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AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 31, 1998
AMONG
AMERICAN HOME PRODUCTS CORPORATION,
MA SUB, INC.
AND
MONSANTO COMPANY
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TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGER................................................ 2
1.1 The Merger......................................................... 2
1.2 Closing............................................................ 2
1.3 Effective Time..................................................... 2
1.4 Effects of the Merger.............................................. 2
1.5 Certificate of Incorporation....................................... 2
1.6 By-Laws............................................................ 3
1.7 Officers and Directors of Surviving Corporation and Newco.......... 3
1.8 Effect on Capital Stock............................................ 3
1.9 Monsanto Stock Options............................................. 4
1.10 Certain Adjustments................................................ 5
ARTICLE II
EXCHANGE OF CERTIFICATES....................... 5
2.1 Exchange Fund...................................................... 5
2.2 Exchange Procedures................................................ 5
2.3 Distributions with Respect to Unexchanged Shares................... 6
2.4 No Further Ownership Rights in Monsanto Common Stock............... 6
2.5 No Fractional Shares of AHP Common Stock........................... 7
2.6 Termination of Exchange Fund....................................... 7
2.7 No Liability....................................................... 7
2.8 Investment of the Exchange Fund.................................... 8
2.9 Lost Certificates.................................................. 8
2.10 Withholding Rights................................................. 8
2.11 Further Assurances................................................. 8
2.12 Stock Transfer Books............................................... 8
2.13 Affiliates......................................................... 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES................... 9
3.1 Representations and Warranties of AHP.............................. 9
(a) Organization, Standing and Power; Subsidiaries............. 9
(b) Capital Structure.......................................... 10
(c) Authority; No Conflicts.................................... 11
(d) Reports and Financial Statements........................... 12
(e) Information Supplied....................................... 13
(f) Board Approval............................................. 13
(g) Vote Required.............................................. 14
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(h) Litigation; Compliance with Laws........................... 14
(i) Absence of Certain Changes or Events....................... 14
(j) Environmental Matters...................................... 15
(k) Intellectual Property...................................... 16
(l) Brokers or Finders......................................... 16
(m) Opinion of AHP Financial Advisor........................... 17
(n) Accounting Matters......................................... 17
(o) Taxes...................................................... 17
(p) Certain Contracts.......................................... 17
(q) Specified Litigation....................................... 17
3.2 Representations and Warranties of Monsanto. ...................... 18
(a) Organization, Standing and Power; Subsidiaries............. 18
(b) Capital Structure.......................................... 19
(c) Authority; No Conflicts.................................... 20
(d) Reports and Financial Statements........................... 21
(e) Information Supplied....................................... 22
(f) Board Approval............................................. 22
(g) Vote Required.............................................. 22
(h) Litigation; Compliance with Laws........................... 23
(i) Absence of Certain Changes or Events....................... 23
(j) Environmental Matters...................................... 23
(k) Intellectual Property...................................... 24
(l) Rights Agreement........................................... 24
(m) Brokers or Finders......................................... 24
(n) Opinions of Monsanto Financial Advisors.................... 25
(o) Accounting Matters......................................... 25
(p) Taxes...................................................... 25
(q) Certain Contracts.......................................... 25
(r) Specified Litigation....................................... 25
3.3 Representations and Warranties of AHP and Merger Sub............... 26
(a) Organization............................................... 26
(b) Corporate Authorization.................................... 26
(c) Non-Contravention.......................................... 26
(d) No Business Activities..................................... 26
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS............. 26
4.1 Covenants of AHP. ................................................ 26
(a) Ordinary Course............................................ 27
(b) Dividends; Changes in Share Capital........................ 27
(c) Issuance of Securities..................................... 27
(d) Governing Documents........................................ 28
(e) No Acquisitions............................................ 28
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(f) No Dispositions............................................ 28
(g) Investments; Indebtedness.................................. 28
(h) Pooling; Tax-Free Qualification............................ 29
(i) Compensation............................................... 29
(j) Accounting Methods; Income Tax Elections................... 29
(k) Certain Agreements......................................... 29
4.2 Covenants of Monsanto.............................................. 29
(a) Ordinary Course............................................ 30
(b) Dividends; Changes in Share Capital........................ 30
(c) Issuance of Securities..................................... 30
(d) Governing Documents........................................ 31
(e) No Acquisitions............................................ 31
(f) No Dispositions............................................ 31
(g) Investments; Indebtedness.................................. 32
(h) Pooling; Tax-Free Qualification............................ 32
(i) Compensation............................................... 32
(j) Accounting Methods; Income Tax Elections................... 32
(k) Certain Agreements......................................... 32
(l) Rights Agreement........................................... 33
4.3 Governmental Filings............................................... 33
4.4 Control of Other Party's Business.................................. 33
ARTICLE V
ADDITIONAL AGREEMENTS....................................... 33
5.1 Preparation of Proxy Statement; Stockholders Meetings.............. 33
5.2 Newco Board of Directors; Office of the Chairman; Name............. 36
5.3 Access to Information.............................................. 36
5.4 Reasonable Best Efforts............................................ 36
5.5 Acquisition Proposals.............................................. 38
5.6 Employee Benefits Matters.......................................... 39
5.7 Fees and Expenses.................................................. 41
5.8 Directors' and Officers' Indemnification and Insurance............. 41
5.9 Specified Litigation............................................... 42
5.10 Public Announcements............................................... 42
5.11 Accountant's Letters............................................... 42
5.12 Listing of Shares of AHP Common Stock.............................. 43
5.13 Dividends.......................................................... 43
5.14 Affiliates......................................................... 43
5.15 Employment Agreements.............................................. 44
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ARTICLE VI
CONDITIONS PRECEDENT....................................... 44
6.1 Conditions to Each Party's Obligation to Effect the Merger......... 44
(a) Stockholder Approval....................................... 44
(b) No Injunctions or Restraints, Illegality................... 44
(c) HSR Act.................................................... 44
(d) Governmental and Regulatory Approvals...................... 44
(e) NYSE Listing............................................... 45
(f) Effectiveness of the Form S-4.............................. 45
(g) Pooling.................................................... 45
6.2 Additional Conditions to Obligations of AHP and Merger Sub......... 45
(a) Representations and Warranties............................. 45
(b) Performance of Obligations of Monsanto. .................. 46
(c) Tax Opinion................................................ 46
(d) Rights Agreement........................................... 46
6.3 Additional Conditions to Obligations of Monsanto. ................ 46
(a) Representations and Warranties............................. 46
(b) Performance of Obligations of AHP. ....................... 46
(c) Tax Opinion................................................ 47
ARTICLE VII
TERMINATION AND AMENDMENT..................... 47
7.1 Termination........................................................ 47
7.2 Effect of Termination.............................................. 52
7.3 Amendment.......................................................... 56
7.4 Extension; Waiver.................................................. 56
ARTICLE VIII
GENERAL PROVISIONS......................................... 56
8.1 Non-Survival of Representations, Warranties and Agreements......... 56
8.2 Notices............................................................ 56
8.3 Interpretation..................................................... 57
8.4 Counterparts....................................................... 57
8.5 Entire Agreement; No Third Party Beneficiaries..................... 58
8.6 Governing Law...................................................... 58
8.7 Severability....................................................... 58
8.8 Assignment......................................................... 58
8.9 Submission to Jurisdiction; Waivers................................ 58
8.10 Enforcement........................................................ 59
8.11 Definitions........................................................ 59
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LIST OF EXHIBITS
Exhibit Title
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1.5 Form of Amended and Restated Certificate of Incorporation of
Surviving Corporation
1.6(a) Form of By-Laws of Surviving Corporation
1.6(b) Form of Amendments to By-Laws of AHP
1.7 Board of Directors of Surviving Corporation
5.2(a) Board of Directors and Office of the Chairmen of Newco
5.14 Form of Affiliate Letter
6.2(c)(1) Form of AHP Tax Opinion
6.2(c)(2) Form of AHP Representations Letter
6.2(c)(3) Form of Monsanto Representations Letter
6.3(c)(1) Form of Monsanto Tax Opinion
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AGREEMENT AND PLAN OF MERGER, dated as of May 31, 1998 (this
"Agreement"), among AMERICAN HOME PRODUCTS CORPORATION, a Delaware corporation
("AHP"), MA SUB, INC., a Delaware corporation and a direct wholly-owned
subsidiary of AHP ("Merger Sub"), and MONSANTO COMPANY, a Delaware corporation
("Monsanto").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Monsanto and AHP deem it
advisable and in the best interests of each corporation and its respective
stockholders that Monsanto and AHP engage in a business combination as peer
firms in a merger of equals in order to advance the long-term strategic business
interests of Monsanto and AHP;
WHEREAS, the combination of Monsanto and AHP shall be effected
by the terms of this Agreement through a merger as outlined below (the
"Merger");
WHEREAS, in furtherance thereof, the respective Boards of
Directors of Monsanto and AHP have approved the Merger, upon the terms and
subject to the conditions set forth in this Agreement, pursuant to which each
share of common stock, par value $2.00 per share, of Monsanto ("Monsanto Common
Stock") issued and outstanding immediately prior to the Effective Time (as
defined in Section 1.3), other than shares owned or held directly or indirectly
by AHP or directly or indirectly by Monsanto, will be converted into the right
to receive shares of common stock, par value $0.33 1/3 per share, of AHP ("AHP
Common Stock") as set forth in Section 1.8;
WHEREAS, for Federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder; and
WHEREAS, for accounting purposes, it is intended that the
Merger shall be accounted for as a pooling of interests transaction under United
States generally accepted accounting principles ("GAAP").
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth in
this Agreement, and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Merger Sub shall be merged with and into Monsanto
at the Effective Time. Following the Merger, the separate corporate existence of
Merger Sub shall cease and Monsanto shall continue as the surviving corporation
(the "Surviving Corporation") under a new name to be mutually agreed upon by
Monsanto and AHP prior to the Effective Time.
1.2 Closing. Subject to the satisfaction or waiver (subject to
applicable law) of the conditions set forth in Article VI, the closing of the
Merger and the transactions contemplated by this Agreement (the "Closing") will
take place on the second Business Day after the Determination Date (as defined
in Section 7.1(h)); provided, that if an AHP Stock Decline (as defined in
Section 7.1(h)) or a Monsanto Stock Decline (as defined in Section 7(i)) shall
have occurred, the Closing will, subject to the foregoing, take place on the
seventh Business Day after the Determination Date, unless this Agreement has
been theretofore terminated pursuant to its terms, unless another time or date
is agreed to in writing by the parties hereto (the actual time and date of the
Closing being referred to herein as the "Closing Date"). The Closing shall be
held at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, unless another place is agreed to in writing by the
parties hereto.
1.3 Effective Time. As soon as practicable following the
satisfaction of the conditions set forth in Article VI, at the Closing the
parties shall (i) file a certificate of merger (the "Certificate of Merger") in
such form as is required by and executed in accordance with the relevant
provisions of the DGCL and (ii) make all other filings or recordings required
under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Delaware Secretary of State or at
such subsequent time as AHP and Monsanto shall agree and as shall be specified
in the Certificate of Merger (the date and time the Merger becomes effective
being the "Effective Time").
1.4 Effects of the Merger. At and after the Effective Time,
the Merger will have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of Monsanto and Merger Sub
shall be vested in the Surviving Corporation, and all debts, liabilities and
duties of Monsanto and Merger Sub shall become the debts, liabilities and duties
of the Surviving Corporation.
1.5 Certificate of Incorporation. (a) The certificate of
incorporation of Monsanto, as in effect immediately prior to the Effective Time,
shall be amended and restated so as to read in its entirety in the form set
forth as Exhibit 1.5 and, as so amended and restated , shall be the certificate
of incorporation of the Surviving Corporation, until thereafter changed or
amended as provided therein or by applicable law.
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(b) The certificate of incorporation of AHP shall be amended
effective as of the Effective Time to change its name as provided in Section
5.2(b) pursuant to Section 253(b) of the DGCL.
1.6 By-laws. (a) The by-laws in the form attached as Exhibit
1.6(a) shall be the by-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The by-laws of AHP shall be amended effective as of the
Effective Time to the effect provided in Exhibit 1.6(b), with such changes
therein as the parties may mutually agree.
1.7 Officers and Directors of Surviving Corporation and Newco.
The officers of Monsanto as of the Effective Time shall be the officers of the
Surviving Corporation, until the earlier of their resignation or removal or
otherwise ceasing to be an officer or until their respective successors are duly
elected and qualified, as the case may be. The directors of the Surviving
Corporation as of the Effective Time shall be as provided in Exhibit 1.7, which
individuals will serve as directors of the Surviving Corporation until the
earlier of their resignation or removal or otherwise ceasing to be a director or
until their respective successors are duly elected and qualified. The officers
and directors of AHP as of the Effective Time, which shall change its name as of
the Effective Time to a new name to be mutually agreed upon by Monsanto and AHP
prior to the Effective Time ("Newco"), will be as provided in Section 5.2.
1.8 Effect on Capital Stock.
(a) At the Effective Time by virtue of the Merger and without
any action on the part of the holder thereof, each share of Monsanto Common
Stock issued and outstanding immediately prior to the Effective Time (other than
shares of Monsanto Common Stock owned by AHP or Merger Sub or held by Monsanto,
all of which shall be canceled as provided in Section 1.8(c)) shall be converted
into the right to receive 1.15 shares (the "Exchange Ratio") of AHP Common Stock
(together with any cash in lieu of fractional shares of AHP Common Stock to be
paid pursuant to Section 2.5, the "Merger Consideration").
(b) As a result of the Merger and without any action on the
part of the holders thereof, at the Effective Time, all shares of Monsanto
Common Stock shall cease to be outstanding and shall be canceled and retired and
shall cease to exist, and each holder of a certificate which immediately prior
to the Effective Time represented any such shares of Monsanto Common Stock (a
"Certificate") shall thereafter cease to have any rights with respect to such
shares of Monsanto Common Stock, except as provided herein or by law.
(c) Each share of Monsanto Common Stock issued and owned or
held by AHP, Merger Sub or Monsanto at the Effective Time shall, by virtue of
the Merger, cease to be outstanding and shall be canceled and retired and no
stock of AHP or other consideration shall be delivered in exchange therefor.
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(d) Each share of common stock, par value $0.01 per share, of
Merger Sub issued and outstanding immediately prior to the Effective Time, shall
remain issued, outstanding and unchanged as validly issued, fully paid and
nonassessable shares of common stock, par value $0.01 per share, of the
Surviving Corporation as of the Effective Time.
1.9 Monsanto Stock Options.
(a) On or prior to the Effective Time, Monsanto will take all
action necessary such that each Monsanto Stock Option (as defined in Section
3.2(b)) that was granted pursuant to the Monsanto Stock Option Plans (as defined
in Section 3.2(b)) prior to the Effective Time and which remains outstanding
immediately prior to the Effective Time shall cease to represent a right to
acquire shares of Monsanto Common Stock and shall be converted, at the Effective
Time, into an option to acquire, on the same terms and conditions as were
applicable under the Monsanto Stock Option, that number of shares of AHP Common
Stock determined by multiplying the number of shares of Monsanto Common Stock
subject to such Monsanto Stock Option by the Exchange Ratio, rounded, if
necessary, to the nearest whole share of AHP Common Stock, at a price per share
(rounded to the nearest one-hundredth of a cent) equal to the per share exercise
price specified in such Monsanto Stock Option divided by the Exchange Ratio;
provided, however, that in the case of any Monsanto Stock Option to which
Section 421 of the Code applies by reason of its qualification under Section 422
of the Code, the option price, the number of shares subject to such option and
the terms and conditions of exercise of such option shall be determined in a
manner consistent with the requirements of Section 424(a) of the Code.
(b) As soon as practicable after the Effective Time, Newco
shall deliver to the holders of Monsanto Stock Options appropriate notices
setting forth such holders' rights pursuant to the Monsanto Stock Option Plans
(including that, by virtue of the Merger and pursuant to the terms of the
Monsanto Stock Option Plans, the Monsanto Stock Options have become fully vested
and exercisable) and the agreements evidencing the grants of such Monsanto Stock
Options shall continue in effect on the same terms and conditions (subject to
the adjustments required by this Section 1.9 after giving effect to the Merger
and the terms of the Monsanto Stock Option Plans). To the extent permitted by
law, Newco shall comply with the terms of the Monsanto Stock Option Plans and
shall take such reasonable steps as are necessary or required by, and subject to
the provisions of, such Monsanto Stock Option Plans, to have the Monsanto Stock
Options which qualified as incentive stock options prior to the Effective Time
continue to qualify as incentive stock options of Newco after the Effective
Time.
(c) Newco shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of AHP Common Stock for delivery upon
exercise of Monsanto Stock Options in accordance with this Section 1.9. Promptly
after the Effective Time, Newco shall file a registration statement on Form S-3
or Form S-8, as the case may be (or any successor or other appropriate forms),
with respect to the shares of AHP Common Stock subject to such options and shall
use commercially reasonable efforts to maintain the effectiveness of such
registration statement or registration statements (and maintain the current
status of the prospectus
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or prospectuses contained therein) for so long as such options remain
outstanding. With respect to those individuals who subsequent to the Merger will
be subject to the reporting requirements under Section 16(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), where applicable, Newco
shall administer the Monsanto Stock Option Plans in a manner consistent with the
exemptions provided by Rule 16b-3 promulgated under the Exchange Act.
1.10 Certain Adjustments. If, between the date of this
Agreement and the Effective Time, the outstanding AHP Common Stock or Monsanto
Common Stock shall have been changed into a different number of shares or
different class by reason of any reclassification, recapitalization, stock
split, split-up, combination or exchange of shares or a stock dividend or
dividend payable in any other securities shall be declared with a record date
within such period, or any similar event shall have occurred, the Exchange Ratio
shall be appropriately adjusted to provide to the holders of Monsanto Common
Stock the same economic effect as contemplated by this Agreement prior to such
event.
ARTICLE II
EXCHANGE OF CERTIFICATES
2.1 Exchange Fund. Prior to the Effective Time, AHP shall
appoint a commercial bank or trust company reasonably acceptable to Monsanto
having net capital of not less than $100,000,000, or a subsidiary thereof, to
act as exchange agent hereunder for the purpose of exchanging Certificates for
the Merger Consideration (the "Exchange Agent"). At or prior to the Effective
Time, AHP shall deposit with the Exchange Agent, in trust for the benefit of
holders of shares of Monsanto Common Stock, certificates representing the AHP
Common Stock issuable pursuant to Section 1.8 in exchange for outstanding shares
of Monsanto Common Stock. AHP agrees to make available to the Exchange Agent
from time to time as needed, cash sufficient to pay cash in lieu of fractional
shares pursuant to Section 2.5 and any dividends and other distributions
pursuant to Section 2.3. Any cash and certificates of AHP Common Stock deposited
with the Exchange Agent shall hereinafter be referred to as the "Exchange Fund".
2.2 Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Surviving Corporation shall cause the Exchange
Agent to mail to each holder of a Certificate (i) a letter of transmittal which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent, and which letter shall be in customary form and have such other
provisions as AHP may reasonably specify and (ii) instructions for effecting the
surrender of such Certificates in exchange for the applicable Merger
Consideration. Upon surrender of a Certificate to the Exchange Agent together
with such letter of transmittal, duly executed and completed in accordance with
the instructions thereto, and such other documents as may reasonably be required
by the Exchange Agent, the holder of such Certificate shall be entitled to
receive in exchange therefor (A) one or more shares of AHP Common Stock (which
shall be in uncertificated
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book-entry form unless a physical certificate is requested) representing, in the
aggregate, the whole number of shares that such holder has the right to receive
pursuant to Section 1.8 (after taking into account all shares of Monsanto Common
Stock then held by such holder) and (B) a check in the amount equal to the cash
that such holder has the right to receive pursuant to the provisions of this
Article II, including cash in lieu of any fractional shares of AHP Common Stock
pursuant to Section 2.5 and dividends and other distributions pursuant to
Section 2.3. No interest will be paid or will accrue on any cash payable
pursuant to Section 2.3 or Section 2.5. In the event of a transfer of ownership
of Monsanto Common Stock which is not registered in the transfer records of
Monsanto, one or more shares of AHP Common Stock evidencing, in the aggregate,
the proper number of shares of AHP Common Stock, a check in the proper amount of
cash in lieu of any fractional shares of AHP Common Stock pursuant to Section
2.5 and any dividends or other distributions to which such holder is entitled
pursuant to Section 2.3, may be issued with respect to such Monsanto Common
Stock to such a transferee if the Certificate representing such shares of
Monsanto Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid.
2.3 Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made with respect to shares of AHP
Common Stock with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the shares of AHP Common
Stock that such holder would be entitled to receive upon surrender of such
Certificate and no cash payment in lieu of fractional shares of AHP Common Stock
shall be paid to any such holder pursuant to Section 2.5 until such holder shall
surrender such Certificate in accordance with Section 2.2. Subject to the effect
of applicable laws, following surrender of any such Certificate, there shall be
paid to such holder of shares of AHP Common Stock issuable in exchange therefor,
without interest, (a) promptly after the time of such surrender, the amount of
any cash payable in lieu of fractional shares of AHP Common Stock to which such
holder is entitled pursuant to Section 2.5 and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of AHP Common Stock, and (b) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such shares of AHP Common
Stock.
2.4 No Further Ownership Rights in Monsanto Common Stock. All
shares of AHP Common Stock issued and cash paid upon conversion of shares of
Monsanto Common Stock in accordance with the terms of Article I and this Article
II (including any cash paid pursuant to Section 2.3 or 2.5) shall be deemed to
have been issued or paid in full satisfaction of all rights pertaining to the
shares of Monsanto Common Stock.
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2.5 No Fractional Shares of AHP Common Stock.
(a) No certificates or scrip or shares of AHP Common Stock
representing fractional shares of AHP Common Stock or book-entry credit of the
same shall be issued upon the surrender for exchange of Certificates and such
fractional share interests will not entitle the owner thereof to vote or to have
any rights of a shareholder of AHP or a holder of shares of AHP Common Stock.
(b) Notwithstanding any other provision of this Agreement,
each holder of shares of Monsanto Common Stock exchanged pursuant to the Merger
who would otherwise have been entitled to receive a fraction of a share of AHP
Common Stock (after taking into account all Certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest) in an amount
equal to the product of (i) such fractional part of a share of AHP Common Stock
multiplied by (ii) the closing price for a share of AHP Common Stock on the New
York Stock Exchange, Inc. ("NYSE") Composite Transactions Tape on the date of
the Effective Time or, if such date is not a Business Day, the Business Day
immediately following the date on which the Effective Time occurs. As promptly
as practicable after the determination of the amount of cash, if any, to be paid
to holders of fractional interests, the Exchange Agent shall so notify AHP, and
AHP shall cause the Surviving Corporation to deposit such amount with the
Exchange Agent and shall cause the Exchange Agent to forward payments to such
holders of fractional interests subject to and in accordance with the terms
hereof.
2.6 Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of Certificates for six months
after the Effective Time shall be delivered to the Surviving Corporation or
otherwise on the instruction of the Surviving Corporation, and any holders of
the Certificates who have not theretofore complied with this Article II shall
thereafter look only to the Surviving Corporation and AHP for the Merger
Consideration with respect to the shares of Monsanto Common Stock formerly
represented thereby to which such holders are entitled pursuant to Section 1.8
and Section 2.2, any cash in lieu of fractional shares of AHP Common Stock to
which such holders are entitled pursuant to Section 2.5 and any dividends or
distributions with respect to shares of AHP Common Stock to which such holders
are entitled pursuant to Section 2.3. Any such portion of the Exchange Fund
remaining unclaimed by holders of shares of Monsanto Common Stock five years
after the Effective Time (or such earlier date immediately prior to such time as
such amounts would otherwise escheat to or become property of any Governmental
Entity (as defined in Section 3.1(c)(iii)) shall, to the extent permitted by
law, become the property of the Surviving Corporation free and clear of any
claims or interest of any Person previously entitled thereto.
2.7 No Liability. None of AHP, Merger Sub, Monsanto, the
Surviving Corporation or the Exchange Agent shall be liable to any Person in
respect of any Merger Consideration from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
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2.8 Investment of the Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by the Surviving
Corporation on a daily basis. Any interest and other income resulting from such
investments shall promptly be paid to the Surviving Corporation.
2.9 Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will deliver in exchange for such lost, stolen or destroyed
Certificate the applicable Merger Consideration with respect to the shares of
Monsanto Common Stock formerly represented thereby, any cash in lieu of
fractional shares of AHP Common Stock, and unpaid dividends and distributions on
shares of AHP Common Stock deliverable in respect thereof, pursuant to this
Agreement.
2.10 Withholding Rights. Each of the Surviving Corporation and
AHP shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Monsanto Common
Stock such amounts as it is required to deduct and withhold with respect to the
making of such payment under the Code and the rules and regulations promulgated
thereunder, or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld by the Surviving Corporation or AHP, as the case
may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of Monsanto Common
Stock in respect of which such deduction and withholding was made by the
Surviving Corporation or AHP, as the case may be.
2.11 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of Monsanto or Merger Sub, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of Monsanto or Merger Sub, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets acquired or to be acquired by the Surviving Corporation as a result of,
or in connection with, the Merger.
2.12 Stock Transfer Books. The stock transfer books of
Monsanto shall be closed immediately upon the Effective Time and there shall be
no further registration of transfers of shares of Monsanto Common Stock
thereafter on the records of Monsanto. On or after the Effective Time, any
Certificates presented to the Exchange Agent or AHP for any reason shall be
converted into the Merger Consideration with respect to the shares of Monsanto
Common Stock formerly represented thereby, any cash in lieu of fractional shares
of AHP Common Stock to which the holders thereof are entitled pursuant to
Section 2.5 and any dividends or other distributions to which the holders
thereof are entitled pursuant to Section 2.3.
8
2.13 Affiliates. Notwithstanding anything to the contrary
herein, no shares of AHP Common Stock or cash shall be delivered to a Person who
may be deemed an "affiliate" of Monsanto in accordance with Section 5.14 hereof
for purposes of Rule 145 under the Securities Act of 1933, as amended (the
"Securities Act") or for purposes of qualifying the Merger for pooling of
interests accounting treatment under Opinion 16 of the Accounting Principles
Board and applicable rules and regulations of the Securities and Exchange
Commission (the "SEC") until such Person has executed and delivered an Affiliate
Agreement (as defined in Section 5.14) to AHP.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of AHP. Except as set forth
in the AHP Disclosure Schedule delivered by AHP to Monsanto prior to the
execution of this Agreement (the "AHP Disclosure Schedule") (each section of
which qualifies the correspondingly numbered representation and warranty or
covenant to the extent specified therein) AHP represents and warrants to
Monsanto as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of AHP and each of its Subsidiaries (as
defined in Section 8.11) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the requisite power and authority to
own, lease and operate its properties and to carry on its business as
now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority would
not reasonably be expected to have a Material Adverse Effect on AHP,
and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary other than
in such jurisdictions where the failure so to qualify or to be in good
standing would not reasonably be expected to have a Material Adverse
Effect on AHP. The copies of the certificate of incorporation and
by-laws of AHP which were previously furnished or made available to
Monsanto are true, complete and correct copies of such documents as in
effect on the date of this Agreement.
(ii) Exhibit 21 to AHP's Annual Report on Form 10-K
for the year ended December 31, 1997 includes all the Subsidiaries of
AHP which as of the date of this Agreement are Significant Subsidiaries
(as defined in Rule 1-02 of Regulation S-X of the SEC). All the
outstanding shares of capital stock of, or other equity interests in,
each such Significant Subsidiary have been validly issued and are fully
paid and nonassessable and are owned directly or indirectly by AHP,
free and clear of all pledges, claims, liens, charges, encumbrances and
security interests of any kind or nature whatsoever (collectively
"Liens") and free of any other restriction (including any
9
restriction on the right to vote, sell or otherwise dispose of such
capital stock or other ownership interests). Except as set forth in the
AHP SEC Reports, as of the date of this Agreement, neither AHP nor any
of its Subsidiaries directly or indirectly owns any equity or similar
interest in, or any interest convertible into or exchangeable or
exercisable for, any corporation, partnership, joint venture or other
business association or entity (other than Subsidiaries), that is or
would reasonably be expected to be material to AHP and its Subsidiaries
taken as a whole.
(b) Capital Structure.
(i) As of May 26, 1998, the authorized capital stock
of AHP consisted of (A) 2,400,000,000 shares of AHP Common Stock of
which 1,314,414,504 shares were outstanding and 107,498,740 shares were
held in the treasury of AHP and (B) 5,000,000 shares of Preferred
Stock, par value $2.50 per share, of which 27,717 shares designated as
$2 Convertible Preferred Stock (the "$2 Convertible Preferred Stock")
were outstanding. As of May 26, 1998, AHP had reserved or has available
997,812 shares of AHP Common Stock for issuance upon conversion of the
$2 Convertible Preferred Stock. Since May 26, 1998 to the date of this
Agreement, there have been no issuances of shares of the capital stock
of AHP or any other securities of AHP other than issuances of shares
upon conversion of the $2 Convertible Preferred Stock or pursuant to
options or rights outstanding as of May 26, 1998 under the Benefit
Plans (as defined in Section 8.11(a)) of AHP. All issued and
outstanding shares of the capital stock of AHP are duly authorized,
validly issued, fully paid and nonassessable, and no class of capital
stock is entitled to preemptive rights. There were outstanding as of
May 26, 1998 no options, warrants or other rights to acquire capital
stock from AHP other than options representing in the aggregate the
right to purchase 80,904,028 shares of AHP Common Stock (collectively,
the "AHP Stock Options") under AHP's 1980 Stock Option Plan, AHP's 1985
Stock Option Plan, AHP's Management Incentive Plan, AHP's 1990 Stock
Incentive Plan, AHP's 1993 Stock Incentive Plan and AHP's 1996 Stock
Incentive Plan (collectively, the "AHP Stock Option Plans"). Section
3.1(b) of the AHP Disclosure Schedule sets forth a complete and correct
list, as of May 26, 1998, of the number of shares of AHP Common Stock
subject to AHP Stock Options or other rights to purchase or receive AHP
Common Stock granted under the AHP Benefit Plans or otherwise, the
dates of grant and the exercise prices thereof. No options or warrants
or other rights to acquire capital stock from AHP have been issued or
granted since May 26, 1998 to the date of this Agreement.
(ii) No bonds, debentures, notes or other indebtedness
of AHP having the right to vote on any matters on which holders of
capital stock of AHP may vote ("AHP Voting Debt") are issued or
outstanding.
(iii) Except as otherwise set forth in this Section
3.1(b) and as contemplated by Section 1.8 and Section 1.9, as of the
date of this Agreement, there are no securities, options, warrants,
calls, rights, commitments, agreements, arrangements or
10
undertakings of any kind to which AHP or any of its Subsidiaries is a
party or by which any of them is bound obligating AHP or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of AHP or any of its Subsidiaries or obligating AHP or any
of its Subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. As of the date of this Agreement, there are
no outstanding obligations of AHP, any of its Subsidiaries or, to the
knowledge of AHP, any of its Majority Owned Affiliates to repurchase,
redeem or otherwise acquire any shares of capital stock of AHP, any of
its Subsidiaries or any of its Majority Owned Affiliates.
(c) Authority; No Conflicts.
(i) AHP has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby, subject, in the case of the issuance
of the shares of AHP Common Stock to be issued in the Merger (the
"Share Issuance"), to the approval by the stockholders of AHP of the
Share Issuance by the Required AHP Vote (as defined in Section 3.1(g)).
The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of AHP, subject in the case of
the Share Issuance, to the approval by the stockholders of AHP of the
Share Issuance by the Required AHP Vote. This Agreement has been duly
executed and delivered by AHP and constitutes a valid and binding
agreement of AHP, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally or by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
(ii) The execution and delivery of this Agreement by
AHP does not or will not, as the case may be, and the consummation by
AHP of the Merger and the other transactions contemplated hereby will
not, conflict with, or result in any violation of, or constitute a
default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, amendment, cancellation or
acceleration of any obligation or the loss of a material benefit under,
or the creation of a lien, pledge, security interest, charge or other
encumbrance on any assets (any such conflict, violation, default, right
of termination, amendment, cancellation or acceleration, loss or
creation, a "Violation") pursuant to: (A) any provision of the
certificate of incorporation or by-laws of AHP, any material Subsidiary
of AHP or, to the knowledge of AHP, any of its Majority Owned
Affiliates, or (B) except as would not reasonably be expected to have a
Material Adverse Effect on AHP or, to the knowledge of AHP, Newco
following the Merger, subject to obtaining or making the consents,
approvals, orders, authorizations, registrations, declarations and
filings referred to in paragraph (iii) below, any loan or credit
agreement, note, mortgage, bond, indenture, lease, benefit plan or
other agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law,
11
ordinance, rule or regulation applicable to AHP, any Subsidiary of AHP
or, to the knowledge of AHP, any of its Majority Owned Affiliates, or
their respective properties or assets.
(iii) No consent, approval, order or authorization of,
or registration, declaration or filing with, any supranational,
national, state, municipal, local or foreign government, any
instrumentality, subdivision, court, administrative agency or
commission or other authority thereof, or any quasi-governmental or
private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority (a "Governmental Entity"),
is required by or with respect to AHP or any Subsidiary of AHP in
connection with the execution and delivery of this Agreement by AHP or
the consummation of the Merger and the other transactions contemplated
hereby, except for those required under or in relation to (A) the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (B) state securities or "blue sky" laws (the "Blue Sky
Laws"), (C) the Securities Act, (D) the Exchange Act, (E) the DGCL with
respect to the filing of the Certificate of Merger, (F) rules and
regulations of the NYSE, (G) antitrust or other competition laws of
other jurisdictions, and (H) such consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of
which to make or obtain would not reasonably be expected to have a
Material Adverse Effect on AHP. Consents, approvals, orders,
authorizations, registrations, declarations and filings required under
or in relation to any of the foregoing clauses (A) through (G) are
hereinafter referred to as "Necessary Consents".
(d) Reports and Financial Statements.
(i) AHP has filed all required registration
statements, prospectuses, reports, schedules, forms, statements and
other documents required to be filed by it with the SEC since January
1, 1997 (collectively, including all exhibits thereto, the "AHP SEC
Reports"). No Subsidiary of AHP is required to file any form, report,
registration statement, prospectus or other document with the SEC. None
of the AHP SEC Reports, as of their respective dates (and, if amended
or superseded by a filing prior to the date of this Agreement or the
Closing Date, then on the date of such filing), contained or will
contain any untrue statement of a material fact or omitted or will omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The AHP SEC Reports together with any
public announcements in a news release issued by the Dow Xxxxx news
service or any equivalent service (a "Dow Xxxxx News Release") made by
AHP after the date hereof, taken as a whole, as of the Effective Time
will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances existing as
of the Effective Time, not misleading. Each of the financial statements
(including the related notes) included in the AHP SEC Reports presents
fairly, in all material respects, the consolidated financial position
and consolidated results of operations and cash flows of AHP and its
Subsidiaries as of the respective dates or for the respective periods
set forth
12
therein, all in conformity with GAAP consistently applied during the
periods involved except as otherwise noted therein, and subject, in the
case of the unaudited interim financial statements, to normal and
recurring year-end adjustments that have not been and are not expected
to be material in amount. All of such AHP SEC Reports, as of their
respective dates (and as of the date of any amendment to the respective
AHP SEC Report), complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder.
(ii) Except as disclosed in the AHP SEC Reports filed
prior to the date hereof, since December 31, 1997, AHP and its
Subsidiaries have not incurred any liabilities that are of a nature
that would be required to be disclosed on a balance sheet of AHP and
its Subsidiaries or the footnotes thereto prepared in conformity with
GAAP, other than (A) liabilities incurred in the ordinary course of
business or (B) liabilities that would not reasonably be expected to
have a Material Adverse Effect on AHP.
(e) Information Supplied.
(i) None of the information supplied or to be supplied
by AHP for inclusion or incorporation by reference in (A) the Form S-4
(as defined in Section 5.1) will, at the time the Form S-4 is filed
with the SEC, at any time it is amended or supplemented or at the time
it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and (B) the Joint Proxy Statement/Prospectus (as
defined in Section 5.1) will, on the date it is first mailed to
Monsanto stockholders or AHP stockholders or at the time of the
Monsanto Stockholders Meeting or the AHP Stockholders Meeting (each as
defined in Section 5.1), contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Form S-4
and the Joint Proxy Statement/Prospectus will comply as to form in all
material respects with the requirements of the Exchange Act and the
Securities Act and the rules and regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this
Section 3.1(e), no representation or warranty is made by AHP with
respect to statements made or incorporated by reference in the Form S-4
or the Joint Proxy Statement/Prospectus based on information supplied
by Monsanto for inclusion or incorporation by reference therein.
(f) Board Approval. The Board of Directors of AHP, by
resolutions duly adopted by unanimous vote at a meeting duly called and held and
not subsequently rescinded or modified in any way (the "AHP Board Approval"),
has duly (i) determined that this Agreement and the Merger are fair to and in
the best interests of AHP and its stockholders, (ii) approved this Agreement,
the Merger and the Share Issuance and (iii) recommended that the stockholders of
13
AHP approve the Share Issuance and directed that the Share Issuance be submitted
for consideration by AHP's stockholders at the AHP Stockholders Meeting. The AHP
Board Approval constitutes approval of this Agreement and the Merger for
purposes of Section 203 of the DGCL. To the knowledge of AHP, except for Section
203 of the DGCL (which has been rendered inapplicable), no state takeover
statute is applicable to the Merger or the other transactions contemplated
hereby.
(g) Vote Required. The affirmative vote of holders of shares
of AHP Common Stock and shares of $2 Convertible Preferred Stock, voting
together as a single class, representing a majority of the total votes cast at a
meeting of the holders of outstanding shares of AHP Common Stock and outstanding
shares of $2 Convertible Preferred Stock (the "Required AHP Vote"), is the only
vote of the holders of any class or series of AHP capital stock necessary to
approve the transactions contemplated by the Merger Agreement and the Merger and
the Share Issuance.
(h) Litigation; Compliance with Laws.
(i) Except as disclosed in the AHP SEC Reports filed
prior to the date of this Agreement, there is no suit, action or
proceeding pending or, to the knowledge of AHP, threatened, against or
affecting AHP or any Subsidiary of AHP having, or which would
reasonably be expected to have a Material Adverse Effect on AHP, nor is
there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against AHP or any
Subsidiary of AHP having, or which reasonably would be expected to have
a Material Adverse Effect on AHP.
(ii) Except as disclosed in the AHP SEC Reports filed
prior to the date of this Agreement and except as would not reasonably
be expected to have a Material Adverse Effect on AHP, AHP and its
Subsidiaries hold all permits, licenses, variances, exemptions, orders
and approvals of all Governmental Entities which are necessary for the
operation of the businesses of AHP and its Subsidiaries, taken as a
whole (the "AHP Permits"). AHP and its Subsidiaries are in compliance
with the terms of the AHP Permits, except where the failure so to
comply would not reasonably be expected to have a Material Adverse
Effect on AHP. Except as disclosed in the AHP SEC Reports filed prior
to the date of this Agreement, the businesses of AHP and its
Subsidiaries are not being conducted in violation of, and AHP has not
received any notices of violations with respect to, any law, ordinance
or regulation of any Governmental Entity, except for possible
violations which would not reasonably be expected to have a Material
Adverse Effect on AHP.
(i) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby, except as disclosed in the AHP SEC Reports filed prior to
the date of this Agreement, and except as permitted by Section 4.1, since
December 31, 1997, AHP and its Subsidiaries have conducted their business only
in the ordinary course and there has not been (i) any change, circumstance or
event which
14
has had, or would reasonably be expected to have, a Material Adverse Effect on
AHP or (ii) any action taken by AHP or any of its Subsidiaries during the period
from December 31, 1997 through the date of this Agreement that, if taken during
the period from the date of this Agreement through the Effective Time, would
constitute a breach of Section 4.1.
(j) Environmental Matters. Except as would not reasonably be
expected to have a Material Adverse Effect on AHP and except as disclosed in the
AHP SEC Reports filed prior to the date of this Agreement (i) the operations of
AHP and its Subsidiaries have been and are in compliance with all Environmental
Laws and with all licenses required by Environmental Laws (as defined below),
(ii) there are no pending or, to the knowledge of AHP, threatened, actions,
suits, claims, investigations or other proceedings (collectively, "Actions")
under or pursuant to Environmental Laws against AHP or its Subsidiaries or
involving any real property currently or, to the knowledge of AHP, formerly
owned, operated or leased by AHP or its Subsidiaries, (iii) AHP and its
Subsidiaries are not subject to any Environmental Liabilities (as defined
below), and, to the knowledge of AHP, no facts, circumstances or conditions
relating to, arising from, associated with or attributable to any real property
currently or, to the knowledge of AHP, formerly owned, operated or leased by AHP
or its Subsidiaries or operations thereon would reasonably be expected to result
in Environmental Liabilities, (iv) all real property owned and to the knowledge
of AHP all real property operated or leased by AHP or its Subsidiaries is free
of contamination from Hazardous Material (as defined below) that would have an
adverse effect on human health or the environment and (v) there is not now, nor,
to the knowledge of AHP, has there been in the past, on, in or under any real
property owned, leased or operated by AHP or any of its predecessors (a) any
underground storage tanks regulated pursuant to 40 C.F.R. Part 280 or delegated
state programs, dikes or impoundments containing more than a reportable quantity
of Hazardous Materials, (b) any friable asbestos-containing materials or (c) any
polychlorinated biphenyls.
As used in this Agreement, "Environmental Laws" means any and
all federal, state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decisions, injunctions, orders, decrees,
requirements of any Governmental Entity, any and all common law requirements,
rules and bases of liability regulating, relating to or imposing liability or
standards of conduct concerning pollution, Hazardous Materials or protection of
human health, safety or the environment, as currently in effect and includes the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
[Section] 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
[Section] 1801 et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
[Section] 6901 et seq., the Clean Water Act, 33 U.S.C. [Section] 1251 et seq.,
the Clean Air Act, 33 U.S.C. [Section] 2601 et seq., the Toxic Substances
Control Act, 15 U.S.C. [Section] 2601 et seq., the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C., [Section] 136 et seq., Occupational
Safety and Health Act 29 U.S.C. [Section] 651 et seq. and the Oil Pollution Act
of 1990, 33 U.S.C. [Section] 2701 et seq., as such laws have been amended or
supplemented, and the regulations promulgated pursuant thereto, and all
analogous state or local statutes. As used in this Agreement, "Environmental
Liabilities" with respect to any person means any and all liabilities of or
relating to such person or any of its Subsidiaries (including any entity which
is, in whole or in part, a predecessor of such person or any of such
Subsidiaries), whether vested or unvested, contingent or fixed, actual
15
or potential, known or unknown, which (i) arise under or relate to matters
covered by Environmental Laws and (ii) relate to actions occurring or conditions
existing on or prior to the Closing Date. As used in this Agreement, "Hazardous
Materials" means any hazardous or toxic substances, materials or wastes,
defined, listed, classified or regulated as such in or under any Environmental
Laws which includes petroleum, petroleum products, friable asbestos, urea
formaldehyde and polychlorinated biphenyls.
(k) Intellectual Property. Except as would not reasonably be
expected to have a Material Adverse Effect on AHP and except as disclosed in the
AHP SEC Reports filed prior to the date of the Agreement: (a) AHP and each of
its Subsidiaries owns, or is licensed to use (in each case, free and clear of
any liens), all Intellectual Property (as defined below) used in or necessary
for the conduct of its business as currently conducted; (b) the use of any
Intellectual Property by AHP and its Subsidiaries does not infringe on or
otherwise violate the rights of any Person and is in accordance with any
applicable license pursuant to which AHP or any Subsidiary acquired the right to
use any Intellectual Property; (c) to the knowledge of AHP, no Person is
challenging, infringing on or otherwise violating any right of AHP or any of its
Subsidiaries with respect to any Intellectual Property owned by and/or licensed
to AHP or its Subsidiaries; and (d) neither AHP nor any of its Subsidiaries has
received any written notice of any pending claim with respect to any
Intellectual Property used by AHP and its Subsidiaries and to its knowledge no
Intellectual Property owned and/or licensed by AHP or its Subsidiaries is being
used or enforced in a manner that would result in the abandonment, cancellation
or unenforceability of such Intellectual Property. For purposes of this
Agreement, "Intellectual Property" shall mean trademarks, service marks, brand
names, certification marks, trade dress and other indications of origin, the
goodwill associated with the foregoing and registrations in any jurisdiction of,
and applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patentable or not, in any
jurisdiction; patents, applications for patents (including, without limitation,
divisions, continuations, continuations in part and renewal applications), and
any renewals, extensions or reissues thereof, in any jurisdiction; nonpublic
information, trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any person; writings and
other works, whether copyrightable or not, in any jurisdiction; registrations or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof; any similar intellectual property or proprietary
rights; and any claims or causes of action arising out of or relating to any
infringement or misappropriation of any of the foregoing.
(l) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of AHP, except Bear, Xxxxxxx & Co. Inc. (the "AHP Financial
Advisor"), whose fees and expenses will be paid by AHP in accordance with AHP's
agreement with such firm, a copy of which has been provided to Monsanto.
16
(m) Opinion of AHP Financial Advisor. AHP has received the
opinion of the AHP Financial Advisor, dated the date of this Agreement, to the
effect that, as of such date, the Exchange Ratio is fair, from a financial point
of view, to AHP and its stockholders, a copy of which opinion has been made
available to Monsanto.
(n) Accounting Matters. To the knowledge of AHP, neither AHP
nor any of its affiliates has taken or agreed to take any action that would
prevent AHP from accounting for the Merger as a "pooling of interests". At or
prior to the date hereof, AHP has received a letter from its independent public
accountants addressed to AHP, with a copy to Monsanto, to the effect that, based
upon representations provided by AHP and Monsanto and a poolability letter from
the independent public accountants of Monsanto, accounting for the Merger as a
pooling of interests under Opinion 16 of the Accounting Principles Board and
applicable SEC rules and regulations is appropriate if the Merger is consummated
and closed as contemplated by this Agreement.
(o) Taxes. Each of AHP and its Subsidiaries has filed all Tax
Returns required to have been filed (or extensions have been duly obtained) and
has paid all Taxes required to have been paid by it, except where failure to
file such Tax Returns or pay such Taxes would not, in the aggregate, reasonably
be expected to have a Material Adverse Effect on AHP. For purposes of this
Agreement: (i) "Tax" (and, with correlative meaning, "Taxes") means any federal,
state, local or foreign income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, withholding, alternative or add on
minimum, ad valorem, transfer or excise tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty, imposed by any governmental authority and
(ii) "Tax Return" means any return, report or similar statement required to be
filed with respect to any Tax (including any attached schedules), including,
without limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.
(p) Certain Contracts. As of the date hereof, except as set
forth in the AHP SEC Reports filed prior to the date of this Agreement, neither
AHP nor any of its Subsidiaries is a party to or bound by (i) any "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC) or (ii) any non-competition agreement or any other agreement or arrangement
that limits or otherwise restricts AHP or any of its Subsidiaries or any of
their respective affiliates or any successor thereto, or that would, after the
Effective Time, to the Knowledge of AHP, limit or restrict Newco or any of its
affiliates (including the Surviving Corporation) or any successor thereto, from
engaging or competing in any line of business or in any geographic area, which
agreement or arrangement would reasonably be expected to have a Material Adverse
Effect on Newco and its Subsidiaries (including the Surviving Corporation and
its Subsidiaries), taken together, after giving effect to the Merger.
(q) Specified Litigation. As of the date hereof, AHP has
provided to Monsanto prior to the execution of this Agreement all information
Known to AHP which is relevant and material to an assessment of the liability
exposure of AHP and its Subsidiaries with respect to litigation matters
disclosed in the AHP SEC Reports or included on the AHP Disclosure Schedule
17
as to which Monsanto has requested such information (the "AHP Specified
Litigation Matters"). As of the date hereof, there is no information relating to
the AHP Specified Litigation Matters in the possession of AHP, its Subsidiaries
or their counsel not heretofore provided to Monsanto which would reasonably be
expected to have a Material Adverse Effect on AHP.
3.2 Representations and Warranties of Monsanto. Except as set
forth in the Monsanto Disclosure Schedule delivered by Monsanto to AHP prior to
the execution of this Agreement (the "Monsanto Disclosure Schedule") (each
section of which qualifies the correspondingly numbered representation and
warranty or covenant to the extent specified therein), Monsanto represents and
warrants to AHP as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of Monsanto and each of its Subsidiaries is a
corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation
or organization, has the requisite power and authority to own,
lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power
and authority would not reasonably be expected to have a
Material Adverse Effect on Monsanto and is duly qualified and
in good standing to do business in each jurisdiction in which
the nature of its business or the ownership or leasing of its
properties makes such qualification necessary other than in
such jurisdictions where the failure so to qualify or to be in
good standing would not reasonably be expected to have a
Material Adverse Effect on Monsanto. The copies of the
certificate of incorporation and by-laws of Monsanto which
were previously furnished or made available to AHP are true,
complete and correct copies of such documents as in effect on
the date of this Agreement.
(ii) Exhibit 21 to Monsanto's Annual Report on Form
10-K for the year ended December 31, 1997 includes all the
Subsidiaries of Monsanto which as of the date of this
Agreement are Significant Subsidiaries (as defined in Rule
1-02 of Regulation S-X of the SEC). All the outstanding shares
of capital stock of, or other equity interests in, each such
Significant Subsidiary have been validly issued and are fully
paid and nonassessable and are owned directly or indirectly by
Monsanto, free and clear of all Liens and free of any other
restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other
ownership interests). Except as set forth in the Monsanto SEC
Reports, neither Monsanto nor any of its Subsidiaries directly
or indirectly owns any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for,
any corporation, partnership, joint venture or other business
association or entity, that is or would reasonably be expected
to be material to Monsanto and its Subsidiaries taken as a
whole.
18
(b) Capital Structure.
(i) As of May 15, 1998, the authorized capital stock
of Monsanto consisted of (A) 1,000,000,000 shares of Monsanto Common
Stock, of which 599,938,734 shares were outstanding and 222,032,236
shares were held in the treasury of Monsanto (of which 263,075 shares
were held in the treasury pursuant to the Monsanto Employee Stock
Purchase Plan) and (B) 10,000,000 shares of Preferred Stock, without
par value, none of which were outstanding and 700,000 shares of which
have been designated Series A Junior Participating Preferred Stock and
reserved for issuance upon exercise of the rights (the "Rights")
distributed to the holders of Monsanto Common Stock pursuant to the
Rights Agreement dated as of January 26, 1990, between Monsanto and
First National Bank of Boston, as Rights Agent, as amended (the "Rights
Agreement"). Since May 15, 1998 to the date of this Agreement, there
have been no issuances of shares of the capital stock of Monsanto or
any other securities of Monsanto other than issuances of shares (and
accompanying Rights) pursuant to options or rights outstanding as of
May 14, 1998 under the Benefit Plans of Monsanto or up to 50,000 shares
of restricted stock granted under the Monsanto Management Incentive
Plan of 1996, as amended. All issued and outstanding shares of the
capital stock of Monsanto are duly authorized, validly issued, fully
paid and nonassessable, and no class of capital stock is entitled to
preemptive rights. There were outstanding as of May 26, 1998 no
options, warrants or other rights to acquire capital stock from
Monsanto other than (x) the Rights and (y) options representing in the
aggregate the right to purchase no more than 108,484,911 shares of
Monsanto Common Stock (collectively, the "Monsanto Stock Options")
under the Monsanto Company Non-Employee Director Equity Incentive
Compensation Plan, Monsanto Management Incentive Plan of 1984, the
Xxxxxx Monsanto Stock Option Plan of 1986, the Monsanto Management
Incentive Plan of 1988/II, the Monsanto Management Incentive Plan of
1988/I, the NutraSweet/Monsanto Stock Plan of 1991, the Monsanto
Management Incentive Plan of 1994, the Xxxxxx/Monsanto Stock Plan of
1994, the NutraSweet/Monsanto Stock Plan of 1994, and the Monsanto
Management Incentive Plan of 1996, as each such plan has been amended
(collectively, the "Monsanto Stock Option Plans"). Section 3.2(b) of
the Monsanto Disclosure Schedule sets forth a complete and correct
list, as of May 26, 1998, of the number of shares of Monsanto Common
Stock subject to Monsanto Stock Options or other rights to purchase or
receive Monsanto Common Stock granted under the Monsanto Benefit Plans
or otherwise, the dates of grant and the exercise prices thereof. No
options or warrants or other rights to acquire capital stock from
Monsanto have been issued or granted since May 26, 1998 to the date of
this Agreement.
(ii) No bonds, debentures, notes or other indebtedness
of Monsanto having the right to vote on any matters on which
stockholders may vote ("Monsanto Voting Debt") are issued or
outstanding.
(iii) Except as otherwise set forth in this Section
3.2(b), as of the date of this Agreement, there are no securities,
options, warrants, calls, rights, commitments,
19
agreements, arrangements or undertakings of any kind to which Monsanto
or any of its Subsidiaries is a party or by which any of them is bound
obligating Monsanto or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of Monsanto or any of its
Subsidiaries or obligating Monsanto or any of its Subsidiaries to
issue, grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking. As of
the date of this Agreement, there are no outstanding obligations of
Monsanto, any of its Subsidiaries or to the knowledge of Monsanto, any
of its Majority Owned Affiliates to repurchase, redeem or otherwise
acquire any shares of capital stock of Monsanto, any of its
Subsidiaries or, to the knowledge of Monsanto, any of its Majority
Owned Affiliates.
(c) Authority; No Conflicts.
(i) Monsanto has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby, subject in the case of the
consummation of the Merger to the adoption of this Agreement by the
Required Monsanto Vote (as defined in Section 3.2(g)). The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Monsanto, subject in the case of the
consummation of the Merger to the adoption of this Agreement by the
Required Monsanto Vote. This Agreement has been duly executed and
delivered by Monsanto and constitutes a valid and binding agreement of
Monsanto, enforceable against it in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally, by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
(ii) The execution and delivery of this Agreement by
Monsanto does not or will not, as the case may be, and the consummation
by Monsanto of the Merger and the other transactions contemplated
hereby will not, conflict with, or result in a Violation pursuant to:
(A) any provision of the certificate of incorporation or by-laws of
Monsanto, any material Subsidiary of Monsanto or, to the knowledge of
Monsanto, any of its Majority Owned Affiliates or (B) except as would
not reasonably be expected to have a Material Adverse Effect on
Monsanto or, to the knowledge of Monsanto, Newco following the Merger,
subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in
paragraph (iii) below, any loan or credit agreement, note, mortgage,
bond, indenture, lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to
Monsanto, any Subsidiary of Monsanto or, to the knowledge of Monsanto,
any of its Majority Owned Affiliates or their respective properties or
assets.
20
(iii) No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Entity is
required by or with respect to Monsanto or any Subsidiary of Monsanto
in connection with the execution and delivery of this Agreement by
Monsanto or the consummation of the Merger and the other transactions
contemplated hereby, except the Necessary Consents and such consents,
approvals, orders, authorizations, registrations, declarations and
filings the failure of which to make or obtain would not reasonably be
expected to have a Material Adverse Effect on Monsanto.
(d) Reports and Financial Statements.
(i) Monsanto has filed all required registration
statements, prospectuses, reports, schedules, forms, statements and
other documents required to be filed by it with the SEC since January
1, 1997 (collectively, including all exhibits thereto, the "Monsanto
SEC Reports"). No Subsidiary of Monsanto is required to file any form,
report, registration statement or prospectus or other document with the
SEC. None of the Monsanto SEC Reports, as of their respective dates
(and, if amended or superseded by a filing prior to the date of this
Agreement or the Closing Date, then on the date of such filing),
contained or will contain any untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Monsanto
SEC Reports together with any public announcements in a Dow Xxxxx News
Release made by Monsanto after the date hereof, taken as a whole, as of
the Effective Time will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
existing as of the Effective Time, not misleading. Each of the
financial statements (including the related notes) included in the
Monsanto SEC Reports presents fairly, in all material respects, the
consolidated financial position and consolidated results of operations
and cash flows of Monsanto and its Subsidiaries as of the respective
dates or for the respective periods set forth therein, all in
conformity with GAAP consistently applied during the periods involved
except as otherwise noted therein, and subject, in the case of the
unaudited interim financial statements, to normal and recurring
year-end adjustments that have not been and are not expected to be
material in amount. All of such Monsanto SEC Reports, as of their
respective dates (and as of the date of any amendment to the respective
Monsanto SEC Report), complied as to form in all material respects with
the applicable requirements of the Securities Act and the Exchange Act
and the rules and regulations promulgated thereunder.
(ii) Except as disclosed in the Monsanto SEC Reports
filed prior to the date hereof, since December 31, 1997, Monsanto and
its Subsidiaries have not incurred any liabilities that are of a nature
that would be required to be disclosed on a balance sheet of Monsanto
and its Subsidiaries or the footnotes thereto prepared in conformity
with GAAP, other than (A) liabilities incurred in the ordinary course
of business or (B)
21
liabilities that would not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Monsanto.
(e) Information Supplied.
(i) None of the information supplied or to be supplied
by Monsanto for inclusion or incorporation by reference in (A) the Form
S-4 will, at the time the Form S-4 is filed with the SEC, at any time
it is amended or supplemented or at the time it becomes effective under
the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) the
Joint Proxy Statement/Prospectus will, on the date it is first mailed
to Monsanto stockholders or AHP stockholders or at the time of the
Monsanto Stockholders Meeting or the AHP Stockholders Meeting, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The Form S-4 and the Joint Proxy
Statement/Prospectus will comply as to form in all material respects
with the requirements of the Exchange Act and the Securities Act and
the rules and regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this
Section 3.2(e), no representation or warranty is made by Monsanto with
respect to statements made or incorporated by reference in the Form S-4
or the Joint Proxy Statement/Prospectus based on information supplied
by AHP or Merger Sub for inclusion or incorporation by reference
therein.
(f) Board Approval. The Board of Directors of Monsanto, by
resolutions duly adopted by unanimous vote of those voting at a meeting duly
called and held and not subsequently rescinded or modified in any way (the
"Monsanto Board Approval"), has duly (i) determined that this Agreement and the
Merger are fair to and in the best interests of Monsanto and its stockholders,
(ii) approved this Agreement and the Merger and (iii) recommended that the
stockholders of Monsanto adopt this Agreement and approve the Merger and
directed that this Agreement and the transactions contemplated hereby be
submitted for consideration by Monsanto's stockholders at the Monsanto
Stockholders Meeting. The Monsanto Board Approval constitutes approval of this
Agreement and the Merger for purposes of Section 203 of the DGCL. To the
knowledge of Monsanto, except for Section 203 of the DGCL (which has been
rendered inapplicable), no state takeover statute is applicable to the Merger or
the other transactions contemplated hereby.
(g) Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Monsanto Common Stock to approve the
Merger (the "Required Monsanto Vote") is the only vote of the holders of any
class or series of Monsanto capital stock necessary to adopt this Agreement and
approve the Merger and the other transactions contemplated hereby
22
(assuming that AHP is not an "interested stockholder" of Monsanto under Section
203 of the DGCL immediately before the execution and delivery of this
Agreement).
(h) Litigation; Compliance with Laws.
(i) Except as disclosed in the Monsanto SEC Reports
filed prior to the date of this Agreement, there is no suit, action or
proceeding pending or, to the knowledge of Monsanto, threatened,
against or affecting Monsanto or any Subsidiary of Monsanto having, or
which would reasonably be expected to have a Material Adverse Effect on
Monsanto, nor is there any judgment, decree, injunction, rule or order
of any Governmental Entity or arbitrator outstanding against Monsanto
or any Subsidiary of Monsanto having, or which reasonably would be
expected to have a Material Adverse Effect on Monsanto.
(ii) Except as disclosed in the Monsanto SEC Reports
filed prior to the date of the Agreement and except as would not
reasonably be expected to have a Material Adverse Effect on Monsanto,
Monsanto and its Subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities necessary
for the operation of the businesses of Monsanto and its Subsidiaries,
taken as a whole (the "Monsanto Permits"). Monsanto and its
Subsidiaries are in compliance with the terms of the Monsanto Permits,
except where the failure so to comply would not reasonably be expected
to have a Material Adverse Effect on Monsanto. Except as disclosed in
the Monsanto SEC Reports filed prior to the date of this Agreement, the
businesses of Monsanto and its Subsidiaries are not being conducted in
violation of, and Monsanto has not received any notices of violations
with respect to, any law, ordinance or regulation of any Governmental
Entity, except for possible violations which would not reasonably be
expected to have a Material Adverse Effect on Monsanto.
(i) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby, except as disclosed in the Monsanto SEC Reports filed prior
to the date of this Agreement, and except as permitted by Section 4.2, since
December 31, 1997, Monsanto and its Subsidiaries have conducted their business
only in the ordinary course and there has not been (i) any change, circumstance
or event which has had, or would reasonably be expected to have, a Material
Adverse Effect on Monsanto or (ii) any action taken by Monsanto or any of its
Subsidiaries during the period from December 31, 1997 through the date of this
Agreement that, if taken during the period from the date of this Agreement
through the Effective Time, would constitute a breach of Section 4.2.
(j) Environmental Matters. Except as would not reasonably be
expected to have a Material Adverse Effect on Monsanto and except as disclosed
in the Monsanto SEC Reports filed prior to the date of this Agreement, (i) the
operations of Monsanto and its Subsidiaries have been and are in compliance with
all Environmental Laws and with all licenses required by Environmental Laws (ii)
there are no pending or, to the knowledge of Monsanto, threatened, Actions under
or pursuant to Environmental Laws against Monsanto or its
23
Subsidiaries or involving any real property currently or, to the knowledge of
Monsanto, formerly owned, operated or leased by Monsanto or its Subsidiaries,
(iii) Monsanto and its Subsidiaries are not subject to any Environmental
Liabilities and, to the knowledge of Monsanto, no facts, circumstances or
conditions relating to, arising from, associated with or attributable to any
real property currently or, to the knowledge of Monsanto, formerly owned,
operated or leased by Monsanto or its Subsidiaries or operations thereon would
reasonably be expected to result in Environmental Liabilities, (iv) all real
property owned and to the knowledge of Monsanto all real property operated or
leased by Monsanto or its Subsidiaries is free of contamination from Hazardous
Material that would have an adverse effect on human health or the environment
and (v) there is not now, nor, to the knowledge of Monsanto, has there been in
the past, on, in or under any real property owned, leased or operated by
Monsanto or any of its predecessors (a) any underground storage tanks, regulated
pursuant to 40 C.F.R. Part 280 or delegated state programs, dikes or
impoundments containing more than a reportable quantity of Hazardous Materials,
(b) any friable asbestos-containing materials or (c) any polychlorinated
biphenyls.
(k) Intellectual Property. Except as would not reasonably be
expected to have a Material Adverse Effect on Monsanto and except as disclosed
in the Monsanto SEC Reports filed prior to the date of this Agreement, (a)
Monsanto and each of its Subsidiaries owns, or is licensed to use (in each case,
free and clear of any liens), all Intellectual Property used in or necessary for
the conduct of its business as currently conducted; (b) the use of any
Intellectual Property by Monsanto and its Subsidiaries does not infringe on or
otherwise violate the rights of any Person and is in accordance with any
applicable license pursuant to which Monsanto or any Subsidiary acquired the
right to use any Intellectual Property; (c) to the knowledge of Monsanto, no
Person is challenging, infringing on or otherwise violating any right of
Monsanto or any of its Subsidiaries with respect to any Intellectual Property
owned by and/or licensed to Monsanto or its Subsidiaries; and (d) neither
Monsanto nor any of its Subsidiaries has received any written notice of any
pending claim with respect to any Intellectual Property used by Monsanto and its
Subsidiaries and to its knowledge no Intellectual Property owned and/or licensed
by Monsanto or its Subsidiaries is being used or enforced in a manner that would
result in the abandonment, cancellation or unenforceability of such Intellectual
Property.
(l) Rights Agreement. The Board of Directors of Monsanto has
approved an amendment to the Rights Agreement to the effect that none of AHP,
Merger Sub or any of their respective affiliates shall become an "Acquiring
Person", and that no "Share Acquisition Date" or "Distribution Date" (as such
terms are defined in the Rights Agreement) will occur by reason of the approval,
execution or delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(m) Brokers and Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement, based upon arrangements made by
or on behalf of Monsanto except Xxxxxxx, Xxxxx & Co. and BancAmerica Xxxxxxxxx
Xxxxxxxx (the "Monsanto Financial Advisors"), whose fees and expenses
24
will be paid by Monsanto in accordance with Monsanto's agreements with such
firms, copies of which have been provided to AHP.
(n) Opinions of Monsanto Financial Advisors. Monsanto has
received the opinion of the Monsanto Financial Advisors, dated the date of this
Agreement, to the effect that, as of such date, the Exchange Ratio is fair, from
a financial point of view, to the holders of Monsanto Common Stock, copies of
which opinions have been made available to AHP.
(o) Accounting Matters. To the knowledge of Monsanto, neither
Monsanto nor any of its affiliates has taken or agreed to take any action that
would prevent AHP from accounting for the Merger as a "pooling of interests". At
or prior to the date hereof, Monsanto has received a letter from its independent
public accountants addressed to Monsanto, with a copy to AHP and AHP's
independent public accountants, stating that they concur with Monsanto's
conclusion that, as of the date of their report, no conditions exist that would
preclude Monsanto's ability to be a party in a business combination to be
accounted for as a pooling of interests.
(p) Taxes. Each of Monsanto and its Subsidiaries has filed all
Tax Returns required to have been filed (or extensions have been duly obtained)
and has paid all Taxes required to have been paid by it, except where failure to
file such Tax Returns or pay such Taxes would not, in the aggregate, reasonably
be expected to have a Material Adverse Effect on Monsanto. Monsanto has provided
AHP with a true and correct copy of the ruling issued by the Internal Revenue
Service in connection with the spin-off of Solutia, Inc. and, to Monsanto's
knowledge, the representations and warranties of Monsanto contained in such
ruling were true and correct in all material respects as of the time made.
(q) Certain Contracts. As of the date hereof, except as set
forth in the Monsanto SEC Reports filed prior to the date of this Agreement,
neither Monsanto nor any of its Subsidiaries is a party to or bound by (i) any
"material contract" (as such term is defined in Item 601(b)(10) of Regulation
S-K of the SEC) or (ii) any non-competition agreement or any other agreement or
arrangement that limits or otherwise restricts Monsanto or any of its
Subsidiaries or any of their respective affiliates or any successor thereto or
that would, after the Effective Time, to the Knowledge of Monsanto, limit or
restrict Newco or any of its affiliates (including the Surviving Corporation) or
any successor thereto, from engaging or competing in any line of business or in
any geographic area, which agreement or arrangement would reasonably be expected
to have a Material Adverse Effect on Newco and its Subsidiaries (including the
Surviving Corporation and its Subsidiaries), taken together, after giving effect
to the Merger.
(r) Specified Litigation. As of the date hereof, Monsanto has
provided to AHP prior to the execution of this Agreement all information Known
to Monsanto which is relevant and material to an assessment of the liability
exposure of Monsanto and its Subsidiaries with respect to litigation matters
disclosed in the Monsanto SEC Reports or included on the Monsanto Disclosure
Schedule as to which AHP has requested such information (the "Monsanto Specified
Litigation Matters"). As of the date hereof, there is no information relating to
the Monsanto
25
Specified Litigation Matters in the possession of Monsanto, its Subsidiaries or
their counsel not heretofore provided to AHP which would reasonably be expected
to have a Material Adverse Effect on Monsanto.
3.3 Representations and Warranties of AHP and Merger Sub. AHP
and Merger Sub represent and warrant to Monsanto as follows:
(a) Organization. Merger Sub is a corporation duly
incorporated, validly existing and in good standing under the laws of Delaware.
Merger Sub is a direct wholly-owned subsidiary of AHP.
(b) Corprorate Authorization. Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Merger Sub. This Agreement has been duly
executed and delivered by Merger Sub and constitutes a valid and binding
agreement of Merger Sub, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally, by general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(c) Non-Contravantion. The execution, delivery and performance
by Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby do not and will not contravene or conflict with
the certificate of incorporation or by-laws of Merger Sub.
(d) No Business Activities. Merger Sub has not conducted any
activities other than in connection with the organization of Merger Sub, the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby. Merger Sub has no Subsidiaries.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Covenants of AHP. During the period from the date of this
Agreement and continuing until the Effective Time, AHP agrees as to itself and
its Subsidiaries that (except as expressly contemplated or permitted by this
Agreement or the AHP Disclosure Schedule or as required by a Governmental Entity
of competent jurisdiction or to the extent that Monsanto shall otherwise consent
in writing, which consent shall not be unreasonably withheld or delayed):
26
(a) Ordinary Course.
(i) AHP and its Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore
conducted, and shall use all reasonable efforts to preserve intact
their present lines of business, maintain their rights and franchises
and preserve their relationships with customers, suppliers and others
having business dealings with them to the end that their ongoing
businesses shall not be impaired in any material respect at the
Effective Time; provided, however, that no action by AHP or its
Subsidiaries with respect to matters specifically addressed by any
other provision of this Section 4.1 shall be deemed a breach of this
Section 4.1(a)(i) unless such action would constitute a breach of one
or more of such other provisions.
(ii) Other than in connection with acquisitions
permitted by Section 4.1(e), AHP shall not, and shall not permit any of
its Subsidiaries to, (A) enter into any new material line of business
or (B) incur or commit to any capital expenditures or any obligations
or liabilities in connection therewith other than capital expenditures
and obligations or liabilities in connection therewith incurred or
committed to in the ordinary course of business consistent with past
practice and which, together with all such expenditures incurred or
committed since January 1, 1998, are not in excess of the amounts set
forth in Section 4.1(a) of the AHP Disclosure Schedule.
(b) Dividends; Changes in Share Capital. AHP shall not, and
shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare or pay any dividends on or make other distributions in respect of any of
its capital stock, except (A) the declaration and payment of regular quarterly
cash dividends not in excess of $.215 per share of AHP Common Stock with usual
record and payment dates for such dividends in accordance with past dividend
practice, (B) the declaration and payment of regular quarterly cash dividends
not in excess of $.50 per share on the $2 Convertible Preferred Stock with usual
record and payment dates for such dividends in accordance with past dividend
practice and (C) for dividends by wholly owned Subsidiaries of AHP, (ii) split,
combine or reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock, except for any such transaction
by a wholly owned Subsidiary of AHP which remains a wholly owned Subsidiary
after consummation of such transaction or (iii) repurchase, redeem or otherwise
acquire any shares of its capital stock or any securities convertible into or
exercisable for any shares of its capital stock except for the purchase from
time to time by AHP of AHP Common Stock in the ordinary course of business
consistent with past practice in connection with the AHP Benefit Plans.
(c) Issuance of Securities. AHP shall not, and shall not
permit any of its Subsidiaries to, issue, deliver or sell, or authorize or
propose the issuance, delivery or sale of, any shares of its capital stock of
any class, any AHP Voting Debt or any securities convertible into or exercisable
for, or any rights, warrants or options to acquire, any such shares or AHP
Voting Debt, or enter into any agreement with respect to any of the foregoing,
other than (i) the
27
issuance of AHP Common Stock upon the exercise of AHP Stock Options or in
connection with other stock-based benefit plans outstanding on the date hereof,
in each case in accordance with their present terms, (ii) the granting of AHP
Stock Options in the ordinary course of business consistent with past practice
not in excess of the amounts set forth in Section 4.1(c) of the AHP Disclosure
Schedule, (iii) issuances by a wholly owned Subsidiary of AHP of capital stock
to such Subsidiary's parent or another wholly owned Subsidiary of AHP or (iv)
pursuant to acquisitions set forth on the AHP Disclosure Schedule or the
financings therefor.
(d) Governing Documents. Except to the extent required to
comply with their respective obligations hereunder, required by law or required
by the rules and regulations of the NYSE, AHP and Merger Sub shall not amend or
propose to so amend their respective certificates of incorporation, by-laws or
other governing documents, except that Merger Sub may amend its certificate of
incorporation to increase the number of authorized shares of its common stock.
(e) No Acquisitions. Other than (i) acquisitions disclosed on
the AHP Disclosure Schedule and (ii) acquisitions for cash in existing or
related lines of business of AHP the fair market value of the total
consideration (including the value of indebtedness acquired or assumed) for
which does not exceed the amount specified in the aggregate for all such
acquisitions in Section 4.1(e) of the AHP Disclosure Schedule, AHP shall not,
and shall not permit any of its Subsidiaries to, acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial equity interest in
or a substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business organization or
division thereof or otherwise acquire or agree to acquire any assets (other than
the acquisition of assets used in the operations of the business of AHP and its
Subsidiaries in the ordinary course); provided, however, that the foregoing
shall not prohibit (x) internal reorganizations or consolidations involving
existing Subsidiaries of AHP or (y) the creation of new Subsidiaries of AHP
organized to conduct or continue activities otherwise permitted by this
Agreement.
(f) No Dispositions. Other than (i) internal reorganizations
or consolidations involving existing Subsidiaries of AHP, (ii) dispositions
referred to in AHP SEC Reports filed prior to the date of this Agreement or
(iii) as may be required by or in conformance with law or regulation in order to
permit or facilitate the consummation of the transactions contemplated hereby or
the transactions disclosed in the AHP Disclosure Schedule, AHP shall not, and
shall not permit any of its Subsidiaries to, sell, lease, encumber or otherwise
dispose of, or agree to sell, lease, encumber or otherwise dispose of, any of
its assets (including capital stock of Subsidiaries of AHP but excluding
inventory in the ordinary course of business) the fair market value of the total
consideration (including the value of the indebtedness acquired or assumed) for
which does not exceed the amount specified in the aggregate for all such
dispositions in Section 4.1(f) of the AHP Disclosure Schedule.
(g) Investments; Indebtedness. AHP shall not, and shall not
permit any of its Subsidiaries to, other than in connection with actions
permitted by Section 4.1(e), (i) make any loans, advances or capital
contributions to, or investments in, any other Person, other than (x) by
28
AHP or a Subsidiary of AHP to or in AHP or any Subsidiary of AHP, (y) pursuant
to any contract or other legal obligation of AHP or any of its Subsidiaries
existing at the date of this Agreement or (z) in the ordinary course of business
consistent with past practice in an aggregate amount not in excess of the
aggregate amount specified in Section 4.1(g) of the AHP Disclosure Schedule or
(ii) create, incur, assume or suffer to exist any indebtedness, issuances of
debt securities, guarantees, loans or advances not in existence as of the date
of this Agreement except pursuant to the credit facilities, indentures and other
arrangements in existence on the date of this Agreement or in the ordinary
course of business consistent with past practice, in each case as such credit
facilities, indentures and other arrangements may be amended, extended,
modified, refunded, renewed or refinanced after the date of this Agreement.
(h) Pooling; Tax-Free Qualification. AHP shall use its
reasonable best efforts not to, and shall use its reasonable best efforts not to
permit any of its Subsidiaries to, take any action (including any action
otherwise permitted by this Section 4.1) that would prevent or impede the Merger
from qualifying as a "pooling of interests" for accounting purposes or as a
"reorganization" under Section 368 of the Code.
(i) Compensation. Other than as contemplated by Section 5.6 or
by Section 4.1(c) or 4.1(i) of the AHP Disclosure Schedule, AHP shall not
increase the amount of compensation of any director or executive officer except
in the ordinary course of business consistent with past practice or as required
by an existing agreement, make any increase in or commitment to increase any
employee benefits, issue any additional AHP Stock Options, adopt or make any
commitment to adopt any additional employee benefit plan or make any
contribution, other than regularly scheduled contributions, to any AHP Benefit
Plan.
(j) Accounting Methods; Income Tax Elections. Except as
disclosed in AHP SEC Reports filed prior to the date of this Agreement, or as
required by a Governmental Entity, AHP shall not change its methods of
accounting in effect at December 31, 1997, except as required by changes in GAAP
as concurred in by AHP's independent public accountants. AHP shall not (i)
change its fiscal year or (ii) make any material tax election, other than in the
ordinary course of business consistent with past practice.
(k) Certain Agreements. AHP shall not, and shall not permit
any of its Subsidiaries to, enter into any agreement or arrangement that limits
or otherwise restricts AHP or any of its Subsidiaries or any of their respective
affiliates or any successor thereto or that could, after the Effective Time,
limit or restrict Newco or any of its affiliates (including the Surviving
Corporation) or any successor thereto, from engaging or competing in any line of
business or in any geographic area which agreement or arrangement would
reasonably be expected to have a Material Adverse Effect on Newco and its
Subsidiaries (including the Surviving Corporation and its Subsidiaries), taken
together, after giving effect to the Merger.
4.2 Covenants of Monsanto. During the period from the date of
this Agreement and continuing until the Effective Time, Monsanto agrees as to
itself and its Subsidiaries that (except as expressly contemplated or permitted
by this Agreement or the Monsanto Disclosure
29
Schedule or as required by a Governmental Entity of competent jurisdiction or to
the extent that AHP shall otherwise consent in writing, which consent shall not
be unreasonably withheld or delayed):
(a) Ordinary Course.
(i) Monsanto and its Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore
conducted, and shall use all reasonable efforts to preserve intact
their present lines of business, maintain their rights and franchises
and preserve their relationships with customers, suppliers and others
having business dealings with them to the end that their ongoing
businesses shall not be impaired in any material respect at the
Effective Time; provided, however, that no action by Monsanto or its
Subsidiaries with respect to matters specifically addressed by any
other provision of this Section 4.2 shall be deemed a breach of this
Section 4.2(a)(i) unless such action would constitute a breach of one
or more of such other provisions.
(ii) Other than in connection with acquisitions
permitted by Section 4.2(e), Monsanto shall not, and shall not permit
any of its Subsidiaries to, (A) enter into any new material line of
business or (B) incur or commit to any capital expenditures or any
obligations or liabilities in connection therewith other than capital
expenditures and obligations or liabilities in connection therewith
incurred or committed to in the ordinary course of business consistent
with past practice and which, together with all such expenditures
incurred or committed since January 1, 1998, are not in excess of the
amounts set forth in Section 4.2(a) of the Monsanto Disclosure
Schedule.
(b) Dividends; Changes in Share Capital. Monsanto shall not,
and shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare or pay any dividends on or make other distributions in respect of any of
its capital stock, except (A) the declaration and payment of regular quarterly
cash dividends not in excess of $.03 per share of Monsanto Common Stock with
usual record and payment dates for such dividends in accordance with past
dividend practice and (B) for dividends by wholly owned Subsidiaries of
Monsanto, (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for, shares of its capital stock, except for any such
transaction by a wholly owned Subsidiary of Monsanto which remains a wholly
owned Subsidiary after consummation of such transaction, or (iii) repurchase,
redeem or otherwise acquire any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock except for
the purchase from time to time by Monsanto of Monsanto Common Stock (and the
associated Rights) in the ordinary course of business consistent with past
practice in connection with the Monsanto Benefit Plans. Monsanto shall not
redeem the Monsanto Rights.
(c) Issuance of Securities. Monsanto shall not, and shall not
permit any of its Subsidiaries to, issue, deliver or sell, or authorize or
propose the issuance, delivery or sale of,
30
any shares of its capital stock of any class, any Monsanto Voting Debt or any
securities convertible into or exercisable for, or any rights, warrants or
options to acquire, any such shares or Monsanto Voting Debt, or enter into any
agreement with respect to any of the foregoing, other than (i) the issuance of
Monsanto Common Stock (and the associated Rights) upon the exercise of Monsanto
Stock Options or in connection with other stock-based benefits plans outstanding
on the date hereof, in each case in accordance with their present terms, (ii)
issuances by a wholly owned Subsidiary of Monsanto of capital stock to such
Subsidiary's parent or another wholly owned subsidiary of Monsanto, (iii) the
granting of Monsanto Stock Options in the ordinary course of business consistent
with past practice not in excess of the amounts set forth in Section 4.2(c) of
the Monsanto Disclosure Schedule, (iv) pursuant to acquisitions set forth on the
Monsanto Disclosure Schedule or the financings therefor or (v) issuances in
accordance with the Rights Agreement.
(d) Governing Documents. Except to the extent required to
comply with their respective obligations hereunder, required by law or required
by the rules and regulations of the NYSE, Monsanto shall not amend or propose to
so amend their respective certificates of incorporation, by-laws or other
governing documents.
(e) No Acquisitions. Other than (i) acquisitions disclosed on
the Monsanto Disclosure Schedule and (ii) acquisitions for cash in existing or
related lines of business of Monsanto the fair market value of the total
consideration (including the value of indebtedness acquired or assumed) for
which does not exceed the amount specified in the aggregate for all such
acquisitions in Section 4.2(e) of the Monsanto Disclosure Schedule, Monsanto
shall not, and shall not permit any of its Subsidiaries to, acquire or agree to
acquire by merging or consolidating with, or by purchasing a substantial equity
interest in or a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to acquire any
assets (other than the acquisition of assets used in the operations of the
business of Monsanto and its Subsidiaries in the ordinary course); provided,
however, that the foregoing shall not prohibit (x) internal reorganizations or
consolidations involving existing Subsidiaries of Monsanto or (y) the creation
of new Subsidiaries of Monsanto organized to conduct or continue activities
otherwise permitted by this Agreement.
(f) No Dispositions. Other than (i) internal reorganizations
or consolidations involving existing Subsidiaries of Monsanto, (ii) dispositions
referred to in Monsanto SEC Reports filed prior to the date of this Agreement or
(iii) as may be required by or in conformance with law or regulation in order to
permit or facilitate the consummation of the transactions contemplated hereby or
the transactions disclosed in the Monsanto Disclosure Schedule, Monsanto shall
not, and shall not permit any of its Subsidiaries to, sell, lease, encumber or
otherwise dispose of, or agree to sell, lease, encumber or otherwise dispose of,
any of its assets (including capital stock of Subsidiaries of Monsanto but
excluding inventory in the ordinary course of business) the fair market value of
the total consideration (including the value of the indebtedness acquired or
assumed) for which does not exceed the amount specified in the aggregate for all
such dispositions in Section 4.2(f) of the Monsanto Disclosure Schedule.
31
(g) Investments; Indebtedness. Monsanto shall not, and shall
not permit any of its Subsidiaries to, other than in connection with actions
permitted by Section 4.2(e), (i) make any loans, advances or capital
contributions to, or investments in, any other Person, other than (x) by
Monsanto or a Subsidiary of Monsanto to or in Monsanto or any Subsidiary of
Monsanto, (y) pursuant to any contract or other legal obligation of Monsanto or
any of its Subsidiaries existing at the date of this Agreement or (z) in the
ordinary course of business consistent with past practice in an aggregate amount
not in excess of the aggregate amount specified in Section 4.2(g) of the
Monsanto Disclosure Schedule or (ii) create, incur, assume or suffer to exist
any indebtedness, issuances of debt securities, guarantees, loans or advances
not in existence as of the date of this Agreement and except pursuant to the
credit facilities, indentures and other arrangements in existence on the date of
this Agreement or in the ordinary course of business consistent with past
practice, in each case as such credit facilities, indentures and other
arrangements and other existing indebtedness may be amended, extended, modified,
refunded, renewed or refinanced after the date of this Agreement.
(h) Pooling; Tax-Free Qualification. Monsanto shall use its
reasonable best efforts not to, and shall use its reasonable best efforts not to
permit any of its Subsidiaries to, take any action (including any action
otherwise permitted by this Section 4.2) that would prevent or impede the Merger
from qualifying as a "pooling of interests" for accounting purposes or as a
"reorganization" under Section 368 of the Code.
(i) Compensation. Other than as contemplated by Section 5.6 or
by Sections 4.2(c) or 4.2(i) of the Monsanto Disclosure Schedule, Monsanto shall
not increase the amount of compensation of any director or executive officer
except in the ordinary course of business consistent with past practice or as
required by an existing agreement, make any increase in or commitment to
increase any employee benefits, issue any additional Monsanto Stock Options,
adopt or make any commitment to adopt any additional employee benefit plan or
make any contribution, other than regularly scheduled contributions, to any
Monsanto Benefit Plan.
(j) Accounting Methods; Income Tax Elections. Except as
disclosed in Monsanto SEC Reports filed prior to the date of this Agreement, or
as required by a Governmental Entity, Monsanto shall not change its methods of
accounting in effect at December 31, 1997, except as required by changes in GAAP
as concurred in by Monsanto's independent auditors. Monsanto shall not (i)
change its fiscal year or (ii) make any material tax election, other than in the
ordinary course of business consistent with past practice.
(k) Certain Agreements. Monsanto shall not, and shall not
permit any of its Subsidiaries to, enter into any agreement or arrangement that
limits or otherwise restricts Monsanto or any of its Subsidiaries or any of
their respective affiliates or any successor thereto, or that could, after the
Effective Time, limit or restrict Newco or any of its affiliates (including the
Surviving Corporation) or any successor thereto, from engaging or competing in
any line of business or in any geographic area which agreement or arrangement
would reasonably be expected to have a Material Adverse Effect on Newco and its
Subsidiaries (including the Surviving Corporation and its Subsidiaries), taken
together, after giving effect to the Merger.
32
(l) Rights Agreement. Monsanto shall not amend, modify or
waive any provision of the Rights Agreement, and shall not take any action to
redeem the Rights or render the Rights inapplicable to any transaction, other
than to permit another transaction that the Monsanto Board has determined is a
Superior Proposal (as defined in Section 8.11), to be consummated after
termination of this Agreement.
4.3 Governmental Filings. Each party shall (a) confer on a
regular and frequent basis with the other and (b) report (to the extent
permitted by law or regulation or any applicable confidentiality agreement) on
operational matters. Monsanto and AHP shall file all reports required to be
filed by each of them with the SEC (and all other Governmental Entities) between
the date of this Agreement and the Effective Time and shall (to the extent
permitted by law or regulation or any applicable confidentiality agreement)
deliver to the other party copies of all such reports, announcements and
publications promptly after the same are filed.
4.4 Control of Other Party's Business. Nothing contained in
this Agreement shall give Monsanto, directly or indirectly, the right to control
or direct AHP's operations prior to the Effective Time. Nothing contained in
this Agreement shall give AHP, directly or indirectly, the right to control or
direct Monsanto's operations prior to the Effective Time. Prior to the Effective
Time, each of Monsanto and AHP shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its
respective operations.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Preparation of Proxy Statement; Stockholders Meetings.
(a) As promptly as reasonably practicable following the date
hereof, AHP and Monsanto shall prepare and file with the SEC proxy materials
which shall constitute the Joint Proxy Statement/Prospectus (such proxy
statement/prospectus, and any amendments or supplements thereto, the "Joint
Proxy Statement/Prospectus") and AHP shall prepare and file a registration
statement on Form S-4 with respect to the issuance of AHP Common Stock in the
Merger (the "Form S-4"). The Joint Proxy Statement/Prospectus will be included
in and will constitute a part of the Form S-4 as AHP's prospectus. The Form S-4
and the Joint Proxy Statement/Prospectus shall comply as to form in all material
respects with the applicable provisions of the Securities Act and the Exchange
Act and the rules and regulations thereunder. Each of AHP and Monsanto shall use
reasonable best efforts to have the Form S-4 declared effective by the SEC as
promptly as reasonably practicable after filing with the SEC and to keep the
Form S-4 effective as long as is necessary to consummate the Merger and the
transactions contemplated thereby. AHP and Monsanto shall, as promptly as
practicable after receipt thereof, provide the other party copies of any written
comments and advise the other party of any oral comments, with respect to the
Joint Proxy Statement/Prospectus received from the SEC. AHP will provide
Monsanto with a reasonable opportunity to review and comment on any amendment
33
or supplement to the Form S-4 prior to filing such with the SEC, and will
provide Monsanto with a copy of all such filings made with the SEC.
Notwithstanding any other provision herein to the contrary, no amendment or
supplement (including by incorporation by reference) to the Joint Proxy
Statement/Prospectus or the Form S-4 shall be made without the approval of both
parties, which approval shall not be unreasonably withheld or delayed; provided,
that with respect to documents filed by a party which are incorporated by
reference in the Form S-4 or Joint Proxy Statement/Prospectus, this right of
approval shall apply only with respect to information relating to the other
party or its business, financial condition or results of operations. AHP will
use reasonable best efforts to cause the Joint Proxy Statements/Prospectus to be
mailed to AHP stockholders, and Monsanto will use reasonable best efforts to
cause the Joint Proxy Statement/Prospectus to be mailed to Monsanto's
stockholders, in each case as promptly as practicable after the Form S-4 is
declared effective under the Securities Act. AHP shall also take any action
(other than qualifying to do business in any jurisdiction in which it is not now
so qualified or to file a general consent to service of process) required to be
taken under any applicable state securities laws in connection with the Share
Issuance and Monsanto shall furnish all information concerning Monsanto and the
holders of Monsanto Common Stock as may be reasonably requested in connection
with any such action. Each party will advise the other party, promptly after it
receives notice thereof, of the time when the Form S-4 has become effective, the
issuance of any stop order, the suspension of the qualification of the AHP
Common Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Joint Proxy
Statement/Prospectus or the Form S-4. If at any time prior to the Effective Time
any information relating to AHP or Monsanto, or any of their respective
affiliates, officers or directors, should be discovered by AHP or Monsanto which
should be set forth in an amendment or supplement to any of the Form S-4 or the
Joint Proxy Statement/Prospectus so that any of such documents would not include
any misstatement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, the party which discovers such information shall
promptly notify the other party hereto and, to the extent required by law, rules
or regulations, an appropriate amendment or supplement describing such
information shall be promptly filed with the SEC and disseminated to the
stockholders of AHP and Monsanto.
(b) Subject to Section 5.5, Monsanto shall, as promptly as
reasonably practicable following the execution of this Agreement, duly take
(subject to compliance with the provisions of Section 3.1(e) and Section 3.2(e)
(provided that Monsanto shall have used reasonable best efforts to ensure that
such representation is true and correct)), all lawful action to call, give
notice of, convene and hold a meeting of its stockholders (the "Monsanto
Stockholders Meeting") (which meeting the parties intend to be held no later
than October 1, 1998) for the purpose of obtaining the Required Monsanto Vote
with respect to the transactions contemplated by this Agreement, shall take all
lawful action to solicit the adoption of this Agreement by the Required Monsanto
Vote; and the Board of Directors of Monsanto shall recommend adoption of this
Agreement by the stockholders of Monsanto to the effect as set forth in Section
3.2(f), and shall not withdraw, modify or materially qualify in any manner
adverse to AHP such recommendation or take any action or make any statement in
connection with the Monsanto Stockholders Meeting materially inconsistent with
such recommendation (collectively,
34
an "Adverse Change in the Monsanto Recommendation"); provided the foregoing
shall not prohibit accurate disclosure (and such disclosure shall not be deemed
to be an Adverse Change in the Monsanto Recommendation) of factual information
regarding the business, financial condition or results of operations of AHP or
Monsanto or the fact that an Acquisition Proposal has been made, the identity of
the party making such proposal or the material terms of such proposal (provided,
that the Board of Directors of Monsanto does not withdraw, modify or materially
qualify in any manner adverse to AHP its recommendation) in the Form S-4 or the
Joint Proxy Statement/Prospectus, to the extent such information, facts,
identity or terms is required to be disclosed therein under applicable law;
provided further that the Board of Directors of Monsanto may make an Adverse
Change in the Monsanto Recommendation prior to the Monsanto Stockholders Meeting
if (i) after the date of this Agreement, Monsanto acquires Knowledge of facts or
circumstances that the Board of Directors of Monsanto determines in good faith
constitute a material adverse development with respect to AHP and (ii) the Board
of Directors of Monsanto determines in good faith that because of such material
adverse development, based upon the advice of outside legal counsel to Monsanto,
the failure to effect such Adverse Change in the Monsanto Recommendation would
violate the fiduciary duties of the Monsanto Board of Directors under applicable
law.
(c) Subject to Section 5.5, AHP shall, as promptly as
reasonably practicable following the execution of this Agreement, duly take
(subject to compliance with the provisions of Section 3.2(e) and Section 3.1(e)
(provided that AHP shall have used reasonable best efforts to ensure that such
representation is true and correct) all lawful action to call, give notice of,
convene and hold a meeting of its stockholders (the "AHP Stockholders Meeting")
(which meeting the parties intend to be held no later than October 1, 1998) for
the purpose of obtaining the Required AHP Vote with respect to the Share
Issuance, shall take all lawful action to solicit the approval of the Share
Issuance by the Required AHP Vote; and the Board of Directors of AHP shall
recommend approval of the Share Issuance by the stockholders of AHP to the
effect as set forth in Section 3.1(f), and shall not withdraw, modify or
materially qualify in any manner adverse to Monsanto such recommendation or take
any action or make any statement in connection with the AHP Stockholders Meeting
materially inconsistent with such recommendation (collectively, an "Adverse
Change in the AHP Recommendation"); provided the foregoing shall not prohibit
accurate disclosure (and such disclosure shall not be deemed to be an Adverse
Change in the AHP Recommendation) of factual information regarding the business,
financial condition or operations of AHP or Monsanto or the fact that an
Acquisition Proposal has been made, the identity of the party making such
proposal or the material terms of such proposal (provided, that the Board of
Directors of AHP does not withdraw, modify or materially qualify in any manner
adverse to Monsanto its recommendation) in the Form S-4 or the Joint Proxy
Statement/Prospectus, to the extent such information, facts, identity or terms
is required to be disclosed therein under applicable law; provided further that
the Board of Directors of AHP may make an Adverse Change in the AHP
Recommendation prior to the AHP Stockholders Meeting if (i) after the date of
this Agreement, AHP acquires Knowledge of facts or circumstances that the Board
of Directors of AHP determines in good faith constitute a material adverse
development with respect to Monsanto and (ii) the Board of Directors of AHP
determines in good faith that because of such material adverse development,
based upon the advice of
35
outside legal counsel to AHP, the failure to effect such Adverse Change in the
AHP Recommendation would violate the fiduciary duties of the AHP Board of
Directors under applicable law.
5.2 Newco Board of Directors; Office of the Chairman; Name.
(a) At or prior to the Effective Time, AHP will take all
action necessary to (i) reconstitute the Board of Directors of Newco as of the
Effective Time in accordance with Exhibit 5.2(a) hereto, (ii) cause Xx. Xxxx X.
Xxxxxxxx and Xx. Xxxxxx X. Xxxxxxx to be appointed Co-Chairmen and Co-Chief
Executive Officers of Newco as of the Effective Time and establish an "Office of
the Chairmen" as of the Effective Time, each in accordance with Exhibit 5.2(a)
hereto.
(b) AHP shall change its name as of the Effective Time to a
new name to be mutually agreed upon by Monsanto and AHP prior to the Effective
Time.
5.3 Access to Information. Upon reasonable notice, each party
shall (and shall cause its Subsidiaries to) afford to the officers, employees,
accountants, counsel, financial advisors and other representatives of the other
party reasonable access during normal business hours, during the period prior to
the Effective Time, to all its properties, books, contracts, commitments,
records, officers and employees and, during such period, such party shall (and
shall cause its Subsidiaries to) furnish promptly to the other party (a) a copy
of each report, schedule, registration statement and other document filed,
published, announced or received by it during such period pursuant to the
requirements of Federal or state securities laws, as applicable (other than
documents which such party is not permitted to disclose under applicable law),
and (b) consistent with its legal obligations, all other information concerning
it and its business, properties and personnel as such other party may reasonably
request (including consultation on a regular basis with respect to the AHP
Specified Litigation Matters or the Monsanto Specified Litigation Matters, as
the case may be); provided, however, that either party may restrict the
foregoing access to the extent that any law, treaty, rule or regulation of any
Governmental Entity applicable to such party requires such party or its
Subsidiaries to restrict access to any properties or information. The parties
will hold any such information which is non-public in confidence to the extent
required by, and in accordance with, the provisions of the letters dated March
4, 1998 and May 28, 1998 between Monsanto and AHP (the "Confidentiality
Agreements"). Any investigation by AHP or Monsanto shall not affect the
representations and warranties of Monsanto or AHP, as the case may be.
5.4 Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement,
each party will use its reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate the Merger and the
other transactions contemplated by this Agreement as soon as practicable after
the date hereof, including (i) preparing and filing as promptly as practicable
all documentation to effect all necessary applications, notices, petitions,
filings, tax ruling requests and other
36
documents and to obtain as promptly as practicable all consents, waivers,
licenses, orders, registrations, approvals, permits, tax rulings and
authorizations necessary or advisable to be obtained from any third party and/or
any Governmental Entity in order to consummate the Merger or any of the other
transactions contemplated by this Agreement and (ii) taking all reasonable steps
as may be necessary to obtain all such material consents, waivers, licenses,
registrations, permits, authorizations, tax rulings, orders and approvals. In
furtherance and not in limitation of the foregoing, each party hereto agrees to
make an appropriate filing of a Notification and Report Form pursuant to the HSR
Act and any other Regulatory Law (as defined below) with respect to the
transactions contemplated hereby as promptly as practicable after the date
hereof and to supply as promptly as practicable any additional information and
documentary material that may be requested pursuant to the HSR Act and any other
Regulatory Law and to take all other actions necessary to cause the expiration
or termination of the applicable waiting periods under the HSR Act as soon as
practicable. Nothing in this Section 5.4(a) shall require any of AHP and its
Subsidiaries or Monsanto and its Subsidiaries to sell, hold separate or
otherwise dispose of or conduct their business in a specified manner, or agree
to sell, hold separate or otherwise dispose of or conduct their business in a
specified manner, or permit the sale, holding separate or other disposition of,
any assets of AHP, Monsanto or their respective Subsidiaries or the conduct of
their business in a specified manner, whether as a condition to obtaining any
approval from a Governmental Entity or any other Person or for any other reason,
if such sale, holding separate or other disposition or the conduct of their
business in a specified manner is not conditioned on the Closing or would
reasonably be expected to have a Material Adverse Effect on Newco and its
Subsidiaries (including the Surviving Corporation and its Subsidiaries), taken
together, after giving effect to the Merger.
(b) Each of AHP and Monsanto shall, in connection with the
efforts referenced in Section 5.4(a) to obtain all requisite material approvals
and authorizations for the transactions contemplated by this Agreement under the
HSR Act or any other Regulatory Law, use its reasonable best efforts to (i)
cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private party, (ii) promptly inform the other
party of any communication received by such party from, or given by such party
to, the Antitrust Division of the Department of Justice (the "DOJ") or any other
Governmental Entity and of any material communication received or given in
connection with any proceeding by a private party, in each case regarding any of
the transactions contemplated hereby, and (iii) permit the other party to review
any communication given by it to, and consult with each other in advance of any
meeting or conference with, the DOJ or any such other Governmental Entity or, in
connection with any proceeding by a private party, with any other Person, and to
the extent permitted by the DOJ or such other applicable Governmental Entity or
other Person, give the other party the opportunity to attend and participate in
such meetings and conferences. For purposes of this Agreement, "Regulatory Law"
means the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, and all other federal, state and
foreign, if any, statutes, rules, regulations, orders, decrees, administrative
and judicial doctrines and other laws that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade or lessening of competition.
37
(c) Subject to the terms and conditions of this Agreement, in
furtherance and not in limitation of the covenants of the parties contained in
Sections 5.4(a) and 5.4(b), if any administrative or judicial action or
proceeding, including any proceeding by a private party, is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement as violative of any Regulatory Law, each of AHP and Monsanto shall
cooperate in all respects with each other and use its respective reasonable best
efforts to contest and resist any such action or proceeding and to have vacated,
lifted, reversed or overturned any decree, judgment, injunction or other order,
whether temporary, preliminary or permanent, that is in effect and that
prohibits, prevents or restricts consummation of the transactions contemplated
by this Agreement. Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Section 5.4 shall limit a party's right to terminate
this Agreement pursuant to Article VII.
(d) If any objections are asserted with respect to the
transactions contemplated hereby under any Regulatory Law or if any suit is
instituted by any Governmental Entity or any private party challenging any of
the transactions contemplated hereby as violative of any Regulatory Law, each of
AHP and Monsanto shall use its reasonable best efforts to resolve any such
objections or challenge as such Governmental Entity or private party may have to
such transactions under such Regulatory Law so as to permit consummation of the
transactions contemplated by this Agreement.
5.5 Acquisition Proposals. Without limitation on any of such
party's other obligations under this Agreement (including under Article IV
hereof), but except to the extent specifically permitted to such party pursuant
to its Disclosure Schedules under subsections (e) and (f) of Sections 4.1 or
4.2, as the case may be, each of AHP and Monsanto agrees that neither it nor any
of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall use its reasonable best efforts to cause
its and its Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, initiate, solicit, encourage or
knowingly facilitate (including by way of furnishing information) any inquiries
or the making of any proposal or offer with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving it, or any purchase or
sale of the consolidated assets (including without limitation stock of
Subsidiaries and Majority Owned Affiliates) of such party and its Subsidiaries,
taken as a whole, having an aggregate value equal to 10% or more of the market
capitalization of such party, or any purchase or sale of, or tender or exchange
offer for, 10% or more of the equity securities of such party (any such proposal
or offer (other than a proposal or offer made by the other party or an affiliate
thereof) being hereinafter referred to as an "Acquisition Proposal"). Each of
AHP and Monsanto further agrees that neither it nor any of its Subsidiaries nor
any of the officers and directors of it or its Subsidiaries shall, and that it
shall use its reasonable best efforts to cause its and its Subsidiaries'
employees, agents and representatives (including any investment banker, attorney
or accountant retained by it or any of its Subsidiaries) not to, directly or
indirectly, have any discussion with or provide any confidential information or
data to any Person relating to an Acquisition Proposal, or engage in any
negotiations concerning an Acquisition Proposal, or knowingly facilitate any
effort or attempt to make or implement an Acquisition Proposal or accept an
Acquisition
38
Proposal. Notwithstanding anything herein to the contrary, each of AHP and
Monsanto or its respective Board of Directors shall be permitted to (A) to the
extent applicable, comply with Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal, (B) in response to an
unsolicited bona fide written Acquisition Proposal by any Person, recommend
approval of such an unsolicited bona fide written Acquisition Proposal to its
stockholders or effect an Adverse Change in the AHP or Monsanto Recommendation,
as the case may be, or (C) engage in any discussions or negotiations with, or
provide any information to, any Person in response to an unsolicited bona fide
written Acquisition Proposal by any such Person, if and only to the extent that,
in any such case as is referred to in clause (B) or (C), (i) its Stockholders
Meeting shall not have occurred, (ii) its Board of Directors (x) in the case of
clause (B) above, concludes in good faith that such Acquisition Proposal
constitutes a Superior Proposal (as defined in Section 8.11) and provides
written notice of termination of this Agreement pursuant to Section 7.1(f) or
(y) in the case of clause (C) above concludes in good faith that such
Acquisition Proposal could reasonably be expected to result in a Superior
Proposal, (iii) prior to providing any information or data to any Person in
connection with an Acquisition Proposal by any such Person, its Board of
Directors receives from such Person an executed confidentiality agreement
containing confidentiality terms at least as stringent as those contained in the
March 4, 1998 confidentiality agreement between Monsanto and AHP, and (iv) prior
to providing any information or data to any Person or entering into discussions
or negotiations with any Person, its Board of Directors notifies the other party
promptly of such inquiries, proposals or offers received by, any such
information requested from, or any such discussions or negotiations sought to be
initiated or continued with, any of its representatives indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any inquiries, proposals or offers. Each of AHP and Monsanto
agrees that it will promptly keep the other party informed of the status and
terms of any such proposals or offers and the status and terms of any such
discussions or negotiations. Each of AHP and Monsanto agrees that it will, and
will cause its officers, directors and representatives to, immediately cease and
cause to be terminated any activities, discussions or negotiations existing as
of the date of this Agreement with any parties conducted heretofore with respect
to any Acquisition Proposal. Each of AHP and Monsanto agrees that it will use
reasonable best efforts to promptly inform its directors, officers, key
employees, agents and representatives of the obligations undertaken in this
Section 5.5. Nothing in this Section 5.5 shall (x) permit AHP or Monsanto to
terminate this Agreement (except as specifically provided in Article VII hereof)
or (y) affect any other obligation of AHP or Monsanto under this Agreement.
5.6 Employee Benefits Matters.
(a) Continuation and Comparability of Benefits. From the
Effective Time until December 31, 1999, Newco shall provide compensation and
employee benefits under Benefit Plans (as defined in Section 8.11) to the
employees and former employees of AHP and Monsanto and their respective
Subsidiaries (the "Newco Employees") that are in the aggregate no less favorable
than those provided to such persons pursuant to the Benefit Plans in effect on
the date hereof. Without limiting the generality of the foregoing, Newco shall
continue through December 31, 1999 the Monsanto Separation Plan (effective
January 1, 1998) in effect for Newco
39
Employees who are employed by Monsanto or any of its Subsidiaries as of the
Effective Time, and, to the extent AHP adopts a severance plan (as provided for
in Section 4.1(i) of the AHP Disclosure Schedule), for those Newco Employees who
are employed by AHP or any of its Subsidiaries as of the Effective Time, any
such AHP severance plan, in each case without any amendment adverse to such
Newco Employees, other than as required by law. Nothing herein shall prohibit
any changes to the Benefit Plans that may be (i) required by law (including,
without limitation, any applicable qualification requirements of Section 401(a)
of the Code), (ii) necessary as a technical matter to reflect the transactions
contemplated hereby or (iii) required for Newco to provide or permit investment
in its securities. Furthermore, nothing herein shall require Newco to continue
any particular Benefit Plan or prevent the amendment or termination thereof
(subject to the maintenance, in the aggregate, of the benefits as provided in
the preceding sentence).
(b) Pre-Existing Limitations; Deductibles; Service Credit.
With respect to any Benefit Plans in which any Newco Employees first become
eligible to participate, on or after the Effective Time, and in which are plans
that the Newco Employees did not participate prior to the Effective Time (the
"New Newco Plans"), Newco shall: (A) waive all pre-existing conditions
exclusions and waiting periods with respect to participation and coverage
requirements applicable to the Newco Employees under any New Newco Plans in
which such employees may be eligible to participate after the Effective Time;
(B) provide each Newco Employee with credit for any co-payments and deductibles
paid prior to the Effective Time (to the same extent such credit was given under
the analogous Benefit Plan prior to the Effective Time) in satisfying any
applicable deductible or out-of-pocket requirements under any New Newco Plans in
which such employees may be eligible to participate after the Effective Time,
and (C) recognize all service of the Newco Employees with AHP and Monsanto,
respectively, for all purposes (including, without limitation, purposes of
eligibility to participate, vesting credit, entitlement to benefits, and benefit
accrual) in any New Newco Plan in which such employees may be eligible to
participate after the Effective Time, to the extent such service is taken into
account under the applicable New Newco Plan; provided, that the foregoing shall
not apply to the extent it would result in duplication of benefits, nor shall it
apply with respect to benefit accrual under any New Newco Plan that is a cash
balance pension plan.
(c) Treatment of Equity and Equity - Based Benefit Plans. With
respect to any AHP and Monsanto Benefit Plan in which Newco Employees
participated immediately prior to the Effective Time that provides incentive
compensation or bonuses relating to the equity securities (or any equivalent
thereof) of either AHP or Monsanto (the "Equity Benefit Plans"), AHP and
Monsanto shall, as soon as reasonably practicable after the date hereof, create
a task force comprised of key executive officers and other employees designated
by the Compensation Committee or the Board of Directors of each of AHP and
Monsanto (half of whom shall be employed by AHP and half of whom shall be
employed by Monsanto) (the "Task Force") which shall review all Equity Benefit
Plans and recommend appropriate equity incentive plans for Newco. In so doing,
the Task Force shall fully and fairly take into account the past practices of
both AHP and Monsanto and shall in good faith consider appropriate methods by
which Newco
40
Employees may be fairly compensated through the use of Equity Benefit Plans and
the relationship such use bears to cash compensation.
5.7 Fees and Expenses. Whether or not the Merger is
consummated, all Expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
Expenses, except (a) if the Merger is consummated, the Surviving Corporation
shall pay, or cause to be paid, any and all property or transfer taxes imposed
on Monsanto or its Subsidiaries and (b) Expenses incurred in connection with the
filing, printing and mailing of the Joint Proxy Statement/Prospectus, which
shall be shared equally by AHP and Monsanto and (c) if applicable, as provided
in Section 7.2. As used in this Agreement, "Expenses" includes all out-of-pocket
expenses (including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby,
including the preparation, printing, filing and mailing of the Joint Proxy
Statement/Prospectus and the solicitation of stockholder approvals and all other
matters related to the transactions contemplated hereby.
5.8 Directors' and Officers' Indemnification and Insurance.
The Surviving Corporation shall, and Newco shall cause the Surviving Corporation
to, (i) indemnify and hold harmless, and provide advancement of expenses to, all
past and present directors, officers and employees of Monsanto and its
Subsidiaries to the same extent such persons are indemnified or have the right
to advancement of expenses as of the date of this Agreement by Monsanto pursuant
to Monsanto's certificate of incorporation, by-laws and indemnification
agreements, if any, in existence on the date hereof with any directors, officers
and employees of Monsanto and its Subsidiaries for acts or omissions occurring
at or prior to the Effective Time (including for acts or omissions occurring in
connection with the approval of this Agreement and the consummation of the
transactions contemplated hereby), (ii) include and cause to be maintained in
effect in the Surviving Corporation's (or any successor's) certificate of
incorporation and by-laws for a period of six years after the Effective Time,
the current provisions regarding elimination of liability of directors,
indemnification of officers, directors and employees and advancement of expenses
contained in the certificate of incorporation and by-laws of Monsanto and (iii)
cause to be maintained for a period of six years after the Effective Time the
current policies of directors' and officers' liability insurance and fiduciary
liability insurance maintained by Monsanto (provided that the Surviving
Corporation (or any successor) may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured) with respect to claims arising
from facts or events that occurred on or before the Effective Time; provided,
however, that in no event shall the Surviving Corporation be required to expend
in any one year an amount in excess of 200% of the annual premiums currently
paid by Monsanto for such insurance; and, provided, further, that if the annual
premiums of such insurance coverage exceed such amount, the Surviving
Corporation shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
41
5.9 Specified Litigation. (a) From the date hereof to the
Closing Date, AHP shall promptly advise Monsanto of all developments, and
provide Monsanto all additional information not otherwise provided pursuant to
Section 3.1(q), Known to AHP from time to time which is relevant and material to
an assessment of the liability exposure of AHP and its Subsidiaries with respect
to the AHP Specified Litigation Matters.
(b) From the date hereof to the Closing Date, Monsanto shall
promptly advise AHP of all developments, and provide AHP all additional
information not otherwise provided pursuant to Section 3.2(r), Known to Monsanto
from time to time which is relevant and material to an assessment of the
liability exposure of Monsanto and its Subsidiaries with respect to the Monsanto
Specified Litigation Matters.
5.10 Public Announcements. AHP and Monsanto shall use
reasonable best efforts to develop a joint communications plan and each party
shall use reasonable best efforts (i) to ensure that all press releases and
other public statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan, and (ii) unless
otherwise required by applicable law or by obligations pursuant to any listing
agreement with or rules of any securities exchange, to consult with each other
before issuing any press release or otherwise making any public statement with
respect to this Agreement or the transactions contemplated hereby. In addition
to the foregoing, except to the extent disclosed in or consistent with the Joint
Proxy Statement/Prospectus in accordance with the provisions of Section 5.1,
neither AHP nor Monsanto shall issue any press release or otherwise make any
public statement or disclosure concerning the other party or the other party's
business, financial condition or results of operations without the consent of
the other party, which consent shall not be unreasonably withheld or delayed.
5.11 Accountant's Letters. (a) AHP shall use reasonable best
efforts to cause to be delivered to Monsanto two letters from AHP's independent
public accountants, one dated the date on which the Form S-4 shall become
effective and one dated the Closing Date, each addressed to AHP and Monsanto, in
form and substance reasonably satisfactory to Monsanto and customary in scope
and substance for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4. AHP shall use
reasonable best efforts to cause to be delivered to Monsanto a letter from AHP's
independent accountants dated as of the date the Form S-4 is declared effective
and as of the Closing Date, stating that accounting for the Merger as a pooling
of interests under Opinion 16 of the Accounting Principles Board and applicable
SEC rules and regulations is appropriate if the Merger is closed and consummated
as contemplated by this Agreement.
(b) Monsanto shall use reasonable best efforts to cause to be
delivered to AHP two letters from Monsanto's independent public accountants, one
dated the date on which the Form S-4 shall become effective and one dated the
Closing Date, each addressed to Monsanto and AHP, in form and substance
reasonably satisfactory to AHP and customary in scope and substance for comfort
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4. Monsanto shall use reasonable
best efforts to
42
cause to be delivered to AHP a letter from Monsanto's independent public
accountants, addressed to Monsanto and AHP, dated as of the date the Form S-4 is
declared effective and as of the Closing Date, stating that they concur with
Monsanto's conclusion that, as of the date of their report, no conditions exist
that would preclude Monsanto's ability to be a party in a business combination
to be accounted for as a pooling of interests.
(c) Each of AHP and Monsanto shall use reasonable best efforts
to cause the transactions contemplated by this Agreement, including the Merger,
to be accounted for as a pooling of interests under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations, and such accounting
treatment to be accepted by the SEC.
5.12 Listing of Shares of AHP Common Stcok. AHP shall use its
reasonable best efforts to cause the shares of AHP Common Stock to be issued in
the Merger and the shares of AHP Common Stock to be reserved for issuance upon
exercise of the Monsanto Stock Options to be approved for listing on the NYSE,
subject to official notice of issuance, prior to the Closing Date.
5.13 Dividends. After the date of this Agreement, each of AHP
and Monsanto shall coordinate with the other the payment of dividends with
respect to the AHP Common Stock and Monsanto Common Stock and the record dates
and payment dates relating thereto, it being the intention of the parties hereto
that holders of AHP Common Stock and Monsanto Common Stock shall not receive two
dividends, or fail to receive one dividend, for any single calendar quarter with
respect to their shares of AHP Common Stock and/or Monsanto Common Stock or any
shares of AHP Common Stock that any such holder receives in exchange for such
shares of Monsanto Common Stock in the Merger.
5.14 Affiliates. (a) Not less than 45 days prior to the
Effective Time, Monsanto shall deliver to AHP a letter identifying all persons
who, in the opinion of Monsanto, may be deemed at the time this Agreement is
submitted for adoption by the stockholders of Monsanto, "affiliates" of Monsanto
for purposes of Rule 145 under the Securities Act or for purposes of qualifying
the Merger for pooling of interests accounting treatment under Opinion 16 of the
Accounting Principles Board and applicable SEC rules and regulations, and such
list shall be updated as necessary to reflect changes from the date thereof.
Monsanto shall use reasonable best efforts to cause each person identified on
such list to deliver to AHP not less than 30 days prior to the Effective Time, a
written agreement substantially in the form attached as Exhibit 5.14 hereto (an
"Affiliate Agreement"). Not less than 45 days prior to the Effective Time, AHP
shall deliver to Monsanto a letter identifying all persons who, in the opinion
of AHP, may be deemed "affiliates" of AHP for purposes of qualifying the Merger
for pooling of interests accounting treatment under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations, and such list shall
be updated as necessary to reflect changes from the date hereof. AHP shall use
reasonable best efforts to cause each person identified on such list to deliver
to Monsanto not less than 30 days prior to the Effective Time, a written
agreement including the substance of paragraphs (C), (D) and E of Exhibit 5.14
hereto.
43
(b) Newco shall use its reasonable best efforts to publish no
later than 90 days after the end of the first month after the Effective Time in
which there are at least 30 days of post-Merger combined operations (which month
may be the month in which the Effective Time occurs), combined sales and net
income figures as contemplated by and in accordance with the terms of SEC
Accounting Series Release No. 135.
5.15 Employment Agreements. As promptly as practicable after
the date of this Agreement, AHP shall offer to enter into an employment
agreement with Xxxx X. Xxxxxxxx and an amended and restated employment agreement
with Xxxxxx X. Xxxxxxx, to become effective as of the Effective Time, which
shall be substantially consistent with the terms and principles set forth in
Section 5.15 of each of the AHP Disclosure Schedule and the Monsanto Disclosure
Schedule.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of Monsanto, AHP and Merger Sub to effect the
Merger are subject to the satisfaction or waiver on or prior to the Closing Date
of the following conditions:
(a) Stockholder Approval. (i) Monsanto shall have obtained the
Required Monsanto Vote in connection with the adoption of this Agreement by the
stockholders of Monsanto and (ii) AHP shall have obtained the Required AHP Vote
in connection with the approval of the Share Issuance by the stockholders of
AHP.
(b) No Injunctions or Restraints, Illegality. No Laws shall
have been adopted or promulgated, and no temporary restraining order,
preliminary or permanent injunction or other order issued by a court or other
Governmental Entity of competent jurisdiction shall be in effect, (i) having the
effect of making the Merger illegal or otherwise prohibiting consummation of the
Merger or (ii) which otherwise would reasonably be expected to have a Material
Adverse Effect on Newco and its Subsidiaries (including the Surviving
Corporation and its Subsidiaries), taken together after giving effect to the
Merger; provided, however, that the provisions of this Section 6.1(b) shall not
be available to any party whose failure to fulfill its obligations pursuant to
Section 5.4 shall have been the cause of, or shall have resulted in, such order
or injunction.
(c) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired.
(d) Governmental and Regulatory Approvals. Other than the
filing provided for under Section 1.3 and filings pursuant to the HSR Act (which
are addressed in Section 6.1(c)), all consents, approvals and actions of,
filings with and notices to any Governmental Entity required of AHP, Monsanto or
any of their Subsidiaries to consummate the Merger, the Share Issuance and the
other transactions contemplated hereby, the failure of which to be
44
obtained or taken would reasonably be expected to have a Material Adverse Effect
on Newco and its Subsidiaries (including the Surviving Corporation and its
Subsidiaries), taken together after giving effect to the Merger, shall have been
obtained; provided however, that the provisions of this Section 6.1(d) shall not
be available to any party whose failure to fulfill its obligations pursuant to
Section 5.4 shall have been the cause of, or shall have resulted in, the failure
to obtain such consent or approval.
(e) NYSE Listing. The shares of AHP Common Stock to be issued
in the Merger and such other shares to be reserved for issuance in connection
with the Merger shall have been approved for listing on the NYSE, subject to
official notice of issuance.
(f) Effectiveness of the Form S-4. The Form S-4 shall have
been declared effective by the SEC under the Securities Act. No stop order
suspending the effectiveness of the Form S-4 shall have been issued by the SEC
and no proceedings for that purpose shall have been initiated or threatened by
the SEC.
(g) Pooling. Monsanto shall have received and delivered to AHP
and AHP's independent public accountants, a letter from its independent public
accountants, dated as of the date the Form S-4 is declared effective and as of
the Closing Date, stating that Monsanto qualifies as a "combining company" in
accordance with the criteria set forth in Opinion 16 of the Accounting
Principles Board and accordingly is a poolable entity. AHP shall received and
delivered to Monsanto, a letter from its independent public accountants, dated
as of the date the Form S-4 is declared effective and as of the Closing Date,
stating that accounting for the Merger as a pooling of interests under Opinion
16 of the Accounting Principles Board and applicable SEC rules and regulations
is appropriate if the Merger is closed and consummated as contemplated by this
Agreement. Notwithstanding the foregoing, the satisfaction of this Section
6.1(g) shall not be a condition to the obligations of a party to effect the
Merger if the failure to satisfy this condition results from any action taken or
agreed to be taken by or on behalf of such party.
6.2 Additional Conditions to Obligations of AHP and Merger
Sub. The obligations of AHP and Merger Sub to effect the Merger are subject to
the satisfaction of, or waiver by AHP, on or prior to the Closing Date of the
following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Monsanto set forth in this Agreement that is
qualified as to Material Adverse Effect shall be true and correct, and each of
the representations and warranties of Monsanto set forth in this Agreement that
is not so qualified shall be true and correct in all material respects, in each
case as of the date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date (except to the extent in either case that such
representations and warranties speak as of another date) (provided, that the
foregoing condition shall not apply to the representation and warranty set forth
in the second sentence of Section 3.2(r) except with respect to any breaches
thereof as to which AHP has notified Monsanto prior to the AHP Stockholders
45
Meeting), and AHP shall have received a certificate of the chief executive
officer and the chief financial officer of Monsanto to such effect.
(b) Performance of Obligations of Monsanto. Monsanto shall
have performed or complied with all agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date that are
qualified as to Material Adverse Effect and shall have performed or complied in
all material respects with all other agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date that are
not so qualified, and AHP shall have received a certificate of the chief
executive officer and the chief financial officer of Monsanto to such effect.
(c) Tax Opinion. AHP shall have received from Xxxxxxx Xxxxxxx
& Xxxxxxxx, counsel to AHP, on or before the Form S-4 shall become effective
and, subsequently, on the Closing Date, a written opinion dated as of such dates
substantially in the form of Exhibit 6.2(c)(1). In rendering such opinion,
counsel to AHP shall be entitled to rely upon information, representations and
assumptions provided by AHP and Monsanto substantially in the form of Exhibits
6.2(c)(2) and 6.2(c)(3) (allowing for such amendments to the representations as
counsel to AHP deems necessary).
(d) Rights Agreement. No Share Acquisition Date or
Distribution Date shall have occurred pursuant to the Rights Agreement.
6.3 Additional Conditions to Obligations of Monsanto. The
obligations of Monsanto to effect the Merger are subject to the satisfaction of,
or waiver by Monsanto, on or prior to the Closing Date of the following
additional conditions:
(a) Representations and Warranties. Each of the
representations and warranties of AHP set forth in this Agreement that is
qualified as to Material Adverse Effect shall be true and correct, and each of
the representations and warranties of AHP set forth in this Agreement that is
not so qualified shall be true and correct in all material respects, in each
case as of the date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date (except to the extent in either case that such
representations and warranties speak as of another date) (provided, that the
foregoing condition shall not apply to the representation and warranty set forth
in the second sentence of Section 3.1(q) except with respect to any breaches
thereof as to which Monsanto has notified AHP prior to the Monsanto Stockholders
Meeting), and Monsanto shall have received a certificate of the chief executive
officer and the chief financial officer of AHP to such effect.
(b) Performance of Obilgations of AHP. AHP shall have
performed or complied with all agreements and covenants required to be performed
by it under this Agreement at or prior to the Closing Date that are qualified as
to Material Adverse Effect and shall have performed or complied in all material
respects with all other agreements and covenants required to be performed by it
under this Agreement at or prior to the Closing Date that are not so
46
qualified, and Monsanto shall have received a certificate of the chief executive
officer and the chief financial officer of AHP to such effect.
(c) Tax Opinion. Monsanto shall have received from Xxxxxx &
Xxxxxx, special tax counsel to Monsanto, on or before the Form S-4 shall become
effective and, subsequently, on the Closing Date, a written opinion dated as of
such dates substantially in the form of Exhibit 6.3(c)(1). In rendering such
opinion, counsel to Monsanto shall be entitled to rely upon information,
representations and assumptions provided by AHP and Monsanto substantially in
the form of Exhibits 6.2(c)(2) and 6.2(c)(3) (allowing for such amendments to
the representations as counsel to Monsanto deems necessary).
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, and except as provided below,
whether before or after approval of the matters presented in connection with the
Merger by the stockholders of Monsanto or AHP:
(a) By mutual written consent of AHP and Monsanto (which
consent shall not be unreasonably withheld (i) in the case of AHP, if the
conditions set forth in Sections 6.3(a) or 6.3(b) would not reasonably be
expected to be satisfied prior to the Termination Date (as defined in Section
7.1(b)) through the exercise of AHP's reasonable best efforts or (ii) in the
case of Monsanto, if the conditions set forth in Section 6.2(a) or 6.2(b) would
not reasonably be expected to be satisfied prior to the Termination Date through
the exercise of Monsanto's reasonable best efforts);
(b) By either Monsanto or AHP if the Effective Time shall not
have occurred on or before May 31, 1999 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 7.1(b)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement (including without limitation such party's obligations set
forth in Section 5.4) has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before the Termination Date;
(c) By either Monsanto or AHP if any Governmental Entity (i)
shall have issued an order, decree or ruling or taken any other action (which
the parties shall have used their reasonable best efforts to resist, resolve or
lift, as applicable, in accordance with Section 5.4) permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable or (ii) shall have failed to issue an order, decree or
ruling or to take any other action (which order, decree, ruling or other action
the parties shall have used their reasonable best efforts to obtain, in
accordance with Section 5.4), in the case of each of (i) and (ii) which is
47
necessary to fulfill the conditions set forth in subsections 6.1(c) and (d), as
applicable, and such denial of a request to issue such order, decree, ruling or
take such other action shall have become final and nonappealable; provided,
however, that the right to terminate this Agreement under this Section 7.1(c)
shall not be available to any party whose failure to comply with Section 5.4 has
been the cause of such action or inaction;
(d) By either Monsanto or AHP if (i) the approval by the
stockholders of Monsanto required for the consummation of the Merger shall not
have been obtained by reason of the failure to obtain the Required Monsanto Vote
or (ii) the approval by the stockholders of AHP required for the Share Issuance
shall not have been obtained by reason of the failure to obtain the Required AHP
Vote, in each case upon the taking of such vote at a duly held meeting of
stockholders of Monsanto or AHP, as the case may be, or at any adjournment
thereof;
(e) By AHP or Monsanto, as the case may be, if the Board of
Directors of the other party, prior to the other party's required stockholders
approval, shall approve or recommend a Superior Proposal pursuant to Section 5.5
or shall resolve to take any of such actions;
(f) By AHP or Monsanto, as the case may be, at any time prior
to its required stockholders approval, upon three Business Days' prior notice to
the other party, if its Board of Directors shall have determined as of the date
of such notice that an Acquisition Proposal is a Superior Proposal; provided,
however, that (i) the terminating party shall have complied with Section 5.5,
(ii) prior to any such termination, the terminating party shall, if requested by
the other party in connection with a revised proposal by it, negotiate in good
faith for such three Business Day period with the other party and (iii) the
Board of Directors of the terminating party shall have concluded in good faith,
as of the effective date of such termination, after taking into account any
revised proposal by the other party during such three Business Day period, that
an Acquisition Proposal is a Superior Proposal and ; provided, further, that it
shall be a condition to termination by the terminating party pursuant to this
Section 7.l(f) that the terminating party shall have made the payment of the fee
to the other party required by Section 7.2(b)(i)(A) or Section 7.2(c)(i)(A), as
the case may be;
(g) By either party, if (A) the Board of Directors of AHP
shall have effected an Adverse Change in the AHP Recommendation (or resolved to
take such action) or (B) the Board of Directors of Monsanto shall have effected
an Adverse Change in the Monsanto Recommendation (or resolved to take such
action);
(h) By Monsanto, if the Monsanto Board of Directors so
determines at any time during the five-day period commencing with the
Determination Date, if both of the following conditions are satisfied:
(1) The Average AHP Closing Price on the Determination Date of
shares of AHP Common Stock shall be less than the product of $48 5/16
(the "AHP Starting Price") and 0.825; and
48
(2) (A) The number obtained by dividing the Average AHP
Closing Price on the Determination Date by the AHP Starting Price shall
be less than (B) the number obtained by dividing the Average Index
Price on the Determination Date by the Average Index Price on May 29,
1998 and subtracting 0.175 (the satisfaction of such conditions (1) and
(2) being hereinafter referred to as the "AHP Stock Decline").
For purposes of this Section 7.1(h), the following term shall
have the following meanings:
"Average AHP Closing Price on the Determination Date" means
the average of the daily closing prices of AHP Common Stock as reported on the
NYSE Composite Transactions Reporting System (as reported in The Wall Street
Journal or, if not reported therein, in another authoritative source) for the
fifteen consecutive NYSE full trading days (in which such shares are traded on
the NYSE) ending at the close of trading on the Determination Date (the "AHP
Stock Measurement Period").
For purposes of Section 7.1(h) and Section 7.1(i), the
following terms shall have the following meanings:
"Average Index Price" means, as of May 29, 1998 or the
Determination Date, the weighted average (weighted in accordance with the market
capitalization of such companies on May 29, 1998) of the average of the daily
closing prices of the common stocks of the companies composing the Index Group
as reported on the NYSE Composite Transactions Reporting System (as reported in
The Wall Street Journal or, if not reported therein, in another authoritative
source) on May 29, 1998 or for the fifteen consecutive NYSE full trading days
(in which such shares are traded on the NYSE) ending at the close of trading on
the Determination Date, as the case may be.
"Determination Date" means the trading day immediately
preceding the date on which all the conditions to Closing (other than conditions
that, by their terms, cannot be satisfied until the Closing Date) set forth in
Article VI shall have been satisfied or waived, subject to change as provided in
Section 7.1(h) or 7.1(i).
"Index Group" means the group of the eight (8) companies
listed in Section 7.1(h) of the AHP Disclosure Schedule. In the event that the
common stock of any such company ceases to be publicly traded, such company will
be removed from the Index Group, and the weights (which have been determined as
set forth in Average Index Price based on market capitalization) redistributed
proportionately for purposes of determining the Average Index Price.
Notwithstanding the foregoing provisions of this Section
7.1(h), if (i) the AHP Stock Price Decline would not be deemed to have occurred
pursuant to Section 7.1(h) if the Determination Date is not changed as described
in this paragraph; (ii) at any time after the commencement of the AHP Stock
Measurement Period and on or prior to the Closing Date, any change, circumstance
or event is publicly disclosed by AHP in a SEC Report or a Dow Xxxxx
49
New Release which relates to the AHP Specified Litigation Matters and which is,
or would reasonably be expected to be, adverse to the business, financial
condition or results of operations of AHP or its Subsidiaries (the "AHP Public
Disclosure"), and (iii) the material event, change or circumstance constituting
the AHP Public Disclosure was (A) Known to AHP prior to the commencement of the
AHP Stock Measurement Period or (B) became Known to AHP during the AHP Stock
Measurement Period but was not disclosed by AHP within three Business Days of
becoming Known to AHP (such third Business Day is hereinafter referred to as the
"Specified AHP Disclosure Date"), the Determination Date shall be deemed not to
have occurred (x) in the case of clause (iii)(A) of this sentence, until fifteen
Business Days after the AHP Public Disclosure or (y) in the case of clause
(iii)(B) of this sentence, until the number of Business Days following the AHP
Public Disclosure is equal to the number of Business Days, if any, in the period
between the Specified AHP Disclosure Date and to and including the date of the
originally scheduled Determination Date; provided, that the Determination Date
shall not be delayed, if at all, in the case of each of clause (x) and (y)
beyond the later of the originally scheduled Determination Date or the fifth
Business Day following the date of the AHP Public Disclosure (such later date
being referred to as the "Interim Date") unless, during the period (the "Interim
Measurement Period") commencing with the first Business Day following the date
of the AHP Public Disclosure and ending on the Interim Date, an AHP Stock
Decline would have occurred pursuant to the provisions of this Section 7.1(h) if
the Interim Date and the Interim Measurement Period were used for purposes of
such determination. The foregoing provisions of this Section 7.1(h) relating to
the potential delay of the Determination Date may be waived by Monsanto.
If between the date of this Agreement and the Determination
Date, the outstanding shares of AHP Common Stock, Monsanto Common Stock or any
security in the Index Group shall have been changed into a different number of
shares or a different class by reason of any reclassification, recapitalization,
stock split, split-up, combination or exchange of shares or a stock dividend or
dividend payable in any other securities or extraordinary cash dividend shall be
declared with a record date within such period, or any similar event shall have
occurred, appropriate adjustments shall be made to the Average AHP Closing Price
on the Determination Date, the Average Monsanto Closing Price on the
Determination Date (as defined in Section 7.1(i)) or the Average Index Price, as
the case may be, for purposes of this Agreement.
(i) By AHP, if the AHP Board of Directors so determines, at
any time during the five-day period commencing with the Determination Date, if
both of the following conditions are satisfied:
(1) The Average Monsanto Closing Price on the Determination
Date of shares of Monsanto Common Stock shall be less than the product
of $55 3/8 (the "Monsanto Starting Price") and 0.825; and
(2) (A) The number obtained by dividing the Average Monsanto
Closing Price on the Determination Date by the Monsanto Starting Price
shall be less than (B) the number obtained by dividing the Average
Index Price on the Determination Date by the
50
Average Index Price on May 29, 1998 and subtracting 0.175 (the
satisfaction of such conditions (1) and (2) being hereinafter referred
to as the "Monsanto Stock Decline").
For purposes of this Section 7.1(i), the following term shall
have the following meanings:
"Average Monsanto Closing Price on the Determination Date"
means the average of the daily closing prices of Monsanto Common Stock as
reported on the NYSE Composite Transactions Reporting System (as reported in The
Wall Street Journal or, if not reported therein, in another authoritative
source) for the fifteen consecutive NYSE full trading days (in which such shares
are traded on the NYSE) ending at the close of trading on the Determination Date
(the "Monsanto Stock Measurement period").
Notwithstanding the foregoing provisions of this Section
7.1(i), if (i) the Monsanto Stock Price Decline would not be deemed to have
occurred pursuant to Section 7.1(i) if the Determination Date is not changed as
described in this paragraph; (ii) at any time after the commencement of the
Monsanto Stock Measurement Period and on or prior to the Closing Date, any
change, circumstance or event is publicly disclosed by Monsanto in a SEC Report
or a Dow Xxxxx News Release which relates to the Monsanto Specified Litigation
Matters and which is, or would reasonably be expected to be, adverse to the
business, financial condition or results of operations of Monsanto or its
Subsidiaries (the "Monsanto Public Disclosure") and (iii) the material event,
change or circumstance constituting the Monsanto Public Disclosure was (A) Known
to Monsanto prior to the commencement of the Monsanto Stock Measurement Period
or (B) became Known to Monsanto during the Monsanto Stock Measurement Period but
was not disclosed by Monsanto within three Business Days of becoming Known to
Monsanto (such third Business Day is hereinafter referred to as the "Specified
Monsanto Disclosure Date"), the Determination Date shall be deemed not to have
occurred (x) in the case of clause (iii)(A) of this sentence, until fifteen
Business Days after the Monsanto Public Disclosure or (y) in the case of clause
(iii)(B) of this sentence, until the number of Business Days following the
Monsanto Public Disclosure is equal to the number of Business Days, if any, in
the period between the Specified Monsanto Disclosure Date to and including the
date of the originally scheduled Determination Date; provided, that the
Determination Date shall not be delayed, if at all, in the case of each of
clause (x) and (y) beyond the later of the originally scheduled Determination
Date or the fifth Business Day following the date of the Monsanto Public
Disclosure (such later date being referred to as the "Interim Date") unless,
during the period (the "Interim Measurement Period") commencing with the first
Business Day following the date of the Monsanto Public Disclosure and ending on
the Interim Date, a Monsanto Stock Decline would have occurred pursuant to the
provisions of this Section 7.1(i) if the Interim Date and the Interim
Measurement Period were used for purposes of such determination. The foregoing
provisions of this Section 7.1(i) relating to the potential delay of the
Determination Date may be waived by AHP.
(j) By Monsanto, if any Person shall have acquired beneficial
ownership of 30% or more of the outstanding shares of AHP Common Stock and such
Person or its affiliates shall
51
be required under the rules and regulations of the SEC to file a Schedule 13D
(or any successor form) with respect to such acquisition or ownership; or
(k) By AHP, if a Share Acquisition Date shall have occurred
pursuant to the Rights Agreement.
7.2 Effect of Termination.
(a) In the event of termination of this Agreement by either
Monsanto or AHP as provided in Section 7.1, this Agreement shall forthwith
become void and there shall be no liability or obligation on the part of AHP or
Monsanto or their respective officers or directors except with respect to
Section 3.1(l), Section 3.2(m), the second sentence of Section 5.3, Section 5.7,
this Section 7.2 and Article VIII, which provisions shall survive such
termination, and except that, notwithstanding anything to the contrary contained
in this Agreement, neither AHP nor Monsanto shall be relieved or released from
any liabilities or damages arising out of its willful material breach of this
Agreement.
(b) (i) AHP shall pay Monsanto the sum of $700 million (the
"AHP Alternative Transaction Fee") if this Agreement is terminated solely as
follows: (A) if AHP shall terminate this Agreement pursuant to Section 7.1(f),
(B) if (I) either party shall terminate this Agreement pursuant to Section
7.1(d)(ii) due to the failure of AHP's stockholders to approve the Share
Issuance, (II) at any time after the date of this Agreement and at or before the
date of the AHP Stockholders Meeting a Business Combination (as defined in
Section 7.2(d)) proposal with respect to AHP shall have been publicly announced
or otherwise communicated to the AHP Board of Directors, and (III) within twelve
months of the termination of this Agreement, AHP enters into a definitive
agreement with any third party with respect to a Business Combination or a
Business Combination with respect to AHP is consummated, (C) if Monsanto shall
terminate this Agreement pursuant to Section 7.1(e) or 7.1(j), (D) if (I) either
party shall terminate this Agreement pursuant to Section 7.1(b), (II) at any
time after the date of this Agreement and at or before the Termination Date
there shall exist a Business Combination proposal with respect to AHP, (III)
following the existence of such Business Combination proposal and prior to any
such termination, AHP shall have intentionally breached (and not cured after
notice thereof) any of its covenants or agreements set forth in this Agreement
in any material respect, which breach shall have materially contributed to the
failure of the Effective Time to occur on or before the Termination Date and
(IV) within twelve months of any such termination of this Agreement, AHP shall
enter into a definitive agreement with any third party with respect to a
Business Combination or a Business Combination with respect to AHP is
consummated, or (E)(I) if either party shall terminate this Agreement pursuant
to 7.1(g)(A), (II) at any time after the date of this Agreement and at or before
the Adverse Change in the AHP Recommendation a Business Combination proposal
with respect to AHP shall have been publicly announced or otherwise communicated
to the AHP Board of Directors, and (III) within twelve months of any such
termination of this Agreement, AHP shall enter into a definitive agreement with
any third party with respect to a Business Combination or a Business Combination
with respect to AHP is consummated, provided that, in the case of this subclause
(E) of Section 7.2(b)(i), if the AHP
52
Termination Fee (as defined in Section 7.2(b)(ii)) has previously been paid in
connection with the termination of this Agreement pursuant to Section 7.1(g)(A),
then the amount of such fee shall be credited to the AHP Alternative Transaction
Fee.
(ii) AHP shall pay Monsanto the amount of $250 million (the
"AHP Termination Fee") if this Agreement is terminated by either party pursuant
to Section 7.1(g)(A) in circumstances in which the AHP Alternative Transaction
Fee is not then payable; provided, however, that the AHP Termination Fee shall
equal the amount of $75 million in the event that (a) the date on which the
Board of Directors of AHP effects an Adverse Change in the AHP Recommendation
occurs within five (5) Business Days prior to the scheduled date of the AHP
Stockholders Meeting and (b) prior to the Adverse Change in the AHP
Recommendation a Monsanto Stock Decline would be deemed to have occurred
pursuant to the provisions of Section 7.1(i) if "Determination Date" for
purposes of such calculation was deemed to be the trading day immediately
preceding the date on which the AHP Board effected an Adverse Change in the AHP
Recommendation (the valuation period ending at the close of trading on such
deemed Determination Date is hereinafter referred to as the "Alternative
Monsanto Stock Measurement Period"). Notwithstanding the foregoing, if (x) a
Monsanto Public Disclosure is made during the Alternative Monsanto Stock
Measurement Period and (y) during the remaining portion of the Alternative
Monsanto Stock Measurement Period commencing with the first Business Day
following the date of the Monsanto Public Disclosure, a Monsanto Stock Decline
would be deemed to have occurred pursuant to the provisions of Section 7.1(i)
but (z) a Monsanto Stock Decline would not be deemed to have occurred pursuant
to the provisions of Section 7.1(i) if the entire Alternative Monsanto Stock
Measurement Period were used for purposes of such calculation, then AHP shall be
entitled to delay the date of its scheduled AHP Stockholders Meeting to the 20th
Business Day after the Monsanto Public Disclosure and the Alternative Monsanto
Stock Measurement Period shall commence with the first Business Day following
the date of the Monsanto Public Disclosure, for purposes of determining the
relevant AHP Termination Fee.
(iii) AHP shall pay Monsanto the fixed amount of $75 million
as an expense and displacement payment if this Agreement is terminated by AHP
pursuant to Section 7.1(i).
(c) (i) Monsanto shall pay AHP the sum of $700 million (the
"Monsanto Alternative Transaction Fee") if this Agreement is terminated solely
as follows: (A) if Monsanto shall terminate this Agreement pursuant to Section
7.1(f), (B) if (I) either party shall terminate this Agreement pursuant to
Section 7.1(d)(i) due to the failure of Monsanto's stockholders to adopt this
Agreement and approve the Merger, (II) at any time after the date of this
Agreement and at or before the date of the Monsanto Stockholders Meeting a
Business Combination proposal with respect to Monsanto shall have been publicly
announced or otherwise communicated to the Monsanto Board of Directors and (III)
within twelve months of the termination of this Agreement, Monsanto enters into
a definitive agreement with any third party with respect to a Business
Combination proposal or a Business Combination with respect to Monsanto is
consummated, (C) if AHP shall terminate this Agreement pursuant to Section
7.1(e) or 7.1(k), (D) if (I) either party shall terminate this Agreement
pursuant to Section 7.1(b), (II) at any time
53
after the date of this Agreement and at or before the Termination Date there
shall exist a Business Combination proposal with respect to Monsanto, (III)
following the existence of such a Business Combination proposal and prior to any
such termination, Monsanto shall have intentionally breached (and not cured
after notice thereof) any of its covenants or agreements set forth in this
Agreement in any material respect which breach shall have materially contributed
to the failure of the Effective Time to occur on or before the Termination Date
and (IV) within twelve months of any such termination of this Agreement,
Monsanto shall enter into a definitive agreement with any third party with
respect to a Business Combination proposal or a Business Combination with
respect to Monsanto is consummated, or (E)(I) if either party shall terminate
this Agreement pursuant to 7.1(g)(B), (II) at any time after the date of this
Agreement and at or before the termination of this Agreement relating to the
Adverse Change in the Monsanto Recommendation a Business Combination proposal
with respect to Monsanto, shall have been publicly announced or otherwise
communicated to the Monsanto Board of Directors and (III) within twelve months
of any such termination of this Agreement, Monsanto shall enter into a
definitive agreement with any third party with respect to a Business Combination
or a Business Combination with respect to Monsanto is consummated, provided
that, in the case of this subclause (E) of Section 7.2(c)(i), if the Monsanto
Termination Fee (as defined in section 7.2(c)(ii)) has previously been paid in
connection with the termination of this Agreement pursuant to Section 7.1(g)(B),
then the amount of such fee shall be credited to the Monsanto Alternative
Transaction Fee.
(ii) Monsanto shall pay AHP the amount of $250 million (the
"Monsanto Termination Fee") if this Agreement is terminated by either party
pursuant to Section 7.1(g)(B) in circumstances in which the Monsanto Alternative
Transaction Fee is not then payable; provided, however, that the Monsanto
Termination Fee shall equal the amount of $75 million in the event that (a) the
date on which the Board of Directors of Monsanto effects an Adverse Change in
the Monsanto Recommendation occurs within five (5) Business Days prior to the
scheduled date of the Monsanto Stockholders Meeting and (b) prior to the Adverse
Change in the Monsanto Recommendation an AHP Stock Decline would be deemed to
have occurred pursuant to the provisions of Section 7.1(h) if "Determination
Date" for purposes of such calculation was deemed to be the trading day
immediately preceding the date on which the Monsanto Board effected an Adverse
Change in the Monsanto Recommendation (the valuation period ending at the close
of trading on such deemed Determination Date is hereinafter referred to as the
"Alternative AHP Stock Measurement Period"). Notwithstanding the foregoing, if
(x) an AHP Public Disclosure is made during the Alternative AHP Stock
Measurement Period and (y) during the remaining portion of the Alternative AHP
Stock Measurement Period commencing with the first Business Day following the
date of the AHP Public Disclosure, an AHP Stock Decline would be deemed to have
occurred pursuant to the provisions of Section 7.1(h) but (z) an AHP Stock
Decline would not be deemed to have occurred pursuant to the provisions of
Section 7.1(h) if the entire Alternative AHP Stock Measurement Period were used
for purposes of such calculation, then Monsanto shall be entitled to delay the
date of its scheduled Monsanto Stockholders Meeting for such number of Business
Days as would permit a fifteen Business Day Alternative AHP Stock Measurement
Period commencing with the date of the AHP Public Disclosure, for purposes of
determining the applicable Monsanto Termination Fee.
54
(iii) Monsanto shall pay AHP the fixed amount of $75 million
as an expense and displacement payment if this Agreement is terminated by
Monsanto pursuant to Section 7.1(h).
(d) For the purposes of this Section 7.2, "Business
Combination" means with respect to AHP or Monsanto, as the case may be, (i) a
merger, reorganization, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving such
party as a result of which either (A) such party's stockholders prior to such
transaction (by virtue of their ownership of such party's shares) in the
aggregate cease to own at least 60% of the voting securities of the entity
surviving or resulting from such transaction (or the ultimate parent entity
thereof) or, regardless of the percentage of voting securities held by such
stockholders, if any Person shall beneficially own, directly or indirectly, at
least 30% of the voting securities of such ultimate parent entity, or (B) the
individuals comprising the board of directors of such party prior to such
transaction do not constitute a majority of the board of directors of such
ultimate parent entity, (ii) a sale, lease, exchange, transfer or other
disposition of at least 50% of the assets of such party and its Subsidiaries,
taken as whole, in a single transaction or a series of related transactions, or
(iii) the acquisition, directly or indirectly, by a Person of beneficial
ownership of 30% or more of the common stock of such party whether by merger,
consolidation, share exchange, business combination, tender or exchange offer or
otherwise.
(e) The AHP Alternative Transaction Fee and the Monsanto
Alternative Transaction Fee required to be paid pursuant to Section 7.2(b)(i) or
7.2(c)(i), as the case may be, shall be paid prior to, and shall be a
pre-condition to the effectiveness of, termination of this Agreement pursuant to
Section 7.1(f). Any other payment required to be made pursuant to Section 7.2(b)
or 7.2(c) shall be made not later than two Business Days after the entering into
of a definitive agreement with respect to, or the consummation of, a Business
Combination, as applicable, or a termination pursuant to Section 7.1(e), Section
7.1(g), Section 7.1(h), Section 7.1(i) Section 7.1(j) or Section 7.1(k). In no
event shall more than one AHP Alternative Transaction Fee or Monsanto
Alternative Transaction Fee be made. No AHP Termination Fee or Monsanto
Termination Fee will be payable to Monsanto or AHP, as the case may be, if (A)
the receiving party was at the time of the termination giving rise to such fee
in breach of its covenants, agreements or representations to the extent that
would reasonably be expected to have a Material Adverse Effect on the receiving
party, or on the benefits reasonably expected to be received by the paying
party's stockholders from the Merger; (B) the paying party has on or prior to
the action giving rise to such termination in good faith asserted such breach
with reasonable specificity to the receiving party and, unless such breach is
incurable, has given the receiving party a reasonable opportunity to cure such
breach; and (C) the existence of such breach was either (i) the sole basis for
the Adverse Change in the AHP Recommendation or the Adverse Change in the
Monsanto Recommendation, as the case may be, or (ii) the primary basis for such
change, but only (in the case of (ii)) if the existence of such breach or
breaches on their own constituted a sufficient basis for the Board of Directors'
good faith determination pursuant to the second proviso of Section 5.1(b) or
Section 5.1(c), as the case may be. All payments under this Section 7.2 shall be
made by wire transfer of immediately available funds to an account designated by
the party entitled to receive payment.
55
7.3 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of Monsanto and AHP, but, after any such
approval, no amendment shall be made which by law or in accordance with the
rules of any relevant stock exchange requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
7.4 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of those rights.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Survival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and other
agreements in this Agreement or in any instrument delivered pursuant to this
Agreement, including any rights arising out of any breach of such
representations, warranties, covenants and other agreements, shall survive the
Effective Time, except for those covenants and agreements contained herein and
therein that by their terms apply or are to be performed in whole or in part
after the Effective Time and this Article VIII.
8.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by telecopy or telefacsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service, or (c) on the tenth Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
56
(a) if to AHP or Merger Sub, to
American Home Products Corporation
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
with a copy to
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Xxxxxx X. Xxxxx, Esq.
(b) if to Monsanto to
Monsanto Company
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: R. Xxxxxxx Xxx, III, Esq.
with a copy to
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
8.3 Interpretation. When a reference is made in this Agreement
to Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
8.4 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become
57
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that both parties need not
sign the same counterpart.
8.5 Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement and the Confidentiality Agreements
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement, other
than Section 5.8 (which is intended to be for the benefit of the Persons covered
thereby and may be enforced by such Persons).
8.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware (without giving
effect to choice of law principles thereof).
8.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
8.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other party, and any attempt to make any such
assignment without such consent shall be null and void, except that Merger Sub
may assign, in its sole discretion, any or all of its rights, interests and
obligations under this Agreement to any direct wholly owned Subsidiary of AHP
without the consent of Monsanto, but no such assignment shall relieve Merger Sub
of any of its obligations under this Agreement. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
8.9 Submission to Jurisdiction; Waivers. Each of AHP and
Monsanto irrevocably agrees that any legal action or proceeding with respect to
this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in the Chancery or other Courts of the State of Delaware,
and each of AHP and Monsanto hereby irrevocably submits with regard
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to any such action or proceeding for itself and in respect to its property,
generally and unconditionally, to the nonexclusive jurisdiction of the aforesaid
courts. Each of AHP and Monsanto hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure to lawfully serve process (b) that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), and (c) to the fullest extent permitted by applicable law, that (i)
the suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
8.10 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
8.11 Definitions. As used in this Agreement:
(a) "beneficial ownership" or "beneficially own" shall have
the meaning under Section 13(d) of the Exchange Act and the rules and
regulations thereunder.
(b) "Benefit Plans" means, with respect to any Person, each
employee benefit plan, program, arrangement and contract (including, without
limitation, any "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and any
bonus, deferred compensation, stock bonus, stock purchase, restricted stock,
stock option, employment, termination, stay agreement or bonus, change in
control and severance plan, program, arrangement and contract) in effect on the
date of this Agreement or disclosed on the Monsanto Disclosure Schedule or the
AHP Disclosure Schedule, as the case may be, to which such Person or its
Subsidiary is a party, which is maintained or contributed to by such Person, or
with respect to which such Person could incur material liability under Section
4069, 4201 or 4212(c) of ERISA.
(c) "Board of Directors" means the Board of Directors of any
specified Person and any committees thereof.
(d) "Business Day" means any day on which banks are not
required or authorized to close in the City of New York.
(e) "Known or "Knowledge" means, with respect to any party,
the knowledge of such party's executive officers after reasonable inquiry,
including reasonable inquiry of such party's counsel.
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(f) "Majority Owned Affiliate" when used with respect to any
party means any corporation or other organization, whether incorporated or
unincorporated, at least a majority of the securities or other interests of
which having by their terms ordinary voting power to elect a majority of the
Board of Directors or others performing similar functions with respect to such
corporation or other organization, is directly or indirectly owned or controlled
by such party or by any one or more of its Subsidiaries, or by such party and
one or more of its Subsidiaries, and with respect to which such party is
prevented, by virtue of contractual limitations or limitations imposed in
organizational documents, from electing a majority of the Board of Directors or
others performing similar functions.
(g) "Material Adverse Effect" means, with respect to any
entity, any change, circumstance or effect that, individually or in the
aggregate with all other changes, circumstances and effects, is or is reasonably
likely to be materially adverse to (i) the business, financial condition or
results of operations of such entity and its Subsidiaries taken as a whole,
other than any change, circumstance or effect relating (x) to the economy or
financial markets in general or (y) in general to the industries in which AHP or
Monsanto operate and not specifically relating to AHP or Monsanto or (ii) the
ability of such party to consummate the transactions contemplated by this
Agreement; provided, however, for purposes of satisfying the conditions set
forth in Sections 6.2(a) and 6.3(a) with respect to the representations made in
Sections 3.1(h) and 3.1(i) and Sections 3.2(h) and 3.2(i) as of the Closing
Date, "Material Adverse Effect" shall also exclude any change, circumstance or
effect relating to the AHP Specified Litigation Matters and the Monsanto
Specified Litigation Matters, as the case may be.
(h) "the other party" means, with respect to Monsanto, AHP and
means, with respect to AHP, Monsanto.
(i) "Person" means an individual, corporation, limited
liability company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in the Exchange Act).
(j) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by such
party or any Subsidiary of such party do not have a majority of the voting
interests in such partnership) or (ii) at least a majority of the securities or
other interests of which having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party or by any one or more of its Subsidiaries, or
by such party and one or more of its Subsidiaries, except for any Majority Owned
Affiliates.
(k) "Superior Proposal" means with respect to AHP or Monsanto,
as the case may be, a written proposal made by a Person other than either such
party which is for (I) (i) a merger, reorganization, consolidation, share
exchange, business combination, recapitalization,
60
liquidation, dissolution or similar transaction involving such party as a result
of which either (A) such party's stockholders prior to such transaction (by
virtue of their ownership of such party's shares) in the aggregate cease to own
at least 50% of the voting securities of the entity surviving or resulting from
such transaction (or the ultimate parent entity thereof) or (B) the individuals
comprising the board of directors of such party prior to such transaction do not
constitute a majority of the board of directors of such ultimate parent entity,
(ii) a sale, lease, exchange, transfer or other disposition of at least 50% of
the assets of such party and its Subsidiaries, taken as a whole, in a single
transaction or a series of related transactions, or (iii) the acquisition,
directly or indirectly, by a Person of beneficial ownership of 50% or more of
the common stock of such party whether by merger, consolidation, share exchange,
business combination, tender or exchange offer or otherwise, and which is (II)
otherwise on terms which the Board of Directors of such party in good faith
concludes (after consultation with its financial advisors and outside counsel),
taking into account, among other things, all legal, financial, regulatory and
other aspects of the proposal and the Person making the proposal, (i) would, if
consummated, result in a transaction that is more favorable to its stockholders
(in their capacities as stockholders), from a financial point of view, than the
transactions contemplated by this Agreement (after giving effect, for purposes
of clause (iii) of Section 7.1(f), to any revised proposal made by the other
party prior to the end of the three business-day period referred to in clause
(ii) of Section 7.1(f)) and (ii) is reasonably capable of being completed.
------------------------------
[Intentionally Left Blank]
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IN WITNESS WHEREOF, AHP, Merger Sub and Monsanto have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman, President and Chief
Executive Officer
MA SUB, INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman, President and Chief
Executive Officer
MONSANTO COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman and Chief Executive
Officer
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