[Letterhead of Triad Nitrogen, Inc.]
February 20, 1997
Melamine Chemicals, Inc.
P.O. Box 748
Donaldsonville, LA 70346
Attention: Mr. Wayne Deleo
Gentlemen:
Reference is made to that certain Feedstock Agreement (the
"Agreement") dated April 30, 1987, between Melamine Chemicals, Inc.
("MCI") and Triad Nitrogen, Inc. ("TNI"), as successor to First
Mississippi Corporation ("FMC").
The Agreement provides inter alia that the price for Urea will be
market price as reflected by the weighted average price (excluding all
taxes reflected therein) TNI receives on all bulk, prilled and/or
granulated Urea sales, FOB Donaldsonville, Louisiana, excluding sales
to MCI, sales to TNI subsidiaries and intra-company transfers, less
Five and 00/100 Dollars ($5.00) per ton and that the price and credits
for quantities of Anhydrous Ammonia and Anhydrous Ammonia Equivalent
obtained from recycled carbamate delivered under the Agreement will be
the market price as reflected by the weighted average price (excluding
all taxes reflected therein) TNI receives on all Anhydrous Ammonia
sales FOB Donaldsonville, Louisiana, excluding sales to MCI and sales
to TNI subsidiaries or intra-company transfers, less Five and 00/100
Dollars ($5.00) per ton.
TNI intends to sell substantially all of the Urea and Anhydrous
Ammonia produced by it at Donaldsonville, Louisiana, to an affiliated
entity, Mississippi Chemical Company, L.P. ("MCCLP"). The prices to
be paid by MCCLP are established based on a contract formula agreed
upon by MCCLP and TNI and may vary from prevailing market prices.
MCCLP will resell Urea and Anhydrous Ammonia purchased from TNI to its
customers in industrial and agricultural markets at prevailing market
prices.
This Letter Agreement confirms our understanding and agreement
that the price for quantities of urea sold under the Agreement will be
the market price as reflected by the weighted average price (excluding
all taxes reflected therein) that MCCLP receives on all bulk, prilled
and/or granulated Urea sales FOB Donaldsonville, Louisiana, excluding
sales to MCI, TNI or MCCLP affiliates, subsidiaries, partners and
intra-company transfers, less Five and 00/100 Dollars ($5.00) per ton.
The average price shall be determined quarterly by utilizing the sales
from the immediately preceding calendar quarter in which MCCLP has
sales. In the event that either party feels the volume of MCCLP's
sales is not sufficient to accurately reflect market price for the
given period, then either party may request a meeting to discuss a
pricing change using appropriate industry indices. However, in the
absence of mutual written agreement by the parties otherwise, MCCLP's
weighted average price as outlined above shall prevail. The prices
and credits for quantities of Anhydrous Ammonia and Anhydrous Ammonia
Equivalent obtained from recycled carbamate delivered under the
Agreement will be the market price as reflected by the weighted
average price (excluding all taxes reflected therein) that MCCLP
receives on all Anhydrous Ammonia sales FOB Donaldsonville, Louisiana,
excluding sales to MCI, TNI or MCCLP affiliates, subsidiaries,
partners and intra-company transfers, less Five and 00/100 Dollars
($5.00) per ton. The average price shall be determined quarterly by
utilizing the sales from the immediately preceding calendar quarter in
which MCCLP has sales. In the event that either party feels the
volume of MCCLP's sales is not sufficient to accurately reflect market
price for the given period, then either party may request a meeting to
discuss a pricing change using appropriate industry indices. However,
in the absence of mutual written agreement by the parties otherwise,
MCCLP's weighted average price as outlined above shall prevail.
TNI shall cause MCCLP to keep complete and accurate books and
records on all sales on which the price under the Agreement is
determined and to permit, on request by MCI, an independent auditor
selected by MCI and to whom MCCLP shall have no reasonable objection
to examine such books and records for any period ending not more than
two (2) years prior to such request to determine the correctness of
any price under the Agreement. Said auditor shall not disclose any
information relating to said books or records except his opinions as
to the correctness of such price.
This Letter Agreement shall take effect on March 31, 1997, for
determination of the price of urea and the price and credits for
anhydrous ammonia for the second quarter of 1997 and for every quarter
thereafter.
This Letter Agreement confirms our understanding and agreement
that TNI has succeeded to all rights and obligations of Triad, FMC and
MCC under the Agreement such that the defined term "Triad" in the
Agreement now refers to TNI, and the defined term "FMC" in the
Agreement now means TNI.
All capitalized terms used in this Letter Agreement and not
otherwise defined, shall have the meanings set forth in the Agreement.
Except as expressly amended herein, all other terms and
conditions shall remain in full force and effect.
If you are in agreement with the foregoing, please so indicated
by signing in the space provided below and returning one fully
executed original of this Letter Agreement to us for our files.
Very truly yours,
TRIAD NITROGEN, INC.
/s/ C. E. McCraw
-----------------
C. E. McCraw
Vice President
AGREED TO AND ACCEPTED
this the 27th day of February, 1997.
MELAMINE CHEMICALS, INC.
By: /s/ Fred Huber
---------------
Fred Huber
President and
Chief Executive Officer