is subject to the satisfaction of, or
waiver by PNU, on or prior to the Closing Date of the following additional
conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Monsanto set forth in this Agreement that is qualified as to
Material Adverse Effect shall be true and correct, and each of the
representations and warranties of Monsanto set forth in this Agreement that is
not so qualified shall be true and correct in all material respects, in each
case as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date (except to the extent in either case that
such representations and warranties speak as of another date), and PNU shall
have received a certificate of Monsanto executed by the chief executive
officer and the chief financial officer of Monsanto to such effect.
(b) Performance of Obligations of Monsanto. Monsanto shall have
performed or complied with all agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date that are
qualified as to Material Adverse Effect and shall have performed or complied
in all material respects with all other agreements and covenants required to
be performed by it under this Agreement at or prior to the Closing Date that
are not so qualified, and PNU shall have received a
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certificate of Monsanto executed by the chief executive officer and the chief
financial officer of Monsanto to such effect.
(c) Tax Opinion. PNU shall have received from ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel to PNU, on or before the date the Form S-4 shall become effective and,
subsequently, on the Closing Date, a written opinion dated as of such dates
substantially in the form of Exhibit 6.2(c)(1). In rendering such opinion,
counsel to PNU shall be entitled to rely upon information, representations and
assumptions provided by PNU and Monsanto substantially in the form of Exhibits
6.2(c)(2) and 6.2(c)(3) (allowing for such amendments to the representations
as counsel to PNU deems reasonably necessary).
(d) Monsanto Rights Agreement. No Shares Acquisition Date or
Distribution Date shall have occurred pursuant to the Monsanto Rights
Agreement or the New Monsanto Rights Agreement.
(e) Governance. Ten designees of PNU shall have been elected as
directors of Monsanto, a person reasonably acceptable to Monsanto and PNU
shall have been appointed non-executive Chairman of Monsanto (it being
understood and agreed that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is such a person), a person
reasonably acceptable to Monsanto and PNU shall have been appointed Chief
Executive Officer of Monsanto (it being understood and agreed that ▇▇▇▇ ▇▇▇▇▇▇
is such a person), and the Newco Charter and the Newco By-laws shall have
become and remain effective.
Section 6.3 Additional Conditions to Obligations of Monsanto and
Merger Sub. The obligations of Monsanto and Merger Sub to effect the Merger
are subject to the satisfaction of, or waiver by Monsanto, on or prior to the
Closing Date of the following additional conditions:
(a) Representations and Warranties. Each of the representations and
warranties of PNU set forth in this Agreement that is qualified as to Material
Adverse Effect shall be true and correct, and each of the representations and
warranties of PNU set forth in this Agreement that is not so qualified shall
be true and correct in all material respects, in each case as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except to the extent in either case that such representations
and warranties speak as of another date), and Monsanto shall have received a
certificate of PNU executed by the chief executive officer and the chief
financial officer of PNU to such effect.
(b) Performance of Obligations of PNU. PNU shall have performed or
complied with all agreements and covenants required to be performed by it
under this Agreement at or prior to the Closing Date that are qualified as to
Material Adverse Effect and shall have performed or complied in all material
respects with all other agreements and covenants required to be performed by
it under this Agreement at or prior to the Closing Date that are not so
qualified, and Monsanto shall have received a certificate of PNU executed by
the chief executive officer and the chief financial officer of PNU to such
effect.
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(c) Tax Opinion. Monsanto shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
special tax counsel to Monsanto, on or before the date the Form S-4 shall
become effective and, subsequently, on the Closing Date, a written opinion
dated as of such dates substantially in the form of Exhibit 6.3(c)(1). In
rendering such opinion, counsel to Monsanto shall be entitled to rely upon
information, representations and assumptions provided by PNU and Monsanto
substantially in the form of Exhibits 6.2(c)(2) and 6.2(c)(3) (allowing for
such amendments to the representations as counsel to Monsanto deems reasonably
necessary).
(d) PNU Rights Agreement. No Stock Acquisition Date or Separation Time
shall have occurred pursuant to the PNU Rights Agreement.
ARTICLE VII
TERMINATION AND AMENDMENT
Section 7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, and except as provided below,
whether before or after approval of the matters presented in connection with
the Merger by the stockholders of Monsanto or PNU:
(a) by mutual written consent of PNU and Monsanto (which consent shall
not be unreasonably withheld (i) in the case of PNU, if the conditions set
forth in Sections 6.3(a) or 6.3(b) would not reasonably be expected to be
satisfied prior to the Termination Date (as defined in Section 7.1(b)) through
the exercise of PNU's reasonable best efforts or (ii) in the case of Monsanto,
if the conditions set forth in Section 6.2(a) or 6.2(b) would not reasonably
be expected to be satisfied prior to the Termination Date through the exercise
of Monsanto's reasonable best efforts);
(b) by either Monsanto or PNU if the Effective Time shall not have
occurred on or before December 31, 2000 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 7.1(b)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement (including without limitation such party's obligations
set forth in Section 5.4) has been the cause of, or resulted in, the failure
of the Effective Time to occur on or before the Termination Date;
(c) by either Monsanto or PNU if any Governmental Entity (i) shall
have issued an order, decree or ruling or taken any other action (which such
party shall have used its reasonable best efforts to resist, resolve or lift,
as applicable, in accordance with Section 5.4) permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable or (ii) shall have failed to issue an order, decree or
ruling or to take any other action (which order, decree, ruling or other
action such party shall have used its reasonable best efforts to obtain, in
accordance with Section 5.4), in the case of each of (i) and (ii) which is
necessary to fulfill the conditions
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set forth in subsections 6.1(c), (d) and (e), as applicable, and such denial
of a request to issue such order, decree, ruling or take such other action
shall have become final and nonappealable; provided, however, that the right
to terminate this Agreement under this Section 7.1(c) shall not be available
to any party whose failure to comply with Section 5.4 has been the cause of
such action or inaction;
(d) by either Monsanto or PNU if (i) the approval by the stockholders
of Monsanto required for the Share Issuance and the Charter Amendment shall
not have been obtained by reason of the failure to obtain the Required
Monsanto Votes or (ii) the approval by the stockholders of PNU required for
the consummation of the Merger shall not have been obtained by reason of the
failure to obtain the Required PNU Vote, in each case upon the taking of such
vote at a duly held meeting of stockholders of Monsanto or PNU, as the case
may be, or at any adjournment thereof;
(e) by PNU or Monsanto, as the case may be, if the Board of Directors
of the other party, prior to the other party's required stockholders approval,
shall approve or recommend a Superior Proposal pursuant to Section 5.5 or
shall resolve to take any of such actions;
(f) by PNU or Monsanto, as the case may be, at any time prior to its
required stockholders approval, upon three Business Days' prior notice to the
other party, if its Board of Directors shall have determined as of the date of
such notice that an Acquisition Proposal is a Superior Proposal; provided,
however, that (i) the terminating party shall have complied with Section 5.5,
(ii) prior to any such termination, the terminating party shall, if requested
by the other party in connection with a revised proposal by it, negotiate in
good faith for such three Business Day period with the other party and (iii)
the Board of Directors of the terminating party shall have concluded in good
faith, as of the effective date of such termination, after taking into account
any revised proposal by the other party during such three Business Day period,
that an Acquisition Proposal is a Superior Proposal and; provided, further,
that it shall be a condition to termination by the terminating party pursuant
to this Section 7.l(f) that the terminating party shall have made the payment
of the fee to the other party required by Section 7.2(b)(i)(A) or Section
7.2(c)(i)(A), as the case may be;
(g) by either party, if (A) the Board of Directors of PNU shall have
effected an Adverse Change in the PNU Recommendation (or resolved to take such
action) or (B) the Board of Directors of Monsanto shall have effected an
Adverse Change in the Monsanto Recommendation (or resolved to take such
action);
(h) by Monsanto, if a Stock Acquisition Date shall have occurred
pursuant to the PNU Rights Agreement; or
(i) by PNU, if a Share Acquisition Date shall have occurred pursuant
to the Monsanto Rights Agreement or the New Monsanto Rights Agreement.
Section 7.2 Effect of Termination. (a) In the event of termination of
this Agreement by either Monsanto or PNU as provided in Section 7.1, this
Agreement
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shall forthwith become void and there shall be no liability or obligation on
the part of PNU or Monsanto or their respective officers or directors except
with respect to Section 3.1(m), Section 3.2(m), Section 4.3, the second
sentence of Section 5.3, Section 5.7, this Section 7.2 and Article VIII, which
provisions shall survive such termination, and except that, notwithstanding
anything to the contrary contained in this Agreement, neither PNU nor Monsanto
shall be relieved or released from any liabilities or damages arising out of
its willful material breach of this Agreement.
(b) (i) PNU shall pay Monsanto the sum of $575 million (the "PNU
Alternative Transaction Fee") if this Agreement is terminated solely as
follows: (A) if PNU shall terminate this Agreement pursuant to Section 7.1(f),
(B) if (I) either party shall terminate this Agreement pursuant to Section
7.1(d)(ii) due to the failure of PNU's stockholders to adopt this Agreement
and approve the transactions contemplated hereby, (II) at any time after the
date of this Agreement and at or before the date of the PNU Stockholders
Meeting a Business Combination (as defined in Section 7.2(d)) proposal with
respect to PNU shall have been publicly announced or otherwise communicated to
the Board of Directors of PNU, and (III) within twelve months of the
termination of this Agreement, PNU enters into a definitive agreement with any
third party with respect to a Business Combination or a Business Combination
with respect to PNU is consummated, (C) if Monsanto shall terminate this
Agreement pursuant to Section 7.1(e) or 7.1(h), (D) if (I) either party shall
terminate this Agreement pursuant to Section 7.1(b), (II) at any time after
the date of this Agreement and at or before the Termination Date there shall
exist a Business Combination proposal with respect to PNU, (III) following the
existence of such Business Combination proposal and prior to any such
termination, PNU shall have intentionally breached (and not cured after notice
thereof) any of its covenants or agreements set forth in this Agreement in any
material respect, which breach shall have materially contributed to the
failure of the Effective Time to occur on or before the Termination Date and
(IV) within twelve months of any such termination of this Agreement, PNU shall
enter into a definitive agreement with any third party with respect to a
Business Combination or a Business Combination with respect to PNU is
consummated, or (E) if (I) either party shall terminate this Agreement
pursuant to 7.1(g)(A), (II) at any time after the date of this Agreement and
at or before the Adverse Change in the PNU Recommendation a Business
Combination proposal with respect to PNU shall have been publicly announced or
otherwise communicated to the Board of Directors of PNU, and (III) within
twelve months of any such termination of this Agreement, PNU shall enter into
a definitive agreement with any third party with respect to a Business
Combination or a Business Combination with respect to PNU is consummated,
provided that, in the case of this subclause (E) of Section 7.2(b)(i), if the
PNU Termination Fee (as defined in Section 7.2(b)(ii)) has previously been
paid in connection with the termination of this Agreement pursuant to Section
7.1(g)(A), then the amount of such fee shall be credited to the PNU
Alternative Transaction Fee.
(ii) PNU shall pay Monsanto the amount of $250 million (the "PNU
Termination Fee") if this Agreement is terminated by either party pursuant to
Section 7.1(g)(A) in circumstances in which the PNU Alternative Transaction
Fee is not then payable unless at the time the Board of Directors of PNU
effected an Adverse Change in the PNU Recommendation (or resolved to take such
action) Monsanto shall be in
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material breach of its representations, warranties or covenants contained in
this Agreement.
(c) (i) Monsanto shall pay PNU the sum of $575 million (the "Monsanto
Alternative Transaction Fee") if this Agreement is terminated solely as
follows: (A) if Monsanto shall terminate this Agreement pursuant to Section
7.1(f), (B) if (I) either party shall terminate this Agreement pursuant to
Section 7.1(d)(i) due to the failure of Monsanto's stockholders to approve the
Share Issuance or the Charter Amendment, (II) at any time after the date of
this Agreement and at or before the date of the Monsanto Stockholders Meeting
a Business Combination proposal with respect to Monsanto shall have been
publicly announced or otherwise communicated to the Board of Directors of
Monsanto and (III) within twelve months of the termination of this Agreement,
Monsanto enters into a definitive agreement with any third party with respect
to a Business Combination proposal or a Business Combination with respect to
Monsanto is consummated, (C) if PNU shall terminate this Agreement pursuant to
Section 7.1(e) or 7.1(i), (D) if (I) either party shall terminate this
Agreement pursuant to Section 7.1(b), (II) at any time after the date of this
Agreement and at or before the Termination Date there shall exist a Business
Combination proposal with respect to Monsanto, (III) following the existence
of such a Business Combination proposal and prior to any such termination,
Monsanto shall have intentionally breached (and not cured after notice
thereof) any of its covenants or agreements set forth in this Agreement in any
material respect which breach shall have materially contributed to the failure
of the Effective Time to occur on or before the Termination Date and (IV)
within twelve months of any such termination of this Agreement, Monsanto shall
enter into a definitive agreement with any third party with respect to a
Business Combination proposal or a Business Combination with respect to
Monsanto is consummated, or (E)(I) if either party shall terminate this
Agreement pursuant to 7.1(g)(B), (II) at any time after the date of this
Agreement and at or before the termination of this Agreement relating to the
Adverse Change in the Monsanto Recommendation a Business Combination proposal
with respect to Monsanto, shall have been publicly announced or otherwise
communicated to the Board of Directors of Monsanto and (III) within twelve
months of any such termination of this Agreement, Monsanto shall enter into a
definitive agreement with any third party with respect to a Business
Combination or a Business Combination with respect to Monsanto is consummated,
provided that, in the case of this subclause (E) of Section 7.2(c)(i), if the
Monsanto Termination Fee (as defined in section 7.2(c)(ii)) has previously
been paid in connection with the termination of this Agreement pursuant to
Section 7.1(g)(B), then the amount of such fee shall be credited to the
Monsanto Alternative Transaction Fee.
(ii) Monsanto shall pay PNU the amount of $250 million (the "Monsanto
Termination Fee") if this Agreement is terminated by either party pursuant to
Section 7.1(g)(B) in circumstances in which the Monsanto Alternative
Transaction Fee is not then payable unless at the time the Board of Directors
of Monsanto effected an Adverse Change in the Monsanto Recommendation (or
resolved to take such action) PNU shall be in material breach of its
representations, warranties or covenants contained in this Agreement.
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(d) For the purposes of this Section 7.2, "Business Combination" means
with respect to PNU or Monsanto, as the case may be, (i) a merger,
reorganization, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
such party as a result of which either (A) such party's stockholders prior to
such transaction (by virtue of their ownership of such party's shares) in the
aggregate cease to own at least 60% of the voting securities of the entity
surviving or resulting from such transaction (or the ultimate parent entity
thereof) or, regardless of the percentage of voting securities held by such
stockholders, if any Person shall beneficially own, directly or indirectly, at
least 30% of the voting securities of such ultimate parent entity, or (B) the
individuals comprising the board of directors of such party prior to such
transaction do not constitute a majority of the board of directors of such
ultimate parent entity, (ii) a sale, lease, exchange, transfer or other
disposition of at least 50% of the assets of such party and its Subsidiaries,
taken as whole, in a single transaction or a series of related transactions,
or (iii) the acquisition, directly or indirectly, by a Person of beneficial
ownership of 30% or more of the common stock of such party whether by merger,
consolidation, share exchange, business combination, tender or exchange offer
or otherwise (other than a merger, reorganization, consolidation, share
exchange, business combination, recapitalization, liquidation, dissolution or
similar transaction upon the consummation of which such party's stockholders
would in the aggregate beneficially own greater than 60% of the voting
securities of such Person).
(e) The PNU Alternative Transaction Fee and the Monsanto Alternative
Transaction Fee required to be paid pursuant to Section 7.2(b)(i) or
7.2(c)(i), as the case may be, shall be paid prior to, and shall be a
pre-condition to the effectiveness of, termination of this Agreement pursuant
to Section 7.1(f). Any other payment required to be made pursuant to Section
7.2(b) or 7.2(c) shall be made not later than two Business Days after the
entering into of a definitive agreement with respect to, or the consummation
of, a Business Combination, as applicable, or a termination pursuant to
Section 7.1(e), Section 7.1(g), Section 7.1(h) or Section 7.1(i). In no event
shall more than one PNU Alternative Transaction Fee or Monsanto Alternative
Transaction Fee be made.
Section 7.3 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection
with the Merger by the stockholders of Monsanto and PNU, but, after any such
approval, no amendment shall be made which by law or in accordance with the
rules of any relevant stock exchange requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
Section 7.4 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the time
for the performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions
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contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and other
agreements in this Agreement or in any instrument delivered pursuant to this
Agreement, including any rights arising out of any breach of such
representations, warranties, covenants and other agreements, shall survive the
Effective Time, except for those covenants and agreements contained herein and
therein that by their terms apply or are to be performed in whole or in part
after the Effective Time and this Article VIII.
Section 8.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by telecopy or telefacsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service, or (c) on the tenth
Business Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:
(a) if to PNU to
Pharmacia & Upjohn, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇, Esq.
with a copy to
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(b) if to Monsanto to
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Monsanto Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: R. ▇▇▇▇▇▇▇ ▇▇▇, III, Esq.
with a copy to
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Section 8.3 Interpretation. When a reference is made in this Agreement
to Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
Section 8.4 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
Section 8.5 Entire Agreement; No Third Party Beneficiaries. (a) This
Agreement, the Stock Option Agreements and the Confidentiality Agreement
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement, other than Section 5.8 (which is intended to be for the benefit of
the Persons covered thereby and may be enforced by such Persons).
Section 8.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware (without giving
effect to choice of law principles thereof).
Section 8.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force
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and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
Section 8.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other party, and any attempt to make
any such assignment without such consent shall be null and void. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors
and assigns.
Section 8.9 Submission to Jurisdiction; Waivers. Each of PNU and
Monsanto irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in
respect hereof brought by the other party hereto or its successors or assigns
may be brought and determined in the Chancery or other Courts of the State of
Delaware, and each of PNU and Monsanto hereby irrevocably submits with regard
to any such action or proceeding for itself and in respect to its property,
generally and unconditionally, to the nonexclusive jurisdiction of the
aforesaid courts. Each of PNU and Monsanto hereby irrevocably waives, and
agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a) any
claim that it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure to lawfully serve process, (b)
that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise), and (c) to the
fullest extent permitted by applicable law, that (i) the suit, action or
proceeding in any such court is brought in an inconvenient forum, (ii) the
venue of such suit, action or proceeding is improper and (iii) this Agreement,
or the subject matter hereof, may not be enforced in or by such courts.
Section 8.10 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed
that the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled
at law or in equity.
Section 8.11 Definitions. As used in this Agreement:
(a) "affiliate" means (except as specifically otherwise defined), as
to any person, any other person which, directly or indirectly, controls, or is
controlled by, or is under common control with, such person. As used in this
definition, "control" (including, with its correlative meanings, "controlled
by" and "under common control
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with") means the possession, directly or indirectly, of the power to direct or
cause the direction of management or policies of a person, whether through the
ownership of securities or partnership or other ownership interests, by
contract or otherwise.
(b) "beneficial ownership" or "beneficially own" shall have the
meaning under Section 13(d) of the Exchange Act and the rules and regulations
thereunder.
(c) "Board of Directors" means the Board of Directors of any specified
Person and any committees thereof.
(d) "Business Day" means any day on which banks are not required or
authorized to close in the City of New York.
(e) "Known or "Knowledge" means, with respect to any party, the
knowledge of such party's executive officers after reasonable inquiry.
(f) "Material Adverse Effect" means, with respect to any entity, any
event, change, circumstance or effect that is or is reasonably likely to be
materially adverse to (i) the business, financial condition or results of
operations of such entity and its Subsidiaries taken as a whole, other than
any event, change, circumstance or effect relating (x) to the economy or
financial markets in general or (y) in general to the industries in which PNU
or Monsanto operate and not specifically relating to PNU or Monsanto or (ii)
the ability of such party to consummate the transactions contemplated by this
Agreement.
(g) "Monsanto Agribusiness" means the Agricultural Products business
of Monsanto, all as more fully described in Monsanto's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 and its Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, 1999, June 30, 1999 and
September 30, 1999.
(h) A "Monsanto Employee Benefit Plan" means any employee benefit
plan, program, policy, practices, or other arrangement providing benefits to any
current or former employee, officer or director of Monsanto or any of its
Subsidiaries or any beneficiary or dependent thereof that is sponsored or
maintained by Monsanto or any of its Subsidiaries or to which Monsanto or any
of its Subsidiaries contributes or is obligated to contribute, whether or not
written, including without limitation any employee welfare benefit plan within
the meaning of Section 3(1) of ERISA, any employee pension benefit plan within
the meaning of Section 3(2) of ERISA (whether or not such plan is subject to
ERISA) and any bonus, incentive, deferred compensation, vacation, stock
purchase, stock option, severance, employment, change of control or fringe
benefit plan, program or agreement.
(i) "Monsanto Nutrition and Consumer Businesses" means the alginates,
artificial sweetner and biogum businesses that have been reclassified as
discontinued operations in the financial statements of Monsanto.
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(j) A "Monsanto Plan" means any Monsanto Employee Benefit Plan other
than a Multiemployer Plan.
(k) A "Multiemployer Plan" means any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA.
(l) "Newco" is sometimes used in the Agreement to refer to Monsanto
following the Merger.
(m) "Person" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).
(n) A "PNU Employee Benefit Plan" means any employee benefit plan,
program, policy, practices, or other arrangement providing benefits to any
current or former employee, officer or director of PNU or any of its
Subsidiaries or any beneficiary or dependent thereof that is sponsored or
maintained by PNU or any of its Subsidiaries or to which PNU or any of its
Subsidiaries contributes or is obligated to contribute, whether or not
written, including without limitation any employee welfare benefit plan within
the meaning of Section 3(1) of ERISA, any employee pension benefit plan within
the meaning of Section 3(2) of ERISA (whether or not such plan is subject to
ERISA) and any bonus, incentive, deferred compensation, vacation, stock
purchase, stock option, severance, employment, change of control or fringe
benefit plan, program or agreement.
(o) A "PNU Plan" means any PNU Employee Benefit Plan other than a
Multiemployer Plan.
(p) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by
such party or any Subsidiary of such party do not have a majority of the
voting interests in such partnership) or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary voting
power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by any one or more
of its Subsidiaries, or by such party and one or more of its Subsidiaries.
(q) "Superior Proposal" means with respect to PNU or Monsanto, as the
case may be, a written proposal made by a Person other than either such party
which is for (I) (i) a merger, reorganization, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving such party as a result of which either (A) such party's
stockholders prior to such transaction (by virtue of their ownership of such
party's shares) in the aggregate cease to own at least 50% of the voting
securities of the entity surviving or resulting from such transaction (or the
ultimate parent entity thereof) or (B) the individuals comprising the board of
directors of such party prior to such transaction do not constitute a majority
of
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the board of directors of such ultimate parent entity, (ii) a sale, lease,
exchange, transfer or other disposition of at least 50% of the assets of such
party and its Subsidiaries, taken as a whole, in a single transaction or a
series of related transactions, or (iii) the acquisition, directly or
indirectly, by a Person of beneficial ownership of 50% or more of the common
stock of such party whether by merger, consolidation, share exchange, business
combination, tender or exchange offer or otherwise (other than a merger,
consolidation, share exchange, business combination, tender or exchange offer
or other transaction upon the consummation of which such party's stockholders
would in the aggregate beneficially own greater than 60% of the voting
securities of such Person), and which is (II) otherwise on terms which the
Board of Directors of such party in good faith concludes (after consultation
with its financial advisors and outside counsel), taking into account, among
other things, all legal, financial, regulatory and other aspects of the
proposal and the Person making the proposal, (i) would, if consummated, result
in a transaction that is more favorable to its stockholders (in their
capacities as stockholders), from a financial point of view, than the
transactions contemplated by this Agreement (after giving effect, for purposes
of clause (iii) of Section 7.1(f), to any revised proposal made by the other
party prior to the end of the three business-day period referred to in clause
(ii) of Section 7.1(f)) and (ii) is reasonably capable of being completed.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
MONSANTO COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and
Chief Executive Officer
MP SUB, INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
PHARMACIA & UPJOHN, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇
-------------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇
Title: Chairman of the Board