INNOPHOS HOLDINGS, INC. (NASDAQ:IPHS) Files An 8-K Entry into a Material Definitive Agreement

INNOPHOS HOLDINGS, INC. (NASDAQ:IPHS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

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Termination Agreement

On June29, 2018, Innophos, Inc. (“Innophos”), an indirect, wholly-owned subsidiary of Innophos Holdings, Inc. (“Innophos Holdings”), PCS Sales (USA), Inc. (“PCSS”) and PCS Nitrogen Fertilizer, L.P. (“PCSN” and collectively with PCSS, “PCS”) entered into a Termination Agreement (the “Termination Agreement”) to which the parties thereto agreed to certain terms and conditions under which that certain Amended and Restated Acid Purchase Agreement, dated as of March23, 2000, among Rhodia, Inc. (assigned to Innophos), PCSS and PCSN, a copy of which was filed as Exhibit 10.3 to Innophos Holdings’ Annual Report on Form 10-K filed with the Securities and Exchange Commission on March1, 2018 (the “MGA Supply Agreement”), may be terminated prior to the expiration of its stated term and to make alternative arrangements for each of Innophos’s and PCS’s respective ongoing operations and supply needs.

Innophos currently purchases merchant green acid from PCS under the MGA Supply Agreement and Innophos will continue to do so until the date upon which the MGA Supply Agreement terminates in accordance with the Termination Agreement, as amended by the Addendum (as defined below).

The Termination Agreement provides for the termination of the MGA Supply Agreement following the satisfaction of certain terms and conditions set forth in the Termination Agreement, including (i)receipt by Innophos of a payment by PCS in consideration for, among other things, Innophos agreeing to provide for the early termination of the MGA Supply Agreement (“Termination Payment”), (ii) the commissioning and operationalization of an acid pipeline at Innophos’s and PCS’s respective facilities in Geismar, Louisiana (“Geismar”), (iii) the building of, and receipt of certain permits for the operation of, Innophos’s deep well at its phosphoric acid production facility in Geismar and (iv)the transfer of certain equipment to Innophos. Unless PCS materially breaches certain obligations under the MGA Supply Agreement or Innophos files a claim against PCS, upon receipt by Innophos of the Termination Payment, the MGA Supply Agreement will terminate no later than December 2018. The Termination Agreement also contains a mutual release of claims under the MGA Supply Agreement which takes effect in connection with the termination of the MGA Supply Agreement.

The foregoing description of the Termination Agreement is qualified in its entirety by the full text of the Termination Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K. PCS is now part of Nutrien Ltd. (“Nutrien”) following the merger of Potash Corporation of Saskatchewan Inc. with Agrium Inc. on January1, 2018.

Addendum to MGA Supply Agreement

In connection with the Termination Agreement, on June29, 2018, Innophos and PCS entered into an Addendum to the MGA Supply Agreement (the “Addendum”) to which the parties thereto agreed to amend the term of the MGA Supply Agreement to reflect the agreement set forth in the Termination Agreement regarding the potential early termination of the MGA Supply Agreement, provide for the continued operation of PCS’s phosphoric acid production facility in Gesimar during the remaining term of the MGA Supply Agreement and allocate certain maintenance expenses between Innophos and PCS throughout the remaining term of the MGA Supply Agreement.

The foregoing description of the Addendum is qualified in its entirety by the full text of the Addendum, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K.

New MGA Supply Agreement

In connection with the Termination Agreement, on June29, 2018, Innophos and PCSS entered into a Merchant Green Acid Supply Agreement (the “New MGA Supply Agreement”) to which PCSS will sell and deliver, and Innophos will purchase and receive, merchant green acid, subject to the terms and conditions contained in the New MGA Supply Agreement.

The initial term of the New MGA Supply Agreement is from the Closure Date (as defined in the Termination Agreement) to July29, 2021, subject thereafter to automatic extensions of three years each, with each extension following the initial term subject to not less than twelve months’ prior written notice of termination by either party. The New MGA Supply Agreement contains mutual minimum volume commitments.

The foregoing description of the New MGA Supply Agreement is qualified in its entirety by the full text of the New MGA Supply Agreement, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K.

Services Agreement

In connection with the Termination Agreement, on June29, 2018, Innophos and PCSN entered into a Services Agreement (the “Services Agreement”) to which PCSN will provide certain products and services to Innophos with respect to Innophos’s Geismar facility.

The initial term of the Services Agreement is ten years from the Termination Date (as defined in the Termination Agreement), subject thereafter to extension for up to two successive ten-year periods. Innophos may elect (in its sole discretion) to extend the Services Agreement with respect to the first ten-year extension period and Innophos and PCS may mutually elect to extend the agreement for the second ten-year extension period.

The products and services to be provided to the Services Agreement include certain utility products, maintenance services and access rights to satisfy Innophos’s operational needs at its phosphoric acid production facility in Geismar. Innophos will pay PCS for any such products or services utilized at agreed upon amounts as set forth in the Services Agreement.

The foregoing description of the Services Agreement is qualified in its entirety by the full text of the Services Agreement, a copy of which is filed as Exhibit 10.4 to this Current Report on Form 8-K.

Letter Agreement

In connection with the Services Agreement, on June29, 2018, Innophos and PCSN entered into a letter agreement (the “Letter Agreement”). to the Letter Agreement, PCSN agrees to cause the buyer to assume certain obligations under the Services Agreement, if PCSN sells assets of its nitrogen facility in Geismar that are required for the provision of specific services under the Services Agreement or sells substantially all of the assets comprising the Nitrogen Plant.

The foregoing description of the Letter Agreement is qualified in its entirety by the full text of the Letter Agreement, a copy of which is filed as Exhibit 10.5 to this Current Report on Form 8-K.

PPA Supply Agreement

On June29, 2018, Innophos and PCS entered into a Purified Wet Phosphoric Acid Supply Agreement (the “PPA Supply Agreement”), effective as of July30, 2018, to which PCSS will sell and deliver, and Innophos will purchase and receive, low alkali and high alkali purified wet phosphoric acid (“PPA”), subject to the terms and conditions contained in the PPA Supply Agreement.

The PPA Supply Agreement is intended to provide for the supply of PPA following Innnophos’s receipt of written notice from PCS Purified Phosphates (“PCSPP”), an affiliate of Nutrien as of January1, 2018, that PCSPP does not wish to extend the term of the Amended and Restated Purified Wet Phosphoric Acid Supply Agreement, dated March23, 2000, beyond July29, 2018, the end of the current renewal term, as previously disclosed on Innophos Holdings’ Current Report on Form 8-K filed with the Securities and Exchange Commission on June29, 2016.

The initial term of the PPA Supply Agreement is three years to expire July29, 2021, subject thereafter to automatic extensions of three years each, with each extension following the initial term subject to not less than twelve months’ prior written notice of termination by either party. The PPA Supply Agreement contains mutual minimum volume commitments.

The foregoing description of the PPA Supply Agreement is qualified in its entirety by the full text of the PPA Supply Agreement, a copy of which is filed as Exhibit 10.6 to this Current Report on Form 8-K.

Item 1.01 Termination of a Material Definitive Agreement.

The information set forth under the headings “Termination Agreement” and “Addendum to MGA Supply Agreement” in Item 1.01 is incorporated by reference to this Item 1.01.

On July2, 2018, Innophos issued a press release announcing the entry into the PPA Supply Agreement described in Item 1.01. A copy of that press release is filed as Exhibit 99.1 to this Current Report on Form8-K.

On July2, 2018, Innophos issued a press release announcing the entry into the New MGA Agreement and the transactions contemplated by the Termination Agreement, Addendum to the MGA Supply Agreement, New MGA Supply Agreement, Services Agreement and Letter Agreement described in Item 1.01. A copy of that press release is filed as Exhibit 99.2 to this Current Report on Form8-K.

Item 1.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are filed with this Current Report on Form 8-K:

ExhibitNo.

Description

10.1* Termination Agreement, dated as of June29, 2018, by and among Innophos, Inc., PCS Sales (USA), Inc. and PCS Nitrogen Fertilizer, L.P. (now part of Nutrien)
10.2 Addendum to the Amended and Restated Acid Purchase Agreement, dated June29, 2018, by and among Innophos, Inc., PCS Sales (USA), Inc. and PCS Nitrogen Fertilizer, L.P. (now part of Nutrien)
10.3* Merchant Green Acid Supply Agreement, dated as of June29, 2018, by and between Innophos, Inc. and PCS Sales (USA), Inc. (now part of Nutrien)
10.4 Services Agreement, dated as of June29, 2018, by and between Innophos, Inc. and PCS Nitrogen Fertilizer, L.P. (now part of Nutrien)
10.5 Letter Agreement between Innophos, Inc. and PCS Nitrogen Fertilizer, L.P., dated June29, 2018
10.6* Purified Wet Phosphoric Acid Supply Agreement, effective as of July30, 2018, by and between Innophos, Inc. and PCS Sales (USA), Inc. (now part of Nutrien)
99.1 Press Release dated July2, 2018 regarding PPA Supply Agreement
99.2 Press Release dated July2, 2018 regarding Termination Agreement, Addendum to the MGA Supply Agreement, New MGA Supply Agreement, Services Agreement and Letter Agreement
* Confidential portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission to a confidential treatment request under Rule 24b-2 of the Securities and Exchange Act of 1934, as amended.


Innophos Holdings, Inc. Exhibit
EX-10.1 2 d834549dex101.htm EX-10.1 EX-10.1 Confidential Treatment Requested by Innophos Holdings,…
To view the full exhibit click here

About INNOPHOS HOLDINGS, INC. (NASDAQ:IPHS)

Innophos Holdings, Inc. is a producer of nutritional specialty ingredients with applications in food, beverage, dietary supplements, pharmaceutical, oral care and industrial end markets. The Company also provides bioactive mineral and nutritional ingredients. Its segments include Specialty Phosphates US & Canada, Specialty Phosphates Mexico, and GTSP & Other. The Specialty Phosphates US & Canada segment and Specialty Phosphates Mexico segment comprises product lines, such as Specialty Ingredients; Food and Technical Grade Purified Phosphoric Acid (PPA), and Technical Grade Sodium Tripolyphosphate (STPP) & Detergent Grade PPA. The GTSP & Other segment includes fertilizer co-product Granular Triple Super Phosphate (GTSP) and other non-specialty phosphate products. It produces a range of botanical, enzyme and mineral-based ingredients through various production processes, including spray drying, roller compactions, grinding, wet granulations, solvent extractions and custom blending.

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