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