Exhibit 10(t)
EXECUTION COPY
AMENDMENT TO PROTOCOL AGREEMENT
THIS AMENDMENT TO PROTOCOL AGREEMENT, dated as of March 3,
2003 (this "Amendment"), by and among Pharmacia Corporation, a Delaware
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corporation ("Pharmacia"), Solutia Inc., a Delaware corporation ("Solutia"),
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and Monsanto Company, a Delaware corporation ("Monsanto").
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W I T N E S S E T H:
WHEREAS, pursuant to its obligations under the Amended
Distribution Agreement, Solutia has agreed to and has been defending
Pharmacia in connection with Commonwealth of Pennsylvania et al. v. United
States Mineral Products et al., Nos. 284 M.D., 244 M.D. (Penn. Comm. Ct.)
(the "Pennsylvania Litigation");
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WHEREAS, a jury verdict has been returned in the
Pennsylvania Litigation with respect to the liability of Solutia and
Pharmacia and judgment in the Pennsylvania Litigation has been entered in
the amount of $59.5 million (the "Judgment");
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WHEREAS, under Pennsylvania law a bond in the amount of
120% of the Judgment, or approximately $71.4 million, was required to be
posted in order to stay execution of the Judgment pending appeal of the
Judgment (the "Appeal");
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WHEREAS, Pharmacia, Solutia and Monsanto are parties to
that certain Protocol Agreement, dated as of November 15, 2002 (the
"Protocol Agreement"), pursuant to which, among other things, Monsanto,
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pursuant to its obligations under the Amended Separation Agreement, agreed
to post a bond in order to stay execution of the Judgment pending the
Appeal;
WHEREAS, on or about November 15, 2002, Monsanto caused
Safeco Insurance Company of America (the "Monsanto Surety") to post that
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certain Supersedes Bond for Stay of Execution of Judgment Pending Resolution
of All Appeals in the amount of $71,433,900 (the "Pennsylvania Litigation
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Appeal Bond") in order to stay execution of the Judgment pending the Appeal;
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WHEREAS, pursuant to its obligations under the Protocol
Agreement, Solutia agreed to obtain and deliver to Monsanto (i) the Monsanto
Surety's complete and unconditional written release of Monsanto from all of
its commitments and obligations with respect to the Pennsylvania Litigation
Appeal Bond; and (ii) evidence satisfactory to Monsanto in its sole
discretion that Solutia has either (A) secured a replacement bond that is
sufficient to stay execution of the Judgment pending Appeal or (B) settled
all of the claim(s) at issue, or arguably at issue, in the Appeal and/or the
Pennsylvania Litigation, provided that the settlement includes as a term
thereof delivery by the claimant(s) or plaintiff(s) to Pharmacia and
Monsanto of a written release of Pharmacia, Monsanto and Solutia from all
liability with respect to the Pennsylvania Litigation once payment of the
settlement and fulfillment of any other obligations of the settlement have
been effectuated (subparts (i) and (ii) of this clause are referred to
collectively as the "Release Conditions") within fifteen (15) business days
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following Solutia's consummation of an asset sale transaction having an
aggregate value of $100 million or greater;
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WHEREAS, pursuant to its obligations under the Protocol
Agreement, Solutia was required to satisfy the Release Conditions on or
before February 21, 2003, as a result of the sale of Solutia's resins,
additives and adhesives business to UCB S.A. for $500 million cash on
January 31, 2003;
WHEREAS, Solutia acknowledges and agrees that it has not
satisfied the Release Conditions within the required time period under the
Protocol Agreement; and
WHEREAS, Solutia has requested, and Monsanto has agreed
subject to the terms and conditions of this Amendment, to extend the time
period within which Solutia may satisfy the Release Conditions under the
Protocol Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained and intending to be legally bound hereby,
the parties hereto agree as follows:
Section 1. Defined Terms. Each capitalized term used in this
Amendment and not otherwise defined herein shall have the meaning ascribed
thereto in the Protocol Agreement. The parties hereto affirm the factual
accuracy of each of the recitals set forth above to the extent that they
relate to such party.
Section 2. Forbearance by Monsanto. Upon the execution of this
Amendment by each party hereto and the satisfaction of each of the
conditions set forth in Section 4 of this Amendment, Monsanto agrees to
refrain until November 30, 2003 (the "Extension Period") from exercising its
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rights and remedies granted under the Protocol Agreement, and at law or in
equity, as a result of Solutia's failure to satisfy the Release Conditions
within the required time period under Section 4(d) of the Protocol
Agreement. The Extension Period shall automatically terminate, without
further act or instrument, upon the occurrence of any of the following
events:
(a) the failure by Solutia to timely perform and observe
any of the covenants, agreements and obligations contained in the Protocol
Agreement or any other document executed pursuant thereto, except as
modified by this Amendment;
(b) any representation or warranty made to Monsanto by
Solutia in this Amendment, the Protocol Agreement or any other document
executed pursuant thereto is or was, when it was made, untrue or incorrect;
or
(c) a petition under any bankruptcy, insolvency or
debtor's relief law is filed by or against Solutia.
Upon the expiration or termination of the Extension Period, Solutia
acknowledges and agrees that Monsanto shall be entitled to immediately
exercise any and all of its rights and remedies granted under the Protocol
Agreement, and at law or in equity.
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Section 3. Settlement Control Decisions.
(a) The parties hereby agree the term "Settlement Control
Rights" (which first appears and is defined in Section 4(c)(ii) of the
Protocol Agreement) shall be deleted in each place that it appears in the
Protocol Agreement and shall be replaced with the term "Monsanto Settlement
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Control Rights" in each such instance.
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(b) Upon the execution of this Amendment by each party
hereto and the satisfaction of each of the conditions set forth in Section 4
of this Amendment, Monsanto agrees to suspend the Monsanto Settlement
Control Rights through the last day of the Extension Period.
(c) Upon the execution of this Amendment by each party
hereto and the satisfaction of each of the conditions set forth in Section 4
of this Amendment, Monsanto and Pharmacia agree that through the last day of
the Extension Period (A) Solutia shall have sole and exclusive right to
compromise or settle, on a commercially reasonable basis, all claims at
issue, or arguably at issue, in the Appeal and/or the Pennsylvania
Litigation; (B) Solutia need not receive the consent or approval of
Pharmacia or Monsanto to settle any or all claims at issue, or arguably at
issue, in the Appeal and/or the Pennsylvania Litigation, provided that such
settlement includes as a term thereof delivery by the claimant(s) or
plaintiff(s) to Pharmacia and Monsanto of a written release of Pharmacia and
Monsanto from all liability in respect to the Pennsylvania Litigation once
payment of the settlement and fulfillment of any other obligations of the
settlement have been effectuated; and (C) Solutia shall nevertheless have a
duty of prior consultation with Monsanto and Pharmacia concerning settlement
strategies and decisions (subparts (A), (B) and (C) of Section 3(c) of this
Amendment being referred to herein collectively as the "Solutia Settlement
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Control Rights").
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Section 4. Conditions to Effectiveness. The effectiveness of
(i) Monsanto's agreements to refrain from exercising its rights and remedies
as set forth in Section 2 of this Amendment, to suspend the Monsanto
Settlement Control Rights during the Extension Period as set forth in
Section 3(b) of this Amendment, and to grant the Solutia the Solutia
Settlement Control Rights during the Extension Period as set forth in
Section 3(c) of this Amendment; and (ii) Pharmacia's agreement to grant
Solutia the Solutia Settlement Control Rights during the Extension Period as
set forth in Section 3(c) of this Amendment, are subject to the satisfaction
and occurrence of the following conditions:
(a) Each of the parties hereto shall have received
executed counterparts of this Amendment;
(b) On or before 5:00 p.m., St. Louis time, on March 10,
2003:
(i) Solutia shall provide a letter of credit to
Monsanto in the amount of $39,900,000 and in the form attached hereto as
Exhibit A (the "Additional Solutia LOC"); and
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(ii) Monsanto and Pharmacia shall have received
payment from Solutia of all of their respective costs and expenses related
to the negotiation, documentation and/or implementation of the transactions
contemplated hereby, including, without limitation, attorneys' fees and
disbursements.
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Section 5. Limited Waiver of Non-Compliance. In the event Solutia
delivers evidence satisfactory to Monsanto in its sole discretion that
Solutia has satisfied the Release Conditions prior to the termination of the
Extension Period, Monsanto agrees to waive Solutia's failure to satisfy the
Release Conditions within the required time period under the Protocol
Agreement; provided, that such waiver, if and when given by Monsanto, shall
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not operate or be construed as a waiver of any other or subsequent breach by
Solutia under the Protocol Agreement. Monsanto agrees to execute any
document and take such other acts as may be reasonably requested by Solutia
to give effect to such waiver.
Section 6. No waiver; Full Force and Effect. Other than as
expressly provided in Sections 2, 3 and 4 of this Amendment and subject to
compliance with the terms and conditions of such Sections, none of
Pharmacia, Monsanto or Solutia has waived or compromised any of their
respective rights under the Protocol Agreement, the Amended Distribution
Agreement, the Anniston Protocol Agreement or the Amended Separation
Agreement. Notwithstanding anything to the contrary set forth in this
Amendment, except as modified herein, the Protocol Agreement, the Amended
Distribution Agreement, the Anniston Protocol Agreement and the Amended
Separation Agreement are in full force and effect in accordance with their
respective terms, remain valid and binding obligations of the respective
parties thereto and are hereby ratified and confirmed by Solutia, Monsanto
and Pharmacia, as applicable.
Section 7. Miscellaneous.
(a) Clarification of Protocol Agreement. The parties
hereby agree, for purposes of clarification, that any reference to the term
"Pennsylvania Appeal Bond" in the Protocol Agreement shall be deemed to be a
reference to the term "Pennsylvania Litigation Appeal Bond," as defined in
the Protocol Agreement. The parties hereby further agree, for purposes of
clarification, that the Additional Solutia LOC is in addition to and not in
lieu of the Solutia LOC delivered to Monsanto under the Protocol Agreement
and that as a result of Solutia's delivery to Monsanto of the Additional
Solutia LOC pursuant to the terms of this Amendment, Monsanto shall have an
aggregate of $59,900,000 in collateral support available to it with respect
to the Pennsylvania Litigation Appeal Bond.
(b) Effect of Amendment. No reference to this Amendment
need be made in any instrument or document at any time referring to the
Protocol Agreement, a reference to the Protocol Agreement in any of such to
be deemed to be a reference to Protocol Agreement, as amended hereby.
(c) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Delaware as to all
matters, including matters of validity, construction, effect, performance
and remedies (other than the laws regarding choice of laws and conflicts of
laws).
(d) Amendments and Modifications. This Amendment may be
amended, modified or supplemented only by a written agreement signed by all
of the parties hereto.
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(e) Binding Effect; Assignment. This Amendment and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their successors, but neither this Amendment nor any of
the rights, interests and obligations hereunder shall be assigned by any
party hereto.
(f) Counterparts. This Amendment may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Copies of
executed counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts for
purposes of this Section 7(f), provided receipt of copies of such
counterparts is confirmed.
(g) Blue Penciling; Specific Performance. Any provision
of this Amendment that is prohibited or unenforceable in any jurisdiction,
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof. Any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. Each party acknowledges that money damages would be
an inadequate remedy for any breach of the provisions of this Amendment and
agrees that the obligations of the parties hereunder shall be specifically
enforceable.
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EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
PHARMACIA CORPORATION,
a Delaware corporation
By: /s/ Richard T. Collier
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Name: Richard T. Collier
Title: SVP and General Counsel
MONSANTO COMPANY,
a Delaware corporation
By: /s/ Terrell K. Crews
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Name: Terrell K. Crews
Title: Executive Vice President
and Chief Financial Officer
SOLUTIA INC.,
a Delaware corporation
By: /s/ Jeffry N. Quinn
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Name: Jeffry N. Quinn
Title: Senior Vice President,
Secretary and General
Counsel
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EXECUTION COPY
EXHIBIT A
FORM OF
SOLUTIA LETTER OF CREDIT
IRREVOCABLE LETTER OF CREDIT NO.
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DATE
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Monsanto Company
Attn: General Counsel
800 North Lindbergh Boulevard
St. Louis, MO 63167
To Whom It May Concern:
At the request of Solutia, Inc. ("Solutia") we, (Name and Address of Bank),
have opened an IRREVOCABLE LETTER OF CREDIT in your favor for $39,900,000
U.S. Dollars, available by your drafts at sight.
We warrant to you that all your drafts under this IRREVOCABLE LETTER OF
CREDIT will be duly honored upon presentation of your draft on us at
(Address of Bank) on or before the expiration date or on or before any
automatically extended date as set forth below.
Any draft(s) drawn by you under this Letter of Credit shall be accompanied
by your written certification that you have procured the execution of a bond
in the amount of $71,433,900.00 at the request of Solutia and that any one
or more of the following exists: (i) Claims have been made by SAFECO
Insurance Company of America ("Safeco") against you with respect to the bond
posted by Safeco ("Safeco Bond") in favor of Monsanto Company relating to
the Commonwealth of Pennsylvania, Department of General Services et. al., v.
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United States Mineral Products et. al., No. 284 M.D. 244 M.D. (Pennsylvania
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Commonwealth Court) ("Pennsylvania Litigation"); (ii) Claims have been made
by Safeco against any letter of credit or other collateral posted by you in
order to secure your performance of the Safeco Bond; (iii) An agreement has
been duly executed by the parties to the Pennsylvania Litigation settling
any claims at issue, or arguably at issue, in the Pennsylvania Litigation
and Solutia has not paid the required settlement amount within five
(5) business days after such agreement has been fully executed; or
(iv) A final, non-appealable judgment in the Pennsylvania Litigation has
been entered by a court of competent jurisdiction against Solutia or
Pharmacia Corporation (a/k/a Monsanto Company) and Solutia has not paid the
required judgment amount within five (5) business days after such judgment
has been entered.
Except as stated herein, this IRREVOCABLE LETTER OF CREDIT is effective
, 2003, and expires on August 1, 2004, but will be automatically
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extended without amendment for successive one-year periods from the current
expiration date and any future expiration date unless at least 90 days prior
to expiration date we notify you by registered letter that we elect not to
renew for such additional one-year periods.
This credit is subject to the Uniform Customs and Practices for Documentary
Credits (1993 Revision), International Chamber of Commerce, publication
no. 500.
Very truly yours,
(Authorized Signature)
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(Title)
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(To be prepared on Bank Letterhead)