EXHIBIT 10.67
EXHIBIT E
SECOND AMENDED AND RESTATED RELATED PARTY GUARANTY
THIS SECOND AMENDED AND RESTATED PARTY GUARANTY, dated as of
February 28, 1996 (the "Guaranty Agreement"), is made by IMC GLOBAL
INC., a Delaware corporation ("IMC") and The Vigoro Corporation, a
Delaware corporation ("Vigoro") in favor of THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, a New Jersey mutual insurance company
("Prudential"), each "Prudential Affiliate" (as defined in the Note
Agreement referred to below) which is a holder of a Note (as defined in
the Note Agreement referred to below) and each "Transferee" (as defined
in the Note Agreement referred to below). Prudential, each such
Prudential Affiliate and each such Transferee are collectively referred
to herein as the "Purchasers." Reference is made to paragraph 9B hereof
for definitions of certain capitalized terms used herein and not
otherwise defined herein.
RECITALS:
A. Kalium Canada, Ltd., a corporation organized under the
federal laws of Canada ("Kalium"), is a party to that certain Second
Amended and Restated Note Purchase Agreement dated as of the date
hereof between Kalium and Prudential (as amended, restated, extended,
renewed, supplemented or otherwise modified from time to time, the
"Note Agreement").
B. Kalium is an indirect wholly-owned subsidiary of Vigoro.
Vigoro has heretofore guaranteed all of the obligations of Kalium under
the Note Agreement pursuant to that certain Amended and Restated
Related Party Guaranty dated as of December 22, 1994 made by Vigoro in
favor of the Purchasers (as heretofore amended, restated, extended,
renewed, supplemented and otherwise modified from time to time, the
"Existing Guaranty").
C. Vigoro is a party to that certain Agreement and Plan of
Merger dated as of November 13, 1995 among Vigoro, IMC and Bull Merger
Company, a Delaware corporation and wholly-owned subsidiary of IMC
("Bull"), pursuant to which it is intended that Bull merge with and
into Vigoro (the "Merger"). After giving effect to the Merger, Kalium
will be an indirect wholly-owned subsidiary of IMC.
D. IMC and Vigoro desire that the Merger be consummated and
that the Purchasers give their requisite consent thereto.
E. The Purchasers' willingness to consent to the Merger
is conditioned upon, among other things, the execution and delivery of
this Guaranty Agreement.
F. In addition, IMC and Vigoro desire hereby to amend and
restate the Existing Guaranty in order to make certain changes therein
in light of the facts set forth in the foregoing recitals.
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to IMC and Vigoro, the receipt and sufficiency of
which are hereby acknowledged, IMC and Vigoro hereby make the following
representations and warranties to the Purchasers and hereby covenant
and agree with each Purchaser as follows:
1. AMENDMENT AND RESTATEMENT ASSUMPTION; GUARANTY.
1A. AMENDMENT AND RESTATEMENT. Subject to the satisfaction
(or express written waiver by the Purchasers) of all of the conditions
of effectiveness contained in paragraph 3 of the Note Agreement, this
Guaranty Agreement amends and restates in its entirety the Existing
Guaranty, and the Existing Guaranty is fully superseded hereby;
provided, however, that this Guaranty Agreement shall not constitute a
novation of any debts, liabilities or obligations under the Existing
Guaranty. Without limiting the foregoing, notwithstanding that certain
provisions in the Existing Guaranty have been deleted in this Guaranty
Agreement, the Purchasers are not waiving any of their respective
rights, powers or remedies with respect to any misrepresentation,
breach or fraud by Vigoro in connection with the Existing Guaranty.
1B. ASSUMPTION. Each of IMC and Vigoro hereby represents,
warrants and agrees that the Existing Guaranty is presently in full
force and effect and that it is enforceable in accordance with its
terms. IMC hereby irrevocably, absolutely, unconditionally and
expressly assumes all debts, liabilities, and obligations of Vigoro
arising under and otherwise relating to the Existing Guaranty
(collectively, the "Vigoro Obligations"). Notwithstanding the foregoing
assumption, Vigoro shall continue to be liable, jointly and severally
with IMC, for the Vigoro Obligations until the "Change Date", (as
defined below). On the Change Date, Vigoro shall be permanently
released (automatically and without the need for any further action)
from all of the Vigoro Obligations hereunder (including, without
limitation, any obligations arising under paragraph 4A hereof). The
term "Change Date" shall mean the date (if any) designated as the
"Change Date" for purposes of this Guaranty Agreement in a written
notice given to Vigoro by the Purchasers in substantially the form of
Annex I hereto or such other form as the Purchasers may reasonably
choose (it being acknowledged and agreed that the Purchasers shall be
under no obligation to give any such notice, and the Purchasers may or
may not do so as determined by them in their sole discretion).
1C. GUARANTY. The Guarantor (as defined below in
paragraph 9B) irrevocably and unconditionally guarantees to each
Purchaser, as primary obligor and not merely as surety, the full and
prompt payment of (i) the principal of, premium, if any, and interest
on, and any other amounts due under, the Notes (including obligations
which, but for the automatic stay under Section 362 (a) of the
Bankruptcy Code would become due) when and as the same shall become due
and payable (whether at stated maturity or by required or optional
prepayment or by acceleration or otherwise) and (ii) any other sums now
existing or hereafter incurred under, arising out of or in connection
with the Note Agreement and the Notes (all such obligations described
in clauses (i) and (ii) above are herein called the "Guaranteed
Obligations"). The guaranty in the preceding sentence is an absolute,
present and continuing guaranty of payment and not of collectibility
and is in no way conditional or contingent upon any attempt to collect
from Kalium or any other guarantor of the Notes or upon any other
action, occurrence or circumstance whatsoever. In the event that
Kalium shall fail so to pay any of such Guaranteed Obligations, the
Guarantor agrees to pay the same when due to the holders of the Notes
entitled thereto, without demand, presentment, protest or notice of any
kind. Each default in payment of principal of, premium, if any, or
interest on any Note shall give rise to a separate cause of action
hereunder and separate suits may be brought hereunder as each cause of
action arises. The Guarantor hereby agrees to pay and to indemnify and
save the holders of the Notes harmless from and against any damage,
loss, cost or expense (including reasonable attorneys' fees) which such
holder may incur or be subject to as a consequence, direct or indirect,
of (i) any breach by the Guarantor or by Kalium of any warranty,
covenant, term or condition in, or the occurrence of any default under,
this Guaranty Agreement, the Notes or the Note Agreement, together with
all expenses resulting from the compromise or defense of any claims or
liabilities arising as a result of any such breach or default, and (ii)
any legal action commenced to challenge the validity of this Guaranty
Agreement, the Notes or the Note Agreement.
2. OBLIGATIONS ABSOLUTE. The obligations of the Guarantor
hereunder shall be primary, absolute, irrevocable and unconditional,
irrespective of the validity, regularity or enforceability of the Notes
or of the Note Agreement, shall not be subject to any counterclaim,
setoff, deduction or defense based upon any claim the Guarantor may
have against Kalium or any holder of the Notes or otherwise, and shall
remain in full force and effect without regard to, and shall not be
released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not the Guarantor shall have any
knowledge or notice thereof), including, without limitation: (a) any
amendment, restatement, modification of or supplement to the Note
Agreement, the Notes or any other instrument referred to therein
(except that the obligations of the Guarantor hereunder shall apply to
the Note Agreement, the Notes or such other instruments as so amended,
restated, modified or supplemented) or any assignment or transfer of
any thereof or of any interest therein, or any furnishing, acceptance
or release of any security for the Notes; (b) any waiver, consent,
extension, indulgence or other action or inaction under or in respect
of the Notes or in respect of the Note Agreement; (c) any bankruptcy,
insolvency, readjustment, composition, liquidation or similar
proceeding with respect to Kalium or its property; (d) any merger,
amalgamation or consolidation of the Guarantor or of Kalium into or
with any other corporation or any sale, lease or transfer of any or all
of the assets of the Guarantor or of Kalium to any Person; (e) any
failure on the part of Kalium for any reason to comply with or perform
any of the terms of any other agreement with the Guarantor; or (f) any
other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. The Guarantor covenants
that its obligations hereunder will not be discharged except as
expressly provided herein.
3. WAIVER; OBLIGATIONS UNIMPAIRED; DUTY TO STAY INFORMED.
3A. WAIVER. The Guarantor unconditionally waives to the
fullest extent permitted by law, (a) notice of acceptance hereof, of
any action taken or omitted in reliance hereon and of any defaults by
Kalium in the payment of any amounts due under the Notes or the Note
Agreement, and of any of the matters referred to in paragraph 2 hereof,
(b) all notices which may be required by statute, rule of law or
otherwise to preserve any of the rights of each holder from time to
time of the Notes against the Guarantor, including, without limitation,
presentment to or demand for payment from Kalium or the Guarantor with
respect to any Note, notice to Kalium or to the Guarantor of default or
protest for nonpayment or dishonor and the filing of claims with a
court in the event of the bankruptcy of Kalium, (c) any right to the
enforcement, assertion or exercise by any holder of the Notes of any
right, power or remedy conferred in this Guaranty Agreement, the Note
Agreement, the Notes or any other guaranty, (d) any requirement of
diligence on the part of any holder of the Notes and (e) any other act
or omission or thing or delay to do any other act or thing which night
in any manner or to any extent vary the risk of the Guarantor or which
might otherwise operate as a discharge of the Guarantor.
3B. OBLIGATIONS UNIMPAIRED. The Guarantor authorizes the
holders of the Notes, without notice or demand to the Guarantor and
without affecting its obligations hereunder, from time to time (a) to
renew, compromise, extend, accelerate or otherwise change the time for
payment of, or otherwise change the terms (including, without
limitation, the interest rate on or the Yield-Maintenance Amount with
respect to the Notes) of, all or any part of the Notes, the Note
Agreement or any other instrument referred to therein; (b) to take and
hold security for the payment of the Notes, for the performance of this
Guaranty Agreement or otherwise for the indebtedness guaranteed hereby
and to exchange, enforce, waive and release any such security; (c) to
apply any such security and to direct the order or manner of sale
thereof as the holders of the Notes in their sole discretion may
determine; (d) to obtain additional or substitute endorsers or
guarantors; (e) to release and discharge any Guarantor or all or any
additional guarantor or endorser of the Guaranteed Obligations
(including, without limitation, to release and discharge Vigoro as a
Guarantor on the Change Date) (f) to exercise or refrain from
exercising any rights against Kalium and others; and (g) to apply any
sums, by whomsoever paid or however realized, to the payment of the
principal of, premium, if any, and interest on the Notes ad any other
Guaranteed Obligation hereunder. The Guarantor waives any right to
require the holders of the Notes to proceed against any Guarantor or
any additional or substitute endorsers or guarantors or to pursue or
exhaust any security provided by Kalium, the Guarantor or any other
Person or to pursue any other remedy available to such holders.
3C. DUTY TO STAY INFORMED. The Guarantor assumes all
responsibility for being and keeping itself informed of Kalium's
financial condition and assets, and of all other circumstances bearing
upon the risk of non-payment of the Guaranteed Obligations and the
nature, scope and extent of the risks which the Guarantor assumes and
incurs hereunder, and agrees that the Purchasers shall have no duty to
advise the Guarantor of information known to them regarding such
circumstances or risks.
4. REINSTATEMENT OF GUARANTY; PAYMENTS; RANK OF GUARANTY.
4A. REINSTATEMENT OF GUARANTY. This Guaranty Agreement shall
continue to be effective, or be reinstated, as the case may be, if and
to the extent at any time payment, in whole or in part, of any of the
sums due to any holder of the Notes for principal, premium, if any, or
interest on the Notes or any of the other Guaranteed Obligations is
rescinded or must otherwise be restored or returned by such holder upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization
of Kalium, or upon or as a result of the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to
Kalium or any substantial part of its property, or otherwise, all as
though such payments had not been made. If an event permitting the
acceleration of the maturity of the principal amount of the Notes shall
at any time have occurred and be continuing and such acceleration shall
at such time be prevented or the right of any holder of a Note to
receive any payment under any Note shall at such time be delayed or
otherwise affected by reason of the pendency against Kalium of a case
or proceeding under a bankruptcy or insolvency law, the Guarantor
agrees that, for purposes of this Guaranty Agreement and its
obligations hereunder, the maturity of such principal amount shall be
deemed to have been accelerated with the same effect as if the
holders of the Notes had accelerated the same in accordance with the
terms of the Note Agreement, and the Guarantor shall forthwith pay such
accelerated principal amount, accrued interest and premium, if any,
thereon and any other amounts guaranteed hereunder.
4B. PAYMENTS. The Guarantor hereby guarantees that the
Guaranteed Obligations will be paid to each holder of the Notes in
lawful currency of the United States of America and in immediately
available funds, at the times and places provided in, and otherwise
strictly in accordance with the terms and provisions of, the Note
Agreement and the Notes (regardless of any law, regulation or decree
now or hereafter in effect which might in any manner affect the
Guaranteed Obligations, or the rights of any such holder with respect
thereto as against Kalium, or cause or permit to be invoked any
alteration in the time, amount or manner of payment by Kalium of any or
all of the Guaranteed Obligations), without set-off or counterclaim and
free and clear of, and without reduction for or on account of, any
present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions, withholdings now or hereafter
imposed, levied, collected, withheld or assessed by any country (or by
any political subdivision or taxing authority thereof or therein)
excluding income and franchise taxes of the United States of America or
any political subdivision, state or taxing authority thereof or therein
such non- excluded taxes being called "Foreign Taxes") . If any Foreign
Taxes are required to be withheld from any amount payable to any such
holder under this Guaranty Agreement or under the Notes, the amounts so
payable to such holder shall be increased to the extent necessary to
yield to such-holder (after payment of all Foreign Taxes) interest or
any such other amounts at the rates or in the amounts specified in the
Note Agreement and the Notes.
4C. RANK OF GUARANTY. The Guarantor agrees that its
obligations under this Guaranty Agreement shall rank at least pari
passu with all other unsecured senior obligations of the Guarantor now
or hereafter existing.
5. AFFIRMATIVE COVENANTS.
5A. Financial Statements. The Guarantor covenants that it
will cause to be delivered to each Significant Holder of any Notes in
triplicate:
(i) as soon as practicable and in any event within
50 days after the end of each quarterly period (other than
the last quarterly period) in each fiscal year, Consolidated
statements of income and cash flows of IMC and its
Subsidiaries for the period from the beginning of the current
fiscal year to the end of such quarterly period, and a
Consolidated balance sheet of IMC and its Subsidiaries as at
the end of such quarterly period, setting forth in each case
in comparative form figures for the corresponding period in
the preceding fiscal year, all in reasonable detail and
certified by an authorized financial officer of IMC, subject
to changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 95
days after the end of each fiscal year, (a) Consolidated
statements of income and cash flows and a Consolidated
statement of shareholders' equity of IMC and its Subsidiaries
for such year, and a Consolidated balance sheet of IMC and
its Subsidiaries as at the end of such year, setting forth in
each case in comparative form corresponding Consolidated
figures from the preceding annual audit, reported on by
independent public accountants of recognized national
standing selected by IMC whose report shall be without
limitation as to scope of the audit and shall not be
qualified in any respect, and (b) a Consolidated unaudited
balance sheet of each Borrower and its Subsidiaries as of the
end of such fiscal year and Consolidated unaudited statements
of income and cash flows of such Borrower and its
Subsidiaries for such fiscal year;
(iii) promptly upon transmission thereof,
copies of all such financial statements, proxy statements,
notices and reports as it shall send to its public
stockholders and copies of all registration statements
(without exhibits) and all reports which it files with the
Securities and Exchange Commission (or any governmental body
or agency succeeding to the functions of the Securities and
Exchange Commission) , other than any such reports to which
the Securities and Exchange Commission accords confidential
treatment; and
(iv) with reasonable promptness, such other
information respecting the business, condition (financial or
otherwise), operations, performance, properties or prospects
of IMC or any of its Subsidiaries as such Significant Holder
may from time to time reasonably request.
Together with each delivery of financial statements required by clauses
(i) and (ii) above, the Guarantor will cause to be delivered to each
holder of any Notes an Officer's Certificate demonstrating (with
computations in reasonable detail) compliance by IMC and its
Subsidiaries with xxx xxxxxxxxxx xx xxxxxxxxxx 0X, 0X(x)(xxx),
0X(x)(xxx), 0X(x)(x), 6B(2)(i), 6B(2)(ii)(F), 6B(2)(ii)(G),
6B(2)(ii)(J), 6B(2)(ii)(K), 6B(2)(ii)(M), 6B(2)(iii)(F), 6B(2)(iii)(G),
6B(3)(xiv), 6B(6)(ix) and stating that there exists no Event of Default
or Default, or, if any Event of Default or Default exists, specifying
the nature and period of existence thereto and what action the
Guarantor proposes to take with respect thereto. Together with each
delivery of financial statements required by clause (ii) above, the
Guarantor will cause to be delivered to each holder of any Notes a
certificate of such accountants stating that, in making the audit
necessary for their report on such financial statements, they have
obtained no knowledge of any Event of Default or Default, or, if they
have obtained knowledge of any Event of Default or Default, specifying
the nature and period of existence thereof. Such accountants, however,
shall not be liable to anyone by reason of their failure to obtain
knowledge of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards.
The Guarantor also covenants that immediately after any
Responsible Officer obtains actual knowledge of an Event of Default or
Default, it will cause to be delivered to each holder of any Notes an
Officer's Certificate specifying the nature and period of existence
thereof and what action the Guarantor proposes to take with respect
thereto.
5B. Inspection of Property. The Guarantor covenants that it
will permit any Person designated by any Significant Holder in writing,
at such Significant Holder's expense, under guidance of officers of the
Guarantor or its Subsidiaries, to visit and inspect any of the
properties of the Guarantor and its Subsidiaries, to examine the
corporate books and financial records of the Guarantor and its
Subsidiaries and make copies thereof and extracts therefrom and to
discuss the affairs, finances and accounts of any of such corporations
with the principal officers of the Guarantor, all at such reasonable
times and as often as such Significant Holder may reasonably request.
Notwithstanding anything to the contrary in paragraph 5A or 5B or
elsewhere in this Guaranty Agreement, unless and until an Event of
Default shall have occurred and be continuing, the Guarantor and its
Subsidiaries shall have no obligation to disclose to any Purchaser or
Transferee, or any representative or agent of any Purchaser or
Transferee, any confidential non-public proprietary information
relating to operational technology, including, without limitation,
information relating to the process of solution mining of potash (when
there is an Event of Default, to the extent practicable and to the
extent consistent with such Significant Holder's objectives, such
Person shall use reasonable efforts to inspect such confidential non-
public proprietary information on-site without making copies thereof).
If any such information does become known to any such Person, it shall
use its best efforts to keep such information confidential in
accordance with the requirements of this Guaranty Agreement.
5C. Covenant to Secure Notes Equally. The Guarantor
covenants that, if it or any Subsidiary shall create or assume any Lien
upon any of its property or assets, whether now owned or hereafter
acquired, other than Liens permitted by the provisions of paragraph
6B(l) (unless prior written consent to the creation or assumption
thereof shall have been obtained pursuant to paragraph (10A), it will
make or cause to be made effective provision whereby the Notes will be
secured by such Lien equally and ratably with any and all other Debt
thereby secured so long as any such other Debt shall be so secured.
5D. Maintenance of Insurance. The Guarantor covenants that
it and each Subsidiary shall maintain, with financially sound and
reputable insurers, insurance in such amounts and against such
liabilities and hazards as ordinarily carried by companies similarly
situated in the same or similar lines of business; provided, however,
that the Guarantor and its Subsidiaries may self-insure to the same
extent as other companies similarly situated in the same or similar
lines of business. The Guarantor has delivered to the Purchasers a
summary of the insurance plans set forth the Disclosure Letter and such
summary and the coverage described therein is satisfactory to the
Purchasers as of the date hereof.
5E. Agreement Assuming Liability on Notes. The Guarantor
covenants that, if at any time any Person should become liable (as co-
obligor, endorser, guarantor or surety) on any other obligation for
borrowed money of the Guarantor or on any obligation for borrowed money
of any Subsidiary (other than obligations incurred by such Subsidiary
in the ordinary course of its business in connection with take-or-pay
contracts, chemical supply contracts or other similar ordinary course
agreements or arrangements), the Guarantor will, at the same time,
cause such Person to deliver to the holders of the Notes an agreement
pursuant to which such Person becomes similarly liable on the Notes.
5F. Compliance with Laws. Except as to environmental
matters, the Guarantor covenants that it and each Subsidiary shall
comply with all applicable laws, rules, regulations, decrees and orders
of all Federal, state, local or foreign courts or governmental
agencies, authorities, instrumentalities or regulatory bodies
noncompliance with which could be reasonably expected to result in a
Material Adverse Effect. With respect to environmental matters, the
Guarantor covenants that it and each Subsidiary shall comply with all
applicable laws, rules, regulations, decrees and orders of all federal,
state, local or foreign courts or governmental agencies, authorities,
instrumentalities or regulatory bodies relating to the protection of
the environment ("Environmental Laws") noncompliance with which could
be reasonably expected to have a material adverse effect on the ability
of the Guarantor and its Subsidiaries to perform and comply with all of
their obligations under this Guaranty Agreement and the documents
delivered in connection herewith. Notwithstanding any other provision
contained in this Guaranty Agreement to the contrary, the provisions of
the immediately preceding sentence of this paragraph 5F shall be the
only covenant applicable to compliance with Environmental Laws.
5G. Payment of Taxes, Etc. The Guarantor covenants that it
will pay and discharge, and cause the Subsidiaries to pay and
discharge, before the same shall become delinquent, (i) all income and
other material taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that,
if unpaid, might by law become a Lien upon its property; provided,
however, that neither the Guarantor nor any Subsidiary shall be
required to pay or discharge any such tax, assessment, charge, levy or
claim that is being contested in good faith and by proper proceedings
and as to which adequate reserves are being maintained, unless and
until any Lien attaches with respect thereto which is not a Lien
permitted under paragraph 6B(l).
5H. Performance of Related Documents. The Guarantor
covenants that it will, and will cause each Subsidiary (as applicable)
to, perform and observe all of the terms and provisions of each Related
Document to be performed or observed by it, maintain each such Related
Document in full force and effect, enforce such Related Document in
accordance with its terms, take all such action to such end as may be
from time to time reasonably requested by any Significant Holder and,
upon the reasonable request of any Significant Holder, make to each
other party to each such Related Document such demands and requests for
information and reports or for action as such Person is entitled to
make under such Related Document, in each case except to the extent
that the failure to do so could not be reasonably likely to materially
impair the value of the interests or materially impair the rights of
the Guarantor or any Subsidiaries and could not be reasonably likely to
materially impair the interests or materially impair the rights of any
holder of Notes.
5I. Transactions with Affiliates. The Guarantor covenants
that it will conduct, and cause the Subsidiaries to conduct, all
transactions otherwise permitted under this Guaranty Agreement with any
of their Affiliates on terms that are fair and reasonable and no less
favorable to the Guarantor or such Subsidiary (as applicable) than it
would obtain in a comparable arm's-length transaction with a Person not
an Affiliate, other than: (i) the marketing and administrative services
agreement between Global Operations and the Managing Partner, (ii) the
employee leasing agreement between Global Operations and the Managing
Partner, (iii) transactions between the Joint Venture Company and (A)
Global Operations' railcar repair business located at Xxxxxxxxxx,
Georgia, (B) Global Operations' "Rainbow" Division, (C) Vigoro's and
its Subsidiaries, "FarMarkets" Divisions pursuant to the arrangements
set forth in the Partnership Agreement as in effect on the date hereof
and (D) IMC Canada and (iv) Investments and other transactions between
or among the Guarantor and its Subsidiaries to the extent expressly
permitted by paragraphs 6B(2), 6B(3), 6B(5) or 6B(6).
5J. Financial Covenants. The Guarantor covenants that there
shall be:
(a) Tangible Net Worth. Maintained at the end of each
fiscal quarter of IMC Adjusted Tangible Net Worth in an amount equal at
least to the sum of (i) $900,000,000, (ii) an amount equal to 40% of
cumulative Consolidated net income (calculated with the payment of
dividends on the Vigoro Series E Preferred Stock being treated as
interest payments) of IMC and its Subsidiaries for each fiscal quarter
of IMC commencing April 1, 1996 and (iii) the amount, if any, of equity
resulting from the conversion of IMC's 6.25% Convertible Subordinated
Notes due 2001 into equity.
(b) Interest Coverage Ratio. Maintained at the end of each
fiscal quarter of IMC a ratio of (x) an amount equal to (i)
Consolidated EBITDA of IMC and its Subsidiaries less (ii) income from
minority interests held by IMC or any of its Subsidiaries to (y) the
sum of (A) interest payable on, and amortization of debt discount in
respect of, all Debt of IMC and its Subsidiaries (excluding, to the
extent included therein, interest in respect of the Chemical Supplier
Debt and contingent obligations in respect of Membership Debt) and (B)
cash dividends on the Vigoro Series E Preferred Stock of not less than
3.25:1 for the four consecutive fiscal quarters of the Guarantor then
ended.
(c) Leverage Ratio. Maintained at all times a ratio of (i)
the sum of (A) Consolidated Funded Debt and (B) the average (calculated
as at the end of each of the twelve most recently ended months)
outstanding Consolidated short-term Debt with a maturity of less than
one year from the date of the creation of such liabilities (excluding,
to the extent included therein, Debt in respect of Hedge Agreements,
the Chemical Supplier Debt and contingent obligations in respect of
Membership Debt) and (C) the book value of the Vigoro Series E
Preferred Stock minus (D) cash and Cash Equivalents in excess of
$15,000,000 of IMC and its Subsidiaries on hand at such time to (ii)
Capitalization, in each case, of IMC and its Subsidiaries of not more
than 0.55:1.
6. NEGATIVE COVENANTS. Unless the Required Holder(s) shall
otherwise consent in writing, the Guarantor agrees to observe and
perform and to cause its Subsidiaries to observe and perform each of
the negative covenants set forth below so long as any Note shall remain
outstanding.
6A. [INTENTIONALLY OMITTED]
6B. Credit and other Restrictions. The Guarantor covenants
that it will not and will not permit any Subsidiary to:
6B(l). Lien Restrictions. Create, incur, assume or suffer
to exist any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file under the Uniform Commercial
Code or other applicable personal property security legislation of any
jurisdiction, a financing statement that names the Guarantor or any
Subsidiary as debtor, or sign any security agreement authorizing any
secured party thereunder to file such financing statement, or assign
any accounts or other right to receive income, excluding, however, from
the operation of the foregoing restrictions the following:
(i) Permitted Liens;
(ii) Liens in existence on the date hereof which are
specifically described on Schedule 6B(l) of the IMC Agreement;
(iii) (A) Liens arising in connection with Capitalized
Leases, provided that no such Lien shall extend to or cover any
property or assets other than the assets subject to such
Capitalized Leases, and (B) Liens upon or in real property or
equipment acquired or held by the Guarantor or any of its
Subsidiaries in the ordinary course of business after the date
hereof to secure the purchase price of such property or equipment
or to secure Debt incurred or assumed solely for the purpose of
financing the acquisition, construction or improvement of any such
property or equipment to be subject to such Liens, or Liens
existing on any such property or equipment at the time of
acquisition (other than any such Liens created in contemplation of
such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for
the same or a lesser amount as at the time of such acquisition,
construction or improvement; provided, however, that no such Lien
shall extend to or cover any property other than the property or
equipment being acquired, constructed or approved and no such
extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended,
renewed or replaced; provided further that such Lien shall be
incurred within 180 days after such acquisition, construction or
improvement; and provided still further that the aggregate
principal amount of the Debt secured by Liens permitted by this
clause (iii) shall not exceed $25,000,000 at any time outstanding
and that any such Debt shall not otherwise be prohibited by the
terms of this Guaranty Agreement;
(iv) Liens arising by reason of customary deposits necessary
to qualify the Guarantor or any of its Subsidiaries to maintain
self-insurance, to the extent such self-insurance is permitted
hereunder;
(v) security deposits customarily required in connection with
leases of real property entered into in the ordinary course of
business;
(vi) any interest or title of a lessor under any operating
lease and liens arising from precautionary filings of UCC
financing statements regarding leases;
(vii) attachment, judgment and other similar Liens arising in
connection with court proceedings; provided that the execution or
other enforcement of such Liens is effectively stayed within ten
days after the Guarantor or one of its Subsidiaries receives
notice thereof and the claims secured thereby are being actively
contested in good faith by appropriate proceedings and against
which an adequate reserve has been established, and Provided
further that the aggregate amount secured by such Liens does not
exceed $15,000,000;
(viii) Liens on accounts receivable and other related assets
(including the taking of possession of chattel paper) arising
solely in connection with the sale, assignment or other
disposition of such accounts receivable permitted under paragraph
6B(7);
(ix) The replacement, extension or renewal of any Lien
permitted by clause (ii) above upon or in the same property
theretofore subject thereto (provided there is no increase in the
amount, nor any change in any direct or contingent obligor, of the
Debt secured thereby); and
(X) Liens not otherwise covered in (i) through (ix) of this
paragraph 6B(l) which Liens do not secure obligations in an amount
exceeding $25,000,000 in the aggregate.
6B(2). Debt Restriction. Create, incur, assume or suffer to
exist any Debt other than:
(i) in the case of IMC, unsecured Debt, provided that
immediately after giving effect thereto, IMC shall be in pro forma
compliance (calculated based on historical financial statements
most recently furnished or required to be furnished pursuant to
paragraph 5A(i) or (ii) as though such Debt had been incurred at
the beginning of the period covered thereby, adjusted to account
for the refinancing or replacement of Debt by such Debt being
incurred and for any permanent repayments of Debt) with the
covenants set forth in paragraph 5J, provided further, that with
respect to any Debt arising under Hedge Agreements, such Hedge
Agreements shall be designed to hedge against fluctuations in
interest rates, commodity prices or foreign exchange rates
incurred in the ordinary course of business, shall be consistent
with prudent business practices, and shall be non-speculative in
nature (including, without limitation, with respect to the term
and purpose thereof);
(ii) in the case of IMC's Subsidiaries (other than the Joint
Venture Company),
(A) Membership Debt with respect to (i) Canpotex
incurred in the ordinary course of business and consistent
with prudent business practices or (ii) SKMG incurred in the
ordinary course of business and consistent with past business
practices,
(B) Debt existing on the date hereof, as set forth on
Part I of Schedule 6B(2) of the IMC Agreement (such Debt,
other than Debt consisting of Intercompany Debt, being the
"Existing Subsidiary Debt"), and any Debt extending the
maturity of, or refunding or refinancing, in whole or in
part, any Existing Subsidiary Debt, provided that the terms
of any such extending, refunding or refinancing Debt, and of
any agreement entered into and of any instrument issued in
connection therewith, are no more restrictive in any material
respects than the terms of the Existing Subsidiary Debt being
extended, refunded or refinanced thereby (it being understood
that Debt being refinanced at maturity may bear interest at
then-market rates) and provided further that the principal
amount of such Existing Subsidiary Debt shall not be
increased above the principal amount thereof outstanding
immediately prior to the Restatement Date and the direct and
contingent obligors therefor shall not be changed (other than
the addition of the guaranty of such Debt by IMC) to the
extent such guarantee is otherwise permitted under paragraph
6B(2)(i) , as a result of or in connection with such
extension, refunding or refinancing,
(C) Debt arising under Hedge Agreements designed
to hedge against fluctuations in interest rates, commodity
prices or foreign exchange rates incurred in the ordinary
course of business and consistent with prudent business
practices, provided that such Hedge Agreements shall be non-
speculative in nature (including, without limitation, with
respect to the term and purpose thereof),
(D) indorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course
of business,
(E) Debt owing from a Subsidiary Guarantor to another
Subsidiary Guarantor,
(F) (i) prior to the Release Date, (x) Debt owing
from a Subsidiary Guarantor to a Non-Guarantor Subsidiary (y)
Debt owing from a Non-Guarantor Subsidiary to any other Non-
Guarantor Subsidiary, and (z) Debt owing from a Non-Guarantor
Subsidiary to a Subsidiary Guarantor, which, shall not
exceed, in the aggregate, $25,000,000 at any time
outstanding, and (ii) after the Release Date, Debt owing from
any Subsidiary of IMC to any other Subsidiary of IMC,
(G) (i) Debt in an amount of $300,000,000 in
connection with the reinstatement of the Subordinated
Intercompany Notes, and (ii) other Debt owing to IMC, which,
prior to the Release Date, shall not exceed, in the
aggregate, $300,000,000 at any time outstanding,
(H) Chemical Supplier Debt incurred in the ordinary
course of business and consistent with past business
practices,
(I) Debt of any Subsidiary arising in connection with
the redemption of the Vigoro Series E Preferred Stock
outstanding on the date hereof upon exercise of any mandatory
redemption right; provided, however, that the provisions of
the documents governing or evidencing the same are, in the
good faith determination of the Required Holder(s), not
materially more restrictive than the provisions in this
Guaranty Agreement and not materially adverse to the
interests of the holders of the Notes,
(J) in the case of Global Operations only and
only during such time as Global Operations is a party to the
Subsidiary Guaranty as a "Guarantor" (as such term is defined
therein) and the Subsidiary Guaranty is in full force and
effect, Debt constituting money borrowed by Global Operations
under the New Credit Agreement; provided, however, that the
aggregate outstanding principal amount thereof at no time
exceeds $405,000,000 minus the aggregate outstanding
principal amount of money borrowed by IMC under the New
Credit Agreement; provided further, that in the event any
Default or Event of Default shall occur and be continuing
Global Operations shall not, during such time, be permitted
by reason of this clause (J) to incur Debt (as opposed to
permitting to exist Debt theretofore incurred) constituting
money borrowed under the New Credit Agreement,
(K) in the case of Kalium only, Funded Debt
constituting money borrowed by Kalium under the New Credit
Agreement; provided, however, that the aggregate principal
amount borrowed shall not exceed $50,000,000,
(L) other Debt not to exceed in the aggregate
$120,000,000 outstanding at any time;
(iii) in the case of the Joint Venture Company,
(A) Debt existing on the date hereof, as set forth
on Part II of Schedule 6B (2) of the IMC Agreement (the
"Existing JV Debt"), and any Debt extending the maturity of,
or refunding or refinancing, in whole or in part, any JV
Existing Debt, provided that the terms of any such extending,
refunding or refinancing Debt, and of any agreement entered
into and of any instrument issued in connection therewith,
are no more restrictive in any material respects than the
terms of the Existing Debt being extended, refunded or
refinanced thereby (it being understood that Debt being
refinanced at maturity may bear interest at then-market
rates) and provided further that the principal amount of such
JV Existing Debt shall not be increased above the principal
amount thereof outstanding immediately prior to the
Restatement Date and the direct and contingent obligors
therefor shall not be changed as a result of or in connection
with such extension, refunding or refinancing,
(B) indorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business,
(C) Debt arising under Hedge Agreements designed
to hedge against fluctuations in interest rates, commodity
prices or foreign exchange rates incurred in the ordinary
course of business and consistent with prudent business
practices, provided that such Hedge Agreements shall be non-
speculative in nature (including, without limitation, with
respect to the term and purpose thereof),
(D) Membership Debt with respect to PhosChem or
Phosrock incurred in the ordinary course of business and
consistent with past business practices,
(E) Chemical Supplier Debt incurred in the ordinary
course of business and consistent with past business
practices, and
(F) other Debt not to exceed in the aggregate
$50,000,000 outstanding at any time; and
(iv) notwithstanding the foregoing provisions of this
paragraph 6B(2), the Guarantor shall at all times be in compliance
with the provisions of paragraph 5J.
6B(3). Investments. Make or hold any Investment in any
Person other than:
(i) the Guarantor and its Subsidiaries may acquire and hold
receivables owing to them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
prudent business practices;
(ii) Investments by the Guarantor or any of its Subsidiaries
in Cash Equivalents;
(iii)Investments by the Guarantor or any of its Subsidiaries
resulting from Hedge Agreements permitted under paragraph 6B(2)(i)
or (ii)(C);
(iv) Investments (a) by Global Operations and the Managing
Partner in the Joint Venture Company in accordance with the terms
of the Partnership Agreement and (b) by Global Operations in IMC
Partner, the Managing Partner and the Joint Venture Company, in
each case pursuant to and in accordance with the Partnership
Agreement or as otherwise permitted under paragraph 6B(2)(iii)(A);
(v) Equity investments by the Guarantor or any of its
Subsidiaries in any of its Subsidiaries made prior to the date
hereof;
(vi) Investments by the Guarantor or any of its Subsidiaries
in any third party made prior to the date hereof and set forth on
Schedule 6B(3) of the IMC Agreement;
(vii) Investments in connection with the acquisition of
all or a material part of the assets or capital stock or other
equity interest of any Person provided, however, that in
connection with any such acquisition for which the aggregate
consideration payable in connection therewith is in excess of 5%
of Adjusted Tangible Net Worth (calculated as at the end of the
most recent fiscal quarter for which financial statements have
been furnished to the Significant Holders pursuant to paragraph
5A(i) or (ii)), the Guarantor shall cause to be delivered to each
holder of Notes an officer's certificate executed by the chief
financial officer or treasurer of IMC which certificate shall (a)
demonstrate that on a pro forma basis determined as if such
acquisition had been consummated on the date occurring 12 months
prior to the last day of the most recently ended fiscal quarter
for which financial statements have been furnished pursuant to
paragraph 5A(i) or (ii), IMC and its Subsidiaries would have been
in compliance with paragraph 5J(b) for the relevant period ended
on the last day of such fiscal quarter, (b)demonstrate compliance
with paragraph 5J(a) and paragraph 5J(c) after giving effect to
such acquisition, and (c) state that no Default or Event of
Default then exists or would result therefrom;
(viii) the Guarantor or any of its Subsidiaries may acquire
and hold promissory notes received in connection with any asset
sale permitted pursuant to paragraph 6B(6)(ix);
(ix) Equity Investments made after the date hereof by the
Guarantor and its Subsidiaries in any of its Subsidiaries;
(x) Investments consisting of Debt owing to the Guarantor or
any of its Subsidiaries permitted under paragraph 6B(2)(i) or
(ii)(E), (F) or (G);
(xi) Investments consisting of guaranties by the Guarantor of
Debt of its Subsidiaries to the extent permitted under paragraph
6B(2);
(xii) Investments consisting of the purchase, repurchase,
self-tender or redemption of capital stock of IMC;
(xiii) Investments in special purpose vehicles on a basis'
consistent with the securitization program for the Joint Venture
Company in effect on the date hereof in connection with
securitizations, to the extent otherwise permitted hereunder; and
(xiv) other Investments having an aggregate cost at any time
not to exceed $35,000,000.
6B(4). Sale of Stock of Subsidiaries. Sell or otherwise
dispose of any shares of Voting Stock of any Relevant Subsidiary (other
than (i)the contribution of the Voting Stock of Kalium and/or CCP to
IMC Global Potash Holdings and (ii) the sale or other disposition by
Kalium of 10 shares of Preferred Stock owned by it in KCL Holdings,
Inc.) or any warrants, rights or options to acquire such Voting Stock
or permit any Relevant Subsidiary to issue, sell or otherwise dispose
of any shares of its Voting Stock or the Voting Stock of any other
Relevant Subsidiary (other than the issuance of Preferred Stock of IMC
Global Potash Holdings in an amount not to exceed $10,000,000) or any
warrants, rights or options to acquire such Voting Stock.
6B(5). Mergers, Etc. Merge into, amalgamate or consolidate
with any Person or permit any Person to merge into it, or permit any of
its Subsidiaries to do so, or enter into any contract or arrangement
that, upon consummation, will result in any Person or two or more
Persons acquiring control over Voting Stock of the Company (or other
securities convertible into such securities) representing 35% or more
of the combined voting power of all Voting Stock of the Company, except
that (i) IMC, Bull and Vigoro may consummate the Merger, (ii) any Non-
Guarantor subsidiary may merge into, amalgamate or consolidate with any
other Non-Guarantor Subsidiary, (iii) any Subsidiary Guarantor may
merge into, amalgamate or consolidate with any other Subsidiary
Guarantor, (iv) any Subsidiary Guarantor may merge into, amalgamate or
consolidate with any Non-Guarantor Subsidiary, provided, however, that
in the case of any such merger, amalgamation or consolidation prior to
the Release Date, such Subsidiary Guarantor is the surviving
corporation and (v) after the Release Date, (x) any of IMC's wholly
owned Subsidiaries may merge into IMC and (y) any of IMC's Subsidiaries
may merge into any other of IMC's Subsidiaries; provided further that
in each case, immediately after giving effect thereto, no event shall
occur and be continuing that constitutes a Default or an Event of
Default and, in the case of any such merger to which IMC is a party,
IMC is the surviving corporation.
6B(6). Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of any assets, including, without limitation, any
manufacturing plant or substantially all assets constituting the
business of a division, branch or other unit operation, or grant any
option or other right to purchase, lease or otherwise acquire any
assets other than inventory to be sold in the ordinary course of its
business, except:
(i) sales of assets in the ordinary course of its business
(whether to a to a third party or to any other Subsidiary);
(ii) in a transaction authorized by paragraph 6B(5);
(iii) the sale of IMC's 50% interest in Chinhae Chemical
Company, Ltd., a Korean Chemical Company, for cash and for fair
value;
(iv) the limited recourse sale of accounts receivable
permitted under paragraph 6B(7);
(v) the lease (as lessee) by the Guarantor or any of
its Subsidiaries of real or personal property in the ordinary
course of business (as long as such lease does not create Debt
under Capitalized Leases not permitted under paragraph 6B(2));
(vi) prior to the Release Date, any sale of assets by
(A) any Subsidiary Guarantor to any Non-Guarantor Subsidiary, (B)
the Guarantor to any of its Subsidiaries, and (C) any Subsidiary
Guarantor to the Guarantor in an aggregate amount under this
subclause (vi) not to exceed $25,000,000, from the date hereof to
the Release Date;
(vii) after the Release Date, any sale or other disposition
of assets (A) made by the Guarantor to a Subsidiary of the
Guarantor for fair value (including by way of liquidation or
dissolution of such Subsidiary) and (B) made by a Subsidiary of
the Guarantor to any other Subsidiary of the Guarantor or to the
Guarantor;
(viii) sale, discount, or transfer of (a) delinquent accounts
receivable in the ordinary course of business for purposes of
collection or (b) receivables arising in connection with credit
card purchases sold or transferred, in each case, in the ordinary
course of business and consistent with past practices; and
(ix) other sales of assets (except as set forth below) and
for fair value in an amount not to exceed (A) an aggregate
purchase price of $50,000,000 for any consecutive twelve-month
period or (B) an aggregate of $150,000,000 from the date hereof
until all Notes are fully paid.
6B(7). Sale or Discount of Receivables. Notwithstanding any
other provision herein, sell with recourse, or discount or otherwise
sell, assign or dispose for less than the fact value thereof, any of
its notes or accounts receivable, provided that IMC and its
Subsidiaries may sell with recourse or discount or otherwise sell,
assign or dispose for less than face value thereof notes or accounts
receivable having a face value that does not exceed an aggregate
outstanding amount of $150,000,000 at any time.
6C. Business. The Guarantor covenants that it will not, and
will not permit any of its Subsidiaries to, engage (directly or
indirectly) in any business other than lines of business in which IMC
or its Subsidiaries was engaged on the date hereof and other reasonably
related business incidental to such lines of business.
6D. Charter Amendments. IMC covenants that it will not
amend, or permit any of its Subsidiaries to amend, its charter or
bylaws in any manner that could be reasonably expected to be adverse to
any holder of Notes.
6E. Accounting Changes. IMC covenants that it will not make
or permit, or permit any of its Subsidiaries to make or permit, any
change in accounting policies or reporting practices, except as
required or permitted (with the consent of the Guarantor's independent
public accountants), by U.S. or Canadian generally accepted accounting
principles or make more than two changes in its fiscal year, provided
that the Guarantor shall promptly provide written notice to the holders
of Notes of any change in its fiscal year; provided further, however,
that if any changes in U.S. GAAP or Canadian GAAP are hereafter
required or permitted and are adopted by the Guarantor or any of its
Subsidiaries and such changes result in a material change in the method
of calculation of any of the financial covenants contained in paragraph
5J or the restrictions contained in paragraph 6B or in the related
definitions or terms used in either of such Sections ("Material
Accounting Changes"), the parties hereto agree to enter into
negotiations, in good faith, in order to amend such provisions in a
credit neutral manner so as to reflect equitably such changes with the
desired result that the criteria for evaluating IMC and its
Subsidiaries, financial condition shall be the same after such changes
as if such changes had not been made; provided, however, that no
Material Accounting Change shall be given effect in such calculations
until such provisions are amended, in a manner reasonably satisfactory
to IMC and the Required Holders.
6F. Amendment, Etc. of Related Documents. The Guarantor
covenants that it will not cause the cancellation of or termination of
any Related Document or consent to or accept any cancellation or
termination thereof, amend or otherwise modify any Related Document or
give any consent, waiver or approval thereunder, waive any default
under or breach of any Related Document, agree in any manner to any
other amendment, modification or change of any term or condition of any
Related Document or take any other action in connection with any
Related Document or permit any of its Subsidiaries to do any of the
foregoing, in each case, that would materially impair or reduce the
value of the interests or materially impair the rights of the Guarantor
or any Subsidiary or that would materially impair the interests or
materially impair the rights of any holder of Notes.
6G. Partnerships. The Guarantor covenants that it will not
become a general partner in any general or limited partnership, or
permit any of its Subsidiaries to do so, other than (i) any Subsidiary
the sole assets of which consist of its interest in such partnership,
(ii) as contemplated by, and in accordance with the terms of, the
Partnership Agreement and (iii) other partnerships so long as before
and after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing.
7. [Intentionally Left Blank]
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Guarantor
represents, covenants and warrants as follows:
8A. Organization, Etc.
(a) The Guarantor (i) is a corporation duly organized,
validly existing and good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in
good standing as a foreign corporation in each other jurisdiction
in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the
failure to so qualify or be licensed could not be reasonably
likely to have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own or lease and
operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
(b) Set forth on Schedule 8A(b) of the IMC Agreement is a
complete and accurate list of all Relevant Subsidiaries as of the
Restatement Date, showing as of the Restatement Date (as to each
such Subsidiary) the jurisdiction of its incorporation, as of the
Restatement Date, the number of shares of each class of capital
stock authorized, and the number outstanding, on the Restatement
Date and the percentage of the outstanding shares of each such
class owned (directly or indirectly) by IMC and its Subsidiaries
and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at
the date hereof. All of the outstanding capital stock of all of
such Subsidiaries has been validly issued, is fully paid and non-
assessable and is owned as of the Restatement Date by the
Guarantor or one or more of its Subsidiaries free and clear of all
Liens. Each such Subsidiary (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in
good standing as a foreign or extra-provincial corporation in each
other jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed
could not be reasonably likely to have a Material Adverse Effect
and (iii) has all requisite corporate power and authority to own
or lease and operate its properties and to carry on its business
as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by the Guarantor
of this Guaranty Agreement, is within the Guarantor's corporate
powers, and has been duly authorized by all necessary corporate
action.
(d) All applicable waiting periods in connection with the
Merger and the other transactions contemplated hereby have expired
and no action has been taken by any competent authority
restraining, preventing or imposing materially adverse conditions
upon the transactions contemplated hereby.
(e) This Guaranty Agreement has been duly executed and
delivered by the Guarantor. This Guaranty Agreement is the legal,
valid and binding obligation of the Guarantor enforceable against
the Guarantor in accordance with its terms subject to the effect
of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors, rights generally.
8B. Financial Statements.
(a) The Consolidated balance sheets of IMC and its
Subsidiaries as at June 30, 1995, and the related Consolidated
statement of operations of IMC and its Subsidiaries for the fiscal
year then ended, accompanied by an opinion of IMC's independent
public accountants, and the Consolidated balance sheets of IMC and
its Subsidiaries as at September 30, 1995, and the related
Consolidated statement of operations of IMC and its Subsidiaries
for the three months then ended, duly certified by the treasurer
or chief financial officer of IMC, copies of which have been
furnished to the Purchasers, fairly present, subject, in the case
of said balance sheets as at September 30, 1995, and said
statement of operations for the three months then ended, to year-
end audit adjustments, the Consolidated financial condition of IMC
and its Subsidiaries as at such dates and the Consolidated results
of the operations of IMC and its Subsidiaries for the periods
ended on such dates, all in accordance with generally accepted
accounting principles applied on a consistent basis, and since
June 30, 1995, there has been no Material Adverse Change.
(b) The Consolidated balance sheets of Vigoro and its
Subsidiaries as at December 31, 1994, and the related Consolidated
statements of income and cash flows of Vigoro and its Subsidiaries
for the fiscal year then ended, accompanied by an opinion of
Vigoro's independent public accountants, and the Consolidated
balance sheets of Vigoro and its Subsidiaries as at December 31,
1995, and the related Consolidated statements of income and cash
flows of Vigoro and its Subsidiaries for the twelve months then
ended, duly certified by the treasurer or chief financial officer
of Vigoro, copies of which have been furnished to you, fairly
present, subject, in the case of said balance sheets as at
December 31, 1995, and said statements of income and cash flows
for the twelve months then ended, to year-end audit adjustments,
the Consolidated financial condition of Vigoro and its
Subsidiaries as at such dates and the Consolidated results of the
operations of Vigoro and its Subsidiaries for the periods ended on
such dates, all in accordance with generally accepted accounting
principles applied on a consistent basis, and since December 31,
1994, there has been no Material Adverse
Change.
(c) The unaudited Consolidated pro forma condensed
combined financial information of IMC and its Subsidiaries
consisting of the unaudited Consolidated pro forma combined
statement of operations for the one-year period ending June 30,
1995 and the unaudited pro forma condensed Consolidated pro forma
combined balance sheet at September 30, 1995, certified by the
treasurer or chief financial officer of IMC and the treasurer or
chief financial officer of Vigoro, copies of which have been
furnished to you, fairly present the Consolidated pro forma
financial condition of IMC and its Subsidiaries at September 30,
1995 and the Consolidated pro forma results of operations of IMC
and its Subsidiaries for the one-year period ended on June 30,
1995, in each case giving effect to the Merger all in accordance
with U.S. GAAP.
(d) The Consolidated forecasted balance sheets, income
statements and cash flows statements of IMC and its Subsidiaries
delivered to you in connection herewith were prepared in good
faith on the basis of the assumptions stated therein, which
assumptions were fair in the light of conditions existing at the
time of delivery of such forecasts, and represented, at the time
of delivery, IMC's and Vigoro's, as applicable, good faith
estimate of its and its applicable Subsidiaries, future financial
performance, it being understood that uncertainty is inherent in
any forecasts or projections and that no assurances can be given
by IMC or Vigoro of the future achievement of such performance.
8C. Actions Pending. Except as to environmental matters (which
are addressed solely by paragraph 8L) and litigation set forth in the
Disclosure Letter, there is no action, suit, investigation or
proceeding pending or, to the actual knowledge of the Responsible
Officers of IMC, threatened against the Guarantor or any Subsidiary or
any properties or rights of the Guarantor or any Subsidiary, by or
before any court, arbitrator or administrative or governmental body
which could be reasonably expected to have a Material Adverse Effect,
and there has been no material change in the status, or financial
effect on IMC or any Subsidiary, of the litigation and environmental
matters referenced in the Disclosure Letter from that described therein
that could reasonably be expected to have a Material Adverse Effect.
With respect to the litigation set forth in the Disclosure Letter, to
the actual knowledge of the Responsible Officers of IMC, there have
been no actions taken by IMC or any of its Subsidiaries that are the
subject of such litigation that could be reasonably expected to have a
material adverse effect on the ability of IMC and its Subsidiaries to
perform and comply with all their respective obligations under this
Guaranty Agreement and the other Transaction Documents.
8D. Outstanding Indebtedness. Neither the Guarantor nor any
Subsidiary has any Debt outstanding except as permitted by paragraph
6B(2). There exists no default under the provisions of any instrument
evidencing such Debt or of any agreement relating thereto.
8E. Title to Properties. IMC has, and each Subsidiary has, good
and indefeasible title to its respective real properties(other than
properties which it leases)and good title to all of its other
properties and assets, including the properties and assets reflected in
the most recent audited balance sheet of IMC referred to in paragraph
8B (other than properties and assets disposed of in the ordinary course
of business), subject to no Lien of any kind except Liens permitted by
paragraph 6B(l). IMC and each Subsidiary enjoys peaceful an undisturbed
possession of all leases necessary in any material respect for the
conduct of their respective businesses, none of which contains any
unusual or burdensome provisions which could be reasonably expected to
materially affect or impair the operation of such businesses. All such
leases are valid and subsisting and are in full force and effect.
8F. Taxes. IMC has, and each Subsidiary has, filed all federal,
state, provincial, local and foreign income and other material tax
returns which are required to be filed, and each has paid all income
and other material taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have become
due, except for such taxes for which valid extensions have been filed
and not denied and for such other taxes as are being contested in good
faith by appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting
principles, unless and until any Lien resulting therefrom attaches
which is not a Lien permitted under paragraph 6(B)(1).
8G. Conflicting Agreements and Other Matters. As of the
Restatement Date, neither the Guarantor nor any of its Subsidiaries is
a party to any contract or agreement or subject to any charter or other
corporate restriction which materially and adversely affects its
business, property or assets, or financial condition. Neither the
execution nor delivery of this Guaranty Agreement or any other
Transaction Document, nor the offering, issuance and sale of the Notes,
nor fulfillment of nor compliance with the terms and provisions hereof
and thereof will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result
in any violation of, or result in the creation of any Lien upon any of
the properties or assets of the Guarantor or any of its Subsidiaries
pursuant to, the charter or by-laws of the Guarantor or any of its
Subsidiaries, any award of any arbitrator or any agreement (including
any agreement with stockholders) , instrument, order, judgment, decree,
statute, law, rule or regulation to which IMC or any of its
Subsidiaries is subject.
8H. [INTENTIONALLY OMITTED.]
8I. Regulation G, Etc. The proceeds of sale of the Vigoro Notes
were used primarily to refinance certain existing Debt of Vigoro and
for its working capital purposes. None of such proceeds were used,
directly or indirectly, for the purpose whether immediate, incidental
or ultimate, of purchasing or carrying any margin stock or for the
purpose of maintaining, reducing or retiring any Debt which was
originally incurred to purchase or carry any stock that is currently a
margin stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of Regulation G.
Neither the Guarantor nor any of its Subsidiaries is engaged
principally, or as one of their important activities, in the business
of extending credit for the purpose of purchasing or carrying margin
stock, and less than twenty-five percent (25%) of the assets of the
Guarantor and its Subsidiaries subject to any arrangement (as such term
is used in Section 207.2(f) of Regulation G) hereunder consists of
margin stock. Neither the Guarantor nor any agent acting on its behalf
has taken or will take any action which might cause this Guaranty
Agreement to violate Regulation G, Regulation T or any other regulation
of the Board of Governors of the Federal Reserve System or to violate
the Securities Exchange Act of 1934, as amended, in each case as in
effect now or as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not
waived, exists with respect to any Plan (other than a Multiemployer
Plan). No liability to the Pension Benefit Guaranty Corporation has
been or is expected by IMC or any ERISA Affiliate to be incurred with
respect to any Plan (other than a Multiemployer Plan) by IMC, any
Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the performance, business, assets, operations, properties,
condition (financial or otherwise) or prospects of IMC and its
Subsidiaries taken as a whole. Neither IMC, any Subsidiary or any
ERISA Affiliate has incurred or presently expects to incur any
withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan which is or would be materially adverse to IMC and
its Subsidiaries taken as a whole.
8K. Governmental Consent. Neither the nature of the Guarantor or
of any Subsidiary, nor any of their respective businesses or
properties, nor any relationship between the Guarantor or any
Subsidiary and any other Person, is such as to require any
authorization, consent, approval, exemption or other action by or
notice to or filing with any court or administrative or governmental
body (other than routine filings after the date of closing with the
Securities and Exchange Commission and/or state Blue Sky authorities)
in connection with the execution and delivery of this Guaranty
Agreement, or the fulfillment of or compliance with the terms and
provisions of this Guaranty Agreement.
8L. Environmental Compliance. To the best knowledge of the
Responsible Officers of IMC and except as disclosed in the Disclosure
Letter, IMC and its Subsidiaries and all of their respective properties
and facilities have complied at all times and in all respects with all
applicable Environmental Laws except, in any such case, where failure
to comply either individually or in the aggregate could not reasonably
be expected to have a material adverse effect on the ability of the
Guarantor and its Subsidiaries to perform and comply with all of their
respective obligations under this Guaranty Agreement. Notwithstanding
any other provision contained in paragraph 8, the provisions of this
paragraph 8L shall be the only representations and warranties
applicable to compliance with Environmental Laws
8M. Disclosure. Other than projections and forecasts as to which
no representation under this paragraph 8M is made, neither this
Guaranty Agreement nor any other document, certificate or statement
furnished to any holder of any Note by or on behalf of the Guarantor in
connection herewith (taken as a whole) contains any untrue statement of
a material fact or omits to state a material fact necessary in order to
make the statements contained herein and therein not misleading at the
time and in light of the circumstances under which such information was
provided. There is no fact peculiar to the Guarantor or any of its
Subsidiaries which materially adversely affects or in the future may
(so far as the Guarantor can now reasonably foresee) materially
adversely affect the business, property or assets, or financial
condition of the Guarantor and its Subsidiaries taken as a whole and
which has not been set forth in this Guaranty Agreement or in the other
documents, certificates and statements furnished to the Purchasers by
the Guarantor prior to the date hereof in connection with the
transactions contemplated hereby.
9. DEFINITIONS. For the purpose of this Guaranty Agreement, the
following terms shall have the meanings specified with respect thereto
below:
9A. [Intentionally Left Blank]
9B. DEFINED TERMS.
"Adjusted Tangible Net Worth" shall mean, at any time of
determination, an amount equal to the amount by which (a) Consolidated
total shareholders' equity (excluding the aggregate liquidation
preference of the Vigoro Series E Preferred Stock) in IMC and its
Subsidiaries exceeds (b) Consolidated total intangible assets of IMC
and its Subsidiaries; provided, however, that in calculating Adjusted
Tangible Net Worth, the one time and ongoing impact of the change in
the functional currency of any foreign Subsidiary for purposes of the
consolidation of their accounts with those of IMC and its other
Subsidiaries in the financial statements of IMC recorded as the foreign
currency translation adjustment in the equity accounts of the
Consolidated financial statements of IMC shall be excluded.
"Agreement Accounting Principles" shall mean U.S. GAAP or Canadian
GAAP, as the case may be, as applied in the preparation of the
financial statements referred to in paragraph 8B, applied in all
material respects on a consistent basis, together with any changes in
U.S. GAAP or Canadian GAAP, as the case may be, after the date hereof
or any inconsistent applications by IMC or any of its Subsidiaries
arising as a result of the Merger, in each case, which are not Material
Accounting Changes, to the extent permitted under paragraph 6E. In the
event an amendment is entered into pursuant to paragraph 6E, all
references in this Guaranty Agreement to Agreement Accounting
Principles, U.S. GAAP or Canadian GAAP shall mean U.S. GAAP or Canadian
GAAP, as applicable, as in effect from time to time after the date of
such amendment, applied in all material respects thereafter on a
consistent basis taking into account such amendment, together with any
changes in U.S. GAAP or Canadian GAAP, as applicable, or any
inconsistent applications by IMC or any of its Subsidiaries arising as
a result of the Merger after the date of such amendment in each case
which are not Material Accounting Changes, to the extent permitted
under paragraph 6E.
"Bankruptcy Code" shall mean Title 11 of the United States Code
(11 U.S.C. 101 et. seq.) , as amended from time to time, or any
successor statute.
"Bankruptcy Law" shall have the meaning specified in clause (viii)
of paragraph 7A of the IMC Agreement.
"Borrower" shall mean Global Operations, KCL Holdings, Inc. and
IMC Global Potash Holdings.
"Canadian GAAP" shall mean, at any time, accounting principles
generally accepted in Canada as recommended in the Handbook of the
Canadian Institute of Chartered Accountants, applied, except as
otherwise provided in paragraph 6E, on a consistent basis.
"Canpotex" shall mean Canpotex Limited, a corporation organized
under the federal laws of Canada.
"Canpotax Debt" shall mean all Debt of IMC Canada and Kalium or
any other Subsidiary of IMC arising out of or related to their
membership in Canpotex, including all Debt under (i) the Ground Lease
and the Facilities Lease with the Port of Portland and related
documents in connection with the issuance by the Port of Portland of
$48,000,000 in aggregate principal amount of its Special Obligation
Revenue Bonds, Series 1996 (Portland Bulk Terminals, L.L.C. Project and
(ii) the Loan Agreement with London Life Insurance Company and the
corresponding Neptune Port Expansion Loan Agreement with Neptune Bulk
Terminal (Canada) LTD and related documents in the aggregate principal
amount of Canadian $30,000,000.
"Capitalization" shall mean the sum of (a) Adjusted Tangible Net
Worth plus (b) Consolidated Funded Debt.
"Capitalized Leases" has the meaning specified in clause
(e) of the definition of Debt.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the
United States, or Canada or any province thereof, or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States, or Canada or any province thereof, is pledged in support
thereof) having maturities of not more than six months from the date of
acquisition, (ii) time deposits and certificates of deposit of any
commercial bank incorporated in the United States or Canada of
recognized standing having capital and surplus in excess of
$250,000,000 having, or which is the principal banking subsidiary of a
bank holding company having, a long-term unsecured debt rating of at
least "A" or the equivalent thereof from S&P or "A-2" or the equivalent
thereof from Moody's or at least A or the equivalent thereof by
Canadian Bond Rating Service Limited or at least A Middle or the
equivalent thereof by Dominion Bond Rating Service Limited with
maturities of not more than six months from the date of acquisition by
such Person, (iii) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause
(i) above entered into with any bank meeting the qualifications
specified in clause (ii) above, (iv) commercial paper issued by any
Person incorporated in the United States, or Canada or any province
thereof, rated at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by Moody's or at least A-l or the
equivalent thereof by Canadian Bond Rating Service Limited or at least
R-1 (Middle or High) or the equivalent thereof by Dominion Bond Rating
Service Limited and in each case maturing not more than six months
after the date of acquisition by such Person, (v) investments in money
market funds substantially all of whose assets are comprised of
securities of the types described in clauses (i) through (iv) above and
(vi) investments in funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through
(v) above in an aggregate principal amount not to exceed $5,000,000 at
any one time outstanding without regard to the credit rating
qualifications set forth in any of such clauses.
"CCP" shall mean Central Canada Potash, Inc., a Delaware
corporation.
"Chemical Supplier Debt" shall mean indebtedness incurred in the
ordinary course of business owing by IMC or any of its Subsidiaries to
chemical suppliers, which indebtedness represents a financing of the
purchase price of such goods.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Consolidated" refers to the consolidation of accounts in
accordance with Agreement Accounting Principles.
"Consolidated Funded Debt" as of any date means the aggregate
amount of the Consolidated Funded Debt of IMC and its Consolidated
Subsidiaries outstanding on that date (but excluding, to the extent
otherwise included therein, Excluded Debt).
"Current Interest" has the meaning specified in Section 4.01 of
the Partnership Agreement.
"Debt" of any Person shall mean, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all payment
obligations of such Person for the deferred purchase price of property
or services (other than trade payables and other accrued expenses not
overdue by more than 180 days incurred in the ordinary course of such
Person's business and other than Obligations of such Person arising in
connection with take-or-pay contracts not overdue by more than 180 days
with suppliers of ammonia, phosphate, natural gas or other fertilizer,
or for transport of such products to meet its normal raw material
supply requirements in the ordinary course of business) such as take-or-
pay and similar obligations, (c) all obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments, (d)
all Obligations of such Person created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Obligations
of such Person as lessee under leases that have been or should be, in
accordance with Agreement Accounting Principles, recorded as capital
leases ("Capitalized Leases"), (f) all Obligations, contingent or
otherwise, of such Person under acceptance, letter of credit or similar
facilities, (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any capital
stock of or other ownership or profit interest in such Person or any of
its Affiliates or any warrants, rights or options to acquire such
capital stock, valued, in the case of Redeemable Preferred Stock, at
the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends, (h) all Obligations of such Person for
production payments from property operated by or on behalf of such
Person and other similar arrangements with respect to natural
resources, (i) all Obligations of such Person in respect of Hedge
Agreements, (j) all Debt of others referred to in clauses (a) through
(i) above guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Debt or to advance or
supply funds for the payment or purchase of such Debt, (ii) to
purchase, sell or lease (as lessee or lessor) property, or to purchase
or sell services, primarily for the purpose of enabling the debtor to
make payment of such Debt or to assure the holder of such Debt against
loss, (iii) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss, and (k)
all Debt referred to in clauses (a) through (j) above secured by (or
for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of
such Debt. For purposes only of paragraph 6B(2), the term Debt shall
include obligations incurred in connection with the limited recourse
sale of accounts receivable. For all other purposes, including,
without limitation, for purposes of the financial covenants in
paragraph 5J, Debt shall not be interpreted to include any such
obligations incurred in connection with the sales of receivables
permitted under paragraph 6B(7).
"Disclosure Letter" shall mean that certain letter dated February
28, 1996 from IMC to the Purchasers in which disclosures of certain
litigation and environmental matters regarding IMC and its
Subsidiaries, certain insurance matters and certain joint venture
accounting matters are set forth.
"EBITDA" shall mean, for any period, net income (or net loss)
(calculated prior to giving effect to any dividends on the Vigoro
Series E Preferred Stock) plus the sum of (a) interest expense, (b)
income tax expense, (c) the "JV Consolidation Adjustment" (calculated
on substantially the same basis as set forth in the Disclosure Letter,
(d) depreciation, amortization and depletion expense (including,
without limitation, depreciation, amortization and depletion expense
relating to oil and gas-producing properties but excluding
depreciation, amortization and depletion expense included in the "JV
Consolidation Adjustment" referred to in clause (c) above), (e) any non-
cash foreign exchange losses, (f) extraordinary losses (other than
extraordinary losses realized in cash from the utilization of net
operating loss carry forwards) and (g) any income, loss or expense of
the Joint Venture Company attributable to Freeport (calculated based on
the Current Interest then held by it in the Joint Venture Company), in
each case determined in accordance with Agreement Accounting Principles
for such period minus (i) any non-cash foreign exchange gains and (ii)
extraordinary gains (other than extraordinary gains realized in cash
from the utilization of net operating loss carry forwards).
"Environmental Laws" has the meaning specified in paragraph 5F.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member of
the same controlled group of corporations as IMC within the meaning of
section 414(b) of the Code, or any trade or business which is under
common control with IMC within the meaning of section 414(c) of the
Code.
"Event of Default" shall mean any of the events specified in
paragraph 7A of the IMC Agreement, provided that there has been
satisfied any requirement in connection with such event for the giving
of notice, or the lapse of time, or the happening of any further
condition, event or act, and "Default" shall mean any of such events,
whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Debt" means Chemical Supplier Debt, Debt consisting of
obligations in respect of Hedge Agreements and contingent obligations
in respect of Membership Debt.
"Freeport" shall mean Freeport-McMoRan Resource Partners, Limited
Partnership, a Delaware limited partnership.
"Funded Debt" shall mean, with respect to any Person, all Debt of
such Person which by its terms or by the terms of any instrument or
agreement relating thereto matures, or which is otherwise payable or
unpaid, more than one year from, or is directly or indirectly renewable
or extendible at the option of the debtor to a date more than one year
(including an option of the debtor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a
period of more than one year) from, the date of the creation thereof
(except Debt in respect of Hedge Agreements) and shall include, without
limitation, the current portion of Funded Debt.
"Guarantor" shall mean each of IMC and Vigoro, jointly and
severally; provided, however, that on and after the Change Date,
Guarantor shall mean only IMC.
"Global Operations" shall mean IMC Global Operations Inc.
"Global Operations Credit Agreement" means the Amended and
Restated Credit Agreement dated as of July 31, 1995, as amended, among
Global Operations, as borrower, IMC, as guarantor, the banks parties
thereto, Citibank, as administrative agent, co-agent and swing line
bank and NationsBank and Cooperative Centrale Raiffeissen-
Boerenleenbank B.A., as co-agents.
"Hedge Agreements" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, foreign exchange
contracts, currency swap agreements, currency future or option
contracts, commodity contracts (including, without limitation, options,
forwards, futures and similar agreements) and other similar agreements.
"IMC Agreement" shall mean that Secured Amended and Restated Note
Purchase Agreement dated February 28, 1996 between IMC and Prudential
as amended, restated, extended, renewed, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
"INC Canada" shall mean International Minerals & Chemical (Canada)
Global Limited, a corporation organized under the federal laws of
Canada.
"IMC Global Potash Holdings" shall mean IMC Global Potash Holdings
Inc., a Delaware corporation.
"IMC Partner" shall mean IMC-Agrico GP Company, a Delaware
corporation, or any successor corporation otherwise permitted
hereunder.
"Institutional Investor" shall mean Prudential, any Prudential
Affiliate or any bank, bank affiliate, financial institution, insurance
company, pension fund, endowment or other organization which regularly
acquires debt instruments for investment.
"Investment" in any Person shall mean any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities of such
Person, any capital contribution to such Person or any other investment
in such Person, including, without limitation, any arrangement pursuant
to which the investor incurs Debt of the types referred to in clauses
(i) and (j) of the definition of "Debt" in respect of such Person.
"Joint Venture Company" shall mean IMC-Agrico Company, a
Delaware general partnership established pursuant to the terms of the
Partnership Agreement.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind
(including any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement
under the Uniform Commercial Code of any jurisdiction) or any other
type of preferential arrangement for the purpose, or having the effect,
of protecting a creditor against loss or securing the payment or
performance of an obligation.
"Managing Partner" shall mean IMC-Agrico MP, Inc., a Delaware
corporation.
"Margin Stock" shall have the meaning specified in Regulation G.
"Material Accounting Changes" has the meaning specified in
paragraph 6E.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of IMC and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a)
the business, condition (financial or otherwise), operations,
performance, properties or prospects of IMC and its Subsidiaries taken
as a whole, (b) the rights and remedies of any holder of any Note under
any Transaction Document or (c) the ability of IMC or any Subsidiary to
perform its Obligations under any Transaction Document or Related
Document to which it is or is to be a party.
"Membership Debt" shall mean, with respect to IMC or any of its
Subsidiaries, (a) Canpotex Debt and (b) all Debt arising out of or
related to its membership in SKMG, PhosChem or Phosrock.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"New Credit Agreement" shall mean that certain Credit
Agreement dated as of February 28, 1996 among IMC, Kalium, certain
other Subsidiaries, certain financial institutions, Citibank, N.A., as
U.S. administrative agent, Citibank Canada, as Canadian administrative
agent, and certain other parties, as amended, restated, extended,
renewed, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Non-Guarantor Subsidiary" means any Subsidiary of IMC other than
a Subsidiary Guarantor.
"Notes" shall have the meaning specified in the Note Agreement.
"Obligation" shall mean any obligation of any kind, including,
without limitation, any liability on any claim, whether or not the
right of any creditor to payment in respect of such claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected
by any proceeding under any Bankruptcy Law.
"Officer's Certificate" shall mean a certificate signed in the
name of IMC by an Responsible Officer of IMC.
"Partnership Agreement" shall mean the Amended and Restated
Partnership Agreement dated as of July 1, 1993 (as further amended and
restated as of May 26, 1995, as further amended as of January 25, 1996)
among IMC Partner, Agrico, Limited Partnership, the Managing Partner
and Global Operations, together with all schedules and exhibits
thereto, as amended, supplemented or otherwise modified from time to
time in accordance with its terms to the extent permitted in accordance
with the IMC Agreement.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced or as to which such enforcement, collection,
execution, levy or foreclosure proceeding is being contested in good
faith in a proper proceeding, and is not reasonably likely to have a
Material Adverse Effect: (a) liens imposed by law, such as suppliers',
vendors', carriers', landlords', warehousemen's, workmen's,
materialmen's and mechanics' liens and other similar liens arising in
the ordinary course of business which secure obligations other than for
money borrowed and that are not more than 60 days past due or which are
being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on the Guarantor's books;
(b) easements, building restrictions, zoning restrictions,
reservations, exceptions, encroachments, rights of way, covenants
running with the land, encumbrances or charges against real property as
are of a nature generally existing with respect to properties of a
similar character and which do not materially affect the marketability
of such real property or interfere in any material respect with the
ordinary conduct of the Guarantor or its Subsidiaries; (c) liens
securing the performance of any contract or undertaking made in the
ordinary course of business (as such business is currently conducted)
other than for the borrowing of money; (d) deposits or pledges under
worker's compensation, unemployment insurance, social security and
other similar laws, or to secure the performance of bids, tenders or
contracts (other than for the repayment of borrowed money) or to secure
indemnity, performance or other similar bonds for the performance of
bids, tenders or contracts (other than for the repayment of borrowed
money) or to secure statutory obligations or surety or appeal bonds, or
to secure indemnity, performance or other similar bonds in the ordinary
course of business; (e) liens which arise by operation of law under
Article 4 of the Uniform Commercial Code in favor of a collecting bank;
and (f) liens with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been established.
"Person" shall mean an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"PhosChem" shall mean The Phosphate Chemicals Export Association.
"Phosrock" shall mean The Phosphate Rock Export Association.
"Plan" shall mean any "employee pension benefit plan" (as such
term is defined in section 3 of ERISA) which is or has been established
or maintained, or to which contributions are or have been made, by IMC
or any ERISA Affiliate.
"Preferred Stock" shall mean, with respect to any corporation,
capital stock issued by such corporation that is entitled to a
preference or priority over any other capital stock issued by such
corporation upon any distribution of such corporation's assets, whether
by dividend or upon liquidation.
"Purchaser" shall mean any Note holder identified on the Purchaser
Schedule of the Note Agreement.
"Redeemable" shall mean, with respect to any capital stock, Debt
or other right or Obligation, any such right or obligation that(a) the
issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer
or (b) is redeemable at the option of the holder.
"Regulation G" shall mean Regulation G of the Board of Governors
of the Federal Reserve System.
"Related Documents" shall mean the Merger Agreement and the
Partnership Agreement.
"Release Date" shall mean the date on which IMC shall have
received a rating of BBB- or above from S&P or Baa3 or above from
Xxxxx'x on any class of IMC's non-credit enhanced long-term senior
unsecured Debt, provided that no Default or Event of Default shall have
occurred and shall be continuing on such date.
"Relevant Subsidiary" shall mean, at any time, a Subsidiary
of IMC having (a) at least 5% of the total Consolidated assets of IMC
and its Subsidiaries (determined as of the last day of the most recent
fiscal quarter of such Person) or (b) at least 5% of the Consolidated
EBITDA of IMC and its Subsidiaries for the four consecutive fiscal
quarters most recently ended, in each case as shown in a certificate of
the treasurer or chief financial officer of IMC.
"Required Holder(s)" shall mean, at any time, the holder or
holders of at least 51% of the aggregate principal amount of the Notes
outstanding at such time.
"Responsible Officer" shall mean the chief executive officer,
chief operating officer, chief financial officer, treasurer, or chief
accounting officer of IMC or any other officer of IMC involved
principally in its financial administration or its controllership
function.
"Restatement Date" shall mean March 1, 1996, or such other date as
the parties hereto may agree in writing.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Significant Holder" shall mean (i) Prudential or any Prudential
Affiliate, so long as Prudential or any Prudential Affiliate shall hold
any Note or (ii) any other holder of at least 10% of the aggregate
principal amount of any Series of Notes from time to time outstanding.
To the extent that any notice or document is required to be delivered
to the Significant Holders under this Guaranty Agreement, such
requirement shall be satisfied with respect to Prudential and all
Prudential Affiliates by giving notice, or delivery of a copy of any
such document, to Prudential (addressed to Prudential and each such
Prudential Affiliate).
"SKMG" shall mean The Sulphate of Potash Magnesia Export
Association.
"Subordinated Intercompany Notes" shall mean (i) the Substitute
Subordinated Intercompany Promissory Note dated March 1, 1996 in the
principal amount of $215,000,000 issued by Global Operations to the
Company, (ii) the Substitute Subordinated Intercompany Promissory Note
dated March 1, 1996 in the principal amount of $260,000,000 issued by
Global Operations to the Company, and (iii) the Substitute Subordinated
Intercompany Note dated March 1, 1996 in the principal amount of
$160,000,000 issued by Global Operations to the Company.
"Subsidiary" of any Person shall mean any corporation,
partnership, joint venture, limited liability company, trust or estate
of which (or in which) more than 50% of (a) the issued and outstanding
capital stock having ordinary voting power to elect a majority of the
Board of Directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such
limited liability company, partnership or joint venture or (c) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one
or more of its other Subsidiaries or by one or more of such Person's
other Subsidiaries; provided that in any event, (i) the Joint Venture
Company shall be deemed to be a Subsidiary of Global Operations and IMC
and (ii) the term "Subsidiary" shall be determined after giving effect
to the Merger. Unless otherwise expressly provided, all references
herein to "Subsidiary" shall mean a Subsidiary of IMC.
"Subsidiary Guarantors" means the Subsidiaries listed on Schedule
8A(b) to the IMC Agreement hereto and any other Relevant Subsidiaries
(other than IMC Canada, IMC Global Potash Holdings and the Joint
Venture Company) that shall be required to execute and deliver a
guaranty or otherwise become a guarantor hereunder pursuant to
paragraph 5J.
"Subsidiary Guaranty" shall mean that certain Amended and Restated
Affiliate Guaranty dated as of the date hereof made by the Subsidiary
Guarantors in favor of Prudential and certain other Persons
substantially in the form of Exhibit G attached to the IMC Agreement,
as amended, restated, extended, renewed, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
"U.S. GAAP" shall mean, at any time, accounting principles
generally accepted in the United States of America as recommended by
the Financial Accounting Standards Board, applied, except as otherwise
provided in paragraph 6E on a consistent basis.
"Vigoro Credit Agreement" means the Amended and Restated Credit
Agreement dated as of December 22, 1994 by and among Vigoro, Kalium,
CCP, the banks parties thereto, Bankers Trust Company, as
Administrative Agent and Xxxxxx Trust and Savings Bank, as Paying
Agent.
"Vigoro Series E Preferred Stock" shall mean the shares of
preferred stock of Vigoro, par value $100 per share, designated Series
E.
"Voting Stock" shall mean capital stock issued by a corporation,
or equivalent interests in any other Person, the
holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors(or
persons performing similar functions) of such Person, even if the right
so to vote has been suspended by the happening of such a contingency.
10. MISCELLANEOUS.
10A. CONSENT TO AMENDMENTS. This Guaranty Agreement may be
amended, and the Guarantor may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, if the
Guarantor shall obtain the written consent to such amendment, action or
omission to act, of the Required Holder(s) of the Notes.
10B. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT. All representations and warranties contained herein or made
in writing by or on behalf of the Guarantor in connection herewith
shall survive the execution and delivery of this Guaranty Agreement,
the transfer by any Purchaser of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied upon by
any Transferee, regardless of any investigation made at any time by or
on behalf of any Purchaser or any Transferee. Subject to the preceding
sentence, this Guaranty Agreement embodies the entire agreement and
understanding between the Guarantor and the Purchasers with respect to
the subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter.
10C. SUCCESSORS AND ASSIGNS. All covenants and other agreements
in this Guaranty Agreement shall bind and inure to the benefit of the
respective successors and assigns of the Purchasers whether so
expressed or not.
10D. NOTICES. All written communications provided for hereunder
shall be deemed to have been duly given if sent by first class mail,
nationwide overnight delivery service (with charges prepaid) or
personal delivery and (i) if to any Purchaser, addressed to such
Purchaser at the address specified for such communications pursuant to
the Note Agreement or at such other address as any Purchaser shall have
specified in writing to the Guarantor, and (ii) if to any other holder
of any Note, addressed to such other holder at such address as such
other holder shall have specified in writing to the Guarantor or, if
any such other holder shall not have so specified an address to the
Guarantor, then addressed to such other holder in care of the last
holder of such Note which shall have so specified an address to the
Guarantor, (iii) if to IMC, addressed to it at IMC Global Inc., 0000
Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Treasurer, or at
such other address as IMC shall have specified to the holder of each
Note in writing, and (iv) if to Vigoro, addressed to it at The Vigoro
Corporation, c/o IMC Global Inc., 0000 Xxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: Treasurer, or at such other address as
Vigoro shall have specified to the holder of each Note in writing.
10E. DISCLOSURE TO OTHER PERSONS. By its acceptance of any Note,
each Purchaser agrees to use its best efforts to hold in confidence and
not disclose any written information (other than information (a) which
was publicly known or otherwise known to such Person, at the time of
disclosure (except pursuant to disclosure in connection with this
Guaranty Agreement), (b) which subsequently becomes publicly known
through no act or omission by such Person, or (c) which otherwise
becomes known to such Person, other than through disclosure by the
Guarantor) delivered or made available by or on behalf of the Guarantor
or any Subsidiary to such Person (including, without limitation, any
non-public information obtained pursuant to paragraph 5A or 5B) in
connection with or pursuant to this Guaranty Agreement which is
proprietary in nature; provided, however, that nothing herein shall
prevent the holder of any Note from disclosing any information
disclosed to such holder to (i) its directors, officers, employees,
agents and professional consultants, (ii) any Institutional Investor
which holds any Note, (iii) any Institutional Investor to which it
offers to sell any Note or any part thereof, (iv) any Institutional
Investor to which it sells or offers to sell a participation in all or
any part of any Note, (v) any Institutional Investor from which it
offers to purchase any security of the Guarantor, (vi) any federal or
state regulatory authority having jurisdiction over it, (vii) the
National Association of Insurance Commissioners or any similar
organization, or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (1) in compliance with any
law, rule, regulation or order applicable to it, (2) in response to any
subpoena or other legal process or informal investigative demand, (3)
in connection with any litigation to which it is a party or (4) in
order to protect its investment and enforce the rights of any holder in
any Note; provided, further, that -in regard to any such disclosure to
a Person described in clause (ii), (iii), (iv) or (v), such Person
agrees in writing to be bound by the provisions of this paragraph.
10F. SEVERABILITY. Any provision of this Guaranty Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
10G. DESCRIPTIVE HEADINGS. The descriptive headings of the
several paragraphs of this Guaranty Agreement are inserted for
convenience only and do not constitute a part of this Guaranty
Agreement.
1OH. SATISFACTION REQUIREMENTS. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of
this Guaranty Agreement required to be satisfactory to any Purchaser,
to any holder of Notes or to the Required Holder(s), the determination
of such satisfaction shall be made by such Purchaser, such holder or
the Required Holder(s), as the case may be, in the sole and exclusive
judgment (exercised in good faith) of the Person or Persons making such
determination.
10I. GOVERNING LAW. THIS GUARANTY AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE
GOVERNED BY, THE LAW OF THE STATE OF ILLINOIS.
10J. COUNTERPARTS. This Guaranty Agreement may be executed in
any number of counterparts, each of which shall be an original, but all
of which together shall constitute one instrument.
10K. TERM OF GUARANTY AGREEMENT. The Guaranty Agreement and all
guarantees, covenants and agreements of the Guarantor contained herein
shall continue in full force and effect and shall not be discharged
until such time as all of the Guaranteed obligations shall be paid or
otherwise discharged in full, subject in the case of Vigoro to the
terms of paragraph 1B above.
10L. FURTHER ASSURANCES. The Guarantor hereby agrees to execute
and deliver all such instruments and take all such action as the
holders of the Notes may from time to time reasonably request in order
to effectuate fully the purposes of this Guaranty Agreement.
* * * * *
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty
Agreement to be duly executed and delivered as of the date and year
first above written.
IMC GLOBAL INC.
By:
Title:
THE VIGORO CORPORATION
By:
Title:
Agreed and accepted:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By:
Vice President
