EXHIBIT 10.3
EXECUTION COPY
AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
among
IMC-Agrico GP Company
Agrico, Limited Partnership
and
IMC-Agrico MP, Inc.
Dated as of July 1, 1993
(as further amended and restated as of
May 26, 1995)
TABLE OF CONTENTS
Page
ARTICLE I.
Definitions 7
ARTICLE II.
Partnership, Name, Purposes, Powers, Authority to
Bind Partnership, Partnership Property,
Other and/or Competing Businesses,
Principal Place of Business; Registered Office and Agent 8
2.01 Partnership 8
2.02 Name 9
2.03 Purposes 10
2.04 Powers of the Partnership 13
2.05 Partner's Authority 13
2.06 Managing Partner; Operating Partner; Change in
Operating Partner; Authority to Bind Partnership 14
2.07 Partnership Property 16
2.08 Other and/or Competing Businesses 16
2.09 Principal Place of Business; Registered Office
and Agent 24
ARTICLE III.
Contributions to the Partnership 24
3.01 Initial Contributions 24
3.02 Additional Contributions 25
3.03 Failure to Contribute 26
3.04 Assumption of Liabilities Under Contribution
Agreement 29
3.05 Subsequent Capital Contribution 29
ARTICLE IV.
Interests of Partners 30
4.01 Interests of Partners 30
4.02 Capital Accounts 31
4.03 Interest on Capital Accounts 33
4.04 Loans from Partners 34
4.05 Transferred Capital Accounts 34
TABLE OF CONTENTS
(continued)
Page
ARTICLE V.
Profit and Loss Sharing;
Allocations for Federal, State and
Local Income Tax Purposes; Cash Distributions;
Suspended Distributions; Reimbursement for Transaction Costs 35
5.01 Allocation of Profits and Losses 35
5.02 Special Allocations 35
5.03 Tax Allocations 37
5.04 Interim Closing of the Books on Transfer 39
5.05 Disagreement Between Partners 39
5.06 Obligations with Respect to Distributable Cash 40
5.07 Distribution of Distributable Cash; Suspended
Distributions 40
5.08 Payment of Transaction Costs 44
ARTICLE VI.
Management 45
6.01 Operation 45
6.02 General Powers of the Managing Partner 46
6.03 Limitations on the Partners; Relations Among
Partners 48
6.04 Policy Committee 49
6.05 Rules of Procedure 56
6.06 Further Management Limitations 56
6.07 Major Decisions 56
6.08 Management of Certain Environmental Liabilities 64
ARTICLE VII.
Encumbrance or Transfer of Partnership Interest 65
7.01 Transfer of Partnership Interest Generally 65
7.02 Transfers of Partnership Interests 66
7.03 Liens 70
7.04 Transfers Upon Triggering Events 71
7.05 Interests in Managing Partner 75
7.06 Certain Conditions of Certain Transfers 75
ARTICLE VIII.
Other Rights of, Duties and Restrictions on the Partners 76
8.01 Indemnification 76
8.02 Contribution 77
TABLE OF CONTENTS
(continued)
Page
8.03 Continuing Liability of Withdrawn Partner 78
8.04 Breach of Parent Agreement 79
ARTICLE IX.
Certain Operational Provisions 79
9.01 Financial, Accounting, and Banking Matters 79
9.02 Budget and Approval Authorities 80
9.03 Insurance 82
9.04 Financial and Other Information 83
9.05 Qualifying Income 87
9.06 Work Force; Employee Benefits 89
9.07 Emergency Expenditures; Compliance with Law 93
9.08 No Action Contrary to Contracts or Applicable
Law 94
9.09 Licenses and Permits 96
9.10 Litigation 97
9.11 Payment and Reimbursement of Expenses; Handling
of Partnership Bank Accounts and Funds 97
9.12 Transactions with Affiliates 101
9.13 No Shifting of Cash Flow 103
ARTICLE X.
Accounting Records; Tax Matters 104
10.01 Books and Records 104
10.02 Inspection of Books and Records 105
10.03 Accounting and Taxable Year 106
10.04 Partnership Tax Returns 107
10.05 Partnership Taxes 107
10.06 Tax Matters Partner 108
10.07 Duties of the Tax Matters Partner 108
10.08 Partnership Status; Elections 109
10.09 Tax Reporting 110
10.10 Tax Oversight 112
ARTICLE XI.
Term 114
11.01 Term 114
11.02 Purchase Option Upon Scheduled Expiration of
the Term 114
TABLE OF CONTENTS
(continued)
Page
ARTICLE XII.
Dissolution and Winding-Up 116
12.01 Dissolution 116
12.02 Winding-Up 120
12.03 Accounting on Dissolution 120
12.04 Accounting; Allocations of Residual Net Profits
and Residual Net Loss After Dissolutions 121
12.05 Application of Article V in Year of Dissolution 121
12.06 Conversion of Assets to Cash 122
12.07 Distributions in Liquidation 123
12.08 Compliance with Treasury Regulations 124
12.09 Deficit Capital Account Restoration Obligation 125
12.10 Section 708 Termination 125
12.11 Continuation of the Partnership 126
12.12 Waiver of Certain Rights 127
ARTICLE XIII.
Miscellaneous Provisions 127
13.01 Force Majeure 127
13.02 Limitation of Liability of Partners 129
13.03 Assignment 130
13.04 Notices 131
13.05 Governing Law 133
13.06 Choice of Forum 133
13.07 Consent to Jurisdiction 133
13.08 Waiver of Jury Trial 135
13.09 Entire Agreement 135
13.10 Execution in Counterparts 136
13.11 Remedies and Waiver 136
13.12 Headings 137
13.13 Third Party Beneficiaries 137
13.14 Further Assurances 137
13.15 Power of Attorney 137
13.16 Public Announcements 138
AMENDED AND RESTATED PARTNERSHIP AGREEMENT
THIS AMENDED AND RESTATED PARTNERSHIP AGREEMENT (this
"Agreement") was made as of 12:01 a.m. (CDT) on the 1st day of
July, 1993 and further amended and restated as of the 26th day of
May, 1995 by and among (i) IMC-Agrico GP Company ("IMC GPCo"), a
Delaware corporation and a subsidiary of IMC GLOBAL OPERATIONS
INC. (formerly IMC Fertilizer, Inc.), a Delaware corporation
("Operations"), (ii) Agrico, Limited Partnership (the "FRP
Partner"), a Delaware limited partnership of which
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP, a
Delaware limited partnership ("FRP"), owns a 99.8% limited
partnership interest and Agrico, Inc., a Delaware corporation
("FRP GPCo"), owns a 0.2% general partnership interest, (iii)
IMC-Agrico MP, Inc. (the "Managing Partner"), a Delaware
corporation, and (iv) Operations.
RECITALS:
WHEREAS, IMC GPCo, the FRP Partner and the Managing
Partnerentered into and formed a general partnership under the
Act to engage in the Phosphate Chemicals Business pursuant to a
Partnership Agreement dated as of June 29, 1993 (the "Original
Agreement"); and
WHEREAS, IMC GPCo, the FRP Partner and the Managing
Partneramended and restated the Original Agreement as of July 1,
1993;
WHEREAS, the parties hereto have approved and consented to (i)
(a) the voluntary complete liquidation and dissolution of IMC
GPCo, in accordance with the General Corporation Law of the State
of Delaware ("Delaware Law"), (b) the admission of Operations as
a Partner in the Partnership in accordance with the terms of this
Agreement, (c) the assumption by Operations (A) as of the date
hereof, of 80% of all obligations of IMC GPCo incurred by IMC
GPCo (x) as a general partner of the Partnership and (y) pursuant
to the terms of the Partnership Agreement, and (B) upon the
completion of such liquidation and dissolution of IMC GPCo, of
all remaining obligations of IMC GPCo, (d) the transfer to
Operations of the assets, properties, rights and interests of IMC
GPCo and (e) the repurchase by IMC GPCo of the preferred stock of
IMC GPCo owned by the Managing Partner at its liquidation value,
in each case in accordance with the Agreement and Plan of
Complete Liquidation and Dissolution dated as of May 26, 1995
(the "IMC GPCo Plan of Liquidation") and (ii) (a) the liquidation
of FRP GPCo or the merger of FRP GPCo with and into Freeport
Chemical Company, a Delaware corporation ("FCC"), and the
liquidation of FCC or the merger of FCC with and into
Freeport-McMoRan Inc., a Delaware corporation ("FTX"), in each
case in accordance with the FRP GPCo/FCC/FTX Merger Documents
(the "FRP GPCo/FCC/FTX Mergers"), with the result that FTX shall
become the owner of the 0.2% general partnership interest in the
FRP Partner owned by FRP GPCo immediately prior to the FRP
GPCo/FCC/FTX Mergers and shall have assumed as of the date of the
completion of such mergers all obligations of FRP GPCo and FCC,
(b) the repurchase by FRP GPCo of the preferred stock of FRP GPCo
owned by the Managing Partner at its liquidation value and (c) at
the option of FTX and FRP, the merger, liquidation or dissolution
of the FRP Partner under Delaware Law in the future (or the
transfer by the FRP Partner of its Partnership Interests to FRP
or an Affiliate of FRP) and the admission of FRP or an Affiliate
of FRP as a Partner in the Partnership, in each case in
accordance with this Agreement, the Amended and Restated Parent
Agreement dated as of May 26, 1995 among Operations, FRP, FTX and
IMC-Agrico Company, a Delaware general partnership (the "Parent
Agreement"), and the Amendment, Waiver and Consent Agreement
dated as of May 26, 1995 among IMC Global Inc., a Delaware
corporation ("Global"), Operations, IMC GPCo, the Managing
Partner, IMC-Agrico Company, FTX, FRP and the FRP Partner (the
"Amendment, Waiver and Consent Agreement");
WHEREAS, the above described transactions are to be
accomplishedin the following manner:
(i) with respect to the liquidation and dissolution of IMC GPCo,
80% of the interests of IMC GPCo shall be transferred to
Operations effective as of May 26, 1995 (except that 100% of IMC
GPCo's 50% common stock interest in the Managing Partner shall be
transferred to Operations as of May 26, 1995 and the preferred
stock of IMC GPCo owned by the Managing Partner shall be
repurchased by IMC GPCo at its liquidation value as of May 26,
1995 (the "Initial IMC GPCo Liquidating Distribution"), with the
remaining 20% of such interests (other than IMC GPCo's common
stock interest in the Managing Partner) to be transferred to
Operations (the "Final IMC GPCo Liquidating Distribution") in
accordance with the following time schedule and the terms of the
IMC GPCo Plan of Liquidation:
(A) if (x) FTX and FRP elect by written notice to the Partners
and the Partnership, after November 30, 1995 and on or prior to
June 4, 1996, to cause the merger, liquidation or dissolution of
the FRP Partner (or the transfer by the FRP Partner of its
Partnership Interests to FRP or an Affiliate of FRP) as
contemplated by the Amendment, Waiver and Consent Agreement and
(y) such merger, liquidation or dissolution of the FRP Partner
(or such transfer of its Partnership Interests) is completed not
earlier than June 5, 1996 and not later than June 15, 1996, the
Final IMC GPCo Liquidating Distribution shall be undertaken
promptly after June 22, 1997;
(B) if (x) FTX and FRP elect by written notice to the Partners
and the Partnership, after November 30, 1995 and on or prior to
June 4, 1996, to cause the merger, liquidation or dissolution of
the FRP Partner (or the transfer by the FRP Partner of its
Partnership Interests to FRP or an Affiliate of FRP) as
contemplated by the Amendment, Waiver and Consent Agreement, but
(y) such merger, liquidation or dissolution of the FRP Partner
(or such transfer of its Partnership Interests) is not completed
by June 15, 1996, the Final IMC GPCo Liquidating Distribution
shall be undertaken after June 15, 1996 and shall be completed no
later than June 30, 1996; and
(C) if FTX and FRP do not elect, after November 30, 1995 and on
or prior to June 4, 1996, to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP
Partner of its Partnership Interests to FRP or an Affiliate of
FRP) as contemplated by the Amendment, Waiver and Consent
Agreement, the Final IMC GPCo Liquidating Distribution shall be
undertaken after June 4, 1996 and shall be completed by June 30,
1996; and
(ii) with respect to the optional merger, liquidation or
dissolution of the FRP Partner (or the transfer of its
Partnership Interests), such option may be exercised in
accordance with the terms of this Agreement and the Amendment
Waiver and Consent Agreement at any time after November 30, 1995
and on or prior to June 4, 1996; provided that if FTX and FRP
exercise such option on or prior to June 4, 1996, their right to
cause such merger, liquidation or dissolution of the FRP Partner
(or such transfer of its Partnership Interests) at that time will
be forfeited unless such merger, liquidation or dissolution of
the FRP Partner (or such transfer of its Partnership Interests)
is completed not earlier than June 5, 1996 and not later than
June 15, 1996; provided, further, that if after November 30, 1995
and on or prior to June 4, 1996 FTX and FRP exercise such option,
but such merger, liquidation or dissolution of the FRP Partner
(or such transfer of its Partnership Interests) is not completed
on or prior to June 15, 1996, FTX and FRP will have an additional
option to cause such merger, liquidation or dissolution of the
FRP Partner (or such transfer of its Partnership Interests) at
any time after July 15, 1997; and provided, further, that if
after November 30, 1995 and on or prior to June 4, 1996, FTX and
FRP do not exercise their option to cause such merger,
liquidation or dissolution of the FRP Partner (or such transfer
of its Partnership Interests), FTX and FRP will have the right to
exercise such option at any time after July 15, 1997; provided,
however that, notwithstanding the provisions of this paragraph
(ii), FTX and FRP may merge, liquidate or dissolve the FRP
Partner (or transfer its Partnership Interests to FRP or an
Affiliate of FRP) in accordance with the terms of the Amendment,
Waiver and Consent Agreement at any time so long as FTX and FRP
bear, and assume liability for, any expense, cost or loss
(including any increase in taxes, other than any increase in
income taxes which arises solely from the timing of the reporting
of income, deductions and credits attributable to the normal
business activities of the Partnership) suffered by the
Partnership, any other Partner or any of their Related Persons
(as defined below) resulting therefrom;
WHEREAS, the IMC GPCo Liquidation, the FRP GPCo/FCC/FTX Mergers
and such optional merger, liquidation or dissolution of the FRP
Partner (or such transfer of its Partnership Interests) make it
necessary and desirable to amend and restate certain provisions
of the Partnership Agreement as originally entered into, and as
previously amended and restated, by the parties in order to,
among other things, admit Operations as a new Partner; and
WHEREAS, the Partners (as hereinafter defined) believe that
through the combination of the Contributed Businesses of IMC and
FRP as contemplated by the Contribution Agreement and the
management of the business and affairs of the Partnership in
accordance with the terms hereof, they can create certain
synergies.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements herein set forth and of
other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
Definitions
Capitalized terms used in this Agreement which are not otherwise
defined herein shall have the meanings given to such terms in
Exhibit A hereto. During the period subsequent to the Initial IMC
GPCo Liquidating Distribution and prior to the Final IMC GPCo
Liquidating Distribution (the "IMC GPCo Liquidation Period"), the
term "IMC Partner" (and correlative terms, such as "Non-Managing
Partner", relating to the "IMC Partner") as used herein, shall
refer to IMC GPCo and Operations, collectively and, unless
otherwise provided herein, actions to be taken by the IMC Partner
during the IMC GPCo Liquidation Period shall be taken by
Operations and IMC GPCo acting jointly; subsequent to the Final
IMC GPCo Liquidating Distribution, the term "IMC Partner" (and
such correlative terms) as used herein shall refer to Operations,
and Operations shall take any such actions acting alone; and at
all such times, the term "IMC Partner" (and such correlative
terms) as used herein shall refer to any other Affiliate of
Operations which succeeds to the Partnership Interests of IMC
GPCo or Operations by means of the purchase, transfer, assignment
or other conveyance or succession of such Partnership Interests
in accordance with the terms of this Agreement. The IMC Partner,
as so defined, the FRP Partner and the Managing Partner are
sometimes hereinafter referred to individually as a "Partner" and
collectively as the "Partners."
ARTICLE II.
Partnership, Name, Purposes, Powers, Authority to Bind
Partnership, Partnership Property, Other and/or Competing
Businesses.
2.01 Partnership. The Partners have hereby formed a general
partnership under the Act on the terms and for the purposes set
forth in this Agreement and, pursuant to this Amended and
Restated Partnership Agreement, as further amended and restated
as of May 26, 1995, IMC GPCo, the FRP Partner and the Managing
Partner, as Partners, hereby agree: (i) in accordance with the
terms of Section 13.09 herein, to admit Operations as a Partner
of the Partnership, upon the completion of the Initial IMC GPCo
Liquidating Distribution; (ii) upon the completion of the Final
IMC GPCo Liquidating Distribution, to the withdrawal of IMC GPCo
as a Partner in the Partnership, without, in accordance with
Section 12.11 herein, such withdrawal constituting a Dissolution
Event, unless such dissolution is required by applicable law;
(iii) if FTX and FRP choose to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP
Partner of its Partnership Interests to FRP or an Affiliate of
FRP) and in accordance with the terms of the Amendment, Waiver
and Consent Agreement, upon the completion of such merger,
liquidation or dissolution (or such transfer of the Partnership
Interests), to admit FRP or an Affiliate of FRP as a Partner of
the Partnership in accordance with the terms of Section 13.09
herein and to the withdrawal of the FRP Partner as a Partner in
the Partnership, without, in accordance with Section 12.11
herein, such withdrawal constituting a Dissolution Event, unless
such dissolution is required by applicable law.
2.02 Name. The Partnership is to be known as "IMC-Agrico Company"
or such other name as the Partners shall unanimously select. The
Partners shall execute and file and/or publish all assumed name
statements and certificates required by law to be filed and/or
published in connection with the operation of the Partnership.
2.03 Purposes. The purposes of the Partnership shall be to engage
for profit in the Phosphate Chemicals Business and to engage for
profit in any and all other activities reasonably related to or
incidental to the Phosphate Chemicals Business, and, subject to
Section 9.05, to engage for profit in any other business, whether
or not related or incidental thereto, as determined by the Policy
Committee from time to time. Without limiting the generality of
the foregoing, the Partnership may, among other things:
(a) acquire, develop, construct, own, manage and operate
phosphate rock mining operations and production facilities,
phosphate chemical facilities, ammonia and urea fertilizer
facilities and uranium oxide facilities;
(b) acquire, by purchase, lease, sublease, license, royalty
agreement or otherwise, land and phosphate mineral rights to the
extent related to the Phosphate Chemicals Business;
(c) develop mines and conduct mining operations in and on
phosphate rock reserves and deposits, and construct, own, manage
and operate phosphate rock, chemical, ammonia, urea and uranium
extraction plants related thereto;
(d) acquire by purchase, lease, sublease, license or otherwise,
such machinery, equipment, vehicles and other facilities as may
be necessary or advisable to own, manage, operate or otherwise
engage for profit in the Phosphate Chemicals Business or any
other business of the Partnership at the time permitted
hereunder;
(e) subject to Section 9.12, enter into such construction,
engineering, operating, management, mining, marketing, selling,
supply or distributorship agreements, arrangements or
understandings with third parties as may be necessary or
advisable to own, manage, operate or otherwise engage for profit
in the Phosphate Chemicals Business or any other business of the
Partnership at the time permitted hereunder (and such agreements,
arrangements or understandings may be (i) with Affiliates of any
Partner so long as they comply with the terms of Section 9.12 and
(ii) with or through trade associations, including, without
limitation, the Phosphate Chemicals Export Association, a Xxxx-
Xxxxxxxx Act organization ("PhosChem"), and the Phosphate Rock
Export Association, a Xxxx-Xxxxxxxx Act organization
("PhosRock"));
(f) own, lease, rent and/or operate and/or make use of railcars,
railway lines and dock loading facilities and vessels and
otherwise arrange for the transportation of the Partnership's
inventory, supplies, materials, equipment, phosphate rock,
phosphate chemicals, uranium oxide, ammonia, urea and uranium
products and any other products produced from, or used in, the
operation of the Phosphate Chemicals Business by such means as
may be necessary or advisable;
(g) sell (in domestic or foreign markets) such phosphate rock,
phosphate chemicals, uranium oxide, ammonia, urea and uranium
products and related products and engage in marketing activities
incidental thereto (either directly or through third parties,
including, without limitation, trade associations, such as
PhosChem and PhosRock);
(h) form, organize, join and participate in trade associations
related to the Phosphate Chemicals Business, including, without
limitation, PhosChem and PhosRock;
(i) manage and operate agricultural, farming and livestock
businesses as an incidental activity relating to holding lands
originally acquired or leased by the Partnership or one of the
Partners' Affiliates as phosphate rock reserves;
(j) subject to Section 9.12, perform all other activities,
including the borrowing of money and the mortgaging of real or
personal property of the Partnership in connection therewith, as
are necessary or incidental to the business or operations of the
Partnership; and
(k) subject to Sections 9.05 and 9.12, engage in such other
businesses and activities, whether or not related to or
incidental to the Phosphate Chemicals Business, as determined by
the Policy Committee from time to time.
2.04 Powers of the Partnership. Subject to the restrictions set
forth in this Agreement, the Partnership shall have the power to
exercise all the powers and privileges granted by this Agreement
and by law, together with any powers incidental thereto, so far
as such powers and privileges are necessary or appropriate for
the conduct, promotion or attainment of the purposes of the
Partnership. Except as otherwise expressly provided in this
Agreement, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be
governed by the Act.
2.05 Partner's Authority. Except as otherwise provided in this
Agreement, no Partner shall have any authority to act for, or to
assume any obligations or responsibilities on behalf of, any
other Partner or the Partnership.
2.06 Managing Partner; Operating Partner; Change in Operating
Partner; Authority to Bind Partnership.
(a) IMC-Agrico MP, Inc. is hereby designated as the managing
partner of the Partnership (the "Managing Partner"). The
Managing Partner shall, subject to the provisions of this
Agreement, have exclusive authority and responsibility to manage
the business and affairs of the Partnership and to make all
decisions regarding the business and affairs of the Partnership.
The Managing Partner is a special purpose corporation formed
solely for the purpose of acting as Managing Partner of the
Partnership. Accordingly, the Managing Partner shall not,
without the consent of both the IMC Partner and the FRP Partner,
engage in any business other than acting as the Managing Partner
hereunder.
(b) As used herein, the term "Operating Partner" shall mean the
Non-Managing Partner, initially the IMC Partner (which, for
purposes of identifying the Operating Partner, shall mean
Operations), which is entitled to elect a majority of the
directors of the Managing Partner at any given time and
"Non-Operating Partner" shall mean the other Non-Managing Partner
at that time. If a Material Breach Event shall have occurred and
not been cured prior to the delivery of the notice of exercise
described below, then (if none of the Non-Operating Partner or
any of its direct or indirect parent entities is Bankrupt) the
Non- Operating Partner shall have the right, upon written notice
of the exercise of such right, to become the Operating Partner
and, if such written notice is delivered exercising that right,
the Operating Partner shall become the Non-Operating Partner. In
the event of a Material Breach Event arising out of a Bankruptcy
of the Operating Partner or any of its direct or indirect parent
entities, prior to exercising its right to become the Operating
Partner, the Non-Operating Partner will reasonably evaluate the
circumstances surrounding such Bankruptcy, giving consideration
to the effect of the Bankruptcy on the Partnership and on the
Managing Partner and its ability to perform its obligations as
Managing Partner, but will have the right in its sole discretion
to elect to become the Operating Partner in accordance with the
terms of this Section 2.06(b). The terms of this Section 2.06(b)
shall similarly apply to any subsequent Material Breach Event or
Events.
(c) As between the Partnership and any other Person (other than a
Partner or its Affiliates), any action taken by the Managing
Partner on behalf of the Partnership shall constitute the act of
and serve to bind the Partnership. In dealing with the Managing
Partner acting on behalf of the Partnership, no Person (other
than the Non-Managing Partners and their respective Affiliates)
shall be required to inquire into the authority of the Managing
Partner to bind the Partnership. Without in any way limiting the
rights of the Partners hereunder as between each other, Persons
dealing with the Managing Partner are entitled to rely
conclusively upon the power and authority of the Managing Partner
as set forth in this Section 2.06.
2.07 Partnership Property. All real and personal property,
whether tangible or intangible (including, without limitation,
all permits and licenses), owned by or granted to or held by the
Partnership shall be deemed to be owned by or granted to or held
by the Partnership as an entity, and no Partner, individually,
shall have any ownership or right to use any such property.
2.08 Other and/or Competing Businesses.
(a) Except as otherwise provided herein, nothing contained in
this Agreement shall be deemed to restrict in any way the freedom
of any Partner or of any Affiliate of any Partner to conduct,
independently of the Partnership, any business or activity
whatsoever without any accountability to the Partnership or to
the other Partners.
(b) Except as set forth in this Section 2.08(b) and in Section
2.0 of the Parent Agreement, each Partner agrees that neither it
nor any of its Affiliates will, directly or indirectly, anywhere
in the world, own, manage, operate, control or invest in any
business that is engaged in the Phosphate Chemicals Business
without first complying with the provisions of this Section
2.08(b), it being understood that (i) purchases and resales of
phosphate chemicals in Canada by Affiliates of the IMC Partner in
volumes not materially greater than the amounts indicated on
Schedule 9.12 hereof and (ii) the conduct of the business of the
Rainbow Division of Operations substantially as currently
conducted, shall not constitute a breach or violation of this
Section 2.08. Notwithstanding the foregoing, any Person that
acquires or succeeds to (or whose Affiliate acquires or succeeds
to) the Partnership Interest (or any portion thereof) of any
Partner shall not be subject to the provisions of this Section
2.08(b) with respect to any business conducted by such Person or
its Affiliates that is conducted thereafter substantially as
conducted on the date of such acquisition or succession. If any
Affiliate of either Non-Managing Partner desires to accept an
opportunity to own, manage, operate, control or invest in any
business that is engaged, in whole or in part, in the Phosphate
Chemicals Business, the Non-Managing Partner affiliated with such
Person (the "Presenting Partner") will first offer such
opportunity to the Partnership, it being understood that two (2)
Policy Committee Representatives or Alternates (or any
combination thereof) of the Non-Managing Partner other than the
Presenting Partner (the "Exercising Partner") may elect, on
behalf of the Partnership, to pursue such opportunity within
thirty (30) days following the presentation of such opportunity
to the Partnership. The Representatives or Alternates (or any
combination thereof) of the Exercising Partner shall notify the
Presenting Partner in writing of such election, on behalf of the
Partnership, to pursue or not to pursue such opportunity before
the expiration of such thirty (30) day period. If the Exercising
Partner fails to give the Presenting Partner notice of such
election within such thirty (30) day period, the Exercising
Partner shall be deemed to have elected, on behalf of the
Partnership, not to pursue such opportunity. If the Partnership
so elects to pursue such opportunity, the Partnership shall
reimburse the Presenting Partner or its Affiliates in an amount
equal to the direct costs incurred by the Presenting Partner or
its Affiliates in connection with developing such opportunity
prior to the date of the Partnership's election to pursue such
opportunity and the opportunity will be considered a Capital
Project. If the Partnership does not so elect (or is so deemed
not to have elected) to pursue such opportunity or, if at any
time the Partnership ceases to pursue the opportunity in good
faith, one or more Affiliates of the Presenting Partner may then
elect to pursue such opportunity. If FRP desires to expand its
existing operations (or pursue other business opportunities which
are part of or related to the Phosphate Chemicals Business) in
Sri Lanka or to pursue the opportunities described in a
memorandum of understanding between FTX and Ercros, S.A.
relating to FESA and ENFERSA, it shall first offer such
opportunities to the Partnership in accordance with the preceding
provisions of this Section 2.08(b); provided that if the
Partnership elects to pursue any of such opportunities, the
Partnership shall reimburse FRP in an amount equal to the direct
costs incurred by FRP in connection with developing such
opportunity prior to the date of the Partnership's election to
pursue such opportunity. Notwithstanding the foregoing, nothing
contained in this Section 2.08(b) shall prevent one or more
Affiliates of any Partner from (A) owning, directly or
indirectly, an aggregate of less than five percent (5%) of the
common stock of, or other ownership interest in, any Person
engaged in the Phosphate Chemicals Business or (B) acquiring (by
stock purchase, asset purchase, merger, consolidation or
otherwise) any Person engaged in the Phosphate Chemicals Business
so long as (I) the revenues derived by such Person from its
Phosphate Chemicals Business represent (and can reasonably be
expected to continue to represent) less than ten percent (10%) of
the total revenues of such Person and (II) the Person acquiring
such Person (the "Acquiring Person") either offers to sell such
Person's Phosphate Chemicals Business to the Partnership at its
fair market value or sells such Person's Phosphate Chemicals
Business to an independent third Person, it being understood
that, in the case of this clause (B), the Acquiring Person may
continue to own and operate, directly or indirectly, such
acquired Person's Phosphate Chemicals Business if it has offered
to sell such Phosphate Chemicals Business to the Partnership in
accordance with this sentence and (x) if any Affiliate of the FRP
Partner is the Acquiring Person, two (2) Policy Committee
Representatives or Alternates of the IMC Partner (or any
combination thereof) fail, on behalf of the Partnership, to
accept such offer within thirty (30) days of such offer to sell,
or (y) if any Affiliate of the IMC Partner is the Acquiring
Person, two (2) Policy Committee Representatives or Alternates of
the FRP Partner (or any combination thereof) fail, on behalf of
the Partnership to accept such offer within thirty (30) days of
such offer to sell. Each Partner acknowledges and agrees that
the covenants contained in this Section 2.08(b) have been
negotiated in good faith by the parties hereto, and are
reasonable and are not more restrictive or broader than necessary
to protect the interests of the Partners hereto, and would not
achieve their intended purpose if they were on different terms or
for periods of time shorter than the periods of time provided
herein or were applied in more restrictive geographical areas
than are provided herein. Each Partner further acknowledges and
agrees that the business of the Partnership is highly
competitive, that no Partner hereto would enter into this
Agreement but for the covenants contained in this Section 2.08(b)
and that such covenants are essential to protect the value of the
business of the Partnership. If any provision of this Section
2.08(b) is held to be unenforceable because of the scope or area
of its applicability, the court making such determination shall
have the power to modify such scope and area or either of them,
and such provision shall then be applicable in such modified
form. Each Partner and its Affiliates shall be relieved of all
obligations under this Section 2.08(b) on and after the second
anniversary of the date that such Partner and its Affiliates
cease to own an interest in the Partnership.
(c) If either Non-Managing Partner (the "Developing Partner")
desires to pursue, or to cause the Partnership to pursue, a Real
Estate Development Project, it shall present such Real Estate
Development Project to the Partnership, it being understood that
two (2) Representatives or Alternates (or any combination
thereof) of the Non-Managing Partner other than the Developing
Partner (the "Electing Partner") may elect, on behalf of the
Partnership, to pursue such Real Estate Development Project
within sixty (60) days following the completion of such
presentation. The Electing Partner shall notify the Developing
Partner in writing of such election, on behalf of the
Partnership, to pursue or not to pursue such Real Estate
Development Project before the expiration of such sixty (60) day
period. If the Electing Partner fails to give the Developing
Partner notice of such election within such sixty (60) day
period, the Electing Partner shall be deemed to have elected, on
behalf of the Partnership, not to pursue such Real Estate
Development Project. If the Partnership so elects to pursue such
Real Estate Development Project, the Electing Partner shall
promptly reimburse the Developing Partner for an aggregate of
seventy-five percent (75%) of the direct costs incurred by the
Developing Partner or its Affiliates in connection with
developing such Real Estate Development Project prior to the date
of such election. If the Partnership does not so elect (or is so
deemed not to have elected) to pursue such Real Estate
Development Project, then the Developing Partner shall have the
option, for a period of sixty (60) days, to deliver a written
notice to each other Partner of its election to either (i)
purchase the real property which is to be the subject of the Real
Estate Development Project from the Partnership at its fair
market value or (ii) cause the Partnership to make a distribution
in kind to the Developing Partner of the real property which will
be the subject of the Real Estate Development Project. If the
Developing Partner elects the purchase option set forth in clause
(i) of the preceding sentence, then (A) the Partners shall
negotiate in good faith to determine the fair market value of
such real property (and if they cannot agree on such value within
sixty (60) days following the notice referred to in the preceding
sentence, the fair market value shall be determined in accordance
with the Real Estate Appraisal Procedure, the cost of which shall
be paid by the Developing Partner) and (B) the Partnership shall,
within thirty (30) days of the date such fair market value is
finally determined, sell such real property to the Developing
Partner for a purchase price, payable at the closing of such sale
in immediately available funds, equal to its fair market value.
If the Developing Partner elects to cause the Partnership to make
a distribution in kind pursuant to clause (ii) of the second
preceding sentence the Partnership shall make, on or before the
thirtieth (30th) day following the date of such election, (1) a
distribution in kind to the Developing Partner, of the real
property which is the subject of the Real Estate Development
Project, (2) a distribution in kind to the Electing Partner of a
Comparable Property and (3) a proportional distribution in cash
to the Managing Partner. For purposes of this Section 2.08(c),
"Comparable Property" shall mean similarly situated real property
as determined by the Managing Partner, reasonably acceptable to
the Policy Committee, having a fair market value such that the
ratio of the fair market value of such real property compared to
the fair market value of the real property being distributed to
the Developing Partner is equal to the ratio of (x) the Capital
Interest of the Partner receiving the distribution in kind
pursuant to clause (2) of the preceding sentence to (y) the
Capital Interest of the Developing Partner, in each case at the
time of such distribution. Each Partner and its Affiliates shall
be relieved of all obligations under this Section 2.09(c) on and
after the date that such Partner and its Affiliates cease to own
an interest in the Partnership.
2.09 Principal Place of Business; Registered Office and Agent.
The principal place of business of the Partnership shall be
located at 0000 Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000 or at
such other place or places as the Policy Committee may from time
to time determine. The registered office of the Partnership
shall be 0000 Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000 and the
registered agent of the Partnership at such address shall be the
Managing Partner; provided that the Managing Partner may
designate such other address or agent as it determines
appropriate from time to time.
ARTICLE III.
Contributions to the Partnership
3.01 Initial Contributions. On the Closing Date, the
contributions are being made to the Partnership by or on behalf
of, and the Partnership will assume certain liabilities of, the
Partners and their Affiliates, all as provided in the
Contribution Agreement. Immediately after such contribution, the
agreed value of each Partner's Capital Account shall be as
follows (it being understood that such agreed values shall not
reflect, and shall not be adjusted to reflect, any adjustments or
payments contemplated by the Contribution Agreement):
IMC Partner $748,993,000
FRP Partner $650,993,000
Managing Partner $ 14,000
3.02 Additional Contributions. As and when the Policy Committee
(or, if not the Policy Committee, the CEOs but not the Managing
Partner) determines, in accordance with the terms of Section
6.07(a) or (b), that the Partnership requires cash from time to
time, each of the IMC Partner (or, during the IMC GPCo
Liquidation Period, each of Operations and IMC GPCo) and the FRP
Partner hereby agrees that it shall make cash contributions to
the Partnership in an amount equal to the product of (i) the
amount of the Partnership's cash requirement as determined by the
Policy Committee or the CEOs, but not the Managing Partner, in
accordance with the terms of Section 6.07(a) or (b), by the
Policy Committee (or, if not by the Policy Committee, by the
CEOs), multiplied by (ii) a fraction, the numerator of which is
such Partner's Current Interest and the denominator of which is
the aggregate Current Interests of the Non-Managing Partners;
provided that if the Policy Committee (or, if not the Policy
Committee, the CEOs) determines, in accordance with the terms of
Section 6.07(a) or (b), that the cash required by the Partnership
is to be used for a Capital Project, each of the IMC Partner (or,
during the IMC GPCo Liquidation Period, each of Operations and
IMC GPCo) and the FRP Partner shall make cash contributions to
the Partnership either (x) in an amount equal to the product of
(1) the cash required by the Partnership for such Capital Project
as determined, in accordance with the terms of Section 6.07(a) or
(b), by the Policy Committee (or, if not by the Policy Committee,
by the CEOs), multiplied by (2) a fraction, the numerator of
which is the Capital Interest of such Partner at such time as the
Capital Project will be placed in service and the denominator of
which is the aggregate Capital Interests of the Non-Managing
Partners at such time as the Capital Project will be placed in
service, or (y) in such other amount as the Policy Committee (or,
if not the Policy Committee, the CEOs) may determine in
accordance with the terms of Section 6.07(a) or (b). Once the
Policy Committee (or, if not the Policy Committee, the CEOs)
approves, in accordance with the terms of Section 6.07(a) or (b),
an additional cash contribution, the Managing Partner shall have,
subject to any terms or conditions specified by the Policy
Committee (or, if not by the Policy Committee, by the CEOs) at
the time it so approves such additional cash contribution, the
reasonable discretion to determine the timing of such cash
contribution giving due consideration to the Partnership's cash
needs as determined by the Managing Partner. The Managing Partner
shall notify the IMC Partner (or, during the IMC GPCo Liquidation
Period, each of Operations and IMC GPCo) and the FRP Partner at
least ten (10) days in advance of the time each such cash
contribution is required to be made to the Partnership.
3.03 Failure to Contribute. If either the IMC Partner (or,
during the IMC GPCo Liquidation Period, either of Operations or
IMC GPCo) or the FRP Partner (in any such case, the
"Non-Contributing Partner") fails, in whole or in part, to make
any cash contribution or defaults, in whole or in part, in any
other obligation to pay money under this Agreement within fifteen
(15) days of giving of a due notice by either of the other
Partners to the Non-Contributing Partner that such cash
contribution is due or that the Non-Contributing Partner has
defaulted in any other such obligation hereunder, the IMC Partner
(with respect to circumstances in which the FRP Partner is the
Non-Contributing Partner) or the FRP Partner (with respect to
circumstances in which the IMC Partner (or, during the IMC GPCo
Liquidation Period, either of Operations or IMC GPCo) is the
Non-Contributing Partner), as the case may be (in either such
case, the "Contributing Partner"), shall have the right to
advance directly to the Partnership such additional cash
contribution, or portion thereof, or such other payment of money,
or portion thereof, as the Non-Contributing Partner has failed to
make or defaulted on (the "Non-Contributing Partner's Share"),
and such advance, together with a proportionate amount of the
corresponding cash contribution or other payment, if any, made by
such Contributing Partner, shall be deemed a loan by the
Contributing Partner to the Partnership (the "Partner Loan"). A
Partner Loan shall bear interest at the rate equal to the lower
of: (i) the maximum rate allowed by law; or (ii) five (5)
percentage points over the Prime Rate. The Partner Loan shall be
recouped and otherwise repaid from all funds which would
otherwise have been available to make distributions which the
Partners would otherwise be entitled to receive from the
Partnership but for this Section 3.03, all of which shall instead
be paid by the Partnership to the Contributing Partner and
applied to the payment of the Partner Loan and all interest
thereon, until the same shall have been paid in full. It is
understood, however, that to the extent the principal and
interest of a Partner Loan are not repaid in full by the
Partnership from all funds which would otherwise have been
available to make distributions (including any distributions
pursuant to Section 12.07(b)) to the Partners, the
Non-Contributing Partner shall be obligated to repay an amount
equal to the Non-Contributing Partner's Share of the outstanding
balance of the principal and interest of such Partner Loan upon
commencement of the winding up of the Partnership in accordance
with Section 12.02. Any amount which would otherwise have been
available to make distributions from the Partnership that is
applied to any Partner Loan shall be credited first to any
interest then due on such Partner Loan, and the balance of the
distribution shall be credited against the outstanding principal
balance of such Partner Loan.
The exercise of the right to make a Partner Loan shall be in
addition to any other rights or remedies that the Contributing
Partner may have under this Agreement or at law or in equity
arising from the Non-Contributing Partner's (i) failure to make
the required cash contribution or (ii) default in any other
obligation to pay money.
3.04 Assumption of Liabilities Under Contribution Agreement. In
accordance with the terms of this Agreement, the IMC Partner has
assumed all of the liabilities and obligations of Operations, and
the FRP Partner has assumed all of the liabilities and
obligations of FRP, in each case under and pursuant to the
Contribution Agreement and each such Partner hereby confirms its
agreement to perform such assumed liabilities and obligations as
if it were a party to such agreement. Any amounts payable by
either Non-Managing Partner under the Contribution Agreement
shall be deemed amounts payable by such Non- Managing Partner
hereunder. The Partners agree that (i) any payment by the IMC
Partner or the FRP Partner pursuant to the terms of this Section
3.04 shall satisfy such amounts payable by Operations or FRP, as
the case may be, or their Affiliates under the Contribution
Agreement and (ii) any payment by Operations or FRP, as the case
may be, or their Affiliates under the Contribution Agreement
shall satisfy such amounts payable by the IMC Partner or the FRP
Partner under this Section 3.04. Nothing herein shall be deemed
to release Operations or FRP (or any of their Affiliates) from
any obligations they may have under the Contribution Agreement.
3.05 Subsequent Capital Contribution. The IMC Partner and the
FRP Partner each may, after the Closing Date, contribute to the
Partnership their respective organizational costs, as defined in
Section 709 of the Code, incurred in forming the Partnership.
ARTICLE IV.
Interests of Partners
4.01 Interests of Partners.
(a) The "Current Interests" of the Partners shall be as follows:
Fiscal Year Ending IMC FRP Managing
June 30 Partner Partner Partner
__________________ _________ _________ _____________
1994 41.3995% 58.5995% 0.001%
1995 44.9995% 54.9995% 0.001%
1996 46.8995% 53.0995% 0.001%
1997 46.4995% 53.4995% 0.001%
1998 and 59.3995% 40.5995% 0.001%
thereafter
During the IMC GPCo Liquidation Period, the "Current Interests"
of Operations and IMC GPCo shall be equal to eighty percent (80%)
and twenty percent (20%), respectively, of the "Current
Interests" of the IMC Partner set forth above.
(b) The "Capital Interests" of the Partners shall be as follows:
Fiscal Year Ending IMC FRP Managing
June 30 Partner Partner Partner
__________________ _________ ___________ _____________
1994 53.4995% 46.4995% 0.001%
1995 54.8995% 45.0995% 0.001%
1996 56.3995% 43.5995% 0.001%
1997 57.7995% 42.1995% 0.001%
1998 and 59.3995% 40.5995% 0.001%
thereafter
During the IMC GPCo Liquidation Period, the "Capital Interests"
of Operations and IMC GPCo shall be equal to eighty percent (80%)
and twenty percent (20%), respectively, of the "Capital
Interests" of the IMC Partner set forth above.
4.02 Capital Accounts.
(a) A separate Capital Account shall be established and
maintained in respect of each Partner.
(b) The Capital Accounts of the Partners shall be credited with
(i) the amount of cash and the fair market value of other
property (net of liabilities that the Partnership is considered
to assume or take subject to under Section 752 of the Code)
contributed by such Partner to the capital of the Partnership and
(ii) allocations to such Partner pursuant to Sections 5.01 and
5.02 of income (or items thereof) including tax-exempt income and
gain. The Capital Accounts of each of the Partners shall be
debited with (i) the amount of cash and the fair market value of
other property distributed to such Partner (net of liabilities
that such Partner is considered to assume or take subject to
under Section 752 of the Code); (ii) allocations to such Partner
of expenditures of the Partnership described in Section
705(a)(2)(B) of the Code; and (iii) allocations to such Partner
pursuant to Sections 5.01 and 5.02 of deduction or loss (or items
thereof). If any property other than cash is distributed to any
Partner, the Capital Accounts of the Partners shall be adjusted
as if the property had instead been sold by the Partnership for a
price equal to its fair market value, with the resulting gain or
loss allocated among the Partners pursuant to Sections 5.01 and
5.02 and the proceeds thereof distributed.
(c) For purposes of computing the amount of any item of income,
gain, deduction or loss to be reflected in the Capital Accounts
of the Partners, the determination, recognition and
classification of such items shall be the same as its
determination, recognition and classification for Federal income
tax purposes; except that:
(i) Any deductions for depreciation, depletion, cost
recovery or amortization attributable to property
contributed by the Partners to the Partnership or
attributable to Partnership property adjusted pursuant to
Section 4.02(d) shall be determined as if the adjusted
basis of such property on the date it was contributed or
adjusted was equal to the fair market value of the
property; and
(ii) Any income, gain or loss attributable to the taxable
disposition of any property contributed by the Partners or
attributable to Partnership property adjusted pursuant to
Section 4.02(d) shall be determined as if the adjusted
basis of the property as of the date of disposition was
equal to the fair market value of the property at the time
of contribution or adjustment reduced by all depreciation,
cost recovery and amortization deductions charged to the
Partners' Capital Accounts with respect to such property.
(d) Upon the issuance of additional Partnership interests for
cash or property, the Capital Accounts of the Partners and the
value of all Partnership assets for purposes of Section 4.02(c)
shall be adjusted upwards or downwards to reflect any unrealized
gain or unrealized loss attributable to each asset as if such
assets had been sold immediately prior to such issuance and such
gain or loss had been allocated to the Partners, at such time,
pursuant to Sections 5.01 and 5.02.
4.03 Interest on Capital Accounts. Except as specifically
provided herein, no Partner shall be entitled to any interest on
its Capital Account or its contributions to the capital of the
Partnership, nor shall any Partner have the right to demand or
receive the return of all or any part of its Capital Account or
its contributions to the capital of the Partnership.
4.04 Loans from Partners. Loans by a Partner to the Partnership
(including, without limitation, any Partner Loan) shall not be
considered capital contributions.
4.05 Transferred Capital Accounts. In the event that any Partner
transfers all or a portion of its Partnership Interest in
accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferor Partner to the
extent such Capital Account relates to the transferred
Partnership Interest or portion thereof. In accordance with the
terms of the preceding sentence, Operations shall succeed to 80%
of the Capital Account of IMC GPCo as of the date of the Initial
IMC GPCo Liquidating Distribution and Operations shall succeed to
the remaining 20% of the Capital Account of IMC GPCo as of the
date of the Final IMC GPCo Liquidating Distribution. If FTX and
FRP elect to merge, liquidate or dissolve the FRP Partner (or
transfer its Partnership Interests) in accordance with the terms
of the Amendment, Waiver and Consent Agreement, the successor to
the FRP Partner, as a Partner to the Partnership, shall succeed
to the Capital Account of the FRP Partner, as provided in the
first sentence of this Section.
ARTICLE V.
Profit and Loss Sharing; Allocations for Federal, State and Local
Income Tax Purposes; Cash Distributions; Suspended Distributions;
Reimbursement for Transaction Costs
5.01 Allocation of Profits and Losses. Except as provided in
Section 5.02, 5.03 or 12.05, for purposes of maintaining the
Capital Accounts and in determining the rights of the Partners
among themselves, each item of income, gain, loss and deduction
(computed in accordance with Section 4.02(c)) shall be allocated
to the Partners' Capital Accounts as a part of the Residual Net
Profit or Residual Net Loss for the year in accordance with the
Partners' Capital Interests for the following year.
5.02 Special Allocations.
(a) Transaction Costs attributable to the transactions
contemplated by the Contribution Agreement shall be allocated
fifty percent (50%) to IMC GPCo and fifty percent (50%) to the
FRP Partner.
(b) Any gain or loss attributable to a Capital Transaction shall
be allocated to the IMC Partner (or, during the IMC GPCo
Liquidation Period, Operations and IMC GPCo) and the FRP Partner
in accordance with their respective Capital Interests for the
fiscal quarter of the Partnership in which the effective date of
the Capital Transaction occurs.
(c) If the IMC Partner's (or, during the IMC GPCo Liquidation
Period, Operations' and IMC GPCo's) or the FRP Partner's share of
Current Interest Cash for any year exceeds that Partner's share
of Target Cash for that year, such Partner shall be allocated an
amount of gross income equal to the excess.
(d) If the IMC Partner's (or, during the IMC GPCo Liquidation
Period, Operations' and IMC GPCo's) or the FRP Partner's share of
Current Interest Cash for any year is less than that Partner's
share of Target Cash for that year, such Partner shall be
allocated an amount of gross loss equal to the difference.
(e) The gross income or loss allocated to any Partner under
Section 5.02(c) or 5.02(d) shall be considered to consist of each
item of Partnership income or loss (except depreciation,
depletion and amortization), as the case may be, in the same
proportion that such items bear to total Partnership income or
loss.
(f) For purposes of Sections 5.02(c) and 5.02(d), the IMC
Partner's (or, during the IMC GPCo Liquidation Period,
Operations' and IMC GPCo's) or the FRP Partner's percentage of
Target Cash for any year shall be equal to such Partner's Current
Interest for such year. For purposes of Sections 5.02(c) and
5.02(d), the IMC Partner's (or, during the IMC GPCo Liquidation
Period, Operations' and IMC GPCo's) or the FRP Partner's "share
of Target Cash" for any year shall be equal to (i) such Partner's
percentage of Target Cash for such year, as determined pursuant
to the preceding sentence multiplied by (ii) Target Cash for such
year.
(g) All losses and deductions associated with the Partners'
organizational costs shall be allocated proportionally to the
Partners based on their contribution of such costs pursuant to
Section 3.05.
5.03 Tax Allocations.
(a) Except as otherwise provided in this Agreement, for Federal
income tax purposes, all items of Partnership income, gain, loss
and deduction (and the character and source of such items) shall
be allocated among the Partners in the same manner as the
corresponding item of income, gain, loss or deduction is
allocated to Capital Accounts pursuant to Sections 5.01 and 5.02.
(b) If, as a result of contributions of property by a Partner to
the Partnership or as a result of the revaluation of Partnership
assets pursuant to Section 4.02(d), Section 704(c) of the Code
(or the principles of Section 704(c) of the Code) requires
allocations of income, gain, loss and deduction of the
Partnership in a manner different from that set forth in Sections
5.01 and 5.02, the Partnership shall adopt mutually acceptable
methods and conventions consistent with the provisions of Section
704(c) of the Code and the Regulations thereunder which are
acceptable to both the IMC Partner (or, during the IMC GPCo
Liquidation Period, Operations and IMC GPCo) and the FRP Partner
and such methods and conventions shall control, solely for
Federal income tax purposes, allocations of items of Partnership
income, gain, loss and deduction. The method and conventions
adopted by the Partnership shall be designed, in general, (i) to
allocate the "built-in" gain or loss on the sale of a contributed
property to the contributor; (ii) to allocate the deductions from
contributed properties in a manner that reflects the Partners'
respective contributions of basis giving rise to such deductions
(other than special basis adjustments pursuant to Section 743 of
the Code); (iii) to preserve to the FRP Partner, for the benefit
of FRP and its partners, deductions attributable to special basis
adjustments pursuant to Section 754 of the Code resulting from
the purchase of interests in FRP; (iv) to adjust the allocations,
to the extent necessary, to reflect the sale of an asset
contributed by a Partner; (v) to eliminate the difference between
the value at which the property is shown on the books of the
Partnership and the property's adjusted tax basis; and (vi) to
assist the FRP Partner in integrating the allocations of the
Partnership with allocations to FRP and its partners in a
reasonable manner.
5.04 Interim Closing of the Books on Transfer. In the event that
a Partner sells or exchanges all or a portion of its Partnership
Interest or a Partner's Partnership Interest is reduced, the
Partners' distributive share of items allocated to them pursuant
to Sections 5.01 and 5.02 shall be determined as if the
Partnership's books of account were closed on the date on which
such sale, exchange or reduction of the Partnership Interest
occurred; provided, that, to the extent such determination
relates to transactions contemplated by the IMC GPCo Plan of
Liquidation and the optional merger, liquidation or dissolution
of Agrico LP (or the transfer of its Partnership Interests to FRP
or an Affiliate of FRP) as contemplated by the Amendment, Waiver
and Consent Agreement, such determination shall be based upon any
permissible method elected by the Tax Matters Partner.
5.05 Disagreement Between Partners. In the event of a
disagreement between the IMC Partner and the FRP Partner
concerning the correct calculation of the allocations pursuant to
this Article V, the correct calculation of such allocations shall
be treated as a Major Decision and shall be determined by the
Policy Committee, the CEOs or the Managing Partner, as the case
may be, pursuant to Section 6.07(a) and Section 6.07(b).
5.06 Obligations with Respect to Distributable Cash.
Notwithstanding any other provision of this Agreement other than
Sections 3.03 and 5.07(d), but subject to the terms of any
agreement or instrument to which the Partnership is a party, the
Partnership shall distribute quarterly all Distributable Cash to
the Partners.
5.07 Distribution of Distributable Cash; Suspended Distributions.
(a) Subject to the terms of any agreement or instrument to which
the Partnership is a party, as soon as available, but in any
event (i) not later than sixteen (16) days (or, in the case of a
quarter ending on June 30, not later than thirty (30) days)
following the end of each quarter of each Fiscal Year, commencing
with the end of the first quarter following the Closing, the
Partnership shall advise each Partner in writing of the amount of
Distributable Cash, if any, which will be distributed to each
Partner in respect of the previous quarter of the Fiscal Year,
(ii) in the case of a quarter ending June 30, not later than
sixteen (16) days following the end of such quarter, commencing
with the first such quarter following the Closing, the
Partnership shall advise each Partner in writing of its good
faith estimate of the amount of Distributable Cash, if any, which
will be distributed to each Partner in respect of the previous
quarter of the Fiscal Year and (iii) not later than 40 days
following the end of each quarter of each Fiscal Year, commencing
with the first quarter following the Closing, the Partnership
shall distribute to each Partner such Partner's Distributable
Cash in respect of the preceding quarter (adjusted, if required,
as provided in Section 5.07(b) and Section 5.07(c) below);
provided, however, that if the Accounting Referee has not
provided its report in accordance with the terms of the
Contribution Agreement prior to any such distribution of
Distributable Cash, the Managing Partner shall consider the items
or amounts that are the subject of dispute in establishing any
cash reserves of the Partnership, including, without limitation,
as such reserves relate to the calculation of Current Interest
Cash.
(b) Notwithstanding the foregoing, the allocation of
Distributable Cash to IMC GPCo and the FRP Partner for quarters
ending on or prior to June 30, 1994 shall be adjusted as follows:
(i) first, Distributable Cash shall be computed and
allocated to IMC GPCo and the FRP Partner for such quarter,
as if any Transaction Costs incurred by the Partnership in
such quarter had not been incurred;
(ii) second, an amount equal to 50% of any expenditures for
Transaction Costs incurred by the Partnership during such
quarter shall be subtracted from the amounts calculated
under clause (i) above; and
(iii) third, the amount so calculated pursuant to clauses
(i) and (ii) above shall be distributed to IMC GPCo and the
FRP Partner.
(c) Capital Proceeds in respect of a Material Asset Sale shall be
distributed, reinvested or retained by the Partnership as
determined by the Policy Committee or the CEOs, as the case may
be, at the time of approval of such Material Asset Sale in
accordance with the terms of Section 6.07. Capital Proceeds in
respect of all other Capital Transactions shall be distributed to
the Partners pursuant to Section 5.07(a) unless the Managing
Partner elects to use such Capital Proceeds to replace the
capital asset in respect of which such Capital Proceeds were
generated or otherwise to maintain (but not for the Expansion of)
the business of the Partnership.
(d) Notwithstanding the foregoing provisions of Sections 5.06,
5.07(a), 5.07(b) and 5.07(c), and in addition to the suspension
and repayment that is to occur under the circumstances set forth
in Section 3.03 hereof, if either Operations or FRP, or either of
their Affiliates, fails to pay any claim (a "Contribution
Agreement Claim") by the Partnership or another Partner or any of
its respective Affiliates (the "Non-Defaulting Partner") under
the Contribution Agreement and there is no good faith dispute
between Operations, or any of its Affiliates, and FRP, or any of
its Affiliates, as to the existence of such claim or if either
the IMC Partner (or, during the IMC GPCo Liquidation Period,
Operations or IMC GPCo) or the FRP Partner fails to make any
payment due hereunder (including, without limitation, any cash
contribution pursuant to Section 3.02) and there is no good faith
dispute among the Partners over the existence of such default,
then the Partnership shall suspend all payments and distributions
otherwise due hereunder to the Partner that has so defaulted or
whose parent entity has so defaulted (the "Defaulting Partner").
If a good faith dispute exists (i) between Operations, or any of
its Affiliates, and FRP, or any of its Affiliates, as to the
existence of a Contribution Agreement Claim or (ii) between the
IMC Partner (or, during the IMC GPCo Liquidation Period,
Operations or IMC GPCo) and the FRP Partner over the existence of
a default with respect to a payment due hereunder, then in each
such case, the parties to such dispute shall proceed to resolve
such dispute as soon as practicable pursuant to the Dispute
Resolution Mechanism. All payments and distributions otherwise
due to the Defaulting Partner hereunder, including, without
limitation, amounts determined by the Dispute Resolution
Mechanism to be a valid Contribution Agreement Claim or a
defaulted payment hereunder, shall instead be recouped and
applied to what would otherwise have been distributed to such
Defaulting Partner to reduce the claim of the Partnership or
Partner or of their Affiliate, as the case may be, until such
time as the Contribution Agreement Claim or such defaulted
payment, as the case may be, together with interest on the unpaid
amount thereof at the rate per annum equal to the lower of: (i)
the maximum rate allowed by law and (ii) the Prime Rate plus five
percent (5%) has been paid in full. The parties agree that with
respect to a Contribution Agreement Claim all amounts so recouped
and paid to a Non-Defaulting Partner shall satisfy such amounts
owed by Operations or FRP, as the case may be, or their
Affiliates under the Contribution Agreement. Upon payment in
full of the Contribution Agreement Claim or such defaulted
payment, as the case may be (together with such interest accrued
thereon), the Partnership shall resume payments and distributions
to the Partners in accordance with the provisions of Sections
5.07(a), 5.07(b) and 5.07(c).
5.08 Payment of Transaction Costs. The Partnership shall
promptly reimburse any Partner for any Transaction Costs incurred
and actually paid by such Partner. Any such Transaction Costs
incurred prior to the date of this Agreement, and not previously
reimbursed by the Partnership, will be promptly reimbursed by the
Partnership following such date.
ARTICLE VI.
Management
6.01 Operation. The business and affairs of the Partnership
shall be managed and conducted by the Managing Partner, who shall
have full control over and responsibility for such business and
affairs, in all cases subject to the provisions of this
Agreement. The Managing Partner shall perform its duties and
obligations hereunder as an ordinary prudent and reasonable
manager would under similar circumstances.
It is understood and agreed that regardless of the fact that the
Managing Partner may enter into transactions, agreements,
arrangements and understanding with the Operating Partner or its
Affiliates, including, without limitation, the Marketing and
Administrative Services Agreement and the Leasing Agreement, in
order for the Operating Partner or such Affiliates to provide
certain services to the Managing Partner, the Managing Partner
shall not be relieved of its duties and obligations to provide
services hereunder nor shall such duties and obligations be
altered by such transactions, agreements, arrangements or
understandings.
6.02 General Powers of the Managing Partner. Subject to the
terms, restrictions and limitations set forth elsewhere herein,
including, without limitation, those set forth in this Article
VI, the Managing Partner, on behalf of the Partnership, shall
have full authority and responsibility to do all things it deems
necessary or appropriate in the conduct of the business and
affairs of the Partnership, including, without limitation, (i)
the determination of the operations in which the Partnership will
participate and the level or rate of activity of such operations;
(ii) the obtaining and maintaining of all governmental licenses
and permits necessary or appropriate for the conduct of the
activities of the Partnership; (iii) the execution of normal
banking transactions such as accepting deposits, drawing of
checks and otherwise making payments on behalf of the
Partnership; (iv) the maintaining or incurring of Debt, the
making of expenditures and the incurring of any other obligations
it deems necessary or appropriate for the conduct of the
activities of the Partnership; (v) the evaluation of confidential
information furnished to the Partnership by others in connection
with the operation of the Partnership's business or the
evaluation by the Partnership of a potential transaction; (vi)
the acquisition, lease, disposition, mortgage, pledge,
encumbrance, hypothecation or exchange of any or all of the
assets of the Partnership; (vii) the use of the assets of the
Partnership (including, without limitation, cash on hand) in any
manner it deems necessary or appropriate in order to achieve the
purposes of the Partnership, including, without limitation, the
financing of the conduct of the activities of the Phosphate
Chemicals Business and any other operations of the Partnership,
the extension of credit in the ordinary course of business to
Persons other than Affiliates of the Managing Partner (except
that the Managing Partner may cause the Partnership to advance
funds to it or its Affiliates in order to meet payroll or other
similar obligations with respect to its employees or employees of
its Affiliates who provide services to the Partnership, as
contemplated in Sections 9.06 and 9.11), the repayment of
obligations of the Partnership, the conduct of additional
Partnership operations and the purchase of assets; (viii) the
negotiation and execution on any terms it deems necessary or
appropriate, and the performance of, any contracts, conveyances
or other instruments that it considers necessary or appropriate
to the conduct of the Partnership operations or the
implementation of its powers under this Agreement; (ix) the
calculation and distribution of Distributable Cash; (x) subject
to Section 5.07(c) and Section 5.07(d), the calculation and
reinvestment, or distribution, of Capital Proceeds; (xi) the
selection, appointment and dismissal of officers, employees,
outside attorneys, accountants, consultants, engineers and
contractors to perform services for the Partnership, and the
determination of their compensation and other terms of employment
or hiring; (xii) the maintenance of such insurance (including
self- insurance) for the benefit of the Partnership as the
Managing Partner deems necessary or appropriate; (xiii) the
formation of any further limited or general partnerships, joint
ventures or other relationships that the Managing Partner deems
necessary or appropriate, except that the Managing Partner shall
not, without the consent of the FRP Partner, cause the
Partnership to create, invest in, or become an equity owner or
partner in an entity which is subject to Federal income taxes;
(xiv) the control of any matters affecting the rights and
obligations of the Partnership, including the conduct of
litigation and the incurring of legal expenses and the settlement
of claims and litigation; (xv) the preparation of the
Partnership's tax returns; (xvi) subject to Section 9.12, the
hiring or engagement of its Affiliates (subject to the
supervision and control of the Managing Partner) to carry out the
obligations of the Managing Partner hereunder; (xvii) subject to
Section 9.07, the taking of all actions necessary or appropriate
to preserve life or property in the case of an emergency or
necessary or appropriate to comply with applicable law; and
(xviii) the payment of all taxes which may be levied or assessed
against the Partnership or its properties.
6.03 Limitations on the Partners; Relations Among Partners.
(a) Except as set forth in Section 6.02 with respect to the
Managing Partner, but in all cases subject to Section 6.07, no
Partner shall, in the name of, or on behalf of the Partnership,
act without the prior consent of the Policy Committee or the
approval of the two CEOs or the Managing Partner contemplated by
Section 6.07(b), as the case may be.
(b) No Partner shall be liable to third Persons for Partnership
losses, deficits, liabilities or obligations except as
specifically otherwise provided herein or expressly agreed to in
writing by such Partner, unless the assets of the Partnership
shall first be exhausted.
(c) In any matter between the Partnership on the one hand and any
of the Partners on the other hand or in any matter between the
Partners, neither the Partnership nor any Partner shall be bound
by the act of a Partner unless such Partner is acting in
accordance with the limitations and provisions set forth in this
Agreement or with the consent of each other Partner.
6.04 Policy Committee.
(a) The responsibility and authority for establishing policies
relating to the strategic direction of the Partnership and
assuring that such policies are implemented shall be vested in a
policy committee (the "Policy Committee"). All decisions
concerning the management and control of the Partnership that are
approved by the Policy Committee shall be binding on the
Partnership and the Partners. Except as otherwise stated herein,
the Managing Partner shall use all commercially reasonable
efforts to act in accordance with the budgets and policies
established by, and other determinations made by, the Policy
Committee or the two CEOs or the Managing Partner, as the case
may be, in accordance with Section 6.07.
(b) The Policy Committee shall consist of four (4) members, two
(2) of whom shall be representatives of the IMC Partner selected
by the IMC Partner (each an "IMC Representative" and,
collectively, the "IMC Representatives") and two (2) of whom
shall be representatives of the FRP Partner selected by the FRP
Partner (each an "FRP Representative" and, collectively, the "FRP
Representatives" and, together with the IMC Representatives, the
"Representatives"). A Representative of the Operating Partner
shall serve as Chairman of the Policy Committee. The IMC Partner
and the FRP Partner shall, within ten (10) days of the date
hereof, notify each other in writing of the identity of the IMC
Representatives and the FRP Representatives, respectively. The
IMC Partner, within (10) days of the date hereof, shall notify
the other Partners in writing as to which of its Representatives
is to initially serve as Chairman of the Policy Committee. Any
person selected by the IMC Partner or the FRP Partner to serve as
an IMC Representative or an FRP Representative shall continue to
serve in such capacity until such Partner shall have notified the
other Partners in writing of his or her replacement. The IMC
Partner and the FRP Partner may, by written notice to the other,
designate a person to serve as an alternate for each IMC
Representative and each FRP Representative, respectively (each
alternate to an IMC Representative being referred to herein as an
"IMC Alternate" and, collectively, as the "IMC Alternates"; each
alternate to an FRP Representative being referred to herein as an
"FRP Alternate" and, collectively, as the "FRP Alternates"; and
the IMC Alternates and the FRP Alternates being collectively
referred to herein as the "Alternates"), and such IMC Alternate
or FRP Alternate, as the case may be, shall be entitled, in the
absence of such IMC Representative or FRP Representative, to vote
on behalf of such IMC Representative or FRP Representative at any
meeting of the Policy Committee. Each Partner and its
Affiliates, in dealing with IMC Representatives or Alternates or
the FRP Representatives or Alternates, as the case may be, shall
be entitled to rely conclusively upon the power and authority of
such Representatives or Alternates to bind the IMC Partner or the
FRP Partner, as the case may be, with respect to all matters
unless and until it receives notice to the contrary in writing
from the IMC Partner or the FRP Partner, as the case may be. To
the fullest extent permitted by law, each Representative and
Alternate shall be deemed the agent of the Partner which
appointed such Person a Representative and Alternate, and such
Representative or Alternate shall not be deemed an agent or a
sub-agent of the Partnership or the other Partners and shall have
no duty (fiduciary or otherwise) to the Partnership or the other
Partners. Each Partner, by execution of this Agreement, agrees
to, consents to, and acknowledges the delegation of powers and
authority to such Representative and Alternatives, and to the
actions and decisions of such Representative and Alternates
within the scope of their respective authority as provided
herein.
(c) The Policy Committee shall hold regular meetings at least
once during each quarter of each Fiscal Year on dates specified
by the Policy Committee and may meet for special meetings at the
call of any Partner on at least twenty (20) days' notice to the
other Partners (or such shorter periods as may be necessary in an
emergency). Attendance by any IMC Representative or FRP
Representative or any IMC Alternate or FRP Alternate at any
meeting of the Policy Committee shall constitute an effective
waiver of any required prior notice to the IMC Partner or the FRP
Partner, as the case may be, of such meeting. The Chairman of
the Policy Committee shall, (i) with reasonable advance notice
(which in the case of regular quarterly meetings shall not be
less than fourteen (14) days), prepare and distribute an agenda
for each meeting of the Policy Committee, (ii) organize and
conduct such meeting and (iii) prepare and distribute minutes of
such meeting. Any Partner may propose in advance topics for the
agenda or raise topics which are not on the agenda for such
meeting. In addition to the Representatives and Alternates of
the Partners serving on the Policy Committee each Representative
or Alternate of each of the IMC Partner and the FRP Partner may
bring one or more other advisors to any meeting; provided that
such advisors shall not have the right to vote on any matter
brought before the Policy Committee; and provided, further that
the Representatives or Alternates of either of the IMC Partner or
the FRP Partner shall have the right to call executive sessions
of the Policy Committee and to exclude any Person not a
Representative or Alternate from such executive session unless
such Person is an employee of a Partner or its parent entity.
(d) Meetings of the Policy Committee may only be held when a
quorum is present. Except as set forth in the last sentence of
this Section 6.04(d), a quorum of the Policy Committee shall be
comprised of four (4) Representatives or Alternates (or any
combination thereof), which quorum shall be comprised of two (2)
IMC Representatives or IMC Alternates (or any combination
thereof) and two (2) FRP Representatives or FRP Alternates (or
any combination thereof). The affirmative vote of a majority of
the Policy Committee at a meeting at which a quorum is present
(two (2) IMC Representatives or IMC Alternates (or any
combination thereof) and two (2) FRP Representatives or FRP
Alternates (or any combination thereof) being entitled to vote at
any such meeting, except as set forth in the final two (2)
sentences of this Section 6.04(d)) must be obtained in connection
with the decision of any matter being considered by the Policy
Committee; provided, that in the case of a business opportunity
presented to the Partnership by a Presenting Partner pursuant to
Section 2.08(b) or pursuant to Section 3.0 of the Parent
Agreement or a Real Estate Development Project presented to the
Partnership by a Developing Partner pursuant to Section 2.08(c),
the election as to whether to pursue or not to pursue such
business opportunity or Real Estate Development Project, as the
case may be, shall be made by the affirmative vote of two (2)
Representatives or Alternates (or any combination thereof) of the
Exercising Partner or the Electing Partner, as the case may be.
Representatives or Alternates (or any combination thereof)
constituting a quorum may, upon their unanimous consent,
participate in a meeting of the Policy Committee by means of
conference telephone or similar communications equipment which
makes it possible for all persons participating in the meeting to
hear each other. Representatives or Alternates (or any
combination thereof) may consent to any action without a meeting
through a consent in writing of two (2) IMC Representatives or
IMC Alternates (or any combination thereof), and two (2) FRP
Representatives or FRP Alternates (or any combination thereof)
or, in the circumstances described in the proviso to the second
preceding sentence above, of two Representatives or Alternates
(or any combination thereof) of the Exercising Partner or the
Electing Partner, as the case may be. Notwithstanding any
provision of this Agreement to the contrary, if either the IMC
Partner (or, during the IMC GPCo Liquidation Period, Operations
or IMC GPCo) or the FRP Partner defaults in any obligation to pay
money (including, without limitation, any cash contribution
pursuant to Section 3.02 and any amounts payable under the
Contribution Agreement) as and when due hereunder and such
default remains uncured after the expiration of thirty (30) days
from and after notice thereof to such Partner by any other
Partner and there is no good faith dispute among the Partners or
their Affiliates over the existence of such default (with any
such good faith disputes among the Partners or their Affiliates
to be resolved as soon as practicable pursuant to the Dispute
Resolution Mechanism), neither the defaulting Partner's
Representatives nor Alternates (which, during the IMC GPCo
Liquidation Period, with respect to either Operations or IMC GPCo
shall mean neither the IMC Representatives nor the IMC
Alternates) shall be entitled to vote on, or consent to, any
matter before the Policy Committee until such time as the default
has been cured by the defaulting Partner (but they shall continue
to receive notice of and to be able to attend meetings of the
Policy Committee), and during such period the Policy Committee
shall be entitled to exercise all of its power and authority as
set forth in this Partnership Agreement upon the vote at a
meeting (or by telephone or other similar communications
equipment as set forth above) or by written consent of two (2) of
the Representatives or Alternates (or any combination thereof) of
the non-defaulting Partner. In any such event, the presence at a
meeting in person (or by telephone or other similar
communications equipment as set forth above) of two (2)
Representatives or Alternates (or any combination thereof) of the
non-defaulting Partner shall constitute a quorum for the
transaction of business.
6.05 Rules of Procedure. The Policy Committee may from time to
time adopt detailed rules and procedures not inconsistent with
this Agreement for the management of the business of the
Partnership.
6.06 Further Management Limitations. Under no circumstances
shall the Policy Committee have the power to alter or modify in
any manner the terms of this Agreement.
6.07 Major Decisions.
(a) Except as provided in Section 6.07(b) below, no act shall be
taken or sum expended or obligation incurred by the Partnership,
the Policy Committee or any Partner concerning a matter within
the scope of any of the Major Decisions set forth below (each a
"Major Decision"), unless and until the Major Decision (A) shall
be approved by the Policy Committee or the CEOs or (B) is
permitted to be taken by the Managing Partner pursuant to Section
6.07(b). The Major Decisions shall consist of:
(i) creating any Debt of the Partnership in an aggregate
amount at any time outstanding exceeding the Base
Obligation Amount applicable at the time when such Debt is
incurred; provided that no approval by the Policy Committee
or the CEOs will be required for borrowings by the
Partnership for working capital purposes pursuant to a
credit facility (or a working capital contribution
facility) previously approved by the Policy Committee (or,
if not by the Policy Committee, by the CEOs); and provided,
further that the Partners shall have the right to make
Partner Loans to the Partnership in accordance with Section
3.03 without the approval of the Policy Committee or the
CEOs;
(ii) making, or committing to make, any capital
expenditures for Expansion in an annual aggregate amount in
any Fiscal Year in excess of the Base Obligation Amount for
such Fiscal Year;
(iii) making, or committing to make, any Material Asset
Sale;
(iv) approving annual operating and capital expenditure
budgets, quarterly updates of such budgets and any increase
in excess of 15% in any previously approved capital budget
item having a dollar amount in any Fiscal Year in excess of
the Base Budget Amount for such Fiscal Year, it being
understood that if any quarterly update of a previously
approved annual operating or capital expenditure budget is
not approved by the Policy Committee, or the CEOs pursuant
to Section 6.07(b), as the case may be, the Managing
Partner shall have the authority to continue to operate and
manage the business and affairs of the Partnership in
accordance with the most recently approved annual operating
or capital expenditure budget, as the case may be, as such
budget has been updated by any previously approved
quarterly budget update;
(v) calculating Distributable Cash and making distributions
of Distributable Cash in accordance with Section 5.07;
(vi) entering into, or modifying or amending in any
material respect, any agreement which expressly restricts
the Partnership's right to distribute Distributable Cash to
the Partners;
(vii) incurring a Material Obligation (other than Debt
permitted to be incurred pursuant to Section 6.07(a)(i));
(viii) (A) shutting down any Material Facilities of the
Partnership if, in the good faith judgment of the Managing
Partner, such shut down is expected to last more than three
(3) months or (B) continuing to keep any Material
Facilities of the Partnership shut down (other than a shut
down covered by clause (A) above which was properly
approved by the Policy Committee or, if not by the Policy
Committee, by the CEOs) for a period in excess of three (3)
months;
(ix) approving and determining the amount of any cash
contributions by the Partners to be made pursuant to
Section 3.02;
(x) entering into, or modifying or amending in any material
respect, any transactions, agreements, arrangements or
understandings between or on behalf of the Partnership, on
the one hand, and the Operating Partner or any Affiliate of
the Operating Partner, on the other hand, in an aggregate
amount in any Fiscal Year in excess of the Base Affiliate
Transaction Amount for such Fiscal Year, other than the
transactions, agreements, arrangements or understandings
referenced in Section 9.12;
(xi) entering into any settlement agreement with respect to
any suit, claim, action or proceeding involving payment by
the Partnership of an amount in excess of one million
dollars ($1,000,000); or
(xii) calculating the allocations pursuant to Article V, in
the event of a disagreement between the IMC Partner (or,
during the IMC GPCo Liquidation Period, Operations or IMC
GPCo) and the FRP Partner relating thereto.
(b) Notwithstanding the foregoing, if the Policy Committee fails
to approve any matter before it in accordance with the terms of
Sections 6.04 and 6.05, after discussion in good faith,
resolution of such matter shall be referred to the respective
Chief Executive Officers ("CEOs") of the Non-Managing Partners at
the time such matter is presented for resolution. Except as
provided in Section 6.07(c) below, if such CEOs fail to agree on
any matter within fourteen (14) days of the date the matter was
submitted to them, pending final resolution of the dispute, the
Managing Partner shall have the authority to operate the business
and affairs of the Partnership in such a manner as it reasonably
determines to be necessary in order to maintain the value of the
assets of the Partnership or as required to assure compliance
with applicable law, including without limitation taking the
following actions:
(i) establishing annual operating and capital expenditure
budgets (including maintenance capital and capital
expenditures for Expansion in an aggregate amount in any
Fiscal Year not exceeding the Base Obligation Amount for
such Fiscal Year);
(ii) calculating Distributable Cash and distributing
Distributable Cash in accordance with Section 5.07;
(iii) (A) shutting down any Material Facilities of the
Partnership if, in the good faith judgment of the Managing
Partner, such shut down is expected to last more than three
(3) months or (B) continuing to keep any Material
Facilities of the Partnership shut down (other than a shut
down covered by clause (A) above which was properly
approved by the Policy Committee or, if not by the Policy
Committee, by the CEOs or properly undertaken by the
Managing Partner) for a period in excess of three (3)
months; or
(iv) calculating the allocations pursuant to Article V, in
the event of a disagreement between the IMC Partner (or,
during the IMC GPCo Liquidation Period, Operations or IMC
GPCo) and the FRP Partner relating thereto.
(c) Notwithstanding the foregoing Section 6.07(b), in no event
shall the Managing Partner take any of the following actions
without the prior approval of either the Policy Committee or the
CEOs in accordance with Section 6.07(a) or Section 6.07(b), as
the case may be:
(i) creating any Debt of the Partnership in an aggregate
amount at any time outstanding exceeding the Base
Obligation Amount applicable at the time when such Debt is
incurred; provided that no approval by the Policy Committee
or the CEOs will be required for borrowings by the
Partnership for working capital purposes pursuant to a
credit facility (or a working capital contribution
facility) previously approved by the Policy Committee (or,
if not by the Policy Committee, by the CEOs); and provided,
further that the Partners shall have the right to make
Partner Loans to the Partnership in accordance with Section
3.03 without approval of the Policy Committee or the CEOs;
(ii) making, or committing to make, any capital
expenditures for Expansion in an aggregate amount in any
Fiscal Year in excess of the Base Obligation Amount for
such Fiscal Year;
(iii) making, or committing to make, any Material Asset
Sale;
(iv) entering into, or modifying or amending in any
material respect, any agreement which expressly restricts
the Partnership's right to distribute Distributable Cash to
the Partners;
(v) incurring a Material Obligation (other than Debt
permitted to be incurred pursuant to Section 6.07(a)(i));
(vi) approving and determining the amount of any cash
contributions by the Partners to be made pursuant to
Section 3.02;
(vii) entering into, or modifying or amending in any
material respect, any transactions, agreements,
arrangements or understandings between or on behalf of the
Partnership, on the one hand, and the Operating Partner or
any Affiliate of the Operating Partner, on the other hand,
in an aggregate amount in any Fiscal Year in excess of the
Base Affiliate Transaction Amount for such Fiscal Year,
other than the transactions, agreements, arrangements or
understandings referenced in Section 9.12;
(viii) entering into any settlement agreement with respect
to any suit, claim, action or proceeding involving payment
by the Partnership of an amount in excess of one million
dollars ($1,000,000); or
(ix) engaging in any activity prohibited by Section 9.05.
6.08 Management of Certain Environmental Liabilities. The
Partners agree that after the Closing Date the IMC Partner and
the FRP Partner will consult with each other concerning
negotiation, remediation and expenditures to be made by the
Partnership or the Partners, as the case may be, for the
Environmental Liabilities listed on Part I and Part II of
Schedule 2.05(iv) to the Contribution Agreement (each a "Retained
Environmental Liability"). The Partnership and the Partners
agree to provide to the Partner whose Affiliate contributed the
Assets to which such Retained Environmental Liability relates
(or, in a case in which Operations contributed such Assets, to
Operations) (the "Retaining Partner") access to all relevant
information on an ongoing basis relating to such Environmental
Liability and to enter into discussions in good faith to
determine the most efficient use of money by the Partnership or
the Retaining Partner, as the case may be, in an effort to ensure
the Partnership's continued use of (or other appropriate action
agreed to by the Partners with respect to) the Assets to which
such Environmental Liability relates. The Partners further agree
to permit the Retaining Partner, upon written notification to the
other Partners, to directly manage and oversee all negotiations,
agreements to remediate and remediation activities relating to
any Retained Environmental Liability to the extent the management
of such negotiation and remediation will not unreasonably
interfere with the day-to-day use of such Assets or result in an
unreasonable increase in costs to the Partnership (such cost
increases to be reimbursed to the Partnership by such Retaining
Partner managing such negotiation and remediation). With respect
to any Environmental Liability listed on such Schedule 2.05(iv)
that shall be an Assumed Liability, each Partner shall cause the
Partnership to act as quickly as is commercially reasonable to
complete all required remedial activity.
ARTICLE VII.
Encumbrance or Transfer of Partnership Interest
7.01 Transfer of Partnership Interest Generally. No Partner may
assign, transfer or otherwise dispose of all or any portion of
its Partnership Interest except in accordance with the terms of
this Article VII. Any attempt by any Partner to assign, transfer
or otherwise dispose of all or any portion of its Partnership
Interest other than in accordance with this Article VII shall be
null, void ab initio and of no force and effect. Notwithstanding
any other provision of this Article VII, the transfers of the
Partnership Interest of IMC GPCo to Operations executed in
connection with the IMC GPCo Liquidation and, in the event that
FTX and FRP choose to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP
Partner of its Partnership Interests to FRP or an Affiliate of
FRP) in accordance with the terms of the Amendment, Waiver and
Consent Agreement, transfers of the Partnership Interest of the
FRP Partner to FRP or an Affiliate of FRP executed in connection
with such merger, liquidation or dissolution of the FRP Partner
(or such transfer of the Partnership Interests), shall be deemed
to have been made in accordance with the terms of this Article
VII.
7.02 Transfers of Partnership Interests. (a) Except as otherwise
consented to in writing by each of the other Partners, no Partner
may sell, transfer or otherwise dispose of all or any portion of
its Partnership Interest (collectively "Transfer") unless (i)
such Transfer is pursuant to a written agreement pursuant to
which the transferee agrees to be bound by all of the terms of
this Agreement as if it were originally a party hereto, (ii) such
Transfer does not cause a termination of the Partnership for
Federal income tax purposes, (iii) the transferring Partner shall
have transferred a proportionate amount of its capital stock of
the Managing Partner to the transferee of all or a portion of the
Partnership Interest as required by Section 7.05 and (iv) such
Transfer is in compliance with Section 7.02(b) and Section 7.04.
(b) If either the IMC Partner (or, during the IMC GPCo
Liquidation Period, Operations or IMC GPCo) or the FRP Partner
(in any such case, the "Soliciting Partner") desires to sell or
otherwise dispose of to any third party (other than an Affiliate
of such Soliciting Partner), or to solicit bids from any third
party (other than an Affiliate of such Soliciting Partner) to
purchase or otherwise acquire, all or any part of its Partnership
Interest (the "Subject Partnership Interest"), such Soliciting
Partner shall (i) if the Soliciting Partner is the IMC Partner
(or, during the IMC Liquidation Period, Operations or IMC GPCo),
notify the FRP Partner in writing of the IMC Partner's desire to
sell its Subject Partnership Interest or (ii) if the Soliciting
Partner is the FRP Partner, notify the IMC Partner (or, during
the IMC GPCo Liquidation Period, Operations and IMC GPCo) in
writing of its desire to sell its Subject Partnership Interest.
The notice referred to in the preceding sentence is hereinafter
referred to as the "Notice of Intent to Sell", and the Partner
receiving the Notice of Intent to Sell is hereinafter referred to
as the "Notified Partner". For a period (the "No-Shop Period")
of thirty (30) days following the date it gives Notice of Intent
to Sell, and during the duration of any Negotiation Period (as
defined below), neither the Soliciting Partner nor any of its
Affiliates, officers, directors, employees, representatives or
agents will, without the prior written consent of the Notified
Partner, commence or continue any discussions, negotiations or
exchanges of information with any Person other than the Notified
Partner with respect to the sale of the Subject Partnership
Interest. During the No-Shop Period, both the Soliciting Partner
and the Notified Partner shall cooperate with each other in
exchanging all due diligence materials they deem to be reasonably
necessary to determine the price and terms of any potential
offer. If the Notified Partner makes a bona fide offer to
purchase the Subject Partnership Interest prior to the end of the
No-Shop Period, then the Soliciting Partner and the Notified
Partner shall negotiate in good faith for the purchase and sale
of the Subject Partnership Interest and the No-Shop Period shall
be extended for fifteen (15) days (the "Negotiation Period");
provided that a decision to accept or reject shall be in the sole
discretion of the Soliciting Partner. If the Notified Partner
fails to make a bona fide offer to purchase the Subject
Partnership Interest (the making or failure to make such offer
being in its sole discretion) prior to the expiration of the
No-Shop Period or if the Soliciting Partner and the Notified
Partner fail to execute a letter of intent relating to the
purchase and sale of the Subject Partnership Interest or
terminate negotiations prior to the expiration of the Negotiation
Period, then the Soliciting Partner may, but shall not be
obligated to, immediately commence discussions, negotiations or
exchanges of information with, and/or sell its Subject
Partnership Interest to, any third party; provided that if the
Notified Partner made a bona fide offer during the No-Shop
Period, the Soliciting Partner shall not so sell the Subject
Partnership Interest to a third party unless (i) definitive,
binding agreements relating to such sale are executed within two
hundred twenty (220) days of the expiration of the Negotiation
Period, (ii) the cash value of the consideration received in
connection with such sale is at least equal to 95% of the cash
value of such offer made by the Notified Partner and (iii) the
transferee of such Subject Partnership Interest agrees in writing
to be bound by the terms of this Agreement as if it had
originally been a party hereto. The cash value of such sale and
the cash value of such offer by the Notified Partner,
respectively, shall be determined by agreement among the
Soliciting Partner and the Notified Partner (i) in the case of
the cash value of such sale, within ten (10) days following the
execution of definitive, binding agreements by the parties
relating thereto and (ii) in the case of the cash value of such
offer by the Notified Partner, within ten (10) days following the
earliest to occur of (A) the termination of negotiations between
the Soliciting Partner and the Notified Partner and (B) the
expiration of the Negotiation Period, provided that if such
agreement is not reached during either of such ten (10) day
periods, then, in either such case, such cash value shall be
determined by means of the Appraisal Procedure, with the expense
thereof to be paid fifty percent (50%) by the Soliciting Partner
and fifty percent (50%) by the Notified Partner and with the
determination made thereby being final, unappealable, binding on
both the Soliciting Partner and the Notified Partner and
enforceable in a court of law or equity. After the expiration of
such two hundred twenty (220) day period, such Subject
Partnership Interest shall again be subject to the terms of this
Section 7.02(b). The failure of either the Soliciting Partner or
the Notified Partner to exercise its rights under this Section
7.02(b) shall not be deemed to be a waiver of its respective
rights under this Section 7.02(b) with respect to subsequent
Subject Partnership Interests.
7.03 Liens. None of IMC GPCo (prior to the completion of the
Final IMC GPCo Liquidating Distribution), Operations (subsequent
to the completion of the Initial IMC GPCo Liquidating
Distribution), the FRP Partner (prior to or subsequent to the
merger, liquidation or dissolution of the FRP Partner (or the
transfer of its Partnership Interests) contemplated by the terms
of the Amendment, Waiver and Consent Agreement) or the Managing
Partner may, except with the consent of the other Partners (which
consent may be granted or withheld in such Partners' sole
discretion), create or permit to exist any Lien on its
Partnership Interest or any portion thereof or any of the capital
stock of the Managing Partner (except (i) Liens for current taxes
not delinquent or taxes being contested in good faith and by
appropriate proceedings or (ii) Liens arising in the ordinary
course of business for sums not due or sums being contested in
good faith and by appropriate proceedings). Any attempt by any
such Partner to create or permit to exist any Lien (other than
the excepted Liens described in this Section 7.03) on its
Partnership Interest or any portion thereof shall be null, void
ab initio and of no force and effect. Notwithstanding anything to
the contrary contained herein, if any Person obtains a Lien on
the Partnership Interest of IMC GPCo, Operations, the FRP Partner
or the Managing Partner or any portion thereof (during a period
during which such a Lien could not be granted to such Person in
accordance with the terms of this Section 7.03) and forecloses on
such Lien, (i) the Partnership shall continue, (ii) the Person
foreclosing on the Lien shall succeed to the economic interests
of the Partnership Interest, or portion thereof, upon which it
foreclosed but not the voting or other interests which comprise
such Partnership Interest, or portion thereof, (iii) the Person
foreclosing on such Lien shall not be admitted as a "Partner"
without the approval of the Policy Committee or the other
Partners, and (iv) any sale or other disposition of the
Partnership Interest, or portion thereof, upon which such Person
foreclosed shall be subject to the terms of Article VII hereof.
7.04 Transfers Upon Triggering Events.
(a) Upon the occurrence of a Triggering Event, the Triggering
Partner shall give the other Partners prompt written notice of
such Triggering Event (the "Triggering Event Notice"), which
notice shall describe the terms and conditions of the transaction
giving rise to the Triggering Event. For a period of thirty (30)
days following the receipt of the Triggering Event Notice (or, if
no Triggering Event Notice is received, at any time after a
Triggering Event has occurred), the Non-Triggering Partner
(which, during the IMC GPCo Liquidation Period, shall mean both
Operations and IMC GPCo, for purposes of this Section 7.04, if
the IMC Partner is the Non-Triggering Partner) shall have the
right to sell, and, upon the receipt of notice (the "Exercise
Notice") of the exercise of such right from the Non-Triggering
Partner, the Triggering Partner shall have the obligation to
purchase, all but not less than all of the Non-Triggering
Partner's Partnership Interest at the Transfer Price applicable
to such Triggering Event; provided, however, that (i) if the
transaction that gave rise to the Triggering Event involved the
sale of all or a portion of the Partnership Interest of the
Triggering Partner, the Non-Triggering Partner shall instead have
the right to sell all, but not less than all of its Partnership
Interest to the purchaser (the "Purchasing Partner") of the
Triggering Partner's Partnership Interest and the Purchasing
Partner, by its execution and delivery of a counterpart hereof on
the closing date with respect to the purchase and sale of the
Triggering Partner's Partnership Interest, agrees to purchase the
Non-Triggering Partner's Partnership Interest at the Transfer
Price applicable to such Triggering Event, (ii) if the Exercise
Notice was delivered to the Triggering Partner and the Triggering
Partner fails to purchase the Non-Triggering Partner's
Partnership Interest within the period specified above, then,
without limiting its rights against such party, the
Non-Triggering Partner shall then have the right to sell all, but
not less than all, of its Partnership Interest to either the
Purchasing Partner or the Partnership, and upon receipt of an
Exercise Notice, the Purchasing Partner or the Partnership, as
the case may be, shall be obligated to purchase the
Non-Triggering Partner's Partnership Interest for cash at the
Transfer Price applicable to such Triggering Event; and (iii) if
the Exercise Notice was delivered to the Purchasing Partner and
the Purchasing Partner fails to purchase the Non-Triggering
Partner's Partnership Interest within the period specified above,
then, without limiting its rights against such party, the
Non-Triggering Partner shall then have the right to sell all, but
not less than all, of its Partnership Interest to either the
Triggering Partner or the Partnership, and upon receipt of an
Exercise Notice, the Triggering Partner or the Partnership, as
the case may be, shall be obligated to purchase the
Non-Triggering Partner's Partnership Interest for cash at the
Transfer Price applicable to such Triggering Event. The closing
of the sale of the Non-Triggering Partner's Partnership Interest
shall occur on or before the sixtieth (60th) day following the
receipt of the Exercise Notice by the Triggering Partner, the
Purchasing Partner or the Partnership, as the case may be;
provided that if the Appraisal Procedure is invoked to determine
the Transfer Price, the time periods in this sentence shall be
extended to the date which is thirty (30) days following the
final determination of the Transfer Price. If a Triggering Event
Notice has been delivered and the Non-Triggering Partner does not
deliver an Exercise Notice within the thirty (30) day period
specified above, the Non-Triggering Partner shall be deemed to
have elected not to sell its Partnership Interest.
(b) The terms and conditions (other than the method of payment of
the Transfer Price) of any sale pursuant to this Section 7.04
shall be customary for transactions of such type; provided that
if the event giving rise to this Triggering Event involves a sale
of a Partnership Interest, such terms and conditions shall be
substantially similar to the terms and conditions of the sale
giving rise to the Triggering Event, adjusted as appropriate to
reflect differences in the structure of the transactions. The
Transfer Price payable in connection with any sale of a
Partnership Interest by a Non-Triggering Partner pursuant to this
Section 7.04 shall be payable in cash on the date of closing of
such sale. If the Transfer Price is determined in accordance
with the Appraisal Procedure, the expense thereof is to be paid
fifty percent (50%) by the Triggering Partner and fifty percent
(50%) by the Non- Triggering Partner.
(c) Any sale of a Partnership Interest by a Non-Triggering
Partner pursuant to this Section 7.04 shall be accompanied by a
corresponding sale of all of the issued and outstanding stock of
the Managing Partner then held by such Non-Triggering Partner in
accordance with Section 7.05.
7.05 Interests in Managing Partner. Except as provided in this
Section 7.05, neither the IMC Partner nor the FRP Partner shall
sell, transfer or otherwise dispose of all or any portion of the
capital stock of the Managing Partner. If either the IMC Partner
or the FRP Partner sells, transfers or otherwise disposes of all
or a portion of its Partnership Interest to any Person in
accordance with the terms of Section 7.02, then, simultaneously
therewith, the Non-Managing Partner making such a transfer shall
so sell, transfer or otherwise dispose of a proportionate amount
of capital stock of the Managing Partner to such Person.
7.06 Certain Conditions of Certain Transfers. As a condition to
the effectiveness of (i) the Initial IMC GPCo Liquidating
Distribution, (ii) the Final IMC GPCo Liquidating Distribution,
(iii) the FRP GPCo/FCC/FTX Mergers, (iv) the merger, liquidation
or dissolution of the FRP Partner (or the transfer of its
Partnership Interests) in accordance with the terms of the
Amendment, Waiver and Consent Agreement and (v) any related
transactions, each Partner hereby agrees to bear, and assume
liability for, any expense, cost or loss (including any increase
in taxes, other than any increase in income taxes which arises
solely from the timing of the reporting of income, deductions and
credits attributable to the normal business activities of the
Partnership) suffered by the Partnership, any other Partner or
any of their Related Persons (as defined below) arising from
consummation of the transactions described in (i) to (v) above in
violation of the provisions of this Agreement, the Parent
Agreement, the Amendment, Consent and Waiver Agreement and the
IMC GPCo Plan of Liquidation.
ARTICLE VIII.
Other Rights of, Duties and Restrictions on the Partners
8.01 Indemnification. All costs, expenses, liabilities,
obligations, losses, damages, penalties, proceedings, actions,
suits or claims of whatever kind or nature which may be imposed
on, incurred by, suffered by, or asserted against the
Partnership, any Partner (which term, for purposes of this
Article VIII, shall, with respect to the IMC Liquidation Period
(and all other periods during which Operations or IMC GPCo is a
Partner) refer to each of Operations and IMC GPCo, severally and
not jointly) or any Partner's respective Affiliates, directors,
officers and employees, in connection with the ownership or
management or operation of the business and affairs of the
Partnership shall be referred to as "Claims". The Partnership
shall indemnify and hold harmless each Partner and their
respective Affiliates, directors, officers and employees
("Related Persons") for all Claims other than those caused by
such Partner's or such other Related Person's gross negligence,
wilful misconduct, wilful breach of this Agreement or failure to
follow a specific instruction from the Policy Committee adopted
in accordance with the terms of this Agreement; provided that in
no event shall the Partnership be required to indemnify any
Partner or any of its Related Persons for any Claim arising out
of or relating to any Excluded Liability for which such Partner
or Related Person is responsible pursuant to the terms of the
Contribution Agreement. For purposes of this Agreement, an
ignoring of the terms of this Agreement shall be deemed a wilful
breach; provided that the Managing Partner shall not be liable
for ignoring the term of this Agreement requiring the Managing
Partner to act as an ordinary prudent and reasonable manager if
the Managing Partner acted in good faith and in the belief (which
was reasonable) that its actions were in accordance with all of
the terms of this Agreement. In addition to, and not in
contravention of, the foregoing, the Partnership shall indemnify
and hold harmless each Partner and their respective Related
Persons from all Assumed Liabilities and any and all costs,
expenses, liabilities, obligations, losses, damages, penalties,
proceedings, actions, suits or claims of whatever kind or nature
which may be imposed on, incurred by, suffered by, or asserted
against any Partner or its respective Related Persons arising out
of or in connection with any Assumed Liability. The Leasing
Agreement and the Marketing and Administrative Services Agreement
shall contain provisions consistent with this Section 8.01.
8.02 Contribution. In the event that any Partner shall pay in
good faith or become obligated to pay any proper obligation of
the Partnership, such Partner shall be entitled to contributions
from the other Partners to the extent necessary so that, after
giving effect to such contributions, each Partner shall bear no
more than that part of such obligation which corresponds to its
respective Capital Interest at the time of the occurrence,
circumstances, events or conditions giving rise to the
obligation.
8.03 Continuing Liability of Withdrawn Partner. In the event of
the withdrawal of a Partner from the Partnership by reason of the
transfer of its entire Partnership Interest in accordance with
the provisions of this Agreement, or in violation of this
Agreement, such withdrawn Partner shall remain liable as a
general partner with respect to all obligations of the
Partnership incurred or accrued on or prior to the date of
withdrawal (but shall not have liability for obligations of the
Partnership incurred or which accrue subsequent to the date of
withdrawal). If the Partnership is continued without
dissolution, or reconstituted and continued, following the
withdrawal of any Partner, in either case in accordance with the
terms of this Agreement, the withdrawn Partner shall be entitled
only to the payments expressly provided for in this Agreement and
shall not be entitled to any other or further payments from the
Partnership or any other Partner. Further, in such circumstances,
the withdrawn Partner shall have no right to cause the winding up
or liquidation of the business or assets of the Partnership, and
neither the Partnership nor any Partner shall, as a condition to
the continuation or reconstitution of the Partnership, be
required to post any bond in favor of, or indemnify, the
withdrawn Partner as regards past, present or future liabilities
or otherwise.
8.04 Breach of Parent Agreement. For purposes of this Agreement,
(i) a breach by FTX or FRP of the terms of the Parent Agreement
shall constitute a breach of this Agreement by the FRP Partner
and (ii) a breach by Global or Operations of the terms of the
Parent Agreement shall constitute a breach of this Agreement by
the IMC Partner.
ARTICLE IX.
Certain Operational Provisions
9.01 Financial, Accounting, and Banking Matters.
(a) The Fiscal Year of the Partnership shall begin on July 1 and
end on June 30 of each year of the Partnership.
(b) The auditors of the Partnership shall be Ernst & Young or
such other independent certified public accounting firm of
recognized national standing selected by the Policy Committee in
accordance with the terms of Sections 6.04 and 6.05, or if the
Policy Committee fails to so approve such a selection, then by
the CEOs or the Managing Partner, as the case may be, in
accordance with the terms of Section 6.07(b).
(c) The Partnership shall establish bank accounts at such banks
as may from time to time be designated by the Managing Partner.
The Partnership's funds shall be invested in such manner as the
Managing Partner deems appropriate. All bank and other accounts
shall be maintained in the Partnership's name. None of the
Partnership's funds shall be commingled with the funds of any
Partner unless previously approved in writing by the other
Partners.
9.02 Budget and Approval Authorities.
(a) The Managing Partner shall have the sole and exclusive
authority and responsibility to present annual operating and
capital budgets and quarterly updates of such budgets to the
Policy Committee for its approval, such quarterly updates to
present information on a month-by-month basis. As soon as
available, but not later than forty (40) days prior to the end of
each Fiscal Year, the Managing Partner shall, at a special
meeting of the Policy Committee called for such purpose, present
to the Policy Committee the operating and capital expenditure
budgets for the succeeding Fiscal Year. The Policy Committee
shall review such proposed budgets and shall either approve the
proposed budgets or negotiate in good faith with the Managing
Partner to adopt mutually acceptable budgets for such succeeding
Fiscal Year. As soon as available, but not later than sixty (60)
days after the end of a Fiscal Year and each quarter of the
succeeding Fiscal Year, the Managing Partner shall, at a special
meeting of the Policy Committee called for such purpose, present
to the Policy Committee the operating and capital expenditure
budget updates for the remaining portion of the then current
Fiscal Year. The Policy Committee shall review such proposed
budget updates and shall either approve the proposed budget
updates or negotiate in good faith with the Managing Partner to
adopt mutually acceptable budget updates for the remaining
portion of the then current Fiscal Year. If the Policy Committee
adopts budgets for a Fiscal Year or any portion thereof, the
Managing Partner shall use all commercially reasonable efforts to
operate and manage the business and affairs of the Partnership in
accordance with such budgets (or, if the Policy Committee fails
to so adopt such budgets in accordance with the terms of Sections
6.04 and 6.05 and if such budgets are instead adopted by the CEOs
or the Managing Partner, as the case may be, in each case in
accordance with the terms of Section 6.07(b), then in accordance
with such budgets).
(b) The Managing Partner shall have the sole and exclusive
authority and responsibility to present five (5) year operating
and financial forecasts for the Partnership to the Policy
Committee; provided that if the Managing Partner has not
presented such a five (5) year operating and financial forecast
to the Policy Committee on or before the sixtieth (60th) day of
any Fiscal Year for the succeeding five (5) years, the Managing
Partner shall provide the Non-Operating Partner with access to
the Managing Partner's operating and financial personnel and
shall cause such operating and financial personnel to assist the
Non-Operating Partner in preparing a five (5) year operating and
financial forecast for the Partnership.
9.03 Insurance. The Managing Partner shall have the authority
and responsibility to take whatever action (not inconsistent with
the terms hereof) it determines in good faith to be necessary or
appropriate to preserve and protect the assets of the
Partnership, including, without limitation, by procuring, for the
account of the Partnership, such insurance against such hazards
and liabilities as the Managing Partner deems appropriate in
light of prudent industry practice. All such insurance, whether
maintained by the Managing Partner, Operations or FRP for the
benefit of the Partnership, may be in the name of any Partner,
Operations, FRP or the Partnership so long as each insurance
policy names the Partnership and each Partner as either the
"insured party" or an "additional insured party" and waives
subrogation in favor of each such party. Such insurance coverage
may be subject to such self-insurance, deductibles and limits as
the Managing Partner deems appropriate. If requested by the
Managing Partner, either of the Non-Managing Partners or their
respective parent entities shall cooperate with the Managing
Partner in designing and maintaining a risk management program
which insures the Partnership against such hazards and
liabilities as the Managing Partner deems appropriate, provided
that if the Managing Partner requests either of the Non-Managing
Partners or their Affiliates to maintain insurance in the name of
the Partnership, the Partnership shall reimburse such
Non-Managing Partner or such Affiliates for all of the direct
costs and expenses incurred in connection with the maintenance of
such insurance. In addition to the insurance provided for the
benefit of the Partnership under this Section 9.03, each Partner
and its Affiliates shall have the right to purchase such other
insurance as it deems prudent to cover its respective interest in
the Partnership; provided that all costs and expenses incurred in
connection with the maintenance of such insurance shall be paid
by such Partner and provided that such insurance shall not have
the effect of restricting the amount or availability of insurance
maintained by the Partnership. Should any Partner or their
Affiliates with respect to the Partnership purchase such other
insurance, such other insurance shall waive rights of subrogation
against the other Partners, the Partnership and their Affiliates.
9.04 Financial and Other Information. The Managing Partner shall
deliver or cause to be delivered to each Partner:
(a) as soon as available, but not more than twenty (20) days (or,
in the case of June, forty-five (45) days) after the end of each
month during the term of the Partnership, (i) a statement of the
Distributable Cash and Capital Proceeds of the Partnership for
the preceding month and (ii) an estimate of the Distributable
Cash and Capital Proceeds of the Partnership for the remaining
months of the current quarter and for the entire succeeding
quarter of the Partnership;
(b) as soon as available, but not more than twenty (20) days (or,
in the case of June, forty-five (45) days) after the end of each
month in each Fiscal Year during the term of the Partnership, the
following reports of the Partnership: (i) a Partnership
consolidation (i.e. trial balance) for the preceding month, (ii)
a plant operating statement showing expenditures by cost center
and cost element compared with the budget for the preceding month
and year-to-date, (iii) a capital spending status report;
(c) as soon as available, but not more than twenty (20) days (or,
in the case of June, forty-five (45) days) after the end of each
month in each Fiscal Year during the term of the Partnership, (i)
an unaudited Balance Sheet of the Partnership as at the end of
the preceding month, (ii) the unaudited related Statement of
Income of the Partnership, which shall include sales volumes,
revenues and margins by product, for the preceding month and for
the Fiscal Year-to-date and (iii) the unaudited related Statement
of Cash Flow of the Partnership for the preceding month and for
the Fiscal Year-to-date, it being understood that in the case of
clauses (ii) and (iii) such statements are to be presented
setting forth in each case in comparative form the corresponding
figures for the corresponding period of the previous Fiscal Year
and the plan for the current Fiscal Year, all in reasonable
detail and in accordance with generally accepted accounting
principles applied on a basis consistent with such prior fiscal
periods (except as otherwise specified in such report);
(d) as soon as available, but not more than twenty (20) days (or,
in the case of June, forty-five (45) days) after the end of each
month in each Fiscal Year during the term of the Partnership, an
analysis of the performance of the Partnership;
(e) as soon as available, but in any event within thirty (30)
days after the end of each quarter of each Fiscal Year during the
term of the Partnership a report providing the financial and
operating data for inclusion in the Partners' Affiliates'
respective reports on Form 10-K or Form 10-Q (or any successor
reports or forms thereof) required to be filed with the SEC as of
the end of such quarter;
(f) as soon as available, but in any event within ninety (90)
days after the end of each Fiscal Year during the term of the
Partnership, an audited Balance Sheet as at the end of such
Fiscal Year and the related Statements of Income and Cash Flow of
the Partnership for such Fiscal Year, setting forth in each case
in comparative form, the figures for the previous Fiscal Year of
the Partnership, all in reasonable detail, with applicable
footnotes and accompanied by a report thereon of Ernst & Young or
such other independent public accountants of recognized national
standing selected by the Partnership in accordance with the terms
of Section 9.01(b), which report shall state whether in its
opinion, such financial statements present fairly in all material
respects the financial position of the Partnership as at the
dates indicated and the results of its operations and cash flows
for the periods indicated, in conformity with generally accepted
accounting principles;
(g) promptly upon obtaining knowledge of any audit item involving
disclosure or any material accounting issue, written notification
of such disclosure or accounting issue;
(h) within sixty (60) days after the end of each Fiscal Year
during the term of the Partnership, a certificate of an officer
of the Managing Partner describing the material terms of all
transactions between the Partnership and Affiliates of the
Operating Partner during the preceding Fiscal Year;
(i) within twenty (20) days of the end of each calendar year, the
information that FRP and FTX reasonably request in order for FRP
and FTX to comply with the provisions of FASB 109; and
(j) promptly, any other financial reports delivered to the
Operating Partner's parent entity.
9.05 Qualifying Income.
(a) The Partnership shall not, without the written consent of the
FRP Partner, generate income other than Qualifying Income. The
Managing Partner shall take any action required to operate the
Partnership in a manner consistent with the requirement of this
Section 9.05(a).
(b) The Managing Partner shall provide the FRP Partner, on a
monthly basis, with the information and data reasonably necessary
for the FRP Partner to determine whether the requirement of
Section 9.05(a) will be met for the Partnership's taxable year.
The Managing Partner shall also provide the FRP Partner, on a
timely basis, with the information and data reasonably necessary
to determine whether any Major Decision defined in Section
6.07(a)(ii) or Section 6.07(a)(iv) will result in the failure of
the Partnership to meet the requirement of Section 9.05(a) for
any taxable year of the Partnership. Upon providing the FRP
Partner with information and data with respect to any current or
proposed source of Partnership income reasonably sufficient for
FRP to determine whether such income is or will be Qualifying
Income, the Managing Partner may request that the FRP Partner
consent to the Partnership's generation of such income. The FRP
Partner shall respond in writing to any such request in a timely
manner and any consent so expressed shall constitute consent by
the FRP Partner to the generation of such income for purposes of
Section 9.05(a), subject to any limitation on the amount or
timing thereof stated in such consent. If the FRP Partner does
not respond in writing to the Managing Partner's request within
twenty-five (25) days of the receipt of such request, the FRP
Partner shall be deemed to have consented to the Partnership's
generation of such income for purposes of Section 9.05(a).
(c) In the event that (i) the Partnership fails (or based on all
available information, the FRP Partner reasonably believes the
Partnership may fail) to meet the requirement of Section 9.05(a)
for any taxable year or (ii) there is an amendment to Section
7704 of the Code, the issuance of a Treasury Regulation pursuant
to Section 7704 of the Code, the amendment of any other Code
Section, or the issuance of any other Treasury Regulation or
pronouncement that, in the reasonable belief of the FRP Partner,
may affect the partnership status of the FRP Partner or FRP for
Federal income tax purposes, the Policy Committee shall meet to
determine what actions would be required to preserve the
partnership status of the FRP Partner and FRP for Federal income
tax purposes. If the Policy Committee determines (or, if the
Policy Committee fails to agree, if either the IMC Partner or the
FRP Partner reasonably and in good faith determines) that the
Partnership cannot be operated in a manner that is consistent
with achieving the Partnership's business purpose other than in a
manner that is inconsistent with preserving the partnership
status of the FRP Partner and FRP for Federal income tax
purposes, the Partners agree to negotiate in good faith to
determine the appropriate action to be taken. In the event that
the IMC Partner and the FRP Partner are unable to agree on the
action to be taken after negotiating in good faith, each of the
IMC Partner and the FRP Partner shall have the right to elect to
dissolve the Partnership. It is acknowledged that none of the
Partners is obligated to take any action, and the Partnership is
not obligated to take action, that is harmful to any Partner or
its Affiliates, other than the dissolution of the Partnership.
9.06 Work Force; Employee Benefits.
(a) The Managing Partner shall supply, for the account of the
Partnership, the necessary work force for the conduct of the
business and affairs of the Partnership. The work force to be
provided shall include but shall not be limited to qualified
miners, engineers, metallurgists, geologists, assayers, equipment
operators, helpers, mechanics, accountants, attorneys, purchasing
agents, sales personnel and support staff, together with
necessary supervisory and management personnel, and shall
include, as necessary, the services of the Leased IMC Employees.
Consistent with approved budgets, all members of the work force
employed by the Managing Partner for the purpose of providing
services to the Partnership shall be paid such salaries, hourly
wages and benefits and shall be subject to such other terms and
conditions of employment as the Managing Partner deems
appropriate subject to the following sentence of this Section
9.06. The Managing Partner shall be reimbursed (in accordance
with Section 9.11) for the cash costs (i) incurred under the
Leasing Agreement in connection with the Leased IMC Employees
including, but not limited to, salaries and wages; social
security taxes and payroll taxes; contributions to the IMC
Salaried Pension Plan and the Retirement Plan for Non-Union
Hourly Employees of IMC Fertilizer, Inc. and contributions to
the IMC Salaried Contribution Plan and the Savings Plan for
Hourly Employees of IMC Fertilizer, Inc.; any employee benefits
other than those described above, including, but not limited to,
benefits under any employee benefit plan (as defined in section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended) or any retirement or deferred compensation plan, stock
plan, unemployment compensation plan, vacation pay, severance
pay, bonus or benefit arrangement, insurance or hospitalization
program or any other fringe benefit arrangement which does not
constitute an employee benefit plan, or any employment agreement,
post-retirement benefits, severance benefits or other employee
benefits for former Leased IMC Employees; and other governmental
charges relating to such employment; and (ii) of hiring and
employing, including, without limitation, (A) the cost of all
social security taxes, payroll taxes, post-retirement benefits of
former Managing Partner employees, other employee benefits and
other governmental charges related to such employment to the
extent that the cost thereof is associated with personnel
employed or formerly employed at production facilities as
reflected, consistent with Operations' historic practices, in the
cost of goods sold income statement caption and (B) the costs
attributable to employees providing management information
services, public relations and internal audit services provided
directly to production facilities and limited to those amounts
reflected, consistent with Operations' historic practices, in the
cost of goods sold income statement caption. To the extent that
such personnel costs described at clause (ii) above are included,
consistent with Operations' historic practices, in the selling
and administrative expense income statement caption for financial
reporting purposes, such costs shall be covered by the
Administrative Fee described in Section 9.11 and shall not be
separately reimbursed or paid by the Partnership.
(b) Subject to the terms and conditions of the Contribution
Agreement and to the extent permitted by applicable law, the
Managing Partner shall maintain employee benefit plans (as
defined in section 3(3) of ERISA) and retirement or deferred
compensation plans, unemployment compensation plans, vacation
pay, severance pay, bonus and benefit arrangements, insurance and
hospitalization programs and any other fringe benefit
arrangements for current and former employees, consultants and
agents (whether pursuant to contract, arrangement, custom or
informal understanding) which do not constitute employee benefit
plans (collectively, "Employee Benefit Plans") which are
substantially similar in all material respects to such plans,
arrangements and programs maintained from time to time by
Operations, and shall modify the provisions of the MP Pension
Plans, MP Contribution Plans and MP Benefit Plans to the extent
changes are made to the corresponding plan, contract or
arrangement maintained by Operations (the "IMC Plans") to the
extent such changes to the IMC Plans are commercially reasonable;
provided, however, that nothing in this Section 9.06(b) shall
require the Managing Partner to maintain any plan, arrangement or
program for any employee who is covered by a collective
bargaining agreement, except to the extent provided by such
collective bargaining agreement.
9.07 Emergency Expenditures; Compliance with Law.
(a) If at any time as a result of any event there arises an
emergency where the Managing Partner determines that failure to
take prompt action may result in loss of life or material
personal injury or property damage, the Managing Partner shall
have the authority and responsibility to take such action and
make such immediate expenditures as the Managing Partner may deem
necessary to protect against loss of life, personal injury or
damage to or destruction of property, to safeguard lives and/or
prudently preserve and protect the optimum economic value of the
assets of the Partnership; provided that as soon as reasonably
practicable following the occurrence of such an emergency, the
Managing Partner shall notify the other Partners of the nature of
the emergency and the actions taken in response to such
emergency.
(b) The Managing Partner shall have the authority and
responsibility to take such action and make such immediate
expenditures as it may deem necessary to manage and operate the
business and affairs of the Partnership in compliance with
applicable law; provided that if time permits, the Managing
Partner shall seek the approval of the Policy Committee prior to
making any expenditure pursuant to this Section 9.07(b) which
would otherwise have required such approval, and, if time does
not so permit, will promptly report such action or expenditures
to the Policy Committee.
(c) Any expenditure made pursuant to this Section 9.07 shall be
deemed to constitute an approved expenditure without the need or
necessity for any action or approval by the Policy Committee and
shall not be included in determining whether the Managing Partner
is managing the business and affairs of the Partnership within
the operating and capital expenditure budgets approved or adopted
as described in Section 9.02 hereof.
9.08 No Action Contrary to Contracts or Applicable Law. The
Managing Partner agrees to use all commercially reasonable
efforts not to do or fail to do any act if it in good faith
believes not doing or failing to do such act is likely to result,
or with the giving of notice and/or the passage of time is likely
to result, in (a) a default under the terms of any mortgage,
bond, indenture, agreement, lease or other instrument or
obligation to which the Partnership is a party or by which its
properties or assets may be bound; or (b) the violation of any
law, rule, regulation or ordinance or any judgment, order,
injunction, decree or award of any court, administrative agency
or governmental body against, or binding upon, the Partnership or
its properties or assets; provided, that, in the case of clause
(a) above, the covenant of the Managing Partner shall not apply
if compliance therewith would require the Managing Partner to
make any capital or other expenditures which are not provided for
in an operating or capital expenditure budget adopted by the
Policy Committee (or by the CEOs or the Managing Partner, as the
case may be, pursuant to Section 6.07(b)), or otherwise approved
by the Policy Committee or by the CEOs or the Managing Partner in
accordance with the terms of this Agreement and, in the case of
clause (b) above, any action or failure to act by the Managing
Partner taken to comply with the covenant shall be deemed to be
within its authority set forth in Section 9.07(b) and (c) hereof.
The Managing Partner shall promptly notify the Policy Committee
in writing of (i) the occurrence of any material default of which
it has knowledge under the terms of any mortgage, bond,
indenture, agreement, lease or other instrument or obligation to
which the Partnership is a party or by which its properties or
assets may be bound, (ii) any material violation of which it has
knowledge of any law, rule, regulation or ordinance or any
judgment, order, injunction, decree or award of any court,
administrative agency or governmental authority insofar as such
violation relates to the Managing Partner, any Partner or the
Partnership, and (iii) any event which, with the delivery of
notice or the passage of time, or both, in the good faith belief
of the Managing Partner is likely to result in an event described
in clause (i) or (ii). The Managing Partner shall cause the
Partnership to use all commercially reasonable efforts to
promptly cure or remedy any such event within its control and for
which it is responsible hereunder; provided, that in the case of
a cure or remedy relating to a default described in clause (a) of
the first sentence of this Section 9.08, the covenant of the
Managing Partner shall not apply if compliance therewith would
require the Partnership to make any capital or other expenditures
which are not provided for in an operating or capital expenditure
budget adopted by the Policy Committee (or adopted by the CEOs or
the Managing Partner, as the case may be, pursuant to Section
6.07(b)), or otherwise approved by the Policy Committee or by the
CEOs or the Managing Partner in accordance with the terms of this
Agreement and, in the case of a cure or remedy relating to a
violation described in clause (b) of the first sentence of this
Section 9.08, any such cure or remedy shall be deemed to be
within the Managing Partner's authority set forth in Section
9.07(b) and (c) hereof. The Managing Partner shall represent the
Partnership in any proceeding (whether formal or informal)
relating to any such event. At all times the Managing Partner
shall keep the Non-Managing Partners informed of the current
status and all significant developments in all such proceedings
or matters.
9.09 Licenses and Permits. The Managing Partner shall use all
commercially reasonable efforts to procure and maintain, for the
account of the Partnership, all licenses, permits and other
governmental authorizations necessary or appropriate to operate
the Partnership. The Managing Partner shall notify the
Non-Managing Partners promptly of any denial, suspension or
revocation of any material permit, license or governmental
authorization and of any other action or failure to act by any
governmental authority which relates to permits or licenses for
the Partnership or significantly affects the operations of the
Partnership.
9.10 Litigation. The Managing Partner may, in its commercially
reasonable discretion, bring suit in the name or on behalf of the
Partnership without the approval of the Policy Committee. The
Managing Partner shall at all times keep the Non-Managing
Partners informed of the current status and all significant
developments in any such suit.
9.11 Payment and Reimbursement of Expenses; Handling of
Partnership Bank Accounts and Funds.
(a) The Partnership shall establish bank accounts at such banks
as may from time to time be designated by the Managing Partner.
The Partnership's funds shall be invested in such manner as the
Managing Partner deems appropriate with interest accruing to the
Partnership. All bank and other accounts shall be maintained in
the Partnership's name. None of the Partnership's funds shall be
commingled with the funds of any Partner unless previously
approved in writing by all of the other Partners. The
Partnership shall designate a representative of the Managing
Partner as a signatory on its bank accounts to accomplish more
effectively the purposes of this Section 9.11.
(b) During the regular course of business, the Managing Partner
will invoice customers on behalf of the Partnership for all sales
of the business of the Partnership. The customers for such sales
will be instructed to direct their cash remittance directly to a
Partnership bank account designated by the Managing Partner.
(c) The Partnership shall pay all costs, expenses, liabilities,
losses, damages, penalties and other obligations of the
Partnership. In furtherance thereof, the Managing Partner will
maintain in the name of the Partnership one or more Partnership
cash disbursement accounts for the purpose of paying all such
obligations of the Partnership. These disbursements include all
payments to third parties, payments to the Partners for expenses
incurred on behalf of the Partnership as well as payments to the
Partners of their share of Distributable Cash. The disbursements
shall cover all capital as well as operating outlays of the
Partnership.
(d) The Partnership shall pay to the Managing Partner, out of
Partnership funds, an annual fee (the "Administrative Fee")
intended to compensate the Managing Partner for selling and
administrative expenses (determined on a basis consistent with
Operations' historic practice with respect to its Contributed
Business) incurred by the Managing Partner in connection with the
operation and management of the business and affairs of the
Partnership or the performance of the Managing Partner's
obligations hereunder. One-twelfth of the Administrative Fee
shall be payable monthly in advance on the first day of each
month during the term of the Partnership. The Administrative Fee
shall initially be thirty-four million, three hundred thousand
dollars ($34,300,000) and (i) shall be adjusted on June 30, 1994
and each June 30 thereafter during the term of the Partnership in
accordance with the following sentence, and (ii) may be adjusted
by the Policy Committee upon the request of any Partner if the
manner in which the Managing Partner manages and operates the
business and affairs of the Partnership changes in such a way
that the Administrative Fee (as adjusted in accordance with the
following sentence) no longer accurately reflects the selling and
administrative practices employed by the Managing Partner in
connection with the operation and management of the business and
affairs of the Partnership and the performance of its obligations
hereunder. The Administrative Fee for any Fiscal Year commencing
with the Fiscal Year commencing July 1, 1994 shall be equal to
either (x) the sum of (i) the Administrative Fee in effect for
the immediately preceding Fiscal Year, plus (ii) the product of
(A) the percentage change in the GNP Deflator Index for the
immediately preceding Fiscal Year, multiplied by (B) the
Administrative Fee for the immediately preceding Fiscal Year or
(y) an amount determined by the Policy Committee pursuant to
clause (ii) of the immediately preceding sentence. It is agreed
among the Partners that all expenses and costs relating to FRP
Transferred Sales Employees are included in the Administrative
Fee and that no additional payment or reimbursement shall be made
from the Partnership to the Managing Partner on account of such
employees.
(e) The Partnership shall reimburse the Managing Partner for all
cash personnel costs, as set forth in Section 9.06.
Additionally, any other expenditures incurred by the Managing
Partner in connection with the business and affairs of the
Partnership or the performance by the Managing Partner of its
obligations hereunder in accordance with the terms of this
Agreement, as generally described in the operating budget of the
Partnership, and which constitute part of cost of goods sold and
not paid directly from Partnership funds will be reimbursed by
the Partnership.
(f) To the extent the Managing Partner determines that an advance
of monies from the Partners to the Partnership is necessary
(other than under the Working Capital Contribution Arrangement),
the Managing Partner shall request that the Policy Committee call
for cash contributions from the Partners in accordance with
Section 3.02(a).
(g) The Managing Partner shall be entitled to access, as needed,
the funds of the Partnership in order to pay expenses, including,
but not limited to, payroll expenses of the Managing Partner, for
which the Managing Partner is entitled to reimbursement pursuant
to Section 9.11(e).
(h) Notwithstanding anything herein to the contrary, the
Partnership shall not be obligated to pay, advance to or
reimburse the Managing Partner for, any costs or expenses
pursuant to this Section 9.11 if such cost or expense was
incurred by the Managing Partner otherwise than in compliance
with this Agreement.
(i) All payments provided for in this Section 9.11 shall be made
on or before the due date, and if not paid, the unpaid balance
shall bear interest from and after the due date at the rate equal
to the lower of: (i) the maximum rate allowed by law and (ii) the
Prime Rate.
9.12 Transactions with Affiliates. Except with respect to items
(i)(B) and (ii) referred to in the parenthetical phrase in the
following sentence, any transaction, agreement, arrangement or
understanding between or on behalf of the Partnership, on the one
hand, and the Operating Partner or any Affiliate of the Operating
Partner, on the other hand, must be on terms no less favorable to
the Partnership than those which could be obtained from an
independent third party providing similar goods or services of
like quality. All such transactions, agreements, arrangements
and understandings in an aggregate amount in any Fiscal Year in
excess of the Base Affiliate Transaction Amount for such Fiscal
Year (other than (i) during any period during which the IMC
Partner is Operating Partner, (A) any transactions, agreements,
arrangements or understandings with Operations' railcar repair
business located at Xxxxxxxxxx, Georgia on terms no less
favorable to the Partnership than those which could be obtained
from an independent third party providing similar goods or
services of like quality and (B) any transactions, agreements,
arrangements and understandings with the Rainbow Division of
Operations and International Minerals & Chemical (Canada) Global
Limited ("IMC Canada Ltd."; formerly International Minerals &
Chemical Corporation (Canada) Limited) on the terms set forth on
Schedule 9.12 and (ii) (A) the Marketing and Administrative
Services Agreement, (B) the Leasing Agreement, (C) the Materials
Purchase and Cost Sharing Agreement, (D) the Employee Cost
Sharing Agreement and (E) the Limestone Cost Sharing Agreement)
shall be subject to the approval of the Policy Committee or the
CEOs, as the case may be, in accordance with Section 6.07(a) or
(b). Nothing in this Section 9.12 shall in any way restrict or
affect the right of the Partnership to enter into transactions
with Affiliates of the Non-Operating Partner.
The Operating Partner will, and will cause its Affiliates to (i)
give the Non-Operating Partner and its auditors and other
authorized representatives such access to the offices,
properties, books and records of such party, (ii) furnish to the
Non-Operating Partner and its auditors and other authorized
representatives such financial and operating data and other
information as such Persons may reasonably request and (iii)
instruct its employees and auditors to cooperate with the
Non-Operating Partner and its auditors and other authorized
representatives, in each case as may be reasonably requested by
the Non-Operating Partner to evaluate any transactions,
agreements, arrangements or understandings between the
Partnership or the Managing Partner on the one hand, and the
Operating Partner and its Affiliates, on the other hand; provided
that any investigation pursuant to this Section shall be
conducted in such a manner as not to interfere unreasonably with
the conduct of business of the Operating Partner and its
Affiliates.
9.13 No Shifting of Cash Flow. The Partners acknowledge that due
to the changes in the Partners' Current Interests and Capital
Interests over time, either the IMC Partner or the FRP Partner
could be disproportionately benefited or adversely affected by
actions designed to defer or accelerate Partnership revenues,
defer or accelerate Partnership expenses or capital expenditures
or defer or accelerate Partnership cash flow. The Managing
Partner agrees that it will not operate the Partnership with the
intention of deferring or accelerating cash flows from one period
to another; provided that nothing in this Section 9.13 shall
prevent the Managing Partner from managing the business and
affairs of the Partnership in accordance with the then current
operating and capital expenditure budgets or taking actions to
serve the interests of the Partnership without regard to changes
in the Current Interests and Capital Interests of the Partners.
ARTICLE X.
Accounting Records; Tax Matters
10.01 Books and Records. The Managing Partner shall cause the
Partnership to prepare and maintain proper and complete records
and books of account, separate from the books and records of the
Managing Partner maintained for activities unrelated to the
Partnership, in which shall be entered all transactions and other
matters relative to the Partnership and the operation and
management of the Partnership and its business as are usually
entered into records and books of account maintained by Persons
engaged in businesses of like character. The books and records of
the Partnership shall be maintained at its principal place of
business. The books of the Partnership shall be maintained for
financial reporting requirements in accordance with generally
accepted accounting principles. The Partnership shall also
maintain such tax basis books as are required for the Partnership
and the Partners to comply with the provisions of FASB 109. The
Partnership shall provide such financial and other statements,
including plans, forecasts and projections, as each Partner may
reasonably require for purposes of estimating taxes or projecting
the amount and source of future taxable income or loss.
10.02 Inspection of Books and Records. Each of the IMC Partner
(and, during the IMC GPCo Liquidation Period, each of Operations
and IMC GPCo) and the FRP Partner, at its own expense, shall have
reasonable access to the auditors of the Partnership and shall
have the right to inspect such books and records and the physical
properties of the Partnership during normal business hours and to
cause an audit thereof; provided that if either of the IMC
Partner (or, during the IMC GPCo liquidation Period, Operations
or IMC GPCo) or the FRP Partner requests access to the
Partnership's auditors, desires to inspect the books, records and
physical properties of the Partnership or desires to cause an
audit of the Partnership's books, records and physical
properties, such Partner shall provide prior written notice to
the Managing Partner; and provided, further, that, unless
required by applicable law or unless such Partner reasonably
believes that it needs some or all of the information which would
be obtained in an audit in order to satisfy its duties and
obligations to its shareholders or partners or to the
shareholders or to the partners or unitholders of Global or FRP,
as the case may be, no more than one such audit may be requested
during any twelve (12) month period and each such audit shall be
made, if at all, within twenty-four (24) months of the end of the
fiscal period to which it relates. All meetings with the
Partnership's auditors and inspections of the Partnership's
books, records and physical properties shall be conducted in a
manner and at a time designed not to cause undue inconvenience to
the Managing Partner. The Managing Partner, however, shall (i)
not unreasonably delay such audit, (ii) make all books and
records of the Partnership available to the auditors in
connection with such audit and (iii) use all commercially
reasonable efforts to cause its personnel to cooperate with the
auditors in a commercially reasonable manner and to provide any
assistance reasonably necessary in connection with such audit.
Any Partner shall be permitted to make financial and other
information relating to the business and affairs of the
Partnership available to third parties in connection with any
proposed sale or other disposition of all or a portion of its
Partnership Interest in accordance with the terms of this
Agreement, provided such third parties have signed appropriate
confidentiality agreements with such Partner and the Partnership.
10.03 Accounting and Taxable Year. Subject to Section 448 of the
Code and the provisions of this Agreement, the books of the
Partnership (and the classification, realization and recognition
of income, gain, losses, deductions and other items for Federal
income tax purposes) shall be kept and determined on such method
of accounting for tax and financial reporting purposes as may be
determined by the Managing Partner. The taxable year of the
Partnership shall end on such date permitted under the Code as
the Partners shall determine.
10.04 Partnership Tax Returns. The Managing Partner shall use its
best efforts to cause the Partnership to timely file all
necessary federal, state, and local Partnership income tax
returns and information returns. Each Partner shall provide such
information, if any, as may be required by the Partnership for
purposes of preparing such tax and information returns. The
Partnership's income tax returns shall be provided to the
Non-Operating Partner in sufficient time for the Non-Operating
Partner to confer with the Managing Partner before the time at
which such Partnership return must be filed. The Partnership
shall deliver to each Partner, within twenty-five (25) days after
the end of the Partnership taxable year any additional
information in the possession of the Partnership that the
Partners may reasonably require for the preparation of their own
income tax returns.
10.05 Partnership Taxes. The Managing Partner shall cause the
Partnership to timely pay all taxes and assessments levied or
assessed against the Partnership or its assets. However, the
Managing Partner may cause the Partnership to either (i) contest
in good faith the validity of any such taxes or assessments or
(ii) pay such taxes and assessments under protest. In the event
that the Managing Partner causes the Partnership to contest in
good faith such taxes and assessments, the Managing Partner shall
not be obligated to cause the Partnership to pay the same until a
final determination is reached that such taxes or assessments are
valid and constitute an obligation of the Partnership.
10.06 Tax Matters Partner. The Managing Partner shall be the "tax
matters partner," as that term is defined in Code Section
6231(a)(7) (the "Tax Matters Partner") with all of the rights,
duties, and powers provided for in Code Sections 6221 through
6232 inclusive; provided, however, that, in the exercise of such
powers, the Tax Matters Partner shall be subject to the overall
direction of the Partners and the provisions of Sections 10.05,
10.06 and 10.07. The Tax Matters Partner, as an authorized
representative of the Partnership, shall have the right to retain
and to pay the fees and expenses of counsel and other advisors
selected by the Tax Matters Partner. All reasonable expenses of
the Tax Matters Partner and other reasonable fees and expenses of
the Partnership incurred in connection with the defense of any
claims made by the Internal Revenue Service shall be borne by the
Partnership.
10.07 Duties of the Tax Matters Partner. The Tax Matters Partner
shall cooperate with the other Partners and, for other than
routine correspondence and communications, shall promptly provide
the other Partners with copies of notices or other materials
from, and inform the other Partners of discussions engaged in
with, the Internal Revenue Service and shall provide the other
Partners with notice of all scheduled administrative proceedings,
including meetings with Internal Revenue Service agents,
technical advice conferences and appellate hearings, as soon as
reasonably possible after receiving notice of the scheduling of
such proceedings. The Tax Matters Partner shall not agree to
extend the period of limitations for assessments, file a petition
or complaint in any court, file a request for an administrative
adjustment of Partnership items after any return has been filed,
or enter into any settlement agreement with the Internal Revenue
Service or Department of Treasury with respect to Partnership
items of income, gain, loss, deduction or credit except with the
consent of the IMC Partner (or, with respect to the IMC GPCo
Liquidation Period, Operations and IMC GPCo) and the FRP Partner,
which consent shall not be unreasonably withheld. The Tax Matters
Partner may request extensions to file any tax return or
statement without the consent of, but shall so inform, the IMC
Partner (or, with respect to the IMC GPCo Liquidation Period,
Operations and IMC GPCo) and the FRP Partner. The provisions of
this Agreement regarding the Partnership's tax returns shall
survive the termination of the Partnership and the transfer of
any Partner's Partnership Interest and shall remain in effect for
the period of time necessary to resolve any and all matters
regarding the Federal, state and local income taxation of the
Partnership and the items of Partnership income, gain, loss,
deduction and credit.
10.08. Partnership Status; Elections.
(a) The Partners acknowledge that this Agreement creates a
partnership for Federal and state income tax purposes and hereby
agree not to elect to be excluded from the application of
Subchapter K of Chapter 1 of Subtitle A of the Code or any
similar state statute.
(b) The Managing Partner shall cause the Partnership to
file an election under Section 754 of the Code and the Treasury
Regulations thereunder to adjust the basis of the Partnership
assets under Sections 734(b) or 743(b) of the Code and shall file
a corresponding election under the applicable sections of state
and local law. The Managing Partner shall also cause the
Partnership to take or to elect to take deductions under the most
accelerated method available to the Partnership, unless both the
IMC Partner (or, with respect to the IMC GPCo Liquidation Period,
Operations and IMC GPCo) and the FRP Partner agree otherwise. The
Partnership shall make any other elections under the United
States income tax laws and regulations and any similar state
statutes as determined to be appropriate by the Managing Partner.
10.09. Tax Reporting.
(a) The Managing Partner shall provide the Non-Operating Partner
with any tax information and data reasonably requested by the
Non-Operating Partner, including information and data requested
for the purpose of allowing the Non-Operating Partner to (i)
allocate its Partnership tax items on a property-by-property
basis; and (ii) allocate FRP's portion of Partnership tax items
to any partner of FRP that purchases or sells its interest in FRP
during the year, pursuant to Section 706 of the Code and FRP's
accounting conventions for sales and purchases of FRP interests.
For purposes of this Section 10.09, the term "property" shall
mean, with respect to depletable assets, property as defined in
Section 613 of the Code and the Treasury Regulations thereunder.
(b) Except as otherwise provided in this Agreement, the
information and data requested pursuant to this Section 10.09
shall be provided to Non-Operating Partner on the following
schedule:
Period in Which Item Accrued Reporting Deadline
Fiscal Year ending June 30 October 25
Six Months ending December 31 January 25
(c) The information and data provided under this Section 10.09
shall be prepared with the same degree of completion and accuracy
as is required for information and data filed with a Federal
income tax return, shall be prepared on an accrual basis and
shall include any and all items of Partnership income, gain,
losses, deductions and any other items or information as may be
reasonably needed by the Non-Operating Partner or any of its
Affiliates. Such information and data shall include, but shall
not be limited to, the total amount of each of the tax items
listed in the attached Schedule Y and each Partner's allocable
share of each item.
(d) In the event of any amendment to the Code or the
issuance of any Treasury Regulation or pronouncement that affects
any of the Non-Operating Partner's Affiliate's reporting
requirements with respect to the partners, if applicable, of any
of the Affiliates of the Non-Operating Partner, the Partnership
shall furnish to the Non-Operating Partner any additional
information and data that is reasonably necessary for any of the
Non-Operating Partner's Affiliates to comply with such reporting
requirements.
(e) In the event that any information is needed from the
Non-Operating Partner in order for the Tax Matters Partner to
complete the required federal and state tax return, such
information will be provided by the Non-Operating Partner by
September 15.
10.10. Tax Oversight.
(a) The Non-Operating Partner shall have the right to
request any and all information and data from the Managing
Partner regarding the calculation of the allocations pursuant to
Article V and regarding the tax matters of the Partnership,
including the classification, realization and recognition of
income, gain, losses, deductions and other Partnership items, and
the Operating Partner shall provide such information and data as
soon as practicable. Each of the IMC Partner (or, with respect to
the IMC GPCo Liquidation Period, Operations and IMC GPCo) and the
FRP Partner, at its sole cost, shall also have the right to
inspect and copy any and all books and records of the Partnership
relating to the calculation and allocation of Partnership tax
items, including the original source documents and tax work
papers of the Partnership, at such times as the IMC Partner (or,
with respect to the IMC GPCo Liquidation Period, Operations or
IMC GPCo) or the FRP Partner, as the case may be, may reasonably
request. (b) The Managing Partner shall notify the Non-Operating
Partner as promptly as practicable of the tax treatment of any
significant tax item of the Partnership. The Non-Operating
Partner shall have the right to confer with the Managing Partner
regarding the tax matters of the Partnership and the calculation
of the allocations pursuant to Article V on a yearly basis or on
a more frequent basis as requested by the Non-Operating Partner.
(c) In the event of a disagreement between the Partners regarding
the treatment of a Partnership tax item (other than items as to
which the Partners approve a treatment), the Partnership shall
not take any position for Federal or state income tax purposes
that is not supported by substantial authority, as that term is
defined for purposes of Code Section 6662(d)(2)(B)(i). The
Partners reserve the right to file their separate income tax
returns in a manner inconsistent with the Partnership's Federal
income tax return.
ARTICLE XI.
Term
11.01 Term. The term of the Partnership commenced on July 1,
1993 and shall continue in existence until June 30, 2076, unless
extended by written agreement of each Partner or unless earlier
terminated pursuant to the terms of this Agreement.
11.02 Purchase Option Upon Scheduled Expiration of the Term.
Either the IMC Partner or the FRP Partner may give the other
irrevocable written notice not less than one hundred eighty (180)
days prior to the scheduled expiration of the term of the
Partnership pursuant to Section 11.01 of its election to exercise
the purchase option set forth in this Section 11.02. If only one
of the IMC Partner or the FRP Partner gives the notice referred
to in the preceding sentence (the "Buying Partner"), the Buying
Partner shall have the right and the obligation to purchase all,
but not less than all, of such other Non-Managing Partner's
Partnership Interest and the Managing Partner's Partnership
Interest at the aggregate Transfer Price therefor. If the Buying
Partner and such other Non-Managing Partner cannot agree upon a
Transfer Price within sixty (60) days after the notice referred
to in the first sentence of this Section 11.02, either the IMC
Partner or the FRP Partner may, by notice to the other, invoke
the Appraisal Procedure. If the Appraisal Procedure is required
to determine the Transfer Price, the fees and expenses of such
Appraisal Procedure shall be shared equally by the IMC Partner
and the FRP Partner. The closing of such sale shall take place
upon the date the term of the Partnership is scheduled to expire
pursuant to Section 11.01. If both the IMC Partner and the FRP
Partner give the notice referred to in the first sentence of this
Section 11.02, then the term of the Partnership under Section
11.01 shall automatically be extended for an additional period of
twenty (20) years (or such other time period as the IMC Partner
and the FRP Partner may mutually agree) on the terms and
conditions set forth herein (or on such other terms and
conditions as the IMC Partner and the FRP Partner may mutually
agree). If neither the IMC Partner nor the FRP Partner give the
notice referred to in the first sentence of this Section 11.02,
then, upon the expiration of the term of the Partnership, the
affairs of the Partnership shall be wound up in accordance with
the provisions of Article XII hereof.
ARTICLE XII.
Dissolution and Winding-Up
12.01 Dissolution. The Partnership shall be dissolved upon the
first to occur of the following events (each, a "Dissolution
Event"):
(a) The Bankruptcy of any Partner, provided, however, that to the
fullest extent permitted by applicable law, the Partnership shall
be reconstituted and continued if all of the Partners (other than
a Bankrupt Partner or Partners) elect to so reconstitute and
continue the Partnership, in which event the Partnership shall
continue as so reconstituted with all of the Partners (including
the Bankrupt Partner or Partners) remaining as partners in the
Partnership;
(b) The election by all Partners to dissolve the Partnership;
(c) The expiration of the term of the Partnership (as such term
may be adjusted pursuant to Section 11.01 or 11.02), except if
one Partner acquires directly or indirectly the Partnership
Interest of the other Partners pursuant to the provisions of
Section 11.02;
(d) The occurrence of any event that makes it unlawful for the
business of the Partnership to be carried on or for the Partners
to carry it on in partnership;
(e) The entry of a decree of judicial dissolution;
(f) The written determination by the Policy Committee (or if the
Policy Committee fails to agree, if either the IMC Partner or the
FRP Partner reasonably and in good faith determines) that the
Partnership cannot be operated in a manner that is consistent
with achieving the Partnership's business purpose other than in a
manner that is inconsistent with preserving the partnership
status of the FRP Partner and FRP for Federal income tax purposes
and the election by either the IMC Partner or the FRP Partner to
dissolve the Partnership, after negotiating in good faith with
the other Partners, in accordance with Section 9.05(c); or
(g) Subject to Section 12.11, the occurrence of any other event
that, absent an agreement to the contrary, causes a dissolution
of the Partnership under the Act; provided that, to the fullest
extent permitted by law, if a dissolution of the Partnership is
caused by any event described in Section 12.01(g), unless one of
the Partners is Bankrupt, (i) the Partners (other than any
Partner whose act has resulted in such dissolution) may elect to
reconstitute the Partnership within four (4) months of the date
of the event giving rise to the dissolution hereunder and if the
Partners do so elect, the Partnership shall continue as if no
dissolution had occurred, in which event the Partnership shall
continue as so reconstituted with all of the Partners (including
any Partner the act of which has resulted in such dissolution)
remaining as partners in the Partnership, or (ii) if the
Partnership is not reconstituted as provided above, and such
dissolution is caused by the act of any Partner (the "Withdrawing
Partner"), then the IMC Partner, if it is not the Withdrawing
Partner or the FRP Partner, if it is not the Withdrawing Partner
(in either such case, the "Non-Withdrawing Partner") may, by
written notice to the Withdrawing Partner, elect (A) to purchase
the Partnership Interest of the Withdrawing Partner, or (B) to
admit one or more new partners (the "New Partners") to the
Partnership, who shall purchase the Partnership Interest of the
Withdrawing Partner or (C) to cause the Partnership's affairs to
be wound up in accordance with Section 12.02. The Withdrawing
Partner (1) shall have only those rights and receive only those
payments that are expressly provided for herein, (2) shall be
liable to the Partnership, the Non-Withdrawing Partner, the
Managing Partner and any New Partners for all losses, costs,
fees, expenses and damages suffered by the Partnership, such
Non-Withdrawing Partner, the Managing Partner or any New Partners
as a result of such dissolution, (3) shall remain liable to the
Partnership, such Non-Withdrawing Partner, the Managing Partner
and any New Partners for any debts, liabilities or other
obligations of the Withdrawing Partner to the Partnership, such
Non-Withdrawing Partner, the Managing Partner or any New
Partners, and (4) shall remain liable to the Partnership, such
Non-Withdrawing Partner, the Managing Partner and any New
Partners for its contribution obligation pursuant to Section
8.02. The purchase price to be paid to the Withdrawing Partner
(by the Non-Withdrawing Partner or any New Partners) in any sale
and purchase of the Withdrawing Partner's Partnership Interest
pursuant to this Section 12.01, shall be (x) the Transfer Price,
determined (unless otherwise agreed) in accordance with the
Appraisal Procedure (which Appraisal Procedure shall be at the
expense of the Withdrawing Partner), reduced by (y) the amount of
any losses, costs, fees, expenses or damages suffered by the
Partnership, the Non- Withdrawing Partner, the Managing Partner
or any New Partners as a result of such dissolution, and shall be
payable to the Withdrawing Partner in five equal annual
installments, without interest, commencing on the date of the
transfer of the Partnership Interest of the Withdrawing Partner
(which shall be the tenth (10th) business day following the
determination of the Transfer Price). In any winding up pursuant
to clause (ii)(C) above, the amount otherwise distributable to
the Withdrawing Partner pursuant to the following provisions of
Article XII shall be reduced by the amount of any losses, costs,
fees, expenses or damages suffered by the Partnership, the
Non-Withdrawing Partner, the Managing Partner or any New Partners
as a result of such dissolution.
12.02 Winding-Up. Upon dissolution of the Partnership, and the
failure by one or more of the Partners or any Affiliate or
Affiliates of the Partners, to reconstitute and continue the
Partnership (pursuant to Section 11.02 or otherwise) within four
(4) months after such dissolution and if the Non-Withdrawing
Partner has not made any election pursuant to Section 12.01, the
Managing Partner shall (unless the event giving rise to the
dissolution was the Bankruptcy of the Managing Partner, in which
case the Non-Managing Partner with the largest Capital Interest
at the time of such dissolution shall) wind up the affairs of the
Partnership in accordance with the Act and, to the extent
permitted by applicable law, shall settle accounts between the
Partners as specified in this Article XII. The Partner charged
with winding up the affairs of the Partnership and settling
accounts among the Partners hereunder shall be referred to as the
"Liquidating Partner".
12.03 Accounting on Dissolution. If the Partnership is not
reconstituted or continued in accordance with the terms hereof
following a dissolution, then on the date (the "Accounting Date")
which is four (4) months following the date of dissolution, a
proper accounting shall be made of the Partnership assets,
liabilities and operations, from the date of the last previous
accounting to the Accounting Date. Any items of income, gain,
credit, loss, expense and other deductions which are realized
subsequent to the date of the last previous accounting to the
Accounting Date shall be allocated in accordance with Article V
and proper adjustments shall be made to the Capital Account of
each Partner.
12.04 Accounting; Allocations of Residual Net Profits and
Residual Net Loss After Dissolutions.
(a) Any items of gain or loss that are realized from Partnership
operations or from sales of Partnership assets subsequent to the
Accounting Date and before the date of liquidation shall be
allocated as provided in Article V.
(b) In addition to the adjustments to the Partner's Capital
Accounts described above, if any of the Partnership's properties
are to be distributed in kind rather than sold, such properties
that are to be distributed in kind shall be valued by the
Partners and a simulated aggregate gain (if any) or loss (if any)
for those properties shall be allocated to the Partners' Capital
Accounts as that simulated aggregate gain (or loss) would have
been allocated under Article V if such properties had been sold
for a cash price equal to each asset's fair market value on the
Accounting Date.
12.05 Application of Article V in Year of Dissolution. In the
year in which the Partnership dissolves, Article V shall be
applied with regard to the Capital Interests in effect for the
year of the dissolution, rather than the Capital Interests in
effect for the following year.
12.06 Conversion of Assets to Cash.
(a) If the Partnership is not reconstituted, or the Partnership
Interest of the Withdrawing Partner is not purchased in
accordance with the terms hereof, then commencing with the date
that is four (4) months after the date of dissolution, unless
arrangements satisfactory to all Partners are otherwise made,
sufficient assets of the Partnership will be converted into cash
to permit the Partnership to pay all its liabilities other than
long-term debts which (i) are secured by Partnership assets from
which the projected net income is sufficient to pay installments
of principal and interest on such debts as they become due and
(ii) contain terms specifying that neither the dissolution of the
Partnership nor the distribution of such property that is subject
to and secured by such debts constitutes a default or causes the
acceleration of the maturity of such indebtedness ("Approved
Debts").
(b) Notwithstanding the provisions of Sections 12.07 and 12.08
regarding the method and timing of the liquidation of the assets
of the Partnership, but subject to the order of priorities set
forth therein, if on commencement of the winding up process in
accordance with Section 12.02, the Partners determine that an
immediate sale of part or all of the Partnership's assets would
be impractical or would cause undue loss to the Partners, the
Partners may defer for a reasonable time the liquidation of any
assets except those necessary to satisfy the liabilities of the
Partnership.
(c) In the event that Partnership assets are distributed in kind
pursuant to Section 12.06(b), the Partners shall be consulted to
determine the most tax-efficient manner to make such
distribution, consistent with the liquidation priorities of
Section 12.07.
12.07 Distributions in Liquidation. As soon as the actions
required by Sections 12.03, 12.04, 12.05 and 12.06 have been
completed, the Liquidating Partner shall cause the cash and
assets of the Partnership to be distributed in the following
order:
(a) To creditors of the Partnership (other than Partners) in
payment of all liabilities of the Partnership (other than
Approved Debts) in the order of priority as provided by law. If
any liability is contingent or uncertain in amount, a reserve
equal to the maximum amount to which the Partnership could
reasonably be held liable will be established. Upon the payment
or other discharge of such liability, the amount remaining in
such reserve not needed, if any, will be distributed in
accordance with the remaining provisions of this Section 12.07.
(b) To the Partners in payment of all loans (including, without
limitation, any Partner Loans) and any interest thereon in
accordance with the amount owing to each Partner.
(c) To each Partner in accordance with the positive balance in
its Capital Account.
(d) To the Partners in accordance with their respective Capital
Interests in effect for the year of the liquidation.
(e) Notwithstanding the foregoing provisions of this Section
12.07, any distribution which, but for this Section 12.07(e)
would be payable to a Partner whose actions in violation of this
Agreement (other than any breach of Section 9.05(a)) caused the
dissolution of the Partnership shall be reduced by the amount of
losses, costs, fees, expenses and damages suffered by the
Partnership or any Partner (other than the Partner whose actions
caused a dissolution) as a result of such dissolution. 12.08
Compliance with Treasury Regulations. In the event that the
Partnership or any Partner's Partnership Interest is "liquidated"
within the meaning of Treasury Regulation Section
1.704-1(b)(2)(ii)(g), liquidating distributions shall be made,
pursuant to this Agreement, in accordance with the Partners'
positive Capital Account balances, as required by Treasury
Regulation Section 1.704(b)(2)(b)(2), by the end of the taxable
year or, if later, within ninety (90) days after the date of such
liquidation. In determining any Partner's Capital Account
balance pursuant to this Section 12.08, any item of gain, loss,
deduction, and credit that has not previously been allocated
pursuant to Article V shall be so allocated.
12.09 Deficit Capital Account Restoration Obligation. At the end
of the period described in Sections 12.06 and 12.08 (and after
allocation of all Partnership items pursuant to this Article
XII), if any Partner has a negative balance in its Capital
Account, such negative balance shall be a debt from that Partner
to the Partnership, and that Partner shall be obligated to make
additional contributions to the Partnership to restore that
Partner's Capital Account for income tax purposes to zero (0) at
such time. Any amount contributed to the Partnership pursuant to
this Section 12.09 shall be distributed according to Section
12.07.
12.10 Section 708 Termination. Notwithstanding any other
provision of this Article XII, in the event that the Partnership
is liquidated within the meaning of Section 1.704-1(b)(2)(ii)(g)
of the Treasury Regulations, but no Dissolution Event has
occurred, the assets of the Partnership shall not be liquidated,
the Partnership's liabilities shall not be paid or discharged,
and the Partnership's affairs shall not be wound up.
12.11 Continuation of the Partnership. Unless required by
applicable law, no sale, transfer, assignment or other
disposition by either Partner of all or any part of its
Partnership Interest in accordance with the terms hereof
(including, without limitation, the transfers of the Partnership
Interest of IMC GPCo to Operations in connection with the IMC
GPCo Liquidation and, in the event that FTX and FRP choose to
cause the merger, liquidation or dissolution of the FRP Partner
(or the transfer by the FRP Partner of its Partnership Interests
to FRP or an Affiliate of FRP) in accordance with the terms of
the Amendment, Waiver and Consent Agreement, transfers of the
Partnership Interest of the FRP Partner to FRP or an Affiliate of
FRP in connection with such merger, liquidation or dissolution of
the FRP Partner) shall cause a dissolution of the Partnership,
and, if such a dissolution is required under applicable law
(including, without limitation, as a result of the transfers of
the Partnership Interest of IMC GPCo to Operations in connection
with the IMC GPCo Liquidation or, in the event that FTX and FRP
choose to cause the merger, liquidation or dissolution of the FRP
Partner (or the transfer by the FRP Partner of its Partnership
Interests to FRP or an Affiliate of FRP) in accordance with the
terms of the Amendment, Waiver and Consent Agreement, as a result
of the transfers of the Partnership Interest of the FRP Partner
to FRP or an Affiliate of FRP in connection with such merger,
liquidation or dissolution of the FRP Partner), immediately upon
such sale, transfer, assignment or other disposition by either
Partner, the Partnership shall be reconstituted as a general
partnership, governed by this Partnership Agreement, among the
transferee, purchaser or assignee and the remaining Partner or
Partners.
12.12 Waiver of Certain Rights. Unless otherwise agreed in
writing by the Partners, to the extent permitted by Delaware law,
each Partner hereby waives (i) all rights it may have under
Delaware law to cause the dissolution of the Partnership (other
than dissolution by operation of law as a result of a transfer of
its Partnership Interest as expressly permitted hereby), (ii) to
the extent a dissolution occurs by operation of law, the right to
cause the Partnership to wind up its affairs and make
distributions to the Partners pursuant to Article XII upon the
occurrence of such dissolution and (iii) all rights to partition
with respect to real and personal property, provided that this
clause shall not apply to assets that have previously been
distributed by the Partnership to the Partners.
ARTICLE XIII.
Miscellaneous Provisions
13.01 Force Majeure. If the Managing Partner is rendered unable,
wholly or in part, by force majeure to carry out its obligations
hereunder such obligations insofar as they are affected by the
force majeure shall be suspended during but no longer than the
continuance of the force majeure. In such event, the Managing
Partner shall use all commercially reasonable efforts to remove
the force majeure as promptly as practicable. The term "force
majeure" shall mean but shall not be limited to: acts of God or
the public enemy; expropriation or confiscation of facilities;
compliance with any order or request of any governmental
authority or person purporting to act therefor; acts of declared
or undeclared war; public disorders, rebellion, or sabotage;
revolution; earthquake; fire; flood; riot; labor difficulties or
shortages; labor strikes whether direct or indirect; action or
inaction of any governmental agencies; delays in or shortages of
transportation; inability to obtain necessary materials or
equipment; inability to obtain necessary permits or approvals due
to existing or future laws, rules or regulations of any
governmental authority; or any cause whether or not of the same
class or kind as those specifically above named not within the
control of the Managing Partner and which, by the exercise of all
commercially reasonable efforts the Managing Partner is unable to
prevent. The requirement that the Managing Partner use all
commercially reasonable efforts to remedy any force majeure as
promptly as practicable shall not require the settlement of
strikes, lockouts, or other labor difficulties by the Managing
Partner contrary to its wishes or the challenging of the validity
of any governmental law, regulation, order or request. In the
event of any occurrence of force majeure, the Managing Partner
immediately shall notify the Policy Committee of such occurrence.
13.02 Limitation of Liability of Partners.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, except as provided in Section 7.06 or Section
13.02(b), no Partner (which term, for purposes of this Section
13.02(a), shall, with respect to the IMC GPCo Liquidation Period
(and all other periods during which Operations or IMC GPCo is a
Partner), refer to each of Operations and IMC GPCo, severally and
not jointly) shall be liable to the Partnership, any other
Partner or any of their respective Related Persons for any loss
or damage of any nature incurred or suffered by the Partnership,
any other Partner or any of their respective Related Persons
except loss or damage to the Partnership, any other Partner or
any of their respective Related Persons caused by such Partner's
gross negligence or wilful misconduct hereunder.
(b) The Managing Partner shall be liable to the Partnership and
the other Partners, solely as a result of such Partners' status
as Partners, only for all damages, including lost profits, which
are proximately caused by the Managing Partner's gross
negligence, wilful misconduct, wilful breach of this Agreement or
failure to follow a specific instruction from the Policy
Committee adopted in accordance with the terms of this Agreement,
but shall not be so liable for any further lost profits or other
damages which are the further consequences of such lost profits
or other damages that were proximately caused. For purposes of
this Agreement, an ignoring of the terms of this Agreement shall
be deemed a wilful breach; provided that the Managing Partner
shall not be liable for ignoring the term of this Agreement
requiring the Managing Partner to act as an ordinary prudent and
reasonable manager if the Managing Partner acted in good faith
and in the belief (which belief was reasonable) that its actions
were in accordance with all of the terms of this Agreement.
13.03 Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns; provided that no assignment of any
Partnership Interest, or portion thereof, shall be effective
unless made in accordance with the terms of this Agreement. The
transfers of the Partnership Interest of IMC GPCo to Operations
in connection with the IMC GPCo Liquidation, the FRP GPCo/FCC/FTX
Mergers and, in the event that FTX and FRP choose to cause the
merger, liquidation or dissolution of the FRP Partner (or the
transfer by the FRP Partner of its Partnership Interests to FRP
or an Affiliate of FRP) in accordance with the terms of the
Amendment, Waiver and Consent Agreement, transfers of the
Partnership Interest of the FRP Partner to FRP or an Affiliate of
FRP in connection with such merger, liquidation or dissolution of
the FRP Partner shall each be deemed to be made in accordance
with the terms of this Agreement. The sale, transfer or
assignment of a Partnership Interest, or portion thereof, in
accordance with the terms of this Agreement (including, without
limitation, the transfers of the Partnership Interest of IMC GPCo
to Operations in connection with the IMC GPCo Liquidation and, in
the event that FTX and FRP choose to cause the merger,
liquidation or dissolution of the FRP Partner (or the transfer by
the FRP Partner of its Partnership Interests to FRP or an
Affiliate of FRP) in accordance with the terms of the Amendment,
Waiver and Consent Agreement, transfers of the Partnership
Interest of the FRP Partner to FRP or an Affiliate of FRP in
connection with such merger, liquidation or dissolution of the
FRP Partner) shall result in the transfer to the purchaser,
transferee or assignee of a Partnership Interest, or portion
thereof, that is equal to the sold, transferred or assigned
Partnership Interest, or the sold, transferred or assigned
portion thereof, of the seller, transferor or assignor and shall
cause the purchaser, transferee or assignee to be subject to and
to incur all obligations pertaining to the sold, transferred or
assigned Partnership Interest, or the sold, transferred or
assigned portion thereof.
13.04 Notices. All communications, notices and consents provided
for herein shall be in writing and be given in person (or air
freight delivery) or by means of telecopy (with request for
assurance of receipt in a manner typical with respect to
communications of that type) or by mail, and shall become
effective (x) on delivery if given in person or by air freight
delivery, (y) on the date of transmission if sent by telecopy or
(z) three business days after being deposited in the mails, with
proper postage for first-class registered or certified air mail
prepaid. Notices shall be addressed as follows:
(i) if to the IMC Partner at:
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Corporate Secretary
(ii) if to Operations at:
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Corporate Secretary
(iii) if to IMC GPCo at:
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Corporate Secretary
(iv) if to the Managing Partner at:
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Corporate Secretary
and (v) if to the FRP Partner at:
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: General Counsel
or at such other address as either party hereto may from time to
time designate by notice duly given in accordance with the
provisions of this Section to the other party hereto.
13.05 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware
without regard to the conflicts of law rules of such state.
13.06 Choice of Forum. All suits, actions or proceedings arising
out of or relating to this Agreement shall be brought in a state
or federal court located in the State of Delaware, which courts
shall be an appropriate forum for all such suits, actions or
proceedings. Each Partner hereby waives any objection which it
may now or hereafter have to the laying of venue in any such
court of any such suit, action or proceeding.
13.07 Consent to Jurisdiction. Each Partner hereby irrevocably
submits to the jurisdiction of any state or federal court located
in the State of Delaware in any such suit, action or proceeding
referred to in Section 13.06 above. IMC GPCo hereby designates
and appoints The Corporation Trust Company, with an office on the
date hereof at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or
any successor thereof, as its authorized agent to accept and
acknowledge on its behalf service of any and all process which
may be served in any such suit, action or proceeding in any state
or federal court in the State of Delaware and agrees that service
of process upon The Corporation Trust Company, or any successor
thereof, shall be deemed in every respect effective service of
process upon IMC GPCo in any such suit, action or proceeding.
Operations hereby designates and appoints The Corporation Trust
Company, with an office on the date hereof at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, or any successor thereof, as its
authorized agent to accept and acknowledge on its behalf service
of any and all process which may be served in any such suit,
action or proceeding in any state or federal court in the State
of Delaware and agrees that service of process upon The
Corporation Trust Company, or any successor thereof, shall be
deemed in every respect effective service of process upon
Operations in any such suit, action or proceeding. The FRP
Partner hereby designates and appoints The Corporation Trust
Company, with an office on the date hereof at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, or any successor thereof, as its
authorized agent to accept and acknowledge on its behalf service
of any and all process which may be served in any such suit,
action or proceeding in any state or federal court in the State
of Delaware and agrees that service of process upon The
Corporation Trust Company, or any successor thereof, shall be
deemed in every respect effective service of process upon the FRP
Partner in any such suit, action or proceeding. The Managing
Partner hereby designates and appoints The Corporation Trust
Company, with an office on the date hereof at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, or any successor thereof, as its
authorized agent to accept and acknowledge on its behalf service
of any and all process which may be served in any such suit,
action or proceeding in any state or federal court in the State
of Delaware and agrees that service of process upon The
Corporation Trust Company, or any successor thereof, shall be
deemed in every respect effective service of process upon the
Managing Partner in any such suit, action or proceeding. Said
designation and appointment by each of IMC GPCo, Operations, the
FRP Partner and the Managing Partner shall be irrevocable during
the term of this Agreement, and each party shall pay all costs
and expenses of its respective designation and appointment as and
when due and payable.
13.08 Waiver of Jury Trial. EACH PARTNER HEREBY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH SUIT,
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
13.09 Entire Agreement; Amendments. This Agreement (including the
exhibits hereto) together with the other Transaction Agreements
(including any exhibits or schedules thereto), the Amendment,
Waiver and Consent Agreement and a certain letter agreement dated
as of July 1, 1993 relating to certain tax matters between
Operations and FRP embody the entire agreement and understanding
between the parties with respect to the subject matter hereof and
thereof, and supersede any agreements, representations,
warranties or understandings, oral or written, between the
parties with respect to the subject matter of this Agreement and
the other Transaction Agreements entered into prior to the
respective dates hereof and thereof. This Agreement may be
amended or modified (including, without limitation, to admit a
new "Partner" or "Partners" (other than (i) any New Partners or
any new "Partner" admitted to the Partnership pursuant to a
transfer of the Partnership Interest (or a portion thereof) of a
Partner pursuant to Section 7.02 or Section 7.04) or (ii) the
admission of FRP or an Affiliate of FRP as a new Partner as a
result of the election of FTX and FRP to merge, liquidate or
dissolve the FRP Partner (or transfer its Partnership Interests)
in accordance with the terms of the Amendment, Waiver and Consent
Agreement) only by an instrument in writing executed by all of
the Partners.
13.10 Execution in Counterparts. This Agreement may be signed
incounterparts. Any single counterpart or set of counterparts
signed, in either case, by all the parties hereto shall
constitute a full and original agreement for all purposes.
13.11 Remedies and Waiver. No failure or delay in exercising any
right hereunder shall operate as a waiver of or impair any such
right. No single or partial exercise of any such right shall
preclude any other or further exercise thereof or the exercise of
any other right. Any waiver must be given in writing to be
effective, and no waiver shall be deemed a waiver of any other
right.
13.12 Headings. The headings of Articles and Sections have been
included herein for convenience only and shall not constitute a
part of this Agreement for any other purpose.
13.13 Third Party Beneficiaries. This Partnership Agreement is
solely for the benefit of the parties hereto and the Partners'
respective Related Persons to the extent set forth in Section
8.01, and no provision of this Agreement shall be deemed to
confer upon third parties, other than the Partners' respective
Related Persons to the extent set forth in Section 8.01, any
remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this
Agreement.
13.14 Further Assurances. Each Partner agrees 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 the Transaction Agreements and to
vest in the Partnership good title to the Assets, subject only to
Permitted Liens.
13.15 Power of Attorney. Each Partner hereby constitutes and
reappoints, effective as of May 26, 1995, the Managing Partner
and its successors and assigns as the true and lawful attorney of
such Partner with full power of substitution in the name of the
Partnership or in the name of such Partner, but for the benefit
of the Partnership (i) to collect for the account of the
Partnership any Asset and (ii) to institute and prosecute all
proceedings on behalf of the Partnership which the Managing
Partner may in its commercially reasonable discretion deem
necessary or appropriate in order to assert or enforce any right,
title or interest in, to or under the Assets, and to defend or
compromise any and all actions, suits or proceedings in respect
of such Assets. The Partnership shall be entitled to retain for
its own account any amounts collected pursuant to the foregoing
powers, including any amounts payable as interest in respect
thereof.
13.16 Public Announcements. Except as may be required by
applicable law or any listing agreement with any national
securities exchange, neither the Partnership nor any Partner nor
any Affiliate thereof will issue any press release or make any
public statement with respect to the business of the Partnership
or its financial performance or condition without the prior
written consent of the Partners unless either (i) a draft of the
proposed release has been provided to each Partner at least
twenty-four (24) hours prior to its proposed release in order to
permit the Partners to comment thereon or (ii) such press release
or other public statement contains factual information (or
discussion or analysis of or comment based upon such factual
information) previously provided to such Person by the Managing
Partner; provided that none of the Partners nor any of their
Affiliates will present projections or forward-looking
information that is attributed to the Partnership or any other
Partner or its Affiliates without the prior written consent of
such other Partners.
* * * * *
IN WITNESS WHEREOF, the parties have signed this Amended and
Restated Partnership Agreement as of the 26th day of May, 1995.
IMC-Agrico GP Company
By: XXXXXX X. XXXXXXXXX
Name Printed: Xxxxxx X. Xxxxxxxxx
Title: Vice President
Agrico, Limited Partnership
By: Agrico, Inc., its
general partner
By:
Name Printed:
Title:
IMC-Agrico MP, Inc.
By: XXXXXX X. XXXXXXXXX
Name Printed: Xxxxxx X. Xxxxxxxxx
Title: Vice President
IMC Global Operations Inc.
(formerly IMC Fertilizer, Inc.)
By: XXXXX XXXX
Name Printed: Xxxxx Xxxx
Title: Vice President
IN WITNESS WHEREOF, the parties have signed this Amended and
Restated Partnership Agreement as of the 26th day of May, 1995.
IMC-Agrico GP Company
By:
Name Printed:
Title:
Agrico, Limited Partnership
By: Agrico, Inc., its
general partner
By: XXXXXXX X. XXXXXXXX
Name Printed: Xxxxxxx X. Xxxxxxxx
Title: Vice President
IMC-Agrico MP, Inc.
By:
Name Printed:
Title:
IMC Global Operations Inc.
(formerly IMC Fertilizer, Inc.)
By:
Name Printed:
Title:
Schedule X
B - (N x T)
---------------
Target Cash = C - N
B = The capital account balance of the respective Partner at the
beginning of the June 30 fiscal year, adjusted for all
adjustments to the Partner's capital account for the current year
except for adjustments required as a result of (i) allocations
pursuant to Section 5.01; (ii) the special allocations pursuant
to Section 5.02(c) and 5.02(d); and (iii) all cash distributions
to the Partner for the current fiscal year made pursuant to the
Partner's Current Interest for the year.
N = The Capital Interest for the following year for the
respective Partner. In determining any allocations to be made
pursuant to Article V and Article XII for any period other than a
period ending on the last day of the Partnership's fiscal year,
however, the Capital Interest for the current year for the
respective Partner shall be used.
T = The sum of the capital account balances of the Partners at
the beginning of the June 30 fiscal year, adjusted for all
adjustments to the Partners' capital accounts for the current
year except for adjustments required as a result of (i)
allocations pursuant to Section 5.01; (ii) the special
allocations pursuant to Section 5.02(c) and 5.02(d); and (iii)
all cash distributions to the Partners for the current fiscal
year made pursuant to the Partners' Current Interest for the
year.
C = The Current Interest of the respective Partner for the
applicable fiscal year.
SCHEDULE Y
ITEM OF TAX INFORMATION PERIOD(S)
1. Ordinary income excluding July 1 - December 31
depreciation and depletion (estimated July 1 - June 30
where appropriate), including (final)
workpapers supporting allocations
between partners
2. Depletable gross revenues, statutory July 1 - December 31
depletion expenses (excluding July 1 - June 30
depreciation) for purposes of Code (final)
Section 613, production volumes, and
remaining reserves by property (taking
into account special tax allocations)
3. Depreciation and amortization expense, July 1 - December 31
by tax property for mining assets and by July 1 - June 30
state for other assets, as follows: (final)
---Federal
---AMT
---ACE
4. Depreciable and amortizable asset July 1 - December 31
additions and retirements, by tax July 1 - June 30
property for mining assets and by state (final)
for other assets
5. Leasehold cost basis and related July 1 - December 31
additions, retirements, and abandonments July 1 - June 30
by tax property (final)
6. Outstanding balance of recourse and Monthly (as of each
nonrecourse debt month end)
July 31 - December 31
January 31 - June 30
7. Interest and dividend income July 1 - December 31
July 1 - June 30
(final)
8. Code Section 1231 gains or losses, and July 1 - December 31
ordinary income recapture July 1 - June 30
(final)
9. Reconciliation of book to
taxable income July 1 - December 31
July 1 - June 30
(final)
10. Partnership gross
income consisting of July 1 - December 31
qualifying income under Code Section January 1 - June 30
7704 (d) as well as nonqualifying income
11. Fair market value evaluation by Calendar year
property
ITEM OF TAX INFORMATION PERIOD(S)
12. Additional state tax information July 1 - June 30
A. Sales by state based on the place (final)
of origin and place of shipping
destination
B. Inventory by state
C. Miscellaneous income (i.e.,
interest, dividends, gains and
losses, rental income and other
miscellaneous income) by state
D. Rent expense
E. Book original cost of depreciable
and depletable assets by state,
considering the effect of
additions and retirements
F. Book basis information for the
Louisiana corporation franchise
tax return
13. Tax basis of all assets and As of December 31
liabilities, by major category, for Code As of June 30
(final)
Section 743 and FAS 109 purposes
14. Depreciation and amortization, by tax July 1 - June 30
property, for mining assets for the (final)
following:
--Earnings and Profits
--State (where appropriate)
15. Estimate of permanent differences July 1 - December
31
between book and taxable income
16. Estimate of taxable
income for FAS 109 July 1 - December
31
purposes
17. Estimated regular and AMT taxable July 1 - June 30
income
18. Any other tax information and data
reasonably requested by the
Non-Operating Partner or its Affiliates
for purposes of complying with their
federal and state tax reporting
requirements
(TABLE CONTINUED)
ITEM OF TAX INFORMATION DATE
1. Ordinary income excluding January 25
depreciation and depletion (estimated October 25
where appropriate), including
workpapers supporting allocations
between partners
2. Depletable gross revenues, statutory January 25
depletion expenses (excluding October 25
depreciation) for purposes of Code
Section 613, production volumes, and
remaining reserves by property (taking
into account special tax allocations)
3. Depreciation and amortization expense, January 25
by tax property for mining assets and by October 25
state for other assets, as follows:
---Federal
---AMT
---ACE
4. Depreciable and amortizable asset January 25
additions and retirements, by tax October 25
property for mining assets and by state
for other assets
5. Leasehold cost basis and related January 25
additions, retirements, and abandonments October 25
by tax property
6. Outstanding balance of recourse and January 25
nonrecourse debt October 25
7. Interest and dividend income January 25
October 25
8. Code Section 1231 gains or losses, and January 25
ordinary income recapture October 25
9. Reconciliation of book to
taxable income January 25
October 25
10. Partnership gross
income consisting of January 25
qualifying income under Code Section October 25
7704 (d) as well as nonqualifying income
11. Fair market value evaluation by January 25
property
ITEM OF TAX INFORMATION DATE
12. Additional state tax information October 25
A. Sales by state based on the place
of origin and place of shipping
destination
B. Inventory by state
C. Miscellaneous income (i.e.,
interest, dividends, gains and
losses, rental income and other
miscellaneous income) by state
D. Rent expense
E. Book original cost of depreciable
and depletable assets by state,
considering the effect of
additions and retirements
F. Book basis information for the
Louisiana corporation franchise
tax return
13. Tax basis of all assets and January 25
liabilities, by major category, for Code October 25
Section 743 and FAS 109 purposes
14. Depreciation and amortization, by tax
property, for mining assets for the
following: November 25
--Earnings and Profits
--State (where appropriate)
15. Estimate of permanent differences
between book and taxable income January 6
16. Estimate of taxable
income for FAS 109 purposes January 6
17. Estimated regular and AMT taxable
income January 25
18. Any other tax information and data
reasonably requested by the
Non-Operating Partner or its Affiliates
for purposes of complying with their
federal and state tax reporting
requirements
Schedule 9.12
Sales to IMC Canada Ltd. of GTSP, DAP, GMAP 11-52-0, GMAP
10-50-0 and PFS: the price shall be the average market price
minus ten percent (10%) for domestic sales of similar products so
long as the aggregate volume for the above-mentioned products
does not exceed 57,619 P2O5 tons.
Sales to Operations' Rainbow Division of GTSP, DAP, RMAP, GMAP
and PFS: the price shall be the average market price minus ten
percent (10%), but not less than full production cost, for
domestic sales of similar products so long as the aggregate
volume for the above-mentioned products does not exceed 95,200
P205 tons.
EXHIBIT A
Schedule of Definitions
"Accounting Date" shall have the meaning given to such tern in
Section 12.03 of the Partnership Agreement.
Accounting Referee" shall have the meaning given to such term in
the Contribution Agreement.
"Acquiring Person shall have the meaning given to such term in
Section 2.08 (b) of the Partnership Agreement.
"Act" shall mean the Uniform Partnership Law as enacted in the
State of Delaware.
"Administrative Fee" shall have the meaning given to such term in
Section 9.11 of the Partnership Agreement.
"Affiliate" of any Person shall mean any corporation,
proprietorship, partnership or business entity which, directly of
indirectly, owns or controls, is under common ownership or
control with, or is owned or is controlled by, such Person.
"Affiliated Group" means a Person together with its affiliates
and all Persons who are members of a "group" with such Person
within the meaning of Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended.
"Agrico LP" or "FRP Partner" (in the case of "FRP Partner", prior
to the merger, liquidation or dissolution of the FRP Partner (or
the transfer by the FRP Partner of its Partnership Interests to
FRP or an Affiliate of FRP) contemplated by the Amendment, Waiver
and Consent Agreement) shall mean Agrico, Limited Partnership, a
Delaware limited partnership.
"Alternates" shall have the meaning given to such term in Section
6.04 of the Partnership Agreement.
"Amendment, Waiver and Consent Agreement" shall mean the
Amendment, Waiver and Consent Agreement dated as of May 26, 1995
among Global, Operations, IMC GPCo, the Managing Partner,
IMC-Agrico Company, FTX, FRP and the FRP Partner.
"Appraisal Procedure" shall mean the following: If any price,
value, amount or determination to be determined under the
Partnership Agreement cannot timely be established by agreement,
then either the IMC Partner (or, as set forth in the Partnership
Agreement, during the IMC GPCo Liquidation Period, Operations or
IMC GPCo) or the FRP Partner, by written notice to the other, may
invoke the Appraisal Procedure. Each of the IMC Partner (or,
during the IMC GPCo Liquidation Period, Operations or IMC GPCo)
and the FRP Partner shall appoint its Qualified Investment
Banking Firm to conduct an appropriate valuation and shall give
notice of such appointment to the other Non-Managing Partner(s)
within fifteen (15) days after delivery of the notice invoking
such procedure. If the IMC Partner (or, during the IMC GPCo
Liquidation Period, Operations or IMC GPCo) or the FRP Partner
does not appoint its Qualified Investment Banking Firm within
such fifteen (15) day period, the valuation made by the Qualified
Investment Banking Firm appointed by the other Non-Managing
Partner shall be conclusive and binding on the Partners. If
within thirty (30) days after appointment of the Qualified
Investment Banking Firms, such Qualified Investment Banking Firms
are unable to agree upon an appropriate valuation but the higher
valuation is not greater than 110% of the lower valuation, then
the valuation which shall be binding on the Partners shall be the
average of the two (2) valuations given by the Qualified
Investment Banking Firms. If the higher valuation is greater
than 110% of the lower valuation, the two (2) Qualified
Investment Banking Firms jointly shall appoint a third Qualified
Investment Banking Firm within fifteen (15) days thereafter, or,
if they do not do so, either the IMC Partner (or, in such cases,
Operations or IMC GPCo) or the FRP Partner may request the
American Arbitration Association, or any organization successor
thereto, to appoint the third Qualified Investment Banking Firm.
The decision of the third Qualified Investment Banking Firm shall
be given within sixty (60) days after its appointment, shall be
at least equal to the lower valuation, shall not exceed the
higher valuation and shall be binding on the Partners. "Approved
Debts" shall have the meaning given to such term in Section
12.06(a) of the Partnership Agreement.
"Asset Sale Amount" shall mean, with respect to any sale of any
Partnership asset other than in the ordinary course of business,
an amount equal to the greater of (a) the net book value of such
asset as shown on the most recent audited balance sheet of the
Partnership and (b) the net proceeds (including cash and the
value of property received) realized by the Partnership upon the
sale or other disposition of such asset.
"Assets" shall have the meaning given to such term in the
Contribution Agreement.
"Assumed Liabilities" and "Assumed Liability" shall have the
meanings given to such terms in the Contribution Agreement.
"Bankrupt" shall mean any Person with respect to which a
Bankruptcy shall have occurred.
"Bankruptcy" shall mean with respect to any Person the occurrence
of either of the following events"
(i) the Person shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or
shall take any corporate action to authorize any of the
foregoing; or
(ii) an involuntary case or other proceeding shall be commenced
against the Person seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part
of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or
an order for relief shall be entered against the Person under the
federal bankruptcy laws as now or hereafter in effect.
"Base Affiliate Transaction Amount" shall mean (i) for the Fiscal
Year ended June 30, 1994, five hundred thousand dollars
($500,000) and (ii) for each subsequent Fiscal Year, an amount
equal to the sum of (x) the Base affiliate Transaction Amount in
effect for the immediately preceding Fiscal Year, plus (y) the
product of (A) the percentage increase in the GNP Deflator Index
for the immediately preceding Fiscal Year, multiplied by (B) the
Base Affiliate Transaction Amount for the immediately preceding
Fiscal Year.
"Base Budget Amount" shall mean (i) for the Fiscal Year ended
June 30, 1994, two hundred fifty thousand dollars ($250,000), and
(ii) for each subsequent Fiscal Year, an amount equal to the sum
of (x) the Base Budget Amount in effect for the immediately
preceding Fiscal Year, plus (y) the product of (A) the percentage
increase in the GNP Deflator Index for the immediately preceding
Fiscal Year, multiplied by (B) the Base Budget Amount for the
immediately preceding Fiscal Year.
"Base Obligation Amount" shall mean (i) for the Fiscal Year ended
June 30, 1994, five million dollars ($5,000,000), and (ii) for
each subsequent Fiscal Year, an amount equal to the sum of (x)
the Base Obligation Amount in effect for the immediately
preceding Fiscal Year, plus (y) the product of (A) the percentage
increase in the GNP Deflator Index for the immediately preceding
Fiscal Year, multiplied by (B) the Base Obligation Amount for the
immediately preceding Fiscal Year.
"Base Sale Amount" shall mean (i) for the Fiscal Year ended June
30, 1994, twenty-five million dollars ($25,000,000), and (ii) for
each subsequent Fiscal Year, an amount equal to the sum of (x)
the Base Sale Amount in effect for the immediately preceding
Fiscal Year, plus (y) the product of (A) the percentage increase
in the GNP Deflator Index for the immediately preceding Fiscal
Year, multiplied by (B) the Base Sale Amount for the immediately
preceding Fiscal Year.
"Beneficial Interest" means with respect to either Ultimate
Parent, its beneficial ownership interest in the Partnership
(determined upon the basis of the Capital Interest of the Partner
or Partners controlled by such Ultimate Parent) proportionately
reduced by any minority ownership interest of any Person other
than such Ultimate Parent or any if its Intervening Persons in
the Partner or Partners controlled by such Ultimate Parent or any
Intervening Person of such Ultimate Parent; provided that in
calculating the Beneficial Interest of FTX or any subsequent
Ultimate Parent of the FRP Partner, the beneficial ownership
interest of FTX or any subsequent Ultimate Parent of the FRP
Partner in the Partnership shall only be reduced on account of
Non-Affiliated Unitholders to the extent such Non-Affiliated
Unitholders hold in excess of 49% of the limited partnership
interests of FRP.
"Capital Account" means, with respect to any Partner, the capital
account maintained for such Partner pursuant to Section 4.02 of
the Partnership Agreement.
"Capital Advance" shall have the meaning given to such term in
Section 3.02(b) of the Partnership Agreement.
"Capital Interest" shall have the meaning given to such term in
Section 4.01 of the Partnership Agreement.
"Capital Interest Cash" means, for any period any Capital
Proceeds received during such period less the sum of (A) Capital
Proceeds reinvested in a Capital Project during such period in
accordance with Section 5.07 of the Partnership Agreement plus
(B) (i) expenditures for Capital Projects during such period and
(ii) capital expenditures in any year for projects identified on
Annex VII to the Contribution Agreement, or alternative projects
of a substantially similar nature substituted by agreement of the
parties, to the extent that the aggregate amount of all such
capital expenditures exceed 110% of the aggregate amount shown on
such Annex VII as being spent for such projects in that year,
which in both cases are either specifically approved by the
Policy Committee (or, if not by the Policy Committee, by the CEOs
or the Managing Partner in accordance with Section 6.07 of the
Partnership Agreement) or in a budget approved by the Policy
Committee(or, if not by the Policy Committee, by the CEOs or the
Managing Partner in accordance with Section 6.07 of the
Partnership Agreement). Furthermore, any expenditure that would
otherwise be subtracted pursuant to clause (B) of this definition
of Capital Interest Cash shall not be so subtracted to the extent
that such expenditure is funded by either the incurrence of
indebtedness by the Partnership or cash contributions by the
Partners.
"Capital Proceeds" shall mean the cash proceeds of a Capital
Transaction received, whether the Capital Transaction occurred in
the current period or in a prior period.
"Capital Project" shall mean any project having an anticipated
useful life in excess of one year, with an anticipated cost
(including capitalized interest in connection with any Debt
incurred to fund such project) in excess of the Base Budget
Amount and involving the purchase, lease, license, acquisition,
manufacture, maintenance or construction of an asset, other than
those items set forth on Annex VII to the Contribution Agreement.
A Capital Project shall be deemed implemented or attributable to
the Fiscal Year in which the relevant asset is placed in service.
"Capital Transaction" shall mean the sale or disposition of any
asset of the Partnership having an anticipated useful life in
excess of one year other than in the ordinary course of business.
A Capital Transaction shall be deemed to have occurred in the
Fiscal Year in which the sale or disposition of the relevant
asset becomes effective. The sale of Big Bend or Port Xxxxxx
terminal is not a Capital Transaction.
"CEOs" shall have the meaning given to such term in Section
6.07(b) of the Partnership Agreement.
"Claims" shall have the meaning given to such term in Section
8.01 of the Partnership Agreement.
"Closing" shall mean the consummation of the transactions
contemplated by the Contribution Agreement in accordance with
Section 2.08 thereof.
"Closing Date" shall have the meaning given to such term in the
Contribution Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended
and the regulations promulgated thereunder.
"Comparable Property" shall have the meaning given to such term
in Section 2.08(c) of the Partnership Agreement.
"Confidentiality Agreement" shall mean the Letter Agreement dated
November 18, 1992 among FRP, FTX and Group.
"Contributed Business" shall, with respect to Operations or FRP,
have the meaning given to such term in the Contribution
Agreement.
"Contributing Partner" shall have the meaning given to such term
in Section 3.03 of the Partnership Agreement.
"Contribution Agreement" shall mean that certain Contribution
Agreement dated as of April 5, 1993 IMC and FRP
"Contribution Agreement Claim" shall have the meaning given to
such term in Section 5.07(d) of the Partnership Agreement.
"Cure Period" shall mean the period ending sixty (60) days after
the earlier to occur of (i) the agreement between the
Non-Managing Partners that a Material Breach has occurred and
(ii) if a dispute exists between the Non-Managing Partners as to
whether a Material Breach has occurred, a determination through
the Dispute Resolution Mechanism that a Material Breach has
occurred; provided, that if during the sixty (60) day period, the
Operating Partner has promptly presented to the Non-Operating
Partner a remedy to cure such Material Breach and has promptly
begun and continuously pursued good faith efforts in attempting
to cure such Material Breach, then the Cure Period shall be
extended for so long as the Operating Partner is continuously
pursuing good faith efforts to cure such Material Breach, but in
no event shall the Cure Period be extended for more than a
reasonable period of time, taking into account the nature of the
cure.
"Current Interest" shall have the meaning given to such term in
Section 4.01 of the Partnership Agreement.
"Current Interest Cash" shall mean, for any period the sum of
(i) the consolidated net income (or loss) of the
Partnership for such period; plus
(ii) the depreciation, depletion, amortization and all
other non-cash expenses of the Partnership, including the
amount of net book value eliminated as a result of any
asset sales made by the Partnership during such period;
plus
(iii) the net cash proceeds with respect to any prior
period asset sales or liquidation of other non-current
assets of the Partnership received during the period to the
extent such proceeds are not already included in the
consolidated net income of the Partnership for such period;
minus
(iv) the non-cash proceeds of any asset sales made by the
Partnership during such period to the extent such non-cash
proceeds are included in the consolidated net income of the
Partnership for such period; minus (v) the Partnership's
earnings from non-consolidated investees during such
period; plus
(vi) the Partnership's share of losses in non-consolidated
investees during such period; plus
(vii) dividends and distributions of cash and cash
equivalents received by the Partnership from
non-consolidated investees during such period; minus
(viii) investments of cash and cash equivalents made by the
Partnership in non-consolidated investees during such
period; minus
(ix) capital expenditures (a) excluding expenditures for
Capital Projects but (b) including capital expenditures for
projects identified in Annex VII to the Contribution
Agreement but only to the extend that the aggregate among
of such expenditures in any year for projects identified in
Annex VII, or alternative projects of a substantially
similar nature substituted by agreement of the parties,
does not exceed 110% of the aggregate amount shown on such
Annex VII as being spent for such projects in that year;
minus
(x) the extent not previously deducted in computing the
consolidated net income (or loss) of the Partnership,
expenditures of the Partnership relating to the shut down
of facilities and reclamation of land during such period
and other payments in respect of previously accrued
liabilities; minus
(xi) principal repayments of Partnership indebtedness;
minus
(xii) Capital Proceeds of the Partnership during such
period; minus
(xiii) increases in cash reserves of the Partnership; plus
(xiv) decreases in cash reserves of the Partnership; plus
(xv) after consideration of noncash accruals and related
expenditures identified in (ii) and (x) above, decreases in
working capital loans from third parties at the end of the
period.
In calculating Current Interest Cash, to the extend applicable,
each item involved in the calculation shall be determined using
the financial statements of the Partnership prepared in
accordance with generally accepted accounting principles.
Furthermore, any expenditure that would otherwise be deducted
pursuant to this definition of Current Interest Cash shall not be
deducted from consolidated net income to the extent that such
expenditure is funded by either the incurrence of indebtedness by
the Partnership or cash contributions by the Partners.
"Debt" shall mean, as to any Person: (a) indebtedness created,
issued or incurred by such Person for borrowed money (whether by
loan or the issuance and sale of debt securities; (b) obligations
of such Person to pay the deferred purchase or acquisition price
of property or services, other than trade or other accounts
payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as
such trade or other accounts payable are payable within ninety
(90) days of the date the respective goods are delivered or
respective services rendered; )c) Debt of others secured by a
Lien on the property of such Person, whether or not the
respective indebtedness so secured has been assumed by such
Person; (d) obligations of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and
other financial institutions for the account of such Person; (e)
capital lease obligations of such Person required to be reported
as such in accordance with generally accepted accounting
principles from time to time in effect; and (f) Debt of others
guaranteed by such Person.
"Delaware Law" shall have the meaning given to such term in the
Partnership Agreement and in the Parent Agreement.
"Developing Partner" shall have the meaning given to such term in
Section 2.08(c) of the Partnership Agreement.
"Dispute Resolution Mechanism" shall mean a proceeding for
resolution of disputes, submitted to Endispute Incorporated
("Endispute:) in San Francisco, California, with the Non-Managing
Partner whose position is substantially upheld by Endispute in
such proceeding being entitled to recover its attorneys' fees and
expenses from the other Non-Managing Partner. If at the time
that the dispute occurs Endispute is not in the business of
resolving disputes in San Francisco, California, the Non-Managing
Partners shall ask the Chief Judge of the United States Court of
Appeals for the Ninth Circuit to select a similar firm located in
San Francisco, California.
"Dissolution Event" shall have the meaning given to such term in
Section 12.01 of the Partnership Agreement.
"Distributable Cash" shall mean, with respect to any Partner for
any period, the sum of (i) Current Interest Cash for such period
multiplied by such Partner's Current Interest as of the last day
of such period, plus (ii) Capital Interest Cash for such period
multiplied by such Partner's Capital Interest as of the last day
of such period, except that the Capital Proceeds from a Capital
Transaction occurring in a prior period will be calculated using
the Capital Interest in effect as of the last day of the period
in which the Capital Transaction which generated such Capital
Proceeds was deemed to have occurred.
"Electing Partner" shall have the meaning given to such term in
Section 2.08(c) of the Partnership Agreement.
"Employee Cost Sharing Agreement" shall mean that certain
Employee Cost Sharing Agreement dated as of July 1, 1993 between
IMC and the Managing Partner.
"Environmental Liabilities" shall have the meaning given to such
term in the Contribution Agreement.
"Equivalent Sale Price" means the Triggering Event Partnership
Value, multiplied by the Capital Interest of the Non-Triggering
Partner immediately prior to the Triggering Event.
"Excluded Liability" shall have the meaning given to such term in
the Contribution Agreement.
"Exercise Notice" has the meaning given to such term in Section
7.04 of the Partnership Agreement.
"Exercising Partner" shall have the meaning given to such term in
Section 2.08(b) of the Partnership Agreement.
"Expansion" shall mean: (i) the construction or development of a
new mine, plant, building, structure or other facility for the
purpose of developing a new source of production capacity; (ii)
any construction, development, process improvement or other
improvement primarily designed to increase the production
capacity or decrease the cost structure of any existing mine,
plant or facility; or (iii) any purchases of materials related to
the items in (i) or (ii).
"FASB 109" shall mean the Financial Accounting Standards Board
Statement of Financial Accounting Standard No. 109.
"FCC" shall mean Freeport Chemical Company, a Delaware
corporation.
"Final IMC GPCo Liquidating Distribution" shall have the meaning
given to such term in the Partnership Agreement and in the Parent
Agreement.
"Fiscal Year" shall mean the twelve month period ending June 30th
for each year during the life of the Partnership or such other
month period as may be defined as the Fiscal Year of the
Partnership pursuant to Section 9.01 of the Partnership
Agreement.
"FRP" shall mean Freeport-McMoRan Resource partners, Limited
Partnership, a Delaware limited partnership and its successors.
"FRP Alternate" and "FRP Alternates" shall have the meanings
given to such terms in Section 6.04 of the Partnership Agreement.
"FRP GPCo" shall have the meaning given to such term in the
Parent Agreement.
"FRP GPCo/FCC/FTX Merger Documents" shall have the meaning given
to such term in the Amendment, Consent Waiver Agreement.
"FRP GPCo/FCC/FTX Mergers" shall have the meaning given to such
term in the Partnership Agreement and in the Parent Agreement.
"FRP Partner" shall mean (i) Agrico, Limited Partnership, a
Delaware limited partnership, or (ii) FRP or the Affiliate of FRP
that succeeds to the obligations, assets, properties, rights and
interests of Agrico, Limited Partnership, as a result of the
merger, liquidation or dissolution of Agrico, Limited Partnership
(or to which the Partnership Interests of Agrico, Limited
Partnership is transferred) as contemplated by the Amendment,
Waiver and Consent Agreement or (iii) any other Affiliate of FRP
which succeeds to the Partnership Interests of the entity
identified in (i) or (ii) above by means of the purchase,
transfer, assignment or other conveyance or succession of such
Partnership Interests in accordance with the terms of the
Partnership Agreement.
"FRP Representative" and FRP Representatives" shall have the
meanings given to such terms in Section 6.04 of the Partnership
Agreement.
"FRP Transferred Sales Employee" shall have the meaning given to
such term in the Contribution Agreement.
"FTX" shall mean Freeport-McMoRan Inc., a Delaware corporation
and its successors.
"FTX Common Shares" shall have the meaning given to such term in
the Parent Agreement.
"GNP Deflator Index" shall mean the GNP deflator index (final) as
published by the U.S. Department of Commerce (commencing with
the index as of June 30, 1993).
"Global" or "Group" shall mean IMC Global Inc. (formerly IMC
Fertilizer Group, Inc.), a Delaware corporation and its
successors.
"Group Structure" shall have the meaning given to such term in
the Parent Agreement.
"IMC" or "Operations" shall mean IMC Global Operations Inc.
(formerly IMC Fertilizer, Inc.), a Delaware corporation and its
successors.
"IMC Alternate" and "IMC Alternates" shall have the meanings
given to such terms in Section 6.04 of the Partnership Agreement.
"IMC Common Shares" shall have the meaning given to such term in
the Parent Agreement.
"IMC GPCo" shall mean IMC-Agrico GP Company, a Delaware
corporation.
"IMC GPCo Liquidation" shall have the meaning given to such term
in the Parent Agreement.
"IMC GPCo Liquidation Period" shall have the meaning given to
that term in Article I of the Partnership Agreement.
"IMC GPCo Plan of Liquidation" shall mean the Agreement and Plan
of Complete Liquidation and Dissolution among Operations, IMC
GPCo and MPCo.
"IMC Partner" shall, with respect to each such Agreement, have
the meaning given to such term in the Parent Agreement and the
Partnership Agreement, respectively.
"IMC Plans" shall have the meaning given to such term in Section
9.06 of the Partnership Agreement.
"IMC Representative" and "IMC Representatives" shall have the
meanings given to such terms in Section 6.04 of the Partnership
Agreement.
"Initial IMC GPCo Liquidating Distribution" shall have the
meaning given to such term in the Partnership Agreement and the
Parent Agreement.
"Intervening Person" of either Ultimate Parent means a Person
that is controlled by such Ultimate Parent and which has an
ownership interest in either the IMC Partner or the FRP Partner,
as the case may be, or in another Intervening Person of such
Ultimate Parent.
"Leased IMC Employees" shall have the meaning given to such term
in the Contribution Agreement.
"Leasing Agreement" shall have the meaning given to such term in
the Contribution Agreement.
"Lien" shall mean, with respect to any asset, and mortgage, lien,
pledge, charge, security interest, easement, right of way, title
defect or encumbrance of any kind with respect to such asset.
"Limestone Cost Sharing Agreement" shall mean that certain
Limestone Cost Sharing Agreement dated as of July 1, 1993, among
IMC, the Managing Partner and the Partnership.
"Liquidating Partner" shall have the meaning given to such term
in Section 12.02 of the Partnership Agreement.
"Major Decision" shall have the meaning given to such term in
Section 6.07 of the Partnership Agreement.
"Managing Partner" shall mean MPCo in its capacity as Managing
Partner under the Partnership Agreement.
"Marketing and Administrative Services Agreement" shall have the
meaning given to such term in the Contribution Agreement.
"Material Asset Sale" shall mean the sale or other disposition of
any asset of the Partnership other than in the ordinary course of
business, if, as a result of such sale, the aggregate Asset Sale
Amount for all such sales other than in the ordinary course of
business consummated in the Fiscal Year of such sale would exceed
the Base Sale Amount for such Fiscal Year.
"Material Breach" shall mean the occurrence of either of the
following events" (i) a material failure by the Managing Partner
to perform its duties or responsibilities as Managing Partner
under this Agreement of (ii) the Bankruptcy of the Operating
Partner or any of its direct or indirect parent entities.
"Material Breach Event" shall mean either: (a) (i) the occurrence
of a Material Breach referred to in clause (i) of the definition
of "Material Breach", (ii) the giving of written notice of such
Material Breach by the Non-Operating Partner to the Operating
Partner and (iii) the failure to cure such Material Breach during
the Cure Period;
(b) the occurrence of a Material Breach referred to in clause
(ii) of the definition of "Material Breach" and, if such Material
Breach results from a Bankruptcy referred to in clause (i) of the
definition of "Bankruptcy", the continuance of such Material
Breach for sixty (60) days; or
(c) the occurrence of an event that would have constituted a
Triggering Event but for the proviso in the definition of
"Triggering Event."
A "cure" of a Material Breach referred to in clause (i) of the
definition of "Material Breach" includes, without limitation,
reimbursement of the Partnership for any costs, expenses,
liabilities, obligations, losses, damages or penalties caused by
such Material Breach.
"Material Facility" shall mean any facility of the Partnership
having a book value, as shown on the latest quarterly balance
sheet of the Partnership, in excess of five percent (5%) of the
net property, plant and equipment of the Partnership, as shown on
the latest quarterly balance sheet of the Partnership, at the
time of such determination.
"Material Obligation" shall mean any liability or obligation
(known to the Managing Partner at the time of incurrence or
assumption) incurred or assumed by or on behalf of the
Partnership for Expansion and other than in the ordinary course
of business in an aggregate amount, based on the knowledge of the
Managing Partner at the time of such incurrence or assumption, in
excess of the Base Obligation Amount in effect at the time such
liability or obligation is incurred or assumed.
"Material Purchase and Cost Sharing Agreement" shall mean that
certain Material Purchase and Cost Sharing Agreement dated as of
July 1, 1993 between IMC and the Partnership.
"MP Benefit Plans" shall have the meaning given to such term in
the Contribution Agreement.
"MB Contribution Plans" shall have the meaning given to such term
in the Contribution Agreement.
"MB Pension Plans" shall have the meaning given to such term in
the Contribution Agreement.
"MPCo" shall mean IMC-Agrico MP, Inc., a Delaware corporation and
its successors.
"Negotiating Interval" shall have the meaning given to such term
in the Parent Agreement.
"Negotiation period" shall have the meaning given to such term in
Section 7.02(b) of the Partnership Agreement.
"New Partners" shall have the meaning given to such term in
Section 12.01 of the Partnership Agreement.
"Non-Affiliated Unitholders" means limited partners of FRP other
than FTX and its Affiliates.
"Non-Contributing Partner" shall have the meaning given to such
term in Section 3.03 of the Partnership Agreement.
"Non-Contributing Partner's Share" shall have the meaning given
to such term in Section 3.03 of the Partnership Agreement.
"Non-Defaulting Partner" shall have the meaning given to such
term in Section 5.07(d) of the Partnership Agreement.
"Non-Developing partner" shall have the meaning given to such
term in Section 2.08(c) of the Partnership Agreement.
"Non-Managing Partner shall mean any Partner other than the
Managing Partner.
"Non-Operating Partner" shall have the meaning given to such term
in Section 2.06 of the Partnership Agreement.
"Non-Presenting Partner" shall have the meaning given to such
term in Section 2.08(b) of the Partnership Agreement.
"Non-Qualifying Income" shall mean any income other than
Qualifying Income.
"Non-Triggering Partner" means (i) if the IMC Partner is the
Triggering Partner, the FRP Partner and (ii) if the FRP Partner
is the Triggering Partner, the IMC Partner (which, during the IMC
GPCo Liquidation period, shall mean both Operations and IMC
GPCo).
"Non-Withdrawing Partner" shall have the meaning given to such
term in Section 12.01 of the Partnership Agreement.
"No-Shop Period" shall have the meaning given to such term in
Section 7.02(b) of the Partnership Agreement.
"No-Shop Interval" shall have the meaning given to such term in
Section 3.0(d) of the Parent Agreement.
"Notice of Intent to Sell" shall have the meaning given to such
term in Section 7.02(b) of the Partnership Agreement.
"Notice of Intent to Transfer" shall have the meaning given to
such term in Section 3.0(d) of the Parent Agreement.
"Notified Partner" shall have the meaning given to such term in
Section 7.02(b) of the Partnership Agreement.
"Notified Person" shall have the meaning given to such term in
Section 3.0(d) of the Parent Agreement.
"Operating Partner" shall have the meaning given to such term in
Section 2.06 of the Partnership Agreement.
"Operations" or "IMC" shall mean IMC Global Operations Inc.
(formerly IMC Fertilizer, Inc.), a Delaware corporation and its
successors.
"Parent Agreement" shall mean the Parent Agreement among IMC, FRP
and the Partnership, as amended and restated as of May 26, 1995,
and as thereafter amended, modified or supplemented from time to
time.
"Partner" or "Partners" shall have the meanings given to such
terms in Article I to the Partnership Agreement.
"Partner Loan" shall have the meaning given to such term in
Section 3.03 of the Partnership Agreement.
"Partnership" shall mean IMC-Agrico Company, a Delaware general
partnership formed pursuant to the Partnership Agreement.
"Partnership Agreement" shall mean the Partnership Agreement
between Operations, IMC GPCo, FRP and the Managing Partner, as
amended and restated as of July 1, 1993 and as further amended
and restated as of May 26, 1995 and as thereafter amended,
modified or supplemented from time to time.
"Partnership Interests" shall mean all right, title and interest
of a Partner in the Partnership, including, without limitation,
its Current Interest and Capital Interest.
"Partnership Units" shall have the meaning given to such term in
the Parent Agreement.
"Partnership Working Capital Facility" shall have the meaning
given to such term in Section 3.02(b) of the Partnership
Agreement.
"Permitted Liens" shall have the meaning given to such term in
the Contribution Agreement.
"Person" shall mean an individual, a partnership, a corporation,
a trust, an unincorporated organization, a governmental authority
and any other entity.
"PhosChem" shall have the meaning given to such term in Section
2.03 of the Partnership Agreement.
"Phosphate Chemicals Business" means and includes (i) the
exploration for, and the acquisition, leasing, development,
mining and disposition of, phosphate rock reserves, (ii) engaging
in contract mining, tolling, processing, management and other
activities regarding the phosphate-related reserves, properties,
facilities or materials of third parties, (iii) the processing,
manufacture, purchase, exchange and sale of phosphate fertilizers
and other phosphate chemicals (including, without limitation,
monoammonium phosphate, diammonium phosphate, triple
superphosphate and phosphoric acid) and related raw materials and
by-products (including, without limitation, the purchase and use
of sulphur, but excluding the manufacture, production, exchange
or sale of sulphur), (iv) the processing, manufacture, purchase,
exchange and sale of nitrogen chemicals (including anhydrous
ammonia and urea), (v) the extraction and recovery from phosphate
rock and the exchange and sale of uranium oxide, (vi) the
management and operation of agricultural, farming and livestock
businesses as an incidental activity relating to holding lands
originally acquired or leased by the Partnership or one of the
Partners as phosphate rock reserves; (vii) the acquisition,
construction, ownership, leasing, operation, management,
alteration and disposition of real property (and interests
therein) and mining, manufacturing, mixing, granulation,
processing, refining, shipping and other equipment and facilities
(including, without limitation, motor vehicles, railroads,
railcars, pipelines, storage facilities, ports and vessels)
related to any of the foregoing, (viii) developing, subdividing,
construction roads, sewers, utility, water, sewage and water
treatment and other facilities on, constructing and selling,
leasing or managing residential, commercial and other
improvements on, and otherwise dealing with, reclaimed and other
land originally acquired or leased as phosphate rock reserves,
and (ix) all other business and activities related or incidental
thereto. Notwithstanding the foregoing, "Phosphate Chemicals
Business" shall not include (i) the animal feeds business or (ii)
the mixed fertilizer business.
"PhosRock" shall have the meaning given to such term in Section
2.03 of the Partnership Agreement.
"Policy Committee" shall have the meaning given to such term in
Section 6.04 of the Partnership Agreement.
"Presenting Partner" shall have the meaning given to such term in
Section 2.08(b) of the Partnership Agreement.
"Prime Rate" shall mean the rate publicly announced from time to
time by Citibank, N.A. in New York City as its prime rate.
"Purchasing Partner" shall have the meaning given to such term in
Section 7.04 of the Partnership Agreement.
"Qualified Appraiser" shall mean an MIA appraiser which has been
appraising property in the county in which the real property to
be valued is located for at least the preceding five (5) years.
"Qualified Investment Banking Firm" shall mean in investment
banking firm of national and international reputation.
"Qualifying Income" shall have the same meaning as the term
"qualifying income" defined in Section 7704(d) of the Code and
any successor provision.
"Real Estate Appraisal Procedure" shall mean the following: If
the value of any real property to be determined under the
Partnership Agreement cannot timely be established by agreement,
then either the IMC Partner or the FRP Partner, by written notice
to the other, may invoke the process described below. Each of
the IMC Partner and the FRP Partner shall appoint its Qualified
Appraiser to conduct an appropriate valuation and shall give
notice of such appointment to the other Non-Managing Partner
within fifteen (15) days after delivery of the notice invoking
such procedure. If either the IMC Partner or the FRP Partner
does not appoint its Qualified Appraiser within such fifteen (15)
day period, the valuation made by the Qualified Appraiser
appointed by the other Non-Managing Partner shall be conclusive
and binding on the Partners. If within thirty (30) days after
appointment of the Qualified Appraisers, such Qualified
Appraisers are unable to agree upon an appropriate valuation but
the higher valuation is not greater than 110% of the lower
valuation, then the valuation which shall be binding on the
Partners shall be the average of the two (2) valuations given by
the Qualified Appraisers. If the higher valuation is greater
than 110% of the lower valuation, the two (2) Qualified
Appraisers jointly shall appoint a third Qualified Appraiser
within fifteen (15) days thereafter, or, if they do not do so,
either the IMC partner or the FRP Partner may request MIA, or any
organization successor thereto, to appoint the third Qualified
Appraiser. The decision of the third Qualified Appraiser shall
be given within sixty (60) days after its appointment, shall be
at least equal to the lower valuation, shall not exceed the
higher valuation and shall be binding on the Partners.
"Real Estate Development Project" shall mean any project
involving the developing, subdividing, construction roads,
sewers, utility, water, sewage and water treatment and other
facilities on, construction and selling, leasing or managing
residential, commercial and other improvements on, and otherwise
dealing with, the land of the Partnership.
"Related Persons" shall have the meaning given to such term in
Section 8.01 of the Partnership Agreement.
"Representatives" shall have the meaning given to such term in
Section 6.04 of the Partnership Agreement.
"Residual Net Loss" for any period, means the excess of all items
of expense over all items of income determined in accordance with
the principles set forth in Section 4.02(c) of the Partnership
Agreement, as computed and adjusted for allocations pursuant to
Section 5.02 of the Partnership Agreement.
"Retained Environmental Liability" shall have the meaning given
to such term in Section 6.08 of the Partnership Agreement.
"Retaining Partner" shall have the meaning given to such term in
Section 6.08 of the Partnership Agreement.
"SEC" shall mean the Securities and Exchange Commission of the
United States of America or any successor agency.
"Soliciting Partner" shall have the meaning given to such term in
Section 7.02(b) of the Partnership Agreement.
"Soliciting Person" shall have the meaning given to such term in
the Parent Agreement.
"Special Purpose Partner" shall mean any IMC Partner or FRP
Partner (i) the principal business purpose of which is the
ownership of its Partnership Interests in the Partnership and
(ii) in respect of which its Partnership Interests in the
Partnership constitute substantially all of its assets; provided,
however, that (a) neither Operations nor FRP shall constitute a
"Special Purpose Partner" unless Operations or FRP (x) acquires a
Partnership Interest (or portion thereof) and (y) its ownership
interest in all of its other business assets or operations
constitutes a less than 5% portion of its total assets or
operations, and (b) each of IMC GPCo and Agrico, Limited
Partnership, as constituted as of May 26, 1995, would have
constituted a "Special Purpose Partner" as of such date.
Notwithstanding the foregoing, no entity that, as of the date
such entity would have become a Special Purpose Partner pursuant
to the foregoing definition, has outstanding securities
registered under Section 12 of the Securities Exchange Act of
1934, as amended (or any similar or successor provision or
statute), shall be a Special Purpose Partner.
"Subject Interest" shall have the meaning given to such term in
the Parent Agreement.
"Subject Partnership Interest" shall have the meaning given to
such term in Section 7.02(b) of the Partnership Agreement.
"Target Cash" for any year means the aggregate amount of Current
Interest Cash that would have been required for that year, when
distributed in accordance with the provisions of Sections 5.06
and 5.07 of the Partnership Agreement, to cause the ending
balances in the Partners' Capital Accounts, immediately prior to
the allocations provided in Sections 5.01, 5.02(c) and 5.02(d) of
the Partnership Agreement, to be in the same ratio as the Capital
Interest percentages for the following year. The calculation of
Target Cash is illustrated by the formula attached to the
Partnership Agreement as Schedule X.
"Tax Matters Partner" shall have the meaning given to such term
in Section 10.06 of the Partnership Agreement.
"Transaction Agreements" shall mean collectively, the
Contribution Agreement, the Partnership Agreement, the Parent
Agreement and the Confidentiality Agreement.
"Transaction Costs" shall mean, collectively, (i) all documentary
stamp taxes, transfer taxes excise taxes and other similar taxes
imposed in connection with the transactions contemplated by the
Transaction Agreements by any state or other jurisdiction,
including, without limitation, the State of Florida or the State
of Louisiana, (ii) severance costs relating to the termination of
employment of FRP's, FTX's and IMC's operating personnel to the
extent such termination is directly attributable to the
transactions contemplated by the Transaction Agreements, (iii)
severance costs, not to exceed an aggregate of $12,600,000,
relating to the termination of FRP's and FTX's marketing and
administrative personnel to the extent such termination is
directly attributable to the transactions contemplated by the
Transaction Agreements and (iv) severance costs, not to exceed an
aggregate of $1,000,000, relating to the termination of IMC's
marketing and administrative personnel to the extent such
termination is directly attributable to the transactions
contemplated by the Transaction Agreements.
"Transfer" shall have the meaning given to such term in Section
7.02(a) of the Partnership Agreement.
"Transfer Price" means (A) in the case of a sale resulting from a
Triggering Event described in clauses (ii) or (iv) of the
definition thereof, the fair market value of the Partnership
Interest that is the subject of such sale, as mutually determined
by the IMC Partner and the FRP Partner or, if no such fair market
value is agreed upon within thirty (30) days of the receipt by
the Triggering Partner of the Exercise Notice by the
Non-Triggering Partner, by the Appraisal Procedure; (b) in the
case of a sale resulting from a Triggering Event described in
clauses (i) or (iii) of the definition thereof, (I) if the
transaction giving rise to the Triggering Event involved the sale
of all or a portion of the Partnership Interest of the Triggering
Partner, the Equivalent Sale Price and (II) if the transaction
giving rise to the Triggering Event was the sale of an ownership
interest in the IMC Partner or the FRP Partner or a Person
controlling or under common control with the IMC Partner or the
FRP Partner, the fair market value of the Non-Triggering
Partner's Partnership Interest taking into account the structure
of the transaction which gave rise to the Triggering Event, as
mutually determined by the IMC Partner and the FRP Partner or, if
no such fair market value is agreed upon within thirty (30) days
of the receipt by the Triggering Partner of the Exercise Notice,
by the Appraisal Procedure; and(C) in all other cases, the fair
market value of the Partnership Interest (or portion thereof) to
be sold or transferred in accordance with the terms of the
Partnership Agreement as determined by the mutual agreement of
the Partners, or, if the Partners fail to agree upon such fair
market value within the time period set forth in the Partnership
Agreement, determined in accordance with the Appraisal Procedure.
"Triggering Event" means any of the following events: (i) at any
time that the IMC Partner is the Operating Partner, the
occurrence of a transaction which, after giving effect thereto,
results in the Ultimate Parent of the IMC Partner owning less
than a 35% Beneficial Interest in the Partnership;
(ii) at any time that the IMC Partner is the Operating Partner,
the occurrence of a transaction which, after giving effect
thereto, results in 65% or more of the issued and outstanding
voting stock of the Ultimate Parent of the IMC Partner being
owned by an Affiliated Group;
(iii) at any time that the FRP Partner is the Operating Partner,
the occurrence of a transaction which results in the Ultimate
Parent of the FRP Partner owning less than a 35% Beneficial
Interest in the Partnership; or
(iv) at any time that the FRP Partner is the Operating Partner,
the occurrence of a transaction which results in 65% or more of
the issued and outstanding stock of the Ultimate Parent of the
FRP Partner being owned by an Affiliated Group;
provided that none of the circumstances described in clauses (i)
through (iv) above arising out of the foreclosure of a Lien
covering the Partnership Interest of the IMC Partner (or, during
the IMC GPCo Liquidation Period, Operations or IMC GPCo) or the
FRP Partner, the capital stock or partnership interests, as the
case may be, of the IMC partner (or, during the IMC GPCo
Liquidation Period, Operations or IMC GPCo) or the FRP Partner of
the capital stock or partnership interests of any Intervening
Person shall constitute a "Triggering Event."
"Triggering Event Notice" shall have the meaning given to such
term in Section 7.04 of the Partnership Agreement.
"Triggering Event Partnership Value" means an amount equal to the
purchase price paid to the Triggering Partner by the Purchasing
Partner in the transaction giving rise to the Triggering Event,
divided by the portion of the Capital Interest of the Triggering
Partner sold in such transaction.
"Triggering Partner" means (A) in the case of a Triggering Event
described in clauses (i) or (ii) of the definition thereof, the
IMC Partner and (B) in the case of a Triggering Event described
in clauses (iii) or (iv) or the definition thereof, the FRP
Partner.
"Ultimate Parent" means (i) with respect to the IMC Partner, (A)
initially, Global, and (B) if at any time a Triggering Event
occurred without a Triggering Event Notice having been delivered,
the Affiliated Group that acquired 65% or more of the stock of
Group or the Person that is then the Ultimate Parent of the IMC
Partner and (ii) with respect to the FRP Partner, (A) initially,
FTX and (B) if at any time a Triggering Event referred to in
clause (iv) of the definition thereof shall have occurred without
a Triggering Event Notice having been delivered, the Affiliated
Group that acquired 65% or more of the stock of FTX or the Person
that is then the Ultimate Parent of the FRP Partner.
"Withdrawing Partner" shall have the meaning given to such term
in Section 12.01 of the Partnership Agreement.
"Working Capital Contribution Arrangement" shall have the meaning
given to such term in Section 3.02(b) of the Partnership
Agreement.
