-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PR4P+clmaowKBK7LVHNu4Nc8WdC2ZoUnRDYo6xnQzbQJsoTnYoEprdjsWOZsCxX4 LcSKgSJBYNYxEMloelVQDA== 0000950124-96-000457.txt : 19960208 0000950124-96-000457.hdr.sgml : 19960208 ACCESSION NUMBER: 0000950124-96-000457 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 17 FILED AS OF DATE: 19960207 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DEKALB GENETICS CORP CENTRAL INDEX KEY: 0000835015 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 363586793 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-39746 FILM NUMBER: 96512801 BUSINESS ADDRESS: STREET 1: 3100 SYCAMORE RD CITY: DEKALB STATE: IL ZIP: 60115 BUSINESS PHONE: 8157589196 MAIL ADDRESS: STREET 1: 3100 SYCAMORE ROAD CITY: DEKALB STATE: IL ZIP: 60115 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DEKALB GENETICS CORP CENTRAL INDEX KEY: 0000835015 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 363586793 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: 1934 Act SEC FILE NUMBER: 005-39746 FILM NUMBER: 96512802 BUSINESS ADDRESS: STREET 1: 3100 SYCAMORE RD CITY: DEKALB STATE: IL ZIP: 60115 BUSINESS PHONE: 8157589196 MAIL ADDRESS: STREET 1: 3100 SYCAMORE ROAD CITY: DEKALB STATE: IL ZIP: 60115 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MONSANTO CO CENTRAL INDEX KEY: 0000067686 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 430420020 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 800 N LINDBERGH BLVD CITY: ST LOUIS STATE: MO ZIP: 63167 BUSINESS PHONE: 3146941000 FORMER COMPANY: FORMER CONFORMED NAME: MONSANTO CHEMICAL CO DATE OF NAME CHANGE: 19711003 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MONSANTO CO CENTRAL INDEX KEY: 0000067686 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 430420020 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 800 N LINDBERGH BLVD CITY: ST LOUIS STATE: MO ZIP: 63167 BUSINESS PHONE: 3146941000 FORMER COMPANY: FORMER CONFORMED NAME: MONSANTO CHEMICAL CO DATE OF NAME CHANGE: 19711003 SC 14D1 1 SCHEDULE 14D-1 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 ------------------------ DEKALB GENETICS CORPORATION ------------------------ (NAME OF SUBJECT COMPANY) MONSANTO COMPANY ------------------------ (BIDDER) CLASS B COMMON STOCK, WITHOUT PAR VALUE (WITH RESPECT TO THE SCHEDULE 14D-1) ---------------------------------------------------------------------------- CLASS A COMMON STOCK, WITHOUT PAR VALUE (WITH RESPECT TO THE SCHEDULE 13D) ------------------------ (TITLE OF CLASS OF SECURITIES) 244878 20 3 (WITH RESPECT TO THE SCHEDULE 14D-1) ------------------------------------------------ 244878 10 4 (WITH RESPECT TO THE SCHEDULE 13D) ------------------------ (CUSIP NUMBER OF CLASS OF SECURITIES) KARL R. BARNICKOL ASSOCIATE GENERAL COUNSEL AND ASSISTANT SECRETARY MONSANTO COMPANY 800 NORTH LINDBERGH BOULEVARD ST. LOUIS, MISSOURI 63167 TELEPHONE: 314-694-1000 ------------------------ (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER) Copy to: JOHN R. SHORT, ESQ. PEPER, MARTIN, JENSEN, MAICHEL AND HETLAGE 720 OLIVE STREET SUITE 2400 ST. LOUIS, MISSOURI 63101 TELEPHONE: 314-421-3850 ------------------------ CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
TRANSACTION VALUATION* AMOUNT OF FILING FEE - --------------------------------------------------------------------------------------------- $127,800,000 $25,560
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- / / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. AMOUNT PREVIOUSLY PAID: NONE FILING PARTY: N/A FORM OR REGISTRATION NO.: N/A DATE FILED: N/A * Note: For purposes of calculating the amount of the filing fee only, the Transaction Valuation assumes purchase of 1,800,000 shares of the Class B Common Stock at the offer price of $71.00 per share. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 Cusip Nos. 244878 10 4 (for the Class A Common Stock) 244878 20 3 (for the Class B Common Stock) - -------------------------------------------------------------------------------- 1 Name of Reporting Person S.S. or I.R.S. Identification No. of above Person Monsanto Company - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions) (a)/ / (b)/ / - -------------------------------------------------------------------------------- 3 SEC Use Only - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) / / - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Aggregate Amount Beneficially Owned by Each Reporting Person 84,717* - -------------------------------------------------------------------------------- 8 Check if the Aggregate Amount in Row (7) Excludes Certain Shares (See Instructions) / / - -------------------------------------------------------------------------------- 9 Percent of Class Represented by Amount in Row (7) 10%* - -------------------------------------------------------------------------------- 10 Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- * The Investment Agreement dated as of January 31, 1996 between Monsanto Company (the "Purchaser") and DEKALB Genetics Corporation (the "Company"), described in the Offer to Purchase dated February 7, 1996 (the "Offer to Purchase"), provides for the purchase by the Purchaser of newly issued shares of Class A Common Stock ("Class A Stock") of the Company representing 10% of the outstanding shares of Class A Stock after expiration of the tender offer (the "Offer") described in the Offer to Purchase and after giving effect to the issuance of such shares. The Class A Stock is convertible into Class B Common Stock ("Class B Stock") of the Company, and holders of Class A Stock may convert shares of Class A Stock into Class B Stock in order to participate in the Offer for Class B Stock. The number of shares of Class A Stock set forth in Item 7 is based upon the number of shares of Class A Stock outstanding on January 31, 1996. 2 3 This Tender Offer Statement on Schedule 14D-1 (this Statement") relates to the offer by Monsanto Company, a Delaware corporation ("Purchaser"), to purchase up to 1,800,000 shares of the outstanding shares of the Class B Common Stock, without par value ("Shares" or "Class B Stock"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), at a price of $71.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in Purchaser's Offer to Purchase dated February 7, 1996 (the "Offer to Purchase") and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") and the Investment Agreement dated as of January 31, 1996 between the Purchaser and the Company, copies of which are attached hereto as Exhibits (a)(1), (a)(2) and (c)(1), respectively. ITEM 1. SECURITY AND SUBJECT COMPANY. (a) The name of the subject company is DEKALB Genetics Corporation, a Delaware corporation, which has its principal executive offices at 3100 Sycamore Road, Dekalb, Illinois 60115. (b) The class of equity securities being sought is up to one million eight hundred thousand (1,800,000) of the outstanding Shares, of the Company. The information concerning the Shares outstanding and the consideration being offered for the Shares set forth under "INTRODUCTION" and "Section 1. Terms of the Offer" in the Offer to Purchase is incorporated herein by reference. (c) The information concerning the principal market in which the Shares are traded and certain high and low sales prices for the Shares in such principal market as set forth in the "Section 6. Price Range of Shares; Dividends" in the Offer to Purchase is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a)-(d) and (g) This Statement is filed by Purchaser, a Delaware corporation. Information concerning the principal business and address of the principal office of Purchaser, and concerning the name, business address, present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment or occupation is conducted, material occupations, positions, offices or employments during the last five years and citizenship of each of the executive officers and directors of Purchaser are set forth under "INTRODUCTION", "Section 9. Certain Information Concerning Purchaser" and Schedule A in the Offer to Purchase and are incorporated herein by reference. (e) and (f) During the last five years, neither Purchaser, nor, to the best knowledge of Purchaser, any of the persons listed in Schedule A of the Offer to Purchase has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. (a) The information set forth under "Section 9. Certain Information Concerning the Purchaser", "Section 10. Background of the Offer; Contacts with the Company; Recommendation of the Company's Board", and "Section 11. Purpose of the Offer; the Investment Agreement; the Stockholders' Agreement; the Ancillary Agreements" in the Offer to Purchase is incorporated herein by reference. (b) The information set forth under "INTRODUCTION", "Section 9. Certain Information Concerning the Purchaser", "Section 10. Background of the Offer; Contacts with the Company; Recommendation of the Company's Board", and "Section 11. Purpose of the Offer; the Investment Agreement; the Stockholders' Agreement; the Ancillary Agreements" in the Offer to Purchase is incorporated herein by reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) The information set forth under "Section 12. Source and Amount of Funds" in the Offer to Purchase is incorporated herein by reference. 3 4 (b) and (c) Not applicable. ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (a)-(e) The information set forth under "INTRODUCTION", "Section 10. Background of the Offer, Contacts with the Company; Recommendation of the Company's Board", "Section 11. Purpose of the Offer; the Investment Agreement; the Stockholders' Agreement; the Ancillary Agreements" and "Section 12. Source and Amount of Funds" in the Offer to Purchase is incorporated herein by reference. (f) and (g) The information set forth under "Section 7. Effect of the Offer on Market for the Shares and Exchange Act Registration" in the Offer to Purchase is incorporated herein by reference. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) and (b) The information set forth under "INTRODUCTION", "Section 9. Certain Information Concerning Purchaser" and "Section 11. Purpose of the Offer; the Investment Agreement; the Stockholders' Agreement; the Ancillary Agreements" in the Offer to Purchase is incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. The information set forth under "INTRODUCTION", "Section 9. Certain Information Concerning the Purchaser", "Section 10. Background of the Offer; Contacts with the Company; Recommendation of the Company's Board", and "Section 11. Purpose of the Offer; the Investment Agreement; the Stockholders' Agreement; the Ancillary Agreements" in the Offer to Purchase is incorporated herein by reference. ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth under "INTRODUCTION" and "Section 15. Fees and Expenses" in the Offer to Purchase is incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. The information set forth under "Section 9. Certain Information Concerning Purchaser" in the Offer to Purchase is incorporated herein by reference. Reference is hereby also made to the audited financial statements in the Purchaser's Annual Report on Form 10-K for the year ended December 31, 1994, and the unaudited financial statements in the Purchaser's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995, each of which Reports is incorporated herein by reference. ITEM 10. ADDITIONAL INFORMATION. (a) The information set forth under "INTRODUCTION"; "Section 10. Background of the Offer; Contacts with the Company; Recommendations of the Company's Board"; and "Section 11. Purpose of the Offer; the Investment Agreement; the Stockholders' Agreement; the Ancillary Agreements" in the Offer to Purchase is incorporated herein by reference. (b) and (c) The information set forth under "Section 14. Certain Legal Matters" in the Offer to Purchase is incorporated herein by reference. (d) The information set forth under "Section 7. Effect of the Offer on the Market for the Shares and Exchange Act Registration" in the Offer to Purchase is incorporated herein by reference. (e) None. (f) The information set forth in the Offer to Purchase and the Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), and the information set forth in the Investment Agreement and the Stockholders' Agreement, copies of which are attached hereto as Exhibits (c)(1) and (c)(2) is incorporated herein by reference. 4 5 ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Offer to Purchase dated February 7, 1996. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees. (a)(5) Letter from Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees to Clients. (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Summary Advertisement as published in The Wall Street Journal on February 7, 1996. (a)(8) Text of Press Release dated February 1, 1996 issued by the Company. (a)(9) Notice to Holders of Class A Common Stock of DEKALB Genetics Corporation. (b) None (c)(1) Investment Agreement dated January 31, 1996 between the Company and the Purchaser. (c)(2) Stockholders' Agreement dated January 31, 1996 between the Purchaser and certain holders of the Class A Common Stock of the Company. (c)(3) Registration Rights Agreement dated January 31, 1996 between the Company and the Purchaser. (c)(4) Collaboration Agreement dated January 31, 1996 between the Company and the Purchaser.* (c)(5) Corn Borer-Protected Corn License Agreement dated January 31, 1996 between the Company and the Purchaser.* (c)(6) Glyphosate-Protected Corn License Agreement dated January 31, 1996 between the Company and the Purchaser.* (c)(7) CaMV Promoter License Agreement dated January 31, 1996 between the Company and the Purchaser.* (d) None. (e) Not applicable. (f) None. - ------------------------- * Agreement subject to a request for confidential treatment. 5 6 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: February 7, 1996 MONSANTO COMPANY By: /S/ KARL R. BARNICKOL ------------------------------------ Name: Karl R. Barnickol Title: Associate General Counsel and Assistant Secretary 6 7 EXHIBIT LIST
PAGE EXHIBIT NO. NUMBER - ----------- ------ (a)(1) Offer to Purchase dated February 7, 1996. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees. (a)(5) Letter from Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees to Clients. (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Summary Advertisement as published in The Wall Street Journal on February 7, 1996. (a)(8) Text of Press Release dated February 1, 1996 issued by the Company. (a)(9) Notice to Holders of Class A Common Stock of DEKALB Genetics Corporation. (c)(1) Investment Agreement dated January 31, 1996 between the Company and the Purchaser. (c)(2) Stockholders' Agreement dated January 31, 1996 between the Purchaser and certain holders of the Class A Common Stock of the Company. (c)(3) Registration Rights Agreement dated January 31, 1996 between the Company and the Purchaser. (c)(4) Collaboration Agreement dated January 31, 1996 between the Company and the Purchaser.* (c)(5) Corn Borer-Protected Corn License Agreement dated January 31, 1996 between the Company and the Purchaser.* (c)(6) Glyphosate-Protected Corn License Agreement dated January 31, 1996 between the Company and the Purchaser.* (c)(7) CaMV Promoter License Agreement dated January 31, 1996 between the Company and the Purchaser.*
- ------------------------- * Agreement subject to a request for confidential treatment. 7 EX-99.A.1 2 OFFER TO PURCHASE 1 OFFER TO PURCHASE FOR CASH UP TO 1,800,000 SHARES OF CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION AT $71.00 NET PER SHARE BY MONSANTO COMPANY - -------------------------------------------------------------------------------- THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MARCH 6, 1996, UNLESS EXTENDED. - -------------------------------------------------------------------------------- THIS OFFER IS BEING MADE PURSUANT TO THE TERMS OF AN INVESTMENT AGREEMENT BETWEEN DEKALB GENETICS CORPORATION (THE "COMPANY") AND MONSANTO COMPANY (THE "PURCHASER"). THE OFFER IS CONDITIONED UPON THE SATISFACTION OR WAIVER OF CERTAIN CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER SET FORTH HEREIN. SEE SECTION 13. THE OFFER IS NOT CONDITIONED UPON THERE BEING TENDERED ANY MINIMUM NUMBER OF SHARES. THE BOARD OF DIRECTORS HAS UNANIMOUSLY (I) APPROVED THE INVESTMENT AGREEMENT AND THE ANCILLARY AGREEMENTS (AS DEFINED IN THE INTRODUCTION HERETO); (II) DETERMINED THAT THE INVESTMENT AGREEMENT, THE ANCILLARY AGREEMENTS AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER, TAKEN TOGETHER, ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS; AND (III) RECOMMENDED THE OFFER TO HOLDERS OF THE COMPANY'S CLASS B STOCK ("SHARES") WHO DESIRE AN OPPORTUNITY TO SELL ALL OR A PORTION OF THEIR SHARES FOR CASH AT THIS TIME. ------------------------- IMPORTANT Any stockholder desiring to tender all or any portion of his Shares should either (1) complete and sign the Letter of Transmittal or a facsimile thereof in accordance with the instructions in the Letter of Transmittal, have such stockholder's signature thereon guaranteed if required by Instruction 1 of the Letter of Transmittal and mail or deliver the Letter of Transmittal or such facsimile with his certificate(s) evidencing Shares and any other required documents to the Depositary, or follow the procedure for book-entry tender of Shares set forth in Section 4, or (2) request his broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such stockholder. Stockholders having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if they desire to tender Shares. A stockholder who desires to tender Shares and whose certificates for such Shares are not immediately available should tender such Shares by following the procedures for guaranteed delivery set forth in Section 4. Questions and requests for assistance may be directed to the Information Agent or to the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. Requests for additional copies of this Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. ------------------------- The Dealer Manager for the Offer is: ROBERTSON, STEPHENS & COMPANY February 7, 1996 2 TABLE OF CONTENTS
PAGE ---- 1. Terms of the Offer................................................................ 3 2. Acceptance for Payment and Payment for Shares..................................... 4 3. Withdrawal Rights................................................................. 5 4. Procedures for Tendering Shares................................................... 6 5. Certain Federal Income Tax Consequences........................................... 8 6. Price Range of Shares; Dividends.................................................. 8 7. Effect of the Offer on Market for the Shares and Exchange Act Registration........ 9 8. Certain Information Concerning the Company........................................ 9 9. Certain Information Concerning the Purchaser...................................... 11 10. Background of the Offer; Contacts with the Company; Recommendation of the Company's Board................................................................. 12 11. Purpose of the Offer; the Investment Agreement; the Stockholders' Agreement; the Ancillary Agreements............................................................ 13 12. Source and Amount of Funds........................................................ 25 13. Certain Conditions of the Offer................................................... 26 14. Certain Legal Matters............................................................. 27 15. Fees and Expenses................................................................. 29 16. Miscellaneous..................................................................... 29 Schedule A.............................................................................. S-1
i 3 To the Holders of Class B Common Stock of DEKALB Genetics Corporation: INTRODUCTION Monsanto Company, a Delaware corporation ("Monsanto" or the "Purchaser"), hereby offers to purchase up to one million eight hundred thousand (1,800,000) of the outstanding shares of Class B Common Stock, without par value (the "Shares" or "Class B Stock"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), at $71.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any and amendments or supplements thereto, collectively constitute the "Offer"). Tendering stockholders will not be obligated to pay brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares by the Purchaser. The Purchaser will pay all charges and expenses of Harris Trust Company of New York (the "Depositary"), Georgeson & Company Inc. (the "Information Agent") and Robertson, Stephens & Company LLC (the "Dealer Manager"). Upon the terms and subject to the conditions of the Offer, the Purchaser will purchase up to 1,800,000 Shares. If more than 1,800,000 Shares are validly tendered prior to the Expiration Date and not properly withdrawn in accordance with Section 3, the Purchaser will, upon the terms and subject to the conditions of the Offer, accept such Shares for payment on a pro rata basis, with adjustments to avoid purchases of fractional Shares, based upon the number of Shares validly tendered prior to the Expiration Date and not properly withdrawn in accordance with Section 3. See Section 1. Shares not accepted will be promptly returned in accordance with the instructions of the stockholder. The Offer is conditioned upon the satisfaction or waiver of certain conditions to the obligations of the Purchaser set forth herein. The Offer is not conditioned upon there being tendered any minimum number of Shares. The Offer is being made pursuant to an Investment dated as of January 31, 1996 (the "Investment Agreement") between the Company and the Purchaser. The Investment Agreement provides that, subject to the satisfaction or waiver of the conditions set forth therein, the Company will issue and sell to the Purchaser, and the Purchaser will purchase from the Company (i) a number of newly issued shares (the "Newly Issued Class A Shares") of Class A Common Stock ("Class A Stock"), at a price per share of $65.00, equal to ten percent of the outstanding shares of Class A Stock immediately after the expiration of the Offer and issuance of the Newly Issued Class A Shares and (ii) 378,000 newly issued shares of Class B Stock (the "Newly Issued Class B Shares" and, together with the Newly Issued Class A Shares, the "Issue Shares"), at a price per share of $65.00. See Section 11. The Newly Issued Class B Shares would constitute approximately 8% of the total issued and outstanding shares of Class B Stock at January 31, 1996 (after giving effect to the issuance of the Newly Issued Class B Shares). In addition, the Newly Issued Class B Shares, together with the maximum number of shares of Class B Stock that may be purchased by the Purchaser in the Offer, would constitute approximately 45% of the total issued and outstanding shares of Class B Stock. The Investment Agreement, among other things: (i) provides the Purchaser with the right, for one year after the closing under the Investment Agreement (the "Closing"), to purchase in the market additional shares of Class B Stock so long as the total Class A Stock and Class B Stock (collectively, "Common Stock") owned by the Purchaser does not exceed 40% of the Common Stock outstanding at such time; (ii) restricts the ability of the Purchaser to transfer securities of the Company; (iii) provides the Company under specified circumstances with a right of first refusal in respect of certain proposed transfers by the Purchaser of securities of the Company; (iv) limits for ten years, subject to certain exceptions, the ability of the Purchaser to acquire additional securities of the Company; (v) requires that the Company provide notice to the Purchaser of certain transactions in order to provide the Purchaser with the opportunity to propose an alternative transaction to the Company; and (vi) prohibits the Purchaser from engaging in specified activities. See Section 11, "Investment Agreement -- Additional Market Purchases of Class B Stock," "-- Equity Purchase Rights," "-- Restrictions on Transfer," "-- Right of First Refusal" and "-- Standstill." 1 4 The Investment Agreement also provides that after the Closing the Purchaser will be entitled to nominate one member to the Company's Board of Directors and that if the Purchaser acquires 20% or more of the outstanding Common Stock pursuant to the Offer and the Investment Agreement, the Purchaser may nominate for election in January 1997 an additional member to the Company's Board. The Company is obligated to support any such nominations made in accordance with the terms of the Investment Agreement. The Investment Agreement further provides that during any period in which the Purchaser is entitled to nominate one or more members to the Company's Board of Directors, the Company will use all reasonable efforts to assure that there be at least three members of its Board of Directors who are independent of the Company, the Purchaser and certain large holders of Class A Stock. See Section 11, "Investment Agreement -- Election of the Purchaser's Directors and Independent Directors." The Company has also agreed to certain amendments to its Bylaws. See Section 11, "Investment Agreement -- Amendment of Bylaws of the Company." The Company has informed the Purchaser that on January 31, 1996 there were 4,433,763 Shares outstanding. Holders of Class A Stock may participate in the Offer by converting Class A Stock to Class B Stock and tendering Class B Stock. Only Class B Stock can be validly tendered. Simultaneously with the execution of the Investment Agreement, the following agreements were executed and delivered by the Company and Monsanto: (i) a Registration Rights Agreement (the "Registration Rights Agreement"), (ii) a Collaboration Agreement and License (the "Collaboration Agreement"), (iii) a Corn Borer-Protected Corn License Agreement (the "Corn Borer-Protected Corn License Agreement"), (iv) a Glyphosate-Protected Corn License Agreement (the "Glyphosate-Protected Corn License Agreement") and (v) a CaMV Promoter License Agreement (the "CaMV Promoter License Agreement" and, together with the Corn Borer-Protected Corn License Agreement and the Glyphosate-Protected Corn License Agreement, the "License Agreements"). The Registration Rights Agreement, the Collaboration Agreement and the License Agreements are referred to herein as the "Ancillary Agreements." THE BOARD OF DIRECTORS HAS UNANIMOUSLY (I) APPROVED THE INVESTMENT AGREEMENT AND THE ANCILLARY AGREEMENTS; (II) DETERMINED THAT THE INVESTMENT AGREEMENT, THE ANCILLARY AGREEMENTS, AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER, TAKEN TOGETHER, ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS; AND (III) RECOMMENDED THE OFFER TO HOLDERS OF CLASS B STOCK WHO DESIRE AN OPPORTUNITY TO SELL ALL OR A PORTION OF THEIR SHARES FOR CASH AT THIS TIME. The Offer is being made pursuant to the Investment Agreement. For a more detailed description of the terms and conditions of the Investment Agreement, see Section 11. Pursuant to the Collaboration Agreement, the Purchaser and the Company have agreed to a long-term research and development collaboration for the development of new transgenic products in the field of agricultural biotechnology. A variety of crops is contemplated under the Collaboration Agreement, including corn, soybean and others. The Purchaser and the Company have further entered into the License Agreements to commercialize genetically engineered corn hybrids incorporating Bacillus thuringiensis tolerance to lepidopteran insects such as the European Corn Borer (YIELDGARDTM Bt insect resistant corn), corn hybrids that are tolerant to glyphosate herbicide (ROUNDUP READYTM glyphosate tolerant corn), and corn hybrids that are tolerant to glufosinate herbicides. The License Agreements define specific areas of commercial interest between the Purchaser and the Company in Bt corn and in herbicide tolerant corn, while the Collaboration Agreement covers broadly all other fields of agricultural biotechnology in a spectrum of crops. Each of the four agreements contemplates a worldwide territory. For a more detailed description of the terms and conditions of these agreements, see Section 11. The Purchaser and certain holders of the Class A Stock of the Company (the "Major A Stockholders") have entered into an agreement dated as of January 31, 1996 (the "Stockholders' Agreement") which provides that each Major A Stockholder will use its best efforts to attend each stockholder meeting for purposes of establishing a quorum and will vote all of its shares of Company voting stock in favor of any nominee of the Purchaser designated pursuant to the Investment Agreement and recommended by the Board 2 5 of Directors of the Company, provided that such nominee is reasonably satisfactory to the Company. In addition, the Stockholders' Agreement provides that each Major A Stockholder will not, without the consent of the Purchaser, initiate any action that would result in the amendment of the provision of the Company's Bylaws described in Section 11 under "Investment Agreement -- Amendment of Bylaws of the Company," and that each Major A Stockholder will vote its Company voting stock in favor of any proposed amendment to the Company's certificate of incorporation to increase the Company's authorized capital stock, which amendment is required in order for the Company to comply with the provisions of the Investment Agreement described under "Investment Agreement -- Equity Purchase Rights." In addition, the Major A Stockholders have agreed to certain restrictions on the sale or transfer of the Class A Stock owned by them. For a more detailed description of the terms and conditions of the Stockholders' Agreement, see Section 11. Immediately following the consummation of the Offer and the Closing under the Investment Agreement, the Company will remain a public company subject to the informational requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), and the Shares are expected to continue to trade on the Nasdaq National Market. THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. Terms of the Offer. Upon the terms and subject to the conditions of the Offer, the Purchaser will accept for payment up to 1,800,000 Shares validly tendered on or prior to the Expiration Date (as herein defined) and not withdrawn as permitted by Section 3. The term "Expiration Date" means 12:00 Midnight, New York City time, on March 6, 1996, unless and until the Purchaser shall, as described below, have extended the period of time for which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date on which the Offer, as so extended by the Purchaser, shall expire. If more than 1,800,000 Shares are validly tendered prior to the Expiration Date and not properly withdrawn, such Shares will be accepted for payment on a pro rata basis according to the number of Shares validly tendered and not properly withdrawn prior to the Expiration Date (with appropriate adjustments to avoid the purchase of fractional Shares). In the event that such proration is required, because of the time required to determine the precise number of Shares validly tendered and not properly withdrawn, the Purchaser does not expect to announce the final results of proration or to pay for any Shares immediately after the Expiration Date. The Purchaser will announce the preliminary results of proration by press release as soon as practicable following the Expiration Date, and expects to be able to announce the final results of proration within seven Nasdaq National Market trading days after the Expiration Date. Holders of Shares may obtain such preliminary information and final results from the Depositary or the Information Agent and may be able to obtain such preliminary information and final results from their brokers. The Investment Agreement provides that the Purchaser may increase the offer price pursuant to the Offer (the "Offer Price") and may make any other changes in the terms and conditions of the Offer, but that, unless previously approved by the Company in writing, the Purchaser may not (i) decrease the Offer Price, (ii) change the form of consideration payable in the Offer, (iii) increase or decrease the minimum number of shares of Class B Stock sought pursuant to the Offer, (iv) add to or modify the Offer Conditions described under Section 13 "Certain Conditions of the Offer," (v) amend the Offer in a manner which would require the extension of the Expiration Date to a date later than April 17, 1996, as required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the "Commission") or the staff thereof or (vi) otherwise amend the Offer in any manner adverse to the interests of the Company or its stockholders. Unless the Purchaser extends the Offer, the Offer will expire at midnight, New York City time, on March 6, 1996. The Investment Agreement provides that the Purchaser will extend the Offer for at least ten business days and may extend the Offer for up to 30 business days (A) if at the scheduled expiration date of the Offer any of the Offer Conditions shall not have been satisfied or waived, until such time as such Offer Conditions are satisfied or waived and (B) for any period required by any rule, regulation, interpretation or position of the Commission or the staff thereof applicable to the Offer. The Investment Agreement provides 3 6 that the Purchaser will terminate the Offer if the Investment Agreement is terminated. Any extension of the Offer may be effected by the Purchaser giving oral or written notice of such extension to the Depositary. The Purchaser expressly reserves the right, subject to the provisions of the Investment Agreement, (i) to amend the Offer or to delay acceptance for payment of or payment for any Shares, or to terminate the Offer by giving notice of such termination to the Depositary, and not to accept for payment or pay for any Shares not theretofore accepted for payment or paid for upon the occurrence, in the reasonable good faith judgment of the Purchaser, of any of the conditions specified in Section 11 and (ii) at any time or from time to time, to amend the Offer in any respect consistent with the provisions of the Investment Agreement described above, as they may be amended from time to time. Any such extension, delay, termination, waiver or amendment will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d) and 14e-l under the Exchange Act which require that material changes be promptly disseminated to stockholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to the Dow Jones News Service. If, in accordance with the Investment Agreement, the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Purchaser will extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The Purchaser shall not be required to accept for payment or pay for any shares of Class B Stock tendered pursuant to the Offer if, in the reasonable good faith judgment of the Purchaser, certain conditions described under "Section 13. Certain Conditions of the Offer" exist. Subject to and in accordance with the terms of the Investment Agreement, if, prior to the Expiration Date, the Purchaser should decrease the number of Shares being sought or increase or decrease the consideration being offered in the Offer, such decrease in the number of Shares being sought or such increase or decrease in the consideration being offered will be applicable to all stockholders whose Shares are accepted for payment pursuant to the Offer and, if at the time notice of any such decrease in the number of Shares being sought or such increase or decrease in the consideration being offered is first published, sent or given to holders of such Shares, the Offer is scheduled to expire at any time earlier than the period ending on the tenth business day, from and including the date that such notice is first so published, sent or given, the Offer will be extended at least until the expiration of such ten business day period. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m through 12:00 midnight, New York City time. The Company has provided the Purchaser with the Company's stockholder lists and security position listings for the purpose of disseminating the Offer to holders of Common Stock. This Offer to Purchase and the related Letter of Transmittal will be mailed by the Purchaser to record holders of Common Stock and will be furnished by the Purchaser to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the stockholder lists or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Common Stock when such lists or listings are received. 2. Acceptance for Payment and Payment for Shares. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Purchaser will accept for payment and pay for up to 1,800,000 Shares validly tendered prior to the Expiration Date (and not properly withdrawn in accordance with Section 3 below) as soon as 4 7 practicable after the Expiration Date. Any determination concerning the satisfaction of such terms and conditions shall be within the sole discretion of the Purchaser and such determination shall be final and binding on all tendering stockholders. See Section 13. The Purchaser expressly reserves the right to delay acceptance for payment of, or payment for, Shares in order to comply in whole or in part with any applicable law. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or a timely confirmation of a book-entry transfer of such Shares into the Depositary's account at one of the Book-Entry Transfer Facilities, as described in Section 4), a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) or an Agent's Message in connection with a book-entry transfer and any other documents required by the Letter of Transmittal. The term "Agent's Message" means a message transmitted through electronic means by a Book-Entry Transfer Facility to and received by the Depositary and forming a part of a book-entry confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the Letter of Transmittal. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment and purchased tendered Shares if, as and when the Purchaser gives oral or written notice to the Depositary of its acceptance for payment of the tenders of such Shares. Payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering stockholders for purposes of receiving payments from the Purchaser and transmitting such payments to the tendering stockholders. Under no circumstances will interest be paid by the Purchaser on the purchase price of the Shares to be paid by the Purchaser, regardless of any delay in making such payment. If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased Shares will be returned, without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company ("Philadep" and DTC sometimes hereinafter collectively referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures set forth in Section 4, such Shares will be credited to an account maintained within such Book-Entry Transfer Facility), as soon as practicable following expiration or termination of the Offer. If, prior to the Expiration Date, the Purchaser shall increase the consideration offered to a holder of Shares pursuant to the Offer, such increased consideration shall be paid to all holders of Shares that are purchased pursuant to the Offer, whether or not such Shares were tendered prior to such increase in consideration. The Purchaser reserves the right to transfer to one or more United States subsidiaries of the Purchaser the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such transfer will not relieve the Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. 3. Withdrawal Rights. Except as otherwise stated in this Section 3, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to 12:00 Midnight, New York City time, on the Expiration Date (which is initially March 6, 1996) and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after April 6, 1996. In addition, if a tender offer by another bidder (other than the Company) is commenced for some or all of the Shares and the Purchaser has received notice or otherwise has knowledge of the commencement of such competing offer, then any Shares of the same class as those for which such other offer is commenced which have been tendered pursuant to the Offer and have not theretofore been accepted for payment by the Purchaser in accordance with the terms of the Offer may be withdrawn on the date of, and for 10 business days after, the commencement (other than commencement by public announcement) of such competing offer. To be effective, a written, telegraphic, telex or facsimile notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any notice of 5 8 withdrawal must specify the name of the tendering stockholder, the number of Shares to be withdrawn and the names in which the certificate(s) evidencing the Shares to be withdrawn are registered, if different from that of the tendering stockholder. If the certificate(s) have been delivered to the Depositary, then, prior to the release of such certificate(s), the serial numbers shown on such certificate(s) must be submitted and the signature(s) on the notice of withdrawal must be guaranteed by a firm which is a member of the Medalion Signature Guarantee Program or by any other "Eligible Guarantor Institution" as such term is defined in Rule 17Ad-15 under the Exchange Act (collectively, "Eligible Institutions"), unless such Shares have been tendered for the account of any Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry tender as set forth in Section 4, any notice of withdrawal must specify the name and number of the account at the appropriate Book-Entry Transfer Facility to be credited with the withdrawn Shares. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion, which determination shall be final and binding. Any Shares properly withdrawn will be deemed not to be validly tendered for purposes of the Offer. Withdrawal of Shares may not be rescinded as any Shares properly withdrawn will thereafter be deemed not validly tendered for any purposes of the Offer. Withdrawn Shares may be retendered, however, by again following one of the procedures for tendering described in Section 4 of this Offer to Purchase at any time prior to the Expiration Date. If the Purchaser is delayed in its acceptance for payment of Shares, or is unable to accept for payment Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under this offer, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares until the expiration or termination of the Offer, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as set forth in this Section 3. 4. Procedures for Tendering Shares. For a stockholder validly to tender Shares pursuant to the Offer, a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees and any other required documents, must be mailed or delivered to and received by the Depositary at its addresses set forth on the back cover of this Offer to Purchase and either certificates for tendered Shares must be received by the Depositary at such address or such Shares must be tendered pursuant to the procedures for book-entry tender set forth below (and a confirmation of receipt of such tender received), in each case, prior to the Expiration Date, or such stockholder must comply with the guaranteed delivery procedure set forth below. The Depositary will establish accounts with respect to the Shares at the Book-Entry Transfer Facilities for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of any Book-Entry Transfer Facility may make a book-entry delivery of Shares by causing such Book-Entry Transfer Facility to transfer such Shares into the Depositary's account at such Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at a Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees and any other required documents, must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the tendering stockholder must comply with the guaranteed delivery procedure described below. Delivery of a document to a Book-Entry Transfer Facility does not constitute delivery to the Depositary. Signatures on all Letters of Transmittal must be guaranteed by an Eligible Institution, except in cases where Shares are tendered (i) by a registered holder of Shares who has not completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. If a Share Certificate is registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made or a Share Certificate not accepted for payment or not tendered is to be returned, to a person other than the registered holder(s), then the Share Certificate must be endorsed or accompanied by appropriate stock powers, in either case signed 6 9 exactly as the name(s) of the registered holder(s) appear on the Share Certificate, with the signature(s) on such stock powers guaranteed by an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING ON PAYMENTS MADE TO CERTAIN STOCKHOLDERS WITH RESPECT TO THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH HIS CORRECT TAXPAYER IDENTIFICATION NUMBER BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's certificates are not immediately available or such stockholder cannot deliver the certificates and all other required documents to the Depositary prior to the Expiration Date, such Shares may nevertheless be tendered, provided that all of the following conditions are satisfied: (a) such tenders are made by or through an Eligible Institution; and (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, is received by the Depositary as provided below on or prior to the Expiration Date; and (c) the certificates (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at one of the Book Entry Transfer Facilities as described above) for all tendered Shares, in proper form for transfer, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and all other documents required by the Letter of Transmittal are received by the Depositary within three Nasdaq National Market trading days after the date of such Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, telex, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at one of the Book-Entry Transfer Facilities as described above), a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other required documents. By executing a Letter of Transmittal as set forth above, the tendering stockholder irrevocably appoints designees of the Purchaser as such stockholder's proxies, in the manner set forth in the Letter of Transmittal, to the full extent of such stockholder's right with respect to the Shares tendered by such stockholder and accepted for payment by the Purchaser and with respect to any and all other Shares or other securities issued or issuable in respect of such Shares on or after January 31, 1996. Such appointment is effective upon the deposit by the Purchaser with the Depositary of the purchase price for such Shares as provided herein. Upon such appointment, all prior proxies given by such stockholder will be revoked, and no subsequent proxies may be given by such stockholder. The Purchaser's designees will be empowered, among other things, to exercise all voting and other rights of such stockholder as they in their sole discretion may deem proper at any annual, special or adjourned meeting of the stockholders of the Company or otherwise. In order for Shares to be deemed validly tendered, immediately after the Purchaser's acceptance for payment the Purchaser must be able to exercise all rights with respect to such Shares. 7 10 All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser, in its sole discretion, which determination shall be final and binding. The Purchaser reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of which may, in the opinion of their counsel, be unlawful. The Purchaser also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularity in the tender of any Shares. Neither the Purchaser, the Depositary, the Information Agent, the Dealer Manager nor any other person will be under any duty to give notification of any defects or irregularities in tenders or shall incur any liability for failure to give any such notification. The Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and instructions thereto) will be final and binding. No tender of Shares shall be deemed to have been validly made until all defects or irregularities have been expressly cured or waived. The acceptance for payment by the Purchaser of tenders of Shares pursuant to any one of the procedures described above will constitute a binding agreement between the tendering stockholder and the Purchaser in accordance with the terms and subject to the conditions of the Offer. 5. Certain Federal Income Tax Consequences. The receipt of cash for Shares pursuant to the Offer will be a taxable transaction for federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign tax laws. In general, a stockholder will recognize gain or loss for federal income tax purposes equal to the difference between the amount of cash received in exchange for the Shares sold and such stockholder's adjusted tax basis in such Shares. Assuming the Shares constitute capital assets in the hands of the stockholder, such gain or loss will be capital gain or loss and will be long term capital gain or loss if the holder will have held the Shares for more than one year at the time of the sale. Gain or loss will be calculated separately for each block of Shares tendered pursuant to the Offer. THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF STOCKHOLDERS, INCLUDING STOCKHOLDERS WHO ACQUIRED SHARES PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, INDIVIDUALS WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES AND FOREIGN CORPORATIONS. THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE OFFER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE ALTERNATIVE TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS. 6. Price Range of Shares; Dividends. The Shares are traded in the over-the-counter market and prices are quoted on the Nasdaq National Market under the symbol SEEDB. There is no established public trading market for the Class A Stock. The following table sets forth, for the quarters indicated, dividends per share and the high and low sales prices per Share as reported by the Nasdaq National Market and by the Dow Jones News Retrieval Service for the periods indicated.
DIVIDENDS HIGH LOW --------- ------ ------ Fiscal 1994: First Quarter....................................... $ .20 $31.75 $24.75 Second Quarter...................................... $ .20 $35.00 $28.50 Third Quarter....................................... $ .20 $36.00 $30.50 Fourth Quarter...................................... $ .20 $33.50 $27.50 Fiscal 1995: First Quarter....................................... $ .20 $32.88 $27.75 Second Quarter...................................... $ .20 $29.75 $24.50 Third Quarter....................................... $ .20 $37.75 $29.00 Fourth Quarter...................................... $ .20 $44.75 $38.50 Fiscal 1996: First Quarter....................................... $ .20 $49.50 $40.00 Second Quarter (through February 6, 1996)........... $ .20 $69.50 $44.38
8 11 On January 31, 1996, the last full trading day prior to the announcement of the Offer and the Investment Agreement and related transactions, the reported closing price on the Nasdaq National Market was $59.25 per Share. On February 6, 1996, the last full trading day prior to commencement of the Offer, the reported closing price on the Nasdaq National Market was $69.50 per Share. Stockholders are urged to obtain a current market quotation for the Shares. 7. Effect of the Offer on Market for the Shares and Exchange Act Registration. The purchase of Shares pursuant to the Offer will likely reduce the number of Shares that might otherwise trade publicly. However, a significant percentage of the outstanding Shares will continue to be held by persons other than the Purchaser, and the Purchaser does not believe that its purchase of the Shares in the Offer is likely to result in the Company's failure to meet the requirements for continued inclusion in the Nasdaq National Market or in the Shares becoming eligible for deregistration under the Exchange Act. The Purchaser believes that its purchase of the Shares in the Offer should not have a material adverse effect on the liquidity and market value of the remaining Shares held by the public. The Shares are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System, which has the effect, among other things, of allowing brokers to extend credit on such Shares as collateral. Following the Offer, the Shares will continue to be "margin securities." The Shares are currently registered under the Exchange Act and will continue to be registered thereunder after the Offer. 8. Certain Information Concerning the Company. The Company is a Delaware corporation with its principal executive offices located at 3100 Sycamore Road, DeKalb, Illinois 60115. According to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1995, the Company engaged in the development of products of major importance to two segments of modern agriculture -- seed (primarily corn, soybeans, sorghum, alfalfa and sunflower) and hybrid swine breeding stock. The Company operates two business segments, a seed segment and a swine breeding segment through the Company's wholly-owned subsidiary, DEKALB Swine Breeders, Inc. The Company conducts major research and development programs on those genetically determined traits which are of primary importance to the profitability of a farmer's production. The Company develops primary or inbred lines through a process of observation, evaluation and selection for further breeding only of those plants or swine which exhibit superior performance in certain traits. These primary or inbred lines, when mated or crossed to other primary or inbred lines, will pass on to their progeny the superior performance in those traits for which the primary or inbred lines were selected. Additionally, a fundamental genetic principle -- called heterosis, or hybrid vigor -- is generally utilized. Heterosis occurs when the progeny of genetically dissimilar parents have certain performance characteristics which are superior to those of either parent. The Company uses these principles of genetic selection and heterosis to provide products for the modern day agricultural industry. The Company also develops production and management techniques to complement the performance potential which resides in the genetic composition of its products. The selected financial information of the Company and its consolidated subsidiaries for the years ended August 31, 1995, 1994 and 1993 set forth below has been taken from the audited financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1995, and such information is qualified in its entirety by reference to such document and all of the financial statements and related notes contained therein. The selected financial information for the quarter ended November 30, 1995 set forth below has been taken from unaudited financial information contained in the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1995. Such Form 10-K and Form 10-Q are each incorporated by reference herein. More comprehensive financial information is included in such reports and other documents filed by the Company with the Commission, and the following summary is qualified in its entirety by reference to such reports and such other documents and all the financial information (including the 9 12 related Notes) contained therein. Such reports and other documents should be available for inspection and copies thereof should be obtainable in the manner set forth below under "Available Information."
THREE MONTHS ENDED NOVEMBER 30, YEAR ENDED AUGUST 31, ------------ -------------------------- 1995 1995 1994 1993 ------------ ------ ------ ------ (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) OPERATIONS DATA Total Operating Revenues................................ $ 50.1 $319.4 $300.2 $277.4 Earnings before income taxes and discontinued operations............................................ (0.2) 15.1 15.2 (2.6) Net earnings............................................ $ (0.1) $ 10.7 $ 10.6 $ 1.7 ===== ===== ===== ===== Earnings per share (1).................................. $(0.02) $ 2.04 $ 2.02 $ 0.33 Dividends per share..................................... $ 0.20 $ 0.80 $ 0.80 $ 0.80 FINANCIAL DATA Total assets............................................ $415.5 $323.0 $315.2 $313.0 Long-term debt.......................................... 85.0 85.0 85.0 85.2 Shareholders' equity (2)................................ 125.0 126.3 121.3 114.8
- ------------------------- (1) Earnings per common share are calculated by dividing net earnings by the average number of common and common equivalents (stock options) shares outstanding during the relevant periods. (2) Gains and losses resulting from translation (except in foreign countries experiencing hyperinflation) are reflected as an adjustment to shareholders' equity. On January 16, 1996, the Company announced that the U.S. Patent and Trademark Office granted it the first product patent covering insect-resistant corn plants, which patent covered fertile, transgenic corn plants expressing genes encoding a Bt insecticidal protein. On February 6, 1996, the Company announced that the U.S. Patent and Trademark Office granted it the first patent for the microprojectile bombardment method of transforming corn, which patent covers the microprojectile method for producing fertile, transgenic corn plants containing a bar or pat gene, as well as the production and breeding of progeny of such plants. Such recent announcements are part of an evolving portfolio of intellectual property which is held by the Company. AVAILABLE INFORMATION The Company is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is required to file periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Information as of particular dates concerning the Company's directors and officers, their remuneration, stock options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be disclosed in proxy statements distributed to the Company's stockholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and also should be available for inspection at the Commission's Regional offices located at Seven World Trade Center, 13th Floor, New York, New York 10048 and the Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may also be obtained by mail, upon payment of the Commission's customary fees, by writing to its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The information should also be available for inspection at the offices of the National Association of Securities Dealers, Inc. ("NASD") Reports Section, 1735 K Street N.W., Washington, D.C. 20006. Except as otherwise noted in this Offer to Purchase, all of the information with respect to the Company set forth in this Offer to Purchase has been provided by the Company or derived from publicly available information. Although the Purchaser has no knowledge that any such information is untrue, the Purchaser takes no responsibility for the accuracy or completeness of information contained in this Offer to Purchase with respect to the Company or for any failure by the Company to disclose events which may have occurred or may affect the significance or accuracy of any such information. 10 13 9. Certain Information Concerning the Purchaser. The Purchaser is a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices located at 800 North Lindbergh Blvd., St. Louis, Missouri 63167. The Purchaser and its subsidiaries are engaged in the worldwide manufacture and sale of a widely diversified line of agricultural products; chemical products, including plastics and manufactured fibers; pharmaceuticals; and food products, including low-calorie sweeteners. The name, business address, present principal occupation, material positions held in the past five years and citizenship of each of the directors and executive officers of the Purchaser are set forth in Schedule A to this Offer to Purchase. At December 31, 1995, the Purchaser employed approximately 28,500 persons in its worldwide operations. There is set forth below certain consolidated summary financial information of the Purchaser for the Purchaser's last three fiscal years and the nine months ended September 30, 1995 and 1994 as contained in the Purchaser's Annual Report on Form 10-K for the year ended December 31, 1994 and Form 10-Q for the quarter ended September 30, 1995 as filed with the Commission. More comprehensive financial information is included in such reports and other documents filed by the Purchaser with the Commission, and the following summary is qualified in its entirety by reference to such reports and other documents and all of the financial information and notes contained therein. Copies of such reports and other documents may be examined at or obtained from the Commission in the manner set forth under "Available Information" or from the New York Stock Exchange, Inc. ("NYSE"). SELECTED FINANCIAL DATA (DOLLARS IN MILLIONS)
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, ------------- -------------------------- 1995 1994 1993 1992 ------------- ------ ------ ------- Net Sales................................................ $ 6,848 $8,272 $7,902 $7,763 Operating Income......................................... 1,030 923 810 58 ------ ------ ------ ------ Net Income (Loss)................................. $ 659 $ 622 $ 494 $ (88)
BALANCE SHEET DATA
AT DECEMBER 31, AT ------------------------ SEPTEMBER 30, 1995 1994 1993 1992 ------------------ ------ ------ ------ Total Assets.......................................... $ 10,575 $8,891 $8,640 $9,085 Long-Term Debt........................................ 1,685 1,045 1,502 1,423 Shareowners' Equity................................... 3,631 2,948 2,855 3,005
The Purchaser is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated to file reports and other information with the Commission under the Exchange Act relating to its business, financial condition and other matters. Information, as of particular dates, concerning Purchaser's directors and officers, their remuneration, options granted to them, the principal holders of the Purchaser's securities and any material interest of such persons in transactions with the Purchaser is disclosed in proxy statements distributed to the Purchaser's stockholders and filed with the Commission. Such reports, proxy statements and other information may be examined, and copies may be obtained at the same places and in the same manner set forth with respect to the information concerning the Company under "Available Information" in this Offer to Purchase, except copies of such information are available at the NYSE rather than the NASD Reports Section. Except as set forth in Sections 10 and 11, neither the Purchaser, nor, to the best of its knowledge, any of the persons listed in Schedule A hereto nor any associate or majority owned subsidiary of any of the foregoing, 11 14 beneficially owns or has a right to acquire any equity securities of the Company. Neither the Purchaser, nor, to the best of its knowledge, any of the persons or entities referred to above, nor any director, executive officer or subsidiary of any of the foregoing, has effected any transaction in such equity securities during the past 60 days. Except as set forth in Sections 10 and 11, neither the Purchaser, nor, to the best of its knowledge, any of the persons listed in Schedule A hereto, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies. Except as set forth in Sections 10 and 11, there have been no contracts, negotiations or transactions since September 1, 1992 between the Purchaser, or, to the best of its knowledge, any of the persons listed in Schedule A hereto, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors, or a sale or other transfer of a material amount of assets. Except as described in Sections 10 and 11, neither the Purchaser, nor, to the best of its knowledge, any of the persons listed in Schedule A hereto, has since September 1, 1992 had any transaction with the Company or any of its executive officers, directors or affiliates that would require disclosure under the rules and regulations of the Commission applicable to the Offer. 10. Background of the Offer; Contacts with the Company; Recommendation of the Company's Board. BACKGROUND OF THE OFFER Since April, 1992, the Purchaser and the Company have entered into various research and similar agreements for the joint development of various products. In early 1995, Robert Shapiro, Chief Executive Officer of the Purchaser, suggested, first, through representatives, then, in March, 1995, directly to Bruce P. Bickner, Chief Executive Officer of the Company, that a business relationship between the companies could be beneficial to both companies. On April 5, 1995, Mr. Shapiro, Mr. Bickner and other members of the senior management of both companies met in Chicago, Illinois and discussed the range of possible future relationships between the companies. At this meeting, the Purchaser's representatives described their vision for the Purchaser's agriculture business and indicated that a relationship with a company in the seed corn business, a major element of Company's business, was a part of that vision. The Company's representatives indicated at that time that the Company was only interested in a collaboration. Representatives of the companies decided to continue discussions of a possible future relationship into which the companies might enter. On May 16, 1995, Mr. Shapiro, Mr. Bickner and other members of both companies' managements met again in Chicago, Illinois to further discuss a possible relationship. The Company's representatives indicated that they essentially agreed with the Purchaser's vision for agriculture. The Purchaser's representatives further described their specific plans for the future and described numerous areas for potential collaboration between the companies. In June, July and August of 1995, several meetings of the management teams occurred to assess potential opportunity for collaboration. These meetings covered a review of the market opportunity for new products, general discussions on the likely evolution of the seed corn and pesticide and herbicide markets, intellectual property status and potential methods for the companies to work together. In a meeting on October 6, 1995 among Mr. Shapiro, Mr. Bickner, Blair White, a Director of the Company, and John Robson, a Senior Advisor with Robertson, Stephens & Company LLC, both companies' representatives indicated that they believed that there was an opportunity for a relationship between the companies and outlined a possible structure of such a relationship. In a telephone conversation between Mr. Shapiro and Mr. Bickner on October 9, 1995, they agreed to designate representatives of the companies' management and advisors to develop further detailed ideas for a form of relationship between the companies. "Investment Teams" were created by each company to discuss and develop the structure of the investment by the Purchaser in the Company. "Collaboration Teams" were created by each company to discuss and develop the nature of the collaboration of the companies in the development and marketing of products. 12 15 In a series of meetings in October, 1995, the Investment Teams and the Collaboration Teams, in Chicago, Illinois, developed a possible structure for an investment by the Purchaser in the Company and the collaboration arrangements and the initial license arrangements between the companies. On November 8, 1995, Mr. Shapiro and Mr. Bickner met to review the status of the various ongoing discussions. Although both companies still felt there was significant potential value in developing a relationship between the companies, there were significant differences concerning numerous major issues. In November, 1995, the Collaboration Teams continued to develop the potential collaboration and licensing arrangements, and Mr. Thomas Rauman, Chief Financial Officer of Company, met with the Purchaser's representatives to discuss the issues with respect to the Purchaser's potential investment in the Company. On December 6, 1995, Mr. Bickner (and various advisors) met with Mr. Shapiro (and various advisors) in St. Louis, Missouri. They agreed to continue discussions regarding a relationship between the companies and, concluded that, although several major issues had not yet been resolved, it was appropriate to begin to draft contracts reflecting the possible relationship between the companies. On numerous occasions in December 1995 and January 1996, representatives of both companies met to negotiate and draft various agreements and outline the major open issues. Representatives of the companies and their advisors also met in January to review various due diligence topics. On January 9, 1996, Mr. Shapiro and Mr. Bickner and their advisors met in Chicago, Illinois to further discuss major issues concerning the companies' relationship, including the price and terms of any sale of shares or tender offer. The Board of Directors of the Company, which had been advised by Mr. Bickner on these discussions at two earlier meetings, met by telephone on January 11, 1996 and in person on January 16, 1996, in each case to receive presentations from management and outside financial and legal advisors, including special counsel to the Board, ask questions and review in more detail the terms of the possible collaboration, investment, tender offer and related matters. The parties continued to discuss issues and exchange drafts until final contracts were prepared for signature on January 31, 1996. On January 31, 1996, the Company's Board reviewed the terms of the Investment Agreement and the Ancillary Agreements with the Company's management and its financial and legal advisors. Merrill Lynch, Pierce, Fenner & Smith Incorporated, then delivered its opinion to the Company's Board of Directors dated January 31, 1996 that, as of such date, the Investment Agreement, the Ancillary Agreements and the transactions contemplated thereby, taken as a whole, were fair to the Company and its shareholders from a financial point of view. The Board then unanimously (i) approved the Investment Agreement and the Ancillary Documents; (ii) determined that the Investment Agreement, the Ancillary Documents and the transactions contemplated thereby, including the Offer, taken together, are fair to and in the best interests of the Company and its shareholders; and (iii) resolved to recommend the Offer to holders of shares of Class B Stock who desire an opportunity to sell all or a portion of their shares for cash at this time. Reference is made to the Company's Statement on Schedule 14D-9 for a description of the matters considered by the Board in connection with its actions. 11. Purpose of the Offer; the Investment Agreement; the Stockholders' Agreement; the Ancillary Agreements. The purpose of the Offer is to acquire the Shares as one step in acquiring up to a 45% equity interest in the Company and establishing a strategic relationship between the Company and the Purchaser. In connection with such relationship, the Purchaser will have representation on the Company's Board of Directors and certain other rights under Investment Agreement and the Ancillary Agreements allowing the Purchaser to enhance its business and influence the business of the Company as more fully described below. 13 16 INVESTMENT AGREEMENT THE NEWLY ISSUED SHARES In addition to the terms of the Offer, the Investment Agreement also sets forth the terms and conditions by which the Company will issue and sell to Monsanto the Newly Issued Shares. Pursuant to the terms of the Investment Agreement, Monsanto will purchase from the Company newly issued shares of Class A Stock at a price per share of $65.00 (such shares representing 10% of the outstanding shares of Class A Stock after expiration of the Offer and after giving effect to the issuance thereof) and 378,000 newly issued shares of Class B Stock at a price per share of $65.00. Subject to the satisfaction or waiver of the conditions set forth in the next three paragraphs, the Closing of the purchase and sale of the Newly Issued Shares will occur as promptly as practicable after the expiration of the Offer, or on such later date and time as may be mutually agreed by Monsanto and the Company. CONDITIONS PRECEDENT TO THE PURCHASE AND SALE OF THE NEWLY ISSUED SHARES The respective obligations of Monsanto and the Company to consummate the transactions contemplated to occur at the Closing, including the purchase and sale of the Newly Issued Shares, are subject, among other things, to the satisfaction or waiver of the following conditions as of the Closing: (i) there not being threatened or pending by any Governmental Authority (as defined under Section 13. "Certain Conditions of the Offer.") any suit, action or proceeding, and there not being pending by any other person any suit, action or proceeding, which has a substantial likelihood of success, seeking: (x) to restrain or prohibit the purchase and sale of the Newly Issued Shares or the Class B Stock pursuant to the Offer, (y) to compel the Company to dispose of or hold separate any material portion of the business or assets of the Company and its subsidiaries, taken as a whole, or to compel Monsanto or its subsidiaries to dispose of, or hold separate any material portion of the business or assets of Monsanto and its subsidiaries, as a result of any of the transactions contemplated by the Investment Agreement or the Ancillary Agreements or (z) to prohibit Monsanto or the Company, as the case may be, from effectively exercising any of its material rights under the Investment Agreement or any Ancillary Agreement; and (ii) no Governmental Authority having enacted, entered, promulgated, enforced or issued any statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order, legal restraint or prohibition then in effect preventing the consummation of any of the transactions contemplated by the Investment Agreement or the Ancillary Agreements or having any of the other consequences described in clause (i). The obligation of Monsanto to consummate the transactions contemplated to occur at the Closing, including the purchase and sale of the Newly Issued Shares, is also subject to the satisfaction or waiver of the following conditions as of the Closing: (i) the representations and warranties of the Company set forth in the Investment Agreement and in the Ancillary Agreements being true and correct in all material respects as of the date of the Investment Agreement and as of the date of the Closing (the "Closing Date") as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects on and as of such earlier date); Monsanto having received a certificate to such effect dated as of the Closing Date and executed by a duly authorized officer of the Company; and the Company having performed or complied in all material respects with all obligations and covenants required by the Investment Agreement and the Ancillary Agreements to be performed or complied with by the Company by the time of the Closing; (ii) amendments to the Company's Bylaws contemplated by the Investment Agreement (see, "-- Amendment of Bylaws of the Company") having been duly authorized, approved and effected; (iii) the Company having furnished to Monsanto an opinion of John H. Witmer, Jr., Senior Vice President and General Counsel of the Company; and (iv) the Company (including its subsidiaries) not having sold or otherwise disposed of (or authorized, committed or agreed to sell or otherwise dispose of) any business or assets relating to the research-based production, marketing, licensing and sale of agronomic seed (including both technology related thereto and products derived therefrom) (the "Primary Business") that constitute more than 5% of the total consolidated assets of the Company as shown on the Company's consolidated balance sheet as of the end of the most recent 14 17 fiscal quarter ending prior to the time the determination is made, excluding sales in the normal course of business. The obligation of the Company to consummate the transactions contemplated to occur at the Closing, including the purchase and sale of the Newly Issued Shares, is also subject to the satisfaction or waiver of the following conditions as of the Closing: (i) the representations and warranties of Monsanto set forth in the Investment Agreement and in the Ancillary Agreements being true and correct in all material respects as of the date of the Investment Agreement and as of the Closing Date as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects on and as of such earlier date); the Company having received a certificate to such effect dated as of the Closing Date and executed by a duly authorized officer of Monsanto; and Monsanto having performed or complied in all material respects with all obligations and covenants required by the Investment Agreement and the Ancillary Agreements to be performed or complied with by Monsanto by the time of the Closing; (ii) the Offer having expired and Monsanto having purchased or accepted for payment and purchase any Class B Stock which it will acquire pursuant to the Offer; and (iii) Monsanto having furnished to the Company an opinion of Frank E. Vigus, Assistant General Counsel of Monsanto. ADDITIONAL MARKET PURCHASES OF CLASS B STOCK The Newly Issued Class B Shares, together with the maximum number of shares of Class B Stock that may be purchased by Monsanto in the Offer, would constitute approximately 45% of the total issued and outstanding shares of Class B Stock at January 31, 1996 after giving effect to the issuance of the Newly Issued Class B Shares. The Investment Agreement provides that if, after completion of the Offer and the purchase of the Newly Issued Shares at the Closing, Monsanto beneficially owns less than 40% of the outstanding Common Stock on the first day after completion of the Offer and the Closing, then Monsanto will have the right, at any time prior to the first anniversary of the Closing Date, to acquire in the market up to an additional number of shares of Class B Stock so that after such purchases the total Common Stock beneficially owned by Monsanto and its affiliates does not exceed 40% of the outstanding Common Stock at such time. REPRESENTATIONS AND WARRANTIES; SURVIVAL; INDEMNIFICATION The Investment Agreement contains various representations and warranties of the Company, relating, among other things, to: (i) its organization, existence, good standing, corporate power and qualification and the organization, existence, good standing, corporate power and qualification of its Significant Subsidiaries (as defined in the Investment Agreement), (ii) its subsidiaries, (iii) its capitalization and the issuance of the Newly Issued Shares, (iv) its authorization, execution, delivery and performance of and the enforceability of the Investment Agreement and the Ancillary Agreements; the absence of conflicts or violations of or defaults under, the Restated Certificate of Incorporation of the Company, the Bylaws of the Company and certain other agreements and documents; and required consents and approvals, (v) the documents and reports filed by the Company with the Commission and the accuracy and completeness of the information contained therein, (vi) the absence of certain changes or events, (vii) pending or threatened litigation, (viii) tax matters, (ix) stockholder voting requirements, (x) broker's or similar fees, (xi) compliance with applicable laws and environmental matters, (xii) material contracts and (xiii) the accuracy and completeness of information relating to the Investment Agreement and the Ancillary Agreements. The Investment Agreement also contains various representations and warranties of Monsanto, relating, among other things to: (i) its organization, existence, good standing and corporate power; (ii) its authorization, execution, delivery and performance of and the enforceability of the Investment Agreement and the Ancillary Agreements; the absence of conflicts or violations of or defaults under, its Certificate of Incorporation, its Bylaws and certain other agreements and documents; and required consents and approvals; (iii) broker's or similar fees, (iv) certain matters relating to its purchase of the Newly Issued Shares and related federal securities laws matters and (v) its ownership of Common Stock and related matters. 15 18 The representations and warranties in the Investment Agreement and in the instruments delivered pursuant thereto (without regard to the Ancillary Agreements) will survive the Closing for a period of 24 months, except that certain of the Company's representations and warranties, to the extent applicable to the issuance of the Newly Issued Shares to Monsanto at the Closing, will survive the Closing indefinitely and certain of the Company's representations and warranties relating to tax matters will survive the Closing until the expiration of the applicable statute of limitations. The Investment Agreement provides that (i) the Company will indemnify and hold Monsanto and its directors, officers, employees and agents (collectively, "Monsanto Indemnified Parties") harmless from and against any and all claims, liabilities, fines, penalties, demands, causes of action, suits, judgments, losses, injuries, damages (including costs of defense, settlement and reasonable attorneys' fees) (collectively, "Liabilities, Actions and Damages") suffered or incurred by Monsanto Indemnified Parties with respect to any inaccuracy of representations and warranties of the Company in the Investment Agreement or, subject to a 60-day cure period following written notice thereof, with respect to breaches by the Company of its covenants made in the Investment Agreement and (ii) Monsanto will indemnify and hold the Company and its directors, officers, employees and agents (collectively, the "Company Indemnified Parties") harmless from and against any and all Liabilities, Actions and Damages suffered or incurred by the Company Indemnified Parties with respect to any inaccuracy of representations and warranties of Monsanto in the Investment Agreement or, subject to a 60-day cure period following written notice thereof, with respect to breaches by Monsanto of its covenants made in the Investment Agreement. CONDUCT OF BUSINESS BY THE COMPANY UNTIL THE CLOSING The Company has agreed that during the period from the date of the Investment Agreement until the Closing, the Company will, and will cause its subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course in substantially the same manner as previously conducted. Without limiting the generality of the foregoing, the Company has agreed that it will not (and, as applicable, neither the Company nor any subsidiary will) take any of the following actions: (a) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock (other than dividends on Common Stock to be declared and paid only at the customary rates and times) or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (b) issue, deliver, sell, pledge or otherwise encumber any shares of capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities (other than (i) the issuance of new options or Common Stock under the Company's Long Term Incentive Plan, Savings and Investment Plan and Director Stock Option Plan (collectively, the "Stock Plans") or Common Stock upon the exercise or conversion of rights outstanding on the date of the Investment Agreement and in accordance with their present terms, (ii) the purchase of Common Stock pursuant to the Stock Plans, in accordance with their respective terms and (iii) the issuance and sale of the Newly Issued Shares in accordance with the terms of the Investment Agreement); (c) acquire, in a single transaction or in a series of related transactions, any business or assets outside the Primary Business of the Company that would be equal in amount to more than 25% of the total consolidated assets of the Company as shown on the Company's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made whether such acquisition be by merger or consolidation or the purchase of stock or assets or otherwise; (d) amend its certificate of incorporation or bylaws except for amending the bylaws of the Company as contemplated by the Investment Agreement (see, "-- Amendment of Bylaws of the Company"); or (e) authorize, or commit or agree to take, any of the foregoing actions. 16 19 ELECTION OF MONSANTO DIRECTORS AND INDEPENDENT DIRECTORS The Investment Agreement provides that no later than 20 business days after the Closing, the Board of Directors will be increased in number so that Monsanto may nominate one director whose term will expire at the Company's 1999 annual meeting of stockholders. The Investment Agreement further provides that if Monsanto acquires beneficial ownership of at least 20% of the outstanding Common Stock in accordance with the terms of the Investment Agreement, Monsanto may nominate an additional director who will be placed on the ballot for election at the Company's annual meeting of stockholders to be held in January, 1997 and whose term will expire at the Company's 2000 annual meeting (each such director and any other persons nominated from time to time by Monsanto pursuant to the terms of the Investment Agreement described herein, a "Monsanto Nominee"). Any Monsanto Nominee may be an employee, officer or director of Monsanto or any of its subsidiaries and each shall be reasonably satisfactory to the Company. The Company will use all reasonable efforts at all times thereafter, during which (i) Monsanto retains beneficial ownership of at least 7.5% of the Class A Stock and that number of shares of Common Stock (the "75% Limitation") as is equal to at least 75% of the highest percentage of the outstanding Common Stock beneficially owned by Monsanto after completion of the Offer, the Closing and the acquisition of any additional shares of Class B Stock acquired by Monsanto pursuant to the provisions described under "-- Acquisition of Additional Class B Stock" and (ii) the Collaboration Agreement is in full force and effect (except if terminated by reason of a material breach of its terms by the Company), to cause the Monsanto Nominees to be elected to the Board of Directors; provided, if Monsanto retains beneficial ownership of less than 7.5% of the Class A Stock and the 75% Limitation but at (i) least 5% of the outstanding Class A Stock and that number of shares of Common Stock is equal to 50% of the highest percentage of the outstanding Common Stock beneficially owned by Monsanto after completion of the Offer, the Closing and the acquisition of any additional shares of Class B Stock acquired by Monsanto pursuant to the provisions described under "-- Acquisition of Additional Class B Stock" and (ii) the Collaboration Agreement remains in full force and effect as aforesaid, then the Monsanto Nominees will be limited to one director (any period during which Monsanto is entitled to nominate one or more Monsanto Nominees is referred to as a "Director Representation Period"). Monsanto has agreed that if at any time the conditions entitling Monsanto to elect one or two Monsanto Nominees, as the case may be, are not met: (i) at the request of the Company, Monsanto will use all reasonable efforts to cause such Monsanto Nominee(s) who shall then be serving as a member of the Board of Directors to resign and (ii) Monsanto will have no further rights under the Investment Agreement with respect to the election of one or two Monsanto Nominees, as the case may be. The Company has agreed that during any Director Representation Period in which two Monsanto Nominees serve as members of the Board of Directors, one such Monsanto Nominee will be a member of the Company's Executive Committee and the other will be a member of the Company's Audit Committee and that if only one Monsanto Nominee serves as a member of the Board of Directors, such Monsanto Nominee will serve as a member of the Company's Executive Committee. Monsanto Nominees will not be paid director fees or meeting fees but will be reimbursed for reasonable expenses of attending meetings. During a Director Representation Period, Monsanto will have the right to designate any replacement for a Monsanto Nominee upon the death, resignation, retirement, disqualification or removal from office for cause of such Monsanto Nominee, such replacement to be reasonably satisfactory to the Company. The Company has agreed to use all reasonable efforts to cause each person so designated by Monsanto to be promptly appointed or elected to the Board of Directors. During any period in which Monsanto is entitled to designate a Monsanto Nominee but no Monsanto Nominee is then serving on the Board of Directors (if Monsanto shall have designated such a person within a reasonable period of time), the Board may not amend the Bylaw provisions required to be adopted by the Company pursuant to the Investment Agreement without the consent of Monsanto. See "-- Amendment of Bylaws of the Company." The Company has agreed to use all reasonable efforts to assure that during a Director Representation Period there will be at least three Independent Directors on the Board of Directors. As defined in the Investment Agreement, an Independent Director is any individual who (i) is not (apart from such directorship): an officer or employee of the Company or any affiliate of the Company, (ii) is not a director, 17 20 officer or employee of Monsanto or any affiliate of Monsanto, (iii) is not a Major A Stockholder, an affiliate of a Major A Stockholder or a Permitted Transferee (as defined in the Stockholders' Agreement described herein under "Stockholders' Agreement") of a Major A Stockholder, (iv) did not in either of the last two completed calendar years receive, and is not an officer, director, employee, stockholder holding more than 10% of the voting interest of, a partner or affiliate of any entity that in either of such entity's two most recent fiscal years, received, more than (A) $350,000 in revenues or other compensation or (B) 20% of such entity's total revenues from the Company, Monsanto, a Major A Stockholder or a Permitted Transferee or an affiliate of any of the foregoing; provided, no person who is serving as a director of the Company as of the date of the Investment Agreement will be excluded pursuant to this clause (iv) unless such person is also excluded pursuant to clauses (i), (ii), (iii) or (v) of the definition; or (v) is not a voting trustee under a Voting Trust Agreement entered into among the Major A Stockholders (the "Voting Trust Agreement"); but does not include any Monsanto Nominee. AMENDMENT OF BYLAWS OF THE COMPANY The obligation of Monsanto to consummate the transactions contemplated to occur at the Closing, including purchase and sale of the Newly Issued Shares, is conditioned upon, among other things, the Company amending its Bylaws to: (i) state that the Primary Business of the Company is the research-based production, marketing, licensing and sale of agronomic seed, including both technology related thereto and products derived therefrom; (ii) state that the use of voting securities of the Company to facilitate strategic collaborations is in the Company's best interest, but as to any one strategic collaboration, the maximum amount of voting securities of the Company to be issued to any individual, entity or Group (as defined in Section 13(d)(3) of the Exchange Act) will not exceed 10% of the voting securities of the Company then outstanding; and (iii) prohibit the Company from acquiring any business or assets outside of the Primary Business of the Company that would constitute more than 25% of the total consolidated assets of the Company as shown on the Company's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made. Notwithstanding the immediately preceding sentence, the required Bylaw amendments would permit the Company to change its Primary Business, issue voting securities to facilitate a strategic collaboration or acquire any business outside of the Primary Business unless three (two prior to the Company's 1997 annual meeting of stockholders) of the members of the Board of Directors vote against the resolution of the Board of Directors relating to such change or transaction. The amendments described in this paragraph may not be further amended if at least two (one prior to the Company's 1997 annual meeting of stockholders) of the members of the Board of Directors vote against such further amendment. RESTRICTIONS ON TRANSFER The Investment Agreement provides that, prior to the earliest of (i) the third anniversary of the Closing, (ii) the termination or expiration of the Collaboration Agreement (except if the Collaboration Agreement is terminated by reason of a material breach of its terms by Monsanto), (iii) the issuance by a Government Authority of a final, non-appealable order (a "Final Governmental Order") requiring Monsanto to divest any or all shares of Common Stock of the Company, securities of the Company convertible into such shares, or options, warrants or other rights to acquire such shares (collectively, "Equity") or (iv) the agreement of the Company to enter into a Business Combination (as hereinafter defined) with a person other than Monsanto or any of its affiliates, neither Monsanto nor any of its United States subsidiaries may transfer any Equity except for: (1) subject to certain conditions, a transfer by Monsanto to one of its United States subsidiaries; (2) a transfer to the Company or one of its subsidiaries; (3) a transfer pursuant to a merger or consolidation that is recommended by the Board of Directors in which the Company is a constituent corporation; (4) a transfer pursuant to a bona fide third party tender offer or exchange offer, which was not induced directly or indirectly by Monsanto or any of its affiliates, that is recommended by the Board of Directors or pursuant to which Major A Stockholders tender or exchange shares equal to a majority of the total voting power of the Company (and do not withdraw the same on or before the business day immediately prior to the expiration date of such offer), subject to the Company's right of first refusal under the Investment Agreement (the "Right of First Refusal"), (see, "-- Right of First Refusal"); or (5) a transfer of Class B Stock tendered on the expiration 18 21 date of a bona fide third party tender offer or exchange offer, which was not induced directly or indirectly by Monsanto or any of its affiliates, of a number of shares of Class B Stock equal to the aggregate number of shares of Common Stock tendered by all Major A Stockholders (and not withdrawn by such Major A Stockholders prior to the close of business on the business day immediately prior to such expiration date), provided Monsanto shall have received written notice from the third party making such tender or exchange offer certifying that such Major A Stockholders shall have tendered and not withdrawn such shares as of the close of business on the business day prior to such expiration date, subject to the Right of First Refusal. The Investment Agreement further provides that after the earliest to occur of the events described in clauses (i) through (iv) of the immediately preceding paragraph, neither Monsanto nor any of its United States subsidiaries may transfer any Equity except for a transfer (a "Monsanto Permitted Transfer") which is either (x) permitted by the provisions described in the immediately preceding paragraph or (y) made by Monsanto or any of its United States subsidiaries of Class B Stock for cash (1) in private sales to financial or institutional buyers other than for or on behalf of certain described competitors of the Company, (2) in bona fide open market "brokers' transactions" as permitted by Rule 144 under the Securities Act, or (3) in a bona fide public offering pursuant to the Registration Rights Agreement (any such public offering, a "Monsanto Permitted Offering"), provided that in the case of a transfer described in clauses (1) or (3), the Company has waived its Right of First Refusal, and provided, further, that Monsanto or such subsidiaries, as the case may be, take all reasonable steps to assure that, in connection with any such open market transactions or Monsanto Permitted Offering, transfers not be made to any person or Group that would, following such transfer, beneficially own more than 5% of the outstanding voting stock of the Company or more than 5% of the outstanding Class B Stock or, in the case of a private sale described in clause (1), more than 7.5% of the outstanding voting stock of the Company or more than 7.5% of the outstanding Class B Stock; and provided, further, in the case of a Monsanto Permitted Offering which is not made pursuant to a firm underwriting commitment, such transfers are completed within 60 days from the date such shares are first made available for public sale. As used in the Investment Agreement, "Business Combination" means a merger or consolidation pursuant to which the Common Stock is convertible into or exchanged for cash, securities or other property, or a sale of all or substantially all of the assets of the Company and its subsidiaries taken as a whole, or a sale of all or substantially all of the assets of the Company's United States seed corn business, provided that a transaction in which the beneficial ownership of the capital stock of the Company or of the sole surviving corporation to the transaction (or of the ultimate parent of the Company or of such sole surviving corporation) immediately after the consummation of such transaction is substantially the same as the beneficial ownership of the Company's capital stock immediately prior to the consummation thereof will not be deemed a Business Combination unless such transaction results in the sale of all or substantially all of the assets of the Company and its subsidiaries taken as a whole or all or substantially all of the asset of the Company's United States seed corn business. If Monsanto disposes of beneficial ownership of any Equity prior to the tenth anniversary of the Closing Date as described above as a result of a Final Governmental Order which arises out of or results from the acquisition or attempted acquisition of Monsanto of assets or businesses not owned by Monsanto or its affiliates on the date of the Investment Agreement other than the transactions contemplated by the Investment Agreement (an "Acquisition"), then the terms of the Collaboration Agreement and the License Agreements will be amended as provided therein and (i) Monsanto will be required to reimburse the Company for all reasonable costs and expenses incurred by the Company in connection with any registrations effected by the Company to permit such disposition of Equity, whether or not required to be borne by the Company under the Registration Rights Agreement and (ii) Monsanto will only be entitled to dispose of that amount of Equity required to be disposed of pursuant to such Final Governmental Order. If Monsanto disposes of beneficial ownership of any Equity after the third anniversary of the Closing Date and prior to the tenth anniversary of the Closing Date other than (i) transfers permitted by the Investment Agreement as described above, (ii) dispositions required after the issuance of a Final Governmental Order, (iii) dispositions following termination or expiration of the Collaboration Agreement (except if the same is terminated by reason of a material breach of its terms by Monsanto), (iv) dispositions by reason of a decrease 19 22 in the Company's share of the United States seed corn market to less than 7% as determined by annual gross units sold or licensed in any two consecutive fiscal years or the incurrence by the Company of net operating losses in any two consecutive fiscal years or (v) dispositions following the agreement of the Company to enter into a Business Combination with a person other than Monsanto or any of its affiliates, then the terms of the Collaboration Agreement and the License Agreements will be amended as provided therein and Monsanto will be required to reimburse the Company for all reasonable costs and expenses incurred by the Company in connection with any registrations effected by the Company to permit such disposition of Equity whether or not required to be borne by the Company under the Registration Rights Agreement. If Monsanto disposes of beneficial ownership of any Equity prior to the tenth anniversary of the Closing Date as described above as a result of a Final Governmental Order which arises out of or results from the acquisition or attempted acquisition by the Company of assets or businesses not owned by the Company or its affiliates on the date of the Investment Agreement, other than as contemplated by the Investment Agreement, then the terms of the Collaboration Agreement and the License Agreements will be amended as provided therein and the Company will be required to reimburse Monsanto for all reasonable costs and expenses, including underwriting discounts and commissions, incurred by Monsanto in connection with any registrations effected by the Company on behalf of Monsanto to permit such disposition of Equity, whether or not required to be borne by Monsanto under the Registration Rights Agreement. RIGHT OF FIRST REFUSAL Until the tenth anniversary of the Closing, prior to any transfer by Monsanto or any of its United States subsidiaries: (i) of Class B Stock for cash in a private sale to a financial or institutional buyer other than for or on behalf of specified competitors of the Company, (ii) of Equity in a Monsanto Permitted Offering, (iii) pursuant to a bona fide third party tender offer or exchange offer, which is not induced directly or indirectly by Monsanto or any of its affiliates and which is not recommended by the Board of Directors: (a) pursuant to which Major A Stockholders tender or exchange shares equal to a majority of the total voting power of the Company or (b) of a number of shares of Class B Stock equal to the aggregate number of shares of Common Stock tendered by all Major A Stockholders in such third party tender offer or exchange offer, Monsanto is obligated to offer to the Company by written notice (the "Offer Notice"), such Class B Stock or Equity of the Company, which Offer Notice is required to specify, among other things, the number, amount and description of the Equity to be sold or otherwise transferred, the offer price, determined in accordance with the Investment Agreement (the "Offer Price") and any other proposed terms of the transfer. The Company may elect to purchase all, or in the case of a Monsanto Permitted Offering, any portion of, the offered securities at the Offer Price and upon the terms and conditions specified in the Offer Notice, provided, that, if in connection with a Monsanto Permitted Offering the Company elects to purchase less than all of the offered securities, the number of offered securities that the Company elects to purchase will be subject to a reduction (determined by the managing underwriter after consultation with a financial advisor selected by Monsanto) to the extent such managing underwriter (after consultation with Monsanto's financial advisor) determines that the amount of such offered securities that the Company has elected to purchase would so reduce the amount of Equity to be sold pursuant to the Monsanto Permitted Offering as to have a material adverse effect on such offering as contemplated by Monsanto (including the price at which Monsanto proposes to sell such securities). Upon any such reduction, the Company will be given the opportunity to make a further election to either purchase the amount of Equity as so reduced, to purchase all of such purchase offered securities or to withdraw the Company's earlier election. The Company may assign the rights described in the preceding paragraphs to any person. If the Company does not respond to the Offer Notice within the required period or elects not to purchase the offered securities, Monsanto or its United States subsidiary, as the case may be, will be free to complete the proposed transfer in accordance with the terms of the Investment Agreement. 20 23 EQUITY PURCHASE RIGHTS From the Closing Date, while Monsanto beneficially owns either 5% of the Class A Stock or 20% of the Class B Stock, if the Company proposes to issue for cash (subject to specified limitations and excluding certain issuances relating to, among other things, the Stock Plans, certain stock options, certain small offerings and the reissuance of Common Stock purchased by the Company after the Closing) any Equity ("Additional Equity"), the Company is required to give Monsanto at least ten days' prior written notice (the "Issuance Notice") of such intention, describing the type of Equity, the estimated price and the other terms upon which the Company proposes to issue the Additional Equity and the estimated date of such issuance. Monsanto will have no more than 20 days from the date the Issuance Notice is received to agree to purchase all or any portion of its Pro Rata Share (as hereinafter defined) of the Additional Equity by giving written notice to the Company of its desire to purchase the Additional Equity (the "Response Notice"). Pro Rata Share means the amount of Additional Equity necessary to permit Monsanto to maintain its Outstanding Interest (as hereinafter defined) immediately prior to the issuance of the Additional Equity. Outstanding Interest means the respective aggregate percentages of the outstanding shares of Class A Stock or Class B Stock beneficially owned from time to time by Monsanto and its United States subsidiaries, including as Class A Stock or Class B Stock any Equity convertible into or entitling the holder to acquire the same, as the case may be (except by virtue of the conversion of Class A Stock into Class B Stock), excluding in each case stock options or other rights to acquire Class A Stock or Class B Stock granted under Stock Plans or under any stock option plan or any stock-based incentive compensation plan adopted in the future and Monsanto's rights under the Investment Agreement with respect thereto. Monsanto will be entitled to purchase only the type or class of Equity issued or proposed to be issued which entitles Monsanto to a Pro Rata Share. From the Closing Date and for so long as Monsanto beneficially owns either 5% of the Class A Stock or 20% of the Class B Stock, with respect to the issuance of shares of Class A Stock or Class B Stock pursuant to the exercise of stock options or other rights to acquire Class A Stock or Class B Stock granted under the Stock Plans, or under any other stock option or stock-based incentive compensation plan that the Company may adopt in the future, Monsanto has the right, in respect of each fiscal year of the Company beginning with its fiscal year ending August 31, 1996, to purchase from the Company all or any portion of the number of shares of Class A Stock or Class B Stock which is necessary for Monsanto to purchase in order to maintain the same percentage of ownership of issued and outstanding shares of Class A Stock and Class B Stock that Monsanto owned as of the last day of such fiscal year without regard to shares of Class A Stock and Class B Stock issued pursuant to the exercise of stock options during that fiscal year (or in the case of the Company's fiscal year ending August 31, 1996, after the Closing Date). STANDSTILL Monsanto has agreed that prior to the tenth anniversary of the Closing Date: (i) none of Monsanto's affiliates except for its United States subsidiaries will beneficially own (subject to certain exceptions) any Equity, (ii) neither Monsanto nor its affiliates will acquire any beneficial ownership of any Equity except as permitted by the Investment Agreement and (iii) neither Monsanto nor any of its affiliates will acquire beneficial ownership of any additional Equity such that the Equity beneficially owned by Monsanto and its affiliates would represent in the aggregate more than (a) 10% of the total voting power of the Company, (b) the Class B Limitation Percentage (as hereinafter defined), or (c) 40% of the outstanding Common Stock of the Company (each such percentage, a "Percentage Limitation") unless (i) Monsanto receives from a Major A Stockholder an offer to purchase shares of Class A Stock beneficially owned by such Major A Stockholder pursuant to any rights granted by such Major A Stockholder to Monsanto in the Stockholders' Agreement, in which event Monsanto will be entitled to acquire beneficial ownership from such Major A Stockholder of such additional shares of Class A Stock, and (ii) no later than 60 days after acquisition of beneficial ownership of a majority of the total voting power of the Company in accordance with the terms of the Investment Agreement, Monsanto will be required to make a Permitted Acquisition Proposal (as hereinafter defined). 21 24 Class B Limitation Percentage means the percentage of Class B Stock determined by dividing (i) the number of shares of Class B Stock beneficially owned by Monsanto after: (a) the acquisition of the Newly Issued Shares, (b) the acquisition of Class B Stock pursuant to the Offer and (c) the acquisition of any additional Class B Stock acquired pursuant to the provisions described under "-- Additional Market Purchases of Class B Stock" by (ii) the total number of shares of Class B Stock outstanding on the first anniversary of the Closing Date. A Permitted Acquisition Proposal means an Acquisition Proposal which (i) is made to the Board of Directors and, unless and until approved as described in clause (ii), not made directly to the stockholders of the Company, (ii) is subject to the approval of a majority of the Independent Directors prior to the execution of any definitive agreement in connection with a transaction involving the Company or the making of any tender or other offer to purchase Common Stock from any stockholders of the Company who are not Major A Stockholders and (iii) would result, if successful, in the acquisition by Monsanto of beneficial ownership of not less than 100% of the outstanding capital stock of the Company at a price per share not less than the highest price at which Monsanto has acquired (or proposes to acquire in connection with the transaction) beneficial ownership of any Common Stock from a Major A Stockholder within the preceding two years and for cash and/or the same form of consideration if other than cash as paid or offered to be paid to the Major A Stockholders. An Acquisition Proposal means any tender offer or exchange offer or proposal with respect to a Business Combination or a sale of 10% or more of the outstanding capital stock of the Company. If Monsanto acquires a majority of the total voting power of the Company but not 100% of the outstanding capital stock of the Company, Monsanto is required to: (i) use all reasonable efforts to assure that at all times thereafter there will be three Independent Directors on the Board of Directors until such time as Monsanto has acquired 100% of the outstanding capital stock of the Company; and (ii) not acquire additional capital stock of the Company (other than from a Major A Stockholder) or implement any Acquisition Proposal with regard to the Company or enter into any commercial transaction with the Company (not previously in existence) involving a value to the Company as approved in good faith by a majority of the Independent Directors of less than $1,000,000 unless such offer, Acquisition Proposal or commercial transaction is approved by a majority of the Independent Directors. Neither Monsanto nor any of its affiliates will be deemed in violation of a Percentage Limitation if their beneficial ownership of Equity exceeds such Percentage Limitation solely as a result of: (i) an acquisition of Common Stock by the Company that, by reducing the number of securities outstanding, increases the proportionate amount of Common Stock beneficially owned by Monsanto and its affiliates in the aggregate to more than any of the Percentage Limitations or (ii) the exercise by third parties of the right to convert Class A Stock into Class B Stock, provided, that in each case such Percentage Limitation will be deemed violated if Monsanto or any of its affiliates thereafter becomes the beneficial owner of any additional Equity unless: (i) Monsanto is permitted to acquire such Common Stock as described in the previous paragraph or (ii) upon the consummation of the acquisition of such additional Equity Monsanto and its affiliates do not beneficially own in the aggregate more than the applicable respective Percentage Limitation. If the Company receives an Acquisition Proposal (including an indication of interest in making such a proposal) from a third party which has not been solicited from the Board of Directors and which, if consummated, would result in a Business Combination (an "Unsolicited Proposal"), the Company is required to notify Monsanto in writing (the "Company Notice") of the material terms of such Unsolicited Proposal, including without limitation any specified consideration. If: (A) the Board of Directors determines to enter into negotiations with regard to an Unsolicited Proposal and Monsanto shall not have advised the Company subsequent to the receipt of the Company Notice that it is not interested in submitting a Monsanto Proposal (as hereinafter defined), or (B) in the absence of receipt of an Unsolicited Proposal, the Company invites any third party to make an Acquisition Proposal which if consummated would lead to a Business Combination (the "Company Proposal"), then the Company is required to promptly invite Monsanto to submit a proposal (a "Monsanto Proposal") for a Business Combination which would result in the acquisition of an equal or greater amount of assets or shares of Common Stock than the Unsolicited Offer or the Company Proposal (which may include all or substantially all the assets or all of the Common Stock of the Company). Thereafter, if Monsanto shall have submitted a Monsanto Proposal, the Company is required to conduct the 22 25 solicitation and negotiation process as an open process available to all bidders, and provide Monsanto and the other interested parties with further information with regard to the terms of any offers received and the opportunity to submit further offers to the extent approved by a committee of directors consisting of an equal number of (A) non-employee or officer Major A Stockholder directors (if such directors agree to serve on such committee) including the Chairman of the Board and (B) Independent Directors; provided, however, that the Board of Directors is not required to conduct such process in a manner which, after advice of special independent outside counsel and its financial advisors, the Board determines is inconsistent with its fiduciary duties. If Monsanto does not submit a Monsanto Proposal or withdraws any such proposal and advises the Company that it is not interested in submitting a further proposal, the Company will conduct the negotiation and sale process in such manner as the Board of Directors determines. Solely for purposes of the provisions of the Investment Agreement described in the preceding paragraph, a Business Combination will include a transaction with respect to which the Company receives or solicits from a third party or enters into negotiations with respect to, a proposal (the "Limited Proposal") which (A) contemplates the acquisition of a portion of the Company's international seed business or the Company's North American seed business that would be equal to or greater in amount than 25% of the average revenues derived from such international seed business or North American seed business, respectively, in the Company's most recently completed two fiscal years, and (B) would not otherwise be described by the previous paragraph, provided, that Monsanto will not in such case be entitled to make a proposal which would involve the acquisition of a greater amount of assets or ownership interest than the Limited Proposal. Prior to the earlier of (a) the tenth anniversary of the Closing Date and (b) such date as Monsanto and its subsidiaries acquire a majority of the total voting power of the Company, in accordance with the terms of the Investment Agreement, neither Monsanto nor any of its affiliates may: (i) seek to have the Company waive, amend or modify any of the restrictions described above under the caption "-- Standstill," the Restated Certificate of Incorporation of the Company or the Bylaws of the Company (other than the amendment contemplated by the Investment Agreement), (ii) make any Acquisition Proposal or proposal with respect to a Business Combination, (iii) take any initiatives involving the Company that would otherwise require the Company to make a public announcement, or make any public comment or proposal with respect to any Acquisition Proposal, (iv) become a member of a Group (other than a group composed solely of Monsanto and any of its wholly owned direct or indirect subsidiaries), (v) solicit, or encourage any other person to solicit, proxies or become a participant or otherwise engage in a solicitation (as such terms are defined or used in Regulation 14A under the Exchange Act) in opposition to a recommendation of a majority of the directors of the Company with respect to any matter; seek to advise or influence any person (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the voting of any securities of the Company; or execute any written consent in lieu of a meeting of holders of securities of the Company or any class thereof, (vi) initiate, propose or otherwise solicit stockholders for the approval of one or more stockholder proposals with respect to the Company, as described in Rule 14a-8 under the Exchange Act, (vii) deposit any of its Equity into a voting trust, or subject any of such Equity to any agreement or arrangement other than the Stockholders' Agreement with respect to the voting of the issued and outstanding shares of Common Stock or any agreement having similar effect; or (viii) enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing ("Contacts") or otherwise seek to control or influence the Company other than Contacts with one or more Major A Stockholders if such Major A Stockholders have given Monsanto a notice that such Major A Stockholders desire to transfer their voting stock of the Company pursuant to the Stockholders' Agreement or has otherwise initiated such Contact, provided, however, that: (A) Monsanto may make any proposal which it is permitted to make pursuant to the provisions of the Investment Agreement as described above under the caption "-- Standstill," (B) if Monsanto shall, in good faith, determine to accept any offer from a Major A Stockholder to purchase shares of Class A Stock beneficially owned by such Major A Stockholder or to make a counter proposal to such Major A Stockholder as permitted by and in accordance with the terms of the Stockholders' Agreement, as a result of which Monsanto would acquire beneficial ownership of a majority of the total voting power of the Company, Monsanto will be permitted to make any Permitted Acquisition Proposal to the Board of Directors which it is permitted or required to make as described above under the caption "-- Standstill," and 23 26 (C) actions taken by any representative of Monsanto serving on the Board of Directors, acting solely in his or her capacity as such director, will not be deemed to violate the restrictions described in this paragraph. TERMINATION The Investment Agreement may be terminated at any time prior to the Closing Date: (i) by mutual consent of the Company and Monsanto, (ii) by either the Company or Monsanto by written notice to the other at any time after June 30, 1996 if any condition contained in the Investment Agreement is not waived or satisfied within such period; provided, however, that if any such condition has not been waived or satisfied within such period due to the willful act or omission of one of the parties, that party may not terminate the Investment Agreement, (iii) by either the Company or Monsanto if consummation of the issuance and sale by the Company of the Newly Issued Shares as contemplated by the Investment Agreement violates any final non-appealable order, decree or judgment of any court or governmental body having competent jurisdiction, or (iv) by either the Company or Monsanto if the other shall have failed to perform or comply in any material respect with any agreement or covenant contained in the Investment Agreement that is required to be performed or complied with by it on or before the Closing Date after the party seeking termination provides the other party of written notice of, and a reasonable opportunity to cure, such failure. The Investment Agreement, with the exception of the provisions described above under "-- Standstill," will terminate at any time after the Closing Date if Monsanto and its affiliates beneficially own less than (i) five percent of the total voting power of the Company and (ii) less than ten percent of the outstanding Common Stock of the Company. Monsanto is required to promptly notify the Company in writing at any time that it believes it no longer owns such amounts. CONFIDENTIALITY Except as required by law, each of the Company and Monsanto has agreed to hold, and cause its respective officers, employees, accountants, counsel, financial advisors and other representatives and affiliates to hold in confidence any nonpublic information obtained from the other pursuant to the letter agreement between Monsanto and the Company, dated May 16, 1995 or from time to time after the date of the Investment Agreement as may be disclosed to the Company, Monsanto or any Monsanto Nominees until such time as such information becomes publicly available (otherwise than through the wrongful act of any such person) and to use all reasonable efforts to cause such persons not to disclose such information to others without the prior written consent of the Company or Monsanto, as the case may be. In the event of the termination of the Investment Agreement for any reason, each party is required to promptly return or destroy all documents containing nonpublic information so obtained from the other or any of its subsidiaries and any copies made of such documents. CORPORATE POWERS Nothing in the Investment Agreement shall be construed to relieve the directors and officers of the Company or its subsidiaries from the performance of their respective fiduciary duties or limit the exercise of their powers in performance of their duties thereunder and the obligations of the Company therein shall be subject to such fiduciary duties. REGISTRATION RIGHTS AGREEMENT The Registration Rights Agreement requires that, subject to certain restrictions, at any time on or after the earlier of the third anniversary of the Closing Date and the date as of which Monsanto is entitled to make a Monsanto Permitted Transfer of shares of Class B Stock (the earlier of such dates being referred to as a "Registration Date"), upon the request of Monsanto, the Company will (i) file a registration statement with the Commission under the Securities Act with regard to the Registrable Securities (as defined below) held and designated by Monsanto, (ii) use its reasonable efforts to have such registration statement declared effective under the Securities Act and (iii) use its reasonable efforts to keep such registration statement continuously effective under the Securities Act for up to 90 days or until such earlier date as the securities subject to such registration statement are disposed of in the manner described in such registration statement. Monsanto may make up to two such requests for registration. 24 27 The Registration Rights Agreement also provides that if, at any time after the Registration Date, the Company proposes to register (including for this purpose a registration effected by the Company for stockholders of the Company other than Monsanto) securities under the Securities Act in connection with the public offering solely for cash on Form S-1, S-2 or S-3, the Company will promptly give Monsanto written notice of such registration. Upon the written request of Monsanto given within 20 days following the date of such notice, the Company will cause to be included in such registration statement and use its reasonable efforts to be registered under the Securities Act all the Registrable Securities that Monsanto has requested to be registered; provided, however, that such right of inclusion will not apply to any registration statement covering an underwritten offering of convertible debt securities. Monsanto may make up to five such requests for registration. If the underwriters' representative or agent advises the Company in writing that, in its opinion, the amount of Registrable Securities requested to be included in any registration would materially adversely affect such offering, or the timing thereof, then the Company will include in such registration, to the extent of the amount and class which the Company is so advised can be sold without such material adverse effect in such offering: first, all securities proposed to be sold by the Company for its own account, second, the Registrable Securities requested to be included in such registration by Monsanto pursuant to the Registration Rights Agreement and third, other securities being registered other than on behalf of the Company or Monsanto. For purposes of the Registration Rights Agreement, the term "Registrable Securities" will include: (i) the Class B Stock which Monsanto acquires pursuant to the Investment Agreement (including by way of the Offer and any open market purchases permitted by the Investment Agreement), (ii) any Class B Stock which Monsanto acquires upon exchange of Class A Stock acquired by Monsanto pursuant to the Investment Agreement and (iii) any shares of capital stock of the Company issued by the Company in respect of or in exchange for shares of Class A Stock or Class B Stock in connection with any stock dividend or distribution, stock split-up, recapitalization, recombination or exchange by the Company generally of shares of Class A Stock or Class B Stock; provided, however, that Registrable Securities will not include any securities acquired by Monsanto in violation of an express covenant of Monsanto contained in the Investment Agreement and, provided, further, that the Company will have no obligation under the Registration Rights Agreement to register any Registrable Securities if the Company delivers an opinion of counsel to the effect that the proposed sale or disposition of all of the Registrable Securities for which registration was requested does not require registration under the Securities Act for a sale or disposition in a single public sale, and offers to remove any and all legends restricting transfer from the certificates evidencing such Registrable Securities. The rights of Monsanto with respect to Registrable Securities may not be transferred by Monsanto except to a wholly owned direct or indirect subsidiary of Monsanto to whom Monsanto shall have transferred the Registrable Securities as permitted by the Investment Agreement. COLLABORATION AGREEMENT AND LICENSE AGREEMENTS Monsanto and the Company have also entered into the Collaboration Agreement, in which they have agreed to a long-term research and development collaboration for the development of new transgenic products in the field of agricultural biotechnology. A variety of crops is contemplated under the Collaboration Agreement, including corn, soybean and others. Monsanto and the Company have further entered into the License Agreements to commercialize genetically engineered corn hybrids incorporating Bacillus thuringiensis tolerance to lepidopteran insects such as the European Corn Borer (YIELDGARD(TM) Bt insect resistant corn), corn hybrids that are tolerant of glyphosate herbicide (ROUNDUP READY(TM) glyphosate-tolerant corn), and corn hybrids that are tolerant of glufosinate herbicides. The License Agreements define specific areas of commercial interest between Monsanto and the Company in Bt corn and in herbicide tolerant corn, while the Collaboration Agreement covers broadly all other fields of agricultural biotechnology in a spectrum of crops. The Collaboration Agreement and each of the License Agreements contemplates a worldwide territory. THE COLLABORATION AGREEMENT The Collaboration Agreement is the mechanism by which Monsanto and the Company will share their respective technologies and intellectual property rights, for research and in the development of new products in 25 28 the Field of agricultural biotechnology. The initial term of the Collaboration Agreement is 10 years, with any extensions to be renegotiated in good faith and includes a series of cash payments from Monsanto to the Company aggregating $19.5 million over the initial term of the Collaboration Agreement. An aim of the Collaboration is to facilitate collaborative projects between Monsanto scientists and those of the Company. This goal is to be achieved in part by allowing each company access to proprietary rights of the other, for use in collaborative undertakings. The companies cross license to each other their respective rights in licenses, sublicenses, and patents and patent applications, as well as those of any wholly owned affiliate, for research and development within the Field. The grants also include a cross license of rights in each company's non-patented technology, know-how, methods and biological materials, for research and development. However, no rights are granted either Monsanto or the Company in the proprietary varieties, inbreds or hybrids of the other. The Collaboration Agreement recognizes a distinction between products that result from an Independent Effort, and those that result from a Collaborative Effort. A Collaborative Effort is a project that Monsanto and the Company agree upon in writing for carrying out a defined collaborative research and development project in a selected subject area. An Independent Effort is any project of either Monsanto or the Company that is not a Collaborative Effort. In the case of projects of Independent Efforts, the companies grant each other the right to commercialize products that result from the Independent Effort of the other party, on a preferential royalty paying basis. The right to commercialize a product of the other's Independent Effort carries with it certain rights to sublicense affiliates, Business Associates and International Associates. Each of these entities are defined in the subject agreement, but include generally those entities that are controlled by or at least 50% owned by Monsanto or the Company, a third party with which the party has an extensive business relationship ("Business Associate") or a foreign-based entity that is licensed to sell or distribute branded products of Monsanto or the Company, respectively ("International Associate"). The Collaboration Agreement and each License Agreement provide that no sublicensee may further sublicense any rights thereunder. The grant of rights with respect to the commercialization of products developed under the agreement, whether one resulting from an Independent Effort or Collaborative Effort, is limited to the licensee party's "Crops." The Company's designated Crops include corn. Thus, Monsanto will have the right to commercialize products resulting from the Company's Independent Efforts in its designated Crops, and the Company will have the right to commercialize products resulting from Monsanto's Independent Efforts in its Crops. The Collaboration Agreement contemplates that Monsanto and the Company will enter into Collaborative Efforts in which the parties will define the scientific parameters of the collaboration in writing, and will designate one party as the Lead Collaborator. The Lead Collaborator will own legal title to the intellectual property that arises out of the collaboration, and will have the right to sublicense products to seed companies. Typically, the Lead Collaborator will be that party whose Crops are not included in the particular Collaborative Effort, but the parties may agree otherwise. In the case of any particular Collaborative Effort, the party that is not the Lead Collaborator has the right to apply to the Lead Collaborator for a preferred status regarding rights that result from a Collaborative Effort. Among other warranties, the parties warrant each other that they will not enter into a transaction which is in conflict with the rights granted under the agreement. Monsanto and the Company will typically divide the value realized from products resulting from any given Collaborative Effort and the parties may agree that the value should be divided in a different manner, including instances where the Collaborative Effort is also an Existing Project of either Monsanto or the Company. However, each party will receive a significant portion of value derived from such Collaborative Effort. An Existing Project is one in which either Monsanto or the Company has made substantive developmental progress as of the effective date of the Collaboration Agreement. If the Investment Agreement terminates prior to the Collaboration Agreement as the result of actions of either party that result in a government order that Monsanto must dispose of its securities or terminate the Collaboration Agreement, or if Monsanto terminates other than for cause, then the division of value for products of any Collaborative Effort under the Collaboration Agreement and under each of the License Agreements will be adjusted in favor of the non-terminating party, and against the terminating party. Any 26 29 change of control of the Company, other than one where Monsanto becomes the controlling party, will result in a similar shift in the ratios in Monsanto's favor; any change of control of Monsanto will result in a shift in the Company's favor. THE CORN BORER-PROTECTED CORN LICENSE AGREEMENT Monsanto and the Company have entered into the Corn Borer-Protected Corn License Agreement, in which the parties cross license their intellectual property rights and proprietary technology in the Field of "transgenic corn that exhibits tolerance to lepidopteran insects by expression of an insect control protein derived from Bacillus thuringiensis" ("Bt Corn"). As in the Collaboration Agreement, Monsanto and the Company cross license each other their respective rights in licenses, sublicenses, and patents and patent applications, as well as those of any wholly owned affiliate, to commercialize products within the Field. The grants also include certain cross license rights in each company's non-patented technology, know-how, methods, genes and genetic elements. Again, no rights are granted either Monsanto or the Company in the proprietary varieties, inbreds or hybrids of the other. The agreement terminates upon the expiration of the last to expire patent of either party within the Field. The Company receives the right to make, have made, use or sell products covered by the foregoing Monsanto proprietary rights, with the right to sublicense the Company's affiliates and International Associates. While Monsanto receives no right to sell directly any products covered by the Company's proprietary rights, Monsanto does receive the right to make, have made and to use such products, as well as the right to sublicense certain hybrid seed companies, and Monsanto's affiliates and International Associates, to make, have made, use and sell such products. Products will be marketed under a Monsanto trademark, with the proviso that the Monsanto trademark will be used in conjunction with Monsanto's and the Company's names being employed in equal prominence. Monsanto and the Company will share certain revenue realized through both Monsanto's and the Company's licensing of Bt Corn. THE GLYPHOSATE-PROTECTED CORN LICENSE AGREEMENT Monsanto and the Company have also entered into the Glyphosate-Protected Corn License Agreement, in which the parties agree to cross license their intellectual property rights and proprietary technology in the Field of "transgenic corn which exhibits Commercial Tolerance against Glyphosate by expression of one or more glyphosate tolerance protein(s)" ("Glyphosate tolerant corn"). Monsanto and the Company cross license each other their respective rights in licenses, sublicenses, and patents and patent applications, as well as those of any wholly owned affiliate, to commercialize products within the Field. The grants also include a cross license of rights in each company's non-patented technology, know-how, methods, genes and genetic elements. No rights are granted either Monsanto or the Company in the proprietary varieties, inbreds or hybrids of the other. The agreement terminates upon the expiration of the last to expire patent of either party within the Field. The Company receives the right to make, have made, use or sell products covered by the foregoing Monsanto proprietary rights, with the right to sublicense the Company's affiliates and International Associates. While Monsanto receives no right to sell directly any products covered by the Company's proprietary rights, Monsanto does receive the right to make, have made and to use such products, as well as the right to sublicense certain hybrid seed companies, and Monsanto's affiliates and International Associates, to make, have made, use and sell such products under the Gene Agreement program outlined below. Products will be marketed under a Monsanto trademark, ROUNDUP READY(TM) glyphosate tolerant corn. The ROUNDUP READY(TM) glyphosate tolerant corn will be marketed by Monsanto through a ROUNDUP READY(TM) Gene Agreement, in which hybrid seed companies are sublicensed to sell the product to farmers that pay a separate gene use fee. Monsanto and the Company will share all revenue realized through Monsanto's licensing of the ROUNDUP READY(TM) glyphosate tolerant corn. The Company will pay to Monsanto the Gene Agreement revenue that it realizes through its own sales, as well as those of its affiliates, International Associates and sublicensees. This revenue will also be shared between Monsanto and the Company. 27 30 THE CAMV PROMOTER LICENSE AGREEMENT Monsanto and the Company have entered into the CaMV Promoter License Agreement, in which Monsanto licenses to the Company its intellectual property rights relating to the CaMV promoter, as well as other proprietary technology, for use in the Field of "transgenic corn which exhibits protection against Glufosinate herbicide." (A CaMV promoter is a genetic element useful in permitting engineered corn plants to express a given trait, in this case, protection against glufosinate herbicide.) The rights conveyed to the Company under the CaMV agreement include Monsanto's licenses, sublicenses, and patents and patent applications, as well as those of any wholly-owned affiliate, to commercialize products for use in the Field of glufosinate tolerant corn. The grant also includes a license of rights to Monsanto's non-patented technology, know-how, methods, genes and genetic elements. No rights are granted either Monsanto or the Company in the proprietary varieties, inbreds or hybrids of the other. The agreement terminates upon the expiration of the last to expire patent of either party within the Field. The Company receives the right to make, have made, use or sell products covered by the foregoing Monsanto proprietary rights, with the right to sublicense the Company's affiliates and International Associates, as well as the right to sublicense certain hybrid seed companies. Monsanto receives no reciprocal licensing rights from the Company under the CaMV agreement. Products will be marketed and licensed by the Company through a "Grower Agreement" program. Under the Grower Agreement, hybrid seed companies are licensed to sell the product to farmers that pay a separate grower use fee. Monsanto and the Company will share all Grower Agreement revenue realized through the Company's licensing of the glufosinate tolerant corn. THE STOCKHOLDERS' AGREEMENTS On January 31, 1996, the Major A Stockholders and Monsanto entered into the Stockholders' Agreement. The following summary of the Stockholders' Agreement does not purport to be complete and is qualified in its entirety by reference to such agreement. The Major A Stockholders hold an aggregate of 445,275 shares of Class A Stock (representing approximately 52% of the outstanding Class A Stock after the issuance of the Newly Issued Class A Shares and without regard to conversions of Class A Stock to Class B Stock, including conversions to effect tenders pursuant to the Offer). The Stockholders' Agreement provides that each Major A Stockholder will use its best efforts to attend each stockholder meeting for purposes of establishing a quorum and will vote all of its shares of Class A Stock or other voting common or voting preferred stock of the Company, any option, warrant or other right to acquire Class A Stock or such other voting stock or any security exchangeable for or convertible into Class A Stock or such other voting stock (collectively, "Company Voting Stock") in favor of any Monsanto Nominee recommended by the Board of Directors of the Company, provided that such Monsanto Nominee is reasonably satisfactory to the Company. In addition, the Stockholders' Agreement provides that each Major A Stockholder will not, without the consent of Monsanto, initiate any action that would result in the amendment of the provisions of the Company's By-Laws described under "Section 11. Investment Agreement -- Amendment of Bylaws of the Company," and that each Major A Stockholder will vote its Company Voting Stock in favor of any proposed amendment to the Company's certificate of incorporation to increase the Company's authorized capital stock, which amendment is required in order for the Company to comply with the provisions of the Investment Agreement described under "Section 11. Investment Agreement -- Equity Purchase Rights." Monsanto has agreed to indemnify the Major A Stockholders and related persons from and against all claims, losses and liabilities which arise from or in connection with actions or inactions in the performance of the obligations of the Major A Stockholders under the provisions described in this paragraph. The Stockholders' Agreement provides that except for Permitted Transfers (as defined below) (i) no Major A Stockholder may transfer any interest in its Company Voting Stock except as provided by the Stockholders' Agreement, (ii) with limited exceptions, no Major A Stockholder will convert any Class A Stock to Class B Stock until such time as such Major A Stockholder has entered into a binding agreement to sell or convey such Class B Stock to a third party and (iii) no Major A Stockholder will tender any of its 28 31 Company Voting Stock in the Offer. As defined in the Stockholders' Agreement, "Permitted Transfers" includes (i) certain pledges of Company Voting Stock, (ii) a transfer of Company Voting Stock to other Major A Stockholders or other spouses, descendants or certain other trusts or other entities, (iii) any exchange, conversion or transfer of Company Voting Stock in connection with a Business Combination other than any agreement to transfer prior to the Company's execution of an agreement with respect to such Business Combination or (iv) any tender or exchange in accordance with the terms of a tender or exchange offer which, if consummated, would result in the beneficial ownership by a person or Group of all of the shares of Class A Stock and all of the shares of Class B Stock and as to which the Company has previously published its position or recommendation with respect to such tender or exchange offer pursuant to applicable rules under the Exchange Act. If any Major A Stockholder desires to transfer any interest in its Company Voting Stock (other than a Permitted Transfer), such Major A Stockholder will make a written offer to Monsanto (a "Shareholder Offer") to purchase such Company Voting Stock and Monsanto will have the option to purchase all but not less than all of such Company Voting Stock for the price and upon the terms upon which such Major A Stockholder proposes to transfer such Company Voting Stock. If Monsanto rejects the Shareholder Offer, Monsanto has the exclusive right for a period of time to propose alternative terms for such purchase. If Monsanto does not accept the Shareholder Offer and Monsanto and such Major A Stockholder have not otherwise reached an agreement regarding such purchase within such time period, then such Major A Stockholder may offer and sell such Company Voting Stock to any person or entity on terms, considered as a whole, that are at least as favorable to such Major A Stockholder as either those set forth in the Shareholder Offer or those offered by Monsanto in any counter offer. In the event of any involuntary transfer of any Company Voting Stock (other than a Permitted Transfer), Monsanto will have an exclusive option to purchase all but not less than all of the Company Voting Stock in cash at a purchase price (i) based on a thirty day average of the daily closing prices for the Class B Stock on the Nasdaq National Market or (ii) if the Company Voting Stock is not Class A Stock or if the Class B Stock is not publicly traded, based on the fair market value thereof determined by an investment banking firm. The Stockholders' Agreement will be effective until the earliest of (i) the termination of the Collaboration Agreement (except if it is terminated by reason of a material breach thereof by the Company or by reason of a governmental decree caused by voluntary action of the Company), (ii) Monsanto owning less than 5% of the outstanding Class A Stock or less than 50% of the highest percent of the outstanding Common Stock beneficially owned by Monsanto after completion of the Offer, the Closing and any purchases by Monsanto in the market described under "Section 11. Investment Agreement -- Additional Market Purchases of Class B Stock," (iii) the termination of the Investment Agreement and (iv) the eleventh anniversary of the Closing or any subsequent anniversary of the Closing upon notice by Monsanto or a majority in interest of the Company Voting Stock by persons who are then Major A Stockholders. Except as otherwise described in this Offer to Purchase, the Purchaser does not have any present plans or proposals which relate to or would result in an extraordinary corporate transaction, such as a merger, reorganization, liquidation, relocation of any operations of the Company or sale or transfer of a material amount of assets, involving the Company or any of its subsidiaries, or any changes in the Company's present capitalization or any other change in the Company's corporate structure or business or the composition of its Board of Directors or management. Except as described in this Offer to Purchase, it is expected that, after the Offer and the Investment Agreement and related transactions are consummated, the business and operations of the Company will be continued by the Company. 12. Source and Amount of Funds. The Purchaser estimates that the total amount of funds required to purchase the outstanding Issue Shares and Offer Shares and to pay related fees and expenses will be approximately $160 million. The Purchaser will obtain these funds from working capital, by borrowing on an unsecured basis, by the issuance of commercial paper, from other sources which might be available to Purchaser, or under some combination of the foregoing. 13. Certain Conditions of the Offer. Notwithstanding any other term of the Offer or the Investment Agreement, the Purchaser shall not be required to accept for payment or, subject to any applicable rules and 29 32 regulations of the Commission, including Rule 14e-1(c) under the Exchange Act (relating to Purchaser's obligation to pay for or return tendered Shares after the termination or withdrawal of the Offer), to pay for any Shares tendered pursuant to the Offer and may terminate or amend the Offer, with the consent of the Company or if, at any time on or after the date of the Investment Agreement and before the acceptance of such Shares for payment or the payment therefor, any of the following conditions exists (the "Offer Conditions"): (a) there shall be threatened or pending by any Governmental Authority any suit, action or proceeding, or there shall be pending by any other person any suit, action or proceeding, which has a substantial likelihood of success, (i) challenging the acquisition by the Purchaser of any shares of Common Stock of the Company, seeking to restrain or prohibit the making or consummation of the Offer or the share issuances as contemplated by the Investment Agreement or the performance of any of the other transactions contemplated by the Investment Agreement or the Ancillary Agreements, or seeking to obtain from the Company or the Purchaser any damages that are material in relation to the Company and its subsidiaries taken as a whole, (ii) seeking to prohibit or limit the ownership or operation by the Company, the Purchaser or any of their respective subsidiaries of the business or assets of the Company and its subsidiaries, taken as a whole, or the Purchaser and its subsidiaries, taken as a whole, or to compel the Company to dispose of or hold separate any material portion of the business or assets of the Company and its subsidiaries, taken as a whole, or the Purchaser and its subsidiaries, taken as a whole, as a result of the Offer or any of the other transactions contemplated by Investment Agreement or the Ancillary Agreements, (iii) seeking to impose limitations on the ability of the Purchaser to acquire or hold, or exercise full rights of ownership of, any shares of common stock of the Company to be accepted for payment pursuant to the Offer or any Newly Issued Shares including, without limitation, the right to vote such Newly Issued Shares on all matters properly presented to the stockholders of the Company or (iv) seeking to prohibit the Purchaser or any of its subsidiaries from exercising any of their respective material rights under the Investment Agreement or any Ancillary Agreement (for purposes of the Investment Agreement, a "Governmental Authority" means any governmental, quasi-governmental, judicial, self-regulatory or regulatory agency or entity or subdivision thereof with jurisdiction over the Company or the Purchaser or any of their subsidiaries or any of the transactions contemplated by the Investment Agreement); (b) there shall be any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced, promulgated or applicable to the Offer or the share issuances, or any other action shall be taken by any Governmental Authority or court, that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (iv) of paragraph (a) above; (c) there shall have occurred any event which constitutes a material adverse effect, or the occurrence or existence of facts or circumstances reasonably expected to result in a material adverse effect, on the business, assets, results of operations, properties, financial or operating condition of the Company and its subsidiaries taken as a whole (without including economic or other matters affecting business or the seed industry generally) or the ability of the Company (and, to the extent applicable, its subsidiaries) to perform its (or their) obligations under the Investment Agreement or consummate the transactions contemplated thereby or by the Ancillary Agreements; (d) any of the representations and warranties of the Company set forth in the Investment Agreement that are qualified as to materiality shall not be true and correct and any such representations and warranties that are not so qualified shall not be true and correct in any material respect, in each case as of the date of the Investment Agreement and as of the Expiration Date as though made on and as of the Expiration Date (or any other date as of which such representations and warranties expressly speak); (e) the Company shall have failed to furnish to the Purchaser an opinion of John H. Witmer, Jr., Senior Vice President and General Counsel of the Company, in the form attached to the Investment Agreement, dated as of the date of the Closing if it occurs on or before the Expiration Date, or if the Closing Date shall not have occurred, speaking in future tense as relates to issuance of the Newly Issued Shares; 30 33 (f) during the period from the date of the Investment Agreement until the Expiration Date, neither the Company nor any subsidiary shall have sold or otherwise disposed of (or authorized, committed or agreed to sell or otherwise dispose of), in a single transaction or in a series of transactions, excluding sales of inventory or other assets in the normal course of business, any business or assets relating to the Primary Business of the Company that constitute more than five percent of the total consolidated assets of the Company as shown on the Company's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made, whether such sale or disposition be by merger or consolidation or the sale of stock or assets or otherwise; (g) there shall have occurred (i) any general suspension or trading in, or limitation on prices for, securities (excluding any coordinated trading halt triggered solely as a result of a specified decrease in a market index), (ii) any extraordinary change in the financial markets in the United States, (iii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iv) any limitation (whether or not mandatory) by any Governmental Authority on, or other event that materially affects, the extension of credit by banks or other lending institutions, (v) a commencement of a war directly involving the armed forces of the United States, or (vi) in case of any of the foregoing existing on the date of the Investment Agreement, material acceleration or worsening thereof; (h) the Board of Directors of the Company shall have failed to give, withdrawn or modified in a manner adverse to the Purchaser its approval or recommendation of the Offer or the other transactions contemplated by the Investment Agreement or the Ancillary Agreements; (i) the Amended Bylaws contemplated in the Investment Agreement shall not be authorized, approved and effected; or (j) the Investment Agreement shall have terminated in accordance with its terms; which, in the reasonable good faith judgment of the Purchaser, and regardless of the circumstances giving rise to any such condition (other than any action or inaction by the Purchaser or any of its subsidiaries which constitutes a breach of the Investment Agreement), makes it inadvisable to proceed with such acceptance for payment or payment. The foregoing conditions are for the sole benefit of the Purchaser and may be asserted by the Purchaser regardless of the circumstances giving rise to any such condition or may be waived by the Purchaser in whole or in part at any time and from time to time in its sole discretion. The failure by the Purchaser or any other subsidiary of the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. Any determination (which shall be made in good faith by the Purchaser) with respect to the foregoing conditions shall be final and binding on the parties. 14. Certain Legal Matters. General. Except as otherwise disclosed herein, based upon an examination of publicly available filings with respect to the Company and the Purchaser and discussions between representatives of the Purchaser and the Company, the Purchaser is not aware of (i) any licenses or other regulatory permits which appear to be material to the business of the Company and which might be adversely affected by the acquisition of Shares by the Purchaser pursuant to the Offer or (ii) of any approval or other action by any governmental, administrative or regulatory agency or authority which would be required for the acquisition or ownership of Shares by the Purchaser as contemplated herein. Should any such approval or other action be required, it is currently contemplated that such approval or action would be sought except as otherwise described below under "State Takeover Laws". While the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to obtain any such approval or other action might not 31 34 result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment or pay for any Shares tendered. See Section 13 for certain conditions of the Offer. Antitrust Issues. The Antitrust Division of the United States Justice Department ("Antitrust Division") and the Federal Trade Commission ("FTC") frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of an interest in the Company. At any time before or after the Purchaser's purchase of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or seeking divestiture of Shares acquired by the Purchaser. The Purchaser's obligations under the Offer to accept Shares for payment are subject to the condition, among others, that there shall not be threatened or pending by any Governmental Authority certain suits, actions or proceedings. See Section 13 of this Offer to Purchase for certain conditions to the Offer. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if a challenge is made, what the result will be. State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. However, Section 203 of Delaware Law (which generally prevents an "interested stockholder" (generally a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock, or an affiliate or associate thereof) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the date such person became an interested stockholder) does not apply to the Company because the Company does not have a class of voting stock listed on a national securities exchange, authorized for quotation on Nasdaq stock market or held of record by more than 2,000 stockholders. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. The Company conducts business in a number of states throughout the United States, some of which have enacted takeover laws. The Purchaser does not know whether any of these laws will, by their terms, apply to the Offer and has not complied with any such laws. Should any person seek to apply any state takeover law, Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer, and an appropriate court does not determine that it is inapplicable or invalid as applied to the offer, Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer. In such case, Purchaser may not be obligated to accept for payment any Shares tendered. See "Section 13. Certain Conditions of the Offer". Other Laws and Legal Matters. According to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1995, the Company conducts operations in a number of foreign countries. In the event that one or more foreign laws is deemed to be applicable to the Offer, the Purchaser and/or Company may be required to file certain information or to receive the approval of the relevant foreign authorities. Such government may also attempt to impose additional conditions on the Company's operations conducted in such 32 35 countries. After completion of the Offer, the Purchaser will seek further information regarding the applicability of any such laws and presently intends to take such actions as they may require. 15. Fees and Expenses. Robertson, Stephens & Company LLC is acting as Dealer Manager for the Offer and has provided certain financial advisory services to the Purchaser in connection therewith. As compensation for such services, the Purchaser has agreed to pay to the Dealer Manager a transaction fee equal to five percent (5%) of the consideration paid by the Purchaser (including the purchase of the Issue Shares and the Shares purchased in the Offer), subject to a minimum fee of $250,000 and a maximum fee of $1,250,000. The Purchaser also has agreed to pay to the Dealer Manager, for acting as Dealer Manager in connection with the Offer, a fee of $250,000, which fee shall be credited against the maximum transaction fee otherwise payable in connection with the Offer and the Investment Agreement. The Purchaser has agreed to reimburse the Dealer Manager for its reasonable out-of-pocket expenses, including the fees and expenses of its counsel, in connection with the Offer, and has agreed to indemnify the Dealer Manager against certain liabilities and expenses in connection with the Offer, including liabilities under the federal securities laws. The Purchaser has also retained Georgeson & Company Inc. to act as the Information Agent in connection with the offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telegraph and personal interviews and may request brokers, dealers and other nominee stockholders to forward the Offer materials to beneficial owners of Shares. The Information Agent will receive reasonable and customary compensation for such services, plus reimbursement of out-of-pocket expenses. The Purchaser will pay the Depositary reasonable and customary compensation for its services in connection with the Offer, plus reimbursement for out-of-pocket expenses, and will indemnify the Depositary against certain liabilities and expenses in connection therewith, including liabilities under the federal securities laws. Brokers, dealers, commercial banks and trust companies will be reimbursed by the Purchaser for customary mailing and handling expenses incurred by them in forwarding material to their customers. 16. Miscellaneous. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. However, the Purchaser may, in its sole discretion, take such action as it may deem necessary to make the Offer in any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction. In any jurisdiction the securities laws or blue sky laws of which require the Offer to be made by a licensed broker or dealer, the Offer shall be made on behalf of the Purchaser by the Dealer Manager or brokers or dealers licensed under the laws of such jurisdiction. Pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, the Purchaser has filed with the Commission the Schedule 14D-1 together with exhibits, furnishing additional information with respect to the Offer and may file amendments thereto. Pursuant to Rule 14d-9 promulgated under the Exchange Act, the Company has filed with the Commission the Schedule 14D-9 with respect to the Offer, and may file amendments thereto. Such statements, including exhibits and any amendments thereto, which furnish certain additional information with respect to the Offer, may be inspected at, and copies may be obtained from, the same places and in the same manner as set forth under "Available Information" in "Section 8. Certain Information Concerning the Company" (except that they will not be available at the regional offices of the Commission). No person has been authorized to give any information or make any representation on behalf of the Purchaser not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized. Monsanto Company 33 36 SCHEDULE A DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER The following table sets forth the name, current business address, present principal occupation or employment, and material occupations, positions, offices or employments and business addresses thereof for the past five years of each director and executive officer of Monsanto Company. Except for Jacobus F. M. Peters, who is a citizen of The Netherlands, Pierre Hochuli, who is a citizen of Switzerland, and Hendrik A. Verfaillie, who is a citizen of Belgium, each such person is a citizen of the United States.
Present Principal Occupation or Employment; Material Positions Held Name, Age, and During Past Five Years and Current Business Address Business Addresses Thereof - ----------------------------------- -------------------------------------------------------- Robert B. Shapiro (57)............. Chairman, President and Chief Executive Officer of Monsanto Company Monsanto Company since 1995. President, Chief Operating 800 North Lindbergh Blvd. Officer and Director of Monsanto Company from 1993 to St. Louis, Missouri 63167 1995. Executive Vice President and Advisory Director, Monsanto Company and President, The Agricultural Group, from 1990 to 1993. Director of Citicorp, New York, New York; and Silicon Graphics, Inc., Mountainview, California. Joan T. Bok (66)................... Director of Monsanto Company since 1987. Chairman of the New England Electric System Board of New England Electric System since 1984. 25 Research Drive Director of Avery Dennison Corporation, Pasadena, Westborough, Massachusetts 01582 California; John Hancock Mutual Life Insurance Company, Boston, Massachusetts; New England Electric System and its subsidiaries Massachusetts Electric Company, The Narragansett Electric Company, and New England Power Company. Robert M. Heyssel (67)............. Director of Monsanto Company since 1988. Consultant and c/o Monsanto Company President Emeritus of The Johns Hopkins Health System 800 North Lindbergh Blvd. since 1992. President and Chief Executive Officer of The St. Louis, Missouri 63167 Johns Hopkins Health System and The Johns Hopkins Hospital, 600 North Wolfe Street, Baltimore, Maryland 21287, from 1972 to 1992. Director of Signet Banking Corporation, Richmond, Virginia. Gwendolyn S. King (55)............. Director of Monsanto Company since 1993. Senior Vice PECO Energy Company President, Corporate and Public Affairs, of PECO Energy 2301 Market Street Company since 1992. Commissioner, Social Security Philadelphia, Pennsylvania Administration, 6401 Security Blvd., Baltimore, Maryland 19101-8699 21235, from 1989 to 1992. Director of Adwin Equipment Co., Lester, Pennsylvania; Adwin Realty Co., Lester, Pennsylvania; Eastern Pennsylvania Development Corp., Lester, Pennsylvania; and Lockheed Martin Corp., Bethesda, Maryland. Philip Leder (61).................. Director of Monsanto Company since 1990. Chairman, Harvard Medical School Department of Genetics, and John Emory Andrus Professor 200 Longwood Avenue of Genetics at Harvard Medical School since 1980. Senior Boston, Massachusetts 02115 Investigator, Howard Hughes Medical Institute, 300 Longwood Avenue, Boston, Massachusetts 02115, since 1986. Director of Genome Therapeutics Corporation, Waltham, Massachusetts.
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Present Principal Occupation or Employment; Material Positions Held Name, Age, and During Past Five Years and Current Business Address Business Addresses Thereof - ----------------------------------- -------------------------------------------------------- Howard M. Love (65)................ Director of Monsanto Company since 1977. Retired Chief One Mellon Bank Center Executive Officer, National Intergroup, Inc. Chief 500 Grant Street, Suite 2108 Executive Officer of National Intergroup, Inc., 500 Pittsburgh, Pennsylvania 15219 Grant Street, Pittsburgh, Pennsylvania 15219, from 1981 to 1991 and Chairman from 1981 to 1990. Honorary Chairman of National Steel Corporation, formerly a subsidiary of National Intergroup, Inc., since 1990. Director of Communications Satellite Corporation, Bethesda, Maryland. Richard J. Mahoney (62)............ Director of Monasanto Company since 1979. Retired c/o Monsanto Company Chairman and Chief Executive Officer of Monsanto 800 North Lindbergh Blvd. Company. Chairman of Monsanto Company from 1986 to 1995 St. Louis, Missouri 63167 and Chief Executive Officer from 1983 to 1995. Director of Metropolitan Life Insurance Company, New York, New York, and Union Pacific Corporation, Bethlehem, Pennsylvania. Frank A. Metz, Jr. (62)............ Director of Monsanto Company since 1990. Retired Senior c/o Monsanto Company Vice President, Finance and Planning, and Chief 800 North Lindbergh Blvd. Financial Officer of International Business Machines St. Louis, Missouri 63167 Corporation. Senior Vice President, Finance and Planning, and Chief Financial Officer of International Business Machines Corporation, Old Orchard Road, Armonk, New York 10504-1783, from 1986 to 1993, Director, 1991 to 1993. Director of Allegheny Power Systems, Inc., New York, New York, and Norrell Corporation, Atlanta, Georgia. Buck Mickel (70)................... Director of Monsanto Company since 1975. Chairman and Fluor Daniel Corporation Chief Executive Officer of R.S.I. Holdings, Inc., 245 Daniel Building, Main Street East Broad Street, Greenville, South Carolina 29606, Greenville, South Carolina 29602 since 1989. Director of Delta Woodside Industries, Greenville, South Carolina; Duke Power Company, Charlotte, North Carolina; Emergent Group, Greenville, South Carolina; Fluor Corporation, Irvine, California; Insignia Financial Group, Greenville, South Carolina; The Liberty Corporation, Greenville, South Carolina; and NationsBank Corporation, Charlotte, North Carolina. Jacobus F. M. Peters (64).......... Director of Monsanto Company since 1993. Retired c/o Monsanto Company Chairman of the Executive Board and Chief Executive 800 North Lindbergh Blvd. Officer of AEGON N.V. Chairman of the Executive Board St. Louis, Missouri 63167 and Chief Executive Officer of AEGON N.V., 50, Mariahoeveplein, 2501 CE The Hague, The Netherlands, from 1984 to 1993. Member of the Supervisory Board of AEGON, N.V.; DAF Trucks, N.V.; IBM International Centre for Asset Management N.V.; and Randstad Holding N.V., all located in The Netherlands. Nicholas L. Reding (61)............ Vice Chairman of the Board of Monsanto Company since Monsanto Company 1993. Executive Vice President, Environment, Safety, 800 North Lindbergh Blvd. Health and Manufacturing, of Monsanto Company from 1990 St. Louis, Missouri 63167 to 1992. Advisory Director from 1986 to 1992. Director of CPI Corp., St. Louis, Missouri; Meredith Corporation, Des Moines, Iowa; Multifoods Corporation, Minneapolis, Minnesota; and The Keystone Center, Keystone, Colorado.
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Present Principal Occupation or Employment; Material Positions Held Name, Age, and During Past Five Years and Current Business Address Business Addresses Thereof - ----------------------------------- -------------------------------------------------------- John S. Reed (57).................. Director of Monsanto Company since 1985. Chairman and Citibank N.A. Chief Executive Officer of Citicorp and Citibank, N.A. 153 East 53rd Street since 1984. Director of Phillip Morris Companies, Inc., Citicorp Center, 23rd Floor New York, New York. New York, New York 10022 William D. Ruckelshaus (63)........ Director of Monsanto Company since 1985. Chairman of 1201 Third Ave., Browning-Ferris Industries, Inc., 757 North Eldridge, 40th Floor Houston, Texas 77079, since 1995. Chairman and Chief Seattle, Washington 98101 Executive Officer of Browning-Ferris Industries, Inc. from 1988 to 1995. Director of Cummins Engine Co., Inc., Columbus, Indiana; Nordstrom, Inc., Seattle, Washington; and Weyerhaeuser Company, Tacoma, Washington. John B. Slaughter (61)............. Director of Monsanto Company since 1983. President, Occidental College Occidental College since 1988. Director of Atlantic 1600 Campus Road Richfield Company, Los Angeles, California; Avery Los Angeles, California 90041 Dennison Corporation, Pasadena, California; International Business Machines Corporation, Armonk, New York; and Northrop Grumman Corporation, Los Angeles, California. Richard U. De Schutter (55)........ Chairman and Chief Executive Officer, G. D. Searle & Co. G. D. Searle & Co. (a subsidiary of Monsanto Company) and Advisory 5200 Old Orchard Road Director, Monsanto Company since 1995. President and Skokie, Illinois 60077 Chief Operating Officer of G. D. Searle & Co. from 1993 to 1995. President, G. D. Searle & Co., from 1991 to 1993. Chairman, International Operations, of G. D. Searle & Co. from 1989 to 1991. Steven L. Engelberg (53)........... Senior Vice President of Mosanto since 1996. Vice Monsanto Company President, Worldwide Government Affairs, of Monsanto 700 14th Street, NW, Company from 1994 to 1996. Chief of Staff of Office of Suite 1100 the United States Trade Representative, 600 17th Street, Washington, DC 20005 NW, Washington, DC 20506, from January, 1993 to May, 1993. Partner in Charge of Keck, Mahin & Cate Washington, D.C. office, 1201 New York Avenue, NW, Washington DC 20005-3919 from 1986 to 1993. Pierre Hochuli (48)................ Vice President of Monsanto Company and Chairman, Monsanto Europe S. A. Monsanto Europe-Africa, 1996. Vice President of Monsanto Avenue de Tervuren 270-272 Company and President, Growth Enterprises from 1995 to P. O. Box 1996. Vice President, Corporate Planning, of Monsanto 1 B-1150 Company from 1993 to 1995. Group Vice President and Brussels, Belgium General Manager, New Products Division, The Agricultural Group of Monsanto Company, 1993. Vice President and General Manager, New Products Division, The Agricultural Group of Monsanto Company, 1992; Vice President, Finance and Planning, The Agricultural Group of Monsanto Company, 1991. Regional Director, Europe/Africa/Middle East, Monsanto Europe, S.A., from 1985 to 1991.
S-3 39
Present Principal Occupation or Employment; Material Positions Held Name, Age, and During Past Five Years and Current Business Address Business Addresses Thereof - ----------------------------------- -------------------------------------------------------- Robert B. Hoffman (59)............. Senior Vice President and Chief Financial Officer and Monsanto Company Advisory Director of Monsanto Company since 1994. Vice 800 North Lindbergh Blvd. President of FMC Corporation, 200 East Randolph Drive, St. Louis, Missouri 631672 Chicago, Illinois 60601, from 1990 to 1994. Director of Harnishfeger Industries, Inc., Milwaukee, Wisconsin and all mutual funds of The Kemper Group, Chicago, Illinois. Teresa E. McCaslin (46)............ Vice President, Human Resources of Monsanto Company Monsanto Company since 1994. Vice President, Human Resources of Avery 800 North Lindbergh Blvd. Dennison Corporation, 150 North Orange Grove Blvd., St. Louis, Missouri 63167 Pasadena, California 91103, from 1989 to 1994. Philip Needleman (57).............. Senior Vice President, Research and Development and Monsanto Company Advisory Director of Monsanto Company and President, 800 North Lindbergh Blvd. Searle Research and Development of G. D. Searle & Co. St. Louis, Missouri 63167 since 1993. Vice President, Research and Development and Advisory Director of Monsanto Company and President, Research and Development of G. D. Searle & Co., 1992. Vice President, Research and Development and Advisory Director of Monsanto Company, from 1991 to 1992. Vice President, Research and Development, of Monsanto Company from 1989 to 1991. Robert G. Potter (56).............. Executive Vice President and Advisory Director of Monsanto Company Monsanto Company since 1995. Executive Vice President 800 North Lindbergh Blvd. and Advisory Director of Monsanto Company and President, St. Louis, Missouri 63167 The Chemical Group, from 1990 to 1995. Director of Cray Research, Inc., Eagan, Minnesota and Stepan Company, Northfield, Illinois. Robert W. Reynolds (52)............ Vice President, International Operations and Development Monsanto Company of Monsanto Company since 1994. Vice President and 800 North Lindbergh Blvd. Managing Director, Latin America World Area, of Monsanto St. Louis, Missouri 63167 Company, from 1992 to 1994. Vice President and General Manager, Crop Protection Products Division, Monsanto Agricultural Company, from 1990 to 1992. Hendrik A. Verfaillie (50)......... Executive Vice President and Advisory Director of Monsanto Company Monsanto Company since 1995. Vice President and Advisory 800 North Lindbergh Blvd. Director of Monsanto Company and President, The St. Louis, Missouri 63167 Agricultural Group, from 1993 to 1995. Vice President and General Manager, Roundup Division, The Agricultural Group, of Monsanto Company from 1990 to 1993. Virginia V. Weldon (60)............ Senior Vice President, Public Policy and Advisory Monsanto Company Director of Monsanto Company since 1993. Vice President, 800 North Lindbergh Blvd. Public Policy and Advisory Director of Monsanto Company St. Louis, Missouri 63167 from 1990 to 1993. Director of General American Life Insurance Company.
S-4 40 Facsimiles of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, certificates evidencing Shares and any other required documents should be sent or delivered by each stockholder or such stockholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below. THE DEPOSITARY FOR THE OFFER IS: HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Overnight Courier: By Hand: Wall Street Station Receive Window P.O. Box 1010 77 Water Street, 4th Floor 77 Water Street, 5th Floor New York, NY 10268-1010 New York, NY 10005 New York, NY 10005 By Facsimile Transmission: (212) 701-7636 (212) 701-7637 Confirm by Telephone: (212) 701-7663
Questions or requests for assistance may be directed to the Dealer Manager or Information Agent at their respective addresses and telephone numbers listed below. Additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Dealer Manager or Information Agent. A stockholder may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer. The Information Agent for the Offer is: (LOGO)Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect (212) 440-9800 CALL TOLL FREE 1-800-223-2064 The Dealer Manager for the Offer is: ROBERTSON, STEPHENS & COMPANY 555 California Street San Francisco, California 94104 (800) 270-5829 EX-99.A.2 3 LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL TO TENDER SHARES OF CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION AT $71.00 NET PER SHARE PURSUANT TO THE OFFER TO PURCHASE DATED FEBRUARY 7, 1996 BY MONSANTO COMPANY THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MARCH 6, 1996, UNLESS THE OFFER IS EXTENDED. THE DEPOSITARY FOR THE OFFER IS: HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Overnight Courier: By Hand: Wall Street Station Receive Window P.O. Box 1010 77 Water Street, 4th Floor 77 Water Street, 5th Floor New York, NY 10268-1010 New York, NY 10005 New York, NY 10005 By Facsimile Transmission: (212) 701-7636 (212) 701-7637 Confirm by Telephone: (212) 701-7663
------------------ DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by stockholders either if certificates evidencing Shares (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined in "Section 4. Procedures for Tendering Shares" in the Offer to Purchase) is utilized, if delivery of Shares is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (each a "Book-Entry Transfer Facility" and collectively, the "Book-Entry Transfer Facilities") pursuant to the book-entry transfer procedures described in "Section 4. Procedures for Tendering Shares" in the Offer to Purchase. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Stockholders whose certificates evidencing Shares ("Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in "Section 1. Terms of the Offer" in the Offer to Purchase) or who cannot complete the procedure for delivery by book-entry transfer on a timely basis and who wish to tender their Shares must do so pursuant to the guaranteed delivery procedure described in "Section 4. Procedures for Tendering Shares" in the Offer to Purchase. See Instruction 2. If more than 1,800,000 Shares are validly tendered and not withdrawn prior to the Expiration Date, Monsanto Company (the "Purchaser") will, upon the terms and subject to the conditions of the Offer, accept such Shares for payment on a pro rata basis, with adjustments to avoid purchases of fractional Shares, based upon the number of Shares validly tendered and not withdrawn prior to the Expiration Date. Because of the time required to determine the precise number of Shares validly tendered and not withdrawn, if proration is required, the Purchaser does not expect to announce the final results of proration until approximately seven Nasdaq National Market trading days after the Expiration Date. Preliminary results of proration will be announced by press release as promptly as practicable after the Expiration Date. Holders of Shares may obtain such preliminary information from the Depositary or the Information Agent, and also may be able to obtain such preliminary information from their broker. 2 / / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING: Name of Tendering Institution -------------------------------------------------- Check Box of Applicable Book-Entry Transfer Facility: (CHECK ONE) / / The Depository Trust Company / / Philadelphia Depository Trust Company Account Number Transaction Code Number ----------------- ------------------------ / / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): ----------------------------------------------- Window Ticket No. (if any): ---------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: ---------------------------- Name of Institution which Guaranteed Delivery: --------------------------------- If delivery is by book-entry transfer: Name of Tendering Institution --------------------------------------------- Check Box of Applicable Book-Entry Transfer Facility: (CHECK ONE) / / The Depository Trust Company / / Philadelphia Depository Trust Company Account Number Transaction Code Number ----------------- ------------------------ 3
- ----------------------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED - ----------------------------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED ON SHARE CERTIFICATE(S).) (ATTACH ADDITIONAL LIST, IF NECESSARY) - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES SHARE EVIDENCED BY NUMBER OF CERTIFICATE SHARE SHARES NUMBER(S)* CERTIFICATE(S)* TENDERED** ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ TOTAL SHARES - ----------------------------------------------------------------------------------------------------------------------------------- * Need not be completed by stockholders delivering Shares by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to the Depositary are being tendered hereby. See Instruction 4. - -----------------------------------------------------------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS IN THIS LETTER OF TRANSMITTAL CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to Monsanto Company, a Delaware corporation ("Purchaser"), the above-described shares of Class B Common Stock, without par value, of DEKALB Genetics Corporation, a Delaware corporation (the "Company") (all shares of such Class B Common Stock from time to time outstanding being, collectively, the "Shares"), pursuant to Purchaser's offer to purchase up to 1,800,000 Shares at $71.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 7, 1996 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, together with the Offer to Purchase and any amendments or supplements thereto or hereto, collectively constitute the "Offer"). The undersigned understands that Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its United States affiliates, the right to purchase all or any portion of the Shares tendered pursuant to the Offer. Subject to, and effective upon, acceptance for payment of the Shares tendered herewith, in accordance with the terms of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, Purchaser all right, title and interest in and to all the Shares that are being tendered hereby and all dividends, distributions (including, without limitation, distributions of additional Shares) and rights declared, paid or distributed in respect of such Shares on or after January 31, 1996 other than dividends on its Common Stock declared and paid only at customary rates and times (collectively, "Distributions") and irrevocably appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares and all Distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver Share Certificates evidencing such Shares and all Distributions, or transfer ownership of such Shares and all Distributions on the account books maintained by a Book-Entry Transfer Facility, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser, (ii) present such Shares and all Distributions for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and all Distributions, all in accordance with the terms of the Offer. The undersigned hereby irrevocably appoints Patrick J. Arnall, Karl R. Barnickol and Frank E. Vigus and each of them, as the attorneys and proxies of the undersigned, each with full power of substitution, to vote in such manner as each such attorney and proxy or his substitute shall, in his sole discretion, deem proper and otherwise act (by written consent or otherwise) with respect to all the Shares tendered hereby which have been accepted for payment by Purchaser prior to the time of such vote or other action and all Shares and other securities issued in Distributions in respect of such Shares, which the undersigned is entitled to vote at any meeting of stockholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting) or consent in lieu of any such meeting or otherwise. This proxy and power of attorney is coupled with an interest in the Shares tendered hereby, is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by Purchaser in accordance with other terms of the Offer. Such acceptance for payment shall revoke all other proxies and powers of attorney granted by the undersigned at any time with respect to such Shares (and all Shares and other securities issued in Distributions in respect of such Shares), and no subsequent proxy or power of attorney shall be given or written consent executed (and if given or executed, shall not be effective) by the undersigned with respect thereto. The undersigned understands that, in order for Shares to be deemed validly tendered, immediately upon Purchaser's acceptance of such Shares for payment, Purchaser must be able to exercise full voting and other rights with respect to such Shares, including, without limitation, voting at any meeting of the Company's stockholders then scheduled. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and all Distributions, that the tender of the tendered shares complies with Rule 14e-4 under the Securities Exchange Act of 1934, as amended, that when such Shares are accepted for payment and paid for by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restrictions, charges and encumbrances, and that none of such Shares and Distributions will be subject to any adverse claim. The undersigned, upon request, shall execute and deliver all additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of Purchaser all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and pending such remittance and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of 4 each such Distribution and may withhold the entire purchase price of the Shares tendered hereby, or deduct from such purchase price, the amount or value of such Distribution as determined by Purchaser in its sole discretion. No authority herein conferred or agreed to be conferred shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned. All obligations of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in "Section 4. Procedures for Tendering Shares" in the Offer to Purchase and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer. Purchaser's acceptance of such Shares for payment will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer. The undersigned understands that if more than 1,800,000 shares are validly tendered prior to the expiration of the Offer and not validly withdrawn in accordance with Section 3 of the Offer to Purchase, Shares so tendered and not validly withdrawn shall be accepted for payment on a pro rata basis, with appropriate adjustments to avoid the purchase of fractional shares, according to the number of Shares validly tendered and not withdrawn by the Expiration Date. Unless otherwise indicated herein in the box entitled "Special Payment Instructions," please issue the check for the purchase price of all Shares purchased, and return all Share Certificates evidencing Shares not purchased or not tendered in the name(s) of the registered holder(s) appearing above under "Description of Shares Tendered." Similarly, unless otherwise indicated in the box entitled "Special Delivery Instructions," please mail the check for the purchase price of all Shares purchased and all Share Certificates evidencing Shares not tendered or not purchased (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Shares Tendered." In the event that the boxes entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not purchased or not tendered in the name(s) of, and mail such check and Share Certificates to, the person(s) so indicated. The undersigned recognizes that Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name of the registered holder(s) thereof if Purchaser does not purchase any of the Shares tendered hereby. 5 - --------------------------------------------------------------- - --------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased or Share Certificates evidencing Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue / / check and/or Share Certificate(s) to: Name: ---------------------------------- (PLEASE PRINT) Address: ------------------------------- - ---------------------------------------- (INCLUDE ZIP CODE) - ---------------------------------------- TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER (SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE) - --------------------------------------------------------------- - --------------------------------------------------------------- - -------------------------------------------------------------------------------- IMPORTANT STOCKHOLDERS: SIGN HERE (Please Also Complete Substitute Form W-9 on Reverse) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Signature(s) of Stockholder(s) Dated: , 1996 ------------------------------ (Must be signed by registered holder(s) exactly as name(s) appear(s) on Share Certificates or on a security position listing or by a person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5.) Name(s): ---------------------------------------------------------------------- ------------------------------------------------------------------------------ (Please Print) Capacity (full title): -------------------------------------------------------- Address: ---------------------------------------------------------------------- ------------------------------------------------------------------------------ (include Zip Code) Area Code and Telephone No.: -------------------------------------------------- Taxpayer Identification or Social Security No.: ------------------------------- (See Substitute Form W-9 on reverse side) GUARANTEE OF SIGNATURE(S) (See Instructions 1 and 5) FOR USE BY FINANCIAL INSTITUTIONS ONLY. FINANCIAL INSTITUTIONS: PLACE MEDALLION GUARANTEE IN SPACE BELOW. - -------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased or Share Certificates evidencing Shares not tendered or not purchased are to be mailed to someone other than the undersigned, or to the undersigned at an address other than that shown under "Description of Shares Tendered." Mail / / check and/or Share Certificate(s) to: Name: --------------------------------- (PLEASE PRINT) Address: ------------------------------ (INCLUDE ZIP CODE) 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. All signatures on this Letter of Transmittal must be guaranteed by a member of the Medallion Signature Guarantee Program or by any other "eligible guarantor institution" as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each of the foregoing being referred to as an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in a Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered hereby and such holder(s) has (have) completed neither the box entitled "Special Payment Instructions" nor the box entitled "Special Delivery Instructions" on the reverse hereof or (ii) such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. Delivery of Letter of Transmittal and Share Certificates. This Letter of Transmittal is to be used either if Share Certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if Shares are to be delivered by book-entry transfer pursuant to the procedure set forth in "Section 4. Procedures for Tendering Shares" in the Offer to Purchase. Share Certificates evidencing all physically tendered Shares, or a confirmation of a book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility of all Shares delivered by book-entry transfer as well as a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or an Agent's Message in the case of a book-entry delivery, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the reverse hereof prior to the Expiration Date (as defined in "Section 1. Terms of the Offer" in the Offer to Purchase). If Share Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Stockholders whose Share Certificates are not immediately available, who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis may tender their Shares pursuant to the guaranteed delivery procedure described in "Section 4. Procedures for Tendering Shares" in the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by Purchaser, must be received by the Depositary prior to the Expiration Date; and (iii) the Share Certificates evidencing all physically delivered Shares in proper form for transfer by delivery, or a confirmation of a book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, in each case together with a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry delivery, an Agent's Message), and any other documents required by this Letter of Transmittal, must be received by the Depositary within three Nasdaq National Market trading days after the date of execution of such Notice of Guaranteed Delivery, all as described in "Section 4. Procedures for Tendering Shares" in the Offer to Purchase. The term "Agent's Message" means a message, transmitted by a Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has received an express acknowledgement from the participant in such Book-Entry Transfer Facility tendering the Shares, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. By execution of this Letter of Transmittal (or a facsimile hereof), all tendering stockholders waive any right to receive any notice of the acceptance of their Shares for payment. 3. Inadequate Space. If the space provided herein under "Description of Shares Tendered" is inadequate, the Share Certificate numbers, the number of Shares evidenced by such Share Certificates and the number of Shares tendered should be listed on a separate schedule and attached hereto. 4. Partial Tenders (not applicable to stockholders who tender by book-entry transfer). If fewer than all the Shares evidenced by any Share Certificate delivered to the Depositary herewith are to be tendered hereby, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered." In such cases, new Share Certificate(s) evidencing the remainder of the Shares that were evidenced by the Share Certificates delivered to the Depositary herewith will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box entitled "Special Delivery Instructions" on the reverse hereof, as soon as practicable after the expiration or termination of the Offer. All Shares evidenced by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature (s) must correspond with the name(s) as written on the face of the Share Certificates evidencing such Shares without alteration, enlargement or any other change whatsoever. If any Share tendered hereby is owned of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in the names of different holders, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such Shares. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of Share Certificates or separate stock powers are required, unless payment is to be made to, or Share Certificates evidencing Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), in which case, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. 7 If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any Share Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to Purchaser of such person's authority so to act must be submitted. 6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6, Purchaser will pay all stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price of any Shares purchased is to be made to, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such other person will be deducted from the purchase price of such Shares purchased, unless evidence satisfactory to Purchaser of the payment of such taxes, or exemption therefrom, is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificates evidencing the Shares tendered hereby. 7. Special Payment and Delivery Instructions. If a check for the purchase price of any Shares tendered hereby is to be issued, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued, in the name of a person other than the person(s) signing this Letter of Transmittal or if such check or any such Share Certificate is to be sent to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal but at an address other than that shown in the box entitled "Description of Shares Tendered" on the reverse hereof, the appropriate boxes on the reverse of this Letter of Transmittal must be completed. 8. Questions and Requests for Assistance or Additional Copies. Questions and requests for assistance may be directed to the Information Agent at its address or telephone number set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. 9. Substitute Form W-9. Each tendering stockholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN") on the Substitute Form W-9 which is provided under "Important Tax Information" below, and to certify, under penalties of perjury, that such number is correct and that such stockholder is not subject to backup withholding of federal income tax. If a tendering stockholder has been notified by the Internal Revenue Service that such stockholder is subject to backup withholding, such stockholder must cross out item (2) of the Certification box of the Substitute Form W-9, unless such stockholder has since been notified by the Internal Revenue Service that such stockholder is no longer subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the tendering stockholder to 31% federal income tax withholding on the payment of the purchase price of all Shares purchased from such stockholder. If the tendering stockholder has not been issued a TIN and has applied for one or intends to apply for one in the near future, such stockholder should check the box in Part II for "Awaiting TIN" of the Substitute Form W-9, and sign and date the Substitute Form W-9. If the box in Part II for "Awaiting TIN" is checked and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% on all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. 10. Waiver of Conditions. Subject to the terms of the Offer, Purchaser reserves the right to waive any of the specified conditions of the Offer, in whole or in part, in the case of any Shares tendered. 11. Lost, Destroyed or Stolen Certificates. If any certificate(s) representing Shares has been lost, destroyed or stolen, the stockholder should promptly notify American Stock Transfer and Trust Company, 40 Wall St., New York, NY 10005, telephone (718) 921-8200. The stockholder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. In certain cases it may not be possible to complete the procedures for replacing lost or destroyed certificates prior to the Expiration Date. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY COMPLETED AND DULY EXECUTED, OR AN AGENT'S MESSAGE IN THE CASE OF A BOOK-ENTRY DELIVERY (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED UNDER "SECTION 1. TERMS OF THE OFFER" IN THE OFFER TO PURCHASE). IMPORTANT TAX INFORMATION Under the federal income tax law, a stockholder whose tendered Shares are accepted for payment is required by law to provide the Depositary (as payer) with such stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is an individual, the TIN is such stockholder's social security number. If the Depositary is not provided with the correct TIN, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding. Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such individual must submit a statement, signed under penalties of perjury, attesting to such individual's exempt status. Forms of such statements can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced 8 by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder's correct TIN by completing the form below certifying that the TIN provided on Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN), and that (i) such stockholder has not been notified by the Internal Revenue Service that he is subject to backup withholding as a result of a failure to report all interest or dividends or (ii) the Internal Revenue Service has notified such stockholder that such stockholder is no longer subject to backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The stockholder is required to give the Depositary the social security number or employer identification number of the record holder of the Shares tendered hereby. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, the stockholder should check the box in Part II for "Awaiting TIN", and sign and date the Substitute Form W-9. If the box in Part II for "Awaiting TIN" is checked and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% of all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. 9 PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK - ------------------------------------------------------------------------------------------------------------ SUBSTITUTE PART I--For all accounts, enter FORM W-9 your TIN in the box at right. For most individuals, this is your ---------------------------------- PAYER'S REQUEST FOR social security number. If you do Social Security Number TAXPAYER IDENTIFICATION not have a TIN, see How to Obtain NUMBER (TIN) a TIN in the enclosed Guidelines. OR Certify by signing and dating be- ---------------------------------- low. Note: If the account is in Employer Identification DEPARTMENT OF THE TREASURY more than one name, see the chart Number INTERNAL REVENUE SERVICE in the enclosed Guidelines to ---------------------------------- determine which number to give the payer. PART II--AWAITING TIN / / (If awaiting TIN check box and complete the certificate below.) - ------------------------------------------------------------------------------------------------------------
PART III--CERTIFICATION--Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding either because (a) I am exempt from backup withholding or, (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of under reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). Also see instructions in the enclosed Guidelines. For Payees exempt from backup withholding, see the enclosed Guidelines and complete as instructed therein. - -------------------------------------------------------------------------------- SIGNATURE DATE , 1996 - -------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. 10 YOU MUST COMPLETE THE FOLLOWING IF YOU CHECKED THE BOX IN PART II OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Officer or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide the Depositary a Taxpayer Identification Number within sixty (60) days. SIGNATURE DATE Questions and requests for assistance or additional copies of the Offer to Purchase, this Letter of Transmittal and all other tender offer materials may be directed to the Information Agent, as set forth below and copies will be furnished promptly at the Purchaser's expense. The Information Agent for the Offer is: (LOGO)Wall Street Plaza New York, New York 10005 Banks and Brokers call collect (212) 440-9800 Call Toll Free 1-800-223-2064 The Dealer Manager for the Offer is: ROBERTSON, STEPHENS & COMPANY 555 California Street San Francisco, California 94104 (800) 270-5829 EX-99.A.3 4 NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION TO MONSANTO COMPANY (NOT TO BE USED FOR SIGNATURE GUARANTEES) THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 6, 1996, UNLESS THE OFFER IS EXTENDED. This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) (i) if certificates ("Share Certificates") evidencing shares of the Class B Common Stock, without par value (the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), are not immediately available, (ii) if Share Certificates and all other required documents cannot be delivered to Harris Trust Company of New York as Depositary (the "Depositary") prior to the Expiration Date (as defined in "Section 1. Terms of the Offer" in the Offer to Purchase (as defined below)) or (iii) if the procedure for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by telegram or facsimile transmission to the Depositary. See "Section 4. Procedures for Tendering Shares" in the Offer to Purchase. THE DEPOSITARY FOR THE OFFER IS: HARRIS TRUST COMPANY OF NEW YORK By Mail: By Overnight Courier: By Hand: Wall Street Station 77 Water Street, 4th Floor Receive Window P.O. Box 1010 New York, NY 10005 77 Water Street, 5th Floor New York, NY 10268-1010 New York, NY 10005 By Facsimile Transmission: (212) 701-7636 (212) 701-7637 Confirm by Telephone: (212) 701-7663
2 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tender(s) to Monsanto Company, a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 7, 1996 (the "Offer to Purchase") and the related Letter of Transmittal (which, together with the Offer to Purchase, and any amendments or supplements thereto, collectively constitute the "Offer"), receipt of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedure described in "Section 4. Procedures for Tendering Shares" in the Offer to Purchase. - ------------------------------------------------------------------------------------------------- Number of Shares: ----------------------------- ---------------------------------------------- Certificate Nos. (If Available): ---------------------------------------------- ---------------------------------------------- Signature(s) of Record Holder(s) ---------------------------------------------- Dated: , 1996 ------------- Name(s) of Holders: Check one box if Shares will be delivered by ---------------------------------------------- book-entry transfer: ---------------------------------------------- Please Type or Print ---------------------------------------------- / / The Depository Trust Company ---------------------------------------------- Address / / Philadelphia Depository Trust Company Account No. Zip Code -------------------------------- ---------------------------------------------- Area Code and Telephone No. - -------------------------------------------------------------------------------------------------
3 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned is a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States or is otherwise an "eligible guarantor institution" as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the undersigned: (a) represents that the above named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule 14e-4 promulgated under the Exchange Act, (b) represents that such tender of Shares complies with Rule 14e-4 under the Exchange Act, and (c) guarantees delivery to the Depositary, at one of its addresses set forth above, Share Certificates evidencing the Shares tendered hereby, in proper form for transfer, or confirmation of book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company or the Philadelphia Depository Trust Company, in each case with delivery of a Letter of Transmittal (or facsimile thereof) properly completed and duly executed, and any other required documents, all within three Nasdaq National Market trading days of the date hereof. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution. Name of Firm ------------------------------------------ Authorized Signature - ------------------------------------------------------ Name -------------------------------------------------- Please Type or Print Title ------------------------------------------------- Address ----------------------------------------------- Zip Code Area Code and Telephone No. - ------------------------------------------------------ Dated: , 1996 ------------------------------------------ DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.A.4 5 LETTER TO BROKERS/DEALERS 1 OFFER TO PURCHASE FOR CASH UP TO 1,800,000 SHARES OF CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION AT $71.00 NET PER SHARE BY MONSANTO COMPANY THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MARCH 6, 1996, UNLESS THE OFFER IS EXTENDED February 7, 1996 To Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees: We have been appointed by Monsanto Company, a Delaware corporation (the "Purchaser"), to act as Dealer Manager in connection with Purchaser's offer to purchase up to 1,800,000 shares of the Class B Common Stock, without par value (the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), for cash at $71.00 per Share, net to the seller, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 7, 1996 (the "Offer to Purchase") and the related Letter of Transmittal (which, together with the Offer to Purchase, and any amendments or supplements thereto, collectively constitute the "Offer") enclosed herewith. The Offer is not conditioned upon any minimum number of Shares being tendered. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. The Purchaser will not pay fees or commissions to any broker or dealer or other person (other than the Dealer Manager, the Depositary and the Information Agent as described in the Offer) in connection with soliciting tenders of Shares pursuant to the Offer. You will be reimbursed for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Purchaser will pay or cause to be paid any transfer taxes payable on the transfer of Shares to it, except as otherwise provided in Instruction 6 of the enclosed Letter of Transmittal. For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominees we are enclosing the following documents: 1. Offer to Purchase. 2. Letter of Transmittal for Shares. 3. Letter to Stockholders of the Company from Bruce P. Bickner, Chairman and Chief Executive Officer of the Company, accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9. 4. Notice of Guaranteed Delivery to be used to accept the Offer if certificates for Shares are not immediately available or time will not permit all required documents to reach the Depositary by the Expiration Date (as defined in the Offer to Purchase) or if the procedure for book-entry transfer cannot be completed on a timely basis. 5. Letter to your clients for whose account you hold Shares registered in your name or the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer. 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. 2 YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MARCH 6, 1996, UNLESS EXTENDED. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates evidencing such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at one of the Book-Entry Transfer Facilities (as defined in the Offer to Purchase)), a Letter of Transmittal (or facsimile thereof) completed and duly executed and any other required documents. In order to take advantage of the Offer, a duly executed and properly completed Letter of Transmittal and any other required documents should be sent to the Depositary and certificates representing the tendered Shares should be delivered, all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Purchase. If a holder of Shares desires to tender Shares but it is impracticable for such holder to forward certificates or other required documents prior to the required time, a tender of Shares may be effected by following the guaranteed delivery procedures specified in Section 4 of the Offer to Purchase. Any inquiries you may have with respect to the Offer should be addressed to Robertson, Stephens & Company LLC or to Georgeson & Company Inc., the Information Agent, at their respective addresses and telephone numbers set forth on the back cover page of the Offer to Purchase. Additional copies of the enclosed materials may be obtained from the undersigned at Robertson, Stephens & Company LLC (800) 270-5829 or by calling the Information Agent, Georgeson & Company Inc. collect at (212) 440-9800. Very truly yours, Robertson, Stephens & Company LLC ------------------------------ NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF THE DEALER MANAGER, THE PURCHASER, ANY AFFILIATE OF THE PURCHASER, THE COMPANY, ANY AFFILIATE OF THE COMPANY, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL. EX-99.A.5 6 LETTER TO CLIENTS 1 OFFER TO PURCHASE FOR CASH UP TO 1,800,000 SHARES OF CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION AT $71.00 NET PER SHARE BY MONSANTO COMPANY THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 6, 1996, UNLESS THE OFFER IS EXTENDED. To Our Clients: Enclosed for your consideration is an Offer to Purchase dated February 7, 1996 (the "Offer to Purchase") and related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") in connection with the offer by Monsanto Company, a Delaware corporation, to purchase up to 1,800,000 shares of Class B Common Stock, without par value (the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), at a price of $71.00 per Share, net to the seller in cash, upon the terms and subject to the conditions contained in the Offer. Also enclosed is the Letter to Stockholders of the Company from Bruce P. Bickner, Chairman and Chief Executive Officer of the Company, accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9. This material is being forwarded to you as the beneficial owner of Shares carried by us in your account but not registered in your name. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. A tender of such Shares may only be made by us as the holder of record and pursuant to your instructions. Accordingly, we request instructions as to whether you wish to tender any or all such Shares held by us for your account, pursuant to the terms and conditions set forth in the Offer. Your attention is invited to the following: 1. The tender price is $71.00 per Share, net to the seller in cash. 2. The Offer is not conditioned upon a minimum number of Shares being tendered. 3. The Board of Directors of the Company has, by unanimous vote of all directors, (i) approved the Investment Agreement and the Ancillary Agreements (as each is defined in the introduction of the Offer to Purchase), (ii) determined that the Investment Agreement, the Ancillary Agreements and the transactions contemplated thereby, including the Offer, taken together, are fair to and in the best interests of the Company and its shareholders and (iii) recommended the Offer to holders of Shares who desire an opportunity to sell all or a portion of their Shares for cash at this time. 4. The Offer is being made for up to 1,800,000 Shares. If more than 1,800,000 Shares are tendered, then Shares will be accepted for payment on a pro rata basis, as described in the Offer to Purchase. 5. Any stock transfer taxes applicable to a sale of the Shares to the Purchaser will be paid by or on behalf of the Purchaser, except as otherwise provided in Instruction 6 of the Letter of Transmittal. 6. Stockholders who tender Shares will not be obligated to pay brokerage commissions with respect to such tenders. 7. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 6, 1996, UNLESS THE OFFER IS EXTENDED. 2 The Purchaser is not aware of any state in which the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a good faith effort to comply with any such state statute. If, after such good faith effort, the Purchaser cannot comply with any such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such state. In any jurisdiction in which the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of the Purchaser by the Dealer Manager or one or more registered brokers or dealers licensed under the laws of such jurisdiction. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form set forth below. Your instructions to us should be forwarded in ample time to permit us to submit a tender on your behalf prior to the expiration of the Offer. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the instruction form set forth below. THE SPECIMEN LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY AND MAY NOT BE USED TO TENDER SHARES. INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE SHARES OF CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION The undersigned acknowledge(s) receipt of your letter enclosing the Offer to Purchase dated February 7, 1996, relating to the offer by Monsanto Company, a Delaware corporation, to purchase shares of Class B Common Stock, without par value ("Shares") of DEKALB Genetics Corporation, a Delaware corporation, and the related specimen Letter of Transmittal. This will instruct you to tender the number of Shares indicated below (or, if no number is indicated below, all Shares) held by you for account of the undersigned, pursuant to the terms and conditions set forth in the Offer to Purchase and the related specimen Letter of Transmittal. NUMBER OF SHARES TO BE TENDERED: SHARES* ------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------ Signature(s) ------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------ (Please print name(s) and address(es) here) ------------------------------------------------------ Area code and telephone number - ------------------------------ * I (we) understand that if I (we) sign this instruction form without indicating a lesser number of Shares in the space above, all Shares held by you for my (our) account will be tendered. EX-99.A.6 7 W-9 GUIDELINES 1 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 IRS INSTRUCTIONS (SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.) PURPOSE OF FORM. -- A person who is required to file an information return with the Internal Revenue Service (the IRS) must obtain your correct taxpayer identification number (TIN) to report income paid to you, real estate transactions, mortgage interest you paid, the acquisition or abandonment of secured property, or contributions you made to an individual retirement account (IRA). Use Form W-9 to furnish your correct TIN to the requester (the person asking you to furnish your TIN), and, when applicable, (1) to certify that the TIN you are furnishing is correct (or that you are waiting for a number to be issued), (2) to certify that you are not subject to backup withholding, and (3) to claim exemption from backup withholding if you are an exempt payee. Furnishing your correct TIN and making the appropriate certifications will prevent certain payments from being subject to backup withholding. NOTE: IF A REQUESTER GIVES YOU A FORM OTHER THAN A W-9 TO REQUEST YOUR TIN, YOU MUST USE THE REQUESTER'S FORM. HOW TO OBTAIN A TIN. -- If you do not have a TIN, apply for one immediately. To apply, get FORM SS-5, Application for a Social Security Card (SSN) (for individuals), from your local office of the Social Security Administration, or FORM SS-4, Application for Employer Identification Number (EIN) (for businesses and all other entities), from your local IRS office. To complete Form W-9, if you do not have a TIN, and have applied for one or intend to apply for one in the near future, write "Applied For" in the space provided in Part I of the Substitute W-9, sign and date the form, and give it to the requestor. Generally, you will then have 60 days to obtain a TIN and furnish it to the requester. If the requester does not receive your TIN within 60 days, backup withholding, if applicable, will begin and continue until you furnish your TIN to the requester. For reportable interest or dividend payments, the payer must exercise one of the following options concerning backup withholding during this 60-day period. Under option (1), a payer must backup withhold on any withdrawals you make from your account after 7 business days after the requester receives this form back from you. Under option (2), the payer must backup withhold on any reportable interest or dividend payments made to your account, regardless of whether you make any withdrawals. The backup withholding under option (2) must begin no later than 7 business days after the requester receives this form back. Under option (2), the payer is required to refund the amounts withheld if your certified TIN is received within the 60-day period and you were not subject to backup withholding during the period. As soon as you receive your TIN, complete another Form W-9, include your TIN, sign and date this form, and give it to the requester. WHAT IS BACKUP WITHHOLDING? -- Persons making certain payments to you after 1992 are required to withhold and pay to the IRS 31% of such payments under certain conditions. This is called "backup withholding." Payments that could be subject to backup withholding include interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee compensation, and certain payments from fishing boat operators, but do not include real estate transactions. If you give the requester your correct TIN, make the appropriate certifications, and report all your taxable interest and dividends on your tax return, your payments will not be subject to backup withholding. Payments you receive will be subject to backup withholding if: (1) You do not furnish your TIN to the requester, or (2) The IRS notifies the requester that you furnished an incorrect TIN, or (3) You are notified by the IRS that you are subject to backup withholding because you failed to report all your interest and dividends on your tax return (for reportable interest and dividends only), or (4) You fail to certify to the requester that you are not subject to backup withholding under (3) above (for reportable interest and dividend accounts opened after 1983 only), or (5) You fail to certify your TIN. This applies only to reportable interest, dividend, broker or barter exchange accounts opened after 1983, or broker accounts considered inactive in 1983. Except as explained in (5) above, other reportable payments are subject to backup withholding only if (1) or (2) above applies. Certain payees and payments are exempt from backup withholding and information reporting. See PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING, below, and EXEMPT PAYEES AND PAYMENTS under SPECIFIC INSTRUCTIONS, on page 2, if you are an exempt payee. PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING. -- The following is a list of payees exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, payees listed in (1) through (13) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker are exempt. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (7), except that a corporation that provides medical and health care services or bills and collects payments for such services is not exempt from backup withholding or information reporting. Only payees described in items (2) through (6) are exempt from backup withholding for barter exchange transactions, patronage dividends, and payments by certain fishing boat operators. (1) A corporation. (2) An organization exempt from tax under Section 501(a), or an IRA, or a custodial account under Section 403(b)(7). (3) The United States or any of its agencies or instrumentalities. (4) A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities. (5) A foreign government or any of its political subdivisions, agencies or instrumentalities. (6) An international organization or any of its agencies or instrumentalities. (7) A foreign central bank of issue. (8) A dealer in securities or commodities required to register in the U.S. or a possession of the U.S. (9) A futures commission merchant registered with the Commodity Futures Trading Commission. (10) A real estate investment trust. (11) An entity registered at all times during the tax year under the Investment Company Act of 1940. (12) A common trust fund operated by a bank under section 584(a). (13) A financial institution. (14) A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporation Secretaries, Inc., Nominee List. (15) A trust exempt from tax under section 664 or described in section 4947. Payments of dividends and patronage dividends generally not subject to backup withholding also include the following: - Payments to nonresident aliens subject to withholding under section 1441. - Payments to partnerships not engaged in trade or business in the U.S. and that have at least one nonresident partner. - Payments of patronage dividends not paid in money. - Payments made by certain foreign organizations. Payments of interest generally not subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. NOTE: YOU MAY BE SUBJECT TO BACKUP WITHHOLDING IF THIS INTEREST IS $600 OR MORE AND IS PAID IN THE COURSE OF THE PAYER'S TRADE OR BUSINESS AND YOU HAVE NOT PROVIDED YOUR CORRECT TIN TO THE PAYER. - Payments of tax-exempt interest (including exempt-interest dividends under section 852). - Payments described in section 6049(b)(5) to nonresident aliens. - Payments on tax-free covenant bonds under section 1451. - Payments made by certain foreign organizations. - Mortgage interest paid by you. 2 Payments that are not subject to information reporting are also not subject to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A, and 6050N, and their regulations. PENALTIES FAILURE TO FURNISH TIN. -- If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. Civil Penalty for False Information With Respect to Withholding. -- If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. Criminal Penalty for Falsifying Information. -- Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. MISUSE OF TINS. -- If the requester discloses or uses TINs in violation of Federal law, the requester may be subject to civil and criminal penalties. SPECIFIC INSTRUCTIONS NAME. -- If you are an individual, you must generally provide the name shown on your social security card. However, if you have changed your last name, for instance, due to marriage, without informing the Social Security Administration of the name change, please enter your first name, the last name shown on your social security card and your new last name. If you are a sole proprietor, you must furnish your individual name and either your SSN or EIN. You may also enter your business name. Enter your name(s) as shown on your social security card and/or as it was used to apply for your EIN on Form SS-4. SIGNING THE CERTIFICATION. -- (1) INTEREST, DIVIDEND, AND BARTER EXCHANGE ACCOUNTS OPENED BEFORE 1984 AND BROKER ACCOUNTS CONSIDERED ACTIVE DURING 1983. -- You are required to furnish your correct TIN, but you are not required to sign the certification. (2) INTEREST, DIVIDEND, BROKER AND BARTER EXCHANGE ACCOUNTS OPENED AFTER 1983 AND BROKER ACCOUNTS CONSIDERED INACTIVE DURING 1983. -- You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item (2) in the certification before signing the form. (3) REAL ESTATE TRANSACTIONS. -- You must sign the certification. You may cross out item (2) of the certification. (4) OTHER PAYMENTS. -- You are required to furnish your correct TIN, but you are not required to sign the certification unless you have been notified of an incorrect TIN. Other payments include payments made in the course of the requester's trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services, payments to a nonemployee for services (including attorney and accounting fees), and payments to certain fishing boat crew members. (5) MORTGAGE INTEREST PAID BY YOU, ACQUISITION OR ABANDONMENT OF SECURED PROPERTY, OR IRA CONTRIBUTIONS. -- You are requested to furnish your correct TIN, but you are not required to sign the certification. (6) EXEMPT PAYEES AND PAYMENTS. -- If you are exempt from backup withholding, you should complete this form to avoid possible erroneous backup withholding. Enter your correct TIN in Part I, write "EXEMPT" in the space in Part III, and sign and date the form. If you are a nonresident alien or foreign entity not subject to backup withholding, give the requester a completed Form W-8, Certificate of Foreign Status. (7) "AWAITING TIN". -- Follow the instructions under HOW TO OBTAIN A TIN on page 1, check the box "Awaiting TIN" in the space provided for the TIN in Part II of the Substitute Form W-9 and sign and date the form. SIGNATURE. -- For a joint account, only the person whose TIN is shown in Part I should sign the form. PRIVACY ACT NOTICE. -- Section 6109 requires you to furnish your correct TIN to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold 31% of taxable interest, dividends, and certain other payments to a payee who does not furnish a TIN to a payer. Certain penalties may also apply. WHAT NAME AND NUMBER TO GIVE THE REQUESTER
- ---------------------------------------------------------------- GIVE THE FOR THIS TYPE SOCIAL SECURITY OF ACCOUNT: NUMBER OF -- - ---------------------------------------------------------------- 1. Individual The individual 2. Two or more individuals (joint The actual owner of the account) account or, if combined funds, the first individual on the account(1) 3. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 4. a. The usual revocable savings The grantor-trustee(1) trust (grantor is also trustee) b. So-called trust account that The actual owner(1) is not a legal or valid trust under state law 5. Sole proprietorship The owner(3) 6. Sole proprietorship The owner(3) - ---------------------------------------------------------------- GIVE THE FOR THIS TYPE EMPLOYER IDENTIFICATION OF ACCOUNT: NUMBER OF -- - ---------------------------------------------------------------- 7. A valid trust, estate or Legal entity(4) pension trust 8. Corporate The corporation 9. Association, club, religious, The organization charitable, educational, or other tax-exempt organization 10. Partnership The partnership 11. A broker or registered nominee The broker or nominee 12. Account with the Department of The public entity Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments
- -------------------------------------------------------------------------------- (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Show the individual's name. You may also enter your business name. You may use your SSN or EIN. (4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE CONSIDERED TO BE THAT OF THE FIRST NAME LISTED. EX-99.A.7 8 TOMBSTONE ADVERTISEMENT 1 This announcement is neither an offer to purchase nor a solicitation of an offer to sell Class B Shares (as defined below). The Offer is made solely by the Offer to Purchase (as defined below) and the related Letter of Transmittal, and is being made to all holders of Class B Shares. Purchaser (as defined below) is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Class B Shares pursuant thereto, Purchaser will make a good faith effort to comply with such state statute. If, after such good faith effort, Purchaser cannot comply with such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Class B Shares in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by Robertson, Stephens & Company LLC (the "Dealer Manager") or one or more registered brokers or dealers licensed under the laws of such jurisdiction. Notice of Offer to Purchase for Cash up to 1,800,000 Shares of Class B Common Stock of DEKALB Genetics Corporation at $71.00 Net Per Share by Monsanto Company Monsanto Company, a Delaware corporation ("Purchaser"), is offering to purchase up to 1,800,000 shares of Class B Common Stock, without par value (the "Class B Shares"), of DEKALB Genetics Corporation, a Delaware corporation ("Company"), at a price of $71.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 7, 1996 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 6, 1996, UNLESS THE OFFER IS EXTENDED. The Offer is being made pursuant to an Investment Agreement dated January 31, 1996 (the "Investment Agreement") between Purchaser and Company. The Offer is conditioned upon conditions set forth in "Section 13. Certain Conditions of the Offer" in the Offer to Purchase. The Offer is not conditioned on there being tendered any minimum number of Class B Shares. If more than 1,800,000 Class B Shares are validly tendered and not withdrawn prior to the Expiration Date (as defined in "Section 1. Terms of the Offer" in the Offer to Purchase), such Class B Shares will be accepted on a pro rata basis upon the terms and subject to the conditions of the Offer according to the number of Class B Shares validly tendered and not properly withdrawn prior to the Expiration Date (with appropriate adjustments to avoid the purchase of fractional Class B Shares). Because of the time required to determine the precise number of Class B Shares validly tendered and not withdrawn, if proration is required, the Purchaser does not 2 expect to announce the final results of proration until approximately seven Nasdaq National Market trading days after the Expiration Date. Preliminary results of proration will be announced by press release as promptly as practicable after the Expiration Date. Holders of Class B Shares may obtain such preliminary information and final results from the Harris Trust Company of New York (the "Depositary") and also may obtain such preliminary information and final results from their broker. The Board of Directors of the Company has, by unanimous vote of all directors, approved the Investment Agreement and the Ancillary Agreements (as defined in the "INTRODUCTION" of the Offer to Purchase), determined that the Investment Agreement, the Ancillary Agreements and transactions contemplated thereby, including the Offer, taken together, are fair to, and in the best interests of, the Company and its stockholders, and recommends that holders of Class B Shares who desire an opportunity to sell all or a portion of their Class B Shares for cash at this time accept the Offer and tender their Class B Shares pursuant to the Offer. For purposes of the Offer, Purchaser will be deemed to have accepted for payment (and thereby purchased) Class B Shares validly tendered and not properly withdrawn as, if and when Purchaser gives oral or written notice to the Depositary of Purchaser's acceptance for payment of such Class B Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Class B Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from Purchaser and transmitting such payments to tendering stockholders whose Class B Shares have been accepted for payment. Under no circumstances will interest on the purchase price for Class B Shares be paid, regardless of any delay in making such payment. In all cases, payment for Class B Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing such Class B Shares (the "Share Certificates") or timely confirmation of a book-entry transfer of such Class B Shares into the Depositary's account at one of the Book-Entry Transfer Facilities (as defined in "Section 2. Acceptance for Payment and Payment for Shares" of the Offer to Purchase) pursuant to the procedure set forth in "Section 4. Procedures for Tendering Shares" of the Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in "Section 2. Acceptance for Payment and Payment for Shares" of the Offer to Purchase) in connection with a book-entry transfer and (iii) any other documents required under the Letter of Transmittal. Subject to the following sentence, Purchaser expressly reserves the right, in its sole discretion (but subject to the terms and conditions of the Investment Agreement), at any time and from time to time, to extend for any reason the period of time during which the Offer is open, including the occurrence of any condition specified in "Section 13. Certain Conditions of the Offer" of the Offer to Purchase, by giving oral or written notice of such extension to the Depositary. The Purchaser is required to extend the Offer for at least 10 business days from the scheduled expiration date and shall be entitled to extend the Offer for a period not exceeding 50 business days from the commencement of the Offer if, at the scheduled expiration date of the Offer, any of the Offer Conditions, as described in "Section 13. Certain Conditions of the Offer" of the Offer to Purchase, shall not have been satisfied or waived. Any such extension will be followed as promptly as practicable by public announcement thereof, such announcement to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled 3 Expiration Date of the Offer. During any such extension, all Class B Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the rights of tendering stockholders to withdraw their Class B Shares. Tenders of Class B Shares made pursuant to the Offer are irrevocable except that such Class B Shares may be withdrawn at any time prior to 12:00 Midnight, New York City time, on Wednesday, March 6, 1996 (or the latest time and date at which the Offer, if extended by Purchaser, shall expire) and, unless theretofore accepted for payment and paid for by Purchaser pursuant to the Offer, may also be withdrawn at any time after April 7, 1996. For the withdrawal to be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover page of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Class B Shares to be withdrawn, the number of Class B Shares to be withdrawn and the name of the registered holder of such Class B Shares, if different from that of the person who tendered such Class B Shares. If Share Certificates evidencing Class B Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary, and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in "Section 3. Withdrawal Rights" of the Offer to Purchase), unless such Class B Shares have been tendered for the account of an Eligible Institution. If Class B Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in "Section 4. Procedures for Tendering Shares" of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Class B Shares. All questions as to the form and validity (including the time of receipt) of any notice of withdrawal will be determined by Purchaser, in its sole discretion, whose determination will be final and binding. Withdrawal of Class B Shares may not be rescinded and any Class B Shares properly withdrawn will thereafter be deemed not validly tendered for any purposes of the Offer. Withdrawn Class B Shares may be retendered, however, by again following one of the procedures for tendering described in "Section 4. Procedures for Tendering Shares" of the Offer to Purchase at any time prior to the Expiration Date. The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. Company has provided Purchaser with Company's stockholder list and security position listings for the purpose of disseminating the Offer to holders of shares. The Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of shares whose names appear on Company's stockholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Class B Shares. The Offer to Purchase and the related Letter of Transmittal contain important information which should be read before any decision is made with respect to the Offer. Questions and requests for assistance or for additional copies of the Offer to Purchase and the related Letter of Transmittal and other tender offer materials may be directed to the Information Agent or the Dealer Manager as set forth below, and copies will be furnished promptly at Purchaser's expense. No fees or commissions will be paid to brokers, dealers or other persons 4 (other than the Dealer Manager, the Information Agent and the Depositary in each case as described in the Offer) in connection with tenders of Class B Shares pursuant to the Offer. The Information Agent for the Offer is: Wall Street Plaza New York, New York 10005 Banks and Brokers call collect (212) 440-9800 Call Toll Free: 1-800-223-2064 The Depositary for the Offer is: Harris Trust Company of New York By Mail: By Overnight Courier: By Hand: Wall Street Station 77 Water Street, 4th Floor Receive Window P.O. Box 1010 New York, NY 10005 77 Water Street, 5th Floor New York, NY 10268-1010 New York, NY 10005 By Facsimile Transmission: Confirm by Telephone: (212) 701-7636 (212) 701-7663 (212) 701-7637
The Dealer Manager for the Offer is: Robertson, Stephens & Company 555 California Street, 26th Floor San Francisco, California 94104 (800) 270-5829 February 7, 1996 21619 Taylor & Ives Jay J. Cohen Farrington & Favia (212) 476-7600 Taylor & Ives (212) 921-9300 February96/TaylorIves/21619-D-01 2/6/96 jn/et/jn/et/jn/et Proof 7 EX-99.A.8 9 PRESS RELEASE DATED 2-1-96 1 NEWS Monsanto FOR IMMEDIATE RELEASE Loren W. Wassell - (314) 694-7002 Scarlett Lee Foster - (314) 694-2883 Monsanto Company Public Affairs 800 N. Lindbergh Boulevard St. Louis, Missouri 63167 MONSANTO ANNOUNCES INVESTMENT AND RESEARCH COLLABORATION WITH DEKALB ST. LOUIS, Feb. 1, 1996 -- Monsanto Company and DEKALB Genetics Corporation today announced a definitive agreement for a long-term research and development collaboration in the field of agricultural biotechnology, particularly corn and soybean seed. Both companies also announced non-exclusive cross-licensing agreements covering herbicide-tolerant and insect-protected corn products targeted to reach the market during the next three years. In addition, Monsanto will acquire 10 percent of DEKALB Genetics Class A (voting) common stock and up to 45 percent of Class B (non-voting) common stock. "This is a stretegic relationship to make Monsanto's crop technology available to growers in the seeds they prefer to plant," said Robert B. Shapiro, chairman and chief executive officer of Monsanto. "This collaboration greatly strengthens Monsanto's position in the important seed corn business. The quality of our technology is important, but so is the quality of the seeds that contain the improved performance traits. DEKALB is one of the industry's leaders in both biotechnology and conventional breeding," Shapiro said. "The research collaboration combines the strengths of both companies' agricultural biotechnology programs," said Bruce P. Bickner, DEKALB's chairman and chief executive officer. "By coordinating certain of our respective research activities, we will be able to bring more products with value-added traits to market within a shorter time span." As part of their 10-year research collaboration, Monsanto will pay DEKALB $19.5 million and the two companies will share licensing revenues for products that are developed as a result of the collaboration. The primary crops involved are corn and soybeans, but the collaboration also covers other crops, including sorghum, wheat, oilseeds, and produce. DEKALB will receive worldwide licenses for certain Monsanto technology, including technology for YieldGard insect protected corn, Roundup Ready corn, tolerant of Roundup herbicide, and for corn tolerant of glufosinate herbicide. Monsanto will receive licenses to use DEKALB's technology for YieldGard and Roundup Ready corn and the ability to further license the technology. YieldGard corn is protected against certain insect pests with traits derived from a naturally occurring microorganism, Bacillus thuringiensis or "Bt." Monsanto and DEKALB will share royalties on future licenses on an equal basis. The worldwide licenses created by the agreement are non-exclusive. Both companies remain free to license technologies to others. Neither the collaboration nor the cross-licensing agreements transfer to Monsanto any rights to DEKALB's proprietary inbred, hybrid or varietal seed lines. As part of the agreement, Monsanto will invest approximately $30 million to acquire 10 percent of the Class A voting stock of DEKALB and approximately 8 percent of the company's Class B non-voting stock. As a result of additional stock issued for the transaction, the total number of DEKALB's outstanding shares would rise from about 5.2 million to over DEKALB Genetics Corporation, (815) 758-9223 2 5.6 million. "The sale of equity provides us with funds to support our growing seed business," Bickner said. Monsanto will make a cash tender offer for up to 1.8 million shares of the publicly traded Class B non-voting stock at a price of $71 per share. DEKALB's board of directors has unanimously endorsed Monsanto's tender offer and recommends it to shareowners who desire to sell all or a portion of their shares at a premium over the current market price. Details of the tender offer will be communicated promptly to DEKALB shareowners. The transaction is expected to be completed during March. Monsanto will add one representative to the DEKALB board of directors in 1996 and, assuming a successful tender offer, another representative in 1997. A 10-year standstill agreement between the companies limits Monsanto ownership of DEKALB to 10 percent of the Class A voting stock and 40 percent of the total outstanding common stock. In a related agreement, the Roberts family members, owners of more than 50 percent of DEKALB's voting stock, have agreed with Monsanto will be given the first opportunity to purchanse such stock. "Clearly, Monsant will hold a significant minority share, but there is no change in control at DEKALB. The Roberts family continues to own a majority of the company's voting stock," Bickner said. "More important to DEKALB shareholders, however, is that this agreement strategically positions DEKALB's research capabilities for the start of the 21st century and creates an important source of licensing revenue. It also provides added assurance to our customers and dealers that DEKALB will continue to offer the most advanced genetic seed products to the marketplace," Bickner said. "Monsanto is making a sound investment in an industry leader. We will gain access to DEKALB's biotechnology portfolio, outstanding breeding capabilities, and to the expertise of a leading seed corn company," Shapiro said. "This new relationship recognizes the importance of linking biotechnology capabilities closely with breeding and seed production in order to bring new hybrids with improved production traits quickly into a very competitive marketplace. We intend to offer growers the best traits, in the best seeds, through leading seed companies like DEKALB," Shapiro said. Based in DeKalb, Illinois, DEKALB is engaged in the research, production and marketing of agricultural seed and swine breeding stock. Monsanto is a science and technology company based in St. Louis, Missouri. It is a global leader in agricultural biotechnology and in the development of improved food and fiber crops. Monsanto will commercialize four new products of agricultural biotechnology in 1996 after completing regulatory reviews. They include Roundup Ready soybeans, tolerant of the Monsanto's Roundup herbicide; NewLeaf insect-protected potatoes; insect-protected cotton with the Bollgard gene; and Roundup Ready canola. YieldGard insect-protected corn and Roundup Ready corn are amoung the additional products currently in regulatory review. -oOo- NOTE TO EDITORS: Roundup, Roundup Ready, YieldGard, NewLeaf and Bollgard are among the trademarks owned or licensed by Monsanto Company and its subsidiaries. Additional media contact: Thomas R. Rauman, Chief Financial Officer DEKALB Genetics Corporation, (815) 758-9223 EX-99.A.9 10 PRESS RELEASE DATED 2-7-96 1 NOTICE TO HOLDERS OF CLASS A COMMON STOCK OF DEKALB GENETICS CORPORATION To the Holders of Class A Common Stock of DEKALB Genetics Corporation Monsanto Company is offering to purchase up to 1,800,000 shares of Class B Common Stock, without par value ("Class B Stock"), of DEKALB Genetics Corporation for a price of $71.00 per share, net to the seller in cash, upon the terms and subject to the conditions set forth in the enclosed Offer to Purchase and related Letter of Transmittal (the "Offer"). A holder of Class A Common Stock, without par value ("Class A Stock"), may participate in the Offer only by converting Class A Stock to Class B Stock and tendering such Class B Stock as set forth in the Offer. Holders of Class A Stock who wish to convert Class A Stock to Class B Stock must deliver certificates representing the shares of Class A Stock to be converted to the transfer agent for the Class A and Class B Stock, together with a letter or note requesting such conversion. The transfer agent for the Class A Stock and the Class B Stock is American Stock Transfer and Trust Company, 40 Wall Street, New York, New York 10005, telephone number (718) 921-8200. The expiration date of the Offer is Wednesday, March 6, 1996, unless extended as set forth in the Offer. Holders of Class A Stock must complete the conversion of such holder's Class A Stock to Class B Stock and tender such Class B Stock by the expiration date, including any extensions, in order to participate in the Offer. Monsanto Company February 7, 1996 EX-99.C.1 11 INVESTMENT AGREEMENT 1 Execution Copy ================================================================================ INVESTMENT AGREEMENT Between MONSANTO COMPANY, a Delaware corporation and DEKALB GENETICS CORPORATION, a Delaware corporation Dated as of January 31, 1996 ================================================================================ 2 TABLE OF CONTENTS
Page ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . 2 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE 2 SALE AND PURCHASE OF THE NEWLY ISSUED SHARES . . . . . . . . 11 2.1. Sale and Purchase of the Newly Issued Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2.2. Closing and Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 ARTICLE 3 THE OFFER . . . . . . . . . . . . . . . . . 12 3.1. Commencement of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.2. Changes to the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.3. Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.4. Schedule 14D-1 and Other Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.5. Actions by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.6. Acquisition of Additional Class B Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . 17 4.1. Organization, Standing and Corporate Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.2. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.3. Capital Structure; New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.4. Authority; Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 4.5. SEC Reports; Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 4.6. Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.7. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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Page 4.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.9. Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.10. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.11. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.12. Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.13. No Untrue Statement or Omission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF INVESTOR . . . . . . . . 24 5.1. Organization; Authority; Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 5.2. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.3. Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.4. Acquisition for Investment and Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.5. Legal Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.6. Purchase Entirely for Own Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.7. Current Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 ARTICLE 6 COVENANTS OF THE COMPANY . . . . . . . . . . . . . 27 6.1. Conduct of Business by the Company Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 27 ARTICLE 7 CONDITIONS TO CLOSING . . . . . . . . . . . . . . 28 7.1. Obligations of Investor with respect to the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 28 7.2. Obligations of the Company with respect to the Closing. . . . . . . . . . . . . . . . . . . . . . . . . 30 ARTICLE 8 CERTAIN ADDITIONAL AGREEMENTS . . . . . . . . . . . . 31 8.1. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 8.2. Reasonable Efforts; Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 8.3. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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Page 8.4. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 8.5. Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 8.6. Nonrecognition of Certain Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 8.7. Independent Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 ARTICLE 9 RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS . . . . . . . . 35 9.1. Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 9.2. Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 9.3. Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 9.4. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets . . . . . . . . . . . 44 9.5. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 ARTICLE 10 EQUITY PURCHASE RIGHTS . . . . . . . . . . . . . 44 10.1. Equity Purchase Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 10.2. Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 10.3. Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 ARTICLE 11 STANDSTILL . . . . . . . . . . . . . . . . 48 11.1. Restriction on Acquisition by Investor of Company Securities . . . . . . . . . . . . . . . . . . . . . 48 11.2. Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 ARTICLE 12 TERMINATION . . . . . . . . . . . . . . . . 53 12.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 12.2. Termination After Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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Page 12.3. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 ARTICLE 13 INDEMNIFICATION . . . . . . . . . . . . . . . 54 13.1. Investor's Indemnification Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 13.2. Company's Indemnification Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 13.3. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 ARTICLE 14 GENERAL PROVISIONS . . . . . . . . . . . . . . 56 14.1. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 14.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 14.3. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 14.4. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 14.5. Entire Agreement; No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 14.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 14.7. Corporate Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 14.8. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 14.9. Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 14.10. Amendment and Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 14.11. Accounting Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 14.12. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Exhibit A Offer Conditions Exhibit B By-law Amendments Exhibit C Opinion of John H. Witmer, Jr. Exhibit D Opinion of Frank E. Vigus
-iv- 6 INVESTMENT AGREEMENT dated as of January 31, 1996 (this "Agreement"), between MONSANTO COMPANY, a Delaware corporation ("Investor") and DEKALB GENETICS CORPORATION, a Delaware corporation (the "Company"). WHEREAS, the respective managements of Investor and the Company have negotiated and the Boards of Directors of Investor and the Company have approved a strategic alliance under which the two companies will enter into various collaborations, the Company will remain an autonomous and entrepreneurial business and Investor will make a substantial investment in the Company; WHEREAS, Investor proposes to make a tender offer (as it may be amended from time to time as permitted under this Agreement with the Company's consent if required hereby, the "Offer") to purchase any or all up to a maximum of 1,800,000 shares of Class B Common Stock, without par value, of the Company (the "Class B Stock"), at a price per share of Class B Stock of $71.00 net to the seller in cash (such price, as may hereafter be increased, the "Tender Offer Price") (such 1,800,000 shares representing approximately 37% of the outstanding shares of Class B Stock, after giving effect to the transactions contemplated by this Agreement), upon the terms and subject to the conditions set forth in this Agreement; WHEREAS, Investor further proposes to purchase from the Company in accordance with the terms and conditions hereof newly issued shares of the Company's Class A Common Stock, without par value (the "Class A Stock") at a price per share of $65.00 (such shares representing 10% of the outstanding shares of Class A Stock after expiration of the Offer and after giving effect to the issuance thereof) (the "Newly Issued Class A Shares") and 378,000 newly issued shares of Class B Stock at a price per share of $65.00 (the "Newly Issued Class B Shares") (such Newly Issued Class A Shares and Newly Issued Class B Shares collectively referred to as the "Newly Issued Shares"); -1- 7 WHEREAS Investor and the Company desire to make certain representations, warranties, covenants and agreements and also to prescribe various conditions in connection with the transactions contemplated hereby; and WHEREAS, contemporaneously herewith, Investor and the Company and Investor and the Major A Stockholders, as applicable, have entered into the Ancillary Agreements described herein, which Ancillary Agreements will be effective upon the consummation of the Closing. NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement and in the Ancillary Agreements, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS 1.1. Definitions. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings set forth below. "Acquisition Proposal" shall mean any tender offer or exchange offer or proposal (including without limitation any proposal or offer to shareholders of the Company) with respect to a Business Combination or a sale of 10% or more of the outstanding capital stock of the Company. "Affiliate" of a party means any person or entity controlling, controlled by, or under common control with such party. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or -2- 8 indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement or otherwise. "Amended Bylaws" means the Bylaws of the Company, which Bylaws include the amendments provided in Exhibit B hereto, to be adopted by the Company prior to the Closing. "Ancillary Agreements" means the Stockholders' Agreement, the Registration Rights Agreement, the Collaboration Agreement, the Corn Borer-Protected Corn License Agreement; the Glyphosate-Protected Corn License Agreement and the CaMV Promoter License Agreement each of which is dated as of the date hereof and effective upon the consummation of the Closing. "beneficially owned", "beneficially own" and "beneficial ownership" shall have the meaning provided in Rule 13d-3 under the Exchange Act, including subsection (d)(1)(i) thereof, without giving effect to whether or not such beneficial ownership may be acquired within 60 days as required by such subsection, provided, however, that "beneficial ownership" shall not be deemed to include any right of Investor conferred by (i) the Stockholders' Agreement until such time as Investor shall become legally bound (whether or not subject to conditions) to purchase any Equity pursuant to such agreement or otherwise or (ii) Section 10.1 until such time as the Company shall give Investor an Issuance Notice (unless Investor shall have waived its right thereunder by failure to provide a Response Notice and as reduced in accordance with Section 10.1.4) or (iii) Section 10.3 until the Company shall notify Investor that it is entitled to purchase shares of Common Stock pursuant to such section (unless Investor shall waive or be deemed to have waived its rights thereunder). "Board" means the Board of Directors of the Company. "Business Combination" shall mean a merger or consolidation in which the Company is a constituent corporation and pursuant to which the Common Stock is convertible into or exchanged for cash, securities or other property or a sale of all or -3- 9 substantially all of the assets of the Company and its subsidiaries taken as a whole, or a sale of all or substantially all the assets of the Company's United States seed corn business; provided that a transaction in which the beneficial ownership of the capital stock of the Company or of the sole surviving corporation to the transaction (or of the ultimate parent of the Company or of such sole surviving corporation) immediately after the consummation of such transaction is substantially the same as the beneficial ownership of the Company's capital stock immediately prior to the consummation thereof shall not be deemed a Business Combination unless such transaction shall result in the sale of all or substantially all the assets of the Company and its subsidiaries taken as a whole or all or substantially all the assets of the Company's United States seed corn business. "Business Day" means any day other than a Saturday, a Sunday, or a bank holiday in the States of Illinois, New York or Missouri. "CaMV Promoter License Agreement" means the CaMV Promoter License Agreement dated as of the date hereof between Investor and the Company. "Class A Stock" means the Class A Common Stock, without par value, of the Company. "Class B Percentage Limitation" means the percentage of the Class B Stock determined by dividing (i) the number of shares of Class B Stock beneficially owned by Investor after (a) acquisition of the Newly Issued Shares, (b) acquisition of Class B Stock pursuant to the Offer and (c) acquisition of any additional Class B Stock actually acquired pursuant to Section 3.6 by (ii) the total number of outstanding shares of Class B Stock outstanding on the first anniversary of the Closing Date. "Class B Stock" means the Class B Common Stock, without par value, of the Company. -4- 10 "Closing" means the closing of the purchase and sale of the Newly Issued Shares pursuant to Section 2.1. "Closing Date" means the date the Closing is consummated. "Collaboration Agreement" shall mean the Collaboration Agreement and License between Investor and the Company dated as of the date hereof. "Common Stock" means the Class A Stock and Class B Stock of the Company. "Company" has the meaning set forth at the beginning of this Agreement. "Company Indemnified Parties" has the meaning set forth in Section 13.1. "Company Letter" means the letter, dated as of the date hereof, from the Company to Investor regarding certain matters related to this Agreement. "Competitor" means a person who either (i) sells seed for growing corn, sorghum, soybean, sunflower or alfalfa and who is estimated by Doane's (or, if such information is not provided by Doane's another independent source generally considered reliable) to have, or who has publicly stated that it does have, at least 2% of the United States or Argentine market for any such seed for any of the most recent two years for which such market share is reported or claimed or (ii) is primarily engaged in the business of selling foundation seed. "Confidentiality Agreement" means that certain letter agreement between Investor and the Company, dated May 16, 1995. "Corn Borer-Protected Corn License Agreement" shall mean the Corn Borer-Protected Corn License Agreement dated as of the date hereof between Investor and the Company. -5- 11 "Current Market Value" shall mean, with respect to any security, the average of the daily closing prices on the NASDAQ National Market (or such principal exchange on which such security may be listed) for such security for the 20 consecutive trading days commencing on the 22nd trading day prior to the date with respect to which the Current Market Value is being determined. The closing price for each day shall be the closing price, if reported, or if the closing price is not reported, the average of the closing bid and asked prices as reported by NASDAQ or a similar source selected from time to time by the Company for such purpose. "Director Representation Period" has the meaning set forth in Section 8.5. "Doane's" shall mean the U.S. Farm Corn Seed Study by Doane Marketing Research Inc., or if such information is not provided by Doane's, another independent source generally considered reliable. "Environmental Laws" has the meaning set forth in Section 4.11.2. "Equity" shall mean any and all shares of Common Stock of the Company, securities of the Company convertible into such shares, and options, warrants or other rights to acquire such shares. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "Fair Market Value" shall mean, as to any shares or other property, the cash price at which a willing seller would sell and a willing buyer would buy such shares or property in an arms'-length negotiated transaction without time constraints. "Final Governmental Order" has the meaning set forth in Section 9.1.1. -6- 12 "GAAP" means generally accepted accounting principles as in effect in the United States of America (as such principles may change from time to time). "Glyphosate-Protected Corn License Agreement" shall mean the Glyphosate-Protected Corn License Agreement dated as of the date hereof between Investor and the Company. "Governmental Authority" means any governmental, quasi-governmental, judicial, self-regulatory or regulatory agency or entity or subdivision thereof with jurisdiction over the Company or Investor or any of their subsidiaries or any of the transactions contemplated by this Agreement. "Hazardous Material" means any substance: (i) the presence of which requires investigation or remediation under any federal, state or local statute, regulation, ordinance, order, action policy or common law; (ii) which is defined and regulated as a "hazardous waste," "hazardous substance," pollutant or contaminant under any federal, state or local statute, regulation, rule or ordinance or amendments thereto; (iii) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, the state in which such substance is located or any political subdivision thereof; or (iv) the presence of which poses or threatens to pose a hazard to the health or safety of persons or the environment on or about the property on which such substance is located or adjacent properties. Hazardous Material shall include, without limitation, petroleum, including crude oil and any fraction thereof, asbestos and polychlorinated biphenyls (PCBs). "Indemnified Party" has the meaning set forth in Section 13.3. "Indemnifying Party" has the meaning set forth in Section 13.3. -7- 13 "Independent Director" means an individual who is not (apart from such directorship) (i) an officer or employee of the Company or any Affiliate of the Company, (ii) a director, officer or employee of Investor or any Affiliate of Investor, (iii) a Major A Stockholder, an Affiliate of a Major A Stockholder or a Permitted Transferee (as defined in the Stockholders' Agreement) of a Major A Stockholder, (iv) did not in either of the last two completed calendar years receive, and is not an officer, director, employee, stockholder holding more than 10% of the voting interest of, partner or Affiliate of any person ("Entity") that in either of such Entity's two most recent fiscal years, received, more than (A) $350,000 in revenues or other compensation or (B) 20% of such person's total revenues from the Company, the Investor, a Major A Stockholder or a Permitted Transferee or an Affiliate of any of the foregoing; provided no person who is serving as a director of the Company as of the date of this Agreement shall be excluded pusuant to this clause (iv) unless such person is also excluded pursuant to clauses (i), (ii), (iii) or (v) of this definition; or (v) any voting trustee under the Voting Trust Agreement among the Major A Stockholders and certain voting trustees dated as of January 31, 1996, but shall not include any Investor Nominee. "Interest Rate" shall mean the interest rate per annum publicly announced by Citibank N.A. as its "base rate" as in effect from time to time. "Issue Price" means $65.00 per share of Class A Stock and $65.00 per share of Class B Stock. "Investor" has the meaning set forth at the beginning of this Agreement. "Investor Indemnified Parties" has the meaning set forth in Section 13.2. "Investor Nominee" has the meaning set forth in Section 8.5. "Knowledge", when used in reference to the Company, means the knowledge of those officers and managerial employees of the Company identified in the Company -8- 14 Letter and limited as to scope with respect to certain individuals as specified in the Company Letter. "Liabilities, Actions and Damages" has the meaning set forth in Section 13.1. "Licenses" shall mean the European Corn Borer-Protected License Agreement, the Glyphosate-Protected Corn License Agreement and the CaMV Promoter License Agreement. "Lien" means any mortgage, lien, security interest, pledge, lease or other charge or encumbrance of any kind, including, without limitation, the lien or retained security title of a purchase money creditor or conditional vendor, and any easement, right of way or other encumbrance on title to real property, and any agreement to give any of the foregoing. "Major A Stockholder" shall have the meaning set forth in the Stockholders' Agreement. "Material Adverse Effect" means a material adverse effect, or the occurrence or existence of facts or circumstances reasonably expected to result in a material adverse effect, on the business, assets, results of operations, properties, financial or operating condition of the Company and its subsidiaries taken as a whole (without including economic or other matters affecting business or the seed industry generally) or the ability of the Company (and, to the extent applicable, its subsidiaries) to perform its (or their) obligations under this Agreement or consummate the transactions contemplated hereby or by the Ancillary Agreements. "Merrill Lynch" has the meaning set forth in Section 3.5.1 "Newly Issued Shares" has the meaning set forth in the third Whereas clause. -9- 15 "Newly Issued Class A Shares" has the meaning set forth in the third Whereas clause. "Newly Issued Class B Shares" has the meaning set forth in the third Whereas clause. "Offer" has the meaning set forth in the second Whereas clause. "Offer Conditions" has the meaning set forth in Section 3.1. "Offer Documents" has the meaning set forth in Section 3.4. "Offer Notice" shall have the meaning specified in Section 9.3.1. "Offer Price" has the meaning set forth in Section 9.3.2. "Offer Shares" means those shares of Class B Stock, if any, purchased by Investor pursuant to the Offer. "Outstanding Interest" shall mean the respective aggregate percentages of the outstanding shares of Class A Stock or Class B Stock beneficially owned (without regard to any rights Investor may have to acquire shares pursuant to Section 10.3) from time to time by Investor and its United States subsidiaries, including (for purposes of determining the outstanding shares of Class A Stock and Class B Stock) as Class A Stock any Equity convertible into or entitling the holder to acquire Class A Stock and as Class B Stock any Equity convertible into or entitling the holder to acquire Class B Stock (except by virtue of converting Class A Stock into Class B Stock), but excluding in each case stock options or other rights to acquire Class A Stock or Class B Stock granted under Stock Plans or under any stock option plan or any stock-based incentive compensation plan adopted in the future and Investor's rights described in Section 10.3 with respect thereto. -10- 16 "Percentage Limitation" shall have the meaning specified in Section 11.1. "Permitted Acquisition Proposal" shall have the meaning specified in Section 11.1. "Permitted Offering" shall have the meaning specified in Section 9.1.2 (ii). "person" means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. "Primary Business" means the research-based production, marketing, licensing and sale of agronomic seed, including both technology related thereto and products derived therefrom. "Reasonable Solicitation Efforts" shall have the meaning set forth in Section 8.5(i). "Registration Rights Agreement" shall have the meaning specified in Section 9.5. "Schedule 14D-1" has the meaning set forth in Section 3.4. "Schedule 14D-9" has the meaning set forth in Section 3.5.2. "SEC" means the Securities and Exchange Commission. "SEC Reports" has the meaning set forth in Section 4.5. "Securities Act" means the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder. "Shares" means issued and outstanding shares of Common Stock. -11- 17 "Significant Subsidiary" means any subsidiary of the Company or Investor, as the case may be, that constitutes a significant subsidiary within the meaning of Rule 1-02 of Regulation S-X of the SEC. "Small Offering" shall have the meaning specified in Section 10.2.2. "Stockholders' Agreement" shall mean the Stockholders' Agreement dated as of the date hereof by and among Investor and the Major A Stockholders. "Stock Plans" shall have the meaning specified in Section 4.3. "subsidiary" of any person means another person whose voting securities, other voting ownership or voting partnership interests are owned directly or indirectly by such first person in an amount sufficient to elect at least a majority of the board of directors or other governing body of such other person (or, if there are no such voting interests, more than 50% of the equity interests of such other person). "taxes" has the meaning set forth in Section 4.8. "Tender Offer Price" has the meaning specified in the second Whereas clause. "third party" means any person (including a "person" as defined in Section 13(d)(3) of the Exchange Act) or entity other than, or group not including, Investor or any Affiliate of Investor or the Company. "Total Voting Power" means, at any date, the total number of votes that may be cast in the election of directors of the Company at any meeting of stockholders of the Company held on such date, assuming all shares of Voting Stock were present and voted at such meeting, other than votes that may be cast only by one class or series of stock (other than Class A Stock) or upon the happening of a contingency. -12- 18 "Transfer" shall have the meaning set forth in Section 9.1.1. "United States subsidiary" means a direct or indirect subsidiary of Investor which is a corporation organized and existing under the laws of the United States and with its principal place of business in the United States. "Voting Stock" means Class A Stock and all other securities of the Company, if any, entitled to vote generally in the election of directors. ARTICLE 2 SALE AND PURCHASE OF THE NEWLY ISSUED SHARES 2.1. Sale and Purchase of the Newly Issued Shares. Upon the terms and subject to the satisfaction or waiver of all of the conditions set forth in Article 7, the Company shall issue and sell to Investor, and Investor shall purchase from the Company, in exchange for the Issue Prices thereof, the Newly Issued Shares at the Closing. Investor shall pay the Issue Prices with respect to the Newly Issued Shares to the Company at the Closing by bank wire transfer of immediately available funds to an account designated by the Company, or by such other means as is acceptable to the Company and Investor. 2.2. Closing and Deliveries. Subject to the satisfaction or waiver of all of the conditions set forth in Article 7, the Closing shall take place as promptly as practicable after the expiration of the Offer, or on such later date and time as may be mutually agreed by the parties within five Business Days after the last to occur of satisfaction or waiver of the respective conditions set forth in Article 7. Such Closing shall occur at the offices of Sidley & Austin, One First National Plaza, Chicago, Illinois 60603, or at such other place and time as Investor and the Company agree in writing. -13- 19 2.2.1. Deliveries by Investor. At the Closing, Investor shall deliver to the Company the following: (i) the Issue Price for each of the Newly Issued Shares; and (ii) such other documents and instruments, duly executed to the extent required, as may be reasonably requested by the Company in order to consummate the transactions contemplated hereby. 2.2.2. Deliveries by the Company. At the Closing, the Company shall deliver to Investor the following: (i) stock certificates in such denominations as may be reasonably requested by Investor evidencing the Newly Issued Shares; and (ii) such other documents and instruments, duly executed to the extent required, as may reasonably requested by Investor in order to consummate the transactions contemplated hereby. ARTICLE 3 THE OFFER 3.1. Commencement of the Offer. As promptly as practicable, but no later than the fifth Business Day following the public announcement of this Agreement, Purchaser shall commence the Offer within the meaning of Rule 14d-2 under the Exchange Act. The obligations of Investor to accept for payment, and pay for, any Offer Shares tendered pursuant to the Offer shall be subject to (the following being referred to as the "Offer Conditions") the satisfaction or waiver of the conditions set forth in Exhibit A attached hereto. -14- 20 3.2. Changes to the Offer. Investor may increase the Tender Offer Price and may make any other changes in the terms and conditions of the Offer, provided that, unless previously approved by the Company in writing, Investor may not (i) decrease the Tender Offer Price, (ii) change the form of consideration payable in the Offer, (iii) increase or decrease the maximum number of Shares sought pursuant to the Offer, (iv) add to or modify the Offer Conditions (v) amend the Offer in a manner which would require the extension of the originally scheduled expiration date to a date later than 50 business days from the date of the commencement of the Offer, as required by any rule, regulation, interpretation or position of the SEC or the staff or (vi) otherwise amend the Offer in any manner adverse to the interests of the Company or its stockholders. Subject to the terms and conditions thereof, the Offer shall expire at midnight, New York City time, on the date that is not more than 30 business days from the date the Offer is first published or sent to holders of Class B Stock. Investor shall be required to extend the Offer for at least ten business days from the originally scheduled expiration date and shall be entitled to extend the Offer for up to 20 business days from such original expiration date (A) if at the scheduled expiration date of the Offer any of the Offer Conditions shall not have been satisfied or waived, until such time as such Offer Conditions are satisfied or waived and (B) for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer, provided, however, that Investor shall terminate the Offer if this Agreement is terminated. 3.3. Purchase. Provided that this Agreement shall not have been terminated in accordance with Article 12 and provided that all Offer Conditions shall have been satisfied or waived by Investor in accordance with this Article 3, Investor shall accept for payment and purchase, in accordance with the terms of the Offer, shares of Class B Stock validly tendered and not withdrawn pursuant to the Offer (up to the amount sought pursuant to the Offer). The Offer Conditions are for the sole benefit of Investor and may be asserted by Investor regardless of the circumstances giving rise to any such condition or may be waived by Investor, in whole or in part at any time and from time to time, in Investor's sole discretion. The failure by Investor at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to -15- 21 particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination (which shall be made in good faith) by Investor with respect to any of the foregoing conditions (including without limitation the satisfaction of such conditions) shall be final and binding on the parties. The Offer Price (to the extent, if any, adjusted pursuant to the Offer) shall be paid net to the seller in cash, less any required withholding of taxes, upon the terms and subject to the conditions of the Offer as soon as practicable after expiration of the Offer. It is the intention of Investor and the Company that the purchase by Investor of the Offer Shares shall not be a condition to the purchase by Investor of the Newly Issued Shares. 3.4. Schedule 14D-1 and Other Offer Documents. On the date the Offer is commenced, Investor shall file with the SEC a Tender Offer Statement on Schedule 14D-1 (together with all amendments and supplements thereto, the "Schedule 14D-1") with respect to the Offer. The Schedule 14D-1 shall contain as an exhibit or incorporate by reference the Offer to Purchase (or portions thereof) and form of the related letter of transmittal and summary advertisement to be used in connection with the Offer (the Schedule 14D-1 and such other documents, together with any supplements thereto or amendments thereof, being referred to herein collectively as the "Offer Documents"). The Company shall provide to Investor in writing all information regarding the Company necessary for the preparation of the Offer Documents, which information shall be accurate and shall not contain any material misstatement of fact or omit to state any material fact necessary to make the statements included in such information, in light of the circumstances under which they are made, not misleading. The Company and its counsel shall be given a reasonable opportunity to review and comment on the Offer Documents prior to the filing thereof with the SEC and the distribution thereof to the Company's stockholders. Investor shall provide to the Company and its counsel any comments that Investor receives (directly or through its counsel) from the SEC or its staff with respect to the Offer Documents promptly after receipt of such comments. The Offer Documents shall comply in all material respects with the provisions of applicable federal securities laws and shall not, on the date the Offer Documents are filed with the SEC and on the date first published, sent or given to the Company's stockholders, -16- 22 as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by Investor with respect to information supplied by the Company in writing specifically for inclusion in the Offer Documents. If any event relating to the Company or any of its Affiliates, officers or directors shall be discovered by the Company which causes the information previously supplied by the Company to Investor for use in the Offer Documents to contain any untrue statements of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, the Company shall promptly inform Investor. Investor and the Company shall each promptly correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect, and Investor shall promptly amend and supplement the Offer Documents if and to the extent that they shall have become false or misleading in any material respect and shall promptly cause the Offer Documents as so amended and supplemented to be filed with the SEC and to be disseminated to the Company's stockholders, in each case as and to the extent required by applicable federal securities laws. 3.5. Actions by the Company. 3.5.1. Approval and Recommendation of Offer. On January 31, 1996, the Company's Board of Directors, at a meeting duly called, unanimously adopted resolutions by which the Board (i) determined that this Agreement and the transactions contemplated hereby, including the Offer, are fair to and in the best interest of the Company and the Company's stockholders, (ii) approved this Agreement and the transactions contemplated hereby, including the Offer, and (iii) resolved to recommend that the stockholders of the Company accept the Offer and tender their Shares thereunder to Investor. In connection with such approval by the Board, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") delivered to the Board its written opinion dated the date of such meeting to the effect that, as of the date of such opinion, the proposed consideration to be received by the Company and the holders of Class B Common Stock is fair to the Company and such -17- 23 holders from a financial point of view. The Company is authorized by Merrill Lynch to permit the inclusion of such fairness opinion in the Offer Documents and the Schedule 14D-9 referred to below. The Company hereby consents to the inclusion in the Offer Documents of the recommendations of the Board described in this Section 3.5.1. 3.5.2. Schedule 14D-9. As promptly as practicable, but no later than the tenth Business Day following the commencement of the Offer, the Company shall file with the SEC a solicitation/recommendation statement on Schedule 14D-9 pertaining to the Offer (together with any amendments or supplements thereto, the "Schedule 14D-9") containing the Board's recommendation described in Section 3.5.1. The Company shall promptly mail the Schedule 14D-9 to the Company's stockholders. Investor and its counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 prior to the filing thereof with the SEC and its dissemination to the Company's stockholders. The Company shall provide to Investor and its counsel any comments that the Company receives (directly or through its counsel) from the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of such comments. The Schedule 14D-9 shall comply in all material respects with the provisions of applicable federal securities laws and shall not, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representations are made by the Company with respect to information supplied by Investor in writing specifically for inclusion in the Schedule 14D-9. If any event relating to Investor or any of its Affiliates, officers or directors shall be discovered by Investor which causes the information previously supplied by Investor to the Company for use in the Schedule 14D-9 to contain any untrue statements of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, Investor shall promptly inform the Company. Investor and the Company shall each promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent that it shall have become false or misleading in any material respect, and the Company shall promptly amend and supplement the Schedule 14D-9 if and to the extent -18- 24 that it shall have become false or misleading in any material respect and shall promptly cause the Schedule 14D-9 as so amended and supplemented to be filed with the SEC and disseminated to the Company's stockholders in each case as and to the extent required by applicable federal securities laws. 3.5.3. Stockholder Information. In connection with the Offer the Company shall promptly furnish Investor with mailing labels, security position listings and any available listing or computer files containing the names and addresses of the record holders of the Shares as of a recent date and shall furnish Investor with such additional information and assistance (including, without limitation, updated lists of stockholders, mailing labels and list of securities positions) as Investor or its agents may reasonably request for the purpose of communicating the Offer to the record and beneficial holders of Shares. Subject to the requirements of applicable law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the transactions contemplated by this Agreement, Investor shall and shall cause its Affiliates, associates, agents and advisors to, hold the information contained in any such labels, listings and files confidential and use such information only in connection with the Offer, and, if this Agreement shall be terminated, shall deliver to the Company all copies of such information and any extracts or summaries thereof then in their possession or control. 3.6. Acquisition of Additional Class B Shares. If Investor shall beneficially own less than 40% of the outstanding Common Stock on the first day after completion of the Offer and the Closing, then Investor shall have the right, at any time during the period ending on the first anniversary of the Closing Date to acquire in the market at prices prevailing from time to time up to an additional number of shares of Class B Stock such that after completion of all such purchases, the total Common Stock beneficially owned by Investor and its Affiliates does not exceed 40% of the Common Stock outstanding at such time. The Investor may from time to time request that the Company provide information as to the number of shares of Common Stock of each class outstanding as of the most recent conveniently available date, provided, the Investor shall be entitled to rely on the number of outstanding shares of Common Stock, Class A Stock and Class B Stock as most recently -19- 25 reported by a filing of the Company pursuant to the Exchange Act unless the Company shall advise the Investor in writing of more recent information. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to Investor as follows: 4.1. Organization, Standing and Corporate Power. Each of the Company and its Significant Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated and has the requisite corporate power and authority to carry on its business as now being conducted. The Company and each of its Significant Subsidiaries is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) could not reasonably be expected to have a Material Adverse Effect on the Company. 4.2. Subsidiaries. Schedule 4.2 to the Company Letter lists each subsidiary of the Company. All the outstanding shares of capital stock of each Significant Subsidiary that is a corporation have been validly issued and are fully paid and nonassessable. Except as set forth in Schedule 4.2 to the Company Letter, the entire equity interest in each subsidiary of the Company is owned by the Company, by another subsidiary of the Company or by the Company and another such subsidiary, free and clear of all Liens. 4.3. Capital Structure; New Shares. The authorized capital stock of the Company consists of 500,000 shares of Preferred Stock, par value $1.00 per share ("Preferred Stock"), and 20,000,000 shares of Common Stock, without par value, divided into two classes, consisting of 5,000,000 shares of Class A Stock and 15,000,000 shares of Class B Stock. At -20- 26 the close of business on January 16, 1996, (i) no shares of Preferred Stock were outstanding, (ii) 763,799 shares of Class A Stock and 4,431,327 shares of Class B Stock were issued and outstanding, (iv) no shares of Class A Stock and 73,201 shares of Class B Stock were held by the Company in treasury, and (v) 349,689 shares of Class A Stock were reserved for issuance pursuant to outstanding stock options or other rights to purchase shares of Class A Stock under the Company's Long Term Incentive Plan, the Company's Savings and Investment Plan and the Company's Director Stock Option Plan (the "Stock Plans") and an additional 417,340 shares of Common Stock were reserved for the grant of additional purchase rights thereunder. Except as set forth above or as otherwise expressly provided herein, and except for conversions of Class A Stock to Class B Stock and the issuance of shares pursuant to options granted under the Stock Plans, as of the date hereof, no shares of capital stock or other voting securities of the Company were issued, reserved for issuance or outstanding and there are not any phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any capital stock of the Company ("Stock Equivalents"). There are no outstanding stock appreciation rights ("SARs") with respect to Common Stock. Upon issuance pursuant to the terms of this Agreement, the Newly Issued Shares will be duly authorized and no further approval of the stockholders or the directors of the Company will be required by the Company for the issuance and sale of the Newly Issued Shares as contemplated by this Agreement. When issued and sold to Investor upon payment of the Issue Price, the Newly Issued Shares will be duly authorized, validly issued, fully paid and non-assessable. Other than this Agreement, the Newly Issued Shares are not subject to any voting trust agreement or other contract, agreement, arrangement, commitment or understanding, including any such agreement, arrangement, commitment or understanding restricting or otherwise relating to the voting or disposition of the Newly Issued Shares. All outstanding shares of capital stock of the Company are, and all shares that may be issued pursuant to the Stock Plans and the other agreements and instruments listed above will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are not any outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which stockholders of the Company may vote. Except as set forth above and in Schedule -21- 27 4.3 of the Company Letter, and as otherwise expressly set forth in this Agreement, as of the date of this Agreement, there are not any securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Significant Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Significant Subsidiaries to issue, deliver or sell or create, or cause to be issued, delivered or sold or created, additional shares of capital stock or other voting securities or Stock Equivalents of the Company or of any of its Significant Subsidiaries or obligating the Company or any of its Significant Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. As of the date of this Agreement, there are not any outstanding contractual obligations of the Company or any of its Significant Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Significant Subsidiaries except pursuant to existing employee arrangements. 4.4. Authority; Noncontravention. The Company has requisite corporate power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated by this Agreement and such Ancillary Agreements. The execution and delivery by the Company of this Agreement and each Ancillary Agreement to which it is a party and the consummation by the Company of the transactions contemplated by this Agreement and such Ancillary Agreements have been duly authorized by all necessary corporate action on the part of the Company. This Agreement and the Ancillary Agreements to which it is a party have been duly executed and delivered by the Company and constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms. Except as set forth on Schedule 4.4 to the Company Letter, the execution and delivery of this Agreement and the Ancillary Agreements to which it is a party by the Company did not, and the consummation of the transactions contemplated by this Agreement and such Ancillary Agreements and compliance with the provisions of this Agreement and such Ancillary Agreements without obtaining the consent of any third party will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right to termination, cancellation or acceleration of any obligation or to loss -22- 28 by the Company or any of its Significant Subsidiaries of a material benefit under, or the creation of any material additional benefit to any third party under, or result in the creation of any Lien upon any of the properties or assets of the Company or any of its subsidiaries under, (i) the Certificate of Incorporation or Bylaws of the Company or the comparable charter or organizational documents of any of its Significant Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit or license applicable to the Company or any of its subsidiaries or their respective properties or assets or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company or any of its subsidiaries or their respective properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, violations, defaults, rights or Liens that individually or in the aggregate could not reasonably be expected to (x) have a Material Adverse Effect on the Company, (y) materially impair the ability of the Company to perform its obligations under this Agreement or any Ancillary Agreement to which it is a party or (z) prevent the consummation of any of the transactions contemplated by this Agreement or any of such Ancillary Agreements. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority or any party to a Material Contract (as defined in Section 4.12 is required by or with respect to the Company or any of its Significant Subsidiaries or its subsidiaries that are parties to such a Material Contract in connection with the execution and delivery of this Agreement and the Ancillary Agreements to which it is a party or the consummation by the Company of the transactions contemplated by this Agreement and such Ancillary Agreements, except for (A) any filings required pursuant to foreign antitrust and competition law statutes and regulations, (B) the filing with the SEC of (x) a solicitation/recommendation statement on Schedule 14D-9 and (y) such reports under Sections 12 and 13(a) of the Exchange Act as may be required in connection with this Agreement, such Ancillary Agreements and the transactions contemplated by this Agreement and such Ancillary Agreements, and (C) such other consents, approvals, orders, authorizations, registrations, declarations and filings as are set forth on Schedule 4.4 to the Company Letter. -23- 29 4.5. SEC Reports; Undisclosed Liabilities. The Company has timely filed all required reports, schedules, forms, statements and other documents with the SEC since December 31, 1994 (the "SEC Reports"). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Reports, and none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial position of the Company and its subsidiaries as of the dates thereof and their consolidated statements of operations, stockholders' equity and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the SEC Reports, to the Company's knowledge neither the Company nor any of its subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by generally accepted accounting principles to be set forth on a consolidated balance sheet of the Company and its subsidiaries or in the notes thereto, other than liabilities and obligations incurred in the ordinary course of business consistent with prior practice and experience since August 31, 1995 and liabilities which would not, individually or in the aggregate, have a Material Adverse Effect. 4.6. Absence of Certain Changes or Events. Except as set forth on Schedule 4.6 to the Company Letter, since August 31, 1995, the Company and each of its subsidiaries has conducted its business only in the ordinary course, and there has not been (i) one or more events or occurrences which individually or in the aggregate has had or would reasonably be expected to result in a Material Adverse Effect, (ii) any declaration, setting -24- 30 aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to any of the Company's capital stock, except for declaration and payment to holders of record of Common Stock of normal quarterly dividends consistent with existing practice, (iii) any split, combination or reclassification of any of its capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of the Company's capital stock, or (iv) any change in accounting methods, principles or practices by the Company materially affecting its assets, liabilities or business, except insofar as may have been required by a change in generally accepted accounting principles. 4.7. Litigation. Except as set forth on Schedule 4.7 to the Company Letter, there is no suit, action or proceeding pending or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries that, individually or in the aggregate, could reasonably be expected to (i) have a Material Adverse Effect, (ii) materially impair the ability of the Company to perform its obligations under this Agreement or any Ancillary Agreement to which it is a party or (iii) prevent the consummation of any of the transactions contemplated by this Agreement or any such Ancillary Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Authority or arbitrator outstanding against the Company or any of its subsidiaries having, or that could reasonably be expected to have, a Material Adverse Effect. 4.8. Taxes. The Company and each of its subsidiaries has timely filed all tax returns and reports required to be filed by them either on a separate or combined or consolidated basis except where failure to timely file could not reasonably be expected to have a Material Adverse Effect. All such returns are complete and accurate except where the failure to be complete or accurate could not reasonably be expected to have a Material Adverse Effect. Each of the Company and its subsidiaries has paid or caused to be paid all taxes shown as due on such returns and all material taxes for which no return was filed except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. No deficiencies for any taxes have been asserted, proposed or assessed against the Company or any of its subsidiaries that have not been paid or otherwise settled -25- 31 or are not otherwise being challenged under appropriate procedures except for deficiencies the assertion, proposing or assessment of which could not reasonably be expected to have a Material Adverse Effect, and no requests for waivers of the time to assess any such taxes are pending. As used in this Agreement, "taxes" shall include all Federal, state, local and foreign income, property, sales, excise, employment, withholding and other taxes, tariffs or governmental charges of any nature whatsoever. 4.9. Voting Requirements. No vote of the holders of any class or series of the Company's capital stock is necessary to approve this Agreement, the Ancillary Agreements to which the Company is a party or the transactions contemplated by this Agreement and such Ancillary Agreements. 4.10. Brokers. No broker, investment banker, financial advisor or other person, other than Merrill Lynch, the fees and expenses of which will be paid by the Company, is entitled to any broker's, finder's, financial advisor's or other similar fee in connection with the transactions contemplated by this Agreement and the Ancillary Agreements based upon arrangements made by or on behalf of the Company and its subsidiaries. 4.11. Compliance with Laws. 4.11.1. The Company and each of its subsidiaries has in effect all Federal, state, local and foreign governmental approvals, authorizations, certificates, filings, franchises, licenses, notices, permits and rights ("Permits") necessary for it to own, lease or operate its properties and assets and to carry on its business as now conducted, and there has not occurred any default under any Permit, except for absence of Permits and for defaults under Permits which absence or defaults, individually or in the aggregate, have not had and could not reasonably be expected to have a Material Adverse Effect. Except as disclosed in Section 4.11.1 to the Company Letter, the Company and its subsidiaries are in compliance with all applicable statues, laws, ordinances, regulations, rules, judgments, decrees or orders of any Governmental Authority except where failures to so comply, -26- 32 individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 4.11.2. Except as set forth in Schedule 4.11.2 to the Company Letter, (i) neither the Company nor any of its subsidiaries has received any written communication from a Governmental Authority that alleges that the Company or any subsidiary thereto is not in compliance with any Environmental Law (as defined below) if such non-compliance could reasonably be expected to have a Material Adverse Effect and (ii) the Company has no knowledge of any environmental materials or information, other than as listed in the Schedule 4.11.2 to the Company Letter, including on-site or off-site storage, disposal or releases of Hazardous Materials, that could reasonably be expected to have a Material Adverse Effect on the Company. As used in this Agreement, the term "Environmental Laws" means any applicable treaties, laws, regulations, enforceable requirements, orders, decrees or judgments issued, promulgated or entered into by any Governmental Authority, which relate to (A) pollution or protection of the environment or (B) the generation, storage, use, handling, disposal or transportation of or exposure to Hazardous Materials, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section Section 9601, et seq. ("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section Section 6901 et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section Section 1251 et seq., the Clean Air Act of 1970, as amended, 42 U.S.C. Section Section 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. Section Section 2601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section Section 1801 et seq., and any similar or implementing state or local law, and all amendments or regulations promulgated thereunder. 4.12. Material Contracts. All contracts, leases and other agreements to which the Company or any of its subsidiaries is a party that would be required to be filed as Exhibits to the SEC Documents (the "Material Contracts") have been filed as Exhibits to the SEC Documents. Except as disclosed in Schedule 4.12 to the Company Letter, (i) each Material Contract is in full force and effect except as the same may have expired in accordance with its terms; (ii) the Company and its subsidiaries have performed all the material obligations required to be performed thereby under each Material Contract; (iii) -27- 33 neither the Company nor any of its subsidiaries has received any written assertion of default under any Material Contract; (iv) neither the Company nor any of its subsidiaries expects or has received any notice related to any termination or material change to, or proposal with respect to, any of the Material Contracts as a result of the transactions contemplated by this Agreement and the Ancillary Agreements to which it is a party; and (v) the Company has no knowledge of any material breach or anticipated material breach by any other party to any Material Contract; in each case except where the result of a failure of a representation contained in clauses (i), (ii), (iii), (iv) or (v) above would not reasonably be expected to have a Material Adverse Effect. 4.13. No Untrue Statement or Omission. Neither this Agreement nor any Ancillary Agreement to which the Company is a party nor any exhibit or schedule hereto or thereto, nor any statement, list or certificate delivered to Investor pursuant to this Agreement or any such Ancillary Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading. ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF INVESTOR 5.1. Organization; Authority; Noncontravention. Investor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated. Investor has all requisite corporate power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated by this Agreement and the Ancillary Agreements. The execution and delivery by Investor of this Agreement and each Ancillary Agreement to which it is a party and the consummation by Investor of the transactions contemplated by this Agreement and the Ancillary Agreements have been duly authorized by all necessary corporate action on the part of Investor. This Agreement and the Ancillary Agreements to which it is a party -28- 34 have been duly executed and delivered by Investor, and constitute valid and binding obligations of Investor, enforceable against Investor in accordance with their respective terms. The execution and delivery by Investor of this Agreement and the Ancillary Agreements to which it is a party did not, and the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and compliance with the provisions of this Agreement and the Ancillary Agreements to which it is a party without obtaining the consent of any third party will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss by Investor or any of its Significant Subsidiaries of a material benefit under, or the creation of any material additional benefit to any third party under, or result in the creation of any Lien upon any of the properties or assets of Investor or any of its Significant Subsidiaries under, (i) the certificate of incorporation or bylaws of Investor, (ii) any loan or credit agreement, note, bond, mortgage indenture, lease or other agreement, instrument, permit or license applicable to Investor or its subsidiaries or their respective properties or assets or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Investor, or its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflict, violations, defaults, rights or Liens that individually or in the aggregate could not reasonably be expected to impair the ability of Investor to perform its obligations under this Agreement and the Ancillary Agreements or prevent the consummation of any of the transactions contemplated by this Agreement and the Ancillary Agreements. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority or any other third party is required by or with respect to Investor in connection with the execution and delivery of this Agreement and the Ancillary Agreements to which it is a party or the consummation by Investor of any transaction contemplated by this Agreement or any Ancillary Agreement, except for (i) any filings required pursuant to the foreign antitrust and competition law statutes and regulations, (ii) the filing with the SEC of the Offer Documents, and such statements and reports under Sections 12, 13 and 16(a) of the Exchange Act as may be required in connection with this Agreement, the Ancillary Agreements and the transactions contemplated by this Agreement -29- 35 and the Ancillary Agreements, and (iii) such other consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under the "takeover" or "blue sky" laws of various states. 5.2. Brokers. No broker, investment banker, financial advisor or other person, other than Robertson, Stephens & Company LLC, the fees and expenses of which will be paid by Investor, is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated by this Agreement and the Ancillary Agreements based upon arrangements made by or on behalf of Investor and its subsidiaries. 5.3. Investment Intent. Investor is purchasing or acquiring the Newly Issued Shares for its own account for investment and not with a present view to, or for sale in connection with, any distribution thereof in violation of the Securities Act. The certificates evidencing the Newly Issued Shares and any other Shares issued to Investor pursuant to this Agreement shall bear substantially the following legend until such time as the same is no longer required under the applicable requirements of the Securities Act or applicable state securities or blue sky laws and under this Agreement and the Ancillary Agreements: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THE TRANSFER OF SUCH SHARES IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE INVESTMENT AGREEMENT DATED AS OF JANUARY 31, 1996, BETWEEN THE COMPANY AND INVESTOR, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SHARES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS WILL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE. THESE SECURITIES HAVE NOT BEEN -30- 36 REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE THEREWITH." 5.4. Acquisition for Investment and Rule 144. Investor understands that the Newly Issued Shares will not be registered under the Securities Act by reason of a specific exemption from the registration provision of the Securities Act which depends upon, among other things, the bona fide nature of Investor's investment intent as expressed herein. Investor acknowledges that the Newly Issued Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Investor has been advised or is aware of the provisions of Rule 144 promulgated under the Securities Act which permits limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions. Investor is aware that the certificates representing the Newly Issued Shares will bear such legends relating to restrictions on resale under the Securities Act as provided in Section 5.3 and the Company under certain conditions may issue stop transfer instructions to its stock transfer agent with respect to the Newly Issued Shares. 5.5. Legal Investment. The purchase of the Newly Issued Shares by Investor hereunder is legally permitted by all laws and regulations to which Investor is subject and all consents, approvals, authorizations of or designations, declarations or filings in connection with the valid execution and delivery of this Agreement by Investor and the purchase of the Newly Issued Shares by Investor have been obtained, or will be obtained prior to the Closing Date. 5.6. Purchase Entirely for Own Account. The Newly Issued Shares will be acquired for investment for Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, -31- 37 transfer or grant participations to such person or to any third person, with respect to any of the Newly Issued Shares. 5.7. Current Ownership. Except for it rights to acquire Newly Issued Shares pursuant to this Agreement, neither Investor nor any of its Affiliates beneficially owns any shares of Class A Stock or Class B Stock; provided, with respect to any Affiliate of Investor which is not incorporated or otherwise organized in the United States, Investor shall be entitled to correct this representation by advising the Company in writing at any time within 90 days of the date of this Agreement of the beneficial ownership of any shares of Class A or Class B Stock by any such Affiliate, including the amount thereof, nature of ownership, identity of the beneficial owner, and nature of its relationship with Investor, in such detail as the Company shall reasonably request. Investor shall cause any Affiliate which is not a United States subsidiary of Investor to divest such beneficial ownership within 30 days after Investor becomes aware of such ownership, but only in the manner permitted by Section 9.1.2 (without regard to the time limitations thereof and excluding Transfers permitted pursuant to 9.1.2(i)) and shall promptly advise the Company upon completion of any such divestitures. ARTICLE 6 COVENANTS OF THE COMPANY 6.1. Conduct of Business by the Company Prior to Closing. During the period from the date of this Agreement until the Closing, the Company shall, and shall cause its subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course in substantially the same manner as heretofore conducted. Without limiting the generality of the foregoing, the Company will not (and as to Section 6.1.3, or Section 6.1.5 as applicable to Section 6.1.3, neither the Company nor any subsidiary shall) take any of the following actions: -32- 38 6.1.1. (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than dividends on its Common Stock to be declared and paid only at the customary rates and times, or (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; 6.1.2. issue, deliver, sell, pledge or otherwise encumber any shares of capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities (other than (i) the issuance of new options or Common Stock under existing Stock Plans or Common Stock upon the exercise or conversion of rights outstanding on the date of this Agreement and in accordance with their present terms, (ii) the purchase of Common Stock pursuant to such Stock Plans, in accordance with their terms and (iii) the issuance and sale of the Newly Issued Shares in accordance with the terms hereof); 6.1.3. acquire, in a single transaction or in a series of related transactions, any business or assets outside the Primary Business of the Company that would be equal in amount to more than 25% of the total consolidated assets of the Company as shown on the Company's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made whether such acquisition be by merger or consolidation or the purchase of stock or assets or otherwise; 6.1.4 amend its certificate of incorporation or bylaws except for the adoption of Amended Bylaws by the Company; or 6.1.5 authorize, or commit or agree to take, any of the foregoing actions. -33- 39 ARTICLE 7 CONDITIONS TO CLOSING 7.1. Obligations of Investor with respect to the Closing. The obligation of Investor to consummate the transactions contemplated to occur at the Closing is subject to the satisfaction (or waiver by Investor) as of the Closing of the following conditions: 7.1.1. The representations and warranties of the Company set forth in this Agreement and in the Ancillary Agreements to which it is a party qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, as of the date hereof and as of the time of the Closing as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date) and Investor shall have received a certificate to such effect dated the Closing Date and executed by a duly authorized officer of the Company. The Company shall have performed or complied in all material respects with all obligations and covenants required by this Agreement and the Ancillary Agreements to which it is a party to be performed or complied with by the Company by the time of the Closing. 7.1.2. There shall not be threatened or pending by any Governmental Authority any suit, action or proceeding, and there shall not be pending by any other person any suit, action or proceeding, which has a substantial likelihood of success, (i) seeking to restrain or prohibit the purchase and sale of the Newly Issued Shares or the Class B Stock pursuant to the Offer, (ii) seeking to compel the Company to dispose of or hold separate any material portion of the business or -34- 40 assets of the Company and its subsidiaries, taken as a whole, or to compel Investor or its subsidiaries to dispose of or hold separate any material portion of the business or assets of Investor and its subsidiaries, as a result of any of the transactions contemplated by this Agreement or the Ancillary Agreements or (iii) seeking to prohibit Investor from effectively exercising any of its material rights under this Agreement or any Ancillary Agreement. 7.1.3. No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Authority or other legal restraint or prohibition preventing the consummation of any of the transactions contemplated hereby or by the Ancillary Agreements or having any of the other consequences described in Section 7.1.2 shall be in effect. 7.1.4. The Amended Bylaws shall have been duly authorized, approved and effected. 7.1.5. The Company shall have furnished to Investor an opinion of John H. Witmer, Jr., Senior Vice President and General Counsel of the Company, in the form attached hereto as Exhibit C. 7.1.6. During the period from the date of this Agreement until the Closing Date, neither the Company nor any subsidiary shall have sold or otherwise disposed of (or authorized, committed or agreed to sell or otherwise dispose of), in a single transaction or in a series of transactions, excluding sales of inventory or other assets in the normal course of business, any business or assets relating to the Primary Business of the Company that constitute more than five percent of the total consolidated assets of the Company as shown on the Company's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made, whether such sale or disposition be by merger or consolidation or the sale of stock or assets or otherwise. -35- 41 7.2. Obligations of the Company with respect to the Closing. The obligation of the Company to consummate the transactions contemplated to occur at the Closing is subject to the satisfaction (or waiver by the Company) as of the Closing of the following conditions: 7.2.1. The representations and warranties of Investor set forth in this Agreement and in the Ancillary Agreements qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, as of the date hereof and as of the time of the Closing as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date) and the Company shall have received a certificate to such effect dated the Closing Date and executed by a duly authorized officer of Investor. Investor shall have performed or complied in all material respects with all obligations and covenants required by this Agreement and the Ancillary Agreements to be performed or complied with by Investor by the time of the Closing. 7.2.2. There shall not be threatened or pending by any Governmental Authority any suit, action or proceeding and there shall not be pending by any other person any suit, action or proceeding, which has a substantial likelihood of success, (i) seeking to restrain or prohibit the purchase and sale of the Newly Issued Shares or the Class B Stock pursuant to the Offer, (ii) seeking to compel the Company to dispose of or hold separate any material portion of the business or assets of the Company and its subsidiaries, taken as a whole, or to compel Investor or its subsidiaries to dispose of or hold separate any material portion of the business or assets of Investor and its subsidiaries, as a result of any of the transactions contemplated by this Agreement or the Ancillary Agreements or (iii) seeking to prohibit the Company from effectively exercising any of its material rights under this Agreement or any Ancillary Agreement. -36- 42 7.2.3. No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent inunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Authority or other legal restraint or prohibition preventing the consummation of any of the transactions contemplated hereby or by the Ancillary Agreements or having any of the other consequences described in Section 7.2.2 shall be in effect. 7.2.4. The Offer shall have expired and Investor shall have purchased or accepted for payment and purchase any Class B Stock which it will acquire pursuant to the Offer. 7.2.5. Investor shall have furnished to the Company an opinion of Frank E. Vigus, Assistant General Counsel of Investor, in the form attached hereto as Exhibit D. ARTICLE 8 CERTAIN ADDITIONAL AGREEMENTS 8.1. Confidentiality. Except as required by law, each of the Company and Investor shall hold, and shall cause its respective officers, employees, accountants, counsel, financial advisors and other representatives and affiliates to hold, in confidence any nonpublic information obtained from the other pursuant to the Confidentiality Agreement or from time to time hereafter as may be disclosed to the Company, the Investor or any Investor Nominee until such time as such information becomes publicly available (otherwise than through the wrongful act of any such person) and shall use all reasonable efforts to cause such persons not to disclose such information to others without the prior written consent of the Company or Investor, as the case may be. In the event of the termination of this Agreement for any reason, the Company and Investor shall promptly return or destroy all documents containing nonpublic information so obtained from the other party or any of its subsidiaries and any copies made of such documents. -37- 43 8.2. Reasonable Efforts; Notification. 8.2.1. Upon the terms and subject to the conditions set forth in this Agreement, each of the parties shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement and the Ancillary Agreements to which they are parties, including (i) the obtaining of all necessary actions or nonactions, waivers, consents and approvals from Governmental Authorities and the making of all necessary registrations and filings (including filings with Governmental Authorities, if any) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Authority, (ii) the obtaining of all necessary consents, approvals or waivers from third parties, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or any of such Ancillary Agreements or the consummation of the transactions contemplated by this Agreement or such Ancillary Agreements; including seeking to have any stay or temporary restraining order entered by any court or other Governmental Authorities vacated or reversed, and (iv) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement and such Ancillary Agreements. 8.2.2. The Company shall give prompt notice to Investor, and Investor shall give prompt notice to the Company, of (i) any representation or warranty made by it contained in this Agreement or any Ancillary Agreement that is qualified as to materiality becoming untrue or inaccurate in any respect or any such representation or warranty that is not so qualified becoming untrue and inaccurate in any material respect or (ii) the failure by it to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement or any Ancillary Agreement; provided, however, that no such notification shall affect the representations, warranties, -38- 44 covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement or the Ancillary Agreements. 8.3. Fees and Expenses. All fees and expenses incurred in connection with the Offer, this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees or expenses, whether or not the Offer or the sale of the Newly Issued Shares on the terms contemplated hereby is consummated. 8.4. Public Announcements. Investor and the Company shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement and the Ancillary Agreements and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, court process or by obligations pursuant to any listing agreement with any national securities exchange. 8.5. Election of Directors. (i) No later than 20 Business Days after the Closing Date, subject to occurrence of the Closing, the Board of Directors of the Company shall be increased in number so that Investor may nominate one director whose term shall expire at the Company's 1999 annual meeting of stockholders. In addition, subject to the occurrence of the Closing, if Investor shall have acquired beneficial ownership of at least 20% of the outstanding Common Stock in accordance with the terms hereof (including, without limitation, pursuant to Section 3.6), Investor may nominate an additional director who shall be placed on the ballot for election at the Company's annual meeting of stockholders to be held in January, 1997 and whose term shall expire at the Company's 2000 annual meeting (each such director and any other persons nominated from time to time by Investor pursuant to this Section 8.5 being referred to herein as an "Investor Nominee"). Any Investor Nominee may be an employee, officer or director of Investor or any of its subsidiaries and each Investor Nominee shall be reasonably satisfactory to the Company. The Company shall use all reasonable efforts at all times thereafter during which (x) Investor shall retain -39- 45 beneficial ownership of at least 7.5% of the Class A Stock and that number of shares of Common Stock (the "75% Limitation") as is equal to at least 75% of the highest percentage of the outstanding Common Stock as is beneficially owned by Investor after completion of the Offer, the Closing and the acquisition of any additional shares of Class B Stock acquired by Investor pursuant to Section 3.6, and (y) the Collaboration Agreement shall remain in full force and effect (except if terminated by reason of material breach of its terms by the Company), to cause the Investor Nominees to be elected to the Board of Directors (such efforts shall include the same efforts to solicit from the stockholders of the Company eligible to vote for the election of Directors proxies in favor of Investor Nominees as the Company devotes to election of the other management-recommended nominees (such efforts being hereafter described as "Reasonable Solicitation Efforts"); provided, if Investor shall retain beneficial ownership of less than 7.5% of the Class A Stock and the 75% Limitation but at least 5% of the outstanding Class A Stock and that number of shares of Common Stock as is equal to at least 50% of the highest percentage of the outstanding Common Stock as is beneficially owned by Investor after completion of the Offer, the Closing and the acquisition of any additional shares of Class B Stock acquired by Investor pursuant to Section 3.6, and the Collaboration Agreement shall remain in full force and effect as aforesaid, the Investor Nominees shall be limited to one director. The period in which Investor is entitled to one or more Investor Nominees is referred to as the "Director Representation Period". If, at any time, the conditions entitling the Investor to elect one or two Investor Nominees, as the case may be, shall not be met, Investor shall at the request of the Company use all reasonable efforts to cause such Investor Nominee(s) who shall then be serving as a director to resign and shall thereafter have no further rights under this Section 8.5 with respect to election of one or two Investor Nominees, as the case may be. During any Director Representation Period in which two Investor Nominees shall serve as directors, one such Nominee shall be a member of the Executive Committee and the other shall be a member of the Audit Committee; provided, if only one such Nominee shall serve as a director, such Nominee shall serve as a member of the Executive Committee. Investor Nominees will not be paid director fees or meeting fees but will be reimbursed for reasonable expenses of attending meetings. -40- 46 (ii) During the Director Representation Period, Investor shall have the right to designate any replacement for an Investor Nominee upon the death, resignation, retirement, disqualification or removal from office for cause of such Investor Nominee, such replacement to be reasonably satisfactory to the Company. The Company shall use all reasonable efforts, including Reasonable Solicitation Efforts to cause each person so designated by Investor pursuant to this paragraph (ii) to be promptly appointed or elected to the Board. During any period in which Investor is entitled to designate an Investor Nominee to the Board but no Investor Nominee is then serving on the Board (if Investor shall have designated such a person within a reasonable period of time), the Board shall not amend Sections 9.3, 9.4, 9.5, 9.6 or 9.7 of the Bylaws without Investor's consent. 8.6. Nonrecognition of Certain Transfers. The Company shall promptly notify Investor in writing of all requests for transfers and conversions of shares of Common Stock held subject to the Stockholders' Agreement to anyone who has received such shares in a transfer or conversion made other than in accordance with the terms of the Stockholders' Agreement of which the Company has knowledge. The Company shall not recognize any transfer or conversion, or issue any certificate representing such shares in writing for at least 15 days after giving Investor such notice, unless prior or during such 15 days, it shall have received notice from Investor that it has no objection to such transfer. In addition, the Company agrees that it shall not in any manner, whether directly or indirectly, redeem any such shares from a Major A Stockholder if within 15 days after having been given notice of a proposed redemption, the Investor shall object in writing that such stockholder has not complied with the provisions of the Stockholders' Agreement, stating the reasons therefor, until the Investor shall have withdrawn such objection in writing or as otherwise ordered by a court having competent jurisdiction. 8.7. Independent Directors. The Company shall use all reasonable efforts including Reasonable Solicitation Efforts to assure that at all times during the Director Representation Period there will be at least three Independent Directors on the Board. -41- 47 ARTICLE 9 RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS 9.1. Restrictions on Transfer. 9.1.1. Investor covenants and agrees with the Company that, prior to the earliest of (a) the third anniversary of the Closing Date, (b) the termination or expiration of the Collaboration Agreement (except if the same is terminated by reason of material breach of its terms by Investor), (c) the issuance by any Governmental Authority having competent jurisdiction of a final, non-appealable order requiring Investor to divest its Equity, ("Final Governmental Order") or (d) the agreement of the Company to enter into a Business Combination with a person other than Investor or any Affiliate of Investor, neither Investor nor any of its United States subsidiaries will, directly or indirectly, offer, sell, transfer, assign, pledge, hypothecate or otherwise dispose of the beneficial ownership of (any such act, a "Transfer") any Equity except for (i) a Transfer by Investor to a United States subsidiary of Investor, provided that prior to such Transfer each such transferee consents in writing with the Company to be bound by the restrictions set forth in this Section 9.1 and assumes all other rights and obligations of Investor under this Agreement and the Registration Rights Agreement, provided further that Investor (A) shall remain liable for the performance by any such subsidiary of its obligations under this Agreement, (B) shall act as agent for any and all such subsidiaries in connection with the receipt or giving of any and all notices under this Agreement and (C) shall not cause or permit any such subsidiary to be other than United States subsidiary of Investor, (ii) a Transfer to the Company or to a subsidiary of the Company pursuant to a self-tender offer or otherwise, -42- 48 (iii) a Transfer pursuant to a merger or consolidation that is recommended by the Board of Directors of the Company in which the Company is a constituent corporation, (iv) a Transfer pursuant to a bona fide third party tender offer or exchange offer, which was not induced directly or indirectly by Investor or any of its Affiliates, that is recommended by the Board of Directors of the Company or pursuant to which Major A Stockholders tender or exchange shares equal to a majority of the Total Voting Power of the Company and do not withdraw the same on or before the Business Day immediately prior to the expiration date of such offer, subject to the Company's right of first refusal set forth in Section 9.3, or (v) a Transfer of Class B Stock tendered on the expiration date of a bona fide third party tender offer or exchange offer, which was not induced directly or indirectly by Investor or any of its Affiliates, of a number of shares of Class B Stock equal to the aggregate number of shares of Common Stock tendered by all Major A Stockholders and not withdrawn by such Major A Stockholders prior to the close of business on the Business Day immediately prior to such expiration date; provided Investor shall have received (and shall be entitled to rely for such purposes on) written notice from the third party making such tender or exchange offer certifying that such Major A Stockholders shall have tendered and not withdrawn such shares as of the close of business on the Business Day prior to such expiration date, subject to the Company's right of first refusal set forth in Section 9.3. The certificate or certificates representing any such Equity transferred as provided above shall bear the legend or legends described in Section 9.2 to the extent required by such Section 9.2. 9.1.2. After the earliest to occur of the events described in clauses (a) through (d) of Section 9.1.1, neither Investor nor any of its United States subsidiaries will, directly or indirectly, Transfer any Equity except for, -43- 49 (i) a Transfer permitted pursuant to Section 9.1.1, or (ii) a Transfer by Investor or any of its United States subsidiaries of Class B Stock for cash (A) in private sales to financial or institutional buyers who shall not be or purchase on behalf of any Competitor of the Company, (B) in bona fide open market "brokers' transactions" as permitted by the provisions of Rule 144 under the Securities Act or (C) in a bona fide public offering pursuant to the Registration Rights Agreement (such a public offering being hereafter referred to as a "Permitted Offering"), provided that in the case of a Transfer described in (A) or (C) the Company has waived its right of first refusal set forth in Section 9.3, and provided further that Investor or such subsidiaries, as the case may be, will take all reasonable steps to assure that, in connection with any such open market transactions or Permitted Offering, Transfers shall not be made to any Person or "group" (as defined in Section 13(d) of the Exchange Act) that would, following such Transfer, beneficially own more than 5% of the outstanding Voting Stock or more than 5% of the outstanding Class B Stock or in the case of a private sale described in (A) more than 7.5% of the outstanding Voting Stock or more than 7.5% of the outstanding Class B Stock; and provided further, in the case of a Permitted Offering which is not made pursuant to a firm underwriting commitment, such Transfers are completed within 60 days from the date such shares are first made available for public sale. The certificate or certificates representing any such Equity transferred as provided above (other than pursuant to clause (ii) in the preceding sentence) shall bear the legend or legends described in Section 9.2 to the extent required by such Section 9.2. 9.1.3. No Transfer of any Equity in violation of this Section 9 shall be made or recorded on the books of the Company and any such Transfer shall be void and of no effect. 9.1.4. Subject to the provisions of the Registration Rights Agreement and except as otherwise provided in Sections 9.1.5, 9.1.6 or 9.1.7, the expenses incurred by the -44- 50 transferor and/or transferee in connection with any Transfer permitted under this Section 9.1 shall be borne by the purchaser and/or seller party to such sale. 9.1.5. In the event that prior to the tenth anniversary of the Closing Date, Investor shall dispose of beneficial ownership of any Equity pursuant to the terms of Section 9.1.2 as a result of a Final Governmental Order which arises out of or results from the acquisition or attempted acquisition by Investor (by merger, consolidation, purchase of stock or assets, contract or otherwise) of assets or businesses not owned by Investor or its Affiliates on the date hereof other than the transaction contemplated by this Agreement (the "Acquisition"), then the terms of the Collaboration Agreement and the Licenses shall be amended as provided in Subsection 9.05(d) of the Collaboration Agreement and Subsections 4.08(a) of the CaMV Promoter License Agreement, 4.09(a) of the Corn Borer-Protected Corn License Agreement and 4.12(a) of the Glyphosate-Protected Corn License Agreement. In addition, (i) Investor shall be required to reimburse the Company for all reasonable costs and expenses incurred by the Company in connection with any registrations effected by the Company to permit such disposition of Equity whether or not required to be borne by the Company in accordance with the Registration Rights Agreement and (ii) Investor shall only be entitled to dispose of that amount of Equity required to be disposed of pursuant to the Final Governmental Order. 9.1.6. In the event Investor shall dispose of beneficial ownership of any Equity after the third anniversary of the Closing Date and prior to the tenth anniversary of the Closing Date other than in (i) Transfers permitted pursuant to Section 9.1.1, (ii) dispositions required after the issuance of a Final Government Order (such dispositions being covered by Sections 9.1.5 and 9.1.7, whichever is applicable), (iii) dispositions following the termination or expiration of the Collaboration Agreement (except if the same is terminated by reason of a material breach of its terms by Investor), (iv) dispositions for Cause (as hereafter defined), or (v) dispositions following the agreement of the Company to enter into a Business Combination with a person other than Investor or any Affiliate of Investor, then the terms of the Collaboration Agreement and the Licenses shall be amended as provided in Subsection 9.05(d) of the Collaboration Agreement and Subsections 4.08(a) of the CaMV -45- 51 Promoter License Agreement, 4.09(a) of the Corn Borer-Protected Corn License Agreement and 4.12(a) of the Glyphosate-Protected Corn License Agreement. In addition, Investor shall be required to reimburse the Company for all reasonable costs and expenses incurred by the Company in connection with any registrations effected by the Company to permit such disposition of Equity whether or not required to be borne by the Company in accordance with the Registration Rights Agreement. For purposes of this Section 9.1.6, "Cause" shall mean (a) a decrease in the Company's share of the United States seed corn market as reported by Doane's to less than seven per cent as determined by annual gross units sold or licensed in any two consecutive fiscal years or (b) the incurrence by the Company of net operating losses in any two consecutive fiscal years. 9.1.7. In the event that prior to the tenth anniversary of the Closing Date, the Investor shall dispose of beneficial ownership of any Equity pursuant to the terms of Section 9.1.2 as a result of a Final Governmental Order which arises out of or results from the acquisition or attempted acquisition by the Company (by merger, consolidation, purchase of stock or assets, contract or otherwise) of assets or business not owned by the Company or its Affiliates on the date hereof other than as contemplated by this Agreement, then the terms of the Collaboration Agreement and the Licenses shall be amended as provided in Subsection 9.05(e) of the Collaboration Agreement and Subsections 4.08(b) of the CaMV Promoter License Agreement, 4.09(b) of the Corn Borer-Protected Corn License Agreement and 4.12(b) of the Glyphosate-Protected Corn License Agreement. In addition, the Company shall be required to reimburse Investor for all reasonable costs and expenses, excluding underwriting discounts and commissions, incurred by Investor in connection with any registrations effected by the Company on behalf of Investor to permit such disposition of Equity whether or not required to be borne by Investor in accordance with the Registration Rights Agreement. 9.2. Legends. 9.2.1. Upon original issuance thereof and until such time as the same is no longer required hereunder or under the applicable requirements of the Securities Act or -46- 52 applicable state securities or blue sky laws, any certificate issued representing any of the Newly Issued Shares and any Common Stock issued pursuant to Section 10 (including, without limitation, all certificates issued upon transfer or in exchange thereof or in substitution therefor) shall bear the legend set forth in Section 5.3. If at any time the legend set forth in Section 5.3 is not required, and until such time as the same is no longer required pursuant to the provisions of Section 9.3, any certificate issued representing Shares described in the preceding sentence and any of the Class B Stock acquired pursuant to the Offer (including without limitation all certificates issued upon transfer or in exchange thereof or in substitution therefor) shall bear the following legend: "THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED PURSUANT TO THE PROVISIONS OF ARTICLE 9 OF A CERTAIN INVESTMENT AGREEMENT DATED AS OF JANUARY 31, 1996 BETWEEN INVESTOR AND THE COMPANY, COPIES OF WHICH INVESTMENT AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. A COPY OF ARTICLE 9 WILL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE" A similar legend shall be placed upon any certificates described in the first sentence of this Section 9.2.1 in the event such shares are no longer subject to the applicable requirements of the Securities Act or applicable state securities or blue sky laws, but continue to be beneficially owned by Investor or its United States subsidiaries. 9.2.2. The Company may make a notation on its records or give instructions to any transfer agents or registrars for the Class A Stock or the Class B Stock in order to implement the restrictions on transfer set forth in this Section 9.2. 9.2.3. Investor shall submit any and all certificates representing Equity beneficially owned by Investor or any of its United States subsidiaries to the Company so that the legend or legends required by this Section 9.2 may be placed thereon. All Equity -47- 53 beneficially owned by Investor or any of such subsidiaries that is neither Class A Stock or Class B Stock shall be treated in the same manner as Common Stock for purposes of this Section 9.2. 9.2.4. In connection with any Transfer of Equity, the transferor shall provide the Company with such customary certificates, opinions and other documents as the Company may reasonably request to assure that such Transfer complies fully with applicable securities and other laws. 9.2.5. The Company shall not incur any liability for any delay in recognizing any Transfer of Equity if the Company in good faith reasonably believes that such Transfer may have been or would be in violation in any material respect of the provisions of the Securities Act, applicable state securities or blue sky laws, or this Agreement. 9.2.6. After such time as any of the legends described by this Section 9.2 are no longer required on any certificate or certificates representing the Common Stock, upon the request of Investor the Company will cause such certificate or certificates to be exchanged for a certificate or certificates that do not bear such legend. 9.3. Right of First Refusal. 9.3.1. Until the tenth anniversary of the Closing, prior to any Transfer described in clause (ii) (A) or (C) of Section 9.1.2 or any Transfer described in clauses (iv) or (v) of Section 9.1.1 pursuant to a tender or exchange offer not recommended by the Board, Investor shall deliver a written notice (the "Offer Notice") to the Company, which Offer Notice shall specify (i) the number and amount and description of Equity to be sold or otherwise transferred, including the method of proposed distribution, (ii) the Offer Price (as defined in Section 9.3.2), (iii) in the case of a privately negotiated transaction described in clause (ii) (A) of Section 9.1.2, any other proposed terms of the Transfer including the identity of the proposed transferees and a description of the nature of their respective businesses and (iv) in the case of a tender or exchange offer (A) shall be conditional upon -48- 54 tender by one or more Major A Stockholders of the requisite number of shares of Common Stock described in clause (iv) or (v) of Section 9.1.1 (without subsequent withdrawal of any such shares on or before the close of business on the Business Day immediately prior to the expiration date) and (B) in the case of such clause (v) shall relate only to the Class B Stock permitted to be tendered thereunder. The Offer Notice shall constitute an irrevocable offer to the Company or its designee, for the period of time described below, to purchase such securities upon the same terms specified in the Offer Notice, subject to Section 9.3.6. 9.3.2. For purposes of this Section 9.3, "Offer Price" shall be defined to mean on a per share or other amount of Equity basis (i) in the case of a Permitted Offering, the market value per share or other amount of Equity determined as provided below (the "Market Value" ) as of the date that the Investor publicly announces its intention to dispose of such equity (a "Public Notice"), less the cost and expenses, including underwriting commissions, reasonably expected to be incurred by Investor and any of its United States subsidiaries in connection with such Permitted Offering on a per share or other amount of Equity basis (ii) in the case of a privately negotiated transaction the proposed sales price per share or other amount of Equity and (iii) in the case of a third party tender offer or exchange offer, the tender offer or exchange offer price per share. For purposes of determination of the Offer Price in the case of a Permitted Offering, (A) the Market Value shall mean with respect to any security, the average of the daily closing prices on the NASDAQ National Market (or such principal exchange on which such security may be listed) for such security for the 40 consecutive trading days commencing on the 20th consecutive trading day prior to the date of the Public Notice, and (B) in the event Investor shall intend to sell in the Permitted Offering (by conversion to Class B Stock) any Class A Stock, such Class A Stock shall be valued as if it had been converted into Class B Stock as of the beginning of the 20th consecutive trading day prior to the date of the Public Notice. The closing price for each day shall be the closing price, if reported, or if the closing price is not reported, the average of the closing bid and asked prices, as reported by NASDAQ or a similar source selected from time to time by the Company for such purpose. (If Investor does not exercise its right of first refusal as provided herein, transfers of such Equity shall be made only in compliance with Article 9.) -49- 55 9.3.3. The Company may elect to purchase all or in the case of a Permitted Offering, any portion of the securities at the Offer Price and upon the terms and conditions specified in the Offer Notice, provided that, if in the case of a Permitted Offering the Company elects to purchase less than all of the offered securities in connection with a Permitted Offering, the number of shares or other amount of such offered securities that the Company has elected to purchase shall be subject to a reduction (determined by the managing underwriter after consultation with a financial advisor selected by Investor) to the extent the managing underwriter (after consultation with Investor's financial advisor) determines that the full number of shares or other amount of such offered securities that the Company has elected to purchase would so reduce the number of shares or other amount of Equity to be sold pursuant to the Permitted Offering as to have a material adverse effect on such offering as contemplated by Investor (including the price at which Investor proposes to sell such securities), provided further that if the managing underwriter determines that the number of shares or other amount of such offered securities that the Company has elected to purchase hereunder should be reduced in accordance with the criteria set forth in the preceding proviso in this sentence, then the Company shall be given the opportunity to make a further election either (i) to purchase the number of shares or other amount of such offered securities as so reduced (or, at the Company's sole option, a lesser number of shares or other amount of such offered securities), (ii) to purchase all of such offered securities or (iii) to withdraw its earlier election and to be released from any obligation to purchase any of such offered securities, provided that such election shall be made within five Business Days of notice to the Company of the managing underwriter's determination. 9.3.4. If the Company elects to purchase the offered securities, it shall give notice to Investor within 90 days of its receipt of the Offer Notice (or in the case of a third party tender offer or exchange offer, not later than the close of business on the second Business Day prior to the expiration date of such offer, provided that the Offer Notice shall have been provided at least ten Business Days prior to the initial expiration date of such offer and provided further that such purchase shall be rescinded and be of no effect if shares are not actually taken up pursuant to the tender offer or to the extent Investor is not -50- 56 entitled to tender or exchange shares pursuant to clauses (iv) or (v) of Section 9.1.1) of its election, which shall constitute a binding obligation, subject to standard terms and conditions for a stock purchase contract between an issuer and a significant stockholder, to purchase the offered securities, which notice shall include the date set for the closing of such purchase, which date shall be no later than 30 days (or in the case of a third party tender or exchange offer 90 days) following the delivery of such election notice. Notwithstanding the foregoing, such time periods shall not be deemed to commence with respect to, and the Company shall not be obligated to respond to, any purported notice that does not comply in all material respects with the requirements of this Section 9.3, which purported notice shall not be deemed to be an Offer Notice for purposes of this Agreement and shall be null and void under this Agreement, provided that if such purported notice is actually received by the Company and the Company does not within five Business Days of such receipt notify Investor that such purported notice does not comply in all material respects with such requirements, such purported notice shall be deemed not to be defective in any material respect with regard to such requirements. 9.3.5. The Company may assign its rights to purchase under this Section 9.3 to any person. If the Company does not respond to the Offer Notice within the required response time period or elects not to purchase the offered securities, Investor or its United States subsidiary, as the case may be, shall be free to complete the proposed Transfer in accordance with the terms of this Article 9 (including to the same proposed transferees in the case of a privately negotiated transaction, unless in the case of a previously undesignated transferee which is a financial not a strategic buyer Investor shall certify to the Company that after reasonable investigation Investor does not believe that any transferee identified for the first time may be considered to be a Competitor or to have purchased on behalf of a Competitor), on terms no less favorable to Investor or such subsidiary, as the case may be, than those set forth in the Offer Notice, provided that (i) such Transfer is closed within 120 days of the latest of (x) the expiration of the foregoing required response time period, or (y) in the case of a Permitted Offering within 90 days of the declaration by the SEC of the effectiveness of a registration statement filed with the SEC pursuant to the Registration Rights Agreement and (ii) the price at which the securities are transferred must be equal -51- 57 to or higher than the Offer Price (except in the case of a Permitted Offering, in which case the price may be equal to, higher than or less than the Offer Price), provided, however, that such periods within which such Transfer must be closed shall be extended to the extent necessary to obtain required governmental approvals and Investor shall use all reasonable efforts to obtain such approvals, provided further that the terms and conditions of the Transfer other than the financial terms thereof may be varied in non-material respects from those set forth in the Offer Notice if Investor gives notice to the Company of the nature of such variations at least five Business Days prior to the consummation of the Transfer, provided that compliance with such five Business Day period shall not operate to terminate any of the Company's rights under this Section 9.3. 9.3.6. In the case of a Permitted Offering, Investor shall provide the Company with a good faith estimate of the costs and expenses, including underwriting commissions, reasonably expected to be incurred by Investor and any of its United States subsidiaries in connection with such Permitted Offering. 9.4. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. The provisions of this Section 9 shall apply, to the full extent set forth herein with respect to the Equity of the Company, to any and all Equity or other securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for, or in substitution of such Equity, including, without limitation, in connection with any stock dividends, splits, reverse splits, combinations, reclassifications, recapitalizations, mergers, consolidations and the like occurring after the date hereof. 9.5. Registration Rights. The Company and Investor have entered into an agreement (the "Registration Rights Agreement") providing for registration rights with respect to shares of Class B Stock issued or acquired hereunder or issuable upon the conversion of any shares of Class A Stock issued or acquired hereunder to the extent provided under such agreement. The registration rights provided to Investor under the Registration Rights -52- 58 Agreement shall not be transferrable to any Person other than a transferee to which Investor has transferred Equity pursuant to clause (i) of the first sentence of Section 9.1.1. ARTICLE 10 EQUITY PURCHASE RIGHTS 10.1. Equity Purchase Rights. 10.1.1. From the Closing Date and for so long as Investor shall beneficially own either 5% of the Class A Stock or 20% of the Class B Stock, if the Company proposes to issue for cash (excluding (i) grants of any options or any other rights to acquire Common Stock pursuant to Stock Plans or as otherwise described in Section 10.3 and issuance of Common Stock pursuant to any such options or other rights (as to which Investor will have the benefit of Section 10.3), (ii) issuance of shares of Common Stock upon the exercise of any options exercisable for Common Stock that are outstanding as of the Closing Date, (iii) issuance of shares of Common Stock upon the conversion or exercise of any options, warrants, rights or other securities convertible into or exercisable for Common Stock the issuance of which was subject to the provisions of this Section 10.1, (iv) issuance of shares of Common Stock in a Small Offering and (v) the reissuance of Common Stock purchased by the Company subsequent to the Closing Date) any Equity ("Additional Equity") it shall give Investor at least ten days prior written notice (the "Issuance Notice") of such intention, describing the type of Equity, the estimated price and the other terms upon which the Company proposes to issue the Additional Equity and the estimated date of such issuance. If the Company intends to issue Additional Equity in a public offering, then the Issuance Notice may state both the minimum and maximum amount of Additional Equity that the Company intends to issue ("Issuance Range") together with both the minimum and maximum prices ("Price Range") that correspond with the Issuance Range. It is agreed that Investor shall have no more than 20 days from the date the Issuance Notice is received to agree to purchase all or any portion of its Pro Rata Share (as defined below) of the Additional -53- 59 Equity by giving written notice to the Company of its desire to purchase the Additional Equity (the "Response Notice"), subject to obtaining regulatory approval for such purchase and completion of the issuance of the Additional Equity as contemplated in the applicable Issuance Notice, and stating therein the amount of Additional Equity to be purchased. Investor shall use all reasonable efforts to obtain such regulatory approval. Such Response Notice shall constitute the irrevocable agreement of Investor to purchase the amount of Additional Equity indicated in the Response Notice at the price and upon the terms stated in the Issuance Notice. Any purchase by Investor of Additional Equity shall be consummated on or prior to the date on which all other Additional Equity described in the applicable Issuance Notice is issued, except that such purchase may be up to 90 days later than such date if Investor cannot consummate such purchase due solely to the failure of Investor to obtain regulatory approval. "Pro Rata Share" means the amount of Additional Equity necessary to permit Investor to maintain Investor's Outstanding Interest immediately prior to issuance of Additional Equity (without regard to any rights Investor may have to acquire shares pursuant to the application of Section 10.1 for which Pro Rata Share is then being determined or Section 10.3) for the price and upon the other terms and conditions upon which the Company actually effects such issuance; provided, however, that in the case of a public offering of Additional Equity, then the price to be paid by Investor shall be net of underwriting discounts or commissions. 10.1.2. (i) If the Equity issued or proposed to be issued in respect of which Investor is entitled to a purchase right under Section 10.1 consists of shares of Class A Stock, Investor's right to acquire Equity under Section 10.1 shall be the right to acquire the number of shares of Class A Stock determined in all other respects in accordance with the provisions of Section 10.1.1 (except to the extent subject to clause (iii) of this sentence), (ii) if the Equity issued or proposed to be issued in respect of which Investor is entitled to a purchase right under this Section 10.1 consists of shares of Class B Stock, Investor's right to acquire Equity under Section 10.1.1 shall be the right to acquire the number of shares of Class B Stock determined in all other respects in accordance with the provisions of this -54- 60 Section 10.1 (except to the extent subject to clause (iii) of this sentence), and (iii) if the Equity issued or proposed to be issued in respect of which Investor is entitled to a purchase right under this Section 10.1 consists of securities of the Company convertible into shares of Common Stock or options, warrants or other rights to acquire shares of Common Stock (collectively, "Option Securities"), Investor's right to acquire Equity under Section 10.1 shall be the right to acquire Equity convertible into shares of the class of Common Stock or options, warrants or other rights to acquire shares of the class of Common Stock, in each case upon the same terms as the Option Securities; provided, Investor's rights with respect to Option Securities giving the holder the right to acquire Common Stock shall be determined pursuant to Section 10.1.1 according to the then Outstanding Interest of Investor and its United States subsidiaries in Class A Stock or Class B Stock, as the case may be, without regard to any outstanding Equity convertible into or entitling the holder to acquire such Common Stock. 10.1.3. If there have been issuances of the Company's Equity in respect of which Investor has a purchase right under this Section 10.1 in Small Offerings as to which Investor's rights to acquire Equity hereunder have not yet become exercisable (the "Small Offering Shares"), then, as of and in connection with the immediately following issuance of Equity of the same class that is subject to the purchase rights of this Section 10.1, Investor shall also have a right to acquire (on the same terms and conditions applicable herein to such issuance, including, without limitation, price) additional shares or other amounts of a class of Equity equal to the number of shares or other amounts Investor would have been entitled to acquire at the time or times of issuance of the Small Offering Shares but for the inapplicability of its purchase rights to such issuances. 10.1.4. To the extent that, after Investor's election to acquire Equity pursuant to its purchase right under Section 10.1.1, the number of shares or other amount of Equity to be issued to Persons other than Investor and any of its United States subsidiaries that gave rise to Investor's purchase right under this Section 10 shall be reduced (whether at the discretion of the Company or otherwise), then the number of shares or other amount of Equity that Investor has the right to acquire under Section 10.1.1 shall be reduced pro rata -55- 61 and Investor's election shall be deemed to have been its irrevocable commitment to purchase such reduced number of shares or other amount of such Equity. 10.2. Limitations. 10.2.1. Notwithstanding anything to the contrary contained in this Section 10, Investor shall not be entitled to purchase any securities pursuant to Section 10.1 or, in the case of clause (iii), to convert any Equity convertible into, or exercise any rights to acquire, any Class A Stock, (i) unless and until the Company actually issues the securities that gave rise to Investor's purchase right under Section 10.1 (and the Company may in its sole discretion elect at any time to abandon any such issuance) or (ii) in connection with any pro rata stock split, stock dividend or other combination or reclassification of any capital stock of the Company or (iii) in the case of Class A Stock, to the extent that the percentage of Class A Stock then permitted to be held by Investor pursuant to Section 11.1 exceeds 10% in which event Investor shall only have the right to acquire sufficient shares of Class A Stock to maintain the percentage of Class A Stock beneficially owned by Investor at 10% or in case a higher percentage of Class A Stock shall then be permitted to be beneficially owned pursuant to Section 11.1(i), such higher percentage. 10.2.2. Notwithstanding anything to the contrary contained in this Section 10, Investor shall not be entitled to purchase any securities pursuant to Section 10.1 in connection with the issuance of a number of shares or other amounts of Equity representing less than 1% of the total number of shares of the relevant class of Common Stock of the Company outstanding as of the date of such issuance (a "Small Offering"), except as otherwise provided in Section 10.1.3, unless the Company elects to otherwise provide Investor with Equity purchase rights in connection therewith on the terms and conditions set forth in Section 10.1.1. 10.3. Stock Options. From the Closing Date and for so long as Investor shall beneficially own either 5% of the Class A Stock or 20% of the Class B Stock, with respect to the issuance of shares of Class A Stock or Class B Stock pursuant to the exercise of stock -56- 62 options or other rights to acquire Class A Stock or Class B Stock granted under the Stock Plans, or under any other stock option plan or any stock-based incentive compensation plan that the Company may adopt in the future, Investor shall have the right, in respect of each fiscal year of the Company beginning with its fiscal year ending August 31, 1996, to purchase from the Company all or any portion of the number of shares of Class A Stock or Class B Stock which it would be necessary for Investor to purchase in order to maintain the same percentage of ownership of issued and outstanding shares of Class A Stock and Class B Stock that Investor owned as of the last day of that fiscal year without regard to shares of Class A Stock and Class B Stock issued pursuant to the exercise of stock options during that fiscal year (or in the case of the Company's fiscal year ending August 31, 1996, after the Closing Date); provided, that no share issued pursuant to exercise of such options shall be considered Class A Stock if prior to the time the Company is required to give the notice described in the following sentence with regard to such fiscal year, such share has been converted to Class B Stock (in which event such share shall be considered Class B Stock). The Company shall notify Investor no later than 20 Business Days after the end of each fiscal year of the Company of the shares of the Class A Stock or Class B Stock which Investor is entitled to purchase under this Section 10.3 in respect of that fiscal year. Investor shall have 20 Business Days from the date of receipt of the Company's notice in which to advise the Company whether or to what extent Investor elects to exercise its rights under this Section 10.3. If Investor does not respond, or if Investor indicates in writing that it will not exercise its rights, then Investor shall be considered irrevocably to have waived its rights under this Section 10.3 with respect to the fiscal year in question. If Investor timely advises the Company that Investor will exercise its rights, then Investor shall have the right to acquire all or any portion of the number of shares of Class A Stock or Class B Stock which it is entitled to purchase at a price per share equal to the Current Market Value on the date Investor advises the Company that it will exercise its rights under this Section 10.3. For purposes of determination of the Current Market Value, any Class A Stock shall be deemed to have been converted into Class B Stock as of the beginning of the 22nd trading day prior to the date with respect to which the determination of Current Market Value is to be made. At the closing of such purchase, the Company and Investor shall provide customary and appropriate representations to one another regarding the purchase and sale -57- 63 of the Common Stock being purchased by Investor and shall also provide any additional documentation reasonably requested by the other party. ARTICLE 11 STANDSTILL 11.1. Restriction on Acquisition by Investor of Company Securities. Investor covenants and agrees with the Company that prior to the tenth anniversary of the Closing Date (I) none of Investor's Affiliates except for United States subsidiaries of Investor shall beneficially own (subject to Section 5.7) any Equity of the Company, (II) neither Investor nor its Affiliates shall acquire directly or indirectly any beneficial ownership of any Equity of the Company except as permitted by Articles 2, 3 or 10 of this Agreement and (III) neither Investor nor any of its Affiliates will acquire directly or indirectly beneficial ownership of any additional Equity of the Company such that the Equity beneficially owned by Investor and its Affiliates would represent in the aggregate more than any of the foregoing (x) 10% of the Total Voting Power of the Company, or (y) the Class B Percentage Limitation, or (z) 40% of the outstanding Common Stock (each such percentage described herein as a "Percentage Limitation") unless (i) Investor shall receive from a Major A Stockholder an offer to purchase shares of Class A Stock beneficially owned by such Major A Stockholder pursuant to any rights granted by such Major A Stockholder to Investor in the Stockholders' Agreement, in which event Investor shall be entitled to acquire beneficial ownership from such Major A Stockholder of such additional shares of Class A Stock, and (ii) no later than 60 days after acquisition of beneficial ownership of a majority of the Total Voting Power of the Company in accordance with the terms hereof, Investor shall be required to make a Permitted Acquisition Proposal. A "Permitted Acquisition Proposal" shall be an Acquisition Proposal (including any proposed tender offer) which: (A) is made to the Board and, unless and until approved in accordance with clause (B), not made directly to stockholders; -58- 64 (B) is subject to the approval of a majority of the Independent Directors prior to execution of any definitive agreement in connection with a transaction involving the Company or the making of any tender or other offer to purchase Common Stock from any stockholders who are not Major A Stockholders; and (C) would result, if successful, in the acquisition by Investor of beneficial ownership of not less than 100% of the outstanding capital stock of the Company at a price per share not less than the highest price at which Investor has acquired (or proposes to acquire in connection with the transaction) beneficial ownership of any Common Stock from a Major A Stockholder within the preceding two years and for cash and/or the same form of consideration if other than cash as paid or offered to be paid the Major A Stockholders. 11.1.1. If Investor shall have acquired a majority of the Total Voting Power of the Company, but Investor has not acquired 100% of the outstanding capital stock of the Company, Investor shall: (i) use all reasonable efforts to assure that at all times thereafter there will be three Independent Directors on the Board of the Company until such time as Investor has acquired 100% of the outstanding capital stock of the Company, and (ii) not acquire additional capital stock of the Company (other than from a Major A Stockholder) or implement any Acquisition Proposal with regard to the Company or enter into any commercial transaction with the Company (not previously in existence) involving a value to the Company as approved in good faith by a majority of the Independent Directors of less than $1,000,000 unless such offer, Acquisition Proposal or commercial transaction is approved by a majority of the Independent Directors of the Company. 11.1.2. Neither Investor nor any of its Affiliates shall be deemed in violation of the foregoing limitations in Section 11.1 if their beneficial ownership of Equity exceeds such limitation solely as a result of (i) an acquisition of Common Stock by the Company -59- 65 that, by reducing the number of securities outstanding, increases the proportionate amount of Common Stock beneficially owned by Investor and its Affiliates in the aggregate to more than the respective Percentage Limitations of Total Voting Power, Class B Percentage Limitation or Common Stock or (ii) the exercise by third parties of the right to convert Class A Stock into Class B Stock, provided that in each case such limitation shall be deemed crossed if Investor or any of its Affiliates thereafter becomes the beneficial owner of any additional Equity unless (i) Investor shall be permitted to acquire such Common Stock pursuant to Subsection 11.1(i) or (ii), or (ii) upon the consummation of the acquisition of such additional Equity Investor and its Affiliates do not beneficially own in the aggregate more than the applicable respective Percentage Limitations of Total Voting Power, Class B Percentage Limitation or Common Stock outstanding. 11.1.3. (i) In the event the Company receives an Acquisition Proposal (including an indication of interest in making such a proposal) from a third party which has not been solicited by the Board and which, if consummated, would result in a Business Combination (an "Unsolicited Proposal"), the Company shall promptly notify Investor in writing (the "Company Notice") of the material terms of such Unsolicited Proposal, including without limitation any specified consideration. (ii) In the event (A) the Board determines to enter into negotiations with regard to an Unsolicited Proposal and the Investor shall not have advised the Company subsequent to the receipt of the Company Notice that it is not interested in submitting an Investor Proposal (as hereinafter defined), or (B) in the absence of receipt of an Unsolicited Proposal, the Company invites any third party to make an Acquisition Proposal which if consummated would lead to a Business Combination (the "Company Proposal"), then the Company shall also promptly invite the Investor to submit a proposal (an "Investor Proposal") for a Business Combination which would result in the acquisition of an equal or greater amount of assets or shares of Common Stock than the Unsolicited Offer or the Company Proposal (which may include all or substantially all the assets or all of the Common Stock of the Company). Thereafter, if Investor shall have submitted an Investor Proposal, the Company shall conduct the solicitation and negotiation process as an open process available to all bidders, including provision to the Investor and other interested parties of further -60- 66 information with regard to the terms of any offers received and the opportunity to submit further offers in accordance with procedures approved by a committee of directors consisting of an equal number of (A) non-employee or officer Major A Stockholder directors (if such directors agree to serve on such committee) including the Chairman of the Board and (B) Independent Directors; provided however, that the Board shall not be required to conduct such process in a manner which, after advice of special independent outside counsel and its financial advisors, the Board determines is inconsistent with its fiduciary duties. If Investor shall not have submitted an Investor Proposal or shall withdraw any such proposal and advise the Company that it is not interested in submitting a further proposal, the Company shall conduct the negotiation and sale process in such manner as the Board determines. (iii) Solely for purposes of this Section 11.1.3, a Business Combination shall include a transaction with respect to which the Company receives or solicits from a third party or enters into negotiations with respect to, a proposal (the "Limited Proposal") which (A) contemplates the acquisition of a portion of the Company's international seed business or the Company's North American seed business that would be equal to or greater in amount than 25% of the average revenues derived from such international or North American seed business, respectively, in the Company's most recently completed two fiscal years, and (B) would not otherwise be described by Section 11.1.3 (i) or (ii), provided, that Investor shall not in such case be entitled to make a proposal which would involve the acquisition of a greater amount of assets or ownership interest than the Limited Proposal. 11.2. Other Restrictions. Prior to the earliest of (a) the tenth anniversary of the Closing Date or (b) such date as Investor and its subsidiaries acquire a majority of the Total Voting Power, in accordance with the terms of this Agreement, neither Investor nor any of its Affiliates shall (i) seek to have the Company waive, amend or modify any of the restrictions contained in this Article 11, the Certificate of Incorporation or the bylaws (other than the amendment described on Exhibit B hereto) of the Company, (ii) make any Acquisition Proposal or proposal with respect to a Business Combination, (iii) take any initiatives involving the Company that would otherwise require the Company to make a public announcement, or make any public comment or proposal with respect to any -61- 67 Acquisition Proposal, (iv) become a member of a "group" within the meaning of Section 13(d) of the Exchange Act (other than a group composed solely of Investor and any of its wholly owned direct or indirect subsidiaries), (v) solicit, or encourage any other person to solicit, "proxies" or become a "participant" or otherwise engage in an "solicitation" (as such terms are defined or used in Regulation 14A under the Exchange Act) in opposition to a recommendation of a majority of the directors of the Company with respect to any matter; seek to advise or influence any person (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the voting of any securities of the Company; or execute any written consent in lieu of a meeting of holders of securities of the Company or any class thereof, (vi) initiate, propose or otherwise solicit stockholders for the approval of one or more stockholder proposals with respect to the Company, as described in Rule 14a-8 under the Exchange Act, (vii) deposit any of the Equity into a voting trust, or subject any of the Equity to any agreement or arrangement other than the Stockholders' Agreement with respect to the voting of the Shares or any agreement having similar effect to any of the foregoing in this Section 11.2; or (viii) enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing ("Contacts") or otherwise seek to control or influence the Company other than Contacts with one or more Major A Stockholder(s) if such Major A Stockholder(s) shall have given Investor a Transfer Notice pursuant to Section 3.2(b) of the Stockholders' Agreement or has otherwise actively initiated such Contact, provided, however, that (A) Investor shall be permitted to make any proposal which Investor is permitted to make pursuant to Sections 11.1 or 11.1.3, as the case may be, (B) if Investor shall in good faith determine to accept any offer from a Major A Stockholder to purchase shares of Class A Stock beneficially owned by such Major A Stockholder or to make a counter proposal to such Major A Stockholder as permitted by and in accordance with the terms of the Stockholders' Agreement, as a result of which Investor would acquire beneficial ownership of a majority of the Total Voting Power of the Company, Investor shall be entitled to make any Permitted Acquisition Proposal to the Board which it is permitted or required to make pursuant to Section 11.1, and (C) actions taken by any representative of Investor on the Board, acting solely in his or her capacity as such a director, shall not violate this Section 11.2. -62- 68 ARTICLE 12 TERMINATION 12.1. Termination. Prior to the Closing Date, this Agreement and the transactions contemplated hereby may be terminated at any time: 12.1.1. Mutual Consent. By mutual consent of the Company and Investor; 12.1.2. Expiration Date. By the Company or Investor by written notice to the other party at any time after June 30, 1996 if any condition is not waived or satisfied within such period; provided, however, that if any condition shall not have been waived or satisfied within such period due to the willful act or omission of one of the parties, that party may not terminate this Agreement; 12.1.3. Permanent Injunction. By the Company or Investor if consummation of the issuance and sale by the Company of the Newly Issued Shares contemplated by this Agreement shall violate any final non-appealable order, decree or judgment of any court or governmental body having competent jurisdiction; or 12.1.4. Failure to Honor Agreements. By the Company or Investor if the other party shall have failed to perform or comply in any material respect with any agreement or covenant contained herein that is required to be performed or complied with by it on or before the Closing Date after having been provided by the other party written notice of, and a reasonable opportunity to cure, such failure. 12.2. Termination After Closing Date. This Agreement, with the exception of Article 11, shall terminate at any time after the Closing Date in the event that the Investor and its Affiliates beneficially own less than (a) five percent of the Total Voting Power of the Company and (b) less than ten percent of the outstanding Common Stock of the Company. -63- 69 The Investor shall promptly notify the Company in writing at any time that it believes it no longer owns such amounts. 12.3. Effect of Termination. If this Agreement is terminated pursuant to this Section 12, this Agreement shall forthwith become wholly void and of no further force and effect, except as provided in Section 12.2, and all further obligations of the Company and Investor or their respective officers or directors with respect to any obligation under this Agreement shall terminate without further liability except, (i) for the obligations of the Company and Investor under Sections 8.1 and 8.3 and (ii) that to the extent that such termination results from the material breach by a party of any representations, warranties, or covenants herein contained such termination shall not constitute a waiver or bar by any party of any rights or remedies at law or in equity it may have by reason of a breach of this Agreement by the other party. ARTICLE 13 INDEMNIFICATION 13.1. Investor's Indemnification Agreement. Subject to Sections 13.3 and 14.1, Investor shall indemnify and hold the Company and its directors, officers, employees and agents (collectively, the "Company Indemnified Parties") harmless from and against any and all claims, liabilities, fines, penalties, demands, causes of action, suits, judgments, losses, injuries, damages (including costs of defense, settlement and reasonable attorneys' fees) (all of the foregoing hereinafter collectively called "Liabilities, Actions and Damages") suffered or incurred by said Company Indemnified Parties with respect to (i) any inaccuracy of representations and warranties made herein including without limitation pursuant to Article 5 by Investor, and (ii) breaches of covenants made herein by Investor, which breaches, if curable, are not cured within 60 days after written notice thereof from the Company. -64- 70 13.2. Company's Indemnification Agreement. Subject to Sections 13.3 and 14.1, the Company shall indemnify and hold Investor and its directors, officers, employees and agents (collectively, the "Investor Indemnified Parties") harmless from and against any and all Liabilities, Actions and Damages suffered or incurred by said Investor Indemnified Parties with respect to (i) any inaccuracy of representations and warranties made herein, including but not limited to, pursuant to Article 4 hereof by the Company, or (ii) breaches of covenants made herein by the Company, which breaches, if curable, are not cured within 60 days after written notice thereof from Investor. 13.3. Procedure. In the event that, from and after the Closing Date, a third party asserts any claim against any Company Indemnified Party or any Investor Indemnified Party with respect to any matter to which the foregoing indemnities apply, the party against whom the claim is asserted (the "Indemnified Party") shall give prompt written notice to the indemnifying party (the "Indemnifying Party"), and the Indemnifying Party shall have the right, at its election, to take over the defense or settlement of such claim at its own expense by giving prompt written notice to the Indemnified Party; provided, however, that, if the Indemnifying Party does not give such notice and does not proceed diligently to defend the claim within 30 days after receipt of such notice of the claim, the Indemnifying Party shall be bound by any defense or settlement that the Indemnified Party may make as to such claim and shall reimburse the Indemnified Party for any and all losses and expenses resulting therefrom. The Indemnified Party and the Indemnifying Party shall cooperate in defending any such third party's claim, and the Indemnifying Party, to the extent the Indemnifying Party elects to defend such claim, shall have reasonable access to records, information and personnel in the possession or control of any other party hereto which are applicable to the subject matter of any claim or which are otherwise pertinent to the defense of such claim and the Indemnified Party shall otherwise cooperate with the Indemnifying Party in all respects in connection therewith. The Indemnifying Party shall reimburse the Indemnified Party for all of the Indemnified Party's reasonable out-of-pocket costs incurred in connection with the activities set forth in the immediately preceding sentence and in enforcing this indemnification. Each party hereto shall have an obligation to retain all relevant records until the period ending on December 31 of the seventh full calendar year -65- 71 following the Closing Date unless such records relate to actions, claims or proceedings known to such party to be pending at the time such records are scheduled not to be retained or unless such records are required to be maintained for longer periods of time under applicable laws, rules or regulations or unless such records relate to taxes, in which case each party hereto shall have an obligation to retain such records for the term of the applicable statute of limitations, as the same may be extended or tolled. Notwithstanding the foregoing, the Indemnifying Party shall not settle or compromise any such claim without the prior written consent of the Indemnified Party, (such consent not to be unreasonably withheld) unless, after consultation between such parties, the terms of such settlement or compromise release such Indemnified Party from any and all liability with respect to such claim and do not in any manner adversely affect the future operations or activities of such Indemnified Party. ARTICLE 14 GENERAL PROVISIONS 14.1. Survival of Representations and Warranties. The representations and warranties in this Agreement and in the instruments delivered pursuant to this Agreement (without regard to the Ancillary Agreements) shall survive the Closing for a period of 24 months. Notwithstanding the foregoing, (i) the representations and warranties set forth in Sections 4.3 and 4.4, to the extent applicable to the issuance of the Newly Issued Shares to Investor at Closing, shall survive the Closing indefinitely and (ii) the representations and warranties set forth in Section 4.8 shall survive until the expiration of the applicable statute of limitations (as such statute of limitations may be extended). This Section 14.1 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Closing. 14.2. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to -66- 72 have been duly given upon receipt) by delivery in person, by facsimile transmission or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 14.2): If to Investor, to: Monsanto Company 800 N. Lindbergh Boulevard St. Louis, Missouri 63167 Attention: Chief Financial Officer Fax: 314-694-3001 with a copy to: General Counsel and Secretary Fax: 314-694-3001 If to Company, to: DEKALB Genetics Corporation 3100 Sycamore Road Dekalb, IL 60115 Attention: Senior Vice President and General Counsel Fax: 815-758-6953 -67- 73 with a copy to: James G. Archer c/o Sidley & Austin 875 Third Avenue New York, NY 10022 Fax: 212-906-2021 14.3. Interpretation. References in this Agreement to any gender include all genders and references to the singular include the plural and vice versa. When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". The words "hereof," "hereby" and "herein" and words of similar meaning where used in this Agreement or any exhibit or schedule refer to such agreement, exhibit or schedule in its entirety and not to any particular article, section or paragraph unless otherwise specifically indicated. 14.4. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. 14.5. Entire Agreement; No Third-Party Beneficiaries. This Agreement, the Ancillary Agreements and the Confidentiality Agreement between Investor and the Company (i) constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement and such Ancillary Agreements and (ii) are not intended to confer upon -68- 74 any person other than the parties and their permitted successors and assigns any rights or remedies. 14.6. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. 14.7. Corporate Powers. Nothing herein shall be construed to relieve the directors and officers of the Company or its subsidiaries from the performance of their respective fiduciary duties or limit the exercise of their powers in performance of their duties hereunder and the obligations of the Company herein shall be subject to such fiduciary duties. 14.8. Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or transferred, in whole or in part, by any of the parties without the prior written consent of the other party, except that Investor may, without the prior written consent of the Company, assign all or any of its rights, interests, and obligations under this Agreement (other than under Articles 8, 9 and 11) to a wholly owned, direct or indirect, United States subsidiary of Investor, provided that Investor (i) shall remain liable for the performance by any such subsidiary of its obligations under this Agreement, (ii) shall act as agent for any and all such subsidiaries in connection with the receipt and giving of notices under this Agreement and (iii) shall not cause or permit any such subsidiary to be other than a wholly owned direct or indirect subsidiary of Investor, and Investor may assign its rights under the Registration Rights Agreement to the extent provided therein. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and permitted assigns. Any attempted assignment in violation of this Section 14.8 shall be void. 14.9. Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement or any of the Ancillary Agreements -69- 75 between Investor and the Company were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and such Ancillary Agreements and to enforce specifically the terms and provisions of this Agreement and such Ancillary agreements in any Federal or state court located in the State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any Federal or state court located in the State of Delaware in the event any dispute arises out of this Agreement, any of such Ancillary Agreements, or any of the transactions contemplated by this Agreement or any of such Ancillary Agreements, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (iii) agrees that it will not bring any action relating to this Agreement, any of such Ancillary Agreements or any of the transactions contemplated by this Agreement or any of such Ancillary Agreements in any court other than a Federal or state court sitting in the State of Delaware. All rights and remedies existing hereunder are cumulative to and not exclusive of any rights or remedies otherwise available. 14.10. Amendment and Waiver. No amendment to this Agreement or waiver of any provision hereof shall be effective unless such amendment or waiver is in writing and signed by each party to this Agreement. Any failure of a party to comply with any obligation, covenant, agreement or condition contained in this Agreement may be waived by the parties entitled to the benefits thereof only by a written instrument duly executed and delivered by the parties granting such waiver. Any waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure of compliance. 14.11. Accounting Information. As soon as reasonably practicable but in any event within 25 days after the end of each calendar month after the Closing Date, the Company shall provide Investor with such accounting and financial information as is reasonably requested by Investor in order for Investor to implement equity accounting for its investment in the Company. -70- 76 14.12. Severability. In the event any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby. IN WITNESS WHEREOF, Investor and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above. MONSANTO COMPANY By Robert T. Fraley ----------------------------- Name: Robert T. Fraley Title: President, Ceregen DEKALB GENETICS CORPORATION By Bruce P. Bickner ----------------------------- Name: Bruce P. Bickner Title: Chairman and CEO -71- 77 EXHIBIT A Conditions of the Offer Notwithstanding any other term of the Offer or this Agreement, Investor shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Investor's obligation to pay for or return tendered shares of Class B Stock after the termination or withdrawal of the Offer), to pay for any shares of Class B Stock tendered pursuant to the Offer and may terminate or amend the Offer, with the consent of the Company or if, at any time on or after the date of this Agreement and before the acceptance of such shares for payment or the payment therefor, any of the following conditions exists: (a) there shall be threatened or pending by any Governmental Authority any suit, action or proceeding, or there shall be pending by any other person any suit, action or proceeding, which has a substantial likelihood of success, (i) challenging the acquisition by Investor of any shares of Common Stock, seeking to restrain or prohibit the making or consummation of the Offer or the share issuances as contemplated by the Agreement or the performance of any of the other transactions contemplated by the Agreement or the Ancillary Agreements, or seeking to obtain from the Company or Investor any damages that are material in relation to the Company and its subsidiaries taken as a whole, (ii) seeking to prohibit or limit the ownership or operation by the Company, Investor or any of their respective subsidiaries of the business or assets of the Company and its subsidiaries, taken as a whole, or Investor and its subsidiaries, taken as a whole, or to compel the Company to dispose of or hold separate any material portion of the business or assets of the Company and its subsidiaries, taken as a whole or Investor and its subsidiaries, taken as a whole, as a result of the Offer or any of the other transactions contemplated by this Agreement or the Ancillary Agreements, (iii) seeking to impose limitations on the ability of Investor to acquire or hold, or exercise full rights of ownership of, any shares of Common Stock to be accepted for payment pursuant to the Offer or any 78 Newly Issued Shares including, without limitation, the right to vote such Newly Issued Shares on all matters properly presented to the stockholders of the Company, (iv) seeking to prohibit Investor or any of its subsidiaries from exercising any of their respective material rights under this Agreement or any Ancillary Agreement; (b) there shall be any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced, promulgated or applicable to the Offer or the share issuances, or any other action shall be taken by any Governmental Authority or court, that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (iv) of paragraph (a) above; (c) there shall have occurred any event which constitutes a Material Adverse Effect; (d) any of the representations and warranties of the Company set forth in this Agreement that are qualified as to materiality shall not be true and correct and any such representations and warranties that are not so qualified shall not be true and correct in any material respect, in each case as of the date of the Agreement and as of the Expiration Date as though made on and as of the Expiration Date (or any other date as of which such representations and warranties expressly speak); (e) the Company shall have failed to furnish to Investor an opinion of John H. Witmer, Jr., Senior Vice President and General Counsel of the Company, in the form attached hereto as Exhibit C, dated as of the Closing Date if it occurs on or before the Expiration Date, or if the Closing Date shall not have occurred, speaking in future tense as relates to issuance of the Newly Issued Shares; (f) during the period from the date of this Agreement until the Expiration Date, neither the Company nor any subsidiary shall have sold or otherwise disposed of (or authorized, committed or agreed to sell or otherwise dispose of), in a single transaction or in a series of transactions, excluding sales of inventory or other assets -2- 79 in the normal course of business, any business or assets relating to the Primary Business of the Company that constitute more than five percent of the total consolidated assets of the Company as shown on the Company's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made, whether such sale or disposition be by merger or consolidation or the sale of stock or assets or otherwise; (g) there shall have occurred (i) any general suspension or trading in, or limitation on prices for, securities (excluding any coordinated trading halt triggered solely as a result of a specified decrease in a market index), (ii) any extraordinary change in the financial markets in the United States, (iii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iv) any limitation (whether or not mandatory) by any Governmental Authority on, or other event that materially affects, the extension of credit by banks or other lending institutions, (v) a commencement of a war directly involving the armed forces of the United States, or (vi) in case of any of the foregoing existing on the date of this Agreement, material acceleration or worsening thereof; (h) the Board of Directors of the Company shall have failed to give, withdrawn or modified in a manner adverse to Investor its approval or recommendation of the Offer or the other transactions contemplated by this Agreement or the Ancillary Agreements; (i) the Amended Bylaws shall not be authorized, approved and effected; or -3- 80 (j) the Agreement shall have terminated in accordance with its terms; which, in the reasonable good faith judgment of Investor, and regardless of the circumstances giving rise to any such condition (other than any action or inaction by Investor or any of its subsidiaries which constitutes a breach of the Agreement), makes it inadvisable to proceed with such acceptance for payment or payment. The foregoing conditions are for the sole benefit of Investor and may be asserted by Investor regardless of the circumstances giving rise to any such condition or may be waived by Investor in whole or in part at any time and from time to time in its sole discretion. The failure by Investor or any other subsidiary of Investor at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. Any determination (which shall be made in good faith by the Investor) with respect to the foregoing conditions shall be final and binding on the parties. -4- 81 EXHIBIT B AMENDED BYLAWS OF THE COMPANY TO CONTAIN THE FOLLOWING BY- LAW PROVISIONS: -- Section 9.3 Primary Business. The Primary Business of the Corporation shall be the research-based production, marketing, licensing and sale of agronomic seed, including both technology related thereto and products derived therefrom. -- Section 9.4 Use of Voting Securities. i) The use of the Corporation's Voting Securities to facilitate strategic collaborations is in the Corporation's interest, but as to any one strategic collaboration, the maximum amount of Voting Securities to be issued to any Person or Group shall not exceed 10 percent of Voting Securities of the Corporation outstanding at the time of issuance. (ii) As used in this Section 9.4, the following terms shall have the meanings set forth: "Voting Securities" means any shares of capital stock or other securities of the Corporation entitled to vote generally in the election of directors, (including the right to elect one or more directors as a class unless such right is only exercisable during the continuance of a defined event.) "Person" means any individual, limited partnership, general partnership, trust, corporation or other firm or entity. 82 "Group" shall have the meaning ascribed in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, or any successor provision thereto. -- Section 9.5 Acquisitions. The Corporation shall not acquire, in a single transaction or in series of related transactions, any business or assets outside of the Primary Business of the Corporation that would be equal to or greater in amount than twenty-five percent (25%) of the total consolidated assets of the Corporation as shown on the Corporation's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made whether such acquisition be by merger or consolidation or the purchase of stock or assets or otherwise; -- Section 9.6 "Permitted Transactions". No transaction which would result in the change of the Primary Business of the Corporation as set forth in Section 9.3, no issuance of Voting Securities to facilitate a strategic collaboration in contravention of Section 9.4 and no acquisition of any business or assets outside the Primary Business of the Corporation in contravention of Section 9.5 shall be approved by the Board of Directors if the resolution regarding such transaction receives the negative vote of at least three directors after the 1997 annual meeting of stockholders and at least two directors prior to the 1997 annual meeting of stockholders. -- Section 9.7 Certain Amendments. The Corporation shall not amend Sections 9.3, 9.4, 9.5, 9.6 or 9.7 hereof if the resolution regarding such amendment receives the negative vote of at least one director, or two directors after the 1997 annual meeting of stockholders. -6- 83 EXHIBIT C Opinion of John H. Witmer Subject to appropriate qualifications, limitations, conditions and assumptions, which are reasonably acceptable to Investor: 1. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has corporate power and authority to own the properties it purports to own and conduct its business as described in the SEC Reports (as defined in the Investment Agreement) and has corporate power and authority to execute, deliver and perform its obligations under the Investment Agreement and the Ancillary Agreements to which it is a party (collectively, the "Transaction Documents"). 2. The Transaction Documents have been duly authorized, executed and delivered by the Company and (assuming the due authorization, execution and delivery thereof by the Investor) constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws of general applicability relating to or affecting the enforcement of creditors' rights and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). 3. Neither the execution and delivery by the Company of the Transaction Documents or the consummation of the transactions contemplated thereby, nor compliance by the Company with the terms and conditions thereof, does or will result in any breach of or constitute a default under the Restated Certificate of Incorporation of the Company, or the By-laws of the Company, or, to my knowledge, any agreement, instrument or judgment which is applicable to the Company or any of its subsidiaries or any court injunction or decree or any valid and enforceable order of a governmental entity having jurisdiction over the Company or any of its subsidiaries. -7- 84 4. To my knowledge, after due inquiry, there are no actions, suits or proceedings or claims pending against the Company seeking to restrain or prohibit (or questioning the validity or legality of) the consummation of the transactions contemplated by the Transaction Documents. 5. The authorized, issued and outstanding shares of capital stock of the Company are as set forth in Section 4.3 of the Investment Agreement; all of the issued and outstanding shares of Common Stock (as defined in the Investment Agreement) have been duly authorized and validly issued, are fully paid and non-assessable; and the Newly Issued Shares (as defined in the Investment Agreement) to be issued in connection with the Investment Agreement, when certificates therefor have been duly executed, countersigned and registered and delivered against payment of the agreed consideration therefor in accordance with the terms of the Investment Agreement, will constitute shares of Common Stock which have been duly authorized and validly issued, are fully paid and non-assessable and have not been issued in violation of the preemptive rights of any stockholder of the Company. -8- 85 EXHIBIT D Opinion of Frank E. Vigus Subject to appropriate qualifications, limitations, conditions and assumptions, which are reasonably acceptable to the Company: 1. Investor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has corporate power and authority to execute, deliver and perform its obligations under the Investment Agreement and the Ancillary Agreements (collectively, the "Transaction Documents"). 2. The Transaction Documents have been duly authorized, executed and delivered by Investor and (assuming the due authorization, execution and delivery thereof by the other parties thereto) constitute the legal, valid and binding obligation of Investor enforceable against Investor in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws of general applicability relating to or affecting the enforcement of creditors' rights and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). 3. Neither the execution and delivery by Investor of the Transaction Documents or the consummation of the transactions contemplated thereby, nor compliance by Investor with the terms and conditions thereof, does or will result in any breach of or constitute a default under the Certificate of Incorporation, as amended, of Investor, or the By-Laws of Investor, or, to my knowledge, any agreement, instrument or judgment which is applicable to Investor or any of its subsidiaries or any court injunction or decree or any valid and enforceable order of a governmental entity having jurisdiction over Investor or its subsidiaries. -9- 86 4. To my knowledge, after due inquiry, there are no actions, suits or proceedings or claims pending against Investor or any subsidiary seeking to restrain or prohibit (or questioning the validity or legality of) the consummation of the transactions contemplated by the Transaction Documents. -10- EX-99.C.2 12 STOCKHOLDERS AGREEMENT 1 STOCKHOLDERS' AGREEMENT dated as of January 31, 1996 2 TABLE OF CONTENTS Page ---- ARTICLE 1 Definitions . . . . . . . . . . . . . . . . . . . . . 3 1.1 "Affiliate. . . . . . . . . . . . . . . . . . . . . . 3 1.2 "Board of Directors . . . . . . . . . . . . . . . . . 3 1.3 "Business Combination . . . . . . . . . . . . . . . . 3 1.4 "Bylaws . . . . . . . . . . . . . . . . . . . . . . . 3 1.5 "Class A Common Stock . . . . . . . . . . . . . . . . 4 1.6 "Class B Common Stock . . . . . . . . . . . . . . . . 4 1.7 "Closing Date . . . . . . . . . . . . . . . . . . . . 4 1.8 "Common Stock . . . . . . . . . . . . . . . . . . . . 4 1.9 "Company. . . . . . . . . . . . . . . . . . . . . . . 4 1.10 "Director . . . . . . . . . . . . . . . . . . . . . . 4 1.11 "Depositor. . . . . . . . . . . . . . . . . . . . . . 4 1.12 "Exchange Act . . . . . . . . . . . . . . . . . . . . 4 1.13 "Monsanto . . . . . . . . . . . . . . . . . . . . . . 4 1.14 "Monsanto Director. . . . . . . . . . . . . . . . . . 4 1.15 "hereto", "hereunder", "herein", "hereof. . . . . . . 4 1.16 "Involuntary Transfer Notice. . . . . . . . . . . . . 4 1.17 "Involuntary Transfer Stock . . . . . . . . . . . . . 5 1.18 "Indemnified Person . . . . . . . . . . . . . . . . . 5 1.19 "Investment Agreement . . . . . . . . . . . . . . . . 5 1.20 "Losses . . . . . . . . . . . . . . . . . . . . . . . 5 1.21 "Major A Stockholder. . . . . . . . . . . . . . . . . 5 1.22 "Offer Period . . . . . . . . . . . . . . . . . . . . 5 1.23 "Offered Stock. . . . . . . . . . . . . . . . . . . . 5 1.24 "Permitted Transferee . . . . . . . . . . . . . . . . 5 1.25 "Person . . . . . . . . . . . . . . . . . . . . . . . 6 1.26 "Pledge . . . . . . . . . . . . . . . . . . . . . . . 6 1.27 "Roberts Family Shareholder Agreement . . . . . . . . 6 1.28 "Roberts Family Voting Trust Agreement. . . . . . . . 6 1.29 "Selling Stockholder. . . . . . . . . . . . . . . . . 6 1.30 "Stock. . . . . . . . . . . . . . . . . . . . . . . . 6 1.31 "Transfer Notice. . . . . . . . . . . . . . . . . . . 6 1.32 "Transferring Stockholder . . . . . . . . . . . . . . 7 1.33 "Voting Trust . . . . . . . . . . . . . . . . . . . . 7 i 3 ARTICLE 2 Election of Monsanto Directors; Corporate Governance Provisions in Certificate of Incorporation and Bylaws. . . 7 2.1 Monsanto Directors. . . . . . . . . . . . . . . . . 7 2.2 Amendment of Bylaws . . . . . . . . . . . . . . . . 7 2.3 Solicitation and Voting of Shares . . . . . . . . . 7 2.4 Amendment of Bylaws . . . . . . . . . . . . . . . . 8 2.5 Implementation of Investment Agreement. . . . . . . 8 2.6 Injunctive Relief . . . . . . . . . . . . . . . . . 8 2.7 Indemnification of Major A Stockholders . . . . . . 9 ARTICLE 3 Limitation on Certain Transfers . . . . . . . . . . . 11 3.1 General Limitations on Certain Transfers. . . . . . 11 3.2 Limitation on Certain Conversions and Transfers . . 11 3.3 Legend. . . . . . . . . . . . . . . . . . . . . . . 20 3.4 Nonrecognition of Certain Transfers . . . . . . . . 20 3.5 Exceptions. . . . . . . . . . . . . . . . . . . . . 20 ARTICLE 4 Miscellaneous . . . . . . . . . . . . . . . . . . . . 22 4.1 Governing Law . . . . . . . . . . . . . . . . . . . 22 4.2 Successors and Assigns. . . . . . . . . . . . . . . 22 4.3 Entire Agreement. . . . . . . . . . . . . . . . . . 22 4.4 Notice. . . . . . . . . . . . . . . . . . . . . . . 23 4.5 Delays or Omissions . . . . . . . . . . . . . . . . 26 4.6 Counterparts. . . . . . . . . . . . . . . . . . . . 26 4.7 Severability. . . . . . . . . . . . . . . . . . . . 26 4.8 Sections and Articles . . . . . . . . . . . . . . . 26 4.9 Headings. . . . . . . . . . . . . . . . . . . . . . 26 4.10 Term. . . . . . . . . . . . . . . . . . . . . . . . 27 4.11 Effective Date. . . . . . . . . . . . . . . . . . . 27 Exhibits Exhibit "A" Exhibit "B" Exhibit "C" Exhibit "D" ii 4 STOCKHOLDERS' AGREEMENT This STOCKHOLDERS AGREEMENT is made as of the 31st day of January, 1996, by and among Douglas C. Roberts, individually and as Trustee of (i) the Douglas C. Roberts Trust dated January 28, 1972, (ii) the David Kim Roberts 1989 Trust, (iii) the Steven Suh Roberts 1989 Trust, and (iv) the Jeffrey King Roberts 1989 Trust ("Douglas C. Roberts"); Virginia R. Holt, individually and as Trustee of (i) the Virginia R. Holt Trust dated August 22, 1973, (ii) the Amanda Mary Holt 1989 Trust, and (iii) the Laura Elizabeth Holt 1989 Trust ("Virginia R. Holt"); John T. Roberts, individually and as Trustee of (i) the John T. Roberts Trust dated April 9, 1976, (ii) the Allison Elizabeth Roberts 1989 Trust, and (iii) the Katherine Elsie Roberts 1990 Trust Number 1 ("John T. Roberts"); Charles C. Roberts and Mary R. Roberts, as Trustees of (i) the Charles C.and Mary R. Roberts Living Trust dated October 15, 1991, (ii) the Trust F/B/O Douglas C. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967, (iii) the Trust F/B/O Virginia R. Holt under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967, and (iv) the Trust F/B/O John T. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967 ("Charles C. Roberts and Mary R. Roberts"); Lynne King Roberts, as Trustee of the David Kim Roberts Trust dated October 14, 1987 ("Lynne King Roberts"); Terrance K. Holt, as Trustee of the Amanda Mary Holt Trust dated December 6, 1985 ("Terrance K. Holt"); and Robin R. Roberts, as Trustee of (I) the Allison Elizabeth Roberts Trust dated August 6, 1986, (ii) the Katherine Elsie Roberts Trust dated March 13, 1990, and (iii) the Charles David Roberts Trust dated February 28, 1994 ("Robin R. Roberts"), and Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt and John T. Roberts, as Voting Trustees under the Roberts Family Voting Trust Agreement (collectively referred to as the "Major A Stockholders" and individually as a "Major A Stockholder") and Monsanto Company, a Delaware corporation, having its principal place of business at 800 N. Lindbergh Blvd., St. Louis, Missouri 63167, ("Monsanto"). 5 RECITALS WHEREAS, DEKALB Genetics Corporation, a Delaware corporation, having its principal place of business at 3100 Sycamore Road, DeKalb, Illinois 60115 (the "Company") and Monsanto have entered into an Investment Agreement, dated as of January 31, 1996 (the "Investment Agreement"), and certain other related agreements whereby Monsanto will acquire shares of the Company's Class A Common Stock, no par value ("Class A Common Stock") and shares of the Company's Class B Common Stock, no par value ("Class B Common Stock" and, together with the Class A Common Stock, the "Common Stock"); WHEREAS, the Major A Stockholders own shares of Class A Common Stock as indicated on Exhibit "A" to this Agreement; WHEREAS, pursuant to the Investment Agreement, the Company has agreed that under certain circumstances Monsanto shall have the right to designate up to two (2) directors on the Company's Board of Directors; WHEREAS, pursuant to the Investment Agreement, the Company has agreed to amend its Bylaws (as amended, the "Bylaws") and to provide notification to Monsanto in the event the Company is considering certain business combination transactions; and WHEREAS, the Major A Stockholders have entered into the Roberts Family Voting Trust Agreement in the form attached hereto as Exhibit B and the Roberts Family Shareholder Agreement in the form attached hereto as Exhibit C. NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions herein contained, the Major A Stockholders and Monsanto hereby agree as follows: 2 6 ARTICLE 1 Definitions As used in this Agreement, the following terms shall have the following respective meanings (all terms defined in this Article 1 or in other provisions of this Agreement in the singular shall have the same meaning when used in the plural and vice versa): 1.1 "Affiliate" has the same meaning as in Rule 12b-2 promulgated under the Exchange Act. 1.2 "Board of Directors" means the Board of Directors of the Company. 1.3 "Business Combination" shall mean a merger or consolidation in which the Company is a constituent corporation and pursuant to which the Common Stock is converted into or exchanged for cash, securities or other property or a sale of all or substantially all of the assets of the Company and its subsidiaries taken as a whole, or a sale of all or substantially all the assets of the Company's United States seed corn business; provided that a transaction in which the beneficial ownership of the capital stock of the Company or of the sole surviving corporation to the transaction (or of the ultimate parent of the Company or of such sole surviving corporation) immediately after the consummation of such transaction is substantially the same as the beneficial ownership of the Company's capital stock immediately prior to the consummation thereof shall not be deemed a Business Combination unless such transaction shall result in the sale of all or substantially all the assets of the Company and its subsidiaries taken as a whole or all or substantially all of the assets of the Company's United States seed corn business. 1.4 "Bylaws" has the meaning set forth in the recitals hereto. 3 7 1.5 "Class A Common Stock" has the meaning set forth in the recitals hereto. 1.6 "Class B Common Stock" has the meaning set forth in the recitals hereto. 1.7 "Closing Date" means the closing of the purchase of Common Stock by Monsanto from the Company pursuant to the terms of the Investment Agreement. 1.8 "Common Stock" has the meaning set forth in the recitals hereto. 1.9 "Company" has the meaning set forth in the first paragraph hereof. 1.10 "Director" means a member of the Board of Directors. 1.11 "Depositor" means a depositor of shares of Common Stock under the Voting Trust Agreement. 1.12 "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 1.13 "Monsanto" has the meaning set forth in the first paragraph hereof. 1.14 "Monsanto Director" has the meaning set forth in Section 2.1. 1.15 "hereto", "hereunder", "herein", "hereof" and the like mean and refer to this Agreement as a whole and not merely to the specific article, section, paragraph or clause in which the respective word appears. 1.16 "Involuntary Transfer Notice" has the meaning set forth in Section 3.2(e). 4 8 1.17 "Involuntary Transfer Stock" has the meaning set forth in Section 3.2(e). 1.18 "Indemnified Person" has the meaning set forth in Section 2.7(b). 1.19 "Investment Agreement" means that certain Investment Agreement, dated as of January 31, 1996 between the Company and Monsanto. 1.20 "Losses" has the meaning as set forth in Section 2.7(a). 1.21 "Major A Stockholder" has the meaning set forth in the first paragraph hereof, together with any pledgees and Permitted Transferees who become parties to this Agreement pursuant to Section 3.5 (a) and (b). 1.22 "Offer Period" has the meaning set forth in Section 3.2(b). 1.23 "Offered Stock" has the meaning set forth in Section 3.2(b). 1.24 "Permitted Transferee" means (i) Douglas C. Roberts, Virginia Roberts Holt, John T. Roberts, or their parents, (ii) any Depositor, (iii) any spouse, lineal descendant (including adopted descendants), or spouse of a lineal descendant (including adopted descendants) of Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts, (iv) any trust or other entity the sole beneficiaries or owners of which are Persons referred to in this definition, (v) any Person receiving any interest in shares of Stock pursuant to a Major A Stockholder's last will and testament or by distribution at a Major A Stockholder's death from a trust established by a Major A Stockholder or according to the laws of intestate succession, or (vi) any ex-spouse of Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts or any ex-spouse of a lineal descendant (including adopted descendants) of Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts, 5 9 to the extent (and only to the extent) that any such ex-spouse receives any interest in Stock pursuant to a court order entered in connection with a divorce proceeding. 1.25 "Person" means a corporation, association, partnership, joint venture, limited liability company, individual, trust, unincorporated organization, a government agency or political subdivision thereof and any other entity. 1.26 "Pledge" when used as a verb means to pledge, hypothecate, mortgage, create any security interests in or otherwise encumber and when used as a noun means any resulting pledge, hypothecation, mortgage, security interest or other encumbrance. 1.27 "Roberts Family Shareholder Agreement" means the agreement attached hereto as Exhibit C. 1.28 "Roberts Family Voting Trust Agreement" means the agreement attached hereto as Exhibit B. 1.29 "Selling Stockholder" has the meaning set forth in Section 3.2(b). 1.30 "Stock" means the following securities: (i) the Class A Common Stock of the Company and any other common or preferred stock of the Company entitled to vote generally in the election of directors whether presently issued or hereafter authorized, designated and issued, now owned or hereafter acquired by each Major A Stockholder, (ii) any option, warrant or right to acquire Class A Common Stock (or any security or other instrument referred to in this definition) and (iii) any security or other instrument exchangeable for, or convertible into, Class A Common Stock (or any security or other instrument referred to in this definition). 1.31 "Transfer Notice" has the meaning set forth in Section 3.2(b). 6 10 1.32 "Transferring Stockholder" has the meaning set forth in Section 3.2(e). 1.33 "Voting Trust" means the trust established under the Roberts Family Voting Trust Agreement. ARTICLE 2 Election of Monsanto Directors; Corporate Governance Provisions in Certificate of Incorporation and Bylaws 2.1 Monsanto Directors. As set forth in the Investment Agreement, depending on its ownership percentage of the Company's Common Stock, Monsanto shall have the right to nominate up to two (2) directors (together, the "Monsanto Directors" and, individually, a "Monsanto Director") to the Board of Directors. Initially, one Monsanto Director shall be nominated by Monsanto within twenty (20) business days after the Closing Date and shall have a term expiring at the Company's 1999 annual meeting of stockholders. If Monsanto is entitled to nominate a second director, then such second Monsanto Director shall be nominated for election at the Company's 1997 annual meeting of stockholder and shall have a term expiring at the Company's 2000 annual meeting of stockholders. 2.2 Amendment of Bylaws. As set forth in the Investment Agreement, prior to the Closing, the Company has agreed to cause Article IX of the Bylaws to be amended as provided in Exhibit "D" hereto. 2.3 Solicitation and Voting of Shares. In any election of Directors, each Major A Stockholder shall use best efforts to attend such stockholder meeting (in person or by proxy) for purposes of establishing a quorum and shall vote (in person or by proxy) all its shares of Stock in favor of any Monsanto Director nominated by Monsanto and 7 11 recommended by the Board of Directors; provided that such Monsanto Director is reasonably satisfactory to the Company. 2.4 Amendment of Bylaws. During the term of this Agreement and after the adoption by the Company of the amendments to the Bylaws described in Exhibit "D" hereto, without the prior written consent of Monsanto, the Major A Stockholders shall not directly or indirectly initiate any action that would result in the amendment of Section 9.3, 9.4, 9.5, 9.6 or 9.7 of the Bylaws. 2.5 Implementation of Investment Agreement. During the term of this Agreement, each Major A Stockholder shall vote its shares of Stock in favor of any proposed amendment to the Company's Certificate of Incorporation increasing the Company's authorized capital stock, which amendment is required in order for the Company to comply with the provisions of Article 10 of the Investment Agreement. 2.6 Injunctive Relief. In the event of a breach of the provisions of this Article 2 by any of the Major A Stockholders, Monsanto will suffer irreparable harm and the total amount of monetary damages will be impossible to calculate and will therefore be an inadequate remedy. Accordingly, in such event, Monsanto shall be entitled to temporary and permanent injunctive relief against the breaching party and to any other rights and remedies to which Monsanto may be entitled to at law or in equity. 8 12 2.7 Indemnification of Major A Stockholders. (a) Monsanto's Indemnification Agreement. Subject to paragraph (b) below, Monsanto shall indemnify and hold the Major A Stockholders and their respective affiliates, trustees, trust beneficiaries, directors, officers, stockholders, employees, agents, successors and assigns (each an "Indemnified Person") harmless from and against any and all claims, liabilities, fines, penalties, demands, causes of action, suits, judgments, losses, injuries, damages (including costs of defense, settlement and reasonable attorneys' fees) (all of the foregoing hereinafter collectively called "Losses") suffered or incurred by any Indemnified Person which arise from or in connection with actions or inactions of any Indemnified Person in the performance of the obligations of any Major A Stockholder under this Article 2. (b) Procedure. In the event that, from and after the Closing, a third person asserts any claim against any Indemnified Person with respect to any matter to which the foregoing indemnities apply, the Indemnified Person shall give prompt written notice to Monsanto, and Monsanto shall have the right, at its election, to take over the defense or settlement of such claim at its own expense by giving prompt written notice to the Indemnified Person; provided, however, that, (i) if Monsanto does not give such notice and does not proceed diligently to defend the claim within thirty (30) days after receipt of such notice of the claim, then the Indemnified Person may employ separate counsel to represent it and defend it against such claim and Monsanto shall be bound by any defense or settlement that the Indemnified Person may make as to such claim and shall reimburse the Indemnified Person for any and all Losses resulting therefrom as such Losses are incurred and (ii) if Monsanto elects to defend the claim, then Monsanto shall employ counsel reasonably satisfactory to the Indemnified Person and the 9 13 Indemnified Person shall be entitled to participate in (but not control) the defense of such claim and to employ separate counsel at its own expense to assist in the handling of such claim, unless the common counsel determines, in compliance with the canons of ethics of the legal profession, that a conflict of interest exists between Monsanto and an Indemnified Person, in which event the Indemnified Person may appoint separate counsel to represent or defend it against the claim and Monsanto shall reimburse such Indemnified Person for all Losses resulting therefrom as such Losses are incurred. The Indemnified Person and Monsanto shall cooperate in defending any such third person's claim, and Monsanto, to the extent Monsanto elects to defend such claim, shall have reasonable access to records, information and personnel in the possession or control of any other party hereto which are applicable to the subject matter of any claim or which are otherwise pertinent to the defense of such claim and the Indemnified Person shall otherwise cooperate with Monsanto in all respects in connection therewith. Monsanto shall reimburse the Indemnified Person for all of the Indemnified Person's reasonable out-of-pocket costs as they are incurred in connection with the activities set forth in the immediately preceding sentence and in enforcing this indemnification. Notwithstanding the foregoing, Monsanto shall not settle or compromise any such claim without the prior written consent of the Indemnified Person, such consent not to be unreasonably withheld, unless, after consultation between such parties, the terms of such settlement or compromise release such Indemnified Person from any and all liability with respect to such claim and do not in any manner adversely affect the future operations or activities of such Indemnified Person. 10 14 ARTICLE 3 Limitation on Certain Transfers 3.1 General Limitations on Certain Transfers. (a) Subject to Section 3.5, during the term of this Agreement, no Major A Stockholder shall in any manner, whether directly or indirectly, voluntarily or by operation of law, sell, convey, transfer, assign, or otherwise dispose of ("transfer") any interest in its Stock to any Person or convert any of its Class A Common Stock to Class B Common Stock except as provided under the terms of this Agreement after complying with the provisions of this Article 3. (b) Notwithstanding any other provision of this Agreement including this Article 3, in no event shall any Major A Stockholder tender any of its shares of Stock in the tender offer to purchase shares of Class B Common Stock to be made by Monsanto pursuant to the terms described in the Investment Agreement. 3.2 Limitation on Certain Conversions and Transfers. (a) Limitation on Conversions. Except pursuant to a court order entered in connection with a divorce proceeding to an ex-spouse of Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts or to an ex-spouse of a lineal descendant of Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts, no Major A Stockholder shall convert any of its Class A Common Stock to Class B Common Stock until such time as such Major A Stockholder has entered into a binding agreement to sell or otherwise convey such Class B Common Stock to a third party. 11 15 (b) Limitations on Voluntary Transfers. Subject to Section 3.5, in the event that any Major A Stockholder desires to transfer any interest in its Stock, including, without limitation, a redemption of such Stock by the Company, such Major A Stockholder (the "Selling Stockholder") shall make a written offer (the "Transfer Notice") to Monsanto stating (i) the number of shares of Stock proposed to be so transferred (the "Offered Stock") and (ii) the price, form of consideration and other material terms upon which the Offered Stock are being offered; provided, however, that in the event the Transfer Notice shall state that the Major A Stockholder intends to dispose of such Offered Stock by means of an underwritten public offering (a "Public Offering"), in lieu of stating a price at which the Offered Stock is being offered, the Major A Stockholder may state an estimated price (less estimated underwriting discounts and expenses of sale) at which the Major A Stockholder is advised in writing by the managing underwriter as its good faith estimate of the average between the estimated minimum and maximum amounts at which such Offered Stock may be sold in the Public Offering (the "Average Price"). For a period of twenty-five (25) days (if the form of consideration specified in the Transfer Notice only includes cash and/or shares of stock traded in the NASDAQ National Market System or on a U.S. securities exchange ("traded stock")), or ninety (90) days (if the form of consideration specified in the Transfer Notice includes property other than cash or traded stock) following the date of the Transfer Notice (the "Offer Period"), Monsanto shall have the irrevocable and exclusive option (but not obligation) to purchase all (but not less than all) of the Offered Stock in cash for the price per share and upon the other terms specified in the Transfer Notice; provided, however, in the event the Transfer Notice shall have stated that the Major A Stockholder intends to dispose of the Offered Stock in a Public Offering, Monsanto may purchase the Offered Stock at the Average Price (less the estimated amount of underwriting discounts and expenses of offering) stated in the Transfer Notice; provided, further, that if the proposed consideration specified in the Transfer Notice includes property 12 16 other than cash, then Monsanto shall have the option to purchase the Offered Stock for consideration other than cash that is equal in value to the non-cash property specified in the Transfer Notice; and provided, further, that if the consummation of the transfer described in the Transfer Notice would cause the Selling Stockholder to recognize less gain for income tax purposes than the amount of taxable gain which the Selling Stockholder would recognize as a result of a cash sale to Monsanto, then the aggregate purchase price for the Offered Stock payable by Monsanto shall be increased by an amount equal to (A) the gain which would not have otherwise been recognized for income tax purposes multiplied by a fraction, the numerator of which is one and the denominator of which is one minus the highest marginal income tax rate on capital gains for individuals in effect at such time, minus (B) the gain which would not have otherwise been recognized for income tax purposes. The gain which would not have otherwise been recognized for income tax purposes shall be computed using the Selling Stockholder's actual tax basis in the Offered Stock based upon (i) such records as Monsanto shall reasonably request and (ii) as are certified by such Selling Stockholder as true, complete, and correct. Monsanto's option to purchase the shares of Offered Stock shall be exercised by giving written notice to the Selling Stockholder within the Offer Period. Alternatively, if Monsanto rejects the Selling Shareholder's offer to sell the Offered Stock for the price per share and upon the terms specified in the Transfer Notice, then, for the remainder of the Offer Period, Monsanto shall have the exclusive right to propose alternative terms to the Selling Stockholder for the purchase of the Offered Stock at such price per share and upon such terms as the parties may agree upon. Subject to Section 3.5, in the event a Selling Stockholder proposes to dispose of Offered Stock in a transaction subject to Article 3 hereof for consideration that includes non-cash consideration other than traded stock, such Selling Stockholder shall stipulate the value of such property in the Transfer 13 17 Notice and shall, at the request of Monsanto, provide to Monsanto, at the Selling Stockholder's expense, a written valuation of such property prepared by a nationally- recognized firm experienced in appraising the specified type of property , which sets forth the value of such property. In the event that Monsanto does not agree with such valuation, Monsanto shall deliver a written notice of such disagreement to the Selling Stockholder within fifteen (15) days of the receipt of the written valuation and shall thereafter deliver to the Selling Stockholder within thirty (30) days following delivery of such disagreement, at Monsanto's expense, a written valuation of such property prepared on the same basis by another nationally-recognized firm experienced in appraising the specified type of property, which sets forth the value of such property. The Selling Stockholder may either accept such subsequent valuation or deliver written notice of its disagreement with such valuation to such Selling Stockholder. In the latter event, the Selling Stockholder and Monsanto shall agree to the appointment of a third nationally-recognized firm experienced in appraising the specified type of property, who shall be selected by mutual agreement of their respective nationally-recognized firms, whose valuation shall establish conclusively the price for purposes of the Transfer Notice. The expense of such third firm shall be borne equally by the parties. If property to be received by a Selling Stockholder includes shares of stock that are traded on the NASDAQ National Market System or any other system then in use, then the value of a share of such stock shall be deemed to be the last reported sale price (or, if not available, the average of the closing bid and ask price) per share during the 30-day period immediately preceding the date of the Transfer Notice. If the property to be received by a Selling Stockholder includes shares of a stock that is listed on a United States securities exchange registered under the Exchange Act, then the value of a share of such stock shall be deemed to be the average of the closing sale price per share of such stock 14 18 during the 30-day period immediately preceding the date of the Transfer Notice on the principal United States securities exchange registered under the Exchange Act on which such stock is listed. (c) Acceptance of Offer. If, during the Offer Period, Monsanto exercises its right to purchase the Offered Stock at the price per share and upon the terms specified in the Transfer Notice or if the parties otherwise reach an agreement regarding the price, terms and conditions of the sale, then the Selling Stockholder shall sell the shares of Offered Stock to Monsanto in accordance with the price per share and terms specified in the Transfer Notice or pursuant to such price, terms and conditions otherwise agreed upon by the parties, including standard terms and conditions for a stock purchase agreement. The closing of any such purchase shall take place no later than twenty-five (25) days (if the form of consideration specified in the Transfer Notice only includes cash or traded stock) or ninety (90) days (if the form of consideration specified in the Transfer Notice includes property other than cash or traded stock) following the expiration of the Offer Period. (d) Nonacceptance of Offer. If, at the end of the Offer Period, Monsanto has not exercised its right to purchase the Offered Stock at the price per share and upon the terms specified in the Transfer Notice and the parties have not otherwise reached an agreement regarding the price, terms and conditions of the Sale, then such Selling Stockholder shall be entitled to offer and sell such shares of Offered Stock to any Person (free and clear of any rights of Monsanto) provided that the price, terms and conditions of such sale, considered as a whole, are at least as favorable to the Selling Stockholder as either (i) those set forth in the Transfer Notice or (ii) those offered by Monsanto in any counter offer, if any; provided, in the event the Transfer Notice shall have stated an Average Price, the Offered Stock may be disposed of in a Public Offering at a price no less than the minimum 15 19 amount used as a basis to calculate the Average Price (less actual underwriting discounts and expenses). Notwithstanding the foregoing, if the Selling Stockholder shall not have signed a definitive agreement to sell the Offered Stock within one hundred eighty (180) days immediately following the expiration of the Offer Period, then the shares of Offered Stock shall again be subject to the terms and conditions of this Agreement in the same manner as if the Transfer Notice had not been given. (e) Limitations on Involuntary Transfers. Subject to Section 3.5, if any involuntary transfer of any of the Stock owned by a Major A Stockholder (a "Transferring Stockholder") shall occur (such as, but not limited to, a sale by a Major A Stockholder's trustee in bankruptcy, or a sale to a purchaser at any creditor's or court sale) other than an involuntary transfer to a Permitted Transferee: (i) Transferee Takes Subject Hereto. The transferee (which term, as used herein, shall include any and all transferees and subsequent transferees of the initial transferee) shall take and hold such Stock subject to all of the restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect. (ii) Involuntary Transfer Notice. The Transferring Stockholder (or, if it fails to do so, the transferee) shall promptly give written notice (the "Involuntary Transfer Notice") to Monsanto and the Company stating (a) when the involuntary transfer occurred or is to occur, (b) the circumstances alleged to require such transfer, (c) the number of shares of Stock involved and (d) the name, address and capacity of the transferee. If both the Transferring Stockholder and the transferee shall fail to give the Involuntary Transfer Notice, then the Involuntary Transfer Notice may be given by the Company or by any other stockholder of the Company and 16 20 the Involuntary Transfer Notice so given may contain only such portion of the information set forth in the preceding sentence as shall be known to the Person so giving the Involuntary Transfer Notice. (iii) Purchase Option. Monsanto shall have the irrevocable and exclusive option (but not the obligation) for a period of forty-five (45) days immediately following receipt of the Involuntary Transfer Notice to purchase all but not less than all of the shares of Stock included in the Involuntary Transfer Notice (the "Involuntary Transfer Stock") in cash for the price per share and upon the terms and conditions set forth in this Section 3.2(e). An election to exercise Monsanto's option shall be made by Monsanto by giving written notice to the Company, the transferee and the Transferring Stockholder. (iv) Failure to Give Notice. Failure by Monsanto to give the notice provided for in paragraph (e)(iii) within the time period provided for therein shall be deemed an election by Monsanto not to purchase any shares of the Involuntary Transfer Stock. (v) Closing. If the shares of Involuntary Transfer Stock are to be purchased by Monsanto pursuant to this Section 3.2(e), then such purchase shall, unless the parties thereto otherwise agree, be completed at the principal office of Monsanto on the thirtieth (30th) day following the giving of notice by Monsanto pursuant to paragraph (e)(iii) of its election to exercise its option to purchase the Involuntary Transfer Stock. (vi) Purchase Price. The price per share of the Involuntary Transfer Stock to be paid by Monsanto upon exercise of its option to purchase such 17 21 Involuntary Transfer Stock pursuant to paragraph (e)(iii) shall be as follows: (a) With respect to shares of Class A Common Stock, if the shares of the Company's Class B Common Stock are then traded in the NASDAQ National Market System or on a United States securities exchange registered under the Exchange Act, the price per share shall be the average of the last reported sales price (or, if not available, the average of the closing bid and ask price) per share of the Company's Class B Common Stock on the NASDAQ National Market System (or such other securities exchange on which the Company's Class B Common Stock is then listed) on each of the thirty (30) trading days immediately preceding the closing of the purchase of such Class A Common Stock; and (b) With respect to shares of any Involuntary Transfer Stock other than Class A Common Stock, or, with respect to shares of Class A Common Stock if the Company's Class B Common Stock is not then listed on the NASDAQ National Market System or on a United States securities exchange registered under the Exchange Act, the price per share shall be the fair market value per share as determined by an investment banking firm of recognized standing selected by mutual agreement of the transferee or Transferring Stockholder, as the case may be (depending on who is the legal owner of the Involuntary Transfer Stock), and Monsanto. If the transferee or the Transferring Stockholder, as the case may be, and Monsanto are unable to agree upon an investment banking firm to perform the valuation, then both Monsanto and the transferee or the Transferring Stockholder, as the case may be, shall select an 18 22 investment banking firm and the two investment banking firms so selected shall select a third investment banking firm to perform the valuation. The determination of the third investment banking firm as to the fair market value per share shall be final and binding on the parties. If the parties are unable to mutually agree upon an investment banking firm to perform the valuation, then Monsanto and the transferee or the Transferring Stockholder, as the case may be, shall pay the fees of the investment banking firm selected by each such party. The fees of any investment banking firm mutually agreed upon by the parties and the fees of any third investment banking firm performing the valuation in connection with the services provided pursuant to this paragraph (e)(vi) shall be paid fifty percent (50%) by Monsanto and fifty percent (50%) by the transferee or the Transferring Stockholder, as the case may be. (vii) Delivery of Certificates. At the closing of the purchase and sale of Involuntary Transfer Stock pursuant to the exercise of options granted under this Section 3.2, the Transferring Stockholder or the transferee, as the case may be, shall deliver to Monsanto duly endorsed for transfer, with all required state or federal documentary tax stamps affixed thereto, certificates representing all of the shares of Involuntary Transfer Stock being purchased and sold at such closing against payment therefor in cash or certified or bank cashier's check. In addition, the Transferring Stockholder or the transferee, as the case may be, shall deliver to Monsanto such signature guarantees and other documents and certificates as may be reasonably requested by Monsanto in order to confirm the Transferring Stockholder's or the transferee's, as the case may be, 19 23 title to such Involuntary Transfer Stock and its authority to act in connection with the sale thereof. 3.3 Legend. A copy of this Agreement shall be filed with the Secretary of the Company and shall be kept at its principal executive office. Upon the execution of this Agreement, each of the Major A Stockholders shall cause each certificate representing shares of Stock owned by such Major A Stockholder to carry a legend as follows: THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, CONVEYED, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED, MORTGAGED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER COMPLIES WITH THE PROVISIONS OF A STOCKHOLDERS' AGREEMENT DATED AS OF JANUARY 31, 1996, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY. Upon the acquisition of additional shares of Stock after the date hereof, each Major A Stockholder shall cause each certificate representing such additional shares of Stock to carry the above legend. 3.4 Nonrecognition of Certain Transfers. Any transfer, acquisition or conversion of shares of Stock in violation of this Agreement shall be null and void. Each Major A Stockholder agrees that any such transfer, acquisition or conversion may and should be enjoined. 3.5 Exceptions. The provisions of this Article 3 shall not apply to: (a) a Pledge of Stock or any interest therein to a bank or other reputable lending institution in a bona fide loan transaction and not made in bad faith to avoid the provisions of this Article 3; provided, however, if the pledgee is not a party to this 20 24 Agreement it shall execute a counterpart of this Agreement acknowledging that it has become a party to this Agreement with respect to the shares of Stock so pledged, after which such pledgee shall be deemed a Major A Stockholder; (b) a transfer, directly or indirectly, voluntarily or involuntarily, of any interest in Stock to a Permitted Transferee (including transfers of Voting Trust Certificates or interests in Stock pursuant to the Roberts Family Voting Trust Agreement and the Roberts Family Shareholder Agreement); provided, however, that the Permitted Transferee, if not then a party to this Agreement, shall execute a counterpart to this Agreement acknowledging that it has become a party to this Agreement with respect to the shares of Stock so transferred, after which such Permitted Transferee shall be deemed a Major A Stockholder; (c) the appointment of or transfer of any interest in Stock to any trustee, guardian, executor, administrator, Voting Trustee of the Voting Trust or other fiduciary acting solely for the benefit of one or more Permitted Transferees; (d) the granting of a proxy with respect to Stock solicited by the Board of Directors; (e) any exchange, conversion or transfer of Stock in connection with a Business Combination; provided, however, that this clause (e) shall not permit any agreement to sell or otherwise transfer any interest in Stock (including the granting of any proxy to the acquiror) by any Major A Stockholder prior to the Company's execution of an agreement with respect to such Business Combination; or (f) any tender or exchange of Stock in accordance with the terms of any tender or exchange offer, which tender or exchange offer would result, if consummated in accordance with its terms, in the beneficial ownership by any Person or group (within the meaning of Rule 13d-3 of the Exchange Act) of all of the Class A Common Stock and 21 25 Class B Common Stock; provided, however, that this clause (f) shall not permit any Major A Stockholder to surrender (or enter into a binding agreement to sell or surrender) any Stock or interest therein in connection with such tender or exchange offer unless the Company has previously published to security holders of the Company a statement pursuant to Rule 14e-2 (or any successor rule) under the Exchange Act. ARTICLE 4 Miscellaneous 4.1 Governing Law. This Agreement shall be governed in all respects by the laws of the State of Delaware (exclusive of such state's choice of laws rules). 4.2 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or transferred, in whole or in part, by any of the parties without the prior written consent of the other parties hereto, except that Monsanto may, without the prior written consent of the other parties hereto, assign all or any of its rights, interests, and obligations under this Agreement to a wholly owned, direct or indirect, United States subsidiary of Monsanto, provided that Monsanto (i) shall remain liable for the performance by any such subsidiary of its obligations under this Agreement, (ii) shall act as agent for any and all such subsidiaries in connection with the receipt and giving of notices under this Agreement and (iii) shall not cause or permit any such subsidiary to be other than a wholly owned direct or indirect subsidiary of Monsanto. Subject to the preceding sentence and as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, permitted assigns, heirs, executors, and administrators of the parties hereto. 4.3 Entire Agreement. This Agreement constitutes the complete, exclusive and final understanding and agreement between the parties with regard to the subjects hereof. 22 26 4.4 Notices. Any notice required or permitted to be given under this Agreement shall be in writing, and shall be deemed sufficiently given when delivered in person or transmitted by telegram or telecopier (confirmed by mail) or by a national overnight delivery service, addressed as follows: If to Monsanto: Monsanto Company 800 N. Lindbergh Blvd. St. Louis, MO 63167 Attention: Chief Financial Officer Telecopy Number: (314) 694-3001 with a copy to: Monsanto Company 800 N. Lindbergh Blvd. St. Louis, MO 63167 Attention: General Counsel and Secretary Telecopy Number: (314) 694-3001 If to Douglas C. Douglas C. Roberts Roberts: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, IL 60115 Telecopy Number: (815) 758-3711 23 27 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 If to Lynne King Roberts: Lynne King Roberts c/o Douglas C. Roberts DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, IL 60115 Telecopy Number: (815) 758-3711 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 If to Terrance K. Holt: Terrance K. Holt 2329 Clover Lane Northfield, IL 60093 Telecopy Number: (708) 572-1818 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 If to Virginia R. Holt: Virginia R. Holt 2329 Clover Lane Northfield, IL 60093 Telecopy Number: (708) 572-1818 24 28 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 If to John T. Roberts: John T. Roberts 2090 Mulsanne Drive Zionsville, IN 46077 Telecopy Number: (317) 594-4501 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 If to Robin R. Robin R. Roberts Roberts: 2090 Mulsanne Drive Zionsville, IN 46077 Telecopy Number: (317) 594-4501 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 or to such other address as may be specified from time to time in a notice given by such party. The parties agree to acknowledge in writing the receipt of any such notice delivered in person. 25 29 4.5 Delays or Omissions. Except as otherwise provided in this Agreement, no delay or omission to exercise any right, power or remedy accruing to Monsanto, upon any breach or default of or any Major A Stockholder under this Agreement, shall impair any such right, power or remedy of Monsanto nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party or any waiver on the part of any party of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, at law, in equity or otherwise afforded to any party, shall be cumulative and not alternative. 4.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 4.7 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided, however, that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party. 4.8 Sections and Articles. All sections and articles referred to herein are sections and articles of this Agreement. 4.9 Headings. Headings as to the contents of particular articles and sections are for convenience only and are in no way to be construed as part of this Agreement or as a limitation of the scope of the particular articles or sections to which they refer. 26 30 4.10 Term. The provisions of this Agreement shall be effective from the date hereof until the earlier of (i) the termination of the Collaboration Agreement and License between Monsanto and the Company dated of even date herewith (except if the same is terminated by reason of a material breach thereof by the Company or by reason of a governmental decree caused by the voluntary action of the Company), (ii) such time as Monsanto owns less than (A) five percent (5%) of the outstanding Class A Common Stock or (B) less than fifty percent (50%) of the highest percent of the outstanding Common Stock as is beneficially owned by Monsanto after completion of the tender offer contemplated by the Investment Agreement, the Closing and any purchases in the market of Class B Common Stock by Monsanto as permitted under the Investment Agreement during the one year period after the Closing, (iii) the date on which the Investment Agreement is terminated and (iv) on the eleventh anniversary of the Closing or any subsequent anniversary of the Closing if either Monsanto on the one hand or a majority in interest of Stock beneficially owned by the Persons who are then Major A Stockholders on the other gives written notice to all other parties hereto that this Agreement shall terminate on any such anniversary which is more than 60 days after the date of such notice. 4.11 Effective Date. The provisions of this Agreement shall be effective as of the consummation of the Closing. If the Investment Agreement is terminated prior to the consummation of the Closing, then the provisions of this Agreement shall be null and void and of no further force or effect and this Agreement shall be deemed to be terminated. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first above written. Monsanto Company /s/ Robert T. Fraley -------------------- Robert T. Fraley President, Ceregen 27 31 Douglas C. Roberts /s/ Douglas C. Roberts --------------------- Douglas C. Roberts, individually and as Trustee of (i) the Douglas C. Roberts Trust dated January 28, 1972, (ii) the David Kim Roberts 1989 Trust, (iii) the Steven Suh Roberts 1989 Trust, and (iv) the Jeffrey King Roberts 1989 Trust 28 32 Virginia R. Holt /s/ Virginia R. Holt --------------------- Virginia R. Holt, individually and as Trustee of (i) the Virginia R. Holt Trust dated August 22, 1973, (ii) the Amanda Mary Holt 1989 Trust, and (iii) the Laura Elizabeth Holt 1989 Trust 29 33 John T. Roberts /s/ John T. Roberts ------------------- John T. Roberts, individually and as Trustee of (i) the John T. Roberts Trust dated April 9, 1976, (ii) the Allison Elizabeth Roberts 1989 Trust, and (iii) the Katherine Elsie Roberts 1990 Trust Number 1 30 34 Robin R. Roberts /s/ Robin R. Roberts -------------------- Robin R. Roberts, as Trustee of (i) the Allison Elizabeth Roberts Trust dated August 6, 1986, (ii) the Katherine Elsie Roberts Trust dated March 13, 1990, and (iii) the Charles David Roberts Trust dated February 28, 1994 31 35 Terrance K. Holt /s/ Terrance K. Holt -------------------- Terrance K. Holt, as Trustee of the Amanda Mary Holt Trust dated December 6, 1985 32 36 Charles C. Roberts and Mary R. ROBERTS /s/ Charles C. Roberts ---------------------- /s/ Mary R. Roberts ------------------- CHARLES C. Roberts and Mary R. Roberts, as Trustees of (i) the Charles C.and Mary R. Roberts Living Trust dated October 15, 1991, (ii) the Trust F/B/O Douglas C. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967, (iii) the Trust F/B/O Virginia R. Holt under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967, and (iv) the Trust F/B/O John T. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967 33 37 Lynne King Roberts /s/ Lynne King Roberts ---------------------- Lynne King Roberts, as Trustee of the David Kim Roberts Trust dated October 14, 1987 34 EX-99.C.3 13 REGISTRATION RIGHTS AGREEMENT 1 Execution Copy ================================================================================ REGISTRATION RIGHTS AGREEMENT dated as of January 31, 1996 between DEKALB GENETICS CORPORATION and MONSANTO COMPANY ================================================================================ 2 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of January 31, 1996 between DEKALB GENETICS CORPORATION, a Delaware corporation (the "Company"), and MONSANTO COMPANY, a Delaware corporation ("Holder"). RECITALS WHEREAS, the Holder has agreed to purchase from the Company in accordance with the terms and conditions of an Investment Agreement between the Company and the Holder dated the date hereof (the "Investment Agreement") certain newly issued shares of the Company's Class B Stock and Class A Stock and may acquire additional shares of outstanding Class B Stock pursuant to a tender offer as described in the Investment Agreement; WHEREAS, the parties hereto desire to set forth the Holder's rights and the Company's obligations to cause the registration of the Registrable Securities pursuant to the Securities Act; NOW, THEREFORE, in consideration of the covenants and agreements of the Holder and the Company contained herein and in the Investment Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Definitions and Usage. As used in this Agreement: 1.1. Definitions. Agent. "Agent" shall mean the principal placement agent on an agented placement of Registrable Securities. Board. "Board" shall mean the Board of Directors of the Company. Class A Stock. "Class A Stock" shall mean (i) the Class A Common Stock, without par value, of the Company; and (ii) shares of capital stock of the Company issued by the Company in respect of or in exchange for shares of such Class A Stock in connection with any stock dividend or distribution, stock split-up, recapitalization, recombination or exchange by the Company generally of shares of such Class A Stock. Class B Stock. "Class B Stock" shall mean (i) the Class B Common Stock, without par value, of the Company, and (ii) shares of capital stock of the Company issued by the Company in respect of or in exchange for shares of such Class B Stock in -1- 3 connection with any stock dividend or distribution, stock split-up, recapitalization, recombination or exchange by the Company generally of shares of such Class B Stock. Closing. "Closing" shall mean the closing for the issuance and purchase of the Class A Stock and the Class B Stock as defined in and pursuant to the Investment Agreement. Closing Date. "Closing Date" shall mean the date of the Closing. Commission. "Commission" shall mean the Securities and Exchange Commission. Continuously Effective. "Continuously Effective", with respect to a specified registration statement, shall mean that such registration statement shall not cease to be effective and available for Transfers of Registrable Securities thereunder for longer than either (i) any ten (10) consecutive business days, or (ii) an aggregate of fifteen (15) business days during the period specified in the relevant provision of this Agreement. Demand Registration. "Demand Registration" shall have the meaning set forth in Section 2.1(i). Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934. Holder. "Holder" shall mean HERB COMPANY. Investment Agreement. "Investment Agreement" shall have the meaning set forth in the first Recital to this Agreement. Person. "Person" shall mean any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. Piggyback Registration. "Piggyback Registration" shall have the meaning set forth in Section 3. Register, Registered and Registration. "Register", "registered", and "registration" shall refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering by the Commission of effectiveness of such registration statement or document. -2- 4 Registrable Securities. "Registrable Securities" shall mean the Class B Stock which the Holder acquires pursuant to the Investment Agreement (including by way of the tender offer described therein and any open market purchases permitted thereunder) and any Class B Stock which the holder acquires upon exchange of Class A Stock acquired by the Holder pursuant to the Investment Agreement, in either case owned by the Holder on the date of determination; provided, however, that Registrable Securities shall not include any security of the Company acquired by the Holder in violation of an express covenant of the Holder contained in the Investment Agreement, and, provided further, the Company shall have no obligation under Sections 2 and 3 to register any Registrable Securities of the Holder if the Company shall deliver to the Holder an opinion of counsel reasonably satisfactory to such Holder and its counsel to the effect that the proposed sale or disposition of all of the Registrable Securities for which registration was requested does not require registration under the Securities Act for a sale or disposition in a single public sale, and offers to remove any and all legends restricting transfer from the certificates evidencing such Registrable Securities, subject to prior compliance by the Holder with the provisions of Article 9 of the Investment Agreement. Registration Expenses. "Registration Expenses" shall have the meaning set forth in Section 6.1. Securities Act. "Securities Act" shall mean the Securities Act of 1933. Transfer. "Transfer" shall mean and include the act of selling, giving, transferring, creating a trust (voting or otherwise), assigning or otherwise disposing of (other than pledging, hypothecating or otherwise transferring as security) (and correlative words shall have correlative meanings); provided however, that any transfer or other disposition upon foreclosure or other exercise of remedies of a secured creditor after an event of default under or with respect to a pledge, hypothecation or other transfer as security shall constitute a "Transfer". Underwriters' Representative. "Underwriters' Representative" shall mean the managing underwriter, or, in the case of a co-managed underwriting, the managing underwriter designated as the Underwriters' Representative by the co-managers. Violation. "Violation" shall have the meaning set forth in Section 7.1. 1.2. Usage. (i) References to a Person are also references to its successors in interest (by means of merger, consolidation or sale of all or substantially all the assets of such Person or otherwise, as the case may be) and permitted assigns. (ii) References to a document are to it as amended, waived and otherwise modified from time to time and references to a statute or other governmental rule are to it as amended and otherwise modified from time to time (and references to any provision thereof shall include references to any successor provision). -3- 5 (iii) References to Sections or to Schedules or Exhibits are to sections hereof or schedules or exhibits hereto, unless the context otherwise requires. (iv) The definitions set forth herein are equally applicable both to the singular and plural forms and the feminine, masculine and neuter forms of the terms defined. (v) The term "including" and correlative terms shall be deemed to be followed by "without limitation" whether or not followed by such words or words of like import. (vi) The term "hereof" and similar terms refer to this Agreement as a whole. (vii) The "date of" any notice or request given pursuant to this Agreement shall be determined in accordance with Section 11. Section 2. Demand Registration. 2.1. (i) At any time on or after the third anniversary of the Closing Date, or after such earlier date as the Holder shall be entitled to transfer shares of Class B Stock pursuant to the provisions of Section 9.1.2 of the Investment Agreement, if the Holder shall make a written request to the Company, the Company shall cause to be filed with the Commission a registration statement meeting the requirements of the Securities Act (a "Demand Registration"), and the Holder shall be entitled to have included therein all or such number of Holder's Registrable Securities, as the Holder shall request in writing; provided, however, that no request may be made pursuant to this Section 2.1 if within twelve (12) months prior to the date of such request a Demand Registration Statement pursuant to this Section 2.1 shall have been declared effective by the Commission. Any request made pursuant to this Section 2.1 shall be addressed to the attention of the Secretary of the Company, and shall specify the number of Registrable Securities to be registered, the intended methods of disposition thereof and that the request is for a Demand Registration pursuant to this Section 2.1(i). (ii) The Company shall be entitled to postpone for up to 180 days the filing of any Demand Registration statement otherwise required to be prepared and filed pursuant to this Section 2.1 (or delay seeking effectiveness of a Registration Statement which has been filed), if the Board determines, in its good faith reasonable judgment, that such registration would materially interfere with, or require premature disclosure of, any financing, acquisition, reorganization or other material matter involving the Company or any of its subsidiaries and the Company promptly gives the Holder notice of such determination; provided, however, that the Company shall not have postponed pursuant to this Section 2.1(ii) the filing of any other Demand Registration statement otherwise required to be -4- 6 prepared and filed pursuant to this Section 2.1 during the 180-day period ended on the date of the relevant request pursuant to Section 2.1(i). 2.2. Following receipt of a request for a Demand Registration, the Company shall: (i) File the registration statement with the Commission as promptly as practicable, and, subject to Section 2.1(ii), shall use the Company's reasonable efforts to have the registration declared effective under the Securities Act as soon as reasonably practicable, in each instance giving due regard to the need to prepare current financial statements, conduct due diligence and complete other actions that are reasonably necessary to effect a registered public offering. (ii) Use the Company's reasonable efforts to keep the relevant registration statement Continuously Effective, if a Demand Registration, for up to 60 days or until such earlier date as of which all the Registrable Securities under the Demand Registration statement shall have been disposed of in the manner described in the Registration Statement. Notwithstanding the foregoing, if for any reason the effectiveness of a registration pursuant to this Section 2 is suspended or, in the case of a Demand Registration, filing of the Registration Statement or seeking effectiveness thereof is postponed as permitted by Section 2.1(ii), the foregoing period shall be extended by the aggregate number of days of such suspension or postponement. 2.3. The Company shall be obligated to effect no more than two Demand Registrations. For purposes of the preceding sentence, registration shall not be deemed to have been effected (i) unless a registration statement with respect thereto has become effective, (ii) if after such registration statement has become effective, such registration or the related offer, sale or distribution of Registrable Securities thereunder is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable to the Holder and such interference is not thereafter eliminated, or (iii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by reason of a failure on the part of the Holder. If the Company shall have complied with its obligations under this Agreement, a right to demand a registration pursuant to this Section 2 shall be deemed to have been satisfied upon the earlier of (x) the date as of which all of the Registrable Securities included therein shall have been disposed of pursuant to the Registration Statement, and (y) the date as of which such Demand Registration shall have been Continuously Effective for a period of [90] days, provided no stop order or similar order, or proceedings for such an order, is thereafter entered or initiated. -5- 7 2.4. A registration pursuant to this Section 2 shall be on such appropriate registration form of the Commission as shall (i) be selected by the Company and be reasonably acceptable to the Holder, and (ii) permit the disposition of the Registrable Securities in accordance with the intended method or methods of disposition specified in the request pursuant to Section 2.1(i). 2.5. If any registration pursuant to Section 2 involves an underwritten offering (whether on a "firm", "best efforts" or "all reasonable efforts" basis or otherwise), or an agented offering, the Holder, shall have the right to select the underwriter or underwriters and manager or managers to administer such underwritten offering or the placement agent or agents for such agented offering; provided, however, that each Person so selected shall be reasonably acceptable to the Company. Section 3. Piggyback Registration. 3.1. If at any time after the third anniversary of the Closing Date, or after such earlier date as the Holder shall be entitled to transfer shares of Class B Stock pursuant to the provisions of Section 9.1.2 of the Investment Agreement, the Company proposes to register (including for this purpose a registration effected by the Company for shareholders of the Company other than the Holder) securities under the Securities Act in connection with the public offering solely for cash on Form S-1, S-2 or S-3 (or any replacement or successor forms), the Company shall promptly give the Holder written notice of such registration (a "Piggyback Registration"). Upon the written request of the Holder given within 20 days following the date of such notice, the Company shall cause to be included in such registration statement and use its reasonable efforts to be registered under the Securities Act all the Registrable Securities that the Holder shall have requested to be registered; provided, however, that such right of inclusion shall not apply to any registration statement covering an underwritten offering of convertible debt securities. The Company shall have the absolute right to withdraw or cease to prepare or file any registration statement for any offering referred to in this Section 3 without any obligation or liability to the Holder. 3.2. If the Underwriters' Representative or Agent shall advise the Company in writing (with a copy to the Holder) that, in its opinion, the amount of Registrable Securities requested to be included in such registration would materially adversely affect such offering, or the timing thereof, then the Company will include in such registration, to the extent of the amount and class which the Company is so advised can be sold without such material adverse effect in such offering: First, all securities proposed to be sold by the Company for its own account; and second, the Registrable Securities requested to be included in such registration by the Holder pursuant to this Section 3 and third, any other securities being registered other than on behalf of the Company or the Holder. 3.3. The Holder shall be entitled to have its Registrable Securities included in up to five (5) Piggyback Registrations pursuant to this Section 3. -6- 8 Section 4. Registration Procedures. Whenever required under Section 2 or Section 3 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as practicable: 4.1. Prepare and file with the Commission a registration statement with respect to such Registrable Securities and, subject to Section 3.1, use the Company's reasonable efforts to cause such registration statement to become effective; provided, however, that before filing a registration statement or prospectus or any amendments or supplements thereto, including documents incorporated by reference after the initial filing of the registration statement and prior to effectiveness thereof, the Company shall furnish to counsel for the Holder, copies of all such documents in the form substantially as proposed to be filed with the Commission prior to filing for review and comment by such counsel. 4.2. Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act and rules thereunder with respect to the disposition of all securities covered by such registration statement. If the registration is for an underwritten offering, the Company shall amend the registration statement or supplement the prospectus whenever required by the terms of the underwriting agreement entered into pursuant to Section 5.2. Pending such amendment or supplement the Holder shall cease making offers or Transfers of Registerable Shares pursuant to the prior prospectus. In the event that any Registrable Securities included in a registration statement subject to, or required by, this Agreement remain unsold at the end of the period during which the Company is obligated to use its reasonable efforts to maintain the effectiveness of such registration statement, the Company may file a post-effective amendment to the registration statement for the purpose of removing such Securities from registered status. 4.3. Furnish to the Holder, without charge, such numbers of copies of the registration statement, any pre-effective or post-effective amendment thereto, the prospectus, including each preliminary prospectus and any amendments or supplements thereto, in each case in conformity with the requirements of the Securities Act and the rules thereunder, and such other related documents as the Holder may reasonably request in order to facilitate the disposition of Registrable Securities owned by the Holder. 4.4. Use the Company's reasonable efforts (i) to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such states or jurisdictions as shall be reasonably requested by the Underwriters' Representative or Agent (as applicable, or if inapplicable, in up to ten states designated by the Holder), and (ii) to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification (or exemption from qualification) of the offer and transfer of any of the Registrable Securities in any jurisdiction, at the earliest possible moment; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify -7- 9 to do business or to file a general consent to service of process in any such states or jurisdictions. 4.5. In the event of any underwritten or agented offering, enter into and perform the Company's obligations under an underwriting or agency agreement (including indemnification and contribution obligations of underwriters or agents in the form set forth in Section 7), in usual and customary form, with the managing underwriter or underwriters of or agents for such offering. The Company shall also cooperate with the Holder, and the Underwriters' Representative or Agent for such offering in the marketing of the Registrable Securities. 4.6. Promptly notify the Holder of any stop order issued or threatened to be issued by the Commission in connection therewith and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered. 4.7. Make available for inspection by the Holder, any underwriter participating in such offering and the representatives of the Holder and Underwriter all financial and other information as shall be reasonably requested by them, and provide the Holder, any underwriter participating in such offering and the representatives of the Holder and such Underwriter the reasonable opportunity to discuss the business affairs of the Company with its principal executives and independent public accountants who have certified the audited financial statements included in such registration statement, in each case all as necessary to enable them to exercise their due diligence responsibility under the Securities Act; provided, however, that information that the Company determines, in good faith, to be confidential and which the Company advises such Person in writing, is confidential shall not be disclosed unless such Person signs a confidentiality agreement reasonably satisfactory to the Company or the Holder of Registrable Securities agrees to be responsible for such Person's breach of confidentiality on terms reasonably satisfactory to the Company. 4.8. Use the Company's reasonable efforts to obtain a so-called "comfort letter" from its independent public accountants, and legal opinions of counsel to the Company addressed to the Holder, in customary form and covering such matters of the type customarily covered by such letters, and in a form that shall be reasonably satisfactory to the Holder. The Company shall furnish to the Holder a signed counterpart of any such comfort letter or legal opinion. Delivery of any such opinion or comfort letter shall be subject to the recipient furnishing such written representations or acknowledgements as are customarily provided by selling shareholders who receive such comfort letters or opinions. 4.9. Provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such registration statement from and after a date not later than the effective date of such registration statement. 4.10. Use reasonable efforts to cause the Registrable Securities covered by such registration statement (i) if the Class B Stock is then listed on a securities exchange or included for quotation in a recognized trading market, to continue to be so listed or -8- 10 included for a reasonable period of time after the offering, and (ii) to be registered with or approved by such other United States or state governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Holder to consummate the disposition of the Registrable Securities which are included in such registration. 4.11. Take such other actions as are reasonably required in order to expedite or facilitate the disposition of Registrable Securities included in such registration Section 5. Holder's Obligations. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement with respect to the Registrable Securities which are included in such registration that the Holder shall: 5.1. Furnish to the Company such information regarding the Holder, the number of the Registrable Securities owned by it, and the intended method of disposition of such Registrable Securities as shall be required to effect the registration of the Holder's Registrable Securities, and to cooperate with the Company in preparing such registration. Section 6. Expenses of Registration. Expenses in connection with registrations pursuant to this Agreement shall be allocated and paid as follows: 6.1. With respect to each Demand Registration (except as otherwise provided in Sections 9.1.5, 9.1.6 and 9.1.7 of the Investment Agreement), the Company shall bear and pay all expenses incurred in connection with any registration, filing, or qualification of Registrable Securities with respect to such Demand Registrations, including all registration, filing and National Association of Securities Dealers, Inc. fees, all fees and expenses of complying with securities or blue sky laws, all word processing, duplicating and printing expenses, messenger and delivery expenses, and the reasonable fees and disbursements of counsel for the Company, and of the Company's independent public accountants, including the expenses of "cold comfort" letters required by or incident to such performance and compliance (the "Registration Expenses"), but excluding underwriting discounts and commissions relating to Registrable Securities or fees and expenses of Holder's counsel (which shall be paid by the Holder) provided, however, that the Company shall not be required to pay for any expenses of any registration begun pursuant to Section 2 if the registration is subsequently withdrawn at the request of the Holder (in which case the Holder shall bear such expense), unless the Holder agrees that such withdrawn registration shall constitute one of the demand registrations under Section 2 hereof. 6.2. The Company shall bear and pay all Registration Expenses incurred in connection with any Piggyback Registrations pursuant to Section 3 for the Holder, but excluding, except as otherwise provided in Sections 9.1.5, 9.1.6 and 9.1.7 of the Investment Agreement, underwriting discounts and commissions relating to Registrable Securities or fees and expenses of the Holder's counsel (each of which shall be paid by the Holder). -9- 11 6.3. Any failure of the Company to pay any Registration Expenses as required by this Section 6 shall not relieve the Company of its obligations under this Agreement. Section 7. Indemnification; Contribution. If any Registrable Securities are included in a registration statement under this Agreement: 7.1. To the extent permitted by applicable law, the Company shall indemnify and hold harmless the Holder, each Person, if any, who controls such Holder within the meaning of the Securities Act, and each officer, director, partner, and employee of the Holder and such controlling Person, against any and all losses, claims, damages, liabilities and expenses (joint or several), including reasonable attorneys' fees and disbursements and expenses of investigation, incurred by such party pursuant to any actual or threatened action, suit, proceeding or investigation, or to which any of the foregoing Persons may become subject under the Securities Act, the Exchange Act or other federal or state laws, insofar as such losses, claims, damages, liabilities and expenses arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"): (i) Any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein, or any amendments or supplements thereto; (ii) The omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) Any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any applicable state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any applicable state securities law; provided, however, that the indemnification required by this Section 7.1 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or expense if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or expense to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished to the Company by the indemnified party expressly for use in connection with such registration; provided, further, that the indemnity agreement contained in this Section 7 shall not apply to any underwriter to the extent that any such loss is based on or arises out of an untrue statement or alleged untrue statement of a material fact, or an omission or alleged omission to state a material fact, contained in or omitted from any preliminary prospectus if the final prospectus shall correct such untrue statement or alleged untrue statement, or such omission or alleged omission, and a copy of the final prospectus has not been sent or given to such person at or prior to the confirmation of sale to such person if such -10- 12 underwriter was under an obligation to deliver such final prospectus and failed to do so. The Company shall also indemnify underwriters and selling or placement agents participating in the distribution, their officers, directors, agents and employees and each person who controls such persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same extent as provided above with respect to the indemnification of the Holder provided, however that no such underwriter or agent shall be entitled to indemnification under this Agreement if such person shall have entered into a separate underwriting agency or indemnification agreement with the Company. 7.2. To the extent permitted by applicable law, the Holder shall indemnify and hold harmless the Company, each of its directors, each of its officers who shall have signed the registration statement, each Person, if any, who controls the Company within the meaning of the Securities Act, and each officer, director, partner, and employee of the Company and such controlling Person, against any and all losses, claims, damages, liabilities and expenses (joint and several), including attorneys' fees and disbursements and expenses of investigation, incurred by such party pursuant to any actual or threatened action, suit, proceeding or investigation, or to which any of the foregoing may otherwise become subject under the Securities Act, the Exchange Act or other federal or state laws, insofar as such losses, claims, damages, liabilities and expenses arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by the Holder expressly for use in connection with such registration; provided, however, that the indemnification required by this Section 7.2 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or expense if settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld. 7.3. Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, suit, proceeding, investigation or threat thereof made in writing for which such indemnified party may make a claim under this Section 7, such indemnified party shall deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; subject to the rights of an indemnified party to retain its own counsel as hereinafter provided. The failure to deliver written notice to the indemnifying party within a reasonable time following the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 7 but shall not relieve the indemnifying party of any liability that it may have to any indemnified party otherwise than pursuant to this Section 7. Any fees and expenses incurred by the indemnified party (including any fees and expenses incurred in connection with investigating or preparing to defend such action or proceeding) owed by the indemnifying party hereunder shall be paid to the indemnified party, as incurred, within thirty (30) days of written notice thereof to the indemnifying party (subject to refund if it is ultimately determined that an indemnified party is not entitled to indemnification hereunder). Any such indemnified party shall have the right to employ separate counsel in any such action, claim or proceeding and to participate in the defense -11- 13 thereof, but the fees and expenses of such counsel shall be the expenses of such indemnified party unless (i) the indemnifying party has agreed to pay such fees and expenses or (ii) the indemnifying party shall have failed to promptly assume the defense of such action, claim or proceeding or (iii) the named parties to any such action, claim or proceeding (including any impleaded parties) include both such indemnified party and the indemnifying party, and such indemnified party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or in addition to those available to the indemnifying party and that the assertion of such defenses would create a conflict of interest such that counsel employed by the indemnifying party could not faithfully represent the indemnified party (in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such action, claim or proceeding on behalf of such indemnified party, it being understood, however, that the indemnifying party shall not, in connection with any one such action, claim or proceeding or separate but substantially similar or related actions, claims or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for all such indemnified parties, unless in the reasonable judgment of such indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such action, claim or proceeding, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels). 7.4. If the indemnification required by this Section 7 from the indemnifying party is unavailable to an indemnified party hereunder in respect of any losses, claims, damages, liabilities or expenses referred to in this Section 7: (i) The indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any Violation has been committed by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such Violation. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 7.1 and Section 7.2, any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. (ii) The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7.4 were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in Section 7.4(i). No Person guilty of fraudulent -12- 14 misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 7.5. If indemnification is available under this Section 7, the indemnifying parties shall indemnify each indemnified party to the full extent provided in this Section 7 without regard to the relative fault of such indemnifying party or indemnified party or any other equitable consideration referred to in Section 7.4. 7.6. The obligations of the Company and the Holder under this Section 7 shall survive the completion of any offering of Registrable Securities pursuant to a registration statement under this Agreement, and otherwise. Section 8. Holdback. If so requested by the Underwriters' Representative or Agent in connection with an offering of any securities covered by a registration statement filed by the Company, whether or not Holder's securities are included therein, the Holder shall agree not to effect any sale or distribution of shares of Class B Stock or any securities convertible into or exchangeable or exercisable for shares of Class B Stock, including a sale pursuant to Rule 144 under the Securities Act (except as part of such underwritten or agented registration), during the 30-day period prior to, and during the 150-day period beginning on, the date such registration statement is declared effective under the Securities Act by the Commission, provided that the Holder is timely notified of such effective date in writing by the Company or such Underwriters' Representative or Agent. In order to enforce the foregoing covenant, the Company shall be entitled to impose stop-transfer instructions with respect to the Registrable Securities of the Holder until the end of such period. Section 9. Amendment, Modification and Waivers; Further Assurances. (i) This Agreement may be amended with the consent of the Company and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent of the Holder to such amendment, action or omission to act. (ii) No waiver of any terms or conditions of this Agreement shall operate as a waiver of any other breach of such terms and conditions or any other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. No written waiver hereunder, unless it by its own terms explicitly provides to the contrary, shall be construed to effect a continuing waiver of the provisions being waived and no such waiver in any instance shall constitute a waiver in any other instance or for any other purpose or impair the right of the party against whom such waiver is claimed in all other instances or for all other purposes to require full compliance with such provision. -13- 15 (iii) Each of the parties hereto shall execute all such further instruments and documents and take all such further action as any other party hereto may reasonably require in order to effectuate the terms and purposes of this Agreement. Section 10. Assignment; Benefit. This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated by the Holder to any Person except a wholly owned direct or indirect subsidiary of the Holder to whom the Holder shall have transferred all of the Registrable Securities then owned by the Holder as permitted by, and subject to the terms of, Sections 9.1.1 or 9.1.2 of the Investment Agreement. Section 11. Miscellaneous. 11.1. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. 11.2. Notices. All notices and requests given pursuant to this Agreement shall be in writing and shall be made by hand-delivery, first-class mail (registered or certified, return receipt requested), confirmed facsimile or overnight air courier guaranteeing next business day delivery to the relevant address specified below: If to Investor, to: Monsanto Company 800 N. Lindbergh Boulevard St. Louis, Missouri 63167 Attention: Chief Financial Officer Fax: 314-694-3001 -14- 16 with a copy to: General Counsel and Secretary Fax: 314-694-3001 If to Company, to: DEKALB Genetics Corporation 3100 Sycamore Road Dekalb, IL 60115 Attention: Senior Vice President and General Counsel Fax: 815-758-6953 with a copy to: James G. Archer c/o Sidley & Austin 875 Third Avenue New York, NY 10022 Fax: 212-906-2021 -15- 17 Except as otherwise provided in this Agreement, the date of each such notice and request shall be deemed to be, and the date on which each such notice and request shall be deemed given shall be: at the time delivered, if personally delivered or mailed; when receipt is acknowledged, if sent by facsimile; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next business day delivery. 11.3. Entire Agreement; Integration. This Agreement supersedes all prior agreements between or among any of the parties hereto with respect to the subject matter contained herein and therein, and such agreements embody the entire understanding among the parties relating to such subject matter. 11.4. Injunctive Relief. Each of the parties hereto acknowledges that in the event of a breach by any of them of any material provision of this Agreement, the aggrieved party may be without an adequate remedy at law. Each of the parties therefore agrees that in the event of such a breach hereof the aggrieved party may elect to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach hereof. By seeking or obtaining any such relief, the aggrieved party shall not be precluded from seeking or obtaining any other relief to which it may be entitled. 11.5. Section Headings. Section headings are for convenience of reference only and shall not affect the meaning of any provision of this Agreement. 11.6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which shall together constitute one and the same instrument. All signatures need not be on the same counterpart. 11.7. Severability. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity and enforceability of the remaining provisions of this Agreement, unless the result thereof would be unreasonable, in which case the parties hereto shall negotiate in good faith as to appropriate amendments hereto. 11.8. Filing. A copy of this Agreement and of all amendments thereto shall be filed at the principal executive office of the Company with the corporate records of the Company. 11.9. Termination. If for any reason the Closing does not occur and the Investment Agreement shall be terminated, this Agreement shall terminate and be of no further force and effect. This Agreement may be terminated at any time by a written instrument signed by the parties hereto. Unless sooner terminated in accordance with the preceding sentences, this Agreement (other than Section 7 hereof) shall terminate in its entirety on such date as there shall be no Registrable Securities outstanding, provided that any shares of Class B Stock previously subject to this Agreement shall not be Registrable Securities following the sale of any such shares in an offering registered pursuant to this Agreement. -16- 18 11.10. Attorneys' Fees. In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorneys' fees (including any fees incurred in any appeal) in addition to its costs and expenses and any other available remedy. 11.11. No Third Party Beneficiaries. Nothing herein expressed or implied is intended to confer upon any person, other than the parties hereto or their respective permitted assigns, successors, heirs and legal representatives, any rights, remedies, obligations or liabilities under or by reason of this Agreement. IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first written above. MONSANTO COMPANY By: Robert T. Fraley ------------------------- Robert T. Fraley President, Ceregen DEKALB GENETICS CORPORATION By: Bruce P. Bickner ------------------------- Bruce P. Bickner Chairman and CEO -17- EX-99.C.4 14 COLLABORATION AGREEMENT 1 CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. EACH SUCH OMISSION IS DESIGNATED [***]. COLLABORATION AGREEMENT AND LICENSE This Agreement (the "Agreement") is entered into on this 31st day of January, 1996 by and between Monsanto Company, and DEKALB Genetics Corporation. SECTION 1 - BACKGROUND AND PARTIES 1.01 Monsanto Company ("MONSANTO") is a corporation of the State of Delaware with principal offices at 800 N. Lindbergh Boulevard, St. Louis, Missouri 63167. 1.02 DEKALB Genetics Corporation ("DEKALB") is a corporation of the State of Delaware with principal offices at 3100 Sycamore Road, DeKalb, Illinois 60115. 1.03 MONSANTO has certain rights relating to genetic element(s), germplasm, plasmid(s), and gene(s), including knowledge, know-how, technical information, and expertise, relating to and useful in agricultural biotechnology and plant genetics directed to the development of plants having desirable characteristics, such as but not limited to resistance to disease, damage by pests, and damage by chemical agents, and to other crop improvements, such as but not limited to increased crop yield and increased concentration in the crop of a desired component, and has rights in and to patents and/or patent applications covering the genetic element(s), germplasm, plasmid(s), and gene(s) and other aspects of agricultural biotechnology and plant genetics. 1.04 DEKALB has certain rights relating to genetic element(s), germplasm, plasmid(s), and gene(s), including knowledge, know-how, technical information, and expertise, relating to and useful in agricultural biotechnology and plant genetics directed to the development of plants having desirable characteristics, such as but not limited to resistance to disease, damage by pests, and damage by chemical agents, and to other crop improvements, such as but not limited to increased crop yield and increased concentration in the crop of a desired component, and has rights in and to patents and/or patent applications covering the genetic element(s), germplasm, plasmid(s), and gene(s) and other aspects of agricultural biotechnology and plant genetics. 1.05 The parties are interested in the development and commercialization of plants having such characteristics. Each party therefore is interested in obtaining a limited license under the other party's property rights, and desires to grant such a license to the other, all upon the terms and conditions provided herein. 1.06 The parties agree that significant mutual benefits may be realized by making available to each other and to third parties such improvements in agricultural 2 biotechnology and plant genetics as may result from such research and development and other activities. The parties agree to make such improvements available to each other and to third parties in accordance with terms of licenses each agrees to grant to the other and to third parties, all upon the terms and conditions provided herein. 1.07 The parties have previously reached an understanding regarding [***] and commercialization of [***] shall not be governed by this Agreement. The parties have entered into a Corn Borer-Protected Corn License Agreement, a Glyphosate Protected Corn License Agreement, and a CaMV Promoter License Agreement, each of even date herewith. The parties agree that these aforementioned documents are controlling with regard to the subject matters addressed therein. 1.08 The parties agree that the Outline for Collaboration Effort attached hereto as Appendix A embodies and exemplifies the intent of the parties in entering into this Agreement. SECTION 2-DEFINITIONS For purposes of this Agreement, the following words and phrases shall have the following meanings: 2.01 The term "Affiliate(s)," as used herein, means with respect to an entity, any person that is at least fifty percent (50%) owned by, or, directly or indirectly, is controlled by, under common control with or in control of, that entity. The term "control" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an entity whether through the ownership of securities, by contract or otherwise. 2.02 The term "Beneficial Characteristic," as used herein, means a characteristic, such as but not limited to resistance to disease, damage by pests, and damage by chemical agents, and to other crop improvements, such as but not limited to increased crop yield and increased concentration in the crop of a desired component, resulting from a Project. 2.03 The term "Biological Material," as used herein, means material including, but not limited to, cells, plants, seeds, genes (including native corn genes and associated markers), genetic elements, and plasmids. -2- 3 2.04 The term "Business Associate," as used herein, is a third party with which a party to this Agreement has an extensive business relationship that contemplates terms and conditions of dealings that would not otherwise be obtained from or granted to a third party, or a technical relationship, such as but not limited to a relationship that contemplates sharing technical data and information that would otherwise not be shared with a third party. The Business Associates of DEKALB and MONSANTO include, but are not limited to, those listed in Exhibits A-1 and B-1, respectively. A third party shall not be considered to be a Business Associate solely on the basis of the granting of a license pursuant to this Agreement. 2.05 The term "Collaborative Effort," as used herein, means a Project which the parties mutually agree in writing shall be called a Collaborative Effort, for which the parties shall designate a Lead Collaborator, and for which the parties shall designate a party in which the legal title to the intellectual property rights shall vest. 2.06 The term "Commercialize a Product," as used herein, means to make a Product available for commercial purposes to a third party customer or licensee. 2.07 The term "Confidential Information," as used herein, means any proprietary information, including technical, economic, financial or marketing information, which either party considers confidential and which is disclosed to the other party. 2.08 The term "DEKALB's Crops," as used herein, means corn, [***]. 2.09 The term "MONSANTO's Crops," as used herein, means [***]. 2.10 The term "Effective Date" is defined in Subsection 8.01 of this Agreement. 2.11 The term "Existing Project," as used herein, means a Project for which substantive progress toward an actual reduction to practice has occurred before the Effective Date of this Agreement, and which is known or reasonably expected to result in a Beneficial Characteristic. 2.12 The term "Field," as used herein, means agricultural biotechnology. -3- 4 2.13 The term "Fiscal Year" shall mean a twelve-month period ending August 31st. 2.14 The term "Independent Effort," as used herein, means a Project that is not a Collaborative Effort. A Project shall be presumed to be an Independent Effort, unless it has been mutually agreed to be characterized as a Collaborative Effort. 2.15 The term "International Associate," as used herein, means any foreign-based person that has been licensed by DEKALB or MONSANTO to sell or otherwise distribute DEKALB- or MONSANTO- branded products. The International Associates of DEKALB and MONSANTO include, but are not limited to, those listed in Exhibit A-2 and B-2, respectively. A third party shall not be considered to be an International Associate solely on the basis of the granting of a license pursuant to this Agreement. 2.16 The term "Know-How," as used herein, means any knowledge and proprietary information disclosed to a party by the other party prior to or during the term of this Agreement which is not generally publicly known, including, without limitation, all chemical, biochemical, toxicological, manufacturing, formulation, molecular and plant pathology, and scientific research information, whether or not capable of precise separate description but which alone or when accumulated gives to the one acquiring it an ability to develop and commercialize a product through study, testing, production, formulation or marketing which that party would otherwise not have been able to develop and commercialize in the same manner. 2.17 The term "DEKALB Know-How," as used herein, means any Know-How disclosed to MONSANTO by DEKALB. 2.18 The term "MONSANTO Know-How," as used herein, means any Know-How disclosed to DEKALB by MONSANTO. 2.19 The term "Lead Collaborator," as used herein, means, for a Collaborative Effort, (a) MONSANTO, if the Product resulting from the Collaborative Effort relates to a DEKALB Crop; (b) DEKALB, if the Product resulting from the Collaborative Effort relates to a MONSANTO Crop; or (c) notwithstanding Subsections 2.19(a) and 2.19(b), the party which the parties mutually agree in writing shall be designated as the Lead Collaborator. 2.20 The term "Licensed MONSANTO Method" shall mean any method the -4- 5 use or practice of which would, in the absence of a license, infringe one or more Valid MONSANTO Claims of an unexpired patent included in the Licensed MONSANTO Patent Rights or which involves the use of MONSANTO Know-How or Licensed MONSANTO Non-Patent Proprietary Materials. 2.21 The term "Licensed DEKALB Method" shall mean any method the use or practice of which would, in the absence of a license, infringe one or more Valid DEKALB Claims of an unexpired patent included in the Licensed DEKALB Patent Rights or which involves the use of DEKALB Know-How or Licensed DEKALB Non-Patent Proprietary Materials. 2.22 The term "Licensed MONSANTO Non-Patent Proprietary Materials," as used herein, means Biological Material in which MONSANTO has a Proprietary Interest. 2.23 The term "Licensed DEKALB Non-Patent Proprietary Materials," as used herein, means Biological Material in which DEKALB has a Proprietary Interest. 2.24 The term "Licensed MONSANTO Patent Rights," shall mean all patent licenses and sublicenses for use in the Field to which MONSANTO and/or a wholly-owned Affiliate of MONSANTO is a licensee or sublicensee (to the extent allowed by such licenses or sublicenses) and all patents and patent applications for use in the Field and owned by MONSANTO and/or a wholly-owned Affiliate of MONSANTO, filed prior to or during the term of this Agreement, and any and all patents maturing from these applications or maturing from applications that are divisionals, continuations or continuations-in-part of these applications, foreign (i.e., ex-U.S.) equivalents of the foregoing and any and all reissues or extensions of any of the foregoing. 2.25 The term "Licensed DEKALB Patent Rights," shall mean all patent licenses and sublicenses for use in the Field to which DEKALB and/or a wholly-owned Affiliate of DEKALB is a licensee or sublicensee (to the extent allowed by such licenses or sublicenses) and all patents and patent applications for use in the Field and owned by DEKALB and/or a wholly-owned Affiliate of DEKALB, filed prior to or during the term of this Agreement, and any and all patents maturing from these applications or maturing from applications that are divisionals, continuations or continuations-in-part of these applications, foreign (i.e., ex-U.S.) equivalents of the foregoing and any and all reissues or extensions of any of the foregoing. 2.26 The term "Licensed DEKALB Product(s)" shall mean material including, but not limited to, cells, plants, or seeds and products thereof, which is produced -5- 6 by a Licensed MONSANTO Method or which, in the course of its manufacture, use, or sale would, in the absence of a license, infringe a Valid MONSANTO Claim or the production of which involves the use of MONSANTO Know-How or Licensed MONSANTO Non-Patent Proprietary Materials. 2.27 The term "Licensed MONSANTO Product(s)" shall mean material including, but not limited to, cells, plants, or seeds and products thereof, which is produced by a Licensed DEKALB Method or which, in the course of its manufacture, use, or sale would, in the absence of a license, infringe a Valid DEKALB Claim or the production of which involves the use of DEKALB Know-How or Licensed DEKALB Non-Patent Proprietary Materials. 2.28 The term "Most Favored Licensee," as used herein, means the third party licensee which enjoys the most favorable terms considered as a whole. Terms to be considered in evaluating the license include, but are not limited to, access time, royalty rate and other terms, and whether such license imposes one or more substantial obligations imposed under this Agreement. 2.29 The term "Product," as used herein, means Biological Material resulting from a Project intended to enable production of a crop having a Beneficial Characteristic. 2.30 The term "Project," as used herein, means any research or development effort in the Field. 2.31 The term "Proprietary Interest," as used herein, means an ownership interest in tangible property. 2.32 The term "Seed Company," as used herein, means an entity, other than DEKALB and MONSANTO, whose primary business with respect to Product is the selling of Product directly to growers. 2.33 The term "Rights," as used herein, means every intellectual property right or tangible object in which such a right may reside, such as but not limited to patent, know-how, trade secret, or Biological Material, resulting from a Collaborative Effort or an Independent Effort. 2.34 The term "MONSANTO Rights," as used herein, means Rights owned -6- 7 by MONSANTO. 2.35 The term "DEKALB Rights," as used herein, means Rights owned by DEKALB. 2.36 The term "Territory," as used herein, means the world. 2.37 The term "Valid DEKALB Claim," as used herein, means an issued claim included within the Licensed DEKALB Patent Rights which has not been finally held invalid or unenforceable by a decision of a court or other authority of competent jurisdiction which is not appealable, or with respect to a pending claim of the Licensed DEKALB Patent Rights which arise from a Collaborative Effort, has not been irrevocably abandoned or finally held to be unpatentable by a court or other authority of competent jurisdiction in a proceeding which is not appealable. For purposes of this Agreement, the filing of a continuation application in response to a final rejection, in place of filing an appeal of such final rejection, shall not be considered as an action that shall cause any such finally-rejected claim to be considered invalid. 2.38 The term "Valid MONSANTO Claim," as used herein, means an issued claim included within the Licensed MONSANTO Patent Rights which has not been finally held invalid or unenforceable by a decision of a court or other authority of competent jurisdiction which is not appealable, or, with respect to a pending claim of the Licensed MONSANTO Patent Rights which arise from a Collaborative Effort, has not been irrevocably abandoned or finally held to be unpatentable by a court or other authority of competent jurisdiction in a proceeding which is not appealable. For purposes of this Agreement, the filing of a continuation application in response to a final rejection, in place of filing an appeal of such final rejection, shall not be considered as an action that shall cause any such finally-rejected claim to be considered invalid. 2.39 The term "Value," as used herein, means remuneration of any form received or expected to be received in payment for a license including Rights, or a sublicense within the scope of such a license, without regard to which party granted the license. 2.40 The term "-branded," when used in conjunction with an entity's name, means a trademark or logo of that entity, whether registered or not, affixed to a product or product container, or used in advertising, promotion, or other marketing of such a product. 2.41 The term "person," as used herein, shall mean an individual, -7- 8 corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. SECTION 3 - CONVEYANCE OF RIGHTS 3.01 LICENSE GRANT BY MONSANTO: Subject to the terms and conditions of this Agreement, MONSANTO hereby grants to DEKALB and its wholly - -owned Affiliate(s) a royalty-free, non-exclusive, license to use the Licensed MONSANTO Patent Rights, Licensed MONSANTO Non-patent Proprietary Materials, MONSANTO Know-How, and MONSANTO Rights for research and development in the Field in the Territory. 3.02 LICENSE GRANT BY DEKALB: Subject to the terms and conditions of this Agreement, DEKALB hereby grants to MONSANTO and its wholly - -owned Affiliate(s) a royalty-free, non-exclusive, license to use the Licensed DEKALB Patent Rights, Licensed DEKALB Non-patent Proprietary Materials, DEKALB Know-How, and DEKALB Rights for research and development in the Field in the Territory. 3.03 DISCLOSURE OF PATENT RIGHTS: MONSANTO and DEKALB shall have the obligation of disclosing to the other [***] Upon written request, MONSANTO and DEKALB shall provide the other with additional information concerning [***]. SECTION 4 - AGREEMENT TO GRANT LICENSE 4.01 DISTINCTIONS BETWEEN PRODUCTS: The parties agree that the terms of any royalty-bearing license granted by one party to the other hereunder and any remuneration received when a party Commercializes a Product shall be related to the type of Product commercialized, i.e., whether the Product resulted from an Independent Effort or a Collaborative Effort. The parties further agree that, for each such Commercialized Product, if any, the parties shall enter into a license agreement having terms and conditions in accordance with this Agreement. 4.02 RIGHT TO COMMERCIALIZE A PRODUCT THAT RESULTED FROM AN INDEPENDENT EFFORT: (a) Subject to the terms and conditions of this Agreement, DEKALB grants to MONSANTO the right to Commercialize a Product that results from an Independent Effort of DEKALB for MONSANTO's Crops in accordance with Subsection 4.08 for the -8- 9 benefit of MONSANTO and MONSANTO's Affiliates, Business Associates, and International Associates. [***] (b) Subject to the terms and conditions of this Agreement, MONSANTO grants to DEKALB the right to Commercialize a Product that results from an Independent Effort of MONSANTO for DEKALB's Crops in accordance with Subsection 4.04 for the benefit of DEKALB and DEKALB's Affiliates, Business Associates, and International Associates. [***] 4.03 RIGHTS OF LEAD COLLABORATOR: Subject to Subsection 5.02 and notwithstanding 4.05, the Lead Collaborator shall have the right to sublicense the Product of a Collaborative Effort to Seed Companies. The party that is not the Lead Collaborator shall grant to the Lead Collaborator such Rights as are necessary to Commercialize the Product. 4.04 AGREEMENT TO GRANT LICENSE BY MONSANTO: Subject to the terms and conditions of this Agreement, including but not limited to Subsections 4.03 and 5.02, MONSANTO hereby agrees to grant to DEKALB a royalty-bearing, non-exclusive, license limited to DEKALB Crops under the Licensed MONSANTO Patent Rights, Licensed MONSANTO Non-patent Proprietary Materials, MONSANTO Know-How, and MONSANTO Rights, (1) to make, have made, use and sell Licensed DEKALB Products in the Field in the Territory, and (2) to sublicense Affiliates, Business Associates, and International Associates to make, have made, use, and sell Licensed DEKALB Products within the scope of the license. No sublicensee hereunder shall have the right to further sublicense any rights hereunder. 4.05 DISTRIBUTION OF LICENSED PRODUCTS: With respect to the sales of Licensed DEKALB Products hereunder in countries of the Territory, DEKALB and its Affiliates, Business Associates, and International Associates shall only be permitted to sell and distribute DEKALB-branded Licensed DEKALB Products; [***]. With respect to the sales of Licensed MONSANTO Products hereunder in countries of the Territory, MONSANTO and its Affiliates, Business Associates and International Associates shall only be permitted to sell and distribute MONSANTO-branded, MONSANTO Affiliate- -9- 10 branded, MONSANTO Business Associate-branded, or MONSANTO International Associate-branded Licensed MONSANTO Products. 4.06 MARKING OF LICENSED DEKALB PRODUCTS: (a) DEKALB and its Affiliates, Business Associates, International Associates and sublicensees shall conspicuously display on all packages containing Licensed DEKALB Products to be sold or transferred to permitted third-party growers or customers, the following notice (tailored to reflect the nature of the conveyance), or a notice having the same meaning and effect, with the blanks appropriately filled in to the extent such notice is applicable in the respective area: THE (PURCHASE/BAILMENT/TRANSFER) OF THESE SEEDS INCLUDES A LIMITED LICENSE UNDER PATENT(S)__________ TO PRODUCE A SINGLE CROP IN THE UNITED STATES (or other applicable country). THIS LICENSE DOES NOT EXTEND TO ANY USE OTHER THAN PRODUCTION OF A SINGLE CROP. (b) Where transactions occur in countries whose primary language is not English, a translation of the notice in the appropriate language shall be used if appropriate or required by law. 4.07 TRADEMARK USAGE: The parties will agree at the time royalty-bearing licenses are granted under this Agreement which of the possible trademarks of either party will be utilized on a Licensed DEKALB Product and on a Licensed MONSANTO Product. 4.08 AGREEMENT TO GRANT LICENSE BY DEKALB: Subject to the terms and conditions of this Agreement, including but not limited to Subsections 4.03 and 5.02, DEKALB hereby agrees to grant to MONSANTO a royalty-bearing, non-exclusive, license limited to MONSANTO Crops, under the Licensed DEKALB Patent Rights, Licensed DEKALB Non-patent Proprietary Materials, DEKALB Know-How, and DEKALB Rights, (1) to make, have made, use and sell Licensed MONSANTO Products in the Field in the Territory, and (2) to sublicense Affiliates, Business Associates, and International Associates to make, have made, use and sell Licensed MONSANTO Products within the scope of the license. No sublicensee hereunder shall have the right to further sublicense any rights hereunder. 4.09 SUBCONTRACT RIGHTS: The rights granted to MONSANTO pursuant to Subsections 4.03 and 4.08 to have Licensed MONSANTO Products made by third parties -10- 11 shall not extend to the making of new transgenic germplasm without the prior written approval of DEKALB which approval shall not be unreasonably withheld. 4.10 MARKING OF LICENSED MONSANTO PRODUCTS: (a) MONSANTO and its Affiliates, Business Associates, International Associates and sublicensees shall conspicuously display on all packages containing Licensed MONSANTO Products to be sold or transferred to permitted third-party growers or customers, the following notice (tailored to reflect the nature of the conveyance), or a notice having the same meaning and effect, with the blanks appropriately filled in to the extent such notice is applicable in the respective area: THE (PURCHASE/BAILMENT/TRANSFER) OF THESE SEEDS INCLUDES A LIMITED LICENSE UNDER PATENT(S)__________ TO PRODUCE A SINGLE CROP IN THE UNITED STATES (or other applicable country). THIS LICENSE DOES NOT EXTEND TO ANY USE OTHER THAN PRODUCTION OF A SINGLE CROP. (b) Where transactions occur in countries whose primary language is not English, a translation of the notice in the appropriate language shall be used if appropriate or required by law. 4.11 NO GRANTS REGARDING PROPRIETARY GERMPLASM: Notwithstanding anything in this Agreement to the contrary, no rights in proprietary varieties, inbreds or hybrids of either party are granted the other under this Agreement. 4.12 COMMERCIALIZATION WITH GROWER AGREEMENT. MONSANTO and DEKALB shall meet and discuss whether it is in their mutual interest to commercialize the Licensed MONSANTO Products and Licensed DEKALB Products by directly licensing or sublicensing the grower to use such Products. SECTION 5 - PAYMENTS, REPORTS AND RECORD RETENTION 5.01 LICENSES INCLUDING RIGHTS RESULTING FROM INDEPENDENT EFFORTS: (a) If there exists a Most Favored Licensee having a license of the same scope as a license to be granted a party to this Agreement, which license includes Rights resulting from an Independent Effort, the party seeking a license shall pay consideration and shall agree to such other terms as are enjoyed by the Most Favored Licensee. (b) If there is no Most Favored Licensee having a license of the same -11- 12 scope as a license to be granted a party to this Agreement, which license includes Rights resulting from an Independent Effort, a party seeking to grant a license shall establish a good faith estimate of the rate that would be granted to a third party in an identical license having terms and conditions reasonable and customary in the subject area and resulting from arm's length negotiation. The licensing party may establish such an estimate by obtaining agreements from third parties to license or in any manner, including good faith negotiations between the parties. The party seeking the license may pay consideration and agree to such other terms as in the good faith estimate or otherwise established, including by good faith negotiations. (c) If despite good faith negotiations, the parties can not reach agreement on the terms of such license under this Subsection 5.01, then determination of the reasonable terms, including royalty, shall be submitted to arbitration pursuant to the provisions of Subsection 12.15, if requested by either party. (d) In consideration for the grant of the license in Section 3 and the agreement to grant licenses in Section 4, [***]. 5.02 LICENSES INCLUDING RIGHTS RESULTING FROM A COLLABORATIVE EFFORT: (a) The parties agree that the Value received with regard to a Collaborative Effort shall be shared, [***], by the parties. The parties further agree as follows: (i) The parties may mutually agree, on a case-by-case basis, that one of them may receive [***] of the Value, with the other party taking the remainder. (ii) If the Collaborative Effort also is an Existing Project of only one party, the parties may mutually agree, on a case-by-case basis, that the party whose Existing Project is involved may receive [***] of the Value, with the other party taking the remainder. (b) The parties agree that the Lead Collaborator shall negotiate with third parties regarding terms of a license of appropriate scope and including Rights. The parties further agree that royalties received from that license shall be shared with the other party in accordance with Subsection 5.02(a). (c) Subsection 5.02 (a) and (b) above notwithstanding, in the case of crops that are not both a DEKALB Crop and a MONSANTO Crop, a party as to its Crops may offer to the other party other terms regarding remuneration for preferred status regarding a Right resulting from a Collaborative Effort. The party whose Crops are not involved shall provide the other party the opportunity to propose remuneration under this Subsection 5.02(c) -12- 13 [***] before providing a license to a third party. The party whose Crops are not involved, [***], may accept any remuneration on which the parties agree, [***]. However, if the parties are unable to agree on [***], then the Lead Collaborator [***] and the Value shall be established in accordance with Subsection 5.02(b) and shared in accordance with Subsection 5.02(a). (d) Subsection 5.02(a) and (b) notwithstanding, in the case of crops that are both a DEKALB Crop and a MONSANTO Crop, either party may offer to the other party terms regarding remuneration for preferred states regarding a Right resulting from a Collaborative Effort. The other party may accept any proposed remuneration on which the parties agree, [***]. However, if the parties are unable to agree on such [***], then the Lead Collaborator [***] at the value established in accordance with Subsection 5.02(b) and shared in accordance with Subsection 5.02(a). (e) If DEKALB has not obtained a preferred status under Subsection 5.02(c) or (d) as to a DEKALB Crop, or if MONSANTO has not obtained a preferred status under Subsection 5.02(c) or (d) as to a MONSANTO Crop, then DEKALB or MONSANTO, as applicable, shall [***] of Product resulting from a Collaborative Effort, which [***] shall be established in accordance with Subsection 5.02(b) and which payments shall become part of the Value shared in accordance with Subsection 5.02(a). (f) Legal title notwithstanding, to the extent an technology that is dominated by Rights arising from a Collaborative Effort, the value contributed by that Collaborative Effort to the Independent Effort shall be shared in the same manner in which the Value was agreed to be shared in the Collaborative Effort. 5.03 MOST FAVORED LICENSEE STATUS; MONSANTO LICENSES: (a) If MONSANTO subsequently grants a license under the Licensed MONSANTO Patent Rights to a third party having terms which considered as a whole are more favorable to the licensee than the terms considered as a whole granted to DEKALB as set forth in Subsections 5.01 and 5.02, then MONSANTO shall promptly advise DEKALB as to such more favorable terms. DEKALB shall, at its election, be entitled upon notice to MONSANTO to have its license amended to substitute such third party terms for the terms of its license as of the date upon which such license containing the more favorable terms shall have become effective; provided, however, that (i) DEKALB also agrees to have DEKALB's license amended to contain any additional obligations that are recited in such license containing the more favorable terms and (ii) to the extent there exists any non-cash consideration, including but not limited to a cross license, involved in the more favorable license, the monetary equivalent thereof shall be agreed by the parties for the purpose of -13- 14 evaluating the terms of the license. If despite good faith negotiations, the parties cannot reach agreement on the monetary equivalent, then determination of such equivalent shall be submitted to arbitration pursuant to the provisions of Subsection 12.15, if requested by either party. (b) In the event MONSANTO shall at any time while this Agreement is in effect be compelled by applicable law to issue licenses under the Licensed MONSANTO Patent Rights in the Field to any other person with terms considered as a whole more favorable than those granted to DEKALB hereunder, MONSANTO shall inform DEKALB of the order compelling any such licenses and shall offer the terms only with respect to the country or countries wherein such compulsory licenses have been ordered so that the new terms shall be no less favorable to DEKALB than those granted to any third party under any such compulsory license. (c) Nothing in this Subsection 5.03 shall entitle DEKALB to any retroactive adjustment, reduction in royalty, or other relief from any of the provisions of this Agreement merely because MONSANTO shall commence proceedings against a third party who has infringed the Licensed MONSANTO Patent Rights, which proceedings shall be resolved by the third party becoming licensed under the Licensed MONSANTO Patent Rights, so long as such subsequent license agreement shall, at least prospectively, impose upon such third party terms considered as a whole no more favorable than the terms considered as a whole imposed upon DEKALB under this Agreement as set forth in Subsections 5.01 and 5.02. 5.04 MOST FAVORED LICENSEE STATUS; DEKALB LICENSEES: (a) If DEKALB subsequently grants a license under the Licensed DEKALB Patent Rights to a third party having terms which considered as a whole are more favorable to the licensee than the terms considered as a whole granted to MONSANTO as set forth in Subsections 5.01 and 5.02, then DEKALB shall promptly advise MONSANTO as to such more favorable terms. MONSANTO shall, at its election, be entitled upon notice to DEKALB to have that license amended to substitute such third party terms for the terms of its license as of the date upon which such license containing the more favorable terms shall have become effective; provided, however, that (i) MONSANTO also agrees to have MONSANTO's license amended to contain any additional obligations that are recited in such license containing the more favorable terms and (ii) to the extent there exists any non-cash consideration, including but not limited to a cross-license, involved in the more favorable license, the monetary equivalent thereof shall be agreed by the parties for the purpose of evaluating the terms of the license. If despite good faith negotiations, the parties cannot reach agreement on the monetary equivalent, then determination of such equivalent shall be submitted to arbitration pursuant to the provisions of Subsection 12.15, if requested by either -14- 15 party. (b) In the event DEKALB shall at any time while this Agreement is in effect be compelled by applicable law to issue licenses under the Licensed DEKALB Patent Rights in the Field to any other person with terms considered as a whole more favorable than those granted to MONSANTO hereunder, DEKALB shall inform MONSANTO of the order compelling any such licenses and shall offer the terms only with respect to the country or countries wherein such compulsory licenses have been ordered so that the new terms shall be no less favorable to MONSANTO than those granted to any third party under any such compulsory license. (c) Nothing in this Subsection 5.04 shall entitle MONSANTO to any retroactive adjustment, reduction in royalty, or other relief from any of the provisions of this Agreement merely because DEKALB shall commence proceedings against a third party who has infringed the Licensed DEKALB Patent Rights, which proceedings shall be resolved by the third party becoming licensed under the Licensed MONSANTO Patent Rights, so long as such subsequent license agreement shall, at least prospectively, impose upon such third party terms considered as a whole no more favorable than the terms considered as a whole imposed upon MONSANTO under this Agreement as set forth in Subsection 5.01 and 5.02. 5.05 FIRST COMMERCIAL SALE IN A COUNTRY: (a) DEKALB shall promptly advise MONSANTO in writing of the first commercial sales of Licensed DEKALB Products by DEKALB and by each Affiliate, Business Associate, International Associate or sublicensee of DEKALB in each country of the Territory. (b) At the time such first commercial sale by an Affiliate, Business Associate, International Associate or sublicensee of DEKALB is reported pursuant to Subsection 5.05(a), DEKALB shall briefly describe the relationship between DEKALB and the subject Affiliate, Business Associate, International Associate or sublicensee which qualifies that entity as an Affiliate, Business Associate, International Associate or sublicensee respectively, of DEKALB. (c) MONSANTO shall promptly advise DEKALB in writing of the first commercial sales of Licensed MONSANTO Products by MONSANTO and by each Affiliate, Business Associate, International Associate or sublicensees of MONSANTO in each country of the Territory. (d) At the time such first commercial sale by an Affiliate, Business Associate, International Associate or sublicensee of MONSANTO is reported pursuant to Subsection 5.05(c), MONSANTO shall briefly describe the relationship between MONSANTO and the subject Affiliate, Business Associate, International Associate or sublicensee which qualifies that entity as an Affiliate, Business Associate, International -15- 16 Associate or sublicensee respectively, of MONSANTO. 5.06 SUBLICENSE; NOTIFICATION: (a) MONSANTO shall promptly advise DEKALB in writing of each sublicense of Licensed MONSANTO Products by MONSANTO. (b) DEKALB shall promptly advise MONSANTO in writing of each sublicense of Licensed DEKALB Products by DEKALB. 5.07 FEES: In addition to amounts otherwise owing hereunder, MONSANTO shall pay to DEKALB the amounts set forth in the following table on the date associated with each amount as compensation for the non-exclusive rights granted to MONSANTO by DEKALB hereunder: Date Amount Effective Date of this Agreement [***] First Anniversary of this Agreement [***] Second Anniversary of this Agreement [***] Third Anniversary of this Agreement [***] Fourth Anniversary of this Agreement [***] Fifth Anniversary of this Agreement [***] Sixth Anniversary of this Agreement [***] Seventh Anniversary of this Agreement [***] Eighth Anniversary of this Agreement [***] Ninth Anniversary of this Agreement [***] Notwithstanding the foregoing, if this Agreement is terminated for any reason with or without cause, except material uncured breach by DEKALB of this agreement, prior to the ninth anniversary hereof, MONSANTO shall [***] DEKALB [***] using a discount rate equal to that of U.S. Treasury securities of similar maturity. 5.08 PAYMENTS: Each payment to DEKALB hereunder shall be sent to: (i) DEKALB's account by wire transfer: -16- 17 [***] with a written notice of such wire transfer, or (ii) to another account in the United States which DEKALB may subsequently designate from time to time by notice to MONSANTO. 5.09 LATE PAYMENT: Notwithstanding any other remedy available under the provisions of this Agreement, if any sum of money owed hereunder is not paid when due, the unpaid amount shall bear interest compounded quarterly, at an annual rate of one (1) percentage point above the prime rate quoted by Morgan Guaranty Trust Company of New York on the day payment was due, until paid. SECTION 6 - REGULATORY APPROVAL AND PRODUCT REGISTRATION 6.01 REGULATORY APPROVALS: This Agreement does not obligate either party to undertake any regulatory approvals or product registrations. Each party shall bear its own cost of undertaking such approvals or registrations it seeks. 6.02 REQUEST FOR INFORMATION BY DEKALB: Subject to the provisions of Subsection 6.01, MONSANTO shall, at the reasonable request of DEKALB, provide assistance to DEKALB in seeking such regulatory approvals and/or product registrations, including data, studies and any applicable regulatory filings which MONSANTO may have in its possession; provided, however, that MONSANTO shall not be obligated to conduct any new experiments or other work with respect to any such request by DEKALB. 6.03 REQUEST FOR INFORMATION BY MONSANTO: Subject to the provisions of Subsection 6.01, DEKALB shall, at the reasonable request of MONSANTO, provide assistance to MONSANTO in seeking such regulatory approvals and/or product registrations, including data, studies and any applicable regulatory filings which DEKALB may have in its possession; provided, however, that DEKALB shall not be obligated to conduct any new experiments or other work with respect to any such request by MONSANTO. -17- 18 SECTION 7 - PATENT PROCUREMENT AND INFRINGEMENT 7.01 PATENT PROCUREMENT: MONSANTO shall have the exclusive right to apply for, and seek issuance of, maintain or abandon any or all of the Licensed MONSANTO Patent Rights. DEKALB shall have the exclusive right to apply for, and seek issuance of, maintain or abandon any or all of the Licensed DEKALB Patent Rights. 7.02 PATENT INFRINGEMENT: (a) DEKALB and MONSANTO shall each give prompt notice to the other of any infringement of the Licensed MONSANTO Patent Rights or of the Licensed DEKALB Patent Rights within the Field which may come to its attention. (b) DEKALB shall not have the right (by operation of law or otherwise) to enforce any Licensed MONSANTO Patent Right licensed hereunder against any alleged infringer. MONSANTO shall not have the right (by operation of law or otherwise) to enforce any Licensed DEKALB Patent Right licensed hereunder against any alleged infringer. SECTION 8 - WARRANTIES AND LIABILITIES 8.01 REPRESENTATIONS AND WARRANTIES: (a) MONSANTO represents and warrants that: (i) it is the owner or licensee of the Licensed MONSANTO Patent Rights to the extent required for the grant of rights contained herein; (ii) it has not previously granted, and will not grant to any third party during the term of this Agreement, any rights and licenses under the Licensed MONSANTO Patent Rights that are in conflict with the rights granted to DEKALB herein; and (iii) it has full power, right and authority to enter into and carry out its obligations under this Agreement. (iv) it will not enter into a transaction which is in conflict with the rights acquired by DEKALB hereunder. (b) DEKALB represents and warrants that: (i) it is the owner or licensee of the Licensed DEKALB Patent Rights to the extent required for the grant of rights contained herein; (ii) it has not previously granted, and will not grant to any third party during the term of this Agreement, any rights and licenses under the Licensed DEKALB Patent Rights that are in conflict with the rights granted to MONSANTO herein; and -18- 19 (iii) it has full power, right and authority to enter into and carry out its obligations under this Agreement. (iv) it will not enter into a transaction which is in conflict with the rights acquired by MONSANTO hereunder. 8.02 NO OTHER WARRANTIES: (a) EXCEPT FOR THE EXPRESS WARRANTIES IN SUBSECTION 8.01, MONSANTO MAKES NO WARRANTIES REGARDING THE LICENSED MONSANTO PATENT RIGHTS (INCLUDING, WITHOUT LIMITATION, THE VALIDITY OR SCOPE OF THE LICENSED MONSANTO PATENT RIGHTS) OR THE LICENSED DEKALB PRODUCTS (INCLUDING, WITHOUT LIMITATION, THE NON-INFRINGEMENT OF THE LICENSED DEKALB PRODUCTS ON THIRD PARTY PATENT RIGHTS) OR OTHERWISE, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW. (b) EXCEPT FOR THE EXPRESS WARRANTIES IN SUBSECTION 8.01, DEKALB MAKES NO WARRANTIES REGARDING THE LICENSED DEKALB PATENT RIGHTS (INCLUDING, WITHOUT LIMITATION, THE VALIDITY OR SCOPE OF THE LICENSED DEKALB PATENT RIGHTS) OR THE LICENSED MONSANTO PRODUCTS (INCLUDING, WITHOUT LIMITATION, THE NON-INFRINGEMENT OF THE LICENSED MONSANTO PRODUCTS ON THIRD PARTY PATENT RIGHTS) OR OTHERWISE, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW. 8.03 INDEMNIFICATION: (a) EXCEPT TO THE EXTENT CAUSED BY MONSANTO'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, DEKALB SHALL DEFEND AND INDEMNIFY MONSANTO AGAINST, AND HOLD MONSANTO AND ITS EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS HARMLESS FROM, ANY LOSS, COST, LIABILITY OR EXPENSE (INCLUDING COURT COSTS AND REASONABLE FEES OF ATTORNEYS AND OTHER PROFESSIONALS) INCURRED FROM ANY CLAIM ARISING OR ALLEGED TO ARISE OUT OF THE MANUFACTURE, USE, DISTRIBUTION OR SALE OF ANY LICENSED DEKALB PRODUCT BY DEKALB OR ANY DEKALB LICENSEE, AFFILIATE, BUSINESS ASSOCIATE, OR INTERNATIONAL ASSOCIATE; PROVIDED, HOWEVER, THAT (I) DEKALB SHALL HAVE SOLE CONTROL OF SUCH DEFENSE, AND (II) MONSANTO SHALL PROVIDE NOTICE PROMPTLY TO DEKALB OF ANY ACTUAL OR THREATENED CLAIM OF WHICH MONSANTO BECOMES AWARE. -19- 20 (b) EXCEPT TO THE EXTENT CAUSED BY DEKALB'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, MONSANTO SHALL DEFEND AND INDEMNIFY DEKALB AGAINST, AND HOLD DEKALB AND ITS EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS HARMLESS FROM, ANY LOSS, COST, LIABILITY OR EXPENSE (INCLUDING COURT COSTS AND REASONABLE FEES OF ATTORNEYS AND OTHER PROFESSIONALS) INCURRED FROM ANY CLAIM ARISING OR ALLEGED TO ARISE OUT OF THE MANUFACTURE, USE, DISTRIBUTION OR SALE OF ANY LICENSED MONSANTO PRODUCT BY MONSANTO OR ANY MONSANTO LICENSEE, AFFILIATE, BUSINESS ASSOCIATE, OR INTERNATIONAL ASSOCIATE; PROVIDED, HOWEVER, THAT (I) MONSANTO SHALL HAVE SOLE CONTROL OF SUCH DEFENSE, AND (II) DEKALB SHALL PROVIDE NOTICE PROMPTLY TO MONSANTO OF ANY ACTUAL OR THREATENED CLAIM OF WHICH DEKALB BECOMES AWARE. 8.04 LIMITED LIABILITY: EXCEPT TO THE EXTENT PROVIDED FOR IN SUBSECTION 8.03 ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS, INTERRUPTION OF BUSINESS, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND SUFFERED BY SUCH OTHER PARTY FOR BREACH HEREOF, WHETHER BASED ON CONTRACT OR TORT CLAIMS OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS. SECTION 9 - TERM AND TERMINATION 9.01 TERM: The term of this Agreement shall begin upon the closing of the Investment Agreement between MONSANTO and DEKALB of even date hereof (the "Effective Date"), and shall end Ten (10) years thereafter, unless terminated sooner in accordance with this Section 9. [***] the parties shall begin [***] for the purpose of extending the Agreement beyond the original Ten (10) year term. 9.02 TERMINATION OF AGREEMENT FOR MATERIAL BREACH: (a) Either party may terminate this Agreement upon at least sixty (60) days written notice to the other party should the other party commit a material breach of its obligations or be in material default under any of the provisions of this Agreement, provided that the other party has failed to cure the breach or default (or, if such breach or default cannot be cured within the sixty (60) day period, the other party has not taken reasonable -20- 21 steps to cure the breach or default) within the same sixty (60) day notice period. (b) Notwithstanding a party's right to terminate this Agreement as a result of a non-cured material breach by the other party, the non-breaching party shall not be prevented from seeking any other remedy which may be available to it in equity, including specific performance on the part of the party in breach. (c) It shall be considered a material breach to enter into a collaborative research agreement with a third party which overlaps or conflicts with the field of a Collaborative Effort undertaken pursuant to the terms of this Agreement. For that purpose, each Collaborative Effort shall specifically define the field of the Collaborative Effort, as well as what related areas overlap or conflict with such field. This Subsection 9.02(c) shall not be interpreted, however, as precluding either party from obtaining necessary, reasonable, and customary technical assistance of a nature that does not impinge upon the core technology of the Collaborative Effort. (d) The terms of any termination shall be subject to arbitration under the provisions set forth in the attached Appendix B if requested by at least one of the parties hereto. 9.03 INSOLVENCY: Either party may terminate this Agreement if, at any time: (a) the other party makes an assignment for the benefit of creditors or admits in writing its inability generally to pay or is generally not paying its debts as such debts become due; (b) any decree or order for relief is entered against the other party under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law; (c) the other party petitions for, applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official, of such other party or any substantial part of its assets, or commences a voluntary case under the bankruptcy law of any jurisdiction; (d) any such petition or application is filed, or any such proceedings are commenced, against the other party and such other party by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order for relief, order, judgment or decree remains unstayed and in effect for more than sixty (60) days; or (e) any order, judgment or decree is entered in any proceedings against the other party decreeing the dissolution of such other party and such order, judgment or decree remains unstayed and in effect for more than sixty (60) days. -21- 22 9.04 GOVERNMENT ORDER OR DECREE REQUIRING DIVESTITURE: Upon issuance of any governmental order or decree requiring the termination of this Collaboration Agreement, the parties shall be permitted to terminate this Agreement in accordance with the terms of any such governmental order or decree in as orderly manner as reasonably practical. 9.05 EFFECTS OF TERMINATION/SURVIVAL: (a) Expiration or termination of this Agreement shall not relieve the parties of any obligation accruing prior to or upon such expiration or termination. Accordingly, Subsections 8.03 and 8.04 and Sections 10 and 11 shall survive expiration or termination of this Agreement and neither party shall be relieved of any payment obligation that may have accrued prior to or as the result of such expiration or termination. (b) Upon expiration of this Agreement, either party shall have [***] to exercise its right(s) to a license under the provisions of Subsections 4.03, 4.04 and/or 4.08. (c) Upon termination under the provisions of Subsection 9.02, the party not in breach shall have [***] to exercise its right(s) to a license under the provisions of Subsections 4.03, 4.04, and/or 4.08. The party in breach shall [***] (d) Upon termination of the Investment Agreement between MONSANTO and DEKALB of even date hereof before the expiration or termination of this Agreement because of (1) the issuance by any governmental authority of any order or decree requiring MONSANTO to terminate the Investment Agreement, which order or decree resulting from MONSANTO's voluntary action, or (2) the termination of the Investment Agreement by MONSANTO other than for Cause, as defined in the Investment Agreement in Subsection 9.1.6, (i) At DEKALB's option this Agreement [***] or the term of this Agreement shall be [***] of the period between the Effective Date and the date on which the Investment Agreement is terminated; (ii) MONSANTO's share of Value from any on-going Collaborative Effort shall be [***] and DEKALB's share shall be [***] i.e., if MONSANTO's share had been [***] it shall be [***], and DEKALB's share shall be [***] (iii) to the extent necessary to adjust the revenue shares, Subsection 5.02 shall automatically be amended as follows: (a) the Value received with regard to a Collaborative Effort typically shall be distributed [***] to MONSANTO, [***] to -22- 23 DEKALB (Subsection 5.02(a)); (b) the parties may mutually agree, on a case-by-case basis, that DEKALB may receive [***] or that MONSANTO may receive [***] with the other party taking the remainder (Subsection 5.02(a)(i)); (c) if the Collaborative Effort also is an Existing Project of only DEKALB, the parties may mutually agree, on a case-by-case basis, that DEKALB may receive [***] of the value, and if the Collaborative Effort also is an Existing Project of only MONSANTO, the parties may mutually agree, on a case-by-case basis, that MONSANTO may receive [***] of the value, with the other party taking the remainder in either case (Subsection 5.02(a)(ii)); and (iv) any royalty payable to DEKALB as grantee of a license under Subsection 5.01 shall [***] (Subsection 5.01(d)); any royalty payable by DEKALB as grantor of a license under Subsection 5.01 shall [***] (Subsection 5.01(d)). (e) Upon termination of the Investment Agreement between MONSANTO and DEKALB of even date hereof before the expiration or termination of this Agreement because of the issuance by any governmental authority of any order or decree requiring DEKALB to terminate the Investment Agreement, which order or decree resulted from DEKALB's voluntary action, (i) at MONSANTO's option, this Agreement [***] or the term of this Agreement may be [***] of the period between the Effective Date and the date on which the Investment Agreement is terminated; (ii) DEKALB's share of Value from any on-going Collaborative Effort shall be [***] and MONSANTO's share shall be [***] i.e., if DEKALB's share had been [***] it shall be [***] and MONSANTO'S share shall be [***] (iii) to the extent necessary to adjust the revenue shares, Subsection 5.02 shall automatically be amended as follows: (a) the Value received with regard to a Collaborative Effort typically shall be distributed [***] to DEKALB, [***] to MONSANTO (Subsection 5.02(a)); (b) the parties may mutually agree, on a case-by-case basis, that MONSANTO may receive [***] or that DEKALB may receive [***] with the other party taking the remainder (Subsection 5.02(a)(i)); (c) if the Collaborative Effort also is an Existing Project of only MONSANTO, the parties may mutually agree, on a case-by-case basis, that MONSANTO may receive [***] of the value, and if the Collaborative -23- 24 Effort also is an Existing Project of only DEKALB, the parties may mutually agree, on a case-by-case basis, that DEKALB may receive [***] of the value, with the other party taking the remainder in either case (Subsection 5.02(a) (ii)); and (iv) any royalty payable to MONSANTO as grantee of a license under Subsection 5.01 shall [***] (Subsection 5.01(d)); any royalty payable by MONSANTO as grantor of a license under Subsection 5.01 shall [***] (Subsection 5.01(d)). (f) Upon early termination of the Investment Agreement by MONSANTO with Cause, as defined in the Investment Agreement in Subsection 9.1.6, MONSANTO shall have [***] to exercise its right(s) to a license under the provisions of Subsections 4.03, 4.04, and/or 4.08. DEKALB shall [***] SECTION 10 - TITLE AND OWNERSHIP 10.01 OWNERSHIP (a) Each party's ownership interests established before the Effective Date of this Agreement shall not be affected by this Agreement. (b) A party's ownership interests in the Rights resulting from an Independent Effort shall remain vested in that party. (c) The parties agree that the legal title to the intellectual property rights in Rights resulting from a Collaborative Effort vest in the party selected by the parties at the time the Collaborative Effort is so identified. The parties agree that each party shall promptly obtain from each employee involved with the Collaborative Effort an agreement obligating the employee to assign such rights to the party selected. (d) The parties agree that, Subsection 10.01(c) notwithstanding, any and all necessary assignment of rights in the intellectual property rights in Rights resulting from a Collaborative Effort shall, upon termination of this Agreement, be recorded in the appropriate patent offices such that legal title shall be held jointly by MONSANTO and DEKALB. Each party shall, upon the reasonable request of the other, execute such documents and take such actions as necessary to effect the assignment of intellectual property rights as set forth herein. SECTION 11 - CONFIDENTIALITY 11.01 CONFIDENTIAL INFORMATION: The parties have previously disclosed, and it is anticipated that it will be necessary, in connection with their obligations under this Agreement, for DEKALB and MONSANTO to disclose to each other Confidential Information. The Confidential Information shall include, but not limited to, information -24- 25 disclosed in writing or other tangible form, including samples of materials. 11.02 CONFIDENTIALITY AND LIMITED USE: (a) With respect to all Confidential Information, both DEKALB and MONSANTO agree as follows, it being understood that "recipient" indicates the party receiving the confidential, proprietary information from the other "disclosing" party. Confidential Information disclosed to the recipient shall remain the property of the disclosing party and shall be maintained in confidence by the recipient with the same care and diligence as the recipient maintains its own Confidential Information. Confidential Information shall not be disclosed to third parties by the recipient and, further, shall not be used except for purposes contemplated in this Agreement. All confidentiality and limited use obligations with respect to the Confidential Information shall terminate ten (10) years after the termination date of this Agreement. (b) Notwithstanding any provision to the contrary, a party may disclose the Confidential Information of the other party: (i) in connection with an order of a court or other government body or as otherwise required by or in compliance with law or regulations; provided that the party required to disclose provides the other party with notice and takes reasonable measures to obtain confidential treatment thereof; (ii) in confidence to recipient's attorneys, accountants, banks and financial sources and its advisors; or (iii) in confidence, in connection with the sale of substantially all the business assets to which this Agreement relates, so long as, in each case, the entity to which disclosure is made is bound to confidentiality on terms consistent with those set forth herein. (c) Notwithstanding any provision to the contrary, a party seeking to make a disclosure to an entity not bound to confidentiality on terms consistent with those set forth herein shall first provide to the other party a copy of the material proposed to be disclosed and shall obtain the consent of the other party before making the disclosure, which consent shall not be unreasonably withheld. 11.03 EXCEPTIONS: The obligations of confidentiality and limited use shall not apply to any of the Confidential Information which: (a) is publicly available by publication or other documented means or later becomes likewise publicly available through no act or fault of recipient; or (b) is already known to recipient before receipt from the disclosing party, as demonstrated by recipient's written records; or (c) is made known to recipient by a third party who did not obtain it directly or indirectly from the disclosing party and who does not obligate recipient to hold it in confidence; or (d) is independently developed by the recipient as evidenced by credible -25- 26 written research records of recipient's employees or agents who did not have access to the disclosing party's Confidential Information. Specific information should not be deemed to be within any of these exclusions merely because it is embraced by more general information falling within these exclusions. 11.04 DISCLOSURES TO PERSONNEL: Recipient agrees to advise those of its officers, directors, employees, associates, agents, consultants, Affiliates, Business Associates, and International Associates who become aware of the Confidential Information, of these confidentiality and limited use obligations and agrees, prior to any disclosure of Confidential Information to such individuals or entities, to make them bound by obligations of confidentiality and limited use of the same stringency as those contained in this Agreement. 11.05 RETURN OF CONFIDENTIAL INFORMATION: Upon termination of this Agreement, originals and copies of Confidential Information in written or other tangible form will be returned to the disclosing party by recipient or destroyed by recipient. One copy of each document may be retained in the custody of the recipient's legal counsel solely to provide a record of what disclosures were made. 11.06 CONFIDENTIAL STATUS OF AGREEMENT: The terms of this Agreement shall be deemed to be Confidential Information and shall be dealt with according to the confidentiality requirements of this Section 11. Neither party will make public disclosures concerning specific terms of this Agreement without obtaining the prior written consent of the other party, which consent shall not be unreasonably withheld, and except as may be necessary, in the opinion of Counsel of the party making such disclosure, to comply with the requirements of any stock exchange or over-the-counter market on which the shares of such party may be listed or of any law, governmental regulation or order. If a party determines that such a disclosure is necessary, it shall promptly notify the other party so that the other party can obtain confidential treatment of its Confidential Information. SECTION 12 - MISCELLANEOUS 12.01 NOTICES: Any notice or other communication required or permitted to be given by either party under this Agreement shall be given in writing and shall be effective when delivered, if delivered by hand or by electronic facsimile or five days after mailing if mailed by registered or certified mail, postage prepaid and return receipt requested, addressed to each party at the following addresses or such other address as may be designated by notice pursuant to this Subsection 12.01: -26- 27 If to MONSANTO: Monsanto Company 800 North Lindbergh Boulevard St. Louis, Missouri 63167 Attention: Robert T. Fraley, Ph.D. President, Ceregen Facsimile: (314) 694-7771 with a copy to: Monsanto Company 700 Chesterfield Pkwy North St. Louis, Missouri 63198 Attention: Patent Counsel, Ceregen Monsanto Company Mail Code BB4F Facsimile: (314) 537-6047 and to: Monsanto Company 700 Chesterfield Pkwy North St. Louis, Missouri 63198 Attention: William M. Ziegler Business Director, Corn and Soybeans Mail Code BB4D Facsimile: (314) 537-6047 If to DEKALB: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, Illinois 60115 Attention: Richard O. Ryan President and Chief Operating Officer Facsimile: (815) 758-6953 -27- 28 with a copy to: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, Illinois 60115 Attention: John H. Witmer, Jr. Senior Vice President and General Counsel Facsimile: (815) 758-6953 and to: DEKALB Genetics Corporation 62 Maritime Drive Mystic, Conn. 06355 Attention: Catherine J. Mackey, Ph.D. Vice President, Research Facsimile: (860) 572-5241 12.02 PROVISIONS CONTRARY TO LAW: In performing this Agreement, the parties shall comply with all applicable laws and regulations. Nothing in this Agreement shall be construed so as to require the violation of any law, and wherever there is any conflict between any provision of this Agreement and any law the law shall prevail, but in such event the affected provision of this Agreement shall be affected only to the extent necessary to bring it within the applicable law. 12.03 FORCE MAJEURE: (a) Neither of the parties shall be liable for any default or delay in performance of any obligation under this Agreement caused by any of the following: Act of God, war, riot, fire, explosion, accident, flood, sabotage, compliance with governmental requests, laws, regulations, orders or actions, national defense requirements or any other event beyond the reasonable control of such party; or labor trouble, strike, lockout or injunction (provided that neither of the parties shall be required to settle a labor dispute against its own best judgment). (b) The party invoking this Subsection 12.03 shall give the other party written notice and full particulars of such force majeure event. (c) Both MONSANTO and DEKALB shall use reasonable efforts to mitigate the effects of any force majeure on their respective parts. -28- 29 12.04 RELATIONSHIP OF THE PARTIES: Notwithstanding any provision hereof, for all purposes of this Agreement each party shall be and act as an independent contractor and not as partner, joint venturer or agent of the other and shall not bind nor attempt to bind the other to any contract, without the prior written consent of the party to be bound. 12.05 USE OF NAMES: Unless otherwise required by the terms of this Agreement, neither party shall use the name of the other in any promotional materials or advertising without the prior written consent of the other. 12.06 ASSIGNABILITY AND CHANGE IN CONTROL: (a) The rights acquired herein by DEKALB are not assignable or transferable in whole or part (by operation of law or otherwise) to any third party without the prior written consent of MONSANTO, except as provided in Subsection 10.06(d). (b) The rights acquired herein by MONSANTO are not assignable or transferable in whole or part (by operation of law or otherwise) to any third party without the prior written consent of DEKALB, except as provided in Subsection 10.06(e). (c) Any transfer, assignment or delegation made or attempted in violation of this Subsection 12.06 shall be void ab initio and of no effect. (d) Subject to the provisions of Subsection 9.05(b), upon any change in control of DEKALB (by acquisition, merger, consolidation or otherwise) resulting in, direct or indirect, ownership of the voting stock of DEKALB at a level of greater than fifty percent (50%) by a single entity or by two or more entities acting together or, control as a consequence of a shareholder agreement, joint venture agreement or other agreement, MONSANTO can terminate this Agreement within ninety (90) days of receiving notice of such change, provided however, that any existing Collaborative Efforts shall continue for one year, unless otherwise mutually agreed by the parties. Upon any change in control, MONSANTO's payment obligation to DEKALB (or its successor in interest) shall be adjusted as follows: (i) DEKALB's share of Value from any on-going Collaborative Effort shall be [***] and MONSANTO's share shall be [***] i.e., if DEKALB's share had been [***] it shall be [***] and MONSANTO's share shall be [***] (ii) to the extent necessary to adjust the revenue shares, Subsection 5.02 shall automatically be amended as follows: (a) the Value received with regard to a Collaborative Effort typically shall be distributed [***] to DEKALB, [***] to MONSANTO (Subsection 5.02(a)); -29- 30 (b) the parties may mutually agree, on a case-by-case basis, that MONSANTO may receive [***] or that DEKALB may receive [***] with the other party taking the remainder (Subsection 5.02(a)(i)); (c) if the Collaborative Effort also is an Existing Project of only MONSANTO, the parties may mutually agree, on a case-by-case basis, that MONSANTO may receive [***] of the value, and if the Collaborative Effort also is an Existing Project of only DEKALB, the parties may mutually agree, on a case-by-case basis, that DEKALB may receive [***] of the value, with the other party taking the remainder in either case (Subsection 5.02(a)(ii)); and (iii) any royalty payable to MONSANTO as grantee of a license under Subsection 5.01 shall [***] (Subsection 5.01(d)); any royalty payable by MONSANTO as grantor of a license under Subsection 5.01 shall [***] (Subsection 5.01(d)). This Subsection 10.06(d) shall not apply to any such change in control in which Monsanto becomes the controlling party. (e) Subject to the provisions of Subsection 9.05(b), upon any change in control of MONSANTO (by acquisition, merger, consolidation or otherwise) resulting in, direct or indirect, ownership of MONSANTO at a level of greater than fifty percent (50%) by a single entity or by two or more entities acting together or, control as a consequence of a shareholder agreement, joint venture agreement or other agreement, DEKALB can terminate this Agreement within ninety (90) days of receiving notice of such change, provided however, that any existing Collaborative Efforts shall continue for one year, unless otherwise mutually agreed by the parties. . Upon any change in control, DEKALB's payment obligation to MONSANTO (or its successor in interest) shall be adjusted as follows: (i) DEKALB's share of Value from any on-going Collaborative Effort shall be [***] and MONSANTO's share shall be [***] i.e., if DEKALB's share had been [***] it shall be [***] and MONSANTO's share shall be [***] (ii) to the extent necessary to adjust the revenue shares, Subsection 5.02 shall automatically be amended as follows: (a) the Value received with regard to a Collaborative Effort typically shall be distributed [***] to DEKALB, [***] to MONSANTO (Subsection 5.02(a)); (b) the parties may mutually agree, on a case-by-case basis, that MONSANTO may receive [***] or that DEKALB may receive [***] with the other party taking the remainder (Subsection 5.02(a)(i)); -30- 31 (c) if the Collaborative Effort also is an Existing Project of only MONSANTO, the parties may mutually agree, on a case-by-case basis, that MONSANTO may receive [***] of the value, and if the Collaborative Effort also is an Existing Project of only DEKALB, the parties may mutually agree, on a case-by-case basis, that DEKALB may receive [***] of the value, with the other party taking the remainder in either case (Subsection 5.02(a)(ii)); and (iii) any royalty payable to DEKALB as grantee of a license under Subsection 5.01 [***] (Subsection 5.01(d)); any royalty payable by DEKALB as grantor of a license under Subsection 5.01 shall [***] (Subsection 5.01(d)). 12.07 ENTIRE AGREEMENT; AMENDMENTS; WAIVER: This Agreement constitutes the full understanding of the parties, a complete allocation of risks between them and a complete and exclusive statement of the terms and conditions of their agreement relating to the subject matter hereof and supersedes any and all prior agreements, whether written or oral, that may exist between the parties with respect thereto. Except as otherwise specifically provided in this Agreement, no conditions, usage of trade, course of dealing or performance, understanding or agreement purporting to modify, vary, explain or supplement the terms or conditions of this Agreement shall be binding unless hereafter made in writing and signed by the party to be bound and no modification shall be effected by the acknowledgment or acceptance of documents containing terms or conditions at variance with or in addition to those set forth in this Agreement. No waiver by any party with respect to any breach or default or of any right or remedy and no course of dealing or performance, shall be deemed to constitute a continuing waiver of any other breach or default or of any right or remedy, unless such waiver be expressed in writing signed by the party to be bound. Failure of a party to exercise any right shall not be deemed a waiver of such right or rights in the future. 12.08 CHOICE OF LAW: IT IS THE INTENTION OF THE PARTIES HERETO THAT ALL QUESTIONS WITH RESPECT TO THE CONSTRUCTION OF THIS AGREEMENT AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO BUSINESS ARRANGEMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN THE STATE OF DELAWARE. 12.09 EXPORT CONTROL: (a) Notwithstanding any other provisions of this Agreement, DEKALB agrees to make no disclosure or use of any MONSANTO Know-How, Confidential -31- 32 Information, or Rights of MONSANTO furnished or made known to DEKALB pursuant to this Agreement, except in compliance with the laws and regulations of the United States of America, including the Export Administration Regulations promulgated by the Office of Export Administration International Trade Administration, United States Department of Commerce; and in particular, DEKALB agrees not to export, directly or indirectly, either (i) the technical data furnished or made known to DEKALB pursuant to this Agreement; or (ii) the "direct product" thereof; or (iii) any commodity produced using such technical data to any country or countries for which a validated license is required unless a validated license is first obtained pursuant to the Export Administration Regulations. The term "direct product" as used above, is defined to mean the immediate product (including process and services) produced directly by the use of the technical data. (b) Notwithstanding any other provisions of this Agreement, MONSANTO agrees to make no disclosure or use of any DEKALB Know-How, Confidential Information, or Rights of DEKALB furnished or made known to MONSANTO pursuant to this Agreement, except in compliance with the laws and regulations of the United States of America, including the Export Administration Regulations promulgated by the Office of Export Administration International Trade Administration, United States Department of Commerce; and in particular, MONSANTO agrees not to export, directly or indirectly, either (i) the technical data furnished or made known to MONSANTO pursuant to this Agreement; or (ii) the "direct product" thereof; or (iii) any commodity produced using such technical data to any country or countries for which a validated license is required unless a validated license is first obtained pursuant to the Export Administration Regulations. The term "direct product" as used above, is defined to mean the immediate product (including process and services) produced directly by the use of the technical data. 12.10 MEET AND CONFER: It is the intention of the parties that in the event any dispute arises under this Agreement, the parties shall first meet and confer with one another to attempt to negotiate a resolution of such dispute without recourse to litigation. 12.11 REMEDIES: Except as otherwise expressly stated in this Agreement, the rights and remedies of a party set forth herein with respect to failure of the other to comply with the terms of this Agreement (including, without limitation, rights of full termination of this Agreement) are not exclusive, the exercise thereof shall not constitute an election of remedies -32- 33 and the aggrieved party shall in all events be entitled to seek whatever additional remedies may be available in law or in equity. 12.12 FEES: Except as otherwise provided herein, each party shall bear its own legal fees incurred in connection with the transactions contemplated hereby, provided, however, that if any party to this Agreement seeks to enforce its rights under this Agreement by legal proceedings or otherwise, the non-prevailing party shall pay all costs and expenses incurred by the prevailing party, including, without limitation, all reasonable attorneys' fees. 12.13 HEADINGS: Headings herein are for convenience of reference only and shall in no way affect interpretation of this Agreement. 12.14 COUNTERPARTS: This Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. 12.15 ARBITRATION: Disputes arising out of Subsections 5.01, 5.03, 5.04 and 9.02 of this Agreement will be finally settled by arbitration conducted in accordance with the arbitration rules and guidelines outlined in attached Appendix B. The arbitration will be held in Chicago, Illinois as promptly as possible at such time as the arbitrator(s) may determine. The decision of the arbitrator(s) will be final and binding upon the parties hereto. 12.16 APPENDICES: The appended Appendices and Exhibits form an integral part of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. MONSANTO COMPANY DEKALB GENETICS CORPORATION By: Robert T. Fraley By: Bruce P. Bickner ---------------------------- ---------------------------- Robert T. Fraley Bruce P. Bickner Title: President, Ceregen Title: Chairman and CEO -33- EX-99.C.5 15 CORN BORER AGREEMENT 1 CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. EACH SUCH OMISSION IS DESIGNATED [***]. CORN BORER-PROTECTED CORN LICENSE AGREEMENT This Agreement (the "Agreement") is made and effective as of the 31st day of January, 1996 by and between Monsanto Company, and DEKALB Genetics Corporation regarding the non-exclusive, cross-license of certain patent rights and proprietary technology of Monsanto and of DEKALB for use in producing lepidopteran insects-protected corn plants. Based on the mutual consideration between the parties recited below, and in partial consideration for entering into the Investment Agreement of even date herewith, the parties agree and covenant as set forth below. SECTION 1- BACKGROUND AND PARTIES 1.01 Monsanto Company ("MONSANTO") is a corporation of the State of Delaware with principal offices at 800 N. Lindbergh Boulevard, St. Louis, Missouri 63167. 1.02 DEKALB Genetics Corporation ("DEKALB") is a corporation of the State of Delaware with principal offices at 3100 Sycamore Road, DeKalb, Illinois 60115. 1.03 MONSANTO has certain rights relating to Genetic Element(s), Germplasm, Plasmid(s), Methods and Gene(s), including technical information and Know-How relating to, among other things, transformed plants and seeds, useful for lepidopteran insects protection in corn plants and has rights in and to patents and/or patent applications covering the Genetic Element(s), Germplasm, Plasmid(s), Methods and Gene(s) and their use. 1.04 DEKALB has certain rights relating to Genetic Element(s), Germplasm, Plasmid(s), Methods and Gene(s), including technical information and Know-How relating to, among other things, transformed plants and seeds, useful for lepidopteran insects protection in corn plants and has rights in and to patents and/or patent applications covering the Genetic Element(s), Germplasm, Plasmid(s), Methods and Gene(s) and their use. 1.05 DEKALB is interested in the commercialization of lepidopteran insects-protected corn and DEKALB seeks to obtain a limited license under MONSANTO's proprietary rights, and MONSANTO desires to grant such license, all upon the terms and conditions provided herein. 1.06 MONSANTO is interested in obtaining a limited license under DEKALB's proprietary rights, and DEKALB desires to grant such license, all upon the terms and conditions provided herein. 2 SECTION 2 - DEFINITIONS For purposes of this Agreement, the following words and phrases shall have the following meanings: 2.01 The term "Affiliate(s)," as used herein, means with respect to an entity, any person that is at least fifty percent (50%) owned by, or, directly or indirectly, is controlled by, under common control with or in control of, that entity. The term "control" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an entity whether through the ownership of securities, by contract or otherwise. 2.02 The term "DEKALB Germplasm" as used herein, means transgenic corn germplasm supplied to MONSANTO by DEKALB. 2.03 The term "MONSANTO Germplasm" as used herein, means transgenic corn germplasm supplied to DEKALB by MONSANTO. 2.04 The term "Confidential Information," as used herein, means any proprietary information, including technical, economic, financial or marketing information, which either party considers confidential and which is disclosed to the other party. 2.05 The term "Effective Date" is defined in Subsection 8.01 of this Agreement. 2.06 The term "Fiscal Year" shall mean a twelve-month period ending August 31st. 2.07 The term "DEKALB Gene(s)," as used herein, shall mean DNA encoding an insect control protein from Bacillus thuringiensis or derivative thereof which is supplied to MONSANTO by DEKALB prior to or during the term of this Agreement, and derivatives or modifications thereof, which protein, upon expression in corn plants, results in protection against lepidopteran insects. 2.08 The term "MONSANTO Gene(s)," as used herein, shall mean DNA encoding an insect control protein from Bacillus thuringiensis or derivative thereof which is supplied to DEKALB by MONSANTO prior to or during the term of this Agreement, and derivatives or modifications thereof, which protein, upon expression in corn plants, results in protection against lepidopteran insects. -2- 3 2.09 The term "DEKALB Genetic Element(s)," as used herein, means any DNA sequence or sequences including any DNA containing promoters, 5' non-translated regions, introns, 3' non-translated termination/polyadenylation regions and markers that are useful in expressing recombinant genes in corn, which is supplied to MONSANTO by DEKALB prior to or during the term of this Agreement, and replicates thereof, which are useful for the expression of insect control proteins of Bacillus thuringiensis or are useful for the selection of transgenic plants from tissue culture. 2.10 The term "MONSANTO Genetic Element(s)," as used herein, means any DNA sequence or sequences including any DNA containing promoters, 5' non-translated regions, introns, 3' non-translated termination/polyadenylation regions and markers that are useful in expressing recombinant genes in corn, which is supplied to DEKALB by MONSANTO prior to or during the term of this Agreement, and replicates thereof which are useful for the expression of insect control proteins of Bacillus thuringiensis or are useful for the selection of transgenic plants from tissue culture. 2.11 The term "Hybrid Seed Corn," as used herein, means seed which a grower would plant to produce a single crop of commercial corn. 2.12 The term "Hybrid Seed Company," as used herein, means an entity, other than DEKALB and MONSANTO, [***] 2.13 The term "Hybrid Seed Company [***]" as used herein, means a Hybrid Seed Company that sold or licensed in the United States in Fiscal Year 1995 [***] Hybrid Seed Corn than [***] in the United States in Fiscal Year 1995. 2.14 The term "International Associate," as used herein, means any foreign-based person that has been licensed by DEKALB or MONSANTO to sell or otherwise distribute DEKALB- or MONSANTO-branded seed products. The International Associates of DEKALB or MONSANTO include, but are not limited to, those listed in Exhibits A and B, respectively. A third party shall not be considered to be an International Associate solely on the basis of the granting of a license pursuant to this Agreement. 2.15 The term "MONSANTO Know-How," as used herein, means any knowledge and proprietary information disclosed to DEKALB by MONSANTO prior to or during the term of this Agreement, which information is not generally publicly known, including, without limitation, all chemical, biochemical, toxicological, manufacturing, formulation, molecular and -3- 4 plant pathology, and scientific research information, whether or not capable of precise separate description but which alone or when accumulated gives to the one acquiring it an ability to develop and commercialize a product through study, testing, production, formulation or marketing which that party would otherwise not have been able to develop and commercialize in the same manner. 2.16 The term "DEKALB Know-How," as used herein, means any knowledge and proprietary information disclosed to MONSANTO by DEKALB prior to or during the term of this Agreement, which information is not generally publicly known, including, without limitation, all chemical, biochemical, toxicological, manufacturing, formulation, molecular and plant pathology, and scientific research information, whether or not capable of precise separate description but which alone or when accumulated gives to the one acquiring it an ability to develop and commercialize a product through study, testing, production, formulation or marketing which that party would otherwise not have been able to develop and commercialize in the same manner. 2.17 The term "Licensed Field," as used herein, means transgenic corn (including sweet corn) which exhibits protection against lepidopteran insects by expression of an insect control protein derived from Bacillus thuringiensis. 2.18 The term "Licensed MONSANTO Method" shall mean any method the use or practice of which would, in the absence of a license, infringe one or more Valid MONSANTO Claims of an unexpired patent included in the Licensed MONSANTO Patent Rights or which involves the use of MONSANTO Know-How or Licensed MONSANTO Non-Patent Proprietary Materials. 2.19 The term "Licensed DEKALB Method" shall mean any method the use or practice of which would, in the absence of a license, infringe one or more Valid DEKALB Claims of an unexpired patent included in the Licensed DEKALB Patent Rights or which involves the use of DEKALB Know-How or Licensed DEKALB Non-Patent Proprietary Materials. 2.20 The term "Licensed MONSANTO Non-Patent Proprietary Materials," as used herein, means all MONSANTO Genetic Element(s), MONSANTO Germplasm, MONSANTO Plasmid(s) and MONSANTO Gene(s). 2.21 The term "Licensed DEKALB Non-Patent Proprietary Materials," as used herein, means all DEKALB Genetic Element(s), DEKALB Germplasm, DEKALB Plasmid(s) and DEKALB Gene(s). -4- 5 2.22 The term "Licensed MONSANTO Patent Rights," shall mean all patent licenses and sublicenses for use in the Licensed Field to which MONSANTO and/or a wholly-owned Affiliate of MONSANTO is a licensee or sublicensee (to the extent allowed by such licenses or sublicenses) and all patents and patent applications within the Licensed Field, including but not limited to those listed in Appendix A-M for use in the Licensed Field and owned by MONSANTO and/or a wholly-owned Affiliate of MONSANTO, filed prior to or during the term of this Agreement, and any and all patents maturing from these applications or maturing from applications that are divisionals, continuations or continuations-in-part of these applications, foreign (i.e., ex-U.S.) equivalents of the foregoing and any and all reissues or extensions of any of the foregoing. 2.23 The term "Licensed DEKALB Patent Rights," shall mean all patent licenses and sublicenses for use in the Licensed Field to which DEKALB and/or a wholly-owned Affiliate of DEKALB is a licensee or sublicensee (to the extent allowed by such licenses or sublicenses) and all patents and patent applications within the Licensed Field, including but not limited to those listed in Appendix A-D for use in the Licensed Field and owned by DEKALB and/or a wholly-owned Affiliate of DEKALB, filed prior to or during the term of this Agreement, and any and all patents maturing from these applications or maturing from applications that are divisionals, continuations or continuations-in-part of these applications, foreign (i.e., ex-U.S.) equivalents of the foregoing and any and all reissues or extensions of any of the foregoing. 2.24 The term "Licensed DEKALB Corn Product(s)" shall mean corn material including, but not limited to, cells, plants, or seeds and products thereof, which is produced by a Licensed MONSANTO Method or which, in the course of its manufacture, use, or sale would, in the absence of a license, infringe a Valid MONSANTO Claim or the production of which involves the use of MONSANTO Know-How or Licensed MONSANTO Non-Patent Proprietary Materials, all in the Licensed Field. 2.25 The term "Licensed MONSANTO Corn Product(s)" shall mean corn material including, but not limited to, cells, plants, or seeds and products thereof, which is produced by a Licensed DEKALB Method or which, in the course of its manufacture, use, or sale would, in the absence of a license, infringe a Valid DEKALB Claim or the production of which involves the use of DEKALB Know-How or Licensed DEKALB Non-Patent Proprietary Materials, all in the Licensed Field. 2.26 The term "Net Units," as used herein, means the number of Units sold of all Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products in arm's length sales to third parties after deduction of credits or allowances given or made for rejection or return of previously sold Licensed DEKALB Corn Products and Licensed MONSANTO Corn -5- 6 Products. Where the product is covered under the present Agreement and under licenses that evolve from the Collaboration Agreement, or from the CaMV Promoter License Agreement or the Glyphosate-Protected Corn License Agreement, all three of even date herewith, "Net Units" must be calculated separately for each Agreement. The use by DEKALB or the Affiliates, International Associates or sublicensees of DEKALB or MONSANTO of commercially reasonable amounts of Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products for promotional sampling or replant shall not be included in Net Units. 2.27 The term "DEKALB Plasmid(s)," as used herein, means a transformation vector(s) which is supplied to MONSANTO by DEKALB prior to or during the term of this Agreement. 2.28 The term "MONSANTO Plasmid(s)," as used herein, means a transformation vector(s) which is supplied to DEKALB by MONSANTO prior to or during the term of this Agreement. 2.29 The term "Territory," as used herein, means the world. 2.30 The term "Unit(s)," as used herein, means a quantity of approximately Eighty Thousand (80,000) kernels. 2.31 The term "Valid DEKALB Claim," as used herein, means an issued claim of the Licensed DEKALB Patent Rights which has not been finally held invalid or unenforceable by a decision of a court or other authority of competent jurisdiction which is not appealable. 2.32 The term "Valid MONSANTO Claim," as used herein, means an issued claim of the Licensed MONSANTO Patent Rights which has not been finally held invalid or unenforceable by a decision of a court or other authority of competent jurisdiction which is not appealable. 2.33 The term "-branded," when used in conjunction with an entity's name, means a trademark or logo of that entity, whether registered or not, affixed to a product or product container, or used in advertising, promotion or other marketing of such a product. 2.34 The term "person," as used herein, shall mean an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. SECTION 3-CONVEYANCE OF RIGHTS -6- 7 3.01 LICENSE GRANT BY MONSANTO: Subject to the terms and conditions of this Agreement, MONSANTO hereby grants to DEKALB a royalty-bearing, non-exclusive, license under the Licensed MONSANTO Patent Rights, Licensed MONSANTO Non-patent Proprietary Materials, Licensed MONSANTO Methods and MONSANTO Know-How, (1) to make, have made, use and sell Licensed DEKALB Corn Products in the Territory; (2) to sublicense DEKALB's Affiliates and International Associates to make, have made, use and sell DEKALB-branded Licensed DEKALB Corn Products in the Territory; and [***] No sublicensee hereunder shall have the right to further sublicense any rights hereunder. 3.02 DISTRIBUTION OF LICENSED DEKALB CORN PRODUCTS: Except as otherwise provided under Subsection 3.01(3), with respect to the sales of Licensed DEKALB Corn Products hereunder in the Territory, DEKALB and its Affiliates and International Associates shall only be permitted to sell and distribute DEKALB-branded Licensed DEKALB Corn Products. 3.03 MARKING OF LICENSED DEKALB CORN PRODUCTS: (a) DEKALB and its Affiliates and International Associates and sublicensees shall conspicuously display on all packages containing Licensed DEKALB Corn Products to be sold or transferred to permitted third-party growers or customers, the following notice (tailored to reflect the nature of the conveyance), or a notice having the same meaning and effect, with the blanks appropriately filled in to the extent such notice is applicable in the respective area: THE (PURCHASE/BAILMENT/TRANSFER) OF THESE SEEDS INCLUDES A LIMITED LICENSE UNDER PATENT(S)____ TO PRODUCE A SINGLE CORN CROP IN THE UNITED STATES (or other applicable country). THIS LICENSE DOES NOT EXTEND TO ANY USE OTHER THAN PRODUCTION OF A SINGLE CROP. (b) Where transactions occur in countries whose primary language is not English, a translation of the notice in the appropriate language shall be used if appropriate or required by law. 3.04 TRADEMARK USAGE: -7- 8 (a) It is agreed that a trademark owned by MONSANTO relating to a Licensed DEKALB Corn Product in the Licensed Field shall be licensed to DEKALB and its sublicensees, Affiliates and International Associates on a non-exclusive basis pursuant to a trademark license agreement. The form of the trademark license agreement is attached hereto as Appendix B-M. The parties shall execute said license agreement when MONSANTO identifies the trademark which will be utilized. DEKALB and its Affiliates and International Associates and sublicensees shall conspicuously display said trademark on all seed packages of Licensed DEKALB Corn Products as well as all promotional and advertising material for such Licensed DEKALB Corn Products in the manner specified in the trademark license agreement. (b) In the event that MONSANTO should terminate such trademark agreement without cause, the obligation of DEKALB and its Affiliates and International Associates to display said trademark pursuant to Subsection 3.04(a) shall be waived. 3.05 NO OTHER LICENSES: No license is granted by this Agreement, under the Licensed MONSANTO Patent Rights or any other patent right by implication or otherwise to make, have made, use or sell, directly or by sublicense, any Licensed DEKALB Corn Product for any use outside the Licensed Field. DEKALB shall not have the right hereunder to grant sublicenses under Licensed MONSANTO Patent Rights allowing the sale of a corn product for commercial use as [***] 3.06 LICENSE GRANT BY DEKALB: Subject to the terms and conditions of this Agreement, DEKALB hereby grants to MONSANTO a royalty-bearing, non-exclusive, license under the Licensed DEKALB Patent Rights, Licensed DEKALB Non-patent Proprietary Materials, Licensed DEKALB Method and DEKALB Know-How, (1) to make, have made, and use Licensed MONSANTO Corn Products in the Territory, and (2) to sublicense MONSANTO Affiliates and International Associates and Hybrid Seed Companies [***] to make, have made, use and sell Licensed MONSANTO Corn Products in the Territory. No sublicensee hereunder shall have the right to further sublicense any rights hereunder. 3.07 MARKING OF LICENSED MONSANTO CORN PRODUCTS: (a) MONSANTO and its Affiliates, International Associates, and sublicensees shall conspicuously display on all packages containing Licensed MONSANTO Corn Products to be sold or transferred to permitted third-party growers or customers, the following notice (tailored to reflect the nature of the conveyance), or a notice having the same meaning and effect, with the blanks appropriately filled in to the extent such notice is applicable in the respective area: THE (PURCHASE/BAILMENT/TRANSFER) OF THESE SEEDS INCLUDES A LIMITED LICENSE UNDER PATENT(S)____ -8- 9 ___________________ TO PRODUCE A SINGLE CORN CROP IN THE UNITED STATES (or other applicable country). THIS LICENSE DOES NOT EXTEND TO ANY USE OTHER THAN PRODUCTION OF A SINGLE CROP. (b) Where transactions occur in countries whose primary language is not English, a translation of the notice in the appropriate language shall be used if appropriate or required by law. 3.08 USE OF DEKALB'S NAME: The parties agree that where a MONSANTO brand or trademark is employed in connection with the advertising, sale, promotion or other marketing of a Licensed MONSANTO Corn Product, then such brand or trademark shall only be so employed in conjunction with both DEKALB's and MONSANTO's names being used in equal prominence. 3.09 NO OTHER LICENSES: No license is granted by this Agreement, under the Licensed DEKALB Patent Rights or any other patent right by implication or otherwise to make, have made, use or sell, directly or by sublicense, any Licensed MONSANTO Corn Product for any use outside the Licensed Field. MONSANTO shall not have the right hereunder to grant sublicenses under Licensed DEKALB Patent Rights allowing the sale of a corn product for commercial use as [***]. 3.10 COMMERCIALIZATION WITH GROWER AGREEMENT: MONSANTO and DEKALB shall meet and discuss whether it is in their mutual interest to commercialize the Licensed MONSANTO Corn Products and Licensed DEKALB Corn Products by directly licensing and or sublicensing the corn grower to use such Products. 3.11 MONSANTO AND DEKALB [***]: If MONSANTO or DEKALB grant to [***] a sublicense under the Licensed DEKALB Patent Rights or Licensed MONSANTO Patent Rights, MONSANTO or DEKALB shall [***] and their respective Affiliates, International Associates and sublicensees with regard to the [***] that relate to the sale of existing Licensed MONSANTO Corn Products or existing Licensed DEKALB Corn Products. The obtaining of such rights shall not constitute consideration under for purposes of Subsection 4.01(a). This obligation can be [***] of the parties. 3.12 NO RIGHTS REGARDING PROPRIETARY GERMPLASM: Notwithstanding anything -9- 10 in this Agreement to the contrary, no rights in proprietary corn inbreds or hybrids of either party are granted the other under this Agreement. 3.13 FUTURE ACCESS: During the term of this Agreement, [***] shall have the right to [***] within the Licensed Field, either internally or with any third party, such that results of that [***], and rights flowing from that research, will not be subject to the grants under [***], of this Agreement. SECTION 4 - PAYMENTS, REPORTS AND RECORD RETENTION 4.01 ROYALTIES PAYABLE BY MONSANTO: (a) In partial consideration for the license rights granted by DEKALB hereunder, until the obligation of MONSANTO to pay royalties to DEKALB expires, MONSANTO shall pay to DEKALB [***], of any cash or cash-equivalent consideration or other consideration received by MONSANTO from its Affiliates, International Associates and Hybrid Seed Companies [***], on any sale of Licensed MONSANTO Corn Products or Licensed DEKALB Corn Products in the Territory by such persons sublicensed by MONSANTO under Licensed DEKALB Patent Rights or Licensed MONSANTO Patent Rights pursuant to the terms of this Agreement [***]. To the extent MONSANTO intends to negotiate a sublicense that contemplates such other consideration that is not cash or a cash equivalent, MONSANTO shall [***]. DEKALB shall have fifteen (15) business days to consider whether to accept enjoyment of the benefit of such other consideration, or to reject such enjoyment and accept instead a cash value equivalent thereto. If DEKALB does not provide notice of acceptance of enjoyment of the benefit of such other consideration to MONSANTO within the fifteen (15) day period, DEKALB shall be deemed to have accepted the cash value equivalent thereto. To the extent there exists any such other consideration, including but not limited to a cross-license, involved in the sublicense the monetary equivalent thereof shall be agreed by the parties for the purpose of this Subsection 4.01(a). If despite good faith negotiations, the parties cannot reach agreement on the monetary equivalent, then determination of such equivalent shall be submitted to arbitration pursuant to the provisions of Subsection 10.15 if requested by either party. Examples of such other consideration include technical data or a sublicense under any license obtained by -10- 11 MONSANTO. Notwithstanding the above provisions of this Subsection 4.01(a), MONSANTO shall not be obligated to negotiate access to such other consideration (i.e., other than cash or cash equivalent) for DEKALB, except as provided in Subsection 3.11. (b) In further consideration for the license rights granted by DEKALB hereunder, MONSANTO shall pay as a royalty to DEKALB an amount equal to the [***] or (ii) [***] of the payment established for Subsection 4.02(a), times the Net Units of Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products sold by DEKALB and its Affiliates and International Associates until the obligation under Subsection 4.02(a) of DEKALB to pay royalties to MONSANTO expires. (c) If DEKALB subsequently grants a license under the Licensed DEKALB Patent Rights to a third party having terms which considered as a whole are more favorable to the licensee than the terms considered as a whole granted to MONSANTO as set forth in Subsection 4.01(a), then DEKALB shall advise MONSANTO as to such more favorable terms. MONSANTO shall, at its election, be entitled upon notice to DEKALB to have this Agreement amended to substitute such third party terms for the terms of this Agreement as of the date upon which such license containing the more favorable terms shall have become effective; provided, however, that MONSANTO also agrees to have the Agreement amended to contain any additional obligations that are recited in such license containing the more favorable terms. (d) In the event DEKALB shall at any time while this Agreement is in effect be compelled by applicable law to issue licenses under the Licensed DEKALB Patent Rights in the Licensed Field to any other person with royalty terms more favorable than those granted to MONSANTO hereunder, DEKALB shall inform MONSANTO of the order compelling any such licenses and shall offer the royalties only with respect to the country or countries wherein such compulsory licenses have been ordered so that the new royalty terms shall be no less favorable to MONSANTO than those granted to any third party under any such compulsory license. (e) Nothing in this Subsection 4.01 shall entitle MONSANTO to any retroactive adjustment, reduction in royalty, or other relief from any of the provisions of this Agreement merely because DEKALB shall commence proceedings against a third party who has infringed the Licensed DEKALB Patent Rights, which proceedings shall be resolved by the third party becoming licensed under the Licensed DEKALB Patent Rights, so long as such subsequent license agreement shall, at least prospectively, impose upon such third party terms as to royalty no more favorable than the royalty terms imposed upon MONSANTO under this Agreement as set forth in Subsection 4.01(a). 4.02 ROYALTIES PAYABLE BY DEKALB: (a) In partial consideration for the license rights granted by MONSANTO hereunder, DEKALB shall pay as a royalty to MONSANTO an amount equal to [***] the Net Units of Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products sold by DEKALB and its Affiliates and International Associates, [***] -11- 12 (b) In partial consideration for the license rights granted by MONSANTO hereunder, until the obligation of DEKALB to pay royalties to MONSANTO expires, DEKALB shall pay to MONSANTO [***] of any cash or cash-equivalent consideration or other consideration received by DEKALB, other than consideration received for sales by DEKALB and its Affiliates and International Associates covered under Subsection 4.02(a), on any sale of Licensed MONSANTO Corn Products or Licensed DEKALB Corn Products in the Licensed Field in the Territory by persons licensed by DEKALB under the Licensed DEKALB Patent Rights pursuant to the terms of this Agreement [***]. To the extent DEKALB intends to negotiate a sublicense that contemplates such other consideration that is not cash or a cash equivalent, DEKALB shall [***]. MONSANTO shall have fifteen (15) business days to consider whether to accept enjoyment of the benefit of such other consideration, or to reject such enjoyment and accept instead a cash value equivalent thereto. If MONSANTO does not provide notice of acceptance of enjoyment of the benefit of such other consideration to DEKALB within the fifteen (15) day period, MONSANTO shall be deemed to have accepted the cash value equivalent thereto. To the extent there exists any such other consideration, including but not limited to a cross-license, involved in the sublicense, the monetary equivalent thereof shall be agreed by the parties for the purpose of this Subsection 4.02(b). If despite good faith negotiations, the parties cannot reach agreement on the monetary equivalent, then determination of such equivalent shall be submitted to arbitration pursuant to the provisions of Subsection 10.15, if requested by either party. Examples of such other consideration include technical data or a sublicense under any license obtained by DEKALB. Notwithstanding the above provisions of this Subsection 4.02(b), DEKALB shall not be obligated to negotiate access to such other consideration (i.e., other than cash or cash equivalent) for MONSANTO, except as provided in Subsection 3.11. (c) If MONSANTO subsequently grants a license under the Licensed MONSANTO Patent Rights to a third party having terms which considered as a whole are more favorable to the licensee than the terms considered as a whole granted to DEKALB as set forth in Subsection 4.02(a), then MONSANTO shall advise DEKALB as to such more favorable terms. DEKALB shall, at its election, be entitled upon notice to MONSANTO to have this -12- 13 Agreement amended to substitute such third party terms for the terms of this Agreement as of the date upon which such license containing the more favorable terms shall have become effective; provided, however, that DEKALB also agrees to have the Agreement amended to contain any additional obligations that are recited in such license containing the more favorable terms. (d) In the event MONSANTO shall at any time while this Agreement is in effect be compelled by applicable law to issue licenses under the Licensed MONSANTO Patent Rights in the Licensed Field to any other company with royalty terms more favorable than those granted to DEKALB hereunder, MONSANTO shall inform DEKALB of the order compelling any such licenses and shall offer the royalties only with respect to the country or countries wherein such compulsory licenses have been ordered so that the new royalty terms shall be no less favorable to DEKALB than those granted to any third party under any such compulsory license. (e) Nothing in this Subsection 4.02 shall entitle DEKALB to any retroactive adjustment, reduction in royalty, or other relief from any of the provisions of this Agreement merely because MONSANTO shall commence proceedings against a third party who has infringed the Licensed MONSANTO Patent Rights, which proceedings shall be resolved by the third party becoming licensed under the Licensed MONSANTO Patent Rights, so long as such subsequent license agreement shall, at least prospectively, impose upon such third party terms as to royalty no more favorable than the royalty terms imposed upon DEKALB under this Agreement as set forth in Subsection 4.02(a). 4.03 FIRST COMMERCIAL SALE IN A COUNTRY: (a) The parties shall promptly advise one another in writing of the first commercial sales of Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products in each country of the Territory. (b) At the time such first commercial sale is reported pursuant to Subsection 4.03(a), the reporting party shall briefly describe the relationship between the reporting party and the entity making the first commercial sale. 4.04 SUBLICENSES: The parties shall promptly advise one another in writing of each sublicense of Licensed MONSANTO Corn Products or Licensed DEKALB Corn Product. 4.05 ROYALTY REPORTS: (a) Within sixty (60) days after the end of each Fiscal Year, DEKALB shall provide MONSANTO with a written report of the Net Units of Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products sold by DEKALB and its Affiliates and International Associates and sublicensees during such Fiscal Year and the consideration received -13- 14 on licenses of Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products granted by DEKALB in the Licensed Field in the Territory under the Licensed DEKALB Patent Rights and Licensed MONSANTO Patent Rights. The report shall contain the determination of royalties due MONSANTO based on such Net Units and consideration. Any consideration other than cash or cash-equivalents received by DEKALB for such licenses shall be provided to MONSANTO, in accordance with Subsection 4.02(b), as soon after receipt by DEKALB as is practicable. (b) Within sixty (60) days after the end of each Fiscal Year, MONSANTO shall provide DEKALB with a written report of the Net Units of Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products sold by MONSANTO's Affiliates and International Associates and sublicensees during such Fiscal Year and the consideration received on licenses of Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products granted by MONSANTO in the Licensed Field in the Territory under the Licensed DEKALB Patent Rights and Licensed MONSANTO Patent Rights. The report shall contain the determination of royalties due DEKALB based on such Net Units and consideration. Any consideration other than cash or cash-equivalents received by MONSANTO for such licenses shall be provided to DEKALB, in accordance with Subsection 4.01(a), as soon after receipt by MONSANTO as is practicable. -14- 15 4.06 ROYALTY PAYMENTS: (a) After receipt of the reports pursuant to Subsection 4.05, each party shall offset payments due from the other party against payments due to the other party. Within ten (10) days after submission of the reports, the party having the duty to pay amounts remaining after the offset shall promptly make the payments then due. Payments shall be in United States dollars. Payments due on sales of Licensed MONSANTO Corn Products and Licensed DEKALB Corn Products sold outside the United States or on sublicenses granted outside the United States shall first be calculated in the foreign currency and then converted to United States dollars on the basis of the rate of exchange in effect for purchase of dollars at Chase Manhattan Bank, New York, New York, on the last business day of the period for which royalties are due. Payments shall be without set off and free and clear of any taxes, duties, fees or charges other than withholding taxes, if any. (b) Each payment to MONSANTO hereunder shall be sent to: (i) MONSANTO's account by wire transfer: [***] with a written notice of such wire transfer, or (ii) to another account in the United States which MONSANTO may subsequently designate from time to time by notice to DEKALB. (c) Each payment to DEKALB hereunder shall be sent to: (i) DEKALB's account by wire transfer: [***] with a written notice of such wire transfer, or (ii) to another account in the United States which DEKALB may subsequently designate from time to time by notice to MONSANTO. 4.07 RECORDS RETENTION: (a) DEKALB agrees to keep, and shall cause its Affiliates and International Associates and sublicensees to keep, records of the sales of all Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products and of all consideration received on licenses granted by DEKALB in the Licensed Field under the Licensed DEKALB Patent Rights and Licensed MONSANTO Patent Rights to any Hybrid Seed Company in sufficient detail to permit MONSANTO to confirm the accuracy of DEKALB's royalty calculations. MONSANTO agrees to keep and shall cause its Affiliates and International Associates and sublicensees to keep, records of all payments and other consideration received on all licenses and all sublicenses -15- 16 granted by MONSANTO in the Licensed Field under the Licensed MONSANTO Patent Rights and Licensed DEKALB Patent Rights to any Hybrid Seed Company, in sufficient detail to permit DEKALB to confirm the accuracy of MONSANTO's royalty calculations. At either party's request, the other party shall permit an independent accountant appointed by the requesting party and reasonably acceptable to the other party to examine, not more often than once during any Fiscal Year and under appropriate confidentiality provisions, upon reasonable notice of at least ten (10) days and at reasonable times and in a manner that does not interfere unreasonably with the other party's business, such records solely to the extent necessary to verify the other party's calculations. Such records shall be kept and examination thereof shall be limited to a period of time no more than three (3) Fiscal Years immediately preceding the request for examination. (b) The audit of the other party's records shall be at the requesting party's expense, provided that, if a net aggregate discrepancy of more than ten percent (10%) is found in favor of the other party, then the other party shall be obligated to reimburse the requesting party for the cost of the audit. 4.08 LATE PAYMENT: Notwithstanding any other remedy available under the provisions of this Agreement, if any sum of money owed hereunder is not paid when due, the unpaid amount shall bear interest compounded quarterly, at an annual rate of one (1) percentage point above the prime rate quoted by Morgan Guaranty Trust Company of New York on the day payment was due, until paid. 4.09 EFFECT OF TERMINATION OF THE INVESTMENT AGREEMENT: (a) Upon termination of the Investment Agreement between MONSANTO and DEKALB of even date hereof before the termination of the Collaboration Agreement and License between MONSANTO and DEKALB of even date hereof, because of (1) the issuance by any governmental authority of any order or decree requiring MONSANTO to terminate the Investment Agreement, which order or decree resulted from MONSANTO's voluntary action, or (2) the termination of the Investment Agreement by MONSANTO other than for Cause, as defined in the Investment Agreement in Subsection 9.1.6: (i) Subsection 4.01(a) shall be modified so that the term [***] shall replace the term [***] (ii) Subsection 4.01(b) shall be modified so that the terms [***] and [***] shall replace the terms [***] and [***] respectively; and (iii) Subsection 4.02(b) shall be modified so that the term [***] shall replace the term [***] (b) Upon termination of the Investment Agreement between MONSANTO and DEKALB of even date hereof before the termination of the Collaboration Agreement and License between MONSANTO and DEKALB of even date hereof because of the issuance by any governmental authority of any order or decree requiring DEKALB to terminate the Investment -16- 17 Agreement, which order or decree resulted from DEKALB's voluntary action: (i) Subsection 4.01(a) shall be modified so that the term [***] shall replace the term [***] (ii) Subsection 4.01(b) shall be modified so that the terms [***] and [***] shall replace the terms [***] and [***] respectively; and (iii) Subsection 4.02(b) shall be modified so that the term [***] shall replace the term [***] SECTION 5 - REGULATORY APPROVAL AND PRODUCT REGISTRATION 5.01 REGULATORY APPROVALS: This Agreement does not obligate either party to undertake any regulatory approvals or product registrations. Each party shall bear its own cost of undertaking such approvals or registrations it seeks. 5.02 REQUEST FOR INFORMATION BY DEKALB: Subject to the provisions of Subsection 5.01, MONSANTO shall, at the reasonable request of DEKALB, provide assistance to DEKALB in seeking such regulatory approvals and/or product registrations, including data, studies and any applicable regulatory filings which MONSANTO may have in its possession; provided, however, that MONSANTO shall not be obligated to conduct any new experiments or other work with respect to any such request by DEKALB. 5.03 REQUEST FOR INFORMATION BY MONSANTO: Subject to the provisions of Subsection 5.01, DEKALB shall, at the reasonable request of MONSANTO, provide assistance to MONSANTO in seeking such regulatory approvals and/or product registrations, including data, studies and any applicable regulatory filings which DEKALB may have in its possession; provided, however, that DEKALB shall not be obligated to conduct any new experiments or other work with respect to any such request by MONSANTO. SECTION 6 - PATENT PROCUREMENT, ENFORCEMENT AND INFRINGEMENT 6.01 PATENT PROCUREMENT: MONSANTO shall have the exclusive right to apply for, and seek issuance of, maintain or abandon any or all of the Licensed MONSANTO Patent Rights. DEKALB shall have the exclusive right to apply for, and seek issuance of, maintain or abandon any or all of the Licensed DEKALB Patent Rights. 6.02 PATENT ENFORCEMENT: -17- 18 (a) DEKALB and MONSANTO shall each give prompt notice to the other of any infringement of the Licensed MONSANTO Patent Rights or of the Licensed DEKALB Patent Rights within the Licensed Field which may come to its attention. (b) MONSANTO shall have the exclusive right (but not the obligation) to institute and conduct legal action against third-party infringers of the Licensed MONSANTO Patent Rights, and to enter into settlement agreements as a way of responding to any infringements as may be deemed appropriate by MONSANTO. MONSANTO shall receive the full benefits of any action it takes pursuant to this Subsection 6.02; provided however, that once any attorney's fees and other reasonable costs incurred in conducting such legal action have been deducted from any recovery obtained from enforcement of Licensed MONSANTO Patent Rights which arise, MONSANTO shall pay to DEKALB its pro rata portion of such recovery, calculated in accordance with the terms of this Agreement as they apply to amounts received pursuant to the applicable Licensed MONSANTO Patent Rights. (c) If the activities of the third party infringing the Licensed MONSANTO Patent Rights result in a material adverse effect on the business of DEKALB or any of its Affiliates or International Associates or sublicensees and at the end of One Hundred and Eighty (180) days from the receipt of notice from DEKALB of such infringement, the third party is both unlicensed under the Licensed MONSANTO Patent Rights and is engaging in activities which are an infringement of the Licensed MONSANTO Patent Rights, and MONSANTO has not brought a suit, action or other proceeding for infringement against such third party, then DEKALB and all of its Affiliates and International Associates and sublicensees shall be excused from making the payments otherwise due hereunder with respect to revenues derived from sales of Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products in a country in which the competitive infringing activity occurs. Such excuse from payment shall arise only as to sales by DEKALB and its Affiliates, International Associates and sub-licensees of the affected Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products in the country in which the infringing products are sold and shall continue only for so long as the infringing products continue to be infringing and to so compete with such Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products unchallenged by an infringement suit, action or other proceeding brought by MONSANTO. If the infringing activities of more than one third party result in such a material adverse effect, then MONSANTO will fulfill its obligation under this Subsection through litigation with only one such third party at a time. (d) DEKALB shall have the exclusive right (but not the obligation) to institute and conduct legal action against third-party infringers of the Licensed DEKALB Patent Rights, and to enter into settlement agreements as a way of responding to any infringements as may be deemed appropriate by DEKALB. DEKALB shall receive the full benefits of any action it takes pursuant to this Subsection 6.02; provided however, that once any attorney's fees and other reasonable costs incurred in conducting such legal action have been deducted from any recovery obtained from enforcement of Licensed DEKALB Patent Rights which arise, DEKALB shall pay -18- 19 to MONSANTO its pro rata portion of such recovery, calculated in accordance with the terms of this Agreement as they apply to amounts received pursuant to the applicable Licensed DEKALB Patent Rights. (e) If the activities of the third party infringing the Licensed DEKALB Patent Rights result in a material adverse effect on the business of MONSANTO's sublicensees and at the end of One Hundred and Eighty (180) days from the receipt of notice from MONSANTO of such infringement, the third party is both unlicensed under the Licensed DEKALB Patent Rights and is engaging in activities which are an infringement of the Licensed DEKALB Patent Rights, and DEKALB has not brought a suit, action or other proceeding for infringement against such third party, then MONSANTO and all of its sublicensees shall be excused from making the payments otherwise due hereunder with respect to revenues derived from sublicenses of Licensed MONSANTO Corn Products or Licensed DEKALB Corn Products in the country in which the competitive infringing activity occurs. Such excuse from payment shall arise only as to sales by MONSANTO's Affiliates, International Associates and sublicensees of the affected Licensed MONSANTO Corn Products or Licensed DEKALB Corn Products in the country in which the infringing products are sold and shall continue only for so long as the infringing products continue to be infringing and to so compete with such Licensed MONSANTO Corn Products or Licensed DEKALB Corn Products unchallenged by an infringement suit, action or other proceeding brought by DEKALB. If the infringing activities of more than one third party result in such a material adverse effect, then DEKALB will fulfill its obligation under this Subsection through litigation with only one such third party at a time. (f) DEKALB shall not have the right (by operation of law or otherwise) to enforce any Licensed MONSANTO Patent Right licensed hereunder against any alleged infringer. MONSANTO shall not have the right (by operation of law or otherwise) to enforce any Licensed DEKALB Patent Right licensed hereunder against any alleged infringer. -19- 20 SECTION 7 - WARRANTIES AND LIABILITIES 7.01 REPRESENTATIONS AND WARRANTIES: (a) MONSANTO represents and warrants that: (i) it is the owner or licensee of the Licensed MONSANTO Patent Rights to the extent required for the grant of rights contained herein; (ii) Appendix A-M lists the MONSANTO-owned patent applications and patents known or believed by MONSANTO to be necessary to make, have made, use or sell Licensed DEKALB Corn Products, and that, to the extent any patent necessary to make, have made, use or sell the Licensed DEKALB Corn Products issues to or is controlled by MONSANTO during the term of this Agreement that is not listed in Appendix A-M, DEKALB shall be entitled to continue to make, have made, use, or sell the Licensed DEKALB Corn Products without paying royalty in addition to the royalty set forth in Subsection 4.02 above; (iii) it has not previously granted, and will not grant to any third party during the term of this Agreement, any rights and licenses under the Licensed MONSANTO Patent Rights that are in conflict with the rights granted to DEKALB herein; and (iv) it has full power, right and authority to enter into and carry out its obligations under this Agreement. (b) DEKALB represents and warrants that: (i) it is the owner or licensee of the Licensed DEKALB Patent Rights to the extent required for the grant of rights contained herein; (ii) Appendix A-D lists the DEKALB-owned patent applications and patents known or believed by DEKALB to be necessary to make, have made, use or sell Licensed MONSANTO Corn Products, and that, to the extent any patent necessary to make, have made, use or sell the Licensed MONSANTO Corn Products issues to or is controlled by DEKALB during the term of this Agreement that is not listed in Appendix A-D, MONSANTO shall be entitled to continue to make, have made, use, or sell the Licensed MONSANTO Corn Products without paying royalty in addition to the royalty set forth in Subsection 4.01 above; (iii) it has not previously granted, and will not grant to any third party during the term of this Agreement, any rights and licenses under the Licensed DEKALB Patent Rights that are in conflict with the rights granted to MONSANTO herein; and (iv) it has full power, right and authority to enter into and carry out its -20- 21 obligations under this Agreement. 7.02 NO OTHER WARRANTIES: (a) EXCEPT FOR THE EXPRESS WARRANTIES IN SUBSECTION 7.01, MONSANTO MAKES NO WARRANTIES REGARDING THE LICENSED MONSANTO PATENT RIGHTS (INCLUDING, WITHOUT LIMITATION, THE VALIDITY OR SCOPE OF THE LICENSED MONSANTO PATENT RIGHTS) OR THE LICENSED DEKALB CORN PRODUCTS (INCLUDING, WITHOUT LIMITATION, THE NON-INFRINGEMENT OF THE LICENSED DEKALB CORN PRODUCTS ON THIRD PARTY PATENT RIGHTS) OR OTHERWISE, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW. (b) EXCEPT FOR THE EXPRESS WARRANTIES IN SUBSECTION 7.01, DEKALB MAKES NO WARRANTIES REGARDING THE LICENSED DEKALB PATENT RIGHTS (INCLUDING, WITHOUT LIMITATION, THE VALIDITY OR SCOPE OF THE LICENSED DEKALB PATENT RIGHTS) OR THE LICENSED MONSANTO CORN PRODUCTS (INCLUDING, WITHOUT LIMITATION, THE NON-INFRINGEMENT OF THE LICENSED MONSANTO CORN PRODUCTS ON THIRD PARTY PATENT RIGHTS) OR OTHERWISE, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW. 7.03 INDEMNIFICATION: (a) EXCEPT TO THE EXTENT CAUSED BY MONSANTO'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, DEKALB SHALL DEFEND AND INDEMNIFY MONSANTO AGAINST, AND HOLD MONSANTO AND ITS EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS HARMLESS FROM, ANY LOSS, COST, LIABILITY OR EXPENSE (INCLUDING COURT COSTS AND REASONABLE FEES OF ATTORNEYS AND OTHER PROFESSIONALS) INCURRED FROM ANY CLAIM ARISING OR ALLEGED TO ARISE OUT OF THE MANUFACTURE, USE, DISTRIBUTION OR SALE OF ANY LICENSED DEKALB CORN PRODUCT BY DEKALB OR ANY DEKALB SUBLICENSEE, AFFILIATE OR INTERNATIONAL ASSOCIATE; PROVIDED, HOWEVER, THAT (I) DEKALB SHALL HAVE SOLE CONTROL OF SUCH DEFENSE, AND (II) MONSANTO SHALL PROVIDE NOTICE PROMPTLY TO DEKALB OF ANY ACTUAL OR THREATENED CLAIM OF WHICH MONSANTO BECOMES AWARE. (b) EXCEPT TO THE EXTENT CAUSED BY DEKALB'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, MONSANTO SHALL DEFEND AND INDEMNIFY DEKALB AGAINST, AND HOLD DEKALB AND ITS EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS HARMLESS FROM, ANY LOSS, COST, LIABILITY OR EXPENSE (INCLUDING COURT COSTS AND REASONABLE FEES OF ATTORNEYS AND OTHER PROFESSIONALS) INCURRED FROM ANY CLAIM ARISING OR ALLEGED TO ARISE OUT OF THE MANUFACTURE, USE, DISTRIBUTION OR -21- 22 SALE OF ANY LICENSED MONSANTO CORN PRODUCT BY MONSANTO OR ANY MONSANTO SUBLICENSEE, AFFILIATE OR INTERNATIONAL ASSOCIATE; PROVIDED, HOWEVER, THAT (I) MONSANTO SHALL HAVE SOLE CONTROL OF SUCH DEFENSE, AND (II) DEKALB SHALL PROVIDE NOTICE PROMPTLY TO MONSANTO OF ANY ACTUAL OR THREATENED CLAIM OF WHICH DEKALB BECOMES AWARE. 7.04 LIMITED LIABILITY: EXCEPT TO THE EXTENT PROVIDED FOR IN SUBSECTION 7.03 ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS, INTERRUPTION OF BUSINESS, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND SUFFERED BY SUCH OTHER PARTY FOR BREACH HEREOF, WHETHER BASED ON CONTRACT OR TORT CLAIMS OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS. SECTION 8 - TERM AND TERMINATION 8.01 TERM: (a) The term of this Agreement shall begin on the closing of the Investment Agreement between DEKALB and MONSANTO of even date ("Effective Date") and shall end upon expiration, revocation, abandonment or invalidation of the last-to-expire patent within the Licensed MONSANTO Patent Rights and the Licensed DEKALB Patent Rights, unless terminated sooner in accordance with this Section 8. Upon expiration, revocation, abandonment or invalidation of the last-to-expire U.S. patent within the Licensed MONSANTO Patent Rights or Licensed DEKALB Patent Rights, DEKALB and MONSANTO, and any of their Affiliates, International Associates and sublicensees, shall have a paid up license in all countries of the Territory except those countries where patents included within the Licensed MONSANTO Patent Rights or Licensed DEKALB Patent Rights shall then still be in effect. (b) In those countries of the Territory where Licensed MONSANTO Patent Rights or Licensed DEKALB Patent Rights extend beyond the term of the Licensed MONSANTO Patent Rights or Licensed DEKALB Patent Rights in the United States, DEKALB and MONSANTO, and any of their Affiliates, International Associates and sublicensees, shall have a paid-up license, on a country by country basis, upon expiration, revocation, abandonment or invalidation of such Licensed MONSANTO Patent Rights and Licensed DEKALB Patent Rights in the respective ex.-U.S. country. 8.02 TERMINATION OF AGREEMENT FOR BREACH: (a) Either party may terminate this Agreement upon at least sixty (60) days written notice to the other party should the other party commit a material breach of its -22- 23 obligations or be in material default under any of the provisions of this Agreement, provided that the other party has failed to cure the breach or default (or, if such breach or default cannot be cured within the sixty (60) day period, the other party has not taken reasonable steps to cure the breach or default) within the same sixty (60) day notice period. (b) Notwithstanding a party's right to terminate this Agreement as a result of a non-cured material breach by the other party, the non-breaching party shall not be prevented from seeking any other remedy which may be available to it in equity, including specific performance on the part of the party in breach. 8.03 INSOLVENCY: Either party may terminate this Agreement if, at any time: (a) the other party makes an assignment for the benefit of creditors or admits in writing its inability generally to pay or is generally not paying its debts as such debts become due; (b) any decree or order for relief is entered against the other party under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law; (c) the other party petitions or applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official, of such other party or any substantial part of its assets, or commences a voluntary case under the bankruptcy law of any jurisdiction; (d) any such petition or application is filed, or any such proceedings are commenced, against the other party and such other party by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order for relief, order, judgment or decree remains unstayed and in effect for more than sixty (60) days; or (e) any order, judgment or decree is entered in any proceedings against the other party decreeing the dissolution of such other party and such order, judgment or decree remains unstayed and in effect for more than sixty (60) days. -23- 24 8.04 EFFECTS OF TERMINATION/SURVIVAL: (a) Expiration or termination of this Agreement shall not relieve the parties of any obligation accruing prior to or upon such expiration or termination. Accordingly, Subsections 7.03 and 7.04 and Section 9 shall survive expiration or termination of this Agreement and neither party shall be relieved of any payment obligation that may have accrued prior to or subsequent to such expiration or termination. (b) Upon an early termination of this Agreement, DEKALB and its Affiliates and International Associates and sublicensees shall be entitled to sell remaining inventories of any Licensed DEKALB Corn Products which are already in its or their possession or then under production, and MONSANTO and its Affiliates and International Associates and sublicensees shall be entitled to sell remaining inventories of any Licensed MONSANTO Corn Products which are already in its or their possession or then under production. Such sales shall be in accordance with this Agreement, and the parties shall continue to be obligated to make all applicable payments hereunder. Thereafter (A) any remaining Licensed DEKALB Corn Products which are not intended to be sold, and all materials and information relating to or provided by MONSANTO, if any, shall be destroyed or shall be returned, respectively, and the destruction shall be certified to MONSANTO by a representative of DEKALB and (B) any remaining Licensed MONSANTO Corn Products which are not intended to be sold, and all materials and information relating to or provided by DEKALB, if any, shall be destroyed or shall be returned, respectively, and the destruction shall be certified to DEKALB by a representative of MONSANTO. SECTION 9 - CONFIDENTIALITY 9.01 CONFIDENTIAL INFORMATION: The parties have previously disclosed and it is anticipated that it will be necessary, in connection with their obligations under this Agreement, for DEKALB and MONSANTO to disclose to each other Confidential Information. The Confidential Information shall include, but shall not be limited to, information disclosed in writing or other tangible form, including samples of materials. 9.02 CONFIDENTIALITY AND LIMITED USE: (a) With respect to all Confidential Information, both DEKALB and MONSANTO agree as follows, it being understood that "recipient" indicates the party receiving the confidential, proprietary information from the other "disclosing" party. Confidential Information disclosed to the recipient shall remain the property of the disclosing party and shall be maintained in confidence by the recipient with the same care and diligence as the recipient maintains its own Confidential Information. Confidential Information shall not be disclosed to third parties by the recipient and, further, shall not be used except for purposes contemplated in this Agreement. All confidentiality and limited use obligations with respect to the Confidential -24- 25 Information shall terminate ten (10) years after the termination date of this Agreement. (b) Notwithstanding any provision to the contrary, a party may disclose the Confidential Information of the other party: (i) in connection with an order of a court or other government body or as otherwise required by or in compliance with law or regulations; provided that the party required to disclose provides the other party with notice and takes reasonable measures to obtain confidential treatment thereof; (ii) in confidence to recipient's attorneys, accountants, banks and financial sources and its advisors; or (iii) in confidence, in connection with the sale of substantially all the business assets to which this Agreement relates, so long as, in each case, the entity to which disclosure is made is bound to confidentiality on terms consistent with those set forth herein. (c) Notwithstanding any provision to the contrary, a party seeking to make a disclosure to an entity not bound to confidentiality on terms consistent with those set forth herein shall first provide to the other party a copy of the material proposed to be disclosed and shall obtain the consent of the other party before making the disclosure, which consent shall not be unreasonably withheld . 9.03 EXCEPTIONS: The obligations of confidentiality and limited use shall not apply to any of the Confidential Information which: (a) is publicly available by publication or other documented means or later becomes likewise publicly available through no act or fault of recipient; or (b) is already known to recipient before receipt from the disclosing party, as demonstrated by recipient's written records; or (c) is made known to recipient by a third party who did not obtain it directly or indirectly from the disclosing party and who does not obligate recipient to hold it in confidence; or (d) is independently developed by the recipient as evidenced by credible written research records of recipient's employees or agents who did not have access to the disclosing party's Confidential Information. Specific information should not be deemed to be within any of these exclusions merely because it is embraced by more general information falling within these exclusions. 9.04 DISCLOSURES TO PERSONNEL: Recipient agrees to advise those of its officers, directors, employees, associates, agents, consultants, Affiliates, and International Associates who become aware of the Confidential Information, of these confidentiality and limited use obligations and agrees, prior to any disclosure of Confidential Information to such individuals or entities, to make them bound by obligations of confidentiality and limited use of the same stringency as those contained in this Agreement. 9.05 RETURN OF CONFIDENTIAL INFORMATION: Upon termination of this -25- 26 Agreement, originals and copies of Confidential Information in written or other tangible form will be returned to the disclosing party by recipient or destroyed by recipient. One copy of each document may be retained in the custody of the recipient's legal counsel solely to provide a record of what disclosures were made. 9.06 CONFIDENTIAL STATUS OF AGREEMENT: The terms of this Agreement shall be deemed to be Confidential Information and shall be dealt with according to the confidentiality requirements of this Section 9. Neither party will make public disclosures concerning specific terms of this Agreement without obtaining the prior written consent of the other party, which consent shall not be unreasonably withheld and except as may be necessary, in the opinion of counsel of the party making such disclosure, to comply with the requirements of any stock exchange or over-the-counter market on which the shares of such party may be listed or of any law, governmental regulation or order. If a party determines that such a disclosure is necessary, it shall promptly notify the other party so that the other party can obtain confidential treatment of its Confidential Information. SECTION 10 - MISCELLANEOUS 10.01 NOTICES: Any notice or other communication required or permitted to be given by either party under this Agreement shall be given in writing and shall be effective when delivered, if delivered by hand or by electronic facsimile or five days after mailing if mailed by registered or certified mail, postage prepaid and return receipt requested, addressed to each party at the following addresses or such other address as may be designated by notice pursuant to this Subsection 10.01: If to MONSANTO: Monsanto Company 800 North Lindbergh Boulevard St. Louis, Missouri 63167 Attention: Robert T. Fraley, Ph.D. President, Ceregen Facsimile: (314) 694-7771 -26- 27 with a copy to: Monsanto Company 700 Chesterfield Pkwy North St. Louis, Missouri 63198 Attention: Patent Counsel, Ceregen Monsanto Company Mail Code BB4F Facsimile: (314) 537-6047 and to: Monsanto Company 700 Chesterfield Pkwy North St. Louis, Missouri 63198 Attention: William M. Ziegler Business Director, Corn and Soybeans Mail Code BB4D Facsimile: (314) 537-6047 If to DEKALB: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, Illinois 60115 Attention: Richard O. Ryan President and Chief Operating Officer Facsimile: (815) 758-3711 -27- 28 with a copy to: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, Illinois 60115 Attention: John H. Witmer, Jr. Senior Vice President and General Counsel Facsimile: (815) 758-6953 and to: DEKALB Genetics Corporation 62 Maritime Dr. Mystic, Conn. 06355 Attention: Catherine J. Mackey, Ph.D. Vice President, Research Facsimile: (860) 572-5241 10.02 PROVISIONS CONTRARY TO LAW: In performing this Agreement, the parties shall comply with all applicable laws and regulations. Nothing in this Agreement shall be construed so as to require the violation of any law, and wherever there is any conflict between any provision of this Agreement and any law the law shall prevail, but in such event the affected provision of this Agreement shall be affected only to the extent necessary to bring it within the applicable law. 10.03 FORCE MAJEURE: (a) Neither of the parties shall be liable for any default or delay in performance of any obligation under this Agreement caused by any of the following: Act of God, war, riot, fire, explosion, accident, flood, sabotage, compliance with governmental requests, laws, regulations, orders or actions, national defense requirements or any other event beyond the reasonable control of such party; or labor trouble, strike, lockout or injunction (provided that neither of the parties shall be required to settle a labor dispute against its own best judgment). (b) The party invoking this Subsection 10.03 shall give the other party written notice and full particulars of such force majeure event. (c) Both MONSANTO and DEKALB shall use reasonable efforts to mitigate the effects of any force majeure on their respective parts. -28- 29 10.04 RELATIONSHIP OF THE PARTIES: Notwithstanding any provision hereof, for all purposes of this Agreement each party shall be and act as an independent contractor and not as partner, joint venturer or agent of the other and shall not bind nor attempt to bind the other to any contract, without the prior written consent of the party to be bound. 10.05 USE OF NAMES: Unless otherwise required by the terms of this Agreement, neither party shall use the name of the other in any promotional materials or advertising without the prior written consent of the other. 10.06 ASSIGNABILITY AND CHANGE IN CONTROL: (a) The rights acquired herein by DEKALB are not assignable or transferable in whole or part (by operation of law or otherwise) to any third party without the prior written consent of MONSANTO, except as provided in Subsection 10.06(d). (b) The rights acquired herein by MONSANTO are not assignable or transferable in whole or part (by operation of law or otherwise) to any third party without the prior written consent of DEKALB, except as provided in Subsection 10.06(e). (c) Any transfer, assignment or delegation made or attempted in violation of this Subsection 10.06 shall be void ab initio and of no effect. (d) Upon any change in control of DEKALB (by acquisition, merger, consolidation or otherwise) resulting in, direct or indirect, ownership of the voting stock of DEKALB at a level of greater than 50% by a single entity or by two or more entities acting together or, control as a consequence of a shareholder agreement, joint venture agreement or other agreement, DEKALB may assign its rights hereunder to any such successor(s) in interest; Upon any such change in control, MONSANTO's payment obligation to DEKALB (or its successor in interest) shall be changed as follows: (i) Subsection 4.01(a) shall be modified so that the term [***] shall replace the term [***] (ii) Subsection 4.01(b) shall be modified so that the terms [***] and [***] shall replace the terms [***] and [***] respectively; and (iii) Subsection 4.02(b) shall be modified so that the term [***] shall replace the term [***]. This Subsection 10.06(d) shall not apply to any such change in control in which Monsanto becomes the controlling party. (e) Upon any change in control of MONSANTO (by acquisition, merger, consolidation or otherwise) resulting in, direct or indirect, ownership of the voting stock of MONSANTO at a level of greater than 50% by a single entity or by two or more entities acting -29- 30 together or, control as a consequence of a shareholder agreement, joint venture agreement or other agreement, MONSANTO may assign its rights hereunder to any such successor(s) in interest. Upon any such change in control, MONSANTO's payment obligation to DEKALB (or its successor in interest) shall be changed as follows: (i) Subsection 4.01(a) shall be modified so that the term [***] shall replace the term [***] (ii) Subsection 4.01(b) shall be modified so that the terms [***] and [***] shall replace the terms [***] and [***], respectively; and (iii) Subsection 4.02(b) shall be modified so that the term [***] shall replace the term [***]. 10.07 ENTIRE AGREEMENT; AMENDMENTS; WAIVER: This Agreement constitutes the full understanding of the parties, a complete allocation of risks between them and a complete and exclusive statement of the terms and conditions of their agreement relating to the subject matter hereof and supersedes any and all prior agreements, whether written or oral, that may exist between the parties with respect thereto. Except as otherwise specifically provided in this Agreement, no conditions, usage of trade, course of dealing or performance, understanding or agreement purporting to modify, vary, explain or supplement the terms or conditions of this Agreement shall be binding unless hereafter made in writing and signed by the party to be bound and no modification shall be effected by the acknowledgment or acceptance of documents containing terms or conditions at variance with or in addition to those set forth in this Agreement. No waiver by any party with respect to any breach or default or of any right or remedy and no course of dealing or performance, shall be deemed to constitute a continuing waiver of any other breach or default or of any right or remedy, unless such waiver be expressed in writing signed by the party to be bound. Failure of a party to exercise any right shall not be deemed a waiver of such right or rights in the future. 10.08 CHOICE OF LAW: IT IS THE INTENTION OF THE PARTIES HERETO THAT ALL QUESTIONS WITH RESPECT TO THE CONSTRUCTION OF THIS AGREEMENT AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO BUSINESS ARRANGEMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN THE STATE OF DELAWARE. -30- 31 10.09 EXPORT CONTROL: (a) Notwithstanding any other provisions of this Agreement, DEKALB agrees to make no disclosure or use of any MONSANTO Know-How or Confidential Information of MONSANTO furnished or made known to DEKALB pursuant to this Agreement, except in compliance with the laws and regulations of the United States of America, including the Export Administration Regulations promulgated by the Office of Export Administration International Trade Administration, United States Department of Commerce; and in particular, DEKALB agrees not to export, directly or indirectly, either (i) the technical data furnished or made known to DEKALB pursuant to this Agreement; or (ii) the "direct product" thereof; or (iii) any commodity produced using such technical data to any country or countries for which a validated license is required unless a validated license is first obtained pursuant to the Export Administration Regulations. The term "direct product" as used above, is defined to mean the immediate product (including process and services) produced directly by the use of the technical data. (b) Notwithstanding any other provisions of this Agreement, MONSANTO agrees to make no disclosure or use of any DEKALB Know-How or Confidential Information of DEKALB furnished or made known to MONSANTO pursuant to this Agreement, except in compliance with the laws and regulations of the United States of America, including the Export Administration Regulations promulgated by the Office of Export Administration International Trade Administration, United States Department of Commerce; and in particular, MONSANTO agrees not to export, directly or indirectly, either (i) the technical data furnished or made known to MONSANTO pursuant to this Agreement; or (ii) the "direct product" thereof; or (iii) any commodity produced using such technical data to any country or countries for which a validated license is required unless a validated license is first obtained pursuant to the Export Administration Regulations. The term "direct product" as used above, is defined to mean the immediate product (including process and services) produced directly by the use of the technical data. 10.10 MEET AND CONFER: It is the intention of the parties that in the event any dispute arises under this Agreement, the parties shall first meet and confer with one another to attempt to negotiate a resolution of such dispute without recourse to litigation. -31- 32 10.11 REMEDIES: Except as otherwise expressly stated in this Agreement, the rights and remedies of a party set forth herein with respect to failure of the other to comply with the terms of this Agreement (including, without limitation, rights of full termination of this Agreement) are not exclusive, the exercise thereof shall not constitute an election of remedies and the aggrieved party shall in all events be entitled to seek whatever additional remedies may be available in law or in equity. 10.12 FEES: Except as otherwise provided herein, each party shall bear its own legal fees incurred in connection with the transactions contemplated hereby, provided, however, that if any party to this Agreement seeks to enforce its rights under this Agreement by legal proceedings or otherwise, the non-prevailing party shall pay all costs and expenses incurred by the prevailing party, including, without limitation, all reasonable attorneys' fees. 10.13 HEADINGS: Headings herein are for convenience of reference only and shall in no way affect interpretation of this Agreement. 10.14 COUNTERPARTS: This Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. 10.15 ARBITRATION: Disputes arising out of Subsections 4.01 and 4.02 of this Agreement will be finally settled by arbitration conducted in accordance with the arbitration rules and guidelines outlined in attached Appendix C. The arbitration will be held in Chicago, Illinois as promptly as possible at such time as the arbitrator(s) may determine. The decision of the arbitrator(s) will be final and binding upon the parties hereto. -32- 33 10.16 APPENDICES: The appended Appendices and Exhibits form an integral part of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. MONSANTO COMPANY DEKALB GENETICS CORPORATION By: Robert T. Fraley By: Bruce P. Bickner -------------------------------------- ---------------------------- Robert T. Fraley Bruce P. Bickner Title: President, Ceregen Title: Chairman and CEO -33- EX-99.C.6 16 GLYPHOSATE AGREEMENT 1 CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. EACH SUCH OMISSION IS DESIGNATED [***]. GLYPHOSATE-PROTECTED CORN LICENSE AGREEMENT This Agreement (the "Agreement") is entered into on this 31st day of January, 1996 by and between Monsanto Company, and DEKALB Genetics Corporation regarding the non-exclusive, cross-license of certain patent rights and proprietary technology of Monsanto and of DEKALB for use in producing Glyphosate-protected corn plants. Based on the mutual consideration between the parties recited below, and in partial consideration for entering into the Investment Agreement of even date herewith, the parties agree and covenant as set forth below. SECTION 1 - BACKGROUND AND PARTIES 1.01 Monsanto Company ("MONSANTO") is a corporation of the State of Delaware with principal offices at 800 N. Lindbergh Boulevard, St. Louis, Missouri 63167. 1.02 DEKALB Genetics Corporation ("DEKALB") is a corporation of the State of Delaware with principal offices at 3100 Sycamore Road, DeKalb, Illinois 60115. 1.03 MONSANTO has certain rights relating to Genetic Element(s), Germplasm, Plasmid(s) and Gene(s), including technical information and Know-How relating to, among other things, transformed plants and seeds, useful for Glyphosate protection in corn plants and has rights in and to patents and/or patent applications covering the Genetic Element(s), Germplasm, Plasmid(s) and Gene(s) and their use. 1.04 DEKALB has certain rights relating to Genetic Element(s), Germplasm, Plasmid(s) and Gene(s), including technical information and Know-How relating to, among other things, transformed plants and seeds, useful for Glyphosate protection in corn plants and has rights in and to patents and/or patent applications covering the Genetic Element(s), Germplasm, Plasmid(s) and Gene(s) and their use. 1.05 DEKALB is interested in the commercialization of Glyphosate-protected corn and DEKALB seeks to obtain a limited license under MONSANTO's proprietary rights and MONSANTO desires to grant such license, all upon the terms and conditions provided herein. 1.06 MONSANTO is interested in obtaining a limited license under DEKALB's proprietary rights and DEKALB desires to grant such license, all upon the terms and conditions provided herein. 1.07 MONSANTO and DEKALB are each interested in entering into contractual arrangements in the Territory under which MONSANTO would license corn growers the right 2 to use Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products exhibiting such resistance to ROUNDUP(R) herbicide to produce a single corn crop in the Territory and DEKALB (or its dealers or distributors) would produce and sell Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products to corn growers licensed by MONSANTO to use such Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products. SECTION 2 - DEFINITIONS For purposes of this Agreement, the following words and phrases shall have the following meanings: 2.01 The term "Affiliate(s)," as used herein, means with respect to an entity, any person that is at least fifty percent (50%) owned by, or, directly or indirectly, is controlled by, under common control with or in control of, that entity. The term "control" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an entity whether through the ownership of securities, by contract or otherwise. 2.02 The term "person," as used herein, shall mean an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. 2.03 The term "DEKALB Germplasm," as used herein, means transgenic corn germplasm supplied to MONSANTO by DEKALB. 2.04 The term "MONSANTO Germplasm," as used herein, means transgenic corn germplasm supplied to DEKALB by MONSANTO. 2.05 The term "Commercial Tolerance" means tolerance under field conditions to [***] equivalent of Glyphosate acid which includes a [***]. The Licensed MONSANTO Corn Products and Licensed DEKALB Corn Products shall satisfy the criteria for Commercial Tolerance when plants sprayed at the above rates exhibit no significant differences in mean yield (at a 95% confidence level) from non-sprayed corn plants of the same line. 2.06 The term "Confidential Information," as used herein, means any proprietary information, including technical, economic, financial or marketing information, which either party considers confidential and which is disclosed to the other party. -2- 3 2.07 The term "Effective Date" is defined in Subsection 8.01 of this Agreement. 2.08 The term "Fiscal Year" shall mean a twelve-month period ending August 31st. 2.09 The term "MONSANTO Gene(s)," as used herein, shall mean DNA encoding a glyphosate tolerance protein or derivative thereof which is supplied to DEKALB by MONSANTO prior to or during the term of this Agreement, and derivatives or modifications thereof, which protein, upon expression in corn plants, results in protection against damage by Glyphosate. 2.10 The term "DEKALB Gene(s)," as used herein, shall mean DNA encoding a glyphosate tolerance protein or derivative thereof which is supplied to MONSANTO by DEKALB prior to or during the term of this Agreement, and derivatives or modifications thereof, which protein, upon expression in corn plants, results in protection against damage by Glyphosate. 2.11 The term "MONSANTO Genetic Element(s)," as used herein, means any DNA sequence or sequences including any DNA containing promoters, 5' non-translated regions, introns, 3' non-translated termination/polyadenylation regions and markers that are useful in expressing recombinant genes in corn, which is supplied to DEKALB by MONSANTO prior to or during the term of this Agreement, and replicates thereof, which are useful for the expression of Glyphosate tolerance proteins or are useful for the selection of transgenic plants from tissue culture. 2.12 The term "DEKALB Genetic Element(s)," as used herein, means any DNA sequence or sequences including any DNA containing promoters, 5' non-translated regions, introns, 3' non-translated termination/polyadenylation regions and markers that are useful in expressing recombinant genes in corn, which is supplied to MONSANTO by DEKALB prior to or during the term of this Agreement, and replicates thereof, which are useful for the expression of Glyphosate tolerance proteins or are useful for the selection of transgenic plants from tissue culture. 2.13 The term "Glyphosate" means any herbicidally effective form of N-phosphonomethylglycine, including any salt thereof. 2.14 The term "Hybrid Seed Corn," as used herein, means seed which a grower -3- 4 would plant to produce a single crop of commercial corn. 2.15 The term "Hybrid Seed Company," as used herein, means an entity, other than DEKALB and MONSANTO, whose primary seed corn business is selling Hybrid Seed Corn directly to growers. 2.16 The term "International Associate," as used herein, means any foreign-based person that has been licensed by DEKALB or MONSANTO to sell or otherwise distribute DEKALB- or MONSANTO-branded seed products. The International Associates of DEKALB and MONSANTO include, but are not limited to, those listed in Exhibits A and B, respectively. A third party shall not be considered to be an International Associate solely on the basis of the granting of a license pursuant to this Agreement. 2.17 The term "MONSANTO Know-How," as used herein, means any knowledge and proprietary information disclosed to DEKALB by MONSANTO prior to or during the term of this Agreement, which information is not generally publicly known, including, without limitation, all chemical, biochemical, toxicological, manufacturing, formulation, molecular and plant pathology, and scientific research information, whether or not capable of precise separate description but which alone or when accumulated gives to the one acquiring it an ability to develop and commercialize a product through study, testing, production, formulation or marketing which that party would otherwise not have been able to develop and commercialize in the same manner. 2.18 The term "DEKALB Know-How," as used herein, means any knowledge and proprietary information disclosed to MONSANTO by DEKALB prior to or during the term of the Agreement, which information is not generally publicly known, including, without limitation, all chemical, biochemical, toxicological, manufacturing, formulation, molecular and plant pathology, and scientific research information, whether or not capable of precise separate description but which alone or when accumulated gives to the one acquiring it an ability to develop and commercialize a product through study, testing, production, formulation or marketing which that party would otherwise not have been able to develop and commercialize in the same manner. 2.19 The term "Licensed Field," as used herein, means transgenic corn (including sweet corn) which exhibits Commercial Tolerance against Glyphosate by expression of one or more Glyphosate tolerance protein(s). The term "Licensed Field" shall [***]. -4- 5 2.20 The term "Licensed MONSANTO Method" shall mean any method the use or practice of which would, in the absence of a license, infringe one or more Valid MONSANTO Claims of an unexpired patent included in the Licensed MONSANTO Patent Rights or which involves the use of MONSANTO Know-How or Licensed MONSANTO Non-Patent Proprietary Materials. 2.21 The term "Licensed DEKALB Method" shall mean any method the use or practice of which would, in the absence of a license, infringe one or more Valid DEKALB Claims of an unexpired patent included in the Licensed DEKALB Patent Rights or which involves the use of DEKALB Know-How or Licensed DEKALB Non-Patent Proprietary Materials. 2.22 The term "Licensed MONSANTO Non-Patent Proprietary Materials," as used herein, means all MONSANTO Genetic Element(s), MONSANTO Germplasm, MONSANTO Plasmid(s) and MONSANTO Gene(s). 2.23 The term "Licensed DEKALB Non-Patent Proprietary Materials," as used herein, means all DEKALB Genetic Element(s), DEKALB Germplasm, DEKALB Plasmid(s) and DEKALB Gene(s). 2.24 The term "Licensed MONSANTO Patent Rights," shall mean all patent licenses and sublicenses for use in the Licensed Field to which MONSANTO and/or a wholly-owned Affiliate of MONSANTO is a licensee or sublicensee (to the extent allowed by such licenses or sublicenses) and all patents and patent applications within the Licensed Field, including but not limited to those listed in Appendix A-M for use in the Licensed Field and owned by MONSANTO and/or a wholly-owned Affiliate of MONSANTO, filed prior to or during the term of this Agreement, and any and all patents maturing from these applications or maturing from applications that are divisionals, continuations or continuations-in-part of these applications, foreign (i.e., ex-U.S.) equivalents of the foregoing and any and all reissues or extensions of any of the foregoing. 2.25 The term "Licensed DEKALB Patent Rights," shall mean all patent licenses and sublicenses for use in the Licensed Field to which DEKALB and/or a wholly-owned Affiliate of DEKALB is a licensee or sublicensee (to the extent allowed by such licenses or sublicenses) and all patents and patent applications within the Licensed Field, including but not limited to those listed in Appendix A-D for use in the Licensed Field and owned by DEKALB and/or a wholly-owned Affiliate of DEKALB, filed prior to or during the term of this Agreement, and any and all patents maturing from these applications or maturing from -5- 6 applications that are divisionals, continuations or continuations-in-part of these applications, foreign (i.e., ex-U.S.) equivalents of the foregoing and any and all reissues or extensions of any of the foregoing. 2.26 The term "Licensed DEKALB Corn Product(s)" shall mean corn material including, but not limited to, cells, plants, or seeds and products thereof, which is produced by a Licensed MONSANTO Method or which, in the course of its manufacture, use, or sale would, in the absence of a license, infringe a Valid MONSANTO Claim or the production of which involves the use of MONSANTO Know-How or Licensed MONSANTO Non-Patent Proprietary Materials, all in the Licensed Field. 2.27 The term "Licensed MONSANTO Corn Product(s)" shall mean corn material including, but not limited to, cells, plants, or seeds and products thereof, which is produced by a Licensed DEKALB Method or which, in the course of its manufacture, use, or sale would, in the absence of a license, infringe a Valid DEKALB Claim or the production of which involves the use of DEKALB Know-How or Licensed DEKALB Non- Patent Proprietary Materials, all in the Licensed Field. 2.28 The term "MONSANTO Plasmid(s)," as used herein, means a transformation vector(s) which is supplied to DEKALB by MONSANTO prior to or during the term of this Agreement. 2.29 The term "DEKALB Plasmid(s)," as used herein, means a transformation vector(s) which is supplied to MONSANTO by DEKALB prior to or during the term of this Agreement. 2.30 The term "MONSANTO ROUNDUP READY(R) Gene Agreement" means the agreement between MONSANTO and the grower substantially in the form of the agreement attached hereto as Appendix D. 2.31 The term "MONSANTO ROUNDUP READY(R) Gene Agreement Fee" means the per Unit fee charged to the corn grower under the terms of the MONSANTO ROUNDUP READY(R) Gene Agreement [***]. 2.32 The term "MONSANTO ROUNDUP READY(R) Gene Agreement Revenue" means the total amount of MONSANTO ROUNDUP READY(R) Gene Agreement Fees received from licenses to corn growers for use of Licensed DEKALB Corn Products or Licensed -6- 7 MONSANTO Corn Products during the applicable Fiscal Year, less the applicable Seed Service Fees [***]. 2.33 The term "ROUNDUP(R) Herbicide" means any Glyphosate formulation sold by MONSANTO that is registered for use on corn and includes the ROUNDUP(R) herbicide brand name or any other brand name designated by MONSANTO to DEKALB in writing from time to time. 2.34 The term "ROUNDUP READY(R) Trademark Agreement" means the agreement between MONSANTO and DEKALB for use of the ROUNDUP READY(R) trademark attached hereto as Exhibit C. 2.35 The term "Seed Services Fee," as used herein, means a fee paid for collecting the MONSANTO ROUNDUP READY(R) Gene Agreement Fee from growers. 2.36 The term "Territory," as used herein, means the world. 2.37 The term "Unit(s)," as used herein, means a quantity of approximately Eighty Thousand (80,000) kernels. 2.38 The term "Valid DEKALB Claim," as used herein, means an issued claim of the Licensed DEKALB Patent Rights which has not been finally held invalid or unenforceable by a decision of a court or other authority of competent jurisdiction which is not appealable. 2.39 The term "Valid MONSANTO Claim," as used herein, means an issued claim of the Licensed MONSANTO Patent Rights which has not been finally held invalid or unenforceable by a decision of a court or other authority of competent jurisdiction which is not appealable. 2.40 The term "-branded," when used in conjunction with an entity's name, means a trademark or logo of that entity, whether registered or not, affixed to a product or product container, or used in advertising, promotion or other marketing of such a product. 2.41 The term "Net Units," as used herein, means the number of Units sold of -7- 8 all Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products in arm's length sales to third parties after deduction of credits or allowances given or made for rejection or return of previously sold Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products. Where the product is covered under the present Agreement and under licenses that evolve from the Collaboration Agreement and License, the CaMV Promoter License Agreement or the Corn Borer-Protected Corn License Agreement, all three of even date herewith, "Net Units" must be calculated separately for each Agreement. The use by DEKALB or Affiliates, International Associates or sublicensees of DEKALB or MONSANTO of commercially reasonable amounts of Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products for promotional sampling or replant shall not be included in Net Units. SECTION 3 - CONVEYANCE OF RIGHTS 3.01 LICENSE GRANT BY MONSANTO: (a) Subject to the terms and conditions of this Agreement, MONSANTO hereby grants to DEKALB a royalty-bearing, non-exclusive, license under the Licensed MONSANTO Patent Rights, MONSANTO Know-How, Licensed MONSANTO Method and Licensed MONSANTO Non-patent Proprietary Materials, (1) to make, have made, and use Licensed DEKALB Corn Products in the Territory, (2) to sell DEKALB-branded Licensed DEKALB Corn Products in the Territory to corn growers who have entered into the MONSANTO ROUNDUP READY(R) Gene Agreement, (3) to sublicense DEKALB's Affiliates and International Associates to make, have made, use and sell Licensed DEKALB Corn Products in the Territory to corn growers who have entered into the MONSANTO ROUNDUP READY(R) Gene Agreement, and [***]. No sublicensee hereunder shall have the right to further sublicense any rights hereunder. (b) The sale and/or transfer of Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products to a corn grower shall require execution by the corn grower of the MONSANTO ROUNDUP READY(R) Gene Agreement and payment of the MONSANTO ROUNDUP READY(R) Gene Agreement Fee by such grower. (c) In the event that MONSANTO [***]. MONSANTO shall, upon DEKALB's request, amend this Agreement and [***] -8- 9 [***] MONSANTO shall promptly notify DEKALB [***]. 3.02 DISTRIBUTION OF LICENSED DEKALB CORN PRODUCTS AND LICENSED MONSANTO CORN PRODUCTS: Except as otherwise provided in [***] with respect to the sales of Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products hereunder in the Territory, DEKALB and its Affiliates and International Associates shall only be permitted to sell and distribute DEKALB-branded Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products. 3.03 MARKING OF LICENSED DEKALB CORN PRODUCTS AND LICENSED MONSANTO CORN PRODUCTS: (a) DEKALB and its Affiliates and International Associates and sublicensees shall conspicuously display on all packages containing Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products to be sold or transferred to permitted third-party growers or customers, the following notice (tailored to reflect the nature of the conveyance), or a notice having the same meaning and effect, with the blanks appropriately filled in to the extent such notice is applicable in the respective area: THESE SEEDS ARE COVERED UNDER U.S. PATENTS ________________, ______________, _____________ AND ______________________. THE PURCHASE OF THESE SEEDS CONVEYS NO LICENSE UNDER SAID PATENTS TO USE THESE SEEDS. A LICENSE MUST FIRST BE OBTAINED FROM MONSANTO COMPANY BEFORE THESE SEEDS CAN BE USED IN ANY WAY. (b) Where transactions occur in countries whose primary language is not English, a translation of the notice in the appropriate language shall be used if appropriate or required by law. -9- 10 3.04 TRADEMARK USAGE: (a) It is agreed that a trademark owned by MONSANTO relating to a Licensed DEKALB Corn Product in the Licensed Field shall be licensed to DEKALB, its Affiliates and International Associates and sublicensees on a non-exclusive basis pursuant to a trademark license agreement. The form of the trademark license agreement is attached hereto as Appendix B-M. The parties shall execute said license agreement when MONSANTO identifies the trademark which will be utilized. DEKALB and its Affiliates, International Associates and sublicensees shall conspicuously display said trademark on all seed packages of Licensed DEKALB Corn Products as well as on all promotional and advertising material for such Licensed DEKALB Corn Products in the manner specified in the trademark license agreement. (b) In the event that MONSANTO should terminate such trademark agreement without cause, the obligation of DEKALB and its Affiliates and International Associates and sublicensees to display said trademark pursuant to Subsection 3.04(a) shall be waived. 3.05 NO OTHER LICENSES: (a) No license is granted by this Agreement under the Licensed MONSANTO Patent Rights or any other patent right by implication or otherwise to make, have made, use or sell, directly or by sublicense, Licensed DEKALB Corn Products for any use outside the Licensed Field. (b) DEKALB shall not be licensed to commercialize a variety of Licensed DEKALB Corn Product or Licensed MONSANTO Corn Product [***]. 3.06 MONSANTO TO LICENSE GROWERS: MONSANTO shall directly license corn growers under the Licensed MONSANTO Patent Rights and Licensed DEKALB Patent Rights to use the Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products. The form of the MONSANTO ROUNDUP READY(R) Gene Agreement shall be used as agreed in and shall be substantially as set forth in Appendix D. The MONSANTO ROUNDUP READY(R) Gene Agreement Fee charged by MONSANTO, and the amount of the MONSANTO ROUNDUP READY(R) Gene Agreement Revenue, [***] -10- 11 [***] Whether the MONSANTO ROUNDUP READY(R) Gene Agreement Fee and the MONSANTO ROUNDUP READY(R) Gene Agreement Revenue reasonably reflects the foregoing value [***]. The MONSANTO ROUNDUP READY(R) Gene Agreement Fee charged to any customers of MONSANTO or of any Affiliate, International Associate or sublicensee of MONSANTO, shall be no less than that charged to the customers of DEKALB and customers of its Affiliates, International Associates and sublicensees hereunder. 3.07 DEKALB'S OBLIGATIONS: (a) Subject to Subsections 3.01(c) and 4.03, DEKALB and its Affiliates, International Associates and sublicensees shall require in its agreements with dealers and distributors, by addendum to existing agreements and inclusion in future agreements, that its dealers and distributors have growers/purchasers of the Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products execute the MONSANTO ROUNDUP READY(R) Gene Agreement, and DEKALB shall make all reasonable efforts to have each of its dealers and distributors comply with such requirements. The MONSANTO ROUNDUP READY(R) Gene Agreement shall be executed in quadruplicate. Each dealer or distributor shall retain a copy of the MONSANTO ROUNDUP READY(R) Gene Agreement, provide a copy to the grower (or the grower's authorized representative) and shall forward the others to: Signed original: [neutral third party] __________________________________________ __________________________________________ __________________________________________ Copy of the signed original with a DEKALB Genetics Corporation copy of the invoice to: 3100 Sycamore Road DeKalb, Illinois 60115 Attention: Richard O. Ryan President and Chief Operating Officer (b) Subject to Subsection 3.01(c), DEKALB and its Affiliates, -11- 12 International Associates and sublicensees shall obligate each dealer and distributor to invoice the grower for the MONSANTO ROUNDUP READY(R) Gene Agreement Fee at the time of sale of the Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products. Each dealer and distributor shall also be obligated to remit the MONSANTO ROUNDUP READY(R) Gene Agreement Fees collected to DEKALB and its Affiliates, International Associates and sublicensees. (c) DEKALB and its Affiliates, International Associates and sublicensees shall make efforts, consistent with its normal credit and collection policies and procedures, to collect such fees. Any amounts collected by DEKALB and its Affiliates, International Associates and sublicensees from its dealers and distributors which include MONSANTO ROUNDUP READY(R) Gene Agreement Fees due to MONSANTO shall be distributed between DEKALB and MONSANTO on a pro rata basis taking into consideration the relative total amounts due to both DEKALB and MONSANTO for the overall transaction. (d) Except to the extent provided for in Subsection 3.07(c), if DEKALB or any of its Affiliates, International Associates and sublicensees are unable to collect the past due MONSANTO ROUNDUP READY(R) Gene Agreement Fees from its dealers and distributors, DEKALB or any of its Affiliates, International Associates and sublicensees shall not be liable to MONSANTO for such delinquent accounts. MONSANTO shall be permitted to independently pursue collection of such past due MONSANTO ROUNDUP READY(R) Gene Agreement Fees at its sole discretion. (e) In the event that a dealer or distributor of Licensed DEKALB Corn Product or Licensed MONSANTO Corn Product breaches the obligation of Subsection 3.07(a) or 3.07(b) and the involved dealer or distributor does not cure such breach within a reasonable time, DEKALB and its Affiliates, International Associates and sublicensees, shall, at its election, either terminate its agreement with such dealer or distributor or modify such agreement so that the involved dealer or distributor is no longer involved in the sale of Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products. (f) Breach of the requirements of Subsection 3.07(a) or 3.07(b) by dealers or distributors of Licensed DEKALB Corn Product or Licensed MONSANTO Corn Product shall not be considered a breach of this Agreement by DEKALB unless DEKALB encourages its dealers, distributors, Affiliates, International Associates or sublicensees to breach such obligations. 3.08 MONSANTO'S OBLIGATIONS: (a) MONSANTO shall obligate the neutral third party in its services agreement to (i) hold all information in confidence, except as authorized to release pursuant to this Agreement, and (ii) provide the involved licensees written notice of any release of the -12- 13 MONSANTO ROUNDUP READY(R) Gene Agreement for the applicable grower pursuant to Subsection 3.08(c). (b) The neutral third party shall be authorized to disclose to MONSANTO [***]. (c) In the event that MONSANTO reasonably suspects, based on credible evidence, that a licensed grower has breached the terms of the MONSANTO ROUNDUP READY(R) Gene Agreement, the neutral third party shall be authorized, upon written request by MONSANTO and upon the consent of DEKALB, which shall not be withheld upon disclosure of credible evidence by MONSANTO or otherwise unreasonably withheld, to release the original signed MONSANTO ROUNDUP READY(R) Gene Agreements to MONSANTO. (d) MONSANTO shall impose on all Affiliates, International Associates and Hybrid Seed Companies sublicensed hereunder obligations consistent with the obligations imposed on DEKALB in Subsection 3.07. 3.09 OTHER HERBICIDES: (a) If DEKALB and/or its Affiliates or International Associates uses any Glyphosate containing herbicide or any other EPSP synthase inhibitor containing herbicide in connection with the corn crop produced from Licensed DEKALB Corn Product, the herbicide will be a ROUNDUP(R) branded herbicide labeled for use on ROUNDUP READY(R) corn (or other MONSANTO authorized glyphosate-containing herbicide). No other Glyphosate containing herbicide may be used with this patent-protected seed. This provision shall not limit the use of herbicide other than Glyphosate on such germplasm. (b) The only Glyphosate or other EPSP synthase inhibitor herbicide that DEKALB shall promote for use on Licensed DEKALB Corn Product or Licensed MONSANTO Corn Products shall be ROUNDUP(R) Herbicide; provided, however that DEKALB and its Affiliates, International Associates and sublicensees shall not be obligated to undertake any advertising of ROUNDUP(R) Herbicide. 3.10 LICENSE GRANT BY DEKALB: Subject to the terms and conditions of this Agreement, DEKALB hereby grants to MONSANTO a royalty-bearing, non-exclusive, license under the Licensed DEKALB Patent Rights, DEKALB Know-How, Licensed DEKALB Methods and Licensed DEKALB Non-patent Proprietary Materials, (a) to make, have made, and use Licensed MONSANTO Corn Products in the Territory, and (b) to sublicense Hybrid Seed Companies and MONSANTO's Affiliates and International Associates to make, have made, use and sell Licensed MONSANTO Corn Products in the Territory. No sublicensee hereunder shall have the right to further sublicense any rights hereunder. 3.11 MARKING OF LICENSED MONSANTO CORN PRODUCTS: -13- 14 (a) MONSANTO and its Affiliates, International Associates, and sublicensees shall conspicuously display on all packages containing Licensed MONSANTO Corn Products and Licensed DEKALB Corn Products to be sold or transferred to permitted third-party growers or customers, the following notice (tailored to reflect the nature of the conveyance), or a notice having the same meaning and effect, with the blanks appropriately filled in to the extent such notice is applicable in the respective area: THESE SEEDS ARE COVERED UNDER U.S. PATENTS ________________, ______________, _____________ AND ______________________. THE PURCHASE OF THESE SEEDS CONVEYS NO LICENSE UNDER SAID PATENTS TO USE THESE SEEDS. A LICENSE MUST FIRST BE OBTAINED FROM MONSANTO COMPANY BEFORE THESE SEEDS CAN BE USED IN ANY WAY. (b) Where transactions occur in countries whose primary language is not English, a translation of the notice in the appropriate language shall be used if appropriate or required by law. 3.12 NO OTHER LICENSES: No license is granted by this Agreement under the Licensed DEKALB Patent Rights or any other patent right by implication or otherwise to make, have made, use or sell, directly or by sublicense, any Licensed MONSANTO Corn Product for any use outside the Licensed Field. 3.13 NO RIGHTS REGARDING PROPRIETARY GERMPLASM: Notwithstanding anything in this Agreement to the contrary, no rights in proprietary corn inbreds or hybrids of either party are granted the other under this Agreement. 3.14 FUTURE ACCESS: During the term of this Agreement, [***] shall have the right to [***] within the Licensed Field, either internally or with any third party, such that results of that [***] and rights flowing from that research, will not be subject to the grants under [***] of this Agreement. SECTION 4 - PAYMENTS, REPORTS AND RECORD RETENTION 4.01 AMOUNT PAYABLE BY DEKALB: In consideration for the license rights granted by MONSANTO hereunder, DEKALB shall remit to MONSANTO the MONSANTO ROUNDUP READY(R) Gene Agreement Revenue owed to MONSANTO, if any, when calculated in accordance with the provisions contained in Subsection 4.08(a). -14- 15 4.02 AMOUNT PAYABLE BY MONSANTO: (a) In consideration for selling Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products to corn growers licensed by MONSANTO to purchase and use such seed, DEKALB and its Affiliates and International Associates and sublicensees shall be permitted to retain a Seed Services Fee. (b) The parties agree that the Seed Services Fee cannot be established as of the Effective Date of this Agreement. Therefore, the parties further agree that the Seed Services Fee shall be established by good faith negotiations between the parties. If despite such good faith negotiations, the parties cannot reach agreement on the terms of the Seed Services Fee, then determination of the Seed Services Fee shall be submitted to arbitration pursuant to the provisions of Subsection 10.15, if requested by either MONSANTO or DEKALB. (c) In partial consideration for the license rights granted by DEKALB hereunder, until the obligation of MONSANTO to pay royalties to DEKALB expires, MONSANTO shall pay to DEKALB [***] of the MONSANTO ROUNDUP READY(R) Gene Agreement Revenue paid to MONSANTO by DEKALB and by any third party sublicensed under Licensed DEKALB Patent Rights or Licensed MONSANTO Patent Rights; and (ii) [***] Unit sold by DEKALB or any DEKALB or MONSANTO Affiliate and International Associate and sublicensee hereunder. 4.03 [***] On a country-by-country basis, in the event MONSANTO grants licenses to any third parties for use within the Licensed Field [***] DEKALB and its Affiliates, International Associates and sublicensees shall be relieved of all of their obligations under this Agreement that are related to the use of the [***]. 4.04 [SUBSECTION NOT USED] -15- 16 4.05 FIRST COMMERCIAL SALE IN A COUNTRY: (a) The parties shall promptly advise one another in writing of the first commercial sales of Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products in each country of the Territory. (b) At the time such first commercial sale is reported pursuant to Subsection 4.05(a), the reporting party shall briefly describe the relationship between the party and the entity making the first commercial sale. 4.06 SUBLICENSE; NOTICE: The parties shall promptly advise one another in writing of each sublicense of Licensed MONSANTO Corn Products or Licensed DEKALB Corn Products. 4.07 REPORTS: (a) Within sixty (60) days after the end of each Fiscal Year, DEKALB shall provide MONSANTO with a written report of the Net Units of Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products sold by DEKALB and its Affiliates and International Associates and sublicensees during such Fiscal Year and the MONSANTO ROUNDUP READY(R) Gene Agreement Revenue received on licenses of Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products in the Licensed Field in the Territory under the Licensed DEKALB Patent Rights and Licensed MONSANTO Patent Rights. The report shall contain the determination of payments due MONSANTO based on such MONSANTO ROUNDUP READY(R) Gene Agreement Revenue or Net Units, as the case may be. (b) Within sixty (60) days after the end of each Fiscal Year, MONSANTO shall provide DEKALB with a written report of the Net Units of Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products sold by MONSANTO and its Affiliates and International Associates and sublicensees during such Fiscal Year and the MONSANTO ROUNDUP READY(R) Gene Agreement Revenue received on licenses of Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products granted by MONSANTO in the Licensed Field in the Territory under the Licensed DEKALB Patent Rights or Licensed MONSANTO Patent Rights. The report shall contain the determination of payments due DEKALB based on such MONSANTO ROUNDUP READY(R) Gene Agreement Revenue or Net Units, as may be the case. -16- 17 4.08 PAYMENTS: (a) After receipt of the reports pursuant to Subsection 4.07, each party shall offset amounts due from the other party against amounts due to the other party. Within ten (10) days after submission of the reports, the party having the duty to pay amounts remaining after the offset shall promptly make the payment then due. Payments shall be in United States dollars. Payments due on sales for Licensed MONSANTO Corn Products and Licensed DEKALB Corn Products sold outside the United States or on sublicenses granted outside the United States shall first be calculated in the foreign currency and then converted to United States dollars on the basis of the rate of exchange in effect for purchase of dollars at Chase Manhattan Bank, New York, New York, on the last business day of the period for which royalties are due. Payments shall be without set off and free and clear of any taxes, duties, fees or charges other than withholding taxes, if any. (b) Each payment to MONSANTO hereunder shall be sent to: (i) MONSANTO's account by wire transfer: [***] with a written notice of such wire transfer, or (ii) to another account in the United States which MONSANTO may subsequently designate from time to time by notice to DEKALB. (c) Each payment to DEKALB hereunder shall be sent to: (i) DEKALB's account by wire transfer: [***] with a written notice of such wire transfer, or (ii) to another account in the United States which DEKALB may subsequently designate from time to time by notice to MONSANTO. 4.09 RECORDS RETENTION: (a) DEKALB agrees to keep, and shall cause its Affiliates and International Associates and sublicensees to keep, records showing the MONSANTO ROUNDUP READY(R) Gene Agreement Revenue received and the amount of Licensed DEKALB Corn Products and Licensed MONSANTO Corn Products sold or otherwise transferred to third parties in sufficient detail to permit MONSANTO to confirm the accuracy of DEKALB's calculations and payment. MONSANTO agrees to keep, and shall cause its Affiliates and International -17- 18 Associates and sublicensees to keep, records showing the MONSANTO ROUNDUP READY(R) Gene Agreement Revenue received and the amount of Licensed MONSANTO Corn Product and Licensed DEKALB Corn Product sold or otherwise transferred to third parties in sufficient detail to permit DEKALB to confirm the accuracy of MONSANTO's royalty calculations and payment. At either party's request, the other party shall permit an independent accountant appointed by the requesting party and reasonably acceptable to the other party to examine, not more often than once during any Fiscal Year and under appropriate confidentiality provisions, upon reasonable notice of at least ten (10) days and at reasonable times and in a manner that does not interfere unreasonably with the other party's business, such records solely to the extent necessary to verify the other party's calculations. Such records shall be kept and examination thereof shall be limited to a period of time no more than three (3) Fiscal Years immediately preceding the request for examination. (b) The audit of the other party's records shall be at the requesting party's expense, provided that, if a net aggregate discrepancy of more than ten percent (10%) is found in favor of the other party, then the other party shall be obligated to reimburse the requesting party for the cost of the audit. 4.10 LATE PAYMENT: Notwithstanding any other remedy available under the provisions of this Agreement, if any sum of money owed hereunder is not paid when due, the unpaid amount shall bear interest compounded quarterly, at an annual rate of one (1) percentage point above the prime rate quoted by Morgan Guaranty Trust Company of New York on the day payment was due, until paid. 4.11 [***] MONSANTO ROUNDUP READY(R) GENE AGREEMENT FEE: DEKALB shall have the option, to the extent it feels that the MONSANTO ROUNDUP READY(R) Gene Agreement Fee or other payments due hereunder [***] Licensed MONSANTO Corn Products or Licensed DEKALB Corn Products to the grower, of requesting a formal discussion with MONSANTO in accordance with [***] If the parties fail to reach agreement after such discussion, DEKALB shall have the [***] 4.12 EFFECT OF TERMINATION OF THE INVESTMENT AGREEMENT: (a) Upon termination of the Investment Agreement between MONSANTO and DEKALB of even date hereof before the termination of the Collaboration Agreement and License between MONSANTO and DEKALB of even date hereof, because of (1) the issuance -18- 19 by any governmental authority of any order or decree requiring MONSANTO to terminate the Investment Agreement, which order or decree resulted from MONSANTO's voluntary action, or (2) the termination of the Investment Agreement by MONSANTO other than for Cause, as defined in the Investment Agreement in Subsection 9.1.6, then (i) Subsection 4.02(c) shall be modified so that the term [***] shall replace the term [***] and the term [***] shall replace the term [***] and (ii) Subsection 4.03 shall be amended to provide that DEKALB shall receive [***] of the royalties and MONSANTO shall receive [***] of the royalties paid, if any. (b) Upon termination of the Investment Agreement between MONSANTO and DEKALB of even date hereof before the termination of the Collaboration Agreement and License between DEKALB and MONSANTO of even date hereof because of the issuance by any governmental authority of any order or decree requiring DEKALB to terminate the Investment Agreement, which order or decree resulted from DEKALB's voluntary action, (i) Subsection 4.02(c) shall be modified so that the term [***] shall replace the term [***] and the term [***] shall replace the term [***] and (ii) Subsection 4.03 shall be amended to provide that MONSANTO shall receive [***] of the royalties and DEKALB shall receive [***] of the royalties paid, if any. 4.13 MOST FAVORED LICENSEE STATUS: (a) If MONSANTO has granted or subsequently grants a license under the Licensed Patent Rights to a third party having terms which considered as a whole are more favorable to the licensee than the terms granted to DEKALB considered as a whole, then MONSANTO shall promptly advise DEKALB as to such more favorable terms. DEKALB shall, at its election, be entitled upon notice to MONSANTO to have this Agreement amended to substitute such third-party terms for the terms of this Agreement as of the date upon which such license containing the more favorable terms shall have become effective; provided however that, DEKALB also agrees to have the Agreement amended to contain any additional obligations that are recited in such license containing the more favorable terms. (b) In the event MONSANTO shall at any time while this Agreement is in effect be compelled by applicable law to issue licenses under the Licensed Patent Rights in the Licensed Field to any other person with royalty terms more favorable than those granted to DEKALB hereunder, MONSANTO shall inform DEKALB of the order compelling any such licenses and shall offer the royalties only with respect to the country or countries wherein such compulsory licenses have been ordered so that the new royalty terms shall be no less favorable to DEKALB than those granted to any third party under any such compulsory license. (c) Nothing in this Subsection shall entitle DEKALB to any retroactive adjustment, reduction in royalty, or other relief from any of the provisions of this Agreement merely because MONSANTO shall commence proceedings against a third party who shall -19- 20 infringe the Licensed Patent Rights, which proceedings shall be resolved by the third party becoming licensed under the Licensed Patent Rights, so long as such subsequent license agreement shall, at least prospectively, impose upon such third party terms as to royalty no more favorable than the royalty terms imposed upon DEKALB under this Agreement. (d) If DEKALB has granted or subsequently grants a license under the Licensed Patent Rights to a third party having terms which considered as a whole are more favorable to the licensee than the terms granted to MONSANTO considered as a whole, then DEKALB shall promptly advise MONSANTO as to such more favorable terms. MONSANTO shall, at its election, be entitled upon notice to DEKALB to have this Agreement amended to substitute such third-party terms for the terms of this Agreement as of the date upon which such license containing the more favorable terms shall have become effective; provided however that, MONSANTO also agrees to have the Agreement amended to contain any additional obligations that are recited in such license containing the more favorable terms. (e) In the event DEKALB shall at any time while this Agreement is in effect be compelled by applicable law to issue licenses under the Licensed Patent Rights in the Licensed Field to any other person with royalty terms more favorable than those granted to MONSANTO hereunder, DEKALB shall inform MONSANTO of the order compelling any such licenses and shall offer the royalties only with respect to the country or countries wherein such compulsory licenses have been ordered so that the new royalty terms shall be no less favorable to MONSANTO than those granted to any third party under any such compulsory license. (f) Nothing in this Subsection shall entitle MONSANTO to any retroactive adjustment, reduction in royalty, or other relief from any of the provisions of this Agreement merely because DEKALB shall commence proceedings against a third party who shall infringe the Licensed Patent Rights, which proceedings shall be resolved by the third party becoming licensed under the Licensed Patent Rights, so long as such subsequent license agreement shall, at least prospectively, impose upon such third party terms as to royalty no more favorable than the royalty terms imposed upon MONSANTO under this Agreement. SECTION 5 - REGULATORY APPROVAL AND PRODUCT REGISTRATION 5.01 REGULATORY APPROVALS: This Agreement does not obligate either party to undertake any regulatory approvals or product registrations. Each party shall bear its own cost of undertaking such approvals or registrations it seeks. 5.02 REQUEST FOR INFORMATION BY DEKALB: Subject to the provisions of Subsection 5.01, MONSANTO shall, at the reasonable request of DEKALB, provide assistance to DEKALB in seeking such regulatory approvals and/or product registrations, including data, -20- 21 studies and any applicable regulatory filings which MONSANTO may have in its possession; provided, however, that MONSANTO shall not be obligated to conduct any new experiments or other work with respect to any such request by DEKALB. 5.03 REQUEST FOR INFORMATION BY MONSANTO: Subject to the provisions of Subsection 5.01, DEKALB shall, at the reasonable request of MONSANTO, provide assistance to MONSANTO in seeking such regulatory approvals and/or product registrations, including data, studies and any applicable regulatory filings which DEKALB may have in its possession; provided, however, that DEKALB shall not be obligated to conduct any new experiments or other work with respect to any such request by MONSANTO. SECTION 6 - PATENT PROCUREMENT, ENFORCEMENT AND INFRINGEMENT 6.01 PATENT PROCUREMENT: MONSANTO shall have the exclusive right to apply for, and seek issuance of, maintain or abandon any or all of the Licensed MONSANTO Patent Rights. DEKALB shall have the exclusive right to apply for, and seek issuance of, maintain or abandon any or all of the Licensed DEKALB Patent Rights. 6.02 PATENT ENFORCEMENT: (a) DEKALB and MONSANTO shall each give prompt notice to the other of any infringement of the Licensed MONSANTO Patent Rights or of the Licensed DEKALB Patent Rights within the Licensed Field which may come to its attention. (b) MONSANTO shall have the exclusive right (but not the obligation) to institute and conduct legal action against third-party infringers of the Licensed MONSANTO Patent Rights, and to enter into settlement agreements as a way of responding to any infringements as may be deemed appropriate by MONSANTO. MONSANTO shall receive the full benefits of any action it takes pursuant to this Subsection 6.02 ; provided however, that once any attorney's fees and other reasonable costs incurred in conducting such legal action have been deducted from any recovery obtained from enforcement of Licensed MONSANTO Patent Rights which arise, MONSANTO shall pay to DEKALB its pro rata portion of such recovery, calculated in accordance with the terms of this Agreement as they apply to amounts received pursuant to the applicable Licensed MONSANTO Patent Rights. (c) If the activities of the third party infringing the Licensed MONSANTO Patent Rights result in a material adverse effect on the business of DEKALB or any of its Affiliates, International Associates and sublicensees and at the end of One Hundred and Eighty (180) days from the receipt of notice from DEKALB of such infringement, the third party is both unlicensed under the Licensed MONSANTO Patent Rights and is engaging in activities which are an infringement of the Licensed MONSANTO Patent Rights, and -21- 22 MONSANTO has not brought a suit, action or other proceeding for infringement against such third party, then DEKALB and all of its Affiliates, International Associates and sublicensees shall be excused from making the payments otherwise due hereunder with respect to revenues derived from sales of Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products in the country in which where the competitive infringing activity occurs. Such excuse from payment shall arise only as to sales of the affected Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products in the country in which the infringing products are sold and shall continue only for so long as the infringing products continue to be infringing and to so compete with such Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products unchallenged by an infringement suit, action or other proceeding brought by MONSANTO. If the infringing activities of more than one third party result in a material adverse effect, then MONSANTO will fulfill its obligation under this Subsection through litigation with only one such third party at a time. (d) DEKALB shall have the exclusive right (but not the obligation) to institute and conduct legal action against third-party infringers of the Licensed DEKALB Patent Rights, and to enter into settlement agreements as a way of responding to any infringements as may be deemed appropriate by DEKALB. DEKALB shall receive the full benefits of any action it takes pursuant to this Subsection 6.02; provided however, that once any attorney's fees and other reasonable costs incurred in conducting such legal action have been deducted from any recovery obtained from enforcement of Licensed DEKALB Patent Rights which arise, DEKALB shall pay to MONSANTO its pro rata portion of such recovery, calculated in accordance with the terms of this Agreement as they apply to amounts received pursuant to the applicable Licensed DEKALB Patent Rights. (e) If the activities of the third party infringing the Licensed DEKALB Patent Rights party result in a material adverse effect on the business of MONSANTO's Affiliates, International Associates and sublicensees and at the end of One Hundred and Eighty (180) days from the receipt of notice from MONSANTO of such infringement, the third party is both unlicensed under the Licensed DEKALB Patent Rights and is engaging in activities which are an infringement of the Licensed DEKALB Patent Rights, and DEKALB has not brought a suit, action or other proceeding for infringement against such third party, then MONSANTO and its Affiliates, International Associates and sublicenses shall be excused from making the payments otherwise due hereunder with respect to revenues derived from sublicenses of Licensed MONSANTO Corn Products or Licensed DEKALB Corn Products in the country in which the competitive infringing activity occurs. Such excuse from payment shall arise only as to sales by Affiliates, International Associates and sublicensees of the affected Licensed DEKALB Corn Products or Licensed MONSANTO Corn Products in the country in which the infringing products are sold and shall continue only for so long as the infringing products continue to be infringing and to so compete with such Licensed MONSANTO Corn Products or Licensed -22- 23 DEKALB Corn Products unchallenged by an infringement suit, action or other proceeding brought by DEKALB. If the infringing activities of more than one third party result in a material adverse effect, then DEKALB will fulfill its obligation under this Subsection through litigation with only one such third party at a time. (f) DEKALB shall not have the right (by operation of law or otherwise) to enforce any Licensed MONSANTO Patent Right licensed hereunder against any alleged infringer. MONSANTO shall not have the right (by operation of law or otherwise) to enforce any Licensed DEKALB Patent Right licensed hereunder against any alleged infringer. SECTION 7 - WARRANTIES AND LIABILITIES 7.01 REPRESENTATIONS AND WARRANTIES: (a) MONSANTO represents and warrants that: (i) it is the owner or licensee of the Licensed MONSANTO Patent Rights to the extent required for the grant of rights contained herein; (ii) Appendix A-M lists the MONSANTO-owned patent applications and patents known to or believed by MONSANTO to be necessary to make, have made, use, or sell Licensed DEKALB Corn Products and that, to the extent any patent necessary to make, have made, use, or sell the Licensed DEKALB Products issues to or is controlled by MONSANTO during the term of this Agreement that is not listed in Appendix A-M, DEKALB shall be entitled to continue to make, have made, use, or sell the Licensed DEKALB Corn Products without paying additional royalty; (iii) it has not previously granted, and will not grant to any third party during the term of this Agreement, any rights and licenses under the Licensed MONSANTO Patent Rights that are in conflict with the rights granted to DEKALB herein; and (iv) it has full power, right and authority to enter into and carry out its obligations under this Agreement. (b) DEKALB represents and warrants that: (i) it is the owner or licensee of the Licensed DEKALB Patent Rights to the extent required for the grant of rights contained herein; -23- 24 (ii) Appendix A-D lists the DEKALB-owned patent applications and patents known to or believed by DEKALB to be necessary to make, have made, use, or sell Licensed MONSANTO Corn Products and that, to the extent any patent necessary to make, have made, use, or sell the Licensed MONSANTO Products issues to or is controlled by DEKALB during the term of this Agreement that is not listed in Appendix A-D, MONSANTO shall be entitled to continue to make, have made, use, or sell the Licensed MONSANTO Corn Products without paying additional royalty; (iii) it has not previously granted, and will not grant to any third party during the term of this Agreement, any rights and licenses under the Licensed DEKALB Patent Rights that are in conflict with the rights granted to MONSANTO herein; and (iv) it has full power, right and authority to enter into and carry out its obligations under this Agreement. 7.02 NO OTHER WARRANTIES: (a) EXCEPT FOR THE EXPRESS WARRANTIES IN SUBSECTION 7.01, MONSANTO MAKES NO WARRANTIES REGARDING THE LICENSED MONSANTO PATENT RIGHTS (INCLUDING, WITHOUT LIMITATION, THE VALIDITY OR SCOPE OF THE LICENSED MONSANTO PATENT RIGHTS) OR THE LICENSED DEKALB CORN PRODUCTS (INCLUDING, WITHOUT LIMITATION, THE NON-INFRINGEMENT OF THE LICENSED DEKALB CORN PRODUCTS ON THIRD PARTY PATENT RIGHTS) OR OTHERWISE, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW. (b) EXCEPT FOR THE EXPRESS WARRANTIES IN SUBSECTION 7.01, DEKALB MAKES NO WARRANTIES REGARDING THE LICENSED DEKALB PATENT RIGHTS (INCLUDING, WITHOUT LIMITATION, THE VALIDITY OR SCOPE OF THE LICENSED DEKALB PATENT RIGHTS) OR THE LICENSED MONSANTO CORN PRODUCTS (INCLUDING, WITHOUT LIMITATION, THE NON-INFRINGEMENT OF THE LICENSED MONSANTO CORN PRODUCTS ON THIRD PARTY PATENT RIGHTS) OR OTHERWISE, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW. 7.03 INDEMNIFICATION: -24- 25 (a) EXCEPT TO THE EXTENT OR CAUSED BY MONSANTO'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, DEKALB SHALL DEFEND AND INDEMNIFY MONSANTO AGAINST, AND HOLD MONSANTO AND ITS EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS HARMLESS FROM, ANY LOSS, COST, LIABILITY OR EXPENSE (INCLUDING COURT COSTS AND REASONABLE FEES OF ATTORNEYS AND OTHER PROFESSIONALS) INCURRED FROM ANY CLAIM ARISING OR ALLEGED TO ARISE OUT OF THE MANUFACTURE, USE, DISTRIBUTION OR SALE OF ANY LICENSED DEKALB CORN PRODUCT BY DEKALB OR ANY DEKALB LICENSEE, AFFILIATE OR INTERNATIONAL ASSOCIATE; PROVIDED, HOWEVER, THAT (I) DEKALB SHALL HAVE SOLE CONTROL OF SUCH DEFENSE, AND (II) MONSANTO SHALL PROVIDE NOTICE PROMPTLY TO DEKALB OF ANY ACTUAL OR THREATENED CLAIM OF WHICH MONSANTO BECOMES AWARE. (b) EXCEPT TO THE EXTENT OR CAUSED BY DEKALB'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, MONSANTO SHALL DEFEND AND INDEMNIFY DEKALB AGAINST, AND HOLD DEKALB AND ITS EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS HARMLESS FROM, ANY LOSS, COST, LIABILITY OR EXPENSE (INCLUDING COURT COSTS AND REASONABLE FEES OF ATTORNEYS AND OTHER PROFESSIONALS) INCURRED FROM ANY CLAIM ARISING OR ALLEGED TO ARISE OUT OF THE MANUFACTURE, USE, DISTRIBUTION OR SALE OF ANY LICENSED MONSANTO CORN PRODUCT BY MONSANTO OR ANY MONSANTO LICENSEE, AFFILIATE OR INTERNATIONAL ASSOCIATE; PROVIDED, HOWEVER, THAT (I) MONSANTO SHALL HAVE SOLE CONTROL OF SUCH DEFENSE, AND (II) DEKALB SHALL PROVIDE NOTICE PROMPTLY TO MONSANTO OF ANY ACTUAL OR THREATENED CLAIM OF WHICH DEKALB BECOMES AWARE. (c) (1) MONSANTO AND ITS EMPLOYEES, DIRECTORS, OFFICERS, AGENTS, ASSIGNS, AND SUCCESSORS (COLLECTIVELY "MONSANTO AND ITS AFFILIATES") SHALL INDEMNIFY AND HOLD HARMLESS DEKALB AND ITS EMPLOYEES, DIRECTORS, OFFICERS, AGENTS, ASSIGNS, AND SUCCESSORS (COLLECTIVELY "DEKALB AND ITS AFFILIATES") FROM ANY LOSS, COST, LIABILITY OR EXPENSE INCURRED FROM ANY CLAIM ARISING OUT OF, ALLEGED TO ARISE OUT OF, OR RELATING TO DEKALB'S AGREEMENT TO PERFORM OR PERFORMANCE OF ANY ONE OR MORE OF THE TERMS OR CONDITIONS SET FORTH IN SUBSECTION 3.07, SUBSECTION 3.09 AND APPENDIX D OF THIS AGREEMENT. SUCH LOSS, COST, LIABILITY, OR EXPENSE SHALL INCLUDE, WITHOUT LIMITATION, ALL OBLIGATIONS INCURRED BY DEKALB: (i) AS ACTUAL DAMAGES; (ii) AS SPECIAL ASSESSMENTS, INCLUDING, WITHOUT LIMITATION, EXEMPLARY DAMAGES, MULTIPLE DAMAGES, AND/OR THE COSTS AND ATTORNEYS' FEES OF THIRD PERSONS, (iii) AS DEFENSE COSTS, INCLUDING ATTORNEYS' AND EXPERT WITNESS FEES AND -25- 26 EXPENSES; (iv) IN SETTLEMENT OF ANY DEMAND, CLAIM, PROCEEDINGS, OR INVESTIGATION; AND (v) IN ORDER TO COMPLY WITH ANY INJUNCTION OR SIMILAR ORDER. (2) IN ORDER TO PROVIDE FOR JUST AND EQUITABLE CONTRIBUTION IN CIRCUMSTANCES UNDER WHICH THE INDEMNIFICATION PROVIDED HEREIN IS FOR ANY REASON HELD UNAVAILABLE, MONSANTO AND ITS AFFILIATES SHALL CONTRIBUTE TO THE LOSSES, COSTS, LIABILITIES, AND EXPENSES BY DEKALB AND ITS AFFILIATES (AS, WITHOUT LIMITATION, SET FORTH IN SUBPARAGRAPH (c) (1) IN SUCH PROPORTION AS REFLECTS THE ENTIRE SUCH AGGREGATE AMOUNT LESS AN AMOUNT EQUAL TO THE NET ECONOMIC BENEFIT TO DEKALB THAT RESULTED SOLELY FROM DEKALB'S AGREEMENT TO PERFORM OR PERFORMANCE OF THE TERMS AND CONDITIONS SET FORTH IN SUBSECTION 3.07, SUBSECTION 3.09 AND APPENDIX D OF THIS AGREEMENT, WHICH LATTER AMOUNT SHALL NOT EXCEED TEN PERCENT (10%) OF DEKALB'S NET SALES IN CONNECTION WITH WHICH AN AGREEMENT AS SET FORTH IN APPENDIX D WAS EXECUTED. 7.04 LIMITED LIABILITY: EXCEPT TO THE EXTENT PROVIDED FOR IN SUBSECTION 7.03 ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS, INTERRUPTION OF BUSINESS, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND SUFFERED BY SUCH OTHER PARTY FOR BREACH HEREOF, WHETHER BASED ON CONTRACT OR TORT CLAIMS OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS. SECTION 8 - TERM AND TERMINATION 8.01 TERM: (a) The term of this Agreement shall begin upon the closing of the Investment Agreement between MONSANTO and DEKALB of even date (the "Effective Date"), and shall end upon expiration, revocation, abandonment or invalidation of the last-to-expire patent within the Licensed MONSANTO Patent Rights and the Licensed DEKALB Patent Rights, unless terminated sooner in accordance with this Section 8. Upon expiration, revocation, abandonment or invalidation of the last-to-expire U.S. patent within the Licensed MONSANTO Patent Rights or Licensed DEKALB Patent Rights, DEKALB and MONSANTO and any of their Affiliates, International Associates and sublicensees shall have a paid up license in all countries of the Territory except those countries where patents included within the Licensed MONSANTO Patent Rights or Licensed DEKALB Patent Rights shall then still be in effect. -26- 27 (b) In those countries of the Territory where Licensed MONSANTO Patent Rights or Licensed DEKALB Patent Rights extend beyond the term of the Licensed MONSANTO Patent Rights or Licensed DEKALB Patent Rights in the United States, DEKALB and MONSANTO and all of their Affiliates, International Associates and sublicensees shall have a paid-up license, on a country by country basis, upon expiration, revocation, abandonment or invalidation of such Licensed MONSANTO Patent Rights and Licensed DEKALB Patent Rights in the respective ex.-U.S. country. 8.02 TERMINATION OF AGREEMENT FOR BREACH: (a) Either party may terminate this Agreement upon at least sixty (60) days written notice to the other party should the other party commit a material breach of its obligations or be in material default under any of the provisions of this Agreement, provided that the other party has failed to cure the breach or default (or, if such breach or default cannot be cured within the sixty (60) day period, the other party has not taken reasonable steps to cure the breach or default) within the same sixty (60) day notice period. (b) Notwithstanding a party's right to terminate this Agreement as a result of a non-cured material breach by the other party, the non-breaching party shall not be prevented from seeking any other remedy which may be available to it in equity, including specific performance on the part of the party in breach. 8.03 INSOLVENCY: Either party may terminate this Agreement if, at any time: (a) the other party makes an assignment for the benefit of creditors or admits in writing its inability generally to pay or is generally not paying its debts as such debts become due; (b) any decree or order for relief is entered against the other party under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law; (c) the other party petitions for, applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official, of such other party or any substantial part of its assets, or commences a voluntary case under the bankruptcy law of any jurisdiction; (d) any such petition or application is filed, or any such proceedings are commenced, against the other party and such other party by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order for relief, order, judgment or decree remains unstayed and in effect for more than sixty (60) days; or (e) any order, judgment or decree is entered in any proceedings against the -27- 28 other party decreeing the dissolution of such other party and such order, judgment or decree remains unstayed and in effect for more than sixty (60) days. 8.04 EFFECTS OF TERMINATION/SURVIVAL: (a) Expiration or termination of this Agreement shall not relieve the parties of any obligation accruing prior to or upon such expiration or termination. Accordingly, Subsections 7.03 and 7.04 and Section 9 shall survive expiration or termination of this Agreement and neither party shall be relieved of any payment obligation that may have accrued prior to or subsequent to such expiration or termination. (b) Upon an early termination of this Agreement, DEKALB and its Affiliates and International Associates and sublicensees shall be entitled to sell remaining inventories of any Licensed DEKALB Corn Products which are already in its or their possession or then under production, and MONSANTO and its Affiliates and International Associates and sublicensees shall be entitled to sell remaining inventories of any Licensed MONSANTO Corn Products which are already in its or their possession or then under production. Such sales shall be in accordance with this Agreement, and the parties shall continue to be obligated to make all applicable payments hereunder. Thereafter (A) any remaining Licensed DEKALB Corn Products which are not intended to be sold, and all materials and information relating to or provided by MONSANTO, if any, shall be destroyed or shall be returned, respectively, and the destruction shall be certified to MONSANTO by a representative of DEKALB and (B) any remaining Licensed MONSANTO Corn Products which are not intended to be sold, and all materials and information relating to or provided by DEKALB, if any, shall be destroyed or shall be returned, respectively, and the destruction shall be certified to DEKALB by a representative of MONSANTO. SECTION 9 - CONFIDENTIALITY 9.01 CONFIDENTIAL INFORMATION: The parties have previously disclosed, and it is anticipated that it will be necessary, in connection with their obligations under this Agreement, for DEKALB and MONSANTO to disclose to each other Confidential Information. The Confidential Information shall include, but shall not be limited to, information disclosed in writing or other tangible form, including samples of materials. 9.02 CONFIDENTIALITY AND LIMITED USE: (a) With respect to all Confidential Information, both DEKALB and MONSANTO agree as follows, it being understood that "recipient" indicates the party receiving the confidential, proprietary information from the other "disclosing" party. Confidential Information disclosed to the recipient shall remain the property of the disclosing party and shall -28- 29 be maintained in confidence by the recipient with the same care and diligence as the recipient maintains its own Confidential Information. Confidential Information shall not be disclosed to third parties by the recipient, and further shall not be used except for purposes contemplated in this Agreement. All confidentiality and limited use obligations with respect to the Confidential Information shall terminate ten (10) years after the termination date of this Agreement. (b) Notwithstanding any provision to the contrary, a party may disclose the Confidential Information of the other party: (i) in connection with an order of a court or other government body or as otherwise required by or in compliance with law or regulations; provided that the party required to disclose provides the other party with notice and takes reasonable measures to obtain confidential treatment thereof; (ii) in confidence to recipient's attorneys, accountants, banks and financial sources and its advisors; or (iii) in confidence, in connection with the sale of substantially all the business assets to which this Agreement relates, so long as, in each case, the entity to which disclosure is made is bound to confidentiality on terms consistent with those set forth herein. (c) Notwithstanding any provision to the contrary, a party seeking to make a disclosure to an entity not bound to confidentiality on terms consistent with those set forth herein shall first provide to the other party a copy of the material proposed to be disclosed and shall obtain the consent of the other party before making the disclosure, which consent shall not be unreasonably withheld. 9.03 EXCEPTIONS: The obligations of confidentiality and limited use shall not apply to any of the Confidential Information which: (a) is publicly available by publication or other documented means or later becomes likewise publicly available through no act or fault of recipient; or (b) is already known to recipient before receipt from the disclosing party, as demonstrated by recipient's written records; or (c) is made known to recipient by a third party who did not obtain it directly or indirectly from the disclosing party and who does not obligate recipient to hold it in confidence; or (d) is independently developed by the recipient as evidenced by credible written research records of recipient's employees or agents who did not have access to the disclosing party's Confidential Information. Specific information should not be deemed to be within any of these exclusions merely because it is embraced by more general information falling within these exclusions. 9.04 DISCLOSURES TO PERSONNEL: Recipient agrees to advise those of its officers, directors, employees, associates, agents, consultants, Affiliates, and International Associates who become aware of the Confidential Information, of these confidentiality and limited use -29- 30 obligations and agrees, prior to any disclosure of Confidential Information to such individuals or entities, to make them bound by obligations of confidentiality and limited use of the same stringency as those contained in this Agreement. 9.05 RETURN OF CONFIDENTIAL INFORMATION: Upon termination of this Agreement, originals and copies of Confidential Information in written or other tangible form will be returned to the disclosing party by recipient or destroyed by recipient. One copy of each document may be retained in the custody of the recipient's legal counsel solely to provide a record of what disclosures were made. 9.06 CONFIDENTIAL STATUS OF AGREEMENT: The terms of this Agreement shall be deemed to be Confidential Information and shall be dealt with according to the confidentiality requirements of this Section 9. Neither party will make public disclosures concerning specific terms of this Agreement without obtaining the prior written consent of the other party, which consent shall not be unreasonably withheld and except as may be necessary, in the opinion of counsel of the party making the disclosure, to comply with the requirements of any stock exchange or over-the-counter market on which the shares of such party may be listed or of any law, governmental regulation or order. If a party determines that such a disclosure is necessary, it shall promptly notify the other party so that the other party can obtain confidential treatment of its Confidential Information. SECTION 10 - MISCELLANEOUS 10.01 NOTICES: Any notice or other communication required or permitted to be given by either party under this Agreement shall be given in writing and shall be effective when delivered, if delivered by hand or by electronic facsimile or five days after mailing if mailed by registered or certified mail, postage prepaid and return receipt requested, addressed to each party at the following addresses or such other address as may be designated by notice pursuant to this Subsection 10.01: If to MONSANTO: Monsanto Company 800 North Lindbergh Boulevard St. Louis, Missouri 63167 Attention: Robert T. Fraley, Ph.D. President, Ceregen Facsimile: (314) 694-7771 -30- 31 with a copy to: Monsanto Company 700 Chesterfield Pkwy North St. Louis, Missouri 63198 Attention: Patent Counsel, Ceregen Monsanto Company Mail Code BB4F Facsimile: (314) 537-6047 and to: Monsanto Company 700 Chesterfield Pkwy North St. Louis, Missouri 63198 Attention: William M. Ziegler Business Director, Corn and Soybeans Mail Code BB4D Facsimile: (314) 537-6047 -31- 32 If to DEKALB: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, Illinois 60115 Attention: Richard O. Ryan President and Chief Operating Officer Facsimile: (815) 758-3711 with a copy to: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, Illinois 60115 Attention: John H. Witmer, Jr. Senior Vice President and General Counsel Facsimile: (815) 758-6953 and to: DEKALB Genetics Corporation 62 Maritime Drive Mystic, Conn. 06355 Attention: Catherine J. Mackey, Ph.D. Vice President, Research Facsimile: (860) 572-5241 10.02 PROVISIONS CONTRARY TO LAW: In performing this Agreement, the parties shall comply with all applicable laws and regulations. Nothing in this Agreement shall be construed so as to require the violation of any law, and wherever there is any conflict between any provision of this Agreement and any law the law shall prevail, but in such event the affected provision of this Agreement shall be affected only to the extent necessary to bring it within the applicable law. 10.03 FORCE MAJEURE: (a) Neither of the parties shall be liable for any default or delay in performance of any obligation under this Agreement caused by any of the following: Act of God, war, riot, fire, explosion, accident, flood, sabotage, compliance with governmental requests, laws, regulations, orders or actions, national defense requirements or any other event beyond the reasonable control of such party; or labor trouble, strike, lockout or injunction -32- 33 (provided that neither of the parties shall be required to settle a labor dispute against its own best judgment). (b) The party invoking this Subsection 10.03 shall give the other party written notice and full particulars of such force majeure event. (c) Both MONSANTO and DEKALB shall use reasonable efforts to mitigate the effects of any force majeure on their respective parts. 10.04 RELATIONSHIP OF THE PARTIES: Notwithstanding any provision hereof, for all purposes of this Agreement each party shall be and act as an independent contractor and not as partner, joint venturer or agent of the other and shall not bind nor attempt to bind the other to any contract, without the prior written consent of the party to be bound. 10.05 USE OF NAMES: Unless otherwise required by the terms of this Agreement, neither party shall use the name of the other in any promotional materials or advertising without the prior written consent of the other. 10.06 ASSIGNABILITY AND CHANGE IN CONTROL: (a) The rights acquired herein by DEKALB are not assignable or transferable in whole or part (by operation of law or otherwise) to any third party without the prior written consent of MONSANTO, except as provided in Subsection 10.06(d). (b) The rights acquired herein by MONSANTO are not assignable or transferable in whole or part (by operation of law or otherwise) to any third party without the prior written consent of DEKALB, except as provided in Subsection 10.06(e). (c) Any transfer, assignment or delegation made or attempted in violation of this Subsection 10.06 shall be void ab initio and of no effect. (d) Upon any change in control of DEKALB (by acquisition, merger, consolidation or otherwise) resulting in, direct or indirect, ownership of the voting stock of DEKALB at a level of greater than fifty percent (50%) by a single entity or by two or more entities acting together or, control as a consequence of a shareholder agreement, joint venture agreement or other agreement, DEKALB may assign its rights hereunder to any such successor(s) in interest; Upon any such change of control, payments under Subsection 4.02(c) shall [***] of the ROUNDUP READY(R) Gene Agreement Revenue, and (ii) [***] and if Subsection 4.03 is applicable, DEKALB would receive [***] of the royalty and other consideration. This Subsection 10.06(d) shall not apply to any such change in control in which Monsanto becomes the controlling party. (e) Upon any change in control of MONSANTO (by acquisition, merger, consolidation or otherwise) resulting in, direct or indirect, ownership of the voting stock -33- 34 of MONSANTO at a level of greater than fifty percent (50%) by a single entity or by two or more entities acting together or, control as a consequence of a shareholder agreement, joint venture agreement or other agreement, MONSANTO may assign its rights hereunder to any such successor(s) in interest; Upon any such change in control payments under Subsection 4.02(c) shall [***] of the ROUNDUP READY(R) Gene Agreement Revenue, and (ii) [***] and if Subsection 4.03 is applicable, DEKALB would receive [***] of the royalty and other consideration. 10.07 ENTIRE AGREEMENT; AMENDMENTS; WAIVER: This Agreement constitutes the full understanding of the parties, a complete allocation of risks between them and a complete and exclusive statement of the terms and conditions of their agreement relating to the subject matter hereof and supersedes any and all prior agreements, whether written or oral, that may exist between the parties with respect thereto. Except as otherwise specifically provided in this Agreement, no conditions, usage of trade, course of dealing or performance, understanding or agreement purporting to modify, vary, explain or supplement the terms or conditions of this Agreement shall be binding unless hereafter made in writing and signed by the party to be bound and no modification shall be effected by the acknowledgment or acceptance of documents containing terms or conditions at variance with or in addition to those set forth in this Agreement. No waiver by any party with respect to any breach or default or of any right or remedy and no course of dealing or performance, shall be deemed to constitute a continuing waiver of any other breach or default or of any right or remedy, unless such waiver be expressed in writing signed by the party to be bound. Failure of a party to exercise any right shall not be deemed a waiver of such right or rights in the future. 10.08 CHOICE OF LAW: IT IS THE INTENTION OF THE PARTIES HERETO THAT ALL QUESTIONS WITH RESPECT TO THE CONSTRUCTION OF THIS AGREEMENT AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO BUSINESS ARRANGEMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN THE STATE OF DELAWARE. 10.09 EXPORT CONTROL: (a) Notwithstanding any other provisions of this Agreement, DEKALB agrees to make no disclosure or use of any MONSANTO Know-How or Confidential Information of MONSANTO furnished or made known to DEKALB pursuant to this Agreement, except in compliance with the laws and regulations of the United States of America, including the Export Administration Regulations promulgated by the Office of Export Administration International Trade Administration, United States Department of Commerce; and in particular, -34- 35 DEKALB agrees not to export, directly or indirectly, either (i) the technical data furnished or made known to DEKALB pursuant to this Agreement; or (ii) the "direct product" thereof; or (iii) any commodity produced using such technical data to any country or countries for which a validated license is required unless a validated license is first obtained pursuant to the Export Administration Regulations. The term "direct product" as used above, is defined to mean the immediate product (including process and services) produced directly by the use of the technical data. (b) Notwithstanding any other provisions of this Agreement, MONSANTO agrees to make no disclosure or use of any DEKALB Know-How or Confidential Information of DEKALB furnished or made known to MONSANTO pursuant to this Agreement, except in compliance with the laws and regulations of the United States of America, including the Export Administration Regulations promulgated by the Office of Export Administration International Trade Administration, United States Department of Commerce; and in particular, MONSANTO agrees not to export, directly or indirectly, either (i) the technical data furnished or made known to MONSANTO pursuant to this Agreement; or (ii) the "direct product" thereof; or (iii) any commodity produced using such technical data to any country or countries for which a validated license is required unless a validated license is first obtained pursuant to the Export Administration Regulations. The term "direct product" as used above, is defined to mean the immediate product (including process and services) produced directly by the use of the technical data. 10.10 MEET AND CONFER: It is the intention of the parties that in the event any dispute arises under this Agreement, the parties shall first meet and confer with one another to attempt to negotiate a resolution of such dispute without recourse to litigation. 10.11 REMEDIES: Except as otherwise expressly stated in this Agreement, the rights and remedies of a party set forth herein with respect to failure of the other to comply with the terms of this Agreement (including, without limitation, rights of full termination of this Agreement) are not exclusive, the exercise thereof shall not constitute an election of remedies and the aggrieved party shall in all events be entitled to seek whatever additional remedies may be available in law or in equity. 10.12 FEES: Except as otherwise provided herein, each party shall bear its own legal fees incurred in connection with the transactions contemplated hereby, provided, however, that -35- 36 if any party to this Agreement seeks to enforce its rights under this Agreement by legal proceedings or otherwise, the non-prevailing party shall pay all costs and expenses incurred by the prevailing party, including, without limitation, all reasonable attorneys' fees. 10.13 HEADINGS: Headings herein are for convenience of reference only and shall in no way affect interpretation of this Agreement. 10.14 COUNTERPARTS: This Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. 10.15 ARBITRATION: Disputes arising out of Subsections 3.06, 4.02(b), 4.03 and 4.11 of this Agreement will be finally settled by arbitration conducted in accordance with the arbitration rules and guidelines outlined in attached Appendix C. The arbitration will be held in Chicago, Illinois as promptly as possible at such time as the arbitrator(s) may determine. The decision of the arbitrator(s) will be final and binding upon the parties hereto. 10.16 APPENDICES: The appended Appendices and Exhibits form an integral part of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. MONSANTO COMPANY DEKALB GENETICS CORPORATION By: Robert T. Fraley By: Bruce P. Bickner ----------------------- ------------------------------- Robert T. Fraley Bruce P. Bickner Title: President, Ceregen Title: Chairman and CEO -36- EX-99.C.7 17 CAMV LICENSE AGREEMENT 1 CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. EACH SUCH OMISSION IS DESIGNATED [***]. CaMV PROMOTER LICENSE AGREEMENT This Agreement (the "Agreement") is entered into on this 31st day of January, 1996 by and between Monsanto Company, and DEKALB Genetics Corporation regarding the non-exclusive license of certain patent rights of Monsanto for use in producing particular herbicide-protected corn plants. Based on the mutual consideration between the parties recited below, and in partial consideration for entering into the Investment Agreement of even date herewith, the parties agree and covenant as set forth below. SECTION 1-BACKGROUND AND PARTIES 1.01 Monsanto Company ("MONSANTO") is a corporation of the State of Delaware with principal offices at 800 N. Lindbergh Boulevard, St. Louis, Missouri 63167. 1.02 DEKALB Genetics Corporation ("DEKALB") is a corporation of the State of Delaware with principal offices at 3100 Sycamore Road, DeKalb, Illinois 60115. 1.03 MONSANTO has certain rights in and to patents and/or patent applications covering Gene(s) and their use. 1.04 DEKALB possesses patents and patent applications, knowledge, know-how, technical information, germplasm and expertise regarding the development and marketing of corn hybrids. 1.05 DEKALB is interested in the commercialization of certain herbicide-protected seed corn and DEKALB seeks to obtain a limited license under MONSANTO's proprietary rights. 1.06 MONSANTO desires to grant such license, all upon the terms and conditions provided herein. SECTION 2-DEFINITIONS For purposes of this Agreement, the following words and phrases shall have the following meanings: 2 2.01 The term "Affiliate(s)," as used herein, means with respect to an entity, any person that is at least fifty percent (50%) owned by, or, directly or indirectly, is controlled by, under common control with or in control of, that entity. The term "control" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an entity whether through the ownership of securities, by contract or otherwise. 2.02 The term "CaMV Promoter(s)," as used herein, means a promoter from a cauliflower mosaic virus. 2.03 The term "Confidential Information," as used herein, means any proprietary information, including technical, economic, financial or marketing information, which either party considers confidential and which is disclosed to the other party as confidential. 2.04 The term "Grower Agreement," as used herein, means the agreement between DEKALB and the corn grower substantially in the form of the agreement attached hereto as Appendix B. 2.05 The term "Grower Agreement Fee," as used herein, means the per Unit fee charged to the corn grower under the terms of the Grower Agreement, [***]. 2.06 The term "Grower Agreement Revenue," as used herein, means the total amount of Grower Agreement Fees received from licenses to corn growers for use of Licensed DEKALB Corn Products during the applicable Fiscal Year, less the Seed Service Fees [***]. 2.07 The term "Effective Date" is defined in Subsection 8.01 of this Agreement. 2.08 The term "Fiscal Year," as used herein, means a twelve-month period ending August 31st. 2 3 2.09 The term "Gene(s)," as used herein, means DNA comprising a promoter from cauliflower mosaic virus, 5' non-translated regions, a structural coding region encoding a Glufosinate tolerance protein, and a 3' non-translated termination/polyadenylation region. 2.10 The term "Hybrid Seed Corn," as used herein, means seed corn which the grower would plant to produce a single crop of commercial corn. 2.11 The term "Hybrid Seed Company," as used herein, means an entity, other than DEKALB and MONSANTO, whose primary seed corn business is selling Hybrid Seed Corn directly to growers. 2.12 The term "International Associate," as used herein, means any foreign-based person that has been licensed by DEKALB to sell or otherwise distribute DEKALB-branded seed products. The International Associates of DEKALB include, but are not limited to, those listed in Exhibit A. A third party shall not be considered to be an International Associate solely on the basis of the granting of a license pursuant to this Agreement. 2.13 The term "Licensed Field," as used herein, means transgenic corn (including sweet corn) which exhibits protection against Glufosinate herbicide. 2.14 The term "Licensed MONSANTO Patent Rights" shall mean all patent licenses and sublicenses for use in the Licensed Field and to which MONSANTO and/or a wholly-owned Affiliate of MONSANTO is the licensee or sublicensee (to the extent allowed by such licenses or sublicenses) and all patents and patent applications filed prior to or during the term of this Agreement, for use in the Licensed Field and owned by MONSANTO and/or by a wholly-owned Affiliate of MONSANTO, including but not limited to those listed in Appendix A-M and any and all patents maturing from these applications or maturing from applications that are divisionals, continuations or continuations-in-part of these applications, foreign (i.e., ex-U.S.) equivalents of the foregoing and any and all reissues or extensions of any of the foregoing. 2.15 The term "DEKALB Patent Rights" shall mean all patent licenses and sublicenses for use in the Licensed Field and to which DEKALB and/or a wholly-owned Affiliate of DEKALB is the licensee or sublicensee (to the extent allowed by such licenses or sublicenses) and all patents and patent applications filed prior to or during the term of this Agreement, for use in the Licensed Field and owned by DEKALB and/or a wholly-owned Affiliate of DEKALB, including but not limited to those listed in Appendix A-D and any and all patents maturing from these 3 4 applications or maturing from applications that are divisionals, continuations or continuations-in-part of these applications, foreign (i.e., ex-U.S.) equivalents of the foregoing and any and all reissues or extensions of any of the foregoing. 2.16 The term "Licensed DEKALB Corn Product(s)" shall mean corn material in the Licensed Field including, but not limited to, cells, plants, or seeds and products thereof, which are covered by DEKALB Patent Rights or Licensed MONSANTO Patent Rights. 2.17 The term "MONSANTO Genetic Element(s)," as used herein, means any DNA sequence or sequences including any DNA containing promoters, 5' non-translated regions, introns, 3' non-translated termination/polyadenylation regions and markers that are useful in expressing recombinant genes in corn, which is supplied to DEKALB by MONSANTO prior to or during the term of this Agreement, and replicates thereof, which are useful for the expression of Glufosinate tolerance proteins or are useful for the selection of transgenic plants from tissue culture. 2.18 The term "MONSANTO Germplasm," as used herein, means transgenic corn germplasm supplied to DEKALB by MONSANTO. 2.19 The term "MONSANTO Know-How," as used herein, means any knowledge and proprietary information disclosed to DEKALB by MONSANTO prior to or during the term of this Agreement, which information is not generally publicly known, including, without limitation, all chemical, biochemical, toxicological, manufacturing, formulation, molecular and plant pathology, and scientific research information, whether or not capable of precise separate description but which alone or when accumulated gives to the one acquiring it an ability to develop and commercialize a product through study, testing, production, formulation or marketing which that party would otherwise not have been able to develop and commercialize in the same manner. 2.20 The term "Licensed MONSANTO Method" shall mean any method the use or practice of which would, in the absence of a license, infringe one or more Valid Claims of an unexpired patent included in the Licensed MONSANTO Patent Rights or which involves the use of MONSANTO Know-How or Licensed MONSANTO Non-Patent Proprietary Materials. 2.21 The term "Licensed MONSANTO Non-Patent Proprietary Materials," as used herein, means all MONSANTO Genetic Element(s), MONSANTO Germplasm, MONSANTO Plasmid(s) and MONSANTO Gene(s). 4 5 2.22 The term "MONSANTO Plasmid(s)," as used herein, means a transformation vector(s) which is supplied to DEKALB by MONSANTO prior to or during the term of this Agreement. 2.23 The term "Glufosinate" means any herbicidally effective form of phosphinothricin, including any salt thereof. 2.24 The term "Seed Services Fee," as used herein, means a fee paid for collecting the Grower Agreement Fee. 2.25 The term "Territory," as used herein, means the world. 2.26 The term "Unit(s)," as used herein, means a quantity of approximately Eighty Thousand (80,000) kernels. 2.27 The term "Valid Claim," as used herein, means an issued claim included within the Licensed MONSANTO Patent Rights or DEKALB Patent Rights which has not been finally held to be invalid or unenforceable by a decision of a court or other authority of competent jurisdiction which is not appealable. 2.28 The term "-branded," when used in conjunction with an entity's name, means a trademark or logo of that entity, whether registered or not, affixed to a product or product container, or used in advertising, promotion or other marketing of such a product. 2.29 The term "Net Units," as used herein, means the number of Units sold of all Licensed DEKALB Corn Products in arm's length sales to third parties after deduction of credits or allowances given or made for rejection or return of previously sold Licensed DEKALB Corn Products. Where the product is covered under the present Agreement and under licenses that evolve from the Collaboration Agreement and License, or from the Glyphosate-Protected Corn License Agreement or the Corn Borer-Protected Corn License Agreement, all three of even date herewith, "Net Units" must be calculated separately for each Agreement. The use by DEKALB or its Affiliates, International Associates or sublicensees of commercially reasonable amounts of Licensed DEKALB Corn Products for promotional sampling or replant shall not be included in Net Units. 2.30 The term "person," as used herein, shall mean an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. 5 6 SECTION 3-CONVEYANCE OF RIGHTS 3.01 LICENSE GRANT BY MONSANTO: (a) Subject to the terms and conditions of this Agreement, MONSANTO hereby grants to DEKALB a royalty-bearing, non-exclusive, license under the Licensed MONSANTO Patent Rights, MONSANTO Know-How, Licensed MONSANTO Method and Licensed MONSANTO Non-patent Proprietary Materials, (1) to make, have made and use Licensed DEKALB Corn Products in the Territory, (2) to sell Licensed DEKALB Corn Products in the Territory to corn growers who have entered into the Grower Agreement, and (3) to sublicense DEKALB's Affiliates and International Associates and Hybrid Seed Companies to make, have made, use, and sell Licensed DEKALB Corn Products in the Licensed Field in the Territory to corn growers who have entered into the Grower Agreement. No sublicensee hereunder shall have the right to further sublicense any rights hereunder. (b) The sale and/or transfer of Licensed DEKALB Corn Products to a corn grower shall require execution by the corn grower of the Grower Agreement and payment of the Grower Agreement Fee by such corn grower. [***] 3.02 MARKING OF LICENSED DEKALB CORN PRODUCTS: (a) DEKALB and its sublicensees shall conspicuously display on all packages containing Licensed DEKALB Corn Products to be sold or transferred to permitted third-party growers or customers, the following notice (tailored to reflect the nature of the conveyance), or a notice having the same meaning and effect, with the blanks appropriately filled in to the extent such notice is applicable in the respective area: THESE SEEDS ARE COVERED UNDER U. S. PATENTS ____________. THE PURCHASE OF THESE SEEDS CONVEYS NO LICENSE UNDER SAID PATENTS TO USE THESE 6 7 SEEDS. A LICENSE MUST FIRST BE OBTAINED FROM ________ BEFORE THESE SEEDS CAN BE USED IN ANY WAY. (b) Where transactions occur in countries whose primary language is not English, a translation of the notice in the appropriate language shall be used if appropriate or required by law. 3.03 NO OTHER LICENSES: No license is granted by this Agreement, under the Licensed MONSANTO Patent Rights or any other patent right by implication or otherwise, to make, have made, use or sell directly or by sublicense Licensed DEKALB Corn Products for any use outside the Licensed Field. 3.04 DEKALB TO LICENSE GROWERS: [***] DEKALB shall directly license corn growers under the DEKALB Patent Rights and Licensed MONSANTO Patent Rights, to use the Licensed DEKALB Corn Products. The form of the Grower Agreement shall be substantially as set forth in Appendix B and the Grower Agreement shall be used as provided therein. The Grower Agreement Fee charged by DEKALB, and the amount of the Grower Agreement Revenue, [***] Whether the Grower Agreement Fee and the Grower Agreement Revenue reasonably reflect the foregoing value is [***] 3.05 DEKALB'S OBLIGATIONS: (a) Subject to Subsection 3.01(c), DEKALB shall require in its and its sublicensees' agreements with dealers and distributors, by addendum to existing agreements and inclusion in future agreements, that such dealers and distributors have growers/purchasers of the Licensed DEKALB Corn Products execute the Grower Agreement, and DEKALB shall make all reasonable efforts to have each of its dealers and distributors comply with such requirements. The Grower Agreement shall be executed in quadruplicate. Each dealer or distributor shall retain a copy of the Grower Agreement, provide a copy to the grower (or the grower's authorized representative) and shall forward the others to: 7 8 Signed original: [neutral third party] _____________________________ _____________________________ _____________________________ Copy of the signed original with a DEKALB Genetics Corporation copy of the invoice to: 3100 Sycamore Road DeKalb, Illinois 60115 Attention: Richard O. Ryan President and Chief Operating Officer (b) Subject to Subsection 3.01(c), DEKALB and its sublicensees shall obligate each dealer and distributor to invoice the grower for the Grower Agreement Fee at the time of sale of the Licensed DEKALB Corn Product. Each dealer and distributor shall also be obligated to remit the Grower Agreement Fees collected to DEKALB. (c) DEKALB shall make efforts, consistent with its normal credit and collection policies and procedures, to collect such fees. Any amounts collected by DEKALB from its sublicensees, dealers and distributors which have Grower Agreement Fees due to MONSANTO shall be distributed between DEKALB and MONSANTO on a pro rata basis taking into consideration the relative amounts due to both DEKALB and MONSANTO for the overall transaction. (d) Except to the extent provided for in Subsection 3.05(c), if DEKALB or any of its Affiliates, International Associates and sublicensees are unable to collect the past due Grower Agreement Fees from its dealers and distributors, DEKALB or any of its Affiliates, International Associates and sublicensees shall not be liable to MONSANTO for such delinquent accounts. DEKALB shall be permitted to independently pursue collection of such past due Grower Agreement Fees at its sole discretion. 3.06 FUTURE ACCESS: During the term of this Agreement, [***] shall have the right to [***] within the Licensed Field, either internally or with any third party, such that results of that [***] and rights flowing from that research, will not be subject to the grants under [***] of this Agreement. 8 9 SECTION 4-PAYMENTS, REPORTS AND RECORD RETENTION 4.01 PAYMENTS BY DEKALB: In consideration for the license grants hereunder, DEKALB shall remit to MONSANTO the [***] of the DEKALB Grower Agreement Revenue; and (b) [***] sold by DEKALB and its Affiliates and International Associates and sublicensees hereunder until the obligation of DEKALB to pay MONSANTO expires. 4.02 MOST FAVORED LICENSEE STATUS: (a) If MONSANTO subsequently grants a license under the Licensed MONSANTO Patent Rights to a third party having terms which considered as a whole are more favorable to the licensee than the terms granted to DEKALB considered as a whole, then MONSANTO shall promptly advise DEKALB as to such more favorable terms. DEKALB shall, at its election, be entitled upon notice to MONSANTO to have this Agreement amended to substitute such third-party terms for the terms of this Agreement as of the date upon which such license containing the more favorable terms shall have become effective; provided however that, DEKALB also agrees to have the Agreement amended to contain any additional obligations that are recited in such license containing the more favorable terms. (b) In the event MONSANTO shall at any time while this Agreement is in effect be compelled by applicable law to issue licenses under the Licensed MONSANTO Patent Rights in the Licensed Field to any other person with royalty terms more favorable than those granted to DEKALB hereunder, MONSANTO shall inform DEKALB of the order compelling any such licenses and shall offer the royalties only with respect to the country or countries wherein such compulsory licenses have been ordered so that the new royalty terms shall be no less favorable to DEKALB than those granted to any third party under any such compulsory license. (c) Nothing in this Subsection 4.02 shall entitle DEKALB to any retroactive adjustment, reduction in royalty, or other relief from any of the provisions of this Agreement merely because MONSANTO shall commence proceedings against a third party who shall infringe the Licensed MONSANTO Patent Rights, which proceedings shall be resolved by the third party becoming licensed under the Licensed MONSANTO Patent Rights, so long as such subsequent license agreement shall, at least prospectively, impose upon such third party terms as to royalty no more favorable than the royalty terms imposed upon DEKALB under this Agreement. 4.03 REPORTS: Within sixty (60) days after the end of each Fiscal Year, DEKALB shall provide MONSANTO with a written report of the Net Units of Licensed DEKALB Corn Products sold by DEKALB and its Affiliates and 9 10 International Associates and sublicensees during such Fiscal Year and the Grower Agreement Revenue received on licenses of Licensed DEKALB Corn Products in the Licensed Field in the Territory under the Licensed MONSANTO Patent Rights or DEKALB Patent Rights. The report shall contain the determination of payments due MONSANTO based on such Grower Agreement Revenue or Net Units, as may be the case. 4.04 PAYMENTS: (a) Concurrently with the submission of reports pursuant to Subsection 4.03, DEKALB shall make the payments then due. Payments shall be in United States dollars. Payments due on sales for Licensed DEKALB Corn Products outside the United States shall first be calculated in the foreign currency and then converted to United States dollars on the basis of the rate of exchange in effect for purchase of dollars at Chase Manhattan Bank, New York, New York, on the last business day of the period for which payments are due. Payments shall be without set off and free and clear of any taxes, duties, fees or charges other than withholding taxes, if any. (b) Each payment to MONSANTO hereunder shall be sent to: (i) MONSANTO's account by wire transfer: [***] with a written notice of such wire transfer, or (ii) to another account in the United States which MONSANTO may subsequently designate from time to time by notice to DEKALB. 4.05 RECORDS RETENTION: (a) DEKALB agrees to keep, and shall cause its Affiliates, International Associates and sublicensees to keep, records of the sales of all Licensed DEKALB Corn Products in sufficient detail to permit MONSANTO to confirm the accuracy of DEKALB's payment calculations. At MONSANTO's request, DEKALB shall permit an independent accountant appointed by MONSANTO and reasonably acceptable to DEKALB to examine, not more often than once during any Fiscal Year and under appropriate confidentiality provisions, upon reasonable notice of at least ten (10) days and at reasonable times and in a manner that does not interfere unreasonably with DEKALB's business, such records solely to the extent necessary to verify DEKALB's calculations. Such records shall be kept and examination thereof shall be limited to a period of time no more than three (3) Fiscal Years immediately preceding the request for examination. 10 11 (b) The audit of DEKALB's record shall be at MONSANTO's expense, provided that, if a net aggregate discrepancy of more than ten percent (10%) is found in favor of DEKALB, then DEKALB shall be obligated to re-imburse MONSANTO for the cost of the audit. 4.06 LATE PAYMENT: Notwithstanding any other remedy available to MONSANTO under the provisions of this Agreement, if any sum of money owed to MONSANTO hereunder is not paid when due, the unpaid amount shall bear interest compounded quarterly, at an annual rate of one (1) percentage point above the prime rate quoted by Morgan Guaranty Trust Company of New York on the day payment was due, until paid. 4.07 [***] OF DEKALB GROWER AGREEMENT FEE: MONSANTO shall have the option, to the extent it feels that the Grower Agreement Fee [***] Licensed DEKALB Corn Products to the grower, of requesting a formal discussion with DEKALB in accordance with [***]. If the parties fail to reach agreement after such discussion, MONSANTO shall have the [***]. 4.08 EFFECT OF TERMINATION OF THE INVESTMENT AGREEMENT: (a) Upon termination of the Investment Agreement between MONSANTO and DEKALB of even date hereof before the termination of the Collaboration Agreement and License between MONSANTO and DEKALB of even date hereof, because of (1) the issuance by any governmental authority of any order or decree requiring MONSANTO to terminate the Investment Agreement, which order or decree resulted from MONSANTO's voluntary action, or (2) the termination of the Investment Agreement by MONSANTO other than for Cause, as defined in the Investment Agreement in Subsection 9.1.6, then (i) Subsection 4.01 shall be modified so that the term [***] shall replace the term [***], and the term [***] shall replace the term [***] and (ii) Subsection 4.09 shall be amended to provide that DEKALB shall receive [***] of the royalties and MONSANTO shall receive [***] of the royalties paid, if any. (b) Upon termination of the Investment Agreement between MONSANTO and DEKALB of even date hereof before the termination of the Collaboration Agreement and License between DEKALB and MONSANTO of even date hereof because of the issuance by any governmental authority of any order or decree requiring DEKALB to terminate the Investment Agreement, which order or 11 12 decree resulted from DEKALB's voluntary action, then Subsection 4.01 shall be modified so that the term [***]shall replace the term [***] and the term [***] shall replace the term [***] and (ii) Subsection 4.09 shall be amended to provide that MONSANTO shall receive [***] of the royalties and DEKALB shall receive [***] of the royalties paid, if any. 4.09 [***] and on a country by country basis, in the event DEKALB grants licenses to any third parties for use within the Licensed Field [***] 4.10 FIRST COMMERCIAL SALE IN A COUNTRY: (a) DEKALB shall promptly advise MONSANTO in writing of the first commercial sales of Licensed DEKALB Corn Products in each country of the Territory. (b) At the time such first commercial sale is reported pursuant to this Subsection 4.10, DEKALB shall briefly describe the relationship between DEKALB and the entity making the first commercial sale. SECTION 5-REGULATORY APPROVAL AND PRODUCT REGISTRATION 5.01 REGULATORY APPROVALS: DEKALB shall have sole responsibility for seeking any necessary and/or appropriate regulatory approvals and/or product registrations for Licensed DEKALB Corn Products. The costs of securing such approvals and/or registrations shall be borne solely by DEKALB. 12 13 5.02 REQUEST FOR INFORMATION BY DEKALB: Subject to the provisions of Subsection 5.01, MONSANTO shall, at the reasonable request of DEKALB, provide assistance to DEKALB in seeking such regulatory approvals and/or product registrations, including data, studies and any applicable regulatory filings which MONSANTO may have in its possession; provided, however, that MONSANTO shall not be obligated to conduct any new experiments or other work with respect to any such request by DEKALB. SECTION 6-PATENT PROCUREMENT AND ENFORCEMENT 6.01 PATENT PROCUREMENT: MONSANTO shall have the exclusive right to apply for, and seek issuance of, maintain or abandon any or all of the Licensed MONSANTO Patent Rights. 6.02 PATENT ENFORCEMENT: (a) DEKALB and MONSANTO shall each give prompt notice to the other of any infringement of the Licensed MONSANTO Patent Rights or DEKALB Patent Rights within the Licensed Field which may come to its attention. (b) MONSANTO shall have the exclusive right (but not the obligation) to institute and conduct legal action against third-party infringers of the Licensed MONSANTO Patent Rights, and to enter into such settlement agreements as may be deemed appropriate by MONSANTO. MONSANTO shall receive the full benefits of any action it takes pursuant to this Subsection 6.02; provided however, that once any attorney's fees and other reasonable costs incurred in conducting such legal action have been deducted from any recovery obtained from enforcement of Licensed MONSANTO Patent Rights which arise, MONSANTO shall pay to DEKALB its pro rata portion of such recovery, calculated in accordance with the terms of this Agreement as they apply to amounts received pursuant to the applicable Licensed MONSANTO Patent Rights. (c) If the infringing activities of the third party result in a material adverse effect on the business of DEKALB or any of its Affiliates, International Associates and sublicensees and at the end of One Hundred and Eighty (180) days from the receipt of notice by DEKALB of such infringement, the third party is both unlicensed under the Licensed MONSANTO Patent Rights and is engaging in activities which are an infringement of the Licensed MONSANTO Patent Rights, and MONSANTO has not brought a suit, action or other proceeding for infringement against such third party, then DEKALB and all of its Affiliates and International Associates and sublicensees shall be excused from making the payments otherwise due hereunder with respect to revenues derived from sales of Licensed DEKALB Corn Products in the country area where the competitive infringing activity occurs. Such excuse from payment shall arise only as to sales of the affected Licensed DEKALB 13 14 Corn Products in the country area in which the infringing products are sold and shall continue only for so long as the infringing products continue to be infringing and to so compete with such Licensed DEKALB Corn Products, unchallenged by any suit, action or other proceeding for infringement brought by MONSANTO. If the infringing activities of more than one third party result in such a material adverse effect, then MONSANTO will fulfill its obligation under this Subsection through litigation with only one such third party at a time. Notwithstanding any provisions in this Subsection 6.02(c), if the infringing third party's product also infringes the DEKALB Patent Rights and DEKALB has not brought suit, action or other proceeding against the subject third party, then MONSANTO shall not be obligated to bring any infringement suit, action or other proceeding against the subject third party. (d) DEKALB shall not have the right (by operation of law or otherwise) to enforce any Licensed MONSANTO Patent Right licensed hereunder against any alleged infringer. SECTION 7-WARRANTIES AND LIABILITIES 7.01 REPRESENTATIONS AND WARRANTIES: (a) MONSANTO represents and warrants that: (i) it is the owner or licensee of the Licensed MONSANTO Patent Rights to the extent required for the grant of rights contained herein; (ii) Appendix A-M lists the MONSANTO-owned patent applications and patents known to or believed by MONSANTO to be necessary to make, have made, use, or sell Licensed DEKALB Corn Products and that, to the extent any patent necessary to make, have made, use, or sell the Licensed DEKALB Corn Products issues to or is controlled by MONSANTO during the term of this Agreement that is not listed in Appendix A-M, DEKALB shall be entitled to continue to make, have made, use, or sell the Licensed DEKALB Corn Products without paying additional royalty; (iii) it has not previously granted, and will not grant to any third party during the term of this Agreement, any rights and licenses under the Licensed MONSANTO Patent Rights that are in conflict with the rights granted to DEKALB herein; and (iv) it has full power, right and authority to enter into and carry out its obligations under this Agreement. (b) DEKALB represents and warrants that it has full power, right and authority to enter into and carry out its obligations under this Agreement. 14 15 7.02 NO OTHER WARRANTIES: EXCEPT FOR THE EXPRESS WARRANTIES IN SUBSECTION 7.01, MONSANTO MAKES NO WARRANTIES REGARDING THE LICENSED MONSANTO PATENT RIGHTS (INCLUDING, WITHOUT LIMITATION, THE VALIDITY OR SCOPE OF THE LICENSED MONSANTO PATENT RIGHTS) OR THE LICENSED DEKALB CORN PRODUCTS (INCLUDING, WITHOUT LIMITATION, THE NON-INFRINGEMENT OF THE LICENSED DEKALB CORN PRODUCTS ON THIRD PARTY PATENT RIGHTS) OR OTHERWISE, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW. 7.03 INDEMNIFICATION: EXCEPT TO THE EXTENT CAUSED BY MONSANTO'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, DEKALB SHALL DEFEND AND INDEMNIFY MONSANTO AGAINST, AND HOLD MONSANTO AND ITS EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS HARMLESS FROM, ANY LOSS, COST, LIABILITY OR EXPENSE (INCLUDING COURT COSTS AND REASONABLE FEES OF ATTORNEYS AND OTHER PROFESSIONALS) INCURRED FROM ANY CLAIM ARISING OR ALLEGED TO ARISE OUT OF THE MANUFACTURE, USE, DISTRIBUTION OR SALE OF ANY LICENSED DEKALB CORN PRODUCT BY DEKALB OR ANY DEKALB AFFILIATE; PROVIDED, HOWEVER, THAT (I) DEKALB SHALL HAVE SOLE CONTROL OF SUCH DEFENSE, AND (II) MONSANTO SHALL PROVIDE NOTICE PROMPTLY TO DEKALB OF ANY ACTUAL OR THREATENED CLAIM OF WHICH MONSANTO BECOMES AWARE. 7.04 LIMITED LIABILITY: EXCEPT TO THE EXTENT PROVIDED FOR IN SUBSECTION 7.03 ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS, INTERRUPTION OF BUSINESS, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND SUFFERED BY SUCH OTHER PARTY FOR BREACH HEREOF, WHETHER BASED ON CONTRACT OR TORT CLAIMS OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS. SECTION 8-TERM AND TERMINATION 8.01 TERM: (a) The term of this Agreement shall begin upon the closing of the Investment Agreement between MONSANTO and DEKALB of even date (the "Effective Date"), and shall end upon expiration, revocation, abandonment or invalidation of the last-to-expire patent within the Licensed MONSANTO Patent 15 16 Rights or DEKALB Patent Rights, unless terminated sooner in accordance with this Section 8. Upon expiration, revocation, abandonment or invalidation of the last-to-expire U.S. patent within the Licensed MONSANTO Patent Rights or DEKALB Patent Rights, DEKALB and any of DEKALB's Affiliates, International Associates and sublicensees shall have a paid up license in all countries of the Territory except those countries where patents included within the Licensed MONSANTO Patent Rights or DEKALB Patent Rights shall then still be in effect. (b) In those countries of the Territory where Licensed MONSANTO Patent Rights extend beyond the term of the Licensed MONSANTO Patent Rights in the United States, DEKALB and all of their Affiliates, International Associates and sublicensees shall have a paid-up license, on a country by country basis, upon expiration, revocation, abandonment or invalidation of such Licensed MONSANTO Patent Rights in the respective ex.-U.S. country. 8.02 TERMINATION OF AGREEMENT FOR BREACH: (a) Either party may terminate this Agreement upon at least sixty (60) days written notice to the other party should the other party commit a material breach of its obligations or be in material default under any of the provisions of this Agreement, provided that the other party has failed to cure the breach or default (or, if such breach or default cannot be cured within the sixty (60) day period, the other party has not taken reasonable steps to cure the breach or default) within the same sixty (60) day notice period. (b) Notwithstanding a party's right to terminate this Agreement as a result of a non-cured material breach by the other party, the non-breaching party shall not be prevented from seeking any other remedy which may be available to it in equity, including specific performance on the part of the party in breach. 8.03 INSOLVENCY: Either party may terminate this Agreement if, at any time: (a) the other party makes an assignment for the benefit of creditors or admits in writing its inability generally to pay or is generally not paying its debts as such debts become due; (b) any decree or order for relief is entered against the other party under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law; (c) the other party petitions for or applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official, of such other party or any substantial part of its assets, or commences a voluntary case under the bankruptcy law of any jurisdiction; (d) any such petition or application is filed, or any such proceedings are commenced, against the other party and such other party by any act indicates its 16 17 approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order for relief, order, judgment or decree remains unstayed and in effect for more than sixty (60) days; or (e) any order, judgment or decree is entered in any proceedings against the other party decreeing the dissolution of such other party and such order, judgment or decree remains unstayed and in effect for more than sixty (60) days. 8.04 EFFECTS OF TERMINATION/SURVIVAL: (a) Expiration or termination of this Agreement shall not relieve the parties of any obligation accruing prior to or upon such expiration or termination. Accordingly, Subsections 7.03, 7.04 and Section 9 shall survive expiration or termination of this Agreement and DEKALB shall not be relieved of any payment obligation that may have accrued prior to or subsequent to such expiration or termination. (b) Upon an early termination of this Agreement under Subsection 8.02 as a result of DEKALB's material breach or material default, DEKALB and its Affiliates and International Associates and sublicensees shall be entitled to sell remaining inventories of any Licensed DEKALB Corn Products covered under Licensed MONSANTO Patent Rights which are already in its or their possession or then under production, Such sales shall be in accordance with this Agreement, and DEKALB shall continue to be obligated to make all applicable payments hereunder. Thereafter any remaining Licensed DEKALB Corn Products which are not intended to be sold, and all materials and information relating to or provided by MONSANTO, if any, shall be destroyed or shall be returned, respectively, and the destruction shall be certified to MONSANTO by a representative of DEKALB. SECTION 9-CONFIDENTIALITY 9.01 CONFIDENTIAL INFORMATION: The parties have previously disclosed, and it is anticipated that it will be necessary, in connection with their obligations under this Agreement, for DEKALB and MONSANTO to disclose to each other Confidential Information. The Confidential Information shall include, but not be limited to, information disclosed in writing or other tangible form, including samples of materials. 9.02 CONFIDENTIALITY AND LIMITED USE: (a) With respect to all Confidential Information, both DEKALB and MONSANTO agree as follows, it being understood that "recipient" indicates the party 17 18 receiving the confidential, proprietary information from the other "disclosing" party. Confidential Information disclosed to the recipient shall remain the property of the disclosing party and shall be maintained in confidence by the recipient with the same care and diligence as the recipient maintains its own Confidential Information. Confidential Information shall not be disclosed to third parties by the recipient and, further, shall not be used except for purposes contemplated in this Agreement. All confidentiality and limited use obligations with respect to the Confidential Information shall terminate ten (10) years after the termination date of this Agreement. (b) Notwithstanding any provision to the contrary, a party may disclose the Confidential Information of the other party: (i) in connection with an order of a court or other government body or as otherwise required by or in compliance with law or regulations; provided that the disclosing party provides the other party with notice and takes reasonable measures to obtain confidential treatment thereof; (ii) in confidence to recipient's attorneys, accountants, banks and financial sources and its advisors; or (iii) in confidence, in connection with the sale of substantially all the business assets to which this Agreement relates, so long as, in each case, the entity to which disclosure is made is bound to confidentiality on terms consistent with those set forth herein. (c) Notwithstanding any provision to the contrary, a party seeking to make a disclosure to an entity not bound to confidentiality on terms consistent with those herein shall first provide to the other party a copy of the material proposed to be disclosed and shall obtain the consent of the other party before making the disclosure, which consent shall not be unreasonably withheld. 9.03 EXCEPTIONS: The obligations of confidentiality and limited use shall not apply to any of the Confidential Information which: (a) is publicly available by publication or other documented means or later becomes likewise publicly available through no act or fault of recipient; or (b) is already known to recipient before receipt from the disclosing party, as demonstrated by recipient's written records; or (c) is made known to recipient by a third party who did not obtain it directly or indirectly from the disclosing party and who does not obligate recipient to hold it in confidence; or (d) is independently developed by the recipient as evidenced by credible written research records of recipient's employees or agents who did not have access to the disclosing party's Confidential Information. Specific information should not be deemed to be within any of these exclusions merely because it is embraced by more general information falling within these exclusions. 18 19 9.04 DISCLOSURES TO PERSONNEL: Recipient agrees to advise those of its officers, directors, employees, associates, agents, consultants, Affiliates and International Associates who become aware of the Confidential Information, of these confidentiality and limited use obligations and agrees, prior to any disclosure of Confidential Information to such individuals or entities, to make them bound by obligations of confidentiality and limited use of the same stringency as those contained in this Agreement. 9.05 RETURN OF CONFIDENTIAL INFORMATION: Upon termination of this Agreement, originals and copies of Confidential Information in written or other tangible form will be returned to the disclosing party by recipient or destroyed by recipient. One copy of each document may be retained in the custody of the recipient's legal counsel solely to provide a record of what disclosures were made. 9.06 CONFIDENTIAL STATUS OF AGREEMENT: The terms of this Agreement shall be deemed to be Confidential Information and shall be dealt with according to the confidentiality requirements of this Section 9. Neither party will make public disclosures concerning specific terms of this Agreement without obtaining the prior written consent of the other party, which consent shall not be unreasonably withheld and except as may be necessary, in the opinion of counsel of the party making the disclosure, to comply with the requirements of any stock exchange or over-the-counter market on which the shares of such party may be listed or of any law, governmental regulation or order. If a party determines that such a disclosure is necessary, it shall promptly notify the other party so that the other party can obtain confidential treatment of its Confidential Information. SECTION 10-MISCELLANEOUS 10.01 NOTICES: Any notice or other communication required or permitted to be given by either party under this Agreement shall be given in writing and shall be effective when delivered, if delivered by hand or by electronic facsimile or five days after mailing if mailed by registered or certified mail, postage prepaid and return receipt requested, addressed to each party at the following addresses or such other address as may be designated by notice pursuant to this Subsection 10.01: 19 20 If to MONSANTO: Monsanto Company 800 North Lindbergh Boulevard St. Louis, Missouri 63167 Attention: Robert T. Fraley, Ph.D. President, Ceregen Facsimile: (314) 694-7771 with copies to: Monsanto Company 700 Chesterfield Pkwy North St. Louis, Missouri 63198 Attention: Patent Counsel, Ceregen Monsanto Company Mail Code BB4F Facsimile: (314) 537-6047 Monsanto Company 700 Chesterfield Pkwy North St. Louis, Missouri 63198 Attention: William M. Ziegler Business Dir., Corn and Soybeans Mail Code BB4D Facsimile: (314) 537-6047 If to DEKALB: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, Illinois 60115 Attention: Richard O. Ryan President and Chief Operating Officer Facsimile: (815) 758-3711 20 21 with copies to: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, Illinois 60115 Attention: John H. Witmer, Jr. Senior Vice President and General Counsel Facsimile: (815) 758-6953 DEKALB Genetics Corporation 62 Maritime Dr. Mystic, Conn. 06355 Attention: Catherine J. Mackey, Ph.D. Vice President, Research Facsimile: (860) 572-5241 10.02 PROVISIONS CONTRARY TO LAW: In performing this Agreement, the parties shall comply with all applicable laws and regulations. Nothing in this Agreement shall be construed so as to require the violation of any law, and wherever there is any conflict between any provision of this Agreement and any law the law shall prevail, but in such event the affected provision of this Agreement shall be affected only to the extent necessary to bring it within the applicable law. 10.03 FORCE MAJEURE: (a) Neither of the parties shall be liable for any default or delay in performance of any obligation under this Agreement caused by any of the following: Act of God, war, riot, fire, explosion, accident, flood, sabotage, compliance with governmental requests, laws, regulations, orders or actions, national defense requirements or any other event beyond the reasonable control of such party; or labor trouble, strike, lockout or injunction (provided that neither of the parties shall be required to settle a labor dispute against its own best judgment). (b) The party invoking this Subsection 10.03 shall give the other party written notice and full particulars of such force majeure event. (c) Both MONSANTO and DEKALB shall use reasonable efforts to mitigate the effects of any force majeure on their respective part. 10.04 RELATIONSHIP OF THE PARTIES: Notwithstanding any provision hereof, for all purposes of this Agreement each party shall be and act as an independent 21 22 contractor and not as partner, joint venturer or agent of the other and shall not bind nor attempt to bind the other to any contract, without the prior written consent of the party to be bound. 10.05 USE OF NAMES: Unless otherwise required by the terms of this Agreement, neither party shall use the name of the other in any promotional materials or advertising without the prior written consent of the other. 10.06 ASSIGNABILITY AND CHANGE IN CONTROL: (a) The rights acquired herein by DEKALB are not assignable or transferable in whole or part (by operation of law or otherwise) to any third party without the prior written consent of MONSANTO, except as provided in Subsection 10.06 (c). (b) Any transfer, assignment or delegation made or attempted in violation of this Subsection 10.06 shall be void and of no effect. (c) Upon any change in control of DEKALB (by acquisition, merger, consolidation or otherwise) resulting in, direct or indirect, ownership of the voting stock of DEKALB at a level of greater than fifty percent (50%) by a single entity or by two or more entities acting together or, control as a consequence of a shareholder agreement, joint venture agreement or other agreement, DEKALB may assign its rights hereunder to any such successor(s) in interest; Upon any such change in control, the payments under Subsection 4.01 shall [***] of the Grower Agreement Revenue, and (ii) [***] and if Subsection 4.09 is applicable, MONSANTO would receive [***] of the royalty and other consideration. (d) Upon any change in control of MONSANTO (by acquisition, merger, consolidation or otherwise) resulting in, direct or indirect, ownership of the voting stock of MONSANTO at a level of greater than fifty percent (50%) by a single entity or by two or more entities acting together or, control as a consequence of a shareholder agreement, joint venture agreement or other agreement, MONSANTO may assign its rights hereunder to any such successor(s) in interest; Upon any such change in control, payments under Subsection 4.01 shall [***] of the Grower Agreement Revenue, and (ii) [***] and if Subsection 4.09 is applicable, MONSANTO would receive [***] of the royalty and other consideration. (e) This Subsection shall not apply to any such change in control in which MONSANTO becomes the controlling party. 10.07 ENTIRE AGREEMENT; AMENDMENTS; WAIVER: This Agreement constitutes the full understanding of the parties, a complete allocation of risks between them and a complete and exclusive statement of the terms and conditions of their 22 23 agreement relating to the subject matter hereof and supersedes any and all prior agreements, whether written or oral, that may exist between the parties with respect thereto. Except as otherwise specifically provided in this Agreement, no conditions, usage of trade, course of dealing or performance, understanding or agreement purporting to modify, vary, explain or supplement the terms or conditions of this Agreement shall be binding unless hereafter made in writing and signed by the party to be bound and no modification shall be effected by the acknowledgment or acceptance of documents containing terms or conditions at variance with or in addition to those set forth in this Agreement. No waiver by any party with respect to any breach or default or of any right or remedy and no course of dealing or performance, shall be deemed to constitute a continuing waiver of any other breach or default or of any right or remedy, unless such waiver be expressed in writing signed by the party to be bound. Failure of a party to exercise any right shall not be deemed a waiver of such right or rights in the future. 10.08 CHOICE OF LAW: IT IS THE INTENTION OF THE PARTIES HERETO THAT ALL QUESTIONS WITH RESPECT TO THE CONSTRUCTION OF THIS AGREEMENT AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO BUSINESS ARRANGEMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN THE STATE OF DELAWARE. 10.09 EXPORT CONTROL: Notwithstanding any other provisions of this Agreement, DEKALB agrees to make no disclosure or use of any Confidential Information of MONSANTO furnished or made known to DEKALB pursuant to this Agreement, except in compliance with the laws and regulations of the United States of America, including the Export Administration Regulations promulgated by the Office of Export Administration International Trade Administration, United States Department of Commerce; and in particular, DEKALB agrees not to export, directly or indirectly, either (a) the technical data furnished or made known to DEKALB pursuant to this Agreement; or (b) the "direct product" thereof; or (c) any commodity produced using such technical data to any country or countries for which a validated license is required unless a validated license is first obtained pursuant to the Export Administration Regulations. The term "direct product" as used above, is defined to mean the immediate product (including process and services) produced directly by the use of the technical data. 23 24 10.10 MEET AND CONFER: It is the intention of the parties that in the event any dispute arises under this Agreement, the parties shall first meet and confer with one another to attempt to negotiate a resolution of such dispute without recourse to litigation. 10.11 ARBITRATION: Disputes arising out of Subsections 3.01(c), 3.04, 4.07 or 4.09 of this Agreement will be finally settled by arbitration conducted in accordance with the arbitration rules and guidelines outlined in attached Appendix C. The arbitration will be held in Chicago, Illinois as promptly as possible at such time as the arbitrator(s) may determine. The decision of the arbitrator(s) will be final and binding upon the parties hereto. 10.12 REMEDIES: Except as otherwise expressly stated in this Agreement, the rights and remedies of a party set forth herein with respect to failure of the other to comply with the terms of this Agreement (including, without limitation, rights of full termination of this Agreement) are not exclusive, the exercise thereof shall not constitute an election of remedies and the aggrieved party shall in all events be entitled to seek whatever additional remedies may be available in law or in equity. 10.13 FEES: Except as otherwise provided herein, each party shall bear its own legal fees incurred in connection with the transactions contemplated hereby, provided, however, that if any party to this Agreement seeks to enforce its rights under this Agreement by legal proceedings or otherwise, the non-prevailing party shall pay all costs and expenses incurred by the prevailing party, including, without limitation, all reasonable attorneys' fees. 10.14 HEADINGS: Headings herein are for convenience of reference only and shall in no way affect interpretation of this Agreement. 10.15 COUNTERPARTS: This Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. 24 25 10.16 APPENDICES: The appended Appendices and Exhibits form an integral part of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. MONSANTO COMPANY DEKALB GENETICS CORPORATION By: Robert T. Fraley By: Bruce P. Bickner --------------------------- ------------------------- Robert T. Fraley, Ph.D Bruce P. Bickner Title: President, Ceregen Title: Chairman and CEO 25 -----END PRIVACY-ENHANCED MESSAGE-----