EXHIBIT 10.8
AMENDMENT NO. 4 OF AGREEMENT
This Amendment No. 4 of Agreement ("Amendment No. 4") is effective as
of January 1, 1997, between Office Cherifien des Phosphates ("OCP") and
Mississippi Phosphates Corporation ("MPC").
WHEREAS, MPC and OCP are parties to that certain Agreement with an effective
date of September 15, 1991, for the sale and purchase of all MPC's requirements
of phosphate rock at its Pascagoula, plant ("Agreement"); and
WHEREAS, the Agreement has been amended by Amendment No. 1 effective as of
July 1, 1992, Amendment No. 2 effective as of July 1, 1993, and Amendment No. 3
effective as of January 1, 1995; and
WHEREAS, MPC and OCP desire to further amend the Agreement as hereinafter
set forth; and
WHEREAS, MISSISSIPPI CHEMICAL CORPORATION, the parent company of MPC, agrees
to be substituted to MPC in taking responsibility of the latest with respect to
the environmental problems linked to the gypsum stacks; and
NOW, THEREFORE, MPC and OCP hereby agree as follows:
1. Article I of the Agreement is hereby amended by changing the second
sentence of the first paragraph thereof to read in its entirety as follows:
The term of this Agreement shall commence on the Effective Date and
shall continue until June 30, 2016.
2. The Agreement is hereby amended by adding thereto a new Article XIII,
which shall read in its entirety as follows:
ARTICLE XIII
Subject to its timely receipt of all required governmental permits,
authorizations and approvals in acceptable form, MPC intends to
construct a new phosphogypsum disposal facility (the "New Gypsum
Facility"), at an estimated cost of $16.2 million, which will
ultimately replace the phosphogypsum disposal facility currently being
utilized by MPC (the "Old Gypsum Facility"). With respect to the New
Gypsum Facility and the Old Gypsum Facility, MPC and OCP agree as
follows:
(a) Cost of Products Sold, as defined in Article IV hereof, shall
include depreciation expense related to the actual cost of the New
Gypsum Facility. As each ton of phosphogypsum is placed in the New
Gypsum Facility, Cost of Products Sold shall be increased by a "units-
of-production" depreciation charge equal to the quotient of (i) the
undepreciated cost of the New Gypsum Facility divided by (ii) the
estimated number of tons of unused capacity
remaining in the New Gypsum Facility. It is expected that this capacity
will be utilized at reasonably uniform rates over its estimated useful
life of 18 years.
(b) Cost of Products Sold, as defined in Article IV hereof, shall
include charges related to the estimated cost of closing the New Gypsum
Facility. As each ton of phosphogypsum is placed in the New Gypsum
Facility, Cost of Products Sold shall be increased by a closure charge
equal to the quotient of (i) the unamortized estimated cost of closing
the New Gypsum Facility divided by (ii) the estimated number of tons of
unused capacity remaining in the New Gypsum Facility. The estimated
cost of closing the New Gypsum Facility is $13.5 million. Closure
charges related to the Old Gypsum Facility will continue to be
recognized as its remaining capacity is utilized. The estimated closure
cost of the Old Gypsum Facility is $9.4 million, out of which an amount
of $2.24 million has to be amortized as from July 1, 1996, till
saturation of the Old Gypsum storage.
(c) If, prior to the actual closure of either the New Gypsum
Facility or the Old Gypsum Facility, a third party assumes
responsibility for the cost of closing either the New Gypsum Facility
or the Old Gypsum Facility, then MPC agrees to pay to OCP an amount
equal to fifty percent (50%) of the unspent portion of all closure
charges which have been recognized and reflected in all previous
calculations of Additional Price pursuant to Article IV of this
Agreement and which relate to the facility for which the third party
has assumed responsibility to close. MPC further agrees that OCP shall
have no responsibility for effecting the actual closure of either the
New Gypsum Facility or the Old Gypsum Facility.
3. The Agreement is hereby amended by adding thereto a new Article XIV,
which shall read in its entirety as follows:
ARTICLE XIV
Subject to its timely receipt of all required governmental permits,
authorizations and approvals in acceptable form, MPC intends to
construct an expansion of the Pascagoula Plant (the "Pascagoula Plant
Expansion"), which is expected to increase the Pascagoula Plant's
annual production rate to approximately 900,000 short tons, at an
estimated cost of $10.45 million. Cost of Products Sold, as defined in
Article IV hereof, shall include depreciation expense related to the
actual cost of the assets comprising the Pascagoula Plant Expansion.
The assets comprising the Pascagoula Plant Expansion will be
depreciated on a "straight-line" basis over their estimated useful
lives, which range from five (5) to eighteen (18) years and set forth
in the table hereto as Schedule 1 to this Amendment No. 4.
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4. The Agreement is hereby amended by adding thereto a new Article XV,
which shall read in its entirety as follows:
ARTICLE XV
MPC agrees to indemnify, hold harmless and defend OCP from and against
any and all losses, costs, damages, injuries, liabilities, claims,
demands, penalties, or causes of action arising out of or in connection
with the environmental conditions at the Old Gypsum Facility and the
New Gypsum Facility.
In any case including MPC failure, MISSISSIPPI CHEMICAL CORPORATION,
the parent company of MPC, will be sole responsible and will pay for
all losses, costs, damages, injuries, liabilities, claims, demands,
penalties, or causes of action arising out of or in connection with the
environmental conditions at the Old Gypsum Facility and the New Gypsum
Facility.
5. The Agreement is amended by attaching thereto Exhibit F which is
attached as Schedule 1 to this Amendment No. 4.
6. Except as specifically set forth in this Amendment No. 4, all of the
terms and conditions of the Agreement, as heretofore amended, shall continue in
full force and effect.
7. All capitalized terms used in this Amendment No. 4 and not otherwise
defined herein shall have the meanings set forth in the Agreement.
IN WITNESS WHEREOF, MPC and OCP have caused this Amendment No. 4 to be duly
executed as of the 1st day of January, 1997.
MADE OUT IN DUPLICATE ON FEBRUARY 20, 1997.
MISSISSIPPI PHOSPHATES CORPORATION OFFICE CHERIFIEN DES PHOSPHATES
AND MISSISSIPPI CHEMICAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
President General Manager
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SCHEDULE 1 TO AMENDMENT NO. 4 OF AGREEMENT
EXHIBIT F
THE PASCAGOULA PLANT EXPANSION
The Pascagoula Plant Expansion shall consist of all the new equipments and
facilities and all improvements and modifications to the existing production
units and storage facilities at the Pascagoula Plant which are assembled,
constructed and installed in order to increase the Pascagoula Plant's annual
production rate to approximately 900,000 short tons. The major components of
the Pascagoula Plant Expansion are set forth hereinafter together with their
estimated useful lives and straight-line depreciation in US$/year.
SCHEDULE 1 TO AMENDMENT NO. 4 OF AGREEMENT
EXHIBIT F
THE PASCAGOULA PLANT EXPANSION
CAPITAL COST AND PRELIMINARY DEPRECIATION SCHEDULE
INCREASE DAP PRODUCTION CAPACITY
ST. LINE
USEFUL LIFE DEPRECIATION
COST (YRS) ESTIMATED $/Year
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I. PHOSPHORIC ACID
PLANT EXPANSION
A. Additional Digestor & Cooling $ 1,251,000 10 Years $125,100
B. Filte and Evaporator Upgrades $ 1,765,000 10 Years $176,500
C. Recycle & Sulfuric Acid
System Modification in Phos Acid $ 214,000 10 Years $ 21,400
D. Sulfuric Acid Transfer Piping $ 513,000 10 Years $ 51,300
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$ 3,743,000
II. DAP STORAGE $ 3,499,000 18 Years $194,389
III. DAP PLANT EXPANSION
A. Neutralizer Addition $ 586,000 15 Years $ 39,067
B. Weak Acid Scrubber $ 231,000 15 Years $ 15,400
Modification
C. Product Cooler Upgrade $ 475,000 15 Years $ 31,667
D. Sulfuric Acid Catalyst $ 430,000 5 Years $ 86,000
Replacement
E. Granulator Upgrade $ 373,000 15 Years $ 24,867
F. Upgrade Recycle Circuit $ 477,000 15 Years $ 31,800
G. Reslope Dryer $ 141,000 15 Years $ 9,400
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$ 2,713,000
IV. ENGINEERING AND SUPERVISION $ 498,000 13.75 Years $ 36,218
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TOTAL I, II, III & IV $10,453,000
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