<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains first quarter summary financial information extracted
from Mississippi Chemical Corporation fiscal 1998 first quarter Form 10-Q and is
qualified in its entirety by reference to such Form 10-Q filing.
</LEGEND>
<CIK> 0000066895
<NAME> MISSISSIPPI CHEMICAL CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 1,758
<SECURITIES> 0
<RECEIVABLES> 41,043
<ALLOWANCES> 1,823
<INVENTORY> 80,670
<CURRENT-ASSETS> 131,859
<PP&E> 721,855
<DEPRECIATION> 311,715
<TOTAL-ASSETS> 869,145
<CURRENT-LIABILITIES> 71,000
<BONDS> 14,500
0
0
<COMMON> 280
<OTHER-SE> 440,697
<TOTAL-LIABILITY-AND-EQUITY> 869,145
<SALES> 110,912
<TOTAL-REVENUES> 111,140
<CGS> 87,745
<TOTAL-COSTS> 101,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 56
<INTEREST-EXPENSE> 4,495
<INCOME-PRETAX> 7,352
<INCOME-TAX> 3,055
<INCOME-CONTINUING> 4,297
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,297
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0
</TABLE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d)
Of The Securities Exchange Act of 1934
For Quarter Ended September 30, 1997
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1997
Commission File Number 001-12217
MISSISSIPPI CHEMICAL CORPORATION
Organized in the State of Mississippi
Tax Identification No. 64-0292638
P. O. Box 388, Yazoo City, Mississippi 39194
Telephone No. 601+746-4131
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ x ] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Number of Shares
-------- ----------------
Common Stock, $0.01 par value 27,409,755
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION
AND SUBSIDIARIES
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION:
Item 1. Consolidated Financial Statements
Consolidated Statements of Income 3
Three months ended September 30,
1997 and 1996
Consolidated Balance Sheets 4 - 5
September 30, 1997 and June 30, 1997
Consolidated Statements of Shareholders'
Equity 6
Fiscal Year Ended June 30, 1997 and
Three months ended September 30, 1997
Consolidated Statements of Cash Flows 7
Three months ended September 30,
1997 and 1996
Notes to Consolidated Financial Statements 8 - 11
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial
Condition 12 - 20
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 21
Signatures 22
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
Three months ended
September 30,
----------------------
1997 1996
-------- --------
(In thousands, except per share data)
<S> <C> <C>
Revenues:
Net sales $110,912 $ 91,290
Trading loss on brokered
product (297) -
-------- --------
110,615 91,290
Operating expenses:
Cost of products sold 87,745 63,379
Selling 5,704 6,321
General and administrative 8,256 6,850
-------- --------
101,705 76,550
-------- --------
Operating income 8,910 14,740
Other (expense) income:
Interest, net (2,083) 422
Other 525 98
-------- --------
Income before income taxes 7,352 15,260
Income tax expense 3,055 5,965
-------- --------
Net income $ 4,297 $ 9,295
======== ========
Earnings per share (see Note 2) $ 0.16 $ 0.44
======== ========
Weighted average common shares outstanding
(see Note 2) 27,456 21,250
======== ========
</TABLE>
[FN]
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
September 30, June 30,
1997 1997
------------ ----------
(In thousands, except per share data)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,758 $ 8,159
Accounts receivable, net 39,220 63,095
Inventories:
Finished products 38,129 28,308
Raw materials and supplies 6,723 4,636
Replacement parts 35,818 36,366
--------- ---------
Total inventories 80,670 69,310
Prepaid expenses and other
current assets 6,357 4,873
Deferred income taxes 3,854 3,596
--------- ---------
Total current assets 131,859 149,033
Investments and other assets:
Investments in affiliates 70,441 69,230
Other 24,003 14,039
--------- ---------
Total investments and
other assets 94,444 83,269
Properties held for sale 52,919 52,919
Property, plant and equipment, at cost 721,855 697,101
Less accumulated depreciation,
depletion and amortization (311,715) (304,706)
--------- ---------
Net property, plant and
equipment 410,140 392,395
Goodwill, net of accumulated
amortization 179,783 180,929
--------- ---------
$ 869,145 $ 858,545
========= =========
</TABLE>
[FN]
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
<TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, June 30,
1997 1997
------------ ---------
(In thousands, except per share data)
<S> <C> <C>
Current liabilities:
Long-term debt due within one year $ 140 $ 140
Accounts payable 55,665 74,534
Accrued liabilities 12,456 14,476
Income taxes payable 2,739 5,973
-------- --------
Total current liabilities 71,000 95,123
Long-term debt 276,194 244,516
Other long-term liabilities and
deferred credits 21,852 20,620
Deferred income taxes 59,122 58,857
Shareholders' equity:
Common stock ($.01 par; authorized
100,000 shares; issued 27,976 in
fiscal 1998 and 1997) 280 280
Additional paid-in capital 305,882 305,901
Retained earnings 147,382 145,827
Treasury stock, at cost
(566 shares in fiscal 1998
and 1997) (12,567) (12,579)
-------- --------
440,977 439,429
-------- --------
$869,145 $858,545
======== ========
</TABLE>
[FN]
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
SEPTEMBER 30, 1997
<TABLE>
Additional
Common Paid-In Retained Treasury
Stock Capital Earnings Stock Total
------- ---------- -------- -------- --------
(In thousands)
<S> <C> <C> <C> <C> <C>
Balances, July 1, 1996 $ 229 $178,364 $ 99,814 $(30,582) $247,825
Net income - - 55,815 - 55,815
Cash dividends paid - - (9,802) - (9,802)
Treasury stock, net - 56 - (18,753) (18,697)
Stock options exercised - 203 - - 203
Stock issued for
business acquired 51 127,278 - 36,756 164,085
------- -------- -------- -------- --------
Balances, June 30, 1997 280 305,901 145,827 (12,579) 439,429
Net income - - 4,297 - 4,297
Cash dividends paid - - (2,742) - (2,742)
Treasury stock, net - (19) - 12 (7)
------- -------- -------- -------- --------
Balances,
September 30, 1997 $ 280 $305,882 $147,382 $(12,567) $440,977
======= ======== ======== ======== ========
</TABLE>
[FN]
The accompanying notes are an integral part of these
consolidated financial statements.<PAGE>
MISSISSIPPI CHEMICAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
Three months ended
September 30,
--------------------
1997 1996
-------- ---------
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,297 $ 9,295
Reconciliation of net income to
net cash used by operating
activities:
Net change in operating assets
and liabilities (18,006) (25,647)
Depreciation, depletion and
amortization 9,070 4,434
Deferred income taxes 342 945
Other (427) (1,751)
-------- ---------
Net cash used in operating activities (4,724) (12,724)
-------- ---------
Cash flows from investing activities:
Purchase of property, plant and
equipment (20,698) (56,632)
Proceeds received from option 1,000 1,000
Investment in Farmland MissChem Limited (967) (25,968)
Restricted funds (9,945) -
Other 102 (60)
-------- ---------
Net cash used in investing activities (30,508) (81,660)
-------- ---------
Cash flows from financing activities:
Debt payments (81,222) (14,304)
Debt proceeds 112,900 69,213
Cash dividends paid (2,742) (2,133)
Purchase of treasury stock (105) (6,306)
-------- ---------
Net cash provided by financing activities 28,831 46,470
-------- ---------
Net decrease in cash and cash equivalents (6,401) (47,914)
Cash and cash equivalents -
beginning of period 8,159 60,214
-------- ---------
Cash and cash equivalents - end of period $ 1,758 $ 12,300
======== =========
</TABLE>
[FN]
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - INTERIM FINANCIAL STATEMENTS
The accompanying consolidated financial statements of Mississippi Chemical
Corporation and its subsidiaries ("the Company") have been prepared by the
Company, without audit. In the opinion of the Company's management, the
financial statements reflect all adjustments necessary to present fairly the
results of operations for the three months ended September 30, 1997 and 1996,
the Company's financial position at September 30, 1997 and June 30, 1997, the
cash flows for the three months ended September 30, 1997 and 1996, and the
consolidated statements of shareholders' equity as of September 30, 1997.
These adjustments are of a normal recurring nature, which are, in the opinion
of management, necessary for a fair presentation of the financial position and
results of operations for the interim periods.
Certain notes and other information have been condensed or omitted from
the interim financial statements presented in the Quarterly Report on
Form 10-Q. Therefore, these financial statements should be read in conjunction
with the Company's 1997 Form 10-K and the consolidated financial statements and
notes thereto included in the Company's June 30, 1997, audited financial
statements.
Due to the seasonal nature of the Company's business, the results of
operations for the period ended September 30, 1997, are not necessarily
indicative of the operating results for the full fiscal year.
NOTE 2 - EARNINGS PER SHARE
The number of shares used in the earnings per share computation are the
weighted average number of common shares outstanding plus dilutive common stock
equivalents as follows:
<TABLE>
Three months ended
September 30,
------------------
1997 1996
------- --------
(In thousands)
<S> <C> <C>
Weighted average common shares outstanding,
net of treasury shares 27,409 21,199
Common stock equivalents for employee stock
options 47 51
------ ------
27,456 21,250
====== ======
</TABLE>
In July 1997, the Company's board of directors declared a regular quarterly
cash dividend of $0.10 per common share for the three-month period ending June
30, 1997. This dividend was paid on September 2, 1997, to holders of record on
August 20, 1997. In October 1997, the Company's board of directors declared a
regularly quarterly cash dividend of $0.10 per common share for the three-month
period ending September 30, 1997. This dividend will be payable on November 24,
1997, to holders of record on November 4, 1997.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
During 1990, the Company entered into an agreement granting a third party
the exclusive option, for a period of four years, to purchase the Company's
undeveloped phosphate rock property of approximately 12,000 acres in Hardee
County, Florida. On July 12, 1994, the Company and the option holder entered
into new agreements with respect to this property whereby the Company conveyed
a portion of the property to the third party and granted to the third party
the exclusive option to purchase the remaining portion of the property. In
addition, the Company was granted a put option whereby the Company has the
right and option to sell the remaining portion of the property to the third
party if the third party does not exercise its option to purchase the remaining
property; and was granted an exclusive option to repurchase the previously
conveyed portion in the event the third party does not exercise its option and
the Company does not exercise its put option. The third party's option will
expire on January 16, 1998. The Company's put option will expire six months
after the third party's option expires, and its repurchase option will expire
one year after the Company's put option expires. These properties are
classified as property held for sale at September 30, 1997 and June 30, 1997.
The Company has entered into a 50-50 joint venture known as Farmland
MissChem Limited with Farmland Industries, Inc., to construct and operate a
2,040-short-ton-per-day anhydrous ammonia plant to be located near Point Lisas,
The Republic of Trinidad and Tobago. The project is expected to cost
approximately $330 million. The portion of the project cost in excess of
required equity contributions of 35% is to be financed by the joint venture
on a nonrecourse project basis. Start-up of the facility is scheduled for
late spring 1998. The Company has entered into a contract to purchase
one-half of the ammonia, approximately 350,000 short-tons-per-year, produced
by the plant at a purchase price which approximates market price but is subject
to an agreed-upon floor price. The Company intends to use its portion of the
production from the new facility as a raw material for upgrading into finished
fertilizer products at its existing facilities and for sales into world
markets. The Company is accounting for this investment using the equity
method.
In late fiscal 1996, the Company began an expansion at its nitrogen
fertilizer manufacturing facilities at Yazoo City. The project includes the
addition of a 650-ton-per-day nitric acid plant, a new 500-ton-per-day
ammonia plant and modifications to its ammonium nitrate plant to increase
production from approximately 750,000 to approximately 950,000 tons per year.
The Company estimates total cost of the expansion to be $130 million and is
scheduled for a phased completion with the nitric acid, anhydrous ammonia,
and the majority of the ammonium nitrate capacity being added in the first
half of 1998. Total project completion is anticipated in early 1999.
The Company has begun construction of a new phosphogypsum disposal
facility at Pascagoula that is expected to be operational by spring 1998 at
an estimated cost of $17 million. In July 1997, the Company also initiated
construction of an expansion of its diammonium phosphate manufacturing
facilities at Pascagoula. This project, which is expected to cost
approximately $10.5 million, will increase diammonium phosphate production
from approximately 720,000 to 900,000 tons per year and will increase product
storage capacity from approximately 40,000 to 80,000 tons. It is expected
that this expansion will be fully operational by the end of fiscal 1998.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion and analysis should be read in conjunction with
the attached consolidated financial statements and notes thereto, and with the
Company's audited financial statements and notes thereto for the fiscal year
ended June 30, 1997.
The usage of fertilizer in the Company's trade territory is highly
seasonal, and the Company's quarterly results reflect the fact that in the
Company's markets significantly more fertilizer is purchased in the spring.
Significant portions of the Company's net sales and operating income are
generated in the last four months of the Company's fiscal year (March through
June). Since interim period operating results reflect the seasonal nature of
the Company's business, they may not necessarily be indicative of results
expected for the full fiscal year. In addition, quarterly results can vary
significantly from year to year due to a number of factors, including weather-
related shifts in planting schedules and purchase patterns. The Company incurs
substantial expenditures for fixed costs throughout the year and substantial
expenditures for inventory in advance of the spring planting season.
The Company's results for the quarter ended September 30, 1997, reflect
weak pricing for all of the Company's nitrogen products. The lower prices are
primarily the result of China's continued ban on urea imports, which
contributed to a 20% decrease in the price of urea during the current period
as compared to the same prior year period. As the price of urea decreased,
the prices for the Company's other nitrogen products decreased as well.
Although prices remain at depressed levels, by quarter's end some of the
pressure on urea prices had eased due to production curtailments in certain
producing countries.
During the current year quarter, sales volumes for the Company's nitrogen
products were below expectations. Nitrogen solutions sales volumes decreased
92% during the current period as customers were hesitant to participate in the
Company's traditional fall-fill programs due to fertilizer pricing
uncertainties. This resulted in the Company placing increased tonnage in
consignment inventory during the current period. This consignment inventory
will be purchased by customers later in the year at then prevailing market
prices. Sales volumes for the Company's ammonium nitrate were lower during the
current year primarily due to unusually dry weather in the Company's trade
area. This dry weather adversely impacted the application of ammonium nitrate
to hay and forage crops during August and September of the current quarter.
Ammonia and urea sales volumes for the Company increased during the quarter
primarily due to the additional tons available for sale through the acquisition
of the First Mississippi Corporation ("First Mississippi") fertilizer assets in
December 1996. Phosphate prices were lower during the current year due to soft
international demand which has been present in the marketplace since early
summer 1997. The Company's potash sales prices and volumes increased during
the current year as a result of increased domestic demand and the additional
tonnage available for sale due to the Company's acquisition of Trans-Resources,
Inc.'s potash assets in mid-August 1996.
With world grain inventories remaining at low levels, most industry
analysts expect increases in U.S. planted acres and fertilizer consumption
during 1998. Despite the prospect of higher U.S. demand, the near-term nitrogen
price outlook remains uncertain due to the present worldwide urea supply/demand
imbalance and the expected availability of new nitrogen capacity in early 1998.
During the current year, the Company experienced increased costs at its
Yazoo City nitrogen facility due to a scheduled biennial maintenance turnaround.
In July of the current year, the Company's DAP facility in Pascagoula also
incurred $.5 million in costs as a result of hurricane Danny.
In May 1995, the Board of Directors authorized the purchase of up to
1,500,000 shares of the Company's common stock in the open market or in
privately negotiated transactions. In March 1996, the Board of Directors
authorized the Company to repurchase up to 1,500,000 additional shares. As of
September 30, 1997, the Company had repurchased a total of 2,420,809 shares
pursuant to those authorizations. The unused authorization to repurchase
579,191 shares remains available to the Company.
Effective October 1, 1997, the Company became a member of the Phosphate
Chemicals Export Association, Inc., a Webb-Pomerene corporation known as
PhosChem. All of the Company's export sales of DAP will be made through
PhosChem. Also effective October 1, 1997, all domestic sales of DAP will be
made through the Company's internal sales staff. The Company has ended its
exclusive DAP marketing agreement with Atlantic Fertilizer & Chemical
Corporation.
RESULTS OF OPERATIONS
Following are summaries of the Company's sales results by product
categories:
<TABLE>
Three months ended
September 30,
---------------------
1997 1996
-------- --------
<S> <C> <C>
Net Sales (in thousands):
Nitrogen $ 57,982 $ 48,745
DAP 30,957 31,021
Potash 21,577 10,859
Other 396 665
-------- --------
Net Sales $110,912 $ 91,290
======== ========
Three months ended
September 30,
----------------------
1997 1996
-------- --------
<S> <C> <C>
Tons Sold (in thousands):
Nitrogen:
Ammonia 150 7
Ammonium nitrate 115 139
Urea 118 58
Nitrogen solutions 11 131
Nitric acid 10 8
----- -----
Total Nitrogen 404 343
DAP 178 171
Potash 267 143
Three months ended
September 30,
---------------------
1997 1996
------- -------
<S> <C> <C>
Average Sales Price Per Ton:
Nitrogen $ 143 $ 142
DAP $ 174 $ 181
Potash $ 81 $ 76
</TABLE>
NET SALES. Net sales increased 21% to $110.9 million for the quarter ended
September 30, 1997, from $91.3 million for the quarter ended September 30, 1996,
primarily as a result of increased sales volumes for nitrogen and potash,
partially offset by lower sales prices for nitrogen. Nitrogen fertilizer sales
increased 19% due primarily to an 18% increase in tons sold. The volume
increase is attributable to an increase in anhydrous ammonia and urea sales due
to the acquisition of First Mississippi in December 1996, which was partially
offset by lower sales volumes of nitrogen solutions and ammonium nitrate.
Nitrogen solution sales volumes decreased 92% during the current year as a
result of customers not enrolling in the Company's traditional fall-fill
program due to pricing uncertainties. Ammonium nitrate sales volumes were
lower due to unusually dry weather in the Company's trade area in August and
September of the current quarter. During the current quarter, the Company's
sales prices for its anhydrous ammonia, ammonium nitrate, urea and nitrogen
solutions decreased 26%, 12%, 20% and 18%, respectively; however, due to the
sales product mix, the Company's weighted average price per ton of nitrogen
increased 1% for the current quarter. DAP sales did not change significantly
for the current quarter. The Company's 4% increase in DAP sales volumes was
offset by a 4% decrease in sales price. The lower sales price is
attributable to soft international demand which has been present in the
marketplace since early summer 1997. Potash sales increased 99% as a result
of an 87% increase in tons sold and a 7% increase in the average price per
ton. These increases are the result of continued strengthening in domestic
markets and the additional tons available for sale in the current year as a
result of the potash acquisitions made in mid-August 1996.
TRADING LOSS ON BROKERED PRODUCT. Following the First Mississippi
acquisition in December 1996, the Company routinely trades or brokers ammonia
in the open market. During the current quarter, brokered ammonia sales of $6.3
million and purchases of approximately $6.6 million resulted in a $.3 million
net loss. The Company brokered approximately 41,000 short tons.
COST OF PRODUCTS SOLD. Cost of products sold increased to $87.7 million
for the quarter ended September 30, 1997, from $63.4 million for the quarter
ended September 30, 1996. As a percentage of net sales, cost of products sold
increased to 79% from 69%. This increase in cost of products sold, as a
percentage of net sales in the current year quarter, is primarily the result of
decreases in the average sales price of each of the Company's nitrogen products.
During the quarter, the Company also had increased sales of potash products
which have a higher percentage of cost to sales. The Company also incurred
higher costs per ton for its nitrogen products in the current year quarter
primarily as a result of higher maintenance and labor costs due to a scheduled
biennial maintenance turnaround at the Company's Yazoo City nitrogen facility
and higher depreciation associated with the First Mississippi acquisition.
These factors were partially offset by lower natural gas costs which were
achieved through gains on short-term natural gas futures contracts. During the
current year quarter, DAP costs per ton decreased slightly as a result of lower
costs for phosphate rock, partially offset by higher sulfur costs. Phosphate
rock costs decreased due to the Company's phosphate rock supply contract, which
is based on the phosphate rock costs incurred by certain other domestic
phosphate producers and the financial performance of the Company's phosphate
operations.
SELLING EXPENSES. Selling expenses decreased to $5.7 million for the
quarter ended September 30, 1997, from $6.3 million for the quarter ended
September 30, 1996. This decrease was primarily the result of lower delivery
expense incurred during the current quarter due to lower sales volumes for
nitrogen solutions and ammonium nitrate. This decrease was partially offset by
higher costs for sales administration and storage. Sales administration costs
increased due to the Company's potash acquisitions and the acquisition of First
Mississippi's fertilizer businesses made during the prior fiscal year. The
higher storage cost was primarily due to an increase in tonnage placed into
storage at the Company's outlying storage facilities. As a percentage of net
sales, selling expenses decreased to 5% for the quarter ended September 30,
1997, from 7% for the quarter ended September 30, 1996.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased to $8.3 million for the quarter ended September 30, 1997, from $6.9
million for the quarter ended September 30, 1996. This increase was primarily
the result of the amortization of goodwill associated with the acquisition of
First Mississippi in December 1996. As a percentage of net sales, general and
administrative expenses decreased to 7% for the quarter ended September 30,
1997, from 8% for the quarter ended September 30, 1996.
OPERATING INCOME. As a result of the above factors, operating income
decreased to $8.9 million for the quarter ended September 30, 1997, from $14.7
million for the quarter ended September 30, 1996, a 40% decrease.
INTEREST, NET. For the quarter ended September 30, 1997, net interest
expense was $2.1 million compared to net interest income of $.4 million for the
quarter ended September 30, 1996. This increase in net interest expense was
primarily due to increased interest costs resulting from higher borrowing levels
during the current year. Additionally, the Company capitalized $2.0 million and
$.3 million of its interest costs for the quarters ended September 30, 1997, and
September 30, 1996, respectively.
INCOME TAX EXPENSE. For the quarter ended September 30, 1997, income tax
expense decreased to $3.1 million from $6.0 million for the quarter ended
September 30, 1996. This decrease was primarily the result of changes in
earnings during the current year. Also, during the current year, the Company
incurred a higher effective tax rate due to the nondeductible amortization of
goodwill. This increase was partially offset by a decrease in the Company's
effective state income tax rate during the current year.
NET INCOME. As a result of the foregoing, net income decreased to $4.3
million for the quarter ended September 30, 1997, from $9.3 million for the
quarter ended September 30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Company had cash and cash equivalents of $1.8
million, compared to $8.2 million at June 30, 1997, a decrease of $6.4 million.
OPERATING ACTIVITIES. For the three months ended September 30, 1997, net
cash used in operating activities was $4.7 million compared to $12.7 million for
the three months ended September 30, 1996.
INVESTING ACTIVITIES. Net cash used in investing activities was $30.5
million for the three months ending September 30, 1997, and $81.7 million for
the three months ended September 30, 1996, primarily reflecting capital
expenditures in those periods. During the current year period, capital
expenditures were $20.7 million compared to $56.6 million during the prior
year. The current year expenditures consisted of approximately $16.0 million
related to the Company's nitrogen expansion project at its Yazoo City facility,
approximately $1.0 million for the development of a new phosphogypsum disposal
facility at the Pascagoula facility, and approximately $1.0 million related to
the expansion of its manufacturing facilities at the Pascagoula facility. The
remaining $2.7 million was for normal improvements and modifications to the
Company's facilities. The current year period also included $1.0 million
related to the Company's investment in Farmland MissChem Limited compared to
$26.0 million during the prior year. These expenditures were partially offset
by the receipt of option payments relating to the Company's Florida phosphate
rock properties. At September 30, 1997, the Company also had $9.9 million in
restricted funds resulting from the Company's August 1997 issuance of $14.5
million in industrial revenue bonds. The proceeds from these bonds will be used
for the Company's development of a new phosphogypsum disposal facility at its
Pascagoula, Mississippi, DAP facility.
FINANCING ACTIVITIES. Net cash provided by financing activities was $28.8
million for the three months ended September 30, 1997, and $46.5 million for the
three months ended September 30, 1996. During the current year, the amounts
provided by financing activities included $112.9 million in debt proceeds, which
included $14.5 million in industrial revenue bonds, partially offset by $81.2
million in debt payments, and $2.7 million in cash dividends. During the prior
year, the amounts provided by financing activities included $69.2 million in
debt proceeds partially offset by $14.3 million in debt payments, $6.3 million
for the purchase of treasury stock and $2.1 million in cash dividends.
At September 30, 1997, the Company and its subsidiaries had unsecured
revolving credit facilities with Harris Trust and Savings Bank and a syndicate
of other commercial banks totaling $300 million. These facilities are five-year
facilities which mature on December 23, 2001, and bear interest at the Prime
Rate or at rates related to the London Interbank Offered Rate. At September 30,
1997, the Company had $261.6 million outstanding under these facilities, which
represented the maximum amount outstanding at any month end during the current
period. The Company also has a separate $5 million short-term line of credit
with another financial institution.
On October 23, 1997, the Company filed with the Securities and Exchange
Commission a registration statement relating to debt securities with an
aggregate principal amount of up to $300 million. The Company believes that
existing cash, cash generated from operations, current lines of credit and
anticipated sale of debt securities will be sufficient to satisfy its financing
requirements for is operations and its capital projects through fiscal 1998.
The Company estimates its capital expenditure requirements for the remainder of
fiscal 1998 to be approximately $100.0 million. The Company's major capital
projects include production expansions at its nitrogen facility in Yazoo City
and its DAP facility in Pascagoula. The Company's Pascagoula facility is also
constructing a new phosphogypsum disposal facility.
This report contains forward-looking statements. Readers are cautioned
that actual results may differ materially from such forward-looking statements.
Forward-looking statements involve risks and uncertainties, including, but not
limited to, the relative unpredictability of changes in general economic
conditions and other important factors affecting the fertilizer industry and
the Company as detailed under "Outlook and Uncertainties" and elsewhere in the
Company's annual report on Form 10-K for the fiscal year ended June 30, 1997,
which is on file with the Securities and Exchange Commission.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits filed as part of this report are listed below.
SEC Exhibit
Reference No. Description
Exhibit Index to Form 10-Q
10.14 Anhydrous Ammonia Purchase Agreement (AMRO) dated
as of October 18, 1996, among Mississippi
Chemical Corporation, Farmland Industries, Inc.,
and Farmland MissChem Limited whereby Mississippi
Chemical Corporation and Farmland Industries,
Inc., on an individual basis, will purchase
from Farmland MissChem Limited, a portion of the
total anhydrous ammonia output produced by its
facility located on the island of Trinidad in
The Republic of Trinidad and Tobago, which
Agreement will be in place during the term of
the AMRO permanent financing facility.
10.15 Anhydrous Ammonia Purchase Agreement (EX-IM)
dated as of October 18, 1996, among Mississippi
Chemical Corporation, Farmland Industries, Inc.,
and Farmland MissChem Limited whereby Mississippi
Chemical Corporation and Farmland Industries,
Inc., on an individual basis, will purchase
from Farmland MissChem Limited, a portion of the
total anhydrous ammonia output produced by its
facility located on the island of Trinidad in
The Republic of Trinidad and Tobago, which
Agreement will be in place during the term of
the EximBank permanent financing facility.
23 Consent of Arthur Andersen LLP; filed as Exhibit
23 to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1997, SEC
File No. 1-12217, and incorporated herein by
reference.
27 Financial Data Schedule.
(b) No reports on Form 8-K have been filed during the quarter for which
this report is filed.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MISSISSIPPI CHEMICAL CORPORATION
Date: October 29, 1997 /s/ Timothy A. Dawson
---------------- ---------------------
Timothy A. Dawson
Vice President - Finance
Date: October 29, 1997 /s/ Rosalyn B. Glascoe
---------------- ----------------------
Rosalyn B. Glascoe
Corporate Secretary
EXHIBIT 10.14
ANHYDROUS AMMONIA PURCHASE AGREEMENT (AMRO)
This ANHYDROUS AMMONIA PURCHASE AGREEMENT dated as of October 18, 1996, among
MISSISSIPPI CHEMICAL CORPORATION, a Mississippi corporation, together with its
successors and permitted assigns ("MCC"), FARMLAND INDUSTRIES, INC., a Kansas
corporation, together with its successors and permitted assigns ("Farmland"),
and FARMLAND MISSCHEM LIMITED, a limited liability company organized under
The Companies Ordinance of The Republic of Trinidad and Tobago, together with
its successors and permitted assigns ("Seller").
W I T N E S S E T H:
WHEREAS, Seller is developing and will own and operate an anhydrous ammonia
production facility which will be located on the island of Trinidad in The
Republic of Trinidad and Tobago, and which is expected to be capable of
producing approximately 650,000 tonnes of anhydrous ammonia per year; and
WHEREAS, Seller wishes to sell its total anhydrous ammonia output to MCC and
Farmland, and MCC and Farmland wish to purchase from Seller, each on an
individual but not joint basis, a portion of the total anhydrous ammonia
output produced by the Facility, in accordance with the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller, MCC and Farmland hereby mutually agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions.
Each of the following capitalized terms when used herein shall have the
meaning indicated below:
"Accumulation Account" means a notional account established for each
Buyer on the books of Seller to which are credited (a) all Excess
payments made by such Buyer pursuant to Section 2.6.1 and (b) all
Dollar Credits earned by such Buyer pursuant to Section 2.5.2.
"Adjusted Price" means the Ammonia Market Price less five percent (5%).
"Agreement" means this Anhydrous Ammonia Purchase Agreement dated as of
October 18, 1996, among MCC, Farmland and Seller, including all Exhibits
hereto, as such may be amended, supplemented, restated, novated, renewed
or modified from time to time.
"Ammonia Floor Price" means $(confidential treatment has been
requested) USD per tonne of Delivered Product or Deemed Delivered
Product for the period from the date hereof until the Facility 2
Conversion Date and thereafter, with respect to each Year, means the
Ammonia Floor Price per tonne for Delivered Product or Deemed Delivered
Product as determined in accordance with Exhibit A hereto.
"Ammonia Market Price" means, as of any particular date, the price for
anhydrous ammonia determined in accordance with Section 2.6.3.
"Bill of Lading" means a bill of lading to be issued by the master of
each Buyer's Vessel promptly after the completion of loading of such
Buyer's Vessel setting forth (a) the respective dates and times of
commencement and completion of loading of Buyer's Vessel; (b) the total
quantity of Delivered Product; and (c) such other information as may be
required pursuant to the charter party for the Buyer's Vessel and
otherwise pursuant to applicable law and shipping industry practice.
"Business Day" means a day on which business by and among banks may be
carried on in The Republic of Trinidad and Tobago, New York City,
Mississippi and Missouri, but in no event shall it include a Saturday
or a Sunday.
"Buyer" means either MCC or Farmland, as the case may be, and "Buyers"
means both MCC and Farmland.
"Buyer-Caused Shutdown" means a shutdown of the Facility caused solely
by failure of a Buyer to take Tendered Product at a time when Seller's
Storage Tanks are full, which failure was not excused by Limited Force
Majeure.
"Buyer Payment Failure" means the failure of a Buyer, which failure
has continued for at least ten (10) Business Days, to make payment for
Tendered Product or Deemed Delivered Product when due under this
Agreement.
"Buyer's Vessels" means any ocean-going vessels owned, controlled or
hired by a Buyer for purposes of transporting Product.
"Challenged Amount" has the meaning set forth in Section 3.3.
"Commencement Date" means the date following the earlier to occur of
Provisional Completion or Substantial Completion.
"Consent and Agreement" has the meaning set forth in Section 11.1.3.
"Coordinating Committee" means the Savonetta Pier Coordinating
Committee comprised of representatives of NGC, NEC, Seller and any
other participant as may be advised by NGC and NEC from time to time.
"Deemed Delivered Product" means, with respect to any particular time
period during which a Buyer Payment Failure is not in existence, the
aggregate tonnage of Product that Seller was unable to produce during
such time period solely as a result of a Buyer-Caused Shutdown;
provided that Deemed Delivered Product for any particular time period
shall not exceed the product of (a) 1600 tonnes and (b) the number of
days or portions thereof (rounded to the nearest hour) of Buyer-Caused
Shutdown within such period.
"Deliver," "Delivery" and "Deliveries" refer to the actual
transmission of Product by Seller to a Buyer at the Delivery Point.
"Delivered Product" means Product actually Delivered to a Buyer
pursuant to this Agreement. For the sole purpose of determining which
week's Ammonia Market Price is in effect, Product is considered to be
Delivered Product upon completion of loading of the Buyer's Vessel upon
which such Product is to be transported, as evidenced by the relevant
Bill of Lading.
"Delivery Point" means the flanged inlet pipe of a Buyer's Vessel.
"Delivery Shortfall" has the meaning set forth in Section 3.1.4.
"Dollar" or "$" means United States dollars.
"Dollar Credit" means the credit, expressed in Dollars, accorded to a
particular Buyer pursuant to Section 2.5.2 in connection with all
payments by such Buyer wiht respect to Deemed Delivered Product.
"EPC Contract" means that certain Engineering, Procurement and
Construction Contract dated as of December 20, 1995, between
Seller and The M. W. Kellogg Company, as may be amended, supplemented,
novated, suspended, restated or modified from time to time.
"Excess" has the meaning set forth in Section 2.6.1.
"Eximbank Conversion Date" means the date of funding of a direct term
loan for the Facility provided by the Export-Import Bank of the United
States pursuant to the Financing Documents to which it is a party.
"Facility" means the anhydrous ammonia production facility (including
the Seller's Storage Tanks and the facilities used to transport Product
to the Delivery Point) to be designed, financed, constructed, owned,
maintained and operated by Seller on the island of Trinidad in The
Republic of Trinidad and Tobago, with a designed production capacity of
approximately 650,000 tonnes of anhydrous ammonia per Year.
"Facility 2 Conversion Date" means the date on which Facility 1 (as
defined in the Financing Documents) is converted to Facility 2 (as
defined in the Financing Documents).
"Farmland" has the meaning set forth in the preamble to this Agreement.
"Financing Documents" has the meaning set forth in Section 11.1.3.
"Force Majeure" means any occurrence or circumstance (a) which is
beyond the control of the Party affected thereby, (b) which is not the
result of fault or negligence on the part of the Party affected
thereby, and (c) whose effects could not have been avoided or overcome
by exercise of due diligence and reasonable efforts on the part of the
Party affected thereby. Lack of funds, market fluctuations or
unfavorable market conditions shall not under any circumstances be
considered Force Majeure.
"Lender" means the financial institutions providing construction and/or
permanent financing for the Facility pursuant to the Financing
Documents.
"Limited Force Majeure" means any occurrence or circumstance that would
be encompassed within the definition of Force Majeure set forth in this
Agreement, excepting:
(a) maritime casualties to Buyers' Vessels (other than as
such casualties result from war),
(b) weather conditions to the extent such conditions impair
movement of Buyers' Vessels,
(c) labor disturbances carried out by Buyers' employees or
the crew of Buyers' Vessels,
(d) commercial unavailability of suitable ocean transport
vessels with which to take timely receipt of Tendered
Product (other than as such unavailability results from
war), or
(e) unavailability of the port or other receiving facilities
at which Buyer's Vessels are intended to be unloaded.
"MCC" has the meaning set forth in the preamble to this Agreement.
"Month" means, with respect to the first Month after the Commencement
Date, the period commencing on the Commencement Date and ending at 12:00
midnight on the last day of the first complete calendar month to follow
the Commencement Date, and thereafter means each succeeding calendar
Month during the remainder of the Term.
"NEC" means The National Energy Corporation Limited, a company
incorporated under the laws of The Republic of Trinidad and Tobago,
together with its successors and permitted assigns.
"NGC" means The National Gas Company of Trinidad and Tobago Limited, a
company incorporated under the laws of The Republic of Trinidad and
Tobago, together with its successors and permitted assigns.
"Parties" means Buyers and Seller, collectively, and "Party" means
either of the Buyers or Seller, individually, as the case may be.
"Performing Buyer" means, with respect to any period in which there is
a Buyer Payment Failure, the Buyer which did not commit the Buyer
Payment Failure.
"Pier" has the meaning set forth in the Pier and Harbour Usage
Agreement.
"Pier and Harbour Usage Agreement" means the Pier and Harbour Usage
Agreement, dated October 18, 1996, among NGC, NEC and Seller as such
may be amended, supplemented, novated, suspended, extended or modified
from time to time.
"PLIPDECO" means the Point Lisas Industrial Port Development
Corporation Limited, a company duly incorporated under The Companies
Ordinance Chapter 31 No. 1 of the 1950 Laws of Trinidad and Tobago and
having its registered office at PLIPDECO House, Orinoco Drive, Point
Lisas Industrial Estate, Couva, in the Island of Trinidad.
"Product" means anhydrous ammonia produced at the Facility.
"Provisional Completion" means the Facility's achievement of
"Provisional Completion" in accordance with (and as that term is
defined in) the EPC Contract.
"Seller's Storage Tanks" means the two 40,000-tonne capacity tanks
in which Seller stores Product.
"Substantial Completion" means the Facility's achievement of
"Substantial Completion" in accordance with (and as that term is
defined in) the EPC Contract.
"Tendered Product" means, without double counting, Product that is
immediately available in Seller's Storage Tanks for Delivery to a
Buyer.
"Term" means the period commencing on the date hereof and expiring on
the earlier of the Eximbank Conversion Date or the date which is
twelve (12) Years after the Facility 2 Conversion Date (unless
terminated pursuant to Section 8.2).
"Tonnage Credit" means the credit, expressed in tonnes, accorded to a
particular Buyer pursuant to Section 2.5.1 in connection with all
payments made by such Buyer with respect to Tendered Product which is
not Delivered but paid for pursuant to Section 2.3 or Section 2.4.
Tonnage Credits must be used against the next available Product
delivery.
"tonne" means a metric ton of 2,204.6 pounds.
"Year" means, with respect to the first Year, the period commencing on
the Commencement Date and ending at 12:00 midnight on the last day of
the twelfth Month to follow the Commencement Date, and thereafter means
each succeeding twelve (12) Month period during the remainder of the
Term.
ARTICLE 2
PURCHASE AND SALE OF PRODUCT
2.1 Purchase and Sale; Right of First Refusal. Seller agrees to sell and
Deliver Product to Buyers, and each Buyer agrees to purchase and accept
Delivery of Product from Seller, in accordance with the terms and
conditions of this Agreement. Buyers shall have a right of first
refusal to all Product and, except as expressly authorized by this
Agreement, Seller shall not sell or otherwise transfer Product to any
person or entity other than Buyers without Buyers' prior written
consent. During the pendency of any Buyer-Caused Shutdown, or a
Buyer Payment Failure, or an event of default by a Buyer, or an event
of Force Majeure which prevents or impairs a Buyer's performance of
its obligations hereunder, Seller may sell Product otherwise reserved
for such Buyer pursuant to this Agreement and in excess of amounts
which such Buyer is then able to accept from Seller to persons or
entities other than such Buyer for the duration of such event
(including completion of delivery of Product sold to a third party
which sale commenced prior to the end of such event), provided that
Seller shall first have offered such Product to the other Buyer.
2.2 Scheduling of Production and Lifting.
2.2.1 Scheduling of Seller's Production. Seller shall use reasonable
efforts, under normal operating conditions for the Facility, to
maximize Facility output and maintain a steady flow of Tendered
Product, but the Parties acknowledge that production may be
reduced as necessary from time to time to accommodate scheduled
or unscheduled maintenance, emergencies or other operational
constraints. Seller shall plan periods of scheduled maintenance
with Buyers so as to coordinate, to the greatest extent
practicable, and subject to Seller's obligation under the
Financing Documents, reductions in the Facility output with
Buyers' scheduling requirements for Deliveries of Product.
Buyers and Seller shall cooperate to the extent practicable
in the scheduling of Deliveries to take into account the
shipping requirements of each Buyer and the capacity of
Seller's Storage Tanks.
2.2.2 Scheduling of Buyers' Lifting. It is recognized by the Parties
that due to the location of the Facility, ocean transportation
will be required to deliver Tendered Product to the markets
where it will be sold or used by each Buyer. Transportation
and other activities on Buyers' side of the Delivery Point
will be Buyers' sole responsibility. Additionally, and without
prejudice to each Buyer's respective obligations under
Sections 2.3 and 2.4, it is recognized by the Parties that due
to the differing sizes of Buyer's Vessels, it will not be
possible for each Buyer to purchase exactly fifty percent (50%)
of the Tendered Product available at any given time or over any
given period of time. Prior to the Commencement Date, Buyers
will determine which Buyer will take delivery of the first
Tendered Product (and if they are unable to agree, it will be
Farmland), and thereafter, it will be the obligation of
whichever Buyer has taken Delivery in the aggregate of the
lesser amount of Tendered Product to take Delivery of and pay
for the next available Tendered Product.
2.3 Buyer's Obligation Prior to Buyer-Caused Shutdown or Buyer Payment
Failure. During any period in which no Buyer-Caused Shutdown or Buyer
Payment Failure is in effect, Buyers shall take Delivery of and pay for
all Tendered Product, in accordance with the provisions of this
Agreement, except to the extent that such obligation may be suspended
by the occurrence of Limited Force Majeure; provided, however, that the
failure of Buyers to take Delivery of Tendered Product shall not be an
event of default for so long as Buyers perform their obligations under
Section 2.4.1 or 2.4.2 as applicable.
2.4 Effect of Buyer-Caused Shutdown and Buyer Payment Failure.
2.4.1 Buyers' Obligations During Buyer-Caused Shutdown. In addition
to the obligations of Buyers under Section 2.3, but subject to
Section 2.4.2, each Buyer shall, with respect to each
Buyer-Caused Shutdown, pay for (a) fifty percent (50%) of the
Deemed Delivered Product and (b) fifty percent (50%) of the
undelivered Tendered Product attributable to such Buyer-Caused
Shutdown. Each such amount shall be priced as provided in
Section 2.6 and shall be billed and payable pursuant to
Article 3.
2.4.2 Rights and Obligations of Performing Buyer after Buyer Payment
Failure. During the existence of a Buyer Payment Failure, in
lieu of the obligations set forth in Sections 2.3 and 2.4.1,
but subject to Lender's rights under the Consent and Agreement,
the Performing Buyer shall be obligated, except to the extent
that such obligation may be suspended by Limited Force Majeure,
to take or pay for if not taken the lesser of (a) all Tendered
Product or (b) 27,000 tonnes per Month of Tendered Product
(appropriately prorated for any Month in which a Buyer Payment
Failure is in effect for only part of the Month). Upon
occurrence and during the existence of a Buyer Payment Failure,
the Performing Buyer shall have a right of first refusal to
purchase all or any portion of Tendered Product in excess of
27,000 tonnes per Month. All amounts of Tendered Product taken
or paid for pursuant to this Section 2.4.2 shall be priced as
set forth in Section 2.6.1 and shall be billed and payable
pursuant to Article 3.
2.5 Buyers' Make-Up Rights.
2.5.1 Tonnage Credits. Each Buyer shall receive a Tonnage Credit in
connection with all payments made by such Buyer, pursuant to
Section 2.3 or Section 2.4, for Tendered Product which is not
Delivered Product, provided such payment is not then held in
the escrow account for Challenged Amounts described in Section
3.3. Such credit shall entitle whichever Buyer made such
payment to receive, without further payment, future Delivery of
the same tonnage of Product as was covered by the payment in
question in accordance with Section 3.2.2. Any Tonnage Credits
outstanding as of the end of the Term shall entitle the Buyer
holding such Tonnage Credits to take Delivery of a corresponding
tonnage of Tendered Product at Buyer's convenience at or after
the end of the Term, but upon reasonable advance notice to
Seller, until such Tonnage Credits have been fully utilized.
2.5.2 Dollar Credits. Each Buyer shall receive a Dollar Credit (which
shall be credited to such Buyer's Accumulation Account) in
connection with all payments made by such Buyer with respect to
Deemed Delivered Product, provided such payment is not then held
in the escrow account for Challenged Amounts described in
Section 3.3. Such credit shall entitle whichever Buyer made
such payment to apply the Dollar amount of the Dollar Credit
from time to time as a credit against the price then applicable
to future Tendered Product in accordance with Section 3.2.3.
2.6 Price.
2.6.1 Price for Tendered Product.
(a) Until the earlier of (i) the end of the twelfth Year
following the Facility 2 Conversion Date or (ii) the date
on which the construction and term debt financing
outstanding under the Financing Documents have been
paid in full, the price for Tendered Product shall be
the greater of (x) the Adjusted Price, or (y) the Ammonia
Floor Price; provided, however, that for any shipment for
which a Buyer pays the Ammonia Floor Price, the amount
("Excess") which such Buyer paid in excess of the
Adjusted Price shall be credited to such Buyer's
Accumulation Account.
(b) Upon the expiration of the period described in Section
2.6.1(a), the price for Tendered Product shall be the
Adjusted Price.
2.6.2 Price for Deemed Delivered Product. The price of Deemed
Delivered Product shall be the Ammonia Floor Price.
2.6.3 Ammonia Market Price. The Ammonia Market Price in effect for any
given calendar week will equal the average of the averages of the
high and low "FOB Caribbean" posted prices per tonne for
anhydrous ammonia for the previous week as quoted by each of
Green Markets, Fertilizer Market Intelligence Weekly, Fertecon
Weekly Ammonia Fax, and FMB Fertilizer Bulletin. If any of the
foregoing publications should cease publication, cease quoting
such prices or change the method by which it determines such
weekly average prices, the Parties shall agree on a replacement
publication if available. Pending determination of a replacement
publication or methodology for determining the Ammonia Market
Price, the Ammonia Market Price shall be determined by reference
to the remaining publications.
ARTICLE 3
BILLING AND PAYMENT
3.1 Billing.
3.1.1 Delivered Product. Not later than three Business Days after
completion of each Delivery to a Buyer, Seller shall prepare and
deliver to such Buyer a billing statement (together with the
relevant Bill of Lading) showing (a) the total tonnage of
Delivered Product included in such Delivery (b) the price per
tonne payable for such quantity of Delivered Product, determined
in accordance with Section 2.6, and (c) the aggregate price
owing in respect of such Delivered Product.
3.1.2 Undelivered Tendered Product -- No Buyer Payment Failure. If a
Buyer-Caused Shutdown has occurred and has continued for a period
of ten (10) days or more, and no Buyer Payment Failure has
occurred and is then continuing, Seller may prepare and deliver
to each Buyer (on no more than one occasion during each separate
period of Buyer-Caused Shutdown) a billing statement showing
(a) the total tonnage of Tendered Product which is in Seller's
Storage Tanks and available for Delivery, (b) the price per
tonne payable for such quantity of Tendered Product, determined
in accordance with Section 2.6 as if such Product had been
Delivered on the date of such billing statement, and (c) the
aggregate price owing by such Buyer pursuant to Section 2.4.1
in respect of fifty percent (50%) of such Tendered Product.
3.1.3 Deemed Delivered Product -- No Buyer Payment Failure. If a
Buyer-Caused Shutdown has occurred, and no Buyer Payment Failure
has occurred and is then continuing, Seller may prepare and
deliver to each Buyer not more frequently than every seven (7)
days during such Buyer-Caused Shutdown and after the end of such
Buyer-Caused Shutdown, a billing statement showing (a) the total
tonnage of Deemed Delivered Product attributable to the portion
of the Buyer-Caused Shutdown covered by such billing statement,
and (b) the aggregate price owing by each Buyer, pursuant to
Section 2.4.1, in respect of such tonnage of Deemed Delivered
Product.
3.1.4 Undelivered Tendered Product During Buyer Payment Failure.
Following the end of any Month during which (a) a Buyer Payment
Failure was in effect and (b) the Performing Buyer took Delivery
of less than the quantity of Tendered Product which it was
obligated to take or pay for pursuant to Section 2.4.2 (the
amount in tonnes by which such Buyer's obligations for any such
Month exceeded the amount of Tendered Product actually Delivered
to that Buyer during such Month being referred to herein as a
"Delivery Shortfall"), Seller may prepare and deliver to the
Performing Buyer (in addition to any other billing statements
submitted for the corresponding Month in accordance with this
Section 3.1) a billing statement showing (i) the amount of the
Delivery Shortfall, (ii) the price per tonne payable for the
Delivery Shortfall, determined in accordance with Section 2.6 as
if the undelivered Tendered Product had been Delivered on the
last day of the relevant Month, and (iii) the aggregate price
owing by such Buyer with respect to such Delivery Shortfall.
3.1.5 Statement of Credits. Each billing statement delivered by
Seller to a Buyer shall be accompanied by a statement of
(a) the positive balance, if any, in such Buyer's Accumulation
Account, and (b) the total amount of any outstanding Tonnage
Credit available to such Buyer.
3.2 Payment.
3.2.1 Generally.
(a) Each Buyer shall make payment of the amount owing
(taking into account any credits to which such Buyer
may be entitled and which such Buyer then elects to
use) pursuant to a billing statement delivered to such
Buyer pursuant to Section 3.1 not later than thirty
(30) days after the date of such billing statement.
(b) Each Buyer shall, subject to Sections 3.2.2, 3.2.3 and
3.3, make payments to Seller in Dollars in immediately
available funds at the account to be established with
LaSalle National Bank, a bank organized under the laws of
the United States of America, as Revenue Trustee.
3.2.2 Application of Tonnage Credits. Each Buyer, provided such Buyer
is not then in default under this Agreement, shall apply any
unused Tonnage Credit as an offset against the total charges
(regardless of the current price per tonne) applicable to an
equivalent number of tonnes of Tendered or Delivered Product for
which such Buyer has been billed in the next successive billing
statements rendered pursuant to this Agreement.
3.2.3 Application of Accumulation Account Balance. Each Buyer,
provided such Buyer is not then in default under this Agreement,
shall be entitled to apply any positive balance in its
Accumulation Account as an offset against charges shown as owing
from such Buyer in any particular billing statement rendered
pursuant to this Agreement; provided, however, that any positive
balance in a Buyer's Accumulation Account from time to time may
be applied, in whole or in part, only when the Adjusted Price
exceeds the Ammonia Floor Price by an amount greater than $10
per tonne. Whenever the Adjusted Price reflected in any billing
statement to a Buyer exceeds the Ammonia Floor Price by an
amount greater than $10 per tonne, such Buyer shall pay the
Ammonia Floor Price plus $10 for each tonne covered by such
billing statement, with the difference to the Adjusted Price
being satisfied by a debit to such Buyer's Accumulation Account
to the extent that there is a positive balance.
3.3 Disputes. Each Buyer shall inform Seller and the other Buyer by written
notice of any objection that it may have with respect to any billing
statement (including any credits applicable thereto) within ten (10)
days following such Buyer's receipt of such statement, identifying in
such notice the amount of the stated charges which it questions or
challenges (the "Challenged Amount"). Failure by a Buyer to notify
Seller of a dispute with respect to any particular billing statement
within the time period set forth in the first sentence of this Section
3.3 shall constitute acceptance by such Buyer of Seller's determination
of the payment amount due in respect of the Product or Deemed Delivered
Product covered by such statement. Each Buyer shall pay the total
undisputed amount of each billing statement rendered to such Buyer
within the thirty (30) day time period specified for payments in
Section 3.2.1(a) and, for so long as Seller is subject to the
Financing Documents, shall deposit any Challenged Amount in an
interest-bearing escrow account to be maintained by a security
trustee designated by the Lender. Upon resolution of the dispute, the
Challenged Amount, with a proportionate share of accrued interest
thereon, shall be distributed to the Party or Parties found to be
entitled thereto. The Parties shall work in good faith to resolve any
dispute concerning a Challenged Amount, and if they are unable to
resolve such dispute within sixty (60) days following delivery of a
Buyer's written objections to Seller, either Party may initiate
arbitration with respect to such dispute in accordance with Article 10.
If there is no dispute by Seller with respect to any particular
Challenged Amount, Seller shall credit the appropriate Buyer for all
payments, if any, received in respect of such Challenged Amount and
shall reduce the amount owing from such Buyer with respect to the
billing statement in dispute by such Challenged Amount. No billing
dispute between Seller and either Buyer, or between Buyers, shall
relieve either Buyer or both Buyers, as applicable, of any of its or
their obligations, as the case may be, hereunder.
3.4 Late Payments. Late payments by a Buyer or Seller (including any
Challenged Amounts not required to be deposited in escrow pursuant to
Section 3.3 which are subsequently determined to be owing) will bear
interest from the date the payment was due until paid in full at an
annual interest rate equal to the rate posted by CitiBank, N.A., from
time to time as its floating reference commercial lending rate plus two
percent (2%).
3.5 Currency. Seller shall invoice Buyers for payment, and Buyers shall
make payments to Seller, in Dollars.
3.6 Refund of Positive Accumulation Account Balance. If the Term hereof
ends on a date other than the Eximbank Conversion Date, any positive
balance outstanding in a Buyer's Accumulation Account existing as of
the end of the Term shall entitle such Buyer to a refund from Seller
equal to the full Dollar amount of such balance, payable not later
than thirty (30) days after the end of the Term.
ARTICLE 4
COMMENCEMENT
4.1 Commencement of Product Deliveries. Until the Commencement Date,
(a) Buyers shall have no obligation under this Agreement to accept or
pay for Product, and (b) Seller shall have no obligation under this
Agreement to tender Product to Buyers. After the end of the Term,
Buyers shall have no obligation under this Agreement to accept
Product and Seller shall have no obligation under this Agreement to
tender Product to Buyers, other than fulfillment of Seller's
obligation to deliver Product as a result of unused Tonnage Credits.
'
ARTICLE 5
DELIVERY, TITLE, SHIPPING AND CARGO HANDLING
5.1 Delivery. Seller shall deliver all Product to be sold pursuant to this
Agreement to the Delivery Point.
5.2 Title; Risk of Loss; Custody and Control. Title to, risk of loss for,
and custody and control of Tendered Product will pass from Seller to
Buyer when such Product is transferred to Buyer's side of the Delivery
Point.
5.3 Scheduling and Loading Procedures. Each Buyer shall comply with all
policies, rules and regulations (including the procedures for scheduling
the arrival, loading and departure of such Buyer's Vessels), promulgated
from time to time by the Coordinating Committee.
5.4 Compliance with Governmental Regulations. Each Buyer shall assure that
all Buyer's Vessels utilized by it to take Delivery of Product shall at
all times be operated in full compliance with all applicable national
and local laws and regulations of The Republic of Trinidad and Tobago.
Seller shall have the right to reject any Buyer's Vessel not in
compliance herewith and therewith.
5.5 Port Dues and Freight Tax. All normal Port dues and any and all other
charges (including any items chargeable to Seller under the Pier and
Harbour Usage Agreement) shall be for Buyer's account, including
expenses, if any, of shifting berth if such shifting is attributable to
such Buyer's Vessel or such Buyer. Any freight tax imposed on or
required to be withheld by a Buyer by the Government of The Republic
of Trinidad and Tobago or any subdivision or agency thereof, and any
interest or penalty relating thereto assessed to be payable thereon
shall be the sole responsibility of the affected Buyer, and each Buyer
shall hold Seller harmless against and indemnified from such freight
tax relating to such Buyer's purchases.
ARTICLE 6
MEASUREMENT
6.1 Measurement. The quantity of Product loaded on each Buyer's Vessel will
be determined by a draft survey of such Buyer's Vessel conducted by an
independent surveyor selected and paid by Buyer and reasonably
acceptable to Seller. Tendered Product in Seller's Storage Tanks will
be measured in accordance with normal commercial practices in the
ammonia industry.
ARTICLE 7
FORCE MAJEURE
7.1 Suspension of Performance. If an event of Force Majeure precludes any
Party from performing any of its obligations under this Agreement, other
than failure to make a payment when due, then the obligation of such
Party will be suspended to the extent made necessary by such event of
Force Majeure, and such Party will give prompt notice to the other
Parties of the nature and estimated duration of such Force Majeure event
and its anticipated effect on the affected Party's ability to perform.
7.2 Action to Overcome Force Majeure. The Party affected by an event of
Force Majeure shall take or perform any and all reasonable actions
necessary and appropriate to mitigate and overcome the effects of the
event of Force Majeure; provided, however, that a Party will not be
required or obligated to settle strikes or other labor disputes in order
to overcome an event of Force Majeure or to mitigate its effect, or to
perform any other action in order to overcome an event of Force Majeure
if and to the extent such action would be contrary to, constitute a
violation of or in any way be prevented by any applicable laws or
permits.
ARTICLE 8
DEFAULT
8.1 Events of Default. An event of default will be deemed to have taken
place upon the occurrence of any of the following:
8.1.1 Failure to Pay. A Party shall fail to make payments of any
amount which is due to another Party hereunder and such failure
extends for more than ten (10) Business Days after the due date
for such payment;
8.1.2 Failure to Perform Other Obligations. A Party shall fail to
perform any of its covenants or obligations (other than
obligations which are subject to Section 8.1.1) under and in
accordance with this Agreement and such failure is not cured
within thirty (30) days after the defaulting Party's receipt of
notice of such failure from the non-defaulting Party (or such
longer period as may be reasonably necessary to effectuate such
cure if the default is not curable within thirty (30) days but
not exceeding ninety (90) days after the defaulting Party's
receipt of notice of such failure from the non-defaulting
Party); provided that appropriate steps to effectuate such
cure are diligently commenced and pursued by the defaulting
Party.
8.1.3 Insolvency. A Party (a) shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as
such debts become due, (b) shall file a petition in bankruptcy,
(c) shall have a trustee or receiver appointed with respect to
all or a portion of its properties or affairs or (d) shall have
a petition in bankruptcy filed against it and shall not have
caused such filing to be dismissed within ninety (90) days
thereafter.
8.2 Remedies. Subject in all respects to Lender's rights under the Consent
and Agreement, upon the occurrence and continuance of an event of
default as provided in Section 8.1 which remains uncured beyond the
applicable cure period, the non-defaulting Party may suspend performance
of its obligations hereunder with respect to the defaulting Party,
terminate this Agreement with respect to the defaulting Party, or take
any other action or pursue any other right available to it under this
Agreement; provided, however, that no such termination shall be
effective unless an additional notice stating the intent to terminate
the Agreement is delivered to the Party in default at least sixty (60)
days prior to the effective date of the termination and the event of
default in question continues on such stated effective date, and
provided, further, that an event of default by one Buyer shall not
constitute an event of default by the other Buyer or create any right
in the other Buyer to suspend performance or terminate this Agreement.
Remedies provided herein are cumulative and the exercise of one shall
not limit, waive or preclude the exercise of other remedies in this
Section 8.2 or elsewhere in this Agreement, at the same time or
subsequently.
8.3 Mitigation of Damages. Each Party shall make reasonable efforts to
mitigate the damages incurred by it resulting from an event of default
hereunder by another Party. Upon the failure of either Buyer to take
or pay for Tendered Product as required by this Agreement, Seller shall,
subject to the rights of first refusal of the other Buyer pursuant to
Section 2.1 or Section 2.4.2, as applicable, make commercially
reasonable efforts to sell such Tendered Product to another purchaser,
and the proceeds to Seller of any such sale (after deduction of any
reasonable expenses incurred by Seller in arranging such sale) shall
be credited against any amount for which the non-performing Buyer
would otherwise be liable to Seller.
ARTICLE 9
LIABILITY
9.1 Limitation of Liability. In no event shall any Party be liable for lost
profit, lost business, lost savings or other incidental, consequential,
special, punitive or other indirect damages of any kind or nature
whatsoever arising out of any failure by such Party to perform its
obligations under this Agreement.
9.2 Disclaimer of Warranties. SELLER MAKES NO EXPRESS OR IMPLIED WARRANTY
WITH RESPECT TO THE PRODUCT. SELLER SHALL HAVE NO LIABILITY ON ACCOUNT
OF DAMAGES SUFFERED BY ANY THIRD PARTIES IN CONNECTION WITH ANY DEFECT
IN THE TENDERED PRODUCT. SELLER DISCLAIMS ANY LIABILITY DERIVING FROM
THE MANUFACTURING, LIFTING, STORAGE, SALE, RESALE, USE OR PROCESSING OF
PRODUCT AS WELL AS ANY LIABILITY DERIVING FROM INHERENT HAZARDS OF
PRODUCT.
9.3 Indemnification by Buyer. Each Buyer agrees to indemnify, hold harmless
and defend Seller, the Lender(s) and their respective affiliates,
officers, directors, members, shareholders, employees, agents and
contractors from and against any and all losses, damages, injuries,
liabilities, penalties, fines, judgments, claims, demands, suits,
actions, costs and expenses (including reasonable attorneys' fees)
resulting from, arising out of or connected with (a) all injuries to
persons or damages to property which are caused by the negligent action
or inaction or willful misconduct of such Buyer or the operators of
such Buyer's Vessels, or (b) the lifting, shipping, storage, resale,
use or processing by any person of Product purchased by such Buyer
from Seller, or (c) demurrage claims or other liability of Seller
vis-a-vis NGC and NEC arising as a result of the activities of such
Buyer or such Buyer's Vessels at the Pier.
9.4 Indemnification by Seller. Seller agrees to indemnify, hold harmless
and defend each Buyer from and against any and all losses, damages,
injuries, liabilities, penalties, fines, judgments, claims, demands,
suits, actions, costs and expenses (including reasonable attorneys'
fees) resulting from, arising out of or connected with all injuries
to person, damages to property, or demurrage charges which are caused
by the negligent action or inaction or willful misconduct of Seller
in connection with the operation of the Facility or under the Pier
and Harbour Usage Agreement.
ARTICLE 10
ARBITRATION; PERFORMANCE NOTWITHSTANDING DISPUTES
10.1 Arbitration. Any controversy or claim arising out of or relating to
this Agreement which cannot be resolved by the Parties shall be
settled by arbitration. Arbitration shall be conducted in Washington,
D.C., U.S.A. The Seller and the affected Buyer (or both Buyers acting
jointly, as appropriate) shall each designate one arbitrator, and the
two such designated arbitrators shall mutually agree upon and
designate a third arbitrator. Subject to the foregoing, arbitration
shall be conducted in accordance with rules and procedures of the
United Nations Commission on International Trade Law. Judgment upon
the award rendered by the arbitrators may be entered in any Court
having jurisdiction thereof. Arbitration awards shall be final.
10.2 Performance Notwithstanding Disputes. No Party shall suspend or
terminate performance of its obligations hereunder as a result of a
dispute subject to arbitration under Section 10.1 prior to the final
resolution of such dispute (including a reasonable time for
implementation of the arbitrators' decision) in accordance with
Section 10.1.
ARTICLE 11
MISCELLANEOUS
11.1 Assignment and Assumption of Obligations.
11.1.1 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their
permitted successors and assigns.
11.1.2 Consent. No Party may assign or transfer its interest and/or
obligations herein (and any such putative assignment shall, at
the option of any other Party, be null and void ab initio)
unless such Party first obtains the written consent of the
other Parties, which consent shall not be unreasonably
withheld.
11.1.3 Collateral Assignment. Seller may assign this Agreement to the
Lender as collateral for the obligations of Seller to the Lender
under the documents evidencing such financing (the "Financing
Documents") and to any parties acquiring the Facility by way of
foreclosure or through the exercise of other remedies of the
Lender, all pursuant to the terms of an agreement (the "Consent
and Agreement") to be entered into among Seller, each Buyer and
the Lender upon terms and conditions to be mutually agreed upon.
11.2 No Amendment. No amendment or modification of the terms of this
Agreement shall be binding on any Party unless such amendment is reduced
to writing and signed by each Party.
11.3 Entire Agreement. This Agreement and the documents referred to herein
or delivered pursuant hereto contain the entire agreement and
understanding between Seller and Buyers as to the subject matter hereof
and supersedes all prior negotiations and understandings between them.
11.4 Notices. Any notice required or permitted to be given hereunder shall
be put in writing and shall be deemed to have been given when received
by the Party to whom directed at the following address:
If to Seller: Farmland MissChem Limited
11-13 Victoria Avenue
Port of Spain, Trinidad and Tobago
Attention: John Prijatel, President
If to Buyers: Mississippi Chemical Corporation
P.O. Box 388
Highway 49 East
Yazoo City, MS 39194
Attention: Rosalyn Glascoe, Corporate Secretary
Farmland Industries, Inc.
3315 North Oak Trafficway
P.O. Box 7305, Dept. 65
Kansas City, MO 64116
Attention: Vice President, Crop Production
All notices shall be effective upon receipt. Any Party may change its
address specified above by giving notice to the other Parties in
accordance with the provisions of this Section 11.4.
11.5 Waiver. No waiver by any Party of any of the terms or conditions
herein contained shall be effective unless the same shall be in writing
and signed by the Party against whom the waiver is sought to be
enforced and then shall be effective only in the specific instance
and for the specific purpose for which given.
11.6 Choice of Law. This Agreement will in all respects be governed by and
interpreted under the substantive laws of the State of New York, U.S.A.
applicable to contracts and transactions entirely entered into and
performed in the State of New York, without giving effect to conflicts
of laws provisions thereof, except Section 5-1401 of the New York
General Obligations Law. The parties expressly agree that the U.N.
Convention for the International Sale of Goods shall be inapplicable
to the construction of or in any dispute arising with respect to this
Agreement.
11.7 Captions. All captions are inserted for convenience only, and will not
affect any construction or interpretation of this Agreement.
11.8 Severability. Any provision of this Agreement which is or may become
prohibited or unenforceable, as a matter of law or regulation, will be
ineffective only to the extent of such prohibition or unenforceability
and shall not invalidate the remaining provisions hereof if the
essential purposes of this Agreement may be given effect despite the
prohibition or unenforceability of the affected provision.
11.9 No Third Party Beneficiaries. This Agreement is intended solely for
the benefit of the Parties hereto. Nothing in this Agreement shall be
construed to create any duty to, standard of care with reference to,
liability to, or right of suit or action in, any person not a Party to
this Agreement.
11.10 No Legal Interest. This Agreement is intended to operate as an
agreement only and nothing herein contained shall be deemed to create
or be construed as creating a joint venture, an agency or a
partnership among Seller and Buyers, or a demise or grant, or giving
any Buyer any legal interest in the Facility or the Pier or any part
thereof.
11.11 Counterparts. This Agreement may be signed in counterparts but in such
case shall be deemed to be effective only after each of the signatories
shall have signed and delivered to the other signatories a counterpart
hereof.
IN WITNESS WHEREOF, the Parties have caused their duly authorized
representatives to execute this Agreement as of the date first set forth
above.
FARMLAND MISSCHEM LIMITED
("SELLER")
By: /s/ Robert W. Honse
-------------------
Robert W. Honse
Director
MISSISSIPPI CHEMICAL CORPORATION
("BUYER")
By:/s/ Timothy A. Dawson
---------------------
Timothy A. Dawson
Vice President - Finance
FARMLAND INDUSTRIES, INC.
("BUYER")
By:/s/ Robert W. Honse
-------------------
Robert W. Honse
Executive Vice President and
Chief Operating Officer
Ag Input Businesses
EXHIBIT A
The Ammonia Floor Price per tonne applicable with respect to each shipment
of Delivered Product and each payment for Deemed Delivered Product shall be
determined by reference to the "Ammonia Floor Price Matrix" which will be
established as of the Facility 2 Conversion Date and will not be subject to
change thereafter, except as set forth in the proviso to this sentence, and
which will depict the Ammonia Floor Price applicable with respect to each Year
at "Production Rates" ranging from (confidential treatment has been requested)
to (confidential treatment has been requested) of (confidential treatment has
been requested) tonnes per day; provided, however, that in the event that, at
any time, the taxing authority of The Republic of Trinidad and Tobago shall
have determined that the proper rate of withholding tax applicable to the
Project should be greater or lesser than 10% (or any subsequent change in said
withholding tax rate, including, without limitation, a change back to 10%),
then in any and each such case, the Ammonia Floor Price Matrix shall be
recalculated, taking into account the new withholding tax rate as an element
of the factor titled "Interest Rate," as explained more fully below. The
"Production Rate" applicable for each shipment of Delivered Product and for
each purchase of Deemed Delivered Product, as the case may be, will be
determined by dividing (i) the average daily production of Product from the
Facility during the 180 days immediately preceding the date of shipment of
such Delivered Product (or, in the case of a purchase of Deemed Delivered
Product, the average daily production of Product from the Facility during
the 180 days immediately preceding the last full day of production at the
Facility prior to the Buyer-Caused Shutdown giving rise to such purchase) by
(ii) (confidential treatment has been requested) tonnes; provided, however,
that for shipments of Product or purchases of Deemed Delivered Product
during the 90 days following the Facility 2 Conversion Date, the Production
Rate shall be determined by dividing (x) the average daily production of
Product from the Facility during the 60-day period immediately preceding the
Facility 2 Conversion Date by (y) (confidential treatment has been requested)
tonnes. The format of the Ammonia Floor Price Matrix is set forth below:
(confidential treatment has been requested for the Production Rate percentages
in the following table)
<TABLE>
(SAMPLE)
AMMONIA FLOOR PRICE MATRIX*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Produc Year Year Year Year Year Year Year Year Year Year Year Year
tion 1 2 3 4 5 6 7 8 9 10 11 12
Rate
** $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
% $ $ $ $ $ $ $ $ $ $ $ $
4
% $ $ $ $ $ $ $ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $ $
%***
<FN>
* Production Rates shall be rounded upwards to the nearest one percent (1%)
bracket in the case of rates higher that one-half of one percent (>.50%)
and shall be rounded downwards to the nearest one percent (1%) bracket
in the case of rates equal to or less than one-half of one percent (.50%).
** or more
*** or less
</TABLE>
With respect to each Year and each Production Rate depicted in the Ammonia
Floor Price Matrix, the indicated applicable Ammonia Floor Price will be
determined as of the Facility 2 Conversion Date utilizing Seller's financial
model (the "Model"), a copy of which is attached as Schedule 1 to this
Exhibit A. The Ammonia Floor Price will be the calculated lowest price for
anhydrous ammonia which will provide the Seller with revenues which, after
deduction of all cash operating costs and expenses, are equal to (confidential
treatment has been requested) of financing costs (principal and interest),
Capital Expenditures and catalyst purchase expenses, all as reflected in the
Model. The Model calculates Ammonia Floor Prices generally in accordance with
the following formula:
(confidential treatment has been requested)
-------------------------------------------
Ammonia Floor Price = (confidential treatment has been requested)
where:
"P" means scheduled annual principal amortization amount;
"I" means scheduled annual interest payments and any withholding
tax payments to be made in such year;
"CapEx" means scheduled annual Capital Expenditures;
"CP" means scheduled annual catalyst purchase expenses (not major
catalyst replacement);
"OR" means Production Rate; and
"MC" means scheduled annual cash operating costs and expenses
The above formula is for illustrative purposes only. More specifically, the
Ammonia Floor Prices are those ammonia prices calculated by the Model when the
Model is run to yield a (confidential treatment has been requested) DSCR. In
connection with the calculation of the Ammonia Floor Price, the following
"Variable Inputs" to the Model will be utilized:
1. Total Debt, which will be the total principal amount of the
permanent financing for the Facility;
2. Interest Rate, which will be the weighted average rate of interest
applicable to the permanent financing for the Facility and which
incorporates any withholding tax payments to be made in such year;
3. Production Rate, which will be 5% increments from (confidential
treatment has been requested) to (confidential treatment has been
requested) where 100% reflects average daily production of
(confidential treatment has been requested) tonnes; and
4. Capital Expenditures, which will be the sum of (i) capital
expenditures presently reflected in the Model and (ii) any
performance bonuses payable to The M.W. Kellogg Company under the
EPC Contract which will be amortized over such period as Lender
and Buyers shall agree.
All other Model Inputs are fixed and have the values presently reflected in
the Model.
The parties agree that they shall, within thirty days of the date of this
Agreement, provide as Exhibit B hereto a printout of the Model, showing
formulas used, as the official, agreed Model. In the event of any dispute
over the calculation of the Ammonia Floor Price Matrix, Exhibit B shall
control.
EXHIBIT B
[Exhibit B Is a Computer Diskette.]
EXHIBIT 10.15
ANHYDROUS AMMONIA PURCHASE AGREEMENT (EX-IM)
This ANHYDROUS AMMONIA PURCHASE AGREEMENT dated as of October 18, 1996, among
MISSISSIPPI CHEMICAL CORPORATION, a Mississippi corporation, together with its
successors and permitted assigns ("MCC"), FARMLAND INDUSTRIES, INC., a Kansas
corporation, together with its successors and permitted assigns ("Farmland"),
and FARMLAND MISSCHEM LIMITED, a limited liability company organized under
The Companies Ordinance of The Republic of Trinidad and Tobago, together with
its successors and permitted assigns ("Seller").
W I T N E S S E T H:
WHEREAS, Seller is developing and will own and operate an anhydrous ammonia
production facility which will be located on the island of Trinidad in The
Republic of Trinidad and Tobago, and which is expected to be capable of
producing approximately 650,000 tonnes of anhydrous ammonia per year; and
WHEREAS, Seller wishes to sell its total anhydrous ammonia output to MCC and
Farmland, and MCC and Farmland wish to purchase from Seller, each on an
individual but not joint basis, a portion of the total anhydrous ammonia
output produced by the Facility, in accordance with the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller, MCC and Farmland hereby mutually agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions.
Each of the following capitalized terms when used herein shall have the
meaning indicated below:
"Accumulation Account" means a notional account established for each
Buyer on the books of Seller which shall be equal to the sum of (a) any
positive balance in such Buyer's Prior Contract Accumulation Account
existing as of the end of the term of the Prior Contract, (b) all Excess
payments made by such Buyer pursuant to Section 2.6.1 and (c) all Dollar
Credits earned by such Buyer pursuant to Section 2.5.2.
"Adjusted Price" means the Ammonia Market Price less five percent (5%).
"Agreement" means this Anhydrous Ammonia Purchase Agreement dated as of
October 18, 1996, among MCC, Farmland and Seller, including all Exhibits
hereto, as such may be amended, supplemented, restated, novated, renewed
or modified from time to time.
"Ammonia Floor Price" means the price per tonne for Delivered Product
or Deemed Delivered Product for the applicable Year set forth in the
following table:
<TABLE>
YEAR PRICE
<S> <C>
1 $(confidential treatment has been requested) USD
2 $(confidential treatment has been requested) USD
3 $(confidential treatment has been requested) USD
4 $(confidential treatment has been requested) USD
5 $(confidential treatment has been requested) USD
6 $(confidential treatment has been requested) USD
7 $(confidential treatment has been requested) USD
8 $(confidential treatment has been requested) USD
9 $(confidential treatment has been requested) USD
10 $(confidential treatment has been requested) USD
11 $(confidential treatment has been requested) USD
12 $(confidential treatment has been requested) USD
</TABLE>
"Ammonia Market Price" means, as of any particular date, the price for
anhydrous ammonia determined in accordance with Section 2.6.3.
"Bill of Lading" means a bill of lading to be issued by the master of
each Buyer's Vessel promptly after the completion of loading of such
Buyer's Vessel setting forth (a) the respective dates and times of
commencement and completion of loading of Buyer's Vessel; (b) the total
quantity of Delivered Product; and (c) such other information as may be
required pursuant to the charter party for the Buyer's Vessel and
otherwise pursuant to applicable law and shipping industry practice.
"Business Day" means a day on which business by and among banks may be
carried on in The Republic of Trinidad and Tobago, New York City,
Mississippi and Missouri, but in no event shall it include a Saturday
or a Sunday.
"Buyer" means either MCC or Farmland, as the case may be, and "Buyers"
means both MCC and Farmland.
"Buyer-Caused Shutdown" means a shutdown of the Facility caused solely
by failure of a Buyer to take Tendered Product at a time when Seller's
Storage Tanks are full, which failure was not excused by Limited Force
Majeure.
"Buyer Payment Failure" means the failure of a Buyer, which failure has
continued for at least ten (10) Business Days, to make payment for
Tendered Product or Deemed Delivered Product when due under this
Agreement.
"Buyer's Vessels" means any ocean-going vessels owned, controlled or
hired by a Buyer for purposes of transporting Product.
"Challenged Amount" has the meaning set forth in Section 3.3.
"Commencement Date" means the date of funding of a direct term loan
for the Facility provided by the Export-Import Bank of the United
States pursuant to the Financing Documents to which it is a party.
"Consent and Agreement" has the meaning set forth in Section 11.1.3.
"Coordinating Committee" means the Savonetta Pier Coordinating
Committee comprised of representatives of NGC, NEC, Seller and any
other participant as may be advised by NGC and NEC from time to time.
"Deemed Delivered Product" means, with respect to any particular time
period during which a Buyer Payment Failure is not in existence, the
aggregate tonnage of Product that Seller was unable to produce during
such time period solely as a result of a Buyer-Caused Shutdown; provided
that Deemed Delivered Product for any particular time period shall not
exceed the product of (a) 1600 tonnes and (b) the number of days or
portions thereof (rounded to the nearest hour) of Buyer-Caused Shutdown
within such period.
"Deliver," "Delivery" and "Deliveries" refer to the actual
transmission of Product by Seller to a Buyer at the Delivery Point.
"Delivered Product" means Product actually Delivered to a Buyer
pursuant to this Agreement. For the sole purpose of determining which
week's Ammonia Market Price is in effect, Product is considered to be
Delivered Product upon completion of loading of the Buyer's Vessel
upon which such Product is to be transported, as evidenced by the
relevant Bill of Lading.
"Delivery Point" means the flanged inlet pipe of a Buyer's Vessel.
"Delivery Shortfall" has the meaning set forth in Section 3.1.4.
"Dollar" or "$" means United States dollars.
"Dollar Credit" means the credit, expressed in Dollars, accorded to a
particular Buyer pursuant to Section 2.5.2 in connection with all
payments made by such Buyer with respect to Deemed Delivered Product.
"EPC Contract" means that certain Engineering, Procurement and
Construction Contract dated as of December 20, 1995, between Seller and
The M. W. Kellogg Company, as may be amended, supplemented, novated,
suspended, restated or modified from time to time.
"Excess" has the meaning set forth in Section 2.6.1.
"Facility" means the anhydrous ammonia production facility (including
the Seller's Storage Tanks and the facilities used to transport Product
to the Delivery Point) to be designed, financed, constructed, owned,
maintained and operated by Seller on the island of Trinidad in The
Republic of Trinidad and Tobago, with a designed production capacity of
approximately 650,000 tonnes of anhydrous ammonia per Year.
"Farmland" has the meaning set forth in the preamble to this Agreement.
"Financing Documents" has the meaning set forth in Section 11.1.3.
"Force Majeure" means any occurrence or circumstance (a) which is
beyond the control of the Party affected thereby, (b) which is not the
result of fault or negligence on the part of the Party affected thereby,
and (c) whose effects could not have been avoided or overcome by
exercise of due diligence and reasonable efforts on the part of the
Party affected thereby. Lack of funds, market fluctuations or
unfavorable market conditions shall not under any circumstances be
considered Force Majeure.
"Lender" means the financial institutions providing construction and/or
permanent financing for the Facility pursuant to the Financing
Documents.
"Limited Force Majeure" means any occurrence or circumstance that would
be encompassed within the definition of Force Majeure set forth in this
Agreement, excepting:
(a) maritime casualties to Buyers' Vessels (other than as
such casualties result from war),
(b) weather conditions to the extent such conditions impair
movement of Buyers' Vessels,
(c) labor disturbances carried out by Buyers' employees or
the crew of Buyers' Vessels,
(d) commercial unavailability of suitable ocean transport
vessels with which to take timely receipt of Tendered
Product (other than as such unavailability results from
war), or
(e) unavailability of the port or other receiving facilities
at which Buyer's Vessels are intended to be unloaded.
"MCC" has the meaning set forth in the preamble to this Agreement.
"Month" means, with respect to the first Month after the Commencement
Date, the period commencing on the Commencement Date and ending at 12:00
midnight on the last day of the first complete calendar month to follow
the Commencement Date, and thereafter means each succeeding calendar
Month during the remainder of the Term.
"NEC" means The National Energy Corporation Limited, a company
incorporated under the laws of The Republic of Trinidad and Tobago,
together with its successors and permitted assigns.
"NGC" means The National Gas Company of Trinidad and Tobago Limited, a
company incorporated under the laws of The Republic of Trinidad and
Tobago, together with its successors and permitted assigns.
"Parties" means Buyers and Seller, collectively, and "Party" means
either of the Buyers or Seller, individually, as the case may be.
"Performing Buyer" means, with respect to any period in which there is
a Buyer Payment Failure, the Buyer which did not commit the Buyer
Payment Failure.
"Pier" has the meaning set forth in the Pier and Harbour Usage
Agreement.
"Pier and Harbour Usage Agreement" means the Pier and Harbour Usage
Agreement, dated October 18, 1996, between NGC, NEC and Seller as
such may be amended, supplemented, novated, suspended, extended or
modified from time to time.
"PLIPDECO" means the Point Lisas Industrial Port Development
Corporation Limited, a company duly incorporated under The Companies
Ordinance Chapter 31 No. 1 of the 1950 Laws of Trinidad and Tobago and
having its registered office at PLIPDECO House, Orinoco Drive, Point
Lisas Industrial Estate, Couva, in the Island of Trinidad.
"Prior Contract" means that certain Anhydrous Ammonia Purchase
Agreement of even date herewith among the parties to this Agreement, a
copy of which is attached as Exhibit A hereto.
"Prior Contract Accumulation Account" means the "Accumulation Account"
(as that term is defined in the Prior Contract) established for each
Buyer in accordance with the terms of the Prior Contract.
"Product" means anhydrous ammonia produced at the Facility.
"Seller's Storage Tanks" means the two 40,000-tonne capacity tanks
located at the Facility in which Seller stores Product.
"Tendered Product" means, without double counting, Product that is
immediately available in Seller's Storage Tanks for Delivery to a
Buyer.
"Term" means the period commencing on the date hereof and expiring on
the date which is twelve (12) Years after the Commencement Date (unless
terminated pursuant to Section 8.2).
"Tonnage Credit" means the credit, expressed in tonnes, accorded to a
particular Buyer pursuant to Section 2.5.1 in connection with all
payments made by such Buyer with respect to Tendered Product which is
not Delivered but paid for pursuant to Section 2.3 or Section 2.4.
"tonne" means a metric ton of 2,204.6 pounds.
"Year" means, with respect to the first Year, the period commencing on
the Commencement Date and ending at 12:00 midnight on the last day of
the twelfth Month to follow the Commencement Date, and thereafter means
each succeeding twelve (12) Month period during the remainder of the
Term.
ARTICLE 2
PURCHASE AND SALE OF PRODUCT
2.1 Purchase and Sale; Right of First Refusal. Seller agrees to sell and
Deliver Product to Buyers, and each Buyer agrees to purchase and accept
Delivery of Product from Seller, in accordance with the terms and
conditions of this Agreement. Buyers shall have a right of first
refusal to all Product and, except as expressly authorized by this
Agreement, Seller shall not sell or otherwise transfer Product to any
person or entity other than Buyers without Buyers' prior written
consent. During the pendency of any Buyer-Caused Shutdown, or a Buyer
Payment Failure, or an event of default by a Buyer, or an event of
Force Majeure which prevents or impairs a Buyer's performance of its
obligations hereunder, Seller may sell Product otherwise reserved for
such Buyer pursuant to this Agreement and in excess of amounts which
such Buyer is then able to accept from Seller to persons or entities
other than such Buyer for the duration of such event (including
completion of delivery of Product sold to a third party which sale
commenced prior to the end of such event), provided that Seller shall
first have offered such Product to the other Buyer.
2.2 Scheduling of Production and Lifting.
2.2.1 Scheduling of Seller's Production. Seller shall use reasonable
efforts, under normal operating conditions for the Facility, to
maximize Facility output and maintain a steady flow of Tendered
Product, but the Parties acknowledge that production may be
reduced as necessary from time to time to accommodate scheduled
or unscheduled maintenance, emergencies or other operational
constraints. Seller shall plan periods of scheduled maintenance
with Buyers so as to coordinate, to the greatest extent
practicable, and subject to Seller's obligation under the
Financing Documents, reductions in the Facility output with
Buyers' scheduling requirements for Deliveries of Product.
Buyers and Seller shall cooperate to the extent practicable in
the scheduling of Deliveries to take into account the shipping
requirements of each Buyer and the capacity of Seller's Storage
Tanks.
2.2.2 Scheduling of Buyers' Lifting. It is recognized by the Parties
that due to the location of the Facility, ocean transportation
will be required to deliver Tendered Product to the markets
where it will be sold or used by each Buyer. Transportation and
other activities on Buyers' side of the Delivery Point will be
Buyers' sole responsibility. Additionally, and without
prejudice to each Buyer's respective obligations under
Sections 2.3 and 2.4, it is recognized by the Parties that due
to the differing sizes of Buyer's Vessels, it will not be
possible for each Buyer to purchase exactly fifty percent (50%)
of the Tendered Product available at any given time or over any
given period of time. Prior to the Commencement Date, Buyers
will determine which Buyer will take delivery of the first
Tendered Product (and if they are unable to agree, it will be
Farmland), and thereafter, it will be the obligation of
whichever Buyer has taken Delivery in the aggregate of the
lesser amount of Tendered Product to take Delivery of and pay
for the next available Tendered Product.
2.3 Buyer's Obligation Prior to Buyer-Caused Shutdown or Buyer Payment
Failure. During any period in which no Buyer-Caused Shutdown or Buyer
Payment Failure is in effect, Buyers shall take Delivery of and pay for
all Tendered Product, in accordance with the provisions of this
Agreement, except to the extent that such obligation may be suspended by
the occurrence of Limited Force Majeure; provided, however, that the
failure of Buyers to take Delivery of Tendered Product shall not be an
event of default for so long as Buyers perform their obligations under
Section 2.4.1 or 2.4.2 as applicable.
2.4 Effect of Buyer-Caused Shutdown and Buyer Payment Failure.
2.4.1 Buyers' Obligations During Buyer-Caused Shutdown. In addition
to the obligations of Buyers under Section 2.3, but subject to
Section 2.4.2, each Buyer shall, with respect to each
Buyer-Caused Shutdown, pay for (a) fifty percent (50%) of the
Deemed Delivered Product and (b) fifty percent (50%) of the
undelivered Tendered Product attributable to such Buyer-Caused
Shutdown. Each such amount shall be priced as provided in
Section 2.6 and shall be billed and payable pursuant to
Article 3.
2.4.2 Rights and Obligations of Performing Buyer after Buyer Payment
Failure. During the existence of a Buyer Payment Failure, in
lieu of the obligations set forth in Sections 2.3 and 2.4.1, but
subject to Lender's rights under the Consent and Agreement, the
Performing Buyer shall be obligated, except to the extent that
such obligation may be suspended by Limited Force Majeure, to
take or pay for if not taken the lesser of (a) all Tendered
Product or (b) 27,000 tonnes per Month of Tendered Product
(appropriately prorated for any Month in which a Buyer Payment
Failure is in effect for only part of the Month). Upon
occurrence and during the existence of a Buyer Payment Failure,
the Performing Buyer shall have a right of first refusal to
purchase all or any portion of Tendered Product in excess of
27,000 tonnes per Month. All amounts of Tendered Product taken
or paid for pursuant to this Section 2.4.2 shall be priced as
set forth in Section 2.6.1 and shall be billed and payable
pursuant to Article 3.
2.5 Buyers' Make-Up Rights.
2.5.1 Tonnage Credits. Each Buyer shall receive a Tonnage Credit in
connection with all payments made by such Buyer, pursuant to
Section 2.3 or Section 2.4, for Tendered Product which is not
Delivered Product, provided such payment is not then held in the
escrow account for Challenged Amounts described in Section 3.3.
Such credit shall entitle whichever Buyer made such payment to
receive, without further payment, future Delivery of the same
tonnage of Product as was covered by the payment in question in
accordance with Section 3.2.2. Any Tonnage Credits outstanding
as of the end of the Term shall entitle the Buyer holding such
Tonnage Credits to take Delivery of a corresponding tonnage of
Tendered Product at Buyer's convenience at or after the end of
the Term, but upon reasonable advance notice to Seller, until
such Tonnage Credits have been fully utilized.
2.5.2 Dollar Credits. Each Buyer shall receive a Dollar Credit (which
shall be credited to such Buyer's Accumulation Account) in
connection with all payments made by such Buyer with respect to
Deemed Delivered Product, provided such payment is not then held
in the escrow account for Challenged Amounts described in
Section 3.3. Such credit shall entitle whichever Buyer made
such payment to apply the Dollar amount of the Dollar Credit
from time to time as a credit against the price then applicable
to future Tendered Product in accordance with Section 3.2.3.
2.6 Price.
2.6.1 Price for Tendered Product.
(a) Until the earlier of (i) the end of the twelfth Year or
(ii) the date on which the construction and term debt
financing outstanding under the Financing Documents have
been paid in full, the price for Tendered Product shall
be the greater of (x) the Adjusted Price, or (y) the
Ammonia Floor Price; provided, however, that for any
shipment for which a Buyer pays the Ammonia Floor Price,
the amount ("Excess") which such Buyer paid in excess of
the Adjusted Price shall be credited to such Buyer's
Accumulation Account.
(b) Upon the expiration of the period described in Section
2.6.1(a), the price for Tendered Product shall be the
Adjusted Price.
2.6.2 Price for Deemed Delivered Product. The price of Deemed
Delivered Product shall be the Ammonia Floor Price.
2.6.3 Ammonia Market Price. The Ammonia Market Price in effect for any
given calendar week will equal the average of the averages of the
high and low "FOB Caribbean" posted prices per tonne for
anhydrous ammonia for the previous week as quoted by each of
Green Markets, Fertilizer Market Intelligence Weekly, Fertecon
Weekly Ammonia Fax, and FMB Fertilizer Bulletin. If any of the
foregoing publications should cease publication, cease quoting
such prices or change the method by which it determines such
weekly average prices, the Parties shall agree on a replacement
publication if available. Pending determination of a
replacement publication or methodology for determining the
Ammonia Market Price, the Ammonia Market Price shall be
determined by reference to the remaining publications.
ARTICLE 3
BILLING AND PAYMENT
3.1 Billing.
3.1.1 Delivered Product. Not later than three Business Days after
completion of each Delivery to a Buyer, Seller shall prepare and
deliver to such Buyer a billing statement (together with the
relevant Bill of Lading) showing (a) the total tonnage of
Delivered Product included in such Delivery (b) the price per
tonne payable for such quantity of Delivered Product, determined
in accordance with Section 2.6, and (c) the aggregate price
owing in respect of such Delivered Product.
3.1.2 Undelivered Tendered Product -- No Buyer Payment Failure. If a
Buyer-Caused Shutdown has occurred and has continued for a
period of ten (10) days or more, and no Buyer Payment Failure
has occurred and is then continuing, Seller may prepare and
deliver to each Buyer (on no more than one occasion during
each separate period of Buyer-Caused Shutdown) a billing
statement showing (a) the total tonnage of Tendered Product
which is in Seller's Storage Tanks and available for Delivery,
(b) the price per tonne payable for such quantity of Tendered
Product, determined in accordance with Section 2.6 as if such
Product had been Delivered on the date of such billing
statement, and (c) the aggregate price owing by such Buyer
pursuant to Section 2.4.1 in respect of fifty percent (50%)
of such Tendered Product.
3.1.3 Deemed Delivered Product -- No Buyer Payment Failure. If a
Buyer-Caused Shutdown has occurred, and no Buyer Payment Failure
has occurred and is then continuing, Seller may prepare and
deliver to each Buyer not more frequently than every seven (7)
days during such Buyer-Caused Shutdown and after the end of such
Buyer-Caused Shutdown, a billing statement showing (a) the total
tonnage of Deemed Delivered Product attributable to the portion
of the Buyer-Caused Shutdown covered by such billing statement,
and (b) the aggregate price owing by each Buyer, pursuant to
Section 2.4.1, in respect of such tonnage of Deemed Delivered
Product.
3.1.4 Undelivered Tendered Product During Buyer Payment Failure.
Following the end of any Month during which (a) a Buyer Payment
Failure was in effect and (b) the Performing Buyer took Delivery
of less than the quantity of Tendered Product which it was
obligated to take or pay for pursuant to Section 2.4.2 (the
amount in tonnes by which such Buyer's obligations for any such
Month exceeded the amount of Tendered Product actually Delivered
to that Buyer during such Month being referred to herein as a
"Delivery Shortfall"), Seller may prepare and deliver to the
Performing Buyer (in addition to any other billing statements
submitted for the corresponding Month in accordance with this
Section 3.1) a billing statement showing (i) the amount of the
Delivery Shortfall, (ii) the price per tonne payable for the
Delivery Shortfall, determined in accordance with Section 2.6 as
if the undelivered Tendered Product had been Delivered on the
last day of the relevant Month, and (iii) the aggregate price
owing by such Buyer with respect to such Delivery Shortfall.
3.1.5 Statement of Credits. Each billing statement delivered by
Seller to a Buyer shall be accompanied by a statement of (a) the
positive balance, if any, in such Buyer's Accumulation Account,
and (b) the total amount of any outstanding Tonnage Credit
available to such Buyer.
3.2 Payment.
3.2.1 Generally.
(a) Each Buyer shall make payment of the amount owing (taking
into account any credits to which such Buyer may be
entitled and which such Buyer then elects to use)
pursuant to a billing statement delivered to such Buyer
pursuant to Section 3.1 not later than thirty (30) days
after the date of such billing statement.
(b) Each Buyer shall, subject to Sections 3.2.2, 3.2.3 and
3.3, make payments to Seller in Dollars in immediately
available funds at the account to be established with the
Chase Manhattan Bank, a New York State chartered bank, as
Revenue Trustee.
3.2.2 Application of Tonnage Credits. Each Buyer, provided such Buyer
is not then in default under this Agreement, shall be entitled
to apply any unused Tonnage Credit as an offset against the
total charges (regardless of the current price per tonne)
applicable to an equivalent number of tonnes of Tendered or
Delivered Product for which such Buyer has been billed in any
particular billing statement rendered pursuant to this
Agreement.
3.2.3 Application of Accumulation Account Balance. Each Buyer,
provided such Buyer is not then in default under this Agreement,
shall be entitled to apply any positive balance in its
Accumulation Account as an offset against charges shown as owing
from such Buyer in any particular billing statement rendered
pursuant to this Agreement; provided, however, that any positive
balance in a Buyer's Accumulation Account from time to time may
be applied, in whole or in part, only when the Adjusted Price
exceeds the Ammonia Floor Price by an amount greater than $10
per tonne. Whenever the Adjusted Price reflected in any billing
statement to a Buyer exceeds the Ammonia Floor Price by an
amount greater than $10 per tonne, such Buyer shall pay the
Ammonia Floor Price plus $10 for each tonne covered by such
billing statement, with the difference to the Adjusted Price
being satisfied by a debit to such Buyer's Accumulation
Account to the extent that there is a positive balance.
3.3 Disputes. Each Buyer shall inform Seller and the other Buyer by written
notice of any objection that it may have with respect to any billing
statement (including any credits applicable thereto) within ten (10)
days following such Buyer's receipt of such statement, identifying in
such notice the amount of the stated charges which it questions or
challenges (the "Challenged Amount"). Failure by a Buyer to notify
Seller of a dispute with respect to any particular billing statement
within the time period set forth in the first sentence of this Section
3.3 shall constitute acceptance by such Buyer of Seller's
determination of the payment amount due in respect of the Product or
Deemed Delivered Product covered by such statement. Each Buyer shall
pay the total undisputed amount of each billing statement rendered to
such Buyer within the thirty (30) day time period specified for
payments in Section 3.2.1(a) and, for so long as Seller is subject to
the Financing Documents, shall deposit any Challenged Amount in an
interest-bearing escrow account to be maintained by a security trustee
designated by the Lender. Upon resolution of the dispute, the
Challenged Amount, with a proportionate share of accrued interest
thereon, shall be distributed to the Party or Parties found to be
entitled thereto. The Parties shall work in good faith to resolve any
dispute concerning a Challenged Amount, and if they are unable to
resolve such dispute within sixty (60) days following delivery of a
Buyer's written objections to Seller, either Party may initiate
arbitration with respect to such dispute in accordance with
Article 10. If there is no dispute by Seller with respect to any
particular Challenged Amount, Seller shall credit the appropriate
Buyer for all payments, if any, received in respect of such
Challenged Amount and shall reduce the amount owing from such Buyer
with respect to the billing statement in dispute by such Challenged
Amount. No billing dispute between Seller and either Buyer, or
between Buyers, shall relieve either Buyer or both Buyers, as
applicable, of any of its or their obligations, as the case may be,
hereunder.
3.4 Late Payments. Late payments by a Buyer or Seller (including any
Challenged Amounts not required to be deposited in escrow pursuant to
Section 3.3 which are subsequently determined to be owing) will bear
interest from the date the payment was due until paid in full at an
annual interest rate equal to the rate posted by CitiBank, N.A., from
time to time as its floating reference commercial lending rate plus
two percent (2%).
3.5 Currency. Seller shall invoice Buyers for payment, and Buyers shall
make payments to Seller, in Dollars.
3.6 Refund of Positive Accumulation Account Balance. Any positive balance
outstanding in a Buyer's Accumulation Account existing as of the end of
the Term shall entitle such Buyer to a refund from Seller equal to the
full Dollar amount of such balance, payable not later than thirty (30)
days after the end of the Term.
ARTICLE 4
COMMENCEMENT
4.1 Commencement of Product Deliveries. Until the Commencement Date,
(a) Buyers shall have no obligation under this Agreement to accept or
pay for Product, and (b) Seller shall have no obligation under this
Agreement to tender Product to Buyers. After the end of the Term,
Buyers shall have no obligation under this Agreement to accept
Product and Seller shall have no obligation under this Agreement to
tender Product to Buyers, other than fulfillment of Seller's
obligation to deliver Product as a result of unused Tonnage Credits.
ARTICLE 5
DELIVERY, TITLE, SHIPPING AND CARGO HANDLING
5.1 Delivery. Seller shall deliver all Product to be sold pursuant to this
Agreement to the Delivery Point.
5.2 Title; Risk of Loss; Custody and Control. Title to, risk of loss for,
and custody and control of Tendered Product will pass from Seller to
Buyer when such Product is transferred to Buyer's side of the Delivery
Point.
5.3 Scheduling and Loading Procedures. Each Buyer shall comply with all
policies, rules and regulations (including the procedures for scheduling
the arrival, loading and departure of such Buyer's Vessels), promulgated
from time to time by the Coordinating Committee.
5.4 Compliance with Governmental Regulations. Each Buyer shall assure that
all Buyer's Vessels utilized by it to take Delivery of Product shall at
all times be operated in full compliance with all applicable national
and local laws and regulations of The Republic of Trinidad and Tobago.
Seller shall have the right to reject any Buyer's Vessel not in
compliance herewith and therewith.
5.5 Port Dues and Freight Tax. All normal Port dues and any and all other
charges (including any items chargeable to Seller under the Pier and
Harbour Usage Agreement) shall be for Buyer's account, including
expenses, if any, of shifting berth if such shifting is attributable
to such Buyer's Vessel or such Buyer. Any freight tax imposed on or '
required to be withheld by a Buyer by the Government of The Republic
of Trinidad and Tobago or any subdivision or agency thereof, and any
interest or penalty relating thereto assessed to be payable thereon
shall be the sole responsibility of the affected Buyer, and each Buyer
shall hold Seller harmless against and indemnified from such freight
tax relating to such Buyer's purchases.
ARTICLE 6
MEASUREMENT
6.1 Measurement. The quantity of Product loaded on each Buyer's Vessel
will be determined by a draft survey of such Buyer's Vessel conducted
by an independent surveyor selected and paid by Buyer and reasonably
acceptable to Seller. Tendered Product in Seller's Storage Tanks
will be measured in accordance with normal commercial practices in
the ammonia industry.
ARTICLE 7
FORCE MAJEURE
7.1 Suspension of Performance. If an event of Force Majeure precludes any
Party from performing any of its obligations under this Agreement, other
than failure to make a payment when due, then the obligation of such
Party will be suspended to the extent made necessary by such event of
Force Majeure, and such Party will give prompt notice to the other
Parties of the nature and estimated duration of such Force Majeure event
and its anticipated effect on the affected Party's ability to perform.
7.2 Action to Overcome Force Majeure. The Party affected by an event of
Force Majeure shall take or perform any and all reasonable actions
necessary and appropriate to mitigate and overcome the effects of the
event of Force Majeure; provided, however, that a Party will not be
required or obligated to settle strikes or other labor disputes in
order to overcome an event of Force Majeure or to mitigate its effect,
or to perform any other action in order to overcome an event of Force
Majeure if and to the extent such action would be contrary to,
constitute a violation of or in any way be prevented by any applicable
laws or permits.
ARTICLE 8
DEFAULT
8.1 Events of Default. An event of default will be deemed to have taken
place upon the occurrence of any of the following:
8.1.1 Failure to Pay. A Party shall fail to make payments of any
amount which is due to another Party hereunder and such failure
extends for more than ten (10) Business Days after the due date
for such payment;
8.1.2 Failure to Perform Other Obligations. A Party shall fail to
perform any of its covenants or obligations (other than
obligations which are subject to Section 8.1.1) under and in
accordance with this Agreement and such failure is not cured
within thirty (30) days after the defaulting Party's receipt of
notice of such failure from the non-defaulting Party (or such
longer period as may be reasonably necessary to effectuate such
cure if the default is not curable within thirty (30) days but
not exceeding ninety (90) days after the defaulting Party's
receipt of notice of such failure from the non-defaulting
Party); provided that appropriate steps to effectuate such
cure are diligently commenced and pursued by the defaulting
Party.
8.1.3 Insolvency. A Party (a) shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts
as such debts become due, (b) shall file a petition in
bankruptcy, (c) shall have a trustee or receiver appointed
with respect to all or a portion of its properties or affairs
or (d) shall have a petition in bankruptcy filed against it
and shall not have caused such filing to be dismissed within
ninety (90) days thereafter.
8.2 Remedies. Subject in all respects to Lender's rights under the Consent
and Agreement, upon the occurrence and continuance of an event of
default as provided in Section 8.1 which remains uncured beyond the
applicable cure period, the non-defaulting Party may suspend performance
of its obligations hereunder with respect to the defaulting Party,
terminate this Agreement with respect to the defaulting Party, or take
any other action or pursue any other right available to it under this
Agreement; provided, however, that no such termination shall be
effective unless an additional notice stating the intent to terminate
the Agreement is delivered to the Party in default at least sixty (60)
days prior to the effective date of the termination and the event of
default in question continues on such stated effective date, and
provided, further, that an event of default by one Buyer shall not
constitute an event of default by the other Buyer or create any right
in the other Buyer to suspend performance or terminate this Agreement.
Remedies provided herein are cumulative and the exercise of one shall
not limit, waive or preclude the exercise of other remedies in this
Section 8.2 or elsewhere in this Agreement, at the same time or
subsequently.
8.3 Mitigation of Damages. Each Party shall make reasonable efforts to
mitigate the damages incurred by it resulting from an event of default
hereunder by another Party. Upon the failure of either Buyer to take
or pay for Tendered Product as required by this Agreement, Seller shall,
subject to the rights of first refusal of the other Buyer pursuant to
Section 2.1 or Section 2.4.2, as applicable, make commercially
reasonable efforts to sell such Tendered Product to another purchaser,
and the proceeds to Seller of any such sale (after deduction of any
reasonable expenses incurred by Seller in arranging such sale) shall
be credited against any amount for which the non-performing Buyer
would otherwise be liable to Seller.
ARTICLE 9
LIABILITY
9.1 Limitation of Liability. In no event shall any Party be liable for lost
profit, lost business, lost savings or other incidental, consequential,
special, punitive or other indirect damages of any kind or nature
whatsoever arising out of any failure by such Party to perform its
obligations under this Agreement.
9.2 Disclaimer of Warranties. SELLER MAKES NO EXPRESS OR IMPLIED WARRANTY
WITH RESPECT TO THE PRODUCT. SELLER SHALL HAVE NO LIABILITY ON ACCOUNT
OF DAMAGES SUFFERED BY ANY THIRD PARTIES IN CONNECTION WITH ANY DEFECT
IN THE TENDERED PRODUCT. SELLER DISCLAIMS ANY LIABILITY DERIVING FROM
THE MANUFACTURING, LIFTING, STORAGE, SALE, RESALE, USE OR PROCESSING
OF PRODUCT AS WELL AS ANY LIABILITY DERIVING FROM INHERENT HAZARDS OF
PRODUCT.
9.3 Indemnification by Buyer. Each Buyer agrees to indemnify, hold harmless
and defend Seller, the Lender(s) and their respective affiliates,
officers, directors, members, shareholders, employees, agents and
contractors from and against any and all losses, damages, injuries,
liabilities, penalties, fines, judgments, claims, demands, suits,
actions, costs and expenses (including reasonable attorneys' fees)
resulting from, arising out of or connected with (a) all injuries to
person or damages to property which are caused by the negligent action
or inaction or willful misconduct of such Buyer or the operators of
such Buyer's Vessels, or (b) the lifting, shipping, storage, resale,
use or processing by any persons of Product purchased by such Buyer
from Seller, or (c) demurrage claims or other liability of Seller
vis-a-vis NGC and NEC arising as a result of the activities of such
Buyer or such Buyer's Vessels at the Pier.
9.4 Indemnification by Seller. Seller agrees to indemnify, hold harmless
and defend each Buyer from and against any and all losses, damages,
injuries, liabilities, penalties, fines, judgments, claims, demands,
suits, actions, costs and expenses (including reasonable attorneys'
fees) resulting from, arising out of or connected with all injuries
to person, damages to property, or demurrage charges which are caused
by the negligent action or inaction or willful misconduct of Seller
in connection with the operation of the Facility or under the Pier
and Harbour Usage Agreement.
ARTICLE 10
ARBITRATION; PERFORMANCE NOTWITHSTANDING DISPUTES
10.1 Arbitration. Any controversy or claim arising out of or relating to
this Agreement which cannot be resolved by the Parties shall be settled
by arbitration. Arbitration shall be conducted in Washington, D.C.,
U.S.A. The Seller and the affected Buyer (or both Buyers acting
jointly, as appropriate) shall each designate one arbitrator, and the
two such designated arbitrators shall mutually agree upon and designate
a third arbitrator. Subject to the foregoing, arbitration shall be
conducted in accordance with rules and procedures of the United Nations
Commission on International Trade Law. Judgment upon the award rendered
by the arbitrators may be entered in any Court having jurisdiction
thereof. Arbitration awards shall be final.
10.2 Performance Notwithstanding Disputes. No Party shall suspend or
terminate performance of its obligations hereunder as a result of a
dispute subject to arbitration under Section 10.1 prior to the final
resolution of such dispute (including a reasonable time for
implementation of the arbitrators' decision) in accordance with
Section 10.1.
ARTICLE 11
MISCELLANEOUS
11.1 Assignment and Assumption of Obligations.
11.1.1 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their
permitted successors and assigns.
11.1.2 Consent. No Party may assign or transfer its interest and/or
obligations herein (and any such putative assignment shall, at
the option of any other Party, be null and void ab initio)
unless such Party first obtains the written consent of the
other Parties, which consent shall not be unreasonably withheld.
11.1.3 Collateral Assignment. Seller may assign this Agreement to the
Lender as collateral for the obligations of Seller to the Lender
under the documents evidencing such financing (the "Financing
Documents") and to any parties acquiring the Facility by way of
foreclosure or through the exercise of other remedies of the
Lender, all pursuant to the terms of an agreement (the "Consent
and Agreement") to be entered into among Seller, each Buyer and
the Lender upon terms and conditions to be mutually agreed upon.
11.2 No Amendment. No amendment or modification of the terms of this
Agreement shall be binding on any Party unless such amendment is reduced
to writing and signed by each Party.
11.3 Entire Agreement. This Agreement and the documents referred to herein
or delivered pursuant hereto contain the entire agreement and
understanding between Seller and Buyers as to the subject matter hereof
and supersedes all prior negotiations and understandings between them.
11.4 Notices. Any notice required or permitted to be given hereunder shall
be put in writing and shall be deemed to have been given when received
by the Party to whom directed at the following address:
If to Seller: Farmland MissChem Limited
11-13 Victoria Avenue
Port of Spain, Trinidad and Tobago
Attention: John Prijatel, President
If to Buyers: Mississippi Chemical Corporation
P.O. Box 388
Highway 49 East
Yazoo City, MS 39194
Attention: Rosalyn Glascoe, Corporate Secretary
Farmland Industries, Inc.
3315 North Oak Trafficway
P.O. Box 7305, Dept. 65
Kansas City, MO 64116
Attention: Vice President, Crop Production
All notices shall be effective upon receipt. Any Party may change its
address specified above by giving notice to the other Parties in
accordance with the provisions of this Section 11.4.
11.5 Waiver. No waiver by any Party of any of the terms or conditions
herein contained shall be effective unless the same shall be in writing
and signed by the Party against whom the waiver is sought to be
enforced and then shall be effective only in the specific instance
and for the specific purpose for which given.
11.6 Choice of Law. This Agreement will in all respects be governed by and
interpreted under the substantive laws of the State of New York, U.S.A.
applicable to contracts and transactions entirely entered into and
performed in the State of New York, without giving effect to conflicts
of laws provisions thereof, except Section 5-1401 of the New York
General Obligations Law. The parties expressly agree that the U.N.
Convention for the International Sale of Goods shall be inapplicable to
the construction of or in any dispute arising with respect to this
Agreement.
11.7 Captions. All captions are inserted for convenience only, and will not
affect any construction or interpretation of this Agreement.
11.8 Severability. Any provision of this Agreement which is or may become
prohibited or unenforceable, as a matter of law or regulation, will be
ineffective only to the extent of such prohibition or unenforceability
and shall not invalidate the remaining provisions hereof if the
essential purposes of this Agreement may be given effect despite the
prohibition or unenforceability of the affected provision.
11.9 No Third Party Beneficiaries. This Agreement is intended solely for
the benefit of the Parties hereto. Nothing in this Agreement shall be
construed to create any duty to, standard of care with reference to,
liability to, or right of suit or action in, any person not a Party to
this Agreement.
11.10 No Legal Interest. This Agreement is intended to operate as an
agreement only and nothing herein contained shall be deemed to create
or be construed as creating a joint venture, an agency or a
partnership among Seller and Buyers, or a demise or grant, or giving
any Buyer any legal interest in the Facility or the Pier or any part
thereof.
11.11 Counterparts. This Agreement may be signed in counterparts but in such
case shall be deemed to be effective only after each of the signatories
shall have signed and delivered to the other signatories a counterpart
hereof.
IN WITNESS WHEREOF, the Parties have caused their duly authorized
representatives to execute this Agreement as of the date first set forth
above.
FARMLAND MISSCHEM LIMITED
("SELLER")
By:/s/ Robert W. Honse
----------------------
Robert W. Honse
Director
MISSISSIPPI CHEMICAL CORPORATION
("BUYER")
By:/s/ Timothy A. Dawson
------------------------
Timothy A. Dawson
Vice President - Finance
FARMLAND INDUSTRIES, INC.
("BUYER")
By:/s/ Robert W. Honse
----------------------
Robert W. Honse
Executive Vice President
and Chief Operating Officer
Ag Input Businesses
<PAGE>
EXHIBIT A
[EXHIBIT A TO THIS AGREEMENT IS THE
ANHYDROUS AMMONIA PURCHASE AGREEMENT (AMRO)
DATED AS OF OCTOBER 18, 1996, AMONG
MISSISSIPPI CHEMICAL CORPORATION
FARMLAND INDUSTRIES, INC., AND
FARMLAND MISSCHEM LIMITED
ATTACHED AS EXHIBIT 10.14
TO THIS 10-Q FILING AND IS
NOT REPEATED HERE.]
EXHIBIT INDEX
TO
FORM 10-Q
<TABLE>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------- --------------------------------------------------------- ------
<S> <C>
2.1 Asset Purchase Agreement, dated as of May 21, 1996, by
and among the Company, Mississippi Acquisition I, Inc.,
Mississippi Acquisition II, Inc., Eddy Potash, Inc., and
New Mexico Potash Corporation; filed as Exhibit 2.1 to
the Company's Current Report on Form 8-K filed September
3, 1996, SEC File No. 0-20411, and incorporated herein by
reference.
2.2 Agreement and Plan of Merger and Reorganization, dated as
of August 27, 1996, by and among the Company, MISS SUB,
INC., and First Mississippi Corporation; filed as
Exhibit 2.2 to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1996, SEC File No. 0-
20411, and incorporated herein by reference.
3.1 Articles of Incorporation of the Company; filed as
Exhibit 3.1 to the Company's Amendment No. 1 to Form S-1
Registration Statement filed August 2, 1994, SEC File
No. 33-53119, and incorporated herein by reference.
3.2 Bylaws of the Company, filed as Exhibit 3.2 to the
Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1997, SEC File No. 1-12217.
4.1 Mississippi Phosphates Corporation 401(k) Retirement
Plan; filed as Exhibit 4.3(a) to the Company's Post-
Effective Amendment No. 1 to Form S-8 Registration
Statement filed June 6, 1995, SEC File No. 33-59577, and
incorporated herein by reference.
4.2 Mississippi Chemical Corporation Thrift Plan Plus; filed
as Exhibit 4.3(b) to the Company's Post-Effective
Amendment No. 1 to Form S-8 Registration Statement filed
June 6, 1995, SEC File No. 33-59577, and incorporated
herein by reference.
4.3 Mississippi Chemical Corporation 1994 Stock Incentive
Plan; filed as Exhibit 4.2 to the Company's Form S-8
Registration Statement filed December 21, 1995, SEC File
No. 33-65209, and incorporated herein by reference.
4.4 Mississippi Chemical Corporation 1995 Stock Option Plan
for Nonemployee Directors; filed as Exhibit 4.3 to the
Company's Form S-8 Registration Statement filed
December 21, 1995, SEC File No. 33-65209, and
incorporated herein by reference.
4.5 Mississippi Chemical Corporation 1995 Restricted Stock
Purchase Plan for Nonemployee Directors; filed as Exhibit
4.4 to the Company's Form S-8 Registration Statement
filed December 21, 1995, SEC File No. 33-65209, and
incorporated herein by reference.
4.6 Shareholder Rights Plan; filed as Exhibit 1 to the
Company's Form 8-A Registration Statement dated
August 15, 1994, SEC File No. 2-7803, and incorporated
herein by reference.
10.1 Agreement effective as of October 1, 1991, entered into
by the Company's subsidiary Mississippi Phosphates
Corporation for the exclusive distribution of diammonium
phosphate produced by Mississippi Phosphates Corporation;
filed as Exhibit 10.1 to Amendment No. 1 to the Company's
Report on Form 8 dated January 7, 1993, SEC File No.
2-7803, and incorporated herein by reference.
10.2 Amendment of Agreement, effective as of July 1, 1993, to
the Agreement entered into as of October 1, 1991, by the
Company's subsidiary Mississippi Phosphates Corporation
for the exclusive distribution of diammonium phosphate
produced by Mississippi Phosphates Corporation; filed as
Exhibit 10.3 to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1993, SEC File No. 2-
7803, and incorporated herein by reference.
10.3 Amendment of Agreement, effective as of August 1, 1994,
to the Agreement entered into as of October 1, 1991, by
the Company's subsidiary Mississippi Phosphates
Corporation for the exclusive distribution of diammonium
phosphate produced by Mississippi Phosphates Corporation;
filed as Exhibit 10.7 to the Company's Annual Report on
Form 10-K for the fiscal year ended June 30, 1995, SEC
File No. 2-7803, and incorporated herein by reference.
10.4 Agreement made and entered into as of September 15, 1991,
between Office Cherifien des Phosphates and the Company's
subsidiary Mississippi Phosphates Corporation for the
sale and purchase of phosphate rock; filed as
Exhibit 10.1 to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1991, File No. 2-7803,
and incorporated herein by reference.
10.5 Amendment No. 1, effective as of July 1, 1992, to the
Agreement effective as of September 15, 1991, between
Office Cherifien des Phosphates and the Company's
subsidiary Mississippi Phosphates Corporation for the
sale and purchase of phosphate rock; filed as
Exhibit 10.12 to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1995, SEC File
No. 2-7803, and incorporated herein by reference1
10.6 Amendment No. 2, effective as of July 1, 1993, to the
Agreement effective as of September 15, 1991, between
Office Cherifien des Phosphates and the Company's
subsidiary Mississippi Phosphates Corporation for the
sale and purchase of phosphate rock; filed as Exhibit
10.11 to the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1995, SEC File No. 2-7803, and
incorporated herein by reference.2
10.7 Amendment No. 3, effective as of January 1, 1995, to the
Agreement effective as of September 15, 1991, between
Office Cherifien des Phosphates and the Company's
subsidiary Mississippi Phosphates Corporation for the
sale and purchase of phosphate rock; filed as
Exhibit 10.10 to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1995, SEC File No. 2-7803,
and incorporated herein by reference.3
10.8 Amendment No. 4, effective as of January 1, 1997, to the
Agreement effective as of September 15, 1991, between
Office Cherifien des Phosphates and the Company's
subsidiary Mississippi Phosphates Corporation for the
sale and purchase of phosphate rock; filed as Exibit 10.8
to the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1997, SEC File No. 1-12217,
and incorported herein by reference.
10.9 Gas Sales Agreement entered into by the Company and Sonat
Marketing Company as of July 13, 1995, for the sale and
purchase of natural gas; filed as Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1995, SEC File No. 2-7803, and
incorporated herein by reference.4
<FN>
- ---------------------
1
Pursuant to the Securities Exchange Act of 1934, Rule 24b-2,
confidential business information has been deleted from the first
and second paragraphs of paragraph numbered 1 of Amendment No. 1 and
an application for confidential treatment has been filed separately
with the Commission.
2
Pursuant to the Securities Exchange Act of 1934, Rule 24b-2,
confidential business information has been deleted from paragraphs numbered
5 and 8 of Amendment No. 2; from the first paragraph, paragraph numbered 1,
paragraph numbered 2, and paragraph numbered 3 of Schedule 1, Exhibit A;
from Schedule 2, Exhibit B; from Schedule 3, Exhibit C, and from Schedule 4,
Exhibit D; and an application for confidential treatment has been filed
separately with the Commission.
3
Pursuant to the Securities Exchange Act of 1934, Rule 24b-2,
confidential business information has been deleted from Schedule 1 to
Amendment No. 3, Exhibit B, and an application for confidential treatment
has been filed separately with the Commission.
4
Pursuant to the Securities Exchange Act of 1934, Rule 24b-2,
confidential business information has been deleted from Article IV, Price,
and an application for confidential treatment has been filed separately
with the Commission.
- ------------------------
10.10 Agreement for Real Estate Purchase Option dated July 16,
1990, for the sale of the Company's Hardee County,
Florida, property and underlying phosphate reserves;
filed as an exhibit to Exhibit 4.2 to the Company's
Annual Report on Form 10-K for the fiscal year ended
June 30, 1990, SEC File No. 2-7803, and incorporated
herein by reference.
10.11 Form of Severance Agreement dated July 29, 1996, by and
between the Company and each of its Executive Officers;
filed as Exhibit 10.14 to the Company's Annual Report on
Form 10-K for the fiscal year ended June 30, 1996, SEC
File No. 2-7803, and incorporated herein by reference.
10.12 Credit Agreement dated as of December 23, 1996, by and
among First Mississippi Corporation; AMPRO Fertilizer,
Inc.; Harris Trust and Savings Bank, as Administrative
Agent; Bank of Montreal, Chicago Branch, as Syndication
Agent; Caisse Nationale de Credit Agricole and CIBC Inc.
as Co-Agents; and the other lenders party thereto; filed
as Exhibit 10.1 to the Company's Current Report on Form
8-K filed January 6, 1997, SEC File No. 0-20411, and
incorporated herein by reference.
10.13 Credit Agreement dated as of December 23, 1996, by and
among Mississippi Chemical Corporation; Mississippi
Phosphates Corporation; Mississippi Potash, Inc.; Harris
Trust and Savings Bank, as Administrative Agent; Bank of
Montreal, Chicago Branch, as Syndication Agent; Caisse
Nationale de Credit Agricole and CIBC Inc. as Co-Agents;
and the other lenders party thereto; filed as Exhibit
10.2 to the Company's Current Report on Form 8-K filed
January 6, 1997, SEC File No. 0-20411, and incorporated
herein by reference.
10.14 Anhydrous Ammonia Purchase Agreement (AMRO) dated as of
October 18, 1996, among Mississippi Chemical Corporation,
Farmland Industries, Inc., and Farmland MissChem Limited
whereby Mississippi Chemical Corporation and Farmland
Industries, Inc., on an individual basis, will purchase
from Farmland MissChem Limited, a portion of the total
anhydrous ammonia output produced by its facility located
on the island of Trinidad in The Republic of Trinidad and
Tobago, which Agreement will be in place during the term
of the AMRO permanent financing facility.
10.15 Anhydrous Ammonia Purchase Agreement (EX-IM) dated as of
October 18, 1996, among Mississippi Chemical Corporation,
Farmland Industries, Inc., and Farmland MissChem Limited
whereby Mississippi Chemical Corporation and Farmland
Industries, Inc., on an individual basis, will purchase
from Farmland MissChem Limited, a portion of the total
anhydrous ammonia output produced by its facility located
on the island of Trinidad in The Republic of Trinidad and
Tobago, which Agreement will be in place during the term
of the EximBank permanent financing facility.
23 Consent of Arthur Andersen LLP; filed as Exhibit 23 to the
Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1997, SEC File No. 1-12217, and
incorporated herein by reference.
27 Financial Data Schedule.
</TABLE>
