Exhibit 10.10
IMC/FSC AGREEMENT
Dated as of March 29, 2002
by and among
IMC Global Inc.
IMC Phosphates Company
Phosphate Resource Partners Limited Partnership
IMC Phosphates MP, Inc.
Freeport-McMoRan Sulphur LLC
McMoRan Oil & Gas LLC
and
McMoRan Exploration Co.
IMC/FSC AGREEMENT
THIS IMC/FSC AGREEMENT (the "Agreement"), dated as of March
29, 2002, is by and among IMC Global Inc., a Delaware corporation
("IMC"), Phosphate Resource Partners Limited Partnership, a
Delaware limited partnership ("PLP"), IMC Phosphates MP, Inc., a
Delaware corporation ("MP"), IMC Phosphates Company (formerly IMC-
Agrico Company), a Delaware partnership ("Phosphates" and,
together with IMC, PLP, and MP, the "IMC Parties"), Freeport-
McMoRan Sulphur LLC, a Delaware limited liability company
("FSC"), McMoRan Oil & Gas LLC, a Delaware limited liability
company ("MOXY"), and McMoRan Exploration Co., a Delaware
corporation and sole member of each of FSC and MOXY ("MMR" and,
together with FSC and MOXY, the "Freeport Parties"). Unless
otherwise defined herein, capitalized terms in this Agreement
shall have the meanings ascribed to them in the Purchase
Agreement (as defined below). As used in this Agreement, the
term "party" collectively refers to the IMC Parties, on the one
hand, or the Freeport Parties, on the other hand, as the context
suggests.
W I T N E S S E T H:
WHEREAS, FSC desires to sell certain assets and contractual
rights and transfer certain rights related to its sulphur
terminaling, handling, transporting and storage operations (the
"Business");
WHEREAS, IMC and Savage Industries Inc. ("Savage") will be
owners of a joint venture entity, Gulf Sulphur Services Ltd.,
LLP, a Texas limited liability partnership ("Buyer"), which
proposes to acquire from FSC certain assets of, and assume
certain liabilities relating to, the Business;
WHEREAS, on the date hereof, FSC, MMR, MOXY and Buyer have
entered into a Purchase and Sale Agreement (the "Purchase
Agreement") for the purpose of attaining the mutual goals
expressed above;
WHEREAS, in connection with the foregoing transactions, the
IMC Parties desire to (1) terminate the Agreement for Sulphur
Supply dated as of July 1, 1993 between FSC (as assignee of
Freeport-McMoRan Resource Partners, Limited Partnership and IMC
Fertilizer Inc.) and Phosphates (the "Sulphur Supply Agreement");
(2) settle certain litigation presently pending in the 19th
Judicial District Court for the Parish of East Baton Rouge, State
of Louisiana, bearing the caption "Freeport-McMoRan Sulphur LLC
v. IMC-Agrico Company," Docket No. 462776 (the Honorable Judge
Xxxxxxxx presiding), and before the First Circuit Court of Appeal
for the State of Louisiana, bearing the caption "Freeport-McMoRan
Sulphur, LLC, Petitioner-Appellee v. IMC Agrico Company,
Defendant-Appellant," Docket No. 2002-CA-0322 (collectively, the
"Litigation"); and (3) establish direct contractual relationships
with sulphur producers for the sulphur that FSC has historically
supplied; and
WHEREAS, in connection with the foregoing transactions, the
Freeport Parties desire to (1) terminate the Sulphur Supply
Agreement with Phosphates, (2) settle the Litigation, (3) exit
its sulphur business, and (4) guarantee the payment and
performance of certain Freeport Parties;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements herein contained, the
parties agree as follows:
1. Conveyances, Assignments, Assumptions and Payments. Upon
the terms and subject to the conditions set forth in this
Agreement, at the Closing:
1.1 Purchase and Sale of Sulphur Inventories. FSC shall convey,
assign, transfer and deliver to Phosphates, and Phosphates shall
acquire and accept from FSC and submit payment for, free and
clear of all Liens, with title and risk of loss to pass to
Phosphates at the Closing, except that title and risk of loss for
Sulphur Inventories in transit shall remain with FSC until
delivered into the terminal, all commercially usable liquid
sulphur inventories meeting the specifications set forth on
Exhibit A owned by FSC, other than certain sulphur in transit
that will become the property of Exxon Mobil on delivery, based
on a physical inventory verifiable by Phosphates (the "Sulphur
Inventories"), with title and risk of loss to pass to Phosphates
at the Closing, except that title and risk of loss for Sulphur
Inventories in transit shall remain with FSC until delivered into
the terminal, on the pricing terms described on Exhibit B (the
aggregate of the amounts to be paid by Phosphates for the Sulphur
Inventories as determined pursuant to this Section 1.1 and
Exhibit B, the "Sulphur Purchase Price"). Phosphates shall not
be required to take delivery of, or pay for, any of the Sulphur
Inventories that do not meet the specifications set forth in
Exhibit A.
1.2 Assumption and Assignment of Sulphur Supply and Sulphur
Sales Agreements. FSC shall assign, and Phosphates or its
Affiliate shall assume, FSC's rights and obligations under the
sulphur supply and sulphur sales agreements set forth on Exhibit
C, in respect only of rights and obligations arising under such
agreements on and after the Closing Date and subject to receipt
of any required consents as noted on Exhibit C (the "Assigned
Contracts").
1.3 SubleaseRailcar Equipment Rental Contract. FSC shall
subleaseenter into an equipment rental contract with IMC or its
Affiliates in respect of the railcars described on Exhibit D, as
may be updated by the parties prior to Closing, on the terms and
conditions described on Exhibit G.
1.4 Books and Records Related to Assigned Contracts. FSC shall
convey to IMC or its designated Affiliate all of FSC's books and
records (including records in computer format and all indicies)
located at 0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx and at
FSC's Port Sulphur Terminal or elsewhere (to the extent any
exist), to the extent related to the Assigned Contracts (the
"Sulphur Books and Records"). FSC may, at its own expense,
returnmake copies of any such books and records conveyed to IMC
or its designated Affiliate. IMC acknowledges that it may not be
possible to segregate certain records from MMR's and FSC's
records but that copies of the information set forth in such
records will be providedor made available to IMC at IMC's request
at no cost or expense to IMC.
1.5 Assumption of Specified Liabilities and Obligations.
(a) Except as provided in the next sentence, the Freeport
Parties will, effective as of Closing with no further act or deed
required, assume and shall indemnifyjointly and severally
indemnify, protect, defend and hold harmless the IMC Parties with
respect to the IMC Parties' share of all: (1) obligations for
the plugging, abandonment, dismantling, or reclamation of oil and
gas xxxxx and related or associated properties used in or
associated with the FTX Oil and Gas Business (as defined below);
(2) liabilities for matters arising under Environmental Laws and
related to or associated with the FTX Oil and Gas Business; (3)
non-environmental liabilities or obligations arising out of
operation of the FTX Oil and Gas Business, including but not
limited to liability for royalty payments or other compensation
to interest holders; and (4) all claims which exist or may arise
relating to the Main Pass Mine in the Gulf of Mexico
(collectively, the "Assumed Liabilities"). The Freeport Parties
shall provide the IMC Parties with such specific documents of
assumption in connection with the assumption of the Assumed
Liabilities as the IMC Parties may reasonably require. The
assumption in this Section 1.5 shall exclude: (i) any obligations
and liabilities related to the items listed on Exhibit E as may
be updated as agreed between the parties prior to Closing, (ii)
any matter related to the Freeport-McMoRan Royalty Trust or the
properties affected thereby, (iii) any matter relating to any
claim asserted in writing against IMC after the date of the
FTX/IMC Merger (as defined below) and prior to the Closing Date
involvingfor monetary damages of more than $5,000 which at the
time of assertion should have been recorded as a liability of IMC
under generally accepted accounting principles, and (iv) any
matters arising from remediation activities conducted under
Environmental Laws applicable to the FTX Oil and Gas Business by
or on behalf of IMC after the FTX/IMC Merger and prior to the
Closing Date. "FTX Oil and Gas Business" shall mean those
activities related to the exploration for, and extraction and
processing of, oil and natural gas that were conducted by
Freeport-McMoRan Inc. or oneany of its predecessors or affiliated
entities prior to 1997, including, without limitation to the
foregoing, the Exploration Program referred to in the
1997;settlement agreement dated as of November 9, 1999 by and
among IMC, MOXY and others (the "MOXY Drilling Program"); and
liabilities and obligations which were transferred to IMC in the
December 1997 merger between Freeport-McMoRan Inc. and IMC (the
"FTX/IMC Merger").
(a) In connection with the above described assumption and
indemnity obligations, IMC will quitclaim to MMR or its designee
any rights (other than in respect of the items listed on Exhibit
E) IMC has associated with all oil and gas leases, royalties, and
mineral interests acquired in the FTX/IMC Merger, including the
provision to MMR or its designee of specific quitclaim deeds as
may be requested in the future by MMR; IMC will also convey to
MMR or its designee all rights (other than in respect of the
items listed on Exhibit E) against third parties related to any
oil and gas interests assigned and any rights (other than in
respect of the items listed on Exhibit E) against third parties
related to any matter as to whichMMR, MOXY or FSC assumesthe
Freeport Parties assume IMC's obligations; and IMC will also
assign to MMR or its designee its rights related to
indemnification agreements, insurance coverage, other cost
sharing agreements, surety bonds, deposits, permits, approvals
for all oil and gas properties for which MMR has assumed the
liabilities pursuant to this Section 1.5.
(b) Freeport Parties Assumption. Each of the Freeport Parties
shall jointly and severally assume each of the obligations of FSC
under this Agreement as if such obligation were the direct
obligation of that Freeport Party. 1.5 other than in respect of
the items listed on Exhibit E.
2. IMC Payment. At the Closing, IMC will pay to FSC the sum of
$6,000,000 (six million dollars); provided that such amount shall
be reduced by $1,000,000 (one million dollars) if IMC does not
receive the Charitable Research & Engineering Releases (as
defined in Section 6) prior to or at the Closing (the "IMC
Payment").
3. Closing.
3.1 Closing. The closing of the transactions contemplated
hereby (the "Closing") shall be interdependent and simultaneous
with, and conditioned upon, the consummation of the Asset Sale
under the Purchase Agreement and shall take place at the offices
of Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P.
in New Orleans, Louisiana commencing at 10:00 a.m. local time on
May 31, 2002 (or on such earlier date as the parties may agree)
(the "Closing Date"), provided that all of the conditions set
forth in Section 7 have been satisfied or waived by the party
entitled to grant such waiver.
3.2 Closing Statement.
(a) Not less than two days nor more than seven days prior to the
Closing Date, FSC and IMC shall jointly compute and agree upon an
estimated allocation of the cash disbursements and receipts
between the parties and prepare a written report of this
computation (the "Closing Statement"). The Closing Statement
shall be subject to further adjustment and final determination on
the basis of the Subsequent Closing Adjustment as set forth in
Section 3.3 below.
(b) The Closing Statement shall include estimates of the
following items as of the Closing Date:
(i) The Sulphur Purchase Price to be paid to FSC pursuant to
Section 1.1 based on the Sulphur Inventories Statement (as
defined below), except for Sulphur Inventories to which title
does not pass to Phosphates on Closing.
(ii) The IMC Payment.
(iii) Amounts owed to FSC based on an accrual basis of
accounting (accrued through the Closing Date) FSC under the
Sulphur Supply Agreement calculated in accordance with Section
6.5 hereof and for the transportation of sulphur.
(iv) Amounts owed to IMC with respect to reimbursement for
retiree medical benefits as referenced in Section 9.1.
(c) Not less than three days nor more than seven days prior to
the Closing Date, FSC and IMC shall jointly prepare and agree
upon an inventory of the amount and location(s) of the projected
Sulphur Inventories as of the Closing Date (the "Sulphur
Inventories Statement"), and FSC shall allow IMC, its Affiliates
and agents all access and resources required by IMC to verify the
information contained in the Sulphur Inventories Statement.
(d) Not less than three days nor more than seven days prior to
the Closing Date, FSC shall supply IMC with a schedule of the
trade and other creditors with respect to the Assigned Contracts
that FSC proposes to pay from the monies due from IMC at the
Closing, including the amount owing to each creditor based on the
accrual basis of accounting (the "Closing Creditor List"). FSC
IMC shall provide for payment to such creditors at the Closing
and the amount of such payments shall be deducted from the
payment to be made by the IMC Parties to FSC on Closing. IMC
shall provide evidence of payment to FSC.
(e) For the avoidance of doubt, all payments made by the IMC
Parties into a segregated interest bearing account in respect of
the Sulphur Supply Agreement are for the account of the IMC
Parties only and shall not be taken into consideration in the
computation of the Closing Statement.
3.3 Subsequent Closing Adjustment.
(a) Promptly upon consummation of the Closing, the parties shall
undertake an analysis of the Closing Adjustment to determine its
accuracy and, within 20 days after the Closing Date, attempt to
agree on a written statement setting forth any changes in the
Closing Statement (the "Subsequent Closing Adjustment"). The IMC
Parties and the Freeport Parties shall afford one another and
their respective representatives reasonable access to the
necessary books, records and personnel for the purpose of
determining the Subsequent Closing Adjustment. If the parties
are unable to agree on the Subsequent Closing Adjustment, either
party may submit any objections that are not resolved between the
IMC Parties and the Freeport Parties to an Independent Auditor.
Such Independent Auditor shall make its own independent
determination regarding such objections within 30 days of the
date the objections are first submitted for arbitration, and such
determination shall be final, non-appealable and binding upon the
parties. The fees of the Independent Auditor shall be divided
equally between FSC and IMC.
(b) To the extent that the Subsequent Closing Adjustment shows
that either party owes additional amounts, the owing party shall
pay such amounts to the other party by wire transfer to an
account designated in writing by the other party within 10 days
after resolution of the Subsequent Closing Adjustment.
3.4 Deliveries at Closing. At the Closing:
(a) The Freeport Parties shall deliver, or cause to be delivered
to the IMC Parties (including constructive receipt of identified
books and records), the following:
(i) such bills of sale, assignments, releases, consents to
assignments and other instruments of sale, conveyance,
assignment, assumption and transfer satisfactory in form and
substance to IMC and FSC as may reasonably be required in order
to convey to IMC all of FSC's right, title and interest in and to
the Sulphur Inventories and the Assigned Contracts or otherwise
to effect any transaction contemplated hereby;
(ii) a release from FM Services Companythe FM Services Release
and the FCX Representation (as such terms are defined in Section
6.7) in form and substance reasonably satisfactory to IMC;
(iii) the Charitable Research and Engineering Releases which
have been obtained by the Closing Date in form and substance
reasonably satisfactory to IMC;
(iv) the Sulphur Books and Records;
(v) opinions of counsel for the Freeport Parties opining as to
corporate or company status, due authorization, validity and
binding effect of the Agreement and the related documents to be
delivered by the Freeport Parties and such other matters as the
IMC Parties may reasonably request;
(vi) consents from the senior lenders and, if required, other
major creditors of the Freeport Parties;
(vii) an updated Closing Creditor List;
(viii) evidence in a form satisfactory to the IMC Parties from
each trade creditor of FSC applicable to the Sulphur Inventories
or the Assigned Contracts owed in excess of $100,000 of payment
in full of amounts outstanding from FSC to such creditor; and
(ix) such other documents and instruments as shall be reasonably
necessary to effect the transactions contemplated hereby.
(b) The IMC Parties shall deliver, or cause to be delivered to
the Freeport Parties (including constructive delivery of
identified books and records), the following:
(i) payment of the amounts due to FSC as set forth in the
Closing Statement, less all amounts to be paid direct by the IMC
Parties to creditors of FSC, by wire transfer of immediately
available funds to an account designated in writing by FSC not
less than one (1) Business Day prior to the Closing;
(ii) documents necessary to transfer the Assumed Liabilities to
FSC;
(iii) opinions of counsel for the IMC Parties opining as to
corporate or partnership status, due authorization, validity and
binding effect of the agreement and the related documents to be
delivered by the IMC Parties and such other matters as the
Freeport Parties may reasonably request; and
(iv) such other documents and instruments as shall be reasonably
necessary to effect the transactions contemplated hereby.
(c) The IMC Parties andParties and the Freeport Parties will
execute a Compromise and Settlement Agreementsubstantially in the
form of Exhibit F;
(d) FSC and IMC will execute the railcar subleasesequipment
rental agreement as contemplated in Section 1.3;
(e) The IMC Parties and the Freeport Parties shall each provide
to the other, or procure the provision to the other of, such
proof of satisfaction of the conditions set forth in Section 6 as
the party whose obligations are conditioned upon such
satisfaction may reasonably request; and
(f) The IMC Parties and the Freeport Parties shall each provide
to the other the certificates, agreements and documents required
by this Agreement and take such other action as is required to
consummate the transactions contemplated hereby.
4. Representations and Warranties of the Freeport Parties. The
Freeport Parties jointly and severally represent and warrant to
the IMC Parties, on and as of the date of this Agreement and on
and as of the Closing Date, as follows:
4.1 Organization.
(a) FSC is a limited liability company duly organized, validly
existing and in good standing under the laws of the state of
Delaware and has the full power and authority to enter into this
Agreement and to perform its obligations hereunder, including,
without limitation, its indemnification obligations pursuant to
Section 8 hereof. FSC has full power and authority to own its
properties and assets and to carry on its business as it is now
being conducted. FSC is duly qualified or licensed to do
business as a foreign limited liability company in good standing
in the jurisdictions in which the ownership of its property or
the conduct of its business requires such qualification.
(b) MMR is a corporation duly incorporated, validly existing and
in good standing under the laws of the state of Delaware and has
the full power and authority to enter into this Agreement and to
perform its obligations hereunder, including, without limitation,
its indemnification obligations pursuant to Section 8 hereof.
MMR has full power and authority to own its properties and assets
and to carry on its business as it is now being conducted. MMR
is duly qualified or licensed to do business as a foreign
corporation in good standing in the jurisdictions in which the
ownership of its property or the conduct of its business requires
such qualification.
(c) MOXY is a limited liability company duly organized, validly
existing and in good standing under the laws of the state of
Delaware and has the full power and authority to enter into this
Agreement and to perform its obligations hereunder, including,
without limitation, its indemnification obligations pursuant to
Section 8 hereof. MOXY has full power and authority to own its
properties and assets and to carry on its business as it is now
being conducted. MOXY is duly qualified or licensed to do
business as a foreign limited liability company in good standing
in the jurisdictions in which the ownership of its property or
the conduct of its business requires such qualification.
4.2 Authorization; Enforceability. The board of directors of
MMR, the sole member of each of FSC and MOXY, and in its own
capacity, has duly approved and authorized the execution and
delivery of this Agreement and all other documents and
instruments to be executed by MMR, FSC, and/or MOXY pursuant to
this Agreement (collectively, the "Freeport Ancillary Documents")
and the consummation of the transactions contemplated hereby, and
no other authorization proceedings on the part of MMR, FSC or
MOXY is necessary to approve and authorize the execution and
delivery of this Agreement or any of the Freeport Ancillary
Documents by any of the Freeport Parties, or the consummation of
the transactions contemplated hereby. This Agreement
constitutes, and each of the Freeport Ancillary Documents will
constitute as of its date, a legal, valid and binding obligation
of each Freeport Party executing such document, enforceable
against it in accordance with its respective terms, except that
the enforcement hereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally,
and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
4.3 No Approvals or Conflicts. Neither the execution, delivery
or performance by any Freeport Party of this Agreement, any of
the Freeport Ancillary Documents, nor the consummation by any
Freeport Party of the transactions contemplated hereby or thereby
will (a) violate, conflict with or result in the breach of any
provision of its certificate of incorporation or formation, as
applicable, or limited liability company agreement or by-laws,
(b) violate, conflict with or result in a breach of any provision
of, or constitute a default under, or result in the termination
or cancellation of, or accelerate the performance required by, or
result in the creation of any Lien upon the Sulphur Inventories
or Assigned Contracts under any note, bond, mortgage, indenture,
license, lease, contract, agreement or other instrument or
commitment or obligation to which any Freeport Party or any of
its properties may be bound or affected, (c) violate any order,
writ, injunction, decree, judgment, ruling, law, rule or
regulation of any court or governmental authority, domestic or
foreign, applicable to any Freeport Party or the Sulphur
Inventories or Assigned Contracts, or (d) other than as noted on
Exhibit C, require any consent, approval or authorization of, or
notice to, or declaration, filing or registration with, any
governmental or regulatory authority or any Person having a
contractual relationship with any Freeport Party other than those
that will not result or could not reasonably be expected to
adversely affect any Freeport Party's ability to transfer the
Sulphur Inventories or Assigned Contracts to IMC or any Freeport
Party's ability to assume the liabilities referenced in Section
1.5 from IMC.
4.4 Assets. As of the Closing, FSC will have good and
marketable title to, and the power to sell or assign, the Sulphur
Inventories free and clear of any Liens. No unreleased mortgage,
trust deed, chattel mortgage, security agreement, financing
statement or other instrument encumbering any of the Sulphur
Inventories has been recorded, filed, executed or delivered. The
Sulphur Inventories shall be of commercially usable quality and
in liquid form and shall comply with the specifications set out
on Exhibit A.
4.5 Assigned Contracts. Each Assigned Contract is, and after
the assignment thereof will be, in full force and effect, and the
Freeport Parties have performed all obligations required to be
performed by them to date thereunder. Except as noted on Exhibit
C, there is no impediment to the assignment by FSC of its rights
and obligations under the Assigned Contracts. [The Freeport
Parties have identified to the IMC Parties all of the
undischarged agreements that the Freeport Parties are party to,
bound by, or the issuer or beneficiary or recipient of, relating
to the purchase and sale of sulphur.] All monetary amounts that
have become due and owing under the Assigned Contracts have been
paid. No material default by any Freeport Party has occurred and
no Freeport Party knows of, and has not received notice of
violation or default under (nor does there exist any condition
that with the passage of time or the giving of notice would cause
such a violation of or default thereunder) any Assigned Contract.
True and correct copies of all Assigned Contracts have been
furnished by the Freeport Parties to IMC.
4.6 Compliance with Laws. Each Freeport Party is in compliance
with, and is not in default or violation under, and has not
conducted its operations in violation in any respect of, any law,
rule, regulation, decree or order applicable to the Sulphur
Inventories or the Assigned Contracts. At no time has any
Freeport Party been notified in writing that it was, and to the
Knowledge of such Freeport Party it is not presently, the subject
of any federal, state or local investigation relating to the
Sulphur Inventories or the Assigned Contracts. At no time has
any Freeport Party been notified in writing by any federal, state
or local governmental authority of any violation of any law,
regulation, ordinance, rule or order (including those described
in other subsections of this Section 4) regarding the Sulphur
Inventories or the Assigned Contracts that remains unresolved.
4.7 Proceedings. There is no action, suit or proceeding at law
or in equity, any arbitration or any administrative or other
proceeding by or before any governmental instrumentality or
agency, pending or, to the knowledge of any Freeport Party,
threatened against or affecting any Freeport Party that could
affect the ability of any Freeport Party to consummate the
transactions contemplated hereby.
4.8 Fair Value. The Freeport Parties agree that the
consideration being given by IMC for the Sulphur Inventories and
Assigned Contracts hereunder is reasonably equivalent to the fair
value thereof. The Freeport Parties hereby waive and release the
IMC Parties and their respective past and present officers,
partners, agents, attorneys, successors and assigns from any and
all claims that the transactions contemplated hereby are
avoidable as fraudulent transfers under state or federal law.
5. Representations and Warranties of the IMC Parties. The IMC
Parties jointly and severally represent and warrant to the
Freeport Parties, on and as of the date of this Agreement and on
and as of the Closing Date, as follows:
5.1 Organization. IMC is duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and
has the full power and authority to enter into this Agreement and
to perform its obligations hereunder. MP is duly incorporated,
validly existing and in good standing under the laws of the State
of Delaware and has the full power and authority to enter into
this Agreement and to perform its obligations hereunder.
Phosphates is duly formed and validly existing under the laws of
the State of Delaware and its general partner has the full power
and authority to enter into this Agreement and to perform its
obligations hereunder. PLP is duly formed, validly existing and
in good standing under the laws of the State of Delaware and has
the full power and authority to enter into this Agreement and to
perform its obligations hereunder.
5.2 Authorization; Enforceability. The boards of directors of
IMC and MP, the managing general partner of Phosphates and the
general partner of PLP have each duly approved and authorized the
execution and delivery of this Agreement and the other documents
and instruments to be executed by IMC, MP, PLP and Phosphates
pursuant to this Agreement (collectively, "IMC's Ancillary
Documents"), and the consummation by IMC, MP, PLP and Phosphates
of the transactions contemplated hereby, and no other proceedings
on the part of IMC, MP, PLP or Phosphates is necessary to approve
and authorize the execution and delivery of this Agreement or any
of IMC's Ancillary Documents by IMC, MP, PLP and Phosphates and
the consummation by IMC, MP, PLP and Phosphates of the
transactions contemplated hereby. This Agreement constitutes,
and each of IMC's Ancillary Documents will constitute as of its
date, a legal, valid and binding obligation of IMC, MP, PLP and
Phosphates, enforceable against IMC, MP, PLP and Phosphates in
accordance with its terms, except that the enforcement hereof may
be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
5.3 No Approvals or Conflicts. Neither the execution and
delivery by any IMC Party of this Agreement or any of IMC Party's
Ancillary Documents, nor the consummation by any IMC Party of the
purchase of the Sulphur Inventories and Assigned Contracts, will
(a) violate, conflict with or result in the breach of any
provision of its certificate of incorporation or bylaws
(b) violate, conflict with or result in a breach of any provision
of, or constitute a default under, or result in the termination
or cancellation of, or accelerate the performance required by, or
result in the creation of any Lien upon any of the properties of
any IMC Party under, any note, bond, mortgage, indenture,
license, lease, contract, agreement or other instrument or
commitment or obligation to which any IMC Party or any of its
properties may be bound or affected, (c) violate any order, writ,
injunction, decree, judgment, ruling, law, rule or regulation of
any court or governmental authority, domestic or foreign,
applicable to any IMC Party or its properties, or (d) except as
otherwise indicated in Exhibit C, require any consent, approval
or authorization of, or notice to, or declaration, filing or
registration with, any governmental or regulatory authority in
connection with the execution, delivery and performance of this
Agreement by IMC other than those that are not likely to
materially or adversely affect FSC's ability to transfer the
Sulphur Inventories and Assigned Contracts to IMC or the Freeport
Parties' ability to assume the Assumed Liabilities.
5.4 Proceedings. There is no action, suit or proceeding at law
or in equity, any arbitration or any administrative or other
proceeding by or before any governmental instrumentality or
agency, pending or, to the knowledge of IMC, threatened against
or affecting any IMC Party that could affect the ability of an
IMC Party to consummate the transactions contemplated hereby.
5.5 Oil and Gas Liabilities.
(a) To the best of the actual knowledge, without further
investigation, of Xxxxxxx Xxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxxxxx,
there are no unasserted claims related to the FTX Oil and Gas
Business from the date of the FTX/IMC Merger through the date
hereof, other than any matters listed on Exhibit E, that are
probable of assertion and are involvelikely to result in an
expenditure of more than $100,000 of liability under generally
accepted accounting principles.
(b) The total amounts expended by IMC and its Affiliates with
respect to liabilities, demands, claims, causes of action and
proceedings related to the FTX Oil and Gas Business (excluding
the MOXY Drilling Program) from January 1, 2000 through December
31, 2001, was approximately $950,000, during the period from
January 1, 2002 through February 28, 2002 was approximately
$________,less than $100,000, and during the period prior to
January 1, 2000 was less than $500,000.
6. Pre-Closing Covenants. From the date hereof through the
Closing Date, the parties covenant and agree as follows:
6.1 Time of Essence; Cooperation and Best Efforts.
(a) Time is of the essence and each party will work diligently
to complete the transactions contemplated by this Agreement as
soon as possible.
(b) Each party will cooperate with the other and use its
commercially reasonable efforts to take all action and to do all
things necessary to (i) procure all necessary and appropriate
consents and approvals, (ii) complete and file all necessary and
appropriate applications, notifications, filings and
certifications and (iii) satisfy all requirements prescribed by
law for the consummation of the transactions contemplated by this
Agreement, and satisfy all other conditions set forth in this
Agreement for the consummation of the transactions contemplated
by this Agreement, but the parties shall not be required to
undertake any financial obligation not contemplated herein or in
the agreements executed as of the date hereof.
6.2 Settlement Negotiations; Confidentiality. This Agreement
and the negotiations related thereto are deemed to be evidence of
settlement negotiations. Neither the IMC Parties nor the
Freeport Parties may use or present as evidence in any pending
litigation or related arbitration or mediation the contents of
this Agreement or the substance of negotiations related hereto,
except to enforce this Agreement. The parties agree that each
may disclose the existence of this Agreement, but may not
disclose its terms, except as necessary to secure financing for
the transactions contemplated herein and for the Asset Sale to
the Buyer (provided that in each case disclosure shall be made
only under the terms of an agreement to keep such disclosure
confidential), or as required by law, judicial process, or to any
employee, financial advisor or legal advisor who it is determined
in good faith has a valid business reason to know the terms.
6.3 Due Diligence. Prior to the Closing Date, the Freeport
Parties and IMC Parties will each (a) make available to the other
party and their representatives, for inspection and review, all
properties, books, computer and information systems, records,
accounts, documents and other information related to the Sulphur
Inventories, Assigned Contracts and Assumed Liabilities as may be
reasonably requested from time to time in connection with the
transactions contemplated hereby; (b) make its officers and
accountants available for consultation with the other party upon
the reasonable request of such party; and (c) permit access to
third parties to verify information obtained pursuant to this
Section 6.3 as the same may be reasonably requested. In
connection with any requests for information and access pursuant
to this Section 6.3, the Freeport Parties and IMC Parties will
each provide reasonable notice to the other party and endeavor to
minimize the disruption of its business. An employee or
representative of any of the parties shall be entitled to be
present at any or all inspections and reviews of the Sulphur
Inventories, Assigned Contracts and Assumed Liabilities and
related books, records, accounts, documents and other
information.
6.4 Availability of Employees. FSC, to the extent requested by
IMC, will make any of FSC's employees available, prior to
Closing, for interviews with IMC for potential employment with
IMC or one of its Affiliates at or following the Closing. Upon
request, FSC will provide to IMC or one of its Affiliates the
relevant terms of such employee's employment with FSC (including,
but not limited to dates of hire, positions, compensation,
benefit arrangements and vacation). Neither IMC nor its
Affiliates have or will have any duty or obligation to offer
employment to or employ any of FSC's employees at or following
the Closing, and FSC shall not make any representations or
statements to its employees to the contrary.
6.5 Performance under the Sulphur Supply Agreement. The
execution and delivery of this Agreement shall not be deemed to
constitute an amendment or other modification ofparties will
continue to perform the Sulphur Supply Agreement or a waiver by
any party thereto of any claims or rights thereunder. The
parties acknowledge that the parties thereto shall
continuethrough the date of Closing on the following terms: (i)
FSC will deliver all of Phosphates' tonnage requirements due
pursuant to the terms of the Agreement except for 41,667 tons per
month, the delivery of which is in dispute; (ii) except for the
41,667 tons per month the delivery of which is in dispute, FSC's
delivery obligation shall be interpreted consistently with the
practices of the parties in nominating and fulfilling Phosphates'
tonnage requirements prior to January 1, 2002; (iii) Phosphates
will pay FSC sums due pursuant to the pricing terms of the
Sulphur Supply Agreement, except for the disputed costs and
losses related to the aforementioned 41,667 tons per month and
except for any premium that would otherwise be due on "Base"
sulphur pursuant to the terms of the Sulphur Supply Agreement;
(iv) the calculation of the IMC Weighted Average Cost of sulphur
and the IMC Spot Weighted Average Cost of sulphur will be
performed consistently with the calculations performed by IMC
through the date of this Agreement. The execution and delivery
of this Agreement shall not be deemed to constitute an amendment
or other modification of the Sulphur Supply Agreement.
6.6 Stay and Stand Down. Upon the execution of this Agreement,
and for so long as the parties comply with the terms hereof, each
party will continue to "stand down" with respect to active
litigation against the other and the parties will jointly request
that the Litigation be continued until the earlier of the
termination of the Purchase Agreement or the Closing of the Asset
Sale and the transactions contemplated hereby.
6.7 Release of Termination Agreement Xxxxxxxxxxx.XX Services
Release and FCX Representation. The Freeport Parties will obtain
from FM Services Company thea release of the IMC Parties from any
and all liabilities and obligations ofthat the IMC Parties may
have to such Persons (the "FM Services Release"), under that
certain Termination and Settlement Agreement dated December 22,
1997(the "FM Services Release"), including the obligations
related to services provided by FM Services Company, the
leaseexpenses for 0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx,
and the Washington D.C. lease and claims relating to Crescent
Technology Inc. The Freeport Parties will obtain from Freeport-
McMoran Copper & Gold Inc. ("FCX") a representation (the "FCX
Representation") that FCX has no claims against, and is not owed
any obligation or liability by, any IMC Party.
6.8 Release of Charitable/Research & Engineering Contribution
Obligations. The Freeport Parties will use commercially
reasonable efforts, but without any requirement for the payment
of funds by the Freeport Parties,, but without any requirement
for the payment of funds by the Freeport Parties, to obtain from
Tulane University, the Audubon Institute and the University of
New Orleans, the release of any liability relating to charitable
obligations assumed by IMC as part of the 1997 Merger Agreement
between Freeport-McMoRan Inc. and IMC Global, Inc. (the
"Charitable/Research & Engineering Releases").Releases"), and, in
the case of the Audubon Institute, the voluntary dismissal with
prejudice of all litigation relating to such charitable
obligations with each party bearing its own costs.
6.9 Representations and Warranties. Each party shall provide
prompt notice to the other of any fact or event that causes or
would cause any of its representations and warranties to be
untrue in any material respect.
6.10 Assigned Contracts. The Freeport Parties shall perform
their obligations under the Assigned Contracts in the usual and
ordinary course and in accordance with past practices and the
terms of such contracts.
7. Conditions to Closing
7.1 Conditions Applicable to All Parties. The obligations of
each of the parties hereto to consummate the transactions
contemplated hereby are subject to the satisfaction (or the
waiver by the IMC Parties and the FSC Parties) of the following
conditions at or prior to the Closing:
(a) Asset Sale Closing. The consummation of the Asset Sale
under the Purchase Agreement.
(b) Restraining Action. No judgment, order or decree shall have
been issued or rendered by any court or other governmental body
to restrain or prohibit the consummation of the transactions
contemplated hereby.
(c) Statutory Requirements and Regulatory Approval. All
statutory requirements for the valid consummation of the
transactions contemplated hereby shall have been fulfilled and
all appropriate orders, consents and approvals from all
regulatory agencies and other governmental authorities whose
order, consent or approval is required by law for the
consummation of the transactions contemplated hereby shall have
been received.]
(d) [Release and Representation. The Freeport Parties shall
have provided the FM Services Release.]Services Release and the
FCX Representation.
7.2 Conditions to Obligations of IMC Parties. The obligation of
the IMC Parties to consummate the transactions contemplated
hereby is subject to the satisfaction, at or prior to the
Closing, of the condition set forth below. The benefit of this
condition is for IMC Parties only and may be waived in writing by
IMC Parties at any time in its sole discretion.
(a) Representations, Warranties and Covenants. Each
representation and warranty of the Freeport Parties contained in
Section 4 shall be true and correct in all material respects on
and as of the Closing Date; the Freeport Parties shall have
performed in all material respects all covenants required by this
Agreement to be performed by the Freeport Parties at or prior to
the Closing; and the Freeport Parties shall have delivered to the
IMC Parties on the Closing Date certificates signed by
appropriate officers, dated as of the Closing Date, certifying to
the fulfillment of the conditions set forth in this paragraph.
7.3 Condition to the Obligations of Freeport Parties. The
obligation of the Freeport Parties to consummate the transactions
contemplated hereby is subject to the satisfaction, at or prior
to the Closing, of the condition set forth below. The benefit of
this condition is for the Freeport Parties only and may be waived
by Freeport Parties in writing at any time in its sole
discretion.
(a) Representations, Warranties and Covenants. The
representations and warranties of the IMC Parties contained in
Section 5 shall be true and correct in all material respects on
and as of the Closing Date; the IMC Parties shall have performed
in all material respects all covenants required by this Agreement
to be performed by the IMC Parties at or prior to the Closing;
and the IMC Parties shall have delivered to the Freeport Parties
on the Closing Date certificates signed by appropriate officers,
dated as of the Closing Date, certifying to the fulfillment of
the conditions set forth in this paragraph.
8. Indemnification; Survival of Representations.
8.1 Indemnification.
(a) From and after the Closing Date, subject to the terms and
conditions of this Section 8, the Freeport Parties shall jointly
and severally indemnify, defend and hold harmless each of the IMC
Parties and their Affiliates, and their respective officers,
directors and employees (the "IMC Indemnitees") from, and will
pay to the IMC Indemnitees the amount of, any Losses arising from
or arising out of or by virtue of or in connection with:
(i) any inaccuracy in, or breach of any representation or
warranty of, the Freeport Parties contained in Section 4;
(ii) any breach by any of the Freeport Parties of, or failure by
any of the Freeport Parties to comply with, any agreement or
covenant contained herein (including, without limitation,
obligations under this Section 8), the Purchase Agreement or in
any agreement ancillary thereto;
(iii) any breach by FM Services of the FM Services Release;
(iv) any liability under an Assigned Contract that relates to a
period prior to the Closing Date;
(v) the Assumed Liabilities; or
(vi) any claim that exists or may arise related to Main Pass Mine
in the Gulf of Mexico howsoever arising.arising; or
(vii) any obligations or liabilities of FSC except as
expressly assumed by the IMC Parties pursuant to this Agreement;
and
(b) After the Closing Date, subject to the terms and conditions
of this Section 8, the IMC Parties shall jointly and severally
indemnify and hold harmless each of the Freeport Parties and its
Affiliates and their respective officers and directors (the
"Freeport Indemnitees") from, and will pay to the Freeport
Indemnitees the amount of, any Losses arising from or in
connection with:
(i) any inaccuracy in or breach of any representation or
warranty of the IMC Parties contained in Section 5;
(ii) any breach by any of the IMC Parties of, or failure by any
of the IMC Parties to comply with, any agreement or covenant
contained herein (including, without limitation, obligations
under this Section 8);
(iii) [(iii) any claim relating to or arising from the
items listed on Exhibit E; or
(iv) any obligations or liabilities of IMC except as expressly
assumed by the Freeport Parties pursuant to this Agreement. ]
8.2 Notice and Defense of Claims.
(a) A Person seeking indemnification under this Section 8 (the
"Indemnified Person") shall give prompt written Notice to the
indemnifying person or persons, or successors thereto (the
"Indemnifying Person"), of any matter with respect to which the
Indemnified Person seeks to be indemnified (the "Indemnity
Claim"). Such Notice shall state the nature of the Indemnity
Claim and, if known, the amount of the Loss. If the Indemnity
Claim arises from a claim of a third party, the Indemnified
Person shall give such Notice within a reasonable time but in no
event later than thirty (30) days from receipt by the Indemnified
Person of Notice of any Indemnity Claim and, in the event that a
suit or other proceeding is commenced, within thirty (30) days
after receipt of written Notice thereof by the Indemnified
Person. Notwithstanding anything in this paragraph to the
contrary, the failure of an Indemnified Person to give timely
Notice of an Indemnity Claim shall not bar such Indemnity Claim
except and to the extent that such failure has impaired
materially the ability of the Indemnifying Person to defend the
Indemnity Claim.
(b) If the Indemnity Claim arises from the claim or demand of a
third party, the Indemnifying Person shall assume its defense,
including the hiring of counsel which counsel shall be reasonably
acceptable to the Indemnified Person, and the payment of all fees
and expenses. The Indemnified Person shall have the right to
employ separate counsel and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at
the expense of the Indemnified Person unless both the Indemnified
Person and the Indemnifying Person are named as parties and the
Indemnified Person shall in good faith determine that
representation by the same counsel is inappropriate. In the
event that the Indemnifying Person, within thirty (30) days after
Notice of any such action or claim, fails to assume the defense
thereof, the Indemnified Person shall have the right to undertake
the defense, compromise or settlement of such action, claim or
proceeding for the account of the Indemnifying Person, subject to
the right of the Indemnifying Person upon the payment of all
fees, expenses, costs and settlement payments incurred to date by
the Indemnified Person, to assume the defense of such action,
claim or proceeding at any time prior to the settlement,
compromise or final determination thereof. Anything in this
Section 8 to the contrary notwithstanding, the Indemnifying
Person shall not, without the Indemnified Person's prior consent,
settle or compromise any action or claim or consent to the entry
of any judgment with respect to any action, claim or proceeding
for anything other than money damages paid by the Indemnifying
Person. The Indemnifying Person may, without the Indemnified
Person's prior consent, settle or compromise any such action,
claim or proceeding or consent to entry of any judgment with
respect to any such action or claim that requires solely the
payment of money damages by the Indemnifying Person and that
includes as an unconditional term thereof the release by the
claimant or the plaintiff of the Indemnified Person from all
liability in respect of such action, claim or proceeding;
provided, however, that the consent of the Indemnified Person,
which consent shall not be unreasonably withheld, shall always be
required with respect to the settlement or compromise of any
action related to Taxes. The Indemnified Person shall not settle
or compromise any such action or claim without the consent of the
Indemnifying Person, to the extent the Indemnifying Person has
accepted responsibility for indemnification obligations in
writing; provided that the Indemnified Person shall give the
Indemnifying Person prior notice of any proposed compromise and
settlement.
(c) Any Indemnity Claim hereunder which does not arise from a
claim of a third party shall be paid on demand by the
Indemnifying Person to the Indemnified Party on receipt of
evidence reasonably satisfactory to such Indemnifying Person of
the existence and amount of such Indemnity Claim.
(d) If, after 60 days written notice specifying the action
requested, any Person fails to take any action reasonably
requested in respect of which another Person may make an
Indemnity Claim under this Section 8 against such first-mentioned
Person, that other Person may take the action that is specified
in such notice and shall be entitled to be indemnified under this
Section 8 by the first Person in respect of any costs of, or
costs associated with, such action.
8.3 Survival of Representations and Warranties; Covenants. The
representations and warranties made by any party herein shall
survive until March 31, 2004. The covenants contained in this
Agreement shall continue to exist without limitation.
9. Other Post-Closing Covenants.
9.1 Release of Benefit Payment Obligations. From and after the
Closing, the IMC Parties shall release FSC from 50% of itswaive
the obligation of FSC to reimburse the IMC Parties forin the
amount of 50% of the certain required quarterly payments pursuant
to an employee benefit agreement executed in connection with the
FTX/IMC Merger, for medical and other benefits due persons who
were former sulphur employees (the "Benefit Payments"), payable
quarterly as the reimbursements become due, for each of 12
quarterly periods, or a total of three years, commencing with the
fourth quarter of fiscal year 2001 (the "Reduction Period"),
provided that FSC makes timely payments of the remaining 50% of
the required payments. Thereafter, FSC will resume the total
amount of reimbursements of FSC's obligations for such retirees.
If FSC shall default on any payment under this Section 9.1 and,
after prior Notice from the IMC Parties, such default shall
continue for more than 5 days after such Notice, such release
shall cease and terminate without further notice and FSC shall,
commencing with such defaulted payment, be liable for the full
amount of its required Benefit Payments in connection with the
FTX/IMC Merger. The IMC Parties shall consult with the Freeport
Parties reasonably in advance regarding any proposed change by
the IMC Parties regarding any amendment proposed to be made to
the amount of the Benefit Payments during the Reduction Period.
In the event that the Freeport Parties fail to agree thereto, the
IMC Parties shall be allowed to implement such proposed change,
except that FSC's obligation to make reimbursements during the
unexpired term of the Reduction Period shall remain at 50% of the
required Benefit Payments as if such change had not been
implemented.
9.2 Big Bend Transfer Co., LLC. MMR shall take, and shall make
commercially reasonable efforts to cause its Affiliates to take,
all appropriate and necessary steps to dismiss all pending
litigation, administrative proceedings and other actions opposing
the issuance of necessary permits for the Big Bend Transfer Co.,
LLC sulphur remelting facility. MMR shall continue, and shall
make commercially reasonable efforts to cause its Affiliates to
continue, to forebear on any litigation opposing the facility,
and agrees not to, and shall make commercially reasonable efforts
to cause its Affiliates not to, support directly or indirectly
any claim brought by a third party opposing the project.
9.3 Xxxxxx Oil Agreement. From and after the Closing Date, IMC
or its Affiliate shall promptly remit from time to time to FSC,
and provide an accounting to FSC for, cash payments in the amount
of the economic benefit for certain set-offs made by IMC under
the liquid sulphur purchase agreement and related reimbursement
agreement with Xxxxxx Oil USA, Inc. as such are realized.
9.4 Restricted Payments; Fundamental Changes.
(a) Restricted Payments and Asset Sales. FSC, MOXY or MMR (the
"Promisors") shall not, and shall notNeither FSC, MOXY nor MMR
("Promisors") shall, nor shall they permit their respective
subsidiaries, to directly or indirectly Affiliated Entities
(i.e., any entity more than 25% of the equity securities of which
is owned by any of the Promisors or any officer, director or
shareholder of any of the Promisors) to, directly or indirectly,
declare, order, pay or make or set apart any sum or properties
for any Restricted Payment, or agree to do so, except to the
extent so.that the same constitutes a Permitted Payment, as
hereinafter defined. The term "Restricted Payment" shall mean
(i) any dividend or other distribution, direct or indirect, on
account of distribution (other than the distribution of a right
or warrant to purchase securities for cash), director or
indirect, on account of the commonthe equity securities of any of
the Promisors or any of their subsidiaries,Affiliated Entities,
now or hereafter outstanding (other than a Permitted Payment);
(ii) any redemption, retirement, sinking fund, or similar
payment, purchase or acquisition for value, direct or indirect,
of anycommon equity security (or purchase any options,any options
warrants or other rights to acquire same) of any of the Promisors
now or hereafter outstanding; (iii) any dividend or other
distribution, direct or indirect, on account of any other equity
security of any of the Promisors hereafter outstanding in excess
of the stated outstanding, (iii)dividend or distribution rate
thereon that is established at the time of the issuance of such
security in a bona fide public or private offering on terms that
are no less favorable to the issuing Promisor than those that
might be obtained in an arm's length transaction from persons
having no affiliation with the Promisors; (iv) any payment of a
claim for rescission of the purchase or sale of, or for material
damages arising from the purchase or sale of, anycommon equity
security of the Promisors, (iv) any payment for management fees
or compensation by any of the Promisors to any director,
executive officer or Affiliated Entity, other than wages,
salaries and bonuses paid in the ordinary course to employees, or
in the case of salaries or bonuses paid to any director or
executive officer of any of the Promisors, which were either (x)
approved by members of the Board of Directors of the relevant
entity who would be considered to be independent of management
under the rules of the New York Stock Exchange, or (y) if payable
by any Affiliated Entity, did not, in the aggregate exceed 150%
of the amounts disclosed as payable by FM Services Inc. to
directors or their Affiliated Entities in the MMR proxy statement
for 2001 (v) any exchange of any equity security or Promisors;
(v)the issuance of any right giving to holder the right to
exchange the equity security for any rights in the property of
the Promisors or their Affiliated Entities; or (vi) the entry
into any transaction with any of the holder or holders of more
than 5% of any class of thecommon equity securities of any of the
Promisors on terms that are less favorable to the Promisor than
those that might be obtained in an arm's arms length transaction
from persons having no affiliation with the Promisor; and (vi)
the issuance of any equity security with the purpose or intent of
circumventing the foregoing provisions. Notwithstanding the
foregoing, (1) dividends, distributions or other payments from
MOXY or FSC to MMR, and (2) dividends or distributions of equity
securities to Promisor.
(b) existing holders, shall be deemed Permitted Payments.None of
the Promisors or any of their Affiliated Entities shall sell or
otherwise dispose of any assets other than for fair market value.
Nothing in this Section 9.4 shall be construed or interpreted as
a limitation or restriction in a Promisor's ability to grant
liens or security interests in or on its assets, except that no
Promisor shall grant any lien or any interest in or on its assets
to secure any equity security.
(c) The restrictions in this Section 9.4 shall terminate upon
the earlier of (i) fifth anniversary of the date hereof; (ii) the
date any Promisor has in place a letter of credit of not less
than $5,000,000 in favor of the IMC Parties; or (iii) the date of
which MMR's market capitalization for 180 consecutive calendar
days has averaged $200 million or more (the first such date being
referred to as the "Cut-Off Date").
(d) The following shall be "Permitted Payments": (i) any
dividend or distribution payable solely in shares of common
stock; (ii) any regularly scheduled dividend payment on any
preferred or senior equity security at a rate not in excess of
the regular dividend rate set on the date of issue of the
security, provided that such security was issued for cash in a
bona fide public offering or private placement meeting one of the
following criteria (x) a majority of the issue was purchased by
Persons who are not Affiliated Entities of the issuer, or (y) the
issuer obtained a fairness opinion with respect to the terms of
the issue from a nationally recognized investment bank (a "Market
Terms Senior Security"); (iii) any redemption, sinking fund
payment, or exchange of property interests in the issuer with the
holders of the Market Terms Senior Security which redemption,
sinking fund payment or exchange of property either (x) occurs
more than 36 (thirty six) months after the date of the Agreement
or (y) is pursuant to the original terms of the Market Terms
Senior Security and the issuer thereof has obtained a fairness
opinion from a nationally recognized investment bank with respect
to the terms of issue; (iv) any payment solely among the
Promisors; and (v) issuance of equity securities or rights,
options or warrants to purchase common stock or other equity
securities.
9.5 Subsequent Delivery of Charitable/Research & Engineering
Releases. If IMC has not received all of the Charitable/Research
& Engineering Releases by the Closing and the amount of the IMC
Payment has been reduced by $1 million pursuant to Section 2, if
FSC provides all of the Charitable/Research & Engineering
Releases expressed effective as of the Closing prior to the first
anniversary of this Agreement then, provided that no IMC Party
has made or been obligated to make any payment with respect to
such releases or the subject-matter thereof after the Closing,
IMC shall pay to FSC the sum of $1 million within three days of
receiving all of the Charitable/Research & Engineering Releases.
9.6 Assignment of Certain Contracts. Anything in this Agreement
to the contrary notwithstanding, to the extent that any Assigned
Contract is not assignable without the consent of another Person
(which consent has not been obtained), this Agreement shall not
be deemed to constitute or require an assignment or an attempted
assignment thereof if such assignment or attempted assignment
would constitute a breach thereof. If such consent has not been
obtained by the Closing Date, the Freeport Parties agree to (a)
cooperate with the IMC Parties in any reasonable arrangement
designed to provide for the IMC Parties substantially the same
benefits and obligations under any such agreement, contract,
license, lease, permit or other authorization, purchase or sale
order, or other executory contract or commitment without cost to
the IMC Parties, including (i) enforcing for the benefit of the
IMC Parties any or all rights of the Freeport Parties under any
contract, commitment, permit or other authorization, or other
agreement against any other Person that is a party thereto, or
(ii) at the election of the IMC Parties, not transferring,
conveying, assigning or delivering to an IMC Party at the
Closing, and retaining legal title or right thereto, while
permitting an IMC Party the possession and use of such assets or
rights for the IMC Party's account and with an IMC Party
receiving the benefits and burdens of such assets or rights as if
such assets or rights had been so transferred, conveyed, assigned
and delivered, and (b) take all reasonable further action to
obtain such consents, approvals or novations as may be required
under such instrument, applicable law or otherwise to effect the
transfer of the asset or right to an IMC Party. Nothing in this
Section 9.6 shall be deemed a waiver of any closing condition set
forth in this Agreement.
9.7 Certain Obligations as to Books and Records.
(a) The books and records (including, but not limited to,
records in computer format and all indices related to any books
and records) relating to the FTX Oil and Gas Business maintained
at an offsight storage sight [name of site]the storage facility
in Franklin Park, Illinois (the "Oil and Gas Books and Records")
will continue to be maintained by the IMC Parties for a period of
six (6) years, or such shorter period of time as the parties may
agree, following the Closing Date at the Franklin Park facility
or such other comparable facility or facilities as the IMC
Parties in their sole discretion may determine. The Freeport
Parties shall reimburse the IMC Parties 80% of the cost of
maintenance of such books and records, payment to be made against
delivery by the IMC Parties to FSC of monthly invoices therefor.
(b) The Freeport Parties shall be entitled to inspect, and make
copies of, the Oil and Gas Books and Records at the cost of the
Freeport Parties and on reasonable notice to the IMC Parties.
The Freeport Parties agree to maintain and return promptly any
Oil and Gas Books and Records that they borrow. Subject to the
requirements of the IMC Parties, the Freeport Parties shall be
entitled on reasonable notice to engage the services of Xxxxx
Xxxxxxxxxx in relation to the Oil and Gas Books and Records, for
such fee and on such terms as may be agreed from time to time by
the IMC Parties. The rights afforded the Freeport Parties
pursuant to this Section 9.7(b) shall terminate in the event that
the Freeport Parties fail to reimburse the cost of maintaining
the Oil and Gas Books and Records on a monthly basis in
accordance with Section 9.7(a).
(c) The IMC Parties shall have no liability to the Freeport
Parties regarding the content or maintenance of, any services
provided in connection with, or otherwise in relation to, the Oil
and Gas Books and Records, except for any claim which arises as a
result of the gross negligence or willful default of the IMC
Parties.
(d) The parties agree that, for a period of six (6) years, or
such shorter period of time as the parties may agree, following
the Closing, they shall not destroy, discard, deface or otherwise
alter any of the Sulphur Books and Records without furnishing
prior Notice to the other party and a reasonable opportunity for
the other party, at such other party's cost, to take custody of
such Sulphur Books and Records. The parties also agree during
such six year period to provide the other party, and its
accountants, counsel or other representatives, during normal
business hours and upon reasonable Notice, access to (including
the making of copies at such other Party's cost) such Sulphur
Books and Records in order to enable the other party to prepare
any required tax returns or customary financial reports, and to
prepare for and defend against any tax or other claims or
litigation, and for any other reasonable business purpose.
9.8 Further Assurances. The Freeport Parties and the IMC
Parties agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such
other actions as may be necessary or desirable in order to
consummate or implement expeditiously the transactions
contemplated by this Agreement, including without limitation any
and all documents necessary to assign to Phosphates or its
Affiliate any of the Assigned Contracts that are not conveyed to
Phosphates or its Affiliate at the Closing.
9.9 Reasonable Cooperation.
(a) The Freeport Parties will (i) consult with the IMC Parties
prior to the Closing with the view of achieving a smooth
transition of ownership of the Sulphur Inventories and Assigned
Contracts; (ii) provide reasonable assistance to Phosphates in
contacting any material customer of the Freeport Parties with a
view to determining whether such customer is likely to remain a
customer following the Closing and, if such customer's consent is
required for the consummation of the transactions contemplated by
this Agreement, obtaining such consent; and (iii) keep the IMC
Parties reasonably informed concerning any material developments
relating to the Sulphur Inventories and Assigned Contracts.
(b) The IMC Parties will cooperate with and provide reasonable
assistance to the Freeport Parties in connection with the Assumed
Liabilities.
9.10 Sulphur Inventories. Within 14 days of delivery of, and
passing of title to, the relevant Sulphur Inventories, Phosphates
will pay FSC for Sulphur Inventories in transit on Closing which
are subsequently delivered to Phosphates and which meet the
specifications set forth on Exhibit A.
10. Termination
10.1 Termination. This Agreement shall terminate upon
termination of the Purchase Agreement and may, by Notice given at
or prior to the Closing, be terminated:
(a) By the mutual written consent of the Freeport Parties and
the IMC Parties; or
(b) By either the Freeport Parties or the IMC Parties if the
other party materially breaches any representation, warranty or
covenant of this Agreement.
10.2 Effect of Termination; Survival. Upon termination of this
Agreement pursuant to this Section 10, this Agreement shall be
void and there shall be no liability by reason of this Agreement,
or the termination thereof, on the part of any party or their
respective directors, officers, employees, agents or
shareholders.
11. Miscellaneous.
11.1 Notices. Any notice, communication, request, reply,
consent, advice or disclosure notice ("Notice") required or
permitted to be given or made by any party to the other in
connection with this Agreement must be in writing and may be
given or served only on a Business Day (a) by depositing such
Notice in the United States mail, postage prepaid and registered
or certified with return receipt requested, (b) by hand
delivering such Notice, (c) by sending such Notice by a national
commercial courier service for next business day delivery, in
each case properly addressed as provided below, or (d) by sending
such Notice via facsimile transmission. Notice deposited in the
mail in the manner described above shall be effective 72 hours
after such deposit; Notice hand delivered in person or delivered
by commercial courier shall be effective at the time of delivery;
and Notice given by facsimile shall be effective when such
facsimile is transmitted to the facsimile number specified in
this Section 12.1 and confirmation of transmission is received by
the giver of such Notice (provided that a confirmation copy is
sent no later than the next Business Day by documented overnight
delivery service). For purposes of Notice, the addresses of the
parties shall, until changed as hereinafter provided, be as
follows:
If to Freeport Parties:
McMoRan Exploration Co.
Freeport-McMoRan Sulphur LLC
McMoRan Oil & Gas LLC
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: General Counsel
Facsimile No: (000) 000-0000
With a copy to:
Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx,
L.L.P.
000 Xx. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx XX
Facsimile No: 000-000-0000
If to IMC Parties:
IMC Global Inc.
Phosphate Resource Partners Limited Partnership
IMC Phosphates Company
IMC Phosphates MP, Inc.
Xxxxx 000
000 Xxxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Attention: General Counsel
Facsimile No: 000-000-0000
and:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx and Xxxxxxx X. Xxxxxxx
Facsimile No: (000) 000-0000
or such substituted persons or addresses of which any of the
parties may give Notice to the other in writing.
11.2 Waiver. The failure by any party to enforce any of its
rights hereunder shall not be deemed to be a waiver of such
rights, unless such waiver is an express written waiver which has
been signed by the waiving party. Waiver of any one breach shall
not be deemed to be a waiver of any other breach of the same or
any other provision hereof.
11.3 Freeport Parties Assumption; Continuing Obligations of
Freeport Parties. Each of the Freeport Parties hereby jointly
and severally assumes each of the obligations of each other
Freeport Party hereunder as if such obligation were the direct
obligation of that Freeport Party. Each of the Freeport Parties
further agrees and acknowledges that its obligations and
liabilities under this Agreement shall remain in full force and
effect without regard to, and shall not be released, discharged,
limited, impaired, reduced or affected in any way by any
circumstance or condition including, without limitation, any lack
of validity or enforceability of any obligation or liability of
any other Freeport Party, any termination, restatement,
modification or other change in any obligation or liability of
any other Freeport Party, any waiver, compromise, release,
discharge, settlement or extension of time granted to any other
Freeport Party, or any voluntary or involuntary bankruptcy,
dissolution, assignment for the benefit of creditors,
reorganization, arrangement, receivership, liquidation or
similar, or merger, consolidation or sale (including of
substantially all of the assets of) any Freeport Party. No IMC
Party shall be required to seek to enforce or resort to any
remedies against any Freeport Party on account of any obligations
or liabilities under this Agreement before proceeding against the
other Freeport Party.
11.4 Expenses. Regardless of whether the transactions
contemplated by this Agreement are consummated, all expenses,
including fees for legal, accounting, investment banking,
financial and other advisory services, incurred in connection
with this Agreement and the transactions contemplated hereby
shall be borne by the party hereto incurring them.
11.5 Interpretation.
(a) The table of contents and section headings contained herein
are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement. Each of the
parties has participated substantially in the negotiation and
drafting of this Agreement and each party hereby disclaims any
defense or assertion in any litigation or arbitration that any
ambiguity herein should be construed against the draftsman.
(b) References to "Sections", "Exhibits" or "Attachments" or
"Schedules" shall be to Sections, Exhibits or Attachments to this
Agreement unless otherwise specifically provided.
(c) Wherever the words "include," "includes," and "including"
are used herein, such words shall be deemed to be followed by the
words "without limitation."
(d) The word "or" is not exclusive.
(e) Words in the singular include the plural, and vice versa.
11.6 Integrated Agreement. This Agreement (along with the
Exhibits and Schedules referenced herein) and the Purchase
Agreement, Master Agreement and ancillary agreements among the
parties as of the date hereof (collectively, the "Transaction
Agreements") constitute the entire understanding and agreement
among the parties hereto with respect to the subject matter
hereof, and there are no agreements, covenants or understandings,
among the parties other than those set forth herein or therein,
all prior agreements and understandings being superseded hereby.
Except and as to the extent set forth in Sections 4 and 5 and in
any Schedule or Attachment thereto, in any certificate delivered
pursuant to Section 7, or in any of the other Transaction
Agreements, neither party makes any representations or warranties
whatsoever, and disclaims all liability and responsibility for
any representation or warranty made or communicated orally or in
writing to the other party (including any information, opinion or
advice that may have been provided to the other party by any
officer, director or employee of such party, such party's counsel
or accountants, or any other agent, consultant or representative
of such party, none of which has been relied upon by the other
party).
11.7 Contribution and Assumption Agreement. Nothing in this
Agreement shall affect any rights or obligations under the
Contribution and Assumption Agreement dated as of December 22,
1997 among FSC, PLP and Freeport-McMoRan Inc.
11.8 Choice of Law. The validity of this Agreement, the
construction of its terms and the determination of the rights and
duties of the parties hereto in accordance therewith shall be
governed by and construed in accordance with the laws of the
State of Delaware applicable to contracts made and to be
performed wholly within such State. Each party consents to the
exclusive jurisdiction of the state courts of and federal courts
located in the State of Delaware for the enforcement of the
obligations evidenced by this Agreement and any dispute arising
out of this Agreement, and expressly waives any defense based
upon venue or forum non conveniens.
11.9 Parties in Interest and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and no party hereto may assign its
rights or obligations hereunder without the prior written consent
of the other party. Nothing in this Agreement is intended or
shall be construed to confer upon or to give any person other
than the parties hereto any rights or remedies under or by reason
of this Agreement.
11.10 Amendment. Unless otherwise provided herein, this
Agreement may be amended only by an agreement in writing signed
by each party hereto.
11.11 Counterparts. This Agreement may be executed by the
parties in one or more counterparts, all of which shall be deemed
an original, but all of which taken together shall constitute one
and the same instrument.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement, all as of the day and year first above written.
FREEPORT-McMoRan SULPHUR LLC
By: McMoRan Exploration Co., its Member
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Co-Chairmen of Board, President
and Chief Executive Officer
McMoRan EXPLORATION CO.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Co-Chairmen of Board, President
and Chief Executive Officer
McMoRan OIL & GAS LLC
By: McMoRan Exploration Co., its Member
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Co-Chairmen of Board, President
and Chief Executive Officer
IMC GLOBAL INC.
By: /s/ J. Xxxx Xxxxxx
-----------------------------
Name: J. Xxxx Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
IMC PHOSPHATES MP, INC.
By: /s/ J. Xxxx Xxxxxx
-----------------------------
Name: J. Xxxx Xxxxxx
Title: Vice President
IMC PHOSPHATES COMPANY
By: /s/ J. Xxxx Xxxxxx
----------------------------
Name: J. Xxxx Xxxxxx
Title: Vice President
PHOSPHATE RESOURCE PARTNERS
LIMITED PARTNERSHIP
By: /s/ J. Xxxx Xxxxxx
---------------------------
Name: J. Xxxx Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
