EX-10(X)



 






Exhibit 10(x)




AMENDED AND RESTATED

EXCLUSIVE AGENCY AND

MARKETING AGREEMENT




by and between




MONSANTO COMPANY




and




THE SCOTTS COMPANY




SEPTEMBER 30, 1998




 









 







TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 1- DEFINITIONS AND RULES OF CONSTRUCTION	 	 	2	 
	 
	 	Section 1.1.	 	Definitions	 	 	2	 
	 
	 	Section 1.2.	 	Rules of Construction and Interpretation	 	 	10	 
	ARTICLE 2 - EXCLUSIVE AGENCY AND DISTRIBUTORSHIP	 	 	10	 
	 
	 	Section 2.1.	 	Appointment of the Exclusive Agent	 	 	10	 
	 
	 	Section 2.2.	 	The Agent’s Obligations and Standards	 	 	11	 
	 
	 	Section 2.3	 	Appointment of Sub-Agents and Sub-Distributors	 	 	15	 
	 
	 	Section 2.4	 	Limitations on Agent	 	 	15	 
	ARTICLE 3 - ACCOUNTING AND CASH FLOW FOR THE ROUNDUP L&G BUSINESS	 	 	16	 
	 
	 	Section 3.1.	 	Bookkeeping and Financial Reporting	 	 	16	 
	 
	 	Section 3.2.	 	Ordering, Invoicing and Cash Flow Cycle	 	 	17	 
	 
	 	Section 3.3.	 	Expenses and Allocation Rules	 	 	18	 
	 
	 	Section 3.4.	 	Resolution of Disputes Arising under Article 3	 	 	19	 
	 
	 	Section 3.5.	 	Fixed Contribution to Expenses	 	 	20	 
	 
	 	Section 3.6.	 	Commission	 	 	21	 
	 
	 	Section 3.7.	 	Marketing Fee	 	 	23	 
	 
	 	Section 3.8.	 	Additional Commission	 	 	23	 
	ARTICLE 4 - ROUNDUP L&G BUSINESS MANAGEMENT STRUCTURE	 	 	25	 
	 
	 	Section 4.1.	 	Underlying principles for the Roundup L&G Business Management Structure	 	 	25	 
	 
	 	Section 4.2.	 	Steering Committee	 	 	26	 
	 
	 	Section 4.3.	 	Business Units	 	 	27	 






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	 	 	 	 	 	 	Page	 
	 
	 	Section 4.4.	 	Global Support Team	 	 	28	 
	ARTICLE 5 - DUTIES AND OBLIGATIONS OF MONSANTO	 	 	29	 
	 
	 	Section 5.1.	 	Monsanto’s Obligations and Rights	 	 	29	 
	 
	 	Section 5.2.	 	Warranties	 	 	30	 
	ARTICLE 6 - REPORTS AND ADDITIONAL OBLIGATIONS OF THE PARTIES	 	 	30	 
	 
	 	Section 6.1.	 	Cooperation	 	 	30	 
	 
	 	Section 6.2.	 	Use of EDI	 	 	30	 
	 
	 	Section 6.3.	 	The Agent’s Systems and Reporting Obligation	 	 	30	 
	 
	 	Section 6.4.	 	Employee Incentives	 	 	31	 
	 
	 	Section 6.5.	 	Insurance	 	 	31	 
	 
	 	Section 6.6.	 	Liens	 	 	31	 
	 
	 	Section 6.7.	 	Promoting Safe Use-Practices	 	 	32	 
	 
	 	Section 6.8.	 	Monsanto Inspection Rights	 	 	32	 
	 
	 	Section 6.9.	 	Recalls	 	 	32	 
	 
	 	Section 6.10.	 	New Roundup Products	 	 	32	 
	 
	 	Section 6.11.	 	Confidentiality	 	 	33	 
	 
	 	Section 6.12.	 	Noncompetition	 	 	33	 
	 
	 	Section 6.13.	 	Industrial Property	 	 	35	 
	 
	 	Section 6.14.	 	Conflicts of Interest	 	 	36	 
	 
	 	Section 6.15.	 	Records Retention	 	 	37	 
	ARTICLE 7 - CENTRAL AGREEMENTS	 	 	37	 
	 
	 	Section 7.1.	 	Acknowledgment of Central Agreements	 	 	37	 
	 
	 	Section 7.2.	 	Notice of Termination	 	 	37	 
	 
	 	Section 7.3.	 	Conflict	 	 	37	 






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	 	 	 	 	 	 	Page	 
	 
	 	Section 7.4.	 	Action by Parties and Assignment of Rights	 	 	37	 
	ARTICLE 8 - REPRESENTATIONS, WARRANTIES, AND COVENANTS	 	 	38	 
	 
	 	Section 8.1.	 	The Agent’s Representations and Warranties	 	 	38	 
	 
	 	Section 8.2.	 	Monsanto’s Representations and Warranties	 	 	39	 
	ARTICLE 9 - INDEMNIFICATION	 	 	39	 
	 
	 	Section 9.1.	 	Indemnification and Claims Procedure	 	 	39	 
	ARTICLE 10 - TERMS, TERMINATION, AND FORCE MAJEURE	 	 	41	 
	 
	 	Section 10.1.	 	Terms	 	 	41	 
	 
	 	Section 10.2.	 	EU Initial Term and Renewal	 	 	41	 
	 
	 	Section 10.3.	 	Procedure to Renew	 	 	41	 
	 
	 	Section 10.4.	 	Termination by Monsanto	 	 	41	 
	 
	 	Section 10.5.	 	Termination by the Agent	 	 	48	 
	 
	 	Section 10.6.	 	Roundup Sale	 	 	49	 
	 
	 	Section 10.7.	 	Effect of Termination	 	 	49	 
	 
	 	Section 10.8.	 	Force Majeure	 	 	50	 
	 
	 	Section 10.9.	 	Special Termination Provisions	 	 	50	 
	ARTICLE 11 - MISCELLANEOUS	 	 	52	 
	 
	 	Section 11.1.	 	Relationship of the Parties	 	 	52	 
	 
	 	Section 11.2.	 	Interpretation in accordance with GAAP	 	 	52	 
	 
	 	Section 11.3.	 	Currency	 	 	52	 
	 
	 	Section 11.4.	 	Monsanto Obligations	 	 	53	 
	 
	 	Section 11.5.	 	Expenses	 	 	53	 
	 
	 	Section 11.6.	 	Entire Agreement	 	 	53	 
	 
	 	Section 11.7.	 	Modification and Waiver	 	 	53	 






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	 	 	 	 	 	 	Page	 
	 
	 	Section 11.8.	 	Assignment	 	 	53	 
	 
	 	Section 11.9.	 	Notices	 	 	54	 
	 
	 	Section 11.10.	 	Severability	 	 	55	 
	 
	 	Section 11.11.	 	Equal Opportunity	 	 	55	 
	 
	 	Section 11.12.	 	Governing Law	 	 	55	 
	 
	 	Section 11.13.	 	Public Announcements	 	 	56	 
	 
	 	Section 11.14.	 	Counterparts	 	 	56	 






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LIST OF EXHIBITS



Exhibit A:       Central Agreements

Exhibit B:       Termination Notice Regarding Central Agreements

Exhibit C:       Letter Agreement Regarding Plastid Transformation Technology and Associated Genes

Exhibit D:       Permitted Products




LIST OF SCHEDULES




	 	 	 	 	 
	 

	 	Schedule 1.1(a):
	 	Included Markets
	 

	 	Schedule 1.1(b):
	 	Roundup Products
	 

	 	Schedule 2.2(a)(ii):
	 	Transition Services (to be provided)
	 

	 	Schedule 2.2(a):
	 	Annual Business Plan Format
	 

	 	Schedule 3.1:
	 	Services Outside North America (to be provided)
	 

	 	Schedule 3.2(d):
	 	Cash Flow Chart
	 

	 	Schedule 3.3(c):
	 	Income Statement Definitions and Allocation Methods
	 

	 	Schedule 3.8:
	 	Current Sales of 2.5 Gallon SKU into the Lawn & Garden Channels
	 

	 	Schedule 4.1(a):
	 	Management Structure
	 

	 	Schedule 4.2(a):
	 	Steering Committee
	 

	 	Schedule 4.3(b):
	 	Assigned Employees
	 

	 	Schedule 4.4(a):
	 	Global Support Team






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AMENDED AND RESTATED

EXCLUSIVE AGENCY AND

MARKETING AGREEMENT




     THIS AMENDED AND RESTATED EXCLUSIVE AGENCY AND MARKETING AGREEMENT by and between Monsanto
Company, a Delaware corporation (“Monsanto”), and The Scotts Company, an Ohio corporation (the
“Agent”), shall be deemed effective as of September 30, 1998, and amended and restated as of
November 11, 1998, and shall supersede in its entirety the previous such agreement between the
parties hereto, dated as of September 30, 1998. Monsanto and the Agent are some times referred to
herein as the “parties.”



WITNESSETH:




     WHEREAS, Monsanto is engaged in the research, development, and commercialization of certain
agricultural products;



     WHEREAS, Monsanto has developed and sells Roundup Products (as defined below) and is the
exclusive owner of all rights, patents, licenses, and trademarks associated therewith, and
possesses the knowledge, know-how, technical information, and expertise regarding the process and
manufacture of Roundup Products;



     WHEREAS, the Agent has certain expertise in the promotion, distribution, marketing, and sale
of home and garden products;



     WHEREAS, except to the extent that Central (as defined below) remains a nonexclusive agent and
distributor of Roundup Products prior to the termination of the Central Agreements (as defined
below), Monsanto does not currently possess, nor desire to establish, a distribution system for
Roundup Products;



     WHEREAS, the Agent’s distribution system is well-suited for the promotion, distribution,
marketing, and sale of Roundup Products;



     WHEREAS, Monsanto desires that the Agent serve as Monsanto’s exclusive agent for the marketing
and distribution of Roundup Products, and the Agent desires to so serve, all on the terms set forth
in this Agreement; and



     NOW, THEREFORE, in consideration of the foregoing, the terms and provisions contained herein,
and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:



 









 




ARTICLE 1 — DEFINITIONS AND RULES OF CONSTRUCTION




     Section 1.1. Definitions. As used herein, the following terms shall have the meanings
ascribed to them below:



     “Acquiror” shall have the meaning as set forth in the definition of a “Change of Significant
Ownership.”



     “Affiliate” of a person or entity shall mean: (i) any other person or entity directly, or
indirectly through one or more intermediaries, controlling, controlled by, or under common control
with such person or entity, (ii) any officer, director, partner, member, or direct or indirect
beneficial owner of any 10% or greater of the equity or voting interests of such person or entity,
or (iii) any other person or entity for which a person or entity described in clause (ii) acts in
such capacity.



     “Agent” means The Scotts Company, an Ohio corporation.



     “Ag Market” means professionals who purchase and use Roundup Ag Products for Ag, professional
and industrial uses.



     “Annual Business Plan” shall have the meaning set forth in Section 2.2(a) hereof.



     “Approved Expense” shall have the meaning set forth in Section 3.3(a) hereof.



     “Allocated” means allocated pursuant to the Allocation Rules set forth in Schedule 3.3(c)
hereof.



     “Assigned Employees” shall have the meaning set forth in Section 4.3(b) hereof.



     “ Budget” shall have the meaning set forth in Section 3.3(a) hereof.



     “Business Unit” shall have the meaning set forth in Section 4.3(a).



     “Central” means Central Garden & Pet Company, a Delaware corporation.



     “Central Agreements” means collectively, that certain Master Agreement by and between The
Solaris Group (“Solaris”), a strategic business unit of Monsanto, and Central, dated as of July 21,
1995; that certain Exclusive Agency and Distributor Agreement by and between Solaris and Central,
dated as of July 21, 1995; that Compensation Agreement by and between Solaris and Central, dated as
of July 21, 1995; that Implementation and Transition Agreement by and between Solaris and Central,
dated as of July 21, 1995.



     “Change of Control” means, with respect to a Person, (i) the acquisition after the date hereof
by any individual (or group of individuals acting in concert), corporation, company,



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association, joint venture or other entity, of beneficial ownership of 50% or more of the
voting securities of such Person; or (ii) the consummation by such Person of a reorganization,
merger or consolidation, or exchange of shares or sale or other disposition of all or substantially
all of the assets of such Person, if immediately after giving effect to such transaction the
individuals or entities who beneficially own voting securities immediately prior to such
transaction beneficially own in the aggregate less than 50% of such voting securities immediately
following such transaction excluding the merger or similar transaction currently contemplated
between Monsanto and American Home Products; or (iii) the consummation by such Person of the sale
or other disposition of all or substantially all of the assets of such Person other than to an
Affiliate of such Person; or (iv) the consummation by such Person of a plan of complete liquidation
or dissolution of such Person.




     “Change of Significant Ownership” means, with respect to a Person, (i) the acquisition (by
purchase, reorganization, merger, consolidation, exchange of shares, or otherwise), by any
individual (or group of individuals acting in concert), corporation, company, association, joint
venture, or other entity (collectively, the “Acquiror”), but excluding any member of the Hagedorn
family or their respectively controlled entities, of beneficial ownership of 25% or more of the
voting securities of such Person; and (ii) such Acquiror (A) currently engages (directly or
through its Affiliates) in the manufacture, sale, marketing, or distribution of any product
containing Glyphosate or any similar active ingredient, or (B) currently sells, markets, or
distributes (directly or through its Affiliates) any product(s) in the Lawn and Garden Channels for
Lawn and Garden Use, which such product(s), in Monsanto’s reasonable commercial opinion, compete in
a material manner with Roundup Products, or (C) may, in Monsanto’s reasonable commercial opinion,
materially detract from, or diminish, the Agent’s ability to fulfill its duties and obligations
with regard to the Roundup Business, or (D) competes in any material respect with Monsanto in
Monsanto’s “Ag” (including seed) or biotech businesses.



     “Commission” shall have the meaning set forth in Section 3.6(a) hereof.



     “Commission Statement” means, for any given Program Year, the statement prepared by the Agent
on behalf of Monsanto pursuant to Section 3.6(c) detailing Program EBIT and the amount of the
Commission for such Program Year.



     “Conflict” shall have the meaning set forth in Section 7.1 hereof.



     “Conflicting Provision” shall have the meaning set forth in Section 7.3 hereof.



     “Contribution Payment” shall have the meaning set forth in Section 3.5(a) hereof.



     “Cost of Goods Sold” means, for any given Program Year, the aggregate cost, as determined in
accordance with GAAP applied on a consistent basis, of Roundup Products sold for such Program Year;
provided, however, in computing this amount, the cost of Glyphosate, which is a component of this
Cost of Goods Sold, shall equal the amount set forth in the Transfer Price, for such Program Year.



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     “Customers” means, with respect to the Included Markets, any Lawn and Garden Channel purchaser
of Roundup Products for resale to the Lawn and Garden Market.



     “EDI” means electronic data interchange.



     “Effective Date” means September 30, 1998.



     “Egregious Injury” means the occurrence of an event (caused directly or indirectly by an act
or omission of the Agent, its officers, directors, or Affiliates), that in Monsanto’s reasonable
commercial opinion, has a material adverse effect on the Roundup L&G Business, the Roundup brand or
the agricultural Roundup market; provided, however, no such event shall be deemed to be an
Egregious Injury if such event (or the act or omission resulting in such event) resulted from the
exercise by Monsanto’s Ag president of his or her right of veto, or was caused primarily by an act
or omission of Monsanto or its Affiliates, and such result or causal link, as the case may be,
shall be demonstrated by the Agent.



     “EU Countries” means each country belonging (by treaty or otherwise) to the world organization
commonly known as the European Union.



     “EU Term” shall have the meaning set forth in Section 10.1 hereof.



     “Event of Default” shall have the meaning set forth in Section 10.4(b) hereof.



     “Excluded Markets” means each country not expressly set forth in the Included Markets.



     “Expense(s)” shall mean any expense or cost, direct or Allocated, incurred by either party in
connection with the Roundup L&G Business, including (i) general, marketing, administrative and
technical costs or expenses which shall include (a) 50% of the Allocated cost of the salary and
bonus of the members of the Global Support Team, (b) 100% of the Allocated cost of the salary and
bonus of the Assigned Employees and (c) the Allocated portion of the salary and bonus of the
employees of Agent’s Business Units to the extent such employees are working on matters related to
the Roundup L&G Business, (ii) service costs directly related to the Roundup L&G Business,
including any expenses due under the Central Agreement, and (iii) any capital expenses approved by
the Steering Committee.



     “FIFRA” means the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.A. §135, et
seq., as amended.



     “Formulation Agreement” means that certain Formulation Agreement by and between Monsanto and
the Agent for the manufacture and packaging by the Agent of Roundup Products solely for North
America to be entered by the parties upon closing of the sale of the Non-Roundup Assets.



4









 




     “GAAP” means generally accepted accounting principles as applied as of the Effective Date, as
referred to in paragraphs 10 and 11 of the American Institute of Certified Public Accountants
Statement on Auditing Standards No. 69.



     “Global Support Team” shall have the meaning set forth in Section 4.4(a) hereof.



     “Glyphosate” means N-phosphonomethylglycine in any form, including, but not limited to its
acids, esters, and salts.



     “Import Price” means an amount within $0.75 of the weighted average import statistics price on
approved Glyphosate, expressed in U.S. Dollars per kg of Glyphosate acid equivalent 100%; provided,
however, if such statistic is not available for a particular country within the Included Markets,
then the amount shall be within $0.75 of the weighted average price on approved Glyphosate for
Argentina, plus such additional amounts which Monsanto reasonably determines to equal all
additional costs which it would otherwise incur to import Glyphosate to such country (including,
without limitation, import duties, shipping, and broker fees).



     “Included Markets” means each country listed on Schedule 1.1(a); provided, however, Schedule
1.1(a) may be amended from time to time in the reasonable discretion of the Steering Committee,
upon either the Agent, Monsanto, or the Global Support Team proposing to the Steering Committee
such terms and conditions of amendment, including a proposed (i) term (i.e., duration of
amendment), (ii) adjustment to the calculation for the Commission, and (iii) adjustment to the
Commission Thresholds, provided, however, the proposal for inclusion of a new country demonstrates,
in the reasonable opinion of the Steering Committee (x) the existence of, or the potential for, a
distinct and profitable Lawn & Garden market, (y) the value added by the Agent in terms of sales
and distribution network and synergies, and (z) the lack of adverse impact on Monsanto’s existing
agricultural Roundup market.



     “Income Taxes” means federal, state, local, or foreign taxes imposed on net income or profits;
provided, however, such term shall not include any “sales or use” taxes or “ad valorem” taxes (as
such terms are customarily used) imposed on or resulting from the sale of Roundup Products.



     “Industrial Property” shall have the meaning set forth in Section 6.14 hereof.



     “Insolvency” of the Agent means that the Agent is generally not paying its debts as they
become due, or admits in writing its inability to pay its debts generally, or makes a general
assignment for the benefit of creditors or institutes any proceeding or voluntary case seeking to
adjudicate it a bankrupt or insolvent or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief or protection of debtors, or seeks
the entry of any order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property; or the Agent takes any action
to authorize any of the actions described above in this definition, or any proceeding is instituted
against the Agent



5









 




seeking to adjudicate it a bankrupt or insolvent or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief or protection of debtors, or seeking
the entry of an order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property, and, as to any such
proceeding, if being contested by the Agent in good faith, such proceedings remain undismissed or
unstayed for a period of sixty (60) days.




     “Lawn and Garden Channels” include: (i) retail outlets primarily serving the Lawn and Garden
Market; (ii) independent nurseries and hardware co-ops; (iii) home centers (like Home Depot or
Lowes); (iv) mass merchants (like Wal-Mart or K-Mart); (v) membership/warehouse clubs serving the
Lawn and Garden Market; and (vi) other current or future channels of trade generally accepted and
practiced as Lawn and Garden channels in the industry as may be determined from time to time by the
Steering Committee.



     “Lawn and Garden Employee” shall have the meaning set forth in Section 6.13(e).



     “Lawn and Garden Market” means non-professionals who purchase and use Roundup Products for
Lawn and Garden Uses.



     “Lawn and Garden Use” means (a) Residential Use as defined in 40 C.F.R. 152.3(u), and (b) any
use for which a pesticide can be registered for use under FIFRA or other statutes, rules and
regulations throughout the Included Markets in connection with vegetation control in, on or around
homes, residential lawns, and residential gardens.



     “Laws” shall mean, with respect to any country, such country’s statutes, regulations, rules,
ordinances, or all other applicable laws.



     “MM” means after each number million in U.S. Dollars.



     “Marketing Fee” shall have the meaning as set forth in Section 3.7 hereof.



     “MAT Expenses” means the expenses related to the Roundup L&G Business specified as such in
Schedule 3.3(c).



     “Material Breach” shall mean:



          (a) as to the Agent, a breach of this Agreement, which, as initially determined by Monsanto,
with the written agreement of the Agent, or as determined by the Arbitrators pursuant to Section
10.4(g) of this Agreement: (i) is material; (ii) has not been cured within ninety (90) days after
written notice thereof has been provided to Agent in accordance with Section 11.9 hereof; and (iii)
is not remediable either by the payment of damages by Agent to Monsanto or by a decree of specific
performance issued against Agent.




6









 







          (b) as to Monsanto, a breach of this Agreement, which, as initially determined by Agent, with
the written agreement of Monsanto, or as determined by the Arbitrators pursuant to Section 10.4(g)
of this Agreement: (i) is material; (ii) has not been cured within ninety (90) days after written
notice thereof has been provided to Monsanto in accordance with Section 11.9 hereof; and (iii) is
not remediable either by the payment of damages by Monsanto to Agent or by a decree of specific
performance issued against Monsanto.




     “Material Fraud” shall mean:



          (a) as to Agent, one or more fraudulent acts or omissions committed by Agent or its officers
or employees, which, as initially determined by Monsanto, with the written agreement of the Agent,
or as determined by the Arbitrators pursuant to Section 10.4(g) of this Agreement: (i) is material;
(ii) was engaged in with the intent to deceive Monsanto; and (iii) either a) has not been cured
within ninety (90) days after written notice thereof has been provided to Agent in accordance with
Section 11.9 hereof, or b) cannot be cured in the commercially reasonable opinion of Monsanto, and,
if applicable, the Arbitrators.




          (b) as to Monsanto, one or more fraudulent acts or omissions committed by Monsanto or its
officers or employees, which, as initially determined by Agent, with the written agreement of
Monsanto, or as determined by the Arbitrators pursuant to Section 10.4(g) of this Agreement: (i) is
material; (ii) was engaged in with the intent to deceive Agent; and (iii) either a) has not been
cured within ninety (90) days after written notice thereof has been provided to Monsanto in
accordance with Section 11.9 hereof, or b) cannot be cured in the commercially reasonable opinion
of Agent, and, if applicable, the Arbitrators.




     “Material Willful Misconduct” shall mean:



          (a) as to Agent, one or more acts or omissions committed by Agent or its officers or
employees, which, as initially determined by Monsanto, with the written agreement of the Agent, or
as determined by the Arbitrators pursuant to Section 10.4(g) of this Agreement: (i) is material;
(ii) constitutes willful misconduct; and (iii) either a) has not been cured within ninety (90) days
after written notice thereof has been provided to Agent in accordance with Section 11.9 hereof, or
b) cannot be cured in the commercially reasonable opinion of Monsanto, and, if applicable, the
Arbitrators.




          (b) as to Monsanto, one or more acts or omissions committed by Monsanto or its officers or
employees, which, as initially determined by Agent, with the written agreement of Monsanto, or as
determined by the Arbitrators pursuant to Section 10.4(g) of this Agreement: (i) is material; (ii)
constitutes willful misconduct; and (iii) either a) has not been cured within ninety (90) days
after written notice thereof has been provided to Monsanto in accordance with Section 11.9 hereof,
or b) cannot be cured in the commercially reasonable opinion of Agent, and, if applicable, the
Arbitrators.




7









 







     “Monsanto” means Monsanto Company, a Delaware corporation.



     “Netbacks” means the expenses related to the Roundup L&G Business specified as such in
Schedule 3.3(c).



     “Net Commission” shall have the meaning set forth in Section 3.5(b) hereof.



     “New Product” shall have the meaning set forth in Section 6.11 hereof.



     “Non-Roundup Assets” means the Lawn and Garden business of the Solaris division of Monsanto,
comprised of all products other than the Roundup Products being sold separately to the Agent by
Monsanto.



     “North America” means the United States of America, Canada and Puerto Rico.



     “Person” means an individual, partnership, limited liability company, joint venture,
association, corporation, trust, or any other legal entity.



     “Prime Rate” means, on any given date, the prime rate as published in the Wall Street
Journal, for such date or, if not published therein, in another publication having national
distribution.



     “Product Offer” shall have the meaning set forth in Section 6.11 hereof.



     “Program EBIT” means, for any given Program Year, the amount of Program Sales Revenues for
such Program year, less the amount of Program Expenses for such Program Year, provided, however,
for purposes of determining the Agent’s Commission, (i) the amount of the Program EBIT for the 1999
Program Year (as otherwise determined herein) shall be increased by an amount equal to $15MM, (ii)
the portion of the aggregate amount representing product returns, inventory not salable in the
ordinary course of business, bad debts on trade accounts receivable or any other charge-offs of
trade or other receivables which in total exceeds $4MM for the Program Year 1999 shall not be part
of the Program Expenses for such Program Year, and (iii) any and all expenses with respect to any
Program Year prior to 1999 shall be excluded from Program Expenses for the 2000 Program Year and
thereafter, except to the extent any such item is fully reserved as of the Effective Date.



     “Program Expenses” means, for any given Program Year, applied on a consistent basis and in
accordance with GAAP and the terms of this Agreement, the sum (without duplication) of (i) the
aggregate Approved Expenses for such Program Year and (ii) the Cost of Goods Sold for such Program
Year.



     “Program Sales Revenue” means, for any given Program Year, applied on a consistent basis and
in accordance with GAAP, all revenues received or accrued by any party hereto from



8









 




the sale of Roundup Products, less reasonable amounts for returns and credits, consistent with past practice.




     “Program Year” means the period of time beginning on October 1st of a specific calendar year
and ending on September 30th of the immediately following calendar year, or such shorter period if
a particular Program Year starts or ends in the middle of such Program Year. For example, the
first Program Year during the term of this Agreement shall be the 1999 Program Year (i.e.,
commencing October 1, 1998 and ending September 30, 1999).



     “Quarter” means any consecutive three-month period of a calendar year.



     “Roundup L&G Business” means the marketing, sale, and distribution of Roundup Products through
Lawn and Garden Channels to the Lawn and Garden Market for Lawn and Garden Uses.



     “Roundup Bank Accounts” shall have the meaning set forth in section 3.2(d) hereof.



     “Roundup P&L” shall have the meaning set forth in Section 3.2(a) hereof.



     “Roundup Products” means (i) for each of the specific countries part of the Included Markets
the products registered for sale solely for Lawn and Garden Uses under a primary or alternate brand
now containing the Roundup or Ortho Kleeraway trademarks as listed on Schedule 1.1(d) attached
hereto in the specific container sizes and formulations described thereon, it being understood that
any change of container size or formulation in any given country part of the Included Markets shall
require the approval of the Steering Committee, and (ii) such products as may be added from time to
time by mutual agreement of the parties in accordance with the terms of this Agreement.



     “Roundup Records” shall have the meaning as set forth in Section 6.4 hereof.



     “Roundup Sale” means (i) any sale, transfer, assignment or other disposition of all or
substantially all of the assets or capital stock of the Roundup L&G Business or (ii) the license of
all or substantially all of the Industrial Property.



     “Sell-Through Business” means, with respect to any region, unit volume sales determined by
Program Year point-of-sale unit movement at those Customers for which measurable data on a
consistent basis is reasonably available and which (i) are among the top 20 Customers in such
region for each of the Program Years in question and (ii) provide measurable data on a consistent
basis for each of the Program Years in question. Such point-of-sale information shall be based on
census data gathered from such top 20 Customers and transmitted via electronic data interchange
(EDI) on a weekly reported basis.



     “Significant Deviation” shall have the meaning set forth in Section 4.3(c) hereof.



9









 




     “Steering Committee” shall have the meaning set forth in Section 4.1 hereof.



     “Transfer Price” equals, for any given Program Year, expressed in kg of Glyphosate acid on a
100% acid equivalent basis, the following amounts:



          Program Years 1999-2001: Transfer Price equals $6.65; and




          Program Year 2002 and each subsequent Program Year: Transfer Price equals the
Import Price.




     “USEPA” means the United States Environmental Protection Agency.



     Section 1.2. Rules of Construction and Interpretation.



          (a) Section References. When a reference is made in this Agreement to an Article, Section,
Paragraph, Exhibit or Schedule such reference shall be to an Article, Section or Paragraph of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated. Unless otherwise indicated,
the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement
as a whole, and not to any particular Article, Section, Paragraph or clause in this Agreement.




          (b) Construction. Unless the context of this Agreement clearly requires otherwise: (i)
references to the plural include the singular and vice versa, (ii) “including” is not limiting and
(iii) “or” has the inclusive meaning represented by the phrase “and/or.”




          (c) Headings. The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.




          (d) No Interpretation against Author. For purposes of contract interpretation the parties to
this Agreement agree they are joint authors and draftspersons of this Agreement.




          (e) Conflicts with related Documents. The parties contemplate that various forms, including
forms for submitting purchase orders, acceptance of orders, shipping and transportation, will be
used in carrying out this Agreement. In the event of conflict between any such forms or other
documents of like import and this Agreement, the provisions of this Agreement shall be controlling.




ARTICLE 2 — EXCLUSIVE AGENCY AND DISTRIBUTORSHIP




     Section 2.1. Appointment of the Exclusive Agent. Subject to the terms and conditions hereof,
Monsanto hereby appoints and agrees to use the Agent, and the Agent hereby agrees to serve, as
Monsanto’s exclusive agent in the Lawn and Garden Market, commencing on the Effective Date, to
provide certain services in connection with Monsanto’s marketing, sales, and distribution of
Roundup Products to Customers within the Included Markets. Except as



10









 




otherwise provided in this
Agreement, commencing on the Effective Date, Monsanto shall exclusively use the Agent for the
performance of all of the services contemplated by this Agreement.




     Section 2.2. The Agent’s Obligations and Standards.



          (a) Services to be Performed by the Agent.





	 	(i)	 	It is the anticipation of the parties that for the duration of
the term of the Central Agreements, Central and its subagents and
subdistributors will continue to perform its duties and obligations under the
Central Agreements, and Monsanto’s payments to Central for services provided by
Central, subagents and subdistributors with respect to the 1999 Program Year
only, under the Central Agreements as amended or renegotiated, it being the
intention of the parties to amend or terminate the Central Agreements prior to
the end of the 1999 Program Year, shall be included in the Expenses payable
under this Agreement.
	 
	 	(ii)	 	It is the understanding of the parties that the Agent currently
is not able to perform all or part of the services described hereunder and that
Monsanto shall perform such services, or have such services performed, during a
certain transition period which may vary according to region and service being
contemplated. Accordingly the parties agree to negotiate in good faith and
agree, within ninety (90) days from the date of this Agreement, on the terms
and conditions pursuant to which Monsanto shall continue to perform or have
performed on its behalf, all or part of the services referred to hereunder,
provided (x) Monsanto shall provide such services on a basis necessary to
service the Customer’s needs and in accordance with the Budget prescribed in
the 1999 Program Year Annual Business Plan, and (y) Monsanto shall be solely
responsible for any MAT Expenses in excess of the amount provided therefor in
such Budget incurred with respect to any such transition services wherever
performed. Upon agreement of the parties, such terms and conditions shall be
attached as Schedule 2.2(a)(ii) and shall be deemed to form a part of this
Agreement ab initio. Such Schedule 2.2(a)(ii) shall contain but not be limited
to, the allocation rules applicable in any such region, the prior written
notice to be given by the Agent to Monsanto prior to taking over the
performance of any given service, the amount of severance cost, if any, which
shall be shared by the Agent in case of termination of such Monsanto
employee(s) in charge of performing the service being terminated, the
obligations of each party with regard to data information, order processing and
invoicing, and the Agent’s right of audit.




11









 











          Notwithstanding the foregoing, and excluding any duties or obligations which Central continues
to perform for the duration of the Central Agreements or Monsanto during the above-mentioned
transition period, the Agent shall perform some or all of the following duties
and obligations within the parameters and to the extent required to implement the Annual
Business Plan approved by the Steering Committee:




               (1) Sales. Pursuant to the Annual Business Plan, the Agent shall perform selling, sales
management, and other services related to the sale of Roundup Products.



               (2) Merchandising and In-Facility Services. The Agent shall perform in-store merchandising,
store set-up, and other services related to the in-store promotion of Roundup Products.



               (3) Warehousing and Inventory.



                    (i) Warehousing. The Agent shall arrange for warehouse services for all Roundup Products
until such time as the products are delivered to proper carriers. The Agent agrees to comply with
all applicable environmental rules and regulations in owning or operating any warehouse.



                    (ii) Inventory. The Agent shall be responsible for:




	 	•	 	coordinating and staffing annual physical inventory for
all Roundup Products (including raw materials, packaging-
when the Agent shall formulate under the Formulation
Agreement- and finished goods). Physical inventories shall
be conducted by September 30 of every calendar year and
Monsanto shall have the right to request physical counts on
specific product at any time upon reasonable request (which
shall be at Monsanto’s cost if there are more than two such
counts in any Program Year) and to observe or conduct
physical counts with Monsanto’s representatives;
	 
	 	•	 	reconciling the physical inventory to perpetual records;
	 
	 	•	 	physically moving the Roundup Products out of the
warehouse by following a First In, First Out (“FIFO”)
policy; and
	 
	 	•	 	arranging for warehousing of adequate inventory levels of
Roundup Products in sufficient quantities to satisfy the
criteria set forth in the Annual Business Plan.




12









 











               (4) Order and General Administration. The Agent shall have the authority and shall so perform
all order taking, order processing, invoicing, collection, reconciliation, general administration,
and other related services necessary for the marketing, sales, and distribution of Roundup
Products, all of which shall be subject to the Annual Business
Plan and the terms of this Agreement. Pursuant to the terms of this Agreement, the Agent
shall be responsible for the following obligations:



                    (i) The Agent shall offer to the Customers Roundup Products at such price and under such terms
as set forth in the Annual Business Plan or as otherwise established by the Steering Committee.



                    (ii) The Agent shall accept orders for the sale of Roundup Products; provided, however, the
Agent shall accept all such orders subject to the availability of Roundup Products on the requested
delivery dates.



                    (iii) The Agent shall administer all claims and adjustments for Roundup Products which are
damaged during shipment or warehousing.



                    (iv) Subject to Section 5.1, the Agent shall (i) maintain or contract for adequate facilities
and technologies to manage consumer information and complaint calls or written correspondence and
(ii) be responsible for all reports relating thereto, including (without limitation) reports to any
regulatory or governmental authority pursuant to any applicable Law.



               (5) Returns of Roundup Products. The Agent shall manage requests by Customers that Roundup
Products, previously sold or shipped, should be returned for credit, either because such Roundup
Products are defective or for some other reason. The Agent shall receive any such returned Roundup
Products into its warehouses and prepare the appropriate credit memos, subject to the joint
approval of the Business Unit and the Global Support Team for any return exceeding $500,000.



               (6) Information on Roundup Products and Consumer Inquiries. The Agent shall provide Customers
or potential customers with detailed information concerning the characteristics, uses and
availability of Roundup Products as shall be supplied by the Global Support Team. The Agent shall
be responsible for maintaining a consumer response center relating to Roundup Products; provided
that, unless the Business Unit and the Global Support Team otherwise agree, any human and
animal-related health calls shall be automatically or via operator forwarded, with respect (i) to
human emergency calls to the Cardinal Glennon Poison Control Center and (ii) to animal emergency
calls to the National Animal Poison Control Center.



               (7) Promotion of Roundup Products. Continuously throughout the term of this Agreement, the
Agent shall promote the sale of Roundup Products no less aggressively than any other product or
product line that the Agent sells and shall perform its



13









 





duties as Agent in such a manner as to
promote goodwill, and particularly customer goodwill, toward Monsanto and Roundup Products.




               (8) Advertising and Promotional Programs to Customers. The Agent shall provide Customers with
detailed information concerning the advertising and
promotional programs of Roundup Products and facilitate the use by its Customers of such
programs to the fullest extent possible (as set forth in the Annual Business Plan).



               (9) Roundup Brand Image and Stewardship. The Agent, in consultation with the Global Support
Team, shall promote, in accordance with the Annual Business Plan or as directed by the Steering
Committee, the sales and consumer acceptance of Roundup Products using messages and vehicles that
are not inconsistent with the brand image established by Monsanto’s Ag division in support of its
Roundup branded products and seeds, including but not limited to:



                    (i) Advertising in local and national media;



                    (ii) Providing suitable training of the Agent’s representatives or employees in the areas of
product knowledge, product stewardship, sales training, display techniques, promotion and
advertising;



                    (iii) Determining the description of consumer and trade communication programs to Customers
regarding the sales and distribution of Roundup Products; and



                    (iv) The handling of product complaints with the intent of achieving consumer satisfaction.



               (10) Retail Relationships. The Agent shall maintain retail relationships between the Agent
and the Customers, including relationships at headquarters and regional stores.



               (11) Merchandising and Display Techniques. The Agent shall provide Customers with full
information concerning the merchandising and display techniques as set forth in the Annual Business
Plan. The Agent shall use, fully support and recommend, that Customers fully utilize all such
merchandising and display techniques.



               (12) Annual Business Plan. The Business Units, jointly and in cooperation with the Global
Roundup Support Team, shall, prepare and deliver to the Steering Committee (i) a preliminary draft
for the annual business plan no later than June 15 of each Program Year and (ii) a definitive
version thereof no later than September 15 of each Program Year (the “Annual Business Plan”), which
establishes the general marketing, distribution, sales information, and specifications of Roundup
Products for such Program Year (or shorter period, if applicable) including the Agent’s short and
long-term sales goals with respect to Roundup



14









 





Products for such Program Year, and more specifically
all of the items listed on Schedule 2.2(a). Notwithstanding the foregoing, for the 1999 Program
Year, the parties shall have sixty (60) days to agree to the detailed costs and sales components of
the Annual Business Plan. Upon approval by the Steering Committee, the Annual Business Plan shall
serve as the Agent’s parameters for implementing the day-to-day operation of the Roundup Business;
any Significant Deviations from such Annual Business Plan shall require the prior approval of the
Steering Committee unless already approved by the Global Support Team and the Business Unit
pursuant to Section 4.2.(c ).




               (13) Additional Actions. The Agent shall perform such additional actions, consistent with
this Agreement, as directed by the Steering Committee, to implement any Significant Deviations from
the Annual Business Plans.



          (b) Employee Performance Standards. The Annual Business Plan shall set forth the employee
performance standards required in the parties’ opinion to promote the achievement of the income
targets for the Roundup L&G Business in each given Program Year. The Annual Business Plan shall
also specify the impact which the failure to meet such performance standards may have on the
incentive schemes and bonus plans of the individual members of the Global Support Team and those
employees who are part of the Business Units in charge of the Roundup L&G Business.




     Section 2.3 Appointment of Sub-Agents and Sub-Distributors. The Agent shall have the right to
delegate part of its obligations under this Article 2 to sub-agents and sub-distributors; provided,
however, the Agent shall remain primarily liable for all of its obligations hereunder and shall be
primarily liable for any act or omission of any such sub-agent or sub-distributor. To the extent
this Agreement creates any obligations on the Agent, such obligations shall apply with respect to
any sub-agents or sub-distributors, as the case may be. In connection with the foregoing, any
reports or other information to be given to Monsanto shall be given by the Agent and shall include
any information applicable to sub-agents or sub-distributors, as the case may be. Notwithstanding
the foregoing, the Steering Committee shall have the exclusive right to approve the appointment or
termination of any sub-agent or sub-distributor and the terms of any sub-agency or
sub-distributorship agreement (including any change or amendment thereto).



     Section 2.4 Limitations on Agent. Notwithstanding anything in this Agreement to the contrary,
the Agent shall not, without the written consent of the Steering Committee, take (or initiate) any
of the following actions:



          (a) Sell Roundup Products at a price or under terms not permitted under the Annual Business
Plan;




          (b) Possess or use any property of Monsanto, except to the extent necessary for Agent to
perform its duties and obligations hereunder (e.g., in-store displays);




15









 








          (c) Hold itself out as authorized to make on behalf of Monsanto any oral or written warranty
or representation regarding Roundup Products other than what is stated on the applicable Roundup
Products label or in other written material furnished to the Agent by Monsanto; or




          (d) Intentionally dilute, contaminate, adulterate, or substitute any Roundup Products or sell
any Roundup Products for which the indicated measure or any other information on the label is known
to the Agent to be grossly false, misleading, or inadequate.




ARTICLE 3 — ACCOUNTING AND CASH FLOW FOR THE ROUNDUP L&G BUSINESS




          The accounting and cash flow procedures and services described in this Article 3 are intended
to govern North America only, it being the understanding of the parties that different procedures
and services (including the terms thereof) are required in regions other than North America. In
addition, the parties understand and agree that the services described in this Article 3 with
respect to North America will continue to be provided by Monsanto until and unless the Agent
acquires the Non-Roundup Assets. Accordingly, the parties agree to negotiate in good faith and
agree, within ninety (90) days from the date of this Agreement, on the terms and conditions
pursuant to which Monsanto shall perform the services contemplated by this Article 3 in regions
other than North America. Upon agreement of the parties, such terms and conditions shall be
attached as Schedule 3.1 and shall be deemed to form a part of this Agreement ab initio. Until the
Agent assumes the performance of the services described in this Article 3 with respect to North
America and the services to be described in Schedule 3.1 with respect to all other regions,
Monsanto shall continue to provide the services contemplated by this Article 3 on a basis necessary
to service the Customers’ needs and in accordance with the Budget prescribed in the Annual Business
Plan for the 1999 Program Year, including the $35 MM cap on MAT Expenses.




     Section 3.1. Bookkeeping and Financial Reporting.



          (a) Bookkeeping. The Agent shall, on behalf of Monsanto, be responsible for all the
bookkeeping for the Roundup L&G Business, which shall include, but not be limited to, (i) setting
up a separate set of accounting records reflecting all the items of income, profit, gain, loss and
deduction with respect to the Roundup L&G Business, including a profit and loss statement (“Roundup
P&L”) and all other records relating to the Roundup L&G Business including sales invoices and
customer data (the “Roundup Records”) in accordance with the written set of accounting policies
(including the currency exchange methodology used by Monsanto) as shall be provided by Monsanto;
provided, that if any change in Monsanto’s accounting policies would adversely affect the Agent’s
Commission (other than in a de minimis amount), the parties shall negotiate in good faith to change
the thresholds and/or the Commission, as appropriate, to eliminate such adverse affect; (ii)
collecting, recording and safeguarding receipts of all receivables and payables, costs or expenses
either directly incurred by the Roundup L&G Business or Allocated thereto by either party pursuant
to the terms of Section




16









 






3.3 hereof. At all times, the Agent shall make available via computer
and/or original documentation, to the Assigned Employees designated by Monsanto continuous access
to the Roundup Records as appropriate on a need-to-know basis, such access shall include, but not
be limited to, daily sales updates.




          (b) Financial Reporting. The Agent shall provide to Monsanto monthly financial statements,
including (i) the Roundup P&L, balance sheet and cash flow statements, (ii) the Netback expense
detail (accruals and actuals), (iii) all other Expense detail (accruals and actuals), and (iv) Cost
of Goods Sold detail. Such monthly financial statements shall be provided
(i) in their preliminary form, no later than four (4) business days following the end of the
calendar month, and (ii) in their final form, together with an estimate of sales for the current
month, no later than six (6) business days following the end of the calendar month.




          (c) Audit. Monsanto shall have the right to periodically audit or have an independent
accountant audit, on Monsanto’s behalf, all the Roundup Records. The audit shall be at the cost of
Monsanto unless any material error has been committed by the Agent, in which case the Agent shall
bear the cost of the audit. Upon exercise of its right of audit, and discovery of any disputed
item, Monsanto shall provide written notice of dispute to the Agent. The parties shall resolve
such dispute in the manner set forth in Section 3.4 hereof.




     Section 3.2. Ordering, Invoicing and Cash Flow Cycle.



          (a) Ordering and Invoicing. The Agent shall perform, on behalf of Monsanto, all order taking,
order processing and invoicing for the Roundup Products, it being understood that orders filled for
Roundup Products shall be invoiced on the invoices used by the Agent for its other non-Roundup
products provided such invoices or their EDI version shall (i) identify the Agent as an agent for
Monsanto for the sale of all Roundup Products and Monsanto as the actual transferor of title to
Roundup Products; (ii) direct payment of such invoice to be made directly to the account designated
by the Agent; and (iii) include all taxes (other than Income Taxes), duties, and other charges
imposed by governmental authorities based on the production or sale of Roundup Products or their
ownership or transportation to the place and time of sale




          (b) Customer Remittances. Customers of Roundup Products shall be directed, as per the
invoices, to remit directly the invoiced amounts for all Roundup Products to the Agent’s designated
bank account.




          (c) Daily Receipts. On or before October 31, 1998, the parties shall determine, based on the
Program Year ending on September 30, 1998, the average daily pro rata share of Customers’
remittances for the purchase of Roundup Products versus the non-Roundup products sold by Monsanto
to said Customers during such period. Using said daily pro rata share, the Agent shall, on a daily
basis, remit to the account designated by Monsanto for such purposes, the estimated portion of
Customers’ remittances for the Roundup Products. At the end of each month, the Agent shall verify
the actual amount of the Customers’ remittances for the Roundup Products paid over the past month
and shall send to Monsanto a monthly reconciliation




17









 







statement, either with a check in the event the
actual amount exceeds the total daily prorated estimate paid out to Monsanto for such month or with
an adjustment request in the event the actual amount is below the total daily prorated estimate
paid out to Monsanto for such month. Customer payment deductions that do not initially, clearly
apply to Roundup Products shall not be withheld by the Agent from the daily remittances to
Monsanto. If the Agent subsequently determines any of such payment deductions apply to sales of
Roundup Products, the Agent shall be reimbursed therefor as part of the monthly cash
reconciliation. Monsanto and the Agent agree that general Customer payment deductions will be
prorated based on applicable sales, for which the Agent will also be
reimbursed in the monthly cash reconciliation. Any non-Roundup Product payment deductions, for
whatever reason, shall not be applied against Roundup Products.




          (d) Roundup Bank Accounts. Monsanto shall establish or use existing bank accounts (the
“Roundup Bank Accounts”) to serve as the bank accounts dedicated exclusively to the Roundup L&G
Business (i) for the receipt of Monsanto’s daily disbursements as described in Section 3.2(c), and
(ii) for making any and all payments incurred in connection with the Roundup L&G Business either as
direct Expenses of the Roundup L&G Business or as reimbursements to either party for services
rendered or out of pocket costs related to the Roundup L&G Business as described more particularly
in Section 3.3 hereof. Monsanto shall grant the Agent’s nominee the authority to manage the
Roundup Bank Accounts on Monsanto’s behalf, and more generally take any and all actions requested
for the payment of all the Roundup L&G Business Expenses in compliance with the terms of Section
3.3 hereunder as per the Cash Flow Chart attached hereto as Schedule 3.2(d); provided that checks
in an amount over $25,000 shall also require the co-signature of an Assigned Employee or a member
of the Global Support Team. Monsanto shall further cause such Roundup Bank Accounts to have at all
times a zero balance account but to receive immediate and automatic funding upon presentation of
any checks. Monsanto may perform its own reconciliation of the Roundup Bank Accounts and may
conduct a weekly review of the check register.




     Section 3.3. Expenses and Allocation Rules



          (a) Expenses. Each and every Expense, either as a direct expense or an allocated one, shall
only be charged to the Roundup L&G Business and consequently taken into account in the Program EBIT
statements set forth in Section 3.6(c) hereto if part of a category of Expenses specifically
authorized by the terms of the Annual Business Plan and within the aggregate amount prescribed in
the Annual Business Plan for such category of Expense (“Budget”) (“Approved Expense”). Any Expense
which shall exceed its prescribed Budget shall solely be the responsibility of the party incurring
it unless such expense is required to implement an approved Significant Deviation from the Annual
Business Plan or is necessary to support sales orders above budgeted sales pursuant to sales
programs contemplated by the Annual Business Plan.




          (b) Direct vs. Allocated. Each party shall have the right to verify whether any particular
Expense is an Approved Expense by sending a written inquiry to that effect to the Agent’s nominee.
The party incurring an Expense shall endeavor to promptly provide upon




18









 







request of the Agent’s
nominee the appropriate documentary evidence supporting such Expense. Upon failure by the said
party to provide the appropriate documentary evidence, the inquiring party shall have the right to
send a written notice of dispute to the other party and the parties shall resolve such dispute in
the manner set forth in Section 3.4 hereof. Upon determination by such Independent Accountant (as
defined below) that the Expense was not Approved, such Expense shall be deducted from the Program
Expenses and the party having incurred such Expense shall either promptly reimburse it to the
Roundup Bank Account, or shall withdraw its request for reimbursement if not reimbursed yet.




     Expenses shall be classified into (i) direct expenses of the Roundup L&G Business payable to
vendors, which shall be submitted directly to the Agent’s nominee for payment out of the Roundup
Bank Account or (ii) as Allocated Expenses which shall be submitted by either party to the Agent’s
nominee for reimbursement out of the Roundup Bank Account. Payment of any direct expenses incurred
by either party on behalf of the Roundup L&G Business shall be made as they become due in
accordance with the applicable commercial terms agreed upon with each vendor.



     Allocated Expenses shall be paid on the fifteenth (15th) day of each month provided
such allocated Expenses shall be submitted in writing no more than five (5) days after the end of
each month to the Agent’s nominee in charge of the Roundup Bank Account.



          (c) Allocation Rules. In the performance of their obligations under this Agreement, each
party shall incur allocated Expenses directly related to the Roundup L&G Business. Each allocated
Approved Expense, regardless of the party incurring it, shall be reimbursed as described in Section
3.5(b) provided such expense shall be allocated in accordance with the Allocation Rules set forth
for each category of cost and service per country or region, as the case may be, in Schedule 3.3(c)
attached hereto (“Allocated Expense”).




     Section 3.4. Resolution of Disputes Arising under Article 3. Unless otherwise agreed by the
parties, each party shall have the right, within twenty (20) days of receipt of the quarterly or
annual financial statements to send a written notice of dispute to the other party. Upon receipt
of such notices of dispute, the parties shall undertake the following steps:



          (i) First, for a period of fifteen (15) days, the parties shall negotiate in good faith for
the purposes of attempting to mutually agree upon the item in dispute;




          (ii) Second, if parties are unable to mutually agree upon the item in dispute, then within
seven (7) business days following the expiration of such fifteen (15) day period, the parties shall
agree in writing upon the selection of a nationally recognized independent accounting firm (the
“Independent Accountant”) to resolve the dispute. If the parties cannot agree upon such Independent
Accountant within such time frame, then the Independent Accountant shall thereupon be selected by
the American Arbitration Association (the “AAA”), with preference being given by the AAA in making
such selection to any one of the “Big Five” accounting firms (except for any firm which performs
accounting services for either party)





19









 







willing to perform the services required hereunder. The
Independent Accountant shall be instructed to act within thirty (30) days to resolve the dispute,
and its decisions with respect to the dispute shall be final and binding upon the parties. The
fees and expenses of the Independent Accountant with respect to the settlement of the dispute shall
be borne equally by the parties.




     Section 3.5. Fixed Contribution to Expenses



          (a) Amount and Purpose. Each Program Year the Agent shall make a fixed contribution to the
overall Expenses of the Roundup L&G Business in an amount equal to twenty million U.S. Dollars
($20,000,000) (“Contribution Payment”). Such Contribution Payment shall be payable by the Agent to
Monsanto in twelve equal monthly installments which shall be due on the first day of each month and
shall not be subject to any “set-off”.




          (b) Temporary Deferral. Notwithstanding the foregoing, but subject to Section 10.9, for the
first three Program Years, all or part of the Contribution Payment shall be deferred as shown in
Table 1 set forth below. Such forty million U.S. Dollars ($40,000,000) deferral shall not be
deemed to constitute a loan by either party but a mere cash flow adjustment between the parties.




Table 1




	 	 	 	 	 
	Year	 	Contribution Payment	 	Amount Deferred
	1999
	 	-0-	 	$20MM
	2000
	 	$5MM	 	$15MM
	2001
	 	$15MM	 	$  5MM
	2002
	 	$20MM	 	 
	2003-18	 	$25MM until the full $40MM bearing an 8% interest (starting to run on the
date each monthly installment would otherwise be due) is entirely
recovered by Monsanto, at which point the Contribution Payment shall
revert to $20MM per Program Year.	 	 






     Notwithstanding the above payment schedule shown in Table 1 beginning in Program Year 2001,
recovery of such deferral shall be accelerated with the Contribution Payment being increased by 50%
of the amount by which the Agent’s Net Commission exceeds the amounts shown in Table 2 set forth
below. Any such increase of the Contribution Payment shall be paid by adjusting the latest monthly
installment upon receipt of the final Program EBIT statement by November 30 of every calendar year.
For purposes of this Section 3.5(b), “Net Commission” means the Commission as determined pursuant
to the terms of Section 3.6(a) less the Contribution Payment applicable pursuant to this Section
3.5.



20









 





Table 2




	 	 	 	 	 
	Year	 	Net Commission Level
	2001
	 	$32.5MM
	2002
	 	$28.1MM
	2003
	 	$26.7MM
	2004
	 	$30.5MM
	2005
	 	$34.6MM
	2006
	 	$38.9MM
	2007
	 	$43.5MM
	2008
	 	$49.0MM






               Upon termination of this Agreement for any reason other than Egregious Injury, Material Fraud
or Material Willful Misconduct on the part of the Agent, Monsanto shall forfeit recovery of any
portion of the $40MM (or interest thereon) unpaid on the date of termination.



     Section 3.6. Commission.



          (a) Amount of Commission. In consideration to the Agent for performance of its duties and
obligations hereunder, the Agent shall be entitled to a Commission (“Commission”). Such Commission
shall represent a percentage of the Program EBIT realized by the Roundup L&G Business, which
percentage shall vary in accordance with the formula set forth below.




	 	 	 	 	 	 	 	 	 
	 	 	Amount of Program EBIT
	Year	 	First Commission Threshold	 	Second Commission Threshold
	1999-2000
	 	$	30,000,000	 	 	$80MM
	2001
	 	$	31,250,000	 	 	$80MM
	2002
	 	$	32,531,250	 	 	$80MM
	2003
	 	$	33,844,531	 	 	$80MM
	2004
	 	$	35,190,645	 	 	$80MM
	2005
	 	$	36,570,411	 	 	$80MM
	2006
	 	$	37,984,471	 	 	$80MM
	2007
	 	$	39,434,288	 	 	$80MM
	2008
	 	$	40,920,145	 	 	$80MM
	2009+
	 	$	30,000,000	 	 	$80MM






21









 






The Commission shall be equal to:




	 	 	 	 	 
	Amount of Program EBIT	 	Multiplied By
	(1)
	 	0 - First Commission Threshold:	 	0%
	 
	 	 	 	 
	(2)
	 	Second Commission Threshold less	 	 
	 
	 	First Commission Threshold:	 	46% in Program Year 1999*
	 
	 	 	 	44% in Program Year 2000
	 
	 	 	 	40% thereafter
	 
	 	 	 	 
	(3)
	 	Above the Second Commission	 	 
	 
	 	Threshold:	 	50%**








 




			
	*	 	1999 Program EBIT shall be increased by $15MM.
	 
	**	 	subject to Section 3.5(b).




Provided both the First and Second Commission Thresholds set forth above may be amended from time
to time by mutual agreement of the parties following the inclusion or exclusion of either new or
existing countries in the Included Markets. In the event of a Regional Performance Default in the
UK or in France, there shall be no adjustment to either the First Commission Threshold or the
Second Commission Threshold. In the event of a Regional Performance Default in any region other
than the UK and France, both thresholds shall be reduced by such region’s pro rata contribution to
the preceding Program EBIT. Notwithstanding the foregoing, in the event of the non-renewal of the
EU Term due to Monsanto, the First Commission Threshold shall be reduced to -0- for the remainder
of the term of this Agreement.




          (b) Payment of Commission. Within thirty (30) days following the end of each month, the
Agent, on behalf of Monsanto shall determine whether a Commission becomes payable, i.e., whether
the cumulative Program EBIT for the Program Year up to the preceding month equals an amount in
excess of the First Commission Threshold. If so, the Agent, on behalf of Monsanto shall by check
or wire transfer, to the Agent’s designated account for the payment of the applicable Commission
pursuant to the formula set forth in Section 3.6(a) subject to any adjustments pursuant to Section
3.6(c).




          (c) Final Determination. Within fifteen (15) days following the end of each Program Year, the
Agent shall deliver to Monsanto a Commission statement which shall contain the final determination
of the Commission due at the expiry of the Program Year and shall set forth any eventual
adjustments, to the amounts paid up to the Agent under Section 3.6(b) during the preceding Program
Year. If within fifteen (15) days following the receipt of such Commission statement by the Agent,
Monsanto does not provide the Agent written notice of objection to the Commission statement, the
amount of the Commission for such Program Year shall be as provided thereon. If within such
fifteen (15) days following receipt of such




22









 







Commission statement by Monsanto, Monsanto does provide
the Agent written notice of objection to the
Commission statement, the parties shall resolve such dispute in the manner set forth in Section 3.4
hereof.




     Section 3.7. Marketing Fee. In consideration for the rights and benefits granted to the Agent
hereunder exclusively for North America as hereby expressly acknowledged and agreed to by both
parties, the Agent shall pay to Monsanto, on or before September 30, 1998, an amount equal to
thirty-two million U.S. Dollars ($32,000,000) (the “Marketing Fee”) in immediately available funds.



     Section 3.8. Additional Commission



     (a) The parties acknowledge that Monsanto currently sells Glyphosate-based products current
under the Roundup trademark, directly or indirectly, to professional, industrial and agricultural
users (“Roundup Ag Products”). Monsanto acknowledges that one of such Roundup Ag Products, the 2.5
gallon SKU containing 41% concentration of Glyphosate (the “2.5 Gallon SKU”), is currently being
sold through those certain Lawn and Garden Channels in the United States set forth on Schedule 3.8
attached hereto and may be purchased by consumers in the Lawn and Garden Market. Schedule 3.8 also
sets forth Monsanto’s (but not its distributions) sales into Lawn and Garden Channels in the U.K.
and France. Monsanto also acknowledges its obligations pursuant to Section 6.13(b) hereof.



     (b) On and after the Effective Date, the Agent shall support and manage the sale of the 2.5
Gallon SKUs that were previously being sold directly by Monsanto through such Lawn and Garden
Channels. As compensation therefor, in addition to the Commission otherwise payable to the Agent
hereunder, the Agent shall be paid a 10% commission on all such sales of 2.5 Gallon SKUs sold
through the Lawn and Garden Channels in the United States set forth on Schedule 3.8. The parties
acknowledge that the sales resulting from such 2.5 Gallon SKUs shall not be included in the Program
Sales Revenues hereunder.



     (c) Except to the extent provided in Section 3.8(b) above, on and after the Effective Date,
Monsanto shall use its reasonable efforts to ensure that Roundup Ag Products are not sold, directly
or indirectly, through Lawn and Garden Channels to consumers in the Lawn and Garden Market in the
Included Markets. In the event that in the normal course of business the Agent determines based on
satisfactory evidence that a material amount of the 2.5 Gallon SKU is being sold directly by
Monsanto through Lawn and Garden Channels for Lawn and Garden Use in the United States other than
as set forth on Schedule 3.8 or a material amount of additional Roundup Ag Products above
historical sales levels as of the date of this Agreement is being sold through Lawn and Garden
Channels to consumers for Lawn and Garden Use in the Included Markets, the parties shall negotiate
in good faith to include, subject to the principles set forth in Section 3.8(e), an appropriate
percentage of such incremental sales to reflect such Lawn and Garden Use within the definition of
Program Sales Revenues so that the Agent receives credit therefor for purposes of calculating the
Agent’s Commission.



23









 





     (d) Prior to the finalization of the Annual Business Plan for each program Year, Monsanto
shall provide the Agent with notice of any significant changes in the pricing of any Roundup Ag
Product that may be sold through Lawn and Garden Channels for Lawn and Garden Use in any Included
Market during such Program Year. For the thirty (30) days after receipt of such notice, the
parties shall negotiate in good faith, and the Steering Committee shall affect, if so agreed, an
appropriate adjustment to the Agent’s Commission and/or Thresholds to address the impact of such
proposed pricing changes on the Annual Business Plan for such Program Year. In the event the
parties are unable to reach agreement within such thirty (30) day period, the Agent’s Commission
and/or Thresholds shall remain unchanged provided that at the end of the such Program Year the
Agent shall have the right to request a retroactive adjustment of the Commission or Threshold for
such Program Year upon demonstrating , based on actual numbers for such Program Year, a significant
impact on the Roundup Lawn and Garden Business.



     (e) In implementing the foregoing, the parties shall follow the following principles: (i)
that Monsanto’s sales of Roundup Ag products are not intended for Lawn and Garden Use and that
Monsanto shall not sell Roundup Ag Products directly or promote the indirect sale thereof, through
Lawn and Garden Channels to consumers for Lawn and Garden Use in the Included Markets and (ii)
that there shall be no transfer of historical or future sales of Roundup Ag products in the Ag
Market into Program Sales Revenues. Furthermore, the parties acknowledge that Roundup Ag Products
having a formulation consisting of 41% or more Glyphosate and in container sizes over 2.5 gallons
in the United States or over one liter in the other Included Markets shall be presumed to have no
Lawn and Garden Use and therefor that sales of such Roundup Ag Products shall not be deemed to
compete with Roundup Products in a manner that would justify adjustment of the calculation of
Program Sales Revenues; provided that if the Agent is able to demonstrate to the Steering Committee
that a material change in the amount of such Roundup Ag Products above historical sales levels as
of the date of this Agreement are being sold through Lawn and Garden Channels to consumers for Lawn
and Garden Use in the Included Markets, the parties shall negotiate in good faith pursuant to
Section 3.8(c) to adjust the calculation of Program Sales Revenues.



     (f) In order to demonstrate the foregoing, by way of example only: (i) Assume that sales of
2.5 Gallon SKUs in the U.S. by Monsanto, directly or indirectly, through Lawn and Garden Channels
in the Included Markets set forth on Schedule 3.8 for the 1999 Program Year are $10MM; (ii) assume
that the sales of such 2.5 Gallon SKUs for the corresponding period from October 1, 1997 through
September 30, 1998 were $6MM; and (iii) assume that of such incremental $4MM of sales in the 1999
Program Year, 40% are to consumers in the Lawn and Garden Market and 60% are to consumers in the Ag
Market. In such event, with respect to the 1999 Program Year, the Agent would be entitled to an
additional commission equal to $840,000, comprised of 10% of $6MM (the historical sale level of 2.5
Gallon SKUs) and 10% of $2.4MM (60% of the $4MM in incremental sales of 2.5 Gallon SKUs), and that
Program Sales Revenues for the 1999 Program year will be increased by $1.6MM (40% of the
incremental $4MM in sales). A similar analysis would apply to sales of other Roundup Ag Products,
other than the 2.5 Gallon SKU, through Lawn and Garden Channels to consumers in the Lawn and Garden
Market.



24









 





ARTICLE 4 — ROUNDUP L&G BUSINESS MANAGEMENT STRUCTURE




     Section 4.1. Underlying principles for the Roundup L&G Business Management Structure



     (a) The Roundup L&G Business management structure, as described in this Article and in
Schedule 4.1(a), has been created for the purposes of fostering and promoting the following
interests of the parties:




	 	(i)	 	Common Interests:






	 	(A)	 	achieve the maximum volume and profit levels
for the Roundup Business;
	 
	 	(B)	 	continue to strengthen the Roundup brand; and
	 
	 	(C)	 	leverage the strengths of both parties while
working together in a constructive and harmonious way.






	 	(ii)	 	Monsanto’s Interests:






	 	(A)	 	retain ability to resume full management of the
Roundup Business upon termination of this Agreement;
	 
	 	(B)	 	retain control over key business decisions; and
	 
	 	(C)	 	provide global stewardship of the Roundup
brand.






	 	(iii)	 	The Agent’s Interests:






	 	(A)	 	manage the Roundup Business within the
parameters of approved Annual Business Plans;
	 
	 	(B)	 	have clear reporting relationship to Business
Units heads for all Assigned Employees within the Business Units; and
	 
	 	(C)	 	have clear definition of roles and
responsibilities for all Assigned Employees within the Business Units.





     (b) The parties understand that such structure may be amended from time to time by mutual
agreement of the parties provided any such change shall take into account the respective interests
of each party as described hereunder.



25









 





     Section 4.2. Steering Committee.



     (a) Appointment. Monsanto and the Agent shall each appoint by April 1 of each year two (2)
executives to a steering committee (“Steering Committee”) provided, however, any vacancy shall be
filled in such a manner that the parties shall maintain their respective proportionate
representation on the Steering Committee and that upon failure by either party to appoint said two
(2) executives by such time, the two (2) executives previously appointed by such party shall be
deemed appointed for another Program Year. Notwithstanding the foregoing, the members of the
Steering Committee for the Program Year 1999 shall be the individuals whose names are set forth as
Schedule 4.2(a) attached hereto. In addition, the head of the North America Business Unit shall be
entitled to participate, with no voting right, at every meeting of the Steering Committee, and to
invite, as the need may arise, the heads of the other Business Units to said meetings (equally
without voting rights).



     (b) Meetings, Quorum and Voting Requirements.



          (1) Meetings. The Steering Committee shall meet at least once a year for purposes of
approving the Annual Business Plan no later than September 15 of every calendar year. Any member
of the Steering Committee shall have the right to call a special meeting of the Steering Committee
provided a prior written notice of at least fifteen (15) days shall be given to each member
together with an agenda for such meeting.




          (2) Quorum and Voting Requirements. The quorum for any meeting of the Steering Committee
shall require the participation of all four (4) members except that any member shall be deemed
present when participating via phone or video conference. Any decisions by the Steering Committee
may be taken by the affirmative vote of a majority of three (3) of the members of the Steering
Committee. In the event of a deadlock, when a particular vote is divided equally between the four
members, the matter shall be submitted to the president of Monsanto’s Ag division, who shall have
the exclusive discretion to resolve the matter and such decision shall bind the Steering Committee
to such action or inaction. Notwithstanding any future assignment of this Agreement to a third
party by reason of a Roundup Sale, the President of Monsanto’s Ag division shall retain its right
of veto in case of deadlock of the Steering Committee.




               For every meeting of the Steering Committee, minutes shall be kept and circulated for approval
to all four members. Every decision of the president of Monsanto’s Ag division shall also be
recorded in writing and distributed to the members of the Steering Committee.



     (c) Authority. The Steering Committee shall:




	 	(i)	 	approve all Annual Business Plans, and any Significant
Deviations (as described in Section 4.3(c)) therefrom not previously approved
jointly by the Business Units and the Global Support Team;




26









 






	 	(ii)	 	approve any and all strategic plans;
	 
	 	(iii)	 	review monthly reports submitted by the Business Units for the
purposes of monitoring achievement and redirecting the Business Units by
issuing a formal amendment to the Annual Business Plan then in effect;
	 
	 	(iv)	 	monitor and redirect, if need be, the performance of the Global
Support Team;
	 
	 	(v)	 	approve any decisions relating to key personnel assigned to the
Roundup Business within the Business Units, including Monsanto’s and the
Agent’s employees;
	 
	 	(vi)	 	resolve any disagreement occurring between a Business Unit and
the Global Support Team; and
	 
	 	(vii)	 	decide any other matter mutually agreed upon by Monsanto and
the Agent.





     Section 4.3. Business Units.



     (a) Role and Reporting. The Roundup L&G Business shall be managed, on behalf of the Agent, by
its respective pesticide business units in North America, Europe and Asia (“Business Units”)
provided that, for the management of the Roundup L&G Business, the head of each of the three
Business Units shall report directly to the Steering Committee.



     (b) Monsanto’s Assigned Employees. For the term of this Agreement, Monsanto shall assign the
equivalent of fifteen (15) of its own employees (“Assigned Employees”) to fulfill the functions set
forth in Schedule 4.3(b) within the three Business Units. The number of said Assigned Employees
may vary from time to time upon mutual agreement. Monsanto may, from time to time, with the
Agent’s written approval, substitute individuals to serve as the Assigned Employees, by providing
prior written notice thereof to the Agent. The Assigned Employees shall serve under the guidance
and supervision of the Business Unit head of the Business Unit they shall join.



          Monsanto shall remain the employer of the Assigned Employees for all purposes of any and all
liability and health insurance, employee benefit plans, and workers compensation coverage, and
shall be responsible for all compensation and other benefits. Performance reviews shall be first
recommended by the Business Unit head in charge of such Assigned Employees.




     (c) Duties. The three Business Units shall be responsible for:




	 	(i)	 	taking any and all necessary actions to implement the approved
Annual Business Plan and strategic plans, as may be amended from time to time,




27









 






	 	 	 	either by mutual agreement of the Business Unit and the Global Support Team or
by the Steering Committee as described in Section 4.2(c);
	 
	 	(ii)	 	managing the day-to-day Roundup L&G Business;
	 
	 	(iii)	 	developing and submitting, in cooperation with the Global
Support Team all strategic and Annual Business Plans;
	 
	 	(iv)	 	communicating, in writing or via meetings, on a regular basis,
with the Global Support Team on all significant issues affecting the Roundup
L&G Business; and
	 
	 	(v)	 	notifying the Global Support Team of any deviation to the
Annual Business Plan, which, in their view, is reasonably likely to have a
financial impact on the Program EBIT of at least $500,000 or constitutes a
significant deviation from a non-financial item approved in the Annual Business
Plan (“Significant Deviation”).





     Section 4.4. Global Support Team.



     (a) Appointment. Monsanto shall name three (3) individual employees of Monsanto to form a
support team (the “Global Support Team”) whose names and individual responsibilities are described
on Schedule 4.4(a) as attached hereto. Monsanto may from time to time substitute any individual
serving on the Global Support Team, with the written approval of the Agent, by providing a prior
written notice to the Agent to such effect.



     (b) Duties. The Global Support Team shall be responsible to:




	 	(i)	 	participate actively in the development of all strategic and
Annual Business Plans;
	 
	 	(ii)	 	act as a liaison between any of Monsanto’s functions or
departments providing a support service to the Roundup Business (such as R&D,
regulatory, etc.) and monitor the quality of services rendered;
	 
	 	(iii)	 	provide stewardship for the Roundup brand image worldwide;
	 
	 	(iv)	 	prepare internal assessments of the performance of the Roundup
L&G Business for Monsanto management;
	 
	 	(v)	 	review, and approve any performance reviews prepared by the
Business Unit head for any of the Assigned Employees;




28









 






	 	(vi)	 	participate in planned key customer interactions and program
presentations, either by participation in meetings or in preparatory sessions
therefor;
	 
	 	(vii)	 	review and approve any material change or deviation in
consumer communication, mass media, packaging design or any other marketing
tactic that directly impacts the consumer perception and interface with the
brand which may occur from time to time;
	 
	 	(viii)	 	review and approve any Significant Deviation from the Annual Business Plan;
and upon failure to agree with the Business Unit, prepare a recommendation to
submit to the Steering Committee for resolution, provided that the Business
Unit may similarly prepare a recommendation to submit to the Steering
Committee.





ARTICLE 5 — DUTIES AND OBLIGATIONS OF MONSANTO




     Section 5.1. Monsanto’s Obligations and Rights. Subject to Section 2.2(a)(ii) and Article 3,
unless and until expressly directed otherwise by the Business Units, with the prior written
approval of the Steering Committee Monsanto shall continue to support the Roundup L&G Business by
performing necessary services. Notwithstanding the foregoing, at all times during the term of this
Agreement, Monsanto shall be solely responsible for the following functions:



          (a) Research and Development. Monsanto shall, in its sole discretion, continue to develop new
Glyphosate-based herbicide formulations more particularly as described in Section 6.10 hereof;




          (b) Regulatory Compliance. Monsanto shall be responsible for ensuring that all Roundup
Products and the labels for such products comply with the USEPA and applicable Laws of each state
and country within the Included Markets, including obtaining and maintaining all governmental
registrations, registration applications, temporary registrations, all data pertaining to such
registrations as submitted to governmental agencies, experimental use permits, applications and
emergency use exemptions, all with respect to the Roundup Products;




          (c) FIFRA 6(a)(2). Monsanto shall be responsible for maintaining a customer response center
relating to Roundup Products, which will solely manage the medical response calls (including human
and animal health-related calls) and related FIFRA 6(a)(2) issues (the “CRC”). Monsanto shall be
responsible for all reports related thereto, including (without limitation) reports to any
regulatory or government authority pursuant to any applicable Law; and




          (d) Sales Promotion. Monsanto shall, in accordance with the Annual Business Plan, promote the
sales and consumer acceptance of Roundup Products by:




29









 








                    (i) providing suitable training to the Agent’s representatives or employees in the areas of
product knowledge and product stewardship; and



                    (ii) providing the Agent and Customers with technical and product information, manuals,
promotional bulletins, presentation kits and other sales aid materials.



     Section 5.2. Warranties. For Roundup Products with which Monsanto offers a “written
warranty,” whether within the meaning of the Magnuson-Moss Warranty—Federal Trade Commission
Improvement Act, 15 United States Code Annotated, Section 2301, or otherwise, Monsanto shall honor
those warranties in accordance with such terms.



ARTICLE 6 — REPORTS AND ADDITIONAL OBLIGATIONS OF THE PARTIES




     Section 6.1. Cooperation. The Agent and Monsanto shall cooperate with each other so as to
facilitate the objectives set forth in this Agreement and shall act in good faith and in a
commercially reasonable manner in performing their respective duties hereunder.



     Section 6.2. Use of EDI. Monsanto, the Agent, the Steering Committee, and the Global Support
Team will exchange a broad range of operating data on a periodic basis. The method of exchange
will be approved by the Steering Committee and will include both file transfer and EDI protocol.



     Section 6.3. The Agent’s Systems and Reporting Obligation. The Agent shall establish and
maintain all such systems and procedures (financial, logistical, or otherwise) as reasonably
requested by Monsanto or the Steering Committee in connection with the Agent’s performance under
this Agreement. For all reports, the data will include current period and current YTD; and
comparisons with same period and YTD for the year previous. Specifically, the Agent shall provide
the following reports:



          (a) Weekly Reports. On the second business day of each week, the Agent shall provide to the
Global Support Team update reports for the prior week, showing: (i) dollar and case shipments by
the top 25 Customers and by SKU (stock keeping unit), (ii) inventory levels by SKU for North
America, (iii) collection activities by the top 25 Customers, (iv) agency fill rate for the top 10
Customers (Roundup Products ordered by Customers and shipped by the Agent by line item, unit and
dollar amount), and (v) POS sell-through by SKU by the top 7 Customers that provide such
information.




          (b) Monthly Reports. On the sixth business day of each Month, the Agent shall provide to the
Steering Committee and Monsanto (i) the type of data contained in the weekly reports (as set forth
in Section 6.3(a)) for the prior calendar month and the current year-to-date, (ii) full P&L,
balance sheets and cash flow statements, (iii) Netback expense detail (accruals and actuals), (iv)
Expense detail (accruals and actuals), (v) Cost of Goods Sold detail, in each case comparing such
information against budget, and against the previous year.




30









 








          (c) Quarterly Reports. The Agent shall provide to the Steering Committee and Monsanto, on a
Quarterly basis and on a form provided by the Steering Committee (i) a summary of purchases of
Roundup Products, in total cases or units, made by each Customer which is designated by the
Steering Committee, (ii) inventory level by SKU by Customer and (iii) updated full year forecast.




          (d) Annual Reports. The Agent shall provide to the Steering Committee and Monsanto, on an
Annual basis and on a form provided by the Steering Committee (i) bridge and tracking capability
from Program Year to calendar year, (ii) a budget and (iii) a long range plan.




          (e) Other Reports. In addition, the Agent shall provide Monsanto or the Steering Committee
with such other reports as may be reasonably requested within a period not to exceed thirty (30)
days from such request.




     Section 6.4. Employee Incentives. Recognizing that, as Monsanto’s exclusive agent for sale
and distribution of Roundup Products, the Agent is to promote the sale of Roundup Products no less
aggressively than any other product or product line that the Agent sells, the Agent shall cause its
appropriate officers and other management to devote an appropriate portion of their personal
efforts to the sale and distribution of Roundup Products covered by this Agreement. Further, the
Agent shall ensure that the appropriate personnel are compensated in a manner to encourage them to
promote the sale of Roundup Products no less aggressively than any other product or product line
that the Agent sells.



     Section 6.5. Insurance. The Agent, shall, during the term of this Agreement, maintain full
insurance against the risk of loss or damages to the Roundup Products for any Agents’ warehouse
where Roundup Products are under the custody of the Agent and, upon request, shall furnish Monsanto
with satisfactory evidence of the maintenance of said insurance. Further, each party shall make
all contributions and pay all payroll taxes required under federal social security laws and state
unemployment compensation laws or other payments under any laws of a similar character as to its
own personnel involved in the Roundup L&G Business (including any purported “independent
contractors” subsequently classified by any authority under any Law, as an employee) in connection
with the performance of this Agreement.



     Section 6.6. Liens. Subject to the provisions of any existing intercreditor agreement to
which Monsanto is currently a party (as the same may be amended, modified or terminated) and except
as may otherwise be agreed to by Monsanto, which agreement shall not be unreasonably withheld in
the case of similar arrangements with existing or future institutional lenders, the Agent agrees
not to allow any liens or encumbrances of any nature to attach to Roundup Products. At Monsanto’s
request, the Agent, sub-agent, or sub-distributor shall execute such financing statements, security
agreements and other documents as Monsanto may reasonably request to create, perfect, and continue
in effect its security interests hereunder.



31









 





     Section 6.7. Promoting Safe Use-Practices. Roundup Products may be or become hazardous unless
used in strict accordance with Monsanto’s product labels. The Agent shall use commercially
reasonable methods to inform and familiarize its employees, agents, Customers, contractors
(including warehousemen and transporters) and others who may handle or use Roundup Products of the
potential hazards pertaining thereto (including accidental breakage or fire), and shall stress the
safe use and application of Roundup Products in strict accordance with Monsanto’s product labels.
In addition, the Agent shall provide HM126F training to its personnel as required by the United
States Department of Transportation (and such other training as may be required by other countries
within the Included Markets). The Agent shall have the responsibility to dispose of waste
materials in accordance with all applicable Laws.



     Section 6.8. Monsanto Inspection Rights. From time to time, as Monsanto or the Steering
Committee may request, the Agent shall permit, upon reasonable request and during normal business
hours, representatives of Monsanto or the Steering Committee to inspect, with regard to Roundup
Products, the Agent’s inventories, warehousing, and shipping procedures.



     Section 6.9. Recalls. The Agent shall cooperate with Monsanto, and promptly take such actions
as requested by Monsanto, with respect to any defective product including any “stop-sales” or
recalls for Roundup Products.



     Section 6.10. New Roundup Products. During the term of this Agreement, Monsanto covenants and
agrees to first offer (the “Product Offer”) to the Agent the exclusive agency and distribution
rights to any newly created non-selective herbicide product, which is not marketed for Lawn and
Garden Use as of the date of this Agreement, and which Monsanto, in its exclusive, reasonable
discretion, determines to be suitable for sale as a new product for Lawn and Garden Use (the “New
Product”); provided, however, that for the Lawn and Garden Market, that any new product containing
Glyphosate or another non-selective herbicide shall be considered to be a New Product. The Product
Offer shall be in writing, shall be in sufficient detail describing such New Product, and shall be
made within sixty (60) days of the date of commercialization of such New Product for uses other
than Lawn and Garden Use. In no event shall Monsanto, directly or indirectly, commercialize any
New Product for Lawn and Garden Use without first offering such New Product to the Agent pursuant
to the terms of this Section 6.10. If the Agent agrees in writing within ninety (90) days of
receipt of the Product Offer to accept the New Product, then such New Product shall be, without
further action or amendment, included within the definition of Roundup Products and be subject to
the terms and conditions of this Agreement. In such event, the parties shall adjust the Commission
Thresholds to reflect this additional source of revenue unless the New Product is a
Glyphosate-based product or an improvement of any existing Roundup Products in which case the
Commission Thresholds shall remain the same. If the Agent fails to agree in writing to accept the
Product Offer within such ninety (90) days of receipt, then Monsanto shall have the exclusive right
to manufacture, package, promote, distribute, and sell such New Product, regardless of any actual
or potential conflict with the terms of Agreement.



     Section 6.11. [Intentionally Omitted.]



32









 





     Section 6.12. Confidentiality. Except as necessary for its performance under this Agreement,
except as may be required by the federal securities laws or other applicable laws and except to the
extent required under certain existing agreements to which Monsanto is a party (i.e., AHP
Merger Agreement), neither party shall at any time or in any manner, either directly or indirectly,
and neither party shall permit its employees to use, divulge, disclose or communicate to any person
or entity any “confidential information” of the other party. For purposes of this Section 6.12,
“confidential information” includes any information of any kind, nature, or description that is
proprietary, treated as confidential by, owned by, used by, or concerning any matters affecting or
relating to the business of a party or the subject matter of this Agreement, including but not
limited to, the names, business patterns and practices of any of its customers, its marketing
methods and related data, the names of any of its vendors and suppliers, the prices it obtains or
has obtained or at which it sells or has sold products or services, lists, other written records,
and information relating to its manner of operation. Notwithstanding the foregoing, “confidential
information” shall not include any information which (i) is or becomes public knowledge through no
fault or wrongful act of the party disclosing such information or its employees, (ii) was known by
such party prior to any agency or distributor relationship with the other party or any predecessor,
(iii) is received by such party pursuant to the Formulation Agreement and which is not otherwise
confidential information, or (iv) is received from a third party who is not obligated to keep such
information confidential. All “confidential information” in any form (electronic or otherwise)
shall be and remain the sole property of the party possessing such information and shall be
returned to such party upon the termination of this Agreement upon such party’s reasonable request.



     Section 6.13. Noncompetition.



          (a) Noncompetition Period. The “Noncompetition Period” shall be the term of this Agreement,
and for the two-year period following the termination, cancellation or non-renewal of this
Agreement; provided, however, that in the event (i) Monsanto terminates this Agreement
pursuant to Section 10.4(a)(2), (ii) Monsanto does not renew the EU Term pursuant to Section 10.2
or (iii) the Agent terminates this Agreement pursuant to Section 10.5(a), the Noncompetition Period
shall be deemed to terminate simultaneously upon the effective date of the termination of this
Agreement or, in the case of non-renewal of any EU Term pursuant to Section 10.2 upon termination
thereof with respect to EU Countries only.




          (b) Monsanto Covenant. Except as provided for in Section 3.8, Monsanto covenants and agrees
that for the Noncompetition Period, Monsanto will not, nor will it permit any Affiliate to,
directly or indirectly, own, manage, operate or control, or participate in the ownership,
management, operation or control of, or be connected with or have any interest in, as a
shareholder, partner, creditor or otherwise, any “Competitive Business.” A Competitive Business
shall be any business which, anywhere within the Included Markets, (x) manufactures, sells, markets
or distributes any non-selective weed control product, whether residual or non-residual, for Lawn
and Garden Use or (y) competes with the Roundup L&G Business; provided,
however, this Section 6.13(b) shall not apply to those actions of Monsanto or any Affiliate
(i) to




33









 







the extent such actions are expressly contemplated by this Agreement, for the duration of
this Agreement, (ii) to the extent that immediately upon termination of this Agreement for whatever
reason Monsanto or any Affiliates or successor to the Roundup L&G Business shall continue to
operate the Roundup L&G Business without infringing this covenant, or (iii) to the extent that
Monsanto’s interest in a Competitive Business, as a shareholder, partner, creditor or otherwise, is
equal to or less than 5%. Furthermore, this Section 6.13(b) shall not apply to any actions taken
by Monsanto as authorized by Section 10.7(a) during and after any period when Monsanto has given
notice of termination in accordance with Section 10.4(b).




          (c) Agent’s Covenant. The Agent covenants and agrees that during the Noncompetition Period,
the Agent will not, nor will it permit any Affiliate to, directly or indirectly, own, manage,
operate or control, or participate in the ownership, management, operation or control of, or be
connected with or have any interest in, as a shareholder, partner, creditor or otherwise, any
Competitive Business; provided, however, this Section 6.13(c) shall not apply to those
actions of the Agent or any Affiliate (i) to the extent such actions are expressly contemplated by
this Agreement, for such term of this Agreement; (ii) to the extent such actions relate to the
products listed on Exhibit D hereto in the countries listed therein, the products that the
Agent either owns, has contracted to purchase or entered into a letter of intent with respect to as
of the Effective Date and such additional products as the parties may from time to time agree (the
“Permitted Products”); (iii) to the extent that the Agent’s interest in a Competitive Business, as
a shareholder, partner, creditor or otherwise, is equal to or less than 5%; or (iv) to any separate
agreement with Monsanto with respect to transgenic technology sharing. The parties agree to compile
a list of the Permitted Products within sixty (60) days after the Effective Date which shall be
substituted as Exhibit D.




          (d) Non-Solicitation by Monsanto. Monsanto agrees that for the duration of the Noncompetition
Period and for the two years thereafter, without the prior written consent of the Agent, it will
not, nor will it permit any of its Affiliates to (i) solicit for employment any person then
employed by the Agent or any of its Affiliates or (ii) knowingly employ any employee of the Agent
or any of its Affiliates who voluntarily terminates such employment with the Agent (or such
Affiliate) after the Effective Date, until three months have passed following termination of such
employment.




          (e) Non-Solicitation by the Agent. The Agent agrees that for the duration of the
Noncompetition Period, without the prior written consent of Monsanto, it will not, nor will it
permit any of its Affiliates to (i) solicit for employment any person then employed who works
primarily with Roundup Products or with other products with Lawn & Garden Uses (“Lawn & Garden
Employee”) by Monsanto or any of its Affiliates or (ii) knowingly employ any Lawn & Garden Employee
of Monsanto or any of its Affiliates who voluntarily terminates such employment with Monsanto (or
such Affiliate) after the Effective Date, until three months have passed following termination of
such employment.




          (f) Consideration. The consideration for the agreements contained in this Section 6.13 are
the mutual covenants contained herein, the agreement of the parties to




34









 







consummate the purchase of the Non-Roundup Assets, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged.




          (g) Modification. In the event a court (or other authority) refuses to enforce the covenants
and agreements contained in this Section 6.13, either because of the scope of the geographical area
specified in this Section 6.13, the duration of the restrictions, or otherwise, the parties hereto
expressly confirm their intention that the geographical areas covered hereby, the time period of
the restrictions, or such other provision, be deemed automatically reduced to the minimum extent
necessary to permit enforcement.




          (h) Injunctive Relief. The parties acknowledge and agree that the extent of damages to one
party (the “non-breaching party”) in the event of an actual or threatened breach of this Section
6.13 by the other party (the “breaching party”) may be impossible to ascertain and there may be
available to the non-breaching party no adequate remedy at law to compensate the non-breaching
party in the event of such an actual or threatened breach by the breaching party. Consequently,
the parties agree that, in the event that either party breaches or threatens to breach any such
covenant or agreement, the non-breaching party shall be entitled, in addition to any other remedy
or relief to which it may be entitled, including without limitation, money damages, to seek to
enforce any or all of such agreements or covenants against the breaching party by injunctive or
other equitable relief ordered by any court of competent jurisdiction.




     Section 6.14. Industrial Property.



          (a) Monsanto represents and warrants that Monsanto or Affiliates are the exclusive owners of
the trademarks, trade names, packages, copyrights and designs used in the sale of Roundup Products
(hereinafter referred to as “Industrial Property”). To Monsanto’s knowledge, the conduct of the
Roundup L&G Business as now being conducted and the use of the Industrial Property in the conduct
of the Roundup L&G Business, do not infringe or otherwise conflict with any trademarks,
registrations, or other intellectual property or proprietary rights of others, nor has any claim
been made that the conduct of the Roundup L&G Business as now being conducted infringes or
otherwise is covered by the intellectual property of a third party, except for any conflict or
infringement which would not have a material adverse effect. To the knowledge of Monsanto, none of
the Industrial Property is currently being infringed upon by a third party.




          (b) The Agent acknowledges the validity of the trademarks which designate and identify Roundup
Products. The Agent further acknowledges that Monsanto is the exclusive owner of the Industrial
Property.




          (c) The Agent agrees that, to the extent it uses Industrial Property, such Industrial Property
shall be used in its standard form and style as it appears upon Roundup Products or as instructed
in writing by Monsanto. No other letter(s), word(s), design(s), symbol(s) or other matter of any
kind shall be superimposed upon, associated with or shown in such proximity to the Industrial
Property so as to tend to alter or dilute such Industrial Property,




35









 







and the Agent further agrees
not to combine or associate any of such Industrial Property with any
other industrial property. The generic or common name of “Roundup” must always follow Roundup
Products’ trademarks.




          (d) In all advertisements, sales and promotional or other printed matter in which any
Industrial Property appears, the Agent shall identify itself by full name and address and state its
relationship to Monsanto. In all such material, the Roundup trademark shall be identified as a
trademark owned by Monsanto Company. In the case of a registered trademark, a ® shall be placed
adjacent to the trademark with the ® referring to a footnote reading “® Registered trademark of
Monsanto Company.” In the case of unregistered trademarks, a “TM” shall be placed adjacent to the
trademark with the “TM” referring to a footnote reading “TM Trademark of Monsanto Company.”




          (e) On its letterheads, business cards, invoices, statements, etc., the Agent may identify
itself as a distributor for the Industrial Property.




          (f) The Agent agrees that it will never use any Industrial Property or any simulation of such
Industrial Property as part of the Agent’s corporate or other trading name or designation of any
kind.




          (g) Upon expiration or in the event of any termination of this Agreement, the Agent shall
promptly discontinue every use of the Industrial Property and any language stating or suggesting
the Agent is a distributor for Roundup Products. All advertising and promotional materials which
use Industrial Property shall be destroyed.




          (h) The Agent shall not use or facilitate the use of promotional materials which disparage
Roundup Products or Industrial Property. If the Agent should become aware of any suspected
counterfeiting of Roundup Products or Industrial Property, the Agent shall promptly notify Monsanto
of such suspected counterfeiting. The Agent shall cooperate in any investigation or legal
proceedings that Monsanto deems desirable to protect its rights in the Industrial Property. The
Agent shall not promote the sale of products using trademarks, packages or designs which are in
Monsanto’s opinion deceptively similar to Industrial Property.




     Section 6.15. Conflicts of Interest. Conflicts of interest relating to this Agreement are
strictly prohibited. Except as otherwise expressly provided herein, neither party nor any of its
directors, employees or agents, or its subcontractors or vendors shall give to or receive from any
director, employee or agent of the other party any gift, entertainment or other favor of
significant value, or any commission, fee or rebate. Likewise, neither party nor its directors,
employees or agents or its subcontractors or vendors shall, without prior written notification
thereof to the other party, enter into any business relationship with any director, employee, or
agent of the other party or any of its Affiliates unless such person is acting for and on behalf of
such party. Each party shall promptly notify the other of any violation of this Section 6.15 and
any consideration received as a result of such violation shall be paid over or credited to the
other party.



36









 





     Section 6.16. Records Retention. The Agent and Monsanto shall each maintain true and complete
records in connection with this Agreement and shall retain all such records for at least
forty-eight (48) months following the termination or expiration of this Agreement. This obligation
shall survive the termination or expiration of this Agreement.



ARTICLE 7 — CENTRAL AGREEMENTS




     Section 7.1. Acknowledgment of Central Agreements. The parties acknowledge that Monsanto is a
party to, and bound by the terms and obligations of, the Central Agreements (which are attached
hereto as Exhibit A). Accordingly, the parties acknowledge that (i) some of the terms and
conditions of this Agreement may conflict with the terms and conditions of the Central Agreements,
and/or (ii) some of the terms and conditions of the Central Agreements may conflict with, or be
prohibited by, the terms and conditions of this Agreement. (Every such conflict or prohibited term
or condition within the meaning of clause (i) or (ii) of this Section 7.1 shall collectively be
referred to as a “Conflict”). This Article 7 sets forth the parties’ agreement as to the effect on
this Agreement of such a Conflict.



     Section 7.2. Notice of Termination. Monsanto hereby represents and warrants to the Agent that
on June 26, 1998, Monsanto provided to Central proper notice of Monsanto’s intent to terminate the
Central Agreements, effective September 30, 1999, which such notice is attached hereto as
Exhibit B.



     Section 7.4. Conflict. Notwithstanding anything in this Agreement (or any agreement between
the parties) to the contrary, during the duration of the term of the Central Agreements (as may be
further amended subject to the prior written consent of the Agent), to the extent that any term or
provision (taken alone or in conjunction with any other term or provision) of this Agreement
results in a Conflict (such term(s) or provision(s) being referred to herein as a “Conflicting
Provision”), (i) the provision(s) of the Central Agreement shall control and such Conflicting
Provision shall be unenforceable against all parties to this Agreement during the pendency of such
Conflict, and (ii) neither party shall be considered to be in breach or default of any such
Conflicting Provision, either directly or as a result of such Conflict, on any other terms and
conditions of this Agreement; provided, however, in such instance of a Conflict, all other
provisions of this Agreement (i.e. all provisions, excluding all Conflicting Provisions) shall be
interpreted and enforced in such manner as is reasonable and necessary to further the intentions
and contemplations of this Agreement.



     Section 7.6. Action by Parties and Assignment of Rights. The parties covenant and agree to
jointly develop an approach to establishing arrangements or relationships with Central to account
for any Conflicting Provisions. In this regard, Monsanto covenants and agrees that, upon
notification by the Agent of a Conflict, the Agent may, to the extent reasonable and with the
Steering Committee’s prior written consent (which such consent shall not be unreasonably held),
enter into a contract (or other arrangement) directly (or on behalf of Monsanto) with Central for such
time until September 30, 1999, as the Agent deems necessary so that the parties to this Agreement
can further the intentions and contemplations hereof. Furthermore, Monsanto



37









 





covenants and agrees
that, to the extent reasonable and pre-approved by the Steering Committee (which such approval
shall not be unreasonably held), Monsanto will assign to the Agent any and all rights it has
pursuant to the Central Agreements, which the Agent reasonably requests, if such assignment would
benefit the parties in furthering the intentions and contemplations hereof.




ARTICLE 8 — REPRESENTATIONS, WARRANTIES, AND COVENANTS




     Section 8.1. The Agent’s Representations and Warranties. The Agent hereby represents and
warrants that all of the following are true:



          (a) The Agent is a corporation duly incorporated, validly existing and in good standing under
the laws of Ohio and has all requisite corporate power and authority to carry on and conduct its
business as it is now being conducted, to own or lease its assets and properties and is duly
qualified and in good standing in every jurisdiction in which the conduct of its business or
ownership of its assets requires it to be so qualified.




          (b) (i) The Agent has the full authority and legal right to carry out the terms of this
Agreement; (ii) the terms of this Agreement will not violate the terms of any other material
agreement, contract or other instrument to which it is a party, and no consent or authorization of
any other person, firm, or corporation is a condition precedent to the Agent’s execution of this
Agreement; (iii) it has taken all action necessary to authorize the execution and delivery of this
Agreement; and (iv) this Agreement is a legal, valid, and binding obligation of the Agent,
enforceable in accordance with its terms.




          (c) The Agent is in compliance in all material respects with all applicable Laws relating to
its business.




          (d) There is no material suit, investigation, action or other proceeding pending or threatened
before any court, arbitration tribunal, or judicial, governmental or administrative agency, against
the Agent which would have a material adverse effect on the ability of the Agent to perform its
obligations hereunder or which seeks to prevent the consummation of the transactions contemplated
herein.




          (e) The Agent has available, and will have available on September 30, 1998, sufficient
immediately available funds to enable the Agent to pay the Marketing Fee to Monsanto and to effect
the consummation of the transactions described herein.




          (f) There are no material disputes with underwriters under the Agent’s insurance policies;
each such policy is valid and enforceable in accordance with its terms and is in full force and
effect; there exists no default by the Agent under any such policy, and there has
been no material misrepresentation or inaccuracy in any application therefor, which default,
misrepresentation or inaccuracy would give the insurer the right to terminate such policy, binder,
or fidelity bond or to refuse to pay a claim thereunder; and the Agent has not received notice of
cancellation or non-renewal of any such policy.




38









 








     Section 8.2. Monsanto’s Representations and Warranties. Monsanto hereby represents and
warrants that all of the following are true:



          (a) Monsanto is a corporation duly incorporated, validly existing and in good standing under
the laws of Delaware and has all requisite corporate power and authority to carry on and conduct
its business as it is now being conducted, to own or lease its assets and properties and is duly
qualified and in good standing in every jurisdiction in which the conduct of its business or
ownership of its assets requires it to be so qualified.




          (b) (i) Monsanto has the full authority and legal right to carry out the terms of this
Agreement; (ii) the terms of this Agreement will not violate the terms of any other material
agreement, contract or other instrument to which it is a party, and no consent or authorization of
any other person, firm, or corporation is a condition precedent to this Agreement; (iii) it has
taken all action necessary to authorize the execution and delivery of this Agreement; and (iv) this
Agreement is a legal, valid, and binding obligation of Monsanto, enforceable in accordance with its
terms.




          (c) Monsanto is in compliance, in all material respects, with all applicable Laws relating to
its business.




          (d) There is no material suit, investigation, action or other proceeding pending or threatened
before any court, arbitration tribunal, or judicial, governmental or administrative agency, against
Monsanto which would have a material adverse effect on the ability of Monsanto to perform its
obligations hereunder or which seeks to prevent the consummation of the transactions contemplated
herein.




ARTICLE 9 — INDEMNIFICATION




     Section 9.1. Indemnification and Claims Procedure.



          (a) Indemnification. Each party hereto agrees to indemnify, defend and hold harmless the
other party and its employees, officers, directors, agents and assigns from and against any and all
loss (including reasonable attorneys’ fees), damage, injury or liability and asserted by or on
behalf of a third party for injury to or death of a person for loss of or damage to property,
including employees and property of the indemnified party (“Loss”), to the extent resulting
directly or indirectly from the indemnifying party’s (i) breach of a duty, representation, or
obligation of this Agreement, or (ii) negligence or willful misconduct in the performance of its
obligations under this Agreement, except to the extent that such indemnification is void or
otherwise unenforceable under applicable law in effect on or validly retroactive to the date
of this Agreement.




          (b) Claims Procedure. Promptly after receipt by either party hereto (the “Indemnitee”) of any
notice of any demand, claim or circumstances which, with the lapse of





39









 







time, would or might give
rise to a claim or the commencement (or threatened commencement) of any action, proceeding or
investigation (an “Asserted Liability”) that may result in a Loss, the Indemnitee shall give notice
thereof (the “Claims Notice”) to the party obligated to provide indemnification pursuant to Section
9.1(a). The Claims Notice shall describe the Asserted Liability in reasonable detail, and shall
indicate the amount (estimated, if necessary to the extent feasible) of the Loss that has been or
may be suffered by the Indemnitee. Thereafter, the following procedures shall apply:




               (1) The indemnifying party may elect to compromise or defend, at its own expense by its own
counsel, any Asserted Liability;



               (2) If the indemnifying party elects to compromise or defend such Asserted Liability, it shall
within thirty (30) days (or sooner if the nature of the Asserted Liability so requires) notify the
Indemnitee of its intent to do so, and the Indemnitee shall cooperate, at the expense of the
indemnifying party, in the compromise of, or defense against, such Asserted Liability, and shall
make available to the indemnifying party any books, records or other documents within its control
that are necessary or appropriate for such defense;



               (3) If the indemnifying party has elected to defend the Asserted Liability, any offer to
compromise or settle transmitted to the indemnifying party shall thereafter be transmitted in
writing to the Indemnitee. If, after a reasonable period of time to consider such offer — which
time shall be deemed to be ten (10) days from the date of transmittal of such offer using the
notice procedures set forth in Section 11.9, unless the circumstances otherwise require — the
Indemnitee refuses to give consent to the settlement or compromise of the Asserted Liability, then
the liability of the indemnifying party with respect to such Asserted Liability shall be thereafter
limited to the amount of the offer of settlement or compromise. This cap on liability shall not be
applicable if the Indemnifying Party does not elect to defend Indemnitee against the Asserted
Liability;



               (4) Notwithstanding the foregoing, neither the indemnifying party nor the Indemnitee may
settle or compromise any claim over the objection of the other, provided however, that consent to
settlement or compromise shall not be unreasonably withheld;



               (5) If the indemnifying party elects not to compromise or defend the Asserted Liability, fails
to notify the Indemnitee of its election as herein provided, or contests its obligation to
indemnify under this Agreement, the Indemnitee may pay, compromise or defend such Asserted
Liability, with a reservation of all rights to seek indemnification hereunder against the
indemnifying party; and



               (6) Notwithstanding the foregoing, the Indemnitee and the indemnifying party may participate,
in all instances, and at their own expense, in the defense of any Asserted Liability.



40









 





ARTICLE 10 — TERMS, TERMINATION, AND FORCE MAJEURE




     Section 10.1. Terms. Notwithstanding anything in this Agreement to the contrary, for all EU
Countries within the Included Markets, this Agreement shall be subject to the initial term and the
renewal terms, as set forth in Section 10.2(a) (collectively, the “EU Term”). For all other
countries within the Included Markets, excluding the EU Countries, this Agreement shall commence as
of the Effective Date and shall continue unless and until terminated as provided herein.



     Section 10.2. EU Initial Term and Renewal.



          (a) For each of the EU Countries within the Included Markets, the initial term of this
Agreement shall commence as of the Effective Date, and continue through September 30, 2005, unless
and until sooner terminated as provided herein. Following the initial term of this Agreement, the
parties have the following options to renew the EU Term of this Agreement, subject to Section 10.3
below, under the same terms and conditions of this Agreement, unless and until sooner terminated as
provided herein:




               (1) The parties may mutually agree to renew the initial EU Term of this Agreement for three
(3) years, unless otherwise prohibited herein;



               (2) Following the renewal of the EU Term pursuant to Section 10.2(a)(1), the parties may
mutually agree to renew the EU Term of this Agreement for an additional seven (7) years, unless
otherwise prohibited herein; and



               (3) Following the renewal of the EU Term pursuant to Section 10.2(a)(2), the parties may
mutually agree to renew the EU Term of this Agreement for three (3) years, unless otherwise
prohibited herein.



     Section 10.3. Procedure to Renew.



          EU Term. Not later than 6 months preceding the date in which the initial EU Term, or any
renewal EU Term, of this Agreement terminates pursuant to section 10.2(a), the parties may (if
otherwise permitted herein), mutually agree in writing to renew the EU Term of this Agreement as
provided in Section 10.2(a).




     Section 10.4. Termination by Monsanto.



          (a) Termination Rights. In addition to its right to terminate this Agreement pursuant to
Section 10.9, Monsanto shall have the right to terminate this Agreement by giving the Agent a
termination notice specified for each termination event upon the occurrence and continuance of
either of the following:




               (1) An Event of Default occurring at any time; or



41









 





               (2) A Change of Control with respect to Monsanto (excluding the merger currently contemplated
with American Home Products) or a Roundup Sale by giving the Agent a notice of termination, which
termination shall be effective at the end of the later of twelve (12) months or the next Program
Year, provided that in the event of a Change of Control or a Roundup Sale, neither Monsanto nor the
successor to the Roundup L&G Business shall have the right to terminate this Agreement prior to the
end of the fifth (5th) Program Year.



          (b) Event of Default. An Event of Default shall mean any of the following occurrences:




               (1) a Material Breach of this Agreement committed by the Agent and established in accordance
with the provisions of Section 10.4(g) of this Agreement;



               (2) a Material Fraud committed by the Agent and established in accordance with the provisions
of Section 10.4(g) of this Agreement;



               (3) Material Willful Misconduct committed by the Agent and established in accordance with the
provisions of Section 10.4(g) of this Agreement;



               (4) (i) the occurrence of an Egregious Injury which is not cured within ninety (90) days
following the Agent’s receipt of written notice thereof, or (ii) the occurrence of an Egregious
Injury which, in the commercially reasonable opinion of Monsanto cannot be cured within a ninety
(90) day period;



               (5) subject to Section 10.8, any decline of the Sell-Through Business on a three (3) Program
Years cumulative basis or two (2) consecutive Program Years with a decline in the Sell-Through
Business in each Program Year in excess of five percent (5%) either in North America, the UK or
France or in the Rest of the World, (“Regional Performance Default”) unless Agent demonstrates to
the Arbitrators in accordance with Section 10.4(g), in any manner reasonably requested by the
Arbitrators that (A) such decline is directly caused by the exercise by Monsanto’s Ag president of
his or her right of veto as provided for in Section 4.2(b) or (B) such decline was caused primarily
by a severe decline of the general economic conditions or an overall severe decline in the market
for lawn and garden consumables products in such region rather than by the Agent’s failure to
perform its duties hereunder and further provided that any Regional Performance Default shall only
cause the termination of this Agreement with respect to the region where such Regional Performance
Default occurs;



               (6) the Insolvency of Agent;



               (7) the occurrence of a Change of Control of the Agent, without the prior written consent of
Monsanto; provided that the Acquiror in such Change of Control (i) currently engages (directly or
through its Affiliates) in the manufacture, sale, marketing, or distribution of any product
containing Glyphosate or any similar active ingredient, or (ii) currently sells, markets, or
distributes (directly or through its Affiliates) any product(s) in the



42









 





Lawn and Garden Channels for
Lawn and Garden Use, which such product(s), in Monsanto’s reasonable commercial opinion, compete in
a material manner with Roundup Products, or (iii) may, in Monsanto’s reasonable commercial opinion,
materially detract from, or diminish, the Agent’s (or such successor’s) ability to fulfill its
duties and obligations with regard to the Roundup Business, or (iv) competes in any material
respect with Monsanto in Monsanto’s Ag (including seed) or biotech businesses.




               (8) the occurrence of a Change of Significant Ownership of the Agent, without the prior
written consent of Monsanto; or



               (9) except to the extent permitted herein, (i) the assignment of all, or substantially all, of
the Agent’s rights, or (ii) the delegation of all, or substantially all, of the Agent’s obligations
hereunder, in either instance without the prior written consent of Monsanto.



               As to any Event of Default defined in Sections 10.4(b)(1)-(4), such termination shall take
effect on the later of the first business day following the thirtieth (30th) day after
the sending of a termination notice to the Agent in accordance with the provisions of Section 11.9,
or the date designated by Monsanto in said termination notice. As to an Event of Default defined
in Section 10.4(b)(5), such termination shall take effect at the later of twelve (12) months or the
end of the next Program Year. As to any Event of Default defined in Sections 10.4(b)(6)-(9), such
termination shall take effect on the later of the first business day following the seventh
(7th) day after the sending of a termination notice to Agent, or the date designated by
Monsanto in said notice of termination.



          (c) Payment of Termination Fee. Except for termination of this Agreement by Monsanto upon any
Event of Default, a Termination Fee (as specified in Section 10.4.(d)) shall only be paid either by
Monsanto or by the successor to the Roundup Business, as the case may be, upon the following terms
and conditions:





	 	(1)	 	in the event the Agreement is effectively
terminated by either Monsanto or its successor or by the Agent upon
Material Breach, Material Fraud or Material Willful Misconduct by
Monsanto as provided for in Section 10.5.(c);
	 
	 	(2)	 	no later than the effective date of the
applicable termination notice and no later than the effective date of
the termination; and
	 
	 	(3)	 	only in the event the Agent does not become the
successor to the Roundup Business, in which case the Termination Fee
shall not be paid but shall be credited against the purchase price as
described in Section 10.4(d).




43









 











          (d) Termination Fee.




               Monsanto and the Agent stipulate and agree that the injury which will be caused to the Agent
by the termination of this Agreement under the circumstances which shall give rise to the payment
of the Termination Fee are difficult or impossible of accurate estimation; that by establishing the
Termination Fee they intend to provide for the payment of damages and not a penalty; and that the
sum stipulated for the Termination Fee is a reasonable pre-estimate of the probable loss which will
be suffered by the Agent in the event of such termination.



               The Termination Fee payable shall vary in accordance with the Table hereunder:



	 	 	 
	Program Year	 	Termination Fee
	0-5

	 	$150MM*
	6

	 	$140MM
	7

	 	$130MM
	8

	 	$120MM
	9

	 	$110MM
	10

	 	$100MM
	11-20

	 	Seven and a half percent (7.5%) of the portion of the
purchase price for the Roundup Sale above $1.2 billion (which
shall be no less than $16MM in any event) provided that in
the event of a Change of Control and subsequent termination
of this Agreement by the successor to the Roundup Business
and the absence of any purchase price, the fair market value
of the Roundup Business shall be determined by an independent
accounting firm mutually agreeable to the parties.








 




			
	*	 	$185MM if Monsanto or any successor terminates within the first five (5) years for anything other
than an Event of Default on the part of the Agent.





          (e) Remedies for Monsanto. Subject to Section 10.4(g), in case of termination by Monsanto
upon any of the Events of Default by the Agent specified in Section 10.4(b)(1)-(4), Monsanto shall
be entitled to exercise all remedies available to it, either at law or in equity. In case of
termination by Monsanto upon the Event of Default by the Agent specified in Section 10.4(b)(5),
termination of this Agreement shall be the exclusive remedy of Monsanto. In




44









 







the case of
termination by Monsanto upon any of the Events of Default specified in
Sections 10.4(b)(6)-(9), the remedies of Monsanto shall be limited to (i) termination of this
Agreement and (ii) the recovery of reasonable and customary out-of-pocket expenses incurred by
Monsanto in transferring the Agent’s duties hereunder to a new agent; provided that in no case
shall the amount of expenses recoverable under this provision exceed $20MM.




          (f) Exclusive Remedy. The payment of a Termination Fee to the Agent under Section 10.4(c)
shall be deemed to constitute the exclusive remedy for any damages resulting out of the termination
of this Agreement by Monsanto or the successor to the Roundup Business pursuant to Section 10.4(c)
and the Agent shall waive its right to exercise any other remedies otherwise available at law or in
equity.




          (g) Arbitration. In the event either party claims that a Material Breach, a Material Fraud,
or Material Willful Misconduct has been committed by the other party (the “Breaching Party”), the
following procedures shall apply:




          (1) After the asserted occurrence of a Material Breach, a Material Fraud, or Material Willful
Misconduct, the party who contends that such breach, fraud or misconduct has occurred (the
“Claimant”) shall send to the Breaching Party a notice, in accordance with the notice provisions of
Section 11.9 of this Agreement, in which the Claimant shall: (i) identify the Material Breach,
Material Fraud, or Material Willful Misconduct which it contends has occurred; (ii) appoint an
arbitrator; and (iii) demand that the Breaching Party appoint an arbitrator.




          (2) Within fifteen (15) days after receipt of the notice, the Breaching Party shall send a
response to the Claimant, in accordance with the notice provisions of Section 11.9 of this
Agreement, in which the Breaching Party shall: (i) indicate whether it contests the asserted
occurrence of the Material Breach, Material Fraud, or Material Willful Misconduct, as the case may
be; and (ii) if it does contest such asserted occurrence, appoint a second arbitrator. The failure
on the part of the Breaching Party to timely respond to the notice, and/or to timely appoint its
arbitrator, shall be deemed to constitute acceptance of the arbitrator designated by the Claimant
as the sole arbitrator.




          (3) If the Breaching Party appoints an arbitrator, then within fifteen (15) days after the
receipt of the Breaching Party’s response by the Claimant, the two arbitrators shall jointly
appoint a third arbitrator. If the arbitrators selected by the parties are unable or fail to agree
upon the third arbitrator, the third arbitrator shall be selected by the American Arbitration
Association. Upon their selection by either means, the three arbitrators (the “Arbitrators”) shall
expeditiously proceed to determine whether a Material Breach, Material Default or Material Willful
Misconduct has occurred, in accordance with the procedures hereafter set forth.




          (4) Except as specifically modified herein, the arbitration proceeding contemplated by this
section (the “Arbitration”) shall be conducted in accordance with Title 9 of the US Code (United
States Arbitration Act) and the Commercial Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrators may be





45









 







entered in any court
having jurisdiction thereof. The cost of the Arbitration shall be borne equally by the parties,
with the understanding that the Arbitrators may reimburse the prevailing party, if
any, as determined by the Arbitrators for that party’s cost of the Arbitration in connection with
the award made by the Arbitrators as described below.




          (5) The award shall be made within three (3) months after the appointment of the third
Arbitrator, and each of the Arbitrators shall agree to comply with this schedule before accepting
appointment. However, this time limit may be extended by agreement of the parties or by the
Arbitrators, if necessary.




          (6) Consistent with the expedited nature of arbitration, each party will, upon the written
request of the other party, promptly provide the other with copies of documents relevant to the
issues raised by the notice or the response, including those documents on which the producing party
may rely in support of or in opposition to any claim or defense. Any dispute regarding discovery,
or the relevance or scope thereof, shall be determined by the Arbitrators, which determination
shall be conclusive. All discovery shall be completed within 60 days following the appointment of
the third Arbitrator.




          (7) At the request of a party, the Arbitrators shall have the discretion to order examination
by deposition of witnesses to the extent the Arbitrators deem such additional discovery relevant
and appropriate. Depositions shall be held within 30 days of the making of a request, and shall be
limited to a maximum of number of hours’ duration as may be mutually agreed to by the parties, or
in the absence of such agreement as may be determined by the Arbitrators. All objections are
reserved for the arbitration hearing, except for objections based on privilege and proprietary or
confidential information.




          (8) Either party may apply to the Arbitrators seeking injunctive relief until the arbitration
award is rendered or the controversy is otherwise resolved. Either party also may, without waiving
any remedy under this Agreement, seek from any court having jurisdiction any interim or provisional
relief that is necessary to protect the rights or property of that party, pending the establishment
of the arbitral tribunal (or pending the arbitral tribunal’s determination of the merits of the
controversy).




          (9) The scope of the Arbitration shall include the following:




               (a) a determination as to whether the act(s) or omission(s) set forth by the Claimant have
occurred;



               (b) a determination as to whether those act(s) or omissions(s) determined to have occurred
constitute a breach of this Agreement, fraudulent conduct in connection with this Agreement, or
willful misconduct in connection with this Agreement, as the case may be;



46









 






               (c) a determination as to whether those act(s) or omissions(s) determined to have occurred
constitute a Material Breach, a Material Fraud, or Material Willful Misconduct, as the case may be;



               (d) a determination as to the amount of monetary damages, if any, suffered by the Claimant, as
a result of those act(s) or omissions(s) determined to have occurred which constitute a breach of
this Agreement, fraudulent conduct in connection with this Agreement, or willful misconduct in
connection with this Agreement, as the case may be, regardless of whether such act(s) or
omission(s) rise to the level of Material Breach, Material Fraud, or Material Willful Misconduct,
as the case may be;



               (e) a determination, to the extent applicable, of the specific performance which could and
should be decreed to correct any breach, fraud or material misconduct which the Arbitrators
determine can be cured by the issuance of such decree;



               (f) a determination as to which party, if any, is the prevailing party in the Arbitration, and
the amount of such party’s costs and fees. “Costs and fees” means all reasonable pre-award expenses
of the arbitration, including the arbitrators’ fees, administrative fees, travel expenses,
out-of-pocket expenses such as copying and telephone, court costs, witness fees, and attorneys’
fees; and



               (g) a determination as to such matters as the Arbitrators deem necessary and appropriate to
carry out their duties in connection with the Arbitration.



          (10) The Arbitrators’ award shall be in writing, shall be signed by a majority of the
Arbitrators, and shall include a statement regarding the reasons for the disposition of any claim.




          (11) The Arbitrators’ award shall, as applicable, include the following:




               (a) to the extent that the Arbitrators determine that the Claimant has suffered monetary
damages as a result of those act(s) or omissions(s) determined to have occurred which constitute a
breach of this Agreement, fraudulent conduct in connection with this Agreement, or willful
misconduct in connection with this Agreement, as the case may be, a monetary award in the amount of
those damages;



               (b) to the extent that the Arbitrators determine that the harm resulting from those act(s) or
omissions(s) determined to have occurred can be cured, in whole or in part by a decree of specific
performance, such a decree of specific performance implementing such determination as can be
submitted to and made the order of a Court of competent jurisdiction;



               (c) to the extent that the Arbitrators determine that those act(s) or omissions(s) determined
to have occurred constitute a Material Breach, a Material Fraud, or Material Willful Misconduct, as
the case may be, an award authorizing the Claimant to



47









 





immediately terminate this Agreement,
together with damages or specific performance, if determined by the Arbitrators to be appropriate;




               (d) to the extent that the Arbitrators determine that there is a prevailing party, and that
said prevailing party should receive an award of its Costs and Fees, such award to the prevailing
party; and



               (e) such other matters as the Arbitrators deem necessary and appropriate to implement their
determinations made in the Arbitration.



          (12) The written determination of the Arbitrators shall be made and delivered promptly to the
parties to the Arbitration and shall be final and conclusive upon the parties to the Arbitration.




          (13) Except as may be required by law, neither a party nor an Arbitrator may disclose the
existence, content, or results of any Arbitration hereunder without the prior written consent of
both parties.




     Section 10.5. Termination by the Agent.



          (a) Material Breach, Material Fraud and Material Willful Misconduct. The Agent may terminate
this Agreement in accordance with the provisions of Section 10.4(g) upon :




               (1) a Material Breach of this Agreement committed by Monsanto and established in accordance
with the provisions of Section 10.4(g) of this Agreement;



               (2) a Material Fraud committed by Monsanto and established in accordance with the provisions
of Section 10.4(g) of this Agreement;



               (3) Material Willful Misconduct committed by Monsanto and established in accordance with the
provisions of Section 10.4(g) of this Agreement.


Such termination shall take effect on the later of the first business day following the thirtieth
(30th) day after the sending of a termination notice to Monsanto in accordance with the provisions
of Section 11.9, or the date designated by the Agent in said termination notice.




          (b) Roundup Sale. The Agent may terminate this Agreement by written notice thereof to
Monsanto upon receipt of notice of a Roundup Sale as described in Section 10.6.




          (c) Termination Fee. Upon termination of this Agreement by the Agent pursuant to Section
10.5(a), Monsanto shall pay to the Agent the Termination Fee applicable pursuant to the Table set
forth in Section 10.4.(c).




48









 






     Section 10.6. Roundup Sale.



          (a) Notice of Sale; Quiet Period. Monsanto agrees to provide the Agent with prior written
notice of any contemplated Roundup Sale. Thereafter, the Agent shall be entitled to participate in
the Roundup Sale process, and the parties agree to negotiate in good faith with respect thereto. In
the event of an auction in connection with a contemplated Roundup Sale, the Agent shall be entitled
to submit a bid and additionally shall be entitled to a fifteen (15) day exclusive negotiation
period following the receipt and review by Monsanto of all bids (the “Quiet Period”), provided that
the Agent’s bid shall not be discounted by any Termination Fee and that during the Quiet Period,
the Agent shall have the right to revise its original bid but shall not have the right to review
the terms of any other bids.




          (b) Credit of Termination Fee. In the event that the Agent or any of its Affiliates acquires
the Roundup Business in a Roundup Sale, the Termination Fee that would have been payable to the
Agent upon a termination pursuant to Section 10.4(a)(2) shall be credited against the purchase
price to be paid by the Agent or such Affiliate in the Roundup Sale.




          (c) Agent’s Election. In the event that Monsanto determines to consummate a Roundup Sale with
a party other than the Agent, Monsanto shall deliver the Agent notice thereof and of the identity
of such other party. Within thirty (30) days of receipt of such notice, the Agent shall deliver
written notice to Monsanto stating either that:




               (1) The Agent intends to terminate this Agreement pursuant to Section 10.5(b), in which case
such notice shall constitute a termination notice for purposes of this Agreement provided that the
termination shall be effective at the end of the Third Program Year following the Program Year in
which the Agent delivers its Notice of Termination pursuant to this provision; or



               (2) The Agent will not terminate this Agreement pursuant to Section 10.5(b) and agrees to
continue the performance of its obligations under the Agreement unless and until the Agent receives
a termination notice delivered in accordance with the terms of this Agreement by the successor to
the Roundup Business.



          (d) Successor. Upon consummation of a Roundup Sale to a party other than the Agent,
Monsanto’s successor to the Roundup L&G Business shall assume all rights and responsibilities of
Monsanto under this Agreement.




     Section 10.7. Effect of Termination.



          (a) Nonexclusive Status. Notwithstanding anything contained in this Agreement to the
contrary, during and after any period when Monsanto has given notice of termination in accordance
with Section 10.4(b)(5), (i) Monsanto may make this Agreement nonexclusive with respect to the
sales and marketing services to be provided by the Agent




49









 







hereunder, provided that the sales revenues generated by such second agent shall be included
in Program Sales Revenues and any commercially reasonable commission payable to such second agent
shall be included in Program Expense, (ii) Monsanto shall have access to all information held by
the Agent with respect to the subject matter of this Agreement, and (iii) the Agent shall cooperate
with Monsanto to establish an alternative distribution system for Roundup Products.




          (b) Prior Obligations and Shipments. Termination shall not affect obligations of Monsanto or
of the Agent which have arisen prior to the effective date of termination.




          (c) Representations and Materials. Upon termination of this Agreement for any reason, the
Agent shall not continue to represent itself as Monsanto’s authorized agent to deal in Roundup
Products, and shall remove, so far as practical, any printed material relating to such products
from its salesperson’s manuals and shall discontinue the use of any display material on or about
the Agent’s premises containing any reference to Roundup Products.




          (d) Return of Books, Records, and other Property. To the extent not otherwise provided
herein, upon termination of this Agreement, the Agent shall immediately deliver to Monsanto all
records, books, and other property of Monsanto.




     Section 10.8. Force Majeure.



          If either party is prevented or delayed in the performance of any of its obligations by force
majeure and if such party gives written notice thereof to the other party within twenty (20) days
of the first day of such event specifying the matters constituting force majeure, together with
such evidence as it reasonably can give, then the party so prevented or delayed will be excused
from the performance or punctual performance, as the case may be, as from the date of such notice
for so long as such cause of prevention or delay continues. For the purpose of this Agreement, the
term “force majeure” will be deemed to include an act of God, war, hostilities, riot, fire,
explosion, accident, flood or sabotage; lack of adequate fuel, power, raw materials, containers or
transportation for reasons beyond such party’s reasonable control; labor trouble, strike, lockout
or injunction (provided that neither party shall be required to settle a labor dispute against its
own best judgment); compliance with governmental laws, regulations, or orders; breakage or failure
of machinery or apparatus; or any other cause whether or not of the class or kind enumerated above,
including, but not limited to, a severe economic decline or recession, which prevents or materially
delays the performance of this Agreement in any material respect arising from or attributable to
acts, events, non-happenings, omissions, or accidents beyond the reasonable control of the party
affected.




     Section 10.9. Special Termination Provisions.



     (a) In the event the parties fail to close the sale by Monsanto to the Agent of the
Non-Roundup Assets by the later of March 31, 1999 or such later date as mutually agreed upon by the
parties, the parties agree:



50









 





          (1) Monsanto may elect to terminate this Agreement by giving notice of such termination to the
Agent in accordance with the provisions of Section 11.9 of this Agreement on the later of (k) March
31, 1999 and (y) fifteen (15) calendar days after termination of the Asset Purchase Agreement
between Monsanto and the Agent, with respect to the sale of the Non-Roundup Assets, pursuant to the
terms thereof to Agent in accordance with the provisions of Section 11.9 of this Agreement. Any
such termination shall be effective on September 30, 1999. In such event, (i) there shall be no
deferral under Section 3.5(b) of the Contribution Payment required to be made by Agent, (ii) the
MAT Expenses in the Annual Business Plan for the 1999 Program Year shall be $35MM, and the Netbacks
for the 1999 Program Year shall not exceed twelve percent (12%) of Program Sales Revenues unless
already committed as the Effective Date and (iii) the Agent’s Commission specified in Section 3.6
shall not be applicable and, in lieu thereof, the Agent’s commission shall, effective as of October
1, 1998, be twenty-eight percent (28%) of Program Sales Revenue, payable quarterly within fifteen
(15) days following the end of each quarter, with each quarterly payment being in an amount not to
exceed the cumulative percentage of the maximum applicable commission apportioned at twenty-five
percent (25%) per quarter, subject to the following limitations:




               (A) A maximum commission of $52MM per Program Year if such closing does not occur because the
Agent has not sold or divested its Finale business or otherwise disposed of the Finale business in
a manner satisfactory to Monsanto;



               (B) A maximum commission of $55MM per Program Year if such closing does not occur because the
Federal Trade Commission issues an order prohibiting the purchase of the Non-Roundup Assets by the
Agent; and



               (C) A maximum commission of $53.5MM per Program Year if such closing does not occur for any
other reason than specified in clauses (A) or (B) above.



          (b) In the event that Monsanto terminates this Agreement pursuant to Section 10.9(a)(1), the
provisions of this Section 10.9 shall supersede Section 3.6 and Section 10.4 in their entirety.




          (c) In the event that Monsanto elects not to terminate this Agreement pursuant to Section
10.9(a)(1), (i) there shall be no deferral under Section 3.5(b) of the Contribution Payment, (ii)
the Agent’s commission shall, for Program Year 1999, be calculated as provided in Section
10.9(a)(1) at a maximum commission of $53.5MM and in Program Year 2000 and thereafter the Agent’s
commission shall be the Commission specified in Section 3.6; (iii) Section 10.4(a)(2) shall be
amended to the effect that Monsanto or any successor shall have the right to terminate this
Agreement at any time upon a Change of Control with respect to Monsanto or a Roundup Sale by giving
the Agent a notice of termination which shall be effective at the end of the later of twelve (12)
months or the next Program Year; and (iv) the Agent shall not be entitled to any the Termination
Fee as specified in Section 10.4(d), but rather, subject to Section 10.4(g), the Agent shall be
entitled to exercise all remedies available to it either at law or in equity for any breach of this
Agreement by Monsanto.




51









 







ARTICLE 11 — MISCELLANEOUS




     Section 11.1. Relationship of the Parties. Notwithstanding anything herein to the contrary,
the parties’ status with respect to each other shall be, at all times during the term of this
Agreement, that of independent contractors retaining complete control over and complete
responsibility for their respective operations and employees. Except as expressly provided herein,
this Agreement shall not confer, nor shall be construed to confer, on either party any right, power
or authority (express or implied) to act or make representations for, or on behalf of, or to assume
or create any obligation on behalf of, or in the name of the other party. Nothing in this
Agreement shall confer, or shall be construed to: (i) confer on the Agent any mutual proprietary
interest in, or subject the Agent to any liability for, the business, assets, profits, losses, or
obligations associated with Monsanto’s manufacture, marketing, distribution and sales of Roundup
Products; (ii) otherwise make either party a partner, member, or joint venturer of the other party
(A) for purposes of the tax laws of the United States or any other country, or (B) for any other
purposes under any other Laws; or (iii) create a franchise relationship between the parties. The
parties expressly agree that at no time during the term of this Agreement, shall either party
through its officers, directors, agents, employees, independent contractors or other
representatives or through their respective representatives on the Steering Committee or Global
Roundup Team take any action inconsistent with the foregoing expression of the nature of their
relationship, except as required pursuant to applicable governmental authority under applicable Law
or with the express written consent of the other party. Accordingly, the parties expressly agree
to cooperate and communicate with the Steering Committee and the Global Roundup Support Team from
time to time and in all events, annually, to ensure that both parties’ actions are in compliance
with this Section 11.1



     Section 11.2. Interpretation in accordance with GAAP. The parties acknowledge that several
terms and concepts (such as various financial and accounting terms and concepts) used or referred
to herein are intended to have specific meanings and are intended to be applied in specific ways,
but they are not so expressly and fully defined and explained in this Agreement. In order to
supplement definitions and other provisions contained in this Agreement and to provide a means for
interpreting undefined terms and applying certain concepts, the parties agree that, except as
expressly provided herein, when costs are to be determined or other financial calculations are to
be made, GAAP as well as the party’s past accounting practices shall be used to interpret and
determine such terms and to apply such concepts. For example, when actual costs and expenses are
referred to herein, they are not intended to contain any margin or profit for the party incurring
such costs or expenses.



     Section 11.3. Currency. All amounts payable and calculations under this Agreement shall be in
United States dollars. As applicable, Program Sales Revenue, Program Expenses, Cost of Goods Sold,
Service Costs, and Program EBIT shall be translated into United States dollars at the rate of
exchange at which United States dollars are listed in International Financial Statistics
(publisher, International Monetary Fund) or if it is not available, The Wall Street



52









 





Journal
for the currency of the country in which the sales were made or
the transactions occurred at the average rate of exchange for the Quarter in which such sales
were made or transactions occurred.




     Section 11.4. Monsanto Obligations. All permits, licenses, and registrations needed for the
sale of Roundup Products shall be obtained by Monsanto. Monsanto shall assume the cost of all
federal and state registration fees related to the sale of Roundup Products, with such costs being
included within Program Expenses.



     Section 11.5. Expenses. Except as otherwise specifically provided in this Agreement, the
Agent and Monsanto will each pay all costs and expenses incurred by each of them, or on their
behalf respectively, in connection with this Agreement and the transactions contemplated hereby,
including fees and expenses of their own financial consultants, accountants and counsel.



     Section 11.6. Entire Agreement. This Agreement, together with all respective exhibits and
schedules hereto, constitutes the entire agreement between the parties hereto pertaining to the
subject matter hereof and supersedes all representations, warranties, understandings, terms or
conditions on such subjects that are not set forth herein or therein. Agreements on other
subjects, such as security and other credit agreements or arrangements, shall remain in effect
according to their terms. The parties recognize that, from time to time, purchase orders, bills of
lading, delivery instructions, invoices and similar documentation will be transmitted by each party
to the other to facilitate the implementation of this Agreement. Any terms and conditions
contained in any of those documents which are inconsistent with the terms of this Agreement shall
be null, void and not enforceable. This Agreement is for the benefit of the parties hereto and is
not intended to confer upon any other person any rights or remedies hereunder. The provisions of
this Agreement shall apply to each division or subsidiary of the Agent and Monsanto and either the
Agent or Monsanto may seek enforcement of the provisions of this Agreement on behalf of or with
respect to a particular subsidiary or division without changing the rights and obligations of the
parties under this Agreement as to other aspects of the Agent’s or Monsanto’s business.



     Section 11.7. Modification and Waiver. No conditions, usage of trade, course of dealing or
performance, understanding or agreement purporting to modify, vary, explain or supplement the terms
or conditions of the Agreement and no amendment to or modification of this Agreement, and no waiver
of any provision hereof, shall be effective unless it is in writing and signed by each party
hereto. No waiver by either Monsanto or the Agent, with respect to any default or breach or of any
right or remedy, and no course of dealing shall be deemed to constitute a continuing waiver of any
other breach or default or of any other right or remedy, unless such waiver be expressed in writing
signed by the party to be bound.



     Section 11.8. Assignment. This Agreement is personal to the Agent and, except as set forth in
Section 2.3, the Agent shall not assign any rights or delegate any duties that the Agent has or may
have under this Agreement, either voluntarily,
involuntarily by operation of law or otherwise by sale, assignment, transfer, delegation or
other arrangement having similar effect, without Monsanto’s prior written consent except as
specifically provided herein.



53









 





     The Agent agrees to the assignment of the Agreement to the new legal entity that shall be
formed as a result of the merger between Monsanto Company and American Home Products.



     Section 11.9. Notices. All notices and other communications hereunder shall be in writing and
shall be deemed given on the same business day if delivered personally or sent by telefax with
confirmation of receipt, on the next business day if sent by overnight courier, or on the earlier
of actual receipt as shown on the registered receipt or five business days after mailing if mailed
by registered or certified mail (return receipt requested) to the parties at the addresses set
forth below (or at such other address for a party as shall be specified by like notice):



	 	 	 	 	 
	 

	 	If to the Agent, to:
	 	The Scotts Company
	 

	 	 	 	14111 Scottslawn Road
	 

	 	 	 	Marysville, OH 43041
	 

	 	 	 	Attn: President
	 

	 	 	 	Telephone: (937) 644-0011
	 

	 	 	 	Facsimile No.: (937) 644-7136
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Vorys, Sater, Seymour and Pease LLP
	 

	 	 	 	52 East Gay Street
	 

	 	 	 	Columbus, Ohio 43215
	 

	 	 	 	Attn: Ronald A. Robins, Jr.
	 

	 	 	 	Telephone: (614) 464 — 6223
	 

	 	 	 	Facsimile: (614) 464 — 6350
	 
	 	 	 	 
	 

	 	If to Monsanto, to:
	 	Monsanto Company
	 

	 	 	 	800 North Lindbergh Boulevard
	 

	 	 	 	St. Louis, MO 63167
	 

	 	 	 	Attn: Monsanto Ag President
	 

	 	 	 	Telephone: (314) 694-1000
	 

	 	 	 	Facsimile No.: (314) 694-2120
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Monsanto Company
	 

	 	 	 	800 North Lindbergh Boulevard
	 

	 	 	 	St. Louis, Missouri 63167
	 

	 	 	 	Attn: Ag Counsel
	 

	 	 	 	Telephone: (314)694-2851
	 

	 	 	 	Facsimile No.: (314) 694 — 2920





If any notice required or permitted hereunder is to be given a fixed amount of time before a
specified event, such notice may be given any time before such fixed amount of time (e.g., a




54









 






notice
to be given 30 days prior to an event may be given at any time longer than 30 days prior to such
event).




     Section 11.10. Severability. If any provision of this Agreement is determined to be invalid
or unenforceable, in whole or in part, under a judgment, Law or statute now or hereafter in effect,
the remainder of this Agreement shall not thereby be impaired or affected.



     Section 11.11. Equal Opportunity. To the extent applicable to this Agreement, Monsanto and
the Agent shall each comply with the following clauses contained in the Code of Federal Regulations
and incorporated herein by reference: 48 C.F.R. §52.203-6 (Subcontractor Sales to Government); 48
C.F.R. §52.219-8, 52.219-9 (Utilization of Small and Small Disadvantaged Business Concerns); 48
C.F.R. §52.219-13 (Utilization of Women-Owned Business Concerns); 48 C.F.R. §52.222-26 (Equal
Opportunity); 48 C.F.R. §52.222-35 (Disabled and Vietnam Era Veterans); 48 C.F.R. §52.222-36
(Handicapped Workers); 48 C.F.R. §52.223-2 (Clean Air and Water); and 48 C.F.R. §52.223-3
(Hazardous Material Identification and Material Safety Data). Unless previously provided, if the
value of this Agreement exceeds $10,000, the Agent shall provide a Certificate of Nonsegregated
Facilities to Monsanto. Furthermore, Monsanto and the Agent shall each comply with the Immigration
Reform and Control Act of 1986 and all rules and regulations issued thereunder. Each party hereby
certifies, agrees and covenants that none of its employees or employees of its subcontractors who
perform work under this Agreement is or shall be unauthorized aliens as defined in the Immigration
Reform and Control Act of 1986, and each party shall defend, indemnify and hold the other party
harmless from any and all liability incurred by or sought to be imposed on the other party as a
result of the first party’s failure to comply with the certification, agreement and covenant made
by such party in this Section.



     Section 11.12. Governing Law.



          (a) The validity, interpretation and performance of this Agreement and any dispute connected
with this Agreement will be governed by and determined in accordance with the statutory, regulatory
and decisional law of the State of Delaware (exclusive of such state’s choice of laws or conflicts
of laws rules) and, to the extent applicable, the federal statutory, regulatory and decisional law
of the United States.




          (b) Any suit, action or proceeding against any party hereto with respect to the subject matter
of this Agreement, or any judgment entered by any court in respect thereof, must be brought or
entered in the United States District Court for the District of Delaware, and each such party
hereby irrevocably submits to the jurisdiction of such court for the purpose of any such suit,
action, proceeding or judgment. If such court does not have jurisdiction over the subject matter
of such proceeding or, if such jurisdiction is not available, then such action or proceeding
against any party hereto shall be brought or entered in the Court of Chancery of the State of
Delaware, County of New Castle, and each party hereby irrevocably submits to the
jurisdiction of such court for the purpose of any such suit, action, proceeding or judgment.
Each party hereto hereby irrevocably waives any objection which either of them may now or hereafter




55









 






have to the laying of venue of any suit, action or proceeding arising out of or relating to this
Agreement brought as provided in this subsection, and hereby further irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. To the extent each party hereto has or hereafter may acquire any immunity from
jurisdiction of any court or from legal process with respect to itself or its property, each party
hereto hereby irrevocably waives such immunity with respect to its obligations under this
subsection. Except as otherwise provided herein, the parties hereto agree that exclusive
jurisdiction of all disputes, suits, actions or proceedings between the parties hereto with respect
to the subject matter of this Agreement lies in the United States District Court for Delaware, or
the Court of Chancery of the State of Delaware, County of new Castle, as hereinabove provided. The
Agent hereby irrevocably appoints CT Corporation, having an address at 1209 Orange Street,
Wilmington, Delaware 19801 and Monsanto hereby irrevocably appoints CT Corporation, having an
address at 1209 Orange Street, Wilmington, Delaware 19801, as its agent to receive on behalf of
each such party and its respective properties, service of copies of any summons and complaint and
any other pleadings which may be served in any such action or proceedings. Service by mailing (by
certified mail, return receipt requested) or delivering a copy of such process to a party in care
of its agent for service of process as aforesaid shall be deemed good and sufficient service
thereof, and each party hereby irrevocably authorizes and directs its respective agent for service
of process to accept such service on its behalf.




     Section 11.13. Public Announcements. No public announcement may be made by any person with
regard to the transactions contemplated by this Agreement without the prior consent of the Agent
and Monsanto, provided that either party may make such disclosure if advised by counsel that it is
required to do so by applicable law or regulation of any governmental agency or stock exchange upon
which securities of such party are registered. The Agent and Monsanto will discuss any public
announcements or disclosures concerning the transactions contemplated by this Agreement with the
other parties prior to making such announcements or disclosures.



     Section 11.14. Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which taken together shall be constitute one and
the same agreement.



[signature page to follow]




56









 






     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first above mentioned.



	 	 	 	 	 	 	 	 	 
	 	 	THE MONSANTO COMPANY	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Arnold W. Donald	 	 
	 	 	 	 	 	 	 
	 	 	Name: Arnold W. Donald	 	 
	 	 	Title: Senior Vice-President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	THE SCOTTS COMPANY	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ James Hagedorn	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	James Hagedorn	 	 
	 	 	Title:	 	Executive Vice President,	 	 
	 

	 	 	 	 	 	U.S. Business Groups	 	 






57









 






LIST OF EXHIBITS TO AMENDED AND RESTATED EXCLUSIVE AGENCY AND MARKETING AGREEMENT

Dated as of September 30, 1998

Between Monsanto Company and The Scotts Company



Exhibit A:       Central Agreements

Exhibit B:       Termination Notice Regarding Central Agreements

Exhibit C:       Letter Agreement Regarding Plastid Transformation Technology and Associated Genes

Exhibit D:       Permitted Products




LIST OF SCHEDULES




	 	 	 	 	 
	 

	 	Schedule 1.1(a):
	 	Included Markets
	 

	 	Schedule 1.1(b):
	 	Roundup Products
	 

	 	Schedule 2.2(a)(ii):
	 	Transition Services (to be provided)
	 

	 	Schedule 2.2(a):
	 	Annual Business Plan Format
	 

	 	Schedule 3.1:
	 	Services Outside North America (to be provided)
	 

	 	Schedule 3.2(d):
	 	Cash Flow Chart
	 

	 	Schedule 3.3(c):
	 	Income Statement Definitions and Allocation Methods
	 

	 	Schedule 3.8:
	 	Current Sales of 2.5 Gallon SKU into the Lawn & Garden Channels
	 

	 	Schedule 4.1(a):
	 	Management Structure
	 

	 	Schedule 4.2(a):
	 	Steering Committee
	 

	 	Schedule 4.3(b):
	 	Assigned Employees
	 

	 	Schedule 4.4(a):
	 	Global Support Team





The Schedules, Exhibits and Channels to the Amended and Restated Exclusive Agency and Marketing
Agreement have not been filed. Titles to the omitted Schedules, Exhibits and Channels appear
above. The Registrant hereby agrees to furnish supplementally a copy of any omitted Schedule or
Exhibit to the Securities and Exchange Commission upon its request.



[confidentiality request, to come]




58









 






SCHEDULE 1.1(a)

Included Markets




U.S.

Belgium

Denmark

Norway

Sweden

EIRE

France

Germany

Netherlands

Canada

Australia

Puerto Rico

U.K.

Austria

Finland

Luxemburg





 









 








SCHEDULE 1.1(b)

Roundup Products




	 	 	 	 	 	 	 
	 	 	Formulation	 	Size
	United States and Puerto Rico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup RTU

	 	 	2% or less
	 	2 gal or less
	Roundup Concentrate

	 	 	18%
	 	1 gal or less
	Roundup Tough Weed

	 	 	27%
	 	1 gal or less
	Roundup Super Conc.

	 	 	41%
	 	1 gal or less
	Roundup Aerosol

	 	 	2% or less
	 	2 gal or less
	Roundup Edger

	 	 	2% or less
	 	2 gal or less
	Kleeraway RTU

	 	 	1% or less
	 	1 gal or less
	Kleeraway Conc.

	 	 	7.5% or less
	 	1/2 gal or less
	Grower’s Choice
	 	 	 	 	 	 
	Pennington Pride

	 	 	1% or less RTU
	 	1 gal or less RTU
	Green Charm Knock Out

	 	 	7.5% or less Conc.
	 	1/2 gal or less Conc.
	Bullseye
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Belgium
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup Alphee

	 	 	7.2 g/l	 	 	3 1 or less
	Roundup 60

	 	 	60 g/l	 	 	500 ml or less
	Roundup 120

	 	 	120 g/l	 	 	500 ml or less
	Roundup Ultra

	 	 	360 g/l	 	 	500 ml or less
	Howdown

	 	 	120 g/l	 	 	500 ml or less
	Quickclaim

	 	 	120 g/l	 	 	500 ml or less
	 
	 	 	 	 	 	 
	Denmark
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup Spray

	 	 	7.2 g/l	 	 	3 1 or less
	Roundup Gdn Plus

	 	 	120 g/l	 	 	1 1 or less
	 
	 	 	 	 	 	 
	Norway
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup Spray

	 	 	7.2 g/l	 	 	3 l or less
	Roundup Garden

	 	 	120 g/l	 	 	250 ml or less
	 
	 	 	 	 	 	 
	Sweden
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup Spray

	 	 	7.2 g/l	 	 	3 l or less
	Roundup Garden

	 	 	120 g/l	 	 	1 l or less






 









 






	 	 	 	 	 	 	 
	EIRE
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup RTU

	 	 	7.2 g/l	 	 	3 1 or less
	Roundup GC

	 	 	120 g/l	 	 	500 ml or less
	 
	 	 	 	 	 	 
	France
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup Alphee

	 	 	7.2 g/l	 	 	3 l or less
	Roundup Pro 2

	 	 	360 g/l	 	 	1 l or less
	Roundup 3 p

	 	 	170 g/l	 	 	1 l or less
	Roundup GT

	 	 	400 g/l	 	 	.91, 451
	Goliath

	 	 	360 g/l	 	 	500 ml or less
	Goliath CJ

	 	 	120 g/l	 	 	1 l or less
	Herbivorax 90

	 	 	90 g/l	 	 	1 l or less
	Kommando

	 	 	100 g/l	 	 	1 l or less
	 
	 	 	 	 	 	 
	Germany
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup Alphee

	 	 	7.2 g/l	 	 	1 l or less
	Roundup L B Plus

	 	 	360 g/l	 	 	125 ml or less
	Roundup Ultra Gran

	 	 	420 g/l	 	 	15.5g
	 
	 	 	 	 	 	 
	Netherlands
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup RTU

	 	 	7.2 g/l	 	 	1 l or less
	Roundup H&T

	 	 	360 g/l	 	 	125 ml
	 
	 	 	 	 	 	 
	Canada
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup RTU

	 	2% or less	 	 	4 l or less
	Roundup Concentrate

	 	 	18%		 	1 l or less
	Roundup Super Conc.

	 	 	41%		 	1 l or less
	 
	 	 	 	 	 	 
	Australia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup RTU

	 	 	7.2 g/l	 	 	3 l or less
	Roundup

	 	 	360 g/l	 	 	1 l or less
	 
	 	 	 	 	 	 
	United Kingdom
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup RTU

	 	 	7.2 g/l	 	 	3 l or less
	Roundup Brushkiller

	 	 	120 g/l	 	 	1 l or less
	Roundup Brushkiller RTU

	 	 	7.2 g/l	 	 	1 l or less
	Roundup GC Biactive

	 	 	120 g/l	 	 	1 l or less
	Roundup Ultra 3000

	 	 	360 g/l	 	 	1 l or less
	B&Q Complete Weed Killer RTU

	 	 	7.2 g/l	 	 	3 l or less






 









 






	 	 	 	 	 	 	 
	B&Q Complete Weed Killer

	 	 	45.2 g/l	 	 	1 l or less
	 
	 	 	 	 	 	 
	Austria
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup LB Plus

	 	 	360 g/l	 	 	125 ml or less
	 
	 	 	 	 	 	 
	Finland
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Roundup Spray

	 	 	7.2 g/l	 	 	3 l or less
	Roundup Bio

	 	 	120 g/l	 	 	1 l or less






 









 






SCHEDULE 2.2(a)

Annual Business Plan Template



 


	1)	 	Mission Statement and Explanation: Answers questions: What business are we in? Why does the
business exist?






	2)	 	Category Definition/Growth Trend: Also need to address related categories and their
potential interaction with the target category






		a)	 	Assessment of growth potential

	
		b)	 	Competitor evaluation/assessment of threat






	3)	 	Business Review: Summary of a process that will occur in each preceding January






		a)	 	Critical learning from prior year

	
		b)	 	Key Implications from learning: Arranged by key functional area






	4)	 	Brand Positioning:






		a)	 	Consumer Target: Demographics, Psychographics, use Segmentation
	
		b)	 	Key feature(s), Attribute(s) and Benefits delivered (for brand and sub-brands)
	
		c)	 	Brand Character/Imagery: Describe the personification of the brand/sub-brands






	 	i)	 	This section should also specifically address the degree to
which the proposed positioning is consistent with the Brand’s historical image






	5)	 	Key Business Goals






		a)	 	Financial: Historical trend and three year projections of Equivalent Case
Volume, Net Sales, EBIT and ACM
	
		b)	 	Competitive:






	 	i)	 	Market Share Goal and trend

	
	 	ii)	 	Advertising Share of Voice Goal and trend






		c)	 	Consumer: Critical behavioral and attitudinal measures that describe the
development of the Brand which could include:






	 	i)	 	Penetration
	
	 	ii)	 	Unaided awareness
	
	 	iii)	 	Annual usage
	
	 	iv)	 	Seasonal usage






		d)	 	Customer:






	 	i)	 	% ACV Distribution by Channel
	
	 	ii)	 	Fill Rates by Top 10 customers (with detailed definition of
what constitutes an on-time shipment)
	
	 	iii)	 	Display achievement

	
	 	iv)	 	Other measurable customer satisfaction measures






	6)	 	Major Strategies to achieve Key Goals (some examples include...)






		a)	 	Product Line: What products/drive groups/lines to focus on
	
		b)	 	Significant new product launches
	
		c)	 	Private Label at a Key Account(s)
	
		d)	 	Marketing Support focus: Example would be a shift from advertising to
promotion
	
		e)	 	New Consumer Uses: Extended use campaign, new forms

	
		f)	 	Geographic focus including a new regional/market emphasis. CDI/BDI analysis
	
		g)	 	Seasonal focus including new emphasis if relevant. Weekly seasonality by
region and drive group/item.
	
		h)	 	Channel/Customer including new/alternative channels if relevant
	
		i)	 	Operational strategies to address quality, capacity, cost position, service,
technology application, etc., including fill rates, inventory levels and turns
	
		j)	 	Acquisition/divestiture strategies to improve market position










 









 












	7)	 	Functional Operating Plans: This is a lengthy section that lays out a detailed annual
operating plan for each functional area in the business (including rationale where
appropriate) and that pays particular attention to changes in that plan from the prior year’s
plans and results. Each section will contain a detailed budget with direct and assigned
expenses shown.






	 	a)	 	General Management: Description of Business Unit Management team and planned
costs






	 	i)	 	Performance standards for all employees
	
	 	ii)	 	Description of employee performance incentives and link to
performance standards






	 	b)	 	Marketing:






	 	i)	 	Organization Plan
	
	 	ii)	 	Spending allocation: Total spending by marketing support
category including working and non-working media, consumer promotion, public
relations, market research, etc.
	
	 	iii)	 	Advertising: Preliminary media plan including spending trends,
creative strategy and discussion of any planned/contemplated changes to that
strategy.
	
	 	iv)	 	Consumer Promotion: Promotion objectives, key plan elements
and payout calculations
	
	 	v)	 	POP Plan: Focus on Key changes versus prior year plan

	
	 	vi)	 	Pricing: To include trends and competitive benchmarks
	
	 	vii)	 	Packaging — graphic and physical: Changes planned along with
specific costs, implementation timing and risk factors
	
	 	viii)	 	Market Research plan: List all studies, cost estimate and
rationale for each, including tracking
	
	 	ix)	 	Public Relations

	
	 	x)	 	Test plans (applies to all of above)






	 	c)	 	Sales:






	 	i)	 	Organization Plan

	
	 	ii)	 	Top 5 Account Plans






		(1)	 	Program changes anticipated
	
	 	(2)	 	Planned Net Sales trends by drive group/item
(with historical trend)
	
	 	(3)	 	Profitability analysis

	
	 	(4)	 	Category Management plans







	 	iii)	 	Five year sales goals

	
	 	iv)	 	Private Label/control brand opportunities
	
	 	v)	 	Headquarter Sales Presentation plan with a focus on what the
key messages are and discussion of any unique methods of communication to
customers
	
	 	vi)	 	Retail Merchandising Support including planned in-house,
distributor and contracted merchandising services. Focus on in-store
merchandising and display techniques as well as pre-season store set plans






		(1)	 	Share of shelf

	
	 	(2)	 	Share of off-shelf







	 	vii)	 	Other selling services plans as appropriate

	
	 	viii)	 	Product Knowledge Plan including principle target(s) and vehicles






	 	d)	 	Operations:






	 	i)	 	Organization Plan
	
	 	ii)	 	Key Manufacturing initiatives such as: Cost savings, capacity
planning, make/buy analyses, etc.
	
	 	iii)	 	Distribution/Warehousing Plan
	
	 	iv)	 	Inventory plan by month (versus prior year) that balances the
need for high fill rates with a product utilization of working capital.
Targets to be included in plan.




 









 












	 	v)	 	Purchasing: Including Key supplier relationship development
	
	 	vi)	 	Quality: Measurement and delivery against objectives from
balanced scorecard
	
	 	vii)	 	Capital Plan with capital expenditure detail






	 	e)	 	Research & Development:






	 	i)	 	Organization/Staffing Plan
	
	 	ii)	 	Priority projects and innovation pipeline — new product portfolio review
	
	 	iii)	 	Innovation launch timeline
	
	 	iv)	 	Product specifications and planned changes
	
	 	v)	 	Pioneering Research






	 	f)	 	Customer Service:






	 	i)	 	Organization Plan

	
	 	ii)	 	Special Programs such as telemarketing
	
	 	iii)	 	Discussion of and key changes to order taking, order processing
invoicing, collection, reconciliation (to original P0 and program) procedures






	 	g)	 	Consumer Service:






	 	i)	 	Organization plan including a discussion of outsourced versus
in-house services
	
	 	ii)	 	Call volume and measurement of answering efficiency and
effectiveness
	
	 	iii)	 	Plan for communicating to marketing and operations any
significant consumer complaints






	8)	 	Detailed Financials — Prior Year, Current Year, Future Year






	 	a)	 	Income Statement (annual and monthly), cash flow and balance sheet
	
	 	b)	 	Net Sales and margins by key drive group/item, and including product mix
analysis
	
	 	c)	 	Selling and Marketing Expenses by key line item
	
	 	d)	 	Assignment of Shared Services: This section will discuss the agreed upon
allocation methodology for shared services to their respective Business Unit statements
and highlights any proposed changes to that methodology
	
	 	e)	 	Anticipated changes form prior year

	
	 	f)	 	Financial Metrics






	 	i)	 	Invoice accuracy






	 	ii)	 	Days Sales Outstanding (DSO)
	
	 	iii)	 	Obsolete inventory charge
	
	 	iv)	 	Bad debt allowance
	
	 	v)	 	Netbacks, MAT and COGS detail prior, current and next year






	9)	 	Approved amendments: This section will show any amendments approved by senior management (or
the Steering Committee)






	 	a)	 	Includes spending at levels above those established in the annual business plan.






 











 







SCHEDULE 2.2(a)(ii)

Transition Services




     The parties agree that it is unnecessary to describe in detail the transition services called
for by this Schedule 2.2(a)(ii); rather, the parties agree that these services shall be provided in
good faith based on the past practices of the Solaris business unit of Monsanto.



 









 






SCHEDULE 3.1(a)

Accounting And Cash Flow Procedures Outside The United States




I.     Europe



The following terms shall govern operations of the Roundup L&G Business in Europe in place of
Sections 3.1 through 3.3 of the Agreement. The remainder of the terms of Article 3 of the

Agreement shall apply to the operations for the European Roundup L&G Business.




       Section 3.1.       Bookkeeping and Financial Reporting.



                         (a)      Bookkeeping. Monsanto shall be responsible for all the bookkeeping for the Roundup L&G
Business, which shall include, but not be limited to, (i) setting up a separate set of accounting
records reflecting all the items of income, profit, gain, loss and deduction with respect to the
Roundup L&G Business, including a profit and loss statement (“Roundup P&L”) and all other records
relating to the Roundup L&G Business, including sales invoices and customer data (the “Roundup
Records”) in accordance with Monsanto’s accounting policies (including the currency exchange
methodology used by Monsanto); provided, that if any change in Monsanto’s accounting policies would
adversely affect the Agent’s Commission (other than in a de minimis amount), the parties shall
negotiate in good faith to change the thresholds and/or the Commission, as appropriate, to
eliminate such adverse affect; (ii) collecting, recording and safeguarding receipts of all
receivables and payables, costs or expenses either directly incurred by the Roundup L&G Business or
Allocated thereto by either party pursuant to the terms of Section 3.3 hereof. At all times,
Monsanto shall make available via computer and/or original documentation, to the Agent’s employees
designated by the Agent, access to the Roundup Records as appropriate on a need-to-know basis, and
such access shall include, but not be limited to, daily sales updates.



                         (b)      Financial Reporting. Monsanto shall provide to the Agent financial reports for the
Roundup L&G Business based on Monsanto’s current practice and timing.



                         (c)      Audit. The Agent shall have the right to periodically audit or have an independent
accountant audit, on the Agent’s behalf, all the Roundup Records. The audit shall be at the cost
of the Agent unless any material error has been committed by Monsanto, in which case Monsanto shall
bear the cost of the audit. Upon exercise of its right of audit, and discovery of any disputed
item, the Agent shall provide written notice of dispute to Monsanto. The parties shall resolve
such dispute in the manner set forth in Section 3.4 hereof.



       Section 3.2.       Ordering, Invoking and Cash Flow Cycle.



                         (a)      Ordering and Invoicing. Monsanto shall perform all order taking, order processing and
invoicing for the Roundup Products. Orders filled for Roundup Products shall be invoiced on
invoices, or an EDI version thereof, which shall include all taxes (other than Income Taxes),
duties, and other charges imposed by governmental authorities based on the production or sale of
Roundup Products or their ownership or transportation to the place and time of sale, based on
Monsanto’s past practices for such products.



                         (b)      Customer Remittances. Customers of Roundup Products shall be directed, as per the
invoices, to remit directly the invoiced amounts for all Roundup Products to Monsanto’s designated
bank account.



 









 






                         (c)      Roundup Bank Accounts. Monsanto shall establish or use existing bank accounts (the
“Roundup Europe Bank Accounts”) to serve as the bank accounts for the Roundup L&G Business in
Europe (i) for the receipt of Customer remittances as described in Section 3 22(b), and (ii) for
making any and all payments incurred in connection with the Roundup L&G Business either as direct
Expenses of the Roundup L&G Business or as reimbursements to either party for services rendered or
out of pocket costs related to the Roundup L&G Business as described more particularly in Section
3.3 hereof.



       Section 3.3.       Expenses and Allocation Rules.



                         (a)      Expenses. Each and every Expense, either as a direct expense or an allocated one, shall
only be charged to the Roundup L&G Business and consequently taken into account in the Program EBIT
statements set forth in Section 3.6(c) hereto if part of a category of Expenses specifically
authorized by the terms of the Annual Business Plan and within the aggregate amount prescribed in
the Annual Business Plan for such category of Expense (“Budget”) (“Approved Expense”). Any Expense
which shall exceed its prescribed Budget shall solely be the responsibility of the party incurring
it unless such expense is required to implement an approved Significant Deviation from the Annual
Business Plan or is necessary to support sales orders above budgeted sales pursuant to sales
programs contemplated by the Annual Business Plan.



                         (b)      Direct vs. Allocated. Each party shall have the right to verify whether any particular
Expense is an Approved Expense by sending a written inquiry to that effect to the Agent’s nominee.
The party incurring an Expense shall endeavor to promptly provide upon request of the Agent’s
nominee the appropriate documentary evidence supporting such Expense. Upon failure by the said
party to provide the appropriate documentary evidence, the inquiring party shall have the right to
send a written notice of dispute to the other party and the parties shall resolve such dispute in
the manner set forth in Section 3.4 hereof. Upon determination by such Independent Accountant (as
defined in Section 3.4) that the Expense was not Approved, such Expense shall be deducted from the
Program Expenses and the party having incurred such Expense shall either promptly reimburse it to
the Roundup Europe Bank Account, or shall withdraw its request for reimbursement if not reimbursed
yet.



     Expenses shall be classified into (i) direct expenses of the Roundup L&G Business payable to
vendors, which shall be submitted directly to Monsanto for payment out of the Roundup Europe Bank
Account or (ii) as Allocated Expenses which shall be submitted by either party to Monsanto for
reimbursement out of the Roundup Europe Bank Account. Payment of any direct expenses incurred by
either party on behalf of the Roundup L&G Business shall be made as they become due in accordance
with the applicable commercial terms agreed upon with each vendor.



     Allocated Expenses shall be paid on the fifteenth (15th) day of each month provided such
allocated Expenses shall be properly supported and submitted in writing no more than three (3) days
after the end of each month to Monsanto.



                         (c)      Allocation Rules. In the performance of their obligations under this Agreement, each
party shall incur allocated Expenses directly related to the Roundup L&G Business. Each allocated
Approved Expense, regardless of the party incurring it, shall be reimbursed as described in Section
3.5(b) provided such expense shall be allocated in accordance with the Allocation Rules set forth
for each category of cost and service per country or region, as the case may be, in Schedule 3.3(c)
attached hereto (“Allocated Expense”).



 









 






II.    Canada




     The following terms shall govern operations of the Roundup L&G Business in Canada in place of
Sections 3.1 through 3.3 of the Agreement. The remainder of the terms of Article 3 of the
Agreement shall apply to Canadian Roundup L&G Business operations.



       Section 3.1.       Bookkeeping and Financial Reporting.



                         (a)      Bookkeeping. The Agent shall, on behalf of Monsanto, be responsible for all the
bookkeeping for the Roundup L&G Business, which shall include, but not be limited to, (i) setting
up a separate set of accounting records reflecting all the items of income, profit, gain, loss and
deduction with respect to the Roundup L&G Business, including a profit and loss statement (“Roundup
P&L”) and all other records relating to the Roundup L&G Business including sales invoices and
customer data (the “Roundup Records”) in accordance with the written set of accounting policies
(including the currency exchange methodology used by Monsanto) as shall be provided by Monsanto;
provided, that if any change in Monsanto’s accounting policies would adversely affect the Agent’s
Commission (other than in a de minimis amount), the parties shall negotiate in good faith to change
the thresholds and/or the Commission, as appropriate, to eliminate such adverse effect; (ii)
collecting, recording and safeguarding receipts of all receivables and payables, costs or expenses
either directly incurred by the Roundup L&G Business or Allocated thereto by either party pursuant
to the terms of Section 3.3 hereof. At all times, the Agent shall make available via computer
and/or original documentation, to the Assigned Employees designated by Monsanto, continuous access
to the Roundup Records as appropriate on a need-to-know basis; such access shall include, but not
be limited to, daily sales updates.



                         (b)      Financial Reporting. The Agent shall provide to Monsanto monthly financial statements,
including (i) the Roundup P&L, balance sheet and cash flow statements, (ii) the Netback expense
detail (accruals and actuals), (iii) all other Expense detail (accruals and actuals), and (iv) Cost
of Goods Sold detail. Such monthly financial statements shall be provided (i) in their preliminary
form, no later than four (4) business days following the end of the calendar month, and (ii) in
their final form, together with an estimate of sales for the current month, no later than six (6)
business days following the end of the calendar month.



                         (c)      Audit. Monsanto shall have the right to periodically audit or have an independent
accountant audit, on Monsanto’s behalf, all the Roundup Records. The audit shall be at the cost of
Monsanto unless any material error has been committed by the Agent, in which case the Agent shall
bear the cost of the audit. Upon exercise of its right of audit, and discovery of any disputed
item, Monsanto shall provide written notice of dispute to the Agent. The parties shall resolve
such dispute in the manner set forth in Section 3.4 hereof.



       Section 3.2.       Ordering, Invoicing and Cash Flow Cycle.



                         (a)      Ordering and Invoicing. The Agent shall perform, on behalf of Monsanto, all order taking,
order processing and invoicing for the Roundup Products, it being understood that orders filled for
Roundup Products shall be invoiced on the invoices used by the Agent for its other non-Roundup
products provided such invoices or their EDI version shall (i) identify the Agent as an agent for
Monsanto for the sale of all Roundup Products and Monsanto as the actual transferor of title to
Roundup Products; (ii) direct payment of such invoice to be made directly to the account designated
by the Agent; and (iii) include all taxes (other than Income taxes), duties, and other charges
imposed by governmental authorities based on the production or sale of Roundup Products or their
ownership or transportation to the place and time of sale.



 









 






                         (b)      Customer Remittances. Customers of Roundup Products shall be directed, as per the
invoices, to remit directly the invoiced amounts for all Roundup Products to the Roundup Canada
Bank Account (defined below).



                         (c)      Roundup Bank Accounts. Monsanto shall establish or use existing bank accounts (the
“Roundup Canada Bank Accounts”) to serve as the bank accounts for the Roundup L&G Business (i) for
the receipt of Customer remittances as described in Section 3.2(b), and (ii) for making any and all
payments incurred in connection with the Roundup L&G Business either as direct Expenses of the
Roundup L&G Business or as reimbursements to either party for services rendered or out of pocket
costs related to the Roundup L&G Business as described more particularly in Section 3.3 hereof.
Monsanto shall grant the Agent’s nominee the authority to manage the Roundup Canada Bank Accounts
on Monsanto’s behalf as it relates to the Roundup L&G Business in Canada, and more generally take
any and all actions requested for the payment of all the Roundup L&G Business Expenses in
compliance with the terms of Section 3.3 hereunder as per the Cash Flow Chart attached hereto as
Schedule 3.2(d); provided that checks in an amount over $25,000 shall also require the co-signature
of an Assigned Employee or a member of the Global Support Team or such other employee of Monsanto
as is designated by a member of the Global Support Team.



       Section 3.3.       Expenses and Allocation Rules.



                         (a)      Expenses. Each and every Expense, either as a direct expense or an allocated one, shall
only be charged to the Roundup L&G Business and consequently taken into account in the Program EBIT
statements set forth in Section 3.6(c) hereto if part of a category of Expenses specifically
authorized by the terms of the Annual Business Plan and within the aggregate amount prescribed in
the Annual Business Plan for such category of Expense (“Budget”) (“Approved Expense”). Any Expense
which shall exceed its prescribed Budget shall solely be the responsibility of the party incurring
it unless such expense is required to implement an approved Significant Deviation from the Annual
Business Plan or is necessary to support sales orders above budgeted sales pursuant to sales
programs contemplated by the Annual Business Plan.



                         (b)      Direct vs. Allocated. Each party shall have the right to verify whether any particular
Expense is an Approved Expense by sending a written inquiry to that effect to the Agent’s nominee.
The party incurring an Expense shall endeavor to promptly provide upon request of the Agent’s
nominee the appropriate documentary evidence supporting such Expense. Upon failure by the said
party to provide the appropriate documentary evidence, the inquiring party shall have the right to
send a written notice of dispute to the other party and the parties shall resolve such dispute in
the manner set forth in Section 3.4 hereof. Upon determination by such Independent Accountant (as
defined in Section 3.4) that the Expense was not Approved, such Expense shall be deducted from the
Program Expenses and the party having incurred such Expense shall either promptly reimburse it to
the Roundup Canada Bank Account, or shall withdraw its request for reimbursement if not reimbursed
yet.



     Expenses shall be classified into (i) direct expenses of the Roundup L&G Business payable to
vendors, which shall be submitted directly to the Agent’s nominee for payment out of the Roundup
Canada Bank Account or (ii) as Allocated Expenses which shall be submitted by either party to the
Agent’s nominee for reimbursement out of the Roundup Canada Bank Account. Payment of any direct
expenses incurred by either party on behalf off the Roundup L&G Business shall be made as they
become due in accordance with the applicable commercial terms agreed upon with each vendor.



 









 






     Allocated Expenses shall be paid on the fifteenth (15th) day of each month provided
such allocated Expenses shall be properly supported and submitted in writing no more than five (5)
days after the end of each month to the Agent’s nominee in charge of the Roundup Canada Bank
Account.



                         (c)      Allocation Rules. In the performance of their obligations under this Agreement, each
party shall incur allocated Expenses directly related to the Roundup L&G Business. Each allocated
Approved Expense, regardless of the party incurring it, shall be reimbursed as described in Section
3.5(b), provided such expense shall be allocated in accordance with the Allocation Rules set forth
for each category of cost and service per country or region, as the case may be, in Schedule 3.3(c)
attached hereto (“Allocated Expense”).



III.  Australia




     The following terms shall govern operations of the Roundup L&G Business in Australia in place of
Sections 3.1 through 3.3 of the Agreement. The remainder of the
terms of Article 3 of the Agreement shall apply to Australian Roundup L&G Business operations.



       Section 3.1.       Bookkeeping and Financial Reporting.



                         (a)      Bookkeeping. The Agent shall, on behalf of Monsanto, be responsible for all the
bookkeeping for the Roundup L&G Business, which shall include, but not be limited to, (i) setting
up a separate set of accounting records reflecting all the items of income, profit, gain, loss and
deduction with respect to the Roundup L&G Business, including a profit and loss statement (“Roundup
P&L”) and all other records relating to the Roundup L&G Business, including sales invoices and
customer data (the “Roundup Records”) in accordance with the written set of accounting policies
(including the currency exchange methodology used by Monsanto) as shall be provided by Monsanto;
provided, that if any change in Monsanto’s accounting policies would adversely affect the Agent’s
Commission (other than in a de minimis amount), the parties shall negotiate in good faith to change
the thresholds and/or the Commission, as appropriate, to eliminate such adverse effect; (ii)
collecting, recording and safeguarding receipts of all receivables and payables, costs or expenses
either directly incurred by the Roundup L&G Business or Allocated thereto by either party pursuant
to the terms of Section 3.3 hereof. At all times, the Agent shall make available via computer
and/or original documentation, to the Assigned Employees designated by Monsanto continuous access
to the Roundup Records as appropriate on a need-to-know basis; such access shall include, but not
be limited to, daily sales updates.



                         (b)      Financial Reporting. The Agent shall provide to Monsanto monthly financial statements,
including (i) the Roundup P&L, balance sheet and cash flow statements, (ii) the Netback expense
detail (accruals and actuals), (iii) all other Expense detail (accruals and actuals), and (iv) Cost
of Goods Sold detail. Such monthly financial statements shall be provided (i) in their preliminary
form, no later than four (4) business days following the end of the calendar month, and (ii) in
their final form, together with an estimate of sales for the current month, no later than six (6)
business days following the end of the calendar month.



                         (c)      Audit. Monsanto shall have the right to periodically audit or have an independent
accountant audit, on Monsanto’s behalf, all the Roundup Records. The audit shall be at the cost of
Monsanto unless any material error has been committed by the Agent, in which case the Agent shall
bear the cost of the audit. Upon exercise of its right of audit and discovery of any disputed
item, Monsanto shall provide written notice of dispute to the Agent. The parties shall resolve
such dispute in the manner set forth in Section 3.4 hereof.



 









 






       Section 3.2.       Ordering, Invoking and Cash Flow Cycle.



                         (a)      Ordering and Invoicing. The Agent shall perform, on behalf of Monsanto, all order taking,
order processing and invoicing for the Roundup Products, it being understood that orders filled for
Roundup Products shall be invoiced on the invoices used by the Agent for its other non-Roundup
products provided such invoices or their EDI version shall (i) identify the Agent as an agent for
Monsanto for the sale of all Roundup Products and Monsanto as the actual transferor of title to
Roundup Products; (ii) direct payment of such invoice to be made directly to the account designated
by the Agent; and (iii) include all taxes (other than Income Taxes), duties, and other charges
imposed by governmental authorities based on the production or sale of Roundup Products or their
ownership or transportation to the place and time of sale.



                         (b)      Customer Remittances. Customers of Roundup Products shall be directed, as per the
invoices, to remit directly the invoiced amounts for all Roundup Products to the Agent’s designated
bank account.



                         (c)      Receipts. At the end of each month, the Agent shall remit to the account designated by
Monsanto for such purposes, the actual amount of the Customers’ remittances for the Roundup
Products paid over the past month. Customer payment deductions that do not initially, clearly
apply to Roundup Products shall not be withheld by the Agent from the remittances to Monsanto. If
the Agent subsequently determines any of such payment deductions apply to sales of Roundup
Products, the Agent shall be reimbursed therefor as part of the monthly cash reconciliation.
Monsanto and the Agent agree that general Customer payment deductions will be prorated based on
applicable sales, for which the Agent will also be reimbursed in the monthly cash reconciliation.
Any non-Roundup Product payment deductions, for whatever reason, shall not be applied against
Roundup Products.



                         (d)      Roundup Bank Accounts. Scotts shall establish or use existing bank accounts (the “Roundup
Australia Bank Accounts”) to serve as the bank accounts for the Roundup L&G Business (i) for the
receipt of Customer remittances as described in Section 3.2(b), and (ii) for making any and all
payments incurred in connection with the Roundup L&G Business either as direct Expenses of the
Roundup L&G Business or as reimbursements to either party for services rendered or out of pocket
costs related to the Roundup L&G Business as described more particularly in Section 3.3 hereof.
The Agent shall take any and all actions requested for the payment of all the Roundup L&G Business
Expenses in compliance with the terms of Section 3.3 hereunder as per the Cash Flow Chart attached
hereto as Schedule 3.2(d). Monsanto may perform its own reconciliation of the Roundup Australia
Bank Accounts and may conduct a weekly review of the check register.



       Section 3.3        Expenses and Allocation Rules.



                         (a)      Expenses. Each and every Expense, either as a direct expense or an allocated one, shall
only be charged to the Roundup L&G Business and consequently taken into account in the Program EBIT
statements set forth in Section 3.6(c) hereto if part of a category of Expenses specifically
authorized by the terms of the Annual Business Plan and within the aggregate amount prescribed in
the Annual Business Plan for such category of Expense (“Budget”) (“Approved Expense”). Any Expense
which shall exceed its prescribed Budget shall solely be the responsibility of the party incurring
it unless such expense is required to implement an approved Significant Deviation from the Annual
Business Plan or is necessary to support sales orders above budgeted sales pursuant to sales
programs contemplated by the Annual Business Plan.



 









 






                         (b)      Direct vs. Allocated. Each party shall have the right to verify whether any particular
Expense is an Approved Expense by sending a written inquiry to that effect to the Agent’s nominee.
The party incurring an Expense shall endeavor to promptly provide upon request of the Agent’s
nominee the appropriate documentary evidence supporting such Expense Upon failure by the said
party to provide the appropriate documentary evidence, the inquiring party shall have the right to
send a written Section 3.4 hereof. Upon determination by such Independent Accountant (as defined
in Section 3.4) that notice of dispute to the other party and the parties shall resolve such
dispute in the manner set forth in the Expense was not Approved, such Expense shall be deducted
from the Program Expenses and the party having incurred such Expense shall either promptly
reimburse it to the Roundup Australia Bank Account, or shall withdraw its request for reimbursement
if not reimbursed yet.



     Expenses shall be classified into (i) direct expenses of the Roundup L&G Business payable to
vendors, which shall be submitted directly to the Agent’s nominee for payment out of the Roundup
Australia Bank Account or (ii) as Allocated Expenses which shall be submitted by either party to
the Agent’s nominee for reimbursement out of the Roundup Australia Bank Account. Payment of any
direct expenses incurred by either party on behalf of the Roundup L&G Business shall be made as
they become due in accordance with the applicable commercial terms agreed upon with each vendor.



     Allocated Expenses shall be paid on the fifteenth (15th) day of each month provided
such allocated Expenses shall be properly supported and submitted in writing no more than three (3)
days after the end of each month to the Agent’s nominee in charge of the Roundup Australia Bank
Account.



                         (c)      Allocation Rules. In the performance of their obligations under this Agreement, each
party shall incur allocated Expenses directly related to the Roundup L&G Business. Each allocated
Approved Expense, regardless of the party incurring it, shall be reimbursed as described in Section
3.5(b), provided such expense shall be allocated in accordance with the Allocation Rules set forth
for each category of cost and service per country or region, as the case may be, in Schedule 3.3(c)
attached hereto (“Allocated Expense”).




 










 






SCHEDULE 3.2(d)

Cash Flow Chart





 









 













 









 












 









 










 









 



Schedule 3.2(d) Cash Flow — U.K. Only




	 	 	 	 	 
	DESCRIPTION	 	ACCTING ENTRI	 
	Monsanto plc receipt	 	 	 	 
	        - direct payments to bank	 	 	 	 
	        - cheques received and banked / cheque register created	 	 	 	 
	        - RIP credited	 	cr to 11125839
	 	 	 	 	 
	Roundup / Non Roundup invoices cleared from SAP according customer

remittance advice / Deductions entered in accordance with attached agreement

This allocation debits Mplc / Phostrogen RIP.	 	dr to 11125839
	 	 	 	 	 
	Phostrogen related cash placed in holding account	 	cr to ????
	 	 	 	 	 
	Cash paid on the 20th of the month following receipt	 	dr to ????
	 	 	 	 	 
	Non Roundup receipts	 	 	 	 
	       - direct payments to bank	 	 	 	 
	       - cheques received and banked / cheque register created	 	 	 	 
	       - RIP credited	 	cr to 11125839
	 	 	 	 	 
	Roundup / Non Roundup invoices cleared from SAP according to customer

remittance advice / Deductions entered in accordance with attached agreement

This allocation debits Mplc / Phostrogen RIP.	 	dr to 11125839
	 	 	 	 	 
	Phostrogen Limited receipt	 	 	 	 
	 	 	 	 	 
	Cheques received payable to Phostrogen Limited forwarded to Corwen immediately
and no accounting entries made	 	 	 	 
	 	 	 	 	 
	Cheque banked into Phostrogen bank account by Corwen	 	 	 	 
	 	 	 	 	 
	Customer accounts cleared in Corwen and deductions booked in accordance with
agreement	 	 	 	 







 








 













 









 








Schedule 3.2 (d) Australia




 




			
	Monsanto
	 	Example C3
	Roundup Australia	 	 
	Date	 	 
	Cash Flow Statement	 	 






	 	 	 	 	 	 	 	 	 
	 	 	Month	 	 	YTD	 
	Cash flows from operating activities:
	 	 	 	 	 	 	 	 
	Net (Loss)/Income
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Depreciation
	 	 	 	 	 	 	 	 
	Amortization
	 	 	 	 	 	 	 	 
	Extraordinary loss
	 	 	 	 	 	 	 	 
	(Gain)/Loss on sale of property
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Changes in working capital:
	 	 	 	 	 	 	 	 
	Accounts receivable
	 	 	 	 	 	 	 	 
	Inventories
	 	 	 	 	 	 	 	 
	Prepaids
	 	 	 	 	 	 	 	 
	Accounts payable
	 	 	 	 	 	 	 	 
	Accrued liabilities
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Other, net
	 	 	 	 	 	 	 	 
	Net cash provided by / (used in) operations
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Cash flows from investing activities:
	 	 	 	 	 	 	 	 
	Capital Expenditures
	 	 	 	 	 	 	 	 
	Proceeds on
Sale of Property Acquisitions
	 	 	 	 	 	 	 	 
	Other
	 	 	 	 	 	 	 	 
	Net cash provided by / (used in) investing activities
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Cash flows from financing activities:
	 	 	 	 	 	 	 	 
	Borrowings — operations funding
	 	 	 	 	 	 	 	 
	Borrowings — acquisitions
	 	 	 	 	 	 	 	 
	Dividends paid
	 	 	 	 	 	 	 	 
	Other
	 	 	 	 	 	 	 	 
	Net cash provided by / (used in) financing activities
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Net increase (decrease) in cash
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Cash, beginning of period
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Cash, end of period
	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 







 









 






SCHEDULE 3.3(c)




INCOME STATEMENT DEFINITIONS

AND

ALLOCATION METHODS
















 










			
	Monsanto and Scotts

Exclusive Agency and Marketing Agreement for Roundup

Income Statement Definitions and Allocation Methods
	 	Schedule 3.3(c)

Page 4 of 11

RUPPLDefinitions.xls






	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Anticipated Source
	Revenue/Expense Category	 	Definition	 	Determination/Allocation Method	 	Roundup	 	SMG	 	MTC
	Toller variances

	 	Differences between
actual standard
costs of products
at toll
manufacturers
	 	Direct; default based on % of
Roundup cases produced at
specific toll manufacturer
	 	X
	 	X	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Price variances

	 	Differences between
actual and standard
costs of raw and
packaging materials
acquired for
production
	 	Direct; default based on % of
Roundup purchases related to
price variance drivers
	 	X
	 	X	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Gross profit

	 	Net sales less
product and
non-standard cost
of good sold	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	MAT-Marketing

	 	Functional areas
responsible for
creating brand
Image, developing
brand awareness
strategies and
promotions. Also
includes all sales
activities
performed by
business unit
personnel.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Direct marketing

	 	Marketing
activities
associated expenses
which can be
directly traced to
Roundup	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Advertising

	 	Includes network,
spot and cable TV,
radio, print media,
advertising
production costs,
and advertising
agency fees
	 	Actual default based on % of
direct media spending
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Public relations

	 	Includes expenses
related to public
relations (indirect
advertising) and
related agency fees
	 	Actual
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Consumer promotion

	 	Includes consumer
directed rebates,
in-stores
promotional
activities and
give-aways, and
point-of-purchase
materials
	 	Actual
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Trade promotion

	 	Any trade directed promotions (not
already included in MDF), including related agency fees
	 	Actual
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Brand specific market research

	 	Market research directed toward the Roundup brand	 	Actual
	 	X	 	 	 	 


















 






			
	Monsanto and Scotts

Exclusive Agency and Marketing Agreement for Roundup

Income Statement Definitions and Allocation Methods
	 	Schedule 3.3(c)

Page 5 of 11

RUPPLDefinitions.xls






	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Anticipated Source
	Revenue/Expense Category	 	Definition	 	Determination/Allocation Method	 	Roundup	 	SMG	 	MTC
	Brand specific marketing management

	 	Primarily personnel
and related support
cost (salaries,
incentives,
fringes, travel &
entertainment,
computers,
communications, and
space & supplies)
of marketing
personnel dedicated
to L&G Roundup
	 	Actual
	 	x
	 	x
	 	x
	 
	 	 	 	 	 	 	 	 	 	 
	Allocated marketing

	 	Marketing activities

managed on a shared

services basis	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Marketing management

	 	Primarily personnel
and related support
cost (salaries,
incentives,
fringes,
relocation, travel
& entertainment,
computers,
communications, and
space & supplies)
of marketing
management group
overseeing L&G
Roundup and related
products
	 	Based on management’s
assessment of % of time of
general marketing management
group spend on
Roundup activities
	 	 	 	x	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Marketing support functions

	 	Functions included
innovation, market
research and
creative services.
Principally
personnel costs
(salaries,
incentives,
fringes, travel &
entertainment,
computers,
communications, and
space & supplies)
of the marketing
support functions
	 	Based on management’s
assessment of % of time
marketing support function
groups spend on
Roundup activities
	 	 	 	x	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Other marketing expenses

	 	All other
marketing related
expenses, excluding
advertising,
promotions and
personnel costs	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Innovation projects

	 	Consulting material
and other
non-personnel
related costs
associated with
package design
	 	Direct default based on
overall % of innovation group
activities directed toward
Roundup
	 	x
	 	x	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Package design

	 	Agency fees,
supplies and
material and other
non-personnel
related cost
associated with
package design
	 	Direct default based on
overall % of creative service
group activities directed
toward Roundup
	 	x
	 	x
	 	x
	 
	 	 	 	 	 	 	 	 	 	 
	Market research services

	 	Fees and other
non-personnel costs
associated with
non-brand specific
market research
(POS data, usage
and attitudes
studies, etc.)
	 	Direct default based on
overall % of market research
group activities directed
toward Roundup
	 	x
	 	x	 	 


















 







	 	 	 	 	 
	
    
    Monsanto and Scotts
    

    	 	 	Schedule 3.3(c)	 
	
    
    Exclusive Agency and Marketing
    Agreement for Roundup
    

    	 	 	page 8 of 11	 
	
    
    Income Statement Definitions and
    Allocation Methods
    

    	 	 	RUPPLDefinitions.xls	 







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Anticipated Source	
	 	 	 	 	 	 	 
	Revenue/Expense Category	 	Definition	 	Determination/Allocation Method	 	Roundup	 	SMG	 	MTC
	 	 	 	 	 	 	 	 	 	 	 
	
    
    SVP and general management
    

    	 	
    Primarily personnel and related
    support costs (salaries, incentives, fringes, travel &
    entertainment, computers, communications, and space &
    supplies) of the business unit general management group. Also
    includes general costs of operating the business unit not
    otherwise assigned or classified
    	 	
    Direct for Roundup assigned
    employees, including reasonable charges for fringe benefits and
    related support costs.

    Scotts costs will be allocated based on agreed to % of actual
    business unit general support costs
    	 	 	 	 	 	 	X	 	 	 	X	 
	 
	
    
    Information technology
    

    	 	
    Personnel and related support costs
    (salaries, incentives, fringes, travel & entertainment,
    computers, communications, and space & supplies) of the
    information technology function supporting the business unit
    which manages the L&G Roundup brand. Costs also include
    depreciation and annual software license fees, hardware
    depreciation and rental, outside service fees and contracts and
    other non-personnel costs associated with operating the
    information technology group.
    	 	
    Scotts costs will be allocated
    based on agreed to % of actual business unit information
    technology costs, net of developmental costs, but including
    service costs
    	 	 	 	 	 	 	X	 	 	 	 	 
	 
	
    
    Finance and accounting
    

    	 	
    Personnel and related support costs
    (salaries, incentives, fringes, travel & entertainment,
    computers, communications, and space & supplies) of the
    finance and accounting functions supporting the business unit
    which manages the L&G Roundup brand. Functions include
    financial planning and analysis, general accounting,
    order-to-cash functions assigned to finance, accounts payable
    and payroll. Costs will also include internal and external audit
    fees, specialized IT services, and corporate treasury, tax and
    controllership functions.
    	 	
    Direct for Roundup seconded people,
    including reasonable charges for fringe benefits and related
    support costs.

    Scotts costs will be allocated based on agreed to % of actual
    business unit finance and accounting costs
    	 	 	 	 	 	 	X	 	 	 	X	 










 






SCHEDULE
4.2(A)



STEERING
COMMITTEE




	 	 	 	 	 
	
    
    For the Agent:
    
	 	 	 	 
	 
	
    
    Charles Berger
    
	 	 	 	 
	
    
    Jim Hagedorn
    
	 	 	 	 
	 
	
    
    For Monsanto:
    
	 	 	 	 
	 
	
    
    Arnold W. Donald
    
	 	 	 	 
	
    
    Jim Neal
    
	 	 	 	 












 














Schedule 3.8 U.S.




Monsanto Direct Sales of Roundup AG Products into the Lawn and Garden Channel




Sort by: Product Parent




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Oct 97	 	Oct 97	 	Oct 97	 	Jan 98	 	Jan 98	 	Jan 98
	 	 	 	 	 	 	 	 	 	 	to Sep 98	 	to Sep 98	 	to Sep 98	 	to Dec 98	 	to Dec 98	 	to Dec 98
	Product	 	Description	Parent	Description	 	Ship $	 	Ship QtyEA	 	Ship Cost	 	Ship $	 	Ship QtyEA	 	Ship Cost
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	1446	 	 	Costco
	 	 	1,108,248	 	 	 	8,640	 	 	 	1,048,232	 	 	 	834,179	 	 	 	6,432	 	 	 	781,006	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	2886	 	 	Navy — Norioi rent
	 	 	272	 	 	 	2	 	 	 	243	 	 	 	272	 	 	 	2	 	 	 	243	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	10542	 	 	Tru Serve Corp party
	 	 	276,674	 	 	 	2,128	 	 	 	257,624	 	 	 	251,121	 	 	 	1,954	 	 	 	238,479	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	11339	 	 	Home Depot
	 	 	1,556,696	 	 	 	11,478	 	 	 	1,393,109	 	 	 	1,648,968	 	 	 	12,206	 	 	 	1,482,114	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	11465	 	 	Lowes Companies Inc
	 	 	1,217,734	 	 	 	9,038	 	 	 	1,098,436	 	 	 	1,207,974	 	 	 	8,928	 	 	 	1,084,082	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	12384	 	 	Tru Serv Corp east
	 	 	1,560	 	 	 	12	 	 	 	1,457	 	 	 	1,560	 	 	 	12	 	 	 	1,457	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	13141	 	 	Wal-Mart
	 	 	(737	)	 	 	(6	)	 	 	(729	)	 	 	(737	)	 	 	(6	)	 	 	(729	)
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	13346	 	 	Ace Hardware Corp
	 	 	405,686	 	 	 	3,182	 	 	 	385,664	 	 	 	436,995	 	 	 	3,470	 	 	 	421,345	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	13501	 	 	Handy Hdwe Wholesale Inc
	 	 	41,247	 	 	 	320	 	 	 	38,856	 	 	 	47,635	 	 	 	370	 	 	 	44,927	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	13508	 	 	Do It Best Corporation
	 	 	76,060	 	 	 	604	 	 	 	73,341	 	 	 	65,325	 	 	 	508	 	 	 	61,684	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	13509	 	 	Our Own Hardw 720
	 	 	1,560	 	 	 	12	 	 	 	1,443	 	 	 	-	 	 	 	-	 	 	—

	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	13627	 	 	Sams Club
	 	 	180,940	 	 	 	1,236	 	 	 	150,324	 	 	 	159,120	 	 	 	 1,224	 	 	 	148,624	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	13631	 	 	Sample Deferred Account
	 	 	-	 	 	 	2	 	 	 	121	 	 	 	-	 	 	 	2	 	 	 	121	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	13660	 	 	Tru Serv Corp
	 	 	69,827	 	 	 	536	 	 	 	84,899	 	 	 	51,979	 	 	 	400	 	 	 	48,570	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	13710	 	 	United Hardward Distributing
	 	 	280	 	 	 	2	 	 	 	248	 	 	 	260	 	 	 	2	 	 	 	243	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	72320	 	 	Jerrys Bldg Materials Inc
	 	 	17,266	 	 	 	128	 	 	 	15,338	 	 	 	17,058	 	 	 	128	 	 	 	15,300	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	77404	 	 	CGP Buy/Sell — Distr
	 	 	91,164	 	 	 	712	 	 	 	86,066	 	 	 	71,200	 	 	 	560	 	 	 	67,998	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	81121	 	 	Payless Cashways Inc
	 	 	(266	)	 	 	(8	)	 	 	(765	)	 	 	24,304	 	 	 	172	 	 	 	20,885	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	81264	 	 	Orgill, Inc.
	 	 	85,020	 	 	 	654	 	 	 	79,316	 	 	 	115,587	 	 	 	 906	 	 	 	110,011	 
	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E
	 	 	81719	 	 	Tru Serv Corporation
	 	 	(1,366	)	 	 	-	 	 	 	-	 	 	 	(283	)	 	 	 -	 	 	—

	50326

	 	ROUNDUP PRO — 2/2.5 GAL PL E****
	 	 	 	 	 	*TOTAL*
	 	 	5,109,834	 	 	 	38,674	 	 	 	4,689,219	 	 	 	4,932,493	 	 	 	37,278	 	 	 	4,526,360	 







1









 







Schedule 3.8 U.K.



Monsanto direct sales of Roundup AG Products into Lawn and Garden Channels for the U.K.



Special Accounts of Interest:



	 	 	 	 	 
	B&Q
	 	 	0	 
	Do-It-All
	 	 	0	 
	GT Mills
	 	 	0	 
	Home Base
	 	 	0	 
	Wickes
	 	 	0	 
	Asda
	 	 	0	 
	Tesco
	 	 	0	 
	Makro
	 	 	0	 
	Wilkinsons
	 	 	0	 
	Woolworths
	 	 	0	 


















 






Schedule 3.8     France




(Volume in Units)




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	96/97	 	 	 	 	 	 	97/98	 
	Total Sales of Roundup
	 	 	429,720	 	 	 	 	 	 	 	322,908	 
	1L Bioforce including AG
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Nielsen tracked
	 	 	140,000	 	 	 	 	 	 	 	64,000	 
	L&G Roundup
	 	 	 	 	 	 	 	 	 	 	 	 
	Bioforce Sales
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Agreed Benchmark
	 	 	 	 	 	 	102,000	 	 	 	 	 
	Roundup Bioforce
	 	 	 	 	 	 	 	 	 	 	 	 
	1L Sales into
	 	 	 	 	 	 	 	 	 	 	 	 
	L&G Channel
	 	 	 	 	 	 	 	 	 	 	 	 

















 






Schedule 3.8 France




 




 



Monsanto Direct Sales of Roundup AG Products into Lawn and Garden Channels for France:




Specific Accounts of Interest:




	 	 	 	 	 	 	 	 	 
	(Volume)	 	96/97	 	 	97/98	 
	Leclerc
	 	 	0	 	 	 	0	 
	Gamm Vert (Uncaa)
	 	 	137,364	 	 	 	110,124	 
	Tripode
	 	 	0	 	 	 	0	 
	Carrefour
	 	 	0	 	 	 	0	 
	Briomarche
	 	 	0	 	 	 	0	 
	Apex (Coopagri)
	 	 	13,584	 	 	 	11,568	 
	Casino
	 	 	0	 	 	 	0	 
	Intermarche
	 	 	0	 	 	 	0	 
	Castorama
	 	 	0	 	 	 	0	 
	Promodes
	 	 	0	 	 	 	0	 

















 






Schedule 3.8
France Total Roundup Bioforce 1 L Sales, Including AG Channel Sales

Sales Bio 1 L




France
Sales Bioforce 1 L

Avg. NSP in USD at budget parity

9697=5.071 FF — 9798=5.80 FF




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Invoiced Customers	 	Volume	 	 	N.S.	 
	 	 	9697	 	 	9798	 	 	9697	 	 	9798	 
	UNCAA
	 	 	137,364	 	 	 	110,124	 	 	 	2,358,023	 	 	 	1,939,277	 
	DE SANGOSSE
	 	 	139,500	 	 	 	85,116	 	 	 	2,394,690	 	 	 	1,498,888	 
	LESEUR
	 	 	23,400	 	 	 	21,600	 	 	 	401,690	 	 	 	380,375	 
	GRUEL-FAYER
	 	 	4,632	 	 	 	1,860	 	 	 	79,514	 	 	 	32,754	 
	DISPAGRI
	 	 	52,176	 	 	 	44,232	 	 	 	895,666	 	 	 	778,923	 
	SANE-DAGRIL
	 	 	12,000	 	 	 	4,284	 	 	 	205,995	 	 	 	75,441	 
	AGRIDIS
	 	 	10,176	 	 	 	3,120	 	 	 	174,684	 	 	 	54,943	 
	PKD
	 	 	50,472	 	 	 	52,572	 	 	 	866,414	 	 	 	925,790	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	429,720	 	 	 	322,908	 	 	 	7,376,676	 	 	 	5,686,390	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	17.17	 	 	 	17.61	 
















 








SCHEDULE 4.1(a)

Management Structure





 









 








     



 









 



Roundup® Management Structure




Steering Committee: “The Board of Directors”





	•	 	2 from MTC, 2 from OMS
	 
	•	 	Disputes decided by President of Monsanto Ag




Global Support Team (GST): “Global Coordination, Communication and Stewardship of Roundup L&G Business”





	•	 	3 members, all from MTC




Business Units (RU’s): “Country/Region Line Management”






	•	 	Business Unit Head, Marketing, Sales, Finance, Operations and Other functional areas (including seconded MTC employees)






 








 













 









 










 










 








Decision Making Process — Examples





	 	•	 	Advertising Creative Development
	 
	 	•	 	Negative reaction to advertising
	 
	 	•	 	Key Account Planning
	 
	 	•	 	Key Account price exception





 









 






Example #1: Advertising TV Creative Development




	 	 	 	 	 
	 	 	 	 	Approval/Dispute
	Action Step	 	Responsibility	 	Resolution
	 
	 	 	 	 
	Overall Brand Strategy developed as part of
Business Plan

	 	BU Brand Team
	 	BU Mgmt
	Business Plan presentation to BU Mgmt & GRST

	 	BU Brand Team
	 	GRST + BU Mgmt
	Annual Business Plan preliminary approval

	 	RU Mgmt & GRST
	 	Steering Committee
	Annual Business Plan — final approval

	 	Steering Committee	 	 
	Brand Positioning statement developed

	 	BU Brand Team	 	 
	Brand Positioning approved

	 	BU Mgmt & Global

Rup Team
	 	GRST
	Advertising campaign Creative Direction to Agency

	 	BU Brand Team
	 	BU Mgmt
	Campaign concepts developed by Ad Agency

	 	BU Mgmt & GRST
	 	GRST
	Advertising direction approval

	 	BU Brand Team
	 	BU Mgmt
	Narrow campaign concepts to 2

	 	BU Mgmt	 	 
	Concept testing with consumers

	 	BU Brand Team
	 	BU Mgmt
	TV story board developed

	 	BU Brand Team
	 	BU Mgmt
	Final TV storyboard approved — including copy

	 	BU Mgmt & GRST
	 	GRST
	TV production (talent, TV shoot, etc.)

	 	BU Brand Team
	 	BU Mgmt
	Rough cuts reviewed

	 	BU Mgmt & GRST	 	 
	Final TV spot approved

	 	BU Mgmt & GRST
	 	GRST






 









 






Example #2: Negative reaction to TV advertising




	 	 	 	 	 
	 	 	 	 	Approval/Dispute
	Action Step	 	Responsibility	 	Resolution
	 
	 	 	 	 
	Consumers call hot-line, write MTC, contact TV station
and lodge complaints
	 	 	 	 
	Notification given to brand team & management

	 	1-800 Hot-line
	 	no choice
	Notification given to GRST

	 	BU Mgmt
	 	no choice
	Decision to notify Steering Committee

	 	BUMgmt&GRST
	 	either can decide
	Assessment by brand team of issue, magnitude

	 	BU Brand Team	 	 
	Recommendation on action/inaction

	 	BU Mgmt & GRST
	 	GRST
	Implement action/changes

	 	BU Brand Team	 	 






 









 






Example #3: Home Depot MDF Planning for prospective season




	 	 	 	 	 
	 	 	 	 	Approval/Dispute
	Action Step	 	Responsibility	 	Resolution
	 
	 	 	 	 
	Overall Brand Strategy developed as part of Business Plan

	 	BU Brand Team
	 	BU Mgmt
	Business Plan presentation to BU Mgmt & GRST

	 	BU Brand Team
	 	GRST/BU Msmt
	Annual Business Plan preliminary approval

	 	BU Mgmt & GRST
	 	Steering Committee
	Annual Business Plan — final approval

	 	Steering Committee	 	 
	Key Account Strategies developed

	 	BU Key Accounts Team
	 	BU Mgmt
	Home Depot approach & specific MDF plan developed

	 	Depot Account Team
	 	BUMgmt&GRST
	Preliminary planning session with Home Depot

	 	Depot Account Team	 	 
	Finalization session with Home Depot at Hardware Show

	 	BU Mgmt & Depot Account Team
	 	GRST
	Regional marketing meetings with Depot Regional Merchants

	 	Depot Account Team	 	 
	Implementation of plan

	 	Depot Account Team	 	 





Note: Key Accounts teams include representation from 2 MTC employees




 









 





Example #4: Home Depot demands incremental Roundup price reduction in-season




	 	 	 	 	 
	 	 	 	 	Approval/Dispute
	Action Step	 	Responsibility	 	Resolution
	 
	 	 	 	 
	Buyer contacts BU Home Depot Account rep/team
	 	 	 	 
	Account rep determines request is above plan & approval level

	 	Account Team
	 	no choice
	Rep contacts Sales management & BUp seconded Acct Rep

	 	Account Team	 	 
	BU Account Team develops recommendation in concert with MTC
	 	 	 	 
	Rup key accounts rep

	 	Account Team	 	 
	...recommendation is within overall Annual Plan

	 	BU Mgmt	 	 
	... recommendation is outside Annual Plan

	 	GRST/BU Mgmt
	 	Steering Committee
	Implementation of price change/no change

	 	Account Team
	 	BU Mgmt







 









 








SCHEDULE 4.2(a)

Steering Committee




For the Agent:




 




Charles Berger

Jim Hagedorn




 




For Monsanto:




 




Arnold W. Donald

Jim Neal





 









 








SCHEDULE 4.3

Assigned Employees




Dawn Albery, Finance




Kevin Cannon, Roundup America Brand Director




Dave Chambers, Key Accounts, U.S.




Sarah Dutton, Admin. Europe




Ralph Dymes, Key Accounts, Europe




Richard Garnett, Registration, Europe




Phil Jones, Marketing, Europe




Virginie Liardet, Brand Manager, Europe




Peter Medendorp, Key Accounts, U.S.




Open, Roundup Brand Director, Asia




Open, Key Accounts, France




Mark Pyper, Roundup Brand Director, Europe




Lynette Ross, Admin., U.S.




Daina Schmidt, Brand Manager, U.S.




Debbie Tracy, Admin., U.S.




Dennis Ward, Registration, U.S.





 








 






SCHEDULE 4.3 (b)

Assigned Employee Functions





	>	 	Deliver Monsanto budgeted and LRP levels of financial performance for the business including:






	 	•	 	gross and net sales net income
	 
	 	•	 	net income
	 
	 	•	 	CODB
	 
	 	•	 	COGS
	 
	 	•	 	MAT
	 
	 	•	 	Capital Employed
	 
	 	•	 	Cash Flow






	>	 	Participate in development of strategic business plans including the annual business plan and
long range strategic plans.
	 
	>	 	Provide Roundup brand stewardship and oversight to protect and build the value of the brand
in all markets and for all products.
	 
	>	 	Participate in all brand advertising and creative development efforts and promotions to
ensure executions that are aligned with financial objectives and brand stewardship interests.
	 
	>	 	Ensure measurement of key consumer brand metrics to monitor the health and growth of the
brand.
	 
	>	 	Monitor AG, industrial and L&G market activities and pricing moves on Roundup to ensure
maximum profitability for the overall Roundup franchise.
	 
	>	 	Direct all brand innovation efforts consistent with business plan objectives and financial
targets.
	 
	>	 	Provide sales leadership and focus for Roundup. Facilitate achievement of account goals
through joint/Scotts sales people and distribution.
	 
	>	 	Maintain key account relationships to secure leverage and support for Roundup.
	 
	>	 	Leverage trade marketing and category management initiatives to secure Roundup’s lead
position in the weed control market.
	 
	>	 	Provide global priority and focus to the Scotts business units for Roundup interests.
	 
	>	 	Maintain critical leverage across the business management process to ensure development and
growth of Monsanto’s Roundup L&G business interests.
	 
	>	 	Maintain involvement in analysis of competitive activity and play an integral role in
addressing competitive pressures and future threats.
	 
	>	 	Coordinate SKU forecasts for production/deployment and financial purposes.
	 
	>	 	Provide regulatory interface with MTC to ensure proper regulatory support for products.










 









 











The Scotts Company

Ortho Business Group

Brand Manager Major Responsibilities

February 1999



As the primary champion of a Brand, the Brand Manager’s overarching responsibility is to
optimize its short and long term volume and profit performance. Brand Managers have the authority
and responsibility to interact with and manager every function in the Corporation to the extent
they are required to deliver against this overarching goal. The Brand Manager’s major
responsibilities include:





	•	 	Develop and manage business plans to exceed Brand annual plan volume and profit goals






	 	>	 	Recommend Brand annual plans
	 
	 	>	 	Perform ongoing review of Brand business to confirm appropriateness of selected
strategy and plans. Recommend and alter as appropriate to deliver against Company volume
and profit commitments
	 
	 	>	 	Develop overall Brand marketing plans including advertising, strategy, advertising
creative, media, public relations, consumer promotion, trade promotion, and merchandising
	 
	 	>	 	Recommend and manage market research studies that can result in higher sales through
improved consumer and customer understanding
	 
	 	>	 	Identify and implement cost savings opportunities that improve profitability without
sacrificing Brand performance






	•	 	Manage major Brand product development projects






	 	>	 	Identify and evaluate opportunities and formulate plans to address them
	 
	 	>	 	Inspire all functions involved in projects to outstanding levels of performance
	 
	 	>	 	Recommend, conduct and analyze appropriate research to guide the process






	•	 	Ensure all managed marketing plans are executed with excellence through Sales and all other functional groups






	 	>	 	Inspire Sales through development and presentation of compelling selling tools
	 
	 	>	 	Communicate with Sales continually to ensure plan success
	 
	 	>	 	Work to ensure smooth transition of improved products or packages to distribution channels






	•	 	Train subordinates to allow them to achieve their full potential as business managers






	 	>	 	Develop and implement training plans, continuous feedback and formal evaluation
	 
	 	>	 	Foster an environment that supports high performance, job and Company commitment and fun
	 
	 	>	 	Manage and administer subordinate compensation consistent with Company policy






	•	 	Make contributions to Brand, Department and Company to improve overall performance






	 	>	 	Contribute to the recruiting process as appropriate
	 
	 	>	 	Mentor high potential employees
	 
	 	>	 	Develop and present marketing training programs as appropriate
	 
	 	>	 	Recommend and implement new processes or systems to smooth work process










 









 











The Scotts Company

Ortho Business Group

Director of Marketing Major Responsibilities

February 1999



A Director of Marketing at Scotts is the primary champion of a major brand or brands for the
Company. In this role, the Director of Marketing is responsible for the short and long-term volume
and profit performance of these brands and, in particular, for the health of the categories they
compete in. The Directory of Marketing’s major responsibilities include the following:





	•	 	Develop annual business plans for managed Brands to surpass budgeted volume and profit goals






	 	>	 	Business Review
	 
	 	>	 	Product Line Review
	 
	 	>	 	Annual Business Plan






	•	 	Manage the strategic planning process to ensure the long-term health of the Brands






	 	>	 	SWOT Analysis
	 
	 	>	 	Identification of key success factors
	 
	 	>	 	Long Term Strategic Plan






	•	 	Aggressively manage the growth of relevant category (ies) and ensure that Brands take a disproportionate share of that
growth.






	 	>	 	Ensure that category (ies) grow at a rate in excess of base population growth
	 
	 	>	 	Recommend category business building initiatives and test or expand them aggressively
as appropriate






	•	 	Ensure all Brands business plans are executed with excellence through Sales and
other functional groups






	 	>	 	Work closely with Sales Management to ensure strategic alignment
	 
	 	>	 	Collaborate with appropriate Innovation Team members to manage executional consistency
to base Brands plans






	•	 	Train subordinates to allow them to achieve their full potential as business managers






	 	>	 	Develop and execute training plans, continuous feedback and formal evaluation
	 
	 	>	 	Create an atmosphere that fosters high performance, job and Company
commitment and fun on the job
	 
	 	>	 	Manage and administer subordinate compensation consistent with Corporate
policies






	•	 	Make contributions to Department and Company to improve overall performance






	 	>	 	Develop and present relevant training programs for Marketing and other functions
	 
	 	>	 	Create and refine Business processes to ensure excellent execution of plans






 









 








SCHEDULE 4.4 (a)

Global Support Team




Jim Neal, Leader




Danna McKay, Transition




Dawn Albery, Finance