<PAGE>
Exhibit 2.1
SEPARATION AGREEMENT
BY AND BETWEEN
PHARMACIA CORPORATION
AND
MONSANTO COMPANY
DATED AS OF SEPTEMBER 1, 2000
<PAGE>
TABLE OF CONTENTS
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ARTICLE I
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DEFINITIONS................................................................................2
1.01 General..............................................................2
1.02 References to Time..................................................15
ARTICLE II
THE SEPARATION............................................................................15
2.01 Transfer of Assets and Assumption of Liabilities....................15
2.02 Certificate of Incorporation; Bylaws................................16
2.03 Financing Arrangements Effective on Separation Date.................16
2.04 Intercompany Accounts...............................................16
2.05 Monsanto Support Agreements.........................................17
ARTICLE III
SURVIVAL, ASSUMPTION AND INDEMNIFICATION..................................................17
3.01 Survival of Agreements..............................................17
3.02 Taxes...............................................................17
3.03 Assumption and Indemnification; Effect of Recovery Rights
Against Insurers or Other Third Parties.............................17
3.04 Procedure for Assumption or Indemnification.........................20
ARTICLE IV
CERTAIN ADDITIONAL COVENANTS..............................................................21
4.01 Further Assurances..................................................21
4.02 Pharmacia Employee Political Action Committee.......................24
4.03 Receivables Collection and Other Payments...........................24
4.04 Limited Leases, Licenses and Benefits of Certain Assets.............25
4.05 Monsanto's Use of Monsanto Assets Subject to IRBS...................25
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ARTICLE V
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ACCESS TO INFORMATION.....................................................................25
5.01 Provision of Corporate Records......................................25
5.02 Access to Information...............................................26
5.03 Litigation Support and Production of Witnesses......................26
5.04 Reimbursement.......................................................27
5.05 Retention of Records................................................27
5.06 Privileged Information..............................................27
5.07 Confidentiality.....................................................29
ARTICLE VI
DISPUTE RESOLUTION........................................................................29
6.01 Step Process........................................................29
6.02 Negotiation.........................................................29
6.03 Mediation...........................................................30
6.04 Arbitration.........................................................30
6.05 Injunctive Relief...................................................30
6.06 Remedies............................................................30
6.07 Expenses............................................................30
ARTICLE VII
NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS..............................................30
7.01 No Representations or Warranties; Exceptions........................30
ARTICLE VIII
INSURANCE.................................................................................31
8.01 Insurance Policies and Rights.......................................31
8.02 Administration and Reserves.........................................32
8.03 Allocation of Insurance Proceeds; Cooperation.......................32
8.04 Reimbursement of Expenses...........................................33
8.05 Attempt to Obtain Insurer Endorsements..............................33
8.06 No Reduction of Coverage............................................33
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ARTICLE IX
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SHARED CONTINGENT GAINS AND LIABILITIES....................................................33
9.01 Shared Contingent Gains.............................................33
9.02 Shared Contingent Liabilities.......................................34
9.03 Payments............................................................34
9.04 Procedures to Determine Status of Shared Contingent Gains
and Liabilities.....................................................35
ARTICLE X
NON-COMPETITION............................................................................35
10.01 Monsanto Non-Compete................................................35
10.02 Pharmacia Non-Compete...............................................36
ARTICLE XI
MISCELLANEOUS..............................................................................36
11.01 Conditions to Obligations...........................................36
11.02 Complete Agreement..................................................36
11.03 Other Agreements....................................................36
11.04 Expenses............................................................36
11.05 Governing Law.......................................................36
11.06 Notices.............................................................36
11.07 Amendment and Modification..........................................37
11.08 Successors and Assigns; No Third Party Beneficiaries................37
11.09 Counterparts........................................................38
11.10 Interpretation......................................................38
11.11 Legal Enforceability................................................38
11.12 References; Construction............................................38
</TABLE>
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SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT, dated as of September 1, 2000 (as amended
and supplemented pursuant to the terms hereof, this "Agreement"), is by and
between Pharmacia Corporation, a Delaware corporation ("Pharmacia"), and
Monsanto Company, a Delaware corporation ("Monsanto").
W I T N E S S E T H:
--------------------
WHEREAS, the Boards of Directors of Pharmacia and Monsanto have each
determined that it would be appropriate and desirable for Pharmacia to
contribute and transfer to Monsanto, and for Monsanto to receive and assume,
directly or indirectly, certain assets and liabilities, as hereinafter described
(the "Separation");
WHEREAS, Pharmacia currently owns all of the issued and outstanding
common stock of Monsanto;
WHEREAS, Pharmacia and Monsanto currently contemplate that Monsanto
will make an initial public offering ("IPO") of an amount of its common stock
pursuant to a registration statement on Form S-1 filed under the Securities Act
of 1933, as amended (the "IPO Registration Statement"), that will reduce
Pharmacia's ownership of Monsanto to not less than 80.1%;
WHEREAS, Monsanto intends to use the proceeds of the IPO (including
any proceeds from any sale of shares pursuant to the exercise of the managing
underwriters' over-allotment option), net of underwriting discounts and
commissions, to repay a portion of the commercial paper obligations issued by
Pharmacia that Monsanto will assume from Pharmacia at the closing of the IPO
(the "IPO Closing Date");
WHEREAS, Pharmacia and Monsanto intend that the contribution and
assumption of assets and liabilities will qualify as a tax-free reorganization
under Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended
(together with the regulations promulgated thereunder, the "Code"), and that
this Agreement is intended to be, and is hereby adopted as, a plan of
reorganization under Section 368 of the Code; and
WHEREAS, the parties intend in this Agreement, including the
Exhibits and Schedules hereto, and the Other Agreements (as defined below) to
set forth the principal arrangements between them regarding the Separation.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
1.01 GENERAL. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any demand, action, suit, countersuit, arbitration, inquiry,
------
proceeding or investigation by or before any Governmental Authority or any
arbitration or mediation tribunal.
Affiliate: with respect to any specified Person, a Person that
---------
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person; provided,
however, that for purposes of this Agreement, no member of either Group shall be
deemed to be an Affiliate of any member of the other Group.
Arbitration Act: the United States Arbitration Act, 9 U.S.C.
---------------
ss.ss. 1-14, 201-208, as the same may be amended from time to time.
Assets: any and all assets, properties and rights (including
------
goodwill), wherever located (including in the possession of vendors or other
third parties or elsewhere), whether real, personal or mixed, tangible,
intangible or contingent, in each case whether or not recorded or reflected or
required to be recorded or reflected on the books and records or financial
statements of any Person, including, without limitation, the following:
(i) all accounting and other books, records and files
whether in paper, microfilm, microfiche, computer tape or disc,
magnetic tape or any other form;
(ii) all apparatus, computers and other electronic data
processing equipment, fixtures, trade fixtures, machinery,
equipment, capital and other spares, furniture, office equipment,
automobiles, trucks, aircraft, rolling stock, vessels, motor
vehicles, trailers and other transportation equipment, special and
general tools, test devices, prototypes and models and any other
tangible personal property;
(iii) all inventories of materials, raw materials,
catalysts, precious metals, stores inventories, supplies,
work-in-process, consigned goods and finished goods and products and
product samples;
(iv) all interests in real property of whatever nature,
including easements, leases and licenses, whether as owner,
mortgagee or holder of a Security Interest in real property, lessor,
sublessor, lessee, sublessee or otherwise;
(v) all buildings and other improvements to real
property and all leasehold improvements;
(vi) all interests in any capital stock, bonds, notes,
debentures or other securities issued by any Subsidiary or any other
Person, all loans, advances or
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other extensions of credit or capital contributions to any
Subsidiary or any other Person, all certificates of deposit,
bankers' acceptances, certificates of interest or participation in
profit sharing agreements, collateral trust certificates,
preorganization certificates or subscriptions, transferable shares,
investment contracts, voting trust certificates, fractional
undivided interests in oil, gas or other mineral rights, puts,
calls, straddles, options and other securities of any kind;
(vii) all license agreements, leases of personal
property and other leases, operating agreements, open purchase
orders for raw materials, supplies, parts or services, unfilled
orders for the manufacture or sale of products, other sales or
purchase agreements, other commitments or arrangements, permits,
distribution arrangements, and other contracts, agreements or
commitments;
(viii) all deposits, letters of credit and performance
and surety bonds;
(ix) all technical information, data, specifications,
research and development information, engineering drawings,
operating and maintenance manuals, and materials and analyses
prepared by consultants and other third parties; environmental
clean-up technology, safety and industrial hygiene methods and
technology;
(x) all technology, domestic and foreign patents,
statutory, common law and registered copyrights, trade names,
registered and unregistered trademarks, service marks, service
names, trade styles, product bar codes and associated goodwill, and
registrations and applications for any of the foregoing, mask works,
trade secrets, inventions, formulas, processes, designs, know-how,
or other data or information, confidential information, other
proprietary information and licenses from third Persons granting the
right to use any of the foregoing and other rights in, to and under
the foregoing (it being understood that the transfer of Assets
described in this clause (x) shall be made pursuant to the
Intellectual Property Agreements);
(xi) all computer applications, programs and other
software and databases (including all embodiments or fixations
thereof and related documentation, registrations and franchises, and
all additions, improvements, enhancements, updates and accessions
thereto), all technical manuals and documentation made in connection
with the foregoing, and the right to sue for past infringement
thereof, and all licenses and rights with respect to the foregoing
or of like nature, including operating software, network software,
firmware, middleware, design software, design tools, systems
documentation and instructions;
(xii) all cost information, sales and pricing data,
customer prospect lists, supplier records, customer and supplier
lists, customer and vendor data, correspondence and lists, product
literature, artwork, design, development and manufacturing files,
vendor and customer drawings, formulations and specifications,
quality records and reports, lists of advertisers, records
pertaining
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to advertisers and accounts, and other books, records, studies,
surveys, reports, plans and document forms and any other business
information;
(xiii) all prepayments or prepaid expenses, trade
accounts and other accounts and notes receivable and all other
current assets;
(xiv) the right to receive mail, payments on accounts
receivable and other communications;
(xv) all rights under contracts, agreements, warranties
or guaranties, all claims or rights or judgments against any Person,
all rights in connection with any bids or offers and all claims,
choses in action, rights of recovery and rights of set-off or
similar rights, whether accrued or contingent, refunds and deposits;
(xvi) all rights under insurance policies and all rights
in the nature of insurance, indemnification or contribution;
(xvii) all licenses, permits, approvals and
authorizations which have been issued by any Governmental Authority;
(xviii) advertising materials and other printed or
written materials;
(xix) employee contracts, including any rights
thereunder to restrict an employee or former employee from competing
in certain respects, and personnel and medical files and records;
(xx) cash, cash equivalents, bank accounts, lock boxes
and other deposit arrangements; and
(xxi) interest rate, currency, commodity or other swap,
collar, cap, floor, or other hedging or similar agreements or
arrangements.
Beneficiary: as defined in Section 4.01(d) hereof.
-----------
Business Day: any day other than a Saturday, a Sunday or a day on
------------
which banking institutions located in the States of Missouri, New Jersey or New
York are authorized or obligated by law or executive order to close.
Business Transfer Agreements: the agreements (i) which have been or
----------------------------
will be entered into between (a) certain wholly-owned Monsanto Subsidiaries
incorporated, or having a branch or presence, outside the United States and (b)
certain wholly-owned Pharmacia Subsidiaries incorporated, or having a branch or
presence, outside the United States, providing for the separation of Monsanto
Assets and Monsanto Liabilities from the Pharmacia Assets and the Pharmacia
Liabilities outside the United States, including without limitation, those
agreements which are required by local law or are executed in connection with or
to implement such separation; and (ii) which will provide for the assignment
from the Pharmacia Group to the Monsanto Group of certain Monsanto Assets and
the assumption by the Monsanto Group of certain Monsanto Liabilities in
accordance with Section 2.01.
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Claims Administration: the processing of claims made under the
---------------------
Insurance Policies, including the reporting of claims to the insurance carrier,
management and defense of claims and providing for appropriate releases upon
settlement of claims.
Claims Handling Agreement: any third party administrator or claims
-------------------------
handling agreement of any kind or nature to which any member of either Group is
directly or indirectly a party, in effect as of the date hereof, related to the
handling of Insured Monsanto Claims.
Code: as defined in the recitals to this Agreement.
----
Contingent Gain: any claim or other right of any member of any
---------------
Group, whenever asserted, against any Person other than any member of any Group
if and to the extent that (i) such claim or right has accrued as of or prior to
the Separation Date (as described below) and (ii) a senior vice president,
treasurer or more senior officer of Pharmacia did not have actual knowledge of
the existence of the claim or right against such other Person as of the
Separation Date. A claim or right meeting the foregoing definition shall be
considered a Contingent Gain regardless of whether there was any Action pending,
threatened or contemplated as of the Separation Date with respect thereto. For
purposes of the foregoing, a claim or right shall be deemed to have accrued as
of the Separation Date if all the elements of the claim necessary for its
assertion shall have occurred on or prior to the Separation Date, such that the
claim or right, were it asserted in an Action on or prior to the Separation
Date, would not be dismissed by a court on ripeness or similar grounds.
Notwithstanding the foregoing, none of (i) any Insurance Proceeds, (ii) any
Excluded Monsanto Assets, (iii) any reversal of any litigation or other reserve
or (iv) any matters relating to Taxes (which are governed by the Tax Sharing
Agreement) shall be deemed to be a Contingent Gain.
Contingent Liability: any Liability of any member of any Group,
--------------------
whenever asserted, to any Person other than any member of any Group, if and to
the extent that (i) such Liability has accrued as of or prior to the Separation
Date (as described below) and (ii) a senior vice president, treasurer or more
senior officer of Pharmacia did not have actual knowledge of the existence of
the obligation of such member as of the Separation Date (it being understood
that the existence of a litigation or other reserve with respect to any
Liability shall not be deemed to have been sufficient in and of itself to have
provided actual notice of the existence of such obligation). In the case of any
Liability a portion of which had accrued as of the Separation Date and a portion
of which accrues after the Separation Date, only that portion that had accrued
(as described below) as of the Separation Date shall be considered a Contingent
Liability. For purposes of the foregoing, a Liability shall be deemed to have
accrued as of the Separation Date if all the elements of the claim necessary for
the assertion of a claim with respect to such Liability shall have occurred on
or prior to the Separation Date such that the claim, were it asserted in an
Action on or prior to the Separation Date, would not be dismissed by a court on
ripeness or similar grounds. For purposes of clarification of the foregoing, the
parties agree that no Liability relating to, arising out of or resulting from
any obligation of any Person to perform the executory portion of any contract or
agreement existing as of the Separation Date, or to satisfy any obligation
accrued under any Plan (as defined in the Employee Benefits and Compensation
Allocation Agreement) as of the Separation Date, shall be deemed to be a
Contingent Liability. Notwithstanding the foregoing, none of (i) any
retrospectively rated premiums for coverage under the Insurance Policies, (ii)
any Excluded Monsanto Liabilities, (iii) any increase of any
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litigation or other reserve or (iv) any matters relating to Taxes (which are
governed by the Tax Sharing Agreement) shall be deemed to be a Contingent
Liability.
Corporate Agreement: the agreement which has been or will be entered
-------------------
into on or prior to the Separation Date between Pharmacia and Monsanto
substantially in the form attached hereto as Exhibit C-1 providing for corporate
governance, registration and certain other shareholder rights of Pharmacia, with
such changes as may be mutually agreed to by Pharmacia and Monsanto.
Credit Agreements: The U.S. $1,000,000,000 364-Day Credit Agreement,
-----------------
and the U.S. $500,000,000 Five Year Credit Agreement, each dated as of August 8,
2000, and each entered into among Monsanto Company and Pharmacia Corporation as
Borrowers, the initial lenders named therein, Citibank, N.A. as administrative
agent, and the other agents named therein.
Delayed Transfer Assets: (i) any Monsanto Assets, not including
-----------------------
Intercompany Items, that cannot practicably be transferred to or retained by a
member of the Monsanto Group on or prior to the Separation Date or for which
this Agreement or any Other Agreements expressly provide for transfer to the
Monsanto Group after the Separation Date, or (ii) any Pharmacia Assets, not
including Intercompany Items, that cannot practicably be transferred to or
retained by a member of the Pharmacia Group on or prior to the Separation Date
or for which this Agreement or any Other Agreements expressly provide for
transfer to the Pharmacia Group after the Separation Date.
Delayed Transfer Liabilities: (i) any Monsanto Liabilities, not
----------------------------
including Intercompany Items, that cannot practicably be transferred to or
retained by a member of the Monsanto Group on or prior to the Separation Date or
for which this Agreement or any Other Agreements expressly provide for
assumption by the Monsanto Group after the Separation Date, or (ii) any
Pharmacia Liabilities, not including Intercompany Items, that cannot practicably
be transferred to or retained by a member of the Pharmacia Group on or prior to
the Separation Date or for which this Agreement or any Other Agreements
expressly provide for assumption by the Pharmacia Group after the Separation
Date.
Dispute: as defined in Section 6.01 hereof.
-------
Employee Benefits and Compensation Allocation Agreement: an employee
-------------------------------------------------------
benefits and compensation allocation agreement to be entered into between
Pharmacia and Monsanto substantially in the form attached hereto as Exhibit E-1,
with such changes as may be mutually agreed to by Pharmacia and Monsanto.
Excluded Monsanto Assets: those Assets listed on Schedule E-1.
------------------------
Excluded Monsanto Liabilities: all Liabilities related to the IRBs
-----------------------------
and those Liabilities listed on Schedule E-2.
Ex-U.S. Debt: outstanding, non-intercompany debt for which Monsanto
------------
Subsidiaries organized under the laws of jurisdictions outside the United States
or operating outside the United States are the obligors and Pharmacia is in
certain cases the guarantor, and for which,
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from and after the Separation Date, such Monsanto Subsidiaries will continue as
obligors and, if Pharmacia is the guarantor, Monsanto will indemnify Pharmacia
as guarantor.
Financing Facility: the commercial paper facility, including the
------------------
Issuing and Paying Agency and Assignment and Assumption Agreement, to be entered
into prior to the IPO Closing Date by Pharmacia, Monsanto, and an agent or
co-agents selected by Pharmacia, pursuant to which, prior to the IPO Closing
Date, Pharmacia will issue assumable commercial paper equal to:
(1) $1.8 billion, plus
(2) cash held by the Monsanto Group on the Separation
Date, net of overdrafts, plus
(3) the projected cash flow of the Monsanto Group to be
available for repayment of debt principal for the period from
September 1, 2000 through December 31, 2000, as reflected in an
updated forecast to be agreed upon between Monsanto and Pharmacia
prior to the printing of the preliminary prospectus for the IPO,
plus
(4) the amount of any intercompany receivables from a
member of the Pharmacia Group held by the Monsanto Group, less any
intercompany payables owed to a member of the Pharmacia Group by the
Monsanto Group, in each case arising from the asset transfers in
connection with the Separation, plus
(5) the product of (a) (the initial public offering
price per share less the underwriters' discount per share) and (b)
(the number of shares of Monsanto Common Stock offered in the IPO,
including 50% of the shares issuable upon exercise of the
underwriters' overallotment option), less
(6) the amortized principal amount as of the Separation
Date of the Medium Term Notes and the Ex-U.S. Debt assumed or
retained by the Monsanto Group on the Separation Date.
Foreign Exchange Rate: with respect to any currency other than
---------------------
United States dollars as of any date, the average of the bid and asked rates at
9:00 a.m., New York City time, on such date at which such currency may be
exchanged for United States dollars as quoted by Citibank, N.A., except that,
with respect to any Indemnifiable Loss covered by insurance, the Foreign
Exchange Rate for such currency shall be determined as set forth in Section
3.03(c)(2).
Former Agriculture Business: those businesses and operations that
---------------------------
were formerly operated by Pharmacia as part of its agricultural or chemical
subsidiaries, units or divisions and which have been sold, or otherwise disposed
of, or discontinued prior to the Separation Date including but not limited to
those businesses and operations set forth on Schedule F-1 but excluding, without
limitation (except to the extent set forth on such Schedule), (i) businesses and
operations conducted by Pharmacia & Upjohn, Inc., Searle or their Subsidiaries
or predecessors, and (ii) businesses and operations conducted by any Former
Pharmacia Business.
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Former Pharmacia Business: those businesses and operations that were
-------------------------
formerly operated by Pharmacia & Upjohn, Inc., Searle or Pharmacia (other than a
Former Agriculture Business) which have been sold, or otherwise disposed of, or
discontinued prior to the Separation Date, including but not limited to (i) shut
down or sold plant sites and businesses associated with product families that
continue in the Pharmacia Group; (ii) shut down or sold plant sites and
businesses previously closely integrated (supply chain) with upstream or
downstream Pharmacia subsidiaries, units or divisions other than a Former
Agriculture Business; and (iii) businesses or operations primarily relating to
any of the following: (a) pharmaceuticals; (b) personal care products; (c)
vision care (including Orcolite and Diamonex) products; (d) controls or control
valves (e.g., Fisher Controls); (e) gas products (e.g., Matheson); (f) electron
beam accelerator (e.g., Radiation Dynamics, Inc.); (g) hollow fibers (e.g.,
Permea); (h) the nutrition and consumer business (except lawn & garden and
nutrition platform); (i) the Research Triangle Park site; (j) metalized fabrics;
(k) alginates and biogums; (l) sorbates; (m) the North Haven site; (n) The
Upjohn Company's ownership of Asgrow Seed Company LLC from 1982 to 1994, except
for the matters listed on Schedule M-7; and (o) radiation services and products.
Governmental Authority: any federal, state, local, foreign or
----------------------
international court, government, department, commission, board, bureau or
agency, or any other regulatory, administrative or governmental authority,
including the NYSE.
Group: the Pharmacia Group or the Monsanto Group, as the context
-----
requires.
Holder: as defined in Section 4.01(d) hereof.
------
Indemnifiable Losses: all Losses which are subject to being
--------------------
indemnified or assumed by Pharmacia or Monsanto pursuant to Article III.
Indemnifying Party: a Person who or which is obligated under this
------------------
Agreement to provide indemnification or to otherwise assume liability for
Losses.
Indemnitee: a Person who may seek indemnification under this
----------
Agreement or otherwise enforce an Indemnifying Party's obligations hereunder to
assume Losses.
Indemnity Payment: an amount that an Indemnifying Party is required
-----------------
to pay to an Indemnitee pursuant to Article III.
Information: all records, books, contracts, instruments, computer
-----------
data and other data and information.
Insurance Administration: with respect to each Insurance Policy, (1)
------------------------
the accounting for retrospectively-rated premiums, defense costs, indemnity
payments, deductibles and retentions as appropriate under the terms and
conditions of each of the Insurance Policies, (2) the reporting to excess
insurance carriers of any losses or claims which may cause the per-occurrence or
aggregate limits of any Insurance Policy to be exceeded and (3) the distribution
of Insurance Proceeds as contemplated by this Agreement.
Insurance Policy: insurance policies and insurance contracts of any
----------------
kind that as of the effective date of this Agreement are or have been owned or
maintained by, or provide a benefit
-8-
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in favor of, any member of either Group or any of its predecessors, including
without limitation, primary, umbrella and excess comprehensive general liability
policies; automobile insurance policies, aviation and aircraft insurance
policies, worker's compensation insurance policies (including without limitation
policies covering occupational disease), property, casualty and business
interruption insurance policies, fiduciary insurance policies, fidelity
insurance policies, directors and officers liability insurance policies
(including any such policy for directors and officers liability which has been
purchased to provide occurrence coverage for both continuing and former
directors, officers and employees for claims arising from or relating to events,
occurrences or other matters prior to or on the Separation Date). The term
"Insurance Policy" expressly includes any insurance policies or insurance
contracts issued by MonSure Ltd., a Bermuda corporation, and MonGard Ltd., a
Bermuda corporation but excludes any insurance policies relating to Plans to the
extent such insurance policies are addressed under the Employee Benefits and
Compensation Allocation Agreement.
Insurance Proceeds: those monies received by or on behalf of an
------------------
insured from an insurance carrier or paid by an insurance carrier on behalf of
the insured.
Insured Claims: any claim with respect to those Losses that,
--------------
individually or in the aggregate, are covered within the terms and conditions of
any of the Insurance Policies, whether or not subject to deductibles,
coinsurance, uncollectibility or retrospectively-rated premium adjustments, but
only to the extent that such Losses are within applicable Insurance Policy
limits, including aggregates.
Insured Monsanto Claim: any claim with respect to any Loss or
----------------------
expense that is or was incurred prior to the Separation Date that is against any
member of the Monsanto Group or any employee of any member of the Monsanto
Group; provided, that in the case of any such claim or any claims identified in
(i) through (v) below, such Loss or expense (including costs of defense and
reasonable attorneys' fees) are or may be insured or insurable under one or more
of the Insurance Policies. Insured Monsanto Claims include, without limitation,
(i) claims for property or casualty damage or any other Loss or expense with
respect to Monsanto Assets; (ii) claims of Loss or expense arising from business
interruption of any type of the Monsanto Business or Former Agriculture
Business; (iii) claims against any member of the Monsanto Group whether or not
the Monsanto Group has or has assumed liability for such claims under this
Agreement or any of the Other Agreements; (iv) claims against any member of the
Pharmacia Group to the extent any member of the Monsanto Group has assumed
liability for such claims under this Agreement or any of the Other Agreements;
and (v) claims involving or against any director, officer, employee, fiduciary
or agent of the Monsanto Group who are entitled or would have been entitled to
indemnification by Pharmacia had the Separation not occurred.
Intellectual Property Agreements: the Intellectual Property Transfer
--------------------------------
Agreement, substantially in the form attached hereto as Exhibit I-1, together
with various agreements attached thereto as exhibits, with such changes as may
be mutually agreed, which have been or will be entered into on or prior to the
Separation Date between Pharmacia and Monsanto or members of their respective
Groups with respect to transfer and licensing of intellectual property.
Intercompany Items: as defined in Section 2.04 hereof.
------------------
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IPO: as defined in the recitals to this Agreement.
---
IPO Closing Date: as defined in the recitals to this Agreement.
----------------
IPO Registration Statement: as defined in the recitals to this
--------------------------
Agreement.
IRB: the arrangements relating to or arising out of any one or more
---
of the following to the extent that it relates to a Monsanto Asset: (1)
Cumberland County PCRBs, Series 1990, issued on October 1, 1990 in the amount of
$4,815,000; (2) Cumberland Co. PCRBs, Series 1992, issued on September 1, 1992
in the amount of $2,715,000; (3) Muscatine PCRBs, Series 1992, issued on
September 1, 1992 in the amount of $15,500,000; and (4) Parish of St. Chas., LA,
PCRBs 1994 Var., issued on March 30, 1994 in the amount of $11,725,000.
Issuing and Paying Agency and Assignment and Assumption Agreement:
-----------------------------------------------------------------
an issuing and paying agency and assignment and assumption agreement to be
entered into among Pharmacia, Monsanto, and an agent or co-agents selected by
Pharmacia as part of the Financing Facility.
Lease Agreements: the lease agreements which have been or will be
----------------
entered into between Pharmacia and Monsanto, or the appropriate members of the
Pharmacia Group and the Monsanto Group, with respect to the facilities listed on
Schedule L-1.
Liabilities: all debts, liabilities, guarantees, assurances,
-----------
commitments and obligations, whether fixed, absolute or contingent, asserted or
unasserted, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, due or to become due, whenever arising, and whether
or not the same would be required by generally accepted accounting principles to
be reflected on a balance sheet, including costs, expenses and losses relating
thereto.
Litigation Matters: as defined in Section 5.06(a) hereof.
------------------
Losses: with respect to any Person, all losses, Liabilities,
------
damages, claims, demands, judgments or settlements of any nature or kind, known
or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated,
including all costs and expenses (legal, accounting or otherwise as such costs
are incurred) relating thereto, including punitive damages and criminal fines
and penalties, but excluding damages in respect of actual or alleged lost
profits, suffered by such Person, regardless of whether any such losses,
Liabilities, damages, claims, demands, judgments, settlements, costs, expenses,
fines and penalties relate to or arise out of such Person's own alleged or
actual negligent, grossly negligent, reckless or intentional misconduct.
MCF: Monsanto Citizenship Fund.
---
Medium-Term Notes: certain obligations relating to the medium-term
-----------------
bank notes issued by MOBRAS, and related agreements listed on Schedule M-1,
reflected on the Monsanto Balance Sheet in the aggregate principal amount of
$502 million.
MOBRAS: Monsanto do Brasil Ltda., a Brazil corporation.
------
Monsanto: as defined in the preamble to this Agreement.
--------
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Monsanto Assets: excluding the Excluded Monsanto Assets, (1) except
---------------
as expressly provided in the Other Agreements, all Assets included on the
Monsanto Balance Sheet or the accounting records supporting the Monsanto Balance
Sheet as adjusted by the pro forma adjustments thereto as set forth in the IPO
Registration Statement and all Assets of either Group acquired between June 30,
2000 and the Separation Date which would have been included on the Monsanto
Balance Sheet had they been owned on June 30, 2000, excluding any Assets sold or
otherwise disposed of on or prior to the Separation Date; (2) all Assets
primarily related to the Monsanto Business or the Former Agriculture Business on
the Separation Date, which in either case are owned, leased, licensed or held by
any member of either Group on the Separation Date; (3) the corporate offices
located at 800 North Lindbergh Boulevard in St. Louis, Missouri and other real
property (including the buildings, fixtures and improvements located thereon)
listed on Schedule M-2 and such other real property interests held by members of
either Group primarily used in the Monsanto Business or any Former Agriculture
Business; (4) all of the outstanding shares of all classes of capital stock or
similar interests of the Monsanto Subsidiaries to the extent owned by any member
of the Pharmacia Group; (5) the partnership, joint venture and other equity
interests primarily related to the Monsanto Business or the Former Agriculture
Business, including without limitation those equity interests listed on Schedule
M-3; (6) the rights of Monsanto under the Insurance Policies as provided in
Article VIII of this Agreement; (7) all computers, desks, furniture, equipment
and other assets used primarily by employees of Pharmacia who will become
employees of Monsanto pursuant to the Employee Benefits and Compensation
Allocation Agreement; (8) any Contingent Gains primarily related to any Monsanto
Business, any Former Agriculture Business, any Monsanto Assets described in the
other clauses of this definition or any reversal of any Monsanto Liability and
any Contingent Gains expressly assigned to Monsanto pursuant to this Agreement
or any Other Agreement; (9) subject to the terms of Article IX, the Monsanto
Share Percentage of any Shared Contingent Gains; and (10) all of the Assets
listed on Schedule M-4.
Monsanto Assets shall also mean any and all other Assets owned or
held on the Separation Date by members of the Pharmacia Group which the parties
agree in writing would have been transferred to the Monsanto Group if the
parties had given specific contemplation to such Asset as of the date hereof.
Monsanto Balance Sheet: the unaudited combined balance sheet of
----------------------
Monsanto as of June 30, 2000, and the notes thereto, as set forth in the IPO
Registration Statement.
Monsanto Business: all businesses and operations (including related
-----------------
joint ventures and alliances) of the agriculture businesses of Pharmacia
consisting principally of those businesses and operations set forth on Schedule
M-5, and all business and operations (including related joint ventures and
alliances) of any member of the Monsanto Group at any time after the Separation
Date.
Monsanto Common Stock: the common stock, par value $.01 per share,
---------------------
of Monsanto.
Monsanto Facilities: property, plant and equipment which are
-------------------
Monsanto Assets.
Monsanto Group: Monsanto and the Monsanto Subsidiaries.
--------------
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Monsanto Indemnified Liabilities: Monsanto Liabilities that are
--------------------------------
subject to indemnification from a Third Party.
Monsanto Liabilities: excluding the Excluded Monsanto Liabilities,
--------------------
(1) except as expressly provided in the Other Agreements, all Liabilities
included on the Monsanto Balance Sheet or the accounting records supporting such
Monsanto Balance Sheet as adjusted by the pro forma adjustments thereto as set
forth in the IPO Registration Statement and all Liabilities of either Group
incurred or arising between June 30, 2000 and the Separation Date which would
have been included on the Monsanto Balance Sheet had they been incurred or
arisen on or prior to June 30, 2000, excluding those Liabilities (or portions
thereof) which have been satisfied, paid or discharged prior to the Separation
Date; (2) except as expressly provided in the Other Agreements, all Liabilities
relating primarily to or arising primarily from the Monsanto Assets, the
Monsanto Business or the Former Agriculture Business or the disposition of any
Former Agriculture Business, whether incurred or arising prior to, on or after
the Separation Date; (3) those Liabilities for worker's compensation or Third
Party claims incurred prior to the Separation Date at a site transferred to the
Monsanto Group as part of the Monsanto Assets; (4) all Liabilities assumed by
any member of the Monsanto Group under an express provision of this Agreement or
an Other Agreement; (5) all Liabilities for environmental remediation or other
environmental responsibilities primarily related to the Monsanto Business, any
Former Agriculture Business or real property transferred to the Monsanto Group
as part of the Monsanto Assets, including those listed in Schedule M-6 and,
subject to the terms of Article IX, for Monsanto's proportion of any Shared
Contingent Liability for environmental remediation or other environmental
responsibility as provided by Section 9.02(c); (6) all Liabilities for products
of the Monsanto Business or Former Agriculture Business sold to Third Parties by
any member of either Group; (7) all Liabilities relating to the Medium-Term
Notes and the Ex-U.S. Debt, including Liabilities relating to any guarantees
with respect to such indebtedness made by any member of the Pharmacia Group; (8)
all Liabilities of Monsanto under the Credit Agreements; (9) all Liabilities of
either Group that were assumed by Solutia or any of its Subsidiaries in
connection with the spinoff of Solutia (regardless of the extent to which such
Liabilities relate to any Monsanto Business or any Former Agriculture Business),
to the extent that Solutia fails to pay, perform or discharge such Liabilities;
(10) if the IPO is consummated, all Liabilities under the Financing Facility;
(11) all Liabilities of the Monsanto Group arising under this Agreement; (12)
any Contingent Liabilities relating primarily to or arising primarily from any
Monsanto Business or any Former Agriculture Business, and any Contingent
Liabilities expressly assigned to Monsanto pursuant to this Agreement or any
Other Agreement; (13) subject to the terms of Article IX, the Monsanto Share
Percentage of any Shared Contingent Liabilities; and (14) all Liabilities listed
on Schedule M-7 (regardless of the extent to which such Liabilities relate to
any Monsanto Business or any Former Agriculture Business).
Monsanto Liabilities shall also mean any and all other Liabilities
owed on the Separation Date by members of the Pharmacia Group that are primarily
related to the Monsanto Business and which the parties agree in writing would
have been transferred to the Monsanto Group if the parties had given specific
contemplation to such Liability as of the date hereof.
Monsanto Share Percentage: 57 percent.
-------------------------
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Monsanto Subsidiaries: all of the corporations, limited liability
---------------------
companies or other entities listed on Schedule M-8, and any other Subsidiaries
of Monsanto.
Monsanto Support Agreements: any obligation or agreement of the
---------------------------
Pharmacia Group under any letter of credit or bond obtained prior to the
Separation Date for the benefit of the Monsanto Business or any member of the
Monsanto Group, including without limitation those obligations and agreements
listed on Schedule M-9.
Non-Sale Assets: as defined in Section 4.01(d) hereof.
---------------
Notices: as defined in Section 11.06 hereof.
-------
NYSE: the New York Stock Exchange, Inc.
----
Other Agreements: the Corporate Agreement, the Services Agreement,
----------------
the Employee Benefits and Compensation Allocation Agreement, all Business
Transfer Agreements, the Tax Sharing Agreement, the Intellectual Property
Agreements, the Lease Agreements and any assignment or assumption agreements
entered into in connection with the Separation.
PEPAC: Pharmacia Employee Political Action Committee.
-----
Person: an individual, a partnership, a joint venture, a
------
corporation, a trust, a limited liability company, an unincorporated
organization, or a government or any department or agency thereof.
Pharmacia: as defined in the preamble to this Agreement.
---------
Pharmacia Assets: all of the Assets, other than the Monsanto Assets,
----------------
held on the Separation Date by any member of either Group, including the
Excluded Monsanto Assets, any Contingent Gain primarily related to any Pharmacia
Business or any Former Pharmacia Business, any Contingent Gains expressly
assigned to Pharmacia pursuant to this Agreement or any Other Agreement and,
subject to the terms of Article IX, the Pharmacia Share Percentage of any Shared
Contingent Gains.
Pharmacia Business: all businesses and operations (including related
------------------
joint ventures and alliances) conducted by Pharmacia & Upjohn, Inc., Searle or
their Subsidiaries, and all business and operations (including related joint
ventures and alliances) of any member of the Pharmacia Group at any time after
the Separation Date.
Pharmacia Group: Pharmacia and the Subsidiaries of Pharmacia other
---------------
than members of the Monsanto Group.
Pharmacia Liabilities: except as expressly provided in the Other
---------------------
Agreements, all of the Liabilities, other than the Monsanto Liabilities, of any
member of either Group incurred or arising prior to or on the Separation Date,
or of any member of the Pharmacia Group incurred or arising after the Separation
Date, including the Excluded Monsanto Liabilities, any Contingent Liabilities
relating primarily to or arising primarily from any Pharmacia Business or Former
Pharmacia Business, any Contingent Liabilities expressly assigned to Pharmacia
pursuant to this
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Agreement or any Other Agreement and, subject to the terms of Article IX, the
Pharmacia Share Percentage of any Shared Contingent Liabilities and Pharmacia's
proportion of any Shared Contingent Liability for environmental remediation or
other environmental responsibility as provided by Section 9.02(c).
Pharmacia Share Percentage: 43 percent.
--------------------------
Plan: as defined in the Employee Benefits and Compensation
----
Allocation Agreement.
Prime Rate: the rate which Citibank, N.A. (or any successor thereto
----------
or other major money center commercial bank agreed to by the parties hereto)
announces from time to time as its prime lending rate, as in effect from time to
time.
Privileged Information: as defined in Section 5.06(a) hereof.
----------------------
Representative: with respect to any Person, any of such Person's
--------------
directors, officers, employees, agents, consultants, advisors, accountants,
attorneys and representatives.
Rules: as defined in Section 6.03 hereof.
-----
Sale Assets: as defined in Section 4.01(d) hereof.
-----------
Searle: G.D. Searle & Co., a Delaware corporation and a Subsidiary
------
of Pharmacia.
SEC: the Securities and Exchange Commission.
---
Security Interest: any mortgage, security interest, pledge, lien,
-----------------
charge, claim, option, right to acquire, voting or other restriction,
right-of-way, covenant, condition, easement, encroachment, restriction on
transfer, or other encumbrance of any nature whatsoever.
Separation: as defined in the recitals to this Agreement.
----------
Separation Date: September 1, 2000. The Separation Date for the
---------------
transfer of Liabilities under the Financing Facility shall be deemed to be the
IPO Closing Date.
Services Agreement: the services agreement which has been or will be
------------------
entered into on or prior to the Separation Date between the Pharmacia Group and
the Monsanto Group, substantially in the form attached hereto as Exhibit S-1,
with such changes as may be mutually agreed to by Monsanto and Pharmacia,
providing for (1) the Pharmacia Group to make available certain services to the
Monsanto Group, and (2) the Monsanto Group to make available certain services to
the Pharmacia Group.
Shared Contingent Claims Committee: a committee composed of one
----------------------------------
representative designated from time to time by each of Pharmacia and Monsanto
that shall be established in accordance with Section 9.04.
Shared Contingent Gain: any Contingent Gain that is not primarily
----------------------
related to any Monsanto Business, any Former Agriculture Business, any Pharmacia
Business or any Former
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<PAGE>
Pharmacia Business and that is not expressly assigned to Monsanto or Pharmacia
pursuant to this Agreement or any Other Agreement.
Shared Contingent Liability: any Contingent Liability that is not
---------------------------
primarily related to any Monsanto Business, any Former Agriculture Business, any
Pharmacia Business or any Former Pharmacia Business and that is not expressly
assigned to Monsanto or Pharmacia pursuant to this Agreement or any Other
Agreement.
Share Percentage: means the Pharmacia Share Percentage or the
----------------
Monsanto Share Percentage, as the case may be.
Solutia: Solutia Inc., a Delaware corporation.
-------
Subsidiary: with respect to any specified Person, any corporation or
----------
other legal entity of which such Person or any of its Subsidiaries controls or
owns, directly or indirectly, more than 50% of the stock or other equity
interest entitled to vote on the election of members to the board of directors
or similar governing body; provided, however, that for purposes of this
Agreement, (1) the Monsanto Subsidiaries shall be deemed to be Subsidiaries of
Monsanto and (2) no member of the Monsanto Group shall be deemed to be a
Subsidiary of any member of the Pharmacia Group.
Tax: as defined in the Tax Sharing Agreement.
---
Tax Sharing Agreement: the tax sharing and indemnification agreement
---------------------
which has been or will be entered into on or prior to the Separation Date
between Pharmacia and Monsanto substantially in the form attached hereto as
Exhibit T-1, with such changes as may be mutually agreed to by Pharmacia and
Monsanto.
Third Party: a Person who is not a party hereto or a wholly-owned
-----------
Subsidiary thereof.
Third Party Claim: any claim, suit, arbitration, inquiry, proceeding
-----------------
or investigation by or before any court, any Governmental Authority or any
arbitration tribunal asserted by a Third Party.
1.02 REFERENCES TO TIME. All references in this Agreement to times
of the day shall be to St. Louis time, except as otherwise specifically provided
herein.
ARTICLE II
THE SEPARATION
2.01 TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES. On or prior
to the Separation Date, the parties hereto shall, and shall cause their
respective wholly-owned Subsidiaries to: (1) execute instruments of assignment
and transfer and to take such other corporate action as is necessary to transfer
to members of the Monsanto Group all of the right, title and interest of the
Pharmacia Group in the Monsanto Assets; and (2) take all action necessary for
members of the Monsanto Group to assume all of the Monsanto Liabilities (other
than the Liabilities under the
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Financing Facility, which shall be assumed by Monsanto from and after the IPO
Closing Date). A global assignment and assumption agreement along with Business
Transfer Agreements for transfers of Monsanto Assets and assumption of Monsanto
Liabilities will be executed on or prior to the Separation Date; provided,
however, that in the event of a conflict between such agreements and this
Agreement, this Agreement will control as to matters expressly within the scope
of this Agreement. The parties acknowledge that circumstances in some
jurisdictions outside of the United States may require the timing of part of the
international separation to be delayed past the Separation Date. Each of the
parties hereto agrees that the Delayed Transfer Assets will be assigned,
transferred, conveyed and delivered, and the Delayed Transfer Liabilities will
be assumed, as soon as reasonably practicable following the Separation Date or
as otherwise provided in this Agreement, the Other Agreements or Schedule 2.01,
as of and with effect from the Separation Date. As of the Separation Date, the
applicable Delayed Transfer Asset or Delayed Transfer Liability shall be treated
for all purposes of this Agreement and the Other Agreements as a Monsanto Asset,
a Monsanto Liability, a Pharmacia Asset or a Pharmacia Liability, as the case
may be, based upon the party to or by which such asset or liability is intended
to be transferred or assumed.
2.02 CERTIFICATE OF INCORPORATION; BYLAWS. Pharmacia and Monsanto
shall take all action necessary so that, at the Separation Date, the Restated
Certificate of Incorporation and By-laws of Monsanto shall be in the forms
attached hereto as Exhibits 2.02(a) and 2.02(b), respectively.
2.03 FINANCING ARRANGEMENTS EFFECTIVE ON SEPARATION DATE. Each of
the parties hereto agrees that it will use reasonable efforts to obtain all
necessary consents, waivers or amendments to each bank credit agreement, debt
security or other financing facility to which it or any of its Subsidiaries is a
party or by which it or any of its Subsidiaries is bound, or to refinance such
agreement, security or facility, in each case on terms satisfactory to Pharmacia
and Monsanto and to the extent necessary to permit the Separation to be
consummated without any material breach of the terms of such agreement, security
or facility.
2.04 INTERCOMPANY ACCOUNTS. Effective on the Separation Date, except
as otherwise provided in Schedule 2.04 or the Business Transfer Agreements, or
as incurred in connection with the Separation,
(i) with respect to intercompany accounts arising from
sales of products of the Monsanto Business: all accounts receivable
will remain with or be transferred to the Monsanto Group as Monsanto
Assets; and all accounts payable will remain with or be transferred
to the Monsanto Group as Monsanto Liabilities;
(ii) with respect to intercompany accounts arising from
the sales of products of the Pharmacia Business: all accounts
receivable and all accounts payable will remain with or be
transferred to the Pharmacia Group;
(iii) all intercompany loans or advances, and all other
intercompany balances not specified in clauses (i) and (ii) above,
shall not be transferred from one Group to another; and
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(iv) all intercompany accounts, loans, advances and
balances specified in clauses (i), (ii) and (iii) above are
collectively referred to as "Intercompany Items."
2.05 MONSANTO SUPPORT AGREEMENTS. Effective as of the Separation
Date, and unless otherwise agreed between Pharmacia and Monsanto, Monsanto shall
use its commercially reasonable efforts to cause one or more members of the
Monsanto Group to be substituted in all respects for the Pharmacia Group or any
member thereof with respect to all Monsanto Support Agreements.
ARTICLE III
SURVIVAL, ASSUMPTION AND INDEMNIFICATION
3.01 SURVIVAL OF AGREEMENTS. All covenants and agreements of the
parties hereto contained in this Agreement and all covenants and agreements of
the parties hereto and their respective wholly-owned Subsidiaries contained in
the Other Agreements shall survive the Separation Date in accordance with their
respective terms and shall not be merged into any deeds or other transfer or
closing instruments or documents.
3.02 TAXES. This Article III shall not be applicable to any
Indemnifiable Losses or Liabilities related to (1) Taxes which shall be governed
by the Tax Sharing Agreement; or (2) which are otherwise expressly provided for
in the Other Agreements (excluding the Business Transfer Agreements).
3.03 ASSUMPTION AND INDEMNIFICATION; EFFECT OF RECOVERY RIGHTS
AGAINST INSURERS OR OTHER THIRD PARTIES.
(a) Subject to Sections 3.02 and 3.03(f) and except as expressly
provided in the Other Agreements, effective as of the Separation Date, Pharmacia
hereby retains, assumes and agrees to pay, discharge, perform and satisfy in
full, and to indemnify, defend and hold harmless each member of the Monsanto
Group, and each of their Representatives and Affiliates, from and against (1)
all Pharmacia Liabilities, (2) all Losses of any such member of the Monsanto
Group, Representative or Affiliate (i) relating to, arising out of or due to the
failure to pay, perform or discharge in due course the Pharmacia Liabilities by
any member of the Pharmacia Group who has an obligation with respect thereto, or
(ii) to the extent arising from Pharmacia's breach of its covenants under
Articles IV, V or VI and (3) all receivables from Third Parties relating to a
Pharmacia Business that were assumed or retained by a member of the Monsanto
Group. Monsanto will use commercially reasonable efforts not to take and to
cause the members of the Monsanto Group and each of their Representatives and
Affiliates not to take any action outside the ordinary course of business after
the Separation Date which is reasonably likely to have the effect of increasing
Pharmacia's or its wholly-owned Subsidiaries' Losses with respect to Pharmacia
Liabilities or the indemnification or assumption provided by this Article III,
and Monsanto will use commercially reasonable efforts to take and to cause the
members of the Monsanto Group and each of their Representatives and Affiliates
to take, at Pharmacia's expense, such commercially reasonable action as
Pharmacia or its wholly-owned Subsidiaries may request to mitigate all such
Losses as may be incurred with respect to Pharmacia Liabilities
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for which Pharmacia has agreed to indemnify Monsanto or with respect to any
matter or Loss against which Pharmacia has agreed to indemnify Monsanto or which
Pharmacia has agreed to assume.
(b) Subject to Section 3.02 and 3.03(f) and except as expressly
provided in the Other Agreements, effective as of the Separation Date, Monsanto
hereby retains, assumes and agrees to pay, discharge, perform and satisfy in
full, and to indemnify, defend and hold harmless each member of the Pharmacia
Group and each of their Representatives and Affiliates, from and against (1) all
Monsanto Liabilities (excluding Liabilities under the Financing Facility, which
Monsanto shall assume from and after the IPO Closing Date and thereafter shall
indemnify, defend and hold harmless each member of the Pharmacia Group and each
of their Representatives and Affiliates from and against such Liabilities
pursuant to an Issuing and Paying Agency and Assignment and Assumption Agreement
to be entered into on or prior to the IPO Closing Date by Pharmacia, Monsanto
and an agent or co-agents selected by Pharmacia), (2) any and all Losses of any
such member of the Pharmacia Group, Representative or Affiliate (i) relating to,
arising out of or due to the failure to pay, perform or discharge in due course
the Monsanto Liabilities by any member of the Monsanto Group who has an
obligation with respect thereto, or (ii) to the extent arising from Monsanto's
breach of its covenants under Articles IV, V or VI, (3) any and all Third Party
Claims arising from or related to Monsanto's use of the registration, license or
permit or other rights granted to the Pharmacia Group by Governmental
Authorities, (4) any uncanceled Monsanto Support Agreement for which no
substitution has yet been effected pursuant to Section 2.05 and (5) all
receivables from Third Parties relating to a Monsanto Business that were assumed
or retained by a member of the Pharmacia Group. Pharmacia will use commercially
reasonable efforts not to take and to cause the members of the Pharmacia Group
and each of their Representatives and Affiliates not to take any action outside
the ordinary course of business after the Separation Date which is reasonably
likely to have the effect of increasing Monsanto's or its wholly-owned
Subsidiaries' Losses with respect to Monsanto Liabilities or the indemnification
or assumption provided by this Article III and Pharmacia will use commercially
reasonable efforts to take and will cause the members of the Pharmacia Group and
each of their Representatives and Affiliates to take at Monsanto's expense such
commercially reasonable action as Monsanto or its wholly-owned Subsidiaries may
reasonably request to mitigate all such Losses as may be incurred with respect
to Monsanto Liabilities for which Monsanto has agreed to indemnify Pharmacia or
with respect to any matter or Loss against which Monsanto has agreed to
indemnify Pharmacia or which Monsanto has agreed to assume.
(c) If any portion of an Indemnity Payment required to be made
hereunder or under any Other Agreement is denominated in a currency other than
United States dollars, the amount of such payment, at the election of the
Indemnifying Party, may be reimbursed in local currency or shall be translated
into United States dollars using the Foreign Exchange Rate for such currency
determined in accordance with the following rules:
(1) with respect to an Indemnifiable Loss arising from
payment by a financial institution under a guarantee, comfort
letter, letter of credit, foreign exchange contract or similar
instrument, the Foreign Exchange Rate for such currency shall be
determined as of the date on which such financial institution is
reimbursed;
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(2) with respect to an Indemnifiable Loss covered by
insurance, the Foreign Exchange Rate for such currency shall be the
Foreign Exchange Rate employed by the insurance company providing
such insurance in settling such Indemnifiable Loss with the
Indemnifying Party; and
(3) with respect to an Indemnifiable Loss not described
in clause (1) or (2) of this Section 3.03(c), the Foreign Exchange
Rate for such currency shall be determined as of the date of payment
to a Third Party in the case of such payments or as of the date that
notice of the claim with respect to such other Indemnifiable Loss is
given to the Indemnitee.
(d) On and following the Separation Date Monsanto shall assume (or
shall cause one of its wholly-owned Subsidiaries to assume) (i) the prosecution
of all claims which are Monsanto Assets and are pending on the Separation Date;
and (ii) the defense against all Third Party Claims which are Monsanto
Liabilities and are pending on the Separation Date. Pharmacia shall use
commercially reasonable efforts to make available and shall cause its
wholly-owned Subsidiaries to use commercially reasonable efforts to make
available to Monsanto and its wholly-owned Subsidiaries, at Monsanto's expense,
(i) any personnel or any books, records or other documents within its control or
which it otherwise has the ability to make available that Monsanto or such
Subsidiary reasonably believes are necessary or appropriate for such prosecution
or defense as provided in Article V; and (ii) such other assistance in support
of the prosecution or defense of such litigation as Monsanto or its wholly-owned
Subsidiaries may reasonably request; provided, however, that no member of the
Pharmacia Group shall be required to take any action, refrain from taking any
action or make available any assistance if doing so could reasonably have the
effect of increasing Liabilities of the Pharmacia Group.
(e) Upon assumption or indemnification of the Losses under this
Agreement, the Indemnifying Party shall be subrogated to rights of the
Indemnitee against insurers or other Third Parties with respect to such assumed
or indemnified amount. It is expressly agreed that no insurer or any other Third
Party shall be (i) entitled to a benefit it would not be entitled to receive in
the absence of this Agreement, (ii) relieved of the responsibility to pay any
Insured Claims or indemnified claims (including Monsanto Indemnified
Liabilities) or any other claims for which it is obligated or (iii) entitled to
any subrogation rights with respect to any obligation hereunder. The Indemnitee
shall, upon request, provide a formal assignment of a claim against an insurer
or other third party to the Indemnifying Party with respect to the assumed or
indemnified amount or shall otherwise reasonably cooperate at the Indemnifying
Party's request and expense, with an attempt by the Indemnifying Party to recoup
assumed or indemnified amounts from insurers or other third parties.
(f) If an Indemnitee shall receive any amount of Insurance Proceeds
or any other monies from a Third Party in connection with an Indemnifiable Loss
(including without limitation any Insured Claims or any Monsanto Indemnified
Liabilities), then such monies shall be promptly paid to the Indemnifying Party,
less the amount of any Indemnifiable Loss incurred by the Indemnitee for which
the Indemnifying Party has not yet made the Indemnitee whole. Nothing herein
shall permit any Indemnifying Party to delay or refrain from making any payment
to any Indemnitee because of the availability or alleged availability of any
Insurance Policy or Insurance Proceeds (provided that the foregoing shall not
limit the subrogation rights of
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an Indemnifying Party under Section 3.03). In addition, in no event shall the
availability of recovery of an assumed or indemnified amount under an Insurance
Policy or other contract relieve the Indemnifying Party of its obligation to
make the Indemnitee whole for any deductibles, self-insured retentions,
retrospective premiums or other amounts payable by the Indemnitee under the
Insurance Policy or other contract with respect to any such recovery.
3.04 PROCEDURE FOR ASSUMPTION OR INDEMNIFICATION.
(a) If any Indemnitee receives notice of the assertion of any Third
Party Claim with respect to any matter or Loss against which, under this Article
III, an Indemnifying Party has agreed to indemnify such Indemnitee or such
Indemnifying Party has agreed to assume, such Indemnitee shall give such
Indemnifying Party written notice thereof within 20 calendar days after becoming
aware of such Third Party Claim; provided, however, that the failure of any
Indemnitee to give notice as provided in this Section 3.04 shall not relieve any
Indemnifying Party of its obligations under this Article III, except to the
extent that such Indemnifying Party is actually prejudiced by such failure to
give notice. Such notice shall describe such Third Party Claim in reasonable
detail and, if practicable, shall indicate the estimated amount of the
Indemnifiable Loss that has been or may be sustained by such Indemnitee.
(b) Pharmacia shall assume the defense of, and may seek to settle or
compromise, any Third Party Claim that is a Shared Contingent Liability, and the
costs and expenses (including allocated costs of in-house counsel and other
personnel) thereof shall be included in the calculation of the amount of the
applicable Shared Contingent Liability in determining the reimbursement
obligations of the other party with respect thereto pursuant to Section 9.02. In
respect of a Shared Contingent Liability, Monsanto shall have the right to
employ separate counsel and to participate (but not to control) the defense,
compromise, or settlement thereof, but all fees and expenses of such counsel
shall be at the sole expense of Monsanto.
(c) Other than in the case of a Shared Contingent Liability (the
procedures applicable to which are set forth in Section 3.04(b)), an
Indemnifying Party, at such Indemnifying Party's own expense and through counsel
chosen by such Indemnifying Party (which counsel shall be reasonably
satisfactory to the Indemnitee), may elect to defend any Third Party Claim. If
an Indemnifying Party elects to defend a Third Party Claim, then, within fifteen
Business Days after receiving notice of such Third Party Claim or sooner if the
nature of such Third Party Claim so requires, such Indemnifying Party shall
notify the Indemnitee of its intent to do so. Such Indemnitee shall thereupon
use commercially reasonable efforts to make available to such Indemnifying
Party, at such Indemnifying Party's expense, such assistance in support of the
prosecution or defense of such litigation as the Indemnifying Party may
reasonably request, including without limitation, the right to assert in the
name of the Indemnitee such rights, claims, counterclaims or defenses that such
Indemnitee would be or would have been permitted to assert in such litigation or
in the prosecution of a claim or counterclaim against a Third Party or in
defense against such Third Party Claim had the Separation not occurred. Such
Indemnifying Party shall pay such Indemnitee's reasonable out-of-pocket expenses
incurred in connection with such cooperation consistent with the provisions of
Article V. Except as provided herein, after notice from an Indemnifying Party to
an Indemnitee of its election to assume the defense of a Third Party Claim, such
Indemnifying Party shall not be liable to such Indemnitee under this Article III
for any legal or other expenses subsequently incurred by such Indemnitee in
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connection with the defense thereof. Other than in the case of a Shared
Contingent Liability (the procedures applicable to which are set forth in
Section 3.04(b)), if an Indemnifying Party elects not to defend against a Third
Party Claim, or fails to notify an Indemnitee of its election as provided in
this Section 3.04 within the period of fifteen Business Days described above,
such Indemnitee may defend, compromise and settle such Third Party Claim at the
Indemnifying Party's expense; provided, however, that no such Indemnitee may
compromise or settle any such Third Party Claim without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed.
(d) Notwithstanding the foregoing, the Indemnifying Party shall not,
without the prior written consent of the Indemnitee, settle or compromise any
Third Party Claim or consent to the entry of any judgment which does not include
as an unconditional term thereof the delivery by the claimant or plaintiff to
the Indemnitee of a written release of the Indemnitee from all Liability in
respect of such Third Party Claim.
(e) If an Indemnifying Party chooses to defend or to seek to
compromise any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense.
(f) Any claim on account of an Indemnifiable Loss arising out of or
due to the failure to pay, perform or discharge in due course its respective
obligations arising out of Section 3.03 by any member of the Indemnifying
Party's Group who has an obligation with respect thereto but which does not
result from a Third Party Claim shall be asserted by written notice given by the
Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall have
a period of 30 days after the receipt of such notice within which to respond
thereto. If such Indemnifying Party does not respond within such 30-day period,
such Indemnifying Party shall be deemed to have refused to accept responsibility
to make payment. If such Indemnifying Party does not respond within such 30-day
period or rejects such claim in whole or in part, such Indemnitee shall be free
to pursue such remedies as may be available to such party under Article VI of
this Agreement.
ARTICLE IV
CERTAIN ADDITIONAL COVENANTS
4.01 FURTHER ASSURANCES.
(a) In addition to the actions specifically provided for elsewhere
in this Agreement and unless otherwise expressly provided in this Agreement or
an Other Agreement, each of the parties hereto shall use its commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things reasonably necessary, proper or advisable under
applicable laws, regulations and agreements to consummate and make effective the
transactions contemplated by this Agreement, to novate or assign all obligations
under agreements, leases, licenses and other obligations or Liabilities of any
nature whatsoever that constitute the Monsanto Liabilities (or to obtain in
writing the unconditional release of all parties to such
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arrangements other than any member of the Monsanto Group, so that, in any case,
the Monsanto Group will be solely responsible for such Liabilities), to confirm
Monsanto's title to all Monsanto Assets and assumption of all Monsanto
Liabilities, to put Monsanto in actual possession and operating control of all
Monsanto Assets and all Monsanto Liabilities, and to permit Monsanto to exercise
all rights and to perform its obligations with respect to all Monsanto Assets
and all Monsanto Liabilities; provided, that nothing herein shall be deemed to
require the transfer of any Assets or the assumption of any Liabilities which by
their terms or operation of law cannot be transferred or assumed, subject to the
obligations of each party described below. Without limiting the foregoing, each
party hereto shall cooperate with the other party, and execute and deliver, or
use its commercially reasonable efforts to cause to be executed and delivered,
all instruments, including instruments of conveyance, assignment and transfer,
and to make all filings with, and to obtain all consents, approvals or
authorizations of, any governmental or regulatory authority or any other Person
under any permit, license, agreement, indenture or other instrument, and take
all such other actions as such party may reasonably be requested to take by any
other party hereto from time to time, consistent with the terms of this
Agreement, in order to effectuate the provisions and purposes of this Agreement
and the transfers of Monsanto Assets and Monsanto Liabilities and the other
transactions contemplated hereby. If any such transfer of Monsanto Assets or
Monsanto Liabilities, including but not limited to, assignments of contracts, is
not consummated prior to or at the Separation Date for any reason, including but
not limited to, the absence of consents to assignment of contracts or approval
by Governmental Authorities for the transfer of permits, then the relevant
member of the Pharmacia Group shall thereafter hold such Monsanto Asset in trust
for the use and benefit of the party entitled thereto (at the expense of the
party entitled thereto), or shall retain such Monsanto Liability for the account
of the party by whom such Monsanto Liability is to be assumed pursuant hereto,
as the case may be, and shall take such other action as may be reasonably
requested by the party to whom such Monsanto Asset is to be transferred, or by
whom such Monsanto Liability is to be assumed, as the case may be, in order to
place such party, insofar as reasonably possible, in the same position as if
such Monsanto Asset or Monsanto Liability had been transferred as contemplated
hereby. If and when any such Asset or Liability becomes transferable, such
transfer shall be effected forthwith. The parties hereto agree that, as of the
Separation Date, as between the parties, Monsanto shall be deemed to have
acquired complete and sole beneficial ownership of all of the Monsanto Assets,
together with all rights, powers and privileges incident thereto, and shall be
deemed to have assumed in accordance with the terms of this Agreement all of the
Monsanto Liabilities, and all duties, obligations and responsibilities incident
thereto.
(b) Without limiting the generality of Section 4.01(a), Pharmacia,
as the sole stockholder of Monsanto prior to the Separation, shall ratify any
actions which are reasonably necessary or desirable to be taken by Monsanto to
effectuate the transactions contemplated by this Agreement or the Other
Agreements in a manner consistent with the terms of this Agreement or such Other
Agreements.
(c) In the event any registration, licenses, permits or other rights
granted by Governmental Authorities to the Pharmacia Group must be transferred,
amended or issued in order to conduct operations of the Monsanto Business after
the Separation Date, and such permit transfer, amendment or issuance has not
been accomplished as of such date, Pharmacia shall permit Monsanto to use the
registration, license or permit of the Pharmacia Group to continue to
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operate the Monsanto Facilities until such transfer, amendment or issuance is
accomplished, at Monsanto's expense, if to so do would be permitted by and not
violate the terms of the registration, license or permit or any law, regulation,
ordinance or rule, until such permit is transferred or issued to Monsanto.
Monsanto shall use its commercially reasonable efforts to obtain such
registrations, licenses, permits or other rights granted by Governmental
Authorities as soon as reasonably practicable.
(d) Schedule 4.01(d) to this Agreement sets forth certain assets
which are Pharmacia Assets or Monsanto Assets, not including Intercompany Items,
held by Monsanto or Pharmacia (the "Holder"), respectively, but which, in some
cases, are subject to contracts for sale to Third Parties ("Sale Assets") or
which, in other cases, cannot be transferred without one party incurring a
substantial economic detriment which detriment could otherwise be deferred or
avoided ("Non-Sale Assets"). Pharmacia and Monsanto agree that the Holder shall
retain title to such Sale Assets and Non-Sale Assets following the Separation
Date and shall not transfer to the other party (the "Beneficiary") the title or
assign to the Beneficiary the contract(s) for sale or any other permits,
licenses or contracts with respect to such assets subject to the following terms
and conditions:
(i) The Holder from and after the Separation Date will
hold the Sale Assets and the Non-Sale Assets in trust for the
benefit of the Beneficiary, and operate the Sale Assets and the
Non-Sale Assets on behalf of, and at the risk and expense of, the
Beneficiary;
(ii) The Holder hereby irrevocably designates the
Beneficiary as its attorney-in-fact and agent for all purposes with
respect to all such Sale Assets and Non-Sale Assets, including
without limitation, for all operating, remediation, monitoring and
other activities, with respect to such Sale Assets and Non-Sale
Assets; for all filings, notices and any other negotiations,
activities or discussions with any Governmental Authority and/or any
branch, commission, board or other subdivision thereof; for all
discussions, negotiations or agreements with Third Parties with
respect to, or arising from, such Sale Assets and Non-Sale Assets;
and for all purposes relating to the execution, delivery and closing
of contracts, agreements, documents or instruments with respect to
the ownership, operation, use, occupation, sale or lease of the Sale
Assets or Non-Sale Assets;
(iii) The Holder will take no action without the prior
written consent of the Beneficiary which may have the effect of
increasing the Beneficiary's liability with respect to any Sale
Assets or Non-Sale Assets; and will take such action as is permitted
by contract, in the absence of consent of the other party, and by
law to place the Beneficiary, insofar as reasonably possible, in the
same position as if such Sale Assets and Non-Sale Assets had been
transferred, or conveyed to the Beneficiary on the Separation Date;
(iv) The Holder will use commercially reasonable efforts
to comply with any operating covenants of contracts relating to the
sale of the Sale Assets;
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(v) In the event any Sale Assets are sold to a Third
Party pursuant to a contract in existence on the Separation Date,
the Holder shall convey the proceeds of such sale to the Beneficiary
or the Beneficiary's designee, net of any applicable taxes or
Liabilities incurred by the Holder with respect to such Sale Assets;
(vi) In the event any Sale Assets are not sold or
conveyed to a Third Party pursuant to a contract in existence on the
Separation Date or, at any other time, upon the request of the
Beneficiary with respect to any Sale Assets or Non-Sale Assets, the
Holder shall transfer and convey title to the affected asset to the
Beneficiary or the Beneficiary's designee, at the Beneficiary's
expense; and
(vii) As between Pharmacia and Monsanto, such Sale
Assets and Non-Sale Assets shall be Pharmacia Assets (if the
Beneficiary is Pharmacia) or Monsanto Assets (if the Beneficiary is
Monsanto), as the case may be, and Liabilities primarily related to
or arising from Sale Assets or Non-Sale Assets shall be Pharmacia
Liabilities (if the Beneficiary is Pharmacia) or Monsanto
Liabilities (if the Beneficiary is Monsanto), as the case may be,
and subject to the indemnification provisions contained in Section
3.03(b) notwithstanding the fact that such Sale Assets or Non-Sale
Assets were not transferred to the Beneficiary.
(e) If Monsanto elects to pursue any claim or right relating to the
Monsanto Assets, the Monsanto Business or the Former Agriculture Business,
Pharmacia, upon request and at Monsanto's expense, shall use commercially
reasonable efforts to make available to Monsanto such assistance in support of
the prosecution of such litigation as Monsanto may reasonably request, including
without limitation (upon reasonable notice to Pharmacia and to the extent
necessary to effectively pursue such claim or right) the right to assert in the
name of Pharmacia or any member of the Pharmacia Group such rights and claims
that Pharmacia or such member would be or would have been permitted to assert in
such litigation had the Separation not occurred; provided, however, that no
member of the Pharmacia Group shall be required to take any action, refrain from
taking any action or make available any assistance if doing so could reasonably
have the effect of increasing Liabilities of the Pharmacia Group. Monsanto, upon
request and at Pharmacia's expense, shall use commercially reasonable efforts to
make available to Pharmacia such assistance in support of the prosecution of
litigation relating to the Pharmacia Assets or the Pharmacia Business as
Pharmacia may reasonably request.
4.02 PHARMACIA EMPLOYEE POLITICAL ACTION COMMITTEE. Prior to or as
soon as practicable after the Separation Date, Monsanto shall cause the MCF to
transfer to the PEPAC an amount of cash equal to the payroll deduction
contributions made to the MCF attributable to the employees of the Searle
pharmaceutical unit of Pharmacia for the period beginning on April 3, 2000 and
ending on the date of transfer, other than payroll deduction contributions
attributable to employees who have made timely objection to such transfer.
4.03 RECEIVABLES COLLECTION AND OTHER PAYMENTS. If after the
Separation Date, either party receives payments belonging to the other party,
the recipient shall promptly account for and remit same to the other party.
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4.04 LIMITED LEASES, LICENSES AND BENEFITS OF CERTAIN ASSETS.
(a) With respect to sold or discontinued businesses for which
Monsanto has assumed an Monsanto Liability, Pharmacia hereby grants a lease or
license, and shall cause its wholly-owned Subsidiaries to grant a lease or
license, to members of the Monsanto Group, without compensation and on a
non-exclusive basis, with respect to such Pharmacia Assets (or the benefit of
such Pharmacia Assets) relating to sold or discontinued businesses, including
without limitation, those rights under contracts, leases or licenses held on the
Separation Date, in each case to the extent the use or benefit of such Pharmacia
Assets is reasonably necessary to satisfy such Monsanto Liabilities assumed by
any member of the Monsanto Group pursuant to this Agreement or any Other
Agreement.
(b) With respect to a Former Agriculture Business for which
Pharmacia has retained a Pharmacia Liability, including without limitation,
Pharmacia Liabilities under operating agreements with Third Parties, Monsanto
hereby grants a lease or license, and shall cause its wholly-owned Subsidiaries
to grant a lease or license, to members of the Pharmacia Group, without
compensation and on a non-exclusive basis with respect to such Monsanto Assets
(or the benefit of such Monsanto Assets) relating to the Former Agriculture
Business, including without limitation, those rights under contracts, leases or
licenses held on the Separation Date, in each case to the extent the use or
benefit of such Monsanto Assets is reasonably necessary to satisfy such
Pharmacia Liabilities.
4.05 MONSANTO'S USE OF MONSANTO ASSETS SUBJECT TO IRBS. Pharmacia is
retaining as Pharmacia Liabilities the IRBs and all obligations related to the
payment of principal and interest or other amounts thereunder and is retaining
as Pharmacia Assets all rights with respect to the IRBs except the right to the
ownership or occupancy of the property transferred to Monsanto as Monsanto
Assets. Monsanto, however, agrees that Monsanto shall comply with all of the
covenants and agreements set forth in the IRBs and any related agreements
entered into in connection with the IRBs that are applicable to the owner or
operator of the property or that affect the use of the property and shall not
take any action which, or fail to take any action the failure of which, could
increase or accelerate Pharmacia's liabilities under the IRBs or adversely
affect the exclusion from gross income of interest on the IRBs. Monsanto shall
not sell or otherwise transfer any properties or assets relating to the IRBs
unless the transferee agrees to assume Monsanto's obligations under this Section
4.05 pursuant to an agreement reasonably satisfactory to Pharmacia.
ARTICLE V
ACCESS TO INFORMATION
5.01 PROVISION OF CORPORATE RECORDS. Prior to or as promptly as
practicable after the Separation Date or from time to time as reasonably
requested by the Monsanto Group, the Pharmacia Group shall deliver to the
Monsanto Group: (i) all corporate books and records of the Monsanto Group; (ii)
originals or copies of those corporate books and records of the Pharmacia Group
primarily relating to the Monsanto Assets, the Monsanto Liabilities, the
Monsanto Business or the Former Agriculture Business; (iii) originals or, at
Pharmacia's election, copies of
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all other corporate records and books of the Pharmacia Group relating to the
Monsanto Group, Monsanto Assets, the Monsanto Liabilities, the Monsanto
Business, the Former Agriculture Business, or the Other Agreements; including
without limitation in each case, all active agreements, active litigation files
and government filings; and (iv) copies of any and all Insurance Policies. From
and after the Separation Date, all such books, records and copies (where copies
are delivered in lieu of originals), whether or not delivered, shall be the
property of the Monsanto Group; provided, however, that all such Information
contained in such books, records or copies relating to the Pharmacia Group,
Pharmacia Assets, the Pharmacia Liabilities, the Pharmacia Business, or the
Other Agreements shall be subject to the applicable confidentiality provisions
and restricted use provisions, if any, contained in this Agreement or the Other
Agreements and any confidentiality restrictions imposed by law. Pharmacia, if it
so elects, may retain copies of any original books and records delivered to
Monsanto along with those original books and records of the Pharmacia Group
authorized herein to be retained (excluding books and records to the extent
relating to Monsanto Technology as defined in the Intellectual Property
Agreements or relating exclusively to Monsanto's use of Shared Know-How as
defined in the Intellectual Property Agreements in the Monsanto Business or
Former Agriculture Business); provided, however, that all such Information
contained in such books, records or copies (whether or not delivered to the
Monsanto Group) relating to the Monsanto Group, the Monsanto Assets, the
Monsanto Liabilities, the Monsanto Business, the Former Agriculture Business, or
the Other Agreements shall be subject to the applicable confidentiality
provisions and restricted use provisions, if any, contained in this Agreement or
the Other Agreements and any confidentiality restrictions imposed by law.
5.02 ACCESS TO INFORMATION. In addition to the provisions set forth
in Section 5.01 above, from and after the Separation Date and upon commercially
reasonable notice, each of the Pharmacia Group and the Monsanto Group shall
afford to the other and to the other's Representatives at the expense of the
other party, commercially reasonable access and duplicating rights during normal
business hours to all Information developed or obtained prior to the Separation
Date within such party's possession relating to the other party or its
businesses, its former businesses, its Assets, its Liabilities, or the Other
Agreements, insofar as such access is reasonably requested by such other party,
but subject to the applicable confidentiality provisions and restricted use
provisions, if any, contained in this Agreement or the Other Agreements and any
confidentiality restrictions imposed by law. In addition, without limiting the
foregoing, Information may be requested under this Section 5.02 for audit,
accounting, claims, intellectual property protection, litigation and Tax
purposes, as well as for purposes of fulfilling disclosure and reporting
obligations. In each case, the requesting party agrees to cooperate with the
other party to minimize the risk of unreasonable interference with the other
party's business. In the event access to any Information otherwise required to
be granted herein or in the Other Agreements is restricted by law or otherwise,
the parties agree to take such actions as are reasonably necessary, proper or
advisable to have such restrictions removed or to seek an exemption therefrom or
to otherwise provide the requesting party with the benefit of the Information to
the same extent such actions would have been taken on behalf of the requesting
party had such a restriction existed and the Separation not occurred.
5.03 LITIGATION SUPPORT AND PRODUCTION OF WITNESSES. After the
Separation Date, each member of the Pharmacia Group and the Monsanto Group shall
use commercially reasonable efforts to provide assistance to the other with
respect to any Third Party Claim, and to
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make available to the other, upon written request: (i) such employees who have
expertise or knowledge with respect to the other party's business or products or
matters in litigation or alternative dispute resolution, for the purpose of
consultation and/or as a witness; and (ii) its directors, officers, other
employees and agents, as witnesses, in each case to the extent that the
requesting party believes any such Person may reasonably be useful or required
in connection with any legal, administrative or other proceedings in which the
requesting party may from time to time be involved. The employing party agrees
that such consultant or witness shall be made available to the requesting party
upon commercially reasonable notice to the same extent that such employing party
would have made such consultant or witness available if the Separation had not
occurred. The requesting party agrees to cooperate with the employing party in
giving consideration to business demands of such Persons.
5.04 REIMBURSEMENT. Except to the extent otherwise contemplated by
this Agreement or any Other Agreement, a party providing Information,
consultant, or witness services to the other party under this Article V shall be
entitled to receive from the recipient, upon the presentation of invoices
therefor, payments for such amounts, relating to supplies, disbursements, travel
expenses, and other out-of-pocket expenses (including the direct and indirect
costs of employees providing consulting and expert witness services in
connection with litigation and alternative dispute resolution, but excluding
direct and indirect costs of employees who provide Information or are fact
witnesses) as may be reasonably incurred in providing such Information,
consulting or witness services.
5.05 RETENTION OF RECORDS. Except as otherwise required by law or
agreed in writing, or as otherwise provided in any Other Agreement, each member
of the Pharmacia Group and the Monsanto Group shall retain, for the periods set
forth in the Pharmacia Corporation Records Retention Manual as in effect on the
Separation Date or such longer period as may be required by law, this Agreement
or the Other Agreements, all proprietary Information in such party's possession
or under its control relating to the business, former business, Assets or
Liabilities of the other party or the Other Agreements and, after the expiration
of such applicable period, prior to destroying or disposing of any of such
Information, (a) the party proposing to dispose of or destroy any such
Information shall provide no less than 30 days' prior written notice to the
other party, specifying the Information proposed to be destroyed or disposed of,
and (b) if, prior to the scheduled date for such destruction or disposal, the
other party requests in writing that any of the Information proposed to be
destroyed or disposed of be delivered to such other party, the party proposing
to dispose of or destroy such Information promptly shall arrange for the
delivery of the requested Information to a location specified by, and at the
expense of, the requesting party.
5.06 PRIVILEGED INFORMATION. In furtherance of the rights and
obligations of the parties set forth in this Article V:
(a) Each party hereto acknowledges that (1) each of the Pharmacia
Group on the one hand, and the Monsanto Group on the other hand, has or may
obtain Information regarding a member of the other Group, or any of its
operations, employees, Assets or Liabilities (whether in documents or stored in
any other form or known to its employees or agents), as applicable, that is or
may be protected from disclosure pursuant to the attorney-client privilege, the
work product doctrine or other applicable privileges ("Privileged Information");
(2) there are a number of actual, threatened or future litigation,
investigations, proceedings (including arbitration
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proceedings), claims or other legal matters that have been or may be asserted by
or against, or otherwise affect, each or both of Pharmacia and Monsanto (or
members of either Group) ("Litigation Matters"); (3) Pharmacia and Monsanto have
a common legal interest in Litigation Matters, in the Privileged Information,
and in the preservation of the confidential status of the Privileged
Information, in each case relating to the Pharmacia Business or the Monsanto
Business or any former businesses, the Assets or the Liabilities of each party
as it or they existed prior to the Separation Date or relating to or arising in
connection with the relationship between the constituent elements of the Groups
on or prior to the Separation Date; and (4) Pharmacia and Monsanto intend that
the transactions contemplated by this Agreement and the Other Agreements and any
transfer of Privileged Information in connection herewith or therewith shall not
operate as a waiver of any potentially applicable privilege.
(b) Each of Pharmacia and Monsanto agrees, on behalf of itself and
each member of the Group of which it is a member, not to disclose or otherwise
waive any privilege attaching to any Privileged Information relating to the
Pharmacia Business or the Monsanto Business or any former businesses or Assets
or Liabilities of either party as they or it existed prior to the Separation
Date, respectively, or relating to or arising in connection with the
relationship between the Groups on or prior to the Separation Date, without
providing prompt written notice to and obtaining the prior written consent of
the other, which consent shall not be unreasonably withheld and shall not be
withheld if the other party certifies that such disclosure is to be made in
response to a likely threat of suspension, debarment, criminal indictment or
similar action; provided, however, that Pharmacia and Monsanto may make such
disclosure or waiver with respect to Privileged Information if such Privileged
Information relates, in the case of Pharmacia, solely to the Pharmacia Business,
its former businesses (other than the Monsanto Business or Former Agriculture
Business), the Pharmacia Assets or the Pharmacia Liabilities as each existed
prior to the Separation Date or, in the case of Monsanto, solely to the Monsanto
Business, the Former Agriculture Business, the Monsanto Assets or the Monsanto
Liabilities, as each existed prior to the Separation Date. The parties will use
commercially reasonable efforts to limit any such disclosure or waiver to the
maximum extent possible and shall seek the execution of a confidentiality
agreement by the party or parties to which such disclosure or waiver is made.
(c) Upon any member of the Pharmacia Group or any member of the
Monsanto Group receiving any subpoena or other compulsory disclosure notice from
a court, other governmental agency or otherwise which requests disclosure of
Privileged Information, in each case relating to the Pharmacia Business, its
former businesses (other than the Monsanto Business or Former Agriculture
Business), the Pharmacia Assets or the Pharmacia Liabilities (in the case of the
Monsanto Group) or the Monsanto Business, Former Agriculture Business, the
Monsanto Assets or the Monsanto Liabilities (in the case of the Pharmacia
Group), as they or it existed prior to the Separation Date or relating to or
arising in connection with the relationship between the constituent elements of
the Groups on or prior to the Separation Date, the recipient of the notice shall
promptly provide to Pharmacia, in the case of receipt by a member of the
Monsanto Group, or to Monsanto, in the case of receipt by a member of the
Pharmacia Group, a copy of such notice, the intended response, and all materials
or information relating to the other Group that might be disclosed. In the event
of a disagreement as to the intended response or disclosure, unless and until
the disagreement is resolved as provided in paragraph (b) above, Pharmacia and
Monsanto shall cooperate to assert all defenses to disclosure claimed by either
Group, at the cost and expense of the Group claiming such defense to disclosure,
and shall not disclose any
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disputed documents or information until all legal defenses and claims of
privilege have been finally determined.
5.07 CONFIDENTIALITY. From and after the Separation Date, each of
Pharmacia and Monsanto shall hold, and shall use its commercially reasonable
efforts to cause its employees, Affiliates and Representatives to hold, in
strict confidence all Information concerning or belonging to the other party
obtained by it prior to the Separation Date or furnished to it by such other
party pursuant to this Agreement or the Other Agreements and shall not release
or disclose such Information to any other Person, except its Representatives,
who shall be bound by the provisions of this Section 5.07; provided, however,
that Pharmacia and Monsanto and their respective employees, Affiliates and
Representatives may disclose such Information to the extent that (a) disclosure
is compelled by judicial or administrative process or, in the opinion of
Pharmacia's or Monsanto's counsel (as the case may be), by other requirements of
law, or (b) such party can show that such Information was (1) available to such
party after the Separation Date from Third Party sources other than employees or
former employees of either party, their Affiliates, former Affiliates,
Representatives or former Representatives, on a nonconfidential basis prior to
its disclosure to such party after the Separation Date by the other party, (2)
in the public domain through no fault of such party, (3) lawfully acquired by
such party from Third Party sources other than employees or former employees of
either party, their Affiliates, former Affiliates, Representatives or former
Representatives, after the time that it was furnished to such party pursuant to
this Agreement or the Other Agreements or (4) is independently discovered or
developed after the Separation Date by employees of such party. Notwithstanding
the foregoing, each of Pharmacia and Monsanto and their respective
Representatives and Affiliates shall be deemed to have satisfied its obligations
under this Section 5.07 with respect to any Information if it exercises the same
care with regard to such Information as it takes to preserve confidentiality for
its own similar Information. Each party further covenants that it shall not
disclose to any Third Party (or any successor by merger or otherwise) the fact
that the other party uses Shared Know-How (as defined in the Intellectual
Property Agreements) or if known, the particulars of such use.
ARTICLE VI
DISPUTE RESOLUTION
6.01 STEP PROCESS. Any controversy or claim arising out of or
relating to this Agreement or any Other Agreement, or the breach thereof (a
"Dispute"), shall be resolved by a series of three events in the following
sequence: negotiation between senior executives, mediation and then binding
arbitration. Each party agrees on behalf of itself and each member of its
respective Group that the procedures set forth in this Article VI shall be the
exclusive means for resolution of any Dispute. The initiation of mediation or
arbitration hereunder will toll the applicable statute of limitations for the
duration of any such proceedings.
6.02 NEGOTIATION. The parties will first attempt to resolve any
Dispute by direct discussions and negotiation, including if either party so
elects, negotiation among senior executives of Pharmacia and Monsanto. Any party
asked to participate in such negotiations will use reasonable efforts to make a
designated senior executive available promptly to participate in negotiations,
with authority to resolve the matter. The designated senior executives shall
consult
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and negotiate with each other in good faith and, recognizing their mutual
interests, attempt to reach a just and equitable solution satisfactory to both
parties. If they do not reach such a solution within a period of 30 days after a
notice calling for negotiation among senior executives is given, then, upon
notice by either party to the other, any Dispute shall be referred to mediation
administered by the American Arbitration Association in accordance with its
Commercial Mediation Rules.
6.03 MEDIATION. If a Dispute cannot be settled through negotiation
as provided in Section 6.02, the parties agree to attempt to settle the Dispute
in an amicable manner by mediation administered by the American Arbitration
Association under its Commercial Mediation Rules, before resorting to
arbitration. If the Dispute is not resolved within 60 days after initiation of
mediation, either party may demand arbitration by the American Arbitration
Association administered under its Commercial Arbitration Rules (the "Rules").
6.04 ARBITRATION. Any otherwise unresolved Dispute shall be resolved
by final and binding arbitration administered by the American Arbitration
Association in accordance with its Rules and Title 9 of the U.S. Code. Judgment
on the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The number of arbitrators shall be one if the claims in
such Dispute aggregate less than $1 million, and three if the claims in such
Dispute aggregate $1 million or more. If three arbitrators are to be chosen, one
shall be appointed by each of the parties and the third shall be selected by
mutual agreement, if possible, within 30 days of the selection of the second
arbitrator and thereafter pursuant to the Rules. The place of arbitration shall
be New York, N.Y.
6.05 INJUNCTIVE RELIEF. Either party may make an application to the
arbitrator(s) seeking injunctive or other provisional relief to maintain the
status quo until such time as the arbitration award is rendered or the
controversy is otherwise resolved. Either party also may, without waiving any
remedy under this Article, apply to any court having jurisdiction for any
interim or provisional relief (including without limitation injunctive relief)
that is necessary to maintain the parties' relative positions until such time as
the arbitration award is rendered or the controversy is otherwise resolved.
6.06 REMEDIES. The arbitrator(s) shall have no authority or power to
limit, expand, alter, amend, modify, revoke or suspend any condition or
provision of this Agreement or any Other Agreement, nor any right or power to
award punitive or treble damages.
6.07 EXPENSES. The parties shall bear their own expenses and
attorneys' fees in pursuit and resolution of any Dispute. The parties shall
share equally the costs and expenses (including the fees of any neutral mediator
or arbitrator) of any mediation or arbitration hereunder.
ARTICLE VII
NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS
7.01 NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS. Monsanto
understands and agrees that no member of the Pharmacia Group is, in this
Agreement or in any Other Agreement,
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representing or warranting to the Monsanto Group in any way as to the Monsanto
Assets, the Monsanto Liabilities, the Monsanto Business, the Former Agriculture
Business or the Monsanto Balance Sheet, or as to any consents or approvals
required in connection with the consummation of the transactions contemplated by
this Agreement, it being agreed and understood as between the Groups, the
members of the Monsanto Group shall take all of the Monsanto Assets "as is,
where is" and that, except as provided in this Section 7.01 or in Section 4.01,
the members of the Monsanto Group shall bear the economic and legal risk that
conveyances of the Monsanto Assets shall prove to be insufficient or that the
title of any member of the Monsanto Group to any Monsanto Assets shall be other
than good and marketable and free from encumbrances. Real property in the United
States being transferred to Monsanto will be conveyed by Special Warranty Deed,
in recordable form and warranting title to be free and clear from all lawful
claims of those claiming by, through or under Pharmacia, but not otherwise;
provided, however, such Special Warranty Deed shall be subject to deed
restrictions, easements, rights-of-way, and all other matters of record.
ARTICLE VIII
INSURANCE
8.01 INSURANCE POLICIES AND RIGHTS.
(a) To the extent permitted by law, without limiting the generality
of the definition of Monsanto Assets set forth in Section 1.01, the effect of
Section 2.01, or the availability of subrogation rights as an Indemnifying Party
under Section 3.03, the Monsanto Assets shall include any and all rights of an
insured party, including rights of indemnity and the right to be defended by or
at the expense of the insurer, and to receive Insurance Proceeds with respect to
all Insured Monsanto Claims under any Insurance Policies. The Monsanto Group
shall be solely responsible for any and all deductibles, self-insured
retentions, retrospective premiums, claims handling and other charges owed under
the Insurance Policies with respect to the coverage provided for Insured
Monsanto Claims.
(b) To the extent permitted by law, without limiting the generality
of the definition of Pharmacia Assets set forth in Section 1.01, the effect of
Section 2.01, or the availability of subrogation rights as an Indemnifying Party
under Section 3.03, the Pharmacia Assets shall include any and all rights of an
insured party including rights of indemnity and the right to be defended by or
at the expense of the insurer, and to receive Insurance Proceeds under any
Insurance Policies other than the rights under the Insurance Policies which are
included in Monsanto Assets pursuant to Section 8.01(a). The Pharmacia Group
shall be solely responsible for any and all deductibles, self-insured
retentions, retrospective premiums, claims handling and other charges owned
under the Insurance Policies with respect to the coverage provided for Insured
Claims other than Insured Monsanto Claims.
(c) Solely for purposes of this Article VIII, "Pharmacia Group" and
"Monsanto Group" shall include their consolidated entities to the extent such
entities were in existence on or prior to the Separation Date or are set forth
on Schedule M-8.
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8.02 ADMINISTRATION AND RESERVES. Consistent with the provisions of
Article III, from and after the Separation Date:
(a) Pharmacia shall be responsible for (1) Insurance Administration
of the Insurance Policies with respect to any Pharmacia Liabilities, any
Pharmacia Assets or any claims as to which the Pharmacia Group has retained
rights of reimbursement or subrogation pursuant to this Agreement or any Other
Agreement; and (2) Claims Administration with respect to any Pharmacia
Liabilities, any Pharmacia Assets or any claims as to which the Pharmacia Group
has retained rights of reimbursement or subrogation pursuant to this Agreement
or any Other Agreement. It is understood that the retention of the Insurance
Policies by Pharmacia is in no way intended to limit, inhibit or preclude any
right to insurance coverage for any Insured Claim or any other rights under the
Insurance Policies, including without limitation, claims of Monsanto and any of
its operations, Subsidiaries and Affiliates for insurance coverage,
reimbursement, subrogation or otherwise; and
(b) Monsanto shall be responsible for (1) Insurance Administration
of the Insurance Policies with respect to any Monsanto Liabilities, any Monsanto
Assets, or any claims as to which the Monsanto Group has rights of reimbursement
or subrogation pursuant to this Agreement or any Other Agreement, and (2) Claims
Administration with respect to any Monsanto Liabilities, any Monsanto Assets, or
any claims as to which the Monsanto Group has rights of reimbursement or
subrogation pursuant to this Agreement or an Other Agreement. Subject to the
terms of the Services Agreement, Pharmacia shall perform the Insurance
Administration and provide assistance to the Monsanto Group with respect to
Claims Administration for claims as to which Monsanto or the Monsanto Group has
rights or obligations hereunder as part of the insurance and risk management
services it will perform for the Monsanto Group after the Separation Date.
(c) The parties hereto shall cooperate with regards to Insurance
Administration, and shall share information concerning such matters so that both
the Monsanto Group and the Pharmacia Group are aware on a continuing basis of
remaining aggregate limits of coverage, deductible payments and other matters
relevant to continued dealings with insurers providing coverage for Liabilities
of both Groups.
(d) Nothing in this Agreement shall be construed or deemed to affect
in any way the right of Pharmacia to obtain and administer future insurance
policies or to enter into future indemnification agreements with third parties
on whatever terms it believes to be advisable, including the entry into
insurance policies covering Pharmacia and its subsidiaries.
8.03 ALLOCATION OF INSURANCE PROCEEDS; COOPERATION.
(a) Except as otherwise provided in Section 3.03(c), the parties
shall use reasonable efforts to ensure that Insurance Proceeds received with
respect to claims, costs and expenses under the Insurance Policies shall be paid
to Pharmacia with respect to Pharmacia Liabilities and to Monsanto with respect
to the Monsanto Liabilities.
(b) In the case of any Shared Contingent Liability, any Insurance
Proceeds or other amounts actually received, realized or recovered by any party
in respect of the Shared
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Contingent Liability will be shared between the parties in such manner as may be
necessary so that the obligations of the parties for such Shared Contingent
Liability, net of such Insurance Proceeds or other amounts, will remain in
proportion to their respective Share Percentages, regardless of which party or
parties may actually receive, realize or recover such Insurance Proceeds or
other amounts.
8.04 REIMBURSEMENT OF EXPENSES. Monsanto shall reimburse the
relevant insurer or the relevant third-party administrator, to the extent
required under any Insurance Policy or Claims Handling Agreement for any
services performed after the Separation Date with respect to any and all Insured
Monsanto Claims which are not Pharmacia Liabilities which are paid, settled,
adjusted, defended and/or otherwise handled by such insurer or third-party
administrator pursuant to the terms and conditions of such Insurance Policy or
Claims Handling Agreement.
8.05 ATTEMPT TO OBTAIN INSURER ENDORSEMENTS. Pharmacia agrees to
notify insurers under the Insurance Policies with policy periods that include
the effective date of this Agreement of the Separation and to request an
endorsement by such insurers that the coverage provided by such Insurance
Policies will apply to the Pharmacia Group and the Monsanto Group with the same
force and effect and subject to the same terms, conditions, and exclusions as if
the Separation had not occurred.
8.06 NO REDUCTION OF COVERAGE. Except for reduction in coverage
resulting from submission and payment of Insured Claims, neither party shall
take any action to eliminate or reduce coverage available to the other party
under any Insurance Policy or Claims Handling Agreement for any claims without
the prior written consent of the other party (which shall not be unreasonably
withheld or delayed); provided, however, that nothing herein shall affect a
party's right to amend the terms of a Claims Handling Agreement or Insurance
Policy on renewal or otherwise.
ARTICLE IX
SHARED CONTINGENT GAINS AND LIABILITIES
9.01 SHARED CONTINGENT GAINS.
(a) Any benefit that may be received from any Shared Contingent Gain
shall be shared among Pharmacia and Monsanto in proportion to the Pharmacia
Share Percentage and the Monsanto Share Percentage, respectively, and shall be
paid in accordance with Section 9.03. Notwithstanding the foregoing, Pharmacia
shall have sole and exclusive authority to commence, prosecute, settle, manage,
control, conduct, waive, forgo, release, discharge, forgive and otherwise
determine all matters whatsoever with respect to any Shared Contingent Gain.
Monsanto shall not take, or permit any member of its Group to take, any action
(including commencing any claim) that would interfere with such rights and
powers of Pharmacia. Pharmacia shall use its commercially reasonable efforts to
notify Monsanto in the event that it commences an Action with respect to a
Shared Contingent Gain; provided that the failure to provide such notice shall
not give rise to any rights on the part of Monsanto. Monsanto acknowledges that
Pharmacia may elect not to pursue any Shared Contingent Gain for any
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reason whatsoever (including a different assessment of the merits of any Action,
claim or right than Monsanto or any business reasons that are in the best
interests of Pharmacia or any member of the Pharmacia Group, without regard to
the best interests of any member of the Monsanto Group) and that no member of
the Pharmacia Group shall have any liability to any Person (including any member
of the Monsanto Group) as a result of any such determination.
(b) In the event of any dispute as to whether any claim or right is
a Shared Contingent Gain, Pharmacia may, but shall not be obligated to, commence
prosecution or other assertion of such claim or right pending resolution of such
dispute. In the event that Pharmacia commences any such prosecution or assertion
and, upon resolution of the dispute, Monsanto is determined hereunder to have
the exclusive right to such claim or right, Pharmacia shall, promptly upon the
request of Monsanto, discontinue the prosecution or assertion of such right or
claim and transfer the control thereof to Monsanto. In such event, Monsanto will
reimburse Pharmacia for all costs and expenses (including allocated costs of
in-house counsel and other personnel), reasonably incurred prior to resolution
of such dispute in the prosecution or assertion of such claim or right.
9.02 SHARED CONTINGENT LIABILITIES.
(a) As set forth in Section 3.04(b), Pharmacia shall assume the
defense of, and may seek to settle or compromise, any Third Party Claim that is
a Shared Contingent Liability, and the costs and expenses (including allocated
costs of in-house counsel and other personnel) thereof shall be included in the
calculation of the amount of the applicable Shared Contingent Liability in
determining the reimbursement obligations of the other parties with respect
thereto pursuant to this Section 9.02.
(b) Each of Pharmacia and Monsanto shall be responsible for its
Share Percentage of any Shared Contingent Liability, adjusting for Insurance
Proceeds and other amounts in the manner provided by Section 3.03(d); provided
that any Shared Contingent Liability for environmental remediation or other
environmental responsibility shall be allocated as provided in Section 9.02(c).
It shall not be a defense to any obligation by any party to pay any amount in
respect of any Shared Contingent Liability that such party was not consulted in
the defense thereof, that such party's views or opinions as to the conduct of
such defense were not accepted or adopted, that such party does not approve of
the quality or manner of the defense thereof or that such Shared Contingent
Liability was incurred by reason of a settlement rather than by a judgment or
other determination of liability.
(c) Any Shared Contingent Liability for environmental remediation or
other environmental responsibility shall be borne by each party in proportion to
its respective contribution to the site giving rise to such Shared Contingent
Liability. Any disagreement between the parties with respect to the allocation
of responsibility under this Section 9.02(c) shall be resolved in accordance
with the provisions of Article VI.
9.03 PAYMENTS.
(a) The applicable percentage of any amount received in respect of
any Shared Contingent Gains pursuant to Section 9.01 or the applicable
percentage of any amount owed in respect of any Shared Contingent Liabilities
pursuant to Section 9.02, including reimbursement
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for the cost or expense of defense (such as allocated costs of in-house counsel
and other personnel) of any Third Party Claim that is a Shared Contingent
Liability, shall be remitted promptly to the party entitled to receive such
amount after such party provides an invoice (including reasonable supporting
information with respect thereto) to the party owing such amount.
(b) In the case of any Shared Contingent Gain, Pharmacia shall be
entitled to retain from the amount of the Shared Contingent Gain otherwise
payable to Monsanto, Monsanto's Share Percentage of the costs and expenses
(including allocated costs of in-house counsel and other personnel) paid or
incurred by or on behalf of any member of the Pharmacia Group in connection with
such Shared Contingent Gain. In the case of any Shared Contingent Liability,
Pharmacia shall be entitled to reimbursement from Monsanto in advance of a final
determination of any Action for amounts paid in respect of costs and expenses
(including allocated costs of in-house counsel and other personnel) related
thereto, from time to time as such costs and expenses are incurred.
(c) Any amounts billed and properly payable in accordance with this
Article IX that are not paid within 30 days of such bill shall bear interest at
the Prime Rate plus 2% per annum.
9.04 PROCEDURES TO DETERMINE STATUS OF SHARED CONTINGENT GAINS AND
LIABILITIES.
(a) Pharmacia and Monsanto will form the Shared Contingent Claim
Committee for the purpose of resolving whether any claim or right is a Shared
Contingent Gain and whether any Liability is a Shared Contingent Liability.
(b) Either party may refer any potential claim, right or Liability
to the Contingent Claim Committee for resolution as described in Section 9.04(a)
and the Shared Contingent Claim Committee's determination (which shall be made
within 30 days of such referral), if unanimous, shall be binding on both parties
and their respective successors and assigns. In the event that the Shared
Contingent Claim Committee cannot reach a unanimous determination as to the
nature or status of any such claim, right or Liability within 30 days after such
referral, the issue will be submitted for arbitration pursuant to the procedures
set forth in Article VI of this Agreement. The outcome of the arbitration
pursuant to Article VI shall be final and binding on both parties and their
respective successors and assigns.
ARTICLE X
NON-COMPETITION
10.01 MONSANTO NON-COMPETE. For a two year period following the
Separation Date, the Monsanto Group shall not commercialize (i.e., sell or
transfer for sale or use by the end user) products in the businesses retained by
Pharmacia. This obligation shall include without limitation COX-2 inhibitors and
IBAT (ASBT) inhibitors from any synthetic, plant or other origin. Excluded from
this non-compete obligation are the following: (i) any nutrition product (other
than said COX-2 inhibitors and IBAT (ASBT) inhibitors) to the extent that
commercialization of such product does not require approval by the Food & Drug
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Administration as a drug or (ii) the production of any protein or other material
(other than said COX-2 inhibitors and IBAT (ASBT) inhibitors) in plants,
microbes or enzymatic technology.
10.02 PHARMACIA NON-COMPETE. For a two year period following the
Separation Date, the Pharmacia Group shall not commercialize (i.e., sell or
transfer for sale or use by the end user) products in the businesses transferred
to Monsanto. This obligation shall include without limitation any and all
non-human somatotropins.
ARTICLE XI
MISCELLANEOUS
11.01 CONDITIONS TO OBLIGATIONS.
[Intentionally omitted.]
11.02 COMPLETE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, the Other Agreements and the agreements and other documents referred to
herein shall constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
11.03 OTHER AGREEMENTS. Except as otherwise expressly provided
herein, if there shall be a conflict or an inconsistency between the provisions
of this Agreement and the provisions of an Other Agreement, the provisions of
this Agreement shall control over the inconsistent provisions of the Other
Agreement as to matters within the scope of this Agreement.
11.04 EXPENSES. Pharmacia shall pay (or reimburse Monsanto for) all
reasonable and customary out-of-pocket costs and expenses of any party hereto
whether incurred prior to or after the Separation Date directly related to the
preparation, execution and delivery of this Agreement and the Other Agreements
and the consummation of the Separation and the IPO, consisting of fees and
expenses of external advisors (including independent public accountants,
consultants and attorneys), expenses directly related to the IPO (other than
underwriting discounts and commissions), transfer and other costs, registration
and filing fees, printing and mailing costs, and any other costs, fees or
charges imposed by a governmental entity.
11.05 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (other than the
laws regarding choice of laws and conflicts of laws) as to all matters,
including matters of validity, construction, effect, performance and remedies;
provided, however, that the Arbitration Act shall govern the matter described in
Article VI, and the Delaware Uniform Arbitration Act, Del. Code
Ann.ss.ss.5701-5725, shall not apply to the matters set forth in this Agreement.
11.06 NOTICES. All notices, requests, claims, demands and other
communications hereunder (collectively, "Notices") shall be in writing and shall
be given (and shall be deemed to have been duly given upon receipt) by delivery
in person, by cable, telegram, facsimile, electronic mail or other standard form
of telecommunications (provided confirmation is
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delivered to the recipient the next Business Day in the case of facsimile,
electronic mail or other standard form of telecommunications) or by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:
If to Pharmacia: Pharmacia Corporation
100 Route 206 North
Peapack, New Jersey 07977
Attention: Christopher J. Coughlin
Telephone: (908) 901-8000
Facsimile: (908) 901-1815
with a copy to: Pharmacia Corporation
100 Route 206 North
Peapack, New Jersey 07977
Attention: Richard T. Collier
Telephone: (908) 901-8000
Facsimile: (908) 901-1810
If to Monsanto: Monsanto Company
800 North Lindbergh Boulevard
St. Louis, Missouri 63167
Attention: Terrell K. Crews
Telephone: (314) 694-1000
Facsimile: (314) 694-8610
with a copy to: Monsanto Company
800 North Lindbergh Boulevard
St. Louis, Missouri 63167
Attention: R. William Ide III
Telephone: (314) 694-1000
Facsimile: (314) 694-6399
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 11.06.
11.07 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by a written agreement signed by both of the
parties hereto.
11.08 SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARIES. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their successors and permitted assigns,
but neither this Agreement nor any of the rights, interests and obligations
hereunder shall be assigned by any party hereto without the prior written
consent of the other party (which consent shall not be unreasonably withheld or
delayed). Except for the provisions of Sections 3.03 and 3.04 relating to
Indemnities, which are also for the benefit of the Indemnitees, this Agreement
is solely for the benefit of the parties hereto and their Subsidiaries and
Affiliates and is not intended to confer upon any other Persons any rights or
remedies hereunder.
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11.09 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.10 INTERPRETATION. The Article and Section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties hereto and shall not in any way affect the meaning or
interpretation of this Agreement.
11.11 LEGAL ENFORCEABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Each party acknowledges
that money damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.
11.12 REFERENCES; CONSTRUCTION. References to any "Appendix,"
"Article," "Exhibit," "Schedule" or "Section," without more, are to Appendices,
Articles, Exhibits, Schedules and Sections to or of this Agreement. Unless
otherwise expressly stated, clauses beginning with the term "including" set
forth examples only and in no way limit the generality of the matters thus
exemplified.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
PHARMACIA CORPORATION
By:___________________________
Name:
Title:
MONSANTO COMPANY
By:___________________________
Name:
Title:
<PAGE>
EXHIBITS AND SCHEDULES
<TABLE>
<CAPTION>
EXHIBITS
--------
<S> <C>
Exhibit C-1 Form of Corporate Agreement
Exhibit E-1 Form of Employee Benefits and Compensation Allocation Agreement
Exhibit I-1 Form of Intellectual Property Transfer Agreement
Exhibit S-1 Form of Services Agreement
Exhibit T-1 Form of Tax Sharing Agreement
Exhibit 2.02(a) Form of Monsanto's Restated Certificate of Incorporation
Exhibit 2.02(b) Form of Monsanto's By-Laws
SCHEDULES
---------
Schedule E-1 Excluded Monsanto Assets
Schedule E-2 Excluded Monsanto Liabilities
Schedule F-1 Former Agriculture Business
Schedule L-1 Lease Agreements: Facilities
Schedule M-1 Medium-Term Notes: Agreements
Schedule M-2 Monsanto Assets: Real Property
Schedule M-3 Monsanto Assets: Partnership, Joint Venture and Other Equity Interests
Schedule M-4 Monsanto Assets: Other
Schedule M-5 Monsanto Business: Principal Monsanto Businesses and Operations
Schedule M-6 Monsanto Liabilities: Environmental
Schedule M-7 Monsanto Liabilities: Other
Schedule M-8 Monsanto Subsidiaries
Schedule M-9 Monsanto Support Agreements
Schedule 2.01 Delayed Transfer of Assets and Assumption of Liabilities
Schedule 2.04 Intercompany Accounts: Specified Jurisdictions Exceptions
Schedule 4.01(d) Sale Assets and Non-Sale Assets
</TABLE>
