-----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, TqlxTjgC26nSc6DmcYNupUpPPR0bsEISGoQl5A7cYEwBofn+biV9Znr4pljRy76+ nNQZKt9ooUpWCvCrb1KhNw== 0000793421-96-000001.txt : 19960329 0000793421-96-000001.hdr.sgml : 19960329 ACCESSION NUMBER: 0000793421-96-000001 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960328 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FREEPORT MCMORAN RESOURCE PARTNERS LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000793421 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 721067072 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-09164 FILM NUMBER: 96540426 BUSINESS ADDRESS: STREET 1: 1615 POYDRAS ST CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045824000 FORMER COMPANY: FORMER CONFORMED NAME: FREEPORT MCMORAN RESOURCE PARTNERS LP DATE OF NAME CHANGE: 19860618 10-K405 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1995 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to _______________ Commission file number 1-9164 Freeport-McMoRan Resource Partners, Limited Partnership (Exact name of registrant as specified in its charter) Delaware 72-1067072 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1615 Poydras Street New Orleans, Louisiana 70112 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (504) 582-4000 Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange on Title of Each Class Which Registered ___________________ ________________ Depositary Units New York Stock Exchange 8 3/4% Senior Subordinated Notes due 2004 New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X ----- The aggregate market value of the Depositary Units held by non- affiliates of the registrant was approximately $1,096,975,000 on March 8, 1996. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Annual Report to unit holders for the year ended December 31, 1995 are incorporated by reference into Parts II and IV of this report. _______________________________________________________________________________ TABLE OF CONTENTS Page Part I.......................................................................1 Items 1 and 2. Business and Properties.................................1 Overview.......................................................1 Agricultural Minerals..........................................1 Fertilizer Business-IMC-Agrico Company.......................2 Phosphate Rock...............................................2 Phosphate Fertilizers........................................2 Animal Feed Ingredients......................................3 Marketing....................................................3 Sulphur Business...............................................4 Production...................................................4 Marketing....................................................5 Oil............................................................5 General........................................................5 Competition..................................................5 Operating Hazards............................................5 Environmental Matters........................................6 Relationship Between the Company and the FTX Group.............6 Management and Ownership.....................................6 Credit Arrangements..........................................7 Conflicts of Interest........................................7 Administrative Services Agreement............................8 Item 3. Legal Proceedings............................................8 Item 4. Submission of Matters to a Vote of Security Holders..........8 Part II......................................................................8 Item 5. Market for Registrant's Common Equity and Related Stockholder Matters..........................................8 Item 6. Selected Financial Data......................................8 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations..........................9 Item 8. Financial Statements and Supplementary Data..................9 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..........................9 Part III.....................................................................9 Item 10. Directors and Executive Officers of the Registrant...........9 Item 11. Executive Compensation......................................10 Item 12. Security Ownership of Certain Beneficial Owners and Management..................................................10 Item 13. Certain Relationships and Related Transactions..............12 Part IV.....................................................................12 Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K..............................................................12 Signatures.................................................................S-1 Index to Financial Statements..............................................F-1 Exhibit Index..............................................................E-1 PART I Items 1 and 2. Business and Properties. OVERVIEW Freeport-McMoRan Resource Partners, Limited Partnership ("FRP" or the "Company"), through its subsidiaries and joint venture operations, is one of the world's leading integrated phosphate fertilizer producers. The Company is a joint venture partner in IMC-Agrico Company ("IMC-Agrico"), the world's largest and one of the world's lowest cost producers, marketers and distributors of phosphate fertilizers, with operations in Central Florida and on the Mississippi River in Louisiana. FRP's Main Pass sulphur mine, offshore Louisiana in the Gulf of Mexico, and its Culberson mine in Texas, also make FRP the largest producer of Frasch sulphur in the world. The combined sulphur and phosphate mining and fertilizer production operations provide FRP with the competitive advantages of vertical integration and operating efficiencies and reduce the sensitivity of FRP's phosphate fertilizer costs to changes in raw materials prices. IMC-Agrico's business includes the mining and sale of phosphate rock and the production, marketing and distribution of phosphate fertilizers and animal feed ingredients. IMC-Agrico was formed as a joint venture partnership in July 1993 when FRP and IMC Global Inc. ("IMC") contributed their respective phosphate fertilizer businesses to IMC-Agrico. FRP believes that the combination of its internal production of raw materials, through its sulphur division and the IMC-Agrico joint venture, and the strategic location of IMC- Agrico's fertilizer operations provide it with a competitive advantage over other fertilizer producers. FRP's sulphur operations include the mining, purchase, transportation, terminalling and marketing of sulphur. The Main Pass deposit, which was discovered in 1988, contains the largest known sulphur reserve in North America. FRP's Main Pass offshore mining complex is the largest structure of its type in the Gulf of Mexico and one of the largest in the world. The mining complex reached full design capacity of 5,500 long tons per day in December 1993 and has since operated at or above design level. FRP has a 58.3% interest in the Main Pass mine and serves as its manager and operator. In January 1995, the Company began operating the Culberson mine when it acquired substantially all of the domestic assets of Pennzoil Sulphur Co. ("Pennzoil"). As of December 31, 1995, the Main Pass and Culberson mines were estimated to contain proved and probable sulphur reserves totaling 55.2 million long tons net to FRP. Main Pass also contains proved oil reserves from which FRP produces and sells oil for the Main Pass joint venture. Oil production averaged approximately 12,400 barrels per day (6,000 barrels net to FRP) during the year ended December 31, 1995. As of December 31, 1995, Main Pass was estimated to contain 15.9 million barrels (6.6 million barrels net to FRP) of proved oil reserves. FRP continues to benefit from significant improvements in phosphate fertilizer markets that began in late 1993 and continue into 1996. FRP's 1995 average realization for its principal fertilizer product, diammonium phosphate ("DAP"), increased approximately 55% to approximately $175 per short ton from the 1993 average of approximately $113 per short ton. In late March 1996, the spot market price for DAP as quoted in industry publications was approximately $200 per short ton, FOB Central Florida. The Company is a publicly traded Delaware limited partnership organized in 1986, the managing general partners of which are Freeport-McMoRan Inc. ("FTX") and FMRP Inc. ("FMRP"), a wholly owned subsidiary of FTX. As of December 31, 1995, FTX and FMRP held partnership units representing an approximate 51.5% interest in FRP, with the remaining interest being publicly owned and traded on the New York Stock Exchange. The public unitholders are entitled, through the fourth quarter of 1996, to receive minimum quarterly distributions prior to any distribution on the partnership units held by FTX and FMRP. See "Relationship Between the Company and the FTX Group." AGRICULTURAL MINERALS FRP's agricultural minerals operations consists of its interest in the IMC-Agrico joint venture and FRP's sulphur business. Fertilizer Business-IMC-Agrico Company In July 1993, FRP and IMC contributed to IMC-Agrico their respective phosphate fertilizer businesses, including the mining and sale of phosphate rock and the production, marketing and distribution of phosphate fertilizers. At the time, FRP and IMC were among the largest and lowest cost phosphate fertilizer producers in the world. The formation of IMC-Agrico has reduced production costs by permitting the more efficient use of existing plant capacity as well as eliminating duplicative administrative and marketing functions. IMC-Agrico makes quarterly cash distributions to FRP and IMC, based on sharing ratios that vary from year to year until the fiscal year ending June 30, 1998. As a result of an agreement reached in January 1996, FRP's Current Interest was increased by 0.85% effective March 1, 1996, and on July 1, 1996, FRP's Capital Interest will also be increased by 0.85%. FRP's Current Interest and its Capital Interest as adjusted to give effect to the increases described above, are as follows: Fiscal Year Current Interest Capital Interest Ending June 30 As Adjusted As Adjusted ______________ ________________ ________________ 1996 . . . . . . . . . . 53.95% 43.60% 1997 . . . . . . . . . . 54.35% 43.05% 1998 and thereafter. . . 41.45% 41.45% The IMC-Agrico policy committee establishes policies relating to the strategic direction of IMC-Agrico and assures that its policies are implemented. FRP and IMC have equal representation on the policy committee. The policy committee has the sole authority to make certain decisions affecting IMC-Agrico, including the authorization of certain expansion capital expenditures, incurring certain indebtedness, approving significant acquisitions and dispositions and certain other decisions. In January 1996, IMC-Agrico's day-to-day management was restructured so that it operates substantially as a stand-alone entity. Included in the restructuring was the establishment of a new office of the president of IMC- Agrico who is responsible for managing its business affairs. The president is appointed by IMC subject to the approval of the policy committee. An executive officer of FRP was selected as the initial president of IMC-Agrico and has joined IMC-Agrico in that role. The president reports to IMC who maintains responsibility for the operation of IMC-Agrico, subject to the terms of the partnership agreement governing IMC-Agrico and the direction of the policy committee. Phosphate Rock IMC-Agrico's phosphate mining operations and production plants, located in Polk, Hillsborough, Hardee and Manatee Counties in central Florida, produce phosphate rock principally for the manufacture of phosphate fertilizers. IMC- Agrico sells phosphate rock to foreign distributors, domestic animal feed manufacturers and other phosphate fertilizer producers. IMC-Agrico uses phosphate rock internally in the production of phosphate fertilizers at its plants located in central Florida and in Louisiana. Phosphate rock is generally mixed with sulphuric acid to produce phosphoric acid from which various granulated phosphate products can be produced. IMC-Agrico's annual phosphate rock mining capacity is approximately 27 million tons per year and currently accounts for approximately 50% of domestic phosphate rock mining capacity and 19% of the western world's capacity. IMC-Agrico produced approximately 25 million tons of phosphate rock during the year ended December 31, 1995. As of December 31, 1995, FRP's share of IMC-Agrico's proved and probable phosphate rock reserves were approximately 186.4 million short tons that are mineable from existing operations, plus an additional 183.8 million short tons of phosphate rock deposits. Deposits are ore bodies which require additional economic and mining feasibility studies before they can be classified as reserves. These reserves are either owned by IMC-Agrico or controlled by it through long-term lease or royalty arrangements. Phosphate Fertilizers IMC-Agrico manufactures phosphate fertilizers, principally DAP, monoammonium phosphate ("MAP") and granular triple superphosphate ("GTSP"), and related products, including sulphuric acid, phosphoric acid, anhydrous ammonia and urea. IMC-Agrico's fertilizer operations consist of six phosphoric acid and fertilizer manufacturing facilities, three in central Florida and three on the Mississippi River in Louisiana. IMC-Agrico's New Wales, Nichols and South Pierce plants are located in Florida. The New Wales complex, located near Mulberry, Florida, primarily produces DAP, MAP, GTSP and merchant grade phosphoric acid. The New Wales plant also produces animal feed ingredients (see "Animal Feed Ingredients"). The Nichols plant, located in Nichols, Florida, produces DAP, sulphuric acid and phosphoric acid. The South Pierce plant, located in Bartow, Florida, produces GTSP, sulphuric acid and phosphoric acid. IMC-Agrico's Faustina, Uncle Sam and Taft plants are located in Louisiana. The Faustina plant, located in Donaldsonville, Louisiana, produces DAP, MAP, anhydrous ammonia, urea, sulphuric acid and phosphoric acid. The Uncle Sam plant, located at Uncle Sam, Louisiana, produces sulphuric acid and phosphoric acid which is then shipped to the nearby Faustina and Taft plants, where it is used to produce DAP and MAP. The Taft plant, located in Taft, Louisiana, produces DAP and MAP. As market conditions dictate, operations at Taft are suspended by IMC-Agrico to avoid building excessive inventories. Phosphate rock, sulphur and ammonia are the three principal raw materials used in the production of phosphate fertilizers. Phosphate rock is supplied by IMC-Agrico's Florida mines. FRP supplies its share of IMC-Agrico's sulphur requirements through its production from the Main Pass and Culberson mines and IMC supplies IMC-Agrico with its sulphur requirements from its share of Main Pass production and purchases from third parties, including FRP. IMC- Agrico's ammonia needs are fulfilled by internal production from its Faustina plant and third party domestic suppliers under long-term contracts. IMC-Agrico's phosphoric acid capacity is approximately 4.0 million tons of contained P2O5 (P2O5 is an industry term indicating a product's phosphate content measured chemically in units of phosphorous pentoxide), which represents approximately 32% of U.S. production capacity and 11% of world capacity. IMC-Agrico operated at approximately 97% of P2O5 capacity in 1995 as compared to 93% in 1994. IMC-Agrico's plants have an estimated annual sustainable capacity to produce approximately 8.2 million tons of granulated phosphates (DAP, MAP and GTSP), 10.4 million tons of sulphuric acid, 260,000 tons of urea and 565,000 tons of anhydrous ammonia. During 1995, IMC-Agrico produced approximately 7.6 million tons of granulated phosphates, as compared to 7.1 million tons in 1994. Animal Feed Ingredients In October 1995, IMC-Agrico acquired the animal feed ingredients business of Mallinckrodt Group Inc. for $110 million cash. Prior to the acquisition, this business was IMC-Agrico's largest P2O5 customer, consuming nearly 300,000 tons per year (approximately 7% of IMC-Agrico's capacity). FRP's portion of the purchase price was $46.2 million and was funded by borrowings under the Credit Facility. See "Relationship Between the Company and the FTX Group-Credit Arrangements." Prior to the acquisition, IMC-Agrico managed Mallinckrodt's animal feed plant operations on a contractual basis. The principal manufacturing facilities of the animal feed operations are located within IMC-Agrico's New Wales complex. This newly acquired business is one of the world's largest producers of phosphate-based animal feed ingredients and enhances IMC-Agrico's flexibility in maximizing returns from its core phosphate production. Marketing IMC-Agrico sells its fertilizer products in the domestic and export markets under spot market and long-term contract terms. IMC-Agrico markets its products domestically throughout the eastern two-thirds of the United States. In 1995, approximately 40% of IMC-Agrico's phosphate fertilizer shipments were sold in the domestic market. Approximately 60% of IMC-Agrico's phosphate rock production was used in 1995 to produce phosphate fertilizers at its plants in Florida and Louisiana, with a majority of the remaining amount sold in the domestic market. Virtually all of FRP's export sales of phosphate fertilizers are marketed through the Phosphate Chemical Export Association ("Phoschem"), a Webb-Pomerene Act association. Since January 1995, IMC has been responsible for marketing DAP, MAP and GTSP for PhosChem's members. This marketing arrangement allows IMC-Agrico to interface directly with its major international customers and enhances its ability to pursue growth and marketing opportunities on a global basis. Although phosphate fertilizer sales are fairly constant from month to month, seasonal increases occur in the domestic market prior to the fall and spring planting of crops. Generally, domestic sales taper off after the spring planting season. However, this decline in domestic sales generally coincides with a time when major international buyers such as China, India and Pakistan purchase product for mid-year delivery. In conducting business abroad, IMC-Agrico is subject to the customary risks encountered in foreign operations, including changes in currency and exchange controls, the availability of foreign exchange, laws, policies and actions affecting foreign trade and government subsidies, tariffs and quotas. All of the Company's major products are commodities, and the markets and prices for such products have been volatile historically and may continue to be volatile in the future. The Company's operating margins and cash flow are subject to substantial fluctuations in response to changes in supply and demand for its products, conditions in the domestic and foreign agriculture industry, market uncertainties and a variety of additional factors beyond the Company's control. SULPHUR BUSINESS FRP's sulphur operations include the mining, purchase, transportation, terminalling and sale of sulphur. In January 1995, FRP acquired essentially all of the domestic assets of Pennzoil, including the Culberson mine in Texas, sulphur terminals and loading facilities in Galveston, Texas and Tampa, Florida, land and marine transportation equipment and sales and other related commercial contracts and obligations. As a result, FRP now produces sulphur from its Main Pass and Culberson mines for sale to IMC-Agrico and to third parties. Production The Main Pass and Culberson mines utilize the Frasch mining process, which involves drilling wells and injecting superheated water into the underground sulphur deposit to melt the solid sulphur, which is then brought to the surface in liquid form. FRP and its predecessors have been using the Frasch process for over 80 years. FRP has also developed technology that allows it to use sea water in the Frasch process. FRP is not aware of any competitor that has developed a Frasch sulphur mine using superheated sea water. The Main Pass deposit was discovered by FRP in 1988. The mine currently has the highest production rate of any sulphur mine in the world and contains the largest known existing Frasch sulphur reserve in North America. The Main Pass offshore complex, more than a mile in length, is one of the largest structures of its type in the world and the largest in the Gulf of Mexico. The Main Pass mine reached full design capacity of 5,500 long tons per day in December 1993 and has since operated at or above design capacity. During the year ended December 31, 1995, production averaged approximately 6,000 long tons per day. The mine is owned 58.3% by FRP, 25% by IMC and 16.7% by Homestake Sulphur Company. At December 31, 1995, the Main Pass deposit was estimated to contain proved and probable sulphur reserves totaling 68.1 million long tons (39.7 million long tons net to FRP). FRP began operating the Culberson mine in January 1995 after acquiring the mine from Pennzoil. For the year ended December 31, 1995, production at the Culberson mine averaged approximately 2,500 long tons per day. FRP is implementing strategies to strengthen operating efficiencies at the Culberson mine to further reduce costs. As of December 31, 1995, the Culberson mine was estimated to contain proved and probable sulphur reserves totaling 15.5 million long tons. FRP also supplements its sulphur production by purchasing sulphur from third parties who recover sulphur in the production of oil and natural gas and the refining of petroleum products. Marketing Sulphur produced at the Main Pass mine is transported by barge in liquid form to its storage, handling and shipping facilities located at Port Sulphur, Louisiana. Sulphur production from the Culberson mine is transported in liquid form by unit train to Galveston where storing, handling and shipping facilities are located. At both Port Sulphur and Galveston, sulphur purchased from others or transported for others may also be received. Sulphur is transported from Port Sulphur by barge to IMC-Agrico's and other customers' plants in Louisiana on the Mississippi River. Molten sulphur is also transported from Galveston and Port Sulphur by tanker to FRP's terminals at Tampa. Similar facilities at Pensacola, Florida are used for storage, handling and shipping of sulphur purchased from others or transported for others. FRP processes and transports for a fee both IMC's and Homestake's share of Main Pass sulphur and serves as marketing agent for Homestake. FRP's production of sulphur accounted for an estimated 30% of domestic and 8% of world elemental sulphur production in 1995. FRP's sulphur is used primarily to manufacture sulphuric acid, which is used primarily to produce phosphoric acid, one of the basic materials used to produce phosphate fertilizers. During the year ended December 31, 1995, sales to domestic phosphate fertilizer producers, including IMC-Agrico, accounted for approximately 65% of FRP's total sulphur sales. A small number of companies account for a large portion of total United States sulphur consumption. OIL Oil reserves are associated with the same caprock reservoir as the sulphur reserves at Main Pass. Oil production commenced in the fourth quarter of 1991 and averaged approximately 12,400 barrels per day (6,000 barrels per day net to FRP) during the year ended December 31, 1995. As of December 31, 1995, FRP estimated that the remaining proved recoverable oil reserves at Main Pass were approximately 15.9 million barrels (6.6 million barrels net to FRP). FRP currently does not intend to pursue oil operations that are not related to Main Pass. GENERAL Competition The sulphur, fertilizer and phosphate rock mining industries are highly competitive. All of the Company's products are commodities and the markets for such products can be volatile. Because competition is based largely on price, maintaining low production costs is critical to competitiveness. In this global business, IMC-Agrico faces stiff competition from overseas producers, most of which are state supported, especially those in North Africa and the former Soviet Union. Additionally, foreign competitors are frequently motivated by non-market factors such as the need for hard currency. In the United States, IMC-Agrico competes against a number of major phosphate fertilizer producers, including large cooperatives. FRP competes in the sulphur business with a number of domestic marketers of recovered sulphur and with Canadian, Mexican and Venezualan imports. Operating Hazards The production of sulphur and phosphate fertilizer involves the handling of hazardous or toxic substances, some of which may have the potential, if released into the environment in sufficient quantities, to expose FRP and IMC- Agrico to significant liability. See "Environmental Matters." FRP's offshore sulphur mining and oil production operations, and its marine transportation operations, are subject to marine perils, including hurricanes and other adverse weather conditions. FRP's mining operations are also subject to the usual risks encountered in the Frasch mining industry, including fires, underground subsidence and blowouts. FRP's oil activities are subject to all of the risks normally incident to the development and production of oil, including blowouts, cratering and fires, each of which could result in injury to personnel and/or damage to property and the environment. The Company has in place programs to minimize the risks associated with its businesses. In addition, it has the benefit of certain liability, property damage, business interruption and other insurance coverage in types and amounts that it considers reasonable and believes to be customary in the Company's business. This insurance provides protection against loss from some, but not all, potential liabilities normally incident to the ordinary conduct of the Company's business, including coverage for certain types of damages associated with environmental and other liabilities that arise from sudden, unexpected and unforeseen events, with such coverage limits as management deems prudent. Through FTX, the Company also maintains a property insurance program that covers some, but not all of the risks of physical damage to tangible property of the Company as well as the corresponding cost of business interruption. Environmental Matters FTX and FRP have a history of commitment to environmental responsibility. Since the 1940s, long before the general public recognized the importance of maintaining environmental quality, FTX has conducted preoperational, bioassay, marine ecological and other environmental surveys to ensure the environmental compatibility of its operations. FTX's Environmental Policy commits its operations to compliance with applicable laws and regulations. FTX has implemented corporate-wide environmental programs that include the activities of FRP and continues to study methods to reduce discharges and emissions. FRP's operations are subject to federal, state and local laws and regulations relating to the protection of the environment. Exploration, mining, development and production of natural resources, and the chemical processing operations of IMC-Agrico, like similar operations of other companies, may affect the environment. Moreover, such operations involve the extraction, handling, production, processing, treatment, storage, transportation and disposal of materials and waste products that, under certain conditions, may be toxic or hazardous and are regulated under environmental laws. Although significant capital expenditures and operating costs have been and will continue to be incurred based on these requirements, FRP does not believe these expenditures and costs have had a material adverse effect on its business. Continued government and public emphasis on environmental issues can be expected to result in increased capital expenditures and operating costs in the future. However, the impact of future laws and regulations or of future changes to existing laws and regulations cannot be predicted or quantified. Federal legislation (sometimes referred to as "Superfund") imposes liability, without regard to fault, for cleanup of certain waste sites, even though such waste management activities may have been performed in compliance with regulations applicable at the time. Under the Superfund legislation, one party may be required to bear more than its proportional share of cleanup costs at a site where it has responsibility pursuant to the legislation, if payments cannot be obtained from other responsible parties. Other legislation mandates cleanup of certain wastes at operating sites. States also have regulatory programs that can mandate waste cleanup. Liability under these laws can be significant and involves inherent uncertainties. The Company has received notices from governmental agencies that it is one of many potentially responsible parties at certain sites under relevant federal and state environmental laws. Some of these sites involve significant cleanup costs; however, at each of these sites other large companies with equal or larger proportionate shares are among the potentially responsible parties. The ultimate settlement for such sites usually occurs several years subsequent to the receipt of notices identifying potentially responsible parties because of the many complex technical and financial issues associated with site cleanup. FRP believes that the aggregate costs involved with these potential liabilities at sites for which notification has been received will not exceed amounts accrued and expects that any resulting costs would be incurred over a period of years. RELATIONSHIP BETWEEN THE COMPANY AND THE FTX GROUP Management and Ownership FTX and FMRP serve as the managing general partners of the Company and the directors and officers of FTX, together with FRP's officers, perform all FRP management functions and carry out the activities of FRP. The officers of FRP continue to be employees and officers of FTX and its other subsidiaries, but subject to certain exceptions, are employed principally for the operation of FRP's business. As of December 31, 1995, FTX and FMRP held partnership interests that represented an approximate 51.5% interest in the Company. As a result of being the administrative managing general partner and this ownership, FTX has the ability to control all matters relating to the management of the Company, including any determination with respect to the acquisition or disposition of Company assets, future issuance of additional debt or other securities of the Company and any distributions payable in respect of the Company's partnership interests. In addition to such other obligations as it may assume, FTX has the general duty to act in good faith and to exercise its rights of control in a manner that is fair and reasonable to the holders of partnership interests. Under the terms of FRP's credit facility (the "Credit Facility"), the failure by FTX to maintain control of FRP, or the direct or indirect ownership of at least 50.1% of the partnership interests in FRP, would allow acceleration of the indebtedness thereunder. See "-Credit Arrangements." Publicly owned FRP units have cumulative preferential rights to receive minimum quarterly distributions of 60 cents per unit through the distribution to be made with respect to the quarter ending December 31, 1996 before any distributions may be made to FTX. On February 15, 1996, FRP paid a distribution of 62.5 cents per publicly held unit ($31.3 million) and 67.35 cents per FTX owned unit ($35.9 million), which reduced the total unpaid distribution due FTX by $2.6 million to $379.9 million. After December 31, 1996, FTX will recover this unpaid distribution on a quarterly basis from one half of any excess of future quarterly distributions over 60 cents per unit for all units. Credit Arrangements On June 30, 1995, FTX and FRP entered into the Credit Facility, which is structured as a five-year revolving line of credit maturing on June 30, 2000. In February 1996, FRP sold $150 million of its 7% senior notes due 2008. Following the sale of notes in February 1996, the committed amount under the Credit Facility was reduced to $300 million, all of which is available to FRP and $75 million of which is available to FTX. As of March 8, 1996, $50 million was outstanding and $250 million was available under the Credit Facility. Under the Credit Facility, FTX is required to maintain at least a 50.1% ownership interest in FRP and control of FRP. FRP is not permitted to enter into any agreement restricting its ability to make distributions and is restricted in its ability to create liens and security interests on its assets. To secure the Credit Facility, FTX has pledged its FRP units representing a minimum 50.1% ownership in FRP and FRP has granted a security interest in its interest in IMC-Agrico and the Main Pass oil reserves. The Credit Facility places restrictions on, among other things, additional borrowings and requires FRP to maintain certain minimum working capital levels and specified cash flow to interest coverage ratios and not to exceed a specified debt-to-capitalization ratio. FRP has minimized amounts outstanding under the Credit Facility by borrowing excess funds from FTX. As of December 31, 1995, $24.7 million was outstanding under this arrangement. Interest is charged based on interest rates under the Credit Facility. In February 1994, IMC-Agrico entered into a $75 million revolving credit facility with a group of banks (the "IMC-Agrico Facility"). The IMC-Agrico Facility, which has a letter of credit subfacility for up to $25 million, provides for a three-year maturity with IMC-Agrico having the right to request one-year extensions of the revolving period. As of December 31, 1995, there were no borrowings outstanding under the IMC-Agrico Facility. Borrowings under the IMC-Agrico Facility are unsecured, with a negative pledge on substantially all of IMC-Agrico's assets. The IMC-Agrico Facility has minimum net partners' capital and fixed charge coverage requirements and a current ratio test, and places limitations on the incurrence of additional debt. It also prohibits changes, without bank approval, to the IMC-Agrico partnership agreement relating to distributions. Conflicts of Interest The nature of the respective businesses of the Company and FTX and its affiliates may give rise to conflicts of interest between the Company and FTX. Conflicts could arise, for example, with respect to transactions involving potential acquisitions of businesses or mineral properties, the issuance of additional partnership interests, the determination of distributions to be made by the Company, the allocation of general and administrative expenses between FTX and the Company and other business dealings between the Company and FTX and its affiliates. Except in cases where a different standard may have been provided for, FTX has a general duty to act in good faith and to exercise rights of control in a manner that is fair and reasonable to the holders of FRP's partnership interests. In resolving conflicts of interest, FRP's partnership agreement permits FTX to consider the relative interest of each party to a potential conflict situation which, under certain circumstances, could include the interest of FTX and its other affiliates. The extent to which this provision is enforceable under Delaware law is not clear. Administrative Services Agreement Since January 1, 1996, FM Services Company ("FMS"), a company owned 50% by each of FTX and FCX, has furnished general executive, administrative, financial, accounting, legal, environmental, insurance, personnel, engineering, tax, research and development, sales and certain other services to FTX pursuant to the terms of an Administrative Services Agreement (the "Services Agreement") in order to enable FTX to perform its duties as administrative managing general partner of the Company. The nature and timing of the services provided under the Services Agreement are similar to those historically provided directly by FTX to the Company. FRP reimburses FTX, at FTX's cost, including allocated overhead, for such services on a monthly basis, including amounts paid by FTX under the Services Agreement and allocated to FRP. Such costs are allocated among FRP, FTX and certain of FTX's other affiliates based on direct utilization whenever possible and an allocation formula based on a combination of the operating income, property, plant and equipment and capital expenditures of FRP, FTX and such other affiliates. Item 3. Legal Proceedings. FRP is involved from time to time in various legal proceedings of a character normally incident to its businesses. FRP believes that its potential liability in any such pending or threatened proceedings will not have a material adverse effect on the financial condition or results of operations of FRP. FRP, through FTX, maintains liability insurance to cover some, but not all, potential liabilities normally incident to the ordinary course of its businesses with such coverage limits as management deems prudent. Item 4. Submission of Matters to a Vote of Security Holders. Not applicable. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. The information set forth under the captions "FRP Units" and "Cash Distributions" on the inside back cover of FRP's 1995 Annual Report to unitholders is incorporated herein by reference. As of March 8, 1996, there were 13,756 record holders of FRP Units. Item 6. Selected Financial Data. The information set forth under the caption "Selected Financial and Operating Data" on page 10 of FRP's 1995 Annual Report to unitholders is incorporated herein by reference. FRP's ratio of earnings to fixed charges for each of the years 1991 through 1995 inclusive, was 4.4x, 1.0x, a shortfall of $233.5 million, 3.2x and 5.5x, respectively. For purposes of this calculation, earnings are considered income from continuing operations before fixed charges. Fixed charges are interest and that portion of rent deemed representative of interest. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 11 through 16 of FRP's 1995 Annual Report to unitholders is incorporated herein by reference. Item 8. Financial Statements and Supplementary Data. The financial statements of FRP, the notes thereto and the report thereon of Arthur Andersen LLP appearing on pages 17 through 27 and the report of management appearing on page 17 of FRP's 1995 Annual Report to unitholders are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable. PART III Item 10. Directors and Executive Officers of the Registrant. As a limited partnership FRP has no directors. FTX and FMRP, as the managing general partners of FRP, perform comparable functions for FRP. The executive officers of FRP are appointed by FTX, and these officers, together with certain executive officers and directors of FTX, perform all management functions of FRP. The executive officers of FRP are employees of FTX. These FRP executive officers, together with the directors and executive officers of FTX who perform management functions on behalf of FRP, are collectively referred to as the "Executive Officers" in this Report. The following table shows, as of March 8, 1996, the names, ages, positions with FRP, FTX and FMRP and principal occupations of the Executive Officers: Name Age Positions and Principal Occupations Richard C. Adkerson 49 Director and Vice Chairman of the Board of FTX. Thomas J. Egan 51 Senior Vice President of FTX. Charles W. Goodyear 38 Senior Vice President - Finance and Accounting and Chief Financial Officer of FRP. Executive Vice President of FTX. Director of FMRP. W. Russell King 46 Senior Vice President of FTX. Rene L. Latiolais 53 President and Chief Executive Officer of FRP. Director, President and Chief Executive Officer of FTX. Director, Chairman of the Board, and President of FMRP. James R. Moffett 57 Director and Chairman of the Board of FTX. All of the Executive Officers have served FTX or FRP in various executive capacities for at least the last five years. Based upon a review of (i) Forms 3 and 4 and amendments thereto filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 ("Section 16") and furnished to FRP during 1995 by persons subject to Section 16 at any time during 1995 with respect to securities of FRP ("FRP Section 16 Insiders"), (ii) Forms 5 and amendments thereto with respect to 1995 filed pursuant to Section 16 and furnished to FRP by FRP Section 16 Insiders, and (iii) written representations from certain FRP Section 16 Insiders, no FRP Section 16 Insider failed to file altogether or timely any reports required by Section 16 with respect to the securities of FRP. Item 11. Executive Compensation. FRP does not employ any Executive Officers and no compensation was provided by FRP to any Executive Officer for services rendered in any capacity in 1995. The President and Chief Executive Officer of FRP is Rene L. Latiolais, and the four most highly compensated Executive Officers other than Mr. Latiolais in 1995 were Richard H. Block, Robert B. Foster, Charles W. Goodyear, and James R. Moffett. The determination of the most highly compensated Executive Officers was made by reference to the salary and bonus of each Executive Officer allocated to FRP for 1995. The services of Executive Officers of FRP are provided to FRP by FTX as provided in the FRP partnership agreement, for which FRP reimburses FTX at its cost, including allocated overhead. All Executive Officers are employees of FTX, are compensated exclusively by FTX, and are eligible to participate in FTX benefit plans and programs. The total costs to FTX for Executive Officers, including costs of such plans and programs, are allocated to FRP, to the extent practicable, in proportion to the time spent by Executive Officers on FRP affairs. Reference is made to the information set forth under Part 1, Items 1 and 2 "Business and Properties - Relationship between the Company and the FTX Group" above and to the information set forth in Note 6 to the FRP Financial Statements. Item 12. Security Ownership of Certain Beneficial Owners and Management. The following table contains certain information concerning the beneficial ownership of FRP units as of December 31, 1995 by each person known by FRP to be the beneficial owner of more than 5% of any class of FRP equity security, determined in accordance with Rule 13d-3 of the Securities and Exchange Commission (the "SEC") and based on information furnished to FRP by each such person. Unless otherwise indicated, the securities shown are held with sole voting and investment power. Number of Partnership Units Percent Name and Address of Beneficial Owner Beneficially of ____________________________________ Owned Class _____ _____ Freeport-McMoRan Inc. 52,284,950(a) 51.0% 1615 Poydras Street New Orleans, Louisiana 70112 Vanguard/Windsor Fund, Inc. 6,085,800(b) 5.9% Post Office Box 2600 Valley Forge, Pennsylvania 19482-2600 __________________________ (a) Consists of 135,034 FRP Depositary Units and 52,149,916 FRP Unit Equivalents. (b) Vanguard/Windsor Fund, Inc. has sole voting power and shared investment power as to all 6,085,800 Partnership Units, consisting solely of FRP Depositary Units. _____________________________ The following table contains information concerning the beneficial ownership of FRP Depositary Units and shares of FTX common stock ("FTX Shares") as of December 31, 1995 by (a) each Executive Officer identified under Item 11, "Executive Compensation," and (b) all Executive Officers as a group, determined in accordance with Rule 13d-3 of the SEC and based upon information furnished to FRP by each such person. Unless otherwise indicated, the securities shown are held with sole voting and investment power. Number of Number of FRP Depositary FTX Shares Name of Beneficial Units Beneficially Owner Beneficially Owned(a)(b) Owned(a) - ----------------------- ---------------- ------------ Richard H. Block 2,184 31,255 Robert B. Foster 41 30,162 Charles W. Goodyear 0 58,504(c) Rene L. Latiolais 707(d) 78,904 James R. Moffett 39,600(e) 306,714(e) All Executive Officers as a group (9 persons) 45,791(f) 626,561(f) _________________________ (a) With the exception of Mr. Moffett, who beneficially owns 1.1% of the outstanding FTX Shares, each of the individuals referred to holds less than 1% of the outstanding FRP Depositary Units and FTX Shares, respectively. (b) Includes FTX Shares held by a trustee for the benefit of such individual under the Employee Capital Accumulation Program of FTX, as follows: Mr. Block, 2,420 FTX Shares; Mr. Foster, 252 FTX Shares; Mr. Goodyear, 605 FTX Shares; Mr. Latiolais, 2,850 FTX Shares; Mr. Moffett, 4,213 FTX Shares; all Executive Officers as a group, 18,726 FTX Shares. Also includes FTX Shares that could be acquired within 60 days after December 31, 1995 upon the exercise of options granted pursuant to the employee stock option plans of FTX, as follows: Mr. Block, 28,835 FTX Shares; Mr. Foster, 29,910 Shares; Mr. Goodyear, 57,889 FTX Shares; Mr. Latiolais, 47,726 FTX Shares; all Executive Officers as a group, 264,977 FTX Shares. (c) Includes 10 FTX Shares held in a retirement trust for the benefit of Mr. Goodyear. (d) Includes 573 FRP Depositary Units held for the benefit of Mr. Latiolais by the custodian under FRP's Depositary Unit Reinvestment Plan. (e) Includes 39,600 FRP Depositary Units and 32,124 FTX Shares held for the benefit of a trust with respect to which Mr. Moffett, as a co-trustee, shares voting and investment power but as to which he disclaims beneficial ownership. (f) See notes (b) through (e) above. Includes 149 FTX Shares held in a retirement trust for the benefit of one of the Executive Officers. The total number of FRP Depositary Units and FTX Shares represent less than 1% of the outstanding FRP Depositary Units and approximately 2.2% of the outstanding FTX Shares, respectively. ____________________________ Item 13. Certain Relationships and Related Transactions. Reference is made to the information set forth in Items 1 and 2, "Business and Properties - Relationship between the Company and the FTX Group" above, to the information set forth in Item 11, "Executive Compensation" above and to the information set forth in Note 6 to the FRP Financial Statements. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a)(1). Financial Statements. Reference is made to the Index to Financial Statements appearing on page F-1 hereof. (a)(2). Financial Statement Schedules. Reference is made to the Index to Financial Statements appearing on page F-1 hereof. (a)(3). Exhibits. Reference is made to the Exhibit Index beginning on page E-1 hereof. (b). Reports on Form 8-K. During the last quarter of the period covered by this report, FRP filed a report on Form 8-K dated November 14, 1995 reporting an event under item 5 thereof. No financial statements were filed. SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 28, 1996. FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP By: FREEPORT-McMoRan Inc., Its Administrative Managing General Partner By: /s/ James R. Moffett ___________________________________________ James R. Moffett Chairman of the Board Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 28, 1996. Signature _________ * President and Chief Executive _____________________________ Officer of Freeport-McMoRan Resource Rene L. Latiolais Partners, Limited Partnership, and Director of Freeport-McMoRan Inc. (Principal Executive Officer) * Senior Vice President and Chief _____________________________ Financial Officer of Freeport- Charles W. Goodyear McMoRan Resource Partners, Limited Partnership (Principal Financial Officer) * Vice President and Controller of _____________________________ Freeport-McMoRan Resources Partners, Nancy D. Bonner Limited Partnership (Principal Accounting Officer) * Director of Freeport-McMoRan Inc. ____________________________ Richard C. Adkerson * Director of Freeport-McMoRan Inc. ____________________________ Robert W. Bruce III * Director of Freeport-McMoRan Inc. ____________________________ Thomas B. Coleman * Director of Freeport-McMoRan Inc. ____________________________ Robert A. Day * Director of Freeport-McMoRan Inc. ____________________________ William B. Harrison, Jr. * Director of Freeport-McMoRan Inc. ____________________________ Henry A. Kissinger * Director of Freeport-McMoRan Inc. ____________________________ Bobby Lee Lackey * Director of Freeport-McMoRan Inc. ____________________________ Gabrielle K. McDonald /s/ James R. Moffett Director and Chairman of the Board ____________________________ of Freeport-McMoRan Inc. James R. Moffett * Director of Freeport-McMoRan Inc. ____________________________ George Putnam * Director of Freeport-McMoran Inc. ____________________________ B. M. Rankin, Jr. * Director of Freeport-McMoRan Inc. ____________________________ J. Taylor Wharton * Director of Freeport-McMoRan Inc. ____________________________ Ward W. Woods, Jr. By: /s/ James R. Moffett _________________________ James R. Moffett Attorney-in-Fact INDEX TO FINANCIAL STATEMENTS The financial statements of FRP, the notes thereto, and the report thereon of Arthur Andersen LLP, appearing on pages 17 through 27, inclusive, of FRP's 1995 Annual Report to unitholders are incorporated by reference. The financial statement schedules listed below should be read in conjunction with such financial statements contained in FRP's 1995 Annual Report to unitholders. Page Report of Independent Public Accountants F-1 III-Condensed Financial Information of Registrant F-2 VIII-Valuation and Qualifying Accounts F-5 Schedules other than those listed above have been omitted since they are either not required, not applicable or the required information is included in the financial statements or notes thereto. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS We have audited, in accordance with generally accepted auditing standards, the financial statements as of December 31, 1995 and 1994 and for each of the three years in the period ended December 31, 1995 included in Freeport-McMoRan Resource Partners, Limited Partnership's annual report to unitholders incorporated by reference in this Form 10-K, and have issued our report thereon dated January 23, 1996. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in the index above are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. Arthur Andersen LLP New Orleans, Louisiana, January 23, 1996 F-1 FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEETS December 31, ------------------------ 1995 1994 ---------- ---------- (In Thousands) ASSETS Current assets Cash and short-term investments $ 6,021 $ 8,409 Accounts receivable: Customers 23,666 9,359 Other 16,680 12,134 Inventories: Products 22,221 25,443 Materials and supplies 9,542 6,150 Prepaid expenses and other 2,545 273 ---------- ---------- Total current assets 80,675 61,768 Property, plant and equipment-net 533,100 506,590 Investment in IMC-Agrico 428,922 397,937 Other assets 40,169 43,256 ---------- ---------- Total assets $1,082,866 $1,009,551 ========== ========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable and accrued liabilities $ 56,539 $ 29,877 Long-term debt, less current portion 371,140 355,000 Reclamation and mine shutdown reserves 76,857 58,762 Accrued postretirement benefits and other liabilities 173,864 118,252 Partners' capital 404,466 447,660 ---------- ---------- Total liabilities and partners' capital $1,082,866 $1,009,551 ========== ========== The footnotes contained in FRP's 1995 Annual Report to unitholders are an integral part of these statements. F-2 FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF OPERATIONS Years Ended December 31, -------------------------------------- 1995 1994 1993 ---------- ---------- ---------- (In Thousands) Revenues $ 202,498 $ 111,185 $ 424,717 Cost of sales: Production and delivery 119,239 61,211 344,944 Depreciation and amortization 42,142 38,825 81,521 ---------- ---------- ---------- Total cost of sales 161,381 100,036 426,465 Exploration expenses - - 3,092 Provision for restructuring charges - - 33,947 Loss on valuation and sale of assets, net - - 114,802 General and administrative expenses 50,492 28,949 58,660 ---------- ---------- ---------- Total costs and expenses 211,873 128,985 636,966 ---------- ---------- ---------- Operating loss (9,375) (17,800) (212,249) Interest expense, net (30,138) (32,297) (12,293) Equity in earnings of IMC-Agrico 201,704 136,671 1,037 Other income (expense), net (783) (2,608) 1,094 ---------- ---------- ---------- Income (loss) before changes in accounting principle 161,408 83,966 (222,411) Cumulative effect of changes in accounting principle - - (23,700) ---------- ---------- ---------- Net income (loss) $ 161,408 $ 83,966 $ (246,111) ========== ========== ========== The footnotes contained in FRP's 1995 Annual Report to unitholders are an integral part of these statements. F-3 FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF CASH FLOW Years Ended December 31, -------------------------------------- 1995 1994 1993 ---------- ---------- ---------- (In Thousands) Cash flow from operating activities: Net income (loss) $ 161,408 $ 83,966 $ (246,111) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Cumulative effect of changes in accounting principle - - 23,700 Depreciation and amortization 42,142 38,825 81,521 Other noncash charges to income 6,495 7,150 Provision for restructuring charges, net of payments - - 3,143 Loss on valuation and sale of assets, net - - 114,802 Equity in earnings of IMC-Agrico (201,704) (136,671) (1,037) Cash distributions received from IMC-Agrico 219,515 233,617 - (Increase) decrease in working capital, net of effect of acquisitions and dispositions: Accounts receivable (16,875) (2,311) (1,552) Inventories 5,353 7,058 (4,750) Prepaid expenses and other (2,272) - 1,933 Accounts payable and accrued liabilities 29,590 (389) 1,561 Reclamation and mine shutdown expenditures (2,065) (5,270) (9,980) Other 8,478 5,056 2,935 ---------- ---------- ---------- Net cash provided by (used in) operating activities 243,570 230,376 (26,685) ---------- ---------- ---------- Cash flow from investing activities: Capital expenditures (13,331) (11,231) (47,579) Investment in IMC-Agrico (46,200) - - Sale of assets 375 36,919 49,961 Other 1,531 530 4,711 ---------- ---------- ---------- Net cash provided by (used in) investing activities (57,625) 26,218 7,093 ---------- ---------- ---------- Cash flow from financing activities: Distributions to partners (202,541) (127,368) (121,180) Proceeds from debt 623,259 50,400 468,137 Repayment of debt (606,990) (321,300) (329,164) Purchase of partnership units (2,061) (1,342) - Proceeds from sale of 8 3/4% Senior Subordinated Notes - 146,125 - ---------- ---------- ---------- Net cash provided by (used in) financing activities (188,333) (253,485) 17,793 ---------- ---------- ---------- Net increase (decrease) in cash and short-term investments (2,388) 3,109 (1,799) Cash and short-term investments at beginning of year 8,409 5,300 7,099 ---------- ---------- ---------- Cash and short-term investments at end of year $ 6,021 $ 8,409 $ 5,300 ========== ========== ========== Interest paid $ 27,818 $ 25,094 $ 22,997 ========== ========== ========== The footnotes contained in FRP's 1995 Annual Report to unitholders are an integral part of these statements. F-4 FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS for the years ended December 31, 1995, 1994 and 1993 Col. A Col. B Col. C Col. D Col. E - ------------- ---------- ----------------------- ---------- ----------- Additions ------------------------ Balance at Charged to Charged to Balance at Beginning Costs and Other Other-Add End of Description of Period Expenses Accounts (Deduct) Period - ------------- ---------- ---------- ---------- ---------- ---------- (In Thousands) Reserves and allowances deducted from asset accounts: Reclamation and mine shutdown reserves: 1995: Sulphur $ 55,105 $ 2,643 $ - $ 14,206a $ 71,954 Fertilizer 37,683 2,785 - (4,537) 35,931 Oil 3,657 1,257 - (11) 4,903 ---------- ---------- ---------- ---------- ---------- $ 96,445 $ 6,685 $ $ 9,658b $ 112,788 ========== ========== ========== ========== ========== 1994: Sulphur $ 57,287 $ 1,041 $ - $ (3,223) $ 55,105 Fertilizer 38,437 2,310 - (3,064) 37,683 Oil 1,609 2,385 - (337) 3,657 ---------- ---------- ---------- ---------- ---------- $ 97,333 $ 5,736 $ - $ (6,624)b$ 96,445 ========== ========== ========== ========== ========== 1993: Sulphur $ 35,200 $ 27,562 $ - $ (5,475) $ 57,287 Fertilizer 18,543 5,365 - 14,529c 38,437 Oil 1,409 1,021 - (821) 1,609 ---------- ---------- ---------- ---------- ---------- $ 55,152 $ 33,948 $ - $ 8,233b $ 97,333 ========== ========== ========== ========== ========== a. Includes $23.5 million of liabilities assumed in connection with the acquisition of the sulphur assets of Pennzoil Co. (see Note 4 to the Financial Statements). b. Includes expenditures of $10.5 million in 1995, $11.2 million in 1994 and $13.2 million in 1993. c. Includes $19.7 million which represents FRP's proportionate share of IMC-Agrico liabilities (see Note 2 to the Financial Statements) in excess of the FRP contributed amounts. F-5 Freeport-McMoRan Resource Partners, Limited Partnership Exhibit Index Exhibit Sequentially Number Numbered _______ Page ____________ 3.1 Amended and Restated Agreement of Limited Partnership of FRP dated as of May 29, 1987 (the "FRP Partnership Agreement") among FTX, Freeport Phosphate Rock Company and Geysers Geothermal Company, as general partners, and Freeport Minerals Company ("FMC"), as general partner and attorney-in-fact for the limited partners, of FRP. Incorporated by reference to Exhibit B to the Prospectus dated May 29, 1987 included in FRP's Registration Statement on Form S-1, as amended, as initially filed with the Commission on May 29, 1987 (Registration No. 33-13513). 3.2 Amendment to the FRP Partnership Agreement dated as of December 16, 1988 effected by FMC, as Administrative Managing General Partner, and FTX, as General Partner of FRP. Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K of FRP for the fiscal year ended December 31, 1994. 3.3 Amendment to the FRP Partnership Agreement dated as of March 29, 1990 effected by FMC, as Administrative Managing General Partner, and FTX, as Managing General Partner, of FRP. Incorporated by reference to Exhibit 19.2 to the Quarterly Report on Form 10-Q of FRP for the quarter ended March 31, 1990 (the "FRP 1990 First Quarter Form 10-Q"). 3.4 Amendment to the FRP Partnership Agreement dated as of April 6, 1990 effected by FTX, as Administrative Managing General Partner of FRP. Incorporated by reference to Exhibit 19.3 to the FRP 1990 First Quarter Form 10-Q. 3.5 Amendment to the FRP Partnership Agreement dated as of January 27, 1992 between FTX, as Administrative Managing General Partner, and FMRP, as Managing General Partner, of FRP. Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-K of FRP for the fiscal year ended December 31, 1991 (the "FRP 1991 Form 10-K"). 3.6 Amendment to the FRP Partnership Agreement dated as of October 14, 1992 between FTX, as Administrative Managing General partner, and FMRP, as Managing General Partner, of FRP. Incorporated by reference to Exhibit 3.4 to the Annual Report on Form 10-K of FRP for the fiscal year ended December 31, 1992 (the "FRP 1992 Form 10-K"). 3.7 Amended and Restated Certificate of Limited Partnership of FRP dated June 12, 1986 (the "FRP Partnership Certificate"). Incorporated by reference to Exhibit 3.3 to FRP's Registration Statement on Form S-1, as amended, as initially filed with the Commission on June 20, 1986 (Registration No. 33-5561). 3.8 Certificate of Amendment to the FRP Partnership Certificate dated as of January 12, 1989. Incorporated by reference to Exhibit 3.6 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (the "FRP 1993 Form 10-K"). 3.9 Certificate of Amendment to the FRP Partnership Certificate dated as of December 29, 1989. Incorporated by reference to Exhibit 19.1 to the FRP 1990 First Quarter Form 10-Q. 3.10 Certificate of Amendment to the FRP Partnership Certificate dated as of April 12, 1990. Incorporated by reference to Exhibit 19.4 to the FRP 1990 First Quarter Form 10-Q. 4.1 Deposit Agreement dated as of June 27, 1986 (the "Deposit Agreement") among FRP, The Chase Manhattan Bank, N.A. ("Chase") and Freeport Minerals Company ("Freeport Minerals"), as attorney-in-fact of those limited partners and assignees holding depositary receipts for units of limited partnership interest in FRP ("Depositary Receipts"). Incorporated by reference to Exhibit 28.4 to the Current Report on Form 8-K of FTX dated July 11, 1986. 4.2 Resignation dated December 26, 1991 of Chase as Depositary under the Deposit Agreement and appointment dated December 27, 1991 of Mellon Bank, N.A. ("Mellon") as successor Depositary, effective January 1, 1992. Incorporated by reference to Exhibit 4.5 to the FRP 1991 Form 10-K. 4.3 Service Agreement dated as of January 1, 1992 between FRP and Mellon pursuant to which Mellon serves as Depositary under the Deposit Agreement and Custodian under the Custodial Agreement. Incorporated by reference to Exhibit 4.6 to the FRP 1991 Form 10-K. 4.4 Amendment to the Deposit Agreement dated as of November 18, 1992 between FRP and Mellon. Incorporated by reference to Exhibit 4.4 to the FRP 1992 Form 10-K. 4.5 Form of Depositary Receipt. Incorporated by reference to Exhibit 4.5 to the FRP 1992 Form 10-K. 4.6 Custodial Agreement regarding the FRP Depositary unit Reinvestment Plan among FTX, FRP and Chase, effective as of April 1, 1987 (the "Custodial Agreement"). Incorporated by reference to Exhibit 19.1 to the Quarterly Report on Form 10-Q of FRP for the quarter ended June 30, 1987. 4.7 FRP Depositary Unit Reinvestment Plan. Incorporated by reference to Exhibit 4.4 to the FRP 1991 Form 10-K. 4.8 Credit Agreement dated as of June 30, 1995 (the "FTX/FRP Credit Agreement") among FTX, FRP, the various financial institutions which are parties thereto (the "Banks"), Chemical Bank, as Administrative Agent and Chase, as Documentary Agent (collectively, the "Agents"). Incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of FRP for the quarter ended September 30, 1995. 4.9 First Amendment dated as of January 10, 1996 to the FTX/FRP Credit Agreement among FTX, FRP, the FTX/FRP Banks and the Agents. Incorporated by reference to Exhibit 10.2 to the Current Report on 8-K of FRP dated February 13, 1996. 4.10 Subordinated Indenture as of October 26, 1990 (the "Subordinated Indenture") between FRP and Manufacturers Hanover Trust Company ("MHTC") as Trustee. Incorporated by reference to Exhibit 4.11 to the FRP 1993 Form 10-K. 4.11 First Supplemental Indenture dated as of February 15, 1994 between FRP and Chemical Bank, as Successor to MHTC, as Trustee, to the Subordinated Indenture providing for the issuance of $150,000,000 of aggregate principal amount of 8 3/4% Senior Subordinated Notes due 2004. Incorporated by reference to Exhibit 4.12 to the FRP 1993 Form 10-K. 4.12 Form of Senior Indenture (the "Senior Indenture") from FRP to Chemical Bank, as Trustee. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of FRP dated February 13, 1996. 4.13 Form of Supplemental Indenture dated February 14, 1996 from FRP to Chemical Bank, as Trustee, to the Senior Indenture providing for the issuance of $150,000,000 aggregate principal amount of 7% Senior Notes due 2008. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K dated February 16, 1996 of FRP. 10.1 Contribution Agreement dated as of April 5, 1993 between FRP and IGL (the "FRP-IGL Contribution Agreement"). Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of FRP dated July 15, 1993 (the "FRP July 15, 1993 Form 8-K"). 10.2 First Amendment dated as of July 1, 1993 to the FRP- IGL Contribution Agreement. Incorporated by reference to Exhibit 2.2 to the FRP July 15, 1993 Form 8-K. 10.3 Amended and Restated Partnership Agreement dated as of May 26, 1995 among IMC-Agrico GP Company, Agrico, Limited Partnership and IMC-Agrico MP Inc. 10.4 Amendment and Agreement dated as of January 23, 1996 to the Amended and Restated Partnership Agreement dated May 26, 1995 by and among IMC-Agrico MP, Inc., IMC Global Operations, Inc. and IMC-Agrico Company. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated February 13, 1996 of FRP. 10.5 Amended and Restated Parent Agreement dated as of May 26, 1995 among IMC Global Operations, Inc., FRP, FTX and IMC-Agrico. 10.6 Asset Purchase Agreement dated as of October 22, 1994 between FRP and Pennzoil Company (the "Asset Purchase Agreement"). Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of FRP dated January 18, 1995 (the "FRP January 18, 1995 8-K"). 10.7 Amendment No. 1 dated as of January 3, 1995 to the Asset Purchase Agreement. Incorporated by reference to Exhibit 2.2 to the FRP January 18, 1995 8-K. 12.1 FRP Computation of Ratio of Earnings to Fixed Charges. 13.1 Those portions of the 1996 Annual Report to unitholders of FRP which are incorporated herein by reference. 21.1 Subsidiaries of FRP. 23.1 Consent of Arthur Andersen LLP dated March 27, 1996. 23.2 Consent of Ernst & Young LLP dated March 27, 1996. 24.1 Powers of Attorney pursuant to which this report has been signed on behalf of certain directors of FTX. 27.1 FRP Financial Data Schedule. 99.1 Report of Ernst & Young LLP EX-10 2 EXHIBIT 10.3 EXECUTION COPY AMENDED AND RESTATED PARTNERSHIP AGREEMENT among IMC-Agrico GP Company Agrico, Limited Partnership and IMC-Agrico MP, Inc. Dated as of July 1, 1993 (as further amended and restated as of May 26, 1995) TABLE OF CONTENTS Page ARTICLE I. Definitions 7 ARTICLE II. Partnership, Name, Purposes, Powers, Authority to Bind Partnership, Partnership Property, Other and/or Competing Businesses, Principal Place of Business; Registered Office and Agent 8 2.01 Partnership 8 2.02 Name 9 2.03 Purposes 10 2.04 Powers of the Partnership 13 2.05 Partner's Authority 13 2.06 Managing Partner; Operating Partner; Change in Operating Partner; Authority to Bind Partnership 14 2.07 Partnership Property 16 2.08 Other and/or Competing Businesses 16 2.09 Principal Place of Business; Registered Office and Agent 24 ARTICLE III. Contributions to the Partnership 24 3.01 Initial Contributions 24 3.02 Additional Contributions 25 3.03 Failure to Contribute 26 3.04 Assumption of Liabilities Under Contribution Agreement 29 3.05 Subsequent Capital Contribution 29 ARTICLE IV. Interests of Partners 30 4.01 Interests of Partners 30 4.02 Capital Accounts 31 4.03 Interest on Capital Accounts 33 4.04 Loans from Partners 34 4.05 Transferred Capital Accounts 34 TABLE OF CONTENTS (continued) Page ARTICLE V. Profit and Loss Sharing; Allocations for Federal, State and Local Income Tax Purposes; Cash Distributions; Suspended Distributions; Reimbursement for Transaction Costs 35 5.01 Allocation of Profits and Losses 35 5.02 Special Allocations 35 5.03 Tax Allocations 37 5.04 Interim Closing of the Books on Transfer 39 5.05 Disagreement Between Partners 39 5.06 Obligations with Respect to Distributable Cash 40 5.07 Distribution of Distributable Cash; Suspended Distributions 40 5.08 Payment of Transaction Costs 44 ARTICLE VI. Management 45 6.01 Operation 45 6.02 General Powers of the Managing Partner 46 6.03 Limitations on the Partners; Relations Among Partners 48 6.04 Policy Committee 49 6.05 Rules of Procedure 56 6.06 Further Management Limitations 56 6.07 Major Decisions 56 6.08 Management of Certain Environmental Liabilities 64 ARTICLE VII. Encumbrance or Transfer of Partnership Interest 65 7.01 Transfer of Partnership Interest Generally 65 7.02 Transfers of Partnership Interests 66 7.03 Liens 70 7.04 Transfers Upon Triggering Events 71 7.05 Interests in Managing Partner 75 7.06 Certain Conditions of Certain Transfers 75 ARTICLE VIII. Other Rights of, Duties and Restrictions on the Partners 76 8.01 Indemnification 76 8.02 Contribution 77 TABLE OF CONTENTS (continued) Page 8.03 Continuing Liability of Withdrawn Partner 78 8.04 Breach of Parent Agreement 79 ARTICLE IX. Certain Operational Provisions 79 9.01 Financial, Accounting, and Banking Matters 79 9.02 Budget and Approval Authorities 80 9.03 Insurance 82 9.04 Financial and Other Information 83 9.05 Qualifying Income 87 9.06 Work Force; Employee Benefits 89 9.07 Emergency Expenditures; Compliance with Law 93 9.08 No Action Contrary to Contracts or Applicable Law 94 9.09 Licenses and Permits 96 9.10 Litigation 97 9.11 Payment and Reimbursement of Expenses; Handling of Partnership Bank Accounts and Funds 97 9.12 Transactions with Affiliates 101 9.13 No Shifting of Cash Flow 103 ARTICLE X. Accounting Records; Tax Matters 104 10.01 Books and Records 104 10.02 Inspection of Books and Records 105 10.03 Accounting and Taxable Year 106 10.04 Partnership Tax Returns 107 10.05 Partnership Taxes 107 10.06 Tax Matters Partner 108 10.07 Duties of the Tax Matters Partner 108 10.08 Partnership Status; Elections 109 10.09 Tax Reporting 110 10.10 Tax Oversight 112 ARTICLE XI. Term 114 11.01 Term 114 11.02 Purchase Option Upon Scheduled Expiration of the Term 114 TABLE OF CONTENTS (continued) Page ARTICLE XII. Dissolution and Winding-Up 116 12.01 Dissolution 116 12.02 Winding-Up 120 12.03 Accounting on Dissolution 120 12.04 Accounting; Allocations of Residual Net Profits and Residual Net Loss After Dissolutions 121 12.05 Application of Article V in Year of Dissolution 121 12.06 Conversion of Assets to Cash 122 12.07 Distributions in Liquidation 123 12.08 Compliance with Treasury Regulations 124 12.09 Deficit Capital Account Restoration Obligation 125 12.10 Section 708 Termination 125 12.11 Continuation of the Partnership 126 12.12 Waiver of Certain Rights 127 ARTICLE XIII. Miscellaneous Provisions 127 13.01 Force Majeure 127 13.02 Limitation of Liability of Partners 129 13.03 Assignment 130 13.04 Notices 131 13.05 Governing Law 133 13.06 Choice of Forum 133 13.07 Consent to Jurisdiction 133 13.08 Waiver of Jury Trial 135 13.09 Entire Agreement 135 13.10 Execution in Counterparts 136 13.11 Remedies and Waiver 136 13.12 Headings 137 13.13 Third Party Beneficiaries 137 13.14 Further Assurances 137 13.15 Power of Attorney 137 13.16 Public Announcements 138 AMENDED AND RESTATED PARTNERSHIP AGREEMENT THIS AMENDED AND RESTATED PARTNERSHIP AGREEMENT (this "Agreement") was made as of 12:01 a.m. (CDT) on the 1st day of July, 1993 and further amended and restated as of the 26th day of May, 1995 by and among (i) IMC-Agrico GP Company ("IMC GPCo"), a Delaware corporation and a subsidiary of IMC GLOBAL OPERATIONS INC. (formerly IMC Fertilizer, Inc.), a Delaware corporation ("Operations"), (ii) Agrico, Limited Partnership (the "FRP Partner"), a Delaware limited partnership of which FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP, a Delaware limited partnership ("FRP"), owns a 99.8% limited partnership interest and Agrico, Inc., a Delaware corporation ("FRP GPCo"), owns a 0.2% general partnership interest, (iii) IMC-Agrico MP, Inc. (the "Managing Partner"), a Delaware corporation, and (iv) Operations. RECITALS: WHEREAS, IMC GPCo, the FRP Partner and the Managing Partnerentered into and formed a general partnership under the Act to engage in the Phosphate Chemicals Business pursuant to a Partnership Agreement dated as of June 29, 1993 (the "Original Agreement"); and WHEREAS, IMC GPCo, the FRP Partner and the Managing Partneramended and restated the Original Agreement as of July 1, 1993; WHEREAS, the parties hereto have approved and consented to (i) (a) the voluntary complete liquidation and dissolution of IMC GPCo, in accordance with the General Corporation Law of the State of Delaware ("Delaware Law"), (b) the admission of Operations as a Partner in the Partnership in accordance with the terms of this Agreement, (c) the assumption by Operations (A) as of the date hereof, of 80% of all obligations of IMC GPCo incurred by IMC GPCo (x) as a general partner of the Partnership and (y) pursuant to the terms of the Partnership Agreement, and (B) upon the completion of such liquidation and dissolution of IMC GPCo, of all remaining obligations of IMC GPCo, (d) the transfer to Operations of the assets, properties, rights and interests of IMC GPCo and (e) the repurchase by IMC GPCo of the preferred stock of IMC GPCo owned by the Managing Partner at its liquidation value, in each case in accordance with the Agreement and Plan of Complete Liquidation and Dissolution dated as of May 26, 1995 (the "IMC GPCo Plan of Liquidation") and (ii) (a) the liquidation of FRP GPCo or the merger of FRP GPCo with and into Freeport Chemical Company, a Delaware corporation ("FCC"), and the liquidation of FCC or the merger of FCC with and into Freeport-McMoRan Inc., a Delaware corporation ("FTX"), in each case in accordance with the FRP GPCo/FCC/FTX Merger Documents (the "FRP GPCo/FCC/FTX Mergers"), with the result that FTX shall become the owner of the 0.2% general partnership interest in the FRP Partner owned by FRP GPCo immediately prior to the FRP GPCo/FCC/FTX Mergers and shall have assumed as of the date of the completion of such mergers all obligations of FRP GPCo and FCC, (b) the repurchase by FRP GPCo of the preferred stock of FRP GPCo owned by the Managing Partner at its liquidation value and (c) at the option of FTX and FRP, the merger, liquidation or dissolution of the FRP Partner under Delaware Law in the future (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) and the admission of FRP or an Affiliate of FRP as a Partner in the Partnership, in each case in accordance with this Agreement, the Amended and Restated Parent Agreement dated as of May 26, 1995 among Operations, FRP, FTX and IMC-Agrico Company, a Delaware general partnership (the "Parent Agreement"), and the Amendment, Waiver and Consent Agreement dated as of May 26, 1995 among IMC Global Inc., a Delaware corporation ("Global"), Operations, IMC GPCo, the Managing Partner, IMC-Agrico Company, FTX, FRP and the FRP Partner (the "Amendment, Waiver and Consent Agreement"); WHEREAS, the above described transactions are to be accomplishedin the following manner: (i) with respect to the liquidation and dissolution of IMC GPCo, 80% of the interests of IMC GPCo shall be transferred to Operations effective as of May 26, 1995 (except that 100% of IMC GPCo's 50% common stock interest in the Managing Partner shall be transferred to Operations as of May 26, 1995 and the preferred stock of IMC GPCo owned by the Managing Partner shall be repurchased by IMC GPCo at its liquidation value as of May 26, 1995 (the "Initial IMC GPCo Liquidating Distribution"), with the remaining 20% of such interests (other than IMC GPCo's common stock interest in the Managing Partner) to be transferred to Operations (the "Final IMC GPCo Liquidating Distribution") in accordance with the following time schedule and the terms of the IMC GPCo Plan of Liquidation: (A) if (x) FTX and FRP elect by written notice to the Partners and the Partnership, after November 30, 1995 and on or prior to June 4, 1996, to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) as contemplated by the Amendment, Waiver and Consent Agreement and (y) such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) is completed not earlier than June 5, 1996 and not later than June 15, 1996, the Final IMC GPCo Liquidating Distribution shall be undertaken promptly after June 22, 1997; (B) if (x) FTX and FRP elect by written notice to the Partners and the Partnership, after November 30, 1995 and on or prior to June 4, 1996, to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) as contemplated by the Amendment, Waiver and Consent Agreement, but (y) such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) is not completed by June 15, 1996, the Final IMC GPCo Liquidating Distribution shall be undertaken after June 15, 1996 and shall be completed no later than June 30, 1996; and (C) if FTX and FRP do not elect, after November 30, 1995 and on or prior to June 4, 1996, to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) as contemplated by the Amendment, Waiver and Consent Agreement, the Final IMC GPCo Liquidating Distribution shall be undertaken after June 4, 1996 and shall be completed by June 30, 1996; and (ii) with respect to the optional merger, liquidation or dissolution of the FRP Partner (or the transfer of its Partnership Interests), such option may be exercised in accordance with the terms of this Agreement and the Amendment Waiver and Consent Agreement at any time after November 30, 1995 and on or prior to June 4, 1996; provided that if FTX and FRP exercise such option on or prior to June 4, 1996, their right to cause such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) at that time will be forfeited unless such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) is completed not earlier than June 5, 1996 and not later than June 15, 1996; provided, further, that if after November 30, 1995 and on or prior to June 4, 1996 FTX and FRP exercise such option, but such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) is not completed on or prior to June 15, 1996, FTX and FRP will have an additional option to cause such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) at any time after July 15, 1997; and provided, further, that if after November 30, 1995 and on or prior to June 4, 1996, FTX and FRP do not exercise their option to cause such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests), FTX and FRP will have the right to exercise such option at any time after July 15, 1997; provided, however that, notwithstanding the provisions of this paragraph (ii), FTX and FRP may merge, liquidate or dissolve the FRP Partner (or transfer its Partnership Interests to FRP or an Affiliate of FRP) in accordance with the terms of the Amendment, Waiver and Consent Agreement at any time so long as FTX and FRP bear, and assume liability for, any expense, cost or loss (including any increase in taxes, other than any increase in income taxes which arises solely from the timing of the reporting of income, deductions and credits attributable to the normal business activities of the Partnership) suffered by the Partnership, any other Partner or any of their Related Persons (as defined below) resulting therefrom; WHEREAS, the IMC GPCo Liquidation, the FRP GPCo/FCC/FTX Mergers and such optional merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) make it necessary and desirable to amend and restate certain provisions of the Partnership Agreement as originally entered into, and as previously amended and restated, by the parties in order to, among other things, admit Operations as a new Partner; and WHEREAS, the Partners (as hereinafter defined) believe that through the combination of the Contributed Businesses of IMC and FRP as contemplated by the Contribution Agreement and the management of the business and affairs of the Partnership in accordance with the terms hereof, they can create certain synergies. NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements herein set forth and of other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows: ARTICLE I. Definitions Capitalized terms used in this Agreement which are not otherwise defined herein shall have the meanings given to such terms in Exhibit A hereto. During the period subsequent to the Initial IMC GPCo Liquidating Distribution and prior to the Final IMC GPCo Liquidating Distribution (the "IMC GPCo Liquidation Period"), the term "IMC Partner" (and correlative terms, such as "Non-Managing Partner", relating to the "IMC Partner") as used herein, shall refer to IMC GPCo and Operations, collectively and, unless otherwise provided herein, actions to be taken by the IMC Partner during the IMC GPCo Liquidation Period shall be taken by Operations and IMC GPCo acting jointly; subsequent to the Final IMC GPCo Liquidating Distribution, the term "IMC Partner" (and such correlative terms) as used herein shall refer to Operations, and Operations shall take any such actions acting alone; and at all such times, the term "IMC Partner" (and such correlative terms) as used herein shall refer to any other Affiliate of Operations which succeeds to the Partnership Interests of IMC GPCo or Operations by means of the purchase, transfer, assignment or other conveyance or succession of such Partnership Interests in accordance with the terms of this Agreement. The IMC Partner, as so defined, the FRP Partner and the Managing Partner are sometimes hereinafter referred to individually as a "Partner" and collectively as the "Partners." ARTICLE II. Partnership, Name, Purposes, Powers, Authority to Bind Partnership, Partnership Property, Other and/or Competing Businesses. 2.01 Partnership. The Partners have hereby formed a general partnership under the Act on the terms and for the purposes set forth in this Agreement and, pursuant to this Amended and Restated Partnership Agreement, as further amended and restated as of May 26, 1995, IMC GPCo, the FRP Partner and the Managing Partner, as Partners, hereby agree: (i) in accordance with the terms of Section 13.09 herein, to admit Operations as a Partner of the Partnership, upon the completion of the Initial IMC GPCo Liquidating Distribution; (ii) upon the completion of the Final IMC GPCo Liquidating Distribution, to the withdrawal of IMC GPCo as a Partner in the Partnership, without, in accordance with Section 12.11 herein, such withdrawal constituting a Dissolution Event, unless such dissolution is required by applicable law; (iii) if FTX and FRP choose to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) and in accordance with the terms of the Amendment, Waiver and Consent Agreement, upon the completion of such merger, liquidation or dissolution (or such transfer of the Partnership Interests), to admit FRP or an Affiliate of FRP as a Partner of the Partnership in accordance with the terms of Section 13.09 herein and to the withdrawal of the FRP Partner as a Partner in the Partnership, without, in accordance with Section 12.11 herein, such withdrawal constituting a Dissolution Event, unless such dissolution is required by applicable law. 2.02 Name. The Partnership is to be known as "IMC-Agrico Company" or such other name as the Partners shall unanimously select. The Partners shall execute and file and/or publish all assumed name statements and certificates required by law to be filed and/or published in connection with the operation of the Partnership. 2.03 Purposes. The purposes of the Partnership shall be to engage for profit in the Phosphate Chemicals Business and to engage for profit in any and all other activities reasonably related to or incidental to the Phosphate Chemicals Business, and, subject to Section 9.05, to engage for profit in any other business, whether or not related or incidental thereto, as determined by the Policy Committee from time to time. Without limiting the generality of the foregoing, the Partnership may, among other things: (a) acquire, develop, construct, own, manage and operate phosphate rock mining operations and production facilities, phosphate chemical facilities, ammonia and urea fertilizer facilities and uranium oxide facilities; (b) acquire, by purchase, lease, sublease, license, royalty agreement or otherwise, land and phosphate mineral rights to the extent related to the Phosphate Chemicals Business; (c) develop mines and conduct mining operations in and on phosphate rock reserves and deposits, and construct, own, manage and operate phosphate rock, chemical, ammonia, urea and uranium extraction plants related thereto; (d) acquire by purchase, lease, sublease, license or otherwise, such machinery, equipment, vehicles and other facilities as may be necessary or advisable to own, manage, operate or otherwise engage for profit in the Phosphate Chemicals Business or any other business of the Partnership at the time permitted hereunder; (e) subject to Section 9.12, enter into such construction, engineering, operating, management, mining, marketing, selling, supply or distributorship agreements, arrangements or understandings with third parties as may be necessary or advisable to own, manage, operate or otherwise engage for profit in the Phosphate Chemicals Business or any other business of the Partnership at the time permitted hereunder (and such agreements, arrangements or understandings may be (i) with Affiliates of any Partner so long as they comply with the terms of Section 9.12 and (ii) with or through trade associations, including, without limitation, the Phosphate Chemicals Export Association, a Webb- Pomerene Act organization ("PhosChem"), and the Phosphate Rock Export Association, a Webb-Pomerene Act organization ("PhosRock")); (f) own, lease, rent and/or operate and/or make use of railcars, railway lines and dock loading facilities and vessels and otherwise arrange for the transportation of the Partnership's inventory, supplies, materials, equipment, phosphate rock, phosphate chemicals, uranium oxide, ammonia, urea and uranium products and any other products produced from, or used in, the operation of the Phosphate Chemicals Business by such means as may be necessary or advisable; (g) sell (in domestic or foreign markets) such phosphate rock, phosphate chemicals, uranium oxide, ammonia, urea and uranium products and related products and engage in marketing activities incidental thereto (either directly or through third parties, including, without limitation, trade associations, such as PhosChem and PhosRock); (h) form, organize, join and participate in trade associations related to the Phosphate Chemicals Business, including, without limitation, PhosChem and PhosRock; (i) manage and operate agricultural, farming and livestock businesses as an incidental activity relating to holding lands originally acquired or leased by the Partnership or one of the Partners' Affiliates as phosphate rock reserves; (j) subject to Section 9.12, perform all other activities, including the borrowing of money and the mortgaging of real or personal property of the Partnership in connection therewith, as are necessary or incidental to the business or operations of the Partnership; and (k) subject to Sections 9.05 and 9.12, engage in such other businesses and activities, whether or not related to or incidental to the Phosphate Chemicals Business, as determined by the Policy Committee from time to time. 2.04 Powers of the Partnership. Subject to the restrictions set forth in this Agreement, the Partnership shall have the power to exercise all the powers and privileges granted by this Agreement and by law, together with any powers incidental thereto, so far as such powers and privileges are necessary or appropriate for the conduct, promotion or attainment of the purposes of the Partnership. Except as otherwise expressly provided in this Agreement, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. 2.05 Partner's Authority. Except as otherwise provided in this Agreement, no Partner shall have any authority to act for, or to assume any obligations or responsibilities on behalf of, any other Partner or the Partnership. 2.06 Managing Partner; Operating Partner; Change in Operating Partner; Authority to Bind Partnership. (a) IMC-Agrico MP, Inc. is hereby designated as the managing partner of the Partnership (the "Managing Partner"). The Managing Partner shall, subject to the provisions of this Agreement, have exclusive authority and responsibility to manage the business and affairs of the Partnership and to make all decisions regarding the business and affairs of the Partnership. The Managing Partner is a special purpose corporation formed solely for the purpose of acting as Managing Partner of the Partnership. Accordingly, the Managing Partner shall not, without the consent of both the IMC Partner and the FRP Partner, engage in any business other than acting as the Managing Partner hereunder. (b) As used herein, the term "Operating Partner" shall mean the Non-Managing Partner, initially the IMC Partner (which, for purposes of identifying the Operating Partner, shall mean Operations), which is entitled to elect a majority of the directors of the Managing Partner at any given time and "Non-Operating Partner" shall mean the other Non-Managing Partner at that time. If a Material Breach Event shall have occurred and not been cured prior to the delivery of the notice of exercise described below, then (if none of the Non-Operating Partner or any of its direct or indirect parent entities is Bankrupt) the Non- Operating Partner shall have the right, upon written notice of the exercise of such right, to become the Operating Partner and, if such written notice is delivered exercising that right, the Operating Partner shall become the Non-Operating Partner. In the event of a Material Breach Event arising out of a Bankruptcy of the Operating Partner or any of its direct or indirect parent entities, prior to exercising its right to become the Operating Partner, the Non-Operating Partner will reasonably evaluate the circumstances surrounding such Bankruptcy, giving consideration to the effect of the Bankruptcy on the Partnership and on the Managing Partner and its ability to perform its obligations as Managing Partner, but will have the right in its sole discretion to elect to become the Operating Partner in accordance with the terms of this Section 2.06(b). The terms of this Section 2.06(b) shall similarly apply to any subsequent Material Breach Event or Events. (c) As between the Partnership and any other Person (other than a Partner or its Affiliates), any action taken by the Managing Partner on behalf of the Partnership shall constitute the act of and serve to bind the Partnership. In dealing with the Managing Partner acting on behalf of the Partnership, no Person (other than the Non-Managing Partners and their respective Affiliates) shall be required to inquire into the authority of the Managing Partner to bind the Partnership. Without in any way limiting the rights of the Partners hereunder as between each other, Persons dealing with the Managing Partner are entitled to rely conclusively upon the power and authority of the Managing Partner as set forth in this Section 2.06. 2.07 Partnership Property. All real and personal property, whether tangible or intangible (including, without limitation, all permits and licenses), owned by or granted to or held by the Partnership shall be deemed to be owned by or granted to or held by the Partnership as an entity, and no Partner, individually, shall have any ownership or right to use any such property. 2.08 Other and/or Competing Businesses. (a) Except as otherwise provided herein, nothing contained in this Agreement shall be deemed to restrict in any way the freedom of any Partner or of any Affiliate of any Partner to conduct, independently of the Partnership, any business or activity whatsoever without any accountability to the Partnership or to the other Partners. (b) Except as set forth in this Section 2.08(b) and in Section 2.0 of the Parent Agreement, each Partner agrees that neither it nor any of its Affiliates will, directly or indirectly, anywhere in the world, own, manage, operate, control or invest in any business that is engaged in the Phosphate Chemicals Business without first complying with the provisions of this Section 2.08(b), it being understood that (i) purchases and resales of phosphate chemicals in Canada by Affiliates of the IMC Partner in volumes not materially greater than the amounts indicated on Schedule 9.12 hereof and (ii) the conduct of the business of the Rainbow Division of Operations substantially as currently conducted, shall not constitute a breach or violation of this Section 2.08. Notwithstanding the foregoing, any Person that acquires or succeeds to (or whose Affiliate acquires or succeeds to) the Partnership Interest (or any portion thereof) of any Partner shall not be subject to the provisions of this Section 2.08(b) with respect to any business conducted by such Person or its Affiliates that is conducted thereafter substantially as conducted on the date of such acquisition or succession. If any Affiliate of either Non-Managing Partner desires to accept an opportunity to own, manage, operate, control or invest in any business that is engaged, in whole or in part, in the Phosphate Chemicals Business, the Non-Managing Partner affiliated with such Person (the "Presenting Partner") will first offer such opportunity to the Partnership, it being understood that two (2) Policy Committee Representatives or Alternates (or any combination thereof) of the Non-Managing Partner other than the Presenting Partner (the "Exercising Partner") may elect, on behalf of the Partnership, to pursue such opportunity within thirty (30) days following the presentation of such opportunity to the Partnership. The Representatives or Alternates (or any combination thereof) of the Exercising Partner shall notify the Presenting Partner in writing of such election, on behalf of the Partnership, to pursue or not to pursue such opportunity before the expiration of such thirty (30) day period. If the Exercising Partner fails to give the Presenting Partner notice of such election within such thirty (30) day period, the Exercising Partner shall be deemed to have elected, on behalf of the Partnership, not to pursue such opportunity. If the Partnership so elects to pursue such opportunity, the Partnership shall reimburse the Presenting Partner or its Affiliates in an amount equal to the direct costs incurred by the Presenting Partner or its Affiliates in connection with developing such opportunity prior to the date of the Partnership's election to pursue such opportunity and the opportunity will be considered a Capital Project. If the Partnership does not so elect (or is so deemed not to have elected) to pursue such opportunity or, if at any time the Partnership ceases to pursue the opportunity in good faith, one or more Affiliates of the Presenting Partner may then elect to pursue such opportunity. If FRP desires to expand its existing operations (or pursue other business opportunities which are part of or related to the Phosphate Chemicals Business) in Sri Lanka or to pursue the opportunities described in a memorandum of understanding between FTX and Ercros, S.A. relating to FESA and ENFERSA, it shall first offer such opportunities to the Partnership in accordance with the preceding provisions of this Section 2.08(b); provided that if the Partnership elects to pursue any of such opportunities, the Partnership shall reimburse FRP in an amount equal to the direct costs incurred by FRP in connection with developing such opportunity prior to the date of the Partnership's election to pursue such opportunity. Notwithstanding the foregoing, nothing contained in this Section 2.08(b) shall prevent one or more Affiliates of any Partner from (A) owning, directly or indirectly, an aggregate of less than five percent (5%) of the common stock of, or other ownership interest in, any Person engaged in the Phosphate Chemicals Business or (B) acquiring (by stock purchase, asset purchase, merger, consolidation or otherwise) any Person engaged in the Phosphate Chemicals Business so long as (I) the revenues derived by such Person from its Phosphate Chemicals Business represent (and can reasonably be expected to continue to represent) less than ten percent (10%) of the total revenues of such Person and (II) the Person acquiring such Person (the "Acquiring Person") either offers to sell such Person's Phosphate Chemicals Business to the Partnership at its fair market value or sells such Person's Phosphate Chemicals Business to an independent third Person, it being understood that, in the case of this clause (B), the Acquiring Person may continue to own and operate, directly or indirectly, such acquired Person's Phosphate Chemicals Business if it has offered to sell such Phosphate Chemicals Business to the Partnership in accordance with this sentence and (x) if any Affiliate of the FRP Partner is the Acquiring Person, two (2) Policy Committee Representatives or Alternates of the IMC Partner (or any combination thereof) fail, on behalf of the Partnership, to accept such offer within thirty (30) days of such offer to sell, or (y) if any Affiliate of the IMC Partner is the Acquiring Person, two (2) Policy Committee Representatives or Alternates of the FRP Partner (or any combination thereof) fail, on behalf of the Partnership to accept such offer within thirty (30) days of such offer to sell. Each Partner acknowledges and agrees that the covenants contained in this Section 2.08(b) have been negotiated in good faith by the parties hereto, and are reasonable and are not more restrictive or broader than necessary to protect the interests of the Partners hereto, and would not achieve their intended purpose if they were on different terms or for periods of time shorter than the periods of time provided herein or were applied in more restrictive geographical areas than are provided herein. Each Partner further acknowledges and agrees that the business of the Partnership is highly competitive, that no Partner hereto would enter into this Agreement but for the covenants contained in this Section 2.08(b) and that such covenants are essential to protect the value of the business of the Partnership. If any provision of this Section 2.08(b) is held to be unenforceable because of the scope or area of its applicability, the court making such determination shall have the power to modify such scope and area or either of them, and such provision shall then be applicable in such modified form. Each Partner and its Affiliates shall be relieved of all obligations under this Section 2.08(b) on and after the second anniversary of the date that such Partner and its Affiliates cease to own an interest in the Partnership. (c) If either Non-Managing Partner (the "Developing Partner") desires to pursue, or to cause the Partnership to pursue, a Real Estate Development Project, it shall present such Real Estate Development Project to the Partnership, it being understood that two (2) Representatives or Alternates (or any combination thereof) of the Non-Managing Partner other than the Developing Partner (the "Electing Partner") may elect, on behalf of the Partnership, to pursue such Real Estate Development Project within sixty (60) days following the completion of such presentation. The Electing Partner shall notify the Developing Partner in writing of such election, on behalf of the Partnership, to pursue or not to pursue such Real Estate Development Project before the expiration of such sixty (60) day period. If the Electing Partner fails to give the Developing Partner notice of such election within such sixty (60) day period, the Electing Partner shall be deemed to have elected, on behalf of the Partnership, not to pursue such Real Estate Development Project. If the Partnership so elects to pursue such Real Estate Development Project, the Electing Partner shall promptly reimburse the Developing Partner for an aggregate of seventy-five percent (75%) of the direct costs incurred by the Developing Partner or its Affiliates in connection with developing such Real Estate Development Project prior to the date of such election. If the Partnership does not so elect (or is so deemed not to have elected) to pursue such Real Estate Development Project, then the Developing Partner shall have the option, for a period of sixty (60) days, to deliver a written notice to each other Partner of its election to either (i) purchase the real property which is to be the subject of the Real Estate Development Project from the Partnership at its fair market value or (ii) cause the Partnership to make a distribution in kind to the Developing Partner of the real property which will be the subject of the Real Estate Development Project. If the Developing Partner elects the purchase option set forth in clause (i) of the preceding sentence, then (A) the Partners shall negotiate in good faith to determine the fair market value of such real property (and if they cannot agree on such value within sixty (60) days following the notice referred to in the preceding sentence, the fair market value shall be determined in accordance with the Real Estate Appraisal Procedure, the cost of which shall be paid by the Developing Partner) and (B) the Partnership shall, within thirty (30) days of the date such fair market value is finally determined, sell such real property to the Developing Partner for a purchase price, payable at the closing of such sale in immediately available funds, equal to its fair market value. If the Developing Partner elects to cause the Partnership to make a distribution in kind pursuant to clause (ii) of the second preceding sentence the Partnership shall make, on or before the thirtieth (30th) day following the date of such election, (1) a distribution in kind to the Developing Partner, of the real property which is the subject of the Real Estate Development Project, (2) a distribution in kind to the Electing Partner of a Comparable Property and (3) a proportional distribution in cash to the Managing Partner. For purposes of this Section 2.08(c), "Comparable Property" shall mean similarly situated real property as determined by the Managing Partner, reasonably acceptable to the Policy Committee, having a fair market value such that the ratio of the fair market value of such real property compared to the fair market value of the real property being distributed to the Developing Partner is equal to the ratio of (x) the Capital Interest of the Partner receiving the distribution in kind pursuant to clause (2) of the preceding sentence to (y) the Capital Interest of the Developing Partner, in each case at the time of such distribution. Each Partner and its Affiliates shall be relieved of all obligations under this Section 2.09(c) on and after the date that such Partner and its Affiliates cease to own an interest in the Partnership. 2.09 Principal Place of Business; Registered Office and Agent. The principal place of business of the Partnership shall be located at 2100 Sanders Road, Northbrook, Illinois 60062 or at such other place or places as the Policy Committee may from time to time determine. The registered office of the Partnership shall be 2100 Sanders Road, Northbrook, Illinois 60062 and the registered agent of the Partnership at such address shall be the Managing Partner; provided that the Managing Partner may designate such other address or agent as it determines appropriate from time to time. ARTICLE III. Contributions to the Partnership 3.01 Initial Contributions. On the Closing Date, the contributions are being made to the Partnership by or on behalf of, and the Partnership will assume certain liabilities of, the Partners and their Affiliates, all as provided in the Contribution Agreement. Immediately after such contribution, the agreed value of each Partner's Capital Account shall be as follows (it being understood that such agreed values shall not reflect, and shall not be adjusted to reflect, any adjustments or payments contemplated by the Contribution Agreement): IMC Partner $748,993,000 FRP Partner $650,993,000 Managing Partner $ 14,000 3.02 Additional Contributions. As and when the Policy Committee (or, if not the Policy Committee, the CEOs but not the Managing Partner) determines, in accordance with the terms of Section 6.07(a) or (b), that the Partnership requires cash from time to time, each of the IMC Partner (or, during the IMC GPCo Liquidation Period, each of Operations and IMC GPCo) and the FRP Partner hereby agrees that it shall make cash contributions to the Partnership in an amount equal to the product of (i) the amount of the Partnership's cash requirement as determined by the Policy Committee or the CEOs, but not the Managing Partner, in accordance with the terms of Section 6.07(a) or (b), by the Policy Committee (or, if not by the Policy Committee, by the CEOs), multiplied by (ii) a fraction, the numerator of which is such Partner's Current Interest and the denominator of which is the aggregate Current Interests of the Non-Managing Partners; provided that if the Policy Committee (or, if not the Policy Committee, the CEOs) determines, in accordance with the terms of Section 6.07(a) or (b), that the cash required by the Partnership is to be used for a Capital Project, each of the IMC Partner (or, during the IMC GPCo Liquidation Period, each of Operations and IMC GPCo) and the FRP Partner shall make cash contributions to the Partnership either (x) in an amount equal to the product of (1) the cash required by the Partnership for such Capital Project as determined, in accordance with the terms of Section 6.07(a) or (b), by the Policy Committee (or, if not by the Policy Committee, by the CEOs), multiplied by (2) a fraction, the numerator of which is the Capital Interest of such Partner at such time as the Capital Project will be placed in service and the denominator of which is the aggregate Capital Interests of the Non-Managing Partners at such time as the Capital Project will be placed in service, or (y) in such other amount as the Policy Committee (or, if not the Policy Committee, the CEOs) may determine in accordance with the terms of Section 6.07(a) or (b). Once the Policy Committee (or, if not the Policy Committee, the CEOs) approves, in accordance with the terms of Section 6.07(a) or (b), an additional cash contribution, the Managing Partner shall have, subject to any terms or conditions specified by the Policy Committee (or, if not by the Policy Committee, by the CEOs) at the time it so approves such additional cash contribution, the reasonable discretion to determine the timing of such cash contribution giving due consideration to the Partnership's cash needs as determined by the Managing Partner. The Managing Partner shall notify the IMC Partner (or, during the IMC GPCo Liquidation Period, each of Operations and IMC GPCo) and the FRP Partner at least ten (10) days in advance of the time each such cash contribution is required to be made to the Partnership. 3.03 Failure to Contribute. If either the IMC Partner (or, during the IMC GPCo Liquidation Period, either of Operations or IMC GPCo) or the FRP Partner (in any such case, the "Non-Contributing Partner") fails, in whole or in part, to make any cash contribution or defaults, in whole or in part, in any other obligation to pay money under this Agreement within fifteen (15) days of giving of a due notice by either of the other Partners to the Non-Contributing Partner that such cash contribution is due or that the Non-Contributing Partner has defaulted in any other such obligation hereunder, the IMC Partner (with respect to circumstances in which the FRP Partner is the Non-Contributing Partner) or the FRP Partner (with respect to circumstances in which the IMC Partner (or, during the IMC GPCo Liquidation Period, either of Operations or IMC GPCo) is the Non-Contributing Partner), as the case may be (in either such case, the "Contributing Partner"), shall have the right to advance directly to the Partnership such additional cash contribution, or portion thereof, or such other payment of money, or portion thereof, as the Non-Contributing Partner has failed to make or defaulted on (the "Non-Contributing Partner's Share"), and such advance, together with a proportionate amount of the corresponding cash contribution or other payment, if any, made by such Contributing Partner, shall be deemed a loan by the Contributing Partner to the Partnership (the "Partner Loan"). A Partner Loan shall bear interest at the rate equal to the lower of: (i) the maximum rate allowed by law; or (ii) five (5) percentage points over the Prime Rate. The Partner Loan shall be recouped and otherwise repaid from all funds which would otherwise have been available to make distributions which the Partners would otherwise be entitled to receive from the Partnership but for this Section 3.03, all of which shall instead be paid by the Partnership to the Contributing Partner and applied to the payment of the Partner Loan and all interest thereon, until the same shall have been paid in full. It is understood, however, that to the extent the principal and interest of a Partner Loan are not repaid in full by the Partnership from all funds which would otherwise have been available to make distributions (including any distributions pursuant to Section 12.07(b)) to the Partners, the Non-Contributing Partner shall be obligated to repay an amount equal to the Non-Contributing Partner's Share of the outstanding balance of the principal and interest of such Partner Loan upon commencement of the winding up of the Partnership in accordance with Section 12.02. Any amount which would otherwise have been available to make distributions from the Partnership that is applied to any Partner Loan shall be credited first to any interest then due on such Partner Loan, and the balance of the distribution shall be credited against the outstanding principal balance of such Partner Loan. The exercise of the right to make a Partner Loan shall be in addition to any other rights or remedies that the Contributing Partner may have under this Agreement or at law or in equity arising from the Non-Contributing Partner's (i) failure to make the required cash contribution or (ii) default in any other obligation to pay money. 3.04 Assumption of Liabilities Under Contribution Agreement. In accordance with the terms of this Agreement, the IMC Partner has assumed all of the liabilities and obligations of Operations, and the FRP Partner has assumed all of the liabilities and obligations of FRP, in each case under and pursuant to the Contribution Agreement and each such Partner hereby confirms its agreement to perform such assumed liabilities and obligations as if it were a party to such agreement. Any amounts payable by either Non-Managing Partner under the Contribution Agreement shall be deemed amounts payable by such Non- Managing Partner hereunder. The Partners agree that (i) any payment by the IMC Partner or the FRP Partner pursuant to the terms of this Section 3.04 shall satisfy such amounts payable by Operations or FRP, as the case may be, or their Affiliates under the Contribution Agreement and (ii) any payment by Operations or FRP, as the case may be, or their Affiliates under the Contribution Agreement shall satisfy such amounts payable by the IMC Partner or the FRP Partner under this Section 3.04. Nothing herein shall be deemed to release Operations or FRP (or any of their Affiliates) from any obligations they may have under the Contribution Agreement. 3.05 Subsequent Capital Contribution. The IMC Partner and the FRP Partner each may, after the Closing Date, contribute to the Partnership their respective organizational costs, as defined in Section 709 of the Code, incurred in forming the Partnership. ARTICLE IV. Interests of Partners 4.01 Interests of Partners. (a) The "Current Interests" of the Partners shall be as follows: Fiscal Year Ending IMC FRP Managing June 30 Partner Partner Partner __________________ _________ _________ _____________ 1994 41.3995% 58.5995% 0.001% 1995 44.9995% 54.9995% 0.001% 1996 46.8995% 53.0995% 0.001% 1997 46.4995% 53.4995% 0.001% 1998 and 59.3995% 40.5995% 0.001% thereafter During the IMC GPCo Liquidation Period, the "Current Interests" of Operations and IMC GPCo shall be equal to eighty percent (80%) and twenty percent (20%), respectively, of the "Current Interests" of the IMC Partner set forth above. (b) The "Capital Interests" of the Partners shall be as follows: Fiscal Year Ending IMC FRP Managing June 30 Partner Partner Partner __________________ _________ ___________ _____________ 1994 53.4995% 46.4995% 0.001% 1995 54.8995% 45.0995% 0.001% 1996 56.3995% 43.5995% 0.001% 1997 57.7995% 42.1995% 0.001% 1998 and 59.3995% 40.5995% 0.001% thereafter During the IMC GPCo Liquidation Period, the "Capital Interests" of Operations and IMC GPCo shall be equal to eighty percent (80%) and twenty percent (20%), respectively, of the "Capital Interests" of the IMC Partner set forth above. 4.02 Capital Accounts. (a) A separate Capital Account shall be established and maintained in respect of each Partner. (b) The Capital Accounts of the Partners shall be credited with (i) the amount of cash and the fair market value of other property (net of liabilities that the Partnership is considered to assume or take subject to under Section 752 of the Code) contributed by such Partner to the capital of the Partnership and (ii) allocations to such Partner pursuant to Sections 5.01 and 5.02 of income (or items thereof) including tax-exempt income and gain. The Capital Accounts of each of the Partners shall be debited with (i) the amount of cash and the fair market value of other property distributed to such Partner (net of liabilities that such Partner is considered to assume or take subject to under Section 752 of the Code); (ii) allocations to such Partner of expenditures of the Partnership described in Section 705(a)(2)(B) of the Code; and (iii) allocations to such Partner pursuant to Sections 5.01 and 5.02 of deduction or loss (or items thereof). If any property other than cash is distributed to any Partner, the Capital Accounts of the Partners shall be adjusted as if the property had instead been sold by the Partnership for a price equal to its fair market value, with the resulting gain or loss allocated among the Partners pursuant to Sections 5.01 and 5.02 and the proceeds thereof distributed. (c) For purposes of computing the amount of any item of income, gain, deduction or loss to be reflected in the Capital Accounts of the Partners, the determination, recognition and classification of such items shall be the same as its determination, recognition and classification for Federal income tax purposes; except that: (i) Any deductions for depreciation, depletion, cost recovery or amortization attributable to property contributed by the Partners to the Partnership or attributable to Partnership property adjusted pursuant to Section 4.02(d) shall be determined as if the adjusted basis of such property on the date it was contributed or adjusted was equal to the fair market value of the property; and (ii) Any income, gain or loss attributable to the taxable disposition of any property contributed by the Partners or attributable to Partnership property adjusted pursuant to Section 4.02(d) shall be determined as if the adjusted basis of the property as of the date of disposition was equal to the fair market value of the property at the time of contribution or adjustment reduced by all depreciation, cost recovery and amortization deductions charged to the Partners' Capital Accounts with respect to such property. (d) Upon the issuance of additional Partnership interests for cash or property, the Capital Accounts of the Partners and the value of all Partnership assets for purposes of Section 4.02(c) shall be adjusted upwards or downwards to reflect any unrealized gain or unrealized loss attributable to each asset as if such assets had been sold immediately prior to such issuance and such gain or loss had been allocated to the Partners, at such time, pursuant to Sections 5.01 and 5.02. 4.03 Interest on Capital Accounts. Except as specifically provided herein, no Partner shall be entitled to any interest on its Capital Account or its contributions to the capital of the Partnership, nor shall any Partner have the right to demand or receive the return of all or any part of its Capital Account or its contributions to the capital of the Partnership. 4.04 Loans from Partners. Loans by a Partner to the Partnership (including, without limitation, any Partner Loan) shall not be considered capital contributions. 4.05 Transferred Capital Accounts. In the event that any Partner transfers all or a portion of its Partnership Interest in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor Partner to the extent such Capital Account relates to the transferred Partnership Interest or portion thereof. In accordance with the terms of the preceding sentence, Operations shall succeed to 80% of the Capital Account of IMC GPCo as of the date of the Initial IMC GPCo Liquidating Distribution and Operations shall succeed to the remaining 20% of the Capital Account of IMC GPCo as of the date of the Final IMC GPCo Liquidating Distribution. If FTX and FRP elect to merge, liquidate or dissolve the FRP Partner (or transfer its Partnership Interests) in accordance with the terms of the Amendment, Waiver and Consent Agreement, the successor to the FRP Partner, as a Partner to the Partnership, shall succeed to the Capital Account of the FRP Partner, as provided in the first sentence of this Section. ARTICLE V. Profit and Loss Sharing; Allocations for Federal, State and Local Income Tax Purposes; Cash Distributions; Suspended Distributions; Reimbursement for Transaction Costs 5.01 Allocation of Profits and Losses. Except as provided in Section 5.02, 5.03 or 12.05, for purposes of maintaining the Capital Accounts and in determining the rights of the Partners among themselves, each item of income, gain, loss and deduction (computed in accordance with Section 4.02(c)) shall be allocated to the Partners' Capital Accounts as a part of the Residual Net Profit or Residual Net Loss for the year in accordance with the Partners' Capital Interests for the following year. 5.02 Special Allocations. (a) Transaction Costs attributable to the transactions contemplated by the Contribution Agreement shall be allocated fifty percent (50%) to IMC GPCo and fifty percent (50%) to the FRP Partner. (b) Any gain or loss attributable to a Capital Transaction shall be allocated to the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations and IMC GPCo) and the FRP Partner in accordance with their respective Capital Interests for the fiscal quarter of the Partnership in which the effective date of the Capital Transaction occurs. (c) If the IMC Partner's (or, during the IMC GPCo Liquidation Period, Operations' and IMC GPCo's) or the FRP Partner's share of Current Interest Cash for any year exceeds that Partner's share of Target Cash for that year, such Partner shall be allocated an amount of gross income equal to the excess. (d) If the IMC Partner's (or, during the IMC GPCo Liquidation Period, Operations' and IMC GPCo's) or the FRP Partner's share of Current Interest Cash for any year is less than that Partner's share of Target Cash for that year, such Partner shall be allocated an amount of gross loss equal to the difference. (e) The gross income or loss allocated to any Partner under Section 5.02(c) or 5.02(d) shall be considered to consist of each item of Partnership income or loss (except depreciation, depletion and amortization), as the case may be, in the same proportion that such items bear to total Partnership income or loss. (f) For purposes of Sections 5.02(c) and 5.02(d), the IMC Partner's (or, during the IMC GPCo Liquidation Period, Operations' and IMC GPCo's) or the FRP Partner's percentage of Target Cash for any year shall be equal to such Partner's Current Interest for such year. For purposes of Sections 5.02(c) and 5.02(d), the IMC Partner's (or, during the IMC GPCo Liquidation Period, Operations' and IMC GPCo's) or the FRP Partner's "share of Target Cash" for any year shall be equal to (i) such Partner's percentage of Target Cash for such year, as determined pursuant to the preceding sentence multiplied by (ii) Target Cash for such year. (g) All losses and deductions associated with the Partners' organizational costs shall be allocated proportionally to the Partners based on their contribution of such costs pursuant to Section 3.05. 5.03 Tax Allocations. (a) Except as otherwise provided in this Agreement, for Federal income tax purposes, all items of Partnership income, gain, loss and deduction (and the character and source of such items) shall be allocated among the Partners in the same manner as the corresponding item of income, gain, loss or deduction is allocated to Capital Accounts pursuant to Sections 5.01 and 5.02. (b) If, as a result of contributions of property by a Partner to the Partnership or as a result of the revaluation of Partnership assets pursuant to Section 4.02(d), Section 704(c) of the Code (or the principles of Section 704(c) of the Code) requires allocations of income, gain, loss and deduction of the Partnership in a manner different from that set forth in Sections 5.01 and 5.02, the Partnership shall adopt mutually acceptable methods and conventions consistent with the provisions of Section 704(c) of the Code and the Regulations thereunder which are acceptable to both the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations and IMC GPCo) and the FRP Partner and such methods and conventions shall control, solely for Federal income tax purposes, allocations of items of Partnership income, gain, loss and deduction. The method and conventions adopted by the Partnership shall be designed, in general, (i) to allocate the "built-in" gain or loss on the sale of a contributed property to the contributor; (ii) to allocate the deductions from contributed properties in a manner that reflects the Partners' respective contributions of basis giving rise to such deductions (other than special basis adjustments pursuant to Section 743 of the Code); (iii) to preserve to the FRP Partner, for the benefit of FRP and its partners, deductions attributable to special basis adjustments pursuant to Section 754 of the Code resulting from the purchase of interests in FRP; (iv) to adjust the allocations, to the extent necessary, to reflect the sale of an asset contributed by a Partner; (v) to eliminate the difference between the value at which the property is shown on the books of the Partnership and the property's adjusted tax basis; and (vi) to assist the FRP Partner in integrating the allocations of the Partnership with allocations to FRP and its partners in a reasonable manner. 5.04 Interim Closing of the Books on Transfer. In the event that a Partner sells or exchanges all or a portion of its Partnership Interest or a Partner's Partnership Interest is reduced, the Partners' distributive share of items allocated to them pursuant to Sections 5.01 and 5.02 shall be determined as if the Partnership's books of account were closed on the date on which such sale, exchange or reduction of the Partnership Interest occurred; provided, that, to the extent such determination relates to transactions contemplated by the IMC GPCo Plan of Liquidation and the optional merger, liquidation or dissolution of Agrico LP (or the transfer of its Partnership Interests to FRP or an Affiliate of FRP) as contemplated by the Amendment, Waiver and Consent Agreement, such determination shall be based upon any permissible method elected by the Tax Matters Partner. 5.05 Disagreement Between Partners. In the event of a disagreement between the IMC Partner and the FRP Partner concerning the correct calculation of the allocations pursuant to this Article V, the correct calculation of such allocations shall be treated as a Major Decision and shall be determined by the Policy Committee, the CEOs or the Managing Partner, as the case may be, pursuant to Section 6.07(a) and Section 6.07(b). 5.06 Obligations with Respect to Distributable Cash. Notwithstanding any other provision of this Agreement other than Sections 3.03 and 5.07(d), but subject to the terms of any agreement or instrument to which the Partnership is a party, the Partnership shall distribute quarterly all Distributable Cash to the Partners. 5.07 Distribution of Distributable Cash; Suspended Distributions. (a) Subject to the terms of any agreement or instrument to which the Partnership is a party, as soon as available, but in any event (i) not later than sixteen (16) days (or, in the case of a quarter ending on June 30, not later than thirty (30) days) following the end of each quarter of each Fiscal Year, commencing with the end of the first quarter following the Closing, the Partnership shall advise each Partner in writing of the amount of Distributable Cash, if any, which will be distributed to each Partner in respect of the previous quarter of the Fiscal Year, (ii) in the case of a quarter ending June 30, not later than sixteen (16) days following the end of such quarter, commencing with the first such quarter following the Closing, the Partnership shall advise each Partner in writing of its good faith estimate of the amount of Distributable Cash, if any, which will be distributed to each Partner in respect of the previous quarter of the Fiscal Year and (iii) not later than 40 days following the end of each quarter of each Fiscal Year, commencing with the first quarter following the Closing, the Partnership shall distribute to each Partner such Partner's Distributable Cash in respect of the preceding quarter (adjusted, if required, as provided in Section 5.07(b) and Section 5.07(c) below); provided, however, that if the Accounting Referee has not provided its report in accordance with the terms of the Contribution Agreement prior to any such distribution of Distributable Cash, the Managing Partner shall consider the items or amounts that are the subject of dispute in establishing any cash reserves of the Partnership, including, without limitation, as such reserves relate to the calculation of Current Interest Cash. (b) Notwithstanding the foregoing, the allocation of Distributable Cash to IMC GPCo and the FRP Partner for quarters ending on or prior to June 30, 1994 shall be adjusted as follows: (i) first, Distributable Cash shall be computed and allocated to IMC GPCo and the FRP Partner for such quarter, as if any Transaction Costs incurred by the Partnership in such quarter had not been incurred; (ii) second, an amount equal to 50% of any expenditures for Transaction Costs incurred by the Partnership during such quarter shall be subtracted from the amounts calculated under clause (i) above; and (iii) third, the amount so calculated pursuant to clauses (i) and (ii) above shall be distributed to IMC GPCo and the FRP Partner. (c) Capital Proceeds in respect of a Material Asset Sale shall be distributed, reinvested or retained by the Partnership as determined by the Policy Committee or the CEOs, as the case may be, at the time of approval of such Material Asset Sale in accordance with the terms of Section 6.07. Capital Proceeds in respect of all other Capital Transactions shall be distributed to the Partners pursuant to Section 5.07(a) unless the Managing Partner elects to use such Capital Proceeds to replace the capital asset in respect of which such Capital Proceeds were generated or otherwise to maintain (but not for the Expansion of) the business of the Partnership. (d) Notwithstanding the foregoing provisions of Sections 5.06, 5.07(a), 5.07(b) and 5.07(c), and in addition to the suspension and repayment that is to occur under the circumstances set forth in Section 3.03 hereof, if either Operations or FRP, or either of their Affiliates, fails to pay any claim (a "Contribution Agreement Claim") by the Partnership or another Partner or any of its respective Affiliates (the "Non-Defaulting Partner") under the Contribution Agreement and there is no good faith dispute between Operations, or any of its Affiliates, and FRP, or any of its Affiliates, as to the existence of such claim or if either the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) or the FRP Partner fails to make any payment due hereunder (including, without limitation, any cash contribution pursuant to Section 3.02) and there is no good faith dispute among the Partners over the existence of such default, then the Partnership shall suspend all payments and distributions otherwise due hereunder to the Partner that has so defaulted or whose parent entity has so defaulted (the "Defaulting Partner"). If a good faith dispute exists (i) between Operations, or any of its Affiliates, and FRP, or any of its Affiliates, as to the existence of a Contribution Agreement Claim or (ii) between the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) and the FRP Partner over the existence of a default with respect to a payment due hereunder, then in each such case, the parties to such dispute shall proceed to resolve such dispute as soon as practicable pursuant to the Dispute Resolution Mechanism. All payments and distributions otherwise due to the Defaulting Partner hereunder, including, without limitation, amounts determined by the Dispute Resolution Mechanism to be a valid Contribution Agreement Claim or a defaulted payment hereunder, shall instead be recouped and applied to what would otherwise have been distributed to such Defaulting Partner to reduce the claim of the Partnership or Partner or of their Affiliate, as the case may be, until such time as the Contribution Agreement Claim or such defaulted payment, as the case may be, together with interest on the unpaid amount thereof at the rate per annum equal to the lower of: (i) the maximum rate allowed by law and (ii) the Prime Rate plus five percent (5%) has been paid in full. The parties agree that with respect to a Contribution Agreement Claim all amounts so recouped and paid to a Non-Defaulting Partner shall satisfy such amounts owed by Operations or FRP, as the case may be, or their Affiliates under the Contribution Agreement. Upon payment in full of the Contribution Agreement Claim or such defaulted payment, as the case may be (together with such interest accrued thereon), the Partnership shall resume payments and distributions to the Partners in accordance with the provisions of Sections 5.07(a), 5.07(b) and 5.07(c). 5.08 Payment of Transaction Costs. The Partnership shall promptly reimburse any Partner for any Transaction Costs incurred and actually paid by such Partner. Any such Transaction Costs incurred prior to the date of this Agreement, and not previously reimbursed by the Partnership, will be promptly reimbursed by the Partnership following such date. ARTICLE VI. Management 6.01 Operation. The business and affairs of the Partnership shall be managed and conducted by the Managing Partner, who shall have full control over and responsibility for such business and affairs, in all cases subject to the provisions of this Agreement. The Managing Partner shall perform its duties and obligations hereunder as an ordinary prudent and reasonable manager would under similar circumstances. It is understood and agreed that regardless of the fact that the Managing Partner may enter into transactions, agreements, arrangements and understanding with the Operating Partner or its Affiliates, including, without limitation, the Marketing and Administrative Services Agreement and the Leasing Agreement, in order for the Operating Partner or such Affiliates to provide certain services to the Managing Partner, the Managing Partner shall not be relieved of its duties and obligations to provide services hereunder nor shall such duties and obligations be altered by such transactions, agreements, arrangements or understandings. 6.02 General Powers of the Managing Partner. Subject to the terms, restrictions and limitations set forth elsewhere herein, including, without limitation, those set forth in this Article VI, the Managing Partner, on behalf of the Partnership, shall have full authority and responsibility to do all things it deems necessary or appropriate in the conduct of the business and affairs of the Partnership, including, without limitation, (i) the determination of the operations in which the Partnership will participate and the level or rate of activity of such operations; (ii) the obtaining and maintaining of all governmental licenses and permits necessary or appropriate for the conduct of the activities of the Partnership; (iii) the execution of normal banking transactions such as accepting deposits, drawing of checks and otherwise making payments on behalf of the Partnership; (iv) the maintaining or incurring of Debt, the making of expenditures and the incurring of any other obligations it deems necessary or appropriate for the conduct of the activities of the Partnership; (v) the evaluation of confidential information furnished to the Partnership by others in connection with the operation of the Partnership's business or the evaluation by the Partnership of a potential transaction; (vi) the acquisition, lease, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of the assets of the Partnership; (vii) the use of the assets of the Partnership (including, without limitation, cash on hand) in any manner it deems necessary or appropriate in order to achieve the purposes of the Partnership, including, without limitation, the financing of the conduct of the activities of the Phosphate Chemicals Business and any other operations of the Partnership, the extension of credit in the ordinary course of business to Persons other than Affiliates of the Managing Partner (except that the Managing Partner may cause the Partnership to advance funds to it or its Affiliates in order to meet payroll or other similar obligations with respect to its employees or employees of its Affiliates who provide services to the Partnership, as contemplated in Sections 9.06 and 9.11), the repayment of obligations of the Partnership, the conduct of additional Partnership operations and the purchase of assets; (viii) the negotiation and execution on any terms it deems necessary or appropriate, and the performance of, any contracts, conveyances or other instruments that it considers necessary or appropriate to the conduct of the Partnership operations or the implementation of its powers under this Agreement; (ix) the calculation and distribution of Distributable Cash; (x) subject to Section 5.07(c) and Section 5.07(d), the calculation and reinvestment, or distribution, of Capital Proceeds; (xi) the selection, appointment and dismissal of officers, employees, outside attorneys, accountants, consultants, engineers and contractors to perform services for the Partnership, and the determination of their compensation and other terms of employment or hiring; (xii) the maintenance of such insurance (including self- insurance) for the benefit of the Partnership as the Managing Partner deems necessary or appropriate; (xiii) the formation of any further limited or general partnerships, joint ventures or other relationships that the Managing Partner deems necessary or appropriate, except that the Managing Partner shall not, without the consent of the FRP Partner, cause the Partnership to create, invest in, or become an equity owner or partner in an entity which is subject to Federal income taxes; (xiv) the control of any matters affecting the rights and obligations of the Partnership, including the conduct of litigation and the incurring of legal expenses and the settlement of claims and litigation; (xv) the preparation of the Partnership's tax returns; (xvi) subject to Section 9.12, the hiring or engagement of its Affiliates (subject to the supervision and control of the Managing Partner) to carry out the obligations of the Managing Partner hereunder; (xvii) subject to Section 9.07, the taking of all actions necessary or appropriate to preserve life or property in the case of an emergency or necessary or appropriate to comply with applicable law; and (xviii) the payment of all taxes which may be levied or assessed against the Partnership or its properties. 6.03 Limitations on the Partners; Relations Among Partners. (a) Except as set forth in Section 6.02 with respect to the Managing Partner, but in all cases subject to Section 6.07, no Partner shall, in the name of, or on behalf of the Partnership, act without the prior consent of the Policy Committee or the approval of the two CEOs or the Managing Partner contemplated by Section 6.07(b), as the case may be. (b) No Partner shall be liable to third Persons for Partnership losses, deficits, liabilities or obligations except as specifically otherwise provided herein or expressly agreed to in writing by such Partner, unless the assets of the Partnership shall first be exhausted. (c) In any matter between the Partnership on the one hand and any of the Partners on the other hand or in any matter between the Partners, neither the Partnership nor any Partner shall be bound by the act of a Partner unless such Partner is acting in accordance with the limitations and provisions set forth in this Agreement or with the consent of each other Partner. 6.04 Policy Committee. (a) The responsibility and authority for establishing policies relating to the strategic direction of the Partnership and assuring that such policies are implemented shall be vested in a policy committee (the "Policy Committee"). All decisions concerning the management and control of the Partnership that are approved by the Policy Committee shall be binding on the Partnership and the Partners. Except as otherwise stated herein, the Managing Partner shall use all commercially reasonable efforts to act in accordance with the budgets and policies established by, and other determinations made by, the Policy Committee or the two CEOs or the Managing Partner, as the case may be, in accordance with Section 6.07. (b) The Policy Committee shall consist of four (4) members, two (2) of whom shall be representatives of the IMC Partner selected by the IMC Partner (each an "IMC Representative" and, collectively, the "IMC Representatives") and two (2) of whom shall be representatives of the FRP Partner selected by the FRP Partner (each an "FRP Representative" and, collectively, the "FRP Representatives" and, together with the IMC Representatives, the "Representatives"). A Representative of the Operating Partner shall serve as Chairman of the Policy Committee. The IMC Partner and the FRP Partner shall, within ten (10) days of the date hereof, notify each other in writing of the identity of the IMC Representatives and the FRP Representatives, respectively. The IMC Partner, within (10) days of the date hereof, shall notify the other Partners in writing as to which of its Representatives is to initially serve as Chairman of the Policy Committee. Any person selected by the IMC Partner or the FRP Partner to serve as an IMC Representative or an FRP Representative shall continue to serve in such capacity until such Partner shall have notified the other Partners in writing of his or her replacement. The IMC Partner and the FRP Partner may, by written notice to the other, designate a person to serve as an alternate for each IMC Representative and each FRP Representative, respectively (each alternate to an IMC Representative being referred to herein as an "IMC Alternate" and, collectively, as the "IMC Alternates"; each alternate to an FRP Representative being referred to herein as an "FRP Alternate" and, collectively, as the "FRP Alternates"; and the IMC Alternates and the FRP Alternates being collectively referred to herein as the "Alternates"), and such IMC Alternate or FRP Alternate, as the case may be, shall be entitled, in the absence of such IMC Representative or FRP Representative, to vote on behalf of such IMC Representative or FRP Representative at any meeting of the Policy Committee. Each Partner and its Affiliates, in dealing with IMC Representatives or Alternates or the FRP Representatives or Alternates, as the case may be, shall be entitled to rely conclusively upon the power and authority of such Representatives or Alternates to bind the IMC Partner or the FRP Partner, as the case may be, with respect to all matters unless and until it receives notice to the contrary in writing from the IMC Partner or the FRP Partner, as the case may be. To the fullest extent permitted by law, each Representative and Alternate shall be deemed the agent of the Partner which appointed such Person a Representative and Alternate, and such Representative or Alternate shall not be deemed an agent or a sub-agent of the Partnership or the other Partners and shall have no duty (fiduciary or otherwise) to the Partnership or the other Partners. Each Partner, by execution of this Agreement, agrees to, consents to, and acknowledges the delegation of powers and authority to such Representative and Alternatives, and to the actions and decisions of such Representative and Alternates within the scope of their respective authority as provided herein. (c) The Policy Committee shall hold regular meetings at least once during each quarter of each Fiscal Year on dates specified by the Policy Committee and may meet for special meetings at the call of any Partner on at least twenty (20) days' notice to the other Partners (or such shorter periods as may be necessary in an emergency). Attendance by any IMC Representative or FRP Representative or any IMC Alternate or FRP Alternate at any meeting of the Policy Committee shall constitute an effective waiver of any required prior notice to the IMC Partner or the FRP Partner, as the case may be, of such meeting. The Chairman of the Policy Committee shall, (i) with reasonable advance notice (which in the case of regular quarterly meetings shall not be less than fourteen (14) days), prepare and distribute an agenda for each meeting of the Policy Committee, (ii) organize and conduct such meeting and (iii) prepare and distribute minutes of such meeting. Any Partner may propose in advance topics for the agenda or raise topics which are not on the agenda for such meeting. In addition to the Representatives and Alternates of the Partners serving on the Policy Committee each Representative or Alternate of each of the IMC Partner and the FRP Partner may bring one or more other advisors to any meeting; provided that such advisors shall not have the right to vote on any matter brought before the Policy Committee; and provided, further that the Representatives or Alternates of either of the IMC Partner or the FRP Partner shall have the right to call executive sessions of the Policy Committee and to exclude any Person not a Representative or Alternate from such executive session unless such Person is an employee of a Partner or its parent entity. (d) Meetings of the Policy Committee may only be held when a quorum is present. Except as set forth in the last sentence of this Section 6.04(d), a quorum of the Policy Committee shall be comprised of four (4) Representatives or Alternates (or any combination thereof), which quorum shall be comprised of two (2) IMC Representatives or IMC Alternates (or any combination thereof) and two (2) FRP Representatives or FRP Alternates (or any combination thereof). The affirmative vote of a majority of the Policy Committee at a meeting at which a quorum is present (two (2) IMC Representatives or IMC Alternates (or any combination thereof) and two (2) FRP Representatives or FRP Alternates (or any combination thereof) being entitled to vote at any such meeting, except as set forth in the final two (2) sentences of this Section 6.04(d)) must be obtained in connection with the decision of any matter being considered by the Policy Committee; provided, that in the case of a business opportunity presented to the Partnership by a Presenting Partner pursuant to Section 2.08(b) or pursuant to Section 3.0 of the Parent Agreement or a Real Estate Development Project presented to the Partnership by a Developing Partner pursuant to Section 2.08(c), the election as to whether to pursue or not to pursue such business opportunity or Real Estate Development Project, as the case may be, shall be made by the affirmative vote of two (2) Representatives or Alternates (or any combination thereof) of the Exercising Partner or the Electing Partner, as the case may be. Representatives or Alternates (or any combination thereof) constituting a quorum may, upon their unanimous consent, participate in a meeting of the Policy Committee by means of conference telephone or similar communications equipment which makes it possible for all persons participating in the meeting to hear each other. Representatives or Alternates (or any combination thereof) may consent to any action without a meeting through a consent in writing of two (2) IMC Representatives or IMC Alternates (or any combination thereof), and two (2) FRP Representatives or FRP Alternates (or any combination thereof) or, in the circumstances described in the proviso to the second preceding sentence above, of two Representatives or Alternates (or any combination thereof) of the Exercising Partner or the Electing Partner, as the case may be. Notwithstanding any provision of this Agreement to the contrary, if either the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) or the FRP Partner defaults in any obligation to pay money (including, without limitation, any cash contribution pursuant to Section 3.02 and any amounts payable under the Contribution Agreement) as and when due hereunder and such default remains uncured after the expiration of thirty (30) days from and after notice thereof to such Partner by any other Partner and there is no good faith dispute among the Partners or their Affiliates over the existence of such default (with any such good faith disputes among the Partners or their Affiliates to be resolved as soon as practicable pursuant to the Dispute Resolution Mechanism), neither the defaulting Partner's Representatives nor Alternates (which, during the IMC GPCo Liquidation Period, with respect to either Operations or IMC GPCo shall mean neither the IMC Representatives nor the IMC Alternates) shall be entitled to vote on, or consent to, any matter before the Policy Committee until such time as the default has been cured by the defaulting Partner (but they shall continue to receive notice of and to be able to attend meetings of the Policy Committee), and during such period the Policy Committee shall be entitled to exercise all of its power and authority as set forth in this Partnership Agreement upon the vote at a meeting (or by telephone or other similar communications equipment as set forth above) or by written consent of two (2) of the Representatives or Alternates (or any combination thereof) of the non-defaulting Partner. In any such event, the presence at a meeting in person (or by telephone or other similar communications equipment as set forth above) of two (2) Representatives or Alternates (or any combination thereof) of the non-defaulting Partner shall constitute a quorum for the transaction of business. 6.05 Rules of Procedure. The Policy Committee may from time to time adopt detailed rules and procedures not inconsistent with this Agreement for the management of the business of the Partnership. 6.06 Further Management Limitations. Under no circumstances shall the Policy Committee have the power to alter or modify in any manner the terms of this Agreement. 6.07 Major Decisions. (a) Except as provided in Section 6.07(b) below, no act shall be taken or sum expended or obligation incurred by the Partnership, the Policy Committee or any Partner concerning a matter within the scope of any of the Major Decisions set forth below (each a "Major Decision"), unless and until the Major Decision (A) shall be approved by the Policy Committee or the CEOs or (B) is permitted to be taken by the Managing Partner pursuant to Section 6.07(b). The Major Decisions shall consist of: (i) creating any Debt of the Partnership in an aggregate amount at any time outstanding exceeding the Base Obligation Amount applicable at the time when such Debt is incurred; provided that no approval by the Policy Committee or the CEOs will be required for borrowings by the Partnership for working capital purposes pursuant to a credit facility (or a working capital contribution facility) previously approved by the Policy Committee (or, if not by the Policy Committee, by the CEOs); and provided, further that the Partners shall have the right to make Partner Loans to the Partnership in accordance with Section 3.03 without the approval of the Policy Committee or the CEOs; (ii) making, or committing to make, any capital expenditures for Expansion in an annual aggregate amount in any Fiscal Year in excess of the Base Obligation Amount for such Fiscal Year; (iii) making, or committing to make, any Material Asset Sale; (iv) approving annual operating and capital expenditure budgets, quarterly updates of such budgets and any increase in excess of 15% in any previously approved capital budget item having a dollar amount in any Fiscal Year in excess of the Base Budget Amount for such Fiscal Year, it being understood that if any quarterly update of a previously approved annual operating or capital expenditure budget is not approved by the Policy Committee, or the CEOs pursuant to Section 6.07(b), as the case may be, the Managing Partner shall have the authority to continue to operate and manage the business and affairs of the Partnership in accordance with the most recently approved annual operating or capital expenditure budget, as the case may be, as such budget has been updated by any previously approved quarterly budget update; (v) calculating Distributable Cash and making distributions of Distributable Cash in accordance with Section 5.07; (vi) entering into, or modifying or amending in any material respect, any agreement which expressly restricts the Partnership's right to distribute Distributable Cash to the Partners; (vii) incurring a Material Obligation (other than Debt permitted to be incurred pursuant to Section 6.07(a)(i)); (viii) (A) shutting down any Material Facilities of the Partnership if, in the good faith judgment of the Managing Partner, such shut down is expected to last more than three (3) months or (B) continuing to keep any Material Facilities of the Partnership shut down (other than a shut down covered by clause (A) above which was properly approved by the Policy Committee or, if not by the Policy Committee, by the CEOs) for a period in excess of three (3) months; (ix) approving and determining the amount of any cash contributions by the Partners to be made pursuant to Section 3.02; (x) entering into, or modifying or amending in any material respect, any transactions, agreements, arrangements or understandings between or on behalf of the Partnership, on the one hand, and the Operating Partner or any Affiliate of the Operating Partner, on the other hand, in an aggregate amount in any Fiscal Year in excess of the Base Affiliate Transaction Amount for such Fiscal Year, other than the transactions, agreements, arrangements or understandings referenced in Section 9.12; (xi) entering into any settlement agreement with respect to any suit, claim, action or proceeding involving payment by the Partnership of an amount in excess of one million dollars ($1,000,000); or (xii) calculating the allocations pursuant to Article V, in the event of a disagreement between the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) and the FRP Partner relating thereto. (b) Notwithstanding the foregoing, if the Policy Committee fails to approve any matter before it in accordance with the terms of Sections 6.04 and 6.05, after discussion in good faith, resolution of such matter shall be referred to the respective Chief Executive Officers ("CEOs") of the Non-Managing Partners at the time such matter is presented for resolution. Except as provided in Section 6.07(c) below, if such CEOs fail to agree on any matter within fourteen (14) days of the date the matter was submitted to them, pending final resolution of the dispute, the Managing Partner shall have the authority to operate the business and affairs of the Partnership in such a manner as it reasonably determines to be necessary in order to maintain the value of the assets of the Partnership or as required to assure compliance with applicable law, including without limitation taking the following actions: (i) establishing annual operating and capital expenditure budgets (including maintenance capital and capital expenditures for Expansion in an aggregate amount in any Fiscal Year not exceeding the Base Obligation Amount for such Fiscal Year); (ii) calculating Distributable Cash and distributing Distributable Cash in accordance with Section 5.07; (iii) (A) shutting down any Material Facilities of the Partnership if, in the good faith judgment of the Managing Partner, such shut down is expected to last more than three (3) months or (B) continuing to keep any Material Facilities of the Partnership shut down (other than a shut down covered by clause (A) above which was properly approved by the Policy Committee or, if not by the Policy Committee, by the CEOs or properly undertaken by the Managing Partner) for a period in excess of three (3) months; or (iv) calculating the allocations pursuant to Article V, in the event of a disagreement between the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) and the FRP Partner relating thereto. (c) Notwithstanding the foregoing Section 6.07(b), in no event shall the Managing Partner take any of the following actions without the prior approval of either the Policy Committee or the CEOs in accordance with Section 6.07(a) or Section 6.07(b), as the case may be: (i) creating any Debt of the Partnership in an aggregate amount at any time outstanding exceeding the Base Obligation Amount applicable at the time when such Debt is incurred; provided that no approval by the Policy Committee or the CEOs will be required for borrowings by the Partnership for working capital purposes pursuant to a credit facility (or a working capital contribution facility) previously approved by the Policy Committee (or, if not by the Policy Committee, by the CEOs); and provided, further that the Partners shall have the right to make Partner Loans to the Partnership in accordance with Section 3.03 without approval of the Policy Committee or the CEOs; (ii) making, or committing to make, any capital expenditures for Expansion in an aggregate amount in any Fiscal Year in excess of the Base Obligation Amount for such Fiscal Year; (iii) making, or committing to make, any Material Asset Sale; (iv) entering into, or modifying or amending in any material respect, any agreement which expressly restricts the Partnership's right to distribute Distributable Cash to the Partners; (v) incurring a Material Obligation (other than Debt permitted to be incurred pursuant to Section 6.07(a)(i)); (vi) approving and determining the amount of any cash contributions by the Partners to be made pursuant to Section 3.02; (vii) entering into, or modifying or amending in any material respect, any transactions, agreements, arrangements or understandings between or on behalf of the Partnership, on the one hand, and the Operating Partner or any Affiliate of the Operating Partner, on the other hand, in an aggregate amount in any Fiscal Year in excess of the Base Affiliate Transaction Amount for such Fiscal Year, other than the transactions, agreements, arrangements or understandings referenced in Section 9.12; (viii) entering into any settlement agreement with respect to any suit, claim, action or proceeding involving payment by the Partnership of an amount in excess of one million dollars ($1,000,000); or (ix) engaging in any activity prohibited by Section 9.05. 6.08 Management of Certain Environmental Liabilities. The Partners agree that after the Closing Date the IMC Partner and the FRP Partner will consult with each other concerning negotiation, remediation and expenditures to be made by the Partnership or the Partners, as the case may be, for the Environmental Liabilities listed on Part I and Part II of Schedule 2.05(iv) to the Contribution Agreement (each a "Retained Environmental Liability"). The Partnership and the Partners agree to provide to the Partner whose Affiliate contributed the Assets to which such Retained Environmental Liability relates (or, in a case in which Operations contributed such Assets, to Operations) (the "Retaining Partner") access to all relevant information on an ongoing basis relating to such Environmental Liability and to enter into discussions in good faith to determine the most efficient use of money by the Partnership or the Retaining Partner, as the case may be, in an effort to ensure the Partnership's continued use of (or other appropriate action agreed to by the Partners with respect to) the Assets to which such Environmental Liability relates. The Partners further agree to permit the Retaining Partner, upon written notification to the other Partners, to directly manage and oversee all negotiations, agreements to remediate and remediation activities relating to any Retained Environmental Liability to the extent the management of such negotiation and remediation will not unreasonably interfere with the day-to-day use of such Assets or result in an unreasonable increase in costs to the Partnership (such cost increases to be reimbursed to the Partnership by such Retaining Partner managing such negotiation and remediation). With respect to any Environmental Liability listed on such Schedule 2.05(iv) that shall be an Assumed Liability, each Partner shall cause the Partnership to act as quickly as is commercially reasonable to complete all required remedial activity. ARTICLE VII. Encumbrance or Transfer of Partnership Interest 7.01 Transfer of Partnership Interest Generally. No Partner may assign, transfer or otherwise dispose of all or any portion of its Partnership Interest except in accordance with the terms of this Article VII. Any attempt by any Partner to assign, transfer or otherwise dispose of all or any portion of its Partnership Interest other than in accordance with this Article VII shall be null, void ab initio and of no force and effect. Notwithstanding any other provision of this Article VII, the transfers of the Partnership Interest of IMC GPCo to Operations executed in connection with the IMC GPCo Liquidation and, in the event that FTX and FRP choose to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) in accordance with the terms of the Amendment, Waiver and Consent Agreement, transfers of the Partnership Interest of the FRP Partner to FRP or an Affiliate of FRP executed in connection with such merger, liquidation or dissolution of the FRP Partner (or such transfer of the Partnership Interests), shall be deemed to have been made in accordance with the terms of this Article VII. 7.02 Transfers of Partnership Interests. (a) Except as otherwise consented to in writing by each of the other Partners, no Partner may sell, transfer or otherwise dispose of all or any portion of its Partnership Interest (collectively "Transfer") unless (i) such Transfer is pursuant to a written agreement pursuant to which the transferee agrees to be bound by all of the terms of this Agreement as if it were originally a party hereto, (ii) such Transfer does not cause a termination of the Partnership for Federal income tax purposes, (iii) the transferring Partner shall have transferred a proportionate amount of its capital stock of the Managing Partner to the transferee of all or a portion of the Partnership Interest as required by Section 7.05 and (iv) such Transfer is in compliance with Section 7.02(b) and Section 7.04. (b) If either the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) or the FRP Partner (in any such case, the "Soliciting Partner") desires to sell or otherwise dispose of to any third party (other than an Affiliate of such Soliciting Partner), or to solicit bids from any third party (other than an Affiliate of such Soliciting Partner) to purchase or otherwise acquire, all or any part of its Partnership Interest (the "Subject Partnership Interest"), such Soliciting Partner shall (i) if the Soliciting Partner is the IMC Partner (or, during the IMC Liquidation Period, Operations or IMC GPCo), notify the FRP Partner in writing of the IMC Partner's desire to sell its Subject Partnership Interest or (ii) if the Soliciting Partner is the FRP Partner, notify the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations and IMC GPCo) in writing of its desire to sell its Subject Partnership Interest. The notice referred to in the preceding sentence is hereinafter referred to as the "Notice of Intent to Sell", and the Partner receiving the Notice of Intent to Sell is hereinafter referred to as the "Notified Partner". For a period (the "No-Shop Period") of thirty (30) days following the date it gives Notice of Intent to Sell, and during the duration of any Negotiation Period (as defined below), neither the Soliciting Partner nor any of its Affiliates, officers, directors, employees, representatives or agents will, without the prior written consent of the Notified Partner, commence or continue any discussions, negotiations or exchanges of information with any Person other than the Notified Partner with respect to the sale of the Subject Partnership Interest. During the No-Shop Period, both the Soliciting Partner and the Notified Partner shall cooperate with each other in exchanging all due diligence materials they deem to be reasonably necessary to determine the price and terms of any potential offer. If the Notified Partner makes a bona fide offer to purchase the Subject Partnership Interest prior to the end of the No-Shop Period, then the Soliciting Partner and the Notified Partner shall negotiate in good faith for the purchase and sale of the Subject Partnership Interest and the No-Shop Period shall be extended for fifteen (15) days (the "Negotiation Period"); provided that a decision to accept or reject shall be in the sole discretion of the Soliciting Partner. If the Notified Partner fails to make a bona fide offer to purchase the Subject Partnership Interest (the making or failure to make such offer being in its sole discretion) prior to the expiration of the No-Shop Period or if the Soliciting Partner and the Notified Partner fail to execute a letter of intent relating to the purchase and sale of the Subject Partnership Interest or terminate negotiations prior to the expiration of the Negotiation Period, then the Soliciting Partner may, but shall not be obligated to, immediately commence discussions, negotiations or exchanges of information with, and/or sell its Subject Partnership Interest to, any third party; provided that if the Notified Partner made a bona fide offer during the No-Shop Period, the Soliciting Partner shall not so sell the Subject Partnership Interest to a third party unless (i) definitive, binding agreements relating to such sale are executed within two hundred twenty (220) days of the expiration of the Negotiation Period, (ii) the cash value of the consideration received in connection with such sale is at least equal to 95% of the cash value of such offer made by the Notified Partner and (iii) the transferee of such Subject Partnership Interest agrees in writing to be bound by the terms of this Agreement as if it had originally been a party hereto. The cash value of such sale and the cash value of such offer by the Notified Partner, respectively, shall be determined by agreement among the Soliciting Partner and the Notified Partner (i) in the case of the cash value of such sale, within ten (10) days following the execution of definitive, binding agreements by the parties relating thereto and (ii) in the case of the cash value of such offer by the Notified Partner, within ten (10) days following the earliest to occur of (A) the termination of negotiations between the Soliciting Partner and the Notified Partner and (B) the expiration of the Negotiation Period, provided that if such agreement is not reached during either of such ten (10) day periods, then, in either such case, such cash value shall be determined by means of the Appraisal Procedure, with the expense thereof to be paid fifty percent (50%) by the Soliciting Partner and fifty percent (50%) by the Notified Partner and with the determination made thereby being final, unappealable, binding on both the Soliciting Partner and the Notified Partner and enforceable in a court of law or equity. After the expiration of such two hundred twenty (220) day period, such Subject Partnership Interest shall again be subject to the terms of this Section 7.02(b). The failure of either the Soliciting Partner or the Notified Partner to exercise its rights under this Section 7.02(b) shall not be deemed to be a waiver of its respective rights under this Section 7.02(b) with respect to subsequent Subject Partnership Interests. 7.03 Liens. None of IMC GPCo (prior to the completion of the Final IMC GPCo Liquidating Distribution), Operations (subsequent to the completion of the Initial IMC GPCo Liquidating Distribution), the FRP Partner (prior to or subsequent to the merger, liquidation or dissolution of the FRP Partner (or the transfer of its Partnership Interests) contemplated by the terms of the Amendment, Waiver and Consent Agreement) or the Managing Partner may, except with the consent of the other Partners (which consent may be granted or withheld in such Partners' sole discretion), create or permit to exist any Lien on its Partnership Interest or any portion thereof or any of the capital stock of the Managing Partner (except (i) Liens for current taxes not delinquent or taxes being contested in good faith and by appropriate proceedings or (ii) Liens arising in the ordinary course of business for sums not due or sums being contested in good faith and by appropriate proceedings). Any attempt by any such Partner to create or permit to exist any Lien (other than the excepted Liens described in this Section 7.03) on its Partnership Interest or any portion thereof shall be null, void ab initio and of no force and effect. Notwithstanding anything to the contrary contained herein, if any Person obtains a Lien on the Partnership Interest of IMC GPCo, Operations, the FRP Partner or the Managing Partner or any portion thereof (during a period during which such a Lien could not be granted to such Person in accordance with the terms of this Section 7.03) and forecloses on such Lien, (i) the Partnership shall continue, (ii) the Person foreclosing on the Lien shall succeed to the economic interests of the Partnership Interest, or portion thereof, upon which it foreclosed but not the voting or other interests which comprise such Partnership Interest, or portion thereof, (iii) the Person foreclosing on such Lien shall not be admitted as a "Partner" without the approval of the Policy Committee or the other Partners, and (iv) any sale or other disposition of the Partnership Interest, or portion thereof, upon which such Person foreclosed shall be subject to the terms of Article VII hereof. 7.04 Transfers Upon Triggering Events. (a) Upon the occurrence of a Triggering Event, the Triggering Partner shall give the other Partners prompt written notice of such Triggering Event (the "Triggering Event Notice"), which notice shall describe the terms and conditions of the transaction giving rise to the Triggering Event. For a period of thirty (30) days following the receipt of the Triggering Event Notice (or, if no Triggering Event Notice is received, at any time after a Triggering Event has occurred), the Non-Triggering Partner (which, during the IMC GPCo Liquidation Period, shall mean both Operations and IMC GPCo, for purposes of this Section 7.04, if the IMC Partner is the Non-Triggering Partner) shall have the right to sell, and, upon the receipt of notice (the "Exercise Notice") of the exercise of such right from the Non-Triggering Partner, the Triggering Partner shall have the obligation to purchase, all but not less than all of the Non-Triggering Partner's Partnership Interest at the Transfer Price applicable to such Triggering Event; provided, however, that (i) if the transaction that gave rise to the Triggering Event involved the sale of all or a portion of the Partnership Interest of the Triggering Partner, the Non-Triggering Partner shall instead have the right to sell all, but not less than all of its Partnership Interest to the purchaser (the "Purchasing Partner") of the Triggering Partner's Partnership Interest and the Purchasing Partner, by its execution and delivery of a counterpart hereof on the closing date with respect to the purchase and sale of the Triggering Partner's Partnership Interest, agrees to purchase the Non-Triggering Partner's Partnership Interest at the Transfer Price applicable to such Triggering Event, (ii) if the Exercise Notice was delivered to the Triggering Partner and the Triggering Partner fails to purchase the Non-Triggering Partner's Partnership Interest within the period specified above, then, without limiting its rights against such party, the Non-Triggering Partner shall then have the right to sell all, but not less than all, of its Partnership Interest to either the Purchasing Partner or the Partnership, and upon receipt of an Exercise Notice, the Purchasing Partner or the Partnership, as the case may be, shall be obligated to purchase the Non-Triggering Partner's Partnership Interest for cash at the Transfer Price applicable to such Triggering Event; and (iii) if the Exercise Notice was delivered to the Purchasing Partner and the Purchasing Partner fails to purchase the Non-Triggering Partner's Partnership Interest within the period specified above, then, without limiting its rights against such party, the Non-Triggering Partner shall then have the right to sell all, but not less than all, of its Partnership Interest to either the Triggering Partner or the Partnership, and upon receipt of an Exercise Notice, the Triggering Partner or the Partnership, as the case may be, shall be obligated to purchase the Non-Triggering Partner's Partnership Interest for cash at the Transfer Price applicable to such Triggering Event. The closing of the sale of the Non-Triggering Partner's Partnership Interest shall occur on or before the sixtieth (60th) day following the receipt of the Exercise Notice by the Triggering Partner, the Purchasing Partner or the Partnership, as the case may be; provided that if the Appraisal Procedure is invoked to determine the Transfer Price, the time periods in this sentence shall be extended to the date which is thirty (30) days following the final determination of the Transfer Price. If a Triggering Event Notice has been delivered and the Non-Triggering Partner does not deliver an Exercise Notice within the thirty (30) day period specified above, the Non-Triggering Partner shall be deemed to have elected not to sell its Partnership Interest. (b) The terms and conditions (other than the method of payment of the Transfer Price) of any sale pursuant to this Section 7.04 shall be customary for transactions of such type; provided that if the event giving rise to this Triggering Event involves a sale of a Partnership Interest, such terms and conditions shall be substantially similar to the terms and conditions of the sale giving rise to the Triggering Event, adjusted as appropriate to reflect differences in the structure of the transactions. The Transfer Price payable in connection with any sale of a Partnership Interest by a Non-Triggering Partner pursuant to this Section 7.04 shall be payable in cash on the date of closing of such sale. If the Transfer Price is determined in accordance with the Appraisal Procedure, the expense thereof is to be paid fifty percent (50%) by the Triggering Partner and fifty percent (50%) by the Non- Triggering Partner. (c) Any sale of a Partnership Interest by a Non-Triggering Partner pursuant to this Section 7.04 shall be accompanied by a corresponding sale of all of the issued and outstanding stock of the Managing Partner then held by such Non-Triggering Partner in accordance with Section 7.05. 7.05 Interests in Managing Partner. Except as provided in this Section 7.05, neither the IMC Partner nor the FRP Partner shall sell, transfer or otherwise dispose of all or any portion of the capital stock of the Managing Partner. If either the IMC Partner or the FRP Partner sells, transfers or otherwise disposes of all or a portion of its Partnership Interest to any Person in accordance with the terms of Section 7.02, then, simultaneously therewith, the Non-Managing Partner making such a transfer shall so sell, transfer or otherwise dispose of a proportionate amount of capital stock of the Managing Partner to such Person. 7.06 Certain Conditions of Certain Transfers. As a condition to the effectiveness of (i) the Initial IMC GPCo Liquidating Distribution, (ii) the Final IMC GPCo Liquidating Distribution, (iii) the FRP GPCo/FCC/FTX Mergers, (iv) the merger, liquidation or dissolution of the FRP Partner (or the transfer of its Partnership Interests) in accordance with the terms of the Amendment, Waiver and Consent Agreement and (v) any related transactions, each Partner hereby agrees to bear, and assume liability for, any expense, cost or loss (including any increase in taxes, other than any increase in income taxes which arises solely from the timing of the reporting of income, deductions and credits attributable to the normal business activities of the Partnership) suffered by the Partnership, any other Partner or any of their Related Persons (as defined below) arising from consummation of the transactions described in (i) to (v) above in violation of the provisions of this Agreement, the Parent Agreement, the Amendment, Consent and Waiver Agreement and the IMC GPCo Plan of Liquidation. ARTICLE VIII. Other Rights of, Duties and Restrictions on the Partners 8.01 Indemnification. All costs, expenses, liabilities, obligations, losses, damages, penalties, proceedings, actions, suits or claims of whatever kind or nature which may be imposed on, incurred by, suffered by, or asserted against the Partnership, any Partner (which term, for purposes of this Article VIII, shall, with respect to the IMC Liquidation Period (and all other periods during which Operations or IMC GPCo is a Partner) refer to each of Operations and IMC GPCo, severally and not jointly) or any Partner's respective Affiliates, directors, officers and employees, in connection with the ownership or management or operation of the business and affairs of the Partnership shall be referred to as "Claims". The Partnership shall indemnify and hold harmless each Partner and their respective Affiliates, directors, officers and employees ("Related Persons") for all Claims other than those caused by such Partner's or such other Related Person's gross negligence, wilful misconduct, wilful breach of this Agreement or failure to follow a specific instruction from the Policy Committee adopted in accordance with the terms of this Agreement; provided that in no event shall the Partnership be required to indemnify any Partner or any of its Related Persons for any Claim arising out of or relating to any Excluded Liability for which such Partner or Related Person is responsible pursuant to the terms of the Contribution Agreement. For purposes of this Agreement, an ignoring of the terms of this Agreement shall be deemed a wilful breach; provided that the Managing Partner shall not be liable for ignoring the term of this Agreement requiring the Managing Partner to act as an ordinary prudent and reasonable manager if the Managing Partner acted in good faith and in the belief (which was reasonable) that its actions were in accordance with all of the terms of this Agreement. In addition to, and not in contravention of, the foregoing, the Partnership shall indemnify and hold harmless each Partner and their respective Related Persons from all Assumed Liabilities and any and all costs, expenses, liabilities, obligations, losses, damages, penalties, proceedings, actions, suits or claims of whatever kind or nature which may be imposed on, incurred by, suffered by, or asserted against any Partner or its respective Related Persons arising out of or in connection with any Assumed Liability. The Leasing Agreement and the Marketing and Administrative Services Agreement shall contain provisions consistent with this Section 8.01. 8.02 Contribution. In the event that any Partner shall pay in good faith or become obligated to pay any proper obligation of the Partnership, such Partner shall be entitled to contributions from the other Partners to the extent necessary so that, after giving effect to such contributions, each Partner shall bear no more than that part of such obligation which corresponds to its respective Capital Interest at the time of the occurrence, circumstances, events or conditions giving rise to the obligation. 8.03 Continuing Liability of Withdrawn Partner. In the event of the withdrawal of a Partner from the Partnership by reason of the transfer of its entire Partnership Interest in accordance with the provisions of this Agreement, or in violation of this Agreement, such withdrawn Partner shall remain liable as a general partner with respect to all obligations of the Partnership incurred or accrued on or prior to the date of withdrawal (but shall not have liability for obligations of the Partnership incurred or which accrue subsequent to the date of withdrawal). If the Partnership is continued without dissolution, or reconstituted and continued, following the withdrawal of any Partner, in either case in accordance with the terms of this Agreement, the withdrawn Partner shall be entitled only to the payments expressly provided for in this Agreement and shall not be entitled to any other or further payments from the Partnership or any other Partner. Further, in such circumstances, the withdrawn Partner shall have no right to cause the winding up or liquidation of the business or assets of the Partnership, and neither the Partnership nor any Partner shall, as a condition to the continuation or reconstitution of the Partnership, be required to post any bond in favor of, or indemnify, the withdrawn Partner as regards past, present or future liabilities or otherwise. 8.04 Breach of Parent Agreement. For purposes of this Agreement, (i) a breach by FTX or FRP of the terms of the Parent Agreement shall constitute a breach of this Agreement by the FRP Partner and (ii) a breach by Global or Operations of the terms of the Parent Agreement shall constitute a breach of this Agreement by the IMC Partner. ARTICLE IX. Certain Operational Provisions 9.01 Financial, Accounting, and Banking Matters. (a) The Fiscal Year of the Partnership shall begin on July 1 and end on June 30 of each year of the Partnership. (b) The auditors of the Partnership shall be Ernst & Young or such other independent certified public accounting firm of recognized national standing selected by the Policy Committee in accordance with the terms of Sections 6.04 and 6.05, or if the Policy Committee fails to so approve such a selection, then by the CEOs or the Managing Partner, as the case may be, in accordance with the terms of Section 6.07(b). (c) The Partnership shall establish bank accounts at such banks as may from time to time be designated by the Managing Partner. The Partnership's funds shall be invested in such manner as the Managing Partner deems appropriate. All bank and other accounts shall be maintained in the Partnership's name. None of the Partnership's funds shall be commingled with the funds of any Partner unless previously approved in writing by the other Partners. 9.02 Budget and Approval Authorities. (a) The Managing Partner shall have the sole and exclusive authority and responsibility to present annual operating and capital budgets and quarterly updates of such budgets to the Policy Committee for its approval, such quarterly updates to present information on a month-by-month basis. As soon as available, but not later than forty (40) days prior to the end of each Fiscal Year, the Managing Partner shall, at a special meeting of the Policy Committee called for such purpose, present to the Policy Committee the operating and capital expenditure budgets for the succeeding Fiscal Year. The Policy Committee shall review such proposed budgets and shall either approve the proposed budgets or negotiate in good faith with the Managing Partner to adopt mutually acceptable budgets for such succeeding Fiscal Year. As soon as available, but not later than sixty (60) days after the end of a Fiscal Year and each quarter of the succeeding Fiscal Year, the Managing Partner shall, at a special meeting of the Policy Committee called for such purpose, present to the Policy Committee the operating and capital expenditure budget updates for the remaining portion of the then current Fiscal Year. The Policy Committee shall review such proposed budget updates and shall either approve the proposed budget updates or negotiate in good faith with the Managing Partner to adopt mutually acceptable budget updates for the remaining portion of the then current Fiscal Year. If the Policy Committee adopts budgets for a Fiscal Year or any portion thereof, the Managing Partner shall use all commercially reasonable efforts to operate and manage the business and affairs of the Partnership in accordance with such budgets (or, if the Policy Committee fails to so adopt such budgets in accordance with the terms of Sections 6.04 and 6.05 and if such budgets are instead adopted by the CEOs or the Managing Partner, as the case may be, in each case in accordance with the terms of Section 6.07(b), then in accordance with such budgets). (b) The Managing Partner shall have the sole and exclusive authority and responsibility to present five (5) year operating and financial forecasts for the Partnership to the Policy Committee; provided that if the Managing Partner has not presented such a five (5) year operating and financial forecast to the Policy Committee on or before the sixtieth (60th) day of any Fiscal Year for the succeeding five (5) years, the Managing Partner shall provide the Non-Operating Partner with access to the Managing Partner's operating and financial personnel and shall cause such operating and financial personnel to assist the Non-Operating Partner in preparing a five (5) year operating and financial forecast for the Partnership. 9.03 Insurance. The Managing Partner shall have the authority and responsibility to take whatever action (not inconsistent with the terms hereof) it determines in good faith to be necessary or appropriate to preserve and protect the assets of the Partnership, including, without limitation, by procuring, for the account of the Partnership, such insurance against such hazards and liabilities as the Managing Partner deems appropriate in light of prudent industry practice. All such insurance, whether maintained by the Managing Partner, Operations or FRP for the benefit of the Partnership, may be in the name of any Partner, Operations, FRP or the Partnership so long as each insurance policy names the Partnership and each Partner as either the "insured party" or an "additional insured party" and waives subrogation in favor of each such party. Such insurance coverage may be subject to such self-insurance, deductibles and limits as the Managing Partner deems appropriate. If requested by the Managing Partner, either of the Non-Managing Partners or their respective parent entities shall cooperate with the Managing Partner in designing and maintaining a risk management program which insures the Partnership against such hazards and liabilities as the Managing Partner deems appropriate, provided that if the Managing Partner requests either of the Non-Managing Partners or their Affiliates to maintain insurance in the name of the Partnership, the Partnership shall reimburse such Non-Managing Partner or such Affiliates for all of the direct costs and expenses incurred in connection with the maintenance of such insurance. In addition to the insurance provided for the benefit of the Partnership under this Section 9.03, each Partner and its Affiliates shall have the right to purchase such other insurance as it deems prudent to cover its respective interest in the Partnership; provided that all costs and expenses incurred in connection with the maintenance of such insurance shall be paid by such Partner and provided that such insurance shall not have the effect of restricting the amount or availability of insurance maintained by the Partnership. Should any Partner or their Affiliates with respect to the Partnership purchase such other insurance, such other insurance shall waive rights of subrogation against the other Partners, the Partnership and their Affiliates. 9.04 Financial and Other Information. The Managing Partner shall deliver or cause to be delivered to each Partner: (a) as soon as available, but not more than twenty (20) days (or, in the case of June, forty-five (45) days) after the end of each month during the term of the Partnership, (i) a statement of the Distributable Cash and Capital Proceeds of the Partnership for the preceding month and (ii) an estimate of the Distributable Cash and Capital Proceeds of the Partnership for the remaining months of the current quarter and for the entire succeeding quarter of the Partnership; (b) as soon as available, but not more than twenty (20) days (or, in the case of June, forty-five (45) days) after the end of each month in each Fiscal Year during the term of the Partnership, the following reports of the Partnership: (i) a Partnership consolidation (i.e. trial balance) for the preceding month, (ii) a plant operating statement showing expenditures by cost center and cost element compared with the budget for the preceding month and year-to-date, (iii) a capital spending status report; (c) as soon as available, but not more than twenty (20) days (or, in the case of June, forty-five (45) days) after the end of each month in each Fiscal Year during the term of the Partnership, (i) an unaudited Balance Sheet of the Partnership as at the end of the preceding month, (ii) the unaudited related Statement of Income of the Partnership, which shall include sales volumes, revenues and margins by product, for the preceding month and for the Fiscal Year-to-date and (iii) the unaudited related Statement of Cash Flow of the Partnership for the preceding month and for the Fiscal Year-to-date, it being understood that in the case of clauses (ii) and (iii) such statements are to be presented setting forth in each case in comparative form the corresponding figures for the corresponding period of the previous Fiscal Year and the plan for the current Fiscal Year, all in reasonable detail and in accordance with generally accepted accounting principles applied on a basis consistent with such prior fiscal periods (except as otherwise specified in such report); (d) as soon as available, but not more than twenty (20) days (or, in the case of June, forty-five (45) days) after the end of each month in each Fiscal Year during the term of the Partnership, an analysis of the performance of the Partnership; (e) as soon as available, but in any event within thirty (30) days after the end of each quarter of each Fiscal Year during the term of the Partnership a report providing the financial and operating data for inclusion in the Partners' Affiliates' respective reports on Form 10-K or Form 10-Q (or any successor reports or forms thereof) required to be filed with the SEC as of the end of such quarter; (f) as soon as available, but in any event within ninety (90) days after the end of each Fiscal Year during the term of the Partnership, an audited Balance Sheet as at the end of such Fiscal Year and the related Statements of Income and Cash Flow of the Partnership for such Fiscal Year, setting forth in each case in comparative form, the figures for the previous Fiscal Year of the Partnership, all in reasonable detail, with applicable footnotes and accompanied by a report thereon of Ernst & Young or such other independent public accountants of recognized national standing selected by the Partnership in accordance with the terms of Section 9.01(b), which report shall state whether in its opinion, such financial statements present fairly in all material respects the financial position of the Partnership as at the dates indicated and the results of its operations and cash flows for the periods indicated, in conformity with generally accepted accounting principles; (g) promptly upon obtaining knowledge of any audit item involving disclosure or any material accounting issue, written notification of such disclosure or accounting issue; (h) within sixty (60) days after the end of each Fiscal Year during the term of the Partnership, a certificate of an officer of the Managing Partner describing the material terms of all transactions between the Partnership and Affiliates of the Operating Partner during the preceding Fiscal Year; (i) within twenty (20) days of the end of each calendar year, the information that FRP and FTX reasonably request in order for FRP and FTX to comply with the provisions of FASB 109; and (j) promptly, any other financial reports delivered to the Operating Partner's parent entity. 9.05 Qualifying Income. (a) The Partnership shall not, without the written consent of the FRP Partner, generate income other than Qualifying Income. The Managing Partner shall take any action required to operate the Partnership in a manner consistent with the requirement of this Section 9.05(a). (b) The Managing Partner shall provide the FRP Partner, on a monthly basis, with the information and data reasonably necessary for the FRP Partner to determine whether the requirement of Section 9.05(a) will be met for the Partnership's taxable year. The Managing Partner shall also provide the FRP Partner, on a timely basis, with the information and data reasonably necessary to determine whether any Major Decision defined in Section 6.07(a)(ii) or Section 6.07(a)(iv) will result in the failure of the Partnership to meet the requirement of Section 9.05(a) for any taxable year of the Partnership. Upon providing the FRP Partner with information and data with respect to any current or proposed source of Partnership income reasonably sufficient for FRP to determine whether such income is or will be Qualifying Income, the Managing Partner may request that the FRP Partner consent to the Partnership's generation of such income. The FRP Partner shall respond in writing to any such request in a timely manner and any consent so expressed shall constitute consent by the FRP Partner to the generation of such income for purposes of Section 9.05(a), subject to any limitation on the amount or timing thereof stated in such consent. If the FRP Partner does not respond in writing to the Managing Partner's request within twenty-five (25) days of the receipt of such request, the FRP Partner shall be deemed to have consented to the Partnership's generation of such income for purposes of Section 9.05(a). (c) In the event that (i) the Partnership fails (or based on all available information, the FRP Partner reasonably believes the Partnership may fail) to meet the requirement of Section 9.05(a) for any taxable year or (ii) there is an amendment to Section 7704 of the Code, the issuance of a Treasury Regulation pursuant to Section 7704 of the Code, the amendment of any other Code Section, or the issuance of any other Treasury Regulation or pronouncement that, in the reasonable belief of the FRP Partner, may affect the partnership status of the FRP Partner or FRP for Federal income tax purposes, the Policy Committee shall meet to determine what actions would be required to preserve the partnership status of the FRP Partner and FRP for Federal income tax purposes. If the Policy Committee determines (or, if the Policy Committee fails to agree, if either the IMC Partner or the FRP Partner reasonably and in good faith determines) that the Partnership cannot be operated in a manner that is consistent with achieving the Partnership's business purpose other than in a manner that is inconsistent with preserving the partnership status of the FRP Partner and FRP for Federal income tax purposes, the Partners agree to negotiate in good faith to determine the appropriate action to be taken. In the event that the IMC Partner and the FRP Partner are unable to agree on the action to be taken after negotiating in good faith, each of the IMC Partner and the FRP Partner shall have the right to elect to dissolve the Partnership. It is acknowledged that none of the Partners is obligated to take any action, and the Partnership is not obligated to take action, that is harmful to any Partner or its Affiliates, other than the dissolution of the Partnership. 9.06 Work Force; Employee Benefits. (a) The Managing Partner shall supply, for the account of the Partnership, the necessary work force for the conduct of the business and affairs of the Partnership. The work force to be provided shall include but shall not be limited to qualified miners, engineers, metallurgists, geologists, assayers, equipment operators, helpers, mechanics, accountants, attorneys, purchasing agents, sales personnel and support staff, together with necessary supervisory and management personnel, and shall include, as necessary, the services of the Leased IMC Employees. Consistent with approved budgets, all members of the work force employed by the Managing Partner for the purpose of providing services to the Partnership shall be paid such salaries, hourly wages and benefits and shall be subject to such other terms and conditions of employment as the Managing Partner deems appropriate subject to the following sentence of this Section 9.06. The Managing Partner shall be reimbursed (in accordance with Section 9.11) for the cash costs (i) incurred under the Leasing Agreement in connection with the Leased IMC Employees including, but not limited to, salaries and wages; social security taxes and payroll taxes; contributions to the IMC Salaried Pension Plan and the Retirement Plan for Non-Union Hourly Employees of IMC Fertilizer, Inc. and contributions to the IMC Salaried Contribution Plan and the Savings Plan for Hourly Employees of IMC Fertilizer, Inc.; any employee benefits other than those described above, including, but not limited to, benefits under any employee benefit plan (as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended) or any retirement or deferred compensation plan, stock plan, unemployment compensation plan, vacation pay, severance pay, bonus or benefit arrangement, insurance or hospitalization program or any other fringe benefit arrangement which does not constitute an employee benefit plan, or any employment agreement, post-retirement benefits, severance benefits or other employee benefits for former Leased IMC Employees; and other governmental charges relating to such employment; and (ii) of hiring and employing, including, without limitation, (A) the cost of all social security taxes, payroll taxes, post-retirement benefits of former Managing Partner employees, other employee benefits and other governmental charges related to such employment to the extent that the cost thereof is associated with personnel employed or formerly employed at production facilities as reflected, consistent with Operations' historic practices, in the cost of goods sold income statement caption and (B) the costs attributable to employees providing management information services, public relations and internal audit services provided directly to production facilities and limited to those amounts reflected, consistent with Operations' historic practices, in the cost of goods sold income statement caption. To the extent that such personnel costs described at clause (ii) above are included, consistent with Operations' historic practices, in the selling and administrative expense income statement caption for financial reporting purposes, such costs shall be covered by the Administrative Fee described in Section 9.11 and shall not be separately reimbursed or paid by the Partnership. (b) Subject to the terms and conditions of the Contribution Agreement and to the extent permitted by applicable law, the Managing Partner shall maintain employee benefit plans (as defined in section 3(3) of ERISA) and retirement or deferred compensation plans, unemployment compensation plans, vacation pay, severance pay, bonus and benefit arrangements, insurance and hospitalization programs and any other fringe benefit arrangements for current and former employees, consultants and agents (whether pursuant to contract, arrangement, custom or informal understanding) which do not constitute employee benefit plans (collectively, "Employee Benefit Plans") which are substantially similar in all material respects to such plans, arrangements and programs maintained from time to time by Operations, and shall modify the provisions of the MP Pension Plans, MP Contribution Plans and MP Benefit Plans to the extent changes are made to the corresponding plan, contract or arrangement maintained by Operations (the "IMC Plans") to the extent such changes to the IMC Plans are commercially reasonable; provided, however, that nothing in this Section 9.06(b) shall require the Managing Partner to maintain any plan, arrangement or program for any employee who is covered by a collective bargaining agreement, except to the extent provided by such collective bargaining agreement. 9.07 Emergency Expenditures; Compliance with Law. (a) If at any time as a result of any event there arises an emergency where the Managing Partner determines that failure to take prompt action may result in loss of life or material personal injury or property damage, the Managing Partner shall have the authority and responsibility to take such action and make such immediate expenditures as the Managing Partner may deem necessary to protect against loss of life, personal injury or damage to or destruction of property, to safeguard lives and/or prudently preserve and protect the optimum economic value of the assets of the Partnership; provided that as soon as reasonably practicable following the occurrence of such an emergency, the Managing Partner shall notify the other Partners of the nature of the emergency and the actions taken in response to such emergency. (b) The Managing Partner shall have the authority and responsibility to take such action and make such immediate expenditures as it may deem necessary to manage and operate the business and affairs of the Partnership in compliance with applicable law; provided that if time permits, the Managing Partner shall seek the approval of the Policy Committee prior to making any expenditure pursuant to this Section 9.07(b) which would otherwise have required such approval, and, if time does not so permit, will promptly report such action or expenditures to the Policy Committee. (c) Any expenditure made pursuant to this Section 9.07 shall be deemed to constitute an approved expenditure without the need or necessity for any action or approval by the Policy Committee and shall not be included in determining whether the Managing Partner is managing the business and affairs of the Partnership within the operating and capital expenditure budgets approved or adopted as described in Section 9.02 hereof. 9.08 No Action Contrary to Contracts or Applicable Law. The Managing Partner agrees to use all commercially reasonable efforts not to do or fail to do any act if it in good faith believes not doing or failing to do such act is likely to result, or with the giving of notice and/or the passage of time is likely to result, in (a) a default under the terms of any mortgage, bond, indenture, agreement, lease or other instrument or obligation to which the Partnership is a party or by which its properties or assets may be bound; or (b) the violation of any law, rule, regulation or ordinance or any judgment, order, injunction, decree or award of any court, administrative agency or governmental body against, or binding upon, the Partnership or its properties or assets; provided, that, in the case of clause (a) above, the covenant of the Managing Partner shall not apply if compliance therewith would require the Managing Partner to make any capital or other expenditures which are not provided for in an operating or capital expenditure budget adopted by the Policy Committee (or by the CEOs or the Managing Partner, as the case may be, pursuant to Section 6.07(b)), or otherwise approved by the Policy Committee or by the CEOs or the Managing Partner in accordance with the terms of this Agreement and, in the case of clause (b) above, any action or failure to act by the Managing Partner taken to comply with the covenant shall be deemed to be within its authority set forth in Section 9.07(b) and (c) hereof. The Managing Partner shall promptly notify the Policy Committee in writing of (i) the occurrence of any material default of which it has knowledge under the terms of any mortgage, bond, indenture, agreement, lease or other instrument or obligation to which the Partnership is a party or by which its properties or assets may be bound, (ii) any material violation of which it has knowledge of any law, rule, regulation or ordinance or any judgment, order, injunction, decree or award of any court, administrative agency or governmental authority insofar as such violation relates to the Managing Partner, any Partner or the Partnership, and (iii) any event which, with the delivery of notice or the passage of time, or both, in the good faith belief of the Managing Partner is likely to result in an event described in clause (i) or (ii). The Managing Partner shall cause the Partnership to use all commercially reasonable efforts to promptly cure or remedy any such event within its control and for which it is responsible hereunder; provided, that in the case of a cure or remedy relating to a default described in clause (a) of the first sentence of this Section 9.08, the covenant of the Managing Partner shall not apply if compliance therewith would require the Partnership to make any capital or other expenditures which are not provided for in an operating or capital expenditure budget adopted by the Policy Committee (or adopted by the CEOs or the Managing Partner, as the case may be, pursuant to Section 6.07(b)), or otherwise approved by the Policy Committee or by the CEOs or the Managing Partner in accordance with the terms of this Agreement and, in the case of a cure or remedy relating to a violation described in clause (b) of the first sentence of this Section 9.08, any such cure or remedy shall be deemed to be within the Managing Partner's authority set forth in Section 9.07(b) and (c) hereof. The Managing Partner shall represent the Partnership in any proceeding (whether formal or informal) relating to any such event. At all times the Managing Partner shall keep the Non-Managing Partners informed of the current status and all significant developments in all such proceedings or matters. 9.09 Licenses and Permits. The Managing Partner shall use all commercially reasonable efforts to procure and maintain, for the account of the Partnership, all licenses, permits and other governmental authorizations necessary or appropriate to operate the Partnership. The Managing Partner shall notify the Non-Managing Partners promptly of any denial, suspension or revocation of any material permit, license or governmental authorization and of any other action or failure to act by any governmental authority which relates to permits or licenses for the Partnership or significantly affects the operations of the Partnership. 9.10 Litigation. The Managing Partner may, in its commercially reasonable discretion, bring suit in the name or on behalf of the Partnership without the approval of the Policy Committee. The Managing Partner shall at all times keep the Non-Managing Partners informed of the current status and all significant developments in any such suit. 9.11 Payment and Reimbursement of Expenses; Handling of Partnership Bank Accounts and Funds. (a) The Partnership shall establish bank accounts at such banks as may from time to time be designated by the Managing Partner. The Partnership's funds shall be invested in such manner as the Managing Partner deems appropriate with interest accruing to the Partnership. All bank and other accounts shall be maintained in the Partnership's name. None of the Partnership's funds shall be commingled with the funds of any Partner unless previously approved in writing by all of the other Partners. The Partnership shall designate a representative of the Managing Partner as a signatory on its bank accounts to accomplish more effectively the purposes of this Section 9.11. (b) During the regular course of business, the Managing Partner will invoice customers on behalf of the Partnership for all sales of the business of the Partnership. The customers for such sales will be instructed to direct their cash remittance directly to a Partnership bank account designated by the Managing Partner. (c) The Partnership shall pay all costs, expenses, liabilities, losses, damages, penalties and other obligations of the Partnership. In furtherance thereof, the Managing Partner will maintain in the name of the Partnership one or more Partnership cash disbursement accounts for the purpose of paying all such obligations of the Partnership. These disbursements include all payments to third parties, payments to the Partners for expenses incurred on behalf of the Partnership as well as payments to the Partners of their share of Distributable Cash. The disbursements shall cover all capital as well as operating outlays of the Partnership. (d) The Partnership shall pay to the Managing Partner, out of Partnership funds, an annual fee (the "Administrative Fee") intended to compensate the Managing Partner for selling and administrative expenses (determined on a basis consistent with Operations' historic practice with respect to its Contributed Business) incurred by the Managing Partner in connection with the operation and management of the business and affairs of the Partnership or the performance of the Managing Partner's obligations hereunder. One-twelfth of the Administrative Fee shall be payable monthly in advance on the first day of each month during the term of the Partnership. The Administrative Fee shall initially be thirty-four million, three hundred thousand dollars ($34,300,000) and (i) shall be adjusted on June 30, 1994 and each June 30 thereafter during the term of the Partnership in accordance with the following sentence, and (ii) may be adjusted by the Policy Committee upon the request of any Partner if the manner in which the Managing Partner manages and operates the business and affairs of the Partnership changes in such a way that the Administrative Fee (as adjusted in accordance with the following sentence) no longer accurately reflects the selling and administrative practices employed by the Managing Partner in connection with the operation and management of the business and affairs of the Partnership and the performance of its obligations hereunder. The Administrative Fee for any Fiscal Year commencing with the Fiscal Year commencing July 1, 1994 shall be equal to either (x) the sum of (i) the Administrative Fee in effect for the immediately preceding Fiscal Year, plus (ii) the product of (A) the percentage change in the GNP Deflator Index for the immediately preceding Fiscal Year, multiplied by (B) the Administrative Fee for the immediately preceding Fiscal Year or (y) an amount determined by the Policy Committee pursuant to clause (ii) of the immediately preceding sentence. It is agreed among the Partners that all expenses and costs relating to FRP Transferred Sales Employees are included in the Administrative Fee and that no additional payment or reimbursement shall be made from the Partnership to the Managing Partner on account of such employees. (e) The Partnership shall reimburse the Managing Partner for all cash personnel costs, as set forth in Section 9.06. Additionally, any other expenditures incurred by the Managing Partner in connection with the business and affairs of the Partnership or the performance by the Managing Partner of its obligations hereunder in accordance with the terms of this Agreement, as generally described in the operating budget of the Partnership, and which constitute part of cost of goods sold and not paid directly from Partnership funds will be reimbursed by the Partnership. (f) To the extent the Managing Partner determines that an advance of monies from the Partners to the Partnership is necessary (other than under the Working Capital Contribution Arrangement), the Managing Partner shall request that the Policy Committee call for cash contributions from the Partners in accordance with Section 3.02(a). (g) The Managing Partner shall be entitled to access, as needed, the funds of the Partnership in order to pay expenses, including, but not limited to, payroll expenses of the Managing Partner, for which the Managing Partner is entitled to reimbursement pursuant to Section 9.11(e). (h) Notwithstanding anything herein to the contrary, the Partnership shall not be obligated to pay, advance to or reimburse the Managing Partner for, any costs or expenses pursuant to this Section 9.11 if such cost or expense was incurred by the Managing Partner otherwise than in compliance with this Agreement. (i) All payments provided for in this Section 9.11 shall be made on or before the due date, and if not paid, the unpaid balance shall bear interest from and after the due date at the rate equal to the lower of: (i) the maximum rate allowed by law and (ii) the Prime Rate. 9.12 Transactions with Affiliates. Except with respect to items (i)(B) and (ii) referred to in the parenthetical phrase in the following sentence, any transaction, agreement, arrangement or understanding between or on behalf of the Partnership, on the one hand, and the Operating Partner or any Affiliate of the Operating Partner, on the other hand, must be on terms no less favorable to the Partnership than those which could be obtained from an independent third party providing similar goods or services of like quality. All such transactions, agreements, arrangements and understandings in an aggregate amount in any Fiscal Year in excess of the Base Affiliate Transaction Amount for such Fiscal Year (other than (i) during any period during which the IMC Partner is Operating Partner, (A) any transactions, agreements, arrangements or understandings with Operations' railcar repair business located at Fitzgerald, Georgia on terms no less favorable to the Partnership than those which could be obtained from an independent third party providing similar goods or services of like quality and (B) any transactions, agreements, arrangements and understandings with the Rainbow Division of Operations and International Minerals & Chemical (Canada) Global Limited ("IMC Canada Ltd."; formerly International Minerals & Chemical Corporation (Canada) Limited) on the terms set forth on Schedule 9.12 and (ii) (A) the Marketing and Administrative Services Agreement, (B) the Leasing Agreement, (C) the Materials Purchase and Cost Sharing Agreement, (D) the Employee Cost Sharing Agreement and (E) the Limestone Cost Sharing Agreement) shall be subject to the approval of the Policy Committee or the CEOs, as the case may be, in accordance with Section 6.07(a) or (b). Nothing in this Section 9.12 shall in any way restrict or affect the right of the Partnership to enter into transactions with Affiliates of the Non-Operating Partner. The Operating Partner will, and will cause its Affiliates to (i) give the Non-Operating Partner and its auditors and other authorized representatives such access to the offices, properties, books and records of such party, (ii) furnish to the Non-Operating Partner and its auditors and other authorized representatives such financial and operating data and other information as such Persons may reasonably request and (iii) instruct its employees and auditors to cooperate with the Non-Operating Partner and its auditors and other authorized representatives, in each case as may be reasonably requested by the Non-Operating Partner to evaluate any transactions, agreements, arrangements or understandings between the Partnership or the Managing Partner on the one hand, and the Operating Partner and its Affiliates, on the other hand; provided that any investigation pursuant to this Section shall be conducted in such a manner as not to interfere unreasonably with the conduct of business of the Operating Partner and its Affiliates. 9.13 No Shifting of Cash Flow. The Partners acknowledge that due to the changes in the Partners' Current Interests and Capital Interests over time, either the IMC Partner or the FRP Partner could be disproportionately benefited or adversely affected by actions designed to defer or accelerate Partnership revenues, defer or accelerate Partnership expenses or capital expenditures or defer or accelerate Partnership cash flow. The Managing Partner agrees that it will not operate the Partnership with the intention of deferring or accelerating cash flows from one period to another; provided that nothing in this Section 9.13 shall prevent the Managing Partner from managing the business and affairs of the Partnership in accordance with the then current operating and capital expenditure budgets or taking actions to serve the interests of the Partnership without regard to changes in the Current Interests and Capital Interests of the Partners. ARTICLE X. Accounting Records; Tax Matters 10.01 Books and Records. The Managing Partner shall cause the Partnership to prepare and maintain proper and complete records and books of account, separate from the books and records of the Managing Partner maintained for activities unrelated to the Partnership, in which shall be entered all transactions and other matters relative to the Partnership and the operation and management of the Partnership and its business as are usually entered into records and books of account maintained by Persons engaged in businesses of like character. The books and records of the Partnership shall be maintained at its principal place of business. The books of the Partnership shall be maintained for financial reporting requirements in accordance with generally accepted accounting principles. The Partnership shall also maintain such tax basis books as are required for the Partnership and the Partners to comply with the provisions of FASB 109. The Partnership shall provide such financial and other statements, including plans, forecasts and projections, as each Partner may reasonably require for purposes of estimating taxes or projecting the amount and source of future taxable income or loss. 10.02 Inspection of Books and Records. Each of the IMC Partner (and, during the IMC GPCo Liquidation Period, each of Operations and IMC GPCo) and the FRP Partner, at its own expense, shall have reasonable access to the auditors of the Partnership and shall have the right to inspect such books and records and the physical properties of the Partnership during normal business hours and to cause an audit thereof; provided that if either of the IMC Partner (or, during the IMC GPCo liquidation Period, Operations or IMC GPCo) or the FRP Partner requests access to the Partnership's auditors, desires to inspect the books, records and physical properties of the Partnership or desires to cause an audit of the Partnership's books, records and physical properties, such Partner shall provide prior written notice to the Managing Partner; and provided, further, that, unless required by applicable law or unless such Partner reasonably believes that it needs some or all of the information which would be obtained in an audit in order to satisfy its duties and obligations to its shareholders or partners or to the shareholders or to the partners or unitholders of Global or FRP, as the case may be, no more than one such audit may be requested during any twelve (12) month period and each such audit shall be made, if at all, within twenty-four (24) months of the end of the fiscal period to which it relates. All meetings with the Partnership's auditors and inspections of the Partnership's books, records and physical properties shall be conducted in a manner and at a time designed not to cause undue inconvenience to the Managing Partner. The Managing Partner, however, shall (i) not unreasonably delay such audit, (ii) make all books and records of the Partnership available to the auditors in connection with such audit and (iii) use all commercially reasonable efforts to cause its personnel to cooperate with the auditors in a commercially reasonable manner and to provide any assistance reasonably necessary in connection with such audit. Any Partner shall be permitted to make financial and other information relating to the business and affairs of the Partnership available to third parties in connection with any proposed sale or other disposition of all or a portion of its Partnership Interest in accordance with the terms of this Agreement, provided such third parties have signed appropriate confidentiality agreements with such Partner and the Partnership. 10.03 Accounting and Taxable Year. Subject to Section 448 of the Code and the provisions of this Agreement, the books of the Partnership (and the classification, realization and recognition of income, gain, losses, deductions and other items for Federal income tax purposes) shall be kept and determined on such method of accounting for tax and financial reporting purposes as may be determined by the Managing Partner. The taxable year of the Partnership shall end on such date permitted under the Code as the Partners shall determine. 10.04 Partnership Tax Returns. The Managing Partner shall use its best efforts to cause the Partnership to timely file all necessary federal, state, and local Partnership income tax returns and information returns. Each Partner shall provide such information, if any, as may be required by the Partnership for purposes of preparing such tax and information returns. The Partnership's income tax returns shall be provided to the Non-Operating Partner in sufficient time for the Non-Operating Partner to confer with the Managing Partner before the time at which such Partnership return must be filed. The Partnership shall deliver to each Partner, within twenty-five (25) days after the end of the Partnership taxable year any additional information in the possession of the Partnership that the Partners may reasonably require for the preparation of their own income tax returns. 10.05 Partnership Taxes. The Managing Partner shall cause the Partnership to timely pay all taxes and assessments levied or assessed against the Partnership or its assets. However, the Managing Partner may cause the Partnership to either (i) contest in good faith the validity of any such taxes or assessments or (ii) pay such taxes and assessments under protest. In the event that the Managing Partner causes the Partnership to contest in good faith such taxes and assessments, the Managing Partner shall not be obligated to cause the Partnership to pay the same until a final determination is reached that such taxes or assessments are valid and constitute an obligation of the Partnership. 10.06 Tax Matters Partner. The Managing Partner shall be the "tax matters partner," as that term is defined in Code Section 6231(a)(7) (the "Tax Matters Partner") with all of the rights, duties, and powers provided for in Code Sections 6221 through 6232 inclusive; provided, however, that, in the exercise of such powers, the Tax Matters Partner shall be subject to the overall direction of the Partners and the provisions of Sections 10.05, 10.06 and 10.07. The Tax Matters Partner, as an authorized representative of the Partnership, shall have the right to retain and to pay the fees and expenses of counsel and other advisors selected by the Tax Matters Partner. All reasonable expenses of the Tax Matters Partner and other reasonable fees and expenses of the Partnership incurred in connection with the defense of any claims made by the Internal Revenue Service shall be borne by the Partnership. 10.07 Duties of the Tax Matters Partner. The Tax Matters Partner shall cooperate with the other Partners and, for other than routine correspondence and communications, shall promptly provide the other Partners with copies of notices or other materials from, and inform the other Partners of discussions engaged in with, the Internal Revenue Service and shall provide the other Partners with notice of all scheduled administrative proceedings, including meetings with Internal Revenue Service agents, technical advice conferences and appellate hearings, as soon as reasonably possible after receiving notice of the scheduling of such proceedings. The Tax Matters Partner shall not agree to extend the period of limitations for assessments, file a petition or complaint in any court, file a request for an administrative adjustment of Partnership items after any return has been filed, or enter into any settlement agreement with the Internal Revenue Service or Department of Treasury with respect to Partnership items of income, gain, loss, deduction or credit except with the consent of the IMC Partner (or, with respect to the IMC GPCo Liquidation Period, Operations and IMC GPCo) and the FRP Partner, which consent shall not be unreasonably withheld. The Tax Matters Partner may request extensions to file any tax return or statement without the consent of, but shall so inform, the IMC Partner (or, with respect to the IMC GPCo Liquidation Period, Operations and IMC GPCo) and the FRP Partner. The provisions of this Agreement regarding the Partnership's tax returns shall survive the termination of the Partnership and the transfer of any Partner's Partnership Interest and shall remain in effect for the period of time necessary to resolve any and all matters regarding the Federal, state and local income taxation of the Partnership and the items of Partnership income, gain, loss, deduction and credit. 10.08. Partnership Status; Elections. (a) The Partners acknowledge that this Agreement creates a partnership for Federal and state income tax purposes and hereby agree not to elect to be excluded from the application of Subchapter K of Chapter 1 of Subtitle A of the Code or any similar state statute. (b) The Managing Partner shall cause the Partnership to file an election under Section 754 of the Code and the Treasury Regulations thereunder to adjust the basis of the Partnership assets under Sections 734(b) or 743(b) of the Code and shall file a corresponding election under the applicable sections of state and local law. The Managing Partner shall also cause the Partnership to take or to elect to take deductions under the most accelerated method available to the Partnership, unless both the IMC Partner (or, with respect to the IMC GPCo Liquidation Period, Operations and IMC GPCo) and the FRP Partner agree otherwise. The Partnership shall make any other elections under the United States income tax laws and regulations and any similar state statutes as determined to be appropriate by the Managing Partner. 10.09. Tax Reporting. (a) The Managing Partner shall provide the Non-Operating Partner with any tax information and data reasonably requested by the Non-Operating Partner, including information and data requested for the purpose of allowing the Non-Operating Partner to (i) allocate its Partnership tax items on a property-by-property basis; and (ii) allocate FRP's portion of Partnership tax items to any partner of FRP that purchases or sells its interest in FRP during the year, pursuant to Section 706 of the Code and FRP's accounting conventions for sales and purchases of FRP interests. For purposes of this Section 10.09, the term "property" shall mean, with respect to depletable assets, property as defined in Section 613 of the Code and the Treasury Regulations thereunder. (b) Except as otherwise provided in this Agreement, the information and data requested pursuant to this Section 10.09 shall be provided to Non-Operating Partner on the following schedule: Period in Which Item Accrued Reporting Deadline Fiscal Year ending June 30 October 25 Six Months ending December 31 January 25 (c) The information and data provided under this Section 10.09 shall be prepared with the same degree of completion and accuracy as is required for information and data filed with a Federal income tax return, shall be prepared on an accrual basis and shall include any and all items of Partnership income, gain, losses, deductions and any other items or information as may be reasonably needed by the Non-Operating Partner or any of its Affiliates. Such information and data shall include, but shall not be limited to, the total amount of each of the tax items listed in the attached Schedule Y and each Partner's allocable share of each item. (d) In the event of any amendment to the Code or the issuance of any Treasury Regulation or pronouncement that affects any of the Non-Operating Partner's Affiliate's reporting requirements with respect to the partners, if applicable, of any of the Affiliates of the Non-Operating Partner, the Partnership shall furnish to the Non-Operating Partner any additional information and data that is reasonably necessary for any of the Non-Operating Partner's Affiliates to comply with such reporting requirements. (e) In the event that any information is needed from the Non-Operating Partner in order for the Tax Matters Partner to complete the required federal and state tax return, such information will be provided by the Non-Operating Partner by September 15. 10.10. Tax Oversight. (a) The Non-Operating Partner shall have the right to request any and all information and data from the Managing Partner regarding the calculation of the allocations pursuant to Article V and regarding the tax matters of the Partnership, including the classification, realization and recognition of income, gain, losses, deductions and other Partnership items, and the Operating Partner shall provide such information and data as soon as practicable. Each of the IMC Partner (or, with respect to the IMC GPCo Liquidation Period, Operations and IMC GPCo) and the FRP Partner, at its sole cost, shall also have the right to inspect and copy any and all books and records of the Partnership relating to the calculation and allocation of Partnership tax items, including the original source documents and tax work papers of the Partnership, at such times as the IMC Partner (or, with respect to the IMC GPCo Liquidation Period, Operations or IMC GPCo) or the FRP Partner, as the case may be, may reasonably request. (b) The Managing Partner shall notify the Non-Operating Partner as promptly as practicable of the tax treatment of any significant tax item of the Partnership. The Non-Operating Partner shall have the right to confer with the Managing Partner regarding the tax matters of the Partnership and the calculation of the allocations pursuant to Article V on a yearly basis or on a more frequent basis as requested by the Non-Operating Partner. (c) In the event of a disagreement between the Partners regarding the treatment of a Partnership tax item (other than items as to which the Partners approve a treatment), the Partnership shall not take any position for Federal or state income tax purposes that is not supported by substantial authority, as that term is defined for purposes of Code Section 6662(d)(2)(B)(i). The Partners reserve the right to file their separate income tax returns in a manner inconsistent with the Partnership's Federal income tax return. ARTICLE XI. Term 11.01 Term. The term of the Partnership commenced on July 1, 1993 and shall continue in existence until June 30, 2076, unless extended by written agreement of each Partner or unless earlier terminated pursuant to the terms of this Agreement. 11.02 Purchase Option Upon Scheduled Expiration of the Term. Either the IMC Partner or the FRP Partner may give the other irrevocable written notice not less than one hundred eighty (180) days prior to the scheduled expiration of the term of the Partnership pursuant to Section 11.01 of its election to exercise the purchase option set forth in this Section 11.02. If only one of the IMC Partner or the FRP Partner gives the notice referred to in the preceding sentence (the "Buying Partner"), the Buying Partner shall have the right and the obligation to purchase all, but not less than all, of such other Non-Managing Partner's Partnership Interest and the Managing Partner's Partnership Interest at the aggregate Transfer Price therefor. If the Buying Partner and such other Non-Managing Partner cannot agree upon a Transfer Price within sixty (60) days after the notice referred to in the first sentence of this Section 11.02, either the IMC Partner or the FRP Partner may, by notice to the other, invoke the Appraisal Procedure. If the Appraisal Procedure is required to determine the Transfer Price, the fees and expenses of such Appraisal Procedure shall be shared equally by the IMC Partner and the FRP Partner. The closing of such sale shall take place upon the date the term of the Partnership is scheduled to expire pursuant to Section 11.01. If both the IMC Partner and the FRP Partner give the notice referred to in the first sentence of this Section 11.02, then the term of the Partnership under Section 11.01 shall automatically be extended for an additional period of twenty (20) years (or such other time period as the IMC Partner and the FRP Partner may mutually agree) on the terms and conditions set forth herein (or on such other terms and conditions as the IMC Partner and the FRP Partner may mutually agree). If neither the IMC Partner nor the FRP Partner give the notice referred to in the first sentence of this Section 11.02, then, upon the expiration of the term of the Partnership, the affairs of the Partnership shall be wound up in accordance with the provisions of Article XII hereof. ARTICLE XII. Dissolution and Winding-Up 12.01 Dissolution. The Partnership shall be dissolved upon the first to occur of the following events (each, a "Dissolution Event"): (a) The Bankruptcy of any Partner, provided, however, that to the fullest extent permitted by applicable law, the Partnership shall be reconstituted and continued if all of the Partners (other than a Bankrupt Partner or Partners) elect to so reconstitute and continue the Partnership, in which event the Partnership shall continue as so reconstituted with all of the Partners (including the Bankrupt Partner or Partners) remaining as partners in the Partnership; (b) The election by all Partners to dissolve the Partnership; (c) The expiration of the term of the Partnership (as such term may be adjusted pursuant to Section 11.01 or 11.02), except if one Partner acquires directly or indirectly the Partnership Interest of the other Partners pursuant to the provisions of Section 11.02; (d) The occurrence of any event that makes it unlawful for the business of the Partnership to be carried on or for the Partners to carry it on in partnership; (e) The entry of a decree of judicial dissolution; (f) The written determination by the Policy Committee (or if the Policy Committee fails to agree, if either the IMC Partner or the FRP Partner reasonably and in good faith determines) that the Partnership cannot be operated in a manner that is consistent with achieving the Partnership's business purpose other than in a manner that is inconsistent with preserving the partnership status of the FRP Partner and FRP for Federal income tax purposes and the election by either the IMC Partner or the FRP Partner to dissolve the Partnership, after negotiating in good faith with the other Partners, in accordance with Section 9.05(c); or (g) Subject to Section 12.11, the occurrence of any other event that, absent an agreement to the contrary, causes a dissolution of the Partnership under the Act; provided that, to the fullest extent permitted by law, if a dissolution of the Partnership is caused by any event described in Section 12.01(g), unless one of the Partners is Bankrupt, (i) the Partners (other than any Partner whose act has resulted in such dissolution) may elect to reconstitute the Partnership within four (4) months of the date of the event giving rise to the dissolution hereunder and if the Partners do so elect, the Partnership shall continue as if no dissolution had occurred, in which event the Partnership shall continue as so reconstituted with all of the Partners (including any Partner the act of which has resulted in such dissolution) remaining as partners in the Partnership, or (ii) if the Partnership is not reconstituted as provided above, and such dissolution is caused by the act of any Partner (the "Withdrawing Partner"), then the IMC Partner, if it is not the Withdrawing Partner or the FRP Partner, if it is not the Withdrawing Partner (in either such case, the "Non-Withdrawing Partner") may, by written notice to the Withdrawing Partner, elect (A) to purchase the Partnership Interest of the Withdrawing Partner, or (B) to admit one or more new partners (the "New Partners") to the Partnership, who shall purchase the Partnership Interest of the Withdrawing Partner or (C) to cause the Partnership's affairs to be wound up in accordance with Section 12.02. The Withdrawing Partner (1) shall have only those rights and receive only those payments that are expressly provided for herein, (2) shall be liable to the Partnership, the Non-Withdrawing Partner, the Managing Partner and any New Partners for all losses, costs, fees, expenses and damages suffered by the Partnership, such Non-Withdrawing Partner, the Managing Partner or any New Partners as a result of such dissolution, (3) shall remain liable to the Partnership, such Non-Withdrawing Partner, the Managing Partner and any New Partners for any debts, liabilities or other obligations of the Withdrawing Partner to the Partnership, such Non-Withdrawing Partner, the Managing Partner or any New Partners, and (4) shall remain liable to the Partnership, such Non-Withdrawing Partner, the Managing Partner and any New Partners for its contribution obligation pursuant to Section 8.02. The purchase price to be paid to the Withdrawing Partner (by the Non-Withdrawing Partner or any New Partners) in any sale and purchase of the Withdrawing Partner's Partnership Interest pursuant to this Section 12.01, shall be (x) the Transfer Price, determined (unless otherwise agreed) in accordance with the Appraisal Procedure (which Appraisal Procedure shall be at the expense of the Withdrawing Partner), reduced by (y) the amount of any losses, costs, fees, expenses or damages suffered by the Partnership, the Non- Withdrawing Partner, the Managing Partner or any New Partners as a result of such dissolution, and shall be payable to the Withdrawing Partner in five equal annual installments, without interest, commencing on the date of the transfer of the Partnership Interest of the Withdrawing Partner (which shall be the tenth (10th) business day following the determination of the Transfer Price). In any winding up pursuant to clause (ii)(C) above, the amount otherwise distributable to the Withdrawing Partner pursuant to the following provisions of Article XII shall be reduced by the amount of any losses, costs, fees, expenses or damages suffered by the Partnership, the Non-Withdrawing Partner, the Managing Partner or any New Partners as a result of such dissolution. 12.02 Winding-Up. Upon dissolution of the Partnership, and the failure by one or more of the Partners or any Affiliate or Affiliates of the Partners, to reconstitute and continue the Partnership (pursuant to Section 11.02 or otherwise) within four (4) months after such dissolution and if the Non-Withdrawing Partner has not made any election pursuant to Section 12.01, the Managing Partner shall (unless the event giving rise to the dissolution was the Bankruptcy of the Managing Partner, in which case the Non-Managing Partner with the largest Capital Interest at the time of such dissolution shall) wind up the affairs of the Partnership in accordance with the Act and, to the extent permitted by applicable law, shall settle accounts between the Partners as specified in this Article XII. The Partner charged with winding up the affairs of the Partnership and settling accounts among the Partners hereunder shall be referred to as the "Liquidating Partner". 12.03 Accounting on Dissolution. If the Partnership is not reconstituted or continued in accordance with the terms hereof following a dissolution, then on the date (the "Accounting Date") which is four (4) months following the date of dissolution, a proper accounting shall be made of the Partnership assets, liabilities and operations, from the date of the last previous accounting to the Accounting Date. Any items of income, gain, credit, loss, expense and other deductions which are realized subsequent to the date of the last previous accounting to the Accounting Date shall be allocated in accordance with Article V and proper adjustments shall be made to the Capital Account of each Partner. 12.04 Accounting; Allocations of Residual Net Profits and Residual Net Loss After Dissolutions. (a) Any items of gain or loss that are realized from Partnership operations or from sales of Partnership assets subsequent to the Accounting Date and before the date of liquidation shall be allocated as provided in Article V. (b) In addition to the adjustments to the Partner's Capital Accounts described above, if any of the Partnership's properties are to be distributed in kind rather than sold, such properties that are to be distributed in kind shall be valued by the Partners and a simulated aggregate gain (if any) or loss (if any) for those properties shall be allocated to the Partners' Capital Accounts as that simulated aggregate gain (or loss) would have been allocated under Article V if such properties had been sold for a cash price equal to each asset's fair market value on the Accounting Date. 12.05 Application of Article V in Year of Dissolution. In the year in which the Partnership dissolves, Article V shall be applied with regard to the Capital Interests in effect for the year of the dissolution, rather than the Capital Interests in effect for the following year. 12.06 Conversion of Assets to Cash. (a) If the Partnership is not reconstituted, or the Partnership Interest of the Withdrawing Partner is not purchased in accordance with the terms hereof, then commencing with the date that is four (4) months after the date of dissolution, unless arrangements satisfactory to all Partners are otherwise made, sufficient assets of the Partnership will be converted into cash to permit the Partnership to pay all its liabilities other than long-term debts which (i) are secured by Partnership assets from which the projected net income is sufficient to pay installments of principal and interest on such debts as they become due and (ii) contain terms specifying that neither the dissolution of the Partnership nor the distribution of such property that is subject to and secured by such debts constitutes a default or causes the acceleration of the maturity of such indebtedness ("Approved Debts"). (b) Notwithstanding the provisions of Sections 12.07 and 12.08 regarding the method and timing of the liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if on commencement of the winding up process in accordance with Section 12.02, the Partners determine that an immediate sale of part or all of the Partnership's assets would be impractical or would cause undue loss to the Partners, the Partners may defer for a reasonable time the liquidation of any assets except those necessary to satisfy the liabilities of the Partnership. (c) In the event that Partnership assets are distributed in kind pursuant to Section 12.06(b), the Partners shall be consulted to determine the most tax-efficient manner to make such distribution, consistent with the liquidation priorities of Section 12.07. 12.07 Distributions in Liquidation. As soon as the actions required by Sections 12.03, 12.04, 12.05 and 12.06 have been completed, the Liquidating Partner shall cause the cash and assets of the Partnership to be distributed in the following order: (a) To creditors of the Partnership (other than Partners) in payment of all liabilities of the Partnership (other than Approved Debts) in the order of priority as provided by law. If any liability is contingent or uncertain in amount, a reserve equal to the maximum amount to which the Partnership could reasonably be held liable will be established. Upon the payment or other discharge of such liability, the amount remaining in such reserve not needed, if any, will be distributed in accordance with the remaining provisions of this Section 12.07. (b) To the Partners in payment of all loans (including, without limitation, any Partner Loans) and any interest thereon in accordance with the amount owing to each Partner. (c) To each Partner in accordance with the positive balance in its Capital Account. (d) To the Partners in accordance with their respective Capital Interests in effect for the year of the liquidation. (e) Notwithstanding the foregoing provisions of this Section 12.07, any distribution which, but for this Section 12.07(e) would be payable to a Partner whose actions in violation of this Agreement (other than any breach of Section 9.05(a)) caused the dissolution of the Partnership shall be reduced by the amount of losses, costs, fees, expenses and damages suffered by the Partnership or any Partner (other than the Partner whose actions caused a dissolution) as a result of such dissolution. 12.08 Compliance with Treasury Regulations. In the event that the Partnership or any Partner's Partnership Interest is "liquidated" within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g), liquidating distributions shall be made, pursuant to this Agreement, in accordance with the Partners' positive Capital Account balances, as required by Treasury Regulation Section 1.704(b)(2)(b)(2), by the end of the taxable year or, if later, within ninety (90) days after the date of such liquidation. In determining any Partner's Capital Account balance pursuant to this Section 12.08, any item of gain, loss, deduction, and credit that has not previously been allocated pursuant to Article V shall be so allocated. 12.09 Deficit Capital Account Restoration Obligation. At the end of the period described in Sections 12.06 and 12.08 (and after allocation of all Partnership items pursuant to this Article XII), if any Partner has a negative balance in its Capital Account, such negative balance shall be a debt from that Partner to the Partnership, and that Partner shall be obligated to make additional contributions to the Partnership to restore that Partner's Capital Account for income tax purposes to zero (0) at such time. Any amount contributed to the Partnership pursuant to this Section 12.09 shall be distributed according to Section 12.07. 12.10 Section 708 Termination. Notwithstanding any other provision of this Article XII, in the event that the Partnership is liquidated within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations, but no Dissolution Event has occurred, the assets of the Partnership shall not be liquidated, the Partnership's liabilities shall not be paid or discharged, and the Partnership's affairs shall not be wound up. 12.11 Continuation of the Partnership. Unless required by applicable law, no sale, transfer, assignment or other disposition by either Partner of all or any part of its Partnership Interest in accordance with the terms hereof (including, without limitation, the transfers of the Partnership Interest of IMC GPCo to Operations in connection with the IMC GPCo Liquidation and, in the event that FTX and FRP choose to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) in accordance with the terms of the Amendment, Waiver and Consent Agreement, transfers of the Partnership Interest of the FRP Partner to FRP or an Affiliate of FRP in connection with such merger, liquidation or dissolution of the FRP Partner) shall cause a dissolution of the Partnership, and, if such a dissolution is required under applicable law (including, without limitation, as a result of the transfers of the Partnership Interest of IMC GPCo to Operations in connection with the IMC GPCo Liquidation or, in the event that FTX and FRP choose to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) in accordance with the terms of the Amendment, Waiver and Consent Agreement, as a result of the transfers of the Partnership Interest of the FRP Partner to FRP or an Affiliate of FRP in connection with such merger, liquidation or dissolution of the FRP Partner), immediately upon such sale, transfer, assignment or other disposition by either Partner, the Partnership shall be reconstituted as a general partnership, governed by this Partnership Agreement, among the transferee, purchaser or assignee and the remaining Partner or Partners. 12.12 Waiver of Certain Rights. Unless otherwise agreed in writing by the Partners, to the extent permitted by Delaware law, each Partner hereby waives (i) all rights it may have under Delaware law to cause the dissolution of the Partnership (other than dissolution by operation of law as a result of a transfer of its Partnership Interest as expressly permitted hereby), (ii) to the extent a dissolution occurs by operation of law, the right to cause the Partnership to wind up its affairs and make distributions to the Partners pursuant to Article XII upon the occurrence of such dissolution and (iii) all rights to partition with respect to real and personal property, provided that this clause shall not apply to assets that have previously been distributed by the Partnership to the Partners. ARTICLE XIII. Miscellaneous Provisions 13.01 Force Majeure. If the Managing Partner is rendered unable, wholly or in part, by force majeure to carry out its obligations hereunder such obligations insofar as they are affected by the force majeure shall be suspended during but no longer than the continuance of the force majeure. In such event, the Managing Partner shall use all commercially reasonable efforts to remove the force majeure as promptly as practicable. The term "force majeure" shall mean but shall not be limited to: acts of God or the public enemy; expropriation or confiscation of facilities; compliance with any order or request of any governmental authority or person purporting to act therefor; acts of declared or undeclared war; public disorders, rebellion, or sabotage; revolution; earthquake; fire; flood; riot; labor difficulties or shortages; labor strikes whether direct or indirect; action or inaction of any governmental agencies; delays in or shortages of transportation; inability to obtain necessary materials or equipment; inability to obtain necessary permits or approvals due to existing or future laws, rules or regulations of any governmental authority; or any cause whether or not of the same class or kind as those specifically above named not within the control of the Managing Partner and which, by the exercise of all commercially reasonable efforts the Managing Partner is unable to prevent. The requirement that the Managing Partner use all commercially reasonable efforts to remedy any force majeure as promptly as practicable shall not require the settlement of strikes, lockouts, or other labor difficulties by the Managing Partner contrary to its wishes or the challenging of the validity of any governmental law, regulation, order or request. In the event of any occurrence of force majeure, the Managing Partner immediately shall notify the Policy Committee of such occurrence. 13.02 Limitation of Liability of Partners. (a) Notwithstanding anything to the contrary set forth in this Agreement, except as provided in Section 7.06 or Section 13.02(b), no Partner (which term, for purposes of this Section 13.02(a), shall, with respect to the IMC GPCo Liquidation Period (and all other periods during which Operations or IMC GPCo is a Partner), refer to each of Operations and IMC GPCo, severally and not jointly) shall be liable to the Partnership, any other Partner or any of their respective Related Persons for any loss or damage of any nature incurred or suffered by the Partnership, any other Partner or any of their respective Related Persons except loss or damage to the Partnership, any other Partner or any of their respective Related Persons caused by such Partner's gross negligence or wilful misconduct hereunder. (b) The Managing Partner shall be liable to the Partnership and the other Partners, solely as a result of such Partners' status as Partners, only for all damages, including lost profits, which are proximately caused by the Managing Partner's gross negligence, wilful misconduct, wilful breach of this Agreement or failure to follow a specific instruction from the Policy Committee adopted in accordance with the terms of this Agreement, but shall not be so liable for any further lost profits or other damages which are the further consequences of such lost profits or other damages that were proximately caused. For purposes of this Agreement, an ignoring of the terms of this Agreement shall be deemed a wilful breach; provided that the Managing Partner shall not be liable for ignoring the term of this Agreement requiring the Managing Partner to act as an ordinary prudent and reasonable manager if the Managing Partner acted in good faith and in the belief (which belief was reasonable) that its actions were in accordance with all of the terms of this Agreement. 13.03 Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no assignment of any Partnership Interest, or portion thereof, shall be effective unless made in accordance with the terms of this Agreement. The transfers of the Partnership Interest of IMC GPCo to Operations in connection with the IMC GPCo Liquidation, the FRP GPCo/FCC/FTX Mergers and, in the event that FTX and FRP choose to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) in accordance with the terms of the Amendment, Waiver and Consent Agreement, transfers of the Partnership Interest of the FRP Partner to FRP or an Affiliate of FRP in connection with such merger, liquidation or dissolution of the FRP Partner shall each be deemed to be made in accordance with the terms of this Agreement. The sale, transfer or assignment of a Partnership Interest, or portion thereof, in accordance with the terms of this Agreement (including, without limitation, the transfers of the Partnership Interest of IMC GPCo to Operations in connection with the IMC GPCo Liquidation and, in the event that FTX and FRP choose to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) in accordance with the terms of the Amendment, Waiver and Consent Agreement, transfers of the Partnership Interest of the FRP Partner to FRP or an Affiliate of FRP in connection with such merger, liquidation or dissolution of the FRP Partner) shall result in the transfer to the purchaser, transferee or assignee of a Partnership Interest, or portion thereof, that is equal to the sold, transferred or assigned Partnership Interest, or the sold, transferred or assigned portion thereof, of the seller, transferor or assignor and shall cause the purchaser, transferee or assignee to be subject to and to incur all obligations pertaining to the sold, transferred or assigned Partnership Interest, or the sold, transferred or assigned portion thereof. 13.04 Notices. All communications, notices and consents provided for herein shall be in writing and be given in person (or air freight delivery) or by means of telecopy (with request for assurance of receipt in a manner typical with respect to communications of that type) or by mail, and shall become effective (x) on delivery if given in person or by air freight delivery, (y) on the date of transmission if sent by telecopy or (z) three business days after being deposited in the mails, with proper postage for first-class registered or certified air mail prepaid. Notices shall be addressed as follows: (i) if to the IMC Partner at: 2100 Sanders Road Northbrook, Illinois 60062 Facsimile: 708-205-4805 Attention: Corporate Secretary (ii) if to Operations at: 2100 Sanders Road Northbrook, Illinois 60062 Facsimile: 708-205-4805 Attention: Corporate Secretary (iii) if to IMC GPCo at: 2100 Sanders Road Northbrook, Illinois 60062 Facsimile: 708-205-4805 Attention: Corporate Secretary (iv) if to the Managing Partner at: 2100 Sanders Road Northbrook, Illinois 60062 Facsimile: 708-205-4805 Attention: Corporate Secretary and (v) if to the FRP Partner at: 1615 Poydras Street New Orleans, Louisiana 70112 Facsimile: 504-585-3513 Attention: General Counsel or at such other address as either party hereto may from time to time designate by notice duly given in accordance with the provisions of this Section to the other party hereto. 13.05 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the conflicts of law rules of such state. 13.06 Choice of Forum. All suits, actions or proceedings arising out of or relating to this Agreement shall be brought in a state or federal court located in the State of Delaware, which courts shall be an appropriate forum for all such suits, actions or proceedings. Each Partner hereby waives any objection which it may now or hereafter have to the laying of venue in any such court of any such suit, action or proceeding. 13.07 Consent to Jurisdiction. Each Partner hereby irrevocably submits to the jurisdiction of any state or federal court located in the State of Delaware in any such suit, action or proceeding referred to in Section 13.06 above. IMC GPCo hereby designates and appoints The Corporation Trust Company, with an office on the date hereof at 1209 Orange Street, Wilmington, Delaware 19801, or any successor thereof, as its authorized agent to accept and acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any state or federal court in the State of Delaware and agrees that service of process upon The Corporation Trust Company, or any successor thereof, shall be deemed in every respect effective service of process upon IMC GPCo in any such suit, action or proceeding. Operations hereby designates and appoints The Corporation Trust Company, with an office on the date hereof at 1209 Orange Street, Wilmington, Delaware 19801, or any successor thereof, as its authorized agent to accept and acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any state or federal court in the State of Delaware and agrees that service of process upon The Corporation Trust Company, or any successor thereof, shall be deemed in every respect effective service of process upon Operations in any such suit, action or proceeding. The FRP Partner hereby designates and appoints The Corporation Trust Company, with an office on the date hereof at 1209 Orange Street, Wilmington, Delaware 19801, or any successor thereof, as its authorized agent to accept and acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any state or federal court in the State of Delaware and agrees that service of process upon The Corporation Trust Company, or any successor thereof, shall be deemed in every respect effective service of process upon the FRP Partner in any such suit, action or proceeding. The Managing Partner hereby designates and appoints The Corporation Trust Company, with an office on the date hereof at 1209 Orange Street, Wilmington, Delaware 19801, or any successor thereof, as its authorized agent to accept and acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any state or federal court in the State of Delaware and agrees that service of process upon The Corporation Trust Company, or any successor thereof, shall be deemed in every respect effective service of process upon the Managing Partner in any such suit, action or proceeding. Said designation and appointment by each of IMC GPCo, Operations, the FRP Partner and the Managing Partner shall be irrevocable during the term of this Agreement, and each party shall pay all costs and expenses of its respective designation and appointment as and when due and payable. 13.08 Waiver of Jury Trial. EACH PARTNER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH SUIT, ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. 13.09 Entire Agreement; Amendments. This Agreement (including the exhibits hereto) together with the other Transaction Agreements (including any exhibits or schedules thereto), the Amendment, Waiver and Consent Agreement and a certain letter agreement dated as of July 1, 1993 relating to certain tax matters between Operations and FRP embody the entire agreement and understanding between the parties with respect to the subject matter hereof and thereof, and supersede any agreements, representations, warranties or understandings, oral or written, between the parties with respect to the subject matter of this Agreement and the other Transaction Agreements entered into prior to the respective dates hereof and thereof. This Agreement may be amended or modified (including, without limitation, to admit a new "Partner" or "Partners" (other than (i) any New Partners or any new "Partner" admitted to the Partnership pursuant to a transfer of the Partnership Interest (or a portion thereof) of a Partner pursuant to Section 7.02 or Section 7.04) or (ii) the admission of FRP or an Affiliate of FRP as a new Partner as a result of the election of FTX and FRP to merge, liquidate or dissolve the FRP Partner (or transfer its Partnership Interests) in accordance with the terms of the Amendment, Waiver and Consent Agreement) only by an instrument in writing executed by all of the Partners. 13.10 Execution in Counterparts. This Agreement may be signed incounterparts. Any single counterpart or set of counterparts signed, in either case, by all the parties hereto shall constitute a full and original agreement for all purposes. 13.11 Remedies and Waiver. No failure or delay in exercising any right hereunder shall operate as a waiver of or impair any such right. No single or partial exercise of any such right shall preclude any other or further exercise thereof or the exercise of any other right. Any waiver must be given in writing to be effective, and no waiver shall be deemed a waiver of any other right. 13.12 Headings. The headings of Articles and Sections have been included herein for convenience only and shall not constitute a part of this Agreement for any other purpose. 13.13 Third Party Beneficiaries. This Partnership Agreement is solely for the benefit of the parties hereto and the Partners' respective Related Persons to the extent set forth in Section 8.01, and no provision of this Agreement shall be deemed to confer upon third parties, other than the Partners' respective Related Persons to the extent set forth in Section 8.01, any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement. 13.14 Further Assurances. Each Partner agrees to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by the Transaction Agreements and to vest in the Partnership good title to the Assets, subject only to Permitted Liens. 13.15 Power of Attorney. Each Partner hereby constitutes and reappoints, effective as of May 26, 1995, the Managing Partner and its successors and assigns as the true and lawful attorney of such Partner with full power of substitution in the name of the Partnership or in the name of such Partner, but for the benefit of the Partnership (i) to collect for the account of the Partnership any Asset and (ii) to institute and prosecute all proceedings on behalf of the Partnership which the Managing Partner may in its commercially reasonable discretion deem necessary or appropriate in order to assert or enforce any right, title or interest in, to or under the Assets, and to defend or compromise any and all actions, suits or proceedings in respect of such Assets. The Partnership shall be entitled to retain for its own account any amounts collected pursuant to the foregoing powers, including any amounts payable as interest in respect thereof. 13.16 Public Announcements. Except as may be required by applicable law or any listing agreement with any national securities exchange, neither the Partnership nor any Partner nor any Affiliate thereof will issue any press release or make any public statement with respect to the business of the Partnership or its financial performance or condition without the prior written consent of the Partners unless either (i) a draft of the proposed release has been provided to each Partner at least twenty-four (24) hours prior to its proposed release in order to permit the Partners to comment thereon or (ii) such press release or other public statement contains factual information (or discussion or analysis of or comment based upon such factual information) previously provided to such Person by the Managing Partner; provided that none of the Partners nor any of their Affiliates will present projections or forward-looking information that is attributed to the Partnership or any other Partner or its Affiliates without the prior written consent of such other Partners. * * * * * IN WITNESS WHEREOF, the parties have signed this Amended and Restated Partnership Agreement as of the 26th day of May, 1995. IMC-Agrico GP Company By: ROBERT C. BRAUNEKER Name Printed: Robert C. Brauneker Title: Vice President Agrico, Limited Partnership By: Agrico, Inc., its general partner By: Name Printed: Title: IMC-Agrico MP, Inc. By: ROBERT C. BRAUNEKER Name Printed: Robert C. Brauneker Title: Vice President IMC Global Operations Inc. (formerly IMC Fertilizer, Inc.) By: PETER HONG Name Printed: Peter Hong Title: Vice President IN WITNESS WHEREOF, the parties have signed this Amended and Restated Partnership Agreement as of the 26th day of May, 1995. IMC-Agrico GP Company By: Name Printed: Title: Agrico, Limited Partnership By: Agrico, Inc., its general partner By: CHARLES W. GOODYEAR Name Printed: Charles W. Goodyear Title: Vice President IMC-Agrico MP, Inc. By: Name Printed: Title: IMC Global Operations Inc. (formerly IMC Fertilizer, Inc.) By: Name Printed: Title: Schedule X B - (N x T) --------------- Target Cash = C - N B = The capital account balance of the respective Partner at the beginning of the June 30 fiscal year, adjusted for all adjustments to the Partner's capital account for the current year except for adjustments required as a result of (i) allocations pursuant to Section 5.01; (ii) the special allocations pursuant to Section 5.02(c) and 5.02(d); and (iii) all cash distributions to the Partner for the current fiscal year made pursuant to the Partner's Current Interest for the year. N = The Capital Interest for the following year for the respective Partner. In determining any allocations to be made pursuant to Article V and Article XII for any period other than a period ending on the last day of the Partnership's fiscal year, however, the Capital Interest for the current year for the respective Partner shall be used. T = The sum of the capital account balances of the Partners at the beginning of the June 30 fiscal year, adjusted for all adjustments to the Partners' capital accounts for the current year except for adjustments required as a result of (i) allocations pursuant to Section 5.01; (ii) the special allocations pursuant to Section 5.02(c) and 5.02(d); and (iii) all cash distributions to the Partners for the current fiscal year made pursuant to the Partners' Current Interest for the year. C = The Current Interest of the respective Partner for the applicable fiscal year. SCHEDULE Y ITEM OF TAX INFORMATION PERIOD(S) 1. Ordinary income excluding July 1 - December 31 depreciation and depletion (estimated July 1 - June 30 where appropriate), including (final) workpapers supporting allocations between partners 2. Depletable gross revenues, statutory July 1 - December 31 depletion expenses (excluding July 1 - June 30 depreciation) for purposes of Code (final) Section 613, production volumes, and remaining reserves by property (taking into account special tax allocations) 3. Depreciation and amortization expense, July 1 - December 31 by tax property for mining assets and by July 1 - June 30 state for other assets, as follows: (final) ---Federal ---AMT ---ACE 4. Depreciable and amortizable asset July 1 - December 31 additions and retirements, by tax July 1 - June 30 property for mining assets and by state (final) for other assets 5. Leasehold cost basis and related July 1 - December 31 additions, retirements, and abandonments July 1 - June 30 by tax property (final) 6. Outstanding balance of recourse and Monthly (as of each nonrecourse debt month end) July 31 - December 31 January 31 - June 30 7. Interest and dividend income July 1 - December 31 July 1 - June 30 (final) 8. Code Section 1231 gains or losses, and July 1 - December 31 ordinary income recapture July 1 - June 30 (final) 9. Reconciliation of book to taxable income July 1 - December 31 July 1 - June 30 (final) 10. Partnership gross income consisting of July 1 - December 31 qualifying income under Code Section January 1 - June 30 7704 (d) as well as nonqualifying income 11. Fair market value evaluation by Calendar year property ITEM OF TAX INFORMATION PERIOD(S) 12. Additional state tax information July 1 - June 30 A. Sales by state based on the place (final) of origin and place of shipping destination B. Inventory by state C. Miscellaneous income (i.e., interest, dividends, gains and losses, rental income and other miscellaneous income) by state D. Rent expense E. Book original cost of depreciable and depletable assets by state, considering the effect of additions and retirements F. Book basis information for the Louisiana corporation franchise tax return 13. Tax basis of all assets and As of December 31 liabilities, by major category, for Code As of June 30 (final) Section 743 and FAS 109 purposes 14. Depreciation and amortization, by tax July 1 - June 30 property, for mining assets for the (final) following: --Earnings and Profits --State (where appropriate) 15. Estimate of permanent differences July 1 - December 31 between book and taxable income 16. Estimate of taxable income for FAS 109 July 1 - December 31 purposes 17. Estimated regular and AMT taxable July 1 - June 30 income 18. Any other tax information and data reasonably requested by the Non-Operating Partner or its Affiliates for purposes of complying with their federal and state tax reporting requirements (TABLE CONTINUED) ITEM OF TAX INFORMATION DATE 1. Ordinary income excluding January 25 depreciation and depletion (estimated October 25 where appropriate), including workpapers supporting allocations between partners 2. Depletable gross revenues, statutory January 25 depletion expenses (excluding October 25 depreciation) for purposes of Code Section 613, production volumes, and remaining reserves by property (taking into account special tax allocations) 3. Depreciation and amortization expense, January 25 by tax property for mining assets and by October 25 state for other assets, as follows: ---Federal ---AMT ---ACE 4. Depreciable and amortizable asset January 25 additions and retirements, by tax October 25 property for mining assets and by state for other assets 5. Leasehold cost basis and related January 25 additions, retirements, and abandonments October 25 by tax property 6. Outstanding balance of recourse and January 25 nonrecourse debt October 25 7. Interest and dividend income January 25 October 25 8. Code Section 1231 gains or losses, and January 25 ordinary income recapture October 25 9. Reconciliation of book to taxable income January 25 October 25 10. Partnership gross income consisting of January 25 qualifying income under Code Section October 25 7704 (d) as well as nonqualifying income 11. Fair market value evaluation by January 25 property ITEM OF TAX INFORMATION DATE 12. Additional state tax information October 25 A. Sales by state based on the place of origin and place of shipping destination B. Inventory by state C. Miscellaneous income (i.e., interest, dividends, gains and losses, rental income and other miscellaneous income) by state D. Rent expense E. Book original cost of depreciable and depletable assets by state, considering the effect of additions and retirements F. Book basis information for the Louisiana corporation franchise tax return 13. Tax basis of all assets and January 25 liabilities, by major category, for Code October 25 Section 743 and FAS 109 purposes 14. Depreciation and amortization, by tax property, for mining assets for the following: November 25 --Earnings and Profits --State (where appropriate) 15. Estimate of permanent differences between book and taxable income January 6 16. Estimate of taxable income for FAS 109 purposes January 6 17. Estimated regular and AMT taxable income January 25 18. Any other tax information and data reasonably requested by the Non-Operating Partner or its Affiliates for purposes of complying with their federal and state tax reporting requirements Schedule 9.12 Sales to IMC Canada Ltd. of GTSP, DAP, GMAP 11-52-0, GMAP 10-50-0 and PFS: the price shall be the average market price minus ten percent (10%) for domestic sales of similar products so long as the aggregate volume for the above-mentioned products does not exceed 57,619 P2O5 tons. Sales to Operations' Rainbow Division of GTSP, DAP, RMAP, GMAP and PFS: the price shall be the average market price minus ten percent (10%), but not less than full production cost, for domestic sales of similar products so long as the aggregate volume for the above-mentioned products does not exceed 95,200 P205 tons. EXHIBIT A Schedule of Definitions "Accounting Date" shall have the meaning given to such tern in Section 12.03 of the Partnership Agreement. Accounting Referee" shall have the meaning given to such term in the Contribution Agreement. "Acquiring Person shall have the meaning given to such term in Section 2.08 (b) of the Partnership Agreement. "Act" shall mean the Uniform Partnership Law as enacted in the State of Delaware. "Administrative Fee" shall have the meaning given to such term in Section 9.11 of the Partnership Agreement. "Affiliate" of any Person shall mean any corporation, proprietorship, partnership or business entity which, directly of indirectly, owns or controls, is under common ownership or control with, or is owned or is controlled by, such Person. "Affiliated Group" means a Person together with its affiliates and all Persons who are members of a "group" with such Person within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. "Agrico LP" or "FRP Partner" (in the case of "FRP Partner", prior to the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) contemplated by the Amendment, Waiver and Consent Agreement) shall mean Agrico, Limited Partnership, a Delaware limited partnership. "Alternates" shall have the meaning given to such term in Section 6.04 of the Partnership Agreement. "Amendment, Waiver and Consent Agreement" shall mean the Amendment, Waiver and Consent Agreement dated as of May 26, 1995 among Global, Operations, IMC GPCo, the Managing Partner, IMC-Agrico Company, FTX, FRP and the FRP Partner. "Appraisal Procedure" shall mean the following: If any price, value, amount or determination to be determined under the Partnership Agreement cannot timely be established by agreement, then either the IMC Partner (or, as set forth in the Partnership Agreement, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) or the FRP Partner, by written notice to the other, may invoke the Appraisal Procedure. Each of the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) and the FRP Partner shall appoint its Qualified Investment Banking Firm to conduct an appropriate valuation and shall give notice of such appointment to the other Non-Managing Partner(s) within fifteen (15) days after delivery of the notice invoking such procedure. If the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) or the FRP Partner does not appoint its Qualified Investment Banking Firm within such fifteen (15) day period, the valuation made by the Qualified Investment Banking Firm appointed by the other Non-Managing Partner shall be conclusive and binding on the Partners. If within thirty (30) days after appointment of the Qualified Investment Banking Firms, such Qualified Investment Banking Firms are unable to agree upon an appropriate valuation but the higher valuation is not greater than 110% of the lower valuation, then the valuation which shall be binding on the Partners shall be the average of the two (2) valuations given by the Qualified Investment Banking Firms. If the higher valuation is greater than 110% of the lower valuation, the two (2) Qualified Investment Banking Firms jointly shall appoint a third Qualified Investment Banking Firm within fifteen (15) days thereafter, or, if they do not do so, either the IMC Partner (or, in such cases, Operations or IMC GPCo) or the FRP Partner may request the American Arbitration Association, or any organization successor thereto, to appoint the third Qualified Investment Banking Firm. The decision of the third Qualified Investment Banking Firm shall be given within sixty (60) days after its appointment, shall be at least equal to the lower valuation, shall not exceed the higher valuation and shall be binding on the Partners. "Approved Debts" shall have the meaning given to such term in Section 12.06(a) of the Partnership Agreement. "Asset Sale Amount" shall mean, with respect to any sale of any Partnership asset other than in the ordinary course of business, an amount equal to the greater of (a) the net book value of such asset as shown on the most recent audited balance sheet of the Partnership and (b) the net proceeds (including cash and the value of property received) realized by the Partnership upon the sale or other disposition of such asset. "Assets" shall have the meaning given to such term in the Contribution Agreement. "Assumed Liabilities" and "Assumed Liability" shall have the meanings given to such terms in the Contribution Agreement. "Bankrupt" shall mean any Person with respect to which a Bankruptcy shall have occurred. "Bankruptcy" shall mean with respect to any Person the occurrence of either of the following events" (i) the Person shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; or (ii) an involuntary case or other proceeding shall be commenced against the Person seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the Person under the federal bankruptcy laws as now or hereafter in effect. "Base Affiliate Transaction Amount" shall mean (i) for the Fiscal Year ended June 30, 1994, five hundred thousand dollars ($500,000) and (ii) for each subsequent Fiscal Year, an amount equal to the sum of (x) the Base affiliate Transaction Amount in effect for the immediately preceding Fiscal Year, plus (y) the product of (A) the percentage increase in the GNP Deflator Index for the immediately preceding Fiscal Year, multiplied by (B) the Base Affiliate Transaction Amount for the immediately preceding Fiscal Year. "Base Budget Amount" shall mean (i) for the Fiscal Year ended June 30, 1994, two hundred fifty thousand dollars ($250,000), and (ii) for each subsequent Fiscal Year, an amount equal to the sum of (x) the Base Budget Amount in effect for the immediately preceding Fiscal Year, plus (y) the product of (A) the percentage increase in the GNP Deflator Index for the immediately preceding Fiscal Year, multiplied by (B) the Base Budget Amount for the immediately preceding Fiscal Year. "Base Obligation Amount" shall mean (i) for the Fiscal Year ended June 30, 1994, five million dollars ($5,000,000), and (ii) for each subsequent Fiscal Year, an amount equal to the sum of (x) the Base Obligation Amount in effect for the immediately preceding Fiscal Year, plus (y) the product of (A) the percentage increase in the GNP Deflator Index for the immediately preceding Fiscal Year, multiplied by (B) the Base Obligation Amount for the immediately preceding Fiscal Year. "Base Sale Amount" shall mean (i) for the Fiscal Year ended June 30, 1994, twenty-five million dollars ($25,000,000), and (ii) for each subsequent Fiscal Year, an amount equal to the sum of (x) the Base Sale Amount in effect for the immediately preceding Fiscal Year, plus (y) the product of (A) the percentage increase in the GNP Deflator Index for the immediately preceding Fiscal Year, multiplied by (B) the Base Sale Amount for the immediately preceding Fiscal Year. "Beneficial Interest" means with respect to either Ultimate Parent, its beneficial ownership interest in the Partnership (determined upon the basis of the Capital Interest of the Partner or Partners controlled by such Ultimate Parent) proportionately reduced by any minority ownership interest of any Person other than such Ultimate Parent or any if its Intervening Persons in the Partner or Partners controlled by such Ultimate Parent or any Intervening Person of such Ultimate Parent; provided that in calculating the Beneficial Interest of FTX or any subsequent Ultimate Parent of the FRP Partner, the beneficial ownership interest of FTX or any subsequent Ultimate Parent of the FRP Partner in the Partnership shall only be reduced on account of Non-Affiliated Unitholders to the extent such Non-Affiliated Unitholders hold in excess of 49% of the limited partnership interests of FRP. "Capital Account" means, with respect to any Partner, the capital account maintained for such Partner pursuant to Section 4.02 of the Partnership Agreement. "Capital Advance" shall have the meaning given to such term in Section 3.02(b) of the Partnership Agreement. "Capital Interest" shall have the meaning given to such term in Section 4.01 of the Partnership Agreement. "Capital Interest Cash" means, for any period any Capital Proceeds received during such period less the sum of (A) Capital Proceeds reinvested in a Capital Project during such period in accordance with Section 5.07 of the Partnership Agreement plus (B) (i) expenditures for Capital Projects during such period and (ii) capital expenditures in any year for projects identified on Annex VII to the Contribution Agreement, or alternative projects of a substantially similar nature substituted by agreement of the parties, to the extent that the aggregate amount of all such capital expenditures exceed 110% of the aggregate amount shown on such Annex VII as being spent for such projects in that year, which in both cases are either specifically approved by the Policy Committee (or, if not by the Policy Committee, by the CEOs or the Managing Partner in accordance with Section 6.07 of the Partnership Agreement) or in a budget approved by the Policy Committee(or, if not by the Policy Committee, by the CEOs or the Managing Partner in accordance with Section 6.07 of the Partnership Agreement). Furthermore, any expenditure that would otherwise be subtracted pursuant to clause (B) of this definition of Capital Interest Cash shall not be so subtracted to the extent that such expenditure is funded by either the incurrence of indebtedness by the Partnership or cash contributions by the Partners. "Capital Proceeds" shall mean the cash proceeds of a Capital Transaction received, whether the Capital Transaction occurred in the current period or in a prior period. "Capital Project" shall mean any project having an anticipated useful life in excess of one year, with an anticipated cost (including capitalized interest in connection with any Debt incurred to fund such project) in excess of the Base Budget Amount and involving the purchase, lease, license, acquisition, manufacture, maintenance or construction of an asset, other than those items set forth on Annex VII to the Contribution Agreement. A Capital Project shall be deemed implemented or attributable to the Fiscal Year in which the relevant asset is placed in service. "Capital Transaction" shall mean the sale or disposition of any asset of the Partnership having an anticipated useful life in excess of one year other than in the ordinary course of business. A Capital Transaction shall be deemed to have occurred in the Fiscal Year in which the sale or disposition of the relevant asset becomes effective. The sale of Big Bend or Port Sutton terminal is not a Capital Transaction. "CEOs" shall have the meaning given to such term in Section 6.07(b) of the Partnership Agreement. "Claims" shall have the meaning given to such term in Section 8.01 of the Partnership Agreement. "Closing" shall mean the consummation of the transactions contemplated by the Contribution Agreement in accordance with Section 2.08 thereof. "Closing Date" shall have the meaning given to such term in the Contribution Agreement. "Code" shall mean the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder. "Comparable Property" shall have the meaning given to such term in Section 2.08(c) of the Partnership Agreement. "Confidentiality Agreement" shall mean the Letter Agreement dated November 18, 1992 among FRP, FTX and Group. "Contributed Business" shall, with respect to Operations or FRP, have the meaning given to such term in the Contribution Agreement. "Contributing Partner" shall have the meaning given to such term in Section 3.03 of the Partnership Agreement. "Contribution Agreement" shall mean that certain Contribution Agreement dated as of April 5, 1993 IMC and FRP "Contribution Agreement Claim" shall have the meaning given to such term in Section 5.07(d) of the Partnership Agreement. "Cure Period" shall mean the period ending sixty (60) days after the earlier to occur of (i) the agreement between the Non-Managing Partners that a Material Breach has occurred and (ii) if a dispute exists between the Non-Managing Partners as to whether a Material Breach has occurred, a determination through the Dispute Resolution Mechanism that a Material Breach has occurred; provided, that if during the sixty (60) day period, the Operating Partner has promptly presented to the Non-Operating Partner a remedy to cure such Material Breach and has promptly begun and continuously pursued good faith efforts in attempting to cure such Material Breach, then the Cure Period shall be extended for so long as the Operating Partner is continuously pursuing good faith efforts to cure such Material Breach, but in no event shall the Cure Period be extended for more than a reasonable period of time, taking into account the nature of the cure. "Current Interest" shall have the meaning given to such term in Section 4.01 of the Partnership Agreement. "Current Interest Cash" shall mean, for any period the sum of (i) the consolidated net income (or loss) of the Partnership for such period; plus (ii) the depreciation, depletion, amortization and all other non-cash expenses of the Partnership, including the amount of net book value eliminated as a result of any asset sales made by the Partnership during such period; plus (iii) the net cash proceeds with respect to any prior period asset sales or liquidation of other non-current assets of the Partnership received during the period to the extent such proceeds are not already included in the consolidated net income of the Partnership for such period; minus (iv) the non-cash proceeds of any asset sales made by the Partnership during such period to the extent such non-cash proceeds are included in the consolidated net income of the Partnership for such period; minus (v) the Partnership's earnings from non-consolidated investees during such period; plus (vi) the Partnership's share of losses in non-consolidated investees during such period; plus (vii) dividends and distributions of cash and cash equivalents received by the Partnership from non-consolidated investees during such period; minus (viii) investments of cash and cash equivalents made by the Partnership in non-consolidated investees during such period; minus (ix) capital expenditures (a) excluding expenditures for Capital Projects but (b) including capital expenditures for projects identified in Annex VII to the Contribution Agreement but only to the extend that the aggregate among of such expenditures in any year for projects identified in Annex VII, or alternative projects of a substantially similar nature substituted by agreement of the parties, does not exceed 110% of the aggregate amount shown on such Annex VII as being spent for such projects in that year; minus (x) the extent not previously deducted in computing the consolidated net income (or loss) of the Partnership, expenditures of the Partnership relating to the shut down of facilities and reclamation of land during such period and other payments in respect of previously accrued liabilities; minus (xi) principal repayments of Partnership indebtedness; minus (xii) Capital Proceeds of the Partnership during such period; minus (xiii) increases in cash reserves of the Partnership; plus (xiv) decreases in cash reserves of the Partnership; plus (xv) after consideration of noncash accruals and related expenditures identified in (ii) and (x) above, decreases in working capital loans from third parties at the end of the period. In calculating Current Interest Cash, to the extend applicable, each item involved in the calculation shall be determined using the financial statements of the Partnership prepared in accordance with generally accepted accounting principles. Furthermore, any expenditure that would otherwise be deducted pursuant to this definition of Current Interest Cash shall not be deducted from consolidated net income to the extent that such expenditure is funded by either the incurrence of indebtedness by the Partnership or cash contributions by the Partners. "Debt" shall mean, as to any Person: (a) indebtedness created, issued or incurred by such Person for borrowed money (whether by loan or the issuance and sale of debt securities; (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade or other accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade or other accounts payable are payable within ninety (90) days of the date the respective goods are delivered or respective services rendered; )c) Debt of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) capital lease obligations of such Person required to be reported as such in accordance with generally accepted accounting principles from time to time in effect; and (f) Debt of others guaranteed by such Person. "Delaware Law" shall have the meaning given to such term in the Partnership Agreement and in the Parent Agreement. "Developing Partner" shall have the meaning given to such term in Section 2.08(c) of the Partnership Agreement. "Dispute Resolution Mechanism" shall mean a proceeding for resolution of disputes, submitted to Endispute Incorporated ("Endispute:) in San Francisco, California, with the Non-Managing Partner whose position is substantially upheld by Endispute in such proceeding being entitled to recover its attorneys' fees and expenses from the other Non-Managing Partner. If at the time that the dispute occurs Endispute is not in the business of resolving disputes in San Francisco, California, the Non-Managing Partners shall ask the Chief Judge of the United States Court of Appeals for the Ninth Circuit to select a similar firm located in San Francisco, California. "Dissolution Event" shall have the meaning given to such term in Section 12.01 of the Partnership Agreement. "Distributable Cash" shall mean, with respect to any Partner for any period, the sum of (i) Current Interest Cash for such period multiplied by such Partner's Current Interest as of the last day of such period, plus (ii) Capital Interest Cash for such period multiplied by such Partner's Capital Interest as of the last day of such period, except that the Capital Proceeds from a Capital Transaction occurring in a prior period will be calculated using the Capital Interest in effect as of the last day of the period in which the Capital Transaction which generated such Capital Proceeds was deemed to have occurred. "Electing Partner" shall have the meaning given to such term in Section 2.08(c) of the Partnership Agreement. "Employee Cost Sharing Agreement" shall mean that certain Employee Cost Sharing Agreement dated as of July 1, 1993 between IMC and the Managing Partner. "Environmental Liabilities" shall have the meaning given to such term in the Contribution Agreement. "Equivalent Sale Price" means the Triggering Event Partnership Value, multiplied by the Capital Interest of the Non-Triggering Partner immediately prior to the Triggering Event. "Excluded Liability" shall have the meaning given to such term in the Contribution Agreement. "Exercise Notice" has the meaning given to such term in Section 7.04 of the Partnership Agreement. "Exercising Partner" shall have the meaning given to such term in Section 2.08(b) of the Partnership Agreement. "Expansion" shall mean: (i) the construction or development of a new mine, plant, building, structure or other facility for the purpose of developing a new source of production capacity; (ii) any construction, development, process improvement or other improvement primarily designed to increase the production capacity or decrease the cost structure of any existing mine, plant or facility; or (iii) any purchases of materials related to the items in (i) or (ii). "FASB 109" shall mean the Financial Accounting Standards Board Statement of Financial Accounting Standard No. 109. "FCC" shall mean Freeport Chemical Company, a Delaware corporation. "Final IMC GPCo Liquidating Distribution" shall have the meaning given to such term in the Partnership Agreement and in the Parent Agreement. "Fiscal Year" shall mean the twelve month period ending June 30th for each year during the life of the Partnership or such other month period as may be defined as the Fiscal Year of the Partnership pursuant to Section 9.01 of the Partnership Agreement. "FRP" shall mean Freeport-McMoRan Resource partners, Limited Partnership, a Delaware limited partnership and its successors. "FRP Alternate" and "FRP Alternates" shall have the meanings given to such terms in Section 6.04 of the Partnership Agreement. "FRP GPCo" shall have the meaning given to such term in the Parent Agreement. "FRP GPCo/FCC/FTX Merger Documents" shall have the meaning given to such term in the Amendment, Consent Waiver Agreement. "FRP GPCo/FCC/FTX Mergers" shall have the meaning given to such term in the Partnership Agreement and in the Parent Agreement. "FRP Partner" shall mean (i) Agrico, Limited Partnership, a Delaware limited partnership, or (ii) FRP or the Affiliate of FRP that succeeds to the obligations, assets, properties, rights and interests of Agrico, Limited Partnership, as a result of the merger, liquidation or dissolution of Agrico, Limited Partnership (or to which the Partnership Interests of Agrico, Limited Partnership is transferred) as contemplated by the Amendment, Waiver and Consent Agreement or (iii) any other Affiliate of FRP which succeeds to the Partnership Interests of the entity identified in (i) or (ii) above by means of the purchase, transfer, assignment or other conveyance or succession of such Partnership Interests in accordance with the terms of the Partnership Agreement. "FRP Representative" and FRP Representatives" shall have the meanings given to such terms in Section 6.04 of the Partnership Agreement. "FRP Transferred Sales Employee" shall have the meaning given to such term in the Contribution Agreement. "FTX" shall mean Freeport-McMoRan Inc., a Delaware corporation and its successors. "FTX Common Shares" shall have the meaning given to such term in the Parent Agreement. "GNP Deflator Index" shall mean the GNP deflator index (final) as published by the U.S. Department of Commerce (commencing with the index as of June 30, 1993). "Global" or "Group" shall mean IMC Global Inc. (formerly IMC Fertilizer Group, Inc.), a Delaware corporation and its successors. "Group Structure" shall have the meaning given to such term in the Parent Agreement. "IMC" or "Operations" shall mean IMC Global Operations Inc. (formerly IMC Fertilizer, Inc.), a Delaware corporation and its successors. "IMC Alternate" and "IMC Alternates" shall have the meanings given to such terms in Section 6.04 of the Partnership Agreement. "IMC Common Shares" shall have the meaning given to such term in the Parent Agreement. "IMC GPCo" shall mean IMC-Agrico GP Company, a Delaware corporation. "IMC GPCo Liquidation" shall have the meaning given to such term in the Parent Agreement. "IMC GPCo Liquidation Period" shall have the meaning given to that term in Article I of the Partnership Agreement. "IMC GPCo Plan of Liquidation" shall mean the Agreement and Plan of Complete Liquidation and Dissolution among Operations, IMC GPCo and MPCo. "IMC Partner" shall, with respect to each such Agreement, have the meaning given to such term in the Parent Agreement and the Partnership Agreement, respectively. "IMC Plans" shall have the meaning given to such term in Section 9.06 of the Partnership Agreement. "IMC Representative" and "IMC Representatives" shall have the meanings given to such terms in Section 6.04 of the Partnership Agreement. "Initial IMC GPCo Liquidating Distribution" shall have the meaning given to such term in the Partnership Agreement and the Parent Agreement. "Intervening Person" of either Ultimate Parent means a Person that is controlled by such Ultimate Parent and which has an ownership interest in either the IMC Partner or the FRP Partner, as the case may be, or in another Intervening Person of such Ultimate Parent. "Leased IMC Employees" shall have the meaning given to such term in the Contribution Agreement. "Leasing Agreement" shall have the meaning given to such term in the Contribution Agreement. "Lien" shall mean, with respect to any asset, and mortgage, lien, pledge, charge, security interest, easement, right of way, title defect or encumbrance of any kind with respect to such asset. "Limestone Cost Sharing Agreement" shall mean that certain Limestone Cost Sharing Agreement dated as of July 1, 1993, among IMC, the Managing Partner and the Partnership. "Liquidating Partner" shall have the meaning given to such term in Section 12.02 of the Partnership Agreement. "Major Decision" shall have the meaning given to such term in Section 6.07 of the Partnership Agreement. "Managing Partner" shall mean MPCo in its capacity as Managing Partner under the Partnership Agreement. "Marketing and Administrative Services Agreement" shall have the meaning given to such term in the Contribution Agreement. "Material Asset Sale" shall mean the sale or other disposition of any asset of the Partnership other than in the ordinary course of business, if, as a result of such sale, the aggregate Asset Sale Amount for all such sales other than in the ordinary course of business consummated in the Fiscal Year of such sale would exceed the Base Sale Amount for such Fiscal Year. "Material Breach" shall mean the occurrence of either of the following events" (i) a material failure by the Managing Partner to perform its duties or responsibilities as Managing Partner under this Agreement of (ii) the Bankruptcy of the Operating Partner or any of its direct or indirect parent entities. "Material Breach Event" shall mean either: (a) (i) the occurrence of a Material Breach referred to in clause (i) of the definition of "Material Breach", (ii) the giving of written notice of such Material Breach by the Non-Operating Partner to the Operating Partner and (iii) the failure to cure such Material Breach during the Cure Period; (b) the occurrence of a Material Breach referred to in clause (ii) of the definition of "Material Breach" and, if such Material Breach results from a Bankruptcy referred to in clause (i) of the definition of "Bankruptcy", the continuance of such Material Breach for sixty (60) days; or (c) the occurrence of an event that would have constituted a Triggering Event but for the proviso in the definition of "Triggering Event." A "cure" of a Material Breach referred to in clause (i) of the definition of "Material Breach" includes, without limitation, reimbursement of the Partnership for any costs, expenses, liabilities, obligations, losses, damages or penalties caused by such Material Breach. "Material Facility" shall mean any facility of the Partnership having a book value, as shown on the latest quarterly balance sheet of the Partnership, in excess of five percent (5%) of the net property, plant and equipment of the Partnership, as shown on the latest quarterly balance sheet of the Partnership, at the time of such determination. "Material Obligation" shall mean any liability or obligation (known to the Managing Partner at the time of incurrence or assumption) incurred or assumed by or on behalf of the Partnership for Expansion and other than in the ordinary course of business in an aggregate amount, based on the knowledge of the Managing Partner at the time of such incurrence or assumption, in excess of the Base Obligation Amount in effect at the time such liability or obligation is incurred or assumed. "Material Purchase and Cost Sharing Agreement" shall mean that certain Material Purchase and Cost Sharing Agreement dated as of July 1, 1993 between IMC and the Partnership. "MP Benefit Plans" shall have the meaning given to such term in the Contribution Agreement. "MB Contribution Plans" shall have the meaning given to such term in the Contribution Agreement. "MB Pension Plans" shall have the meaning given to such term in the Contribution Agreement. "MPCo" shall mean IMC-Agrico MP, Inc., a Delaware corporation and its successors. "Negotiating Interval" shall have the meaning given to such term in the Parent Agreement. "Negotiation period" shall have the meaning given to such term in Section 7.02(b) of the Partnership Agreement. "New Partners" shall have the meaning given to such term in Section 12.01 of the Partnership Agreement. "Non-Affiliated Unitholders" means limited partners of FRP other than FTX and its Affiliates. "Non-Contributing Partner" shall have the meaning given to such term in Section 3.03 of the Partnership Agreement. "Non-Contributing Partner's Share" shall have the meaning given to such term in Section 3.03 of the Partnership Agreement. "Non-Defaulting Partner" shall have the meaning given to such term in Section 5.07(d) of the Partnership Agreement. "Non-Developing partner" shall have the meaning given to such term in Section 2.08(c) of the Partnership Agreement. "Non-Managing Partner shall mean any Partner other than the Managing Partner. "Non-Operating Partner" shall have the meaning given to such term in Section 2.06 of the Partnership Agreement. "Non-Presenting Partner" shall have the meaning given to such term in Section 2.08(b) of the Partnership Agreement. "Non-Qualifying Income" shall mean any income other than Qualifying Income. "Non-Triggering Partner" means (i) if the IMC Partner is the Triggering Partner, the FRP Partner and (ii) if the FRP Partner is the Triggering Partner, the IMC Partner (which, during the IMC GPCo Liquidation period, shall mean both Operations and IMC GPCo). "Non-Withdrawing Partner" shall have the meaning given to such term in Section 12.01 of the Partnership Agreement. "No-Shop Period" shall have the meaning given to such term in Section 7.02(b) of the Partnership Agreement. "No-Shop Interval" shall have the meaning given to such term in Section 3.0(d) of the Parent Agreement. "Notice of Intent to Sell" shall have the meaning given to such term in Section 7.02(b) of the Partnership Agreement. "Notice of Intent to Transfer" shall have the meaning given to such term in Section 3.0(d) of the Parent Agreement. "Notified Partner" shall have the meaning given to such term in Section 7.02(b) of the Partnership Agreement. "Notified Person" shall have the meaning given to such term in Section 3.0(d) of the Parent Agreement. "Operating Partner" shall have the meaning given to such term in Section 2.06 of the Partnership Agreement. "Operations" or "IMC" shall mean IMC Global Operations Inc. (formerly IMC Fertilizer, Inc.), a Delaware corporation and its successors. "Parent Agreement" shall mean the Parent Agreement among IMC, FRP and the Partnership, as amended and restated as of May 26, 1995, and as thereafter amended, modified or supplemented from time to time. "Partner" or "Partners" shall have the meanings given to such terms in Article I to the Partnership Agreement. "Partner Loan" shall have the meaning given to such term in Section 3.03 of the Partnership Agreement. "Partnership" shall mean IMC-Agrico Company, a Delaware general partnership formed pursuant to the Partnership Agreement. "Partnership Agreement" shall mean the Partnership Agreement between Operations, IMC GPCo, FRP and the Managing Partner, as amended and restated as of July 1, 1993 and as further amended and restated as of May 26, 1995 and as thereafter amended, modified or supplemented from time to time. "Partnership Interests" shall mean all right, title and interest of a Partner in the Partnership, including, without limitation, its Current Interest and Capital Interest. "Partnership Units" shall have the meaning given to such term in the Parent Agreement. "Partnership Working Capital Facility" shall have the meaning given to such term in Section 3.02(b) of the Partnership Agreement. "Permitted Liens" shall have the meaning given to such term in the Contribution Agreement. "Person" shall mean an individual, a partnership, a corporation, a trust, an unincorporated organization, a governmental authority and any other entity. "PhosChem" shall have the meaning given to such term in Section 2.03 of the Partnership Agreement. "Phosphate Chemicals Business" means and includes (i) the exploration for, and the acquisition, leasing, development, mining and disposition of, phosphate rock reserves, (ii) engaging in contract mining, tolling, processing, management and other activities regarding the phosphate-related reserves, properties, facilities or materials of third parties, (iii) the processing, manufacture, purchase, exchange and sale of phosphate fertilizers and other phosphate chemicals (including, without limitation, monoammonium phosphate, diammonium phosphate, triple superphosphate and phosphoric acid) and related raw materials and by-products (including, without limitation, the purchase and use of sulphur, but excluding the manufacture, production, exchange or sale of sulphur), (iv) the processing, manufacture, purchase, exchange and sale of nitrogen chemicals (including anhydrous ammonia and urea), (v) the extraction and recovery from phosphate rock and the exchange and sale of uranium oxide, (vi) the management and operation of agricultural, farming and livestock businesses as an incidental activity relating to holding lands originally acquired or leased by the Partnership or one of the Partners as phosphate rock reserves; (vii) the acquisition, construction, ownership, leasing, operation, management, alteration and disposition of real property (and interests therein) and mining, manufacturing, mixing, granulation, processing, refining, shipping and other equipment and facilities (including, without limitation, motor vehicles, railroads, railcars, pipelines, storage facilities, ports and vessels) related to any of the foregoing, (viii) developing, subdividing, construction roads, sewers, utility, water, sewage and water treatment and other facilities on, constructing and selling, leasing or managing residential, commercial and other improvements on, and otherwise dealing with, reclaimed and other land originally acquired or leased as phosphate rock reserves, and (ix) all other business and activities related or incidental thereto. Notwithstanding the foregoing, "Phosphate Chemicals Business" shall not include (i) the animal feeds business or (ii) the mixed fertilizer business. "PhosRock" shall have the meaning given to such term in Section 2.03 of the Partnership Agreement. "Policy Committee" shall have the meaning given to such term in Section 6.04 of the Partnership Agreement. "Presenting Partner" shall have the meaning given to such term in Section 2.08(b) of the Partnership Agreement. "Prime Rate" shall mean the rate publicly announced from time to time by Citibank, N.A. in New York City as its prime rate. "Purchasing Partner" shall have the meaning given to such term in Section 7.04 of the Partnership Agreement. "Qualified Appraiser" shall mean an MIA appraiser which has been appraising property in the county in which the real property to be valued is located for at least the preceding five (5) years. "Qualified Investment Banking Firm" shall mean in investment banking firm of national and international reputation. "Qualifying Income" shall have the same meaning as the term "qualifying income" defined in Section 7704(d) of the Code and any successor provision. "Real Estate Appraisal Procedure" shall mean the following: If the value of any real property to be determined under the Partnership Agreement cannot timely be established by agreement, then either the IMC Partner or the FRP Partner, by written notice to the other, may invoke the process described below. Each of the IMC Partner and the FRP Partner shall appoint its Qualified Appraiser to conduct an appropriate valuation and shall give notice of such appointment to the other Non-Managing Partner within fifteen (15) days after delivery of the notice invoking such procedure. If either the IMC Partner or the FRP Partner does not appoint its Qualified Appraiser within such fifteen (15) day period, the valuation made by the Qualified Appraiser appointed by the other Non-Managing Partner shall be conclusive and binding on the Partners. If within thirty (30) days after appointment of the Qualified Appraisers, such Qualified Appraisers are unable to agree upon an appropriate valuation but the higher valuation is not greater than 110% of the lower valuation, then the valuation which shall be binding on the Partners shall be the average of the two (2) valuations given by the Qualified Appraisers. If the higher valuation is greater than 110% of the lower valuation, the two (2) Qualified Appraisers jointly shall appoint a third Qualified Appraiser within fifteen (15) days thereafter, or, if they do not do so, either the IMC partner or the FRP Partner may request MIA, or any organization successor thereto, to appoint the third Qualified Appraiser. The decision of the third Qualified Appraiser shall be given within sixty (60) days after its appointment, shall be at least equal to the lower valuation, shall not exceed the higher valuation and shall be binding on the Partners. "Real Estate Development Project" shall mean any project involving the developing, subdividing, construction roads, sewers, utility, water, sewage and water treatment and other facilities on, construction and selling, leasing or managing residential, commercial and other improvements on, and otherwise dealing with, the land of the Partnership. "Related Persons" shall have the meaning given to such term in Section 8.01 of the Partnership Agreement. "Representatives" shall have the meaning given to such term in Section 6.04 of the Partnership Agreement. "Residual Net Loss" for any period, means the excess of all items of expense over all items of income determined in accordance with the principles set forth in Section 4.02(c) of the Partnership Agreement, as computed and adjusted for allocations pursuant to Section 5.02 of the Partnership Agreement. "Retained Environmental Liability" shall have the meaning given to such term in Section 6.08 of the Partnership Agreement. "Retaining Partner" shall have the meaning given to such term in Section 6.08 of the Partnership Agreement. "SEC" shall mean the Securities and Exchange Commission of the United States of America or any successor agency. "Soliciting Partner" shall have the meaning given to such term in Section 7.02(b) of the Partnership Agreement. "Soliciting Person" shall have the meaning given to such term in the Parent Agreement. "Special Purpose Partner" shall mean any IMC Partner or FRP Partner (i) the principal business purpose of which is the ownership of its Partnership Interests in the Partnership and (ii) in respect of which its Partnership Interests in the Partnership constitute substantially all of its assets; provided, however, that (a) neither Operations nor FRP shall constitute a "Special Purpose Partner" unless Operations or FRP (x) acquires a Partnership Interest (or portion thereof) and (y) its ownership interest in all of its other business assets or operations constitutes a less than 5% portion of its total assets or operations, and (b) each of IMC GPCo and Agrico, Limited Partnership, as constituted as of May 26, 1995, would have constituted a "Special Purpose Partner" as of such date. Notwithstanding the foregoing, no entity that, as of the date such entity would have become a Special Purpose Partner pursuant to the foregoing definition, has outstanding securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (or any similar or successor provision or statute), shall be a Special Purpose Partner. "Subject Interest" shall have the meaning given to such term in the Parent Agreement. "Subject Partnership Interest" shall have the meaning given to such term in Section 7.02(b) of the Partnership Agreement. "Target Cash" for any year means the aggregate amount of Current Interest Cash that would have been required for that year, when distributed in accordance with the provisions of Sections 5.06 and 5.07 of the Partnership Agreement, to cause the ending balances in the Partners' Capital Accounts, immediately prior to the allocations provided in Sections 5.01, 5.02(c) and 5.02(d) of the Partnership Agreement, to be in the same ratio as the Capital Interest percentages for the following year. The calculation of Target Cash is illustrated by the formula attached to the Partnership Agreement as Schedule X. "Tax Matters Partner" shall have the meaning given to such term in Section 10.06 of the Partnership Agreement. "Transaction Agreements" shall mean collectively, the Contribution Agreement, the Partnership Agreement, the Parent Agreement and the Confidentiality Agreement. "Transaction Costs" shall mean, collectively, (i) all documentary stamp taxes, transfer taxes excise taxes and other similar taxes imposed in connection with the transactions contemplated by the Transaction Agreements by any state or other jurisdiction, including, without limitation, the State of Florida or the State of Louisiana, (ii) severance costs relating to the termination of employment of FRP's, FTX's and IMC's operating personnel to the extent such termination is directly attributable to the transactions contemplated by the Transaction Agreements, (iii) severance costs, not to exceed an aggregate of $12,600,000, relating to the termination of FRP's and FTX's marketing and administrative personnel to the extent such termination is directly attributable to the transactions contemplated by the Transaction Agreements and (iv) severance costs, not to exceed an aggregate of $1,000,000, relating to the termination of IMC's marketing and administrative personnel to the extent such termination is directly attributable to the transactions contemplated by the Transaction Agreements. "Transfer" shall have the meaning given to such term in Section 7.02(a) of the Partnership Agreement. "Transfer Price" means (A) in the case of a sale resulting from a Triggering Event described in clauses (ii) or (iv) of the definition thereof, the fair market value of the Partnership Interest that is the subject of such sale, as mutually determined by the IMC Partner and the FRP Partner or, if no such fair market value is agreed upon within thirty (30) days of the receipt by the Triggering Partner of the Exercise Notice by the Non-Triggering Partner, by the Appraisal Procedure; (b) in the case of a sale resulting from a Triggering Event described in clauses (i) or (iii) of the definition thereof, (I) if the transaction giving rise to the Triggering Event involved the sale of all or a portion of the Partnership Interest of the Triggering Partner, the Equivalent Sale Price and (II) if the transaction giving rise to the Triggering Event was the sale of an ownership interest in the IMC Partner or the FRP Partner or a Person controlling or under common control with the IMC Partner or the FRP Partner, the fair market value of the Non-Triggering Partner's Partnership Interest taking into account the structure of the transaction which gave rise to the Triggering Event, as mutually determined by the IMC Partner and the FRP Partner or, if no such fair market value is agreed upon within thirty (30) days of the receipt by the Triggering Partner of the Exercise Notice, by the Appraisal Procedure; and(C) in all other cases, the fair market value of the Partnership Interest (or portion thereof) to be sold or transferred in accordance with the terms of the Partnership Agreement as determined by the mutual agreement of the Partners, or, if the Partners fail to agree upon such fair market value within the time period set forth in the Partnership Agreement, determined in accordance with the Appraisal Procedure. "Triggering Event" means any of the following events: (i) at any time that the IMC Partner is the Operating Partner, the occurrence of a transaction which, after giving effect thereto, results in the Ultimate Parent of the IMC Partner owning less than a 35% Beneficial Interest in the Partnership; (ii) at any time that the IMC Partner is the Operating Partner, the occurrence of a transaction which, after giving effect thereto, results in 65% or more of the issued and outstanding voting stock of the Ultimate Parent of the IMC Partner being owned by an Affiliated Group; (iii) at any time that the FRP Partner is the Operating Partner, the occurrence of a transaction which results in the Ultimate Parent of the FRP Partner owning less than a 35% Beneficial Interest in the Partnership; or (iv) at any time that the FRP Partner is the Operating Partner, the occurrence of a transaction which results in 65% or more of the issued and outstanding stock of the Ultimate Parent of the FRP Partner being owned by an Affiliated Group; provided that none of the circumstances described in clauses (i) through (iv) above arising out of the foreclosure of a Lien covering the Partnership Interest of the IMC Partner (or, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) or the FRP Partner, the capital stock or partnership interests, as the case may be, of the IMC partner (or, during the IMC GPCo Liquidation Period, Operations or IMC GPCo) or the FRP Partner of the capital stock or partnership interests of any Intervening Person shall constitute a "Triggering Event." "Triggering Event Notice" shall have the meaning given to such term in Section 7.04 of the Partnership Agreement. "Triggering Event Partnership Value" means an amount equal to the purchase price paid to the Triggering Partner by the Purchasing Partner in the transaction giving rise to the Triggering Event, divided by the portion of the Capital Interest of the Triggering Partner sold in such transaction. "Triggering Partner" means (A) in the case of a Triggering Event described in clauses (i) or (ii) of the definition thereof, the IMC Partner and (B) in the case of a Triggering Event described in clauses (iii) or (iv) or the definition thereof, the FRP Partner. "Ultimate Parent" means (i) with respect to the IMC Partner, (A) initially, Global, and (B) if at any time a Triggering Event occurred without a Triggering Event Notice having been delivered, the Affiliated Group that acquired 65% or more of the stock of Group or the Person that is then the Ultimate Parent of the IMC Partner and (ii) with respect to the FRP Partner, (A) initially, FTX and (B) if at any time a Triggering Event referred to in clause (iv) of the definition thereof shall have occurred without a Triggering Event Notice having been delivered, the Affiliated Group that acquired 65% or more of the stock of FTX or the Person that is then the Ultimate Parent of the FRP Partner. "Withdrawing Partner" shall have the meaning given to such term in Section 12.01 of the Partnership Agreement. "Working Capital Contribution Arrangement" shall have the meaning given to such term in Section 3.02(b) of the Partnership Agreement. EX-10 3 EXHIBIT 10.5 EXECUTION COPY AMENDED AND RESTATED PARENT AGREEMENT THIS AMENDED AND RESTATED PARENT AGREEMENT (this "Agreement"), made as of the 1st day of July, 1993 and amended and restated as of the 26th day of May, 1995 among IMC GLOBAL OPERATIONS INC. (formerly IMC Fertilizer, Inc.), a Delaware corporation ("Operations"), FREEPORT- McMoRan RESOURCE PARTNERS LIMITED PARTNERSHIP, a Delaware limited partnership ("FRP"), FREEPORT-McMoRan INC., a Delaware corporation ("FTX"), and IMC-AGRICO COMPANY, a Delaware general partnership (the "Partnership"). WITNESSETH WHEREAS, pursuant to a Contribution Agreement dated as of April 5, 1993, as amended (as so amended, the "Contribution Agreement") between Operations and FRP, Operations and FRP agreed to cause the formation of the Partnership to engage in the Phosphate Chemicals Business, and Operations agreed to form IMC-Agrico GP Company, a subsidiary of Operations ("IMC GPCo"), and FRP agreed to form Agrico, Limited Partnership, a Delaware limited partnership, to be non-managing general partners of the Partnership; WHEREAS, it was a condition precedent to the obligations of Operations and FRP under the Contribution Agreement that each of Operations, IMC Global Inc. (formerly IMC Fertilizer Group, Inc.), a Delaware corporation ("Global"), FTX, FRP and the Partnership shall have entered into the Parent Agreement, as originally entered into as of July 1, 1993; WHEREAS, the parties hereto have approved and consented to (i) (a) the voluntary complete liquidation and dissolution of IMC GPCo, in accordance with the General Corporation Law of the State of Delaware ("Delaware Law"), (b) the admission of Operations as a Partner in the Partnership in accordance with the terms of the Partnership Agreement (as defined below), (c) the assumption by Operations (A) as of the date hereof, of 80% of all obligations of IMC GPCo incurred by IMC GPCo (x) as a general partner of the Partnership and (y) pursuant to the terms of the Partnership Agreement, and (B) upon the completion of the liquidation and dissolution of IMC GPCo, of all remaining obligations of IMC GPCo, (d) the transfer to Operations of the assets, properties, rights and interests of IMC GPCo, and (e) the repurchase by IMC GPCo of the preferred stock of IMC GPCo owned by IMC-Agrico MP, Inc., a Delaware corporation ("MPCo") at its liquidation value (collectively, the "IMC GPCo Liquidation"), in each case in accordance with the Agreement and Plan of Complete Liquidation and Dissolution dated as of May 26, 1995 among Operations, IMC GPCo and MPCo (the "IMC GPCo Plan of Liquidation") and (ii) (a) liquidation of Agrico, Inc. ("FRP GPCo"), a Delaware corporation and the owner of a 0.2% general partnership interest in the FRP Partner, or the merger of FRP GPCo with and into Freeport Chemical Company, a Delaware corporation ("FCC"), and the liquidation of FCC or the merger of FCC with and into FTX, in each case in accordance with the FRP GPCo/FCC/FTX Merger Documents (the "FRP GPCo/FCC/FTX Mergers"), with the result that FTX shall become the owner of such 0.2% general partnership interest in the FRP Partner and shall have assumed as of the date of completion of such FRP GPCo/FCC/FTX Mergers all obligations of FRP GPCo and FCC, (b) the repurchase by FRP GPCo of the preferred Stock of FRP GPCo owned by MPCo at its liquidation value, and (c) at the option of FTX AND FRP, the merger, liquidation or dissolution of the FRP Partner under Delaware Law at some time in the future (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) and the admission of FRP or an Affiliate of FRP as a Partner in the Partnership, in each case, in accordance with this Agreement, the Amended and Restated Partnership Agreement dated as of July 1, 1993, and further amended and restated as of May 26, 1995, among IMC GPCo, the FRP Partner and MPCo (the "Partnership Agreement"), and the Amendment, Waiver and Consent Agreement dated as of May 26, 1995 among Global, Operations, IMC GPCo, MPCo, IMC-Agrico Company, a Delaware general partnership, FTX, FRP and the FRP Partner (the "Amendment, Waiver and Consent Agreement"); WHEREAS, the above described transactions are to be accomplished in the following manner: (i) with respect to the liquidation and dissolution of IMC GPCo, 80% of the interests of IMC GPCo shall be transferred to Operations effective as of May 26, 1995 (except that 100% of IMC GPCo's 50% common stock interest in MPCo shall be transferred to Operations as of May 26, 1995) and the preferred stock of IMC GPCo owned by MPCo shall be repurchased by IMC GPCo at its liquidation value as of May 26, 1995 (the "Initial IMC GPCo Liquidating Distribution"), with the remaining 20% of such interests (other than IMC GPCo's common stock interest in MPCo) to be transferred to Operations (the "Final IMC GPCo Liquidating Distribution") in accordance with the following time schedule and the terms of the IMC GPCo Plan of Liquidation: (A) if (x) FTX and FRP elect by written notice to the Partners and the Partnership, after November 30, 1995 and on or prior to June 4, 1996, to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) as contemplated by this Agreement, the Partnership Agreement and the Amendment, Waiver and Consent Agreement and (y) such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) is completed not earlier than June 5, 1996 and not later than June 15, 1996, the Final IMC GPCo Liquidating Distribution shall be undertaken promptly after June 22, 1997; (B) if (x) FTX and FRP elect by written notice to the Partners and the Partnership, after November 30, 1995 and on or prior to June 4, 1996, to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) as contemplated by this Agreement, the Partnership Agreement and the Amendment, Waiver and Consent Agreement, but (y) such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) is not completed by June 15, 1996, the Final IMC GPCo Liquidating Distribution shall be undertaken after June 15, 1996 and shall be completed no later than June 30, 1996; and (C) if FTX and FRP do not elect, after November 30, 1995 and on or prior to June 4, 1996, to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer by the FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP) as contemplated by the Amendment, Waiver and Consent Agreement, the Final IMC GPCo Liquidating Distribution shall be undertaken after June 4, 1996 and shall be completed by June 30, 1996; and (ii) with respect to such optional merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests), such option may be exercised in accordance with the terms of the Partnership Agreement and the Amendment, Waiver and Consent Agreement: at any time after November 30, 1995 and on or prior to June 4, 1996; provided that if FTX and FRP exercise such option on or prior to June 4, 1996, their right to cause such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) at that time will be forfeited unless such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) is completed not earlier than June 5, 1996 and not later than June 15, 1996; provided further that if after November 30, 1995 and on or prior to June 4, 1996 FTX and FRP exercise such option, but such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) is not completed on or prior to June 15, 1996, FTX and FRP will have an additional option to cause such merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) at any time after July 15, 1997; and provided further that if after November 30, 1995 and on or prior to June 4, 1996, FTX and FRP do not exercise their option to cause the merger, liquidation or dissolution of the FRP Partner (or the transfer of its Partnership Interests), FTX and FRP will have the right to exercise such option at any time after July 15, 1997; provided however that, notwithstanding the provisions of this paragraph (ii), FTX and FRP may merge, liquidate or dissolve the FRP Partner (or transfer its Partnership Interests) in accordance with the terms of the Amendment, Waiver and Consent Agreement at any time so long as FTX and FRP bear, and assume liability for, any expense, cost or loss (including any increase in taxes, other than any increase in income taxes which arises solely from the timing of the reporting of income, deductions and credits attributable to the normal business activities of the Partnership) suffered by the Partnership, any other Partner or any of their Related Persons resulting therefrom; and WHEREAS, the IMC GPCo Liquidation, the FRP GPCo/FCC/FTX Mergers and such optional merger, liquidation or dissolution of the FRP Partner (or such transfer of its Partnership Interests) make it necessary and desirable to amend and restate certain provisions of the Parent Agreement as originally entered into by the parties. NOW, THEREFORE, in consideration of the foregoing and the mutual obligations contained herein, the parties hereto agree as follows: 1.0 Defined Terms. Except as otherwise defined herein, capitalized terms used in this Agreement shall have the meaning ascribed to such terms in Exhibit A to the Amended and Restated Partnership Agreement, dated as of July 1, 1993 and further amended and restated as of May 26, 1995 among IMC GPCo, Operations, the FRP Partner and MPCo, as managing partner (the "Managing Partner"). During the period subsequent to the Initial IMC GPCo Liquidating Distribution and prior to the Final IMC GPCo Liquidating Distribution, the term "IMC Partner," as used herein, shall (except as otherwise indicated in this Agreement) refer to IMC GPCo and Operations, collectively; subsequent to the Final IMC GPCo Liquidating Distribution, such term shall refer to Operations; and at all such times, such term shall refer to any other Affiliate of Operations which succeeds to the Partnership Interests of IMC GPCo or Operations by means of the purchase, transfer, assignment or other conveyance or succession of such Partnership Interests in accordance with the terms of the Partnership Agreement. 2.0 Other and/or Competing Businesses. Each of FTX, FRP, Global and Operations agrees that neither it nor any of its Affiliates will, directly or indirectly, anywhere in the world, own, manage, operate, control or invest in any business that is engaged in the Phosphate Chemicals Business without first complying with the provisions of Section 2.08(b) of the Partnership Agreement, it being understood that (i) purchases and resales of phosphate chemicals in Canada by Affiliates of Operations in volumes not materially greater than the amounts indicated on Schedule 9.12 to the Partnership Agreement and (ii) the conduct of the business of the Rainbow Division of Operations, substantially as currently conducted shall not constitute a breach or violation of this Section 2.0. If FRP desires to expand its existing operations (or pursue other business opportunities which are part of or related to the Phosphate Chemicals Business) in Sri Lanka or to pursue the opportunities described in the memorandum of understanding between FTX and Ercros, S.A. relating to FESA and ENFERSA, it shall first offer such opportunities to the Partnership in accordance with the provisions of Section 2.08(b) of the Partnership Agreement; provided that if the Partnership elects to pursue any of such opportunities, the Partnership shall reimburse FRP in an amount equal to the direct costs incurred by FRP in connection with developing such opportunity prior to the date of the Partnership's election to pursue such opportunity. Notwithstanding the foregoing, any Person that acquires or succeeds to (or whose Affiliate acquires or succeeds to) any of the Partnership Interest in which Affiliates of FTX, FRP or Operations currently have an interest (or any Person that directly or indirectly has or acquires an interest in such Partnership Interest) shall not be subject to the provisions of this Section 2.0 with respect to any business conducted by such Person or its Affiliates that is conducted substantially as conducted on the date of such acquisition or succession. Notwithstanding the foregoing, nothing contained in this Section 2.0 shall prevent FTX, FRP, Global, Operations or any of their respective Affiliates from (A) owning, directly or indirectly, an aggregate of less than five percent (5%) of the common stock of, or other ownership interest in, any Person engaged in the Phosphate Chemicals Business or (B) acquiring (by stock purchase, asset purchase, merger, consolidation or otherwise) any Person engaged in the Phosphate Chemicals Business so long as (I) the revenues derived by such Person from its Phosphate Chemicals Business represent (and can reasonably be expected to continue to represent) less than ten percent (10%) of the total revenues of such Person and (II) the Person acquiring such Person (the "Acquiring Person") either offers to sell such Person's Phosphate Chemicals Business to the Partnership at its fair market value or sells such Person's Phosphate Chemicals Business to an independent third Person, it being understood that, in the case of this clause (B), the Acquiring Person may continue to own and operate, directly or indirectly, such acquired Person's Phosphate Chemicals Business if it has offered to sell such Phosphate Chemicals Business to the Partnership in accordance with this sentence and (x) if any Affiliate of the FRP Partner is the Acquiring Person, two (2) Policy Committee Representatives or Alternates of the IMC Partner (or any combination thereof) fail, on behalf of the Partnership, to accept such offer within thirty (30) days of such offer to sell, or (y) if any Affiliate of IMC GPCo or Operations is the Acquiring Person, two (2) Policy Committee Representatives or Alternates of the FRP Partner (or any combination thereof) fail, on behalf of the Partnership to accept such offer within thirty (30) days of such offer to sell. Each party acknowledges and agrees that the covenants contained in this Section 2.0 have been negotiated in good faith by the parties hereto, and are reasonable and are not more restrictive or broader than necessary to protect the interests of the parties hereto, and would not achieve their intended purpose if they were on different terms or for periods of time shorter than the periods of time provided herein or were applied in more restrictive geographical areas than are provided herein. Each party further acknowledges and agrees that the business of the Partnership is highly competitive, that no party hereto would enter into this Agreement but for the covenants contained in this Section 2.0 and that such covenants are essential to protect the interests of the parties hereunder. If any provision of this Section 2.0 is held to be unenforceable because of the scope or area of its applicability, the court making such determination shall have the power to modify such scope and area or either of them, and such provision shall then be applicable in such modified form. 3.0 Interests in IMC GPCo, FRP GPCo and the FRP Partner; Appointment of CEOs. (a) At any time that the IMC Partner (which for purposes of this Section 3.0 and Section 4.0 of this Agreement shall mean, during the IMC GPCo Liquidation Period, either of IMC GPCo or Operations) is a Special Purpose Partner, neither Global nor Operations shall, without the prior written consent of FRP, cause or permit such IMC Partner to issue to any Person other than Global or Operations or their respective Affiliates any capital stock or other equity interests other than its capital stock or other equity interests issued and outstanding on the date such IMC Partner became a Special Purpose Partner (which, in the case of IMC GPCo, shall be July 1, 1993); and Provided, in each case, that FRP's written consent shall not be unreasonably withheld, but the granting of such consent may be conditioned upon, among other things (I) such IMC Partner's compliance with the applicable provisions of this Section 3.0 with respect to the issuance of such capital stock and (ii) FRP's being satisfied, in its reasonable discretion, that the issuance of such capital stock is being undertaken in a transaction and under circumstances that will not result in any material liability of such IMC Partner. (b) (i) Without the prior written consent of Operations, neither FRP nor FTX shall cause or permit FRP GPCo, prior to the completion of the FRP GPCo/FCC/FTX Mergers, to issue to any party other than FTX or its Affiliates (other than FRP) any capital stock of FRP GPCo other than its capital stock issued and outstanding on July 1, 1993, and (ii) at any time that the FRP Partner is a Special Purpose Partner, neither FRP nor FTX shall, without the prior written consent of Operations, cause or permit the FRP Partner to issue to any Person other than FRP or FTX or their respective Affiliates any partnership interests or other equity interests in the FRP Partner other than the partnership interests or other equity interests issued and outstanding on the date such FRP Partner became a Special Purpose Partner (which in the case of Agrico, Limited Partnership, shall be July 1, 1993); provided, in each case, that Operations' written consent shall not be unreasonably withheld, but the granting of such consent may be conditioned upon, among other things (i) FRP GPCo's or the FRP Partner's, as the case may be, compliance with the applicable provisions of this Section 3.0 with respect to the issuance of such capital stock or partnership or other equity interests and (ii) Operations' being satisfied, in its reasonable discretion, that the issuance of such capital stock or partnership or other equity interests is being undertaken in a transaction and under circumstances that will not result in any material liability of FRP GPCo or the FRP Partner, as the case may be. (c) Global and Operations will, and will cause their Affiliates to, use all commercially reasonable efforts to assure that the Chief Executive Officer from time to time of their Ultimate Parent is appointed to serve as the CEO of the IMC Partner. FTX will, and will cause its Affiliates to, use all commercially reasonable efforts to assure that the Chief Executive Officer of its Ultimate Parent is appointed to serve as the CEO of FRP GPCo (until completion of the FRP GPCo/FCC/FTX Mergers) and any future general partner (or controlling stockholder) of the FRP Partner other than FTX. Such efforts will in each case include without limitation voting, and causing its Affiliates to vote, all capital stock of IMC GPCo and/or Operations or of FRP GPCo or such other future general partner (or controlling stockholder) of the FRP Partner other than FTX, as the case may be, in favor of such appointment. (d) Except in compliance with this Section 3.0(d): (i) at any time that the IMC Partner is a Special Purpose Partner, neither Global nor Operations shall sell, transfer or otherwise dispose of any capital stock of or other equity interest in such IMC Partner to any Person other than an Affiliate of Operations or Global, as the case may be; (ii) prior to the completion of the FRP GPCo/FCC/FTX Mergers, FTX shall not sell, transfer or otherwise dispose of any capital stock of FRP GPCo to any Person other than an Affiliate of FTX (other than FRP); and (iii) at any time that the FRP Partner is a Special Purpose Partner, neither FTX nor FRP shall sell, transfer or otherwise dispose of any partnership interest or other equity interest in the FRP Partner to any Person other than an Affiliate of FRP or FTX, as the case may be. If (with respect to actions relating to (i) the capital stock of or other equity interests in the IMC Partner, at any time that such IMC Partner is a Special Purpose Partner, (ii) the capital stock of or other equity interests in FRP GPCo, prior to the completion of the FRP GPCo/FCC/FTX Mergers, (iii) the partnership interest or other equity interests in the FRP Partner, at any time that the FRP Partner is a Special Purpose Partner, Global, Operations, such IMC Partner, FRP, FRP GPCo, the FRP Partner or FTX or any of their respective Affiliates (in any case, the "Soliciting Person") desires to sell or otherwise dispose of to any third party (other than an Affiliate of such Soliciting Person), or to solicit bids from any third party (other than an Affiliate of such Soliciting Person) to purchase or otherwise acquire, directly or indirectly, all or any portion of the capital stock of or other equity interests in such IMC Partner or FRP GPCo, or any partnership interest or other equity interests in the FRP Partner, or to issue (other than to an Affiliate of such Soliciting Person) any capital stock of or other equity interests in such IMC Partner or FRP GPCo or any partnership interest or other equity interests in the FRP Partner (the "Subject Interest"), such Soliciting Person shall (i) if the Soliciting Person is Global, Operations, such IMC Partner or their Affiliates, notify FRP in writing of its desire to sell (or the desire of such IMC Partner to issue) such Subject Interest or (ii) if the Soliciting Person is FTX, FRP, FRP GPCo, the FRP Partner or their Affiliates, notify Operations in writing of its desire to sell (or the desire of the FRP Partner or FRP GPCo to issue) such Subject Interest. The notice referred to in the preceding sentence is hereinafter referred to as the "Notice of Intent to Transfer", and the Person receiving the Notice of Intent to Transfer is hereinafter referred to as the "Notified Person". For a period (the "No-Shop Interval") of thirty (30) days following the date it gives Notice of Intent to Transfer, and during the duration of any Negotiation Interval (as defined below), neither the Soliciting Person nor any of its Affiliates, officers, directors, employees, representatives or agents will, without the prior written consent of the Notified Person, commence or continue any discussions, negotiations or exchanges of information with any Person other than the Notified Person with respect to the issuance or sale of the Subject Interest. During the No-Shop Interval, both the Soliciting Person and the Notified Person shall co- operate with each other by exchanging all due diligence materials they deem to be reasonably necessary to determine the price and terms of any potential offer. If the Notified Person makes a bona fide offer to purchase the Subject Interest prior to the end of the No-Shop Interval, then the Soliciting Person and the Notified Person shall negotiate in good faith for the purchase and sale of the Subject Interest and the No-Shop Interval shall be extended for fifteen (15) days (the "Negotiation Interval"); provided that a decision to accept or reject shall be in the sole discretion of the Soliciting Person. If the Notified Person fails to make a bona fide offer to purchase the Subject Interest (the making or failure to make such offer being in its sole discretion) prior to the expiration of the No-Shop Interval, or if the Soliciting Person and the Notified Person fail to execute a letter of intent relating to the purchase and sale of the Subject Interest or terminate negotiations prior to the expiration of the Negotiation Interval, then the Soliciting Person may, but shall not be obligated to, immediately commence discussions, negotiations or exchanges of information with, and/or issue or sell its Subject Interest to, any third party; provided that if the Notified Person made a bona fide offer during the No-Shop Interval, the Soliciting Person shall not so issue or sell the Subject Interest to a third party unless (i) definitive, binding agreements relating to such issuance or sale are executed within two hundred twenty (220) days of the expiration of the Negotiation Interval, (ii) the cash value of the consideration received in connection with such sale is at least equal to 95% of the cash value of such offer made by the Notified Person and (iii) the transferee (and, where appropriate to create the same protections as existed prior to such transfer, the ultimate parent entity and the direct parent of such transferee) of such Subject Interest agrees in writing to be bound by the terms of this Agreement as if it had originally been a party hereto. The cash value of such issuance or sale and the cash value of such offer by the Notified Person, respectively, shall be determined by agreement between the Soliciting Person and the Notified Person (i) in the case of the cash value of such issuance or sale, within ten (10) days following the execution of definitive, binding agreements by the parties relating thereto and (ii) in the case of the cash value of such offer by the Notified Person, within ten (10) days following the earliest to occur of (A) the termination of negotiations between the Soliciting Person and the Notified Person and (B) the expiration of the Negotiation Interval, provided that if such agreement is not reached during either of such ten (10) day periods, then, in either such case, such cash value shall be determined by means of the Appraisal Procedure, with the expense thereof to be paid fifty percent (50%) by the Soliciting Person and fifty percent (50%) by the Notified Person and with the determination made thereby being final, unappealable, binding on both the Soliciting Person and the Notified Person and enforceable in a court of law or equity. After the expiration of such two hundred twenty (220) day period, such Subject Interest shall again be subject to the terms of this Section 3.0. The failure of either the Soliciting Person or the Notified Person to exercise its rights under this Section 3.0 shall not be deemed to be a waiver of its respective rights under this Section 3.0 with respect to subsequent Subject Interests. (e) The restrictions contained in this Section 3.0 shall not apply to bona fide pledges or other transfers as security, which shall be subject to Section 4.0 below. (f) Notwithstanding any other provision of this Agreement, no transfer described in this Section 3.0 (whether to an Affiliate of the transferor or otherwise) may be made unless (i) such transfer is pursuant to a written agreement pursuant to which the transferee (and, where appropriate to create the same protections as existed prior to such transfer, the ultimate parent entity and the direct parent of such transferee) agrees to be bound by all of the terms of this Agreement as if it were originally a party hereto, and (ii) such transfer does not cause a termination of the Partnership for Federal income tax purposes. 4.0 Liens. None of Operations, Global, FRP or FTX may (i) with respect to interests in the capital stock of or other equity interest in the IMC Partner, at any time that such IMC Partner is a Special Purpose Partner, (ii) with respect to interests in the capital stock of or other equity interests in FRP GPCo, prior to the completion of the FRP GPCo/FCC/FTX Mergers), and (iii) with respect to partnership interests or other equity interests in the FRP Partner, at any time that the FRP Partner is a Special Purpose Partner, except with the consent of the others (which consent may be granted or withheld in such Person's sole discretion), create or permit to exist, directly or indirectly, any Lien on its partnership interest or other equity interests in the FRP Partner or any portion thereof, or in its capital stock of or other equity interests in such IMC Partner or FRP GPCo or any portion thereof (except (i) Liens for current taxes not delinquent or taxes being contested in good faith and by appropriate proceedings, (ii) Liens arising in the ordinary course of business for sums not due or sums being contested in good faith and by appropriate proceedings and (iii) Liens pursuant to bona fide credit arrangements provided that a Person providing credit pursuant to such arrangements shall acknowledge that, if such Person acquires ownership of any such interest or capital stock, such interest or capital stock shall nevertheless be subject to all of the terms hereof). Any attempt by any of Global, Operations, FRP or FTX so to create or permit to exist, directly or indirectly, any Lien (other than the excepted Liens described in this Section 4.0 above) on its partnership interest or other equity interests in the FRP Partner or any portion thereof or in its capital stock of or other equity interests in such IMC Partner or FRP GPCo, or any portion thereof shall be null, void ab initio and of no force and effect. Notwithstanding anything to the contrary contained herein, if any Person obtains a Lien on a partnership interest or other equity interests in the FRP Partner or the capital stock of or other equity interests in such IMC Partner or FRP GPCo during a period during which such a Lien could not be granted to such Person in accordance with the terms of this Section 4.0 and forecloses on such Lien, any sale or other disposition to any Person other than the holder of such Lien in conjunction with or following such foreclosure of the partnership interest or other equity interests in the FRP Partner or the capital stock of or other equity interests in such IMC Partner or FRP GPCo upon which such Person foreclosed shall be subject to the terms of Section 3.0 hereof (including, without limitation, that the Person shall have the obligations of FTX, FRP, Global and Operations under such Section 3.0 and such Person shall perform such obligations in the context of a transfer to any other Person in conjunction with or following a foreclosure as if such was a transfer to which Section 3.0 applied). 5.0 Standstill With Respect to Operations and Global. Until the date that is five years following the earlier of (a) the date the Partnership ceases to exist or (b) the earliest date upon which neither FRP nor any of its Affiliates is a Partner, none of FRP, FTX, any successor to FTX as Administrative Managing General Partner of FRP, the chief executive officer of FTX as of July 1, 1993 nor any Person controlled by any of them shall, directly or indirectly, without the prior written consent of Operations and Global, (i) acquire, or offer or agree to acquire, any shares of common stock of Operations or Global, or securities convertible or exchangeable into, or rights to acquire, such common stock (collectively, the "IMC Common Shares") (provided that this clause (i) shall not restrict the chief executive officer of FTX as of July 1, 1993, or any benefit or similar plan (with respect to assets that are under independent management) that is maintained for employees of FRP, of FTX or any successor to FTX as the Administrative Managing General Partner of FRP or of any Person controlled by either of them from acquiring up to 2% of the outstanding common stock of either of Operations or Global solely for investment), (ii) solicit proxies or consents with respect to the common stock of Operations or Global, become a participant in any election contest relating to the election of directors of Operations or Global or initiate, propose or otherwise solicit holders of the common stock of Operations or Global with respect to any proposal, (iii) form, join or participate in a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with respect to the common stock of Operations or Global, (iv) arrange or participate in the arranging of financing for the purchase of shares of the common stock of Operations or Global, (v) propose, disclose any intent to propose or contact any officers, employees, directors, stockholders or agents of Operations or Global or any other Person or entity with respect to any acquisition of shares of the common stock of Operations or Global or acquisition, business combination, recapitalization or similar transaction with respect to Operations or Global or their respective Affiliates or any material amount of their assets, or request any waiver, amendment or termination of the provisions of this Section 5.0 or (vi) attempt in any way to control Operations or Global; provided that, notwithstanding clauses (i) through (vi) of this Section 5.0, FRP, FTX, any successor to FTX as the Administrative Managing General Partner of FRP or representatives of any either of them may make any proposals or communications to Operations or Global or their respective senior officers or to representatives of Operations or Global which do not require public disclosure to be made. 6.0 Standstill With Respect to FRP and FTX. Until the date that is five years following the earlier of (a) the date the Partnership ceases to exist or (b) the earliest date upon which neither Operations nor any of its Affiliates is a Partner, none of Operations, Global nor their respective chief executive officers as of July 1, 1993 nor any Person controlled by either of them shall, directly or indirectly, without the prior written consent of the Administrative Managing General Partner of FRP, (i) (A) acquire, or offer or agree to acquire, any partnership interests or depositary units representing partnership interests of FRP, or securities convertible or exchangeable into, or rights to acquire, such partnership interests or depositary units representing partnership interests (collectively, the "Partnership Units") or (B) acquire, or offer or agree to acquire, any shares of common stock of FTX, or securities convertible or exchangeable into, or rights to acquire, such common stock (collectively, the "FTX Common Shares") (provided that this clause (i) shall not restrict the chief executive officer of Global or Operations as of July 1, 1993, or any benefit or similar plan (with respect to assets that are under independent management) that is maintained for employees of Operations or of Global or of any Person controlled by either of them from acquiring up to 2% of either of the outstanding Partnership Units or FTX Common Shares solely for investment), (ii) solicit proxies or consents with respect to the Partnership Units or the FTX Common Shares, become a participant in any election contest relating to the removal or election of a general partner of FRP or the election of directors of FTX or initiate, propose or otherwise solicit holders of the Partnership Units or the FTX Common Shares with respect to any proposal, (iii) form, join or participate in a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with respect to the Partnership Units or the FTX Common Shares, (iv) arrange or participate in the arranging of financing for the purchase of Partnership Units or FTX Common Shares, (v) propose, disclose any intent to propose or contact any officers, employees, directors, stockholders or agents of FRP or FTX or any other Person or entity with respect to any acquisition of Partnership Units or FTX Common Shares or acquisition, business combination, recapitalization or similar transaction with respect to FRP or FTX or their respective Affiliates or any material amount of their respective assets, or request any waiver, amendment or termination of this Section 6.0 or (vi) attempt in any way to control FRP or FTX; provided that, notwithstanding clauses (i) through (vi) of this Section 6.0, Operations, Global or representatives of either of them may make any proposals or communications to FRP or FTX or the Administrative Managing General Partner of FRP or their respective senior officers or to representatives of FRP or FTX or the Administrative Managing General Partner of FRP which do not require public disclosure to be made. 7.0 Access. On and after the Closing Date, Operations and FRP will give each other and their respective agents reasonable access to its and its Affiliates' properties, books, records, employees and auditors to the extent necessary to permit Operations or FRP, as the case may be, to determine any matter relating to its rights and obligations under the Contribution Agreement or to any period ending on or before the Closing Date; provided that any such access by Operations or FRP shall not unreasonably interfere with the conduct of the business of the Person granting such access. The Person granted such access will hold, and will use all commercially reasonable efforts to cause its respective officers, directors, partners, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of law, all confidential documents and information concerning the Person granting such access or its Contributed Business provided to it pursuant to this Section 7.0. 8.0 Release of Guaranties. As promptly as practical after the Closing Date, each of Operations and FRP shall use all commercially reasonable efforts to cause the Partnership to have each of Operations and FRP and their respective Affiliates released from its financial obligations under any letters of credit, surety bonds or guaranties outstanding as of July 1, 1993 pursuant to which Operations or FRP, as the case may be, has guaranteed the obligations of its Contributed Business to third parties. 9.0 Tax Information and Other Reports. (a) Each of Operations and FRP shall provide to the Partnership such information, if any, as may be required by the Partnership for purposes of preparing all necessary federal, state and local Partnership income tax returns and information returns. (b) Operations and FRP shall cause the Managing Partner to provide to each of the shareholders of the Managing Partner (A) unaudited financial statements of the Managing Partner within 30 days after the end of each of the first three quarters of its fiscal year, and (B) audited financial statements, including notes, of the Managing Partner within 90 days after the end of its fiscal year. 10.0 Certain Actions. (a) The parties hereto shall not take any action with respect to (i) the Initial IMC GPCo Liquidating Distribution, (ii) the Final IMC GPCo Liquidating Distribution, (iii) the FRP GPCo/FCC/FTX Mergers, (iv) the optional merger, liquidation or dissolution of the FRP Partner (or the transfer of its Partnership Interests) contemplated by the Amendment, Waiver and Consent Agreement or (v) any related transactions in violation of the provisions of this Agreement, the Partnership Agreement, the Amendment, Waiver and Consent Agreement or the IMC GPCo Plan of Liquidation (in each case, taking into account the consent, waiver and other provisions of the Amendment Waiver and Consent Agreement). (b) As a condition to the effectiveness of the transactions described in Section 10.0(a) of this Agreement, each Partner hereby agrees to bear, and assume liability for, any expense, cost or loss (including any increase in taxes, other than any increase in income taxes which arises solely from the timing of the reporting of income, deductions and credits attributable to the normal business activities of the Partnership) suffered by the Partnership, any other Partner or any of their Related Persons arising from violation of Section 10.0(a) of this Agreement. 11.0 Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Except as set forth below: (i) Each of Operations and Global shall be relieved of all obligations under this Agreement on and after the date that such Person and its Affiliates cease to own a direct or indirect interest in the Partnership or (prior to the completion of the Final IMC GPCo Liquidating Distribution) IMC GPCo; and (ii) FRP and FTX shall be relieved of all obligations under this Agreement on and after the date that such Person and its Affiliates cease to own a direct or indirect interest in the FRP Partner or the Partnership; provided, that (x) the provisions of Sections 2.0, 7.0 and 9.0 shall continue to apply to each such Person for a period of two years after it ceases to own such an interest, (y) the provisions of Sections 5.0 and 6.0 shall continue to apply for the periods set forth therein and (z) the provisions of Sections 14.0, 15.0, 16.0 and 22.0 shall continue to apply. 12.0 Notices. All communications, notices and consents provided for herein shall be in writing and be given in person (or air freight delivery) or by means of telecopy (with request for assurance of receipt in a manner typical with respect to communications of that type) or by mail, and shall become effective (x) on delivery if given in person or by air freight delivery, (y) on the date of transmission if sent by telecopy or (z) three business days after being deposited in the mails, with proper postage for first-class registered or certified air mail prepaid. Notices shall be addressed as follows: (i) if to Operations at: 2100 Sanders Road Northbrook, Illinois 60062 Facsimile: 708-205-4805 Attention: Corporate Secretary (ii) If to IMC GPCo at: 2100 Sanders Road Northbrook, Illinois 60062 Facsimile: 708-205-4805 Attention: Corporate Secretary (iii) if to the Partnership at: 2100 Sanders Road Northbrook, Illinois 60062 Facsimile: 708-205-4805 Attention: Corporate Secretary (iv) if to FRP at: 1615 Poydras Street New Orleasn, Louisiana 70112 Facsimile: 504-585-3513 Attention: General Counsel (v) if to Global at: 2100 Sanders Road Northbrook, Illinois 60062 Facsimile: 708-205-4805 Attention: Corporate Secretary and (vi) if to FTX at: 1615 Poydras Street New Orleasn, Louisiana 70112 Facsimile: 504-585-3513 Attention: General Counsel or at such other address as any party hereto may from time to time designate by notice duly given in accordance with the provisions of this Section to the other parties hereto. 13.0 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the conflicts of law rules of such state. 14.0 Choice of Forum. All suits, actions or proceedings arising out of or relating to this Agreement shall be brought in a state or federal court located in the State of Delaware, which courts shall be an appropriate forum for all such suits, actions or proceedings. Each party hereby waives any objection which it may now or hereafter have to the laying of venue in any such court of any such suit, action or proceeding. 15.0 Consent to Jurisdiction. Each party hereby irrevocablysubmits to the jurisdiction of any state or federal court located in the State of Delaware in any such suit, action or proceeding referred to in Section 14.0 above. Operations hereby designates and appoints The Corporation Trust Company, with an office on the date hereof at 1209 Orange Street, Wilmington, Delaware 19801, or any successor thereof, as its authorized agent to accept and acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any state or federal court in the State of Delaware and agrees that service of process upon The Corporation Trust Company, or any successor thereof, shall be deemed in every respect effective service of process upon Operations in any such suit, action or proceeding. FRP hereby designates and appoints The Corporation Trust Company, with an office on the date hereof at 1209 Orange Street, Wilmington, Delaware 19801, or any successor thereof, as its authorized agent to accept and acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any state or federal court in the State of Delaware and agrees that service of process upon The Corporation Trust Company, or any successor thereof, shall be deemed in every respect effective service of process upon FRP in any such suit, action or proceeding. The Partnership hereby designates and appoints The Corporation Trust Company, with an office on the date hereof at 1209 Orange Street, Wilmington, Delaware 19801, or any successor thereof, as its authorized agent to accept and acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any state or federal court in the State of Delaware and agrees that service of process upon The Corporation Trust Company, or any successor thereof, shall be deemed in every respect effective service of process upon the Partnership in any such suit, action or proceeding. FTX hereby designates and appoints The Corporation Trust Company, with an office on the date hereof at 1209 Orange Street, Wilmington, Delaware 19801, or any successor thereof, as its authorized agent to accept and acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any state or federal court in the State of Delaware and agrees that service of process upon The Corporation Trust Company, or any successor thereof, shall be deemed in every respect effective service of process upon FTX in any such suit, action or proceeding. Global hereby designates and appoints The Corporation Trust Company, with an office on the date hereof at 1209 Orange Street, Wilmington, Delaware 19801, or any successor thereof, as its authorized agent to accept and acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any state or federal court in the State of Delaware and agrees that service of process upon The Corporation Trust Company, or any successor thereof, shall be deemed in every respect effective service of process upon Global in any such suit, action or proceeding. Said designation and appointment by each of Global, Operations, FTX, FRP and the Partnership shall be irrevocable during the term of this Agreement, and each party shall pay all costs and expenses of its respective designation and appointment as and when due and payable. 16.0 Waiver of Jury Trial. EACH OF GLOBAL, OPERATIONS, FTX, FRP AND THE PARTNERSHIP HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH SUIT, ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. 17.0 Entire Agreement; Amendments. This Agreement (including the exhibits hereto) together with the other Transaction Agreements (including any exhibits or schedules thereto) and the Amendment, Waiver and Consent Agreement embody the entire agreement and understanding between the parties with respect to the subject matter hereof and thereof, and supersede any agreements, representations, warranties or understandings, oral or written, between the parties with respect to the subject matter of this Agreement, the other Transaction Agreements entered into prior to the date hereof and the Amendment, Waiver and Consent Agreement. This Agreement may be amended or modified only by an instrument in writing executed by all of the parties hereto. 18.0 Execution in Counterparts. This Agreement may be signed in counterparts. Any single counterpart or set of counterparts signed, in either case, by all the parties hereto shall constitute a full and original agreement for all purposes. 19.0 Remedies and Waiver. No failure or delay in exercising any right hereunder shall operate as a waiver of or impair any such right. No single or partial exercise of any such right shall preclude any other or further exercise thereof or the exercise of any other right. Any waiver must be given in writing to be effective, and no waiver shall be deemed a waiver of any other right. 20.0 Headings. The headings of Articles and Sections have been included herein for convenience only and shall not constitute a part of this Agreement for any other purpose. 21.0 Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and their respective Affiliates, and no provision of this Agreement shall be deemed to confer upon third parties, other than such respective Affiliates, any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement. 22.0 Further Assurances. Each of Operations and FRP agrees to, and to cause IMC GPCo and the FRP Partner, respectively, to, execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by the Transaction Agreements and to vest in the Partnership good title to the Assets, subject only to Permitted Liens. 23.0 Public Announcements. Except as may be required by applicable law or any listing agreement with any national securities exchange, none of Global, Operations, FTX or FRP nor any Affiliate of any thereof will issue any press release or make any public statement with respect to the business of the Partnership or its financial performance or condition without the prior written consent of the other parties unless either (i) a draft of the proposed press release has been provided to each party hereto at least twenty-four (24) hours prior to its proposed release in order to permit such party to comment thereon or (ii) such press release or other public statement contains factual information (or discussion or analysis of or comment based upon such factual information) previously provided to such Person by the Managing Partner; provided that none of Global, Operations, FTX or FRP nor any of their Affiliates will present projections or forward-looking information that is attributed to any of the other parties hereto, the Partners, or any of their Affiliates without the prior written consent of the parties hereto and the Partners. 24.0 Partnership Agreement. Each of Operations and FRP agrees to be bound by Sections 5.07(d) and 9.03 of the Partnership Agreement. * * * * * IN WITNESS WHEREOF, the parties have signed this Agreement on the date first written above. IMC GLOBAL OPERATIONS INC. (formerly IMC Fertilizer, Inc.) By: PETER HONG Name Printed: Peter Hong Title: Vice President FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP By: Freeport McMoRan Inc., its general partner By: Name Printed: Title: IMC-AGRICO COMPANY By: IMC-AGRICO MP, INC., its general partner By: ROBERT C. BRAUNEKER Name Printed: Robert C. Brauneker Title: Vice President By: IMC-AGRICO GP, COMPANY, its general partner By: ROBERT C. BRAUNEKER Name Printed: Robert C. Brauneker Title: Vice President IN WITNESS WHEREOF, the parties have signed this Agreement on the date first written above. IMC GLOBAL OPERATIONS INC. (formerly IMC Fertilizer, Inc.) By: Name Printed: Title: FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP By: Freeport McMoRan Inc., its general partner By: CHARLES W. GOODYEAR Name Printed: Charles w. Goodyear Title: Senior Vice President IMC-AGRICO COMPANY By: IMC-AGRICO MP, INC., its general partner By: Name Printed: Title: By: IMC-AGRICO GP, COMPANY, its general partner By: Name Printed: Title: By: AGRICO, LIMITED PARTNERSHIP, its general partner By: Agrico, Inc., its general partner By: CHARLES W. GOODYEAR Name Printed: Charles W. Goodyear Title: Vice President FREEPORT-McMoRan INC. By: CHARLES W. GOODYEAR Name Printed: Charles W. Goodyear Title: Senior Vice President IMC GLOBAL INC. (formerly IMC Fertilizer Group, Inc.) (solely for the purposes of Sections 2.0, 3.0(a), (c), (d), (e) and (f), 4.0 and 6.0) By: Name Printed: Title: By: AGRICO, LIMITED PARTNERSHIP, its general partner By: Agrico, Inc., its general partner By: Name Printed: Title: FREEPORT-McMoRan INC. By: Name Printed: Title: IMC GLOBAL INC. (formerly IMC Fertilizer Group, Inc.) (solely for the purposes of Sections 2.0, 3.0(a), (c), (d), (e) and (f), 4.0 and 6.0) By: PETER HONG Name Printed: Peter Hong Title: Vice President EX-12 4 EXHIBIT 12.1 FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP Computation of Ratio of Earnings to Fixed Charges Years Ended December 31, --------------------------------------------------------- 1991 1992 1993 1994 1995 ---------- ---------- ---------- ---------- ---------- (In Thousands) Income (loss) from continuing operations $ 111,839 $ 20,211 $ (222,411) $ 83,966 $ 161,408 Add: Interest expense 506 869 12,870 33,519 31,518 Rental expense factor(a) 1,915 2,371 1,378 3,899 4,011 ---------- ---------- ---------- ---------- ---------- $ 114,260 $ 23,451 $ (208,163) $ 121,384 $ 196,937 ========== ========== ========== ========== ========== Interest expense $ 506 $ 869 $ 12,870 $ 33,519 $ 31,518 Capitalized interest 23,271 19,116 11,070 - - Rental expense factor(a) 1,915 2,371 1,378 3,899 4,011 ---------- ---------- ---------- ---------- ---------- Fixed charges $ 25,692 $ 22,356 $ 25,318 $ 37,418 $ 35,529 ========== ========== ========== ========== ========== Ratio of earnings to fixed charges(b) 4.4x 1.0x c 3.2x 5.5x ==== ==== ==== ==== a. Portion of rent deemed representative of an interest factor. b. For purposes of this calculation, earnings are income from continuing operations before fixed charges. Fixed charges consist of interest and that portion of rent deemed representative of interest. c. Earnings were inadequate to cover fixed charges by $233.5 million. EX-13 5 EXHIBIT 13.1 SELECTED FINANCIAL AND OPERATING DATA 1995 1994 1993 1992 1991 ---------- ---------- ---------- ---------- ---------- (Financial Data in Thousands, Except Per Unit Amounts) FINANCIAL DATA Years Ended December 31: Revenues $ 995,112 $ 765,278 $ 669,160 $ 877,058 $ 885,209 Operating income (loss) 194,625a 120,618b (210,848)c 20,743 67,196 Net income (loss) 161,408a 83,966b (246,111)c,d 20,211 15,046e Net income (loss) per unit 1.56a .81b (2.37)c,d .20 .18e Distributions paid per publicly held unit 2.415 2.40 2.40 2.40 2.40 Average units outstanding 103,487 103,683 103,698 101,449 83,630 At December 31: Property, plant and equipment, net 949,131 910,469 970,960 1,074,332 1,009,517 Total assets 1,229,105 1,146,931 1,296,873 1,493,507 1,443,114 Long-term debt 384,241 368,637 488,102 356,563 542,766 Partners' capital 404,466 447,660 492,404 859,695 560,160 OPERATING DATA Phosphate fertilizers -primarily DAP Sales (short tons) f 3,427,700 3,193,400 3,346,600 3,984,000 4,027,000 Average realized price g All phosphate fertilizers $169.07 $144.13 $110.03 $127.27 $147.10 DAP 175.11 149.32 113.09 132.11 154.07 Phosphate rock Sales (short tons)f 4,470,400 4,373,400 3,840,300 3,440,500 2,247,000 Average realized price g $22.53 $21.38 $22.02 $26.96 $28.21 Sulphur Sales (long tons)h 3,049,700 2,087,800 1,973,200 2,346,100 2,528,200 Oil (barrels) Sales 2,217,600 2,533,700 3,443,000 4,884,000 350,800 Average realized price $15.82 $13.74 $14.43 $15.91 $13.34 a. Includes charges totaling $18.1 million ($0.18 per unit) for stock option costs resulting from the rise in FTX's common stock price during the year and an early retirement program. b. Includes a $10.9 million charge ($0.11 per unit) primarily for certain remediation costs. c. Includes a net charge of $173.6 million ($1.67 per unit) primarily for restructuring, asset recoverability and other related charges. d. Includes a $23.7 million cumulative charge ($0.23 per unit) for changes in accounting principle. e. Includes a $17.7 million ($0.21 per unit) insurance settlement gain and a $96.8 million cumulative charge ($1.16 per unit) for the change in accounting for postretirement benefits other than pensions. f. Reflects FRP's 43.6 percent, 45.1 percent and 46.5 percent share of the IMC-Agrico assets for the years ended June 30, 1996- 1994, respectively, while FRP received 53.1 percent, 55 percent and 58.6 percent, respectively, of the cash flow generated during such periods. g. Represents average realization f.o.b. plant/mine. h. Includes internal consumption totaling 754,400 tons, 739,900 tons, 1,138,800 tons, 1,654,300 tons and 1,612,400 tons for 1995-1991, respectively. FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS Freeport-McMoRan Resource Partners, Limited Partnership (FRP) has benefited from the favorable pricing trends for its phosphate fertilizer products which began in mid-1993 and have continued through 1995, as evidenced by its dramatically improved operating results and significantly higher operating cash flow. Phosphate fertilizer market fundamentals continue to remain positive with the anticipation of increased global demand coupled with a currently tight supply/demand situation. FRP also obtained a new credit facility (Note 5) in connection with Freeport-McMoRan Inc. (FTX), FRP's general partner and 51.5 percent owner, completing a restructuring plan to separate its copper/gold and agricultural minerals businesses into two independent financial and operating entities. The new credit agreement provides greater financial flexibility for FRP and reduced financing costs. In addition, Standard & Poor's raised FRP's senior debt rating to an investment grade of BBB-, also serving to reduce financing costs. Additionally, during 1995 FRP built on its already strong asset base by participating in two separate acquisitions (Note 4); the purchase of Pennzoil Co.'s Culberson sulphur mine and related assets, and the IMC-Agrico Company (IMC-Agrico) purchase of the animal feed ingredients business of Mallinckrodt Group Inc. Both acquisitions served to strengthen FRP's strategic market position. The Pennzoil transaction added both sulphur reserves and a significant sulphur transportation system. The Mallinckrodt animal feed ingredients business is one of the world's largest producers of phosphate-based animal feed ingredients with an annual capacity in excess of 700,000 tons. This business is IMC-Agrico's largest phosphoric acid customer, consuming nearly 300,000 tons per year or about seven percent of IMC-Agrico's capacity. FRP continues to evaluate additional growth opportunities. RESULTS OF OPERATIONS 1995 1994 1993 ---------- ---------- --------- (In Millions, Except Per Unit Amounts) Revenues $ 995.1 $ 765.3 $ 669.2 Operating income (loss) 194.6a 120.6b (210.8)c Net income (loss) 161.4a 84.0b (246.1)c,d Net income (loss) per unit 1.56a .81b (2.37)c,d a. Includes charges totaling $18.1 million ($0.18 per unit) for stock option costs resulting from the rise in FTX's common stock price during the year (Note 6) and an early retirement program. b. Includes a $10.9 million charge ($0.11 per unit) primarily for certain remediation costs (Note 7). c. Includes a net charge of $173.6 million ($1.67 per unit) primarily for restructuring, asset recoverability and other related charges. d. Includes a $23.7 million cumulative charge ($0.23 per unit) for changes in accounting principle. 1995 Compared With 1994. FRP benefited from the significant strengthening in the phosphate fertilizer markets throughout 1995 and the expansion of its sulphur production capacity (see Selected Financial and Operating Data) resulting in higher revenues and improved operating results. Depreciation and amortization for 1995 decreased $7.5 million from the 1994 amount, primarily caused by a $10.5 million decline relating to FRP's disproportionate interest in the IMC- Agrico joint venture cash distributions, partially offset by a $2.7 million increase resulting from the acquired sulphur assets. General and administrative expenses for 1995 increased by $23.1 million, primarily because of the $18.1 million of stock option and early retirement charges noted above. The 1994 amount benefited from a $2.2 million reduction in the estimated cost of excess office space FTX allocated to FRP, discussed later. FRP's general and administrative expenses include costs incurred by FTX on FRP's behalf which are allocated to FRP on a cost- reimbursement basis under a management services agreement (Note 6). Interest expense decreased from 1994 as a result of lower average debt levels, partially offset by higher market interest rates. Agricultural Minerals Operations - FRP's agricultural minerals operations, which include its fertilizer and phosphate rock operations (conducted through IMC-Agrico) and its sulphur business, reported 1995 operating income of $205.9 million on revenues of $960 million compared with operating income of $123.8 million on revenues of $730.4 million in 1994. Significant items impacting operating income are as follows (in millions): Agricultural minerals operating income -1994 $ 123.8 ---------- Increases (decreases): Sales volumes 81.3 Realizations 147.7 Other 0.6 ---------- Revenue variance 229.6 Cost of sales (135.4)a General and administrative (12.1)b ---------- 82.1 ---------- Agricultural minerals operating income -1995 $ 205.9 ========== a. Includes a reduction to depreciation and amortization of $26.3 million and $15.8 million for 1995 and 1994, respectively, caused by FRP's disproportionate interest in IMC-Agrico cash distributions. b. Includes $10.3 million of the stock option charge discussed above. FRP's 1995 phosphate fertilizer sales volumes were 7 percent higher than those in 1994, with IMC-Agrico experiencing continued excellent export demand and strong domestic sales for diammonium phosphate (DAP), its principal fertilizer product. The increased demand resulted in IMC-Agrico phosphate fertilizer facilities operating near capacity for the majority of 1995. Despite recent industrywide capacity utilization above 100 percent, domestic phosphate fertilizer producer inventories remain below normal. This tight supply/demand situation is reflected in improved phosphate fertilizer realizations, with FRP's average DAP realization increasing 17 percent from 1994. FRP's 1995 DAP realizations included large forward sales to China at prices which were ultimately below market prices at the time of shipment. FRP's phosphate fertilizer unit production costs were increased from 1994, reflecting higher raw material costs for ammonia and phosphate rock. Fertilizer prices continued to rise during the fourth quarter of 1995 and are expected to remain firm for the near term, as the increased global demand for phosphate fertilizers comes at a time when essentially no operable idle capacity exists. Furthermore, worldwide grain stocks are projected to be at their lowest-ever levels in the upcoming fertilizer season, strengthening grain prices and improving the outlook for this spring's fertilizer use. As a result, strong domestic demand is anticipated to continue into the spring with an expected 13 percent increase in planted corn acreage. Additionally, in late 1995 IMC-Agrico reached an agreement with China providing for significant shipments of DAP throughout 1996 at market-related prices at the time of shipment. FRP's 1995 phosphate rock sales volumes were slightly higher than in 1994. Increased demand from phosphate fertilizer producers and the addition of a long-term supply contract in October 1994 were offset by the expiration of a contract in October 1995 providing annual sales of 1.5 million tons net to FRP. Because of the low margin associated with sales under the expired contract, the impact to FRP's earnings is not significant. FRP's increased sulphur production capacity resulting from the Culberson mine purchase, combined with continued strong demand from the domestic phosphate fertilizer industry, resulted in a 46 percent increase in sales volumes. FRP also benefited from the strengthening in Tampa, Florida sulphur prices during 1995. To the extent U.S. phosphate fertilizer production remains strong, improved sulphur demand is expected to continue, although the availability of Canadian sulphur limits the potential for significant price increases. Main Pass unit production costs for 1995 were virtually unchanged from 1994. Oil Operation - 1995 1994 ---------- ---------- Sales (barrels) 2,217,600 2,533,700 Average realized price $15.82 $13.74 Operating income (in millions) $1.9 $2.8 In 1995, Main Pass oil operating income was impacted by $1.8 million of the previously discussed stock option charge. Net production for 1996 is estimated to approximate 1995 levels, as drilling activities are expected to generate production sufficient to offset declining reservoir production. 1994 Compared With 1993. FRP's 1994 results primarily reflect the improvement in the phosphate fertilizer market during the year and the benefits from the formation of IMC-Agrico and other restructuring activities undertaken in 1993, discussed below. Partially offsetting these positive factors were increased raw material prices for ammonia and reduced oil sales volumes. During 1993, FTX undertook a restructuring of its administrative organization. This restructuring represented a major step by FTX to lower the costs of operating and administering its businesses in response to weak market prices of commodities produced by its operating units. As part of this restructuring, FTX significantly reduced the number of employees engaged in administrative functions, changed its management information systems environment to achieve efficiencies, reduced its needs for office space, outsourced a number of administrative functions and took other actions to lower costs. The restructuring process resulted in FTX incurring one-time costs, portions of which were allocated to FRP pursuant to its management services agreement with FTX (Note 8). Depreciation and amortization during 1994 declined by $52.3 million compared with 1993, primarily consisting of a $26.6 million decrease relating to the disproportionate interest in IMC-Agrico cash distributions, a $15.3 million reduction from Main Pass oil operations caused by the decline in sales volumes between periods and the $7.6 million in restructuring charges recorded in 1993. These decreases were partially offset by a $6 million increase in sulphur depreciation because of higher Main Pass sulphur production. General and administrative expenses reflect the benefits from the formation of IMC-Agrico and the other 1993 restructuring activities. The 1994 amount also benefited from a $2.2 million reduction in the estimated cost of excess office space FTX allocated to FRP (originally estimated as part of 1993 restructuring costs), whereas 1993 includes $7.3 million in restructuring related charges. Interest expense in 1994 increased as a result of the Main Pass sulphur project becoming operational for accounting purposes in July 1993 (previously, related interest costs totaling $11.1 million in 1993 were capitalized), rising interest rates and the issuance of the 8 3/4% Senior Subordinated Notes due 2004 (Note 5) which was used to reduce lower variable rate bank borrowings. These increases were partially offset by a reduction in average debt levels. FRP's 1993 earnings include a $23.7 million charge for the cumulative effect of changes in accounting principle for periodic scheduled maintenance costs, deferred charges and costs of management information systems (Note 1). These changes were adopted to improve the measurement of operating results by recognizing cash expenditures as expense when incurred unless they directly relate to long-lived additions. These changes did not have a material impact on operating income. Agricultural Minerals Operations - FRP's agricultural minerals operations reported 1994 operating income of $123.8 million on revenues of $730.4 million compared with an operating loss of $105 million on revenues of $619.3 million in 1993. Significant items impacting operating income are as follows (in millions): Agricultural minerals operating loss -1993 $ (105.0) ---------- Increases (decreases): Sales volumes 15.8 Realizations 102.7 Other (7.4) ---------- Revenue variance 111.1 Cost of sales 46.8a,b 1993 provision for restructuring charges 33.9 1993 loss on valuation and sale of assets, net 14.8 General and administrative and other 22.2a ---------- 228.8 ---------- Agricultural minerals operating income-1994 $ 123.8 ========== a. 1993 included $17.5 million in cost of sales and $7.3 million in general and administrative expenses resulting from the restructuring project. b. 1994 included a $15.8 million reduction and 1993 included a $10.8 million increase to depreciation and amortization caused by FRP's disproportionate interest in IMC-Agrico cash distributions. FRP's 1994 phosphate fertilizer sales volumes were slightly below 1993 levels. Producer inventories remained at prior year levels despite a rise in industrywide production. As a result, phosphate fertilizer prices rose sharply from the near 20-year lows experienced during 1993, with FRP's average DAP realization increasing 32 percent. Unit production costs benefited from efficiencies at IMC-Agrico, somewhat offset by higher raw material prices for ammonia. FRP's phosphate rock sales volumes rose 14 percent during 1994, reflecting increased demand and the advent of a supply contract in October 1994 adding annual sales of approximately 0.8 million tons net to FRP through 2004. Main Pass sulphur production increased during 1994, reducing unit production costs below 1993 levels. With increased Main Pass production, FRP ceased operating the marginally profitable Caminada mine in January 1994. Average sulphur realizations for 1994 were lower, reflecting the decline in prices which occurred throughout 1993. However, improved phosphate fertilizer operating rates, coupled with reduced imports, resulted in sulphur price increases during the second half of 1994. Oil Operation - 1994 1993 ---------- ---------- Sales (barrels) 2,533,700 3,443,000 Average realized price $13.74 $14.43 Operating income (in millions) $2.8 $(61.5) Main Pass oil production was limited during 1994 because of a redevelopment program which involved drilling two additional wells and recompleting three existing wells. Oil realizations recovered somewhat from the significant decline which occurred in late 1993. The 1993 price decline resulted in a $60 million charge to FRP's earnings for the excess net book value of its oil assets over the estimated future net cash flow to be received. CAPITAL RESOURCES AND LIQUIDITY Net cash provided by (used in) operating activities was $284.9 million in 1995, $221.4 million in 1994 and $(2.9) million in 1993. Fluctuations in these amounts were primarily caused by the varying level of FRP's earnings. Also benefiting the 1995 and 1994 periods were working capital reductions achieved by IMC- Agrico and the sale of receivables (Note 1). Net cash provided by (used in) investing activities was $(83.8) million in 1995, $15.6 million in 1994 and $2.5 million in 1993. Based on current estimates, capital expenditures for 1996 will approximate $45 million. Investing cash flow for 1995 included the Mallinckrodt acquisition, while 1994 and 1993 benefited from the receipt of proceeds from asset sales. Net cash provided by (used in) financing activities totaled $(188.5) million in 1995, $(251.6) million in 1994 and $17.8 million in 1993. Distributions to partners rose in 1995, as higher cash flow from operations resulted in continued distributions to the public unitholders and an increased level of distributions paid to FTX. In early 1994, FRP issued $150 million of 8 3/4% Senior Subordinated Notes, using the proceeds to reduce bank indebtedness, thereby lengthening the maturity and fixing the interest cost on a portion of FRP's debt. FRP believes that its short-term cash requirements will be met from internally generated funds and borrowings under its credit facility ($183 million of additional borrowings available at February 6, 1996). Publicly owned FRP units have cumulative rights to receive quarterly distributions of 60 cents per unit through the distribution for the quarter ending December 31, 1996 before any distributions may be made to FTX. On January 19, 1996, FRP declared a distribution of 62.5 cents per publicly held unit ($31.3 million) and 67.35 cents per FTX-owned unit ($35.9 million), payable February 15, 1996, reducing the unpaid distributions to FTX by $2.6 million. The remaining $379.9 million of unpaid distributions to FTX are recoverable from one- half of any excess of future quarterly FRP distributions over 60 cents per unit for all units. FRP's future distributions will be dependent on the distributions received from IMC-Agrico and cash flow from FRP's sulphur and oil operations. Distributable cash in January 1996 included $64.3 million from IMC-Agrico. Future distributions from IMC-Agrico will depend primarily on the phosphate fertilizer market, discussed earlier, and FRP's share of IMC-Agrico cash distributions (Current Interest). FRP's Current Interest is presently 53.1 percent through June 30, 1996, changing to 53.5 percent for the twelve months ended June 30, 1997 and declining to 40.6 percent thereafter. However, in January 1996 FRP and its joint venture partner in IMC-Agrico agreed to an increase in FRP's Current Interest of 0.85 percent and a modification of certain product pricing between IMC-Agrico and the joint venture partner. This agreement is subject to the joint venture partner consummating a merger. ENVIRONMENTAL FTX and its affiliates, including FRP, have a history of commitment to environmental responsibility. Since the 1940s, long before public attention focused on the importance of maintaining environmental quality, FTX and its affiliates have conducted preoperational, bioassay, marine ecological and other environmental surveys to ensure the environmental compatibility of its operations. FTX's Environmental Policy commits FTX and its affiliates' operations to compliance with local, state and federal laws and regulations, and prescribes the use of periodic environmental audits of all facilities to evaluate compliance status and communicate that information to management. FTX has access to environmental specialists who have developed and implemented corporatewide environmental programs. FTX's operating units, including FRP, continue to study methods to reduce discharges and emissions. Federal legislation (sometimes referred to as "Superfund") requires payments for cleanup of certain waste sites, even though waste management activities were performed in compliance with regulations applicable at the time. Under the Superfund legislation, one party may, under certain circumstances, be required to bear more than its proportional share of cleanup costs at a site where it has responsibility pursuant to the legislation, if payments cannot be obtained from other responsible parties. Other legislation mandates cleanup of certain wastes at operating sites. States also have regulatory programs that can mandate waste cleanup. Liability under these laws involves inherent uncertainties. FRP has received notices from governmental agencies that it is one of many potentially responsible parties at certain sites under relevant federal and state environmental laws. Further, FRP is aware of additional sites for which it may receive such notices in the future. Some of these sites involve significant cleanup costs; however, at each of these sites other large and viable companies with equal or larger proportionate shares are among the potentially responsible parties. The ultimate settlement for such sites usually occurs several years subsequent to the receipt of notices identifying potentially responsible parties because of the many complex technical and financial issues associated with site cleanup. FRP believes that the aggregation of any costs associated with the potential liabilities at those sites for which notification has been received will not exceed amounts accrued and expects that any costs would be incurred over a period of years. The costs associated with those sites for which notifications have not been received are uncertain and cannot be estimated at present. However, FRP believes that these costs, should they be incurred, will not have a material adverse effect on its operations or financial position. FRP, through FTX, maintains insurance coverage in amounts deemed prudent for certain types of damages associated with environmental liabilities which arise from unexpected and unforeseen events and has an indemnification agreement covering certain acquired sites (Note 7). In June 1994, a sinkhole was found at a phosphogypsum storage area at IMC-Agrico's New Wales, Florida facility. The Florida Department of Environmental Protection was notified and IMC-Agrico pumped grout material into the sinkhole, thereby plugging it and preventing further collapse. Groundwater monitoring wells indicate that, to date, any impacts from the sinkhole have been contained on-site. This issue continues to be monitored. If there were contamination, which IMC-Agrico considers unlikely, the costs that would be required are uncertain and cannot be estimated at the present. If significant costs were incurred it would be necessary to determine the applicability of insurance coverage maintained by IMC-Agrico, and separately by FRP, and for the sharing of costs between the joint venture partners. FRP has made, and will continue to make, expenditures at its operations for protection of the environment. Continued government and public emphasis on environmental issues can be expected to result in increased future investments for environmental controls, which will be charged against income from future operations. Present and future environmental laws and regulations applicable to FRP's operations may require substantial capital expenditures and may affect its operations in other ways that cannot now be accurately predicted. ----------------------------- The results of operations reported and summarized above are not necessarily indicative of future operating results. REPORT OF MANAGEMENT Freeport-McMoRan Inc., the Administrative Managing General Partner (the General Partner) of Freeport-McMoRan Resource Partners, Limited Partnership (the Partnership) is responsible for the preparation of the financial statements and all other information contained in this Annual Report. The financial statements have been prepared in conformity with generally accepted accounting principles and include amounts that are based on management's informed judgments and estimates. The General Partner maintains a system of internal accounting controls designed to provide reasonable assurance at reasonable costs that assets are safeguarded against loss or unauthorized use, that transactions are executed in accordance with management's authorization and that transactions are recorded and summarized properly. The system is tested and evaluated on a regular basis by the General Partner's internal auditors, Price Waterhouse LLP. In accordance with generally accepted auditing standards, the Partnership's independent public accountants, Arthur Andersen LLP, have developed an overall understanding of our accounting and financial controls and have conducted other tests as they consider necessary to support their opinion on the financial statements. The Board of Directors of the General Partner, through its Audit Committee composed solely of non-employee directors, is responsible for overseeing the integrity and reliability of the Partnership's accounting and financial reporting practices and the effectiveness of its system of internal controls. Arthur Andersen LLP and Price Waterhouse LLP meet regularly with, and have access to, this committee, with and without management present, to discuss the results of their audit work. Rene L. Latiolais Charles W. Goodyear President and Executive Vice President and Chief Executive Officer Chief Financial Officer FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP BALANCE SHEETS December 31, ------------------------ 1995 1994 ---------- ---------- (In Thousands) ASSETS Current assets: Cash and short-term investments $ 22,508 $ 9,859 Accounts receivable: Customers 57,047 42,312 Other 24,054 15,953 Inventories: Products 83,924 79,377 Materials and supplies 35,086 30,300 Prepaid expenses and other 3,692 1,350 ---------- ---------- Total current assets 226,311 179,151 ---------- ---------- Property, plant and equipment 1,829,271 1,744,392 Less accumulated depreciation and amortization 880,140 833,923 ---------- ---------- Net property, plant and equipment 949,131 910,469 ---------- ---------- Other assets 53,663 57,311 ---------- ---------- Total assets $1,229,105 $1,146,931 ========== ========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable and accrued liabilities $ 127,020 $ 84,888 Long-term debt, less current portion 384,241 368,637 Reclamation and mine shutdown reserves 112,788 96,445 Accrued postretirement benefits and other liabilities 200,590 149,301 Partners' capital 404,466 447,660 ---------- ---------- Total liabilities and partners' capital $1,229,105 $1,146,931 ========== ========== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS Years Ended December 31, -------------------------------------- 1995 1994 1993 ---------- ---------- ---------- (In Thousands, Except Per Unit Amounts) Revenues $ 995,112 $ 765,278 $ 669,160 Cost of sales: Production and delivery 687,541 547,297 556,712 Depreciation and amortization 44,830 52,344 104,686 ---------- ---------- ---------- Total cost of sales 732,371 599,641 661,398 Exploration expenses - - 3,092 Provision for restructuring charges - - 33,947 Loss on valuation and sale of assets, net - - 114,802 General and administrative expenses 68,116 45,019 66,769 ---------- ---------- ---------- Total costs and expenses 800,487 644,660 880,008 ---------- ---------- ---------- Operating income (loss) 194,625 120,618 (210,848) Interest expense, net (31,518) (33,519) (12,870) Other income (expense), net (1,699) (3,133) 1,307 ---------- ---------- ---------- Income (loss) before changes in accounting principle 161,408 83,966 (222,411) Cumulative effect of changes in accounting principle - - (23,700) ---------- ---------- ---------- Net income (loss) $ 161,408 $ 83,966 $ (246,111) ========== ========== ========== Net income (loss) per unit: Before changes in accounting principle $1.56 $.81 $(2.14) Cumulative effect of changes in accounting principle - - (.23) ----- ---- ------ $1.56 $.81 $(2.37) ===== ==== ====== Average units outstanding 103,487 103,683 103,698 Distributions paid per publicly held unit $2.415 $2.40 $2.40 ====== ===== ===== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP STATEMENTS OF CASH FLOW Years Ended December 31, -------------------------------------- 1995 1994 1993 ---------- ---------- ---------- (In Thousands) Cash flow from operating activities: Net income (loss) $ 161,408 $ 83,966 $ (246,111) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Cumulative effect of changes in accounting principle - - 23,700 Depreciation and amortization 44,830 52,344 104,686 Loss on valuation and sale of assets, net - - 114,802 Cash distributions from IMC-Agrico in excess of interest in capital 40,835 43,293 - Reclamation and mine shutdown expenditures (10,545) (9,837) (9,980) (Increase) decrease in working capital, net of effect of acquisitions and dispositions: Accounts receivable (13,252) 3,531 710 Inventories 4,471 20,522 20,793 Prepaid expenses and other (2,413) 679 (495) Accounts payable and accrued liabilities 39,630 14,688 (31,427) Other 19,980 12,244 20,376 ---------- ---------- ---------- Net cash provided by (used in) operating activities 284,944 221,430 (2,946) ---------- ---------- ---------- Cash flow from investing activities: Capital expenditures (39,485) (29,681) (52,170) Mallinckrodt purchase (46,200) - - Sale of assets 375 44,774 49,961 Other 1,531 530 4,711 ---------- ---------- ---------- Net cash provided by (used in) investing activities (83,779) 15,623 2,502 ---------- ---------- ---------- Cash flow from financing activities: Distributions to partners (202,541) (127,368) (121,180) Proceeds from debt 648,343 54,629 468,137 Repayment of debt (632,257) (323,686) (329,164) Purchase of Partnership units (2,061) (1,342) - Proceeds from sale of 8 3/4% Senior Subordinated Notes - 146,125 - ---------- ---------- ---------- Net cash provided by (used in) financing activities (188,516) (251,642) 17,793 ---------- ---------- ---------- Net increase (decrease) in cash and short-term investments 12,649 (14,589) 17,349 Cash and short-term investments at beginning of year 9,859 24,448 7,099 ---------- ---------- ---------- Cash and short-term investments at end of year $ 22,508 $ 9,859 $ 24,448 ========== ========== ========== Interest paid $ 28,997 $ 26,349 $ 22,997 ========== ========== ========== The accompanying notes, which include information in Notes 4 and 8 regarding noncash transactions, are an integral part of these financial statements. FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP STATEMENTS OF CHANGES IN PARTNERS' CAPITAL Units Outstanding Partners' Capital -------------------------- ------------------------------ General Limited Total General Limited Total ------- ------- ------- --------- --------- --------- (In Thousands) Balance at January 1, 1993 53,208 50,490 103,698 $ 441,119 $ 418,576 $ 859,695 Net loss - - - (126,277) (119,834) (246,111) Partnership distributions - - - - (121,180) (121,180) Reallocation caused by disproportionate distributions - - - (62,176) 62,176 - Other (3) 3 - (23) 23 - ------- ------- ------- -------- --------- --------- Balance at December 31, 1993 53,205 50,493 103,698 252,643 239,761 492,404 Net income - - - 43,089 40,877 83,966 Partnership distributions - - - (6,184) (121,184) (127,368) Purchase of Partnership units - (95) (95) (490) (852) (1,342) Reallocation caused by disproportionate distributions - - - (59,166) 59,166 - ------- ------- ------- --------- -------- --------- Balance at December 31, 1994 53,205 50,398 103,603 229,892 217,768 447,660 Net income - - - 83,014 78,394 161,408 Partnership distributions - - - (81,102) (121,439) (202,541) Purchase of Partnership units - (137) (137) (764) (1,297) (2,061) FTX purchase of Partnership units 117 (117) - 443 (443) - Reallocation caused by disproportionate distributions - - - (23,038) 23,038 - ------- ------- ------- --------- --------- --------- Balance at December 31, 1995 53,322 50,144 103,466 $ 208,445 $ 196,021 $ 404,466 ======= ======= ======= ========= ========= ========= The accompanying notes are an integral part of these financial statements. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Ownership. The financial statements of Freeport-McMoRan Resource Partners, Limited Partnership (FRP), a Delaware limited partnership, include all majority-owned subsidiaries. Investments in joint ventures and partnerships, including IMC-Agrico Company (IMC-Agrico), are reflected using the proportionate consolidation method in accordance with standard industry practice. All significant intercompany transactions have been eliminated. Certain prior year amounts have been reclassified to conform to the 1995 presentation. Freeport-McMoRan Inc. (FTX) owned 51.5 percent of FRP as of December 31, 1995 and serves as FRP's general partner. Use of Estimates. The financial statements have been prepared in conformity with generally accepted accounting principles and include amounts that are based on management's informed judgments and estimates. Cash and Short-Term Investments. Highly liquid investments purchased with a maturity of three months or less are considered cash equivalents. IMC-Agrico's cash and short-term investments are not available to FRP until a distribution is paid by IMC- Agrico (Note 2). Accounts Receivable. IMC-Agrico has an agreement whereby it can sell on an ongoing basis up to $65 million of accounts receivable. FRP's accounts receivable at December 31, 1995 and 1994 were net of $28.3 million and $17.9 million of receivables sold, respectively. Inventories. Inventories are generally stated at the lower of average cost or market. Property, Plant and Equipment. Property, plant and equipment are carried at cost, including capitalized interest during the construction and development period. Expenditures for replacements and improvements are capitalized. FRP follows the successful efforts accounting method for its sole oil property, Main Pass Block 299. Depreciation for mining and production assets, including mineral interests, is determined using the unit-of-production method based on estimated recoverable reserves. Other assets are depreciated on a straight-line basis over estimated useful lives of 17 to 30 years for buildings and 5 to 25 years for machinery and equipment. In March 1995, the Financial Accounting Standards Board issued Statement No. 121 (FAS 121) which requires a reduction of the carrying amount of long-lived assets to fair value when events indicate that their carrying amount may not be recoverable. FRP adopted FAS 121 effective January 1,1995, the effect of which was not material. Environmental Remediation and Compliance. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures resulting from the remediation of an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recognized for remedial activities when the efforts are probable and the cost can be reasonably estimated. Estimated future expenditures to restore properties and related facilities to a state required to comply with environmental and other regulations are accrued over the life of the properties. The future expenditures are estimated based on current costs, laws and regulations. As of December 31, 1995, FRP had accrued $53.9 million for abandonment and restoration of its non-operating sulphur assets, approximately one-half of which will be reimbursed by third parties, and $42.7 million for reclamation of land relating to mining and processing phosphate rock. FRP estimates that its share of abandonment and restoration costs for its two operating sulphur mines will total approximately $50 million, $17.6 million of which had been accrued at December 31, 1995, with essentially all costs being incurred after mine closure. These estimates are by their nature imprecise and can be expected to be revised over time due to changes in government regulations, operations, technology and inflation. Income Taxes. FRP is not a taxable entity; therefore, no income taxes are reported in its financial statements. Changes in Accounting Principle. During 1993, FRP adopted the following changes in accounting principle: Periodic Scheduled Maintenance - These costs are expensed when incurred. Previously, costs were capitalized when incurred and amortized. Deferred Charges - Costs that directly relate to the acquisition, construction and development of assets and to the issuance of debt and related instruments are deferred. Previously, certain other costs that benefited future periods were deferred. Management Information Systems (MIS) - MIS equipment and software that have a material impact on net income are capitalized. Other MIS costs, including equipment and purchased software, that involve immaterial amounts (currently individual expenditures of less than $0.5 million) and short estimated productive lives (currently less than three years) are charged to expense when incurred. Previously, most expenditures for MIS equipment and purchased software were capitalized. 2. IMC-AGRICO In July 1993, FRP and IMC Global Inc. (IGL) formed the IMC-Agrico joint venture, operated by IGL, for their respective phosphate fertilizer businesses, including phosphate rock. FRP's "Current Interest", reflecting cash to be distributed from ongoing operations, initially was 58.6 percent and its "Capital Interest", reflecting the purchase or sale of long-term assets or any required capital contributions, was 46.5 percent. These ownership percentages (53.1 percent and 43.6 percent, respectively, at December 31, 1995) decline in annual increments to 40.6 percent for the fiscal year ending June 30, 1998 and remain constant thereafter. In January 1996, FRP and IGL agreed to an increase in FRP's Current and Capital Interest of 0.85 percent, subject to IGL consummating a merger. At December 31, 1995, FRP's investment in IMC-Agrico totaled $429.2 million. IMC-Agrico's assets are not available to FRP until distributions are paid by the joint venture. 3. DISTRIBUTIONS Publicly owned FRP units have cumulative rights to receive quarterly distributions of 60 cents per unit through the distribution for the quarter ending December 31, 1996 before any distributions may be made to FTX. On January 19, 1996, FRP declared a distribution of 62.5 cents per publicly held unit ($31.3 million) and 67.35 cents per FTX-owned unit ($35.9 million), reducing the unpaid distributions to FTX to $379.9 million. Unpaid FTX distributions are recoverable from one-half of any amount by which future quarterly distributable cash exceeds a 60 cents per unit distribution. 4. ACQUISITIONS In January 1995, FRP acquired essentially all of the domestic assets of Pennzoil Co.'s sulphur division. Pennzoil will receive quarterly payments from FRP over 20 years based on the prevailing price of sulphur. The installment payments may be terminated earlier either by FRP through the exercise of a $65 million call option or by Pennzoil through a $10 million put option. Neither option may be exercised prior to 1999. The purchase price allocation is as follows (in thousands): Current assets $ 5,635 Property, plant and equipment 48,837 Current liabilities (7,499) Reclamation and mine shutdown reserves (15,200) Accrued long-term liabilities (31,773) ---------- Net cash investment $ - ========== Accrued long-term liabilities include the estimated future installment payments based on the prevailing sulphur price at the time of acquisition. In October 1995, IMC-Agrico acquired the animal feed ingredients business of Mallinckrodt Group Inc. for $110 million cash. FRP funded its portion of the purchase price with borrowings under its credit agreement. The purchase price allocation is as follows (in thousands): Current assets $ 19,503 Property, plant and equipment 35,329 Current liabilities (8,632) ---------- Net cash investment $ 46,200 ========== 5. LONG-TERM DEBT December 31, ------------------------ 1995 1994 ---------- ---------- (In Thousands) FRP credit agreement, average rate of 7.1% in 1995 and 5.2% in 1994 $ 196,400 $ 205,000 8 3/4% Senior Subordinated Notes due 2004 150,000 150,000 Note payable to FTX 24,740 - Other 13,440 13,951 ---------- ---------- 384,580 368,951 Less current portion, included in accounts payable 339 314 ---------- ---------- $ 384,241 $ 368,637 ========== ========== In 1995, FTX obtained a new variable rate revolving credit facility (the Credit Agreement). The facility provides $400 million of credit, all of which is available to FRP ($213 million of additional borrowings available at December 31, 1995) and $75 million of which is available to FTX, through July 2000. Under this facility, FTX is required to retain control of FRP and FRP is not permitted to enter into any agreement restricting its ability to make distributions or create liens on its assets. As security for the banks, FRP has pledged its interest in IMC- Agrico and Main Pass oil, while FTX has pledged units representing 50.1 percent of FRP. The Credit Agreement provides for FRP minimum working capital requirements, specified cash flow to interest coverage, maximum debt to capitalization ratios and restrictions on other borrowings. In February 1994, IMC-Agrico entered into a three-year $75 million variable rate credit facility (the IMC-Agrico Facility). Borrowings under the IMC-Agrico Facility are unsecured with a negative pledge on substantially all of IMC-Agrico's assets. The IMC-Agrico Facility has minimum capital, fixed charge and current ratio requirements for IMC-Agrico; places limitations on debt at IMC-Agrico; and restricts the ability of IMC-Agrico to make cash distributions in excess of distributable cash generated. In February 1994, FRP sold publicly $150 million of 8 3/4% Senior Subordinated Notes. Based on the December 31, 1995 closing market price, this debt had a fair value of $151.9 million. At times FRP has minimized amounts outstanding under the Credit Agreement by borrowing excess funds from FTX. Interest was charged based on Credit Agreement rates and totaled $1.8 million in 1995, $0.6 million in 1994 and $6.3 million in 1993. FRP entered into an interest rate swap in 1988 to manage exposure to interest rate changes on a portion of its variable rate debt. FRP pays 10.2 percent on $32.7 million of financing at December 31, 1995, reducing annually through 1999. FRP received an average interest rate of 6.2 percent in 1995, 4.3 percent in 1994 and 3.3 percent in 1993, resulting in additional interest costs of $1.4 million, $2.6 million and $3.5 million, respectively. Based on market conditions at December 31, 1995, unwinding this interest swap would require an estimated $3.2 million. The minimum principal payments scheduled for each of the five succeeding years based on the amounts and terms outstanding at December 31, 1995 are $0.3 million, $0.4 million, $0.5 million, $0.5 million and $221.1 million. Capitalized interest totaled $11.1 million in 1993. 6. PENSION AND OTHER EMPLOYEE BENEFITS Management Services Agreement. FRP has no employees and a limited number of officers, each of whom is an employee or officer of FTX. Through December 31, 1995, FTX furnished certain management and administrative services to FRP under a management services agreement. These costs, which include related overhead, totaled $38.9 million in 1995 (including $15.3 million for stock option costs resulting from the rise in FTX's common stock price during the year), $25 million in 1994 and $47.1 million in 1993 (excluding restructuring costs). As of January 1, 1996, FM Services Company (FMS), a newly formed entity owned 50 percent each by FTX and FCX, will provide certain administrative, financial and other services that were previously provided by FTX on a similar cost-reimbursement basis. FTX operates the Main Pass oil facilities and charges for specified overhead and other costs, FRP's share being $1 million in 1995, $0.8 million in 1994 and $0.9 million in 1993. Pensions. Substantially all employees are covered by FTX's defined benefit plan. Additionally, for those participants in the qualified defined benefit plan whose benefits are limited under federal income tax laws, FTX sponsored an unfunded nonqualified plan. The accumulated benefits and plan assets are not separately determined and amounts allocated to FRP under this plan have not been material. As of December 31, 1995, FTX's accumulated benefit obligation exceeded the plan assets by $9.8 million. FMS and FCX will establish their own plans which will assume liabilities equal to the accumulated benefit obligation for the transferred employees and FTX will transfer assets equal to the liabilities assumed, while providing essentially the same benefits to employees. The operator of IMC-Agrico maintains non-contributory pension plans that cover substantially all of its employees. As of July 1, 1995, FRP's share of the actuarial present value of the vested projected benefit obligation was $10 million, based on a discount rate of 8.2 percent and a 5 percent annual increase in future compensation levels, with its share of plan assets totaling $2.7 million. FRP's share of the expense related to these plans totaled $4.6 million in 1995, $3.6 million in 1994 and $1.5 million in 1993. Other Postretirement Benefits. FTX provides certain health care and life insurance benefits for retired employees. The related expense allocated from FTX totaled $8.9 million in 1995 ($1.2 million for service cost and $7.7 million in interest for prior period services), $9.9 million in 1994 ($1.1 million and $8.8 million, respectively) and $9.6 million in 1993 ($1.5 million and $8.1 million, respectively). These benefits will be provided by FTX and FMS beginning in 1996. Summary information of the plan follows: December 31, ------------------------ 1995 1994 ---------- ---------- Actuarial present value of (In Thousands) accumulated postretirement obligation: Retirees $ 93,791 $ 92,577 Fully eligible active plan participants 9,491 7,455 Other active plan participants 14,328 3,903 ---------- ---------- Total accumulated postretirement obligation 117,610 103,935 Unrecognized net gain (loss) (6,327) 3,418 ---------- ---------- Accrued postretirement benefit cost $ 111,283 $ 107,353 ========== ========== The initial health care cost trend rate used was 11.5 percent for 1993, decreasing 0.5 percent per year until reaching 6 percent. A one percent increase in the trend rate would increase the amounts by approximately 10 percent. The discount rate used was 7 percent in 1995 and 8.25 percent in 1994. FTX has the right to modify or terminate these benefits. FRP anticipates funding these costs, in addition to the annual cash costs, over the expected life of its mineral reserves. The operator of IMC-Agrico provides certain health care benefits for retired employees. At July 1, 1995, FRP's share of the accumulated postretirement obligation was $4.2 million, which was unfunded. FRP's share of expense has not been material. The initial health care cost trend rate used was 9.8 percent, decreasing gradually to 5.5 percent in 2003. The discount rate used was 8.2 percent. Employees are not vested and benefits are subject to change. 7. COMMITMENTS AND CONTINGENCIES Long-Term Contracts and Operating Leases. FRP has an agreement through 2009 with a third party that provides and operates a sulphur tanker for minimum annual payments of $12.8 million. FRP's minimum annual contractual charges under noncancelable long-term contracts and operating leases, including the sulphur tanker, total $197.8 million, with $19.5 million in 1996, $15.8 million in 1997, $15.2 million in 1998, $14.8 million in 1999 and $14.9 million in 2000. Environmental. FRP has an indemnification for environmental remediation costs in excess of an aggregate $5 million on certain identified sites (FRP has previously accrued the $5 million). In anticipation of reaching the $5 million indemnity, the third party has assumed management of response activities for the indemnified sites. Based on FRP's review of the potential liabilities and the third party's financial condition, FRP concluded that it is remote that FRP would have any additional liability at the indemnified sites. FRP believes its exposure on other sites for which notification has been received will not exceed amounts accrued and expects that any costs would be incurred over a period of years. The costs associated with those sites for which notifications have not been received are uncertain and cannot be estimated at present. However, FRP believes that these costs, should they be incurred, will not have a material adverse effect on its operations or financial position. In June 1994, a sinkhole was found at a phosphogypsum storage area at IMC-Agrico's New Wales, Florida facility. The Florida Department of Environmental Protection was notified and IMC-Agrico pumped grout material into the sinkhole, thereby plugging it and preventing further collapse. Groundwater monitoring wells indicate that, to date, any impacts from the sinkhole have been contained on-site. This issue continues to be monitored. If there were contamination, which IMC-Agrico considers unlikely, the costs that would be required are uncertain and cannot be estimated at the present. If significant costs were incurred it would be necessary to determine the applicability of insurance coverage maintained by IMC-Agrico, and separately by FRP, and for the sharing of costs between the joint venture partners. FRP has made, and will continue to make, expenditures at its operations for protection of the environment. FRP is subject to contingencies as a result of environmental laws and regulations. The related future cost is indeterminable because of such factors as the unknown timing and extent of the corrective actions that may be required and the application of joint and several liability. 8. RESTRUCTURING AND VALUATION CHARGES Restructuring Charges. During 1993, FRP recognized restructuring expenses totaling $33.9 million, including $22.1 million allocated from FTX. The charges consisted of $15.5 million for personnel related costs, $7 million for excess office space and furniture and fixtures resulting from staff reductions, $1.8 million for downsizing its MIS structure, $8.8 million for IMC- Agrico formation costs and $0.8 million of deferred charges relating to FRP's credit facility which was substantially revised. In connection with the restructuring project, FRP changed its accounting systems and undertook a detailed review of its accounting records and valuation of various assets and liabilities. As a result of this process, FRP recorded charges totaling $24.9 million, comprised of (a) $10 million of production and delivery costs consisting of $6.3 million for revised estimates of environmental liabilities and $3.7 million primarily for adjustments in converting accounting systems, (b) $7.6 million of depreciation and amortization consisting of $6.5 million for estimated future abandonment and reclamation costs and $1.1 million for the write-down of miscellaneous properties and (c) $7.3 million of general and administrative expenses consisting of $4 million to downsize FRP's MIS structure and $3.3 million for the write-off of miscellaneous assets. Asset Sales/Recoverability. During 1993, FRP sold its remaining interests in producing geothermal properties for $63.5 million, consisting of $23 million in cash and $40.5 million of interest- bearing notes, recognizing a $31 million charge to expense and recording a $9 million charge for impairment of its undeveloped geothermal properties. In 1994, FRP received prepayment of these notes. In 1993, FRP charged $86.6 million to expense for the recovery of certain assets, primarily its Main Pass oil ($60 million) and non-Main Pass sulphur assets. FRP also recognized an $11.8 million gain primarily from the sale of certain previously mined phosphate rock acreage. 9. SUPPLEMENTARY MINERAL RESERVE INFORMATION (UNAUDITED) Proved and probable mineral reserves, including proved oil reserves, follow: December 31, ------------------------------------------------------- 1995 1994 1993 1992 1991 -------- -------- -------- -------- -------- (In Thousands) Sulphur - -long tons a 55,185 41,018 38,637 41,570 42,780 Phosphate rock - -short tons b 186,375 206,661 215,156 208,655 206,183 Oil-barrels 6,638 7,279 9,962 13,861 18,496 a. Main Pass reserves are subject to a 12.5 percent royalty based on net mine revenues. Culberson reserves totaled 15.4 million tons for 1995 and are subject to a 9 percent royalty based on net mine revenues. b. For 1995-1993, represents FRP's share, based on its Capital Interest ownership, of the IMC-Agrico reserves. Contains an average of 68 percent bone phosphate of lime. 10. QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Revenues Operating Income Net Income ---------- ---------- ---------- ---------- (In Thousands, Except Per Unit Amounts) 1995 1st Quarter $ 254,265 $ 54,315 $ 46,332 $.45 2nd Quarter 233,203 48,956 40,926 .40 3rd Quarter a 242,908 35,085 26,835 .26 4th Quarter b 264,736 56,269 47,315 .46 ---------- ---------- ---------- $ 995,112 c $ 194,625 $ 161,408 1.56 ========== ========== ========== 1994 d 1st Quarter $ 182,073 $ 23,451 $ 13,413 $.13 2nd Quarter 185,444 28,762 20,536 .20 3rd Quarter 188,479 32,072 23,261 .22 4th Quarter 209,282 36,333 26,756 .26 ---------- ---------- ---------- $ 765,278c $ 120,618 $ 83,966 .81 ========== ========== ========== a. Includes a $12.3 million charge ($0.12 per unit) for stock option costs resulting from the rise in FTX's common stock price during the period. b. Includes charges totaling $5.4 million ($0.05 per unit) for stock option costs and an early retirement program. c. No customers accounted for ten percent or more of total revenues. Export sales totaled 41 percent in 1995, 38 percent in 1994 and 32 percent in 1993. d. Includes charges of $2.9 million ($0.03 per unit), $0.9 million ($0.01 per unit), $3.4 million ($0.03 per unit) and $3.7 million ($0.04 per unit) for the quarterly periods of 1994, respectively, primarily for certain remediation costs. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE PARTNERS OF FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP: We have audited the accompanying balance sheets of Freeport- McMoRan Resource Partners, Limited Partnership (the Partnership), a Delaware Limited Partnership, as of December 31, 1995 and 1994, and the related statements of operations, cash flow and changes in partners' capital for each of the three years in the period ended December 31, 1995. These financial statements are the responsibility of the General Partner's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of IMC-Agrico Company (the Joint Venture). The Partnership's share of the Joint Venture constitutes 47 percent of assets as of December 31, 1995 and 1994, and 80 percent, 85 percent and 37 percent of the Partnership's total revenues for the years ended December 31, 1995, 1994 and 1993, respectively. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Partnership's interest in the Joint Venture, is based solely on the reports of the other auditors. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31, 1995 and 1994 and the results of its operations and its cash flow for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles. As discussed in Note 1 to the financial statements, effective January 1, 1993, the Partnership changed its method of accounting for periodic scheduled maintenance costs, deferred charges and costs of management information systems. Arthur Andersen LLP New Orleans, Louisiana, January 23, 1996 FRP UNITS. Our units trade on the New York Stock Exchange (NYSE) under the symbol "FRP." The FRP unit price is reported daily in the financial press under "FMRP" in most listings of NYSE securities. At yearend 1995, the number of holders of record of the partnership's units was 14,050. Under federal law, ownership of FRP units is limited to United States citizens. A United States citizen is defined as a person who is eligible to own interests in federal mineral leases, which generally includes (i) U.S. citizens, (ii) domestic entities owned by U.S. citizens, and (iii) domestic corporations owned by U.S. citizens and/or certain foreign persons. Unit price ranges on the NYSE composite tape during 1995 and 1994: 1995 1994 ------------------ ------------------ High Low High Low -------- -------- -------- -------- First Quarter $17.13 $14.25 $20.50 $17.88 Second Quarter 17.38 14.88 20.00 17.13 Third Quarter 20.00* 17.13 18.63 16.13 Fourth Quarter 20.38 18.38 17.38 13.38 OWNERSHIP AT DECEMBER 31, 1995. Units Percent ----------- -------- Public Unitholders 50,143,845 48.46 Freeport-McMoRan Inc. 53,321,933 51.54 ----------- -------- 103,465,778 100.00 =========== ======== CASH DISTRIBUTIONS. Cash distributions declared and paid to public unitholders during the past 12 months total $2.44 per unit. If in any quarter through December 31, 1996, FRP's public unitholders receive cash distributions of less than 60 cents per unit, public unitholders are entitled to receive in subsequent quarters any prior quarter's shortfall below 60 cents per publicly held unit before any cash distributions may be made to holders of general partnership interests. Cash distributions declared and paid per publicly held unit for the quarterly periods of 1995 and 1994 were: 1995 ---------------------------------------- Amount Record Payment Per Unit Date Date -------- -------------- -------------- First Quarter $.615 Apr. 28, 1995 May 15, 1995 Second Quarter .60 Jul. 31, 1995 Aug. 15, 1995 Third Quarter .60 Oct. 31, 1995 Nov. 15, 1995 Fourth Quarter .625 Jan. 31, 1996 Feb. 15, 1996 1994 ---------------------------------------- Amount Record Payment Per Unit Date Date -------- -------------- -------------- First Quarter $.60 Apr. 29, 1994 May 14, 1994 Second Quarter .60 Jul. 29, 1994 Aug. 15, 1994 Third Quarter .60 Oct. 31, 1994 Nov. 15, 1994 Fourth Quarter .60 Jan. 31, 1995 Feb. 15, 1995 Cash distributions in 1995 were a return of capital for federal income tax purposes and will generally not be taxed, although the partnership did generate taxable income that is reportable by some, but not all, unitholders. In March unitholders receive individualized tax information for the previous year from the partnership. For additional information, please contact the Investor Relations Department. FRP has announced that beginning with the cash distribution for the fourth quarter of 1993, it no longer intends to supplement distributable cash with borrowings. FRP's ability to continue to distribute cash to its public unitholders is dependent on the cash distributions received from IMC-Agrico Company, which will primarily be determined by its operating results, and the future cash flow of FRP's sulphur and oil operations. As a result, future FRP distributions will be effected by the cyclical nature of its agricultural minerals business. EX-21 6 Exhibit 21.1 List of Subsidiaries of FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP Name Under Which Entity Organized It Does Business ----------------------------------- --------- ---------------- IMC-Agrico Company Delaware Same EX-23 7 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our reports included herein or incorporated by reference in this Form 10-K, into Freeport-McMoRan Resource Partners, Limited Partnership's previously filed Registration Statement on Form S-3 (File No. 33-37441). /s/ Arthur Andersen LLP ----------------------- Arthur Andersen LLP New Orleans, Louisiana, March 27, 1996 EX-23 8 Exhibit 23.2 CONSENT OF ERNST & YOUNG LLP We consent to the use of our report dated January 15, 1996, with respect to the financial statements of IMC-Agrico Company (not presented separately herein), incorporated by reference in the Registration Statement (Form S-3 No. 33-37441) and related Prospectus of Freeport-McMoRan Resource Partners, Limited Partnership and included in this Annual Report (Form 10-K) for the year ended December 31, 1995. /s/ERNST & YOUNG LLP ----------------------- ERNST & YOUNG LLP Chicago, Illinois March 27, 1996 EX-24 9 EXHIBIT 24.1 POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ Rene L. Latiolais --------------------- Rene L. Latiolais POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity as an officer of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, and RENE L. LATIOLAIS, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ Charles W. Goodyear ----------------------- Charles W. Goodyear POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in her capacity as an officer of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, her true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of her, in her name and in her capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 7th day of March, 1996. /s/ Nancy D. Bonner ------------------- Nancy D. Bonner POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ Richard C. Adkerson ----------------------- Richard C. Adkerson POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ Robert W. Bruce III ----------------------- Robert W. Bruce III POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ Thomas B. Coleman --------------------- Thomas B. Coleman POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ Robert A. Day ----------------- Robert A. Day POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ William B. Harrison, Jr. ---------------------------- William B. Harrison, Jr. POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ Henry A. Kissinger ---------------------- Henry A. Kissinger POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ Bobby Lee Lackey -------------------- Bobby Lee Lackey POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in her capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, her true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of her, in her name and in her capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ Gabrielle K. McDonald ------------------------- Gabrielle K. McDonald POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ George Putnam ----------------- George Putnam POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ B. M. Rankin, Jr. --------------------- B. M. Rankin, Jr. POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 6th day of February, 1996. /s/ J. Taylor Wharton --------------------- J. Taylor Wharton POWER OF ATTORNEY ----------------- BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Inc., a Delaware corporation and Administrative Managing General Partner of Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS and CHARLES W. GOODYEAR, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of FRP on Form 10-K for the year ended December 31, 1995, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 12th day of February, 1996. /s/ Ward W. Woods, Jr. ---------------------- Ward W. Woods, Jr. EX-27 10
5 This schedule contains summary financial information extracted from Freeport-McMoRan Resource Partners, Limited Partnership financial statements at December 31, 1995 and for the 12 months then ended, and is qualified in its entirety by reference to such financial statements. 0000793421 FREEPORT-MCMORAN RESOURCE PARTNERS, LIMITED PARTNERSHIP 1,000 YEAR DEC-31-1995 DEC-31-1995 22,508 0 57,047 0 119,010 226,311 1,829,271 880,140 1,229,105 127,020 384,241 404,466 0 0 0 1,229,105 995,112 995,112 732,371 732,371 0 0 31,518 161,408 0 161,408 0 0 0 161,408 1.56 0
EX-99 11 Exhibit 99.1 Report of Ernst & Young LLP We have audited the balance sheets of IMC-Agrico Company (a Partnership) as of December 31, 1995 and 1994, and June 30, 1995 and the related statements of earnings, changes in partners' capital and cash flows for the six-month periods ended December 31, 1995 and 1994, and the year ended June 30, 1995 (not presented separately herein). These financial statements are the responsibility of IMC-Agrico Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of IMC-Agrico Company as of December 31, 1995 and 1994, and June 30, 1995, and the results of its operations and its cash flows for the six-month periods ended December 31, 1995 and 1994 and the year ended June 30, 1995 in accordance with generally accepted accounting principles. /s/ERNST & YOUNG LLP -------------------- ERNST & YOUNG LLP Chicago, Illinois January 15, 1996 -----END PRIVACY-ENHANCED MESSAGE-----