SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: September 14, 2000
(Date of earliest event reported: March 10, 1995)
DELTA AND PINE LAND COMPANY
(Exact name of registrant as specified in its charter)
Delaware 62-1040440
(State or other jurisdiction) (IRS employer of incorporation
identification No.)
000-21788
(Commission file number)
One Cotton Row, Scott, Mississippi 38772
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (662) 742-4000
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Item 5. Other Events:
On March 10, 1995, Delta and Pine Land Company, ("D&PL") through its wholly
owned subsidiary D&PL International Technology Corp. ("DITC") and Monsanto
Company ("Monsanto") established D&M International, L.L.C. ("D&M") to establish
businesses in countries where D&PL and Monsanto first agree to do business for
the production of cotton planting seed which contains certain Monsanto insect
resistance genes. DITC is the managing member of D&M of which each member owns
50%. Technology licensing fees for Monsanto technology which are collected by
D&M have been divided 70% to Monsanto and 30% to D&PL while profits from the
joint ventures seed operations have been divided 70% to D&PL and 30% to
Monsanto. D&PL also collects directly from each joint venture a royalty for the
use of its germplasm.
The Egyptian joint venture contemplated at the formation of D&M in 1995 was
never formed. The members have since agreed to do business through D&M in China
(1995), Argentina (1997) and Brazil (1998) and D&M has formed either directly or
indirectly joint ventures with two local partners in China; and one each in
Brazil and Argentina.
The D&M International Operating Agreement filed herewith contains a cross
purchase provision whereby either member may, at any time, offer to cause D&M to
purchase the other members' interest in D&M at a price proposed by the
initiating member. In response to an offer to purchase, the other member must,
through D&M, either sell at the offered price or buy the initiating members
interest at the offered price.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit No. Description
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10.30 D&M International Operating Agreement on March 10,
1995, betweem Delta and Pine Land Company, ("D&PL")
through its wholly owned subsidiary D&PL
International Technology Corp. ("DITC") and Monsanto
Company ("Monsanto").
<PAGE>
SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
DELTA AND PINE LAND COMPANY
Date: September 14, 2000 By: /s/ W. Thomas Jagodinski
------------------------
W. Thomas Jagodinski
Senior Vice President - Finance and Treasurer
(Duly Authorized Officer)
<PAGE>
Exhibit 10.30
OPERATING AGREEMENT
OF
D&M INTERNATIONAL, L.L.C.
THIS OPERATING AGREEMENT is made and entered into as of the 10th day of
March, 1995 by and between the persons executing this Agreement on the signature
page hereof (hereinafter collectively, together with such other persons who may
hereafter become members as provided herein, referred to as the "Members" or
individually as "Member").
WHEREAS, the Members have caused D&M International, L.L.C. (the "Company")
to be formed on March 10, 1995 as a limited liability company under the Missouri
Limited Liability Company Act (the "Act") and, as required thereunder, do hereby
adopt this Operating Agreement as the operating agreement of the Company;
NOW THEREFORE, in consideration of the promises and the mutual agreements
contained herein, the parties hereto agree as follows:
ARTICLE 1
FORMATION AND OFFICES
1.1 Formation.
Pursuant to the Act, the Members formed a Missouri limited liability
company effective upon the filing of the Articles (hereinafter defined) of the
Company with the Secretary of State of Missouri.
1.2 Principal Office.
The principle office of the Company shall be located at One Cotton Row,
P.O. Box 157, Scott, Mississippi 38772, or at such other place(s) as the Members
may determine from time to time.
1.3 Registered Office and Registered Agent.
The location of the registered office and the name of the registered agent
of the Company in the State of Missouri shall be as stated in the Articles as
determined from time to time by the Members.
1.4 Purpose of Company.
The purposes for which the Company is organized shall be:
(a) to establish and own businesses for the production of improved quality
and enhanced value cotton planting seed in Egypt (through the Egyptian Business)
and such other cotton producing countries outside of the United States of
America as the members may agree; and
(b) to conduct such other activities as may be necessary or desirable to
further the business of the Company. The Company shall not engage in any other
business or activity. 1.5 Date of Dissolution.
The latest date on which the Company shall be dissolved is December 31,
2050.
1.6 Representations and Warranties.
Each of the Members has entered into this Agreement and has formed the
Company in reliance upon the following representations and warranties.
(a) Monsanto hereby makes the following representations and warranties to
D&PL Sub, each of which is true and correct on the date hereof and each of which
shall survive the execution of this Agreement.
(i) Monsanto has the power and capacity to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement
constitutes a valid and binding obligation of Monsanto, enforceable against
it in accordance with its terms.
(ii) Monsanto is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Monsanto has the
corporate power and authority to own and use its properties and to transact
the business in which it is engaged.
(iii) Neither the execution of this Agreement nor the operation of the
Company as contemplated herein constitutes or will result in any conflict
with or default or violation of (A) any applicable statute, law, ordinance,
decree, order, injunction, rule, directive or regulation of any government
by which Monsanto or its assets are bound, (B) any provision of Monsanto's
articles of incorporation or its bylaws, or (C) any written or oral
contract, agreement, indenture or evidence of indebtedness to which
Monsanto is a party or by which its assets are bound.
(b) D&PL Sub hereby make the following representations and warranties to
Monsanto, each of which is true and correct on the date hereof and each of which
shall survive the execution of this Agreement:
(i) D&PL Sub has the power and capacity to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement
constitutes a valid and binding obligation of D&PL Sub, enforceable against
it in accordance with its terms.
(ii) D&PL Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. D&PL Sub has the
corporate power and authority to own and use its properties and to transact
the business in which it is engaged.
(iii) Neither the execution of this Agreement nor the operation of the
Company as contemplated herein constitutes or will result in any default or
violation of (A) any applicable statue, law, ordinance, decree, order,
injunction, rule, directive or regulation of any government by which D&PL
Sub or its assets are bound, (B) any provision of D&PL Sub's articles of
incorporation or its bylaws, or (C) any written or oral contract,
agreement, indenture or evidence of indebtedness to which D&PL Sub is a
party or by which its assets are bound.
(c) Any material breach of a Member's representations and warranties in
this Section 1.6 shall, in addition to any other rights and remedies available
to the other Member, entitle such other Member to treat the aforementioned
breach as a material breach of this Agreement or to obtain appropriate legal and
equitable relief.
ARTICLE 2
DEFINITIONS
2.1 Terms Defined Herein.
As used herein, the following terms shall have the following meanings,
unless the context otherwise specifies:
"Act" means the Missouri Limited Liability Company Act, Chapter 347, as
amended from time to time.
"Affiliate" of a specified person (the "Specified Person") means any person
(a) who directly or indirectly controls, is controlled by, or is under common
control with the Specified Person; (b) who owns or controls ten percent (10%) or
more of the Specified Person's outstanding voting securities or percentage
interest; (c) in whom such Specified Person owns or controls ten percent (10%)
or more of the outstanding voting securities or percentage interests; (d) who is
a director, partner, manager, executive officer or trustee of the Specified
Person; (e) in whom the Specified Person is a director, partner, manager,
executive officer or trustee; or (f) who has any relationship with the Specified
Person by blood, marriage or adoption, not more remote than first cousin;
provided, however, that Monsanto and D&PL Sub shall not be considered Affiliates
of each other and no person owning between 10% and 25% of a Member's voting
securities shall be considered an Affiliate of such member for purposes of
Section 6.6 hereof.
"Agreement" mean this Operating Agreement, as amended from time to time.
"Annual Business Plan" has the meaning given thereto in Section 6.9 hereof.
"Approved Annual Business Plan" means an Annual Business Plan approved by
the Members in accordance with Section 6.9 hereof.
"Articles" means the Articles of Organization of the Company filed with the
Secretary of State of Missouri, as amended or restated from time to time.
"Capital Contribution" means the total amount of cash, other property, the
use of property, services rendered, promissory note or other binding written
obligation to contribute cash or property or perform services or other valuable
consideration contributed to the Company by each Member pursuant to the terms of
this Agreement. Any reference in this Agreement to the Capital Contribution of a
Member shall include the Capital Contribution made by any predecessor holder of
the Interest of the then Member.
"Code" means the Internal Revenue Code of 1986, as amended. "Company" means
D&M International, L.L.C.
"D&PL Sub" means D&PL Technology Corp., a Delaware corporation and a wholly
owned subsidiary of Delta and Pine Land Company, a Delaware corporation, or any
substitute Member that acquires D&PL Sub's Interest.
"Egyptian Business" means any Person owned by the Company which operates
its business in Egypt.
"Event of Withdrawal" means an event that causes a Person to cease to be a
Member as provided in the Act.
"Fiscal Year" means the twelve (12) month period beginning September 1 of
any give year. "Interest" refers to all of a Member's right and interests in the
Company in such Member's capacity as a Member, all as provided in the Articles,
this Agreement and the Act.
"Liquidation Proceeds" means all assets of the Company at the time of
liquidation of the Company and all proceeds thereof.
"Managing Member" means D&PL Sub or such other Member designated as
Managing Member at any time by both Members or as otherwise provided herein.
"Members" means those Persons executing this Agreement as members of the
Company, including any substitute Members or additional Members, in each such
Person's capacity as a member of the Company.
"Monsanto" means Monsanto Company, a Delaware corporation, or any
substitute Member that acquires Monsanto's Interest.
"Monsanto Technology" has the meaning set forth in Section 6.9(b) hereof.
"Net Cash Flow" means, with respect to any fiscal period, all revenues during
such period and any amounts theretofore held in any operating reserve which the
Members determine need not be held any longer in reserve, all determined in
accordance with the Company's method of accounting, less Operating Expenses.
"Notice" means a writing, containing the information required by this
Agreement to be communicated to a party, personally delivered or sent by United
States mail, postage prepaid, or sent by pre-paid, overnight delivery or sent by
telecopy to such party at the last known address or fax number, as the case may
be, of such party as shown on the records of the Company, the date of mailing or
sending thereof being deemed the date of receipt thereof.
"Operating Expenses" means, with respect to any fiscal period, (i) to the
extent paid other than with cash withdrawn from operating reserves therefor, the
amount of cash disbursed in such period in order to operate the Company and to
pay expenses (including, without limitation, wages, taxes, insurance, repairs,
amounts payable to foreign governments or agencies thereof, amounts payable to
partners or shareholders in the Egyptian Business or business conducted in other
countries, amounts required by law to be distributed to third parties, royalties
paid by the Company to a Member or any Affiliate of a Member and/or other costs
and expenses) incident to the operation of the Company and (ii) amounts provided
for or set aside for such period to maintain an adequate level of reserves and
working capital.
"Percentage Interest" initially means, with respect to either Member, 50%.
"Person" means any individual, partnership, limited liability company,
corporation, cooperative, trust, estate or other entity.
"Prime Rate" means the annual rate of interest reported from time to time
in The Wall Street Journal as the base rate on corporate loans at large money
center commercial banks.
"Profits and Losses for Tax Purposes" has the meaning ascribed thereto in
Section 4.4 hereof. "Transfer" means (a) when used as a verb, to give, sell,
exchange, assign, pledge, hypothecate, bequeath, devise or otherwise dispose of
or encumber, and (b) when used as a noun, the nouns corresponding to such verbs,
in either case voluntarily or involuntarily, by operation of law or otherwise.
2.2 Other Definitional Provisions.
As uses in this Agreement, accounting terms not defined in this Agreement
shall have the respective meanings given to them under generally accepted
accounting principles. Certain additional defined terms are contained in the
Schedules hereto.
ARTICLE 3
CAPITALIZATION OF THE COMPANY
3.1 Initial Capital Contributions.
With respect to each country in which the Members determine to do business
through the Company, the Members shall agree upon the Capital Contribution of
the Members and shall set forth such agreed upon Capital Contribution on a
schedule relating to such country, which schedule will become a part of and
incorporated into this Agreement. With respect to the Egyptian Business, the
Members agree to make the Capital Contributions which are set forth on Schedule
Egypt-1 attached hereto.
3.2 Additional Capital Contributions.
Neither Member shall be required or shall be permitted to make additional
Capital Contributions unless both Members so agree in writing either as it
relates to Egypt or any other country which the Members may approve.
3.3 Capital Withdrawal Rights, Interest and Priority.
Except as expressly provided in this Agreement, no Member shall be entitled
to withdraw or reduce such Member's Capital Contribution or to receive any
distributions from the Company. In the event a Member withdraws from the Company
in violation of this Agreement and the business of the Company is continued, the
Member shall not be entitled to receive back its Capital Contribution and shall
not be entitled to receive any other type or form of payment from the Company;
instead, such Member shall have the status of an assignee of an Interest. Except
as otherwise provided in this Agreement or in the Schedule related to a
particular country, no Member shall be entitled to demand or receive property
other than cash in return for such Member's Capital Contribution. No Member
shall be entitled to receive or be credited with any interest on the balance of
such Member's Capital Contribution at any time.
ARTICLE 4
CASH DISTRIBUTIONS;
PROFITS AND LOSSES FOR TAX PURPOSES
4.1 Cash Distributions Prior to Dissolution.
(a) The Managing Member shall determine how much Net Cash Flow, if any, of
the Company shall be distributed among the Members each year; provided, however,
if sufficient Net Cash Flow is available, the Managing Member shall distribute
to the Members an amount of Net Cash Flow sufficient for the Members to satisfy
their respective income tax liabilities arising by virtue of the allocations of
income, gain or loss made pursuant to the schedules relating to Egypt and any
other specific countries approved by the Members, assuming each Member is
subject to tax at the highest marginal combined federal and Missouri tax rate
for corporations. Any Net Cash Flow of the Company to be distributed
attributable to countries in which the Members decide to do business through the
Company shall be distributed among the Members in accordance with the Schedules
adopted with respect to each such individual country. The Net Cash Flow with
respect to the Egyptian Business shall be distributed in accordance with
Schedule Egypt-2. If the Company has Net Cash Flow not attributable to any
individual country, such Net Cash Flow shall be distributed among the Members
pro rata in proportion to their respective Percentage Interests.
(b) Notwithstanding anything to the contrary herein provided, no
distribution hereunder shall be permitted to the extent prohibited by the Act.
Currently, among other prohibitions, the Act prohibits a Member from receiving a
distribution to the extent that, after giving effect to the distribution, (i)
the Company would not be able to pay its debts as they become due in the usual
course of business or (ii) the Company's total assets would be less than the sum
of its total liabilities, with Capital Contributions not being deemed a
liability.
4.2 Persons Entitled to Distributions.
All distributions of Net Cash Flow to the Members under Section 4.1 hereof
shall be made to the Persons shown on the records of the Company to be entitled
thereto as of the last day of the fiscal period prior to the time for which such
distribution is to be made, unless the transferor and transferee of any Interest
in the Company otherwise agree in writing to a different distribution and such
distribution is consented to in writing by the Members.
4.3 Reserves.
The Managing Member shall have the right to establish, maintain and expend
reserves to provide for working capital, for future investments, for debt
service and for such other purposes s it may deem necessary or advisable.
4.4 Allocation of Profits and Losses for Tax Purposes and Special
Allocations.
All Profits and Losses for Tax Purposes of the Company and all special
allocations of the Company, in each case as they relate to an individual
country, shall be made in accordance with the Schedule adopted by the Members in
connection therewith. Allocations with respect to the Egyptian Business shall be
made in accordance with Schedule Egypt-3 attached hereto. All necessary tax
allocations not otherwise governed by a Schedule related to a particular country
shall be made in accordance with Schedule B attached hereto.
ARTICLE 5
MEMBERS' REPRESENTATIVES
Each of the Members shall designate by Notice to the other Member(s) one
individual representative (and two alternates for such representative) who will
represent such Member for purposes of giving approvals or consenting to any
proposed action requiring the approval or consent of the Members. Each Member
may, from time to time, change the individuals designated by it as its
representative or its alternates but only upon Notices given to the other
Member. Each such Member hereby represents that its representative or, if such
representative is absent or unavailable, either of its affiliates (in order
named), is or shall be authorized to provide any approval or consent which may
be required or requested hereunder from such Member and the other Member may
rely conclusively upon the signature and authority of such representative or
alternate to deliver or grant such approval or consent without determining that
such representative or alternate is acting with the consent or approval of such
Member, or its board of directors or shareholders. The Members hereby represent
that the following individuals are or shall be authorized to act as their
respective representatives and alternates pursuant to this Agreement to serve
until their respective successors are designated in the manner provided herein:
Monsanto: Representative -- James P. Tobin
First Alternate -- Michael A. Morgan
Second Alternate -- Danny Gigax
D&PL Sub: Representative -- Murray Robinson
First Alternate -- Donald Pallin
Second Alternate -- W. Thomas Jagodinski
ARTICLE 6
MANAGEMENT AND CONTROL
6.1 Powers of the Members.
The business and affairs of the Company shall be managed by the Members.
6.2 Powers and Duties of the Managing Member.
(a) Subject to the limitations contained herein, the Managing Member shall
be responsible for and have charge of the day-to-day operations of the Company,
including without limitation, the providing of management expertise and training
and the supervision of the establishment and construction of any plants and
installation of any machinery utilized by the Company, the Egyptian Business or
any other subsidiary of the Company. the Managing Member shall be required to
devote to the conduct of the business of the Company, including without
limitation the management of the Egyptian Business or any other subsidiary, such
time and attention as it determines, in its reasonable discretion, to be
necessary to accomplish the purposes, and to conduct properly the business, of
the Company.
(b) Notwithstanding the foregoing, Monsanto shall manage and be responsible
for biotechnology activities (to the extent such activities are distinct from
planting, breeding, backcrossing or generally a part of traditional product
multiplication activities) of the Company and its operating Affiliates in Egypt
and other countries, including management and expenditure of sums relating
thereto in the Annual Business Plan.
(c) The Managing Member shall cause to be prepared and presented to the
Members an Annual Business Plan pursuant to Section 6.9 hereof.
(d) Subject to the limitations set forth in this Agreement, the Managing
Member shall perform or cause to be performed all management and operational
functions relating to the business of the Company, including the following:
(i) control the operations of the Company, its subsidiaries and the
Egyptian Business;
(ii) carry out and effect all joint directions of the Members;
(iii) prepare and periodically update the financial statements;
(iv) apply for and obtain appropriate insurance coverage;
(v) temporarily invest funds of the Company in short term investments
where there is appropriate safety of principal;
(vi) engage in any kind of activity and perform and carry out
contracts of any kind necessary to, in connection with, or incidental to
the accomplishment of the purposes of the Company, so long as said
activities and contracts may be lawfully carried on or performed by a
limited liability company under the Act and are in the ordinary course of
business; and
(vii) negotiate, execute and perform all agreements, and exercise all
rights and remedies of the Company, in connection with the foregoing.
(e) Each member shall bear its own expenses incurred in fulfilling its
obligations under this Section 6.2, and neither Member shall include any amount
of its own overhead expenses in any expenses it attributes to, or for which it
seeks reimbursement from, the Company or a subsidiary of the Company.
Notwithstanding the foregoing, when personnel of a Member travel to any country
in which the Members decide to do business through the Company at the request of
the business established in such country and on business of such business,
travel expenses incurred in connection therewith shall be paid or reimbursed by
such business.
6.3 Limitation on Powers of the Managing Member.
Without the approval of each of the Members, the Managing Member shall not
have the authority to:
(a) modify the terms of the Company's investment in the Egyptian Business;
(b) cause the Company to do business through or make any investment in a
Person other than the Egyptian Business;
(c) cause or agree to cause the Egyptian Business to do business anywhere
other than in Egypt or except as provided in any Approved Annual Business Plan;
(d) cause or agree to cause the Egyptian Business, directly or through any
subsidiary or Affiliate of the Company, to do business in any country other than
Egypt;
(e) approve the terms of any agreement between the Company or any Affiliate
of the Company (excluding Affiliates of Monsanto Company and excluding
Affiliates of Delta and Pine Land Company but not excluding Affiliates of both
Monsanto Company and Delta and Pine Land Company) and a foreign government or an
agency thereof except for purchases and sales of cotton planting seed in the
ordinary course of the Company's business to the extent forecasted therefor in
an Approved Annual Business Plan;
(f) enter into or amend any transaction between the Company and a Member or
an Affiliate of a Member, or establish or pay any salaries, bonuses, or other
forms of compensation to Persons who are employees or Affiliates of a Member for
services as employee, consultants, agents or representatives of the Company;
(g) assume, incur or guaranty or become liable for any indebtedness for
borrowed money on behalf of the Company or any subsidiary of the Company in
excess of $2,000,000;
(h) sell, exchange, lease, mortgage, pledge or otherwise dispose of all or
substantially all of the assets of the Company or any subsidiary of the Company
in a single transaction or series of related transactions, or merge or
consolidate the Company, or cause any subsidiary to merge or consolidate, with
any other Person;
(i) admit any additional Members (except upon satisfaction of the
requirements of Section 8.3);
(j) terminate, dissolve or wind-up the Company or distribute assets in-kind
as provided for in Section 9.3;
(k) bring any legal actions against a foreign government or government
agency, against any Member or relating to any technology which may be licensed
to the Company;
(l) determine, modify, compromise or release the amount and character of
the contributions which a Member shall make or shall promise to make, as the
consideration for the issuance of an Interest in the Company; or
(m) sell, assign, convey or otherwise transfer any Company interest in the
Egyptian Business or any other subsidiary of the Company or permit the Egyptian
Business or any other subsidiary of the Company to issue any interest therein to
a third party.
6.4 Fiduciary Duty of Managing Member.
The Managing Member shall have fiduciary responsibility for the safekeeping
and use of all assets (including records) of the Company, whether or not in its
immediate possession or control, and the Managing Member shall not employ, or
permit another to employ, such funds or assets in any manner except for the
exclusive benefit of the Company.
6.5 Compensation.
Except as provided herein, a Member shall not, in its capacity as a Member,
receive any compensation other than the allocations and distributions to which
it may be entitled as provided herein.
6.6 Other Business Ventures.
(a) Except as otherwise provided in Section 6.6(b) or any existing
agreements between the Members, any Member may engage in or possess an interest
in other business ventures of every nature and description, independently or
with others, whether or not similar to or in competition with the business of
the Company, and neither the Company nor the Members shall have any right by
virtue of this Agreement in or to such other business ventures or to the income
or profits derived therefrom. Unless otherwise agreed to, no Member shall be
required to devote all such Member's time or business efforts to the affairs of
the Company, but shall devote so much of such Member's time and attention to the
Company as is reasonably necessary and advisable to manage the affairs of the
Company to the best advantage of the Company.
(b) Notwithstanding the foregoing Section 6.6(a), each Member agrees that,
as long as it is a Member, neither it nor any of its Affiliates will provide,
directly or indirectly, both (1) cottonseed delinting services, equipment,
personnel or expertise and (2) services, consultation or other activities
involving improving the insect-resistance in cotton plants through transgenic
improvements to any party in Egypt other than the Company or the Egyptian
Business without first offering the opportunity to provide such services to the
Egyptian Business, pursuant to this Section 6.6. In the event a Member or one of
its Affiliates desires to pursue an opportunity in Egypt or any other country
which the Members agree to do business of the sort described in the previous
sentence (an "Opportunity"), it shall first disclose the Opportunity of the
Company (or the Egyptian Business, as the case may be) and the Company (or the
Egyptian Business) shall thereupon have a ninety (90) day period in which to
take advantage of the Opportunity. During such ninety (90) day period, neither
Member shall solicit or otherwise pursue the Opportunity or interfere with the
Company's (or the Egyptian Business') efforts to take advantage if the
Opportunity. If, at the expiration of such ninety (90) day period, the Company
(or the Egyptian Business) and the party or parties presenting the Opportunity
have not entered into a written agreement (which phrase shall include a letter
of intent) with respect to the Opportunity, the Members shall be free to pursue
the Opportunity individually.
6.7 Authority to Execute Documents to be Filed Under the Act.
The Members shall have the power and authority to execute on behalf of the
Company any document required to be filed with the Secretary of the State of
Missouri pursuant to the terms of the Act or with any other public official of
any other jurisdiction necessary to qualify the Company to do business in such
jurisdiction or which the Members otherwise determine to be necessary or
appropriate.
6.8 Powers of the Member.
No Member, acting solely in its capacity as a Member, shall act as an agent
of the Company or have any authority to act for the Company, except as
authorized by the Members.
6.9 Annual Business Plan.
(a) The Managing Member shall cause to be prepared under its direction, and
present to the Members no later than ninety (90) days after formation of the
Company for the first Fiscal Year, and thereafter no later than July 1 of each
year, a detailed Annual Business Plan (as defined below) for the promotion,
operation, and management of the Company and its subsidiaries, on a country-by-
country basis, for the next Fiscal Year. The Annual Business Plan shall be
substantially in the form attached hereto as Schedule A. Not later than thirty
(30) days after the presentation of the proposed Annual Business Plan, the
Members shall meet to discuss the Annual Business Plan.
(b) Prior to the first multiplication for commercial sale in any country by
the Company or its subsidiary of any see containing Monsanto Technology (as
defined in the license agreements entered into with respect to the individual
countries), the Annual Business Plan as it relates to such country proposed by
the Managing Member shall become the "Approved Annual Business Plan" of the
Company following the discussions referenced in sub-section (a) above.
(c) At any time after such first multiplication for commercial sale in any
country of any see containing Monsanto Technology, in order for the Annual
Business Plan with respect to such country to take effect, the Annual Business
Plan, as it relates to that country, must be approved by all Members, and upon
receipt of such approval shall be an "Approved Annual Business Plan."
(d) Each Approved Annual Business Plan shall form the basis of the
operations of the Company during the next Fiscal Year, and the Managing Member
shall have the authority to expend funds and implement the items set forth
therein without any further approval of the other Members. The Approved Annual
Business Plan shall be reviewed by the Members on a quarterly basis and its
provisions shall be subject to modification as required by business conditions,
if such modifications are approved by the Member or Members which approved the
original Approved Annual Business Plan.
(e) In the event the Annual Business Plan for any country for any Fiscal
Year after the first multiplication for commercial sale in any country by the
Company or its subsidiary of any seed containing Monsanto Technology is not
approved by all Members by the first day of the subject Fiscal Year, the Company
shall do business with respect to such country for the subject Fiscal Year
pursuant to the last previously Approved Annual Business Plan as the same may
have been modified as provided herein.
6.10 Covenants of the Members.
During the terms of this Agreement, neither Member shall take, or cause the
Company to take, any of the following actions:
(a) performing any act in contravention of this Agreement;
(b) performing any act which would make it impossible to carry on the
ordinary business of the Company, except as otherwise provided in this
Agreement;
(c) possessing any asset of the Company, assigning any rights therein or
selling any asset of the Company, for other than a Company purpose in the usual
course of business of the Company;
(d) making any loan to any Member or permitting any Member to make any loan
to the Company, except as permitted pursuant to a Schedule hereto; or
(e) commingling the Company's funds with those of any other Person.
ARTICLE 7
LIABILITY AND INDEMNIFICATION
7.1 Liability of Members.
(a) A Member shall only be liable to make the Member's Capital Contribution
and additional Capital Contributions, if any, agreed upon pursuant to Section
3.2 hereof. No Member shall be liable for any obligations of the Company or any
other Member, unless guaranteed by the Member pursuant to a separate document
signed by such Member.
(b) No distribution of Net Cash Flow or other cash made to any Member shall
be determined a return or withdrawal of a Capital Contribution unless so
designated by the Members. No Member, except as otherwise specifically provided
in the Act, shall be obligated to pay any distribution to or for the account of
the Company or any creditor of the Company.
7.2 Indemnification.
The Members and their Affiliates and their respective stockholders,
members, mangers, directors, officers, partners and employees (individually, an
"Indemnitee") shall be indemnified and held harmless by the Company from and
against any and all losses, claims, damages, liabilities, expenses, (including
legal fees and expenses), judgments, fines, settlements and other amounts
arising from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative, in which the Indemnitee may be
involved, or threatened to be involved, as a party or otherwise by reason of
such Indemnitee's status as a Member or an Affiliate thereof or a stockholder,
member, manager, director, officer, partner or employee thereof, which relates
to or arises out of the company, its assets, business or affairs, if in each of
the foregoing cases (i) the Indemnitee acted in good faith and in a manner such
Indemnitee believed to be in, or not opposed to, the best interests of the
Company, and, with respect to any criminal proceeding, had no reasonable cause
to believe such Indemnitee's conduct was unlawful, and (ii) the Indemnitee's
conduct did not constitute gross negligence or willful or wanton misconduct. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere, or its equivalent, shall not, of
itself, create a presumption that the Indemnitee acted in a manner contrary to
that specified in (i) or (ii) above. Any indemnification pursuant to this
Article 7 shall be made only out of the assets of the Company and no Member
shall have any personal liability on account thereof.
7.3 Expenses.
Expenses (including reasonable legal fees) incurred by an Indemnitee in
defending any claim, demand, action, suit or proceeding describe in Section 7.2
may, from time to time, be advanced by the company prior to the final
disposition of such claim, demand, action, suit or proceeding, upon receipt by
the Company of an undertaking by or on behalf of the Indemnitee to repay such
amount if it shall be determined that the Indemnitee is not entitled to be
indemnified as authorized in this Article 7.
7.4 Non-Exclusivity.
The indemnification and advancement of expenses set forth in this Article 7
shall not be exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any statute,
the Articles, this Agreement, any other agreement, a vote of Members, a policy
of insurance or otherwise, and shall not limit in any way any right which the
Company may have to make additional indemnifications with respect to the same or
different Persons or classes of Persons. The indemnification and advancement of
expenses set forth in this Article 7 shall continue as to a Person who has
ceased to be Member and shall inure to the benefit of the successors and assigns
of such a Person.
7.5 Insurance.
The Company shall purchase and maintain insurance on behalf of the Members
against any liability asserted against them and incurred by them in such
capacity, or arising out of their status as Members if such insurance is
available at a reasonable cost, whether or not the Company would have the power
to indemnify them against such liability under this Article 7.
ARTICLE 8
TRANSFERS OF INTERESTS
8.1 General Restrictions.
No Member may Transfer all or any part of such Member's Interest, except as
provided in this Agreement. Any purported Transfer of an Interest or a portion
thereof in violation of the terms of this Agreement shall be null and void and
of no effect. A permitted Transfer shall be effective as of the date specified
in the instruments relating thereto. Any transferee desiring to make a further
Transfer shall become subject to all the provisions of this Article 8 to the
same extent and in the same manner as any Member desiring to make any Transfer.
No Member shall have the right to withdraw except with the consent of all other
Members. Delta and Pine Land Company shall not Transfer, or permit to be issued
to another Person, shares of the capital stock of D&PL Sub, without the written
consent of all the Members. In the event Monsanto Transfers its Interest to any
Affiliate of Monsanto, Monsanto shall not Transfer, or permit to be issued to
another Person, shares of the capital stock or other interests in such Monsanto
Affiliate, without the written consent of all Members.
8.2 Permitted Transfers.
(a) No Member may Transfer all or any part of such Member's Interest
without the written consent of all other Members. A Person shall cease to be a
Member upon assignment of all such Member's Interest.
(b) Unless and until admitted as a substitute Member pursuant to Section
8.3, a transferee of a Member's Interest in whole or in part shall be an
assignee with respect to such Interest or portion thereof and shall not be
entitled to participate in the management of the business and affairs of the
Company or to become or to exercise the rights of a Member, including the right
to vote, the right to require any information or accounting of the Company's
business or the right to inspect the Company's books and records. Such
transferee shall only be entitled to receive, to the extent of the Interest
transferred to such transferee, the share of distributions and profits,
including distributions representing the return of Capital Contributions, to
which the transferor would otherwise be entitled with respect to the transferred
Interest or portion thereof.
8.3 Substitute Members.
No transferee of all or part of a Member's Interest shall become a
substitute Member in place of the transferor unless and until:
(a) the transferee has executed an instrument accepting and adopting the
terms and provisions of the Articles and this Agreement;
(b) the transferee has caused to be paid all reasonable expenses of the
Company in connection with the admission of the transferee as a substitute
Member; and
(c) each non-transferring Member shall have consented in writing to such
transferee becoming a substitute Member.
Upon satisfaction of all the foregoing conditions with respect to a
particular transferee, the books and records of the Company shall be amended to
reflect the admission of the transferee as a substitute Member to the extent of
the Interest or portion thereof held by the transferee.
8.4 Effect of Admission as a Substitute Member.
A transferee who has become a substitute Member has, to the extent of the
Interest transferred to such substitute Member, all the rights, powers and
benefits and is subject to the restrictions and liabilities of a Member under
the Articles, this Agreement and the Act. Upon admission of a transferee as a
substitute Member, the transferor of the Interest so acquired by the substitute
Member shall cease to be a Member of the Company to the extent of such
transferred interest. In the event that Monsanto transfers its Interest to any
Affiliate of Monsanto, Monsanto shall agree in writing to guarantee the
performance of such Affiliate's obligations under this Agreement or agreements
contemplated by hereby, as if Monsanto were a party to the Agreement or
agreements, which guarantee shall be in substantially the same form as the
addendum to this Agreement executed by Delta and Pine Land Company.
ARTICLE 9
DISSOLUTION AND TERMINATION
9.1 Events Causing Dissolution.
The Company shall be dissolved upon the first to occur of the following
events:
(a) The expiration of the term of the Company, as set forth in the
Articles, namely December 31, 2050;
(b) The written consent of all the Members to dissolve;
(c) The sale or other disposition of substantially all of the assets of the
Company and the receipt and distribution of all the proceeds therefrom;
(d) Upon an Event of Withdrawal of a Member, unless within 90 days after
such event the business of the Company is continued by the consent (which
consent may be unreasonably or arbitrarily withheld) of the remaining Members;
or
(e) Except as otherwise agreed upon in this Agreement, any other event
causing a dissolution of the Company under the provisions of the Act.
9.2 Cash Distributions Upon Dissolution.
Upon the dissolution of the Company as a result of the occurrence of any of
the events set forth in Section 9.1, the Members shall proceed to liquidate the
Company and the Liquidation proceeds shall be applied and distributed in the
following order of priority:
(a) First, to the payment of debts and liabilities of the Company in the
order of priority as provided by law (including any loans or advances that may
have been made by any of the Members to the Company) and the expenses of
liquidation.
(b) Second, to the establishment of any reserve which the Members may deem
reasonably necessary for any contingent, conditional or unasserted claims or
obligations of the Company. Such reserve may be paid over by the Members to an
escrow agent to be held for disbursement in payment of any of the aforementioned
liabilities and, at the expiration of such period as shall be deemed advisable
by the Members, for distribution of the balance, in the manner hereinafter
provided in this Article 9.
(c) Third, to the Members as provided in the Schedules approved by the
Members and relating to the distributions with respect to individual countries,
as may be more specifically provided therein.
(d) Finally, the remaining balance of the Liquidation Proceeds, if any , to
the Members, pro rata in proportion to their respective Percentage Interests.
9.3 In-Kind.
Notwithstanding the foregoing, if, in the event of the dissolution of the
Company, the Members shall determine that an immediate sale of part or all of
the assets of the Company would cause undue loss to the Members or determine
that it would be in the best interest of the Members to distribute the assets of
the Company to the Members in kind (which distributions do not, as to the in
kind portions have to be in the same proportions as would be if cash were
distributed, but all such in-kind distributions shall be equalized, to the
extent necessary, with cash), then the Members may either defer liquidation of,
and withhold from distribution for a reasonable time, any assets of the Company
except that necessary to satisfy the Company's debts and obligations, or
distribute the assets of the Company to the Members in-kind.
9.4 Notices to Secretary of State.
(a) As soon as possible, following the occurrence of the events specified
in Section 9.1 above, the Company shall file a notice of winding-up with the
Secretary of State of Missouri which discloses the dissolution of the Company
and the commencement of winding-up of its business and affairs.
(b) When all of the remaining property and assets of the Company have been
distributed, the Articles shall be cancelled by filing articles of termination
with the Secretary of State of Missouri.
9.5 Cross Purchase Agreement.
(a) Any Member (hereinafter called "Offeror") may serve upon the other
Member (hereinafter called "Offeree") a notice (hereinafter called the "Offering
Notice") which shall contain the following terms:
(i) A statement of intent to rely on this Section 9.5; and
(ii) Te dollar amount (hereinafter called "Specified Dollar Amount")
which the Offeror would be willing to pay to the Company for all of the
assets of the Company.
(b) The Offeree shall either:
(i) Elect to cause the Company to redeem the Offeree's Interest for an
amount equal to the amount the Offeree would receive if the assets of the
Company were sold for the Specified Dollar Amount and the proceeds
distributed pursuant to Section 9.2; or
(ii) Elect to cause the Company to redeem the Offeror's Interest for
an amount equal to the amount the Offeror would receive if the assets of
the Company were sold for the Specified Dollar Amount and the proceeds
distributed pursuant to Section 9.2. The Offeree shall have thirty (30)
days from the date the Offering Notice is given to exercise either of its
options hereunder by written notice given to the Offeror. If the Offeree
does not so exercise one of its options within said thirty (30) days, then
the Offeree shall be conclusively presumed to have elected to cause its
Interest to be redeemed by the Company for an amount equal to the amount
the Offeree would receive if the assets of the Company were sold for the
Specified Dollar Amount and the proceeds distributed pursuant to Section
9.2.
(c) Payment for the Interest purchased by a Member pursuant to Subsection
(b) above shall be made by bank cashier's or certified check delivered at a
closing to be held at 10 o'clock a.m. (local time) at the principal office of
the Company on such date (the "Closing Date"), within thirty (30) days (the
"Translation Period") after the purchasing Member (the "Purchaser") shall have
elected or been deemed to have elected to purchase (the "Purchase Date") the
entire Interest of the selling Member, as a Purchaser shall designate upon ten
(10) business days' prior Notice. In addition to the purchase price as set forth
in Subsection (b) above, the Purchaser shall also pay to the selling Member
interest on the purchase price set forth in Subsection (b) above at the Prime
Rate from the Purchase Date until the Closing Date. Unless the Purchaser shall
default in the timely and proper payment of the purchase price to the selling
Member, the selling Member shall have no interest or equity in the profits or
losses or cash distributions, if any, of the Company from the Purchase Date
until the Closing Date, and such selling Member shall be entitled to receive on
the Closing Date the purchase price for its Interest, determined as aforesaid,
plus interest thereon as provided above.
(d) At the closing on the Closing Date, the selling Member, in exchange for
the purchase price and interest thereon, if any, shall deliver documents
conveying its Interest (effective as of the Purchase Date) to the Purchaser free
and clear of any liens or encumbrances. The Purchasers shall, on or before the
Closing Date, cause all relevant bank or other financial organizations to fully
release the selling Member from liability under any and all guarantees made by
the selling Member for the repayment of the principal amount of, and any
interest accrued on, any and all loans made to the Company by such banks or
other financial organizations. In addition, it shall be the individual
obligation of the Purchaser to provide the Company with sufficient funds to
redeem the selling Member's Interest and allow the Company to repay any loans
made by selling Member to the Company.
(e) During the Transition Period, the Purchaser (notwithstanding anything
else to the contrary contained in this Agreement) shall have the right to make
all decisions relating to the Company and its subsidiaries, including the
Egyptian Business.
(f) In the event that on the Closing Date the Purchaser fails to cause the
Company to redeem the selling Member's Interest, fails to cause the Company to
repay any loans made by the selling Member to the Company or fails to procure
the releases from third parties described in subparagraph (d) above, that Member
shall be prohibited from serving an Offering Notice on the other Member for a
period of twelve (12) months after the Closing Date. In addition, in the event
of such a default by the Purchaser, the selling Member shall have the option to
cause the Company to redeem the Purchaser's Interest for an amount equal to
seventy-five percent (75 %) of the amount the Purchaser would receive if the
assets of the Company were sold for the previously established Specified Dollar
Amount and the proceeds distributed pursuant to Section 9.2. Such option must be
exercised by Notice to the Purchaser within thirty (30) days after the Closing
Date. The closing of such redemption shall take place as otherwise provided in
this Section 9.5, with the selling Member being treated as the Purchaser and the
date of the selling Member's Notice to the Purchaser being deemed the Purchase
Date. Failure of a Member to comply with the provisions of this Section 9.5
shall, in addition to the remedies provided in this subparagraph (f) and any
other rights and remedies available to the other Member, entitle such other
Member to treat the aforementioned failure, as a material breach of this
Agreement or to obtain appropriate legal and equitable relief including specific
performance, without notice or bond.
(g) The purchase price shall be deemed a payment with respect to the
Company property tinder Section 736(b) of the Code to the extent of the selling
Member's Capital Account balance and the remainder shall be deemed a
distributive share under Section 736(a) of the Code.
ARTICLE 10
ACCOUNTING AND BANK ACCOUNTS
10.1 Fiscal Year and Accounting Method.
The fiscal year of the Company shall be the Fiscal Year, provided that the
Company's first fiscal year shall begin on the date at formation of the Company
and shall end on August 31, 1995. The taxable year of the Company shall be as
designated by the Members in accordance with the Code. The Members shall also
determine the accounting method to be, used by the Company.
10.2 Books and Records.
(a) The books and records of the Company shall be maintained at its
principal place of business.
(b) The Company shall keep the following books and records:
(i) A current and past list, setting forth in alphabetical order the
full name and last known mailing address of each Member; to the extent
provided by the Act, these Lists shall be provided to the Secretary of
State of the State of Missouri, without cost, upon his or her written
request;
(ii) A copy of the Articles and amendments thereto together with
executed copies of any powers of attorney pursuant to which any Articles
have been executed;
(iii) Copies of the Company's federal, state and local income tax
returns and reports, if any, for the three most recent years or, if such
returns and reports were not prepared for any reason, copies of the
information and records provided to, or which should have been provided to,
the Members to enable them to prepare their federal, state and local tax
returns for such period;
(iv) Copies of this Agreement, and all amendments thereto, and copies
of any written operating agreements no longer in effect;
(v) Copies of all financial statements of the Company for the three
most recent years;
(vi) Copies of any written promise by a Member to make a contribution
to the Company;
(vii) Copies of any written consents by the Members to the admission
of any person as a Member of the Company;
(viii) Copies of any written consents by the Members to continue the
Company upon an Event of Withdrawal of any Member; and
(ix) Copies of any other instruments or documents, reflecting matters
required to be in writing pursuant to this Agreement.
(c) Each Member (or such Member's designated representative) shall have the
fight during ordinary business hours and upon reasonable Notice to inspect and
copy (at such Member's own expense) the books and records of the Company
required to be kept pursuant to Section 10.2(b) hereof.
10.3 Books and Financial Reports.
(a) Proper and complete records and books of account shall be kept by the
Company and each of the subsidiaries of the Company in which shall be entered
all transactions and other matters relative to the Company or subsidiary
business, respectively. The books and records of the Company and each of its
subsidiaries shall be prepared in accordance with generally accepted accounting
principles, consistently applied (subject to such requirements of foreign
jurisdictions as may be applicable to any subsidiary).
(b) As soon as reasonably practicable after the end of each fiscal quarter
and year, the Company shall have prepared, at the Company's expense, and the
Company shall cause each subsidiary to prepare at such subsidiary's expense,
financial statements (balance sheet, statement of income or loss, Members'
equity, and statement of cash flows) prepared in accordance with generally
accepted accounting principles, which financial -end f statements shall be
audited by the Company's auditors if they are Fiscal Year-end financial
statements. Copies of such quarterly statements and reports, both with respect
to the Company and its subsidiaries, shall be distributed to the Members within
60 days after the close of each fiscal quarter and copies of such annual
statements and reports shall be distributed to the Members within 120 days after
the close of each Fiscal Year of the Company or subsidiary, as applicable, or as
soon thereafter as possible. Each Member shall be granted full access to the
books and records of the Company and its subsidiaries and have the right upon
reasonable request to conduct, at the Member's expense, audits of their books
and records.
10.4 Tax Returns and Elections.
(a) The Company shall cause to be prepared and timely filed all federal,
state and local income tax returns or other returns or statements required by
applicable law with respect to the Company and each of its subsidiaries. The
Company shall claim all deductions and make such elections for federal or state
income tax purposes which the Managing Member reasonably believes will minimize
the taxable income allocable to the Members;
(b) As soon as reasonably practicable after the end of each Fiscal Year of
the Company, the Company shall cause to be prepared and delivered to each Member
all information with respect to the Company necessary for the Member's federal
and state income tax returns.
10.5 Bank Accounts.
All funds of the Company shall be deposited in a separate bank, money
market or similar account(s) approved by the Managing Member and in the
Company's name. Withdrawals therefrom shall be made only by persons authorized
to do so by the Managing Member.
ARTICLE 11
MISCELLANEOUS
11.1 Title to Assets.
Title to the assets of the Company shall be held in the name of the
Company. No Member shall individually have any ownership interest or rights in
the assets of the Company, except indirectly by virtue of such Member's
ownership of an Interest. No Member shall have any right to seek or obtain a
partition of any of the assets of the Company, nor except as otherwise provided
in this Agreement or in the Schedules related to a particular country, shall any
Member have the right to any specific assets of the Company upon the liquidation
of, or any distribution from, the Company.
11.2 Waiver of Default.
No consent or waiver, express or implied, by the Company or a Member with
respect to any breach or default by another Member hereunder shall be deemed or
construed to be a consent or waiver with respect to any other breach or default
by such Member of the same provision or any other provision of this Agreement.
Failure on the part of the Company or a Member to complain of any act or failure
to act of another Member or to declare such other Member in default shall not be
deemed or constitute a waiver by the Company or the Member of any fights
hereunder.
11.3 Amendment.
Except as otherwise expressly provided elsewhere in this Agreement, this
Agreement shall not be altered, modified or changed except by an amendment
approved by all of the Members.
11.4 No Third Party Rights.
None of the provisions contained in this Agreement shall be for the benefit
of or enforceable by any third parties, including creditors of the Company. The
parties to this Agreement expressly retain any and all fights to amend this
Agreement as herein provided, notwithstanding any interest in the Agreement or
in any party to this Agreement, held by any other Person.
11.5 Severability.
The validity of any provision of this Agreement shall not affect the
validity of any other provision of this Agreement, provided, however, in the
event that a provision hereof is determined to be unenforceable or illegal under
applicable laws and a Member reasonably believes that the absence of such
provision causes a material adverse change in either the risks or benefits of
this Agreement to the Member, the Member may terminate this Agreement without
liability upon ninety (90) days written notice, provided that the Members agree
to negotiate, prior to the effective date of such termination, in good faith
concerning a commercially reasonable substitute or replacement for the
unenforceable or illegal provision(s) which is valid and legal and, to the
maximum extentpossible, carries out the original intent of the parties as to the
point or points in question.
11.6 Nature of Interest in the Company.
A Member's Interest shall be personal property for all purposes.
11.7 Binding Agreement.
Subject to the restrictions on the disposition of Interests herein
contained, the provisions of this Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.
11.8 Headings.
The headings of the Articles and sections of this Agreement are for
convenience only and shall not be considered in construing or interpreting any
of the terms or provisions hereof.
11.9 Word Meanings.
The words such as "herein," "hereinafter," "hereof," and "hereunder" refer
to this Agreement as a whole and not merely to a subdivision in which such words
appear unless the context otherwise requires. The singular shall include the
plural and the masculine gender shall include the feminine and neuter, and vice
versa, unless the context otherwise requires.
11.10 Counterparts.
This Agreement may be executed in several counterparts, all of which
together shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties have not signed the same counterpart.
11.11 Entire Agreement.
This Agreement contains the entire agreement between the parties and
supersedes all prior writings or agreements with respect to the subject matter
hereof.
11.12 Partition.
The Members agree that the assets of the Company are not and will not be
suitable for partition. Accordingly, each of the Members hereby irrevocably
waives any and all right it may have to maintain any action for partition of any
Of the assets of the Company.
11.13 Exclusive Jurisdiction and Consent to Service of Process.
The parties agree that any legal action, suit or proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby shall be
instituted in a Federal court located in the Eastern District of Missouri or a
state court located in the County of St. Louis, Missouri, which shall be the
exclusive jurisdiction and venue of said legal proceedings, and each party
hereto waives any objection which such party may now or hereafter have to the
laying of venue of any such action, suit or proceeding, and irrevocably submits
to the jurisdiction of any such court in any such action, suit or proceeding.
Any and all service of process and any other notice in any such action, suit or
proceeding shall be effective against such party upon Notice to such party
thereof. Nothing contained herein shall be deemed to affect the right of any
party hereto to serve process in any manner permitted by law. Notwithstanding
the foregoing, if a dispute, controversy or claim arises out of or in connection
with this Agreement, prior to bringing any legal action, suit or proceeding
against the other Member, a Member shall attempt in the first instance to
resolve such dispute through friendly consultations.
11.14 Non Disclosure.
Each Member for itself and on behalf of its Affiliates agrees to keep the
provisions of this Agreement and all exhibits hereto in confidence except
pursuant to the requirements of appropriate law and shall not publish or
otherwise disclose the same at any time without the prior written consent of all
of the Members.
11.15 Governing Law.
This Agreement shall be construed according to and governed by the laws of
the State of Missouri.
11.16 Conflict with License Agreement.
With respect to Egypt only, this Agreement supersedes Section 3.10 of the
License Agreement between Monsanto and Delta and Pine Land Company dated March
16, 1992, as amended by Section 5 of the Modification Agreement dated October
11, 1993. Except with respect to Egypt, in the event of a conflict between any
provision of this Agreement and any provision of said License Agreement, as
amended by said Modification Agreement, the License Agreement, as amended, shall
control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
MEMBERS
MONSANTO COMPANY
By: _________________________
Hendrik A. Verfaillie
Vice President
D&PL TECHNOLOGY CORP.
By: _________________________
Murray Robinson
President
<PAGE>
For the following specified purposes only and not as a signatory or party
to the foregoing Agreement, Delta and Pine Land Company ("Delta and Pine Land"),
a Delaware corporation and the owner of all the issued and outstanding capital
stock of D&PL Sub, have signed below on March , 1995.
1. Delta and Pine Land hereby acknowledges and agrees to the provisions of
Article 8 of the foregoing Agreement restricting the transfer of the capital
stock of D&PL Sub.
2. Delta and Pine Land hereby agrees to guarantee the performance of D&PL
Sub's obligations under the foregoing Agreement and agreements contemplated
hereby, as if Delta and Pine Land were a party to said Agreement or agreements.
The provisions of this paragraph 2 shall bind Delta and Pine Land and its
successors and assigns and shall benefit and be enforceable by Monsanto and its
successors and assigns. No delegation or assignment of the provisions of this
paragraph 2 shall be of any force or effect or release Delta and Pine Land from
its obligations hereunder.
3. The provisions of paragraph 2 hereof are for the exclusive benefit of
Monsanto and may not be relied upon or enforced by any other party except the
permitted successors and assigns of Monsanto, and Delta and Pine Land has agreed
to such provisions in reliance upon the foregoing and the provisions of Section
347.099(3) of the Act.
DELTA AND PINE LAND COMPANY
By: /s/ Murray Robinson
-----------------------
Murray Robinson
President
<PAGE>
SCHEDULE A - ANNUAL BUSINESS PLAN
A. The Annual Business Plan shall set forth, for the next Fiscal Year, the
following:
(i) a detailed annual operating budget by month with revenue and-expense
categories;
(ii) projected monthly balance sheets;
(iii) projected monthly cash flow statements;
(iv) a capital expenditure budget including a description of all capital
expenditures along with supplier or vendor information and the
calculation of the internal rate of return on each proposed purchase
in excess of Two Thousand, Five Hundred U.S. Dollars (U.S. $2,500);
(v) plans and projections of the volumes by variety of non-B.t. cotton
seed which are to be received, delinted, conditioned, treated and
delivered back for distribution;
(vi) establishing the price for service outlined in (v) above;
(vii) plans and projections of the volumes by variety of B.t.cotton seed
which are to be purchased, delinted, conditioned, treated and sold to
distributors;
(viii) plans for marketing and sale of B.t. cotton planting seed including
pricing and market projections;
(ix) plans for agreements with ginners and distributors, if any;
(x) working capital requirements of the Company; and
(xi) a detailed description of such other information, plans,-contracts,
agreements or other matters that are reasonable necessary to enable
the Members to make an 'informed decision with respect to their
approval of such Annual Business Plan.
B. The Annual Business Plan shall also include for the next two (2) succeeding
Fiscal Years the following:
(i) A narrative description of any major actions proposed to be undertaken
by the Company;
(ii) a projected annual income statement for each of said two (2) Fiscal
Years;
(iii)a projected balance sheet as of the end of each of said two (2)
Fiscal Years;
(iv) a schedule of projected cash flows for each of said two (2) Fiscal
Years; and
(v) a projected annual capital budget for each of said two (2) Fiscal
Years.
C. The Annual Business Plan shall set forth any information or calculations
required to be set forth under the Cooperation Agreement with respect to
the Egyptian Business or schedules pertaining to a particular country, such
as:
(i) elements used in determining the incremental expenses or cost savings
in operating non-product costs and overhead expenses directly
attributable to sales, distribution, financing and administration of
B.t. seed versus non-B.t. seed; and
(ii) rate for compounding a prior price of seed of a non-B.t. variety no
longer sold commercially to establish a price at which seed of such
variety currently would have been sold.
<PAGE>
SCHEDULE B - TAXES
1. Definitions.
"Capital Account" means a separate account established by the Company and
maintained for each Member in accordance with this Schedule B. Such account
shall include all amounts from the separate sub account contained in Schedule
Egypt-3 - Taxes and any separate sub accounts contained in schedules with
respect to any other countries.
"Code" means the Internal Revenue Code of 1986, as amended.
"Member's Share of Company Minimum Gain" means an amount determined (i) in
accordance with rules applicable to partnerships in Treasury Regulation Section
1.704-2(g) with respect to a nonrecourse liability of the Company in which no
Member bears the economic risk of loss and (ii) in accordance with rules
applicable to partnerships in Treasury Regulation Section 1.704-2(i) with
respect to a nonrecourse liability of the Company in which any Member bears any
portion of the economic risk of loss.
"Minimum Gain" means the amount of gain, if any, as set forth in rules
applicable to partnerships in Treasury Regulations Section 1.704-2(d) that would
be by the Company if it disposed of (in a taxable transaction) property subject
to a nonrecourse liability of such Company, in full satisfaction of such
liability (and for no other consideration).
"Profits and Losses For Tax Purposes" means, for accounting and tax
purposes, the various items with respect to partnerships set forth in Section
702(a) of the Code and all applicable regulations, or any successor law, and
shall include, but not be limited to, items such as capital gain or loss, tax
preferences, credits, depreciation, other deductions and depreciation recapture.
"Treasury Regulations" means the regulations promulgated by the Treasury
Department with respect to the Code, as such regulations are amended from time
to time, or corresponding provisions of future regulations.
2. Maintenance of Capital Accounts.
The Company shall maintain for each Member a separate account ('Capital
Account") in accordance with the rules applicable to partnerships in Treasury
Regulation 1.704-1(b)(2)(iv) or any successor Treasury Regulations which by the
ten-ns would be applicable to the Company. No Member shall be entitled to
receive or be credited with any interest on the balance of such Member's Capital
Account at any time.
3. Allocation of Profits and Losses For Tax Purposes.
Except as otherwise provided in Section 4 of this Schedule B, all Profits
and Losses for Tax Purposes of the Company, other than the allocation of Profits
and Losses for a particular country, shall be allocated among the Members in
accordance with their respective Percentage Interests.
4. Special Allocations.
(a) Notwithstanding any other provisions of this Agreement to the contrary,
other than the allocation of Profits and Losses for a particular country, if the
amount of any Minimum Gain at the end of any taxable year is less than the
amount of such Minimum Gain at the beginning of such taxable year, there shall
be allocated to each Member gross income or gain (in respect of the current
taxable year and any future taxable year) in an amount equal to such Member's
share of the net decrease in Minimum Gain during such year in accordance with
Treasury Regulation Section 1.704-2(o. Such allocation of gross income and gain
shall be made prior to any other allocation of income, gain, loss, deduction or
Section 705(a)(2)(B) expenditure for such year. Any such allocation of gross
income or gain pursuant to this Section shall be taken into account, to the
extent feasible, in computing subsequent allocations of income, gain, loss,
deduction or credit of the Company so that the net amount of all items allocated
to each Member pursuant to this paragraph shall, to the extent possible, be
equal to the net amount that would have been allocated to each such Member
pursuant to the provisions of this paragraph if the allocations made pursuant to
the first sentence of this paragraph had not occurred. This provision is
intended to be a minimum gain chargeback as described in Treasury Regulation
Section 1.704-2(f) and shall be interpreted consistent therewith.
(b) Notwithstanding any other provisions of this Agreement to the contrary,
other than the allocation of Profits and Losses for a particular country, and
except as provided in Section 4(a) of this Schedule B, if there is a net
decrease (as determined in accordance with Treasury Regulation Section
1.704-2(i)(3)) during a taxable year in Minimum Gain attributable to a
non-recourse debt of the Company for which any Member bears the economic risk of
loss (as determined accordance with Treasury Regulation Section 1.704-2(b)(4)),
then any Member with a share of the Minimum Gain (as deter-mined in accordance
with Treasury Regulation Section 1.704-2(i)(5)) attributable to such-debt,
(deter-mined at the beginning of such taxable year) shall be allocated in
accordance-with Treasury Regulation Section 1.704-2(i)(4) items of Company
income and gain for such taxable year (and, if necessary, for subsequent years)
in an amount equal to such Member's share of the net decrease in the Minimum
Gain attributable to such Member in accordance with Treasury Regulation Section
1.704-2(i). Any allocations of items of gross income or gain pursuant to this
paragraph shall not duplicate any allocations of gross income or gain pursuant
to Section 4(a) of this Schedule B and shall be taken into account, to the
extent feasible, in computing subsequent allocations of the Company, so that the
net amount of all items allocated to each Member pursuant to this paragraph
shall, to the extent possible, be equal to the net amount that would have been
allocated to each Member pursuant to the provisions of this paragraph if the
allocations made pursuant to the first sentence of this paragraph had not
occurred. This provision is intended to be a partner minimum gain chargeback as
described in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted
consistent therewith.
(c) Notwithstanding any other provisions of this Agreement to the contrary,
other than the allocation of Profits and Losses for a particular country, and
except as provided in Sections 4(a) and 4(b) of this Schedule B, if any Member
unexpectedly receives any adjustments, allocations or distributions described in
Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that reduces any
Member's Capital Account below zero or increases the negative balance in such
Member's Capital Account (taking into account such Member's deficit restoration
obligation), gross income and gain shall be allocated to such Member in an
amount and manner sufficient to eliminate any negative balance in such Member's
Capital Account (taking into account such Member's deficit restoration
obligation) created by such adjustments, allocations or distributions as quickly
as possible in accordance with Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
Any such allocation of gross income or gain pursuant to this paragraph shall be
in proportion with such negative Capital Accounts of the Members. Any
allocations of items of gross income or gain pursuant to this paragraph shall
not duplicate any allocations of gross income or gain made pursuant to Section
4(a) or 4(b) of this Schedule B and shall be taken into account, to the extent
feasible, in computing subsequent allocations of income, gain, loss, deduction
or credit, so that the net amount of all items allocated to each Member pursuant
to this paragraph shall, to the extent possible, be equal to the net amount that
would have been allocated to each such Member pursuant to the provisions of this
paragraph if such adjustments, allocations or distributions had not occurred.
This provision is intended to be a qualified income offset as described in
Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistent therewith.
(d) Any item of Company loss, deduction or Section 705(a)(2)(B) expenditure
that is attributable to a non-recourse debt of the Company for which any Member
bears the economic risk of loss (as determined in accordance with rules
applicable to partnerships in Treasury Regulation Section 1.704-2(b)(4)) shall
be allocated to such Member in accordance with Treasury Regulation Section
1.704-2(i).
(e) In accordance with Section 704(c) and the Regulations thereunder, if
property is contributed to the Company and the fair market value of such
property on the date of its contribution differs from the adjusted tax basis of
such property, any income, gain, loss and deduction with respect to such
property shall, solely for tax purposes, be allocated among the Members so as to
take into account any variation between the adjusted tax basis to the Company of
such property for federal income tax purposes and the fair market value of such
property on the date of contribution to the Company. Such allocations shall be
made using a reasonable method that is consistent with the purpose of -Section
704(c) of the Code pursuant to Treasury Regulation Section 1.704-3.
5. Persons Entitled to Allocations.
With respect to any period in which a transferee of the interest of a
Member is fast entitled to a share of the Profits And Losses For Tax Purposes,
the Company shall, with respect to such Profits And Losses For Tax Purposes,
allocate such items among the Persons who were entitled to such items on a basis
consistent with the provisions of the Code and the Treasury Regulations.
6. Tax Matter Member.
Until otherwise determined by the Members, the Managing Member is hereby
designated as the Company's "Tax Matters Member," which shall have the same
meaning as "tax matters partner" under the Code, and in such capacity is hereby
authorized and empowered to act for and represent the Company and each of the
Members before the Internal Revenue Service in any audit or examination of any
Company tax return and before any court and to retain such experts (including,
without limitation, outside counsel or accountants) as deemed necessary.
7. Negative Balance.
No Member with a negative balance in such Member's Capital Account shall
have any obligation to the Company or any other Member to restore said negative
balance to zero.
