[Federal Register Volume 72, Number 115 (Friday, June 15, 2007)]
[Notices]
[Pages 33336-33360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-2897]



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Part III





Department of Justice





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Antitrust Division



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United States v. Monsanto Co.; Proposed Final Judgement and Competitive 
Impact Statement; Notice

Federal Register / Vol. 72, No. 115 / Friday, June 15, 2007 / 
Notices

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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Monsanto Co.; Proposed Final Judgment and 
Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a Complaint, proposed Final 
Judgment, Hold Separate and Preservation of Assets Stipulation and 
Order, and Competitive Impact Statement have been filed with the United 
States District Court for the District of Columbia in United States v. 
Monsanto Co., Civ. Action No. 1:07CV00992. On May 31, 2007, the United 
States filed a Complaint alleging that the proposed acquisition by 
Monsanto Company (``Monsanto'') of Delta and Pine Land Company 
(``DPL'') would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The 
Complaint alleges that the acquisition would substantially reduce 
competition for the development, breeding, and sale of traited 
cottonseed in the MidSouth (Mississippi, Arkansas, Louisiana, Missouri, 
and Tennessee) and Southeast (Alabama, Georgia, Florida, South 
Carolina, North Carolina, and Virginia) United States. Specifically, 
the Complaint alleges that Monsanto's acquisition of Delta and Pine 
Land would enhance Monsanto's ability and incentive to raise traited 
cottonseed prices and eliminate Delta and Pine Land as a partner 
independent of Monsanto for competing trait developers. The proposed 
Final Judgment, lodged at the same time as the Complaint, requires the 
parties to divest (1) Monsanto's Stoneville Pedigreed Seed Company; (2) 
other Monsanto cotton breeding assets; (3) specified lines of Delta and 
Pine Land cottonseed to the acquirer of the Stoneville assets; (4) and 
specified lines of Delta and Pine Land cottonseed containing the VipCot 
transgenic trait to Syngenta AG. It also requires Monsanto to modify 
certain licenses. A Competitive Impact Statement filed by the United 
States describes the Complaint, the proposed Final Judgment, and the 
remedies available to private litigants who may have been injured by 
the alleged violation.
    Copies of the Complaint, proposed Final Judgment, Hold Separate and 
Preservation of Assets Stipulation and Order, and Competitive Impact 
Statement are available for inspection at the Department of Justice, 
Antitrust Division, 325 7th Street, NW., Suite 215, Washington, DC 
20530 (202-514-2481), on the Internet at http://www.usdoj.gov/atr, and 
at the Office of the Clerk of the United States District Court for the 
District of Columbia. Copies of these materials may be obtained from 
the Antitrust Division upon request and payment of the copying fee.
    Public comment is invited within sixty (60) days of the date of 
this notice. Such comments, and responses thereto, will be published in 
the Federal Register and filed with the Court. Comments should be 
directed to Donna N. Kooperstein, Chief, Transportation, Energy & 
Agriculture Section, Antitrust Division, Department of Justice, 325 7th 
Street, NW., Suite 500, Washington, DC 20530 (202-307-6349).

J. Robert Kramer II,
Director of Operations, Antitrust Division.

United States District Court for the District of Columbia

    United States of America, Department of Justice, Antitrust 
Division, 325 7th Street, NW., Suite 500, Washington, DC 20530, 
Plaintiff, v. Monsanto Company, 800 North Lindbergh Boulevard, St. 
Louis, MO 63167, and Delta and Pine Land Company, 1 Cotton Row, Scott, 
MS 38772, Defendants
    Civil Case No.:
    Case: 1:07-cv-00992.
    Assigned To: Urbina, Ricardo M.
    Assign. Date: 5/31/2007.
    Description: Antitrust.

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil action to 
enjoin the merger of defendants Monsanto Company (``Monsanto'') and 
Delta and Pine Land Company (``DPL'') and allege as follows:
    1. In 2006, cottonseed was planted on more than 15 million acres in 
the United States and generated more than $5 billion in annual revenues 
for United States farmers. Cotton is grown across the Southern United 
States from Virginia, the Carolinas, Georgia, and Florida on the East 
Coast to California on the West Coast.
    2. Farmers grow substantially all of this important crop from 
cottonseed that has been enhanced through the introduction of 
biotechnology traits (``traited cottonseed''). Traited cottonseed 
results from combining cottonseed stock that has attractive growing 
characteristics (such as producing a high yield of cotton per acre) 
with performance traits foreign to cotton that are inserted through 
genetic engineering.
    3. Monsanto is the largest producer and supplier of biotechnology 
traits sold in cottonseed in the United States, with over 96% of United 
States traited cottonseed containing Monsanto traits. Monsanto is also 
one of the largest sellers of traited cottonseed in the United States, 
primarily through its Stoneville Pedigreed Seed Company 
(``Stoneville'').
    4. DPL is the largest producer of cottonseed in the United States. 
DPL is the leading seller in the MidSouth (Mississippi, Arkansas, 
Louisiana, Missouri, and Tennessee), where DPL sells 79% of all traited 
cottonseed, and the Southeast (Alabama, Georgia, Florida, South 
Carolina, North Carolina, and Virginia), where DPL sells 87% of all 
traited cottonseed.
    5. In the 1980s, Monsanto partnered with DPL to introduce 
cottonseed containing Monsanto traits. DPL's experienced and 
knowledgeable cotton breeders and large collection of high-quality 
germplasm (the genetic material of a cottonseed that gives the plant 
its characteristics) provided Monsanto with an unparalleled avenue 
through which to commercialize and market its traits. The combination 
of Monsanto traits and DPL cottonseed has been highly successful, 
particularly in the MidSouth and Southeast, due to the performance of 
DPL's cottonseed and the value of Monsanto's biotechnology traits in 
those regions.
    6. Monsanto's position as the dominant supplier of traits used in 
cottonseed was jeopardized in the early 2000s when DPL began to partner 
with other biotechnology companies. Through these partnerships, DPL's 
germplasm library and breeding capabilities were available to 
alternative trait developers, allowing them to work toward introducing 
new traits in DPL cottonseed that would compete with Monsanto's traits. 
DPL publicly stated its intent to replace Monsanto traits in its 
products and planned to launch products with non-Monsanto traits as 
early as the 2009 growing season, with additional products to follow.
    7. Spurred by this competitive threat and recognizing the potential 
for a successful pairing of DPL's cottonseed with competing traits, 
Monsanto purchased Stoneville to position Monsanto to compete 
vigorously with DPL. Monsanto aggressively worked to develop 
Stoneville's germplasm and its traited cottonseed sales and also 
continued its efforts to develop germplasm and expand traited 
cottonseed sales through its Cotton States business unit.
    8. The proposed merger will consolidate Monsanto's and DPL's 
traited cottonseed sales, eliminating competition between these firms 
in the sale of cottonseed. DPL and Monsanto

[[Page 33337]]

together would control over 95% of sales in the important MidSouth and 
Southeast regions, where harvested cotton garners higher prices per 
bale, and where cottonseed traits are most valued by farmers. The 
proposed merger will also eliminate DPL as a partner independent of 
Monsanto for competing trait developers, substantially delaying or 
preventing the development and introduction of cottonseed containing 
non-Monsanto traits. Accordingly, Monsanto's merger with DPL would 
substantially lessen competition in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18.

Jurisdiction and Venue

    9. This action is filed by the United States under Section 15 of 
the Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain 
Defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18.
    10. Monsanto and DPL are engaged in interstate commerce and in 
activities substantially affecting interstate commerce. The Court has 
jurisdiction over this action and the parties pursuant to Sections 15 
and 16 of the Clayton Act, 15 U.S.C. 25, 26; and 28 U.S.C. 1331, 1337.
    11. The Defendants have consented to personal jurisdiction and 
venue in this judicial district.

II. The Defendants

    12. Defendant Monsanto is a Delaware corporation, with its 
headquarters located in St. Louis, Missouri. Monsanto is a leading 
global provider of agricultural products for farmers, including seeds 
for cotton, soybeans, and corn; traits that help farmers control 
insects and weeds; and crop protection chemicals such as the herbicide 
Roundup, a branded version of the chemical glyphosate. Monsanto had 
total company revenues of more than $7.3 billion in 2006.
    13. Defendant DPL is a Delaware corporation, with its headquarters 
located in Scott, Mississippi. DPL is the largest cottonseed producer 
in the world. DPL's sales in the United States in 2006 exceeded $400 
million.

III. Trade and Commerce

A. Affected Commerce
Cottonseed Varieties
    14. Cottonseed varieties differ in their performance, including the 
yield, the strength and the length of the cotton fibers, and the 
adaptability of the cottonseed to specific weather conditions and soil 
types. Varieties that perform best in certain regions of the country, 
such as the drier areas of the Southwest (including West Texas, Kansas, 
and Oklahoma) do not typically perform well in other regions, such as 
the MidSouth and the Southeast. Farmers select cottonseed varieties 
that have the best performance characteristics for the area in which 
the cottonseed will be planted, with the primary focus on yield.
    15. To be competitive, cottonseed companies must continually work 
on developing new and improved cottonseed varieties through their 
breeding programs. Cotton breeding is a costly and time-consuming 
process in which the cottonseed company selects lines to breed together 
(or ``cross''), plants the cottonseed produced from that initial cross, 
and then selects the best plants for further crossing to create a 
variety with the desired characteristics. In most cases, it takes eight 
to ten years from the initial cross until a new cottonseed variety is 
ready for market.
    16. The success of a cottonseed company's breeding program is 
dependent on many factors, the most important of which is the quantity 
and quality of available breeding materials, i.e. germplasm. A company 
with a large collection of high quality, or elite, germplasm has a 
competitive advantage because the company has the ability to identify 
the best genetic material and use it in a wide variety of possible 
crossing combinations, resulting in a greater likelihood of developing 
a successful variety.
    17. DPL has the largest cotton germplasm collection, with by far 
the greatest track record of success in the important MidSouth and 
Southeast regions, and an extensive breeding program for cottonseed. It 
has eight research or breeding facilities in the United States and five 
located elsewhere in the world. It has more breeding capabilities than 
any competitor and over ninety years of germplasm development.
Traits for Cottonseed
    18. Historically, farmers grew cotton from conventional cottonseed 
that contained naturally occurring characteristics. Cotton farming with 
conventional cottonseed involved labor intensive and costly herbicide 
and insecticide spraying programs that required multiple applications 
at very specific times in the growing season. Failure to spray or to 
correctly time the applications could result in substantial crop 
damage.
    19. In the 1980s, Monsanto developed a trait that could be inserted 
into cotton plants to make plants resistant to certain insects. It also 
developed an herbicide-tolerant trait that would make cotton plants 
grown from cottonseed with the trait resistant to certain herbicides 
sprayed to kill weeds, allowing farmers to spray herbicides less 
precisely without killing the young plants.
    20. To gain acceptance by farmers, the traits had to be delivered 
in cottonseed lines that performed well in the growing area where the 
farmer was located. In 1988, Monsanto approached DPL to develop and 
commercialize cottonseed with the Monsanto insect-resistant and 
herbicide-tolerant traits. DPL was then, and still is, the market 
leader in cottonseed, with what was considered the best germplasm and 
the most sought-after varieties.
    21. The companies proceeded with the development and 
commercialization process, which involved inserting the Monsanto trait 
into DPL germplasm, evaluating plant lines grown from that germplasm, 
and breeding promising candidate plants to produce varieties with 
desired characteristics. In 1996, DPL began to sell the first 
cottonseed with Monsanto's initial insect-resistant trait (marketed 
under the name ``Bollgard''), and, the following year, it introduced a 
variety with Monsanto's initial herbicide-tolerant trait (marketed 
under the name ``Roundup Ready'').
    22. Farmers, particularly those in the MidSouth and Southeast, 
quickly adopted traited cottonseed because its use significantly 
lowered overall farming costs, increased yields, and reduced the risk 
of crop loss. Today, almost all cottonseed varieties planted in the 
United States are traited, and, in 2006, over 96% of the traited 
cottonseed sold in the United States contained traits developed by 
Monsanto.
    23. When farmers acquire traited cottonseed, they pay a price per 
bag to the seed distributor, who pays the seed manufacturer for the 
seed, and a separate license fee (commonly referred to as the 
``technology fee'') to the developer of the trait. Typically, the trait 
developer shares a portion of the technology fee with the seed 
manufacturer. The technology fee can constitute as much as 80% of 
farmers' total costs for a bag of traited cottonseed.
DPL's Trait Development With Monsanto's Competitors
    24. Following Monsanto's and DPL's successful introduction 
oftraited cottonseed, they agreed in 1998 that Monsanto would acquire 
DPL. The Antitrust Division of the United States Department of Justice 
investigated the proposed transaction. In late 1999, while the 
transaction was still under review, Monsanto decided to abandon

[[Page 33338]]

the transaction. DPL thus remained an independent company.
    25. Despite ensuing litigation from the companies' failed attempt 
to merge, DPL continued to develop and market cottonseed varieties with 
Monsanto's traits. DPL also commenced a strategy to replace (or 
``trade-out'') the Monsanto traits in DPL cottonseed with traits of 
other companies. DPL believed that this strategy would be profitable 
for DPL because competing trait developers would offer DPL a higher 
percentage of the technology fee for traits than would Monsanto. In 
DPL's suit against Monsanto for breach of the merger agreement, DPL 
alleged significant financial losses resulting from the delay that the 
failed merger caused to DPL's efforts to develop traits with companies 
other than Monsanto.
    26. Pursuant to the trade-out strategy, DPL has worked with several 
other biotechnology companies, including Dow AgroSciences, DuPont, 
Syngenta Crop Protection AG and Bayer CropScience, to develop and 
commercialize cottonseed containing the traits developed by these 
companies that would compete with cottonseed containing Monsanto's 
traits. DPL is an attractive partner that is well suited to quickly 
introduce new trait technologies due to the strength and breadth of its 
germplasm base and breeding programs as well as its technical service 
capabilities, know-how, brand recognition and market position.
    27. DPL's trait license with Monsanto also makes DPL an attractive 
partner for competing trait developers. Most farmers in the United 
States buy cottonseed containing traits that provide both herbicide 
tolerance and insect resistance. In the MidSouth and Southeast United 
States, the vast majority of farmers use both traits. DPL's trait 
licenses with Monsanto allow DPL to offer competing trait developers 
the ability to combine or ``stack'' their traits in DPL cottonseed 
along with Monsanto traits. This stacking right would allow, for 
example, the developer of an insect-resistant trait to bring that trait 
to market in cottonseed that also contains a Monsanto herbicide-
tolerant trait (i.e., Roundup Ready or the more-recent version, Roundup 
Ready Flex). Monsanto's trait licenses with most other cottonseed 
companies, by contrast, severely restrict the ability of these 
companies to work with other trait developers, with some of these 
licenses prohibiting the stacking of cottonseed containing Monsanto 
traits with another company's traits and others subjecting the 
licensees to severe penalties if they stack non-Monsanto traits with 
Monsanto traits.
    28. Even with the advantages that partnering with DPL offers 
Monsanto's competing trait developers, the process to develop, breed 
and commercialize cotton varieties with traits typically takes eight to 
twelve years and costs over $40 million. The process often requires 
thousands of attempts before developing a traited cottonseed that then 
can be used to breed commercial varieties. In addition, extensive 
regulatory approvals, both in the United States and abroad, are 
required.
    29. DPL's trait-development work with Monsanto's competitors has 
recently begun to show results. DPL's developmental work with Syngenta 
resulted in a 2004 agreement to commercialize cottonseed with 
Syngenta's VipCot insect-resistant traits. DPL expects to begin 
marketing such cottonseed as early as 2009. The DPL/Syngenta agreement 
provides that DPL will receive 70% of the net trait technology fees 
earned through sales of this product, compared with the 30% that DPL 
earns pursuant to its Monsanto agreement.
Monsanto's Competitive Reaction to DPL's ``Trade-Out'' Plan
    30. Monsanto recognized that its and DPL's ``paths will continue to 
diverge'' as DPL continues its strategy to replace Monsanto traits in 
DPL cottonseed with traits developed by Monsanto's competitors. Driven 
by the competitive threat posed by DPL's work with these other 
companies, Monsanto set about building its own cottonseed business.
    31. In 2002, Monsanto began Cotton States, through which Monsanto 
obtains licenses on germplasm developed by private breeders and 
universities, breeds its traits into the germplasm, and out-licenses 
the resulting traited varieties to sellers of cottonseed for sale under 
their private labels.
    32. In 2005, Monsanto repurchased Stoneville, the second-largest 
traited cottonseed company in the MidSouth and Southeast United States. 
Monsanto had previously owned Stoneville but sold it in 1999 before 
abandoning its attempt to acquire DPL. Upon reacquiring Stoneville, 
Monsanto immediately invested capital to improve Stoneville's 
competitive position.
    33. Monsanto aggressively worked to strengthen its cottonseed 
business by, among other things, focusing on advanced breeding 
techniques and germplasm development and investing in breeding 
facilities. Monsanto predicted internally that these investments would 
enable Monsanto to increase its share of the cottonseed business at the 
expense of DPL and other companies.
B. Relevant Markets
    34. Across regions such as the MidSouth and Southeast, growing 
conditions for cotton differ due to weather conditions, soil type, and 
varied demands for weed and insect control. Fanners demand cottonseed 
varieties that produce high yield for their particular growing 
conditions. Monsanto and DPL recognize this demand and market 
cottonseed varieties by region.
    35. In many regions of the country, including the MidSouth and 
Southeast, farmers demand that cottonseed have traits to provide insect 
resistance and herbicide tolerance. Monsanto prices traits by region.
    36. Cotton fanners consider cotton the most valuable crop for their 
land, and the cost of the traited cottonseed amounts to only a fraction 
of the total cost of growing cotton. If there were a small but 
significant increase in price of traited cottonseed within regions such 
as the MidSouth and Southeast, it is not likely that farmers would 
switch to other crops or switch purchases to conventional (non-traited) 
cottonseed or cottonseed varieties not well suited for their regions in 
sufficient volumes to make the price increase unprofitable. The 
development, commercialization, and sale of traited cottonseed 
constitutes a line of commerce or product market, and the MidSouth and 
Southeast United States are sections of the country or geographic 
markets, within the meaning of Section 7 of the Clayton Act.

IV. Anticompetitive Effects

A. Concentration
    37. DPL is the largest firm in the traited cottonseed market in the 
United States. It is even more dominant in the MidSouth United States 
market, with 79% of the traited cottonseed sales, and the Southeast 
United States market, with over 87% of the traited cottonseed sales.
    38. Monsanto is the second-largest traited cottonseed company in 
the MidSouth and Southeast United States markets, with 17% of sales in 
the MidSouth United States market and 8% of sales in the Southeast 
United States market.
    39. After the merger, Monsanto would account for more than 95% of 
sales of traited cottonseed in the MidSouth United States market and 
95% of sales in the Southeast United States market.
    40. Using a measure of market concentration called the Herfindahl-

[[Page 33339]]

Hirschman Index (``HHI''), explained in Appendix A, Monsanto's merger 
with DPL would result in a post-merger HHI of 9110 in the MidSouth 
United States market, with an increase of 331O, and a post-merger HHI 
of 9184 in the Southeast United States, with an increase of 1489.
B. Effect of Transaction
    41. The merger will eliminate competition between DPL and Monsanto 
for the development, breeding, and sale of traited cottonseed. As a 
result, farmers likely will have fewer choices of, and face higher 
prices for, traited cottonseed.
    42. The merger will also eliminate DPL as a partner independent of 
Monsanto for developers of traits that would compete against Monsanto. 
DPL's current efforts to develop and commercialize cottonseed with 
Syngenta's VipCot insect-resistant technology, which would be 
competitive with Monsanto's Bollgard and more-recent Bongard II traits, 
will be substantially delayed or prevented. Further, the merger will 
likely delay if not deter efforts to develop other traits that would 
compete with Monsanto traits and that would provide benefits to United 
States cotton farmers, including other insect-resistant traits, 
herbicide-tolerant traits, and potentially other cottonseed traits. As 
a result, farmers likely will have fewer choices of, and face higher 
prices for, traited cottonseed.

V. Entry

    43. Entry into the traited cottonseed business requires the assets 
and expertise both to breed high-performing varieties of cottonseed and 
to develop or access herbicide-tolerant and insect-resistant traits to 
breed into the cottonseed. Each of those steps requires many years and 
the investment of tens of millions of dollars.
    44. Entry into the traited cottonseed business would not be timely, 
likely, or sufficient in its magnitude, character, and scope to deter 
or counteract an anticompetitive increase in the price of traited 
cottonseed by the merged Monsanto or DPL.

VI. Violation Alleged

    45. The effect of Monsanto's merger with DPL may be substantially 
to lessen competition in the market for the development, production, 
and sale of traited cottonseed in violation of Section 7 of the Clayton 
Act. Unless restrained, the transaction would likely have the following 
effects, among others:
    a. Competition in the market for the development, production, and 
sale of traited cottonseed in the MidSouth and Southeast United States 
would be substantially lessened; and
    b. Cotton farmers will suffer harm as a result of fewer choices and 
higher prices for traited cottonseed.

VII. Request for Relief

    Plaintiff requests that this Court adjudicate and decree as 
follows:
    1. That Monsanto's proposed merger with DPL would violate Section 7 
of the Clayton Act, as amended, 15 U.S.C. 18;
    2. That Monsanto and DPL be permanently enjoined from carrying out 
their proposed merger, or from entering into or carrying out any 
agreement, understanding, or plan, the effect of which would be to 
combine the businesses or assets of Monsanto and DPL;
    3. That Plaintiff be awarded the costs of this action; and
    4. Such other relief as the Court may deem just and proper.

    Dated: May 31, 2007.

    Respectfully submitted,

For Plaintiff United States

Thomas O. Barnett,

Assistant Attorney General.

David L. Meyer,

Deputy Assistant Attorney General.

J. Robert Kramer II,

Director of Operations.

Donna N. Kooperstein,
Chief, Transportation, Energy & Agriculture Section.

William H. Stallings,

Assistant Chief, Transportation, Energy & Agriculture Section.

Jill A. Ptacek (WA Bar <greek-i>18756)
Angela L. Hughes (DC Bar <greek-i>303420)
J. Richard Doidge (MA Bar <greek-i>600158)
Michael D. Billiel (DC Bar <greek-i>394377)
David A. Blotner (WI Bar <greek-i>1008674)
Ian R. Conner (V A Bar <greek-i>65349)
John W. Elias (CA Bar <greek-i>244620)
Tracy L. Fisher (MN Bar <greek-i>315837)
Mark J. Niefer (DC Bar <greek-i>470370)
Sarah L. Wagner (TX Bar <greek-i>24013700)

Trial Attorneys, U.S. Department of Justice, Antitrust Division, 
Transportation, Energy & Agriculture Section, 325 7th Street, NW., 
Suite 500, Washington, DC 20004 Telephone: (202) 307-6607, 
Facsimile: (202) 307-2784.

Appendix A--Definition of HHI

    ``HHI'' means the Herfindahl-Hirschman Index, a commonly 
accepted measure of market concentration. It is calculated by 
squaring the market share of each firm competing in the market and 
then summing the resulting numbers. For example, for a market 
consisting of four firms with shares of 30, 30, 20, and 20 percent, 
the HHI is 2,600 (30\2\ + 30\2\ +20\2\ + 20\2\ = 2,600). (Note: 
Throughout the Complaint, market share percentages have been rounded 
to the nearest whole number, but HHIs have been estimated using 
unrounded percentages in order to accurately reflect the 
concentration of the various markets.) The HHI takes into account 
the relative size distribution of the firms in a market and 
approaches zero when a market consists of a large number of small 
firms. The HHI increases both as the number of firms in the market 
decreases and as the disparity in size between those firms 
increases.
    Markets in which the HHI is between 1,000 and 1,800 points are 
considered to be moderately concentrated, and those in which the HHI 
is in excess of 1,800 points are considered to be highly 
concentrated. See Horizontal Merger Guidelines 1.51 (revised Apr. 8, 
1997). Transactions that increase the HHI by more than 100 points in 
concentrated markets presumptively raise antitrust concerns under 
the guidelines issued by the U.S. Department of Justice and Federal 
Trade Commission. See id.

United States District Court for the District of Columbia

    United States of America, Plaintiff, Monsanto Company and Delta and 
Pine Land Company, Defendants.
    Case: 1:07-cv-00992 Assigned To: Urbina, Ricardo M. Assign Date: 5/
31/2007 Description: Antitrust.

Proposed Final Judgment

    Whereas, Plaintiff United States of America filed its Complaint on 
May 31, 2007, Plaintiff and Defendants, Monsanto Company (``Monsanto'') 
and Delta and Pine Land Company (``DPL''), by their respective 
attorneys, have consented to the entry of this Final Judgment without 
trial or adjudication of any issue of fact or law, and without this 
Final Judgment constituting any evidence against or admission by any 
party regarding any issue of fact or law;
    And whereas, Defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights and assets and alterations of 
certain existing license terms by Defendants to assure that competition 
is not substantially lessened;
    And whereas, Plaintiff requires Defendants to make certain 
divestitures and alter certain existing license terms for the purpose 
of remedying the loss of competition alleged in the Complaint;
    And whereas, Defendants have represented to Plaintiff that the 
divestitures and license term alterations required below can and shall 
be made and that Defendants shall later raise no claim of hardship or 
difficulty as grounds for asking the Court to modify any of the 
divestiture or license alteration provisions contained below;

[[Page 33340]]

    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against Defendants under Section 7 of the Clayton 
Act, 15 U.S.C. 18.

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer of the Enhanced Stoneville Assets'' means the entity 
or entities to whom Defendant Monsanto divests the Enhanced Stoneville 
Assets.
    B. ``Cotton States'' means Defendant Monsanto's cotton variety 
licensing business pursuant to which Defendant Monsanto licenses other 
cottonseed companies to produce or sell Defendant Monsanto's own cotton 
varieties, cotton varieties Defendant Monsanto in-licenses from other 
breeders, or cotton varieties Defendant Monsanto produces from such 
varieties.
    C. ``DPL'' means Defendant Delta and Pine Land Company, a Delaware 
corporation with its headquarters in Scott, Mississippi, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
interests in partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    D. ``DPL Acquirer'' means the entity to whom Defendant Monsanto 
divests Defendant DPL.
    E. ``Monsanto'' means Defendant Monsanto Company, a Delaware 
corporation with its headquarters in St. Louis, Missouri, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    F. ``Stoneville'' means all assets used exclusively or primarily 
in, or to support, the U.S. business of Stoneville Pedigreed Seed 
Company, including, but not limited to the assets described in Schedule 
A.
    G. ``Enhanced Stoneville Assets'' means Stoneville and the 
additional assets, properties, and rights listed in Schedule B.
    H. ``Syngenta'' means Syngenta Crop Protection AG, a Swiss 
corporation with its headquarters in Basel, Switzerland, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    I. ``Vip Cot Assets'' means the assets, properties, and rights 
listed in Schedule C.

III. Applicability

    A. This Final Judgment applies to Defendants Monsanto and DPL, as 
defined above, and all other persons in active concert or participation 
with any of them who receive actual notice of this Final Judgment by 
personal service or otherwise.
    B. If, prior to complying with Sections IV and V of this Final 
Judgment, Defendants sell or otherwise dispose of all or substantially 
all of their assets that include the Enhanced Stoneville Assets or the 
VipCot Assets, they shall require, as a condition of the sale or other 
disposition, that the purchaser(s) agree to be bound by the provisions 
of this Final Judgment. Defendants need not obtain such an agreement 
from the acquirers of the assets divested pursuant to this Final 
Judgment.

IV. Divestiture of Enhanced Stoneville Assets

    A. Defendants are ordered and directed, in accordance with the 
terms of this Final Judgment, within ninety (90) calendar days after 
the filing of the Complaint in this matter, to divest the Enhanced 
Stoneville Assets to an acquirer acceptable to Plaintiff in Plaintiff's 
sole discretion. Defendants shall use their best efforts to accomplish 
the divestiture of the Enhanced Stoneville Assets as expeditiously as 
possible. Plaintiff, in its sole discretion, may grant one or more 
extensions of this time period, not to exceed sixty (60) calendar days 
in total, and shall notify the Court in each such circumstance.
    B. Within two (2) business days following execution of a definitive 
agreement or agreements for the divestiture of the Enhanced Stoneville 
Assets, or the filing of this Final Judgment, whichever is later, 
Defendants shall notify Plaintiff in writing of the proposed 
divestiture. The notice shall set forth the details of the proposed 
divestiture, including a list of the name, address, and telephone 
number of each person who offered, or expressed an interest in or 
desire, to acquire any ownership interest in the Enhanced Stoneville 
Assets, together with full details of the same. Defendants need not 
include in this notice information about any persons previously 
identified in an affidavit filed in compliance with this Final Judgment 
as offering, or expressing an interest in or desiring, to acquire any 
ownership interest in the Enhanced Stoneville Assets. Defendants shall 
include with the notice a copy of the divestiture agreement or 
agreements and copies of any other agreements entered into by either or 
both of the Defendants and the proposed Acquirer of the Enhanced 
Stoneville Assets since the Complaint in this matter was filed, or up 
to three (3) months before the filing of the Complaint in this matter. 
Defendants may incorporate by reference in this notice any responsive 
information or documents previously provided to Plaintiff, provided 
that Defendants identify with specificity when the information or 
documents were previously provided and, if the information or documents 
were part of a larger submission, where in the submission the 
information or documents may be located.
    C. Within fifteen (15) calendar days of receipt by Plaintiff of 
such notice, Plaintiff may request from Defendants, the proposed 
Acquirer of the Enhanced Stoneville Assets, or any other third party, 
additional information concerning the proposed divestiture, the 
proposed Acquirer of the Enhanced Stoneville Assets, and any other 
potential acquirer. Defendants shall furnish any additional information 
requested of Defendants within fifteen (15) calendar days of the 
receipt of the request, unless Defendants and Plaintiff shall otherwise 
agree.
    D. Within fifteen (15) calendar days after receipt of the notice or 
within ten (10) calendar days after Plaintiff has been provided the 
additional information requested from Defendants, the proposed Acquirer 
of the Enhanced Stoneville Assets, and any third party, whichever is 
later, Plaintiff shall provide written notice to Defendants stating 
whether or not it objects to the proposed divestiture. If Plaintiff 
provides written notice that it does not object, the divestiture may be 
consummated. Absent written notice that Plaintiff does not object to 
the proposed Acquirer of the Enhanced Stoneville Assets or upon 
objection by Plaintiff, the divestiture of the Enhanced Stoneville 
Assets to that proposed Acquirer shall not be consummated.
    E. The divestiture of the Enhanced Stoneville Assets shall be 
accomplished in such a way as to satisfy Plaintiff, in its sole 
discretion, that the Enhanced Stoneville Assets can and shall be used 
by the Acquirer of the Enhanced Stoneville Assets to operate a viable, 
ongoing business engaged in the development, production and sale of 
traited cottonseed. The divestiture of the Enhanced Stoneville Assets:
    (1) Shall be made to an Acquirer of the Enhanced Stoneville Assets 
that, in Plaintiff's sole judgment, has the intent and capability 
(including the necessary

[[Page 33341]]

managerial, operational, technical, and financial capability and 
intellectual property rights) of competing effectively in the business 
of developing, producing and selling traited cottonseed in the United 
States, including a credible commitment to the traited cottonseed 
market;
    (2) Shall be accomplished so as to satisfy Plaintiff, in its sole 
discretion, that the divestiture shall not result in the substantial 
lessening of competition for the development, production, and sale of 
traited cottonseed in any geographic area; and
    (3) Shall be accomplished so as to satisfy Plaintiff, in its sole 
discretion, that none of the terms of any agreement between an Acquirer 
of the Enhanced Stoneville Assets and Defendants give Defendants the 
ability unreasonably to raise the Acquirer's costs, to lower the 
Acquirer's efficiency, or otherwise to interfere in the ability of the 
Acquirer to compete effectively.
    F. Defendants shall provide to the Acquirer of the Enhanced 
Stoneville Assets and Plaintiff information relating to the personnel 
primarily involved in the operation of Stoneville to enable the 
Acquirer of the Enhanced Stoneville Assets to make offers of 
employment. Defendants shall not interfere with any negotiations by the 
Acquirer of the Enhanced Stoneville Assets to employ any such 
personnel.
    G. For a period of two (2) years from the filing of the Complaint 
in this matter, Defendants shall not solicit to hire, or hire, any 
individual primarily involved in the operation of Stoneville on the 
date of the filing of the Complaint in this matter who receives a 
substantially equivalent offer of employment from the Acquirer, unless 
such individual is terminated or laid off by the Acquirer, or the 
Acquirer agrees that Defendants may solicit and employ that individual.
    H. Defendants shall not take any action that shall impede in any 
way the operation, use or divestiture of the Enhanced Stoneville 
Assets.
    I. Defendants shall warrant to the Acquirer of the Enhanced 
Stoneville Assets that there are no material defects in the 
environmental, zoning or other permits pertaining to the operation of 
each asset that shall have a material adverse effect on the operation 
of the Enhanced Stoneville Assets, and that following the sale of the 
Enhanced Stoneville Assets, Defendants shall not undertake, directly or 
indirectly, any challenges to the environmental, zoning, or other 
permits relating to the use or operation of the Enhanced Stoneville 
Assets based on actions or inactions that existed prior to the date of 
divestiture.

V. Divestiture of VipCot Assets

    A. Defendants are ordered and directed, in accordance with the 
terms of this Final Judgment, to offer Syngenta the VipCot Assets 
listed in the attached Schedule C within thirty (30) calendar days of 
the filing of the Complaint in this matter. The offer shall remain open 
for at least six (6) months. Defendants shall use their best efforts to 
accomplish the divestiture of the VipCot Assets as expeditiously as 
possible, but in any event no later than ninety (90) calendar days 
after the divestiture of the Enhanced Stoneville Assets or thirty (30) 
calendar days after Syngenta accepts the offer, whichever is latest. 
Plaintiff, in its sole discretion, may extend the time period for 
Defendants to divest the VipCot Assets to Syngenta by granting one or 
more extensions, not to exceed ninety (90) calendar days in total, and 
shall notify the Court in each such circumstance.
    B. Prior to transmitting to Syngenta the offer for the assets 
described in the attached Schedule C, Defendants shall provide 
Plaintiff with copies of the offer for the approval of the Plaintiff in 
its sole discretion. Along with the offer, Defendants shall provide 
Plaintiff copies of any other agreements not previously provided to 
Plaintiff entered into by either or both of the Defendants and Syngenta 
since the Complaint in this matter was filed, or up to three (3) months 
before the filing of the Complaint in this matter. Within five (5) 
business days following receipt of the offer, Plaintiff shall provide 
written notice to Defendants stating whether the offer must be amended 
to meet the objectives of the divestiture of the VipCot Assets. Absent 
written notice that Plaintiff does not object to the offer, the 
divestiture of the VipCot Assets to Syngenta pursuant to the offer 
shall not proceed. Upon objection by Plaintiff, Defendants shall alter 
the terms of the offer to satisfy Plaintiff in its sole discretion.
    C. Defendants shall permit Syngenta to have reasonable access to 
personnel and to any and all financial, operational, or other documents 
and information relating to the VipCot Assets customarily provided as 
part of a due diligence process.
    D. Defendants shall not take any action that shall harm the VipCot 
Assets or impede in any way the divestiture of the VipCot Assets.

VI. Changes in Third Party Licenses

    A. Defendant Monsanto agrees to offer to its licensees, within 
thirty (30) calendar days of the date of the sale of the Enhanced 
Stoneville Assets, to make the following changes to its third-party 
cottonseed trait and Cotton States licenses, subject to the approval of 
Plaintiff in its sole discretion:
    1. Current Cotton Insect Resistance and Herbicide Tolerance Trait 
Licensing--Agreements: Defendant Monsanto shall modify its current 
cottonseed trait licenses to provide the licensees with the flexibility 
Defendant DPL currently has to develop, market or sell cottonseed 
containing non-Monsanto traits by removing any provisions that require 
or incentivize the licensee to develop, market or sell cottonseed 
containing only traits from Defendant Monsanto.
    2. Cotton States Licenses: Defendant Monsanto shall modify its 
Cotton--States licenses to eliminate any provision that allows 
Defendant Monsanto to terminate the license if the licensee sells 
cottonseed containing non-Monsanto traits in brands not licensed under 
the Cotton States license.
    B. Prior to making the offers, and no later than five (5) days 
after the date of sale of the Enhanced Stoneville Assets, Defendant 
Monsanto shall provide Plaintiff with copies of the offers for the 
approval of Plaintiff in its sole discretion. Within five (5) days of 
receipt of the offers to modify the license agreements, Plaintiff shall 
provide written notice to Defendant Monsanto stating whether the offers 
must be amended. Absent written notice that Plaintiff does not object 
to the offers, Defendant Monsanto may not proceed with offering the 
modifications to the licensees. Upon objection by Plaintiff, Defendant 
Monsanto shall alter the terms of the offers to satisfy Plaintiff in 
its sole discretion. In the event any of the licensees do not accept 
the offer containing the modifications described in Section VI.A. as 
approved by Plaintiff in its sole discretion, Defendant Monsanto shall 
act as though such modification has been made and shall not enforce any 
license provision that is the subject of any such modification.

VII. Divestiture of Defendant DPL

    A. If Defendants have not divested the Enhanced Stoneville Assets 
by the end of the time period permitted by this Final Judgment, 
Defendants shall notify Plaintiff of that fact in writing. Defendant 
Monsanto shall then divest DPL within sixty (60) days. If Defendant 
Monsanto has not divested Defendant DPL by the end of the sixty-day 
period, Defendant Monsanto shall notify Plaintiff of that fact in 
writing. Upon application of Plaintiff, the Court shall appoint a 
trustee selected by Plaintiff and approved by the Court to effect the 
divestiture of Defendant DPL.

[[Page 33342]]

    B. Defendant Monsanto shall use its best efforts to assist the 
trustee in accomplishing the required divestiture of Defendant DPL, 
including its best efforts to effect all necessary regulatory 
approvals. The trustee and any consultants, accountants, attorneys, and 
other persons retained by the trustee shall have full and complete 
access to the personnel, books, records, and assets at the facilities 
to be divested, and Defendant Monsanto shall develop financial or other 
information relevant to the assets to be divested customarily provided 
in a due diligence process as the trustee may reasonably request, 
subject to reasonable protection for confidential commercial 
information. In addition, Defendant Monsanto shall:
    (1) Permit prospective acquirers of Defendant DPL who have been 
invited to submit binding bids for Defendant DPL to have reasonable 
access to Defendant DPL's personnel and to make such inspection of 
Defendant DPL and any and all financial, operational, or other 
documents and other information as may be relevant to the divestiture 
of Defendant DPL, subject to reasonable protection for confidential 
commercial information;
    (2) Provide the DPL Acquirer and Plaintiff information relating to 
the personnel of Defendant DPL to enable the DPL Acquirer to make 
offers of employment;
    (3) Take no action to interfere with any negotiations by the DPL 
Acquirer to employ any Defendant DPL employee;
    (4) Take no action to interfere with or to impede the trustee's 
accomplishment of the divestiture of Defendant DPL;
    (5) Warrant to the DPL Acquirer that on the date of sale each asset 
shall be in the same condition as when Defendant Monsanto acquired 
Defendant DPL, except for the harvesting of cotton plants and selection 
lines in the ordinary course of business, and ordinary wear and tear of 
assets and facilities;
    (6) Warrant to the DPL Acquirer that there are no material defects 
in the environmental, zoning or other permits pertaining to the 
operation of each asset that have arisen since Defendant Monsanto 
acquired Defendant DPL; and
    (7) Shall not, following divestiture of Defendant DPL, undertake, 
directly or indirectly, any challenges to the environmental, zoning, or 
other permits relating to the operation of Defendant DPL, or otherwise 
take any action that shall impede in any way the permitting, operation, 
or divestiture of Defendant DPL.
    C. Unless Plaintiff otherwise consents in writing, the divestiture 
of Defendant DPL pursuant to this Section of the Final Judgment, 
whether accomplished by Defendant Monsanto or a trustee, shall include 
the entirety of Defendant DPL, and shall be accomplished in such a way 
as to satisfy Plaintiff, in its sole discretion, that (a) Defendant DPL 
shall remain no less viable than when Defendant Monsanto acquired it, 
(b) the divestiture of Defendant DPL shall remedy the competitive harm 
alleged in the Complaint, and (c) none of the terms of any agreement 
between a DPL Acquirer and Defendant Monsanto give Defendant Monsanto 
the ability unreasonably to raise that person's costs, to lower that 
person's efficiency, or otherwise to interfere in the ability of that 
person to compete effectively.
    D. The trustee shall have the power and authority to accomplish the 
divestiture of Defendant DPL at the earliest possible time to an 
acquirer acceptable to Plaintiff, in its sole discretion, at such price 
and on such terms as are then obtainable upon reasonable effort by the 
trustee, and shall have such other powers as the Court deems 
appropriate. Subject to Section VII.F of this Final Judgment, the 
trustee shall have the power and authority to hire at the cost and 
expense of Defendant Monsanto any investment bankers, attorneys, or 
other agents who are reasonably necessary in the judgment of the 
trustee to assist in the divestiture of Defendant DPL and who shall be 
solely accountable to the trustee.
    E. Defendant Monsanto shall not object to a sale by the trustee on 
any ground other than the trustee's malfeasance. Any such objections by 
Defendant Monsanto must be conveyed in writing to Plaintiff and the 
trustee within ten (10) calendar days after the trustee has provided 
the notice required under this Section.
    F. The trustee shall serve at the cost and expense of Defendant 
Monsanto, on such terms and conditions as Plaintiff approves, and shall 
account for all monies derived from the sale of the assets sold by the 
trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining money shall be paid to Defendant Monsanto, and the trust 
shall then be terminated. The compensation of the trustee and of any 
professionals and agents retained by the trustee shall be reasonable in 
light of the value of Defendant DPL and based on a fee arrangement 
providing the trustee with an incentive based on the price and terms of 
the divestiture of Defendant DPL and the speed with which it is 
accomplished, but timeliness is paramount.
    G. After its appointment, the trustee shall file monthly reports 
with Plaintiff, Defendant Monsanto, and the Court setting forth the 
trustee's efforts to accomplish the divestiture of Defendant DPL, 
provided however, that to the extent such reports contain information 
that the trustee deems confidential, such reports shall not be filed in 
the public docket of the Court and Defendant Monsanto's copy of the 
report shall have such confidential information redacted. Such reports 
shall include the name, address, and telephone number of each person 
who, during the preceding month, made an offer to acquire, expressed an 
interest in acquiring, entered into negotiations to acquire, or was 
contacted or made an inquiry about acquiring, any interest in Defendant 
DPL, and shall describe in detail each contact with any such person 
during that period. The trustee shall maintain full records of all 
efforts made to divest Defendant DPL.
    H. If the trustee has not accomplished such divestiture of 
Defendant DPL within ninety (90) calendar days after its appointment, 
the trustee shall file promptly with the Court a report setting forth 
(1) The trustee's efforts to accomplish the required divestiture of 
Defendant DPL; (2) the reasons, in the trustee's judgment, why the 
required divestiture of Defendant DPL has not been accomplished; and 
(3) the trustee's recommendations. To the extent such report contains 
information that the trustee deems confidential, such report shall not 
be filed in the public docket of the Court. The trustee shall at the 
same time furnish such report to Plaintiff. Plaintiff shall have the 
right to make additional recommendations consistent with the purpose of 
the trust. The Court shall enter thereafter such orders as it shall 
deem appropriate to carry out the purpose of this Final Judgment which 
may, if necessary, include extending this Final Judgment and the term 
of the trustee's appointment by a period requested by Plaintiff.
    I. The trustee shall notify Plaintiff and Defendant Monsanto within 
two (2) business days following execution of a definitive agreement for 
the sale of Defendant DPL. The notice shall set forth the details of 
the proposed divestiture of Defendant DPL and list the name, address, 
and telephone number of each person not previously identified who 
offered or expressed an interest in or desire to acquire any ownership 
interest in Defendant DPL, together with full details of the same.

[[Page 33343]]

    J. Within fifteen (15) calendar days of receipt by Plaintiff of 
such notice, Plaintiff may request from Defendants, the proposed DPL 
Acquirer, any other third party, or the trustee, additional information 
concerning the proposed divestiture of Defendant DPL, the proposed DPL 
Acquirer, and any other potential acquirer. Defendants and the trustee 
shall furnish any additional information requested within fifteen (15) 
calendar days of the receipt of the request, unless the Defendants and 
Plaintiff shall otherwise agree.
    K. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after Plaintiff has been provided the 
additional information requested from Defendant Monsanto, the proposed 
DPL Acquirer, any third party, and the trustee, whichever is later, 
Plaintiff shall provide written notice to Defendant Monsanto and the 
trustee stating whether or not it objects to the proposed divestiture 
of Defendant DPL. If Plaintiff provides written notice that it does not 
object, the sale of Defendant DPL may be consummated, subject only to 
Defendant Monsanto's limited right to object to the sale under Section 
VII.E of this Final Judgment. Absent written notice that Plaintiff does 
not object to the proposed DPL Acquirer or upon objection by Plaintiff, 
the sale of Defendant DPL shall not be consummated. Upon objection by 
Defendant Monsanto under Section VII.E, a sale of Defendant DPL 
proposed under this Section shall not be consummated unless approved by 
the Court.

VIII. Financing

    Defendants shall not finance all or any part of any purchase made 
pursuant to Section IV or Section VII of this Final Judgment.

IX. Hold Separate

    Until the divestitures required by this Final Judgment have been 
accomplished, Defendants shall take all steps necessary to comply with 
the Hold Separate and Preservation of Assets Stipulation and Order 
entered by this Court. Defendants shall take no action that would 
jeopardize the divestitures ordered by this Court.

X. Affidavits

    A. Within ten (10) calendar days of the filing of the Complaint in 
this matter, and every thirty (30) calendar days thereafter until the 
divestitures have been completed under Sections IV and V, Defendants 
shall deliver to Plaintiff an affidavit as to the fact and manner of 
its compliance with Sections IV, V, and VI of this Final Judgment. Each 
such affidavit shall include the name, address, and telephone number of 
each person who, during the preceding thirty days, made an offer to 
acquire, expressed an interest in acquiring, entered into negotiations 
to acquire, or was contacted or made an inquiry about acquiring, any 
interest in the Enhanced Stoneville Assets, and shall describe in 
detail each contact with any such person during that period, including 
a summary of all conversations (1) Between Defendants and any Acquirer 
of the Enhanced Stoneville Assets, and (2) between Defendants and 
Syngenta with respect to the VipCot Assets. Defendants may incorporate 
by reference in any such affidavit any responsive information or 
documents previously provided to Plaintiff, provided however, that 
Defendants identify with specificity when the information or documents 
were previously provided and, if the information or documents were part 
of a larger submission, where in the submission the information or 
documents may be located. Assuming the information set forth in the 
affidavit is true and complete, any objection by Plaintiff to 
information provided by Defendants, including any limitation on 
information, shall be made within fourteen (14) days of receipt of such 
affidavit.
    B. Defendants shall keep all records of all efforts made to 
preserve and divest the Enhanced Stoneville Assets and VipCot Assets 
until one year after each such divestiture has been completed.

XI. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of determining whether the Final Judgment should be 
modified or vacated, and subject to any legally recognized privilege, 
from time to time duly authorized representatives of the United States 
Department of Justice, including consultants and other persons retained 
by the United States, shall, upon written request of a duly authorized 
representative of the Assistant Attorney General in charge of the 
Antitrust Division, and on reasonable notice to Defendants, be 
permitted:
    (1) Access during Defendants' office hours to inspect and copy, or 
at Plaintiffs option, to require Defendants to provide copies of all 
books, ledgers, accounts, records and documents in the possession, 
custody, or control of Defendants, relating to any matters contained in 
this Final Judgment; and
    (2) To interview, either informally or on the record, Defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by Defendants.
    B. Upon the written request of a duly authorized representative of 
the Assistant Attorney General in charge of the Antitrust Division, 
Defendants shall submit written reports or responses to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this Section shall be divulged by Plaintiff to any person other than an 
authorized representative of the executive branch of the United States, 
except in the course of legal proceedings to which the United States is 
a party (including grand jury proceedings), or for the purpose of 
securing compliance with this Final Judgment, or as otherwise required 
by law.
    D. If, at the time information or documents are furnished by 
Defendants to Plaintiff, Defendants represent and identify in writing 
the material in any such information or documents to which a claim of 
protection may be asserted under Rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and Defendants mark each pertinent page of such 
material, ``Subject to claim of protection under Rule 26( c)(7) of the 
Federal Rules of Civil Procedure,'' then Plaintiff shall give 
Defendants ten (10) calendar days' notice prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding).

XII. Notification

    A. Unless such transaction is otherwise subject to the reporting 
and waiting period requirements of the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''), 
Defendant Monsanto, without providing advance notification to 
Plaintiff, shall not directly or indirectly acquire (1) Voting 
securities, (2) all or substantially all of the cotton germplasm, or 
(3) substantially all of the assets relating to cottonseeds or 
cottonseed traits, of any company that develops and sells cottonseed in 
the United States, or any company that has developed, or has under 
development traits for commercialization in cottonseed in the United 
States, where such acquisition would be reportable under the HSR Act 
but for a failure to satisfy the thresholds of 15 U.S.C. l8a(a)(2).

[[Page 33344]]

    B. Such notification shall be provided to Plaintiff in the same 
format as, and per the instructions relating to the Notification and 
Report Form set forth in the Appendix to Part 803 of Title 16 of the 
Code of Federal Regulations as amended, except that the information 
requested in Items 5 through 9 of the instructions must be provided 
only about cottonseeds or transgenic traits that shall be or could be 
used in cottonseeds. Notification shall be provided at least thirty 
(30) days prior to acquiring any such interest, and shall include, 
beyond what may be required by the applicable instructions, the names 
of the principal representatives of the parties to the agreement who 
negotiated the agreement, and any management or strategic plans 
discussing the proposed transaction. If within the thirty (30) day 
period after notification, representatives of Plaintiff make a written 
request for additional information, Defendant Monsanto shall not 
consummate the proposed transaction or agreement until twenty (20) days 
after submitting all such additional information. Early termination of 
the waiting periods in this paragraph may be requested and, where 
appropriate, granted in the same manner as is applicable under the 
requirements and provisions of the HSR Act and rules promulgated 
thereunder. This Section shall be broadly construed and any ambiguity 
or uncertainty regarding the filing of notice under this Section shall 
be resolved in favor of filing notice.

XIII. No Reacquisition

    If Defendant Monsanto divests the Enhanced Stoneville Assets and 
the VipCot Assets, Defendant Monsanto may not reacquire any part of the 
Enhanced Stoneville Assets or the VipCot Assets during the term of this 
Final Judgment. If Defendant Monsanto divests Defendant DPL, it may not 
reacquire any part of Defendant DPL during the term of this Final 
Judgment.

XIV. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XV. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten (10) years from the date of its entry.

XVI. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16, including making copies available to the 
public of this Final Judgment, the Competitive Impact Statement, and 
any comments thereon and Plaintiff's responses to comments. Based upon 
the record before the Court, which includes the Competitive Impact 
Statement and any comments and response to comments filed with the 
Court, entry of this Final Judgment is in the public interest.

Date:------------------------------------------------------------------

Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16.

-----------------------------------------------------------------------

United States District Judge

Definitions for Schedules

    1. ``Advanced Exotic Yield Lines'' means the Breeding populations 
and proprietary Lines created by Defendant Monsanto from a cross 
between Gossypium hirsutum and Gossypium barbadense that are identified 
in Schedule D.
    2. ``Backcross'' means to cross a hybrid with one of its parents 
and then to cross the resulting progeny with the same parent Line 
(perhaps multiple times) in order to develop progeny with a genetic 
makeup that approximates the genetic make up of that parent while 
retaining certain desirable characteristics of the genetic makeup of 
the other parent of the hybrid.
    3. ``Breed'' means to purposefully modify the Germplasm of a plant 
so as to alter its genetic make up, and to develop the progeny from the 
altered Germplasm.
    4. ``DPL Marker Data'' means Fingerprints that Defendant Monsanto 
shall create for the DPL Germplasm being divested pursuant to Schedule 
B.2.
    5. ``Donor Lines'' means the cotton Lines used by Defendant 
Monsanto to create or transmit novel cotton traits or events, and 
identified in Schedule F.
    6. ``Fingerprint'' means a record of the presence or absence of 
genetic markers for which a Line has been tested.
    7. ``Germplasm'' means a collection of heterozygous and homozygous 
cotton plants or parts thereof. For purposes of Schedules B and C of 
this Final Judgment, when the Defendants are required to convey 
Germplasm to a party, the Defendant may satisfy that obligation by 
conveying that Germplasm in seed form, or if necessary, in potted plant 
form.
    8. ``Introgress'' means to move a gene from one cotton plant into 
another.
    9. ``Line'' means a set of cottonseed or plants that share a common 
reasonably homogenous genotype that originate from a cross between two 
cotton plants.
    10. ``MAB Populations'' means the Germplasm populations for which 
Defendant Monsanto has conducted significant marker analyses that are 
identified in Schedule E.
    11. ``Monsanto B.t. Gene'' means a DNA molecule, or a replicate 
thereof, developed and out-licensed by Defendant Monsanto for use in 
commercial cottonseed in the United States, and which encodes a B.t. 
toxin that when present in cotton plants results in those plants being 
toxic to lepidopteran insects.
    12. ``Monsanto Cotton Traits'' means: (1) The transgenic event 
denominated ``Event 531'' currently sold under the ``Bollgard'' brand; 
(2) the transgenic event denominated ``Event 15985'' currently sold 
under the ``Bollgard II'' brand; (3) the transgenic event denominated 
``Event 1445'' currently sold under the ``Roundup Ready'' brand; and 
(4) the transgenic event denominated ``Event 88913'' currently sold 
under the ``Roundup Ready Flex'' brand, or any combination thereof.
    13. ``Monsanto Marker Library'' means (1) Two collections of 
genetic information concerning variations in the genetic makeup of 
Gossypium, specifically a set of SSRs and a set of SNPs, and (2) cotton 
mapping data owned by Defendant Monsanto prior to its acquisition of 
Defendant DPL pursuant to the Merger Agreement.
    14. ``Monsanto Roundup Ready Gene'' means a DNA molecule, or a 
replicate thereof, developed and out-licensed by Defendant Monsanto for 
use in commercial cottonseed in the United States, and which when 
present in cotton plants results in those plants exhibiting commercial 
tolerance to glyphosate herbicides.
    15. ``Null Line'' shall mean a reasonably genetically homogenous 
Line of cotton that is selected from a cross in which one of the 
parents was from the Advanced Exotic Yield Lines or MAB populations and 
that does not contain one or more of the Monsanto Cotton Traits that 
was contained in the parental Advanced Exotic Yield Line or MAB 
population. A grant of a right to create a Null Line to the Acquirer of 
the Enhanced Stoneville Assets includes an obligation by Defendant 
Monsanto to provide the Acquirer of the Enhanced Stoneville Assets with 
assays, materials, and information regarding the Monsanto Cotton 
Trait(s) formerly in the Null Line necessary to obtain requisite 
regulatory

[[Page 33345]]

approvals, provided the Acquirer of the Enhanced Stoneville Assets 
reimburses Defendant Monsanto its reasonable expenses in providing such 
assistance.
    16. ``Publicly Available Cotton Germplasm'' means any non-Monsanto 
proprietary cotton Germplasm that has not been exclusively in-licensed 
by Defendant Monsanto.
    17. ``Recurrent Parent'' means the parent to which successive 
Backcrosses are made in Backcross Breeding.
    18. ``Roundup Ready Flex'' means the Monsanto Roundup Ready Gene 
denominated ``Event 88913.''
    19. ``SNP'' (or Single Nucleotide Polymorphisms) means variations 
at a single position in a given DNA sequence, which occur within a 
population of cotton plants.
    20. ``SSR'' (or Simple Sequence Repeat) means variations in the 
number of repetitions of a DNA sequence.
    21. ``Transform'' means to alter the genetic makeup of a cotton 
plant variety through means other than Breeding, for example, by the 
introduction of foreign genetic material.

Schedule A--Stoneville

    1. Cotton Germplasm: All U.S. Stoneville cotton Germplasm, 
including, for each variety, Line and population to be divested: all 
patents, patent applications and Plant Variety Protection Act 
certificates applied for or granted with respect to that Germplasm (and 
excluding any patents or patent applications on Monsanto cotton 
traits); and copies of all performance and other test results, 
phenotypic data, product descriptions, research data and any 
Fingerprint information.
    2. Physical Assets:
    a. Defendant Monsanto's interest in the real property at the 
following sites or locations:
    (1) The manufacturing, storage and delinting facility at 
Stoneville, Mississippi;
    (2) The research & development facility at Arcola, Mississippi;
    (3) The research & development facility, including greenhouse and 
labs, at Memphis, Tennessee; and
    (4) The manufacturing, storage and delinting and the Breeding and 
testing facilities at N. Powerline Road, Maricopa, Arizona.
    b. Defendant Monsanto's interest in the leased real property at the 
following sites or locations:
    (1) The land at Maricopa, Arizona;
    (2) The AgriCenter international research facility at Memphis, 
Tennessee;
    (3) The Memphis Redbirds Suite;
    (4) The Columbus & Greenville Railway Lease;
    (5) The delinting plant at Marble Hall, South Africa;
    (6) The property described in the W.B. Sutton Farms Partnership 
Lease;
    (7) The storage facility described in the Farmers Feed Storage 
Agreement;
    (8) The storage facility described in the David Storage Company 
Industrial Space Lease; and
    (9) The storage facility described in the Cascio Refrigerated 
Warehouse Agreement.
    c. At the option of the Acquirer of the Enhanced Stoneville Assets, 
Defendant Monsanto's interest in the real property at the following 
sites or locations:
    (1) The farm at Lubbock, Texas;
    (2) The manufacturing, storage, and delinting facility at Big 
Spring, Texas;
    (3) The research and development facility at Idalou, Texas;
    (4) 7.2 acres in Idalou, Texas (leased); and
    (5) 80 acres in Idalou, Texas (leased).
    d. All tangible assets other than Germplasm located at each of the 
locations identified in a. and b. above that are exclusively or 
primarily used in connection with the Stoneville U.S. branded business, 
including:
    (1) All manufacturing and agricultural equipment, tooling and fixed 
assets; personal property; materials; supplies; and other tangible 
property.
    (2) All existing drawings; blueprints; designs; plans for 
improvements or expansion; design protocols; specifications for 
materials; and specifications for parts and devices.
    (3) All safety procedures for the handling of materials and 
substances; and quality assurance and control procedures relating to 
the locations listed in a. and b. above or the tangible assets listed 
in this paragraph d.
    (4) Business records relating to the Stoneville U.S. branded 
cottonseed business, including stock record books, minute books, direct 
customer or direct distributor lists; a list of names and addresses of 
U.S. cotton growers with Monsanto trait licenses; and other information 
to the extent related to the operation of the business during the past 
three years which is in the possession of or available to the 
Defendants.
    e. At the option of the Acquirer of the Enhanced Stoneville Assets, 
all tangible assets other than Germplasm located at each of the 
locations identified in c. above that are exclusively or primarily used 
in connection with the Stoneville U.S. branded business, including:
    (1) All manufacturing and agricultural equipment, tooling and fixed 
assets; personal property; materials; supplies; and other tangible 
property.
    (2) All existing drawings; blueprints; designs; plans for 
improvements or expansion; design protocols; specifications for 
materials; and specifications for parts and devices.
    (3) All safety procedures for the handling of materials and 
substances; and quality assurance and control procedures relating to 
the locations listed in c. above or the tangible assets listed in this 
paragraph e.
    (4) Business records relating to the Stoneville U.S. branded 
cottonseed business, including stock record books, minute books, direct 
customer or direct distributor lists; a list of names and addresses of 
U.S. cotton growers with Monsanto trait licenses; and other information 
to the extent related to the operation of the business during the past 
three years which is in the possession of or available to the 
Defendants.
    f. At the option of the Acquirer of the Enhanced Stoneville Assets, 
all equipment used exclusively or primarily in connection with the 
Stoneville branded cottonseed business stored at Monsanto sites at 
Leesburg, Georgia, Mt. Olive, North Carolina and Leland, Mississippi.
    3. Intangible Assets:
    a. Brand Names, Goodwill and Trade Secrets--The Stoneville brand 
names, goodwill, and trade secrets relating to Stoneville's U.S. 
branded cottonseed business. Defendant Monsanto may retain exclusive 
rights to the Stoneville brand in connection with the sale of Germplasm 
in Spain, Greece, and Turkey, such rights expire on a country-by-
country basis with the term of the relevant current distributor 
agreements in Spain and Greece, and one (1) year from the date of 
divestiture of the Enhanced Stoneville Assets in Turkey, provided that 
in all cases the relevant distributors shall be allowed to sell any 
inventory of goods already packaged in containers bearing the 
Stoneville trademarks as of the relevant termination date.
    b. Intangible and Contractual Rights:
    (1) Exclusive rights to (a) Breeder records and/or notebooks, 
including pedigrees, relating to Stoneville U.S. cotton Germplasm, 
identities of non-public lines of Stoneville U.S. cotton Germplasm in 
breeding and trial results, including yield results (subject to the 
redaction of any data that may be included in such records relating to 
the identity of any non-public lines other than Stoneville U.S. cotton 
Germplasm), (b) existing fingerprints for Stoneville U.S. cotton 
Germplasm, and (c) quality control data relating to Stoneville U.S. 
cotton Germplasm (subject to Defendant Monsanto's right to keep under 
the control of its Law Department (i) one copy of such quality control 
data and (ii) access to the identities of any

[[Page 33346]]

Stoneville U.S. cotton Germplasm present in trial results that also 
include results relating to non-public lines of Germplasm other than 
Stoneville U.S. cotton Germplasm; Monsanto's Law Department may not 
disclose this information to any other component of Monsanto).
    (2) Non-exclusive rights to, and the tangible embodiments of, (i) 
Non-proprietary procedures, methods, techniques, know-how, 
specifications, processes, analyses, and protocols used in Stoneville's 
U.S. branded cottonseed business (such as Monsanto's procedures for the 
inspection, sampling and delivery of cottonseed at production 
facilities, procedures for analyzing job safety and complying with 
environmental regulations, and specifications for production-related 
data entry), and (ii) Monsanto's low acid delinting process.
    (3) All assignable licenses, permits, and authorizations issued by 
any governmental organization relating to the Stoneville U.S. branded 
cottonseed business.
    (4) All contracts to which Stoneville Pedigreed Seed Company is a 
party, including supply and distribution agreements.
    (5) All other intangible and contractual rights used exclusively or 
primarily in Stoneville's U.S. branded cottonseed business not 
otherwise specifically addressed in b.(1 )-(4).
    4. Exclusions:
    Excluded from the assets to be divested that are listed in this 
Schedule A are: (1) Real property not specifically identified in 
Schedule A.2., and (2) software owned by or licensed to Defendant 
Monsanto (except that Stoneville will receive a non-exclusive license 
to TaqPro), and hardware used exclusively to access such software.

Schedule B--Enhanced Stoneville Assets

    1. Stoneville: As defined in the Final Judgment.
    2. DPL Germplasm: Defendants shall divest all interests in the DPL 
varieties listed in Table B, including, for each variety, any Plant 
Variety Protection Act certificates applied for or granted, patents 
applied for or granted, copies of all performance and other test 
results, phenotypic data, product descriptions, research data and DPL 
Marker Data.
    a. With respect to this DPL Germplasm, Defendant Monsanto may:
    (1) Continue to sell during 2007 any existing inventories of these 
DPL varieties that Defendant DPL currently offers for sale in the 
United States;
    (2) Take back an exclusive license to commercialize varieties that 
(i) Contain only traits out-licensed by Defendant Monsanto, and (ii) 
are essentially derived from these DPL varieties, or are essentially 
derived from a cross between any of these DPL varieties, which license 
may require the Acquirer of the Enhanced Stoneville Assets to seek U.S. 
patents for the DPL varieties listed in Table B, and may provide for 
enforcement of Monsanto's exclusive rights with respect to these 
varieties;
    (3) Retain exclusive rights (i) To continue to sell these DPL 
varieties in countries outside the United States in which Defendant DPL 
currently offers the varieties for sale, but such rights shall 
terminate with respect to a particular country and variety if Defendant 
Monsanto discontinues sales of that variety in that country, and (ii) 
to sell 05X460, 05Y063, and 05Z629 outside of the United States;
    (4) Retain sufficient quantities of cottonseed to enable it to 
continue its current sales of seed relating to sales made pursuant to 
subparagraph 3 above (provided that any such retention by Defendant 
Monsanto shall only be permitted to the extent it does not adversely 
affect the Acquirer of the Enhanced Stoneville Assets);
    (5) Retain sufficient quantities of cottonseed for Breeding 
purposes (provided that any such retention by Defendant Monsanto shall 
only be permitted to the extent it does not adversely affect the 
Acquirer of the Enhanced Stoneville Assets), and take back a non-
exclusive license to use these DPL varieties in its Breeding program;
    (6) Take back a license that grants Defendant Monsanto only those 
rights necessary to accomplish the divestiture of the VipCot Assets 
described in Schedule C; and
    (7) Require the Acquirer of the Enhanced Stoneville Assets to agree 
that for seven (7) years after the divestiture of the Enhanced 
Stoneville Assets it shall not commercialize a variety that is 
essentially derived from one of the DPL varieties listed in Table B, if 
that variety contains a Monsanto glyphosate tolerance trait, a Monsanto 
insect resistance trait, and any non-glyphosate herbicide tolerance 
trait commercialized in cottonseed in the United States as of the date 
of the filing of this Final Judgment.
    b. Defendants' divestiture of the DPL varieties 00W12, 02T15, 
02Z55, 03Y047, 03Y056, 03Y062, 04T048, 04W019, 04Y341, 05X460, 05Y063, 
05Z629, 25105N, and DP491 to the Acquirer of the Enhanced Stoneville 
Assets is subject to the license to Syngenta described in Schedule C.2.
    3. Syngenta Germplasm: Defendants shall divest all interests in the 
conventional Germplasm originating from the United States cotton 
Breeding program purchased by Defendant DPL from Syngenta pursuant to 
an agreement dated May 15, 2006, along with any conventional progeny of 
that material.
    4. Advanced Exotic Yield Lines: Defendants shall divest exclusive 
rights to commercialize, and non-exclusive rights to Breed with, the 
Advanced Exotic Yield Lines set forth in Schedule D, including the 
right, subject to reasonable indemnification requirements, to create 
Null Lines (other than a Null Line that contains only one of the B.t. 
Genes of Bollgard II). In connection with this divestiture:
    a. Defendants shall divest copies of all performance and other test 
results, phenotypic data, product descriptions, research data and 
Fingerprint information for those populations and Lines, excluding data 
regarding the presence or function of any genetic material from 
Gossypium barbadense present in the Lines.
    b. Defendants may not assert against the Acquirer of the Enhanced 
Stoneville Assets any rights Defendants may have or acquire with 
respect to (1) The Germplasm used in the Advanced Exotic Yield Lines, 
and (2) any non-transgenic yield trait contained in those Lines.
    c. Defendants may retain research quantities of the Advanced Exotic 
Yield Lines to enable them to continue their trait development research 
(provided that any such retention by Defendant Monsanto shall only be 
permitted to the extent it does not adversely affect the Acquirer of 
the Enhanced Stoneville Assets); and
    d. Defendants may (1) Prohibit the Acquirer of the Enhanced 
Stoneville Assets from conveying Lines from the Advanced Exotic Yield 
Lines or their progeny to third parties, other than for contract 
production work or for distribution to growers as commercial seed, and 
(2) require the Acquirer of the Enhanced Stoneville Assets to seek U.S. 
patents and enforce Breeding and resale restrictions on any varieties 
that are commercialized from the Advanced Exotic Yield Lines. 
Defendants shall lose the ability to require these terms (4.d.1 & 2) if 
Defendants have not licensed to a third party a non-transgenic cotton 
yield trait contained in one or more of the Advanced Exotic Yield Lines 
within five (5) years of the date of this Final Judgment.
    5. MAB Populations: Defendants shall divest the MAB Populations set 
forth in Schedule E, including copies of all performance and other test 
results,

[[Page 33347]]

phenotypic data, product descriptions, research data and Fingerprint 
information, and the right, subject to reasonable indemnification 
requirements, to create Null Lines (other than a Null Line that 
contains only one of the B.t. genes of Bollgard II).
    6. Cotton States Germplasm: Defendant Monsanto shall grant the 
Acquirer of the Enhanced Stoneville Assets a non-exclusive, royalty-
free license to sell under the Stoneville and NexGen brand names and 
Breed with the four (4) Cotton States varieties currently being sold by 
Stoneville. Defendant Monsanto shall relinquish evaluation rights to 
the Acquirer of the Enhanced Stoneville Assets for material comprised 
of Germplasm from pre-existing Breeding crosses between Cotton States' 
in-licensed Lines and any Lines being transferred exclusively to 
Stoneville pursuant to this Final Judgment.
    a. In connection with its divestiture of this Cotton States 
Germplasm, Defendant Monsanto may retain exclusive rights to Germplasm 
already in-licensed to or commercialized through Cotton States at the 
date of this Final Judgment, or Germplasm from pre-existing Breeding 
crosses between two Cotton States' in-licensed Lines or between one of 
those Lines and a public variety, except that Defendant Monsanto may 
only retain non-exclusive rights to the Stoneville variety designated 
STX0502 which has been commercialized solely through Cotton States. 
Defendant Monsanto may only commercialize the Stoneville variety 
designated STX0502 to licensees other than Defendant DPL.
    7. Other Monsanto Germplasm: Defendants shall divest all cotton 
Germplasm in the United States held by Defendant Monsanto prior to its 
acquisition of Defendant DPL and not otherwise addressed in Schedules A 
and B, subject to the following exceptions:
    a. Any Publicly Available Cotton Germplasm, provided that if the 
Acquirer of the Enhanced Stoneville Assets does not otherwise possess 
the Germplasm and cannot otherwise reasonably obtain it, Defendant 
Monsanto must, if the Acquirer of the Enhanced Stoneville Assets 
requests, provide the Acquirer of the Enhanced Stoneville Assets with 
sufficient quantities for use in a Breeding program;
    b. Exclusive rights to (1) The Donor Lines for Defendant Monsanto's 
commercialized transgenic traits, (2) Germplasm Transformed or 
Introgressed with cotton transgenic traits other than Monsanto's Cotton 
Traits, (3) any Germplasm containing experimental transgenic events, 
and (4) Germplasm used in Monsanto's non-transgenic trait research and 
development program, with the exception of the Advanced Exotic Yield 
Lines, as addressed above; and
    c. Rights to any third party Germplasm held in connection with the 
provision of trait Introgression services to third parties.
    8. Monsanto Marker Library: Defendants shall provide access to the 
information in, and a non-exclusive, royalty-free license to use, 
Monsanto's Marker Library.
    9. Licenses: Defendants shall grant licenses to the Acquirer of the 
Enhanced Stoneville Assets to develop, produce, have produced, and sell 
under the Stoneville and NexGen brands cottonseed containing Monsanto's 
Cotton Traits for use in the United States. Such licenses shall be 
based on commercially reasonable terms, and in particular shall provide 
that the licensee:
    a. Shall be entitled to a proportion of the net license revenue for 
those traits at least as great as the net license revenue Defendant DPL 
is entitled to under its current licenses for those traits;
    b. May, subject to reasonable regulatory and stewardship 
conditions, Breed into and sell cottonseed containing Monsanto Cotton 
Traits, non-Monsanto genes not naturally occurring in cotton;
    c. Shall have an option to license future Monsanto B.t. Genes on 
the same terms as those used in the current DPL licenses. Defendants 
may terminate this option at such time as the Acquirer of the Enhanced 
Stoneville Assets' total annual sales of cottonseed containing a non-
Monsanto B.t. Gene being marketed by the Acquirer of the Enhanced 
Stoneville Assets as conferring lepidopteran resistance under the 
Stoneville and NexGen brands, exceed 60% of the Acquirer of the 
Enhanced Stoneville Assets' annual sales of cottonseed that is marketed 
as lepidopteran resistant under the Stoneville and NexGen brands; and
    d. Shall have an option to license future Monsanto Roundup Ready 
Genes on the same terms as those used in the current DPL licenses. 
Defendants may terminate this option at such time as the Acquirer of 
the Enhanced Stoneville Assets' total annual sales of cottonseed 
containing a non-Monsanto glyphosate tolerance gene being marketed by 
the Acquirer of the Enhanced Stoneville Assets as conferring glyphosate 
tolerance under the Stoneville and NexGen brands, exceed 60% of the 
Acquirer of the Enhanced Stoneville Assets' annual sales of cottonseed 
that is marketed as glyphosate tolerant under the Stoneville and NexGen 
brands. Defendants need not grant an option to any non-glyphosate 
herbicide tolerance trait stacked with any such glyphosate tolerance 
gene.

                         Table B.--DPL Germplasm
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
00W12 (DP393):
  02T15
  02Z55
  03Y047
  03Y056
  03Y062
  04T048
  04W019
  04Y341
  05X460
  05Y063
  05Z629
  Delta Pearl
  DP 5690
  DP 491
  DP2156
  DP565
  DP5305
  DP5415
  AZ2099
------------------------------------------------------------------------

Schedule C--The VipCot Assets

    1. All DPL Germplasm identified in Table C containing only a 
Syngenta trait; and, provided that Syngenta has obtained a license 
(identified in Section C.4. below) to the Roundup Ready Flex trait, all 
DPL Germplasm Lines identified in Table C containing a Syngenta trait 
and the Roundup Ready Flex trait. The Germplasm Lines identified in 
Table C shall be conveyed along with:
    a. Exclusive rights to commercialize varieties developed from the 
traited DPL Germplasm Lines identified in Table C, provided that any 
varieties commercialized from this Germplasm include, in addition to 
any other traits, the Cry67B event, Cry69D event, Cry02A event, or the 
Cot102 event;
    b. Exclusive rights to Breed with the traited DPL Germplasm Lines 
identified in Table C, provided that any varieties commercialized from 
such Breeding include, in addition to any other traits, either the 
Cry67B event, Cry69D event, Cry02A event, or the Cot102 event;
    c. Reports that provide all performance and other test results, 
phenotypic data, product descriptions, purity information, breeding 
histories, pedigrees and statuses for the Germplasm that is conveyed;
    d. At Syngenta's request, Fingerprint information regarding the 
Recurrent Parents of each of the DPL Germplasm Lines listed in Table C 
sufficient to allow Syngenta to reasonably perform Backcrossing with 
this Germplasm

[[Page 33348]]

(subject to reasonable compensation from Syngenta for such services), 
if Syngenta does not possess, cannot reasonably develop itself or 
contract for, the capability to develop this Fingerprint information; 
and
    e. An exclusive license to commercialize varieties that contain the 
Cry67B event, Cry69D event, Cry02A event, or Cot102 event that are 
essentially derived from the Recurrent Parent Lines identified in Table 
C that are not otherwise being divested pursuant to Schedule B, which 
license shall require Monsanto to seek U.S. patents for those Recurrent 
Parent Lines and provide for enforcement of Syngenta's exclusive rights 
with respect to those lines.
    2. Breeding quantities of the Recurrent Parents of each of the DPL 
Germplasm Lines identified in Table C, subject to a license to Syngenta 
(a) Permitting use of the Recurrent Parents only for crossing or 
Backcrossing between a Line and its relevant Recurrent Parent; (b) 
requiring that the Recurrent Parent Germplasm be returned or destroyed 
no later than December 31, 2014; and (c) prohibiting transfer of the 
Recurrent Parent Germplasm to any third party other than with an 
exclusive license to the relevant Line derived from that Recurrent 
Parent, with the same limitations on use of the Recurrent Parent 
Germplasm.
    3. A non-exclusive royalty-free license to a PCR assay and/or an 
ELISA assay to enable detection of Monsanto's Roundup Ready Flex trait.
    4. A non-exclusive license to (a) Develop, produce, and sell 
cottonseed containing the Roundup Ready Flex trait under the standard 
commercial terms offered by Defendant Monsanto, including changes 
required by this Decree to the standard license, and (b) transfer such 
cottonseed to a third party with a commercial Roundup Ready Flex 
license.
    5. Defendant DPL's interest in Germplasm populations Introgressed 
with the Cry67B event, Cry69D event, Cry02A event, and/or the Cot102 in 
the U.S. cotton Breeding program that Defendant DPL purchased from 
Syngenta pursuant to an agreement dated May 15, 2006, along with any 
progeny of that material.
    6. Defendant Monsanto may condition the divestitures on Syngenta's 
acknowledgment that Defendant Monsanto is not conveying to Syngenta any 
rights not held by Defendant DPL prior to Defendant Monsanto's 
acquisition of Defendant DPL.
    7. Defendants acknowledge that nothing in this Final Judgment 
relating to the divestiture of the VipCot Assets shall, in and of 
itself, modify, alter, terminate or otherwise affect any rights and 
obligations in any contract between Syngenta and either of the 
Defendants in effect as of the date of the filing of the Complaint in 
this matter.

[[Page 33349]]



                                                                                    Table C--VipCot Germplasm
                                                          [V1 = Cot102; C1 = Cry67B; C2 = Cry69D, C3 =Cry02A; RF = Roundup Ready Flex]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                Recurrent parent                    V1C1RF       V1C1         C1          V1         C1RF        V1RF         C2          C3        C2V1RF      C3V1RF       C2V1        C3V1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
00H29...........................................          X   ..........          X   ..........  ..........  ..........          X           X           X           X   ..........  ..........
00S07...........................................  ..........          X           X           X           X   ..........          X           X   ..........  ..........  ..........  ..........
00W12...........................................          X           X           X           X   ..........          X           X           X           X           X           X   ..........
01W34...........................................  ..........          X   ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........
02T15...........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........          X           X
02Z55...........................................  ..........          X           X           X   ..........          X           X           X   ..........  ..........  ..........  ..........
02Z89...........................................  ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
03H070..........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........  ..........  ..........
03Q066..........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........  ..........  ..........
03Y047..........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........  ..........  ..........
03Y056..........................................  ..........          X           X           X           X   ..........          X           X   ..........  ..........  ..........  ..........
03Y062..........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........  ..........  ..........
04P011..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
04P024..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
04Q035..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
04T042..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
04T048..........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........  ..........  ..........
04T056..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
04T067..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
04V073..........................................  ..........          X           X           X           X   ..........          X           X   ..........  ..........  ..........  ..........
04W019..........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........          X   ..........
04Y288..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........          X   ..........
04Y341..........................................  ..........          X           X           X           X   ..........          X           X   ..........  ..........  ..........  ..........
04Z007..........................................  ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
04Z353..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
05H210..........................................  ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
05H229..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
05H270..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
05H284..........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........  ..........  ..........
05Q153..........................................  ..........          X           X   ..........  ..........  ..........          X           X   ..........  ..........  ..........  ..........
05T103..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
05V341..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
05X460..........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........  ..........  ..........
05Y063..........................................  ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
05Y067..........................................  ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
05Y070..........................................  ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
05Z629..........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........  ..........  ..........
05Z855..........................................  ..........          X   ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
 25105N.........................................  ..........          X           X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
DP491...........................................          X   ..........          X           X           X           X           X           X           X           X           X           X
DP6207..........................................  ..........          X           X   ..........  ..........  ..........          X           X   ..........  ..........  ..........  ..........
SG747...........................................  ..........          X           X           X   ..........  ..........          X           X   ..........  ..........          X           X
UA-4............................................  ..........          X   ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 33350]]


                                    Schedule D.--Advanced Exotic Yield Lines
[The Lines identified by the following serial numbers or variety name in Defendant Monsanto's Breeding database]
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
MCS0719B2RF                           60066403610                           60066410398
MSC0720B2RF                           60066403634                           60066410475
MCS0721B2RF                           60066404080                           60066410502
MCS0722B2RF                           60066404181                           60066410552
MCS0723B2RF                           60066404294                           60066410588
MCS0724B2RF                           60066404395                           60066411326
MCS0725B2RF                           60066404434                           60066411883
MCS0726B2RF                           60066404446                           60066412001
MCS0727B2RF                           60066404559                           60066412164
MCS0728B2RF                           60066404840                           60066412380
MCS0729RF                             60066405082                           60066414586
MCS0730RF                             60066404207                           60066414649
MCS0731RF                             60066405676                           60066406666
MCS0732RF                             60066405703                           60066406767
MCS0733RF                             60066406399                           60066407644
MCS0734RF                             60066406515                           60066416821
MCS0735RF                             60066407442                           60066409686
MCS0736RF                             60066415021                           60066409701
MCS0737RF                             60066415122                           60066410146
MCS0738RF                             60066415285                           60067807314
MCS0739RF                             60066407846                           60067807720
MCS0740RF                             60066416124                           60067808924
60066412443                           60066408519                           60067809433
60066412455                           60066408608                           60067809774
60066412532                           60066408747                           60067810082
60066412683                           60066409129                           60067810208
60066412859                           60066409131                           60067810347
60066403254                           60066409220                           60067810501
60066403367                           60066409585                           60067811325
60066403418                           60066410350                           60067811642
60067812303                           100000002189566943270000              100000002189651484710000
60067812620                           100000002189570220070000              100000002189652140070000
60067813494                           100000002189570875430000              100000002189654761510000
60067813646                           100000002189573496870000              100000002189658038310000
60067814903                           100000002189575462950000              100000002189659349030000
60067815638                           100000002189576118310000              100000002189661315110000
60067815791                           100000002189580705830000              100000002189664591910000
60067816147                           100000002189581361190000              100000002189665247270000
60067817050                           100000002189586604070000              100000002189669834790000
60067818115                           100000002189587259430000              100000002189678354470000
60067818571                           100000002189591191590000              100000002189679009830000
60067819193                           100000002189593157670000              100000002189680975910000
60067806259                           100000002189597745190000              100000002189682286630000
60067806297                           100000002189598400550000              100000002189682286630000
60067809534                           100000002189600366630000              100000002189683597350000
60067809661                           100000002189601677350000              100000002189684908070000
60067810676                           100000002189604954150000              100000002189686874150000
60067810878                           100000002189608230950000              100000002189696704550000
60067810979                           100000002189614784550000              100000002189699325990000
60067810993                           100000002189615439910000              100000002189700636710000
60067811185                           100000002189616095270000              100000002189709811750000
60067813228                           100000002189618716710000              100000002189712433190000
60067813444                           100000002189620682790000              100000002189714399270000
60067814268                           100000002189621338150000              100000002189717020710000
60067815296                           100000002189623959590000              100000002189718986790000
60067815981                           100000002189624614950000              100000002189719642150000
60067816058                           100000002189629857830000              100000002189720297510000
60067816692                           100000002189631168550000              100000002189722263590000
60067818711                           100000002189637722150000              100000002189725540390000
60067819371                           100000002189638377510000              100000002189726195750000
100000002189562355750000              100000002189642309670000              100000002189730783270000
100000002189564321830000              100000002189649518630000              100000002189731438630000
100000002189734715430000              100000002189819912230000              100000002189914939430000
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100000002189751099430000              100000002189837606950000              100000002189930012710000
100000002189753720870000              100000002189839573030000              100000002189932634150000
100000002189757653030000              100000002189843505190000              100000002189935910950000
100000002189758963750000              100000002189844815910000              100000002189936566310000
100000002189766172710000              100000002189847437350000              100000002189938532390000

[[Page 33351]]

 
100000002189769449510000              100000002189853335590000              100000002189943119910000
100000002189772070950000              100000002189853990950000              100000002189945085990000
100000002189773381670000              100000002189855957030000              100000002189947707430000
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100000002189778624550000              100000002189862510630000              100000002189952294950000
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100000002189790421030000              100000002189876273190000              100000002189962780710000
100000002189792387110000              100000002189876928550000              100000002189970645030000
100000002189794353190000              100000002189880860710000              100000002189976543270000
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100000002190104993830000              100000002190215749670000              100000002190325194790000
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100000002190115479590000              100000002190232789030000              100000002190331093030000
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100000002190127276070000              100000002190245896230000              100000002190340268070000
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100000002190133174310000              100000002190256381990000              100000002190366482470000
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100000002190378278950000              100000002190470029350000              100000002190553915430000
100000002190380900390000              100000002190471340070000              100000002190557847590000
100000002190384832550000              100000002190471995430000              100000002190561779750000
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100000002190387453990000              100000002190478549030000              100000002190565711910000
100000002190388109350000              100000002190481825830000              100000002190567022630000
100000002190393352230000              100000002190482481190000              100000002190570954790000
100000002190394007590000              100000002190486413350000              100000002190571610150000
100000002190396629030000              100000002190489690150000              100000002190576853030000
100000002190398595110000              100000002190491656230000              100000002190582095910000
100000002190399905830000              100000002190493622310000              100000002190582751270000
100000002190401871910000              100000002190494933030000              100000002190583406630000
100000002190403182630000              100000002190500175910000              100000002190584061990000
100000002190406459430000              100000002190501486630000              100000002190584717350000
100000002190407114790000              100000002190503452710000              100000002190592581670000
100000002190409080870000              100000002190508040230000              100000002190593892390000
100000002190411702310000              100000002190511317030000              100000002190597824550000

[[Page 33352]]

 
100000002190414979110000              100000002190513283110000              100000002190598479910000
100000002190415634470000              100000002190514593830000              100000002190602412070000
100000002190422188070000              100000002190520492070000              100000002190603067430000
100000002190431363110000              100000002190522458150000              100000002190603722790000
100000002190432673830000              100000002190523768870000              100000002190612242470000
100000002190433329190000              100000002190524424230000              100000002190620106790000
100000002190433984550000              100000002190525079590000              100000002190620762150000
100000002190435950630000              100000002190527045670000              100000002190622072870000
100000002190439882790000              100000002190533599270000              100000002190623383590000
100000002190449713190000              100000002190536220710000              100000002190627315750000
100000002190451023910000              100000002190538186790000              100000002190627971110000
100000002190454300710000              100000002190540152870000              100000002190629281830000
100000002190455611430000              100000002190545395750000              100000002190631903270000
100000002190633213990000              100000002190717755430000              100000002190801641510000
100000002190637146150000              100000002190719721510000              100000002190802952230000
100000002190638456870000              100000002190725619750000              100000002190804262950000
100000002190643044390000              100000002190726275110000              100000002190805573670000
100000002190646976550000              100000002190728241190000              100000002190812782630000
100000002190649597990000              100000002190729551910000              100000002190818680870000
100000002190650253350000              100000002190730862630000              100000002190821957670000
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100000002190656806950000              100000002190747901990000              100000002190829821990000
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100000002190706614310000              100000002190793777190000              100000002190866522150000
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100000002190873075750000              100000002190914363430000              100000002190963515430000
100000002190873731110000              100000002190915674150000              100000002190966136870000
100000002190876352550000              100000002190917640230000              100000002190966792230000
100000002190877007910000              100000002190920917030000              100000002190973345830000
100000002190878318630000              100000002190922883110000              100000002190975967270000
100000002190878973990000              100000002190923538470000              100000002190978588710000
100000002190880284710000              100000002190926815270000              100000002190981865510000
100000002190884216870000              100000002190929436710000              100000002190982520870000
100000002190884872230000              100000002190932713510000              100000002190985142310000
100000002190887493670000              100000002190933368770000              ICA000000003347367788989
100000002190888804390000              100000002190934679590000              ICA000000003347473105341
100000002190903877670000              100000002190937301030000              ICA000000003347683279293
100000002190905843750000              100000002190945165350000              ICA000000003348103168445
100000002190909120550000              100000002190953029670000              P00000000000123710341565
P00000000000123713880509              P00000000000123714666941              P00000000000123714994621
P00000000000123717091773              P00000000000123717419453              P00000000000123717943741
P00000000000123718795709              P00000000000123720630717              P00000000000123722662333
P00000000000123724497341              P00000000000123726856637              P00000000000123727184317
60044433150                           60035225831                           60035225879
60035225881                           60035225906                           60035225920
60043573686
----------------------------------------------------------------------------------------------------------------


[[Page 33353]]


                                                              Schedule E.--MAB Populations
                             [The Lines identified by the following code numbers in Defendant Monsanto's Breeding database]
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
L0001           L0025           L0049           L0235           L0271          L0310          L0334          L0357          L0380          L0404
L0002           L0027           L0050           L0236           L0282          L0311          L0335          L0358          L0381          L0406
L0003           L0028           L0051           L0237           L0283          L0312          L0336          L0359          L0382          L0407
L0004           L0029           L0052           L0238           L0284          L0313          L0337          L0360          L0383          L0408
L0005           L0030           L0053           L0239           L0290          L0314          L0338          L0361          L0384          L0409
L0006           L0031           L0054           L0240           L0291          L0315          L0339          L0362          L0385          L0410
L0007           L0032           L0055           L0241           L0292          L0317          L0340          L0363          L0386          L0411
L0008           L0033           L0056           L0242           L0293          L0318          L0341          L0364          L0387          L1002
L0009           L0034           L0057           L0243           L0294          L0319          L0342          L0365          L0388          L1003
L0010           L0035           L0059           L0244           L0295          L0320          L0343          L0366          L0390          L1004
L0012           L0036           L0100           L0245           L0296          L0321          L0344          L0367          L0391          L1005
L0013           L0037           L0175           L0246           L0297          L0322          L0345          L0368          L0392          L1008
L0014           L0038           L0224           L0247           L0298          L0323          L0346          L0369          L0393          L1009
L0015           L0039           L0225           L0248           L0299          L0324          L0347          L0370          L0394
L0016           L0040           L0226           L0249           L0301          L0325          L0348          L0371          L0395
L0017           L0041           L0227           L0250           L0302          L0326          L0349          L0372          L0396
L0018           L0042           L0228           L0251           L0303          L0327          L0350          L0373          L0397
L0019           L0043           L0229           L0252           L0304          L0328          L0351          L0374          L0398
L0020           L0044           L0230           L0253           L0305          L0329          L0352          L0375          L0399
L0021           L0045           L0231           L0254           L0306          L0330          L0353          L0376          L0400
L0022           L0046           L0232           L0255           L0307          L0331          L0354          L0377          L0401
L0023           L0047           L0233           L0256           L0308          L0332          L0355          L0378          L0402
L0024           L0048           L0234           L0257           L0309          L0333          L0356          L0379          L0403
--------------------------------------------------------------------------------------------------------------------------------------------------------

Schedule F--Donor Lines

MON 531 in Coker 312
MON 757 in any variety
MON 1445 in Coker 312
MON 1698 in any variety
MON 15985 in DP50B or PS7
MON 88913 in Coker 130, PS7 or Suregro 125
MON 15985 x MON 88913 in PS7 or Suregro 125
MON 1076 in any variety
MON 15947 in any variety

United States District Court for the District of Columbia

    United States of America, Plaintiff, v. Monsanto Company and Delta 
and Pine Land Company, Defendants.
    Case: 1:07-cv-00992.
    Assigned To: Urbina, Ricardo M.
    Assign Date: 5/31/2007.
    Description: Antitrust.

Competitive Impact Statement

    Plaintiff United States of America (``United States''), pursuant to 
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or 
``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact 
Statement relating to the proposed Final Judgment submitted for entry 
in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    Defendants entered into an Agreement and Plan of Merger dated 
August 14, 2006, pursuant to which Monsanto Company (``Monsanto'') will 
acquire Delta and Pine Land Company (``DPL''). The United States filed 
a civil antitrust Complaint on May 31, 2007, seeking to enjoin the 
proposed acquisition. The Complaint alleges that the likely effect of 
this acquisition would be to substantially lessen competition in the 
market for the development, production, and sale of traited 
cottonseed--cottonseed genetically modified to contain desirable 
characteristics from non-cottonseed sources--in violation of Section 7 
of the Clayton Act, 15 U.S.C. 18. This loss of competition would likely 
result in higher prices and fewer choices for cotton farmers in the 
MidSouth (Mississippi, Arkansas, Louisiana, Missouri, and Tennessee) 
and Southeast (Alabama, Georgia, Florida, North Carolina, South 
Carolina, and Virginia).
    At the same time the Complaint was filed, the United States also 
filed a Hold Separate and Preservation of Assets Stipulation and Order 
(``Hold Separate'') and proposed Final Judgment, which are designed to 
eliminate the anti competitive effects of the acquisition. Under the 
proposed Final Judgment, which is explained more fully below, (1) 
Defendants must divest Stoneville Pedigreed Seed Company 
(``Stoneville''), certain cottonseed lines developed by DPL for the 
MidSouth and Southeast, and additional cotton breeding assets of 
Monsanto (collectively, the ``Enhanced Stoneville Assets'') to an 
acquirer or acquirers acceptable to the United States; (2) Defendants 
must divest to Syngenta Crop Protection AG (``Syngenta'') forty-three 
DPL cottonseed lines containing Vip Cot, Syngenta's insect-resistant 
trait technology that DPL was developing for cottonseed (the ``VipCot 
Assets''); and (3) Defendant Monsanto must modify its cottonseed trait 
licenses with seed companies to permit licensees to breed and sell, 
without penalty, cottonseed containing non-Monsanto traits and 
cottonseed containing both licensed Monsanto traits and non-Monsanto 
traits, and modify its Cotton States licenses to remove any provision 
that allows Monsanto to terminate the license if the licensee sells 
cottonseed containing other traits.
    Until the divestiture of the Enhanced Stoneville Assets has been 
accomplished, the Hold Separate requires Defendants to take all steps 
necessary to ensure that DPL is operated as an independent, ongoing, 
economically viable competitive business held entirely separate, 
distinct and apart from Monsanto's commercial operations. The proposed 
Final Judgment provides that if the Enhanced Stoneville Assets are not 
sold within the time period prescribed in the proposed Final Judgment 
to an acquirer or acquirers acceptable to the United States, Monsanto 
will divest DPL.
    The Hold Separate also requires Defendants to preserve the 
divestiture assets. Until the divestiture of the Enhanced Stoneville 
Assets, Defendants must take all steps necessary to ensure that 
Stoneville will be maintained and operated as an ongoing, economically 
viable and active competitor in the development, production, and sale 
of traited cottonseed. Until the divestiture of the VipCot Assets has 
been accomplished, Defendants must preserve the VipCot Assets and use 
all reasonable efforts to proceed with their

[[Page 33354]]

development, including maintaining all production processes for the 
assets, so as not to unduly delay the commercialization and sale of 
cottonseed containing VipCot in the United States.
    The settlement ensures the continuation of current competition in 
the MidSouth and Southeast between Stoneville and DPL. It also 
preserves Syngenta's ability to bring cottonseed with VipCot to the 
market with minimal delay. And, it provides trait developers a seed 
company independent of Monsanto offering a platform of high-quality 
germplasm for the development of non-Monsanto traited cottonseed for 
the MidSouth and Southeast, preserving the prospects for trait 
competition in cottonseed.
    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment would terminate this action, except that 
the Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction
    Defendant Monsanto is a Delaware corporation with its headquarters 
in St. Louis, Missouri. Monsanto is a leading global provider of 
agricultural products for farmers, including seeds for cotton, 
soybeans, and corn; in-the-seed trait technologies that protect crops 
against damage from insects and weeds; and crop protection chemicals 
such as the herbicide Roundup. Monsanto's total revenues in 2006 
exceeded $7.3 billion. The vast majority of cotton grown in the U.S. 
contains biotech traits, and over 96% of the traited cottonseed sold 
domestically contains Monsanto traits. Monsanto's two groups of 
cottonseed traits are marketed under the brand names (a) Roundup Ready, 
and its successor Roundup Ready Flex, both of which make cotton 
resistant to harm from glyphosate-based herbicides like Monsanto's 
Roundup, and (b) Bollgard, and its successor Bollgard II, both of which 
make cotton plants toxic to lepidopteran insect pests such as the 
cotton bollworm. Monsanto licenses its traits to seed companies, 
including DPL.
    Monsanto's cottonseed sales, primarily through its Stoneville 
subsidiary, account for approximately 16% of the traited cottonseed 
sold in the United States in 2006, making Monsanto one of the largest 
sellers of traited cottonseed in the United States. In the MidSouth and 
Southeast, Monsanto accounted for 17% and 8%, respectively, of all 
traited cottonseed sales.
    Defendant DPL is a Delaware corporation with its headquarters in 
Scott, Mississippi. DPL is the largest supplier of traited cottonseed 
in the United States. In 2006, DPL accounted for approximately 56% of 
the traited cottonseed sold in the United States, with sales exceeding 
$417 million. In the MidSouth and Southeast, DPL accounted for 79% and 
87%, respectively, of all traited cottonseed sales. DPL does not itself 
produce traits, but works with biotechnology companies to develop 
cottonseed traits and to breed the resulting traits into DPL germplasm 
(the genetic material containing the inherent qualities of cottonseed, 
such as yield and fiber quality).
    The combination of Monsanto and DPL would create the largest 
provider of traited cottonseed in the United States and give the 
combined firm about 95% of traited cottonseed sales in the MidSouth and 
Southeast. The proposed transaction would also eliminate DPL as a 
partner independent of Monsanto for competing trait developers, thereby 
substantially delaying or preventing the development and introduction 
of cottonseed containing non-Monsanto traits. Thus, the proposed 
transaction would lessen competition substantially in violation of 
Section 7 of the Clayton Act.
B. The Cotton Industry
    Cotton is currently grown on over fifteen million acres in the 
United States, in seventeen states across the Southern United States 
from Virginia to California. The industry recognizes four distinct 
growing regions: the MidSouth, Southeast, Southwest (Texas, Kansas, and 
Oklahoma), and West (Arizona, New Mexico, and California). The 
cottonseed varieties grown vary by region because growing conditions, 
such as soil type and climate, affect seed performance. Farmers choose 
cottonseed varieties that perform best in their geographic area, 
placing the greatest emphasis on a variety's yield (i.e., the expected 
amount of cotton produced per acre).
    Cottonseed companies continually work on developing improved 
cottonseed varieties through their breeding programs. Cotton breeding 
is a costly and time-consuming process in which the cottonseed company 
selects lines to breed together (or ``cross''), plants cottonseed 
generated by that initial cross, and then selects the best plants for 
further crossing to create a variety with the desired characteristics. 
In most cases, it takes eight to ten years from the initial cross until 
a new conventional cottonseed variety (i.e., seed containing no 
transgenic traits) is ready for market, while a traited version of that 
same conventional variety may take an additional two to three years.
    The success of a cottonseed company's breeding program is dependent 
on many factors, the most important of which are the quantity and 
quality of available breeding materials, i.e., germplasm. A company 
with a large collection of high-quality, or elite, germplasm has a 
significant advantage because it is able to identify the best genetic 
material and use it in a wide variety of possible crossing 
combinations, resulting in a greater likelihood of developing a 
successful variety.
1. The Development of Traited Cottonseed
    Monsanto and DPL partnered in the 1980s to develop and produce 
traited cottonseed. DPL contributed its high-quality germplasm and 
experienced cotton breeders; Monsanto, its insect-resistant and 
herbicide-tolerant traits. In 1996, DPL began to sell the first 
cottonseed with Monsanto's insect-resistant trait (Bollgard) and, the 
following year, introduced a variety with Monsanto's herbicide-tolerant 
trait (Roundup Ready).
    Farmers quickly adopted Monsanto-traited cottonseed because its use 
significantly lowered fanning costs and reduced the risk of crop loss. 
Farming with conventional seed involved labor-intensive, costly 
herbicide and insecticide applications at specific times in the growing 
season. Farmers had to target herbicide applications only on weeds to 
avoid killing the cotton plants. By planting cottonseed containing an 
herbicide-tolerant trait, such as Roundup Ready, farmers can spray 
herbicide over the entire crop to kill weeds without killing the young 
cotton plants. Cottonseed containing an insect-resistant trait, such as 
Bollgard, reduces insecticide purchases and spraying. Today, almost all 
of the cottonseed planted in the MidSouth and Southeast, where insects 
and weeds pose significant problems, contains traits that provide both 
insect resistance and herbicide tolerance.
    When farmers acquire traited cottonseed, they pay a price per bag 
to the seed distributor, who, in turn, pays the seed manufacturer 
(e.g., DPL) for the seed and a separate license fee to the developer of 
the trait (e.g., Monsanto).

[[Page 33355]]

This license fee, commonly referred to as the ``technology fee,'' is 
usually collected by the seed distributor for the trait developer. 
Typically, the trait developer shares a portion of the technology fee 
with the seed distributor and the seed manufacturer. The technology fee 
can constitute as much as 80% of farmers' total costs for a bag of 
traited cottonseed.
    Only two non-Monsanto cotton traits are currently commercialized. 
WideStrike is an insect-resistant trait developed by Dow AgroSciences 
to compete with Monsanto's Bollgard trait. WideStrike is only available 
in Dow's Phytogen cottonseeds, which are primarily used in California 
where they perform well. LibertyLink, a trait developed by Bayer 
CropScience to make cotton tolerant to glufosinate herbicides, competes 
with Monsanto's Roundup Ready glyphosate herbicide-tolerant trait. 
LibertyLink is only available in Bayer's FiberMax cottonseeds, which 
are primarily used in the Southwest where they perform well. Together, 
cottonseed containing WideStrike or LibertyLink accounted for less than 
5% of total United States traited cottonseed sales in 2006.
2. DPL's Trait Development With Monsanto's Competitors
    After a failed attempt to merge with Monsanto in the late 1990s, 
DPL commenced a strategy to replace (or ``trade-out'') the Monsanto 
traits in DPL cottonseed with traits developed by Monsanto's 
competitors. DPL has worked with several biotechnology companies, 
including Syngenta, DuPont, Bayer, and Dow, to develop cottonseed 
containing the traits developed by these companies that would compete 
with cottonseed containing Monsanto traits.
    The process to develop a cotton trait and breed and commercialize 
cottonseed varieties with that trait typically takes eight to twelve 
years and costs over $100 million. The process often requires thousands 
of attempts before developing a traited cottonseed that can be used to 
breed commercial varieties. In addition, extensive regulatory 
approvals, both in the United States and abroad, are required.
    Trait developers consider DPL an attractive partner for two 
reasons. First, DPL is in a strong position to introduce new trait 
technologies due to its extensive breeding programs, elite germplasm 
collection, technical service capabilities, know-how, brand 
recognition, and market position. Second, DPL's trait licenses with 
Monsanto allow DPL to offer competing trait developers the ability to 
combine or ``stack'' their traits in DPL cottonseed with Monsanto 
traits. This stacking right would allow, for example, the developer of 
an insect-resistant trait to bring that trait to market in cottonseed 
that also contains Monsanto's Roundup Ready (or Roundup Ready Flex) 
herbicide-tolerant trait. Most United States farmers choose cottonseed 
that contains both an insect-resistant trait and an herbicide-tolerant 
trait. Monsanto's trait licenses with cottonseed companies other than 
DPL severely restrict the ability of those companies to work with other 
trait developers, with some licenses prohibiting stacking of Monsanto's 
traits with another company's traits.
    DPL's most advanced work with non-Monsanto trait developers is with 
Syngenta. DPL's developmental work with Syngenta resulted in a 2004 
agreement to commercialize cottonseed with Syngenta's VipCot insect-
resistant traits. VipCot has been incorporated into some of DPL's best 
germplasm, and DPL had expected, before Monsanto's proposed acquisition 
was announced, to begin marketing such cottonseed as early as 2009.
Monsanto's Cottonseed Business
    Facing DPL's strategy to replace Monsanto traits in DPL seed with 
traits developed by Monsanto's competitors, Monsanto set about building 
its own cottonseed business to compete vigorously against DPL. Pursuant 
to this strategy, Monsanto began its Cotton States program in early 
2002. Through Cotton States, Monsanto obtains licenses for cotton 
germplasm that small seed companies, private breeders and universities 
have developed; improves the germplasm through selective breeding; 
introduces Monsanto traits; and out-licenses the resulting traited 
cottonseed varieties to distributors and small cottonseed companies for 
sale under private labels.
    In 2005, Monsanto repurchased Stoneville, the second-largest 
traited cottonseed company in the MidSouth and Southeast. (Monsanto had 
previously purchased Stoneville in 1996, and sold it in 1999 shortly 
before abandoning its attempt to acquire DPL.) Upon reacquiring 
Stoneville, Monsanto immediately invested capital to improve 
Stoneville's competitive position. With the acquisition of Stoneville, 
Monsanto became the second largest seller of traited cottonseed in the 
important MidSouth and Southeast regions.
    Monsanto aggressively worked to strengthen its cottonseed business 
by, among other things, focusing on advanced breeding techniques and 
germplasm development and investing in breeding facilities. Monsanto 
predicted internally that these investments would enable Monsanto to 
increase its share of the cottonseed business in competition with DPL.
C. Product and Geographic Markets
    The relevant antitrust product and geographic markets are the 
development, commercialization, and sale of traited cottonseed for the 
MidSouth and Southeast. Growing conditions for cotton differ across 
regions due to weather conditions, soil type, and varied demands for 
weed and insect control. Farmers demand cottonseed varieties that 
produce high yield for their particular growing conditions. Monsanto 
and DPL recognize this demand and market cottonseed varieties by 
region.
    In many regions of the country, particularly the MidSouth and 
Southeast, farmers demand that cottonseed have traits that provide 
insect resistance and herbicide tolerance. In the MidSouth and 
Southeast, approximately 90% of traited seed purchased by farmers 
contains both types of traits. Monsanto prices traits by region.
    Cotton is a particularly high-value crop in the MidSouth and 
Southeast, where over 50% of domestic cotton is grown. The cost of 
cottonseed amounts to only a fraction of the total cost of growing 
cotton. A small but significant increase in the price of traited 
cottonseed in the MidSouth and Southeast regions would not cause 
sufficient farmers to plant other crops, or switch sufficient 
cottonseed purchases to conventional (non-traited) cottonseed or 
cottonseed varieties not well suited for their regions to make the 
price increase unprofitable.
D. The Competitive Effects of the Transaction on the Market for the 
Development, Production, and Sale of Traited Cottonseed in the MidSouth 
and Southeast
    Monsanto's acquisition of DPL would substantially lessen 
competition for the development, commercialization, and sale of traited 
cottonseed in the MidSouth and Southeast. First, the combination would 
increase the merged firm's ability and incentive to raise prices and 
reduce choices for traited cottonseed in the MidSouth and Southeast. In 
the MidSouth, DPL and Stoneville account for approximately 79% and 16%, 
respectively, of traited cottonseed sales. In the Southeast, DPL and 
Stoneville account for approximately 87% and 8%, respectively, of 
traited cottonseed sales. After the proposed acquisition, the combined 
Monsanto and DPL would

[[Page 33356]]

have a market share of approximately 95% for traited cottonseed sales 
in both the MidSouth and Southeast.\1\
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    \1\ The MidSouth and Southeast traited cottonseed markets are 
highly concentrated. As measured by the Herfindahl-Hirschman Index 
(``HHI''), which is commonly used in merger analysis and explained 
in Appendix A of the Complaint, Monsanto's acquisition of DPL would 
increase the HHI by 3310 in the MidSouth, resulting in a postmerger 
HHI of 9110. In the Southeast, the proposed acquisition would 
increase the HHI by 1489, resulting in a postmerger HHI of 9184.
---------------------------------------------------------------------------

    Second, the merger would eliminate DPL as a partner independent of 
Monsanto for developers of cotton traits that would compete against 
Monsanto's traits. Syngenta's current efforts to develop and 
commercialize with DPL cottonseed with Syngenta's VipCot insect-
resistant technology to compete with Monsanto's Bollgard traits would 
be substantially delayed or prevented, preserving Monsanto's current 
dominance. And, the merger would likely delay, if not deter, efforts to 
develop other traits that would provide benefits to United States 
cotton farmers, including herbicide-tolerant traits that would compete 
with Monsanto's Roundup Ready traits. As a result, farmers likely would 
have fewer choices of, and face higher prices for, traited cottonseed.
E. Entry
    Entry into the traited cottonseed business would be difficult, time 
consuming, and expensive. It requires the assets and expertise both to 
breed high-performing varieties of cottonseed and to develop or obtain 
traits providing insect resistance and herbicide tolerance. For a 
company that has developed a trait, de novo entry to develop, breed, 
and commercialize cottonseed varieties with the trait takes 
approximately twelve years, costs millions of dollars, requires a 
sufficient supply of high-quality germplasm, and is uncertain. 
Therefore, entry into the traited cottonseed business would not be 
timely, likely, or sufficient in its magnitude, character, and scope to 
deter or counteract an anticompetitive increase in the price of traited 
cottonseed by a combined Monsanto and DPL.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment remedies the anticompetitive effects of 
the acquisition alleged in the Complaint--the elimination of 
competition between DPL and Monsanto for the development, breeding, and 
sale of traited cottonseed and the elimination of DPL as a partner 
independent of Monsanto for developers of traits that would compete 
against Monsanto--by requiring Defendants to divest the Enhanced 
Stoneville Assets to an approved acquirer, to divest to Syngenta over 
forty DPL cottonseed breeding lines containing VipCot, and to make 
certain licensing term modifications to Monsanto's Cotton States and 
seed company licenses.
    Taken together, these provisions will preserve existing competition 
in the market for traited cottonseed in the MidSouth and Southeast, 
will allow Syngenta to market cottonseed with VipCot with no more than 
minimal delay, and will ensure the continued presence of a cottonseed 
company independent of Monsanto with sufficient germplasm and breeding 
capabilities to serve as an effective platform for development of 
cottonseed traits in competition with Monsanto.
    The proposed Final Judgment and its accompanying schedules set 
forth the specific assets to be divested (including certain limitations 
to the assets being divested), the modifications that Defendant 
Monsanto must make to its third-party licenses, and the other 
obligations of Defendants. The following describes these remedy 
provisions:
A. The Enhanced Stoneville Assets
    The Enhanced Stoneville Assets consist of Monsanto's Stoneville 
business, promising Monsanto cottonseed germplasm, and twenty lines of 
elite DPL germplasm, including a dozen of DPL's most promising 
developmental lines for the MidSouth and Southeast as well as Delta 
Pearl, the parent of DPL's highly-popular DPL555 variety. The proposed 
Final Judgment requires Defendants to divest the Enhanced Stoneville 
Assets to an acquirer acceptable to the United States in its sole 
discretion. The acquirer must have a credible commitment to the traited 
cottonseed market and have the intent and capability of competing 
effectively in the market. The Defendants must divest the assets in 
such a way as to satisfy the United States, in its sole discretion, 
that the assets can and will be used by the acquirer as part of a 
viable, ongoing business engaged in the development, production, and 
sale of traited cottonseed. These provisions are designed to ensure 
that the Enhanced Stoneville Assets will be used to preserve 
competition that would otherwise be lost as a result of the 
acquisition.
    This divestiture will provide the acquirer of the Enhanced 
Stoneville Assets the tools it needs--including valuable germplasm from 
Stoneville, Monsanto and DPL--to be a viable and active competitor in 
the MidSouth and Southeast, restoring the traited cottonseed 
competition that would otherwise be lost as a result of the 
acquisition. The Enhanced Stoneville Assets will provide the acquirer a 
significant base of current and developmental varieties that would be 
attractive to trait developers looking to introduce traits into 
cottonseed, particularly cottonseed well suited to the MidSouth and 
Southeast. The remedy in the proposed Final Judgment will give the 
acquirer capabilities that exceed those of Stoneville and a foundation 
on which to replicate the platform for trait development and 
commercialization that DPL previously provided.
    The Enhanced Stoneville Assets include:
1. Stoneville
    Defendants will divest Monsanto's U.S. Stoneville business, 
including all U.S. Stoneville cotton germplasm. This divestiture will 
give the acquirer the benefit of Stoneville's existing presence in the 
MidSouth and its germplasm development pipeline, which includes 
approximately 35 mid-to-full- and full-season lines for potential 
commercialization in the MidSouth and Southeast between 2008 and 2012. 
The divestiture will also include Stoneville's breeding facilities, 
tangible assets, brand names, breeder records and other intangible 
assets.
    The proposed Final Judgment also requires Monsanto to grant the 
acquirer licenses to Monsanto's current Roundup Ready and Bollgard 
traits on terms at least as favorable as DPL's current terms with 
respect to stacking rights, revenue sharing, and options for licensing 
future traits. This licensing requirement will provide the acquirer of 
Stoneville the same ability as DPL to offer other trait developers a 
platform upon which to stack non-Monsanto traits with Monsanto traits.
2. Additional Monsanto Cotton Germplasm
    Divesting Stoneville by itself would not fully restore the lost 
competition between Monsanto and DPL as it would fail to capture the 
breadth of Monsanto's cotton breeding program that supported Monsanto's 
projected share growth. In addition to Monsanto's improvements to 
Stoneville (which included adding a breeding station and personnel), 
Monsanto worked on advanced breeding techniques and germplasm 
development to strengthen its future competitive position. The proposed 
Final Judgment requires Monsanto to divest the germplasm and technology 
related to

[[Page 33357]]

these programs, as described below. As some of this work was undertaken 
in connection with Monsanto's trait development efforts, the proposed 
Final Judgment allows Monsanto to retain assets (and research rights to 
germplasm) that directly relate to trait development.
    Advanced Exotic Yield Lines: Defendants will divest the exclusive 
right to commercialize varieties from the Advanced Exotic Yield Lines 
set forth in Schedule D of the proposed Final Judgment. Monsanto 
developed this germplasm as part of its ongoing non-transgenic yield 
trait discovery project, which seeks to discover traits in exotic 
cotton plants that could be bred into commercial varieties to increase 
yield. This project has resulted in the creation of promising 
developmental germplasm lines. Monsanto anticipated that varieties 
developed from these lines would be well suited for the MidSouth and 
Southeast and could be introduced as early as 2009. The acquirer will 
be able to commercialize such varieties and use the lines for 
additional breeding. As these lines were part of Monsanto's ongoing 
trait research project, Monsanto will be allowed to obtain a license 
back from the acquirer to continue to use these lines for that research 
effort.
    Marker Assisted Breeding (``MAB'') Populations: Defendants will 
divest all of the germplasm from Monsanto's MAB program, as listed in 
Schedule E of the proposed Final Judgment. This program was intended to 
enable breeders to use sophisticated molecular technology to aid in the 
selection of promising lines to advance to the next breeding stage. 
Monsanto anticipated that Stoneville varieties developed through the 
MAB program would reach the market by 2011, and that MAB would be the 
primary development source for the varieties that Stoneville would 
commercialize throughout the next decade.\2\
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    \2\ Although the Advanced Exotic Yield Lines and MAB Populations 
provide the acquirer with promising germplasm for expanding 
Stoneville's market share, they provide a limited platform for 
introducing non-Monsanto traits because many of these lines are 
already introgressed with Monsanto traits. The proposed Final 
Judgment addresses this limitation by requiring Defendants to allow 
the acquirer to breed out Monsanto traits from these lines (creating 
``Null Lines''). Further, Defendants are also required to provide 
any information necessary for the acquirer to obtain regulatory 
approval for varieties developed from Null Lines.
---------------------------------------------------------------------------

    Cotton States Germplasm: Defendants will divest to the acquirer a 
non-exclusive, royalty-free license to sell and breed with varieties 
from Monsanto's recently established Cotton States program that 
Stoneville currently sells today. In addition, as Monsanto typically 
uses germplasm in the Cotton States program that is owned by other 
entities (the ``Cotton States Licensors''), Monsanto will relinquish to 
the acquirer the rights it possesses to work with the Cotton States 
Licensors to commercialize varieties that result from pre-existing 
crosses of Stoneville germplasm and Cotton States Licensors 
germplasm.\3\
---------------------------------------------------------------------------

    \3\ The proposed Final Judgment, however, does not require 
Monsanto to divest its Cotton States program. Insisting upon 
divestiture of the program would have required obtaining consent 
from all of the Cotton States Licensors and could have resulted in 
disruption to the licensors' financially beneficial current 
contractual and business relationships with Monsanto. Rather, this 
divestiture provides Stoneville the ability to continue working with 
the germplasm that it had been developing prior to the acquisition.
---------------------------------------------------------------------------

    Other Germplasm: Defendants will divest all other germplasm in 
Defendant Monsanto's possession, except that Monsanto may retain, with 
certain limitations, certain categories of germplasm used predominantly 
in its trait development and licensing business.
3. DPL Germplasm
    DPL's success is due in significant part to its large collection of 
high-quality cotton germplasm from which it breeds high-yielding 
varieties. To ensure that the acquirer will have the scale and scope 
necessary in the Southeast and MidSouth to be an effective and 
competitive platform for trait development, Defendants will divest 
twenty DPL conventional varieties.\4\
---------------------------------------------------------------------------

    \4\ In 2006, DPL purchased rights to germplasm owned by 
Syngenta. Under the proposed Final Judgment, Defendants will divest 
these conventional lines to the acquirer in addition to the twenty 
lines discussed above.
---------------------------------------------------------------------------

    Eight of the twenty varieties are in the pedigrees of many of DPL's 
popular current varieties in the MidSouth and Southeast. In particular, 
four of these varieties (AZ2099, DP491, Delta Pearl, and DP565) are the 
recurrent conventional parents for DPL commercial traited varieties 
that today account for approximately 55% of the cottonseed sold in the 
Southeast (where Stoneville presently holds only an 8% share of sales). 
Delta Pearl is the parent of the high-yielding DPL555, which is by far 
the dominant cottonseed variety in the Southeast.
    The twelve other divested DPL varieties constitute a significant 
portion of DPL's breeding pipeline for the MidSouth and Southeast and 
represent the varieties, and breeding stock for the varieties, that DPL 
had chosen to bring to market over the next decade. These twelve 
varieties were bred at the DPL breeding stations that focus on 
developing germplasm well suited for the MidSouth and Southeast. Over 
the past four years, each of these twelve varieties has been ranked by 
DPL during the regular course of business as falling within DPL's top 
category for conventional lines based on the variety's performance 
characteristics, such as yield, fiber quality, and disease resistance. 
The superiority of these twelve lines is underscored by the fact that 
DPL selected them for introgression with the traits that DPL was 
developing with Syngenta, as well as for introgression with Monsanto's 
latest insect-resistant and herbicide-tolerant traits.
    The proposed Final Judgment permits Defendants to retain a license 
to continue using these twenty lines to breed new varieties and to sell 
exclusively varieties that contain only Monsanto's traits. This 
exception to total divestiture (i.e., permitting Defendants to continue 
selling varieties currently in the market and continue breeding with 
the divested varieties) is necessary to preserve DPL's current 
competitiveness, prevent disruption to its breeding program, and 
provide DPL the ability to compete effectively in the future. The 
acquirer of the Enhanced Stoneville Assets will have use of these 
varieties for its breeding program and will have rights to 
commercialize varieties (including in the MidSouth and Southeast) that 
contain traits being developed by other trait providers, either alone 
or in combination with Monsanto's traits.\5\ With these rights, the 
acquirer will be in a position to provide trait developers with a 
competitive alternative to DPL going forward.
---------------------------------------------------------------------------

    \5\ The proposed Final Judgment limits the acquirer in one 
respect with regard to non-Monsanto traits. For seven years, 
Monsanto may prevent it from ``triple-stacking'' in the twenty 
varieties a Monsanto glyphosate-tolerant trait, a Monsanto insect-
resistant trait, and any non-glyphosate herbicide-tolerant trait 
available at the time the Complaint was filed. Nothing in the 
decree, however, prohibits Monsanto or the acquirer from 
commercializing such a triple-stacked cottonseed if licenses could 
be obtained from all affected rights-holders.
---------------------------------------------------------------------------

    The proposed Final Judgment allows Defendants to continue, for a 
limited period of time, to sell conventional versions of some of the 
divested DPL varieties currently being sold by DPL in and outside of 
the United States, providing for a continuity of supply of conventional 
cottonseed.
4. Defendant Monsanto Must Divest DPL if Enhanced Stoneville Assets Are 
Not Divested in a Timely Manner
    In merger cases where the United States seeks a divestiture remedy, 
it requires completion of the divestitures

[[Page 33358]]

within the shortest time period reasonable under the circumstances. In 
this case, the proposed Final Judgment provides that Defendants must 
complete the divestiture within ninety (90) calendar days after the 
filing of the Complaint. Defendants must use their best efforts to 
divest the Enhanced Stoneville Assets as expeditiously as possible. The 
United States, in its sole discretion, may grant one or more extensions 
of time, not to exceed sixty (60) calendar days in total.
    In the event that Defendants do not accomplish the divestiture of 
the Enhanced Stoneville Assets within the time period permitted in the 
proposed Final Judgment, the proposed Final Judgment provides that 
Defendant Monsanto shall divest DPL within sixty (60) days. Requiring 
divestiture of the acquired company would be necessary to ensure the 
full restoration of competition as quickly as possible should 
Defendants not be able to divest the Enhanced Stoneville Assets in an 
acceptable manner.
    If the Defendant Monsanto has not divested DPL within the time 
period permitted by the proposed Final Judgment, then a trustee shall 
be appointed by the Court upon application of the United States. The 
proposed Final Judgment provides that Monsanto will pay all costs and 
expenses of the trustee. The trustee's commission will be structured so 
as to provide an incentive for the trustee based on the price obtained 
and the speed with which the divestiture is accomplished. After the 
trustee's appointment becomes effective, the trustee will file monthly 
reports with the Court and the United States setting forth the 
trustee's efforts to accomplish the divestiture of DPL. At the end of 
ninety (90) calendar days, if the divestiture has not been 
accomplished, the trustee and the United States will make 
recommendations to the Court, which shall enter such orders as 
appropriate, in order to carry out the purpose of the trust, including 
extending the trust or the term of the trustee's appointment.
B. The Syngenta/VipCot Divestiture
    The proposed Final Judgment requires Defendants to divest to 
Syngenta the VipCot Assets listed in Schedule C of the proposed Final 
Judgment. This divestiture seeks to minimize any delay the acquisition 
could cause in the commercialization of cottonseed containing VipCot, 
Syngenta's insect-resistant trait technology that would compete against 
Monsanto's Bollgard family of traits. The VipCot assets include forty-
three lines of DPL germplasm into which DPL has incorporated VipCot, 
along with performance data and other information.\6\ These lines are 
based on the most promising germplasm that DPL has in its development 
pipeline for geographies across the Cotton Belt, including the MidSouth 
and Southeast. They are at various stages of development, with DPL 
anticipating commercializing varieties from five of these lines as 
early as 2009, three in 2010 or 2011, and the remainder in 2011 and 
beyond.
---------------------------------------------------------------------------

    \6\ One of the forty-three lines is a line that DPL purchased 
from Syngenta in 2006 into which DPL introduced VipCot.
---------------------------------------------------------------------------

    The lines will be transferred to Syngenta along with certain rights 
to allow Syngenta, by itself or working with others, to bring these 
varieties to market. Syngenta will have exclusive rights to 
commercialize varieties developed from these lines so long as the 
variety has at least one of the Syngenta trait events listed in 
Schedule C of the proposed Final Judgment, which includes the events 
that form VipCot. Syngenta will also have exclusive rights to breed 
with the Syngenta-traited versions of these lines. To facilitate 
breeding, Monsanto will provide Syngenta the ``recurrent parent'' 
conventional germplasm for each of the divested lines until December 
21, 2014, which will allow Syngenta to complete development of these 
lines and add other traits.
    The proposed Final Judgment also requires Monsanto to offer 
Syngenta a license to Roundup Ready Flex so that Syngenta can 
commercialize these VipCot lines stacked with Roundup Ready Flex. Such 
a license will permit Syngenta to advance these lines by introgressing 
Roundup Ready Flex into them. It will also permit Syngenta to sell, 
either independently or in conjunction with an established cottonseed 
company with a Roundup Ready Flex license, varieties stacked with 
VipCot and Flex.
    The VipCot divestiture to Syngenta will therefore allow Syngenta to 
commercialize VipCot on the same schedule as DPL's anticipated 
commercialization and with the same range of options regarding stacking 
herbicide tolerance or other traits. Defendants must use their best 
efforts to divest the VipCot Assets as expeditiously as possible and 
shall not take any action that would harm the VipCot Assets or in any 
way impede their divestiture.
Changes in Third Party Licenses
    The proposed Final Judgment requires Monsanto to modify its third-
party cottonseed trait and Cotton States Lines licenses no later than 
ten (10) days after the date of sale of the Enhanced Stoneville Assets, 
subject to the approval of the United States in its sole discretion. 
Monsanto will modify its third-party cottonseed trait licenses to 
remove restrictions on the ability of licensees to develop, market, or 
sell cottonseed containing traits of companies other than Monsanto, or 
to combine the licensed Monsanto traits in cottonseed with the traits 
of other companies. Monsanto will also modify the Cotton States Lines 
licenses to eliminate any provision that allows Monsanto to terminate 
the license if the licensee sells cottonseed containing other traits.
    These changes will give these competing cottonseed companies the 
ability to partner with trait developers other than Monsanto without 
any financial penalty and to offer traits desired by farmers. Trait 
developers will thereby have access to close to half of the current 
U.S. cottonseed market, without having to deal with the combined 
Monsanto/DPL. These changes will ensure that Monsanto cannot prevent 
trait developers from bringing competing, non-Monsanto traits to the 
market.
D. Notice Provisions
    The proposed Final Judgment provides that Defendant Monsanto shall 
provide notice to the United States prior to acquiring any company that 
develops and sells cottonseed in the United States or has developed, or 
has under development, traits for commercialization in cottonseed in 
the United States, unless the transaction is otherwise subject to Hart-
Scott-Rodino reporting requirements. This provision will allow the 
United States to assess whether any such transaction would be likely to 
substantially lessen competition.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act (15 U.S.C. 15) provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton

[[Page 33359]]

Act (15 U.S.C. 16(a)), the proposed Final Judgment has no prima facie 
effect in any subsequent private lawsuit that may be brought against 
Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register, or the last date of 
publication in a newspaper of the summary of this Competitive Impact 
Statement, whichever is later. All comments received during this period 
will be considered by the United States Department of Justice, which 
remains free to withdraw its consent to the proposed Final Judgment at 
any time prior to the Court's entry of judgment. The comments and the 
response of the United States will be filed with the Court and 
published in the Federal Register.
    Written comments should be submitted to: Donna N. Kooperstein, 
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, NW., 
Suite 500, Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against Defendants. The 
United States could have continued the litigation and sought 
preliminary and permanent injunctions against Monsanto's acquisition of 
DPL. The United States is satisfied, however, that the divestiture of 
assets and other relief described in the proposed Final Judgment will 
preserve competition in the market for the development, production, and 
sale of traited cottonseed. Thus, the proposed Final Judgment would 
achieve all or substantially all of the relief the United States would 
have obtained through litigation, but avoids the time, expense, and 
uncertainty of a full trial on the merits of the Complaint.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty-day comment 
period, after which the Court shall determine whether entry of the 
proposed Final Judgment ``is in the public interest.'' 15 U.S.C. 
16(e)(1). In making that determination, the court, in accordance with 
amendments to the APPA in 2004, is required to consider:

    (A) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) The impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(1)(A) & (B); see generally United States v. SBC 
Commc'ns, Inc., Nos. 05-2102 and 05-2103,2007 WL 1020746, at *9-16 
(D.D.C. Mar. 29, 2007) (assessing public interest standard under APPA 
and effect of 2004 amendments).\7\ Courts in this circuit have held--
both before and after the 2004 amendments--that the United States is 
entitled to deference in crafting its antitrust settlements, especially 
with respect to the scope of its complaint and the adequacy of its 
remedy, which are the ``two most significant legal questions'' relating 
to a public interest determination. United States v. Microsoft Corp., 
56 F.3d 1448, 1458-62 (D.C. Cir. 1995); SBC Commc'ns, 2007 WL 1020746, 
at *12-*16.\8\

    \7\ Compare 15 U.S.C. 16(e) (2004), with 15 U.S.C. 16(e)(1) 
(2006) (substituting ``shall'' for ``may'' in directing relevant 
factors for court to consider and amending list of factors to focus 
on competitive considerations and to address potentially ambiguous 
judgment terms). The 2004 amendments do not affect the substantial 
precedent in this and other circuits analyzing the scope and 
standard of review for APPA proceedings. See SBC Commc'ns, 2007 WL 
1020746, at *9 (``[A] close reading of the law demonstrates that the 
2004 amendments effected minimal changes. * * * '').
    \8\ The Microsoft court explained that a court making a public 
interest determination under the APPA should consider, among other 
things, the relationship between the remedy secured and the specific 
allegations set forth in the government's complaint, whether the 
decree is sufficiently clear, whether enforcement mechanisms are 
sufficient, and whether the decree may positively harm third 
parties. Microsoft, 56 F.3d at 1458-62.
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    With respect to the adequacy of the relief secured by the decree, a 
court may not ``engage in an unrestricted evaluation of what relief 
would best serve the public.'' United States v. BNS, Inc., 858 F.2d 
456, 462 (9th Cir. 1988) (citing United States v. Bechtel Corp., 648 
F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d at 1460-62. 
Courts have held that:

    [t]he balancing of competing social and political interests 
affected by a proposed antitrust consent decree must be left, in the 
first instance, to the discretion of the Attorney General. The 
court's role in protecting the public interest is one of insuring 
that the government has not breached its duty to the public in 
consenting to the decree. The court is required to determine not 
whether a particular decree is the one that will best serve society, 
but whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\9\ In 
making its public interest determination, a district court must accord 
due respect to the United States' prediction as to the effect of 
proposed remedies, its perception of the market structure, and its 
views of the nature of the case. SBC Commc'ns, 2007 WL 1020746, at *16 
(United States entitled to ``deference'' as to ``predictions about the 
efficacy of its remedies''); United States v. Archer-Daniels-Midland 
Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003).
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    \9\ Cf BNS, 858 F.2d at 464 (holding that the court's ``ultimate 
authority under the [APPA] is limited to approving or disapproving 
the consent decree''); United States v. Gillette Co., 406 F. Supp. 
713, 716 (D. Mass. 1975) (noting that, in this way, the court is 
constrained to ``look at the overall picture not hypercritically, 
nor with a microscope, but with an artist's reducing glass''), aff'd 
sub nom. Maryland v. United States, 460 U.S. 1001 (1983). See 
generally Microsoft, 56 F.3d at 1461 (discussing whether ``the 
remedies [obtained in the decree are] so inconsonant with the 
allegations charged as to fall outside of the `reaches of the public 
interest' '').

    Court approval of a final judgment requires a standard more 
flexible and less strict than the standard required for a finding of 
liability. ``[A] proposed decree must be approved even if it falls 
short of the remedy the court would impose on its own, as long as it 
falls

[[Page 33360]]

within the range of acceptability or is `within the reaches of public 
interest.' '' United States v. AT&T Co., 552 F. Supp. 131, 151 (D.D.C. 
1982) (citations omitted) (quoting Gillette, 406 F. Supp. at 716); see 
also United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. 
Ky. 1985) (approving the consent decree even though the court would 
have imposed a greater remedy). To meet this standard, the United 
States ``need only provide a factual basis for concluding that the 
settlements are reasonably adequate remedies for the alleged harms.'' 
SBC Commc'ns, 2007 WL 1020746, at *16.
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the Court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that ``the court is only authorized to review the 
decree itself,'' and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States did not pursue. Id. 
at 1459-60. As this Court recently confirmed in SBC Communications, 
courts ``cannot look beyond the complaint in making the public interest 
determination unless the complaint is drafted so narrowly as to make a 
mockery of judicial power.'' SBC Commc'ns, 2007 WL 1020746, at *14.
    In its 2004 amendments to the Tunney Act, Congress made clear its 
intent to preserve the practical benefits of utilizing consent decrees 
in antitrust enforcement, adding the unambiguous instruction 
``[n]othing in this section shall be construed to require the court to 
conduct an evidentiary hearing or to require the court to permit anyone 
to intervene.'' 15 U.S.C. 16(e)(2). This language codified the intent 
of the original 1974 statute, expressed by Senator Tunney in the 
legislative history: ``[t]he court is nowhere compelled to go to trial 
or to engage in extended proceedings which might have the effect of 
vitiating the benefits of prompt and less costly settlement through the 
consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of 
Senator Tunney). Rather, the procedure for the public interest 
determination is left to the discretion of the court, with the 
recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 2007 WL 1020746, at *9.\10\
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    \10\ United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. 
(CCH) ] 61,508, at 71,980 (W.D. Mo. 1977) (``[T]he Court, in making 
its public interest finding, should * * * carefully consider the 
explanations of the government in the competitive impact statement 
and its responses to comments in order to determine whether those 
explanations are reasonable under the circumstances.'').
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VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

    Dated: May 31, 2007.

    Respectfully submitted,

For Plaintiff

Jill A. Ptacek (WA Bar <greek-i>18756),

Trial Attorney, U.S. Department of Justice, Antitrust Division, 
Transportation, Energy & Agriculture Section, 325 7th Street, NW., 
Suite 500, Washington, DC 20004, Telephone: (202) 307-6607, 
Facsimile: (202) 307-2784.
[FR Doc. 07-2897 Filed 6-14-07; 8:45 am]
BILLING CODE 4410-11-M