-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SLVnffcBKEQ044tJe2J9Y2kuhEnf3+u+ukgc4XaU63AaSaucPsoCRm9B4ahT7B2f 1S8SM5Yy63L2tckVD2RSDQ== 0000066895-97-000004.txt : 19971030 0000066895-97-000004.hdr.sgml : 19971030 ACCESSION NUMBER: 0000066895-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971029 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSISSIPPI CHEMICAL CORP /MS/ CENTRAL INDEX KEY: 0000066895 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 640292638 STATE OF INCORPORATION: MS FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12217 FILM NUMBER: 97702591 BUSINESS ADDRESS: STREET 1: P O BOX 388 CITY: YAZOO CITY STATE: MS ZIP: 39194 BUSINESS PHONE: 6017464131 MAIL ADDRESS: STREET 1: P O BOX 388 CITY: YAZOO CITY STATE: MS ZIP: 39194 FORMER COMPANY: FORMER CONFORMED NAME: MISSISSIPPI CHEMICAL CORP DATE OF NAME CHANGE: 19920703 EX-27 1
5 This schedule contains first quarter summary financial information extracted from Mississippi Chemical Corporation fiscal 1998 first quarter Form 10-Q and is qualified in its entirety by reference to such Form 10-Q filing. 0000066895 MISSISSIPPI CHEMICAL CORPORATION 1,000 3-MOS JUN-30-1998 SEP-30-1997 1,758 0 41,043 1,823 80,670 131,859 721,855 311,715 869,145 71,000 14,500 0 0 280 440,697 869,145 110,912 111,140 87,745 101,705 0 56 4,495 7,352 3,055 4,297 0 0 0 4,297 0.16 0
10-Q 2 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) Of The Securities Exchange Act of 1934 For Quarter Ended September 30, 1997 OR [ ] Transition Report Pursuant to Section 13 or 15(d) Of the Securities Exchange Act of 1934 For Quarter Ended September 30, 1997 Commission File Number 001-12217 MISSISSIPPI CHEMICAL CORPORATION Organized in the State of Mississippi Tax Identification No. 64-0292638 P. O. Box 388, Yazoo City, Mississippi 39194 Telephone No. 601+746-4131 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Number of Shares -------- ---------------- Common Stock, $0.01 par value 27,409,755 MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES INDEX Page Number ------ PART I. FINANCIAL INFORMATION: Item 1. Consolidated Financial Statements Consolidated Statements of Income 3 Three months ended September 30, 1997 and 1996 Consolidated Balance Sheets 4 - 5 September 30, 1997 and June 30, 1997 Consolidated Statements of Shareholders' Equity 6 Fiscal Year Ended June 30, 1997 and Three months ended September 30, 1997 Consolidated Statements of Cash Flows 7 Three months ended September 30, 1997 and 1996 Notes to Consolidated Financial Statements 8 - 11 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 12 - 20 PART II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K 21 Signatures 22 MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Three months ended September 30, ---------------------- 1997 1996 -------- -------- (In thousands, except per share data) Revenues: Net sales $110,912 $ 91,290 Trading loss on brokered product (297) - -------- -------- 110,615 91,290 Operating expenses: Cost of products sold 87,745 63,379 Selling 5,704 6,321 General and administrative 8,256 6,850 -------- -------- 101,705 76,550 -------- -------- Operating income 8,910 14,740 Other (expense) income: Interest, net (2,083) 422 Other 525 98 -------- -------- Income before income taxes 7,352 15,260 Income tax expense 3,055 5,965 -------- -------- Net income $ 4,297 $ 9,295 ======== ======== Earnings per share (see Note 2) $ 0.16 $ 0.44 ======== ======== Weighted average common shares outstanding (see Note 2) 27,456 21,250 ======== ========
[FN] The accompanying notes are an integral part of these consolidated financial statements. MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS September 30, June 30, 1997 1997 ------------ ---------- (In thousands, except per share data) Current assets: Cash and cash equivalents $ 1,758 $ 8,159 Accounts receivable, net 39,220 63,095 Inventories: Finished products 38,129 28,308 Raw materials and supplies 6,723 4,636 Replacement parts 35,818 36,366 --------- --------- Total inventories 80,670 69,310 Prepaid expenses and other current assets 6,357 4,873 Deferred income taxes 3,854 3,596 --------- --------- Total current assets 131,859 149,033 Investments and other assets: Investments in affiliates 70,441 69,230 Other 24,003 14,039 --------- --------- Total investments and other assets 94,444 83,269 Properties held for sale 52,919 52,919 Property, plant and equipment, at cost 721,855 697,101 Less accumulated depreciation, depletion and amortization (311,715) (304,706) --------- --------- Net property, plant and equipment 410,140 392,395 Goodwill, net of accumulated amortization 179,783 180,929 --------- --------- $ 869,145 $ 858,545 ========= =========
[FN] The accompanying notes are an integral part of these consolidated financial statements. MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) LIABILITIES AND SHAREHOLDERS' EQUITY September 30, June 30, 1997 1997 ------------ --------- (In thousands, except per share data) Current liabilities: Long-term debt due within one year $ 140 $ 140 Accounts payable 55,665 74,534 Accrued liabilities 12,456 14,476 Income taxes payable 2,739 5,973 -------- -------- Total current liabilities 71,000 95,123 Long-term debt 276,194 244,516 Other long-term liabilities and deferred credits 21,852 20,620 Deferred income taxes 59,122 58,857 Shareholders' equity: Common stock ($.01 par; authorized 100,000 shares; issued 27,976 in fiscal 1998 and 1997) 280 280 Additional paid-in capital 305,882 305,901 Retained earnings 147,382 145,827 Treasury stock, at cost (566 shares in fiscal 1998 and 1997) (12,567) (12,579) -------- -------- 440,977 439,429 -------- -------- $869,145 $858,545 ======== ========
[FN] The accompanying notes are an integral part of these consolidated financial statements. MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY SEPTEMBER 30, 1997 Additional Common Paid-In Retained Treasury Stock Capital Earnings Stock Total ------- ---------- -------- -------- -------- (In thousands) Balances, July 1, 1996 $ 229 $178,364 $ 99,814 $(30,582) $247,825 Net income - - 55,815 - 55,815 Cash dividends paid - - (9,802) - (9,802) Treasury stock, net - 56 - (18,753) (18,697) Stock options exercised - 203 - - 203 Stock issued for business acquired 51 127,278 - 36,756 164,085 ------- -------- -------- -------- -------- Balances, June 30, 1997 280 305,901 145,827 (12,579) 439,429 Net income - - 4,297 - 4,297 Cash dividends paid - - (2,742) - (2,742) Treasury stock, net - (19) - 12 (7) ------- -------- -------- -------- -------- Balances, September 30, 1997 $ 280 $305,882 $147,382 $(12,567) $440,977 ======= ======== ======== ======== ========
[FN] The accompanying notes are an integral part of these consolidated financial statements. MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended September 30, -------------------- 1997 1996 -------- --------- (In thousands) Cash flows from operating activities: Net income $ 4,297 $ 9,295 Reconciliation of net income to net cash used by operating activities: Net change in operating assets and liabilities (18,006) (25,647) Depreciation, depletion and amortization 9,070 4,434 Deferred income taxes 342 945 Other (427) (1,751) -------- --------- Net cash used in operating activities (4,724) (12,724) -------- --------- Cash flows from investing activities: Purchase of property, plant and equipment (20,698) (56,632) Proceeds received from option 1,000 1,000 Investment in Farmland MissChem Limited (967) (25,968) Restricted funds (9,945) - Other 102 (60) -------- --------- Net cash used in investing activities (30,508) (81,660) -------- --------- Cash flows from financing activities: Debt payments (81,222) (14,304) Debt proceeds 112,900 69,213 Cash dividends paid (2,742) (2,133) Purchase of treasury stock (105) (6,306) -------- --------- Net cash provided by financing activities 28,831 46,470 -------- --------- Net decrease in cash and cash equivalents (6,401) (47,914) Cash and cash equivalents - beginning of period 8,159 60,214 -------- --------- Cash and cash equivalents - end of period $ 1,758 $ 12,300 ======== =========
[FN] The accompanying notes are an integral part of these consolidated financial statements. MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - INTERIM FINANCIAL STATEMENTS The accompanying consolidated financial statements of Mississippi Chemical Corporation and its subsidiaries ("the Company") have been prepared by the Company, without audit. In the opinion of the Company's management, the financial statements reflect all adjustments necessary to present fairly the results of operations for the three months ended September 30, 1997 and 1996, the Company's financial position at September 30, 1997 and June 30, 1997, the cash flows for the three months ended September 30, 1997 and 1996, and the consolidated statements of shareholders' equity as of September 30, 1997. These adjustments are of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the interim periods. Certain notes and other information have been condensed or omitted from the interim financial statements presented in the Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the Company's 1997 Form 10-K and the consolidated financial statements and notes thereto included in the Company's June 30, 1997, audited financial statements. Due to the seasonal nature of the Company's business, the results of operations for the period ended September 30, 1997, are not necessarily indicative of the operating results for the full fiscal year. NOTE 2 - EARNINGS PER SHARE The number of shares used in the earnings per share computation are the weighted average number of common shares outstanding plus dilutive common stock equivalents as follows: Three months ended September 30, ------------------ 1997 1996 ------- -------- (In thousands) Weighted average common shares outstanding, net of treasury shares 27,409 21,199 Common stock equivalents for employee stock options 47 51 ------ ------ 27,456 21,250 ====== ======
In July 1997, the Company's board of directors declared a regular quarterly cash dividend of $0.10 per common share for the three-month period ending June 30, 1997. This dividend was paid on September 2, 1997, to holders of record on August 20, 1997. In October 1997, the Company's board of directors declared a regularly quarterly cash dividend of $0.10 per common share for the three-month period ending September 30, 1997. This dividend will be payable on November 24, 1997, to holders of record on November 4, 1997. NOTE 3 - COMMITMENTS AND CONTINGENCIES During 1990, the Company entered into an agreement granting a third party the exclusive option, for a period of four years, to purchase the Company's undeveloped phosphate rock property of approximately 12,000 acres in Hardee County, Florida. On July 12, 1994, the Company and the option holder entered into new agreements with respect to this property whereby the Company conveyed a portion of the property to the third party and granted to the third party the exclusive option to purchase the remaining portion of the property. In addition, the Company was granted a put option whereby the Company has the right and option to sell the remaining portion of the property to the third party if the third party does not exercise its option to purchase the remaining property; and was granted an exclusive option to repurchase the previously conveyed portion in the event the third party does not exercise its option and the Company does not exercise its put option. The third party's option will expire on January 16, 1998. The Company's put option will expire six months after the third party's option expires, and its repurchase option will expire one year after the Company's put option expires. These properties are classified as property held for sale at September 30, 1997 and June 30, 1997. The Company has entered into a 50-50 joint venture known as Farmland MissChem Limited with Farmland Industries, Inc., to construct and operate a 2,040-short-ton-per-day anhydrous ammonia plant to be located near Point Lisas, The Republic of Trinidad and Tobago. The project is expected to cost approximately $330 million. The portion of the project cost in excess of required equity contributions of 35% is to be financed by the joint venture on a nonrecourse project basis. Start-up of the facility is scheduled for late spring 1998. The Company has entered into a contract to purchase one-half of the ammonia, approximately 350,000 short-tons-per-year, produced by the plant at a purchase price which approximates market price but is subject to an agreed-upon floor price. The Company intends to use its portion of the production from the new facility as a raw material for upgrading into finished fertilizer products at its existing facilities and for sales into world markets. The Company is accounting for this investment using the equity method. In late fiscal 1996, the Company began an expansion at its nitrogen fertilizer manufacturing facilities at Yazoo City. The project includes the addition of a 650-ton-per-day nitric acid plant, a new 500-ton-per-day ammonia plant and modifications to its ammonium nitrate plant to increase production from approximately 750,000 to approximately 950,000 tons per year. The Company estimates total cost of the expansion to be $130 million and is scheduled for a phased completion with the nitric acid, anhydrous ammonia, and the majority of the ammonium nitrate capacity being added in the first half of 1998. Total project completion is anticipated in early 1999. The Company has begun construction of a new phosphogypsum disposal facility at Pascagoula that is expected to be operational by spring 1998 at an estimated cost of $17 million. In July 1997, the Company also initiated construction of an expansion of its diammonium phosphate manufacturing facilities at Pascagoula. This project, which is expected to cost approximately $10.5 million, will increase diammonium phosphate production from approximately 720,000 to 900,000 tons per year and will increase product storage capacity from approximately 40,000 to 80,000 tons. It is expected that this expansion will be fully operational by the end of fiscal 1998. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following discussion and analysis should be read in conjunction with the attached consolidated financial statements and notes thereto, and with the Company's audited financial statements and notes thereto for the fiscal year ended June 30, 1997. The usage of fertilizer in the Company's trade territory is highly seasonal, and the Company's quarterly results reflect the fact that in the Company's markets significantly more fertilizer is purchased in the spring. Significant portions of the Company's net sales and operating income are generated in the last four months of the Company's fiscal year (March through June). Since interim period operating results reflect the seasonal nature of the Company's business, they may not necessarily be indicative of results expected for the full fiscal year. In addition, quarterly results can vary significantly from year to year due to a number of factors, including weather- related shifts in planting schedules and purchase patterns. The Company incurs substantial expenditures for fixed costs throughout the year and substantial expenditures for inventory in advance of the spring planting season. The Company's results for the quarter ended September 30, 1997, reflect weak pricing for all of the Company's nitrogen products. The lower prices are primarily the result of China's continued ban on urea imports, which contributed to a 20% decrease in the price of urea during the current period as compared to the same prior year period. As the price of urea decreased, the prices for the Company's other nitrogen products decreased as well. Although prices remain at depressed levels, by quarter's end some of the pressure on urea prices had eased due to production curtailments in certain producing countries. During the current year quarter, sales volumes for the Company's nitrogen products were below expectations. Nitrogen solutions sales volumes decreased 92% during the current period as customers were hesitant to participate in the Company's traditional fall-fill programs due to fertilizer pricing uncertainties. This resulted in the Company placing increased tonnage in consignment inventory during the current period. This consignment inventory will be purchased by customers later in the year at then prevailing market prices. Sales volumes for the Company's ammonium nitrate were lower during the current year primarily due to unusually dry weather in the Company's trade area. This dry weather adversely impacted the application of ammonium nitrate to hay and forage crops during August and September of the current quarter. Ammonia and urea sales volumes for the Company increased during the quarter primarily due to the additional tons available for sale through the acquisition of the First Mississippi Corporation ("First Mississippi") fertilizer assets in December 1996. Phosphate prices were lower during the current year due to soft international demand which has been present in the marketplace since early summer 1997. The Company's potash sales prices and volumes increased during the current year as a result of increased domestic demand and the additional tonnage available for sale due to the Company's acquisition of Trans-Resources, Inc.'s potash assets in mid-August 1996. With world grain inventories remaining at low levels, most industry analysts expect increases in U.S. planted acres and fertilizer consumption during 1998. Despite the prospect of higher U.S. demand, the near-term nitrogen price outlook remains uncertain due to the present worldwide urea supply/demand imbalance and the expected availability of new nitrogen capacity in early 1998. During the current year, the Company experienced increased costs at its Yazoo City nitrogen facility due to a scheduled biennial maintenance turnaround. In July of the current year, the Company's DAP facility in Pascagoula also incurred $.5 million in costs as a result of hurricane Danny. In May 1995, the Board of Directors authorized the purchase of up to 1,500,000 shares of the Company's common stock in the open market or in privately negotiated transactions. In March 1996, the Board of Directors authorized the Company to repurchase up to 1,500,000 additional shares. As of September 30, 1997, the Company had repurchased a total of 2,420,809 shares pursuant to those authorizations. The unused authorization to repurchase 579,191 shares remains available to the Company. Effective October 1, 1997, the Company became a member of the Phosphate Chemicals Export Association, Inc., a Webb-Pomerene corporation known as PhosChem. All of the Company's export sales of DAP will be made through PhosChem. Also effective October 1, 1997, all domestic sales of DAP will be made through the Company's internal sales staff. The Company has ended its exclusive DAP marketing agreement with Atlantic Fertilizer & Chemical Corporation. RESULTS OF OPERATIONS Following are summaries of the Company's sales results by product categories: Three months ended September 30, --------------------- 1997 1996 -------- -------- Net Sales (in thousands): Nitrogen $ 57,982 $ 48,745 DAP 30,957 31,021 Potash 21,577 10,859 Other 396 665 -------- -------- Net Sales $110,912 $ 91,290 ======== ======== Three months ended September 30, ---------------------- 1997 1996 -------- -------- Tons Sold (in thousands): Nitrogen: Ammonia 150 7 Ammonium nitrate 115 139 Urea 118 58 Nitrogen solutions 11 131 Nitric acid 10 8 ----- ----- Total Nitrogen 404 343 DAP 178 171 Potash 267 143 Three months ended September 30, --------------------- 1997 1996 ------- ------- Average Sales Price Per Ton: Nitrogen $ 143 $ 142 DAP $ 174 $ 181 Potash $ 81 $ 76
NET SALES. Net sales increased 21% to $110.9 million for the quarter ended September 30, 1997, from $91.3 million for the quarter ended September 30, 1996, primarily as a result of increased sales volumes for nitrogen and potash, partially offset by lower sales prices for nitrogen. Nitrogen fertilizer sales increased 19% due primarily to an 18% increase in tons sold. The volume increase is attributable to an increase in anhydrous ammonia and urea sales due to the acquisition of First Mississippi in December 1996, which was partially offset by lower sales volumes of nitrogen solutions and ammonium nitrate. Nitrogen solution sales volumes decreased 92% during the current year as a result of customers not enrolling in the Company's traditional fall-fill program due to pricing uncertainties. Ammonium nitrate sales volumes were lower due to unusually dry weather in the Company's trade area in August and September of the current quarter. During the current quarter, the Company's sales prices for its anhydrous ammonia, ammonium nitrate, urea and nitrogen solutions decreased 26%, 12%, 20% and 18%, respectively; however, due to the sales product mix, the Company's weighted average price per ton of nitrogen increased 1% for the current quarter. DAP sales did not change significantly for the current quarter. The Company's 4% increase in DAP sales volumes was offset by a 4% decrease in sales price. The lower sales price is attributable to soft international demand which has been present in the marketplace since early summer 1997. Potash sales increased 99% as a result of an 87% increase in tons sold and a 7% increase in the average price per ton. These increases are the result of continued strengthening in domestic markets and the additional tons available for sale in the current year as a result of the potash acquisitions made in mid-August 1996. TRADING LOSS ON BROKERED PRODUCT. Following the First Mississippi acquisition in December 1996, the Company routinely trades or brokers ammonia in the open market. During the current quarter, brokered ammonia sales of $6.3 million and purchases of approximately $6.6 million resulted in a $.3 million net loss. The Company brokered approximately 41,000 short tons. COST OF PRODUCTS SOLD. Cost of products sold increased to $87.7 million for the quarter ended September 30, 1997, from $63.4 million for the quarter ended September 30, 1996. As a percentage of net sales, cost of products sold increased to 79% from 69%. This increase in cost of products sold, as a percentage of net sales in the current year quarter, is primarily the result of decreases in the average sales price of each of the Company's nitrogen products. During the quarter, the Company also had increased sales of potash products which have a higher percentage of cost to sales. The Company also incurred higher costs per ton for its nitrogen products in the current year quarter primarily as a result of higher maintenance and labor costs due to a scheduled biennial maintenance turnaround at the Company's Yazoo City nitrogen facility and higher depreciation associated with the First Mississippi acquisition. These factors were partially offset by lower natural gas costs which were achieved through gains on short-term natural gas futures contracts. During the current year quarter, DAP costs per ton decreased slightly as a result of lower costs for phosphate rock, partially offset by higher sulfur costs. Phosphate rock costs decreased due to the Company's phosphate rock supply contract, which is based on the phosphate rock costs incurred by certain other domestic phosphate producers and the financial performance of the Company's phosphate operations. SELLING EXPENSES. Selling expenses decreased to $5.7 million for the quarter ended September 30, 1997, from $6.3 million for the quarter ended September 30, 1996. This decrease was primarily the result of lower delivery expense incurred during the current quarter due to lower sales volumes for nitrogen solutions and ammonium nitrate. This decrease was partially offset by higher costs for sales administration and storage. Sales administration costs increased due to the Company's potash acquisitions and the acquisition of First Mississippi's fertilizer businesses made during the prior fiscal year. The higher storage cost was primarily due to an increase in tonnage placed into storage at the Company's outlying storage facilities. As a percentage of net sales, selling expenses decreased to 5% for the quarter ended September 30, 1997, from 7% for the quarter ended September 30, 1996. GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses increased to $8.3 million for the quarter ended September 30, 1997, from $6.9 million for the quarter ended September 30, 1996. This increase was primarily the result of the amortization of goodwill associated with the acquisition of First Mississippi in December 1996. As a percentage of net sales, general and administrative expenses decreased to 7% for the quarter ended September 30, 1997, from 8% for the quarter ended September 30, 1996. OPERATING INCOME. As a result of the above factors, operating income decreased to $8.9 million for the quarter ended September 30, 1997, from $14.7 million for the quarter ended September 30, 1996, a 40% decrease. INTEREST, NET. For the quarter ended September 30, 1997, net interest expense was $2.1 million compared to net interest income of $.4 million for the quarter ended September 30, 1996. This increase in net interest expense was primarily due to increased interest costs resulting from higher borrowing levels during the current year. Additionally, the Company capitalized $2.0 million and $.3 million of its interest costs for the quarters ended September 30, 1997, and September 30, 1996, respectively. INCOME TAX EXPENSE. For the quarter ended September 30, 1997, income tax expense decreased to $3.1 million from $6.0 million for the quarter ended September 30, 1996. This decrease was primarily the result of changes in earnings during the current year. Also, during the current year, the Company incurred a higher effective tax rate due to the nondeductible amortization of goodwill. This increase was partially offset by a decrease in the Company's effective state income tax rate during the current year. NET INCOME. As a result of the foregoing, net income decreased to $4.3 million for the quarter ended September 30, 1997, from $9.3 million for the quarter ended September 30, 1996. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1997, the Company had cash and cash equivalents of $1.8 million, compared to $8.2 million at June 30, 1997, a decrease of $6.4 million. OPERATING ACTIVITIES. For the three months ended September 30, 1997, net cash used in operating activities was $4.7 million compared to $12.7 million for the three months ended September 30, 1996. INVESTING ACTIVITIES. Net cash used in investing activities was $30.5 million for the three months ending September 30, 1997, and $81.7 million for the three months ended September 30, 1996, primarily reflecting capital expenditures in those periods. During the current year period, capital expenditures were $20.7 million compared to $56.6 million during the prior year. The current year expenditures consisted of approximately $16.0 million related to the Company's nitrogen expansion project at its Yazoo City facility, approximately $1.0 million for the development of a new phosphogypsum disposal facility at the Pascagoula facility, and approximately $1.0 million related to the expansion of its manufacturing facilities at the Pascagoula facility. The remaining $2.7 million was for normal improvements and modifications to the Company's facilities. The current year period also included $1.0 million related to the Company's investment in Farmland MissChem Limited compared to $26.0 million during the prior year. These expenditures were partially offset by the receipt of option payments relating to the Company's Florida phosphate rock properties. At September 30, 1997, the Company also had $9.9 million in restricted funds resulting from the Company's August 1997 issuance of $14.5 million in industrial revenue bonds. The proceeds from these bonds will be used for the Company's development of a new phosphogypsum disposal facility at its Pascagoula, Mississippi, DAP facility. FINANCING ACTIVITIES. Net cash provided by financing activities was $28.8 million for the three months ended September 30, 1997, and $46.5 million for the three months ended September 30, 1996. During the current year, the amounts provided by financing activities included $112.9 million in debt proceeds, which included $14.5 million in industrial revenue bonds, partially offset by $81.2 million in debt payments, and $2.7 million in cash dividends. During the prior year, the amounts provided by financing activities included $69.2 million in debt proceeds partially offset by $14.3 million in debt payments, $6.3 million for the purchase of treasury stock and $2.1 million in cash dividends. At September 30, 1997, the Company and its subsidiaries had unsecured revolving credit facilities with Harris Trust and Savings Bank and a syndicate of other commercial banks totaling $300 million. These facilities are five-year facilities which mature on December 23, 2001, and bear interest at the Prime Rate or at rates related to the London Interbank Offered Rate. At September 30, 1997, the Company had $261.6 million outstanding under these facilities, which represented the maximum amount outstanding at any month end during the current period. The Company also has a separate $5 million short-term line of credit with another financial institution. On October 23, 1997, the Company filed with the Securities and Exchange Commission a registration statement relating to debt securities with an aggregate principal amount of up to $300 million. The Company believes that existing cash, cash generated from operations, current lines of credit and anticipated sale of debt securities will be sufficient to satisfy its financing requirements for is operations and its capital projects through fiscal 1998. The Company estimates its capital expenditure requirements for the remainder of fiscal 1998 to be approximately $100.0 million. The Company's major capital projects include production expansions at its nitrogen facility in Yazoo City and its DAP facility in Pascagoula. The Company's Pascagoula facility is also constructing a new phosphogypsum disposal facility. This report contains forward-looking statements. Readers are cautioned that actual results may differ materially from such forward-looking statements. Forward-looking statements involve risks and uncertainties, including, but not limited to, the relative unpredictability of changes in general economic conditions and other important factors affecting the fertilizer industry and the Company as detailed under "Outlook and Uncertainties" and elsewhere in the Company's annual report on Form 10-K for the fiscal year ended June 30, 1997, which is on file with the Securities and Exchange Commission. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits filed as part of this report are listed below. SEC Exhibit Reference No. Description Exhibit Index to Form 10-Q 10.14 Anhydrous Ammonia Purchase Agreement (AMRO) dated as of October 18, 1996, among Mississippi Chemical Corporation, Farmland Industries, Inc., and Farmland MissChem Limited whereby Mississippi Chemical Corporation and Farmland Industries, Inc., on an individual basis, will purchase from Farmland MissChem Limited, a portion of the total anhydrous ammonia output produced by its facility located on the island of Trinidad in The Republic of Trinidad and Tobago, which Agreement will be in place during the term of the AMRO permanent financing facility. 10.15 Anhydrous Ammonia Purchase Agreement (EX-IM) dated as of October 18, 1996, among Mississippi Chemical Corporation, Farmland Industries, Inc., and Farmland MissChem Limited whereby Mississippi Chemical Corporation and Farmland Industries, Inc., on an individual basis, will purchase from Farmland MissChem Limited, a portion of the total anhydrous ammonia output produced by its facility located on the island of Trinidad in The Republic of Trinidad and Tobago, which Agreement will be in place during the term of the EximBank permanent financing facility. 23 Consent of Arthur Andersen LLP; filed as Exhibit 23 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1997, SEC File No. 1-12217, and incorporated herein by reference. 27 Financial Data Schedule. (b) No reports on Form 8-K have been filed during the quarter for which this report is filed. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MISSISSIPPI CHEMICAL CORPORATION Date: October 29, 1997 /s/ Timothy A. Dawson ---------------- --------------------- Timothy A. Dawson Vice President - Finance Date: October 29, 1997 /s/ Rosalyn B. Glascoe ---------------- ---------------------- Rosalyn B. Glascoe Corporate Secretary EX-10 3 EXHIBIT 10.14 ANHYDROUS AMMONIA PURCHASE AGREEMENT (AMRO) This ANHYDROUS AMMONIA PURCHASE AGREEMENT dated as of October 18, 1996, among MISSISSIPPI CHEMICAL CORPORATION, a Mississippi corporation, together with its successors and permitted assigns ("MCC"), FARMLAND INDUSTRIES, INC., a Kansas corporation, together with its successors and permitted assigns ("Farmland"), and FARMLAND MISSCHEM LIMITED, a limited liability company organized under The Companies Ordinance of The Republic of Trinidad and Tobago, together with its successors and permitted assigns ("Seller"). W I T N E S S E T H: WHEREAS, Seller is developing and will own and operate an anhydrous ammonia production facility which will be located on the island of Trinidad in The Republic of Trinidad and Tobago, and which is expected to be capable of producing approximately 650,000 tonnes of anhydrous ammonia per year; and WHEREAS, Seller wishes to sell its total anhydrous ammonia output to MCC and Farmland, and MCC and Farmland wish to purchase from Seller, each on an individual but not joint basis, a portion of the total anhydrous ammonia output produced by the Facility, in accordance with the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller, MCC and Farmland hereby mutually agree as follows: ARTICLE 1 DEFINITIONS 1.1 Definitions. Each of the following capitalized terms when used herein shall have the meaning indicated below: "Accumulation Account" means a notional account established for each Buyer on the books of Seller to which are credited (a) all Excess payments made by such Buyer pursuant to Section 2.6.1 and (b) all Dollar Credits earned by such Buyer pursuant to Section 2.5.2. "Adjusted Price" means the Ammonia Market Price less five percent (5%). "Agreement" means this Anhydrous Ammonia Purchase Agreement dated as of October 18, 1996, among MCC, Farmland and Seller, including all Exhibits hereto, as such may be amended, supplemented, restated, novated, renewed or modified from time to time. "Ammonia Floor Price" means $(confidential treatment has been requested) USD per tonne of Delivered Product or Deemed Delivered Product for the period from the date hereof until the Facility 2 Conversion Date and thereafter, with respect to each Year, means the Ammonia Floor Price per tonne for Delivered Product or Deemed Delivered Product as determined in accordance with Exhibit A hereto. "Ammonia Market Price" means, as of any particular date, the price for anhydrous ammonia determined in accordance with Section 2.6.3. "Bill of Lading" means a bill of lading to be issued by the master of each Buyer's Vessel promptly after the completion of loading of such Buyer's Vessel setting forth (a) the respective dates and times of commencement and completion of loading of Buyer's Vessel; (b) the total quantity of Delivered Product; and (c) such other information as may be required pursuant to the charter party for the Buyer's Vessel and otherwise pursuant to applicable law and shipping industry practice. "Business Day" means a day on which business by and among banks may be carried on in The Republic of Trinidad and Tobago, New York City, Mississippi and Missouri, but in no event shall it include a Saturday or a Sunday. "Buyer" means either MCC or Farmland, as the case may be, and "Buyers" means both MCC and Farmland. "Buyer-Caused Shutdown" means a shutdown of the Facility caused solely by failure of a Buyer to take Tendered Product at a time when Seller's Storage Tanks are full, which failure was not excused by Limited Force Majeure. "Buyer Payment Failure" means the failure of a Buyer, which failure has continued for at least ten (10) Business Days, to make payment for Tendered Product or Deemed Delivered Product when due under this Agreement. "Buyer's Vessels" means any ocean-going vessels owned, controlled or hired by a Buyer for purposes of transporting Product. "Challenged Amount" has the meaning set forth in Section 3.3. "Commencement Date" means the date following the earlier to occur of Provisional Completion or Substantial Completion. "Consent and Agreement" has the meaning set forth in Section 11.1.3. "Coordinating Committee" means the Savonetta Pier Coordinating Committee comprised of representatives of NGC, NEC, Seller and any other participant as may be advised by NGC and NEC from time to time. "Deemed Delivered Product" means, with respect to any particular time period during which a Buyer Payment Failure is not in existence, the aggregate tonnage of Product that Seller was unable to produce during such time period solely as a result of a Buyer-Caused Shutdown; provided that Deemed Delivered Product for any particular time period shall not exceed the product of (a) 1600 tonnes and (b) the number of days or portions thereof (rounded to the nearest hour) of Buyer-Caused Shutdown within such period. "Deliver," "Delivery" and "Deliveries" refer to the actual transmission of Product by Seller to a Buyer at the Delivery Point. "Delivered Product" means Product actually Delivered to a Buyer pursuant to this Agreement. For the sole purpose of determining which week's Ammonia Market Price is in effect, Product is considered to be Delivered Product upon completion of loading of the Buyer's Vessel upon which such Product is to be transported, as evidenced by the relevant Bill of Lading. "Delivery Point" means the flanged inlet pipe of a Buyer's Vessel. "Delivery Shortfall" has the meaning set forth in Section 3.1.4. "Dollar" or "$" means United States dollars. "Dollar Credit" means the credit, expressed in Dollars, accorded to a particular Buyer pursuant to Section 2.5.2 in connection with all payments by such Buyer wiht respect to Deemed Delivered Product. "EPC Contract" means that certain Engineering, Procurement and Construction Contract dated as of December 20, 1995, between Seller and The M. W. Kellogg Company, as may be amended, supplemented, novated, suspended, restated or modified from time to time. "Excess" has the meaning set forth in Section 2.6.1. "Eximbank Conversion Date" means the date of funding of a direct term loan for the Facility provided by the Export-Import Bank of the United States pursuant to the Financing Documents to which it is a party. "Facility" means the anhydrous ammonia production facility (including the Seller's Storage Tanks and the facilities used to transport Product to the Delivery Point) to be designed, financed, constructed, owned, maintained and operated by Seller on the island of Trinidad in The Republic of Trinidad and Tobago, with a designed production capacity of approximately 650,000 tonnes of anhydrous ammonia per Year. "Facility 2 Conversion Date" means the date on which Facility 1 (as defined in the Financing Documents) is converted to Facility 2 (as defined in the Financing Documents). "Farmland" has the meaning set forth in the preamble to this Agreement. "Financing Documents" has the meaning set forth in Section 11.1.3. "Force Majeure" means any occurrence or circumstance (a) which is beyond the control of the Party affected thereby, (b) which is not the result of fault or negligence on the part of the Party affected thereby, and (c) whose effects could not have been avoided or overcome by exercise of due diligence and reasonable efforts on the part of the Party affected thereby. Lack of funds, market fluctuations or unfavorable market conditions shall not under any circumstances be considered Force Majeure. "Lender" means the financial institutions providing construction and/or permanent financing for the Facility pursuant to the Financing Documents. "Limited Force Majeure" means any occurrence or circumstance that would be encompassed within the definition of Force Majeure set forth in this Agreement, excepting: (a) maritime casualties to Buyers' Vessels (other than as such casualties result from war), (b) weather conditions to the extent such conditions impair movement of Buyers' Vessels, (c) labor disturbances carried out by Buyers' employees or the crew of Buyers' Vessels, (d) commercial unavailability of suitable ocean transport vessels with which to take timely receipt of Tendered Product (other than as such unavailability results from war), or (e) unavailability of the port or other receiving facilities at which Buyer's Vessels are intended to be unloaded. "MCC" has the meaning set forth in the preamble to this Agreement. "Month" means, with respect to the first Month after the Commencement Date, the period commencing on the Commencement Date and ending at 12:00 midnight on the last day of the first complete calendar month to follow the Commencement Date, and thereafter means each succeeding calendar Month during the remainder of the Term. "NEC" means The National Energy Corporation Limited, a company incorporated under the laws of The Republic of Trinidad and Tobago, together with its successors and permitted assigns. "NGC" means The National Gas Company of Trinidad and Tobago Limited, a company incorporated under the laws of The Republic of Trinidad and Tobago, together with its successors and permitted assigns. "Parties" means Buyers and Seller, collectively, and "Party" means either of the Buyers or Seller, individually, as the case may be. "Performing Buyer" means, with respect to any period in which there is a Buyer Payment Failure, the Buyer which did not commit the Buyer Payment Failure. "Pier" has the meaning set forth in the Pier and Harbour Usage Agreement. "Pier and Harbour Usage Agreement" means the Pier and Harbour Usage Agreement, dated October 18, 1996, among NGC, NEC and Seller as such may be amended, supplemented, novated, suspended, extended or modified from time to time. "PLIPDECO" means the Point Lisas Industrial Port Development Corporation Limited, a company duly incorporated under The Companies Ordinance Chapter 31 No. 1 of the 1950 Laws of Trinidad and Tobago and having its registered office at PLIPDECO House, Orinoco Drive, Point Lisas Industrial Estate, Couva, in the Island of Trinidad. "Product" means anhydrous ammonia produced at the Facility. "Provisional Completion" means the Facility's achievement of "Provisional Completion" in accordance with (and as that term is defined in) the EPC Contract. "Seller's Storage Tanks" means the two 40,000-tonne capacity tanks in which Seller stores Product. "Substantial Completion" means the Facility's achievement of "Substantial Completion" in accordance with (and as that term is defined in) the EPC Contract. "Tendered Product" means, without double counting, Product that is immediately available in Seller's Storage Tanks for Delivery to a Buyer. "Term" means the period commencing on the date hereof and expiring on the earlier of the Eximbank Conversion Date or the date which is twelve (12) Years after the Facility 2 Conversion Date (unless terminated pursuant to Section 8.2). "Tonnage Credit" means the credit, expressed in tonnes, accorded to a particular Buyer pursuant to Section 2.5.1 in connection with all payments made by such Buyer with respect to Tendered Product which is not Delivered but paid for pursuant to Section 2.3 or Section 2.4. Tonnage Credits must be used against the next available Product delivery. "tonne" means a metric ton of 2,204.6 pounds. "Year" means, with respect to the first Year, the period commencing on the Commencement Date and ending at 12:00 midnight on the last day of the twelfth Month to follow the Commencement Date, and thereafter means each succeeding twelve (12) Month period during the remainder of the Term. ARTICLE 2 PURCHASE AND SALE OF PRODUCT 2.1 Purchase and Sale; Right of First Refusal. Seller agrees to sell and Deliver Product to Buyers, and each Buyer agrees to purchase and accept Delivery of Product from Seller, in accordance with the terms and conditions of this Agreement. Buyers shall have a right of first refusal to all Product and, except as expressly authorized by this Agreement, Seller shall not sell or otherwise transfer Product to any person or entity other than Buyers without Buyers' prior written consent. During the pendency of any Buyer-Caused Shutdown, or a Buyer Payment Failure, or an event of default by a Buyer, or an event of Force Majeure which prevents or impairs a Buyer's performance of its obligations hereunder, Seller may sell Product otherwise reserved for such Buyer pursuant to this Agreement and in excess of amounts which such Buyer is then able to accept from Seller to persons or entities other than such Buyer for the duration of such event (including completion of delivery of Product sold to a third party which sale commenced prior to the end of such event), provided that Seller shall first have offered such Product to the other Buyer. 2.2 Scheduling of Production and Lifting. 2.2.1 Scheduling of Seller's Production. Seller shall use reasonable efforts, under normal operating conditions for the Facility, to maximize Facility output and maintain a steady flow of Tendered Product, but the Parties acknowledge that production may be reduced as necessary from time to time to accommodate scheduled or unscheduled maintenance, emergencies or other operational constraints. Seller shall plan periods of scheduled maintenance with Buyers so as to coordinate, to the greatest extent practicable, and subject to Seller's obligation under the Financing Documents, reductions in the Facility output with Buyers' scheduling requirements for Deliveries of Product. Buyers and Seller shall cooperate to the extent practicable in the scheduling of Deliveries to take into account the shipping requirements of each Buyer and the capacity of Seller's Storage Tanks. 2.2.2 Scheduling of Buyers' Lifting. It is recognized by the Parties that due to the location of the Facility, ocean transportation will be required to deliver Tendered Product to the markets where it will be sold or used by each Buyer. Transportation and other activities on Buyers' side of the Delivery Point will be Buyers' sole responsibility. Additionally, and without prejudice to each Buyer's respective obligations under Sections 2.3 and 2.4, it is recognized by the Parties that due to the differing sizes of Buyer's Vessels, it will not be possible for each Buyer to purchase exactly fifty percent (50%) of the Tendered Product available at any given time or over any given period of time. Prior to the Commencement Date, Buyers will determine which Buyer will take delivery of the first Tendered Product (and if they are unable to agree, it will be Farmland), and thereafter, it will be the obligation of whichever Buyer has taken Delivery in the aggregate of the lesser amount of Tendered Product to take Delivery of and pay for the next available Tendered Product. 2.3 Buyer's Obligation Prior to Buyer-Caused Shutdown or Buyer Payment Failure. During any period in which no Buyer-Caused Shutdown or Buyer Payment Failure is in effect, Buyers shall take Delivery of and pay for all Tendered Product, in accordance with the provisions of this Agreement, except to the extent that such obligation may be suspended by the occurrence of Limited Force Majeure; provided, however, that the failure of Buyers to take Delivery of Tendered Product shall not be an event of default for so long as Buyers perform their obligations under Section 2.4.1 or 2.4.2 as applicable. 2.4 Effect of Buyer-Caused Shutdown and Buyer Payment Failure. 2.4.1 Buyers' Obligations During Buyer-Caused Shutdown. In addition to the obligations of Buyers under Section 2.3, but subject to Section 2.4.2, each Buyer shall, with respect to each Buyer-Caused Shutdown, pay for (a) fifty percent (50%) of the Deemed Delivered Product and (b) fifty percent (50%) of the undelivered Tendered Product attributable to such Buyer-Caused Shutdown. Each such amount shall be priced as provided in Section 2.6 and shall be billed and payable pursuant to Article 3. 2.4.2 Rights and Obligations of Performing Buyer after Buyer Payment Failure. During the existence of a Buyer Payment Failure, in lieu of the obligations set forth in Sections 2.3 and 2.4.1, but subject to Lender's rights under the Consent and Agreement, the Performing Buyer shall be obligated, except to the extent that such obligation may be suspended by Limited Force Majeure, to take or pay for if not taken the lesser of (a) all Tendered Product or (b) 27,000 tonnes per Month of Tendered Product (appropriately prorated for any Month in which a Buyer Payment Failure is in effect for only part of the Month). Upon occurrence and during the existence of a Buyer Payment Failure, the Performing Buyer shall have a right of first refusal to purchase all or any portion of Tendered Product in excess of 27,000 tonnes per Month. All amounts of Tendered Product taken or paid for pursuant to this Section 2.4.2 shall be priced as set forth in Section 2.6.1 and shall be billed and payable pursuant to Article 3. 2.5 Buyers' Make-Up Rights. 2.5.1 Tonnage Credits. Each Buyer shall receive a Tonnage Credit in connection with all payments made by such Buyer, pursuant to Section 2.3 or Section 2.4, for Tendered Product which is not Delivered Product, provided such payment is not then held in the escrow account for Challenged Amounts described in Section 3.3. Such credit shall entitle whichever Buyer made such payment to receive, without further payment, future Delivery of the same tonnage of Product as was covered by the payment in question in accordance with Section 3.2.2. Any Tonnage Credits outstanding as of the end of the Term shall entitle the Buyer holding such Tonnage Credits to take Delivery of a corresponding tonnage of Tendered Product at Buyer's convenience at or after the end of the Term, but upon reasonable advance notice to Seller, until such Tonnage Credits have been fully utilized. 2.5.2 Dollar Credits. Each Buyer shall receive a Dollar Credit (which shall be credited to such Buyer's Accumulation Account) in connection with all payments made by such Buyer with respect to Deemed Delivered Product, provided such payment is not then held in the escrow account for Challenged Amounts described in Section 3.3. Such credit shall entitle whichever Buyer made such payment to apply the Dollar amount of the Dollar Credit from time to time as a credit against the price then applicable to future Tendered Product in accordance with Section 3.2.3. 2.6 Price. 2.6.1 Price for Tendered Product. (a) Until the earlier of (i) the end of the twelfth Year following the Facility 2 Conversion Date or (ii) the date on which the construction and term debt financing outstanding under the Financing Documents have been paid in full, the price for Tendered Product shall be the greater of (x) the Adjusted Price, or (y) the Ammonia Floor Price; provided, however, that for any shipment for which a Buyer pays the Ammonia Floor Price, the amount ("Excess") which such Buyer paid in excess of the Adjusted Price shall be credited to such Buyer's Accumulation Account. (b) Upon the expiration of the period described in Section 2.6.1(a), the price for Tendered Product shall be the Adjusted Price. 2.6.2 Price for Deemed Delivered Product. The price of Deemed Delivered Product shall be the Ammonia Floor Price. 2.6.3 Ammonia Market Price. The Ammonia Market Price in effect for any given calendar week will equal the average of the averages of the high and low "FOB Caribbean" posted prices per tonne for anhydrous ammonia for the previous week as quoted by each of Green Markets, Fertilizer Market Intelligence Weekly, Fertecon Weekly Ammonia Fax, and FMB Fertilizer Bulletin. If any of the foregoing publications should cease publication, cease quoting such prices or change the method by which it determines such weekly average prices, the Parties shall agree on a replacement publication if available. Pending determination of a replacement publication or methodology for determining the Ammonia Market Price, the Ammonia Market Price shall be determined by reference to the remaining publications. ARTICLE 3 BILLING AND PAYMENT 3.1 Billing. 3.1.1 Delivered Product. Not later than three Business Days after completion of each Delivery to a Buyer, Seller shall prepare and deliver to such Buyer a billing statement (together with the relevant Bill of Lading) showing (a) the total tonnage of Delivered Product included in such Delivery (b) the price per tonne payable for such quantity of Delivered Product, determined in accordance with Section 2.6, and (c) the aggregate price owing in respect of such Delivered Product. 3.1.2 Undelivered Tendered Product -- No Buyer Payment Failure. If a Buyer-Caused Shutdown has occurred and has continued for a period of ten (10) days or more, and no Buyer Payment Failure has occurred and is then continuing, Seller may prepare and deliver to each Buyer (on no more than one occasion during each separate period of Buyer-Caused Shutdown) a billing statement showing (a) the total tonnage of Tendered Product which is in Seller's Storage Tanks and available for Delivery, (b) the price per tonne payable for such quantity of Tendered Product, determined in accordance with Section 2.6 as if such Product had been Delivered on the date of such billing statement, and (c) the aggregate price owing by such Buyer pursuant to Section 2.4.1 in respect of fifty percent (50%) of such Tendered Product. 3.1.3 Deemed Delivered Product -- No Buyer Payment Failure. If a Buyer-Caused Shutdown has occurred, and no Buyer Payment Failure has occurred and is then continuing, Seller may prepare and deliver to each Buyer not more frequently than every seven (7) days during such Buyer-Caused Shutdown and after the end of such Buyer-Caused Shutdown, a billing statement showing (a) the total tonnage of Deemed Delivered Product attributable to the portion of the Buyer-Caused Shutdown covered by such billing statement, and (b) the aggregate price owing by each Buyer, pursuant to Section 2.4.1, in respect of such tonnage of Deemed Delivered Product. 3.1.4 Undelivered Tendered Product During Buyer Payment Failure. Following the end of any Month during which (a) a Buyer Payment Failure was in effect and (b) the Performing Buyer took Delivery of less than the quantity of Tendered Product which it was obligated to take or pay for pursuant to Section 2.4.2 (the amount in tonnes by which such Buyer's obligations for any such Month exceeded the amount of Tendered Product actually Delivered to that Buyer during such Month being referred to herein as a "Delivery Shortfall"), Seller may prepare and deliver to the Performing Buyer (in addition to any other billing statements submitted for the corresponding Month in accordance with this Section 3.1) a billing statement showing (i) the amount of the Delivery Shortfall, (ii) the price per tonne payable for the Delivery Shortfall, determined in accordance with Section 2.6 as if the undelivered Tendered Product had been Delivered on the last day of the relevant Month, and (iii) the aggregate price owing by such Buyer with respect to such Delivery Shortfall. 3.1.5 Statement of Credits. Each billing statement delivered by Seller to a Buyer shall be accompanied by a statement of (a) the positive balance, if any, in such Buyer's Accumulation Account, and (b) the total amount of any outstanding Tonnage Credit available to such Buyer. 3.2 Payment. 3.2.1 Generally. (a) Each Buyer shall make payment of the amount owing (taking into account any credits to which such Buyer may be entitled and which such Buyer then elects to use) pursuant to a billing statement delivered to such Buyer pursuant to Section 3.1 not later than thirty (30) days after the date of such billing statement. (b) Each Buyer shall, subject to Sections 3.2.2, 3.2.3 and 3.3, make payments to Seller in Dollars in immediately available funds at the account to be established with LaSalle National Bank, a bank organized under the laws of the United States of America, as Revenue Trustee. 3.2.2 Application of Tonnage Credits. Each Buyer, provided such Buyer is not then in default under this Agreement, shall apply any unused Tonnage Credit as an offset against the total charges (regardless of the current price per tonne) applicable to an equivalent number of tonnes of Tendered or Delivered Product for which such Buyer has been billed in the next successive billing statements rendered pursuant to this Agreement. 3.2.3 Application of Accumulation Account Balance. Each Buyer, provided such Buyer is not then in default under this Agreement, shall be entitled to apply any positive balance in its Accumulation Account as an offset against charges shown as owing from such Buyer in any particular billing statement rendered pursuant to this Agreement; provided, however, that any positive balance in a Buyer's Accumulation Account from time to time may be applied, in whole or in part, only when the Adjusted Price exceeds the Ammonia Floor Price by an amount greater than $10 per tonne. Whenever the Adjusted Price reflected in any billing statement to a Buyer exceeds the Ammonia Floor Price by an amount greater than $10 per tonne, such Buyer shall pay the Ammonia Floor Price plus $10 for each tonne covered by such billing statement, with the difference to the Adjusted Price being satisfied by a debit to such Buyer's Accumulation Account to the extent that there is a positive balance. 3.3 Disputes. Each Buyer shall inform Seller and the other Buyer by written notice of any objection that it may have with respect to any billing statement (including any credits applicable thereto) within ten (10) days following such Buyer's receipt of such statement, identifying in such notice the amount of the stated charges which it questions or challenges (the "Challenged Amount"). Failure by a Buyer to notify Seller of a dispute with respect to any particular billing statement within the time period set forth in the first sentence of this Section 3.3 shall constitute acceptance by such Buyer of Seller's determination of the payment amount due in respect of the Product or Deemed Delivered Product covered by such statement. Each Buyer shall pay the total undisputed amount of each billing statement rendered to such Buyer within the thirty (30) day time period specified for payments in Section 3.2.1(a) and, for so long as Seller is subject to the Financing Documents, shall deposit any Challenged Amount in an interest-bearing escrow account to be maintained by a security trustee designated by the Lender. Upon resolution of the dispute, the Challenged Amount, with a proportionate share of accrued interest thereon, shall be distributed to the Party or Parties found to be entitled thereto. The Parties shall work in good faith to resolve any dispute concerning a Challenged Amount, and if they are unable to resolve such dispute within sixty (60) days following delivery of a Buyer's written objections to Seller, either Party may initiate arbitration with respect to such dispute in accordance with Article 10. If there is no dispute by Seller with respect to any particular Challenged Amount, Seller shall credit the appropriate Buyer for all payments, if any, received in respect of such Challenged Amount and shall reduce the amount owing from such Buyer with respect to the billing statement in dispute by such Challenged Amount. No billing dispute between Seller and either Buyer, or between Buyers, shall relieve either Buyer or both Buyers, as applicable, of any of its or their obligations, as the case may be, hereunder. 3.4 Late Payments. Late payments by a Buyer or Seller (including any Challenged Amounts not required to be deposited in escrow pursuant to Section 3.3 which are subsequently determined to be owing) will bear interest from the date the payment was due until paid in full at an annual interest rate equal to the rate posted by CitiBank, N.A., from time to time as its floating reference commercial lending rate plus two percent (2%). 3.5 Currency. Seller shall invoice Buyers for payment, and Buyers shall make payments to Seller, in Dollars. 3.6 Refund of Positive Accumulation Account Balance. If the Term hereof ends on a date other than the Eximbank Conversion Date, any positive balance outstanding in a Buyer's Accumulation Account existing as of the end of the Term shall entitle such Buyer to a refund from Seller equal to the full Dollar amount of such balance, payable not later than thirty (30) days after the end of the Term. ARTICLE 4 COMMENCEMENT 4.1 Commencement of Product Deliveries. Until the Commencement Date, (a) Buyers shall have no obligation under this Agreement to accept or pay for Product, and (b) Seller shall have no obligation under this Agreement to tender Product to Buyers. After the end of the Term, Buyers shall have no obligation under this Agreement to accept Product and Seller shall have no obligation under this Agreement to tender Product to Buyers, other than fulfillment of Seller's obligation to deliver Product as a result of unused Tonnage Credits. ' ARTICLE 5 DELIVERY, TITLE, SHIPPING AND CARGO HANDLING 5.1 Delivery. Seller shall deliver all Product to be sold pursuant to this Agreement to the Delivery Point. 5.2 Title; Risk of Loss; Custody and Control. Title to, risk of loss for, and custody and control of Tendered Product will pass from Seller to Buyer when such Product is transferred to Buyer's side of the Delivery Point. 5.3 Scheduling and Loading Procedures. Each Buyer shall comply with all policies, rules and regulations (including the procedures for scheduling the arrival, loading and departure of such Buyer's Vessels), promulgated from time to time by the Coordinating Committee. 5.4 Compliance with Governmental Regulations. Each Buyer shall assure that all Buyer's Vessels utilized by it to take Delivery of Product shall at all times be operated in full compliance with all applicable national and local laws and regulations of The Republic of Trinidad and Tobago. Seller shall have the right to reject any Buyer's Vessel not in compliance herewith and therewith. 5.5 Port Dues and Freight Tax. All normal Port dues and any and all other charges (including any items chargeable to Seller under the Pier and Harbour Usage Agreement) shall be for Buyer's account, including expenses, if any, of shifting berth if such shifting is attributable to such Buyer's Vessel or such Buyer. Any freight tax imposed on or required to be withheld by a Buyer by the Government of The Republic of Trinidad and Tobago or any subdivision or agency thereof, and any interest or penalty relating thereto assessed to be payable thereon shall be the sole responsibility of the affected Buyer, and each Buyer shall hold Seller harmless against and indemnified from such freight tax relating to such Buyer's purchases. ARTICLE 6 MEASUREMENT 6.1 Measurement. The quantity of Product loaded on each Buyer's Vessel will be determined by a draft survey of such Buyer's Vessel conducted by an independent surveyor selected and paid by Buyer and reasonably acceptable to Seller. Tendered Product in Seller's Storage Tanks will be measured in accordance with normal commercial practices in the ammonia industry. ARTICLE 7 FORCE MAJEURE 7.1 Suspension of Performance. If an event of Force Majeure precludes any Party from performing any of its obligations under this Agreement, other than failure to make a payment when due, then the obligation of such Party will be suspended to the extent made necessary by such event of Force Majeure, and such Party will give prompt notice to the other Parties of the nature and estimated duration of such Force Majeure event and its anticipated effect on the affected Party's ability to perform. 7.2 Action to Overcome Force Majeure. The Party affected by an event of Force Majeure shall take or perform any and all reasonable actions necessary and appropriate to mitigate and overcome the effects of the event of Force Majeure; provided, however, that a Party will not be required or obligated to settle strikes or other labor disputes in order to overcome an event of Force Majeure or to mitigate its effect, or to perform any other action in order to overcome an event of Force Majeure if and to the extent such action would be contrary to, constitute a violation of or in any way be prevented by any applicable laws or permits. ARTICLE 8 DEFAULT 8.1 Events of Default. An event of default will be deemed to have taken place upon the occurrence of any of the following: 8.1.1 Failure to Pay. A Party shall fail to make payments of any amount which is due to another Party hereunder and such failure extends for more than ten (10) Business Days after the due date for such payment; 8.1.2 Failure to Perform Other Obligations. A Party shall fail to perform any of its covenants or obligations (other than obligations which are subject to Section 8.1.1) under and in accordance with this Agreement and such failure is not cured within thirty (30) days after the defaulting Party's receipt of notice of such failure from the non-defaulting Party (or such longer period as may be reasonably necessary to effectuate such cure if the default is not curable within thirty (30) days but not exceeding ninety (90) days after the defaulting Party's receipt of notice of such failure from the non-defaulting Party); provided that appropriate steps to effectuate such cure are diligently commenced and pursued by the defaulting Party. 8.1.3 Insolvency. A Party (a) shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as such debts become due, (b) shall file a petition in bankruptcy, (c) shall have a trustee or receiver appointed with respect to all or a portion of its properties or affairs or (d) shall have a petition in bankruptcy filed against it and shall not have caused such filing to be dismissed within ninety (90) days thereafter. 8.2 Remedies. Subject in all respects to Lender's rights under the Consent and Agreement, upon the occurrence and continuance of an event of default as provided in Section 8.1 which remains uncured beyond the applicable cure period, the non-defaulting Party may suspend performance of its obligations hereunder with respect to the defaulting Party, terminate this Agreement with respect to the defaulting Party, or take any other action or pursue any other right available to it under this Agreement; provided, however, that no such termination shall be effective unless an additional notice stating the intent to terminate the Agreement is delivered to the Party in default at least sixty (60) days prior to the effective date of the termination and the event of default in question continues on such stated effective date, and provided, further, that an event of default by one Buyer shall not constitute an event of default by the other Buyer or create any right in the other Buyer to suspend performance or terminate this Agreement. Remedies provided herein are cumulative and the exercise of one shall not limit, waive or preclude the exercise of other remedies in this Section 8.2 or elsewhere in this Agreement, at the same time or subsequently. 8.3 Mitigation of Damages. Each Party shall make reasonable efforts to mitigate the damages incurred by it resulting from an event of default hereunder by another Party. Upon the failure of either Buyer to take or pay for Tendered Product as required by this Agreement, Seller shall, subject to the rights of first refusal of the other Buyer pursuant to Section 2.1 or Section 2.4.2, as applicable, make commercially reasonable efforts to sell such Tendered Product to another purchaser, and the proceeds to Seller of any such sale (after deduction of any reasonable expenses incurred by Seller in arranging such sale) shall be credited against any amount for which the non-performing Buyer would otherwise be liable to Seller. ARTICLE 9 LIABILITY 9.1 Limitation of Liability. In no event shall any Party be liable for lost profit, lost business, lost savings or other incidental, consequential, special, punitive or other indirect damages of any kind or nature whatsoever arising out of any failure by such Party to perform its obligations under this Agreement. 9.2 Disclaimer of Warranties. SELLER MAKES NO EXPRESS OR IMPLIED WARRANTY WITH RESPECT TO THE PRODUCT. SELLER SHALL HAVE NO LIABILITY ON ACCOUNT OF DAMAGES SUFFERED BY ANY THIRD PARTIES IN CONNECTION WITH ANY DEFECT IN THE TENDERED PRODUCT. SELLER DISCLAIMS ANY LIABILITY DERIVING FROM THE MANUFACTURING, LIFTING, STORAGE, SALE, RESALE, USE OR PROCESSING OF PRODUCT AS WELL AS ANY LIABILITY DERIVING FROM INHERENT HAZARDS OF PRODUCT. 9.3 Indemnification by Buyer. Each Buyer agrees to indemnify, hold harmless and defend Seller, the Lender(s) and their respective affiliates, officers, directors, members, shareholders, employees, agents and contractors from and against any and all losses, damages, injuries, liabilities, penalties, fines, judgments, claims, demands, suits, actions, costs and expenses (including reasonable attorneys' fees) resulting from, arising out of or connected with (a) all injuries to persons or damages to property which are caused by the negligent action or inaction or willful misconduct of such Buyer or the operators of such Buyer's Vessels, or (b) the lifting, shipping, storage, resale, use or processing by any person of Product purchased by such Buyer from Seller, or (c) demurrage claims or other liability of Seller vis-a-vis NGC and NEC arising as a result of the activities of such Buyer or such Buyer's Vessels at the Pier. 9.4 Indemnification by Seller. Seller agrees to indemnify, hold harmless and defend each Buyer from and against any and all losses, damages, injuries, liabilities, penalties, fines, judgments, claims, demands, suits, actions, costs and expenses (including reasonable attorneys' fees) resulting from, arising out of or connected with all injuries to person, damages to property, or demurrage charges which are caused by the negligent action or inaction or willful misconduct of Seller in connection with the operation of the Facility or under the Pier and Harbour Usage Agreement. ARTICLE 10 ARBITRATION; PERFORMANCE NOTWITHSTANDING DISPUTES 10.1 Arbitration. Any controversy or claim arising out of or relating to this Agreement which cannot be resolved by the Parties shall be settled by arbitration. Arbitration shall be conducted in Washington, D.C., U.S.A. The Seller and the affected Buyer (or both Buyers acting jointly, as appropriate) shall each designate one arbitrator, and the two such designated arbitrators shall mutually agree upon and designate a third arbitrator. Subject to the foregoing, arbitration shall be conducted in accordance with rules and procedures of the United Nations Commission on International Trade Law. Judgment upon the award rendered by the arbitrators may be entered in any Court having jurisdiction thereof. Arbitration awards shall be final. 10.2 Performance Notwithstanding Disputes. No Party shall suspend or terminate performance of its obligations hereunder as a result of a dispute subject to arbitration under Section 10.1 prior to the final resolution of such dispute (including a reasonable time for implementation of the arbitrators' decision) in accordance with Section 10.1. ARTICLE 11 MISCELLANEOUS 11.1 Assignment and Assumption of Obligations. 11.1.1 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their permitted successors and assigns. 11.1.2 Consent. No Party may assign or transfer its interest and/or obligations herein (and any such putative assignment shall, at the option of any other Party, be null and void ab initio) unless such Party first obtains the written consent of the other Parties, which consent shall not be unreasonably withheld. 11.1.3 Collateral Assignment. Seller may assign this Agreement to the Lender as collateral for the obligations of Seller to the Lender under the documents evidencing such financing (the "Financing Documents") and to any parties acquiring the Facility by way of foreclosure or through the exercise of other remedies of the Lender, all pursuant to the terms of an agreement (the "Consent and Agreement") to be entered into among Seller, each Buyer and the Lender upon terms and conditions to be mutually agreed upon. 11.2 No Amendment. No amendment or modification of the terms of this Agreement shall be binding on any Party unless such amendment is reduced to writing and signed by each Party. 11.3 Entire Agreement. This Agreement and the documents referred to herein or delivered pursuant hereto contain the entire agreement and understanding between Seller and Buyers as to the subject matter hereof and supersedes all prior negotiations and understandings between them. 11.4 Notices. Any notice required or permitted to be given hereunder shall be put in writing and shall be deemed to have been given when received by the Party to whom directed at the following address: If to Seller: Farmland MissChem Limited 11-13 Victoria Avenue Port of Spain, Trinidad and Tobago Attention: John Prijatel, President If to Buyers: Mississippi Chemical Corporation P.O. Box 388 Highway 49 East Yazoo City, MS 39194 Attention: Rosalyn Glascoe, Corporate Secretary Farmland Industries, Inc. 3315 North Oak Trafficway P.O. Box 7305, Dept. 65 Kansas City, MO 64116 Attention: Vice President, Crop Production All notices shall be effective upon receipt. Any Party may change its address specified above by giving notice to the other Parties in accordance with the provisions of this Section 11.4. 11.5 Waiver. No waiver by any Party of any of the terms or conditions herein contained shall be effective unless the same shall be in writing and signed by the Party against whom the waiver is sought to be enforced and then shall be effective only in the specific instance and for the specific purpose for which given. 11.6 Choice of Law. This Agreement will in all respects be governed by and interpreted under the substantive laws of the State of New York, U.S.A. applicable to contracts and transactions entirely entered into and performed in the State of New York, without giving effect to conflicts of laws provisions thereof, except Section 5-1401 of the New York General Obligations Law. The parties expressly agree that the U.N. Convention for the International Sale of Goods shall be inapplicable to the construction of or in any dispute arising with respect to this Agreement. 11.7 Captions. All captions are inserted for convenience only, and will not affect any construction or interpretation of this Agreement. 11.8 Severability. Any provision of this Agreement which is or may become prohibited or unenforceable, as a matter of law or regulation, will be ineffective only to the extent of such prohibition or unenforceability and shall not invalidate the remaining provisions hereof if the essential purposes of this Agreement may be given effect despite the prohibition or unenforceability of the affected provision. 11.9 No Third Party Beneficiaries. This Agreement is intended solely for the benefit of the Parties hereto. Nothing in this Agreement shall be construed to create any duty to, standard of care with reference to, liability to, or right of suit or action in, any person not a Party to this Agreement. 11.10 No Legal Interest. This Agreement is intended to operate as an agreement only and nothing herein contained shall be deemed to create or be construed as creating a joint venture, an agency or a partnership among Seller and Buyers, or a demise or grant, or giving any Buyer any legal interest in the Facility or the Pier or any part thereof. 11.11 Counterparts. This Agreement may be signed in counterparts but in such case shall be deemed to be effective only after each of the signatories shall have signed and delivered to the other signatories a counterpart hereof. IN WITNESS WHEREOF, the Parties have caused their duly authorized representatives to execute this Agreement as of the date first set forth above. FARMLAND MISSCHEM LIMITED ("SELLER") By: /s/ Robert W. Honse ------------------- Robert W. Honse Director MISSISSIPPI CHEMICAL CORPORATION ("BUYER") By:/s/ Timothy A. Dawson --------------------- Timothy A. Dawson Vice President - Finance FARMLAND INDUSTRIES, INC. ("BUYER") By:/s/ Robert W. Honse ------------------- Robert W. Honse Executive Vice President and Chief Operating Officer Ag Input Businesses EXHIBIT A The Ammonia Floor Price per tonne applicable with respect to each shipment of Delivered Product and each payment for Deemed Delivered Product shall be determined by reference to the "Ammonia Floor Price Matrix" which will be established as of the Facility 2 Conversion Date and will not be subject to change thereafter, except as set forth in the proviso to this sentence, and which will depict the Ammonia Floor Price applicable with respect to each Year at "Production Rates" ranging from (confidential treatment has been requested) to (confidential treatment has been requested) of (confidential treatment has been requested) tonnes per day; provided, however, that in the event that, at any time, the taxing authority of The Republic of Trinidad and Tobago shall have determined that the proper rate of withholding tax applicable to the Project should be greater or lesser than 10% (or any subsequent change in said withholding tax rate, including, without limitation, a change back to 10%), then in any and each such case, the Ammonia Floor Price Matrix shall be recalculated, taking into account the new withholding tax rate as an element of the factor titled "Interest Rate," as explained more fully below. The "Production Rate" applicable for each shipment of Delivered Product and for each purchase of Deemed Delivered Product, as the case may be, will be determined by dividing (i) the average daily production of Product from the Facility during the 180 days immediately preceding the date of shipment of such Delivered Product (or, in the case of a purchase of Deemed Delivered Product, the average daily production of Product from the Facility during the 180 days immediately preceding the last full day of production at the Facility prior to the Buyer-Caused Shutdown giving rise to such purchase) by (ii) (confidential treatment has been requested) tonnes; provided, however, that for shipments of Product or purchases of Deemed Delivered Product during the 90 days following the Facility 2 Conversion Date, the Production Rate shall be determined by dividing (x) the average daily production of Product from the Facility during the 60-day period immediately preceding the Facility 2 Conversion Date by (y) (confidential treatment has been requested) tonnes. The format of the Ammonia Floor Price Matrix is set forth below: (confidential treatment has been requested for the Production Rate percentages in the following table) (SAMPLE) AMMONIA FLOOR PRICE MATRIX* Produc Year Year Year Year Year Year Year Year Year Year Year Year tion 1 2 3 4 5 6 7 8 9 10 11 12 Rate ** $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ % $ $ $ $ $ $ $ $ $ $ $ $ 4 % $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ %*** * Production Rates shall be rounded upwards to the nearest one percent (1%) bracket in the case of rates higher that one-half of one percent (>.50%) and shall be rounded downwards to the nearest one percent (1%) bracket in the case of rates equal to or less than one-half of one percent (.50%). ** or more *** or less
With respect to each Year and each Production Rate depicted in the Ammonia Floor Price Matrix, the indicated applicable Ammonia Floor Price will be determined as of the Facility 2 Conversion Date utilizing Seller's financial model (the "Model"), a copy of which is attached as Schedule 1 to this Exhibit A. The Ammonia Floor Price will be the calculated lowest price for anhydrous ammonia which will provide the Seller with revenues which, after deduction of all cash operating costs and expenses, are equal to (confidential treatment has been requested) of financing costs (principal and interest), Capital Expenditures and catalyst purchase expenses, all as reflected in the Model. The Model calculates Ammonia Floor Prices generally in accordance with the following formula: (confidential treatment has been requested) ------------------------------------------- Ammonia Floor Price = (confidential treatment has been requested) where: "P" means scheduled annual principal amortization amount; "I" means scheduled annual interest payments and any withholding tax payments to be made in such year; "CapEx" means scheduled annual Capital Expenditures; "CP" means scheduled annual catalyst purchase expenses (not major catalyst replacement); "OR" means Production Rate; and "MC" means scheduled annual cash operating costs and expenses The above formula is for illustrative purposes only. More specifically, the Ammonia Floor Prices are those ammonia prices calculated by the Model when the Model is run to yield a (confidential treatment has been requested) DSCR. In connection with the calculation of the Ammonia Floor Price, the following "Variable Inputs" to the Model will be utilized: 1. Total Debt, which will be the total principal amount of the permanent financing for the Facility; 2. Interest Rate, which will be the weighted average rate of interest applicable to the permanent financing for the Facility and which incorporates any withholding tax payments to be made in such year; 3. Production Rate, which will be 5% increments from (confidential treatment has been requested) to (confidential treatment has been requested) where 100% reflects average daily production of (confidential treatment has been requested) tonnes; and 4. Capital Expenditures, which will be the sum of (i) capital expenditures presently reflected in the Model and (ii) any performance bonuses payable to The M.W. Kellogg Company under the EPC Contract which will be amortized over such period as Lender and Buyers shall agree. All other Model Inputs are fixed and have the values presently reflected in the Model. The parties agree that they shall, within thirty days of the date of this Agreement, provide as Exhibit B hereto a printout of the Model, showing formulas used, as the official, agreed Model. In the event of any dispute over the calculation of the Ammonia Floor Price Matrix, Exhibit B shall control. EXHIBIT B [Exhibit B Is a Computer Diskette.] EX-10 4 EXHIBIT 10.15 ANHYDROUS AMMONIA PURCHASE AGREEMENT (EX-IM) This ANHYDROUS AMMONIA PURCHASE AGREEMENT dated as of October 18, 1996, among MISSISSIPPI CHEMICAL CORPORATION, a Mississippi corporation, together with its successors and permitted assigns ("MCC"), FARMLAND INDUSTRIES, INC., a Kansas corporation, together with its successors and permitted assigns ("Farmland"), and FARMLAND MISSCHEM LIMITED, a limited liability company organized under The Companies Ordinance of The Republic of Trinidad and Tobago, together with its successors and permitted assigns ("Seller"). W I T N E S S E T H: WHEREAS, Seller is developing and will own and operate an anhydrous ammonia production facility which will be located on the island of Trinidad in The Republic of Trinidad and Tobago, and which is expected to be capable of producing approximately 650,000 tonnes of anhydrous ammonia per year; and WHEREAS, Seller wishes to sell its total anhydrous ammonia output to MCC and Farmland, and MCC and Farmland wish to purchase from Seller, each on an individual but not joint basis, a portion of the total anhydrous ammonia output produced by the Facility, in accordance with the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller, MCC and Farmland hereby mutually agree as follows: ARTICLE 1 DEFINITIONS 1.1 Definitions. Each of the following capitalized terms when used herein shall have the meaning indicated below: "Accumulation Account" means a notional account established for each Buyer on the books of Seller which shall be equal to the sum of (a) any positive balance in such Buyer's Prior Contract Accumulation Account existing as of the end of the term of the Prior Contract, (b) all Excess payments made by such Buyer pursuant to Section 2.6.1 and (c) all Dollar Credits earned by such Buyer pursuant to Section 2.5.2. "Adjusted Price" means the Ammonia Market Price less five percent (5%). "Agreement" means this Anhydrous Ammonia Purchase Agreement dated as of October 18, 1996, among MCC, Farmland and Seller, including all Exhibits hereto, as such may be amended, supplemented, restated, novated, renewed or modified from time to time. "Ammonia Floor Price" means the price per tonne for Delivered Product or Deemed Delivered Product for the applicable Year set forth in the following table: YEAR PRICE 1 $(confidential treatment has been requested) USD 2 $(confidential treatment has been requested) USD 3 $(confidential treatment has been requested) USD 4 $(confidential treatment has been requested) USD 5 $(confidential treatment has been requested) USD 6 $(confidential treatment has been requested) USD 7 $(confidential treatment has been requested) USD 8 $(confidential treatment has been requested) USD 9 $(confidential treatment has been requested) USD 10 $(confidential treatment has been requested) USD 11 $(confidential treatment has been requested) USD 12 $(confidential treatment has been requested) USD
"Ammonia Market Price" means, as of any particular date, the price for anhydrous ammonia determined in accordance with Section 2.6.3. "Bill of Lading" means a bill of lading to be issued by the master of each Buyer's Vessel promptly after the completion of loading of such Buyer's Vessel setting forth (a) the respective dates and times of commencement and completion of loading of Buyer's Vessel; (b) the total quantity of Delivered Product; and (c) such other information as may be required pursuant to the charter party for the Buyer's Vessel and otherwise pursuant to applicable law and shipping industry practice. "Business Day" means a day on which business by and among banks may be carried on in The Republic of Trinidad and Tobago, New York City, Mississippi and Missouri, but in no event shall it include a Saturday or a Sunday. "Buyer" means either MCC or Farmland, as the case may be, and "Buyers" means both MCC and Farmland. "Buyer-Caused Shutdown" means a shutdown of the Facility caused solely by failure of a Buyer to take Tendered Product at a time when Seller's Storage Tanks are full, which failure was not excused by Limited Force Majeure. "Buyer Payment Failure" means the failure of a Buyer, which failure has continued for at least ten (10) Business Days, to make payment for Tendered Product or Deemed Delivered Product when due under this Agreement. "Buyer's Vessels" means any ocean-going vessels owned, controlled or hired by a Buyer for purposes of transporting Product. "Challenged Amount" has the meaning set forth in Section 3.3. "Commencement Date" means the date of funding of a direct term loan for the Facility provided by the Export-Import Bank of the United States pursuant to the Financing Documents to which it is a party. "Consent and Agreement" has the meaning set forth in Section 11.1.3. "Coordinating Committee" means the Savonetta Pier Coordinating Committee comprised of representatives of NGC, NEC, Seller and any other participant as may be advised by NGC and NEC from time to time. "Deemed Delivered Product" means, with respect to any particular time period during which a Buyer Payment Failure is not in existence, the aggregate tonnage of Product that Seller was unable to produce during such time period solely as a result of a Buyer-Caused Shutdown; provided that Deemed Delivered Product for any particular time period shall not exceed the product of (a) 1600 tonnes and (b) the number of days or portions thereof (rounded to the nearest hour) of Buyer-Caused Shutdown within such period. "Deliver," "Delivery" and "Deliveries" refer to the actual transmission of Product by Seller to a Buyer at the Delivery Point. "Delivered Product" means Product actually Delivered to a Buyer pursuant to this Agreement. For the sole purpose of determining which week's Ammonia Market Price is in effect, Product is considered to be Delivered Product upon completion of loading of the Buyer's Vessel upon which such Product is to be transported, as evidenced by the relevant Bill of Lading. "Delivery Point" means the flanged inlet pipe of a Buyer's Vessel. "Delivery Shortfall" has the meaning set forth in Section 3.1.4. "Dollar" or "$" means United States dollars. "Dollar Credit" means the credit, expressed in Dollars, accorded to a particular Buyer pursuant to Section 2.5.2 in connection with all payments made by such Buyer with respect to Deemed Delivered Product. "EPC Contract" means that certain Engineering, Procurement and Construction Contract dated as of December 20, 1995, between Seller and The M. W. Kellogg Company, as may be amended, supplemented, novated, suspended, restated or modified from time to time. "Excess" has the meaning set forth in Section 2.6.1. "Facility" means the anhydrous ammonia production facility (including the Seller's Storage Tanks and the facilities used to transport Product to the Delivery Point) to be designed, financed, constructed, owned, maintained and operated by Seller on the island of Trinidad in The Republic of Trinidad and Tobago, with a designed production capacity of approximately 650,000 tonnes of anhydrous ammonia per Year. "Farmland" has the meaning set forth in the preamble to this Agreement. "Financing Documents" has the meaning set forth in Section 11.1.3. "Force Majeure" means any occurrence or circumstance (a) which is beyond the control of the Party affected thereby, (b) which is not the result of fault or negligence on the part of the Party affected thereby, and (c) whose effects could not have been avoided or overcome by exercise of due diligence and reasonable efforts on the part of the Party affected thereby. Lack of funds, market fluctuations or unfavorable market conditions shall not under any circumstances be considered Force Majeure. "Lender" means the financial institutions providing construction and/or permanent financing for the Facility pursuant to the Financing Documents. "Limited Force Majeure" means any occurrence or circumstance that would be encompassed within the definition of Force Majeure set forth in this Agreement, excepting: (a) maritime casualties to Buyers' Vessels (other than as such casualties result from war), (b) weather conditions to the extent such conditions impair movement of Buyers' Vessels, (c) labor disturbances carried out by Buyers' employees or the crew of Buyers' Vessels, (d) commercial unavailability of suitable ocean transport vessels with which to take timely receipt of Tendered Product (other than as such unavailability results from war), or (e) unavailability of the port or other receiving facilities at which Buyer's Vessels are intended to be unloaded. "MCC" has the meaning set forth in the preamble to this Agreement. "Month" means, with respect to the first Month after the Commencement Date, the period commencing on the Commencement Date and ending at 12:00 midnight on the last day of the first complete calendar month to follow the Commencement Date, and thereafter means each succeeding calendar Month during the remainder of the Term. "NEC" means The National Energy Corporation Limited, a company incorporated under the laws of The Republic of Trinidad and Tobago, together with its successors and permitted assigns. "NGC" means The National Gas Company of Trinidad and Tobago Limited, a company incorporated under the laws of The Republic of Trinidad and Tobago, together with its successors and permitted assigns. "Parties" means Buyers and Seller, collectively, and "Party" means either of the Buyers or Seller, individually, as the case may be. "Performing Buyer" means, with respect to any period in which there is a Buyer Payment Failure, the Buyer which did not commit the Buyer Payment Failure. "Pier" has the meaning set forth in the Pier and Harbour Usage Agreement. "Pier and Harbour Usage Agreement" means the Pier and Harbour Usage Agreement, dated October 18, 1996, between NGC, NEC and Seller as such may be amended, supplemented, novated, suspended, extended or modified from time to time. "PLIPDECO" means the Point Lisas Industrial Port Development Corporation Limited, a company duly incorporated under The Companies Ordinance Chapter 31 No. 1 of the 1950 Laws of Trinidad and Tobago and having its registered office at PLIPDECO House, Orinoco Drive, Point Lisas Industrial Estate, Couva, in the Island of Trinidad. "Prior Contract" means that certain Anhydrous Ammonia Purchase Agreement of even date herewith among the parties to this Agreement, a copy of which is attached as Exhibit A hereto. "Prior Contract Accumulation Account" means the "Accumulation Account" (as that term is defined in the Prior Contract) established for each Buyer in accordance with the terms of the Prior Contract. "Product" means anhydrous ammonia produced at the Facility. "Seller's Storage Tanks" means the two 40,000-tonne capacity tanks located at the Facility in which Seller stores Product. "Tendered Product" means, without double counting, Product that is immediately available in Seller's Storage Tanks for Delivery to a Buyer. "Term" means the period commencing on the date hereof and expiring on the date which is twelve (12) Years after the Commencement Date (unless terminated pursuant to Section 8.2). "Tonnage Credit" means the credit, expressed in tonnes, accorded to a particular Buyer pursuant to Section 2.5.1 in connection with all payments made by such Buyer with respect to Tendered Product which is not Delivered but paid for pursuant to Section 2.3 or Section 2.4. "tonne" means a metric ton of 2,204.6 pounds. "Year" means, with respect to the first Year, the period commencing on the Commencement Date and ending at 12:00 midnight on the last day of the twelfth Month to follow the Commencement Date, and thereafter means each succeeding twelve (12) Month period during the remainder of the Term. ARTICLE 2 PURCHASE AND SALE OF PRODUCT 2.1 Purchase and Sale; Right of First Refusal. Seller agrees to sell and Deliver Product to Buyers, and each Buyer agrees to purchase and accept Delivery of Product from Seller, in accordance with the terms and conditions of this Agreement. Buyers shall have a right of first refusal to all Product and, except as expressly authorized by this Agreement, Seller shall not sell or otherwise transfer Product to any person or entity other than Buyers without Buyers' prior written consent. During the pendency of any Buyer-Caused Shutdown, or a Buyer Payment Failure, or an event of default by a Buyer, or an event of Force Majeure which prevents or impairs a Buyer's performance of its obligations hereunder, Seller may sell Product otherwise reserved for such Buyer pursuant to this Agreement and in excess of amounts which such Buyer is then able to accept from Seller to persons or entities other than such Buyer for the duration of such event (including completion of delivery of Product sold to a third party which sale commenced prior to the end of such event), provided that Seller shall first have offered such Product to the other Buyer. 2.2 Scheduling of Production and Lifting. 2.2.1 Scheduling of Seller's Production. Seller shall use reasonable efforts, under normal operating conditions for the Facility, to maximize Facility output and maintain a steady flow of Tendered Product, but the Parties acknowledge that production may be reduced as necessary from time to time to accommodate scheduled or unscheduled maintenance, emergencies or other operational constraints. Seller shall plan periods of scheduled maintenance with Buyers so as to coordinate, to the greatest extent practicable, and subject to Seller's obligation under the Financing Documents, reductions in the Facility output with Buyers' scheduling requirements for Deliveries of Product. Buyers and Seller shall cooperate to the extent practicable in the scheduling of Deliveries to take into account the shipping requirements of each Buyer and the capacity of Seller's Storage Tanks. 2.2.2 Scheduling of Buyers' Lifting. It is recognized by the Parties that due to the location of the Facility, ocean transportation will be required to deliver Tendered Product to the markets where it will be sold or used by each Buyer. Transportation and other activities on Buyers' side of the Delivery Point will be Buyers' sole responsibility. Additionally, and without prejudice to each Buyer's respective obligations under Sections 2.3 and 2.4, it is recognized by the Parties that due to the differing sizes of Buyer's Vessels, it will not be possible for each Buyer to purchase exactly fifty percent (50%) of the Tendered Product available at any given time or over any given period of time. Prior to the Commencement Date, Buyers will determine which Buyer will take delivery of the first Tendered Product (and if they are unable to agree, it will be Farmland), and thereafter, it will be the obligation of whichever Buyer has taken Delivery in the aggregate of the lesser amount of Tendered Product to take Delivery of and pay for the next available Tendered Product. 2.3 Buyer's Obligation Prior to Buyer-Caused Shutdown or Buyer Payment Failure. During any period in which no Buyer-Caused Shutdown or Buyer Payment Failure is in effect, Buyers shall take Delivery of and pay for all Tendered Product, in accordance with the provisions of this Agreement, except to the extent that such obligation may be suspended by the occurrence of Limited Force Majeure; provided, however, that the failure of Buyers to take Delivery of Tendered Product shall not be an event of default for so long as Buyers perform their obligations under Section 2.4.1 or 2.4.2 as applicable. 2.4 Effect of Buyer-Caused Shutdown and Buyer Payment Failure. 2.4.1 Buyers' Obligations During Buyer-Caused Shutdown. In addition to the obligations of Buyers under Section 2.3, but subject to Section 2.4.2, each Buyer shall, with respect to each Buyer-Caused Shutdown, pay for (a) fifty percent (50%) of the Deemed Delivered Product and (b) fifty percent (50%) of the undelivered Tendered Product attributable to such Buyer-Caused Shutdown. Each such amount shall be priced as provided in Section 2.6 and shall be billed and payable pursuant to Article 3. 2.4.2 Rights and Obligations of Performing Buyer after Buyer Payment Failure. During the existence of a Buyer Payment Failure, in lieu of the obligations set forth in Sections 2.3 and 2.4.1, but subject to Lender's rights under the Consent and Agreement, the Performing Buyer shall be obligated, except to the extent that such obligation may be suspended by Limited Force Majeure, to take or pay for if not taken the lesser of (a) all Tendered Product or (b) 27,000 tonnes per Month of Tendered Product (appropriately prorated for any Month in which a Buyer Payment Failure is in effect for only part of the Month). Upon occurrence and during the existence of a Buyer Payment Failure, the Performing Buyer shall have a right of first refusal to purchase all or any portion of Tendered Product in excess of 27,000 tonnes per Month. All amounts of Tendered Product taken or paid for pursuant to this Section 2.4.2 shall be priced as set forth in Section 2.6.1 and shall be billed and payable pursuant to Article 3. 2.5 Buyers' Make-Up Rights. 2.5.1 Tonnage Credits. Each Buyer shall receive a Tonnage Credit in connection with all payments made by such Buyer, pursuant to Section 2.3 or Section 2.4, for Tendered Product which is not Delivered Product, provided such payment is not then held in the escrow account for Challenged Amounts described in Section 3.3. Such credit shall entitle whichever Buyer made such payment to receive, without further payment, future Delivery of the same tonnage of Product as was covered by the payment in question in accordance with Section 3.2.2. Any Tonnage Credits outstanding as of the end of the Term shall entitle the Buyer holding such Tonnage Credits to take Delivery of a corresponding tonnage of Tendered Product at Buyer's convenience at or after the end of the Term, but upon reasonable advance notice to Seller, until such Tonnage Credits have been fully utilized. 2.5.2 Dollar Credits. Each Buyer shall receive a Dollar Credit (which shall be credited to such Buyer's Accumulation Account) in connection with all payments made by such Buyer with respect to Deemed Delivered Product, provided such payment is not then held in the escrow account for Challenged Amounts described in Section 3.3. Such credit shall entitle whichever Buyer made such payment to apply the Dollar amount of the Dollar Credit from time to time as a credit against the price then applicable to future Tendered Product in accordance with Section 3.2.3. 2.6 Price. 2.6.1 Price for Tendered Product. (a) Until the earlier of (i) the end of the twelfth Year or (ii) the date on which the construction and term debt financing outstanding under the Financing Documents have been paid in full, the price for Tendered Product shall be the greater of (x) the Adjusted Price, or (y) the Ammonia Floor Price; provided, however, that for any shipment for which a Buyer pays the Ammonia Floor Price, the amount ("Excess") which such Buyer paid in excess of the Adjusted Price shall be credited to such Buyer's Accumulation Account. (b) Upon the expiration of the period described in Section 2.6.1(a), the price for Tendered Product shall be the Adjusted Price. 2.6.2 Price for Deemed Delivered Product. The price of Deemed Delivered Product shall be the Ammonia Floor Price. 2.6.3 Ammonia Market Price. The Ammonia Market Price in effect for any given calendar week will equal the average of the averages of the high and low "FOB Caribbean" posted prices per tonne for anhydrous ammonia for the previous week as quoted by each of Green Markets, Fertilizer Market Intelligence Weekly, Fertecon Weekly Ammonia Fax, and FMB Fertilizer Bulletin. If any of the foregoing publications should cease publication, cease quoting such prices or change the method by which it determines such weekly average prices, the Parties shall agree on a replacement publication if available. Pending determination of a replacement publication or methodology for determining the Ammonia Market Price, the Ammonia Market Price shall be determined by reference to the remaining publications. ARTICLE 3 BILLING AND PAYMENT 3.1 Billing. 3.1.1 Delivered Product. Not later than three Business Days after completion of each Delivery to a Buyer, Seller shall prepare and deliver to such Buyer a billing statement (together with the relevant Bill of Lading) showing (a) the total tonnage of Delivered Product included in such Delivery (b) the price per tonne payable for such quantity of Delivered Product, determined in accordance with Section 2.6, and (c) the aggregate price owing in respect of such Delivered Product. 3.1.2 Undelivered Tendered Product -- No Buyer Payment Failure. If a Buyer-Caused Shutdown has occurred and has continued for a period of ten (10) days or more, and no Buyer Payment Failure has occurred and is then continuing, Seller may prepare and deliver to each Buyer (on no more than one occasion during each separate period of Buyer-Caused Shutdown) a billing statement showing (a) the total tonnage of Tendered Product which is in Seller's Storage Tanks and available for Delivery, (b) the price per tonne payable for such quantity of Tendered Product, determined in accordance with Section 2.6 as if such Product had been Delivered on the date of such billing statement, and (c) the aggregate price owing by such Buyer pursuant to Section 2.4.1 in respect of fifty percent (50%) of such Tendered Product. 3.1.3 Deemed Delivered Product -- No Buyer Payment Failure. If a Buyer-Caused Shutdown has occurred, and no Buyer Payment Failure has occurred and is then continuing, Seller may prepare and deliver to each Buyer not more frequently than every seven (7) days during such Buyer-Caused Shutdown and after the end of such Buyer-Caused Shutdown, a billing statement showing (a) the total tonnage of Deemed Delivered Product attributable to the portion of the Buyer-Caused Shutdown covered by such billing statement, and (b) the aggregate price owing by each Buyer, pursuant to Section 2.4.1, in respect of such tonnage of Deemed Delivered Product. 3.1.4 Undelivered Tendered Product During Buyer Payment Failure. Following the end of any Month during which (a) a Buyer Payment Failure was in effect and (b) the Performing Buyer took Delivery of less than the quantity of Tendered Product which it was obligated to take or pay for pursuant to Section 2.4.2 (the amount in tonnes by which such Buyer's obligations for any such Month exceeded the amount of Tendered Product actually Delivered to that Buyer during such Month being referred to herein as a "Delivery Shortfall"), Seller may prepare and deliver to the Performing Buyer (in addition to any other billing statements submitted for the corresponding Month in accordance with this Section 3.1) a billing statement showing (i) the amount of the Delivery Shortfall, (ii) the price per tonne payable for the Delivery Shortfall, determined in accordance with Section 2.6 as if the undelivered Tendered Product had been Delivered on the last day of the relevant Month, and (iii) the aggregate price owing by such Buyer with respect to such Delivery Shortfall. 3.1.5 Statement of Credits. Each billing statement delivered by Seller to a Buyer shall be accompanied by a statement of (a) the positive balance, if any, in such Buyer's Accumulation Account, and (b) the total amount of any outstanding Tonnage Credit available to such Buyer. 3.2 Payment. 3.2.1 Generally. (a) Each Buyer shall make payment of the amount owing (taking into account any credits to which such Buyer may be entitled and which such Buyer then elects to use) pursuant to a billing statement delivered to such Buyer pursuant to Section 3.1 not later than thirty (30) days after the date of such billing statement. (b) Each Buyer shall, subject to Sections 3.2.2, 3.2.3 and 3.3, make payments to Seller in Dollars in immediately available funds at the account to be established with the Chase Manhattan Bank, a New York State chartered bank, as Revenue Trustee. 3.2.2 Application of Tonnage Credits. Each Buyer, provided such Buyer is not then in default under this Agreement, shall be entitled to apply any unused Tonnage Credit as an offset against the total charges (regardless of the current price per tonne) applicable to an equivalent number of tonnes of Tendered or Delivered Product for which such Buyer has been billed in any particular billing statement rendered pursuant to this Agreement. 3.2.3 Application of Accumulation Account Balance. Each Buyer, provided such Buyer is not then in default under this Agreement, shall be entitled to apply any positive balance in its Accumulation Account as an offset against charges shown as owing from such Buyer in any particular billing statement rendered pursuant to this Agreement; provided, however, that any positive balance in a Buyer's Accumulation Account from time to time may be applied, in whole or in part, only when the Adjusted Price exceeds the Ammonia Floor Price by an amount greater than $10 per tonne. Whenever the Adjusted Price reflected in any billing statement to a Buyer exceeds the Ammonia Floor Price by an amount greater than $10 per tonne, such Buyer shall pay the Ammonia Floor Price plus $10 for each tonne covered by such billing statement, with the difference to the Adjusted Price being satisfied by a debit to such Buyer's Accumulation Account to the extent that there is a positive balance. 3.3 Disputes. Each Buyer shall inform Seller and the other Buyer by written notice of any objection that it may have with respect to any billing statement (including any credits applicable thereto) within ten (10) days following such Buyer's receipt of such statement, identifying in such notice the amount of the stated charges which it questions or challenges (the "Challenged Amount"). Failure by a Buyer to notify Seller of a dispute with respect to any particular billing statement within the time period set forth in the first sentence of this Section 3.3 shall constitute acceptance by such Buyer of Seller's determination of the payment amount due in respect of the Product or Deemed Delivered Product covered by such statement. Each Buyer shall pay the total undisputed amount of each billing statement rendered to such Buyer within the thirty (30) day time period specified for payments in Section 3.2.1(a) and, for so long as Seller is subject to the Financing Documents, shall deposit any Challenged Amount in an interest-bearing escrow account to be maintained by a security trustee designated by the Lender. Upon resolution of the dispute, the Challenged Amount, with a proportionate share of accrued interest thereon, shall be distributed to the Party or Parties found to be entitled thereto. The Parties shall work in good faith to resolve any dispute concerning a Challenged Amount, and if they are unable to resolve such dispute within sixty (60) days following delivery of a Buyer's written objections to Seller, either Party may initiate arbitration with respect to such dispute in accordance with Article 10. If there is no dispute by Seller with respect to any particular Challenged Amount, Seller shall credit the appropriate Buyer for all payments, if any, received in respect of such Challenged Amount and shall reduce the amount owing from such Buyer with respect to the billing statement in dispute by such Challenged Amount. No billing dispute between Seller and either Buyer, or between Buyers, shall relieve either Buyer or both Buyers, as applicable, of any of its or their obligations, as the case may be, hereunder. 3.4 Late Payments. Late payments by a Buyer or Seller (including any Challenged Amounts not required to be deposited in escrow pursuant to Section 3.3 which are subsequently determined to be owing) will bear interest from the date the payment was due until paid in full at an annual interest rate equal to the rate posted by CitiBank, N.A., from time to time as its floating reference commercial lending rate plus two percent (2%). 3.5 Currency. Seller shall invoice Buyers for payment, and Buyers shall make payments to Seller, in Dollars. 3.6 Refund of Positive Accumulation Account Balance. Any positive balance outstanding in a Buyer's Accumulation Account existing as of the end of the Term shall entitle such Buyer to a refund from Seller equal to the full Dollar amount of such balance, payable not later than thirty (30) days after the end of the Term. ARTICLE 4 COMMENCEMENT 4.1 Commencement of Product Deliveries. Until the Commencement Date, (a) Buyers shall have no obligation under this Agreement to accept or pay for Product, and (b) Seller shall have no obligation under this Agreement to tender Product to Buyers. After the end of the Term, Buyers shall have no obligation under this Agreement to accept Product and Seller shall have no obligation under this Agreement to tender Product to Buyers, other than fulfillment of Seller's obligation to deliver Product as a result of unused Tonnage Credits. ARTICLE 5 DELIVERY, TITLE, SHIPPING AND CARGO HANDLING 5.1 Delivery. Seller shall deliver all Product to be sold pursuant to this Agreement to the Delivery Point. 5.2 Title; Risk of Loss; Custody and Control. Title to, risk of loss for, and custody and control of Tendered Product will pass from Seller to Buyer when such Product is transferred to Buyer's side of the Delivery Point. 5.3 Scheduling and Loading Procedures. Each Buyer shall comply with all policies, rules and regulations (including the procedures for scheduling the arrival, loading and departure of such Buyer's Vessels), promulgated from time to time by the Coordinating Committee. 5.4 Compliance with Governmental Regulations. Each Buyer shall assure that all Buyer's Vessels utilized by it to take Delivery of Product shall at all times be operated in full compliance with all applicable national and local laws and regulations of The Republic of Trinidad and Tobago. Seller shall have the right to reject any Buyer's Vessel not in compliance herewith and therewith. 5.5 Port Dues and Freight Tax. All normal Port dues and any and all other charges (including any items chargeable to Seller under the Pier and Harbour Usage Agreement) shall be for Buyer's account, including expenses, if any, of shifting berth if such shifting is attributable to such Buyer's Vessel or such Buyer. Any freight tax imposed on or ' required to be withheld by a Buyer by the Government of The Republic of Trinidad and Tobago or any subdivision or agency thereof, and any interest or penalty relating thereto assessed to be payable thereon shall be the sole responsibility of the affected Buyer, and each Buyer shall hold Seller harmless against and indemnified from such freight tax relating to such Buyer's purchases. ARTICLE 6 MEASUREMENT 6.1 Measurement. The quantity of Product loaded on each Buyer's Vessel will be determined by a draft survey of such Buyer's Vessel conducted by an independent surveyor selected and paid by Buyer and reasonably acceptable to Seller. Tendered Product in Seller's Storage Tanks will be measured in accordance with normal commercial practices in the ammonia industry. ARTICLE 7 FORCE MAJEURE 7.1 Suspension of Performance. If an event of Force Majeure precludes any Party from performing any of its obligations under this Agreement, other than failure to make a payment when due, then the obligation of such Party will be suspended to the extent made necessary by such event of Force Majeure, and such Party will give prompt notice to the other Parties of the nature and estimated duration of such Force Majeure event and its anticipated effect on the affected Party's ability to perform. 7.2 Action to Overcome Force Majeure. The Party affected by an event of Force Majeure shall take or perform any and all reasonable actions necessary and appropriate to mitigate and overcome the effects of the event of Force Majeure; provided, however, that a Party will not be required or obligated to settle strikes or other labor disputes in order to overcome an event of Force Majeure or to mitigate its effect, or to perform any other action in order to overcome an event of Force Majeure if and to the extent such action would be contrary to, constitute a violation of or in any way be prevented by any applicable laws or permits. ARTICLE 8 DEFAULT 8.1 Events of Default. An event of default will be deemed to have taken place upon the occurrence of any of the following: 8.1.1 Failure to Pay. A Party shall fail to make payments of any amount which is due to another Party hereunder and such failure extends for more than ten (10) Business Days after the due date for such payment; 8.1.2 Failure to Perform Other Obligations. A Party shall fail to perform any of its covenants or obligations (other than obligations which are subject to Section 8.1.1) under and in accordance with this Agreement and such failure is not cured within thirty (30) days after the defaulting Party's receipt of notice of such failure from the non-defaulting Party (or such longer period as may be reasonably necessary to effectuate such cure if the default is not curable within thirty (30) days but not exceeding ninety (90) days after the defaulting Party's receipt of notice of such failure from the non-defaulting Party); provided that appropriate steps to effectuate such cure are diligently commenced and pursued by the defaulting Party. 8.1.3 Insolvency. A Party (a) shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as such debts become due, (b) shall file a petition in bankruptcy, (c) shall have a trustee or receiver appointed with respect to all or a portion of its properties or affairs or (d) shall have a petition in bankruptcy filed against it and shall not have caused such filing to be dismissed within ninety (90) days thereafter. 8.2 Remedies. Subject in all respects to Lender's rights under the Consent and Agreement, upon the occurrence and continuance of an event of default as provided in Section 8.1 which remains uncured beyond the applicable cure period, the non-defaulting Party may suspend performance of its obligations hereunder with respect to the defaulting Party, terminate this Agreement with respect to the defaulting Party, or take any other action or pursue any other right available to it under this Agreement; provided, however, that no such termination shall be effective unless an additional notice stating the intent to terminate the Agreement is delivered to the Party in default at least sixty (60) days prior to the effective date of the termination and the event of default in question continues on such stated effective date, and provided, further, that an event of default by one Buyer shall not constitute an event of default by the other Buyer or create any right in the other Buyer to suspend performance or terminate this Agreement. Remedies provided herein are cumulative and the exercise of one shall not limit, waive or preclude the exercise of other remedies in this Section 8.2 or elsewhere in this Agreement, at the same time or subsequently. 8.3 Mitigation of Damages. Each Party shall make reasonable efforts to mitigate the damages incurred by it resulting from an event of default hereunder by another Party. Upon the failure of either Buyer to take or pay for Tendered Product as required by this Agreement, Seller shall, subject to the rights of first refusal of the other Buyer pursuant to Section 2.1 or Section 2.4.2, as applicable, make commercially reasonable efforts to sell such Tendered Product to another purchaser, and the proceeds to Seller of any such sale (after deduction of any reasonable expenses incurred by Seller in arranging such sale) shall be credited against any amount for which the non-performing Buyer would otherwise be liable to Seller. ARTICLE 9 LIABILITY 9.1 Limitation of Liability. In no event shall any Party be liable for lost profit, lost business, lost savings or other incidental, consequential, special, punitive or other indirect damages of any kind or nature whatsoever arising out of any failure by such Party to perform its obligations under this Agreement. 9.2 Disclaimer of Warranties. SELLER MAKES NO EXPRESS OR IMPLIED WARRANTY WITH RESPECT TO THE PRODUCT. SELLER SHALL HAVE NO LIABILITY ON ACCOUNT OF DAMAGES SUFFERED BY ANY THIRD PARTIES IN CONNECTION WITH ANY DEFECT IN THE TENDERED PRODUCT. SELLER DISCLAIMS ANY LIABILITY DERIVING FROM THE MANUFACTURING, LIFTING, STORAGE, SALE, RESALE, USE OR PROCESSING OF PRODUCT AS WELL AS ANY LIABILITY DERIVING FROM INHERENT HAZARDS OF PRODUCT. 9.3 Indemnification by Buyer. Each Buyer agrees to indemnify, hold harmless and defend Seller, the Lender(s) and their respective affiliates, officers, directors, members, shareholders, employees, agents and contractors from and against any and all losses, damages, injuries, liabilities, penalties, fines, judgments, claims, demands, suits, actions, costs and expenses (including reasonable attorneys' fees) resulting from, arising out of or connected with (a) all injuries to person or damages to property which are caused by the negligent action or inaction or willful misconduct of such Buyer or the operators of such Buyer's Vessels, or (b) the lifting, shipping, storage, resale, use or processing by any persons of Product purchased by such Buyer from Seller, or (c) demurrage claims or other liability of Seller vis-a-vis NGC and NEC arising as a result of the activities of such Buyer or such Buyer's Vessels at the Pier. 9.4 Indemnification by Seller. Seller agrees to indemnify, hold harmless and defend each Buyer from and against any and all losses, damages, injuries, liabilities, penalties, fines, judgments, claims, demands, suits, actions, costs and expenses (including reasonable attorneys' fees) resulting from, arising out of or connected with all injuries to person, damages to property, or demurrage charges which are caused by the negligent action or inaction or willful misconduct of Seller in connection with the operation of the Facility or under the Pier and Harbour Usage Agreement. ARTICLE 10 ARBITRATION; PERFORMANCE NOTWITHSTANDING DISPUTES 10.1 Arbitration. Any controversy or claim arising out of or relating to this Agreement which cannot be resolved by the Parties shall be settled by arbitration. Arbitration shall be conducted in Washington, D.C., U.S.A. The Seller and the affected Buyer (or both Buyers acting jointly, as appropriate) shall each designate one arbitrator, and the two such designated arbitrators shall mutually agree upon and designate a third arbitrator. Subject to the foregoing, arbitration shall be conducted in accordance with rules and procedures of the United Nations Commission on International Trade Law. Judgment upon the award rendered by the arbitrators may be entered in any Court having jurisdiction thereof. Arbitration awards shall be final. 10.2 Performance Notwithstanding Disputes. No Party shall suspend or terminate performance of its obligations hereunder as a result of a dispute subject to arbitration under Section 10.1 prior to the final resolution of such dispute (including a reasonable time for implementation of the arbitrators' decision) in accordance with Section 10.1. ARTICLE 11 MISCELLANEOUS 11.1 Assignment and Assumption of Obligations. 11.1.1 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their permitted successors and assigns. 11.1.2 Consent. No Party may assign or transfer its interest and/or obligations herein (and any such putative assignment shall, at the option of any other Party, be null and void ab initio) unless such Party first obtains the written consent of the other Parties, which consent shall not be unreasonably withheld. 11.1.3 Collateral Assignment. Seller may assign this Agreement to the Lender as collateral for the obligations of Seller to the Lender under the documents evidencing such financing (the "Financing Documents") and to any parties acquiring the Facility by way of foreclosure or through the exercise of other remedies of the Lender, all pursuant to the terms of an agreement (the "Consent and Agreement") to be entered into among Seller, each Buyer and the Lender upon terms and conditions to be mutually agreed upon. 11.2 No Amendment. No amendment or modification of the terms of this Agreement shall be binding on any Party unless such amendment is reduced to writing and signed by each Party. 11.3 Entire Agreement. This Agreement and the documents referred to herein or delivered pursuant hereto contain the entire agreement and understanding between Seller and Buyers as to the subject matter hereof and supersedes all prior negotiations and understandings between them. 11.4 Notices. Any notice required or permitted to be given hereunder shall be put in writing and shall be deemed to have been given when received by the Party to whom directed at the following address: If to Seller: Farmland MissChem Limited 11-13 Victoria Avenue Port of Spain, Trinidad and Tobago Attention: John Prijatel, President If to Buyers: Mississippi Chemical Corporation P.O. Box 388 Highway 49 East Yazoo City, MS 39194 Attention: Rosalyn Glascoe, Corporate Secretary Farmland Industries, Inc. 3315 North Oak Trafficway P.O. Box 7305, Dept. 65 Kansas City, MO 64116 Attention: Vice President, Crop Production All notices shall be effective upon receipt. Any Party may change its address specified above by giving notice to the other Parties in accordance with the provisions of this Section 11.4. 11.5 Waiver. No waiver by any Party of any of the terms or conditions herein contained shall be effective unless the same shall be in writing and signed by the Party against whom the waiver is sought to be enforced and then shall be effective only in the specific instance and for the specific purpose for which given. 11.6 Choice of Law. This Agreement will in all respects be governed by and interpreted under the substantive laws of the State of New York, U.S.A. applicable to contracts and transactions entirely entered into and performed in the State of New York, without giving effect to conflicts of laws provisions thereof, except Section 5-1401 of the New York General Obligations Law. The parties expressly agree that the U.N. Convention for the International Sale of Goods shall be inapplicable to the construction of or in any dispute arising with respect to this Agreement. 11.7 Captions. All captions are inserted for convenience only, and will not affect any construction or interpretation of this Agreement. 11.8 Severability. Any provision of this Agreement which is or may become prohibited or unenforceable, as a matter of law or regulation, will be ineffective only to the extent of such prohibition or unenforceability and shall not invalidate the remaining provisions hereof if the essential purposes of this Agreement may be given effect despite the prohibition or unenforceability of the affected provision. 11.9 No Third Party Beneficiaries. This Agreement is intended solely for the benefit of the Parties hereto. Nothing in this Agreement shall be construed to create any duty to, standard of care with reference to, liability to, or right of suit or action in, any person not a Party to this Agreement. 11.10 No Legal Interest. This Agreement is intended to operate as an agreement only and nothing herein contained shall be deemed to create or be construed as creating a joint venture, an agency or a partnership among Seller and Buyers, or a demise or grant, or giving any Buyer any legal interest in the Facility or the Pier or any part thereof. 11.11 Counterparts. This Agreement may be signed in counterparts but in such case shall be deemed to be effective only after each of the signatories shall have signed and delivered to the other signatories a counterpart hereof. IN WITNESS WHEREOF, the Parties have caused their duly authorized representatives to execute this Agreement as of the date first set forth above. FARMLAND MISSCHEM LIMITED ("SELLER") By:/s/ Robert W. Honse ---------------------- Robert W. Honse Director MISSISSIPPI CHEMICAL CORPORATION ("BUYER") By:/s/ Timothy A. Dawson ------------------------ Timothy A. Dawson Vice President - Finance FARMLAND INDUSTRIES, INC. ("BUYER") By:/s/ Robert W. Honse ---------------------- Robert W. Honse Executive Vice President and Chief Operating Officer Ag Input Businesses EXHIBIT A [EXHIBIT A TO THIS AGREEMENT IS THE ANHYDROUS AMMONIA PURCHASE AGREEMENT (AMRO) DATED AS OF OCTOBER 18, 1996, AMONG MISSISSIPPI CHEMICAL CORPORATION FARMLAND INDUSTRIES, INC., AND FARMLAND MISSCHEM LIMITED ATTACHED AS EXHIBIT 10.14 TO THIS 10-Q FILING AND IS NOT REPEATED HERE.] EX-1 5 EXHIBIT INDEX TO FORM 10-Q EXHIBIT PAGE NUMBER DESCRIPTION NUMBER - ------- --------------------------------------------------------- ------ 2.1 Asset Purchase Agreement, dated as of May 21, 1996, by and among the Company, Mississippi Acquisition I, Inc., Mississippi Acquisition II, Inc., Eddy Potash, Inc., and New Mexico Potash Corporation; filed as Exhibit 2.1 to the Company's Current Report on Form 8-K filed September 3, 1996, SEC File No. 0-20411, and incorporated herein by reference. 2.2 Agreement and Plan of Merger and Reorganization, dated as of August 27, 1996, by and among the Company, MISS SUB, INC., and First Mississippi Corporation; filed as Exhibit 2.2 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1996, SEC File No. 0- 20411, and incorporated herein by reference. 3.1 Articles of Incorporation of the Company; filed as Exhibit 3.1 to the Company's Amendment No. 1 to Form S-1 Registration Statement filed August 2, 1994, SEC File No. 33-53119, and incorporated herein by reference. 3.2 Bylaws of the Company, filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1997, SEC File No. 1-12217. 4.1 Mississippi Phosphates Corporation 401(k) Retirement Plan; filed as Exhibit 4.3(a) to the Company's Post- Effective Amendment No. 1 to Form S-8 Registration Statement filed June 6, 1995, SEC File No. 33-59577, and incorporated herein by reference. 4.2 Mississippi Chemical Corporation Thrift Plan Plus; filed as Exhibit 4.3(b) to the Company's Post-Effective Amendment No. 1 to Form S-8 Registration Statement filed June 6, 1995, SEC File No. 33-59577, and incorporated herein by reference. 4.3 Mississippi Chemical Corporation 1994 Stock Incentive Plan; filed as Exhibit 4.2 to the Company's Form S-8 Registration Statement filed December 21, 1995, SEC File No. 33-65209, and incorporated herein by reference. 4.4 Mississippi Chemical Corporation 1995 Stock Option Plan for Nonemployee Directors; filed as Exhibit 4.3 to the Company's Form S-8 Registration Statement filed December 21, 1995, SEC File No. 33-65209, and incorporated herein by reference. 4.5 Mississippi Chemical Corporation 1995 Restricted Stock Purchase Plan for Nonemployee Directors; filed as Exhibit 4.4 to the Company's Form S-8 Registration Statement filed December 21, 1995, SEC File No. 33-65209, and incorporated herein by reference. 4.6 Shareholder Rights Plan; filed as Exhibit 1 to the Company's Form 8-A Registration Statement dated August 15, 1994, SEC File No. 2-7803, and incorporated herein by reference. 10.1 Agreement effective as of October 1, 1991, entered into by the Company's subsidiary Mississippi Phosphates Corporation for the exclusive distribution of diammonium phosphate produced by Mississippi Phosphates Corporation; filed as Exhibit 10.1 to Amendment No. 1 to the Company's Report on Form 8 dated January 7, 1993, SEC File No. 2-7803, and incorporated herein by reference. 10.2 Amendment of Agreement, effective as of July 1, 1993, to the Agreement entered into as of October 1, 1991, by the Company's subsidiary Mississippi Phosphates Corporation for the exclusive distribution of diammonium phosphate produced by Mississippi Phosphates Corporation; filed as Exhibit 10.3 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1993, SEC File No. 2- 7803, and incorporated herein by reference. 10.3 Amendment of Agreement, effective as of August 1, 1994, to the Agreement entered into as of October 1, 1991, by the Company's subsidiary Mississippi Phosphates Corporation for the exclusive distribution of diammonium phosphate produced by Mississippi Phosphates Corporation; filed as Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1995, SEC File No. 2-7803, and incorporated herein by reference. 10.4 Agreement made and entered into as of September 15, 1991, between Office Cherifien des Phosphates and the Company's subsidiary Mississippi Phosphates Corporation for the sale and purchase of phosphate rock; filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1991, File No. 2-7803, and incorporated herein by reference. 10.5 Amendment No. 1, effective as of July 1, 1992, to the Agreement effective as of September 15, 1991, between Office Cherifien des Phosphates and the Company's subsidiary Mississippi Phosphates Corporation for the sale and purchase of phosphate rock; filed as Exhibit 10.12 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1995, SEC File No. 2-7803, and incorporated herein by reference1 10.6 Amendment No. 2, effective as of July 1, 1993, to the Agreement effective as of September 15, 1991, between Office Cherifien des Phosphates and the Company's subsidiary Mississippi Phosphates Corporation for the sale and purchase of phosphate rock; filed as Exhibit 10.11 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1995, SEC File No. 2-7803, and incorporated herein by reference.2 10.7 Amendment No. 3, effective as of January 1, 1995, to the Agreement effective as of September 15, 1991, between Office Cherifien des Phosphates and the Company's subsidiary Mississippi Phosphates Corporation for the sale and purchase of phosphate rock; filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1995, SEC File No. 2-7803, and incorporated herein by reference.3 10.8 Amendment No. 4, effective as of January 1, 1997, to the Agreement effective as of September 15, 1991, between Office Cherifien des Phosphates and the Company's subsidiary Mississippi Phosphates Corporation for the sale and purchase of phosphate rock; filed as Exibit 10.8 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1997, SEC File No. 1-12217, and incorported herein by reference. 10.9 Gas Sales Agreement entered into by the Company and Sonat Marketing Company as of July 13, 1995, for the sale and purchase of natural gas; filed as Exhibit 10.13 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1995, SEC File No. 2-7803, and incorporated herein by reference.4 - --------------------- 1 Pursuant to the Securities Exchange Act of 1934, Rule 24b-2, confidential business information has been deleted from the first and second paragraphs of paragraph numbered 1 of Amendment No. 1 and an application for confidential treatment has been filed separately with the Commission. 2 Pursuant to the Securities Exchange Act of 1934, Rule 24b-2, confidential business information has been deleted from paragraphs numbered 5 and 8 of Amendment No. 2; from the first paragraph, paragraph numbered 1, paragraph numbered 2, and paragraph numbered 3 of Schedule 1, Exhibit A; from Schedule 2, Exhibit B; from Schedule 3, Exhibit C, and from Schedule 4, Exhibit D; and an application for confidential treatment has been filed separately with the Commission. 3 Pursuant to the Securities Exchange Act of 1934, Rule 24b-2, confidential business information has been deleted from Schedule 1 to Amendment No. 3, Exhibit B, and an application for confidential treatment has been filed separately with the Commission. 4 Pursuant to the Securities Exchange Act of 1934, Rule 24b-2, confidential business information has been deleted from Article IV, Price, and an application for confidential treatment has been filed separately with the Commission. - ------------------------ 10.10 Agreement for Real Estate Purchase Option dated July 16, 1990, for the sale of the Company's Hardee County, Florida, property and underlying phosphate reserves; filed as an exhibit to Exhibit 4.2 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1990, SEC File No. 2-7803, and incorporated herein by reference. 10.11 Form of Severance Agreement dated July 29, 1996, by and between the Company and each of its Executive Officers; filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1996, SEC File No. 2-7803, and incorporated herein by reference. 10.12 Credit Agreement dated as of December 23, 1996, by and among First Mississippi Corporation; AMPRO Fertilizer, Inc.; Harris Trust and Savings Bank, as Administrative Agent; Bank of Montreal, Chicago Branch, as Syndication Agent; Caisse Nationale de Credit Agricole and CIBC Inc. as Co-Agents; and the other lenders party thereto; filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed January 6, 1997, SEC File No. 0-20411, and incorporated herein by reference. 10.13 Credit Agreement dated as of December 23, 1996, by and among Mississippi Chemical Corporation; Mississippi Phosphates Corporation; Mississippi Potash, Inc.; Harris Trust and Savings Bank, as Administrative Agent; Bank of Montreal, Chicago Branch, as Syndication Agent; Caisse Nationale de Credit Agricole and CIBC Inc. as Co-Agents; and the other lenders party thereto; filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed January 6, 1997, SEC File No. 0-20411, and incorporated herein by reference. 10.14 Anhydrous Ammonia Purchase Agreement (AMRO) dated as of October 18, 1996, among Mississippi Chemical Corporation, Farmland Industries, Inc., and Farmland MissChem Limited whereby Mississippi Chemical Corporation and Farmland Industries, Inc., on an individual basis, will purchase from Farmland MissChem Limited, a portion of the total anhydrous ammonia output produced by its facility located on the island of Trinidad in The Republic of Trinidad and Tobago, which Agreement will be in place during the term of the AMRO permanent financing facility. 10.15 Anhydrous Ammonia Purchase Agreement (EX-IM) dated as of October 18, 1996, among Mississippi Chemical Corporation, Farmland Industries, Inc., and Farmland MissChem Limited whereby Mississippi Chemical Corporation and Farmland Industries, Inc., on an individual basis, will purchase from Farmland MissChem Limited, a portion of the total anhydrous ammonia output produced by its facility located on the island of Trinidad in The Republic of Trinidad and Tobago, which Agreement will be in place during the term of the EximBank permanent financing facility. 23 Consent of Arthur Andersen LLP; filed as Exhibit 23 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1997, SEC File No. 1-12217, and incorporated herein by reference. 27 Financial Data Schedule.
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