EXHIBIT 10.64
AMENDMENT AND AGREEMENT
UNDER THE PARTNERSHIP AGREEMENT
This Amendment and Agreement Under the Partnership Agreement
(this "Agreement") dated as of January 23, 1996 by and among (i) IMC-
Agrico GP Company ("IMC GPCo"), a Delaware corporation and a subsidiary
of IMC Global Operations Inc., a Delaware corporation ("Operations"),
(ii) Agrico, Limited Partnership (the "FRP Partner"), a Delaware
limited partnership of which Freeport-McMoRan Resource Partners,
Limited Partnership, a Delaware limited partnership ("FRP"), owns a
99.8% limited partnership interest and Agrico, Inc., a Delaware
corporation ("FRP GPCo"), owns a 0.2% general partnership interest,
(iii) IMC-Agrico MP, Inc. (the "Managing Partner"), a Delaware
corporation, (iv) Operations, and (v) IMC-Agrico Company, a Delaware
general partnership (the "Partnership").
WHEREAS, IMC GPCo, the FRP Partner, the Managing Partner and
Operations are parties to an Amended and Restated Partnership Agreement
(the "Partnership Agreement") dated as of July 1, 1993 and further
amended and restated as of May 26, 1995;
WHEREAS, IMC Global Inc., a Delaware corporation ("IMC"),
Bull Merger Company, a wholly-owned subsidiary of IMC ("Merger Sub"),
and The Vigoro Corporation, a Delaware corporation ("Vigoro"), have
entered into an Agreement and Plan of Merger dated as of November 13,
1995 (the "Merger Agreement") which provides for the merger (the
"Merger") of Merger Sub with and into Vigoro, with Vigoro surviving as
a subsidiary of IMC, all of the outstanding common stock of which will
be owned by IMC;
WHEREAS, the date on which the Merger is consummated is
referred to herein as the "Merger Date"; and
WHEREAS, IMC GPCo, the FRP Partner, the Managing Partner and
the Partnership believe that certain amendments to the Partnership
Agreement are appropriate due to the change in the nature of the
business of the IMC Partner and its Affiliates (each as defined in the
Partnership Agreement) resulting from the Merger;
NOW, THEREFORE, in consideration of the covenants and
agreements herein set forth and of other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. Except as otherwise defined or amended herein,
capitalized terms used in this Agreement shall have the meaning
ascribed to such terms in Exhibit A to the Partnership Agreement.
Section 2. (a) Effective as of the Merger Date, the Current
Interests and Capital Interests of the FRP Partner and the IMC Partner
set out in Section 4.01(a) of the Partnership Agreement shall be
modified as follows:
"In the quarter subsequent to the Merger Date, the Current
Interest of the FRP Partner shall be increased and the
Current Interest of the IMC Partner shall be decreased, by
0.85%. In the quarter in which the Merger Date occurs, the
Current Interest of the FRP Partner shall be increased and
the Current Interest of the IMC Partner shall be decreased by
0.85% multiplied by a fraction, the numerator of which will
be the number of days from the Merger Date to the end of the
quarter, and the denominator of which will be the total
number of days in the quarter. The Capital Interest of the
FRP Partner shall be increased and the Capital Interest of
the IMC Partner shall be decreased, by 0.85% on the July 1
subsequent to the Merger Date.
During the IMC GPCo Liquidation Period, the Current Interests
of Operations and IMC GPCo shall be equal to eighty percent
(80%) and twenty percent (20%), respectively, of the Current
Interests of the IMC Partner set forth above. During the IMC
GPCo Liquidation Period, the Capital Interests of Operations
and IMC GPCo shall be equal to eighty percent (80%) and
twenty percent (20%), respectively, of the Capital Interests
of the IMC Partner set forth above."
Section 3. Effective as of the date hereof, the second
sentence of Section 6.04(b) of the Partnership Agreement shall be
amended and restated to read in its entirety as follows:
"One IMC Representative and one FRP Representative shall
serve as Co-Chairmen of the Policy Committee."
Section 4. Effective as of the date hereof, Article VI of
the Partnership Agreement shall be amended to add a new Section 6.09
which shall read in its entirety as follows:
"During such time as the IMC Partner is the Operating
Partner, and subject to the other provisions of this Article
VI, the management of the Partnership shall be organized as
follows. The IMC group executive responsible on behalf of IMC
for the Partnership (the "IMC Group Executive") shall,
subject to the approval of the Policy Committee, appoint and
terminate the President of the Partnership (who shall be the
chief executive officer of the Partnership) and his
successors. The President shall be an employee of the
Managing Partner. The President shall report to the IMC
Group Executive and shall be responsible for the profit and
loss of the Partnership. The President shall direct and
manage all of the Partnership's business affairs (except the
Animal Feed Ingredient Division), including, but not limited
to, the mining, processing, marketing, sales, distribution,
growth and business development functions and financial
issues that affect profit and loss; managers of those IMC
functions who provide services for the Partnership will be
accountable to the President with respect to their
responsibilities to the Partnership. The President shall
hire, terminate and replace the managers in the Partnership.
The President's authority, reporting and coordination
responsibilities with his superiors within IMC shall be
consistent with his responsibilities to the Partnership and
shall reflect practices customary in United States public
companies. Nothing in this provision shall limit the
Operating Partner from changing or reorganizing its business
in any respect (except that changes in the President's
reporting responsibility or relationship shall be made only
upon consent of the Policy Committee).
The management objectives and compensation structure of the
President and those reporting to him shall reflect their duty
to manage the business of the Partnership in the best
interests of the Partnership, and shall be reviewed and
approved by the Policy Committee annually. The President's
performance against those objectives shall be evaluated by
the IMC Group Executive, who shall regularly review such
evaluation with the Policy Committee. The achievement of
incentive compensation targets and award of incentive
compensation to the President shall be determined by the IMC
Group Executive and reviewed and approved by the Policy
Committee prior to the making of any award. The achievement
of incentive compensation targets and award of incentive
compensation to the managers reporting to the President shall
be determined by him and reviewed with the IMC Group
Executive.
The Animal Feed Ingredient Division of the Partnership will
report to the IMC Group Executive, who shall be responsible
to the Policy Committee and to IMC management for ensuring
the effective interaction and coordination between the
general manager of the Partnership's Animal Feed Ingredient
Division and the other businesses of the Partnership. The
President shall review with the Policy Committee on an annual
basis management evaluation and succession planning issues
relating to the Partnership. Except as set forth herein,
nothing in this Section 6.09 shall be construed as (i)
changing any of the IMC Partner's responsibilities as
Operating Partner, or (ii) otherwise amending the Partnership
Agreement."
Section 5. Effective as of the Merger Date, Section 9.12 of
the Partnership Agreement shall be amended and restated to read in its
entirety as follows:
"9.12 Transactions with Affiliates. Except with
respect to items (i)(B) and (ii) referred to in the
parenthetical phrase in the following sentence, any
transaction, agreement, arrangement or understanding between
or on behalf of the Partnership, on the one hand, and the
Operating Partner or any Affiliate of the Operating Partner,
on the other hand, must be on terms no less favorable to the
Partnership than those which could be obtained from an
independent third party providing similar goods or services
of like quality. All such transactions, agreements,
arrangements and understandings in an aggregate amount in any
Fiscal Year in excess of the Base Affiliate Transaction
Amount for such Fiscal Year (other than (i) during any period
during which the IMC Partner is Operating Partner, (A) any
transactions, agreements, arrangements or understandings with
Operations' railcar repair business located at Xxxxxxxxxx,
Georgia on terms no less favorable to the Partnership than
those which could be obtained from an independent third party
providing similar goods or services of like quality and (B)
any transactions, agreements, arrangements and understandings
with the Rainbow Division of Operations or International
Minerals & Chemical (Canada) Global Limited ("IMC Canada
Ltd.", formerly International Minerals & Chemical Corporation
(Canada) Limited) on the terms set forth on Schedule 9.12 and
(ii) (A) the Marketing and Administrative Services Agreement,
(B) the Leasing Agreement, (C) the Materials Purchase and
Cost Sharing Agreement, (D) the Employee Cost Sharing
Agreement and (E) the Limestone Cost Sharing Agreement) shall
be subject to the approval of the Policy Committee or the
CEOs, as the case may be, in accordance with Section 6.07(a)
or (b). Partnership sales to the Farmarkets Division shall
be on the terms set forth in Schedule 9.12. Nothing in this
Section 9.12 shall in any way restrict or affect the right of
the Partnership to enter into transactions with Affiliates of
the Non-Operating Partner.
The Operating Partner will, and will cause its
Affiliates to (i) give the Non-Operating Partner and its
auditors and other authorized representatives such access to
the offices, properties, books and records of such party,
(ii) furnish to the Non-Operating Partner and its auditors
and other authorized representatives such financial and
operating data and other information as such Persons may
reasonably request and (iii) instruct its employees and
auditors to cooperate with the Non-Operating Partner and its
auditors and other authorized representatives, in each case
as may be reasonably requested by the Non-Operating Partner
to evaluate any transactions, agreements, arrangements or
understandings between the Partnership or the Managing
Partner on the one hand, and the Operating Partner and its
Affiliates, on the other hand; provided that any
investigation pursuant to this Section shall be conducted in
such a manner as not to interfere unreasonably with the
conduct of business of the Operating Partner and its
Affiliates."
Section 6. Effective as of July 1, 1995, Schedule 9.12 of
the Partnership Agreement shall be amended and restated to read in its
entirety as follows:
"A. Sales to IMC Canada Ltd. of GTSP, DAP, GMAP 11-52-0,
GMAP 10-50-0 and PFS ("Canada Products") shall be invoiced to
Operations by IMC-Agrico Company at the estimated IMC-Agrico
Company quarterly weighted average domestic sales realization
F.O.B. plant, subject to the limitation described in Section D
below, ("Quarterly Market Price") for each of Florida, Louisiana,
or Offsites, depending upon the source of the Canada Products,
less 10%, so long as the aggregate volume for the Canada Products
does not exceed 57,619 P2O5 tons for the fiscal year beginning
July 1. Sales of the Canada Products in any annual period in
excess of 57,619 P2O5 tons shall be invoiced at 100% of the
Quarterly Market Price for Florida, Louisiana or Offsites,
depending upon the source of the product.
Sales to IMC Canada Ltd. of any products other than those
listed above shall be invoiced to Operations by IMC-Agrico Company
at the Quarterly Market Price for Florida, Louisiana or Offsites,
depending upon the source of the product.
B. Sales to Operations' Rainbow Division ("IMC Rainbow") of
GTSP, DAP, MAP, GMAP 11-52-0, GMAP 10-50-0 and PFS ("Rainbow
Product(s)") shall be invoiced to Operations by IMC-Agrico Company
at the Quarterly Market Price for Florida, Louisiana or Offsites,
depending upon the source of the Rainbow Products, less 10%, but
not less than full production cost, so long as the aggregate
volume for the Rainbow Products does not exceed 95,200 P2O5 tons
for the fiscal year beginning July 1. Sales of the Rainbow
Products in any annual period in excess of 95,200 P2O5 tons shall
be invoiced at 100% of the Quarterly Market Price for Florida,
Louisiana or Offsites, depending upon the source of the product
(except that beginning on the Merger Date, sales of the Rainbow
Products in any annual period in excess of 95,200 P2O5 tons shall
be invoiced at 100% of the Quarterly Market Price for Florida,
Louisiana or Offsites, depending upon the source of the product,
plus $2 per ton of product).
Sales to IMC Rainbow of any products other than those listed
above shall be invoiced to Operations by IMC-Agrico Company at the
Quarterly Market Price for Florida, Louisiana or Offsites,
depending upon the source of the product.
C. Sales to the Farmarkets Division of GTSP, DAP, MAP, GMAP
10-52-0, GMAP 10-50-0 and PFS shall be invoiced at 100% of the
Quarterly Market Price for Florida, Louisiana or Offsite,
depending upon the source of the product.
D. The weighted average domestic sales realization, F.O.B.
plant, shall be utilized to determine the Quarterly Market Price
of a given product with respect to any quarter so long as the
total tons sold by domestic wholesale to non-Affiliates of IMC are
at least 75% of the aggregate tons sold to IMC Canada, Ltd., IMC
Rainbow and Farmarkets, collectively, during such quarter. If the
total tons sold by domestic wholesale of a given product to non-
Affiliates of IMC with respect to any quarter are less than 75% of
the aggregate tons sold to IMC Canada, Ltd., IMC Rainbow and
Farmarkets, collectively, during such quarter, the Policy
Committee shall determine an appropriate benchmark for determining
such quarterly market price.
E. Any transfer of sales responsibility from IMC's
wholesale division to IMC Rainbow or Farmarkets must be approved
by the Policy Committee.
F. Estimated prices invoiced by IMC-Agrico Company to IMC
Canada Ltd., IMC Rainbow or the Farmarkets Division shall be
adjusted to actual quarterly sales prices at the end of each
quarter. Final price adjustments shall be made within 20 days of
the end of each fiscal quarter and within 45 days of the end of
each fiscal year."
Section 7. (a) Effective as of the Merger Date, Section
2.08(b) of the Partnership Agreement shall be amended by modifying
clause (ii) of the first sentence as follows:
"(ii) subject to the last sentence of this Section
2.08(b), the conduct of the business of the Rainbow and
Farmarkets Divisions of IMC substantially as currently
conducted shall not constitute a breach or violation of this
Section 2.08(b)."
(b) Effective as of the Merger Date, Section 2.08(b) of the
Partnership Agreement shall be amended to add at the end thereof the
following:
"Notwithstanding any provision to the contrary contained
in this Section 2.08(b), the IMC Partner must present to the
FRP Partner any opportunity the IMC Partner may have to own,
manage, operate, control or invest in a business that is
engaged in the Phosphate Chemicals Business proposed to be
acquired by the IMC Partner or an Affiliate thereof which,
upon such acquisition, would become part of the Rainbow
Division or the Farmarkets Division, unless all of the
following conditions are satisfied (and if such conditions
are satisfied there shall be no obligation to present such
business to the FRP Partner):
(a) the business is not a major competitor of the
Partnership (a business shall not be deemed to be a
major competitor for purposes of this Section 2.08(b) if
(A) the revenues derived by such business from the (i)
production and wholesale sales of phosphate-based
fertilizers such as DAP, MAP, GTSP, GMAP, PFS and P2O5
in unmixed form, plus (ii) production of nitrogen-based
fertilizers such as ammonia, urea, UAN, ammonium nitrate
and ammonium sulfate in unmixed form, did not account
for more than 10% of the total revenues of such business
during the thirty-six months ending on the last day of
the month preceding the date on which the acquisition of
such business is consummated, and (B) the revenues
described in the foregoing clause (A) of this sentence,
plus revenues derived from the wholesale sale of
nitrogen-based fertilizers, did not account for more
than 20% of the total revenues of the business during
the thirty-six month period); for purposes of this
provision wholesale sales shall mean sales made for
resale;
(b) the revenue produced by such business
represents (and can reasonably be expected to represent)
less than 25% of the sales of Rainbow (if the business
will become part of the Rainbow Division upon
consummation of the acquisition) or less than 25% of the
sales of Farmarkets (if the business will become part of
the Farmarkets Division upon consummation of the
acquisition);
(c) the location of the business is such that
distribution, warehousing and other similar functions of
the Rainbow Division or the Farmarkets Division, as the
case may be, existing as of the date of the acquisition
would support and complement the operations of such
business after the consummation of the acquisition; and
(d) the common stock or other securities of the
business are not listed on any national securities
exchange registered under the Securities Exchange Act of
1934 or National Market System of a national securities
association registered under the Securities Exchange Act
of 1934;
provided, however, that it shall be the intent of Operations (but
without implying any supply obligation on the part of the
Partnership) that the additional phosphate products purchased by
the Rainbow Division or the Farmarkets Division as a result of the
acquisition of such business shall be acquired (subject to the
expiration of any existing contracts of such business for the
purchase of phosphate products) from the Partnership to the extent
that such acquisition of additional phosphate products from the
Partnership will not place the Rainbow Division or the Farmarkets
Division at a competitive disadvantage or result in the impairment
of beneficial commercial relations of the Rainbow Division or the
Farmarkets Division; provided further, that any such additional
phosphate products supplied by the Partnership shall be supplied
at a price equal to the lesser of (x) the price (as described in
Schedule 9.12, but not including the 10% discount to the Rainbow
Division) at which the Partnership then sells phosphate products
to the Rainbow Division or the Farmarkets Division, as the case
may be, and (y) the price at which such business may purchase
phosphate products from a source other than the Partnership."
Section 8. Effective as of the Merger Date, Exhibit A of the
Partnership Agreement shall be amended as follows:
(i) A definition of "Farmarkets Division" shall be added as
follows: "'Farmarkets Division' shall mean the business of the
Farmarkets Division as operated by The Vigoro Corporation as of
the date of the consummation of the merger of The Vigoro
Corporation with and into Bull Merger Company, a wholly-owned
subsidiary of Global."
(ii) The definition of "Phosphate Chemicals Business"
shall be amended (a) to add at the end of the first sentence
the following: "and (x) the animal feed business" and (b) to
delete the last sentence thereof and replace it with the
following: "Notwithstanding the foregoing, "Phosphate
Chemicals Business" shall not include the mixed fertilizer
business."
Section 9. (a) Effective as of the date hereof, the IMC
Partner hereby appoints Xxxxxxx X. Xxxxxx to serve as an IMC
Representative, and an IMC Representative shall resign as IMC
Representative.
(b) Effective as of the date hereof, the IMC Partner hereby
appoints Xxxxxxx X. Xxxxxx as the IMC Representative to serve as a Co-
Chairman of the Policy Committee, and the FRP Partner hereby appoints
Xxxx Xxxxxxxxx as the FRP Representative to serve as a Co-Chairman of
the Policy Committee.
(c) Effective as of the date hereof, the Managing Partner
shall, subject to approval of the Policy Committee of the Partnership,
appoint a President of the Partnership.
Section 10. This Agreement is solely for the benefit of the
parties hereto and no provision of this Agreement shall be deemed to
confer upon third parties, any remedy, claim, liability, reimbursement,
cause of action or other right in excess of those existing without
reference to this Agreement.
Section 11. This Agreement may be signed in counterparts.
Any single counterpart or set of counterparts signed, in either case,
by all the parties hereto shall constitute a full and original
agreement for all purposes.
IN WITNESS WHEREOF, the parties have signed this Agreement as
of the date first written above.
IMC-Agrico GP Company
By: XXXXXXXXX X. XXXXX
Name Printed: Xxxxxxxxx X. Xxxxx
Title: Senior Vice President,
Secretary and General Counsel
Agrico, Limited Partnership
By: Freeport-McMoRan Inc., its general partner
By: XXXX X. XXXXXXXXX
Name Printed: Xxxx X. Xxxxxxxxx
Title: President and
Chief Executive Officer
IMC-Agrico MP, Inc.
By: XXXXXXXXX X. XXXXX
Name Printed: Xxxxxxxxx X. Xxxxx
Title: Senior Vice President,
Secretary and General Counsel
IMC Global Operations Inc.
(formerly IMC Fertilizer, Inc.)
By: XXXXXXXXX X. XXXXX
Name Printed: Xxxxxxxxx X. Xxxxx
Title: Senior Vice President,
Secretary and General Counsel
IMC-Agrico Company
By: IMC-Agrico MP, Inc.
By: XXXXXXXXX X. XXXXX
Name Printed: Xxxxxxxxx X. Xxxxx
Title: Senior Vice President,
Secretary and General Counsel
0115367.01 02/14/96 2:43 PM
