AMENDMENT NO.1
Table of Contents
Index to Financial Statements

As filed with the Securities and Exchange Commission on November 12, 2004.

Registration No. 333-119275


UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549


Amendment No. 1

to

FORM S-4

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933


THE MOSAIC COMPANY

MOSAIC FERTILIZER, LLC

MOSAIC CROP NUTRITION, LLC

(Exact Name of Registrant as Specified in Its Charter)


Delaware   2870   20-0891589
Delaware   2874   36-4554316
Delaware   5191   20-1026205

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Number)

 

(I.R.S. Employer

Identification No.)

 

12800 Whitewater Drive

Suite 200

Minnetonka, Minnesota 55343

Telephone: (952) 984-0316

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)


Fredric W. Corrigan

CEO and President

The Mosaic Company

12800 Whitewater Drive

Suite 200

Minnetonka, Minnesota 55343

Telephone: (952) 984-0316

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)


Copies to:

Jonathan B. Abram, Esq.   Larry A. Barden, Esq.
Dorsey & Whitney LLP   Lisa J. Reategui, Esq.
50 South Sixth Street   Sidley Austin Brown & Wood LLP
Suite 1500   Bank One Plaza
Minneapolis, Minnesota 55402   10 South Dearborn Street
Telephone: (612) 340-2600   Chicago, Illinois 60603
    Telephone: (312) 853-7000

Approximate date of commencement of proposed sale of the securities to the public:    The exchange will commence as soon as practicable after the effective date of this Registration Statement.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨


CALCULATION OF REGISTRATION FEE


Title Of Each Class Of

Securities To Be Registered

  Aggregate
Amount to
be
Registered
  Proposed Maximum
Aggregate Offering
Price Per Unit(2)
  Proposed Maximum
Aggregate Offering
Price(2)
  Amount of
Registration
Fee(3)

Guarantees of debt securities issued by Mosaic Global Holdings Inc. and Phosphate Acquisition Partners L.P. (1)

  $1,812,487,000   100%   $1,812,487,000   $229,643

(1) This registration statement relates to the offer by each of The Mosaic Company, Mosaic Fertilizer, LLC and Mosaic Crop Nutrition, LLC to fully and unconditionally guarantee certain outstanding debt securities of Mosaic Global Holdings Inc. and Phosphate Acquisition Partners L.P. in return for the consent of the holders of the debt securities to certain amendments to provisions of the indentures under which the debt securities were issued.
(2) Estimated solely for the purposes of calculating the registration fee.
(3) The appropriate registration fee was paid by the Registrants upon initially filing this registration statement.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.



Table of Contents
Index to Financial Statements

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the SEC is effective. This prospectus is not an offer to sell nor is it an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED NOVEMBER 12, 2004

PROSPECTUS

Mosaic Global Holdings Inc.

(formerly known as IMC Global Inc.)

Phosphate Acquisition Partners L.P.

(the successor to Phosphate Resource Partners Limited Partnership)

Solicitation of Consents Relating to

$1,812,487,000 Aggregate Principal Amount of

Certain Debt Securities issued by

Mosaic Global Holdings Inc. and

Phosphate Acquisition Partners L.P.

 


The Mosaic Company

Mosaic Fertilizer, LLC

Mosaic Crop Nutrition, LLC

Guarantees

 


 

Mosaic Global Holdings Inc. (formerly known as IMC Global Inc.), referred to as IMC, and Phosphate Acquisition Partners L.P. (the successor to Phosphate Resource Partners Limited Partnership), referred to as PLP, are soliciting your consents to proposed amendments to the terms of the debt securities listed below, which are referred to collectively as the Securities, in return for the identified consideration.

 

The consents are being sought in connection with the recently completed combination of IMC with the fertilizer businesses of Cargill, Incorporated, referred to as Cargill, which created a new, combined public company named The Mosaic Company, referred to as Mosaic. The combination transactions, referred to as the Cargill transactions, resulted in IMC becoming a wholly owned subsidiary of Mosaic. Prior to completion of the Cargill transactions, Phosphate Resource Partners Limited Partnership was merged with and into Phosphate Acquisition Partners L.P., a wholly owned subsidiary of IMC, pursuant to which Phosphate Acquisition Partners L.P. was the surviving entity. That merger is referred to as the PLP merger.

 

            Total Consideration

   

Outstanding

Principal Amount


  CUSIP No.

 

Early Consent

Premium


  Consent
Fee


  Guarantees

            (per $1,000 principal amount
of High-Yield Notes)


   

SECURITIES OF IMC

                       

High-Yield Notes

                       

11.250% Senior Notes due 2011

  $ 417,500,000   449669CL2/
449669CJ7/

449669CP3
  $1.50   $ 1.00   Guarantees

10.875% Senior Notes due 2008

  $ 400,000,000   449669CK4/
449669CH1
  $1.50   $ 1.00   Guarantees

10.875% Senior Notes due 2013

  $ 400,000,000   449669CN8/
449669CM0
  $1.50   $ 1.00   Guarantees

Other IMC Securities

                       

6.875% Debentures due 2007

  $ 150,000,000   449669AC4   —       —     Guarantees

7.30% Debentures due 2028

  $ 150,000,000   449669AK6   —       —     Guarantees

7.375% Debentures due 2018

    $90,000,000   449669CD0   —       —     Guarantees

7.625% Notes due 2005

  $ 26,902,000   449669CG3   —       —     Guarantees

9.45% Senior Debentures due 2011

  $ 18,490,000   449669AB6   —       —     Guarantees

6.55% Notes due 2005

  $ 9,595,000   449669AJ9   —       —     Guarantees

SECURITIES OF PLP

                       

7% Senior Notes due 2008

  $ 150,000,000   356903AB0   —       —     Guarantees

The Expiration Time (i.e., the time that the consent solicitation with respect to each series of the Securities will expire) will be 5:00 p.m., New York City time, on [    ], [    ], 2004, unless extended by IMC or PLP in their discretion. Holders of High-Yield Notes (as defined below) must deliver valid consents prior to the Expiration Time to receive the Consent Fee. The period during which the consent solicitation is open is referred to as the solicitation period.

 

The Early Consent Premium Deadline (i.e., the time by which holders of High-Yield Notes must deliver valid consents in order to be entitled to receive the Early Consent Premium) will be 5:00 p.m., New York City time, on [    ], [    ], 2004, unless extended by IMC in its discretion. Holders who receive the Early Consent Premium with respect to any High-Yield Notes will also receive the Consent Fee and the Guarantees with respect to those High-Yield Notes.

 

(continued on next page)


Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

 


The Solicitation Agent for the consent solicitation is:

Goldman, Sachs & Co.

 


 

The date of this prospectus is                     , 2004.


Table of Contents
Index to Financial Statements

(continued from previous page)

 

IMC and PLP are requesting consents to proposed amendments to the terms of the Securities to, among other things, (i) amend covenants contained in the indentures governing IMC’s 11.250% Senior Notes due 2011, 10.875% Senior Notes due 2008 and 10.875% Senior Notes due 2013 to provide IMC and its subsidiaries with the operational flexibility to more effectively integrate the businesses of IMC and the Cargill Fertilizer Businesses (as defined below) and (ii) amend covenants contained in the indentures governing each series of the Securities to permit IMC and PLP to provide reports of Mosaic to the holders of their Securities (and, if applicable, to file such reports with the Securities and Exchange Commission) in lieu of reports relating only to IMC or PLP, as the case may be. The proposed amendments are referred to collectively as the Amendments. The indentures governing IMC’s 11.250% Senior Notes due 2011, 10.875% Senior Notes due 2008 and 10.875% Senior Notes due 2013 are referred to collectively as the High-Yield Indentures and the notes governed thereby as the High-Yield Notes.

 

The Amendments with respect to any series of the Securities will be approved if, prior to the expiration of the solicitation period, valid consents are received and not properly revoked from the holders of a majority in aggregate principal amount of that series outstanding as of the record date (as specified below). A series of the Securities for which the requisite consents are received and accepted is referred to as an Approving Series. IMC and PLP will not accept consents with respect to any series of the Securities unless the other conditions to the consent solicitation set forth in this prospectus are satisfied or waived, which conditions include the approval of the Amendments by EACH series of High-Yield Notes. If the Amendments become operative with respect to any series of the Securities, they will bind all holders of that series, including those that did not give their consent.

 

In return for the consents, Mosaic and its wholly owned subsidiaries, Mosaic Fertilizer, LLC and Mosaic Crop Nutrition, LLC, which are referred to as Mosaic Fertilizer and Mosaic Crop Nutrition, respectively, are offering to fully and unconditionally guarantee the obligations of IMC and PLP, as applicable, under each Approving Series. The guarantees of Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition are referred to collectively as the Guarantees. No matter the outcome of the consent solicitation, the High-Yield Notes will continue to be guaranteed by substantially the same subsidiaries of IMC that currently guarantee the High-Yield Notes. In addition, in return for the consents to the proposed Amendments to the High-Yield Notes, IMC is offering to pay a consent fee, referred to as the Consent Fee, of $1.00 for each $1,000 principal amount of High-Yield Notes in respect of which a valid consent has been delivered (and not properly revoked) prior to the Expiration Time and accepted by IMC. IMC is also offering to pay a premium, referred to as the Early Consent Premium, of $1.50 for each $1,000 principal amount of High-Yield Notes in respect of which a valid consent has been delivered (and not properly revoked) prior to the Early Consent Premium Deadline and accepted by IMC. Holders who receive the Early Consent Premium with respect to any High-Yield Notes will also receive the Consent Fee and the Guarantees with respect to those High-Yield Notes. The Consent Fee and the Early Consent Premium are referred to together as the Consent Payments. IMC is offering the Consent Payments only to holders of the High-Yield Notes. The Guarantees will be issued and the Consent Payments will be made to applicable holders only if the conditions to the consent solicitation described in this prospectus are satisfied or waived.

 

IMC and PLP are seeking consents from each holder of record of the Securities as of 5:00 p.m., New York City time, on [                    ], [                    ], 2004, which is the record date for the consent solicitation and is referred to as the record date. Consents may not be revoked except in the manner described in this prospectus.

 

The consent solicitation and Mosaic’s, Mosaic Fertilizer’s and Mosaic Crop Nutrition’s offer of their respective Guarantees are described in detail in this prospectus. IMC, PLP, Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition urge you to read this prospectus carefully, including the “ Risk Factors” section beginning on page 14 of this prospectus. None of IMC, PLP, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition, the Solicitation Agent or the Information Agent or any other person makes any recommendation as to whether or not you should deliver your consent to the proposed Amendments.


Table of Contents
Index to Financial Statements

NOTICE TO FLORIDA RESIDENTS

 

In accordance with regulations promulgated under the Trade Sanctions Reform and Export Enhancement Act of October 2000 (the “TSRA”), Cargill, on behalf of itself and its majority owned and controlled affiliates, has applied for and received confirmations from the U.S. Commerce Department authorizing it to sell and export dicalcium phosphate and monocalcium phosphate to Cuba under License Exception AGR. The TRSA authorizes the export and re-export of certain agricultural commodities, medicine and medical devices to Cuba.

 

Pursuant to these AGR License Exception notices, Mosaic Fertilizer, a wholly-owned subsidiary of Mosaic (which is a majority-owned subsidiary of Cargill), currently has an agreement with Alimport to sell dicalcium phosphate to be shipped to the Republic of Cuba. Alimport is also known as Empresa Cubana Importadora de Alimentos, the Cuban agency responsible for purchasing agricultural commodities for its country.

 

The information provided herein is accurate as of the date the registration of the Guarantees was declared effective by the United States Securities and Exchange Commission (the “SEC”) and by the Department of Financial Services of the State of Florida.

 

The current information concerning Mosaic Fertilizer’s business dealings with the government of Cuba or with any person or affiliate located in Cuba may be obtained from the Florida Department of Financial Services at the address or phone number contained below.

 

Florida Department of Financial Services

200 East Gaines Street

Tallahassee, FL 32399-0375

(850) 410-9805


Table of Contents
Index to Financial Statements

TABLE OF CONTENTS

 

     Page

SUMMARY

   1
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF THE CARGILL FERTILIZER BUSINESSES    9
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF IMC    10
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATA OF MOSAIC    12
RATIOS OF EARNINGS TO FIXED CHARGES    13
RISK FACTORS    14
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS    26
DESCRIPTION OF THE CONSENT SOLICITATION    28
DESCRIPTION OF THE AMENDED SECURITIES    47
DESCRIPTION OF THE GUARANTEES    100
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES    102
DESCRIPTION OF THE CARGILL TRANSACTIONS    107
DESCRIPTION OF THE PLP MERGER    113
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA    114
MOSAIC BUSINESS    126
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE CARGILL FERTILIZER BUSINESSES    150
MANAGEMENT OF MOSAIC    170
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS OF MOSAIC    179
EXPERTS    181
LEGAL MATTERS    181
WHERE YOU CAN FIND MORE INFORMATION    182
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS    F-i

 

Annex A     Marked Description of IMC’s 11.250% Senior Notes due 2011 and 10.875% Senior Notes due 2008 showing proposed Amendments
Annex B     Marked Description of IMC’s 10.875% Senior Notes due 2013 showing proposed Amendments
Annex C     Summary of Key Amendments to the High-Yield Notes

 

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Table of Contents
Index to Financial Statements

 

SUMMARY

 

This summary highlights the material information in this prospectus, but may not contain all of the information that is important to you. You are urged to carefully read this entire document, including the annexes and other documents to which this document refers, for a more complete understanding of the consent solicitation. In addition, important business and financial information about IMC and PLP has been incorporated by reference into this prospectus. Please see “Where You Can Find More Information.”

 

This summary and the balance of this prospectus contain forward-looking statements about events that are not certain to occur as described or at all, and you are cautioned not to place undue reliance on those statements. Please carefully read “Cautionary Statement Regarding Forward-Looking Statements.”

 

The Cargill Transactions

 

Under the terms of an Agreement and Plan of Merger and Contribution dated as of January 26, 2004, as amended, referred to as the merger and contribution agreement, IMC merged with GNS Acquisition Corp., a wholly owned subsidiary of Mosaic, on October 22, 2004 and became a wholly owned subsidiary of Mosaic. In that merger, referred to as the Cargill merger, IMC’s common stockholders received one share of Mosaic common stock for each share of IMC common stock owned. In addition, holders of shares of IMC’s 7.50% mandatory convertible preferred stock, referred to as IMC 7.50% preferred stock, received one share of 7.50% mandatory convertible preferred stock of Mosaic, referred to as Mosaic 7.50% preferred stock, for each share they held. The merger and contribution agreement also provided for Cargill and its affiliates to contribute equity interests in entities owning the fertilizer businesses of Cargill, referred to as the Cargill Fertilizer Businesses, to Mosaic immediately prior to the Cargill merger, which contribution is referred to as the Cargill contribution. In consideration for the Cargill contribution, Cargill and its affiliates received shares of Mosaic common stock, plus shares of Mosaic’s Class B common stock, referred to as Mosaic Class B common stock. Immediately following the completion of the transactions contemplated by the merger and contribution agreement:

 

  Ÿ   IMC’s former common stockholders owned 33.5% of the outstanding shares of Mosaic common stock;

 

  Ÿ   Cargill and its affiliates owned 66.5% of the outstanding shares of Mosaic common stock;

 

  Ÿ   Cargill and its affiliates owned 5,458,955 shares of Mosaic Class B common stock; and

 

  Ÿ   IMC’s former preferred stockholders owned all 2,750,000 shares of Mosaic 7.50% preferred stock.

 

At the time of the Cargill merger, IMC Global Inc. changed its legal name to Mosaic Global Holdings Inc.

 

The High-Yield Indentures contain a provision requiring IMC to offer to purchase all of the outstanding High-Yield Notes upon a change of control of IMC at 101% of the principal amount thereof (plus accrued and unpaid interest). The completion of the Cargill transactions resulted in a change of control of IMC under the terms of the High-Yield Indentures. IMC intends to make the required offer to purchase the outstanding High-Yield Notes within the time period required by the High-Yield Indentures.

 

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Table of Contents
Index to Financial Statements

 

The PLP Merger

 

Prior to completion of the PLP merger, PLP was a publicly traded Delaware limited partnership controlled by IMC, in which IMC owned indirectly a 51.6% partnership interest. The remaining interests in PLP were publicly owned units representing limited partner interests and were traded on the New York Stock Exchange.

 

Under the terms of an Agreement and Plan of Merger dated as of March 17, 2004, referred to as the PLP merger agreement, Phosphate Resource Partners Limited Partnership merged with and into Phosphate Acquisition Partners L.P. on October 19, 2004, with Phosphate Acquisition Partners L.P. surviving in the merger, which merger is referred to as the PLP merger. In the PLP merger, each publicly owned unit of PLP was converted into the right to receive 0.2 shares of IMC common stock, which then became the right to receive Mosaic common stock upon completion of the Cargill transactions.

 

The Companies

 

Mosaic Global Holdings Inc. (formerly IMC Global Inc.)

100 South Saunders Road

Suite 300

Lake Forest, Illinois 60045

(847) 739-1200

 

IMC, a Delaware corporation incorporated in 1987, is one of the world’s leading producers and distributors of crop nutrients to the domestic and international agricultural communities, and one of the foremost manufacturers and distributors of animal feed ingredients worldwide. On October 22, 2004, IMC became a wholly owned subsidiary of Mosaic as a result of the completion of the Cargill transactions. In 1997, IMC merged with Freeport-McMoRan, Inc., with IMC surviving, and IMC became the administrative managing general partner of PLP. IMC mines, processes and distributes potash in the United States and Canada and is the owner of Mosaic Phosphates Company (formerly known as IMC Phosphates Company), referred to as Mosaic Phosphates, a leading producer, marketer and distributor of phosphate crop nutrients and animal feed ingredients.

 

In connection with the completion of the Cargill transactions, IMC’s common stock and 7.50% mandatory convertible preferred stock were delisted from the New York and Chicago Stock Exchanges.

 

Phosphate Acquisition Partners L.P. (the successor to Phosphate Resource Partners Limited Partnership)

100 South Saunders Road

Suite 300

Lake Forest, Illinois 60045

(847) 739-1200

 

PLP is a wholly owned subsidiary of IMC. PLP, through its investment in Mosaic Phosphates, is one of the world’s largest and lowest cost producers, marketers and distributors of phosphate crop nutrients and animal feed ingredients, with operations in central Florida and on the Mississippi River in Louisiana.

 

Mosaic Phosphates’ business includes the mining and sale of phosphate rock and the production, marketing and distribution of phosphate crop nutrients and animal feed ingredients. IMC Phosphates was formed as a joint venture partnership in July 1993 when PLP and IMC contributed their respective phosphate crop nutrients businesses to Mosaic Phosphates. Mosaic Phosphates is 41.5% owned by PLP and 58.5% owned by IMC.

 

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Index to Financial Statements

 

PLP’s publicly traded partnership units were delisted from the New York Stock Exchange in connection with the completion of the PLP merger.

 

The Mosaic Company

12800 Whitewater Drive

Suite 200

Minnetonka, Minnesota 55343

(952) 984-0316

 

Mosaic is a Delaware corporation which was initially formed under the name Global Nutrition Solutions, Inc. on January 23, 2004 for the purpose of effecting the combination of IMC’s businesses with the Cargill Fertilizer Businesses. Mosaic’s corporate name was changed to The Mosaic Company on June 17, 2004. As a result of the completion of the Cargill transactions on October 22, 2004, Mosaic now owns, through its subsidiaries, the Cargill Fertilizer Businesses and the businesses of IMC. The Mosaic Company is one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients. For the global agriculture industry, Mosaic is a single source for phosphates, potash, nitrogen fertilizers and feed ingredients. Based in Minnetonka, Minnesota, Mosaic serves customers in 50 countries through phosphate production facilities in Florida, Louisiana and international markets, including Brazil and China; potash production facilities in New Mexico, Michigan and Saskatchewan, Canada; a joint venture interest in the Saskferco Products, Inc., nitrogen production facility; and distribution and customer service operations in 15 countries.

 

Shares of Mosaic common stock and Mosaic 7.50% preferred stock are listed on the New York Stock Exchange under the symbols “MOS” and “MOSPRM,” respectively.

 

Mosaic Fertilizer, LLC

c/o The Mosaic Company

12800 Whitewater Drive

Suite 200

Minnetonka, Minnesota 55343

(952) 984-0316

 

Mosaic Fertilizer is a Delaware limited liability company formed in May 2004 and a direct, wholly owned subsidiary of Mosaic. Effective June 1, 2004, in anticipation of the then pending Cargill transactions, Cargill Fertilizer, Inc., a wholly-owned subsidiary of Cargill, transferred and conveyed to Mosaic Fertilizer substantially all of the assets and liabilities comprising Cargill’s phosphate mining and manufacturing business, including all mine properties and manufacturing facilities owned by Cargill in Florida. Mosaic Fertilizer’s business includes the manufacture and sale of diammonium phosphate (DAP), monammonium phosphate (MAP), MicroEssentials and calcium phosphate feed products (commonly referred to as Monocal and Dical) to customers around the world.

 

Mosaic Crop Nutrition, LLC

c/o The Mosaic Company

12800 Whitewater Drive

Suite 200

Minnetonka, Minnesota 55343

(952) 984-0316

 

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Index to Financial Statements

 

Mosaic Crop Nutrition is a Delaware limited liability company formed in March 2004 and a direct wholly owned subsidiary of Mosaic. Mosaic Crop Nutrition markets a complete line of crop nutrients including specialty branded products such as K-Mag and MicroEssentials and offers value-added services to wholesale and retail distributors throughout the United States. The U.S. distribution business is anchored by seven owned and operated dry bulk warehouses located along the river system that flows through the “corn belt” states of Illinois, Indiana, Kentucky, Minnesota and Missouri. These facilities have a combined storage capacity of more than 325,000 tonnes and annual through-put capacity of approximately 1.7 million tonnes.

 

Cargill, Incorporated

15615 McGinty Road West

Wayzata, Minnesota 55391

(952) 742-7575

 

Cargill is an international provider of food, agricultural and risk management products and services. With 101,000 employees in 60 countries, the company is committed to using its knowledge and experience to collaborate with customers to help them succeed.

 

Rationale for the Consent Solicitation

 

The two main purposes of the consent solicitation and the proposed Amendments are:

 

  Ÿ   to amend certain covenants in the High-Yield Indentures to provide IMC and its subsidiaries with the operational flexibility to more effectively integrate the businesses of IMC and the Cargill Fertilizer Businesses; and

 

  Ÿ   to amend certain covenants in the indentures governing each series of the Securities (including the High-Yield Indentures), referred to collectively as the Indentures, to permit IMC or PLP, as the case may be, to provide copies of Mosaic’s reports filed with the SEC pursuant to the requirements of the Securities Exchange Act of 1934, as amended, referred to as the Securities Exchange Act, to the holders of the Securities (and, if applicable, to file such reports with the SEC) in lieu of reports relating only to IMC or PLP, as the case may be.

 

Summary Terms of the Consent Solicitation

 

The Securities

For a list of the series of Securities to which the consent solicitation relates, please see “Description of the Consent Solicitation.”

 

Record Date

The record date is 5:00 p.m., New York City time, on [                    ], [                    ], 2004.

 

Requisite Consents

The approval of the Amendments with respect to any series of the Securities requires the delivery prior to the Expiration Time (as described below) and acceptance by IMC or PLP, as the case may be, of valid consents (that are not properly revoked) by the holders of a majority in aggregate principal amount of that series outstanding as of the record date, which are referred to as the Requisite Consents for that series. Any series of the Securities for which Requisite Consents are received and accepted is referred to as an Approving Series.

 

Effective Time

IMC and PLP intend to execute a supplemental indenture setting forth the Amendments with respect to the applicable series of the Securities as soon as practicable after receiving

 

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Table of Contents
Index to Financial Statements

 

 

the Requisite Consents for such series. The time of the execution of the supplemental indenture with respect to each series of the Securities is referred to as the Effective Time for such series. Each series of Securities may have its own Effective Time. Notwithstanding the execution and effectiveness of the applicable supplemental indenture at the Effective Time, the Amendments provided therein will not become operative and binding until the Operative Date (as defined below).

 

Expiration Time

The solicitation period for each series of the Securities will expire at 5:00 p.m., New York City time, on [            ], [            ], 2004, unless IMC or PLP extend this period as to any series of the Securities in their discretion. The expiration of the solicitation period as to any series of the Securities, as may be extended by IMC or PLP, is referred to as the Expiration Time for such series.

 

Operative Date of the Amendments

IMC and PLP intend to accept the Requisite Consents with respect to any series of the Securities and cause the Amendments thereto to become operative on the earliest date following the Expiration Time on which the conditions to the consent solicitation described in this prospectus are satisfied or waived for such series. Such date with respect to any series of the Securities is referred to as the Operative Date for that series. Each series of the Securities may have its own Operative Date.

 

Consent Payments

IMC is offering to pay a Consent Fee of $1.00 for each $1,000 aggregate principal amount of High-Yield Notes with respect to which a valid consent to the proposed Amendments to the High-Yield Notes has been delivered and not properly revoked prior to the Expiration Time and accepted by IMC.

 

IMC is also offering to pay an Early Consent Premium of $1.50 for each $1,000 principal amount of High-Yield Notes with respect to which a valid consent to the proposed Amendments to the High-Yield Notes has been delivered and not properly revoked prior to the Early Consent Premium Deadline (as described below) and accepted by IMC. Holders who receive the Early Consent Premium with respect to any High-Yield Notes will also receive the Consent Fee and the Guarantees with respect to those High-Yield Notes. The Consent Fee and the Early Consent Premium are referred to together as the Consent Payments.

 

The Consent Payments are being offered only to holders of the High-Yield Notes and are not being offered to any holder of any other series of the Securities. Holders of the High-Yield Notes

 

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Index to Financial Statements

 

 

as of the record date that do not deliver consents to the proposed Amendments to the High-Yield Notes or that deliver such consents after the Expiration Time will not be entitled to receive the Consent Fee. Holders of the High-Yield Notes as of the record date that do not deliver consents to the proposed Amendments to the High-Yield Notes or that deliver such consents after the Early Consent Premium Deadline will not be entitled to receive the Early Consent Premium with respect to such High-Yield Notes. The applicable Consent Payments will be made to eligible holders of the High-Yield Notes only if the applicable Operative Date occurs.

 

Early Consent Premium Deadline

Holders of any series of High-Yield Notes must deliver (and not properly revoke) a valid consent to the proposed Amendments to that series no later than 5:00 p.m., New York City time, on [            ], [            ], 2004, in order to be entitled to receive the Early Consent Premium. Such time, as may be extended by IMC in its sole discretion, is referred to as the Early Consent Premium Deadline.

 

Revocation of Consents

A holder of Securities as to which a consent has been given may revoke that consent at any time prior to the earlier of (i) the Expiration Time or (ii) the Effective Time for such series. A holder of Securities as to which a consent has been given may revoke that consent as to those Securities or any portion of those Securities, in integral multiples of $1,000. A revocation of a consent may be made by delivering a written notice of revocation or a changed letter of consent bearing a date later than the date of the prior letter of consent to the Information Agent at the address set forth on the back cover page of this prospectus. Consents that are delivered after the Effective Time, but prior to the Expiration Time, may not be revoked.

 

Offer of the Guarantees

Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition are offering to fully and unconditionally guarantee the obligations of IMC and PLP, as applicable, under each Approving Series. The Guarantees with respect to any series of the Securities will be issued only if the Operative Date for that series occurs. If the applicable conditions are satisfied or waived, Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition will issue their respective Guarantees to the holders of each Approving Series, including to any holders of those series that do not deliver consents. The Guarantees will be in addition to the existing guarantees of the High-Yield Notes by certain subsidiaries of IMC. As used in this prospectus, the term “Affiliate Guarantors” includes Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition and any other affiliate of IMC that, pursuant to the terms of the Indentures (as amended by the proposed Amendments), becomes a guarantor of the Securities in the future.

 

6


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Index to Financial Statements

 

Conditions to the Consent Solicitation

IMC or PLP, as the case may be, will not accept properly executed, delivered and unrevoked consents with respect to any series of the Securities unless:

 

  Ÿ   Requisite Consents for such series have been received (and have not been properly revoked) by IMC or PLP, as the case may be, prior to the Expiration Time for such series;

 

  Ÿ   Requisite Consents for EACH series of the High-Yield Notes have been received (and have not been properly revoked) by IMC prior to the Expiration Time for such series; and

 

  Ÿ   there is no law or regulation which would, and there is no injunction or action or other proceeding (pending or threatened) which could, make unlawful or invalid or enjoin the implementation of any proposed Amendment to such series, the Cargill transactions, the PLP merger, the issuance of the Guarantees with respect to such series or the entering into of the supplemental indenture with respect to such series, or which would question the legality or validity thereof.

 

Timing for Making of the Consent Payments and the Issuance of the Guarantees

IMC will not make any Consent Payments to any eligible holders of High-Yield Notes, and the Affiliate Guarantors will not issue their respective Guarantees with respect to any Approving Series, until the applicable Operative Date.

 

Consequences to Non-Consenting Holders

If IMC or PLP, as the case may be, obtains and accepts the Requisite Consents with respect to the proposed Amendments to any series of the Securities and the supplemental indenture related to those proposed Amendments is executed and becomes operative, those proposed Amendments will be binding on each holder of such series of the Securities, regardless of whether or not that holder delivered its consent to such Amendments.

 

Procedure for Delivery of Consents

Consents must be delivered to the Information Agent prior to the Expiration Time by following the procedures set forth in “Description of the Consent Solicitation—Consent Procedures.” Delivery of consents to any person other than the Information Agent will not be a valid delivery.

 

Amendment and Termination of the Consent Solicitation

IMC and PLP reserve the right, subject to applicable law, to, for any reason, amend, modify or waive the terms of, or terminate, the consent solicitation with respect to any or all series of the Securities by following the procedures described in “Description of the Consent Solicitation—Expiration Time; Early Consent Premium Deadline; Extension; Amendment; Termination.”

 

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Index to Financial Statements

 

Material U.S. Federal Income Tax Consequences

Holders of the Securities should not have a taxable event as a result of the adoption of the Amendments, the issuance of the Guarantees or, in the case of the High-Yield Notes, receipt of the applicable Consent Payments. For a further discussion of the tax consequences of the Amendments, the Guarantees, and in the case of the High-Yield Notes, the Consent Payments, please see “Material U.S. Federal Income Tax Consequences.”

 

Solicitation Agent

IMC and PLP have retained Goldman, Sachs & Co. to act as Solicitation Agent in connection with the consent solicitation. Questions concerning the terms of the consent solicitation may be directed to the Solicitation Agent at its address and telephone number set forth on the back cover page of this prospectus. Please do not deliver your consents to the Solicitation Agent.

 

Information Agent

IMC and PLP have retained Bondholder Communications Group to act as Information Agent in connection with the consent solicitation. Any questions or requests for assistance or for additional copies of this prospectus, the accompanying letter of consent or related documents may be directed to the Information Agent at its address and telephone number set forth on the back cover page of this prospectus. Please deliver executed letters of consent to the Information Agent in accordance with the instructions set forth in “Description of the Consent Solicitation—Consent Procedures.”

 

Risk Factors

 

Please read the section entitled “Risk Factors” for a discussion of certain risks associated with the Securities.

 

Description of the Guarantees

 

Please see “Description of the Guarantees” for a description of the terms of the Guarantees. If the Guarantees are issued, the Affiliate Guarantors will not be subject to the restrictive covenants in the Indentures, other than the terms of their respective Guarantees. No matter the outcome of the consent solicitation, the High-Yield Notes will continue to be guaranteed by substantially the same subsidiaries of IMC that currently guarantee the High-Yield Notes.

 

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Index to Financial Statements

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

OF THE CARGILL FERTILIZER BUSINESSES

 

The following historical financial information with respect to the Cargill Fertilizer Businesses is provided to assist you in your consideration of the consent solicitation and the related offer of the Guarantees. The historical financial information is derived from the audited consolidated financial statements of the Cargill Fertilizer Businesses as of May 31, 2004 and 2003 and for each of the years in the three-year period ended May 31, 2004, and from the unaudited consolidated financial statements of the Cargill Fertilizer Businesses as of and for the three months ended August 31, 2004 and 2003, and as of May 31, 2002, 2001 and 2000 and for each of the years in the two-year period ended May 31, 2001.

 

The following table summarizes selected historical consolidated financial data of the Cargill Fertilizer Businesses. Please read this information in conjunction with the consolidated financial statements of the Cargill Fertilizer Businesses and the notes thereto contained in this prospectus and the section of this prospectus entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Cargill Fertilizer Businesses.” The historical results included below and elsewhere in this document are not indicative of the future performance of the Cargill Fertilizer Businesses or Mosaic.

    As of and for
the Three Months
Ended August 31,


    As of and for the Year Ended May 31,

 
    2004

    2003

    2004

    2003

    2002

    2001 (a)

    2000

 
    (in millions, except per share data)  

Statements of Operations Data:

                                                       

Net sales

  $ 724.7     $ 547.4     $ 2,374.0     $ 1,662.7     $ 1,508.9     $ 1,518.2     $ 1,419.7  

Cost of goods sold

    649.3       513.5       2,191.9       1,525.5       1,335.8       1,436.2       1,235.5  
   


 


 


 


 


 


 


Gross profit

    75.4       33.9       182.1       137.2       173.1       82.0       184.2  

Selling, general and administrative expenses

    31.0       21.9       100.1       87.7       95.8       82.3       80.8  

(Gain) loss on sale of assets

    .2       (.2 )     .7       (0.9 )     3.6       1.1       —    

Impairment charge

    —         —         —         —         —         14.1       —    

Other operating income

    (6.0 )     —         —         —         —         —         —    
   


 


 


 


 


 


 


Operating earnings (loss)

    50.2       12.2       81.3       50.4       73.7       (15.5 )     103.4  

Interest expense

    7.6       8.3       29.2       41.2       42.8       46.7       39.7  

Other (income) expense, net

    1.3       (.9 )     7.5       2.2       7.5       1.3       7.9  
   


 


 


 


 


 


 


Earnings (loss) from continuing operations before income taxes

    41.3       4.8       44.6       7.0       23.4       (63.5 )     55.8  

Income taxes expense (benefit)

    11.2       .8       3.8       (3.9 )     (1.4 )     (18.4 )     (51.6 )
   


 


 


 


 


 


 


Earnings (loss) from continuing operations

    30.1       4.0       40.8       10.9       24.8       (45.1 )     107.4  

Equity in net earnings of nonconsolidated companies

    14.5       5.0       35.8       25.7       8.2       8.0       14.1  

Minority interest

    (1.2 )     (.8 )     (1.4 )     2.5       .2       .1       (3.4 )

Discontinued operations

    —         —         —         .5       2.0       3.2       1.5  
   


 


 


 


 


 


 


Net earnings (loss)

  $ 43.4     $ 8.2     $ 75.2     $ 39.6     $ 35.2     $ (33.8 )   $ 119.6  
   


 


 


 


 


 


 


Balance Sheet Data (at period end):

                                                       

Cash and cash equivalents

  $ 22.8     $ 14.9     $ 10.1     $ 7.8     $ 9.0     $ 7.6     $ 33.4  

Total assets

    2,017.2       1,674.6       1,856.0       1,599.2       1,403.9       1,407.3       1,244.5  

Total debt (including current maturities)

    41.1       58.3       42.4       57.5       64.9       81.5       55.3  

Total liabilities

    1,117.5       1,015.5       1,015.3       945.2       873.6       859.2       683.4  

Total stockholder’s equity

    890.5       658.0       833.0       649.5       523.9       538.6       556.0  

Other Financial Data:

                                                       

Depreciation and amortization

    23.1       22.6       104.6       87.9       77.9       74.9       72.3  

Capital expenditures

    38.9       18.8       162.1       119.4       89.3       87.2       104.5  

Net earnings (loss) from continuing operations per common share (b)

    N/A       N/A       N/A       N/A       N/A       N/A       N/A  

Cash dividends per common share (b)

    N/A       N/A       N/A       N/A       N/A       N/A       N/A  

Book value per share (end of period) (b)

    N/A       N/A       N/A       N/A       N/A       N/A       N/A  

(a) Operating results from continuing operations include an impairment charge of $14.1 million relating to an investment in Lifosa.
(b) Historical per share data for the Cargill Fertilizer Businesses is not applicable because the businesses consist of multiple entities and business divisions or operating units of Mosaic (which were previously multiple entities and business divisions or operating units of Cargill).

 

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Index to Financial Statements

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF IMC

 

The following historical financial information with respect to IMC is provided to assist you in your consideration of the consent solicitation and the related offer of the Guarantees. The annual historical financial information is derived from the audited consolidated financial statements of IMC as of and for each of the years ended December 31, 1999 through 2003. The interim results set forth below as of and for the nine months ended September 30, 2003 and 2004 are derived from IMC’s unaudited consolidated financial statements. The unaudited consolidated financial statements include all adjustments, consisting only of normal accruals, which IMC considers necessary for a fair presentation of the financial position and results of operations for these periods.

 

The following table summarizes selected historical consolidated financial data of IMC. Please read this information in conjunction with IMC’s audited consolidated financial statements and notes thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” which are part of IMC’s Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A, for the year ended December 31, 2003, which is incorporated into this document by reference, as well as other information that IMC has filed with the SEC. The historical results included below and elsewhere in this document are not indicative of the future performance of IMC or Mosaic.

 

   

As of and for the

Nine Months
Ended
September 30,


    As of and for the Year Ended December 31,

 
    2004

    2003 (a)

    2003 (b)

    2002 (c)

    2001 (d)

    2000 (e)

    1999 (f)

 
    (in millions, except per share data)  

Statement of Operations Data:

                                                       

Net sales

  $ 1,945.2     $ 1,586.5     $ 2,190.6     $ 2,057.4     $ 1,958.7     $ 2,095.9     $ 2,282.9  

Cost of goods sold

    1,747.3       1,462.0       2,004.0       1,794.3       1,768.7       1,767.2       1,843.5  
   


 


 


 


 


 


 


Gross margin

    197.9       124.5       186.6       263.1       190.0       328.7       439.4  

Selling, general and administrative expenses

    54.5       61.7       79.6       80.7       81.8       102.7       127.8  

Gain on sale of operating assets

    —         (16.5 )     (31.3 )     —         —         —         —    

Goodwill write-down

    —         —         —         —         —         —         432.0  

Restructuring activity

    —         6.4       11.9       2.0       12.5       (1.2 )     163.3  
   


 


 


 


 


 


 


Operating earnings (loss)

    143.4       72.9       126.4       180.4       95.7       227.2       (283.7 )

Interest expense

    142.3       138.8       185.7       174.2       152.3       112.6       111.4  

Foreign currency transaction (gain) loss

    14.6       49.0       66.7       (0.7 )     (4.3 )     (7.2 )     4.4  

Gain on sale of securities

    (9.4 )     (35.5 )     (47.9 )     —         —         —         —    

Debt refinancing (income) expense

    —         28.1       28.1       0.9       21.7       —         (0.9 )

Other (income) expense, net

    16.4       (3.2 )     1.6       6.2       19.1       3.1       (8.6 )
   


 


 


 


 


 


 


Earnings (loss) from continuing operations before minority interest

    (20.5 )     (104.3 )     (107.8 )     (0.2 )     (93.1 )     118.7       (390.0 )

Minority interest

    (37.0 )     (30.3 )     (33.7 )     (16.2 )     (40.7 )     (12.4 )     (0.1 )
   


 


 


 


 


 


 


Earnings (loss) from continuing operations before income taxes

    16.5       (74.0 )     (74.1 )     16.0       (52.4 )     131.1       (389.9 )

Provision (benefit) for income taxes

    29.0       (36.3 )     (36.5 )     29.8       (10.4 )     46.8       141.7  
   


 


 


 


 


 


 


Earnings (loss) from continuing operations

    (12.5 )     (37.7 )     (37.6 )     (13.8 )     (42.0 )     84.3       (531.6 )

Loss from discontinued operations

    (2.4 )     (29.0 )     (92.9 )     (96.4 )     —         (429.3 )     (234.2 )

Cumulative effect of a change in accounting principle (g)

    —         (4.9 )     (4.9 )     —         (24.5 )     —         (7.5 )
   


 


 


 


 


 


 


Net loss

  $ (14.9 )   $ (71.6 )   $ (135.4 )   $ (110.2 )   $ (66.5 )   $ (345.0 )   $ (773.3 )
   


 


 


 


 


 


 


Diluted loss per common share:

                                                       

Earnings (loss) from continuing operations

  $ (0.18 )   $ (0.35 )   $ (0.37 )   $ (0.13 )   $ (0.36 )   $ 0.73     $ (4.64 )

Loss from discontinued operations

    (0.02 )     (0.25 )     (0.81 )     (0.84 )     —         (3.73 )     (2.04 )

Cumulative effect of a change in accounting principle (g)

    —         (0.04 )     (0.04 )     —         (0.21 )     —         (0.07 )
   


 


 


 


 


 


 


Net loss per share

  $ (0.20 )   $ (0.64 )   $ (1.22 )   $ (0.97 )   $ (0.57 )   $ (3.00 )   $ (6.75 )
   


 


 


 


 


 


 


Balance Sheet Data (at period end):

                                                       

Cash and cash equivalents

  $ 62.5     $ 56.0     $ 76.8     $ 17.7     $ 248.7     $ 84.5     $ 80.8  

Total assets

    3,681.3       3,747.8       3,761.5       3,711.0       4,327.9       4,446.3       5,293.3  

Total debt (including current maturities)

    2,093.4       2,129.7       2,116.8       2,271.5       2,291.5       2,360.6       2,548.6  

Total liabilities

    3,156.3       3,198.9       3,234.9       3,319.3       3,787.2       3,770.9       4,213.2  

Total stockholders’ equity

    525.0       548.9       526.6       391.7       540.7       675.4       1,080.1  

Other Financial Data:

                                                       

Dividends declared per common share

  $ —       $ 0.06     $ 0.06     $ 0.08     $ 0.08     $ 0.32     $ 0.32  

Depreciation, depletion and amortization from continuing operations

    132.4       127.1       171.9       165.3       157.2       166.2       175.3  

Capital expenditures

    90.8       82.0       120.3       140.0       123.1       118.1       248.4  

Book value per share (end of period)

    4.51       4.77       4.59       3.42       4.72       5.88       9.43  

 

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Index to Financial Statements

(a) Operating results from continuing operations include charges of $6.4 million, $4.0 million after tax and minority interest, or $0.03 per share, primarily as a result of an organizational restructuring program.
(b) Operating results from continuing operations include restructuring charges of $11.9 million, $7.1 million after tax and minority interest, or $0.05 per share, as well as gains on the sale of assets of $79.2 million, $68.8 million after tax and minority interest, or $0.59 per share.
(c) Operating results from continuing operations include restructuring charges of $2.0 million, $1.1 million after-tax and minority interest, or $0.01 per share.
(d) Operating results from continuing operations include special items of $18.9 million, $16.4 million after tax and minority interest, or $0.14 per share, primarily related to increased accruals for environmental liabilities and prior year income taxes, the Reorganization Plan and a non-cash gain resulting from marking to market a common equity forward purchase contract (as described in IMC’s Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A, for the year ended December 31, 2003).
(e) Operating results from continuing operations include a restructuring gain of $1.2 million, $0.6 million after tax and minority interest.
(f) Operating results from continuing operations include special charges of $651.7 million, $677.7 million after tax and minority interest, or $5.91 per share, related to the Rightsizing Program (as described in IMC’s Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A, for the year ended December 31, 2003), additional asset write-offs and environmental accruals, a goodwill write-down as well as a change in tax law.
(g) On January 1, 2003, IMC adopted Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, which required legal obligations associated with the retirement of long-lived assets to be recognized at their fair value at the time that the obligations are incurred. On June 30, 2001, IMC adopted Emerging Issues Task Force No. 00-19, Derivative Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, which required IMC to account for its common equity forward purchase contract as an asset or a liability, with changes in the value reflected in the consolidated statement of operations. On January 1, 1999, IMC adopted Statement of Position 98-5, Reporting on the Costs of Start-Up Activities, which mandated that costs related to start-up activities be expensed as incurred. At the time of adoption of each of these pronouncements, IMC recognized a cumulative effect of a change in accounting principle.

 

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Table of Contents
Index to Financial Statements

 

SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATA OF MOSAIC

 

To assist you in your consideration of the consent solicitation and the related offer of the Guarantees, Mosaic has prepared unaudited pro forma combined condensed financial statements that combine the historical consolidated balance sheets and statements of operations of the Cargill Fertilizer Businesses and IMC, giving effect to the Cargill transactions using the purchase method of accounting.

 

The unaudited pro forma combined condensed financial statements and related notes thereto are included in “Unaudited Pro Forma Combined Condensed Financial Data.”

 

The following selected unaudited pro forma combined financial data summarizes selected information from such unaudited pro forma combined condensed financial statements and has been derived from, and please read it together with, the “Unaudited Pro Forma Combined Condensed Financial Data” and related notes thereto and the historical financial statements and related notes of IMC and the Cargill Fertilizer Businesses included or incorporated by reference in this document.

 

The unaudited pro forma combined condensed statement of operations data assumes the Cargill transactions were effected on June 1, 2003. The unaudited pro forma combined condensed balance sheet data gives effect to the Cargill transactions as if they had occurred on August 31, 2004.

 

This unaudited pro forma combined condensed financial information is provided for illustrative purposes only. This unaudited pro forma combined condensed financial data is not necessarily indicative of the results of operations or financial position that would have been achieved if the businesses had been combined during the periods presented, or the results of operations or financial position that Mosaic will experience now that the Cargill transactions are completed.

 

     Three Months Ended
August 31, 2004


   Year Ended
May 31, 2004


     (in millions, except per share data)

Statement of Operations Data:

             

Net sales

   $ 1,508.1    $ 4,710.9

Gross margin

   $ 199.5    $ 400.0

Operating income

   $ 134.9    $ 209.9

Equity in net earnings of nonconsolidated companies

   $ 14.6    $ 36.1

Net earnings from continuing operations

   $ 82.0    $ 69.9

Other Financial Data:

             

Depreciation, depletion and amortization from continuing operations

   $ 68.7    $ 270.1

Per Share Data:

             

Per common share basic:

             

Net earnings (loss) from continuing operations

   $ 0.21    $ 0.17

Per common share diluted:

             

Net earnings (loss) from continuing operations

   $ 0.19    $ 0.16

Cash dividends per common share

   $ 0.00    $ 0.01

Book value per common share (end of period)

   $ 8.18      N/A

Average common shares outstanding:

             

Basic

     373.2      372.9

Diluted

     427.5      426.8
    

At August 31,

2004


     (in millions)

Balance Sheet Data:

             

Total assets

     $7,460.1

Working capital

     $   536.2

Long-term debt (excluding current portion)

     $2,386.6

Total stockholders’ equity

     $3,053.1

 

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Index to Financial Statements

 

RATIOS OF EARNINGS TO FIXED CHARGES

 

IMC

 

The following table sets forth IMC’s ratio of earnings to fixed charges on a historical basis for the periods indicated. Earnings include pre-tax earnings from continuing operations but before fixed charges. Fixed charges consist of interest on indebtedness, interest capitalized as part of fixed assets, amortization of debt expense and rent expense which is deemed representative of an interest factor.

 

    

For the

Nine Months

Ended September 30,


    For the Year Ended December 31,

 
     2004

    2003

    2003

    2002

    2001

    2000

    1999

 

Ratio of earnings to fixed charges (a)

   0.9 x   0.3 x   0.5 x   1.0 x   0.4 x   2.0 x   (2.2) x

(a) IMC’s earnings were insufficient to cover fixed charges by $20.5 million and $104.3 million for the nine months ended September 30, 2004 and 2003, respectively, and $107.8 million, $93.1 million and $390.0 million for the years ended December 31, 2003, 2001 and 1999, respectively.

 

The Cargill Fertilizer Businesses

 

The following table sets forth the Cargill Fertilizer Businesses’ ratio of earnings to fixed charges on a historical basis for the periods indicated.

 

     For the
Three Months
Ended August 31,


    For the Year Ended May 31,

 
     2004

    2003

    2004

    2003

    2002

    2001

    2000

 

Ratio of earnings to fixed charges (a)

   6.9 x   2.1 x   3.2 x   1.4 x   1.5 x   (0.2) x   2.4 x

(a) The Cargill Fertilizer Businesses’ earnings were insufficient to cover fixed charges by $61.5 million for the year ended May 31, 2001.

 

Mosaic

 

On a pro forma combined basis, giving effect to the Cargill transactions as if they were effected on June 1, 2003, Mosaic’s ratio of earnings to fixed charges would have been 1.2x and 3.5x for the year ended May 31, 2004 and the three months ended August 31, 2004, respectively.

 

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RISK FACTORS

 

Please carefully consider the following information about the risks associated with the Securities, as they will be amended if the consent solicitation is successful, in addition to the other information contained in or incorporated by reference into this prospectus. A number of the risk factors listed below will be applicable to holders of the Securities whether or not the consent solicitation is successful, including those under the captions “Risks Related to the Cargill Transactions” and “Risks Related to the Combined Businesses of Mosaic.”

 

Risks Related to the Consent Solicitation and the Guarantees

 

The Affiliate Guarantors will not be subject to the covenants in the Indentures, other than the terms of the Guarantees.

 

The Affiliate Guarantors will not be subject to the covenants of the Indentures (including the High-Yield Indentures) other than the terms of their respective Guarantees. As such, the Indentures place no restrictions on the amount of additional debt (secured or unsecured) that an Affiliate Guarantor may incur or its ability to sell, encumber or dispose of assets, pay dividends, make other distributions or enter into transactions with its affiliates (including contributing assets or paying dividends to, or encumbering assets for the benefit of, affiliates of Mosaic which may not be Affiliate Guarantors). Any material sale, encumbrance or transfer of assets or incurrence of debt could have a material adverse effect on the ability of the Affiliate Guarantors to make payments in respect of the Guarantees.

 

The proposed Amendments would permit IMC and its subsidiaries to transfer their assets to Mosaic and its other subsidiaries under certain conditions, where they will no longer be subject to the covenants of the Indentures (including the High-Yield Indentures).

 

If the proposed Amendments are adopted, IMC will be permitted to take actions which would otherwise have been restricted by the Indentures. Included in the Amendments are provisions that allow IMC to contribute the assets that comprise IMC’s phosphate business to a combined phosphates business with assets of the Cargill Fertilizer Businesses, provided IMC receives fair value consideration in exchange for those assets and certain other conditions are met. As of September 30, 2004, IMC’s phosphate business accounted for approximately 54% of the total assets of IMC and its subsidiaries. In addition to easing other restrictions and conditions with respect to transactions between IMC and Mosaic, the Amendments will permit IMC to make certain payments and loans to Mosaic and its subsidiaries, which otherwise would have been subject to additional restrictions under the High-Yield Indentures. Since Mosaic and its subsidiaries (including the Affiliate Guarantors) are not restricted by the covenants of the Indentures, IMC assets transferred or contributed to Mosaic and its subsidiaries will no longer be subject to the restrictive covenants of the Indentures (including the High-Yield Indentures). Mosaic and its subsidiaries (including the Affiliate Guarantors) would therefore be free to sell or otherwise dispose of or encumber the assets contributed by IMC, thereby potentially reducing the credit base of assets which may otherwise have been available to holders of the Securities. Please see “Description of the Consent Solicitation—Description of the Proposed Amendments—Proposed Amendments to High-Yield Notes” for a summary of the proposed Amendments to the High-Yield Notes, as well as the description of the High-Yield Notes, as amended by the proposed Amendments, in “Description of the Amended Securities—Description of High-Yield Notes.”

 

Not all of Mosaic’s subsidiaries will guarantee the Securities and the assets of the non-guarantor subsidiaries may not be available to Mosaic for payment on its Guarantee.

 

Not all of Mosaic’s subsidiaries will guarantee the Securities. Non-guarantor subsidiaries of Mosaic have no obligations to make payments to Mosaic in respect of its Guarantee of the Securities.

 

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In the event of a bankruptcy, liquidation or reorganization of any non-guarantor subsidiary of Mosaic, the creditors of such subsidiary (including trade creditors) will generally be entitled to payment of their claims from the assets of such subsidiary before any assets are made available for distribution to Mosaic as a stockholder. After paying its own creditors, a non-guarantor subsidiary of Mosaic may not have any remaining assets available for payment to Mosaic and as a result Mosaic may not have enough assets to be able to make payments on its Guarantee. As a result, the Guarantee of Mosaic is effectively junior in right of payment to the obligations of its non-guarantor subsidiaries. At August 31, 2004, the indebtedness (excluding trade payables) of the Cargill Fertilizer Businesses’ non-guarantor entities owed to third parties was approximately $27.3 million. In addition, Mosaic and its subsidiaries will not be subject to the restrictive covenants of the Indentures and will therefore be free to incur additional indebtedness, sell or encumber assets and pay dividends.

 

If the Amendments are adopted, certain events relating to Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition or the Guarantees will result in immediate acceleration of the High-Yield Notes or give holders of the High-Yield Notes a right to accelerate at a time when holders of the Other IMC Securities and the PLP Notes do not have such a right.

 

The Amendments with respect to the High-Yield Notes provide that certain events of bankruptcy of Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective significant subsidiaries, including any of the significant subsidiaries that would be Phosphates Entities (as defined in “Description of the Amended Securities—Description of High-Yield Notes—Certain Definitions”), will be events of default under the High-Yield Notes, with such notes becoming immediately due and payable. The Other IMC Securities and the PLP Notes will not default or automatically accelerate in such circumstances, though certain of these notes do have provisions providing for events of default in the event that IMC or PLP, as the case may be, are in default beyond the applicable cure periods on certain of their respective other indebtedness and such default results in the acceleration of that other indebtedness. In addition, the Amendments provide that the failure of the Guarantee of Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective significant subsidiaries that may become Affiliate Guarantors to be in full force and effect will be an event of default under the High-Yield Notes, while such failure would not constitute a default under the Other IMC Securities or the PLP Notes. Please also see “Description of the Guarantees.”

 

Federal and state statutes allow courts, under specific circumstances, to void the Guarantees.

 

The Guarantees may be subject to review under Title 11 of the United States Code, referred to as the Bankruptcy Code, and comparable provisions of state fraudulent conveyance laws if a bankruptcy or reorganization case or lawsuit is commenced by or on behalf of the unpaid creditors of the Affiliate Guarantors. Under the Bankruptcy Code, a court could void the obligations under the Guarantees, subordinate the Guarantees to the Affiliate Guarantors’ respective other obligations or take other action detrimental to the holders of the Securities. If a court were to find in such a bankruptcy or reorganization case or lawsuit that, among other things, at the time either of the Affiliate Guarantors issued its respective Guarantee:

 

  Ÿ   it issued the Guarantee to delay, hinder or defraud present or future creditors; or

 

  Ÿ   it received less than reasonably equivalent value or fair consideration for issuing the Guarantee and at the time it issued the Guarantee:

 

  -   it was insolvent or rendered insolvent by reason of issuing the Guarantee,

 

  -   it was engaged, or about to engage, in a business or transaction for which its assets, after giving effect to its potential liability under the Guarantee, constituted unreasonably small capital to carry on its business, or

 

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  -   it intended to incur, or believed that it would incur, debts beyond its ability to pay as they mature;

 

then the court could void the obligations under its Guarantee, subordinate the Guarantee to the Affiliate Guarantors’ respective other obligations or take other action detrimental to you as a holder of a Guarantee.

 

The measures of insolvency for purposes of fraudulent transfers laws vary depending upon the law of the jurisdiction that is being applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, an entity would be considered insolvent if, at the time it incurred the debt:

 

  Ÿ   the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

 

  Ÿ   it could not pay its debts as they become due.

 

It is not certain the standard a court would use to determine whether the Affiliate Guarantors were solvent at the relevant time, or, regardless of the standard the court uses, that the issuance of the Guarantees would not be voided or the Guarantees would not be subordinated to the Affiliate Guarantors’ respective other debt. If such a case were to occur, the Guarantee could also be subject to the claim that, since the Guarantee was incurred for IMC’s and PLP’s benefit, and only indirectly for the benefit of the applicable Affiliate Guarantor, the Guarantee was incurred for less than fair consideration.

 

Risks Related to the Cargill Transactions

 

The anticipated operational cost savings resulting from combining IMC’s business with the Cargill Fertilizer Businesses may not be realized, which could adversely affect Mosaic’s and IMC’s operating results.

 

IMC and Cargill estimate that the Cargill transactions will result in Mosaic realizing operational cost savings of approximately $145 million on an annualized, pre-tax basis by the end of the third year following completion of the Cargill transactions, assuming Mosaic incurs costs of approximately $125 million to implement these operational cost savings. These operational cost savings estimates are based on a number of assumptions, which may prove invalid, including that Mosaic will be able to implement cost saving programs, such as personnel reductions, consolidation of mining, manufacturing, purchasing, transportation and logistics activities and elimination of duplicative overhead costs. In addition, the operational cost savings assume that the integration of the operations of IMC and the Cargill Fertilizer Businesses will be successful. However, it is possible that the anticipated cost savings will not be realized within the time periods contemplated or even that they will not be realized at all. Failure to successfully implement cost saving programs or to successfully integrate the operations of IMC and the Cargill Fertilizer Businesses on a timely basis will result in lower than expected cost savings in connection with the Cargill transactions and could have a material adverse effect on the operating results of Mosaic and IMC.

 

The integration of IMC and the Cargill Fertilizer Businesses following the Cargill transactions may be difficult and costly, which may result in Mosaic and IMC not operating as effectively as expected or in a failure to achieve the anticipated benefits of the Cargill transactions.

 

The success of the Cargill transactions will depend, in part, on the ability of Mosaic to successfully integrate the businesses of IMC and the Cargill Fertilizer Businesses and, as a result,

 

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realize anticipated synergies and cost savings. Following completion of the Cargill transactions, Mosaic may face difficulties, added costs and delays in integrating the business of IMC and the Cargill Fertilizer Businesses, including:

 

  Ÿ   managing customer overlap and potential pricing conflicts;

 

  Ÿ   perceived adverse changes in product offerings available to customers or customer service standards, whether or not these changes do, in fact, occur;

 

  Ÿ   costs and delays in implementing common systems and procedures, and costs and delays caused by communication difficulties;

 

  Ÿ   diversion of management resources from the business of the combined company;

 

  Ÿ   potential incompatibility of business cultures and philosophies; and

 

  Ÿ   retaining and integrating management and other key employees of the combined company.

 

Any one or all of these factors, or currently unanticipated factors, may cause increased operating costs, worse than anticipated financial performance or the loss of customers and employees. The failure to timely and efficiently integrate the business of IMC and the Cargill Fertilizer Businesses could have a material adverse effect on the business, financial condition and operating results of Mosaic and IMC.

 

The anticipated cost savings from the Cargill transactions may not offset the significant transaction and integration costs that have been and will be incurred in connection with the Cargill transactions, which may result in Mosaic and IMC failing to achieve the anticipated benefits of the Cargill transactions.

 

IMC and the Cargill Fertilizer Businesses expect to incur fees and other expenses related to the Cargill transactions of approximately $100 million, including investment banking fees, legal and accounting fees, filing fees, proxy soliciting fees, regulatory fees and severance and employee benefit expenses. In addition, IMC and the Cargill Fertilizer Businesses expect to incur significant costs associated with combining IMC’s business with the Cargill Fertilizer Businesses. However, it is difficult to predict the specific amount of those costs before the integration process begins. Cost savings may not offset these costs.

 

The Cargill transactions are subject to review under the antitrust laws of a number of jurisdictions which could result, even after the completion of the Cargill transactions, in the imposition of conditions that could have a material adverse effect on Mosaic.

 

Post-closing antitrust review of the Cargill transactions remains pending in Brazil. Closing of the Cargill transactions was permitted to occur despite the ongoing Brazilian review. It is possible that, among other things, restrictions on the combined operations of Mosaic, including divestitures, may be sought by the Brazilian authorities as part of its antitrust review after completion of the Cargill transactions. Acceptance or imposition of any such divestiture requests or other restrictions on operations could diminish the benefits of the Cargill transactions and result in additional transaction costs, loss of revenue or other effects associated with restrictions on business operations.

 

In addition, at any time after completion of the Cargill transactions, the Antitrust Division of the U.S. Department of Justice, referred to as the Antitrust Division, or the U.S. Federal Trade Commission, referred to as the FTC, or any state could take any action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to rescind the Cargill transactions. Private parties also may seek to take legal action under the antitrust laws under certain circumstances. Also, the Canadian Commissioner of Competition has the ability to initiate proceedings

 

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before the Competition Tribunal for up to three years after closing of the Cargill transactions. A challenge to the Cargill transactions on antitrust grounds may be made by any of these persons and, if such a challenge is made, it is possible that Mosaic will not prevail.

 

Uncertainties associated with the Cargill transactions may result in a loss of customers, which would negatively impact Mosaic’s and IMC’s operating results.

 

Some customers of IMC or the Cargill Fertilizer Businesses may seek alternative sources of products and/or services after the announcement of the Cargill transactions due to, among other reasons, a desire not to do business with Mosaic or perceived concerns that Mosaic may not continue to support and develop certain product lines. Difficulties in combining operations also could result in potential disputes or litigation with customers or others. Failure by management of Mosaic to control attrition could have a material adverse effect on Mosaic’s business, financial condition and operating results after the completion of the Cargill transactions.

 

Mosaic’s and IMC’s success will depend on key personnel, the loss of whom could harm their businesses.

 

The success of Mosaic and IMC after the completion of the Cargill transactions will depend in part on the retention of personnel critical to the business and operations of Mosaic. In particular, the sales and distribution personnel of each of Cargill and IMC, given their historical knowledge of their respective businesses, and the fact that each company has different distribution models, will be important to the success of the combined businesses. Mosaic has not agreed to enter into employment agreements with key employees of IMC and Cargill that will be effective upon completion of the Cargill transactions. Key employees may depart because of issues relating to uncertainty and difficulty of integration or a desire not to remain with Mosaic. Accordingly, Mosaic and IMC may be unable to retain IMC or Cargill personnel that are critical to their success, resulting in disruption of operations, loss of key information, expertise or know-how, unanticipated additional recruitment and training costs and otherwise diminishing the anticipated benefits of the Cargill transactions, all of which could adversely affect Mosaic’s and IMC’s ability to conduct their businesses efficiently and effectively. Mosaic does not anticipate obtaining key person insurance covering the loss of all key employees as a means to mitigate any such loss.

 

Cargill’s status as a significant Mosaic stockholder and its representation on the Mosaic board of directors may create conflicts of interest with Mosaic’s other stockholders and holders of the Securities and could cause Mosaic to take actions that Mosaic’s other stockholders or holders of the Securities do not support.

 

Cargill and its affiliates own 66.5% of the outstanding shares of Mosaic common stock. In addition, seven Cargill nominees are members of the 11-member Mosaic board of directors. Accordingly, Cargill effectively controls the strategic direction and significant corporate transactions of Mosaic and the other Affiliate Guarantors, and its interests in these matters may conflict with other stockholders of Mosaic or holders of the Securities. As a result, Cargill could cause Mosaic to take actions that other Mosaic stockholders or holders of the Securities do not support. In addition, Cargill may pursue transactions (including, without limitation, causing the Affiliate Guarantors to sell or dispose of assets or to incur debt) or make other business decisions that in Cargill’s judgment enhance the value of its equity investment in Mosaic but may involve risks to the holders of the Securities.

 

Cargill’s significant ownership interest in Mosaic and Mosaic’s classified board of directors and other anti-takeover provisions could deter an acquisition proposal for Mosaic that securityholders may consider favorable.

 

As the owner of a majority of the shares of Mosaic common stock, a third party will not be able to acquire control of Mosaic without Cargill’s consent because Cargill could vote its shares of Mosaic

 

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common stock against any takeover proposal submitted for stockholder approval. In addition, Mosaic has a classified board of directors and other takeover defenses in its certificate of incorporation and bylaws. Cargill’s ownership interest in Mosaic and these other anti-takeover provisions could discourage potential acquisition proposals for Mosaic and could delay or prevent a change of control of Mosaic. These deterrents could make it very difficult for non-Cargill holders to remove or replace members of the board of directors or management of Mosaic, which could be detrimental to Mosaic’s other stockholders and holders of the Securities.

 

Mosaic’s stockholders and the holders of the Securities may be adversely affected by the expiration of the standstill and transfer restrictions in the investor rights agreement, which would enable Cargill to, among other things, transfer all or a significant percentage of its Mosaic common stock to a third party, increase its ownership percentage of the Mosaic common stock above 66.5% or seek additional representation on the Mosaic board of directors, any of which could have an impact on the price of Mosaic common stock, which could result in volatility in the trading price of the Securities.

 

The standstill provision in the investor rights agreement, described in “The Cargill Transactions—Investor Rights Agreement Between Mosaic and Cargill,” restricts Cargill and its affiliates from acquiring additional shares of Mosaic common stock from Mosaic’s public stockholders and taking other specified actions as a stockholder of Mosaic. These restrictions will expire on the fourth anniversary of the completion date of the Cargill transactions. Following the expiration of the standstill period, Cargill will be free to increase its ownership interest in Mosaic common stock. Purchases of additional shares of Mosaic common stock by Cargill could result in lower trading volumes for Mosaic common stock and make it difficult for Mosaic stockholders to sell shares of Mosaic common stock. A substantial decline in the price of Mosaic common stock could result in volatility in the trading price of the Securities.

 

In addition, the investor rights agreement prohibits Cargill from transferring or selling its shares of Mosaic common stock, other than to an affiliate of Cargill, for three years following the completion of the Cargill transactions. Once this transfer restriction is terminated, Cargill will be permitted to sell its shares of Mosaic common stock. Cargill’s sale or transfer of a significant number of shares of Mosaic common stock could create a decline in the price of shares of Mosaic common stock. Furthermore, if Cargill’s sales or transfers were made to a single buyer or group of buyers, it could result in a third party acquiring effective control of Mosaic.

 

Until the end of the standstill period, the investor rights agreement also requires that Cargill vote its shares of Mosaic common stock for the slate of director nominees recommended by the Mosaic board of directors, and that Cargill cause its nominees on the Mosaic board of directors to recommend the four directors designated by IMC. After the standstill period, Cargill will be free to seek to increase its representation on the Mosaic board of directors above seven members. This action could further increase Cargill’s control over Mosaic and deter or delay an acquisition of Mosaic thereby having a negative impact on the price of shares of Mosaic common stock.

 

Risks Related to the Combined Businesses of Mosaic

 

Mosaic’s operating results are highly dependent upon and fluctuate based upon conditions in agriculture and international markets which will be outside of Mosaic’s control, which may limit Mosaic’s ability to meet its projected operating results.

 

Mosaic’s operating results are highly dependent upon conditions in the agricultural industry, which Mosaic cannot control. The agricultural products business can be affected by a number of factors, the most important of which, for U.S. markets, are weather patterns and field conditions

 

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(particularly during periods of traditionally high crop nutrients consumption), quantities of crop nutrients imported to and exported from North America and current and projected grain inventories and prices, which are heavily influenced by U.S. exports and world-wide grain markets. U.S. governmental policies may directly or indirectly influence the number of acres planted, the level of grain inventories, the mix of crops planted or crop prices.

 

International market conditions, which are also outside of Mosaic’s control, may also significantly influence Mosaic’s operating results. The international market for crop nutrients is influenced by such factors as the relative value of the U.S. dollar and its impact upon the cost of importing crop nutrients, foreign agricultural policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign markets, changes in the hard currency demands of certain countries, such as those countries that were part of the former Soviet Union, and other regulatory policies of foreign governments, as well as the laws and policies of the U.S. affecting foreign trade and investment. In addition, since crop nutrients, particularly anhydrous ammonia, are used for industrial applications, industrial markets and the general economy affect crop nutrients demand and prices.

 

Mosaic’s crop nutrients and other products may be subject to price volatility resulting from periodic imbalances of supply and demand, which may cause its results of operations to fluctuate.

 

Historically, prices for phosphate have reflected frequent changes in supply and demand. To a lesser degree, there is also volatility in the price of potash. As a result, crop nutrients prices have been volatile. This price volatility may cause Mosaic’s results of operations to fluctuate and potentially deteriorate. The price at which Mosaic sells its phosphate crop nutrients products could fall in the event of industry oversupply conditions.

 

Due to reduced market demand and the depressed agricultural economy, IMC has at various times suspended production at some of its facilities. If industry oversupply conditions exist, the price at which Mosaic sells its products could decline, which would have a material adverse effect on its business, financial condition and results of operations. The extent to which Mosaic utilizes available capacity at its facilities will cause fluctuations in its results of operations, as Mosaic will incur costs for any temporary or permanent shutdowns of its facilities.

 

Mosaic is subject to risks associated with its international operations, which could negatively affect its sales to customers in foreign countries as well as the operations and assets of Mosaic in such countries.

 

For the year ended December 31, 2003, IMC derived approximately 42.5% of its net sales from customers located outside of the United States. For the years ended May 31, 2003 and May 31, 2004, the Phosphate Production segment of the Cargill Fertilizer Businesses derived approximately 74.2% and 79.8%, respectively, of its net sales revenue from customers located outside of the United States. As a result, Mosaic is subject to numerous risks and uncertainties relating to international sales and operations, including:

 

  Ÿ   difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;

 

  Ÿ   unexpected changes in regulatory environments;

 

  Ÿ   increased government ownership and regulation of the economy in the markets Mosaic will serve;

 

  Ÿ   political and economic instability, including the possibility for civil unrest;

 

  Ÿ   nationalization of properties by foreign governments;

 

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  Ÿ   tax rates that may exceed those in the United States and earnings that may be subject to withholding requirements;

 

  Ÿ   the imposition of tariffs, exchange controls or other restrictions; and

 

  Ÿ   the impact of currency exchange rate fluctuations between the U.S. dollar and foreign currencies, particularly the Brazilian real, the Canadian dollar and the Argentine peso.

 

The occurrence of any of the events above in the markets where Mosaic operates or in other developing markets could jeopardize or limit Mosaic’s ability to transact business in those markets and could adversely affect Mosaic’s revenues and operating results.

 

Mosaic’s substantial international assets are located in countries with volatile conditions, which could subject Mosaic and its assets to significant risks.

 

Mosaic is a global business with substantial assets located outside of the United States. Mosaic’s operations in Brazil, Argentina, Chile, Canada, China and India are a fundamental part of Mosaic’s business. Volatile economic, political and market conditions in these and other emerging market countries may have a negative impact on Mosaic’s operations and operating results.

 

The Cargill Fertilizer Businesses contributed to Mosaic may not be operated as efficiently or as profitably as when those assets were operated by Cargill prior to the contribution, which may negatively impact Mosaic’s results of operations. Mosaic may also experience difficulty in establishing a separate brand identity from Cargill, which could negatively affect its sales and operating results.

 

Several facilities comprising the Cargill Fertilizer Businesses historically have been operated by Cargill in close proximity to other, non-fertilizer business units of Cargill, particularly in international locations. In some countries the Cargill Fertilizer Businesses shared office space, certain assets, equipment or facilities with the other, non-fertilizer business units of Cargill. In addition, Cargill shared services (e.g., tax, law, treasury, insurance, etc.) provided numerous functional services for or on behalf of the Cargill Fertilizer Businesses around the world. Because the Cargill Fertilizer Businesses have been contributed to Mosaic and no longer have the same relationship with Cargill’s non-fertilizer business units, the Cargill Fertilizer Businesses may not operate as efficiently or as profitably after being contributed to Mosaic as compared to when the Cargill Fertilizer Businesses were operated solely by Cargill. For example, it is possible that one or more international distribution locations operated by the Cargill Fertilizer Businesses prior to the Cargill transactions could be closed because it is uneconomical for Mosaic to conduct business at such location on a stand-alone basis. To facilitate the integration of the Cargill Fertilizer Businesses with IMC’s operations, Cargill entered into an arms-length transition services agreement with Mosaic whereby Cargill will provide many of the same services it provided to the Cargill Fertilizer Businesses for at least 12 months following the completion of the Cargill transactions. Nevertheless, as a result of the historically close relationship between Cargill and the Cargill Fertilizer Businesses, the historical financial information concerning the Cargill Fertilizer Businesses in this prospectus may not be indicative of their future results of operations, financial position or cash flows.

 

In addition, Mosaic’s results of operations will be impacted by its ability to establish its own brand identity and its ability to ensure that its products are recognized in the marketplace. To that end, Cargill has agreed for five years to permit Mosaic to license its brand on a royalty-free basis in conjunction with the sale of fertilizers in certain international jurisdictions where Cargill traditionally has attracted premiums from customers. It will be important for Mosaic management to develop a brand identity for its products and services separate from the Cargill brand during this five-year period. The failure to do so could result in lower sales and negatively affect Mosaic’s revenues and operating results.

 

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Mosaic does not own a controlling equity interest in some of its Brazilian, Canadian or Chinese fertilizer companies, and therefore Mosaic’s operating results may be materially affected by how the governing boards and majority owners operate such businesses. There may also be limitations on monetary distributions from these companies that are outside of Mosaic’s control. Together, these factors may lower Mosaic’s revenues from such businesses and negatively impact its results of operations.

 

The Cargill Fertilizer Businesses contributed to Mosaic hold several ownership interests in fertilizer manufacturing or distribution companies that are not controlled by Mosaic, whether through less than majority representation on the applicable governing board or though a minority equity ownership interest in such entities. For example, in Brazil, Mosaic has an approximate 20% effective ownership interest in Fertilizantes Fosfatados S.A. Fosfertil, Brazil’s largest domestic phosphate fertilizer manufacturer and owner of Ultrafertil S.A., a Brazilian nitrogen fertilizer manufacturer. As these foreign companies are significant to Mosaic, their results of operations will materially affect Mosaic’s operating results. Because Mosaic does not control these companies either at the board or shareholder level and because local laws in foreign jurisdictions may place restrictions on monetary distributions by these companies, Mosaic cannot ensure that these companies will operate efficiently, pay dividends, or generally follow the desires of Mosaic management by virtue of Mosaic’s board or shareholder representation. As a result, these companies may contribute significantly less than currently anticipated to Mosaic’s revenues, negatively impacting Mosaic’s results of operations.

 

A restriction in the supply or a rise in the price levels of natural gas, ammonia and sulfur will have a negative impact on Mosaic’s operating earnings and results of operations.

 

Natural gas, ammonia and sulfur are raw materials used in the manufacture of phosphate crop nutrient products. Natural gas is used as both a chemical feedstock and a fuel to produce anhydrous ammonia, which is a raw material used in the production of diammonium phosphate and monoammonium phosphate. Natural gas is also a significant raw material used in the potash solution mining process. From time to time, a significant rise in the price of natural gas, a major component of production costs, has negatively affected IMC’s and the Cargill Fertilizer Businesses’ gross margins. Mosaic’s profitability will also be impacted by the price and availability of the ammonia and sulfur it purchases from third parties. A significant increase in the price of natural gas, ammonia or sulfur that is not recovered through an increase in the price of Mosaic’s related crop nutrients products or an extended interruption in the supply of natural gas, ammonia or sulfur to its production facilities could have a material adverse effect on Mosaic’s business, financial condition or results of operations.

 

Mosaic’s competitors include state-owned and government subsidized entities in other countries with access to greater resources than Mosaic, which may place Mosaic at a competitive disadvantage and adversely affect its sales and profitability.

 

In addition to U.S. producers of crop nutrients, Mosaic competes with a number of producers in other countries, including state-owned and government subsidized entities. These entities may have greater total resources than Mosaic and may be less dependent on earnings from crop nutrients sales than Mosaic. In addition, some of these entities may have access to lower cost or government- subsidized natural gas supplies, placing Mosaic at a competitive disadvantage. Mosaic’s inability to compete with these entities will harm its business by lowering its sales and profits.

 

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IMC has experienced an inflow of water into its Esterhazy mine over the last 18 years. Mosaic is not insured against the risk of floods and water inflow at that mine and the costs to control the water inflow could increase in future years. The water inflow, risk to employees or remediation costs could also cause Mosaic to change its mining process or abandon the mines, which in turn could significantly negatively impact Mosaic’s results of operations.

 

Since December 1985, IMC has experienced an inflow of water into one of its two interconnected potash mines at Esterhazy, Saskatchewan. In order to control inflow, IMC has incurred expenditures, certain of which, due to their nature, have been capitalized, while others have been charged to expense. Because procedures utilized by IMC to control the water inflow have proven successful to date, Mosaic will likely continue conventional shaft mining carried on by IMC in the past. It is possible that the costs of remedial efforts at Esterhazy may increase in future years or that the water inflow, risk to employees or remediation costs may increase to a level which would cause Mosaic to change its mining process or abandon the mines. Due to the ongoing water inflow problem at Esterhazy, underground operations at this facility are currently not insurable for water incursion problems. IMC’s Colonsay mine is also subject to the risks of inflow of water as a result of its shaft mining operations.

 

The environmental regulations to which Mosaic is subject, as well as its potential environmental liabilities, may have a material adverse effect on its business, financial condition and results of operations.

 

Mosaic is subject to numerous environmental, health and safety laws and regulations in the U.S., Canada, Europe, China, Brazil and other international jurisdictions where it operates fertilizer businesses, including laws and regulations relating to land reclamation and remediation of hazardous substance releases. For example, the U.S. Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, imposes liability, without regard to fault or to the legality of a party’s conduct, on certain categories of persons (known as “potentially responsible parties”) who are considered to have contributed to the release of “hazardous substances” into the environment. As a fertilizer company working with chemicals and other hazardous substances, Mosaic will periodically incur liabilities, under CERCLA and other environmental cleanup laws, with regard to its current or former facilities, adjacent or nearby third party facilities or offsite disposal locations. Under CERCLA, or its various state analogues, one party may, under certain circumstances, be required to bear more than its proportional share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties. Liability under these laws involves inherent uncertainties. Violations of environmental, health and safety laws are subject to civil, and, in some cases, criminal sanctions. Laws similar to those in the United States may be applicable to international jurisdictions where Mosaic operates. In some international jurisdictions, environmental laws change rapidly and it may be difficult for Mosaic to determine if it is in compliance with all material environmental laws at any given time. As a result of these uncertainties, Mosaic may incur unexpected interruptions to operations, fines, penalties or other reductions in income which would negatively impact the financial condition and results of operations of Mosaic.

 

Continued government and public emphasis on environmental issues can be expected to result in increased future investments for environmental controls at ongoing operations, which will be charged against income from future operations. Present and future environmental laws and regulations applicable to Mosaic’s operations may require substantial capital expenditures and may have a material adverse effect on its business, financial condition and results of operations.

 

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Mosaic’s operations are dependent on having received the required permits and approvals from governmental authorities. A decision by a government agency to deny any of Mosaic’s permits and approvals or to impose restrictive conditions on Mosaic or its subsidiaries with respect to these permits and approvals may impair its business and operations.

 

Mosaic, through its subsidiaries, holds numerous governmental environmental, mining and other permits and approvals authorizing operations at each of its facilities. Expansion of Mosaic’s operations also is predicated upon securing the necessary environmental or other permits or approvals. A decision by a government agency to deny or delay issuing a new or renewed permit or approval, or to revoke or substantially modify an existing permit or approval, could have a material adverse effect on Mosaic’s ability to continue operations at the affected facility.

 

Over the next several years, Mosaic and its subsidiaries will be continuing their efforts to obtain permits in support of their anticipated Florida mining operations at certain of their properties. These properties contain in excess of 100 million tons of phosphate rock reserves. In Florida, local community participation has become an important factor in the permitting process for mining companies. A denial of these permits or the issuance of permits with cost-prohibitive conditions would prevent Mosaic from mining at these properties and thereby have a material adverse effect on Mosaic’s business, financial condition and results of operations. In many cases, as a condition to procuring such permits and approvals, Mosaic will be required to comply with financial assurance regulatory requirements. The purpose of these requirements is to assure the government that sufficient company funds will be available for the ultimate closure, post-closure care and/or reclamation of Mosaic’s facilities. These financial assurance requirements can be satisfied without the need for any expenditure of corporate funds if Mosaic’s financial statements meet certain balance sheet/income statement criteria, referred to as the financial tests. In the event that Mosaic is unable to satisfy these financial tests, alternative methods of complying with the financial assurance requirements would require Mosaic to expend funds for the purchase of bonds, letters of credit, insurance policies or similar instruments. The regulations governing financial assurance are currently in the rulemaking process. It is possible that Mosaic will not be able to comply with such regulations in the future, which could materially adversely affect Mosaic’s business and operations.

 

Mosaic is not insured against all potential losses and could be seriously harmed by natural disasters, catastrophes or deliberate sabotage.

 

Many of Mosaic’s business activities involve substantial investments in mining and manufacturing facilities, including clay settling ponds and phosphogypsum systems, distribution warehouses and transportation assets. These facilities and nearby properties could be materially damaged by tornadoes, hurricanes and other natural disasters, catastrophes, deliberate sabotage or other catastrophic circumstances. For example, several Central Florida phosphate producers, including Mosaic and IMC, suffered property damage during Hurricanes Charley, Frances and Jeanne in August and September 2004. In particular, on September 5, 2004, a breach of the active phosphogypsum stack at Mosaic’s Riverview facility occurred due to excessive winds from Hurricane Frances, resulting in approximately 65 million gallons of partially-treated fertilizer process water being released into nearby Archie Creek. In addition, the recent hurricanes resulted in lost production at Mosaic and IMC of approximately 182,000 and 140,000 tons, respectively, of granulated product (DAP/MAP/TSP/MicroEssentials), as well as expenses relating to the handling and treatment of water resulting from massive rainfall that resulted in raised water levels in certain gypsum stacks and water retention ponds. The release described above could result in potential enforcement actions from governmental authorities, claims from private parties and future regulatory challenges.

 

In addition, certain raw materials, finished products, byproducts and process water located within these facilities are potentially destructive and dangerous in uncontrolled or catastrophic circumstances,

 

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including tornadoes, hurricanes, fires, explosions, accidents or major equipment failures. Despite insurance coverage, Mosaic could incur uninsured losses and liabilities arising from such events, including damage to Mosaic’s reputation, and/or suffer substantial losses in operational capacity, which could have a material adverse effect on Mosaic’s results of operations and financial condition.

 

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CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

 

This prospectus contains or incorporates by reference forward-looking statements that are subject to risks and uncertainties. Generally, forward-looking statements include information concerning possible or assumed future actions, events or results of operations and may include, without limitation, statements concerning the future financial condition, results of operations, plans, objectives, performance and businesses of each of IMC, PLP, Mosaic and the Cargill Fertilizer Businesses and statements made regarding the period leading up to and following completion of the Cargill transactions. Words such as “may,” “should,” “plan,” “predict,” “potential,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe” and words and terms of similar substance identify forward-looking statements. Forward-looking statements are based on expectations, estimates and projections regarding future events.

 

Forward-looking statements are not guarantees of performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Please understand that various factors, in addition to those discussed elsewhere in this document and in the documents incorporated by reference into this document, could affect the future results of IMC, PLP, Mosaic and the Cargill Fertilizer Businesses and could cause actual results to differ materially from those expressed in the forward-looking statements, including:

 

  Ÿ   the risk factors described under “Risk Factors;”

 

  Ÿ   the ability to integrate the operations of IMC and the Cargill Fertilizer Businesses successfully;

 

  Ÿ   the ability to fully realize the expected cost savings from the Cargill transactions within the expected time frame;

 

  Ÿ   the ability to develop and execute comprehensive plans for asset rationalization;

 

  Ÿ   the financial resources of, and products available to, Mosaic’s competitors;

 

  Ÿ   the retention of existing, and continued attraction of additional, customers and key employees;

 

  Ÿ   changes in the outlook of the phosphate market;

 

  Ÿ   changes in the costs of raw materials;

 

  Ÿ   the effect of any conditions or restrictions imposed on or proposed with respect to Mosaic by regulators;

 

  Ÿ   the effect of legislative or regulatory changes in jurisdictions in which IMC, PLP and the Cargill Fertilizer Businesses are engaged;

 

  Ÿ   the ability of Mosaic to obtain the regulatory permits necessary for continued operations of the businesses of IMC, PLP and the Cargill Fertilizer Businesses in a manner consistent with their current operation and for expansion of those operations;

 

  Ÿ   contingencies related to environmental liability under U.S. federal and state and foreign environmental laws and regulations;

 

  Ÿ   the rating of Mosaic’s and IMC’s securities and the changes that may occur in the U.S. securities markets; and

 

  Ÿ   the factors described in IMC’s and PLP’s filings with the SEC, including their Annual Reports on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A, which are incorporated by reference into this document. See “Where You Can Find More Information.”

 

Because forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. You are

 

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cautioned not to place undue reliance on such statements, which speak only as of the date of this prospectus or the date of any document incorporated by reference into this document.

 

All subsequent written and oral forward-looking statements concerning the matters addressed in this prospectus and attributable to IMC, PLP, Mosaic, the Cargill Fertilizer Businesses or Cargill or any person acting their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, none of IMC, PLP, Mosaic, the Cargill Fertilizer Businesses or Cargill undertakes any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.

 

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DESCRIPTION OF THE CONSENT SOLICITATION

 

IMC and PLP are soliciting consents, upon the terms and subject to the conditions set forth in this prospectus and the accompanying letter of consent, to the Amendments from the holders of the Securities. Certain information concerning each series of the Securities is set forth in the table below.

 

    

Outstanding

Principal
Amount


  

Governing Indenture


Securities of IMC

           

11.250% Senior Notes due 2011

   $ 417,500,000    Indenture, dated as of May 17, 2001, between IMC and The Bank of New York, as Trustee

10.875% Senior Notes due 2008

   $ 400,000,000    Indenture, dated as of May 17, 2001, between IMC and The Bank of New York, as Trustee

10.875% Senior Notes due 2013

   $ 400,000,000    Indenture, dated as of August 1, 2003, between IMC and BNY Midwest Trust Company, as Trustee

6.875% Debentures due 2007

   $ 150,000,000    Indenture, dated as of July 17, 1997, between IMC and The Bank of New York, as Trustee (as amended or supplemented, the 1997 Indenture)

7.30% Debentures due 2028

   $ 150,000,000    1997 Indenture

7.375% Debentures due 2018

   $ 90,000,000    Indenture, dated as of August 1, 1998, between IMC and The Bank of New York, as Trustee (as amended or supplemented, the 1998 Indenture)

7.625% Notes due 2005

   $ 26,902,000    1998 Indenture

9.45% Senior Debentures due 2011

   $ 18,490,000    Indenture, dated as of December 1, 1991, between IMC and The Bank of New York, as Trustee (as amended or supplemented, the 1991 Indenture)

6.55% Notes due 2005

   $ 9,595,000    1997 Indenture

Securities of PLP

           

7% Senior Notes due 2008

   $ 150,000,000    Senior Indenture, dated as of February 1, 1996, between PLP and JPMorgan Chase Bank (formerly known as Chemical Bank), as Trustee, (as amended or supplemented, the PLP Indenture)

 

The securities of IMC other than the High-Yield Notes are referred to collectively as the Other IMC Securities and the 7% Senior Notes due 2008 of PLP are referred to as the PLP Notes.

 

Rationale for the Consent Solicitation

 

The two main purposes of the consent solicitation and the proposed Amendments are:

 

  Ÿ   to amend certain covenants in the High-Yield Indentures to provide IMC and its subsidiaries with the operational flexibility to more effectively integrate the businesses of IMC and the Cargill Fertilizer Businesses; and

 

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  Ÿ   to amend certain covenants in the Indentures to permit each of IMC and PLP to provide copies of Mosaic’s reports filed with the SEC pursuant to the requirements of the Securities Exchange Act to the holders of the Securities (and, if applicable, to file such reports with the SEC) in lieu of reports relating only to IMC or PLP, as the case may be.

 

Please see “—Description of the Proposed Amendments” for a summary of the proposed Amendments.

 

If the Amendments are not approved, none of the Indentures would require Mosaic, Mosaic Fertilizer or Mosaic Crop Nutrition to assume any obligations under the Securities or guarantee any of the indebtedness under the Securities.

 

Record Date

 

Only holders of record as of 5:00 p.m., New York City time, on [            ], [            ], 2004, the record date for the consent solicitation, may deliver consents.

 

Requisite Consents

 

IMC and PLP are soliciting consents from all holders of the Securities, referred to as holders, of record on the record date. Approval of the Amendments with respect to any series of the Securities requires the delivery prior to the Expiration Time (as described in “—Expiration Time; Early Consent Period Deadline; Extension; Amendment; Termination”) and acceptance by IMC or PLP, as the case may be, of valid consents (that are not properly revoked) by the holders of a majority in aggregate principal amount of that series outstanding as of the record date, which are referred to as the Requisite Consents for that series. Any series of the Securities for which Requisite Consents are received and accepted is referred to as an Approving Series. The aggregate outstanding principal amount of each series of the Securities, as of the date of this prospectus, is set forth at the beginning of this section.

 

For purposes of determining the outstanding principal amount of any series of the Securities, any Securities held by IMC or PLP or their affiliates will not be counted as being outstanding. To IMC’s and PLP’s knowledge, as of the record date, none of the Securities were held by IMC or PLP or their affiliates.

 

The failure of a holder to deliver, or cause to be delivered, a consent with respect to any series of the Securities, including any failures resulting from broker non-votes, will have the same effect as if that holder had marked “Does Not Consent” on the letter of consent.

 

Description of the Proposed Amendments

 

The proposed Amendments are being requested with respect to ten separate series of debt securities issued under seven indentures. The proposed Amendments to the High-Yield Notes and the High-Yield Indentures are being sought as a single proposal. That means that IMC must receive and accept the Requisite Consents from EACH series of the High-Yield Notes for the proposed Amendments to any of the High-Yield Notes and the High-Yield Indentures to be approved. The proposed Amendments being requested with respect to each series of the Other IMC Securities and with respect to the PLP Notes are each being sought as separate proposals. That means that every such series does not need to approve the Amendments in order for the Amendments to any single series of those Securities, and its related Indenture, to be approved. However, as described below in “—Conditions to the Consent Solicitation,” IMC and PLP will not accept consents from holders of ANY series of the Securities unless EACH series of the High-Yield Notes approves the Amendments.

 

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The approved Amendments with respect to any series of the Securities will be set forth in a supplemental indenture to be entered into between IMC or PLP, as the case may be, and the trustee under the applicable Indenture for that series, referred to as the Trustee. Please see “—Operative Date of Amendments; Timing For Making of Consent Payments and Issuance of Guarantees.”

 

The execution and delivery of the accompanying letter of consent by a holder of a series of the Securities will constitute the consent of such holder to the proposed Amendments to such series. A holder may not consent to some but not all of the proposed Amendments with respect to a series of the Securities. A consent purporting to consent to some but not all of the proposed Amendments with respect to a series of the Securities will be deemed a consent to the proposed Amendments to such series as a whole.

 

Proposed Amendments to High-Yield Notes

 

Following is a summary of certain of the key provisions of the proposed Amendments to the High-Yield Indentures. Please also see Annex C to this prospectus which contains a table of certain key proposed Amendments to the High-Yield Indentures. The following summary is qualified by reference to the description of the terms of the High-Yield Notes, as amended by the proposed Amendments, in “Description of the Amended Securities—Description of High-Yield Notes” and the full provisions of the High-Yield Indentures and the forms of supplemental indentures to the High-Yield Indentures, which have been filed as exhibits to the registration statement of which this prospectus forms a part. The summary of the Amendments are presented primarily in the order the relevant provisions appear in the High-Yield Indentures and not necessarily in the order of importance or materiality.

 

Revision of Restricted Payments Covenant to Permit Certain Payments and Loans to Subsidiaries of Mosaic

 

The “Limitation on Restricted Payments” covenant in the High-Yield Indentures restricts the ability of IMC to make Restricted Payments unless certain requirements are met. Among those requirements are requirements that, at the time of any Restricted Payment and after giving effect thereto:

 

  Ÿ   IMC must be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception; and

 

  Ÿ   the aggregate amount of Restricted Payments made after May 17, 2001 must not exceed an amount determined by a specified formula.

 

The term “Coverage Ratio Exception” is defined in the High-Yield Indentures as IMC having a Consolidated Fixed Charge Coverage Ratio of at least 2.0 to 1.0, after giving pro forma effect to any Indebtedness incurred as of the time of the calculation of the ratio. Please see “Description of the Amended Securities—Description of High-Yield Notes” for the meaning of the terms “Indebtedness,” “Consolidated Fixed Charge Coverage Ratio” and “Restricted Payments” and the formula used to determine the maximum amount of Restricted Payments permitted pursuant to the second bullet point above.

 

IMC, as a wholly owned subsidiary of Mosaic, would like to be able to make payments and loans to Mosaic’s other subsidiaries to ensure that those subsidiaries have adequate capital to engage in business operations. In order to permit these payments and loans under the “Limitation on Restricted Payments” covenant, IMC is requesting an Amendment to the High-Yield Indentures that would exempt from the limitations of the covenant any Restricted Payments made by IMC or its restricted subsidiaries to the Affiliate Guarantors to fund their ordinary course of business operations, including their working capital requirements, so long as those Restricted Payments are not used to fund, among other things, certain dividend payments to the equity holders of Mosaic, referred to as Mosaic Restricted Dividends.

 

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In addition, IMC is requesting Amendments that would exempt from the restrictions of the covenant any inter-company loans made by IMC or its restricted subsidiaries to:

 

  Ÿ   any subsidiary of Mosaic that is not an Affiliate Guarantor to fund its ordinary course of business operations, including its working capital requirements, so long as those Restricted Payments are not used to fund, among other things, Mosaic Restricted Dividends; or

 

  Ÿ   Mosaic and/or any subsidiary of Mosaic to fund non-ordinary course business transactions, including acquisitions and capital expenditures, so long as those Restricted Payments are not used to fund, among other things, Mosaic Restricted Dividends, provided that these inter-company loans for non-ordinary course of business transactions may not exceed an aggregate amount of $200 million at any time outstanding.

 

Any inter-company loan or series of related loans in excess of $5.0 million made pursuant to the two bullet points above would be permitted only if the terms are as favorable to IMC and its restricted subsidiaries as the terms of a loan to a non-affiliate at fair market value, as reasonably determined in good faith by the IMC board of directors or a senior officer of IMC. Please see “Description of the Amended Securities—Description of High-Yield Notes—Certain Definitions” for the complete definition of the term “Mosaic Restricted Dividend.”

 

Increase in Certain Covenant Baskets

 

Several of the covenants in the High-Yield Indentures are intended to provide IMC and its restricted subsidiaries with the flexibility to make certain expenditures or take other actions that would otherwise be prohibited, provided that those expenditures do not exceed specified monetary limits, referred to as baskets. IMC is requesting Amendments to the baskets as follows in order to provide additional flexibility for its business operations following completion of the Cargill transactions:

 

  Ÿ   increase the Permitted Indebtedness basket for Indebtedness pursuant to a credit agreement to $850 million (and remove the requirement that such amount be decreased by any repayments made using the proceeds of asset sales) (see also “—Clarifications and Amendments in Connection with Potential Refinancing of Credit Agreement” below);

 

  Ÿ   increase the basket for Permitted Indebtedness of foreign subsidiaries of IMC to $100 million at any time outstanding (it is currently set at $25 million);

 

  Ÿ   increase the basket for additional Permitted Investments to $50 million at any time outstanding (it is currently set at $25 million);

 

  Ÿ   restart the Restricted Payments basket of up to $60 million beginning on the Operative Date; and

 

  Ÿ   increase the carve-out for asset sales not subject to the “Limitation on Asset Sales” covenant to the sale of any asset or assets in any transaction or series of related transactions with an aggregate fair market value of less than $25 million (it currently limits exempted asset sales to those with respect to which aggregate consideration of $15 million is received).

 

Revision of Asset Sale Definition to Permit Certain Transactions with Subsidiaries of Mosaic

 

Subject to certain de minimus and ordinary course exceptions, the High-Yield Indentures prohibit IMC and its restricted subsidiaries from selling or transferring assets unless IMC receives fair market value in return and at least 75% of the consideration received is in the form of cash or cash equivalents. In addition, the cash proceeds from each such asset sale are required to be applied to repay certain indebtedness or to make an investment in assets to replace the assets sold. Having

 

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completed the Cargill transactions, IMC and Mosaic would benefit from the flexibility to use their combined assets where they can be most beneficial to Mosaic’s business as a whole. In order to create that flexibility, IMC is proposing Amendments to the High-Yield Indentures that would revise the definition of “Asset Sale” to specifically exclude any transaction or series of related transactions involving the sale or other transfer of assets by IMC or its restricted subsidiaries to any subsidiaries of Mosaic, provided that:

 

  Ÿ   the transferred assets are not material to IMC and its restricted subsidiaries on a consolidated basis;

 

  Ÿ   the assets are used in the ordinary course of business of the transferee; and

 

  Ÿ   in the case of an asset or assets transferred to subsidiaries of Mosaic that are not Affiliate Guarantors, the consideration received for the assets is not less than their fair market value as reasonably determined in good faith by the IMC board of directors or a senior officer of IMC.

 

IMC is also requesting a related Amendment to specifically exclude the transactions described in this paragraph from the requirements of the “Limitation on Transactions with Affiliates” covenant.

 

 

Revision of Affiliate Transactions Covenant to Permit Certain Transactions with Subsidiaries of Mosaic

 

The “Limitation on Transactions with Affiliates” covenant in the High-Yield Indentures prohibits IMC and its restricted subsidiaries from engaging in transactions with, or for the benefit of, any affiliates of IMC, other than:

 

  Ÿ   transactions on terms not less favorable to IMC or its subsidiaries than those that would have been obtained in a comparable transaction with an unrelated person, which, if such transactions exceed a specified dollar value, have been approved by the IMC board of directors and/or been determined to be fair by an independent financial advisor; or

 

  Ÿ   certain specifically enumerated transactions not subject to the requirements of the bullet point above.

 

IMC and Mosaic seek to integrate IMC with the Cargill Fertilizer Businesses and to have IMC and its restricted subsidiaries engage freely in transactions with other subsidiaries of Mosaic without the necessity of having IMC’s board of directors approve such transactions and/or having to obtain an independent fairness opinion if such transactions exceed the applicable dollar thresholds. In an effort to create that flexibility, IMC is requesting Amendments to the High-Yield Indentures that would expand the list of specifically enumerated permitted transactions not subject to the requirements of the covenant to include:

 

  Ÿ   transactions in the ordinary course of business between IMC and its restricted subsidiaries, on the one hand, and Mosaic and/or any subsidiary of Mosaic, on the other, so long as they otherwise comply with the terms of the High Yield Indentures; and

 

  Ÿ   transactions permitted by the proposed Amendments described in “—Revision of Restricted Payments Covenant to Permit Certain Payments and Loans to Mosaic and Subsidiaries of Mosaic” above and “—Revision of Certain Covenants to Permit Distribution of Cash Received From Unrestricted Sources” below.

 

Transactions engaged in pursuant to the first bullet point immediately above involving subsidiaries of Mosaic that are not Affiliate Guarantors, and any transactions engaged in pursuant to the second bullet point immediately above, will, to the extent they involve aggregate payments or other

 

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assets with a fair market value of more than $5.0 million, only be permitted if a reasonable good faith determination is made by the IMC board of directors or a senior officer of IMC that the terms of such transactions are fair to IMC and its restricted subsidiaries or are no less favorable than terms which reasonably could have been obtained from an unrelated party.

 

IMC is also requesting an Amendment to add guarantees issued by IMC and its restricted subsidiaries with respect to Indebtedness of the Affiliate Guarantors to the list of permitted affiliate transactions not subject to the requirements of the first bullet point in the first paragraph of this subsection, so long as those guarantees are permitted by the “Limitation on Incurrence of Additional Indebtedness” covenant.

 

Revision of Certain Covenants to Permit Distribution of Cash Received From Unrestricted Sources

 

Mosaic and its subsidiaries, other than IMC and its restricted subsidiaries, will not be subject to the restrictive covenants of the High-Yield Indentures. Therefore, the manner in which those entities use their assets will not be restricted by the High-Yield Indentures. Mosaic would benefit from the ability to effectively deploy cash generated by unrestricted subsidiaries among all of its subsidiaries to support their operations. To the extent that such cash is transferred through IMC and its restricted subsidiaries, Mosaic and IMC believe that such cash, having come from unrestricted sources, should be free to move through IMC and its restricted subsidiaries without regard to the limitations imposed by the High-Yield Indentures. Accordingly, IMC is requesting Amendments to the High-Yield Indentures to permit the distribution of cash that it and its restricted subsidiaries receive from sources not restricted by the High-Yield Indentures. Those Amendments would:

 

  Ÿ   revise the “Limitations on Restricted Payments” covenant to permit IMC or its restricted subsidiaries to make Restricted Payments concurrently with and in the amount of the funds received from Mosaic and its other subsidiaries;

 

  Ÿ   revise the “Limitation on Transactions with Affiliates” covenant to permit transactions described in the first bullet point above, provided that transactions involving aggregate payments in excess of $5.0 million are on terms that are fair to IMC and its restricted subsidiaries, or are no less favorable than terms which reasonably could have been obtained from an unrelated party, as reasonably determined in good faith by the IMC board of directors or a senior officer of IMC; and

 

  Ÿ   revise the “Limitation on Designations of Unrestricted Subsidiaries” covenant so that any entity that becomes a subsidiary of IMC as a result of a payment described in the first bullet point above shall be an “Unrestricted Subsidiary” of IMC without IMC having to take a charge against its Restricted Payments basket (as would otherwise be required to designate a subsidiary as an “Unrestricted Subsidiary”).

 

Revision of Certain Provisions to Permit a Phosphates Combination Transaction

 

IMC and Mosaic expect to combine the phosphates businesses of IMC and the Cargill Fertilizer Businesses in order to operate them more effectively and in an integrated manner. The combination of the phosphates businesses may occur through one or more sale, lease, contribution, merger, consolidation or other types of transactions, each referred to as a Phosphates Combination Transaction. For the other requirements for a transaction to qualify as a Phosphates Combination Transaction, please see the definition of “Phosphates Combination Transaction” in “Description of the Amended Securities—Description of High-Yield Notes—Certain Definitions.”

 

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To ensure that any Phosphates Combination Transactions will not violate the provisions of the High-Yield Indentures, IMC is requesting Amendments to the High-Yield Indentures that would:

 

  Ÿ   provide that a Phosphates Combination Transaction will not constitute a sale or other transfer of all or substantially all of IMC’s assets and therefore will not be subject to the “Merger, Consolidation and Sale of Assets” covenant in the High-Yield Indentures;

 

  Ÿ   revise the list of specifically enumerated permitted affiliate transactions to include a Phosphates Combination Transaction;

 

  Ÿ   revise the definition of “Permitted Investments” to include Investments made pursuant to a Phosphates Combination Transaction;

 

  Ÿ   revise the definitions of “Asset Sale” and “Change of Control” to specifically exclude any transfer of assets or capital stock pursuant to a Phosphates Combination Transaction; and

 

  Ÿ   revise the “Limitation on Designations of Unrestricted Subsidiaries” covenant so that an entity formed in a Phosphates Combination Transaction that is a subsidiary of IMC shall be designated as an “Unrestricted Subsidiary” of IMC without IMC having to take a charge against its Restricted Payments basket (as would otherwise be required to designate a subsidiary as an “Unrestricted Subsidiary”).

 

The Amendments will also provide that any entities formed pursuant to a Phosphates Combination Transaction must be Affiliate Guarantors.

 

As of September 30, 2004, the assets that constitute IMC’s phosphate business, which, if the Amendments are approved and adopted, may be subject to a Phosphates Combination Transaction, accounted for approximately 54% of the total assets of IMC and its subsidiaries. If these assets are contributed to a combined phosphates business in a Phosphates Combination Transaction, they will no longer be subject to the covenants of the High-Yield Indentures.

 

Revision of Reporting Covenant to Provide Reports of Mosaic

 

The High-Yield Indentures require IMC to provide to the holders of the High-Yield Notes and to file with the SEC:

 

  Ÿ   all annual and quarterly financial information that would be required to be contained in a Form 10-K or Form 10-Q filed with the SEC, and

 

  Ÿ   all current reports that would be required to be filed with the SEC on Form 8-K,

 

regardless of whether IMC is required by the rules and regulations of the SEC to file such reports.

 

IMC intends, following the issuance of the Guarantees relating to the Securities of IMC, to discontinue filing separate periodic reports and other information with the SEC in reliance on Rule 12h-5 promulgated under the Securities Exchange Act. In an effort to eliminate the significant expense associated with continuing to produce and provide to holders of the High-Yield Notes separate reports for IMC, when IMC will no longer be required under the rules and regulations of the SEC to prepare and file such reports with the SEC, IMC is requesting an Amendment to the High-Yield Indentures that would permit IMC to provide reports of Mosaic to the holders of its High-Yield Notes, and to file such reports with the SEC, in lieu of separate reports relating only to IMC. In the event of a sale of IMC by Mosaic, however, IMC will stop providing reports of Mosaic and will once again provide reports relating only to IMC to the holders of its High-Yield Notes and, to the extent required, file such reports with the SEC.

 

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Permit Certain Determinations to be Made by IMC Board or a Senior Officer

 

The High-Yield Indentures currently require certain fairness determinations to be made by the IMC board of directors. To increase operational efficiencies, IMC is requesting Amendments to allow some of those determinations to be made by the IMC board of directors or a senior officer of IMC. In addition to those instances described elsewhere in this description of the proposed Amendments to the High-Yield Notes, IMC would like to amend the High-Yield Indentures to allow for determinations to be made by the IMC board of directors or a senior officer, which determinations must be reasonable and in good faith, in the following circumstances:

 

  Ÿ   in determining the fair market value of the aggregate amount of Restricted Payments made after May 17, 2001 for purposes of calculating the Restricted Payments basket;

 

  Ÿ   in determining the fair market value of assets sold or otherwise disposed of for purposes of the “Limitation on Asset Sales” covenant;

 

  Ÿ   in determining whether encumbrances or restrictions in refinanced Indebtedness for purposes of the “Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries” covenant are materially less favorable in the aggregate to the holders of the High-Yield Notes;

 

  Ÿ   in approving affiliate transactions involving aggregate payments or other assets with a fair market value in excess of $15 million; and

 

  Ÿ   in determining that fees, compensation and indemnity provided to officers, directors, employees or consultants of IMC and its restricted subsidiaries are reasonable for purposes of such fees, compensation and indemnity not being subject to the “Limitation on Transactions with Affiliates” covenant.

 

In connection with these Amendments, the definition of “fair market value” will also be amended to provide that determinations of fair market value may be made by a senior officer of IMC or the IMC board of directors where expressly provided by the terms of the High-Yield Indentures, which determination, if made by an IMC senior officer, must be evidenced by an officer’s certificate delivered to the applicable Trustee (except in the case of a transaction which in all material respects is exclusively between IMC and its restricted subsidiaries, on the one hand, and Mosaic and its other subsidiaries, on the other, in which case no such officer’s certificate will be required).

 

Clarifications and Amendments in Connection with Potential Refinancing of Credit Agreement

 

It is anticipated that Mosaic and/or its subsidiaries will have a new credit facility, under which IMC and its subsidiaries may be direct borrowers and/or guarantors of the obligations of the Affiliate Guarantors, which will replace IMC’s existing credit facility. Therefore, IMC is requesting the following Amendments:

 

  Ÿ   to clarify that the definition of “Permitted Indebtedness” includes Indebtedness which IMC and its subsidiaries may incur either as direct borrowers and/or pursuant to direct or indirect guarantees of Indebtedness of the Affiliate Guarantors pursuant to a new Mosaic credit facility (up to the maximum dollar amount described in the first bullet point under “—Increase in Certain Covenant Baskets” above);

 

  Ÿ   to clarify that the definition of “Permitted Investments” includes guarantees by IMC and/or its restricted subsidiaries of the Indebtedness described in the prior bullet point; and

 

  Ÿ   to clarify that the definition of “Credit Agreement” includes a refinancing thereof by Mosaic or its subsidiaries with respect to which IMC and/or its restricted subsidiaries are borrowers and/or provide direct or indirect guarantees.

 

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Addition of Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition to Certain Provisions

 

In light of the addition of the Affiliate Guarantors of the High-Yield Notes, IMC believes that it is appropriate for the Amendments to provide for certain events of default in the High-Yield Indentures to relate to not only IMC and its significant subsidiaries but also to Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition and their respective significant subsidiaries. In addition, IMC will add to the provision requiring approval of all of the holders of the High-Yield Notes the release, other than pursuant to the terms of the High-Yield Indentures, of the note guarantees of Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition and any of their respective significant subsidiaries that are Affiliate Guarantors of the High-Yield Notes.

 

Elimination of Cap on Guarantees of PLP and its Subsidiaries

 

Because PLP and its subsidiaries were not wholly owned by IMC prior to the completion of the PLP merger, their guarantees of the High-Yield Notes are limited to the amount of indebtedness they owe to IMC. However, currently, PLP and its subsidiaries are wholly owned subsidiaries of IMC. Therefore, IMC intends, as part of the Amendments, to eliminate the limitations on the amount of their guarantees and certain other related provisions.

 

Revision of Certain Definitions

 

In connection with the Amendments described above, a number of the defined terms contained in the High-Yield Indentures will be amended or deleted, and new defined terms will be added to the High-Yield Indentures. In addition, several of the definitions will be modified to account for the fact that IMC is now a subsidiary of Mosaic (i.e., the definition of “Change of Control”). Please see “Description of the Amended Securities—Description of High-Yield Notes—Certain Definitions” for the definitions to be included in the High-Yield Indentures, as modified by the Amendments.

 

Addition of the Guarantees

 

In connection with the Amendments, Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition will offer full and unconditional guarantees of IMC’s obligations under the High-Yield Notes, as further described in “—Offer of the Guarantees.” The Guarantees of Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition with respect to each series of the High-Yield Notes will be embodied in the supplemental indenture with respect to the High-Yield Indenture governing such series. The Guarantees will be in addition to the existing guarantees of the High-Yield Notes by certain subsidiaries of IMC. The proposed Amendments will also provide that the following additional entities will be Affiliate Guarantors to the extent they exist:

 

  Ÿ   any entity formed pursuant to a Phosphates Combination Transaction;

 

  Ÿ   each holding company, if any, between Mosaic and Mosaic Fertilizer or between Mosaic and Mosaic Crop Nutrition; and

 

  Ÿ   each subsidiary of Mosaic, Mosaic Fertilizer or Mosaic Crop Nutrition which directly or indirectly guarantees Indebtedness under the Credit Agreement (provided that such guarantee may be limited to the same extent as such subsidiary’s guarantee under the Credit Agreement).

 

To the extent that the entities described in the foregoing bullet points become Affiliate Guarantors of the High-Yield Notes, they will also become guarantors of the Other IMC Securities and the PLP Notes.

 

Please also see “—Offer of the Guarantees” and “Description of the Guarantees.”

 

Proposed Amendments to Other IMC Securities

 

Following is a summary of IMC’s proposed Amendments to the Indentures governing the Other IMC Securities. The following summary is qualified by reference to the full provisions of the applicable

 

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Indentures and the forms of supplemental indentures to those Indentures, which have been filed as exhibits to the registration statement of which this prospectus forms a part.

 

Revision of Merger and Sale of Assets Provision to Permit a Phosphates Combination Transaction

 

Each of the Indentures governing the Other IMC Securities restricts IMC’s ability to consolidate or merge with or into, or sell, lease, convey or otherwise dispose of all or substantially all of its assets to, any other entity, unless certain requirements are met. As described above in “—Proposed Amendments to High-Yield Notes—Revision of Certain Provisions to Permit a Phosphates Combination Transaction,” IMC and Mosaic expect to combine the phosphate businesses of IMC and the Cargill Fertilizer Businesses through one or more Phosphates Combination Transactions. To ensure that any Phosphates Combination Transaction will be permitted to occur without violating the Indentures governing the Other IMC Securities, IMC is requesting Amendments to the merger and sale of assets provisions in the Indentures governing the Other IMC Securities that would provide that a Phosphates Combination Transaction will not constitute a sale, lease, conveyance or disposition of all or substantially all of IMC’s assets.

 

The Amendments to the Indentures governing the Other IMC Securities will result in any entities formed pursuant to a Phosphates Combination Transaction becoming Affiliate Guarantors of the Other IMC Securities.

 

As of September 30, 2004, the assets that constitute IMC’s phosphate business, which, if the Amendments are approved and adopted, may be subject to a Phosphates Combination Transaction, accounted for approximately 54% of the total assets of IMC and its subsidiaries. If these assets are contributed to any combined phosphates business in a Phosphates Combination Transaction, they will no longer be subject to any of the covenants of the Indentures governing the Other IMC Securities.

 

Revision of Reporting Covenant to Provide Reports of Mosaic

 

Each of the Indentures governing the Other IMC Securities requires that IMC file with the applicable Trustee and mail to holders of the applicable series of Securities:

 

  Ÿ   annual and quarterly reports containing the financial information that would be required to be contained in a Form 10-K or Form 10-Q filed with the SEC, and

 

  Ÿ   all current reports that would be required to be filed with the SEC on Form 8-K,

 

regardless of whether IMC is required by the SEC to file such reports.

 

In addition, the 1991 Indenture requires IMC to file with the SEC all of the information required by the two bullet points above, regardless of whether IMC is required by the rules and regulations of the SEC to make those filings.

 

As described above in “—Proposed Amendments to High-Yield Notes—Revision of Reporting Covenant to Provide Reports of Mosaic,” following the issuance of the Guarantees relating to the Securities of IMC, IMC intends to discontinue filing separate periodic reports with the SEC. For the same reason that IMC is requesting Amendments to the High-Yield Indentures to modify the reporting covenant therein, as described above, IMC is also requesting an Amendment to the Indentures governing each series of the Other IMC Securities that would permit IMC to provide reports of Mosaic to the holders of those Securities, and, in the case of the 1991 Indenture, to file such reports with the SEC, in lieu of separate reports relating only to IMC. In the event of a sale of IMC by Mosaic, however, IMC will stop providing reports of Mosaic and will once again provide reports relating only to IMC to holders of the Other IMC Securities and, to the extent required, file such reports with the SEC.

 

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Modification of Events of Default Under 1997 Indenture to Eliminate Bankruptcy of a Non-Significant IMC Subsidiary

 

The bankruptcy of IMC or any of its subsidiaries is an event of default under the 1997 Indenture. Each of the other Indentures relating to the Securities issued by IMC permit IMC’s subsidiaries or, in some cases, its significant subsidiaries (as defined in the applicable Indenture), to voluntarily file for bankruptcy or involuntarily be placed into bankruptcy without causing a default under the applicable Indenture. In order to conform the bankruptcy-related events of default in the 1997 Indenture with those contained in the other Indentures relating to the Securities issued by IMC, IMC is requesting an Amendment to the 1997 Indenture to limit the definition of events of default to include only bankruptcy proceedings that relate to IMC or to its significant subsidiaries (which term will have the meaning given to it by Regulation S-X under the Securities Exchange Act, which is the same meaning given to the term under the High-Yield Indentures).

 

Addition of the Guarantees

 

In connection with the Amendments, Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition will offer full and unconditional guarantees of IMC’s obligations under the Other IMC Securities, as further described in “—Offer of the Guarantees.” The Guarantees of Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition with respect to each series of the Other IMC Securities will be embodied in the supplemental indenture with respect to the Indenture governing such series. The Amendments with respect to the Other IMC Securities will also provide that, to the extent any entity in addition to Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition is added as an Affiliate Guarantor of the High-Yield Notes, such entity will also become an Affiliate Guarantor with respect to each series of the Other IMC Securities. Please see “—Proposed Amendments to High-Yield Notes—Addition of the Guarantees” above for the identity of the additional entities that could become Affiliate Guarantors of the High-Yield Notes and, thus, become Affiliate Guarantors of the Other IMC Securities.

 

If the Amendments are adopted, there will be certain differences between the events of default and amendment provisions in the High-Yield Indentures and the Indentures governing the Other IMC Securities. For a description of those differences, please see “Risk Factors—Risks Related to the Consent Solicitation and the Guarantees—If the Amendments are adopted, certain events relating to Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or the Guarantees will result in immediate acceleration of the High-Yield Notes or give holders of the High-Yield Notes a right to accelerate at a time when holders of the Other IMC Securities and the PLP Notes do not have such a right” and “Description of the Guarantees.”

 

Proposed Amendments to PLP Notes

 

Following is a summary of PLP’s proposed Amendments to the PLP Indenture, which is qualified by reference to the full provisions of the PLP Indenture and the form of supplemental indenture thereto, which have been filed as exhibits to the registration statement of which this prospectus forms a part.

 

Revision of Merger and Sale of Assets Provision to Permit a Phosphates Combination Transaction

 

The PLP Indenture restricts PLP’s ability to consolidate or merge with or into, or sell, lease or convey all or substantially all of its assets to, any other entity, unless certain requirements are met. As described above in “—Proposed Amendments to High-Yield Notes—Revision of Certain Provisions to Permit a Phosphates Combination Transaction,” IMC and Mosaic expect to combine the phosphate businesses of IMC and the Cargill Fertilizer Businesses through one or more Phosphates Combination Transactions. To ensure that any Phosphates Combination Transaction will be permitted to occur

 

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without violating the PLP Indenture, PLP is requesting an Amendment to the merger and sale of assets provision in the PLP Indenture that would provide that a Phosphates Combination Transaction will not constitute a sale, lease or conveyance of all or substantially all of PLP’s assets.

 

The Amendments to the PLP Indenture will also result in any entities formed pursuant to a Phosphates Combination Transaction becoming Affiliate Guarantors of the PLP Notes.

 

As of September 30, 2004, the assets that constitute IMC’s phosphate business, which, if the Amendments are approved and adopted, may be subject to a Phosphates Combination Transaction, accounted for approximately 54% of the total assets of IMC and its subsidiaries. If these assets are contributed to any combined phosphates business in a Phosphates Combination Transaction, they will no longer be subject to any of the covenants of the PLP Indenture.

 

Revision of Reporting Covenant to Provide Reports of Mosaic

The PLP Indenture requires that PLP file with the applicable Trustee, mail to holders of the PLP Notes and file with the SEC:

 

  Ÿ   annual and quarterly reports containing the financial information that would be required to be contained in a Form 10-K or Form 10-Q filed with the SEC, and

 

  Ÿ   all current reports that would be required to be filed with the SEC on Form 8-K,

 

regardless of whether PLP is required by the SEC to file such reports.

 

Similar to IMC (as described above), following the issuance of the Guarantees relating to the PLP Notes, PLP intends to discontinue filing separate periodic reports and other information with the SEC in reliance on Rule 12h-5 under the Securities Exchange Act. In an effort to eliminate the significant expense associated with continuing to produce and provide to holders of the PLP Notes separate reports for PLP, when PLP will no longer be required under the rules and regulations of the SEC to prepare and file such reports with the SEC, PLP is requesting an Amendment to the PLP Indenture that would permit PLP to provide reports of Mosaic to the holders of the PLP Notes, and to file such reports with the SEC, in lieu of separate reports relating only to PLP. In the event of a sale of IMC by Mosaic, however, PLP will stop providing reports of Mosaic and will once again provide reports relating only to PLP to the holders of the PLP Notes and file such reports with the SEC.

 

Modification of Events of Default to Eliminate Bankruptcy of a Non-Significant PLP Subsidiary

 

The PLP Indenture provides that the bankruptcy of PLP or any of its restricted subsidiaries (which are defined as PLP’s subsidiaries that are not unrestricted subsidiaries) is an event of default. As described above in “—Proposed Amendments to Other Series of IMC Securities—Modification of Events of Default Under 1997 Indenture to Eliminate Bankruptcy of a Non-Significant IMC Subsidiary,” the majority of the Indentures governing the Securities issued by IMC permit IMC’s subsidiaries or, in some cases, its significant subsidiaries (as defined in the applicable Indenture), to voluntarily file for bankruptcy or involuntarily be placed into bankruptcy without causing a default under the applicable Indenture. In order to conform the bankruptcy-related events of default in the PLP Indenture with those contained in the Indentures relating to the Securities issued by IMC, PLP is requesting an Amendment to the PLP Indenture to limit the definition of events of default to include only bankruptcy proceedings that relate to PLP or to its significant subsidiaries (which term will have the meaning given to it by Regulation S-X under the Securities Exchange Act, which is the same meaning given to the term under the High-Yield Indentures).

 

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Addition of the Guarantees

 

In connection with the Amendments, Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition will offer full and unconditional guarantees of PLP’s obligations under the PLP Notes, as further described in “—Offer of the Guarantees.” The Guarantees of Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition with respect to the PLP Notes will be embodied in the supplemental indenture to the PLP Indenture. The Amendments with respect to the PLP Notes will also provide that, to the extent any entity in addition to Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition is added as an Affiliate Guarantor of the High-Yield Notes, such entity will also become an Affiliate Guarantor with respect to the PLP Notes. Please see “—Proposed Amendments to High-Yield Notes—Addition of the Guarantees” above for the identity of the additional entities that could become Affiliate Guarantors of the High-Yield Notes and, thus, become Affiliate Guarantors of the PLP Notes.

 

If the Amendments are adopted, there will be certain differences between the events of default and amendment provisions in the High-Yield Indentures and the Indentures governing the PLP Notes. For a description of those differences, please see “Risk Factors—Risks Related to the Consent Solicitation and the Guarantees—If the Amendments are adopted, certain events relating to Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition or the Guarantees will result in immediate acceleration of the High-Yield Notes or give holders of the High-Yield Notes a right to accelerate at a time when holders of the Other IMC Securities and the PLP Notes do not have such a right” and “Description of the Guarantees.”

 

Consequences to Non-Consenting Holders

 

If IMC or PLP, as the case may be, obtains and accepts the Requisite Consents with respect to the proposed Amendments to any series of the Securities and the supplemental indenture related to those proposed Amendments is executed and becomes operative, those proposed Amendments will be binding on each holder of such series of the Securities, regardless of whether or not that holder delivered its consent to such Amendments.

 

Expiration Time; Early Consent Premium Deadline; Extension; Amendment; Termination

 

The solicitation period for each series of the Securities will expire at 5:00 p.m., New York City time, on [            ], [            ], 2004, unless IMC or PLP extend this period as to any series of the Securities. The expiration of the solicitation period as to any series of the Securities, as may be extended by IMC or PLP, is referred to as the Expiration Time for such series.

 

The Early Consent Premium Deadline (i.e., the time by which holders of High-Yield Notes must deliver and not properly revoke a valid consent in order to be entitled to receive the Early Consent Premium) will be 5:00 p.m., New York City time, on [             ], [             ], 2004, unless extended by IMC in its sole discretion.

 

IMC and PLP reserve the right, in their sole discretion, to extend the expiration of the solicitation period with respect to any or all series of the Securities, and IMC reserves the right, in its sole discretion, to extend the Early Consent Premium Deadline with respect to any or all series of High-Yield Notes, on one or more occasions. If the solicitation period or Early Consent Premium Deadline is extended, IMC or PLP, as applicable, will give oral or written notice of the extension to the Information Agent and make a public announcement of this extension by no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled Expiration Time or Early Consent Premium Deadline, as the case may be.

 

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IMC and PLP also reserve the right, subject to applicable law, to, for any reason,

 

  Ÿ   terminate the consent solicitation with respect to any or all series of the Securities and not adopt the proposed Amendments with respect to any such series, or

 

  Ÿ   amend, modify or waive the terms of the consent solicitation with respect to any or all series of the Securities,

 

in each case by giving oral or written notice thereof to the Information Agent and following such notice as promptly as practicable by public announcement thereof.

 

If IMC and PLP make any public announcement in connection with the consent solicitation, they will do so in a manner reasonably designed to inform the holders of the applicable series of the Securities of the announced change on a timely basis. Without limiting the manner in which IMC and PLP may choose to make any public announcement, except as may be required by applicable law, they will have no obligation to publish, advertise or otherwise communicate any public announcement other than by issuing a release to the Dow Jones News Service.

 

Consent Procedures

 

Registered holders as of the record date desiring to deliver a consent should mail, hand deliver or send by overnight courier or facsimile, confirmed by physical delivery, their properly completed and duly executed letter of consent, which accompanies this prospectus, to the Information Agent at the address or facsimile number set forth on the back cover page of this prospectus in accordance with the instructions set forth in this prospectus and in the letter of consent. Please deliver the letters of consent to the Information Agent, and not to IMC, PLP, the Trustees or the Solicitation Agent.

 

Only registered holders (sometimes also referred to as holders of record), which are persons in whose name a Security is registered as of the record date, may execute and deliver a letter of consent. IMC and PLP expect that The Depository Trust Company, referred to as DTC, will authorize its participants, which include banks, brokers and other financial institutions and are referred to as DTC participants, to execute letters of consent with respect to the Securities they hold in the name of DTC or in the name of its nominee as if they were the registered holders of those Securities. Accordingly, for purposes of the consent solicitation, the term “holder” shall be deemed to include the DTC participants who held Securities in the name of DTC or in the name of its nominee as of the record date.

 

If you are a beneficial owner of Securities held through a DTC participant or another nominee (such as Euroclear or Clearstream), in order to consent to the Amendments, you must arrange for the DTC participant or other nominee that is the registered holder of your Securities to execute a letter of consent and deliver it to the Information Agent on your behalf.

 

Giving a consent by submitting a letter of consent will not affect a holder’s right to sell or transfer the Securities. All consents received by the Information Agent prior to the Expiration Time from a registered holder as of the record date of any Securities and not properly revoked will be effective notwithstanding any record transfer of those Securities subsequent to the record date.

 

All letters of consent that are properly completed, executed and delivered to the Information Agent, and not properly revoked in the manner described in this prospectus prior to the Expiration Time, will be given effect in accordance with the terms of those letters of consent. If a letter of consent is returned and is not marked as to whether the holder accepts or does not accept the Amendments, but is otherwise properly completed and executed, the holder will be deemed to have consented to the Amendments.

 

Holders are not required to tender or deliver the Securities to IMC, the applicable Trustee, PLP, the Solicitation Agent or the Information Agent at any time.

 

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Letters of consent must be executed in exactly the same manner as the registered holder’s name appears on the certificates representing the Securities or on the position listings of DTC, as applicable. If Securities to which a letter of consent relates are registered in the names of two or more joint holders, all of those holders must sign the letter of consent. If a letter of consent is signed by a trustee, partner, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person must so indicate when signing and must submit with the letter of consent appropriate evidence of authority to execute the letter of consent. In addition, if a letter of consent relates to less than the total principal amount of Securities or to only one series of Securities registered in the name of a holder, the holder must list the series and principal amount of the Securities as to which the consent is delivered. If no series or aggregate principal amount of the Securities as to which consent is delivered is specified, but the letter of consent is otherwise properly completed and signed, the holder will be deemed to have consented to the Amendments with respect to all Securities registered in the name of such holder. If Securities owned by one holder are registered in different names, separate letters of consent must be signed and delivered with respect to each registered Security. If a letter of consent is executed by a person other than the registered holder, then it must be accompanied by a proxy executed by the registered holder.

 

The registered ownership of the Securities as of the record date will be proved by the applicable Trustees, as registrar. The ownership of Securities held by DTC participants will be established by a DTC security position listing provided by DTC as of the record date. All questions as to the validity, form, eligibility (including time of receipt), acceptance and revocation of consents will be determined by IMC and PLP, in their discretion, which determination will be final and binding (subject only to any final review as may be prescribed by the applicable Trustee concerning proof of execution and of ownership). IMC and PLP reserve the right to reject any and all letters of consent determined by them not to be in proper form or properly delivered or the acceptance of which may, on the advice of counsel, be unlawful. IMC and PLP also reserve the right to waive any defects or irregularities with regard to any particular letter of consent or revocations thereof (subject only to any final review as may be prescribed by the applicable Trustee concerning proof of execution and of ownership), whether or not similar defects or irregularities are waived in the case of other holders. Unless waived, any defects or irregularities in connection with consents must be cured within such time as IMC and PLP determine. None of IMC, PLP, the Solicitation Agent, the Information Agent, the Trustees or any other person will be under any duty to give any notification of any defects or irregularities or waivers thereof or any notices of revocation, nor will any of them incur any liability for failure to give such notification. Deliveries of letters of consent or revocations thereof will not be deemed to have been made until any irregularities or defects therein have been cured or waived. IMC’s and PLP’s interpretation of the terms and conditions of the consent solicitation, including the instructions in the letter of consent, will be final and binding. Consents will be binding upon the successors, assigns, heirs, personal representatives, executors, administrators, trustees in bankruptcy and other legal representatives of the persons delivering consents and the beneficial owners of the Securities relating thereto.

 

Revocation of Consents

 

Each properly completed and executed consent received prior to the Expiration Time will be counted, notwithstanding any transfer of the Securities to which the consent relates, unless the procedure for revocation of consents described below has been followed. A consent to the Amendments by a holder of the Securities will bind that holder and every subsequent holder of those Securities or portion thereof, even if notation of the consent is not made on those Securities.

 

A holder of Securities as to which a consent has been given may revoke that consent as to those Securities or any portion of those Securities, in integral multiples of $1,000, by delivering a written notice of revocation or a changed letter of consent bearing a date later than the date of the prior letter of consent to the Information Agent at the address set forth on the back cover page of this prospectus. Consents delivered with respect to a series of the Securities may be revoked at any time prior to the

 

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earlier of (i) the Expiration Time or (ii) the time that the applicable supplemental indenture setting forth the Amendments with respect to such series is executed and becomes effective, referred to as the Effective Time. Consents that are validly delivered after the Effective Time, but prior to the Expiration Time, may not be revoked. The Effective Time for any series of the Securities will occur as soon as practicable after the Requisite Consents with respect to such series are received and each series of Securities may have its own Effective Time. Notwithstanding the execution and effectiveness of the applicable supplemental indenture at the Effective Time, the Amendments provided therein will not become operative and binding until the Operative Date.

 

The written notice of revocation or subsequently dated letter of consent must contain the name of the registered holder, the serial numbers of the Securities to which the revocation relates (if the Securities are in certificated form), the principal amount of the Securities to which the revocation relates and the signature of the holder.

 

To be effective, any revocation must be executed by the registered holder in the same manner as the holder’s name appears on the letter of consent to which the revocation relates. If a revocation is signed by a trustee, partner, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person must so indicate when signing and must submit with the revocation appropriate evidence of authority to execute the revocation. A revocation of a consent will only be effective as to the Securities listed therein and only if that revocation complies with the procedures for revocation of consents described in this prospectus.

 

If a consent has been given with respect to any Securities, that consent may be revoked only by the registered holder of those Securities as of the record date. A beneficial owner of Securities that is not the registered holder as of the record date may not revoke consents and must arrange for the registered holder to execute and deliver on its behalf a revocation of any consent given with respect to those Securities. Each registered holder, by executing a letter of consent, will, by execution thereof, be agreeing that it may revoke the related consent only in the manner specified in this prospectus.

 

A revocation of a consent may be rescinded only by the execution and delivery of a new letter of consent, in accordance with the procedures described in this prospectus.

 

Conditions to the Consent Solicitation

 

IMC and PLP will not accept properly executed, delivered and unrevoked consents with respect to any series of the Securities unless the conditions described below are satisfied. Even if those conditions are satisfied, as to any Approving Series (i) the supplemental indenture providing for the Amendments will not become operative, (ii) the Guarantees will not be issued and (iii) if applicable, the Consent Payments will not be made, in each case until the Operative Date, as described below in “—Operative Date of Amendments; Timing For Making of Consent Payments and Issuance of Guarantees.”

 

IMC or PLP, as the case may be, will not accept properly executed, delivered and unrevoked consents with respect to any series of the Securities unless:

 

  Ÿ   Requisite Consents for such series have been received (and have not been properly revoked) by IMC or PLP, as the case may be, prior to the Expiration Time for such series;

 

  Ÿ   Requisite Consents for EACH series of the High-Yield Notes have been received (and have not been properly revoked) by IMC prior to the Expiration Time for such series, which condition is referred to as the Approval of All High-Yield Series Condition; and

 

  Ÿ  

there is no law or regulation which would, and there is no injunction or action or other proceeding (pending or threatened) which could, make unlawful or invalid or enjoin the implementation of any proposed Amendment to such series, the Cargill transactions, the PLP

 

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merger, the issuance of the Guarantees with respect to such series or the entering into of the supplemental indenture with respect to such series, or which would question the legality or validity thereof.

 

Each of the conditions set forth above are for the sole benefit of IMC and PLP. In the event that any of the foregoing conditions are not satisfied with respect to any or all series of the Securities, IMC or PLP, as the case may be, may, among other things, in its sole discretion:

 

  Ÿ   allow the consent solicitation with respect to any such series to lapse;

 

  Ÿ   waive any of such conditions and accept all consents with respect to any such series that were validly delivered and not properly revoked;

 

  Ÿ   extend the Expiration Time of the solicitation period with respect to any such series and continue soliciting consents; or

 

  Ÿ   otherwise amend the terms of the consent solicitation for any such series.

 

In particular, without limitation of the options set forth in the previous paragraph, in the event that the Approval of All High-Yield Series Condition is not satisfied by the Expiration Time for any series of the Securities, IMC and PLP may, among other things, in their sole discretion and without the need to give any advance notice:

 

  Ÿ   (x) with respect to any (or all) Approving Series, waive the Approval of All High-Yield Series Condition, enter into supplemental indentures affecting only such Approving Series and, if applicable, make Consent Payments only in respect of such Approving Series and (y) with respect to any non-Approving Series, allow the consent solicitation to lapse or extend the Expiration Time and continue the consent solicitation for such other series;

 

  Ÿ   extend the Expiration Time for any series of the Securities; or

 

  Ÿ   allow the consent solicitation to expire as to all series of the Securities without waiving the Approval of All High-Yield Series Condition (in which case IMC and PLP would not execute any supplemental indentures or make any applicable Consent Payments with respect to any series of the Securities and the Affiliate Guarantors would not issue their respective Guarantees with respect to any series of the Securities).

 

Effective Time

 

IMC and PLP intend to execute a supplemental indenture setting forth the Amendments with respect to the applicable series of the Securities as soon as practicable after receiving the Requisite Consents for such series. The time of the execution of the supplemental indenture with respect to each series of the Securities is referred to as the Effective Time for such series. Each series of the Securities may have its own Effective Time. Notwithstanding the execution and effectiveness of the applicable supplemental indenture at the Effective Time, the Amendments provided therein will not become operative and binding until the Operative Date, as described below.

 

Operative Date of Amendments; Timing For Making of Consent Payments and Issuance of Guarantees

 

IMC and PLP intend to accept the Requisite Consents with respect to any series of the Securities and cause the Amendments thereto to become operative on the earliest date following the Expiration Time on which the conditions to the consent solicitation described in this prospectus are satisfied or waived for such series. Such date with respect to any series of the Securities is referred to as the Operative Date for that series. Each series of the Securities may have its own Operative Date.

 

IMC will make the Consent Payments only to eligible holders of any series of the High-Yield Notes on the Operative Date for the Amendments to that series. Similarly, Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition will only issue their respective Guarantees with respect to any series of the

 

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Securities on the Operative Date for that series. Please also see “—Offer of the Guarantees” and “—Consent Payments” below.

 

Offer of the Guarantees

 

Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition are offering to fully and unconditionally guarantee the obligations of IMC and PLP, as applicable, under each Approving Series. The Guarantees with respect to any series of the Securities will be issued only if the Operative Date for that series occurs. Please see “—Operative Date of Amendments; Timing For Making of Consent Payments and Issuance of Guarantees.” If the applicable conditions are satisfied or waived, Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition will issue their respective Guarantees to the holders of any Approving Series, including to any holders of those series that do not deliver consents.

 

The Guarantees will be in addition to the existing guarantees of the High-Yield Notes by certain subsidiaries of IMC. Please also see “—Proposed Amendments to High-Yield Notes—Addition of the Guarantees,” “Description of the Guarantees” and “Risk Factors—Risks Related to the Consent Solicitation and the Guarantees—If the Amendments are adopted, certain events relating to Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition or the Guarantees will result in immediate acceleration of the High-Yield Notes or give holders of the High-Yield Notes a right to accelerate at a time when holders of the Other IMC Securities and the PLP Notes do not have a such a right.”

 

Consent Payments

 

IMC is offering to pay a Consent Fee of $1.00 for each $1,000 aggregate principal amount of High-Yield Notes with respect to which a valid consent to the proposed Amendments to the High-Yield Notes has been delivered and not properly revoked on or prior to the Expiration Time and accepted by IMC.

 

IMC is also offering to pay an Early Consent Premium of $1.50 for each $1,000 principal amount of High-Yield Notes in respect of which a valid consent has been delivered and not properly revoked prior to the Early Consent Premium Deadline and accepted by IMC. Holders who receive the Early Consent Premium with respect to any High-Yield Notes will also receive the Consent Fee and the Guarantees with respect to those High-Yield Notes. The Consent Fee and the Early Consent Premium are referred to together as the Consent Payments.

The Consent Payments are being offered only to holders of the High-Yield Notes that deliver valid consents that are not properly revoked and are not being offered to any holder of any other series of the Securities.

 

If a holder of High-Yield Notes as of the record date delivers a consent and subsequently transfers its High-Yield Notes prior to the Expiration Time, any Consent Payments, to the extent made by IMC, with respect to those High-Yield Notes will be made to such holder as of the record date rather than to such holder’s transferee.

 

The Consent Payments will be made to eligible holders of the High-Yield Notes only if the Requisite Consents for EACH series of the High-Yield Notes are received (and not revoked) prior to the Expiration Time and the conditions to the consent solicitation set forth herein are satisfied or waived. Please see “—Conditions to the Consent Solicitation.” If all of the conditions to the payment of the Consent Payments are satisfied or waived, IMC will make the Consent Payments to the applicable holders of the High-Yield Notes on the applicable Operative Date. Please see “—Operative Date of Amendments; Timing For Making of Consent Payments and Issuance of Guarantees.”

 

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The Consent Payments will be made by IMC by deposit of funds with the Information Agent, which will act as agent for the holders of the High-Yield Notes for the purpose of receiving the Consent Payments from IMC and transmitting such payments to those holders.

 

The Solicitation Agent and the Information Agent

 

IMC and PLP have retained Goldman, Sachs & Co. to act as Solicitation Agent and Bondholder Communications Group to act as the Information Agent in connection with the consent solicitation, each of which will receive customary fees for its services. IMC and PLP have also agreed to reimburse each of the Solicitation Agent and the Information Agent for its reasonable out-of-pocket expenses. In addition, IMC and PLP have agreed to indemnify the Solicitation Agent against certain liabilities in connection with the consent solicitation, including liabilities under the federal securities laws.

 

Goldman, Sachs & Co. has, from time to time, provided, and may continue to provide in the future, investment banking and other services to each of IMC and Cargill and their respective affiliates, for which it has received or will receive customary compensation. Goldman, Sachs & Co. is acting as financial advisor to IMC with respect to the Cargill transactions and, in that connection, received a fee for such services at the time of completion of the Cargill transactions.

 

At any time, Goldman, Sachs & Co. may trade the Securities for its own account or for the accounts of its customers and, accordingly, may hold a long or short position in the Securities. In addition, Goldman, Sachs & Co. may contact holders of the Securities regarding the consent solicitation and may request brokers, dealers, commercial banks, trust companies and other nominees to forward this prospectus and related materials to beneficial owners of the Securities.

 

No fees or commissions have been or will be paid to any broker, dealer or other person for soliciting consents of the holders of the Securities pursuant to the consent solicitation, other than fees to the Solicitation Agent and the Information Agent as described above.

 

Neither the Solicitation Agent or the Information Agent assumes any responsibility for the accuracy or completeness of the information concerning IMC, PLP, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or the Cargill Fertilizer Businesses contained in this prospectus or for any failure by IMC, PLP, Mosaic, Mosaic Fertilizer or Mosaic Crop Nutrition to disclose events that may have occurred and may affect the significance or accuracy of such information.

 

You may direct questions concerning the terms of the consent solicitation to the Solicitation Agent at its address and telephone number set forth on the back cover page of this prospectus. Any questions or requests for assistance or for additional copies of this prospectus, the letter of consent or related documents may be directed to the Information Agent at its address and telephone number set forth on the back cover page of this prospectus. A holder of Securities may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the consent solicitation.

 

Please deliver the letters of consent to the Information Agent, and not to IMC, PLP, the Trustees or the Solicitation Agent.

 

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DESCRIPTION OF THE AMENDED SECURITIES

 

The following descriptions are of the Securities and Indentures, as amended by the applicable Amendments, and references to the Securities and Indentures in this section are references to the same, as amended by the Amendments pursuant to the applicable supplemental indentures. The following descriptions are qualified by reference to the full provisions of the Indentures, and the forms of supplemental indentures, which are exhibits to the registration statement of which this prospectus forms a part.

 

Description of High-Yield Notes

 

You can find the definitions of certain terms used in this description under the subheading “—Certain Definitions.” In addition, certain other terms used in this description are defined throughout this description. In this description, the phrase “IMC” refers only to Mosaic Global Holdings Inc. (formerly known as IMC Global Inc.) and not to any of its subsidiaries.

 

IMC issued $417.5 million aggregate principal amount of its 11.250% Senior Notes due 2011 (the “2011 Notes”) under an indenture, as amended or supplemented from time to time (the “2011 Indenture”), dated May 17, 2001, among IMC, the guarantors named therein and The Bank of New York, as trustee, $400.0 million aggregate principal amount of its 10.875% Senior Notes due 2008 (the “2008 Notes”) under an indenture, as amended or supplemented from time to time (the “2008 Indenture”), dated May 17, 2001, among IMC, the guarantors named therein and The Bank of New York, as trustee, and $400.0 million aggregate principal amount of its 10.875% Senior Notes due 2013 (the “2013 Notes” and, together with the 2011 Notes and the 2008 Notes, the “High-Yield Notes”) under an indenture, as amended or supplemented from time to time (the “2013 Indenture” and, together with the 2011 Indenture and the 2008 Indenture the “High-Yield Indentures”), dated August 1, 2003, among IMC, the guarantors named therein and BNY Midwest Trust Company, as trustee. The trustees for the High-Yield Indentures are collectively referred to as the “Trustee.”

 

The following description is a summary of the material provisions of the High-Yield Indentures, as each is amended by the applicable proposed Amendments (to be set forth in supplemental indentures) which will become operative upon satisfaction of the conditions set forth in this prospectus under the heading “Description of the Consent Solicitation—Conditions to the Consent Solicitation.” The Amendments with respect to any series of High-Yield Notes are anticipated to become operative on the earliest date following the Expiration Time on which the conditions to the consent solicitation described in this prospectus with respect to such series are satisfied or waived. In this section, the High-Yield Indentures, as amended by the Amendments, are referred to collectively as the “Indenture,” the High-Yield Notes are referred to collectively as the “Notes” and each series of High-Yield Notes is referred to as a “Series” of Notes.

 

The Amendments constitute material changes to the terms of the Notes. To better appreciate the scope of the Amendments, please read Annex A or Annex B to this prospectus, as applicable to you. These Annexes highlight the Amendments through markings of the substantive changes from the current terms of the Notes. Specifically, Annex A relates to the 2008 Notes and 2011 Notes and Annex B relates to the 2013 Notes.

 

The Notes will include those terms stated in the Indenture as it relates to the Notes and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).

 

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The summary below does not (and the marked versions of the current terms of the Notes contained in Annex A and Annex B to this prospectus do not) restate the Indenture in its entirety. You are urged to read the Indenture because it, and not this description (or the marked versions in Annexes A and B), defines your rights as holders of Notes. Copies of the Indenture will be available upon written request to the Information Agent and are exhibits to the registration statement of which this prospectus forms a part.

 

Brief Description of the Notes and the Note Guarantees

 

The Notes

 

The Notes will continue to be:

 

  Ÿ   general unsecured obligations of IMC;

 

  Ÿ   equal in right of payment to all existing and future unsecured obligations of IMC that are not, by their terms, expressly subordinated in right of payment to the Notes (including, with respect to any Series of Notes, Notes of each other Series);

 

  Ÿ   senior in right of payment to all future obligations of IMC that are, by their terms, expressly subordinated in right of payment to the Notes; and

 

  Ÿ   effectively junior in right of payment to all of IMC’s secured Indebtedness and other obligations to the extent of the value of the assets securing such Indebtedness and other obligations.

 

The Guarantees

 

The Notes will be guaranteed by each of the Subsidiary Guarantors and Affiliate Guarantors.

 

The Note Guarantee of each Guarantor will be:

 

  Ÿ   general unsecured obligations of such Guarantor;

 

  Ÿ   equal in right of payment to all existing and future unsecured obligations of such Guarantor that are not, by their terms, expressly subordinated in right of payment to such Note Guarantee;

 

  Ÿ   senior in right of payment to any future obligations of such Guarantor that are, by their terms, expressly subordinated in right of payment to the Note Guarantees; and

 

  Ÿ   effectively junior in right of payment to all of such Guarantor’s secured Indebtedness and other obligations to the extent of the value of the assets securing such Indebtedness and other obligations.

 

As of September 30, 2004, IMC and the Subsidiary Guarantors had indebtedness on IMC’s consolidated balance sheet of approximately $2,093.4 million, of which approximately $268.3 million was secured and none of which was subordinated. In addition, as of September 30, 2004, IMC had approximately $129.2 million of borrowing capacity under its revolving credit facilities. IMC and its Subsidiaries may also incur additional secured and unsecured debt from time to time.

 

As of August 31, 2004, the Affiliate Guarantors had approximately $13.8 million of indebtedness (excluding trade payables). The Affiliate Guarantors will not be subject to the covenants described herein other than their respective guarantees of the payment obligations under the Notes. As such, unless an Affiliate Guarantor becomes a Restricted Subsidiary of IMC or otherwise assumes the obligations of IMC or a Restricted Subsidiary under the Indenture pursuant to the “Merger, Consolidation and Sale of Assets” covenant, nothing contained in the Indenture will limit the amount of additional debt (secured or unsecured) that such Affiliate Guarantor may incur from time to time or limit its ability to sell or otherwise dispose of assets or pay dividends from time to time. See “Risk Factors—Risks Related to the Consent

 

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Solicitation and the Guarantees—The Affiliate Guarantors will not be subject to the covenants in the Indentures, other than the terms of the Guarantees” and “—The proposed Amendments would permit IMC and its subsidiaries to transfer their assets to Mosaic and its other subsidiaries under certain conditions, where they will no longer be subject to the covenants of the Indentures (including the High Yield Indentures).”

 

All of the Subsidiaries of IMC (other than IMC Phosphates MP Inc. and Pure Water Technology Holding Company) will continue to be “Restricted Subsidiaries” and will continue to be subject to the covenants described herein, provided, however, that the Phosphates Entities, to the extent they are Subsidiaries of IMC, will not be “Restricted Subsidiaries” of IMC. See “—Certain Covenants Before Fall-Away Event” and “—Certain Covenants Before and After Fall-Away Event.” However, under certain circumstances IMC will be permitted to designate certain of its additional Subsidiaries as “Unrestricted Subsidiaries.” Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture.

 

Principal, Maturity and Interest

 

The Indenture provides for the issuance of an unlimited amount of additional Notes of each Series having identical terms and conditions to the Notes of such Series (the “Additional Notes”), subject to compliance with the covenants contained in the Indenture, including without limitation, “—Certain Covenants Before Fall-Away Event—Limitation on Incurrence of Additional Indebtedness.” Additional Notes of any Series issued hereafter will be part of the same issue as the Notes of such Series and will vote on all matters with the Notes of such Series.

 

The 2008 Notes will mature on June 1, 2008, the 2011 Notes will mature on June 1, 2011 and the 2013 Notes will mature on August 1, 2013.

 

Notes are issued in denominations of $1,000 and integral multiples of $1,000.

 

Interest accrues on the 2008 Notes at the rate of 10.875% per annum and on the 2011 Notes at the rate of 11.250% per annum and in each case is payable semi-annually in arrears on June 1 and December 1. IMC makes each interest payment to the holders of record of the 2008 Notes and the 2011 Notes on the immediately preceding May 15 and November 15.

 

Interest on the 2013 Notes accrues at the rate of 10.875% per annum. Interest on the 2013 Notes is payable semi-annually in arrears on February 1 and August 1. IMC makes each interest payment to the holders of record of the 2013 Notes on the immediately preceding January 15 and July 15.

 

Interest on the Notes accrues from the date it was most recently paid. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months.

 

Note Guarantees

 

The Notes will be jointly and severally guaranteed by (a) the Subsidiary Guarantors and (b) the Affiliate Guarantors. Most of the IMC Domestic Subsidiaries will be Guarantors. See the definition of “Subsidiary Guarantors” and “Affiliate Guarantors” under “—Certain Definitions” for a list of the Guarantors. At September 30, 2004, the Subsidiary Guarantors (not including the assets of the IMC Phosphates Business, all or a portion of which may be contributed to the Phosphates Entities in a Phosphates Combination Transaction) accounted for approximately 32% of the total assets of IMC and its Subsidiaries. At September 30, 2004, the assets of the IMC Phosphates Business accounted for approximately 54% of the total assets of IMC and its Subsidiaries. At August 31, 2004, after giving pro forma effect to the Cargill transactions assuming they had happened on that date, the assets of the

 

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Cargill Fertilizer Businesses that will be held by the Affiliate Guarantors, when taken together with the assets of IMC and its Restricted Subsidiaries, accounted for approximately 91% of the consolidated total assets of Mosaic. However, the Indenture does not limit the Affiliate Guarantors’ ability to sell or otherwise dispose of assets.

 

The obligations of each Guarantor under its Note Guarantee will be limited as necessary to prevent that Note Guarantee from constituting a fraudulent conveyance under applicable law.

 

The Note Guarantee of any Guarantor will be automatically and unconditionally released and discharged upon any of the following:

 

  (i) in the case of a Subsidiary Guarantor only, any sale, exchange or transfer by IMC or any Restricted Subsidiary, to any Person that is not an Affiliate of IMC of at least 80% of the Capital Stock of, or all or substantially all the assets of, such Subsidiary Guarantor, which sale, exchange or transfer is made in accordance with the Indenture; provided that if IMC or any Restricted Subsidiary intends to comply with the “Limitation on Asset Sales” covenant by making an investment or expenditure in Replacement Assets, IMC or such Restricted Subsidiary must deliver to the Trustee a written agreement that it will make such investment or expenditure within the time frame set forth in the “Limitation on Asset Sales” covenant;

 

  (ii) the occurrence of the Fall-Away Event, but only if such Subsidiary Guarantor or Affiliate Guarantor, as the case may be, (x) is released from all of its guarantees of IMC’s obligations (other than as a result of payment under any such guarantee) and (y) is not otherwise, in the case of a Subsidiary Guarantor, an obligor under the Credit Agreement or, in the case of an Affiliate Guarantor, a guarantor under the Credit Agreement;

 

  (iii) in the case of a Subsidiary Guarantor only, the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the provisions of the Indenture;

 

  (iv) in the case of an Affiliate Guarantor (other than Mosaic) only, any sale, exchange or transfer by Mosaic or any Subsidiary of Mosaic, to any Person that is not an Affiliate of Mosaic of at least 80% of the Capital Stock of, or all or substantially all the assets of, such Affiliate Guarantor; or

 

  (v) in the case of Affiliate Guarantors, in connection with a Change of Control (of the type set forth in clause (1), (3) or (4) of the definition thereof), on the Change of Control Payment Date, provided that such Change of Control and the related Change of Control Offer are conducted in compliance with the Indenture.

 

Not all of IMC’s Subsidiaries guarantee the Notes. Non-guarantor Subsidiaries of IMC have no obligations to make payments to IMC or in respect of the Notes. In the event of a bankruptcy, liquidation or reorganization of any non-guarantor Subsidiary of IMC, the creditors of such Subsidiary (including trade creditors) will generally be entitled to payment of their claims from the assets of such Subsidiary before any assets are made available for distribution to IMC as a stockholder. After paying its own creditors, a non-guarantor Subsidiary of IMC may not have any remaining assets available for payment to IMC and as a result IMC may not have enough assets to be able to pay you as a holder of Notes. As a result, the Notes are effectively junior in right of payment to the obligations of non-guarantor Subsidiaries of IMC. At September 30, 2004, IMC’s non-guarantor Subsidiaries had no indebtedness owed to third parties.

 

Not all of Mosaic’s Subsidiaries will guarantee the Notes as Affiliate Guarantors. Non-guarantor Subsidiaries of Mosaic have no obligations to make payments to Mosaic in respect of its Note Guarantee. In the event of a bankruptcy, liquidation or reorganization of any non-guarantor Subsidiary of Mosaic, the creditors of such Subsidiary (including trade creditors) will generally be entitled to payment of their claims from the assets of such Subsidiary before any assets are made available for distribution to Mosaic as a

 

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stockholder. After paying its own creditors, a non-guarantor Subsidiary of Mosaic may not have any remaining assets available for payment to Mosaic and as a result Mosaic may not have enough assets to be able to make payments on its Note Guarantee. As a result, the Note Guarantee of Mosaic is effectively junior in right of payment to the obligations of its non-guarantor Subsidiaries. At August 31, 2004, the indebtedness (excluding trade payables) of the Cargill Fertilizer Businesses’ non-guarantor entities owed to third parties was approximately $27.3 million. In addition, Mosaic and its Subsidiaries will not be subject to the restrictive covenants of the Indenture and will therefore be free to incur additional indebtedness, sell assets and pay dividends.

 

Under the circumstances described in the “Limitation on Guarantees by Restricted Subsidiaries” covenant below, certain of IMC’s existing Restricted Subsidiaries and those Subsidiaries which may be acquired or organized in the future that currently do not guarantee the Notes may be required to guarantee the Notes in the future.

 

Optional Redemption

 

2008 Notes

 

The 2008 Notes are not redeemable at the option of IMC prior to maturity.

 

2011 Notes

 

The 2011 Notes are not redeemable at the option of IMC prior to June 1, 2006. On or after June 1, 2006, IMC may redeem all or a part of the 2011 Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest on the 2011 Notes to be redeemed, if any, to the redemption date, if redeemed during the 12-month period beginning on June 1 in the years indicated below:

 

Year


   Redemption
Price


 

2006

   105.625 %

2007

   103.750 %

2008

   101.875 %

2009 and thereafter

   100.000 %

 

2013 Notes

 

The 2013 Notes are not redeemable at the option of IMC prior to August 1, 2008. On or after August 1, 2008, IMC may redeem all or a part of the 2013 Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest on the 2013 Notes to be redeemed, if any, to the redemption date, if redeemed during the 12-month period beginning on August 1 in the years indicated below:

 

Year


   Redemption
Price


 

2008

   105.438 %

2009

   103.625 %

2010

   101.813 %

2011 and thereafter

   100.000 %

 

IMC may acquire Notes by means other than a redemption, whether by tender offer, open market purchases, negotiated transactions or otherwise, so long as such acquisition does not otherwise violate the terms of the Indenture.

 

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In the event that fewer than all of the Notes of any Series will be redeemed, the Notes of that Series will be selected for redemption by the Trustee, if the Notes of that Series are listed on a national securities exchange, in accordance with the rules of such exchange or, if the Notes of that Series are not so listed, either pro rata or by lot or such other method as the Trustee deems fair and appropriate.

 

Repurchase at the Option of Holders upon Change of Control

 

If a Change of Control occurs, each holder of Notes will have the right to require IMC to purchase all or any part (equal to $1,000 or an integral multiple thereof) of that holder’s Notes pursuant to the offer described below (the “Change of Control Offer”) and the other procedures required by the Indenture. In the Change of Control Offer, IMC will offer a payment (the “Change of Control Payment”) in cash equal to 101% of the aggregate principal amount of the Notes purchased, plus accrued and unpaid interest on such Notes, if any, to the date of purchase (the “Change of Control Payment Date”). Within 30 days following any Change of Control, IMC will mail a notice to each holder describing the transaction(s) that constitute the Change of Control and offering to purchase Notes on the Change of Control Payment Date specified in such notice, pursuant to the procedures required by the Indenture and described in such notice. IMC will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable to the purchase of the Notes as a result of a Change of Control.

 

On the Change of Control Payment Date, IMC will, to the extent lawful:

 

  Ÿ   accept for payment all Notes or portions of Notes properly tendered in the Change of Control Offer;

 

  Ÿ   deposit with the paying agent an amount equal to the Change of Control Payment for all Notes or portions of Notes tendered; and

 

  Ÿ   deliver or cause to be delivered to the Trustee the Notes so accepted together with an officers’ certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by IMC.

 

The paying agent will promptly mail to each holder of Notes tendered the Change of Control Payment for them, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any. Each such new Note will be in a principal amount of $1,000 or an integral multiple of $1,000.

 

Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the holders of Notes to require that IMC purchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.

 

IMC will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by IMC and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

 

Notwithstanding the foregoing, IMC will not be required to make a Change of Control Offer, as provided above, if, in connection with or in contemplation of any Change of Control, it has made an offer to purchase (an “Alternate Offer”) any and all Notes validly tendered at a cash price equal to or higher than the Change of Control Payment and has purchased all Notes properly tendered in accordance with the terms of such Alternate Offer.

 

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The definition of Change of Control includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the assets of IMC and its Restricted Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of Notes to require IMC to repurchase such Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of IMC and its Restricted Subsidiaries taken as a whole to another Person or group may be uncertain.

 

This covenant will not apply after the Fall-Away Event.

 

Selection and Notice

 

If less than all of the Notes of any Series are to be redeemed at any time, the Trustee will select Notes of that Series for redemption as follows:

 

  Ÿ   if the Notes of that Series are listed, in compliance with the requirements of the principal national securities exchange on which the Notes of that Series are listed; or

 

  Ÿ   if the Notes of that Series are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

 

No Notes of $1,000 or less will be redeemed in part. Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of Notes to be redeemed at its registered address.

 

If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption.

 

Fall-Away Event

 

After the Fall-Away Event, the provisions of the Indenture described under “—Repurchase at the Option of Holders upon Change of Control” and “—Certain Covenants Before Fall-Away Event” will not apply. The provisions of the Indenture described under “—Certain Covenants Before and After Fall-Away Event” will apply at all times so long as any Notes remain outstanding. In addition, the Note Guarantee of each Guarantor will be automatically and unconditionally released and discharged upon the occurrence of the Fall-Away Event, but only if such Subsidiary Guarantor or Affiliate Guarantor, as the case may be, (x) is released from all of its guarantees of IMC’s obligations (other than as a result of payment under any such guarantee) and (y) is not otherwise, in the case of a Subsidiary Guarantor, an obligor under the Credit Agreement or, in the case of an Affiliate Guarantor, a guarantor under the Credit Agreement.

 

The “Fall-Away Event” shall be deemed to have occurred when:

 

  (1) the Notes have Investment Grade Ratings from both Rating Agencies;

 

  (2) no Default has occurred and is continuing; and

 

  (3) IMC has delivered an officers’ certificate to the Trustee certifying that the conditions set forth in clauses (1) and (2) above are satisfied.

 

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Certain Covenants Before Fall-Away Event

 

Set forth below are summaries of certain covenants contained in the Indenture that will apply before the Fall-Away Event occurs.

 

Limitation on Incurrence of Additional Indebtedness.    IMC will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness other than Permitted Indebtedness; provided, however, that if no Default has occurred and is continuing at the time of or would occur as a consequence of the incurrence of any such Indebtedness, IMC or any Subsidiary Guarantor may incur Indebtedness (including Acquired Indebtedness), and Restricted Subsidiaries which are not Guarantors may incur Acquired Indebtedness, in each case if, after giving effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of IMC is at least 2.0 to 1.0 (the “Coverage Ratio Exception”).

 

IMC will not, directly or indirectly, in any event incur any Indebtedness that purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated to any other Indebtedness of IMC unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) subordinated to the Notes to the same extent and in the same manner as such Indebtedness is subordinated to such other Indebtedness of IMC.

 

No Subsidiary Guarantor will, directly or indirectly, in any event incur any Indebtedness that purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated to any other Indebtedness of such Subsidiary Guarantor unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) subordinated to the Note Guarantee of such Subsidiary Guarantor to the same extent and in the same manner as such Indebtedness is subordinated to such other Indebtedness of such Subsidiary Guarantor.

 

Notwithstanding any other provision in this covenant, the maximum amount of Indebtedness that IMC or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded as a result of fluctuations in the exchange rates of currencies. For purposes of determining compliance with this covenant:

 

(a) the outstanding principal amount of any particular Indebtedness shall be counted only once and any obligation arising under any guarantee, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded; and

 

(b) in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (3) through (19) of the definition of Permitted Indebtedness or is entitled to be incurred pursuant to the Coverage Ratio Exception, IMC shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this covenant (provided that all outstanding Indebtedness under the Credit Agreement on May 17, 2001 shall be deemed to have been incurred pursuant to clause (3) of the definition of Permitted Indebtedness) and may later reclassify such item into any one or more of the categories of Permitted Indebtedness described in clauses (3) through (19) of the definition of Permitted Indebtedness (provided that at the time of reclassification it meets the criteria in such category or categories).

 

This covenant will not apply after the Fall-Away Event.

 

Limitation on Restricted Payments.    IMC will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment if at the time of such Restricted Payment or immediately after giving effect thereto,

 

(A) a Default has occurred and is continuing;

 

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(B) IMC is not able to incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception; or

 

(C) the aggregate amount of Restricted Payments made after May 17, 2001, including the fair market value as reasonably determined in good faith by the Board of Directors or a senior officer of IMC of non-cash amounts constituting Restricted Payments, shall exceed the sum of, without duplication,

 

  (1) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of IMC from the beginning of the fiscal quarter in which May 17, 2001 occurred through the last day of the most recently ended fiscal quarter for which internal financial statements are available at the time of the Restricted Payment (treating such period as a single accounting period); plus

 

  (2) 100% of the aggregate net cash proceeds received by IMC from any Person (other than a Subsidiary of IMC) from the issuance and sale subsequent to May 17, 2001 of Qualified Capital Stock of IMC or from a contribution to its common equity capital (other than of the type set forth in clause (7) of the next succeeding paragraph); plus

 

  (3) the amount by which Indebtedness of IMC or any of its Restricted Subsidiaries incurred after May 17, 2001 is reduced on IMC’s consolidated balance sheet upon the conversion or exchange (other than by a Subsidiary of IMC) of such Indebtedness into Qualified Capital Stock plus the net proceeds (including the fair market value of assets other than cash) received by IMC from the issuance and sale of convertible or exchangeable Disqualified Capital Stock that has been converted into or exchanged for Qualified Capital Stock (other than Disqualified Capital Stock sold to a Subsidiary of IMC), in each case, less the amount of any cash, or the fair market value of any other assets, distributed by IMC or any of its Restricted Subsidiaries upon such conversion or exchange; plus

 

  (4) to the extent not otherwise included in the calculation of Consolidated Net Income for purposes of clause (1) above, 100% of the aggregate net proceeds (including the fair market value of assets other than cash) received by IMC or any of its Restricted Subsidiaries upon the sale or other disposition of any Investment made by IMC and its Restricted Subsidiaries since May 17, 2001; provided, however, that the foregoing sum shall not exceed, in the case of any investee, the aggregate amount of Investments previously made (and treated as a Restricted Payment) by IMC or any of its Restricted Subsidiaries in such investee subsequent to May 17, 2001; plus

 

  (5) to the extent not otherwise included in the calculation of Consolidated Net Income for purposes of clause (1) above, an amount equal to the sum of (x) the net reduction in Investments in Unrestricted Subsidiaries of IMC resulting from dividends, repayments of loans or advances or other transfers of assets, in each case to IMC or any of its Restricted Subsidiaries from Unrestricted Subsidiaries of IMC, and (y) the fair market value of the net assets of an Unrestricted Subsidiary of IMC at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary multiplied by IMC’s proportionate interest in such Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any Unrestricted Subsidiary, the aggregate amount of Investments previously made (and treated as a Restricted Payment) by IMC or any of its Restricted Subsidiaries in such Unrestricted Subsidiary subsequent to May 17, 2001.

 

Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit:

 

  (1) the payment of any dividend within 90 days after the date of declaration of such dividend if the dividend would have been permitted on the date of declaration;

 

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  (2) the acquisition of any Capital Stock of IMC, either (A) solely in exchange for Qualified Capital Stock of IMC or (B) if no Default has occurred and is continuing, through the application of the net proceeds of a substantially concurrent issuance and sale for cash (other than to a Subsidiary of IMC) of Qualified Capital Stock of IMC;

 

  (3) the acquisition of any Indebtedness of IMC or any Subsidiary Guarantor that is subordinate or junior in right of payment to the Notes or the Note Guarantee of such Subsidiary Guarantor, as the case may be, either (A) solely in exchange for Qualified Capital Stock of IMC or Refinancing Indebtedness in respect of such Indebtedness, or (B) if no Default has occurred and is continuing, through the application of net proceeds of a substantially concurrent sale or incurrence for cash (other than to a Subsidiary of IMC) of (x) Qualified Capital Stock of IMC or (y) Refinancing Indebtedness in respect of such Indebtedness;

 

  (4) if no Default has occurred and is continuing or would occur as a consequence thereof, the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Capital Stock) issued on or after May 17, 2001; provided that, at the time of such issuance, IMC, after giving effect to such issuance on a pro forma basis, would be able to incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception;

 

  (5) Restricted Payments by IMC and/or its Restricted Subsidiaries, on the one hand, to an Affiliate Guarantor, on the other, to fund or otherwise support ordinary course of business operations of the Affiliate Guarantors (including without limitation working capital requirements of the Affiliate Guarantors but excluding (x) the funding of any Mosaic Restricted Dividend, (y) the funding of an Investment by such Affiliate Guarantors in Subsidiaries of Mosaic that are not Affiliate Guarantors unless such Investment would be permitted to be made by IMC and/or its Restricted Subsidiaries pursuant to clause (6) below and (z) the funding of a payment or contribution to IMC or its Restricted Subsidiaries of the type set forth in clause (7) below);

 

  (6) (a) inter-company loans made by IMC and/or its Restricted Subsidiaries, on the one hand, to Subsidiaries of Mosaic that are not Affiliate Guarantors, on the other, to fund or otherwise support ordinary course of business operations of such Subsidiaries (including without limitation working capital requirements of such Subsidiaries but excluding (x) the funding of any Mosaic Restricted Dividend and (y) the funding of a payment or contribution to IMC or its Restricted Subsidiaries of the type set forth in clause (7) below) and (b) inter-company loans in an aggregate amount not to exceed $200.0 million at any time outstanding made by IMC and/or its Restricted Subsidiaries, on the one hand, to Mosaic and/or any of its Subsidiaries, on the other, to fund or otherwise support non-ordinary course of business transactions (including without limitation acquisitions and capital expenditures by Mosaic or its Subsidiaries but excluding (x) the funding of any Mosaic Restricted Dividend and (y) the funding of a payment or contribution to IMC or its Restricted Subsidiaries of the type set forth in clause (7) below), provided that in the case of any inter-company loan or series of related inter-company loans set forth in this clause (6) which in the aggregate exceed $5.0 million, the terms of such loans shall be no less favorable to IMC and its Restricted Subsidiaries, taken as a whole, as would be available to IMC and its Restricted Subsidiaries were it making such loans to a non-Affiliate at fair market value, as reasonably determined in good faith by the Board of Directors or a senior officer of IMC;

 

  (7)

Restricted Payments made substantially concurrently with or promptly following the receipt by IMC and/or its Restricted Subsidiaries of, and in an aggregate amount not exceeding the amount of, (i) any cash contribution from Mosaic and/or any of its Subsidiaries (other than IMC and/or its Restricted Subsidiaries), and/or (ii) any cash distribution (a) from any of Mosaic’s Subsidiaries (other than IMC and/or its Restricted Subsidiaries) and/or (b) from or

 

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in respect of any other Investment permitted by this clause (7), and/or (iii) any cash payment in whole or in part of any principal, interest or other amounts in respect of Indebtedness that is an Investment permitted by this clause (7);

 

  (8) repurchases of Capital Stock deemed to occur upon the exercise of stock options if such Capital Stock represents a portion of the exercise price thereof and repurchases of Capital Stock deemed to occur upon the withholding of a portion of the Capital Stock granted or awarded to an employee to pay for the taxes payable by such employee upon such grant or award; and

 

  (9) additional Restricted Payments in an aggregate amount not to exceed $60.0 million since the Operative Date.

 

Issuances of Capital Stock or equity contributions pursuant to any clause in this paragraph shall not increase the amount available for Restricted Payments under clause (C) of the immediately preceding paragraph.

 

Not later than the date of making any Restricted Payment pursuant to clause (C) of the second preceding paragraph, IMC shall deliver to the Trustee an officers’ certificate stating that such Restricted Payment complies with the Indenture and setting forth in reasonable detail the basis upon which the required calculations were computed.

 

This covenant will not apply after the Fall-Away Event.

 

Limitation on Asset Sales.    IMC will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

 

  (1) IMC or the applicable Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets that are sold or otherwise disposed of, as reasonably determined in good faith by the Board of Directors or a senior officer of IMC; and

 

  (2) at least 75% of the consideration received by IMC or the applicable Restricted Subsidiary from the Asset Sale is in the form of cash or Cash Equivalents; provided that in the case of the sale of all of the IMC Salt Business Unit, in the alternative, up to 35% of the consideration received by IMC or the applicable Restricted Subsidiary in the sale may be in the form of Capital Stock of the Person that will hold the IMC Salt Business Unit and Ogden following the Asset Sale if the remainder is in the form of cash or Cash Equivalents; provided, further, that the requirement in this clause (2) shall not apply in the case of the sale of all or any part of the IMC Chemicals Business Unit.

 

For the purposes of clause (2) above, the amount of any Indebtedness shown on the most recent applicable balance sheet of IMC or the applicable Restricted Subsidiary, other than Indebtedness that is by its terms subordinated to the Notes or any Note Guarantee, that is assumed by the transferee of any such assets will be deemed to be cash.

 

Additionally, IMC or such Restricted Subsidiary, as the case may be, must apply the Net Cash Proceeds from each Asset Sale to:

 

  (i) repay Indebtedness under the Credit Agreement;

 

  (ii) repay (including by purchase) secured obligations;

 

  (iii) repay (including by purchase) any Indebtedness of any Restricted Subsidiary that is not a Guarantor; and/or

 

  (iv)

make an investment in or expenditures for assets (including Capital Stock of any entity) that replace the assets that were the subject of the Asset Sale or in assets

 

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(including Capital Stock of any entity) that will be used in the business of IMC and its Subsidiaries as existing on May 17, 2001 or in businesses reasonably related thereto (“Replacement Assets”).

 

Any Net Cash Proceeds that IMC does not apply, or decides not to apply, in accordance with the preceding paragraph will constitute a “Net Proceeds Offer Amount.” The 366th day after an Asset Sale or any earlier date on which the Board of Directors of IMC determines not to apply the Net Cash Proceeds in accordance with the preceding paragraph is a “Net Proceeds Offer Trigger Date.” When the aggregate Net Proceeds Offer Amount is equal to or exceeds $25.0 million, IMC must make an offer to purchase (the “Net Proceeds Offer”) on a date that is not less than 30 days nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from

 

  Ÿ   all holders of Notes and

 

  Ÿ   all holders of other Indebtedness (“Other Indebtedness”) that

 

  -   is not, by its terms, expressly subordinated in right of payment to the Notes and

 

  -   contains provisions requiring that an offer to purchase such Other Indebtedness be made with the proceeds from the Asset Sale,

 

on a pro rata basis, the maximum principal amount of Notes and Other Indebtedness that may be purchased with the Net Proceeds Offer Amount. The offer price for Notes in any Net Proceeds Offer will be equal to 100% of the principal amount of the Notes to be purchased, plus any accrued and unpaid interest on such Notes, if any, to the date of purchase.

 

The following events will be deemed to constitute an Asset Sale and the Net Cash Proceeds for such Asset Sale must be applied in accordance with this covenant:

 

  Ÿ   in the event any non-cash consideration received by IMC or any Restricted Subsidiary of IMC in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), or

 

  Ÿ   in the event of the transfer of substantially all, but not all, of the assets of IMC and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under the “Merger, Consolidation and Sale of Assets” covenant, and as a result thereof IMC is no longer an obligor on the Notes, the successor corporation shall be deemed to have sold the assets of IMC and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such assets of IMC or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant.

 

Notwithstanding the provisions described in the immediately preceding paragraphs, IMC and its Restricted Subsidiaries may consummate an Asset Sale without complying with such provisions to the extent that

 

  Ÿ   at least 75% of the consideration for such Asset Sale constitutes Replacement Assets; and

 

  Ÿ   such Asset Sale is for fair market value.

 

Any cash consideration that does not constitute Replacement Assets that is received by IMC or any of its Restricted Subsidiaries in connection with any Asset Sale permitted under this paragraph will constitute Net Cash Proceeds and will be subject to the provisions described in the preceding paragraphs.

 

Each Net Proceeds Offer will be mailed to the record holders as shown on the register of holders within 30 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall

 

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comply with the procedures set forth in the Indenture. Upon receiving notice of the Net Proceeds Offer, holders may elect to tender their Notes in whole or in part in integral multiples of $1,000, as the case may be, in exchange for cash. To the extent holders properly tender Notes and Other Indebtedness in an amount exceeding the Net Proceeds Offer Amount, Notes and Other Indebtedness of tendering holders will be purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as may be required by law.

 

IMC will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the “Limitation on Asset Sales” covenant, IMC shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the “Limitation on Asset Sales” provisions of the Indenture by virtue thereof.

 

This covenant will not apply after the Fall-Away Event.

 

Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.    IMC will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary of IMC to:

 

  Ÿ   pay dividends or make any other distributions on or in respect of its Capital Stock to IMC or any of its Restricted Subsidiaries;

 

  Ÿ   make loans or advances or pay any Indebtedness or other obligations owed to IMC or any of its Restricted Subsidiaries; or

 

  Ÿ   transfer any of its assets to IMC or any of its Restricted Subsidiaries,

 

except for such encumbrances or restrictions existing under or by reason of:

 

  (1) applicable laws, rules and regulations;

 

  (2) any provision contained in the Indenture;

 

  (3) customary provisions of any contract or lease (other than a capital lease or a lease in a sale and leaseback transaction) governing a leasehold interest of IMC or any of its Restricted Subsidiaries;

 

  (4) any agreements existing at the time of acquisition of any Person or the assets of the Person so acquired (including agreements governing Acquired Indebtedness), which encumbrance or restriction is not applicable to any Person, or the assets of any Person, other than the Person or the assets or Capital Stock of the Person so acquired;

 

  (5) agreements existing on May 17, 2001 to the extent and in the manner such agreements are in effect on such date;

 

  (6) restrictions imposed by any agreement to sell assets permitted under the Indenture relating to such assets pending the closing of such sale;

 

  (7) Indebtedness or other contractual requirements of a Securitization Entity in connection with a Qualified Securitization Transaction; provided that such restrictions apply only to such Securitization Entity;

 

  (8) Liens incurred in accordance with the “Limitations on Liens and Sale and Leaseback Transactions” covenant;

 

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  (9) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

 

  (10) the Credit Agreement as in effect on May 17, 2001;

 

  (11) any restriction under an agreement governing Indebtedness of a Foreign Subsidiary incurred in compliance with the “Limitation on Incurrence of Additional Indebtedness” covenant;

 

  (12) customary restrictions in Capitalized Lease Obligations, security agreements or mortgages securing Indebtedness of IMC or any of its Restricted Subsidiaries to the extent such restrictions restrict the transfer of the property subject to such Capitalized Lease Obligations, security agreements or mortgages;

 

  (13) customary provisions in joint venture agreements and other similar agreements, in each case relating solely to the respective joint venture or similar entity or the equity interests therein; provided that this clause (13) shall not affect the limitation in clause (5) of the definition of “Permitted Investments”;

 

  (14) contracts entered into in the ordinary course of business, not relating to Indebtedness, and that do not, individually or in the aggregate, detract from the value of assets of IMC or any of its Restricted Subsidiaries in any manner material to IMC or any of its Restricted Subsidiaries;

 

  (15) purchase money obligations for property acquired in the ordinary course of business that impose encumbrances or restrictions on the ability of any Restricted Subsidiary of IMC to transfer the property so acquired to IMC or any of its other Restricted Subsidiaries; and

 

  (16) an agreement governing Indebtedness incurred to Refinance the Indebtedness incurred pursuant to an agreement referred to in clause (2), (4), (5), (10) or (15) above; provided, however, that the provisions relating to such encumbrance or restriction contained in any such Refinancing Indebtedness are not materially less favorable to the holders of Notes in the aggregate as reasonably determined by the Board of Directors or a senior officer of IMC in their good faith judgment than the provisions relating to such encumbrance or restriction contained in agreements referred to in such clause (2), (4), (5), (10) or (15).

 

The encumbrances and restrictions existing as of the date hereof under the Credit Agreement are described under “Description of Certain Other Indebtedness” and in IMC’s Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A, for the year ended December 31, 2003 under Note 11 to IMC’s consolidated financial statements.

 

In addition, IMC will use its commercially reasonable efforts, consistent with its contractual obligations and fiduciary duties to its joint ventures, not to permit any of its joint ventures that are not Restricted Subsidiaries of IMC (excluding any joint ventures of Mosaic or its Subsidiaries (other than IMC and its Subsidiaries) existing as of the Operative Date that on or after the Operative Date become joint ventures of IMC in accordance with the provisions of the Indenture (to the extent the restrictions set forth below exist on the Operative Date)) to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any restriction on the ability of such joint venture to:

 

  Ÿ   pay dividends or make any other distributions to IMC or any of its Restricted Subsidiaries on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits;

 

  Ÿ   make loans or advances or pay any Indebtedness owed to IMC or any of its Restricted Subsidiaries; or

 

  Ÿ   transfer any of its assets to IMC or any of its Restricted Subsidiaries,

 

except for those restrictions existing under or by reason of:

 

  (1) such joint venture’s joint venture agreement or its credit facility, or

 

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  (2) the restrictions described in clauses (1) through (16), as applicable, of the first sentence of this covenant (assuming that references therein to Restricted Subsidiary were references to such joint venture).

 

This covenant will not apply after the Fall-Away Event.

 

Limitation on Transactions with Affiliates.    IMC will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of related transactions with, or for the benefit of, any of its Affiliates (each, an “Affiliate Transaction”), other than

 

  Ÿ   Affiliate Transactions described in the last paragraph of this covenant; and

 

  Ÿ   Affiliate Transactions on terms that are no less favorable to IMC or the relevant Restricted Subsidiary than those terms that would reasonably have been obtained at that time in a comparable transaction by IMC or the relevant Restricted Subsidiary and an unrelated Person.

 

The Board of Directors or a senior officer of IMC must approve each Affiliate Transaction that involves aggregate payments or other assets with a fair market value in excess of $15.0 million. This approval must be evidenced by a board resolution that states that such board has determined that the transaction complies with the foregoing provisions.

 

If IMC or any Restricted Subsidiary of IMC enters into an Affiliate Transaction that involves aggregate payments or other assets with a fair market value in excess of $30.0 million, then prior to the consummation of that Affiliate Transaction, IMC must obtain a favorable opinion from an Independent Financial Advisor as to the fairness of that Affiliate Transaction to the holders of Notes from a financial point of view, and deliver that opinion to the Trustee.

 

The restrictions described in the preceding paragraphs of this covenant do not apply to:

 

  Ÿ   reasonable fees and compensation paid to and indemnity provided on behalf of officers, directors, employees or consultants of IMC or any of its Restricted Subsidiaries as reasonably determined in good faith by the Board of Directors or a senior officer of IMC;

 

  Ÿ   transactions exclusively between or among IMC and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries, provided such transactions are not otherwise prohibited by any provision contained in the Indenture;

 

  Ÿ   any agreement in effect on May 17, 2001 as in effect on such date or as thereafter amended in a manner not materially less favorable to the holders of Notes in the aggregate;

 

  Ÿ   transactions between IMC and/or its Restricted Subsidiaries, on the one hand, and the Affiliate Guarantors, on the other, in the ordinary course of business and otherwise in compliance with the terms of the Indenture;

 

  Ÿ   (a) transactions between IMC and/or its Restricted Subsidiaries, on the one hand, and Subsidiaries of Mosaic that are not Affiliate Guarantors, on the other, in the ordinary course of business and (b) transactions of the type set forth in clause (6) or (7) of the second paragraph of the “Limitation on Restricted Payments” covenant; provided that in the case of any such transaction or series of related transactions of the type set forth in (a) or (b) that involves aggregate payments or other assets with a fair market value in excess of $5.0 million, the terms of such transactions, taken as a whole, are fair to IMC and its Restricted Subsidiaries, taken as a whole, or are on terms no less favorable to IMC and its Restricted Subsidiaries, taken as a whole, than the terms which reasonably would have been obtained from an unrelated party, in each case, as is reasonably determined in good faith by the Board of Directors or a senior officer of IMC;

 

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  Ÿ   a Phosphates Combination Transaction;

 

  Ÿ   the issuance of a guarantee by IMC and/or any of its Restricted Subsidiaries with respect to any Indebtedness of any Affiliate Guarantor, to the extent permitted by the “Limitation on Incurrence of Additional Indebtedness” covenant;

 

  Ÿ   Permitted Investments and Restricted Payments made in compliance with the “Limitation on Restricted Payments” covenant;

 

  Ÿ   transactions between any of IMC or any of its Subsidiaries and any Securitization Entity in connection with a Qualified Securitization Transaction, in each case provided that such transactions are not otherwise prohibited by the Indenture; and

 

  Ÿ   any transaction of the type set forth in clause (7) or (8) of the definition of “Asset Sale.”

 

This covenant will not apply after the Fall-Away Event.

 

Limitation on Designations of Unrestricted Subsidiaries.    The Board of Directors of IMC may designate (a “Designation”) any Restricted Subsidiary of IMC (including any newly acquired or newly formed Subsidiary of IMC) to be an Unrestricted Subsidiary of IMC, so long as such Designation would not cause a Default.

 

For purposes of making the determination of whether such Designation would cause a Default, the portion of the fair market value of the net assets of any Subsidiary of IMC at the time that such Subsidiary is designated an Unrestricted Subsidiary that is represented by the interest of IMC and its Restricted Subsidiaries (excluding Permitted Investments) in such Subsidiary, in each case as determined in good faith by the Board of Directors of IMC, shall be deemed to be a Restricted Payment. Such Designation will only be permitted if such Restricted Payment would be permitted at such time.

 

The Board of Directors of IMC may revoke any Designation of a Subsidiary of IMC as an Unrestricted Subsidiary (a “Revocation”); provided that:

 

  (a) no Default has occurred and is continuing at the time of or after giving effect to such Revocation; and

 

  (b) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately after such Revocation would, if incurred at such time, have been permitted to be incurred (and shall be deemed to have been incurred) for all purposes of the Indenture.

 

Any such Designation or Revocation by the Board of Directors of IMC shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of IMC giving effect to such Designation or Revocation and an officers’ certificate certifying that such Designation or Revocation complied with the foregoing provisions.

 

Notwithstanding the foregoing, (a) upon consummation of a Phosphates Combination Transaction, the Phosphates Entities, and (b) upon consummation of a Restricted Payment solely (other than a diminimis contribution of capital) of the type set forth in clause (7) of the second paragraph of the “Limitation on Restricted Payments” covenant which results in a Person that is not a Subsidiary of IMC becoming a direct or indirect Subsidiary of IMC, such Person, shall be deemed to be designated as an Unrestricted Subsidiary of IMC without compliance by IMC with the provisions of this “Limitation on Designations of Unrestricted Subsidiaries” covenant.

 

This covenant will not apply after the Fall-Away Event.

 

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Conduct of Business.    IMC and its Restricted Subsidiaries (other than a Securitization Entity) will not engage in any businesses that are not the same, similar, related or ancillary to the businesses in which IMC and its Restricted Subsidiaries are engaged on May 17, 2001, except to the extent that after engaging in any new business, IMC and its Restricted Subsidiaries, taken as a whole, remain substantially engaged in similar lines of business as are conducted by them on May 17, 2001.

 

This covenant will not apply after the Fall-Away Event.

 

Certain Covenants Before and After Fall-Away Event

 

Set forth below are summaries of certain covenants contained in the Indenture that will apply at all times so long as any Notes remain outstanding.

 

Limitations on Liens and Sale and Leaseback Transactions.    (a) IMC will not, and will not permit any of its Restricted Subsidiaries to, incur any Liens of any kind other than Permitted Liens upon any Principal Property or any shares of stock or debt of any Restricted Subsidiary owned as of May 17, 2001 or thereafter acquired, unless all payments due under the Notes are secured on an equal and ratable basis with the obligation so secured until such time as such obligation is no longer secured by a Lien.

 

(b) IMC will not, and will not permit any of its Restricted Subsidiaries to, enter into any arrangement with any Person providing for the leasing by IMC or any Restricted Subsidiary of any Principal Property, except for temporary leases for a term, including any renewal, of not more than five years and except for leases between IMC and a Restricted Subsidiary or between Restricted Subsidiaries, which Principal Property has been or is to be sold or transferred by IMC or such Restricted Subsidiary to such Person (hereinafter, a “Sale and Leaseback Transaction”), unless either

 

  Ÿ   IMC or such Restricted Subsidiary would be entitled, in accordance with clause (a) (other than by operation of clause (c)), to incur Indebtedness secured by a Lien on such property without equally and ratably securing the Notes or

 

  Ÿ   IMC within 180 days after the effective date of the Sale and Leaseback Transaction applies an amount equal to the Value of such transaction to the voluntary retirement of its Funded Debt.

 

(c) Notwithstanding clauses (a) and (b), IMC and its Restricted Subsidiaries may incur Indebtedness which would otherwise be subject to the limitation of clause (a) without securing the Notes, or enter into a Sale and Leaseback Transaction which would otherwise be subject to the limitation of clause (b) without retiring Funded Debt, or enter into a combination of such transactions, if the sum of

 

  Ÿ   the principal amount of all such Indebtedness incurred after August 1, 1998 and which would otherwise be or have been prohibited by the limitations of clauses (a) and (b), plus

 

  Ÿ   the aggregate Value of all such Sale and Leaseback Transactions after August 1, 1998

 

does not at any such time exceed 10% of the consolidated total assets of IMC and its consolidated Subsidiaries as shown on the most recent audited consolidated balance sheet contained in the latest annual report to the stockholders of IMC.

 

Limitation on Guarantees by Restricted Subsidiaries.     IMC will not cause or permit any of its Restricted Subsidiaries, directly or indirectly, to guarantee any Indebtedness of IMC (“Guaranteed

 

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Indebtedness”), unless such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to the Indenture pursuant to which such Restricted Subsidiary guarantees, jointly and severally with all other Guarantors, on the same basis as such Guaranteed Indebtedness is guaranteed, all of IMC’s obligations with respect to the Notes. If the Guaranteed Indebtedness is (x) pari passu with the Notes, then the guarantee of such Guaranteed Indebtedness shall be pari passu with, or subordinated to, the Note Guarantee or (y) subordinated to the Notes, then the guarantee of such Guaranteed Indebtedness shall be subordinated to the Note Guarantee at least to the extent that the Guaranteed Indebtedness is subordinated to the Notes. IMC shall deliver to the Trustee an opinion of counsel that such supplemental indenture has been duly authorized, executed and delivered by such Restricted Subsidiary and, subject to customary exceptions, constitutes a valid and legally binding and enforceable obligation of such Restricted Subsidiary.

 

Reports to Holders.    Subject to the last paragraph of this covenant, whether or not required by the SEC, so long as any Notes are outstanding, IMC will furnish to the holders of Notes, within the time periods specified in the SEC’s rules and regulations, and make available to securities analysts and potential investors upon request:

 

  Ÿ   all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if Mosaic were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by Mosaic’s independent registered public accounting firm; and

 

  Ÿ   all current reports that would be required to be filed with the SEC on Form 8-K if Mosaic were required to file such reports.

 

In addition, whether or not required by the SEC, IMC will file a copy of all the information and reports referred to above with the SEC for public availability within the time periods specified in the SEC’s rules and regulations (unless the SEC will not accept such a filing) and make such information available to security analysts and prospective investors upon request after such filing.

 

After such time as Mosaic is released from its Note Guarantee pursuant to clause (v) of the third paragraph under “—Note Guarantees,” the information and reports to be furnished and filed pursuant to the preceding two paragraphs shall be information and reports with respect to IMC and there shall be no requirement to furnish or file any such information or reports with respect to Mosaic.

 

Merger, Consolidation and Sale of Assets.    (a) IMC will not, directly or indirectly, consolidate or merge with or into another Person (whether or not IMC is the surviving Person), or sell, assign, lease, transfer, convey or otherwise dispose of all or substantially all of IMC’s assets (determined on a consolidated basis for IMC and its Restricted Subsidiaries), in one or more related transactions, to another Person, unless:

 

  (1) either:

 

  Ÿ   IMC is the surviving Person or

 

  Ÿ  

the Person (the “Surviving Person”) formed by or surviving any such consolidation or merger (if other than IMC) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation or limited liability company organized or existing under the laws of the United States, any state thereof or the District of Columbia and expressly assumes all of the obligations of IMC under (i) the Notes and

 

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the Indenture pursuant to a supplemental indenture reasonably satisfactory to the Trustee and (ii) the Exchange and Registration Rights Agreement pursuant to a joinder agreement thereto;

 

  (2) immediately after such transaction no Default exists (including, without limitation, after giving effect to any Indebtedness incurred or Liens incurred or granted in connection with such transaction); and

 

  (3) IMC or the Surviving Person, as the case may be:

 

  Ÿ   will have a Consolidated Net Worth immediately after the transaction equal to at least 90% of the Consolidated Net Worth of IMC immediately preceding the transaction; and

 

  Ÿ   will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception;

 

provided that this clause (3) shall not apply after the Fall-Away Event.

 

(b) IMC will not cause or permit any Subsidiary Guarantor, directly or indirectly, to consolidate or merge with or into another Person (whether or not such Subsidiary Guarantor is the surviving Person) unless:

 

  (1) either:

 

  Ÿ   such Subsidiary Guarantor is the surviving Person or

 

  Ÿ   the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) expressly assumes all of the obligations of such Subsidiary Guarantor under (i) its Note Guarantee and the Indenture pursuant to a supplemental indenture reasonably satisfactory to the Trustee and (ii) the Exchange and Registration Rights Agreement pursuant to a joinder agreement thereto; and

 

  (2) immediately after such transaction no Default exists (including, without limitation, after giving effect to any Indebtedness incurred or Liens incurred or granted in connection with such transaction).

 

The requirements of this clause (b) shall not apply to (x) a consolidation or merger of any Subsidiary Guarantor with or into IMC or any other Subsidiary Guarantor so long as IMC or a Subsidiary Guarantor survives the consolidation or merger or (y) the sale by consolidation or merger of such Subsidiary Guarantor, which sale, if prior to the Fall-Away Event, is covered by and complies with the “Limitation on Asset Sales” covenant.

 

(c) IMC will deliver to the Trustee prior to the consummation of each proposed transaction an officers’ certificate that the conditions set forth above are satisfied and an opinion of counsel that the proposed transaction and the supplemental indenture, if any, comply with the Indenture.

 

Notwithstanding the foregoing, for purposes of this “Merger, Consolidation and Sale of Assets” covenant, any sale, assignment, lease, transfer, conveyance or other disposition of all or any portion of the assets or Capital Stock comprising the IMC Phosphates Business pursuant to a Phosphates Combination Transaction shall not be deemed to be a sale, assignment, lease, transfer, conveyance or other disposition of all or substantially all of IMC’s assets.

 

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Events of Default

 

Event of Default” is defined for all purposes of the Indenture and with respect to any Series of Notes as any one of the following events (whatever the reason for such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

  (1) IMC defaults in the payment of any installment of interest on any Note of that Series when and as the same becomes due and payable and such failure continues for a period of 30 days;

 

  (2) IMC defaults in the payment of the principal of any Note of that Series when and as the same becomes due and payable at maturity, upon redemption or otherwise;

 

  (3) IMC fails to perform or observe any of its covenants, conditions or agreements in the Indenture or in the Notes of that Series (other than a covenant, condition or agreement a default in whose performance or whose breach is elsewhere in this section specifically dealt with), and such failure continues for a period of 60 days after the date on which written notice of such Default has been given to IMC by the Trustee or to IMC and to the Trustee by the holders of not less than 25% of the principal amount of the Notes of that Series then outstanding under the Indenture;

 

  (4) IMC or any of its Subsidiaries defaults under any agreement governing its Indebtedness (other than Notes of that Series), if that default:

 

  Ÿ   is caused by the failure to pay at final maturity the principal amount of such Indebtedness after giving effect to any applicable grace periods; or

 

  Ÿ   results in the acceleration of the final stated maturity of such Indebtedness (including upon any event of the type described in clause (6) or (7) below);

 

and in each case, the aggregate principal amount of such Indebtedness unpaid or accelerated equals or exceeds $25.0 million and has not been discharged in full or such acceleration has not been rescinded or annulled within 30 days of such final maturity or acceleration;

 

  (5) IMC or any of its Restricted Subsidiaries fails to pay or otherwise cause to be discharged or stayed one or more judgments in an aggregate amount exceeding $25.0 million, which are not covered by indemnities or third party insurance as to which the Person giving such indemnity or such insurer has not disclaimed coverage, for a period of 60 days after such judgments become final and non-appealable;

 

  (6) a court having jurisdiction in the premises enters (x) a decree or order for relief in respect of IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (y) a decree or order adjudging IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period 90 consecutive days;

 

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(7)     Ÿ      IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries commences a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or any other case or proceeding to be adjudicated a bankrupt or insolvent; or

 

  Ÿ   IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries consents to the entry of a decree or order for relief in respect of IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries; or

 

  Ÿ   IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries files a petition or answer or consent seeking reorganization or relief under any applicable federal or state law; or

 

  Ÿ   IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries consents to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries or of any substantial part of their property; or

 

  Ÿ   IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries makes an assignment for the benefit of creditors; or

 

  Ÿ   IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries admits in writing its inability to pay its debts generally as they become due; or

 

  Ÿ   IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries corporate action in furtherance of any such action; or

 

  (8) with respect to any Series of Notes, the Note Guarantee of Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any Guarantor that is a Significant Subsidiary of IMC, Mosaic, Mosaic Fertilizer or Mosaic Crop Nutrition ceases to be in full force and effect (other than in accordance with the terms of such Note Guarantee and the Indenture) or is declared null and void and unenforceable or is found invalid or any Guarantor denies its liability under its Note Guarantee (other than by reason of release of a Guarantor from its Note Guarantee in accordance with the terms of the Indenture and the Note Guarantee).

 

If an Event of Default specified in clause (6) or (7) occurs and is continuing with respect to IMC, Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective Significant Subsidiaries that is a Guarantor, then the principal of and any accrued and unpaid interest on all of the Notes shall immediately become due and payable without any declaration or other act on the part of the Trustee or any Noteholder. If any other Events of Default with respect to any Series of Notes at the time outstanding occurs and is continuing, then, and in each and every such case, either the Trustee, by notice in writing to IMC, or the holders of not less than 25% of the principal amount of the Notes of that Series then outstanding, by notice in writing to IMC and the Trustee, may declare due and payable, if not already due and payable, the principal of and any accrued and unpaid interest on all of the Notes of that Series; and upon any such declaration all such amounts upon such Notes shall become and be immediately due and payable, anything in the Indenture or in such Notes to the contrary notwithstanding.

 

At any time after a declaration of acceleration with respect to the Notes of any Series as described in the preceding paragraph, the holders of a majority in principal amount of the Notes of that

 

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Series, on behalf of all holders of Notes of that Series, may rescind and cancel such declaration and its consequences

 

  Ÿ   if the rescission would not conflict with any judgment or decree;

 

  Ÿ   if all existing Events of Default with respect to Notes of that Series have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration;

 

  Ÿ   to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid;

 

  Ÿ   if IMC has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances; and

 

  Ÿ   in the event of the cure or waiver of an Event of Default of the type described in clause (6) or (7), the Trustee has received an officers’ certificate and an opinion of counsel that such Event of Default has been cured or waived.

 

No such rescission will affect any subsequent Default or impair any right consequent thereto.

 

Provided Notes of any Series are not then due and payable by reason of a declaration of acceleration, the holders of a majority in principal amount of the Notes of that Series at the time outstanding may on behalf of the holders of all the Notes of that Series waive any past Default with respect to Notes of that Series and its consequences by providing written notice thereof to IMC and the Trustee, except a Default (1) in the payment of interest on or the principal of any Note of that Series or (2) in respect of a covenant or provision hereof which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Note of that Series affected. In the case of any such waiver, IMC, the Trustee and the holders of the Notes of that Series will be restored to their former positions and rights under the Indenture, respectively; provided, that no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

 

The holders of a majority in principal amount of the Notes of any Series then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any power or trust conferred upon the Trustee under the Indenture with respect to the Notes of that Series; provided, however, that subject to the provisions of the Indenture, the Trustee shall have the right to decline to follow any such direction if the Trustee, advised by counsel, determines that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith shall by responsible officers determine that the action or proceeding so directed would involve the Trustee in liability or that the Trustee is not satisfactorily indemnified from the costs thereof.

 

No holder of any Note of any Series will have the right to pursue a remedy with respect to the Indenture or the Notes of that Series unless

 

  Ÿ   such holder gives to the Trustee notice of a continuing Event of Default with respect to Notes of that Series;

 

  Ÿ   the holders of at least 25% in principal amount of the Notes of that Series make a request to the Trustee to pursue the remedy and such holders offer to the Trustee security or indemnity satisfactory to the Trustee in its sole discretion against any loss, liability or expense;

 

  Ÿ   the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and

 

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  Ÿ   the holders of a majority in principal amount of the Notes of that Series have not given the Trustee a direction inconsistent with such request within such 60-day period.

 

A Noteholder may not use the Indenture to prejudice the rights of another Noteholder or to obtain a preference or priority over another Noteholder.

 

Notwithstanding any other provision of the Indenture, the right of any holder of a Note to receive payment of principal of and interest on the Note on or after the respective due dates expressed in the Note, or to bring suit for the enforcement of any such payment on or after such respective dates, may not be impaired or affected without the consent of the holder.

 

The Indenture requires IMC to deliver to the Trustee, within 15 days after the occurrence thereof, an officers’ certificate detailing any Default of which it is aware, its status and what action IMC is taking or proposes to take with respect to such Default.

 

If a Default occurs with respect to any Notes of any Series and is continuing and if it is known to the Trustee, the Trustee will give to each holder of Notes of that Series a notice of the Default within 90 days after it occurs in the manner and to the extent provided in the Trust Indenture Act and otherwise as provided in the Indenture. Except in the case of a Default in payment of the principal of or interest on any Note (including payments pursuant to a redemption or repurchase of the Notes pursuant to the provisions of the Indenture), the Trustee may withhold the notice if and so long as a committee of its responsible officers in good faith determines that withholding the notice is in the interests of Noteholders.

 

Legal Defeasance and Covenant Defeasance

 

IMC may, at its option and at any time, elect to have its obligations and the obligations of the Guarantors discharged with respect to the outstanding Notes of any Series (“legal defeasance”). Legal defeasance with respect to any Series of Notes means that IMC will be deemed to have paid and discharged the entire indebtedness represented by the outstanding Notes of that Series, except for:

 

  Ÿ   the rights of holders to receive payments in respect of the principal of, premium, if any, and interest on the Notes of that Series when such payments are due from the trust fund referred to below;

 

  Ÿ   IMC’s obligations with respect to the Notes of that Series concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payments;

 

  Ÿ   the rights, powers, trust, duties and immunities of the Trustee under the Indenture governing that Series and IMC’s obligations in connection therewith; and

 

  Ÿ   the legal defeasance provisions of the Indenture for the Notes of that Series.

 

In addition, IMC may, at its option and at any time, elect to have the obligations of IMC released with respect to certain of its covenants in the Indenture governing the Notes of any Series (“covenant defeasance”) and will be absolved from liability thereafter for failing to comply with such obligations with respect to the Notes of that Series. In the event covenant defeasance with respect to any Series of Notes occurs, certain events (not including non-payment, bankruptcy, receivership, reorganization and insolvency events) described under “—Events of Default” will no longer constitute an Event of Default with respect to the Notes of that Series.

 

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IMC may exercise its legal defeasance option or its covenant defeasance option with Notes of any Series only if the following conditions are satisfied:

 

(a) (1) IMC has irrevocably deposited or caused to be deposited in trust for the benefit of the holders Notes of that Series with the Trustee or a paying agent or a trustee satisfactory to the Trustee and IMC, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee and any such paying agent,

 

  Ÿ   money or Eligible Obligations in an amount sufficient, or

 

  Ÿ   U.S. Government Obligations that shall be payable as to principal and interest in such amounts and at such times as are sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (without consideration of any reinvestment of such interest), or

 

  Ÿ   any combination thereof in an amount sufficient,

 

to pay the principal of and interest on the outstanding Notes of that Series on the dates such installments are due to redemption or Stated Maturity, (2) the trustee of the irrevocable trust has been irrevocably instructed to pay such money or the proceeds of such U.S. Government Obligations or Eligible Obligations to the Trustee and (3) the Trustee or paying agent shall have been irrevocably instructed in writing to apply the deposited money and the proceeds from U.S. Government Obligations or Eligible Obligations in accordance with the terms of the Indenture and the terms of the Notes of that Series to the payment of principal of and interest on the Notes of that Series;

 

(b) the deposit described in clause (a) will not result in a breach or violation of, or constitute a Default under, any other agreement or instrument to which IMC is a party or by which it is bound;

 

(c) no Default has occurred and is continuing (1) as of the date of such deposit or (2) insofar as clause (6) or (7) under “—Events of Default” is concerned at any time during the period ending on the 91st day after the date of such deposit or, if longer, ending on the day following the expiration of the longest preference period applicable to IMC in respect of such deposit (it being understood that the condition in this clause (2) is a condition subsequent and will not be deemed satisfied until the expiration of such period);

 

(d) IMC has paid or caused to be paid all sums currently due and payable by IMC under the Indenture with respect to that Series and under the Notes of that Series;

 

(e) such defeasance shall not cause or permit any Notes of that Series then listed on any national securities exchange to be delisted;

 

(f) IMC has delivered to the Trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent provided for in the Indenture relating to the termination by IMC of its obligations have been complied with;

 

(g) in the case of the legal defeasance option, IMC has delivered to the Trustee either (1) a ruling received from the Internal Revenue Service (the “IRS”) or (2) an opinion of recognized counsel who is not an employee of IMC to the effect that, in the case of an opinion, since the date of the Indenture, there has been a change in the applicable federal income tax law, and, in the case of either a ruling or an opinion, that the holders of the Notes of that Series will not recognize income, gain or loss for federal income tax purposes as a result of IMC’s exercise of its legal defeasance option and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such legal defeasance option had not been exercised; and

 

(h) in the case of the covenant defeasance option, IMC has delivered to the Trustee either (1) a ruling received from the IRS or (2) an opinion of recognized counsel who is not an employee

 

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of IMC to the effect that the holders of the Notes of that Series will not recognize income, gain or loss for federal income tax purposes as a result of IMC’s exercise of its covenant defeasance option under this paragraph and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such covenant defeasance option had not been exercised.

 

Satisfaction and Discharge

 

Upon the request of IMC, the Indenture will cease to be of further effect with respect to Notes of any Series and the Trustee, at the expense of IMC, will execute proper instruments acknowledging satisfaction and discharge of that Series of Notes and the Indenture and the Note Guarantees with respect to that Series of Notes when:

 

  (1) either:

 

  (a) all the Notes of that Series theretofore authenticated and delivered (other than destroyed, lost or stolen Notes of that Series that have been replaced or paid and Notes of that Series that have been subject to defeasance as described under the caption “ —Legal Defeasance and Covenant Defeasance”) have been delivered to the Trustee for cancellation; or

 

  (b) all Notes of that Series not theretofore delivered to the Trustee for cancellation:

 

  Ÿ   have become due and payable;

 

  Ÿ   will become due and payable at maturity within one year; or

 

  Ÿ   are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and the expense, of IMC, and IMC has irrevocably deposited or caused to be deposited with the Trustee funds in trust for the purpose in an amount sufficient to pay and discharge the entire Indebtedness on the Notes of that Series not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any, on) and interest on the Notes of that Series to the date of such deposit (in case of Notes of that Series that have become due and payable) or to the Stated Maturity or redemption date, as the case may be;

 

  (2) IMC has paid or caused to be paid all sums payable under the Indenture by IMC; and

 

  (3) IMC has delivered to the Trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent provided in the Indenture relating to the satisfaction and discharge of the Notes of that Series and the Indenture and the Note Guarantees with respect to that Series of Notes have been complied with.

 

Modification of the Indenture

 

IMC, when authorized by a board resolution, and the Trustee may enter into an indenture or indentures supplemental thereto to amend the Indenture with respect to any Series or the Notes of that Series without prior notice to or the consent of any Noteholder:

 

  Ÿ   to cure any ambiguity, omission, defect or inconsistency;

 

  Ÿ   to comply with the “Merger, Consolidation and Sale of Assets” covenant;

 

  Ÿ   to comply with any requirements of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act as then in effect;

 

  Ÿ  

to provide for uncertificated Notes in addition to or in place of certificated Notes; provided, however, that the uncertificated Notes are issued in registered form for purposes of Section

 

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163(f) of the Internal Revenue Code of 1986, as amended, or in a manner such that the uncertificated Notes are described in Section 163(f)(2) of such Code;

 

  Ÿ   to make any change that does not materially adversely affect the legal rights of any holder of Notes of that Series under the Indenture as then in effect;

 

  Ÿ   to secure the Notes of that Series and to make intercreditor arrangements with respect to any such security, unless the incurrence of such obligations or the security thereof is prohibited by the Indenture;

 

  Ÿ   to evidence or to provide for a replacement Trustee; or

 

  Ÿ   to add to the covenants and agreements of IMC or the Guarantors for the benefit of all of the holders of all of the Notes of that Series and to surrender any right or power herein reserved to IMC or the Guarantors.

 

IMC, when authorized by a board resolution, and the Trustee may enter into one or more supplemental indentures to amend the Indenture or the Notes of a Series with the written consent of the holders of a majority of the principal amount of the then outstanding Notes of that Series. The holders of a majority in principal amount of the then outstanding Notes of a Series may waive compliance by IMC with any provision of the Indenture with respect to that Series or the Notes of that Series without prior notice to any other holder of Notes of that Series.

 

Notwithstanding the preceding paragraph, with respect to any Series, without the consent of each holder of Notes of that Series affected, an amendment or waiver may not:

 

  Ÿ   reduce the amount of Notes of that Series whose holders must consent to an amendment or waiver;

 

  Ÿ   reduce the rate of or change the time for payment of interest, including default interest, on any Note of that Series;

 

  Ÿ   reduce the principal of or change the Stated Maturity of any Note of that Series or alter the provisions with respect to redemption;

 

  Ÿ   make any Note of that Series payable in currency other than that stated in the Note;

 

  Ÿ   make any change in this paragraph;

 

  Ÿ   make any change in the Indenture that adversely affects the ranking of the Notes of that Series or any Note Guarantee relating to that Series;

 

  Ÿ   make any change in provisions of the Indenture relating to the rights of holders of Notes of that Series to receive payment of principal of and interest on such Notes or permitting holders of a majority in principal amount of such Notes to waive Defaults;

 

  Ÿ   after the obligation has arisen to make a Change of Control Offer or a Net Proceeds Offer with respect to that Series of Notes, amend, change or modify in any material respect the obligation of IMC to make and complete such Change of Control Offer or make and complete such Net Proceeds Offer; or

 

  Ÿ   release Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any Guarantor that is a Significant Subsidiary of IMC, Mosaic, Mosaic Fertilizer or Mosaic Crop Nutrition from its Note Guarantee with respect to that Series of Notes other than pursuant to the provisions described in the third paragraph under “—Note Guarantees.”

 

Governing Law

 

The Indenture provides that it, the Notes and the Note Guarantees are governed by, and construed in accordance with, the laws of the State of New York but without giving effect to applicable

 

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principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby.

 

The Trustee

 

The Indenture provides that, except during the continuance of an Event of Default, the Trustee thereunder will perform only such duties as are specifically set forth in such Indenture. During the existence of an Event of Default, the Trustee thereunder will exercise such rights and powers vested in it by such Indenture, and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

The Indenture and the provisions of the Trust Indenture Act contain certain limitations on the rights of the Trustee thereunder, should it become a creditor of IMC, to obtain payments of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. Subject to the Trust Indenture Act, the Trustee will be permitted to engage in other transactions; provided that if the Trustee acquires any conflicting interest as described in the Trust Indenture Act, it must eliminate such conflict or resign.

 

No Personal Liability of Directors, Officers, Employees and Stockholders

 

No past, present or future director, officer, employee, incorporator, agent or stockholder or Affiliate of IMC, as such, shall have any liability for any obligations of IMC under the Notes, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. No past, present or future director, officer, employee, incorporator, agent or stockholder or Affiliate of any of the Guarantors, as such, shall have any liability for any obligations of the Guarantors under the Note Guarantees, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes and Note Guarantees by accepting a Note and a Note Guarantee waives and releases all such liabilities. The waiver and release are part of the consideration for issuance of the Notes and the Note Guarantees. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

 

Certain Definitions

 

Set forth below is a summary of certain of the defined terms used in the Indenture. Reference is made to the Indenture for the full definition of all such terms, as well as any other terms used herein for which no definition is provided.

 

Acquired Indebtedness” means Indebtedness of a Person or any of its subsidiaries existing at the time such Person becomes a Restricted Subsidiary of IMC or at the time it merges or consolidates with IMC or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary of IMC or such acquisition, merger or consolidation, except for Indebtedness of a Person or any of its subsidiaries that is repaid at the time such Person becomes a Restricted Subsidiary of IMC or at the time it merges or consolidates with IMC or any of its Restricted Subsidiaries.

 

Affiliate” means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative of the foregoing.

 

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Affiliate Guarantor” means each of

 

  Ÿ   Mosaic,

 

  Ÿ   Mosaic Fertilizer,

 

  Ÿ   Mosaic Crop Nutrition,

 

  Ÿ   each intermediary holding company, if any, between Mosaic and Mosaic Fertilizer,

 

  Ÿ   each intermediary holding company, if any, between Mosaic and Mosaic Crop Nutrition,

 

  Ÿ   each Subsidiary of Mosaic, each Subsidiary of Mosaic Fertilizer and each Subsidiary of Mosaic Crop Nutrition (in each case, other than IMC and its Restricted Subsidiaries) that directly or indirectly guarantees Indebtedness under the Credit Agreement (provided that such Subsidiary’s Note Guarantee may be limited to the same extent as such Subsidiary’s guarantee under the Credit Agreement), and

 

  Ÿ   each Phosphates Entity (notwithstanding whether or not such entity is a Subsidiary of IMC).

 

Argus Lease” means, collectively, (1) Facility Lease-Undivided Interest (Searles Valley Trust 1996-A), dated as of July 15, 1996, between U.S. Trust Company of California, N.A., as Lessor, and North American Chemical Company, as Lessee, (2) Participation Agreement (Searles Valley Trust 1996-A), dated as of July 15, 1996, among North American Chemical Company, Harris Chemical Company North America, Inc., Phillip Morris Capital Corporation, and the U.S. Trust Company of California, N.A., (3) Facility Lease-Undivided Interest (Searles Valley Trust 1996-B), dated as of July 15, 1996, between U.S. Trust Company of California, N.A., as Lessor, and North American Chemical Company, as Lessee, and (4) Participation Agreement (Searles Valley Trust 1996-B), dated as of July 15, 1996, among North American Chemical Company, Harris Chemical Company North America, Inc., General Electric Capital Corporation, and the U.S. Trust Company of California, N.A.

 

asset” means any asset or property.

 

Asset Sale” means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer for value by IMC or any of its Restricted Subsidiaries (including any sale and leaseback transaction) to any Person other than IMC or any of its Restricted Subsidiaries of (x) any Capital Stock of any Restricted Subsidiary of IMC; or (y) any other assets of IMC or any of its Restricted Subsidiaries other than in the ordinary course of business; provided, however, that Asset Sales shall not include:

 

  (1) any transaction or series of related transactions involving the sale, issuance, conveyance, lease, assignment or other transfer of any asset or assets with an aggregate fair market value (as reasonably determined in good faith by the Board of Directors or a senior officer of IMC) of less than $25.0 million by IMC or any of its Restricted Subsidiaries,

 

  (2) sales of accounts receivable of the type specified in the definition of “Qualified Securitization Transaction” to a Securitization Entity for the fair market value thereof to the extent such Securitization Entity incurs Indebtedness specified by clause (14) of the definition of “Permitted Indebtedness,”

 

  (3) sales or grants of licenses to use the patents, trade secrets, know-how and other intellectual property of IMC or any of its Restricted Subsidiaries to the extent that such license does not prohibit IMC or any of its Restricted Subsidiaries from using the technologies licensed and does not require IMC or any of its Restricted Subsidiaries to pay any fees for any such use,

 

  (4) the sale, lease, conveyance, disposition or other transfer

 

  Ÿ   of all or substantially all of the assets of IMC as permitted under the “Merger, Consolidation and Sale of Assets” covenant,

 

  Ÿ   of any Capital Stock or other ownership interest in or assets of an Unrestricted Subsidiary or a Person which is not a Subsidiary,

 

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  Ÿ   pursuant to any foreclosure of assets or other remedy provided by applicable law by a creditor of IMC or any of its Subsidiaries with a Lien on such assets, which Lien is permitted under the Indenture,

 

  Ÿ   involving only Cash Equivalents or inventory in the ordinary course of business or obsolete equipment or

 

  Ÿ   including only the lease or sublease of any real or personal property in the ordinary course of business,

 

  (5) the consummation of any transaction covered by and effected in accordance with the terms of the “Limitation on Restricted Payments” covenant,

 

  (6) any sale, issuance, conveyance, lease or other transfer of assets or Capital Stock pursuant to a Phosphates Combination Transaction,

 

  (7) any transaction or series of related transactions involving the sale, issuance, conveyance, transfer, lease, assignment or other transfer of assets by IMC and/or its Restricted Subsidiaries to an Affiliate Guarantor, so long as such assets (a) are used in the ordinary course of business of the Affiliate Guarantors and (b) are not individually or in the aggregate material to IMC and its Restricted Subsidiaries on a consolidated basis, and

 

  (8) any transaction or series of related transactions involving the sale, issuance, conveyance, transfer, lease, assignment or other transfer of assets by IMC and/or its Restricted Subsidiaries, on the one hand, to Subsidiaries of Mosaic that are not Affiliate Guarantors, on the other, so long as (a) such assets are used in the ordinary course of business of Mosaic and its Subsidiaries, (b) such assets are not individually or in the aggregate material to IMC and its Restricted Subsidiaries on a consolidated basis and (c) the consideration received by IMC and/or its Restricted Subsidiaries for such sale, issuance, conveyance, transfer, lease, assignment or other transfer is not less than fair market value consideration for such assets as reasonably determined in good faith by the Board of Directors or a senior officer of IMC.

 

Board of Directors” means (1) as to any Person that is a corporation, the board of directors of such Person or any duly authorized committee thereof and (2) as to any other Person, the functionally comparable body of such Person or any duly authorized committee thereof.

 

Capital Stock” means:

 

  Ÿ   with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person and

 

  Ÿ   with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person.

 

Capitalized Lease Obligation” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation will be the capitalized amount of such obligation determined in accordance with such principles; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of penalty.

 

Cargill” means Cargill, Incorporated, a Delaware corporation, and any successor thereto.

 

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Cash Equivalents” means:

 

  (1) a marketable obligation, maturing within two years after issuance thereof, issued or guaranteed by the United States of America or an instrumentality or agency thereof;

 

  (2) a certificate of deposit or banker’s acceptance, maturing within one year after issuance thereof, issued by any lender under the Credit Agreement, or a U.S. national or state bank or trust company or a European, Canadian or Japanese bank, in each case having capital, surplus and undivided profits of at least $100.0 million and whose long-term unsecured debt has a rating of “A” or better by S&P, A2 or better by Moody’s or the equivalent rating by any other nationally recognized rating agency (provided that the aggregate face amount of all Investments in certificates of deposit or bankers’ acceptances issued by the principal offices of or branches of such European or Japanese banks located outside the United States shall not at any time exceed 33 1/3% of all Investments described in this definition);

 

  (3) open market commercial paper, maturing within 270 days after issuance thereof, which has a rating of A-2 or better by S&P, P-2 or better by Moody’s or the equivalent rating by any other nationally recognized rating agency;

 

  (4) repurchase agreements and reverse repurchase agreements with a term not in excess of one year with any financial institution which has been elected primary government securities dealers by the Federal Reserve Board or whose securities are rated AA- or better by S&P, Aa3 or better by Moody’s or the equivalent rating by any other nationally recognized rating agency relating to marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or instrumentality thereof and backed by the full faith and credit of the United States of America;

 

  (5) “money market” preferred stock maturing within six months after issuance thereof or municipal bonds issued by a corporation organized under the laws of any state of the United States, which has a rating of “A” or better by S&P or Moody’s or the equivalent rating by any other nationally recognized rating agency;

 

  (6) tax exempt floating rate option tender bonds backed by letters of credit issued by a national or state bank whose long-term unsecured debt has a rating of AA or better by S&P, Aa2 or better by Moody’s or the equivalent rating by any other nationally recognized rating agency; and

 

  (7) shares of any money market mutual fund rated at least AAA or the equivalent thereof by S&P, at least Aaa or the equivalent thereof by Moody’s or any other mutual fund at least 95% of whose assets consist of the type specified in clauses (1) through (6) above.

 

Change of Control” means the occurrence of the following:

 

  (1) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) (other than a Permitted Holder) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have “beneficial ownership” of all securities that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of securities representing 50% or more of the voting power of all Voting Stock of IMC; or

 

  (2) Continuing Directors shall cease to constitute at least a majority of the directors constituting the board of directors of IMC; or

 

  (3)

the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of IMC and its Restricted Subsidiaries taken as a whole to any “person” or “group”

 

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(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) other than a wholly owned Restricted Subsidiary of IMC or a Permitted Holder; provided, however, that for purposes of this clause (3), any sale, lease, transfer, conveyance or other disposition of all or any portion of the assets or Capital Stock comprising the IMC Phosphates Business pursuant to a Phosphates Combination Transaction shall not be deemed to be a sale, lease, transfer, conveyance of other disposition of all or substantially all of the assets of IMC and its Restricted Subsidiaries; or

 

  (4) IMC consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, IMC, in any such event pursuant to a transaction or series of related transactions in which immediately after the consummation thereof Persons beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing in the aggregate a majority of the total voting power of the Voting Stock of IMC immediately prior to such consummation, when taken together with the Permitted Holders, do not beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock (other that Disqualified Capital Stock) representing a majority of the total voting power of the Voting Stock of IMC or the surviving or transferee Person; or

 

  (5) the adoption by the stockholders of IMC of a plan or proposal for the liquidation or dissolution of IMC.

 

Commodity Agreement” means any commodity futures contract, commodity option or other similar agreement or arrangement entered into by IMC or any of its Restricted Subsidiaries.

 

Common Stock” of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person’s common stock, whether outstanding on the date of issuance of the Notes or issued thereafter, and includes, without limitation, all series and classes of such common stock.

 

Consolidated Adjusted Indenture EBITDA” means, with respect to any Person, for any period, the sum (without duplication) of

 

  (1) Consolidated Net Income, and

 

  (2) to the extent Consolidated Net Income has been reduced thereby,

 

  Ÿ   all income taxes of such Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP for such period (other than income taxes attributable to extraordinary gains or losses or taxes attributable to sales or dispositions outside the ordinary course of business if such gains, losses, sales or dispositions are excluded from the calculation of Consolidated Net Income),

 

  Ÿ   Consolidated Interest Expense,

 

  Ÿ   Consolidated Non-cash Charges less any non-cash items (other than accruals of revenues in accordance with GAAP) increasing Consolidated Net Income for such period, and

 

  Ÿ   fees and expenses related to any offering by IMC of its Capital Stock,

 

all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP.

 

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Consolidated Adjusted Indenture EBITDA is an adjusted EBITDA calculation that differs from net earnings determined in accordance with GAAP because net earnings is adjusted as specified in the definition of Consolidated Net Income and to add back the items referred to in (2) above. Consolidated Adjusted Indenture EBITDA is presented because it is an important component used in various contexts in the Indenture, including determining IMC’s compliance with the covenants under the Indenture. Consolidated Adjusted Indenture EBITDA is not necessarily comparable to the term EBITDA as referred to by other companies or to similarly titled measures used by IMC in other agreements (including IMC’s credit facility) or in IMC’s public disclosures because such measures may be calculated using different adjustments to net earnings than those required by the Indenture.

 

Consolidated Fixed Charge Coverage Ratio” means, with respect to any Person, the ratio of (x) Consolidated Adjusted Indenture EBITDA of such Person during the four full fiscal quarters for which financial statements are available (the “Four Quarter Period”) ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the “Transaction Date”) to (y) Consolidated Fixed Charges of such Person for the Four Quarter Period.

 

For purposes of this definition, “Consolidated Adjusted Indenture EBITDA” and “Consolidated Fixed Charges” shall be calculated after giving effect on a pro forma basis in accordance with Regulation S-X under the Exchange Act to the incurrence or repayment of any Indebtedness of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such calculation and any incurrence or repayment of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to working capital facilities, occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and prior to the Transaction Date, as if such incurrence or repayment, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period.

 

In addition, Investments (including any Designation of Unrestricted Subsidiaries), Revocations, acquisitions, dispositions, mergers and consolidations that have been made by IMC or any of its Restricted Subsidiaries during the Four Quarter Period or subsequent to the Four Quarter Period and on or prior to the Transaction Date shall be given effect on a pro forma basis in accordance with Regulation S-X under the Exchange Act, to the extent applicable, assuming that all such Investments, Revocations, acquisitions, dispositions, mergers and consolidations (and the reduction or increase of any associated Consolidated Interest Expense, and the change in Consolidated Adjusted Indenture EBITDA, resulting therefrom, including because of Pro Forma Cost Savings) had occurred on the first day of the Four Quarter Period. If, since the beginning of such period, any Person (that subsequently became a Restricted Subsidiary or was merged with or into IMC or any Restricted Subsidiary since the beginning of such period) shall have made any Investment, Revocation, acquisition, disposition, merger or consolidation that would have required adjustment pursuant to this definition, then the Consolidated Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, Revocation, acquisition, disposition, merger or consolidation had occurred at the beginning of the applicable Four Quarter Period.

 

If such Person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a Person other than IMC or a Restricted Subsidiary, the preceding paragraph will give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating “Consolidated Fixed Charges” for purposes of determining the denominator (but not the numerator) of this “Consolidated Fixed Charge Coverage Ratio,”

 

  (1)

interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to

 

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have accrued at a fixed rate per annum equal to the weighted average rate of interest during the Four Quarter Period;

 

  (2) if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four Quarter Period; and

 

  (3) notwithstanding clause (1) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Interest Swap Obligations, shall be deemed to accrue at the weighted average rate per annum during the Four Quarter Period resulting after giving effect to the operation of such agreements.

 

Consolidated Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of

 

  (1) Consolidated Interest Expense, plus

 

  (2) the product of

 

  Ÿ   the amount of all dividend payments on any series of Preferred Stock of such Person and its Restricted Subsidiaries (other than dividends paid in Qualified Capital Stock and other than dividends paid to such Person or to a Restricted Subsidiary of such Person) paid, accrued or scheduled to be paid or accrued during such period times

 

  Ÿ   a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated federal, state and local tax rate of such Person, expressed as a decimal.

 

Consolidated Interest Expense” means, with respect to any Person for any period, the sum of, without duplication:

 

  (1) the aggregate of the interest expense of such Person and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, including without limitation,

 

  Ÿ   any amortization of debt discount and amortization of deferred financing costs,

 

  Ÿ   the net costs under Interest Swap Obligations,

 

  Ÿ   all capitalized interest and

 

  Ÿ   the interest portion of any deferred payment obligation; and

 

  (2) the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP.

 

Consolidated Net Income” means, with respect to any Person (the “Referent Person”), for any period, the net income (or loss) of the Referent Person and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP; provided that there shall be excluded from such net income (loss), to the extent otherwise included therein, without duplication:

 

  (1) gains or losses on sales, transfers or other dispositions of assets other than in the ordinary course of business or abandonments or reserves relating thereto, and the related tax effect according to GAAP;

 

  (2) extraordinary gains or extraordinary losses determined in accordance with GAAP, and the related tax effect according to GAAP;

 

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  (3) the net income of any Person acquired in a “pooling of interests” transaction accrued prior to the date it becomes a Restricted Subsidiary of the Referent Person or is merged or consolidated with the Referent Person or any Restricted Subsidiary of the Referent Person;

 

  (4) the net income (but not loss) of any Restricted Subsidiary of the Referent Person to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is restricted, provided that restrictions under the Argus Lease shall be excluded from operation of this clause;

 

  (5) the net income or loss of any Person that is not a Restricted Subsidiary of the Referent Person except to the extent of cash dividends or distributions paid to the Referent Person or to a wholly owned Restricted Subsidiary of the Referent Person (subject, in the case of a dividend or distribution paid to a Restricted Subsidiary, to the limitation contained in clause (4) above);

 

  (6) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following May 17, 2001;

 

  (7) income or loss attributable to discontinued operations, other than the Specified Discontinued Businesses prior to the sale thereof;

 

  (8) in the case of a successor to the Referent Person by consolidation or merger or as a transferee of the Referent Person’s assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets;

 

  (9) gains or losses from the cumulative effect of any change in accounting principles; and

 

  (10) Non-Cash Asset Write-Downs;

 

provided, further, that Consolidated Net Income shall be reduced by the product of (x) the amount of all dividends on Designated Preferred Stock (other than dividends paid in Qualified Capital Stock) paid, accrued or scheduled to be paid or accrued during such period times (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated federal, state and local tax rate of IMC, expressed as a decimal.

 

Consolidated Net Worth” of any Person means the consolidated stockholders’ equity (or equivalent) of such Person, determined on a consolidated basis in accordance with GAAP, less (without duplication) amounts attributable to (1) Disqualified Capital Stock of such Person and (2) Unrestricted Subsidiaries.

 

Consolidated Non-cash Charges” means, with respect to any Person, for any period, the aggregate depreciation, depletion, amortization and other non-cash charges (other than Non-Cash Asset Write-Downs) of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges constituting an extraordinary item or loss or any such charge which requires an accrual of or a reserve for cash charges for any future period).

 

Continuing Directors” means, as of any date of determination, any member of the Board of Directors of IMC who:

 

  Ÿ   was a member of such Board of Directors on May 17, 2001; or

 

  Ÿ   was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such board at the time of such nomination or election.

 

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Coverage Ratio Exception” has the meaning set forth in the first paragraph of the “Limitation on Incurrence of Additional Indebtedness” covenant.

 

Credit Agreement” means one or more senior credit agreements, including the Credit Agreement dated as of May 17, 2001, as amended and restated as of February 21, 2003, and as further amended on June 4, 2003, June 20, 2003, March 26, 2004 and October 8, 2004, by and among IMC and certain of the IMC Domestic Subsidiaries, as borrowers, JP Morgan Chase Bank, as administrative agent and collateral agent, Goldman Sachs Credit Partners L.P., as syndication agent, and the lenders party thereto from time to time, including any notes, guarantees, collateral and security documents (including mortgages, pledge agreements and other security arrangements), instruments and agreements executed in connection therewith, and in each case as amended or Refinanced from time to time (for the avoidance of doubt, including a Refinancing thereof by Mosaic or its Subsidiaries with respect to which IMC and/or its Restricted Subsidiaries provides a direct or indirect guarantee and/or is a borrower thereunder), including any agreement or agreements extending the maturity of, Refinancing, replacing or otherwise restructuring (including increasing the amount of borrowings or other Indebtedness outstanding or available to be borrowed thereunder) all or any portion of the Indebtedness under such agreement, and any successor or replacement agreement or agreements with the same or any other agents, creditor, lender or group of creditors or lenders.

 

Currency Agreement” means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect IMC or any of its Restricted Subsidiaries against fluctuations in currency values.

 

Default” means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.

 

Designated Preferred Stock” means preferred stock that is designated as Designated Preferred Stock pursuant to an officers’ certificate executed by the principal executive officer and the principal financial officer of IMC on the issuance date thereof, the Net Cash Proceeds of which are excluded from the calculation set forth in clause (C) of the first paragraph of the “Limitation on Restricted Payments” covenant and are not used for purposes of clause (2) or (3) of the second paragraph thereof.

 

Disqualified Capital Stock” means any class or series of Capital Stock of any Person that by its terms or otherwise is:

 

  (1) required to be redeemed or is redeemable at the option of the holder of such class or series of Capital Stock at any time on or prior to the date that is 91 days after the stated maturity of the Notes; or

 

  (2) convertible into or exchangeable at the option of the holder thereof for Capital Stock referred to in clause (1) above or Indebtedness having a scheduled maturity on or prior to the date that is 91 days after the stated maturity of the Notes.

 

Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Capital Stock solely because the holders of the Capital Stock have the right to require the issuer thereof to repurchase such Capital Stock upon the occurrence of a Change of Control will not constitute Disqualified Capital Stock if the terms of such Capital Stock provide that the issuer may not repurchase or redeem any such Capital Stock pursuant to such provisions prior to IMC’s purchase of such Notes as are required to be purchased pursuant to the provisions of the Indenture as described under “—Repurchase at the Option of Holders upon Change of Control.”

 

Eligible Obligations” shall mean obligations as a result of the deposit of which (along with the simultaneous deposit, if any, of money or U.S. Government Obligations or both) the Notes will be rated

 

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in the highest generic long-term debt rating category assigned by one or more nationally recognized rating agencies to debt with respect to which the issuer thereof has been released from its obligations to the same extent that IMC has been released from its obligations under the Indenture pursuant to the defeasance provision of the Indenture.

 

Event of Default” has the meaning set forth in the first paragraph under “—Events of Default.”

 

Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

 

Exchange and Registration Rights Agreement” means each Exchange and Registration Rights Agreement among IMC, the guarantors named therein and the initial purchasers of Notes of any Series dated on or about the date such Notes (including, without limitation, Additional Notes) were initially issued in an offering exempt from registration under the Securities Act of 1933, as amended.

 

fair market value” means, with respect to any asset, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value shall be determined

 

  (a) by the Board of Directors of IMC acting reasonably and in good faith and shall be evidenced by a board resolution of the Board of Directors of IMC delivered to the Trustee or

 

  (b) if expressly permitted by a provision of the Indenture, by a senior officer of IMC, which senior officer shall be acting reasonably and in good faith and which determination shall be evidenced by an officer’s certificate delivered to the Trustee, except in the case of a transaction which in all material respects is exclusively between IMC and/or its Restricted Subsidiaries, on the one hand, and Mosaic and its Subsidiaries, on the other, in which case such officer’s certificate shall not be required.

 

Fall-Away Event” has the meaning set forth under “—Fall-Away Event.”

 

Foreign Subsidiary” means any Restricted Subsidiary of IMC organized under the laws of, and conducting a substantial portion of its business in, any jurisdiction other than the United States of America or any state thereof or the District of Columbia.

 

Four Quarter Period” has the meaning set forth in the definition of Consolidated Fixed Charge Coverage Ratio.

 

Funded Debt” means indebtedness (including the Notes) maturing by the terms thereof more than one year after the original creation thereof.

 

GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, consistently applied, that are applicable to the circumstances as of the date of determination; provided that, for purposes of calculating the Consolidated Net Worth of a Person (including all components thereof), “GAAP” shall mean such generally accepted accounting principles as described above in effect on August 1, 1998.

 

guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect, contingent or otherwise, of such Person (1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such Person (whether arising by virtue of

 

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partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise) or (2) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term “guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “guarantee” used as a verb has a corresponding meaning.

 

Guarantors” means collectively the Subsidiary Guarantors and the Affiliate Guarantors.

 

IMC Chemicals Business Unit” means the Chemicals business unit as such term is used within the meaning of IMC’s consolidated financial statements for the year ended December 31, 2000.

 

IMC Domestic Subsidiary” means any Restricted Subsidiary of IMC that is not a Foreign Subsidiary.

 

IMC Phosphates Assets” means assets of the IMC Phosphates Business.

 

“IMC Phosphates Business” means the PhosFeed business segment as such term is used within the meaning of IMC’s consolidated financial statements for the year ended December 31, 2003.

 

IMC Phosphates Guarantee shall have the meaning set forth in clause (3) of the definition of “Permitted Indebtedness.”

 

IMC Salt Business Unit” means the Salt business unit as such term is used within the meaning of IMC’s consolidated financial statements for the year ended December 31, 2000.

 

incur” means to create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment. The accretion of principal of a non-interest bearing or other discount security or the accrual of interest shall not be deemed the incurrence of Indebtedness.

 

Indebtedness” means with respect to any Person, without duplication,

 

  (1) all obligations of such Person for borrowed money;

 

  (2) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

  (3) all Capitalized Lease Obligations of such Person;

 

  (4) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business);

 

  (5) all obligations for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction;

 

  (6) guarantees in respect of Indebtedness referred to in clauses (1) through (5) above and clause (8) below;

 

  (7)

all obligations of any other Person of the type referred to in clauses (1) through (6) which are secured by any Lien on any asset of such Person (which, for the avoidance of doubt, includes without limitation, in the case of IMC and its Restricted Subsidiaries, all obligations of any securitization, receivables or other similar entity or facility of Mosaic or its

 

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Subsidiaries to which IMC or a Restricted Subsidiary of IMC contributes or otherwise transfers accounts receivable or other assets with respect to which a Lien securing obligations of Mosaic or its Subsidiaries is created or exists), the amount of such obligation being deemed to be the lesser of the fair market value of such asset or the amount of the obligation so secured;

 

  (8) all obligations under Currency Agreements, Interest Swap Agreements and Commodity Agreements of such Person;

 

  (9) all Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price; and

 

  (10) all Preferred Stock of any Subsidiary of such Person not held by such Person or any Restricted Subsidiary of such Person with the amount of Indebtedness represented by such Preferred Stock being equal to the liquidation value thereof.

 

For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock, such fair market value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock.

 

Notwithstanding the foregoing, “Indebtedness” shall not include (x) advances paid by customers in the ordinary course of business for services or products to be provided or delivered in the future or (y) deferred taxes.

 

Independent Financial Advisor” means a firm:

 

  Ÿ   which does not, and whose directors, officers or Affiliates do not, have a material financial interest in IMC and

 

  Ÿ   which, in the judgment of the Board of Directors of IMC, is otherwise independent and qualified to perform the task for which it is to be engaged.

 

Interest Swap Obligations” means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include, without limitation, interest rate swaps, caps, floors, collars and similar agreements.

 

Investment” means, with respect to any Person, any direct or indirect loan or other extension of credit (including, without limitation, a guarantee) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any Person. “Investment” excludes (1) extensions of trade credit by IMC and its Restricted Subsidiaries on commercially reasonable terms in accordance with normal trade practices of IMC or such Restricted Subsidiary, as the case may be, (2) any Restricted Payment described in clause (2) of the definition thereof and (3) any purchase or acquisition of Indebtedness of IMC or any of its Restricted Subsidiaries (other than any Restricted Payment described in clause (3) of the definition thereof). If IMC or any Restricted Subsidiary of IMC

 

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sells or otherwise disposes of any Common Stock of any direct or indirect Restricted Subsidiary of IMC such that, after giving effect to any such sale or disposition, IMC no longer owns, directly or indirectly, greater than 50% of the outstanding Common Stock of such Restricted Subsidiary, IMC will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Capital Stock of such Restricted Subsidiary not sold or disposed of.

 

Investment Grade Rating” means (1) with respect to S&P, any of the rating categories from and including AAA to and including BBB- and (2) with respect to Moody’s, any of the rating categories from and including Aaa to and including Baa3.

 

Liens” means any mortgage, pledge, security interest, encumbrance, lien, charge or adverse claim affecting title or resulting in any encumbrance against real or personal property or a security interest of any kind, including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof or any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar statute other than to reflect ownership by a third party of property leased to IMC or any of its Subsidiaries under a lease that is not in the nature of a conditional sale or title retention agreement.

 

Moodys” means Moody’s Investors Service, Inc. or any successor thereto.

 

Mosaic” means The Mosaic Company, a Delaware corporation, and any successor thereto.

 

“Mosaic Crop Nutrition” means Mosaic Crop Nutrition, LLC, a limited liability company organized under the laws of Delaware, and any successor thereto.

 

Mosaic Fertilizer” means Mosaic Fertilizer, LLC, a limited liability company organized under the laws of Delaware, and any successor thereto.

 

Mosaic Qualified Capital Stock” means Capital Stock of Mosaic that is not Disqualified Capital Stock.

 

Mosaic Restricted Dividend” means to

 

  (1) declare or pay any dividend or make any distribution on or in respect of Capital Stock of Mosaic or its Subsidiaries (other than wholly-owned Subsidiaries of Mosaic) to holders of such Capital Stock, other than dividends or distributions payable in Mosaic Qualified Capital Stock, or

 

  (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of Mosaic or its Subsidiaries (other than wholly-owned Subsidiaries of Mosaic) or any warrants, options or other rights to purchase or acquire any Capital Stock of Mosaic or such Subsidiaries.

 

Net Cash Proceeds” means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by IMC or any of its Restricted Subsidiaries from such Asset Sale, net of

 

  Ÿ   all out-of-pocket expenses and fees relating to such Asset Sale (including legal, accounting and investment banking fees and sales commissions),

 

  Ÿ   taxes paid or payable after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements,

 

  Ÿ   the decrease in proceeds from Qualified Securitization Transactions which results from such Asset Sale and

 

  Ÿ  

appropriate amounts provided by IMC or any Restricted Subsidiary as a reserve in accordance with GAAP against any liabilities associated with such Asset Sale and retained by IMC or any Restricted Subsidiary after such Asset Sale, including pension and other post-employment

 

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benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale.

 

Net Proceeds Offer” has the meaning set forth in the third paragraph of the “Limitation on Asset Sales” covenant.

 

Net Proceeds Offer Amount” has the meaning set forth in the third paragraph of the “Limitation on Asset Sales” covenant.

 

Non-Cash Asset Write-Down” means a non-cash write-down or write-off of an asset (other than any such write-down or write-off that requires an accrual of or a reserve for cash charges for any future period); provided that upon the sale of such asset such write-down or write-off shall not be taken into account in calculating Consolidated Net Income, to the extent the gain from any such sale would otherwise increase Consolidated Net Income.

 

Note Guarantee” means a guarantee of the Notes contemplated under “—Note Guarantees” or issued pursuant to the “Limitation on Guarantees by Restricted Subsidiaries” covenant.

 

Ogden” means the solar evaporation facility located in Ogden, Utah, as used within IMC’s consolidated financial statements for the year ended December 31, 2000.

 

Operative Date” means the date the Amendments become operative.

 

Other Indebtedness” has the meaning set forth in the third paragraph of the “Limitation on Asset Sales” covenant.

 

Permitted Holder means Cargill and its Subsidiaries.

 

Permitted Indebtedness” means, without duplication, each of the following:

 

  (1) Indebtedness of IMC and its Restricted Subsidiaries outstanding on May 17, 2001, including any such Indebtedness held by IMC or any of its Restricted Subsidiaries and including the 2008 Notes and the 2011 Notes issued on May 17, 2001 and any Note Guarantees with respect thereto;

 

  (2) the 2013 Notes issued on August 1, 2003 and any Note Guarantees with respect thereto;

 

  (3) Indebtedness incurred by IMC or any of its Restricted Subsidiaries pursuant to the Credit Agreement in an aggregate principal amount not to exceed the greater of:

 

  Ÿ   $850.0 million at any time outstanding, and

 

  Ÿ   the sum of 85% of the book value of accounts receivable and 50% of the book value of inventory of IMC and its Restricted Subsidiaries, calculated on a consolidated basis and in accordance with GAAP, less the amount of Indebtedness incurred and outstanding pursuant to clause (14) below.

 

Any portion of such amount may be incurred by IMC and/or any of its Restricted Subsidiaries (x) as a direct borrower and obligor, (y) pursuant to a direct or indirect guarantee of Indebtedness of an Affiliate Guarantor (such guarantee, an “IMC Phosphates Guarantee”) or (z) pursuant to both clause (x) and clause (y);

 

(4)      Ÿ      Interest Swap Obligations of IMC relating to Indebtedness of IMC or any of its Restricted Subsidiaries or Indebtedness that IMC or any of its Restricted Subsidiaries reasonably intends to incur within six months; and

 

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  Ÿ   Interest Swap Obligations of any Restricted Subsidiary of IMC relating to Indebtedness of such Restricted Subsidiary or Indebtedness that such Restricted Subsidiary reasonably intends to incur within six months;

 

provided any such Interest Swap Obligations will constitute “Permitted Indebtedness” only if they are entered into to protect IMC and its Restricted Subsidiaries from fluctuations in interest rates on Indebtedness permitted under the Indenture to the extent the notional principal amount of such Interest Swap Obligations, when incurred, do not exceed the principal amount of the Indebtedness to which such Interest Swap Obligations relate;

 

  (5) Indebtedness by IMC or any of its Restricted Subsidiaries under Commodity Agreements and Currency Agreements; provided that (x) such agreements are entered into to protect IMC and its Restricted Subsidiaries from fluctuations in the price of commodities actually at that time used in the ordinary course of business of IMC and its Restricted Subsidiaries, in the case of Commodity Agreements, and from fluctuations in currency exchange rates, in the case of Currency Agreements, and (y) in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements do not increase the Indebtedness of IMC and its Restricted Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;

 

  (6) Indebtedness of a Restricted Subsidiary of IMC owed to IMC or to a Restricted Subsidiary of IMC for so long as such Indebtedness is held by IMC or a Restricted Subsidiary of IMC, in each case subject to no Lien held by a Person other than IMC or a Restricted Subsidiary of IMC (other than Liens granted under the Credit Agreement); provided that if any Person other than IMC or a Restricted Subsidiary of IMC owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness (other than Liens granted under the Credit Agreement), the issuer of such Indebtedness shall be deemed to have incurred at such time Indebtedness not permitted by this clause (6);

 

  (7) Indebtedness of IMC to a Restricted Subsidiary for so long as such Indebtedness is held by a Restricted Subsidiary, in each case subject to no Lien (other than Liens granted under the Credit Agreement); provided that (x) any Indebtedness of IMC to any Restricted Subsidiary (other than Indebtedness subject to Liens granted under the Credit Agreement) is unsecured and subordinated, pursuant to a written agreement, to IMC’s obligations under the Notes and (y) if any Person other than a Restricted Subsidiary owns or holds any such Indebtedness or any Person holds a Lien in respect of such Indebtedness (other than Liens granted under the Credit Agreement), IMC shall be deemed to have incurred at such time Indebtedness not permitted by this clause (7);

 

  (8) Indebtedness of IMC or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within two business days of incurrence;

 

  (9) Indebtedness of IMC or any of its Restricted Subsidiaries represented by letters of credit for the account of IMC or such Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business;

 

  (10) Refinancing Indebtedness incurred to Refinance Indebtedness (x) incurred pursuant to the Coverage Ratio Exception or pursuant to clause (2) above or this clause (10) or (y) referred to in clause (1) above;

 

  (11)

indemnification, adjustment of purchase price or similar obligations of IMC or any of its Restricted Subsidiaries, in each case, incurred in connection with the disposition of any

 

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assets of IMC or any of its Restricted Subsidiaries (other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition); provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the net proceeds actually received by IMC and such Restricted Subsidiary from such disposition;

 

  (12) obligations of IMC or any of its Restricted Subsidiaries in respect of performance bonds and completion, guarantee, surety and similar bonds in the ordinary course of business;

 

  (13) Capitalized Lease Obligations and Purchase Money Indebtedness of IMC or any of its Restricted Subsidiaries, and Refinancing Indebtedness thereof, in an aggregate amount not to exceed $50.0 million at any time outstanding;

 

  (14) the incurrence by a Securitization Entity of Indebtedness in a Qualified Securitization Transaction that is not recourse (except for Standard Securitization Undertakings) to IMC or any of its Restricted Subsidiaries not to exceed $100 million at any time outstanding;

 

  (15) Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;

 

  (16) industrial revenue bonds or similar tax-exempt Indebtedness of IMC or any of its Restricted Subsidiaries incurred to finance the construction or improvement of operations of IMC and its Restricted Subsidiaries in an aggregate principal amount not to exceed $50.0 million at any time outstanding;

 

  (17) the guarantee by IMC or any of its Restricted Subsidiaries of Indebtedness incurred by IMC or any of its Restricted Subsidiaries that was permitted to be incurred by the Coverage Ratio Exception or another clause in this definition of Permitted Indebtedness; provided, that the “Limitation on Guarantees by Restricted Subsidiaries” covenant, to the extent applicable, has been complied with;

 

  (18) Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed $100.0 million at any time outstanding; and

 

  (19) additional Indebtedness of IMC or any of its Restricted Subsidiaries in an aggregate principal amount not to exceed $50.0 million at any time outstanding.

 

Permitted Investments” means:

 

  (1) Investments by IMC or any of its Restricted Subsidiaries in any Person that is or will become immediately after such Investment a Restricted Subsidiary of IMC or that will merge or consolidate into IMC or any of its Restricted Subsidiaries;

 

  (2) Investments in IMC by any of its Restricted Subsidiaries; provided that any Indebtedness evidencing such Investment (other than Indebtedness subject to Liens granted under the Credit Agreement) is unsecured and subordinated, pursuant to a written agreement, to IMC’s obligations with respect to the Notes;

 

  (3) investments in cash and Cash Equivalents;

 

  (4) loans and advances to employees and officers of IMC and its Restricted Subsidiaries in the ordinary course of business;

 

  (5) Investments in joint ventures not to exceed $25.0 million; provided that

 

  Ÿ   such joint ventures do not have any Indebtedness for borrowed money at any time on or after the date of such Investment (other than Indebtedness owing to the equity holders of such joint ventures),

 

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  Ÿ   the documentation governing any such joint venture does not contain a restriction on distributions to IMC or any of its Subsidiaries, and

 

  Ÿ   each such joint venture is engaged only in the businesses in which IMC and its Restricted Subsidiaries are engaged on May 17, 2001 and businesses similar, related or ancillary thereto;

 

  (6) Investments in securities received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any debtors of IMC or its Restricted Subsidiaries;

 

  (7) Investments received as consideration from an Asset Sale made in compliance with the “Limitation on Asset Sales” covenant;

 

  (8) Investments existing on May 17, 2001;

 

  (9) any Investment by IMC or a wholly owned Subsidiary of IMC in a Securitization Entity or any Investment by a Securitization Entity in any other Person in connection with a Qualified Securitization Transaction; provided that any Investment in a Securitization Entity is in the form of a purchase money note or an equity interest;

 

  (10) any Indebtedness of IMC to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by IMC from any such Subsidiary which assets are subsequently conveyed by IMC to a Securitization Entity in a Qualified Securitization Transaction;

 

  (11) Investments in Interest Swap Obligations, Commodity Agreements and Currency Agreements of the type described in clauses (4) and (5) of the definition of “Permitted Indebtedness”;

 

  (12) any deemed Investment in all or any portion of the IMC Chemicals Business Unit occurring by operation of the last sentence of the definition of “Investment”;

 

  (13) additional Investments in an aggregate amount not to exceed $50.0 million at any time outstanding;

 

  (14) IMC Phosphates Guarantees incurred pursuant to clause (3) of the definition of “Permitted Indebtedness”; and

 

  (15) Investments made as part of a Phosphates Combination Transaction.

 

Permitted Liens” means, with respect to any Person:

 

  (1) Liens existing as of August 1, 1998;

 

  (2) Liens on assets of, or any Capital Stock of or secured debt of, any Person existing at the time such Person becomes a Restricted Subsidiary of IMC or at the time such Person is merged into IMC or any of its Restricted Subsidiaries;

 

  (3) Liens in favor of IMC or any of its Restricted Subsidiaries;

 

  (4) Liens in favor of governmental bodies to secure progress or advance payments;

 

  (5) Liens securing industrial revenue or pollution control bonds;

 

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  (6) Liens on property to secure Indebtedness incurred for the purpose of (x) financing all or any part of the purchase price of such property incurred prior to, at the time of, or within 180 days after, the acquisition of such property or (y) financing all or any part of the cost of construction, improvement, development or expansion of any such property;

 

  (7) statutory liens or landlords’, carriers’, warehousemen’s, mechanics’, suppliers’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate proceedings, if a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor;

 

  (8) Liens on current assets of Restricted Subsidiaries securing Indebtedness of such Restricted Subsidiaries; and

 

  (9) any extensions, substitutions, replacements or renewals in whole or in part of a Lien (an “existing Lien”) enumerated in clauses (1) through (8) above; provided that (x) the Lien may not extend beyond the assets or Indebtedness subject to the existing Lien and (y) improvements and construction on such assets and the Indebtedness secured by the Lien may not exceed the Indebtedness secured at the time by the existing Lien.

 

Person” means an individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture or a governmental agency or political subdivision thereof.

 

Phosphates Combination Transaction” means any one or more transactions or series of related transactions involving (x) the sale, lease, conveyance, contribution and/or other transfer (a “contribution”) of assets or Capital Stock comprising all or any portion of the IMC Phosphates Business to an entity formed or to be formed (such entity, the “Phosphates Holding Company” and, together with its Subsidiaries, the “Phosphates Entities”) by IMC or a Subsidiary thereof and/or Mosaic or a Subsidiary thereof and/or (y) the merger or consolidation of a Subsidiary of IMC comprising all or any portion of the IMC Phosphates Business with or into any Phosphates Entity, provided that:

 

  Ÿ   IMC and its Restricted Subsidiaries, taken as a whole, shall receive consideration at the time of such contribution, merger or consolidation equal to not less than the fair market value of the assets or Capital Stock so contributed or the fair market value of the assets of the Subsidiary of IMC so merged or consolidated, as the case may be, as reasonably determined in good faith by the Board of Directors of IMC;

 

  Ÿ   IMC and its Restricted Subsidiaries, taken as a whole, shall at all times have voting and dividend participation and other equivalent rights in the Phosphates Entities (and its other Investments therein shall be) equivalent in all respects (as reasonably determined in good faith by the Board of Directors of IMC) to the voting and dividend participation and other equivalent rights and other Investments therein of Mosaic and its Subsidiaries (other than IMC and its Restricted Subsidiaries) (or any successor to Mosaic’s and its Subsidiaries’ interest in the Phosphates Entities), after taking into account the pro rata portion of assets of the Phosphates Entities contributed by IMC and its Subsidiaries, on the one hand, and Mosaic and its Subsidiaries (other than IMC and its Subsidiaries), on the other; and

 

  Ÿ   the Phosphates Holding Company and the other Phosphates Entities are each Affiliate Guarantors.

 

Phosphates Entities” has the meaning set forth in the definition of “Phosphates Combination Transaction.”

 

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Phosphates Holding Company” has the meaning set forth in the definition of “Phosphates Combination Transaction.”

 

Preferred Stock” of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.

 

Principal Property” means any manufacturing plant or warehouse owned or leased by IMC or any Subsidiary of IMC, whether owned or leased as of August 1, 1998 or thereafter, the gross book value of which exceeds 1% of Consolidated Net Worth, other than manufacturing plants and warehouses which the Board of Directors of IMC by resolution declares are not of material importance to the total business conducted by IMC and its Restricted Subsidiaries as an entirety and which, when taken together with all other plants and warehouses as to which such a declaration has been so made, is so declared by the Board of Directors of IMC to be not of material importance to the total business conducted by IMC and its Restricted Subsidiaries as an entirety.

 

Pro Forma Cost Savings” means, with respect to any period ended on any Transaction Date, the reductions in costs with respect to the applicable Four Quarter Period that are directly attributable to any Investments, acquisitions, dispositions, mergers, consolidations or discontinued operations and calculated on a basis that is consistent with Article 11 of Regulation S-X under the Securities Act.

 

Purchase Money Indebtedness” means Indebtedness of IMC or any of its Restricted Subsidiaries incurred for the purpose of financing all or any part of the purchase price, or the cost of construction or improvement, of any assets to be used in the ordinary course of business by IMC or any of its Restricted Subsidiaries; provided, however, that (1) the aggregate principal amount of such Indebtedness shall not exceed such purchase price or cost, (2) such Indebtedness shall be incurred no later than 180 days after the acquisition of such assets or completion of such construction or improvement and (3) such Indebtedness shall not be secured by any assets of IMC or any of its Restricted Subsidiaries other than the assets so acquired and improvements thereon.

 

Qualified Capital Stock” means any Capital Stock of IMC that is not Disqualified Capital Stock.

 

Qualified Securitization Transaction” means any transaction or series of transactions that may be entered into by IMC, any of its Restricted Subsidiaries or a Securitization Entity pursuant to which IMC or such Restricted Subsidiary or that Securitization Entity may, pursuant to customary terms, sell, convey or otherwise transfer to, or grant a security interest in for the benefit of, (1) a Securitization Entity or IMC or any of its Restricted Subsidiaries which subsequently transfers to a Securitization Entity (in the case of a transfer by IMC or such Restricted Subsidiary) and (2) any other Person (in the case of transfer by a Securitization Entity), any accounts receivable (whether now existing or arising or acquired in the future) of IMC or any of its Restricted Subsidiaries which arose in the ordinary course of business of IMC and its Restricted Subsidiaries, and any assets related thereto, including, without limitation, all collateral securing such accounts receivable, all contracts and contract rights and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets (including contract rights) which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable.

 

Rating Agency” means each of (a) S&P and (b) Moody’s.

 

Refinance” means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. “Refinanced” and “Refinancing” shall have correlative meanings.

 

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Refinancing Indebtedness” means, with respect to any Indebtedness, Indebtedness incurred to Refinance such Indebtedness; provided that:

 

  (1) the aggregate principal amount of the Indebtedness so incurred does not exceed the sum of (a) the aggregate principal amount of the Indebtedness being Refinanced as of the date of such proposed Refinancing plus (b) the amount of premium, if any, that would be payable upon the redemption of the Indebtedness being Refinanced under the terms of the instrument governing the Indebtedness being Refinanced if such redemption occurred, whether or not a premium in such amount is actually paid pursuant to such Refinancing, as of the date of such proposed Refinancing plus (c) the amount of reasonable expenses incurred by IMC in connection with such Refinancing;

 

  (2) the Weighted Average Life to Maturity of the Indebtedness so incurred at the date of such proposed Refinancing is not less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced as of the date of such proposed Refinancing; and

 

  (3) the final maturity of the Indebtedness so incurred is not earlier than the final maturity of the Indebtedness being Refinanced;

 

and provided, further, that (x) if the Indebtedness being Refinanced is subordinate or junior to the Notes, then such Refinancing Indebtedness shall be subordinate or junior to the Notes at least to the same extent and in the same manner as the Indebtedness being Refinanced and (y) if the obligors on the Indebtedness being Refinanced include only IMC and/or one or more Guarantors, the obligors on the Refinancing Indebtedness thereof shall not include any Person other than IMC and/or one or more Guarantors. For the avoidance of doubt, in the event that Mosaic or its Subsidiaries (other than IMC and its Restricted Subsidiaries) Refinances any Indebtedness of IMC or its Restricted Subsidiaries with Indebtedness of Mosaic or its Subsidiaries (other than IMC and its Restricted Subsidiaries), and IMC and/or its Restricted Subsidiaries directly or indirectly guarantee such Indebtedness of Mosaic and its Subsidiaries, such guarantee shall for purposes hereof be deemed to be Refinancing Indebtedness (to the extent the term “Refinancing Indebtedness” is used in the Indenture with respect to such Indebtedness) of such Indebtedness of IMC and/or its Restricted Subsidiaries provided such guarantee conforms with the provisions of this definition. For the avoidance of doubt, it is understood that a Refinancing of the Credit Agreement shall not be deemed to be Refinancing Indebtedness.

 

Restricted Payment” means to

 

  (1) declare or pay any dividend or make any distribution on or in respect of IMC’s Capital Stock to holders of such Capital Stock, other than dividends or distributions payable in Qualified Capital Stock of IMC,

 

  (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of IMC or any warrants, options or other rights to purchase or acquire any Capital Stock of IMC,

 

  (3) make any principal payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of IMC or any Guarantor that is subordinate or junior in right of payment to the Notes or the Note Guarantee of such Guarantor or

 

  (4) make any Investment other than Permitted Investments.

 

Restricted Subsidiary” of any Person means any Subsidiary of such Person which at the time of determination is not an Unrestricted Subsidiary; provided, however, that with respect to IMC after the Fall-Away Event, each Subsidiary of IMC (other than Phosphates Entities and other Persons deemed to be Unrestricted Subsidiaries pursuant to the second to last paragraph of the “Limitation on

 

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Designations of Unrestricted Subsidiaries” covenant (unless such Person has otherwise assumed the obligations of IMC or a Restricted Subsidiary under the Indenture pursuant to the “Merger, Consolidation and Sale of Assets” covenant)) shall be a Restricted Subsidiary of IMC.

 

Revocation” has the meaning set forth in the “Limitation on Designations of Unrestricted Subsidiaries” covenant.

 

S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor thereto.

 

Sale and Leaseback Transaction” has the meaning set forth in the second paragraph of the “Limitations on Liens and Sale and Leaseback Transactions” covenant.

 

Securitization Entity” means a wholly owned Subsidiary of IMC (or another Person (which, for the avoidance of doubt, includes Mosaic and its Subsidiaries) in which IMC or any Subsidiary of IMC makes an Investment and to which IMC or any Subsidiary of IMC transfers accounts receivable) which engages in no activities other than in connection with the financing of accounts receivable and which is designated by the Board of Directors of IMC (as provided below) as a Securitization Entity

 

  (1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which

 

  Ÿ   is guaranteed by IMC or any Subsidiary of IMC (other than the Securitization Entity) (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness)) pursuant to Standard Securitization Undertakings,

 

  Ÿ   is recourse to or obligates IMC or any Subsidiary of IMC (other than the Securitization Entity) in any way other than pursuant to Standard Securitization Undertakings or

 

  Ÿ   subjects any asset of IMC or any Subsidiary of IMC (other than the Securitization Entity), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings and other than any interest in the accounts receivable (whether in the form of an equity interest in such assets or subordinated indebtedness payable primarily from such financed assets) retained or acquired by IMC or any Subsidiary of IMC,

 

  (2) with which neither IMC nor any Subsidiary of IMC has any material contract, agreement, arrangement or understanding other than on terms no less favorable to IMC or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of IMC, other than fees payable in the ordinary course of business in connection with servicing receivables of such entity, and

 

  (3) to which neither IMC nor any Subsidiary of IMC has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

 

Any such designation by the Board of Directors of IMC shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of IMC giving effect to such designation and an officers’ certificate certifying that such designation complied with the foregoing conditions.

 

Significant Subsidiary” means any Restricted Subsidiary of IMC or any Subsidiary of Mosaic, Mosaic Fertilizer or Mosaic Crop Nutrition, as the case may be, which, at the date of determination, is a “significant subsidiary” (as such term is defined in Regulation S-X under the Exchange Act) of IMC, Mosaic, Mosaic Fertilizer or Mosaic Crop Nutrition, as the case may be.

 

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Specified Discontinued Businesses” means the IMC Chemicals Business Unit, the IMC Salt Business Unit and Ogden.

 

Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by IMC or any Subsidiary of IMC which are reasonably customary in an accounts receivable securitization transaction.

 

Stated Maturity” when used with respect to any security or any installment of interest thereon, means the date specified in such security as the fixed date on which the principal of such security or such installment of interest is due and payable.

 

Subsidiary” of any Person means (1) any Person of which more than 50% of the total voting power of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the Restricted Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or other Person in which such Person or one or more of the Restricted Subsidiaries of that Person or a combination thereof has the power to control by contract or otherwise the board of directors or equivalent governing body or otherwise controls such entity.

 

Subsidiary Guarantors” means (1) each of the following Restricted Subsidiaries of IMC:

 

FMRP Inc., a Delaware corporation;

Mosaic Canada ULC (formerly known as IMC Canada ULC), a Nova Scotia unlimited liability company;

Mosaic Chemical North America LLC (formerly known as IMC Chemical North America LLC), a Delaware limited liability company;

IMC Global Dutch Holdings B.V., a Netherlands corporation;

IMC Global Netherlands B.V., a Netherlands corporation;

Mosaic Global Operations Inc. (formerly known as IMC Global Operations Inc.), a Delaware corporation;

IMC Global Potash Holdings N.V., a Netherlands Antilles corporation;

Mosaic Phosphates Company (formerly known as IMC Phosphates Company), a Delaware general partnership;

Mosaic Potash Carlsbad Inc. (formerly known as IMC Potash Carlsbad Inc.), a Delaware corporation;

IMC Potash Colonsay N.V., a Netherlands Antilles corporation;

Mosaic Potash Colonsay ULC (formerly known as IMC Potash Colonsay ULC), a Nova Scotia unlimited liability company;

Mosaic Sulphur Holdings LLC (formerly known as IMC Sulphur Holdings LLC), a Delaware limited liability company;

Mosaic USA Holdings Inc. (formerly known as IMC USA Holdings Inc.), a Delaware corporation;

Mosaic USA LLC (formerly known as IMC USA Inc. LLC), a Delaware limited liability company;

KCL Holdings, Inc., a Delaware corporation;

Phosphate Acquisition Partners L.P. (the successor to Phosphate Resource Partners Limited Partnership), a Delaware limited partnership;

PRP-GP LLC, a Delaware limited liability company; and

The Vigoro Corporation, a Delaware corporation;

 

and (2) each other Restricted Subsidiary of IMC that issues a Note Guarantee pursuant to the “Limitation on Guarantees by Restricted Subsidiaries” covenant or otherwise, in each case, so long as the Note Guarantee of such Restricted Subsidiary is in full force and effect.

 

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Unrestricted Subsidiary” of any Person means:

 

  (1) for purposes of the “Limitations on Liens and Sale and Leaseback Transactions” covenant and related definitions only:

 

  Ÿ   any Subsidiary of IMC that at the time of determination has been, or is deemed to have been pursuant to the second to last paragraph of the “Limitation on Designations of Unrestricted Subsidiaries” covenant, designated an “Unrestricted Subsidiary” under the Indenture by the Board of Directors in the manner provided below, and

 

  Ÿ   any Subsidiary of such an “Unrestricted Subsidiary.”

 

The Board of Directors of IMC may designate any Subsidiary of IMC (including any newly acquired or newly formed Subsidiary) to be an “Unrestricted Subsidiary” for purposes of the “Limitations on Liens and Sale and Leaseback Transactions” covenant and related definitions unless such Subsidiary owns any Capital Stock of, or owns or holds any property of, IMC or any other Subsidiary of IMC that is not a Subsidiary of the Subsidiary so designated; provided, however, that (x) the Subsidiary to be so designated has total assets of $5,000 or less and (y) the following Subsidiaries may not be designated Unrestricted Subsidiaries: Mosaic Global Operations Inc. (formerly known as IMC Global Operations Inc.), a Delaware corporation; Mosaic Esterhazy Holdings Limited (formerly known as International Minerals & Chemical (Canada) Global Limited), a Canadian company; Mosaic Phosphates Company (formerly known as IMC Phosphates Company), a Delaware general partnership; and any intermediate holding company between any of the foregoing and IMC. Any such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the board resolutions giving effect to such designation and an officers’ certificate certifying that such designation complied with the foregoing provisions; and

 

  (2) for all other purposes of the Indenture:

 

  Ÿ   any Subsidiary of such Person that at the time of determination has been, or is deemed to have been pursuant to the second to last paragraph of the “Limitation on Designations of Unrestricted Subsidiaries” covenant, designated an Unrestricted Subsidiary, and has not been redesignated a Restricted Subsidiary, in accordance with the “Limitation on Designation of Unrestricted Subsidiaries” covenant; and

 

  Ÿ   any Subsidiary of such an Unrestricted Subsidiary.

 

U.S. Government Obligations” shall mean securities that are (1) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as full faith and credit obligation by the United States of America, that, in either case, are not callable or redeemable at the option of the issuer thereof and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligations or a specific payment of interest on or principal of any such U.S. Government Obligations held by such custodian for the account of the holder of a depository receipt; provided, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt for any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of interest on or principal of the U.S. Government Obligations evidenced by such depository receipt.

 

Value” means an amount equal to the greater of the net proceeds of the sale or transfer of the property leased pursuant to a Sale and Leaseback Transaction, or the fair value as determined by the Board of Directors of IMC of the leased property at the time of entering into such Sale and Leaseback Transaction.

 

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Voting Stock” means, with respect to any Person, Capital Stock of such Person entitling the holders thereof, under ordinary circumstances, to vote in the election of the Board of Directors of such Person.

 

Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

 

  (1) the then outstanding aggregate principal amount of such Indebtedness into

 

  (2) the sum of the total of the products obtained by multiplying

 

  Ÿ   the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by

 

  Ÿ   the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment.

 

Book-Entry, Delivery and Form

 

General.    With respect to each Series, the Notes were issued in the form of a global note (collectively, the “Global Notes”). The Global Notes were deposited with the Trustee as custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co. as nominee of DTC. Except in the limited circumstances described below, beneficial interests in the Global Note will be shown on, and transfers thereof will be effected only through, records maintained in book-entry form by DTC.

 

DTC.    DTC has advised us that it is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities of its participants and to facilitate the clearance and settlement of transactions amongst its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC’s participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC.

 

Except as described below, owners of interests in the Global Notes will not have Notes registered in their names, will not receive physical delivery of Notes in certificated form and will not be considered the registered owners or holders of Notes for any purpose. So long as DTC is the registered owner or holder of a Global Note, such party will be considered the sole owner or holder of the Notes represented by such Global Note for all purposes under the Indenture and the Notes. Accordingly, each Person owning a beneficial interest in a Global Note must rely on the procedures of DTC and their participants or holders to exercise any rights and remedies of a holder under the Indenture. Payments of principal and interest on the Global Notes will be made to one or more paying agents on behalf of DTC as the registered owner thereof.

 

The laws of some countries and some states in the United States require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons may be limited to that extent. Because DTC can act only on behalf of its participants or holders, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons or entities that do not participate in the relevant clearing system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.

 

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Payments on the Global Notes.    While the Notes are represented by the Global Notes, payments in respect of the principal of, premium, if any, and interest on the Global Notes will be made through one or more paying agents appointed under the Indenture (which initially will include the Trustee) on behalf of DTC in its capacity as the registered holder of the Notes under the Indenture. If definitive Notes have been issued, the Indenture requires IMC to make payments in respect of such definitive Notes (including principal, premium and interest) by wire transfer of immediately available funds to the accounts specified by the holders thereof or, if no such account is specified, by mailing a check to each such holder’s registered address.

 

Under the terms of the Indenture, IMC and the Trustee will treat the Persons in whose names the Notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, none of IMC, the Trustee, or any agent of IMC or the Trustee has or will have any responsibility or liability for

 

  Ÿ   any aspect or accuracy of the records of the relevant clearing system, the participants therein or the holders thereof, as the case may be, relating to payments made on account of beneficial ownership interests in the Global Notes, or for maintaining, supervising or reviewing any records of such clearing system, participant or holder relating to beneficial ownership interests in the Global Notes, or

 

  Ÿ   any other matter relating to the actions and practices of the relevant clearing system or the participants therein or the holders thereof.

 

DTC, upon receipt of any such payment, will immediately credit the accounts of its relevant participants or holders with payments in amounts proportionate to their respective holdings in principal amount of beneficial interests in the Global Notes, as shown on the records of DTC. IMC expects that payments by such participants or holders, as the case may be, to the beneficial owners of Global Notes will be governed by standing instructions and customary practices and will be the responsibility of such participants or holders. Neither IMC nor the Trustee will have responsibility or liability for the payment of amounts owing in respect of beneficial interests in the Global Notes held by the Trustee.

 

Transfers of Global Securities and Interests in Global Securities.    Unless definitive securities are issued, the Global Notes may be transferred, in whole and not in part, only by DTC to the Trustee, or by the Trustee to DTC, or to another nominee or successor thereof or a nominee of such successor.

 

Transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its holders and intermediaries. Any secondary market trading activity in beneficial interests in the Global Notes is expected to occur through the participants or holders and intermediaries of DTC and the securities custody accounts of investors will be credited with their holdings against payment in same-day funds on the settlement date.

 

No service charge will be made for any registration of transfer or exchange of the Notes, but the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Although DTC has agreed to various procedures to facilitate transfers of interests in the Global Notes among participants and holders in DTC, it is under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. Neither IMC, the Trustee, nor any agent of ours or the Trustee will have any responsibility for the nonperformance or misperformance (as a result of insolvency, mistake, misconduct or otherwise) by DTC or its participants, indirect participants, holders or intermediaries of their respective obligations under the rules and procedures governing their operations.

 

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IMC understands that under existing industry practices, if IMC or the Trustee requests any action of holders of Notes, or if an owner of a beneficial interest in a Global Note desires to give instructions or take an action that a holder is entitled to give or take under the Indenture, DTC would authorize their respective participants or holders, as the case may be, owning the relevant beneficial interest to give instructions to take such action, and such participants or holders would authorize indirect participants or intermediaries to give instructions or take such action, or would otherwise act upon the instructions of such indirect participants or intermediaries. DTC is not required to authorize holders to take any action.

 

IMC understands that under existing practices of DTC if less than all of the Notes are to be redeemed at any time, DTC will credit its participants’ or holders’ accounts on a proportionate basis, with adjustments to prevent fractions, or by lot or on such other basis as DTC deems fair and appropriate, provided that no beneficial interests of less than $1,000 may be redeemed in part.

 

Except in the limited circumstances described below, owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of definitive Notes. Transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants, which rules and procedures may change from time to time.

 

Certificated Notes.    Beneficial interests in a Global Note are exchangeable for definitive Notes of the applicable Series in registered certificated form only if:

 

  (1) DTC is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so and no alternative clearance system satisfactory to the Trustee, is available,

 

  (2) an Event of Default under the Indenture occurs and is continuing, upon the request delivered in writing to DTC or the Trustee,

 

  (3) DTC is at any time unwilling or unable to continue as depositary and a successor depositary is not able to be appointed by IMC within 90 days;

 

provided that in the case of clauses (1) or (3), such exchange shall be only for all Notes of that Series and in the case of clause (2), such exchange may be for all or some Notes of that Series.

 

Any certificated Notes will be issued in registered form denominations of $1,000 in nominal amount and multiples thereof. In all cases, certificated Notes delivered in exchange for any Global Note or beneficial interest in the Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of DTC in accordance with its customary procedures. The Notes may not be issued in bearer form.

 

In the case of the issuance of certificated Notes in the limited circumstances set forth above, the holder of any such certificated note may transfer such note by surrendering it at the offices or agencies of IMC maintained for such purpose within the City and State of New York. Until otherwise designated by IMC, IMC’s office or agency in the City and State of New York will be the offices of the Trustee maintained for such purpose. In the event of a partial transfer of a holding of Notes represented by one certificate, or partial redemption of such a holding represented by one certificate, a new certificate shall be issued to the transferee in respect of the part transferred or redeemed and a further new certificate in respect of the balance of the holding not transferred or redeemed shall be issued to the transferor, provided that no certificate in denominations less than $1,000 shall be issued. Each new certificate to be issued shall be available for delivery within ten business days at the office of the Trustee. The cost of preparing, printing, packaging and delivering the certificated Notes shall be borne by IMC.

 

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IMC shall not be required to register the transfer or exchange of certificated Notes for a period of 15 days preceding

 

  Ÿ   the due date for any payment of principal of or interest on the Notes, or

 

  Ÿ   the date fixed for a selection of Notes to be redeemed.

 

Also, IMC is not required to register the transfer or exchange of any Notes selected for redemption. In the event of the transfer of any certificated note, the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and IMC may require a holder to pay any taxes and fees required by law and permitted by the Indenture and the Notes.

 

If certificated Notes are issued and a holder of a certificated Note claims that the Note has been lost, destroyed or wrongfully taken or if such Note is mutilated and is surrendered to the Trustee, IMC shall issue and the Trustee shall authenticate a replacement Note if the Trustee’s and IMC’s requirements are met. If required by the Trustee or IMC, an indemnity bond sufficient in the judgment of both to protect IMC, the Trustee or any paying agent or authenticating agent appointed pursuant to the Indenture from any loss which any of them may suffer if a Note is replaced must be posted. IMC may charge for its expenses in replacing a Note.

 

In case any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, or is about to be redeemed or purchased by IMC pursuant to the provisions of the Indenture, IMC in its discretion may, instead of issuing a new Note, pay, redeem or purchase such Note, as the case may be.

 

To the extent permitted by law, IMC, any paying agent, the Registrar and the Transfer Agent shall be entitled to treat the Person in whose name any certificated Note is registered as the absolute owner thereof. The Indenture will contain provisions relating to the maintenance of a register reflecting ownership of certificated Notes, if any, and other provisions customary for a registered debt security including registration as to both principal and stated interest and restrictions on transfer except by surrender of a certificated Note and either the reissuance of such certificated Note or the issuance of a new certificated Note to the new holder. Payment of principal on each certificated Note will be made to the holder against presentation and surrender. Payment of interest on each certificated Note will be made to the holder appearing on the register at the close of business on the record date at his address shown on the register on the record date.

 

None of IMC, the Trustee, the Depositary or any paying agent will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, any book-entry interest.

 

Redemption of Global Notes.    In the event that any Global Note (or any portion thereof) is redeemed, the Trustee will redeem an equal amount of the book-entry interests in such Global Note from the amount received by it in respect to the redemption of such Global Note. The redemption price payable in connection with the redemption of such book-entry interests will be equal to the amount received by the Trustee in connection with the redemption of such Global Note (or any portion thereof).

 

Description of Other IMC Securities and PLP Notes

 

IMC and PLP do not believe that the proposed Amendments with respect to the Other IMC Securities or the PLP Notes constitute material modifications to the existing terms of those Securities. Accordingly, IMC and PLP have not provided a detailed description of those Securities, as amended by the applicable Amendments, in this prospectus. If you would like to receive a description of the existing terms of those Securities, you may request a copy of the description from the Information Agent at its address and telephone number set forth on the back cover page of this prospectus.

 

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DESCRIPTION OF THE GUARANTEES

 

The Guarantees will be issued upon the satisfaction of the conditions described in “The Consent Solicitation—Conditions to the Consent Solicitation” and “The Consent Solicitation—Operative Date of Amendments; Timing for Making of Consent Payments and Issuance of Guarantees.” The Guarantees will be embodied in the supplemental indenture to the Indenture for the applicable series of the Securities. It will not be necessary for new certificates evidencing the Securities to be issued to reflect the benefit of the Guarantees and no separate certificates will be issued to evidence the Guarantees.

 

The Guarantees of the Affiliate Guarantors with respect to the High-Yield Notes are described in “Description of the Amended Securities—Description of High-Yield Notes—Brief Description of the Notes and the Note Guarantees—The Guarantees” and “Description of the Amended Securities—Description of High-Yield Notes—Note Guarantees.” In addition to the Guarantees of Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition, the High-Yield Notes will continue to be guaranteed by substantially the same subsidiaries of IMC that currently guarantee the High-Yield Notes, no matter the outcome of the consent solicitation.

 

Each Affiliate Guarantor that guarantees the High-Yield Notes will also fully and unconditionally guarantee the other Securities. Other than as described below, the scope of these Guarantees will be the same as the scope of their Guarantees with respect to the High-Yield Notes. However, the High-Yield Indentures will contain certain events of default and amendment provisions relating to the Guarantees that will not be contained in the Indentures governing the Other IMC Securities and the PLP Notes. For description of those differences, please see “Risk Factors—Risks Related to the Consent Solicitation and the Guarantees—If the Amendments are adopted, certain events relating to Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition or the Guarantees will result in immediate acceleration of the High-Yield Notes or give holders of the High-Yield Notes a right to accelerate at a time when holders of the Other IMC Securities and the PLP Notes do not have such a right.” In addition, the Amendments with respect to the High-Yield Notes provide that without the consent of each holder of High-Yield Notes affected, no amendment or waiver may be made under the applicable Indenture which would adversely affect the ranking of a Guarantee or which would release Mosaic, Mosaic Fertilizer, Mosaic Crop Nutrition or any of their respective significant subsidiaries that may become Affiliate Guarantors from its Guarantee. Under the Other IMC Securities and the PLP Notes, such amendments or waivers may be approved by holders of a majority of the principal amount (or such other percentage then sufficient to achieve an amendment or waiver) of the applicable series of Securities then outstanding.

 

The Guarantees of each Affiliate Guarantor will be:

 

  Ÿ   general unsecured obligations of the Affiliate Guarantor;

 

  Ÿ   equal in right of payment to all existing and future unsecured obligations of the Affiliate Guarantor that are not, by their terms, expressly subordinate in right of payment to its Guarantee;

 

  Ÿ   senior in right of payment to any future obligations of the Affiliate Guarantor that are, by their terms, expressly subordinated in right of payment to its Guarantee; and

 

  Ÿ   effectively junior in right of payment to all of the Affiliate Guarantor’s secured indebtedness and other obligations to the extent of the value of the assets securing such indebtedness and other obligations.

 

Mosaic, Mosaic Fertilizer and Mosaic Crop Nutrition, and any other affiliate of IMC that may become an Affiliate Guarantor of the Securities, will not be subject to the restrictive covenants in the Indentures, other than the terms of their respective guarantees. See “Risk Factors—Risks Related to

 

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Index to Financial Statements

the Consent Solicitation and the Guarantees—The Affiliate Guarantors will not be subject to the covenants in the Indentures, other than the terms of the Guarantees” and “Description of the Amended Securities—Description of High-Yield Notes—Note Guarantees.”

 

At August 31, 2004, after giving pro forma effect to the Cargill transactions assuming they had happened on that date, the assets of the Cargill Fertilizer Businesses that will be held by the Affiliate Guarantors, when taken together with the assets of IMC and its restricted subsidiaries, accounted for approximately 91% of the consolidated total assets of Mosaic.

 

The Guarantee of each Affiliate Guarantor will be fully and unconditionally released and discharged with respect to each series of the Securities simultaneously upon the occurrence of any of the following:

 

  Ÿ   in the case of an Affiliate Guarantor other than Mosaic, any sale, exchange or transfer by Mosaic or any subsidiary of Mosaic, to any Person that is not an Affiliate of Mosaic of at least 80% of the capital stock of, or all or substantially all the assets of, such Affiliate Guarantor;

 

  Ÿ   in the case of each Affiliate Guarantor, in connection with certain changes of control of IMC, provided that IMC completes its offer to purchase the High-Yield Notes in connection with such change of control (as required by the High-Yield Indentures); or

 

  Ÿ   the High-Yield Notes achieve “investment grade” ratings from both Standards & Poor’s Ratings Services and Moody’s Investors Service, Inc. (unless such Affiliate Guarantor guarantees other debt of IMC).

 

Not all of Mosaic’s subsidiaries will guarantee the