Exhibit 10.3
ARBITRATION SETTLEMENT AGREEMENT
--------------------------------
This Arbitration Settlement Agreement ("Agreement") is made, as of
August 14, 2006 (the "Effective Date"), between Delta and Pine Land
Company, a Delaware corporation with its principal offices at One Cotton
Row, Scott, Mississippi 38772 ("DPL"); D&M Partners, a Delaware partnership
with its principal offices at One Cotton Row, Scott, Mississippi 38772
("D&M") ; and Monsanto Company, a Delaware corporation with its principal
place of business at 800 N. Lindbergh Blvd., St. Louis, Missouri 63167
("Monsanto").
WHEREAS, DPL, D&M, and Monsanto are each parties to the U.S.
Bollgard(R) Gene License, the U.S. Roundup Ready(R) License, and the
Marketing Services Agreement; and
WHEREAS, disputes have arisen among the Parties pertaining to the
above identified agreements; and
WHEREAS, the Parties have instituted arbitration proceedings, styled
Monsanto Company v. Delta & Pine Land, No. 30 Y 133 00564 04, pending under
the jurisdiction of the American Arbitration Association ("Subject
Arbitration"), under the provisions of certain of the above identified
agreements in order to resolve certain disputes; and
WHEREAS, the Parties have come to agreement on the settlement of the
disputes that have been raised in the Subject Arbitration on terms set
forth in this Agreement; and
WHEREAS, the Parties may have other claims against each other, whether
asserted or as yet unasserted, which are intended to be preserved and not
released or affected by this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
and commitments set forth herein, the Parties understand the meaning and
legal effect of entering into this Agreement and hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following
definitions shall apply to the terms set forth below, and such terms may be
used either in the singular or plural context:
(a) "AFFILIATE" shall mean, with respect to a Party, any Person that
directly or indirectly, whether through one or more
intermediaries, Controls, is Controlled By, or is under Common
Control with a Party.
(b) "CLAIM" shall mean any and all claims, counterclaims, demands,
actions, causes of action, suits, damages, liabilities,
judgments, debts, claims over, accounts, warranties, liens, costs
or expenses whatsoever, wherever arising, and whether based in
contract law, tort law, equity, statute, or regulation, whether
known or unknown. A Claim shall include, but not be limited to,
any and all actions or claims for injunctive relief, patent
infringement, violations of the antitrust or competition laws,
false advertising, unfair or deceptive acts or practices, product
disparagement, unfair competition, restraint of trade, trade
secret misappropriation, breach of contract, conversion, fraud,
deceit, contempt, violations of court orders or injunctions,
costs, and/or attorney fees. A Claim shall not include any
payments due or other obligations owed under contracts or
agreements between the Parties or one or more of their Affiliates
made prior to the Effective Date of this Agreement that have not
been terminated herein or that were not otherwise at issue in the
Subject Arbitration.
(c) "CONTROL," "CONTROLLED BY," or "UNDER COMMON CONTROL WITH" shall
mean (i) the ownership, directly or indirectly, of more than
fifty percent (50%) of the voting equity interest in a Person,
and (ii) the ability, directly or indirectly, to direct or cause
the direction of the management and policies of that entity,
whether through ownership of voting securities, by contract, or
otherwise.
(d) "DPL PARTIES" shall mean Delta and Pine Land Company and D&M
Partners.
(e) "MONSANTO PARTIES" shall mean Monsanto Company ("Monsanto").
(f) "PARTIES" shall mean the DPL Parties and the Monsanto Parties.
"PARTY" shall mean one of DPL, D&M PARTNERS, or Monsanto.
(g) "PERSON" shall mean any individual, corporation, proprietorship,
firm, partnership, limited liability company, trust, association,
or other form of business entity, whether formed under the laws
of any state of the United States, the District of Columbia, or
the laws of any foreign country or any state or political
subdivision thereof.
(h) "SUBJECT ARBITRATION" shall mean the arbitration proceedings
identified in the Preamble to this Agreement.
(i) "THIRD PARTY" shall mean any Person other than the Monsanto
Parties, the DPL Parties, and any of the Parties' Affiliates.
2. TREATMENT OF SUBJECT ARBITRATION. Upon execution of the Agreement
and Plan of Merger ("Merger Agreement"), the following agreements shall be
amended as follows:
(a) The Parties shall execute the Amendment to Roundup Ready(R) Gene
License and Seed Services Agreement of February 2, 1996, as previously
amended, in the form of Exhibit B.
(b) The Parties shall execute the Amendment to Bollgard(R) Gene
License and Seed Services Agreement of February 2, 1996, as previously
amended, in the form of Exhibit C.
(c) The Parties shall execute the Amendment to Marketing Services
Agreement of February 2, 1996, in the form of Exhibit D.
2. EXECUTION OF AGREEMENTS AND DISMISSAL OF SUBJECT LITIGATION AND
SUBJECT ARBITRATION . Upon execution of the Merger Agreement and the
Amendments, the DPL Parties and the Monsanto Parties shall cause the
following documents to be filed with the American Arbitration Association
and the arbitration panel in connection with the Subject Arbitration:
(a) A Stipulation of Dismissal with prejudice, with each Party to bear
its own attorneys' fees and costs, in the form of Exhibit A.
3. MUTUAL RELEASES.
(a) By the Monsanto Parties: The Monsanto Parties and their Affiliates
hereby release and discharge each of the DPL Parties, their respective
Affiliates, assigns, predecessors, and successors, and any and all of those
Persons' past, present, and future officers, directors, employees, agents,
licensees and attorneys from all Claims that each of the Monsanto Parties
and their respective Affiliates, assigns, predecessors, and successors, and
all of those Persons' past, present, and future officers, directors,
employees, agents, and attorneys ever had, now have, or may have for, upon,
or by reason of, any matter whatsoever, through the date of this Agreement,
arising from, encompassed by, or related to any and all matters alleged in
the Subject Arbitration .
(b) By the DPL Parties: The DPL Parties and their Affiliates hereby
release and discharge each of the Monsanto Parties, their respective
Affiliates, assigns, predecessors, and successors, and any and all of those
Persons' past, present, and future officers, directors, employees, agents,
licensees and attorneys from all Claims (including, but not limited to, all
Claims that any of the Monsanto Parties failed to satisfy its "most favored
licensee" obligations in connection with their dealings with Stoneville
Pedigreed Seed Company ("Stoneville") or its Affiliates - regardless of
whether Stoneville was an Affiliate of any of the Monsanto Parties) that
each of the DPL Parties and their respective Affiliates, assigns,
predecessors, and successors, and all of those Persons' past, present, and
future officers, directors, employees, agents, and attorneys ever had, now
have, or may have for, upon, or by reason of, any matter whatsoever,
through the date of this Agreement, arising from, encompassed by, or
related to any and all matters alleged in the Subject Arbitration .
(c) Parties Not Released: The releases set forth in paragraphs 3(a)
and 3(b) of this 2006 Settlement Agreement do not include any Claim by any
Party or its Affiliates against (and are expressly not for the benefit of)
any Third Party not specifically referred to or described in Paragraphs
3(a) or 3(b) hereof.
(d) Matters Not Released:
Solely for the avoidance of doubt, the Parties agree that only the
claims, counterclaims, and defenses asserted within the Subject Arbitration
are the subject of the above releases or other resolution of disputes set
forth above in this Paragraph 3.
4. COVENANT NOT TO SUE. The DPL Parties and their respective
Affiliates on the one hand and the Monsanto Parties and their respective
Affiliates on the other hand expressly covenant never to institute or
prosecute against the other in any administrative proceeding, arbitration
proceeding, suit, or action of any kind or nature whatsoever, at law or in
equity, any Claim released in this Agreement; provided that nothing
contained in this paragraph shall release, remise, discharge or acquit a
Party's claims, regardless of the legal theory upon which they are based,
against any other Party for the alleged breach of or to seek the
enforcement of this Agreement. Provided, however, nothing in this agreement
shall affect any claim or counterclaim in Delta and Pine Land Company v.
Monsanto Company 2005-IA-00015-SCT, consolidated with Delta and Pine Land
Company v. Monsanto Company 2005-IA-00016-SCT, or in any other legal
proceeding or arbitration not released herein.
5. NO TRANSFER OF RELEASED CLAIMS. Each Party hereto represents and
warrants that it has not prior to the Effective Date, and will not in the
future, sell, transfer, assign or othewise hypothecate to any Third Party
that would not be bound hereby any Claim released by this Agreement
existing prior to the date hereof and each Party will defend, indemnify and
hold harmless the other Party from any actions by any Third Party asserting
any such Claim.
6. DENIAL OF LIABILITY. Each Party hereto expressly denies any
liability with respect to the Claims made against it in the Subject
Arbitration.
7. FUTURE DISCOVERY. Each Party acknowledges that it may hereafter
discover facts relating to the Subject Arbitration that occurred prior to
the date of this Agreement that are different from, or in addition to,
those which it now knows or believes to be true, and each Party agrees that
this Agreement shall be and remain effective and applicable in all
respects, notwithstanding such different or additional facts, or the
discovery thereof.
8. BINDING NATURE. This Agreement shall be binding upon, impose
obligations upon, and inure to the benefit of each of the Parties, their
respective Affiliates, and their respective permitted successors and
assigns.
9. GOVERNING LAW. The internal laws of the State of Delaware
(excluding its choice of law or conflicts of law provisions) shall govern
the interpretation, performance and enforcement of this Agreement.
10. SUBMISSION TO JURISDICTION. Each of the Parties irrevocably agrees
that any legal action or proceeding with respect to this Agreement and the
rights and obligations arising hereunder, or for recognition and
enforcement of any judgment in respect of this Agreement and the rights and
obligations arising hereunder brought by the other Party hereto or its
successors or assigns shall be brought and determined exclusively in the
Delaware Court of Chancery, or in the event (but only in the event) that
such court does not have subject matter jurisdiction over such action or
proceeding, in the United States District Court for the District of
Delaware. Each of the Parties hereby irrevocably submits with regard to any
such action or proceeding for itself and in respect of its property,
generally and unconditionally, to the personal jurisdiction of the
aforesaid courts and agrees that it will not bring any action relating to
this Agreement or any of the transactions contemplated by this Agreement in
any court or tribunal other than the aforesaid courts. Each of the Parties
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 and the rights and obligations arising hereunder,
or for recognition and enforcement of any judgment in respect of this
Agreement and the rights and obligations arising hereunder (i) any claim
that it is not personally subject to the jurisdiction of the above named
courts for any reason, (ii) any claim 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 (iii) to the fullest extent permitted by the
applicable law, any claim that (x) the suit, action or proceeding in such
court is brought in an inconvenient forum, (y) the venue of such suit,
action or proceeding is improper or (z) this Agreement, or the subject
matter hereof, may not be enforced in or by such courts.
11. WAIVER OF JURY TRIAL. Each Party acknowledges and agrees that any
controversy which may arise under this Agreement is likely to involve
complicated and difficult issues and, therefore, each such Party
irrevocably and unconditionally waives any right it may have to a trial by
jury in respect of any legal action arising out of or relating to this
Agreement or the transactions contemplated by this Agreement. Each party to
this Agreement certifies and acknowledges that (i) no representative of any
other Party has represented, expressly or otherwise, that such other Party
would not seek to enforce the foregoing waiver in the event of a legal
action, (ii) such Party has considered the implications of this waiver,
(iii) such Party makes this waiver voluntarily, and (iv) such Party has
been induced to enter into this Agreement by, among other things, the
mutual waivers and certifications contained in this paragraph.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Parties relating to the subject matter hereof, and all prior
negotiations and understandings between the Parties relating to the subject
matter hereof shall be deemed merged into this Agreement.
13. VOLUNTARILY AND KNOWINGLY. The Parties each acknowledge that they
have read this Agreement and understand all of its terms, and that these
documents are being executed voluntarily, without duress, and with full
knowledge of their legal significance. The Parties each acknowledge that
they have received independent legal advice from their respective attorneys
with respect to the legal consequences of entering into these agreements.
14. CONSTRUCTION. The Parties agree that in the event of any dispute
concerning the interpretation or construction of this Agreement, no
presumption shall exist with respect to the Party initially drafting the
Agreement. The Parties each agree they have had ample opportunity to
influence the choice of language and terms in this Agreement.
15. REPRESENTATIONS. The DPL Parties and Monsanto Parties each
represent and warrant that they have full capacity and authority to settle,
compromise, and release their Claims and the Claims of their respective
Affiliates as set forth herein, and that no other Person has, or will in
the future, acquire or have any right to assert against any person or
entity released by this Agreement any portion of that Party's or its
Affiliates' released Claims.
16. SUFFICIENCY OF CONSIDERATION. Other than the obligations set forth
in this Agreement, the Parties each acknowledge and agree that no
additional consideration is required or owing to the other, and that
sufficient consideration has passed between them to render the Agreement
valid and enforceable.
17. MODIFICATIONS. This Agreement may not be amended, altered, or
modified, in whole or in part, except by an instrument in writing executed
by the Parties thereto.
18. WAIVER. Any failure by any Party to this Agreement to insist upon
the strict performance by another Party of any of the provision of this
Agreement shall not be deemed a waiver of any of the provisions of this
Agreement and such Party, notwithstanding such failure, shall have the
right thereafter to insist upon the specific performance of any and all of
the provisions of this Agreement. There shall be no estoppel against the
enforcement of any provision of this Agreement, except by written
instruments signed by the Party charged with the waiver or estoppel; no
written waiver shall be deemed a continuing waiver unless specifically
stated therein, and the written waiver shall operate only as to the
specific term or condition waived, and not for the future or as to any
other act than that specifically waived.
19. SEVERABILITY. If any clause, provision, or section of this
Agreement shall, for any reason, be held illegal, invalid or unenforceable,
the Parties shall negotiate in good faith and in accordance with reasonable
standards of fair dealing, a valid, legal, and enforceable substitute
provision or provisions that most nearly reflect the original intent of the
Parties under this Agreement in a manner that is commensurate in magnitude
and degree with the changes arising as a result of any such substitute
provision or provisions. All other provisions in this Agreement shall
remain in full force and effect and shall be construed in order to carry
out the original intent of the Parties as nearly as possible (consistent
with the necessary reallocation of benefits) and as if such invalid,
illegal, or unenforceable provision had never been contained herein.
20. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be considered and shall have the force
and effect of an original and all of which together shall constitute one
and the same document.
21. HEADINGS. The various headings used in this Agreement are for
reference purposes only and are not to be used in interpreting the text of
the paragraph in which they appear or to which they relate.
22. NOTICES. Any notice required or permitted by this Agreement shall
be in writing and served either (1) by hand delivery or (2) by facsimile
and United States mail, first-class, postage prepaid, and addressed to the
facsimile and address set forth below:
If to the DPL Parties:
Delta and Pine Land Company
Office of the Chief Executive Officer
One Cotton Row
Scott, MS 38772
Fax: (662) 742-3795
or such other person and/or address as DPL designates in writing.
If to the Monsanto Parties:
Monsanto Company
Office of the General Counsel
800 North Lindbergh Blvd.
Building A
St. Louis, MO 63167
Fax: (314) 694-6399
or such other person and/or address as Monsanto designates in writing.
23. ATTACHMENTS AND EXHIBITS. The Attachments and Exhibits form an
integral part of this Agreement. Signature page to follow
D&M PARTNERS DELTA AND PINE LAND COMPANY
By /s/ W.T. Jagodinski By /s/ R.D. Greene
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Title Managing Agent Title Senior Vice President
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Date August 14, 2006 Date August 14, 2006
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MONSANTO COMPANY
By /s/ Terrell K. Crews
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Title Chief Financial Officer
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Date August 14, 2006
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EXHIBIT A
AMERICAN ARBITRATION ASSOCIATION
MONSANTO COMPANY, )
)
Claimant, )
)
v. ) No. 30 Y 133 00564 04
)
DELTA AND PINE LAND COMPANY, )
)
Respondent. )
STIPULATED DISMISSAL WITH PREJUDICE
-----------------------------------
Having mutually agreed upon a settlement of the disputes to be
resolved herein, the parties request that this matter, including all claims
and counterclaims, be dismissed with prejudice, with each party to bear its
own respective costs and attorney's fees.
Respectfully submitted,
-----------------------
Allen Kezsbom
Michael B. deLeeuw
FRIED, FRANK, HARRIS,
SHRIVER & JACOBSON LLP
One New York Plaza
New York, NY 10004-1980
Jerome C. Hafter
E. Clifton Hodge, Jr.
PHELPS DUNBAR LLP
111 East Capitol Street,
Suite 600
Jackson, MS 39201
Attorneys for DPL
HUSCH & EPPENBERGER, LLC
By:
---------------------------
Joseph P. Conran
Dutro E. Campbell, II
Greg G. Gutzler
190 Carondelet Plaza,
Suite 600
St. Louis, MO 63105
314-480-1500
314-480-1505 (facsimile)
Attorneys for Monsanto
Company
EXHIBIT B
AMENDMENT TO ROUNDUP READY(R) GENE LICENSE AND SEED SERVICES
AGREEMENT
OF FEBRUARY 2, 1996
D&M Partners, a Delaware general partnership, Delta and Pine Land Company,
a Delaware corporation, and Monsanto Company, a Delaware corporation, are
parties to a certain Roundup Ready(R) Gene License and Seed Services
Agreement dated February 2, 1996, as amended July 26, 1996, December 8,
1999, January 2, 2000, and March 26, 2003, (hereinafter referred to as the
"Agreement").
All capitalized terms, not otherwise defined in this Amendment, shall have
the meanings defined in the Agreement.
The parties agree to amend the Agreement as follows:
1. Delete Section 2.1.56 in its entirety and substitute the following new
Section 2.1.56:
"2.1.56. The term "ROYALTY" means the compensation to be paid by D&M
PARTNERS to MONSANTO in consideration for the LICENSES equal to the
MONSANTO ROYALTY PERCENTAGE multiplied by the NET SUBLICENSE REVENUE."
2. Delete Section 2.1.57 in its entirety and substitute the following new
Section 2.1.57:
"2.1.57 The term "SUBLICENSE REVENUE" means the total number of UNITS
of LICENSED COMMERCIAL SEED reported by D&PL as sold and delivered
during the applicable period and confirmed by the named distributor
customers as received, less any amounts reported as returned by D&PL
or the named distributor customers, multiplied by the technology fees
due from sublicensed growers for those UNITS, less any amounts paid or
accrued for replant, crop loss or other price adjustments claimed by
sublicensed growers, provided that the total number of UNITS used in
the calculation may be as much as one percent (1%) less than the
reported and confirmed total if the number of UNITS of LICENSED
COMMERCIAL SEED reported as sold by retail distributors is less than
the reported and confirmed total."
3. Add the following sentence to Section 3.8:
"Notwithstanding any other provision of this Agreement, nothing herein
shall give D&PL or D&M PARTNERS any right to license the use of any
MONSANTO TECHNOLOGY, including any ROUNDUP READY(R) GENE to any third
party for use in breeding cotton. In the event D&PL desires to have a
third party conduct or participate in breeding of DELTAPINE ROUNDUP
READY(R) CULTIVARS, such third party must have first been licensed by
MONSANTO for that purpose. D&PL may request such a license for a third
party to conduct breeding for it, which MONSANTO may not unreasonably
withhold. MONSANTO agrees to give O&A Associates or James Olvey such a
research-only license on standard terms except that a limitation may
be included to prohibit transfer of any materials produced by or
containing MONSANTO TECHNOLOGY to any entity except D&PL or an
AFFILIATE of D&PL."
All other terms and conditions of the Agreement remain the same.
D&M PARTNERS DELTA AND PINE LAND COMPANY
By By
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Title Title
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Date Date
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MONSANTO COMPANY
By
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Title
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Date
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EXHIBIT C
AMENDMENT TO BOLLGARD(R) GENE LICENSE AND SEED SERVICES AGREEMENT
OF FEBRUARY 2, 1996
D&M Partners, a Delaware general partnership, Delta and Pine Land Company,
a Delaware corporation, and Monsanto Company, a Delaware corporation, are
parties to a certain Roundup Ready(R) Gene License and Seed Services
Agreement dated February 2, 1996, as amended December 8, 1999, January 2,
2000, and March 26, 2003, (hereinafter referred to as the "Agreement").
All capitalized terms, not otherwise defined in this Amendment, shall have
the meanings defined in the Agreement.
The parties agree to amend the Agreement as follows:
1. Delete Section 2.1.51 in its entirety and substitute the following new
Section 2.1.51:
"2.1.51. The term "ROYALTY" means the compensation to be paid by D&M
PARTNERS to MONSANTO in consideration for the LICENSES equal to the
MONSANTO ROYALTY PERCENTAGE multiplied by the NET SUBLICENSE REVENUE."
2. Delete Section 2.1.53 in its entirety and substitute the following new
Section 2.1.53:
"2.1.53 The term "SUBLICENSE REVENUE" means the total number of UNITS
of LICENSED COMMERCIAL SEED reported by D&PL as sold and delivered
during the applicable period and confirmed by the named distributor
customers as received, less any amounts reported as returned by D&PL
or the named distributor customers, multiplied by the technology fees
due from sublicensed growers for those UNITS, less any amounts paid or
accrued for replant, crop loss or other price adjustments claimed by
sublicensed growers, provided that the total number of UNITS used in
the calculation may be as much as one percent (1%) less than the
reported and confirmed total if the number of UNITS of LICENSED
COMMERCIAL SEED reported as sold by retail distributors is less than
the reported and confirmed total.
3. Add the following sentence to Section 3.8:
"Notwithstanding any other provision of this Agreement, nothing herein
shall give D&PL or D&M PARTNERS any right to license the use of
MONSANTO TECHNOLOGY, including LEPIDOPTERAN-ACTIVE GENE(S) to any
third party for use in breeding cotton. In the event D&PL desires to
have a third party conduct or participate in breeding of DELTAPINE
ROUNDUP READY(R) CULTIVARS, such third party must have first been
licensed by MONSANTO for that purpose. D&PL may request such a license
for a third party to conduct breeding for it, which MONSANTO may not
unreasonably withhold. MONSANTO agrees to give O&A Associates or James
Olvey such a research-only license on standard terms except that a
limitation may be included to prohibit transfer of any materials
produced by or containing MONSANTO TECHNOLOGY to any entity except
D&PL or an AFFILIATE of D&PL."
All other terms and conditions of the Agreement remain the same.
D&M PARTNERS DELTA AND PINE LAND COMPANY
By By
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Title Title
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Date Date
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MONSANTO COMPANY
By
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Title
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Date
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EXHIBIT D
AMENDMENT TO MARKETING SERVICES AGREEMENT
OF FEBRUARY 2, 1996
D&M Partners, a Delaware general partnership, Delta and Pine Land Company,
a Delaware corporation, and Monsanto Company, a Delaware corporation, are
parties to a certain Marketing Services Agreement dated February 2, 1996,
(hereinafter referred to as the "Agreement").
All capitalized terms, not otherwise defined in this Amendment, shall have
the meanings defined in the Agreement.
The parties agree to amend the Agreement as follows:
1. Add new Section 3.5:
"Notwithstanding any other provision of this Agreement, Marketing
Services Fees for the 2007 season and all following seasons, shall not
include any amount paid to distributors and/or retailers that is
conditioned on activities by the distributors and/or retailers related
to any product other than seed originally sold or transferred by D&PL
or its Affiliates and containing the Licensed Technologies."
All other terms and conditions of the Agreement remain the same.
D&M PARTNERS DELTA AND PINE LAND COMPANY
By By
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Title Title
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Date Date
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MONSANTO COMPANY
By
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Title
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Date
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