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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
--- THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the year ended December 31, 1998
Commission file number 1-9759
IMC GLOBAL INC.
(Exact name of Registrant as specified in its charter)
Delaware 36-3492467
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2100 Sanders Road 60062
Northbrook, Illinois (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (847) 272-9200
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- - ------------------- -----------------------------------------
Common Stock, par value $1 per share New York and Chicago Stock Exchanges
Preferred Share Purchase Rights New York and Chicago Stock Exchanges
Warrants to Purchase Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant: $2,168,229,493 as of March 15, 1999. Market value is
based on the March 15, 1999 closing price of Registrant's common stock as
reported on the New York Stock Exchange Composite Transactions for such date.
APPLICABLE ONLY TO CORPORATE REGISTRANTS: Indicate the number of shares
outstanding of each of the Registrant's classes of common stock: 114,342,634
shares, excluding 10,738,520 treasury shares as of March 15, 1999.
DOCUMENTS INCORPORATED BY REFERENCE, IN PART: Information required by Items
6, 7, 7a and 8 of Part II is incorporated by reference to the sections of the
Registrant's 1998 Annual Report to Stockholders described in such Items.
Information required by Items 10, 11, 12 and 13 of Part III is incorporated by
reference to the sections of the Registrant's definitive proxy statement for
the Annual Meeting of Stockholders to be held on April 27, 1999.
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<PAGE>
1998 FORM 10-K CONTENTS
Item Page
Part I:
1. Business 1
Company Profile 1
Business Unit Information 2
Factors Affecting Demand 14
Other Matters 14
Executive Officers of the Registrant 15
2. Properties 17
3. Legal Proceedings 17
4. Submission of Matters to a Vote of Security Holders 19
Part II:
5. Market for the Registrant's Common Stock and Related
Stockholder Matters 19
6. Selected Financial Data 19
7. Management's Discussion and Analysis of Results of
Operations and Financial Condition 20
7a. Quantitative and Qualitative Disclosures about
Market Risk 20
8. Financial Statements and Supplementary Data 20
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 20
Part III:
10. Directors and Executive Officers of the Registrant 20
11. Executive Compensation 20
12. Security Ownership of Certain Beneficial Owners and
Management 20
13. Certain Relationships and Related Transactions 20
Part IV:
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K 21
Signatures 33
<PAGE>
PART I.
Item 1. Business.(1)
COMPANY PROFILE
IMC Global Inc. (the Company or IMC) is one of the world's
leading producers and distributors of crop nutrients to the
international agricultural community, one of the foremost
manufacturers and distributors of animal feed ingredients to
the worldwide industry and one of the world's leading
producers of salt. The Company mines, processes and
distributes potash in the United States and Canada and is the
majority joint venture partner in IMC-Agrico Company
(IMC-Agrico), a leading producer, marketer and distributor of
phosphate crop nutrients and animal feed ingredients. The
Company also mines, processes and distributes salt products in
the United States, Canada and Europe, including water
conditioning, agricultural, industrial, consumer and road
salt. In addition, the Company, through its interest in
Phosphate Resource Partners Limited Partnership (PLP),
participates in the exploration and production of oil & gas
(Exploration Program) through its agreement with McMoRan
Exploration Company (MMR), formerly McMoRan Oil & Gas Co.
(MOXY). The Company's current operational structure consists
of six business units corresponding to its major product lines
as follows: IMC-Agrico Phosphates (phosphates), IMC Kalium
(potash), IMC Salt (salt), IMC-Agrico Feed Ingredients (animal
feed), IMC AgriBusiness (wholesale and retail distribution)
and IMC Chemicals (soda ash and other inorganic chemicals). As
a result of the pending divestitures of IMC AgriBusiness and
IMC Chemicals, the future operational structure of the Company
will be comprised of the following four business units: IMC-
Agrico Phosphates (Phosphates), IMC Kalium (Kalium), IMC Salt
(Salt) and IMC-Agrico Feed Ingredients (Feed Ingredients).
IMC and PLP have a 56.5 percent and 43.5 percent,
respectively, direct economic interest in IMC-Agrico over the
term of the joint venture. IMC owns 51.6 percent of the
outstanding PLP limited partnership units. As a result, the
Company's total interest in IMC-Agrico is approximately 78.9
percent.
<PAGE>
The three major nutrients required for plant growth are
phosphorus, contained in phosphate rock; potassium, contained
in potash; and nitrogen. Phosphorus plays a key role in the
photosynthesis process. Potassium is an important regulator
of plants' physiological functions. Nitrogen is an essential
element for most organic compounds in plants. These elements
occur naturally in the soil but need to be replaced as crops
remove them from the soil. Currently, no viable substitutes
exist to replace the role of phosphate, potash and nitrogen in
the development and maintenance of high-yield crops. Salt
serves several high volume applications where there is either
no substitute or no economical substitute. It is an essential
nutrient for animal health and is used universally to season
food, as a food preservative and as an additive to livestock
feed products. It also is the primary material used to provide
safe highways, walkways and parking lots. It is used
extensively in manufacturing many chemicals where it is the
most economical source of both sodium and chlorine. Another
large volume application is for both industrial and consumer
water conditioning where it removes other minerals and hence
"softens" or conditions water.
The Company believes that it is one of the most efficient
North American producers of concentrated phosphates, potash,
salt and animal feed ingredients. IMC's business strategy
focuses on maintaining and growing its leading position as a
crop nutrient, animal feed and salt producer and distributor
through extensive customer service, efficient distribution and
transportation as well as supplying products worldwide at
competitive prices, largely by capitalizing on economies of
scale and state-of-the-art technology to reduce costs.
For additional information on the Company's acquisition and
divestiture activity, see Note 2, "Acquisitions," Note 4,
"Discontinued Operations" and Note 5, "Other Divestitures," of
Notes to Consolidated Financial Statements included in Part
II, Item 8, "Financial Statements and Supplementary Data," of
this Annual Report on Form 10-K.
BUSINESS UNIT INFORMATION
The amounts and relative proportions of net sales and
operating earnings contributed by the business units of the
Company have varied from year to year and may continue to do
so in the future as a result of changing business, economic
and competitive conditions as well as technological
developments.
<PAGE>
In the fourth quarter of 1998, the Company initiated a
restructuring of its operations (Restructuring Plan). One
initiative of the Restructuring Plan was the combination of
operating activities of Phosphates and Kalium in order to
realize certain operating and staff function synergies. The
following business unit information discusses Phosphates and
IMC Kalium separately as they are still considered two
distinct business units. The following business unit
discussion should be read in conjunction with the information
contained in Part II, Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations," of
this Annual Report on Form 10-K.
IMC-Agrico Phosphates
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Net sales for Phosphates were $1,572.8 million, $1,484.8
million and $1,661.3 million for the years ended December 31,
1998, 1997 and 1996, respectively. Phosphates is a leading
United States miner of phosphate rock, one of the primary raw
materials used in the production of concentrated phosphates,
with 20.0 million tons of annual capacity. Phosphates is also
a leading United States producer of concentrated phosphates
with an annual capacity of approximately four million tons of
phosphoric acid (P2O5). P2O5 is an industry term indicating a
product's phosphate content measured chemically in units of
phosphorous pentoxide. Phosphate's concentrated phosphate
products are marketed worldwide to crop nutrient
manufacturers, distributors and retailers.
Phosphates' facilities, which produce concentrated phosphate,
are located in central Florida and Louisiana. Its annual
capacity represents approximately 32 percent of total United
States concentrated phosphate production capacity and
approximately ten percent of world capacity. The Florida
concentrated phosphate facilities consist of three plants:
New Wales, Nichols and South Pierce. The New Wales complex is
the largest concentrated phosphate plant in the world with an
estimated annual capacity of 1.8 million tons of phosphoric
acid (P2O5 equivalent). New Wales primarily produces four
forms of concentrated phosphates: diammonium phosphate (DAP),
monoammonium phosphate (MAP), granular triple superphosphate
(GTSP) and merchant grade phosphoric acid. The Nichols
facility manufactures phosphoric acid, DAP and granular MAP
(GMAP). The South Pierce plant produces phosphoric acid and
GTSP. The Louisiana concentrated phosphate facilities consist
of three plants: Uncle Sam, Faustina and Taft. The Uncle Sam
<PAGE>
plant produces phosphoric acid which is then shipped to the
Faustina and Taft plants where it is used to produce DAP and
GMAP. The Faustina plant manufactures phosphoric acid, DAP,
GMAP and ammonia. The Taft facility manufactures DAP and
GMAP. Concentrated phosphate operations are managed in order
to balance Phosphates' output with customer needs. Phosphates
suspended phosphoric acid production at its Nichols facility
in October 1998 and suspended production at its Taft facility
in November 1998 in response to reduced market demands. The
Taft facility subsequently resumed production in January 1999.
Summarized below are descriptions of the principal raw
materials used in the production of concentrated phosphates:
phosphate rock, sulphur and ammonia.
Phosphate Rock
All six of the Company's phosphate mines and related mining
operations are located in central Florida. Phosphates extracts
phosphate ore through surface mining after removal of a ten to
50 foot layer of sandy overburden and then processes the ore
at one of its beneficiation plants where the ore goes through
washing, screening, sizing and flotation procedures designed
to separate it from sands, clays and other foreign materials.
Currently, four of the Company's phosphate mines are operating
while one was idled in November 1998 and another was idled in
January 1999. One of the operating mines will permanently
close in mid-1999 pursuant to the Restructuring Plan. The
present mining plan, developed in conjunction with the
Restructuring Plan, anticipates the re-start of the two idle
mines in the second half of 1999. The mining plan was
developed to maximize the available resources, lower the cost
of producing rock and manage the level of phosphate rock
inventory.
Phosphates' phosphate rock production volume for the years
ended December 31, 1998, 1997 and 1996 totaled 20.0 million,
20.0 million and 22.5 million tons, respectively. Anticipated
production in 1999 will be less than the prior years as
Phosphates reduces its level of rock inventory through the
temporary idling of the two mines. Although Phosphates sells
phosphate rock to other crop nutrient and animal feed
ingredient manufacturers, it primarily uses phosphate rock
internally in the production of concentrated phosphates. Tons
used internally, primarily in the manufacture of concentrated
phosphates, totaled 14.8 million, 14.1 million and 14.3
million for the years ended December 31, 1998, 1997 and 1996,
<PAGE>
respectively, representing 74 percent, 70 percent and 64
percent, respectively, of total tons produced. Product
shipments to customers totaled 5.0 million, 4.6 million and
6.5 million tons for the years ended December 31, 1998, 1997
and 1996, respectively. Customer shipments have been reduced
in order to maximize relative values of rock and concentrated
phosphates by utilizing high-quality reserves for internal
upgrading.
Phosphates estimates its proven reserves to be 530.0 million
tons of phosphate rock as of December 31, 1998. These
reserves are controlled by Phosphates through ownership, long-
term lease, royalty or purchase option agreements. Reserve
grades range from 58 percent to 78 percent bone phosphate of
lime (BPL), with an average grade of 66 percent BPL. BPL is
the standard industry term used to grade the quality of
phosphate rock. The phosphate rock mined by Phosphates in the
last three years averaged 65 percent BPL, which management
believes is typical for phosphate rock mined in Florida during
this period. Phosphates estimates its reserves based upon the
performance of exploration core drilling as well as technical
and economic analyses to determine that reserves so classified
can be economically mined at market prices estimated to
prevail during the next five years.
Phosphates also owns or controls phosphate rock resources in
the southern extension of the central Florida phosphate
district (Resources). Resources are mineralized deposits
which may be economically recoverable; however, additional
geostatistical analyses, including further explorations,
permitting and mining feasibility studies, are required before
such deposits may be classified as reserves. Based upon its
preliminary analyses of these Resources, Phosphates believes
that these mineralized deposits differ in physical and
chemical characteristics from those historically mined by
Phosphates but are similar to certain of the reserves being
mined in current operations. These Resources contain
estimated recoverable phosphate rock of approximately 114.0
million tons. Some of these Resources are located in what may
be classified as preservational wetland areas under standards
set forth in current county, state and federal environmental
protection laws and regulations, and consequently, the
Company's ability to mine these Resources may be restricted.
<PAGE>
Sulphur
A significant portion of Phosphates' sulphur requirements is
provided by the sulphur subsidiary of MMR under a supply
agreement with the Company. Phosphates' remaining sulphur
requirements are provided by market contracts.
Ammonia
Phosphates' ammonia needs are supplied by its Faustina ammonia
production facility and by world suppliers, primarily under
annual and multi-year contracts. Production from the Faustina
plant, which has an estimated annual capacity of 560,000 tons
of anhydrous ammonia, is used internally to produce certain
concentrated phosphates.
Sales and Marketing
Domestically, Phosphates sells its concentrated phosphates to
crop nutrient manufacturers, distributors and retailers. The
Company also uses concentrated phosphates internally for the
production of animal feed ingredients (see IMC-Agrico Feed
Ingredients). Virtually all of Phosphates' export sales of
phosphate crop nutrients are marketed through the Phosphate
Chemicals Export Association (PhosChem), a Webb-Pomerene Act
organization, which the Company administers on behalf of three
other member companies. PhosChem believes that its sales
represent approximately 53 percent of total United States
exports of concentrated phosphates. The countries which
account for the largest amount of PhosChem's sales of
concentrated phosphates include China, Australia, India, Japan
and Brazil. In 1998, Phosphates' exports to Asia and China
were 48 percent and 27 percent, respectively, of total
shipments.
The table below shows Phosphates' shipments of concentrated
phosphates in thousands of dry product tons, primarily DAP:
<PAGE>
<TABLE>
<CAPTION>
1998 1997 1996
------------------------------------
Tons % Tons % Tons %
------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Domestic
Customers 2,373 32 2,065 29 2,350 32
Captive, to other
business units 563 8 615 9 581 8
----- --- ----- --- ----- ---
2,936 40 2,680 38 2,931 40
Export 4,377 60 4,425 62 4,451 60
----- --- ----- --- ----- ---
Total shipments 7,313 100 7,105 100 7,382 100
===== === ===== === ===== ===
</TABLE>
As of December 31, 1998, Phosphates had contractual
commitments from non-affiliated customers for the shipment of
concentrated phosphates and phosphate rock amounting to
approximately 2.7 million tons and 5.2 million tons,
respectively, in 1999.
Competition
Phosphates operates in a highly competitive global market.
Among the competitors in the global phosphate crop nutrient
market are domestic and foreign companies, as well as foreign
government-supported producers. Phosphate crop nutrient
producers compete primarily based on price and, to a lesser
extent, product quality and innovation. IMC Kalium Net sales
for the Kalium business unit were $700.1 million, $617.4
million and $464.8 million for the years ended December 31,
1998, 1997 and 1996, respectively.
Kalium mines, processes and distributes potash in the United
States and Canada. The term "potash" applies generally to the
common salts of potassium. Kalium's products are marketed
worldwide to crop nutrient manufacturers, distributors and
retailers and are also used in the manufacture of mixed crop
nutrients and, to a lesser extent, animal feed ingredients
(see IMC-Agrico Feed Ingredients). Kalium's potash products
are also used for ice melter and water softener regenerant
(see IMC Salt). Kalium also sells potash to customers for
industrial use. Kalium operates four potash mines in Canada as
<PAGE>
well as three potash mines and a solar evaporation facility in
the United States. With a total capacity in excess of ten
million tons of product per year, management believes that
Kalium is one of the leading private-enterprise potash
producers in the world. In 1998, these operations accounted
for approximately 15 percent of world capacity on a K2O
basis(2).
Canadian Operations
Kalium's four mines in Canada produce muriate of potash
exclusively and are located in the province of Saskatchewan,
Canada. Two potash mines are interconnected at Esterhazy, one
is located at Belle Plaine and one is located at Colonsay.
The combined annual capacity of these four mines is
approximately eight million tons. Esterhazy and Colonsay
utilize shaft mining while Belle Plaine utilizes solution
mining technology. Traditional potash shaft mining takes
place underground at depths of over 3,000 feet where
continuous mining machines cut out the ore face and move
jagged chunks of ore to conveyor belts. The ore is then
crushed, moved to storage bins and then hoisted to refineries
above ground. In contrast, Kalium's solution mining process
involves heated water which is pumped through a "cluster" to
dissolve the potash in the ore bed. A cluster consists of a
series of boreholes drilled into the potash ore by a portable,
all-weather electric drilling rig. A separate distribution
center at each cluster controls the brine flow. The solution
containing dissolved potash and salt is pumped to a refinery
where sodium chloride, a co-product of this process, is
separated from the potash through the use of evaporation and
crystallization techniques. Concurrently, solution is pumped
into a 130 acre cooling pond where additional crystallization
occurs and the resulting product is recovered via a floating
dredge. Refined potash is dewatered, dried and sized. The
Canadian operations produce 26 different potash products,
including industrial grades, many through patented processes.
Potash Corporation of Saskatchewan Inc. (PCS) controls several
potash-producing properties in the province, including a
property which consists of reserves located in the vicinity of
Kalium's Esterhazy mines. Under a long-term contract with
PCS, the Company is obligated to mine and refine these
reserves for a fee plus a pro rata share of production costs.
The specified quantities of potash to be produced for PCS may,
at the option of PCS, amount to an annual maximum of
<PAGE>
approximately one-fourth of the tons produced by Esterhazy but
no more than approximately 1.1 million tons. The current
contract extends through June 30, 2001 and is renewable at the
option of PCS for five additional five-year periods.
Kalium controls the rights to mine 323,070 acres of
potash-bearing land in Saskatchewan. This land, of which
63,887 acres have already been mined or abandoned, contains
over 4.6 billion tons of potash mineralization (calculated
after estimated extraction losses) at an average grade of
about 21 percent K2O. This ore is sufficient to support
current operations for more than a century and will yield more
than 1.4 billion tons of finished product with a K2O content
of approximately 61 percent.
Kalium's mineral rights in Saskatchewan consist of 123,953
acres owned in fee, 175,959 acres leased from the province of
Saskatchewan and 23,158 acres leased from other parties. All
leases are renewable by the Company for successive terms of 21
years. Royalties, established by regulation of the province
of Saskatchewan, amounted to approximately $9.8 million, $8.2
million and $6.2 million in 1998, 1997 and 1996, respectively.
Since December 1985, Kalium has experienced an inflow of water
into one of its two interconnected potash mines at Esterhazy.
As a result, Kalium has incurred expenditures to control the
inflow, certain of which, due to their nature, have been
capitalized while others have been charged to expense. Since
the initial discovery of the inflow, Kalium has been able to
meet all sales obligations from production at the mines. The
Company has considered, and continues to evaluate,
alternatives to the operational methods employed at Esterhazy.
However, the procedures utilized to control the water inflow
have proven successful to date, and the Company currently
intends to continue conventional shaft mining. Despite the
relative success of these measures, there can be no assurance
that the amounts required for remedial efforts will not
increase in future years or that the water inflow or
remediation costs will not increase to a level which would
cause the Company to change its mining process or abandon the
mines.
<PAGE>
Kalium's underground mine operations are presently insured
against business interruption and risk from catastrophic
perils, including collapse, floods and other property damage
with the exception of flood coverage at Esterhazy. Due to the
ongoing water inflow problem at Esterhazy, underground
operations at this facility are currently not insurable for
water incursion problems. Like other potash producers' shaft
mines, Kalium's Colonsay mine is also subject to the risks of
inflow of water as a result of its shaft mining operations.
In January 1988, the United States Department of Commerce
(Commerce) signed an agreement with all of the potash
producers in Canada, suspending an investigation by Commerce
to determine whether Canadian potash was, or was likely to be,
sold in the United States at less than "fair value." The
agreement stipulated that each such producer's minimum price
for potash sold in the United States, compared with its potash
prices in Canada, would be based upon a formula to ensure that
such product would be sold in the United States at a price no
less than "fair value." This agreement will remain in place
until terminated by Commerce in accordance with applicable
law.
The Saskatchewan Department of Environmental and Resource
Management (Saskatchewan Department) published regulations
requiring all potash mine operators to submit facility
decommissioning and reclamation plans for approval by the
Saskatchewan Department and to provide assurances that the
plans will be carried out when the facility is closed. See
"Other Matters - Environmental Matters" for further detail.
United States Operations
Kalium has four United States potash facilities: the Carlsbad
and the Western Ag shaft mines located in Carlsbad, New
Mexico; the Hersey solution mine located in Hersey, Michigan;
and the solar evaporation facility located in Ogden, Utah.
The Kalium Carlsbad mine has an annual production capacity of
over one million tons of finished product. The ore reserves
are of three types: (1) sylvinite, a mixture of potassium
chloride and sodium chloride, the same as the ore mined in
Saskatchewan; (2) langbeinite, a double sulphate of potassium
and magnesium; and (3) a mixed ore, containing both potassium
chloride and langbeinite. At this time only the sylvinite and
langbeinite ores are mined.
<PAGE>
Continuous and conventional underground mining methods are
utilized for ore extraction at Carlsbad. In the continuous
mining sections, drum type mining machines are used to cut
sylvinite and langbeinite ore from the face. Mining heights
are as low as four feet. In the conventional areas, a wide
ore face is undercut and holes drilled to accept explosive
charges. Ore from both continuous and conventional sections
is loaded onto conveyors, transported to storage areas and
then hoisted above ground for further processing at the
refinery.
Three types of potash are produced at the Carlsbad refinery:
muriate of potash, which is the primary source of potassium
for the crop nutrient industry; double sulphate of potash
magnesia, marketed under the brand name K-Mag(Registered
Trademark) containing significant amounts of sulphur,
potassium and magnesium, with low levels of chloride; and
sulphate of potash, supplying sulphur and a high concentration
of potassium with low levels of chloride.
At the Carlsbad facility, Kalium mines and refines potash from
43,877 acres of reserves which are controlled under long-term
leases. These reserves contain an estimated total of 155
million tons of potash mineralization (calculated after
estimated extraction losses) in four mining beds evaluated at
thicknesses ranging from four to 12 feet. At average refinery
rates, these ore reserves are estimated to be sufficient to
yield 10.7 million tons of concentrate from sylvinite with an
average grade of 60 percent K2O and 27.0 million tons of
langbeinite concentrate with an average grade of approximately
22 percent K2O. At current rates of production, management
estimates that Kalium's reserves of sylvinite and langbeinite
are sufficient to support operations for more than 17 years
and 32 years, respectively. Pursuant to potassium mineral
lease arrangements with the federal government, the State of
New Mexico and other third parties, the Company paid royalties
of $3.5 million, $3.3 million and $3.1 million in 1998, 1997
and 1996, respectively.
Kalium commissioned a $25.0 million, 400,000 ton per year
K-Mag(Registered Trademark) granulation facility at Carlsbad
during 1998. This facility will convert standard grade
K-Mag(Registered Trademark) into higher-priced, premium
granular grade which has expanded sales opportunities.
<PAGE>
The Western Ag facility is located in Carlsbad, New Mexico,
adjacent to the Kalium Carlsbad facility and has an annual
capacity of 400,000 tons of double sulfate of potash magnesia
which is marketed under the brand name K-Mag(Registered
Trademark). The Western Ag facility mines and refines potash
from 16,487 acres of reserves which are controlled under
long-term leases. The reserves contain an estimated 93.8
million tons of potash mineralization in two mining beds in
thicknesses ranging from eight to ten feet. At average
refinery rates, these ore reserves are estimated to be
sufficient to yield 13.0 million tons of concentrate from
langbeinite with an average ore grade of 22 percent K2O and
9.9 million tons of sylvinite concentrate with an average ore
grade of 60 percent K2O. At current rates of production,
management estimates that Western Ag's langbeinite reserves
are sufficient to support operations for approximately 14
years. The sylvinite reserves, which would be processed at
the adjacent Carlsbad facility's refinery, are estimated by
management to be sufficient to support operations for
approximately nine years at the current rate of production.
Kalium is in the process of making mine modifications and
constructing a new state-of-the-art, world class langbeinite
refinery at Carlsbad at an estimated cost of approximately
$70.5 million. The new refinery will replace the current
refineries at the adjacent Carlsbad and Western Ag facility
locations and will increase annual capacity by approximately
35 percent, reduce costs and improve processing efficiency.
The new refinery is expected to be operational in mid-1999.
At Hersey, Michigan, Kalium operates a solution mining
facility with annual potash production capacity of
approximately 160,000 tons, and annual salt capacity of
approximately 300,000 tons. The salt from this facility is
marketed by Salt (see IMC Salt). At Hersey, Kalium's mineral
rights consist of 1,093 acres owned in fee and 10,537 acres
controlled under long-term leases. These lands contain an
estimated 300.0 million tons of potash mineralization
contained in two beds ranging in thickness from 14 to 30 feet.
Management estimates that these reserves are sufficient to
yield 62.0 million tons of concentrate from sylvinite with an
average grade of 60 percent K2O. At current rates of
production, management estimates that these reserves are
sufficient to support operations for more than 300 years.
<PAGE>
The solar evaporation facility, located in Ogden, Utah,
utilizes solar energy and nearly 40,000 acres of evaporation
ponds to manufacture sulfate of potash, salt and magnesium
chloride from the brines of the Great Salt Lake. This
facility has the capacity to annually produce approximately
450,000 tons of sulfate of potash, 200,000 tons of magnesium
chloride and over 1.0 million tons of salt. Sulfate of potash
and magnesium chloride, which is primarily used for dust
control, ice control and for industrial applications, is
marketed by Kalium's sales force while the salt is marketed by
the Salt sales force (see IMC Salt). At the Ogden facility,
Kalium's mineral rights consist of 1,499 acres owned in fee
and 117,244 acres controlled under long-term leases. The
leases continue in effect so long as the salts are produced or
the State of Utah receives a minimum royalty and rent.
Management estimates that reserves are adequate to support
current capacity for more than a century and yield more than
49.0 million tons of sulfate of potash product with a K2O
content of approximately 50 percent.
Sales and Marketing
Kalium's North American potash sales are made through Kalium's
sales force. North American agricultural sales are primarily
to independent accounts, co-operatives and large regional
buyers while non-agricultural sales are primarily to large
industrial accounts and the animal feed industry.
Additionally, potash is used as an ingredient in ice melter
and as a water softener regenerant.
Potash is sold throughout the world, with Kalium's largest
amount of sales outside of North America made to China, Japan,
Malaysia, Korea, Australia, New Zealand and Latin America.
Potash is also used internally by IMC Salt as a major
ingredient in its ice melter products. Salt also markets
potash as a water softener regenerant along with its
traditional salt products (see IMC Salt). Kalium's exports
from Canada, except to the United States, are made through
Canpotex Limited (Canpotex), an export association of
Saskatchewan potash producers. Kalium's allocated share of
Canpotex's exports to Asia and China were 25 percent and 11
percent, respectively. Potash exports from Carlsbad are sold
through the Company's sales force. In 1998, 82 percent of the
potash produced by Kalium was sold as crop nutrients, while 18
percent was sold for non-agricultural uses.
<PAGE>
The table below shows Kalium's shipments of potash in
thousands of tons:
<TABLE>
<CAPTION>
1998 1997 1996
------------------------------------
Tons % Tons % Tons %
------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Domestic
Customers 4,706 56 5,097 57 4,076 56
Captive, to other
business units 1,115 13 1,306 15 1,176 16
----- --- ----- --- ----- ---
5,821 69 6,403 72 5,252 72
Export 2,664 31 2,538 28 2,038 28
----- --- ----- --- ----- ---
Total shipments 8,485 100 8,941 100 7,290 100
===== === ===== === ===== ===
</TABLE>
As of December 31, 1998, Kalium had contractual commitments
from non-affiliated customers for the shipment of potash
amounting to approximately 1.8 million tons in 1999.
Competition
Potash is a commodity available from many sources and
consequently, the market is highly competitive. In addition to
Kalium, there are four North American producers: two in the
United States and two in Canada, some of which may have greater
production capacity than Kalium. Through its participation in
Canpotex, Kalium competes outside of North America with various
independent potash producers and consortia and other export
organizations, including state-owned organizations. Kalium's
principal methods of competition, with respect to the sale of
potash include pricing; offering consistent, high-quality
products and superior service; as well as developing new
industrial and consumer uses for potash.
IMC-Agrico Feed Ingredients
---------------------------
Net sales for Feed Ingredients were $164.4 million, $163.5
million and $154.6 million for the years ended December 31,
1998, 1997 and 1996, respectively.
<PAGE>
Feed Ingredients is one of the world's foremost producers and
marketers of phosphate-based animal feed ingredients with an
annual capacity in excess of 700,000 tons. In the first
quarter of 1998, Feed Ingredients started construction on the
expansion of its deflourinated phosphate [Multifos(Registered
Trademark)] capacity at its manufacturing operations at the New
Wales facility located in central Florida. The project will
increase the annual capacity for Multifos(Registered Trademark)
to 200,000 tons and will increase Feed Ingredients total annual
production to approximately 770,000 tons. The principal
production facilities of Feed Ingredients are located adjacent
to, and utilize raw materials from, Phosphates' concentrated
phosphate complex at New Wales.
Sales and Marketing
Feed Ingredients supplies phosphate and potassium-based feed
ingredients for poultry and livestock to markets in North
America, Latin America and Asia. Feed Ingredients sources
phosphate and potassium raw materials from the Company's
respective production facilities. Feed Ingredients has a
strong brand position in the $1.0 billion global market with
products such as Biofos(Registered Trademark),
Dynafos(Registered Trademark), Multifos(Registered Trademark),
Dyna-K(Registered Trademark) and Dynamate(Registered
Trademark).
Competition
Feed Ingredients operates in a competitive global market.
Major integrated producers of feed phosphates and feed grade
potassium are located in the United States and Europe. Many
smaller producers are located in emerging markets around the
world. Many of these smaller producers are not manufacturers
of phosphoric acid and are required to purchase this raw
material on the open market. Competition in this global market
is driven by quality, service and price.
IMC Salt
--------
Concurrent with the Harris Acquisition in April 1998, the
Company established the Salt business unit. Net sales for Salt
were $175.0 million for the partial year 1998.
<PAGE>
Salt mines, produces, processes and distributes salt in North
America and Europe. The products are marketed primarily in the
United States, Canada and the United Kingdom. Salt is used in
a variety of applications, including as a de-icer for both
highway and consumer use, an ingredient in the production of
chemicals for paper bleaching and plastic production, a flavor
enhancer and preservative in food, an ingredient and nutrient
in animal feeds, and an essential item in both industrial and
consumer water softeners. The demand for salt has historically
remained relatively stable during economic cycles due to its
relatively low cost and high value in a large variety of uses.
However, demand in the highway de-icing market is affected by
changes in winter weather. Approximately 50 percent of Salt's
annual revenues are generated from December through March when
highway de-icing is at its peak.
Production Operations
Salt has a production capacity of approximately 15.3 million
tons of salt. Production activities are currently conducted at
15 facilities, six located in the United States, seven located
in Canada and two located in the United Kingdom.
Summarized below are the three processing methods used to
produce salt. Salt utilizes all three methods.
Rock Salt Mining
The Company employs a drill and blast mining technique at its
rock salt mines. Mining machinery moves salt from the salt
face to conveyor belts where it is then crushed and screened.
Salt is then hoisted to the surface where it is loaded onto
shipping vessels.
Mechanical Evaporation
The mechanical evaporation method involves subjecting salt-
saturated brine to vacuum pressure and heat to precipitate
salt. The salt brine is obtained from underground salt
deposits through a series of wells. The resulting product has
both a high purity and a uniform physical shape.
Solar Evaporation
The solar evaporation method is used in areas of the world
where high salinity brines are available and where weather
conditions provide for a high natural evaporation rate. The
brine is pumped into a series of large open ponds where sun and
wind evaporate the water and crystallize the salt, which is
then mechanically harvested.
<PAGE>
IMC produces solar salt at the Great Salt Lake in Utah where,
at current extraction rates, management believes there are
resources sufficient for over 100 years.
United States Operations
Salt's central and midwestern United States customer base is
served by four mechanical evaporation plants, two located in
Kansas, one in Tennessee as well as one in Michigan wheresalt
is produced as a co-product by Kalium in its Michigan
operations. The Cote Blanche, Louisiana rock salt mine serves
chemical customers in the southern and western United States as
well as highway de-icing customers through a series of depots
located along the Mississippi and Ohio Rivers. The evaporation
plants, rock salt mine and other production have a combined
annual production capacity of 3.6 million tons. Salt's solar
evaporation facility located in Ogden, Utah is the largest
solar salt production site in the United States. This facility
principally serves the western general trade markets, but also
provides salt for chemical applications and highway de-icing.
Production capacity is currently only limited by demand. The
Company also owns and operates two salt packaging facilities in
Illinois and Wisconsin which also service customers in the
central and midwestern United States as well as parts of the
northeastern United States.
Canadian Operations
Salt produces salt at seven different locations in Canada.
Mechanically evaporated salt is produced at three facilities
strategically located throughout Canada: Amherst, Nova Scotia
in eastern Canada; Goderich, Ontario in central Canada; and
Unity, Saskatchewan in western Canada. From the Goderich,
Ontario rock salt mine, Salt also serves the highway de-icing
market in Canada and the Great Lakes region of the United
States. The Company also produces salt as a co-product from
its Esterhazy, Colonsay and Belle Plaine potash facilities
which serve both the general trade and the highway de-icing
markets. The evaporation plants, the rock salt mine and other
production facilities have a combined annual capacity of 7.4
million tons.
United Kingdom Operations
Salt's United Kingdom customer base is serviced by two
facilities with a combined annual production capacity of 2.9
million tons. Highway de-icing customers throughout the United
Kingdom are served by the Winsford rock salt mine in west
central England. Also, in west central England is the Weston
Point mechanical evaporation plant servicing the general trade
and chemical customers in the United Kingdom as well as
continental Europe.
<PAGE>
Sales and Marketing
The Company separates sales of salt into three major market
segments: general trade, highway de-icing and chemical. The
general trade segment is Salt's largest segment and accounted
for approximately 62 percent of 1998 sales. This segment
includes consumer applications such as table salt, water
conditioning, consumer ice control, food and meat processing,
agricultural applications, including feed mixes, as well as a
variety of industrial applications such as oil refining and
drilling, metal processing and tanning.
Salt has maintained a significant presence in the general trade
business over recent years due to its strong focus on the
midwestern United States region, all of Canada and the United
Kingdom, its distribution network to the grocery trade and its
relationships with the large distributors of water conditioning
salt. In order to continue to expand its volume and
profitability in the general trade segment, Salt has focused
its efforts on improving its marketing programs. These
programs include: (i) differentiating various brand names
through promotional activities; (ii) developing an exclusive
distributor network in the United States; and (iii)
consolidating the product offerings to customers with products
available from the Kalium business unit.
The general trade market is driven by strong customer
relationships. Sales in the general trade segment occur
through retail channels such as grocery; building supply and
hardware stores; automotive stores; feed suppliers; as well as
industrial manufacturers in various industries. Distribution in
the general trade segment is channeled through a direct sales
force located in various parts of Salt's service territories,
who sell products to distributors, dealers and end-users. The
Company also maintains a network of brokers who sell table
salt, consumer de-icing and water conditioning products. These
brokers service wholesalers, chain grocers, retailers as well
as the food service industry.
Highway de-icing constitutes Salt's second largest segment,
accounting for approximately 23 percent of 1998 salt sales.
Principal customers are states, provinces, counties,
municipalities and road maintenance contractors that purchase
bulk salt for ice control on public roadways. Highway salt is
sold mostly via a tendered bid contract system with price,
product quality and deliverability being the primary market
factors when purchasers are selecting a supplier.
<PAGE>
Winter weather variability is the most significant factor
affecting salt sales for de-icing applications because mild
winters reduce the need for salt used in ice and snow control.
Unusually mild or harsh weather can significantly affect Salt's
sales and earnings. The vast majority of North American de-
icing sales are made in Canada and the northern United States
where winter weather is generally harsher than in other parts
of North America.
The highway de-icing customer base consists of states,
provinces, counties and municipalities as well as road
maintenance contractors that purchase bulk salt for ice
control. Contracts generally are awarded annually on the basis
of tendered bids once the purchaser is assured that the minimum
requirements for purity, service and delivery can be met. The
bidding process eliminates the need to invest significant time
and effort in marketing and advertising. Location of the
source of salt and distribution outlets also play a significant
role in determining a supplier. Salt's North American
operations have an extensive network of approximately 80 depots
for storage and distribution of highway de-icing salt. The
majority of these depots are located on the Great Lakes and the
Mississippi River system.
The chemical segment accounted for approximately 15 percent of
Salt's 1998 salt sales. Principal customers are producers of
intermediate chemical products used in pulp bleaching and
plastic production that do not have a captive source of brine.
Distribution into the chemical market is made primarily through
long-term supply agreements, which are negotiated privately.
Price, service and quality of product are the major market
requirements.
Competition
Salt has significant competition in each of the markets in
which it operates. In North America, three other large,
nationally recognized firms compete against Salt in production
and marketing of rock, evaporated and solar salt. In addition,
there are several smaller regional producers of evaporated and
solar salt. In spite of the high relative cost of
transportation in the distribution of salt, there are also
several importers of salt. Most of these imports impact the
eastern seaboard where IMC has a minimum position. In the
United Kingdom, there is one other large producer of evaporated
salt, several small local producers as well as some imports
<PAGE>
from continental Europe. There are two other companies that
produce rock salt; one in northern England and the other in
Ireland. There are no significant imports of rock salt into the
United Kingdom. Salt also exports salt from the United Kingdom
to Scandinavia and continental Europe and competes with many
other European producers.
FACTORS AFFECTING DEMAND
The Company's results of operations historically have reflected
the effects of several external factors which are beyond the
Company's control and have in the past produced significant
downward and upward swings in operating results. Revenues are
highly dependent upon conditions in the North American
agriculture industry and can be affected by crop failure,
changes in agricultural production practices, government
policies and weather. Furthermore, the Company's crop
nutrients business is seasonal to the extent North American
farmers and agricultural enterprises purchase more crop
nutrient products during the spring and fall. The Company's
salt business is seasonal and it can be highly affected by the
severity of winter weather in North America and the United
Kingdom. A high percentage of Salt's income is derived in the
first and the fourth quarter of each year when sales of salt
for de-icing is the greatest.
The Company's foreign operations and investments, and any
future international expansion by the Company, are subject to
numerous risks, including fluctuations in foreign currency
exchange rates and controls; expropriation and other economic,
political and regulatory policies of local governments; and
laws and policies affecting foreign trade and investment. Due
to economic and political factors, customer needs can change
dramatically from year to year. While management does not
believe current economic conditions in Asia and Latin America
will have a material adverse effect on the Company's results,
there can be no assurance that a continuation of such economic
conditions would not materially impact results. See Note 22,
"Operating Segments," of Notes to Consolidated Financial
Statements in Part II, Item 8, "Financial Statements and
Supplementary Data," of this Annual Report on Form 10-K.
In 1998, sales to China accounted for approximately 15 percent
of the Company's net sales. No single customer or group of
affiliated customers accounted for more than ten percent of the
Company's net sales.
<PAGE>
OTHER MATTERS
Environmental Matters
---------------------
Information regarding environmental matters of the Company is
included in Part II, Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations ," of
this Annual Report on Form 10-K.
Employees
---------
The Company had approximately 11,244 employees at December 31,
1998. The work force consisted of 4,230 salaried, 6,983 hourly
and 31 temporary or part-time employees.
Labor Relations
---------------
The Company has 19 collective bargaining agreements with 16
international unions or their affiliated local chapters. At
December 31, 1998, approximately 88 percent of the hourly work
force were covered under collective bargaining agreements.
Three agreements covering 43 percent of the hourly work force
were negotiated during 1998. Resulting wage and benefit
increases were consistent with competitive industry and
community standards. Two agreements will expire during 1999
due to plant closures. The Company has not experienced a
significant work stoppage in recent years and considers its
employee relations to be good.
EXECUTIVE OFFICERS OF THE REGISTRANT
The ages and five-year employment history of the Company's
executive officers as of March 15, 1999 was as follows:
E. Paul Dunn, Jr.
Age 45. VicePresident and Treasurer of the Company since
joining the Company in May 1998. Prior to joining the Company,
Mr. Dunn served as Vice President, Finance and Information
Technology for GATX Terminals Corporation from 1995 to 1998. He
also served as Treasurer of GATX Corporation from 1990 to 1995.
Robert E. Fowler, Jr.
Age 63. Chairman and Chief Executive Officer of the Company.
Mr. Fowler served as Chairman, President and Chief Executive
Officer of the Company from July 1, 1998 through September 30,
1998. From July 1, 1997 through June 30, 1998, he served as
President and Chief Executive Officer of the Company. Mr.
<PAGE>
Fowler served as President and Chief Operating Officer of the
Company from March 1996 through June 1997. He served as
President and Chief Executive Officer of The Vigoro Corporation
from September 1994 through February 1996 and as President and
Chief Operating Officer from July 1993 to September 1994. He is
a director of Anixter International, Inc. Mr. Fowler previously
served as a director of The Vigoro Corporation from August 1993
through February 1996 and has served as an IMC Global Director
since March 1996. His term expires in April 2000. Mr. Fowler
currently serves as Chairman of the Executive Committee and is a
non-voting member of the Committee on Directors and Board
Affairs.
Phillip Gordon
Age 55. Senior Vice President, General Counsel and Assistant
Secretary of the Company. Mr. Gordon is a partner of Altheimer
& Gray, a Chicago-based law firm he joined as an associate in
1973.
C. Steven Hoffman
Age 50. Senior Vice President of the Company. Mr. Hoffman
served as Senior Vice President, Marketing from 1993 until
1994.
John U. Huber
Age 60. Senior Vice President of the Company. Mr. Huber has
served as President of the IMC Kalium business unit since
joining the Company in March 1996 and President of IMC-Agrico
Phosphates since September 1998. Prior to joining the Company,
Mr. Huber served as Executive Vice President of The Vigoro
Corporation from June 1993 to March 1996. Prior thereto he
served as President of Kalium Chemicals, Ltd. (now known as IMC
Kalium Ltd.) and as President of Kalium Canada, Ltd. (now known
as IMC Kalium Canada Ltd.) from August 1991 to March 1996.
J. Bradford James
Age 52. Senior Vice President and Chief Financial Officer of
the Company since joining the Company in February 1998. Prior
to joining the Company, Mr. James served as Executive Vice
President of USG Corporation from 1995 through 1997 and Senior
Vice President and Chief Financial Officer of USG Corporation
from 1991 through 1994.
B. Russell Lockridge
Age 49. Senior Vice President, Human Resources of the Company
since joining the Company in July 1996. Mr. Lockridge served
as Corporate Director, Executive Compensation and Development
at FMC Corporation from 1992 to 1996.
<PAGE>
Carolyn W. Merritt
Age 52. Senior Vice President, Environment, Health and Safety
of the Company. Ms. Merritt served as Vice President,
Environment, Health and Safety from March 1996 to August 1998.
Prior to joining the Company, Ms. Merritt served as Vice
President, Environmental Affairs for The Vigoro Corporation
from July 1994 to March 1996.
Douglas A. Pertz
Age 44. President and Chief Operating Officer of the Company.
From 1995 to 1998, Mr. Pertz served as President and Chief
Executive Officer of Culligan Water Technologies, Inc. From
1994 until January 1995, Mr. Pertz was Corporate Vice President
and Group Executive of the Danaher Corporation.
Anne M. Scavone
Age 35. Vice President and Controller of the Company. Ms.
Scavone served as Director, Joint Venture Finances from April
1995 to April 1996 and as Joint Venture Financial Coordinator
from April 1993 to April 1995.
Robert M. Van Patten
Age 53. Senior Vice President of the Company and President of
the IMC AgriBusiness business unit. Mr. Van Patten has served
as President of the IMC AgriBusiness business unit since
joining the Company in March 1996. Prior to joining the
Company, Mr. Van Patten served as Executive Vice President of
The Vigoro Corporation and as President of Vigoro Industries,
Inc. (now known as IMC AgriBusiness Inc.) from June 1993 to
March 1996.
Lynn F. White
Age 46. Senior Vice President, Corporate Development since
October 1997. Mr. White also served as acting Chief Financial
Officer of the Company from October 1997 until February 1998;
and Vice President, Corporate Development from February 1997
until October 1997. Prior to joining the Company, Mr. White
served in a wide array of domestic and international
assignments for FMC Corporation, including General Manager of
FMC Corporation's worldwide Food Ingredients Division.
All of the Company's executive officers are elected annually,
with the terms of the officers listed above to expire in April
1999. No "family relationships," as that term is defined in
Item 401(d) of Regulation S-K, exist among any of the listed
officers.
<PAGE>
Item 2. Properties.
Information regarding the plant and properties of the Company
is included in Part I, Item 1, "Business," of this Annual
Report on Form 10-K.
Item 3. Legal Proceedings.(1)
Sterlington Litigation
----------------------
In early 1998, the Company entered into a Preliminary
Settlement Agreement with the plaintiffs in connection with the
Louisiana class action arising out of a May 1991 explosion at a
nitroparaffins plant located in Sterlington, Louisiana. The
Preliminary Settlement Agreement settles all claims that
members of the class have against the Company and releases the
Company from further potential liabilities based on the claims
of the members of the class. In January 1999, the court held a
hearing on the fairness of the Preliminary Settlement
Agreement. In February 1999, the court entered a written order
approving the Settlement Agreement. The Company also has
settled all the known claims of individuals and entities who
opted out of the Louisiana class action. Settlement of the
Louisiana third-party claims is intended to resolve the
Company's known potential future liabilities in connection with
the Sterlington explosion. In addition, the settlement is
intended to protect the Company from the remaining claims for
contribution and indemnity filed by ANGUS Chemical Company and
the other remaining defendants with respect to the Sterlington
explosion.
Potash Antitrust Litigation
---------------------------
The Company was a defendant, along with other Canadian and
United States potash producers, in a class action antitrust
lawsuit filed in federal court in 1993. The plaintiffs alleged
a price-fixing conspiracy among North American potash producers
beginning in 1987 and continuing until the filing of the
complaint. The class action complaint against all defendants,
including the Company, was dismissed by summary judgment in
January 1997. The summary judgment dismissing the case is
currently on appeal by the plaintiffs to the United States
Court of Appeals for the Eighth Circuit (Court of Appeals).
The Court of Appeals is expected to rule during calendar 1999.
<PAGE>
In addition, in 1993 and 1994, class action antitrust lawsuits
with allegations similar to those made in the federal case were
filed against the Company and other Canadian and United States
potash producers in state courts in Illinois and California.
The Illinois case was dismissed for failure to state a claim.
In the California litigation, all proceedings have been stayed
pending the decision of the Court of Appeals.
FTX Merger Litigation
---------------------
In August 1997, five identical class action lawsuits were filed
in Chancery Court in Delaware by unitholders of PLP. Each case
named the same defendants and broadly alleged that FTX and FMRP
Inc. (FMRP) had breached fiduciary duties owed to the public
unitholders of PLP. The Company was alleged to have aided and
abetted these breaches of fiduciary duty.
In November 1997, an amended class action complaint was filed
with respect to all cases. The amended complaint named the
same defendants and raised the same broad allegations of
breaches of fiduciary duty against FTX and FMRP for allegedly
favoring the interests of FTX and FTX's common stockholders in
connection with the FTX Merger. The plaintiffs claimed
specifically that, by virtue of the FTX Merger, the public
unitholders' interests in PLP's ownership of IMC-Agrico would
become even more subject to the dominant interest of the
Company. The amended complaint seeks certification as a class
action and an injunction against the proposed FTX Merger or, in
the alternative, rescissionary damages. The defendants' moved
the court to dismiss the amended complaint in November 1998.
The plaintiffs have until March 1999 to file their response.
IMC intends to defend this action vigorously.
In May 1998, IMC and PLP (collectively, Plaintiffs) filed a
lawsuit (IMC Action) in Delaware Chancery Court against certain
former directors of FTX (Director Defendants), and MOXY. IMC
alleges that the Director Defendants, as the directors of PLP's
administrative managing general partner FTX, owed duties of
loyalty to PLP and its limited partnership unitholders. IMC
further alleges that the Director Defendants breached their
duties by causing PLP to enter into a series of interrelated
non-arm's-length transactions with MOXY, an affiliate of FTX.
<PAGE>
IMC also alleges that MOXY knowingly aided and abetted and
conspired with the Director Defendants to breach their
fiduciary duties. On behalf of the PLP public unitholders, IMC
seeks to reform or rescind the contracts that PLP entered into
with MOXY and to recoup the monies expended as a result of
PLP's participation in those agreements. The Director
Defendants and MOXY have filed motions to dismiss the
Plaintiffs' claims. The defendants filed their briefs in
support of their motions in January 1999. IMC filed its
amended complaint, and its responses to the motions to dismiss
in February 1999. No trial date has been scheduled. IMC
intends to pursue this action vigorously.
In May 1998, Jacob Gottlieb filed an action (Gottlieb Action)
on behalf of himself and all other PLP unitholders against the
Director Defendants, MOXY and IMC asserting the same claims
that IMC asserts in the IMC Action. Because IMC and PLP had
already asserted these claims, IMC has filed a motion to
dismiss the Gottlieb Action. The court has not set a briefing
schedule for IMC's motion to dismiss. IMC intends to defend
this action vigorously.
Other
-----
In the ordinary course of its business, the Company is and will
from time to time be involved in legal proceedings of a
character normally incident to its business. The Company
believes that its potential liability in any such pending or
threatened proceedings will not have a material adverse effect
on the financial condition or results of operations of the
Company.
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to a vote of security holders,
through the solicitation of proxies or otherwise, during the
three months ended December 31, 1998.
<PAGE>
PART II.
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters.
COMMON STOCK PRICES AND DIVIDENDS
<TABLE>
<CAPTION>
Quarter
----------------------------------
1998 First Second Third Fourth
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividends per common share $ 0.08 $ 0.08 $ 0.08 $ 0.08
Common stock prices:
High $39.500 $39.125 $30.375 $27.312
Low 28.562 29.375 17.812 18.125
Quarter
----------------------------------
1997 First Second Third Fourth
-------------------------------------------------------------
Dividends per common share $ 0.08 $ 0.08 $ 0.08 $ 0.08
Common stock prices:
High $42.500 $39.375 $37.250 $37.625
Low 33.125 33.125 31.375 29.625
</TABLE>
The Company's common stock is traded on the New York Stock
Exchange and the Chicago Stock Exchange under the symbol IGL.
As of March 15, 1999, the Company had 114,342,634 shares of
common stock outstanding, excluding 10,738,520 treasury shares.
Common stock prices are from the composite tape for New York
Stock Exchange issues as reported in The Wall Street Journal.
As of March 15, 1999, the number of registered holders of
common stock as reported by the Company's registrar was 11,404.
However, an indeterminable number of stockholders beneficially
own shares of the Company's common stock through investment
funds and brokers. For the year ended December 31, 1998, the
Company paid cash dividends of $36.6 million.
Item 6. Selected Financial Data.
For information related to the years 1994 through 1998
contained under the heading "Five Year Comparison," reference
is made to page 79 of the Company's 1998 Annual Report to
Stockholders.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Reference is made to "Management's Discussion and Analysis of
Financial Condition and Results of Operations" appearing on
pages 28 through 44 of the Company's 1998 Annual Report to
Stockholders.
Item 7a.Quantitative and Qualitative Disclosures about Market Risk.
Reference is made to "Market Risk" of "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
appearing on page 37 of the Company's 1998 Annual Report to
Stockholders.
Item 8. Financial Statements and Supplementary Data.
Reference is made to the Company's Consolidated Financial
Statements and Notes thereto appearing on pages 46 through 77
of the Company's 1998 Annual Report to Stockholders, together
with the report thereon of Ernst & Young LLP dated January 28,
1999, appearing on page 45 of such Annual Report and the
information contained under the heading "Quarterly Results
(unaudited)" appearing on page 73 of such Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III.
Item 10. Directors and Executive Officers of the Registrant.
The information contained under the headings "The Annual
Meeting--Election of Directors" and "Beneficial Ownership of
Common Stock--Section 16(a) Beneficial Ownership Reporting
Compliance" included in the Company's definitive Proxy
Statement for the 1999 Annual Meeting of Stockholders and the
information contained under the heading "Executive Officers of
the Registrant" in Part I, Item 1 hereof is incorporated
herein by reference.
<PAGE>
Item 11. Executive Compensation.
The information under the heading "Executive Compensation"
included in the Company's definitive Proxy Statement for the
1999 Annual Meeting of Stockholders is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information under the heading "Beneficial Ownership of
Common Stock" included in the Company's definitive Proxy
Statement for the 1999 Annual Meeting of Stockholders is
incorporated herein by reference. The Company knows of no
contractual arrangements which may, at a subsequent date,
result in a change in control of the Company.
Item 13. Certain Relationships and Related Transactions.
The information under the headings "Executive Compensation"
and "Transactions with Principal Stockholders, Directors and
Executive Officers" included in the Company's definitive Proxy
Statement for the 1999 Annual Meeting of Stockholders is
incorporated herein by reference.
PART IV.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-
K.
(1) Consolidated financial statements filed as part of this
report are listed under Part II, Item 8 of this Annual
Report on Form 10-K.
(2) All schedules for which provision is made in the
applicable accounting regulations of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable, and therefore have been
omitted.
(3) The exhibits listed in the following index have
previously been filed with the Securities and Exchange
Commission or are being filed as part of this report.
<PAGE>
Incorporated Filed with
Exhibit Herein by Electronic
No. Description Reference to Submission
- - -----------------------------------------------------------------------
3.1 Restated Certificate of Company's Report
Incorporation, as amended on Form 8-K dated
November 1, 1994
3.2 Certificate of Amendment to Exhibit 3.2 to
Restated Certificate of the June 30, 1997
Incorporation, dated Annual Report
October 20, 1994 on Form 10-K
3.3 Certificate of Amendment to Exhibit 3.2 to
Restated Certificate of the Company's
Incorporation, dated Registration
October 23, 1995 Statement on
Form 8-A/A-1
dated
January 12, 1996
3.4 Certificate of Amendment Exhibit 3.4 to
to Restated Certificate of the June 30, 1997
Incorporation, dated Annual Report on
March 1, 1996 Form 10-K
3.5 Certificate of Merger dated Exhibit 3.5 to
December 22, 1997 the December 31,
1997 Annual Report
on Form 10-K
3.6 Certificate of Amendment to Exhibit 4.6 to
Restated Certificate of the Company's
Incorporation dated Registration
January 6, 1998 Statement
on Form S-3 dated
January 20, 1999
3.7 Amended and Restated By-Laws Exhibit 3.6 to
the December 31,
1997 Annual Report
on Form 10-K
3.8 Rights Agreement dated June 21, Company's Report
1989, amended as of August 17, on Form 8-A/A
1995, with The First National dated
Bank of Chicago (including the September 7, 1995
Shareholder Rights Plan)
<PAGE>
4.1 Indenture, dated as of July 17, Exhibit 4.1 to
1997, between IMC Global Inc. the Company's
and The Bank of New York, Report on Form
relating to the issuance of 8-K dated
6.875% Senior Debentures due July 23, 1997
July 15, 2007; 7.30% Senior
Debentures due January 15, 2028;
and 6.55% Senior Notes due
January 15, 2005
4.2 Indenture, dated as of August 1, Exhibit 4.10 to
1998, between IMC Global Inc. the Company's
and The Bank of New York, Form S-3, dated
relating to the issuance of September 16,
6.625% Notes due 2001; 7.40% 1998
Notes due 2002; 7.625% Notes
due 2005; 6.50% Notes due 2003;
and 7.375% Debentures due 2018
4.3 Warrant Agreement dated December X
22, 1997, between IMC Global Inc.
and American Stock Transfer &
Trust Company
10.1 Agreement dated June 27, 1985, Exhibit 10.6 to
supplementing, amending and the Company's
continuing Potash Resource Registration
Payment Agreement dated Statement on
October 15, 1979, between Form S-1,
Mallinckrodt and the Province (Amendment No. 2),
of Saskatchewan (No. 33-22914)
10.2 Mining and Processing Agreement Exhibit 10.7 to
dated January 31, 1978, between the Company's
Potash Corporation of Registration
Saskatchewan Inc. and Statement on
International Minerals & Chemical Form S-1,
(Canada) Global Limited (No. 33-17091)
10.3* Management Incentive Compensation Exhibit 10.17 to
Program, as amended through the Company's
July 1, 1996 Registration
Statement on
Form S-1,
(No. 33-17091)
<PAGE>
10.4* Amendment to Management Incentive Exhibit 10.6 to
Compensation Program the June 30, 1997
Annual Report on
Form 10-K
10.5* 1996 Long-Term Performance Exhibit 10.77 to
Incentive Plan the Company's
September 30,
1996 Form 10-Q
10.6* 1988 Stock Option & Award Plan, Exhibit 10.8 to
as amended and restated the June 30, 1997
Annual Report on
Form 10-K
10.7* 1994 Stock Option Plan for Exhibit 4(a) to
Non-Employee Directors the Company's
Registration
Statement on
Form S-8,
(No. 33-56911)
10.8* Retirement Plan for Salaried Exhibit 10.9 to
Employees, as amended through the June 30, 1995
November 1, 1994, and as Annual Report on
currently in effect Form 10-K
10.9* Supplemental Benefit Plan Exhibit 10.12 to
the Company's
Registration
Statement on
Form S-1,
(No. 33-17091)
10.10* Supplemental Executive Exhibit 10.7 to
Retirement Plan, as amended the Company's
through June 30, 1992, and as Registration
currently in effect Statement on
Form S-1,
(No. 33-17091)
10.11* Investment Plan for Salaried Exhibit 10.12 to
Employees, as amended through the June 30, 1995
July 1, 1994, and as currently Annual Report on
in effect Form 10-K
<PAGE>
10.12* Management Compensation and Exhibit 10.12 to
Benefit Assurance Program, as the June 30, 1995
amended through August 17, 1995 Annual Report on
Form 10-K
10.13* Form of Trust Agreement with Exhibit 10.33 to
Wachovia Bank & Trust Co., the June 30, 1992
N.A., as amended through August Annual Report on
15, 1991 Form 10-K
10.14* Form of Contingent Employment Exhibit 10.18 to
Agreement dated the June 30, 1995
September 1, 1995, with Officers Annual Report on
of Corporation Form 10-K
10.15* Form of "Gross Up" Agreement Exhibit 10.20 to
dated September 1, 1995, with the June 30, 1995
Officers of Corporation, as Annual Report on
amended Form 10-K
10.16* Directors' Retirement Service Exhibit 10.54
Plan Effective July 1, 1989 to the
June 30, 1992
Annual Report on
Form 10-K
10.17* Amendment Number 2 to Exhibit 10.44 to
Investment Plan for Salaried the Company's
Employees effective Registration
March 1, 1988 and restated Statement on
effective January 1, 1992 Form S-4,
(No. 33-49795)
10.18* First Amendment, dated Exhibit 10.45 to
July 2, 1991, to form of the Company's
Contingent Employment Agreement Registration
with Officers of Corporation Statement on
Form S-4,
(No. 33-49795)
10.19* Amendment, dated July 2, 1991, Exhibit 10.46 to
to Form of "Gross Up" Agreement the Company's
with Officers of Corporation Registration
Statement on
Form S-4,
(No. 33-49795)
<PAGE>
10.20* Consulting Agreement, dated Exhibit 10.48 to
July 19, 1993, between the Company's
Wendell F. Bueche and Registration
IMC Global Inc. Statement on
Form S-4,
(No. 33-49795)
10.21* Amendment and Extension Exhibit 10.49 to
Agreement, dated as of the June 30, 1995
June 15, 1995, to Employment Annual Report on
Agreement dated as of Form 10-K
April 15, 1993 and Consulting
Agreement dated as of
July 19, 1993, between
Wendell F. Bueche and
IMC Global Inc.
10.22* Non-competition Agreement Exhibit 10.71 to
dated as of March 1, 1996 the June 30, 1996
between IMC Global Inc., Annual Report on
IMC Global Operations Inc. Form 10-K
and C. Steven Hoffman
10.23* Non-competition Agreement Exhibit 10.72 to
dated as of February 29, 1996 the June 30, 1996
between IMC Global Inc. and Annual Report on
Robert E. Fowler, Jr. Form 10-K
10.24* Non-competition Agreement Exhibit 10.26 to
dated as of March 1, 1996 the June 30, 1997
between IMC Global Inc. and Annual Report on
John U. Huber Form 10-K
10.25* Non-competition Agreement Exhibit 10.27 to
dated as of March 1, 1996 the June 30, 1997
between IMC Global Inc. and Annual Report on
Robert M. Van Patten Form 10-K
10.26* Transition Bonus Agreement Exhibit 10.73 to
dated as of March 1, 1996 the June 30, 1996
between IMC Global Inc., Annual Report on
IMC Global Operations Inc. Form 10-K
and Marschall I. Smith
10.27* The Vigoro Corporation Exhibit 10.74 to
Severance Plan, as amended the June 30, 1996
Annual Report on
Form 10-K
<PAGE>
10.28* The IMC Global Inc. Severance Exhibit 10.75 to
Plan the June 30, 1996
Annual Report on
Form 10-K
10.29 Suspension Agreement Exhibit 10.17 to
concerning Potassium Chloride the Company's
from Canada among the U.S. Registration
Department of Commerce and Statement on
the signatory purchasers/ Form S-1,
exporters of potassium (No. 33-17091)
chloride from Canada
dated January 7, 1988
10.30 Settlement Agreement dated Exhibit 10.18 to
as of November 3, 1987, by the Company's
and among the Board of Registration
Trustees of the Internal Statement on
Improvement Trust Fund of Form S-1,
the State of Florida, the (No. 33-17091)
Department of Natural
Resources of the State of
Florida and Mallinckrodt
10.31 Sulphur Joint Operating Exhibit 10.40 to
Agreement dated as of the June 30, 1990
May 1, 1988, among Annual Report on
Freeport-McMoRan Resource Form 10-K
Partners, IMC Global
Operations Inc. and Felmont
Oil Corporation
10.32 Oil/Gas Operating Agreement Exhibit 10.41 to
dated as of June 5, 1990, the June 30, 1990
among Freeport-McMoRan Annual Report on
Resource Partners, IMC Form 10-K
Global Operations Inc. and
Felmont Oil Corporation
10.33 Agreement in Principle dated Exhibit 10.43 to
September 7, 1990, with the June 30, 1990
Mallinckrodt Annual Report on
Form 10-K
10.34 Agreement dated as of Exhibit 10.41 to
September 12, 1990, with the June 30, 1990
Mallinckrodt Annual Report on
Form 10-K
<PAGE>
10.35 Memorandum of Agreement as Exhibit 10.51 to
of December 21, 1990, amending the June 30, 1991
Mining and Processing Agreement Annual Report on
of January 31, 1978, between Form 10-K
Potash Corporation of
Saskatchewan Inc. and
International Minerals &
Chemical (Canada) Global
Limited
10.36 Division of Proceeds Agreement Exhibit 10.52 to
dated December 21, 1990, between the June 30, 1991
Potash Corporation of Annual Report on
Saskatchewan Inc. and Form 10-K
International Minerals &
Chemical (Canada) Global Limited
10.37 Contribution Agreement dated Exhibit 10.55 to
April 5, 1993 between the Company's
Freeport-McMoRan Resource March 31, 1993
Partners, Limited Partnership Form 10-Q/A
and IMC Global Operations Inc. (Amendment No. 1)
filed on May 19, 1993
10.38 Form of Partnership Agreement, Exhibit 10.29 to
dated as of July 1, 1993, as the June 30, 1995
further amended and restated Annual Report on
as of May 26, 1995, between Form 10-K
IMC-Agrico GP Company, Agrico
Limited Partnership and
IMC-Agrico MP Inc., including
definitions
10.39 Form of Parent Agreement, Exhibit 10.30 to
dated as of July 1, 1993, as the June 30, 1995
further amended and restated Annual Report on
as of May 26, 1995, between Form 10-K
IMC Global Operations Inc.,
Freeport-McMoRan Resource
Partners, Limited Partnership,
Freeport-McMoRan Inc. and
IMC-Agrico Company
<PAGE>
10.40 Amendment, Waiver and Consent, Exhibit 10.31 to
dated May 26, 1995, among IMC the June 30, 1995
Global Inc.; IMC Global Annual Report on
Operations Inc.; IMC-Agrico GP Form 10-K
Company; IMC-Agrico MP, Inc.;
IMC-Agrico Company; Freeport-
McMoRan Inc.; Freeport-McMoRan
Resource Partners, Limited
Partnership; and Agrico,
Limited Partnership
10.41 Agreement and Plan of Complete Exhibit 10.32 to
Liquidation and Dissolution, the June 30, 1995
dated May 26, 1995, among IMC Annual Report on
Global Operations Inc., Form 10-K
IMC-Agrico GP Company, and
IMC-Agrico MP, Inc.
10.42 Sterlington Settlement Exhibit 10.58 to
Agreement between IMC the Company's
Global Inc., ANGUS Chemical March 31, 1993
Company and Industrial Risk Form 10-Q/A
Insurers dated April 1, 1993 (Amendment No. 1)
filed on May 19, 1993
10.43 First Amendment to Exhibit 10.59 to
Contribution Agreement, the Company's Report
dated as of July 1, 1993, on Form 8-K dated
between Freeport-McMoRan July 16, 1993
Resource Partners, Limited
Partnership and IMC Global
Operations Inc.
10.44 Loan Agreement, dated as of Exhibit 10.64 to
December 1, 1991, between IMC the Company's
Global Operations Inc. and Registration
the Polk County Industrial Statement on
Development Authority (Florida) Form S-4,
(No. 33-49795)
<PAGE>
10.45 Amended and Restated Exhibit 10.65 to
Unconditional Guaranty, dated the Company's
as of December 1, 1991 of IMC Registration
Global Inc. with respect to Statement on
Polk County Industrial Form S-4
Development Authority (Florida) (No. 33-49795)
Industrial Development Revenue
Bonds (IMC Global Operations
Inc. Project) 1991 Tax-Exempt
Series A and 1992 Tax-Exempt
Series A
10.46 Supplemental Loan Agreement, Exhibit 10.66 to
dated as of January 1, 1992, the Company's
between IMC Global Operations Registration
Inc. and the Polk County Statement on
Industrial Development Authority Form S-4,
(Florida) (No. 33-49795
10.47 Second Supplemental Loan Exhibit 10.67 to
Agreement, dated as of the Company's
June 30, 1993, between IMC Registration
Global Operations Inc. and Statement on
the Polk County Industrial Form S-4,
Development Authority (No. 33-49795)
(Florida)
10.48 Amendment to Guaranty, dated Exhibit 10.68 to
June 30, 1993, with respect to the Company's
Polk County Industrial Registration
Development Authority Statement on
(Florida) Industrial Form S-4,
Development Revenue Bonds (No. 33-49795)
(IMC Global Operations Inc.
Project) 1991 Tax-Exempt
Series A and 1992 Tax-Exempt
Series A
10.49 Indenture of Trust, dated as Exhibit 10.69 to
of December 1, 1991, between the Company's
Polk County Industrial Registration
Development Authority (the Statement on
"Authority") and The Bank of Form S-4,
New York, as Trustee (the "IRB (No. 33-49795)
Trustee") relating to the
Industrial Development Revenue
Bonds (IMC Global Operations
Inc. Project) 1991 Tax-Exempt
Series A (the "Series 1991 Bonds")
<PAGE>
10.50 Supplemental Indenture of Trust, Exhibit 10.70 to
dated as of January 1, 1992, the Company's
between the Authority and the Registration
IRB Trustee, relating to the Statement on
Industrial Development Revenue Form S-4,
Bonds (IMC Global Operations (No. 33-49795)
Inc. Project) 1992 Tax-Exempt
Series A (the "Series 1992 Bonds")
10.51 Second Supplemental Indenture Exhibit 10.71 to
of Trust, dated as of June 30 the Company's
1993, between the Authority and Registration
the IRB Trustee, relating to Statement on
the Series 1991 Bonds and the Form S-4,
Series 1992 Bonds (No. 33-49795)
10.52 Agreement Under the Parent Exhibit 10.63
Agreement, dated as of to the Company's
January 23, 1996, among IMC December 31, 1995
Global Inc.; IMC Global Form 10-Q
Operations Inc.; Freeport-
McMoRan Resource Partners,
Limited Partnership; Freeport-
McMoRan Inc.; and IMC-Agrico
Company, a Delaware general
partnership
10.53 Amendment and Agreement Under Exhibit 10.64
the Partnership Agreement, to the Company's
dated as of January 23, 1996, December 31, 1995
by and among IMC-Agrico GP Form 10-Q
Company; Agrico, Limited
Partnership; IMC-Agrico MP,
Inc.; IMC Global Operations
Inc. and IMC-Agrico Company
10.54 Second Amended and Restated Exhibit 10.67 to
Related Party Guaranty, dated the June 30, 1997
as of February 28, 1996 by Annual Report on
IMC Global Inc. and The Vigoro Form 10-K
Corporation, a Delaware
corporation, in favor of The
Prudential Insurance Company of
America
<PAGE>
10.55 Five-Year Credit Agreement, Exhibit 10.1
dated as of December 15, 1997 to the Company's
among IMC Global Inc., a Report on
Delaware corporation, as Form 8-K dated
borrower, the financial December 22, 1997
institutions parties thereto,
Morgan Guaranty Trust Company of
New York, as Administrative Agent,
Royal Bank of Canada, as
Documentation Agent, The Chase
Manhattan Bank and NationsBank,
N.A., as Co-Syndication Agents,
J.P. Morgan Securities Inc., as
Arranger, and NationsBanc
Montgomery Securities, Inc. and
Royal Bank of Canada, as Co-Arrangers
10.56 Amendment No. 1, dated X
March 23, 1998, to Five-Year
Credit Agreement dated
December 15, 1997
10.57 Amendment No. 2 dated X
December 14, 1998, to Five-Year
Credit Agreement dated
December 15, 1997
10.58 Amendment No. 3, dated X
December 31, 1998 to Five-Year
Credit Agreement dated
December 15, 1997
10.59 364-Day Credit Agreement, dated X
as of December 14, 1998, as
amended, among IMC Global Inc.,
a Delaware corporation, as
borrower, the banks, managing
agents and co-agents listed
therein
10.60 Five-Year Credit Agreement, Exhibit 10.57 to
dated as of December 22, 1997 the December 31, 1997
among International Minerals & Annual Report on
Chemical (Canada) Global Limited Form 10-K
and IMC Kalium Canada Ltd., as
borrowers, the Company, and Royal
Bank of Canada, as Agent
<PAGE>
10.61 Amendment No. 1, dated X
March 31, 1998 , to Five-Year
Credit Agreement, dated as of
December 22, 1997
10.62 Amendment No. 2, dated X
August 31, 1998 , to Five-Year
Credit Agreement, dated as of
December 22, 1997
10.63 Amendment No. 3, dated X
December 16, 1998 , to Five-Year
Credit Agreement, dated as of
December 22, 1997
10.64 Amendment No. 4, dated X
December 31, 1998 , to Five-Year
Credit Agreement, dated as of
December 22, 1997
10.65 Transfer and Administration Exhibit 10.72 to
Agreement, dated as of the June 30, 1997
June 27, 1997, among IMC-Agrico Annual Report on
Receivables Company L.L.C., Form 10-K
IMC-Agrico Company and
Enterprise Funding Corporation,
a Delaware corporation
10.66 Receivables Purchase Agreement Exhibit 10.73 to
between IMC-Agrico Company as the June 30, 1997
Seller and IMC-Agrico Annual Report on
Receivables Company L.L.C. as Form 10-K
Purchaser, dated as of
June 27, 1997
10.67 Amendment Number 1 to Transfer Exhibit 10.60 to
and Administration Agreement the December 31, 1997
and Receivables Purchase Annual Report on
Agreement among IMC-Agrico Form 10-K
Receivables Company L.L.C.,
IMC-Agrico Company and
Enterprise Funding Corporation,
a Delaware corporation
<PAGE>
10.68 Amendment Number 2 to Transfer X
and Administration Agreement and
Receivables Purchase Agreement
among IMC-Agrico Receivables
Company L.L.C., IMC-Agrico
Company and Enterprise Funding
Corporation, a Delaware
corporation
10.69 Bill of Sale and Assignment X
of Assets by and between
IMC-Agrico Receivables Company
L.L.C., dated September 30, 1998
10.70 Registration Rights Agreement Exhibit 99.6 to
dated as of March 1, 1996 among the Company's
IMC Global Inc. and certain March 31, 1996
former stockholders of The Form 10-Q
Vigoro Corporation
10.71* Employment Agreement dated Exhibit 10.62 to
as of January 29, 1998 between the December 31,
IMC Global Inc. and 1997 Annual Report
Robert E. Fowler, Jr. On Form 10-K
10.72 364-Day Credit Agreement Exhibit 10.1 to
dated as of April 1, 1998 the Company's
among IMC Global Inc. and Report on
the Banks listed therein Form 8-K dated
August 14, 1998
10.73 Amendment No. 1, dated X
December 31, 1998 to 364-Day
Credit Agreement dated
April 1, 1998
10.74 Revolving Loan Agreement, X
dated as of December 18, 1998,
as amended, among Harris
Chemical Europe Ltd., Namsco
(UK) Ltd.; Salt Union Limited;
IMC Global Inc.; IMC Inorganic
Chemicals, Inc.; Chase Manhattan
plc and Chase Manhattan
International Limited
<PAGE>
10.75 Amendment No. 1, dated January 15, X
1999 to Revolving Loan Agreement
dated December 18, 1998
10.76 Facility Agreement, dated as X
of September 23, 1998, among The
First National Bank of Chicago,
Penrice Soda Products Pty Ltd.,
Penrice Holdings Pty and IMC
Global Australia Pty Ltd. And
IMC Global Inc.
10.77 Facility Agreement, dated as of X
September 23, 1998, among Banque
Nationale de Paris, The First
National Bank of Chicago, Penrice
Soda Products Pty Ltd., Penrice
Holdings Pty and IMC Global
Australia Pty Ltd. and IMC Global Inc.
10.78 Facility Agreement, dated as X
of September 23, 1998, among
Rabo Australia Limited, The
First National Bank of Chicago,
Penrice Soda Products Pty Ltd.,
Penrice Holdings Pty and IMC Global
Australia Pty Ltd. and IMC Global Inc.
10.79* Employment Agreement dated Exhibit 10.1 to
as of September 15, 1998 the Company's
between IMC Global Inc. and September 30, 1998
Douglas A. Pertz Form 10-Q
10.80* 1998 Stock Option Plan for Exhibit 10.7 to
non-employee Directors the Company's
Report on
Form 8-K dated
May 14, 1998
10.81 Non-competition Agreement X
dated as of August 1, 1998
between IMC Global Inc. and
Robert M. Van Patten
10.82 Severance Agreement dated X
as of March 19, 1998 between
IMC Global Inc. and
J. Bradford James
<PAGE>
10.83 Severance Agreement dated X
as of August 1, 1998 between
IMC Global Inc. and
Robert M. Van Patten
12 Ratio of Earnings to Fixed Charges X
13 The portions of IMC Global X
Inc.'s 1998 Annual Report to
Stockholders which are
specifically incorporated by
reference
21 Subsidiaries of the Registrant X
23 Consent of Independent Auditors X
24 Power of Attorney X
27 Financial Data Schedule X
* Denotes management contract or compensatory plan.
<PAGE>
(b) REPORTS ON FORM 8-K
During the fourth quarter and through the date of this filing, the
following reports were filed:
A report under Items 5 and 7 dated October 28, 1998
A report under Items 5 and 7 dated November 17, 1998
A report under Item 5 dated December 31, 1998 as amended under
Items 5 and 7 on January 13, 1999
A report under Item 5 dated January 6, 1999
A report under Items 2 and 7 dated January 7, 1999 which amended a
report dated April 1, 1998
(c) EXHIBITS
See exhibit index listed at Item 14(a)(3) hereof.
(d) Financial statements and schedules and summarized financial
information of 50 percent or less owned persons are omitted as
none of such persons are individually, or in the aggregate,
significant under the tests specified in Regulation S-X under
Article 3.09 of general instructions to the financial statements.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
IMC GLOBAL INC.
(Registrant)
/s/ Robert E. Fowler, Jr.
-------------------------
Robert E. Fowler, Jr.
Chairman and Chief Executive Officer
Date: March 29, 1999
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
/s/ Robert E. Fowler, Jr. Chairman and Chief March 29, 1999
Robert E. Fowler, Jr. Executive Officer
(principal executive officer)
/s/ Douglas A. Pertz President, Chief Operating March 29, 1999
Douglas A. Pertz Officer and Director
(principal operating officer)
/s/ J.Bradford James Senior Vice President and March 29, 1999
J. Bradford James Chief Financial Officer
(principal financial officer)
/s/ Anne M. Scavone Vice President and March 29, 1999
Anne M. Scavone Controller
(principal accounting officer)
* Director March 29, 1999
- - -----------------------
Wendell F. Bueche
* Director March 29, 1999
- - -----------------------
Raymond F. Bentele
* Director March 29, 1999
- - -----------------------
Rod F. Dammeyer
* Director March 29, 1999
- - -----------------------
James M. Davidson
* Director March 29, 1999
- - -----------------------
Harold H. MacKay
* Director March 29, 1999
- - -----------------------
David B. Mathis
* Director March 29, 1999
- - -----------------------
Donald F. Mazankowski
<PAGE>
* Director March 29, 1999
- - -----------------------
Joseph P. Sullivan
* Director March 29, 1999
- - -----------------------
Richard L. Thomas
* Director March 29, 1999
- - -----------------------
Billie B. Turner
*By: /s/ Rose Marie Williams
Rose Marie Williams
Attorney-in-fact
- - ----------------------------
(1) All statements, other than statements of historical fact contained
within this Form 10-K constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995.
Factors that could cause actual results to differ materially from
those expressed or implied by the forward-looking statements
include, but are not limited to, the following: general business
and economic conditions in the agricultural industry or in
localities where the Company or its customers operate; weather
conditions; the impact of competitive products; pressure on prices
realized by the Company for its products; constraints on supplies
of raw materials used in manufacturing certain of the Company's
products; capacity constraints limiting the production of certain
products; difficulties or delays in the development, production,
testing and marketing of products; difficulties or delays in
receiving required governmental and regulatory approvals; market
acceptance issues, including the failure of products to generate
anticipated sales levels; difficulties in integrating acquired
businesses and in realizing related cost savings and other
benefits; the effects of and change in trade, monetary and fiscal
<PAGE>
policies, laws and regulations; foreign exchange rates and
fluctuations in those rates; the costs and effects of legal,
including environmental, and administrative proceedings involving
the Company; the completion of the Company's Year 2000 program; and
the other risk factors reported from time to time in the Company's
Securities and Exchange Commission reports.
(2) Since the amount of potassium in the common salts of potassium
varies, the industry has established a common standard of
measurement by defining a product's potassium content, or grade, in
terms of equivalent percentages of potassium oxide (K2O). A K2O
equivalent of 60 percent, 50 percent and 22 percent is the
customary minimum standard for muriate of potash, sulphate of
potash and double sulphate of potash magnesia products,
respectively.
EXHIBIT 4.3
WARRANT AGREEMENT
This Warrant Agreement dated as of December 22, 1997 (the
"Agreement") between IMC GLOBAL INC., a Delaware corporation (the
"Company"), and American Stock Transfer & Trust Company, a New York
corporation, as warrant agent (the "Warrant Agent").
RECITALS
WHEREAS, the Company proposes to issue and deliver its
warrant certificates (the "Warrant Certificates") evidencing warrants
(the "Warrants") to purchase up to an aggregate of 8,421,363 shares of
its Common Stock (as defined below) to holders (the "Warrant
Recipients") of the common stock, par value $.01 per share, of
Freeport-McMoRan Inc. ("FTX") in connection with the Agreement and Plan
of Merger dated as of August 26, 1997 (the "Merger Agreement") between
the Company and FTX; and
WHEREAS, each Warrant will entitle the registered holder
thereof to purchase one share of Common Stock (as defined below) at the
Exercise Price (as defined below);
In consideration of the foregoing and for the purpose of
defining the terms and provisions of the Warrants and the respective
rights and obligations thereunder of the Company and the Holders, the
Company and the Warrant Agent each agrees as follows:
Section 1. Certain Definitions. As used in this Agreement,
the following terms shall have the following respective meanings:
"Affiliate" of any person means any person directly or
indirectly controlling or controlled by or under direct or indirect
common control with such person. For purposes of this definition,
"control" when used with respect to any person means the power to
direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which the New York Stock Exchange, banking institutions or
trust companies in the City of New York are authorized or obligated by
law or executive order to close.
"Common Stock" means the Common Stock, $1.00 par value per
share, of the Company, and any other capital stock of the Company into
which the Common Stock may be converted or reclassified or that may be
issued in respect of, in exchange for, or in substitution of, the
Common Stock by reason of any stock splits, stock dividends,
distributions, mergers, consolidations or other like events.
<PAGE>
"Company" shall have the meaning set forth in the preamble to
this Agreement or its successors and assigns.
"Current Market Value" shall have the meaning set forth in
Section 8(e) of this Agreement.
"Effective Time" means December 22, 1997.
"Exercise Date" shall mean, as to any Warrants, the date on
which the Warrant Agent shall have received both (a) the Warrant
Certificate representing such Warrants, with the Exercise Forms therein
duly executed by the Holder thereof or his attorney duly authorized in
writing, and (b) payment in cash, or by official bank check or
certified check made payable to the Company, of an amount in lawful
money of the United States of America equal to the applicable Exercise
Price (as defined below).
"Exercise Price" means the purchase price per share of Common
Stock to be paid upon the exercise of a Warrant in accordance with the
terms hereof, which price shall initially be $44.50 per share, subject
to adjustment from time to time pursuant to Section 8 hereof.
"Expiration Date" means December 22, 2000.
"Holder" means, with respect to any Warrant Certificate, the
person in whose name such Warrant Certificate is registered upon the
books to be maintained by the Warrant Agent pursuant to Section 3
hereof.
"Merger Agreement" shall have the meaning set forth in the
first Recital to this Agreement.
"Person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or any agency
or political subdivision thereof.
"Register" shall have the meaning set forth in Section 3(a)
of this Agreement.
"Warrant Agent" shall have the meaning set forth in the
preamble to this Agreement or the successor or successors of such
Warrant Agent duly appointed in accordance with the terms hereof.
"Warrant Certificates" shall have the meaning set forth in
the first Recital to this Agreement.
"Warrant Recipients" shall have the meaning set forth in the
first Recital to this Agreement.
<PAGE>
"Warrants" shall have the meaning set forth in the first
Recital to this Agreement.
Section 2. The Warrant Certificates. (a) Upon issuance,
each Warrant Certificate shall evidence one or more Warrants. The
Warrant Certificates shall be in registered form only and substantially
in the form attached hereto as Exhibit A. The Warrant Certificates
shall be dated the date on which they are countersigned by the Warrant
Agent and may have such legends and endorsements typed, stamped,
printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with applicable laws, rules
or regulations including any rule or regulation of any securities
exchange on which the Warrants may be listed.
(b) Warrant Certificates substantially in the form of Exhibit
A hereto and evidencing Warrants to purchase an aggregate of up to
8,421,363 shares of Common Stock (subject to adjustment pursuant to
Section 8) shall be executed, on or after the date of this Agreement,
by the Company and delivered to the Warrant Agent for countersignature,
and the Warrant Agent shall thereupon countersign and deliver such
Warrant Certificates upon the order and at the direction of the
Company. The names and addresses of the Warrant Recipients shall be
specified by the Company pursuant to a list of Warrant Recipients
provided to the Warrant Agent by the Company, which shall consist of
the names of those Persons who were stockholders of record of FTX as of
the Effective Time, subject only to the elimination of the names of any
such Persons as are only entitled to receive a payment in lieu of a
fractional Warrant in accordance with the terms of the Merger
Agreement. The Warrant Agent is hereby authorized to countersign and
deliver Warrant Certificates as required by this Section 2(b) or by
Section 3(b), 4(f) or 6 hereof. The Warrant Certificates shall be
executed on behalf of the Company by any of its duly authorized
officers, either manually or by facsimile signature printed thereon,
and shall be dated the date of issuance. The Warrant Agent shall
countersign the Warrant Certificates either manually or by facsimile
signature printed thereon, and the Warrant Certificates shall not be
valid for any purpose until so countersigned. In case any duly
authorized officer of the Company whose signature shall have been
placed upon any of the Warrant Certificates shall cease to be such
officer of the Company before countersignature by the Warrant Agent and
issue and delivery thereof, such Warrant Certificates may,
nevertheless, be countersigned by the Warrant Agent and issued and
delivered with the same force and effect as though such person had not
ceased to be such officer of the Company.
<PAGE>
Section 3. Registration, Exchange and Transfer of Warrants.
(a) The Warrant Agent shall keep at the principal corporate trust
office of the Warrant Agent, specified in or pursuant to Section 4(e),
a register (the "Register") in which , subject to such regulations as
the Company may reasonably prescribe, the Warrant Agent shall provide
for the registration of Warrant Certificates and of transfers or
exchanges of Warrant Certificates as herein provided.
(b) At the option of the Holder, Warrant Certificates may be
exchanged at such office and upon payment of the charges hereinafter
provided. Whenever any Warrant Certificates are so surrendered for
exchange, the Company shall execute, and the Warrant Agent shall
countersign and deliver, the Warrant Certificates that the Holder
making the exchange is entitled to receive; provided, however, that the
Company shall not be required to issue and deliver Warrant Certificates
representing fractional warrants.
(c) Each Warrant Certificate issued upon any registration of
transfer or exchange of Warrant Certificates shall be the valid
obligation of the Company, evidencing the same obligations, and
entitled to the same benefits under this Agreement as the Warrant
Certificates surrendered for such registration of transfer or exchange.
(d) Each Warrant Certificate surrendered for registration of
transfer or exchange shall (if so required by the Company or the
Warrant Agent) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the
Warrant Agent, duly executed by the Holder thereof or his attorney duly
authorized in writing.
(e) No service charge shall be made for any registration of
transfer or exchange of Warrant Certificates. The Company may require
payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of
transfer or exchange of Warrant Certificates.
(f) Each Warrant Certificate when duly endorsed in blank shall
be negotiable and when a Warrant Certificate shall have been so
endorsed, the Holder thereof may be treated by the Company, the Warrant
Agent and all other persons dealing therewith as the sole and absolute
owner thereof for any purpose and as the person solely entitled to
exercise the rights represented thereby or to request the Warrant Agent
to record the transfer thereof on the Register any notice to the
contrary notwithstanding; but until such transfer on such Register, the
Company and the Warrant Agent may treat the Holder thereof as the owner
for all purposes.
<PAGE>
Section 4. Exercise Price, Payment of the Exercise Price,
Duration and Exercise of Warrants Generally. (a) Each Warrant
Certificate shall, when countersigned by the Warrant Agent, entitle the
Holder thereof, upon payment of the Exercise Price and subject to the
provisions of this Agreement, to receive one share of Common Stock for
each whole Warrant represented thereby, subject to adjustment as herein
provided, upon payment of the Exercise Price for each of such shares.
(b) A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the Exercise Date and the
Person entitled to receive shares of Common Stock upon exercise of the
Warrant shall be treated as the holder of such Common Stock as of the
close of business on the Exercise Date. As soon as practicable on or
after the Exercise Date, the Warrant Agent shall notify the Company,
and the Warrant Agent shall, within five Business Days of the Exercise
Date, deliver or cause to be delivered to or upon any written order of
any Holder appropriate evidence of ownership of any shares of Common
Stock issuable upon exercise of the Warrants or other securities or
property (including any cash) to which the Holder is entitled
hereunder, subject to Section 5. All funds received upon the exercise
of Warrants shall be deposited by the Warrant Agent for the account of
the Company, unless otherwise instructed in writing by the Company.
(c) Subject to the terms and conditions set forth herein, the
Warrants shall be exercisable from time to time by the Holder thereof
at any time on or prior to the Expiration Date.
(d) The Warrants shall terminate and become void as of 5:00
P.M. (New York City time) on the Expiration Date and all rights of the
Holder of the Warrant Certificate evidencing such Warrant under this
Agreement or otherwise shall cease.
(e) Subject to Sections 5 and 9 hereof, in order to exercise
a Warrant, the Holder thereof must surrender the Warrant Certificate
evidencing such Warrant, with one of the forms on the reverse of or
attached to the Warrant Certificates duly executed (with signature
guaranteed), to the Warrant Agent at its office at 40 Wall Street, New
York, New York 10005, or at such other address as the Warrant Agent may
specify in writing to the Holders at their respective addresses
specified in the Register, together with payment-in-full of the
Exercise Price thereof.
<PAGE>
(f) The Warrants evidenced by a Warrant Certificate shall be
exercisable either as an entirety or, from time to time, for part only
of the number of whole Warrants evidenced thereby. If fewer than all
of the Warrants evidenced by a Warrant Certificate are exercised at any
time, the Warrant Certificate representing such Warrants shall be
surrendered and a new Warrant Certificate of the same tenor and for the
number of Warrants that were not exercised shall be issued by the
Company. The Warrant Agent shall countersign the new Warrant
Certificate, register it in such name or names as may be directed in
writing by the Holder and deliver the new Warrant Certificate to the
person or persons entitled to receive the same.
Section 5. Payment of Taxes. The Company will pay all
documentary, stamp or similar taxes or other governmental charges, if
any, attributable to the issuance of the Warrants or the issuance of
Common Stock upon the exercise of Warrants; provided, however, that the
Company shall not be required to pay any tax or other governmental
charge which may be payable in respect of any transfer involved in the
issue or delivery of any Warrant Certificates or certificates for
Common Stock issued upon the exercise of Warrants in a name other than
that of the Holder of such Warrants, and the Company shall not register
any such transfer or issue any such certificate until such tax or
governmental charge, if required, shall have been paid.
Section 6. Mutilated or Missing Warrant Certificates. If
(a) any mutilated Warrant Certificate is surrendered to the Warrant
Agent or (b) the Company and the Warrant Agent receive evidence to
their satisfaction of the destruction, loss or theft of any Warrant
Certificate, and there is delivered to the Company and the Warrant
Agent (in the case of destruction, loss or theft) such security or
indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Company or the Warrant Agent that
such Warrant Certificate has been acquired by a bona fide purchaser,
the Company shall execute and the Warrant Agent shall countersign and
deliver, in exchange for any such mutilated Warrant Certificate or in
lieu of any such destroyed, lost or stolen Warrant Certificate, a new
Warrant Certificate of like tenor and for a like aggregate number of
Warrants.
Upon the issuance of any new Warrant Certificate under this
Section 6, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
relation thereto and other expenses in connection therewith.
<PAGE>
Every new Warrant Certificate executed and delivered pursuant
to this Section 6 in lieu of any destroyed, lost or stolen Warrant
Certificate shall constitute an original contractual obligation of the
Company, whether or not the destroyed, lost or stolen Warrant
Certificate shall be at any time enforceable by anyone, and shall be
entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder.
The provisions of this Section 6 are exclusive and shall
preclude (to the extent lawful) all other rights or remedies with
respect to the replacement of mutilated, destroyed, lost or stolen
Warrant Certificates.
Section 7. Reservation of Common Stock for Issuance on
Exercise of Warrants; Listing; Registration. (a) The Company will at
all times reserve and keep available, free from preemptive rights, and
out of its authorized but unissued Common Stock, solely for the purpose
of issuance upon exercise of Warrants as herein provided, such number
of shares of Common Stock as shall then be issuable upon exercise of
all outstanding Warrants. The Company covenants that all shares of
Common Stock which shall be issuable upon exercise of the Warrants
shall, upon issue in accordance with the terms of this Agreement, be
duly and validly issued and fully paid and nonassessable and free from
all taxes, liens, and charges with respect to the issue thereof and
that upon issuance such shares shall be listed on each national
securities exchange on which any other shares of outstanding Common
Stock are then listed.
(b) The Company covenants that if any Common Stock to be
reserved for the purpose of exercise of the Warrants hereunder require
registration with, or approval of, any governmental authority under any
federal or state securities law before such securities may be validly
issued or delivered upon such exercise, or freely transferred by the
holder thereof after such exercise, as expeditiously as reasonably
possible, it shall endeavor to secure such registration or approval and
shall use its reasonable efforts to obtain appropriate approvals under
state "blue sky" securities laws.
Section 8. Adjustments. The Exercise Price and the number
of shares of Common Stock issuable upon exercise of each whole Warrant
shall be subject to adjustment from time to time as follows:
<PAGE>
(a) Stock Dividends; Stock Splits; Reverse Stock Splits;
Reclassifications. If the Company shall (i) pay a dividend in shares
of Common Stock or make any other distribution with respect to its
Common Stock in shares of Common Stock, (ii) subdivide its outstanding
Common Stock, (iii) combine its outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of Common Stock in
a reclassification of the Common Stock (including any such
reclassification in connection with a merger, consolidation or other
business combination in which the Company is the continuing
corporation), then the number of shares of Common Stock issuable upon
exercise of each Warrant immediately prior to the record date for such
dividend or distribution or the effective date of such subdivision or
combination shall be adjusted so that the Holder of each Warrant shall
thereafter be entitled to receive the kind and number of shares of
Common Stock or other securities or property (including cash) of the
Company that such Holder would have owned or have been entitled to
receive after the happening of any of the events described above, had
such Warrant been exercised immediately prior to the happening of such
event or any record date with respect thereto. An adjustment made
pursuant to this Section 8(a) shall become effective immediately after
the effective date of such event retroactive to the record date, if
any, for such event.
(b) Rights; Options; Warrants. If the Company shall issue
rights, options, warrants or convertible or exchangeable securities
(other than a convertible or exchangeable security subject to Section
8[a]) to all holders of its Common Stock ("Additional Options"),
entitling them to subscribe for or purchase Common Stock at a price per
share that is lower (at the record date for such issuance) than the
Current Market Value per share of Common Stock, the Exercise Price of
each Warrant shall be adjusted by multiplying such price by a fraction,
of which the numerator shall be (i) the number of shares of Common
Stock outstanding on the record date established for the issuance of
the Additional Rights, Options plus the number of shares of Common
Stock that the aggregate consideration received (upon issuance of such
additional shares upon exercise of such Additional Options) would
purchase at the Current Market Price, and of which the denominator
shall be the number of shares of Common Stock outstanding on the record
date established for the issuance of such Additional Options plus the
number of additional shares of Common Stock issuable upon exercise of
the Additional Options. Such adjustment shall be made whenever such
rights, options, warrants or convertible or exchangeable securities are
issued, and shall become effective retroactively immediately after the
record date for the determination of stockholders entitled to receive
such rights, options, warrants or convertible or exchangeable
securities.
<PAGE>
Any adjustment to the number of shares of Common Stock
issuable upon exercise of all Warrants then outstanding made pursuant
to this Section 8(b) shall be allocated among the Warrants then
outstanding on a pro rata basis.
(c) Issuance of Common Stock at Lower Values. If the Company
shall, in a transaction to which Section 8(b) is inapplicable, issue or
sell shares of Common Stock, or rights, options, warrants or
convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock, at a price per share
of Common Stock (determined in the case of such rights, options,
warrants or convertible or exchangeable securities, by dividing (A) the
total amount receivable by the Company in consideration of the issuance
and sale of such rights, options, warrants or convertible or
exchangeable securities, plus the total consideration, if-any, payable
to the Company upon exercise, conversion or exchange thereof, by (B)
the total number of shares of Common Stock covered by such rights,
options, warrants or convertible or exchangeable securities) that is
lower than the then Current Market Value per share of the Common Stock
in effect immediately prior to such sale or issuance, then the Exercise
Price of each Warrant shall be adjusted by multiplying such Exercise
Price by a fraction, of which the numerator shall be (i) the number of
shares of Common Stock outstanding on the record date established for
the issuance of such rights, options, or warrants plus the number of
shares of Common Stock which the aggregate consideration received (upon
exercise of such rights, options or warrants) would purchase at the
Current Market Price, and the denominator of which shall be the number
of shares of Common Stock outstanding on the record date established
for the issuance of such rights, options or warrants plus the number of
additional shares of Common Stock issuable upon exercise thereof. Such
adjustment shall be made successively whenever any such sale or
issuance is made.
In case the Company shall issue and sell shares of Common
Stock or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of
Common Stock for a consideration consisting, in whole or in part, of
property other than cash or its equivalent, then in determining the
price per share of Common Stock and the "consideration" receivable by
or payable to the Company for purposes of the first sentence of this
Section 8(c), the Board of Directors of the Company shall determine, in
good faith, the fair value of such property. In case the Company shall
issue and sell rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of
Common Stock, together with one or more other securities as part of a
<PAGE>
unit at a price per unit, then in determining the "price per share of
Common Stock" and the "consideration" receivable by or payable to the
Company for purposes of the first sentence of this Section 8(c), the
Board of Directors of the Company shall determine, in good faith, the
fair value of the rights, options, warrants or convertible or
exchangeable securities then being sold as part of such unit.
Any adjustment to the number of shares of Common Stock
issuable upon exercise of all Warrants then outstanding made pursuant
to this Section 8(c) shall be allocated among each Warrant then
outstanding on a pro rata basis.
The provisions of this Section 8(c) shall not apply (i) to
shares issued pursuant to an employee stock option plan or similar plan
providing for options or other similar rights to purchase shares of
Common Stock, (ii) to issuances pursuant to incentive bonus plans or
(iii) to shares issued in payment or settlement of any other equity-
related award to employees.
(d) Expiration of Rights, Options and Conversion Privileges.
Upon the expiration of any rights, options, warrants or conversion or
exchange privileges that have previously resulted in an adjustment
hereunder, if any thereof shall not have been exercised, the Exercise
Price and the number of shares of Common Stock issuable upon the
exercise of each Warrant shall, upon such expiration, be readjusted and
shall thereafter, upon any future exercise, be such as they would have
been had they been originally adjusted (or had the original adjustment
not been required, as the case may be) as if (i) the only shares of
Common Stock so issued were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such rights, options,
warrants or conversion or exchange rights and (ii) such shares of
Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the
consideration, if any, actually received by the Company for issuance,
sale or grant of all such rights, options, warrants or conversion or
exchange rights whether or not exercised; provided, however, that no
such readjustment shall have the effect of increasing the Exercise
Price by an amount, or decreasing the number of shares issuable upon
exercise of each Warrant by a number, in excess of the amount or number
of the adjustment initially made in respect of the issuance, sale or
grant of such rights, options, warrants or conversion or exchange
rights.
<PAGE>
(e) Current Market Value. For the purposes of any
computation under this Section 8 or under Section 7(b), the Current
Market Value per share of Common Stock at the date herein specified
shall be deemed to be the average of the daily market prices of the
Common Stock for the 20 consecutive trading days immediately preceding
the day as of which "Current Market Value" is being determined. The
market price for each such trading day shall be the closing price,
regular way, on such day, or if no sale takes place on such day, the
average of the closing bid and asked prices on such day.
(f) Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. If the Company (i) consolidates with or merges
into any other corporation and is not the continuing or surviving
corporation of such consolidation or merger, or (ii) permits any other
corporation to consolidate with or merge into the Company and the
Company is the continuing or surviving corporation but, in connection
with such consolidation or merger, the Common Stock is converted into
or exchanged for stock or other securities of any other corporation or
cash or any other assets, or (iii) transfers all or substantially all
of its properties and assets to any other corporation, or (iv) effects
a capital reorganization or reclassification of the capital stock of
the Company in such a way that holders of Common Stock shall be
entitled to receive stock, securities, cash or assets with respect to
or in exchange for Common Stock, then, and in each such case, proper
provision shall be made so that, upon the basis and upon the terms and
in the manner provided in this subsection (f), each Holder, upon the
exercise of each Warrant at any time after the consummation of such
consolidation, merger, transfer, reorganization or reclassification,
shall be entitled to receive (at the aggregate Exercise Price in effect
for all shares of Common Stock issuable upon such exercise immediately
prior to such consummation as adjusted to the time of such
transaction), in lieu of shares of Common Stock issuable upon such
exercise prior to such consummation, the stock and other securities,
cash and assets to which such Holder would have been entitled
immediately prior to the record date for such dividend or distribution
or the effective date of such consolidation, merger, transfer,
reorganization or reclassification.
(g) De Minimis Adjustments. Except as provided in Section
8(c) with reference to adjustments required by such Section 8(c), no
adjustment in the Exercise Price shall be required unless such
adjustment would result in an increase or decrease of such Exercise
Price by at least one percent (1%); provided, however, that any
adjustments which by reason of this Section 8(h) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one-
thousandth of a share.
<PAGE>
(h) Notice of Adjustment. Whenever the number of shares of
Common Stock or other stock or property issuable upon the exercise of
each Warrant is adjusted, as herein provided, the Company shall
promptly give written notice (signed by the Chief Financial Officer or
Chief Executive Officer) to the Warrant Agent of such adjustment or
adjustments and shall cause the Warrant Agent promptly to mail by first
class mail, postage prepaid, to each Holder notice of such adjustment
or adjustments and shall deliver to the Warrant Agent a certificate of
a firm of independent public accountants selected by the Board of
Directors of the Company (who may be the regular accountants employed
by the Company) setting forth the adjusted Exercise Price, setting
forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which such adjustment was made. The
Warrant Agent shall be entitled to rely on such certificate and shall
be under no duty or responsibility with respect to any such
certificate, except to exhibit the same from time to time to any Holder
desiring an inspection thereof during reasonable business hours. The
Warrant Agent shall not at any time be under any duty or responsibility
to any Holder to determine whether any facts exist that may require any
adjustment of the number of shares of Common Stock or other stock or
property issuable on exercise of the Warrants, or with respect to the
nature or extent of any such adjustment when made, or with respect to
the method employed in making such adjustment or the validity or value
(or the kind or amount) of any shares of Common Stock or other stock or
property which may be issuable on exercise of the Warrants. The
Warrant Agent shall not be responsible for any failure of the Company
to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates or other common stock or property
upon the exercise of any Warrant.
(i) Statement on Warrants. Irrespective of any adjustment in
the number or kind of shares issuable upon the exercise of the
Warrants, Warrants theretofore or thereafter issued may continue to
express the same number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 9. Fractional Shares of Common Stock on Exercise of
the Warrants. The Company shall not be required to issue fractional
shares of Common Stock on exercise of the Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the
same Holder, the number of full shares of Common Stock that shall be
issuable upon such exercise thereof shall be computed on the basis of
the aggregate number of shares of Common Stock acquirable on exercise
of the Warrants so presented. If any fraction of a share of Common
<PAGE>
Stock would, except for the provisions of this Section 9, be issuable
on the exercise of any Warrant (or specified portion thereof), the
Company shall pay an amount in cash calculated by it in accordance with
Section 8(e) to be equal to the then Current Market Value multiplied by
such fraction computed to the nearest whole cent. The Holders, by
their acceptance of the Warrant Certificates, expressly waive any and
all rights to receive any fraction of a share of Common Stock or a
stock certificate representing a fraction of a share of Common Stock.
Section 10. No Stock Rights. Prior to the exercise of the
Warrants, no Holder of a Warrant Certificate, as such, shall be
entitled to vote or be deemed the holder of shares of Common Stock or
any other securities of the Company that may at any time be issuable on
the exercise hereof, nor shall anything contained herein be construed
to confer upon any Holder of a Warrant Certificate, as such, the rights
of a stockholder of the Company or the right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, to exercise any preemptive right, to receive notice of meetings
or other actions affecting stockholders (except as provided herein), or
to receive dividends or subscription rights or otherwise.
Section 11. The Warrant Agent. (a) The Company hereby
appoints the Warrant Agent to act as agent of the Company as set forth
in this Agreement. The Warrant Agent hereby accepts the appointment as
agent of the Company and agrees to perform that agency upon the terms
and conditions herein set forth, by all of which the Company and the
Holders of Warrants, by their acceptance thereof, shall be bound. No
implied duties or obligations shall be read into this Agreement against
the Warrant Agent. The Warrant Agent shall not by countersigning
Warrant Certificates or by any other act hereunder be deemed to make
any representation as to validity or authorization of the Warrants or
the Warrant Certificates (except as to its countersignature thereon) or
of any securities or other property delivered upon exercise of any
Warrant, or as to the number or kind or amount of stock or other
securities or other property deliverable upon exercise of any Warrant.
The Warrant Agent shall not have any duty to calculate or determine any
adjustments with respect either to the kind and amount of shares or
other securities or any property receivable by Holders upon the
exercise or tender of Warrants required from time to time, and the
Warrant Agent shall have no duty or responsibility in determining the
accuracy or correctness of any such calculation, other than to apply
any adjustment, notice of which is given by the Company to the Warrant
Agent to be mailed to the Holders in accordance with Section 8(i). The
Warrant Agent shall not (i) be liable for any recital or statement of
<PAGE>
fact contained herein or in the Warrant Certificates or for any action
taken, suffered or omitted by it in good faith on the belief that any
Warrant Certificate or any other documents or any signatures are
genuine or properly authorized, (ii) be responsible for any failure on
the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in the Warrant Certificates,
or (iii) be liable for any act or omission in connection with this
Agreement except for its own negligence or willful misconduct. The
Warrant Agent is hereby authorized to accept instructions with respect
to the performance of its duties hereunder from any officer of the
Company and to apply to any such officer for instructions (which
instructions will be promptly given in writing when requested) and the
Warrant Agent shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with the instructions of any
such officer, except for its own negligence or willful misconduct, but
in its discretion the Warrant Agent may in lieu thereof accept other
evidence of such or may require such further or additional evidence as
it may deem reasonable.
(b) The Warrant Agent shall not be under any obligation or
duty to institute, appear in or defend any action, suit or legal
proceeding in respect hereof, unless first indemnified to its
satisfaction, but this provision shall not affect the power of the
Warrant Agent to take such action as the Warrant Agent may consider
proper, whether with or without such indemnity. The Warrant Agent
shall promptly notify the Company in writing of any claim made or
action, suit or proceeding instituted against it arising out of or in
connection with this Agreement.
(c) The Company will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further acts, instruments and assurances as may reasonably be
required by the Warrant Agent in order to enable it to carry out or
perform its duties under this Agreement.
(d) The Company agrees to pay to the Warrant Agent
compensation for all services rendered by it hereunder as the Company
and the Warrant Agent may agree from time to time, and to reimburse the
Warrant Agent for reasonable expenses and disbursements incurred in
connection with the execution and administration of this Agreement
(including the reasonable compensation and the expenses of its
counsel), and further agrees to indemnify the Warrant Agent for, and to
hold it harmless against any loss, liability or expense incurred
without gross negligence or bad faith on its part, arising out of or in
connection with the acceptance and administration of this Agreement,
including the reasonable costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
<PAGE>
(e) The Warrant Agent and any stockholder, director, officer
or employee of the Warrant Agent may buy, sell and deal in any of the
Warrants or other securities of the Company or its Affiliates or become
pecuniarily interested in transactions in which the Company or its
Affiliates may be interested, or contract with or lend money to the
Company or its Affiliates or otherwise act as fully and freely as
though it were not the Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(f) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Warrant Agent be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to loss of profits), even if the
Warrant Agent has been advised of the form of action.
Section 12. Resignation and Removal of Warrant Agent;
Appointment of Successor. (a) No resignation or removal of the
Warrant Agent and no appointment of a successor warrant agent shall
become effective until the acceptance of appointment by the successor
warrant agent provided herein. The Warrant Agent may resign its duties
and be discharged from all further duties and liability hereunder
(except liability arising as a result of the Warrant Agent's own
negligence, bad faith or willful misconduct) after giving written
notice to the Company. The Company may remove the Warrant Agent upon
written notice, and the Warrant Agent thereupon in like manner be
discharged from all further duties and liabilities hereunder, except as
aforesaid. Upon such resignation or removal, the Company shall appoint
in writing a new warrant agent. If the Company shall fail to make such
appointment within a period of 60 days after it has been notified in
writing of such resignation by the resigning Warrant Agent or after
such removal, then a Holder may apply to any court of competent
jurisdiction for the appointment of a new warrant agent. Any new
warrant agent, whether appointed by the Company or by such a court,
shall be a corporation doing business under the laws of the United
States or any State thereof, in good standing and having a combined
capital and surplus of not less than $50,000,000. The combined capital
and surplus of any such new warrant agent shall be deemed to be the
combined capital and surplus as set forth in the most recent annual
report of its condition published by such warrant agent prior to its
appointment, provided that such reports are published at least annually
pursuant to law or to the requirements of a Federal or state
supervising or examining authority. After acceptance in writing of
such appointment by the new warrant agent, it shall be vested with the
same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further
<PAGE>
assurance, conveyance, act or deed; but if for any reason it shall be
necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the
Company and shall be legally and validly executed and delivered by the
resigning or removed Warrant Agent. Not later than the effective date
of any such appointment, the Company shall give notice thereof to the
resigning or removed Warrant Agent. Failure to give any notice
provided for in this Section, however, or any defect therein, shall not
affect the legality or validity of the resignation of the Warrant Agent
or the appointment of a new warrant agent, as the case may be.
(b) Any corporation into which the Warrant Agent or any new
warrant agent may be merged or any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall
be a party, or any corporation succeeding to all or substantially all
of the corporate trust business of the Warrant Agent, shall be a
successor Warrant Agent under this Agreement without any further act,
provided that such corporation (i) would be eligible for appointment as
successor to the Warrant Agent under the provisions of Section 12(a) or
(ii) is a wholly owned subsidiary of the Warrant Agent. Any such
successor Warrant Agent shall promptly cause notice of its succession
as Warrant Agent to be mailed first-class mail, postage prepaid) to
each Holder at such Holder's last address as shown on the Register.
Section 13. Money and Other Property Deposited with the
Warrant Agent. Any moneys, securities or other property that at any
time shall be deposited on behalf of the Company with the Warrant Agent
pursuant to this Agreement shall be and are hereby assigned,
transferred and set over to the Warrant Agent in trust for the purpose
for which such moneys, securities or other property shall have been
deposited; but such moneys, securities or other property need not be
segregated from other funds, securities or other property except to the
extent required by law.
Section 14. Consolidations and Mergers of the Company and
Sales, Leases and Conveyances Permitted Subject to Certain Conditions.
(a) The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other
corporation, provided that in any such case, either the Company shall
be the continuing corporation, or the successor corporation shall be a
corporation organized and existing under the laws of the United States
of America or a State thereof and such successor corporation shall
expressly assume the obligations of the Company hereunder.
<PAGE>
(b) In case of any such consolidation, merger, sale, lease or
conveyance and upon any such assumption by the successor corporation,
such successor corporation shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein, and the
predecessor corporation, except in the event of a lease, shall be
relieved of any further obligation under this Agreement and the
Warrants.
Section 15. Notices. (a) Except as otherwise provided in
Section 15(b), any notice, demand or delivery authorized by this
agreement shall be sufficiently given or made when mailed if sent by
first-class mail, postage prepaid, addressed to any Holder at such
Holder's address shown on the Register and to the Company or the
Warrant Agent as follows:
If to the Company:
IMC Global Inc.
2100 Sanders Road
Northbrook, Illinois 60062
Attention: Marschall I. Smith
Senior Vice President and General Counsel
with a copy to:
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Thomas A. Cole
Larry A. Barden
If to the Warrant Agent:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: Corporate Trust Department
or such other address as shall have been furnished to the party giving
or making such notice, demand or delivery.
(b) Any notice required to be given by the Company to the
Holders shall be made by mailing by registered mail, return receipt
requested, to the Holders at their respective addresses shown on the
Register. The Company hereby irrevocably authorizes the Warrant Agent,
in the name and at the expense of the Company, to mail any such notice
upon receipt thereof from the Company. Any notice that is mailed in
the manner herein provided shall be conclusively presumed to have been
duly given when mailed, whether or not the Holder receives the notice.
<PAGE>
Section 16. Amendments. (a) The Company may from time to
time supplement or amend this Agreement without the consent of any
Holder, in order to (i) cure any ambiguity or correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein or (ii) add to the covenants and agreements of the
Company for the benefit of the Holders, or surrender any rights or
powers reserved to or conferred upon the Company in this Agreement.
Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in
compliance with the terms of this section, the Warrant Agent shall join
with the Company in the execution and delivery of any such supplemental
agreements unless it affects the Warrant Agent's own rights, duties or
immunities hereunder in which case such party may, but shall not be
required to, join in such execution and delivery.
(b) With the consent of the registered holders of at least a
majority in number of the Warrants at the time outstanding, the Company
and the Warrant Agent may at any time and from time to time by
supplemental agreement or amendment add any provisions to or change in
any manner or eliminate any of the provisions of this Agreement or of
any supplemental agreement or modify in any manner the rights and
obligations of the Warrant holders and of the Company; provided,
however, that no such supplemental agreement or amendment shall,
without the consent of the registered holder of each outstanding
Warrant affected thereby:
(1) alter the provisions of this Agreement so as to affect
adversely the terms upon which the Warrants are exercisable; or
(2) reduce the number of Warrants outstanding the consent of
whose holders is required for any such supplemental agreement or
amendment.
Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is
in compliance with the terms of this section, the Warrant Agent shall
join with the Company in the execution and delivery of any such
supplemental agreements unless it affects the Warrant Agent's own
rights, duties or immunities hereunder in which case such party may,
but shall not be required to, join in such execution and delivery.
Section 17. Persons Benefiting. This Agreement shall be
binding upon and inure to the benefit of the Company and the Warrant
Agent, and their respective successors, assigns, beneficiaries,
executors and administrators, and each registered Holder of the
Warrants. Nothing in this Agreement is intended or shall be construed
to confer upon any person, other than the Company, the Warrant Agent
and the Holders of the Warrants, any right, remedy or claim under or by
reason of this Agreement or any part hereof.
<PAGE>
Section 18. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original,
but all of which together constitute one and the same instrument.
Section 19. Surrender of Certificates. Any Warrant
Certificate surrendered for exercise or purchase or otherwise acquired
by the Company shall, if surrendered to the Company, be delivered to
the Warrant Agent, and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly canceled by such
Warrant Agent and shall not be reissued by the Company. The Warrant
Agent shall deliver such canceled Warrant Certificates to the Company.
Section 20. Termination of Agreement. This Agreement shall
terminate and be of no further force and effect on the earliest of (a)
the Expiration Date or (b) the date on which all of the Warrants have
been exercised, except that the provisions of Sections 11 and 13 shall
continue in full force and effect after such termination date.
Section 21. Governing Law. This Agreement and each Warrant
issued hereunder and all rights arising hereunder shall be construed in
accordance with and governed by the laws of the State of New York,
without giving effect to the principles of conflicts of laws thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by its officer thereunto duly authorized as of
the date first above written.
IMC GLOBAL INC.
By: /s/ Marschall Smith
Name: Marschall I. Smith
Title: Senior Vice President
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Warrant Agent
By: /s/ Paula Caroppoli
Name: Paula Caroppoli
Title: Vice President
<PAGE>
EXHIBIT A
FORM OF FACE OF WARRANT CERTIFICATE
WARRANTS TO PURCHASE COMMON STOCK
OF IMC GLOBAL INC.
Certificate for Warrants
CUSIP No.
-------
This certifies that , or
registered assigns, is the registered holder of the number of Warrants
set forth above (the "Warrants"). Each Warrant entitles the holder
thereof (a "Holder"), subject to the provisions contained herein and in
the Warrant Agreement referred to below, to purchase from IMC Global
Inc., a Delaware corporation (the "Company"), one share of Common
Stock, par value $l.00 per share, of the Company ("Common Stock"), at
the exercise price (the "Exercise Price") of $44.50 per share, subject
to adjustment upon the occurrence of certain events. This Warrant
Certificate shall terminate and become void as of the close of business
on December 22, 2000; provided, however, that if the last day for the
exercise of the Warrants shall not be a Business Day, then the Warrants
may be exercised on the next succeeding Business Day (as defined in the
Warrant Agreement) following the Expiration Date.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement, dated as of December 22, 1997 (the "Warrant
Agreement"), between the Company and American Stock Transfer & Trust
Company, as warrant agent (the "Warrant Agent", which term includes any
successor Warrant Agent under the Warrant Agreement), and is subject to
the terms and provisions contained in the Warrant Agreement, to all of
which terms and provisions the Holder of this Warrant Certificate
consents by acceptance hereof. The Warrant Agreement is hereby
incorporated herein by reference and made a part hereof. Reference is
hereby made to the Warrant Agreement for a full statement of the
respective rights, limitations of rights, duties, obligations and
immunities thereunder of the Company, the Warrant Agent and the Holders
of the Warrants.
As provided in the Warrant Agreement and subject to the terms
and conditions therein set forth, the Warrants are immediately
exercisable. At 5:00 P.M. (New York City time) on the Expiration Date,
each Warrant not exercised prior thereto shall terminate and become
void and of no value; provided, however, that if the last day for the
exercise of the Warrants shall not be a Business Day, then the Warrants
may be exercised until 5:00 P.M. (New York City time) on the next
succeeding Business Day following the Expiration Date.
<PAGE>
The Exercise Price and the number of shares of Common Stock
issuable upon the exercise of each whole Warrant are subject to
adjustment as provided in the Warrant Agreement.
In order to exercise a Warrant, the registered holder hereof
must surrender this Warrant Certificate at the office of the Warrant
Agent, with the Exercise Subscription Form on the reverse hereof duly
executed by the Holder hereof, with signature guaranteed as therein
specified, together with any required payment in full of the Exercise
Price then in effect or the share(s) of Common Stock as to which the
Warrant(s) represented by this Warrant Certificate are submitted for
exercise, all subject to the terms and conditions hereof and of the
Warrant Agreement. Any such payment of the Exercise Price shall be in
cash or by certified or official bank check payable to the order of the
Company.
The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of Common Stock upon the exercise
of Warrants; provided, however, that the Company shall not be required
to pay any tax or other governmental charge which may be payable in
respect of any transfer involved in the issue or delivery of any
Warrant Certificates or certificates for Common Stock issued upon the
exercise of Warrants in a name other than that of the registered Holder
of such Warrants, and the Company shall not register any such transfer
or issue any such certificate until such tax or governmental charge, if
required, shall have been paid.
This Warrant Certificate and all rights hereunder are
transferable by the registered holder hereof, in whole or in part, on
the register of the Company, upon surrender of this Warrant Certificate
for registration of transfer at the principal corporate trust office of
the Warrant Agent maintained for such purpose in the City of New York,
duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Warrant Agent duly executed by
the Holder hereof, or his attorney duly authorized in writing, with
signature guaranteed as specified in the attached Form of Assignment.
Upon any partial transfer, the Company will issue and deliver to such
holder a new Warrant Certificate or Certificates with respect to any
portion not so transferred; provided, however, that the Company shall
not be required to issue and deliver Warrant Certificates representing
fractional warrants.
No service charge shall be made for any registration of
transfer or exchange of the Warrant Certificates, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
<PAGE>
This Warrant Certificate and the Warrant Agreement are
subject to amendment as provided in the Warrant Agreement.
All terms used in this Warrant Certificate that are defined
in the Warrant Agreement shall have the meanings assigned to them in
the Warrant Agreement.
Copies of the Warrant Agreement are on file at the office of
the Warrant Agent and may be obtained by writing to the Warrant Agent
at the following address: 40 Wall Street, New York, New York 10005,
Attention: Corporate Trust Department.
This Warrant Certificate shall not be valid for any purpose
until it shall have been countersigned by the Warrant Agent.
Dated: ,
----------------- -----
IMC GLOBAL INC.
By:
-----------------------------
Name:
Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST
COMPANY
as Warrant Agent
By:
-----------------------------
Authorized Officer
<PAGE>
FORM OF REVERSE OF WARRANT CERTIFICATE
EXERCISE SUBSCRIPTION FORM
(To be executed only upon exercise of Warrants)
To: IMC Global Inc.
The undersigned irrevocably exercises of the
Warrants for the purchase of one share per Warrant (subject to
adjustment) of Common Stock, par value $l.00 per share, of IMC Global
Inc. represented by this Warrant Certificate hereof and herewith makes
payment of $ (such payment being in cash or by certified or
official bank check payable to the order of IMC Global Inc.),
representing the Exercise Price for such Warrants so exercised. On the
terms and conditions specified in this Warrant Certificate and the
Warrant Agreement therein referred to, the undersigned hereby
surrenders this Warrant Certificate and all right, title and interest
therein to and directs that the shares of Common Stock deliverable upon
the exercise of such Warrants be registered or placed in the name and
at the address specified below and delivered thereto.
Date: ,
----------- ------
-----------------------------------
(Signature of Owner)
-----------------------------------
(Street Address)
-----------------------------------
(City) (State)(Zip Code)
Signature Guaranteed by:
-----------------------------------
<PAGE>
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised Warrants evidenced by the within Warrant
Certificate to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered holder of the
within Warrant Certificate hereby sells, assigns, and transfers unto
the Assignee(s) named below (including the undersigned with respect to
any Warrants constituting a part of the Warrants evidenced by the
within Warrant Certificate not being assigned hereby) all of the right
of the undersigned under the within Warrant Certificate, with respect
to the number of whole Warrants set forth below:
Social Security
or other
identifying
Name of number of Number of
ASSIGNEES Address Assignee(s) Warrants
and does hereby irrevocably constitute and appoint____________________
___________________________ the undersigned's attorney to make such
transfer on the books of _____________________ maintained for that
purpose, with full power of substitution in the premises.
Date: , 19
-------------- ----
-----------------------------------
(Signature of Owner)( )
-----------------------------------
(Street Address)
-----------------------------------
(City) (State)(Zip Code)
Signature Guaranteed by:
------------------------------------
::ODMA\PCDOCS\CHICAGO4\428147\9
EXHIBIT 10.56
[EXECUTION COPY]
AMENDMENT NO. I TO FIVE-YEAR CREDIT AGREEMENT
AMENDMENT dated as of March 23, 1998 among IMC Global Inc.
(the "Borrower"), the Banks listed on the signature pages hereof (the
"Banks"), Royal Bank of Canada, as Documentation Agent, The Chase
Manhattan Bank and NationsBank, N.A., as Co-Syndication Agents, and
Morgan Guaranty Trust Company of New York, as Administrative Agent (the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the parties hereto have heretofore entered into a
Five-Year Credit Agreement dated as of December 15, 1997 (the
"Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement as
specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References.
(a) Unless otherwise specifically defined herein, each term
used herein which is defined in the Agreement shall have the
meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each
other similar reference contained in the Agreement shall from and
after the date hereof refer to the Agreement as amended hereby.
(b) The following definitions are added to Section 1.01 in
their appropriate alphabetical positions:
"Existing Harris Debt" means Debt of Harris Chemical North
America, Inc., a Delaware corporation, under its outstanding
$250,000,000 10.25% Senior Secured Discount Notes and its outstanding
$335,000,000 10.75% Senior Subordinated Notes.
"Harris Chemical Acquisition" means the merger of Harris
Chemical Group with and into IMC Merger Sub Inc., a wholly-owned
Subsidiary of the Company, with Harris Chemical Group as the successor
thereto, expected to be consummated on or about March 31, 1998 pursuant
to that certain Agreement and Plan of Merger, dated December 11, 1997,
by and among the Company, IMC Merger Sub Inc. and Harris Chemical
Group.
<PAGE>
"Harris Chemical Group" means Harris Chemical Group, Inc., a
Delaware corporation.
SECTION 2. Mergers and Sale of Assets.
(a) The word "and" appearing immediately before clause (iv)
in Section 5.07(b) is hereby deleted.
(b) The following clause (v) is added to the proviso in
Section 5.07(b):
"and (v) the sale of assets acquired in or as a direct
result of the Harris Chemical Acquisition."
SECTION 3. Debt of Subsidiaries.
(a) The following language is added to the first
parenthetical in Section 5.10 immediately following the word
"excluding":
"(a) Existing Harris Debt at any time until the earlier
of (x) November 1, 1998 and (y) the repurchasing or
prepayment of such Debt by the Company or by any
such Subsidiary of the Company (but not any
refinancing thereof) and (b)"
(b) The percentage "20%" in Section 5.10 is hereby changed
to "25%".
SECTION 4. Pricing.
(a) Effective retroactively from and after December 15, 1997
(i) the proviso in the first paragraph of the Pricing Schedule is
deleted and (ii) the definition of "Conversion Date" is deleted.
(b)On the later of (i) the date this Amendment becomes
effective in accordance with Section 8 hereof and (ii) March 31,
1998, the Borrower shall pay to the. Administrative Agent for the
account of the Banks accrued amounts payable as a result of
Section 4(a).
<PAGE>
SECTION 5. Existing Letters of Credit. On the date that the
Harris Chemical Acquisition is consummated, each existing letter of
credit issued on behalf of certain Subsidiaries of Harris Chemical
Group by an Issuing Bank (as defined in the Agreement) shall, subject
to the satisfaction of the applicable terms and conditions set forth in
the Agreement, be deemed to be a Letter of Credit issued at the request
of the Company under the terms of the Agreement, and shall from and
after such date be governed by the provisions of the Agreement as fully
as if the same had been issued pursuant thereto on such date.
SECTION 6. Representations and Warranties. The Borrower
hereby represents and warrants that as of the date hereof and after
giving effect hereto:
(a) no Default has occurred and is continuing; and
(b) each representation and warranty of the Borrower set
forth in the Agreement is true and correct as though made on and
as of such date.
SECTION 7. Governing Law. This Amendment shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 8. Counterparts; Effectiveness. This Amendment may
be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Amendment shall become effective
as of the date hereof when the Administrative Agent shall have received
(i) duly executed counterparts hereof signed by the Borrower and the
Required Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Administrative Agent
shall have received telegraphic, telex or other written confirmation
from such party of execution of a counterpart hereof by such party) and
(ii) if satisfaction of subsection (i) of this Section 8 occurs after
March 31, 1998, receipt by the Administrative Agent of the amount due
pursuant to Section 4 hereof
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
IMC GLOBAL INC.
By: Eric T. Martinez
Name: Eric T. Martinez
Title: Assistant Treasurer
2100 Sanders Road
Northbrook, IL 60062
Attention: Eric Martinez
Assistant Treasurer
Telecopy number:847-205-4930
<PAGE>
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
Individually and as
Administrative Agent
By: /s/ Douglas Maher
Name: Douglas Maher
Title: Vice President
60 Wall Street
New York, NY 10260
Attention: Loan Department
Telex number: 177615 MGT
Telecopy number:(212) 648-5023
THE CHASE MANHATTAN BANK,
Individually and as Co-
Syndication Agent
By /s/ James H. Ramage
Name: James H. Ramage
Title: Vice President
NATIONSBANK, N.A., Individually
and as Co-Syndication Agent
By /s/ Wallace W. Harris, Jr.
Name: Wallace W. Harris, Jr.
Title: Vice President
ROYAL BANK OF CANADA,
Individually and as Documentation
Agent
By /s/ Gordon McArthur
Name: Gordon McArthur
Title: Manager
<PAGE>
CREDIT AGRICOLE INDOSUEZ,
Individually and as Managing
Agent
By /s/ Katherine L. Abbott
Name: Katherine L. Abbott
Title: First Vice President
By /s/ David Bouhl
Name: David Bouhl, FVP
Title: Head of Corporate Banking,
Chicago
HARRIS TRUST AND SAVINGS BANK,
Individually and as Managing
Agent
By /s/ Julie K. Hossack
Name: Julie K. Hossack
Title: Vice President
THE BANK OF MONTREAL Individually
and as Managing Agent
By /s/ Michael P. Sassos
Name: Michael P. Sassos
Title: Director
THE FIRST NATIONAL BANK
OF CHICAGO, Individually and as
Co-Agent
By T. Thomas Cheng
Name: T. Thomas Cheng
Title: First Vice President
THE NORTHERN TRUST COMPANY,
Individually and as Co-Agent
By /s/ Michelle M. Teteak
Name: Michelle M. Teteak
Title: Vice President
<PAGE>
ABN-AMRO BANK N.V.
By /s/ James R. Morgan
Name: James R. Morgan
Title: Group Vice President
By /s/ Scott J. Albert
Name: Scott J. Albert
Title: Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By /s/ G. Burton Queen
Name: G. Burton Queen
Title: Managing Director
BANQUE NATIONALE DE PARIS
By /s/ Frederick H. Moryl, Jr.
Name: Frederick H. Moryl, Jr.
Title: Senior Vice President and
Manager, Corporate
THE BANK OF NEW YORK
By /s/ John M. Lokay, Jr.
Name: John M. Lokay, Jr.
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI,
LTD. CHICAGO BRANCH
By /s/ Hajime Watanabe
Name: Hajime Watanabe
Title: Deputy General Manager
FIRST UNION NATIONAL BANK
By
------------------------
Name:
Title:
<PAGE>
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By /s/ Ian Reece Name: IAN REECE
Title: Senior Credit Officer
By /s/ Hans F. Breukhoven Name: Hans F. Breukhover
Title: Vice President.
THE SAKURA BANK, LIMITED
By /s/ Yoshikazu Nagura Name: Yoshikazu Nagura
Title: Vice President
STANDARD CHARTERED BANK
By /s/ Kristina McDavid Name: Kristina McDavid
Title: Vice President
By /s/ Francois P. Dorival-Bordes Name: Francois P. Dorival-Bordes
Title: Vice President
SUNTRUST BANK, ATLANTA
By /s/ Brian M. Davis Name: Brian M. Davis
Title: A.V.P.
By /s/ Gregory L. Cannon Name: Gregory L. Cannon
Title: Vice President.
THE DAI-ICHI KANGYO BANK, LTD., CHICAGO BRANCH
By Name:
------------------------ Title:
<PAGE>
MARINE MIDLAND BANK
By Name:
------------------------ Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By Name:
------------------------ Title:
EXHIBIT 10.57
[CONFORMED COPY]
AMENDMENT NO. 2 TO FIVE-YEAR CREDIT AGREEMENT
AMENDMENT dated as of December 14, 1998 to the Five-Year Credit
Agreement dated as of December 15, 1997 (as amended by Amendment No. 1
to Five-Year Credit Agreement dated as of March 23, 1998, the
"Agreement") among IMC Global Inc. (the "Borrower"), the Banks listed
on the signature pages hereof (the "Banks") and Morgan Guaranty Trust
Company of New York, as Administrative Agent (the "Administrative
Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as
specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. (a) Unless otherwise
specifically defined herein, each term used herein which is defined in
the Agreement shall have the meaning assigned to such term in the
Agreement. Each reference to "hereof", "hereunder", "herein" and
"hereby" and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the Agreement
shall from and after the date hereof refer to the Agreement as amended
hereby.
SECTION 2. Amendments to Definitions. Section 1.01 of the
Agreement is amended by inserting, in their appropriate alphabetical
position, the following definitions:
"IMC Inorganic Chemicals Inc." means IMC Inorganic Chemicals Inc.,
a Delaware corporation, formerly known as Harris Chemical Group Inc.
"PLP" means Phosphate Resource Partners Limited Partnership, a
Delaware limited partnership, and its successors.
SECTION 3. Amendment to Borrowings Condition. Section 3.02 of the
Agreement is amended by amending and restating subparagraph (d) thereof
in its entirety as follows:
<PAGE>
(d) the fact that the representations and warranties (other
than (i) the representation and warranty set forth in Section
4.04(b) in the case of a Borrowing which does not result in an
increase in the sum of the aggregate outstanding principal amount
of the Loans and the aggregate Letter of Credit Liabilities, (ii)
the representation and warranty set forth in Section 4.04(a) and
(iii) the representations and warranties set forth in Section 4.12
in the case of a Borrowing after December 31, 2000) of the
Borrower and, if the Borrower is not the Company, of the Company
contained in this Agreement shall be true on and as of the date of
such Borrowing or issuance of such Letter of Credit.
SECTION 4. Amendment to Representations and Warranties. Article 4
of the Agreement is amended by adding a new Section 4.12 immediately
after Section 4.11 thereof, to read in its entirety as follows:
SECTION 4.12. Year 2000. Any reprogramming required to permit the
proper functioning, in and following year 2000, of (a) the Company's
computer systems and (b) equipment containing embedded microchips
(including systems and equipment supplied by others or with which the
Company's systems interface) and the testing of all such systems and
equipment, as so reprogrammed, will be completed in a timely fashion.
The cost to the Company of such reprogramming and testing and of the
reasonably foreseeable consequences of year 2000 to the Company
(including, without limitation, reprogramming errors and the failure of
others' systems or equipment) will not result in a Default or a
Material Adverse Effect. Except for such of the reprogramming referred
to in the preceding sentence as may be necessary, the computer and
management information systems of the Company and its Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for
the term of this Agreement, to be sufficient to permit the Company to
conduct its business without Material Adverse Effect.
SECTION 5. Amendment to Debt of Subsidiaries Covenant. Section 5.
10 of the Agreement is amended and restated in its entirety as follows:
SECTION 5.10. Debt of Subsidiaries. Total Debt of all Subsidiaries
(excluding Debt (i) of a Subsidiary owing to the Company, (ii) of a
Subsidiary owing to a Substantially-Owned Consolidated Subsidiary,
(iii) of an Eligible Subsidiary under this Agreement, (iv) of PLP in an
aggregate principal amount not exceeding $300,000,000 outstanding on
December 15, 1997 (but not any refinancing thereof), (v) of Harris
Chemical North America, Inc. and its Subsidiaries arising out of the
Argus Utilities sale-leaseback transaction in an aggregate principal
amount not exceeding $71,000,000, or (vi) of IMC Inorganic Chemicals
<PAGE>
Inc., formerly known as Harris Chemical Group Inc., and its
Subsidiaries in an aggregate principal amount not exceeding
UK50,000,000) will not at any date exceed 25% of Consolidated Net Worth
(calculated as of the last day of the fiscal quarter most recently
ended on or prior to such date). For purposes of this Section any
preferred stock of a Consolidated Subsidiary (other than the Series E
Preferred Stock) held by a Person other than the Company or a
Substantially- Owned Consolidated Subsidiary shall be included, at the
higher of its voluntary or involuntary liquidation value, in the "Debt"
of such Consolidated Subsidiary.
SECTION 6. Representations and Warranties. The Borrower hereby
represents and warrants that as of the date hereof and after giving
effect hereto:
(a) no Default has occurred and is continuing; and
(b) each representation and warranty of the Borrower set
forth in the Agreement is true and correct as though made on and
as of such date.
SECTION 7. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 8. Counterparts; Effectiveness. This Amendment may be
signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Amendment shall become effective as
of the date hereof when the Administrative Agent shall have received
duly executed counterparts hereof signed by the Borrower and the
Required Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Administrative Agent
shall have received telegraphic, telex or other written confirmation
from such party of execution of a counterpart hereof by such party).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
IMC GLOBAL INC.
By /s/ E. Paul Dunn Jr.
Title: Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By /s/ Robert Bottamedi
Title: Vice President
<PAGE>
THE CHASE MANHATTAN BANK
By /s/ James H. Ramage
Title: Vice President
NATIONSBANK, N.A.
By /s/ G. Burton Queen
Title: Managing Director
ROYAL BANK OF CANADA
By /s/ Gordon MacArthur
Title: Manager
CREDIT AGRICOLE INDOSUEZ
By /s/ David Bouhl
Title: F.V.P., Head of Corporate Banking, Chicago
By /s/ Katherine L. Abbott
Title: First Vice President
HARRIS TRUST AND SAVINGS BANK
By /s/ Julie Hossack
Title: Vice President
THE BANK OF MONTREAL
By /s/ Ian M. Plester
Title: Director
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Robert G. Sperhac
Title: Vice President
<PAGE>
THE NORTHERN TRUST COMPANY
By /s/ Michelle M. Teteak
Title: Vice President
ABN-AMRO BANK N.V.
By /s/ Scott J. Albert
Title: Vice President
By /s/ Steven M. Buehler
Title: Assistant Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By /s/ G. Burton Queen
Title: Managing Director
BANQUE NATIONALE DE PARIS
By /s/ Arnaud Collin du Bocage
Title: Executive Vice President and General Manager
THE BANK OF NEW YORK
By /s/ John M. Lokay. Jr.
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD. CHICAGO BRANCH
By /s/ Hajime Watanabe
Title: Deputy General Manager
FIRST UNION NATIONAL BANK
By /s/ Kristen M. Denning
Title: Assistant Vice President
<PAGE>
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By /s/ W. Jeffrey Vollack
Title: Senior Credit Officer and Senior Vice President
By /s/ Michiel V.M. Van der Voort
Title: Vice President
THE SAKURA BANK, LIMITED, CHICAGO BRANCH
By
Title:
STANDARD CHARTERED BANK
By /s/ Francois Dorival-Bordes
Title: Senior Vice President
By /s/ Kristina McDavid
Title: Vice President
SUNTRUST BANK, ATLANTA
By /s/ Michel A. Odermatt
Title: Vice President
By /s/ F. Steven Parrish
Title: Vice President
THE DAI-ICHI KANGYO BANK, LTD., CHICAGO BRANCH
By
Title:
MARINE MIDLAND BANK
By /s/ Steve Trepiccione
Title: Vice President - Officer #9435
<PAGE>
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By /s/ Walter R. Wolff
Title: Joint General Manager
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
By /s/ Robert Bottamedi
Title: Vice President
EXHIBIT 10.58
CONFORMED COPY
AMENDMENT NO. 3 TO FIVE-YEAR CREDIT AGREEMENT
AMENDMENT dated as of December 31, 1998 to the Five-Year Credit
Agreement dated as of December 15, 1997 (as amended by Amendment No. 1
to Five-Year Credit Agreement dated as of March 23, 1998 and Amendment
No. 2 to the Five-Year Credit Agreement dated as of December 14, 1998,
(the "Credit Agreement") among IMC Global Inc., the Banks listed on the
signature pages hereof (the "Banks") and Morgan Guaranty Trust Company
of New York, as Administrative Agent (the "Administrative Agent").
The parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise
specifically defined herein, each term used herein which is defined in
the Credit Agreement has the meaning assigned to such term in the
Credit Agreement. Each reference to "hereof", "hereunder", "herein" and
"hereby" and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the Credit
Agreement shall, after this Amendment becomes effective, refer to the
Credit Agreement as amended hereby.
SECTION 2. Amendment of Section 5.12. Calculations of the
Leverage Ratio shall (i) exclude the pretax nonrecurring charges not in
excess of $325,000,000 incurred by the Company in, and reflected in the
Company's consolidated statement of income for, the fiscal year ended
December 31, 1998 and (ii) disregard classification of the Company's
Agribusiness unit as a discontinued operation.
SECTION 3. Representations of Company. The Company represents
and warrants that (i) the representations and warranties of the Company
set forth in Article 4 of the Credit Agreement will be true on and as
of the Amendment Effective Date and (ii) no Default will have occurred
and be continuing on such date.
SECTION 4. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 5. Counterparts. This Amendment may be signed in any
number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 6. Effectiveness. This Amendment shall become effective
as of the date hereof on the date when the following conditions are met
(the "Amendment Effective Date"):
<PAGE>
(a) the Administrative Agent shall have received from
each of the Borrower and the Required Banks a counterpart hereof
signed by such party or facsimile or other written confirmation
(in form satisfactory to the Administrative Agent) that such party
has signed a counterpart hereof, and
(b) the Administrative Agent shall have received an
amendment fee for the account of each Bank which shall have timely
signed and delivered a counterpart hereof in accordance with
clause (a) in an amount equal to 0.05% of such Bank's Commitment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
IMC GLOBAL INC.
By /s/ E. Paul Dunn, Jr.
Title: Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By /s/ Robert Bottamedi
Title: Vice President
THE CHASE MANHATTAN BANK
By /s/ James H. Ramage
Title: Vice President
NATIONSBANK, N.A.
By /s/ G. Burton Queen
Title: Managing Director
ROYAL BANK OF CANADA
By /s/ Gordon MacArthur
Title: Manager
<PAGE>
CREDIT AGRICOLE INDOSUEZ
By /s/ Katherine L. Abbott
Title: First Vice President
By /s/ David Bouhl
Title: F.V.P., Head of Corporate
Banking Chicago
HARRIS TRUST AND SAVINGS BANK
By /s/ Julie K. Hossack
Title: Vice President
THE BANK OF MONTREAL
By /s/ Ian M. Plester
Title: Director
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Kenneth J. Fatur
Title: Vice President
THE NORTHERN TRUST COMPANY
By /s/ Michelle M. Teteak
Title: Vice President
ABN-AMRO BANK N.V.
By /s/ Scott J. Albert
Title: Vice President
By /s/ Darin P. Fischer
Title: Assistant Vice President
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By /s/ G. Burton Queen
Title: Managing Director
BANQUE NATIONALE DE PARIS
By /s/ Arnaud Collin du Bocage
Title: Executive Vice President and
General Manager
THE BANK OF NEW YORK
By /s/ John M. Lokay. Jr.
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.
CHICAGO BRANCH
By /s/ Hajime Watanabe
Title: Deputy General Manager
FIRST UNION NATIONAL BANK
By /s/ Kristen M. Denning
Title: Assistant Vice President
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH
By
Title:
By
Title:
<PAGE>
STANDARD CHARTERED BANK
By /s/ Francois Dorival-Bordes
Title: Senior Vice President
By /s/ Kristina McDavid
Title: Vice President
SUNTRUST BANK, ATLANTA
By /s/ Michel A. Odermatt
Title: Vice President
By /s/ Patrick M. Kotora
Title: Banking Officer
THE DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By /s/ Nobuyasu Fukatsu
Title: Manager
MARINE MIDLAND BANK
By /s/ Steve Trepiccione
Title: Vice President - Officer #9435
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By /s/ Walter Wolff
Title: Joint General Manager
Senior Vice President
EXHIBIT 10.59
[COMPOSITE CONFORMED COPY AS
AMENDED BY AMENDMENT NO. 1]
$350,000,000
364-DAY
CREDIT AGREEMENT
dated as of
December 14, 1998
among
IMC Global Inc.,
The Banks, Managing Agents and
Co-Agents Listed Herein,
and
Morgan Guaranty Trust Company of New York,
as Administrative Agent
J.P. Morgan Securities Inc.,
Arranger
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 Definitions
Section 1.01. Definitions 1
Section 1.02. Accounting Terms and Determinations . 13
Section 1.03. Types of Borrowings . . . . . . . . . 13
ARTICLE 2 The Credits
Section 2.02. Notice of Committed Borrowings 15
Section 2.03. Bid Rate Borrowings . . . . . . . . . 16
Section 2.04. Notice to Banks; Funding of Loans . . 20
Section 2.05. Registry; Notes . . . . . . . . . . . 21
Section 2.06. Maturity of Loans . . . . . . . . . . 21
Section 2.07. Interest Rates. . . . . . . . . . . . 21
Section 2.08. Facility Fees . . . . . . . . . . . . 23
Section 2.09. Optional Termination or Reduction of Commitments 23
Section 2.10. Method of Electing Interest Rates . . 23
Section 2.11. Scheduled Termination of Commitments. 25
Section 2.12. Optional Prepayments. . . . . . . . . 25
Section 2.13. General Provisions as to Payments . . 26
Section 2.14. Funding Losses. . . . . . . . . . . . 26
Section 2.15. Computation of Interest and Fees. . . 27
Section 2.16. Regulation D Compensation . . . . . . 27
Section 2.17. Foreign Costs . . . . . . . . . . . . 28
ARTICLE 3 Conditions
Section 3.01. Effectiveness 28
Section 3.02. Borrowings. . . . . . . . . . . . . . 29
Section 3.03. First Borrowing by Each Eligible Subsidiary 30
ARTICLE 4 Representations and Warranties
Section 4.01. Corporate Existence and Power 31
Section 4.02. Corporate and Governmental Authorization;
No Contravention 31
Section 4.03. Binding Effect. . . . . . . . . . . . 31
Section 4.04. Financial Information . . . . . . . . 31
Section 4.05. Litigation. . . . . . . . . . . . . . 32
Section 4.06. Compliance with Laws. . . . . . . . . 32
Section 4.07. Environmental Matters . . . . . . . . 33
Section 4.08. Taxes . . . . . . . . . . . . . . . . 33
Section 4.09. Subsidiaries. . . . . . . . . . . . . 33
Section 4.10. Regulatory Restrictions on Borrowing. 33
<PAGE>
Section 4.11. Full Disclosure . . . . . . . . . . . 34
Section 4.12. Year 2000 . . . . . . . . . . . . . . 34
ARTICLE 5 Covenants
Section 5.01. Information 35
Section 5.02. Payment of Obligations. . . . . . . . 37
Section 5.03. Maintenance of Property; Insurance. . 37
Section 5.04. Conduct of Business and Maintenance of Existence 37
Section 5.05. Compliance with Laws. . . . . . . . . 38
Section 5.06. Inspection of Property, Books and Records 38
Section 5.07. Mergers and Sales of Assets . . . . . 38
Section 5.08. Use of Proceeds . . . . . . . . . . . 39
Section 5.09. Negative Pledge . . . . . . . . . . . 39
Section 5.10. Debt of Subsidiaries. . . . . . . . . 40
Section 5.11. Transactions with Affiliates. . . . . 41
Section 5.12. Leverage Ratio. . . . . . . . . . . . 41
ARTICLE 6 Defaults
Section 6.01. Events of Default 42
Section 6.02. Notice of Default . . . . . . . . . . 45
ARTICLE 7 The Administrative Agent
Section 7.01. Appointment and Authorization 45
Section 7.02. Administrative Agent and Affiliates . 45
Section 7.03. Action by Administrative Agent. . . . 45
Section 7.04. Consultation with Experts . . . . . . 45
Section 7.05. Liability of Administrative Agent . . 45
Section 7.06. Indemnification . . . . . . . . . . . 46
Section 7.07. Credit Decision . . . . . . . . . . . 46
Section 7.08. Successor Administrative Agent. . . . 46
Section 7.09. Administrative Agent's Fees . . . . . 47
Section 7.10. Other Agents. . . . . . . . . . . . . 47
ARTICLE 8 Change in Circumstances
Section 8.01. Basis for Determining Interest
Rate Inadequate or Unfair 47
Section 8.02. Illegality. . . . . . . . . . . . . . 48
Section 8.03. Increased Cost and Reduced Return . . 48
Section 8.04. Taxes . . . . . . . . . . . . . . . . 50
Section 8.05. Base Rate Loans Substituted for Affected
Fixed Rate Loans 52
Section 8.06. Substitution of Bank. . . . . . . . . 53
<PAGE>
ARTICLE 9 Representations and Warranties of Eligible Subsidiaries
Section 9.01. Corporate Existence and Power 54
Section 9.02. Corporate and Governmental Authorization;
Contravention 54
Section 9.03. Binding Effect. . . . . . . . . . . . 54
Section 9.04. Taxes . . . . . . . . . . . . . . . . 54
ARTICLE 10 Guaranty
Section 10.01. The Guaranty 55
Section 10.02. Guaranty Unconditional . . . . . . . 55
Section 10.03. Discharge Only Upon Payment In Full;
Reinstatement In Certain Circumstances 56
Section 10.04. Waiver by the Company. . . . . . . . 56
Section 10.05. Subrogation. . . . . . . . . . . . . 56
Section 10.06. Stay of Acceleration . . . . . . . . 57
ARTICLE 11 Miscellaneous
Section 11.01. Notices. 57
Section 11.02. No Waivers . . . . . . . . . . . . . 57
Section 11.03. Expenses; Indemnification. . . . . . 57
Section 11.04. Sharing of Set-offs. . . . . . . . . 58
Section 11.05. Amendments and Waivers . . . . . . . 59
Section 11.06. Successors and Assigns . . . . . . . 59
Section 11.07. Collateral . . . . . . . . . . . . . 61
Section 11.08. Confidentiality. . . . . . . . . . . 61
Section 11.09. Governing Law; Submission to Jurisdiction 61
Section 11.10. Counterparts; Integration. . . . . . 62
Section 11.11. Waiver of Jury Trial . . . . . . . . 62
PRICING SCHEDULE
EXHIBIT A - Note
EXHIBIT B - Form of Bid Rate Quote Request
EXHIBIT C - Form of Invitation for Bid Rate Quotes
EXHIBIT D - Form of Bid Rate Quote
EXHIBIT E-1 - Opinion of Special Counsel for the Company
EXHIBIT E-2 - Opinion of General Counsel of the Company
EXHIBIT F - Opinion of Davis Polk & Wardwell,
Special Counsel for the Administrative Agent
EXHIBIT G - Assignment and Assumption Agreement
EXHIBIT H - Form of Election to Participate
EXHIBIT I - Form of Election to Terminate
EXHIBIT J - Matters to be covered in Opinion of Counsel
for Eligible Subsidiary
<PAGE>
EXHIBIT K - Form of Notice of Borrowing
EXHIBIT L - Form of Notice of Interest Rate Election
EXHIBIT M - Form of Extension Agreement
<PAGE>
364-DAY
CREDIT AGREEMENT
364-DAY CREDIT AGREEMENT dated as of December 14, 1998 among IMC
GLOBAL INC., the BANKS, MANAGING AGENTS and CO-AGENTS listed on the
signature pages hereof, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Acquisition" means an acquisition by the Company or any of its
Consolidated Subsidiaries of a company, a division, a location or a
line of business or of all or substantially all of the assets of
any of the foregoing.
"Administrative Agent" means Morgan Guaranty Trust Company of New
York in its capacity as administrative agent for the Banks hereunder,
and its successors in such capacity.
"Administrative Questionnaire" means, with respect to each Bank,
the administrative questionnaire in the form submitted to such Bank by
the Administrative Agent and submitted to the Administrative Agent
(with a copy to the Company) duly completed by such Bank.
"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Company (a
"Controlling Person") or (ii) any Person (other than the Company or a
Subsidiary) which is controlled by or is under common control with a
Controlling Person. As used herein, the term "control" means
possession, directly or indirectly, of the power to vote 10%
or more of any class of voting securities of a Person or to direct or
cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agrico" means IMC-Agrico Company, a Delaware general partnership,
and its successors.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Domestic Loans, its Domestic Lending Office, (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and
(iii) in the case of its Bid Rate Loans, its Bid Rate Lending Office.
<PAGE>
"Approved Officer" means the president, the chief financial
officer, the treasurer, a vice president, an assistant treasurer or
the controller of the Company or such other representative of the
Company as may be designated by any one of the foregoing with the
consent of the Administrative Agent.
"Assignee" has the meaning set forth in Section 11.06(c).
"Bank" means each bank or other financial institution listed on
the signature pages hereof, each Assignee which becomes a Bank pursuant
to Section 11.06(c), each substitute financial institution which
becomes a Bank pursuant to Section 2.01(b) and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1%
plus the Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan which bears interest at
the Base Rate pursuant to the applicable Notice of Committed Borrowing
or Notice of Interest Rate Election or the provisions of Article 8.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to
by any member of the ERISA Group.
"Bid Rate (General)" has the meaning set forth in Section 2.03(d).
"Bid Rate (General) Auction" means a solicitation of Bid Rate
Quotes setting forth Bid Rates (General) pursuant to Section 2.03.
"Bid Rate (General) Loan" means a loan made or to be made by a
Bank pursuant to a Bid Rate (General) Auction.
"Bid Rate (Indexed) Auction" means a solicitation of Bid Rate
Quotes setting forth Bid Rate (Indexed) Margins based on the London
Interbank Offered Rate pursuant to Section 2.03.
"Bid Rate (Indexed) Loan" means a loan made or to be made by a
Bank pursuant to a Bid Rate (Indexed) Auction (including such a loan
bearing interest at the Base Rate pursuant to Section 8.01(a)).
"Bid Rate (Indexed) Margin" has the meaning set forth in Section
2.03(d).
<PAGE>
"Bid Rate Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Bid Rate Lending Office
by notice to the Company and the Administrative Agent; provided that
any Bank may from time to time by notice to the Company and the
Administrative Agent designate separate Bid Rate Lending Offices for
its Bid Rate (Indexed) Loans, on the one hand, and its Bid Rate
(General) Loans, on the other hand, in which case all references herein
to the Bid Rate Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Bid Rate Loan" means a Bid Rate (Indexed) Loan or a Bid Rate
(General) Loan.
"Bid Rate Quote" means an offer by a Bank to make a Bid Rate Loan
in accordance with Section 2.03.
"Borrower" means the Company or any Eligible Subsidiary, as the
context may require, and their respective successors, and "Borrowers"
means all of the foregoing. References to "the Borrower" in connection
with any Loan are to the Borrower to which such Loan is or is to be
made. As the context may permit, the terms "Borrower" and "Borrowers"
include the Company in its capacity as guarantor of the obligations of
the other Borrowers hereunder.
"Borrowing" has the meaning set forth in Section 1.03.
"Co-Agent" means each Bank designated as a Co-Agent on the
signature pages hereof, in its capacity as co-agent in respect of this
Agreement.
"Commitment" means (i) with respect to each Bank listed on the
signature pages hereof, the amount set forth opposite the name of such
Bank on the signature pages hereof, and (ii) with respect to each
Assignee or substitute financial institution which becomes a Bank
pursuant to Section 11.06(c) or 2.01(b), the amount of the Commitment
thereby assumed by it, in each case as such amount may from time to
time be reduced pursuant to Section 2.09 or 11.06(c) or increased
pursuant to Section 11.06(c) or 2.01(b).
"Committed Loan" means a Loan made by a Bank pursuant to Section
2.01(a); provided that, if any loan or loans (or portions thereof) are
combined or subdivided pursuant to a Notice of Interest Rate Election,
the term "Committed Loan" shall refer to the combined principal amount
resulting from such combination or to each of the separate principal
amounts resulting from such subdivision, as the case may be.
<PAGE>
"Company" means IMC Global Inc., a Delaware corporation, and its
successors.
"Consolidated Net Worth" means at any date the consolidated
shareholders' equity of the Company and its Consolidated Subsidiaries
determined as of such date (other than any amount attributable to stock
which is required to be redeemed or is redeemable at the option of the
holder, if certain events or conditions occur or exist or otherwise).
"Consolidated Subsidiary" means, for any Person at any date, any
Subsidiary or other entity the accounts of which would be consolidated
with those of such Person in its consolidated financial statements if
such statements were prepared as of such date; unless otherwise
specified
"Consolidated Subsidiary" means a Consolidated Subsidiary of the
Company.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable
and similar items arising in the ordinary course of business, (iv) all
obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all
non-contingent obligations (and, for purposes of Section 5.09 and the
definition of Material Financial Obligations, all contingent
obligations) of such Person to reimburse any bank or other Person in
respect of amounts paid under a letter of credit or similar instrument,
(vi) all Debt secured by a Lien on any asset of such Person, whether or
not such Debt is otherwise an obligation of such Person, provided that
the amount of such Debt treated as Debt of such Person solely pursuant
to this clause (vi) shall not exceed the greater of the book value or
the fair market value of the collateral, and (vii) all Debt of
others Guaranteed by such Person. For purposes of clause (v) above, a
reimbursement obligation in respect of a letter of credit or similar
instrument is contingent unless and until there shall have
been a drawing under such letter of credit or instrument.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
<PAGE>
"Derivatives Obligations" of any Person means all obligations of
such Person in respect of any rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option,
equity or equity index swap, equity or equity index option, bond
option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or
any other similar transaction (including any option with respect to any
of the foregoing transactions) or any combination of the foregoing
transactions.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City or Chicago are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic
Lending Office) or such other office as such Bank may hereafter
designate as its Domestic Lending Office by notice to the Company and
the Administrative Agent.
"Effective Date" means the date this Agreement becomes effective
in accordance with Section 3.01.
"Election to Participate" means an Election to Participate
substantially in the form of Exhibit H hereto.
"Election to Terminate" means an Election to Terminate
substantially in the form of Exhibit I hereto.
"Eligible Subsidiary" means any Substantially-Owned Consolidated
Subsidiary of the Company as to which an Election to Participate shall
have been delivered to the Administrative Agent and as to which an
Election to Terminate shall not have been delivered to the
Administrative Agent. Each such Election to Participate and Election to
Terminate shall be duly executed on behalf of such Consolidated
Subsidiary and the Company in such number of copies as the
Administrative Agent may request. The delivery of an Election to
Terminate shall not affect any obligation of an Eligible Subsidiary
theretofore incurred. The Administrative Agent shall promptly give
notice to the Banks of the receipt of any Election to Participate or
Election to Terminate.
<PAGE>
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the
environment or to emissions, discharges or releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances
or wastes into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor statute.
"ERISA Group" means the Company, any Subsidiary and all members of
a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with
the Company or any Subsidiary, are treated as a single employer under
Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including
dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Dollar Lending Office) or such other office,
branch or affiliate of such Bank as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Company and the
Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan which bears interest at
a Euro-Dollar Rate pursuant to the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election.
"Euro-Dollar Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest determined pursuant to
Section 2.07(b) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reference Banks" means the principal London offices
of Morgan Guaranty Trust Company of New York, Royal Bank of Canada, The
Chase Manhattan Bank and Bank of America.
<PAGE>
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.16.
"Events of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Domestic Business Day next succeeding such day,
provided that (i) if such day is not a Domestic Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Domestic Business Day as so published on the next
succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to Morgan
Guaranty Trust Company of New York (or its successor as Administrative
Agent) on such day on such transactions as determined by the
Administrative Agent.
"Fixed Rate Loans" means Euro-Dollar Loans or Bid Rate Loans
(excluding Bid Rate (Indexed) Loans bearing interest at the Base Rate)
or any combination of the foregoing.
"Group of Loans" means at any time a group of Loans consisting of
(i) all Loans to a single Borrower which are Base Rate Loans at such
time or (ii) all Euro-Dollar Loans to a single Borrower having the same
Interest Period at such time, provided that, if a Committed Loan of
any particular Bank is converted to or made as a Base Rate Loan
pursuant to Article 8, such Loan shall be included in the same Group or
Groups of Loans from time to time as it would have been if it had not
been so converted or made.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt
of any other Person, provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
<PAGE>
"Harris Chemical Acquisition" means, collectively, the merger of
Harris Chemical Group with and into IMC Merger Sub Inc., a wholly-owned
Subsidiary of the Company, with Harris Chemical Group as the survivor
thereof, pursuant to the certain Agreement and Plan of Merger, dated
December 11, 1997, by and among the Company, IMC Merger Sub, Inc. and
Harris Chemical Group, and the acquisition, directly or indirectly, by
the Company of all of the outstanding shares of Harris Chemical
Australia Pty Limited pursuant to the Sale and Purchase Agreement made
as of December 11, 1997 among Prudential Asset Management Asia Limited,
DGHA Persons and Trusts named therein, Search Investment NV, Harris
Chemical Australia Pty Limited, Marsupial L.L.C., Marsupial-II L.L.C.,
Soda Ash (L) BHD, Manager Shareholders named therein and the Company.
"Harris Chemical Group" means Harris Chemical Group Inc., a
Delaware corporation.
"IMC Inorganic Chemicals Inc." means IMC Inorganic Chemicals Inc.,
a Delaware corporation,
formerly known as Harris Chemical Group, Inc.
"Indemnitee" has the meaning set forth in Section 11.03(b).
"Interest Period" means: (1) with respect to each Euro-Dollar
Loan, the period commencing on the date of borrowing specified in the
applicable Notice of Borrowing or on the date specified in
an applicable Notice of Interest Rate Election and ending one, two,
three or six, or, if deposits of a corresponding maturity are available
to each Bank in the London interbank market, nine or
twelve, months thereafter, as the Borrower may elect in such notice;
provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day; and
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Dollar Business Day of a
calendar month;
<PAGE>
(2) with respect to each Bid Rate (Indexed) Loan, the period
commencing on the date of borrowing specified in the applicable Notice
of Borrowing and ending such number of months thereafter (but not less
than one month) as the Borrower may elect in accordance with
Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day; and
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Dollar Business Day of a
calendar month; and
(3) with respect to each Bid Rate (General) Loan, the period
commencing on the date of borrowing specified in the applicable Notice
of Borrowing and ending such number of days thereafter (but not less
than 7 days) as the Borrower may elect in accordance with Section 2.03;
provided that any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and provided further that any
Interest Period which would otherwise end after the Termination Date
shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge or security interest, or any other type of preferential
arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this
Agreement, the Company or any Subsidiary shall be deemed to own subject
to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such
asset.
"Loan" means a Committed Loan or a Bid Rate Loan and "Loans" means
Committed Loans or Bid Rate Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(b).
<PAGE>
"Managing Agent" means each Bank designated as a Managing Agent on
the signature pages hereof, in its capacity as managing agent in
respect of this Agreement.
"Material Adverse Effect" means (i) a material adverse effect on
the business, financial position or results of operations of the
Company and its Consolidated Subsidiaries, considered as a whole, or
(ii) an adverse effect on the rights and obligations of the Banks and
the Administrative Agent hereunder and under the Notes which a Bank
could reasonably deem material.
"Material Financial Obligations" means a principal or face amount
of Debt and/or payment or collateralization obligations in respect of
Derivatives Obligations of the Company and/or one or more of its
Subsidiaries, arising in one or more related or unrelated transactions,
exceeding in the aggregate $100,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $100,000,000.
"Material Subsidiary" means, at any date, (i) any Subsidiary
having (x) at least 5% of the total consolidated assets of the Company
and its Consolidated Subsidiaries (determined as of the last
day of the fiscal quarter of such Person most recently ended on or
prior to such date) or (y) at least 5% of Consolidated EBITDA (as
defined in Section 5.12) for the four consecutive fiscal
quarters most recently ended on or prior to such date or (ii)
collectively, any one or more Subsidiaries having (x) at least 10% of
the total consolidated assets of the Company and its Consolidated
Subsidiaries (determined as of the last day of the fiscal quarter of
such Persons most recently ended on or prior to such date) or (y) at
least 10% of Consolidated EBITDA for the four consecutive fiscal
quarters most recently ended on or prior to such date.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group either (i) is then making or accruing an
obligation to make contributions or (ii) has within the preceding five
plan years made contributions, including for these purposes any Person
which was at the time such contribution was made a member of the ERISA
Group.
"Notes" means promissory notes of the Borrower, in the form
required by Section 2.05, evidencing the obligation of the Borrower to
repay the Loans, and "Note" means any one of such promissory notes
issued hereunder.
<PAGE>
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Bid Rate Borrowing (as defined
in Section 2.03(f)), in either case in substantially the form of
Exhibit K.
"Notice of Interest Rate Election" has the meaning set forth in
Section 2.10(a).
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section 11.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the
Internal Revenue Code and either (i) is maintained, or contributed to,
by any member of the ERISA Group for employees of any member of the
ERISA Group or (ii) has at any time within the preceding five years
been maintained, or contributed to, by any Person which was
at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"PLP" means Phosphate Resource Partners Limited Partnership, a
Delaware limited partnership, and its successors.
"Pricing Schedule" means the schedule annexed hereto denominated
as such.
"Prime Rate" means the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York in New York City from time to
time as its Prime Rate. Each change in the Prime Rate shall be
effective from and including the day such change is publicly announced.
"Quarterly Payment Date" means the last Domestic Business Day of
each March, June, September and December.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
<PAGE>
"Required Banks" means at any time Banks having more than 50% of
the aggregate amount of the Commitments or, if the Commitments shall
have been terminated, holding more than 50% of the aggregate unpaid
principal amount of the Loans.
"Revolving Credit Period" means the period from and including the
Effective Date to but not including the Termination Date.
"S&P" means Standard & Poor's Rating Services, a division of The
McGraw-Hill Companies, Inc.
"Series E Preferred Stock" means the shares of preferred stock of
the Vigoro Corporation, a Delaware corporation and wholly-owned
Subsidiary of the Company, par value $100 per share, designated Series
E.
"Subsidiary" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by such Person; unless otherwise specified,
"Subsidiary" means a Subsidiary of the Company.
"Substantial Assets" means assets sold or otherwise disposed of in
a single transaction or a series of related transactions representing
25% or more of the consolidated assets of the Company and its
Consolidated Subsidiaries, taken as a whole.
"Substantially-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary at least 80% of the Voting Stock of which is at
the time directly or indirectly owned by the Company; provided
that Agrico shall be deemed a Substantially-Owned Consolidated
Subsidiary for so long as it is a Consolidated Subsidiary.
"Termination Date" means December 13, 1999 or such later date to
which the Revolving Credit Period shall have been extended pursuant to
Section 2.01(b), or, if any such day is not a Euro-Dollar Business Day,
the next preceding Euro-Dollar Business Day.
"United States" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
<PAGE>
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit
liabilities under such Plan, determined on a plan termination basis
using the assumptions prescribed by the PBGC for purposes of Section
4044 of ERISA (or other applicable standard), exceeds (ii) the fair
market value of all Plan assets allocable to such liabilities under
Title IV of ERISA (excluding any accrued but unpaid contributions), all
determined as of the then most recent valuation date for such Plan, but
only to the extent that such excess represents a potential liability of
a member of the ERISA Group to the PBGC or any other Person under Title
IV of ERISA.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for
the election of directors (or persons performing similar functions) of
such Person, even if the right so to vote has been suspended by the
happening of such a contingency.
Section 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be
prepared in accordance with generally accepted accounting principles as
in effect from time to time, applied on a basis consistent in all
material respects (except for changes concurred in by the Company's
independent public accountants) with the most recent audited
consolidated financial statements of the Company and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Company
notifies the Administrative Agent that the Company wishes to amend any
covenant in Article 5 to eliminate the effect of any change in
generally accepted accounting principles on the operation of such
covenant (or if the Administrative Agent notifies the Company that the
Required Banks wish to amend Article 5 for such purpose), then
the Company's compliance with such covenant shall be determined on the
basis of generally accepted accounting principles in effect immediately
before the relevant change in generally accepted accounting principles
became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Company and the
Required Banks, and the parties hereto agree to enter into negotiations
in good faith in order to amend such provisions in a credit-neutral
manner so as to reflect equitably such changes with the desired result
that the criteria for evaluating the financial condition and
performance of the Company and its Consolidated Subsidiaries shall be
the same after such changes as if such changes had not been made.
<PAGE>
Section 1.03. Types of Borrowings. The term "Borrowing" denotes
the aggregation of Loans of one or more Banks to be made to a single
Borrower pursuant to Article 2 on a single date and for a single
Interest Period. Borrowings are classified for purposes of this
Agreement either by reference to the pricing of Loans comprising such
Borrowing (e.g., a "Fixed Rate Borrowing" is a Euro-Dollar Borrowing or
a Bid Rate Borrowing (excluding any such Borrowing consisting of Bid
Rate (Indexed) Loans bearing interest at the Base Rate), and a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans)
or by reference to the provisions of Article 2 under which
participation therein is determined (i.e., a "Committed Borrowing" is a
Borrowing under Section 2.01 in which all Banks participate in
proportion to their Commitments, while a "Bid Rate Borrowing" is a
Borrowing under Section 2.03 in which the Bank participants are
determined on the basis of their bids in accordance therewith).
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend. (a) During the Revolving
Credit Period, each Bank severally agrees, on the terms and conditions
set forth in this Agreement, to make loans to any Borrower pursuant to
this subsection (a) from time to time in amounts such that the
aggregate principal amount of Committed Loans by such Bank at any one
time outstanding to all Borrowers shall not exceed the amount of its
Commitment. Each Borrowing under this subsection (a) shall be in an
aggregate principal amount of $10,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the aggregate
amount available in accordance with Section 3.02(b)) and shall be made
from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, any Borrower may borrow
under this subsection (a), repay or, to the extent permitted by Section
2.12, prepay Loans and reborrow at any time during the Revolving Credit
Period under this subsection (a).
(b) The Revolving Credit Period may be extended, in the manner set
forth in this subsection 2.01(b), in each case for a period of 364 days
from the Termination Date then in effect. If the Company wishes to
request an extension of the Revolving Credit Period, it shall give
written notice to that effect to the Administrative Agent not less than
45 nor more than 90 days prior to such Termination Date then in effect,
whereupon the Administrative Agent shall promptly notify each of the
Banks of such notice. Each Bank shall respond to such request, whether
affirmatively or negatively, within 30 days; provided that no such
response shall be due more than 30 days prior to the Termination Date
then in effect. If a Bank or Banks respond negatively or fail to
timely respond to such request, but such non-extending Bank(s) have
<PAGE>
Commitment(s) totaling less than 33-1/3% of the aggregate amount of the
Commitments, the Company shall, until the third Domestic Business Day
prior to the Termination Date then in effect, have the right, with the
assistance of the Administrative Agent, to seek a mutually satisfactory
substitute financial institution or financial institutions (which may
be one or more of the Banks) to assume the Commitment(s) of such
non-extending Bank(s). Not later than the third Domestic Business Day
prior to the Termination Date then in effect, the Company shall, by
notice to the Banks through the Administrative Agent, either (i)
terminate, effective on the Termination Date then in effect,
the Commitment(s) of such non-extending Bank(s), whereupon the
aggregate amount of such Commitment(s) shall be assumed by a substitute
financial institution or financial institutions on the Termination Date
then in effect, (ii) withdraw its request for an extension of the
Revolving Credit Period, or (iii) so long as no Event of Default shall
have occurred and be continuing, terminate, effective on the
Termination Date then in effect, the Commitment(s) of any such
non-extending Bank(s) which shall not be assumed by a substitute
financial institution or financial institutions on the Termination Date
then in effect, whereupon the aggregate Commitment(s) shall be
permanently reduced by the aggregate amount of such non-extending
Bank(s)'s Commitment(s)as of the Termination Date then in effect. The
failure of the Company to timely take the actions contemplated by the
preceding sentence shall be deemed a withdrawal of its request for an
extension whether or not notice to such effect is given. So long as
Banks having Commitment(s)totaling not less than 66-2/3% of the
aggregate amount of the Commitment(s) shall have responded
affirmatively to such a request, and such request is not withdrawn in
accordance with the preceding sentence, then, subject to receipt by the
Administrative Agent of counterparts of an Extension Agreement in
substantially the form of Exhibit M duly completed and signed by each
of the Administrative Agent, the Company and each Bank electing to
extend the Revolving Credit Period, the Revolving Credit Period shall
be extended for the period specified above.
Section 2.02. Notice of Committed Borrowings. The Borrower shall
give the Administrative Agent notice (a "Notice of Committed
Borrowing") not later than 11:00 A.M. (New York City time) on (x) the
date of each Base Rate Borrowing and (y) the third Euro-Dollar
Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
<PAGE>
(c) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or a Euro-Dollar Rate; and,
(d) in the case of a Euro-Dollar Borrowing, the duration of the
initial Interest Period
applicable thereto, subject to the provisions of the definition of
Interest Period.
Section 2.03. Bid Rate Borrowings. (a) The Bid Rate Option. In
addition to Committed Borrowings pursuant to Section 2.01, any Borrower
may, as set forth in this Section, request the Banks to make offers to
make Bid Rate Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this
Section.
(b) Bid Rate Quote Request. When a Borrower wishes to request
offers to make Bid Rate Loans under this Section, it shall transmit to
the Administrative Agent by telex or facsimile transmission a Bid Rate
Quote Request substantially in the form of Exhibit B hereto so as to be
received no later than 11:00 A.M. (New York City time) on (x) the fifth
Euro-Dollar Business Day prior to the date of Borrowing proposed
therein, in the case of a Bid Rate (Indexed) Auction or (y) the
Domestic Business Day next preceding the date of Borrowing proposed
therein, in the case of a Bid Rate (General) Auction (or, in either
case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks
not later than the date of the Bid Rate Quote Request for the first Bid
Rate (Indexed) Auction or Bid Rate (General) Auction for which such
change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day,
(ii) the aggregate amount of such Borrowing, which shall be
$10,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Bid Rate Quotes requested are to set forth a
Bid Rate (Indexed) Margin or a Bid Rate (General). The Borrower may
request offers to make Bid Rate Loans for more than one Interest Period
in a single Bid Rate Quote Request.
<PAGE>
(c) Invitation for Bid Rate Quotes. Promptly upon receipt of a
Bid Rate Quote Request, the Administrative Agent shall send to the
Banks by telex or facsimile transmission an Invitation for Bid Rate
Quotes substantially in the form of Exhibit C hereto, which shall
constitute an invitation by the Borrower to each Bank to submit Bid
Rate Quotes offering to make the Bid Rate Loans to which such Bid Rate
Quote Request relates in accordance with this Section.
(d) Submission and Contents of Bid Rate Quotes. (i) Each Bank
may submit a Bid Rate Quote containing an offer or offers to make Bid
Rate Loans in response to any Invitation for Bid Rate Quotes. Each Bid
Rate Quote must comply with the requirements of this subsection (d)
and must be submitted to the Administrative Agent by telex or facsimile
transmission at its offices specified in or pursuant to Section 11.01
not later than (x) 2:00 P.M. (New York City time) on the fourth
Euro-Dollar Business Day prior to the proposed date of Borrowing, in
the case of a Bid Rate (Indexed) Auction or (y) 10:00 A.M. (New York
City time) on the proposed date of Borrowing, in the case of a Bid Rate
(General) Auction (or, in either case, such other time or date as the
Borrower and the Administrative Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Bid
Rate Quote Request for the first Bid Rate (Indexed) Auction or Bid Rate
(General) Auction for which such change is to be effective);
provided that Bid Rate Quotes submitted by the Administrative Agent (or
any affiliate of the Administrative Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the Administrative
Agent or such affiliate notifies the Borrower of the terms of the offer
or offers contained therein not later than (x) 1:00 P.M. (New York City
time) on the fourth Euro-Dollar Business Day prior to the proposed date
of Borrowing, in the case of a Bid Rate (Indexed) Auction or (y) 9:45
A.M. (New York City time) on the proposed date of Borrowing, in the
case of an Bid Rate (General) Auctions. Subject to Articles 3 and 6,
any Bid Rate Quote so made shall be irrevocable except with the written
consent of the Administrative Agent given on the instructions of the
Borrower.
(ii) Each Bid Rate Quote shall be in substantially the form of
Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Bid Rate Loan for which each
such offer is being made, which principal amount (w) may be greater
than or less than the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger multiple of $1,000,000 and (y) may not exceed
the principal amount of Bid Rate Loans for each Interest Period for
which offers were requested and (z) may be subject to an aggregate
limitation as to the principal amount of Bid Rate Loans for which
offers being made by such quoting Bank may be accepted,
<PAGE>
(C) in the case of a Bid Rate (Indexed) Auction, the margin
above or below the applicable London Interbank Offered Rate (the "Bid
Rate (Indexed) Margin") offered for each such Bid Rate Loan, expressed
as a percentage (specified to the nearest 1/10,000th of 1%) to be
added to or subtracted from such base rate,
(D) in the case of a Bid Rate (General) Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the
"Bid Rate (General)") offered for each such Bid Rate Loan, and
(E) the identity of the quoting Bank. A Bid Rate Quote may set
forth up to five separate offers by the quoting Bank with respect to
each Interest Period specified in the related Invitation for Bid Rate
Quotes.
(iii) Any Bid Rate Quote shall be disregarded if:
(A) it is not substantially in conformity with Exhibit D hereto
or does not specify all of the information required by subsection
2.03(d)(ii);
(B) it contains qualifying, conditional or similar language
beyond that contemplated by Exhibit D (other than a qualification or
condition as to minimum amount);
(C) it proposes terms other than or in addition to those set
forth in the applicable
Invitation for Bid Rate Quotes; or
(D) it arrives after the time set forth in subsection
2.03(d)(i).
(e) Notice to Borrower. The Administrative Agent shall promptly
but in no event later than (i) 5:00 P.M. (New York City time) on the
fourth Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a Bid Rate (Indexed) Auction or (ii) 10:30
A.M. (New York City time) on the proposed date of Borrowing, in the
case of a Bid Rate (General) Auction (or, in either case such other
time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the
date of the Bid Rate Quote Request for the first Bid Rate (Indexed)
Auction or Bid Rate (General) Auction for which such change is to be
effective) notify the Borrower of the terms (x) of any Bid Rate Quote
submitted by a Bank that is in accordance with subsection (d) and (y)
of any Bid Rate Quote that amends, modifies or is otherwise
inconsistent with a previous Bid Rate Quote submitted by such Bank with
<PAGE>
respect to the same Bid Rate Quote Request. Any such subsequent Quote
shall be disregarded by the Administrative Agent unless such subsequent
Quote is submitted solely to correct a manifest error in such former
Quote. The Administrative Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of Loans for which offers have been
received for each Interest Period specified in the related Bid Rate
Quote Request, (B) the respective principal amounts and Bid Rate
(Indexed) Margins or Bid Rates (General), as the case may be, so
offered and (C) if applicable, limitations on the aggregate principal
amount of Bid Rate Loans for which offers in any single Bid Rate Quote
may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 11:00 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to
the proposed date of Borrowing, in the case of a Bid Rate (Indexed)
Auction or (y) the proposed date of Borrowing, in the case of an Bid
Rate (General) Auction (or, in either case, such other time or date as
the Borrower and the Administrative Agent shall have mutually agreed
and shall have notified to the Banks not later than the date of the Bid
Rate Quote Request for the first Bid Rate (Indexed) Auction or Bid Rate
(General) Auction for which such change is to be effective), the
Borrower shall notify the Administrative Agent of its acceptance or
non-acceptance of the offers so notified to it pursuant to subsection
(e). In the case of acceptance, such notice (a "Notice of Bid Rate
Borrowing") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any
Bid Rate Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Bid Rate Borrowing
may not exceed the applicable amount set forth in the related Bid Rate
Quote Request,
(ii) the principal amount of each Bid Rate Borrowing must be
$10,000,000 or a larger multiple of $1,000,000, and
(iii) acceptance of offers may only be made on the basis of
ascending Bid Rate (Indexed) Margin or Bid Rates (General), as the case
may be.
(g) Allocation by Administrative Agent. If offers are made by
two or more Banks with the same Bid Rate (Indexed) Margins or Bid Rates
(General), as the case may be, for a greater aggregate principal amount
than the amount in respect of which such offers are accepted for the
related Interest Period, the principal amount of Bid Rate Loans in
respect of which such offers are accepted shall be allocated by the
<PAGE>
Administrative Agent among such Banks as nearly as possible (in
multiples of $1,000,000, as the Administrative Agent may deem
appropriate) in proportion to the aggregate principal amounts of such
offers. Determinations by the Administrative Agent of the amounts of
Bid Rate Loans shall be conclusive in the absence of manifest error.
Section 2.04. Notice to Banks; Funding of Loans. (a) Upon
receipt of a Notice of Borrowing, the Administrative Agent shall
promptly notify each Bank of the contents thereof and of such Bank's
share (if any) of such Borrowing and such Notice of Borrowing shall
not thereafter be revocable by the Borrower.
(b) Not later than 1:00 P.M. (New York City time) on the date of
each Borrowing, each Bank participating therein shall (except as
provided in subsection (c) of this Section) make available its share of
such Borrowing, in Federal or other funds immediately available in New
York City, to the Administrative Agent at its address specified in or
pursuant to Section 11.01. Unless the Administrative Agent determines
that any applicable condition specified in Article 3 has not been
satisfied, the Administrative Agent will make the funds so received
from the Banks available to the Borrower at the Administrative Agent's
aforesaid address not later than 2:30 P.M. (New York City time) on the
date of such Borrowing.
(c) Unless the Administrative Agent shall have received notice
from a Bank prior to the time of any Borrowing that such Bank will not
make available to the Administrative Agent such Bank's share of such
Borrowing, the Administrative Agent may assume that such Bank has
made such share available to the Administrative Agent on the date of
such Borrowing in accordance with subsection (b) of this Section 2.04
and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If
and to the extent that such Bank shall not have so made such share
available to the Administrative Agent, such Bank and, if such Bank
shall not have made such payment within two Domestic Business Days of
demand therefor, the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower,
a rate per annum equal to the higher of the Federal Funds Rate and the
interest rate applicable thereto pursuant to Section 2.07 and (ii) in
the case of such Bank, the Federal Funds Rate. If such Bank shall
repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement.
<PAGE>
(d) The failure of any Bank to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Bank of its
obligation, if any, hereunder to make a Loan on the date of such
Borrowing, but no Bank shall be responsible for the failure of any
other Bank to make a Loan to be made by such other Bank.
Section 2.05. Registry; Notes. (a) The Administrative Agent
shall maintain a register (the "Register") on which it will record the
Commitment of each Bank, each Loan made by such Bank and each repayment
of any Loan made by such Bank. Any such recordation by the
Administrative Agent on the Register shall be presumptively correct,
absent manifest error. Failure to make any such recordation, or any
error in such recordation, shall not affect the Borrowers' obligations
hereunder.
(b) Each Borrower hereby agrees that, promptly upon the request
of any Bank at any time, such Borrower shall deliver to such Bank a
duly executed Note, in substantially the form of Exhibit A hereto,
payable to the order of such Bank and representing the obligation of
such Borrower to pay the unpaid principal amount of the Loans made to
such Borrower by such Bank, with interest as provided herein on the
unpaid principal amount from time to time outstanding.
(c) Each Bank shall record the date, amount and maturity of each
Loan made by it and the date and amount of each payment of principal
made by the Borrower with respect thereto, and each Bank receiving a
Note pursuant to this Section, if such Bank so elects in connection
with any transfer or enforcement of any Note, may endorse on the
schedule forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding;
provided that the failure of such Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrowers hereunder
or under the Notes. Such Bank is hereby irrevocably authorized by the
Borrowers so to endorse any Note and to attach to and make a part of
any Note a continuation of any such schedule as and when required.
Section 2.06. Maturity of Loans. (a) Each Committed Loan shall
mature, and the principal amount thereof shall be due and payable
(together with accrued and unpaid interest thereon), on the Termination
Date.
(b) Each Bid Rate Loan included in any Bid Rate Borrowing shall
mature, and the principal amount thereof shall be due and payable
(together with accrued and unpaid interest thereon), on the last day of
the Interest Period applicable to such Borrowing.
<PAGE>
Section 2.07. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from
the date such Loan is made until it becomes due, at a rate per annum
equal to the Base Rate for such day. Such interest shall be payable
quarterly in arrears on each Quarterly Payment Date, at maturity and,
with respect to the principal amount of any Base Rate Loan converted to
a Euro-Dollar Loan, on the date such Base Rate Loan is so converted.
Any overdue principal of or overdue interest on any Base Rate Loan
shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the Base Rate for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of the
Euro-Dollar Margin for such day plus the London Interbank Offered Rate
applicable to such Interest Period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest
Period is longer than three months, at intervals of three months after
the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next
higher 1/16 of 1%) of the respective rates per annum at which deposits
in dollars are offered to each of the Euro-Dollar Reference Banks in
the London interbank market at approximately 11:00 A.M. (London time)
two Euro-Dollar Business Days before the first day of such Interest
Period in an amount approximately equal to the principal amount of the
Loan of such Euro-Dollar Reference Bank to which such Interest Period
is to apply and for a period of time comparable to such Interest
Period. If any Euro-Dollar Reference Bank does not furnish a timely
quotation, the Administrative Agent shall determine the relevant
interest rate on the basis of the quotation furnished by the remaining
Euro-Dollar Reference Bank(s) or, if none of such quotations is
available on a timely basis, the provisions of Section 8.01 shall
apply.
(c) Any overdue principal of or overdue interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for each day
from and including the date payment thereof was due to but excluding
the date of actual payment, at a rate per annum equal to the sum of 2%
plus the higher of (i) the sum of the Euro-Dollar Margin for such day
plus the London Interbank Offered Rate applicable to such Loan at the
date such payment was due and (ii) the Base Rate for such
day.
<PAGE>
(d) Subject to Section 8.01(a), each Bid Rate (Indexed) Loan
shall bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal to
the sum of the London Interbank Offered Rate for such Interest Period
(determined in accordance with Section 2.07(b) as if each Euro-Dollar
Reference Bank were to participate in the related Bid Rate (Indexed)
Borrowing ratably in proportion to its Commitment) plus (or minus) the
Bid Rate (Indexed) Margin quoted by the Bank making such Loan in
accordance with Section 2.03. Each Bid Rate (General) Loan shall bear
interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Bid Rate
(General) quoted by the Bank making such Loan in accordance with
Section 2.03. Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day
thereof. Any overdue principal of or overdue interest on any Bid Rate
Loan shall bear interest, payable on demand, for each day until paid at
a rate per annum equal to the sum of 2% plus the Base Rate for such
day.
(e) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the participating Banks of each rate
of interest so determined, and its determination thereof shall be
presumptively correct in the absence of manifest error.
Section 2.08. Facility Fees. (a) The Company shall pay to the
Administrative Agent for the account of each Bank a facility fee at the
Facility Fee Rate (determined daily in accordance with the Pricing
Schedule). Such facility fee shall accrue (i) from and including the
earlier of the date hereof and the Effective Date to but excluding the
date of termination of the Commitments in their entirety, on the daily
aggregate amount of the Commitments (whether used or unused) and (ii)
from and including such date of termination to but excluding the date
the Loans shall be repaid in their entirety, on the daily average
aggregate outstanding principal amount of the Loans.
(b) Accrued fees under this Section shall be payable quarterly in
arrears on each Quarterly Payment Date and upon the date of termination
of the Commitments in their entirety (and, if later, the date the Loans
shall be repaid in their entirety).
<PAGE>
Section 2.09. Optional Termination or Reduction of Commitments.
The Company may, upon notice to the Administrative Agent not later than
11:00 A.M. (New York City time) on any Domestic Business Day, (i)
terminate the Commitments at any time, if no Loans are outstanding at
such time (after giving effect to any contemporaneous prepayment of the
Loans in accordance with Section 2.12) or (ii) ratably reduce from time
to time by an aggregate amount of $25,000,000 or any larger multiple of
$1,000,000 the aggregate amount of the Commitments in excess of the
aggregate outstanding principal amount of the Loans.
Section 2.10. Method of Electing Interest Rates. (a) The Loans
included in each Committed Borrowing shall bear interest initially at
the type of rate specified by the Borrower in the applicable Notice of
Committed Borrowing. Thereafter, the Borrower may from time to time
elect to change or continue the type of interest rate borne by each
Group of Loans (subject in each case to the provisions of Article 8 and
the last sentence of this subsection (a)), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business
Day; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or elect to continue such
Loans as Euro-Dollar Loans for an additional Interest Period, subject
to Section 2.14 in the case of any such conversion or continuation
effective on any day other than the last day of the then current
Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice in
substantially the form of Exhibit L (a "Notice of Interest Rate
Election") to the Administrative Agent not later than 11:00 A.M. (New
York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective.
A Notice of Interest Rate Election may, if it so specifies,
apply to only a portion of the aggregate principal amount of the
relevant Group of Loans, provided that (i) such portion is allocated
ratably among the Loans comprising such Group and (ii) the portion to
which such notice applies, and the remaining portion to which it does
not apply, are each $10,000,000 or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the
applicable clause of subsection 2.10(a) above;
<PAGE>
(iii) if the Loans comprising such Group are to be converted,
the new type of Loans and, if the Loans being converted are to be Fixed
Rate Loans, the duration of the next succeeding Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for
an additional Interest Period, the duration of such additional Interest
Period.
Each Interest Period specified in a Notice of Interest Rate
Election shall comply with the provisions of the definition of the term
"Interest Period".
(c) Promptly after receiving a Notice of Interest Rate Election
from the Borrower pursuant to subsection 2.10(a) above, the
Administrative Agent shall notify each Bank of the contents thereof and
such notice shall not thereafter be revocable by the Borrower. If no
Notice of Interest Rate Election is timely received prior to the end of
an Interest Period for any Group of Loans, the Borrower shall be deemed
to have elected that such Group of Loans be converted to Base Rate
Loans as of the last day of such Interest Period.
(d) An election by the Borrower to change or continue the rate of
interest applicable to any Group of Loans pursuant to this Section
shall not constitute a "Borrowing" subject to the provisions of Section
3.02.
Section 2.11. Scheduled Termination of Commitments. The
Commitments shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued and unpaid interest thereon) shall
be due and payable on such date.
Section 2.12. Optional Prepayments. (a) Subject in the case of
any Fixed Rate Borrowing to Section 2.14, the Borrower may (i) upon
notice to the Administrative Agent not later than 11:00 A.M. (New York
City time) on any Domestic Business Day prepay on such Domestic
Business Day any Group of Base Rate Loans or any Bid Rate Borrowing
bearing interest at the Base Rate pursuant to Section 8.01(a) and (ii)
upon at least three Euro-Dollar Business Days' notice to the
Administrative Agent not later than 11:00 A.M. (New York City time)
prepay any Group of Euro-Dollar Loans, in each case in whole at any
time, or from time to time in part in amounts aggregating $10,000,000
or any larger multiple of $1,000,000, by paying the principal amount to
be prepaid together with accrued interest thereon to the date of
prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Banks included in such Group or
Borrowing.
<PAGE>
(b) Except as provided in subsection 2.12(a), the Borrower may
not prepay all or any portion of the principal amount of any Bid Rate
Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Administrative Agent shall promptly notify each Bank of
the contents thereof and of such Bank's share (if any) of such
prepayment and such notice shall not thereafter be revocable by the
Borrower.
Section 2.13. General Provisions as to Payments. (a) Each
payment of principal of, and interest on, the Loans and of fees
hereunder shall be made not later than 2:30 P.M. (New York City time)
on the date when due, in Federal or other funds immediately
available in New York City, to the Administrative Agent at its address
referred to in Section 11.01. The Administrative Agent will promptly
distribute to each Bank its ratable share of each such payment
received by the Administrative Agent for the account of the Banks.
Whenever any payment of principal of, or interest on, the Base Rate
Loans or of fees shall be due on a day which is not a Domestic Business
Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal
of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case
the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. Whenever any payment of principal of, or interest on,
the Bid Rate Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day. If the date for any payment
of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice
from a Borrower prior to the date on which any payment is due from such
Borrower to the Banks hereunder that such Borrower will not make such
payment in full, the Administrative Agent may assume that such
Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent
that such Borrower shall not have so made such payment, each Bank
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day
from the date such amount is distributed to such Bank until the date
such Bank repays such amount to the Administrative Agent, at the
Federal Funds Rate.
<PAGE>
Section 2.14. Funding Losses. If a Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Euro-Dollar Loan
is converted to a Base Rate Loan or continued as a Euro-Dollar Loan for
a new Interest Period (pursuant to Article 2, 6, 8 or otherwise) on any
day other than the last day of an Interest Period applicable thereto,
or if a Borrower fails to borrow, prepay, convert or continue any Fixed
Rate Loans after notice has been given to any Bank in accordance with
Section 2.04(a), 2.10(c) or 2.12(c) (other than by reason of a default
by the Bank demanding payment hereunder), such Borrower shall
reimburse each Bank within 15 days after written demand from such Bank
for any resulting loss or reasonable expense incurred by it (or by an
existing or prospective Participant in the related Loan, but not to
exceed the loss and expense which would have been incurred by such Bank
had no participations been granted by it), including (without
limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of profit or margin for
the period after any such payment or conversion or failure to borrow,
prepay, convert or continue, provided that such Bank shall have
delivered to such Borrower a certificate setting forth in reasonable
detail the calculation of the amount of such loss or expense, which
certificate shall be presumptively correct in the absence of manifest
error.
Section 2.15. Computation of Interest and Fees. Interest based
on the Prime Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of
days elapsed (including the first day but excluding the last
day). All other interest and all fees shall be computed on the basis
of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day).
Section 2.16. Regulation D Compensation. In the event that a
Bank is required to maintain reserves of the type contemplated by the
definition of "Euro-Dollar Reserve Percentage", such Bank may require
the Borrower to pay, contemporaneously with each payment of interest on
the Euro-Dollar Loans, additional interest on the related Euro-Dollar
Loan of such Bank at a rate per annum determined by such Bank up to but
not exceeding the excess of (i) (A) the applicable London Interbank
Offered Rate divided by (B) one minus the Euro-Dollar Reserve
Percentage over (ii) the applicable London Interbank Offered Rate.
Any Bank wishing to require payment of such additional interest (x)
shall so notify the Borrower and the Administrative Agent, in which
case such additional interest on the Euro-Dollar Loans of such Bank
shall be payable to such Bank at the place indicated in such notice
with respect to each Interest Period commencing at least three
Euro-Dollar Business Days after the giving of such notice and (y) shall
<PAGE>
furnish to the Borrower at least three Euro-Dollar Business Days prior
to each date on which interest is payable on the Euro-Dollar Loans of
such Borrower an officer's certificate setting forth the amount to
which such Bank is then entitled under this Section 2.16 (which shall
be consistent with such Bank's good faith estimate of the level at
which the related reserves are maintained by it). Each such
notification shall be accompanied by such information as the Borrower
may reasonably request.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed
by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member
bank of the Federal Reserve System in New York City with deposits
exceeding five billion dollars in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Euro-Dollar Loans
is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any Bank to
United States residents).
Section 2.17. Foreign Costs. (a) If the cost to any Bank of
making or maintaining any Loan is increased, or the amount of any sum
received or receivable by any Bank (or its Applicable Lending Office)
is reduced by an amount deemed by such Bank to be material, by reason
of the fact that the Borrower of such Loan is organized in, or conducts
business in, a jurisdiction outside the United States of America, such
Borrower shall indemnify such Bank for such increased cost or reduction
within 15 days after demand by such Bank (with a copy to the
Administrative Agent). A certificate of such Bank claiming
compensation under this subsection (a) and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the
absence of manifest error.
(b) Each Bank will promptly notify the Company and the
Administrative Agent of any event of which it has knowledge that will
entitle such Bank to additional compensation pursuant to subsection (a)
and will designate a different Applicable Lending Office if, in the
judgment of such Bank, such designation will avoid the need for, or
reduce the amount of, such compensation and will not be otherwise
disadvantageous to such Bank.
<PAGE>
ARTICLE 3
Conditions
Section 3.01. Effectiveness. This Agreement shall become
effective on the date that each of the following conditions shall have
been satisfied (or waived in accordance with Section 11.05):
(a) receipt by the Administrative Agent of counterparts hereof
signed by each of the parties hereto (or, in the case of any party as
to which an executed counterpart shall not have been received, receipt
by the Administrative Agent in form satisfactory to it of telegraphic,
telecopy, telex or other written confirmation from such party of
execution of a counterpart hereof by such party);
(b) receipt by the Administrative Agent of an opinion of (i)
Kirkland & Ellis, special counsel for the Company, substantially in the
form of Exhibit E-1 hereto and (ii) Phillip Gordon, General Counsel of
the Company, substantially in the form of Exhibit E-2 hereto, and in
each case covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(c) receipt by the Administrative Agent of an opinion of Davis
Polk & Wardwell, special counsel for the Administrative Agent,
substantially in the form of Exhibit F hereto and covering such
additional matters relating to the transactions contemplated hereby as
the Required Banks may reasonably request; and
(d) receipt by the Administrative Agent of all documents it may
have reasonably requested prior to the date hereof relating to the
existence of the Company, the corporate authority for and the validity
of this Agreement and the Notes, and any other matters relevant hereto,
all in form and substance satisfactory to the Administrative Agent;
provided that this Agreement shall not become effective or be binding
on any party hereto unless all of the foregoing conditions are
satisfied not later than December 21, 1998; and provided further that
the provisions of Sections 2.08, 2.09, 2.14 and 11.03 shall become
effective upon satisfaction of the condition specified in clause
3.01(a). The Administrative Agent shall promptly notify the Company
and the Banks of the Effective Date, and such notice shall be
conclusive and binding on all parties hereto.
Section 3.02. Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of
the following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing
as required by Section 2.02 or 2.03, the case may be;
<PAGE>
(b) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
(c) the fact that, immediately after such Borrowing, no Default
shall have occurred and be continuing; and
(d) the fact that the representations and warranties (other than
(i) the representation and warranty set forth in Section 4.04(c) in the
case of a Borrowing which does not result in an increase in the
aggregate outstanding principal amount of the Loans, (ii) the
representations and warranties set forth in Sections 4.04(a) and
4.04(b) and (iii) the representations and warranties set forth in
Section 4.12 in the case of a Borrowing after December 31, 2000) of the
Borrower and, if the Borrower is not the Company, of the Company
contained in this Agreement shall be true on and as of the date of such
Borrowing.
Each Borrowing hereunder shall be deemed to be a representation
and warranty by the Borrower (and, if the Company is not the Borrower,
by the Company) on the date of such Borrowing as to the facts specified
in clauses (b), (c) and (d) of this Section.
Section 3.03. First Borrowing by Each Eligible Subsidiary. The
obligation of each Bank to make a Loan on the occasion of the first
Borrowing by each Eligible Subsidiary is subject to the satisfaction of
the following further conditions:
(a) receipt by the Administrative Agent of an opinion or
opinions of counsel for such Eligible Subsidiary reasonably acceptable
to the Administrative Agent (which, in the case of an Eligible
Subsidiary organized under the laws of the United States or a State
thereof may be an employee of the Company) and addressed to the
Administrative Agent and the Banks, substantially to the effect of
Exhibit J hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably
request; and
(b) receipt by the Administrative Agent of all documents which
it may reasonably request relating to the existence of such Eligible
Subsidiary, the authority for and the validity of the Election to
Participate of such Eligible Subsidiary, this Agreement and the Notes
of such Eligible Subsidiary, and any other matters relevant thereto,
all in form and substance reasonably satisfactory to the Administrative
Agent.
<PAGE>
ARTICLE 4
Representations and Warranties
The Company represents and warrants that:
Section 4.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing
under the laws of Delaware, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted and is duly qualified to do
business as a foreign corporation in each jurisdiction where such
qualification is required, except where the failure so to qualify could
not reasonably be expected to have a material Adverse Effect.
Section 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Company
of this Agreement and its Notes are within the Company's corporate
powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental
body, agency or official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Company or of any
agreement, judgment, injunction, order, decree or other instrument
binding upon the Company or any of its Subsidiaries or result in the
creation or imposition of any Lien on any asset of the Company or any
of its Subsidiaries.
Section 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Company and each of its Notes, if and when
executed and delivered in accordance with this Agreement, will
constitute a valid and binding obligation of the Company, in
each case enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
Section 4.04. Financial Information. (a) The consolidated
balance sheet of the Company and its Consolidated Subsidiaries as of
December 31, 1997 and the related consolidated statements of earnings,
cash flows and changes in stockholders' equity for the fiscal
year then ended, reported on by Ernst & Young LLP, copies of which are
included in the Company's Form 10-K for the period ended December 31,
1997 and have been delivered to each of the Banks, fairly present in
all material respects, in conformity with generally accepted
accounting principles, the consolidated financial position of the
Company and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
fiscal year.
<PAGE>
(b) The financial statements presented in the Company's Form 10-Q
for the period ended September 30, 1998, which the Company has filed
with the Securities and Exchange Commission, copies of which have been
delivered to each of the Banks, fairly present in all material respects
on a basis consistent with the financial statements referred to in
Section 4.04(a), the consolidated financial position of the Company and
its Consolidated Subsidiaries as of such date and their consolidated
results of operations and cash flows for such nine-month period
(subject to normal year-end audit adjustments and the absence of full
footnotes).
(c) Since September 30, 1998, there has been no material adverse
change in the business, financial position or results of operations of
the Company and its Consolidated Subsidiaries, considered as a whole.
Section 4.05. Litigation. Except as disclosed in the Company's
annual report on Form 10-K for the year ended December 31, 1997, each
registration statement (other than a registration statement on Form S-8
(or its equivalent)) and each report on Form 10-K, 10-Q and 8-K (or
their equivalents) which the Company shall have filed with the
Securities and Exchange Commission at any time thereafter, there is no
action, suit or proceeding pending against, or to the knowledge of the
Company, threatened against or affecting, the Company or any of its
Subsidiaries before any court or arbitrator or any governmental body,
agency or official which could reasonably be expected to have a
Material Adverse Effect or which in any manner draws into question the
validity of this Agreement or any Note.
Section 4.06. Compliance with Laws. (a) The Company and each
Subsidiary is in compliance in all material respects with all
applicable laws, ordinances, rules, regulations and requirements of
governmental authorities except where (i) non-compliance could
not reasonably be expected to have a Material Adverse Effect or (ii)
the necessity of compliance therewith is contested in good faith by
appropriate proceedings.
(b) Each member of the ERISA Group has fulfilled its obligations
under the minimum funding standards of ERISA and the Internal Revenue
Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the
ERISA Group has (i) sought a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code in respect of any Plan,
(ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made
any amendment to any Plan or Benefit Arrangement, which has resulted or
<PAGE>
could result in the imposition of a Lien or the posting of a bond or
other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability
to the PBGC for premiums under Section 4007 of ERISA.
Section 4.07. Environmental Matters. In the ordinary course of
its business, the Company conducts a systematic review of the effects
and reasonably ascertainable associated liabilities and costs of
Environmental Laws on the business, operations and properties
of the Company and its Subsidiaries. The associated liabilities and
costs include, without limitation: any capital or operating
expenditures required for clean-up or closure of properties presently
or previously owned; any capital or operating expenditures required to
achieve or maintain compliance with Environmental Laws; any constraints
on operating activities related to achieving or maintaining compliance
with Environmental Laws, including any periodic or permanent shutdown
of any facility or reduction in the level or change in the nature of
operations conducted thereat; any costs or liabilities in connection
with off-site disposal of wastes or hazardous substances; and any
actual or potential liabilities to third parties, including employees,
arising under Environmental Laws, and any related costs and expenses.
On the basis of this review, the Company has reasonably concluded that
such associated liabilities and costs, including the costs of
compliance with Environmental Laws, could not reasonably be expected to
have a Material Adverse Effect.
Section 4.08. Taxes. The Company and its Subsidiaries have filed
all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes
due pursuant to such returns or pursuant to any assessment received by
the Company or any Subsidiary except (i) where nonpayment could not
reasonably be expected to have a Material Adverse Effect or (ii) where
the same are contested in good faith by appropriate proceedings. The
charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of taxes or other governmental charges are, in
the opinion of the Company, adequate.
Section 4.09. Subsidiaries. Each of the Company's corporate
Subsidiaries is a corporation validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted and is duly qualified to do business as a
foreign corporation in each jurisdiction where such qualification is
required, except where the failure so to qualify could not reasonably
be expected to have Material Adverse Effect.
<PAGE>
Section 4.10. Regulatory Restrictions on Borrowing. The Company
is not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or
otherwise subject to any regulatory scheme which restricts its ability
to incur debt.
Section 4.11. Full Disclosure. Neither the Company's Form 10-K
for the year ended December 31, 1997, as of the date of filing of such
Form 10-K, nor any registration statement (other than a registration
statement on Form S-8 (or its equivalent)) or report on Form
10-K, 10-Q and 8-K (or their equivalents) which the Company shall have
filed with the Securities and Exchange Commission as at the time of
filing of such registration statement or report, as applicable,
contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make any statements contained
therein, in the light of the circumstances under which they were made,
not misleading; provided that to the extent any such document
contains forecasts and/or projections, it is understood and agreed that
uncertainty is inherent in any forecasts or projections and that no
assurances can be given by the Company of the future achievement of
such performance.
Section 4.12. Year 2000. Any reprogramming required to permit
the proper functioning, in and following year 2000, of (a) the
Company's computer systems and (b) equipment containing embedded
microchips (including systems and equipment supplied by others
or with which the Company's systems interface) and the testing of all
such systems and equipment, as so reprogrammed, will be completed in a
timely fashion. The cost to the Company of such reprogramming and
testing and of the reasonably foreseeable consequences of year 2000 to
the Company (including, without limitation, reprogramming errors and
the failure of others' systems or equipment) will not result in a
Default or a Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the
Company and its Subsidiaries are and, with ordinary course upgrading
and maintenance, will continue for the term of this Agreement, to be
sufficient to permit the Company to conduct its business without
Material Adverse Effect.
ARTICLE 5
Covenants
The Company and, where stated, each other Borrower agree that, so
long as any Bank has any Commitment hereunder or any amount payable
hereunder remains unpaid: Section 5.01. Information. The Company will
deliver to each of the Banks:
<PAGE>
(a) as soon as available and in any event within 95 days after
the end of each fiscal year of the Company, a consolidated balance
sheet of the Company and its Consolidated Subsidiaries as of the end of
such fiscal year and the related consolidated statements of earnings,
cash flows, and changes in stockholders' equity for such fiscal year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on in a manner consistent with the
requirements of the Securities and Exchange Commission and audited by
Ernst & Young LLP or other independent public accountants of nationally
recognized standing;
(b) as soon as available and in any event within 50 days after
the end of each of the first three quarters of each fiscal year of the
Company, an unaudited consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of the end of such quarter and the related
unaudited consolidated statements of earnings and cash flows for such
quarter and for the portion of the Company's fiscal year ended at the
end of such quarter, setting forth in each case in comparative
form the figures for the corresponding quarter and the corresponding
portion of the Company's previous fiscal year, all certified (subject
to normal year-end adjustments) as to fairness of presentation and
preparation based on financial accounting principles consistent with
generally accepted accounting principles by an Approved Officer of the
Company;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
an Approved Officer of the Company (i) setting forth in reasonable
detail the calculations required to establish whether the Company was
in compliance with the requirements of Sections 5.10 and 5.12 on the
date of such financial statements and (ii) stating whether any Default
exists on the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the Company is
taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
that nothing has come to their attention to cause them to believe that
any Default arising from the Company's failure to comply with its
obligations under Sections 5.10 and 5.12 existed on the date of such
statements (it being understood that such accountants shall not
thereby be required to perform any procedures not otherwise required
under generally accepted auditing standards) and (ii) confirming the
calculations set forth in the officer's certificate delivered
simultaneously therewith pursuant to clause (c) above;
<PAGE>
(e) within five days after any officer of the Company obtains
knowledge of any Default, if such Default is then continuing, a
certificate of an Approved Officer of the Company setting
forth the details thereof and the action which the Company is taking or
proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and
proxy statements so mailed;
(g) promptly after the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports
(other than the exhibits thereto) on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Company shall have filed with the Securities and
Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability
under Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement or
makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of
a bond or other security, a certificate of the chief financial officer
or the chief accounting officer of the Company setting forth details as
to such occurrence and action, if any, which the Company or applicable
member of the ERISA Group is required or proposes to take; and
<PAGE>
(i) from time to time such additional information regarding the
financial position or business of the Company and its Subsidiaries as
the Administrative Agent, at the request of any Bank, may reasonably
request.
Section 5.02. Payment of Obligations. Each Borrower will pay
and discharge, and will cause each of its Subsidiaries to pay and
discharge, at or before maturity, all their respective material
obligations and liabilities (including, without limitation, tax
liabilities and claims of materialmen, warehousemen and the like which
if unpaid might by law give rise to a Lien), except where the same may
be contested in good faith by appropriate proceedings, and
will maintain, and will cause each of its Subsidiaries to maintain, in
accordance with generally accepted accounting principles, appropriate
reserves for the accrual of any of the same.
Section 5.03. Maintenance of Property; Insurance. (a) Each
Borrower will keep, and will cause each of its Subsidiaries to keep,
all material property useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted.
(b) Each Borrower will, and will cause each of its Subsidiaries
to, maintain (either in the name of the Company or in such Borrower's
or Subsidiary's own name) with financially sound and responsible
insurance companies, insurance on all its respective properties in at
least such amounts, against at least such risks and with such risk
retention as are usually maintained, insured against or retained, as
the case may be, in the same general area by companies of established
repute engaged in the same or a similar business; provided that the
Borrowers and their Subsidiaries may self-insure to the same extent as
other companies of established repute engaged in the same or a similar
business in the same general area in which such Borrower or such
Subsidiary operates and to the extent consistent with prudent business
practice. Each Borrower will furnish to the Banks, upon request from
the Administrative Agent, information presented in reasonable detail as
to the insurance so carried.
Section 5.04. Conduct of Business and Maintenance of Existence.
Each Borrower and its Subsidiaries taken as a whole will continue to
engage in business of the same general type as now conducted by such
Borrower and its Subsidiaries and any ancillary or related lines of
business, and each Borrower will preserve, renew and keep in full force
and effect, and will cause each of its Subsidiaries to preserve, renew
and keep in full force and effect, its respective legal existence and
its respective rights, privileges and franchises necessary or desirable
<PAGE>
in the normal conduct of business; provided that nothing in this
Section shall prohibit (i) the consolidation or merger of a Subsidiary
(other than an Eligible Subsidiary with obligations with respect to
Loans outstanding hereunder) with or into another Person, (ii) the
consolidation or merger of an Eligible Subsidiary with or into the
Company or another Eligible Subsidiary or (iii) the termination of the
legal existence of any Subsidiary (other than an Eligible Subsidiary
with obligations with respect to Loans outstanding hereunder) if, in
the case of clauses (i), (ii) and (iii), such consolidation, merger or
termination is not materially disadvantageous to the Banks; and
provided further that nothing in this Section shall prohibit any sale
or other disposition of assets permitted under Section 5.07.
Section 5.05. Compliance with Laws. Each Borrower will comply,
and cause each of its Subsidiaries to comply, in all material respects
with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without
limitation, Environmental Laws and ERISA and the rules and regulations
thereunder) except where (i) the necessity of compliance therewith is
contested in good faith by appropriate proceedings or (ii) the failure
to comply could not reasonably be expected to have a Material
Adverse Effect.
Section 5.06. Inspection of Property, Books and Records. Each
Borrower will keep, and will cause each of its Subsidiaries to keep,
proper books of record and account in which full, true and correct
entries shall be made of all dealings and transactions in relation to
its business and activities; and will permit, and will cause each of
its Subsidiaries to permit, representatives of any Bank at such Bank's
expense to visit and inspect any of its respective properties, to
examine and make abstracts from any of its respective books and records
and to discuss its respective affairs, finances and accounts with its
respective officers, employees and independent public accountants, all
at such reasonable times as may be desired.
Section 5.07. Mergers and Sales of Assets. (a) The Company will
not consolidate or merge with or into any other Person; provided that
the Company may merge with another Person if (x) the Company is the
corporation surviving such merger and (y) after giving effect to such
merger, no Default shall have occurred and be continuing.
(b) The Company will not sell, lease or otherwise transfer,
directly or indirectly, assets (exclusive of assets transferred in the
ordinary course of business) if after giving effect to such
transfer the aggregate book value of assets so transferred subsequent
to the date of this Agreement would constitute Substantial Assets as of
<PAGE>
the day preceding the date of such transfer other than (i) sales of
accounts receivable to IMC-Agrico Receivables Company L.L.C. or any
other similar bankruptcy-remote Subsidiary of the Company or any of its
Subsidiaries established for the purpose of engaging in transactions
related to accounts receivable, (ii) the sale of substantially all of
the assets comprising the IMC AgriBusiness business unit of the
Company, (iii) the sale of any equity interest in McMoRan Oil & Gas
Co., a Delaware corporation, or the sale or transfer of any right to
receive revenues from the MOXY-FRP Exploration Program undertaken
by McMoRan Oil & Gas Co., a Delaware corporation, (iv) the sale of
assets acquired pursuant to an Acquisition that are unrelated to the
business of the same general type as now conducted by the Company and
its Subsidiaries, and (v) the sale of assets acquired in or as a direct
result of the Harris Chemical Acquisition.
Section 5.08. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrowers for general
corporate purposes, including without limitation the refinancing of
Acquisitions. None of such proceeds will be used in violation of
Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
Section 5.09. Negative Pledge. Neither any Borrower nor any
Subsidiary of any Borrower will create, assume or suffer to exist any
Lien on any asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal or
face amount not exceeding $135,000,000;
(b) any Lien existing on any asset of any Person at the time
such Person becomes a Subsidiary of a Borrower and not created in
contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring or
constructing such asset, provided that such Lien attaches to such asset
concurrently with or within 90 days after the acquisition or completion
of construction thereof;
(d) any Lien on any asset of any Person existing at the time
such Person is merged or consolidated with or into a Borrower or a
Subsidiary of a Borrower and not created in contemplation of such
event;
<PAGE>
(e) any Lien existing on any asset prior to the acquisition
thereof by a Borrower or a Subsidiary of a Borrower and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that the proceeds of such
Debt are used solely for the foregoing purpose and to pay financing
costs and such Debt is not secured by any additional assets;
(g) Liens arising in the ordinary course of its business which
(i) do not secure Debt or Derivatives Obligations, (ii) do not secure
any obligation in an amount exceeding $100,000,000 and (iii) do not in
the aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its business;
(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed
$10,000,000; and
(i) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal or face amount,
together with all other Debt secured by Liens permitted under this
Section 5.09(i), not to exceed an amount equal to 10% of Consolidated
Net Worth (calculated as of the last day of the fiscal quarter most
recently ended on or prior to the date of the most recent incurrence of
such Debt).
Section 5.10. Debt of Subsidiaries. Total Debt of all
Subsidiaries (excluding Debt (i) of a Subsidiary owing to the Company,
(ii) of a Subsidiary owing to a Substantially-Owned Consolidated
Subsidiary, (iii) of an Eligible Subsidiary under this Agreement, (iv)
of PLP in an aggregate principal amount not exceeding $300,000,000
outstanding on December 15, 1997 (but not any refinancing thereof), (v)
of Harris Chemical North America, Inc. and its Subsidiaries arising out
of the Argus Utilities sale-leaseback transaction in an aggregate
principal amount not exceeding $71,000,000, or (vi) of IMC
Inorganic Chemicals Inc., formerly known as Harris Chemical Group Inc.,
and its Subsidiaries in an aggregate principal amount not exceeding UK
50,000,000) will not at any date exceed 25% of Consolidated Net Worth
(calculated as of the last day of the fiscal quarter most recently
ended on or prior to such date). For purposes of this Section any
preferred stock of a Consolidated Subsidiary (other than the Series E
Preferred Stock) held by a Person other than the Company or a
Substantially-Owned Consolidated Subsidiary shall be included, at the
higher of its voluntary or involuntary liquidation value, in the "Debt"
of such Consolidated Subsidiary.
<PAGE>
Section 5.11. Transactions with Affiliates. No Borrower will,
nor will it permit any of its Subsidiaries to, directly or indirectly,
pay any funds to or for the account of, make any investment (whether by
acquisition of stock or indebtedness, by loan, advance, transfer
of property, guarantee or other agreement to pay, purchase or service,
directly or indirectly, any Debt, or otherwise) in, lease, sell,
transfer or otherwise dispose of any assets, tangible or intangible,
to, or participate in, or effect, any transaction with, any Affiliate
except: (i) transactions on an arms-length basis on terms at least as
favorable to such Borrower or such Subsidiary as could have been
obtained from a third party who was not an Affiliate, (ii)
marketing services provided by IMC Global Operations Inc. to Agrico,
(iii) employee leasing services agreements between IMC Global
Operations Inc. and Agrico, (iv) transactions between Agrico and the
Rainbow and FarMarkets business units of the Company, (v) transactions
between Agrico and the IMC Kalium business unit of the Company, (vi)
loans from the Company or a Subsidiary to the Company or a Subsidiary,
(vii) the declaration and payment of any lawful dividend and
(viii) transactions between Vigiron Partnership, a Delaware general
partnership, and the IMC AgriBusiness business unit of the Company.
Section 5.12. Leverage Ratio. The Leverage Ratio will not at any
date exceed 3.75 to 1.00. For this purpose:
"Consolidated Adjusted Debt" means at any date the sum of (i) the
Debt of the Company and its Consolidated Subsidiaries plus (ii) the
excess (if any) of (A) the aggregate unrecovered principal
investment of transferees of accounts receivable from the Company or a
Consolidated Subsidiary in transactions accounted for as sales under
generally accepted accounting principles over (B) $100,000,000, in each
case determined on a consolidated basis as of such date.
"Consolidated EBITDA" means, for any period, the consolidated net
income of the Company and its Consolidated Subsidiaries for such period
before (i) income taxes, (ii) interest expense, (iii) depreciation and
amortization, (iv) minority interest, (v) extraordinary losses or
gains, (vi) discontinued operations and (vii) the cumulative effect of
changes in accounting principles. Consolidated EBITDA for each
four-quarter period will be adjusted on a pro-forma basis to reflect
any Acquisition closed during such period as if such Acquisition had
been closed on the first day of such period.
<PAGE>
"Leverage Ratio" means at any date the ratio of Consolidated
Adjusted Debt calculated as of such date to Consolidated EBITDA
calculated for the period of four consecutive fiscal quarters most
recently ended on or prior to such date. Calculations of the Leverage
Ratio shall (i) exclude the pretax nonrecurring charges not in excess
of $325,000,000 incurred by the Company in, and reflected in the
Company's consolidated statement of income for, the fiscal year ended
December 31, 1998 and (ii) disregard classification of the Company's
Agribusiness unit as a discontinued operation.
ARTICLE 6
Defaults
Section 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) any Borrower shall fail to pay when due any principal of any
Loan or shall fail to pay, within five Domestic Business Days of the
due date thereof, any interest, fees or any other amount payable
hereunder;
(b) any Borrower shall fail to observe or perform any covenant
contained in Sections 5.07 to 5.12, inclusive;
(c) any Borrower shall fail to observe or perform any covenant
or agreement contained in this Agreement (other than those covered by
clause (a) or (b) above) for 30 days after notice thereof has been
given to the Company by the Administrative Agent at the request of any
Bank;
(d) any representation, warranty, certification or statement
made by any Borrower in this Agreement or in any certificate,
financial statement or other document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect
when made (or deemed made);
(e) the Company or any Subsidiary shall fail to make any payment
in respect of Material Financial Obligations (other than the Loans)
when due or within any applicable grace period;
(f) any event or condition shall occur and shall continue
beyond the applicable grace or cure period, if any, provided with
respect thereto and the maturity of Material Financial Obligations
shall be accelerated as a result thereof;
<PAGE>
(g) the Company or any Material Subsidiary or any other Borrower
shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief
or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Company or any Material Subsidiary or any other Borrower
seeking liquidation, reorganization or other relief with respect to it
or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered against the Company or
any Material Subsidiary or any other Borrower under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $25,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent
to terminate a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or
to cause a trustee to be appointed to administer any Material Plan; or
a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal from,
or a default, within the meaning of Section 4219(c)(5) of ERISA, with
respect to, one or more Multiemployer Plans which causes one or more
members of the ERISA Group to incur a current payment obligation in
excess of $100,000,000 in the aggregate;
(j) judgments or orders for the payment of money in excess of
$100,000,000 in the aggregate shall be rendered against the Company or
any Subsidiary and such judgments or orders shall continue unsatisfied
and unstayed for a period of 30 days;
<PAGE>
(k) any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange
Act of 1934), directly or indirectly, of Voting Stock of the Company
(or other securities convertible into such Voting Stock) representing
35% or more of the combined voting power of all Voting Stock of the
Company; or (ii) during any period of up to 24 consecutive months,
commencing after the date of this Agreement, individuals who at the
beginning of such 24-month period were directors of the Company shall
cease for any reason (other than due to death or disability) to
constitute a majority of the board of directors of the Company, except
to the extent that individuals who at the beginning of such 24-month
period were replaced by individuals (x) elected by 66-2/3% of the
remaining members of the board of directors of the Company or (y)
nominated for election by a majority of the remaining members
of the board of directors of the Company and thereafter elected as
directors by the shareholders of the Company; or (iii) any Person or
two or more Persons acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or
arrangement that has resulted in its or their acquisition of, control
over Voting Stock of the Company (or other securities convertible
into such securities) representing 35% or more of the combined voting
power of all Voting Stock of the Company; or
(l) any of the obligations of the Company under Article 10 of
this Agreement shall for any reason not be enforceable against the
Company in accordance with their terms, or the Company shall so assert
in writing; then, and in every such event, the Administrative Agent
shall (i) if requested by Banks having more than 50% in aggregate
amount of the Commitments, by notice to the Company terminate
the Commitments and they shall thereupon terminate and (ii) if
requested by Banks holding more than 50% in aggregate principal amount
of the Loans, by notice to the Company declare the Loans (together with
accrued interest thereon) to be, and the Loans shall thereupon become,
immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Borrowers; provided that in the case of any of the Events
of Default specified in clause (g) or (h) above with respect to any
Borrower, without any notice to any Borrower or any other act by the
Administrative Agent or the Banks, the Commitments shall thereupon
terminate and the Loans (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the
Borrowers.
<PAGE>
Section 6.02. Notice of Default. The Administrative Agent shall
give notice to the Company under Section 6.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE 7
The Administrative Agent
Section 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under
this Agreement and the Notes as are delegated to the Administrative
Agent by the terms hereof or thereof, together with all such powers as
are reasonably incidental thereto.
Section 7.02. Administrative Agent and Affiliates. Morgan
Guaranty Trust Company of New York shall have the same rights and
powers under this Agreement as any other Bank and may exercise or
refrain from exercising the same as though it were not the
Administrative Agent, and Morgan Guaranty Trust Company of New York and
its affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with the Company or any Subsidiary or
affiliate of the Company as if it were not the Administrative
Agent hereunder.
Section 7.03. Action by Administrative Agent. The obligations of
the Administrative Agent hereunder are only those expressly set forth
herein. Without limiting the generality of the foregoing, the
Administrative Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article 6.
Section 7.04. Consultation with Experts. The Administrative
Agent may consult with legal counsel (who may be counsel for any
Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken
by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 7.05. Liability of Administrative Agent. Neither the
Administrative Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be liable to
any Bank for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks
(or, when expressly required hereby, all the Banks) or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the
Administrative Agent nor any of its affiliates nor any of their
<PAGE>
respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made in connection with
this Agreement or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements of any Borrower; (iii)
the satisfaction of any condition specified in Article 3, except
receipt of items required to be delivered to the Administrative Agent;
or (iv) the validity, effectiveness or genuineness of this Agreement,
the Notes or any other instrument or writing furnished in connection
herewith. The Administrative Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or
other writing (which may be a bank wire, telex or similar writing)
believed by it in good faith to be genuine or to be signed by the
proper party or parties. Without limiting the generality of the
foregoing, the use of the term "agent" in this Agreement with reference
to the Administrative Agent is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of
any applicable law. Instead, such term is used merely as a matter of
market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.
Section 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Administrative Agent, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrowers) against
any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such
as result from such indemnitees' gross negligence or willful
misconduct) that such indemnitees may suffer or incur in connection
with this Agreement or any action taken or omitted by such indemnitees
thereunder.
Section 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Administrative Agent
or any other Bank, and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
Section 7.08. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving notice thereof to the Banks and
the Company. Upon any such resignation, the Company, with the consent
of the Required Banks (such consent not to be unreasonably withheld or
delayed), shall have the right to appoint a successor Administrative
<PAGE>
Agent. If no successor Administrative Agent shall have been so
appointed, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent gives notice of resignation,
then the retiring Administrative Agent may, on behalf of the Banks,
appoint a successor Administrative Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital
and surplus of at least $500,000,000. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties
of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it
was Administrative Agent.
Section 7.09. Administrative Agent's Fees. The Company shall
pay to the Administrative Agent for its own account fees in the amounts
and at the times previously agreed upon between the Company and the
Administrative Agent.
Section 7.10. Other Agents. Nothing in this Agreement shall
impose upon any Managing Agent or upon any Co-Agent, in such capacity,
any duties or obligations whatsoever.
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any
Euro-Dollar Borrowing or Bid Rate (Indexed) Borrowing:
(a) the Administrative Agent is advised by the Euro-Dollar
Reference Banks that deposits in dollars (in the applicable amounts)
are not being offered to the Euro-Dollar Reference Banks
in the relevant market for such Interest Period, or
(b) in the case of a Euro-Dollar Borrowing, Banks having more
than 50% of the aggregate amount of the affected Loans advise the
Administrative Agent that the London Interbank Offered Rate as
determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Banks of funding their Euro-Dollar Loans for
such Interest Period, the Administrative Agent shall forthwith give
notice thereof to the Borrower and the Banks, whereupon until the
<PAGE>
Administrative Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, (i) the obligations of
the Banks to make Euro-Dollar Loans or to continue or convert
outstanding Loans as or into Euro-Dollar Loans shall be suspended and
(ii) each outstanding Euro-Dollar Loan shall be converted into a Base
Rate Loan on the last day of the then current Interest Period
applicable thereto. Unless the Borrower notifies the Administrative
Agent at least one Domestic Business Day before the date of any Fixed
Rate Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be
made as a Base Rate Borrowing and (ii) if such Borrowing is a Bid Rate
(Indexed) Borrowing, the Loans comprising such Borrowing shall bear
interest for each day from and including the first day to but excluding
the last day of the Interest Period applicable thereto at the
Base Rate for such day.
Section 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or
its Euro-Dollar Lending Office) with any request or directive (whether
or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank (or
its Euro-Dollar Lending Office) to make, maintain or fund any of its
Euro-Dollar Loans to any Borrower and such Bank shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give
notice thereof to the other Banks and such Borrower, whereupon until
such Bank notifies such Borrower and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans, or to continue or
convert outstanding Loans as or into Euro-Dollar Loans, to such
Borrower shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall
designate a different Euro-Dollar Lending Office if such designation
will avoid the need for giving such notice and will not be otherwise
disadvantageous to such Bank in the good faith exercise of its
discretion. If such notice is given, each Euro-Dollar Loan of such
Bank to such Borrower then outstanding shall be converted to a Base
Rate Loan either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loan if such Bank may lawfully
continue to maintain and fund such Loan to such day or (b) immediately
if such Bank shall determine that it may not lawfully continue to
maintain and fund such Loan to such day.
<PAGE>
Section 8.03. Increased Cost and Reduced Return. (a) If on or
after (x) the date of this Agreement, in the case of any Committed Loan
or any obligation to make Committed Loans or (y) the date of any
related Bid Rate Quote, in the case of any Bid Rate Loan, the adoption
of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank
or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office)
with any request or directive (whether or not having the force of law)
issued on or after such date of any such authority, central bank or
comparable agency shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, but excluding with respect to any
Euro-Dollar Loan any such requirement for which such Bank is entitled
to compensation for the relevant Interest Period under Section 2.16)
against assets of, deposits with or for the account of, or credit
extended by, any Bank (or its Applicable Lending Office) or shall
impose on any Bank (or its Applicable Lending Office) or on the London
interbank market any other condition (other than in respect of Taxes or
Other Taxes) affecting its Fixed Rate Loans, its Notes or its
obligation to make Fixed Rate Loans and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable
Lending Office) of making or maintaining any Fixed Rate Loan
or to reduce the amount of any sum received or receivable by such Bank
(or its Applicable Lending Office) under this Agreement or under its
Notes with respect thereto, by an amount deemed by such Bank to be
material, then, within 15 days after receipt by the Company of written
demand by such Bank (with a copy to the Administrative Agent), the
Company shall pay to such Bank an amount which on an after-tax basis is
necessary to maintain the same rate of return on capital that
existed immediately prior thereto which such Bank reasonably determines
is attributable to this Agreement, its Loans or its obligations to make
Loans hereunder (after taking into account such Bank's policies as to
capital adequacy).
(b) If any Bank shall have determined that, on or after the date
of this Agreement, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any such law,
rule or regulation, or any change in the interpretation or
Administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central
bank or comparable agency given or made after the date of this
<PAGE>
Agreement (including any determination by any such authority, central
bank or comparable agency that, for purposes of capital adequacy
requirements, the Commitments hereunder do not constitute commitments
with an original maturity of one year or less), has or would have the
effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a
level below that which such Bank (or its Parent) could have achieved
but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time,
within 15 days after receipt by the Company of written demand by such
Bank (with a copy to the Administrative Agent), the Company shall pay
to such Bank an amount which on an after-tax basis is necessary to
maintain the same rate of return on capital that existed immediately
prior thereto which such Bank reasonably determines is attributable to
this Agreement, its Loans or its obligations to make Loans hereunder
(after taking into account such Bank's policies as to capital
adequacy).
(c) Each Bank will promptly notify the Company and the
Administrative Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Bank to compensation
pursuant to this Section and will designate a different Applicable
Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of
any Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be
presumptively correct in the absence of manifest error. In determining
such amount, such Bank may use any reasonable averaging and attribution
methods. Notwithstanding the foregoing subsections 8.03(a) and
8.03(b), the Company shall only be obligated to compensate any Bank for
any amount arising or accruing during (i) any time or period commencing
not more than 45 days prior to the date on which such Bank notifies the
Administrative Agent and the Company that it proposes to demand such
compensation and identifies to the Administrative Agent and the Company
the statute, regulation or other basis upon which the claimed
compensation is or will be based and (ii) any time or period during
which because of the retroactive application of such statute,
regulation or other such basis, such Bank did not know in good faith
that such amount would arise or accrue.
Section 8.04. Taxes. (a) For purposes of this Section 8.04, the
following terms have the following meanings:
<PAGE>
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any
payment by any Borrower pursuant to this Agreement or any Note, and all
liabilities with respect thereto, excluding (i) in the case of each
Bank and the Administrative Agent, taxes imposed on its net income and
franchise or similar taxes imposed on it by a jurisdiction under the
laws of which such Bank or the Administrative Agent (as the case
may be) is organized or in which its principal executive office is
located or, in the case of each Bank, in which its Applicable Lending
Office is located (all such excluded taxes of the Administrative Agent
or any Bank being herein referred to as its "Domestic Taxes") and (ii)
in the case of each Bank, any United States withholding tax imposed on
such payments except to the extent that such Bank is subject to United
States withholding tax by reason of a U.S. Tax Law Change.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to this Agreement or
under any Note or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note.
"U.S. Tax Law Change" means with respect to any Bank or
Participant the occurrence (x) in the case of each Bank listed on the
signature pages hereof, after the date of its execution and delivery
of this Agreement and (y) in the case of any other Bank, after the date
such Bank shall have become a Bank hereunder, and (z) in the case of
each Participant, after the date such Participant became a Participant
hereunder, of the adoption of any applicable U.S. federal law, U.S.
federal rule or U.S. federal regulation relating to taxation, or any
change therein, or the entry into force, modification or revocation of
any income tax convention or treaty to which the United States is a
party.
(b) Any and all payments by any Borrower to or for the account of
any Bank or the Administrative Agent hereunder or under any Note shall
be made without deduction for any Taxes or Other Taxes; provided that,
if any Borrower shall be required by law to deduct any Taxes or Other
Taxes from any such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
8.04) such Bank or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Borrower shall make such deductions,
(iii) such Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law
and (iv) such Borrower shall furnish to the Administrative Agent, at
its address referred to in Section 11.01 the original or a certified
copy of a receipt evidencing payment thereof.
<PAGE>
(c) Each Borrower agrees to indemnify each Bank and the
Administrative Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section
8.04) paid by such Bank or the Administrative Agent (as the case may
be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. In addition, each Borrower
organized under the laws of a jurisdiction outside the United States
agrees to indemnify the Administrative Agent and each Bank for all
Domestic Taxes incurred by it and any liability (including any
penalties, interest and expenses arising therefrom or with respect
thereto), in each case to the extent that such Domestic Taxes or
liabilities result from any payment or indemnification pursuant to this
Section by or for the account of such Borrower. This indemnification
shall be paid within 15 days after such Bank or the Administrative
Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank listed on the
signature pages hereof and on or prior to the date on which it becomes
a Bank in the case of each other Bank, and from time to time thereafter
as required by law (but only so long as such Bank remains lawfully able
to do so), shall provide the Company two completed and duly executed
copies of Internal Revenue Service form 1001 or 4224, as appropriate,
or any successor form prescribed by the Internal Revenue Service, or
other documentation reasonably requested by the Company, certifying
that such Bank is entitled to benefits under an income tax treaty to
which the United States is a party which exempts the Bank from United
States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of such Bank or certifying that
the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States.
(e) For any period with respect to which a Bank has failed to
provide the Company with the appropriate form pursuant to Section
8.04(d) (unless such failure is due to a U.S. Tax Law Change), such
Bank shall not be entitled to indemnification under Section 8.04(b) or
8.04(c) with respect to any Taxes or Other Taxes which would not have
been payable had such form been so provided, provided that if a Bank,
which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to Taxes because of its failure to
deliver a form required hereunder, the Company shall take such steps as
such Bank shall reasonably request to assist such Bank to recover such
Taxes (it being understood, however, that the Company shall have no
liability to such Bank in respect of such Taxes).
<PAGE>
(f) If any Borrower is required to pay additional amounts to or
for the account of any Bank pursuant to this Section 8.04, then such
Bank will take such action (including changing the jurisdiction of its
Applicable Lending Office) as in the good faith judgment of such Bank
(i) will eliminate or reduce any such additional payment which may
thereafter accrue and (ii) is not otherwise disadvantageous to such
Bank.
Section 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make or to continue or
convert outstanding Loans as or into Euro-Dollar Loans to any Borrower
has been suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03(a) or 8.04 with respect to its
Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Administrative
Agent, have elected that the provisions of this Section shall apply to
such Bank, then, unless and until such Bank notifies the Borrower that
the circumstances giving rise to such suspension or demand for
compensation no longer apply:
(a) all Loans to such Borrower which would otherwise be made by
such Bank as (or continued as or converted to) Euro-Dollar Loans, as
the case may be, shall instead be Base Rate Loans (on which interest
and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans to such Borrower has
been repaid, all payments of principal which would otherwise be applied
to repay such Loans shall be applied to repay its Base Rate Loans
instead.
If such Bank notifies such Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist, the
principal amount of each such Base Rate Loan shall be converted into a
Euro-Dollar Loan on the first day of the next succeeding Interest
Period applicable to the related Euro-Dollar Loans of the other Banks.
Section 8.06. Substitution of Bank. If (i) the obligation of any
Bank to make or to convert or continue outstanding Loans as or into
Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii)
any Bank has demanded compensation under Section 8.03 or 8.04, the
Company shall have the right, with the assistance of the Administrative
Agent, to designate a substitute bank or banks (which may be one or
more of the Banks) mutually satisfactory to the Company and the
Administrative Agent (whose consent shall not be unreasonably withheld
or delayed) to purchase for cash, pursuant to an Assignment and
<PAGE>
Assumption Agreement in substantially the form of Exhibit G hereto, the
outstanding Loans of such Bank and assume the Commitment of such Bank,
without recourse to or warranty by, or expense to, such Bank, for a
purchase price equal to the principal amount of all of such Bank's
outstanding Loans plus any accrued but unpaid interest thereon and the
accrued but unpaid fees in respect of such Bank's Commitment hereunder
plus such amount, if any, as would be payable pursuant to Section 2.14
if the outstanding Loans of such Bank were prepaid in their entirety on
the date of consummation of such assignment.
ARTICLE 9
Representations and Warranties of Eligible Subsidiaries
By the execution and delivery of its Election to Participate, each
Eligible Subsidiary shall be deemed to have represented and warranted
as of the date thereof that:
Section 9.01. Corporate Existence and Power. It is a legal
entity duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and is a Substantially-Owned
Consolidated Subsidiary of the Company.
Section 9.02. Corporate and Governmental Authorization;
Contravention. The execution and delivery by it of its Election to
Participate and its Notes, and the performance by it of this Agreement
and its Notes, are within its legal powers, have been duly authorized
by all necessary legal action, require no action by or in respect of,
or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable
law or regulation or of its organizational documents or of any
agreement, judgment, injunction, order, decree or other instrument
binding upon the Company or such Eligible Subsidiary or result in the
creation or imposition of any Lien on any asset of the Company or any
of its Subsidiaries.
Section 9.03. Binding Effect. Its Election to Participate has
been duly executed by such Eligible Subsidiary and this Agreement
constitutes a valid and binding agreement of such Eligible Subsidiary
and each of its Notes, when executed and delivered in accordance with
this Agreement, will constitute a valid and binding obligation of such
Eligible Subsidiary, in each case enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by general
principles of equity.
<PAGE>
Section 9.04. Taxes. Except as disclosed in the opinion of
counsel delivered pursuant to Section 3.03 of this Agreement or in its
Election to Participate, there are no Taxes or Other Taxes of any
country, or any taxing authority thereof or therein, which are
imposed on any payment to be made by such Eligible Subsidiary pursuant
hereto or on its Notes, or imposed on or by virtue of the execution,
delivery or enforcement of this Agreement, its Election to Participate
or of its Notes.
ARTICLE 10
Guaranty
Section 10.01. The Guaranty. The Company hereby unconditionally
guarantees the full and punctual payment (whether at stated maturity,
upon acceleration or otherwise) of the principal of and interest on
each Loan made to any Eligible Subsidiary pursuant to this Agreement,
and the full and punctual payment of all other amounts payable by any
Eligible Subsidiary under this Agreement or any Note. Upon failure by
any Eligible Subsidiary to pay punctually any such amount, the Company
shall forthwith on demand pay the amount not so paid at the place and
in the manner specified in this Agreement.
Section 10.02. Guaranty Unconditional. The obligations of the
Company hereunder shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any Eligible Subsidiary under
this Agreement or any Note, by operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any Note;
(c) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of any Eligible
Subsidiary under this Agreement or any Note;
(d) any change in the existence, structure or ownership of any
Eligible Subsidiary, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Eligible Subsidiary or its
assets or any resulting release or discharge of any obligation of any
Eligible Subsidiary contained in this Agreement or any Note;
<PAGE>
(e) the existence of any claim, set-off or other rights which
the Company may have at any time against any Eligible Subsidiary, the
Administrative Agent, any Bank or any other Person, whether in
connection herewith or with any unrelated transactions, provided that
nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against
any Eligible Subsidiary for any reason of this Agreement or any Note,
or any provision of applicable law or regulation purporting
to prohibit the payment by any Eligible Subsidiary of the principal of
or interest on any Loan or any other amount payable by it under this
Agreement or any Note; or
(g) any other act or omission to act or delay of any kind by any
Eligible Subsidiary, the Administrative Agent, any Bank or any other
Person or any other circumstance whatsoever which might, but for the
provisions of this paragraph, constitute a legal or equitable discharge
of or defense to the Company's obligations hereunder.
Section 10.03. Discharge Only Upon Payment In Full; Reinstatement
In Certain Circumstances. The Company's obligations hereunder shall
remain in full force and effect until the Commitments shall have
terminated and the principal of and interest on the Loans and
all other amounts payable by the Company and each Eligible Subsidiary
under this Agreement or any Note shall have been paid in full. If at
any time any payment of principal of or interest on any Loan or any
other amount payable by any Eligible Subsidiary under this Agreement or
any Note is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of any Eligible Subsidiary
or otherwise, the Company's obligations hereunder with respect to such
payment shall be reinstated at such time as though such payment had
been due but not made at such time.
Section 10.04. Waiver by the Company. The Company irrevocably
waives acceptance hereof, presentment, demand, protest and any notice
not provided for herein, as well as any requirement that at any time
any action be taken by any Person against any Eligible Subsidiary or
any other Person.
Section 10.05. Subrogation. The Company irrevocably waives any
and all rights to which it may be entitled, by operation of law or
otherwise, upon making any payment hereunder in respect of any Eligible
Subsidiary to be subrogated to the rights of the payee against
such Eligible Subsidiary with respect to such payment or against any
direct or indirect security therefor, or otherwise to be reimbursed,
<PAGE>
indemnified or exonerated by or for the account of such Eligible
Subsidiary in respect thereof, in any bankruptcy, insolvency or similar
proceeding involving such Eligible Subsidiary as debtor commenced
within one year after the making of any payment by such Eligible
Subsidiary under this Agreement or its Notes.
Section 10.06. Stay of Acceleration. In the event that
acceleration of the time for payment of any amount payable by any
Eligible Subsidiary under this Agreement or any Note is stayed upon
insolvency, bankruptcy or reorganization of such Eligible Subsidiary,
all such amounts otherwise subject to acceleration under the terms of
this Agreement shall nonetheless be payable by the Company hereunder
forthwith on demand by the Administrative Agent made at the request of
the Required Banks.
ARTICLE 11
Miscellaneous
Section 11.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
bank wire, telex, facsimile transmission or similar writing) and shall
be given to such party: (a) in the case of the Company or the
Administrative Agent, at its address, facsimile number or telex number
set forth on the signature pages hereof, (b) in the case of any Bank,
at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (c) in the case of any party, such
other address, facsimile number or telex number as such party may
hereafter specify for the purpose by notice to the Administrative Agent
and the Company. Each such notice, request or other communication
shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (iii) if given by
mail, 72 hours after such communication is deposited in the mail with
first class postage prepaid, addressed as aforesaid or (iv) if given by
any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under
Article 2 or Article 8 shall not be effective until received. Any
notice required to be given to or by any Eligible Subsidiary shall be
duly given if given to or by the Company, which is hereby appointed the
agent of each Eligible Subsidiary for such purpose.
Section 11.02. No Waivers. No failure or delay by the
Administrative Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.
<PAGE>
Section 11.03. Expenses; Indemnification. (a) The Company shall
pay (i)all reasonable out-of-pocket expenses of the Administrative
Agent, including reasonable fees and disbursements of special counsel
for the Administrative Agent, in connection with the preparation
of this Agreement, any waiver or consent hereunder or any amendment
hereof or any Default or alleged Default hereunder and (ii) if an Event
of Default occurs, all reasonable out-of-pocket expenses incurred by
the Administrative Agent or any Bank, including (without duplication)
the reasonable fees and disbursements of outside counsel and allocated
cost of inside counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Company agrees to indemnify the Administrative Agent and
each Bank, their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an "Indemnitee")
and hold each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and out-of-pocket expenses of any
kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in
connection with any litigation or governmental or regulatory
investigation or other similar proceeding (whether or not such
Indemnitee shall be designated a party thereto) relating to or
arising out of this Agreement or any actual or proposed use of proceeds
of Loans hereunder; provided that no Indemnitee shall have the right to
be indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct or for its breach of its express obligations under
this Agreement, in each case as determined by a court of competent
jurisdiction; provided, further, that in no event shall the Company
have any such indemnification obligation in respect of any liabilities,
losses, damages, costs or expenses resulting from disputes between any
Bank and the Administrative Agent or among the Banks.
Section 11.04. Sharing of Set-offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount then due with
respect to the Loans held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount then due
with respect to the Loans held by such other Bank, the Bank receiving
such proportionately greater payment shall purchase such participations
in the Loans held by the other Banks, and such other adjustments shall
be made, as may be required so that all such payments with respect to
the Loans held by the Banks shall be shared by the Banks pro rata;
provided that nothing in this Section shall impair the right of any
Bank to exercise any right of set-off or counterclaim it may have and
to apply the amount subject to such exercise to the payment of
<PAGE>
indebtedness of the Borrowers other than their indebtedness under this
Agreement. Each Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a
participation in a Loan, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully as if such
holder of a participation were a direct creditor of such Borrower in
the amount of such participation.
Section 11.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of the Administrative
Agent are affected thereby, by such Person); provided that no such
amendment or waiver shall, unless signed by all the Banks, (i) increase
or decrease the Commitment of any Bank (except for a ratable decrease
in the Commitments of all Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any
Loan or any fees hereunder, (iii) postpone the date fixed for any
payment of principal of or interest on any Loan or any fees hereunder
or for termination of any Commitment, (iv) make any changes to Article
10 or (v) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans, or the number of Banks, which
shall be required for the Banks or any of them to take any action under
this Section or any other provision of this Agreement; provided further
that no such amendment, waiver or modification shall, unless signed by
each Eligible Subsidiary, (w) subject such Eligible Subsidiary to any
additional obligation, (x) increase the principal of or rate of
interest on any outstanding Loan of such Eligible Subsidiary, (y)
accelerate the stated maturity of any outstanding Loan of such Eligible
Subsidiary or (z) change this proviso.
Section 11.06. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that
no Borrower may assign or otherwise transfer any of its rights
under this Agreement without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant
by a Bank of a participating interest to a Participant, whether or not
upon notice to the Administrative Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the
Borrowers and the Administrative Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement. Any agreement pursuant
<PAGE>
to which any Bank may grant such a participating interest shall provide
that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrowers hereunder including, without
limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause
(i), (ii), (iii) or (iv) of Section 11.05 without the consent of the
Participant. The Borrowers agree that each Participant shall, to the
extent provided in its participation agreement, be entitled to the
benefits of Article 8 with respect to its participating interest,
subject to subsection 11.06(e) below. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given
effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection
(b).
(c) Any Bank may at any time assign to one or more banks or other
financial institutions (each an "Assignee") all, or a proportionate
part (equivalent to an initial Commitment of not less than $15,000,000)
of all, of its rights and obligations under this Agreement and its
Notes (if any), and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit G hereto executed by such Assignee
and such transferor Bank, with (and only with and subject to) the prior
written consent of the Borrower and the Administrative Agent (which
consents shall not be unreasonably withheld or delayed); provided that
if an Assignee is an affiliate of such transferor Bank or was a Bank
immediately prior to such assignment, no such consent shall be
required; provided further such assignment may, but need not, include
rights of the transferor Bank in respect of outstanding Bid Rate Loans.
Upon execution and delivery of such instrument of assumption and
payment by such Assignee to such transferor Bank of an amount equal to
the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder
to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the
Administrative Agent and the Borrowers shall make appropriate
arrangements so that, if required by the Assignee, Note(s) are issued
to the Assignee. In connection with any such assignment, the
transferor Bank or the Assignee shall pay or cause to be paid to the
Administrative Agent an administrative fee for processing such
<PAGE>
assignment in the amount of $3,000. If the Assignee is not organized
under the laws of the United States of America or a state thereof, it
shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to the Company and the
Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance
with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Notes (if any) to a Federal Reserve
Bank. No such assignment shall release the transferor Bank from its
obligations hereunder or modify any such obligations.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section
8.03 or 8.04 than such Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made by
reason of the provisions of Section 8.02, 8.03 or 8.04 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
Section 11.07. Collateral. Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith
is not relying upon any "margin stock" (as defined in Regulation U) as
collateral in the extension or maintenance of the credit provided for
in this Agreement.
Section 11.08. Confidentiality. The Administrative Agent and
each Bank agrees to keep any information delivered or made available by
the Borrower pursuant to this Agreement confidential from anyone other
than persons employed or retained by such Bank and its affiliates who
are engaged in evaluating, approving, structuring or administering the
credit facility contemplated hereby; provided that nothing herein shall
prevent any Bank from disclosing such information (a) to any other Bank
or to the Administrative Agent, (b) to any other Person if
reasonably incidental to the administration of the credit facility
contemplated hereby, (c) upon the order of any court or administrative
agency, (d) upon the request or demand of any regulatory agency or
authority, (e) which had been publicly disclosed other than as a result
of a disclosure by the Administrative Agent or any Bank prohibited by
this Agreement, (f) in connection with any litigation to which the
Administrative Agent, any Bank or its subsidiaries or Parent may be a
party, (g) to the extent necessary in connection with the exercise of
any remedy hereunder, (h) to such Bank's or Administrative Agent's
legal counsel and independent auditors and (i) subject to provisions
substantially similar to those contained in this Section 11.08, to any
actual or proposed Participant or Assignee.
<PAGE>
Section 11.09. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be construed in accordance with and
governed by the law of the State of New York. Each Borrower hereby
submits to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New York State
court sitting in New York City for purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions
contemplated hereby. Each Borrower irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
Section 11.10. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement constitutes the
entire agreement and understanding among the parties hereto and
supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
Section 11.11. Waiver of Jury Trial. EACH OF THE BORROWERS,
THE ADMINISTRATIVE AGENT AND THE BANKS , TO THE FULLEST EXTENT IT
MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the
day and year first above written.
IMC GLOBAL INC.
By /s/ E. Paul Dunn, Jr.
Title: Vice President
2100 Sanders Road
Northbrook, IL 60062
Attention: E. Paul Dunn, Jr.
Vice President & Treasurer
Telecopy number: (847) 205-4930
<PAGE>
Commitments
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, $21,750,000
Individually and as Administrative Agent
By /s/ Robert Bottamedi
Title: Vice President
60 Wall Street
New York, NY 10260
Attention: Loan Department
Telex number: 177615 MGT
Telecopy number: (212) 648-5023
THE CHASE MANHATTAN BANK, $21,000,000
Individually and as Managing Agent
By /s/ James H. Ramage
Title: Vice President
CITIBANK, N.A., Individually $21,000,000
and as Managing Agent
By /s/ Carolyn A. Sheridan
Title: Attorney-in-fact
ROYAL BANK OF CANADA, $21,000,000
Individually and as Managing Agent
By /s/ Gordon MacArthur
Title: Manager
NATIONSBANK, N.A., $12,780,000
Individually and as Managing Agent
By /s/ G. Burton Queen
Title: Managing Director
<PAGE>
BANK OF AMERICA NATIONAL TRUST $8,220,000
AND SAVINGS ASSOCIATION,
Individually and as Managing Agent
By /s/ G. Burton Queen
Title: Managing Director
BANQUE NATIONALE DE PARIS, $16,000,000
Individually and as Co-Agent
By /s/ Arnaud Collin du Bocage
Title: Executive Vice President
and General Manager
CREDIT AGRICOLE INDOSUEZ, $16,000,000
Individually and as Co-Agent
By /s/ David Bouhl
Title: F. V. P., Head of Corporate
Banking, Chicago
By /s/ Katherine L. Abbott
Title: First Vice President
CREDIT LYONNAIS, CHICAGO $16,000,000
BRANCH, Individually and as Co-Agent
By /s/ Julie T. Kanak
Title: First Vice President
THE FIRST NATIONAL BANK OF $16,000,000
CHICAGO, Individually and as Co-Agent
By /s/ Robert G. Sperhac
Title: Vice President
FIRST UNION NATIONAL BANK, $16,000,000
Individually and as Co-Agent
By /s/ Kristen M. Denning
Title: Assistant Vice President
<PAGE>
MARINE MIDLAND BANK, $16,000,000
Individually and as Co-Agent
By /s/ Steve Trepiccione
Title: Vice President - Officer #9435
MELLON BANK, N.A., Individually $16,000,000
and as Co-Agent
By /s/ John K. Walsh
Title: Vice President
THE NORTHERN TRUST COMPANY, $16,000,000
Individually and as Co-Agent
By /s/ Michelle M. Teteak
Title: Vice President
SUNTRUST BANK, ATLANTA, $16,000,000
Individually and as Co-Agent
By /s/ Michel A. Odermatt
Title: Vice President
By /s/ F. Steven Parrish
Title: Vice President
THE TORONTO DOMINION (Texas), $16,000,000
Inc., Individually and as Co-Agent
By /s/ Carol Brandt
Title: Vice President
ABN AMRO BANK N.V., $15,750,000
Individually and as Participant
By /s/ Steven M. Buehler
Title: Assistant Vice President
By /s/ Scott J. Albert
Title: Vice President
<PAGE>
THE BANK OF NEW YORK, $15,750,000
Individually and as Participant
By /s/ John M. Lokay, Jr.
Title: Vice President
HARRIS TRUST AND SAVINGS BANK, $16,000,000
Individually and as Co-Agent
By /s/ Julie K. Hossack
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, $12,250,000
LTD. CHICAGO BRANCH,
Individually and as Participant
By /s/ Hajime Watanabe
Title: Deputy General Manager
COOPERATIEVE CENTRALE $12,250,000
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH, Individually
and as Participant
By /s/ W. Jeffrey Vollack
Title: Senior Credit Officer and
Senior Vice President
By /s/ Michiel V. M. Van der Voort
Title: Vice President
STANDARD CHARTERED BANK, $12,250,000
Individually and as Participant
By /s/ Francois Dorival-Bordes
Title: Senior Vice President
By /s/ Kristina McDavid
Title: Vice President
Total Commitments $350,000,000
============
<PAGE>
Pricing Schedule
The "Euro-Dollar Margin" and the "Facility Fee Rate" for any day
are the respective percentages set forth below in the applicable row
under the column corresponding to the Status that exists on such day:
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
Facility Fee Rate .08% .10% .125% .15% .50%
Euro-Dollar Margin .47% .55% .75% .85% 1.00%
For purposes of this Schedule, the following terms have the
following meanings, subject to the last paragraph of this Schedule:
"Level I Status" exists at any date if, at such date, the Company
is rated BBB+ or higher by S&P and Baa2 or higher by Moody's or Baa1
or higher by Moody's and BBB or higher by S&P.
"Level II Status" exists at any date if, at such date, the Company
is rated BBB by S&P and Baa2 by Moody's.
"Level III Status" exists at any date if, at such date, (i) the
Company is rated BBB or higher by S&P or Baa2 or higher by Moody's and
(ii) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (i) the
Company is rated BBB- by S&P or Baa3 by Moody's and (ii) neither Level
I Status, Level II Status nor Level III Status exists.
"Level V Status" exists at any date if, at such date, no other
Status exists.
"Status" refers to the determination of which of Level I Status,
Level II Status, Level III Status, Level IV Status or Level V Status
exists at any date.
The credit ratings to be utilized for purposes of this Schedule
are those assigned to the senior unsecured long-term debt securities of
the Company without third-party credit enhancement, whether or not any
such debt securities are actually outstanding, and any rating assigned
to any other debt security of the Company shall be disregarded. The
rating in effect at any date is that in effect at the close of business
on such date. If the Company is split-rated and the ratings
differential is one notch, the higher of the two ratings will apply
(e.g., BBB/Baa3 results in Level III Status). If the Company is
split-rated and the ratings differential is more than one notch, the
<PAGE>
average of the two ratings (or the higher of two intermediate ratings)
shall be used (e.g., BBB+/Baa3 results in Level III Status, as does
BBB+/Ba1). Notwithstanding the foregoing, the Borrower's senior
unsecured long-term debt must be rated at least BBB by S&P and Baa2 by
Moody's for either Level I or Level II to apply. If at any date, the
Company's long-term debt is rated by neither S&P nor Moody's, then
Level V shall apply.
EXHIBIT 10.61
Execution Copy
AMENDMENT NO. 1 TO CANADIAN FIVE-YEAR CREDIT AGREEMENT
Amendment dated as of March 31, 1998 among International Minerals
& Chemical (Canada) Global Limited ("IMC Canada"), IMC Kalium Canada
Inc. ("IMC Kalium"), IMC Global Inc. (the "Guarantor"), the Banks
listed on the signature pages hereof (the "Banks") and Royal Bank of
Canada, as Agent, (the "Agent").
WHEREAS, IMC Canada, IMC Kalium, the Guarantor, the Banks and the
Agent are parties to a Five-Year Canadian Credit Agreement dated as of
December 22, 1997 (the "Agreement"); and
AND WHEREAS, the parties hereto desire to amend the Agreement as
specified below;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the sum
of $1.00 now paid by each party to the other and for other good and
valuable consideration (the receipt and sufficiency which are hereby
acknowledged) that parties hereto agree as follows:
1. Definitions; References.
(a) Unless otherwise specifically defined herein, each term used
herein which is defined in the Agreement shall have the meaning
assigned to such term in the Agreement.
(b) The following definitions are added to Section 1.1 in their
appropriate alphabetical positions.
"Existing Harris Debt" means Debt of Harris Chemical North America,
Inc., a Delaware corporation, under its outstanding $250,000,000
10.25% Senior Secured Discount Notes and its outstanding
$335,000,000 10.75% Senior Subordinated Notes.
"Harris Chemical Acquisition" means, collectively, the merger of
Harris Chemical Group with and into IMC Merger Sub Inc., a wholly-
owned Subsidiary of the Guarantor with Harris Chemical Group as the
successor thereto, expected to be consummated on or about March 31,
1998 pursuant to that certain Agreement and Plan of Merger, dated
December 11, 1997, by and among the Guarantor, IMC Merger Sub Inc.
and Harris Chemical Group, and the acquisition, directly or
indirectly, by the Guarantor of all of the outstanding shares of
Harris Chemical Australia Pty Limited pursuant to the Sale and
Purchase Agreement made as of December 11, 1997, among Prudential
<PAGE>
Asset Management Asia Limited, DGHA Persons and Trusts named
therein, Search Investment NV, Harris Chemical Australia Pty
Limited, Marsupial L.L.C., Marsupial-II L.L.C., Soda Ash (L) BHD,
Manager Shareholders named therein and the Guarantor.
"Harris Chemical Group" means Harris Chemical Group, Inc., a
Delaware corporation.
Effective retroactively from and after December 22, 1997 the
definition of "Conversion Date" is deleted.
The following language is added at the end of the definition of
"Guarantor's Credit Agreement ":
"and the U.S. $1,000,000,000 364-day credit agreement among the
Guarantor and the several banks listed therein, Royal Bank of
Canada, as documentation agent, The Chase Manhattan Bank and
NationsBank, N.A., as co-syndication agents, Bank of Montreal as
administrative agent, and Morgan Guaranty Trust Company of New York,
as senior managing agent dated as of April 1, 1998".
The word "either" is deleted and the word "any" substituted therefor
in the definition of "US Borrower".
2. Guarantor; Mergers and Sale of Assets.
(a) The word "and" appearing immediately before clause (z) in
Section 5.2(e)(ii) is hereby deleted.
(b) The following clause (z) is added to the proviso in Section
5.2(e)(ii):
"and (z) the sale of assets acquired in or as a direct result of
the Harris Chemical Acquisition."
Clauses (w), (x), (y) and (z) in Section 5.2(e)(ii) are renamed
(v), (w), (x) and (y) respectively.
3. Debt of Subsidiaries.
(a) The following language is added to the first parenthetical in
Section 5.2(g) immediately following the word "excluding":
"(i)Existing Harris Debt at any time until the earlier of (x)
November 1, 1998 and (y) the repurchasing or prepayment of such
Debt by the Guarantor or by any such Subsidiary of the
Guarantor (but not any refinancing thereof) and (ii)"
<PAGE>
Clauses (i), (ii), (iii) and (iv) in the first parenthetical in
Section 5.2(g) are renamed (w), (x), (y) and (z) respectively.
The percentage "20%" in Section 5.2(g) is deleted and "25%"
substituted therefor.
4. Pricing.
(a) Effective retroactively from and after December 22, 1997 (i)
Section 1.7 of the Agreement is deleted and (ii) the proviso
in the first paragraph of the Pricing Schedule is deleted.
(b) On the later of (i) the date this Agreement becomes effective
in accordance with paragraph 10 hereof and (ii) March 31,
1998, the Borrower shall pay to the Administrative Agent for
the account of the Banks accrued amounts payable as a result
of Section 4(a) hereof.
5. Representations and Warranties.
(a) The Borrowers represent and warrant that as of the date hereof
and after giving effect hereto:
(b) no Default has occurred and is continuing; and
(c) each representation and warranty of the Borrowers set forth in
the Agreement is true and correct as though made on and as of
such date.
(d) The Guarantor represents and warrants that as of the date
hereof and after giving effect hereto:
(e) no Default has occurred and is continuing; and
(f) each representation and warranty of the Guarantor set forth in
the Agreement is true and correct on and as of such date.
Confirmation of Guarantee. The Guarantor hereby acknowledges the
foregoing amendments to the Agreement and hereby expressly confirms
that the guarantee provided by the Guarantor pursuant to Article 9 of
the Agreement and the liability of the Guarantor thereunder remains in
full force and effect notwithstanding the amendments to the Agreement
made pursuant hereto.
Exhibit D. The word "Canadian" is added following the words
"Five-Year" in the first recital of Exhibit D.
EXHIBIT 10.62
AMENDMENT NO. 2 TO CANADIAN FIVE-YEAR CREDIT AGREEMENT
Amendment dated as of August 31, 1998 among International
Minerals & Chemical (Canada) Global Limited ("IMC Canada"), IMC Kalium
Canada Ltd. ("IMC Kalium"). International Minerals & Chemical (Canada)
Limited Partnership ("IMC Partnership"), IMC Global Inc. (the
"Guarantor"), the Banks listed on the signature pages hereof (the
"Banks") and Royal Bank of Canada, as Agent (the "Agent").
WHEREAS IMC Canada, IMC Kalium, the Guarantor, the Banks and the
Agent are parties to a Five-Year Canadian Credit Agreement dated as of
December 22, 1997, as amended by an agreement among the same parties
dated as of March 31, 1998 (collectively the "Original Agreement");
AND WHEREAS IMC Canada will subscribe for shares of IMC Esterhazy
Ltd. ("IMC Esterhazy") and will pay C$2,000,000 to IMC Esterhazy in
consideration therefor (the "Initial Transaction");
AND WHEREAS the said C$2,000,000 represents approximately 0.5% of
the operating assets of IMC Canada;
AND WHEREAS IMC Esterhazy will be a direct wholly-owned subsidiary
of IMC Canada;
AND WHEREAS IMC Canada and IMC Esterhazy (collectively, the
"Partners") will form a Saskatchewan limited partnership to be called
International Minerals & Chemical (Canada) Limited Partnership ("IMC
Partnership");
AND WHEREAS IMC Canada and IMC Esterhazy will transfer their
operating assets to IMC Partnership (the "Subsequent Transaction");
AND WHEREAS the parties hereto desire to amend the Original
Agreement to include IMC Partnership as a Borrower and to make such
other amendments as are specified below (the "Original Agreement", as
amended hereby being herein referred to as the "Agreement");
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of
the sum of $1.00 now paid by each party to the other and for other good
and valuable consideration ( the receipt and sufficiency which are
hereby acknowledged) that parties hereto agree as follows:
1. Addition of Borrower.
IMC Partnership is hereby added as a Borrower under the
Agreement. By its execution of this Amendment, IMC Partnership
expressly agrees to become a party to the Agreement and be
bound by the provisions thereof.
<PAGE>
2. Transfer of Assets.
The Banks and the Agent hereby confirm their consent to the
Initial Transaction and the Subsequent Transaction.
3. Definitions; References.
(a) Unless otherwise specifically defined herein, each term
used herein which is defined in the Original Agreement
shall have the meaning assigned to such term in the
Original Agreement.
(b) The following definitions are added to Section 1.1 in
their appropriate alphabetical positions:
(c) "change in constitution of IMC Partnership" has the
meaning ascribed to that term for purposes of the
Partnership Act (Saskatchewan).
(d) "IMC Esterhazy means IMC Esterhazy Ltd.
(e) "IMC Partnership" means International Minerals & Chemical
(Canada) Limited Partnership.
(f) "Jointly Liable Borrowers" has the meaning set forth in
Section 1.6.
(g) The definition of "Borrower" in Section 1.1 is amended by
deleting the word "or" following the word "IMC Canada"
and substituting a comma (",") therefore and inserting
the words "or IMC Partnership" following the words "IMC
Kalium".
(h) The definition of "Consolidated Subsidiary" in
Section 1.1 is amended by inserting the words ", for
greater certain and without limitation, IMC Partnership
shall be deemed to be a "Consolidated Subsidiary of the
Guarantor, IMC Canada and IMC Potash" following the word
"Guarantor" at the end of such definition.
(i) The definition of "Substantially-Owned Consolidated
Subsidiary" in Section 1.1 is amended by inserting the
words", and further provided, for greater certainty, and
without limitation, that IMC Partnership shall be deemed
to be a "Substantially-Owned Consolidated Subsidiary""
following the words "a Consolidated Subsidiary" at the
end of such definition.
<PAGE>
(j) The definition of "Subsidiary" in Section 1.1 is amended
by inserting he words", for greater certainty, and
without limitation, IMC Partnership shall be deemed to be
a "Subsidiary" of IMC Canada, IMC Potash and the
Guarantor" at the end of such definition following the
words "owned by such Person".
4. Representations and Warranties - Amendments.
(a) The words "Each of the Borrowers" in the introductory
language of Section 4.1 are deleted and the words "IMC
Kalium represents and warrants for itself and only with
respect to itself and IMC Canada and IMC Partnership
jointly and severally" substituted therefor. The words
"for itself" appearing in the introductory language o
Section 4.1 following the words "represent and warrant"
and preceding the word "that;" are deleted and the words
"for themselves and only with respect to themselves" are
substituted therefor.
(b) The words "the Borrower" following the words "Each of" in
section 4.1(a) are deleted and the words "IMC Canada and
IMC Kalium" substituted therefor. The words:
(c) "IMC Partnership is a limited partnership validly
established and existing under the laws of the Province
of Saskatchewan and has all powers and all material
governmental licenses, authorizations, consent and
approvals required to carry n its business as now
conducted and is duly qualified or registered as a
limited partnership in each jurisdiction where such
qualification or registration is required, except where
the failure to so qualify or register could not be
expected to have a Material Averse Effect. IMC Canada
and IMC Esterhazy are, respectively, the general partner
and limited partner of IMC Partnership. IMC Canada has
full power and authority to act as the general partner of
IMC Partnership"
are inserted at the end of Section 4.1(a) following the
period (".").
(d) Section 4.1(b) is deleted in its entirety and the
following substituted therefor:
<PAGE>
(e) "Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance
by each of IMC Canada (for itself and in its capacity as
the general partner of IMC Partnership) and IMC Kalium
of this Agreement are within the corporate powers of IMC
Canada and IMC Kalium and the partnership powers of IMC
Partnership, have been duly authorized by all necessary
corporate of other similar action, require no action by
or in respect of, or filing with, any governmental body,
agency or official and do not contravene, or constitute
a default under, any provision of applicable law or
regulation or of the certificate or article so
incorporation or by-laws of either of IMC Canada or IMC
Kalium or the certificate of IMC Partnership or of any
other agreement (including any partnership agreement),
judgment, injunction, order, decree or other instrument
binding upon any of the Borrowers or any of its
Subsidiaries or result in the creation or imposition of
any lien on any asset of any one of the Borrowers or any
of its Subsidiaries."
(f) The words, "(iii) The unaudited pro forma balance sheet
of IMC Partnership as of July 31, 1998 fairly presents
the financial position of IMC Partnership as if it was
existing on such date." are added as new
clause 4.1(d)(iii).
(g) The word "corporate" is inserted following the words
"Each of the Borrowers" in Section 4.1(i).
(h) The words, "(k) IMC Esterhazy. IMC Esterhazy is a
wholly-owned direct Subsidiary of IMC Canada." are added
as a new subsection at the end of Section 4.1.
(i) Section 4.2(a) is deleted in its entirety and the
following substituted therefor:
(j) "(a) The Guarantor repeats the representations and
warranties made in the first sentence of
subsection 4.1(a), and in subsection 4.1(b), 4.1(c),
4.1(f), 4.1(g) and 4.1(i) as if the references to the
"Borrower" (and in the case of the first sentence of
subsection 4.1(a) and of subsection 4.1(b) "IMC Canada
and IMC Kalium") therein (s the context permits) were
read as "Guarantor"."
<PAGE>
5. Covenants - Amendments.
(a) The parenthetical "(A)" is added following the words "of
each fiscal year of" and preceding the words "each of"
in Section 5.1(a)(i) and the words "and (B) an unaudited
balance sheet of IMC Partnership and it respective
Subsidiaries as a the end of such fiscal year and the
related unaudited statement of earnings, cash flows and
changes in partnership interest for such fiscal year,
setting forth in each case in comparative form the
figures for the previous fiscal year, all prepared on a
basis consistent with the financial statements referred
to in Section 4.1(d) hereof following the words "IMC
potash" and preceding the semi-colon (";") at the end of
Section 5.1(a).
(b) The words "or any action, event or circumstance" are
inserted following the word "transaction" in
Section 5.1(a)(iii).
(c) The parenthetical phrase "(other than a Borrower): is
inserted after each reference to the word "Subsidiary"
is clauses (i) and (ii) of Section 5.1(d) and clause (i)
of Section 5.2(c).
(d) The word "corporate" is deleted following the words ",
renew and keep in full force and effect, its respective"
in Section 5.1(d) and the word "legal" substituted
therefor.
(e) The words "and will not permit any o its Subsidiaries
to" are inserted immediately following the words "The
Borrower will not" in Section 5.1(g)(ii).
(f) The word "corporate" is deleted from Section 5.1(b) and
the word "operating" substituted therefor.
6. Defaults - Amendments.
(a) The words, ", IMC Esterhazy" are inserted immediately
following the word "Borrowers" and preceding the words
"or any subsidiary of the Borrower" and immediately
following the word "Borrowers" an preceding the words
"or any such Material Subsidiary" in each place such
words appear in Section 6.1(i).
<PAGE>
(b) The words ",IMC Esterhazy shall cease to be a direct
wholly-owned Subsidiary of IMC Canada or there shall be
any change in the members of IMC Partnership" are
inserted at the end of Section 6.1(m) following the
word "Guarantor".
7. Guarantee - Amendments.
(a) The word ", revoked" is inserted following the word
"discharged" in the introductory language of
Section 9.2.
(b) The words ", including a change in the constitution of
IMC Partnership" are added following the words
"ownership of any Borrower" in Section 9.2(d).
8. Schedules and Exhibits - Amendments.
(a) The following address is added immediately prior to the
heading "Guarantor" in Schedule II.
International Minerals & Chemical (Canada) Limited
c/o IMC Global Inc.
2100 Sanders Road
Northbrook, IL 60062
Attention: Marshall I. Smith
Vice President and Assistant Secretary
Phone: 847-205-4882
Fax: 874-205-4894
(b) The words "International Minerals & Chemical (Canada)
Limited Partnership," are added following the words
"IMC Kalium Canada Ltd.," in the first paragraph of
Exhibit A and Exhibit B.
(c) The words "International Minerals & Chemical (Canada)
Limited Partnership," are added following the words
"IMC Kalium Canada Ltd.," in the second paragraph of
Exhibit C.
(d) The parenthetical following the words "IMC Kalium
Canada Ltd.," in the introductory paragraph of
Exhibit D is deleted and the following substituted
therefor "("IMC Kalium"), International Minerals &
Chemical (Canada) Limited Partnership ("IMC
Partnership" and, collectively with IMC Canada and IMC
Kalium, the "Borrowers")" substituted therefor.
<PAGE>
(e) A signature line for IMC Partnership is inserted
immediately following the signature line for IMC
Kalium in Exhibit D as follows:
(f) "INTERNATIONAL MINERAL & CHEMICAL (CANADA) LIMITED
PARTNERSHIP by its general partner, INTERNATIONAL
MINERALS & CHEMICAL (CANADA) GLOBAL LIMITED
By:
----------------------------------
Name:
Title:
(g) The words "International Minerals & Chemical (Canada)
Limited Partnership," are added following the words
"IMC Kalium Canada Ltd.," in the first paragraph of
Exhibit F-1 and Exhibit F-2.
9. Miscellaneous Amendments.
(a) The words "International Minerals & chemical (Canada)
Limited Partnership" are inserted on the cover page of
the Agreement following the words "IMC Kalium Canada
Ltd."
(b) The words "International Minerals & chemical (Canada)
Limited Partnership" are inserted following the words
"IMC Kalium Canada Ltd.," in the introductory
paragraph on page one of the Agreement.
(c) The words "Joint and Several and" are inserted in
Section 1.6 preceding the heading "Several Liability".
The words "each Borrower hereunder" in Section 1.6 are
deleted and the words:
(d) "IMC Canada and IMC Partnership (collectively, the
"Jointly Liable Borrowers") hereunder shall be joint
and several with respect to the indebtedness and
liability of each other hereunder. The indebtedness
and liability of the Jointly Liable Borrowers and each
of them hereunder (on the one hand) and IMC Kalium
hereunder (on the other hand)"all" are substituted
therefor.
<PAGE>
(e) The word "either" is deleted and the word "any"
substituted therefor preceding the words "of the
Borrower" in Sections 2.1(a) and (b), 2.15(h)(ii),
6.1(a), (b), (d), (g), (i), (l) and (m), 7.4 and 9.5
in the Agreement and in the proviso of the final
paragraph of Section 6.1.
(f) The words "either or both" are deleted from the
parenthetical in the definition of "Acquisition" in
Section 1.1 and the word "any" substituted therefor.
(g) The word "either" is deleted and the word "any"
substituted therefor preceding the words "Borrower of
the Guarantor" in Section 6.3.
(h) The words "Neither" and "either" are deleted from the
introductory language of Section 5.1(i) and the words
"None" and "any", respectively, substituted therefor.
(i) The word "both" is deleted following the word "means"
and preceding the words "of the foregoing" in the
definition of "Borrower" in Section 1.1 and the word
"all" substituted therefor.
(j) The word "both" is deleted from the definition of
"Issuing Bank" in Section 1.1 and the word "all"
substituted therefor.
(k) The word "both" is deleted from clause (i) of
Section 2.1(b) and the word "all" substituted
therefor.
(l) The words, ", a certificate of an Approved Officer of
such Borrower setting forth the details thereof" are
added at the end of Section 5.1(a)(iii) following the
words "Event of Default" and preceding the semi-colon
(";").
10. Representations and Warranties.
(a) IMC Kalium represents and warrants for itself and only
with respect to itself and IMC Canada and IMC
Partnership jointly and severally represent for
themselves and only with respect to themselves that as
of the date hereof and after giving effect hereto:
(i) no Default has occurred and is continuing; and
<PAGE>
(ii) each representation and warranty of the Borrowers
set forth in the Agreement is true and correct as
though made on the date hereof.
(b) IMC Canada and the Guarantor jointly and severally
represent and warrant that the Initial Transaction
and IMC Canada, IMC Partnership and the Guarantor
jointly and severally represent and warrant that the
Subsequent Transaction were, in each case, within the
corporate power of the Partners, have been duly
authorized by all necessary corporate action, require
no action by or in respect of, or filing with, any
governmental boy agency or official (other than those
which have taken place) and do not contravene or
constitute a default under any provision of
applicable law or regulation or of the certificate of
incorporation or by-law of either of the Partners or
the certificate of IMC Partnership or any other
agreement (including any partnership agreement),
judgment, injunction, order, deed or other instrument
brought against either of the Partners or the
Guarantor or any of their respective subsidiaries or
result in the creation of any lien on any asset of
any one of the Partners, the Guarantor or any of
their respective Subsidiaries.
10. Confirmation of Guarantee.
The Guarantor hereby acknowledges the foregoing amendments
to the Original Agreement and hereby expressly confirms
that the guarantee (as amended hereby) provided by the
Guarantor pursuant to Article 9 of the Agreement and the
liability of the Guarantor thereunder remains in full
force and effect notwithstanding the amendments to the
Original Agreement made pursuant hereto. Without, in any
way limiting the foregoing, the Guarantor hereby
acknowledges and confirms that its guarantee extends to
and includes all obligations of IMC Partnership under the
Agreement.
11. Governing Law.
This Amendment shall be governed by and construed in
accordance with the laws of the Province of Ontario and
the federal laws of Canada applicable therein.
<PAGE>
12. Counterparts; Effectiveness.
This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the
same effect as if the signature thereto and hereto were
upon the same instrument. This Amendment shall become
effective as of the date hereof when the Agent shall have
received (i) duly executed counterparts hereof signed by
each of the Borrowers, the Guarantor and the Required
Banks (or, in the case of any party as to which an
executed counterpart shall not have been received, the
Agent shall have received telegraphic, telex or other
written confirmation from such party o execution of a
counterpart hereof by such party) and (ii) an unaudited
pro forma balance sheet of IMC Partnership as of July 31,
1998.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
INTERNATIONAL MINERALS & CHEMICAL (CANADA) GLOBAL LIMITED
By /s/ John Huber
Name: John Huber
Title:
IMC KALIUM CANADA LTD.
By /s/ Rose Marie Williams
Name: Rose Marie Williams
Title:
IMC GLOBAL INC.
By /s/ Rose Marie Williams
Name: Rose Marie Williams
Title:
INTERNATIONAL MINERALS & CHEMICAL (CANADA) LIMITED PARTNERSHIP by its
general partner, INTERNATIONAL MINERALS & CHEMICAL (CANADA) GLOBAL
LIMITED
By /s/ John Huber
Name: John Huber
Title:
<PAGE>
ROYAL BANK OF CANADA,
as Agent
By /s/ Joan Carstairs
Name: Joan Carstairs
Title:
ROYAL BANK OF CANADA,
as Bank
By /s/ Glenn Graves
Name: Glenn Graves
Title:
BANK OF MONTREAL,
as Bank and Co-Agent
By /s/ Ian M. Plester
Name: Ian M. Plester
Title:
FIRST CHICAGO NBD BANK, CANADA
By /s/ T. Thomas Cheng
Name: T. Thomas Cheng
Title:
J.P. MORGAN CANADA,
as Bank and Co-Agent
By /s/ John Maynard
Name: John Maynard
Title:
THE CHASE MANHATTAN BANK OF CANADA
By /s/ Christopher Chan
Name: Christopher Chan
Title:
EXHIBIT 10.63
AMENDMENT NO. 3 TO CANADIAN FIVE-YEAR CREDIT AGREEMENT
AMENDMENT dated as of December 16, 1998 to the Five-Year
Canadian Credit Agreement dated as of December 22, 1997 (as amended by
Amendment No. 1 to Canadian Five-Year Credit Agreement dated as of
March 31, 1998 and Amendment No. 2 to Canadian Five-Year Credit
Agreement dated as of August 31, 1998, the "Agreement") among IMC
Kalium Canada Ltd., International Minerals & Chemical (Canada) Global
Limited and International Minerals & Chemical (Canada) Limited
Partnership (collectively, the "Borrowers"), IMC Global Inc. (the
"Guarantor"), the Banks listed on the signature pages hereof (the
"Banks") and Royal Bank of Canada, as Agent (the "Agent").
W I T N E S S E T H:
WHEREAS, the parties hereto desire to amend the Agreement as
specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise
specifically defined herein, each term used herein which is defined in
the Agreement shall have the meaning assigned to such term in the
Agreement. Each reference to "hereof", "hereunder", "herein" and
"hereby" and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the Agreement
shall from and after the date hereof refer to the Agreement as amended
hereby.
SECTION 2. Amendments to Definitions. Section 1.1 of the
Agreement is amended by inserting, in their appropriate alphabetical
position, the following definitions:
"IMC Inorganic Chemicals Inc." means IMC Inorganic Chemicals
Inc., a Delaware corporation, formerly known as Harris Chemical Group,
Inc.
"PLP" means Phosphate Resource Partners Limited Partnership, a
Delaware limited partnership and its successors.
SECTION 3. Amendment to Borrowings Condition. Section 3.2
of the Agreement is amended by amending and restating subparagraph (d)
thereof in its entirety as follows:
<PAGE>
(d) the fact that the representations and warranties (other
than (i) the representations and warranties set forth in clauses
4.1(d)(ii) and 4.2(b)(ii) in the case of a Borrowing which does not
result in an increase in the sum of the aggregate outstanding principal
amount of the Loans, the aggregate Bankers' Acceptance Obligations and
the aggregate Letter of Credit Liabilities and (ii) the representations
and warranties set forth in clauses 4.1(1) and 4.2(b)(vii) in the case
of any Borrowing after December 3l, 2000) of the Borrowers and the
Guarantor contained in this Agreement shall be true on and as of the
date of such Borrowing or issuance of such Letter of Credit.
SECTION 4. Amendment to Representations and
Warranties.
(a) Article 4 of the Agreement is amended by adding a new Section
4.1(1) immediately after Section 4.1(k) thereof, to read in its
entirety as follows:
4.1(1). Year 2000. Any reprogramming required to permit the
proper functioning, in and following year 2000, of (a) each of the
Borrower's material computer systems and (b) material equipment
containing embedded microchips (including systems and equipment
supplied by others or with which any of the Borrower's systems
interface) and the testing of all such systems and equipment, as so
reprogrammed, will be completed in a timely fashion. The cost to each
Borrower of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to each of the Borrowers
(including, without limitation, reprogramming errors and the failure of
others' systems or equipment) will not result in a Default or Material
Adverse Effect. Except for such of the reprogramming referred to in
the preceding sentence as may be necessary, the computer and management
information systems of each of the Borrowers and their Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for
the term of this Agreement, to be sufficient to permit each of the
Borrowers to conduct its business without Material Adverse Effect.
(b) Article 4 of the Agreement is amended by adding a new Section
4.2(b)(vii) immediately after Section 4.2(b)(vi) thereof, to read in
its entirety as follows:
<PAGE>
4.2(b)(vii). Year 2000. Any reprogramming required to permit
the proper functioning, in and following year 2000, of (a) the
Guarantor's computer systems and (b) equipment containing embedded
microchips (including systems and equipment supplied by others or with
which the Guarantor's systems interface) and the testing of all such
systems and equipment, as so reprogrammed, will be completed in a
timely fashion. The cost to the Guarantor of such reprogramming and
testing and of the reasonably foreseeable consequences of year 2000 to
the Guarantor (including, without limitation, reprogramming errors and
the failure of others' systems or equipment) will not result in a
Default or Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the
Guarantor and its Subsidiaries are and, with ordinary course upgrading
and maintenance, will continue for the term of this Agreement, to be
sufficient to permit the Guarantor to conduct its business without
Material Adverse Effect.
SECTION 5. Amendment to Debt of Subsidiaries Covenant.
Section 5.2(g) of the Agreement is amended and restated in its entirely
as follows:
SECTION 5.2(g). Debt of Subsidiaries. Total Debt of all
Subsidiaries of the Guarantor (excluding Debt (i) of a Subsidiary owing
to the Guarantor, (ii) of a Subsidiary owing to a Substantially-Owned
Consolidated Subsidiary, (iii) of an "Eligible Subsidiary" as defined
in the Guarantor's Credit Agreement, (iv) of PLP in an aggregate
principal amount not exceeding (U.S.) $300,000,000 outstanding on the
Effective Date (but not any refinancing thereof), (v) of Harris
Chemical North America, Inc. and its Subsidiaries arising out of the
Argus Utilities sale-leaseback transaction in an aggregate principal
amount not exceeding (U.S.) $71,000,000, or (vi) of IMC Inorganic
Chemicals Inc., formerly known as Harris Chemical Group, Inc., and its
Subsidiaries in an aggregate principal amount not exceeding
UK50,000,000) will not at any date exceed 25% of Consolidated Net Worth
(calculated as of the last day of the fiscal quarter most recently
ended on or prior to such date). For purposes of this Section any
preferred stock of a Consolidated Subsidiary (other than the Series E
Preferred Stock) held by a Person other than the Guarantor or a
Substantially-Owned Consolidated Subsidiary shall be included, at the
higher of its voluntary or involuntary liquidation value, in the "Debt"
of such Consolidated Subsidiary.
SECTION 6. Representations and Warranties.
<PAGE>
(a) IMC Kalium represents and warrants for itself, and only
with respect to itself, and IMC Canada and IMC Partnership jointly and
severally represent and warrant for themselves, and only with respect
to themselves, that as of the date hereof and after giving effect
hereto:
(i) no Default has occurred and is continuing; and
(ii) each representation and warranty of IMC Kalium and
IMC Canada and IMC Partnership, as applicable, set forth in the
Agreement is true and correct as though made on and as of the date
hereof.
(b) The Guarantor represents and warrants that as of the
date hereof and after giving effect hereto:
(i) no Default has occurred and is continuing; and
(ii) each representation and warranty of the Guarantor
set forth in the Agreement is true and correct on and as of the date
hereof.
SECTION 7. Confirmation of Guarantee. The Guarantor hereby
acknowledges and agrees to the foregoing amendments to the Agreement
and expressly confirms that the guarantee provided by the Guarantor
pursuant to Article 9 of the Agreement and the liability of the
Guarantor thereunder remains in full force and effect notwithstanding
the amendments to the Agreement made pursuant hereto.
SECTION 8. Governing Law. This Amendment shall be governed
by and construed in accordance with the laws of the Province of
Ontario.
SECTION 9. Counterparts; Effectiveness. This Amendment may
be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Amendment shall become effective
as of the date hereof when the Agent shall have received duly executed
counterparts hereof signed by the Borrowers and the Guarantor and the
Required Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Agent shall have received
telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
IMC GLOBAL INC., as Guarantor
By: /s/ E. Paul Dunn, Jr.
Name: E. Paul Dunn, Jr.
Title: Treasurer
ROYAL BANK OF CANADA, as Agent
By: /s/ Joan E. Carstairs
Name: Joan E. Carstairs
Title: Senior Manager
ROYAL BANK OF CANADA, as Bank
By: /s/ Glenn S. Graves
Name: Glenn S. Graves
Title: Senior Account Manager
BANK OF MONTREAL, as Bank and Co-Agent
By: /s/ Ian M. Plester
Name: Ian M. Plester
Title: Director
FIRST CHICAGO NBD BANK, CANADA, as Bank
By: /s/ T. Thomas Cheng
Name: T. Thomas Cheng
Title: First Vice President
J.P. MORGAN CANADA, as Bank and Co-Agent
By: /s/ John Maynard
Name: John Maynard
Title: Vice President and Controller
<PAGE>
THE CHASE MANHATTAN BANK OF CANADA, as Bank
By: /s/ Christine Chan
Name: Christine Chan
Title: Vice President
By: /s/ Ed Sustar
Name: Ed Sustar
Title: Vice President
IMC KALIUM CANADA LTD., as Borrower
By: /s/ Rose Marie Williams
Name: Rose Marie Williams
Title: Secretary
INTERNATIONAL MINERALS & CHEMICAL (CANADA) GLOBAL LIMITED, as Borrower
By: /s/ John U. Huber
Name: John U. Huber
Title: President
INTERNATIONAL MINERALS & CHEMICAL (CANADA) LIMITED PARTNERSHIP, by its
general partner, International Minerals & Chemical (Canada) Global
Limited, as Borrower
By: /s/ John U. Huber
Name: John U. Huber
Title: President
EXHIBIT 10.64
Execution Copy
AMENDMENT NO. 4 TO CANADIAN FIVE-YEAR CREDIT AGREEMENT
AMENDMENT dated as of December 31, 1998 to the Five-Year Canadian
Credit Agreement dated as of December 22, 1997 (as amended by Amendment
No. 1 to Canadian Five-Year Credit Agreement dated as of March 31,
1998, Amendment No. 2 to Canadian Five-Year Credit Agreement dated as
of August 31, 1998 and Amendment No. 3 to Canadian Five-Year Credit
Agreement dated as of December 16, 1998, the "Agreement") among IMC
Kalium Canada Ltd. ("IMC Kalium"), International Minerals & Chemical
(Canada) Global Limited ("IMC Canada") and International Minerals &
Chemical (Canada) Limited Partnership ("IMC Partnership")
(collectively, the "Borrowers"), IMC Global Inc. (the "Guarantor"), the
Banks listed on the signature pages hereof (the "Banks") and Royal Bank
of Canada, as Agent (the "Agent").
WHEREAS the parties hereto desire to amend the Agreement as
specified below;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the sum
of $1.00 now paid by each party to the other party and for other good
and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged) the parties hereto agree as follows:
1. Definitions; References. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference
to "hereof', "hereunder", "herein" and "hereby" and each other similar
reference and each reference to "this Agreement" and each other similar
reference contained in the Agreement shall from and after the date
hereof refer to the Agreement as amended hereby.
2. Amendment of Definition of "Consolidated EBITDA". The following
sentence is added to end of the definition of Consolidated EBITDA in
Section 1. 1 of the Agreement: "For the purpose of calculating the
Leverage Ratio for the purposes of Section 5.2(i) hereunder,
Consolidated EBITDA shall (i) exclude the pre-tax non-recurring charges
not in excess of U.S.$325,000,000 incurred by the Guarantor in, and
reflected in the Guarantor's consolidated statement of income for, the
fiscal year ended December 31, 1998 and (ii) disregard classification
of the Guarantor's Agribusiness unit as a discontinued operation".
<PAGE>
3. Representations and Warranties.
(a) IMC Kalium represents and warrants for itself, and only
with respect to itself, and IMC Canada and IMC Partnership
jointly and severally represent and warrant for themselves,
and only with respect to themselves, that as of the date
hereof and after giving effect hereto:
(b) no Default has occurred and is continuing; and
(c) each representation and warranty of IMC Kalium and IMC
Canada and IMC Partnership, as applicable, set forth in the
Agreement is true and correct as though made on and as of
the date hereof.
(d) The Guarantor represents and warrants that as of the date
hereof and after giving effect hereto.
(e) no Default has occurred and is continuing; and
(f) each representation and warranty of the Guarantor set forth
in the Agreement is true and correct on and as of the date
hereof.
4. Confirmation of Guarantee. The Guarantor hereby acknowledges
and agrees to the foregoing amendments to the Agreement and expressly
confirms that the guarantee provided by the Guarantor pursuant to
Article 9 of the Agreement and the liability of the Guarantor
thereunder remains in full force and effect notwithstanding the
amendments to the Agreement made pursuant hereto.
5. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the Province of Ontario.
6. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
7. Effectiveness. This Amendment shall become effective as of the
date hereof on the date when the following conditions are met (the
"Amendment Effective Date"):
<PAGE>
(a) the Agent shall have received duly executed counterparts
hereof signed by the Borrowers, the Guarantor and the
Required Banks (or, in the case of any party as to which an
executed counterpart shall not have been received, the
Agent shall have received telegraphic, telex or other
written confirmation from such party of execution of a
counterpart hereof by such party); and
(b) the Agent shall have received an amendment fee for the
account of each Bank which shall have signed and delivered
a permanent waiver with respect to this amendment on or
before January 11, 1999, in an amount equal to 0.05% of
such Bank's Commitment on January 11, 1999.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
IMC GLOBAL INC., as Guarantor
By:/s/ E. Paul Dunn, Jr.
Name: E. Paul Dunn, Jr.
Title: Vice President
ROYAL BANK OF CANADA, as Agent
By: /s/ Joan E. Carstairs
Name: Joan E. Carstairs
Title: Senior Manager
ROYAL BANK OF CANADA, as Bank
By: /s/L. J. Irwin
Name: L. J. Irwin
Title:
BANK OF MONTREAL., as Bank and Co-Agent
By: /s/ Ian M. Pfester
Name: Ian M. Pfester
Title:
<PAGE>
FIRST CHICAGO NBD BANK, CANADA, as Bank
By: /s/ George R. Schanz
Name: George R. Schanz
Title: First Vice President
J.P. MORGAN CANADA, as Bank and Co-Agent
By: /s/ John Maynard
Name: John Maynard
Title:
THE CHASE MANHATTAN BANK OF CANADA, as Bank
By: /s/ Christine Chan
Name: Christine Chan
Title:
By: /s/ Arun K. Berry
Name: Arun K. Berry
Title:
IMC KALIUM CANADA LTD., as Borrower
By: /s/ Rose Marie Williams
Name: Rose Marie Williams
Title: Secretary
INTERNATIONAL MINERALS & CHEMICAL (CANADA) GLOBAL LIMITED, as Borrower
By: /s/ John U. Huber
Name: John U. Huber
Title: President
INTERNATIONAL MINERALS & CHEMICAL (CANADA) LIMITED PARTNERSHIP, by its
general partner, International Minerals & Chemical (Canada) Global
Limited, as Borrower
By: /s/ John U. Huber
Name: John U. Huber
Title: President
EXHIBIT 10.68
AMENDMENT NUMBER 2 TO
TRANSFER AND ADMINISTRATION AGREEMENT
AMENDMENT NUMBER 2 TO TRANSFER AND ADMINISTRATION AGREEMENT
(this "Amendment"), dated as of June 26, 1998 among IMC-AGRICO RECEIV-
ABLES COMPANY L.L.C., a Delaware limited liability company as trans-
feror (the "Transferor"), IMC-AGRICO COMPANY, a general partnership
formed under the laws of the State of Delaware, individually and as
Seller (in such capacity the "Seller") and as collection agent (in such
capacity, the "Collection Agent"), and ENTERPRISE FUNDING CORPORATION,
a Delaware corporation (the "Company"), amending that certain Transfer
and Administration Agreement dated as of June 27, 1997 among the
parties hereto, as amended to the date hereof (the "Transfer and Admin-
istration Agreement").
WHEREAS, the Transferor has requested that the Company extend
the Termination Date and subject to the terms and conditions set forth
herein, the Company has agreed to such extension.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. Defined Terms. As used in this Amendment, and
except as otherwise provided in this Section 1, capitalized terms shall
have the same meanings assigned thereto in the Transfer and Administra-
tion Agreement.
SECTION 2. Amendments to Definitions.
(a) Maximum Net Investment. The definition of "Maximum Net
Investment" is hereby deleted and replaced with the following:
"Maximum Net Investment" means (i) from and including June
26, 1998 through but not including June 30, 1998, $60,446,000, (ii)
from and including June 30, 1998 through but not including July 20,
1998, $46,131,000, (iii) from and including July 20, 1998 through but
not including August 8, 1998, $14,524,000, and (iv) on and after August
8, 1998, $0."
(b) Termination Date. Clause (v) of the definition of
"Termination Date" is hereby replaced with the following: "August 4,
1998, unless extended."
<PAGE>
SECTION 3. Amendment to Section 7.1. Clause (j) of Section
7.1 of the Transfer and administration Agreement is hereby amended to
read as follows:
"(j) The face amount of the outstanding Commercial Paper
issued to fund the Net Investment shall exceed the Maximum Net
Investment; or"
SECTION 4. Representations and Warranties. The Transferor
hereby makes to the Company, on and as of the date hereof, all of the
representations and warranties set forth in Section 3.1 of the Transfer
and Administration Agreement, except to the extent that any such
representation or warranty specifically refers to an earlier date. In
addition, the Collection Agent hereby makes to the Company, on the date
hereof, all the representations and warranties set forth in Section 3.2
of the Transfer and Administration Agreement, except to the extent that
any such representation or warranty specifically refers to an earlier
date.
SECTION 5. Limited Scope. This amendment is specific to the
circumstances described above and does not imply any future amendment
or waiver of rights allocated to the Company, the Transferor, the
Collection Agent, IMC Agrico Company, the Seller, the Administrative
Agent or the Collateral Agent under the Transfer and Administration
Agreement.
SECTION 6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Severability; Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall
constitute one and the same instrument. Any provisions of this
Amendment which are prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provi-
sion in any other jurisdiction.
<PAGE>
SECTION 8. Ratification. Except as expressly affected by the
provisions hereof, the Transfer and Administration Agreement as amended
shall remain in full force and effect in accordance with their terms
and ratified and confirmed by the parties hereto. On and after the
date hereof, each reference in the Transfer and Administration
Agreement to "this Agreement", "hereunder", "herein" or words of like
import shall mean and be a reference to the Transfer and Administration
Agreement as amended by this Amendment.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment Number 2 as of the date first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By: /s/ Stewart Cutler
----------------------------
Name: Stewart Cutler
Title: Vice President
IMC-AGRICO RECEIVABLES COMPANY L.L.C.
as Transferor
By: IMC AGRICO COMPANY,
its operating manager
By: IMC AGRICO MP, INC.,
its managing partner
By: /s/ Bob Qualls
----------------------------
Name: Bob Qualls
Title: Vice President
<PAGE>
IMC-AGRICO COMPANY,
individually and as Collection Agent
By: IMC-AGRICO MP, INC.,
its managing partner
By: /s/ Bob Qualls
----------------------------
Name: Bob Qualls
Title: Vice President
EXHIBIT 10.69
BILL OF SALE AND ASSIGNMENT OF ASSETS
In consideration for the cancellation of the Subordinated Note
made by IMC-Agrico Receivables Company L.L.C. ("Transferor") to the
order of IMC-Agrico Company ("Transferee") dated as of June 27, 1997
and with the remainder as a distribution to Transferee as sole member
of Transferor, Transferor does hereby sell, transfer, assign, convey
and deliver to Transferee the "Purchased Assets" (as defined below).
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Receivables Purchase Agreement among
Transferee and Transferor dated as of June 27, 1997, as it may have
been amended from time to time.
For purposes of this Bill of Sale and Assignment of Assets,
"Purchased Assets" shall mean all of Transferor's right, title and
interest in, to and under
(a) all Receivables of Transferor;
(b) all Related Security with respect to such Receivables;
(c) all Collections with respect to, and other proceeds of,
such Receivables and Related Security;
(e) all lock-boxes and lock-box accounts and amounts on
deposit therein, and all related agreements between
Transferor and the lock-box banks, in each case, to the
extent related to or representing Collections of
Receivables sold or contributed hereunder, or other
proceeds thereof or of Related Security therefor and
(f) all books and records relating to the foregoing.
This Bill of Sale and Assignment of Assets shall be binding upon
Transferor, its successors and assigns, and shall inure to the benefit
of Transferee, its successors and assigns.
<PAGE>
IN WITNESS WHEREOF, Transferor has caused this instrument to be duly
executed and delivered as of September 30, 1998.
IMC-AGRICO RECEIVABLES COMPANY L.L.C.,
as Transferor
By: IMC-Agrico Company,
its Operating Manager
By: IMC-Agrico MP, Inc.,
its managing general partner
By: /s/ J. Bradford James
Name: J. Bradford James
Title: Vice President
Agreed and accepted this 30th day of September, 1998:
IMC-AGRICO COMPANY, as Transferee
By: IMC-Agrico MP, Inc., its managing general partner
By: /s/ J. Bradford James
EXHIBIT 10.73
CONFORMED COPY
AMENDMENT NO. 1 TO 364-DAY CREDIT AGREEMENT
AMENDMENT dated as of December 31, 1998 to the 364-Day Credit
Agreement dated as of April 1, 1998 (the "Credit Agreement") among IMC
GLOBAL INC., the BANKS, MANAGING AGENTS and CO-AGENTS listed on the
signature pages thereof, ROYAL BANK OF CANADA, as Documentation Agent,
THE CHASE MANHATTAN BANK and NATIONSBANK, N.A., as Co-Syndication
Agents, BANK OF MONTREAL, as Administrative Agent, and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Senior Managing Agent.
The parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Credit
Agreement has the meaning assigned to such term in the Credit
Agreement. Each reference to "hereof", "hereunder", "herein" and
"hereby" and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the Credit
Agreement shall, after this Amendment becomes effective, refer to the
Credit Agreement as amended hereby.
SECTION 2. Amendment of Section 5.12. Calculations of the Leverage
Ratio shall (i) exclude the pretax nonrecurring charges not in excess
of $325,000,000 incurred by the Company in, and reflected in the
Company's consolidated statement of income for, the fiscal year ended
December 31, 1998 and (ii) disregard classification of the Company's
Agribusiness unit as a discontinued operation.
SECTION 3. Representations of Company. The Company represents and
warrants that (i) the representations and warranties of the Company set
forth in Article 4 of the Credit Agreement will be true on and as of
the Amendment Effective Date and (ii) no Default will have occurred and
be continuing on such date.
SECTION 4. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 5. Counterparts. This Amendment may be signed in any number
of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 6. Effectiveness. This Amendment shall become effective as
of the date hereof on the date when the following conditions are met
(the "Amendment Effective Date"):
<PAGE>
(a) the Senior Managing Agent shall have received from each of
the Borrower and the Required Banks a counterpart hereof signed by such
party or facsimile or other written confirmation (in form satisfactory
to the Administrative Agent) that such party has signed a counterpart
hereof; and
(b) the Senior Managing Agent shall have received an amendment
fee for the account of each Bank which shall have timely signed and
delivered a counterpart hereof in accordance with clause (a) in an
amount equal to 0.02% of such Bank's Commitment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
IMC GLOBAL INC.
By /s/ E. Paul Dunn, Jr.
Title: Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By /s/ Robert Bottamedi
Title: Vice President
THE CHASE MANHATTAN BANK
By /s/ James H. Ramage
Title: Vice President
NATIONSBANK, N.A.
By /s/ G. Burton Queen
Title: Managing Director
ROYAL BANK OF CANADA
By /s/ Gordon MacArthur
Title: Manager
<PAGE>
BANK OF MONTREAL
By /s/ Ian M. Plester
Title: Director
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By /s/ G. Burton Queen
Title: Managing Director
THE BANK OF NEW YORK
By /s/ John M. Lokay, Jr.
Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By /s/ Katherine L. Abbott
Title: First Vice President
By /s/ David Bouhl
Title: F.V.P., Head of Corporate Banking Chicago
CREDIT LYONNAIS CHICAGO BRANCH
By /s/ Julie T. Kanak
Title: Vice President
ABN-AMRO BANK N.V.
By /s/ Scott J. Albert
Title: Vice President
By /s/ Darin P. Fischer
Title: Assistant Vice President
<PAGE>
BANCA NAZIONALE DEL LAVORO, S.p.A., NEW YORK BRANCH
By /s/ Miguel Medida
Title: Vice President
By /s/ Leonardo Valentini
Title: First Vice President
THE BANK OF TOKYO - MITSUBISHI, LTD. CHICAGO BRANCH
By /s/ Hajime Watanabe
Title: Deputy General Manager
BANQUE NATIONALE DE PARIS
By /s/ Arnaud Collin du Bocage
Title: Executive Vice President and General Manager
CREDIT SUISSE FIRST BOSTON
By /s/ Douglas E. Maher
Title: Vice President
By /s/ James P. Moran
Title: Director
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Kenneth J. Fatur
Title: Vice President
FIRST UNION NATIONAL BANK
By /s/ Kristen M. Denning
Title: Assistant Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By /s/ Tohru Yasumaru
Title: Deputy General Manager
<PAGE>
MARINE MIDLAND BANK
By /s/ Steve Trepiccione
Title: Vice President -Officer #9435
MELLON BANK, N.A.
By /s/ John K. Walsh
Title: Vice President
SOCIETE GENERALE
By /s/ Paul Dalle Molle
Title: Managing Director Head of Midwest Region
THE SUMITOMO BANK, LIMITED
By /s/ John H. Kemper
Title: Senior Vice President
TORONTO DOMINION (TEXAS), INC.
By /s/ Carol Brandt
Title: Vice President
THE NORTHERN TRUST COMPANY
By /s/ Michelle M. Teteak
Title: Vice President
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By /s/Armund J. Schoen, Jr.
Title: Senior Vice President
EXHIBIT 10.74
Conformed Copy
HARRIS CHEMCIAL EUROPE LTD
NAMSCO (UK) LTD
SALT UNION LIMITED
Original Borrowers
IMC GLOBAL INC.
IMC INORGANIC CHEMICALS INC.
Guarantors
CHASE MANHATTAN plc
Arranger
CHASE MANHATTAN INTERNATIONAL LIMITED
Agent
And
OTHERS
==================================================================
45,000,000
REVOLVING LOAN AGREEMENT
==================================================================
<PAGE>
CONTENTS
CLAUSE PAGE
1. Definitions And Interpretation 1
2. The Facility 14
3. Utilisation Of The Facility 15
4. Payment And Calculation Of Interest 16
5. Market Disruption And Alternative Interest Rates 16
6. Notification 18
7. Repayment 18
8. Cancellation And Prepayment 18
9. Taxes 19
10. Tax Receipts 21
11. Increased Costs 22
12. Illegality 23
13. Mitigation 23
14. Representations And Warranties 24
15. Covenants 28
16. Events Of Default 37
17. Guarantee And Indemnity 40
18. Commitment Commission And Fees 42
19. Costs And Expenses 43
20. Default Interest And Break Costs 44
21. Borrowers' Indemnities 45
22. Currency Of Account And Payment 46
23. Payments 46
24. Set-Off 47
25. Sharing 47
26. The Agent, The Arranger And The Banks 48
27. Assignments And Transfers 53
28. Economic And Monetary Union 55
29. Calculations And Evidence Of Debt 57
30. Remedies And Waivers, Partial Invalidity 58
31. Notices 58
32. Counterparts 59
33. Amendments 59
34. Additional Borrowers 60
35. Governing Law 60
36. Jurisdiction 60
Schedule 1 The Banks 63
Schedule 2 Form Of Transfer Certificate 64
Schedule 3 Conditions Precedent 67
Schedule 4 Notice Of Drawdown 68
Schedule 5 Determination Of Margin And Commitment
Commission 69
Schedule 6 Deed Of Accession 71
<PAGE>
THIS AGREEMENT is made on 18 December 1998
BETWEEN
(1) HARRIS CHEMICAL EUROPE LTD (registered no. 3107016), NAMSCO
(UK) LTD (registered no. 2654680) and SALT UNION LIMITED
(registered no. 2654529) (each, an "Original Borrower");
(2) IMC GLOBAL INC. and IMC INORGANIC CHEMICALS INC. (formerly
Harris Chemical Group Inc.) (each, a "Guarantor");
(3) CHASE MANHATTAN plc as arranger of the Facility (the
"Arranger");
(4) CHASE MANHATTAN INTERNATIONAL LIMITED as agent for the Banks
(the "Agent"); and
(5) THE BANKS (as defined below).
IT IS AGREED as follows.
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
"Acquisition" means an acquisition by an Obligor or any of
its Consolidated Subsidiaries of a company, a division, a
location or a line of business or of all or substantially all
of the assets of any of the foregoing.
"Advance" means an advance made or to be made by the Banks
hereunder.
"Additional Borrower" means any company which has executed
and delivered to the Agent a Deed of Accession pursuant to
Clause 34 (Additional Borrowers).
"Affiliate" means (i) any person that directly, or indirectly
through one or more intermediaries, controls the Company (a
"Controlling Person") or (ii) any person (other than the
Company or a subsidiary of the Company) which is controlled
by or is under common control with a Controlling Person. As
used herein, the term "control" means possession, directly or
indirectly, of the power to vote 10 per cent. or more of any
class of voting securities of a person or to direct or cause
the direction of the management or policies of a person,
whether through the ownership of voting securities, by
contract or otherwise.
<PAGE>
"Agrico" means IMC-Agrico Company, a Delaware general
partnership.
"Associated Costs Rate" means, in relation to each Advance or
Unpaid Sum, the percentage rate from time to time determined
by the Agent (in its reasonable discretion) as reflecting the
cost, loss or difference in return which would be suffered or
incurred by the Agent (and/or any Bank as it may from time to
time reasonably determine) (if the Agent or any Bank funded
such Advance or Unpaid Sum) as a result of:
(a) funding (at LIBOR and on a match funded basis) any
special deposit or cash ratio deposit required to be
placed with the Bank of England (or any other
authority which replaces all or any of its functions);
and/or
(b) any charge imposed by the Financial Services Authority
(or any other authority which replaces all or any of
its functions),
in respect of Eligible Liabilities (assuming these to be in
excess of any stated minimum) which relate to funding such
Advance or Unpaid Sum.
"Authorised Signatory" means, in relation to an Obligor, any
person who is duly authorised (in such manner as may be
reasonably acceptable to the Agent) and in respect of whom
the Agent has received a certificate signed by a director or
another Authorised Signatory of such Obligor setting out the
name and signature of such person and confirming such
person's authority to act.
"Available Commitment" means, in relation to a Bank at any
time and save as otherwise provided herein, its Commitment at
such time less the aggregate of its portions of the Advances
which are then outstanding, provided that such amount shall
not be less than zero.
"Available Facility" means, at any time, the aggregate amount
of the Available Commitments adjusted, in the case of any
proposed drawdown, so as to take into account:
(a) any reduction in the Commitment of a Bank pursuant to
the terms hereof;
(b) any Advance which, pursuant to any other drawdown, is
to be made; and
<PAGE>
(c) any Advance which is due to be repaid,
on or before the proposed drawdown date.
"Bank" means any financial institution:
(a) named in Schedule 1 (The Banks); or
(b) which has become a party hereto in accordance with
Clause 27.5 (Assignments by Banks) or Clause 27.6
(Transfers by Banks), and which has not ceased to be a
party hereto in accordance with the terms hereof.
"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not
a Plan or a Multiemployer Plan which is maintained or
otherwise contributed to by any member of the ERISA Group.
"Borrower" means each Original Borrower and each Additional
Borrower.
"BoS Cross Guarantee" means the document under which each of
HCEL, NAMSCO (UK) Ltd and Salt Union Limited grant a cross
guarantee to the Bank of Scotland in support of the bank
overdraft facility, in aggregate amount of 4,000,000,
extended to them by the Bank of Scotland.
"Business Day" means a day (other than a Saturday or Sunday)
on which commercial banks generally are open for business in
London and Chicago.
"Commitment" means, in relation to a Bank at any time and
save as otherwise provided herein, the amount set opposite
its name in Schedule 1 (The Banks).
"Company" means IMC Global Inc., a Delaware corporation.
"Consolidated Net Worth" means in relation to an Obligor at
any date, the consolidated shareholders' equity of the
Obligor and its Consolidated Subsidiaries determined as of
such date (other than any amount attributable to stock which
is required to be redeemed or is redeemable at the option of
the holder, if certain events or conditions occur or exist or
otherwise.)
<PAGE>
"Consolidated Subsidiary" means, for any person, at any date
any subsidiary or other entity the accounts of which would be
consolidated with those of such person in its consolidated
financial statements if such statements were prepared as at
such date.
"Debt" of any person means at any date, without duplication,
(i) all obligations of such person for borrowed money, (ii)
all obligations of such person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such person to pay the deferred purchase price
of property or services, except trade accounts payable and
similar items arising in the ordinary course of business,
(iv) all obligations of such person as lessee which are
capitalised in accordance with generally accepted accounting
principles, (v) all non-contingent obligations (and, for
purposes of Clause 15.11 (Negative Pledge) and the definition
of "Material Financial Obligations", all contingent
obligations) of such person to reimburse any bank or other
person in respect of amounts paid under a letter of credit or
similar instrument, (vi) all Debt secured by an Encumbrance
on any asset of such person, whether or not such Debt is
otherwise an obligation of such person, provided that the
amount of such Debt treated as Debt of such person solely
pursuant to this sub-clause (vi) shall not exceed the greater
of the book value or the fair market value of the collateral,
and (vii) all Debt of others guaranteed by such person. For
purposes of sub-clause (v) above, a reimbursement obligation
in respect of a letter of credit or similar instrument is
contingent unless and until there has been a drawing under
such letter of credit or instrument.
"Deed of Accession" means a deed substantially in the form of
Schedule 6 (Deed of Accession).
"Derivatives Obligations" of any person means all obligations
of such person in respect of any rate swap transaction, basis
swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency swap
transaction, currency option or any other similar transaction
(including any option with respect to any of the foregoing
transactions) or any combination of the foregoing
transactions.
<PAGE>
"Eligible Liabilities" means eligible liabilities as defined
under or pursuant to the Bank of England Act 1998 or by the
Bank of England (as may be appropriate) for the time being.
"Encumbrance" means a mortgage, charge, pledge, security
interest, lien or other encumbrance securing any obligation
of any person or any other type of preferential arrangement
(including any title transfer and retention arrangement but
excluding any banker's right of set-off) having a similar
effect.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, regulations, ordinances, rules,
judgements, orders, decrees, permits, concessions, grants,
franchises, licences, agreements or other governmental
restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or
wastes into the environment including ambient air, surface
water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous
substances or wastes.
"ERISA" means at any date, the Employee Retirement Income
Security Act 1974 (US) and the regulations promulgated and
rulings issued thereunder, as the same shall be in effect on
such date.
"ERISA Group" means the Company, any subsidiary and all
members of a controlled group of corporations and all trades
or businesses (whether or not incorporated) under common
control which, together with the Company or any subsidiary,
are treated as a single employer under Section 414 of the
Internal Revenue Code.
"Event of Default" means any circumstance described as such
in Clause 16 (Events of Default).
"Facility" means the sterling revolving loan facility granted
to the Borrowers in this Agreement.
"Facility Office" means in relation to the Agent, the office
identified with its signature below or such other office as
it may select by notice and, in relation to any Bank, the
office notified by it to the Agent in writing prior to the
<PAGE>
date hereof (or, in the case of a Transferee, at the end of
the Transfer Certificate to which it is a party as
Transferee) or such other office as it may from time to time
select by notice to the Agent.
"Final Maturity Date" means the day which is 60 months after
the date hereof.
"Finance Parties" means the Agent, the Arranger and the
Banks.
"Group" means the Company and its subsidiaries from time to
time.
"Guarantee" means any, guarantee, indemnity, bond, letter of
credit, legally binding letter of comfort or suretyship. It
includes any other obligation or irrevocable offer (whatever
called and of whatever nature):
(a) to pay or purchase;
(b) to provide funds (whether by the advance of money,
the purchase of or subscription for shares or other
securities, the purchase of assets, rights or
services, or otherwise) for the payment or discharge
of:
(c) to indemnify against the consequences of default of
the payment of:
(d) to be responsible otherwise for,
an obligation or debt of another person, a dividend,
distribution, capital or premium on shares, stock or other
interests, or the solvency or financial condition of another
person.
"Harris Chemical Acquisition" means, collectively, the merger
of IMC Inorganic Chemicals Inc. with and into IMC Merger Sub
Inc., a wholly-owned subsidiary of the Company, with IMC
Inorganic Chemicals Inc. as the successor thereto, pursuant
to the certain Agreement and Plan of Merger, dated
11 December 1997, by and among the Company, IMC Merger Sub,
Inc. and IMC Inorganic Chemicals Inc., and the acquisition,
directly or indirectly, by the Company of all of the
outstanding shares of Harris Chemical Australia Pty Limited
pursuant to the Sale and Purchase Agreement made as of
<PAGE>
11 December 1997 among Prudential Asset Management Asia
Limited, DGHA persons and Trusts named therein, Search
Investment NV, Harris Chemical Australia Pty Limited,
Marsupial L.L.C., Marsupial-II L.L.C., Soda Ash (L) BHD,
Manager Shareholders named therein and the Company.
"Harris Chemical Europe Group" means HCEL, NAMSCO (UK) Ltd,
Salt Union Limited and any other subsidiary of HCEL from time
to time other than Harris Soda Products (Europe) SAS, Harris
Inorganic Chemicals BV, Societa Chimica Larderello SpA and
Matthes & Weber GmbH.
"HCEL" means Harris Chemical Europe Ltd.
"Information Memorandum" means the document concerning the
Obligors which, at their request and on their behalf, was
prepared in relation to this transaction and distributed by
the Arrangers to selected banks during November 1998.
"Instructing Group" means:
(a) whilst no Advances are outstanding, a Bank or Banks
whose Commitments amount (or, if each Bank's
Commitment has been reduced to zero, did immediately
before such reduction to zero, amount) in aggregate to
more than two thirds of the Total Commitments; and
(b) whilst at least one Advance is outstanding, a Bank or
Banks to whom in aggregate more than two thirds of the
Loan is owed.
"Inter-Company Loans" means, collectively:
(a) that certain Note dated 21 July 1998, issued by Salt
Union Limited to the Company in principal amount of
33,700,000;
(b) that certain Note dated 29 July 1998, issued by Salt
Union Limited to the Company in principal amount of
32,338,356;
(c) that certain Revolving Note dated 27 August 1998,
issued by Salt Union Limited to the Company in
principal amount of 10,000,000;
<PAGE>
(d) that certain Subordinated Revolving Note dated on or
about the date of this Agreement, issued by either
HCEL or Salt Union Limited to the Company in principal
amount of 40,000,000; and
(e) that certain Subordinated Note dated on or about the
date of this Agreement, issued by Salt Union Limited
to the Company in principal amount of 2,559,701.58.
"LIBOR" means, in relation to any amount owed by an Obligor
hereunder on which interest for a given period is to accrue:
(a) the percentage rate per annum equal to the offered
quotation which appears on the page of the Telerate
Screen which displays an average British Bankers
Association Interest Settlement Rate for sterling
(being currently "3750") or the currency of any Unpaid
Sum for such period at or about 11.00 a.m. on the
Quotation Date for such period or, if such page or
such service shall cease to be available, such other
page or such other service for the purpose of
displaying an average British Bankers Association
Interest Settlement Rate for sterling (or the currency
of such Unpaid Sum) as the Agent, after consultation
with the Banks and with the approval of the Company
(not to be unreasonably withheld or delayed), shall
select; or
(b) if no quotation for sterling (or the currency of such
Unpaid Sum) and the relevant period is displayed and
the Agent has not selected an alternative service on
which a quotation is displayed, the arithmetic mean
(rounded upwards to four decimal places) of the rates
(as notified to the Agent) at which each of the
Reference Banks was offering to prime banks in the
London Interbank Market deposits in sterling (or the
currency of such Unpaid Sum) for such period at or
about 11.00 a.m. on the Quotation Date for such
period.
"Loan" means the aggregate principal amount for the time
being outstanding hereunder.
"Margin" means the rate calculated in accordance with
Schedule 5 (Determination of Margin and Commitment
Commission).
<PAGE>
"Material Adverse Effect" means a material adverse effect on
(a) the business, financial position or results of operations
of the Group taken as a whole; (b) the ability of an Obligor
to perform its obligations under this Agreement; or (c) the
validity or enforceability of this Agreement or the rights or
remedies of any Finance Party hereunder.
"Material Financial Obligations" means:
(a) in relation to the Guarantors, a principal or face
amount of Debt and/or payment or collateralisation
obligations in respect of Derivatives Obligations of
the Guarantors and/or one or more of their
subsidiaries, arising in one or more related or
unrelated transactions, exceeding in the aggregate
$100,000,000 (or its equivalent); and
(b) in relation to the Harris Chemical Europe Group, a
principal or face amount of Debt and/or payment or
collateralisation obligations in respect of
Derivatives Obligations of the Harris Chemical Europe
Group, arising in one or more related or unrelated
transactions, exceeding in the aggregate $8,000,000
(or its equivalent).
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $100,000,000.
"Material Subsidiary" means, at any date:
(a) any subsidiary having (i) at least 5 per cent of the
total consolidated assets of the Group (determined as
of the last day of the fiscal quarter of such person
most recently ended on or prior to such date) or (ii)
at least 5 per cent of Consolidated EBITDA for four
consecutive fiscal quarters most recently ended on or
prior to such date; or
(b) collectively, any one or more subsidiaries having (i)
at least 10 per cent. of the total consolidated assets
of the Group (determined as of the last day of the
fiscal quarter of such persons most recently ended on
or prior to such date) or (ii) at least 10 per cent of
Consolidated EBITDA for four consecutive fiscal
quarters most recently ended on or prior to such date.
<PAGE>
For the purposes of this definition, the term "Consolidated
EBITDA" shall have the meaning given to it in sub-clause
15.13.2 of Clause 15.13 (Leverage Ratio).
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of
ERISA to which any member of the ERISA Group either (i) is
then making or accruing an obligation to make contributions
or (ii) has within the preceding five plan years made
contributions, including for these purposes any person which
was at the time such contribution was made a member of the
ERISA Group.
"Notice of Drawdown" means a notice substantially in the form
set out in Schedule 4 (Notice of Drawdown).
"Obligor" means each Borrower and each Guarantor.
"Obligors' Representations and Warranties" means in relation
to each Obligor other than the Company, the representations
and warranties set out in Clauses 14.2 (Corporate and
Governmental Authorisation), 14.3 (Binding Effect), 14.4.4,
14.6 (Compliance with Laws), 14.9 (Existence and Corporate
Power of Obligors) and Clauses 14.12 (Year 2000) to 14.16 (No
Deduction or Withholding), inclusive.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title
IV of ERISA or subject to the minimum funding standards under
Section 412 of the Internal Revenue Code and either (i) is
maintained, or contributed to, by any member of the ERISA
Group for employees of any member of the ERISA Group or (ii)
has at any time within the preceding five years been
maintained, or contributed to, by any person which was at
such time a member of the ERISA Group for employees of any
person which was at such time a member of the ERISA Group.
"Potential Event of Default" means any event which shall have
occurred and be continuing and which is reasonably likely to
become (with the passage of time, the giving of notice, the
making of any determination hereunder or any combination
thereof) an Event of Default.
<PAGE>
"Proportion" means, in relation to a Bank:
(a) whilst no Advances are outstanding, the proportion
borne by its Commitment to the Total Commitments (or,
if the Total Commitments are then zero, by its
Commitment to the Total Commitments immediately prior
to their reduction to zero); or
(b) whilst at least one Advance is outstanding, the
proportion borne by its share of the Loan to the Loan.
"Qualifying Lender" means:
(a) a bank or financial institution which is entitled to
receive payments of interest hereunder free of
withholding or deduction for or on account of United
Kingdom tax under Section 349(3)(a) of the Income and
Corporation Taxes Act 1988; or
(b) a Treaty Lender.
"Quotation Date" means, in relation to any period for which
an interest rate is to be determined hereunder, the day on
which quotations would ordinarily be given by prime banks in
the London Interbank Market for deposits in sterling (or the
currency of any Unpaid Sum) for delivery on the first day of
that period, provided that, if, for any such period,
quotations would ordinarily be given on more than one date,
the Quotation Date for that period shall be the last of those
dates.
"Reference Banks" means the principal London offices of The
Chase Manhattan Bank, Midland Bank plc and Lloyds Bank Plc or
such banks as may be appointed as such by the Agent with the
approval of the Company (not to be unreasonably withheld or
delayed).
"Repayment Date" means, in relation to any Advance, the last
day of its Term.
"Repeated Representations" means:
(a) in relation to the Company, each of the
representations (except, in relation to a Rollover
Advance, the representation set out in sub-clauses
14.4.3 of Clause 14.4 (Financial Information)) set out
in Clause 14.1 (Corporate Existence and Power) to
Clause 14.12 (Year 2000), inclusive; and
<PAGE>
(b) in relation to each other Obligor, each of the
representations set out in Clauses 14.2 (Corporate and
Governmental Authorisation), 14.3 (Binding Effect),
14.4.4, 14.6 (Compliance with Laws), 14.9 (Existence
and Corporate Power of Other Obligors) and 14.12 (Year
2000).
"Rollover Advance" means an Advance which is used to
refinance a maturing Advance and which is in the same amount
as such maturing Advance and is to be drawn on the day such
maturing Advance is to be repaid.
"Subordination Deed" means the document of that name dated on
or before the date of this Agreement between the Company,
HCEL, Salt Union Limited and the Agent.
"Substantial Assets" means, in relation to a Guarantor or the
Harris Chemical Europe Group, assets sold or otherwise
disposed of in a single transaction or a series of related
transactions representing 25 per cent. or more of the
consolidated assets of the Guarantor and its Consolidated
Subsidiaries (taken as a whole), or the Harris Chemical
Europe Group (as the case may be).
"Term" means, save as otherwise provided herein:
(a) in relation to any Advance, the period for which such
Advance is borrowed as specified in the Notice of
Drawdown relating thereto; and
(b) in relation to an Unpaid Sum, any of those periods
mentioned in Clause 20.1 (Default Interest Periods).
"Total Commitments" means, at any time, the aggregate of the
Banks' Commitments.
"Transfer Certificate" means a certificate substantially in
the form set out in Schedule 2 (Form of Transfer Certificate)
signed by a Bank and a Transferee under which:
(a) such Bank seeks to procure the transfer to such
Transferee of all or a part of such Bank's rights,
benefits and obligations hereunder upon and subject to
the terms and conditions set out in Clause 27.3
(Assignments and Transfers by Banks); and
<PAGE>
(b) such Transferee undertakes to perform the obligations
it will assume as a result of delivery of such
certificate to the Agent as contemplated in
Clause 27.6 (Transfers by Banks).
"Transfer Date" means, in relation to any Transfer
Certificate, the date for the making of the transfer as
specified in such Transfer Certificate.
"Transferee" means a person to which a Bank seeks to transfer
by novation all or part of such Bank's rights, benefits and
obligations hereunder.
"Treaty Lender" means a bank or financial institution which
is resident (as such term is defined in the appropriate
double taxation treaty) in a country with which the United
Kingdom has an appropriate double taxation treaty giving
residents of that country complete exemption from United
Kingdom tax on interest and which does not carry on business
in the United Kingdom at or through a permanent establishment
with which the interest is paid is effectively connected.
For the purpose of this definition, "double taxation treaty"
means any convention or agreement between the government of
the United Kingdom and any other government for the avoidance
of double taxation and the prevention of fiscal evasion with
respect to taxes on income and capital gains.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all
benefit liabilities under such Plan, determined on a plan
termination basis using the assumptions prescribed by the
PBGC for purposes of Section 4044 of ERISA (or other
applicable standard), exceeds (ii) the fair market value of
all Plan assets allocable to such liabilities under Title IV
of ERISA (excluding any accrued but unpaid contributions),
all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess represents
a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including
the States and District of Columbia, but excluding its
territories and possessions.
<PAGE>
"Unpaid Sum" means the unpaid balance of any of the sums
referred to in Clause 20.1 (Default Interest Periods).
"Voting Stock" means capital stock issued by a corporation,
or equivalent interests in any other person, the holders of
which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons
performing similar functions) of such person, even if the
right so to vote has been suspended by the happening of such
a contingency.
1.2 Interpretation
Any reference in this Agreement to:
"continuing", in relation to an Event of Default, shall be
construed as a reference to an Event of Default which has not
been waived in accordance with the terms hereof and, in
relation to a Potential Event of Default, one which has not
been remedied within the relevant grace period or waived in
accordance with the terms hereof;
a "Guarantor and its subsidiaries" shall be construed as a
reference to the Guarantor and each of its subsidiaries from
time to time other than any member of the Harris Chemical
Europe Group;
a "holding company" of a company or corporation shall be
construed as a reference to any company or corporation of
which the first-mentioned company or corporation is a
subsidiary;
"indebtedness" shall be construed so as to include any
obligation (whether incurred as principal or as surety) for
the payment or repayment of money, whether present or future,
actual or contingent;
a "law" shall be construed as any law (including common or
customary law), statute, constitution, decree, judgement,
treaty, regulation, directive, by-law, order or any other
legislative measure of any government, supranational, local
government, statutory or regulatory body or court;
a "month" is a reference to a period starting on one day in a
calendar month and ending on the numerically corresponding
day in the next succeeding calendar month save that:
<PAGE>
(a) if any such numerically corresponding day is not a
Business Day, such period shall end on the immediately
succeeding Business Day to occur in that next
succeeding calendar month or, if none, it shall end on
the immediately preceding Business Day; and
(b) if there is no numerically corresponding day in that
next succeeding calendar month, that period shall end
on the last Business Day in that next succeeding
calendar month,
(and references to "months" shall be construed accordingly);
a "person" shall be construed as a reference to any person,
firm, company, corporation, government, state or agency of a
state or any association or partnership (whether or not
having separate legal personality) of two or more of the
foregoing;
"repay" (or any derivative form thereof) shall, subject to
any contrary indication, be construed to include "prepay"
(or, as the case may be, the corresponding derivative form
thereof);
a "subsidiary" of a company or corporation shall be construed
as a reference to any company or corporation:
(a) which is controlled, directly or indirectly, by the
first-mentioned company or corporation;
(b) more than half the issued share capital of which is
beneficially owned, directly or indirectly, by the
first-mentioned company or corporation; or
(c) which is a subsidiary of another subsidiary of the
first-mentioned company or corporation,
and, for these purposes, a company or corporation shall be
treated as being controlled by another if that other company
or corporation is able to direct its affairs and/or to
control the composition of its board of directors or
equivalent body;
<PAGE>
a "successor" shall be construed so as to include an assignee
or successor in title of such party and any person who under
the laws of its jurisdiction of incorporation or domicile has
assumed the rights and obligations of such party under this
Agreement or to which, under such laws, such rights and
obligations have been transferred;
"tax" shall be construed so as to include any tax, levy,
impost, duty or other charge of a similar nature (including
any penalty or interest payable in connection with any
failure to pay or any delay in paying any of the same);
"VAT" shall be construed as a reference to value added tax
including any similar tax which may be imposed in place
thereof from time to time;
a "wholly-owned subsidiary" of a company or corporation shall
be construed as a reference to any company or corporation
which has no other members except that other company or
corporation and that other company's or corporation's
wholly-owned subsidiaries or persons acting on behalf of that
other company or corporation or its wholly-owned
subsidiaries; and
the "winding-up", "dissolution" or "administration" of a
company or corporation shall be construed so as to include
any equivalent or analogous proceedings under the law of the
jurisdiction in which such company or corporation is
incorporated or any jurisdiction in which such company or
corporation carries on business including the seeking of
liquidation, winding-up, reorganisation, dissolution,
administration, arrangement, adjustment, protection or relief
of debtors.
1.3 Currency Symbols
"sterling" denotes lawful currency of the United Kingdom
and "$" and "dollars" denote the lawful currency of
the United States.
1.4 Agreements and Statutes
Any reference in this Agreement to:
1.4.1 this Agreement or any other agreement or document
shall be construed as a reference to this Agreement
or, as the case may be, such other agreement or
document as the same may have been, or may from time
to time be, amended, varied, novated or supplemented;
<PAGE>
1.4.2 a statute or to a provision of a statute shall be
construed as a reference to a modification or re-
enactment of it, a legislative provision substituted
for it and a regulation or statutory instrument
issued under it; and
1.4.3 a treaty shall be construed as a reference to it as
modified from time to time.
1.5 Headings
Clause and Schedule headings are for ease of reference only.
1.6 Time
Any reference in this Agreement to a time of day shall,
unless a contrary indication appears, be a reference to
London time.
1.7 Parts of Speech
Where:
1.7.1 a word or phrase is defined, its other grammatical
forms have a corresponding meaning; and
1.7.2 anything is mentioned after "include", "includes" or
"including", it does not limit what else might be
included.
1.8 Accounting Terms and Determinations
1.8.1 In relation to each Obligor and save as provided
herein:
(a) all accounting terms used herein shall be
interpreted;
(b) all accounting determinations hereunder shall
be made; and
(c) all financial statements required to be
delivered hereunder shall be prepared in
accordance with,
generally accepted accounting principles as in effect
from time to time in the place of incorporation of
the relevant Obligor (and any jurisdiction in which
it carries on business), applied on a basis
consistent in all material respects (except for
<PAGE>
changes agreed with the Obligor's auditor) with the
most recent audited (and consolidated where
applicable) financial statements of the Obligor and
its Consolidated Subsidiaries.
1.8.2 If at any time an Obligor notifies the Agent that it wishes
to amend any covenant in Clause 15 (Covenants) to eliminate
the effect of any change in generally accepted accounting
principles in its place of incorporation (and any
jurisdiction in which it carries on business) on the
operation of such covenant (or if the Agent notifies an
Obligor that an Instructing Group wishes to amend Clause 15
(Covenants) for such purpose), then the relevant Obligor's
compliance with such covenant shall be determined on the
basis of generally accepted accounting principles in effect
immediately before the relevant change in generally accepted
accounting principles became effective, until either:
(a) such notice is withdrawn; or
(b) such covenant is amended in a manner
satisfactory to the Obligor and the
Instructing Group,
and the parties hereto agree to enter into
negotiations in good faith in order to amend
such provisions in a credit-neutral manner so
as to reflect equitably such changes with the
desired result that the criteria for
evaluating the financial condition and
performance of the relevant Obligor and its
Consolidated Subsidiaries shall be the same
after such changes as if such changes had not
been made.
1.9 Parties
A reference to a party to this Agreement or any other
document includes that person's successors and permitted
substitutes and assigns.
1.10 Economic and Monetary Union Definitions
In Clause 28 (Economic and Monetary Union) and in each other
provision of this Agreement to which reference is made in
Clause 28 (Economic and Monetary Union) expressly or
impliedly:
<PAGE>
"Commencement Date" means the date of commencement of the
third stage of EMU (at the date of this Agreement expected to
be 1 January 1999) or on which circumstances arise which (in
the opinion of an Instructing Group) have substantially the
same effect and result in substantially the same consequences
as commencement of the third stage of EMU as contemplated by
the Treaty on European Union.
"EMU" means Economic and Monetary Union as contemplated in
the Treaty on European Union.
"EMU legislation" means legislative measures of the European
Council for the introduction of, changeover to or operation
of a single or unified European currency (whether known as
the euro or otherwise), being in part the implementation of
the third stage of EMU.
"euro" means the single currency of participating member
states of the European Union.
"euro unit" means the currency unit of the euro.
"national currency unit" means the unit of currency (other
than a euro unit) of a participating member state.
"participating member state" means each state so described in
any EMU legislation.
"Treaty on European Union" means the Treaty of Rome of 25
March 1957, as amended by the Single European Act 1986 and
the Maastricht Treaty (which was signed at Maastricht on 7
February 1992 and came into force on 1 November 1993).
2. THE FACILITY
2.1 Grant of the Facility
The Banks grant to the Borrowers, upon the terms and subject
to the conditions hereof, a sterling revolving loan facility
in an aggregate principal amount, save as provided herein, of
up to 45,000,000.
2.3 Purpose and Application
The Facility is intended for general corporate purposes,
including repayment of the Inter-Company Loans (subject to
Clause 15.17 (Subordination of Inter-Company Loans)) and any
bank overdraft facility. Accordingly, each Borrower shall
apply all amounts raised by it hereunder in or towards
<PAGE>
satisfaction of its general corporate financing requirements
including the refinancing of the Inter-Company Loans. No
Finance Party shall be obliged to concern itself with such
application.
2.4 Conditions Precedent
Save as the Banks may otherwise agree, no Borrower may
deliver any Notice of Drawdown unless the Agent has confirmed
to the Borrowers and the Banks that it has received all of
the documents and other evidence listed in Schedule 3
(Conditions Precedent) and that each is, in form and
substance, reasonably satisfactory to the Agent.
2.5 Banks' Obligations Several
The obligations of each Bank are several and the failure by a
Bank to perform its obligations hereunder shall not affect
the obligations of an Obligor towards any other party hereto
nor shall any other party be liable for the failure by such
Bank to perform its obligations hereunder.
2.6 Banks' Rights Several
The rights of each Bank are several and any debt arising
hereunder at any time from an Obligor to any of the other
parties hereto shall be a separate and independent debt.
Each such party shall be entitled to protect and enforce its
individual rights arising out of this Agreement independently
of any other party (so that it shall not be necessary for any
party hereto to be joined as an additional party in any
proceedings for this purpose).
3. UTILISATION OF THE FACILITY
3.1 Delivery of Notice of Drawdown
Each Borrower may from time to time request the making of an
Advance by the delivery to the Agent, by 10 a.m. not more
than ten nor less than two Business Days before the proposed
date for the making of such Advance, of a completed Notice of
Drawdown.
3.2 Drawdown Details
Each Notice of Drawdown delivered to the Agent pursuant to
Clause 3.1 (Delivery of Notice of Drawdown) shall specify:
3.2.1 the proposed date for the making of the Advance
requested, which shall be a Business Day falling one
month or more before the Final Maturity Date;
<PAGE>
3.2.2 the amount of the Advance requested, which shall be
(a) (if less than the Available Facility) a minimum
amount of 3,000,000 and an integral multiple of
1,000,000 or (b) equal to the amount of the
Available Facility;
3.2.3 the proposed Term of the Advance requested, which
shall be a period of one, two, three or six months or
such other period as the Banks may agree ending on or
before the Final Maturity Date; and
3.2.4 the account to which the proceeds of the proposed
drawdown are to be paid.
3.3 Drawdown Conditions
If a Borrower requests an Advance in accordance with the
preceding provisions of this Clause 3 and, on the proposed
date for the making of such Advance:
3.3.1 (save in relation to a Rollover Advance) neither of
the events mentioned in sub-clauses 5.1.1 and 5.1.2
of Clause 5.1 (Market Disruption) shall have
occurred;
3.3.2 such Advance will not exceed the Available Facility
on that date or on the date on which the Term of such
Advance is due to expire; and
3.3.3 on and as of the proposed date for the making of such
Advance (i) no Event of Default or (save in relation
to a Rollover Advance) Potential Event of Default is
continuing and (ii) the Repeated Representations are
true in all material respects,
then, save as otherwise provided herein, such Advance will be
made in accordance with the provisions hereof.
3.4 Each Bank's Participation
Each Bank will participate through its Facility Office in
each Advance made pursuant to this Clause 3 in the proportion
borne by its Available Commitment to the Available Facility
immediately prior to the making of that Advance.
<PAGE>
3.5 Reduction of Available Commitment
If a Bank's Commitment is reduced in accordance with the
terms hereof after the Agent has received the Notice of
Drawdown for an Advance and such reduction was not taken into
account in the Available Facility, then the amount of that
Advance shall be reduced accordingly.
4. PAYMENT AND CALCULATION OF INTEREST
4.1 Payment of Interest
On the Repayment Date relating to each Advance (and, if the
Term of such Advance exceeds six months, on the expiry of
each period of six months during such Term) the relevant
Borrower shall pay accrued interest on that Advance.
4.2 Calculation of Interest
The rate of interest applicable to an Advance from time to
time during its Term shall be the rate per annum which is the
sum of the Margin at such time, the Associated Costs Rate at
such time and LIBOR on the Quotation Date therefor.
5. MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES
5.1 Market Disruption
If, in relation to any Advance or Unpaid Sum:
5.1.1 LIBOR is to be determined by reference to Reference
Banks and at or about 11.00 a.m. on the Quotation Date
for the relevant Term none or only one of the
Reference Banks supplies a rate for the purpose of
determining LIBOR for the relevant Term; or
5.1.2 before the close of business in London on the
Quotation Date for such Advance or Unpaid Sum the
Agent has been notified by a Bank or each of a group
of Banks to whom in aggregate fifty per cent. or more
of such Advance if made would be owed (or such Unpaid
Sum is owed) that, due to circumstances affecting the
London Interbank Market generally, the LIBOR rate does
not accurately reflect the cost of funding its
participation in such Advance or Unpaid Sum,
<PAGE>
then, the Agent shall notify the other parties hereto of such
event and, notwithstanding anything to the contrary in this
Agreement, Clause 5.2 (Substitute Term and Interest Rate)
shall apply to such Advance (if it is a Rollover Advance) or
Unpaid Sum. If sub-clause 5.1.1 or 5.1.2 of this Clause 5.1
applies to a proposed Advance, such Advance other than a
Rollover Advance shall not be made.
5.2 Substitute Term and Interest Rate
If sub-clause 5.1.1 of Clause 5.1 (Market Disruption) applies
to a Rollover Advance, the duration of the relevant Term
shall be one month or, if less, such that it shall end on the
Final Maturity Date. If either sub-clause 5.1.1 or 5.1.2 of
Clause 5.1 (Market Disruption) applies to a Rollover Advance
or an Unpaid Sum, the rate of interest applicable to such
Rollover Advance or Unpaid Sum during the relevant Term shall
(subject to any agreement reached pursuant to Clause 5.3
(Alternative Rate)) be the rate per annum which is the sum
of:
5.2.1 the Margin at such time;
5.2.2 the Associated Costs Rate at such time; and
5.2.3 the rate per annum notified to the Agent by such Bank
before the last day of such Term to be that which
expresses as a percentage rate per annum the cost to
such Bank of funding from whatever sources it may
reasonably select its portion of such Rollover
Advance or Unpaid Sum during such Term.
5.3 Alternative Rate
If (a) either of those events mentioned in sub-clauses 5.1.1
and 5.1.2 of Clause 5.1 (Market Disruption) occurs in
relation to an Advance or Unpaid Sum or (b) by reason of
circumstances affecting the London Interbank Market during
any period of three consecutive Business Days LIBOR is not
available for sterling to prime banks in the London Interbank
Market, then if the Agent or a Borrower so requires, the
Agent and the Borrower shall enter into negotiations with a
view to agreeing a substitute basis:
5.3.1 for determining the rates of interest from time to
time applicable to the Advances and Unpaid Sums;
and/or
<PAGE>
5.3.2 upon which the Advances and Unpaid Sums may be
maintained (whether in sterling or some other
currency) thereafter and any such substitute basis
that is agreed shall take effect in accordance with
its terms and be binding on each party hereto,
provided that the Agent may not agree any such substitute
basis without the prior consent of each Bank.
5.4 Consultation with Borrowers
During any period in which interest rates are determined in
accordance with this Clause 5, the Agent shall consult with
the Borrowers on at least a weekly basis with a view to
calculating interest rates in accordance with Clause 4.2
(Calculation of Interest) as soon as possible.
6. NOTIFICATION
6.1 Advances and Term
By 12 p.m. not less than two Business Days before an Advance
is to be made, the Agent shall notify each Bank of the
proposed amount of the relevant Advance, its proposed Term
and the aggregate principal amount of the relevant Advance
allocated to such Bank pursuant to Clause 3.4 (Each Bank's
Participation).
6.2 Interest Rate Determination
The Agent shall promptly notify the Borrowers and the Banks
of each determination of LIBOR, the Associated Costs Rate and
the Margin.
6.3 Changes to Interest Rates
The Agent shall promptly notify the Borrowers and the Banks
of any change in interest rate or Term occasioned by the
operation of Clause 5 (Market Disruption and Alternative
Interest Rates).
7. REPAYMENT
Each Borrower shall repay each Advance made to it in full on
the Repayment Date relating thereto.
8. CANCELLATION AND PREPAYMENT
<PAGE>
8.1 Cancellation at Option of Borrowers
The Borrowers may, by giving to the Agent not less than ten
Business Days' prior notice to that effect, cancel the whole
or any part (being a minimum amount of 3,000,000 and an
integral multiple of 1,000,000) of the Available Facility.
Any such cancellation shall reduce the Available Commitment
and the Commitment of each Bank rateably. No amount of the
Available Facility so cancelled may be reinstated.
8.2 Notice of Cancellation
Any notice of cancellation given by a Borrower pursuant to
Clause 8.1 (Cancellation at Option of Borrowers) shall be
irrevocable and shall specify the date upon which such
cancellation is to be made and the amount of such
cancellation.
8.3 Cancellation of a Bank's Commitment
If:
8.3.1 any sum payable to any Bank is required to be
increased pursuant to Clause 9.1 (Tax Gross-up);
8.3.2 any Bank claims indemnification from any Borrower
under Clause 9.2 (Tax Indemnity) or Clause 11.1
(Increased Costs); or
8.3.3 such Borrower is required to treat any payment of
interest to a Bank as a distribution for tax
purposes,
such Borrower may, whilst such circumstance continues, by not
less than ten Business Days' prior notice to the Agent (which
notice shall be irrevocable), cancel such Bank's Commitment
whereupon such Bank shall cease to be obliged to participate
in further Advances and its Commitment shall be reduced to
zero.
8.4 Prepayment of a Bank's Commitment
If a Borrower gives notice pursuant to Clause 8.3
(Cancellation of a Bank's Commitment), it shall, at the time
such notice expires prepay the relevant Bank's portion of all
outstanding Advances together with accrued interest thereon
and all other amounts owing to such Bank hereunder.
8.5 No Other Repayments
The Borrowers shall not repay all or any part of any Advance
except at the times and in the manner expressly provided
herein.
<PAGE>
8.6 Mandatory Cancellation
The aggregate Commitments hereunder shall reduce
automatically:
8.6.1 to 37,500,000 on the day which is 36 months after
the date hereof; and
8.6.2 to 25,000,000 on the day which is 48 months after
the date hereof,
and each Bank's Commitment shall be reduced rateably.
9. TAXES
9.1 Tax Gross-up
All payments to be made by an Obligor to any Finance Party
hereunder shall be made free and clear of and without
deduction for or on account of tax unless such Obligor is
required to make such a payment subject to the deduction or
withholding of tax, in which case the sum payable by such
Obligor (in respect of which such deduction or withholding is
required to be made) shall be increased to the extent
necessary to ensure that such Finance Party receives a sum
net of any deduction or withholding equal to the sum which it
would have received had no such deduction or withholding been
made or required to be made.
9.2 Tax Indemnity
Without prejudice to Clause 9.1 (Tax Gross-up), if any
Finance Party is required to make any payment of or on
account of tax on or in relation to any sum received or
receivable hereunder or if any liability in respect of any
such payment is asserted, imposed, levied or assessed against
any Finance Party, the Borrowers shall, upon demand of the
Agent, promptly indemnify the Finance Party which suffers a
loss or liability as a result against such payment or
liability, together with any interest, penalties, costs and
reasonable expenses payable or incurred in connection
therewith, provided that this Clause 9.2 shall not apply to:
9.2.1 any tax imposed on and calculated by reference to the
net income actually received or receivable by such
Finance Party by the jurisdiction in which such
Finance Party is incorporated; or
<PAGE>
9.2.2 any tax imposed on and calculated by reference to the
net income of the Facility Office of such Finance
Party actually received or receivable by such Finance
Party by the jurisdiction in which its Facility
Office is located.
9.3 Banks' Tax Status Confirmation
Each Bank confirms in favour of the Agent on the date hereof
or, in the case of a Bank which becomes a party hereto
pursuant to a transfer or assignment, on the date on which
the relevant transfer or assignment becomes effective, that
either:
9.3.1 it is not resident for tax purposes in the United
Kingdom and is beneficially entitled to its share of
the Loan and the interest thereon; or
9.3.2 it is a bank as defined for the purposes of Section
349 of the Income and Corporation Taxes Act 1988 and
is beneficially entitled to its share of the Loan and
the interest thereon,
and each Bank shall promptly notify the Agent if there is any
change in its position from that set out above.
9.4 Status as Qualifying Lender
Each Bank represents to each Borrower on the date hereof, or
in the case of a Bank which becomes a party hereto pursuant
to a transfer or assignment, on the date on which the
relevant transfer or assignment becomes effective, that it is
a Qualifying Lender.
9.5 Cessation of Status as Qualifying Lender
If at any time after the date of this Agreement any Bank
ceases, or becomes aware that it will cease, to be a
Qualifying Lender for any reason, it shall promptly notify
each Borrower, and no Obligor shall be liable to pay to such
Bank under Clause 9.1 (Tax Gross-up) or 9.2 (Tax Indemnity)
any amount in excess of the amount it would have been obliged
to pay if such Bank had not ceased to be a Qualifying Lender
provided that this Clause 9.5 shall not apply and no Obligor
shall be obliged to comply with its obligations under
Clauses 9.1 (Tax Gross-up) and 9.2 (Tax Indemnity) if after
the date hereof:
<PAGE>
9.5.1 there shall have been any change in, or in the
interpretation or application of, any relevant law or
the practice of the United Kingdom Inland Revenue and
as a result thereof a Bank ceases to be a Qualifying
Lender; and/or
9.5.2 a Bank has transferred its Facility Office outside of
the United Kingdom at the request of a Borrower
pursuant to Clause 13 (Mitigation).
9.6 Treaty Lenders
Each Treaty Lender will submit such claim to the appropriate
authorities (together with such forms, papers, other
documents and/or evidence as necessary) as may be required
for a Borrower which is incorporated in the United Kingdom
and resident in the United Kingdom for tax purposes, to
receive a direction from the United Kingdom Inland Revenue to
make payment of interest to such Treaty Lender free of
withholding or deduction on account of United Kingdom tax.
9.7 Claims by Banks
A Bank intending to make a claim pursuant to Clause 9.2 (Tax
Indemnity) shall notify the Agent of the event or
circumstance giving rise to the claim giving reasonable
detail of such event or circumstance, whereupon the Agent
shall notify the Borrowers thereof provided that nothing
herein shall require any Bank to disclose any confidential
information relating to the organisation of its affairs.
10. TAX RECEIPTS
10.1 Notification of Requirement to Deduct Tax
If, at any time, an Obligor is required by law to make any
deduction or withholding from any sum payable by it hereunder
(or if thereafter there is any change in the rates at which
or the manner in which such deductions or withholdings are
calculated), such Obligor shall promptly notify the Agent.
10.2 Evidence of Payment of Tax
If an Obligor makes any payment hereunder in respect of which
it is required to make any deduction or withholding, it shall
pay the full amount required to be deducted or withheld to
the relevant taxation or other authority within the time
allowed for such payment under applicable law and shall
deliver to the Agent for each Bank, within thirty days after
it has made such payment to the applicable authority:
<PAGE>
10.2.1 an original receipt (or a certified copy thereof)
issued by such authority evidencing the payment to
such authority of all amounts so required to be
deducted or withheld in respect of that Bank's share
of such payment; or
10.2.2 if no such receipt is issued, evidence of such
payment in form and substance reasonably satisfactory
to the Agent.
10.3 Tax Credit Payment
If an additional payment is made under Clause 9 (Taxes) by an
Obligor for the benefit of any Finance Party and such Finance
Party, in its sole discretion, determines that it has
obtained (and has derived full use and benefit from) a credit
against, a relief or remission for, or repayment of, any tax,
then, if and to the extent that such Finance Party, in its
sole opinion, determines that:
10.3.1 such credit, relief, remission or repayment is in
respect of or calculated with reference to the
additional payment made pursuant to Clause 9 (Taxes);
and
10.3.2 its tax affairs for its tax year in respect of which
such credit, relief, remission or repayment was
obtained have been finally settled,
such Finance Party shall, to the extent that it can do so
without prejudice to the retention of the amount of such
credit, relief, remission or repayment, pay to such Obligor
such amount as such Finance Party shall, in its sole opinion,
determine to be the amount which will leave such Finance
Party (after such payment) in no worse after-tax position
than it would have been in had the additional payment in
question not been required to be made by such Obligor.
10.4 Tax Credit Clawback
If any Finance Party makes any payment to an Obligor pursuant
to Clause 10.3 (Tax Credit Payment) and such Finance Party
subsequently determines, in its sole opinion, that the
credit, relief, remission or repayment in respect of which
such payment was made was not available or has been withdrawn
or that it was unable to use such credit, relief, remission
or repayment in full, such Obligor shall reimburse such
Finance Party such amount as such Finance Party determines,
in its sole opinion, is necessary to place it in the same
<PAGE>
after-tax position as it would have been in if such credit,
relief, remission or repayment had been obtained and fully
used and retained by such Finance Party.
10.5 Tax and Other Affairs
No provision of this Agreement shall interfere with the right
of any Finance Party to arrange its tax or any other affairs
in whatever manner it thinks fit, oblige any Finance Party to
claim any credit, relief, remission or repayment in respect
of any payment under Clause 9.1 (Tax Gross-up) in priority to
any other credit, relief, remission or repayment available to
it nor oblige any Finance Party to disclose any information
relating to its tax or other affairs or any computations in
respect thereof.
11. INCREASED COSTS
11.1 Increased Costs
If, by reason of (a) any change in applicable law or in its
interpretation or administration and/or (b) compliance with
any request or requirement relating to the maintenance of
capital or any other request from or requirement of any
central bank or other comparable fiscal, monetary or other
authority in all cases not known generally in the London
Interbank Market at the date of this Agreement:
11.1.1 a Bank or any holding company of such Bank is unable
to obtain the rate of return on its capital which it
would have been able to obtain but for such Bank's
entering into or assuming or maintaining a commitment
or performing its obligations under this Agreement;
11.1.2 a Bank or any holding company of such Bank incurs a
cost as a result of such Bank's entering into or
assuming or maintaining a commitment or performing
its obligations under this Agreement; or
11.1.3 there is any increase in the cost to a Bank or any
holding company of such Bank of funding or
maintaining such Bank's share of the Advances or any
Unpaid Sum,
then the Borrowers shall, from time to time on demand of the
Agent, promptly pay to the Agent for the account of that Bank
amounts sufficient to indemnify that Bank or to enable that
Bank to indemnify its holding company from and against, as
the case may be, (i) such reduction in the rate of return of
capital, (ii) such cost or (iii) such increased cost.
<PAGE>
11.2 Increased Costs Claims
A Bank intending to make a claim pursuant to Clause 11.1
(Increased Costs) shall notify the Agent of the event or
circumstance giving rise to such claim giving reasonable
detail of such event or circumstance, whereupon the Agent
shall notify the Borrowers thereof provided that nothing
herein shall require any Bank to disclose any confidential
information relating to the organisation of its affairs.
11.3 Exclusions
Notwithstanding the foregoing provisions of this Clause 11,
no Bank shall be entitled to make any claim under this
Clause 11 in respect of:
11.3.1 any cost, increased cost or liability compensated by
Clause 9 (Taxes); or
11.3.2 any cost, increased cost or liability as referred to
in Clause 11.1 (Increased Costs) to the extent the
same is compensated by the Associated Costs Rate.
12. ILLEGALITY
If, at any time, it is or will become unlawful for a Bank to
make, fund or allow to remain outstanding all or part of its
share of the Advances, then that Bank shall, promptly after
becoming aware of the same, deliver to the relevant Borrower
through the Agent a notice to that effect and:
12.0.1 such Bank shall not thereafter be obliged to
participate in the making of any Advances and the
amount of its Commitment shall be immediately reduced
to zero; and
12.0.2 if the Agent on behalf of such Bank so requires, the
relevant Borrower shall on or before the latest date
permitted by the relevant law repay such Bank's share
of any outstanding Advances together with accrued
interest thereon and all other amounts owing to such
Bank hereunder.
13. MITIGATION
If, in respect of any Bank, circumstances arise which would
or would upon the giving of notice result in:
13.1.1 an increase in any sum payable to it or for its
account pursuant to Clause 9.1 (Tax Gross-up);
<PAGE>
13.1.2 a claim for indemnification pursuant to Clause 9.2
(Tax Indemnity) or Clause 11.1 (Increased Costs); or
13.1.3 the reduction of its Available Commitment to zero or
any repayment to be made by the relevant Borrower
pursuant to Clause 12 (Illegality),
then, without in any way limiting, reducing or otherwise
qualifying the rights of such Bank or the obligations of the
Obligors under any of the Clauses referred to in sub-clauses
13.1.1, 13.1.2 and 13.1.3 of this Clause 13, such Bank shall
promptly upon becoming aware of such circumstances notify the
Agent thereof and, in consultation with the Agent and the
Borrowers and to the extent that it can do so lawfully and
without prejudice to its own position, take reasonable steps
(including a change of location of its Facility Office or the
transfer of its rights, benefits and obligations hereunder to
another financial institution acceptable to the Borrowers and
willing to participate in the Facility) to mitigate the
effects of such circumstances, provided that such Bank shall
be under no obligation to take any such action if, in the
opinion of such Bank, to do so might have any adverse effect
upon its business, operations or financial condition (other
than any minor costs and expenses of an administrative
nature).
14. REPRESENTATIONS AND WARRANTIES
The Company makes each of the representations and warranties
set out in Clause 14.1 (Corporate Existence and Power) to
Clause 14.16 (No Deduction or Withholding), inclusive. Each
other Obligor makes each of the Obligors' Representations and
Warranties in respect of itself only. The Company and each
other Obligor acknowledge that the Finance Parties have
entered into this Agreement in reliance on those
representations and warranties.
14.1 Corporate Existence and Power
The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, and has all corporate powers and all material
governmental licences, authorisations, consents and approvals
required to carry on its business as now conducted and is
duly qualified to do business as a foreign corporation in
each jurisdiction where such qualification is required,
except where the failure so to qualify could not reasonably
be expected to have a Material Adverse Effect.
<PAGE>
14.2 Corporate and Governmental Authorisation
The execution, delivery and performance by each Obligor of
this Agreement are within its corporate powers, have been
duly authorised by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental
body, agency or official and do not contravene, or constitute
a default under, any provision of applicable law or
regulation or of the certificate of incorporation or
constituent documents of such Obligor or of any agreement,
judgement, injunction, order, decree or other instrument
binding upon it or any of its subsidiaries or result in the
creation or imposition of any Encumbrance on any asset of
such Obligor or any of its subsidiaries.
14.3 Binding Effect
This Agreement constitutes a valid and binding agreement of
each Obligor enforceable in accordance with its terms, except
as the same may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by
general principles of equity.
14.4 Financial Information
1.4.1 The most recent audited consolidated balance sheet of
the Company and its Consolidated Subsidiaries and the
related consolidated statements of earnings, cash
flows and changes in stockholders' equity for the
fiscal year then ended fairly present in all material
respects, in conformity with generally accepted
accounting principles, the consolidated financial
position of the Company and its Consolidated
Subsidiaries as of such date and their consolidated
results of operations and cash flows for such fiscal
year.
14.4.2 The financial statements presented in the Company's
most recent Form 10-Q, which the Company has filed
with the Securities and Exchange Commission, fairly
presents in all material respects on a basis
consistent with the financial statements referred to
in sub-clause 14.4.1 of this Clause 14.4 (Financial
Information), the consolidated financial position of
the Company and its Consolidated Subsidiaries as of
such date and their consolidated results of
operations and cash flows for the period to which it
relates (subject to normal year-end audit adjustments
and the absence of full footnotes).
<PAGE>
14.4.3 Since the date of the Company's most recent Form 10-
Q, there has been no material adverse change in the
business, financial position or results of operations
of the Group, considered as a whole.
14.4.4 The most recent audited financial statements
(consolidated where applicable) of each Obligor
(other than the Company) and its Consolidated
Subsidiaries for the fiscal year then ended fairly
present in all material respects, in conformity with
generally accepted accounting principles, the
consolidated financial position of the Obligor and \
its Consolidated Subsidiaries as of such date and
since such date there has been no material adverse
change in the business, financial position or results
of operations of each Obligor (other than the
Company) and its Consolidated Subsidiaries,
considered as a whole.
14.5 Litigation
Except as disclosed in the Company's most recent annual
report on Form 10-K, each registration statement (other than
a registration statement on Form S-8 (or its equivalent)) and
each report on Form 10-K, 10-Q and 8-K (or their equivalents)
which the Company shall have filed with the Securities and
Exchange Commission at any time thereafter, there is no
action, suit or proceeding pending against, or to the
knowledge of the Company, threatened against or affecting,
any member of the Group before any court or arbitrator or any
governmental body, agency or official which could reasonably
be expected to have a Material Adverse Effect or which in any
manner draws into question the validity of this Agreement.
14.6 Compliance with Laws
14.6.1 Each member of the Group is in compliance in all
material respects with all applicable laws,
ordinances, rules, regulations and requirements of
governmental authorities except where (i) non-
compliance could not reasonably be expected to have a
Material Adverse Effect or (ii) the necessity of
compliance therewith is contested in good faith by
appropriate proceedings.
<PAGE>
14.6.2 Each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of
ERISA and the Internal Revenue Code with respect to
each Plan and is in compliance in all material
respects with the presently applicable provisions of
ERISA and the Internal Revenue Code with respect to
each Plan. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code in respect
of any Plan, (ii) failed to make any contribution or
payment to any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which
has resulted or could result in the imposition of an
Encumbrance or the posting of a bond or other
security under ERISA or the Internal Revenue Code or
(iii) incurred any liability under Title IV of ERISA
other than a liability to the PBGC for premiums under
Section 4007 of ERISA.
14.7 Environmental Matters
In the ordinary course of its business, the Company conducts
a systematic review of the effects and reasonably
ascertainable associated liabilities and costs of
Environmental Laws on the business, operations and properties
of the Group. The associated liabilities and costs include:
any capital or operating expenditures required for clean-up
or closure of properties presently or previously owned, any
capital or operating expenditures required to achieve or
maintain compliance with Environmental Laws, any constraints
on operating activities related to achieving or maintaining
compliance with Environmental Laws, including any periodic or
permanent shutdown of any facility or reduction in the level
or change in the nature of operations conducted thereat, any
costs or liabilities in connection with off-site disposal of
wastes or hazardous substances and any actual or potential
liabilities to third parties, including employees, arising
under Environmental Laws, and any related costs and expenses.
On the basis of this review, the Company has reasonably
concluded that such associated liabilities and costs,
including the costs of compliance with Environmental Laws,
could not reasonably be expected to have a Material Adverse
Effect.
<PAGE>
14.8 Taxes
Each member of the Group has filed all applicable United
States Federal income tax returns and all other material tax
returns which are required to be filed by it and have paid
all taxes due pursuant to such returns or pursuant to any
assessment received by any member of the Group except (i)
where non-payment could not reasonably be expected to have a
Material Adverse Effect or (ii) where the same are contested
in good faith by appropriate proceedings. The charges,
accruals and reserves on the books of each member of the
Group in respect of taxes or other governmental charges are,
in the opinion of the Company, adequate.
14.9 Existence and Corporate Power of Other Obligors
Each Obligor (other than the Company) is a corporation
validly existing and in good standing (where relevant) under
the laws of its jurisdiction of incorporation and any
jurisdiction in which it carries on business, and has all
corporate powers and all material governmental licences,
authorisations, consents and approvals required to carry on
its business as now conducted and is duly qualified to do
business as a foreign corporation in each jurisdiction where
such qualification is required, except where the failure so
to qualify could not reasonably be expected to have Material
Adverse Effect.
14.10 Regulatory Restrictions on Borrowing
The Company is not an "investment company" within the meaning
of the Investment Company Act 1940 (US), a "holding company"
within the meaning of the Public Utility Holding Company Act
1935 (US), or otherwise subject to any regulatory scheme
which restricts its ability to incur debt.
14.11 Full Disclosure
Neither the Company's most recent Form 10-K as of the date of
filing of such Form 10-K, nor any registration statement
(other than a registration statement on Form S-8 (or its
equivalent)) or report on Form 10-K, 10-Q and 8-K (or their
equivalents) which the Company shall have filed with the
Securities and Exchange Commission as at the time of filing
of such registration statement or report, as applicable,
contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make any
statements contained therein, in the light of the
circumstances under which they were made, not misleading;
provided that to the extent any such document contains
<PAGE>
forecasts and/or projections, it is understood and agreed
that uncertainty is inherent in any forecasts or projections
and that no assurances can be given by the Company of the
future achievement of such performance.
14.12 Year 2000
Any reprogramming required to permit the proper functioning,
in and following year 2000, of (a) the Obligors' computer
systems and (b) equipment containing embedded microchips
(including systems and equipment supplied by others or with
which the Obligors' systems interface) and the testing of all
such systems and equipment, as so reprogrammed, will be
completed in a timely fashion. The cost to the Obligors of
such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Obligors
(including reprogramming errors and the failure of others'
systems or equipment) will not result in an Event of Default
or Potential Event of Default or a Material Adverse Effect.
Except for such of the reprogramming referred to in the
preceding sentence as may be necessary, the computer and
management information systems of each Obligor and its
subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement, to
be sufficient to permit each Borrower to conduct its business
without Material Adverse Effect.
14.13 Information Memorandum
The factual information contained in the Information
Memorandum is true, complete and accurate in all material
respects, the financial projections contained therein have
been prepared on the basis of recent historical information
and on the basis of reasonable assumptions and nothing has
occurred or been omitted that renders the information
contained in the Information Memorandum untrue or misleading
in any material respect.
14.14 Claims Pari Passu
Under the laws of its jurisdiction of incorporation and any
jurisdiction in which it carries on business in force at the
date hereof, the claims of the Finance Parties against each
Obligor under this Agreement will rank at least pari passu
with the claims of all its other unsecured and unsubordinated
creditors save those whose claims are preferred solely by any
bankruptcy, insolvency, liquidation or other similar laws of
general application.
<PAGE>
14.15 No Filing or Stamp Taxes
Under the laws of its jurisdiction of incorporation and any
jurisdiction in which it carries on business in force at the
date hereof, it is not necessary that this Agreement be
filed, recorded or enrolled with any court or other authority
in such jurisdiction or that any stamp, registration or
similar tax be paid on or in relation to this Agreement.
14.16 No Deduction or Withholding
Under the laws of its jurisdiction of incorporation and any
jurisdiction in which it carries on business, it will not be
required to make any deduction or withholding from any
payment it may make hereunder to any Qualifying Lender or to
the Agent.
14.17 Repetition of Representations
The Repeated Representations shall be deemed to be repeated
by each Obligor (as applicable) by reference to the facts and
circumstances then existing on each date on which an Advance
is or is to be made.
15. COVENANTS
The Company makes each of the covenants set out in
Clauses 15.1 (Provision of Information) to 15.13 (Leverage
Ratio), inclusive and Clauses 15.15 (Claims Pari Passu) to
15.17 (Subordination of Inter-Company Loans), inclusive.
Each other Obligor makes each of the covenants set out in
Clauses 15.2 (Payment of Obligations) to 15.12 (Transactions
with Affiliates), inclusive and Clauses 15.15 (Claims Pari
Passu), 15.16 (Compliance with Regulations T, U and X) and
15.18 (No Guarantees). In addition to any other covenant
made by it under this Clause 15, HCEL makes the covenants set
out in Clause 15.14 (Minimum Net Worth of HCEL) and (if
applicable) Clause 15.17 (Subordination of Inter-Company
Loans). In addition to any other covenant made by it under
this Clause 15, Salt Union Limited makes the covenants set
out in Clause 15.17 (Subordination of Inter-Company Loans).
15.1 Provision of Information
The Company will deliver to the Agent in sufficient copies
for the Banks:
15.1.1 as soon as available and in any event within 95 days
after the end of each fiscal year of the Company, an
audited consolidated balance sheet of the Company and
its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements
<PAGE>
of earnings, cash flows, and changes in stockholders'
equity for such fiscal year, setting forth in each
case in comparative form the figures for the previous
fiscal year, all reported on in a manner consistent
with the requirements of the Securities and Exchange
Commission, and audited by an internationally
recognised firm of independent public accountants;
15.1.2 as soon as available and in any event within 50 days
after the end of each of the first three quarters of
each fiscal year of the Company, an unaudited
consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of the end of such
quarter and the related unaudited consolidated
statements of earnings and cash flows for such
quarter and for the portion of the Company's fiscal
year ended at the end of such quarter, setting forth
in each case in comparative form the figures for the
corresponding quarter and the corresponding portion
of the Company's previous fiscal year, all certified
(subject to normal year-end adjustments) as to
fairness of presentation and preparation based on
financial accounting principles consistent with
generally accepted accounting principles by an
Authorised Signatory of the Company;
15.1.3 in relation to each other Obligor, as soon as
available, but in any event within 120 days after the
end of each fiscal year, the audited financial
statements (consolidated where applicable) of each
Obligor and its Consolidated Subsidiaries prepared in
accordance with generally accepted accounting
principles, in each case audited by a firm of
internationally recognised independent public
accountants;
15.1.4 simultaneously with the delivery of each set of
financial statements referred to in sub-clauses
15.1.1, 15.1.2 and 15.1.3 of this Clause 15.1, a
certificate of an Authorised Signatory of the
Company:
(a) setting forth in reasonable detail the
calculations required to establish whether:
<PAGE>
(i) the Company is complying with the
requirements of Clause 15.13 (Leverage
Ratio) and HCEL is complying with the
requirements of Clause 15.14 (Minimum Net
Worth of HCEL), in each case on the date
of such financial statements; and
(ii) the Company and Salt Union Limited are
complying with the requirements of
sub-clauses 15.17.1(a) and (b) of
Clause 15.17 (Subordination of
Inter-Company Loans) in each case during
the relevant period to which such
calculation relates; and
(b) stating whether any Event of Default or
Potential Event of Default exists on the date
of such certificate and, if any Event of
Default or Potential Event of Default is
continuing, setting forth the details thereof
and the action which the Company is taking or
proposes to take with respect thereto;
15.1.5 simultaneously with the delivery of each set of
financial statements referred to in sub-clauses
15.1.1 and 15.1.3 of this Clause 15.1, a statement of
the firm of independent public accountants which
reported on such statements (i) that nothing has come
to their attention to cause them to believe that any
Event of Default or Potential Event of Default
arising from a failure to comply with Clause 15.13
(Leverage Ratio), Clause 15.14 (Minimum Net Worth of
HCEL) or Clause 15.17 (Subordination of Inter-Company
Loans) existed on the date of such statements (it
being understood that such accountants shall not
thereby be required to perform any procedures not
otherwise required under generally accepted auditing
standards) and (ii) confirming the calculations set
forth in the Authorised Signatory's certificate
delivered simultaneously therewith pursuant to
sub-clause 15.1.4 of this Clause 15.1;
<PAGE>
15.1.6 within five days after any officer of an Obligor
obtains knowledge of any Event of Default or
Potential Event of Default, if such Event of Default
or Potential Event of Default is then continuing, a
certificate of an Authorised Signatory of such
Obligor setting forth the details thereof and the
action which it is taking or proposes to take with
respect thereto;
15.1.7 promptly upon the mailing thereof to the shareholders
of the Company generally, copies of all financial
statements, reports and proxy statements so mailed;
15.1.8 promptly after the filing thereof, copies of all
registration statements (other than the exhibits
thereto and any registration statements on Form S-8
or its equivalent) and reports (other than the
exhibits thereto) on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Company shall have filed
with the Securities and Exchange Commission;
15.1.9 if and when any member of the ERISA Group (i) gives
or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of
the notice of such reportable event given or required
to be given to the PBGC; (ii) receives notice of
complete or partial withdrawal liability under Title
IV of ERISA or notice that any Multiemployer Plan is
in reorganisation, is insolvent or has been
terminated, a copy of such notice; (iii) receives
notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy
of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the
Internal Revenue Code, a copy of such application;
(v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice
and other information filed with the PBGC; (vi) gives
notice of withdrawal from any Plan pursuant to
<PAGE>
Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to
any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement or makes any amendment to any
Plan or Benefit Arrangement which has resulted or
could result in the imposition of an Encumbrance or
the posting of a bond or other security, a
certificate of the chief financial officer or the
chief accounting officer of the Company setting forth
details as to such occurrence and action, if any,
which the Company or applicable member of the ERISA
Group is required or proposes to take; and
15.1.10 from time to time such additional information
regarding the financial position or business of the
Group as the Agent, at the request of any Bank, may
reasonably request.
15.2 Payment of Obligations
Each Obligor will pay and discharge, and will cause each of
its subsidiaries to pay and discharge, at or before maturity,
all their respective material payment obligations and
liabilities (including tax liabilities and claims of
materialmen, warehousemen and the like which if unpaid might
by law give rise to an Encumbrance, but excluding the
Inter-Company Loans), except where the same may be contested
in good faith by appropriate proceedings, and will maintain,
and will cause each of its subsidiaries to maintain, in
accordance with generally accepted accounting principles,
appropriate reserves for the accrual of any of the same.
15.3 Maintenance of Property
Each Obligor will keep, and will cause each of its
subsidiaries to keep, all material property useful and
necessary in its business in good working order and
condition, ordinary wear and tear excepted.
15.4 Insurance
Each Obligor will, and will cause each of its subsidiaries
to, maintain (either in its name or in such subsidiary's
name) with financially sound and responsible insurance
companies, insurance on all its respective properties in at
least such amounts, against at least such risks and with such
risk retention as are usually maintained, insured against or
retained, as the case may be, in the same general area by
companies of established repute engaged in the same or a
similar business; provided that the Obligors and their
subsidiaries may self-insure to the same extent as other
<PAGE>
companies of established repute engaged in the same or a
similar business in the same general area in which such
Obligor or such subsidiary operates and to the extent
consistent with prudent business practice. Each Obligor will
furnish to the Banks, upon request from the Agent,
information presented in reasonable detail as to the
insurance so carried.
15.5 Conduct of Business and Maintenance of Existence
Each Obligor and its subsidiaries taken as a whole will
continue to engage in business of the same general type as
now conducted by such Obligor and its subsidiaries and any
ancillary or related lines of business, and each Obligor will
preserve, renew and keep in full force and effect, and will
cause each of its subsidiaries to preserve, renew and keep in
full force and effect, its respective legal existence and its
respective rights, privileges and franchises necessary or
desirable in the normal conduct of business; provided that
nothing in this Clause 15.5 shall prohibit (i) the
consolidation or merger of a subsidiary (other than a
Borrower with obligations with respect to Advances
outstanding hereunder) with or into another person, (ii) the
consolidation or merger of an Obligor with or into the
Company or another Borrower or (iii) the termination of the
corporate existence of any subsidiary (other than a Borrower
with obligations with respect to Advances outstanding
hereunder) if, in the case of sub-clauses (i), (ii) and
(iii), such consolidation, merger or termination is not
materially disadvantageous to the Banks; and provided further
that nothing in this Clause 15.5 shall prohibit any sale or
other disposition of assets permitted under Clause 15.8
(Mergers) and Clause 15.9 (Disposals).
15.6 Compliance with Laws
Each Obligor will comply, and cause each of its subsidiaries
to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of
governmental authorities (including Environmental Laws and,
where relevant, ERISA and the rules and regulations
thereunder) except where (i) the necessity of compliance
therewith is contested in good faith by appropriate
proceedings or (ii) the failure to comply could not
reasonably be expected to have a Material Adverse Effect.
<PAGE>
15.7 Inspection of Property, Books and Records
Each Obligor will keep, and will cause each of its
subsidiaries to keep, proper books of record and account in
which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and
activities; and will permit, and will cause each of its
subsidiaries to permit, representatives of any Bank at such
Bank's expense to visit and inspect any of its respective
properties, to examine and make abstracts from any of its
respective books and records and to discuss its respective
affairs, finances and accounts with its respective officers,
employees and independent public accountants, all at such
reasonable times as may be desired.
15.8 Mergers
Subject to Clause 15.5 (Conduct of Business and Maintenance
of Existence), no Obligor will consolidate or merge with or
into any other person; provided that the Company may merge
with another person if (i) the Company is the corporation
surviving such merger and (ii) after giving effect to such
merger, no Event of Default or Potential Event of Default
shall have occurred and be continuing.
15.9 Disposals
Neither the Guarantors nor the Harris Chemical Europe Group
shall sell, lease or otherwise transfer, directly or
indirectly, assets (exclusive of assets transferred in the
ordinary course of business and on normal commercial terms)
if after giving effect to such transfer the aggregate book
value of assets so transferred subsequent to the date of this
Agreement would constitute Substantial Assets as of the day
preceding the date of such transfer other than (i) sales of
accounts receivable to IMC-Agrico Receivables Company L.L.C.
or any other similar bankruptcy-remote subsidiary of the
Company or any of its subsidiaries established for the
purpose of engaging in transactions related to accounts
receivable, (ii) the sale of substantially all of the assets
comprising the IMC AgriBusiness business unit of the Company,
(iii) the sale of any equity interest in McMoRan Oil & Gas
Co., a Delaware corporation, or the sale or transfer of any
right to receive revenues from the MOXY-FRP Exploration
Program undertaken by McMoRan Oil & Gas Co., a Delaware
corporation, (iv) the sale of assets acquired pursuant to an
Acquisition that are unrelated to the business of the same
general type as now conducted by the Company and its
subsidiaries, and (v) the sale, lease or other transfer,
directly or indirectly, of assets acquired in or as a direct
result of the Harris Chemical Acquisition.
<PAGE>
15.10 Use of Proceeds
The proceeds of any Advance made under this Agreement will be
used by the Obligors for general corporate purposes,
including the refinancing of Acquisitions or the repayment of
the Inter-Company Loans (subject to Clause 15.17
(Subordination of Inter-Company Loans)) and any bank
overdraft facility. None of such proceeds will be used in
violation of Regulation T, U or X of the Board of Governors
of the Federal Reserve System.
15.11 Negative Pledge
Neither the Guarantors and their subsidiaries nor the Harris
Chemical Europe Group shall create, assume or suffer to exist
any Encumbrance on any asset now owned or hereafter acquired
by it, except:
15.11.1 Encumbrances existing on the date of this Agreement
securing Debt outstanding on the date of this
Agreement in an aggregate principal or face amount
not exceeding $135,000,000 (or its equivalent) in the
case of the Guarantors and their subsidiaries and
$8,000,000 (or its equivalent) in the case of the
Harris Chemical Europe Group;
15.11.2 any Encumbrance existing on any asset of any person
at the time such person becomes a subsidiary of an
Obligor and not created in contemplation of such
event;
15.11.3 any Encumbrance on any asset securing Debt incurred
or assumed for the purpose of financing all or any
part of the cost of acquiring or constructing such
asset, provided that such Encumbrance attaches to
such asset concurrently with or within 90 days after
the acquisition or completion of construction
thereof;
15.11.4 any Encumbrance on any asset of any person existing
at the time such person is merged or consolidated
with or into an Obligor or a subsidiary of an Obligor
and not created in contemplation of such event;
15.11.5 any Encumbrance existing on any asset prior to the
acquisition thereof by an Obligor or a subsidiary of
an Obligor and not created in contemplation of such
acquisition;
<PAGE>
15.11.6 any Encumbrance arising out of the refinancing,
extension, renewal or refunding of any Debt secured
by any Encumbrance permitted by any of the foregoing
paragraphs of this Clause 15.11, provided that the
proceeds of such Debt are used solely for the
foregoing purpose and to pay financing costs and such
Debt is not secured by any additional assets;
15.11.7 Encumbrances arising in the ordinary course of its
business which (i) do not secure Debt or Derivatives
Obligations, (ii) do not secure any obligation in an
amount exceeding $100,000,000 (or its equivalent) in
the case of the Guarantors and their subsidiaries and
$5,000,000 (or its equivalent) in the case of the
Harris Chemical Europe Group and (iii) do not in the
aggregate materially detract from the value of its
assets or materially impair the use thereof in the
operation of its business;
15.11.8 Encumbrances on cash and cash equivalents securing
Derivatives Obligations, provided that the aggregate
amount of cash and cash equivalents subject to such
Encumbrances may at no time exceed $10,000,000 (or
its equivalent) in the case of the Guarantors and
their subsidiaries and $1,000,000 (or its equivalent)
in the case of the Harris Chemical Europe Group; and
15.11.9 Encumbrances not otherwise permitted by the foregoing
paragraphs of this clause 15.11 securing Debt in an
aggregate principal or face amount, together with all
other Debt secured by Encumbrances permitted under
this sub-clause 15.11.9, not to exceed an amount
equal to 10 per cent of its Consolidated Net Worth
(calculated as of the last day of the fiscal quarter
most recently ended on or prior to the date of the
most recent incurrence of such Debt).
15.12 Transactions with Affiliates
No Obligor will, nor will it permit any of its subsidiaries
to, directly or indirectly, pay any funds to or for the
account of, make any investment (whether by acquisition of
stock or indebtedness, by loan, advance, transfer of
property, guarantee or other agreement to pay, purchase or
service, directly or indirectly, any Debt, or otherwise) in,
lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any
transaction with, any Affiliate except: (a) transactions on
<PAGE>
an arms-length basis on terms at least as favourable to such
Obligor or such subsidiary as could have been obtained from a
third party who was not an Affiliate, (b) marketing services
provided by IMC Global Operations Inc. to Agrico, (c)
employee leasing services agreements between IMC Global
Operations Inc. and Agrico, (d) transactions between Agrico
and the Rainbow and FarMarkets business units of the Company,
(e) transactions between Agrico and the IMC Kalium business
unit of the Company, (f) loans from an Obligor or a
subsidiary to an Obligor or a subsidiary, (g) the declaration
and payment of any lawful dividend and (h) transactions
between Vigiron Partnership, a Delaware general partnership,
and the IMC AgriBusiness business unit of the Company,
provided further that nothing in this Clause 15.12 shall
prohibit any sale or other disposition of assets permitted
under Clause 15.8 (Mergers) and Clause 15.9 (Disposals).
15.13 Leverage Ratio
15.13.1 The Company shall ensure that the Leverage Ratio will
not at any time exceed 3.75 to 1.00.
15.13.2 In this Clause 15.13:
(a) "Consolidated Adjusted Debt" means at any date
the sum of (i) the Debt of the Company and its
Consolidated Subsidiaries plus (ii) the excess
(if any) of (A) the aggregate unrecovered
principal investment of transferees of
accounts receivable from the Company or a
Consolidated Subsidiary in transactions
accounted for as sales under generally
accepted accounting principles over (B)
$100,000,000 (or its equivalent), in each case
determined on a consolidated basis as of such
date;
(b) "Consolidated EBITDA" means, for any period,
the consolidated net income of the Company and
its Consolidated Subsidiaries for such period
before (i) income taxes, (ii) interest
expense, (iii) depreciation and amortisation,
(iv) minority interest, (v) extraordinary
losses or gains, (vi) discontinued operations
and (vii) the cumulative effect of changes in
accounting principles. Consolidated EBITDA
for each four-quarter period will be adjusted
<PAGE>
on a pro-forma basis to reflect any
Acquisition closed during such period as if
such Acquisition had been closed on the first
day of such period; and
(c) "Leverage Ratio" means at any date the ratio
of Consolidated Adjusted Debt calculated as of
such date to Consolidated EBITDA calculated
for the period of four consecutive fiscal
quarters most recently ended on or prior to
such date.
15.14 Minimum Net Worth of HCEL
15.14.1 HCEL shall ensure that its Minimum Net Worth shall:
(a) be not less that 40,000,000 by no later than
the close of its fiscal year ending on 31
December 1999; and
(b) increase each fiscal year thereafter by not
less than 75 per cent of its Net Income in
such fiscal year so that X = Y + 0.75(a),
where:
X = Minimum Net Worth calculated on 31
December 2000 and at the date of each of
HCEL's fiscal years thereafter;
Y = Minimum Net Worth calculated at the
close of the immediately preceding
fiscal year to that for which it is
being calculated; and
a = Net Income for the fiscal year for which
X is being calculated.
15.14.2 In this Clause 15.14:
(a) "Minimum Net Worth" means at any date, the
consolidated shareholders' equity of HCEL and
its Consolidated Subsidiaries determined as of
such date (other than any amount attributable
to stock which is required to be redeemed or
is redeemable at the option of the holder, if
certain events or conditions occur or exist or
otherwise); and
<PAGE>
(b) "Net Income" means, in any fiscal year, the
net income of HCEL and its Consolidated
Subsidiaries after the payment of tax and
dividends.
15.15 Claims Pari Passu
Each Obligor shall ensure that at all times the claims of the
Finance Parties against it under this Agreement rank at least
pari passu with the claims of all its other unsecured and
unsubordinated creditors save those whose claims are
preferred by any bankruptcy, insolvency, liquidation or other
similar laws of general application.
15.16 Compliance with Regulations T, U and X
No Obligor is engaged principally, or as one of its important
activities, in the business of extending credit for the
purpose of buying or carrying Margin Stock (as such term is
defined in Regulation U of the Regulations of the Board of
Governors of the Federal Reserve System of the United States)
and no part of the proceeds of any Advance will be used,
whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a
violation of or is inconsistent with, the provisions of
Regulations T, U or X of such Regulations.
15.17 Subordination of Inter-Company Loans
15.17.1 The Company, HCEL and Salt Union Limited shall comply
with the terms of the Subordination Deed and shall
ensure that:
(a) all rights of the Company under the Inter-
Company Loans shall be subordinated in all
respects to the rights of the Finance Parties
hereunder; and
(b) no amount owing under the Inter-Company Loans
other than a Permitted Payment shall be paid
until all obligations of the Obligors
hereunder have been discharged in full and
this Agreement shall have been terminated.
15.17.2 In this Clause 15.17:
<PAGE>
(a) "EBITDA" means, for any period, the net income
of Harris Chemical Europe Group for such
period before (i) income taxes, (ii) interest
expense, (iii) depreciation and amortisation,
(iv) minority interest, (v) extraordinary
losses or gains, (vi) discontinued operations
and (vii) the cumulative effect of changes in
accounting principles. EBITDA for each four-
quarter period will be adjusted on a pro-forma
basis to reflect any Acquisition closed during
such period as if such Acquisition had been
closed on the first day of such period;
(b) "Permitted Payment" means:
(i) the repayment of the outstanding
principal amount of each of the Notes
referred to in paragraphs (a) to (c)
inclusive of the definition of
Inter-Company Loans;
(ii) if an Event of Default or a Potential
Event of Default shall not have occurred
and be continuing, the payment of any
interest due to be paid under the Inter-
Company Loans on 31 December 1998
provided that the ratio of EBITDA to Net
Interest Expense is greater than 2.50 to
1.00 at such date;
(iii)if an Event of Default or a Potential
Event of Default shall not have occurred
and be continuing, the payment of any
other amount of interest due under the
Inter-Company Loans provided that EBITDA
to Net Interest Expense is greater than
2.50 to 1.00 on a quarterly rolling 12
month basis; and
(iv) the payment of any proceeds from the
transfer (whether by sale of assets or
shares, merger, recapitilisation or
otherwise) of Harris Soda Products
(Europe) SAS, Harris Inorganic Chemicals
BV, Societa Chimica Larderello SpA and
Matthes & Weber GmbH or substantially all
of the chemicals business conducted
thereby.
<PAGE>
(c) "Net Interest Expense" means for any period
all interest expense (including all interest
payable under the Inter-Company Loans),
commissions and discounts and other fees
payable by the Harris Chemical Europe Group
less any interest receivable by the Harris
Chemical Europe Group.
15.18 No Guarantees
No Obligor (other than the Company) shall give a Guarantee in
connection with an obligation or liability, whether actual or
contingent, of any of its holding companies other than the
BoS Cross Guarantee.
16. EVENTS OF DEFAULT
Clauses 16.1 (Failure to Pay) to 16.10 (Guarantee
Unenforceable) describe each circumstance which constitutes
an Event of Default if it occurs and continues.
16.1 Failure to Pay
An Obligor shall fail to pay when due any principal of any
Advance or shall fail to pay, within five Business Days of
the due date thereof, any interest, fees or any other amount
payable hereunder.
16.2 Specific Covenants
16.2.1 An Obligor shall fail to observe or perform any
covenant contained in Clauses 15.8 (Mergers) to 15.12
(Transactions with Affiliates), inclusive and
Clauses 15.15 (Claims Pari Passu) and
16.16 (Compliance with Regulations T, U and X).
16.2.2 The Company shall fail to observe or perform the
covenant contained in Clause 15.13 (Leverage Ratio).
16.2.3 HCEL shall fail to observe or perform the covenants
contained in Clause 15.14 (Minimum Net Worth of HCEL).
16.2.4 The Company or Salt Union Limited shall fail to
observe or perform the covenants contained in
Clause 15.17 (Subordination of Inter-Company Loans).
16.3 Misrepresentation
<PAGE>
16.3.1 An Obligor shall fail to observe or perform any of
its covenants or agreements contained in this
Agreement (other than those covered by Clauses 16.1
(Failure to Pay) and 16.2 (Specific Covenants)) for
30 days after notice thereof has been given to it by
the Agent at the request of any Bank.
16.3.2 Any representation, warranty, certification or
statement made by an Obligor in this Agreement or in
any certificate, financial statement or other
document delivered pursuant to this Agreement shall
prove to have been incorrect in any material respect
when made or deemed made.
16.4 Cross Acceleration
Any member of the Group shall fail to make any payment in
respect of any Material Financial Obligation (other than the
Loan or the Inter-Company Loans) when due or within any
applicable grace period, or any event or condition shall
occur and continue beyond the applicable grace period (if
any) and the repayment of any Material Financial Obligations
shall be accelerated as a result thereof.
16.5 Insolvency Proceedings
16.5.1 An Obligor or any Material Subsidiary shall commence
a voluntary case or voluntary winding-up or other
proceeding seeking liquidation, reorganisation or
other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment
of a trustee, receiver, administrative receiver,
liquidator, custodian, compulsory manager or other
similar official of it or any substantial part of its
property, or shall consent to any such relief or to
the appointment of or taking possession by any such
official in an involuntary case or winding-up or
other proceeding commenced against it, or shall make
a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorise
any of the foregoing.
<PAGE>
16.5.2 An involuntary case or winding-up or other proceeding
shall be commenced against an Obligor or any Material
Subsidiary seeking liquidation, reorganisation or
other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of
a trustee, receiver, administrative receiver,
liquidator, custodian, compulsory manager or other
similar official of it or any substantial part of its
property, and such involuntary case or winding-up or
other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for
relief shall be entered against an Obligor or any
Material Subsidiary under the bankruptcy laws as now
or hereafter in effect.
16.6 ERISA Default
Any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $25,000,000 (or
its equivalent) which it shall have become liable to pay
under Title IV of ERISA, notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any
combination of the foregoing, the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed
to administer any Material Plan, a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated, or
there shall occur a complete or partial withdrawal from, or a
Event of Default or Potential Event of Default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one
or more Multiemployer Plans which causes one or more members
of the ERISA Group to incur a current payment obligation in
excess of $100,000,000 (or its equivalent) in the aggregate.
16.7 Failure to Comply with Final Judgement
Any final judgement or any final order for the payment of
money in excess of:
16.7.1 $100,000,000 (or its equivalent) in aggregate is
rendered against the Guarantors or any of their
subsidiaries which continues unsatisfied and unstayed
for a period of 30 days; or
<PAGE>
16.7.2 $8,000,000 (or its equivalent) in aggregate is
rendered against the Harris Chemical Europe Group
which continues unsatisfied and unstayed for a period
of 30 days.
16.8 Change in Ownership of Company
16.8.1 Any person or two or more persons acting in concert
shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act 1934
(US)), directly or indirectly, of Voting Stock of the
Company (or other securities convertible into such
Voting Stock) representing 35 per cent or more of the
combined voting power of all Voting Stock of the
Company.
16.8.2 During any period of up to 24 consecutive months,
commencing after the date of this Agreement,
individuals who at the beginning of such 24-month
period were directors of the Company shall cease for
any reason (other than due to death or disability) to
constitute a majority of the board of directors of
the Company, except to the extent that individuals
who at the beginning of such 24-month period were
replaced by individuals (x) elected by two thirds of
the remaining members of the board of directors of
the Company or (y) nominated for election by a
majority of the remaining members of the board of
directors of the Company and thereafter elected as
directors by the shareholders of the Company.
16.8.3 Any person or two or more persons acting in concert
shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement
that has resulted in its or their acquisition of,
control over Voting Stock of the Company (or other
securities convertible into such securities)
representing 35 per cent or more of the combined
voting power of all Voting Stock of the Company.
16.9 Illegality
At any time it is or becomes unlawful for an Obligor to
perform or comply with all or any of its material obligations
hereunder or any of the material obligations of an Obligor
hereunder are not or cease to be legal, valid, binding and
effective.
<PAGE>
16.10 Guarantee Unenforceable
Any obligation of a Guarantor under Clause 17 (Guarantee and
Indemnity) shall for any reason not be enforceable in
accordance with its terms, or a Guarantor shall so assert in
writing.
16.11 Acceleration and Cancellation
If an Event of Default occurs and is continuing, the Agent
may (and, if so instructed by an Instructing Group, shall) by
notice to the Company:
16.11.1 declare all or any part of the Advances to be
immediately due and payable (whereupon the same shall
become so payable together with accrued interest
thereon and any other sums then owed by a Borrower
hereunder) or declare all or any part of the Advances
to be due and payable on demand of the Agent; and/or
16.11.2 declare that the Facility shall be cancelled,
whereupon the same shall be cancelled and the
Commitment of each Bank shall be reduced to zero,
provided that, notwithstanding the foregoing, upon
the occurrence of an Event of Default specified in
Clause 16.5 (Insolvency Proceedings), the Available
Commitment of each Bank shall be immediately reduced
to zero and all Advances, interest thereon and other
sums then owed by the Borrower hereunder shall become
immediately due and payable, in each case without
declaration, notice or demand by or to any person.
16.12 Advances Due on Demand
If, pursuant to Clause 16.11 (Acceleration and Cancellation),
the Agent declares all or any part of the Advances to be due
and payable on demand of the Agent, then, and at any time
thereafter, the Agent may (and, if so instructed by an
Instructing Group, shall) by notice to the Borrowers:
16.12.1 require repayment of all or such part of the Advances
on such date as it may specify in such notice
(whereupon the same shall become due and payable on
the date specified together with accrued interest
thereon and any other sums then owed by the Borrowers
hereunder) or withdraw its declaration with effect
from such date as it may specify; and
<PAGE>
16.12.2 declare that the Facility shall be cancelled,
whereupon the same shall be cancelled and the
Commitment of each Bank reduced to zero.
16.13 Length of Terms
If, pursuant to Clause 16.11 (Acceleration and Cancellation),
the Agent declares the Advances to be due and payable on
demand of the Agent, the Term in respect of any such Advance
shall, if the Agent subsequently demands payment before the
scheduled Repayment Date in respect of such Advance, be
deemed (except for the purposes of Clause 20.4 (Break Costs)
to be of such length that it ends on the date that such
demand is made.
17. GUARANTEE AND INDEMNITY
17.1 Guarantee
Each Guarantor jointly and severally irrevocably and
unconditionally guarantees to each Finance Party to pay on
demand any and every sum or sums of money which each Borrower
is at any time liable to pay to any Finance Party under or
pursuant to this Agreement and which has become due and
payable but has not been paid at the time such demand is
made.
17.2 Indemnity
Each Guarantor jointly and severally irrevocably and
unconditionally agrees as a primary obligation to indemnify
each Finance Party from time to time on demand from and
against any loss incurred by any Finance Party as a result of
any of the obligations of any Borrower under or pursuant to
this Agreement being or becoming void, voidable,
unenforceable or ineffective as against such Borrower for any
reason whatsoever, whether or not known to any Finance Party
or any other person, the amount of such loss being the amount
which the person or persons suffering it would otherwise have
been entitled to recover from such Borrower.
17.3 Additional Security
The obligations of each Guarantor herein contained shall be
in addition to and independent of every other security which
any Finance Party may at any time hold in respect of any of
the Borrowers' obligations hereunder.
<PAGE>
17.4 Continuing Obligations
The obligations of each Guarantor herein contained shall
constitute and be continuing obligations notwithstanding any
settlement of account or other matter or thing whatsoever and
shall not be considered satisfied by any intermediate payment
or satisfaction of all or any of the obligations of each
Borrower under this Agreement and shall continue in full
force and effect until final payment in full of all amounts
owing by each Borrower hereunder and total satisfaction of
all each Borrower's actual and contingent obligations
hereunder.
17.5 Obligations not Discharged
Neither the obligations of any Guarantor herein contained nor
the rights, powers and remedies conferred in respect of any
Guarantor upon any Finance Party by this Agreement or by law
shall be discharged, impaired or otherwise affected by:
17.5.1 the winding-up, dissolution, administration or
re-organisation of a Borrower or any other person or
any change in its status, function, control or
ownership;
17.5.2 any of the obligations of a Borrower or any other
person hereunder or under any other security taken in
respect of any of its obligations hereunder being or
becoming illegal, invalid, unenforceable or
ineffective in any respect;
17.5.3 time or other indulgence being granted or agreed to
be granted to any Borrower in respect of its
obligations hereunder or under any such other
security;
17.5.4 any amendment to, or any variation, waiver or release
of, any obligation of any Borrower hereunder or under
any such other security;
<PAGE>
17.5.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken
in respect of any Borrower's obligations hereunder;
17.5.6 any failure to realise or fully to realise the value
of, or any release, discharge, exchange or
substitution of, any security taken in respect of any
Borrower's obligations hereunder; or
17.5.7 any other act, event or omission which, but for this
Clause 17.5, might operate to discharge, impair or
otherwise affect any of the obligations of a
Guarantor herein contained or any of the rights,
powers or remedies conferred upon any of the Finance
Parties by this Agreement or by law.
17.6 Settlement Conditional
Any settlement or discharge between a Guarantor and any of
the Finance Parties shall be conditional upon no security or
payment to any Finance Party by an Obligor or any other
person on behalf of an Obligor being avoided or reduced by
virtue of any laws relating to bankruptcy, insolvency,
liquidation or similar laws of general application and, if
any such security or payment is so avoided or reduced, each
Finance Party shall be entitled to recover the value or
amount of such security or payment from such Guarantor
subsequently as if such settlement or discharge had not
occurred.
17.7 Exercise of Rights
No Finance Party shall be obliged before exercising any of
the rights, powers or remedies conferred upon it in respect
of the Guarantors by this Agreement or by law:
17.7.1 to make any demand of any Borrower;
17.7.2 to take any action or obtain judgement in any court
against any Borrower;
17.7.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
17.7.4 to enforce or seek to enforce any other security
taken in respect of any of the obligations of any
Borrower hereunder.
<PAGE>
17.8 Deferral of Guarantors' Rights
Each Guarantor agrees that, so long as any amounts are or may
be owed by any Borrower hereunder or any Borrower is under
any actual or contingent obligations hereunder, the Guarantor
shall not exercise any rights which the Guarantor may at any
time have by reason of performance by it of its obligations
hereunder:
17.8.1 to be indemnified by any Borrower; and/or
17.8.2 to claim any contribution from any other guarantor of
any Borrower's obligations hereunder; and/or
17.8.3 to take the benefit (in whole or in part and whether
by way of subrogation or otherwise) of any rights of
the Finance Parties hereunder or of any other
security taken pursuant to, or in connection with,
this Agreement by all or any of the Finance Parties.
17.9 Suspense Accounts
All moneys received, recovered or realised by a Bank by
virtue of Clause 17.1 (Guarantee) or Clause 17.2 (Indemnity)
may, in that Bank's discretion, be credited to a suspense or
impersonal account (which shall bear interest at a commercial
rate) and may be held in such account for so long as such
Bank thinks fit pending the application from time to time (as
such Bank may think fit) of such moneys in or towards the
payment and discharge of any amounts owing by an Obligor to
such Bank hereunder.
18. COMMITMENT COMMISSION AND FEES
18.1 Commitment Commission
The Borrowers shall pay to the Agent for account of each Bank
a commitment commission on the amount of such Bank's
Available Commitment from day to day during the period
beginning on the date hereof and ending on the date of
termination of the Commitments, such commitment commission to
be calculated at the rate determined by the Agent in
accordance with Schedule_5 (Determination of Margin and
Commitment Commission) and payable in arrear on the last day
of each successive period of three months which ends during
such period and on the date of termination of the
Commitments. The Agent shall promptly notify the Borrowers
and the Banks of the commitment commission after is it
determined.
<PAGE>
18.2 Arrangement Fee
The Borrowers shall pay to the Arranger the fees specified in
the letter of even date herewith from the Arranger to the
Original Borrowers at the times, and in the amounts,
specified in such letter.
18.3 Agency Fee
The Borrowers shall pay to the Agent for its own account the
agency fees specified in the letter of even date herewith
from the Agent to the Original Borrowers at the times, and in
the amounts, specified in such letter.
19. COSTS AND EXPENSES
19.1 Transaction Expenses
Each Borrower shall, from time to time on demand of the
Agent, reimburse each of the Agent and the Arranger for all
reasonable costs and expenses (including reasonable legal
fees) together with any VAT thereon incurred by it in
connection with the negotiation, preparation and execution of
this Agreement, any other document referred to in this
Agreement and the completion of the transactions herein
contemplated. The Agent or the Arranger may pay for any such
costs and expenses (including legal fees) together with any
VAT thereon prior to receiving payment in respect thereof
from any Borrower and (without prejudice to the provisions of
this Agreement) the Agent or the Arranger may debit an amount
equal to any such costs and expenses (including legal fees)
together with any VAT thereon to any account maintained by a
Borrower with any of them.
19.2 Preservation and Enforcement of Rights
The Borrowers shall, from time to time on demand of the
Agent, reimburse the Finance Parties for all reasonable costs
and expenses (including reasonable legal fees) on a full
indemnity basis together with any VAT thereon incurred in or
in connection with the preservation and/or enforcement of any
of the rights of the Finance Parties under this Agreement and
any other document referred to in this Agreement (including
any reasonable costs and expenses relating to any steps
necessary in connection with any proposal for remedying or
otherwise resolving an Event of Default or Potential Event of
Default).
<PAGE>
19.3 Stamp Taxes
The Borrowers shall pay all stamp, registration and other
taxes to which this Agreement, any other document referred to
in this Agreement or any judgement given in connection
therewith is or at any time may be subject and shall, from
time to time on demand of the Agent, indemnify the Finance
Parties against any liabilities, reasonable costs, claims and
expenses resulting from any failure to pay or any delay in
paying any such tax.
19.4 Amendment Costs
If an Obligor requests any amendment, waiver or consent then
the Borrowers shall, within five Business Days of demand by
the Agent, reimburse the Finance Parties for all costs and
expenses (including legal fees) together with any VAT thereon
incurred by such person in responding to or complying with
such request.
19.5 Banks' Liabilities for Costs
If any Borrower fails to perform any of its obligations under
this Clause 19, each Bank shall, in its Proportion, indemnify
each of the Agent and the Arranger against any loss incurred
by any of them as a result of such failure.
19.6 Agent's Costs
The Borrowers shall, from time to time on demand of the Agent
(and without prejudice to the provisions of Clause 19.2
(Preservation and Enforcement Rights) and Clause 19.4
(Amendment Costs)) compensate the Agent for all reasonable
costs and expenses (including telephone, fax, copying, travel
and personnel costs) incurred by the Agent in connection with
its taking such action as are reasonable or in complying with
any instructions from an Instructing Group or any request by
a Borrower in connection with:
19.6.1 the granting or proposed granting of any waiver or
consent requested hereunder by any Borrower;
19.6.2 any actual breach by any Borrower of its obligations
hereunder;
19.6.3 the occurrence of any event which is an Event of
Default or a Potential Event of Default; or
19.6.4 the transfer of the role of Agent to another person.
20. DEFAULT INTEREST AND BREAK COSTS
<PAGE>
20.1 Default Interest Periods
If any sum due and payable by an Obligor hereunder is not
paid on the due date therefor in accordance with Clause 23
(Payments) or if any sum due and payable by an Obligor under
any judgement of any court in connection herewith is not paid
on the date of such judgement, the period beginning on such
due date or, as the case may be, the date of such judgement
and ending on the date upon which the obligation of such
Obligor to pay such sum is discharged shall be divided into
successive periods, each of which (other than the first)
shall start on the last day of the preceding such period and
the duration of each of which shall (except as otherwise
provided in this Clause 20) be selected by the Agent.
20.2 Default Interest
An Unpaid Sum shall bear interest during each Term in respect
thereof at the rate per annum which is one per cent. per
annum above the percentage rate which would apply to an
Advance in the amount and currency of such Unpaid Sum and for
the same Term, provided that if such Unpaid Sum relates to an
Advance which became due and payable on a day other than the
last day of the Term thereof:
20.2.1 the first such Term applicable to such Unpaid Sum
shall be of a duration equal to the unexpired portion
of the current Term relating to that Advance; and
20.2.2 the percentage rate of interest applicable thereto
from time to time during such period shall be that
which exceeds by one per cent. the rate which would
have been applicable to it had it not so fallen due.
20.3 Payment of Default Interest
Any interest which shall have accrued under Clause 20.2
(Default Interest) in respect of an Unpaid Sum shall be due
and payable and shall be paid by the Obligor owing such
Unpaid Sum on the last day of its Term or on such other dates
as the Agent may specify by prior written notice to such
Obligor.
20.4 Break Costs
If any Bank or the Agent on its behalf receives or recovers
all or any part of such Bank's share of an Advance or Unpaid
Sum otherwise than on the last day of the Term thereof, the
Borrowers shall pay to the Agent on demand for account of
such Bank an amount equal to the amount (if any) by which (a)
the additional interest (excluding Margin) which would have
been payable on the amount so received or recovered had it
<PAGE>
been received or recovered on the last day of the Term
thereof exceeds (b) the amount of interest which in the
reasonable opinion of the Agent would have been payable to
the Agent on the last day of the Term thereof in respect of a
sterling deposit equal to the amount so received or recovered
placed by it with a prime bank in London for a period
starting on the third Business Day following the date of such
receipt or recovery and ending on the last day of the Term
thereof.
21. BORROWERS' INDEMNITIES
21.1 Borrowers' Indemnity
Each Borrower undertakes to indemnify:
21.1.1 each Finance Party against any reasonable cost or any
claim, loss, expense (including reasonable legal
fees) or liability together with any VAT thereon,
whether or not reasonably foreseeable, which it may
sustain or incur (otherwise than as a result of the
gross negligence or wilful misconduct of a Finance
Party) as a consequence of the occurrence of any
Event of Default or any default by any Borrower in
the performance of any of the material obligations
expressed to be assumed by it in this Agreement;
21.1.2 each Bank against any cost or loss it may suffer
under Clause 19.5 (Banks' Liabilities for Costs) or
Clause 26.5 (Indemnification); and
21.1.3 each Bank against any cost or loss it may suffer or
incur as a result of its funding or making
arrangements to fund its portion of an Advance
requested by a Borrower but not made by reason of the
operation of any one or more of the provisions
hereof.
21.2 Currency Indemnity
If any sum (a "Sum") due from an Obligor under this Agreement
or any order or judgement given or made in relation hereto
has to be converted from the currency (the "First Currency")
in which such Sum is payable into another currency (the
"Second Currency") for the purpose of:
21.2.1 making or filing a claim or proof against such
Obligor;
21.2.2 obtaining an order or judgement in any court or other
tribunal; or
<PAGE>
21.2.3 enforcing any order or judgement given or made in
relation hereto,
the Borrowers shall indemnify each person to whom such Sum is
due from and against any actual loss suffered or incurred as
a result of any discrepancy between (a) the rate of exchange
used for such purpose to convert such Sum from the First
Currency into the Second Currency and (b) the rate or rates
of exchange available to such person at the time of receipt
of such Sum.
22. CURRENCY OF ACCOUNT AND PAYMENT
Sterling is the currency of account and payment for each and
every sum at any time due from an Obligor hereunder, provided
that:
22.0.1 each payment in respect of costs and expenses shall
be made in the currency in which the same were
incurred; and
22.0.2 each payment pursuant to Clause 9.2 (Tax Indemnity)
or Clause 11.1 (Increased Costs) shall be made in the
currency reasonably specified by the party claiming
thereunder.
23. PAYMENTS
23.1 Payments to the Agent
On each date on which this Agreement requires an amount to be
paid by an Obligor or a Bank, such Obligor or, as the case
may be, such Bank shall make the same available to the Agent
for value on the due date at such time and in such funds and
to such account with such bank as the Agent shall specify
from time to time.
23.2 Payments by the Agent
Save as otherwise provided herein, each payment received by
the Agent pursuant to Clause 23.1 (Payments to the Agent)
shall:
23.2.1 in the case of a payment received for the account of
any Borrower, be made available by the Agent to such
Borrower by application:
(a) first, in or towards payment the same day of
any amount then due from such Borrower
hereunder to the person from whom the amount
was so received; and
<PAGE>
(b) secondly, in or towards payment the same day
to the account of such Borrower with such bank
in London as such Borrower shall have
previously notified to the Agent for this
purpose; and
23.2.2 in the case of any other payment, be made
available by the Agent to the person entitled
to receive such payment in accordance with
this Agreement (in the case of a Bank, for the
account of the Facility Office) for value as
soon as reasonably practicable after receipt
by the Agent by transfer to such account of
such person with such bank in London as such
person shall have previously notified to the
Agent.
23.3 No Set-off
All payments required to be made by an Obligor hereunder
shall be calculated without reference to any set-off or
counterclaim and shall be made free and clear of and without
any deduction for or on account of any set-off or
counterclaim.
23.4 Clawback
Where a sum is to be paid hereunder to the Agent for account
of another person, the Agent shall not be obliged to make the
same available to that other person until it has been able to
establish to its satisfaction that it has actually received
such sum, but if it does so and it proves to be the case that
it had not actually received such sum, then the person to
whom such sum was so made available shall on request refund
the same to the Agent together with an amount sufficient to
indemnify the Agent against any cost or loss it may have
suffered or incurred by reason of its having paid out such
sum prior to its having received such sum.
23.5 Partial Payments
If and whenever a payment is made by an Obligor hereunder the
Agent may apply the amount received towards the obligations
of the Obligors under this Agreement in the following order:
23.5.1 first, in or towards payment of any unpaid costs and
expenses of each of the Agent and the Arranger;
23.5.2 secondly, in or towards payment pro rata of any
accrued interest due but unpaid;
<PAGE>
23.5.3 thirdly, in or towards payment pro rata of any
principal due but unpaid; and
23.5.4 fourthly, in or towards payment pro rata of any other
sum due but unpaid.
23.6 Variation of Partial Payments
The order of payments set out in Clause 23.5 (Partial
Payments) shall override any appropriation made by the
Obligor to which the partial payment relates but the order
set out in sub-clauses 23.5.2, 23.5.3 and 23.5.4 of
Clause 23.5 (Partial Payments) may be varied if agreed by all
the Banks.
24. SET-OFF
24.1 Contractual Set-off
Each Obligor authorises each Bank to apply any credit balance
to which such Obligor is entitled on any account of such
Obligor with such Bank in satisfaction of any sum due and
payable from such Obligor to such Bank hereunder but unpaid.
For this purpose, each Bank is authorised to purchase with
the moneys standing to the credit of any such account such
other currencies as may be necessary to effect such
application.
24.2 Set-off not Mandatory
No Bank shall be obliged to exercise any right given to it by
Clause 24.1 (Contractual Set-off).
25. SHARING
25.1 Payments to Banks
If a Bank (a "Recovering Bank") applies any receipt or
recovery from an Obligor to a payment due under this
Agreement and such amount is received or recovered other than
in accordance with Clause 23 (Payments), then such Recovering
Bank shall:
25.1.1 notify the Agent of such receipt or recovery; and
25.1.2 at the request of the Agent, promptly pay to the
Agent an amount (the "Sharing Payment") equal to such
receipt or recovery less any amount which the Agent
determines may be retained by such Recovering Bank as
its share of any payment to be made in accordance
with Clause 23.5 (Partial Payments).
<PAGE>
25.2 Redistribution of Payments
The Agent shall treat the Sharing Payment as if it had been
paid by the relevant Obligor and distribute it between the
Finance Parties (other than the Recovering Bank) in
accordance with Clause 23.5 (Partial Payments).
25.3 Recovering Bank's Rights
The Recovering Bank will be subrogated into the rights of the
parties which have shared in a redistribution pursuant to
Clause 25.2 (Redistribution of Payments) in respect of the
Sharing Payment (and the relevant Obligor shall be liable to
the Recovering Bank in an amount equal to the Sharing
Payment).
25.4 Repayable Recoveries
If any part of the Sharing Payment received or recovered by a
Recovering Bank becomes repayable and is repaid by such
Recovering Bank, then:
25.4.1 each party which has received a share of such Sharing
Payment pursuant to Clause 25.2 (Redistribution of
Payments) shall, upon request of the Agent, pay to
the Agent for account of such Recovering Bank an
amount equal to its share of such Sharing
Payment; and
25.4.2 such Recovering Bank's rights of subrogation in
respect of any reimbursement shall be cancelled and
the relevant Obligor will be liable to the
reimbursing party for the amount so reimbursed.
25.5 Exception
This Clause 25 shall not apply if the Recovering Bank would
not, after making any payment pursuant hereto, have a valid
and enforceable claim against the relevant Obligor.
25.6 Recoveries Through Legal Proceedings
If any Bank intends to commence any action in any court it
shall give prior notice to the Agent and the other Banks. If
any Bank shall commence any action in any court to enforce
its rights hereunder and, as a result thereof or in
connection therewith, receives any amount, then such Bank
shall not be required to share any portion of such amount
with any Bank which has the legal right to, but does not,
join in such action or commence and diligently prosecute a
separate action to enforce its rights in another court.
26. THE AGENT, THE ARRANGER AND THE BANKS
<PAGE>
26.1 Appointment of the Agent
Each of the Arranger and the Banks hereby appoints the Agent
to act as its agent in connection herewith and authorises the
Agent to exercise such rights, powers, authorities and
discretions as are specifically delegated to the Agent by the
terms hereof together with all such rights, powers,
authorities and discretions as are reasonably incidental
thereto.
26.2 Agent's Discretions
The Agent may:
26.2.1 assume, unless it has, in its capacity as agent for
the Banks, received notice to the contrary from any
other party hereto, that (a)any representation made or
deemed to be made by an Obligor in connection herewith
is true, (b) no Event of Default or Potential Event of
Default has occurred, (c) no Obligor is in breach of
or default under its obligations hereunder and (d) any
right, power, authority or discretion vested herein
upon an Instructing Group, the Banks or any other
person or group of persons has not been exercised;
26.2.2 assume that the Facility Office of each Bank is that
notified to it by such Bank in writing prior to the
date hereof (or, in the case of a Transferee, at the
end of the Transfer Certificate to which it is a party
as Transferee) until it has received from such Bank a
notice designating some other office of such Bank to
replace its Facility Office and act upon any such
notice until the same is superseded by a further such
notice;
26.2.3 engage and pay for the advice or services of any
lawyers, accountants, surveyors or other experts whose
advice or services may to it seem necessary, expedient
or desirable and rely upon any advice so obtained;
26.2.4 rely as to any matters of fact which might reasonably
be expected to be within the knowledge of an Obligor
upon a certificate signed by or on behalf of such
Obligor;
26.2.5 rely upon any communication or document believed by it
to be genuine;
<PAGE>
26.2.6 refrain from exercising any right, power or discretion
vested in it as agent hereunder unless and until
instructed by an Instructing Group as to whether or
not such right, power or discretion is to be exercised
and, if it is to be exercised, as to the manner in
which it should be exercised; and
26.2.7 refrain from acting in accordance with any
instructions of an Instructing Group to begin any
legal action or proceeding arising out of or in
connection with this Agreement until it shall have
received such security as it may require (whether by
way of payment in advance or otherwise) for all costs,
claims, losses, expenses (including legal fees) and
liabilities together with any VAT thereon which it
will or may expend or incur in complying with such
instructions.
26.3 Agent's Obligations
The Agent shall:
26.3.1 promptly inform each Bank of the contents of any
notice or document received by it in its capacity as
Agent from an Obligor hereunder;
26.3.2 promptly notify each Bank of the occurrence of any
Event of Default or any default by an Obligor in the
due performance of or compliance with its obligations
under this Agreement of which the Agent has written
notice from any other party hereto;
26.3.3 save as otherwise provided herein, act as agent
hereunder in accordance with any instructions given to
it by an Instructing Group, which instructions shall
be binding on the Arranger and the Banks; and
26.3.4 if so instructed by an Instructing Group, refrain from
exercising any right, power or discretion vested in it
as agent hereunder.
The Agent's duties to the Banks under this Agreement are
solely mechanical and administrative in nature.
26.4 Excluded Obligations
Notwithstanding anything to the contrary expressed or implied
herein, neither the Agent nor the Arranger shall:
<PAGE>
26.4.1 be bound to enquire as to (a) whether or not any
representation made or deemed to be made by an Obligor
in connection herewith is true, (b) the occurrence or
otherwise of any Event of Default or Potential Event
of Default, (c) the performance by an Obligor of its
obligations hereunder or (d) any breach of or default
by an Obligor of or under its obligations hereunder;
26.4.2 be bound to account to any Bank for any sum or the
profit element of any sum received by it for its own
account;
26.4.3 be bound to disclose to any other person any
information relating to any member of the Group if (a)
such person, on providing such information expressly
stated to the Agent or, as the case may be, the
Arranger, that such information was confidential or
(b) such disclosure would or might in its opinion
constitute a breach of any law or be otherwise
actionable at the suit of any person;
26.4.4 be under any obligations other than those for which
express provision is made herein; or
26.4.5 be or be deemed to be a fiduciary for any other party
hereto.
26.5 Indemnification
Each Bank shall, in its Proportion, from time to time on
demand by the Agent, indemnify the Agent, against any and all
costs, claims, losses, expenses (including legal fees) and
liabilities together with any VAT thereon which the Agent may
incur, otherwise than by reason of its own gross negligence
or wilful misconduct, in acting in its capacity as agent
hereunder (other than any which have been reimbursed by the
Borrowers pursuant to Clause 21.1 (Borrowers' Indemnity)).
26.6 Exclusion of Liabilities
Each Bank confirms that it has read the "Important Notice" in
the Information Memorandum, that it has complied with the
Recipients' Obligations (as defined in the Important Notice)
and, accordingly, that it enters into this Agreement on the
basis of the Important Notice. In particular, each of the
Banks accepts that it is entering into this Agreement in
reliance only on the representations of the Obligors in this
Agreement and on its own investigations, that it has not
relied on the Arranger and that, except that in the case of
fraud, it neither has nor will have any claims against the
<PAGE>
Arranger arising from or in connection with this Agreement.
Similarly, each of the Banks accepts that the Important
Notice in the Information Memorandum is applicable also to
the Agent as if the Agent had been named in addition to the
Arranger in the Important Notice. Except in the case of
gross negligence or wilful default, none of the Agent and the
Arranger accepts any responsibility:
26.6.1 for the adequacy, accuracy and/or completeness of the
Information Memorandum or any other information
supplied by the Agent or the Arranger, by an Obligor
or by any other person in connection with this
Agreement, the transactions herein contemplated or any
other agreement, arrangement or document entered into,
made or executed in anticipation of, pursuant to or in
connection with this Agreement;
26.6.2 for the legality, validity, effectiveness, adequacy or
enforceability of this Agreement or any other
agreement, arrangement or document entered into, made
or executed in anticipation of, pursuant to or in
connection with this Agreement; or
26.6.3 for the exercise of, or the failure to exercise, any
judgement, discretion or power given to any of them by
or in connection with this Agreement or any other
agreement, arrangement or document entered into, made
or executed in anticipation of, pursuant to or in
connection with this Agreement.
Accordingly, none of the Agent and the Arranger shall be
under any liability (whether in negligence or otherwise) in
respect of such matters, save in the case of gross negligence
or wilful misconduct.
26.7 No Actions
Each of the Banks agrees that it will not assert or seek to
assert against any director, officer or employee of the Agent
or the Arranger any claim it might have against any of them
in respect of the matters referred to in Clause 26.6
(Exclusion of Liabilities).
26.8 Business with the Group
The Agent and the Arranger may accept deposits from, lend
money to and generally engage in any kind of banking or other
business with any member of the Group, whether or not it may
or does lead to a conflict with the interests of any of the
<PAGE>
Banks. Similarly, the Agent or the Arranger may undertake
business with or for others even though it may lead to a
conflict with the interests of any of the Banks
26.9 Resignation
The Agent may resign its appointment hereunder at any time
without assigning any reason therefor by giving not less than
thirty days' prior notice to that effect to each of the other
parties hereto, provided that no such resignation shall be
effective until a successor for the Agent is appointed in
accordance with the succeeding provisions of this Clause 26.
26.10 Successor Agent
If the Agent gives notice of its resignation pursuant to
Clause 26.9 (Resignation), then any reputable and experienced
bank or other financial institution may be appointed as a
successor to the Agent by an Instructing Group during the
period of such notice but, if no such successor is so
appointed, the Agent may appoint such a successor itself
provided that in each case, the prior written consent of the
Company (not to be unreasonably withheld or delayed) to any
successor to the Agent is obtained.
26.11 Rights and Obligations
If a successor to the Agent is appointed under the provisions
of Clause 26.10 (Successor Agent), then (a) the retiring
Agent shall be discharged from any further obligation
hereunder but shall remain entitled to the benefit of the
provisions of this Clause 26 and (b) its successor and each
of the other parties hereto shall have the same rights and
obligations amongst themselves as they would have had if such
successor had been a party hereto.
26.12 Own Responsibility
It is understood and agreed by each Bank that at all times it
has itself been, and will continue to be, solely responsible
for making its own independent appraisal of and investigation
into all risks arising under or in connection with this
Agreement including, but not limited to:
26.12.1 the financial condition, creditworthiness, condition,
affairs, status and nature of each member of the
Group;
26.12.2 the legality, validity, effectiveness, adequacy and
enforceability of this Agreement and any other
agreement, arrangement or document entered into, made
or executed in anticipation of, pursuant to or in
connection with this Agreement;
<PAGE>
26.12.3 whether such Bank has recourse, and the nature and
extent of that recourse, against an Obligor or any
other person or any of their respective assets under
or in connection with this Agreement, the
transactions herein contemplated or any other
agreement, arrangement or document entered into, made
or executed in anticipation of, pursuant to or in
connection with this Agreement; and
26.12.4 the adequacy, accuracy and/or completeness of the
Information Memorandum and any other information
provided by the Agent or the Arranger, an Obligor, or
by any other person in connection with this
Agreement, the transactions contemplated herein or
any other agreement, arrangement or document entered
into, made or executed in anticipation of, pursuant
to or in connection with this Agreement.
Accordingly, each Bank acknowledges to the Agent and the
Arranger that it has not relied on and will not hereafter
rely on the Agent and the Arranger or any of them in respect
of any of these matters.
26.13 Receipt of Information by Agent
Any information or document received by the Agent shall only
be treated as having been received by the Agent if the same
has been delivered to the Agent's agency department in
accordance with Clause 31 (Notices). Accordingly, any
information or documents received by the Agent other than by
its agency department in accordance with Clause 31 (Notices)
is not by reason of that receipt to be treated as having been
received by the Agent unless and until the Agent's agency
department has received actual notice of the same in
accordance with such Clause. Save as expressly set out in
this Agreement and, unless the Agent's agency department
shall have received information or documents in accordance
with Clause 31 (Notices) the Agent shall have no duty to
disclose, and shall not be liable for the failure to
disclose, any information or documents, that re communicated
to or obtained by the Agent.
26.14 Confidential Information
Notwithstanding anything to the contrary expressed or implied
herein and without prejudice to Clause 26.13 (Receipt of
Information by Agent), the Agent shall not as between itself
and the Banks be bound to disclose to any Bank or other
person any information which is supplied by any member of the
Group to the Agent in its capacity as agent hereunder for the
<PAGE>
Banks and which is identified by such member of the Group at
the time it is so supplied as being confidential information
provided that the consent of the relevant member of the Group
to such disclosure shall not be required in relation to any
information which in the reasonable opinion of the Agent
relates to an Event of Default or Potential Event of Default
or in respect of which the Banks have given a confidentiality
undertaking in a form satisfactory to the Agent.
26.15 Delegation
The Agent may delegate, transfer or assign to any subsidiary
of The Chase Manhattan Corporation or its successor from time
to time all or any of the rights, powers, authorities and
discretions vested in it hereunder and the performance of its
duties in accordance herewith, and such delegation, transfer
or assignment may be made upon such terms and subject to such
conditions (including the power to sub-delegate) and subject
to such regulations as the Agent may think fit (and the term
"Agent" as used in this Agreement shall include any such
delegate).
27. ASSIGNMENTS AND TRANSFERS
27.1 Binding Agreement
This Agreement shall be binding upon and enure to the benefit
of each party hereto and its or any subsequent successors and
Transferees.
27.2 No Assignments and Transfers by the Obligors
No Obligor shall be entitled to assign or transfer all or any
of its rights, benefits and obligations hereunder.
27.3 Assignments and Transfers by Banks
Any Bank may, at any time, assign all or any of its rights
and benefits hereunder or transfer in accordance with
Clause 27.6 (Transfers by Banks) all or any of its rights,
benefits and obligations hereunder to a bank or financial
institution, provided that (save in the case of any such
assignment or transfer (a) to any subsidiary or holding
company, or to any subsidiary of any holding company, of such
Bank or (b) to any other Bank and subject as provided in
Clause 27.4 (Deemed Consent)) no such assignment or transfer
may be made without the prior written consent of the
Borrowers, such consent not to be unreasonably withheld or
delayed.
<PAGE>
27.4 Deemed Consent
Any consent required to be given by a party under Clause 27.3
(Assignments and Transfers by Banks) shall be deemed to have
been given unless such party shall have notified the
requesting party to the contrary within five Business Days
after the request for such consent.
27.5 Assignments by Banks
If any Bank assigns all or any of its rights and benefits
hereunder in accordance with Clause 27.3 (Assignments and
Transfers by Banks), then, unless and until the assignee has
delivered a notice to the Agent confirming in favour of the
Agent, the Arranger and the other Banks that it shall be
under the same obligations towards each of them as it would
have been under if it had been an original party hereto as a
Bank (whereupon such assignee shall become a party hereto as
a "Bank"), the Obligors, the Agent, the Arranger and the
other Banks shall not be obliged to recognise such assignee
as having the rights against each of them which it would have
had if it had been such a party hereto.
27.6 Transfers by Banks
If any Bank wishes to transfer all or any of its rights,
benefits and/or obligations hereunder as contemplated in
Clause 27.3 (Assignments and Transfers by Banks), then such
transfer may be effected by the delivery to the Agent of a
duly completed Transfer Certificate executed by such Bank and
the relevant Transferee in which event, on the later of the
Transfer Date specified in such Transfer Certificate and the
fifth Business Day after (or such earlier Business Day
endorsed by the Agent on such Transfer Certificate falling on
or after) the date of delivery of such Transfer Certificate
to the Agent:
27.6.1 to the extent that in such Transfer Certificate the
Bank party thereto seeks to transfer by novation its
rights, benefits and obligations hereunder, each of
the Obligors and such Bank shall be released from
further obligations towards one another hereunder and
their respective rights against one another shall be
cancelled (such rights and obligations being referred
to in this Clause 27.6 as "discharged rights and
obligations");
<PAGE>
27.6.2 each of the Obligors and the Transferee party thereto
shall assume obligations towards one another and/or
acquire rights against one another which differ from
such discharged rights and obligations only insofar as
such Obligor and such Transferee have assumed and/or
acquired the same in place of such Obligor and such
Bank;
27.6.3 the Agent, the Arranger, such Transferee and the other
Banks shall acquire the same rights and benefits and
assume the same obligations between themselves as they
would have acquired and assumed had such Transferee
been an original party hereto as a Bank with the
rights, benefits and/or obligations acquired or
assumed by it as a result of such transfer and to that
extent the Agent, the Arranger and the relevant Bank
shall each be released from further obligations to
each other hereunder; and
27.6.4 such Transferee shall become a party hereto as a
"Bank".
27.7 Assignment and Transfer Fees
On the date upon which an assignment takes effect pursuant to
Clause 27.5 (Assignments by Banks) or a transfer takes effect
pursuant to Clause 27.6 (Transfers by Banks) the relevant
assignee or Transferee shall pay to the Agent for its own
account a fee of 1,000.
27.8 Disclosure of Information
Any Bank may disclose to any person:
27.8.1 to (or through) whom such Bank assigns or transfers
(or may potentially assign or transfer) all or any of
its rights, benefits and obligations hereunder;
27.8.2 with (or through) whom such Bank enters into (or may
potentially enter into) any sub-participation in
relation to, or any other transaction under which
payments are to be made by reference to, this
Agreement or any Obligor; or
27.8.3 to whom information may be required to be disclosed by
any applicable law,
such information about any Obligor or the Group and this
Agreement as such Bank shall consider appropriate provided
<PAGE>
that the person to whom such information is disclosed shall
give a confidentiality undertaking in a form agreed between
the Company and the Agent.
27.9 Notification
The Agent shall within fourteen days after receiving a
Transfer Certificate notify the Borrowers and the other Banks
of any assignment or transfer completed pursuant to this
Clause 27.
28. ECONOMIC AND MONETARY UNION
28.1 Commencement
Clause 28.2 (Redenomination and Alternative Currencies) to
Clause 28.8 (Rounding and Other Consequential Changes)
(inclusive) shall come into effect on the Commencement Date
provided that, if and to the extent that any such
Clause relates to any state (or the currency of such state)
which shall not be a participating member state on the
Commencement Date, such Clause shall come into effect in
relation to such state (and the currency of such state) on
and from the date on which such state becomes a participating
member state.
28.2 Redenomination and Alternative Currencies
Each obligation under this Agreement which has been
denominated in a national currency unit shall be
redenominated into the euro unit in accordance with EMU
legislation. However, if and to the extent that any EMU
legislation provides that an amount (which is (a) denominated
either in the euro or in the national currency unit of a
participating member state and (b) payable within that
participating member state by crediting an account of the
creditor) can be paid by the debtor either in the euro unit
or in that national currency unit, each party to this
Agreement shall be entitled to pay or repay any such amount
either in the euro unit or in such national currency unit.
28.3 Advances
Any Advance in the currency of a participating member state
shall be made in the euro unit.
28.4 Business Days
In relation to any amount denominated or to be denominated in
the euro or a national currency unit, any reference to a
Business Day shall be construed as a reference to a day
(other than a Saturday or Sunday) on which commercial banks
are generally open for business in:
<PAGE>
28.4.1 London and Chicago; and
28.4.2 the principal financial centre in such participating
member state as the Agent shall from time to time
nominate for this purpose.
28.5 Payments to the Agent
Clause 23.1 (Payments to the Agent) shall be construed so
that, in relation to the payment of any amount of euro units
or national currency units, such amount shall be made
available to the Agent in immediately available, freely
transferable, cleared funds to such account with such bank in
such principal financial centre in such participating member
state (or in London) as the Agent shall from time to time
nominate for this purpose.
28.6 Payments by the Agent to the Banks
Any amount payable by the Agent to the Banks under this
Agreement in the currency of a participating member state
shall be paid in the euro unit.
28.7 Payments System and the Agent
In relation to the payment of any amount denominated in the
euro or in a national currency unit, the Agent shall not be
liable to any Borrower or any of the Banks for any delay, or
the consequences of any delay, in the crediting to any
account of any amount required by this Agreement to be paid
by the Agent if the Agent shall have taken all relevant steps
to achieve, on the date required by this Agreement, the
payment of such amount in immediately available, freely
transferable, cleared funds (in the euro unit or, as the case
may be, in a national currency unit) to the account with the
bank in the principal financial centre in the participating
member state which any Borrower or, as the case may be, any
Bank shall have specified for such purpose. In this
Clause 28.7, "all relevant steps" means all such steps as may
be prescribed from time to time by the regulations or
operating procedures of such clearing or settlement system as
the Agent may from time to time reasonably determine for the
purpose of clearing or settling payments of the euro.
28.8 Rounding and Other Consequential Changes
Without prejudice and in addition to any method of conversion
or rounding prescribed by any EMU legislation:
<PAGE>
28.8.1 each reference in this Agreement to a minimum amount
(or an integral multiple thereof) in a national
currency unit to be paid to or by the Agent shall be
replaced by a reference to such reasonably comparable
and convenient amount (or an integral multiple
thereof) in the euro unit as the Agent may from time
to time specify; and
28.8.2 save as expressly provided in this Clause 28, this
Agreement shall be subject to such reasonable changes
of construction as the Agent may from time to time
specify to be necessary or appropriate to reflect the
introduction of or changeover to the euro in
participating member states,
provided that this Clause shall not reduce or increase any
actual or contingent liability arising under this Agreement.
29. CALCULATIONS AND EVIDENCE OF DEBT
29.1 Basis of Accrual
Interest and commitment commission shall accrue from day to
day and shall be calculated on the basis of a year of
365 days (or, in any case where market practice differs, in
accordance with market practice) and the actual number of
days elapsed.
29.2 Quotations
If on any occasion a Reference Bank or Bank fails to supply
the Agent with a quotation required of it under the foregoing
provisions of this Agreement, the rate for which such
quotation was required shall be determined from those
quotations which are supplied to the Agent, provided that, in
relation to determining LIBOR, this Clause 29.2 shall not
apply if only one Reference Bank supplies a quotation.
29.3 Evidence of Debt
Each Bank shall maintain in accordance with its usual
practice accounts evidencing the amounts from time to time
lent by and owing to it hereunder.
29.4 Control Accounts
The Agent shall maintain on its books a control account or
accounts in which shall be recorded (a) the amount of any
Advance or Unpaid Sum and each Bank's share therein, (b) the
amount of all principal, interest and other sums due or to
become due from an Obligor and each Bank's share therein and
(c) the amount of any sum received or recovered by the Agent
hereunder and each Bank's share therein.
<PAGE>
29.5 Prima Facie Evidence
In any legal action or proceeding arising out of or in
connection with this Agreement, the entries made in the
accounts maintained pursuant to Clause 29.3 (Evidence of
Debt) and Clause 29.4 (Control Accounts) shall be prima facie
evidence of the existence and amounts of the specified
obligations of the Obligors.
29.6 Certificates of Banks
A certificate of a Bank as to (a) the amount by which a sum
payable to it hereunder is to be increased under Clause 9.1
(Tax Gross-up), (b) the amount for the time being required to
indemnify it against any such cost, payment or liability as
is mentioned in Clause 9.2 (Tax Indemnity) or Clause 11.1
(Increased Costs) or (c) the amount of any credit, relief,
remission or repayment as is mentioned in Clause 10.3 (Tax
Credit Payment) or Clause 10.4 (Tax Credit Clawback) shall,
in the absence of manifest error, be prima facie evidence of
the existence and amounts of the specified obligations of the
Obligors.
29.7 Agent's Certificates
A certificate of the Agent as to the amount at any time due
from the Borrower hereunder or the amount which, but for any
of the obligations of the Borrowers hereunder being or
becoming void, voidable, unenforceable or ineffective, at any
time would have been due from the Borrowers hereunder shall,
in the absence of manifest error, be conclusive for the
purposes of Clause 17 (Guarantee and Indemnity).
30. REMEDIES AND WAIVERS, PARTIAL INVALIDITY
30.1 Remedies and Waivers
No failure to exercise, nor any delay in exercising, on the
part of any Finance Party any right or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy prevent any further or other
exercise thereof or the exercise of any other right or
remedy. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies
provided by law.
30.2 Partial Invalidity
If, at any time, any provision hereof is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or
enforceability of the remaining provisions hereof nor the
<PAGE>
legality, validity or enforceability of such provision under
the law of any other jurisdiction shall in any way be
affected or impaired thereby.
31. NOTICES
31.1 Communications in Writing
Each communication to be made hereunder shall be made in
writing and, unless otherwise stated, shall be made by fax or
letter.
31.2 Addresses
Any communication or document to be made or delivered
pursuant to this Agreement shall (unless the recipient of
such communication or document has, by fifteen days' written
notice to the Agent, specified another address or fax number)
be made or delivered to the address or fax number:
31.2.1 in the case of the Obligors and the Agent, identified
with its name below; and
31.2.2 in the case of each Bank, notified in writing to the
Agent prior to the date hereof (or, in the case of a
Transferee, at the end of the Transfer Certificate to
which it is a party as Transferee),
provided that not more than one address may be specified by
each party pursuant to this Clause 31.2 at any time.
31.3 Delivery
Any communication or document to be made or delivered by one
person to another pursuant to this Agreement shall:
31.3.1 if by way of fax, be deemed to have been received when
a transmission report which confirms that the
transmission was successfully completed has been
printed; and
31.3.2 if by way of letter, be deemed to have been delivered
when left at the relevant address or, as the case may
be, ten days after being deposited in the post postage
prepaid in an envelope addressed to it at such
address,
<PAGE>
provided that any communication or document to be made or
delivered to the Agent shall be effective only when received
by its agency department and then only if the same is
expressly marked for the attention of the department or
officer identified with the Agent's signature below (or such
other department or officer as the Agent shall from time to
time specify for this purpose).
31.4 Notification of Changes
Promptly upon receipt of notification of a change of address
or fax number pursuant to Clause 31.2 (Addresses) or changing
its own address or fax number, the Agent shall notify the
other parties hereto of such change.
31.5 English Language
Each communication and document made or delivered by one
party to another pursuant to this Agreement shall be in the
English language or accompanied by a translation thereof into
English certified (by an officer of the person making or
delivering the same) as being a true and accurate translation
thereof.
32. COUNTERPARTS
This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same
instrument.
33. AMENDMENTS
33.1 Amendments
If the Agent has the prior consent of an Instructing Group,
the Agent and the Obligors may from time to time agree in
writing to amend this Agreement or to waive, prospectively or
retrospectively, any of the requirements of this Agreement
and any amendments or waivers so agreed shall be binding on
all the Finance Parties and the Obligors, provided that no
such waiver or amendment shall subject any party hereto to
any new or additional obligations without the consent of such
party.
33.2 Amendments Requiring the Consent of all the Banks
An amendment or waiver which relates to:
33.2.1 Clause 25 (Sharing) or this Clause 33;
<PAGE>
33.2.2 reducing the proportion of any amount received or
recovered in respect of any amount due from the
Borrowers hereunder to which any Bank is entitled;
33.2.3 a change in the principal amount of or currency of any
Advance, or extending the term of the Facility or the
Term of any Advance;
33.2.4 a change in the Margin, the amount or currency of any
payment of interest, fees or any other amount payable
hereunder to any Finance Party or deferral of the date
for payment thereof;
33.2.5 the conditions set out in sub-clause 3.3.3 of
Clause 3.3 (Drawdown Conditions) if an Event of
Default or Potential Event of Default which relates to
a Repeated Representation is continuing;
33.2.6 the definition of "Event of Default", "Instructing
Group" or "Potential Event of Default"; or
33.2.7 any provision which contemplates the need for the
consent or approval of all the Banks,
shall not be made without the prior consent of all the
Banks.
33.3 Exceptions
Notwithstanding any other provisions hereof, the Agent shall
not be obliged to agree to any such amendment or waiver if
the same would:
33.3.1 amend or waive this Clause 33, Clause 19 (Costs and
Expenses) or Clause 26 (The Agent, the Arranger and
the Banks); or
33.3.2 otherwise amend or waive any of the Agent's rights
hereunder or subject the Agent or the Arranger to any
additional obligations hereunder.
34. ADDITIONAL BORROWERS
34.1 Designation of Additional Borrowers
The Company may, with the prior written consent of the Agent
(after consultation with the Banks), which consent shall not
be unreasonably withheld or delayed, at any time designate
another member of the Group as an Additional Borrower.
<PAGE>
34.2 Accession of Additional Borrower
Such designation shall take effect and the member of the
Group so designated shall become an Additional Borrower on
the date the Agent receives in form and substance reasonably
satisfactory to it:
34.2.1 a Deed of Accession signed by each party to it other
than the Agent;
34.2.2 each of the documents referred to in Clause 4
(Conditions Precedent) of the Deed of Accession; and
34.2.3 such information relating to the member of the Group
to become a party to this Agreement in the capacity of
"Borrower" as the Agent may reasonably require.
35. GOVERNING LAW
This Agreement shall be governed by, and construed in
accordance with, English law.
36. JURISDICTION
36.1 English Courts
Each of the parties hereto irrevocably agrees for the benefit
of the Finance Parties that the courts of England shall have
non-exclusive jurisdiction to hear and determine any suit,
action or proceedings, and to settle any disputes, which may
arise out of or in connection with this Agreement
(respectively "Proceedings" and "Disputes") and, for such
purposes, irrevocably submits to the jurisdiction of such
courts.
36.2 New York Courts
Each of the parties hereto irrevocably agrees that the courts
of the State of New York and the courts of the United States
of America, in each case sitting in the county of New York,
shall have non-exclusive jurisdiction to hear and determine
any Proceedings and to settle any Disputes and, for such
purposes, irrevocably submits to the jurisdiction of such
courts.
36.3 Convenient Forum
The parties agree that the courts of England and the State of
New York are the most appropriate and convenient courts to
determine any proceedings and to settle Disputes between them
and, accordingly, that they will not argue to the contrary.
<PAGE>
36.4 Non-Exclusive Jurisdiction
This Clause 36 is for the benefit of the Finance Parties
only. As a result and notwithstanding Clauses 36.1 (English
Courts) and 36.2 (New York Courts), it does not prevent any
Finance Party from taking Proceedings in any other courts
with jurisdiction. To the extent allowed by law, the Finance
Parties may take concurrent Proceedings in any number of
jurisdictions.
36.5 Service of Process
Each Obligor agrees that the documents which start any
Proceedings and any other documents required to be served in
relation to those Proceedings may be served on it:
36.5.1 in connection with any Proceedings in England on HCEL
at the address identified with its name below; and
36.5.2 in connection with any Proceedings in New York on CT
Corp. at 2085 La Salle Street, Suite 824, Chicago,
Illinois 60604.
HCEL unconditionally accepts such appointment. If the
appointment of either of the persons mentioned in this
Clause 36.5 ceases to be effective, each of the Obligors
shall immediately appoint a further person in England or, as
the case may be, New York and, failing such appointment
within fifteen days, the Agent shall be entitled to appoint a
person by notice to each of the Obligors. Nothing contained
herein shall affect the right to serve process in any manner
permitted by law.
36.6 Waiver of Jury Trial
EACH OF THE PARTIES TO THIS AGREEMENT AGREES TO WAIVE
IRREVOCABLY ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE DOCUMENTS
REFERRED TO HEREIN OR ANY TRANSACTION CONTEMPLATED HEREIN.
This waiver is intended to apply to all Disputes. Each party
acknowledges that (a) this waiver is a material inducement to
enter into this Agreement, (b) it has already relied on this
waiver in entering into this Agreement and (c) it will
continue to rely on this waiver in future dealings. Each
party hereto represents that it has reviewed this waiver with
its legal advisers and that it knowingly and voluntarily
waives its jury trial rights after consultation with its
legal advisers. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
AS WITNESS the hands of the duly authorised representatives of the
parties hereto the day and year first before written.
<PAGE>
SCHEDULE 1
THE BANKS
Bank Commitment
Banca Nazionale del Lavoro S.p.A., London Branch 7,500,000
The Governor and Company of the Bank of Scotland 7,500,000
The Chase Manhattan Bank 7,500,000
Lloyds Bank Plc 7,500,000
Midland Bank plc 7,500,000
State Street Bank and Trust Company 7,500,000
-----------
45,000,000
<PAGE>
SCHEDULE 2
FORM OF TRANSFER CERTIFICATE
To: Chase Manhattan International Limited
TRANSFER CERTIFICATE
relating to the agreement (as from time to time amended, varied,
novated or supplemented, the "Facility Agreement") dated 18 December
1998 whereby a 45,000,000 revolving credit facility was made available
to Harris Chemical Europe Ltd, NAMSCO (UK) Ltd and Salt Union Limited
as original borrowers under the guarantee of IMC Global Inc. and IMC
Inorganic Chemicals Inc. by a group of banks on whose behalf Chase
Manhattan International Limited acted as agent in connection therewith.
1. Terms defined in the Facility Agreement shall, subject to any
contrary indication, have the same meanings herein. The terms
Bank and Transferee are defined in the schedule hereto.
2. The Bank (i) confirms that the details in the schedule hereto
under the heading "Bank's Commitment" or "Advance(s)"
accurately summarises its Commitment and/or, as the case may
be, its participation in, and the Term and Repayment Date of,
one or more existing Advances and (ii) requests the Transferee
to accept and procure the transfer by novation to the
Transferee of the portion specified in the schedule hereto of,
as the case may be, its Commitment and/or its participation in
such Advance(s) by counter-signing and delivering this Transfer
Certificate to the Agent at its address for the service of
notices specified in the Facility Agreement.
3. The Transferee hereby requests the Agent to accept this
Transfer Certificate as being delivered to the Agent pursuant
to and for the purposes of Clause 27.6 (Transfers by Banks) of
the Facility Agreement so as to take effect in accordance with
the terms thereof on the Transfer Date or on such later date as
may be determined in accordance with the terms thereof.
4. The Transferee confirms that it has received a copy of the
Facility Agreement together with such other information as it
has required in connection with this transaction and that it
has not relied and will not hereafter rely on the Bank to check
or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such
information and further agrees that it has not relied and will
not rely on the Bank to assess or keep under review on its
behalf the financial condition, creditworthiness, condition,
affairs, status or nature of the Obligors.
<PAGE>
5. The Transferee hereby undertakes with the Bank and each of the
other parties to the Facility Agreement that it will perform in
accordance with their terms all those obligations which by the
terms of the Facility Agreement will be assumed by it after
delivery of this Transfer Certificate to the Agent and
satisfaction of the conditions (if any) subject to which this
Transfer Certificate is expressed to take effect.
6. The Bank makes no representation or warranty and assumes no
responsibility with respect to the legality, validity,
effectiveness, adequacy or enforceability of the Facility
Agreement or any document relating thereto and assumes no
responsibility for the financial condition of the Obligors or
for the performance and observance by the Obligors of any of
its obligations under the Facility Agreement or any document
relating thereto and any and all such conditions and
warranties, whether express or implied by law or otherwise, are
hereby excluded.
7. The Bank hereby gives notice that nothing herein or in the
Facility Agreement (or any document relating thereto) shall
oblige the Bank to (a) accept a re-transfer from the Transferee
of the whole or any part of its rights, benefits and/or
obligations under the Facility Agreement transferred pursuant
hereto or (b) support any losses directly or indirectly
sustained or incurred by the Transferee for any reason
whatsoever including the non-performance by an Obligor or any
other party to the Facility Agreement (or any document relating
thereto) of its obligations under any such document. The
Transferee hereby acknowledges the absence of any such
obligation as is referred to in (a) or (b) above.
8. This Transfer Certificate and the rights, benefits and
obligations of the parties hereunder shall be governed by and
construed in accordance with English law.
<PAGE>
THE SCHEDULE
1. Bank:
2. Transferee:
3. Transfer Date:
4. Commitment:
Bank's Commitment Portion Transferred
5. Advance(s):
Amount of Term and
Bank's Participation Repayment Date Portion
Transferred
<PAGE>
[Transferor Bank] [Transferee Bank]
By: By:
Date: Date:
ADMINISTRATIVE DETAILS OF TRANSFEREE
Address:
Contact Name:
Account for Payments
in sterling:
Fax:
Telephone:
<PAGE>
SCHEDULE 3
CONDITIONS PRECEDENT
1. Duly executed copies of this Agreement and the Subordination
Deed.
2. In relation to each Obligor:
(a) a copy, certified as at the date of this Agreement a
true and up-to-date copy by an Authorised Signatory
of such Obligor, of the constitutional documents of
such Obligor;
(b) copy, certified as at the date of this Agreement a
true and up-to-date copy by an Authorised Signatory
of such Obligor, of an extract of a board resolution
of such Obligor approving the execution, delivery and
performance of this Agreement and the terms and
conditions hereof and authorising a named person or
persons to sign this Agreement and any documents to
be delivered by such Obligor pursuant hereto;
(c) a certificate of an Authorised Signatory of such
Obligor setting out the names and signatures of the
persons authorised to sign, on behalf of such
Obligor, this Agreement and any documents to be
delivered by such Obligor pursuant hereto; and
(d) a certificate of an Authorised Signatory of such
Obligor confirming that utilisation of the Facility
would not breach any restriction on its borrowing
powers.
3. A copy, certified as at the date of this Agreement a true
and up-to-date copy by an Authorised Signatory of such
Obligor, of each of the most recent Form 10-K, Form 10-Q and
Form 8-K (or their equivalents) lodged by an Obligor with
the Securities Exchange Commission.
4. A copy, certified as at the date of this Agreement a true
and complete copy, of the Deed of Release dated on or about
the date of this Agreement between HCEL and the Bank of
Scotland.
5. Certificate from an Authorised Signatory of the Company
confirming that the guarantee granted by it under Clause 17
(Guarantee and Indemnity) is within the limit on guarantees
in respect of UK operations stipulated in the resolutions
referred to in paragraph 2(b) above.
<PAGE>
6. An opinion of the General Counsel of the Company
satisfactory in form and substance to the Agent.
7. An opinion of the Obligors' US Counsel satisfactory in form
and substance to the Agent.
8. An opinion of the Banks' US Counsel satisfactory in form and
substance to the Agent.
9. An opinion of Clifford Chance, solicitors to the Arranger.
10. Evidence that CT Corp has agreed to act as the agent of the
Obligors for the service of process in New York.
<PAGE>
SCHEDULE 4
NOTICE OF DRAWDOWN
From: [Borrower]
To: Chase Manhattan International Limited
Dated:
Dear Sirs,
1. We refer to the agreement (the "Facility Agreement") dated
18 December 1998 and made between Harris Chemical Europe
Ltd, NAMSCO (UK) Ltd and Salt Union Limited as original
borrowers, IMC Global Inc and IMC Inorganic Chemicals Inc.
as guarantors, Chase Manhattan International Limited as
agent and the financial institutions named therein as
banks. Terms defined in the Facility Agreement shall have
the same meaning in this notice.
2. This notice is irrevocable.
3. We hereby give you notice that, pursuant to the Facility
Agreement and upon the terms and subject to the conditions
contained therein, we wish an Advance to be made to us as
follows:
4. Amount:
(a) Drawdown Date:
(b) Term:
5. We confirm that, at the date hereof, the Repeated
Representations are true in all material respects and no
Event of Default [or Potential Event of Default]( ) is
continuing.
6. The proceeds of this drawdown should be credited to
[insert account details].
Yours faithfully
------------------------
Authorised Signatory
for and on behalf of
[Name of Borrower]
<PAGE>
SCHEDULE 5
DETERMINATION OF MARGIN AND COMMITMENT COMMISSION
1. The Margin and Commitment Commission for a period will be the
applicable percentage rate per annum set out in the table below.
Margin Commitment Commission
Credit Rating (% per annum) (% per annum)
Level 1 0.60 0.30
Level II 0.65 0.30
Level III 1.00 0.45
Level IV 1.50 0.75
2. The credit ratings to be used for the purposes of this Schedule
are those assigned to the senior unsecured long-term debt
securities of the Company excluding any credit enhancement
provided by any person other than a member of the Group. Any
rating assigned to any other debt security of the Company shall
be disregarded.
3. The credit rating on any day is the credit rating in effect at
the close of business on that day.
4. If on any calculation date the Company has split ratings and the
ratings differential is more than one increment, the median
rating (or if none, the higher of the intermediate ratings)
shall apply.
5. For the purposes of this Schedule:
(a) "Level I Status" exists at any date if the Company long
term debt is rated BBB+ or higher by S&P or Baa1 or better
by Moody's;
(b) "Level II Status" exists at any date if:
(i) the Company long term debt is rated BBB or higher by
S&P or Baa2 or better by Moody's; and
(ii) Level I Status does not exist;
<PAGE>
(c) "Level III Status" exists at any date if:
(i) IMC Global Inc. long term debt is rated BBB- or
higher by S&P or Baa3 or better by Moody's; and
(ii) neither Level I Status nor Level II Status exists;
(d) "Level IV Status" exists at any date if no other status
exists;
(e) "Moody's" means Moody's Investor Services, Inc.; and
(f) "S&P" means Standard and Poor's Rating Services, a
division of The McGraw-Hill Companies, Inc.
<PAGE>
SCHEDULE 6
DEED OF ACCESSION
THIS DEED is made on [*]
BETWEEN
(1) [*] (the "Additional Borrower");
(2) IMC GLOBAL INC. and IMC INORGANIC CHEMICALS INC. (each, a
"Guarantor") on their own behalf and on behalf of each
Borrower; and
(3) CHASE MANHATTAN INTERNATIONAL LIMITED in its capacity as
agent under the Facility Agreement (the "Agent").
WHEREAS
(A) This Deed is supplemental to an agreement (the "Facility
Agreement") dated 18 December 1998 between HCEL, NAMSCO (UK)
Ltd and Salt Union Limited as Original Borrowers, IMC Global
Inc. and IMC Inorganic Chemicals Inc. as Guarantors, Chase
Manhattan International Limited as Agent, Chase Manhattan plc
as Arranger and Banks referred to therein.
(B) The Additional Borrower wishes to become a party to the
Facility Agreement in the capacity of Borrower.
NOW THIS DEED WITNESSES:
1. Definitions
Definitions in the Facility Agreement apply in this Deed
unless the context requires otherwise.
2. Interpretation
This Deed and the Facility Agreement shall be read and
construed as one document and references in the Facility
Agreement to the Facility Agreement (however expressed) shall
be read and construed as references to the Facility Agreement
this Deed together.
<PAGE>
3. Accession of Additional Borrower
In consideration of the Banks through the Agent agreeing to
the Additional Borrower becoming an Additional Borrower under
Clause 34 (Additional Borrowers) of the Facility Agreement,
the Additional Borrower agrees to observe and be bound by the
terms and provisions of the Facility Agreement to the extent
that they apply to the Borrower as if it were an original
party to the Facility Agreement.
4. Conditions Precedent
The obligations of the Agent and each Bank under this Deed
are subject to the condition precedent that the Agent has
received the following documents in form and substance
satisfactory to it:
4.1 a copy, certified by a director of the Additional Borrower as
being a true, complete and up-to-date, of the certificate of
incorporation and constituent documents of the Additional
Borrower;
4.2 a certificate of a director of the Additional Borrower which:
4.2.1 attaches an extract of the minutes of a meeting of
the directors of the Additional Borrower which
authorise (a) the execution, delivery and
performance on behalf of the Additional Borrower of
this Deed, (b) named persons to execute this Deed on
behalf of the Additional Borrower and to give any
notices or certificates required in connection with
it and which certifies that such minutes are a true
and complete copy and that such resolutions have not
been varied or rescinded;
4.2.2 a copy, certified to be a true copy, of the
signature of each Authorised Signatory of the
Additional Borrower;
4.2.3 a certificate of a director of the Additional
Borrower confirming that the aggregate of the
borrowings of the Additional Borrower do not or, as
the case may be, would not if fully drawn, exceed
any borrowing limit contained in the Additional
Borrower's constitutional documents or in any trust
deed or other agreement or instrument to which the
Additional Borrower is a party;
<PAGE>
4.2.4 an English law legal opinion in a form satisfactory
to the Agent (together with a legal opinion (in a
form satisfactory to the Agent) from the
jurisdiction of incorporation of the Additional
Borrower (if the Additional Borrower is not
established in England)); and
4.2.5 [*Insert any other conditions precedent as Agent may
reasonably require*]
5. Representations
The Additional Borrower makes each of the Repeated
Representations made by the Obligors (other than the Company)
in respect of itself only and the representation set out in
Clause 14.14 (Claims Pari Passu).
6. Confirmation of Guarantee
Each Guarantor confirms that its obligations and the rights,
powers and remedies conferred upon the Agent and the Banks
under Clause 17 (Guarantee and Indemnity) of the Facility
Agreement shall not be discharged, impaired or otherwise be
affected by this Deed.
7. Notices
The Additional Borrower's address for notices is identified
beneath its name below.
8. Governing Law
This Deed shall be governed by and construed in accordance
with English law.
- - -------------------------------------------------
*Insert provisions to deal with process agent and jurisdiction
clause if Additional Borrower is a foreign company.
<PAGE>
IN WITNESS whereof this Deed has been duly executed on the day and year
first above written.
Additional Borrower
[Name of Additional Borrower]
By:
Address: [*]
Fax: [*]
Attention: [*]
Guarantors
IMC GLOBAL INC.
By:
IMC INORGANIC CHEMICALS INC.
By:
Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
By:
<PAGE>
SIGNATURES
The Original Borrowers
HARRIS CHEMICAL EUROPE LTD
By: David Goadby
Address: 3 Kings Court, Manor Farm Road
Manor Park
Runcorn
Cheshire WA7 1HR
Fax: 01928 579 432
NAMSCO (UK) LTD
By: David Goadby
Address: 3 Kings Court, Manor Farm Road
Manor Park
Runcorn
Cheshire WA7 1HR
Fax: 01928 579 432
SALT UNION LIMITED
By: David Goadby
Address: 3 Kings Court, Manor Farm Road
Manor Park
Runcorn
Cheshire WA7 1HR
Fax: 01928 579 432
<PAGE>
The Guarantors
IMC GLOBAL INC.
By: E. Paul Dunn, Jr
Address: 2100 Sanders Road
Northbrook
Illinois 60062
USA
Fax: 1 847 205 4900
IMC INORGANIC CHEMICALS INC.
By: E. Paul Dunn, Jr
Address: 2100 Sanders Road
Northbrook
Illinois 60062
USA
Fax: 1 847 205 4900
<PAGE>
The Arranger
CHASE MANHATTAN plc
By: Philippe GOFFIN
The Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
By: Kathryn Jepson
Address: 125 London Wall
London EC2Y 5AS
Fax: 0171 777 2360
Attention: Loan Agency
The Banks
BANCA NAZIONALE DEL LAVORO S.p.A.,
LONDON BRANCH
By: John Barnett
Giulia Billard
THE GOVERNOR AND COMPANY OF
THE BANK OF SCOTLAND
By: Gavin Johnstone
THE CHASE MANHATTAN BANK
By: Kathryn Jepson
LLOYDS BANK PLC
By: Simon Gledhill
<PAGE>
MIDLAND BANK plc
By: Mark Stapley
STATE STREET BANK AND TRUST COMPANY
By: Richard T. Flood III
EXHIBIT 10.75
IMC GLOBAL (EUROPE) LIMITED
IMC GLOBAL (UK) LIMITED
SALT UNION LIMITED
Original Borrowers
IMC GLOBAL INC.
IMC INORGANIC CHEMICALS INC.
Guarantors
CHASE MANHATTAN INTERNATIONAL LIMITED
Agent
=====================================
AMENDMENT AGREEMENT
relating to a
45,000,000 Revolving Loan Agreement
dated 18 December 1998
=====================================
<PAGE>
THIS AGREEMENT is made on 15 January 1999
BETWEEN
(1) IMC GLOBAL (EUROPE) LIMITED (formerly Harris Chemical Europe
Ltd) (registered no. 3107016), IMC GLOBAL (UK) LIMITED
(formerly Namsco (UK) Ltd) (registered no. 2654680) and SALT
UNION LIMITED (registered no. 2654529) (each, an "Original
Borrower");
(2) IMC GLOBAL INC. and IMC INORGANIC CHEMICALS INC. (each, a
"Guarantor"); and
(3) CHASE MANHATTAN INTERNATIONAL LIMITED as agent for the
Arranger and the Banks (the "Agent").
RECITALS
(A) The Banks have agreed to extend certain financial
accommodation to the Borrowers under the Principal Agreement.
(B) The parties wish to amend the Principal Agreement in the
manner set out herein.
IT IS AGREED as follows.
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
The following definitions apply unless the context requires
otherwise.
"Effective Date" means 31 December 1998.
"Principal Agreement" means the 45,000,000 Revolving Loan
Agreement dated 18 December 1998 between IMC Global (Europe)
Limited, IMC Global (UK) Limited and Salt Union Limited as
borrowers, IMC Global Inc. and IMC Inorganic Inc. as
guarantors, Chase Manhattan plc as arranger, Chase Manhattan
International Limited as agent and the banks referred to
therein.
1.2 Interpretation
Clauses 1.2 (Interpretation) to 1.10 (Economic and Monetary
Union Definitions) of the Principal Agreement shall apply
(having made all necessary changes) in this Agreement as if
set out in full.
<PAGE>
1.3 Principal Agreement Definitions
Definitions in the Principal Agreement apply in this Agreement
unless the context requires otherwise.
2. AMENDMENT
2.1 Amendment
On and from the date on which the Agent confirms to the Banks
and the Company that it has received the fees referred to in
Clause 3 (Condition Precedent), the Principal Agreement shall
be amended, with effect from the Effective Date, by inserting
a new sub-clause 15.13.3 at the end of sub-clause 15.13.2 of
Clause 15.13 (Leverage Ratio) as follows.
"15.13.3 The calculation of the Leverage Ratio shall:
(a) exclude the pre-tax non-recurring charges not in
excess of approximately $325,000,000 incurred by the
Company in, and reflected in the Company's
consolidated statement of income for, the fiscal year
ended 31 December 1998; and
(b) disregard classification of the Company's Agribusiness
unit as a discontinued operation,
provided that if within 3 months of the date hereof (the
"Relevant Period") the Company's credit rating (as defined
in Schedule 5 (Determination of Margin and Commitment
Commission) at the date hereof (the "Current Credit
Rating") is:
(c) downgraded and not subsequently restored to the
Current Credit Rating during the Relevant Period, the
increase in the Margin and the commitment commission
provided for by Schedule 5 (Determination of Margin
and Commitment Commission) shall take effect from the
date hereof; and
(d) downgraded but subsequently restored to the Current
Credit Rating at any time during the Relevant Period,
the increase in the Margin and the commitment
commission provided for by Schedule 5 (Determination
of Margin and Commitment Commission) shall:
(i) accrue from the date hereof up to and including
the date on which the Current Credit Rating is
restored; and
<PAGE>
(ii) thereafter the Margin and the commitment
commission shall reduce in accordance with the
provisions of Schedule 5 (Determination of Margin
and Commitment Commission).
For the avoidance of doubt, if at any time during the
Relevant Period the Current Credit Rating is affirmed in
circumstances where the Current Credit Rating has not
previously been downgraded, paragraphs (c) and (d) of this
sub-clause 15.13.3 shall not apply."
2.2 Waiver
2.2.1 The Finance Parties waive any Event of Default or
Potential Event of Default which has been disclosed in
writing by the Company to the Agent prior to the date
hereof.
2.2.2 Nothing herein shall affect the rights of the Finance
Parties in respect of the occurrence of any other Event
of Default or Potential Event of Default which has
arisen but which has not been disclosed in writing by
the Company or any other Obligor to the Agent prior to
the date hereof.
3. CONDITION PRECEDENT
This Agreement shall be of no force and effect until the Agent
shall have received on account of each Bank an amendment fee
in an amount equal to 0.05 per cent. of each Bank's
Commitment.
4. REPRESENTATIONS
On the date hereof, each Obligor makes each of the Repeated
Representations save that the Company does not make the
representation set out in sub-clause 14.4.1 of Clause 14.4
(Financial Information) of the Principal Agreement.
5. CONTINUITY AND FURTHER ASSURANCE
5.1 Continuing Obligations
The provisions of Principal Agreement shall, save as amended
by this Agreement, continue in full force and effect.
<PAGE>
5.2 Further Assurance
Each Obligor shall, at the request of the Agent and at its own
expense, do all such acts and things necessary or desirable to
give effect to the amendments effected or to be effected by
this Agreement.
6. STAMP TAXES
The Company shall pay all stamp, registration and other taxes
to which this Agreement or any judgment given in connection
herewith is or at any time may be subject and shall, from time
to time on demand of the Agent, indemnify the Finance Parties
against any liabilities, costs, claims and expenses resulting
from any failure to pay or any delay in paying any such tax.
7. MISCELLANEOUS
7.1 Incorporation of Provisions
The following provisions of the Principal Agreement shall
apply (having made all necessary changes) in this Agreement as
if set out in full:
7.1.1 Clause 27.1 (Binding Agreement);
7.1.2 Clause 30 (Remedies and Waiver, Partial Invalidity);
7.1.3 Clause 35 (Governing Law); and
7.1.4 Clause 36 (Jurisdiction).
7.2 Counterparts
This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same
instrument.
7.3 One Agreement
This Agreement and the Principal Agreement shall be read and
construed as one document. References in the Principal
Agreement (however expressed) to the Principal Agreement shall
be read and construed as the Principal Agreement as amended by
this Agreement.
AS WITNESS the hands of duly authorised representatives of the parties
hereto the day and year first before written.
<PAGE>
SIGNATURES
Original Borrowers
IMC GLOBAL (EUROPE) LIMITED
By: /s/ David Goadby
------------------------------
IMC GLOBAL (UK) LIMITED
By: /s/ David Goadby
------------------------------
SALT UNION LIMITED
By: /s/ David Goadby
------------------------------
Guarantors
IMC GLOBAL INC.
By: /s/ E.Paul Dunn Jr.
------------------------------
IMC INORGANIC CHEMICALS INC.
By: /s/ E. Paul Dunn Jr.
------------------------------
Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
By: /s/ Kathryn Jepson
------------------------------
EXHIBIT 10.76
FACILITY AGREEMENT
BANQUE NATIONALE DE PARIS
(ARBN 000 000 117)
THE FIRST NATIONAL BANK OF CHICAGO
(ARBN 065 752 918)
AND
PENRICE SODA PRODUCTS PTY LTD
(ACN 008 206 942)
AND
PENRICE HOLDINGS PTY
(ACN 008 125 835)
AND
IMC GLOBAL AUSTRALIA PTY LTD
(ACN 072 639 902)
AND
IMC GLOBAL INC
PIPER ALDERMAN
Lawyers
167 Flinders Street
Adelaide SA 5000
Australia
Telephone: (08) 8205-3333
Facsimile: (08) 8205-3300
MG [ML]85806
<PAGE>
TABLE OF CONTENTS
Page No.
1. INTERPRETATION 1
1.1 Definitions 1
1.2 Construction 6
2. THE FACILITY 7
3. ACCOMMODATION LIMIT 7
4. PURPOSE OF THE FACILITY 7
5. DRAWDOWN 8
5.1 Time of Drawdown Notice 8
5.2 Drawdown Notice 8
5.3 Term Loan 8
5.4 Liability for Drawdown 8
5.5 Minimum Drawn 8
5.6 Provision of Funds 8
5.7 Payment to Borrower 8
6. INTEREST 9
7. FEES, EXPENSES & CHARGES 10
7.1 Establishment Fee 10
7.2 Line Fee 10
7.3 Agency Fee 11
7.4 Expenses 11
7.5 Government Charges 11
7.6 Increase in Costs by Government Action 12
7.7 Gross Up 13
8. REPAYMENTS 14
8.1 Payment of Principal 15
8.2 Redrawing 15
8.3 Early Repayment of Advances 15
8.4 Manner of Payment 16
8.5 Distribution by Administrative Agent 16
8.6 Non-receipt of funds by the Administrative
Agent from the Borrower 17
9. TERMINATION OF FACILITY 17
10. CONDITIONS PRECEDENT 17
10.1 To the Facility 18
10.2 To A Drawdown 18
<PAGE>
11. REPRESENTATIONS AND WARRANTIES 19
11.1 Status 19
11.2 This Agreement 19
11.3 Third Party Rights 19
11.4 Authorities 19
11.5 Other Commitments 20
11.6 Litigation 20
11.7 Taxation 20
11.8 Unsecured Liabilities 20
11.9 Trusts 20
11.10 Insurance Policies 20
11.11 Adverse Circumstances 20
11.12 Year 2000 Compliance 21
11.13 No Misrepresentation 21
12. GENERAL OBLIGATIONS 21
12.1 Authorities 22
12.2 Notice of Default 22
12.3 Law 22
12.4 Access 22
12.5 Negative Pledge 22
12.6 Inspection 23
12.7 Public Information 23
13. FINANCIAL INFORMATION 24
14. EVENTS OF DEFAULT 24
15. INDEMNITIES 26
16. GUARANTEE 27
17. GENERAL INDEMNITY 27
18. INDEMNITY FOR AVOIDANCE OF GUARANTEED MONEY 27
19. PAYMENT OF GUARANTEED MONEY 28
20. ACKNOWLEDGEMENT 28
21. PRINCIPAL OBLIGATION 28
22. CONTINUING GUARANTEE AND INDEMNITY 28
23. AMOUNT OF GUARANTEED MONEY 29
24. UNCONDITIONAL NATURE OF OBLIGATIONS 29
<PAGE>
25. NO COMPETITION 30
26. PROOF BY LENDER 31
27. AVOIDANCE OF PAYMENTS 31
28. RETENTION OF AGREEMENT 32
29. EXCLUSION OF MORATORIUM 32
30. NON-EXERCISE OF GUARANTOR'S RIGHTS 32
31. PAYMENTS IN GROSS 32
32. SUSPENSE ACCOUNT 32
33. APPOINTMENT OF ADMINISTRATIVE AGENT 33
34. POWERS AND DUTIES OF ADMINISTRATIVE AGENT 33
35. GENERAL IMMUNITY 34
36. NO RESPONSIBILITY FOR LOANS ETC 34
37. ACTING ON INSTRUCTIONS OF LENDER 34
38. ADMINISTRATIVE AGENT AND LEGAL ADVISERS 35
39. RELIANCE ON DOCUMENTS AND LEGAL ADVICE 35
40. AGENT'S INDEMNIFICATION 35
41. LENDER CREDIT DECISIONS 36
42. RESIGNATION OF ADMINISTRATIVE AGENT 36
43. CERTIFICATIONS 37
44. UNLAWFULNESS 37
45. AUTHORITY TO DEBIT ACCOUNTS 38
46. NO WAIVER 38
47. MERGER 38
48. TIME OF THE ESSENCE 38
49. SET OFF 39
<PAGE>
50. APPROPRIATION 40
51. SUCCESSORS 40
52. ASSIGNMENT 40
53. NOTICES 40
54. OTHER DOCUMENTS 41
55. AMENDMENT 42
56. GOVERNING LAW AND JURISDICTION 42
57. SEVERANCE 42
58. COUNTERPARTS 42
59. ENTIRE AGREEMENT 42
<PAGE>
AGREEMENT made the 23 day of September, 1998
BETWEEN: BANQUE NATIONALE DE PARIS (ARBN 000 000 117) of 12
Castlereagh Street, Sydney, New South Wales (Lender)
AND: THE FIRST NATIONAL BANK OF CHICAGO (ARBN 065 752 918) of 70
Hindmarsh Square, Adelaide, South Australia (Administrative
Agent)
AND: PENRICE SODA PRODUCTS PTY LTD (ACN 008 206 942) of Solvay
Road, Osborne, South Australia 5017 (Soda)
AND: PENRICE HOLDINGS PTY (ACN 008 125 835) of Solvay Road,
Osborne, South Australia 5017 (Holdings)
AND: IMC GLOBAL AUSTRALIA PTY LTD (ACN 072 639 902) of Solvay
Road, Osborne. South Australia 5017 (IMC)
AND: IMC GLOBAL INC, a Delaware Corporation of 2100 Sanders
Road, Northbrook, Illinois 60062, 6142 (Guarantor)
INTRODUCTION
A. The Borrower and the Guarantor have requested that the Lender
provide or continue to provide certain financial accommodation
to the Borrower.
B. The Lender desires to provide or to continue to provide such
financial accommodation to the Borrower upon and subject to the
terms and conditions of this Agreement.
OPERATIVE PROVISIONS
SECTION A
1. INTERPRETATION
1.1 Definitions
In this Agreement unless the context otherwise requires:
"Accommodation Limit" means:
(a) in respect of the Revolving Credit Facility,
A$1,666,666.67;
(b) in respect of the Term Loan Facility,
A$8,333,333.33;
<PAGE>
or such other amounts (expressed in Australian dollars)
which the Lender and the Borrower may agree upon in
writing, from time to time.
"Administrative Agent" means The First National Bank of
Chicago (ARBN 065 752 918) or any other person appointed
as Administrative Agent for the purposes of this
Agreement.
"Advance" means any cash advance drawn under this
Facility (including a Tenn Loan).
"this Agreement" means this Agreement and any other
agreement expressed to be supplemental to this Agreement
to which the parties to this Agreement are parties and
any amendments to any such document.
"Announcement Date" means the date on which Standard and
Poors Rating Agency announces a rating change of the
long term unsecured debt of the Guarantor.
"Approved Purposes" means the refinancing of borrowings
of the Borrower at the date of this Agreement and
general working capital requirements.
"Authorised Officer" means:
(a) in relation to the Borrower each director and
secretary of the Borrower and each person from
time to time notified in writing by the Borrower
to the Administrative Agent to be an Authorised
Officer;
(b) in relation to the Lender and the Administrative
Agent each director and secretary and each
employee of the Lender or the Administrative
Agent (as the case may be) whose title includes
the word "Manager" or "Director" and includes
any person acting in any such capacity; and
(c) in relation to the Guarantor each person whose
title is Chairman, President, Chief Executive
Officer, Chief Financial Officer Senior or
Treasurer and includes any person acting in any
such capacity.
<PAGE>
"BBSY Rate" means in respect of any day and in respect
of any Interest Period the rate per centum per annum
quoted on the page numbered "BBSY" of the Reuters
Monitor System under the heading "Average Bid Rate" for
such Interest Period at or about 10:00 am (Sidney time)
on such day or on the first day of such Interest Period
(rounded up, if necessary, to the nearest two decimal
places) PROVIDED THAT if in respect of any Interest
Period the Average Bid Rate cannot be determined in
accordance with the foregoing procedures then "Average
Bid Rate" for that Interest Period shall mean such rate
as is agreed between the Administrative Agent and the
Borrower having regard to comparable indices then
available and in the absence of any such agreement shall
be the rate stipulated by the Administrative Agent
having regard to such comparable indices.
"Bill" has the same meaning as in the Bills of Exchange
Act 1909 (Cwth) (but does not include a cheque).
"the Borrower" means Soda, Holdings and IMC and includes
each of their successors and permitted assigns.
"Business Day" means a day on which Australian trading,
banks are open for a full range of banking business in
the metropolitan area of Adelaide, South Australia,
Melbourne, Victoria and Sydney, New South Wales.
"Drawdown" means an Advance made by the Lender to the
Borrower pursuant to this Agreement.
"Drawdown Date" means a date upon which an Advance is
made by the Lender to the Borrower pursuant to this
Agreement.
"Drawdown Notice" means a notice of intention of the
Borrower to borrow or redraw hereunder being a notice in
the form or the effect of the form in Schedule 1.
"Event of Default" means anv of the events designated as
such in this Agreement.
"Facility" means the Revolving Credit Facility and the
Term Loan Facility made available under this Agreement
and each of them separately.
<PAGE>
"Financial Year" means the period from 1 January to the
next following 31 December or such other period of one
(1) year as the Borrower and the Administrative Agent
may agree in writing from time to time.
"Guarantor" means IMC Global Inc. a Delaware
Corporation.
"the Lender" means [insert name of lending bank] and its
successors and assigns
"Interest Period" means each period of each Advance
being a period of 30, 60, 90, 120, 150, or 180 days or
such other period as the Lender and the Borrower may
agree provided that such period shall not extend beyond
the Repayment Date.
"Law" means the Corporations Law or the relevant
corresponding legislation applicable to companies
incorporated outside of the Commonwealth of Australia.
"Loans" means the aggregate of all Principal Moneys
which are from time to time owing (including
contingently owing) or unpaid to the Lender and all
other monies from time to time owing (including
contingently owing) and unpaid to the Lender or the
Administrative Agent under this Agreement.
"Overdraft Rate" means the rate of interest equal to 2%
above the rate of interest referred to in clause
6.1.1(a).
"Permitted Security" means a Security Interest which:
(a) has been approved by or is in favour of the
Lender;
(b) is a statutory charge on any property in relation
to taxes while those taxes are not due for
payment unless the Lender is satisfied that the
amount of or obligation to pay those taxes is
being contested in good faith and on reasonable
grounds;
<PAGE>
(c) secures the purchase price of goods, plant or
equipment purchased by the Borrower from a third
party on anns length terms and used by it in the
ordinary course of its business, is in favour of
such third party and is over such goods, plant or
equipment;
(d) is over property of a person who after the date
of this document becomes a Subsidiary of the
Borrower provided:
(i) it existed at the time that person became
a Subsidiary of the Borrower;
(ii) it was not created in anticipation of or
in connection with that person becoming a
Subsidiary of the Borrower; and
(iii) the financial indebtedness outstanding
and actually secured by it at the time
that person became a Subsidiary of the
Borrower is not increased and the date
for repayment of that financial
indebtedness is not extended;
(e) secures or is an operating or finance lease hire
purchase or rental purchase agreement in respect
of plant and equipment with unrelated third
parties in the ordinary course of its business
and on commercial terms provided that the total
commitment of the Borrower (including any option
for purchase) for the whole of the terms of such
leases or hire purchase or rental purchase
agreements shall not exceed A$3,500,000 at any
one time.
"Principal Moneys" means the aggregate of the Advances
outstanding.
"Quarter" means each quarter period ending on the last
days of March, June, September and December in each
year.
"Repayment Date" means:
(a) in respect of the Revolving Credit Facility the
date being two years from the date of this
Agreement; and
<PAGE>
(b) in respect of the Term Loan Facility the date
being five years from the date of this Agreement;
or such later dates as may be agreed in writing
between the Lender and the Borrower.
"Revolving Credit Facility" means the cash advance
revolving credit facility made available under this
Agreement.
"Security Interest" means any security or preferential
interest or arrangement of any kind in any asset or
other right of or arrangement of any kind with any
creditor to have its claim satisfied before other
creditors with or from the proceeds of any asset and any
deposit of money by way of security but does not include
a Permitted Security.
"Subsidiary" means:
(a) a subsidiary as defined in the Law; or
(b) in respect of a person any entity of which that
person owns or controls, or is in a position to
own or control whether directly or indirectly,
more than fifty per cent (50%) of the capital or
voting rights;
and includes any subsidiary formed or acquired after the
date of this Agreement.
"Term Loan" means any term loan drawn under the Term
Loan Facility.
"Term Loan Facility" means the term loan facility made
available under this Agreement;
"Year 2000 Problem" means the risk that computer
applications used by the Borrower or the Guarantor or
any of their Subsidiaries. suppliers or customers may be
unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date
after 31 December 1999.
<PAGE>
1.2 Construction
In this Agreement unless the context otherwise requires:
(a) A reference to any Act of Parliament or to any
section or provision thereof shall be read as if
the words "or any statutory modification or re-
enactment thereof or any statutory provision
substituted therefore" were added to such
reference.
(b) A reference to winding up shall when applied to
individuals be deemed to refer to bankruptcy.
(c) A reference to an accounting term or "Accounting
Standards" is to be interpreted in accordance
with approved accounting standards and practices
under the Law, and, where not inconsistent with
those accounting standards and practices
generally accepted principles and practices in
the jurisdiction under which the relevant
accounts are prepared consistently applied to a
body corporate or as between bodies corporate and
over time. A reference to "consolidated" in
relation to accounts or other financial
information. data or statistics with respect to a
person means treated for accounting purposes as
if accounting standards and generally accepted
accounting principles for the creation of
consolidated accounts applicable to a holding-
company and its subsidiaries applied to the
person.
(d) References to sub-clauses. clauses and schedules
are references to sub-clauses clauses, and
schedules of this Agreement.
(e) References to any agreement. license or other
instrument shall be deemed to include references
to such agreement. license or other instrument as
varied or replaced from time to time.
<PAGE>
(f) Words importing any gender shall include all
other genders: words importing individuals shall
include partnerships and corporations and vice
versa words importing the singular number shall
include the plural and vice versa, the index (if
any) and headings are for convenience and shall
not affect the interpretation of this Agreement.
(g) Where under or pursuant to this Agreement or
anything done under this Agreement the day on or
by which any act, matter or thing is to be done
is not a Business Day such act, matter or thing
may be done on the next succeeding day which is a
Business Day (except with respect to the payment
of monies payable under this Agreement which
shall be made on the immediately preceding, day
which is a Business Day).
(h) An agreement representation or warranty on the
part of two or more persons binds them Jointly
and each of them severally.
(i) (subject to clause 5.4) where there are two or
more persons included in the expression "the
Borrower" a reference to "the Borrower" shall
where the context so pen-nits include a reference
to each of such persons separately and any two or
more or such persons together.
SECTION B
2. THE FACILITY
2.1 In consideration of the premises the Lender agrees to
furnish to the Borrower the Facility as a committed
facility upon and subject to the terms and conditions in
this Agreement.
2.2 The Facility will be made available in Australian
currency.
3. ACCOMMODATION LIMIT
3.1 At any one time the aggregate amount of Advances
outstanding shall not exceed the Accommodation Limit.
<PAGE>
3.2 the Lender shall not be obliaed to make any Advance to
the Borrower if to so do would result in the aggregate
amount of Advances outstanding exceeding the
Accommodation Limit.
3.3 In the event that the Borrower is at any time in breach
of clause 3.1 the Borrower will make payment to the
Lender on demand of any amount necessary, to remedy such
breach.
4. PURPOSE OF THE FACILITY
Financial accommodation granted by the Lender to the Borrower
under this Agreement shall be used solely for the Approved
Purposes and the Borrower shall not use the same for any other
purpose except with the prior written approval of the Lender to
do otherwise. Neither the Lender nor the Administrative Agent
shall have any responsibility to see to the application of the
financial accommodation by the Borrower.
5. DRAWDOWN
5.1 Time of Drawdown Notice
Whenever the Borrower intends to borrow or redraw
hereunder it shall give the Administrative Agent a
Drawdown Notice not later than 2:00 pm (Melbourne Time)
two (2) Business Days before the proposed date of such
borrowing, redrawing or issuing.
5.2 Drawdown Notice
A Drawdown Notice shall be under the common seal of the
Borrower or under the hand of an Authorised Officer of
the Borrower.
5.3 Term Loan
The Term Loan Facility shall be drawndown in full within
seven days of the date of this Agreement.
5.4 Liability for Drawdown
The only party liable as principal debtor under this
Agreement in relation to any Advance is the party that
draws or obtains that Advance.
<PAGE>
5.5 Minimum Drawn
Each Drawdown under the Revolving Credit Facility shall
be a minimum of A$1,000,000 and shall be in multiples of
A$250,000.
5.6 Provision of Funds
If the Borrower gives a Drawdown Notice then, pursuant to
this Agreement. the Lender must provide to the
Administrative Agent in same day funds in not later than
12 noon (Melbourne time) on the specified drawdown date
and in accordance with that Drawdown Notice.
5.7 Payment to Borrower
On receipt of the amounts paid to it by the Lender under
clause 5.5, the Administrative Agent must pay the same in
same day funds to the Borrower or as directed by that
Borrower.
6. INTEREST
6.1 The Borrower shall pay to the Administrative Agent for
the account of the Lender interest as follows:
6.1.1 Interest Rate
(a) Interest on each Advance pursuant to the
Revolving Credit Facility not being an
advance under the Overdraft Facility) for
each Interest Period at the rate per
centum per annum determined by the Lender
to be the aggregate of:
(i) a margin of point three per centurn
(3%) per annum; and
(ii) the BBSY Rate.
<PAGE>
(b) Interest on each Advance being a Tenn Loan
for each Interest Period at the rate per
centurn per annum determined by the Lender
to be the aggregate of:
(i) a margin of point three five per
cent (.35%) per annum; and
(ii) the BBSY Rate.
6.1.2 Calculation
(a) Interest shall accrue from day to day and
be payable on so much as the Lender may
have advanced to the Borrower and which
remains owing to the Lender from time to
time.
(b) All sums falling due hereunder by way of
interest or fees on a per annum percentage
basis shall be calculated on the basis of a
365 day year for advances or fees payable
in Australian currency and a 360 day year
for all other currencies for the actual
number of days elapsed.
6.1.3 Payment
Interest shall be paid at the end of each
Interest Period (and at the expiration of each 90
day period during such Interest Period if any
Interest Period is greater than 90 days)save that
the last interest payment shall be made on the
Repayment Date.
6.2 The Borrower shall pay interest on all monies due and
unpaid by the Borrower under or pursuant to this
Agreement at the rate of two (20%) per cent above the
Overdraft Rate which applies as at the date such monies
become due and payable. All interest which accrues under
this sub-clause during any calendar month shall
become due and payable on the last Business Day of that
calendar month.
6.3 All interest due and unpaid at the option of the Lender
shall be capitalized on a monthly basis and bear
interest accordingly.
<PAGE>
6.4 The Borrower shall on the expiration of each Interest
Period in respect of a Term Loan provide to the
Administrative Agent an Interest Period Notice in the
form of Schedule 2 and if it shall fail to provide such
Notice to the Administrative Agent. the Interest Period
shall be ninety (90) days.
7. FEES, EXPENSES & CHARGES
7.1 Establishment Fee
The Borrower shall pay to the Administrative Agent for
the account of the Lender an establishment fee of
A$12,500 such fee to be paid on the date of this
Agreement and not to be refundable to the Borrower in
any event.
7.2 Line Fee
7.2.1 The Borrower shall pay to the Administrative
Agent for the account of the Lender:-
(a) a line fee of the percentage per annum
set out hereunder on the Accommodation
Limit in respect of the Revolving Credit
Facility; and
(b) a line fee of the percentage per annum
set out hereunder on the Accommodation
Limit in respect of the Term Loan
Facility.
Rating by Standard and Poors Rating Agency Percentage of
the long term unsecured debt of the Guarantor
BBB+ .25%
BBB .3%
BBB- .35%
<PAGE>
7.2.2 The adjustments to line fee percentage rates
prescribed in clause 7.2.1 resulting from
changes, if any, to the ratings by Standard
Poors Rating Agency shall be effective and
payable from and including the Announcement
Date. If an adjustment is required because
the Administrative Agent was not immediately
aware of an announced change such adjustment
shall be made by the Administrative Agent and
shall be retroactive to the Announcement Date.
The Borrower agrees to pay to the
Administrative Agent for the account of the
Lender its due share of, and the Lender agrees
to fund the Administrative Agent and the
Administrative Agent agrees to repay to the
Borrower its due share of any adjustment
resulting from a retroactive adjustment of
ratings which shall be paid by the
Administrative Agent or the Borrower, as the
case may be, on or before the fifth day
following the Administrative Agent's
calculation of and advice to the Borrower of
the amount to be adjusted.
7.2.3 The line fee shall be payable Quarterly in
advance and shall accrue from the date hereof.
7.3 Agency Fee
The Borrower shall pay to the Administrative Agent such
agency fees as are agreed upon between the
Administrative Agent and the Borrower.
7.4 Expenses
Whether or not the Borrower shall draw down under this
Agreement the Borrower shall forthwith reimburse the
Lender and the Administrative Agent for the reasonable
charges and expenses incurred by the Lender and the
Administrative Agent:
7.4.1 in connection with the negotiation preparation
or execution of this Agreement; and
<PAGE>
7.4.2 in connection with the enforcement of, or the
exercise or (except, to the extent proved
groundless and unreasonable) the purported or
attempted exercise of any right, authority or
remedy conferred on the Lender or the
Administrative Agent under or by virtue of this
Agreement;
including in each case the fees and expenses of legal
advisers on a solicitor and own client basis, financial
institutions duty and duty passed on to the Lender or
the Administrative Agent by any bank or financial
institution and all stamp duty levied on or in
connection with this Agreement or any payment or the
receipt of any payment under this Agreement except for
those incurred or payable due to delay or negligence on
the part of the Lender or the Administrative Agent or
any of their servants and agents.
7.5 Government Charges
The Borrower shall forthwith pay any and all taxes or
charges (other than taxes on the net overall income of
the Lender) imposed by governmental authorities in any
jurisdiction which may have been paid or may be payable
or determined to be payable in connection with:
7.5.1 the execution, delivery, performance or
enforcement of this Agreement;
7.5.2 on or in respect of any transaction
contemplated by this Agreement;
7.5.3 any other matter or thing done or arising out
of or in connection with this Agreement; or
7.5.4 any transaction related to this Agreement;
(including, without limiting the generality of the
foregoing, stamp duty and financial institutions duty)
and shall indemnify the Lender and the Administrative
Agent against any and all liabilities with respect to or
resulting from delay or omission to pay such taxes or
charges including any fines or penalties (save those due
to delay or negligence on the part of the Lender or the
Administrative Agent).
<PAGE>
7.6 Increase in Costs by Government Action
If any law, regulation or regulatory requirement or
judgment, order or direction of any court, tribunal or
authority binding on the Lender in any jurisdiction not
in force at the date of this Agreement, or if compliance
by the Lender with any direction, request or requirement
(whether or not having the force of law but which if not
having the force of law it is the practice of
responsible financial institutions to observe) of any
competent governmental or other authority, or if
observation by the Lender of any reasonable practice of
commercial lenders in Australia or the United States
shall:
7.6.1 subject the Lender to taxes or chance the
basis of taxation of the Lender with respect
to any payment under this Agreement; or
7.6.2 impose, modify or deem applicable any reserve
or prudential or capital adequacy requirements
or require the making or the varying of terms
of any special deposits against or in respect
of any assets or liabilities (whether
contingent or otherwise) of, deposits with or
for the account of. or loans by, the Lender;
or
7.6.3 impose on the Lender any other conditions with
respect to this Agreement or its obligations
under this Agreement;
and if, as a result of any of the foregoing:
7.6.4 the cost to the Lender of making or keeping
the Facility available or otherwise
performing, its obligations under this
Agreement or allocating its capital resources
is increased; or
7.6.5 the amount payable or the effective rate of
return on its overall capital to the Lender
under this Agreement is reduced; or
7.6.6 the Lender makes a payment or foregoes or
suffers a reduction in a return on or
calculated by reference to any amount payable
to it under this Agreement;
<PAGE>
then, and in each such case, the Lender shall notify the
Borrower and give the Borrower the option exercisable by
notice in writing to the Lender within ten (10) Business
Days of receipt of notice of the Lender of:
7.6.7 paying an amount or amounts to the Lender from
time to time on demand to compensate the
Lender in full for any cost or reduction of
the kind referred to effective from the date
on which the cost or reduction is actually
incurred by the Lender; or
7.6.8 terminating this Agreement on the first to
occur of the expiration of sixty days from the
date of the notice of option given by the
Lender to the Borrower pursuant to this Clause
7.6 and the Repayment Date by paying to the
Lender the debt owing to it on that date with
accrued interest and all other monies payable
under this Agreement, together with an amount
determined by the Lender to compensate it up
to that date for any actual cost or reduction
of the type referred to.
If the Borrower fails to make an election the Borrower
shall be deemed to have made the election in sub-
paragraph 7 of this clause. The Lender's certificate in
respect of any cost or reduction of the kind referred to
shall be prima facie evidence of the incurring of any
such cost or reduction, except in the case of manifest
error.
Without prejudice to the Lender's rights under clause
7.6 the Lender will at the request of the Borrower
negotiate in good faith with the Borrower with a view to
finding a way of minimising any increased cost.
<PAGE>
7.7 Gross Up
7.7.1 Subject to clause 7.7.3) if at any time any
applicable law, regulation or regulatory
requirement of any government authority,
monetary agency or central bank in Australia
requires the Borrower or the Guarantor to make
any deduction or withholding in respect of
taxes (excluding payments made by the Borrower
pursuant to notices received by the Borrower
under Section 218 or 255 of the Income Tax
Assessment Act or Section 74 of the Sales Tax
Act or other analogous legislation relating to
default by the Lender in payment of taxes due
by the Lender) from any payment due under this
Agreement:
(a) the sum due from the Borrower or the
Guarantor in respect of the payment
shall be increased to the extent
necessary to ensure that, after the
making of the deduction or withholding,
the Lender receives a net sum equal to
the sum which it would have received
had no such deduction or withholding
been required to be made; and
(b) the Borrower and the Guarantor shall
indemnify the Lender against any losses
or costs incurred by the Lender by
reason of any failure of the Borrower
or the Guarantor to make any such
deduction or withholding.
The Borrower and the Guarantor shall promptly
deliver to the Administrative Agent any
receipts, certificates or other proof
evidencing the amounts (if any) paid or
payable in respect of any to such deduction or
withholding, ether with any other
information which the Administrative Agent may
reasonably require.
<PAGE>
7.7.2 If the Lender or any person on its behalf is
required by any applicable law regulation or
regulatory requirement of any government
authority, monetary agency or central bank to
make any deduction or withholding from, or any
payment on or calculated by reference to, any
amount received or receivable under this
Agreement (other than taxes payable on the
overall net income of the Lender) then
(without prejudice to sub-paragraph 1 of this
clause) the Borrower and the Guarantor shall
upon demand indemnify and hold harmless the
Lender against any such deduction, withholding
or payment together with any related cost,
loss, expense, interest. penalties or other
liability by payment to each such person of
such amounts and in such currencies as the
person concerned may certify are required to
compensate it for any such deduction,
withholding or payment together with any
related cost, loss, expense, interest,
penalties or other liability.
7.7.3 If the Borrower is required by any applicable
law in Australia to make any withholding in
respect of taxes from any payment due under
this Agreement as result of the Lender ceasing
to be taxed under Australian law as the
Australian branch of a foreign company the
Borrower shall not be obliged to increase such
payment pursuant to clause 7.7.1 until the
expire of the then current Interest Period in
respect of the Advance to which the payment
relates.
8. REPAYMENTS
8.1 Payment of Principal
8.1.1 The Borrower shall repay to the Administrative
Agent each Advance (other than a Term Loan) at
the end of the term of each Interest Period or
on the Repayment Date (whichever first occurs)
together with interest to the day of repayment
provided always that:
<PAGE>
(a) the Lender may. in its sole discretion
and without prejudice to its rights
contained in this Agreement, at any time
and from time to time elect to extend the
term of such Advance or Advances; and/or
(b) in the event that the Borrower does not
nominate an Interest Period the Interest
Period shall be as determined by the
Lender or in the absence of any such
determination by the Lender that Interest
Period shall be ninety (90) days.
8.1.2 The Borrower shall repay to the Administrative
Agent the Term Loan by four equal annual
installments of $2,083,333.33) each, the first
of such installments to be paid on the date
being two years from the date of this Agreement
and thereafter on each anniversary of the date
of this Agreement.
8.2 Redrawing
8.2.1 Any part of the Facility repaid at the
conclusion of the Interest Period relative
thereto shall (except in the event of any Term
Loan) be available to be redrawn in whole or in
part by the Borrower at any time prior to the
Repayment Date subject always to the provisions
of this Agreement.
8.2.2 No repayment of the Term Loan shall be
available for redrawing.
8.3 Early Repayment of Advances
8.3.1 The Borrower may repay an Advance in whole (but
not in part) before its due date , if, but only
if:
<PAGE>
(a) the Borrower gives the Administrative
Agent at least 5 Business Days (or if
repayment is being made as a result of
the change in the taxation status of the
Lender referred to in clause 7.7.3. the
lesser of 5 Business Days or the number
of Business Days from the change of such
status to the expire date of the then
current Interest Period in respect of
such Advance) irrevocable notice in
writing of the Borrower's intention to
repay;
(b) the Advance together with all interest
accrued thereon to the date of repayment
are paid in full;
(c) the Borrower makes payment of all moneys
payable pursuant to sub-clause .3.2 of
this clause;
(d) the Borrower makes payment on the day of
payment specified in the notice;
8.3.2 In the event that the Borrower wishes to make
early repayment pursuant to sub-clause .3.1 of
this clause or if by reason of an Event of
Default or for any other reason early repayment
of an Advance in whole or in part is made by a
Borrower or is demanded by the Lender the
Borrower shall pay to the Lender in addition to
all other moneys then payable an amount
sufficient to compensate and to indemnify the
Lender for and against all losses (including
loss of profits), costs, damages and expenses
which the Lender determines that the Lender
will or is likely to suffer or incur as a
result of such early repayment. Without in any
way limiting or modifying the operation of the
foregoing, the Borrower acknowledges that the
Lender may endeavor to arrange or enter into an
interest rate swap agreement or other
commitment (either in relation to an Advance in
particular or generally in relation to the
<PAGE>
business of the Lender) and may as a
consequence of this (whether directly or
indirectly) suffer or incur loss of
opportunity, losses, costs, damages or expenses
in the event that early repayment of an Advance
is made.
8.3.3 It is acknowledged by the Lender that no moneys
shall be payable to the Lender pursuant to
clause 83.2 in respect of payment of an Advance
if such payment is made on the last day of an
Interest Period in respect of such Advance.
8.4 Manner of Payment
8.4.1 All payments by the Borrower under this
Agreement must be made:
(a) in same day funds;
(b) in Australian currency;
(c) not later than 21.00pm (Melbourne time)
on the due date,
to the account of the Administrative Agent
specified to the relevant Borrower or in such
other manner as the Administrative Agent
directs from time to time.
8.5 Distribution by Administrative Agent
8.5.1 Except to the extent otherwise expressly
provided in this Agreement. or unless payment
is made to the Administrative Agent for its own
account, each payment received by the
Administrative Agent under this Agreement is
received by the Agent on account of the Lender.
8.5.2 The Administrative Agent must within two (2)
Business Days of receipt distribute in same day
funds amounts received on account of the Lender
to the Lender.
8.6 Non-receipt of funds by the Administrative Agent from the
Borrower
<PAGE>
8.6.1 Unless the Administrative Agent has received
written notice from the Borrower at least 1
Business Day before the date on which any
payment is due under this Agreement that the
Borrower does not intend to make that payment
in full on the due date, the Administrative
Agent may (but is not obliged to) assume that
the Borrower has made that payment when due,
and in reliance on that assumption. may make
available to the Lender on that due date an
amount equal to the assumed payment.
8.6.2 If the Borrower has not in fact made that
payment to the Administrative Agent, and does
not make that payment, together with interest,
promptly on demand, the Lender must, on
demand, repay to the Administrative Agent the
amount so made available to the Lender on that
due date an amount equal to it. together with
interest on such amount accrued for each day
from and including the due date but excluding
the date of such repayment, at the rate per
centum per annum which is determined by the
Administrative Agent to be the Administrative
Agent's cost of funding such payment for such
period.
8.6.3 Without limiting its obligations under this
Agreement, the Borrower indemnifies the
Administrative Agent and the Lender against
any damage. loss or expense incurred by the
Lender or the Administrative Agent by reason
of any failure or delay by the Borrower in
making any payments referred to in this clause
8.6.
9. TERMINATION OF FACILITY
The Facility shall terminate on the Repayment Date and the
Borrower shall pay to the Administrative Agent the Loans
forthwith.
<PAGE>
SECTION C
10. CONDITIONS PRECEDENT
10.1 To the Facility
The obligations of the Lender under this Agreement are
subject to the fulfillment of the conditions precedent
that the Administrative Agent shall receive prior to the
giving of the first Drawdown Notice all of the following
in the form and substance satisfactory to the Lender:
10.1.1 A copy of each of the constituent documents of
the Borrower and the Guarantor certified by an
Authorized Officer thereof as being complete
true and up-to-date.
10.1.2 A duly signed verification certificate in the
form of the certificate in Schedule 3.
10.1.3 A copy of this Agreement duly executed by the
Borrower and the Guarantor.
10.1.4 Evidence that all necessary filings and
registrations have been completed and that all
stamp duties and registration and other fees
have been paid in order to ensure that this
Agreement is valid, binding and enforceable.
10.1.5 The Establishment Fee and the first Line Fee
payment (which first payment shall be
calculated from the date of this Agreement to
the commencement of the first Quarter after the
date of this Agreement) and the first
administration fee payment.
10.1.6 A legal opinion from the attorneys of the
Guarantor in respect of the Guarantor and this
Agreement, addressed to the Lender and the
Administrative Agent.
10.1.7 A duly signed indemnity in the form of Schedule
4.
<PAGE>
10.2 To A Drawdown
The obligation of the Lender to make any Advance is
subject to the fulfillment (to the reasonable
satisfaction of the Administrative Agent) of the
following conditions precedent:
10.2.1 The Administrative Agent has duly received from
the Borrower a request for a Drawdown in the
form of a Drawdown Notice.
10.2.2 No event has occurred which constitutes or with
the passing of time or the giving of notice or
both would constitute an Event of Default.
10.2.3 The Lender has received such other information
as it may reasonably require.
11. REPRESENTATIONS AND WARRANTIES
The Borrower and the Guarantor each represents and warrants to
the Lender and the Administrative Agent except to the extent
disclosed in writing to the Lender prior to the date of this
Agreement or prior to the date on which they are deemed made or
repeated:
11.1 Status
It has been duly incorporated in accordance with the laws
of the place of its incorporation.
11.2 This Agreement
This Agreement constitutes a legal valid and immediately
binding obligation on it the Borrower and the Guarantor
and is enforceable in accordance with its express terms
subject only to laws relating to insolvency and the
enforcement of creditors rights generally and the
discretionary notice of equitable remedies.
11.3 Third Party Rights
Its execution, delivery and performance of this Agreement
does not violate in any respect any provision of:
<PAGE>
11.3.1 any law or regulation or any order or decree
or any government authority, agency or court;
or
11.3.2 its constitution; or
11.3.3 any mortgage, contract or other undertaking or
instrument to which it is party or which is
binding upon it.
11.4 Authorities
All authorizations, approvals, consents, licenses,
filings, registrations, notarizations and other
requirements of any governmental judicial or public body,
authority. bureau or agency now obtainable and required
in connection with its execution. delivery, performance,
validity or enforceability of this Agreement have been
obtained or effected and are in full force and effect and
true copies thereof (where applicable) have been
delivered to the Lender and all fees payable in
connection therewith have been paid and there has been no
default in the performance of any of the terms or
conditions of any of the same.
11.5 Other Commitments
It is not in default under any agreement undertaking or
instrument to which it is a party or by which it is
bound. such default being material in the context of this
Agreement and no event has occurred which with the giving
of notice or lapse of time or both would constitute such
a default.
11.6 Litigation
No litigation or governmental proceeding is pending or,
to its knowledge threatened against it which could have a
material adverse effect on its ability to comply with its
obligations under this Agreement.
<PAGE>
11.7 Taxation
It and each of its Subsidiaries have duly filed all
taxation returns required to be filed (none of which are
so far as it is aware likely to be the subject of any
dispute) and have paid all taxation levied or assessed
upon it (except where the amount of or the obligation to
pay those taxes is being contested in good faith and upon
reasonable grounds and has complied with all assessments
and notices in respect thereof or have established
adequate reserves for payment thereof.
11.8 Unsecured Liabilities
Its obligations under this Agreement rank at least
equally with all other of its unsecured and
unsubordinated indebtedness except any liabilities
mandatorily preferred by law.
11.9 Trusts
In entering into this Agreement it is not acting as a
trustee of any trust or settlement.
11.10 Insurance Policies
All risks usually insured against according to sound
commercial practice by persons carrying on activities
similar to the Borrower's are fully insured against in
amounts representing the present full replacement or
reinstallation values or market values and in the name of
and for the benefit of the Borrower absolutely.
11.11 Adverse Circumstances
It is not aware of any fact or circumstance which would
reasonably be expected to affect in any material adverse
way its financial position. operations, profitability or
prospects of or its business or the value of its property
or affecting as a whole the industry in which it
participates.
<PAGE>
11.12 Year 2000 Compliance
It:-
11.12.1 has initiated a review of all areas with its
and its Subsidiaries operations that could be
adversely effected by the Year 2000 Problem:
11.12.2 has developed a plan and time line for
addressing the Year 2000 Problem on a timely
basis and to date has and will hereafter
implement such plan:
11.12.3 will use its best endeavors to ensure that the
Year 2000 Problem will not have any material
adverse impact on its financial position
operations, profitability, prospects, business
or the value of its property.
11.13 No Misrepresentation
All information provided by it whether prior to or after
the date of this Agreement to the Lender or the
Administrative Agent is true and correct and is not, by
the omission of information or otherwise, misleading and
all projections contained therein were arrived at after
the due and careful consideration and were based on the
best information available and on fair assumptions.
The representations and warranties in this clause shall
be deemed to be repeated by the Borrower and the
Guarantor on and as of the date of each Advance as if
made with reference to the facts and circumstances
existing, at such date.
The Borrower and the Guarantor acknowledge that the
Lender and the Administrative Agent rely on the
representations and warranties made or given in this
Agreement by the Borrower and the Guarantor and that the
Lender and the Administrative Agent are induced by each
such representation and warranty to enter into this
Agreement and the rights of the Lender and the
Administrative Agent in respect of a breach of any such
representation or warranty shall not be affected by
investigation (if any) made by the Lender or the
Administrative Agent into the affairs of the Borrower or
the Guarantor.
<PAGE>
12. GENERAL OBLIGATIONS
The Borrower and the Guarantor each agree that on and from the
date of this Agreement and so long as any amount payable under
this Agreement is outstanding:
12.1 Authorities
The Borrower and the Guarantor shall take all action
necessary to obtain and promptly renew from time to time
all authorizations, approvals, consents, licenses and
exemptions as may be required under any applicable law
or regulation to enable the Borrower and the Guarantor
to perform their obligations under this Agreement or
required for the validity or enforceability of this
Agreement or any transaction contemplated by this
Agreement.
12.2 Notice of Default
The Borrower and the Guarantor shall promptly notify the
Lender or the Administrative Agent in writing of the
occurrence or pending or threatened occurrence of any
event which would cause or constitute a breach or any of
the representations or warranties or agreements of the
Borrower and the Guarantor in this Agreement including
any event which would result in a material change in the
business of the Borrower and the Guarantor and any other
event which constitutes or which would with the giving
of notice or lapse of time or both or other conditions
constitute an Event of Default.
12.3 Law
The Borrower and the Guarantor shall comply with all
requirements of the Law where a failure to do so is
likely to have a material adverse effect on its ability
to meet its obligations under this Agreement.
<PAGE>
12.4 Access
The Borrower and the Guarantor shall permit
representatives of the Lender or the Administrative Agent
(or any accountants or other experts designated by it)
during normal business hours and upon reasonable notice
and upon reasonable grounds to visit and inspect and
examine the books of account, records (excluding company
minute books), reports and other papers (and to make
copies and to take extracts therefrom) of the Borrower
and the Guarantor and to discuss its affairs, finances
and accounts with its officers, accountants and auditors,
all at such times and as often as may be reasonably
requested by the Lender or the Administrative Agent but
only in so far as such matters relate to information as
may reasonably be required by the Lender or the
Administrative Agent for any purpose connected with this
Agreement.
12.5 Negative Pledge
12.5.1 Except as permitted in this Agreement neither
the Borrower nor any of its Subsidiaries shall
without the prior written consent of the
Lender either borrow further money from any
lender (other than where that the lender is
one of the companies included in the
expression --the Borrower-- or is the
Guarantor) or create or assume or permit to
exist or arise any Security Interest
whatsoever over any part of its present or
future undertakings. property. assets uncalled
capital or revenues. The Borrower represents
and warrants to the Lender that there will be
no such Security Interest over any part its or
its Subsidiaries present or future
undertakings. property. assets, uncalled
capital or revenues in existence as at the
date of the first drawdown under the Facility.
<PAGE>
12.5.2 For the purposes of Clause 12.5.1 the Lender
agrees that the Borrower is entitled to enter
into an agreement on or about even date
herewith with The First National Bank of
Chicago (ARBN 065 752 918) ("FNBC") pursuant
to what FNBC agrees to provide facilities to
the Borrower with accommodation limits
totaling A$30,000,000 and an agreement on or
about even date herewith with Rabo Australia
Limited ACN 060 452 217 ("Rabo"') pursuant to
which Rabo agrees to provide facilities to the
Borrower with accommodation limits totaling
A$25,000.000.
12.6 Inspection
The Borrower shall permit the Lender or the
Administrative Agent upon written request of the Lender
or the Administrative Agent to from time to time inspect
the register of the members of the Borrower where the
register or any branch register is so kept at any time
during regular business hours and the Borrower shall
furnish the Lender or the Administrative Agent with any
information which the Lender may consider reasonably
necessary to enable it to determine whether or not there
has been at any time after the date of this Agreement a
transfer of the effective management and control of the
Borrower or the Guarantor.
12.7 Public Information
12.7.1 Subject to sub-clause .2 of this clause, the
Borrower and the Guarantor shall furnish to
the Administrative Agent copies of all such
accounts, documents. reports, notices,
circulars, particulars and certificates
("Documents") which are required to be
furnished by the Borrower or the Guarantor to
any stock exchange, corporate affairs office
(or analogous office) or shareholder at the
same time as they are furnished to that stock
exchange. corporate affairs (or analogous
office) or shareholder and when requested by
the Administrative Agent copies of Documents
required under the provision of any trust deed
to which the Borrower or the Guarantor is a
party to be furnished to the trustee
thereunder from time to time.
<PAGE>
12.7.2 Unless the Lender shall specifically request a
particular Document or class of Documents, the
Borrower and the Guarantor shall only be
obliged to provide the Administrative Agent
with those Documents which relate to matters
which may have a material effect on the
business or financial obligations of either
the Borrower or the Guarantor.
13. FINANCIAL INFORMATION
The Borrower and the Guarantor shall from time to time supply
the Lender with all financial or other information regarding the
Borrower and the Guarantor as the Lender may reasonably request
in writing always including the following without request:
13.1 As soon as possible but in any event within 120 days of
the end of each Financial Year copies of the audited
annual profit and loss statement and balance sheet of the
Guarantor and the audited consolidated annual profit and
loss statement and balance sheet of the Guarantor and the
unaudited annual profit and loss statement and balance
sheet of the Borrower.
13.2 As soon as possible but in any event within 60 days of
the end of each Quarter a copy of the management accounts
and of the unaudited balance sheet and profit and loss
statement of the Borrower and the Guarantor and the
unaudited consolidated profit and loss statement and
balance sheet of the Borrower and the Guarantor.
All of the financial information referred to above shall be
prepared in accordance with Accounting Standards.
14. EVENTS OF DEFAULT
If any of the following, events occur ("Events of Default") the
Loans and all other moneys owing to the Lender by the Borrower
shall at the option of the Lender and notwithstanding any delay
or previous waiver of the right to exercise such option become
immediately due and payable upon written demand by the Lender to
the Borrower and the obligations of the Lender under this
Agreement shall be canceled:
<PAGE>
14.1 If the Borrower falls to observe or perform any
obligations to be observed or performed by it under this
Agreement or in connection with any transaction
contemplated by this Agreement and if such default shall
in the opinion of the Lender be capable of prompt remedy.
the Borrower shall not have remedied such default within
seven (7) days after notification by the Lender to the
Borrower requiring remedy of such default.
14.2 Any representation or statement made or deemed to be made
by the Borrower or the Guarantor in this Agreement or in
writing pursuant to this Agreement shall not be complied
with or shall prove to be untrue in any respect which
materially adversely affects the interests of the Lender
on any date as of which it was made or deemed made.
14.3 If all or any part of this Agreement becomes void.
illegal, invalid, unenforceable, or of limited or reduced
force or effect which is likely to adversely affect the
ability of the Borrower to carry out its obligations
under this Agreement.
14.4 Any other present or future indebtedness of the Borrower
for borrowed money in excess of A$2,000,000 shall become
due and payable prior to the stated maturity thereof as a
result of a default or any such indebtedness shall not be
paid on the due date thereof.
14.5 If the Borrower is wound up or if a petition is presented
or an order is made for the winding, up of the Borrower
and is not withdrawn within fourteen (14) days or if a
resolution is passed for the winding up of the Borrower
otherwise than for the purpose of reconstruction or
amalgamation the terms of which have previously been
approved in writing by the Lender such approval not to be
unreasonably withheld.
14.6 If a receiver or receiver and manager is appointed in
respect of any part of the assets of the Borrower or an
encumbrance takes possession of the undertaking or the
property of the Borrower or any part thereof.
14.7 If the Borrower makes default under any charge or
security in favor of any person other than the Lender and
the holder of that charge or security elects to enforce
that charge or security.
<PAGE>
14.8 If a compromise or arrangement is proposed between the
Borrower or the Guarantor and their creditors or any
class of them or if an application is made to a court for
an order summoning a meeting of creditors or any class of
them of the Borrower or the Guarantor.
14.9 If without the prior written consent of the Lender the
Borrower reduces or attempts to reduce its capital or buy
back any of its shares.
14.10 If the Borrower is placed under administration pursuant
to Part 5.3A of the Corporations Law or causes or
proposes to cause a meeting of its creditors to be
summoned for the purposes of placing the Borrower under
administration pursuant to Part 5.3A of the Corporations
Law.
14.11 If any of the property of the Borrower, the ownership of
which is in the opinion of the Lender material to the
ability of the Borrower to perform its obligations under
this Agreement is seized or otherwise expropriated,
nationalized, confiscated or acquired through any
governmental action or intervention or if custody or
control of such property shall be assumed by any
Government or government agency.
14.12 If a meeting of the Borrower or the Guarantor is called
for the purpose of considering and if thought fit passing
any resolution the passing of which would constitute or
give rise to an Event of Default.
14.13 If in the reasonable opinion of the Lender there is a
change in the ownership control or management of the
Borrower which is likely to adversely affect the ability
of the Borrower to conduct its business in a proper
manner and to carry out its obligations under this
Agreement.
14.14 If the Borrower defaults in the performance or observance
of any provision of any other indebtedness to or security
of the Lender and the Borrower whether the indebtedness
or security is collateral to this Agreement or whether it
is a separate Agreement between the Lender and the
Borrower and such default continues for more than seven
(7) days after notification by the Lender to the Borrower
requiring remedy of such default.
<PAGE>
14.15 If the Borrower shall at any time not have an auditor
appointed pursuant to the Provision of the Law.
14.16 If the Borrower makes any material change to the business
it carries on which in the reasonable opinion of the
Lender is likely to materially adversely affect the
interests of the Lender without the prior written consent
of the Lender or if the Borrower or the Guarantor ceases
or threatens to cease to carry on its business.
14.17 If the Borrower or the Guarantor suffers any material
adverse change in their financial condition which is
likely to materially affect the interest of the Lender
unless such change is agreed to in writing by the Lender.
14.18 If the Borrower ceases to be a wholly owned subsidiary of
the Guarantor.
14.19 If any event occurs that results in acceleration of
payments under the Credit Agreement dated December 15,
1997 between the Guarantor, the Banks listed therein
Royal Bank of Canada as Documentation Agent. The Chase
Manhattan Bank and Nations Bank N.A. as Co-Syndication
Agents and Morgan Guaranty Trust Company of New York as
Administrative Agent (or any other credit agreement in
replacement thereof) provided that such acceleration has
not been rescinded within five (5) days.
14.20 The cancellation or elimination by the Guarantor of the
credit agreement with specified clause 14.19 and failure
to replace such credit agreement with a facility
substantially similar in form and substance.
15. INDEMNITIES
The Borrower indemnifies the Lender and the Administrative Agent
from and against all actions. suits, claims, demands, losses,
liabilities, damages, costs and expenses which may be made or
brought against or suffered or incurred by the Lender or the
Administrative Agent arising out of or in connection with:
15.1 any Event of Default ; or
15.2 any failure by the Borrower to take an Advance in
accordance with any request for a Drawdown.
<PAGE>
SECTION D
16. GUARANTEE
The Guarantor unconditionally and irrevocably guarantees to the
Lender and the Administrative Agent the payment of all moneys
payable by the Borrower to the Lender or the Administrative
Agent pursuant to this Agreement ("the Guaranteed Money") and
the due observance and performance of all the covenants. terms.
conditions and agreements to be observed or performed by the
Borrower under this Agreement.
17. GENERAL INDEMNITY
As an additional separate and independent obligation the
Guarantor indemnifies the Lender and the Administrative Agent
against any claim. action, damage, loss. liability, cost,
charge, expense, outgoing or payment which the Lender or the
Administrative Agent suffers, pays or incurs in respect of:
17.1 a failure by the Borrower to pay any Guaranteed Money
when due; or
17.2 a failure by the Borrower or the Guarantor to observe,
perform or comply with this Agreement; or
17.3 an Event of Default.
18. INDEMNITY FOR AVOIDANCE OF GUARANTEED MONEY
18.1 If any Guaranteed Money (or money which would be
Guaranteed Money were it not irrecoverable) is
irrecoverable from the Borrower. and is not recoverable
by the Lender or the Administrative Agent from the
Guarantor on the footing of the guarantee. the Guarantor
as an additional separate and independent obligation:
18.1.1 indemnifies the Lender and the Administrative
Agent against any claim, action, damage, loss,
liability, cost. charge, expense, outgoing or
payment which the Lender suffers. pays or
incurs in respect of the non-payment of that
Guaranteed Money; and
18.1.2 must pay the Lender the amount of that
Guaranteed Money.
<PAGE>
18.2 This Clause applies to the Guaranteed Money (or money
which would be Guaranteed Money were it not
irrecoverable) whether or not:
18.2.1 it is or may be irrecoverable by reason of any
event described in Clause 24 by reason of any
other similar or dissimilar fact or
circumstance;
18.2.2 any transaction in respect of that money is
void, avoided, illegal or unenforceable, and
18.2.3 anything in respect of the Guaranteed Money is
or should be known to the Lender.
19. PAYMENT OF GUARANTEED MONEY
The Guarantor must pay to the Lender any Guaranteed Money not
paid by the Borrower when due immediately on demand from the
Lender or the Administrative Agent (which may be made at any
time and from time to time).
20. ACKNOWLEDGEMENT
The Guarantor acknowledges that it has not entered into this
Agreement in reliance on any representation, warranty, promise
or statement made by the Lender or any person on behalf of the
Lender or the Administrative Agent.
21. PRINCIPAL OBLIGATION
21.1 This Agreement is enforceable against the Guarantor:
21.1.1 without first enforcing anv securitv held bv
the Lender or the Administrative Agent;
21.1.2 whether or not the Lender or the Administrative
Agent has:
(i) made demand upon the Borrower;
(ii) given notice to the Borrower or the
Guarantor; or
(iii) taken any other steps against the
Borrower or the Guarantor, or any other
person;
<PAGE>
21.1.3 despite the occurrence of any event described
in Clause 24.
22. CONTINUING GUARANTEE AND INDEMNITY
22.1 Each guarantee and indemn1tv in this Agreement is a
continuing obligation of the Guarantor despite any
settlement of account or the occurrence of any other
thing and remains in full force and effect until all
money owing, contingently or otherwise, under this
Agreement is paid in full and this Agreement is finally
discharged by the Lender.
22.2 Each guarantee and each indemnity in this Agreement is an
additional, separate and independent obligation of the
Guarantor.
23. AMOUNT OF GUARANTEED MONEY
The obligations of the Guarantor under this Agreement extend to
any increase in the Guaranteed Money as a result of any
alteration. variation. supplement. renewal or replacement of
this Agreement made with the Guarantor's express written
consent.
24. UNCONDITIONAL NATURE OF OBLIGATIONS
This Agreement and the liability of the Guarantor under this
Agreement are not released. discharged or otherwise affected by
anything which but for this provision may have that effect
including, without limitation:
24.1 the grant of any time. waiver, covenant not to sue or
other indulgence to the Borrower, the Guarantor, or any
other person;
24.2 the discharge or release (including without limitation a
release as part of a novation) of the Borrower, or any
other person;
24.3 the liquidation of the Borrower, the Guarantor, or any
other person;
24.4 the Lender or the Administrative Agent:
24.4.1 exercising or enforcing;
24.4.2 failing to exercise or enforce; or
<PAGE>
24.4.3 delaying the exercise or enforcement of;
any other security or power;
24.5 the alteration, variation, supplement, replacement,
extinguishment, failure, loss, release, discharge.
abandonment, impairment, assignment or transfer of or
other dealing in respect of, or the failure of any person
to enter into any document or agreement;
24.6 this Agreement or any other document or agreement being
at any time void, voidable, avoided or unenforceable;
24.7 failure by the Borrower. the Lender or the Administrative
Agent to give notice to the Guarantor of any default by
the Borrower under this Agreement or any other document
or agreement;
24.8 a judgment against the Borrower. the Guarantor or any
other person;
24.9 any legal limitation, disability, incapacity or other
circumstances related to the Borrower, the Guarantor or
any other person;
24.10 acceptance by the Lender or the Administrative Agent of
a repudiation or termination of this Agreement or any
other document or agreement;
24.11 failure of any party to properly execute this Agreement;
24.12 any Guaranteed Money being irrecoverable for any reason;
24.13 the assignment, novation or assumption by the Lender,
the Administrative Agent, the Borrower or any other
person of any rights or obligations under this Agreement
or any other document or agreement;
24.14 any prejudice (including material prejudice) to the
Guarantor as a result of any thing done or omitted to be
done by the Lender or the Administrative Agent or any
other person or any other thing; or
24.15 the receipt by the Lender of any dividend distribution
or other payment in respect of any liquidation.
<PAGE>
This Clause applies whether or not the Lender, the
Administrative Agent, the Borrower, the Guarantor or any other
person, consents to, has knowledge of, fails to consent to, or
have knowledge of, any event described above, or whether or not
there is any rule of law or equity to the contrary.
25. NO COMPETITION
25.1 While any guarantee or indemnity in this Agreement is in
effect the Guarantor may not:
25.1.1 be subrogated to the Lender or the
Administrative Agent;
25.1.2 claim the benefit of any security. guarantee or
other document or agreement, or any money held
by the Lender or any power;
25.1.3 subject to the further provisions of this
Clause either directly or indirectly prove in,
claim or receive the benefit of any
distribution. dividend or payment in respect of
the liquidation of the Borrower or any other
guarantor of the Guaranteed Money ("Surety");
25.1.4 make a claim or exercise or enforce any right
power or remedy against the Borrower or any
Surety;
25.1.5 accept or procure the grant of any security
from the Borrower or any Surety; or
25.1.6 raise any set-off (including. without
limitation any set-off in respect of amounts
due by the Lender to the Borrower) available
to the Guarantor, the Borrower, any Surety or
other person in reduction or discharge of its
obligations under this Agreement.
25.2 If required by the Lender or the Administrative Agent.
the Guarantor must:
25.2.1 prove in any liquidation of the Borrower or any
Surety for all moneys owed to the Guarantor;
and
<PAGE>
25.2.2 not exercise or attempt to exercise any right
of set-off against or realize any security
taken from the Borrower or any Surety.
25.3 All moneys recovered by the Guarantor from any
liquidation (or under any security from the Borrower or
any Surety) must be held in trust by the Guarantor for
the Lender to the extent of the unsatisfied liability of
the Guarantor under this Agreement.
26. PROOF BY LENDER
In the event of the liquidation of the Borrower or any Surety,
the Guarantor authorizes the Lender to prove for all money which
the Guarantor has paid or is or may be obliged to pay under this
Agreement. other document or agreement or otherwise in respect
of the Guaranteed Money.
27. AVOIDANCE OF PAYMENTS
If any payment, conveyance, transfer or other transaction in
respect of or affecting the Guaranteed Money is:
27.1 void, voidable or unenforceable; or
27.2 is claimed to be void. voidable or unenforceable and that
claim is upheld, conceded or compromised;
the liability of the Guarantor under this Agreement is the same
as if:
27.3 that payment. conveyance. transfer or transaction; and
27.4 any release, settlement or discharge made in reliance on
any thing referred to above;
had not been made and the Guarantor must immediately do
everything necessary or required by the Lender or the
Administrative Agent to restore to the Lender or the
Administrative Agent this Agreement and any security held by the
Lender immediately prior to the payment, conveyance, transfer or
transaction.
<PAGE>
28. RETENTION OF AGREEMENT
The Lender and the Administrative Agent may retain this
Agreement for seven (7) months after full payment of the
Guaranteed Money or if anything in the previous Clause has
occurred or in the opinion of the Lender may occur, such longer
period as the Lender determines.
29. EXCLUSION OF MORATORIUM
To the extent permitted by law, a provision of any legislation
which at any time directly or indirectly:
29.1 lessens or otherwise varies or affects in favor of the
Guarantor any of its obligations under or any provision
of this Agreement; or
29.2 stays, postpones or otherwise prevents or prejudicially
affects the exercise by the Lender of any power;
is negatived and excluded from this Agreement and all relief and
protection conferred on the Guarantor by or under that
legislation is also negatived and excluded.
30. NON-EXERCISE OF GUARANTOR'S RIGHTS
The Guarantor must not exercise any rights it has inconsistent
with this Agreement.
31. PAYMENTS IN GROSS
All payments which the Guarantor is required to make under this
Agreement must be made to the Lender to an address or account in
Australia directed by the Lender or the Administrative Agent
from time to time.
32. SUSPENSE ACCOUNT
32.1 The Lender may apply to the credit of an interest bearing
suspense account:
32.1.1 any amounts received from the Guarantor under
this Agreement;
<PAGE>
32.1.2 any dividends. distributions or other amounts
received in respect of the Guaranteed Money in
any liquidation;
32.1.3 any other amounts received from the Guarantor,
the Borrower. any other guarantor or any other
person in respect of the Guaranteed Money.
32.2 The Lender may retain the amounts in the suspense account
and may, but is not obliged to, apply them in or towards
satisfaction of the Guaranteed Money.
32.3 In the event that the Lender is satisfied that it has
received all of the Guaranteed Money in full and that it
will not be required to repay any such moneys under any
laws relating to insolvency it will refund the moneys in
the suspense account and any interest accrued thereon
(less any financial institution duty or debits tax
payable in respect of any deposits or debits in respect
of the suspense account to the Borrower or the Guarantor
or any such other person as the case may be.
SECTION E
33. APPOINTMENT OF ADMINISTRATIVE AGENT
33.1 The Lender irrevocably appoints the Administrative Agent
as its agent. with the rights and duties expressed in
this Agreement.
33.2 In acting as agent. the Administrative Agent:
33.2.1 does not assume any fiduciary duties to the
Lender;
33.2.2 is an independent contractor.
33.3 The Lender waives any claim which may arise
against the Administrative Agent under the law
of agency or for breach of fiduciary duty.
33.4 The Administrative Agent agrees to act as Administrative
Agent of the Lender on these terms.
<PAGE>
34. POWERS AND DUTIES OF ADMINISTRATIVE AGENT
34.1 The Administrative Agent may exercise any powers which
this Agreement expressly delegates to Administrative
Agent, and any powers reasonably incidental thereto.
34.2 The Administrative Agent must take any action which this
Agreement specifically requires the Administrative Agent
to take. The Administrative Agent need not take any other
action and does not have any implied duties to the
Lender.
34.3 The Administrative Agent must forward to the Lender a
copy of each Drawdown Notice and each Interest Period
Notice under the Term Loan Facility it receives it from
the Borrower.
35. GENERAL IMMUNITY
Neither the Administrative Agent nor any of its directors,
officers, agents or employees are liable to the Borrower, the
Guarantor, or the Lender for any act or omission by any of them
in respect of this Agreement. except to the extent that the act
or omission arises from gross negligence or willful misconduct.
36. NO RESPONSIBILITY FOR LOANS ETC
36.1 Neither the Administrative Agent nor any of its
directors, officers, agents or employees need ascertain,
enquire into or verify:
36.1.1 any statement. warranty or representation made
in connection with this Agreement or any
borrowing under this Agreement;
36.1.2 the performance of any term of this Agreement
including, any obligation to pay proof or any
term requiring the provision of information
directly to the Lender;
36.1.3 the enforceability, sufficiency or genuineness
of this Agreement or any other writing in
connection therewith;
36.1.4 the existence or possible existence of any
Event of Default;
<PAGE>
36.1.5 the financial condition of any Borrower or the
Guarantor.
36.2 The Administrative Agent need not disclose to the Lender
information volunteered by the Borrower or the Guarantor
to the Administrative Agent (either in its capacity as
agent or in its individual capacity).
37. ACTING ON INSTRUCTIONS OF LENDER
37.1 The Administrative Agent need not take any action under
this Agreement unless:
37.1.1 the Lender instructs it to do so in writing;
and
37.1.2 the Lender indemnifies the Administrative Agent
to the Administrative Agent's satisfaction
against all liability, costs and expenses it
incurs in taking or continuing any action.
38. ADMINISTRATIVE AGENT AND LEGAL ADVISERS
38.1 The Administrative Agent may perform any of its duties
under this Agreement by its employees. agents and legal
advisers.
38.2 If the Administrative Agent selects those agents and
legal advisers with reasonable care, the Administrative
Agent is not liable to the Lender for any default or
misconduct by those agents or legal advisers, except as
to money or securities received by the Administrative
Agent or its agents or legal advisers.
38.3 The Administrative Agent may obtain legal advice about
this Agreement or any matter relating to or arising out
of this Agreement.
39. RELIANCE ON DOCUMENTS AND LEGAL ADVICE
The Administrative Agent may rely on:
39.1 any notice, consent, certificate, affidavit, letter,
facsimile, statement, paper or document if the
Administrative Agent believes it to be genuine and
correct and to have been signed or sent by the proper
person; and
<PAGE>
39.2 in respect, of legal matters, the opinion of its legal
advisers (who may be employees of the Administrative
Agent).
40. AGENT'S INDEMNIFICATION
40.1 The Lender indemnifies the Administrative Agent for all
losses, and all costs, liability and expenses incurred by
the Administrative Agent in respect of or in any way
related to or arising out of this Agreement and other
related documents or any actions taken or omitted by the
Administrative Agent. This may include costs which the
Borrower or the Guarantor falls to pay, administration
costs, agency fees, enforcement costs, and costs of a
dispute between the Administrative Agent and the Lender.
However, it does not include losses, costs, liability and
expenses resulting from the gross negligence or willful
misconduct of the Administrative Agent (as found by a
court of competent jurisdiction in a final non-appealable
judgment).
40.2 This obligation survives payment of all moneys payment
pursuant to this Agreement and termination of this
Agreement.
40.3 This section E of this Agreement does not limit the
obligations of the Borrower or the Guarantor under this
Agreement.
41. LENDER CREDIT DECISIONS
The Lender has made its own credit analysis and decision to
enter into the Agreement independently and without relying on
First Chicago.
<PAGE>
42. RESIGNATION OF ADMINISTRATIVE AGENT
42.1 The Administrative Agent may resign at any time by giving
written notice thereof to the Lender. Upon resignation,
the Lender shall have the right to appoint a successor
Administrative Agent with the written approval of the
Borrower (that approval not to be unreasonably withheld).
If no successor Administrative Agent has been appointed
by the Lender and accepted that appointment within thirty
days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative
Agent may, on behalf of the Lender and with the written
approval of the Borrower (that approval not to be
unreasonably withheld), appoint a successor agent.
42.2 If no successor Administrative Agent has been appointed
pursuant to the clause 42.1 within the thirty days
following the giving of notice of resignation by the
retiring Administrative Agent, the resignation shall
nonetheless then become effective and the Lender shall
perform the duties and be entitled to the rights of the
Administrative Agent hereunder until it appoints a
successor agent (which it shall not be under any
obligation to so do).
42.3 Upon the acceptance of any appointment as Administrative
Agent by a successor Administrative Agent, the successor
Administrative Agent shall thereupon succeed to and
become vested with all the rights. powers, privileges and
duties of the retiring Administrative Agent.
42.4 Whether or not a successor Administrative Agent has been
appointed, the retiring Administrative Agent shall be
discharged from its duties and obligations under this
Agreement upon its resignation becoming effective. After
any person's resignation under this Agreement as the
agent, the provisions of this Agreement shall continue in
effect for its benefit and for the benefit of the Lender
in respect of any actions taken or omitted to be taken by
the person while it was acting as the Administrative
Agent.
42.5 During any period in which a successor agent is not
appointed the agency fee referred to in clause 7.3 shall
be payable by the Borrower to the Lender.
<PAGE>
SECTION F
43. CERTIFICATIONS
43.1 Any document or thing required to be certified by the
Borrower or the Guarantor shall be certified an
Authorized Officer of the Borrower or the Guarantor or in
such other manner as the Lender may approve.
43.2 A certificate signed by an Authorized Officer of the
Lender or the Administrative Agent stating any amount or
rate for the purpose of this Agreement shall in the
absence of manifest error be conclusive and binding on
the Borrower.
44. UNLAWFULNESS
If:
44.1 any law, regulation or regulatory requirement or
judgment. order or direction of any court. tribunal or
authority binding upon the Lender or its ultimate parent
company in the jurisdiction in which the Lender or its
ultimate parent company is formed or has its principal or
lending office or in which any action is required to be
performed by it for the purposes of this Agreement; or
44.2 any chance in the interpretation of any such law,
regulation or regulatory requirement or judgment. order
or direction of any court, tribunal or authority by any
government or governmental agency charged with the
administration thereof or by a court of competent
jurisdiction or compliance by the Lender with any request
or direction (whether or not having the force of law) of
the Reserve Bank of Australia or any government or other
governmental agency in accordance with whose requests or
directions the Lender is accustomed to act;
renders it unlawful for the Lender to meet any of its
obligations under the Facility, the Lender shall promptly notify
the Borrower and the following provisions shall apply:
44.3 the Borrower and the Lender shall negotiate in good faith
for a period not exceeding thirty (30) days (or such
longer period as is required) with a view to the Lender
making arrangements to be able to meet the relevant
obligations under the Facility in whole or in part in a
manner which is not unlawful; and
<PAGE>
44.4 if no such arrangements have been made by the end of such
period, thereupon the Lender shall be released from its
obligations under this Agreement, the Facility shall be
canceled and the Borrower shall pay to the Lender the
Loans under this Agreement prior to the date on which it
becomes unlawful for the Lender to meets its obligations
under the Facility.
45. AUTHORITY TO DEBIT ACCOUNTS
The Borrower and the Guarantor irrevocably authorize and direct
the Lender and the Administrative Agent to debit any account or
accounts of the Borrower or the. Guarantor with the Lender or
the Administrative Agent in respect of any amounts that are from
time to time due and payable under this Agreement by the
Borrower or the Guarantor respectively. The Lender will notify
the Borrower and the Guarantor (as the case may be) of such
amounts so debited other than fees charged in accordance with
this Agreement and other than debits in accordance with prior
arrangements between the Lender and the Borrower or the
Guarantor.
46. NO WAIVER
No failure to exercise and no delay in exercising on the part of
the Lender any right. power or privilege under this Agreement
shall operate as a waiver thereof. nor shall any single or
partial exercise of any right power or privilege preclude any
other or further exercise thereof, or the exercise of any other
right. power or privilege. The rights and remedies of the Lender
provided in this Agreement are cumulative and not exclusive of
any rights or remedies provided by law or equity or legislation
or regulation.
47. MERGER
47.1 The representations and warranties of the Borrower and
the Guarantor in this Agreement shall survive the
execution of this Agreement and the making of any Advance
under this Agreement and shall ensure for the benefit of
the Lender and the Administrative A2ent until the Loans
have been paid in full by the Borrower to the Lender.
<PAGE>
47.2 If the liability of the Borrower or the Guarantor to pay
to the Lender or the Administrative Agent any moneys
payable under this Agreement becomes merged in any deed.
Judgment. order or other thing, the Borrower or the
Guarantor (as the case may be) shall pay interest on the
amount owing from time to time under that deed, judgment,
order or other thing at the higher of the rate payable
under this Agreement and that fixed by or payable under
that deed, judgment. order or other thing.
48. TIME OF THE ESSENCE
Time shall be of the essence as regards any date or period
determined under this Agreement save only to the extent that any
such date or period may be altered by mutual agreement between
the parties whereupon time shall be of the essence as regards
such altered date or period.
49. SET OFF
49.1 The Borrower and the Lender do expressly acknowledge and
agree that:
49.1.1 Where the Lender now or at any time in the
future is indebted on any account to the
Borrower pursuant to arrangements made between
them such arrangements are hereinafter referred
to as the "Arrangements".
49.1.2 Notwithstanding the Arrangements and any other
provision of this Agreement (and without
prejudice to the Lender's other rights and
remedies) any monies (whether by way of
principal interest or otherwise and whether
present future actual or contingent) which the
Lender may now or may hereafter owe to the
Borrower under the Arrangements may be applied
to and set off by the Lender as and when the
same may become due and payable pro rata
against the Loans as and when they become due
and payable to the intent and effect:
<PAGE>
(i) first that the Lender may at any time
and from time to time deduct from and
retain out of the monies otherwise
payable by the Lender to the Borrower
pursuant to the Arrangements such
amounts as the Lender may think fit and
apply or set off such amounts in or
toward or against satisfaction of the
Loans; and
(ii) secondly that upon default by the
Borrower hereunder the Lender shall not
be obliged to pay any monies to the
Borrower under the Arrangements until
the obligations of the Borrower to the
Lender to pay any monies to the Lender
hereunder are paid and satisfied in
full.
49.2 The contractual rights of set off conferred on the Lender
under sub-clause .1 of this clause are in addition to.
and not in substitution for any rights of set off
otherwise conferred on or available to the Lender at law
or in equity including (without limitation) any banker's
rights of set off or right of combination of accounts or
banker's lien.
49.3 For the avoidance of doubt the Lender and the Borrower
further declare and acknowledge that the debts and
liabilities arising or created hereunder and pursuant
hereto and under and pursuant to the Arrangements are
mutual debts within the meaning of Section 86(l) of the
Bankruptcy Act 1966 (Cwth) (as incorporated in the
Corporations Law) and that upon the liquidation or
bankruptcy of the Borrower the provisions of Section 86
of the said Bankruptcy Act shall apply so that any sum
due from the Borrower to the Lender hereunder shall be
set off against any sum due from the Lender to the
Borrower under the Arrangements.
49.4 The Borrower acknowledges and agrees that it will not and
will not attempt to prevent the Lender from exercising
its rights of set off as aforesaid in the circumstances
contemplated in respect thereof.
<PAGE>
50. APPROPRIATION
The Lender or the Administrative Agent may appropriate any
payment towards the satisfaction of any moneys due by the
Borrower in any way that the Lender or the Administrative Agent
thinks fit and notwithstanding any purported appropriation by
the Borrower.
51. SUCCESSORS
This Agreement shall bind the parties and their respective heirs
executors administrators successors and assigns.
52. ASSIGNMENT
52.1 The Lender may not at any time assign the benefits and
obligations on its part to be enjoyed or performed under
this Agreement without the consent in writing of the
Borrower which shall not be unreasonably delayed or
withheld. Neither the Borrower nor the Guarantor shall
assign or purport to assign any of the benefits or
obligations on its part to be enjoyed or performed under
this Agreement without the consent in writing of the
Lender.
52.2 The Lender may (subject to prior notification to the
Borrower) disclose to any prospective assignee, on a
confidential basis, such information concerning the
Borrower as it considers appropriate without incurring
any liability for any breach of the duty of banker-
customer confidentiality.
53. NOTICES
Any notice demand consent or other communication to be in
writing under or in connection with this Agreement shall be in
writing or if it is to be given by the Lender or the
Administrative Agent may be signed by any Authorized Officer of
the Lender or the Administrative Agent or any solicitor for the
time being acting for the Lender or the Administrative Agent and
if it is to be given by the Borrower shall be under the common
seal of the Borrower or the hand of an Authorized Officer of the
Borrower and may be served either:
<PAGE>
53.1 personally; or
53.2 by posting the same by registered or certified mail to
the party to whom the notice is directed at its address
appearing in this Agreement or at any other address of
which prior notification shall have been given by the
addressee prior to the dispatch of the said notice and
any notice given by post shall be deemed to have been
received by the party to whom it is addressed at the
expiration of forty eight (48) hours (ten Business Days
where the addressee is the Guarantor) after the same has
been properly posted; or
53.3 by facsimile transmission:
To the Lender: (02) 922 1 8005
Attention: Manager Corporate
To the Administrative
Agent: (08) 82223 2948
Attention: Loan Administrator
To the Borrower: (08) 8248 8250
Attention: Treasurer
To the Guarantor: 1 (847) 205 4894
Attention: Treasurer
or any other facsimile number of which prior notification
shall have been given to the sender prior to the
transmission of the facsimile and any facsimile
transmission shall be deemed to have been served on the
date of transmission by the sender if the sender shall
receive confirmation of receipt of the notice in its
entirety from the recipient. The original of any
facsimile transmission shall be posted in accordance with
sub-clause .2 of this clause on the date of transmission
or if transmitted after usual posting hours the next
Business Day.
<PAGE>
If the date of dispatch is not a Business Day in the place to
which such notice, request demand or other communication is sent
it shall be deemed to have been received at the commencement of
business on the next following Business Day in such place.
Notice given to any one or more of the persons (if more than
one) comprised in the expressions "the Borrower" shall be deemed
notice to all such persons. Signatures may be manuscript or may
be printed or reproduced by other mechanical means.
54. OTHER DOCUMENTS
The Borrower and the Guarantor shall either before or after the
making of any Advance under this Agreement do all such acts
matters and things and shall sign or execute and deliver all
such documents or writing or assurances as may in the reasonable
opinion of the Lender or the Administrative Agent be necessary
or expedient to further and more effectually carry into full
effect the provisions of this Agreement and for conferring the
full benefit thereof upon the Lender and the Administrative
Agent.
55. AMENDMENT
No amendment of this Agreement shall bind the parties unless
made in writing expressed to be supplemental to or in
substitution for the whole or part of this Agreement.
56. GOVERNING LAW AND JURISDICTION
This Agreement and the rights and obligations of the parties
shall be governed by and construed in accordance with the laws
in force in the State of South Australia and the parties agree
by the execution of this Agreement to irrevocably submit to the
non-exclusive jurisdiction of the Courts in the State of South
Australia in respect of all matters arising under or in
connection with this Agreement provided always that the Lender
may proceed in the Courts of any Territory State or country
having or claiming jurisdiction in respect of the matter which
is the subject of the proceedings.
57. SEVERANCE
Any provision of this Agreement which is or becomes prohibited
invalid unlawful void or unenforceable in any jurisdiction
shall. as to such jurisdiction, be ineffective and capable of
severance without affecting the remaining provisions of this
Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
<PAGE>
58. COUNTERPARTS
This Agreement may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
59. ENTIRE AGREEMENT
This Agreement contains all of the terms and conditions upon
which the Lender will provide financial accommodation to the
Borrower and supersedes any previous or extant arrangements with
respect to the same.
<PAGE>
EXECUTED AS AN AGREEMENT
SIGNED for and on behalf of ) BANQUE NATIONALE DE PARIS
BANQUE NATIONALE DE PARIS ) by its Attorney who states that at
by ) the time of executing this
) instrument the attorney has no
) notice of the revocation of the
) Power of Attorney dated
its Attorney ) 15 January 1998 under the authority
) of which the Attorney has executed
) this instrument
)
) /s/ Geoffrey Lleuellyn Carrel
) ----------------------------------
Attorney
Geoffrey Lleuellyn Carrel
----------------------------------
Name/Position
SIGNED for and on behalf of ) /s/ Craig Scefi Jensen
THE FIRST NATIONAL BANK ) ----------------------------------
OF CHICAGO by its Authorized ) Authorized Officer
Officers ) Craig Scefi Jensen Asst.Vice Pres
----------------------------------
Name/Position
/s/ S.K. Milne
----------------------------------
Authorized Officer
S.K. Milne Associate Underwriter
----------------------------------
Name/Position
THE COMMON SEAL of )
PENRICE SODA PRODUCTS PTY LTD )
was hereunto affixed )
in the presence of: )
/s/ D.A. Reid
- - ------------------------------------
Director
David Reid
- - ------------------------------------
Print name of Director
/s/ Liendik Michael Alksnis
- - ------------------------------------
Director or Secretary
Liendik Michael Alksnis
- - ------------------------------------
Print name of Director or Secretary
<PAGE>
THE COMMON SEAL of )
PENRICE HOLDINGS PTY )
was hereunto affixed )
in the presence of: )
/s/ D.A. Reid
- - ------------------------------------
Director
David Reid
- - ------------------------------------
Print name of Director
/s/ Henrik Michael Alksnis
- - ------------------------------------
Director or Secretary
Henrik Michael Alksnis
- - ------------------------------------
Print name of Director or Secretary
THE COMMON SEAL of )
IMC GLOBAL AUSTRALIA PTY LTD )
was hereunto affixed )
in the presence of: )
/s/ D.A. Reid
- - ------------------------------------
Director
David Reid
- - ------------------------------------
Print name of Director
/s/ Henrik Michael Alksnis
- - ------------------------------------
Director or Secretary
Henrik Michael Alksnis
- - ------------------------------------
Print name of Director or Secretary
SIGNED for and on behalf of )
IMC GLOBAL INC. )
By /s/ E. Paul Dunn Jr.
-------------------------------
Name E.Paul Dunn, Jr.
-------------------------------
Title Vice President & Treasurer
-------------------------------
<PAGE>
SCHEDULE 1
FORM OF DRAWDOWN NOTICE
NOTICE
TO: THE FIRST NATIONAL BANK OF CHICAGO
70 Hindmarsh Square
ADELAIDE SA 5000
Facility Agreement dated 1998 ("the
Agreement"). The undersigned refers to the above Agreement and
irrevocably gives you notice of drawdown under the Facility as follows:
CASH ADVANCE/TERM LOAN
1 Drawdown Date: 19
----------------- ----
2 Amount to be drawn: $ (Australian Dollars)
---------------
3 Period of the borrowing: days
--------------
4 Payment Account:
-----------------
5 Interest Period: days
---------------
The Borrower by its execution of this Notice reaffirms and
reconstitutes all representations and warranties or agreements of the
Borrower in the Agreement as if made at the date of this Notice (except
to the extent disclosed in writing, to the Lender prior to the date of
this Drawdown Notice) and certifies that no Event of Default (as
defined in the Agreement) has occurred or is continuing or is likely to
result from this transaction.
DATED this day of 19
SIGNED by )
an Authorized Officer of )
) -------------------------------
)
- - ---------------------------------
<PAGE>
SCHEDULE 2
INTEREST PERIOD
NOTICE
TO: THE FIRST NATIONAL BANK OF CHICAGO
Facility Agreement dated 1998 ("the Agreement")
[insert name of relevant borrower] refers to the above Agreement and
irrevocably gives you notice of the required Interest Period under the
Term Loan Facility as follows:
Interest Period: commencing on
------------------
SIGNED by )
an Authorized Officer of )
[insert name of relevant )
borrower] ) ------------------------------------
Authorized Officer
<PAGE>
SCHEDULE 3
VERIFICATION CERTIFICATE
TO: BANQUE NATIONALE DE PARIS ("the Lender")
I, of
am a director/company secretary of PENRICE SODA PRODUCTS PTY LIMITED
(ACN 008 206 942), PENRICE HOLDINGS PTY (ACN 008 125 835) and IMC
GLOBAL AUSTRALIA PTY LIMITED (ACN 072 639 902) (each separately
hereafter referred to as "the Company") CERTIFY as follows:-
I certify that:
1. The company is not the trustee of any trust fund or settlement and
all its assets are legally and beneficially owned by it.
2. The Company is not a subsidiary of. or controlled by, an
Australian public company.
3. The assets of the Company are or will at the time of first
drawdown under the Agreement be free of any Security Interest
other than as consented to by the Lender in writing.
4. No meeting has been called to consider a resolution. no resolution
has been passed, no application is pending, and no order has been
made for the winding up or administration of the Company.
5. The Company is not insolvent and it is not aware of any
circumstances, and has not received any demand which remains
unsatisfied, which is likely to lead to the winding up of the
Company under the Corporations Law.
6. No receiver, receiver and manager or administrator has been
appointed to the Company or any of its assets and the Company is
not a party to any current legal proceedings which is likely to
adversely affect the ability of the Borrower to carry out its
obligations under the Agreement.
7. A resolution of the directors of the Company:
(a) authorizing the acceptance and execution of the facility
agreement ("Agreement") governing the terms and conditions
of a year revolving credit facility and a 5 year term loan
facility ("Facility") agreed to be provided by the Lender
to the Company; and
<PAGE>
(b) appointing each of the persons set out in Annexure "A" as
an authorized officer of the Company to prepare, complete
and sign letters and notices on behalf of the Company for
the purposes of the Agreement and to do everything else
that may be necessary for the purposes of the Agreement or
the facility including agreeing any amendments to the
provisions of the Agreement including the amount and term,
was passed in accordance with the Articles of Association of the
Company and an extract thereof is set out in Annexures "B, C and
D".
8. Set out in Annexure "A" are the normal signatures of each of the
authorized officers referred to above.
9. Neither the execution of the Agreement nor the passing of the
resolution referred to above has infringed or will infringe the
constitution of the Company or contravene any obligation to which
it is a party.
10. I am aware the Lender will rely on this certificate in providing
the Facility to the Company.
11. A word or phrase defined in the Agreement has the same meaning in
this certificate.
12. A current and up to date copy of the Constitution of the company
is attached hereto as Annexures E, F and G.
DATED the day of 1998
- - ------------------------------
Signature
- - ------------------------------
Position
<PAGE>
"A"
This is Annexure "A" referred to in the attached Verification
Certificate
AUTHORIZED OFFICERS OF PENRICE SODA PRODUCTS PTY LIMITED
(ACN 008 206 942), PENRICE HOLDINGS PTY (ACN 008 125 835)
AND IMC GLOBAL AUSTRALIA PTY LIMITED (ACN 072 639 902)
("the Company")
The following are the names and signatures of the authorized officers
of the Company.
NAME SIGNATURE
(Please print)
<PAGE>
"B"
EXTRACT OF RESOLUTIONS OF THE BOARD OF DIRECTORS OF
PENRICE SODA PRODUCTS PTY LTD (ACN 008 206 942) ("the Company")
The Chairman noted that a quorum was present at the meeting comprising
Directors entitled to vote on the proposed resolutions and noted that
each Director disclosed that director's interest, if any, in the
subject matter of the proposed resolutions, without limitation, each
directorship, if any, in every company concerned in or by the subject
matter of the proposed resolutions.
Drafts of the following documents (the "Documents") were tabled at the
meeting:
Facility Agreement between Penrice Soda Products Pty Ltd, Penrice
Holdings Pty and IMC Global Australia Pty Ltd (together,
"Borrowers") as borrowers, The First National Bank of Chicago
("Bank") as administrative agent Banque Nationale de Paris as
lender and IMC Global Inc ("IMC") as guarantor;
Facility Agreement between the Borrowers as borrowers, the Bank as
lender and IMC as guarantor; and
Facility Agreement between the Borrowers as borrowers, the Bank as
administrative agent, Rabo Australia Limited as lender and IMC as
guarantor.
The Chairman reported in detail on the nature of the transactions
evidenced by the Documents and on the rights conferred on and
obligations assumed by the Company.
RESOLVED THAT:
13 the Company unconditionally execute and delivery the Documents in
the form of the drafts tabled together with all ancillary
documents and perform each of its obligations under each Document
and each ancillary document;
14 the common seal of the Company be affixed to such of the Documents
and ancillary documents requiring execution under the Company's
common seal and that each director be authorized to execute any
Document. ancillary document or other document considered
necessary or desirable by that Director; and
<PAGE>
15 [ * ] be appointed as Authorized Officers of the Company for the
purposes of the Documents and that they each be authorized to
execute any notices and communications under or in connection with
the Documents.
CERTIFIED to be a true copy of the extract of the Minutes of Meeting of
the Board of Directors of the Company (the "Meeting") duly convened and
held and that all procedural and formal requirements under the Articles
of Association of the Company and the Corporations Law in respect of
the Meeting, the resolutions and appointment of directors of the
Company have been complied with in full and that such resolutions have
not been amended, modified or revoked and are in full force and effect.
- - --------------------------------
Chairman
- - --------------------------------
Print Name
<PAGE>
"C"
EXTRACT OF RESOLUTIONS OF THE BOARD OF DIRECTORS OF
PENRICE HOLDINGS PTY (ACN 008 125 835) ("the Company")
The Chairman noted that a quorum was present at the meeting comprising
Directors entitled to vote on the proposed resolutions and noted that
each Director disclosed that director's interest, if any, in the
subject matter of the proposed resolutions, without limitation, each
directorship, if any, in every company concerned in or by the subject
matter of the proposed resolutions.
Drafts of the following documents (the "Documents") were tabled at the
meeting:
Facility Agreement between Penrice Soda Products Pty Ltd, Penrice
Holdings Pty and IMC Global Australia Pty Ltd (together,
"Borrowers") as borrowers, The First National Bank of Chicago
("Bank") as administrative agent Banque Nationale de Paris as
lender and IMC Global Inc ("IMC") as guarantor;
Facility Agreement between the Borrowers as borrowers, the Bank as
lender and IMC as guarantor; and
Facility Agreement between the Borrowers as borrowers, the Bank as
administrative agent, Rabo Australia Limited as lender and IMC as
guarantor.
The Chairman reported in detail on the nature of the transactions
evidenced by the Documents and on the rights conferred on and
obligations assumed by the Company.
RESOLVED THAT:
13 the Company unconditionally execute and delivery the Documents in
the form of the drafts tabled together with all ancillary
documents and perform each of its obligations under each Document
and each ancillary document;
14 the common seal of the Company be affixed to such of the Documents
and ancillary documents requiring execution under the Company's
common seal and that each director be authorized to execute any
Document. ancillary document or other document considered
necessary or desirable by that Director; and
<PAGE>
15 [ * ] be appointed as Authorized Officers of the Company for the
purposes of the Documents and that they each be authorized to
execute any notices and communications under or in connection with
the Documents.
CERTIFIED to be a true copy of the extract of the Minutes of Meeting of
the Board of Directors of the Company (the "Meeting") duly convened and
held and that all procedural and formal requirements under the Articles
of Association of the Company and the Corporations Law in respect of
the Meeting, the resolutions and appointment of directors of the
Company have been complied with in full and that such resolutions have
not been amended, modified or revoked and are in full force and effect.
- - --------------------------------
Chairman
- - --------------------------------
Print Name
<PAGE>
"D"
EXTRACT OF RESOLUTIONS OF THE BOARD OF DIRECTORS OF
IMC GLOBAL AUSTRALIA PTY LTD (ACN 072 639 902) ("the Company")
The Chairman noted that a quorum was present at the meeting comprising
Directors entitled to vote on the proposed resolutions and noted that
each Director disclosed that director's interest, if any, in the
subject matter of the proposed resolutions, without limitation, each
directorship, if any, in every company concerned in or by the subject
matter of the proposed resolutions.
Drafts of the following documents (the "Documents") were tabled at the
meeting:
Facility Agreement between Penrice Soda Products Pty Ltd, Penrice
Holdings Pty and IMC Global Australia Pty Ltd (together,
"Borrowers") as borrowers, The First National Bank of Chicago
("Bank") as administrative agent Banque Nationale de Paris as
lender and IMC Global Inc ("IMC") as guarantor;
Facility Agreement between the Borrowers as borrowers, the Bank as
lender and IMC as guarantor; and
Facility Agreement between the Borrowers as borrowers, the Bank as
administrative agent, Rabo Australia Limited as lender and IMC as
guarantor.
The Chairman reported in detail on the nature of the transactions
evidenced by the Documents and on the rights conferred on and
obligations assumed by the Company.
RESOLVED THAT:
13 the Company unconditionally execute and delivery the Documents in
the form of the drafts tabled together with all ancillary
documents and perform each of its obligations under each Document
and each ancillary document;
14 the common seal of the Company be affixed to such of the Documents
and ancillary documents requiring execution under the Company's
common seal and that each director be authorized to execute any
Document. ancillary document or other document considered
necessary or desirable by that Director; and
<PAGE>
15 [ * ] be appointed as Authorized Officers of the Company for the
purposes of the Documents and that they each be authorized to
execute any notices and communications under or in connection with
the Documents.
CERTIFIED to be a true copy of the extract of the Minutes of Meeting of
the Board of Directors of the Company (the "Meeting") duly convened and
held and that all procedural and formal requirements under the Articles
of Association of the Company and the Corporations Law in respect of
the Meeting, the resolutions and appointment of directors of the
Company have been complied with in full and that such resolutions have
not been amended, modified or revoked and are in full force and effect.
- - --------------------------------
Chairman
- - --------------------------------
Print Name
<PAGE>
SCHEDULE 4
FACSIMILE INDEMNITY
TO: BANQUE NATIONALE DE PARIS
(the Financier)
FROM: PENRICE SODA PRODUCTS PTY LTD ACN 008 206 942
PENRICE HOLDINGS PTY ACN 008 125 835
IMC GLOBAL AUSTRALIA PTY LTD ACN 072 639 902
(each separately referred to as "the Customer")
IN CONSIDERATION of the Financier (which expression includes its
successors and assigns) agreeing to act on the basis of instructions
given by the Customer by Electronic Means, the Customer agrees as
follows:
1. In this indemnity 'Electronic Means' means telephone, telex.
facsimile or any other electronic means.
2. The Customer agrees:
(a) that the Customer. and not the Financier, will bear all
risks in relation to any unauthorized or fraudulent notice
or communication given to the Financier by Electronic Means;
(b) that the Financier may, without further inquiry or reference
to the Customer, act on that notice or communication if it
includes a reference to the Customer and on its face
purports to be signed or given by an authorized signatory of
the Customer being a person notified as such in writing by
the Customer to the Financier from time to time;
(c) that the Financier, despite any other term of this
indemnity, may, in its absolute discretion, defer acting in
accordance with the whole or any part of a notice or
communication received by it pending further inquiry to
and/or confirmation by the Customer, but the Customer
expressly agrees that the Financier will not be under any
responsibility to so defer in any case.
<PAGE>
3. The Customer:
(a) release the Financier from all actions and claims in
connection with the Financier in good faith acting on
instructions given by Electronic Means or deferring to act
under paragraph 2(c) above; and
(b) indemnifies the Financier against all losses, costs and
expenses suffered as a result of any actions or claims in
connection with the Financier in good faith acting on
instructions given by Electronic Means.
EXHIBIT 10.77
FACILITY AGREEMENT
RABO AUSTRALIA LIMITED
(CAN 060 452 217)
THE FIRST NATIONAL BANK OF CHICAGO
(ARBN 065 752 918)
AND
PENRICE SODA PRODUCTS PTY LTD
(CAN 008 206 942)
AND
PENRICE HOLDINGS PTY
(CAN 008 125 835)
AND
IMC GLOBAL AUSTRALIA PTY LTD
(CAN 072 639 902)
AND
IMC GLOBAL INC.
PIPER ALDERMAN
Lawyers
167 Flinders Street
Adelaide SA 50000
Australia
Telephone: (08) 8205-3333
Facsimile: (08) 8205-3300
<PAGE>
TABLE OF CONTENTS
Page No.
1. INTERPRETATION 2
1.1 Definitions 2
1.2 Construction 6
2. THE FACILITY 8
3. ACCOMMODATION LIMIT 8
4. PURPOSE OF THE FACILITY 8
5. DRAWDOWN8 7
5.1 Time of Drawdown Notice 8
5.2 Drawdown Notice 8
5.3 Term Loan 9
5.4 Liability for Drawdown 9
5.5 Minimum Drawn 9
5.6 Provision of Funds 9
5.7 Payment to Borrower 9
6. INTEREST 9
7. FEES, EXPENSES & CHARGES 11
7.1 Establishment Fee 11
7.2 Line Fee 11
7.3 Agency Fee 12
7.4 Expenses 12
7.5 Government Charges 12
7.6 Increase in Costs by Government Action 13
7.7 Gross Up 14
8. REPAYMENTS 15
8.1 Payment of Principal 15
8.2 Redrawing 16
8.3 Early Repayment of Advances 16
8.4 Manner of Payment 17
8.5 Distribution by Administrative Agent 17
8.6 Non-receipt of funds by the Administrative
Agent from the Borrower 17
9. TERMINATION OF FACILITY 18
10. CONDITIONS PRECEDENT 18
10.1 To the Facility 18
10.2 To A Drawdown 19
<PAGE>
11. REPRESENTATIONS AND WARRANTIES 19
11.1 Status 19
11.2 This Agreement 19
11.3 Third Party Rights 19
11.4 Authorities 20
11.5 Other Commitments 20
11.6 Litigation 20
11.7 Taxation 20
11.8 Unsecured Liabilities 20
11.9 Trusts 21
11.10 Insurance Policies 21
11.11 Adverse Circumstances 21
11.12 Year 2000 Compliance 21
11.13 No Misrepresentation 21
12. GENERAL OBLIGATIONS 22
12.1 Authorities 22
12.2 Notice of Default 22
12.3 Law 22
12.4 Access 22
12.5 Negative Pledge 23
12.6 Inspection 23
12.7 Public Information 24
13. FINANCIAL INFORMATION 24
14. EVENTS OF DEFAULT 24
15. INDEMNITIES 27
16. GUARANTEE 27
17. GENERAL INDEMNITY 27
18. INDEMNITY FOR AVOIDANCE OF GUARANTEED MONEY 28
19. PAYMENT OF GUARANTEED MONEY 28
20. ACKNOWLEDGMENT 28
21. PRINCIPAL OBLIGATION 28
22. CONTINUING GUARANTEE AND INDEMNITY 29
23. AMOUNT OF GUARANTEED MONEY 29
24. UNCONDITIONAL NATURE OF OBLIGATIONS 29
<PAGE>
25. NO COMPETITION 31
26. PROOF BY LENDER 31
27. AVOIDANCE OF PAYMENTS 32
28. RETENTION OF AGREEMENT 32
29. EXCLUSION OF MORATORIUM 32
30. NON-EXERCISE OF GUARANTOR'S RIGHTS 33
31. PAYMENTS IN GROSS 33
32. SUSPENSE ACCOUNT 33
33. APPOINTMENT OF ADMINISTRATIVE AGENT 33
34. POWERS AND DUTIES OF ADMINISTRATIVE AGENT 34
35. GENERAL IMMUNITY 34
36. NO RESPONSIBILITY FOR LOANS ETC 34
37. ACTING ON INSTRUCTIONS OF LENDER 35
38. ADMINISTRATIVE AGENT AND LEGAL ADVISERS 35
39. RELIANCE ON DOCUMENTS AND LEGAL ADVICE 35
40. AGENT'S INDEMNIFICATION 35
41. LENDER CREDIT DECISIONS 36
42. RESIGNATION OF ADMINISTRATIVE AGENT 36
43. CERTIFICATIONS 37
44. UNLAWFULNESS 37
45. AUTHORITY TO DEBIT ACCOUNTS 38
46. NO WAIVER 38
47. MERGER 38
48. TIME OF THE ESSENCE 38
<PAGE>
49. SET OFF 39
50. APPROPRIATION 40
51. SUCCESSORS 40
52. ASSIGNMENT 40
53. NOTICES 40
54. OTHER DOCUMENTS 41
55. AMENDMENT 41
56. GOVERNING LAW AND JURISDICTION 42
57. SEVERANCE 42
58. COUNTERPARTS 42
59. ENTIRE AGREEMENT 42
<PAGE>
AGREEMENT made the 23 day of September 1998
BETWEEN: RABO AUSTRALIA LIMITED (ACN 060 452 217) of Level
2,446 Collins Street, Melbourne, Victoria (Lender)
AND: THE FIRST NATIONAL BANK OF CHICAGO (ARBN 065 752 918)
of 70 Hindmarsh Square, Adelaide, South Australia
(Administrative Agent)
AND: PENRICE SODA PRODUCTS PTY LTD (ACN 008 206 942) of
Solvay Road, Osborne, South Australia 5017 (Soda)
AND: PENRICE HOLDINGS PTY (ACN 008 125 835) of Solvay Road,
Osborne, South Australia 5017 (Holdings)
AND: IMC GLOBAL AUSTRALIA PTY LTD (ACN 072 639 902) of
Solvay Road, Osborne, South Australia 5017 (IMC)
AND: IMC GLOBAL INC, a Delaware Corporation of 2100 Sanders
Road, Northbrook, Illinois 60062, 6142 (Guarantor)
INTRODUCTION
A. The Borrower and the Guarantor have requested that the Lender
provide or continue to provide certain financial accommodation
to the Borrower.
B. The Lender desires to provide or to continue to provide such
financial accommodation to the Borrower upon and subject to the
terms and conditions of this Agreement.
OPERATIVE PROVISIONS
SECTION A
1. INTERPRETATION
1.1 Definitions
In this Agreement unless the context otherwise requires:
"Accommodation Limit" means:
(a) in respect of the Revolving Credit Facility,
A$16,66.666.67;
<PAGE>
(b) in respect of the Term Loan Facility
A$8,333.333,33;
or such other amounts (expressed in Australian dollars)
which the Lender and the Borrower may agree upon in
writing from time to time.
"Administrative Agent" means The First National Bank of
Chicago (ARBN 065 752 918) or any other person appointed
as Administrative Agent for the purposes of this
Agreement.
"Advance" means any cash advance drawn under this
Facility (including a Term Loan).
"this Agreement" means this Agreement and any other
agreement expressed to be supplemental to this Agreement
to which the parties to this Agreement are parties and
any amendments to any such document.
"Announcement Date" means the date on which Standard and
Poors Rating Agency announces a rating change of the
long term unsecured debt of the Guarantor.
"Approved Purposes" means the refinancing of borrowings
of the Borrower at the date of this Agreement and
general working capital requirements.
"Authorized Officer" means:
(a) in relation to the Borrower each director and
secretary of the Borrower and each person from
time to time notified in writing by the Borrower
to the Administrative Agent to be an Authorized
Officer;
(b) in relation to the Lender and the Administrative
Agent each director and secretary and each
employee of the Lender or the Administrative
Agent (as the case may be) whose title includes
the word "Manager" or "Director" and includes
any person acting in any such capacity; and
<PAGE>
(c) in relation to the Guarantor each person whose
title is Chairman, President, Chief Executive
Officer, Chief Financial Officer Senior or
Treasurer and includes any person acting in any
such capacity.
"BBSY Rate" means in respect of any day and in respect
of any Interest Period the rate per centum per annum
quoted on the page numbered "BBSY" of the Reuters
Monitor System under the heading "Average Bid Rate" for
such Interest Period at or about 10:00 am (Sydney time)
on such day or on the first day of such Interest Period
(rounded up, if necessary, to the nearest two decimal
places) PROVIDED THAT if in respect of any Interest
Period the Average Bid Rate cannot be determined in
accordance with the foregoing procedures then "Average
Bid Rate" for that Interest Period shall mean such rate
as is agreed between the Administrative Agent and the
Borrower having regard to comparable indices then
available and in the absence of any such agreement shall
be the rate stipulated by the Administrative Agent
having regard to such comparable indices.
"Bill" has the same meaning as in the Bills of Exchange
Act 1909 (Cwth) (but does not include a cheque).
"the Borrower" means Soda, Holdings and IMC and includes
each of their successors and permitted assigns.
"Business Day" means a day on which Australian trading
banks are open for a full range of banking business in
the metropolitan area of Adelaide, South Australia,
Melbourne, Victoria and Sydney, New South Wales.
"Drawdown" means an Advance made by the Lender to the
Borrower pursuant to this Agreement.
"Drawdown Date" means a date upon which an Advance is
made by the Lender to the Borrower pursuant to this
Agreement.
"Drawdown Notice" means a notice of intention of the
Borrower to borrow or redraw hereunder being a notice in
the form or the effect of the form in Schedule 1.
<PAGE>
"Event of Default" means any of the events designated as
such in this Agreement.
"Facility" means the Revolving Credit Facility and the
Term Loan Facility made available under this Agreement
and each of them separately.
"Financial Year" means the period from 1 January to the
next following 31 December or such other period of one
(1) year as the Borrower and the Administrative Agent
may agree in writing from time to time.
"Guarantor" means IMC Global Inc, a Delaware
Corporation.
"the Lender" means [insert name of lending bank] and its
successors and assigns
"Interest Period" means each period of each Advance
being a period of 30, 60, 90, 120, 150, or 180 days or
such other period as the Lender and the Borrower may
agree provided that such period shall not extend beyond
the Repayment Date.
"Law" means the Corporations Law or the relevant
corresponding legislation applicable to companies
incorporated outside of the Commonwealth of Australia.
"Loans" means the aggregate of all Principal Moneys
which are from time to time owing (including
contingently owing) or unpaid to the Lender and all
other monies from time to time owing (including
contingently owing) and unpaid to the Lender or the
Administrative Agent under this Agreement.
"Overdraft Rate" means the rate of interest equal to 2%
above the rate of interest referred to in clause
6.1.1(a).
"Permitted Security" means a Security Interest which:
(a) has been approved by or is in favour of the
Lender;
<PAGE>
(b) is a statutory charge on any property in
relation to taxes while those taxes are not due
for payment unless the Lender is satisfied that
the amount of or obligation to pay those taxes
is being contested in good faith and on
reasonable grounds;
(c) secures the purchase price of goods, plant or
equipment purchased by the Borrower from a third
party on arms length terms and used by it in the
ordinary course of its business, is in favour of
such third party and is over such goods, plant
or equipment;
(d) is over property of a person who, after the date
of this document becomes a Subsidiary of the
Borrower provided:
(i) it existed at the time that person
became a Subsidiary of the Borrower;
(ii) it was not created in anticipation of or
in connection with that person becoming
a Subsidiary of the Borrower; and
(iii) the financial indebtedness outstanding
and actually secured by it at the time
that person became a Subsidiary of the
Borrower is not increased and the date
for repayment of that financial
indebtedness is not extended;
(e) secures or is an operating or finance lease hire
purchase or rental purchase agreement in respect
of plant and equipment with unrelated third
parties in the ordinary course of its business
and on commercial terms provided that the total
commitment of the Borrower (including any option
for purchase) for the whole of the terms of such
leases or hire purchase or rental purchase
agreements shall not exceed A$3,500,000 at any
one time.
"Principal Moneys" means the aggregate of the Advances
outstanding.
<PAGE>
"Quarter" means each quarter period ending on the last
days of March, June, September and December in each
year.
"Repayment Date" means:
(a) in respect of the Revolving Credit Facility the
date being two years from the date of this
Agreement; and
(b) in respect of the Term Loan Facility the date
being five years from the date of this
Agreement;
or such later dates as may be agreed in writing between
the Lender and the Borrower.
"Revolving Credit Facility" means the cash advance
revolving credit facility made available under this
Agreement.
"Security, Interest" means any security or preferential
interest or arrangement of any kind in any asset or
other right of or arrangement of any kind with any
creditor to have its claim satisfied before other
creditors with or from the proceeds of any asset and any
deposit of money by way of security but does not include
a Permitted Security.
"Subsidiary" means:
(a) a subsidiary as defined in the Law; or
(b) in respect of a person any entity of which that
person owns or controls, or is in a position to
own or control whether directly or indirectly,
more than fifty per cent (50%) of the capital or
voting rights;
and includes any subsidiary formed or acquired after the
date of this Agreement.
"Term Loan" means any term loan drawn under the Term
Loan Facility.
<PAGE>
"Term Loan Facility" means the term loan facility made
available under this Agreement;
"Year 2000 Problem" means the risk that computer
applications used by the Borrower or the Guarantor or
any of their Subsidiaries, suppliers or customers may be
unable to recognise and perform properly date-sensitive
functions involving certain dates prior to and any date
after 31 December 1999.
1.2 Construction
In this Agreement unless the context otherwise requires:
(a) A reference to any Act of Parliament or to any
section or provision thereof shall be read as if
the words "or any statutory modification or re-
enactment thereof or any statutory provision
substituted therefore" were added to such
reference.
(b) A reference to winding up shall when applied to
individuals be deemed to refer to bankruptcy.
(c) A reference to an accounting term or "Accounting
Standards" is to be interpreted in accordance
with approved accounting standards and practices
under the Law, and, where not inconsistent with
those accounting standards and practices
generally accepted principles and practices in
the jurisdiction under which the relevant
accounts are prepared consistently applied to a
body corporate or as between bodies corporate
and over time. A reference to "consolidated" in
relation to accounts or other financial
information, data or statistics with respect to
a person means treated for accounting purposes
as if accounting standards and generally
accepted accounting principles for the creation
of consolidated accounts applicable to a holding
company and its subsidiaries applied to the
person.
(d) References to sub-clauses, clauses and schedules
are references to sub-clauses, clauses and
schedules of this Agreement.
<PAGE>
(e) References to any agreement, licence or other
instrument shall be deemed to include references
to such agreement, licence or other instrument
as varied or replaced from time to time.
(f) Words importing any gender shall include all
other genders; words importing individuals shall
include partnerships and corporations and vice
versa; words importing the singular number shall
include the plural and vice versa; the index (if
any) and headings are for convenience and shall
not affect the interpretation of this Agreement.
(g) Where under or pursuant to this Agreement or
anything done under this Agreement the day on or
by which any act, matter or thing is to be done
is not a Business Day such act, matter or thing
may be done on the next succeeding day which is
a Business Day (except with respect to the
payment of monies payable under this Agreement
which shall be made on the immediately preceding
day which is a Business Day).
(h) An agreement, representation or warranty on the
part of two or more persons binds them jointly
and each of them severally.
(i) (subject to clause 5.4) where there are two or
more persons included in the expression "the
Borrower" a reference to "the Borrower" shall
where the context so permits include a reference
to each of such persons separately and any two
or more or such persons together.
SECTION B
2. THE FACILITY
2.1 In consideration of the premises the Lender agrees to
furnish to the Borrower the Facility as a committed
facility upon and subject to the terms and conditions in
this Agreement.
2.2 The Facility will be made available in Australian
currency.
<PAGE>
3. ACCOMMODATION LIMIT
3.1 At any one time the aggregate amount of Advances
outstanding shall not exceed the Accommodation Limit.
3.2 the Lender shall not be obliged to make any Advance to
the Borrower if to so do would result in the aggregate
amount of Advances outstanding exceeding the
Accommodation Limit.
3.3 In the event that the Borrower is at any time in breach
of clause 3.1 the Borrower will make payment to the
Lender on demand of any amount necessary to remedy such
breach.
4. PURPOSE OF THE FACILITY
Financial accommodation granted by the Lender to the Borrower
under this Agreement shall be used solely for the Approved
Purposes and the Borrower shall not use the same for any other
purpose except with the prior written approval of the Lender to
do otherwise. Neither the Lender nor the Administrative Agent
shall have any responsibility to see to the application of the
financial accommodation by the Borrower.
5. DRAWDOWN
5.1 Time of Drawdown Notice
Whenever the Borrower intends to borrow or redraw
hereunder it shall give the Administrative Agent a
Drawdown Notice not later than 2:00 pm (Melbourne Time)
two (2) Business Days before the proposed date of such
borrowing, redrawing or issuing.
5.2 Drawdown Notice
A Drawdown Notice shall be under the common seal of the
Borrower or under the hand of an Authorised Officer of
the Borrower.
5.3 Term Loan
The Term Loan Facility shall be drawndown in full within
seven days of the date of this Agreement.
<PAGE>
5.4 Liability for Drawdown
The only party liable as principal debtor under this
Agreement in relation to any Advance is the party that
draws or obtains that Advance.
5.5 Minimum Drawn
Each Drawdown under the Revolving Credit Facility shall
be a minimum of A$1,000,000 and shall be in multiples of
A$250,000.
5.6 Provision of Funds
If the Borrower gives a Drawdown Notice then, pursuant
to this Agreement, the Lender must provide to the
Administrative Agent in same day funds in not later than
12 noon (Melbourne time) on the specified drawdown date
and in accordance with that Drawdown Notice.
5.7 Payment to Borrower
On receipt of the amounts paid to it by the Lender under
clause 5.5, the Administrative Agent must pay the same
in same day funds to the Borrower or as directed by that
Borrower.
6. INTEREST
6.1 The Borrower shall pay to the Administrative Agent for
the account of the Lender interest as follows:
6.1.1 Interest Rate
(a) Interest on each Advance pursuant to the
Revolving Credit Facility (not being an
advance under the Overdraft Facility)
for each Interest Period at the rate per
centum per annum determined by the
Lender to be the aggregate of:
(i) a margin of point three per
centum (.3 %) per annum; and
(ii) the BBSY Rate.
<PAGE>
(b) Interest on each Advance being a Term
Loan for each Interest Period at the
rate per centum per annum determined by
the Lender to be the aggregate of:
(i) a margin of point three five
per centum (.35%) per annum;
and
(ii) the BBSY Rate.
6.1.2 Calculation
(a) Interest shall accrue from day to day
and be payable on so much as the
Lender may have advanced to the
Borrower, and which remains owing to
the Lender from time to time.
(b) All sums falling due hereunder by way
of interest or fees on a per annum
percentage basis shall be calculated
on the basis of a 365 day year for
Advances or fees payable in Australian
currency and a 360 day year for all
other currencies for the actual number
of days elapsed.
6.1.3 Payment
Interest shall be paid at the end of each
Interest Period (and at the expiration of each
90 day period during such Interest Period if
any Interest Period is greater than 90 days)
save that the last interest payment shall be
made on the Repayment Date.
6.2 The Borrower shall pay interest on all monies due and
unpaid by the Borrower under or pursuant to this
Agreement at the rate of two (2%) per cent above the
Overdraft Rate which applies as at the date such monies
become due and payable. All interest which accrues
under this sub-clause during any calendar month shall
become due and payable on the last Business Day of that
calendar month.
<PAGE>
6.3 All interest due and unpaid at the option of the Lender
shall be capitalized on a monthly basis and bear
interest accordingly.
6.4 The Borrower shall on the expiration of each Interest
Period in respect of a Term Loan provide to the
Administrative Agent an Interest Period Notice in the
form of Schedule 2 and if it shall fail to provide such
Notice to the Administrative Agent, the Interest Period
shall be ninety (90) days.
7. FEES, EXPENSES & CHARGES
7.1 Establishment Fee
The Borrower shall pay to the Administrative Agent for
the account of the Lender an establishment fee of
A$12,500 such fee to be paid on the date of this
Agreement and not to be refundable to the Borrower in
any event.
7.2 Line Fee
7.2.1 The Borrower shall pay to the Administrative
Agent for the account of the Lender:-
(a) a line fee of the percentage per annum
set out hereunder on the Accommodation
Limit in respect of the Revolving
Credit Facility; and
(b) a line fee of the percentage per annum
set out hereunder on the Accommodation
Limit in respect of the Term Loan
Facility.
Rating, by Standard and
Poors Rating Agency of
the long term unsecured
debt of the Guarantor Percentage
BBB+ .25%
BBB .3%
BBB- .35%
<PAGE>
7.2.2 The adjustments to line fee percentage rates
prescribed in clause 7.2.1 resulting from
changes, if any, to the ratings by Standard
Poors Rating Agency shall be effective and
payable from and including the Announcement
Date. If an adjustment is required because
the Administrative Agent was not immediately
aware of an announced change such adjustment
shall be made by the Administrative Agent and
shall be retroactive to the Announcement Date.
The Borrower agrees to pay to the
Administrative Agent for the account of the
Lender its due share of, and the Lender agrees
to fund the Administrative Agent and the
Administrative Agent agrees to repay to the
Borrower its due share of, any adjustment
resulting from a retroactive adjustment of
ratings which shall be paid by the
Administrative Agent or the Borrower, as the
case may be, on or before the fifth day
following the Administrative Agent's
calculation of and advice to the Borrower of
the amount to be adjusted.
7.2.3 The line fee shall be payable Quarterly in
advance and shall accrue from the date hereof.
7.3 Agency Fee
The Borrower shall pay to the Administrative Agent such
agency fees as are agreed upon between the
Administrative Agent and the Borrower.
7.4 Expenses
Whether or not the Borrower shall draw down under this
Agreement the Borrower shall forthwith reimburse the
Lender and the Administrative Agent for the reasonable
charges and expenses incurred by the Lender and the
Administrative Agent:
7.4.1 in connection with the negotiation preparation
or execution of this Agreement; and
<PAGE>
7.4.2 in connection with the enforcement of, or the
exercise or (except to the extent proved
groundless and unreasonable) the purported or
attempted exercise of any right, authority or
remedy conferred on the Lender or the
Administrative Agent under or by virtue of this
Agreement;
including in each case the fees and expenses of legal
advisers on a solicitor and own client basis, financial
institutions duty and duty passed on to the Lender or
the Administrative Agent by any bank or financial
institution and all stamp duty levied on or in
connection with this Agreement or any payment or the
receipt of any payment under this Agreement except for
those incurred or payable due to delay or negligence on
the part of the Lender or the Administrative Agent or
any of their servants and agents.
7.5 Government Charges
The Borrower shall forthwith pay any and all taxes or
charges (other than taxes on the net overall income of
the Lender) imposed by governmental authorities in any
jurisdiction which may have been paid or may be payable
or determined to be payable in connection with:
7.5.1 the execution, delivery, performance or
enforcement of this Agreement;
7.5.2 on or in respect of any transaction
contemplated by this Agreement;
7.5.3 any other matter or thing done or arising out
of or in connection with this Agreement; or
7.5.4 any transaction related to this Agreement;
(including, without limiting the generality of the
foregoing, stamp duty and financial institutions duty)
and shall indemnify the Lender and the Administrative
Agent against any and all liabilities with respect to or
resulting from delay or omission to pay such taxes or
charges including any fines or penalties (save those due
to delay or negligence on the part of the Lender or the
Administrative Agent).
<PAGE>
7.6 Increase in Costs by Government Action
If any law, regulation or regulatory requirement or
judgment, order or direction of any court, tribunal or
authority binding on the Lender in any jurisdiction not
in force at the date of this Agreement, or if compliance
by the Lender with any direction, request or requirement
(whether or not having the force of law but which if not
having the force of law it is the practice of
responsible financial institutions to observe) of any
competent governmental or other authority, or if
observation by the Lender of any reasonable practice of
commercial lenders in Australia or the United States
shall:
7.6.1 subject the Lender to taxes or change the basis
of taxation of the Lender with respect to any
payment under this Agreement; or
7.6.2 impose, modify or deem applicable any reserve
or prudential or capital adequacy requirements
or require the making or the varying of terms
of any special deposits against or in respect
of any assets or liabilities (whether
contingent or otherwise) of, deposits with or
for the account of, or loans by, the Lender; or
7.6.3 impose on the Lender any other conditions with
respect to this Agreement or its obligations
under this Agreement,
and if, as a result of any of the foregoing:
7.6.4 the cost to the Lender of making or keeping the
Facility available or otherwise performing its
obligations under this Agreement or allocating
its capital resources is increased; or
7.6.5 the amount payable or the effective rate of
return on its overall capital to the Lender
under this Agreement is reduced; or
7.6.6 the Lender makes a payment or foregoes or
suffers a reduction in a return on or
calculated by reference to any amount payable
to it under this Agreement;
<PAGE>
then, and in each such case, the Lender shall notify the
Borrower and give the Borrower the option exercisable by
notice in writing to the Lender within ten (10) Business
Days of receipt of notice of the Lender of:
7.6.7 paying an amount or amounts to the Lender from
time to time on demand to compensate the Lender
in full for any cost or reduction of the kind
referred to effective from the date on which
the cost or reduction is actually incurred by
the Lender; or
7.6.8 terminating this Agreement on the first to
occur of the expiration of sixty days from the
date of the notice of option given by the
Lender to the Borrower pursuant to this Clause
7.6 and the Repayment Date by paying to the
Lender the debt owing to it on that date with
accrued interest and all other monies payable
under this Agreement, together with an amount
determined by the Lender to compensate it up to
that date for any actual cost or reduction of
the type referred to.
If the Borrower fails to make an election the Borrower
shall be deemed to have made the election in sub-
paragraph .7 of this clause. The Lender's certificate
in respect of any cost or reduction of the kind referred
to shall be prima facie evidence of the incurring of any
such cost or reduction, except in the case of manifest
error.
Without prejudice to the Lender's rights under clause
7.6 the Lender will at the request of the Borrower
negotiate in good faith with the Borrower with a view to
finding a way of minimising any increased cost.
<PAGE>
7.7 Gross Up
7.7.1 if at any time any applicable law, regulation
or regulatory requirement of any government
authority, monetary agency or central bank in
Australia requires the Borrower or the
Guarantor to make any deduction or withholding
in respect of taxes (excluding payments made by
the Borrower pursuant to notices received by
the Borrower under Section 218 or 255 of the
Income Tax Assessment Act or Section 74 of the
Sales Tax Act or other analogous legislation
relating to default by the Lender in payment of
taxes due by the Lender) from any payment due
under this Agreement:
(a) the sum due from the Borrower or the
Guarantor in respect of the payment
shall be increased to the extent
necessary to ensure that, after the
making of the deduction or withholding,
the Lender receives a net sum equal to
the sum which it would have received had
no such deduction or withholding been
required to be made; and
(b) the Borrower and the Guarantor shall
indemnify the Lender against any losses
or costs incurred by the Lender by
reason of any failure of the Borrower or
the Guarantor to make any such deduction
or withholding.
The Borrower and the Guarantor shall promptly
deliver to the Administrative Agent any
receipts, certificates or other proof evidencing
the amounts (if any) paid or payable in respect
of any such deduction or withholding, together
with any other information which the
Administrative Agent may reasonably require.
<PAGE>
7.7.2 If the Lender or any person on its behalf is
required by any applicable law regulation or
regulatory requirement of any government
authority, monetary agency or central bank to
make any deduction or withholding from, or any
payment on or calculated by reference to, any
amount received or receivable under this
Agreement (other than taxes payable on the
overall net income of the Lender) then (without
prejudice to sub-paragraph .1 of this clause)
the Borrower and the Guarantor shall upon
demand indemnify and hold harmless the Lender
against any such deduction, withholding or
payment together with any related cost, loss,
expense, interest, penalties or other liability
by payment to each such person of such amounts
and in such currencies as the person concerned
may certify are required to compensate it for
any such deduction, withholding or payment
together with any related cost, loss, expense,
interest, penalties or other liability.
8. REPAYMENTS
8.1 Payment of Principal
8.1.1 The Borrower shall repay to the Administrative
Agent each Advance (other than a Term Loan) at
the end of the term of each Interest Period or
on the Repayment Date (whichever first occurs)
together with interest to the day of repayment
provided always that:
(a) the Lender may, in its sole discretion
and without prejudice to its rights
contained in this Agreement, at any time
and from time to time elect to extend the
term of such Advance or Advances; and/or
(b) in the event that the Borrower does not
nominate an Interest Period the Interest
Period shall be as determined by the
Lender or in the absence of any such
determination by the Lender that Interest
Period shall be ninety (90) days.
<PAGE>
8.1.2 The Borrower shall repay to the Administrative
Agent the Term Loan by four equal annual
installments of $2,083,333.33 each, the first
of such installments to be paid on the date
being two years from the date of this Agreement
and thereafter on each anniversary of the date
of this Agreement.
8.2 Redrawing
8.2.1 Any part of the Facility repaid at the
conclusion of the Interest Period relative
thereto shall (except in the event of any Term
Loan) be available to be redrawn in whole or in
part by the Borrower at any time prior to the
Repayment Date subject always to the provisions
of this Agreement.
8.2.2 No repayment of the Term Loan shall be
available for redrawing.
8.3 Early Repayment of Advances
8.3.1 The Borrower may repay an Advance in whole (but
not in part) before its due date if, but only
if:
(a) the Borrower gives the Administrative
Agent at least 5 Business Days
irrevocable notice in writing of the
Borrower's intention to repay;
(b) the Advance together with all interest
accrued thereon to the date of repayment
are paid in full;
(c) the Borrower makes payment of all moneys
payable pursuant to sub-clause .3.2 of
this clause;
(d) the Borrower makes payment on the day of
payment specified in the notice;
<PAGE>
8.3.2 In the event that the Borrower wishes to make
early repayment pursuant to sub-clause .3.1 of
this clause or if by reason of an Event of
Default or for any other reason early repayment
of an Advance in whole or in part is made by a
Borrower or is demanded by the Lender the
Borrower shall pay to the Lender in addition to
all other moneys then payable an amount
sufficient to compensate and to indemnify the
Lender for and against all losses (including
loss of profits), costs, damages and expenses
which the Lender determines that the Lender
will or is likely to suffer or incur as a
result of such early repayment. Without in any
way limiting or modifying the operation of the
foregoing, the Borrower acknowledges that the
Lender may endeavour to arrange or enter into
an interest rate swap agreement or other
commitment (either in relation to an Advance in
particular or generally in relation to the
business of the Lender) and may as a
consequence of this (whether directly or
indirectly) suffer or incur loss of
opportunity, losses, costs, damages or expenses
in the event that early repayment of an Advance
is made.
8.3.3 It is acknowledged by the Lender that no moneys
shall be payable to the Lender pursuant to
clause 8.3.2 in respect of payment of an
Advance if such payment is made on the last day
of an Interest Period in respect of such
Advance.
8.4 Manner of Payment
8.4.1 All payments by the Borrower under this
Agreement must be made:
(a) in same day funds;
(b) in Australian currency;
(c) not later than 2.00pm (Melbourne time)
on the due date,
<PAGE>
to the account of the Administrative Agent specified to
the relevant Borrower or in such other manner as the
Administrative Agent directs from time to time.
8.5 Distribution by Administrative Agent
8.5.1 Except to the extent otherwise expressly
provided in this Agreement, or unless payment
is made to the Administrative Agent for its own
account, each payment received by the
Administrative Agent under this Agreement is
received by the Agent on account of the Lender.
8.5.2 The Administrative Agent must within two (2)
Business Days of receipt distribute in same day
funds amounts received on account of the Lender
to the Lender.
8.6 Non-receipt of funds by the Administrative Agent from
the Borrower
8.6.1 Unless the Administrative Agent has received
written notice from the Borrower at least 1
Business Day before the date on which any
payment is due under this Agreement that the
Borrower does not intend to make that payment
in full on the due date, the Administrative
Agent may (but is not obliged to) assume that
the Borrower has made that payment when due,
and in reliance on that assumption, may make
available to the Lender on that due date an
amount equal to the assumed payment.
8.6.2 If the Borrower has not in fact made that
payment to the Administrative Agent, and does
not make that payment, together with interest,
promptly on demand, the Lender must, on demand,
repay to the Administrative Agent the amount so
made available to the Lender on that due date
an amount equal to it, together with interest
on such amount accrued for each day from and
including the due date but excluding the date
of such repayment, at the rate per centum per
annum which is determined by the Administrative
Agent to be the Administrative Agent's cost of
funding such payment for such period.
<PAGE>
8.6.3 Without limiting its obligations under this
Agreement, the Borrower indemnifies the
Administrative Agent and the Lender against any
damage, loss or expense incurred by the Lender
or the Administrative Agent by reason of any
failure or delay by the Borrower in making any
payments referred to in this clause 8.6.
9. TERMINATION OF FACILITY
The Facility shall terminate on the Repayment Date and the
Borrower shall pay to the Administrative Agent the Loans
forthwith.
SECTION C
10. CONDITIONS PRECEDENT
10.1 To the Facility
The obligations of the Lender under this Agreement are
subject to the fulfillment of the conditions precedent
that the Administrative Agent shall receive prior to
the giving of the first Drawdown Notice all of the
following in the form and substance satisfactory to the
Lender:
10.1.1 A copy of each of the constituent documents
of the Borrower and the Guarantor certified
by an Authorized Officer thereof as being
complete true and up-to-date.
10.1.2 A duly signed verification certificate in
the form of the certificate in Schedule 3.
10.1.3 A copy of this Agreement duly executed by
the Borrower and the Guarantor.
10.1.4 Evidence that all necessary filings and
registrations have been completed and that
all stamp duties and registration and other
fees have been paid in order to ensure that
this Agreement is valid, binding and
enforceable.
<PAGE>
10.1.5 The Establishment Fee and the first Line Fee
payment (which first payment shall be
calculated from the date of this Agreement
to the commencement of the first Quarter
after the date of this Agreement) and the
first administration fee payment.
10.1.6 A legal opinion from the attorneys of the
Guarantor in respect of the Guarantor and
this Agreement, addressed to the Lender and
the Administrative Agent.
10.1.7 A duly signed indemnity in the form of
Schedule 4.
10.2 To A Drawdown
The obligation of the Lender to make any Advance is
subject to the fulfillment (to the reasonable
satisfaction of the Administrative Agent) of the
following conditions precedent:
10.2.1 The Administrative Agent has duly received from
the Borrower a request for a Drawdown in the
form of a Drawdown Notice.
10.2.2 No event has occurred which constitutes or with
the passing of time or the giving of notice or
both would constitute an Event of Default.
10.2.3 The Lender has received such other information
as it may reasonably require.
11. REPRESENTATIONS AND WARRANTIES
The Borrower and the Guarantor each represents and warrants to
the Lender and the Administrative Agent except to the extent
disclosed in writing to the Lender prior to the date of this
Agreement or prior to the date on which they are deemed made or
repeated:
11.1 Status
It has been duly incorporated in accordance with the
laws of the place of its incorporation.
<PAGE>
11.2 This Agreement
This Agreement constitutes a legal valid and immediately
binding obligation on it the Borrower and the Guarantor
and is enforceable in accordance with its express terms
subject only to laws relating to insolvency and the
enforcement of creditors rights generally and the
discretionary notice of equitable remedies.
11.3 Third Party Rights
Its execution, delivery and Performance of this
Agreement does not violate in any respect any provision
of:
11.3.1 any law or regulation or any order or decree or
any government authority, agency or court or;
11.3.2 its constitution ; or
11.3.3 any mortgage, contract or other undertaking or
instrument to which it is party or which is
binding upon it.
11.4 Authorities
All authorizations, approvals, consents, licenses,
filings, registrations, notarizations and other
requirements of any governmental judicial or public
body, authority, bureau or agency now obtainable and
required in connection with its execution, delivery,
performance, validity or enforceability of this
Agreement have been obtained or effected and are in full
force and effect and true copies thereof (where
applicable) have been delivered to the Lender and all
fees payable in connection therewith have been paid and
there has been no default in the performance of any of
the terms or conditions of any of the same.
<PAGE>
11.5 Other Commitments
It is not in default under any agreement undertaking or
instrument to which it is a party or by which it is
bound, such default being material in the context of
this Agreement and no event has occurred which with the
giving of notice or lapse of time or both would
constitute such a default.
11.6 Litigation
No litigation or governmental proceeding is pending or,
to its knowledge threatened against it which could have
a material adverse effect on its ability to comply with
its obligations under this Agreement.
11.7 Taxation
It and each of its Subsidiaries have duly filed all
taxation returns required to be filed (none of which are
so far as it is aware likely to be the subject of any
dispute) and have paid all taxation levied or assessed
upon it (except where the amount of or the obligation to
pay those taxes is being contested in good faith and
upon reasonable grounds and has complied with all
assessments and notices in respect thereof or have
established adequate reserves for payment thereof
11.8 Unsecured Liabilities
Its obligations under this Agreement rank at least
equally with all other of its unsecured and
unsubordinated indebtedness except any liabilities
mandatorily preferred by law.
11.9 Trusts
In entering into this Agreement it is not acting as a
trustee of any trust or settlement.
<PAGE>
11.10 Insurance Policies
All risks usually insured against according to sound
commercial practice by persons carrying on activities
similar to the Borrower's are fully insured against in
amounts representing the present full replacement or
reinstallation values or market values and in the name
of and for the benefit of the Borrower absolutely.
11.11 Adverse Circumstances
It is not aware of any fact or circumstance which would
reasonably be expected to affect in any material adverse
way its financial position, operations, profitability or
prospects of or its business or the value of its
property or affecting as a whole the industry in which
it participates.
11.12 Year 2000 Compliance
It:-
11.12.1 has initiated a review of all areas with its
and its Subsidiaries operations that could be
adversely effected by the Year 2000 Problem;
11.12.2 has developed a plan and time line for
addressing the Year 2000 Problem on a timely
basis and to date has and will hereafter
implement such plan;
11.12.3 will use its best endeavours to ensure that the
Year 2000 Problem will not have any material
adverse impact on its financial position
operations, profitability, prospects, business
or the value of its property.
11.13 No Misrepresentation
All information provided by it whether prior to or after
the date of this Agreement to the Lender or the
Administrative Agent is true and correct and is not, by
the omission of information or otherwise, misleading and
all projections contained therein were arrived at after
the due and careful consideration and were based on the
best information available and on fair assumptions.
<PAGE>
The representations and warranties in this clause shall
be deemed to be repeated by the Borrower and the
Guarantor on and as of the date of each Advance as if
made with reference to the facts and circumstances
existing at such date.
The Borrower and the Guarantor acknowledge that the
Lender and the Administrative Agent rely on the
representations and warranties made or given in this
Agreement by the Borrower and the Guarantor and that the
Lender and the Administrative Agent are induced by each
such representation and warranty to enter into this
Agreement and the rights of the Lender and the
Administrative Agent in respect of a breach of any such
representation or warranty shall not be affected by
investigation (if any) made by the Lender or the
Administrative Agent into the affairs of the Borrower or
the Guarantor.
12. GENERAL OBLIGATIONS
The Borrower and the Guarantor each agree that on and from the
date of this Agreement and so long as any amount payable under
this Agreement is outstanding:
12.1 Authorities
The Borrower and the Guarantor shall take all action
necessary to obtain and promptly renew from time to time
all authorizations, approvals, consents, licenses and
exemptions as may be required under any applicable law
or regulation to enable the Borrower and the Guarantor
to perform their obligations under this Agreement or
required for the validity or enforceability of this
Agreement or any transaction contemplated by this
Agreement.
<PAGE>
12.2 Notice of Default
The Borrower and the Guarantor shall promptly notify the
Lender or the Administrative Agent in writing of the
occurrence or pending or threatened occurrence of any
event which would cause or constitute a breach of any of
the representations or warranties or agreements of the
Borrower and the Guarantor in this Agreement including
any event which would result in a material change in the
business of the Borrower and the Guarantor and any other
event which constitutes or which would with the giving
of notice or lapse of time or both or other conditions
constitute an Event of Death.
12.3 Law
The Borrower and the Guarantor shall comply with all
requirements of the Law where a failure to do so is
likely to have a material adverse effect on its ability
to meet its obligations under this Agreement.
12.4 Access
The Borrower and the Guarantor shall permit
representatives of the Lender or the Administrative
Agent (or any accountants or other experts designated by
it) during normal business hours and upon reasonable
notice and upon reasonable grounds to visit and inspect
and examine the books of account, records (excluding
company minute books), reports and other papers (and to
make copies and to take extracts therefrom) of the
Borrower and the Guarantor and to discuss its affairs,
finances and accounts with its officers, accountants and
auditors, all at such times and as often as may be
reasonably requested by the Lender or the Administrative
Agent but only in so far as such matters relate to
information as may reasonably be required by the Lender
or the Administrative Agent for any purpose connected
with this Agreement.
<PAGE>
12.5 Negative Pledge
Except as permitted in this Agreement neither the
Borrower nor any of its Subsidiaries shall without the
prior written consent of the Lender either borrow
further money from any lender (other than where that the
lender is one of the companies included in the
expression "the Borrower" or is the Guarantor) or create
or assume or permit to exist or arise any Security
Interest whatsoever over any part of its present or
future undertakings, property, assets uncalled capital
or revenues. The Borrower represents and warrants to
the Lender that there will be no such Security Interest
over any part its or its Subsidiaries present or future
undertakings, property, assets, uncalled capital or
revenues in existence as at the date of the first
drawdown under the Facility.
12.5.2 For the purposes of Clause 12.5.1 the Lender
agrees that the Borrower is entitled to enter
into an agreement on or about even date herewith
with The First National Bank of Chicago (ARBN
065 752 918) ("FNBC") pursuant to what FNBC
agrees to provide facilities to the Borrower
with accommodation limits totaling A$30,000,000
and an agreement on or about even date herewith
with Banque Nationale de Paris ARBN 000 000 117
("BNP") pursuant to which BNP agrees to provide
facilities to the Borrower with accommodation
limits totaling A$25,000,000.
12.6 Inspection
The Borrower shall permit the Lender or the
Administrative Agent upon, written request of the Lender
or the Administrative Agent to from time to time inspect
the register of the members of the Borrower where the
register or any branch register is so kept at any time
during regular business hours and the Borrower shall
furnish the Lender or the business hours and the
Borrower shall furnish the Lender or the Administrative
Agent with any information which the Lender may consider
reasonably necessary to enable it to determine whether
or not there has been at any time after the date of this
Agreement a transfer of the effective management and
control of the Borrower or the Guarantor.
<PAGE>
12.7 Public Information
12.7.1 Subject to sub-clause .2 of this clause, the
Borrower and the Guarantor shall furnish to the
Administrative Agent copies of all such
accounts, documents, reports, notices,
circulars, particulars and certificates
("Documents") which are required to be
furnished by the Borrower or the Guarantor to
any stock exchange, corporate affairs office
(or analogous office) or shareholder at the
same time as they are furnished to that stock
exchange, corporate affairs (or analogous
office) or shareholder and when requested by
the Administrative Agent copies of Documents
required under the provision of any trust deed
to which the Borrower or the Guarantor is a
party to be furnished to the trustee thereunder
from time to time.
12.7.2 Unless the Lender shall specifically request a
particular Document or class of Documents, the
Borrower and the Guarantor shall only be
obliged to provide the Administrative Agent
with those Documents which relate to matters
which may have a material effect on the
business or financial obligations of either the
Borrower or the Guarantor.
13. FINANCIAL INFORMATION
The Borrower and the Guarantor shall from time to time supply
the Lender with all financial or other information regarding
the Borrower and the Guarantor as the Lender may reasonably
request in writing always including the following without
request:
13.1 As soon as possible but in any event within 120 days of
the end of each Financial Year copies of the audited
annual profit and loss statement and balance sheet of
the Guarantor and the audited consolidated annual profit
and loss statement and balance sheet of the Guarantor
and the unaudited annual profit and loss statement and
balance sheet of the Borrower.
<PAGE>
13.2 As soon as possible but in any event within 60 days of
the end of each Quarter a copy of the management
accounts and of the unaudited balance sheet and profit
and loss statement of the Borrower and the Guarantor and
the unaudited consolidated profit and loss statement and
balance sheet of the Borrower and the Guarantor.
All of the financial information referred to above shall be
prepared in accordance with Accounting Standards.
14. EVENTS OF DEFAULT
If any of the following events occur ("Events of Default") the
Loans and all other moneys owing to the Lender by the Borrower
shall at the option of the Lender and notwithstanding any delay
or previous waiver of the right to exercise such option become
immediately due and payable upon written demand by the Lender
to the Borrower and the obligations of the Lender under this
Agreement shall be cancelled:
14.1 If the Borrower fails to observe or perform any
obligations to be observed or performed by it under this
Agreement or in connection with any transaction
contemplated by this Agreement and if such default shall
in the opinion of the Lender be capable of prompt
remedy, the Borrower shall not have remedied such
default within seven (7) days after notification by the
Lender to the Borrower requiring remedy of such default.
14.2 Any representation or statement made or deemed to be
made by the Borrower or the Guarantor in this Agreement
or in writing pursuant to this Agreement shall not be
complied with or shall prove to be untrue in any respect
which materially adversely affects the interests of the
Lender on any date as of which it was made or deemed
made.
14.3 If all or any part of this Agreement becomes void,
illegal, invalid, unenforceable, or of limited or
reduced force or effect which is likely to adversely
affect the ability of the Borrower to carry out its
obligations under this Agreement.
<PAGE>
14.4 Any other present or future indebtedness of the Borrower
for borrowed money in excess of A$2,000,000 shall become
due and payable prior to the stated maturity thereof as
a result of a default or any such indebtedness shall not
be paid on the due date thereof.
14.5 If the Borrower is wound up or if a petition is
presented or an order is made for the winding up of the
Borrower and is not withdrawn within fourteen (14) days
or if a resolution is passed for the winding up of the
Borrower otherwise than for the purpose of
reconstruction or amalgamation the terms of which have
previously been approved in writing by the Lender such
approval not to be unreasonably withheld.
14.6 If a receiver or receiver and manager is appointed in
respect of any part of the assets of the Borrower or an
encumbrancer takes possession of the undertaking or the
property of the Borrower or any part thereof.
14.7 If the Borrower makes default under any charge or
security in favour of any person other than the Lender
and the holder of that charge or security elects to
enforce that charge or security.
14.8 If a compromise or arrangement is proposed between the
Borrower or the Guarantor and their creditors or any
class of them or if an application is made to a court
for an order summoning a meeting of creditors or any
class of them of the Borrower or the Guarantor.
14.9 If without the prior written consent of the Lender the
Borrower reduces or attempts to reduce its capital or
buy back any of its shares.
14.10 If the Borrower is placed under administration pursuant
to Part 5.3A of the Corporations Law or causes or
proposes to cause a meeting of its creditors to be
summoned for the purposes of placing the Borrower under
administration pursuant to Part 5.3A of the Corporations
Law.
<PAGE>
14.11 If any of the property of the Borrower, the ownership of
which is in the opinion of the Lender material to the
ability of the Borrower to perform its obligations under
this Agreement, is seized or otherwise expropriated,
nationalized, confiscated or acquired through any
governmental action or intervention or if custody or
control of such property shall be assumed by any
government or government agency.
14.12 If a meeting of the Borrower or the Guarantor is called
for the purpose of considering and if thought fit
passing any resolution the passing of which would
constitute or give rise to an Event of Default.
14.13 If in the reasonable opinion of the Lender there is a
change in the ownership control or management of the
Borrower which is likely to adversely affect the ability
of the Borrower to conduct its business in a proper
manner and to carry out its obligations under this
Agreement.
14.14 If the Borrower defaults in the performance or
observance of any provision of any other indebtedness to
or security of the Lender and the Borrower whether the
indebtedness or security is collateral to this Agreement
or whether it is a separate agreement between the Lender
and the Borrower and such default continues for more
than seven (7) days after notification by the Lender to
the Borrower requiring remedy of such default.
14.15 If the Borrower shall at any time not have an auditor
appointed pursuant to the provision of the Law.
14.16 If the Borrower makes any material change to the
business it carries on which in the reasonable opinion
of the Lender is likely to materially adversely affect
the interests of the Lender without the prior written
consent of the Lender or if the Borrower or the
Guarantor ceases or threatens to cease to carry on its
business.
14.17 If the Borrower or the Guarantor suffers any material
adverse change in their financial condition which is
likely, to materially affect the interest of the Lender
unless such change is agreed to in writing by the
Lender.
<PAGE>
14.18 If the Borrower ceases to be a wholly owned subsidiary
of the Guarantor.
14.19 If any event occurs that results in acceleration of
payments under the Credit Agreement dated December 15,
1997 between the Guarantor, the Banks listed therein
Royal Bank of Canada as Documentation Agent, The Chase
Manhattan Bank and Nations Bank N.A. as Co-Syndication
Agents and Morgan Guaranty Trust Company of New York as
Administrative Agent (or any other credit agreement in
replacement thereof) provided that such acceleration has
not been rescinded within five (5) days.
14.20 The cancellation or elimination by the Guarantor of the
credit agreement specified in clause 14.19 and failure
to replace such credit agreement with a facility
substantially, similar in form and substance.
15. INDEMNITIES
The Borrower indemnifies the Lender and the Administrative
Agent from and against all actions, suits, claims, demands,
losses, liabilities, damages, costs and expenses which may be
made or brought against or suffered or incurred by the Lender
or the Administrative Agent arising, out of or in connection
with:
15.1 any Event of Default ; or
15.2 any failure by the Borrower to take an Advance in
accordance with any request for a Drawdown.
SECTION D
16. GUARANTEE
The Guarantor unconditionally and irrevocably guarantees to the
Lender and the Administrative Agent the payment of all moneys
payable by the Borrower to the Lender or the Administrative
Agent pursuant to this Agreement ("the Guaranteed Money") and
the due observance and performance of all the covenants, terms,
conditions and agreements to be observed or performed by the
Borrower under this Agreement.
<PAGE>
17. GENERAL INDEMNITY
As an additional separate and independent obligation the
Guarantor indemnifies the Lender and the Administrative Agent
against any claim, action, damage, loss, liability, cost,
charge, expense, outgoing or payment which the Lender or the
Administrative Agent suffers, pays or incurs in respect of:
17.1 a failure by the Borrower to pay any Guaranteed Money
when due; or
17.2 a failure by the Borrower or the Guarantor to observe,
perform or comply with this Agreement: or
17.3 an Event of Default.
18. INDEMNITY FOR AVOIDANCE OF GUARANTEED MONEY
18.1 If any Guaranteed Money (or money which would be
Guaranteed Money were it not irrecoverable) is
irrecoverable from the Borrower, and is not recoverable
by the Lender or the Administrative Agent from the
Guarantor on the footing of the guarantee, the Guarantor
as an additional separate and independent obligation:
18.1.1 indemnifies the Lender and the Administrative
Agent against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or
payment which the Lender suffers, pays or
incurs in respect of the non-payment of that
Guaranteed Money; and
18.1.2 must pay the Lender the amount of that
Guaranteed Money.
18.2 This Clause applies to the Guaranteed Money (or money
which would be Guaranteed Money were it not
irrecoverable) whether or not:
18.2.1 it is or may be irrecoverable by reason of any
event described in Clause 24 by reason of any
other similar or dissimilar fact or
circumstance;
18.2.2 any transaction in respect of that money is
void, avoided, illegal or unenforceable; and
<PAGE>
18.2.3 any thing, in respect of the Guaranteed Money is
or should be known to the Lender.
19. PAYMENT OF GUARANTEED MONEY
The Guarantor must pay to the Lender any Guaranteed Money not
paid by the Borrower when due immediately on demand from the
Lender or the Administrative Agent (which may be made at any
time and from time to time).
20. ACKNOWLEDGMENT
The Guarantor acknowledges that it has not entered into this
Agreement in reliance on any representation, warranty, promise
or statement made by the Lender or any person on behalf of the
Lender or the Administrative Agent.
21. PRINCIPAL OBLIGATION
21.1 This Agreement is enforceable against the Guarantor:
21.1.1 without first enforcing any security held by
the Lender or the Administrative Agent;
21.1.2 whether or not the Lender or the Administrative
Agent has:
(i) made demand upon the Borrower;
(ii) given notice to the Borrower or the
Guarantor; or
(iii) taken any other steps against the
Borrower or the Guarantor, or any other
person;
21.1.3 despite the occurrence of any event described in
Clause 24.
<PAGE>
22. CONTINUING GUARANTEE AND INDEMNITY
22.1 Each guarantee and indemnity in this Agreement is a
continuing obligation of the Guarantor despite any
settlement of account or the occurrence of any other
thing and remains in full force and effect until all
money owing, contingently or otherwise, under this
Agreement is paid in full and this Agreement is finally
discharged by the Lender.
22.2 Each guarantee and each indemnity in this Agreement is an
additional, separate and independent obligation of the
Guarantor.
23. AMOUNT OF GUARANTEED MONEY
The obligations of the Guarantor under this Agreement extend to
any increase in the Guaranteed Money as a result of any
alteration, variation, supplement, renewal or replacement of
this Agreement made with the Guarantor's express written
consent.
24. UNCONDITIONAL NATURE OF OBLIGATIONS
This Agreement and the liability of the Guarantor under this
Agreement are not released, discharged or otherwise affected by
anything which but for this provision may have that effect
including, without limitation:
24.1 the grant of any time, waiver, covenant not to sue or
other indulgence to the Borrower, the Guarantor, or any
other person;
24.2 the discharge or release (including without limitation a
release as part of a novation) of the Borrower, or any
other person;
24.3 the liquidation of the Borrower, the Guarantor, or any
other person:
24.4 the Lender or the Administrative Agent;
24.4.1 exercising or enforcing;
24.4.2 failing to exercise or enforce; or
<PAGE>
24.4.3 delaying the exercise or enforcement of; any
other security or power;
24.5 the alteration, variation, supplement, replacement,
extinguishment, failure, loss, release, discharge,
abandonment, impairment, assignment or transfer of or
other dealing in respect of, or the failure of any
person to enter into any document or agreement;
24.6 this Agreement or any other document or agreement being
at any time void, voidable, avoided or unenforceable;
24.7 failure by the Borrower, the Lender or the
Administrative Agent to give notice to the Guarantor of
any default by the Borrower under this Agreement or any
other document or agreement;
24.8 a judgment against the Borrower, the Guarantor or any
other person;
24.9 any legal limitation, disability, incapacity or other
circumstances related to the Borrower, the Guarantor or
any other person;
24.10 acceptance by the Lender or the Administrative Agent of
a repudiation or termination of this Agreement or any
other document or agreement;
24.11 failure of any party to properly execute this Agreement;
24.12 any Guaranteed Money being irrecoverable for any reason;
24.13 the assignment, novation or assumption by the Lender,
the Administrative Agent, the Borrower or any other
person of any rights or obligations under this Agreement
or any other document or agreement;
24.14 any prejudice (including material prejudice) to the
Guarantor as a result of any thing done, or omitted to
be done by the Lender or the Administrative Agent or any
other person or any other thing: or
24.15 the receipt by the Lender of any dividend distribution
or other payment in respect of any liquidation.
<PAGE>
This Clause applies whether or not the Lender, the
Administrative Agent, the Borrower, the Guarantor or any other
person, consents to, has knowledge of, fails to consent to, or
have knowledge of, any event described above, or whether or not
there is any rule of law or equity to the contrary.
25. NO COMPETITION
25.1 While any guarantee or indemnity in this Agreement is in
effect the Guarantor may not:
25.1.1 be subrogated to the Lender or the
Administrative Agent;
25.1.2 claim the benefit of any security, guarantee or
other document or agreement, or any money held
by the Lender or any power;
25.1.3 subject to the further provisions of this
Clause either directly or indirectly prove in,
claim or receive the benefit of any
distribution, dividend or payment in respect of
the liquidation of the Borrower or any other
guarantor of the Guaranteed Money ("Surety");
25.1.4 make a claim or exercise or enforce any right
power or remedy against the Borrower or any
Surety;
24.1.5 accept or procure the grant of any security
from the Borrower or any Surety; or
24.1.6 raise any set-off (including, without
limitation any set-off in respect of amounts
due by the Lender to the Borrower) available to
the Guarantor, the Borrower, any Surety or
other person in reduction or discharge of its
obligations under this Agreement.
25.2 If required by the Lender or the Administrative Agent,
the Guarantor must:
25.2.1 prove in any liquidation of the Borrower or any
Surety for all moneys owed to the Guarantor;
and
<PAGE>
25.2.2 not exercise or attempt to exercise any right
of set-off against or realize any security
taken from the Borrower or any Surety.
25.3 All moneys recovered by the Guarantor from any
liquidation (or under any security from the Borrower or
any Surety) must be held in trust by the Guarantor for
the Lender to the extent of the unsatisfied liability of
the Guarantor under this Agreement.
26. PROOF BY LENDER
In the event of the liquidation of the Borrower or any Surety,
the Guarantor authorizes the Lender to prove for all money
which the Guarantor has paid or is or may be obliged to pay
under this Agreement, other document or agreement or otherwise
in respect of the Guaranteed Money.
27. AVOIDANCE OF PAYMENTS
If any payment, conveyance, transfer or other transaction in
respect of or affecting the Guaranteed Money is:
27.1 void, voidable or unenforceable: or
27.2 is claimed to be void, voidable or unenforceable and that
claim is upheld, conceded or compromised;
the liability of the Guarantor under this Agreement is the same
as if:
27.3 that payment, conveyance, transfer or transaction; and
27.4 any release, settlement or discharge made in reliance on
any thing referred to above;
had not been made and the Guarantor must immediately do
everything necessary or required by the Lender or the
Administrative Agent to restore to the Lender or the
Administrative Agent this Agreement and any security held by the
Lender immediately prior to the payment, conveyance, transfer or
transaction.
<PAGE>
28. RETENTION OF AGREEMENT
The Lender and the Administrative Agent may retain this
Agreement for seven (7) months after full payment of the
Guaranteed Money or if anything in the previous Clause has
occurred or in the opinion of the Lender may occur, such longer
period as the Lender determines.
29. EXCLUSION OF MORATORIUM
To the extent permitted by law, a provision of any legislation
which at any time directly or indirectly:
29.1 lessens or otherwise varies or affects in favour of the
Guarantor any of its obligations under or any provision
of this Agreement; or
29.2 stays, postpones or otherwise prevents or prejudicially
affects the exercise by the Lender of any power;
is negatived and excluded from this Agreement and all relief and
protection conferred on the Guarantor by or under that
legislation is also negatived and excluded.
30. NON-EXERCISE OF GUARANTOR'S RIGHTS
The Guarantor must not exercise any rights it has inconsistent
with this Agreement.
31. PAYMENTS IN GROSS
All payments which the Guarantor is required to make under this
Agreement must be made to the Lender to an address or account in
Australia directed by the Lender or the Administrative Agent
from time to time.
32. SUSPENSE ACCOUNT
32.1 The Lender may apply to the credit of an interest bearing
suspense account:
32.1.1 any amounts received from the Guarantor under
this Agreement;
<PAGE>
32.1.2 any dividends, distributions or other amounts
received in respect of the Guaranteed Money in
any liquidation;
32.1.3 any other amounts received from the Guarantor,
the Borrower, any other guarantor or any other
person in respect of the Guaranteed Money.
32.2 The Lender may retain the amounts in the suspense account
and may, but is not obliged to, apply them in or towards
satisfaction of the Guaranteed Money.
32.3 In the event that the Lender is satisfied that it has
received all of the Guaranteed Money in full and that it
will not be required to repay any such moneys under any
laws relating to insolvency it will refund the moneys in
the suspense account and any interest accrued thereon
(less any financial institution duty or debits tax
payable in respect of any deposits or debits in respect
of the suspense account) to the Borrower or the Guarantor
or any such other person as the case may be.
SECTION E
33. APPOINTMENT OF ADMINISTRATIVE AGENT
33.1 The Lender irrevocably appoints the Administrative Agent
as its agent, with the rights and duties expressed in
this Agreement.
33.2 In acting as agent, the Administrative Agent:
33.2.1 does not assume any fiduciary duties to the
Lender;
33.2.2 is an independent contractor.
33.3 The Lender waives any claim which may arise against the
Administrative Agent under the law of agency or for
breach of fiduciary duty.
33.4 The Administrative Agent agrees to act as Administrative
Agent of the Lender on these terms.
<PAGE>
34. POWERS AND DUTIES OF ADMINISTRATIVE AGENT
34.1 The Administrative Agent may exercise any powers which
this Agreement expressly delegates to Administrative
Agent, and any powers reasonably incidental thereto.
34.2 The Administrative Agent must take any action which this
Agreement specifically requires the Administrative Agent
to take. The Administrative Agent need not take any
other action and does not have any implied duties to the
Lender.
34.3 The Administrative Agent must forward to the Lender a
copy of each Drawdown Notice and each Interest Period
Notice under the Term Loan Facility it receives it from
the Borrower.
35. GENERAL IMMUNITY
Neither the Administrative Agent nor any of its directors,
officers, agents or employees are liable to the Borrower, the
Guarantor, or the Lender for any act or omission by any of them
in respect of this Agreement, except to the extent that the act
or omission arises from gross negligence or willful misconduct.
36. NO RESPONSIBILITY FOR LOANS ETC
36.1 Neither the Administrative Agent nor any of its
directors, officers, agents or employees need ascertain,
enquire into or verify:
36.1.1 any statement, warranty or representation made
in connection with this Agreement or any
borrowing under this Agreement;
36.1.2 the performance of any term of this Agreement
including any obligation to pay proof or any
term requiring the provision of information
directly to the Lender;
36.1.3 the enforceability, sufficiency or genuineness
of this Agreement or any other writing in
connection therewith;
36.1.4 the existence or possible existence of any
Event of Default;
<PAGE>
36.1.5 the financial condition of any Borrower or the
Guarantor.
36.2 The Administrative Agent need not disclose to the Lender
information volunteered by the Borrower or the Guarantor
to the Administrative Agent (either in its capacity as
agent or in its individual capacity).
37. ACTING ON INSTRUCTIONS OF LENDER
37.1 The Administrative Agent need not take any action under
this Agreement unless:
37.1.1 the Lender instructs it to do so in writing;
and
37.1.2 the Lender indemnifies the Administrative Agent
to the Administrative Agent's satisfaction
against all liability, costs and expenses it
incurs in taking or continuing any action.
38. ADMINISTRATIVE AGENT AND LEGAL ADVISERS
38.1 The Administrative Agent may perform any of its duties
under this Agreement by its employees, agents and legal
advisers.
38.2 If the Administrative Agent selects those agents and
legal advisers with reasonable care, the Administrative
Agent is not liable to the Lender for any default or
misconduct by those agents or legal advisers, except as
to money or securities received by the Administrative
Agent or its agents or legal advisers.
38.3 The Administrative Agent may obtain legal advice about
this Agreement or any matter relating to or arising out
of this Agreement.
39. RELIANCE ON DOCUMENTS AND LEGAL ADVICE
The Administrative Agent may rely on:
<PAGE>
39.1 any notice, consent, certificate, affidavit, letter,
facsimile, statement, paper or document if the
Administrative Agent believes it to be genuine and
correct and to have been signed or sent by the proper
person; and
39.2 in respect of legal matters, the opinion of its legal
advisers (who may be employees of the Administrative
Agent).
40. AGENT'S INDEMNIFICATION
40.1 The Lender indemnifies the Administrative Agent for all
losses, and all costs, liability and expenses incurred by
the Administrative Agent in respect of or in any way
related to or arising out of this Agreement and other
related documents or any actions taken or omitted by the
Administrative Agent. This may include costs which the
Borrower or the Guarantor fails to pay, administration
costs, agency fees, enforcement costs, and costs of a
dispute between the Administrative Agent and the Lender.
However, it does not include losses, costs, liability and
expenses resulting from the gross negligence or willful
misconduct of the Administrative Agent (as found by a
court of competent jurisdiction in a final non-appealable
judgment).
40.2 This obligation survives payment of all moneys payment
pursuant to this Agreement and termination of this
Agreement.
40.3 This section E of this Agreement does not limit the
obligations of the Borrower or the Guarantor under this
Agreement.
41. LENDER CREDIT DECISIONS
The Lender has made its own credit analysis and decision to
enter into the Agreement independently and without relying on
First Chicago.
<PAGE>
42. RESIGNATION OF ADMINISTRATIVE AGENT
42.1 The Administrative Agent may resign at any time by giving
a written notice thereof to the Lender. Upon
resignation, the Lender shall have the right to appoint a
successor Administrative Agent with the written approval
of the Borrower (that approval not to be unreasonably
withheld). If no successor Administrative Agent has been
appointed by the Lender and accepted that appointment
within thirty days after the retiring Administrative
Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lender and
with the written approval of the Borrower (that approval
not to be unreasonably withheld), appoint a successor
agent.
42.2 If no successor Administrative Agent has been appointed
pursuant to the clause 42.1 within the thirty days
following the giving of notice of resignation by the
retiring Administrative Agent, the resignation shall
nonetheless then become effective and the Lender shall
perform the duties and be entitled to the rights of the
Administrative Agent hereunder until it appoints a
successor agent (which it shall not be under any
obligation to so do).
42.3 Upon the acceptance of any appointment as Administrative
Agent by a successor Administrative Agent, the successor
Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent.
42.4 Whether or not a successor Administrative Agent has been
appointed, the retiring Administrative Agent shall be
discharged from its duties and obligations under this
Agreement upon its resignation becoming effective. After
any person's resignation under this Agreement as the
agent, the provisions of this Agreement shall continue in
effect for its benefit and for the benefit of the Lender
in respect of any actions taken or omitted to be taken by
the person while it was acting as the Administrative
Agent.
42.5 During any period in which a successor agent is not
appointed the agency fee referred to in clause 7.3 shall
be payable by the Borrower to the Lender.
<PAGE>
SECTION F
43. CERTIFICATIONS
43.1 Any document or thing required to be certified by the
Borrower or the Guarantor shall be certified an
Authorized Officer of the Borrower or the Guarantor or in
such other manner as the Lender may approve.
43.2 A certificate signed by an Authorized Officer of the
Lender or the Administrative Agent stating any amount or
rate for the purpose of this Agreement shall in the
absence of manifest error be conclusive and binding on
the Borrower.
44. UNLAWFULNESS
If:
44.1 any law, regulation or regulatory requirement or
judgment, order or direction of any court, tribunal or
authority binding upon the Lender or its ultimate parent
company in the jurisdiction in which the Lender or its
ultimate parent company is formed or has its principal or
lending office or in which any action is required to be
performed by it for the purposes of this Agreement, or
44.2 any change in the interpretation of any such law,
regulation or regulatory requirement or judgment, order
or direction of any court, tribunal or authority by any
government or governmental agency charged with the
administration thereof or by a court of competent
jurisdiction or compliance by the Lender with any request
or direction (whether or not having the force of law) of
the Reserve Bank of Australia or any government or other
governmental agency in accordance with whose requests or
directions the Lender is accustomed to act;
renders it unlawful for the Lender to meet any of its
obligations under the Facility, the Lender shall promptly notify
the Borrower and the following provisions shall apply:
<PAGE>
44.3 the Borrower and the Lender shall negotiate in good faith
for a period not exceeding thirty (30) days (or such
longer period as is required) with a view to the Lender
making arrangements to be able to meet the relevant
obligations under the Facility in whole or in part in a
manner which is not unlawful; and
44.4 if no such arrangements have been made by the end of such
period, thereupon the Lender shall be released from its
obligations under this Agreement, the Facility shall be
cancelled and the Borrower shall pay to the Lender the
Loans under this Agreement prior to the date on which it
becomes unlawful for the Lender to meets its obligations
under the Facility.
45. AUTHORITY TO DEBIT ACCOUNTS
The Borrower and the Guarantor irrevocably authorize and direct
the Lender and the Administrative Agent to debit any account or
accounts of the Borrower or the Guarantor with the Lender or the
Administrative Agent in respect of any amounts that are from
time to time due and payable under this Agreement by the
Borrower or the Guarantor respectively. The Lender will notify
the Borrower and the Guarantor (as the case may be) of such
amounts so debited other than fees charged in accordance with
this Agreement and other than debits in accordance with prior
arrangements between the Lender and the Borrower or the
Guarantor.
46. NO WAIVER
No failure to exercise and no delay in exercising on the part of
the Lender any right, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall, any single or
partial exercise of any right power or privilege preclude any
other or further exercise thereof, or the exercise of any other
right, power or privilege. The rights and remedies of the
Lender provided in this Agreement are cumulative and not
exclusive of any rights or remedies provided by law or equity or
legislation or regulation.
<PAGE>
47. MERGER
47.1 The representations and warranties of the Borrower and
the Guarantor in this Agreement shall survive the
execution of this Agreement and the making of any Advance
under this Agreement and shall enure for the benefit of
the Lender and the Administrative Agent until the Loans
have been paid in full by the Borrower to the Lender.
47.2 If the liability of the Borrower or the Guarantor to pay
to the Lender or the Administrative Agent any moneys
payable under this Agreement becomes merged in any deed,
judgment, order or other thing the Borrower or the
Guarantor (as the case may be) shall pay interest on the
amount owing from time to time under that deed, judgment,
order or other thing at the higher of the rate payable
under this Agreement and that fixed by or payable under
that deed, judgment, order or other thing.
48. TIME OF THE ESSENCE
Time shall be of the essence as regards any date or period
determined under this Agreement save only to the extent that any
such date or period may be altered by mutual agreement between
the parties whereupon time shall be of the essence as regards
such altered date or period.
49. SET OFF
49.1 The Borrower and the Lender do expressly acknowledge and
agree that:
49.1.1 Where the Lender now or at any time in the
future is indebted on any account to the
Borrower pursuant to arrangements made between
them such arrangements are hereinafter referred
to as the "Arrangements".
<PAGE>
49.1.2 Notwithstanding the Arrangements and any other
provision of this Agreement (and without
prejudice to the Lender's other rights and
remedies) any monies (whether by way of
principal interest or otherwise and whether
present future actual or contingent) which the
Lender may now or may hereafter owe to the
Borrower under the Arrangements may be applied
to and set off by the Lender as and when the
same may become due and payable pro rata against
the Loans as and when they become due and
payable to the intent and effect:
(i) first that the Lender may at any time and
from time to time deduct from and retain
out of the monies otherwise payable by the
Lender to the Borrower pursuant to the
Arrangements such amounts as the Lender
may think fit and apply or set off such
amounts in or toward or against
satisfaction of the Loans; and
(ii) secondly that upon default by the Borrower
hereunder the Lender shall not be obliged
to pay any monies to the Borrower under
the Arrangements until the obligations of
the Borrower to the Lender to pay any
monies to the Lender hereunder are paid
and satisfied in full.
49.2 The contractual rights of set off conferred on the Lender
under sub-clause .1 of this clause are in addition to,
and not in substitution for, any rights of set off
otherwise conferred on or available to the Lender at law
or in equity including (without limitation) any banker's
rights of set off or right of combination of accounts or
banker's lien.
49.3 For the avoidance of doubt the Lender and the Borrower
further declare and acknowledge that the debts and
liabilities arising or created hereunder and pursuant
hereto and under and pursuant to the Arrangements are
mutual debts within the meaning of Section 86(l) of the
Bankruptcy Act 1966 (Cwth) (as incorporated in the
Corporations Law) and that upon the liquidation or
<PAGE>
bankruptcy of the Borrower the provisions of Section 86
of the said Bankruptcy Act shall apply so that any sum
due from the Borrower to the Lender hereunder shall be
set off against any sum due from the Lender to the
Borrower under the Arrangements.
49.4 The Borrower acknowledges and agrees that it will not and
will not attempt to prevent the Lender from exercising
its rights of set off as aforesaid in the circumstances
contemplated in respect thereof.
50. APPROPRIATION
The Lender or the Administrative Agent may appropriate any
payment towards the satisfaction of any moneys due by the
Borrower in any way that the Lender or the Administrative Agent
thinks fit and notwithstanding any purported appropriation by
the Borrower.
51. SUCCESSORS
This Agreement shall bind the parties and their respective heirs
executors administrators successors and assigns.
52. ASSIGNMENT
52.1 The Lender may not at any time assign the benefits and
obligations on its part to be enjoyed or performed under
this Agreement without the consent in writing of the
Borrower which shall not be unreasonably delayed or
withheld. Neither the Borrower nor the Guarantor shall
assign or purport to assign any of the benefits or
obligations on its part to be enjoyed or performed under
this Agreement without the consent in writing of the
Lender.
52.2 The Lender may (subject to prior notification to the
Borrower) disclose to any prospective assignee, on a
confidential basis, such information concerning the
Borrower as it considers appropriate without incurring
any liability for any breach of the duty of banker-
customer confidentiality.
<PAGE>
53. NOTICES
Any notice demand consent or other communication to be given
under or in connection with this Agreement shall be in writing
or if it is to be given by the Lender or the Administrative
Agent may be signed by any Authorized Officer of the Lender or
the Administrative Agent or any solicitor for the time being
acting for the Lender or the Administrative Agent and if it is
to be given by the Borrower shall be under the common seal of
the Borrower or the hand of an Authorized Officer of the
Borrower and may be served either:
53.1 personally; or
53.2 by posting the same by registered or certified mail to
the party to whom the notice is directed at its address
appearing in this Agreement or at any other address of
which prior notification shall have been given by the
addressee prior to the dispatch of the said notice and
any notice given by post shall be deemed to have been
received by the party to whom it is addressed at the
expiration of forty eight (48) hours (ten Business Days
where the addressee is the Guarantor) after the same has
been properly posted; or
53.3 by facsimile transmission:
To the Lender: (02) 9223 1096
Attention: Credit Administrator
To the Administrative
Agent: (08) 8223 2948
Attention: Loan Administrator
To the Borrower: (08) 8248 8250
Attention: Treasurer
To the Guarantor: 1 (847) 205 4894
Attention: Treasurer
<PAGE>
or any other facsimile number of which prior notification
shall have been given to the sender prior to the
transmission of the facsimile and any facsimile
transmission shall be deemed to have been served on the
date of transmission by the sender if the sender shall
receive confirmation of receipt of the notice in its
entirety from the recipient. The original of any
facsimile transmission shall be posted in accordance with
sub-clause .2 of this clause on the date of transmission
or if transmitted after usual posting hours the next
Business Day.
If the date of dispatch is not a Business Day in the place to
which such notice, request demand or other communication is sent
it shall be deemed to have been received at the commencement of
business on the next following Business Day in such place.
Notice given to any one or more of the persons (if more than
one) comprised in the expressions "the Borrower" shall be deemed
notice to all such persons. Signatures may be manuscript or may
be printed or reproduced by other mechanical means.
54. OTHER DOCUMENTS
The Borrower and the Guarantor shall either before or after the
making of any Advance under this Agreement do all such acts
matters and things and shall sign or execute and deliver all
such documents or writing or assurances as may in the reasonable
opinion of the Lender or the Administrative Agent be necessary
or expedient to further and more effectually carry into full
effect the provisions of this Agreement and for conferring the
full benefit thereof upon the Lender and the Administrative
Agent.
55. AMENDMENT
No amendment of this Agreement shall bind the parties unless
made in writing expressed to be supplemental to or in
substitution for the whole or part of this Agreement.
<PAGE>
56. GOVERNING LAW AND JURISDICTION
This Agreement and the rights and obligations of the parties
shall be governed by and construed in accordance with the laws
in force in the State of South Australia and the parties agree
by the execution of this Agreement to irrevocably submit to the
non-exclusive jurisdiction of the Courts in the State of South
Australia in respect of all matters arising under or in
connection with this Agreement provided always that the Lender
may proceed in the Courts of any Territory State or country
having or claiming jurisdiction in respect of the matter which
is the subject of the proceedings.
57. SEVERANCE
An provision of this Agreement which is or becomes prohibited
invalid unlawful void or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective and capable of
severance without affecting the remaining provisions of this
Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
58. COUNTERPARTS
This Agreement may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
59. ENTIRE AGREEMENT
This Agreement contains all of the terms and conditions upon
which the Lender will provide financial accommodation to the
Borrower and supersedes any previous or extant arrangements with
respect to the same.
<PAGE>
EXECUTED AS AN AGREEMENT
SIGNED for and on behalf of )RABO AUSTRALIA LIMITED
RABO AUSTRALIA LIMITED )by its Attorneys who state that at the
time
by )of executing this instrument they have
)no notice of the revocation of the Power
and )of Attorney dated 4 July 1997
)under the authority of which they have
its Attorneys )executed this instrument
) /s/ Philip Streten
---------------------------------
Attorney
Philip Streten
State Manager Corporate Banking, Victoria
---------------------------------
Name/Position
/s/ R.B. Agg
---------------------------------
Attorney
R.B. Agg
Manager Corporate Banking, Victoria
---------------------------------
Name/Position
SIGNED for and on behalf of ) /s/ Timothy Blackmore
THE FIRST NATIONAL BANK )--------------------------------
OF CHICAGO by its Authorized ) Authorized Officer
Officers ) Timothy Blackmore/Vice President
--------------------------------
Name/Position
/s/ S.K. Milne
--------------------------------
Authorized Officer
S.K. Milne/Associate Underwriter
--------------------------------
Name/Position
<PAGE>
THE COMMON SEAL of )
PENRICE SODA PRODUCTS PTY LTD )
was hereunto affixed )
in the presence of: )
/s/ D.A. Reid
- - ---------------------------
Director
David Reid
- - ---------------------------
Print name of Director
/s/ Henrik Michael Alhsnis
- - ---------------------------
Director or Secretary
Henrik Michael Alhsnis
- - ---------------------------
Print name of Director or Secretary
THE COMMON SEAL of )
PENRICE HOLDINGS PTY )
was hereunto affixed )
in the presence of: )
/s/ D.A. Reid
- - ---------------------------
Director
David Reid
- - ---------------------------
Print name of Director
Henrik Michael Alhsnis
- - ---------------------------
Director or Secretary
Henrik Michael Alhsnis
- - ---------------------------
Print name of Director or Secretary
<PAGE>
THE COMMON SEAL of )
IMC GLOBAL AUSTRALIA PTY LTD )
was hereunto affixed )
in the presence of: )
- - ------------------------------
Director
- - ------------------------------
Print name of Director
- - ------------------------------
Secretary
- - ------------------------------
Print name of Director or Secretary
SIGNED for and on behalf of )
IMC GLOBAL INC )
By: /s/ E. Paul Dunn, Jr.
----------------------------
Name: E. Paul Dunn, Jr.
-------------------------
Title: Vice President & Treasurer
----------------------------
<PAGE>
THE COMMON SEAL of )
IMC GLOBAL AUSTRALIA PTY LTD )
was hereunto affixed )
in the presence of: )
/s/ D.A. Reid
- - ---------------------------------
Director
David Reid
- - ---------------------------------
Print name of Director
/s/ Henrik Michael Alhsnis
- - ---------------------------------
Director or Secretary
Henrik Michael Alhsnis
- - ---------------------------------
Print name of Director or Secretary
SIGNED for and on behalf of )
IMC GLOBAL INC )
By
--------------------------------
Name
------------------------------
Title
-----------------------------
<PAGE>
SCHEDULE I
FORM OF DRAWDOWN NOTICE
NOTICE
TO: THE FIRST NATIONAL BANK OF CHICAGO
70 Hindmarsh Square
ADELAIDE SA 5000
Facility Agreement dated 1998 ("the Agreement"). The
undersigned refers to the above Agreement and irrevocably gives you
notice of drawdown under the Facility as follows:
CASH ADVANCE/TERM LOAN
1. Drawdown Date: 19
------------------- --
2. Amount to be drawn: $ (Australian Dollars)
-------------------
3. Period of the borrowing: days
----------
4. Payment Account:
-------------------
5. Interest Period: days
The Borrower by its execution of this Notice reaffirms and
reconstitutes all representations and warranties or agreements of the
Borrower in the Agreement as if made at the date of this Notice (except
to the extent disclosed in writing to the Lender prior to the date of
this Drawdown Notice) and certifies that no Event of Default (as
defined in the Agreement) has occurred or is continuing or is likely to
result from this transaction.
DATED this day of 19
SIGNED by )
an Authorized Officer of ) ------------------------------
)
- - --------------------------------
<PAGE>
SCHEDULE 2
INTEREST PERIOD
NOTICE
TO: THE FIRST NATIONAL BANK OF CHICAGO
Facility Agreement dated 1998 ("the Agreement") [insert name
of relevant borrower] refers to the above Agreement and irrevocably
gives you notice of the required Interest Period under the Term Loan
Facility as follows:
Interest Period: commencing on
--------------------
SIGNED by )
an Authorized Officer of )
[insert name of relevant )
borrower] )--------------------------------
Authorized Officer
<PAGE>
SCHEDULE 3
VERIFICATION CERTIFICATE
TO: RABO AUSTRALIA LIMITED ("the Lender")
I, of
am a director/company secretary of PENRICE SODA PRODUCTS PTY LIMITED
(ACN 008 206 942), PENRICE HOLDINGS PTY (ACN 008 125 835) and IMC
GLOBAL AUSTRALIA PTY LIMITED (ACN 072 6-39 902) (each separately
hereafter referred to as "the Company") CERTIFY as follows:-
I certify that:
1. The company is not the trustee of any trust fund or settlement and
all its assets are legally and beneficially owned by it.
2. The Company is not a subsidiary of, or controlled by, an
Australian public company.
3. The assets of the Company are or will at the time of first
drawdown under the Agreement be free of any Security Interest
other than as consented to by the Lender in writing.
4. No meeting has been called to consider a resolution, no resolution
has been passed, no application is pending and no order has been
made for the winding up or administration of the Company.
5. The Company is not insolvent and it is not aware of any
circumstances, and has not received any demand which remains
unsatisfied, which is likely to lead to the winding up of the
Company under the Corporations Law.
6. No receiver, receiver and manager or administrator has been
appointed to the Company or any of its assets and the Company is
not a party to any current legal proceedings which is likely to
adversely affect the ability of the Borrower to carry out its
obligations under the Agreement.
<PAGE>
7. A resolution of the directors of the Company:
(a) authorizing the acceptance and execution of the facility
agreement ("Agreement") governing the terms and conditions
of a 2 year revolving credit facility and a 5 year term loan
facility ("Facility") agreed to be provided by the Lender to
the Company; and
(b) appointing each of the persons set out in Annexure "A" as an
authorized officer of the Company to prepare, complete and
sign letters and notices on behalf of the Company for the
purposes of the Agreement and to do everything else that may
be necessary for the purposes of the Agreement or the
Facility including agreeing any amendments to the provisions
of the Agreement including the amount and term,
was passed in accordance with the Articles of Association of the
Company and an extract thereof is set out in Annexures "B, C and
D".
8. Set out in Annexure "A" are the normal signatures of each of the
authorized officers referred to above.
9. Neither the execution of the Agreement nor the passing of the
resolution referred to above has infringed or will infringe the
constitution of the Company or contravene any obligation to which
it is a party.
10. I am aware the Lender will rely on this certificate in providing
the Facility to the Company.
11. A word or phrase defined in the Agreement has the same meaning in
this certificate.
12. A current and up to date copy of the Constitution of the company
is attached hereto as Annexures E, F and G.
DATED the day of 1998
- - ----------------------------------
Signature
- - ----------------------------------
Position
<PAGE>
"A"
This is Annexure "A" referred to in the attached Verification
Certificate
AUTHORISED OFFICERS OF PENRICE SODA PRODUCTS PTY LIMITED
(ACN 008 206 942), PENRICE HOLDINGS PTY (ACN 008 125 835) AND IMC
GLOBAL AUSTRALIA PTY LIMITED (ACN 072 639 902)
("the Company")
The following are the names and signatures of the authorized officers
of the Company.
NAME SIGNATURE
(Please print)
<PAGE>
"B"
EXTRACT OF RESOLUTIONS OF THE BOARD OF DIRECTORS OF
PENRICE SODA PRODUCTS PTY LTD (ACN 008 206 942) ("the Company")
The Chairman noted that a quorum was present at the meeting comprising
Directors entitled to vote on the proposed resolutions and noted that
each Director disclosed that director's interest, if any, in the
subject matter of the proposed resolutions, without limitation, each
directorship, if any, in every company concerned in or by the subject
matter of the proposed resolutions.
Drafts of the following documents (the "Documents" ) were tabled at the
meeting:
Facility Agreement between Penrice Soda Products Pty Ltd, Penrice
Holdings Pty and IMC Global Australia Pty Ltd (together,
"Borrowers") as borrowers, The First National Bank of Chicago
("Bank") as administrative agent Banque Nationale de Paris as
lender and IMC Global Inc ("IMC") as guarantor;
Facility Agreement between the Borrowers as borrowers, the Bank as
lender and IMC as guarantor; and
Facility Agreement between the Borrowers as borrowers, the Bank as
administrative agent, Rabo Australia Limited as lender and IMC as
guarantor.
The Chairman reported in detail on the nature of the transactions
evidenced by the Documents and on the rights conferred on and
obligations assumed by the Company.
RESOLVED THAT:
13. the Company unconditionally execute and delivery the Documents in
the form of the drafts tabled together with all ancillary
documents and perform each of its obligations under each Document
and each ancillary document;
14. the common seal of the Company be affixed to such of the Documents
and ancillary documents requiring execution under the Company's
common seal and that each director be authorized to execute any
Document, ancillary document or other document considered
necessary or desirable by that Director; and
<PAGE>
15. [*] be appointed as Authorized Officers of the Company for the
purposes of the Documents and that they each be authorised to
execute any notices and communications under or in connection with
the Documents.
CERTIFIED to be a true copy of the extract of the Minutes of Meeting of
the Board of Directors of the Company (the "Meeting") duly convened and
held and that all procedural and formal requirements under the Articles
of Association of the Company and the Corporations Law in respect of
the Meeting, the resolutions and appointment of directors of the
Company have been complied with in full and that such resolutions have
not been amended, modified or revoked and are in full force and effect.
- - -----------------------------------
Chairman
- - -----------------------------------
Print Name
<PAGE>
"C"
EXTRACT OF RESOLUTIONS OF THE BOARD OF DIRECTORS OF
PENRICE HOLDINGS PTY (ACN 008 125 835) ("the Company")
The Chairman noted that a quorum was present at the meeting comprising
Directors entitled to vote on the proposed resolutions and noted that
each Director disclosed that director's interest, if any, in the
subject matter of the proposed resolutions, without limitation, each
directorship, if any, in every company concerned in or by the subject
matter of the proposed resolutions.
Drafts of the following documents (the "Documents") were tabled at the
meeting:
Facility Agreement between Penrice Soda Products Pty Ltd, Penrice
Holdings Pty and IMC Global Australia Pty Ltd (together,
"Borrowers") as borrowers, The First National Bank of Chicago
("Bank") as administrative agent Banque Nationale de Paris as
lender and IMC Global Inc ("IMC") as guarantor;
Facility Agreement between the Borrowers as borrowers, the Bank as
lender and IMC as guarantor; and
Facility Agreement between the Borrowers as borrowers, the Bank as
administrative agent, Rabo Australia Limited as lender and IMC as
guarantor.
The Chairman reported in detail on the nature of the transactions
evidenced by the Documents and on the rights conferred on and
obligations assumed by the Company.
RESOLVED THAT:
1. the Company unconditionally execute and delivery the Documents in
the form of the drafts tabled together with all ancillary
documents and perform each of its obligations under each Document
and each ancillary document;
2. the common seal of the Company be affixed to such of the Documents
and ancillary documents requiring execution under the Company's
common seal and that each director be authorized to execute any
Document. ancillary document or other document considered
necessary or desirable by that Director; and
<PAGE>
3. [*] be appointed as Authorized Officers of the Company for the
purposes of the Documents and that they each be authorized to
execute any notices and communications under or in connection with
the Documents.
CERTIFIED to be a true copy of the extract of the Minutes of Meeting of
the Board of Directors of the Company (the "Meeting") duly convened and
held and that all procedural and formal requirements under the Articles
of Association of the Company and the Corporations Law in respect of
the Meeting, the resolutions and appointment of directors of the
Company have been complied with in full and that such resolutions have
not been amended, modified or revoked and are in full force and effect.
- - ----------------------------
Chairman
- - ----------------------------
Print Name
<PAGE>
"D"
EXTRACT OF RESOLUTIONS OF THE BOARD OF DIRECTORS OF
IMC GLOBAL AUSTRALIA PTY LTD (ACN 072 6-39 902) ("the Company")
The Chairman noted that a quorum was present at the meeting comprising
Directors entitled to vote on the proposed resolutions and noted that
each Director disclosed that director's interest, if any, in the
subject matter of the proposed resolutions, without limitation, each
directorship, if any, in every company concerned in or by the subject
matter of the proposed resolutions.
Drafts of the following documents (the "Documents") were tabled at the
meeting:
Facility Agreement between Penrice Soda Products Pty Ltd, Penrice
Holdings Pty and IMC Global Australia Pty Ltd (together,
"Borrowers") as borrowers, The First National Bank of Chicago
("Bank") as administrative agent Banque Nationale de Paris as
lender and IMC Global Inc ("IMC") as guarantor;
Facility Agreement between the Borrowers as borrowers, the Bank as
lender and IMC as guarantor; and
Facility Agreement between the Borrowers as borrowers, the Bank as
administrative agent, Rabo Australia Limited as lender and IMC as
guarantor.
The Chairman reported in detail on the nature of the transactions
evidenced by the Documents and on the rights conferred on and
obligations assumed by the Company.
RESOLVED THAT:
1. the Company unconditionally execute and delivery the Documents in
the form of the drafts tabled together with all ancillary
documents and perform each of its obligations under each Document
and each ancillary document;
2. the common seal of the Company be affixed to such of the Documents
and ancillary documents requiring execution under the Company's
common seal and that each director be authorized to execute any
Document, ancillary document or other document considered
necessary or desirable by that Director; and
<PAGE>
3. [*] be appointed as Authorized Officers of the Company for the
purposes of the Documents and that they each be authorised to
execute any notices and communications under or in connection with
the Documents.
CERTIFIED to be a true copy of the extract of the Minutes of Meeting of
the Board of Directors of the Company (the "Meeting") duly convened and
held and that all procedural and formal requirements under the Articles
of Association of the Company and the Corporations Law in respect of
the Meeting, the resolutions and appointment of directors of the
Company have been complied with in full and that such resolutions have
not been amended, modified or revoked and are in full force and effect.
- - -------------------------------
Chairman
- - -------------------------------
Print Name
<PAGE>
SCHEDULE 4
FACSIMILE INDEMNITY
TO: RABO AUSTRALIA LIMITED
(the Financier)
FROM: PENRICE SODA PRODUCTS PTY LTD ACN 008 206 942
PENRICE HOLDINGS PTY ACN 008 125 835
IMC GLOBAL AUSTRALIA PTY LTD ACN 072 639 902
(each separately referred to as "the Customer")
IN CONSIDERATION of the Financier (which expression includes its
successors and assigns) agreeing to act on the basis of instructions
given by the Customer by Electronic Means, the Customer agrees as
follows:
1. In this indemnity "Electronic Means" means telephone, telex,
facsimile or any other electronic means.
2. The Customer agrees:
(a) that the Customer, and not the Financier, will bear all risks
in relation to any unauthorized or fraudulent notice or
communication given to the Financier by Electronic Means;
(b) that the Financier may, without further enquiry or reference
to the Customer, act on that notice or communication if it
includes a reference to the Customer and on its face purports
to be signed or given by an authorized signatory of the
Customer being a person notified as such in writing by the
Customer to the Financier from time to time;
(c) that the Financier, despite any other term of this indemnity,
may, in its absolute discretion, defer acting in accordance
with the whole or any part of a notice or communication
received by it pending further enquiry to and/or confirmation
by the Customer, but the Customer expressly agrees that the
Financier will not be under any responsibility to so defer in
any case.
<PAGE>
3. The Customer:
(a) release the Financier from all actions and claims in
connection with the Financier in good faith acting on
instructions given by Electronic Means or deferring to act
under paragraph 2(c) above; and
(b) indemnifies the Financier against all losses, costs and
expenses suffered as a result of any actions or claims in
connection with the Financier in good faith acting on
instructions given by Electronic Means, except where it is
conclusively proven that the Financier or its employees acted
negligently or fraudulently.
Date 1998
THE COMMON SEAL of )
PENRICE SODA )
PRODUCTS PTY LTD )
is affixed in the presence of: )
- - -------------------------- ------------------------------------
Signature of Director Signature of Director/Company Secretary
- - -------------------------- ------------------------------------
Print Name Print Name
THE COMMON SEAL of )
PENRICE HOLDINGS )
PTY is affixed in the presence )
of: )
- - -------------------------- ------------------------------------
Signature of Director Signature of Director/Company Secretary
- - -------------------------- ------------------------------------
Print Name Print Name
<PAGE>
THE COMMON SEAL of )
IMC GLOBAL AUSTRALIA )
PTY LTD is affixed in the )
presence of: )
- - -------------------------- ------------------------------------
Signature of Director Signature of Director/Company Secretary
- - -------------------------- ------------------------------------
Print Name Print Name
EXHIBIT 10.80
NON-COMPETITION AGREEMENT
This Non-Competition Agreement (the "Agreement) is entered into by and
between Robert M. Van Patten (the "Executive") and IMC Global Inc., a
Delaware corporation, as of this 1st day of August 1998.
WHEREAS, IMC Global Inc. has announced its intention and desire to sell
all of its ownership interest in IMC Agribusiness Inc., Hutson's Ag
Services, Inc. and IMC Nitrogen, Inc. (collectively, "AgriBusiness");
WHEREAS, the Executive signed a Non-Competition Agreement with The
Vigoro Corporation, a wholly owned subsidiary of IMC Global Inc., on or
about March 1, 1996 which the parties would like to terminate and
replace with this Agreement;
WHEREAS, IMC Global Inc. and the Executive have entered into a
Severance Agreement (the "Severance Agreement") contemporaneously with
this Agreement under which IMC Global Inc. agrees to pay Severance
Benefits (as defined in the Severance Agreement) to the Executive upon
his termination of employment under certain circumstances as defined
therein;
NOW, THEREFORE, in consideration of the substantial benefits available
to the executive under the Severance Agreement and the agreements and
covenants contained herein, the sufficiency of which is acknowledged,
the Executive and IMC Global Inc. hereby agree as follows:
1. Definitions. Each term defined herein shall be given its defined
meaning wherever used in this Agreement unless the context requires
otherwise.
(a) "Affiliate" means any corporation which is a member of the
same controlled group of corporations (within the meaning of
Section 414(b) of the Internal Revenue Code) as IMC Global
Inc. or any unincorporated trade or business which is under
common control with IMC Global Inc. (as determined under
Section 414(c) of the Internal Revenue Code).
(b) "Company" means IMC Global Inc. and its subsidiaries, as they
may exist from time to time.
(c) "Successor Company" means an entity to which the Company
transfers its ownership interest in and operation of
AgriBusiness.
<PAGE>
2. Confidential Information/ Proprietary Rights. Except as required by
law, for the longest period of time permitted by applicable law, the
Executive shall preserve the confidentiality of and shall not use or
divulge or take action reasonably likely to result in the use or
disclosure of any trade secret, proprietary or confidential information
of the Company or an Affiliate; provided, however, that the Executive
may use or disclose such information if it is or becomes public or
available to the general public otherwise than through any act or
default of a party that has an obligation of confidentiality or non-use
with respect to such information. Such information includes but is not
limited to (i) the identity, purchase and payment patterns of, and
special relations with, customers; (ii) the identity, net prices and
credit terms of, and special relations with, suppliers; (iii) inventory
selection and management techniques; (iv) product development and
marketing plans; and (v) finances.
3. Non-Competition. The Executive agrees to the following obligations
that he acknowledges to be reasonably designed to protect the Company's
legitimate business interests without unnecessarily or unreasonably
restricting his post-employment opportunities.
(a) The following restrictions apply during the period the
Executive is employed by the Company and for a period of three
years following the termination of his employment with the
Company. These restrictions apply regardless of the reason
for the Executive's termination or by whom initiated. The
parties expressly agree and intend that, for purposes of this
Agreement only, the Company's transfer of its ownership
interest in and operation of AgriBusiness to a Successor
Company, whether through a stock transaction or otherwise,
shall constitute a termination of the Executive's employment
with the Company.
(i) The Executive will not engage or assist others in
engaging in competition with the Company, directly or
indirectly, whether as an employer, proprietor, partner,
stockholder (other than the holder of less than 5% of the
stock of a corporation the securities of which are traded
on a national securities exchange or in the over-the-
counter market), director, officer, employee, consultant,
contractor, agent, or otherwise, in the business of
producing, brokering and/or distributing in a wholesale
capacity crop nutrients, animal feed ingredients, salt,
soda ash, sodium bicarbonate, sodium sulfate or boron
chemicals.
<PAGE>
(ii) The Executive will not solicit, in competition with the
Company, directly or indirectly, any person who is a
client, customer or prospect (as such terms are defined
below) for the purpose of performing services and/or
providing goods and services of the kind performed and/or
provided by the Company in the business of producing,
brokering and/or distributing in a wholesale capacity
crop nutrients, animal feed ingredients, salt, soda ash,
sodium bicarbonate, sodium sulfate or boron chemicals.
(iii) The Executive will not induce or persuade or attempt to
induce or persuade any employee, contractor or agent of
the Company to terminate his or her employment, agency,
or other relationship with the Company in order to enter
into any employment agency or other relationship in
competition with the Company.
Notwithstanding anything in the foregoing to the contrary, it shall not
be a violation of this Section 3(a) for the Executive to: (i) be
employed by the Successor Company; (ii) perform services covered by
this Section 3(a) on behalf of and as an employee of the Successor
Company; or (iii) solicit the Company's clients, customers or prospects
(as defined below) on behalf of and as an employee of the Successor
Company.
The covenants contained in this Section 3(a) shall apply within any
jurisdiction of North America, it being understood that the geographic
scope of the business and strategic plans of the Company extend
throughout North America and are not limited to any particular region
thereof and that such business may be engaged in effectively from any
location in such area.
As used herein, the terms "client," "customer" and "prospect" shall be
defined as any client, customer or prospect of any business in which
the Company is or has been substantially engaged within the one year
period prior to the Executive's termination of employment with the
Company (a) to which or to whom the Executive submitted or assisted in
the submission of a presentation or proposal of any kind on behalf of
the Company; (b) with which or with whom the Executive had substantial
contact relating to the business of the Company; or (c) about which or
about whom the Executive acquired substantial confidential or other
information as a result of or in connection with the Executive's
employment.
<PAGE>
(b) The Executive agrees that upon termination of his employment
he will immediately surrender and return to the Company all
Company records and other documents obtained by him,
entrusted to him, or otherwise in his possession or control
during the course of his employment by the Company, together
with all copies thereof.
(c) The Executive acknowledges that the provisions contained in
this Section 3 are reasonable and necessary because of the
substantial harm that would be caused to the Company by the
Executive engaging in any of the activities prohibited or
restricted herein. Nevertheless, it is the intent and
understanding of each party hereto that if, in any action
before any court, agency or other tribunal legally empowered
to enforce the covenants contained in this Section 3, any
term, restriction, covenant or promise contained therein is
found to be unenforceable due to unreasonableness or due to
any other reason, then such term, restriction, covenant or
promise shall be deemed modified to the extent necessary to
make it enforceable by such court or agency.
(d) The Executive acknowledges that his breach of this Section 3
will result in immediate and irreparable harm to the
Company's business interests, for which damages cannot be
calculated easily and for which damages are an inadequate
full remedy. Accordingly, and without limiting the right of
the Company to pursue all other legal or equitable remedies
available for the violation by the Executive of the covenants
contained in this Section 3, it is expressly agreed that
remedies other than injunctive relief cannot fully compensate
the Company for the irreparable injury that the Company could
suffer due to any such violation, threatened violation or
continuing violation and that the Company shall be entitled
to injunctive relief, without the necessity of proving actual
monetary loss, to prevent any such violation, threatened
violation or continuing violation thereof.
<PAGE>
4. Entire Agreement, Amendment, Waiver. This Agreement constitutes
the entire agreement between the Company and the Executive with respect
to the subject matter hereof. This Agreement terminates and supersedes
any prior agreements made between the parties with respect to the
subject matter hereof, including but not limited to the Executive's
Non-Competition Agreement entered into by the parties on or about March
1, 1996. The parties may not amend this Agreement except by written
instrument signed by both parties. No waiver by either party at any
time of any breach by the other of any provision of this Agreement
shall be deemed a waiver of similar or dissimilar provision at the same
time or any prior or subsequent time.
5. Severability. The provisions of this Agreement shall be regarded
as durable, and if any provision or portion thereof is declared invalid
or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder and applicability thereof shall not be
affected.
6. Assumption. This Agreement shall inure to the benefit of the
Company and to the successors and assigns of the Company; provided,
however, that it is understood that this Agreement shall not inure to
the benefit of or be assumed by a Successor Company.
7. Applicable Law. This Agreement shall at all times be governed by
and construed, interpreted and enforced in accordance with the internal
laws ( as opposed to the conflict of laws provisions) of the State of
Illinois.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officer and the Executive has signed this
Agreement as of the day and year first above written.
IMC GLOBAL INC. Robert M. Van Patten
By: /s/ B.R. Lockridge /s/ Robert M. Van Patten
------------------------------ -----------------------------
Title: Senior Vice President
---------------------------
EXHIBIT 10.81
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement) is entered into by and
between Robert M. Van Patten (the "Executive") and IMC Global Inc., a
Delaware corporation, as of this 19 day of March 1998 (the "Effective
Date").
WHEREAS, IMC Global Inc. has announced its intention and desire to sell
all of its ownership interest in IMC Agribusiness Inc., Hutson's Ag
Services, Inc. and IMC Nitrogen, Inc. (collectively, "AgriBusiness");
WHEREAS, IMC Global Inc. desires to retain the Executive in its employ
pending completion of the sale and to provide incentives to the
Executive to stay in its employ;
WHEREAS, it is IMC Global Inc. and the Executive's intent and
assumption that the purchaser of AgriBusiness will assume IMC Global
Inc.'s obligations hereunder and act fully in its stead as if it had
been the original contracting party;
NOW, THEREFORE, in consideration of the agreements and covenants
contained herein and in the Non-Competition Agreement entered into
contemporaneously with this Agreement by the parties hereto, the
sufficiency of which is acknowledged, the Executive and IMC Global Inc.
hereby agree as follows:
1. Definitions. Each term defined herein shall be given its defined
meaning wherever used in this Agreement unless the context requires
otherwise.
(a) "Affiliate" means any corporation which is a member of the same
controlled group of corporations (within the meaning of Section
414(b) of the Internal Revenue Code) as the Company or any
unincorporated trade or business which is under common control
with the Company (as determined under Section 414(c) of the
Internal Revenue Code).
<PAGE>
(b) "Cause" means the Executive (i) grossly neglects his duties;
(ii) engages in misconduct; (iii) breaches a material provision
of this Agreement; (iv) fails to cooperate fully with the
Company in effecting the sale of AgriBusiness. "Gross neglect"
means the failure to perform the essential functions of the
Executive's job or the failure to carry out the Company's
reasonable directions with respect to material duties after the
Executive is notified by the Company that the Executive is
failing to perform these essential functions or failing to
carry out the reasonable directions of the Company.
"Misconduct" means embezzlement or misappropriation of
corporate funds, or other acts of fraud, dishonesty, or self-
dealing; willful refusal to perform, or substantial disregard
of material duties; any significant violation of any statutory
or common law duty of loyalty to the Company or indictment for
a felony.
(c) "Company" means IMC Global Inc. and its subsidiaries, as they
may exist from time to time.
(d) "Good Reason" for termination of employment by the Executive
shall mean any of the following:
1. the continued failure by the Company, after notice and a
reasonable opportunity to cure, to (i) maintain the
Executive's base salary at a rate equal to or higher than
the rate in effect on the Effective Date; provided,
however, that Good Reason shall not exist as the result of
any decrease in base salary if such decrease is incident to
a general reduction applied to executives at a similar
level as the Executive on a proportionate and
nondiscriminatory basis; (ii) provide for continued
participation on a comparable basis by the Executive in an
annual bonus plan, including any long-term incentive plan,
maintained by the Company in which executives at a similar
level as the Executive participate; (iii) provide for
participation in stock option and other equity incentive
plans or programs maintained by the Company from time to
time in which executives at a similar level as the
Executive participate; (iv) provide for participation in
all Company sponsored group or executive medical, dental,
life, disability, retirement, profit-sharing, thrift, non-
qualified, deferred compensation, and other plans
<PAGE>
maintained by the Company to the same extent as executives
at a similar level as the Executive participate; (v)
provide vacation and perquisites substantially equivalent
to those provided by the Company to executives at a similar
level as the Executive; or
2. a significant adverse change, without the Executive's
written consent (which consent shall not be withheld
unreasonably) that continues after notice and 60 days to
cure, in working conditions or status, including but not
limited to a significant adverse change in the nature or
scope of the Executive's authority, powers, functions,
duties or responsibilities. A significant adverse change
does not include a change in the Company's status such
that it no longer has any equity securities registered
under Section 12(b) or 12(g) of the Securities Exchange
Act of 1934, as amended, or that it becomes a subsidiary
of another entity which directly results in changes in the
nature or scope of the Executive's authority, powers,
functions, duties or responsibilities shall not in and of
itself constitute Good Reason hereunder.
3. a change, without the Executive's consent, in the
Executive's primary employment location to a location that
is more than 50 miles from the primary location of the
Executive's employment as in effect immediately prior to
the Effective Date.
(e) "Successor Company" means an entity to which the Company
transfers its ownership interest in and operation of
AgriBusiness.
2. Term. This Agreement shall commence on the Effective Date and
shall terminate on the third anniversary of the Effective Date.
3. Severance Eligibility. If, during the Term of this Agreement, the
Executive's employment is terminated by the Company or Successor
Company or the Executive terminates his employment within 60 days
after the Executive has or should have knowledge that Good Reason
exists, the Executive shall be entitled to receive the Severance
Benefits described in paragraph 4 herein if he timely executes and
does not revoke a Waiver and Release of Claims substantially in
the form attached hereto as Exhibit A, unless his employment is
terminated during the Term of this Agreement due to any of the
<PAGE>
following: (i) the Executive's death; (ii) the Executive's
inability to perform the essential functions of his position with
or without reasonable accommodation; (iii) the Executive is
terminated for Cause; or (iv) the Executive voluntarily resigns or
retires. Notwithstanding the foregoing, if, in connection with
the sale of AgriBusiness, the Executive's employment with the
Company or Successor Company is terminated and (i) the Executive
is offered alternative employment with the Company, an Affiliate
or Successor Company that is at a location that is no more than 50
miles from the Executive's primary employment location immediately
prior to termination and that is at a reasonably comparable base
salary and the position offered has, in the Company's reasonable
determination, reasonably comparable duties and responsibilities
to the position the Executive held with the Company or Successor
Company at termination or (ii) the Executive accepts an offer of
employment with the Company, an Affiliate or Successor Company,
such termination shall not render the Executive eligible for
Severance Benefits under this Agreement.
4. Severance Benefits. If the Executive is eligible for Severance
Benefits as provided in paragraph 3 above, the Executive shall
receive the following "Severance Benefits":
(a) An amount equal to $1,356,627, paid in thirty-six (36)
monthly installments;
(b) If the Executive timely and appropriately exercises his right
to continue his coverage under the Company's medical and
dental plans as provided under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"), then
the Company will pay the employer portion (the Executive will
pay the employee portion) of such premiums for the Executive
until the earlier of: (i) the expiration of the one year
period following the date of termination and (ii) the date on
which the Executive is no longer eligible to continue such
coverage under COBRA. Except as provided in this paragraph,
the Executive's continued participation and coverage under
the group health insurance plans shall be governed by COBRA.
(c) The Company shall continue the Executive's coverage under its
life insurance policy until the earlier of (i) the expiration
of the one year period following the date of termination and
(ii) the date on which the Executive becomes eligible to
participate in and receive similar benefits under a plan or
<PAGE>
arrangement sponsored by another employer or under any
Company sponsored retirement plan. Participation shall be on
the same terms and conditions as are applicable to active
employees.
Severance Benefits shall be subject to all applicable federal,
state and local deductions and withholdings. At the option of the
Company, the present value of the Severance Benefits may be paid in
a lump sum at any point during the Severance Benefits period. The
Company's obligation to continue Severance Benefits shall cease
immediately if (i) the Company has or would have had grounds to
terminate the Executive's employment immediately for Cause; (ii)
the Executive violates the terms of the Non-Competition Agreement
entered into contemporaneously with this Agreement by the parties
hereto; or (iii) the Executive would otherwise not be entitled to
Severance Benefits under paragraph 3 above.
5. Confidential Information/ Proprietary Rights. Except as required by
law, during the term of this Agreement and thereafter for the
longest period of time permitted by applicable law, the Executive
shall preserve the confidentiality of and shall not use or divulge
or take action reasonably likely to result in the use or disclosure
of any trade secret, proprietary or confidential information of the
Company or an Affiliate; provided, however, that the Executive may
use or disclose such information if it is or becomes public or
available to the general public otherwise than through any act or
default of a party that has an obligation of confidentiality or
non-use with respect to such information. Such information
includes but is not limited to (i) the identity, purchase and
payment patterns of, and special relations with, customers; (ii)
the identity, net prices and credit terms of, and special relations
with, suppliers; (iii) inventory selection and management
techniques; (iv) product development and marketing plans; and (v)
finances except to the extent publicly disclosed.
6. Return of Company Property. The Executive agrees that upon
termination of his employment he will immediately surrender and
return to the Company all records and other documents obtained by
him, entrusted to him, or otherwise in his possession or control
during the course of his employment by the Company, together with
all copies thereof; provided, however, that subject to Company
review and authorization, the Executive may retain copies of such
documents as necessary for the Executive's personal records for
federal income tax purposes.
<PAGE>
7. Dispute Resolution. Any dispute arising out of this Agreement
shall be determined by arbitration under the commercial arbitration
rules of the American Arbitration Association then in effect. The
arbitration proceeding shall be conducted in Chicago, Illinois or
such other location to which the parties may agree. If either
party pursues a claim and such claim results in an arbitrator's
decision or award, both parties agree to accept such decision or
award as final and binding, and judgment upon the decision or award
rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The parties shall share the cost of the
arbitrator's services.
8. Entire Agreement, Amendment, Waiver. The parties agree and intend
that if the Executive is eligible for Severance Benefits hereunder,
then he shall not be eligible for severance benefits under any
other Company severance plan, policy or practice. If the
Executive's employment is terminated and he is not eligible for
Severance Benefits under this Agreement, the Executive's rights
under any employee benefit plans maintained by the Company shall be
determined in accordance with the provisions of such plans. This
Agreement constitutes the entire agreement between the Company and
the Executive with respect to the subject matter hereof. This
Agreement supersedes any prior agreements made between the parties
with respect to the subject matter hereof, including but not
limited to the Executive's Non-Competition Agreement entered into
by the parties on or about March 1, 1996. The Executive's
participation in and right to collect payments or benefits under
the Vigoro Corporation Severance Plan, dated November 13, 1995,
also shall terminate on the Effective Date of this Agreement. The
parties may not amend this Agreement except by written instrument
signed by both parties. No waiver by either party at any time of
any breach by the other of any provision of this Agreement shall be
deemed a waiver of similar or dissimilar provision at the same time
or any prior or subsequent time.
9. Assumption. This Agreement shall inure to benefit of, and be
binding upon, the successors and assignees of the Company and
AgriBusiness. The Company and AgriBusiness shall require any
successor or assignee, whether direct or indirect, by purchase,
merger, consolidation or otherwise, to all or substantially all of
the business or assets of the Company or AgriBusiness, expressly
and unconditionally to assume and agree to perform the Company's
obligations under this Agreement.
<PAGE>
10. Notice. Any notice, request, or other communication required or
permitted to be given hereunder shall be made to the addresses
hereinafter set forth or to any other address designated by either
of the parties hereto by notice similarly given:
If to the Company: If to the Executive:
Senior Vice President, Human Resources Robert M. Van Patten
IMC Global Inc. 3003 Sunset Boulevard S.
2100 Sanders Road Edwardsville, IL 62025
Northbrook, IL 60062
All such notices, requests or other communications shall be
sufficient if made in writing either (i) by personal delivery to
the party entitled thereto, (ii) by facsimile with confirmation of
receipt, (iii) by registered or certified mail, return receipt
requested or (iv) by express courier service. The notice, request
or other communication shall be deemed effective upon personal
delivery, upon confirmation of receipt of facsimile transmission,
or upon actual or constructive receipt by the party entitled
thereto if by registered or certified mail or express courier
service; provided, however, that a notice, request or other
communication received after regular business hours shall be deemed
to be received on the next succeeding business day of the Company.
11. Employment At-Will. Nothing herein shall be construed as altering
the employment at-will status of the Executive. The Executive and
the Company can terminate the Executive's employment at any time
for any reason.
12. Severability. The provisions of this Agreement shall be regarded
as durable, and if any provision or portion thereof is declared
invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remainder and applicability
thereof shall not be affected.
13. Applicable Law. This Agreement shall at all times be governed by
and construed, interpreted and enforced in accordance with the
internal laws ( as opposed to the conflict of laws provisions) of
the State of Illinois.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officer and the Executive has signed this
Agreement as of the day and year first above written.
IMC GLOBAL INC. Robert M. Van Patten
By: /s/ B.R. Lockridge /s/ Robert M. Van Patten
-------------------------- ----------------------------
Title: Senior Vice President
-----------------------
<PAGE>
EXHIBIT A
WAIVER AND RELEASE OF CLAIMS
In exchange for the Severance Benefits described in the attached
Severance Agreement (the "Agreement"), which I acknowledge I would not
otherwise be entitled to receive, I freely and voluntarily agree to
this WAIVER AND RELEASE OF CLAIMS ("WAIVER"):
1. My employment with IMC Global Inc. will terminate effective
- - -------------------------.
2. I acknowledge that the Severance Benefits described in the
attached Agreement are the sole payments to which I am entitled and
that I am not entitled to any additional severance payments.
3. I, and anyone claiming through me, hereby waive and release any
and all claims that I may have ever had or that I may now have against
IMC Global Inc., its parents, divisions, partnerships, affiliates,
subsidiaries, and other related entities and their successors and
assigns, and past, present and future officers, directors, employees,
agents and attorneys of each of them in their individual or official
capacity (hereinafter collectively referred to as "Released Parties").
Among the claims that I am waiving are claims relating to my employment
or termination of employment, including, but not limited to, claims of
discrimination in employment brought under the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act of 1964, the
Americans With Disabilities Act or other federal, state or local
employment discrimination, employment, wage laws, ordinances or
regulations or any common law or statutory claims of wrongful discharge
or breach of contract or any other common law or statutory claims;
whether for damages, lost wages or for any other relief or remedy.
4. I understand and agree that this WAIVER will be binding on me and
my heirs, administrators and assigns. I acknowledge that I have not
assigned any claims or filed or initiated any legal proceedings against
any of the Released Parties.
5. Except as may be required by law, I agree that I will not disclose
the existence or terms of this WAIVER to anyone except my accountant,
attorney or spouse, each of whom shall also be bound by this
confidentiality provision.
<PAGE>
6. I understand that I have [twenty-one (21)] [forty-five (45)] days
to consider whether to sign this WAIVER and return it to B. Russell
Lockridge, Senior Vice President, Human Resources of IMC Global Inc.
IMC Global Inc. hereby advises me of my right to consult with an
attorney before signing the WAIVER and I acknowledge that I have had an
opportunity to consult with an attorney and have either held such
consultation or have determined not to consult with an attorney.
7. I understand that I may revoke my acceptance of this WAIVER by
delivering notice of my revocation to B. Russell Lockridge within seven
(7) days of the day I sign the WAIVER. If I do not revoke my
acceptance of this WAIVER within seven days of the day I sign it, it
will be legally binding and enforceable.
IMC GLOBAL INC. AGREED AND ACCEPTED:
By:
----------------------------- ------------------------------
Title:
-------------------------- ------------------------------
Print Name
Date: Date:
--------------------------- -------------------------
EXHIBIT 10.82
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement (the "Agreement") is dated as of the
19th day of March 1999 between J. Bradford James (the "Executive") and
IMC Global Inc., a Delaware corporation (the "Company").
WHEREAS, the Company desires to retain the Executive as its Senior Vice
President and Chief Financial Officer and the Executive desires to
continue in such position; and
WHEREAS, the Company and the Executive desire to provide appropriate
assurances for the Executive to continue to perform the Executive's
duties and responsibilities thereby promoting the stability of the
Company.
NOW, THEREFORE, in consideration of the agreements and covenants
contained herein, the sufficiency of which is acknowledged, the
Executive and the Company hereby agree as follows:
1. Definitions. Each term defined herein shall be given its defined
meaning wherever used in this Agreement unless the context requires
otherwise.
(a) "Base Salary" means the Executive's annualized
base salary as adjusted from time to time.
(b) "Cause" means the Executive (i) grossly
neglects his duties, (ii) engages in misconduct;
(iii) breaches a material provision of this
Agreement, including, but not limited to,
Section 4; (iv) willfully fails to cooperate
fully with the Company in effecting a smooth
transition of the Executive's duties and
responsibilities to such person(s) as may be
designated by the Company. "Gross neglect" means
the willful failure to perform the essential
functions of the Executive's job or the willful
failure to carry out the Company's reasonable
directions with respect to material duties after
the Executive is notified in writing by the
Company that the Executive is failing to perform
these essential functions or failing to carry out
the reasonable directions of the Company. Such
<PAGE>
notice shall specify the functions or directions
that the Executive is failing to perform and what
steps need to be taken to cure and shall set
forth the reasonable time frame, which shall be
at a minimum 45 days, within which to cure.
"Misconduct" means embezzlement or misappropriation
of corporate funds, or other acts of fraud,
dishonesty, or self-dealing; provided, however,
that the Executive shall be given notice and an
opportunity within the next 45 days to explain
his position and actions to the Company, which
shall then make a final decision; any significant
violation of any statutory or common law duty of
loyalty to the Company; conviction for a felony;
or any significant violation of Company policy or
any inappropriate workplace conduct that
seriously disrupts or interferes with Company
operations; provided, however, that if the policy
violation or inappropriate conduct can be cured,
then the Executive shall be given written notice
of the policy violation or inappropriate conduct
and a reasonable opportunity to cure, which shall
be at a minimum 45 days.
(c) "Company" means IMC Global Inc. and its subsidiaries,
as they may exist from time to time.
(d) "Effective Date" means the date first set forth
above.
(e) "Good Reason" for termination of employment by
the Executive shall mean any of the following
reasons explained below in paragraphs 1, 2 and 3.
In each case, to constitute a termination for
Good Reason entitling the Executive to Severance
Benefits as described in Section 3 of this
Agreement, the following must occur:
(i) Within 90 days after the Executive has or
reasonably should have knowledge that Good
Reason exists, the Executive must give the
Company written notice specifying the
grounds for his belief that Good Reason
exists;
<PAGE>
(ii) The Company shall then have a reasonable
opportunity, which shall be at least 45
days, to cure; and
(iii) If the Company cures the Good Reason
within the cure period, then the Executive
shall have no right to terminate
employment for Good Reason. If the
Company does not cure the Good Reason
within the cure period, then within 14
days of the completion of the cure period,
the Executive may give written notice of
his intent to terminate his employment for
Good Reason. The effective date of such
termination for Good Reason shall be two
calendar months after the date of the
notice to terminate. At its sole
discretion, the Company shall have the
right to accelerate the termination date
by paying the Executive his base pay for
the balance of the two month notice
period.
1. the continued failure by the Company,
after notice and a reasonable opportunity
to cure, to (i) maintain for the initial
term of this Agreement the Executive's
Base Salary at a rate equal to or higher
than the rate in effect on the Effective
Date and for any subsequent term of the
Agreement maintain the Executive's Base
Salary at a rate equal to or higher than
the rate in effect on the Effective Date;
provided, however, that during any such
subsequent term, Good Reason shall not
exist as the result of any decrease in
Base Salary if such decrease is incident
to a general reduction applied to
corporate officers at a similar level as
the Executive on a proportionate and
nondiscriminatory basis; (ii) provide for
continued participation on a comparable
basis by the Executive in an annual bonus
plan maintained by the Company in which
<PAGE>
corporate officers at a similar level as
the Executive participate; (iii) provide
for participation in stock option and
other equity incentive plans or programs
maintained by the Company from time to
time in which corporate officers at a
similar level as the Executive
participate; (iv) provide for
participation in all Company sponsored
group or executive medical, dental, life,
disability, retirement, profit-sharing,
thrift, non-qualified, deferred
compensation, and other plans maintained
by the Company to the same extent as
corporate officers at a similar level as
the Executive participate; (v) provide
vacation, and perquisites substantially
equivalent to those provided by the
Company to corporate officers at a similar
level as the Executive; or (vi) obtain the
express unconditional assumption of this
Agreement as required by Section 8, it
being understood that nothing contained in
this clause alters the Company's
obligations under Section 8 of this
Agreement; or
2. a significant adverse change, without the
Executive's written consent that continues
after notice and a reasonable opportunity
to cure, in working conditions or status,
including but not limited to a significant
adverse change in the nature or scope of
the Executive's authority, powers,
functions, duties or responsibilities;
provided, however, a change in the
Company's status such that it no longer
has any equity securities registered under
Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended, or that
it becomes a subsidiary of another entity
which directly results in changes in the
nature or scope of the Executive's
authority, powers, functions, duties or
<PAGE>
responsibilities shall not in and of
itself constitute Good Reason hereunder;
or
3. a change, without the Executive's consent,
in the Executive's primary employment
location to a location that is more than
50 miles from the primary location of the
Executive's employment as in effect
immediately prior to the Effective Date.
f. " Severance Event" shall be deemed to have
occurred if, and only if, during the Term
of this Agreement, which includes the
initial term and any extensions or
renewals as provided in Section 2, (i) the
Executive's employment is terminated by
the Company other than for Cause or upon
the Executive's death or inability to
perform the essential functions of his
position with or without reasonable
accommodation or (ii) the Executive
terminates his employment for Good Reason.
If, however, the Executive's employment is
terminated whether by the Executive with
or without Good Reason or by the Company
with or without Cause in connection with a
"change in control" of the Company, as
such phrase is defined in Section 5 of
this Agreement, such termination shall not
constitute a Severance Event; provided,
however, the Executive's employment shall
not be considered to have terminated in
connection with a change in control of the
Company as so defined unless such change
in control has occurred in such manner and
such time as to have made Section 5 of
this Agreement effective prior to the
Executive's termination.
2. Term. The term of this Agreement shall commence on the
Effective Date and shall terminate on the second anniversary of the
Effective Date; provided, however, that unless the Company gives
<PAGE>
written notice of its intent to terminate the Agreement at least one
calendar month prior to the second anniversary of the Effective Date,
this Agreement shall renew automatically for an additional one year
term and shall continue to renew automatically for additional one year
terms unless written notice of the Company's intent to terminate the
Agreement is given to the Executive at least one calendar month prior
to the expiration of the then current term.
3. Severance Benefits. Upon the occurrence of a Severance Event
and the execution of a general release (substantially in the form
attached hereto as Exhibit A) of all claims against the Company and
other related entities or persons without additional consideration,
and upon the expiration of any applicable revocation period, the
Executive shall be entitled to receive the following "Severance
Benefits":
(a) An amount equal to the target award for the
Executive under the Company's Management
Incentive Compensation Program ("MICP"), or
successor annual bonus plan in effect from time
to time, for the fiscal year in which the
Severance Event Occurs reduced pro rata for that
portion of the fiscal year not completed as of
the end of the month in which the Severance Event
occurs;
(b) An amount equal to the target award for the
Executive under the Company's 1996 Long-Term
Incentive Plan, or successor long-term incentive
plan in effect from time to time, for the fiscal
year in which the Severance Event occurs reduced
pro rata for that portion of the fiscal year not
completed as of the end of the month in which the
Severance Event occurs;
(c) An amount equal to two times the Executive's then
current Base Salary, payable in accordance with
regular payroll procedures of the Company;
(d) An amount equal to two times the highest annual
bonus earned under the Company's Management
Incentive Compensation Program, or successor
annual bonus plan in effect from time to time,
during the three consecutive complete bonus years
<PAGE>
immediately preceding the date on which the
Severance Event occurs; provided, however, that
in the event that the Executive's employment is
terminated prior to the completion of three
complete bonus years, any prorated annual bonus
received by the Executive shall be annualized and
the bonus years in which the Executive's
employment commences or terminates shall be
deemed to be "complete bonus years" for purposes
of determining the highest annual bonus earned by
the Executive during the three complete bonus
years immediately preceding the date on which the
Severance Event occurs;
(e) If the Executive timely and appropriately
exercises his right to continue his coverage
under the Company's medical and dental plans as
provided under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"),
then the Company will pay the employer portion
(and the Executive will pay the employee portion)
of such premiums for the Executive until the
earlier of: (i) the expiration of the two year
period following the date of the Severance Event
and (ii) the date on which the Executive is no
longer eligible to continue such coverage under
clause 4980B(f)(2)(B)(ii), (iii), (iv) or (v) of
COBRA. Except as provided in this paragraph, the
Executive's continued participation and coverage
under the group health insurance plans shall be
governed by COBRA; and
(f) The Company shall continue the Executive's
coverage under its life and disability insurance
policies until the earlier of (i) the expiration
of the two year period following the date of
termination and (ii) the date on which the
Executive becomes eligible to participate in and
receive similar benefits under a plan or
arrangement sponsored by another employer or
under any Company sponsored retirement plan.
Participation shall be on the same terms and
conditions as are applicable to active employees.
<PAGE>
Severance Benefits shall be subject to all applicable federal, state
and local deductions and withholdings. Those Severance Benefits
described in paragraphs (a) and (b) shall be paid in a lump sum within
30 days of the Severance Event. At the option of the Company, the
present value of the Severance Benefits, described in paragraphs 3 (c)
and (d) above may be paid in a lump sum at any point during the
Severance Benefits period. The Company's obligation to continue
Severance Benefits shall cease immediately if the Company has or would
have had grounds to terminate the Executive's employment immediately
for Cause. In the event the Executive dies or becomes disabled before
all Severance Benefits are paid to him, the remaining amounts due to
him under Sections 3(c) and 3(d) shall be reduced by the proceeds the
Executive's estate receives under any life insurance policy with
respect to which the premiums are paid by the Company or any benefits
the Executive receives under any Company disability policy; but subject
to such reductions, those remaining amounts, if any, shall be paid to
the Executive or his estate. If any family member of the Executive is
receiving medical and/or dental coverage under Section 3(e) at the time
of the Executive's death or disability and such family member
constitutes a "qualified beneficiary" under COBRA, such medical and/or
dental coverage shall continue in accordance with the requirements of
COBRA, provided that such family member pays the full cost of the
premium for such coverage. The Executive understands and acknowledges
that the Severance Benefits constitute his sole benefits upon
termination.
4. Exclusivity of Services and Confidential/ Proprietary
Information.
(a) Executive acknowledges that during his employment
with the Company he has developed, acquired, and
had access to and will develop, acquire and have
access to trade secrets or other proprietary or
confidential information belonging to the Company
and that such information gives the Company a
substantial business advantage over others who do
not have such information. Accordingly, the
Executive agrees to the following obligations
that he acknowledges to be reasonably designed to
protect the Company's legitimate business
interests without unnecessarily or unreasonably
restricting his post-employment opportunities:
<PAGE>
(i) during employment with the Company and
for a period of two years following the
Executive's termination of employment,
regardless of the reason for the
termination or by whom initiated, he will
not engage or assist others in engaging
in competition with the Company, directly
or indirectly, whether as an employer,
proprietor, partner, stockholder (other
than the holder of less than 5% of the
stock of a corporation the securities of
which are traded on a national securities
exchange or in the over-the-counter
market), director, officer, employee,
consultant, agent, or otherwise, in the
business of producing and distributing
potash, phosphate, animal feed
ingredients or salt or any other
significant business in which the Company
is engaged or is preparing to engage in
at the time of termination;
(ii) during employment with the Company and
for a period of two years following the
Executive's termination of employment,
regardless of the reason for the
termination or by whom initiated, he will
not solicit, in competition with the
Company, directly or indirectly, any
person who is a client, customer or
prospect (as such terms are defined
below) (including, without limitation,
purchasers of the Company's products) for
the purpose of performing services and/or
providing goods and services of the kind
performed and/or provided by the Company
in the business of producing and
distributing potash, phosphate, animal
feed ingredients or salt or any other
significant business in which the Company
is engaged or is preparing to engage in
at the time of termination;
<PAGE>
(iii) during employment with the Company and
for a period of two years following the
Executive's termination of employment,
regardless of the reason for the
termination or by whom initiated, he will
not induce or persuade or attempt to
induce or persuade any employee or agent
of the Company to terminate his or her
employment, agency, or other relationship
with the Company in order to enter into
any employment agency or other
relationship in competition with the
Company;
(iv) the covenants contained in this Section
4(a) shall apply within any jurisdiction
of North America, it being understood that
the geographic scope of the business and
strategic plans of the Company extend
throughout North America and are not
limited to any particular region thereof
and that such business may be engaged in
effectively from any location in such
area; and
(v) as used herein, the terms "client,"
"customer" and "prospect" shall be defined
as any client, customer or prospect of any
business in which the Company is or has
been substantially engaged within the one
year period prior to the Executive's
termination of employment (a) to which or
to whom the Executive submitted or
assisted in the submission of a
presentation or proposal of any kind on
behalf of the Company; (b) with which or
with whom the Executive had substantial
contact relating to the business of the
Company; or (c) about which or about whom
the Executive acquired substantial
confidential or other information as a
result of or in connection with the
<PAGE>
Executive's employment, at any time during
the one year period preceding the
Executive's termination of employment for
any reason.
Notwithstanding the foregoing, if the Company consents in writing, it
shall not be a violation of this Section 4(a) for the Executive to
engage in conduct otherwise prohibited by this Section.
(b) The Executive agrees that he will not at any time
during employment or thereafter for the longest
time permitted by applicable law, use, disclose,
or take any action which may result in the use or
disclosure of any trade secrets or other
proprietary or confidential information of the
Company, except to the extent that the Company
may specifically authorize in writing. This
obligation shall not apply when and to the extent
that any trade secret, proprietary or
confidential information of the Company becomes
publicly available other than due to the
Executive's act or omission. In connection with
this Section 4, the Executive has executed and
shall abide by the terms of the separate
agreement attached hereto as Exhibit B.
(c) The Executive agrees that upon termination of his
employment he will immediately surrender and
return to the Company all records and other
documents obtained by him, entrusted to him, or
otherwise in his possession or control during the
course of his employment by the Company, together
with all copies thereof; provided, however, that
subject to Company review and authorization, the
Executive may retain copies of such documents as
necessary for the Executive's personal records
for federal income tax purposes.
<PAGE>
(d) The Executive acknowledges that the provisions
contained in this Section 4 are reasonable and
necessary because of the substantial harm that
would be caused to the Company by the Executive
engaging in any of the activities prohibited or
restricted herein. Nevertheless, it is the
intent and understanding of each party hereto
that if, in any action before any court, agency
or other tribunal legally empowered to enforce
the covenants contained in this Section 4, any
term, restriction, covenant or promise contained
therein is found to be unenforceable due to
unreasonableness or due to any other reason, then
such term, restriction, covenant or promise shall
be deemed modified to the extent necessary to
make it enforceable by such court or agency.
(e) The Executive acknowledges that his breach of
this Section 4 will result in immediate and
irreparable harm to the Company's business
interests, for which damages cannot be calculated
easily and for which damages are an inadequate
full remedy. Accordingly, and without limiting
the right of the Company to pursue all other
legal or equitable remedies available for the
violation by the Executive of the covenants
contained in this Section 4, it is expressly
agreed that remedies other than injunctive relief
cannot fully compensate the Company for the
irreparable injury that the Company could suffer
due to any such violation, threatened violation
or continuing violation and that the Company
shall be entitled to injunctive relief, without
the necessity of proving actual monetary loss, to
prevent any such violation, threatened violation
or continuing violation thereof.
5. Change in Control.
(a) Effective Date. For purposes of this Section 5,
the term "Effective Date" shall mean the date on
which a Change in Control of the Company (as
defined in Section 5(i)) occurs. This Section 5
<PAGE>
shall not become effective, and the Company shall
have no obligation hereunder, if the employment
of the Executive with the Company shall terminate
prior to a Change in Control of the Company. If
there is a Change in Control and this Section
becomes effective, then this Section shall govern
the terms and conditions of the Executive's
employment and termination thereof and the
provisions of Sections 1, 2, 3, and 4 of this
Agreement shall no longer be effective.
(b) Right to Change in Control Severance Benefits.
The Executive shall be entitled to receive from
the Company Change in Control Severance Benefits
as described in Section 5(g) herein, if during
the term of this Agreement there has been a
Change in Control of the Company and there is a
Termination (as defined in Section 5(f)) prior to
the expiration of the Employment Term (as defined
in Section 5(c)).
(c) Employment Term. For purposes of this Section 5,
the term "Employment Term" shall mean the period
commencing on the Effective Date of this Section
5 and ending on the earlier to occur of (1) the
last day of the month in which occurs the third
anniversary of the Effective Date of this Section
5 or (2) the last day of the month in which the
Executive attains mandatory retirement age
pursuant to the terms of a mandatory retirement
plan of the Company as such were in effect and
applicable to the Executive immediately prior to
the Effective Date of this Section 5.
(d) Employment. The Company hereby agrees to
continue the Executive in its employ, and the
Executive hereby agrees to remain in the employ
of the Company, until the expiration of the
Employment Term. During the Employment Term, the
Executive shall exercise such position and
authority and perform such responsibilities as
are commensurate with the position and authority
being exercised and duties being performed by the
Executive immediately prior to the Effective Date
<PAGE>
of this Section 5, which services shall be
performed at the location where the Executive was
employed immediately prior to the Effective Date
of this Section 5 or at such other location as
the Company may reasonably require; provided,
that the Executive shall not be required to
accept another location that he deems
unreasonable in the light of his personal
circumstances.
(e) Compensation and Benefits. During the Employment
Term, the Executive shall receive the following
compensation and benefits:
1. He shall receive an annual base salary which
is not less than his Base Salary immediately
prior to the Effective Date of this Section
5, with the opportunity for increases, from
time to time thereafter, which are in
accordance with the Company's regular
executive compensation practices.
2. He shall be eligible to participate on a
reasonable basis, and to continue his
existing participation, in annual incentive,
stock option, restricted stock, long-term
incentive performance and any other
compensation plan which provides
opportunities to receive compensation in
addition to his Base Salary which is the
greater of (i) the opportunities provided by
the Company for executives with comparable
duties or (ii) the opportunities under any
such plans in which he was participating
immediately prior to the Effective Date of
this Section 5.
3. He shall be entitled to receive and
participate in salaried employee benefits
(including, but not limited to, medical, life
and accident insurance, investment, stock
ownership and disability benefits) and
perquisites which are the greater of (i) the
<PAGE>
employee benefits and perquisites provided by
the Company to executives with comparable
duties or (ii) the employee benefits and
perquisites to which he was entitled or in
which he participated immediately prior to
the Effective Date of this Section 5.
4. He shall be entitled to continue to accrue
credited service for retirement benefits and
to be entitled to receive retirement benefits
under and pursuant to the terms of the
Company's qualified retirement plan for
salaried employees, the Company's
supplemental executive retirement plan, and
any successor or other retirement plan or
agreement in effect on the Effective Date of
this Section 5 in respect of his retirement,
whether or not a qualified plan or agreement,
so that his aggregate monthly retirement
benefit from all such plans and agreements
(regardless when he begins to receive such
benefit) will be not less than it would be
had all such plans and agreements in effect
immediately prior to the Effective Date of
this Section 5 continued to be in effect
without change until and after he begins to
receive such benefit.
(f) Termination. The term "Termination" shall mean
termination, prior to the expiration of the
Employment Term, of the employment of the
Executive with the Company for any reason other
than death, disability (as described below),
cause (as described below), or voluntary
resignation (as described below).
1. The term "disability" means physical or mental
incapacity qualifying the Executive for long-
term disability under the Company's long-term
disability plan.
<PAGE>
2. The term "cause" means (i) the willful and
continued failure of the Executive
substantially to perform his duties with the
Company (other than any failure due to
physical or mental incapacity) after a demand
for substantial performance is delivered to
him by the Board of Directors which
specifically identifies the manner in which
the Board believes he has not substantially
performed his duties or (ii) willful
misconduct materially and demonstrably
injurious to the Company. No act or failure
to act by the Executive shall be considered
"willful" unless done or omitted to be done
by him not in good faith and without
reasonable belief that his action or omission
was in the best interest of the Company. The
unwillingness of the Executive to accept any
or all of a change in the nature or scope of
his position, authorities or duties, a
reduction in his total compensation or
benefits, a relocation that he deems
unreasonable in light of his personal
circumstances, or other action by or request
of the Company in respect of his position,
authority or responsibility that he
reasonably deems to be contrary to this
Agreement, may not be considered by the Board
of Directors to be a failure to perform or
misconduct by the Executive. Notwithstanding
the foregoing, the Executive shall not be
deemed to have been terminated for cause for
purposes of this Section 5 unless and until
there shall have been delivered to him a copy
of a resolution, duly adopted by a vote of
three-quarters of the entire Board of
Directors of the Company at a meeting of the
Board called and held (after reasonable
notice to the Executive and an opportunity
for the Executive and his counsel to be heard
before the Board) for the purpose of
considering whether the Executive has been
guilty of such a willful failure to perform
<PAGE>
or such willful misconduct as justifies
termination for cause hereunder, finding that
in the good faith opinion of the Board the
Executive has been guilty thereof and
specifying the particulars thereof.
3. The resignation of the Executive shall be
deemed "voluntary" if it is for any reason
other than one or more of the following:
(a) The Executive's resignation or retirement
(other than mandatory retirement, as
aforesaid) is requested by the Company
other than for cause;
(b) Any significant change in the nature or
scope of the Executive's position,
authorities or duties from those
described in Section 5(d) of this
Agreement;
(c) Any reduction in his total compensation
or benefits from that provided in Section
5(e);
(d) The breach by the Company of any other
provision of this Section 5; or
(e) The reasonable determination by the
Executive that, as a result of a Change
in Control of the Company and a change in
circumstances in his position, he is
unable to exercise the authorities and
responsibility attached to his position
and contemplated by Section 5(d) of this
Agreement.
4. Termination that entitles the Executive to
the payments and benefits provided in Section
5(g) shall not be deemed or treated by the
Company as the termination of the Executive's
employment or the forfeiture of his
participation, award or eligibility for the
purpose of any plan, practice or agreement of
the Company referred to in Section 5(e).
<PAGE>
(g) Change in Control Severance Payments. In the
event of and within 30 days following
Termination, the Company shall pay to the
Executive the following benefits (collectively,
"Change in Control Severance Payments"):
1. His Base Salary and all other benefits due
him as if he had remained an employee
pursuant to this Section 5 through the
remainder of the month in which Termination
occurs, less applicable withholding taxes and
other authorized payroll deductions;
2. An amount equal to the target award for the
Executive under the Company's annual bonus
plan for the fiscal year in which Termination
occurs, reduced pro rata for that portion of
the fiscal year not completed as of the end
of the month in which Termination occurs;
provided, however, that if the Executive has
deferred his award for such year under the
plan, the payment due the Executive under
this Paragraph (2) shall be paid in
accordance with the terms of the deferral;
3. An amount equal to the target award for the
Executive under the Company's long-term
incentive plan for the fiscal year in which
Termination occurs, reduced pro rata for that
portion of the fiscal year not completed as
of the end of the month in which Termination
occurs;
4. A lump sum severance allowance in an amount
which is equal to the sum of the amounts
determined in accordance with the following
subparagraphs (a) and (b):
(a) an amount equal to three times the
Executive's Base Salary at the rate in
effect immediately prior to Termination;
and
<PAGE>
(b) an amount equal to three times the
highest annual bonus earned under the
Company's Management Incentive
Compensation Program, or successor annual
bonus plan in effect from time to time,
during the three consecutive complete
bonus years immediately prior to
Termination; provided, however, that in
the event that the Executive's employment
is terminated prior to the completion of
three complete bonus years, any prorated
annual bonus received by the Executive
shall be annualized and the bonus years
in which the Executive's employment
commences or terminates shall be deemed
to be "complete bonus years" for purposes
of determining the highest annual bonus
earned by the Executive during the three
complete bonus years immediately prior to
Termination.
(h) Non-Competition and Confidentiality. The
Executive agrees that:
1. There shall be no obligation on the part of
the Company to provide any further Change in
Control Severance Benefits (other than
payments or benefits already earned or
accrued) described in Section 5(g) if, when
and so long as the Executive shall be
employed by or otherwise engage in any
business which is competitive with any
business of the Company or of any of its
subsidiaries, as such business existed as of
the Effective Date of this Section 5, in
which the Executive was engaged during his
employment, and if such employment or
activity is likely to cause serious damage to
the Company or any of its subsidiaries; and
<PAGE>
2. during and after the Employment Term, he will
not divulge or appropriate to his own use or
the use of others any secret or confidential
information pertaining to the businesses of
the Company or any of its subsidiaries
obtained during his employment by the
Company, it being understood that this
obligation shall not apply when and to the
extent any of such information becomes
publicly known or available other than
because of his act or omission.
(i) Definition of "Change in Control". "Change in
Control" of the Company means, and shall be
deemed to have occurred upon, the first to occur
of any of the following events:
1. the acquisition by any individual, entity or
group (a "Person"), including any "person"
within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), of
beneficial ownership within the meaning of
Rule 13d-3 promulgated under the Exchange
Act, of 15% or more of either (i) the then
outstanding shares of common stock of the
Company (the "Outstanding Common Stock") or
(ii) the combined voting power of the then
outstanding securities of the Company
entitled to vote generally in the election of
directors (the "Outstanding Voting
Securities"); excluding, however, the
following: (A) any acquisition directly from
the Company (excluding any acquisition
resulting from the exercise of an exercise,
conversion or exchange privilege unless the
security being so exercised, converted or
exchanged was acquired directly from the
Company), (B) any acquisition by the Company,
(c) any acquisition by an employee benefit
plan (or related trust) sponsored or
maintained by the Company or any corporation
controlled by the Company or (D) any
<PAGE>
acquisition by any corporation pursuant to a
transaction which complies with clauses (i),
(ii) and (iii) of subsection (3) of this
Section 5(i);
2. Individuals who, as of the effective date of
this Section 5, constitute the Board of
Directors (the "Incumbent Board") cease for
any reason to constitute at least a majority
of such Board; provided, that any individual
who becomes a director of the Company
subsequent to the effective date of this
Section 5, whose election, or nomination for
election by the Company's stockholders, was
approved by the vote of at least a majority
of the directors then comprising the
Incumbent Board shall be deemed a member of
the Incumbent Board; and provided further,
that any individual who was initially elected
as a director of the Company as a result of
an actual or threatened election contest, as
such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange
Act, or any other actual or threatened
solicitation of proxies or consents by or on
behalf of any Person other than the Board
shall not be deemed a member of the Incumbent
Board;
3. approval by the stockholders of the Company
of a reorganization, merger or consolidation
of the Company or sale or other disposition
of all or substantially all of the assets of
the Company (a "Corporate Transaction");
excluding, however, a Corporate Transaction
pursuant to which (i) all or substantially
all of the individuals or entities who are
the beneficial owners, respectively, of the
Outstanding Common Stock and the Outstanding
Voting Securities immediately prior to such
Corporate Transaction will beneficially own,
directly or indirectly, more than 60% of,
respectively, the outstanding shares of
common stock, and the combined voting power
of the outstanding securities of such
<PAGE>
corporation entitled to vote generally in the
election of directors, as the case may be, of
the corporation resulting from such Corporate
Transaction (including, without limitation, a
corporation which as a result of such
transaction owns the Company or all or
substantially all of the Company's assets
either directly or indirectly) in
substantially the same proportions relative
to each other as their ownership, immediately
prior to such Corporate Transaction, of the
Outstanding Common Stock and the Outstanding
Voting Securities, as the case may be, (ii)
no Person (other than: the Company; any
employee benefit plan (or related trust)
sponsored or maintained by the Company or any
corporation controlled by the Company; the
corporation resulting from such Corporate
Transaction; and any Person which
beneficially owned, immediately prior to such
Corporate Transaction, directly or
indirectly, 25% or more of the Outstanding
Common Stock or the Outstanding Voting
Securities, as the case may be) will
beneficially own, directly or indirectly, 25%
or more of, respectively, the outstanding
shares of common stock of the corporation
resulting from such Corporate Transaction or
the combined voting power of the outstanding
securities of such corporation entitled to
vote generally in the election of directors
and (iii) individuals who were members of the
Incumbent Board will constitute at least a
majority of the members of the board of
directors of the corporation resulting from
such Corporate Transaction; or
4. the consummation of a plan of complete
liquidation or dissolution of the Company.
<PAGE>
(j) Excise Tax Payments. If any of the payments to
be made under Section 5 or any payments which are
construed as being made under Section 5, will be
subject to the tax (the "Excise Tax") imposed by
Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") (or any similar
tax that may hereafter be imposed), the Company
shall pay to the Executive at the time specified
in Paragraph 1 below an additional amount (the
"Gross-up Payment") such that the net amount
retained by the Executive, after deduction of any
Excise Tax on the Total Payments (as hereinafter
defined) and any federal, state and local income
tax and Excise Tax upon the Gross-up Payment
provided for by this paragraph, but before
deduction for any federal, state or local income
tax on the Change in Control Severance Payments,
shall be equal to the Total Payments.
1. For purposes of determining whether any of
the Change in Control Severance Payments will
be subject to the Excise Tax and the amount
of such Excise Tax, (i) any other payments or
benefits received or to be received by the
Executive in connection with a Change in
Control (as that term is defined in Section
5(i)) of the Company or the Executive's
termination of employment (whether pursuant
to the terms of this Agreement or any other
plan, arrangement or agreement with the
Company, any person whose actions result in a
Change of Control of the Company or any
person affiliated with the Company or such
person) (which, together with the Change in
Control Severance Payments, shall constitute
the "Total Payments") shall be treated as
<PAGE>
"parachute payments" within the meaning of
Section 280G(b)(2) of the Code, and all
"excess parachute payments" within the
meaning of Section 280G(b)(1) of the Code
shall be treated as subject to the Excise
Tax, unless in the opinion of tax counsel
selected by the Company's independent
auditors such other payments or benefits (in
whole or in part) do not constitute parachute
payments, or such excess parachute payments
(in whole or in part) represent reasonable
compensation for services actually rendered
within the meaning of Section 280G(b)(4) of
the Code in excess of the base amount within
the meaning of Section 280G(b)(3) of the Code
or are otherwise not subject to the Excise
Tax, (ii) the amount of the Total Payments
which shall be treated as subject to the
Excise Tax shall be equal to the lesser of
(A) the total amount of the Total Payments or
(B) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) of
the Code (after applying clause (i) above),
and (iii) the value of any non-cash benefits
or any deferred payment or benefit shall be
determined by the Company's independent
auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.
2. For purposes of determining the amount of the
Gross-up Payment, the Executive shall be
deemed to pay federal income taxes at the
highest marginal rate of federal income
taxation for the calendar year in which the
Gross-up Payment is to be made and the
applicable state and local income taxes at the
highest marginal rate of taxation for the
calendar year in which the Gross-up Payment is
to be made, net of the maximum reduction in
federal income taxes which could be obtained
from deduction of such state and local taxes.
In the event that the Excise Tax is
subsequently determined to be less than the
amount taken into account hereunder at the
time the Gross-up Payment is made, the
Executive shall repay to the Company at the
<PAGE>
time that the amount of such reduction in
Excise Tax is finally determined the portion
of the Gross-up Payment attributable to such
reduction (plus the portion of the Gross-up
Payment attributable to the Excise Tax and
federal and state and local income tax imposed
on the portion of the Gross-up Payment being
repaid by the Executive if such repayment
results in a reduction in Excise Tax and/or a
federal and state and local income tax
deduction), plus interest on the amount of
such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. In the event that
the Excise Tax is determined to exceed the
amount taken into account hereunder at the
time the Gross-up Payment is made (including
by reason of any payment, the existence or
amount of which cannot be determined at the
time of the Gross-up Payment), the Company
shall make an additional Gross-up Payment in
respect of such excess (plus any interest
payable with respect of such excess) at the
time that the amount of such excess is finally
determined.
3. The Gross-up Payment or portion thereof
provided for in Paragraphs 1 and 2 above shall
be paid not later than the thirtieth day
following payment of any amounts under this
Section 5; provided, however, that if the
amount of such Gross-up Payment or portion
thereof cannot be finally determined on or
before such day, the Company shall pay to the
Executive on such day an estimate, as
determined in good faith by the Company, of
the minimum amount of such payments and shall
pay the remainder of such payments (together
with interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the
amount thereof can be determined, but in no
event later than the forty-fifth day after
payment of any amounts under this Section 5.
<PAGE>
4. In the event that the amount of the estimated
payments exceeds the amount subsequently
determined to have been due, such excess shall
constitute a loan by the Company to the
Executive, payable on the fifth day after
demand by the Company (together with interest
at the rate provided in Section 1274(b)(2)(B)
of the Code).
5. All Gross-up Payments will be paid to the
Executive from the Trust established under the
Trust Agreement between IMC Global Inc. and
Wachovia Bank Trust Company, N.A., which has
been established to protect payment
obligations of the Company under this
Agreement. Any repayment due the Company from
the Executive as a result of the circumstances
described in the last sentence of the
preceding paragraph shall be made by the
Executive after the Executive has received
such excess amounts from the Trust.
6. If there are any changes in the Code which
otherwise would or might affect the workings
of this Section 5(j), then Section 5(j) shall
be deemed to be revised in such a way as to
provide to the Executive the maximum benefits
he would be entitled to receive under the
current language of Section 5(j) and the Code.
(k) Enforcement Costs. The Company is aware that
upon the occurrence of a Change in Control, the
Board of Directors or a stockholder of the
Company may then cause or attempt to cause the
Company to refuse to comply with its obligations
under this Section 5, or may cause or attempt to
cause the Company to institute, or may institute,
litigation seeking to have this Section 5
declared unenforceable, or may take, or attempt
to take, other action to deny the Executive the
benefits intended under this Section 5. In these
circumstances, the purpose of this Section 5
could be frustrated. It is the intent of the
parties that the Executive not be required to
incur the legal fees and expenses associated with
the protection or enforcement of his rights under
<PAGE>
this Section 5 by litigation or other legal
action because such costs would substantially
detract from the benefits intended to be extended
to the Executive hereunder, nor be bound to
negotiate any settlement of his rights hereunder
under threat of incurring such costs.
Accordingly, if at any time after the Effective
Date of this Section 5, it should appear to the
Executive that the Company is or has acted
contrary to or is failing or has failed to comply
with any of its obligations under this Section 5
for the reason that it regards this Section 5 to
be void or unenforceable or for any other reason,
or that the Company has purported to terminate
his employment for cause or is in the course of
doing so in either case contrary to this Section
5, or in the event that the Company or any other
person takes any action to declare this Section 5
void or unenforceable, or institutes any
litigation or other legal action designed to
deny, diminish or to recover from the Executive
the benefits provided or intended to be provided
to him hereunder, and the Executive has acted in
good faith to perform his obligations under this
Section 5, the Company irrevocably authorizes the
Executive from time to time to retain counsel of
his choice at the expense of the Company to
represent him in connection with the protection
and enforcement of his rights hereunder,
including without limitation representation in
connection with termination of his employment
contrary to this Section 5 or with the initiation
or defense of any litigation or other legal
action, whether by or against the Executive or
the Company or any director, officer, stockholder
or other person affiliated with the Company, in
any jurisdiction. The reasonable fees and
expenses of counsel selected from time to time by
the Executive as hereinabove provided shall be
paid or reimbursed to the Executive by the
Company on a regular, periodic basis upon
presentation by the Executive of a statement or
statements prepared by such counsel in accordance
with its customary practices, up to a maximum
aggregate amount of $200,000. Counsel so
retained by the Executive may be counsel
<PAGE>
representing other officers or key executives of
the Company in connection with the protection and
enforcement of their rights under similar
agreements between them and the Company, and,
unless in his sole judgment use of common counsel
could be prejudicial to him or would not be
likely to reduce the fees and expenses chargeable
hereunder to the Company, the Executive agrees to
use his best efforts to agree with such other
officers or executives to retain common counsel.
(l) Successors and Assigns. Except as otherwise
provided herein, this Section 5 shall be binding
upon and inure to the benefit of the Executive
and his legal representatives, heirs, and
assigns; provided, however, that in the event of
the Executive's death prior to payment or
distribution of all amounts, distributions, and
benefits due him under this Section 5, each such
unpaid amount and distribution shall be paid in
accordance with this Section 5 to the person or
persons designated by the Executive to the
Company to receive such payment or distribution
and in the event the Executive has made no
applicable designation, to the person or persons
designated by the Executive as the beneficiary or
beneficiaries of proceeds of life insurance
payable in the event of the Executive's death
under the Company's group life insurance plan.
6. Dispute Resolution. The Executive and the Company shall not
initiate arbitration or other legal proceeding (except for any claim
under Section 4) against the other party or against any directors,
officers, employees, agents or representatives of the Company or its
affiliates, relating in any way to this Agreement, to the Executive's
retention by the Company, to the termination of this Agreement or of
such retention, or to any or all other claims for employment or other
discrimination under any federal, state or local law, regulation,
ordinance or executive order until 30 days after the party against whom
the claim(s) is made ("respondent") receives written notice from the
claiming party of the specific nature of any purported claim(s) and, to
the extent known or reasonably anticipated, the amount of any purported
damages attributable to each such claim(s). The Executive and the
Company further agree that if respondent submits the claiming party's
claim(s) to the CPR Institute for Dispute Resolution or JAMS/Endispute
for nonbinding mediation prior to the expiration of such 30 day period,
<PAGE>
the claiming party may not institute arbitration or other legal
proceedings against respondent until the earlier of: (a) the completion
of good-faith mediation efforts or (b) 90 days after the date on which
the respondent received written notice of the claimant's claim(s). The
mediation shall be conducted in Chicago, Illinois or such other
location to which the parties may agree. The Company agrees to pay the
cost of the mediator's services.
Subject to the foregoing, the Executive and the Company agree that any
and all claims or disputes relating to this Agreement, to the
termination of this Agreement or to such retention, to the Executive's
termination of employment or to his retention, that one party or that
the Executive may have against any directors, officers, employees,
agents, or representatives of the Company or its affiliates, including
without limitation, claims for employment or other discrimination under
any federal, state, or local law, regulation, ordinance, or executive
order, shall be submitted for arbitration and resolved by an arbitrator
selected in accordance with the rules and procedures of the CPR
Institute for Dispute Resolution or JAMS/Endispute, it being understood
and agreed that no more than one arbitrator shall be retained for any
arbitration conducted hereunder. The arbitration proceeding shall be
conducted in Chicago, Illinois or such other location to which the
parties may agree. If either party pursues a claim and such claim
results in an arbitrator's decision or award, both parties agree to
accept such decision or award as final and binding, and judgment upon
the decision or award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. The parties shall share the cost of
the arbitrator's services. Notwithstanding any of the foregoing
provisions of this Section, the Company may in its discretion
immediately pursue any and all available legal and equitable remedies
for the Executive's breach, threatened breach or continuing breach of
any provision of Section 4 in any court, agency, or other tribunal of
competent jurisdiction.
7. Entire Agreement, Amendment, Waiver. This Agreement
constitutes the entire agreement between the Company and the Executive
with respect to the subject matter hereof. This Agreement supersedes
any prior agreements made between the parties with respect to the
subject matter hereof. The parties may not amend this Agreement except
by written instrument signed by both parties. No waiver by either
party at any time of any breach by the other of any provision of this
Agreement shall be deemed a waiver of similar or dissimilar provision
at the same time or any prior or subsequent time.
<PAGE>
8. Assumption. This Agreement shall inure to benefit of, and be
binding upon, the successors and assignees of the Company. The Company
shall require any successor or assignee, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or substantially
all of the business or assets of the Company, expressly and
unconditionally to assume and agree to perform the Company's
obligations under this Agreement.
9. Notice. Any notice, request, or other communication required
or permitted to be given hereunder shall be made to the addresses
hereinafter set forth or to any other address designated by either of
the parties hereto by notice similarly given:
If to the Company: If to the Executive:
Senior Vice President, Human Resources J. Bradford James
IMC Global Inc. 55 W. Goethe St.,
2100 Sanders Road #1216
Northbrook, IL 60062 Chicago, IL 60610
All such notices, requests or other communications shall be sufficient
if made in writing either (i) by personal delivery to the party
entitled thereto, (ii) by registered or certified mail, return receipt
requested or (iii) by express courier service. The notice, request or
other communication shall be deemed effective upon personal delivery or
upon actual or constructive receipt by the party entitled thereto if by
registered or certified mail or express courier service; provided,
however, that a notice, request or other communication received after
regular business hours shall be deemed to be received on the next
succeeding business day of the Company.
10. Severability. The provisions of this Agreement shall be
regarded as durable, and if any provision or portion thereof is
declared invalid or unenforceable by a court of competent jurisdiction,
the validity and enforceability of the remainder and applicability
thereof shall not be affected.
11. Applicable Law. This Agreement shall at all times be
governed by and construed, interpreted and enforced in accordance with
the internal laws ( as opposed to the conflict of laws provisions) of
the State of Illinois.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officer and the Executive has signed this
Agreement as of the day and year first above written.
IMC GLOBAL INC. J. BRADFORD JAMES
By:
----------------------------- ---------------------------
Title: Chairman of the Board of
Directors and Chief Executive
Officer
<PAGE>
EXHIBIT A
WAIVER AND RELEASE OF CLAIMS
In exchange for the Severance Benefits described in the
attached Executive Severance Agreement (the "Agreement"), which I
acknowledge I would not otherwise be entitled to receive, I freely and
voluntarily agree to this WAIVER AND RELEASE OF CLAIMS ("WAIVER"):
1. My employment with IMC Global Inc. will terminate effective
.
- - ---------------------
2. I acknowledge that the Severance Benefits described in the
attached Agreement are the sole payments to which I am entitled and
that I am not entitled to any additional severance payments.
3. I, and anyone claiming through me, hereby waive and release any
and all claims that I may have ever had or that I may now have against
IMC Global Inc., its parents, divisions, partnerships, affiliates,
subsidiaries, and other related entities and their successors and
assigns, and past, present and future officers, directors, employees,
agents and attorneys of each of them in their individual or official
capacity (hereinafter collectively referred to as "Released Parties").
Among the claims that I am waiving are claims relating to my employment
or termination of employment, including, but not limited to, claims of
discrimination in employment brought under the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act of 1964, the
Americans With Disabilities Act or other federal, state or local
employment discrimination, employment, wage laws, ordinances or
regulations or any common law or statutory claims of wrongful discharge
or breach of contract or any other common law or statutory claims;
whether for damages, lost wages or for any other relief or remedy.
4. I understand and agree that this WAIVER will be binding on me
and my heirs, administrators and assigns. I acknowledge that I have
not assigned any claims or filed or initiated any legal proceedings
against any of the Released Parties.
5. Except as may be required by law, I agree that I will not
disclose the existence or terms of this WAIVER to anyone except my
accountant, attorney or spouse, each of whom shall also be bound by
this confidentiality provision.
<PAGE>
6. I understand that I have twenty-one (21) days to consider
whether to sign this WAIVER and return it to B. Russell Lockridge,
Senior Vice President, Human Resources of IMC Global Inc. IMC Global
Inc. hereby advises me of my right to consult with an attorney before
signing the WAIVER and I acknowledge that I have had an opportunity to
consult with an attorney and have either held such consultation or have
determined not to consult with an attorney.
7. I understand that I may revoke my acceptance of this WAIVER by
delivering notice of my revocation to B. Russell Lockridge within seven
(7) days of the day I sign the WAIVER. If I do not revoke my
acceptance of this WAIVER within seven days of the day I sign it, it
will be legally binding and enforceable.
IMC GLOBAL INC. AGREED AND
ACCEPTED:
By:
--------------------------- -----------------------------
Title:
------------------------ -----------------------------
Print Name
Date: Date:
------------------------- -----------------------------
EXHIBIT 12
<TABLE>
IMC Global Inc.
Computation of Ratio of Earnings to Fixed Charges
<CAPTION>
Years Ended December 31,
-----------------------------------------------
1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Fixed charges:
Interest charges $ 176.0 $ 40.2 $ 43.6 $ 57.8 $ 69.4
Rent expense 10.4 6.0 5.8 5.0 4.7
------- ------- ------- ------- -------
Total fixed charges $ 186.4 $ 46.2 $ 49.4 $ 62.8 $ 74.1
======= ======= ======= ======= =======
Earnings:
Net earnings (loss) $ (9.0) $ 62.9 $ 127.1 $ 215.5 $ 113.9
Extraordinary item (3.0) 24.9 8.1 3.5 4.4
(Earnings) loss from
discontinued
operations 69.1 (18.0) (13.5) (23.8) (24.4)
Cumulative effect of
accounting change - - - - 5.9
Provision for
income taxes 84.5 30.4 81.3 112.7 81.1
Minority interest 14.1 124.4 185.7 163.6 106.8
Interest charges 176.0 40.2 43.6 57.8 69.4
Rent expense 10.4 6.0 5.8 5.0 4.7
------- ------- ------- ------- -------
Total earnings $ 342.1 $ 270.8 $ 438.1 $ 534.3 $ 361.8
======= ======= ======= ======= =======
Ratio of earnings
to fixed charges 1.84 5.86 8.87 8.51 4.88
Adjusted ratio of
earnings to
fixed charges 3.19(a) 9.84(b) 10.59(c) 8.51 4.88
======= ======= ======= ======= =======
<PAGE>
(a) The adjusted ratio of earnings to fixed charges for the year
ended December 31, 1998 excludes charges of $195.1 million
resulting from the Company-wide profit improvement program, $44.1
million due to the estimated loss on disposal of Chemicals and
$14.0 million as a result of the loss on the sale of IMC Vigoro.
(b) The adjusted ratio of earnings to fixed charges for the year
ended December 31, 1997 excludes a charge of $183.7 million
related to the write down of the historical carrying value of
the Company's 25 percent interest in Main Pass.
(c) The adjusted ratio of earnings to fixed charges for the year
ended December 31, 1996 excludes a charge of $84.9 million
related to the merger of The Vigoro Corporation into a
wholly-owned subsidiary of the Company.
</TABLE>
EXHIBIT 13
FINANCIAL TABLE OF CONTENTS
- - ---------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
REPORT OF MANAGEMENT
REPORT OF INDEPENDENT AUDITORS
CONSOLIDATED STATEMENT OF OPERATIONS
CONSOLIDATED BALANCE SHEET
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
QUARTERLY RESULTS (UNAUDITED)
FIVE YEAR COMPARISON
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- - -----------------------------------------------------------------------
INTRODUCTION
Management's Discussion and Analysis of Financial Condition and Results
of Operations should be read in conjunction with the financial
statements and the accompanying notes.
Through the restructuring of operations, acquisitions and divestitures,
IMC Global Inc. (Company or IMC) has demonstrated its commitment to
maintaining its position as one of the world's leading producers of
crop nutrients and salt products, as well as maintaining its position
as one of the largest producers and sellers of animal feed ingredients.
Sales for 1998 increased 27 percent while earnings from continuing
operations, before non-recurring charges, increased 26 percent over the
prior year and generated $825.6 million of EBITDA(a), a 78 percent
increase over 1997. These cash earnings will allow the Company to make
the investments necessary to continue to strengthen its prominent
position in the highly competitive crop nutrient, salt and animal feed
marketplaces. Management places significant emphasis on EBITDA as one
of the key standards for measuring consolidated performance. Although
EBITDA is a leading indicator used by management, it is not a
replacement of measurement standards defined by and required by
generally accepted accounting principles, such as operating earnings
and cash flow from operating activities.
The Company's current operational structure consists of six business
units corresponding to its major product lines as follows: IMC-Agrico
Phosphates (phosphates), IMC Kalium (potash), IMC Salt (salt), IMC-
Agrico Feed Ingredients (animal feed), IMC AgriBusiness (wholesale and
retail distribution), and IMC Chemicals (soda ash and other inorganic
chemicals). As a result of the pending divestitures of IMC AgriBusiness
(AgriBusiness) and IMC Chemicals (Chemicals), the future operational
structure of the Company will be comprised of the following four
business units: IMC-Agrico Phosphates (Phosphates), IMC Kalium
(Kalium), IMC Salt (Salt) and IMC-Agrico Feed Ingredients (Feed
Ingredients). All financial information for AgriBusiness has been
stated as discontinued operations. See Note 4, "Discontinued
Operations," of Notes to Consolidated Financial Statements.
<PAGE>
[Chart]
Net Sales
- - ---------
(In millions)
1998 1997 1996
---- ---- ----
$2,696.2 $2,116.0 $2,143.3
[Chart]
Gross Margins
- - -------------
(In millions)
1998(a) 1997 1996(a)
- - ------- ---- -------
$761.5 $574.9 $617.1
(a) Before non-recurring charges.
[Chart]
Earnings from Continuing Operations
- - -----------------------------------
(In millions)
1998(a) 1997(a) 1996(a)
- - ------- ------- -------
$229.1 $182.0 $181.6
(a) Before non-recurring charges.
<PAGE>
RESULTS OF OPERATIONS
OVERVIEW
1998 Compared to 1997
Net sales of $2,696.2 million in 1998 increased 27 percent from
$2,116.0 million one year ago. Gross margins for 1998 were $761.5
million, an increase of 32 percent from comparable 1997 margins of
$574.9 million, excluding 1998 non-recurring charges of $23.1 million,
related to the sale of IMC Vigoro and a Company-wide profit improvement
program, discussed in more detail below.
Earnings from continuing operations in 1998, before non-recurring
charges of $172.0 million, or $1.50 per share, related to a Company-
wide profit improvement program and the divestitures of the Chemicals
and IMC Vigoro businesses, were $229.1 million, or $2.00 per share.
The Company incurred a net loss in 1998 of $9.0 million, or $0.08 per
share, including non-recurring charges of: (i) $114.2 million, or $1.00
per share, related to a Company-wide profit improvement program,
discussed in more detail in "Merger and Restructuring Charges;" (ii)
$69.1 million, or $0.61 per share, of losses from discontinued
operations, including an estimated loss of $74.2 million, or $0.65 per
share, on the divestiture of AgriBusiness; (iii) $48.7 million, or
$0.42 per share, related to an estimated loss on the divestiture of the
Chemicals business; (iv) $9.1 million, or $0.08 per share, related to
the divestiture of the IMC Vigoro business, the Company's consumer lawn
and garden and professional products businesses; and (v) $3.0 million,
or $0.03 per share, of a net extraordinary gain related to early
extinguishments of high-cost debt.
In 1997, earnings from continuing operations, excluding a write-down of
the historical carrying value of the Company's interest in Main Pass
299 (Main Pass) of $112.2 million, or $1.19 per share, were $182.0
million, or $1.92 per share. Net earnings, including: (i) the Main
Pass write-down; (ii) earnings from discontinued operations of $18.0
million, or $0.19 per share; and (iii) an extraordinary charge of $24.9
million, or $0.26 per share, related to the early extinguishment of
high-cost debt, were $62.9 million, or $0.67 per share.
<PAGE>
Sales and earnings for 1998 were driven by increased sales by Kalium
and Phosphates which improved 13 percent and six percent, respectively.
In addition, sales and earnings for 1998 included the operations of
Salt and Chemicals which were established in conjunction with the
acquisition of privately held Harris Chemical Group, Inc. and its
Australian affiliate, Harris Chemical Australia Pty Ltd. & Its
Controlled Entities (collectively, Harris) in April 1998 (Harris
Acquisition). Sales for Salt and Chemicals in 1998 were $175.0 million
and $311.8 million, respectively. In December 1998, a definitive
agreement was signed to sell the Chemicals business unit. See Note 2,
"Acquisitions" and Note 5, "Other Divestitures," of Notes to
Consolidated Financial Statements.
1997 Compared to 1996
Net sales of $2,116.0 million in 1997 decreased one percent from
$2,143.3 million in 1996. Gross margins in 1997 were $574.9 million, a
decrease of seven percent from comparable 1996 margins of $617.1
million, excluding 1996 non-recurring charges of $20.8 million, related
to the Company's merger (Vigoro Merger) with The Vigoro Corporation
(Vigoro),discussed in more detail below.
Earnings from continuing operations in 1997, excluding the Main Pass
write-down of $112.2 million, or $1.19 per share, were $182.0 million,
or $1.92 per share. Net earnings, which included: (i) the Main Pass
write-down; (ii) earnings from discontinued operations of $18.0
million, or $0.19 per share; and (iii) an extraordinary charge of $24.9
million, or $0.26 per share, related to the early extinguishment of
high-cost debt, were $62.9 million, or $0.67 per share.
In 1996, earnings from continuing operations, excluding non-recurring
charges related to the Vigoro Merger, as well as costs associated with,
among other things, a corporate restructuring, other asset valuations
and environmental issues of $59.9 million, or $0.62 per share, were
$181.6 million, or $1.87 per share. Net earnings, which included: (i)
the non-recurring charges referred to above; (ii) earnings from
discontinued operations of $13.5 million, or $0.14 per share; and (iii)
an extraordinary charge of $8.1 million, or $0.08 per share, were
$127.1 million, or $1.31 per share.
Sales and earnings for 1997 were driven by record-level sales by Kalium
offset by a decline in sales at Phosphates. Kalium's net sales
increased 33 percent while Phosphates' net sales decreased 11 percent.
<PAGE>
For more detail on all the charges discussed above, see Note 2,
"Acquisitions," Note 3, "Non-Recurring Charges," Note 4, "Discontinued
Operations," Note 5, "Other Divestitures" and Note 13, "Financing
Arrangements," of Notes to Consolidated Financial Statements.
<TABLE>
IMC-AGRICO PHOSPHATES
- - ---------------------
(Dollars in millions)
<CAPTION>
% Increase
Years ended December 31, (Decrease)
------------------------------------------------
1998 1997 1996 1998 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net sales $1,572.8 $1,484.8 $1,661.3 6 (11)
Gross margins $ 375.6(c) $ 298.7 $ 411.4(d) 26 (27)
As a percentage
of net sales 24% 20% 25%
Sales volumes
(000 tons)(a) 7,313 7,105 7,382 3 (4)
Average DAP price
per short ton(b) $ 178 $ 176 $ 186 1 (5)
(a) Sales volumes include tons sold captively and represent dry
product tons, primarily DAP.
(b) FOB plant.
(c) Before non-recurring charges of $17.2 million.
(d) Before non-recurring charges of $6.9 million.
</TABLE>
1998 Compared to 1997
Phosphates' net sales of $1,572.8 million in 1998 increased six percent
from $1,484.8 million in 1997. Increased shipments of concentrated
phosphates contributed an additional $57.7 million to net sales. The
majority of the volume growth came from increased domestic shipments of
diammonium phosphate (DAP) and granular monoammonium phosphate (GMAP),
which each increased 17 percent, partially offset by decreased granular
triple superphosphate (GTSP) volumes of 13 percent. The increase in
DAP and GMAP was primarily a result of a strong spring season, an
increase in the number of supply contracts and spot sales to certain
larger co-ops. The decrease in GTSP was primarily the result of the
availability in the marketplace of aggressively priced imports.
<PAGE>
International sales volumes rose slightly compared to the prior year as
increased shipments of GMAP and merchant acid were partially offset by
decreased shipments of DAP. In addition, average sales realizations of
concentrated phosphates, particularly DAP, favorably impacted net sales
by $20.5 million. Net sales were also favorably impacted by $6.6
million due to higher domestic phosphate rock sales volumes.
Gross margins in 1998 of $375.6 million, excluding non-recurring
charges of $17.2 million, climbed 26 percent from $298.7 million in
1997, primarily as a result of the increased volumes and prices
discussed above as well as favorable raw material costs.
1997 Compared to 1996
Phosphates' net sales of $1,484.8 million in 1997 decreased 11 percent
from $1,661.3 million in 1996. Decreased sales volumes of concentrated
phosphates caused a decline in net sales of $45.0 million. The
majority of the decline came from reduced domestic shipments of DAP and
GTSP, which declined 17 and 11 percent, respectively, offset by
increased GMAP volumes of 18 percent. The decline in DAP and GTSP
volumes was primarily due to overall weakened demand and a focus on
higher margin GMAP opportunities. International sales volumes were
relatively flat in 1997 compared to 1996, as decreased shipments of DAP
and GTSP were offset by increased shipments of GMAP. In addition,
average sales realizations of concentrated phosphates, particularly
DAP, unfavorably impacted net sales by $49.2 million. Net sales were
also unfavorably impacted by $56.7 million due to lower phosphate rock
sales volumes as a result of the Company's strategic decision to phase
out third-party sales of phosphate rock. This action was taken to
maximize relative values of rock and concentrated phosphates by
utilizing high-quality reserves for internal upgrading.
Gross margins declined 27 percent in 1997 to $298.7 million from $411.4
million, excluding non-recurring charges of $6.9 million in 1996,
primarily due to the lower volumes and prices discussed above. In
addition, gross margins reflected the benefit of a change to
market-based acid pricing to Feed Ingredients.
<PAGE>
<TABLE>
IMC KALIUM
- - ----------
(Dollars in millions)
<CAPTION>
%Increase
Years ended December 31, (Decrease)
------------------------------------------
1998 1997 1996 1998 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net sales $ 700.1 $ 617.4 $ 464.8 13 33
Gross margins $ 283.1 $ 237.7 $ 159.8(c) 19 49
As a percentage of net
sales 40% 39% 34%
Sales volumes
(000 tons)(a) 8,485 8,941 7,290 (5) 23
Average potash price per
short ton(b) $ 81 $ 70 $ 64 16 9
(a) Sales volumes include tons sold captively.
(b) FOB plant/mine.
(c) Before non-recurring charges of $7.9 million.
</TABLE>
1998 Compared to 1997
Kalium's net sales increased 13 percent to $700.1 million in 1998 from
$617.4 million in 1997. This increase resulted from acquisitions made
by the Company as well as price increases during the year, partially
offset by decreased volumes. Sales for 1998 included a full year of
operating results for Western Ag-Minerals (Western Ag), which was
acquired in September 1997. The Company also acquired a salt
evaporation facility located in Ogden, Utah as part of the Harris
Acquisition in April 1998. The incremental sales in 1998 from these
two acquisitions contributed $80.0 million. Average sales realizations
increased 16 percent as a result of price increases effective in March
and September 1998. Sales volumes decreased by five percent as a
result of a decrease in domestic sales volumes of nine percent
partially offset by an increase in international volumes of five
percent. Domestic sales volumes declined as a result of low demand for
agricultural products due to an excellent harvest coupled with low
commodity prices, while the increase in international sales volumes was
attributable to greater potash exports to Brazil and China. The
increase in average sales realizations, partially offset by decreased
volumes, favorably impacted net sales by $3.0 million.
<PAGE>
Gross margins of $283.1 million in 1998 increased 19 percent compared
with $237.7 million in 1997, primarily as a result of the acquisitions
and price increases discussed above.
1997 Compared to 1996
Kalium's net sales increased 33 percent to $617.4 million in 1997 from
$464.8 million in 1996 as a result of higher volumes and prices.
Domestic volumes grew 22 percent, or $67.4 million, primarily due to
additional corn acreage planted in 1997, favorable weather conditions
and anticipated corn price increases. Internationally, increased
volumes favorably impacted net sales by $38.2 million primarily as the
result of higher demand from China. Average sales realizations
increased nine percent, or $41.6 million, as a result of a series of
price increases during the year. In addition, the inclusion of salt
sales in 1997 favorably impacted net sales by $5.4 million.
Gross margins of $237.7 million in 1997 increased 49 percent compared
to 1996 margins of $159.8 million, excluding 1996 non-recurring charges
of $7.9 million, primarily as a result of the volume and price
increases discussed above.
IMC SALT
The Salt business unit was established in April 1998 concurrent with
the Harris Acquisition; consequently, operating results for the year
ended December 31, 1998 included only partial year activity. The
Harris Acquisition established the Company as one of the leaders in the
salt industry. See Note 2, "Acquisitions," of Notes to Consolidated
Financial Statements.
Salt's net sales for 1998 were $175.0 million with gross margins of
$57.0 million. These results were lower than comparable pre-
acquisition amounts in 1997 of $182.8 million and $66.6 million,
respectively, primarily due to mild weather conditions.
OTHER
1998 Compared to 1997
The Company's net sales and gross margins in 1998 included results from
the Chemicals, Feed Ingredients and IMC Vigoro business units.
Chemicals, with 1998 sales and margins of $311.8 million and $40.8
million, respectively, was established concurrent with the Harris
<PAGE>
Acquisition in April 1998; consequently, operating results for the year
ended December 31, 1998 included only partial year activity. In
December 1998, a definitive agreement was signed to sell the Chemicals
business unit with the Company retaining an ongoing minority economic
interest. Additionally, sales for Feed Ingredients remained relatively
flat and margins decreased slightly as a result of a change in the
price of purchased acid from Phosphates in mid-1997. The divestiture of
IMC Vigoro in June 1998 partially offset the increases in net sales and
gross margins discussed above. See Note 2, "Acquisitions" and Note 5,
"Other Divestitures," of Notes to Consolidated Financial Statements.
1997 Compared to 1996
Net sales for 1997 included the Feed Ingredients and IMC Vigoro
businesses and remained relatively unchanged from 1996 levels.
Gross margins in 1997 were negatively impacted by increased costs at
Feed Ingredients as a result of a change in the price in mid-1997 of
acid purchased from Phosphates coupled with inventory write-offs at IMC
Vigoro.
<TABLE>
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
- - --------------------------------------------
(In millions)
<CAPTION>
% Increase
Years ended December 31, (Decrease)
-----------------------------------------
1998 1997 1996 1998 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Selling, general and
administrative expenses $ 159.6(a)$ 131.8 $ 132.4(b) 21 -
(a) Before non-recurring charges of $9.9 million.
(b) Before non-recurring charges of $0.2 million.
</TABLE>
1998 Compared to 1997
The increase in selling, general and administrative expenses for 1998
as compared to 1997 primarily resulted from the Harris Acquisition in
April 1998, partially offset by an overall reduction in general
corporate spending and the divestiture of IMC Vigoro in June 1998. See
Note 2, "Acquisitions" and Note 5, "Other Divestitures," of Notes to
Consolidated Financial Statements.
<PAGE>
1997 Compared to 1996
Selling, general and administrative expenses for 1997 remained
consistent with 1996.
MERGER AND RESTRUCTURING CHARGES
During the fourth quarter of 1998, the Company developed and began
execution of a plan to improve profitability (Restructuring Plan or
Project Profit). The Restructuring Plan was comprised of four major
initiatives: (i) the combination of the potash and phosphates business
units in an effort to realize certain operating and staff function
synergies; (ii) restructuring of the phosphate rock mining,
concentrated phosphate and salt production/distribution operations and
processes in an effort to reduce costs; (iii) simplification of the
current business activities by eliminating businesses not deemed part
of the Company's core competencies; and (iv) reduction of operational
and corporate headcount. In conjunction with the Restructuring Plan,
the Company recorded pre-tax charges totaling $193.3 million ($162.0
million net of minority interest) in the fourth quarter of 1998.
As a result of the specific plans described below, the Company expects
to increase operating earnings in excess of an estimated $100.0 million
over the next two years, with approximately half of that amount
expected to be realized in 1999. The increase in earnings is
anticipated to result from simplification of the business, shut-down of
high-cost operations, exit from low-margin businesses and headcount
reductions. The Restructuring Plan (shown below in tabular format)
primarily relates to the following:
Asset impairments
Project Profit included the removal of property, plant and equipment,
as well as the write-down to fair value of those assets made obsolete
due to the decision to close certain facilities and forego or abandon
certain mineral properties. In order to determine the write-down of
assets affected by the Restructuring Plan, and in accordance with
Statement of Financial Accounting Standard (SFAS) No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of," the Company performed an assessment of future cash flows
and, accordingly, adjusted the assets to their appropriate fair values.
<PAGE>
The majority of the impairment occurred at Phosphates' Florida
production facilities where property, plant and equipment was written
down by approximately $64.4 million to fair value. Phosphates
developed a new strategic mine plan (Mine Plan) which identified asset
reductions, lower operating costs and optimal phosphate rock management
as key drivers in the restructuring of operations. The write-down of
impaired assets in connection with the Mine Plan primarily consisted of
facilities, production equipment, operating supplies, land and mineral
reserves.
Salt recorded an $11.2 million write-down of property, plant and
equipment at its Kansas and Canadian locations, as a result of the
decision to consolidate certain facilities and achieve operating
efficiencies. The majority of the write-down related to production
equipment. The remaining $0.4 million of asset impairments was
recorded at Feed Ingredients for the permanent closure of a limestone
rock production facility.
The $76.0 million in asset impairment charges included $31.8 million
pertaining to assets which will continue to be utilized until their
respective disposal dates, primarily within the first nine months of
1999. The estimated fair value of these assets, which will be
depreciated over their respective remaining periods of service,
reflected estimated operating net cash flows until disposition.
Non-employee exit costs
In accordance with the objective of the Mine Plan, to optimize
phosphate rock management, Phosphates decided to permanently close a
high-cost phosphate rock mine. As a result of this decision, the
Company recorded a charge of $18.4 million for the demolition and other
incremental costs of closure of the mine. The closure costs included
approximately $15.5 million for incremental environmental land
reclamation of the surrounding mined-out areas. The Company expects the
demolition and closure activities to be essentially completed by the
end of the third quarter of 1999.
The Company also decided to close certain production operations in
connection with the Restructuring Plan, principally the uranium and
urea operations of Phosphates. This decision was based on an analysis
of the future outlook for these products, taking into consideration
whether the operations were part of the Company's core businesses.
These operations were determined to be non-core businesses and the
Company recorded charges of approximately $12.8 million for demolition
and closure, including environmental costs, of the uranium and urea
<PAGE>
production facilities. Additionally, environmental and closure costs of
$2.4 million have been recognized for the planned closure of one of the
Company's evaporated salt production facilities. The Company expects
the demolition and closure activities to be completed by late-1999.
Other various exit costs totaled $7.3 million.
In connection with the Restructuring Plan, the Company decided to
discontinue its transportation of ammonia from Louisiana to its
phosphate operations in Florida. This decision was based on current
market conditions which secured the availability of ammonia to the
Company and which made the high-cost transportation of ammonia from
Louisiana to Florida unnecessary. As a result, the Company recorded a
charge of $13.2 million for the net present value of costs associated
with permanently idling leased equipment used in the transportation of
ammonia from Louisiana.
Employee headcount reductions
As part of the Restructuring Plan, headcount reductions were
implemented at the Phosphates, Feed Ingredients, Salt and Kalium
operations, as well as at the Company's corporate headquarters.
Certain of these reductions were a result of the closing and/or exiting
of production operations, as discussed above. To facilitate headcount
reductions, the Company offered a voluntary retirement program for
eligible employees. In addition, certain involuntary eliminations of
positions, which were communicated prior to December 31, 1998, were
necessary in order to achieve desired staffing levels. A total of 185
employees accepted the voluntary retirement plan by December 31, 1998,
with 112 of those employees having left the Company as of that date.
The remaining voluntarily terminated employees will leave the Company
by June 1999. Additionally, a total of 454 employees were
involuntarily terminated and had left the Company by the end of
February 1999. Virtually all severance payments were disbursed
subsequent to December 31, 1998.
As a result of the employee terminations necessitated by the
Restructuring Plan, settlement, curtailment and special termination
charges of $19.7 million were recorded in accordance with SFAS No. 88,
"Employers' Accounting for Settlements and Curtailments of Defined
Benefit Pension Plans and for Termination Benefits." The related
liabilities have been classified in Other noncurrent liabilities in the
Company's Consolidated Balance Sheet. See Note 15, "Pension Plans and
Other Benefits," of Notes to Consolidated Financial Statements.
<PAGE>
Inventories and spare parts of exited businesses
Phosphates recorded charges of approximately $17.2 million to reduce
the carrying value of finished goods inventories on-hand to net
realizable value at December 31, 1998, as a result of the decision to
exit certain businesses.
The Restructuring Plan included a major reduction in production assets
primarily used in the Phosphates business. The reduction was
accomplished through the permanent shut-down of select mining
facilities as well as a cut-back in concentrate facilities. Given the
reduction in facilities and the resulting decrease in production,
historical levels of spare parts inventory that had been maintained by
the Company were no longer necessary or warranted. Therefore, the
Company recorded a charge of $8.7 million for the write-off of spare
parts inventory.
Details of the restructuring charges were as follows:
<TABLE>
(In millions)
<CAPTION>
Activity
--------------------
Restructuring Remaining
Charges Cash Paid Non-cash Accrual
------- --------- -------- -------
<S> <C> <C> <C> <C>
Asset impairments:
Facilities closed prior to
December 31, 1998 $ 44.2 $ - $ 44.2 $ -
Facilities to be closed
in 1999 31.8 - 31.8 -
Non-employee exit costs:
Demolition and closure costs 33.6 - - 33.6
Idled leased transportation
equipment 13.2 - - 13.2
Other 7.3 0.5 1.5 5.3
Employee headcount reductions:
Severance benefits 17.6 0.2 - 17.4
Settlement, curtailment and
special termination benefits 19.7 - 19.7 -
<PAGE>
Inventories and spare parts
of exited businesses:
Finished goods inventories 17.2 - 17.2 -
Spare parts inventories 8.7 - 8.7 -
------ ------ ------ ------
Total $193.3 $ 0.7 $123.1 $ 69.5
====== ====== ====== ======
</TABLE>
All restructuring charges have been recorded as a separate line item on
the Consolidated Statement of Operations, except for the finished goods
inventory write-down which was recorded in Cost of goods sold.
<TABLE>
OTHER (INCOME) EXPENSE, NET
- - -------------------------------
(In millions)
<CAPTION>
% Increase
Years ended December 31, (Decrease)
-------------------------------------------------
1998 1997 1996 1998 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Other (income)
expense, net $ (3.9)(a) $ (5.4) $(22.5)(b) (28) (76)
(a) Before a non-recurring loss on sale of Chemicals of $44.1 million.
(b) Before non-recurring charges of $16.6 million.
</TABLE>
1998 Compared to 1997
The decrease in other income in 1998 as compared to 1997 resulted from
increased debt fee amortization as a result of the issuance and
refinancing of certain debt in conjunction with the Harris Acquisition.
See Note 13, "Financing Arrangements," of Notes to Consolidated
Financial Statements.
1997 Compared to 1996
Results for 1996 included gains on the sale of properties of $11.6
million and higher interest income realized from short-term investments
as compared to 1997.
<PAGE>
<TABLE>
INTEREST EXPENSE
- - ----------------
(In millions)
<CAPTION>
% Increase
Years ended December 31, (Decrease)
-------------------------------------------------
1998 1997 1996 1998 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Interest expense $ 176.0 $ 40.2 $ 43.6 n/m (8)
n/m not meaningful.
</TABLE>
1998 Compared to 1997
The increase in interest expense in 1998 compared with 1997 was
attributable to debt assumed as part of the Harris Acquisition and the
issuance of additional debt necessary to fund the purchase. For
additional detail, see "Capital Resources and Liquidity" as well as
Note 2, "Acquisitions" and Note 13, "Financing Arrangements," of Notes
to Consolidated Financial Statements.
1997 Compared to 1996
Interest expense for 1997 remained consistent with 1996.
<TABLE>
MINORITY INTEREST
- - -----------------
(In millions)
<CAPTION>
% Increase
Years ended December 31, (Decrease)
-------------------------------------------------
1998 1997 1996 1998 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Minority interest $ 14.1 $ 124.4 $ 185.7 (89) (33)
</TABLE>
<PAGE>
1998 Compared to 1997
The decrease in minority interest compared with 1997 was primarily the
result of the merger between Freeport-McMoRan Inc. (FTX) and the
Company (FTX Merger). See Note 2, "Acquisitions" and Note 6, "Minority
Interest," of Notes to Consolidated Financial Statements.
1997 Compared to 1996
The decrease in minority interest compared with 1996 was primarily
attributable to a reduction in IMC-Agrico Company (IMC-Agrico) earnings
in 1997.
[CHART]
EBITDA(a)
- - ------
(In millions)
1998 1997
---- ----
$825.6 $464.5
(a) Earnings from continuing operations before non-recurring charges,
minority interest, interest charges, taxes, depreciation and
amortization, and after PLP distributions.
[Chart]
Capital Expenditures
- - --------------------
(In millions)
1998 1997
---- ----
$367.6 $244.0
[CHART]
Debt-to-Total Capitalization
- - ----------------------------
1998 1997
- - ---- ----
62.1% 42.4%
<PAGE>
CAPITAL RESOURCES AND LIQUIDITY
The Company generates significant cash from operations and has
sufficient borrowing capacity to meet its operating and discretionary
spending requirements.
Operating activities generated $269.1 million of cash in 1998 compared
with $563.4 million in 1997. The decrease of $294.3 million was
primarily due to an increase in working capital. The Company's working
capital ratio, excluding short-term debt and current maturities and
assets of discontinued operations held for sale, was 2.4:1 as of
December 31, 1998 compared with 2.2:1 as of December 31, 1997. The
change in working capital was the result of a build-up of inventories
and the payment of previously settled litigation matters.
Net cash used in investing activities increased $383.1 million over
1997 primarily due to acquisitions and increased capital expenditures,
partially offset by $44.8 million of proceeds from the sale of IMC
Vigoro. The Company invested $393.3 million of cash to fund the Harris
Acquisition in April 1998, which established the Company as a leading
salt producer. See Note 2, "Acquisitions" and Note 5, "Other
Divestitures," of Notes to Consolidated Financial Statements.
In 1998, the Company expended $367.6 million on mine expansion and
development; oil and gas exploration and development; and system
development and production equipment upgrades while in 1997
expenditures of $244.0 million related to mine expansion and
development as well as production equipment upgrades. The increase of
$123.6 million over 1997 was primarily due to the following: (i) PLP's
share of McMoRan Exploration Co. (MMR), formerly McMoRan Oil & Gas Co.
(MOXY), exploration and development costs of $44.4 million (see
discussion below); (ii) enterprise-wide systems development
expenditures of $28.2 million; and (iii) expenditures for Salt and
Chemicals of $28.1 million and $17.6 million, respectively. The Company
estimates that its capital expenditures for 1999 will approximate
$230.0 million and will be financed primarily from operations.
In conjunction with the FTX Merger, the Company, through its interest
in PLP, participates in an aggregate $210.0 million, multi-year oil and
natural gas exploration program with MMR (Exploration Program). In
accordance with the Exploration Program, PLP, MMR and an individual
investor (Investor) fund 56.4 percent, 37.6 percent and 6.0 percent,
respectively, of the exploration costs. As of December 31, 1998, PLP's
total exploration spending-to-date was approximately $70.0 million.
<PAGE>
All revenue and other costs are allocated 47.0 percent to PLP, 48.0
percent to MMR and 5.0 percent to the Investor.
Cash generated from financing activities increased $631.9 million in
1998 from a use of funds of $190.4 million in 1997 to a source of funds
of $441.5 million in 1998. This increase in financing funds was
primarily due to higher net debt proceeds in 1998 of $315.6 million,
decreased stock repurchases of $184.4 million and decreased cash
distributions to PLP of $135.4 million as a result of the Company's
increased ownership in IMC-Agrico due to the FTX Merger. During 1998,
total borrowings increased to approximately $3.0 billion primarily due
to the assumption and issuance of approximately $1.5 billion in debt
related to the Harris Acquisition. As part of a general debt
restructuring subsequent to the Harris Acquisition, the Company issued
approximately $1.1 billion in long-term notes and debentures with
effective interest rates ranging from 6.50 percent to 7.625 percent
with maturities from 2001 through 2018. The debt restructuring reduced
the Company's short-term borrowings, primarily commercial paper, and
retired the higher rate debt assumed as part of the Harris Acquisition.
Additionally, the Company will use anticipated proceeds from the
pending divestitures of AgriBusiness and Chemicals to pay down existing
debt.
As of December 31, 1998, the Company had the ability to borrow under a
shelf registration statement which permitted the issuance of
approximately $750.0 million of securities. As of December 31, 1998,
the Company also had $977.6 million of commercial paper outstanding
supported by $1.5 billion of bank facilities. See Note 13, "Financing
Arrangements," of Notes to Consolidated Financial Statements.
The Company may acquire shares of its stock on an ongoing basis and is
authorized as of December 31, 1998 to purchase up to an additional 4.5
million shares. Management considers market conditions, alternate uses
of cash and shareholder returns, among other factors, when evaluating
the timing of share repurchases.
The Company's financial condition remains strong. The Company believes
that its cash, other liquid assets, operating cash flows and access to
capital markets, taken together, provide adequate resources to fund
ongoing operating requirements and future capital expenditures related
to the expansion of and investment in existing businesses and
development of new projects.
<PAGE>
MARKET RISK
The Company is exposed to the impact of interest rate changes,
fluctuations in the functional currency of foreign operations, and the
impact of fluctuations in the purchase price of natural gas consumed in
operations, as well as changes in the market value of its financial
instruments. The Company periodically enters into derivatives in order
to minimize these risks, but not for trading purposes.
The functional currency of all operations outside the United States is
the respective local currency. Foreign currency translation effects
are included in Accumulated other comprehensive income in stockholders'
equity. The Company uses foreign currency forward exchange contracts,
which typically expire within one year, to hedge transaction exposure
related to United States dollar-denominated assets and liabilities.
Realized gains and losses on these contracts are recognized in the same
period as the hedged transaction. The Company had foreign currency
forward exchange contracts outstanding as of December 31, 1998 and 1997
with notional amounts of $106.2 million and $183.8 million,
respectively, which approximated fair value.
The Company conducted sensitivity analyses of its derivatives and other
financial instruments assuming the following: (i) a one percentage
point adverse change in interest rates; (ii) a ten percent adverse
change in foreign currency exchange rates; and (iii) a ten percent
adverse change in the purchase price of natural gas, all from their
levels at December 31, 1998. Holding all other variables constant, the
hypothetical adverse changes would not materially affect the Company's
financial position. These analyses did not consider the effects of the
reduced level of economic activity that could exist in such an
environment and certain other factors.
Further, in the event of a change of such magnitude, management would
likely take actions to further mitigate its exposure to possible
changes. However, due to the uncertainty of the specific actions that
would be taken and their possible effects, the sensitivity analyses
assume no changes in the Company's financial structure.
CONTINGENCIES
Reference is made to Note 20, "Contingencies," of Notes to Consolidated
Financial Statements.
<PAGE>
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
The Company's Program
The Company has adopted the following Environmental, Health and Safety
(EHS) Policy (Policy):
As a key to the Company's success, the Company is committed
to the pursuit of excellence in health and safety, and
environmental stewardship. Every employee will strive to
continuously improve the Company's performance and to
minimize adverse environmental, health and safety impacts.
The Company will proactively comply with all environmental,
health and safety laws and regulations.
This Policy is the cornerstone of the Company's comprehensive EHS plan
(EHS Plan) to achieve sustainable, predictable, measurable and
verifiable EHS performance. Integral elements of the EHS Plan include:
(i) improving the Company's EHS procedures and protocols; (ii)
upgrading its related facilities and staff; (iii) performing baseline
and verification audits; (iv) formulating improvement plans; and (v)
assuring management accountability. The Company has adopted a three-
year phased approach to initial implementation of this EHS Plan. Each
of the Company's business units is in a different stage of EHS
integration, with the recently acquired operations just beginning the
process. In the fourth year of the EHS Plan and beyond, the Company
will conduct verification audits to confirm that the business units
have implemented the program and have achieved regulatory compliance,
continuous improvement and integration of EHS management into day-to-
day business functions. The Company's goal is to implement a
harmonized EHS system that supports the Company's position as a
proactive, effective and efficient corporate citizen.
Through the EHS Plan, the Company endeavors to ensure that it satisfies
its obligations. As a producer and distributor of crop nutrients and
salt, the Company is subject to a myriad of international, federal,
state, provincial and local EHS laws in the United States, Canada and
Europe. These ever-evolving standards regulate, or propose to regulate:
(i) the content and use of products; (ii) the conduct of mining and
production operations including employee safety procedures; (iii) the
management and handling of raw materials; (iv) air and water quality;
<PAGE>
(v) disposal of hazardous and solid wastes; and (vi) post-mining land
reclamation. For new regulatory programs, it is difficult to ascertain
future compliance obligations or estimate future costs until
implementing regulations have been finalized and definitive regulatory
interpretations have been adopted. The Company believes that the EHS
Plan will respond to these regulatory requirements while minimizing EHS
risk and associated costs. Nevertheless, there can be no assurance
that unexpected or additional costs, penalties, or liabilities will not
be incurred.
The Company has expended, and anticipates that it will continue to
expend, substantial resources, both financial and managerial, to comply
with EHS standards. In 1999, environmental capital expenditures will
total approximately $55.0 million, primarily related to: (i)
installation of a new mine shaft at Cote Blanche, Louisiana; (ii)
construction of wastewater treatment areas in Florida; (iii)
modification and construction projects associated with phosphogypsum
stacks at the concentrates plants in Florida and in Louisiana; and (iv)
remediation of contamination at current or former operations.
Additional expenditures for land reclamation activities will total
approximately $19.0 million. In 2000, the Company expects
environmental capital expenditures will be approximately $49.0 million
and expenditures for land reclamation activities to be approximately
$20.0 million. Based on current information, it is the opinion of
management that the Company's contingent liability arising from EHS
matters, taking into account established reserves, will not have a
material adverse effect on the Company's financial position or results
of operations. However, no assurance can be given that greater-than-
anticipated EHS expenditures will not be required in 1999 or in the
future.
Product Requirements and Impacts
The Company's primary businesses include the production and sale of
crop nutrients and salt. International, federal, state and provincial
standards: (i) require registration of all crop nutrient products and
certain salt products before those products can be sold; (ii) impose
labeling requirements on those products; and (iii) require producers to
manufacture the products to formulations set forth on the labels.
Various environmental, natural resource and public health agencies at
all regulatory levels have begun evaluating alleged environmental
impacts that might arise from the handling and use of products such as
those manufactured by the Company. Most of these evaluations are in
the initial stages. Some agencies have implemented or are considering
standards that may restrict customers' use of the Company's products
because of the alleged impacts; however, it is unclear whether the
<PAGE>
evaluations will result in additional regulatory requirements for the
industry, including the Company. At this preliminary stage, the
Company cannot estimate the potential impact of these standards on the
market for the Company's products or on the expenditures that may be
necessary to meet new requirements.
Operating Requirements and Impacts
Permitting
The Company holds numerous environmental and other permits authorizing
operations at each of its facilities. A decision by a government
agency to deny an application for a new or renewed permit, or to revoke
or substantially modify an existing permit, could have a material
adverse effect on the Company's ability to continue operations at the
affected facility. Expansion of Company operations also is predicated
upon securing the necessary environmental or other permits. The United
States Environmental Protection Agency has recently proposed guidance
that would allow organizations or communities to challenge federally
authorized permits on the basis that those permits would have a
disproportionate impact on minority or low-income communities. This
guidance could impact the ability of the Company's operations to obtain
timely permits, particularly in Louisiana.
In addition, over the next two to six years, Phosphates will be
continuing its efforts to obtain permits in support of its anticipated
Florida mining operations at the Ona and Pine Level properties. These
properties contain in excess of 100 million tons of phosphate rock
reserves. For years, the Company has successfully permitted mining
properties in Florida and anticipates that it will be able to permit
these properties. Nevertheless, a denial of these permits or the
issuance of permits with cost-prohibitive conditions would adversely
impact the Company by preventing it from mining at Ona or Pine Level.
Mining Operations
A significant number of EHS standards govern the Company's phosphate,
potash and salt mining activities and the Company is in substantial
compliance with these standards. In October 1997, however, Phosphates
received three notices from the United States Army Corps of Engineers
(Corps) alleging that the Company had violated the permits authorizing
phosphate mining in certain wetland areas. After an internal audit of
its Corps permits, the Company notified the Corps that the Company had
inadvertently disturbed, without permits, additional wetlands over
<PAGE>
which the Corps had asserted jurisdiction. The Company has had
discussions with the Corps to resolve these issues. A settlement
agreement is pending and the Company does not expect that the
settlement will have a material adverse effect on the Company's
financial condition or operations.
Several regulatory agencies have begun to review potential health
impacts of diesel emissions in mining operations. The Province of
Ontario has adopted and the Mine Safety and Health Administration has
proposed limits of exposure to diesel emissions for all underground
mining operations including salt and potash. Moreover, in 1998, the
National Institute for Occupational Safety and Health (NIOSH) conducted
a study to determine whether exposure to exhaust generated by diesel
equipment used in underground mining operations results in health
effects. This study involved a review of Kalium's two potash mines in
Carlsbad, New Mexico. The Company cannot estimate the extent of
expenditures that may be necessary to address conclusions of the NIOSH
study or additional regulatory standards that may arise.
Management of Residual Materials
Potash, salt and phosphate mining and processing generate residual
materials that must be managed. Potash tailings, which contain
primarily salt, iron and clay, are stored in surface disposal sites.
Salt residuals are managed in piles. Phosphate mining residuals such
as overburden and sand tailings are used in reclamation, while clay
residuals are deposited in clay ponds. Phosphate processing produces
phosphogypsum which is stored in phosphogypsum stack systems. The
Company has incurred and will continue to incur significant costs to
manage its potash, salt and phosphate residual materials in accordance
with environmental laws, regulations and permit requirements.
For potash and salt residuals in Saskatchewan, the Department of
Environmental and Resource Management (Department) published
regulations in 1994 requiring all mine operators to obtain approval of
facility decommissioning and reclamation plans that would cover all
mine facilities, including salt piles and potash tailings management
areas. As part of these plans, the Department will require operators
to provide financial assurance that the plans will be carried out,
although the financial assurance mechanism has not been specified.
<PAGE>
Along with other members of the potash industry, the Company filed
decommissioning plans for its three Saskatchewan potash mines in 1997.
The Department rejected all industry plans that did not provide for the
underground disposal of surface tailings. The potash industry is
cooperating with the Department to evaluate technically feasible
disposal alternatives besides underground disposal. Although costs for
decommissioning are likely to be significant, the Company does not
anticipate expending such funds in the foreseeable future because
implementation of the decommissioning plans is deferred until an
agreement is reached with the Department over the appropriate technical
approach. Like all members of the potash industry, the Company is
unable to predict with certainty the financial impact of these
regulations on the Company due to the anticipated life of each mine,
potential advances in tailings management technology and changes from
time to time in rules and regulations.
The Company's Saskatchewan salt mine also submitted its decommissioning
plan in 1997. The plan was conditionally approved because it provided
for dissolution and reinjection of the facility's residual salt pile.
The dissolution process has begun; however, the Department still has
not specified the type of financial assurance that it will require from
the salt mine facility.
With regard to phosphate processing, Florida law may require Phosphates
to close one or more of its unlined phosphogypsum stacks and/or
associated cooling ponds after March 25, 2001 if the stack system or
pond is demonstrated to cause an exceedance of Florida's groundwater
quality standards. Phosphates has already begun closure activities at
its unlined gypsum stack at its New Wales facility in central Florida.
Phosphates cannot predict at this time whether Florida law will require
closure of any of its other stack systems. The costs of such closure
could be significant. In addition, Phosphates currently operates an
unlined cooling pond at New Wales. Monitoring indicates that
discharges from the unlined cooling pond are within Florida goundwater
standards. As a result, Phosphates is seeking a permit to continue
operating this pond. The Company anticipates that the permit will be
granted during the second quarter of 1999. However, if Phosphates does
not receive the permit, it will need to line or relocate the cooling
pond, which is estimated to cost approximately $50.0 million.
On-Site Remedial Activities
Many of the Company's currently, and formerly, owned facilities have
been in operation for a number of years. The historical use and
handling of regulated chemical substances, crop nutrient products and
<PAGE>
salt at these facilities by the Company and predecesssor operators has
resulted in soil and groundwater contamination. In addition, through
the FTX Merger, the Company has assumed responsibility for
contamination at some crop nutrient or oil and gas facilities that were
operated by FTX, PLP or their predecessors.
Spills or other unintended releases of regulated substances have
occurred previously at these facilities, and potentially could occur in
the future, possibly requiring the Company to undertake or fund cleanup
efforts. At some locations, the Company has agreed, pursuant to
consent orders with the appropriate governmental agencies, to undertake
certain investigations, which currently are in progress, to determine
whether remedial action may be required to address contamination.
Material expenditures could be required by the Company in the future to
remediate the contamination at these current or former sites. It is the
Company's policy to accrue environmental investigatory and non-capital
remediation costs for identified sites when litigation has commenced or
a claim or assessment has been asserted or is probable and the
likelihood of an unfavorable outcome is probable. The Company cannot
determine the cost of any remedial action that ultimately may be
required at unknown sites, sites currently under investigation, sites
for which investigations have not been performed, or sites at which
unanticipated conditions are discovered.
The Company believes that, pursuant to several indemnification
agreements, it is entitled to at least partial, and in many instances
complete, indemnification for a portion of the costs that may be
expended by the Company to remedy environmental issues at certain
facilities. These agreements address issues that resulted from
activities occurring prior to the Company's acquisition of facilities
or businesses from parties including PPG Industries, Inc.; Kaiser
Aluminum & Chemical Corporation; Beatrice Companies, Inc.; Estech,
Inc.; ARCO; Conoco; the Williams Companies; Kerr-McGee Inc.; and
certain other private parties. The Company has already received and
anticipates receiving amounts pursuant to the indemnification
agreements for certain of its expenses incurred to date as well as
future anticipated expenditures.
Off-Site Remedial Activities
In addition to impacting the sites at which the Company has operated,
several parties have alleged that the Company's historic operations
have resulted in contamination to neighboring off-site areas.
<PAGE>
In Louisiana, three lawsuits filed in 1998 contend that former oil and
gas operations of FTX, its subsidiaries and other defendants resulted
in damage to marshland: Terrebone Parish School Board v. Texaco Inc.;
Estate of Simoneaux v. Southern Natural Gas Co.; and Michael X. St.
Martin v. Quintana Petroleum Corp. These suits seek unspecified
damages for restoration of the marshes to their "pre-leased," "pre-
operational," or "natural" conditions. Because the suits are in the
early stages, it is difficult to determine the magnitude of exposure to
the Company; however, the Company intends to vigorously contest these
actions.
Superfund
The Comprehensive Environmental Response Compensation and Liability Act
(Superfund)imposes liability, without regard to fault or to the
legality of a party's conduct, on certain categories of persons that
are considered to have contributed to the release of "hazardous
substances" into the environment. Currently, the Company is involved
or concluding involvement at less than 20 Superfund sites. The
Company's liability at these sites, either alone or in the aggregate,
is not currently expected to be material. As more information is
obtained regarding these sites and the potentially responsible parties
involved, this expectation could change.
YEAR 2000 READINESS DISCLOSURE
Like other businesses dependent on modern technology, the Company must
address potential Year 2000-related issues. The Company is progressing
through a comprehensive program (Year 2000 Program) to evaluate and
address the impact of Year 2000-related issues on its operational
systems, business application software, computer hardware, facilities
infrastructure and equipment with embedded technology, and Year 2000-
related risks associated with its vendors and customers.
The Company's Year 2000-related effort is a cooperative venture
coordinated among business units and appropriate members of the
Company's senior management. Progress reviews are held regularly with
senior management and the Board of Directors. As an additional step,
the Company has created the position of Year 2000 Risk Manager to
provide Company-wide leadership, oversight and coordination of its Year
2000 project.
<PAGE>
State of Readiness
The Company is using both internal and external resources to implement
its Year 2000 Program, which includes the following overlapping phases:
(i) system inventory and analysis; (ii) remediation, testing and
implementation; and (iii) vendor and customer review. The Company
expects that its Year 2000 Program will be substantially complete by
the end of the third quarter of 1999.
System Inventory and Analysis Phase
The system inventory and analysis phase consists of compiling a
detailed inventory of all of the Company's systems and platforms to
determine which items are date sensitive, affected by the Year 2000,
and therefore require remediation. Each of the Company's business
units has focused specifically on the following seven target areas: (i)
business application software; (ii) mainframe hardware and software;
(iii) network servers; (iv) desktop environment; (v) network and
telephone systems; (vi) non-information technology assets and
facilities; and (vii) major suppliers and service providers. This
analysis has involved both an internal assessment conducted by Company
engineers, technicians and business unit managers, as well as contact
with the manufacturers of computer systems and equipment used by the
Company in its operations. Each of the Company's business units has
substantially completed its system inventory and analysis phase. The
principal business application systems requiring remediation that were
identified by the Company during this stage include the following
systems: (i) equipment maintenance; (ii) spare parts inventory; (iii)
distribution; (iv) customer order entry; and (v) financial/accounting.
In addition, some Company plants have identified certain production
control systems that will require Year 2000-related remediation in
order to remain operative.
Remediation, Testing and Implementation Phase
The remediation, testing and implementation phase involves determining
and implementing a remediation method (upgrade, replace or discontinue)
that is most appropriate for each specific date-sensitive item. The
remediated item is then tested and returned to normal operations when
Year 2000-related issues have been addressed. Testing includes
functional testing of remedial measures and regression testing to
validate that changes have not altered existing functionality. Several
system manufacturers have provided testing procedures for their
equipment and have been available for consultations about Year 2000-
related testing. In certain cases, the Company has also retained
special consultants to assist with its remediation efforts.
<PAGE>
As a separate initiative, the Company is implementing its Global Vision
Project, an enterprise-wide resource planning (ERP) software package.
Its scope includes accounts payable, inventory, purchasing, general
ledger, payroll, human resources and plant maintenance. This new ERP
software and the improvements to the infrastructure hardware required
to support the Global Vision Project should further remediate issues
associated with the Year 2000. The Company expects all of its business
units to have substantially completed the remediation, testing and
implementation phase in the third quarter of 1999.
Vendor and Customer Review Phase
Vendor reviews consist of assessing vendor readiness, and if necessary,
identifying alternate channels to receive critical materials and/or
supplies. Each business unit has developed a questionnaire that has
been submitted to its primary suppliers and vendors to determine their
Year 2000-related status. The business units are currently analyzing
the information provided in these responses, and will determine the
best way to address any specific issues. As an additional precaution,
each business unit's purchase orders now contain a Year 2000-related
clause to help ensure that any newly purchased equipment adequately
addresses Year 2000-related issues.
Although the Company is attempting to monitor and validate the efforts
of other parties, it may not have control over the success of these
efforts. In the event that satisfactory commitments from key suppliers
are not received, the Company is forming plans for the continuing
availability of critical materials and supplies through alternate
channels. In general, however, the Company is satisfied with the
progress made by key vendors to date and no critical issues have been
identified.
In addition to investigating the Company's key suppliers, the Company's
business units are also contacting key customers to explain the
Company's Year 2000-related efforts and to solicit certain information
about each customer's Year 2000-related efforts to assess potential
Year 2000-related problems that could affect future orders from such
customers.
Costs
The Company does not currently expect that the costs of addressing its
Year 2000-related issues will have a material effect on its financial
position, results of operations or liquidity. Modification costs for
Year 2000-related issues are expensed as incurred and are funded
through operating cash flows. In a few limited instances, some
<PAGE>
business units have deferred certain non-Year 2000-related information
technology projects due to their respective Year 2000-related efforts.
The Company believes, however, that these deferred projects are not
critical to its present or future financial performance or business
operations. The Company estimates its total Year 2000-related
technology and non-information technology systems remediation costs to
be approximately $6.0 million, of which approximately $2.0 million was
expended in 1998. The remaining costs will be incurred during 1999. A
sizable portion of these costs represent the redeployment of existing
employee resources rather than incremental expenses.
Risks
Progress reports on the Year 2000 Program are presented regularly to
the Company's Board of Directors and senior management. As the program
continues, the Company may discover additional Year 2000-related
challenges, including that remediation plans are not feasible or that
the cost of such plans exceeds current expectations. In many cases,
the Company is relying on written assurances from vendors that the
current systems are, or that new or upgraded systems acquired by the
Company will adequately address Year 2000-related issues. The Company
believes that one of its principal Year 2000-related risks is the
effect Year 2000-related issues will have on its vendors, especially
its utilities vendors. A substantial part of the Company's day-to-day
operations is dependent on power, transportation systems, and
telecommunication services, as to which alternative sources of service
may not be available. The Company will continue to investigate the
readiness of its suppliers, including utilities, and pursue the
availability of alternatives to further diminish the extent of any
impact Year 2000-related issues may have on the Company. Although
there can be no assurance that the Company will be able to complete all
of the modifications in the required time frame or that no
unanticipated events will occur, it is management's belief that the
Company is taking adequate action to address Year 2000-related issues.
However, because of the range of possible issues and the large number
of variables involved, it is impossible to quantify the potential cost
of problems should the Company's remediation efforts or the efforts of
those it does business with not be successful. If either the Company,
or the Company's vendors, fail to adequately address Year 2000-related
issues, the Company may suffer business interruptions. If such
interruptions cause the Company to be unable to fulfill its obligations
to third parties, the Company may potentially be exposed to third-party
liability.
<PAGE>
Contingency Planning
The Company is developing contingency measures to address the
possibility that it will not have fully addressed Year 2000-related
issues by December 31, 1999. Each of the Company's business units is
developing a contingency plan based upon templates and suggested
procedures that have been provided by the Year 2000 Risk Manager. Each
business unit contingency plan will identify the risk and document the
steps that need to be taken to allow the Company to continue to meet
the needs of its customers in the event of a Year 2000-related failure.
The Company expects each business unit to complete its contingency plan
by the end of the second quarter of 1999.
The above section, even if incorporated by reference into other
documents or disclosures, is a Year 2000 Readiness Disclosure as
defined under the Year 2000 Information and Readiness Disclosure Act of
1998.
RECENTLY ISSUED ACCOUNTING GUIDANCE
In June 1998, the Financial Accounting Standards Board (FASB) issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which the Company is required to adopt effective January
1, 2000. SFAS No. 133 will require the Company to recognize all
derivatives on the Consolidated Balance Sheet at fair value.
Additionally, changes in derivative fair values will either: (i) be
recognized in earnings as offsets to the changes in fair value of
related hedged assets, liabilities and firm commitments; or (ii) for
forecasted transactions, deferred and recorded as a component of
accumulated other comprehensive income in stockholders' equity until
the hedged transactions occur and then are recognized in earnings. The
ineffective portion of a derivative's change in fair value will be
immediately recognized in earnings. The Company does not believe the
effect of adopting SFAS No. 133 will be material to its results of
operations or financial position.
FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical fact, contained
within "Management's Discussion and Analysis of Financial Condition and
Results of Operations" constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
<PAGE>
Factors that could cause actual results to differ materially from those
expressed or implied by the forward-looking statements include, but are
not limited to, the following: general business and economic conditions
in the agricultural industry or in localities where the Company or its
customers operate; weather conditions; the impact of competitive
products; pressure on prices realized by the Company for its products;
constraints on supplies of raw materials used in manufacturing certain
of the Company's products; capacity constraints limiting the production
of certain products; difficulties or delays in the development,
production, testing and marketing of products; difficulties or delays
in receiving required governmental and regulatory approvals; market
acceptance issues, including the failure of products to generate
anticipated sales levels; difficulties in integrating acquired
businesses and in realizing related cost savings and other benefits;
the effects of and change in trade, monetary and fiscal policies, laws
and regulations; foreign exchange rates and fluctuations in those
rates; the costs and effects of legal proceedings, including
environmental, and administrative proceedings involving the Company;
the completion of the Company's Year 2000 Program; and the other risk
factors reported from time to time in the Company's Securities and
Exchange Commission reports.
<PAGE>
REPORT OF MANAGEMENT
- - -----------------------------------------------------------------------
Management of IMC Global Inc. is responsible for the preparation,
integrity and fair presentation of the financial information included
in this report. The financial statements have been prepared in
accordance with generally accepted accounting principles and
necessarily include certain amounts that are based on management's
estimates and judgment.
Management is responsible for maintaining a system of internal
accounting controls to provide reasonable assurance as to the integrity
and reliability of the financial statements, the proper safeguarding
and use of assets, and the accurate execution and recording of
transactions. Such controls are based on established policies and
procedures and are implemented by trained personnel. The system of
internal accounting controls is monitored by the Company's internal
auditors to confirm that the system is proper and operating
effectively. The Company's policies and procedures prescribe that the
Company and its subsidiaries are to maintain ethical standards and that
its business practices are to be consistent with those standards.
The Company's financial statements have been audited by Ernst & Young
LLP, independent auditors. Their audit was conducted in accordance
with generally accepted auditing standards and included consideration
of the Company's internal control system. Management has made
available to Ernst & Young LLP all of the Company's financial records
and related data, as well as minutes of the meetings of the Board of
Directors. Management believes that all representations made to Ernst
& Young LLP were valid and appropriate.
The Board of Directors, operating through its Audit Committee composed
entirely of non-employee directors, provides oversight to the financial
reporting process. The Audit Committee meets periodically with
management, the internal auditors and Ernst & Young LLP, jointly and
separately, to review financial reporting matters, internal accounting
controls and audit results to assure that all parties are properly
fulfilling their responsibilities. Both Ernst & Young LLP and the
internal auditors have unrestricted access to the Audit Committee.
J. Bradford James Anne M. Scavone
Senior Vice President and Vice President and
Chief Financial Officer Controller
<PAGE>
REPORT OF INDEPENDENT AUDITORS
- - -----------------------------------------------------------------------
To the Board of Directors and Stockholders of IMC Global Inc.
We have audited the accompanying consolidated balance sheet of IMC
Global Inc. as of December 31, 1998 and 1997 and the related
consolidated statements of operations, cash flows and stockholders'
equity for each of the three years in the period ended December 31,
1998. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of IMC Global Inc. at December 31, 1998 and 1997, and the
consolidated results of its operations and its cash flows for each of
the three years in the period ended December 31, 1998, in conformity
with generally accepted accounting principles.
Ernst & Young LLP
Chicago, Illinois
January 28, 1999
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF OPERATIONS
- - -----------------------------------------------------------------------
(In millions, except per share amounts)
<CAPTION>
Years ended December 31,
--------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Net sales $2,696.2 $2,116.0 $2,143.3
Cost of goods sold 1,957.8 1,541.1 1,547.0
-------- -------- --------
Gross margins 738.4 574.9 596.3
Selling, general and administrative
expenses 169.5 131.8 132.6
Main Pass write-down - 183.7 -
Merger and restructuring charges 176.1 - 37.3
Exploration expenses 20.9 - -
-------- -------- --------
Operating earnings 371.9 259.4 426.4
Interest expense 176.0 40.2 43.6
Other (income) expense, net 40.2 (5.4) (5.9)
-------- -------- --------
Earnings from continuing operations
before minority interest 155.7 224.6 388.7
Minority interest 14.1 124.4 185.7
-------- -------- --------
Earnings from continuing operations
before income taxes 141.6 100.2 203.0
Provision for income taxes 84.5 30.4 81.3
-------- -------- --------
Earnings from continuing operations 57.1 69.8 121.7
Discontinued operations:
Earnings from discontinued operations 5.1 18.0 13.5
Estimated loss on disposal (74.2) - -
-------- -------- --------
Total earnings (loss) from
discontinued operations (69.1) 18.0 13.5
Earnings (loss) before
extraordinary item (12.0) 87.8 135.2
Extraordinary item - debt retirement 3.0 (24.9) (8.1)
-------- -------- --------
Net earnings (loss) $ (9.0) $ 62.9 $ 127.1
======== ======== ========
<PAGE>
Basic earnings (loss) per share:
Earnings from continuing operations $ 0.50 $ 0.74 $ 1.31
Total earnings (loss) from
discontinued operations (0.61) 0.19 0.15
Extraordinary item - debt retirement 0.03 (0.26) (0.09)
-------- -------- --------
Net earnings (loss) per share $ (0.08) $ 0.67 $ 1.37
======== ======== ========
Basic weighted average number of
shares outstanding 114.2 94.0 92.7
Diluted earnings (loss) per share:
Earnings from continuing operations $ 0.50 $ 0.74 $ 1.25
Total earnings (loss) from
discontinued operations (0.61) 0.19 0.14
Extraordinary item - debt retirement 0.03 (0.26) (0.08)
------- -------- --------
Net earnings (loss) per share $ (0.08) $ 0.67 $ 1.31
======== ======== ========
Diluted weighted average number of
shares outstanding 114.8 94.7 97.0
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEET
- - ---------------------------------------------------------------------
(In millions, except per share amounts)
<CAPTION>
As of December 31,
ASSETS 1998 1997
- - ---------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 110.6 $ 109.7
Receivables, net 421.5 288.1
Inventories, net 580.6 592.8
Assets of discontinued operations
held for sale 273.3 -
Deferred income taxes 91.1 54.2
Other current assets 5.5 17.4
-------- --------
Total current assets 1,482.6 1,062.2
Property, plant and equipment, net 3,697.4 2,506.0
Other assets 1,276.9 1,105.7
-------- --------
Total assets $6,456.9 $4,673.9
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ---------------------------------------------------------------------
Current liabilities:
Accounts payable $ 255.9 $ 253.3
Accrued liabilities 240.9 230.9
Short-term debt and current maturities
of long-term debt 408.3 188.9
-------- --------
Total current liabilities 905.1 673.1
Long-term debt, less current maturities 2,638.7 1,235.2
Deferred income taxes 566.6 389.7
Other noncurrent liabilities 486.1 440.2
<PAGE>
Stockholders' equity:
Common stock, $1 par value, authorized
300,000,000 shares; issued 125,072,811
and 124,668,286 shares in 1998 and 1997,
respectively 125.0 124.6
Capital in excess of par value 1,697.3 1,690.3
Retained earnings 400.6 446.2
Accumulated other comprehensive income (66.3) (30.8)
Treasury stock, at cost, 10,738,520 and
10,691,520 shares in 1998 and 1997,
respectively (296.2) (294.6)
-------- --------
Total stockholders' equity 1,860.4 1,935.7
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,456.9 $4,673.9
======== ========
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
- - ---------------------------------------------------------------------
(In millions)
<CAPTION>
Years ended December 31,
1998 1997 1996
- - ---------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings (loss) $ (9.0) $ 62.9 $ 127.1
Adjustments to reconcile net earnings
(loss) to net cash provided by
operating activities:
Depreciation, depletion and amortization 251.7 183.2 171.0
Merger and restructuring charges 144.0 - 67.3
Estimated loss on disposal of
discontinued operations 74.2 - -
Estimated loss on sale of business 48.7 - -
Minority interest 14.1 124.4 175.7
Main Pass write-down - 112.2 -
Deferred income taxes 2.9 58.4 27.9
Other charges and credits, net (38.4) 2.4 (26.3)
Changes in:
Receivables (18.2) (12.3) 69.1
Inventories (81.4) 3.9 (66.9)
Other current assets (9.4) 2.1 18.9
Accounts payable (64.9) (2.8) (21.8)
Accrued liabilities (79.8) 29.0 (55.3)
Net current assets of discontinued
operations 34.6 - -
-------- -------- --------
Net cash provided by operating activities 269.1 563.4 486.7
-------- -------- --------
Cash Flows from Investing Activities:
Capital expenditures (367.6) (244.0) (209.0)
Acquisitions, net of cash acquired (393.3) (91.4) (7.1)
Proceeds from sale of business 44.8 - -
Proceeds from sale of property, plant
and equipment 6.4 8.8 12.4
-------- -------- --------
Net cash used in investing activities (709.7) (326.6) (203.7)
-------- -------- --------
Net cash provided (used) before
financing activities (440.6) 236.8 283.0
-------- -------- --------
<PAGE>
Cash Flows from Financing Activities:
Cash distributions to the unitholders
of PLP (11.0) - -
Cash distributions from IMC-Agrico to PLP - (146.4) (265.8)
Payments of long-term debt (1,303.1) (515.9) (232.7)
Proceeds from issuance of long-term
debt, net 2,370.2 805.3 244.6
Changes in short-term debt, net (522.3) (127.7) (75.4)
Increase (decrease) in securitization
of accounts receivable, net (61.5) 6.0 (9.5)
Stock options exercised and restricted
stock awards 8.9 5.5 18.0
Cash dividends paid (36.6) (29.7) (34.5)
Purchase of treasury stock (3.1) (187.5) -
-------- -------- --------
Net cash provided by (used in)
financing activities 441.5 (190.4) (355.3)
-------- -------- --------
Net change in cash and cash equivalents 0.9 46.4 (72.3)
Cash and cash equivalents -
beginning of year 109.7 63.3 135.6
-------- -------- --------
Cash and cash equivalents - end of year $ 110.6 $ 109.7 $ 63.3
======== ======== ========
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
- - ---------------------------------------------------------------------
(In millions, except per share amounts)
<CAPTION>
Capital in Accumulated
Excess Other Total
Common of Retained Comprehensive Treasury Stockholders'
Stock Par Value Earnings Income Stock Equity
- - ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at
December 31,1995 $ 96.9 $ 793.6 $315.8 $ (8.5) $(107.4) $1,090.4
Net earnings - - 127.1 - - 127.1
Foreign currency
translation adjustment - - - (8.7) - (8.7)
--------
Comprehensive income - - - - - 118.4
Dividends ($0.32 per share) - - (29.9) - - (29.9)
Stock options exercised 0.7 17.2 - - 0.1 18.0
Issuance of common stock
pursuant to acquisitions 0.4 14.5 - - - 14.9
Conversion of convertible
notes 3.6 110.8 - - - 114.4
------ ------- ------ ------ ------- --------
Balance at
December 31,1996 $101.6 $ 936.1 $413.0 $(17.2) $(107.3) $1,326.2
Net earnings - - 62.9 - - 62.9
Foreign currency
translation adjustment - - - (13.6) - (13.6)
--------
Comprehensive income - - - - - 49.3
Dividends ($0.32 per
share) - - (29.7) - - (29.7)
Stock options exercised 0.3 5.2 - - - 5.5
Issuance of common stock
pursuant to acquisitions 22.7 749.0 - - 0.2 771.9
Purchase of treasury
shares - - - - (187.5) (187.5)
------ ------- ------ ------ ------- --------
<PAGE>
Balance at
December 31,1997 $124.6 $1,690.3 $446.2 $(30.8) $(294.6) $1,935.7
Net loss - - (9.0) - - (9.0)
Foreign currency
translation adjustment - - - (35.5) - (35.5)
--------
Comprehensive loss - - - - - (44.5)
Dividends ($0.32 per
share) - - (36.6) - - (36.6)
Stock options exercised
and restricted
stock awards 0.4 7.0 - - 1.5 8.9
Purchase of treasury
shares - - - - (3.1) (3.1)
------ ------- ------ ------ ------- --------
Balance at
December 31,1998 $125.0 $1,697.3 $400.6 $(66.3) $(296.2) $1,860.4
====== ======== ====== ====== ======= ========
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share amounts)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements include the accounts of the
Company and all subsidiaries which are more than 50.0 percent owned
and controlled. Additionally, its interest in the Exploration
Program is proportionately consolidated by PLP at a rate of 56.4
percent of the exploration costs and 47.0 percent of the profits
derived from oil and gas producing properties. Prior to its
disposal in 1997, the Company proportionately consolidated its 25.0
percent interest in the sulphur operations of Main Pass. All
significant intercompany accounts and transactions are eliminated
in consolidation. Certain amounts in the consolidated financial
statements for periods prior to December 31, 1998 have been
reclassified to conform to the current presentation.
As discussed in more detail in Note 4, the IMC AgriBusiness
business unit has been presented as discontinued operations.
Use of Estimates
Management is required to make estimates and assumptions that
affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates.
Revenue Recognition
Revenue is recognized by the Company upon the transfer of title to
the customer, which is generally at the time product is shipped.
Cash Equivalents
The Company considers all highly liquid investments with an
original maturity of three months or less to be cash equivalents
which are reflected at their approximate fair value.
Concentration of Credit Risk
Domestically, the Company sells its products to manufacturers,
distributors and retailers primarily in the midwestern and
southeastern United States and to governmental bodies such as
states, provinces, counties and municipalities located in the Great
Lakes region of the United States and Canada. Internationally, the
Company's products are sold primarily through two North American
export associations and various distributors. In 1998, sales to
<PAGE>
China accounted for approximately 15.0 percent of the Company's net
sales. No single customer or group of affiliated customers
accounted for more than ten percent of the Company's net sales.
Inventories
Inventories are valued at the lower-of-cost-or-market (net
realizable value). Cost for substantially all of the Company's
inventories is calculated on a cumulative annual-average cost
basis.
Property, Plant and Equipment/Other Assets
Property (including mineral deposits), plant and equipment,
including assets under capital leases, are carried at cost. Cost
of significant assets includes capitalized interest incurred during
the construction and development period. Expenditures for
replacements and improvements are capitalized; maintenance and
repair expenditures, except for repair and maintenance overhauls
(Turnarounds), are charged to operations when incurred.
Expenditures for Turnarounds are deferred when incurred and
amortized into cost of goods sold on a straight-line basis,
generally over an 18-month period. Turnarounds are large-scale
maintenance projects that are performed regularly, usually every 18
to 24 months, on average. Turnarounds are necessary to maintain
the operating capacity and efficiency rates of the production
plants. The deferred portion of the Turnaround expenditures is
classified in Other assets in the Company's Consolidated Balance
Sheet.
Depreciation and depletion expenses for mining operations,
including mineral deposits, are determined using the
unit-of-production method based on estimates of recoverable
reserves. Other asset classes or groups are depreciated or
amortized on a straight-line basis over their estimated useful
lives as follows: buildings, ten to 45 years; machinery and
equipment, three to 25 years; and leasehold improvements, over the
lesser of the remaining useful life of the asset or the remaining
term of the lease.
Goodwill, representing the excess of purchase cost over the fair
value of net assets of acquired companies, is generally amortized
using the straight-line method over 40 years. At December 31, 1998
and 1997, goodwill, included in Other assets in the Consolidated
Balance Sheet, totaled $1,064.2 million and $839.7 million,
respectively. See Note 2, "Acquisitions," for detail regarding
goodwill.
<PAGE>
Using the methodology prescribed in SFAS No. 121, the Company
reviews long-lived assets and the related intangible assets for
impairment whenever events or changes in circumstances indicate the
carrying amounts of such assets may not be recoverable. Once
evidence of a potential impairment exists, recoverability of the
respective assets is determined by comparing the forecasted
undiscounted net cash flows of the operation to which the assets
relate, to the carrying amount, including associated intangible
assets, of such operation. If the operation is determined to be
unable to recover the carrying amount of its assets, then
intangible assets are written down first, followed by the other
long-lived assets of the operation, to fair value. Fair value is
determined based on discounted cash flows or appraised values,
depending upon the nature of the assets.
Accrued Environmental Costs
As a producer and distributor of crop nutrients and salt, the
Company is subject to a myriad of international, federal, state,
provincial and local EHS laws in the United States, Canada, and
Europe. These standards regulate: (i) the content and use of
products; (ii) the conduct of mining and production operations
including employee safety procedures; (iii) the management and
handling of raw materials; (iv) air and water quality; (v) disposal
of hazardous and solid wastes; and (v) post-mining land
reclamation. Compliance with these laws often requires the Company
to incur costs. The Company also has incurred contingent
environmental liability arising from three sources: facilities
currently or formerly owned by the Company or its predecessors;
facilities adjacent to currently or formerly owned facilities; and
third-party Superfund sites. At facilities currently or formerly
owned by the Company or its corporate predecessors, including FTX,
PLP and their corporate predecessors, the historical use and
handling of regulated chemical substances, crop nutrient products,
and salt has resulted in soil and groundwater contamination,
sometimes requiring the Company to undertake or fund cleanup
efforts. Similarly, disposal of the Company's waste at third-party
sites may result in liability for remedial costs.
Of the environmental costs discussed above, the following
environmental costs are charged to the Company's operating expense:
fines, penalties, and certain remedial action to address violations
of the law; remediation of properties that are currently or were
formerly owned or operated by the Company, when those properties do
not contribute to current or future revenue generation; and
liability for remediation of facilities adjacent to currently or
<PAGE>
formerly owned facilities or for third-party Superfund sites.
Contingent environmental liabilities are recorded for environmental
investigatory and non-capital remediation costs at identified sites
when litigation has commenced or a claim or assessment has been
asserted or is probable and the likelihood of an unfavorable
outcome is probable.
Derivatives
The Company is exposed to the impact of interest rate changes,
fluctuations in the functional currency of foreign operations, and
the impact of fluctuations in the purchase price of natural gas
consumed in operations, as well as changes in the market value of
its financial instruments. The Company periodically enters into
derivatives in order to minimize these risks, but not for trading
purposes.
The functional currency of all operations outside the United States
is the respective local currency. Foreign currency translation
effects are included in Accumulated other comprehensive income in
stockholders' equity. The Company uses foreign currency forward
exchange contracts, which typically expire within one year, to
hedge transaction exposure related to United States
dollar-denominated assets and liabilities. Realized gains and
losses on these contracts are recognized in the same period as the
hedged transaction. The Company had foreign currency forward
exchange contracts outstanding as of December 31, 1998 and 1997
with notional amounts of $106.2 million and $183.8 million,
respectively, which approximated fair value.
Comprehensive Income
In 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income." This Statement establishes rules for the reporting of
comprehensive income and its components. Comprehensive income
consists of net income and foreign currency translation effects and
is presented in the Consolidated Statement of Stockholders' Equity.
The adoption of SFAS No. 130 had no impact on total stockholders'
equity. Prior year financial statements have been reclassified to
conform to the SFAS No. 130 requirements. As of December 31, 1998,
the Company's Accumulated other comprehensive income reduced
stockholders' equity by $66.3 million.
<PAGE>
Recently Issued Accounting Guidance
In June 1998, the FASB issued SFAS No. 133 which the Company
is required to adopt effective January 1, 2000. SFAS No. 133 will
require the Company to recognize all derivatives on the
Consolidated Balance Sheet at fair value. Additionally, changes in
derivative fair values will either: (i) be recognized in earnings
as offsets to the changes in fair value of related hedged assets,
liabilities and firm commitments; or (ii) for forecasted
transactions, deferred and recorded as a component of Accumulated
other comprehensive income in stockholders' equity until the hedged
transactions occur and are then recognized in earnings. The
ineffective portion of a derivative's change in fair value will be
immediately recognized in earnings. The Company does not believe
the effect of adopting SFAS No. 133 will be material to its results
of operations or financial position.
2. ACQUISITIONS
Harris
In April 1998, the Company completed the acquisition of Harris for
approximately $1.4 billion. Under the terms of the Harris
Acquisition, the Company purchased all Harris equity for
approximately $450.0 million in cash and assumed approximately $1.0
billion of debt. Harris, with annual sales of approximately $800.0
million, is a leading producer of salt, soda ash, boron chemicals
and other inorganic chemicals, including potash crop nutrients.
For financial statement purposes, the Harris Acquisition was
accounted for as a purchase and, accordingly, Harris' results are
included in the consolidated financial statements since the date of
acquisition. The purchase price, which was initially financed
through proceeds borrowed under credit facilities and assumed debt,
has been preliminarily allocated to acquired assets and liabilities
based on estimated fair values at the date of acquisition. This
allocation resulted in an excess of purchase price over
identifiable net assets acquired, or goodwill, of approximately
$326.0 million which is included in Other assets in the
Consolidated Balance Sheet. This goodwill is being amortized on a
straight-line basis over 40 years.
<PAGE>
FTX
In December 1997, the Company completed a merger with
FTX. The combination was accounted for as a purchase and resulted
in the dissolution of FTX. In connection with the FTX Merger, each
share of common stock of FTX was exchanged for 0.90 share of the
Company's common stock plus one-third of a warrant, with each whole
warrant entitling the holder to purchase one share of the Company's
common stock for $44.50 per share. As a result of the transaction,
22.7 million shares were issued at an average market price of
$32.28 per share. The warrants, which are publicly traded on the
New York Stock Exchange and expire on the third anniversary of the
FTX Merger, were valued at $3.56 per warrant. As a result of the
FTX Merger, goodwill of $747.5 million was recorded and is being
amortized on a straight-line basis over 40 years.
The FTX Merger resulted in the Company relinquishing its 25.0
percent interest in Main Pass to MMR, a newly formed public entity
consisting of the former sulphur business of PLP and Main Pass.
In connection with the FTX Merger, the Company recorded a charge of
pre-tax $183.7 million, included in Operating earnings in the
Consolidated Statement of Operations, to write down the assets of
Main Pass to their fair value of approximately $14.1 million.
Other Business Acquisitions
In 1997, the Company completed several smaller acquisitions,
including a potash mine and processing facility (Western
Ag); several retail distribution operations (Frankfort Supply,
Sanderlin, Crop-Maker, So-Green and Hutson Ag Services, Inc.); a
storage terminal company (Hutson Company, Inc.); and the purchase
of the preferred stock of a subsidiary held by an unrelated third
party. Total cash payments for these acquisitions were $91.4
million, and approximately 0.2 million shares of common stock of
the Company were issued for $7.9 million. In 1996, the Company
acquired several retail distribution operations (Madison Seed and
Agri-Supply) and a precision farming operation (Top-Soil). Total
cash payments for acquisitions during the year were $7.1 million.
Hutson Company, Inc., Top-Soil and the retail distribution
operations were acquired by the IMC AgriBusiness business unit
which has been classified as discontinued operations as of December
31, 1998.
These acquisitions were accounted for under the purchase method of
accounting, and, accordingly, results of operations for the
acquired businesses have been included in the Company's
Consolidated Statement of Operations since the respective dates of
acquisition.
<PAGE>
Pro Forma Information (unaudited)
The unaudited pro forma information for the periods set forth below
gives effect to the Harris Acquisition and the FTX Merger,
including the contribution of Main Pass, as if the transactions had
occurred as of January 1, 1997. Pro forma information for the
Other Business Acquisitions, discussed above, has not been included
as it would not be materially different from reported amounts. The
pro forma information is presented for informational purposes only
and is not necessarily indicative of the results of operations that
actually would have been achieved had the acquisitions been
consummated as of that time.
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net sales $2,923.4 $2,910.2
Earnings from continuing operations
before minority interest 160.1 48.7
Earnings from continuing operations
before income taxes 146.0 22.9
Earnings (loss) from continuing operations 63.8 (8.0)
Net loss (4.8) (14.9)
Net loss per diluted share (0.04) (0.13)
</TABLE>
There was no common stock issued for acquisitions in 1998 while
$771.9 million and $14.9 million of common stock were issued in
1997 and 1996, respectively. Liabilities assumed in acquisitions
were $1,628.8 million, $357.5 million and $6.6 million in 1998,
1997 and 1996, respectively.
3. NON-RECURRING CHARGES
Restructuring Plan
During the fourth quarter of 1998, the Company developed and began
execution of a plan to improve profitability. The Restructuring
Plan was comprised of four major initiatives: (i) the combination
of the potash and phosphates business units in an effort to realize
certain operating and staff function synergies; (ii) restructuring
of the phosphate rock mining, concentrated phosphate and salt
<PAGE>
production/distribution operations and processes in an effort to
reduce costs; (iii) simplification of the current business
activities by eliminating businesses not deemed part of the
Company's core competencies; and (iv) reduction of operational and
corporate headcount. In conjunction with the Restructuring Plan,
the Company recorded pre-tax charges totaling $193.3 million
($162.0 million net of minority interest) in the fourth quarter of
1998. The Restructuring Plan (shown below in tabular format)
primarily relates to the following:
Asset impairments
The Restructuring Plan included the removal of property, plant and
equipment, as well as the write-down to fair value of those assets
made obsolete due to the decision to close certain facilities and
forego or abandon certain mineral properties. In order to
determine the write-down of assets affected by the Restructuring
Plan, in accordance with SFAS No. 121, the Company performed an
assessment of future cash flows and, accordingly, adjusted the
assets to their appropriate fair values.
The majority of the impairment occurred at Phosphates' Florida
production facilities where property, plant and equipment was
written down by approximately $64.4 million to fair value.
Phosphates developed a Mine Plan which identified asset reductions,
lower operating costs and optimal phosphate rock management as key
drivers in the restructuring of operations. The write-down of
impaired assets in connection with the Mine Plan primarily
consisted of facilities, production equipment, operating supplies,
land and mineral reserves.
Salt recorded an $11.2 million write-down of property, plant
and equipment at its Kansas and Canadian locations, as a result of
the decision to consolidate certain facilities and achieve
operating efficiencies. The majority of the write-down related to
production equipment. The remaining $0.4 million of asset
impairments was recorded at Feed Ingredients for the permanent
closure of a limestone rock production facility.
The $76.0 million in asset impairment charges included $31.8
million pertaining to assets which will continue to be utilized
until their respective disposal dates, primarily within the first
nine months of 1999. The estimated fair value of these assets,
which will be depreciated over their respective remaining periods
of service, reflected estimated operating net cash flows until
disposition.
<PAGE>
Non-employee exit costs
In accordance with the objective of the Mine Plan to optimize
phosphate rock management, Phosphates shut-down a high-cost
phosphate rock mine. As a result of this shut-down, the Company
recorded a charge of $18.4 million for the demolition and other
incremental costs of closure of the mine. The closure costs
included approximately $15.5 million for incremental environmental
land reclamation of the surrounding mined-out areas. The Company
expects the demolition and closure activities to be essentially
completed by the end of the third quarter of 1999.
The Company also decided to close certain production operations in
connection with the Restructuring Plan, principally the uranium and
urea operations of Phosphates. This decision was based on an
analysis of the future outlook for these products, taking into
consideration whether the operations were part of the Company's
core businesses. These operations were determined to be non-core
businesses and the Company recorded charges of approximately $12.8
million for demolition and closure, including environmental costs,
of the uranium and urea production facilities. Additionally,
environmental and closure costs of $2.4 million have been
recognized for the planned closure of one of the Company's
evaporated salt production facilities. The Company expects the
demolition and closure activities to be completed by late-1999.
Other various exit costs totaled $7.3 million.
In connection with the Restructuring Plan, the Company decided to
discontinue its transportation of ammonia from Louisiana to its
phosphate operations in Florida. This decision was based on
current market conditions which secured the availability of ammonia
to the Company and which made the high-cost transportation of
ammonia from Louisiana to Florida unnecessary. As a result,
the Company recorded a charge of $13.2 million for the net present
value of costs associated with permanently idling leased equipment
used in the transportation of ammonia from Louisiana.
<PAGE>
Employee headcount reductions
As part of the Restructuring Plan, headcount reductions were
implemented at the Phosphates, Feed Ingredients, Salt and
Kalium operations, as well as at the Company's corporate
headquarters. Certain of these reductions were a result of the
closing and/or exiting of production operations, as discussed
above. To facilitate headcount reductions, the Company offered a
voluntary retirement program for eligible employees. In addition,
certain involuntary eliminations of positions, which were
communicated prior to December 31, 1998, were necessary in order to
achieve desired staffing levels. A total of 185 employees accepted
the voluntary retirement plan by December 31, 1998, with 112 of
those employees having left the Company as of that date. The
remaining voluntarily terminated employees will leave the Company
by June 1999. Additionally, a total of 454 employees were
involuntarily terminated and had left the Company by the end of
February 1999. Virtually all severance payments were disbursed
subsequent to December 31, 1998.
As a result of the employee terminations necessitated by the
Restructuring Plan, settlement, curtailment and special termination
charges of $19.7 million were recorded in accordance with SFAS No.
88. The related liabilities have been classified in Other
noncurrent liabilities in the Company's Consolidated Balance Sheet.
See Note 15, "Pension Plans and Other Benefits," of Notes to
Consolidated Financial Statements.
Inventories and spare parts of exited businesses
Phosphates recorded charges of approximately $17.2 million to
reduce the carrying value of finished goods inventories on-hand to
net realizable value at December 31, 1998, as a result of the
decision to exit certain businesses.
The Restructuring Plan included a major reduction in production
assets primarily used in the Phosphates business. The reduction
was accomplished through the permanent shut-down of select mining
facilities as well as a cut-back in concentrate facilities. Given
the reduction in facilities and the resulting decrease in
production, historical levels of spare parts inventory that had
been maintained by the Company were no longer necessary or
warranted. Therefore, the Company recorded a charge of $8.7
million for the write-off of spare parts inventory.
<PAGE>
Details of the restructuring charges were as follows:
<TABLE>
(In millions)
<CAPTION>
Activity
-------------------
Restructuring Remaining
Charges Cash Paid Non-cash Accrual
------- --------- -------- -------
<S> <C> <C> <C> <C>
Asset impairments:
Facilities closed prior
to December 31, 1998 $ 44.2 $ - $ 44.2 $ -
Facilities to be closed
in 1999 31.8 - 31.8 -
Non-employee exit costs:
Demolition and closure
costs 33.6 - - 33.6
Idled leased transportation
equipment 13.2 - - 13.2
Other 7.3 0.5 1.5 5.3
Employee headcount reductions:
Severance benefits 17.6 0.2 - 17.4
Settlement, curtailment and
special termination
benefits 19.7 - 19.7 -
Inventories and spare parts
of exited businesses:
Finished goods inventories 17.2 - 17.2 -
Spare parts inventories 8.7 - 8.7 -
------- ------ ------- ------
Total $ 193.3 $ 0.7 $ 123.1 $ 69.5
======= ====== ======= ======
</TABLE>
All restructuring charges have been recorded as a separate line
item on the Consolidated Statement of Operations, except for the
finished goods inventory write-down which was recorded in Cost of
goods sold.
<PAGE>
Vigoro Merger
In March 1996, the Company completed a merger with Vigoro
that resulted in Vigoro becoming a subsidiary of the Company. Upon
consummation of the Vigoro Merger, the Company issued approximately
32.4 million shares of its common stock in exchange for all of the
outstanding shares of Vigoro. The Vigoro Merger was structured to
qualify as a tax-free reorganization for income tax purposes and
was accounted for as a pooling of interests. Accordingly, the
Company's financial statements for periods prior to the merger date
have been restated to reflect the Vigoro Merger.
In connection with the Vigoro Merger, the Company recorded charges
totaling $20.2 million, primarily for consulting, legal and
accounting services. Immediately following the Vigoro Merger, the
Company adopted a plan to restructure its business operations into
a decentralized organizational structure with five stand-alone
business units. As a result, the Company recorded restructuring
charges totaling $23.1 million. Of these amounts, $6.0 million has
been included in discontinued operations. The charges consisted
of $6.5 million for lease terminations resulting from office
consolidations and $16.6 million for severance and related
benefits from staff reductions resulting from the termination of
approximately 120 employees, primarily middle management personnel,
and other related actions. As of December 31, 1998, the following
amounts were paid: (i) $20.2 million for charges relating to the
Vigoro Merger; (ii) $6.4 million for lease terminations resulting
from office consolidations; and (iii) $16.6 million relating to the
termination of approximately 120 employees and other actions.
In connection with the 1996 restructuring plan, the Company
undertook a detailed review of its accounting records and valuation
of various assets and liabilities. As a result, the Company
recorded charges totaling $58.3 million ($55.3 million net of
minority interest) comprised of: (i) $26.3 million ($23.3 million
net of minority interest) to Cost of goods sold of which $17.5
million was primarily related to the write-off of certain idle
plant facilities and other obsolete assets, $5.0 million for
environmental matters and $3.8 million for other matters; (ii) $2.4
million of general and administrative expenses for the write-off of
miscellaneous assets; (iii) $16.6 million to Other income and
expense, net, to reduce certain long-term assets to net realizable
value and other provisions; and (iv) $13.0 million to Minority
interest for the transfer of 0.85 percent interest of IMC-Agrico
<PAGE>
Distributable Cash, as defined in the IMC-Agrico Company
Partnership Agreement, from the Company to PLP. Of these amounts
$7.7 million has been included in discontinued operations. As of
December 31, 1998, $14.7 million has been paid and $31.1 million of
non-cash write-offs were recorded.
4. DISCONTINUED OPERATIONS
In January 1999, the Company signed a definitive agreement to sell
its AgriBusiness retail and wholesale distribution business
unit. The Company anticipates the sale to be completed in the
first quarter of 1999. The loss on disposal, net of income tax
benefits of $21.1 million, is estimated to be $74.2 million and was
recorded in the fourth quarter of 1998 in accordance with
Accounting Principles Board (APB) Opinion No. 30, "Reporting the
Results of Operations." The Consolidated Statement of Operations
of the Company has been restated to report separately the operating
results of AgriBusiness as discontinued operations. Interest
expense has been allocated to discontinued operations based on the
portion of the Company's short-term borrowing program that is
specifically attributable to AgriBusiness and amounted to $13.2
million, $13.3 million and $13.1 million in 1998, 1997 and 1996,
respectively.
Income taxes associated with the discontinued operations of
AgriBusiness were $2.9 million, $13.1 million and $8.4 million for
1998, 1997 and 1996, respectively. For 1998, 1997 and 1996,
AgriBusiness' revenues were $787.0 million, $872.6 million and
$797.7 million, respectively.
<PAGE>
For financial reporting purposes, the assets and liabilities of
AgriBusiness, to be sold, net of the estimated loss on disposal,
have been classified in the Consolidated Balance Sheet as Assets
of discontinued operations held for sale as of December 31, 1998,
as follows:
<TABLE>
<CAPTION>
<S> <C>
Assets:
Accounts receivable $ 63.7
Inventories 157.1
Other current assets 0.5
Property, plant and equipment, net 130.4
Other assets 6.0
--------
Total assets 357.7
Liabilities:
Accounts payable 69.8
Accrued liabilities 11.1
Other noncurrent liabilities 3.5
--------
Total liabilities 84.4
--------
Assets of discontinued operations held for sale $ 273.3
========
</TABLE>
5. OTHER DIVESTITURES
IMC Vigoro
In June 1998, the Company completed the sale of its IMC Vigoro
business unit which consisted primarily of consumer lawn and garden
and professional products for $44.8 million in cash. In connection
with this transaction, the Company recorded a non-recurring charge
of approximately $14.0 million, $9.1 million after tax benefits, or
$0.08 per share. Of the $14.0 million charge, $4.1 million was
included in Cost of goods sold and $9.9 million was included in
Selling, general and administrative expenses in the Consolidated
Statement of Operations.
<PAGE>
IMC Chemicals
In December 1998, the Company signed a definitive agreement to sell
its Chemicals business unit with the Company retaining an
ongoing minority economic interest. The sale is anticipated to
close in the first quarter of 1999. Based on the terms of the sale
agreement, the Company recorded a pretax charge of $44.1 million
for the estimated loss on sale. This charge is included in Other
income and expense, net in the Consolidated Statement of
Operations.
Chemicals was established concurrent with the Harris Acquisition
(see Note 2, "Acquisitions") in April 1998. Net sales and
operating earnings for Chemicals since the date of acquisition
were $311.8 million and $21.9 million, respectively.
6. MINORITY INTEREST
Minority interest as included in the Consolidated Statement of
Operations was $14.1 million, $124.4 million, and $185.7 million
for 1998, 1997 and 1996, respectively. Prior to the FTX Merger,
minority interest primarily consisted of PLP's 43.5 percent
interest in IMC-Agrico. Subsequent to the FTX Merger, minority
interest was largely comprised of the public unitholder interest in
PLP (majority owned and consolidated by the Company since the FTX
Merger), including an effective 21.1 percent minority interest in
IMC-Agrico.
7. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Basic earnings (loss) per share computation:
Earnings from continuing operations $ 57.1 $ 69.8 $121.7
Total earnings (loss) from
discontinued operations (69.1) 18.0 13.5
Extraordinary item - debt retirement 3.0 (24.9) (8.1)
------ ------ ------
Net earnings (loss) $ (9.0) $ 62.9 $127.1
====== ====== ======
Basic weighted average common shares
outstanding 114.2 94.0 92.
<PAGE>
Basic per share amounts:
Earnings per share from continuing
operations $ 0.50 $ 0.74 $ 1.31
Total earnings (loss) from discontinued
operations (0.61) 0.19 0.15
Extraordinary item - debt retirement 0.03 (0.26) (0.09)
------ ------ ------
Net earnings (loss) per share $(0.08) $ 0.67 $ 1.37
====== ====== ======
Diluted earnings (loss) per share computation:
Earnings from continuing operations $ 57.1 $ 69.8 $121.7
Total earnings (loss) from discontinued
operations (69.1) 18.0 13.5
Extraordinary item - debt retirement 3.0 (24.9) (8.1)
------ ------ ------
Net earnings (loss) $ (9.0) $ 62.9 $127.1
====== ====== ======
Basic weighted average common shares
outstanding 114.2 94.0 92.7
Unexercised stock options 0.6 0.7 1.1
Convertible debt - - 3.2
------ ------ ------
Diluted weighted average common
shares outstanding 114.8 94.7 97.0
====== ====== ======
Diluted per share amounts:
Earnings per share from continuing
operations $ 0.50 $ 0.74 $ 1.25
Total earnings (loss) from discontinued
operations (0.61) 0.19 0.14
Extraordinary item - debt retirement 0.03 (0.26) (0.08)
------ ------ ------
Net earnings (loss) per share $(0.08) $ 0.67 $ 1.31
====== ====== ======
</TABLE>
Options to purchase approximately 4.6 million, 3.1 million and 0.8
million shares of common stock were outstanding at December 31,
1998, 1997 and 1996, respectively, but were not included in the
computation of diluted earnings per share because the exercise
price was greater than the average market price of the common
shares and, therefore, the effect would be antidilutive.
<PAGE>
Additionally, warrants to purchase approximately 8.4 million shares
of common stock were outstanding at December 31, 1998 and 1997 but
were not included in the computation of diluted earnings per share
for the same reason as the options noted above. See Note 2,
"Acquisitions."
8. RECEIVABLES
Accounts receivable as of December 31 were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Trade $ 349.4 $ 270.8
Non-trade 78.5 53.8
------- -------
427.9 324.6
Less:
Allowances 6.4 7.5
Receivable interests sold - 29.0
------- -------
Receivables, net $ 421.5 $ 288.1
======= =======
</TABLE>
The carrying value of accounts receivable was equal to the
estimated fair value of such assets due to their short maturity.
Under an agreement with a financial institution, IMC-Agrico L.L.C.,
a special-purpose limited liability company of which IMC-Agrico is
the sole equity owner, had transferred, on an ongoing basis, an
undivided percentage interest in a designated pool of receivables,
subject to limited recourse provisions related to the receivables
generated from export transactions, in an amount not to exceed
$65.0 million. This agreement expired in August 1998. As of
December 31, 1997, IMC-Agrico L.L.C. had transferred a total of
$61.5 million of such receivable interests, of which $32.5 million
did not meet the criteria to be accounted for as a sale under SFAS
No. 125, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities." As a result, short-
term debt of $32.5 million was recorded in the Consolidated Balance
Sheet as of December 31, 1997. Related costs, primarily from
discount fees, totaled $2.0 million, $3.3 million and $3.6 million
in 1998, 1997 and 1996, respectively.
<PAGE>
9. INVENTORIES
Inventories as of December 31 were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Products (principally finished) $ 468.2 $ 499.7
Operating materials and supplies 136.3 109.9
------- -------
604.5 609.6
Less: Inventory allowances 23.9 16.8
------- -------
Inventories, net $ 580.6 $ 592.8
======= =======
</TABLE>
10. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31 were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Land $ 104.6 $ 121.3
Mineral properties and rights 1,431.7 713.4
Buildings and leasehold improvements 615.9 481.2
Machinery and equipment 3,520.8 2,958.0
Construction-in-progress 244.4 188.2
-------- --------
5,917.4 4,462.1
Accumulated depreciation and depletion (2,220.0) (1,956.1)
-------- --------
Property, plant and equipment, net $3,697.4 $2,506.0
======== ========
</TABLE>
<PAGE>
The increase in Property, plant and equipment was a result of the
Harris Acquisition. See Note 2, "Acquisitions." As of December
31, 1998, idle facilities of the Company included one phosphate
rock mine and two concentrated phosphate plants, all of which will
remain closed subject to improved market conditions. The net book
value of these facilities totaled $72.1 million. In the opinion of
management, the net book value of the Company's idle facilities is
not in excess of net realizable value. Subsequent to December 31,
1998, the Company idled a second phosphate rock mine and resumed
production at a concentrated phosphate plant.
11. OTHER ASSETS
Other assets as of December 31 were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Goodwill $ 1,064.2 $ 839.7
Other 212.7 266.0
--------- ---------
Other assets $ 1,276.9 $ 1,105.7
========= =========
</TABLE>
The increase in Other assets was primarily due to the goodwill
recorded in conjunction for the Harris Acquisition. See Note 2,
"Acquisitions."
12. ACCRUED LIABILITIES
Accrued liabilities as of December 31 were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Salaries, wages and bonuses $ 62.5 $ 35.3
Interest 47.1 14.4
Restructuring 36.7 13.0
Legal reserve - 40.8
Other 94.6 127.4
------- -------
Accrued liabilities $ 240.9 $ 230.9
======= =======
</TABLE>
<PAGE>
The decrease in the legal reserve in 1998 relates to the payment of
previously settled litigation matters. See Note 3, "Non-Recurring
Charges," for detail relating to the restructuring reserve.
13. FINANCING ARRANGEMENTS
Total indebtedness as of December 31, 1998 was approximately $3.0
billion, a $1.6 billion increase from total indebtedness as of
December 31, 1997 of $1.4 billion. The primary reason for this
increased indebtedness was the Harris Acquisition. See Note 2,
"Acquisitions."
Short-term borrowings were $397.0 million and $179.7 million as of
December 31, 1998 and 1997, respectively, which primarily consisted
of commercial paper, revolving credit facilities, vendor financing
arrangements and the portion of the sale of receivables classified
as short-term debt as of December 31, 1997, as required by SFAS No.
125. The weighted average interest rate on short-term borrowings
was 6.1 percent and 6.0 percent for 1998 and 1997, respectively.
Long-term debt as of December 31 consisted of the following:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Notes and debentures due 2001-2018,
with interest rates ranging from
6.50% to 7.625% $1,700.0 $ 300.0
Corporate commercial paper 596.9 -
Industrial revenue bonds, maturing
through 2022, with interest rates
ranging from 3.50% to 7.525% 92.8 102.1
Revolving credit facilities,
variable rates 66.8 655.0
Other debt 193.5 187.3
-------- --------
2,650.0 1,244.4
Less: current maturities 11.3 9.2
-------- --------
Total long-term debt, less current
maturities $2,638.7 $1,235.2
======== ========
</TABLE>
A portion of outstanding commercial paper is classified as long-
term since it is supported by a long-term bank facility.
<PAGE>
As part of a general debt restructuring subsequent to the Harris
Acquisition, the Company issued approximately $1.1 billion of long-
term notes and debentures with effective interest rates ranging
from 6.50 percent to 7.625 percent with maturities from 2001
through 2018. The debt restructuring reduced the Company's short-
term borrowings, primarily commercial paper, and retired the higher
rate debt assumed as part of the Harris Acquisition.
Also in conjunction with the Harris Acquisition, the Company
arranged a $1.0 billion bridge credit facility (Bridge Facility).
The Bridge Facility is a 364-day, floating rate facility maturing
in March 1999. In December 1998, the Bridge Facility was amended
to reduce the amount available under the facility from $1.0 billion
to $500.0 million. Commitment fees associated with the Bridge
Facility are 15.0 basis points. The Company is currently
negotiating an extension of this facility at a reduced amount.
Also in December 1998, the Company renewed and amended its $350.0
million short-term credit facility maturing in December 1999, and
amended its $650.0 million long-term credit facility maturing in
December 2002, (collectively with the Bridge Facility, the Credit
Facilities). Commitment fees associated with the short-term and
long-term facilities are 10.0 basis points and 11.0 basis points,
respectively. The amount available for borrowing under the Credit
Facilities is reduced by the balance of outstanding commercial
paper, letters of credit and guarantees. As of December 31, 1998,
the Company had a total of $977.6 million of commercial paper
outstanding and $1.5 billion of commercial paper backup facilities.
Net available borrowings, under the Credit Facilities, as of
December 31, 1998 were $442.0 million. Outstanding letters of
credit as of December 31, 1998 totaled $53.1 million. These Credit
Facilities contain provisions which: (i) restrict the Company's
ability to dispose of a substantial portion of its consolidated
assets; (ii) limit the creation of additional liens on the
Company's and its subsidiaries' assets; and (iii) limit the
Company's subsidiaries' incurrence of debt. These Credit Facilities
also contain a leverage ratio test and other covenants.
The Company, through various subsidiaries, also maintains the
following credit facilities: (i) a $100.0 million, five-year
revolving credit facility maturing in December 2002 (Canadian
Facility); (ii) a 50.0 million Australian Dollar, two-year
revolving credit facility maturing in September 2000 and a 25.0
<PAGE>
million Australian Dollar, five-year term loan facility maturing in
September 2003 (Australian Facilities); and (iii) a 45.0 million
Pound Sterling, five-year revolving credit facility maturing in
December 2003 (European Facility). As of December 31, 1998, $66.8
million was outstanding under the European Facility while there
were no outstanding obligations under either the Canadian Facility
or the Australian Facilities. Commitment fees associated with the
Canadian Facility, the Australian Facilities and the European
Facility are 11.0 basis points, 30.0 basis points and 30.0 basis
points, respectively.
The Company currently guarantees the payment of $75.0 million
principal amount of industrial revenue bonds due 2015 issued by the
Florida Polk County Industrial Development Authority (Polk County
Bonds). As a result of the FTX Merger, the Company is not in
technical compliance with one covenant in such guarantee. The
Company has notified the Bank of New York, trustee for holders of
the Polk County Bonds, regarding the issue. The holders of the Polk
County Bonds have not sought to accelerate the Polk County
Bonds or requested that any other action be taken. Because
solicitation of a unanimous waiver of the technical default is
impractical, the Company currently intends to take no action. The
Company does not believe that any acceleration, redemption or
refinancing of the Polk County Bonds would have a material adverse
effect on the Company and its subsidiaries, taken as a whole
because the Company believes it would be able to repay the Polk
County Bonds from available sources of liquidity.
As of December 31, 1998, the estimated fair value of long-term debt
described above was approximately the same as the carrying amount
of such debt in the Consolidated Balance Sheet. The fair value was
calculated in accordance with the requirements of SFAS No. 107,
"Disclosures of Fair Value of Financial Instruments," and was
estimated by discounting the future cash flows using rates
currently available to the Company for debt instruments with
similar terms and remaining maturities.
Extraordinary income of $3.0 million in 1998 and extraordinary
charges of $24.9 million and $8.1 million in 1997 and 1996,
respectively, related to the early extinguishment of debt.
Cash interest payments were $145.4 million, $56.8 million and $68.3
million for 1998, 1997 and 1996, respectively.
<PAGE>
Scheduled maturities, excluding commercial paper borrowings and the
revolving credit facilities, are as follows:
<TABLE>
<CAPTION>
<S> <C>
1999 $ 27.6
2000 41.8
2001 212.0
2002 314.0
2003 and beyond 1,407.2
</TABLE>
14. OTHER NONCURRENT LIABILITIES
Other noncurrent liabilities as of December 31 were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Employee and retiree benefits $ 234.7 $ 231.0
Environmental 114.3 105.8
Restructuring 44.6 13.3
Deferred gain 36.0 36.8
Other 56.5 53.3
------- -------
Noncurrent liabilities $ 486.1 $ 440.2
======= =======
</TABLE>
See Note 3, "Non-Recurring Charges," for more detail on the
restructuring reserve.
15. PENSION PLANS AND OTHER BENEFITS
The Company has non-contributory pension plans for a majority of
its employees. Benefits are based on a combination of years of
service and compensation levels, depending on the plan. Generally,
contributions to the United States plans are made to meet minimum
funding requirements of the Employee Retirement Income Security Act
of 1974, while contributions to Canadian plans are made in
accordance with Pension Benefits Acts, instituted by the provinces
of Saskatchewan and Ontario. Employees in the United States and
Canada whose pension benefits exceed Internal Revenue Code and
Revenue Canada limitations, respectively, are covered by
supplementary non-qualified, unfunded pension plans.
<PAGE>
The plans' assets consist mainly of corporate equity, United States
government securities, corporate debt securities and units of
participation in a collective short-term investment fund.
Effective January 1, 1998, the Company transitioned from a defined
benefit pension plan to a defined contribution plan for certain
employees who elected to do so (Transition). The Company accounted
for the Transition in accordance with SFAS No. 88. The impact of
the curtailment as a result of the Transition was not material.
The Company also provides certain health care benefit plans for
certain retired employees. The plans may be either contributory or
non-contributory and contain certain other cost-sharing features
such as deductibles and coinsurance. The plans are unfunded.
Employees are not vested and such benefits are subject to change.
The Company has adopted SFAS No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits," effective December 31,
1998. The new standard does not change the measurement or
recognition of costs for pension or other postretirement plans. It
standardizes disclosures and eliminates those that are no longer
useful.
The following tables, prepared in accordance with the new standard,
set forth pension and postretirement obligations and plan assets
for the Company's defined benefit plans, based on a September 30
measurement date, as of December 31:
<TABLE>
<CAPTION>
Pension Benefits Other Benefits
---------------- --------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Change in benefit obligation:
Benefit obligation as of
January 1 $ 391.8 $ 233.8 $ 175.3 $ 71.8
Service cost 10.6 13.0 2.6 1.9
Interest cost 27.5 18.3 11.0 5.3
Plan amendment 6.1 2.9 4.1 -
Effect of settlements (31.0) - - -
Actuarial loss 41.3 0.7 17.2 2.0
Benefits paid (48.1) (13.6) (9.1) (2.3)
Acquisitions 36.4 136.7 - 96.6
Other (1.2) - (3.3) -
Curtailments (7.0) - - -
------- ------- ------- -------
<PAGE>
Benefit obligation as of
December 31 $ 426.4 $ 391.8 $ 197.8 $ 175.3
======= ======= ======= =======
Change in plan assets:
Fair value as of January 1 $ 380.8 $ 190.2 $ - $ -
Actual return 0.5 29.5 - -
Company contribution 37.5 11.2 9.1 2.3
Effect of settlements (57.9) - - -
Acquisitions 38.1 154.5 - -
Asset transfer - 9.0 - -
Benefits paid (48.1) (13.6) (9.1) (2.3)
------- ------- ------- -------
Fair value as of December 31 $ 350.9 $ 380.8 $ - $ -
======= ======= ======= =======
Funded status of the plan $ (75.5) $ (11.0) $(197.8) $(175.3)
Unrecognized net (gain) loss 74.5 1.5 7.4 (11.2)
Unrecognized transition
liability (asset) 20.7 (1.3) (1.6) (1.7)
Unrecognized prior service cost (0.5) 17.0 (5.3) (10.2)
------- ------- ------- -------
Prepaid (accrued) benefit cost $ 19.2 $ 6.2 $(197.3) $(198.4)
Amounts recognized in the consolidated balance sheet:
Prepaid benefit cost $ 69.7 $ 63.1 $ 17.1 $ 17.9
Accrued benefit liability (64.8) (64.8) (214.4) (216.3)
Intangible asset 14.3 7.9 - -
------- ------- ------- -------
Total recognized $ 19.2 $ 6.2 $(197.3) $(198.4)
======= ======= ======= =======
</TABLE>
The acquisition amounts relate to pension and postretirement
liabilities and assets assumed in conjunction with the Harris
Acquisition in April 1998, and the FTX Merger which occurred in
December 1997. See Note 2, "Acquisitions" and Note 3, "Non-
Recurring Charges."
<PAGE>
Amounts applicable to the Company's pension plan with accumulated
benefit obligations in excess of plan assets are as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Projected benefit obligation $ 191.4 $ 113.6
Accumulated benefit obligation $ 147.0 $ 81.3
Fair value of plan assets $ 96.3 $ 35.3
</TABLE>
<TABLE>
<CAPTION>
Pension Benefits Other Benefits
---------------- --------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Actuarial assumptions:
Discount rate 7.0% 7.5% 7.0% 7.5%
Expected return on plan assets 9.9% 9.6% - -
Rate of compensation increase 5.0% 5.1% - -
</TABLE>
For measurement purposes, a 7.4 percent annual rate of increase in
the per capita cost of covered pre-65 health care benefits was
assumed for 1998 decreasing gradually to 4.7 percent in 2004 and
thereafter; and a 7.5 percent annual rate of increase in the per
capita cost of covered post-65 health care benefits was assumed for
1998 decreasing gradually to 5.0 percent in 2004.
<PAGE>
The components of net pension and other benefits expense were:
<TABLE>
<CAPTION>
Pension Benefits Other Benefits
------------------ ------------------
1998 1997 1996 1998 1997 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Service cost for
benefits earned
during the year $ 10.6 $ 13.0 $ 13.5 $ 2.6 $ 1.9 $ 1.7
Interest cost on
projected benefit
obligation 27.5 18.3 16.8 11.0 5.3 5.2
Return on plan assets (33.5) (18.1) (16.8) - - -
Net amortization and
deferral 2.8 2.8 2.6 (1.4) (1.8) (1.8)
Curtailments and
settlements 19.4 2.8 - 0.5 - -
------ ------ ------ ------ ------ ------
Net pension and other
benefits expense $ 26.8 $ 18.8 $ 16.1 $ 12.7 $ 5.4 $ 5.1
====== ====== ====== ====== ====== ======
</TABLE>
The curtailment and settlement charges included in the tables above
were primarily recorded as part of the Restructuring Charge. See
Note 3, "Non-Recurring Charges."
The assumed health care cost trend rate has a significant effect on
the amounts reported. A one-percentage-point change in the assumed
health care cost trend rate would have the following effects:
<TABLE>
<CAPTION>
One Percentage One Percentage
Point Increase Point Decrease
-------------- --------------
<S> <C> <C>
Effect on total service and
interest cost components $ 0.7 $ (0.6)
Effect on postretirement
benefit obligation $10.8 $(10.2)
</TABLE>
<PAGE>
The Company also has defined contribution pension and 401K
investment savings plans (Plans) for certain of its employees in
the United States and Canada. Under each of the Plans,
participants are permitted to defer a portion of their
compensation. Company contributions to the Plans are based on a
percentage of employee contributions. In 1998, the Company added a
profit sharing feature to the Plans for salaried and non-union
hourly employees as a replacement for traditional pension plans.
The Company contribution is based on the employee's age and pay and
the Company's financial performance. The expense attributable to
these plans was $18.1 million, $8.5 million and $6.4 million in
1998, 1997 and 1996, respectively.
In addition, the Company provides benefits such as workers'
compensation and disability to certain former or inactive employees
after employment but before retirement.
16. INCOME TAXES
Two of the Company's three potash operations that are subject to
Canadian taxes, IMC Kalium Canada Ltd. and IMC Central Canada
Potash Inc., are included in the consolidated United States federal
income tax return filed by the Company.
Deferred income taxes reflect the net tax effects of temporary
differences between the amounts of assets and liabilities for
accounting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax liabilities
and assets as of December 31 were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Deferred tax liabilities:
Property, plant and equipment $ 824.2 $ 433.4
Other liabilities 132.1 114.8
------- -------
Total deferred tax liabilities 956.3 548.2
<PAGE>
Deferred tax assets:
Alternative minimum tax credit
carryforwards 137.4 124.4
Net operating loss carryforward 96.7 -
Postretirement and postemployment benefits 45.8 43.1
Foreign tax credit carryforward 24.6 30.6
Sterlington litigation settlement - 22.4
Reclamation and decommissioning accruals 22.3 23.8
Sale of AgriBusiness business unit 20.0 -
Restructuring charges 58.1 9.5
Purchase accounting adjustments related
to Harris Acquisition 28.2 -
Other assets 107.8 61.4
------- -------
Subtotal 540.9 315.2
Valuation allowance 60.1 37.3
------- -------
Total deferred tax assets 480.8 277.9
------- -------
Net deferred tax liabilities $ 475.5 $ 270.3
======= =======
</TABLE>
As of December 31, 1998, the Company had alternative minimum tax
credit carryforwards of approximately $137.4 million, net operating
loss carryforwards in the amount of $229.6 million, foreign tax
credit carryforwards in the amount of $24.6 million, investment tax
credit and other general business credit carryforwards in the
amount of $10.7 million, and a carryover of charitable
contributions in the amount of $17.8 million.
The alternative minimum tax credit carryforwards can be carried
forward indefinitely. The net operating loss carryforwards have
expiration dates ranging from 2005 through 2013. The foreign tax
credit carryforward will expire in 2001 to the extent it remains
unutilized. The investment tax credit and other general business
credit carryforwards have expiration dates ranging from 1999
through 2008. The charitable contributions carryover has
expiration dates ranging from 1999 through 2001.
Due to the uncertainty of the realization of certain tax
carryforwards, the Company has established a valuation allowance
against these carryforward benefits in the amount of $60.1 million.
<PAGE>
Some of these carryforward benefits may be subject to limitations
imposed by the Internal Revenue Code. Except to the extent that
valuation allowances have been established, the Company believes
these limitations will not prevent the carryforward benefits from
being realized.
The provision for income taxes from continuing operations for the
years ended December 31 consisted of the following:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Current:
Federal $ 27.9 $ 11.9 $ 42.0
State and local 1.9 3.7 2.2
Foreign 43.1 48.3 12.0
------- ------- -------
72.9 63.9 56.2
Deferred:
Federal (20.7) (37.0) 3.3
State and local (2.9) (8.4) 0.7
Foreign 35.2 11.9 21.1
------- ------- -------
11.6 (33.5) 25.1
------- ------- -------
$ 84.5 $ 30.4 $ 81.3
======= ======= =======
</TABLE>
<PAGE>
The components of earnings from continuing operations including
non-recurring items and before income taxes and extraordinary items
and the effects of significant adjustments to tax computed at the
federal statutory rate were as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Domestic earnings $(18.0) $ (5.0) $151.7
Foreign earnings 159.6 105.2 51.3
------ ------ ------
Earnings from continuing operations
before income taxes
and extraordinary item $141.6 $100.2 $203.0
====== ====== ======
Computed tax at the federal statutory
rate of 35% $ 49.6 $ 35.1 $ 70.9
Foreign income and withholding taxes 40.9 4.9 11.3
Percentage depletion in excess of basis (26.6) (9.5) (9.0)
Vigoro Merger expenses not deductible
for tax purposes - - 7.1
State income taxes, net of federal
income tax benefit (0.7) (3.0) 1.9
Benefit of foreign sales corporation (4.4) (5.6) (3.9)
Amortization of goodwill 9.1 - -
Sale of Chemicals 16.8 - -
Other items (none in excess of 5% of
computed tax) (0.2) 8.5 3.0
------ ------ ------
Provision for income taxes $ 84.5 $ 30.4 $ 81.3
====== ====== ======
Effective tax rate 59.6% 30.3% 40.0%
===== ===== =====
</TABLE>
<PAGE>
The following supplemental information presents earnings from
continuing operations before income taxes and non-recurring charges
and the related reconciliation of the effective income tax rate
before the impact of such non-recurring charges:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Domestic earnings $ 203.6 $ 178.7 $ 236.6
Foreign earnings 159.6 105.2 51.3
------- ------- -------
Earnings from continuing operations
before income taxes and non-recurring
and extraordinary items 363.2 283.9 287.9
------- ------- -------
Computed tax at the federal statutory
rate of 35% 127.1 99.4 100.8
Foreign income and withholding taxes 41.2 4.9 11.3
Percentage depletion in excess of basis (26.6) (9.5) (9.0)
State income taxes, net of federal
income tax benefit 6.0 4.0 4.4
Benefit of foreign sales corporation (4.4) (5.6) (3.9)
Amortization of goodwill 9.1 - -
Other items (none in excess of 5% of
computed tax) (18.3) 8.7 2.7
------- ------- -------
Provision for income taxes $ 134.1 $ 101.9 $ 106.3
======= ======= =======
Effective tax rate 36.9% 35.9% 36.9%
===== ===== =====
</TABLE>
United States income and foreign withholding taxes are provided on
the earnings of foreign subsidiaries that are expected to be
remitted to the extent that taxes on the distribution of such
earnings would not be offset by foreign tax credits. The Company
has no present intention of remitting undistributed earnings of
foreign subsidiaries aggregating $228.9 million as of December 31,
1998, and, accordingly, no deferred tax liability has been
established relative to these earnings. If these amounts were not
considered permanently reinvested, a deferred tax liability of
$40.2 million would have been required.
<PAGE>
Income taxes paid, net of refunds received, were $84.9 million,
$51.6 million and $73.8 million for 1998, 1997 and 1996,
respectively.
17. CAPITAL STOCK
Changes in the number of shares of common stock issued and in
treasury were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Common stock issued:
Balance, beginning of year 124,668,286 101,639,885
Common stock issued 10,033 22,737,681
Stock options exercised 394,492 290,720
----------- -----------
Balance, end of year 125,072,811 124,668,286
Treasury common stock:
Balance, beginning of year 10,691,520 5,545,884
Common stock issued - (211,364)
Restricted stock awards (53,000) -
Purchases 100,000 5,357,000
----------- -----------
Balance, end of year 10,738,520 10,691,520
----------- -----------
Common stock outstanding, end of year 114,334,291 113,976,766
=========== ===========
</TABLE>
In connection with the FTX Merger, each share of common stock of
FTX was exchanged for 0.90 share of the Company's common stock plus
one-third of a warrant, with each whole warrant entitling the
holder to purchase one share of the Company's common stock for
$44.50 per share. As a result of the FTX Merger, 22.7 million
shares were issued at an average market price of $32.28 per share.
In addition, approximately 8.4 million warrants were issued, which
are publicly traded on the New York Stock Exchange and will expire
on the third anniversary of the FTX Merger. These warrants were
valued at $3.56 per warrant and are convertible into approximately
8.4 million shares of common stock. See Note 2, "Acquisitions."
<PAGE>
Pursuant to a Shareholder Rights Plan adopted by the Company in
June 1989, a dividend of one preferred stock purchase right (Right)
for each outstanding share of common stock of the Company was
issued on July 12, 1989, to stockholders of record on that date.
Under certain conditions, each Right may be exercised to purchase
one two-hundredth of a share of Junior Participating Preferred
Stock, Series C, par value $1 per share, at a price of $75, subject
to adjustment. This preferred stock is designed to participate in
dividends and vote on essentially equivalent terms with a whole
share of common stock. The Rights generally become exercisable
apart from the common stock only if a person or group acquires 15
percent or more of the outstanding common stock or makes a tender
offer for 15 percent or more of the outstanding common stock. Upon
the acquisition by a person or group of 15 percent or more of the
common stock, each Right will entitle the holder to purchase, at
the then-current exercise price of the Right, a number of shares of
common stock having a market value at that time of twice the
exercise price. The Rights may be redeemed at a price of $0.005
per Right under certain circumstances prior to their expiration on
June 21, 1999. No event during 1998 made the Rights exercisable.
18. STOCK PLANS
The Company has various stock option plans (Stock Plans) under
which it may grant non-qualified stock options, stock appreciation
rights (SARs) and restricted stock awards to officers and key
managers of the Company, accounted for under APB Opinion No. 25,
"Accounting for Stock Issued to Employees." The Company also has a
non-qualified stock option plan for non-employee directors. The
Stock Plans, as amended, provide for the issuance of a maximum of
10.6 million shares of common stock of the Company which may be
authorized but unissued shares or treasury shares.
Under the terms of the Stock Plans, the option price per share may
not be less than 100 percent of the fair market value on the date
of the grant. Stock options and SARs granted under the Stock Plans
extend for ten years and generally become exercisable either 50
percent one year after the date of the grant and 100 percent two
years after the date of the grant, or in one-third increments:
one-third one year after the date of the grant, two-thirds two
years after the date of the grant, and 100 percent three years
after the date of the grant.
<PAGE>
In conjunction with the FTX Merger, outstanding FTX stock options
for officers and key managers were converted into options of the
Company to acquire approximately 1.4 million Company shares at a
weighted average exercise price of $25.02 per share. Outstanding
FTX stock options for non-employee directors of FTX were converted
into options of the Company to acquire approximately 0.1 million
Company shares at a weighted average exercise price of $18.50 per
share. Additionally, FTX SARs and stock incentive units (SIUs)
were converted into approximately 0.1 million Company SARs and
approximately 0.2 million Company SIUs based on the Company's
common stock at weighted average exercise prices of $15.63 and
$24.44 per share, respectively. Due to change of control
provisions, all converted FTX options, SARs and SIUs were
considered fully vested at the date of the FTX Merger. See Note
2, "Acquisitions."
At the Company's 1996 Annual Meeting, the stockholders approved the
1996 long-term incentive plan which replaced a predecessor plan.
The new plan became effective in October 1996. Under the plan,
officers and key managers may be awarded stock and/or cash upon
achievement of specified objectives over a three-year period ending
December 31, 1999. Final payouts are made at the discretion of the
Compensation Committee of the Company's Board of Directors whose
members are not participants in the plan. Approximately $7.5
million, $8.6 million and $4.4 million were charged to earnings in
1998, 1997 and 1996, respectively, for performance awards earned
for the relevant three-year period under the 1996 long-term
incentive plan.
Excluding the SARs and SIUs converted in conjunction with the FTX
Merger discussed above, there were no SARs granted in 1998, 1997 or
1996. For the SARs, a total of 69,357 shares, 8,525 shares and
26,775 shares were exercised in 1998, 1997 and 1996, respectively.
For the SIUs, a total of 49,663 shares were exercised in 1998.
There were no exercises during 1997 or 1996, as SIUs did not exist
at the Company prior to the FTX Merger. When exercised, all SARs
and SIUs are settled with cash payments to employees.
<PAGE>
The following table summarizes stock option activity:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
January 1 5,972,350 $ 29.05 3,805,519 $ 27.33 3,816,654 $ 22.98
Granted 2,008,245 28.61 1,222,219 37.63 841,500 40.78
Exercised 350,966 18.12 297,162 18.88 670,727 19.02
Cancelled 274,813 33.28 161,419 36.68 181,908 29.13
Converted FTX
options - - 1,403,193 25.02 - -
--------- -------- --------- ------- --------- ------
Outstanding at
December 31 7,354,816 $ 29.30 5,972,350 $ 29.05 3,805,519 $ 27.33
========= ======== ========= ======= ========= =======
Exercisable at
December 31 4,530,065 $ 27.91 4,216,057 $ 25.26 2,294,731 $ 21.92
Available for
future grant
at December 31 574,338 2,307,770 3,368,570
</TABLE>
<PAGE>
Data related to significant option ranges, weighted average
exercise prices and contract lives as of December 31, 1998
follows:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
--------------------------------- -------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Range of Number Contractual Exercise Number Exercise
Exercise Prices of Options Life Price Of Options Price
---------------- ---------- ------------ -------- ---------- --------
<S> <C> <C> <C> <C> <C>
$10.17 to 16.50 413,862 4 years $ 16.07 413,862 $16.07
$16.51 to 24.16 1,718,189 4 years 19.34 1,210,189 19.82
$24.17 to 37.13 2,925,198 4 years 29.59 1,700,964 28.60
$37.14 to 40.88 2,297,567 7 years 38.75 1,205,050 39.14
--------- ---------
$10.17 to 40.88 7,354,816 5 years $ 29.30 4,530,065 $27.91
========= =========
</TABLE>
The assumption regarding the stock options contractual life was
that 100 percent of such options vested in the first year after
issuance rather than ratably according to the applicable vesting
period as provided by the terms of the grants.
<PAGE>
If the Company's stock option plans' compensation cost had been
determined based on the fair value at the grant date for awards
beginning in 1995, consistent with the provisions of SFAS No. 123
"Accounting for Stock-Based Compensation," the Company's net
earnings and earnings per share would have been reduced to the
following pro forma amounts:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Net earnings (loss):
As reported $ (9.0) $ 62.9 $ 127.1
Pro forma (16.5) 51.4 123.6
Net earnings (loss) per share:
Basic $ (0.08) $ 0.67 $ 1.37
Pro forma-basic (0.14) 0.55 1.33
Diluted (0.08) 0.67 1.31
Pro forma-diluted (0.14) 0.54 1.27
</TABLE>
For the pro forma disclosures, the estimated fair value of the
options is amortized to expense over their expected six-year life.
These pro forma amounts are not indicative of anticipated future
disclosures because SFAS No. 123 does not apply to grants before
1995.
Weighted average fair values of options as of their grant date
during 1998, 1997 and 1996 were $9.82, $12.74 and $14.61,
respectively. The fair value of these options was estimated at the
date of grant using the Black Scholes option pricing model using
the following weighted average assumptions:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Expected dividend yield 0.90% 0.85% 0.85%
Expected stock price volatility 29.1% 25.0% 26.0%
Risk-free interest rate
(7 year government) 4.7% 5.8% 6.3%
Expected life of options 6 years 6 years 6 years
</TABLE>
<PAGE>
Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because
changes in the subjective input assumptions can materially affect
the fair value estimate, in management's opinion the existing
models do not provide a reliable single measure of the value of the
employee stock options.
19. COMMITMENTS
The Company purchases natural gas, ammonia, electricity and
coal from third parties under contracts extending, in some
cases, for multiple years. Purchases under these contracts are
generally based on prevailing market prices. These contracts
generally range from one to four years. The Company has entered
into a third-party sulphur purchase commitment, the term of which
is indeterminable. Therefore, the dollar value of the sulphur
commitments has been excluded from the schedule below after the
year 2003.
The Company leases plants, warehouses, terminals, office
facilities, railcars and various types of equipment under operating
and capital leases. Lease terms generally range from three to five
years, although some leases have longer terms.
A schedule of future minimum long-term purchase commitments and
minimum lease payments under non-cancelable operating and capital
leases as of December 31, 1998 follows:
<TABLE>
<CAPTION>
Purchase Operating Capital
Commitments Leases Leases
----------- ------ ------
<S> <C> <C> <C>
1999 $ 410.1 $ 37.6 $ 5.8
2000 228.7 32.9 3.8
2001 203.9 30.6 2.6
2002 172.8 23.5 0.5
2003 173.0 22.6 0.5
Subsequent years 126.5 135.1 1.1
-------- ------- -------
$1,315.0 $ 282.3 $ 14.3
======== =======
Less: Amount representing interest 1.7
-------
Present value of minimum capital
lease payments $ 12.6
=======
</TABLE>
<PAGE>
Assets recorded under capital leases are included in machinery and
equipment in Property, plant and equipment, net in the Company's
Consolidated Balance Sheet and were $21.6 million at December 31,
1998. Capital leases for 1997 were not significant to the Company.
Rental expense for 1998, 1997 and 1996 amounted to $54.5 million,
$35.0 million and $31.5 million, respectively.
International Minerals & Chemical (Canada) Global Limited is
committed under a service agreement with Potash Corporation of
Saskatchewan Inc. (PCS) to produce annually from mineral reserves
specified quantities of potash for a fixed fee plus a pro rata
share of total production and capital costs at the potash mines
located at Esterhazy, Saskatchewan. The agreement extends through
June 30, 2001 and is renewable at the option of PCS for five
additional five-year periods. Potash produced for PCS amounts to
an annual minimum of approximately 0.5 million tons, but no more
than approximately 1.1 million tons. During 1998, production of
potash for PCS amounted to 598,359 tons, or 16 percent of the
Esterhazy mine's total tons produced.
In conjunction with the FTX Merger, the Company, through its
interest in PLP, participates in the Exploration Program. In
accordance with the Exploration Program, PLP, MMR and the
Investor fund 56.4 percent, 37.6 percent and 6.0 percent,
respectively, of the exploration costs. As of December 31, 1998,
PLP's total exploration spending-to-date was approximately $70.0
million. All revenue and other costs are allocated 47.0 percent to
PLP, 48.0 percent to MMR and 5.0 percent to the Investor.
In November 1998, Phosphate Chemicals Export Association, Inc.
(PhosChem), of which the Company's IMC-Agrico joint venture is a
member, reached a two-year agreement through the year 2000 to
supply DAP to the China National Chemicals Import and Export
Corporation (Sinochem). This agreement provides Sinochem with an
option to extend the agreement to December 31, 2002. Sinochem is a
state company with government authority for the import of
fertilizers into China. Under the contract's terms, Sinochem will
receive monthly shipments at prices reflecting the market at the
time of shipment.
<PAGE>
20. CONTINGENCIES
Mining Risks
Since December 1985, the Company has experienced an inflow of water
into one of its two interconnected potash mines located at
Esterhazy, Saskatchewan. As a result, the Company has incurred
expenditures, certain of which due to their nature have been
capitalized while others have been charged to expense, to control
the inflow. Since the initial discovery of the inflow, the Company
has been able to meet all sales obligations from production at the
mines. The Company has considered, and continues to evaluate,
alternatives to the operational methods employed at Esterhazy.
However, the procedures utilized to control the water inflow have
proven successful to date, and the Company currently intends to
continue conventional shaft mining. Despite the relative success
of these measures, there can be no assurance that the amounts
required for remedial efforts will not increase in future years or
that the water inflow, risk to employees or remediation costs will
not increase to a level which would cause the Company to change its
mining process or abandon the mines.
Sterlington Litigation
In early 1998, the Company entered into a Preliminary Settlement
Agreement with the plaintiffs in connection with the Louisiana
class action arising out of a May 1991 explosion at a
nitroparaffins plant located in Sterlington, Louisiana. The
Preliminary Settlement Agreement settles all claims that members of
the class have against the Company and releases the Company from
further potential liabilities based on the claims of the members of
the class. In January 1999, the court held a hearing on the
fairness of the preliminary Settlement Agreement. In February
1999, the court entered a written order approving the Settlement
Agreement. The Company also has settled all the known claims of
individuals and entities who opted out of the Louisiana class
action. Settlement of the Louisiana third-party claims is intended
to resolve the Company's known potential future liabilities in
connection with the Sterlington explosion. In addition, the
settlement is intended to protect the Company from the remaining
claims for contribution and indemnity filed by ANGUS Chemical
Company and the other remaining defendants with respect to the
Sterlington explosion.
<PAGE>
Potash Antitrust Litigation
The Company was a defendant, along with other Canadian and United
States potash producers, in a class action antitrust lawsuit filed
in federal court in 1993. The plaintiffs alleged a price-fixing
conspiracy among North American potash producers beginning in 1987
and continuing until the filing of the complaint. The class action
complaint against all defendants, including the Company, was
dismissed by summary judgment in January 1997. The summary
judgment dismissing the case is currently on appeal by the
plaintiffs to the United States Court of Appeals for the Eighth
Circuit (Court of Appeals). The Court of Appeals is expected to
rule during calendar 1999.
In addition, in 1993 and 1994, class action antitrust lawsuits with
allegations similar to those made in the federal case were filed
against the Company and other Canadian and United States potash
producers in state courts in Illinois and California. The Illinois
case was dismissed for failure to state a claim. In the California
litigation, all proceedings have been stayed pending the decision
of the Court of Appeals.
FTX Merger Litigation
In August 1997, five identical class action lawsuits were filed in
Chancery Court in Delaware by unitholders of PLP. Each case named
the same defendants and broadly alleged that FTX and FMRP Inc.
(FMRP) had breached fiduciary duties owed to the public unitholders
of PLP. The Company was alleged to have aided and abetted these
breaches of fiduciary duty.
In November 1997, an amended class action complaint was filed with
respect to all cases. The amended complaint named the same
defendants and raised the same broad allegations of breaches of
fiduciary duty against FTX and FMRP for allegedly favoring the
interests of FTX and FTX's common stockholders in connection with
the FTX Merger. The plaintiffs claimed specifically that, by
virtue of the FTX Merger, the public unitholders' interests in
PLP's ownership of IMC-Agrico would become even more subject to the
dominant interest of the Company. The amended complaint seeks
certification as a class action and an injunction against the
proposed FTX Merger or, in the alternative, rescissionary damages.
The defendants' moved the Court to dismiss the amended complaint in
November 1998. The plaintiffs have until March 1999 to file
their response. IMC intends to defend this action vigorously.
<PAGE>
In May 1998, IMC and PLP (collectively, Plaintiffs) filed a lawsuit
(IMC Action) in Delaware Chancery Court against certain former
directors of FTX (Director Defendants), and MOXY. IMC alleges
that the Director Defendants, as the directors of PLP's
administrative managing general partner FTX, owed duties of loyalty
to PLP and its limited partnership unitholders. IMC further
alleges that the Director Defendants breached their duties by
causing PLP to enter into a series of interrelated non-arm's-length
transactions with MOXY, an affiliate of FTX.
IMC also alleges that MOXY knowingly aided and abetted and
conspired with the Director Defendants to breach their fiduciary
duties. On behalf of the PLP public unitholders, IMC seeks to
reform or rescind the contracts that PLP entered into with MOXY and
to recoup the monies expended as a result of PLP's participation in
those agreements. The Director Defendants and MOXY have filed
motions to dismiss the Plaintiffs' claims. The defendants filed
their briefs in support of their motions in January 1999. IMC
filed its amended complaint, and its responses to the motions to
dismiss in February 1999. No trial date has been scheduled. IMC
intends to pursue this action vigorously.
In May 1998, Jacob Gottlieb filed an action (Gottlieb Action) on
behalf of himself and all other PLP unitholders against the
Director Defendants, MOXY and IMC asserting the same claims that
IMC asserts in the IMC Action. Because IMC and PLP had already
asserted these claims, IMC has filed a motion to dismiss the
Gottlieb Action. The court has not set a briefing schedule for
IMC's motion to dismiss. IMC intends to defend this action
vigorously.
Pine Level Property Reserves
In October 1996, IMC-Agrico signed an agreement with Consolidated
Minerals, Inc. (CMI) for the purchase of real property, Pine Level,
containing approximately 100 million tons of phosphate rock
reserves. In connection with the purchase, Phosphates has agreed
to obtain all environmental, regulatory and related permits
necessary to commence mining on the property.
<PAGE>
Within five years from the date of this agreement, Phosphates is
required to provide notice to CMI regarding one of the following:
(i) whether they have obtained the permits necessary to commence
mining any part of the property; (ii) whether they wish to extend
the permitting period for an additional three years; or (iii)
whether they wish to decline to extend the permitting period. If
the permits necessary to commence mining the property have been
obtained, Phosphates is obligated to pay CMI an initial royalty
payment of $28.9 million. In addition to this royalty payment,
Phosphates is required to pay CMI a mining royalty on phosphate
rock mined from the property to the extent the permits are
obtained.
Environmental Matters
The Company's contingent environmental liability arises from three
sources: facilities currently or formerly owned by the Company or
its predecessors; facilities adjacent to currently or formerly
owned facilities; and third-party Superfund sites.
At facilities currently or formerly owned by the Company or its
corporate predecesssors, including FTX, PLP and their corporate
predecessors, the historical use and handling of regulated chemical
substances, crop nutrient products and salt has resulted in soil
and groundwater contamination. Spills or other unintended releases
of regulated substances have occurred previously at these
facilities, and potentially could occur in the future, possibly
requiring the Company to undertake or fund cleanup efforts. At
some locations, the Company has agreed, pursuant to consent orders
with the appropriate governmental agencies, to undertake certain
investigations (which currently are in progress) to determine
whether remedial action may be required to address contamination.
In a limited number of cases, the Company's current or former
operations also allegedly have resulted in soil or groundwater
contamination in neighboring areas. For instance, three lawsuits
filed in 1998 in Louisiana contend that FTX's historic oil and gas
operations may have resulted in contamination at and damage to
neighboring marshland: Terrebone Parish School Board v. Texaco
Inc.; Estate of Simoneaux v. Southern Natural Gas Co.; and Michael
X. St. Martin v. Quintana Petroleum Corp. The suits seek
unspecified damages for restoration of the marshes to their "pre-
leased," "pre-operational," or "natural" conditions. Because the
suits are in the early stages, it is difficult to determine the
magnitude of exposure to the Company; however, the Company intends
to vigorously contest these actions.
<PAGE>
Finally, the Superfund, and equivalent state statutes impose
liability without regard to fault or to the legality of a party's
conduct, on certain categories of persons that are considered to
have contributed to the release of "hazardous substances" into the
environment. Currently, the Company is involved or concluding
involvement at less than twenty Superfund or equivalent state
sites.
With regard to these contingent environmental liabilities, it is
the Company's policy to accrue environmental investigatory and
non-capital remediation costs for identified sites when
litigation has commenced or a claim or assessment has been
asserted or is probable and the likelihood of an unfavorable
outcome is probable. In addition to these accrued amounts,
material expenditures could be required by the Company in the
future to remediate contamination at current or former sites or
neighboring off-site areas. For other known sites, the
Company estimates that any additional loss in excess of the
accrued amounts would not be material. The Company cannot
determine the cost of any remedial action that ultimately may be
required at unknown sites, sites currently under investigation,
sites for which investigations have not been performed, or sites at
which unanticipated conditions are discovered. The Company's
liability at the federal or state Superfund sites, either alone or
in the aggregate, is not currently expected to be material.
The Company believes that, pursuant to several indemnification
agreements, it is entitled to at least partial, and in many
instances complete, indemnification for a portion of the costs that
may be expended by the Company to remedy environmental issues at
certain facilities. These agreements address issues that resulted
from activities occurring prior to the Company's acquisition of
facilities or businesses from parties including PPG Industries,
Inc.; Kaiser Aluminum & Chemical Corporation; Beatrice Companies,
Inc.; Estech, Inc.; ARCO; Conoco; the Williams Companies; Kerr-
McGee Inc.; and certain other private parties. The Company has
already received and anticipates receiving amounts pursuant to the
indemnification agreements for certain of its expenses incurred to
date as well as any future anticipated expenditures.
<PAGE>
Other
Most of the Company's export sales of phosphate and potash crop
nutrients are marketed through two North American export
associations, PhosChem and Canpotex Limited (Canpotex). As a
member, the Company is, subject to certain conditions,
contractually obligated to reimburse the export association for its
pro rata share of any losses or other liabilities incurred. There
were no such operating losses or other liabilities in 1998, 1997
and 1996.
The Company also has certain other contingent liabilities with
respect to litigation, claims and guarantees of debt obligations to
third parties arising in the ordinary course of business. The
Company does not believe that any of these contingent liabilities
will have a material adverse impact on the Company's financial
position.
21. OPERATING SEGMENTS
The Company's reportable segments are strategic business units that
offer different products and services. They are managed separately
because each business requires different technology and marketing
strategies. The Company's operations were restructured into a
decentralized organizational structure with five stand-alone
business units in July 1996.
As of December 31, 1998, the Company had four reportable segments:
Phosphates, Kalium, Salt and Chemicals. The Company produces and
markets phosphate crop nutrients through the Phosphates business
unit. Potash crop nutrients, industrial grade potash and salt are
produced and marketed through the Kalium business unit. Salt
produces salt for use in road de-icing, food processing, water
softeners and industrial applications. Chemicals produces soda
and boron chemicals principally used in the manufacture of glass
and numerous industrial and specialty chemical products. In
December 1998, a definitive agreement was signed to sell the
Chemicals business unit. See Note 5, "Other Divestitures."
The accounting policies of the segments are the same as those
described in the summary of significant accounting policies. All
intersegment sales prices are market-based. The Company evaluates
performance based on operating earnings of the respective business
units.
<PAGE>
Segment information for the years 1998, 1997 and 1996 was as
follows(a):
<TABLE>
<CAPTION>
1998
--------------------------------------------------
IMC-Agrico IMC IMC IMC
Phosphates Kalium Salt Chemicals Other(b) Total
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales from
external
customers $1,393.9 $ 604.2 $ 173.7 $ 311.8 $ 212.6 $2,696.2
Intersegment
net sales 178.9 95.9 1.3 - 3.1 279.2
Gross margins(c) 375.6 283.1 57.0 40.8 5.0 761.5
Operating
earnings(d) 337.3 257.1 33.3 21.9 (68.6) 581.0
Depreciation,
depletion and
amortization 84.5 54.0 26.5 38.0 48.7 251.7
Total assets 1,792.2 1,364.9 1,119.3 617.7 1,562.8 6,456.9
Capital
expenditures 76.2 159.7 28.1 17.6 86.0 367.6
1997
--------------------------------------------------
IMC-Agrico IMC IMC IMC
Phosphates Kalium Salt Chemicals Other(b) Total
----------------------------------------------------------
Net sales from
external
customers $1,312.5 $ 537.7 $ - $ - $ 265.8 $2,116.0
Intersegment
net sales 172.3 79.7 - - 32.3 284.3
Gross margins 298.7 237.7 - - 38.5 574.9
Operating
earnings(e) 257.4 214.8 - - (29.1) 443.1
Depreciation,
depletion and
amortization 100.5 35.9 - - 26.0 162.4
Total assets 1,752.2 891.1 - - 2,030.6 4,673.9
Capital
expenditures 82.3 123.3 - - 38.4 244.0
<PAGE>
1996
--------------------------------------------------
IMC-Agrico IMC IMC IMC
Phosphates Kalium Salt Chemicals Other(b) Total
----------------------------------------------------------
Net sales from
external
customers $1,492.5 $ 392.2 $ - $ - $ 258.6 $2,143.3
Intersegment
net sales 168.8 72.6 - - 155.8 397.2
Gross margins(f) 411.4 159.8 - - 45.9 617.1
Operating
earnings(g) 372.6 136.8 - - (24.7) 484.7
Depreciation,
depletion and
amortization 96.3 30.1 - - 27.2 153.6
Total assets 1,670.8 697.4 - - 1,117.0 3,485.2
Capital
expenditures 84.1 83.3 - - 41.6 209.0
(a) The operating results and assets of Great Salt Lake Minerals
(included in Kalium), Salt and Chemicals, acquired
as part of the Harris Acquisition, and FTX, acquired as part of
the FTX Merger, are included in the segment information since
the dates of acquisition. See Note 2, "Acquisitions." The
operating results of AgriBusiness have not been included in the
segment information provided as this business has been
classified as discontinued operations. However,
AgriBusiness' assets have been included as part of total assets
in the Other column. See Note 4, "Discontinued Operations."
(b) Segment information below the quantitative thresholds are
attributable to two business units (Feed Ingredients
and IMC Vigoro) and corporate headquarters. IMC Vigoro was sold
in June 1998. Corporate headquarters includes the
elimination of inter-business unit transactions, the goodwill
recorded as a result of the FTX Merger in 1997 and oil and gas
activities through its interest in PLP. See Note 2,
"Acquisitions," Note 3, "Non-Recurring Charges" and Note 5,
"Other Divestitures."
<PAGE>
(c) Before non-recurring charges of $4.1 million related to the
sale of IMC Vigoro in June 1998 and $19.0 million related to
the Company-wide profit improvement program recorded in
December 1998. See Note 3, "Non-Recurring Charges" and Note 5,
"Other Divestitures."
(d) Before non-recurring charges of $14.0 million related to the
sale of IMC Vigoro in June 1998 and $195.1 million primarily
related to the Company-wide profit improvement program recorded
in December 1998. See Note 3, "Non-Recurring Charges" and Note
5, "Other Divestitures."
(e) Before a non-recurring charge of $183.7 million related to the
write-down of Main Pass. See Note 2, "Acquisitions."
(f) Before non-recurring charges of $20.8 million related to the
Vigoro Merger. See Note 3, "Non-Recurring Charges."
(g) Before non-recurring charges of $58.3 million related to the
Vigoro Merger. See Note 3, "Non-Recurring Charges."
</TABLE>
Financial information relating to the Company's operations by
geographic area was as follows:
<TABLE>
<CAPTION>
Net Sales(a)
----------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
United States $1,277.9 $1,044.2 $ 999.1
China 406.2 459.6 485.0
Other 1,012.1 612.2 659.2
-------- -------- --------
Consolidated $2,696.2 $2,116.0 $2,143.3
======== ======== ========
(a) Revenues are attributed to countries based on location of
customer. Sales through Canpotex, one of the Company's export
associations, have been allocated based on the Company's share
of total Canpotex sales. Amounts reflect continuing operations
only.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Long-Lived Assets
-----------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
United States $3,944.0 $3,233.2 $2,188.8
Canada 634.7 378.5 362.8
Other 395.6 - -
-------- -------- --------
Consolidated $4,974.3 $3,611.7 $2,551.6
======== ======== ========
</TABLE>
<PAGE>
<TABLE>
QUARTERLY RESULTS (UNAUDITED)
(In millions, except per share amounts)
- - -----------------------------------------------------------------------
<CAPTION>
Quarter(a)
------------------------------------------------
First Second Third Fourth Year
----- ------ ----- ------ ----
<S> <C> <C> <C> <C> <C>
1998
Net sales $ 536.5 $ 793.4 $ 659.5 $ 706.8 $2,696.2
Gross margins 153.9 214.0 178.6 191.9 738.4
Earnings (loss)
from continuing
operations before
income taxes 84.3 87.8 75.2 (105.7) 141.6
Earnings (loss)
from continuing
operations 54.7 56.9 48.7 (103.2) 57.1
Earnings (loss)
before extraordinary
item 48.0 87.0 37.8 (184.8) (12.0)
Net earnings (loss) $ 45.3 $ 87.0 $ 36.9 $(178.2) $ (9.0)
Basic earnings (loss) per share(b):
Earnings (loss) from
continuing
operations $ 0.48 $ 0.50 $ 0.43 $ (0.90) $ 0.50
Earnings (loss)
from discontinued
operations (0.06) 0.26 (0.10) (0.71) (0.61)
Extraordinary item -
debt retirement (0.02) - (0.01) 0.06 0.03
------- ------- ------- ------- --------
Net earnings (loss)
per share $ 0.40 $ 0.76 $ 0.32 $ (1.55) $ (0.08)
======= ======= ======= ======= ========
<PAGE>
Diluted earnings (loss) per share(b):
Earnings (loss)
from continuing
operations $ 0.48 $ 0.50 $ 0.43 $ (0.90) $ 0.50
Earnings (loss)
from discontinued
operations (0.06) 0.26 (0.10) (0.71) (0.61)
Extraordinary item -
debt retirement (0.02) - (0.01) 0.06 0.03
------- ------- ------- ------- --------
Net earnings (loss)
per share $ 0.40 $ 0.76 $ 0.32 $ (1.55) $ (0.08)
======= ======= ======= ======= ========
1997
Net sales $ 524.9 $ 558.4 $ 499.8 $ 532.9 $2,116.0
Gross margins 149.3 155.6 135.0 135.0 574.9
Earnings (loss)
from continuing
operations before
income taxes 69.3 76.0 59.6 (104.7) 100.2
Earnings (loss)
from continuing
operations 43.5 51.8 36.9 (62.4) 69.8
Earnings (loss)
before extraordinary
item 39.1 88.3 26.7 (66.3) 87.8
Net earnings (loss) $ 39.1 $ 85.0 $ 26.7 $ (87.9) $ 62.9
Basic earnings (loss) per share(b):
Earnings (loss)
from continuing
operations $ 0.46 $ 0.55 $ 0.40 $ (0.67) $ 0.74
Earnings (loss)
from discontinued
operations (0.05) 0.39 (0.11) (0.04) 0.19
Extraordinary item -
debt retirement - (0.03) - (0.23) (0.26)
------- ------- ------- ------- --------
Net earnings (loss)
per share $ 0.41 $ 0.91 $ 0.29 $ (0.94) $ 0.67
======= ======= ======= ======= ========
<PAGE>
Diluted earnings (loss) per share(b):
Earnings (loss)
from continuing
operations $ 0.46 $ 0.55 $ 0.39 $ (0.66) $ 0.74
Earnings (loss)
from discontinued
operations (0.05) 0.38 (0.11) (0.04) 0.19
Extraordinary item -
debt retirement - (0.03) - (0.23) (0.26)
------- ------- ------- ------- --------
Earnings (loss)
per share $ 0.41 $ 0.90 $ 0.28 $ (0.93) $ 0.67
======= ======= ======= ======= ========
(a) All quarterly amounts have been restated to reflect AgriBusiness as
discontinued operations.
(b) Due to weighted average share differences, when stated on a quarter
and year-to-date basis, the earnings per share for the years ended
December 31, 1998 and 1997 do not equal the sum of the respective
earnings per share for the four quarters then ended.
</TABLE>
1998
All four quarters operating results for 1998 reflect the FTX Merger
while second, third and fourth quarter operating results reflect the
Harris Acquisition.
Second quarter operating results include a non-recurring charge of $9.1
million, or $0.08 per share, related to the sale of the IMC Vigoro
business unit.
Fourth quarter operating results include after-tax charges of $114.2
million, or $1.00 per share, related to a Company-wide profit
improvement program and $48.7 million, or $0.42 per share, for the
estimated loss on the divestiture of Chemicals.
1997
Fourth quarter operating results include an after-tax charge of $112.2
million, or $1.19 per share, from charges related to the write-down of
the Company's 25.0 percent ownership in the Main Pass sulphur, oil and
gas joint venture in connection with the FTX Merger.
<PAGE>
<TABLE>
FIVE YEAR COMPARISON
(In millions, except per share amounts)
- - ----------------------------------------------------------------------
<CAPTION>
Years ended December 31,
1998(a)(b) 1997(b)(c) 1996(b)(d)(e) 1995(d) 1994(d)(f)
--------- --------- ----------- ------ ---------
<S> <C> <C> <C> <C> <C>
Statement of Operations Data(g):
Net sales $2,696.2 $2,116.0 $2,143.3 $2,132.7 $1,675.2
Non-recurring charges 253.2 183.7 84.9 - -
Earnings from continuing
operations before income
taxes 141.6 100.2 203.0 307.9 180.9
Provision for income taxes 84.5 30.4 81.3 112.7 81.1
-------- -------- -------- -------- --------
Earnings from continuing
operations before
extraordinary item and
cumulative effect of
accounting change 57.1 69.8 121.7 195.2 99.8
Earnings (loss) from
discontinued operations (69.1) 18.0 13.5 23.8 24.4
Extraordinary item -
debt retirement 3.0 (24.9) (8.1) (3.5) (4.4)
Cumulative effect of
accounting change - - - - (5.9)
-------- -------- -------- -------- --------
Net earnings (loss) $ (9.0) $ 62.9 $ 127.1 $ 215.5 $ 113.9
======== ======== ======== ======== =======
Basic earnings (loss) per share:
Earnings from continuing
operations before
extraordinary item and
cumulative effect of
accounting change $ 0.50 $ 0.74 $ 1.31 $ 2.15 $ 1.17
Earnings (loss) from
discontinued operations (0.61) 0.19 0.15 0.26 0.29
Extraordinary item -
debt retirement 0.03 (0.26) (0.09) (0.04) (0.05)
Cumulative effect of
accounting change - - - - (0.07)
-------- -------- -------- -------- --------
Net earnings (loss) $ (0.08) $ 0.67 $ 1.37 $ 2.37 $ 1.34
======== ======== ======== ======== =======
<PAGE>
Diluted earnings (loss) per share:
Earnings from continuing
operations before
extraordinary item and
cumulative effect of
accounting change $ 0.50 $ 0.74 $ 1.25 $ 2.09 $ 1.17
Earnings (loss) from
discontinued operations (0.61) 0.19 0.14 0.25 0.28
Extraordinary item -
debt retirement 0.03 (0.26) (0.08) (0.04) (0.05)
Cumulative effect of
accounting change - - - - (0.07)
-------- -------- -------- -------- --------
Net earnings (loss) $ (0.08) $ 0.67 $ 1.31 $ 2.30 $ 1.33
======== ======== ======== ======== ========
Balance Sheet Data (at end of period):
Total assets $6,456.9 $4,673.9 $3,485.2 $3,521.8 $3,275.1
Working capital 577.5 389.1 582.6 507.6 355.2
Working capital ratio 1.6:1 1.6:1 2.7:1 2.0:1 1.9:1
Long-term debt, less
current maturities 2,638.7 1,235.2 656.8 741.7 699.1
Total debt 3,047.0 1,424.1 711.9 889.5 791.2
Stockholders' equity 1,860.4 1,935.7 1,326.2 1,090.4 883.3
Total capitalization 4,907.4 3,359.8 2,038.1 1,979.9 1,674.5
Net debt/total
capitalization 62.1% 42.4% 34.9% 44.9% 47.2%
Other Financial Data:
Cash provided by operating
activities $ 269.1 $ 563.4 $ 486.7 $ 513.8 $ 403.2
Capital expenditures 367.6 244.0 209.0 146.0 97.7
Cash dividends paid 36.6 29.7 34.5 33.2 14.7
Dividends declared per share 0.32 0.32 0.32 0.31 0.19
Book value per share 16.28 16.98 13.80 11.25 9.20
(a) Non-recurring charges include the following: (i) $195.1 million,
$114.2 million after tax benefits, or $1.00 per share, resulting
from the Company-wide profit improvement program; (ii) $44.1
million, $48.7 million after tax expense, or $0.42 per share, due
to the estimated loss on disposal of Chemicals; and (iii)
$14.0 million, $9.1 million after tax benefits, or $0.08 per share,
as a result of the loss on sale of IMC Vigoro.
(b) See Notes to Consolidated Financial Statements for a description of
acquisitions, divestitures, and non-recurring items.
<PAGE>
(c) Non-recurring charges of $183.7 million, $112.2 million after tax
benefits, or $1.19 per share, resulted from the write-down of the
historical carrying value of the Company's 25 percent interest in
Main Pass.
(d) Restated to reflect the Vigoro Merger which was accounted for as a
pooling of interests.
(e) Non-recurring charges of $84.9 million, $59.9 million after tax
benefits, or $0.62 per share, resulted from the restructuring of
the Company into a decentralized organizational structure with five
stand-alone business units immediately after the Vigoro Merger.
(f) Net earnings reflected the cumulative effect of adopting SFAS No.
112, "Employers' Accounting for Postemployment Benefits."
(g) Restated to reflect AgriBusiness as discontinued operations.
</TABLE>
- - -----------------------------------
(a) Earnings from continuing operations before non-recurring charges,
minority interest, interest charges, taxes, depreciation and
amortization, and after Phosphate Resource Partners Limited
Partnership (PLP) distributions.
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
Certain of IMC Global Inc.'s subsidiaries are listed below. These
subsidiaries are all included in the Company's consolidated financial
statements, and collectively, together with IMC Global Inc., account
for more than 90 percent of consolidated net sales, earnings from
continuing operations before income taxes.
Jurisdiction of Percent
Incorporation Ownership
------------- ---------
IMC Global Operations Inc. Delaware 100%
IMC-Agrico Company Delaware 53.5%
IMC Global Potash Holdings Inc. Delaware 100%
International Minerals & Chemical
(Canada) Global Limited Canada 100%
The Vigoro Corporation Delaware 100%
IMC AgriBusiness Inc. Delaware 100%
KCL Holdings, Inc. Delaware 100%
IMC Kalium Ltd. Delaware 100%
IMC Central Canada Potash Inc. Delaware 100%
VNH, Inc. Delaware 100%
IMC Nitrogen Company Delaware 100%
IMC Kalium Carlsbad Potash Company Delaware 100%
IMC Kalium Canada Ltd. Canada 100%
Western Ag-Minerals Company Nevada 100%
Phosphate Resource Partners Limited
Partnership Delaware 51.6%
IMC Inorganic Chemicals Inc. Delaware 100%
IMC Global Australia Pty. Ltd. Australia 100%
(Australia)
A number of subsidiaries are not shown, but even as a whole they
do not constitute a significant subsidiary.
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the following
Registration Statements of IMC Global Inc. and in the related
prospectuses of our report dated January 28, 1999 with respect to the
consolidated financial statements of IMC Global Inc. incorporated by
reference in this Annual Report (Form 10-K) for the year ended December
31, 1998.
Commission File No.
--------------------------
Form S-3 Form S-8
--------------------------
333-27287 333-00189
333-40377 333-00439
333-70797 333-22079
333-22080
333-38423
333-40377
333-40781
333-40783
333-56911
333-59685
333-59687
333-70039
333-70041
ERNST & YOUNG LLP
Chicago, Illinois
March 29,1999
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Raymond F. Bentele
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Rod F. Dammeyer
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
James M. Davidson
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Harold H. MacKay
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
David B. Mathis
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Thomas H. Roberts, Jr.
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Joseph P. Sullivan
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Richard L. Thomas
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Billie B. Turner
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Donald F. Mazankowski
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Wendell F. Bueche
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Robert E. Fowler, Jr.
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Robert W. Bruce III
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
Rene L. Latiolais
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global
Inc., a Delaware corporation (the "Company"), hereby constitutes and
appoints Robert E. Fowler, Jr., Marschall I. Smith and Rose Marie
Williams his or her true and lawful attorneys and agents, each with
full power and authority (acting alone and without the other) to
execute and deliver in the name and on behalf of the undersigned as
such Director and/or Officer, the Annual Report of the Company on Form
10-K for the fiscal year ended December 31, 1997 (the "Annual Report")
under the Securities Exchange Act of 1934, as amended, and to execute
and deliver any and all amendments to the Annual Report for filing with
the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys and agents may deem necessary or
advisable to enable the Company to comply with the securities laws of
the United States. The undersigned hereby grants unto such attorney
and agents, and each of them, full power of substitution and revocation
in the premises and hereby ratifies and confirms all that such
attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this th day of February, 1998.
---
- - -------------------------------
James R. Moffett
<TABLE> <S> <C>
<CAPTION>
<S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 24,900
<SECURITIES> 85,700
<RECEIVABLES> 427,900
<ALLOWANCES> 6,400
<INVENTORY> 580,600
<CURRENT-ASSETS> 369,900
<PP&E> 5,917,400
<DEPRECIATION> 2,220,000
<TOTAL-ASSETS> 6,456,900
<CURRENT-LIABILITIES> 905,100
<BONDS> 2,638,700
<COMMON> 125,000
0
0
<OTHER-SE> 1,735,400
<TOTAL-LIABILITY-AND-EQUITY> 6,456,900
<SALES> 2,696,200
<TOTAL-REVENUES> 2,696,200
<CGS> 1,957,800
<TOTAL-COSTS> 2,324,300
<OTHER-EXPENSES> 54,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 176,000
<INCOME-PRETAX> 141,600
<INCOME-TAX> 84,500
<INCOME-CONTINUING> 57,100
<DISCONTINUED> (69,100)
<EXTRAORDINARY> 3,000
<CHANGES> 0
<NET-INCOME> (9,000)
<EPS-PRIMARY><F1> (0.08)
<EPS-DILUTED><F1> (0.08)
<FN>
<F1>
Earnings per share has been calculated in accordance with Statement of
Financial Accounting Standard No. 128, "Earnings Per Share," and is,
therefore, stated on a basic and diluted basis.
</FN>
</TABLE>
