SECOND AMENDED AND RESTATED
NOTE AGREEMENT
AMONG
FM PROPERTIES OPERATING CO.
(as Borrower)
FREEPORT-McMoRan INC. and
FREEPORT-McMoRan COPPER & GOLD INC.
(as Guarantors)
AND
HIBERNIA NATIONAL BANK
and CHEMICAL BANK
(as Banks)
Originally Dated: December 31, 1985
Firstly Amended and Restated: as of June 11, 1992
Secondly Amended and Restated: as of June 30, 1995
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS............................... 3
1.1 Defined Terms................................... 3
1.2 Other Definitional Provisions................... 11
SECTION 2. SALE OF ASSETS........................... 11
2.1 Conveyances of the Assets....................... 11
2.2 Loan............................................ 11
SECTION 3. THE LOAN.................................. 11
3.1 Notes........................................... 11
3.2 Optional Prepayments............................ 12
3.3 Interest Rate and Payment Dates................. 12
3.4 Exculpation..................................... 13
3.5 Acknowledgment and Modification of Notes........ 14
SECTION 4. SECURITY.................................. 14
4.1 Security........................................ 14
4.2 Required Collateralization (FTX)................ 14
4.3 Required Collateralization (FCX)................ 15
SECTION 5. REPRESENTATIONS AND WARRANTIES............ 15
5.1 Partnership Existence; Compliance with Law...... 15
5.2 Partnership Power; Authorization; Enforceable
Obligations................................... 16
5.3 No Legal Bar.................................... 17
5.4 No Material Litigation.......................... 18
5.5 No Default...................................... 18
5.6 Title, etc...................................... 18
5.7 No Burdensome Restrictions...................... 19
5.8 Taxes........................................... 19
5.9 Federal Regulations............................. 19
5.10 ERISA........................................... 19
5.11 Investment Company Act.......................... 19
SECTION 6. CONDITIONS PRECEDENT...................... 19
6.1 Conditions to Effectiveness..................... 19
(a) Agreement.................................. 19
(b) First Amendment to Loan Participation
Agreement................................ 20
(c) Intercreditor Agreements, Guaranties
and Security Agreements.................. 20
(d) Credit Agreements.......................... 20
(e) FM Properties Partnership and Corporate
Proceedings.............................. 20
(f) FTX Corporate Proceedings.................. 20
(g) FCX Corporate Proceedings.................. 20
(h) Legal Opinions............................. 20
(i) No Default or Event of Default............. 21
(j) Additional Matters......................... 21
SECTION 7. AFFIRMATIVE COVENANTS..................... 21
7.1 Financial Statements............................ 21
7.2 Payment of Obligations.......................... 23
7.3 Notices; Reports................................ 23
SECTION 8. ADDITIONAL COVENANTS...................... 25
8.1 Covenants Incorporated by Reference from
FM Properties Credit Agreement................ 25
8.2 Covenants Incorporated by Reference from
FTX Credit Agreement.......................... 26
8.3 Covenants Incorporated by Reference from
FCX Credit Agreement.......................... 26
SECTION 9. EVENTS OF DEFAULT......................... 27
9.1 Event of Default................................ 27
9.2 Acceleration Payment............................ 30
SECTION 10. FTX GUARANTEE............................ 30
10.1 Guarantee by FTX................................. 30
SECTION 11. MISCELLANEOUS............................ 31
11.1 Notices......................................... 31
11.2 Amendments and Waivers.......................... 32
11.3 No Waiver; Cumulative Remedies.................. 33
11.4 Payment of Expenses and Taxes................... 33
11.5 The Agent....................................... 33
11.6 Survival of Representations and Warranties...... 34
11.7 Counterparts.................................... 34
11.8 Governing Law................................... 34
11.9 Binding Effect.................................. 34
SECOND AMENDED AND RESTATED NOTE AGREEMENT
SECOND AMENDED AND RESTATED NOTE AGREEMENT dated as of June
30, 1995 among FM Properties Operating Co., a Delaware general
partnership ("FM Properties"), Freeport-McMoRan Inc., a Delaware
corporation ("FTX"), FREEPORT-McMoRan COPPER & GOLD INC., a
Delaware corporation ("FCX") (FTX and FCX, the "Guarantors"),
HIBERNIA NATIONAL BANK, a national banking association
("Hibernia") and CHEMICAL BANK, a New York banking corporation
("Chemical") (Hibernia and Chemical, the "Banks"), and Hibernia,
as Agent for the Banks (the "Agent").
RECITALS
A. FMP Operating Company, a Limited Partnership
("Purchaser") and Pel-Tex Oil Company, Inc., Chenier Oil Company,
Inc., Burke and Pel-Tex Oil Company, Inc., d/b/a Burmont Company,
Fay Stouder Burke and Earl P. Burke, Jr. (collectively, the
"Sellers") executed a Note Agreement dated as of December 31,
1985, as amended by First Amendment to Note Agreement dated March
15, 1986, Second Amendment to Note Agreement dated March 28,
1990, Third Amendment to Note Agreement dated November 9, 1990
and Fourth Amendment to Note Agreement dated as of June 30, 1991
(collectively, the "Note Agreement") relating to the issuance by
Purchaser to the Sellers of promissory notes in the aggregate
principal sum of $74,000,000 due January 2, 1996.
B. Pursuant to a reorganization of Purchaser and
affiliated companies, Purchaser merged with and into a Delaware
limited partnership, which Delaware limited partnership merged
with and into Freeport-McMoRan Oil and Gas Company ("Old FMOG
Co.") (the "First Merger"). Old FMOG Co. succeeded to all of the
assets and liabilities of Purchaser.
C. Pursuant to a further reorganization (the "Second
Merger"), Old FMOG Co. merged with and into Freeport-McMoRan
Acquisition Company, a newly-formed wholly-owned subsidiary of
FTX which changed its name to Freeport-McMoRan Oil & Gas Company
("New FMOG Co."). New FMOG Co. succeeded to all of the assets
and liabilities of Old FMOG Co.
D. Pursuant to a further reorganization (the "Third
Merger"), New FMOG Co. merged with and into FTX. FTX succeeded
to all the assets and liabilities of New FMOG Co.
E. Pursuant to a further reorganization (the "FM
Transfer"), FTX transferred certain domestic oil and gas
properties and real estate properties held for development and
owned by FTX and its subsidiaries to FM Properties, in return for
which FM Properties assumed certain liabilities of FTX, including
liabilities and obligations under the Note Agreement. Because of
the FM Transfer, it was necessary to amend the Note Agreement in
certain respects, and because the Note Agreement had been amended
four times and was required to be amended once more, the parties
executed an Amended and Restated Note Agreement (the "First
Restated Note Agreement") reflecting all such amendments to date.
F. Pursuant to a further reorganization (the "FI
Collateralization"), P.T. Freeport Indonesia Company ("FI")
granted certain collateral to certain banks pursuant to a certain
Credit Agreement, dated as of June 1, 1993 among FI, FTX, FCX,
certain banks, and Morgan Guaranty Trust Company of New York and
Chemical as agents. Because of the FI Collateralization, it was
necessary to amend the First Restated Note Agreement, and the
Sellers, FM Properties, the Banks and the Agent executed a First
Amendment to Amended and Restated Note Agreement dated as June 1,
1993.
G. Pursuant to a Transfer of Notes and Release of
Indebtedness Agreement (the "FM Properties Transfer") among the
Sellers, FM Properties, FTX, and the Banks, dated as of May 5,
1995, (i) FM Properties prepaid the Notes in favor of the Sellers
in the principal amount of $6,000,000, (ii) the Sellers
transferred all of their right, title and interest in the Notes,
the First Restated Note Agreement (as amended) and all other
documents executed in connection therewith to the Banks, and
(iii) the Banks released and relieved the Sellers from any
further obligations in connection with the Notes, the First
Restated Note Agreement (as amended) and related documents so
that thereafter, the Banks became substituted for the Sellers
pursuant to the Notes, First Restated Note Agreement (as amended)
and related documents.
H. Pursuant to a further reorganization (the "FCX Spin
Off"), FTX will transfer to its shareholders all of the shares of
FCX owned by FTX, thereby leaving FTX as a holding company for
Freeport-McMoRan Resource Partners, Limited Partnership ("FRP")
and leaving FCX as a publicly-held holding company for FI. In
connection with the FCX Spin Off, FM Properties and FTX have
requested certain modifications to the First Restated Note
Agreement (as amended), including, without limitation: (i) an
extension of the maturity date of the Notes from January 2, 1996
to June 30, 1996; (ii) a change in the interest rate to LIBOR
plus 1.375% per annum beginning January 3, 1996; (iii) the
release of the Banks' rights to obtain a security interest in
assets of FM Properties; and (iv) the substitution of partial
guaranties by FTX and FCX for the existing guaranty of FTX
(100%). Because of the substantial changes required to be made
to accommodate the FCX Spin Off, the parties hereto wish to
execute a Second Amended and Restated Note Agreement (this
"Agreement").
NOW, THEREFORE, for the considerations originally recited in
the First Restated Note Agreement and otherwise recited herein,
FM Properties, FTX, FCX, the Banks and the Agent hereby agree to
further amend and restate the First Restated Note Agreement dated
as of June 30, 1995 (as amended), to read as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. The following terms shall have the
following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Agent" shall mean Hibernia National Bank as agent for
the Banks pursuant to this Credit Agreement.
"Agreement" shall mean this Second Amended and Restated
Note Agreement, as the same from time to time may be
amended, supplemented or modified.
"Banks" shall mean Hibernia and Chemical.
"Business Day" shall mean a day other than a Saturday,
Sunday or other day on which commercial banks in New York,
New York or New Orleans, Louisiana are authorized or
required by law to close.
"Capitalized Lease Obligation" means the obligation of
any Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or
personal property which obligation is, or in accordance with
GAAP (including Statement of Financial Accounting Standards
No. 13 of the Financial Accounting Standards Board) is
required to be, classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP, and for
purposes of this Agreement the amount of such obligation
shall be the capitalized amount thereof determined in
accordance with GAAP.
"Chemical" shall mean Chemical Bank, a New York banking
corporation.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commonly Controlled Entity" shall mean an entity,
whether or not incorporated, which is under common control
with FM Properties, FTX or FCX within the meaning of Section
414(b) or (c) of the Code.
"Company" shall mean FM Properties Inc., a Delaware
corporation, which has been organized as a wholly-owned
Subsidiary of FTX and which, as of the date hereof, holds a
99.8% general partnership interest in FM Properties.
"Contingent Obligation" shall mean with respect to any
Person, any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or obligation of any other
Person in any manner, whether directly or indirectly, and
including, without limitation, any agreement or obligation
(i) to pay dividends or other distributions upon the stock
of such other Person, or any obligation of such other
Person, direct or indirect, (ii) to purchase or pay (or
advance or supply funds for the purchase or payment of) such
Indebtedness or obligation or to purchase (or advance or
supply funds for the purchase of) any security for the
payment of such Indebtedness, obligation, dividend or
distribution, (iii) to purchase or lease property,
securities or services for the purpose of assuring the owner
of such Indebtedness or obligation or the holder of such
stock of the payment of such Indebtedness, obligation,
dividend or distribution including, without limitation, any
take-or-pay contract or agreement to buy a minimum amount or
quantity of production or to provide an operating subsidy
which, in each case, is utilized for a third party
financing, or (iv) to maintain working capital, equity
capital or any other financial statement condition of the
primary obligor, so as to enable the primary obligor to pay
such Indebtedness, obligation, dividend or distribution;
provided, however, that the term Contingent Obligation shall
not include any endorsement for collection or deposit in the
ordinary course of business.
"Contractual Obligation" shall mean as to any Person,
any provision of any security issued by such Person or of
any agreement, instrument or undertaking to which such
Person is a party or by which it is bound or to which any of
its property is subject.
"Default" shall mean any of the events specified in
Section 9, whether or not any requirement for the giving of
notice, the lapse of time, or both, or any other condition
specified therein, has been satisfied.
"Dollars" and "$" shall mean dollars in the lawful
currency of the United States of America.
"Effective Date" shall mean the date on which the FCX
Spin Off is consummated, provided that all of the other
conditions precedent contained in Section 6 hereof have also
been satisfied.
"ERISA" shall mean the Employees Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any trade or business
(whether or not incorporated), that together with the
Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section
302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.
"ERISA Event" means (i) any "Reportable Event" as
defined in Section 4043 of ERISA or the regulations issued
thereunder, with respect to a Plan; (ii) the adoption of any
amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code; (iii)
the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code),
whether or not waived; (iv) the incurrence of any liability
under Title IV of ERISA with respect to any Plan or
Multiemployer Plan, other than any liability for
contributions not yet due or payment of premiums not yet
due; (v) the receipt by the borrower or any ERISA affiliate
from the PBGC of any notice relating to the intention of the
PBGC to terminate any Plan or Plans or to appoint a trustee
to administer any Plans; (vi) the receipt by FM Properties,
FTX or FCX of any notice concerning the imposition of
withdrawal liability or a determination that a Multiemployer
Plan is, or is excepted to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; and
(vii) any other similar event or condition with respect to a
Plan or Multiemployer Plan that could reasonably result in
liability of FM Properties, FTX or FCX, as the case may be.
"Event of Default" shall mean any of the events
specified in Section 9, provided that any requirement for
the giving of notice, the lapse of time, or both, or any
other condition specified therein, has been satisfied.
"Exchange Agreement" shall mean the Interest Rate
Exchange Agreement between Hibernia and the Exchange Bank
dated as of December 31, 1985, whereby the Agent agrees to
pay the Exchange Bank a fixed rate of interest and the
Exchange Bank agrees to pay the Agent a floating rate of
interest.
"Exchange Bank" shall mean Chemical.
"FCX" shall mean Freeport-McMoRan Copper & Gold Inc., a
Delaware corporation.
"FCX Credit Agreement" shall mean that certain Credit
Agreement among FCX, FI, First Trust of New York, National
Association, as trustee, Chemical as administrative and
collateral agent, The Chase Manhattan Bank (National
Association),as documentary agent, and certain banks, dated
as of June 30, 1995, relating to a $200,000,000 credit
facility to FCX and FI, as such credit agreement may be
amended from time to time.
"FCX Guaranty" shall mean the partial guarantee of the
Obligations by FCX pursuant to that certain FCX Guaranty
Agreement by FCX in favor of the Agent and others, dated as
of June 30, 1995.
"FI" shall mean P.T. Freeport Indonesia Company, a
limited liability company organized under the laws of
Indonesia and domesticated in Delaware.
"FI Credit Agreement" shall mean that certain Credit
Agreement among FI, FTX, FCX, First Trust of New York,
National Association, as trustee, Chemical as agent and
collateral agent, The Chase Manhattan Bank (National
Association) as documentary agent, and certain banks, dated
as of October 27, 1989, relating to a $550,000,000 credit
facility to FI, as such credit agreement may be amended from
time to time.
"FM Properties Credit Agreement" shall mean that
certain Credit Agreement among FM Properties, FTX, FCX,
Chemical as administrative and collateral agent, The Chase
Manhattan Bank (National Association) as documentary agent,
and certain banks, dated as of June 30, 1995, relating to a
$50,000,000 credit facility to FM Properties, as such credit
agreement may be amended from time to time.
"FRP" shall mean Freeport-McMoRan Resource Partners,
Limited Partnership, a Delaware limited partnership.
"FTX" shall mean Freeport-McMoRan Inc., a Delaware
corporation.
"FTX Credit Agreement" shall mean that certain Credit
Agreement among FTX, FRP, Chemical as administrative and
collateral agent, The Chase Manhattan Bank (National
Association) as documentary agent, and certain banks, dated
as of June 30, 1995, relating to a $400,000,000 credit
facility to FRP and FTX, as such credit agreement may be
amended from time to time.
"FTX Guaranty" shall mean the partial guarantee of the
Obligations by FTX pursuant to that certain FTX Guaranty
Agreement by FTX in favor of the Agent and others, dated as
of June 30, 1995.
"GAAP" shall mean generally accepted accounting
principles applied on a consistent basis.
"Hibernia" shall mean Hibernia National Bank, a
national banking association.
"Indebtedness" shall mean, without duplication, (a) all
obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such
Person for the unearned balance of any payment received
under any contract outstanding for 180 days, (d) all
obligations of such Person under conditional sale or other
title retention agreements relating to property or assets
purchased by such Person, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property
or services (excluding trade accounts payable and accrued
obligations incurred in the ordinary course of business so
long as the same are not 180 days overdue or, if overdue,
are being contested in good faith and by appropriate
proceedings), (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien
on property owned or acquired by such Person, whether or not
the obligations secured thereby have been assumed, (g) all
Guarantees by such Person of Indebtedness of others, (h) all
Capitalized Lease Obligations of such Person, (i) all
recourse obligations of such Person with respect to sales of
accounts receivable which would be shown under GAAP on the
balance sheet of such Person as a liability, (j) all
obligations of such Person as an account party (including
reimbursement obligations to the issuer of a letter of
credit) in respect of bankers' acceptances and letters of
credit guaranteeing Indebtedness and (k) all non-contingent
obligations of such Person as an account party (including
reimbursement obligations to the issuer of a letter of
credit) in respect of letters of credit other than those
referred to in clause (j) above. The Indebtedness of any
Person shall include the Indebtedness of any partnership in
which such Person is a general partner but shall exclude
obligations under leases which are characterized as
Operating Leases.
"Intercreditor Agreements" shall mean (i) the FTX
Intercreditor Agreement dated as of June 11, 1992, as
amended and restated in its entirety as of June 1, 1993 and
as further amended and restated in its entirety as of the
Effective Date among Chemical on behalf of certain banks
pursuant to the FTX Credit Agreement, Chemical on behalf of
certain banks pursuant to the FM Properties Credit
Agreement, the Agent, Texas Commerce Bank, and Chemical as
collateral agent, as such agreement may be further amended
and in effect from time to time; (ii) the FCX Intercreditor
Agreement dated as of the Effective Date among Chemical as
agent for the banks pursuant to the FCX Credit Agreement,
Chemical on behalf of certain banks pursuant to the FM
Properties Credit Agreement, Chemical on behalf of certain
banks pursuant to the FI Credit Agreement, the Agent, Texas
Commerce Bank and Chemical as collateral agent, as such
agreement may be further amended and in effect from time to
time; and (iii) the FM Properties Intercreditor Agreement
dated as of the Effective Date, among FM Properties, FTX,
FCX, the Agent, and Chemical on behalf of certain banks
pursuant to the FM Properties Credit Agreement and Chemical,
as collateral agent, as such Intercreditor and Subordination
Agreement may be amended and in effect from time to time.
"LIBOR" with respect to each Reference Period, means
the rate of interest calculated for such Reference Period by
the Agent as follows:
(a) On the Determination Date for such Reference Period,
the Agent will obtain from the Dow Jones Telerate Matrix for
British Bankers Association Interest Settlement Rates
("Telerate Screen") the offered quotations for Dollar
Deposits as of 11:00 A.M. (London time) on such
Determination Date; if at least two such offered quotations
shall appear on the Telerate Screen, the LIBOR shall be the
arithmetic mean of such offered quotations (rounded, if
necessary, upwards to the nearest 1/32 of 1%), as determined
by the Agent;
(b) If fewer than two such offered quotations shall appear
on the Telerate Screen, the Agent will request each
Reference Bank to provide the Agent with its offered
quotation for Dollar Deposits to leading banks in London
interbank market as of approximately 11:00 A.M. (London
time) on such Determination Date; if at least two Reference
Banks provide the Agent with such offered quotations, LIBOR
shall be the arithmetic mean (rounded as aforesaid) of such
offered quotations, as determined by the Agent;
(c) If fewer than two Reference Banks provide the Agent
with such offered quotations, LIBOR shall be the rate per
annum which the Agent determines to be the arithmetic mean
(rounded as aforesaid) of the offered quotations which
leading banks in New York City selected by the Agent are
quoting in the New York interbank market on the
Determination Date (or if such a day is not a Business Day,
the next succeeding Business Day) for Dollar Deposits to
leading European banks; or
(d) If such offered quotations are not available, LIBOR
shall be the same as the LIBOR in effect for the last
preceding Reference Period for which the LIBOR was
established pursuant to any of the procedures set forth in
the foregoing paragraphs (a) and (b).
"Determination Date", with respect to any Reference Period,
means the second Business Day in London before the first day
of such Reference Period. "Dollar Deposits", with respect
to each Reference Period, means Dollar deposits for a period
of three months through January 2, 1996, and one, two or
three months thereafter, commencing on the first day of such
Reference Period, and in an amount equal to $70,000,000;
provided, however, that if quotations appearing on the
Telerate Screen do not indicate a Dollar amount, such
quotations shall be deemed to be for Dollar deposits in an
amount equal to $70,000,000; provided further, however, that
if quotations appear on the Telerate Screen only in Dollar
amounts other than $70,000,000, the quotations, if any, for
Dollar deposits next higher than $70,000,000, but not in
excess of $100,000,000 shall be deemed to be quotations for
Dollar deposits of $70,000,000. "Reference Banks", with
respect to any Determination Date, means the principal
London offices of the reference banks shown on the Telerate
Screen. "Reference Period" means a one-month, two-month or
three-month period at FM Properties' option but no Reference
Period may extend beyond June 30, 1996. "LIBOR Reserve
Adjustment" shall mean the percentage rate per annum equal
to (i) a fraction the numerator of which is LIBOR and the
denominator of which is one (1.00) minus the Reserve
Percentage (as defined below) expressed as a decimal, minus
(ii) LIBOR. The "Reserve Percentage" is that percentage
which is specified from time to time as the maximum reserve
requirement against "Eurodollar liabilities" under
Regulation D of the Board of Governors of the Federal
Reserve System (or any successor) for commercial banks.
"Lien" shall have the meaning set forth in the
Intercreditor Agreements.
"Loan" shall mean the $68,000,000 term loan by the
Banks to FM Properties, representing the balance of the
purchase price to be paid by FM Properties for the purchase
of certain assets by the Purchaser from the Sellers.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower
or any ERISA Affiliate is making or accruing an obligation
to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make
contributions.
"Notes" shall have the meaning set forth in Subsection
3.1.
"Obligations" shall mean the Loan, together with
accrued interest thereon, and any and every other debt,
liability and obligation, direct and contingent, liquidated
or unliquidated, due or to become due, whether now existing
or hereafter arising pursuant to this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.
"Person" shall mean an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental
authority or other entity of whatever nature.
"Plan" shall mean any employee pension benefit plan
(other than a Multiemployer Plan) which is subject to the
provisions of Title IV of ERISA or Section 412 of the Code
and in respect of which FM Properties or any ERISA Affiliate
is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Purchaser" shall mean FMP Operating Company, a Limited
Partnership, a Texas limited partnership.
"Regulation S-X" means Regulation S-X promulgated by
the Securities and Exchange Commission.
"Requirement of Law" shall mean as to any Person, the
Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person,
including a Certificate of Limited Partnership, if any, and
any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its
property is subject.
"Responsible Officer" of any entity shall mean any
executive officer or financial officer of such entity and
any other officer or similar official thereof responsible
for the administration of the obligations of such entity in
respect of this Agreement; provided that the Responsible
Officers of FTX, as managing general partner of FM
Properties, shall be deemed to be Responsible Officers of FM
Properties.
"Subsidiary" shall have the meaning set forth in the FM
Properties Credit Agreement, the FTX Credit Agreement, the
FCX Credit Agreement or the FI Credit Agreement, as
applicable.
"Termination Date" shall mean June 30, 1996 or, if
applicable, any earlier date on which the obligation to pay
the Notes in full shall mature pursuant to this Agreement.
1.2 Other Definitional Provisions. (a) All terms defined
in this Agreement shall have the defined meanings when used in
the Notes or in any certificate or other document made or
delivered pursuant hereto unless the context shall otherwise
require.
(b) The words "hereof", "herein", and "hereunder" and words
of similar import when used in this Agreement, and section,
subsection, schedule and exhibit references are references to
this Agreement unless otherwise specified.
(c) As used herein and in the Notes, and in any certificate
or other document made or delivered pursuant hereto, accounting
terms not specifically defined herein shall have the respective
meanings given to them under GAAP.
SECTION 2. SALE OF ASSETS
2.1 Conveyances of the Assets. On December 31, 1985, the
Sellers conveyed certain assets to the Purchaser.
2.2 Loan. As payment for the assets originally conveyed by
Sellers to the Purchaser, Purchaser agreed to pay the purchase
price for the assets to the Sellers. Through successive
transactions, FM Properties has assumed the obligations of the
Purchaser, and the Banks have acquired the rights of the Sellers.
Accordingly, FM Properties hereby agrees to pay the Loan to the
Banks in full on the Termination Date.
SECTION 3. THE LOAN
3.1 Notes. The Obligations of FM Properties to pay the
Loan and interest thereon shall be evidenced by the respective
Notes, originally executed by the Purchaser, dated December 31,
1985 and payable to the respective Sellers, as endorsed and
transferred by the Sellers to the Agent for the benefit of the
Banks. Each Note shall bear interest for the period from the
date thereof until payment in full of the principal amount
thereof at the interest rate per annum stated in Subsection 3.3.
Interest on each Note shall be payable at such times as are
specified in Subsection 3.3. Anything to the contrary herein or
in any other agreement executed in connection herewith
notwithstanding, the Banks shall not charge, take, collect or
receive, and FM Properties shall not be obligated to pay to the
Banks, any amounts constituting interest on the Loan in excess of
the maximum rate permitted by applicable law. If, for any
reason, any payments charged, taken, collected or received on the
Loan shall exceed the maximum rate permitted by applicable law,
the holder of the Notes shall refund to FM Properties, or at the
option of such holder, credit against the principal of the Notes
such portion of said interest as shall be necessary to cause the
interest actually paid, charged, received or collected and
retained on the Notes to equal the maximum rate permitted by
applicable law.
3.2 Optional Prepayments. FM Properties shall have the
right to prepay the Obligations in whole or in part at any time
prior to January 2, 1996, but only after 15 days' prior notice to
the Agent of the intention to do so; provided, however that FM
Properties shall pay Hibernia as a prepayment premium the amount
which Hibernia is obligated to pay the Exchange Bank for the
early termination of the Exchange Agreement with respect to the
Exchange Agreement (if the prepayment is in full) or, if
possible, for the early termination or reduction of the Exchange
Agreement; provided further, however, that should any such early
termination or reduction of the Exchange Agreement resulting from
a permitted prepayment by FM Properties result in a credit under
the Exchange Agreement rather than an early termination penalty,
then FM Properties shall be entitled to receive such credit. FM
Properties shall have the right to prepay the Obligations in
whole or in part at any time after January 2, 1996, but only
after 15 days' prior notice to the Agent of its intention to do
so; provided, however, that if such prepayment should be on a day
other than the last day of a Reference Period, FM Properties
shall pay the Banks as a prepayment premium any loss which the
Banks may sustain as a result of such prepayment during a
Reference Period, the Agent's calculation of such loss to be
conclusive absent manifest error.
3.3 Interest Rate and Payment Dates. (a) For the period
through and including January 2, 1996, each Note shall bear
interest at the rate of 10.6208% per annum, plus or minus a
variable rate per annum equal to the LIBOR Reserve Adjustment.
Interest shall be payable in arrears on January 2, 1996.
(b) For the period from January 3, 1996 through the
Termination Date, each Note shall bear interest at the rate of
LIBOR plus one and three-eighths (1.375%) percent per annum.
Interest shall be payable in arrears on the last day of each
Reference Period.
(c) The fixed rate component of interest described in
Section 3.3(a) is computed on the basis of a year of 360/360 days
and the variable rate component of interest described in Section
3.3(b) is computed on the basis of the actual number of days
elapsed over a year of 360 days.
(d) If any applicable domestic or foreign law, treaty, rule
or regulation, or any interpretation or administration thereof by
any governmental authority (i) changes the basis of taxation of
payments to the Banks on any principal or interest for other
amounts attributable to interest at LIBOR (other than taxes
imposed on the overall net income of the Banks); (ii) changes,
imposes or deems applicable any reserve, special deposit or
similar requirements in respect of advances bearing interest at
LIBOR (excluding those for which the Banks are fully compensated
pursuant to adjustments made in the definition of LIBOR) or
against assets of, deposits with or for the account of or credit
extended by the Banks; or (iii) imposes on the Banks or the
interbank eurocurrency deposit and transfer market any other
condition affecting advances bearing interest at LIBOR, and the
result of any of the foregoing is to increase the cost to the
Banks of funding or maintaining the Loan at LIBOR or to reduce
the amount of any sum receivable by the Banks in respect of
advances bearing interest at LIBOR, then the Agent shall promptly
notify FM Properties in writing of the happening of such event
and accompanying such notice shall be a summary of the supporting
calculation, and FM Properties shall upon demand pay to the Banks
such additional amount or amounts as will compensate the Banks
for such additional cost or reduction. The Agent's calculation
shall be deemed conclusive absent manifest error.
3.4 Exculpation. Subject to the rights of the Banks
against FTX and FCX under the FTX Guaranty and the FCX Guaranty,
each of the Banks agree for themselves and their heirs,
successors and assigns that any claim against FM Properties
which may arise for payment of the principal of and interest on
the Notes and for fees, expenses and all other amounts payable by
FM Properties hereunder shall be made only against and shall be
limited to FM Properties and that no judgment, order or execution
entered in any suit, action or proceeding, whether legal or
equitable, with respect to payment of the Notes shall be obtained
or enforced against any partner of FM Properties or the assets of
any partner of FM Properties, any right to proceed against the
partners of FM Properties as a result of their capacity as a
partner of FM Properties, individually or their respective assets
in respect of payment of the Notes being hereby expressly waived,
renounced and remitted by each of the Banks for themselves and
their heirs, successors and assigns. Nothing in this Subsection
3.4, however, shall be deemed to be a waiver by any of the Banks
or any other holders of the Notes of any right to proceed against
any of the partners of FM Properties or their respective assets
in respect of claims other than for payment of the Notes, which
such Banks or other holders may have against such partner or
assets, and nothing in this Subsection 3.4 shall be construed so
as to prevent any of the Banks or any other holders of the Notes
from commencing any action, suit or proceeding with respect to,
or causing legal papers to be served upon, any partner of FM
Properties for the purpose of obtaining jurisdiction over FM
Properties. Furthermore, nothing contained in this Subsection
3.4 shall be deemed to diminish, waive or affect in any manner
the rights of the Agent, Banks, or Banks' assigns, against FTX,
FCX or their assets under and pursuant to the FTX Guaranty or the
FCX Guaranty or any Liens or rights of the Agent or Banks as
contemplated or provided for in the Intercreditor Agreements.
3.5 Acknowledgment and Modification of Notes. FM
Properties and the Banks agree that (i) the Notes are hereby
amended to extend the maturity dates thereof from January 2, 1996
to June 30, 1996 and (ii) all references to the Note Agreement in
the Notes shall be deemed to refer to this Agreement.
SECTION 4. SECURITY
4.1 Security. The Obligations of FM Properties in favor of
the Banks are secured by the following:
(i) FTX Guaranty and FCX Guaranty.
(ii) All Liens and rights of the Banks as contemplated
or provided for in the Intercreditor Agreements,
including the Shared Collateral and any Substitute
Collateral.
4.2 Required Collateralization (FTX). If FTX or any
Subsidiary of FTX (other than FRP pursuant to the FTX Credit
Agreement, or any other Subsidiary of FTX or FRP that becomes a
direct borrower under the FTX Credit Agreement) grants, pledges
or otherwise furnishes any Lien or other collateral or security
to any bank pursuant to the FTX Credit Agreement, the FTX
Guaranty or the FTX Intercreditor Agreement, then
contemporaneously therewith (and with equal priority on a ratable
basis as provided in the FTX Intercreditor Agreement), FTX and/or
such Subsidiary, as the case may be, shall (i) grant, pledge or
otherwise furnish the same Lien and other collateral and security
to the Banks (or to the collateral agent under the FTX
Intercreditor Agreement for the benefit of the Banks) as security
for the FTX Guaranty and (ii) execute, acknowledge, file, record
and deliver to the Banks (or to the collateral agent under the
FTX Intercreditor Agreement for the benefit of the Banks) the
same security instruments and other agreements which are
executed, acknowledged, filed, recorded or delivered to or for
the benefit of such banks or other lenders or creditors, in each
case revised reflecting the Banks as the secured party and the
Obligations as the secured indebtedness, all as contemplated by
the FTX Intercreditor Agreement.
4.3 Required Collateralization (FCX). If FCX or any
Subsidiary (other than FI pursuant to the FCX Credit Agreement or
the FI Credit Agreement or any Subsidiaries of FI pursuant to the
FCX Credit Agreement or the FI Credit Agreement or any other
Subsidiary of FCX that becomes a direct borrower under the FCX
Credit Agreement) grants, pledges or otherwise furnishes any Lien
or other collateral or security to any bank or other lender or
creditor under or pursuant to the FCX Credit Agreement, or the
FCX Guaranty or the FCX Intercreditor Agreement, then
contemporaneously therewith (and with equal priority on a ratable
basis as provided in the FCX Intercreditor Agreement), FCX and/or
such Subsidiary, as the case may be, shall (i) grant, pledge or
otherwise furnish the same Lien and other collateral and security
to the Banks (or to the collateral agent under the FCX
Intercreditor Agreement for the benefit of the Banks) as security
for the FCX Guaranty and (ii) execute, acknowledge, file, record
and deliver to the Banks (or to the Collateral Agent under the
FCX Intercreditor Agreement for the benefit of the Banks) the
same security instruments and other agreements which are
executed, acknowledged, filed, recorded or delivered to or for
the benefit of such banks or other lenders or creditors, in each
case revised reflecting the Banks as the secured party and the
Obligations as the secured indebtedness, all as contemplated by
the FCX Intercreditor Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES
FM Properties represents and warrants to the Banks as of the
Effective Date:
5.1 Partnership Existence; Compliance with Law. (a) FM
Properties (i) is a general partnership duly formed, validly
existing and in good standing under the laws of the State of
Delaware, (ii) has the partnership power and authority to own and
operate its properties, to operate the property it operates and
to conduct the business in which it is currently engaged, (iii)
is duly qualified to do business and is in good standing in every
jurisdiction in which it owns a material amount of property or
conducts a material amount of business and in which such
qualification is necessary, and (iv) is in compliance with all
Requirements of Law except to the extent that the failure to
comply therewith could not have a material adverse effect on the
business, operations, property or financial or other condition of
FM Properties, and could not materially and adversely affect the
ability of FM Properties to perform its obligations under this
Agreement and the Notes.
(b) FTX (i) is a corporation duly formed, validly existing
and in good standing under the laws of the State of Delaware,
(ii) has the corporate power and authority to own and operate its
properties, to operate the property it operates and to conduct
the business in which it is currently engaged, (iii) is duly
qualified to do business and is in good standing in every
jurisdiction in which it owns a material amount of property or
conducts a material amount of business and in which such
qualification is necessary, and (iv) is in compliance with all
Requirements of Law except to the extent that the failure to
comply therewith could not have a material adverse effect on the
business, operations, property or financial or other condition of
FTX, and could not materially and adversely affect the ability of
FTX to perform its obligations under this Agreement and the FTX
Guaranty.
(c) FCX (i) is a corporation duly formed, validly existing
and in good standing under the laws of the State of Delaware,
(ii) has the corporate power and authority to own and operate its
properties, to operate the property it operates and to conduct
the business in which it is currently engaged, (iii) is duly
qualified to do business and is in good standing in every
jurisdiction in which it owns a material amount of property or
conducts a material amount of business and in which such
qualification is necessary, and (iv) is in compliance with all
Requirements of Law except to the extent that the failure to
comply therewith could not have a material adverse effect on the
business, operations, property or financial or other condition of
FCX, and could not materially and adversely affect the ability of
FCX to perform its obligations under this Agreement and the FCX
Guaranty.
5.2 Partnership Power; Authorization; Enforceable
Obligations. (a) FM Properties has the power and authority and
the legal right to make, deliver and perform its obligations
under this Agreement and the Notes and has taken (and each of its
partners has taken) all necessary action to authorize the
incurring of the Obligations on the terms and conditions of this
Agreement and the Notes and to authorize the execution and
delivery of this Agreement and the performance of this Agreement
and the Notes. No consent or authorization of, filing with, or
other act by or in respect of any governmental authority is
required in connection with the Obligations thereunder or with
the execution and delivery, performance, validity or
enforceability of this Agreement or the Notes. This Agreement
has been executed and delivered on behalf of FM Properties and
constitutes a legal, valid and binding obligation of FM
Properties enforceable against FM Properties in accordance with
its terms, except as enforceability may be affected by general
principles of equity or may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally.
(b) FTX has the power and authority and the legal right to
make, deliver and perform its obligations under this Agreement
and the FTX Guaranty and has taken all necessary corporate action
to authorize the guaranty of the Obligations on the terms and
conditions of this Agreement and the FTX Guaranty and to
authorize the execution and delivery of this Agreement and the
performance of this Agreement and the FTX Guaranty. No consent
or authorization of, filing with, or other act by or in respect
of any governmental authority is required in connection with the
Obligations thereunder or with the execution and delivery,
performance, validity or enforceability of this Agreement or the
FTX Guaranty. This Agreement and the FTX Guaranty have been
executed and delivered on behalf of FTX and constitutes a legal,
valid and binding obligation of FTX enforceable against FTX in
accordance with its terms, except as enforceability may be
affected by general principles of equity or may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium (in
the case of such events relating to FTX as distinct from FM
Properties) or similar laws affecting the enforcement against FTX
of creditors' rights generally.
(c) FCX has the power and authority and the legal right to
make, deliver and perform its obligations under this Agreement
and the FCX Guaranty and has taken all necessary corporate action
to authorize the guaranty of the Obligations on the terms and
conditions of this Agreement and the FCX Guaranty and to
authorize the execution and delivery of this Agreement and the
performance of this Agreement and the FCX Guaranty. No consent
or authorization of, filing with, or other act by or in respect
of any governmental authority is required in connection with the
Obligations thereunder or with the execution and delivery,
performance, validity or enforceability of this Agreement, the
Notes or the FCX Guaranty. This Agreement and the FCX Guaranty
have been executed and delivered on behalf of FCX and constitutes
a legal, valid and binding obligation of FCX enforceable against
FCX in accordance with its terms, except as enforceability may be
affected by general principles of equity or may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium (in
the case of such events relating to FCX as distinct from FM
Properties) or similar laws affecting the enforcement against FCX
of creditors' rights generally.
5.3 No Legal Bar. The execution and delivery of this
Agreement by FM Properties, FTX and FCX and the performance of
this Agreement by FM Properties, FTX and FCX, the Notes by FM
Properties, the FTX Guaranty by FTX and the FCX Guaranty by FCX
will not violate any Requirement of Law or Contractual Obligation
of FM Properties, FTX or FCX and will not result in or require
the creation or imposition of any material Lien on any of its
property or assets or revenues pursuant to the provisions of a
mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which FM Properties, FTX or FCX is a
party or by which it is contractually bound, other than as
contemplated by the Intercreditor Agreements, respectively.
5.4 No Material Litigation. No litigation, investigation
or proceeding of or before any arbitrator or governmental
authority is pending or, to the knowledge of FM Properties, FTX
or FCX, threatened by or against FM Properties, FTX or FCX or
against any of its properties or revenues (a) with respect to
this Agreement, the Notes, the FTX Guaranty or the FCX Guaranty,
or any of the transactions contemplated hereby, or (b) that, if
adversely determined, would have a material adverse effect on the
business, operations, property or financial or other condition of
FM Properties, FTX or FCX, except as follows: (i) FM Properties
Operating Co. v. City of Austin, No. A-94-CA-647-IN, United
States District Court for the Western District of Texas, Austin
Division (pending appeal to the 5th Circuit); and (ii) Notice of
Intent to Sue dated May 7, 1995 by SOS Legal Defense Fund with
the Secretary of the Interior providing the 60-day notice
requested under the Endangered Species Act to attach the 10-A
Permit issued to FM Properties Operating Co.
5.5 No Default. Neither FM Properties, FTX nor FCX is in
default under or with respect to any Contractual Obligation in
any respect that could be material and adverse to the business,
operations, property or financial or other condition of FM
Properties, FTX or FCX or that could materially adverse affect
the ability of FM Properties, FTX or FCX to perform its
obligations under this Agreement, the Notes, the FTX Guaranty or
the FCX Guaranty. No Default or Event of Default hereunder has
occurred and is continuing.
5.6 Title, etc. FM Properties, FTX and FCX have good and
valid title to their material properties, assets and revenues
(exclusive of oil, gas and other mineral properties on which no
development or production activities following discovery of
commercially exploitable reserves are being conducted), free and
clear of all Liens except such as are permitted by the FM
Properties Credit Agreement, the FTX Credit Agreement and the FCX
Credit Agreement and except for covenants, restrictions, rights,
easements and minor irregularities in title which do not
individually or in the aggregate interfere with the occupation,
use and enjoyment by FM Properties, FTX or FCX of such properties
and assets in the normal course of business as presently
conducted or materially impair the value thereof for use in such
business.
5.7 No Burdensome Restrictions. No Contractual Obligation
of FM Properties, FTX or FCX and no Requirement of Law materially
adversely affects or insofar as FM Properties, FTX or FCX may
reasonably foresee will materially adversely affect the ability
of FM Properties, FTX or FCX to perform their obligations under
this Agreement, the Notes, the FTX Guaranty or the FCX Guaranty.
5.8 Taxes. FM Properties, FTX and FCX have filed or caused
to be filed all tax returns that to their knowledge are required
to be filed unless appropriate extensions have been obtained and
have paid all taxes shown to be due and payable on said returns
or on any assessments made against them or any of their property
and all other taxes, fees or charges of any other governmental
authority (except to the extent protested in good faith by
appropriate proceedings); and no tax liens have been filed and,
to the knowledge of FM Properties, FTX or FCX, as the case may
be, no claims are being asserted with respect to any such taxes,
fees or other charges.
5.9 Federal Regulations. Neither FM Properties, FTX nor
FCX is or will be engaged principally or as one of its important
activities, in the business of extending credit for the purpose
of "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation
U of the Board of Governors of the Federal Reserve System as now
and from time to time hereafter in effect. No part of the
proceeds of any loans hereunder will be used for "purchasing" or
"carrying" "margin stock" as so defined or for any purpose that
violates, or that would be inconsistent with, the provisions of
the Regulations of such Board of Governors. If requested by any
Seller, FM Properties, FTX and FCX will furnish to the Banks a
statement in conformity with the requirements of Federal Reserve
Form U-1 referred to in said Regulation U to the foregoing
effect.
5.10 ERISA. No ERISA Event has occurred with respect to
any Plan.
5.11 Investment Company Act. FM Properties is not an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of
1940, as amended.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Effectiveness. The following constitute
conditions precedent to the effectiveness of this Agreement:
(a) Agreement. The Banks shall have received this
Agreement, executed by a Responsible Officer of FM Properties,
FTX and FCX.
(b) First Amendment to Loan Participation Agreement. The
Banks shall have executed the First Amendment to Loan
Participation Agreement between the Banks (i) extending the
maturity date of the Notes, (ii) providing for the interest rate
on the Notes after January 2, 1996, and (iii) reflecting the
provisions of this Agreement.
(c) Intercreditor Agreements, Guaranties and Security
Agreements. The Banks shall have received executed copies of the
Intercreditor Agreements, FTX Guaranty and FCX Guaranty and if
requested by the Banks, copies of the security agreements
executed in connection therewith, in form and substance
satisfactory to the Banks.
(d) Credit Agreements. The Banks shall have received
copies of the executed FM Properties Credit Agreement, FTX Credit
Agreement, FCX Credit Agreement and FI Credit Agreement, with all
exhibits and schedules, in form and substance satisfactory to the
Banks.
(e) FM Properties Partnership and Corporate Proceedings.
(i) The Banks shall have received a certificate of the Secretary
or Assistant Secretary of FTX, as managing general partner of FM
Properties, certifying (i) that attached thereto is a true and
correct copy of the partnership agreement of FM Properties, (ii)
that attached thereto is a true and correct copy of the
certificate of incorporation of FTX, (iii) that attached thereto
is a true and correct copy of resolutions of the board of
directors of FTX, as managing general partner of FM Properties,
authorizing the execution of this Agreement and all documents
related hereto, and (iv) the incumbency of the officer(s) of FTX,
as managing general partner, executing this Agreement and all
documents related hereto.
(f) FTX Corporate Proceedings. (i) The Banks shall have
received a certificate of the Secretary or Assistant Secretary of
FTX, certifying (i) that attached thereto is a true and correct
copy of resolutions of the board of directors of FTX authorizing
the execution of this Agreement and the FTX Guaranty and all
documents related thereto and (ii) the incumbency of the
officer(s) of FTX, executing this Agreement, the FTX Guaranty and
all documents related hereto.
(g) FCX Corporate Proceedings. (i) The Banks shall have
received a certificate of the Secretary or Assistant Secretary of
FCX, certifying (i) that attached thereto is a true and correct
copy of resolutions of the board of directors of FCX authorizing
the execution of this Agreement and the FCX Guaranty and all
documents related thereto and (ii) the incumbency of the
officer(s) of FCX, executing this Agreement, the FCX Guaranty and
all documents related hereto.
(h) Legal Opinions. The Banks shall have received (i) an
opinion of John G. Amato, counsel to FM Properties, dated the
Effective Date in form and substance satisfactory to the Agent
and addressed to the Banks, and (ii) an opinion of Davis Polk &
Wardwell, counsel to FTX and FCX, dated the Effective Date in
form and substance satisfactory to the Agent and addressed to the
Banks.
(i) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on the Effective
Date or would result after giving effect to the FCX Spin Off.
(j) Additional Matters. All other documents and legal
matters in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory in form and substance
to the Banks, the Agent and their counsel.
SECTION 7. AFFIRMATIVE COVENANTS
FM Properties hereby agrees that, so long as this Agreement
remains in effect and any Note remains outstanding and unpaid,
unless the Banks shall have otherwise consented in writing, FM
Properties shall:
7.1 Financial Statements. Furnish to the Banks and the
Agent the following:
(a) within 95 days after the end of each fiscal year
of FM Properties, the Company, FTX and FCX, a consolidated
balance sheet of FM Properties, the Company, FTX and FCX as
at the close of such fiscal year and consolidated statements
of operations and of cash flow of FM Properties, the
Company, FTX and FCX, for such year, with the opinion
thereon of Arthur Andersen & Co. or other independent public
accountants of national standing (as to the Company, FTX and
FCX) and certified by a Responsible Officer of FTX (as to FM
Properties);
(b) within 50 days after the end of each of the first
three quarters of each fiscal year of FM Properties, the
Company, FTX and FCX, consolidated balance sheets of FM
Properties, the Company, FTX and FCX as at the end of such
quarter and consolidated statements of operations of FM
Properties, the Company, FTX and FCX for such quarter and
consolidated statements of operations and of cash flow of FM
Properties, the Company, FTX and FCX for the period from the
beginning of the fiscal year to the end of such quarter,
certified by a Responsible Officer of FTX (as to FM
Properties and FTX), the Company (as to the Company) and of
FCX (as to FCX);
(c) promptly after their becoming available, (a)
copies of all financial statements, reports and proxy
statements which the Company, FTX or FCX shall have sent to
their respective shareholders generally, (b) copies of all
registration statements (excluding registration statements
relating to employee benefit plans) and regular and periodic
reports, if any, which the Company, FTX or FCX shall have
filed with the SEC or with any national securities exchange
and (c) if requested by any Bank, copies of each annual
report filed with any governmental agency pursuant to ERISA
with respect to each Plan of FM Properties or any of its
Subsidiaries;
(d) within 95 days after the end of each fiscal year
of FM Properties, a certificate by a Responsible Officer of
FM Properties, to the effect that no Event of Default or
Default has occurred and is continuing, or if an Event of
Default or Default has occurred and is continuing,
specifying the nature and extent thereof and the corrective
action (if any) proposed to be taken with respect thereto;
(e) promptly upon the occurrence of any ERISA Event,
Event of Default, Default (as such terms are defined in the
FM Properties Credit Agreement, the FTX Credit Agreement,
the FCX Credit Agreement or the FI Credit Agreement) or the
commencement of any proceeding regarding FM Properties, the
Company, FTX or FCX or any Subsidiary of such entities under
any Federal or state bankruptcy law, notice thereof,
describing the same in reasonable detail;
(f) promptly upon the occurrence of any development
that, in the judgment of FM Properties, has resulted in, or
could reasonably be anticipated to result in, a material
adverse effect on the business, assets, operations or
financial condition of FM Properties or its ability to
comply with its obligations under this Agreement or the
Notes, notice thereof, describing the same in reasonable
detail;
(g) Copies of (i) all executed amendments to the FM
Properties Credit Agreement, the FTX Credit Agreement, the
FCX Credit Agreement or the FI Credit Agreement as soon as
available and copies of all requests for amendments to the
FM Properties Credit Agreement, the FTX Credit Agreement,
the FCX Credit Agreement or the FI Credit Agreement
simultaneously with the distribution of such proposed
amendments to the lenders (as a whole) under the FM
Properties Credit Agreement, the FTX Credit Agreement, the
FCX Credit Agreement or the FI Credit Agreement; and (ii)
all requests for consent or waiver submitted by FM
Properties to the lenders (as a whole) under the FM
Properties Credit Agreement, by FTX or FRP under the FTX
Credit Agreement, by FCX or FI under the FCX Credit
Agreement or by FI under the FI Credit Agreement, in each
case as soon as available.
(h) from time to time, such further information
regarding the business, affairs and financial condition of
FM Properties, the Company, FTX or FCX or any Subsidiary of
such entities as the Agent or any Bank may reasonably
request.
All such financial statements shall be complete and correct in
all material respects and be prepared in reasonable detail and in
accordance with GAAP consistently applied.
7.2 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent,
as the case may be, all material Indebtedness, Contingent
Obligations, taxes, assessments or governmental charges or
levies, and other obligations of whatever nature (except as
contested in good faith by appropriate proceedings) of FM
Properties.
7.3 Notices; Reports. Promptly give notice, or a report,
as the case may be, to the Agent and Banks:
(a) Of the occurrence of any Default or Event of
Default (stating that such notice is a "notice of default")
and in addition to such notice deliver to the Banks a
certificate signed by a Responsible Officer describing in
detail the steps FM Properties has taken or proposes to take
to remedy such Default or Event of Default;
(b) Of any (i) default or event of default under any
material Contractual Obligation of FM Properties, FTX or FCX
or (ii) litigation, investigation or proceeding which may
exist at any time between FM Properties, FTX or FCX and any
governmental authority, which in either case might have a
material adverse effect on the business, operations,
property or financial or other condition of FM Properties,
FTX or FCX;
(c) Of any litigation or proceeding affecting FM
Properties, FTX or FCX that could have a material adverse
effect upon the business, operations, property or financial
or other condition of FM Properties, FTX or FCX;
(d) Concurrently with the delivery of the financial
statements referred to in Subsection 7.1(a) and (b), a
certificate of a Responsible Officer of each of FM
Properties, FTX or FCX, as the case may be, stating that, to
the best of such officer's knowledge, each of FM Properties,
FTX or FCX, as the case may be, during such period has
observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this
Agreement to be observed, performed or satisfied by it, and
that such officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate;
(e) Of the following events, as soon as possible and
in any event within 10 days after FM Properties, FTX or FCX
knows of: (i) the occurrence or expected occurrence of any
ERISA Event with respect to any Plan, or (ii) the
institution of proceedings or the taking or expected taking
of any other action by PBGC, FM Properties, FTX or FCX or
any Commonly Controlled Entity to terminate, withdraw or
partially withdraw from any Plan with respect to a
Multiemployer Plan, the Reorganization or Insolvency of the
Plan (as defined by ERISA) and in addition to such notice,
deliver to the Agent whichever of the following may be
applicable: (A) a certificate of the Responsible Officer of
FM Properties, FTX or FCX, as the case may be, setting forth
details as to such ERISA Event and the action that FM
Properties, FTX or FCX or Commonly Controlled Entity
proposes to take with respect thereto, together with a copy
of any notice of such ERISA Event that may be required to be
filed with PBGC, or (B) any notice delivered by PBGC
evidencing its intent to institute such proceedings or any
notice to PBGC that such Plan is to be terminated, as the
case may be;
(f) Of a material adverse change in the business,
operations, property or financial or other condition of FM
Properties, FTX or FCX;
(g) In the event of the filing or institution of
voluntary or involuntary bankruptcy proceedings by or
against FM Properties, the Company, FTX or FCX.
Each notice pursuant to this subsection shall be accompanied by a
statement of the Responsible Officer of FM Properties, FTX or
FCX, as the case may be, setting forth details of the occurrence
referred to therein and stating what action FM Properties, FTX or
FCX, as the case may be, proposes to take with respect thereto.
For all purposes of clause (e) of this subsection, FM Properties,
FTX or FCX, as the case may be, shall be deemed to have all
knowledge attributable to the administrator of such Plan.
SECTION 8. ADDITIONAL COVENANTS
FM Properties, FTX and FCX hereby agree that, so long as any
Note remains outstanding and unpaid, FM Properties, FTX or FCX,
as the case may be, shall:
8.1 Covenants Incorporated by Reference from the FM
Properties Credit Agreement. (a) FM Properties will at all times
be in full compliance with Section 4.1 of the FM Properties
Credit Agreement, which is hereby incorporated by reference
herein with the same force and effect as though fully set forth
herein in its entirety; provided that the references therein to
"Default", "Event of Default", "Bank" or "Agents" are replaced
with the references to "Default", "Event of Default", "Banks" and
"Agent" hereunder, respectively.
(b) FM Properties will not at any time fail to be in full
compliance with Section 4.2 of the FM Properties Credit
Agreement, which is hereby incorporated by reference herein with
the same force and effect as though fully set forth herein in its
entirety; provided that the references therein to "this
Agreement", "this Agreement", "this Agreement", the Pledge
Agreement or the Security Agreement", "Default", "Event of
Default", "Banks", "Banks", "Required Banks" and "Agents" or
"Agent" are replaced herein with references to "this Agreement",
"Default", "Event of Default", "Banks" and "Agent" hereunder,
respectively.
(c) FM Properties shall not amend, supplement, change,
terminate or waive any material provision of any Material
Agreement (as defined in the FM Properties Credit Agreement)
unless the Agent shall have received 30 days' notice of such
amendment, supplement, change, termination or waiver and the
Agent shall not have objected thereto on the ground that it
would, in its judgment, adversely affect the rights or interest
of the Banks; provided that if FM Properties shall not have given
such 30 days' notice, FM Properties shall not amend, supplement,
change, terminate or waive any material provision of any Material
Agreement unless the Agent shall have given its written consent
thereto.
(d) In the event that (i) any of the sections of the FM
Properties Credit Agreement in effect as of the Effective Date
referred to in this Agreement are renumbered or relocated within
the FM Properties Credit Agreement, this Agreement shall be
deemed to be amended to refer to the redesignated or relocated
sections; and (ii) to the extent that any of the sections of the
FM Properties Credit Agreement are amended or waivers are
obtained prior to the occurrence of an Event of Default under the
FM Properties Credit Agreement, this Agreement shall henceforth
refer to such sections as amended or waived.
8.2 Covenants Incorporated by Reference from the FTX Credit
Agreement. (a) FTX will at all times be in full compliance with
Section 5.1 of the FTX Credit Agreement, which is hereby
incorporated by reference herein with the same force and effect
as though fully set forth herein in its entirety; provided that
the references therein to "Default", "Event of Default", "Bank"
or "Agents" are replaced with the references to "Default", "Event
of Default", "Banks" and "Agent" hereunder, respectively.
(b) FTX will not at any time fail to be in full compliance
with Section 5.2 of the FTX Credit Agreement, which is hereby
incorporated by reference herein with the same force and effect
as though fully set forth herein in its entirety; provided that
the references therein to "this Agreement", "this Agreement", the
Pledge Agreement or the Security Agreement", "Default", "Event of
Default", "Banks", "Required Banks" and "Agents" or "Agent" are
replaced herein with references to "this Agreement", "this
Agreement", "Default", "Event of Default", "Banks", "Banks" and
"Agent" hereunder, respectively.
(c) In the event that (i) any of the sections of the FTX
Credit Agreement in effect as of the Effective Date referred to
in this Agreement are renumbered or relocated within the FTX
Credit Agreement, this Agreement shall be deemed to be amended to
refer to the redesignated or relocated sections; and (ii) to the
extent that any of such sections of the FTX Credit Agreement are
amended or waivers are obtained prior to the occurrence of an
Event of Default under the FTX Credit Agreement, this Agreement
shall henceforth refer to such sections as amended or waived.
Notwithstanding the foregoing, in the event that any amendment or
waiver of the FTX Credit Agreement deletes (rather than amends or
waives) any one or more of the following financial covenants:
Sections 5.2(f) (EBITDA Ratio), 5.2(h) (Debt to Capital Ratio) or
5.2(q) (Equity Payments) without the prior written consent of the
Banks, then, for purposes of complying with the provisions of
this Section 8.2, the provisions of Sections 5.2(f), 5.2(h) and
5.2(q) shall be deemed to have continued as in effect immediately
prior to the deletion of such section(s).
8.3 Covenants Incorporated by Reference from the FCX Credit
Agreement. (a) FCX will at all times be in full compliance with
Section 5.1 of the FCX Credit Agreement, which is hereby
incorporated by reference herein with the same force and effect
as though fully set forth herein in its entirety; provided that
the references therein to "Default", "Event of Default", "Bank"
or "Agents" are replaced with the references to "Default", "Event
of Default", "Banks" and "Agent" hereunder, respectively.
(b) FCX will not at any time fail to be in full compliance
with Section 5.2 of the FCX Credit Agreement, which is hereby
incorporated by reference herein with the same force and effect
as though fully set forth herein in its entirety; provided that
the references therein to "this Agreement", "this Agreement, the
Pledge Agreement or the Security Agreement", "Default", "Event of
Default", "Banks", "Required Banks" and "Agents" or "Agent" are
replaced herein with references to "this Agreement", "this
Agreement", "Default", "Event of Default", "Banks", "Banks" and
"Agent" hereunder, respectively.
(c) In the event that (i) any of the sections of the FCX
Credit Agreement in effect as of the Effective Date referred to
in this Agreement are renumbered or relocated within the FCX
Credit Agreement, this Agreement shall be deemed to be amended to
refer to the redesignated or relocated sections; and (ii) to the
extent that any of such sections of the FCX Credit Agreement are
amended or waivers are obtained prior to the occurrence of an
Event of Default under the FCX Credit Agreement, this Agreement
shall henceforth refer to such sections as amended or waived.
Notwithstanding the foregoing, in the event that any amendment or
waiver of the FCX Credit Agreement deletes (rather than amends or
waives) any one or more of the following financial covenants:
Sections 5.2(b) (Borrowing Base Limits) 5.2(f) (EBITDA Ratio) or
5.2(q) (Equity Payments) without the prior written consent of the
Banks, then, for purposes of complying with the provisions of
this Section 8.3, the provisions of Sections 5.2(b), 5.2(f) and
5.2(q) shall be deemed to have continued as in effect immediately
prior to the deletion of such section(s).
SECTION 9. EVENTS OF DEFAULT
9.1 Event of Default. Upon the occurrence of any of the
following events:
(a) FM Properties shall default for three or more days
in the payment when due (whether at the due date thereof, at
a date fixed for prepayment thereof, by acceleration thereof
or otherwise) of any principal on any Note; or
(b) FM Properties shall default for three or more days
in the payment when due of any interest on any Note or any
other amount payable under this Agreement; or
(c) Any representation or warranty made by FM
Properties herein or by FTX or FCX or which is contained in
any certificate, document or financial or other statement
furnished at any time under or in connection with this
Agreement shall prove to have been incorrect in any material
respect on or as of the date made; or
(d) FM Properties shall default (i) in the observance
or performance of any of the covenants or agreements
contained in Section 7 or Section 8.1(a) hereof, and such
default shall remain unremedied for 30 days after written
notice thereof shall have been given to FM Properties by the
Agent; or (ii) in the observance or performance of any of
the covenants or agreements contained in Section 8.1(b)
hereof (except for a change in FM Properties' fiscal year);
or
(e) FTX or FCX shall default (i) in the observance of
any of the covenants or agreements contained in Section
8.2(a) or Section 8.3(a) hereof, and such default shall
remain unremedied for 30 days after written thereof shall
have been given to FM Properties by the Agent; or (ii) in
the observance of any of the covenants or agreements
contained in Section 8.2(b) or Section 8.3(b) hereof (except
for a change in FTX's or FCX's fiscal year); or
(f) FM Properties, FTX and FCX shall fail to pay any
amounts due to the Agent pursuant to the Agent's Fee
Agreement on or before the second Business Day following
notice of non-payment from the holder of the Notes; or
(g) An "Event of Default" (as defined in the FM
Properties Credit Agreement, the FTX Credit Agreement, the
FCX Credit Agreement or the FI Credit Agreement) shall occur
and be continuing; or
(h) (i) FM Properties, FTX or FCX, or any
Subsidiaries thereof, shall commence any case, proceeding or
other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for
it or for all or any substantial part of its assets, or FM
Properties, FTX or FCX, or any Subsidiary thereof, shall
make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against FM Properties, FTX
or FCX, or any Subsidiaries thereof, any case, proceeding or
other action of a nature referred to in case, proceeding or
other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against FM Properties, FTX or FCX,
or any Subsidiaries thereof, any case, proceeding or other
action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of
an order for any such relief which shall not have been
vacated, discharged or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) FM
Properties, FTX or FCX, or any Subsidiaries thereof, shall
take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii) or (iii) above; or (v) FM
Properties, FTX or FCX, or any Subsidiaries thereof, shall
generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they may become
due;
(i) an ERISA Event shall have occurred with respect to
any Plan or Multiemployer Plan that, when taken together
with all other ERISA Events, reasonably could be expected to
result in liability of FM Properties, FTX or FCX in an
aggregate amount exceeding the following threshold amounts
or requires payments exceeding the following threshold
amounts in any year: for FM Properties $5,000,000, for FTX
$10,000,000 or for FCX $10,000,000;
(j) the FTX Guaranty or the FCX Guaranty shall cease
to be, or shall be asserted by FM Properties, FTX or FCX or
any of their affiliates not to be in full force and effect
and enforceable in all material respects in accordance with
its terms; or
(k) FTX shall for any reason cease to be the sole
managing general partner of FM Properties or the functions
of FTX as the managing general partner of FM Properties
shall generally be carried out for any reason by any person
other than FTX; provided that FTX may designate any of its
Subsidiaries to discharge the duties of FTX as managing
general partner of the FM Properties;
then, and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (h) above,
the Obligations hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement including the prepayment
premium described in Subsection 9.2 hereof and the Notes shall
immediately become due and payable, and (B) if such event is any
other Event of Default, the holders of the Notes may, by notice
to FM Properties, declare the Obligations hereunder (with accrued
interest thereon) and all other amounts owing under this
Agreement and the Notes to be due and payable forthwith,
whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby
expressly waived.
9.2 Acceleration Payment. In the event that the
Obligations become due and payable in full pursuant to Subsection
9.1, FM Properties shall immediately pay Hibernia, in addition to
all other amounts due hereunder, an acceleration premium equal to
any amount which FM Properties would have been obligated to pay
Hibernia in the case of a voluntary prepayment for the early
termination of the Exchange Agreement pursuant to Section 3.2
hereof.
SECTION 10. FTX GUARANTEE
10.1 Guarantee by FTX. Pursuant to the FTX Guaranty and
the FCX Guaranty, FTX and FCX taken together, guarantee the full
repayment of principal and interest on the Notes. As additional
consideration for the Banks permitting the FCX Spin Off, and in
addition to the Obligations guaranteed by FTX pursuant to the FTX
Guaranty and by FCX pursuant to the FCX Guaranty, FTX hereby
unconditionally and irrevocably guarantees, solidarily as a
primary obligor and not merely as a surety, the due and punctual
payment of (i) the prepayment premium described in Section 3.2
hereof, (ii) the costs and expenses described in Section 11.4(a)
hereof or the acceleration payment described in Section 9.2
hereof, (iii) the indemnity payments described in Section 11.4(b)
hereof, and (iv) all other Obligations (other than the payment of
principal and interest on the Notes) of FM Properties pursuant to
this Agreement ("Other Amounts").
FTX waives presentment to, demand of payment from and
protest to FM Properties or FTX of any of the Other Amounts and
also waives notice of acceptance of its guarantee and notice of
protest for nonpayment. The obligations of FTX under this
Section shall not be affected by (a) the failure of the Agent to
assert Other Amounts against FM Properties under the provisions
of this Agreement, any other security documents, any
intercreditor document, or otherwise; (b) any rescission, waiver,
amendment or modification of any of the terms or provisions of
the Other Amounts; (c) the release of any guarantee or any
security held by the Agent for the Other Amounts; or (d) the
failure of the Agent to exercise any right or remedy against any
other guarantor of the Other Amounts.
FTX further agrees that its guarantee constitutes a
guarantee of payment when due and not of collection and waives
any right to require that any resort be had by the Agent to any
other guarantee or any security held for payment of the Other
Amounts or to any balance of any deposit account or credit on the
books of the Agent or any Bank in favor of FM Properties or to
any other partner of FM Properties or any other Person.
FTX further agrees that its guarantee shall continue to
be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on the
Other Amounts (including, without limitation, any payment
pursuant to this guarantee) is rescinded or must otherwise be
restored by the Agent upon the bankruptcy or reorganization of FM
Properties or otherwise.
Upon payment by FTX of the Other Amounts to the Agent
and the Banks as provided above in this Section, all rights of
FTX against FM Properties arising as a result thereof by way of
right of subrogation or otherwise shall in all respects be
subordinated and junior in right of payment to the prior payment
in full of all FM Properties Obligations to the Banks and shall
not be exercised by FTX prior to payment in full of all FM
Properties Obligations.
SECTION 11. MISCELLANEOUS
11.1 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be prior and
in writing or by telegraph, telecopy or telex and, unless
otherwise expressly provided herein, shall be deemed to have been
duly given or made upon receipt by the proper party, or when
delivered by hand, after three days when deposited in the mail,
air postage prepaid, or, in the case of telegraphic notice, when
delivered to the telegraph company, or, in the case of telex
notice, when sent, answerback received, addressed as follows in
the case of FM Properties, FTX, FCX, the Banks and the Agent, or
to such address as may be hereafter notified in writing by the
respective parties hereto and any future holders of the Notes:
FM Properties: FM Properties Operating Co.
1615 Poydras Street
P. O. Box 61119
New Orleans, Louisiana 70112/70161
Attention: Treasury Department
Telex No. 8109515386
Answerback FREE-SULPH NO
Telecopy No. (504 582-4511
FTX: Freeport-McMoRan Inc.
1615 Poydras Street
P. O. Box 61119
New Orleans, Louisiana 70112/70161
Attention: Treasury Department
Telex No. 8109515386
Answerback: FREE-SULPH NO
Telecopy No.: (504) 582-4511
FCX: Freeport-McMoRan Copper & Gold Inc.
1615 Poydras Street
P. O. Box 61119
New Orleans, Louisiana 70112/70161
Attention: Treasury Department
Telex No. 8109515386
Answerback: FREE-SULPH NO
Telecopy No.: (504) 582-4511
Agent: Hibernia National Bank
313 Carondelet Street
P. O. Box 61540
New Orleans, Louisiana 70112/70161
Attention: Manager, Commercial Banking
Telex No.: 587492
Answerback: HIBBANK-NLN
Telecopy No.: (504) 533-2060
Banks: Hibernia National Bank
313 Carondelet Street
P. O. Box 61540
New Orleans, Louisiana 70112/70161
Attention: Bruce Ross
Telex No.: 587492
Answerback: HIBBANK-NLN
Telecopy No.: (504) 533-2060
Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Ralph Iskander
Telex No.: 353006
Answerback: ABSCNYK
Telecopy No.: (212) 270-4711
11.2 Amendments and Waivers. With the written consent of
the Banks, FTX and FCX, FM Properties may, from time to time,
enter into written amendments, supplements or modifications
hereto for the purpose of adding any provisions to this Agreement
or the Notes or changing in any manner the rights of FM
Properties hereunder or thereunder, and the Banks may execute and
deliver to FM Properties a written instrument waiving, on such
terms and conditions as the Banks may specify in such instrument,
any of the requirements of this Agreement or the Notes or any
Default or Event of Default and its consequences. Any such
waiver and any such amendment, supplement or modification shall
be binding upon FM Properties, the Banks and all future holders
of the Notes. In the case of any waiver, FM Properties and the
Banks shall be restored to their former position and rights
hereunder and under the outstanding Notes, and any Default or
Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent
thereon.
11.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent or
the Banks, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative
and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 Payment of Expenses and Taxes. FM Properties agrees
(a) to pay or reimburse the Agent and the Banks for all their
costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes, the
FTX Guaranty and the FCX Guaranty, and any such other documents
including, without limitation, reasonable fees and disbursements
of counsel to the Banks and (b) to pay, indemnify, and hold the
Banks and Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the enforcement or
non-performance of this Agreement, the Notes, the FTX Guaranty
and the FCX Guaranty, unless caused by the misconduct or
negligence of the Banks or the Agent. The agreements in this
Subsection shall survive the termination of this Agreement.
11.5 The Agent. (a) The Banks acknowledge that
simultaneously with the FM Properties Transfer, the Banks
executed a Loan Participation Agreement dated as of May 5, 1995,
in which the Agent, as the holder of record of the Notes, sold a
participation interest in the Notes to Chemical. Simultaneously
with the execution of this Agreement, the Banks have executed a
first amendment to the aforesaid Loan Participation Agreement (i)
extending the maturity date of the Notes, (ii) providing for the
interest rate on the Notes after January 2, 1996, and (iii)
otherwise reflecting the terms of this Agreement. The Banks
agree that the right of the Agent and the Banks, between
themselves, shall be as set forth in said Loan Participation
Agreement as amended.
(b) FM Properties agrees to pay Agent, for Hibernia's
account, a non-refundable agent's fee of $15,000 on January 3,
1996. This payment is in addition to the obligation of FM
Properties to pay certain exchange fees and agent's fees to the
Agent pursuant to the Amended and Restated Agent's Fee Agreement
among FM Properties, FTX and the Agent dated as of May 5, 1995.
11.6 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto or
in connection herewith shall survive the execution and delivery
of this Agreement and the Notes.
11.7 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of
separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
11.8 Governing Law. This Agreement and the Notes and the
rights and obligations of the parties under this Agreement and
the Notes shall be governed by, and construed and interpreted in
accordance with, the law of the State of Louisiana.
11.9 Binding Effect. This Agreement shall become effective
when it shall have been executed by the Banks, FM Properties, FTX
and FCX and thereafter shall be binding upon and inure to the
benefit of the Agent, Banks, FM Properties, FTX and FCX, and
their respective successors and assigns, except that neither FM
Properties, FTX nor FCX shall have the right to assign its rights
hereunder or any interest herein without the prior written
consent
of the Banks. The Banks may assign all of their rights hereunder
without the prior written consent of FM Properties, FTX or FCX.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by themselves or
their proper and duly authorized officers as of the day and year
first above written.
FM PROPERTIES OPERATING COMPANY
BY: FREEPORT-McMoRan INC.,
Managing General Partner
By:
R. Foster Duncan
Its Treasurer
FREEPORT-McMoRan INC.
By:
R. Foster Duncan
Its Treasurer
FREEPORT-McMoRan COPPER & GOLD, INC.
By:
R. Foster Duncan
Its Treasurer
HIBERNIA NATIONAL BANK, as Agent
and Bank
By:
Bruce L. Ross
Its Vice President
CHEMICAL BANK, as Bank
By:
Its Vice President