-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N7SOehuIcy6VUCZnMGw1CaPD4BJgV4PQ+sL92wUjBNjEho9RZGUz17wgKNddGNwA CVC78UALgptSVP9lwdQP8A== 0000351116-95-000013.txt : 19951026 0000351116-95-000013.hdr.sgml : 19951026 ACCESSION NUMBER: 0000351116-95-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951025 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FREEPORT MCMORAN INC CENTRAL INDEX KEY: 0000351116 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 133051048 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08124 FILM NUMBER: 95583676 BUSINESS ADDRESS: STREET 1: 1615 POYDRAS ST CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045824000 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 1995 Commission File Number: 1-8124 Freeport-McMoRan Inc. Incorporated in Delaware 13-3051048 (IRS Employer Identification No.) 1615 Poydras Street, New Orleans, Louisiana 70112 Registrant's telephone number, including area code:(504) 582-4000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -- -- On October 20, 1995, there were issued and outstanding 28,066,098 shares of the registrant's Common Stock, par value $0.01 per share. FREEPORT-McMoRan INC. TABLE OF CONTENTS Page Part I. Financial Information Condensed Balance Sheets 3 Statements of Income 4 Statements of Cash Flow 6 Notes to Financial Statements 8 Remarks 10 Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Part II. Other Information 17 Signature 18 Exhibit Index E-1 FREEPORT-McMoRan INC. PART I. FINANCIAL INFORMATION Item 1.Financial Statements. --------------------- FREEPORT-McMoRan INC. CONDENSED BALANCE SHEETS (Unaudited) September 30, December 31, 1995 1994 ------------- ------------ ASSETS (In Thousands) Current assets: Cash and short-term investments $ 28,746 $ 13,810 Accounts receivable 76,380 89,925 Inventories 106,699 109,677 Prepaid expenses and other 6,853 7,433 ---------- ---------- Total current assets 218,678 220,845 Property, plant and equipment, net 974,344 964,539 Net assets of discontinued operations - 328,880 Other assets 62,768 135,178 ---------- ---------- Total assets $1,255,790 $1,649,442 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 205,296 $ 191,553 Long-term debt, less current portion 300,915 1,122,070 Accrued postretirement benefits and pension costs 165,659 158,707 Reclamation and mine shutdown reserves 133,377 112,777 Other liabilities and deferred credits 116,138 77,034 Minority interests 197,018 217,768 Stockholders' equity (deficit) 137,387 (230,467) ---------- ---------- Total liabilities and stockholders' equity $1,255,790 $1,649,442 ========== ========== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan INC. STATEMENTS OF INCOME (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------- --------------------- 1995 1994 1995 1994 -------- -------- -------- -------- (In Thousands, Except Per Share Amounts) Revenues $243,066 $189,803 $730,943 $560,190 Cost of sales: Production and delivery 171,232 141,356 509,658 414,302 Depreciation and amortization 11,230 9,543 32,642 37,389 -------- -------- -------- -------- Total cost of sales 182,462 150,899 542,300 451,691 Exploration expenses - - - 5,904 General and administrative expenses 28,973 13,650 59,954 45,010 -------- -------- -------- -------- Total costs and expenses 211,435 164,549 602,254 502,605 -------- -------- -------- -------- Operating income 31,631 25,254 128,689 57,585 Interest expense, net (9,614) (17,347) (40,844) (54,373) Other income (expense), net 926 140 1,577 (1,113) -------- -------- -------- -------- Income before income taxes and minority interests 22,943 8,047 89,422 2,099 (Provision) benefit for income taxes (872) 4,482 (7,429) 11,893 Minority interests in net income of consolidated subsidiaries (21,440) (22,299) (71,851) (38,799) -------- -------- -------- -------- Income (loss) from continuing operations before extraordinary item 631 (9,770) 10,142 (24,807) Discontinued operations 24,967 21,222 340,424 73,529 -------- -------- -------- -------- Income before extraordinary item 25,598 11,452 350,566 48,722 Extraordinary loss - - - (9,108) -------- -------- -------- -------- Net income 25,598 11,452 350,566 39,614 Preferred dividends (1,095) (5,408) (41,187) (16,563) -------- -------- -------- -------- Net income applicable to common stock $ 24,503 $ 6,044 $309,379 $ 23,051 ======== ======== ======== ======== Net income (loss) per primary share: Continuing operations $.02 $(.42) $ .40 $(1.07) Discontinued operations .88 .92 13.44 3.16 Extraordinary loss - - - (.39) Preferred dividends (.04) (.24) (1.62) (.71) ---- ----- ------ ------ $.86 $ .26 $12.22 $ .99 ==== ===== ====== ====== Net income (loss) per fully diluted share: Continuing operations $.02 $(.42) $ .88 $(1.07) Discontinued operations .88 .92 11.53 3.16 Extraordinary loss - - - (.39) Preferred dividends (.04) (.24) (1.13) (.71) ---- ----- ------ ------ $.86 $ .26 $11.28 $ .99 ==== ===== ====== ====== Average common and common equivalent shares outstanding: Primary 28,460 23,034 25,322 23,256 ====== ====== ====== ====== Fully diluted 28,567 23,034 29,513 23,256 ====== ====== ====== ====== Dividends per common share: Cash $.09 $ - $ .09 $1.88 Property - 1.58 1.56 6.11 ---- ----- ----- ----- $.09 $1.58 $1.65 $7.99 ==== ===== ===== ===== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan INC. STATEMENTS OF CASH FLOW (Unaudited) Nine Months Ended September 30, ------------------- 1995 1994 -------- -------- Cash flow from operating activities: (In Thousands) Net income $350,566 $ 39,614 Adjustments to reconcile net income to net cash provided by operating activities: Extraordinary loss - 9,108 Depreciation and amortization 84,475 94,059 Amortization of debt discount and financing costs 15,522 25,300 Deferred income taxes 88,195 63,459 Recognition of unearned income (36,207) - Minority interests' share of net income 154,844 104,257 Cash distribution from IMC-Agrico in excess of interest in capital 31,751 33,801 Reclamation and mine shutdown expenditures (9,215) (6,968) Gain on FCX securities transactions (435,060) (95,723) Loss on recapitalization of FTX securities 44,371 - (Increase) decrease in working capital, net of effect of acquisition: Accounts receivable 27,467 6,901 Inventories (22,318) (18,623) Prepaid expenses and other (648) 9,262 Accounts payable and accrued liabilities 14,517 15,858 Other 5,726 (6,350) -------- -------- Net cash provided by operating activities 313,986 273,955 -------- -------- Cash flow from investing activities: Capital expenditures: FCX (308,099) (533,453) FRP (21,410) (21,775) Other (1,893) (27,912) Sales of assets 23,577 110,502 -------- -------- Net cash used in investing activities (307,825) (472,638) -------- -------- Cash flow from financing activities: Proceeds from sale of: FRP 8 3/4% Senior subordinated notes $ - $146,125 FCX Preferred Stock - 252,985 FCX 9 3/4% Senior subordinated notes - 116,276 FCX Class A common shares 497,166 - Purchase of FTX, FCX and FRP equity shares (130,733) (82,367) Distributions paid to minority interests (151,277) (171,145) Distribution of MOXY shares - (35,441) Proceeds from (repayments of) debt, net (145,908) 145,578 Purchase/redemption of FTX securities: 10 7/8% Senior debentures - (142,919) ABC debentures (280,826) - 6.55% Senior notes (14,955) - Net proceeds from infrastructure financing 228,899 17,319 FTX cash dividends paid: Common stock (2,740) (44,242) Preferred stock (7,661) (16,641) Other 3,712 2,164 -------- -------- Net cash provided by (used in) financing activities (4,323) 187,692 -------- -------- Net increase (decrease) in cash and short-term investments 1,838 (10,991) Net (increase) decrease attributable to discontinued operations 13,098 (8,791) Cash and short-term investments at beginning of year 13,810 25,987 -------- -------- Cash and short-term investments at end of period $ 28,746 $ 6,205 ======== ======== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan INC. NOTES TO FINANCIAL STATEMENTS 1. REVERSE STOCK SPLIT In October 1995, Freeport-McMoRan Inc. (FTX) effected a one-for-six reverse split of its common stock. Accordingly, all common share and per share amounts have been restated. 2. DISCONTINUED OPERATIONS In July 1995, FTX distributed 117,909,323 shares of Freeport-McMoRan Copper & Gold Inc. (FCX) Class B common stock to FTX common stockholders. As a result, FTX no longer owns any interest in FCX. In connection with a recapitalization of its liabilities, FTX sold 21.5 million shares of FCX Class A common stock in May 1995 to RTZ Corporation PLC (RTZ) for $450 million cash, recognizing a pretax gain of $391.2 million, and another 2.4 million shares in July 1995 to RTZ for $50.2 million cash, recognizing a pretax gain of $43.8 million in the third quarter. FTX's financial statements have been restated to reflect the metals segment as a discontinued operation. Discontinued operations results follow (in millions): Third Quarter Nine Months -------------- ------------------ 1995 1994 1995 1994 ----- ------ ------ ------ Revenues $ - $313.4 $830.3 $861.0 ===== ====== ====== ====== Income from discontinued operations $ - $58.4 $222.0 $153.7 Minority interest - (24.1) (83.0) (65.5) Provision for taxes - (28.3) (95.5) (72.4) ----- ----- ------ ------ - 6.0 43.5 15.8 Gain on FCX securities transactions 43.8 25.7 435.1 95.7 Deferred taxes no longer required - - 76.2 - Recapitalization losses (Note 4) (1.0) - (44.3) - Provision for taxes (17.8) (10.5) (170.1) (38.0) ----- ----- ------ ------ $25.0 $21.2 $340.4 $ 73.5 ===== ===== ====== ====== Income from discontinued operations includes allocated interest from FTX totaling $4.8 million for the third quarter of 1994 and $16.6 million and $14.1 million for the nine-month period of 1995 and 1994, respectively. 3. SALE OF FREEPORT COPPER COMPANY STOCK In September 1995, FCX paid FTX $25 million cash for 100 percent of the stock of Freeport Copper Company whose sole asset is a 50 percent interest in a joint venture with ASARCO Santa Cruz, Inc. controlling approximately 7,600 contiguous acres in Arizona. The joint venture is involved in a research project for an experimental in-situ leaching process that would be used to mine copper ore. 4. RECAPITALIZATION ACTIVITIES In April 1995, FTX exchanged 1.9 million FTX common shares for 4 million shares of its $4.375 Convertible Exchangeable Preferred Stock ($4.375 Preferred Stock) in accordance with an exchange offer whereby FTX temporarily increased the FTX shares issuable upon conversion. As a result of the exchange offer, FTX recorded a noncash charge of $33.5 million to preferred dividends in the second quarter of 1995. As of September 30, 1995, 1 million shares ($50.1 million) of $4.375 Preferred Stock remained outstanding and are convertible into FTX common stock at a conversion price of $27.36 per share or the equivalent of 1.8 shares of FTX common stock for each share of $4.375 Preferred Stock. In June 1995, FTX redeemed $749.2 million principal amount of its Zero Coupon Convertible Subordinated Debentures (ABC Debentures) for $280.8 million cash (equal to book value). Additionally in June 1995, FTX redeemed $16.4 million face amount of 6.55% Convertible Subordinated notes (6.55% Notes), with a book value of $14.1 million, for $15 million of cash. Prior to the redemption, FTX increased the number of FTX common shares that would be received upon conversion of the 6.55% Notes. Holders of $356.6 million face amount of 6.55% Notes converted their notes at the enhanced rate into 3.3 million FTX common shares, resulting in an increase of $346.4 million to stockholders' equity. FTX recorded a pretax loss on recapitalization of the ABC Debentures and 6.55% Notes totaling $44.3 million primarily because of enhancements to the conversion rates. 5. NEW CREDIT FACILITY In July 1995, FTX entered into a new credit facility providing $400 million of credit, all of which is available to Freeport-McMoRan Resource Partners, Limited Partnership (FRP) and $75 million of which is available to FTX as the holding company. The new variable rate facility matures July 2000 and has covenants and security requirements which are similar to FTX's previous credit agreement. As part of the FTX restructuring, FCX assumed an obligation to guarantee up to $90 million of the indebtedness of FM Properties Inc. (FMPO)and FTX is paying an annual three percent fee to FCX on the amount guaranteed. FTX agreed to guarantee an aggregate additional amount of FMPO debt of up to approximately $60 million. At September 30, 1995, the indebtedness of FMPO totaled approximately $116 million, of which $26 million was guaranteed by FTX. 6. ACQUISITION In January 1995, FRP acquired essentially all of the domestic assets of Pennzoil Co.'s sulphur division. Pennzoil will receive quarterly payments from FRP over 20 years based on the prevailing price of sulphur. The installment payments may be terminated earlier by FRP through the exercise of a $65 million call option or by Pennzoil through a $10 million put option. Neither option may be exercised prior to 1999. The purchase price allocation follows (in thousands): Current assets $ 5,635 Current liabilities (14,065) Property, plant and equipment 60,159 Accrued long-term liabilities (51,729) ------- Net cash investment $ - ======= Accrued long-term liabilities include the estimated future installment payments based on the prevailing sulphur price upon acquisition and estimated future reclamation and mine shutdown costs. 7. PARENT COMPANY BALANCE SHEETS The unaudited, unconsolidated condensed balance sheet of FTX as of September 30, 1995 follows (in thousands): Cash and short-term investments $ 4,891 Accounts receivable from FRP 46,000 Other current assets 26,744 Property, plant and equipment, net 49,053 Investment in FRP 209,314 Investment in FCX - Other assets 6,108 -------- Total assets $342,110 ======== Accounts payable and accrued liabilities $100,918 Long-term debt - Other liabilities and deferred credits 103,805 Stockholders' equity 137,387 -------- Total liabilities and stockholders' equity $342,110 ======== ----------------- Remarks The information furnished herein should be read in conjunction with FTX's financial statements contained in its 1994 Annual Report to stockholders and incorporated by reference in its Annual Report on Form 10-K. The information furnished herein reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the periods. All such adjustments are, in the opinion of management, of a normal recurring nature. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. RESTRUCTURE AND RECAPITALIZATION In October 1995, Freeport-McMoRan Inc. (FTX) effected a one-for-six reverse split of its common stock. Accordingly, all common and per share amounts have been restated. In July 1995, FTX declared a special tax-free dividend of the Class B common stock of Freeport-McMoRan Copper & Gold Inc. (FCX) to FTX common stockholders (Note 2). Prior to the distribution, FTX completed certain recapitalization activities, including the sale of 23.9 million shares of FCX Class A common stock for $500.2 million (Note 2), the conversion/redemption of FTX's preferred stock and publicly held debt securities (Note 4) and the repayment of FTX's parent company bank borrowings using a portion of the proceeds from the FCX Class A common stock sale. These activities allowed for the separation of FTX's copper/gold and agricultural minerals businesses into two independent financial and operating entities. FTX's ongoing business operations now essentially consist of its 51.4 percent ownership in Freeport-McMoRan Resource Partners, Limited Partnership (FRP). RESULTS OF OPERATIONS Because FTX no longer owns any interest in FCX, FTX's financial results were restated to reflect the FCX metals segment as discontinued operations. Third Quarter Nine Months ------------------ ------------------ 1995 1994 1995 1994 ------ ------ ------ ------ (In Millions, Except Per Share Amounts) Revenues $243.1 $189.8 $730.9 $560.2 Operating income 31.6 a 25.3 128.7 a 57.6 Income (loss) from continuing operations b $ 0.6 a $ (9.8) $ 10.2 a $(24.8) Discontinued operations (Note 2) 25.0 21.2 340.4 73.5 Extraordinary loss - - - (9.1) Preferred dividends (Note 4) (1.1) (5.4) (41.2) (16.5) ------ ------ ------ ------ Net income to common stock $ 24.5 $ 6.0 $309.4 $ 23.1 ====== ====== ====== ====== a. Includes a $12.3 million noncash general and administrative expense charge ($3.9 million to net income) under FTX's incentive compensation program resulting from the rise in its common stock price during the third quarter. b. Includes minority interests after-tax charges of $5.2 million and $7.1 million for the third quarter of 1995 and 1994, respectively, and $10.2 million and $7.1 million for the nine-month period of 1995 and 1994, respectively, because FTX was not paid a proportionate share of FRP distributions during the period. For the third-quarter and nine-month periods of 1994, FTX also recognized $4.6 million and $32.6 million, respectively, of the gain deferred in connection with the public sale of FRP units in 1992. FTX benefited from significantly higher operating results from its agricultural minerals segment during the 1995 periods, reflecting the strengthening in the phosphate fertilizer markets which began in mid-1993 and has continued throughout 1995. FTX has not incurred any exploration costs subsequent to the May 1994 formation of McMoRan Oil & Gas Co. (MOXY). Interest expense was lower in the 1995 quarter because of reductions to debt levels, which will continue to benefit future periods. Minority interests share of 1995 net income reflects the higher level of earnings at FRP and the minority interest charge discussed above. Agricultural Minerals Operations - -------------------------------- FTX's agricultural minerals segment, which includes FRP's fertilizer and phosphate rock operations (conducted through IMC-Agrico)and its sulphur business, reported third-quarter 1995 operating income of $40.9 million on revenues of $234.7 million compared with operating income of $33.4 million on revenues of $182.2 million for the 1994 period. Operating income for the first nine months of 1995 was $145.1 million on revenues of $703.6 million compared with operating income of $84.8 million on revenues of $531.2 million for the year-ago period. Significant items impacting operating income follow (in millions): Third Nine Quarter Months ------- ------ Agricultural minerals operating income - 1994 $33.4 $84.8 ----- ------ Increases (decreases): Sales volumes 17.4 70.4 Realizations 31.7 99.8 Other 3.4 2.2 ----- ------ Revenue variance 52.5 172.4 Cost of sales (35.0)a (102.7)a General and administrative and other (10.0)b (9.4)b ----- ------ 7.5 60.3 ----- ------ Agricultural minerals operating income - 1995 $40.9 $145.1 ===== ====== a. Includes a reduction to depreciation and amortization of $6 million and $7.7 million for the third quarter of 1995 and 1994, respectively, and $22.1 million and $14.9 million for the nine-month period of 1995 and 1994, respectively, caused by FRP's disproportionate interest in IMC-Agrico cash distributions. b. Includes $8.5 million of the stock option charge discussed earlier. FRP's third-quarter 1995 phosphate fertilizer sales volumes were higher than those of the year-ago quarter, with IMC-Agrico experiencing continued excellent export demand and strengthening domestic sales for diammonium phosphate (DAP), its principal fertilizer product. These increased exports coupled with the seasonal rebound in fall domestic movement caused IMC-Agrico to restart its Taft fertilizer facility in August 1995. Despite current industrywide capacity utilization approaching 100 percent, domestic phosphate fertilizer producer inventories have recently declined. This tight supply/demand situation is reflected in the improved phosphate fertilizer realizations. FRP's average DAP realization increased 15 percent from the year-ago period (up 3 percent from the previous quarter). FRP's 1995 DAP realizations include large forward sales to China at below current market prices, contracted during mid-1995 and late-1994 at then market terms. Unit production costs benefited from ongoing cost savings achieved at IMC-Agrico, somewhat offset by higher raw material costs for ammonia. Fertilizer prices continue to rise into the fourth quarter and are expected to remain firm for the near term, as the tight supply/demand situation benefits producers at a time when no operable idle capacity exists and several turnarounds are planned, including IMC-Agrico facilities. Furthermore, strong domestic demand is expected to continue into the spring of 1996 due to an expectation of a 13 percent increase in planted corn acreage. Domestic corn and wheat ending stocks are currently forecast to be at their lowest level in 20 years further strengthening grain prices and the outlook for next spring's fertilizer use. FRP's export sales through year-end 1995 will continue to come principally from the agreement that was reached with China. IMC-Agrico is committed to maintaining a reasonable balance between supply and demand and will adjust production levels in response to market conditions. FRP's third-quarter 1995 phosphate rock sales volumes were essentially unchanged from the year-ago quarter. Ongoing phosphate rock sales volumes will be negatively impacted by the expiration of a contract providing annual sales of 1.5 million tons net to FRP. However, because of the low margin associated with these sales, the impact to FRP's earnings is not significant. FRP's Main Pass and Culberson sulphur mines continued to perform well during the quarter compared with the 1994 period when FRP had only the Main Pass mine in operation. The 1995 quarter was hampered by the precautionary shutting-in of Main Pass production because of a hurricane in the Gulf of Mexico. FRP's increased production capacity, combined with continued strong demand from the domestic phosphate fertilizer industry, resulted in a 33 percent increase in sales volumes. FRP also benefited from the continued strengthening in Tampa, Florida sulphur prices. To the extent U.S. phosphate fertilizer production remains strong, improved sulphur demand is expected to continue, although the availability of Canadian sulphur limits the potential for significant price increases. Third Quarter Nine Months -------------------- ------------------- 1995 1994 1995 1994 --------- ---------- --------- --------- Phosphate fertilizers - primarily DAP Sales (short tons) a 891,600 840,100 2,551,900 2,368,900 Average realized price b All phosphate fertilizers $167.96 $145.93 $165.17 $141.65 DAP 173.50 151.25 170.69 146.65 Phosphate rock Sales (short tons) a 1,051,500 1,062,500 3,611,700 3,073,100 Average realized price b $21.53 $19.91 $21.94 $21.59 Sulphur Sales (long tons) c 751,300 562,900 2,284,600 1,586,500 a. Reflects FRP's 45.1 percent and 46.5 percent share of the IMC-Agrico assets for the years ended June 30, 1995 and 1994, respectively, while FRP received 55 percent and 58.6 percent of the cash flow generated during such periods. FRP's share of the IMC-Agrico assets for the year ended June 30, 1996 is 43.6 percent, while it will receive 53.1 percent of the cash flow. b. Represents average realization f.o.b. plant/mine. c. Includes internal consumption totaling 187,100 tons and 189,700 tons for the third quarter of 1995 and 1994, respectively, and 555,700 tons and 564,500 tons for the nine-month period of 1995 and 1994, respectively. Oil And Gas Operations - ---------------------- Prior to the May 1994 distribution of MOXY shares, FTX's oil and gas operations included exploring for new reserves. These activities generated losses of $0.7 million and $11.7 million for the third-quarter and nine- month periods of 1994, respectively. FTX's only significant oil and gas operations subsequent to the MOXY distribution are FRP's production of oil at Main Pass, as follows: Third Quarter Nine Months ------------------ ---------------------- 1995 1994 1995 1994 ------- ------- --------- --------- Sales (barrels) 524,600 417,900 1,686,400 1,853,000 Average realized price $15.58 $14.94 $15.86 $13.34 Earnings (in millions) $(1.0) $.2 $1.5 $2.2 Main Pass oil operating income was impacted by $1.4 million of the previously discussed stock option charge. Third-quarter 1995 oil production reflects the hurricane-related shut in and certain workover activities. Net production for 1995 is estimated to total approximately 2.3 million barrels. CAPITAL RESOURCES AND LIQUIDITY Cash flow from operating activities increased during the first nine months of 1995 to $314 million, compared with $274 million for the 1994 period, primarily because of the significant increase in operating income. Cash flow from operating activities included cash from discontinued operations totaling $138.6 million and $162.9 million in 1995 and 1994, respectively. Net cash used in investing activities was $307.8 million compared with $472.6 million for the 1994 period. The 1995 period reflects lower expenditures by discontinued operations and the 1994 period includes $110.5 million from the sale of assets. Net cash used in financing activities was $4.3 million compared with $187.7 million provided by financing activities in the 1994 period. During the nine-month 1995 period, FTX sold 23.9 million shares of FCX Class A common shares to RTZ for $497.2 million (net of $3 million of expenses), while sales of FRP and FCX securities totaled $515.4 million in the nine-month 1994 period. During the 1995 period purchases of FTX, FCX and FRP equity securities totaled $130.7 million compared with $82.4 million in the 1994 period under an established program to acquire equity securities when warranted by market conditions. The 1995 period included net repayments of debt totaling $145.9 million compared with net borrowings of $145.6 million for the 1994 period. During 1995, FTX redeemed $280.8 million of its ABC debentures and $15 million of its 6.55% Senior notes while the 1994 period included payments of $142.9 million for the 10 7/8% Senior debentures. During 1995, FCX received $228.9 million from the sale of certain of its infrastructure assets. After the first quarter of 1994 and prior to the FCX spinoff, FTX had been distributing FCX common stock in lieu of paying cash dividends. On October 17, 1995, IMC-Agrico acquired the animal feed ingredients business of Mallinckrodt Group Inc. for $110 million cash. Mallinckrodt's animal feed ingredients business is one of the world's largest producers of phosphate-based animal feed ingredients with an annual capacity in excess of 700,000 tons. This business is IMC-Agrico's largest phosphoric acid customer, consuming nearly 300,000 tons per year or about seven percent of IMC-Agrico's phosphoric acid capacity. This acquisition provides high quality diversification and growth for IMC-Agrico and enhances the joint venture's flexibility in maximizing returns from its core phosphate production. Publicly owned FRP units have cumulative rights to receive quarterly distributions of 60 cents per unit through the distribution for the quarter ending December 31, 1996 (the Preference Period) before any distributions may be made to FTX. On October 20, 1995, FRP declared a distribution of 60 cents per publicly held unit ($30.2 million) and 34 cents per FTX-owned unit ($18.3 million), payable November 15, 1995, bringing the total unpaid distribution due FTX to $382.4 million. As a result, an additional $6.6 million minority interest charge will be recognized by FTX during the fourth quarter of 1995. Unpaid distributions due FTX will be recoverable from one-half of the excess of future quarterly FRP distributions over 60 cents per unit for all units. The October 1995 distributable cash included $49.2 million from IMC-Agrico. FRP's future distributions will be dependent on the distributions received from IMC-Agrico and future cash flow from FRP's sulphur and oil operations. In future periods, FTX's share of the reported financial results of FRP will depend on the extent to which FTX receives its proportionate share of FRP distributions. To the extent that public unitholders receive a disproportionately large share of FRP distributions, FTX will recognize a smaller share of FRP's reported earnings than would be represented by its percentage ownership of FRP. Because of the recapitalization and restructuring activities discussed above, FTX's parent company obligations have been significantly reduced. However, FTX will have certain cash requirements relating to its past business activities including income tax settlements, oil and gas payments and employee benefit liabilities. It potentially could also have future cash requirements relating to its guarantee of the debt of FM Properties Inc. (Note 5). FTX anticipates that its cash distributions from FRP and amounts available to it under the new credit facility (Note 5) will be sufficient to meet these obligations. The new credit facility provides $400 million of credit available to FTX/FRP ($227 million available at October 20, 1995), and $75 million of which is available to FTX as the holding company ($75 million available at October 20, 1995). In August 1995, the FTX Board of Directors established a new dividend policy for FTX common stock and declared a regular quarterly cash dividend of $0.09 per common share. The new dividend policy will allow FTX to use additional available funds to purchase FTX stock, purchase FRP units and/or invest in new growth opportunities. -------------------------------- The results of operations reported and summarized above are not necessarily indicative of future operating results. FREEPORT-McMoRan INC. PART II. Other Information Item 6. Exhibits and Reports on Form 8-K. - ----------------------------------------- (a) The list of exhibits appearing on page E-1 hereof and the exhibits immediately following said page are incorporated herein by reference. (b) Reports on Form 8-K. One report on Form 8-K was filed by the registrant during the quarter for which this report is filed. The Form 8-K was executed and filed on July 11, 1995, reported information under Items 2 and 7, and contained the following financial statements for Freeport-McMoRan Inc.: Unaudited Pro Forma Statement of Income for the Year Ended December 31, 1994, Unaudited Pro Forma Statement of Income for the Three Months Ended March 31, 1995, and Unaudited Pro Forma Condensed Balance Sheet as of March 31, 1995. FREEPORT-McMoRan INC. SIGNATURE ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FREEPORT-McMoRan INC. By: /s/ John T. Eads --------------------------- John T. Eads Controller - Financial Reporting (authorized signatory and Principal Accounting Officer) Date: October 25, 1995 FREEPORT-McMoRan INC. EXHIBIT INDEX Sequentially Numbered Number Description Page - ------ ----------- ------------ 2.1 Distribution Agreement dated as of July 5, 1995, between Freeport-McMoRan Inc. ("FTX") and Freeport-McMoRan Copper & Gold Inc. ("FCX") 4.1 Credit Agreement dated as of June 30, 1995, among FTX, Freeport-McMoRan Resource Partners, Limited Partnership, certain banks, Chemical Bank ("Chemical"), as Administrative Agent and Collateral Agent, and The Chase Manhattan Bank (National Association) ("Chase"), as Documentary Agent 4.2 Credit Agreement dated as of June 30, 1995, among FTX, FCX, FM Properties Operating Co. ("FMPOC"), certain banks, Chemical, as Administrative Agent, and Chase, as Documentation Agent 4.3 FTX Guaranty Agreement dated as of July 17, 1995 4.4 Second Amended and Restated Note Agreement dated as of June 30, 1995, among FTX, FCX, FMPOC, Chemical, and Hibernia National Bank, individually and as Agent 11.1 Freeport-McMoRan Inc. Computation of Net Income per Common and Common Equivalent Share 27.1 Freeport-McMoRan Inc. Financial Data Schedule EX-2 2 CONFORMED COPY DISTRIBUTION AGREEMENT dated as of July 5, 1995 between FREEPORT-McMoRan INC. and FREEPORT-McMoRan COPPER & GOLD INC. TABLE OF CONTENTS* ARTICLE I DEFINITIONS Section 1.01. Definitions . . . . . . . . . . . . . . . . 2 ARTICLE II THE DISTRIBUTION Section 2.01. Cooperation Prior to the Distribution . . . 4 Section 2.02. FTX Board Action; Conditions Precedent to the Distribution . . . . . . . . . . . . . . . . . . . . . 4 Section 2.03. The Distribution . . . . . . . . . . . . . 5 Section 2.04. Sale of Fractional Shares . . . . . . . . . 5 ARTICLE III TRANSITION Section 3.01. Transition . . . . . . . . . . . . . . . . 5 Section 3.02. Office Lease . . . . . . . . . . . . . . . 6 Section 3.03. Further Assurances and Consents . . . . . . 6 Section 3.04. Intercompany Accounts . . . . . . . . . . . 6 Section 3.05. Certain Intellectual Property Matters . . . 7 ARTICLE IV INFORMATION Section 4.01. Access to Information . . . . . . . . . . . 8 Section 4.02. Litigation Cooperation . . . . . . . . . . 8 Section 4.03. Tax Cooperation . . . . . . . . . . . . . . 8 Section 4.04. Reimbursement . . . . . . . . . . . . . . . 9 Section 4.05. Retention of Records . . . . . . . . . . . 9 Section 4.06. Confidentiality . . . . . . . . . . . . . . 9 ARTICLE V REPRESENTATIONS AND COVENANTS Section 5.01. Certain Prohibited Actions . . . . . . . . 10 Section 5.02. Representations and Covenants Set Forth in the Ruling . . . . . . . . . . . . . . . . . . . . . 13 Section 5.03. State and Local Taxes . . . . . . . . . . . 13 Section 5.04. Applicability of Management Services *The Table of Contents is not a part of this Agreement. Agreement . . . . . . . . . . . . . . . . . . . . . 13 Section 5.05. Employee Matters . . . . . . . . . . . . . 13 ARTICLE VI MISCELLANEOUS Section 6.01. Expenses . . . . . . . . . . . . . . . . . 13 Section 6.02. Notices . . . . . . . . . . . . . . . . . . 13 Section 6.03. Amendment and Waiver . . . . . . . . . . . 14 Section 6.04. Arbitration . . . . . . . . . . . . . . . . 14 Section 6.05. Counterparts . . . . . . . . . . . . . . . 15 Section 6.06. Governing Law . . . . . . . . . . . . . . . 15 Section 6.07. Entire Agreement . . . . . . . . . . . . . 15 Section 6.08. Parties in Interest . . . . . . . . . . . . 15 Section 6.09. Specific Enforcement . . . . . . . . . . . 15 DISTRIBUTION AGREEMENT DISTRIBUTION AGREEMENT dated as of July 5, 1995 (the "Agreement") between FREEPORT-McMoRan INC., a Delaware corporation (together with its successors and permitted assigns, "FTX"), and FREEPORT-McMoRan COPPER & GOLD INC., a Delaware corporation (together with its successors and permitted assigns, "FCX"). W I T N E S S E T H WHEREAS, FTX owns as of the close of business on the date hereof 117,909,323 shares of Class B Common Stock of FCX; WHEREAS, the Board of Directors of FTX has determined that it is in the best interest of FTX and the stockholders of FTX to distribute all of the outstanding shares of FCX's Class B Common Stock which FTX owns at the time of such distribution to the holders of FTX Common Stock (the "Distribution"); WHEREAS, the parties have been members of an affiliated group of companies, including FCX and its affiliates, and FTX has entered into certain obligations for the joint benefit of the members of the group which the parties agree should be allocated among such members on a fair and equitable basis; WHEREAS, the parties have determined that it is necessary and desirable to set forth the principal transactions required to effect such Distribution and to enter into other agreements that shall govern certain other matters following such Distribution; and WHEREAS, prior to the Distribution, FTX shall enter into certain other agreements with FCX in addition to this Agreement, including, but not limited to, the Employee Benefits Allocation Agreement; NOW, THEREFORE, in consideration of the mutual agreements and covenants contained in this Agreement, the parties hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. As used herein, the following terms have the following meaning: "Action" means any claim, suit, arbitration, inquiry, proceeding or investigation by or before any court, governmental or other regulatory or administrative agency or commission or any other tribunal. "Affiliate" means, with respect to any Person, any Person that is directly or indirectly controlled by such Person; provided that for the purposes of this Agreement, (i) IMC-Agrico Company shall be considered an Affiliate of FTX, and (ii) FCX and its Affiliates shall not be considered Affiliates of FTX. As used in this definition, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the Person whether through ownership of voting securities, by contract or otherwise. "Class A Common Stock" means the Class A Common Stock, par value $.10 per share, of FCX. "Class B Common Stock" means the Class B Common Stock, par value $.10 per share, of FCX. "Commission" means the Securities and Exchange Commission. "Consent Solicitation Statement" means the Consent Solicitation Statement of FCX dated February 7, 1995, as supplemented by the letter of FCX dated March 8, 1995. "Distribution Agent" means Mellon Securities Trust Company, as agent of the holders of the FTX Common Stock. "Distribution Date" means July 17, 1995. "Employee Benefits Allocation Agreement" means an employee benefits allocation agreement between FTX and FCX, as amended from time to time. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "FCX Board" means the Board of Directors of FCX. "Five-Year Period" means the five-year period immediately following the Distribution Date. "Form 8-A" means the registration statement on Form 8-A in respect of the Class B Common Stock filed with the Commission under the Exchange Act on June 29, 1995, together with any amendments thereto. "FRP" means Freeport-McMoRan Resource Partners, Limited Partnership, a Delaware publicly traded limited partnership. "FTX Common Stock" means the common stock, par value $1.00 per share, of FTX. "Implementation Agreement" means the Implementation Agreement dated May 2, 1995 between FCX and RTZ. "Management Services Agreement" means, individually and collectively (unless otherwise indicated), (i) the agreement dated as of May 1, 1988 between FTX, Freeport- McMoRan Copper Company, Inc. and Freeport Indonesia, Incorporated, and (ii) any transitional management services agreement that may be entered into involving FTX, FCX and PT-FI and that expires no later than one year after the Distribution Date, pursuant to each of which FTX furnishes from time to time certain services to FCX and PT-FI. "NYSE" means the New York Stock Exchange, Inc. "Person" means an individual, corporation, association, partnership, organization, business, governmental authority or regulatory body or any other entity. "Preferred Stock" means the 7% Convertible Exchangeable Preferred Stock, the Step-Up Convertible Preferred Stock, Series I and II of the Gold-Denominated Preferred Stock and the Silver-Denominated Preferred Stock of FCX, collectively. "PT-FI" means P.T. Freeport Indonesia Company, an Indonesian limited liability company that is domesticated in Delaware. "Record Date" means July 17, 1995. "RTZ" means The RTZ Corporation PLC, a corporation organized under the laws of England. "Ruling" means the private letter ruling that the Internal Revenue Service issued to FTX on November 21, 1994 and that addresses the United States federal income tax consequences of the Distribution. "Tax" means any net income, alternative or add-on minimum, gross income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, transfer, recording, severance, stamp, occupation, premium, property, environmental or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount related thereto. "Two-Year Period" means the two-year period immediately following the Distribution Date. ARTICLE II THE DISTRIBUTION Section 2.01. Cooperation Prior to the Distribution. (a) FCX has prepared and filed with the Commission the Form 8-A, which includes or incorporates by reference the Consent Solicitation Statement setting forth appropriate disclosure concerning the capital stock of FCX and any other appropriate matters required to be stated therein. FCX shall use reasonable efforts to cause the Form 8-A to become effective under the Exchange Act. (b) FTX and FCX shall take all such action as may be necessary or appropriate under the securities or blue sky laws of states or other political subdivisions of the United States in connection with the Distribution and the transactions contemplated by this Agreement. (c) FCX shall prepare and file applications to list the Class B Common Stock to be distributed by FTX on the NYSE and the Australian Stock Exchange. Section 2.02. FTX Board Action; Conditions Precedent to the Distribution. FTX's Board of Directors has on the date hereof established the Record Date and the Distribution Date and appropriate procedures in connection with the Distribution and the merger of FM Facilitating Company, Inc. ("Facilitating") with and into FCX has been consummated in accordance with the Agreement and Plan of Merger dated as of February 7, 1995 between Facilitating and FCX. In no event shall the Distribution occur unless the following conditions shall have been satisfied or waived by FTX: (i) the Form 8-A shall have become effective under the Exchange Act and the Commission shall have confirmed that it has no further comments thereon; and (ii) the Class B Common Stock shall have been approved for listing on the NYSE, subject to official notice of issuance. Section 2.03. The Distribution. On the Distribution Date, subject to the conditions set forth in this Agreement, FTX shall cause the Distribution Agent to distribute, on a pro rata basis and taking into account Section 2.04, to the holders of record of FTX Common Stock on the Record Date, all shares of Class B Common Stock held by FTX on the Distribution Date. On the Distribution Date, FTX shall relinquish any and all ownership interest of and control over such shares of Class B Common Stock. During the period commencing on the Distribution Date and ending upon the date(s) on which certificates evidencing such shares are mailed to holders of record of FTX Common Stock on the Record Date or on which fractional shares of Class B Common Stock are sold on behalf of such holders, the Distribution Agent shall hold the Class B Common Stock on behalf of such holders. FCX agrees to provide all certificates evidencing shares of Class B Common Stock that FTX shall require in order to effect the Distribution. Section 2.04. Sale of Fractional Shares. FTX shall appoint the Distribution Agent as agent for each holder of record of FTX Common Stock who would receive in the Distribution any fractional share of Class B Common Stock. The Distribution Agent shall aggregate all such fractional shares and sell them in an orderly manner after the Distribution Date in the open market and, after completion of such sales, distribute a pro rata portion of the gross proceeds from such sales, based upon the average gross selling price of all such fractional shares, to each shareholder of FTX who would otherwise have received a fractional share. FCX shall reimburse the Distribution Agent for its reasonable costs, expenses and fees in connection with the sale of fractional shares of Class B Common Stock. ARTICLE III TRANSITION Section 3.01. Transition. The parties agree that prior to the Distribution FTX entered into certain commitments and arrangements for the joint benefit of FTX, FCX and their respective Affiliates. FCX and its Affiliates have been allocated from time to time a portion of the costs of such commitments and arrangements. The parties agree that, to the extent applicable, the benefits of such commitments and arrangements entered into by FTX prior to the Distribution shall continue to be made available to FCX and its Affiliates following the Distribution and that following the Distribution each of the parties on whose behalf such commitments and arrangements were made shall be liable on a fair and equitable basis for its proportionate share for any costs associated with such commitments and arrangements. Section 3.02. Office Lease. FTX has entered into an office lease and ancillary agreements (the "Lease") in respect of a portion of the building located at 1615 Poydras Street, New Orleans, Louisiana, which houses the offices of both FTX and FCX and includes the location of personnel who have provided services to both parties. FCX and its Affiliates have been allocated from time to time a portion of the costs of the Lease and pursuant to the Management Services Agreement FCX and its Affiliates shall continue to pay a portion of the costs of the Lease. The parties agree that, no later than one year after the Distribution Date, they shall negotiate a fair and equitable agreement in respect of the Lease pursuant to which the costs thereunder and the use of the space covered thereby shall be allocated on a fair and equitable basis for the balance of the term of the Lease. Section 3.03. Further Assurances and Consents. (a) Each of the parties hereto shall execute and deliver such further instruments of conveyance and assignment and shall take such other actions as any other party may reasonably request in order to effectuate the purposes of this Agreement and to carry out the terms hereof. (b) In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties hereto shall use its reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable laws, regulations and agreements or otherwise to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, using its reasonable efforts to obtain any approvals, consents and assignments and to make any filings and applications necessary or desirable in order to consummate the transactions contemplated by this Agreement; provided that no party hereto shall be obligated to pay any consideration therefor (except for filing fees and other similar charges) to any third party from whom such approvals, consents and assignments are requested or to take any action or omit to take any action if the taking of or the omission to take such action would be unreasonably burdensome to the party or its business. Section 3.04. Intercompany Accounts. On the Distribution Date, all intercompany loans, receivables and payables in existence as of the Distribution Date between FTX and FCX shall be settled for cash, except with respect to any receivables and payables arising (i) under the Management Services Agreement dated May 1, 1988 which have not been billed as of the Distribution Date or (ii) in connection with transferred employees, including arrangements in respect of employee benefits. The excepted receivables and payables shall be settled in ordinary course. Section 3.05. Certain Intellectual Property Matters. The following provisions shall apply, from and after the Distribution Date, except as shall otherwise be agreed by FTX and FCX, to the use of the terms "Freeport- McMoRan", "Freeport" and "McMoRan": (i) except as provided below, neither FTX nor FCX nor any of their subsidiaries, divisions or Affiliates shall use the word "McMoRan" as part of the name of such subsidiary, division or Affiliate; (ii) FTX, FRP and FCX and their successors shall be entitled to continue to use the term "Freeport- McMoRan" in their corporate or partnership name, as the case may be, but (A) such entities shall not permit the use of such term in its name by any subsidiary, division or Affiliate which does not, as of the Distribution Date, use such term in its name and (B) with respect to each subsidiary, division and Affiliate currently using the term "Freeport-McMoRan" in its corporate, division or Affiliate title, FTX, FRP and FCX will as soon as practicable after the Distribution Date cause such subsidiary, division or Affiliate to change its name to one which does not include the term "Freeport-McMoRan" or, except as provided below, "Freeport"; (iii) FCX shall be entitled to use the separate word "Freeport" as part of the name of any of its subsidiaries, divisions and Affiliates associated with its Indonesian operations; (iv) FTX and FRP shall be entitled to use the separate word "Freeport" as part of the name of any of their subsidiaries, divisions and Affiliates engaged in the business of mining, extracting, processing or marketing sulphur and other agricultural minerals and chemicals; and (v) except as set forth above, neither FTX, FCX nor any of their subsidiaries, divisions and Affiliates shall use the separate word "Freeport" as part of its name. ARTICLE IV INFORMATION Section 4.01. Access to Information. From and after the date hereof, each party shall afford the other party and its accountants, counsel and other designated representatives reasonable access (including using reasonable efforts to give access to persons or firms possessing information) and duplicating rights during normal business hours to all records, books, contracts, instruments, computer data and other data and information in such party's possession relating to the business and affairs of such other party (other than data and information subject to an attorney/client or other privilege or otherwise required to be kept confidential pursuant to binding agreements), insofar as such access is reasonably required by such other party including, without limitation, for audit, accounting, Tax and litigation purposes, as well as for purposes of fulfilling disclosure and reporting obligations. Section 4.02. Litigation Cooperation. Each party shall use reasonable efforts to make available to the other party, upon written request, its officers, directors, employees and agents as witnesses to the extent that such persons may reasonably be required in connection with any Action arising out of the business of such other party and its predecessors, if any, in which the requesting party may from time to time be involved. Section 4.03. Tax Cooperation. (a) Without limiting the generality of Sections 3.03, 4.01, 4.02 or 4.05 and notwithstanding anything contained herein to the contrary, FTX and FCX shall cooperate, and shall cause their respective Affiliates to cooperate fully, at such time and to the extent reasonably requested by the other party in connection with (i) such other party's preparation and filing of any Tax return or claim for refund of Tax, (ii) such other party's ascertainment of the existence and amount of any liability for, or refund of, Tax, or (iii) the conduct of any audit, dispute or Action regarding Taxes in which such other party is engaged. The cooperation under this Section 4.03 by each party shall include, without limitation, (i) the retention and provision on demand, until the expiration of the applicable statute of limitations (giving effect to any extension, waiver, or mitigation thereof), of documentation and information regarding Taxes and Tax returns that could be relevant to the Taxes of the other party, (ii) the provision of additional information and explanation of such documentation, information and returns, (iii) the execution of any document regarding Taxes that would be reasonably helpful to the other party, and (iv) the use of a party's best efforts to obtain, from governmental authorities or third parties, documentation or information regarding Taxes that would be reasonably helpful to the other party. Section 4.04. Reimbursement. Each party providing information or witnesses under Sections 4.01, 4.02 or 4.03 to any other party shall be entitled to receive from the recipient, upon the presentation of invoices therefor, payment for all out-of-pocket costs and expenses as may be reasonably incurred in providing such information or witnesses. Section 4.05. Retention of Records. Except as otherwise required by law or agreed to in writing, each party shall preserve and retain all information relating to the other party's business in accordance with the record retention policies of such party as may be in effect from time to time. Notwithstanding the foregoing, any party may destroy or otherwise dispose of any information at any time; provided that prior to such destruction or disposal, (i) such party shall provide no less than 90 days prior written notice to the other party, specifying the information proposed to be destroyed or disposed of and (ii) if the recipient of such notice shall request in writing prior to the scheduled date for such destruction or disposal that any of the information proposed to be destroyed or disposed of be delivered to such requesting party, the party proposing the destruction or disposal shall promptly arrange for the delivery of such of the information as was requested at the expense of the requesting party. Section 4.06. Confidentiality. Each party shall hold and shall cause its directors, officers, employees, agents, consultants and advisors to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all information (other than any such information relating solely to the business or affairs of such party) concerning the other party (except to the extent that such information can be shown to have been (i) in the public domain through no fault of such party or (ii) later lawfully acquired on a non-confidential basis from other sources by the party to which it was furnished), and neither party shall release or disclose such information to any other person, except its auditors, attorneys, financial advisors, bankers and other consultants and advisors who shall be advised of and agree in writing to comply with the provisions of this Section 4.06. Each party shall be deemed to have satisfied its obligation to hold confidential information concerning or supplied by the other party if it exercises the same care as it takes to preserve confidentiality for its own similar information. ARTICLE V REPRESENTATIONS AND COVENANTS Section 5.01. Certain Prohibited Actions. (a) Each of FTX and FCX covenants that it shall comply with Section 5.01(b), to the extent that the prohibited actions specified therein apply to it, unless it shall have first (i) obtained either an opinion of nationally recognized tax counsel or a supplemental private letter ruling from the Internal Revenue Service, stating that the contemplated actions would not adversely affect the tax-free nature of the Distribution or the ability of FTX to rely on the Ruling, (ii) presented such opinion of counsel or supplemental private letter ruling to the other party, and (iii) described all material aspects of the contemplated actions to such other party. (b) (i) FTX and FCX shall not initiate or support any action during the Five-Year Period that would in any way change the ability of the holders of the Class B Common Stock to elect at least 80% of the members of the FCX Board and the ability of the holders of the Class A Common Stock and the Preferred Stock, voting together as a single class, to elect the remaining members of the FCX Board, including, without limitation, voting to combine the Class A Common Stock and the Class B Common Stock. In addition, FCX shall not permit its shareholders to vote during the Five-Year Period to change the described voting structure. (ii) During the Two-Year Period, FCX shall not issue shares of any preferred stock that would not entitle the holders to vote together with the Class A Common Stock and the existing classes of Preferred Stock in the election of certain members of the FCX Board. (iii) During the Two-Year Period, FCX shall not dispose of any of the common stock of PT-FI, subordinated promissory notes of PT-FI or production payment loans of PT-FI that it holds on the Distribution Date. (iv) FCX shall use its best efforts to cause PT-FI to (A) remain the operator under the Contract of Work dated December 30, 1991 between PT-FI and the Government of the Republic of Indonesia, and (B) continue the conduct of its copper and gold business in a substantially unchanged manner during the Two-Year Period as such business is operated prior thereto and to use its business assets in such business; provided that any transaction contemplated or described in or in connection with the following agreements shall not be taken into account for the purposes of this Section 5.01(b)(iv): (I) the Implementation Agreement, (II) the Participation Agreement between PT-FI and an Indonesia limited liability company to be formed as a wholly owned subsidiary of RTZ, the form of which agreement is set forth in Schedule 1 to the Implementation Agreement, (III) the Credit Facility of up to $450 million between PT-FI and a United Kingdom subsidiary of RTZ, the form of which facility is set forth in Schedule 2 to the Implementation Agreement, and (IV) any other agreements between FTX, FCX, RTZ and their respective Affiliates. (v) During the Two-Year Period, FTX shall not dispose of the direct or indirect interests in FRP that it holds on the Distribution Date; provided that FTX shall be allowed to transfer interests in FRP pursuant to compensatory or incentive stock options for employees, officers or directors if FTX shall beneficially own at least 50.1% of FRP following such transfer. (vi) FTX shall use its best efforts to (A) remain the administrative managing general partner of FRP during the Two-Year Period, and (B) cause FRP to continue the conduct of its sulphur and phosphate fertilizer businesses in a substantially unchanged manner during the Two-Year Period as such businesses are operated prior thereto and to use its business assets in such businesses. (vii) During the Two-Year Period, FTX, FRP, FCX and PT-FI shall not take affirmative steps to merge into another entity, to liquidate or to sell or otherwise dispose of any of their assets except for asset dispositions made in the ordinary course of business. (viii) FTX and FCX shall not directly or indirectly redeem or otherwise reacquire shares of the FTX Common Stock and the Class B Common Stock, respectively, during the Two-Year Period except to the extent that (A) a corporate business purpose shall support such redemption or reacquisition, (B) the redeemed or reacquired stock shall be widely held, (C) the redemption or reacquisition shall be made on the open market, (D) to the best of the knowledge of FTX or FCX, as the case may be, the redemption or reacquisition shall not be made from a director or officer, or any shareholder owning 1% or more of the outstanding stock of the corporation, and (E) FTX and FCX shall have no plan or intention, as of the Distribution Date, that the aggregate amount of stock repurchased would equal or exceed 20% of the outstanding stock of the relevant corporation; provided that these prohibitions shall not be effective as to the receipt by FTX or FCX, as the case may be, of FTX Common Stock or Class B Common Stock, respectively, in lieu of the payment of cash upon the exercise by an employee, officer or director of compensatory or incentive stock options. Neither FTX nor FCX shall initiate a periodic stock redemption program during the Two-Year Period unless such program shall be expected to comply with the requirements set forth in (A) through (E) of this Section 5.01(b)(viii). (ix) FCX shall not redeem or otherwise reacquire the Class B Common Stock during the Two-Year Period, to the extent that such redemption or reacquisition would result in the Class B Common Stock representing less than 50% of the common equity of FCX. (x) After the expiration of one year from the Distribution Date, FTX and FCX shall not operate under the Management Services Agreement. Except for the temporary supply of certain administrative services under such agreement, each of FTX and FCX shall arrange for the provision of the administrative services requisite to the conduct of its business. FTX and FRP shall conduct their sulphur and phosphate fertilizer businesses through employees, officers and directors of FTX or FRP or both and FCX and PT-FI shall conduct their copper and gold business through employees, officers and directors of FCX or PT-FI or both; provided that the foregoing shall not prevent certain individuals from being employees, officers or directors of both FTX and FCX. (c) For the purposes of this Section 5.01, a transaction occurring at any point in time subsequent to the expiration of the Two-Year Period or the Five-Year Period, as the case may be, shall be deemed to occur within such period if (i) such transaction results from a binding commitment of the relevant entity entered into within such period, or (ii) such transaction or a transaction of substantially similar nature for Tax purposes shall have been publicly announced, proposed (whether or not accepted) or approved (in principle or otherwise) by its Board of Directors (or, in the case of FRP, FTX) during such period. Section 5.02. Representations and Covenants Set Forth In the Ruling. Each of FTX and FCX hereby reaffirms that the representations and covenants set forth in the Ruling are valid as of the date hereof and covenants to reaffirm on the Distribution Date that such representations and covenants are valid on such date, in each case to the extent that such representations and covenants apply to it. Section 5.03. State and Local Taxes. Each of FTX and FCX covenants that, in the event the two parties are treated as members of a consolidated, combined or unitary group in any taxable year for the purposes of state and local income taxes in California, Kansas, Minnesota, Montana, Nebraska or North Dakota or with respect to the foreign metals business, it shall indemnify, defend and hold harmless the other party and its Affiliates from and against the portion of such taxes, together with any interest, penalty, addition to tax or additional amount related to such taxes, that is allocable to the indemnifying party using principles analogous to those described in paragraph 4 of the Management Services Agreement dated May 1, 1988, except for paragraphs 4(h) and 4(i) thereof. Section 5.04. Applicability of the Management Services Agreement. Subject to Section 5.01(b)(x), FTX, FCX and PT-FI shall continue to comply with, and be bound by, such provisions of the Management Services Agreement dated May 1, 1988 as shall be applicable, including, without limitation, paragraph 4 thereof. Section 5.05. Employee Matters. Each of FTX and FCX covenants that, except as otherwise agreed by FTX and FCX, all employee matters and employee benefits arrangements shall be governed by the Employee Benefits Allocation Agreement, the form of which is attached hereto as Exhibit A. ARTICLE VI MISCELLANEOUS Section 6.01. Expenses. Except as specifically provided in this Agreement, each of FTX and FCX shall pay all costs and expenses incurred by it or on its behalf in connection with this Agreement, the Distribution and the transactions contemplated hereby and thereby, including, without limitation, the fees and expenses of its own legal counsel, accountants and financial and other advisors. Section 6.02. Notices. All notices, requests and other communications under this Agreement to any party shall be in writing (including facsimile or similar writing) and shall be given if to FTX, to: Freeport-McMoRan Inc. 1615 Poydras Street New Orleans, Louisiana 70112 Attention: General Counsel Telecopier: (504) 585-3512 if to FCX, to: Freeport-McMoRan Copper & Gold Inc. 1615 Poydras Street New Orleans, Louisiana 70112 Attention: General Counsel Telecopier: (504) 585-3512 or to such other address or telecopier number as such party may hereafter specify for the purpose by notice to the other parties. Each such notice, request or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the telecopier number specified in this Section 6.02 and transmission of the appropriate number of pages is confirmed or (ii) if given by any other means, when delivered at the address specified in this Section 6.02. Section 6.03. Amendment and Waiver. This Agreement may not be altered or amended, nor may rights hereunder be waived, except by an instrument in writing executed by each party, or in the case of a waiver by an instrument in writing executed by the party against whom such waiver is to be effective. No waiver of any terms, provision or condition of or failure to exercise or delay in exercising any rights or remedies under this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, provision, condition, right or remedy or as a waiver of any other term, provision or condition of this Agreement. Section 6.04. Arbitration. All disputes between FTX and its Affiliates, on the one hand, and FCX and its Affiliates, on the other, arising out of or in connection with this Agreement, or the breach thereof, shall be settled by arbitration in New Orleans, Louisiana, in accordance with the Rules of the American Arbitration Association in effect at the time of such reference. Judgment upon the award rendered may be entered in any court having jurisdiction or application may be made to such court for a judicial acceptance of the award and a order of enforcement, as the case may be. The parties hereto agree to cooperate in good faith to expedite to the maximum practicable extent the conduct of any arbitral proceedings commenced under this Agreement. Section 6.05. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same Agreement. Section 6.06. Governing Law. This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware. Section 6.07. Entire Agreement. This Agreement and the Employee Benefits Allocation Agreement shall constitute the entire understanding of the parties hereto with respect to the subject matter hereof, superseding all negotiations, prior discussions and prior agreements and understandings relating to such subject matter. Section 6.08. Parties in Interest. Neither party hereto may assign any of its rights or delegate any of its duties under this Agreement without the prior written consent of the other party. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns. Nothing contained in this Agreement, express or implied, is intended to confer upon any Person other than the parties hereto, any benefits, rights or remedies. Section 6.09. Specific Enforcement. FTX and FCX acknowledge that the other would be irreparably harmed by a breach of any provision of Section 5.01 or 5.02 of this Agreement and that there would be no adequate remedy at law or in damages to compensate for such breach. Each agrees that the other shall be entitled to injunctive relief requiring specific performance by FTX or FCX, as the case may be, of any provision of Section 5.01 or 5.02 of this Agreement and consents to the entry thereof. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed as of the date first above written. FREEPORT-McMoRan INC. By /s/ Rene L. Latiolais Name: Rene L. Latiolais Title: President and Chief Operating Officer FREEPORT-McMoRan COPPER & GOLD INC. By /s/ George A. Mealey Name: George A. Mealey Title: President and Chief Operating Officer Exhibit A EMPLOYEE BENEFITS ALLOCATION AGREEMENT This Employee Benefits Allocation Agreement dated as of July 5, 1995 is entered into between Freeport-McMoRan Inc., a Delaware corporation ("FTX"), and Freeport-McMoRan Copper & Gold Inc., a Delaware corporation ("FCX" or the "Company"). Background 1. FTX currently owns common stock of FCX representing a controlling interest in FCX. 2. From the date of its inception, FCX has employed no United States employees, but has relied on FTX for management and other services that have been provided pursuant to a management services agreement among, inter alia, FTX and FCX. 3. FTX intends to distribute to its common stockholders, on a tax-free basis, all of the Class B Common Stock, par value $0.10 per share, of FCX owned by FTX at the time of such distribution (the "Distribution"). 4. In connection with the Distribution, the parties intend that FTX will continue for a period of time to provide employment and management services to FCX pursuant to the existing management services agreement and that certain FTX employees will at a future time become employees of FCX. 5. FTX and FCX wish to agree as to the allocation of liabilities and responsibilities relating to the transferred employees in connection with employee compensation and benefit arrangements. Agreement 1. Definitions. For purposes of this Agreement, the following terms shall have the meaning set forth below. (a) "Adjusted FCX Award" shall mean an option to purchase, or stock appreciation right or stock incentive unit relating to, FCX Shares that results from the adjustment and conversion of an FTX Award pursuant to Paragraph 6. (b) "Adjusted FTX Award" shall mean an FTX Award that is adjusted in accordance with the provisions of Paragraph 6. (c) "Adjusted Stock Award Plan" shall mean the Freeport-McMoRan Copper & Gold Inc. Adjusted Stock Award Plan, adopted pursuant to Paragraph 6. (d) "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations (including temporary and proposed regulations) promulgated thereunder. (e) "Directors Plan" shall mean the Freeport- McMoRan Copper & Gold Inc. 1995 Stock Option Plan for Non-Employee Directors, adopted pursuant to paragraph 6. (f) "Distribution Date" shall mean the effective date of the Distribution. (g) "Dual Employee" shall mean an employee who becomes a Transferred Employee but who thereafter also remains employed by FTX or its subsidiaries (other than FCX). (h) "Effective Date" shall mean, with respect to any Transferred Employee, such Employee's date of hire by FCX or one of its subsidiaries. (i) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. (j) "FCX Individual Account Plan" shall mean one or more defined contribution plans to be established or designated by FCX for the benefit of Transferred Employees, pursuant to Paragraph 5. (k) "FCX Pension Plan" shall mean one or more defined benefit pension plans to be established or designated by FCX for the benefit of Transferred Employees, pursuant to Paragraph 4. (l) "FCX Shares" shall mean Class B Common Stock, par value $0.10 per share, of FCX. (m) "FTX AIP" shall mean the Freeport-McMoRan Inc. Annual Incentive Plan. (n) "FTX Award" shall mean an option, stock appreciation right, limited right, stock incentive unit or other award relating to FTX Shares that has been granted under an FTX Stock Plan and is outstanding on the Effective Date. (o) "FTX Benefit Arrangements" shall mean each employment, severance or similar contract, arrangement or policy (exclusive of any such contract, arrangement or policy that is terminable within 30 days without liability of FTX or any of its affiliates), and each plan or arrangement (whether or not written) providing for severance benefits, insurance coverage (including any self-insured arrangements), workers' compensation, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits or for deferred compensation, profit-sharing, bonuses, stock options, stock appreciation rights or other forms of incentive compensation or post-retirement insurance, compensation or benefits that (i) is not an FTX Employee Plan, (ii) is entered into or maintained, as the case may be, by FTX or any of its affiliates (other than FCX) and (iii) covers any Transferred Employee. (p) "FTX EBP" shall mean the Freeport-McMoRan Inc. Excess Benefits Plan. (q) "FTX Employee Plans" shall mean each "employee benefit plan", as defined in Section 3(3) of ERISA, that (i) is subject to any provision of ERISA, (ii) is maintained, administered or contributed to by FTX or any of its affiliates (other than FCX) and (iii) covers any Transferred Employee. (r) "FTX Executive Plans" shall mean the FTX AIP, the FTX LTPIP, the FTX PIAP, the FTX SECAP and the FTX EBP. (s) "FTX Individual Account Plan" shall mean the Freeport-McMoRan Inc. Employee Capital Accumulation Program. (t) "FTX LTPIP" shall mean either or both of the Freeport-McMoRan Inc. 1987 Long-Term Performance Incentive Plan and the Freeport-McMoRan Inc. 1992 Long- Term-Performance Incentive Plan. (u) "FTX Pension Plan" shall mean the Freeport- McMoRan Inc. Employee Retirement Plan. (v) "FTX PIAP" shall mean the Freeport-McMoRan Inc. Performance Incentive Awards Program. (w) "FTX SECAP" shall mean the Freeport-McMoRan Inc. Supplemental Executive Capital Accumulation Plan. (x) "FTX Shares" shall mean shares of FTX common stock, par value $1 per share. (y) "FTX Stock Plan" shall mean any plan of FTX, other than an FTX Executive Plan, under which any award is or has been granted to FTX employees, officers or directors and is outstanding on the Effective Date, which award relates to FTX Shares, including, without limitation, options, stock appreciation rights, performance units, stock incentive units, Limited Rights, as defined in any such Plan, tax-offset payment rights, etc. (z) "Retired Employees" shall mean all former, retired and long-term disabled employees of FTX and its subsidiaries (including FCX), as of the Distribution Date. (aa) "Rule 16b-3" shall mean Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, and any successor provision. (bb) "Section 162(m)" shall mean Section 162(m) of the Code and any memoranda or decisions issued by the Internal Revenue Service or the Department of the Treasury with respect thereto. (cc) "Securities Act" shall mean the Securities Act of 1933, as amended. (dd) "SIU Plan" shall mean the Freeport-McMoRan Copper & Gold Inc. Stock Incentive Unit Plan, adopted pursuant to paragraph 6. (ee) "Stock Plan" shall mean the Freeport-McMoRan Copper & Gold Inc. 1995 Stock Option Plan, adopted pursuant to Paragraph 6. (ff) "Transferred Employees" shall mean those active employees of FTX or its subsidiaries (other than FCX) who by mutual agreement between FTX and FCX become employees of FCX or one of its subsidiaries following the Distribution. Any such employee shall be considered a Transferred Employee whether or not such employee remains employed by FTX following the Distribution. 2. Employment by FCX. (a) As used in this Agreement, unless otherwise expressly stated or required by context, "FTX employee", or words with similar effect, shall refer to employees of any of FTX and its subsidiaries other than FCX, and "FCX employee", or words with similar effect, shall refer to employees of any of FCX and its subsidiaries. (b) Each Transferred Employee will become an employee of FCX as of such Transferred Employee's Effective Date. Such employment shall initially be upon the same terms and conditions, with the same wage or salary level, seniority and job location as those on which or at which such employees were employed by FTX immediately prior to such Effective Date; provided, however, that in the case of Dual Employees, such employment shall be on such terms and conditions as are determined by the Board of Directors of FCX. No provision of this Agreement shall preclude or impair the ability of FCX to terminate the employment of any Transferred Employee or to change the terms, conditions or location of employment following the Effective Date. 3. Representations. (a) FTX has furnished or made available to FCX copies or descriptions of all FTX Employee Plans and FTX Benefit Arrangements. (b) The FTX Pension Plan and the FTX Individual Account Plan have each received a favorable determination letter from the Internal Revenue Service and FTX knows of no event or circumstance occurring or existing since the date of such letter, in either case, that would cause such plan to fail to be qualified under Section 401(a) of the Code, or that would cause the trust related to such plan to fail to be exempt from taxation under Section 501(a) of the Code. (c) Each FTX Employee Plan and FTX Benefit Arrangement has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations, including but not limited to ERISA and the Code, that are applicable thereto. (d) No FTX Employee Plan is a "multiemployer plan", as described in Sections 3(37) or 4001(a)(3) of ERISA. (e) As of December 31, 1994, the fair market value of the assets of the FTX Pension Plan (excluding for these purposes any accrued but unpaid contributions) exceeded the "Accumulated Benefit Obligation" of such Plan, as determined for purposes of GAAP, using methods and assumptions required under GAAP. (f) The representations set forth in this Paragraph 3 shall survive until the obligations of the parties hereunder have been fully performed. 4. Pension Plan. (a) At such time following the Distribution Date as is agreed by FTX and FCX, FTX shall cause the trustee of the FTX Pension Plan to segregate, in accordance with the spin-off provisions set forth under Section 414(l) of the Code and in accordance with the provisions set forth below, the assets of the FTX Pension Plan allocable to Transferred Employees (other than Dual Employees) and shall make any and all filings and submissions to the appropriate governmental agencies arising in connection with such segregation of assets and all necessary amendments to the FTX Pension Plan and related trust agreement to provide for such segregation of assets and the transfer of assets as described below. The assets of the FTX Pension Plan allocable to Transferred Employees shall be segregated in the form of cash and marketable securities. (b) The amount of such assets (the "Transfer Amount") shall be equal to the Accumulated Benefit Obligation of Transferred Employees other than Dual Employees, determined under GAAP in accordance with SFAS 87, or, if greater, the minimum amount that is necessary to comply with Section 414(l) of the Code. The Transfer Amount shall be determined as of a date mutually agreed by FTX and FCX and shall be increased by appropriate earnings attributable to the period from the date of such segregation to the date of transfer described herein and reduced by a pro rata share of the administrative expenses of the FTX Pension Plan for such period and any benefit payments made to Transferred Employees prior to the date of transfer of the Transfer Amount. FTX shall provide the actuary designated by FCX with all information necessary to verify the calculation of the Transfer Amount. (c) The disposition of the accrued benefits of Dual Employees under the FTX Pension Plan and the FTX EBP, and assets of the plan allocable thereto, if any, shall be as mutually agreed by FTX and FCX. (d) At such time as is agreed by FTX and FCX, FCX shall establish or designate the FCX Pension Plan, which shall be substantially comparable to the FTX Pension Plan, shall take all necessary action to qualify such Plan under the applicable provisions of the Code and shall make any and all filings and submissions to the appropriate governmental agencies required to be made by it in connection with the transfer of assets described in this Paragraph 4. As soon as practicable following the earlier of the receipt of a favorable determination letter from the Internal Revenue Service regarding the qualified status of the FCX Pension Plan as amended to the date of transfer, or the issuance of indemnities satisfactory to FTX and FCX, FTX shall cause the trustee of the FTX Pension Plan to transfer the Transfer Amount to the appropriate trustee designated by FCX under the trust agreement forming a part of the FCX Pension Plan. (e) In consideration for the transfer of assets described herein, FCX shall, or shall cause one of its subsidiaries to, effective as of the date of transfer described herein, assume all of the obligations of FTX and its subsidiaries in respect of benefits accrued by Transferred Employees under the FTX Pension Plan (exclusive of benefits paid prior to the date of transfer described herein) on or prior to the mutually agreed date. Neither FCX nor any of its affiliates shall assume any other obligations or liabilities arising under or attributable to the FTX Pension Plan. (f) The liabilities of Transferred Employees under the FTX EBP shall be calculated in accordance with the methods and procedures specified above with respect to the qualified pension plan to which the FTX EBP relates. In consideration of a payment by FTX to FCX of an amount in cash equal to the present value of such liabilities, FCX will, or will cause one or more of its subsidiaries to, assume all such liabilities of Transferred Employees. 5. Individual Account Plan. (a) At such time following the Distribution Date as is agreed by FTX and FCX, FTX shall (i) cause the trustee of the FTX Individual Account Plan to identify the assets of the FTX Individual Account Plan representing the full account balances of Transferred Employees (other than Dual Employees) as of a date mutually agreed by FTX and FCX, (ii) make any and all filings and submissions to the appropriate governmental agencies arising in connection with such segregation of assets and (iii) make all necessary amendments to the FTX Individual Account Plan and related trust agreement to provide for such identification of assets and the transfer of assets as described below. The manner in which the account balances of Transferred Employees under the FTX Individual Account Plan are invested shall not be affected by such identification of assets. (b) At such time as is agreed by FTX and FCX, FCX shall establish or designate the FCX Individual Account Plan, which shall be substantially comparable to the FTX Individual Account Plan, shall take all necessary action to qualify such plan under the applicable provisions of the Code and register such plan under the Securities Act, if applicable, and shall make any and all filings and submissions to the appropriate governmental agencies required to be made by it in connection with the transfer of assets described in this Paragraph 5. As soon as practicable following the earlier of the delivery to FTX of a favorable determination letter from the Internal Revenue Service regarding the qualified status of the FCX Individual Account Plan as amended to the date of transfer, or the issuance of indemnities satisfactory to FTX and FCX, FTX shall cause the trustee of the FTX Individual Account Plan to transfer in the form of cash or marketable securities (or such other form, including participant loans, as may be agreed by FCX and FTX) the full account balances of Transferred Employees under the FTX Individual Account Plan (which account balances will have been credited with appropriate earnings attributable to the period from the date of the identification thereof pursuant to Paragraph 5(a) to the date of transfer described herein), reduced by any necessary benefit or withdrawal payments to or in respect of Transferred Employees occurring during such period, to the appropriate trustee as designated by FCX under the trust agreement forming a part of the FCX Individual Account Plan. (c) Unless otherwise agreed by FTX and FCX, and notwithstanding any other provision of this Paragraph 5 to the contrary, any portion of such transferred account balances that is invested in equity securities of either FCX or FTX shall be transferred in the form of such securities. After the Effective Date, the FTX Individual Account Plan shall not be obligated to permit further investment in FCX equity securities, and the FCX Individual Account Plan shall not be obligated to permit further investment in FTX equity securities. (d) The disposition of the account balances of Dual Employees under the FTX Individual Account Plan and FTX SECAP shall be as mutually agreed by FTX and FCX. (e) In consideration for the transfer of assets described herein, FCX shall, or shall cause one or more of its subsidiaries to, effective as of the date of transfer described herein, assume all of the obligations of FTX and its subsidiaries in respect of the account balances accumulated by Transferred Employees under the FTX Individual Account Plan (exclusive of any portion of such account balances that are paid or otherwise withdrawn prior to the date of transfer described herein) on or prior to the mutually agreed date. Neither FCX nor any of its affiliates shall assume any other obligations or liabilities arising under or attributable to the FTX Individual Account Plan. (f) The account balances of Transferred Employees in the FTX SECAP will be transferred to FCX or one or more of its subsidiaries using the same methods and procedures as are specified above for the qualified plan to which the FTX SECAP relates. In consideration of a cash payment by FTX to FCX in an amount equal to such account balances of Transferred Employees, FCX will, or will cause one or more of its subsidiaries to, assume liability therefor. 6. Stock Plan Adjustments; Establishment of New Stock Plans. (a) Effective as of the Effective Date, FCX shall adopt the Adjusted Stock Award Plan, the Stock Plan, the SIU Plan and the Directors Plan and shall take all action necessary in regard to such plans to ensure compliance with Rule 16b-3, Section 162(m) and the Securities Act, as applicable and as deemed desirable by FCX. The Adjusted Stock Award Plan shall be established for the exclusive purpose of granting the Adjusted FCX Awards as described in this Paragraph 6. (b) Each outstanding FTX Award on the Effective Date shall be converted, in accordance with the procedures described in this Paragraph 6, into an Adjusted FTX Award and an Adjusted FCX Award with the same features as such FTX Award. The number of FCX Shares subject to an Adjusted FCX Award shall be that number of FCX Shares that a record holder of the number of FTX Shares underlying the related FTX Award would have received in the Distribution. (c) Each Adjusted FCX Award and each Adjusted FTX Award will have the same remaining duration and other terms and conditions as the FTX Award from which it was derived; provided, however, that if an Adjusted FCX Award provides the holder thereof with a stock option and if the FTX Award from which such Adjusted FCX Award is derived has a term that will expire prior to one hundred and eighty days after the Effective Date, the term of such Adjusted FCX Award shall expire on the one hundred and eightieth day after the Effective Date; and further provided, however, that no Adjusted FCX Award providing the holder thereof with a stock option shall be exercisable prior to the ninetieth day after the Effective Date. Without limiting the generality of the foregoing, if an FTX Award contains a feature providing for a cash payment upon exercise to defray in whole or in part income tax obligations arising in connection therewith, then the resulting Adjusted FCX Award and Adjusted FTX Award will have such feature, and, if an FTX Award contains "limited rights", then the resulting Adjusted FCX Award and Adjusted FTX Award will have "limited rights". (d) The exercise price of an Adjusted FTX Award shall be determined by multiplying the exercise price of the FTX Award from which such Adjusted FTX Award was derived by a fraction, the numerator of which is the FTX Net Distribution Value, as defined below, and the denominator of which is the FTX Distribution Value, as defined below. (e) The exercise price of an Adjusted FCX Award shall be determined by multiplying the exercise price of the FTX Award from which such Adjusted FCX Award was derived by a fraction, the numerator of which is the FCX Distribution Value, as defined below, and the denominator of which is the FTX Distribution Value. (f) For purposes of the foregoing, the "FCX Distribution Value" shall be the weighted average when- issued per share price of the FCX Shares on the New York Stock Exchange on the first day on which the FCX Shares are traded on a when-issued basis on the New York Stock Exchange; the "FTX Distribution Value" shall be the weighted average per share price of the FTX Shares on the New York Stock Exchange on such trading day (trading with due bills, if such date is after the record date of the Distribution) and the "FTX Net-Distribution Value" shall be (i) the FTX Distribution Value minus (ii) the product of the Distribution Ratio, as hereinafter defined, and the FCX Distribution Value. The "Distribution Ratio" shall mean the number of FCX Shares distributed in the Distribution per FTX Share, rounded to the nearest one-millionth (.000001) of an FCX Share. 7. Deferred Compensation Liabilities. As of the Transferred Employees' respective Effective Dates, FTX shall calculate the liability of FTX and its subsidiaries other than FCX in respect of such Transferred Employees' deferred compensation, including without limitation deferred awards under the FTX PIAP, FTX AIP, FTX LTPIP and predecessor plans, if any. In consideration of a cash payment by FTX to FCX in an amount equal to such accrued liability, FCX will, or will cause one or more of its subsidiaries to, assume such liability in respect of Transferred Employees. Notwithstanding the foregoing, FTX liability in respect of Dual Employees will be allocated as agreed by FTX and FCX. 8. Welfare Plans. (a) As of their respective Effective Dates, subject to the provisions of Paragraph 8(d), Transferred Employees shall cease participation in all FTX Employee Plans and FTX Benefit Arrangements providing for health, medical, dental and life insurance or similar benefits ("welfare plan"). Except as otherwise set forth in this Agreement, FTX shall retain all obligations and liabilities under the FTX Employee Plans and FTX Benefit Arrangements. (b) FTX's welfare plans shall retain liability for and shall pay when due all benefits described in Paragraph 8(a) that are attributable to claims incurred prior to a Transferred Employee's Effective Date by such Transferred Employees (and his or her eligible dependents). FCX and its welfare plans shall be liable for and shall pay when due all such benefits attributable to claims incurred on or after a Transferred Employee's Effective Date by such Transferred Employees (and his or her eligible dependents). For such purpose, unless otherwise agreed by FTX and FCX, a claim is deemed incurred when the services that are the subject of the claim are performed, when the death occurs (in the case of life insurance), as of the date beginning a period of absence eventually resulting in entitlement to benefits (in the case of long-term disability benefits) and in the case of a hospital stay, based on the date any such hospitalization is initiated. (c) The group health plans established by FCX for the benefit of Transferred Employees shall (i) waive any pre-existing condition limitations, (ii) waive any eligibility waiting periods and (iii) give effect, in determining or applying any deductible and maximum out-of- pocket limitations to claims incurred, amounts paid by, and amounts reimbursed to, such employees under the group health plans maintained by FTX for their benefit immediately prior to the applicable Effective Date. (d) FCX will give Transferred Employees full credit for purposes of eligibility, vesting and benefit accrual (as such purposes may be applicable) under the employee benefit plans of FCX for such employees' respective service recognized for such purposes under the corresponding FTX Employee Plan or FTX Benefit Arrangement. (e) Notwithstanding any other provision of this Paragraph 8 to the contrary, the welfare benefits of Dual Employees after their respective Effective Dates shall be provided as agreed by FTX and FCX. (f) FTX and FCX shall provide each other with copies of such records as are reasonably required to enable the parties to perform their obligations hereunder. (g) In respect of the Accumulated Post-Retirement Benefit Obligation ("APBO") of FTX employees and FCX employees under SFAS 106, FCX agrees to pay to FTX an amount in cash equal to the excess, if any, of (i) the decrease in FCX SFAS 106 APBO liability after the Distribution which is attributable to the assumption by FTX of SFAS 106 APBO liability which prior to the Distribution was reflected on the audited balance sheet of FCX over (ii) the increase in FCX SFAS 106 APBO liability after the Distribution which is attributable to the assumption by FCX of SFAS 106 APBO liability which prior to the Distribution was reflected on the audited balance sheet of FTX. For purposes of this Paragraph 8(g), APBO shall be calculated as of employees' Effective Dates that relate to or coincide with the termination of the management services agreement referred to in Paragraph 4 under "Background", above. In the event that the amount described in clause (ii) of this Paragraph 8(g) exceeds the amount described in clause (i), FTX agrees to pay to FCX an amount in cash equal to such excess. 9. Expenses. Each of FCX and FTX shall pay its own expenses in connection with the performance of its obligations under this Agreement. 10. Third-Party Beneficiaries. No provision of this Agreement shall create any third party beneficiary rights in any Transferred Employee, Retired Employee or any employee or former employee of FTX (including any beneficiary or dependent thereof), including any rights in respect of continued employment or resumed employment, and no provision of this Agreement shall create any rights in any such persons in respect of any benefits that may be provided, directly or indirectly, under any employee benefit plan or arrangement. 11. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. FREEPORT-McMoRan COPPER & GOLD INC. By: /s/ George A. Mealey Name: George A. Mealey Title: President and Chief Operating Officer FREEPORT-McMoRan INC. By: /s/ Rene L. Latiolais Name: Rene L. Latiolais Title: President and Chief Operating Officer EX-4 3 Exhibit EXECUTION COPY FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP FREEPORT-McMoRan INC. _______________________ $400,000,000 CREDIT AGREEMENT Dated as of June 30, 1995 with CERTAIN BANKS, CHEMICAL BANK, as Administrative Agent, FRP Collateral Agent and FTX Collateral Agent, and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Documentary Agent TABLE OF CONTENTS Page Parties and Recitals ................................ 1 ARTICLE I Definitions Section 1.1. Definitions .......................... 2 Section 1.2. Accounting Terms ..................... 23 Section 1.3. Section, Article, Exhibit and Schedule References, etc. .......... 23 ARTICLE II The Loans Section 2.1. Revolving Credit Facility ............ 24 Section 2.2. Loans ................................ 24 Section 2.3. Notice of Loans ...................... 25 Section 2.4. Promissory Notes ..................... 26 Section 2.5. Interest on Loans .................... 27 Section 2.6. Fees ................................. 28 Section 2.7. Maturity and Reduction of Commitments ........................ 29 Section 2.8. Interest on Overdue Amounts; Alternative Rate of Interest ....... 30 Section 2.9. Prepayment of Loans .................. 31 Section 2.10. Continuation and Conversion of Loans ........................... 32 Section 2.11. Reserve Requirements; Change in Circumstances ...................... 34 Section 2.12. Change in Legality ................... 38 Section 2.13. Indemnity ............................ 39 Section 2.14. Pro Rata Treatment ................... 39 Section 2.15. Sharing of Setoffs ................... 40 Section 2.16. Payments ............................. 41 Section 2.17. U.S. Taxes ........................... 42 Section 2.18. FTX or Restricted Subsidiary as General Partner .................... 45 ARTICLE III Representations and Warranties Section 3.1. Representations and Warranties........ 46 (a) Organization, Powers ............ 46 (b) Authorization ................... 46 (c) Governmental Approvals ........... 47 (d) Enforceability .................. 47 (e) Financial Statements ............ 47 (f) Litigation; Compliance with Laws; etc. .................... 48 (g) Title, etc. ..................... 49 (h) Federal Reserve Regulations; Use of Proceeds ............... 49 (i) Taxes ........................... 50 (j) Employee Benefit Plans .......... 51 (k) Investment Company Act .......... 51 (l) Public Utility Holding Company Act ........................... 51 (m) Subsidiaries .................... 51 (n) Environmental Matters............ 52 (o) Security Documents .............. 53 (p) No Material Misstatements ....... 54 ARTICLE IVC Conditions to Initial Credit Event . . . . . . . 54 ARTICLE V Covenants Section 5.1. Affirmative Covenants of the Borrowers ......................... 58 (a) Financial Statements, etc. ...... 58 (b) Taxes and Claims ................ 60 (c) Maintenance of Existence; Conduct of Business ........... 60 (d) Compliance with Applicable Laws . 60 (e) Litigation ...................... 60 (f) ERISA ........................... 61 (g) Compliance with Environmental Laws .......................... 61 (h) Preparation of Environmental Reports ....................... 61 (i) Insurance ....................... 62 (j) Access to Premises and Records .. 62 (k) Further Assurances .............. 62 (l) Covenants regarding FRP ......... 63 Section 5.2. Negative Covenants of the Borrower ... 63 (a) Conflicting Agreements .......... 63 (b) Hedge Transactions .............. 63 (c) Consolidation or Merger; Disposition of Assets and Capital Stock ................. 64 (d) Liens ........................... 65 (e) Current Ratio ................... 68 (f) EBITDA Ratio .................... 68 (g) Debt ............................ 68 (h) Debt to Capital Ratio ........... 70 (i) Subordinated Debt Payments ...... 70 (j) Ownership of Subsidiaries ....... 70 (k) Fiscal Year ..................... 70 (l) Investments in Nonrestricted Subsidiaries and Persons Not Subsidiaries................... 70 (m) Federal Reserve Regulations ..... 71 (n) Certain Debt Agreements ......... 72 (o) FRP Transfers ................... 72 (p) Transactions with Affiliates .... 72 (q) Equity Payments ................. 73 (r) Covenants Regarding IMC-Agrico .. 73 (s) Scope of FRP's Business ......... 73 (t) Covenants Relating to RTZ Transaction ................... 74 ARTICLE VI Conditions to Credit Events Section 6.1. Conditions Precedent to Each Credit Event ............................... 75 Section 6.2. Representations and Warranties with Respect to Credit Events ............ 76 ARTICLE VII Events of Default Section 7.1. Events of Default .................... 76 ARTICLE VIII The Agents Section 8.1. The Agents ............................ 80 ARTICLE IX Miscellaneous Section 9.1. Notices ............................. 85 Section 9.2. Survival of Agreement ............... 85 Section 9.3. Successors and Assigns; Participations; Purchasing Banks ............................. 85 Section 9.4. Expenses of the Banks; Indemnity .... 90 Section 9.5. Right of Setoff ..................... 92 Section 9.6. Applicable Law ...................... 93 Section 9.7. Waivers; Amendments ................. 93 Section 9.8. Severability ........................ 94 Section 9.9. Counterparts ........................ 95 Section 9.10. Headings ............................ 95 Section 9.11. Entire Agreement .................... 95 Section 9.12. Waiver of Jury Trial, etc. .......... 95 Section 9.13. Interest Rate Limitation ............ 96 Section 9.14. Jurisdiction; Consent to Service of Process ........................... 96 Section 9.15. Confidentiality ...................... 97 Schedule I Applicable Margin for Loans and Commitment Fees Schedule II Commitments of the Banks Schedule III Subsidiaries Schedule IV Governmental Approvals Schedule V Main Pass Properties Schedule VI UCC Filing Offices Schedule VII FM Properties Debt Schedule VIII Deemed Leases Schedule IX Ownership Schedule for IMC-Agrico Schedule X Form of Subordination Terms Schedule XI Summary Description of Restructuring and RTZ Transaction Exhibit A Form of Promissory Note Exhibit B Form of Borrowing Notice Exhibit C Form of Administrative Questionnaire Exhibit D Form of Commitment Transfer Supplement Exhibit E Form of FRP Security Agreement and Mortgage Exhibit F Form of FTX Security Agreement Exhibit G Form of Second Amendment and Restatement of FTX Intercreditor Agreement Exhibit H Form of Opinion of the General Counsel of FTX Exhibit I Form of Opinion of Davis Polk & Wardwell Exhibit J Form of Opinion of Liskow & Lewis Exhibit K Form of Opinion of Richards, Layton & Finger CREDIT AGREEMENT dated as of June 30, 1995, among FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP, a Delaware limited partnership ("FRP"), FREEPORT-McMoRan INC., a Delaware corporation ("FTX"; FTX and FRP being the "Borrowers"), the undersigned financial institutions (collectively, the "Banks"), CHEMICAL BANK, a New York banking corporation ("Chemical"), as administrative agent for the Banks (in such capacity, the "Administrative Agent"), as collateral agent for the Banks (in such capacity, the "FRP Collateral Agent") under the FRP Security Agreement (as defined below) and as collateral agent for the Banks and certain other lenders (in such capacity, the "FTX Collateral Agent") under the FTX Security Agreement (as defined below), and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking association ("Chase"), as documentary agent for the Banks (in such capacity, the "Documentary Agent"; the Administrative Agent, the FRP Collateral Agent, the FTX Collateral Agent and the Documentary Agent being, collectively, the "Agents"). FRP and FTX have requested the Banks to extend credit on a secured basis to FRP and FTX in order to enable them to borrow on a revolving credit basis at any time and from time to time prior to the Maturity Date (as herein defined). The aggregate principal amount of all revolving credit loans at any time outstanding hereunder shall not exceed $400,000,000; provided that the aggregate principal amount of all revolving credit loans to FTX at any time outstanding shall not exceed $75,000,000. The proceeds of such borrowings are to be used to refinance outstanding borrowings under the existing $800,000,000 Amended and Restated Credit Agreement dated as of June 1, 1993, among FTX, FRP, certain banks and Chemical, as agent for such banks (the "Existing Credit Agreement"), and for corporate purposes of the Borrowers but may not be used to prepay subordinated debt of the Borrowers. The Banks are willing to make secured loans to FRP and to FTX upon the terms and subject to the conditions hereinafter set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows: ARTICLE I Definitions SECTION 1.1. Definitions. As used in this Agreement, the following terms have the meanings indicated (any term defined in this Article I or elsewhere in this Agreement in the singular and used in this Agreement in the plural shall include the plural, and vice versa): "Administrative Questionnaire" means an Administrative Questionnaire in the form of Exhibit C. "Affiliate" means, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. "Agrico LP" means Agrico, Limited Partnership, a Delaware limited partnership between FTX (as successor by liquidation to Freeport Chemical Company), as general partner, and FRP, as limited partner. "Alternate Base Rate" means for any day, a rate per annum (rounded upwards, if not already a whole multiple of 1/100 of 1%, to the next higher 1/100 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect for such day plus 1/2 of 1%. For purposes hereof, the term "Prime Rate" means the rate of interest per annum publicly announced from time to time by Chemical as its prime rate in effect at its principal office in the City of New York; each change in the Prime Rate shall be effective on the date such change is publicly announced as being effective. "Base CD Rate" means the sum of (x) the product of (i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (y) the Assessment Rate. "Three-Month Secondary CD Rate" means, for any day, the secondary market rate for three-month certificates of deposit reported as being in effect on such day (or, if such day shall not be a Business Day, the next preceding Business Day) by the Board through the public information telephone line of the Federal Reserve Bank of New York (which rate will, under the current practices of the Board, be published in Federal Reserve Statistical Release H.15(519) during the week following such day), or, if such rate shall not be so reported on such day or such next preceding Business Day, the average of the secondary market quotations for three- month certificates of deposit of major money center banks in New York City received at approximately 10:00 a.m., New York City time, on such day (or, if such day shall not be a Business Day, on the next preceding Business Day) by the Administrative Agent from three New York City negotiable certificate of deposit dealers of recognized standing selected by it. "Federal Funds Effective Rate" means, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate or both for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to clause (b) or (c), or both, of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective Rate, respectively. "Applicable LIBO Rate" means on a per annum basis, in respect of any LIBO Rate Loan, for each day during the Interest Period for such Loan, the sum of (i) the LIBO Rate as determined by the Administrative Agent plus (ii) the Applicable Margin. "Applicable Margin" means, with respect to any LIBO Rate Loan or Reference Rate Loan, or with respect to the Commitment Fees, as the case may be, the applicable percentage for the relevant Borrower set forth on Schedule I hereto under the caption "LIBOR Spread", "ABR Spread" or "Fee Percentage", as the case may be, based upon the ratings by S&P and Moody's, respectively, applicable on such date to the Index Debt. For purposes of the foregoing, (i) if either Moody's or S&P shall not have in effect a rating for the Index Debt (other than by reason of the circumstances referred to in the last sentence of this definition), then such rating agency shall be deemed to have established a rating of BB-/Ba3, unless such rating agency shall have in effect a rating for senior subordinated unsecured, non- credit enhanced, long-term indebtedness for borrowed money of FRP, in which case such rating, increased by two categories, shall be used as the Index Debt rating of such rating agency so long as such rating agency has in effect such a rating and does not have in effect a rating for Index Debt; (ii) if the ratings established or deemed to have been established by Moody's and S&P for the Index Debt shall fall within different categories, the Applicable Margin shall be based on the lower of the two ratings unless either of the two ratings qualifies as "investment grade", in which case the higher of the two ratings will apply; and (iii) if the ratings established or deemed to have been established by Moody's and S&P for the Index Debt shall be changed (other than as a result of a change in the rating system of Moody's or S&P), such change shall be effective as of the date on which it is first announced by the applicable rating agency. Each change in the Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of Moody's or S&P shall change, or if either such rating agency shall cease to be in the business of rating corporate debt obligations, the Borrowers and the Banks shall negotiate in good faith to amend this definition to reflect such changed rating system or the non-availability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Margin shall be determined by reference to the rating most recently in effect prior to such change or cessation. "Applicable Percentage" of any Bank means the percentage set opposite such Bank's name on Schedule II hereto, as modified from time to time as provided hereby. "Applicable Reference Rate" means on a per annum basis in respect of any Reference Rate Loan, for any day, the sum of the Alternate Base Rate plus the Applicable Margin. "Assessment Rate" means, with respect to each day during an Interest Period, the annual rate (rounded upwards, if not already a whole multiple of 1/100 of l%, to the next highest whole multiple of 1/100 of 1%) most recently estimated by the Administrative Agent as the then current net annual assessment rate that will be employed in determining amounts payable by Chemical to the Federal Deposit Insurance Corporation or any successor ("FDIC") for the FDIC's insuring time deposits made in Dollars at offices of Chemical in the United States. "Bank" means each bank signatory hereto and its successors and permitted assigns under Section 9.3. "Board" means the Board of Governors of the Federal Reserve System of the United States. "Borrowers" means FRP and FTX. "Borrowing Date" means, with respect to any Loan, the date on which such Loan is disbursed. "Business Day" means any day other than a Saturday, Sunday or a day on which banks in New York City are authorized or required by law to close; provided, however, that when used in connection with a LIBO Rate Loan, the term "Business Day" shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market. "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. A "Change in Control" shall be deemed to have occurred if (a) any Person or group (within the meaning of Rule 13d-5 of the SEC as in effect on the date hereof) shall own directly or indirectly, beneficially or of record, shares representing 30% or more of the aggregate ordinary voting power represented by the issued and outstanding capital stock of FTX; or (b) a majority of the seats (other than vacant seats) on the board of directors of FTX shall at any time be occupied by Persons who were not (i) members of the board of directors of FTX on the Closing Date, (ii) appointed as, or nominated for election as, directors by a majority of the directors who are (x) referred to in clause (i) and (y) other directors who are appointed or nominated in accordance with this clause (ii) or (iii) nominated or appointed by RTZ, RTZ Indonesia or any Affiliate of either thereof pursuant to its participation in the Restructuring as contemplated by the Letter Agreement dated as of March 7, 1995, between RTZ America and FTX and FCX and the Stock Purchase Agreement. "Circle C Agreement" means the Credit Agreement dated as of February 6, 1992, as amended, by and between Circle C Land Corp. and TCB. "Closing Date" means the date of execution and delivery of this Agreement and the Promissory Notes. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Collateral Agents" mean the FRP Collateral Agent and the FTX Collateral Agent. "Commitment" means, with respect to each Bank, the Commitment of such Bank hereunder to make revolving loans as set forth on Schedule II hereto, or in the Commitment Transfer Supplement pursuant to which such Bank assumed its Commitment, as the same may be permanently terminated or reduced from time to time pursuant to Section 2.7 and pursuant to assignments by such Bank pursuant to Section 9.3. The Commitment of each Bank shall automatically and permanently terminate on the Maturity Date. "Commitment Fee" has the meaning assigned to such term in Section 2.6(a). "Commitment Termination Date" has the meaning assigned to such term in Section 2.6(a). "Commitment Transfer Supplement" means a Commitment Transfer Supplement entered into by a Bank and an assignee, and accepted by the Administrative Agent, in the form of Exhibit D or such other form as shall be approved by the Administrative Agent. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and "Controlling" and "Controlled" shall have meanings correlative thereto. "Credit Event" means the making of a Loan. "Debt" of any Person means, 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 (x) the Pennzoil Obligations, (y) the up to $10,000,000 conditional payment of FRP to Fertiberia due in 1998 to the extent not reflected as a liability on FRP's balance sheet under GAAP and (z) 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 Debt of others secured by (or for which the holder of such Debt 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 Debt 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 Debt 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 Debt of any Person shall include the Debt of any partnership in which such Person is a general partner but shall exclude obligations under leases which are characterized as Operating Leases. "Debt to Capital Ratio" means at the end of any fiscal quarter, the ratio, expressed as a percentage, of the aggregate principal amount of total consolidated Debt outstanding of FRP (excluding working capital Debt of IMC-Agrico in a principal amount not to exceed $75,000,000 multiplied by FRP's percentage capital interest in IMC-Agrico) to FRP Capitalization. "Deemed Lease" means an agreement characterized by the parties thereto as a lease solely for income tax purposes and as to which such parties have elected to have the provisions of the former Section 168(f)(8) of the Internal Revenue Code of 1954 apply. "Default" means any event or condition which upon the giving of notice or lapse of time or both would become an Event of Default. "Dollars" or "$" means United States Dollars. "Domestic Office" means, for any Bank, the Domestic Office set forth for such Bank on the signature pages hereof, unless such Bank shall designate a different Domestic Office by notice in writing to the Administrative Agent and the Borrowers. "EBITDA" means, for any fiscal quarter, the sum of (a) FRP's consolidated net income (loss) (before deducting minority interests in net income (loss) of consolidated subsidiaries, but disregarding all extraordinary or unusual noncash items in calculating such net income); (b) consolidated interest paid or accrued on the Loans to FRP and on other consolidated Debt of FRP during such quarter and deducted in determining FRP's consolidated net income; (c) FRP's consolidated depreciation, depletion and amortization charges deducted in computing FRP's consolidated net income; and (d) excess cash distributions as reflected in FRP's statement of cash flows received by FRP from IMC-Agrico; provided that such calculations of items (a) through (c) will exclude items relating to Nonrestricted Subsidiaries. "EBITDA Ratio" means at the end of any fiscal quarter, the cumulative sum, for the four consecutive fiscal quarters ending with such quarter, of (a) FRP's EBITDA to (b) interest expense and capitalized interest paid or accrued on consolidated Debt of FRP including the Loans and the proportional consolidation of the outstanding Debt of IMC-Agrico, during such period. "environment" shall mean ambient air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata or as otherwise defined in any Environmental Law. "Environmental Claim" means any written notice of violation, claim, demand, order, directive, cost recovery action or other cause of action by, or on behalf of, any Governmental Authority or any Person for damages, injunctive or equitable relief, personal injury (including sickness, disease or death), Remedial Action costs, tangible or intangible property damage, natural resource damages, nuisance, pollution, any adverse effect on the environment caused by any Hazardous Material, or for fines, penalties or restrictions, resulting from or based upon: (a) the existence, or the continuation of the existence, of a Release (including sudden or non-sudden, accidental or non- accidental Releases); (b) exposure to any Hazardous Material; (c) the presence, use, handling, transportation, storage, treatment or disposal of any Hazardous Material; or (d) the violation of any Environmental Law or Environmental Permit. "Environmental Law" means any and all applicable treaties, laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq. (collectively "CERCLA"), the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Amendments of 1984, 42 U.S.C. Section 6901 et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. Section 1251 et seq., the Clean Air Act of 1970, as amended 42 U.S.C. Section 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. Section 2601 et seq., the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Section 651 et seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. Section 300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., and any similar or implementing state or local law, and all amendments or regulations promulgated thereunder. "Environmental Permit" means any permit, approval, authorization, certificate, license, variance, filing or permission required by or from any Governmental Authority pursuant to any Environmental Law. "Equity Payment" means (i) any dividend or distribution on, or purchase, redemption or other payment in respect of, the capital stock of FTX or the partnership units of FRP, whether in cash or in kind, and (ii) open market purchases by FTX or any Restricted Subsidiaries of Depositary Units of FRP (as defined in FRP Partnership Agreement). "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA Affiliate" means any trade or business (whether or not incorporated), that together with a 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 a 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 Plan; (vi) the receipt by a Borrower or any ERISA Affiliate of any notice concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected 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 a Borrower. "Event of Default" means any Event of Default defined in Article VII. "FCX" means Freeport-McMoRan Copper & Gold Inc., a Delaware corporation. "FI" means P.T. Freeport Indonesia Company, a limited liability company organized under the laws of Indonesia and domesticated in Delaware. "Financial Officer" of any corporation means the principal financial officer, principal accounting officer, treasurer, assistant treasurer or controller of such corporation. "FM Credit Agreement" means the Credit Agreement dated as of June 30, 1995, among FM Properties, FTX, FCX, the banks party thereto, Chemical, as Administrative Agent and as FM Collateral Agent, and Chase, as Documentary Agent, as the same may be amended or replaced from time to time. "FM Properties" means FM Properties Operating Co., a Delaware general partnership whose partners are FTX and FM Properties Inc. "FM Properties Indebtedness" means the obligations of FM Properties under the FM Credit Agreement and the obligations of FM Properties listed on Schedule VII hereto. "FRP Capitalization" means the sum, as of the end of any fiscal quarter, of the aggregate principal amount of the total consolidated Debt outstanding of FRP (excluding working capital Debt of IMC-Agrico in a principal amount not to exceed $75,000,000 multiplied by FRP's percentage capital interest in IMC-Agrico) plus consolidated partners' capital (excluding the effect of non-cash unusual or extraordinary charges after December 31, 1994, on such partners' capital) of FRP. "FRP Collateral Agent" means Chemical in its capacity as Collateral Agent for the Banks under the FRP Security Agreement. "FRP Partner" means Agrico LP or another Restricted Subsidiary of FRP which has the rights and obligations of FRP Partner as defined in and contemplated by the IMC-Agrico Partnership Agreement. "FRP Partnership Agreement" means the Amended and Restated Agreement of Limited Partnership of Freeport- McMoRan Resource Partners, Limited Partnership, dated as of May 29, 1987 among FRP, FTX and FMRP Inc., as amended. "FRP Security Agreement" means the security agreement and mortgage in the form of Exhibit E, executed by FRP and delivered to the FRP Collateral Agent pursuant to Section 4.1(h), as such agreement may be amended and in effect from time to time. "FTX Collateral Agent" means Chemical in its capacity as Collateral Agent for the Lenders (as defined in the FTX Intercreditor Agreement) under the FTX Intercreditor Agreement and the FTX Security Agreement. "FTX Guaranty Agreement" means the Guaranty Agreement dated as of July 17, 1995, pursuant to which FTX guarantees a portion of the FM Properties Indebtedness. "FTX Intercreditor Agreement" means the Intercreditor Agreement entered into as of June 11, 1992, as amended and restated in its entirety as of June 1, 1993, and as of the Funding Date in the form attached hereto as Exhibit G, among the Administrative Agent on behalf of the Banks, the FM Agent on behalf of the FM Lenders, Hibernia National Bank as agent for the Pel-Tex Lenders (each as defined therein), TCB and Chemical, as FTX Collateral Agent, as such agreement may be further amended and in effect from time to time. "FTX Security Agreement" means the security agreement in the form of Exhibit F, executed by FTX and delivered to the FTX Collateral Agent pursuant to Section 4.1(g), as such agreement may be amended and in effect from time to time. "Funding Date" means the first date on which the conditions to borrowing set forth in Articles IV and VI have been satisfied. "GAAP" has the meaning assigned to such term in Section 1.2. "Governmental Authority" means any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body. "Governmental Rule" means any statute, law, treaty, rule, code, ordinance, regulation, permit, certificate or order of any Governmental Authority or any judgment, decree, injunction, writ, order or like action of any court, arbitrator or other judicial or quasijudicial tribunal. "Guarantee" means, with respect to any Person, any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Debt 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 Debt or obligation or to purchase (or advance or supply funds for the purchase of) any security for the payment of such Debt, obligation, dividend or distribution, (iii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Debt or obligation or the holder of such stock of the payment of such Debt, 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 Debt, obligation, dividend or distribution; provided, however, that the term Guarantee shall not include any endorsement for collection or deposit in the ordinary course of business. "Hazardous Materials" means all explosive or radioactive substances or wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or gaseous wastes, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls ("PCBs") or PCB-containing materials or equipment, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law. "Hedge Agreement" means any interest rate, currency or commodity swap, cap, floor or collar agreement or similar hedging arrangement providing for the transfer or mitigation of interest rate, commodity price or currency value or exchange rate risks, either generally or under specific contingencies. "IMC" means IMC Global Operations Inc., a Delaware corporation. "IMC-Agrico" means the general partnership formed pursuant to the IMC-Agrico Partnership Agreement. "IMC Partner" means the Subsidiary of IMC that has the rights and obligations of IMC GPCo as defined in and contemplated by the IMC-Agrico Partnership Agreement. "IMC-Agrico Partnership Agreement" means the Amended and Restated Partnership Agreement dated as of July 1, 1993, as further amended and restated as of May 26, 1995, by and among Agrico LP, a Delaware limited partnership, IMC-Agrico GP Company, a Delaware corporation, and IMC-Agrico MP Inc., a Delaware corporation, as amended and in effect from time to time as permitted by Section 5.2(r). "Index Debt" means the senior, unsecured, non- credit enhanced, long-term indebtedness for borrowed money of FRP. "Interest Payment Date" means (i) as to any Reference Rate Loan, the next succeeding March 31, June 30, September 30 or December 31 (subject to Section 2.16), or if earlier, the Maturity Date, and (ii) as to any LIBO Rate Loan, the last day of the Interest Period applicable to such Loan (and, in the case of any Interest Period of more than three months' duration, the date that would be the last day of such Interest Period if such Interest Period were of three months' duration) and the date of any continuation or conversion of such Loan as or into a Loan of the same or a different type. "Interest Period" means (i) as to any LIBO Rate Loan, the period commencing on the date of such LIBO Rate Loan or on the last day of the immediately preceding Interest Period applicable to such Loan, as the case may be, and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the applicable Borrower may elect, and (ii) as to any Reference Rate Loan, the period commencing on the date of such Reference Rate Loan or on the last day of the immediately preceding Interest Period applicable to such Loan, as the case may be, and ending on the earliest of (x) the next succeeding March 31, June 30, September 30 or December 31, (y) the Maturity Date and (z) the date such Loan is prepaid or converted as permitted hereby; provided, however, that (1) if any Interest Period would end on a day that shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, with respect to LIBO Rate Loans only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (2) no Interest Period with respect to any Loan shall end later than the Maturity Date and (3) interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period. "LIBO Rate" means, with respect to any LIBO Rate Loan for any Interest Period, an interest rate per annum (rounded upwards, if not already a whole multiple of 1/100 of 1%, to the next higher 1/100 of 1%) equal to the arithmetic average of the respective rates per annum at which Dollar deposits approximately equal in principal amount to the Reference Banks' portions of such LIBO Rate Loan and for a maturity equal to the applicable Interest Period are offered in immediately available funds to the principal London offices of the Reference Banks in the London Interbank Market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. "LIBO Rate Loan" means any Loan for which interest is determined, in accordance with the provisions hereof, at the Applicable LIBO Rate. "LIBOR Office" means, for any Bank, the LIBOR Office set forth for such Bank on the signature pages hereof or as otherwise notified in writing to the Administrative Agent and the Borrowers, unless such Bank shall designate a different LIBOR Office by notice in writing to the Administrative Agent and the Borrowers. "Lien" means with respect to any asset, (a) a mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement relating to such asset, (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities (except for any purchase option, call or similar right under the FRP Partnership Agreement as in effect on the Closing Date or as modified from time to time with the consent of the Required Banks) and (d) other encumbrances of any kind, including, without limitation, production payment obligations. "Loan" means any loan made pursuant to Section 2.1. "Loan Documents" means this Agreement, the Promissory Notes, the FTX Intercreditor Agreement, the Security Agreements and all other agreements, certificates and instruments now or hereafter entered into in connection with any of the foregoing, in each case as amended and modified from time to time. "Loan Exposure" means the aggregate amount of unpaid principal of all Loans made by the Banks. "Main Pass" means FRP's interest in the Joint Operating Agreement dated May 1, 1988, among FRP, Homestake Sulphur Company and IMC Global Operations Inc., and the Joint Operating Agreement dated June 5, 1990, among FRP, Homestake Sulphur Company and IMC Global Operations Inc., and all rights and interests arising therefrom or in connection therewith and all FRP's right, title and interest to the leases, properties and assets subject to such Joint Operating Agreements, including those listed on Schedule V hereto. "Margin Stock" has the meaning assigned to such term in Regulation U. "Material Adverse Effect" means (a) a materially adverse effect on the business, assets, operations, prospects or condition, financial or otherwise, of a Borrower and its Subsidiaries taken as a whole, (b) material impairment of the ability of a Borrower or any of its Subsidiaries to perform any of its obligations under any Loan Document to which it is or will be a party or (c) material impairment of the rights of or benefits available to the Banks under any Loan Document. "Maturity Date" means the fifth anniversary of the Closing Date, or, if earlier, the date of termination of the Commitments pursuant to the terms hereof. "Moody's" means Moody's Investors Service, Inc. "Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which a 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. "Net Proceeds" means (i) the gross fair market value of the consideration or other amounts payable to or receivable by FRP, any of its Restricted Subsidiaries or IMC-Agrico in respect of any sales, transfers, distributions or other dispositions (including by merger or consolidation) of assets or properties (including any capital or other equity interests owned), less (ii) the amount, if any, of all taxes (but only to the extent such Person reasonably estimates that such taxes will be paid on the date of the next tax filing by such Person or such affiliate of such Person), and reasonable and customary fees, commissions, costs and other expenses (other than those payable to FRP, any of its Restricted Subsidiaries or IMC-Agrico) which are incurred in connection with such sales, transfers, distributions or other dispositions and are payable by the seller or the transferor of the assets or property to which such sales, transfers, distributions or other dispositions relate, but only to the extent not already deducted in arriving at the amount referred to in clause (i), and less (iii) amounts used within 120 days from the date of closing or effectiveness of the original transaction in question by the seller or transferor to purchase other assets used in the business of it and its Wholly-Owned Restricted Subsidiaries and not pledged or encumbered to any other Person. "1994 Form l0-K" has the meaning assigned to such term in Section 3.1(e). "Nonrestricted Subsidiary" means (i) any of the Subsidiaries listed on Schedule III hereto as a Nonrestricted Subsidiary, (ii) any Subsidiary of any Nonrestricted Subsidiary and (iii) any surviving corporation (other than a Borrower or a Restricted Subsidiary) into which any of such corporations referred to in clause (i) or (ii) is merged or consolidated, subject to Section 5.2(c), and (iv) any Subsidiary organized after the date of this Agreement for the purpose of acquiring the stock or assets of another Person or for start-up ventures or exploration programs or activities and designated as a Nonrestricted Subsidiary by FTX as of the time of its organization. By written notice to the Administrative Agent, FTX may (x) declare any Nonrestricted Subsidiary to be a Restricted Subsidiary and such former Nonrestricted Subsidiary shall thereafter be deemed to be a Restricted Subsidiary for all purposes of this Agreement or (y) at any time other than when a Default or Event of Default has occurred and is continuing or would exist after giving effect to such declaration, in any fiscal year, declare one or more Restricted Subsidiaries, the interest of FTX in all of which has an equity value or loan investment of less than $5,000,000 in the aggregate, to be a Nonrestricted Subsidiary and any such former Restricted Subsidiary shall thereafter be deemed to be a Nonrestricted Subsidiary for all purposes of this Agreement. "Operating Lease" means any lease other than a lease giving rise to a Capitalized Lease Obligation. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA. "Pennzoil Obligations" means the deferred purchase price obligations incurred by FRP in connection with the purchase from Pennzoil Company of the Culberson mining operations and associated physical assets. "Permitted Investments" means customary portfolio cash management investments made pursuant to prudent cash management practices. "Permitted Secured Swap" means any Hedge Agreement between FTX or FRP and any Bank or its affiliates that shall be ratably secured pursuant to the FTX Security Agreement or the FRP Security Agreement, as applicable. "Person" means any natural person, corporation, partnership, joint venture, trust, incorporated or unincorporated association, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind. "Plan" means 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 a Borrower 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. "Promissory Notes" means the promissory notes of each Borrower referred to in Section 2.4. "Properties" has the meaning assigned such term in Section 3.1(n)(1). "Reference Banks" means Chemical and Chase. "Reference Rate Loan" means any Loan for which interest is determined, in accordance with the provisions hereof, at the Applicable Reference Rate. "Register" has the meaning assigned such term in Section 9.3(d). "Regulation D" means Regulation D of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. "Regulation G" means Regulation G of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. "Regulation U" means Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. "Regulation X" means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. "Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Hazardous Material in, into, onto or through the environment. "Remedial Action" means (a) "remedial action" as such term is defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any Governmental Authority or voluntarily undertaken to: (i) cleanup, remove, treat, abate or in any other way address any Hazardous Material in the environment; (ii) prevent the Release or threat of Release, or minimize the further Release of any Hazardous Material so it does not migrate or endanger or threaten to endanger public health, welfare or the environment; or (iii) perform studies and investigations in connection with, or as a precondition to, (i) or (ii) above. "Required Banks" means, subject to Section 9.7(b), at any time Banks having Commitments representing at least 66-2/3% of the aggregate Commitments hereunder or, if the Commitments have been terminated, Banks holding Loans representing at least 66-2/3% of the aggregate principal amount of the Loans. "Responsible Officer" of any corporation means any executive officer or Financial Officer of such corporation and any other officer or similar official thereof responsible for the administration of the obligations of such corporation in respect of this Agreement. "Restricted Subsidiary" means any Subsidiary that is not a Nonrestricted Subsidiary; provided, however, that any Person through which FRP owns any interest in IMC-Agrico shall at all times be a Restricted Subsidiary. "Restructuring" means the transactions between FTX and FCX (on the one hand) and RTZ, RTZ Indonesia and RTZ America (on the other hand) pursuant to the Stock Purchase Agreement, and the distribution on a generally tax free basis (subject to exceptions approved by the Administrative Agent and the Documentary Agent) by FTX to its shareholders of the shares of FCX, thereby leaving FTX as a holding company for FRP and leaving FCX as the publicly held holding company for FI, together with arrangements required by or effectuated in connection with such distribution with respect to existing contractual agreements and indebtedness of FTX, FRP, FCX and FI, all on terms substantially the same as those disclosed in writing to the Banks prior to the Closing Date or otherwise satisfactory to the Required Banks (including all tax, accounting, corporate and partnership matters). "RTZ" means the RTZ Corporation PLC, a company organized under the laws of England. "RTZ America" means RTZ America, Inc., a Delaware corporation and a wholly owned subsidiary of RTZ. "RTZ Indonesia" means RTZ Indonesia Limited, a company organized under the laws of England and a wholly owned subsidiary of RTZ. "S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc. "SEC" means the Securities and Exchange Commission. "Security Agreements" means, collectively, the FRP Security Agreement and the FTX Security Agreement. "Shared Collateral" has the meaning assigned to such term in the FTX Intercreditor Agreement. "Statutory Reserves" means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including, without limitation, any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board and any other banking authority, domestic or foreign, to which the Administrative Agent or any Bank (including any branch, Affiliate, or other funding office making or holding a Loan) is subject (a) with respect to the Base CD Rate (as such term is used in the definition of "Alternate Base Rate"), for new negotiable nonpersonal time deposits in Dollars of over $100,000 with maturities approximately equal to the applicable Interest Period, and (b) with respect to the LIBO Rate, for Eurocurrency Liabilities (as defined in Regulation D). Such reserve percentages shall include, without limitation, those imposed under Regulation D. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "Stock Purchase Agreement" means the Agreement dated as of May 2, 1995, by and between FTX, FCX, RTZ, RTZ Indonesia and RTZ America as approved by the Banks and in effect on the Closing Date and as amended from time to time as permitted by Section 5.2(t). "Subsidiary" means as to any Person, any corporation at least a majority of whose securities having ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) are at the time owned by such Person and/or one or more other Subsidiaries of such Person and any partnership (other than joint ventures for which the intention under the applicable agreements, including operating agreements, if any, is that such joint ventures be partnerships solely for purposes of the Code) in which such Person or a Subsidiary of such Person is a general partner; provided that unless otherwise specified, "Subsidiary" means a Subsidiary of FTX and provided, further, that FM Properties, FM Corporation and IMC-Agrico shall not at any time be Subsidiaries for any purposes of this Agreement. "TCB" means Texas Commerce Bank National Association, a national banking association. "Third Party" has the meaning assigned to such term in Section 5.2(l). "Total Commitment" means the sum of all the then effective Commitments. "Transfer Effective Date" has the meaning assigned to such term in each Commitment Transfer Supplement. "Transferee" means any Participant or Purchasing Bank, as such terms are defined in Section 9.3. "Wholly-Owned Restricted Subsidiary" means any Subsidiary, all of the stock of which is at the time owned by FTX, FRP and/or one or more other Wholly-Owned Restricted Subsidiaries of either of them. "Withdrawal Liability" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. SECTION 1.2. Accounting Terms. Except as otherwise herein specifically provided, each accounting term used herein shall have the meaning given it under United States generally accepted accounting principles in effect from time to time (with such changes thereto as are approved or concurred in from time to time by the Borrowers' independent public accountants, as applicable) applied on a basis consistent with those used in preparing the financial statements referred to in Section 5.1(a) ("GAAP"); provided, however, that each reference in Section 5.2 hereof, or in the definition of any term used in Section 5.2 hereof, to GAAP shall mean generally accepted accounting principles as in effect on the Closing Date and as applied by Borrowers in preparing the financial statements referred to in Section 3.1(e). In the event any change in GAAP materially affects any provision of this Agreement, the Banks and the Borrowers agree that they shall negotiate in good faith in order to amend the affected provisions in such a way as will restore the parties to their respective positions prior to such change, and until such amendment becomes effective the Borrowers' compliance with such provisions shall be determined on the basis of GAAP as in effect immediately before such change in GAAP became effective. SECTION 1.3. Section, Article, Exhibit and Schedule References, etc. Unless otherwise stated, Section, Article, Exhibit and Schedule references made herein are to Sections, Articles, Exhibits or Schedules, as the case may be, of this Agreement. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". Except as otherwise expressly provided herein, any reference in this Agreement to any Loan Document shall mean such document as amended, restated, supplemented or otherwise modified from time to time. ARTICLE II The Loans SECTION 2.1. Revolving Credit Facility. Upon the terms and subject to the conditions and relying upon the representations and warranties herein set forth, each Bank, severally and not jointly, agrees to make Loans to the Borrowers, at any time and from time to time on or after the Funding Date, and until the earlier of the Maturity Date and the termination of the Commitment of such Bank in accordance with the terms hereof, in an aggregate principal amount at any one time outstanding not to exceed such Bank's Applicable Percentage of the then effective unused Total Commitment on the Borrowing Date for such Loan. Within the foregoing limits, the Borrowers may borrow, repay and reborrow, prior to the Maturity Date, Loans subject to the terms, provisions and limitations set forth herein; provided, however, that the aggregate principal amount of all Loans to FTX at any time outstanding shall not exceed $75,000,000 or such lesser amount determined pursuant to Section 2.7. SECTION 2.2. Loans. (a) The Loans made by the Banks to any Borrower on any one date shall be in an aggregate principal amount which is (i) an integral multiple of $1,000,000 and not less than $5,000,000 or (ii) equal to the remaining available balance of the applicable Commitments. The Loans by each Bank to each Borrower made after the Funding Date shall be made against an appropriate Promissory Note, payable to the order of such Bank in the amount of its Commitment, executed by such Borrower and delivered to such Bank on the Closing Date, as referred to in Section 2.4. (b) Each Loan shall be either a Reference Rate Loan or a LIBO Rate Loan as the relevant Borrower may request pursuant to Section 2.3. Subject to the provisions of Sections 2.3 and 2.10, Loans of more than one type may be outstanding at the same time. (c) Each Bank shall make its portion, as determined under Section 2.14, of each Loan hereunder on the proposed date thereof by paying the amount required to the Administrative Agent in New York, New York in immediately available funds not later than 2:00 p.m., New York City time, and the Administrative Agent shall by 3:00 p.m., New York City time, credit the amounts so received to the general deposit account of the appropriate Borrower with the Administrative Agent or, if Loans shall not be made on such date because any condition precedent to a borrowing herein specified is not met, return the amounts so received to the respective Banks. Unless the Administrative Agent shall have received notice from a Bank prior to the date of any Loan that such Bank will not make available to the Administrative Agent such Bank's portion of such Loan, the Administrative Agent may assume that such Bank has made such portion available to the Administrative Agent on the date of such Loan in accordance with this paragraph (c) and the Administrative Agent may, in reliance upon such assumption, make available to the applicable Borrower on such date a corresponding amount. If the Administrative Agent shall have so made funds available, then to the extent that such Bank shall not have made such portion available to the Administrative Agent, such Bank and the applicable Borrower severally agree to repay without duplication to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the applicable Borrower until the date such amount is repaid to the Administrative Agent at an interest rate equal to (i) in the case of the Borrower, the interest rate applicable at the time to the Loans comprising such borrowing and (ii) in the case of such Bank, a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error). If such Bank shall repay to the Administrative Agent such corresponding amount, such amount shall constitute such Bank's Loan for purposes of this Agreement. SECTION 2.3. Notice of Loans. (a) A Borrower requesting a Loan shall give the Administrative Agent irrevocable telephonic (promptly confirmed in writing), written, telecopy or telex notice in the form of Exhibit B with respect to each Loan (i) in the case of a LIBO Rate Loan, not later than 10:30 a.m., New York City time, three Business Days before a proposed borrowing, and (ii) in the case of a Reference Rate Loan, not later than 10:30 a.m., New York City time, on the date of a proposed borrowing. Such notice shall be irrevocable (except that in the case of a LIBO Rate Loan, such Borrower may, subject to Section 2.13, revoke such notice by giving written or telex notice thereof to the Administrative Agent not later than 10:30 a.m., New York City time, two Business Days before such proposed borrowing) and shall in each case refer to this Agreement and specify (1) the Borrower to which the Loan then being requested is to be made, (2) whether the Loan then being requested is to be a Reference Rate Loan or LIBO Rate Loan, (3) the date of such Loan (which shall be a Business Day) and amount thereof, and (4) if such Loan is to be a LIBO Rate Loan, the Interest Period or Interest Periods (which shall not end after the Maturity Date) with respect thereto. If no election as to the type of Loan is specified in any such notice by such Borrower, such Loan shall be a Reference Rate Loan. If no Interest Period with respect to any LIBO Rate Loan is specified in any such notice by a Borrower, then the applicable Borrower shall be deemed to have selected an Interest Period of one month's duration. The Administrative Agent shall promptly advise the other Banks of any notice given by a Borrower pursuant to this Section 2.3(a) and of each Bank's portion of the requested Loan. (b) Each Borrower may continue or convert all or any part of any Loan as or into a Loan of the same or a different type in accordance with Section 2.10 and subject to the limitations set forth herein. If a Borrower shall not have delivered a borrowing notice in accordance with this Section 2.3 prior to the end of the Interest Period then in effect for any Loan of such Borrower requesting that such Loan be converted or continued as permitted hereby, then such Borrower shall (unless the Borrower has notified the Administrative Agent, not less than three Business Days prior to the end of such Interest Period, that such Loan is to be repaid at the end of such Interest Period) be deemed to have delivered a borrowing notice pursuant to Section 2.3 requesting that such Loan be converted into or continued as a Reference Rate Loan of equivalent amount. (c) Notwithstanding any provision to the contrary in this Agreement, no Borrower shall in any borrowing notice under this Section 2.3 request any LIBO Rate Loan which, if made, would result in more than 20 separate LIBO Rate Loans of any Bank. For purposes of the foregoing, Loans having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Loans. SECTION 2.4. Promissory Notes. (a) The Loans made by each Bank to each Borrower shall be evidenced by a Promissory Note duly executed on behalf of such Borrower, dated the Closing Date, in substantially the form attached hereto as Exhibit A, payable to the order of such Bank in a principal amount equal to its Commitment. The outstanding principal balance of each Loan, as evidenced by such Promissory Note, shall be payable on the Maturity Date. Each Promissory Note shall bear interest from the date of the first borrowing hereunder on the outstanding principal balance thereof, as provided in Section 2.5. (b) Each Bank shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness to such Bank resulting from each Loan made by such Bank from time to time, including the amounts of principal and interest payable and paid to such Bank from time to time under this Agreement. Each Bank shall, and is hereby authorized by each Borrower to, endorse on the schedule attached to the Promissory Note delivered by such Borrower to such Bank (or on a continuation of such schedule attached to such Promissory Note and made a part thereof), or otherwise record in such Bank's internal records, an appropriate notation evidencing the date and amount of each Loan from such Bank to such Borrower, as well as the date and amount of each payment and prepayment with respect thereto; provided, however, that the failure of any Bank to make such a notation or any error in such a notation shall not affect the obligation of such Borrower to repay the Loans made by such Bank in accordance with the terms of this Agreement and such Promissory Note. (c) The Administrative Agent shall maintain accounts for (i) the type of each Loan made and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the applicable Borrower to each Bank hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from such Borrower and each Bank's share thereof. (d) The entries made in the accounts maintained pursuant to paragraphs (b) and (c) of this Section 2.4 shall be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any Bank or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrowers to repay the Loans in accordance with their terms. SECTION 2.5. Interest on Loans. (a) Subject to the provisions of Section 2.8, each Reference Rate Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, when determined by reference to the Prime Rate, and over a year of 360 days at all other times), equal to the Applicable Reference Rate. (b) Subject to the provisions of Section 2.8, each Loan which is a LIBO Rate Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the Applicable LIBO Rate for the Interest Period in effect for such Loan. (c) Interest on each Loan shall be payable on each applicable Interest Payment Date. The Applicable Reference Rate and the Applicable LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. The Administrative Agent shall promptly advise the Borrowers and each Bank of such determination. SECTION 2.6. Fees. (a) The Borrowers shall pay each Bank, through the Administrative Agent, on the last Business Day of each March, June, September and December, and on the date on which the Commitment of such Lender shall be terminated as provided herein (the "Commitment Termination Date"), in immediately available funds, a commitment fee (a "Commitment Fee") from and including the earlier of June 30, 1995, and the Funding Date through and including the Commitment Termination Date on the average daily amount of such Bank's Applicable Percentage of the unused Total Commitment during the quarter (or shorter period commencing with the earlier of June 30, 1995, and the Funding Date or ending with the Commitment Termination Date) ending on such date equal to the applicable Commitment Fee Percentage set forth in Schedule I hereto for such Borrower. (b) All Commitment Fees under this Section 2.6 shall be computed on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be. The Commitment Fees due to each Bank shall cease to accrue on the earlier of the Maturity Date and the termination of the Commitment of such Bank pursuant to Section 2.7. (c) The Borrowers agree to pay to the Administrative Agent, for its own account, on the Closing Date and on each anniversary thereof, an administration fee (the "Administrative Fee") as agreed between the Borrowers and the Administrative Agent. (d) All such fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, among the Banks. Once paid, all such fees shall be fully earned under any and all circumstances. SECTION 2.7. Maturity and Reduction of Commitments. (a) Upon at least five days' prior written, telecopied or telex notice to the Administrative Agent, the Borrowers may without penalty at any time in whole permanently terminate, or from time to time permanently reduce, the Total Commitment, ratably among the Banks in accordance with the amounts of their respective Commitments; provided, however, that each partial reduction of the Commitment Amount shall be in a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000; provided further, that the Total Commitment may not be reduced to an amount which is less than the aggregate principal amount of all Loans outstanding after such reduction. (b) The Total Commitment shall be automatically and permanently reduced by an amount equal to (I) the Net Proceeds of any non-ordinary course asset disposition by FRP and its Restricted Subsidiaries and IMC-Agrico (other than in each case, (i) dispositions of obsolete and worn-out property or real estate not used or useful in its business, (ii) sales of accounts receivable and (iii) sales of any IMC-Agrico asset sales to the extent not resulting in distributable cash to FRP or its Restricted Subsidiaries), in excess of a cumulative aggregate amount of $25,000,000 for all such transactions during the term of this Agreement, and (II) the net proceeds of any issuance of Debt to any Third Party by FRP or its Restricted Subsidiaries after the Closing Date (other than (A) Guarantees where no proceeds of the related Debt are received by FRP or its Restricted Subsidiaries, (B) Debt described in clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii) and (xi) of Section 5.2(g) and (C) Capitalized Lease Obligations where a related asset sale has already been counted for purposes of this Section 2.7(b)), in excess of a cumulative aggregate amount of $50,000,000 for all such transactions during the term of this Agreement. The Total Commitment shall also be automatically and permanently reduced by an amount equal to such portion of the proceeds of any equity issuance (other than pursuant to employee stock option plans and similar arrangements and other than equity issued to fund a permitted acquisition) by FRP and the Restricted Subsidiaries to any Person other than the Borrowers and the Restricted Subsidiaries as the Required Banks and the Borrowers shall agree prior to the time of receipt of Net Proceeds in respect of such equity issuance; provided that, if such agreement shall not be reached prior to the time of such receipt, the applicable portion shall be 50%. The Commitment reductions required by this Section 2.7(b) shall be effective as of the date of closing or effectiveness of any transaction subject hereto; provided that with respect to any non-cash Net Proceeds, such Commitment reductions shall be effective as of the earlier of (x) the date of receipt of cash proceeds thereof and (y) the first anniversary of the date of closing or effectiveness of such transaction, subject to any such non-cash proceeds in excess of $5,000,000 being pledged to the relevant Collateral Agent pursuant to the FRP Security Agreement as additional collateral for the Loans and other obligations under the Loan Documents and the Permitted Secured Swaps; and provided further that to the extent prepayment of any LIBO Rate Loan is required pursuant to this Section 2.7(b), such prepayment may be made at the end of the current Interest Period for such LIBO Rate Loan if the required prepayment would otherwise give rise to breakage costs under Section 2.13(a)(i). (c) On the Maturity Date, the Commitments shall automatically terminate and any outstanding Loans shall be due and payable in full. SECTION 2.8. Interest on Overdue Amounts; Alternative Rate of Interest. (a) If any Borrower shall default in the payment of the principal of or interest on any Loan or any other amount becoming due hereunder or under any other Loan Document, by acceleration or otherwise, such Borrower shall on demand from time to time pay interest, to the extent permitted by law, on such defaulted amount up to the date of actual payment (after as well as before judgment): (i) in the case of the payment of principal of or interest on a LIBO Rate Loan, at a rate 2% above the rate which would otherwise be payable under Section 2.5(b) until the last date of the Interest Period then in effect with respect to such Loan and thereafter as provided in clause (ii) below; and (ii) in the case of the payment of principal of or interest on a Reference Rate Loan or any other amount payable hereunder (other than principal of or interest on any LIBO Rate Loan to the extent referred to in clause (i) above), at a rate 2% above the Applicable Reference Rate. (b) In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a LIBO Rate Loan the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrowers absent manifest error) that (i) Dollar deposits in the requested principal amount of such LIBO Rate Loan are not generally available in the London Interbank Market, (ii) the rates at which Dollar deposits are being offered will not adequately and fairly reflect the cost to any Bank of making or maintaining such LIBO Rate Loan during such Interest Period or (iii) reasonable means do not exist for ascertaining the Applicable LIBO Rate, the Administrative Agent shall as soon as practicable thereafter give written, telecopied or telex notice of such determination to the Borrowers and the other Banks, and any request by a Borrower for the making of a LIBO Rate Loan pursuant to Section 2.3 or 2.10 shall, until the Administrative Agent shall have advised the Borrowers and the Banks that the circumstances giving rise to such notice no longer exist, be deemed to be a request for a Reference Rate Loan; provided, however, that if the Administrative Agent makes the determination specified in (ii) above, at the option of such Borrower such request shall be deemed to be a request for a Reference Rate Loan only from such Bank referred to in (ii) above; provided further, however, that such option shall not be available to such Borrower if the Administrative Agent makes the determination specified in (ii) above with respect to three or more Banks. Each determination of the Administrative Agent hereunder shall be conclusive absent manifest error. SECTION 2.9. Prepayment of Loans. (a) Each Borrower shall have the right at any time and from time to time to prepay any of its Loans, in whole or in part, subject to the requirements of Section 2.13 but otherwise without premium or penalty, upon prior written or telex notice to the Administrative Agent by 10:30 a.m., New York City time, on the date of such prepayment; provided, however, that each such partial prepayment shall be in a minimum amount of $5,000,000 and an integral multiple of $1,000,000. (b) In the event of any termination of the Commitments, each Borrower shall repay or prepay all its outstanding Loans on the date of such termination. On the date of any partial reduction of the Commitments pursuant to Section 2.7, the Borrowers shall pay or prepay so much of their respective Loans as shall be necessary in order that the aggregate principal amount of the Loans (after giving effect to any other prepayment of Loans on such date) outstanding will not exceed the Total Commitment immediately following such reduction. (c) All prepayments under this Section 2.9 shall be subject to Section 2.13. Each notice of prepayment delivered pursuant to paragraph (a) above shall specify the prepayment date and the principal amount of each Loan (or portion thereof) to be prepaid, shall be irrevocable and shall commit the Borrower giving such notice to prepay such Loan by the amount stated therein on the date stated therein. All prepayments shall be applied first to Reference Rate Loans and then to LIBO Rate Loans and shall be accompanied by accrued interest on the principal amount being prepaid to the date of prepayment. Any amounts prepaid may be reborrowed to the extent permitted by the terms of this Agreement. SECTION 2.10. Continuation and Conversion of Loans. Each Borrower shall have the right, subject to the provisions of Section 2.8, (i) on three Business Days' prior irrevocable notice by such Borrower to the Administrative Agent, to continue or convert any type of Loans as or into LIBO Rate Loans, or (ii) with irrevocable notice by such Borrower to the Administrative Agent by 10:30 a.m. on the date of such proposed continuation or conversion, to continue or convert any type of Loans as or into Reference Rate Loans, in each case subject to the following further conditions: (a) each continuation or conversion shall be made pro rata as to each type of Loan of a Borrower to be continued or converted among the Banks in accordance with the respective amounts of their commitments and the notice given to the Administrative Agent by such Borrower shall specify the aggregate principal amount of Loans to be continued or converted; (b) in the case of a continuation or conversion of less than all Loans of any Borrower, the Loans continued or converted shall be in a minimum aggregate principal amount of $5,000,000 and an integral multiple of $1,000,000; (c) accrued interest on each Loan (or portion thereof) being continued or converted shall be paid by such Borrower at the time of continuation or conversion; (d) the Interest Period with respect to any Loan made in respect of a continuation or conversion thereof shall commence on the date of the continuation or conversion; (e) any portion of a Loan maturing or required to be prepaid in less than one month may not be continued as or converted into a LIBO Rate Loan; (f) a LIBO Rate Loan may be continued or converted on the last day of the applicable Interest Period and, subject to Section 2.13, on any other day; (g) no Loan (or portion thereof) may be continued as or converted into a LIBO Rate Loan if, after such continuation or conversion, an aggregate of more than 20 separate LIBO Rate Loans of any Bank would result, determined as set forth in Section 2.3(c); (h) no Loan shall be continued or converted if such Loan by any Bank would be greater than the amount by which its Commitment exceeds the amount of its other Loans at the time outstanding or if such Loan would not comply with the other provisions of this Agreement; and (i) any portion of a LIBO Rate Loan which cannot be converted into or continued as a LIBO Rate Loan by reason of clause (e) or (g) above shall be automatically converted at the end of the Interest Period in effect for such Loan into a Reference Rate Loan. The Administrative Agent shall communicate the information contained in each irrevocable notice delivered by the applicable Borrower pursuant to this Section 2.10 to the other Banks promptly after its receipt of the same. The Interest Period applicable to any LIBO Rate Loan resulting from a continuation or conversion shall be specified by the applicable Borrower in the irrevocable notice of continuation or conversion delivered pursuant to this Section 2.10; provided, however, that if no such Interest Period for a LIBO Rate Loan shall be specified, the applicable Borrower shall be deemed to have selected an Interest Period of one month's duration. For purposes of this Section 2.10, notice received by the Administrative Agent from a Borrower after 10:30 a.m., New York time, on a Business Day shall be deemed to be received on the immediately succeeding Business Day. SECTION 2.11. Reserve Requirements; Change in Circumstances. (a) The Borrowers shall pay to each Bank on the last day of each Interest Period for any LIBO Rate Loan so long as such Bank may be required to maintain reserves against Eurocurrency Liabilities as defined in Regulation D of the Board (or so long as such Bank may be required to maintain reserves against any other category of liabilities which includes deposits by reference to which the interest rate on any LIBO Rate Loan is determined as provided in this Agreement or against any category of extensions of credit or other assets of such Bank which includes any LIBO Rate Loan) an additional amount (determined by such Bank and notified to the Borrowers), equal to the product of the following for each affected LIBO Rate Loan for each day during such Interest Period: (i) the principal amount of such affected LIBO Rate Loan outstanding on such day; and (ii) the remainder of (x) the product of Statutory Reserves on such date times the Applicable LIBO Rate on such day minus (y) the Applicable LIBO Rate on such day; and (iii) 1/360. Each Bank shall separately bill the Borrowers directly for all amounts claimed pursuant to this Section 2.11(a). (b) Notwithstanding any other provision herein, if after the Closing Date any change in condition or applicable law or regulation or in the interpretation or administration thereof (whether or not having the force of law and including, without limitation, Regulation D of the Board) by any Governmental Authority charged with the administration or interpretation thereof shall occur which shall: (i) subject any Bank (which shall for the purpose of this Section include any assignee or lending office of any Bank) to any tax of any kind whatsoever with respect to its LIBO Rate Loans or other fees or amounts payable hereunder or change the basis of taxation of any of the foregoing (other than taxes (including Non- Excluded Taxes) described in Section 2.17 and other than any franchise tax or tax or other similar governmental charges, fees or assessments based on the overall net income of such Bank by the U.S. Federal government or by any jurisdiction in which such Bank maintains an office, unless the presence of such office is solely attributable to the enforcement of any rights hereunder or under any Security Document with respect to an Event of Default); (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by any Bank; (iii) impose on any such Bank or the London Interbank Market any other condition affecting this Agreement or LIBO Rate Loans made by such Bank; or (iv) impose upon any Bank any other condition with respect to any amount paid or to be paid by any Bank with respect to its LIBO Rate Loans or this Agreement; and the result of any of the foregoing shall be to increase the cost to any Bank of making or maintaining its LIBO Rate Loans or Commitment hereunder, or to reduce the amount of any sum (whether of principal, interest or otherwise) received or receivable by such Bank or to require such Bank to make any payment, in respect of any such Loan, in each case by or in an amount which such Bank in its sole judgment shall deem material, then the Borrower to which such Loan was made shall pay to such Bank on demand such an amount or amounts as will compensate the Bank for such additional cost, reduction or payment. (c) If any Bank shall have determined that the applicability of any law, rule, regulation, agreement or guideline adopted after the Closing Date regarding capital adequacy, or any change after the Closing Date in any such law, rule, regulation, agreement or guideline (whether such law, rule, regulation, agreement or guideline has been adopted) or in the interpretation or administration of any of the foregoing by any Governmental Authority charged with the interpretation or administration thereof, or compliance by any Bank (or any lending office of such Bank) or any Bank's holding company with any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority made or issued after the Closing Date, has or would have the effect of reducing the rate of return on such Bank's capital or on the capital of such Bank's holding company, if any, as a consequence of this Agreement or the Loans made pursuant hereto to a level below that which such Bank or such Bank's holding company could have achieved but for such applicability, adoption, change or compliance (taking into consideration such Bank's policies and the policies of such Bank's holding company with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time the Borrowers shall pay to such Bank such additional amount or amounts as will compensate such Bank or such Bank's holding company for any such reduction suffered. (d) If and on each occasion that a Bank makes a demand for compensation pursuant to paragraph (a), (b) or (c) above, or under Section 2.17 (it being understood that a Bank may be reimbursed for any specific amount under only one such paragraph or Section) the Borrowers may, upon at least three Business Days' prior irrevocable written or telex notice to each of such Bank and the Administrative Agent, in whole permanently replace the Commitment of such Bank; provided that such notice must be given not later than the 90th day following the date of a demand for compensation made by such Bank; and provided that the Borrowers shall replace such Commitment with the Commitment of a commercial bank satisfactory to the Administrative Agent. Such notice from the Borrowers shall specify an effective date for the termination of such Bank's Commitment which date shall not be later than the 180th day after the date such notice is given. On the effective date of any termination of such Bank's Commitment pursuant to this clause (d), the Borrowers shall pay to the Administrative Agent for the account of such Bank (A) any Commitment Fees on the amount of such Bank's Commitment so terminated accrued to the date of such termination, (B) the principal amount of any outstanding Loans held by such Bank plus accrued interest on such principal amount to the date of such termination and (C) the amount or amounts requested by such Bank pursuant to clause (a), (b) or (c) above or Section 2.17, as applicable. The Borrowers will remain liable to such terminated Bank for any loss or expense that such Bank may sustain or incur as a consequence of such Bank's making any LIBO Rate Loan or any part thereof or the accrual of any interest on any such Loan in accordance with the provisions of this Section 2.11(d) as set forth in Section 2.13. Upon the effective date of termination of any Bank's Commitment pursuant to this Section 2.11(d) such Bank shall cease to be a "Bank" hereunder; provided that no such termination of any such Bank's Commitment shall affect (i) any liability or obligation of the Borrowers or any other Bank to such terminated Bank which accrued on or prior to the date of such termination or (ii) such terminated Bank's rights hereunder in respect of any such liability or obligation. (e) A certificate of a Bank (or Transferee) setting forth such amount or amounts as shall be necessary to compensate such Bank (or Transferee) as specified in paragraph (a), (b) or (c) (and in the case of paragraph (c), such Bank's holding company) above or Section 2.17, as the case may be, shall be delivered as soon as practicable to the Borrowers, and in any event within 90 days of the change giving rise to such amount or amounts, and shall be conclusive absent manifest error. The appropriate Borrower shall pay each Bank the amount shown as due on any such certificate within 15 days after its receipt of the same. In preparing such a certificate, each Bank may employ such assumptions and allocations of costs and expenses as it shall in good faith deem reasonable. The failure of any Bank (or Transferee) to give the required 90 day notice shall excuse the Borrowers from their obligations to pay additional amounts pursuant to such Sections incurred for the period that is 90 days or more prior to the date such notice was required to be given. (f) Failure on the part of any Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital within the 90 days required pursuant to Section 2.11(e) shall not constitute a waiver of such Bank's rights to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital for any period after the date that is 90 days prior to the date of the delivery of demand for compensation. The protection of this Section 2.11 shall be available to each Bank regardless of any possible contention of invalidity or inapplicability of the law, regulation or condition which shall have occurred or been imposed. No Borrower shall be required to make any additional payment to any Bank pursuant to Section 2.11(a) or (b) in respect of any such cost, reduction or payment that could be avoided by such Bank in the exercise of reasonable diligence, including a change in the lending office of such Bank if possible without material cost to such Bank. Each Bank agrees that it will promptly notify the Borrowers and the Administrative Agent of any event of which the responsible account officer shall have knowledge which would entitle such Bank to any additional payment pursuant to this Section 2.11. The Borrowers agree to furnish promptly to the Administrative Agent official receipts evidencing any payment of any tax. SECTION 2.12. Change in Legality. (a) Notwith- standing anything to the contrary herein contained, if after the Closing Date any change in any law or regulation or in the interpretation thereof by any Governmental Authority charged with the administration or interpretation thereof shall make it unlawful for any Bank to make or maintain any LIBO Rate Loan or to give effect to its obligations as contemplated hereby with respect to any LIBO Rate Loan, then, by written notice to the Borrowers and to the Administrative Agent, such Bank may: (i) declare that LIBO Rate Loans will not thereafter (for the duration of such unlawfulness or impracticality) be made by such Bank hereunder, whereupon the Borrowers shall be prohibited from requesting LIBO Rate Loans from such Bank hereunder unless such declaration is subsequently withdrawn; and (ii) require that all outstanding LIBO Rate Loans made by it be converted to Reference Rate Loans, in which event (A) all such LIBO Rate Loans shall be automatically converted to Reference Rate Loans as of the end of the applicable Interest Period, unless an earlier conversion date is legally required, (B) all payments and prepayments of principal which would otherwise have been applied to repay the converted LIBO Rate Loans shall instead be applied to repay the Reference Rate Loans resulting from the conversion of such LIBO Rate Loans and (C) the Reference Rate Loans resulting from the conversion of such LIBO Rate Loans shall be prepayable only at the times the converted LIBO Rate Loans would have been prepayable, notwithstanding the provisions of Section 2.9. (b) Before giving any notice to the Borrowers and the Administrative Agent pursuant to this Section 2.12, such Bank shall designate a different LIBOR Office if such designation will avoid the need for giving such notice and will not in the judgment of such Bank, be otherwise disadvantageous to such Bank. For purposes of Section 2.12(a), a notice to the Borrowers by any Bank shall be effective on the date of receipt by the Borrowers. SECTION 2.13. Indemnity. Each Borrower shall indemnify each Bank against any funding, redeployment or similar loss or expense which such Bank may sustain or incur as a consequence of (a) any event, other than a default by such Bank in the performance of its obligations hereunder, which results in (i) such Bank receiving or being deemed to receive any amount on account of the principal of any LIBO Rate Loan prior to the end of the Interest Period in effect therefor (any of the events referred to in this clause (i) being called a "Breakage Event") or (ii) any Loan to be made by such Bank not being made after notice of such Loan shall have been given by such Borrower hereunder or (b) any default in the making of any payment or prepayment of any amount required to be made hereunder. In the case of any Breakage Event, such loss shall include an amount equal to the excess, as reasonably determined by such Bank, of (i) its cost of obtaining funds for the Loan which is the subject of such Breakage Event for the period from the date of such Breakage Event to the last day of the Interest Period in effect (or which would have been in effect) for such Loan over (ii) the amount of interest (as reasonably determined by such Bank) that would be realized by such Bank in reemploying the funds so paid, prepaid or converted or not borrowed, continued or converted by making a LIBO Rate Loan in such principal amount and with a maturity comparable to such period. A certificate of any Bank setting forth any amount or amounts which such Bank is entitled to receive pursuant to this Section shall be delivered to the Borrowers and shall be conclusive absent manifest error. SECTION 2.14. Pro Rata Treatment. Except as permitted under any of Sections 2.8(b), 2.11, 2.12, 2.13 or 2.17, each borrowing under each type of Loan, each payment or prepayment of principal of the Loans, each payment of interest on the Loans, each other reduction of the principal or interest outstanding under the Loans, however achieved, including by setoff by any Person, each payment of the Commitment Fees, each reduction of the Commitments and each conversion or continuation of Loans shall be allocated pro rata among the Banks in the proportions that their respective Commitments bear to the Total Commitment (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Loans). Each Bank agrees that in computing such Bank's portion of any borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Bank's percentage of such borrowing to the next higher or lower whole Dollar amount. SECTION 2.15. Sharing of Setoffs. Each Bank agrees that if it shall, through the exercise of a right of banker's lien, setoff or counterclaim against any Borrower or pursuant to a secured claim under Section 506 of Title 11 of the United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Bank under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means obtain payment (voluntary or involuntary) in respect of any Loan of any Borrower held by it as a result of which the unpaid principal portion of the Loans of such Borrower held by it shall be proportionately less than the unpaid principal portion of the Loans of such Borrower held by any other Bank (other than as permitted under any of Sections 2.8(b), 2.11, 2.12, 2.13 or 2.17), it shall be deemed to have simultaneously purchased from such other Bank at face value, and shall promptly pay to such other Bank the purchase price for, a participation in the Loans of such Borrower held by such other Bank, so that the aggregate unpaid principal amount of the Loans of such Borrower and participation in Loans of such Borrower held by each Bank shall be in the same proportion to the aggregate unpaid principal amount of all Loans of such Borrower then outstanding as the principal amount of the Loans of such Borrower held by it prior to such exercise of banker's lien, setoff or counterclaim was to the principal amount of all Loans of such Borrower outstanding prior to such exercise of banker's lien, setoff or counterclaim or other event; provided, however, that if any such purchase or purchases or adjustments shall be made pursuant to this Section 2.15 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without interest. To the fullest extent permitted by applicable law, each Borrower expressly consents to the foregoing arrangements and agrees that any Bank holding a participation in a Loan of either Borrower deemed to have been so purchased may exercise any and all rights of banker's lien, setoff or counterclaim with respect to any and all moneys owing by such Borrower hereunder to such Bank as fully as if such Bank had made a Loan directly to such Borrower in the amount of such participation. SECTION 2.16. Payments. (a) Except as otherwise provided in this Agreement, all payments and prepayments to be made by either Borrower to the Banks hereunder, whether on account of Commitment Fees, payment of principal or interest on the Promissory Notes or other amounts at any time owing hereunder or under any other Loan Document, shall be made to the Administrative Agent at its office at 270 Park Avenue, New York, New York, for the account of the several Banks in immediately available funds. All such payments shall be made to the Administrative Agent as aforesaid not later than 10:30 a.m., New York City time, on the date due; and funds received after that hour shall be deemed to have been received by the Administrative Agent on the following Business Day. (b) As promptly as possible, but no later than 2:00 p.m., New York City time, on the date of each borrowing, each Bank participating in the Loans made on such date shall pay to the Administrative Agent such Bank's Applicable Percentage of such Loan plus, if such payment is received by the Administrative Agent after 2:00 p.m., New York City time, on the date of such borrowing, interest at a rate per annum equal to the rate in effect on such day, quoted by the Administrative Agent at its office at 270 Park Avenue, New York, New York, for the overnight "sale" to such Bank of Federal funds. At the time of, and by virtue of, such payment, such Bank shall be deemed to have made its Loan in the amount of such payment. The Administrative Agent agrees to pay any moneys, including such interest, so paid to it by the lending Banks promptly, but no later than 3:00 p.m., New York City time, on the date of such borrowing, to the appropriate Borrower in immediately available funds. (c) If any payment of principal, interest, Commitment Fee or any other amount payable to the Banks hereunder or under any Promissory Note shall fall due on a day that is not a Business Day, then (except in the case of payments of principal of or interest on LIBO Rate Loans, in which case such payment shall be made on the next preceding Business Day if the next succeeding Business Day would fall in the next calendar month) such due date shall be extended to the next succeeding Business Day, and interest shall be payable on principal in respect of such extension. (d) Unless the Administrative Agent shall have been notified by the Borrowers prior to the date on which any payment or prepayment is due hereunder (which notice shall be effective upon receipt) that the Borrowers do not intend to make such payment or prepayment, the Administrative Agent may assume that the Borrowers have made such payment or prepayment when due and the Administrative Agent may in reliance upon such assumption (but shall not be required to) make available to each Bank on such date an amount equal to the portion of such assumed payment or prepayment such Bank is entitled to hereunder, and, if the Borrowers have not in fact made such payment or prepayment to the Administrative Agent, such Bank shall, on demand, repay to the Administrative Agent the amount made available to such Bank, together with interest thereon in respect of each day during the period commencing on the date such amount was made available to such Bank and ending on (but excluding) the date such Bank repays such amount to the Administrative Agent, at a rate per annum equal to the rate, determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error). (e) All payments of the principal of or interest on the Loans or any other amounts to be paid to any Bank or the Administrative Agent under this Agreement or any of the other Loan Documents shall be made in Dollars, without reduction by reason of any currency exchange expense. SECTION 2.17. U.S. Taxes. (a) Any and all payments by any Borrower hereunder shall be made, in accordance with Section 2.16, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto imposed by the United States or any political subdivision thereof, excluding taxes imposed on the net income of an Agent or any Bank (or Transferee) and franchise taxes of an Agent or any Bank (or Transferee), as applicable, as a result of a connection between the jurisdiction imposing such taxes and such Agent or such Bank (or Transferee), as applicable, other than a connection arising solely from such Agent or such Bank (or Transferee), as applicable, having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Non-Excluded Taxes"). If any Borrower shall be required by law to deduct any Non-Excluded Taxes from or in respect of any sum payable hereunder to the Banks (or any Transferee) or an Agent, (i) the sum payable shall be increased by the amount necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.17) such Bank (or Transferee) or an Agent (as the case may be) shall receive an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant taxing authority or other Governmental Authority in accordance with applicable law; provided, however, that no Transferee of any Bank shall be entitled to receive any greater payment under this Section 2.17 than such Bank would have been entitled to receive with respect to the rights assigned, participated or otherwise transferred unless such assignment, participation or transfer shall have been made at a time when the circumstances giving rise to such greater payment did not exist. (b) In addition, the Borrowers agree to bear and to pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp or documentary taxes or any other similar excise taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document and any property taxes that arise from the enforcement of this Agreement or any other Loan Document ("Other Taxes"). (c) The Borrowers will indemnify each Bank (or Transferee) and each Agent for the full amount of Non- Excluded Taxes and Other Taxes (including Non-Excluded Taxes or Other Taxes imposed on amounts payable under this Section 2.17) paid by such Bank (or Transferee) or such Agent, as the case may be, and any liability (including penalties, interest and expenses (including reasonable attorney's fees and expenses)) arising therefrom or with respect thereto. A certificate as to the amount of such payment or liability prepared by a Bank or Agent, or the Administrative Agent on behalf of such Bank or Agent, absent manifest error, shall be final, conclusive and binding for all purposes. Such indemnification shall be made within 30 days after the date such Bank (or Transferee) or such Agent, as the case may be, makes written demand therefor. (d) Within 30 days after the date of any payment of Non-Excluded Taxes or Other Taxes by any Borrower to the relevant Governmental Authority, such Borrower will furnish to the Administrative Agent, at its address referred to on the signature page, the original or a certified copy of a receipt issued by such Governmental Authority evidencing payment thereof. (e) At the time it becomes a party to this Agreement or a Transferee, each Bank (or Transferee) that is organized under the laws of a jurisdiction outside the United States shall (in the case of a Transferee, subject to the immediately succeeding sentence) deliver to the Borrowers either a valid and currently effective Internal Revenue Service Form 1001 or Form 4224 or, in the case of a Bank (or Transferee) claiming exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest", a Form W-8, or any subsequent version thereof or successors thereto, (and if such Bank (or Transferee) delivers a Form W-8, a certificate representing that such Bank (or Transferee) is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Borrowers and is not a controlled foreign corporation related to the Borrowers (within the meaning of Section 864(d)(4) of the Code)), properly completed and duly executed by such Bank (or Transferee) establishing that such payment is (i) not subject to United States Federal withholding tax under the Code because such payment is effectively connected with the conduct by such Bank (or Transferee) of a trade or business in the United States or (ii) totally exempt from (or in case of a Transferee, entitled to a reduced rate of) United States Federal withholding tax. Notwithstanding any other provision of this Section 2.17(e), no Transferee shall be required to deliver any form pursuant to this Section 2.17(e) that such Transferee is not legally able to deliver. In addition, each Bank (or Transferee) shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered, but only, in such case, to the extent such Bank (or Transferee) is legally able to do so. (f) Notwithstanding anything to the contrary contained in this Section 2.17, no Borrower shall be required to pay any additional amounts to any Bank (or Transferee) in respect of United States Federal withholding tax pursuant to paragraph (a) above if the obligation to pay such additional amounts would not have arisen but for a failure by such Bank (or Transferee) to comply with the provisions of paragraph (e) above. (g) Any Bank (or Transferee) claiming any additional amounts payable pursuant to this Section 2.17 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by the Borrowers or to change the jurisdiction of its applicable lending office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Bank, be otherwise disadvantageous to such Bank (or Transferee). (h) Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section 2.17 shall survive the payment in full of the principal of and interest on all Loans made hereunder. (i) Nothing contained in this Section 2.17 shall require any Bank (or Transferee) or the Administrative Agent to make available any of its income tax returns (or any other information that it deems to be confidential or proprietary). SECTION 2.18. FTX or Restricted Subsidiary as Limited Partner. Notwithstanding anything to the contrary contained in this Agreement or any Promissory Note, with respect to any direct liabilities of FRP to the Banks under this Agreement, its Promissory Notes or the other Loan Documents, FTX and any Restricted Subsidiary solely in its capacity as a partner of FRP shall be deemed to be limited, rather than general, partners of FRP. Nothing in this Section 2.18 shall be deemed in any way to derogate from or affect FTX's own direct obligations under this Agreement, its Promissory Note or the other Loan Documents. ARTICLE III Representations and Warranties SECTION 3.1. Representations and Warranties. As of the Funding Date and each other date upon which such representations and warranties are required to be made or deemed made pursuant to Section 6.1(i), (i) FTX represents and warrants with respect to itself and (ii) FTX and FRP jointly and severally represent and warrant with respect to FRP, in each case to each of the Banks, as follows: (a) Organization, Powers. Each Borrower (i) is duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has the requisite power and authority to own its property and assets and to carry on its business as now conducted and as proposed to be conducted, and (iii) is qualified to do business in every jurisdiction where such qualification is required, except where the failure so to qualify would not have a material adverse effect on its condition, financial or otherwise. Each Borrower has the power to execute, deliver and perform its obligations under this Agreement and the other Loan Documents to which it is or is to be a party, to borrow hereunder and to execute and deliver any Promissory Notes to be delivered by it. Each Borrower has all requisite corporate or partnership power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its own assets and carry on its business as now being or as proposed to be conducted. (b) Authorization. The execution, delivery and performance of this Agreement (including, without limitation, performance of the obligations set forth in Section 5.1(k)) and the other Loan Documents to which each Borrower is or is to be, a party and the borrowings hereunder (i) have been duly authorized by all requisite corporate or partnership and, if required, stockholder or partner, action on the part of each Borrower, as the case may be, and (ii) will not (A) violate (x) any Governmental Rule or the certificate or articles of incorporation or limited partnership or other constitutive documents or the By- laws, partnership agreement or regulations of such Person or (y) any provisions of any indenture, agreement or other instrument to which such Person is a party, or by which such Person or any of their respective properties or assets are or may be bound, (B) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in (ii)(A)(y) above or (C) result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any property or assets of such Person, except as contemplated by the Security Agreements. (c) Governmental Approvals. Except for those consents, approvals and registrations listed on Schedule IV hereto, each of which has been obtained and is in full force and effect, no registration with or consent or approval of, or other action by, any Governmental Authority is or will be required in connection with the execution, delivery and performance by either Borrower of this Agreement or any other Loan Document to which it is, or is to be, a party or the borrowings hereunder by either Borrower. Other than routine authorizations, permissions or consents which are of a minor nature and which are customarily granted in due course after application or the denial of which would not materially adversely affect the business, financial condition or operations of either Borrower, such Person has all franchises, licenses, certificates, authorizations, approvals or consents from all national, state and local governmental and regulatory authorities required to carry on its business as now conducted and as proposed to be conducted. (d) Enforceability. This Agreement and each of the other Loan Documents to which it is a party constitutes a legal, valid and binding obligation of each Borrower, in each case enforceable in accordance with its respective terms (subject, as to the enforcement of remedies against such Person, to applicable bankruptcy, reorganization, insolvency, moratorium and similar laws affecting creditors' rights against such Person generally in connection with the bankruptcy, reorganization or insolvency of such Person or a moratorium or similar event relating to such Person). (e) Financial Statements. FTX has heretofore furnished to each of the Banks consolidated balance sheets and statements of operations and changes in retained earnings and cash flow as of and for the fiscal years ended December 31, 1993 and 1994, all audited and certified by Arthur Andersen LLP, independent public accountants, included in FTX's Annual Report on Form 10-K for the year ended December 31, 1994 (the "1994 Form 10-K"), and unaudited consolidated balance sheets and statements of operations and cash flow as of and for the fiscal quarter ended March 31, 1995 included in FTX's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995. In addition, FRP has heretofore furnished to each of the Banks consolidated balance sheets and statements of operations and cash flow for FRP as of and for the fiscal years ended December 31, 1993 and 1994, all audited and certified by Arthur Andersen LLP and unaudited consolidated balance sheets and statements of operations and cash flow for FRP as of and for the fiscal quarter ended March 31, 1995. All such balance sheets and statements of operations and cash flow present fairly the financial condition and results of operations of FTX and its Subsidiaries or of FRP and its Subsidiaries, as applicable, as of the dates and for the periods indicated. Such financial statements and the notes thereto disclose all material liabilities, direct or contingent, of FTX and its Subsidiaries or of FRP and its Subsidiaries, as applicable, as of the dates thereof which are required to be disclosed in the footnotes to financial statements prepared in accordance with GAAP. The financial statements referred to in this Section 3.1(e) have been prepared in accordance with GAAP. There has been no material adverse change since December 31, 1994, in the businesses, assets, operations, prospects or condition, financial or otherwise, of (i) FTX, (ii) FRP, (iii) FTX and its Subsidiaries taken as a whole or (iv) FRP and its Subsidiaries taken as a whole. (f) Litigation; Compliance with Laws; etc. (i) Except as disclosed in the 1994 Form 10-K and any subsequent reports filed as of 20 days prior to the Closing Date with the SEC on Form 10-Q or Form 8-K which have been delivered to the Banks, there are no actions, suits or proceedings at law or in equity or by or before any governmental instrumentality or other agency or regulatory authority now pending or, to the knowledge of the Borrowers, threatened against or affecting the Borrowers or any Subsidiary or the businesses, assets or rights of the Borrowers or any Subsidiary (i) which involve this Agreement or any of the other Loan Documents or any of the transactions contemplated hereby or thereby or the collateral for the Loans or (ii) as to which there is a reasonable possibility of an adverse determination and which, if adversely determined, could, individually or in the aggregate, materially impair the ability of FTX or FRP to conduct its business substantially as now conducted, or materially and adversely affect the businesses, assets, operations, prospects or condition, financial or otherwise, of FTX or FRP, or impair the validity or enforceability of, or the ability of FTX or FRP to perform its obligations under, this Agreement or any of the other Loan Documents to which it is a party. (ii) Neither the Borrowers nor any Subsidiary is in violation of any Governmental Rule, or in default with respect to any judgment, writ, injunction, decree, rule or regulation of Governmental Authority, where such violation or default could result in a Material Adverse Effect. (g) Title, etc. The Borrowers and the Subsidiaries have good and valid title to their respective material properties, assets and revenues (exclusive of oil, gas and other mineral properties on which no development or production activities are being conducted following discovery of commercially exploitable reserves), free and clear of all Liens except such Liens as are permitted by Section 5.2(d) 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 the respective Borrower or the respective Subsidiary 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. (h) Federal Reserve Regulations; Use of Proceeds. (i) Neither of the Borrowers nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock. (ii) No part of the proceeds of the Loans will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose which entails a violation of, or which is inconsistent with, the provisions of the Regulations of the Board, including, without limitation, Regulations G, U or X thereof. (iii) Each Borrower will use the proceeds of all Loans made to it to refinance borrowings by it under the Existing Credit Agreement and for its ongoing general corporate purposes and for acquisition transactions permitted hereunder (including acquisitions of FRP units). (iv) As of the Funding Date (A) the collateral subject to the FTX Security Agreement (1) constitutes Margin Stock with a current market value (within the meaning of Regulation U) at least equal to twice the aggregate amount of credit secured, directly or indirectly (within the meaning of Regulation U), by such Margin Stock on such date or (2) constitutes collateral which is not Margin Stock ("Other Collateral") with a current market value (within the meaning of Regulation U) at least equal to twice the aggregate amount of credit secured, directly or indirectly (within the meaning of Regulation U), by such Other Collateral (including, in each case, as credit secured for such purpose the entire amount of the Commitments to make Loans to FTX), and (B) there are no Liens on such Margin Stock or such Other Collateral, as the case may be (other than those created by the FTX Security Agreement). As of the date of each borrowing made by FRP, not more than 25% of the value of the assets directly or indirectly securing the Loans and Permitted Secured Swaps of FRP constitutes Margin Stock. (i) Taxes. The Borrowers and the Subsidiaries have filed or caused to be filed all material Federal, state, local and foreign tax returns which are required to be filed by them, and have paid or caused to be paid all taxes shown to be due and payable on such returns or on any assessments received by any of them, other than any taxes or assessments the validity of which the relevant Borrower or Subsidiary is contesting in good faith by appropriate proceedings, and with respect to which the relevant Borrower or Subsidiary shall, to the extent required by GAAP, have set aside on its books adequate reserves. (j) Employee Benefit Plans. Each of the Borrowers and its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, could materially and adversely affect the financial condition and operations of the Borrowers and the ERISA Affiliates, taken as a whole. The present value of all benefit liabilities under each Plan, determined on a plan termination basis (based on those assumptions used for financial disclosure purposes in accordance with Statement of Financial Accounting Standards No. 87 of the Financial Accounting Standards Board ("SFAS 87") did not, as of the last annual valuation date applicable thereto, exceed by more than $5,000,000 the value of the assets of such Plan, and the present value of all benefit liabilities of all underfunded Plans, determined on a plan termination basis (based on those assumptions used for financial disclosure purposes in accordance with SFAS 87) did not, as of the last annual valuation dates applicable thereto, exceed by more than $5,000,000 the value of the assets of all such underfunded Plans. (k) Investment Company Act. Neither Borrower nor any Subsidiary is an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended from time to time. (l) Public Utility Holding Company Act. Neither Borrower nor any Subsidiary is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended from time to time. (m) Subsidiaries. Schedule III constitutes a complete and correct list, as of the Closing Date or the date of any update thereof required by Section 5.1(a)(6), of all Restricted Subsidiaries with at least $1,000,000 in total assets, indicating the jurisdiction of incorporation or organization of each corporation or partnership and the percentage of shares or units owned on such date directly or indirectly by FTX in each. Each entity shown as a parent company owns on such date, free and clear of all Liens (other than the Liens required or permitted by Section 3.1(o)), the percentage of voting shares or partnership interests outstanding of its Subsidiaries shown on Schedule III, and all such shares or partnership interests are validly issued and fully paid. (n) Environmental Matters. (1) The properties owned or operated by the Borrowers and their Subsidiaries and by IMC-Agrico (the "Properties") and all operations of the Borrowers and their Subsidiaries and IMC-Agrico are in compliance, and in the last three years have been in compliance, with all Environmental Laws and all necessary Environmental Permits have been obtained and are in effect, except to the extent that such non-compliance or failure to obtain any necessary permits, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; (2) there have been no Releases or threatened Releases at, from, under or proximate to the Properties or otherwise in connection with the operations of the Borrowers or their Subsidiaries or IMC-Agrico, which Releases or threatened Releases, in the aggregate, could reasonably be expected to result in a Material Adverse Effect; (3) neither the Borrowers nor any of their Subsidiaries nor IMC-Agrico has received any notice of an Environmental Claim in connection with the Properties or the operations of the Borrowers or their Subsidiaries or IMC-Agrico or with regard to any Person whose liabilities for environmental matters the Borrowers or their Subsidiaries or IMC-Agrico has retained or assumed, in whole or in part, contractually, by operation of law or otherwise, which, in the aggregate, could reasonably be expected to result in a Material Adverse Effect, nor do the Borrowers or their Subsidiaries have reason to believe that any such notice will be received or is being threatened; and (4) Hazardous Materials have not been transported from the Properties, nor have Hazardous Materials been generated, treated, stored or disposed of at, on or under any of the Properties in a manner that could give rise to liability under any Environmental Law, nor have the Borrowers or their Subsidiaries or IMC-Agrico retained or assumed any liability, contractually, by operation of law or otherwise, with respect to the generation, treatment, storage or disposal of Hazardous Materials, which transportation, generation, treatment, storage or disposal, or retained or assumed liabilities, in the aggregate, could reasonably be expected to result in a Material Adverse Effect. The representations set forth in this Section 3.1(n) with respect to IMC-Agrico are given to the best knowledge after due inquiry of the Borrowers and their Subsidiaries (which shall be deemed to include the actual knowledge of Crescent Technology, Inc.). (o) Security Documents. (i) The FTX Security Agreement is effective to create in favor of the FTX Collateral Agent, for the ratable benefit of the parties to the FTX Intercreditor Agreement, a legal, valid and enforceable security interest in the Shared Collateral (as defined in the FTX Security Agreement); the Shared Collateral has been delivered to the FTX Collateral Agent on or before the Funding Date and the FTX Security Agreement constitutes a fully perfected first priority Lien on, and security interests in, all right, title and interest of the pledgors thereunder in such Shared Collateral and the proceeds thereof, in each case prior and superior in right to any other Person subject to the restriction on conversion of Unit Equivalents referred to in Section 5.2(d)(viii) and Section 27 of the FTX Security Agreement. (ii) The FRP Security Agreement is effective to create in favor of the FRP Collateral Agent, for the ratable benefit of the Banks, a legal, valid and enforceable security interest in the Collateral (as defined in the FRP Security Agreement) and, when financing statements in appropriate form are filed in the offices specified on Schedule VI hereto, the FRP Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the grantor thereunder in such Collateral and the proceeds thereof, in each case prior and superior in right to any other Person, except as provided in Articles 34, 35 and 36 of the FRP Security Agreement. (p) No Material Misstatements. No information, report (including any exhibit, schedule or other attachment thereto or other document delivered in connection therewith), financial statement, exhibit or schedule prepared or furnished by either Borrower to the Administrative Agent or any Bank in connection with this Agreement or any of the other Loan Documents or included therein or any information provided to Cravath, Swaine & Moore in connection with the preparation of the environmental due diligence summary memorandum referred to in paragraph (m) of Article IV contained or contains any material misstatement of fact or omitted or omits to state any material fact necessary to make the statements therein, taken as a whole in the light of the circumstances under which they were made, not misleading. ARTICLE IV Conditions to Initial Credit Event Subject to satisfaction of the conditions to each Credit Event required by Section 6.1, the Borrowers may not borrow Loans hereunder until the first date (the "Funding Date") upon which the following conditions have been satisfied: (a) Each Bank shall have received its duly executed Promissory Notes complying with the provisions of Section 2.4. (b) The Administrative Agent and the Documentary Agent shall have received, on behalf of themselves and the Banks, a favorable written opinion of (i) the General Counsel of FTX, substantially to the effect set forth in Exhibit H, (ii) Davis Polk & Wardwell, counsel for the Borrowers, substantially to the effect set forth in Exhibit I and (iii) Liskow & Lewis, special Louisiana counsel for the Borrowers, substantially to the effect set forth in Exhibit J, in each case (A) dated the Funding Date, (B) addressed to the Agents and the Banks, and (C) covering such other matters relating to the Restructuring, the Loan Documents and the transactions contemplated thereby as the Administrative Agent and the Documentary Agent shall reasonably request, and the Borrowers hereby instruct such counsel to deliver such opinions. (c) All legal matters incident to this Agreement, the borrowings and extensions of credit hereunder and the other Loan Documents shall be satisfactory to the Banks and to Cravath, Swaine & Moore, special counsel for the Agents. (d) The Administrative Agent and the Documentary Agent shall have received (i) a copy of the certificate of incorporation or partnership certificate (as applicable), including all amendments thereto, of each Borrower, certified as of a recent date by the Secretary of State of the state of its organization, and a certificate as to the good standing of each Borrower as of a recent date, from such Secretary of State; (ii) a certificate of the Secretary or Assistant Secretary of each Borrower dated the Funding Date and certifying (A) that attached thereto is a true and complete copy of the by-laws or partnership agreement (as applicable) of such Borrower as in effect on the Funding Date and at all times since a date prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of such Borrower (in the case of FRP, the Board of Directors of its managing general partner) authorizing the execution, delivery and performance of the Loan Documents to which such Person is a party and the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate of incorporation and by-laws or partnership certificate and partnership agreement (as applicable) of such Borrower have not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (i) above or the date of the certificate furnished pursuant to clause (ii) above, as applicable, and (D) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such Borrower; (iii) a certificate of another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to (ii) above; and (iv) such other documents as the Banks or Cravath, Swaine & Moore, special counsel for the Agents, may reasonably request. (e) The Administrative Agent and the Documentary Agent shall have received a certificate, dated the Funding Date and signed by a Financial Officer of each Borrower, confirming compliance with the conditions precedent set forth in paragraphs (i) and (iii) of Section 6.1. (f) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Funding Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder or under any other Loan Document. (g) The FTX Security Agreement shall have been duly executed by the parties thereto and delivered to the FTX Collateral Agent and shall be in full force and effect, and the Unit Equivalents (as defined in the FRP Partnership Agreement) in FRP owned by FTX and required to be pledged under the FTX Security Agreement shall have been duly and validly pledged thereunder to the FTX Collateral Agent for the ratable benefit of the parties to the FTX Intercreditor Agreement. (h) The FRP Security Agreement shall have been duly executed by the parties thereto and shall have been delivered to the FRP Collateral Agent and shall be in full force and effect on such date and each document (including each Uniform Commercial Code financing statement) required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the FRP Collateral Agent for the benefit of the Banks a valid, legal and perfected first-priority security interest in and lien on the Collateral described in such agreement (subject only to the Liens described in Section 5.2(d)(viii) of the FRP Security Agreement and Articles 34, 35 and 36 of the FRP Security Agreement and Schedule A to the FRP Security Agreement) shall have been delivered to the Collateral Agent. (i) The Restructuring shall have been completed on a generally tax-free basis (subject to exceptions approved by the Administrative Agent and the Documentary Agent), including arrangements in connection with the Restructuring with respect to existing indebtedness of FTX, FRP, FCX and FI, all on terms substantially the same as those described in Schedule XI or otherwise satisfactory to the Required Banks (including all tax, accounting, corporate and partnership matters), and the Administrative Agent and the Documentary Agent shall have received satisfactory opinions of counsel with respect to the Restructuring, its tax status and related matters as they shall reasonably request. (j) In connection with the Restructuring, all Debt of FTX shall have been repaid and cancelled (or, in the case of the Existing Credit Agreement, refunded by borrowings hereunder) and all Guarantees of Debt by FTX (other than the Guarantees referred to in Section 5.2(g)(xi)) shall have been released. (k) Closing and satisfaction of the conditions to initial borrowing under a new $200,000,000 Chemical/Chase Bank credit facility for FI and FCX and the amendment and restatement of the existing $550,000,000 Chemical/Chase Bank credit facility for FI shall have occurred substantially simultaneously with the Funding Date. (l) All outstanding loans under the Existing Credit Agreement shall have been repaid in full and the Existing Credit Agreement and the commitments of the banks party thereto shall have been terminated. (m) The Administrative Agent shall have received an environmental due diligence summary memorandum in form, scope and substance reasonably satisfactory to the Banks, from Cravath, Swaine & Moore as to certain environmental hazards, liabilities or Remedial Action to which IMC-Agrico, the Borrowers or their Subsidiaries may be subject. (n) The Borrowers shall have delivered to the Administrative Agent statements in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U. (o) The Stock Purchase Agreement shall be in full force and effect in the form as in effect on the Closing Date or as amended as permitted by Section 5.2(t). ARTICLE V Covenants SECTION 5.1. Affirmative Covenants of the Borrowers. Each of the Borrowers covenants and agrees with each Bank and Agent that from and after the Funding Date and so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document shall have been paid in full, that, unless the Required Banks otherwise provide prior written consent: (a) Financial Statements, etc. The Borrowers shall furnish each Bank: (1) within 95 days after the end of each fiscal year, a consolidated balance sheet of such Borrower and its Subsidiaries and of IMC-Agrico as at the close of such fiscal year and consolidated statements of operation and changes in retained earnings or partners' capital and cash flow of it and its Subsidiaries and of IMC-Agrico for such year, with the opinion thereon of Arthur Andersen LLP (Ernst & Young LLP, in the case of IMC-Agrico) or other independent public accountants of national standing selected by it or IMC-Agrico, as applicable, to the effect that such consolidated financial statements fairly present the financial condition and results of operations of such Borrower and IMC-Agrico, as applicable, on a consolidated basis in accordance with GAAP consistently applied, except as disclosed in such auditor's report; (2) within 50 days after the end of each of the first three quarters of each of its fiscal years, a consolidated balance sheet of such Borrower and its Subsidiaries and of IMC-Agrico as at the end of such quarter and consolidated statements of income of it and its Subsidiaries and of IMC-Agrico, for such quarter and for the period from the beginning of the fiscal year to the end of such quarter, certified in the case of each Borrower by a Financial Officer of FTX as fairly presenting the financial condition and results of operations of the Borrowers on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments; (3) promptly after their becoming available, (a) copies of all financial statements, reports and proxy statements which such Borrower shall have sent to its stockholders or unitholders generally, (b) copies of all registration statements (excluding registration statements relating to employee benefit plans) and regular and periodic reports, if any, which it shall have filed with the SEC, or any governmental agency substituted therefor, and (c) if requested by any Bank, copies of each annual report filed with any Governmental Authority pursuant to ERISA with respect to each Plan of such Borrower or any of the Subsidiaries; (4) promptly upon the occurrence of any Default or Event of Default, the occurrence of any default under any other Loan Document, the commencement of any proceeding regarding the Borrowers or any of their Subsidiaries or IMC- Agrico under any Federal or state bankruptcy law, any other development that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect, notice thereof, describing the same in reasonable detail; (5) at the time of provision of the financial statements referred to in clauses (1) and (2) above, an update of Schedule III to correct, add or delete any required information; and (6) from time to time, such further information regarding the business, affairs and financial condition of the Borrowers or any Subsidiary or IMC-Agrico as any Bank may reasonably request. At the time the Borrowers furnish financial statements pursuant to the foregoing clauses (1) and (2), FRP will also furnish each Bank a certificate signed by its Treasurer or other authorized Financial Officer setting forth the calculation of: (a) its current ratio as determined in accordance with Section 5.2(e), (b) its EBITDA Ratio as determined in accordance with Section 5.2(f) and (c) its Debt to Capital Ratio determined in accordance with Section 5.2(h) and the Borrowers will furnish a certificate by their Treasurers or other authorized Financial Officer certifying that no Default or Event of Default has occurred, or if such a Default or Event of Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto. (b) Taxes and Claims. The Borrowers shall, and shall cause each of its Subsidiaries to, pay and discharge all taxes, assessments and governmental charges or levies, imposed upon it or upon its income or profits, or upon any property belonging to it, prior to the date on which material penalties attach thereto; provided that neither Borrower nor any Subsidiary shall be required to pay any such tax, assessment, charge or levy, the payment of which is being contested in good faith by proper proceedings and with respect to which such Borrower or such Subsidiary shall have, to the extent required by GAAP, set aside on its books adequate reserves and such contest operates to suspend collection of the contested obligation, tax, assessment or charge and enforcement of a Lien. (c) Maintenance of Existence; Conduct of Business. Each Borrower shall preserve and maintain its corporate or partnership existence and all its rights, privileges and franchises necessary or desirable in the normal conduct of its business; provided that nothing herein shall prevent any transaction permitted by Section 5.2(c). (d) Compliance with Applicable Laws. Each Borrower shall, and shall cause each of its Subsidiaries to, comply with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority, a breach of which would materially and adversely affect its consolidated financial condition or business, except where contested in good faith and by proper proceedings and with respect to which such Borrower or Subsidiary shall have, to the extent required by GAAP, set aside on its books adequate reserves. (e) Litigation. The Borrowers shall promptly give to each Bank notice in writing of all litigation and all proceedings before any Governmental Authority or arbitration authorities affecting the Borrowers or any Subsidiary or IMC-Agrico, except those which, if adversely determined, do not relate to the Loan Documents and which would not have a material adverse effect on the business, assets, operations or financial condition of the Borrowers or IMC-Agrico or the Borrowers' ability to comply with their obligations under the Loan Documents. (f) ERISA. Each Borrower shall, and shall cause each of its Subsidiaries to, comply in all material respects with the applicable provisions of ERISA and the Code and furnish to the Administrative Agent as soon as possible, and in any event within 30 days after any Responsible Officer of the Borrowers or any ERISA Affiliate knows or has reason to know that, any ERISA Event has occurred that alone or together with any other ERISA Event could reasonably be expected to result in liability of the Borrowers in an aggregate amount exceeding $25,000,000 or requires payment exceeding $10,000,000 in any year, a statement of a Financial Officer of such Borrower setting forth details as to such ERISA Event and the action that such Borrower proposes to take with respect thereto. (g) Compliance with Environmental Laws. Each Borrower shall comply, and cause its Subsidiaries and all lessees and other Persons occupying the Properties to comply, in all material respects with all Environmental Laws and Environmental Permits applicable to its operations and Properties; obtain and renew all material Environmental Permits necessary for its operations and Properties; and conduct any Remedial Action in accordance with Environmental Laws; provided, however, that none of the Borrowers or any of their Subsidiaries shall be required to undertake any Remedial Action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances. (h) Preparation of Environmental Reports. If a default caused by reason of a breach of Section 3.1(n) or 5.1(g) shall have occurred and be continuing, at the request of the Required Banks through the Administrative Agent, the Borrowers shall provide to Banks within 45 days after such request, at the expense of the Borrowers, an environmental site assessment report for the Properties (which are the subject of such default) prepared by an environmental consulting firm acceptable to the Administrative Agent, indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance or Remedial Action in connection with such Properties. (i) Insurance. The Borrowers and each Restricted Subsidiary shall (i) keep its insurable properties adequately insured at all times; (ii) maintain such other insurance, to such extent and against such risks, including fire, flood and other risks insured against by extended coverage, as is customary with companies in the same or similar businesses; (iii) maintain in full force and effect public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled by it in such amount as it shall reasonably deem necessary; and (iv) maintain such other insurance as may be required by law. (j) Access to Premises and Records. The Borrowers and each Subsidiary shall maintain financial records in accordance with GAAP, and, at all reasonable times and as often as any Bank may reasonably request, permit representatives of any Bank to have access to its financial records and its premises and to the records and premises of any of its Subsidiaries and to make such excerpts from and copies of such records as such representatives deem necessary and to discuss its affairs, finances and accounts with its officers and its independent certified public accountants or other parties preparing consolidated or consolidating statements for it or on its behalf. (k) Further Assurances. Each Borrower shall, and shall cause its Subsidiaries to, execute any and all further documents, financing statements, agreements and instruments, and take all further actions (including filing Uniform Commercial Code financing statements), which may be required under applicable law, or which the Required Banks, the Administrative Agent or the Documentary Agent may reasonably request, in order to effectuate the transactions contemplated by this Agreement and the other Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created by the Security Agreements. The Borrowers agree to provide such evidence as the Collateral Agent shall reasonably request as to the perfection and priority status of each such security interest and Lien. (l) Covenants Regarding FRP. FTX shall cause FRP to perform the covenants relating to FRP set forth in Sections 5.1 and 5.2. SECTION 5.2. Negative Covenants of the Borrowers. Each of the Borrowers covenants and agrees with each Bank and Agent that, from and after the Funding Date and so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document have been paid in full, that, without the prior written consent of the Required Banks: (a) Conflicting Agreements. Each Borrower shall not and shall cause its Restricted Subsidiaries not to enter into any agreement containing any provision which would be violated or breached by the performance of their obligations under any Loan Document or under any instrument or document delivered or to be delivered by them hereunder or thereunder or in connection herewith or therewith, including any agreement with any Person which would prohibit or restrict (i) in the case of FRP and the other Restricted Subsidiaries and IMC-Agrico, the payments of dividends or other distributions or (ii) the ability of such entities to create Liens on any of their assets (other than assets which are subject to Liens permitted pursuant to paragraphs (ii), (iii), (iv), (vi), (vii) and (viii) of Section 5.2(d) and extensions and renewals and replacements thereof to the extent permitted pursuant to Section 5.2(d)(x) and the Liens permitted by paragraphs (ii) and (v) of Section 5.2(r)); provided that IMC-Agrico may be subject to negative pledge, dividend payment and financial covenant provisions no more restrictive than those in effect on the Closing Date. (b) Hedge Transactions. The Borrowers and the Restricted Subsidiaries will enter into or become obligated with respect to Hedge Agreements only in the ordinary course of business to hedge or protect against actual or reasonably anticipated exposures and not for speculation. (c) Consolidation or Merger; Disposition of Assets and Capital Stock. Each Borrower shall not, and shall not permit any Restricted Subsidiary or IMC- Agrico to, merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it, or sell, lease, transfer or otherwise dispose of (in one transaction or a series of transactions) all or any substantial part of its assets (whether now owned or hereafter acquired) or any capital stock of any Restricted Subsidiary, except for (i) the investments permitted by Section 5.2(r), (ii) dispositions of accounts receivable and dispositions of inventory in the ordinary course of business, (iii) dispositions of obsolete or worn-out property, or real estate not used or useful in its business, (iv) subject to Section 5.2(o) and (p), dispositions of assets by the Borrowers or a Restricted Subsidiary to another Restricted Subsidiary or a Borrower, (v) subject to Section 5.2(l), dispositions of assets by a Borrower or a Restricted Subsidiary to a Third Party, (vi) to the extent permitted by Section 5.2(q), the payment of dividends in cash or kind by a Borrower or any Restricted Subsidiary, (vii) subject to Section 2.7(b), sale and leaseback transactions, (viii) the transactions comprising the Restructuring and (ix) investments in Permitted Investments and dispositions thereof; and except that: (x) the Borrowers or any Restricted Subsidiary may merge or liquidate any corporation (other than, in the case of a Restricted Subsidiary, FTX or FRP) into itself; (y) any Restricted Subsidiary (other than FRP) may be merged into any other corporation; provided that such corporation, immediately following such merger, shall be deemed a Restricted Subsidiary; and (z) subject to Sections 2.7(b) and 5.2(j), the Borrowers or any Restricted Subsidiary may sell or otherwise dispose of (including by merger or consolidation) any assets or securities of any Subsidiary (other than (A) a 50.1% ownership interest in FRP on a fully diluted basis pledged pursuant to the FTX Security Agreement, (B) a 50.1% ownership interest in Main Pass pledged pursuant to the FRP Security Agreement, (C) the applicable percentage ownership interest in IMC- Agrico set forth on Schedule IX hereto pledged pursuant to the FRP Security Agreement and (D) non-cash proceeds pledged under the Security Agreements as required by Section 2.7(b)); provided, however, that in the case of a merger permitted by clause (x) above, immediately thereafter and giving effect thereto, such Borrower or, as the case may be, a Restricted Subsidiary would be the surviving corporation and, in the case of a merger permitted by clause (x) or clause (y) above or of any disposition of assets or securities permitted by clause (z) above, no Default or Event of Default would, immediately thereafter and giving effect thereto, have occurred and be continuing. Each sale or other disposition permitted by clause (z) above shall be permitted only if the Borrower or the respective Restricted Subsidiary shall receive fair consideration therefor, as determined by the Board of Directors of the Borrower or of such Restricted Subsidiary, as the case may be, and certified by its Treasurer or another of its Financial Officers to the Administrative Agent. It is understood and agreed that no transaction pursuant to a Deemed Lease (as in effect on the Closing Date or as amended from time to time with the approval of the Administrative Agent) shall be considered a disposition of assets within the meaning of this Section 5.2(c). (d) Liens. Each Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, create, incur, assume, or suffer to exist any Lien upon any of its respective properties, revenues or assets (including stock or other securities of any Person, including any Subsidiary), now owned or hereafter acquired, except: (i) required margin deposits on permitted Hedge Agreements and foreign currency exchange agreements, surety and appeal bonds and materialmen's, suppliers', tax and other like Liens arising in the ordinary course of its or such Restricted Subsidiary's business securing obligations which are not overdue or are being contested in good faith by appropriate proceedings and as to which adequate reserves have been set aside on its books to the extent required by GAAP, Liens arising in connection with workers' compensation, unemployment insurance and progress payments under government contracts, and other Liens incident to the ordinary conduct of its or such Restricted Subsidiary's business or the ordinary operation of property or assets and not incurred in connection with the obtaining of any Debt or Guarantee; (ii) Liens on assets or properties not owned as of the Closing Date by a Borrower or any Restricted Subsidiary securing only purchase money Debt of such Borrower or such Restricted Subsidiary permitted by Section 5.2(g)(vii), which Liens are limited to the specific property the purchase of which is financed by such Debt; (iii) Liens, existing at the time of the acquisition by a Borrower or any Restricted Subsidiary of the majority of the capital stock or all the assets of any other corporation or existing at the time of the merger of any such corporation into a Borrower or a Restricted Subsidiary, on such capital stock or assets so acquired or on the assets of the corporation so merged into such Borrower or such Restricted Subsidiary; provided, however, that such acquisition or merger (and the discharge of such Liens referred to in the immediately succeeding proviso) shall not otherwise result in an Event of Default or Default; and provided further that all such Liens shall be discharged within 180 days after the date of the respective acquisition or merger; (iv) Liens in favor of the Administrative Agent or the Banks or in favor of the FTX Collateral Agent as provided in the FTX Intercreditor Agreement and the FTX Security Agreement, Liens in favor of TCB and the Pel-Tex Lenders as permitted by the FTX Intercreditor Agreement, and Liens in favor of the FRP Collateral Agent as provided in the FRP Security Agreement, all as contemplated by Section 3.1(o); (v) Liens listed on Schedule VIII hereto securing obligations of a Borrower or a Restricted Subsidiary under Deemed Leases (as in effect on the Closing Date or as amended from time to time with the approval of the Administrative Agent); (vi) Liens (as in effect on the Closing Date) securing the Pennzoil Obligations on only the related assets purchased from Pennzoil Company; (vii) Liens of lessors of property (in such capacity) leased by a Borrower or a Restricted Subsidiary pursuant to an Operating Lease or a permitted Capitalized Lease Obligation, which Lien in any such case is limited to the property leased thereunder; (viii) the reciprocal collateral mortgages and rights of first refusal granted by FRP on Main Pass to its joint venture partners, the right of first offer granted by FRP on IMC-Agrico to IMC, and the restrictions on conversion of Unit Equivalents into Depositary Units (as such terms are defined in the FRP Partnership Agreement) as in effect on the Closing Date or as modified with the consent of the Required Banks; (ix) zoning restrictions, easements, rights- of-way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of a Borrower or any of its Subsidiaries; and (x) extensions, renewals and replacements of Liens referred to in paragraphs (i), (ii), (iv), (vii), (viii) and (ix) of this Section 5.2(d); provided that any such extension, renewal or replacement Lien shall be limited to the property or assets covered by the Lien extended, renewed or replaced and that the obligations secured by any such extension, renewal or replacement Lien shall be in an amount not greater than the amount of the obligations secured by the Lien extended, renewed or replaced. (e) Current Ratio. FRP shall not fail to maintain, as of the last day of each fiscal quarter, consolidated current assets of FRP (excluding Nonrestricted Subsidiaries) in an amount at least equal to the amount of consolidated current liabilities of FRP (excluding Nonrestricted Subsidiaries). For purposes hereof, consolidated current assets and consolidated current liabilities shall be determined in accordance with GAAP, except that (i) investments in shares of corporations (other than shares which are, and which are held as, marketable securities) and advances to Nonrestricted Subsidiaries and other firms or companies in which FRP has a material investment, direct or indirect, or which have a direct or indirect material investment in FRP, shall not be included in current assets; (ii) current assets shall be increased by the available portion of the Commitments which, under the terms of this Agreement, will, if not sooner terminated or drawn down by either Borrower, remain outstanding for at least twelve months following the time of determination; and (iii) the current portion of long-term Debt shall not be included in current liabilities. (f) EBITDA Ratio. FRP shall not permit its EBITDA Ratio to be less than 1.25 to 1.00 at the end of any fiscal quarter. (g) Debt. Neither Borrower nor any Restricted Subsidiary shall incur, create, assume or permit to exist any Debt of any of them except: (i) the Loans; (ii) $150,000,000 aggregate principal amount of FRP's 8-3/4% Senior Subordinated Notes due 2004, but not any extensions, renewals, replacements or refunding of such Debt; (iii) Debt secured by the Liens permitted by Section 5.2(d)(iii); provided that such Debt is discharged within 180 days of the relevant acquisition or merger; (iv) unsecured recourse liabilities (not in excess of the uncollectible amounts of the accounts receivable sold) of FRP arising from the sale of accounts receivable; (v) unsecured loans and advances between the Restricted Subsidiaries and to the Restricted Subsidiaries from FRP; (vi) unsecured subordinated loans by FTX to FRP on the terms of Schedule X hereto so long as no Loans are outstanding to FTX; (vii) purchase money Debt of FRP secured by Liens referred to in Section 5.2(d)(ii) not in excess of the purchase price of the related asset in each individual case and not in excess of $25,000,000 principal amount for all such outstanding purchase money Debt in the aggregate; (viii) unsecured Debt of FRP with a maturity less than 90 days pursuant to uncommitted lines of credit with an outstanding aggregate principal amount not at any time in excess of $10,000,000; (ix) subject to Section 2.7(b), additional Debt (including Guarantees of any Debt of a Third Person and Capitalized Lease Obligations) of FRP with an outstanding aggregate principal amount not at any time in excess of $50,000,000 which shall, except for Liens of Capitalized Lease Obligations permitted by Section 5.2(d)(ii) or (vii), be unsecured; (x) additional Debt of FRP fully subordinated to the Loans on terms approved by the Administrative Agent, the net proceeds of which shall, to the extent required by Section 2.7(b), permanently reduce the Commitments and be applied to repay any outstanding Loans; and (xi) the Guarantee of the FM Properties Indebtedness (not in excess of $68,811,000 aggregate principal amount) by FTX pursuant to the FTX Guaranty Agreement and FTX's own direct non- principal and interest obligations (including joint and several liability with FM Properties) under the FM Credit Agreement and the documentation evidencing the other FM Indebtedness. (h) Debt to Capital Ratio. FRP shall not permit its Debt to Capital Ratio to exceed 65% at the end of any fiscal quarter. (i) Subordinated Debt Payments. The Borrowers and the Restricted Subsidiaries shall not, directly or indirectly, make any principal payment on, or repurchase of, any subordinated debt referred to in clauses (ii) and (x) of Section 5.2(g) with proceeds of the Loans. (j) Ownership of Subsidiaries. FTX shall not at any time directly or indirectly own shares or units of voting stock or interests having on a fully diluted basis less than (x) 50.1% ownership interest in FRP and (y) such voting power as provides effective control of the policy and direction of FRP. FRP shall not at any time directly or indirectly have less than a 50.1% interest on a fully diluted basis in Main Pass or less than the applicable ownership percentage on a fully diluted basis of IMC-Agrico set forth on Schedule IX hereto. FTX shall own its interests in FRP and Agrico LP, and FRP shall own its interests in Main Pass and IMC-Agrico (including its interest in Agrico LP), free and clear of all Liens, except as contemplated by Section 3.1(o) and Section 5.2(d)(viii). The Borrowers shall promptly notify the Administrative Agent in the event there occurs any significant decrease in such ownership of FRP by FTX and of Main Pass and IMC-Agrico by FRP below that indicated in the most recent version of Schedule III and of any decrease in such voting control or ownership percentage interest below 50.1% or the required percentage set forth on Schedule IX hereto, as applicable, in each case on a fully diluted basis. The ownership by FTX of equity interests in FRP shall be direct and not through any intervening entity. The ownership by (i) FRP of its interests in Main Pass and the FRP Partner and (ii) by the FRP Partner of its interests in IMC-Agrico shall each be direct and not through any intervening entity. (k) Fiscal Year. Each Borrower shall not change its fiscal year to end on any date other than December 31. (l) Investments in Nonrestricted Subsidiaries and Persons Not Subsidiaries. The Borrowers and their Restricted Subsidiaries shall not make or permit to exist (x) any Guarantee by it or a Restricted Subsidiary or IMC-Agrico of the Debt of any Person which is not IMC-Agrico (but in the case of IMC-Agrico, only to the extent permitted by Section 5.2(r)) or a Restricted Subsidiary, including Nonrestricted Subsidiaries, FCX and FI (each such Person being a "Third Party") in excess of available amounts of Debt of FRP permitted under Section 5.2(g)(ix), or (y) any loans or advances to, or purchase any stock, other securities or evidences of indebtedness of, or permit to exist any investment (whether by transfer of assets or otherwise) or acquire any investment whatsoever in or any other payment for the benefit of, any Third Parties the aggregate outstanding amount of which under this clause (y) at any time exceeds by more than $50,000,000 the largest aggregate amount thereof outstanding at any time in FTX's preceding fiscal year; provided that, notwithstanding the provisions of clauses (x) and (y) above, (i) FTX (but not any Restricted Subsidiary, including FRP, nor IMC-Agrico) may Guarantee (or be jointly and severally liable with FM Properties for) the FM Properties Indebtedness as permitted by Section 5.2(g)(x) on the terms of the agreements set forth on Schedule VII hereto and provide an environmental indemnity pursuant to the FM Credit Agreement, (ii) the Borrowers and the Restricted Subsidiaries may make investments as permitted under Section 5.2(r), (iii) FTX may make term loans of up to $10,000,000 to FM Properties and (iv) the Borrowers and the Restricted Subsidiaries may invest in Permitted Investments all of which shall not be included in the calculation of such $50,000,000 annual limit. (m) Federal Reserve Regulations. The Borrowers will not, and will cause their Subsidiaries not to, use the proceeds of any Loan in any manner that would result in a violation of, or be inconsistent with, the provisions of Regulations G, U or X. The Borrowers will not, and will cause their Subsidiaries not to, take any action at any time that would (A) result in a violation of the substitution and withdrawal requirements of said Regulations, in the event the same should become applicable to this Agreement or any Loan or (B) cause the representation and warranty contained in Section 3.1(h) at any time to be other than true and correct. In the event that the Borrowers at any time believe that there exists a reasonable possibility that they will become unable to make the representation set forth in Section 3.1(h)(iv), and alternative methods for complying the Margin Regulations in connection with this Agreement are available, the banks and the Borrowers shall promptly enter into negotiations with a view to amending this Agreement to provide for such alternative methods of compliance. (n) Certain Debt Agreements. FRP shall not, without the prior written consent thereto of the Required Banks, amend, supplement or change in any material manner, any of the terms or provisions of any agreement, note or other instrument governing or evidencing its 8-3/4% Senior Subordinated Notes Due 2004 which would shorten the maturity, change the amortization schedule or increase the cost of such Debt to FRP. (o) FRP Transfers. FRP shall not make any contribution or transfer of any substantial portion of its assets to any Restricted Subsidiary other than a Wholly-Owned Restricted Subsidiary all equity in which shall be pledged pursuant to the FRP Security Agreement to the FRP Collateral Agent as additional security for the Loans to FRP. (p) Transactions with Affiliates. Other than the transactions constituting the Restructuring, the Borrowers and their Restricted Subsidiaries shall not sell or transfer any property or assets to, or purchase or acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates (other than among Wholly-Owned Restricted Subsidiaries), except that as long as no Default or Event of Default shall have occurred and be continuing, the Borrowers or any Restricted Subsidiary may engage in any of the foregoing transactions (i) in the case of a transaction between a Borrower or a Restricted Subsidiary of a Borrower and a non-Wholly-Owned Restricted Subsidiary, the relevant Borrower has determined that such transaction is in the best interests of such Borrower and (ii) in the case of any other transaction between a Borrower or a Restricted Subsidiary and an Affiliate which is not a Restricted Subsidiary, at prices and on terms and conditions not less favorable to the Borrower or such Restricted Subsidiary than could be obtained on an arm's-length basis from unrelated third parties. (q) Equity Payments. The Borrowers shall not make an Equity Payment if there is then continuing any Default or Event of Default (or a Default or Event of Default would result therefrom or exist after giving effect thereto). (r) Covenants Regarding IMC-Agrico. (i) The Borrowers and their Restricted Subsidiaries shall not make or permit to exist any loans or advances to, or purchase any stock, other securities or evidences of indebtedness of, or permit to exist any investment whatsoever in or make any Guarantee with respect to any such loans, advances, purchases, investments or acquisitions of interest made by any Person with respect to, or any other payment for the benefit of, IMC-Agrico the aggregate outstanding amount of which exceeds by more than $50,000,000 the largest aggregate amount thereof outstanding at any time in FTX's preceding fiscal year. (ii) FRP shall not permit IMC-Agrico to incur Debt in excess of $225,000,000 at any time outstanding, of which Debt owing to any Persons other than FRP, any Restricted Subsidiary of FRP, IMC and any Subsidiary of IMC ("Third Party Debt")(x) shall not at any time exceed $110,000,000 and (y) may be secured only by accounts receivable and inventory of IMC-Agrico; provided that (A) the $25,000,000 principal amount of Parish of St. James, Louisiana, 7.7% Solid Waste Disposal Revenue Bonds, Series 1992 (and any refunding thereof) may be secured by the assets securing such Bonds as of the Closing Date and (B) other Third Party Debt of IMC-Agrico not in excess of $50,000,000 aggregate principal amount may be secured by any other assets of IMC-Agrico. (iii) FRP (A) shall not permit the FRP Partner to agree, without the prior written consent of the Required Banks, (x) to amend Section 6.04(a), (b) or (d) or Section 6.07 of the IMC-Agrico Partnership Agreement or any defined term included in either such Section or (y) to enter into any agreement which conflicts with either Section which would in the case of either (x) or (y) dilute the control of FRP Partner or narrow the scope of the decisions subject to vote or approval by FRP Partner, (B) shall not consent to any material change in the nature of business conducted by IMC-Agrico, (C) shall notify the Administrative Agent of any proposed amendment to any of the IMC-Agrico Partnership Agreement or any other material agreement relating to IMC-Agrico and shall provide a copy of any such proposed amendment to the Administrative Agent and (D) shall not, and shall not permit its Subsidiaries to, in each case without the prior written consent of the Required Banks, agree to amend any such agreement if, in the opinion of the Administrative Agent, such amendment could reasonably be expected to result in a Material Adverse Effect. (iv) Neither FTX nor FRP shall permit its accounting for IMC-Agrico to be other than as a proportional consolidating interest unless the Borrowers and the Required Banks have agreed upon mutually acceptable amendments to the financial covenants herein. (v) FTX and FRP shall, to the full extent of their direct or indirect rights and approvals under the IMC-Agrico Partnership Agreement, their direct or indirect membership on the Policy Committee for IMC- Agrico and otherwise pursuant to their ownership interests in IMC-Agrico and IMC-Agrico MP, use their best efforts to cause IMC-Agrico to comply (and shall not approve or consent to any non-compliance by IMC- Agrico) with the provisions of Sections 5.1(b), 5.1(c), 5.1(d), 5.1(g), 5.1(i), 5.1(j), 5.2(a), 5.2(d) (with the liens securing third-party Debt of IMC-Agrico pursuant to Section 5.2(r)(ii)(y) permitted and excluding clauses (ii), (iv), (v), (vi) and (viii) from Section 5.2(d) as applied to IMC-Agrico pursuant to this Section 5.2(r)(v)) and 5.2(p) as if IMC-Agrico were a Restricted Subsidiary; provided that, subject to Section 7.1(g), (h), (i), (j) and (k), FRP shall not be in Default under this Section 5.2(r)(v) if IMC causes IMC-Agrico to fail to comply with such Sections and FRP has not approved or consented to such non-compliance. (s) Scope of FRP's Business. FRP shall not materially alter the nature of the business and activities in which it is engaged as of the Closing Date. (t) Covenants Relating to RTZ Transaction. Without the prior written consent of the Required Banks, FTX shall not, directly or indirectly, (i) enter into any amendment or modification of any of the Stock Purchase Agreement which would impair the ability of the Borrowers or the Restricted Subsidiaries to perform all of their respective obligations under the Loan Documents, (ii) consent to any assignment by RTZ, RTZ Indonesia or RTZ America of the Stock Purchase Agreement or their respective obligations thereunder or (iii) waive any material default by RTZ, RTZ Indonesia or RTZ America. Subject to the foregoing and the other terms of the Loan Documents, FTX may enter into and perform its obligations under the Stock Purchase Agreement. ARTICLE VI Conditions to Credit Events SECTION 6.1. Conditions Precedent to Each Credit Event. Each Credit Event shall be subject to the following conditions precedent: (i) the representations and warranties on the part of FTX and FRP contained in the Loan Documents shall be true and correct in all material respects at and as of the date of such Credit Event as though made on and as of such date; (ii) the Administrative Agent shall have received a notice of such borrowing as required by Section 2.3; (iii) no Event of Default shall have occurred and be continuing on the date of such Credit Event or would result from such Credit Event; (iv) the Loans to be made by the Banks on such date, and the use of the proceeds thereof and the security arrangements contemplated hereby shall not result in a violation of Regulation U, Regulation G or Regulation X, as in effect on the date of such borrowing. If required by Regulation U as a result of such use of proceeds, FTX shall have delivered to the Bank a statement in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U. (v) there shall have been no amendments to the Certificate of Incorporation or the Certificate of Limited Partnership, as applicable, or to the By-laws or Partnership Agreement, as applicable, of FTX or FRP since the date of the Certificates furnished by the Borrowers on the Funding Date, other than amendments, if any, copies of which have been furnished to the Administrative Agent; and (vi) there shall be no proceeding for the dissolution or liquidation of FTX or FRP or any proceeding to revoke the Certificate of Incorporation of FTX or to rescind the partnership agreement of FRP or its respective corporate or partnership existence, which is pending or, to the knowledge of the Borrowers, threatened against or affecting FTX or FRP. SECTION 6.2. Representations and Warranties with Respect to Credit Events. Each Credit Event shall be deemed a representation and warranty by the Borrowers that the conditions precedent to such Credit Event, unless otherwise waived in accordance herewith, shall have been satisfied. ARTICLE VII Events of Default SECTION 7.1. Events of Default. If any of the following acts or occurrences (an "Event of Default") shall occur and be continuing: (a) default for three or more days in the payment when due of any principal of any Loan; or (b) default for five or more days in the payment when due of any interest on any Loan, or of any other amount payable under the Loan Documents; or (c) any representation or warranty made or deemed made in or in connection with any Loan Document or in any certificate, letter or other writing or instrument furnished or delivered to the Banks or the Agents pursuant to any Loan Document shall prove to have been incorrect in any material respect when made or effective or reaffirmed and repeated, as the case may be; or (d) default by FTX or FRP in the due observance or performance of any covenant, condition or agreement in Section 5.1(a)(4) with respect to notices of Defaults or Events of Default, 5.1(c) or 5.1(k) of this Agreement, other than the covenant to preserve and maintain all of such Person's rights, privileges and franchises desirable in the normal conduct of its business; or (e) default by the Borrowers or any Restricted Subsidiary in the due observance or performance of any covenant, condition or agreement in Section 5.2 of this Agreement other than Section 5.2(k); or (f) default by the Borrowers or any Restricted Subsidiary in the due observance or performance of any other covenant, condition or agreement in the Loan Documents which shall remain unremedied for 30 days after written notice thereof shall have been given to such Borrower by the Administrative Agent or any Bank; or (g) either Borrower or any Restricted Subsidiary or IMC-Agrico shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, liquidation or similar law, (ii) consent to the institution of, or fail to contravene in a timely and appropriate manner, any proceeding or the filing of any petition described in clause (h) below, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for such Borrower or such Restricted Subsidiary or IMC-Agrico or for a substantial part of its property or assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debt as they become due or (vii) take any action for the purpose of effecting any of the foregoing; or (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of either Borrower or any Restricted Subsidiary or IMC- Agrico, or of a substantial part of the property or assets of either Borrower or any Restricted Subsidiary or IMC-Agrico, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official for either Borrower or any Restricted Subsidiary or IMC-Agrico or for a substantial part of the property of either Borrower or any Restricted Subsidiary or IMC-Agrico or (iii) the winding-up or liquidation of a Borrower or any Restricted Subsidiary or IMC-Agrico; and such proceeding or petition shall continue undismissed for 60 days, or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for 30 days; or (i) default shall be made with respect to (x) the Pennzoil Obligations or (y) Hedge Agreements or (z) any Debt of either Borrower or any Restricted Subsidiary or IMC-Agrico if the effect of any such default shall be to accelerate, or to permit the holder or obligee of any such obligations or Debt (or any trustee on behalf of such holder or obligee) to accelerate (with or without notice or lapse of time or both), the maturity of such Debt, the payment of any net termination value in respect of Hedge Agreements and/or the payment of the Pennzoil Obligations, as applicable, in an aggregate amount in excess of $10,000,000; or any payment, regardless of amount, of (A) net termination value on any such obligation in respect of Hedge Agreements, (B) any deferred purchase amount on the Pennzoil Obligations and/or (C) any Debt of either Borrower or a Restricted Subsidiary or of IMC-Agrico, as applicable, in an aggregate principal amount (or in the case of a Hedge Agreement, net termination value) in excess of $10,000,000, shall not be paid when due, whether at maturity, by acceleration or otherwise (after giving effect to any period of grace specified in the instrument evidencing or governing such Debt or other obligation); or (j) an ERISA Event shall have occurred with respect to any Plan or Multi-Employer Plan that, when taken together with all other ERISA Events, reasonably could be expected to result in liability of either Borrower and/or any Restricted Subsidiary and the Borrowers' ERISA Affiliates in an aggregate amount exceeding $25,000,000 or requires payments exceeding $10,000,000 in any year; or (k) one or more judgments for the payment of money in an aggregate amount in excess of $10,000,000 shall be rendered by a court or other tribunal against either Borrower or any Restricted Subsidiary or IMC-Agrico and shall remain undischarged for a period of 45 consecutive days during which execution of such judgment shall not have been effectively stayed; or any action shall be legally taken by a judgment creditor to levy upon assets or properties of either Borrower or any Restricted Subsidiary to enforce any such judgment; or (l) any security interest purported to be created by either Security Agreement shall cease to be, or shall be asserted by the Borrowers or any of their Affiliates not to be, a valid, perfected, first priority security interest in the securities, assets or properties covered thereby, except to the extent that any such loss of perfection or priority results from the failure of the FTX Collateral Agent or the FRP Collateral Agent to maintain possession of certificates representing securities pledged under the Security Agreements to the extent that such pledged securities are certificated securities; or (m) there shall have occurred a Change in Control; then, and in any such event (other than an event with respect to either Borrower described in paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Banks shall, by written, telecopied, telex or telegraphic notice to the Borrowers, take one or more of the following actions at the same or different times: (i) declare the Total Commitment to be terminated, whereupon the Total Commitment shall forthwith terminate; (ii) declare the Loans and all other sums then owing by the Borrowers under the Loan Documents to be forthwith due and payable, whereupon all the principal of the Loans so declared to be due and payable, together with accrued interest thereon and any unpaid accrued fees and all other liabilities of the Borrowers accrued hereunder and under any other Loan Document, shall become and be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by each Borrower, anything contained herein or in any Promissory Note to the contrary notwithstanding or (iii) exercise any or all the remedies then available under the Security Agreements; provided, however, that upon the occurrence of any event described in paragraph (g) or (h) of this Section 7.1 as to which a Borrower is the entity involved, the Commitments will forthwith terminate and all sums then owing by the Borrowers to the Banks upon the Promissory Notes or otherwise hereunder shall, without any declaration or other action by any Bank or Agent hereunder, be immediately due and payable and the Total Commitment hereunder shall be immediately terminated without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Borrower, anything contained herein or in any Promissory Note or other Loan Document to the contrary notwithstanding. Promptly following the making of any such declaration, the Administrative Agent shall give notice thereof to the Borrowers but failure to do so shall not impair the effect of such declaration. ARTICLE VIII The Agents SECTION 8.1. The Agents. (a) For convenience of administration and to expedite the transactions contemplated by this Agreement, Chemical is hereby appointed as Administrative Agent, FTX Collateral Agent and FRP Collateral Agent for the Banks under this Agreement and the Security Agreements and Chase is hereby appointed as the Documentary Agent for the Banks under this Agreement. None of the Agents shall have any duties or responsibilities with respect hereto except those expressly set forth herein or in the other Loan Documents. Each Bank, and each subsequent holder of any Promissory Note by its acceptance thereof, hereby irrevocably appoints and expressly authorizes the Agents, without hereby limiting any implied authority, to take such action as the Agents may deem appropriate on its behalf and to exercise such powers under this Agreement as are specifically delegated to such Person by the terms hereof, together with such powers as are reasonably incidental thereto. The Administrative Agent is hereby expressly authorized by the Banks, without hereby limiting any implied authority, (a) to receive on behalf of the Banks all payments of principal of and interest on the Loans and all other amounts due to the Banks hereunder, and promptly to distribute to each Bank its proper share of each payment so received; (b) to give notice on behalf of the Banks to the Borrowers of any Event of Default specified in this Agreement of which the Administrative Agent has actual knowledge acquired in connection with its agency hereunder or as directed by the Required Banks; and (c) to distribute to each Bank copies of all notices, financial statements and other materials delivered by the Borrowers pursuant to this Agreement as received by the Administrative Agent. Without limiting the generality of the foregoing, the Collateral Agents are hereby expressly authorized to execute any and all documents (including releases) with respect to the collateral under the Security Agreements and the rights of the secured parties with respect thereto, as contemplated by and in accordance with the provisions of this Agreement and the Security Agreements. Each of the Agent and the Collateral Agents may exercise any of its duties hereunder by or through their respective agents, officers or employees. In addition, each Bank hereby irrevocably authorizes and directs the Collateral Agents to enter, on behalf of each of them, into the FTX Intercreditor Agreement (in the case of the FTX Collateral Agent) and the Security Agreements as contemplated pursuant to this Agreement. (b) None of the Agents or any of their respective directors, officers, agents or employees shall be liable as such for any action taken or omitted to be taken by any of them except for its or his own gross negligence or wilful misconduct, or be responsible for any statement, warranty or representation herein or the contents of any document delivered in connection herewith, or be required to ascertain or to make any inquiry concerning the performance or observance by the Borrowers or any other party of any of the terms, conditions, covenants or agreements contained in any Loan Document. The Agents shall not be responsible to the Banks or the holders of the Notes for the due execution, genuineness, validity, enforceability or effectiveness of this Agreement, the Notes or any other Loan Documents or other instruments or agreements. The Administrative Agent may deem and treat the payee of any Promissory Note as the owner thereof for all purposes hereof until it shall have received from the payee of such Promissory Note notice, given as provided herein, of the transfer thereof in compliance with Section 9.3. The Agents shall in all cases be fully protected in acting, or refraining from acting, in accordance with written instructions signed by the Required Banks and, except as otherwise specifically provided herein, such instructions and any action or inaction pursuant thereto shall be binding on all the Banks and each subsequent holder of any Promissory Note. Each Agent shall, in the absence of knowledge to the contrary, be entitled to rely on any instrument or document believed by it in good faith to be genuine and correct and to have been signed or sent by the proper Person or Persons. None of the Agents nor any of their respective directors, officers, employees or agents shall have any responsibility to the Borrowers or any other party on account of the failure of or delay in performance or breach by any Bank of any of its obligations hereunder or to any Bank on account of the failure of or delay in performance or breach by any other Bank or the Borrowers or any other party of any of their respective obligations hereunder or under any other Loan Document or in connection herewith or therewith. Each of the Agents may execute any and all duties hereunder by or through agents or employees and shall be entitled to rely upon the advice of legal counsel selected by it with respect to all matters arising hereunder and shall not be liable for any action taken or suffered in good faith by it in accordance with the advice of such counsel. The Banks hereby acknowledge that none of the Agents shall be under any duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement unless it shall be requested in writing to do so by the Required Banks. (c) To the extent that any Agent shall not be reimbursed by the Borrowers for any costs, liabilities or expenses incurred in such capacity, each Bank agrees (i) to reimburse the Agents, on demand (in the amount of its Applicable Percentage hereunder) of any expenses incurred for the benefit of the Banks by the Agents, including counsel fees and compensation of agents and employees paid for services rendered on behalf of the Banks and (ii) to indemnify and hold harmless each Agent and any of its directors, officers, employees or agents, on demand, in the amount of such Applicable Percentage, from and against any and all liabilities, taxes, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against it in its capacity as Agent or any of them in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted by it or any of them under this Agreement or any other Loan Document; provided, however, that no Bank shall be liable to an Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or wilful misconduct of such Agent or of its directors, officers, employees or agents. (d) With respect to the Loans made by it hereunder and the Promissory Notes issued to it, each Agent in its individual capacity and not as Agent shall have the same rights and powers as any other Bank and may exercise the same as though it were not an Agent, and the Agents and their Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if it were not an Agent. (e) Subject to the appointment and acceptance of a successor Agent as provided below, any Agent may resign at any time by giving written notice thereof to the Banks and the Borrowers. Upon any such resignation, the Required Banks shall have the right to appoint, and the Borrowers shall have the right to approve (such approval not to be unreasonably withheld or delayed) a successor Administrative Agent, Collateral Agent or Documentary Agent, as the case may be. If no successor Agent, Collateral Agent or Documentary Agent, as the case may be, shall have been so appointed and approved and shall have accepted such appointment, within 30 days after the retiring Agent's giving of notice of resignation, then the retiring Person may, on behalf of the Banks, appoint a successor Administrative Agent, Collateral Agent or Documentary Agent, as the case may be, which shall be a Bank with an office in New York, New York, having a combined capital and surplus of at least $500,000,000 or an Affiliate of any such Bank. Upon the acceptance of any appointment as Administrative Agent, Collateral Agent or Documentary Agent hereunder by a successor Administrative Agent, Collateral Agent or Documentary Agent, as the case may be, such successor Administrative Agent, Collateral Agent or Documentary Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall from and after such date be discharged from its duties and obligations hereunder. After any such retiring Agent's resignation hereunder as Administrative Agent, Collateral Agent or Documentary Agent, as applicable, the provisions of this Article VIII and Section 9.4 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was acting as the Administrative Agent, Collateral Agent or Documentary Agent, as applicable. (f) The Administrative Agent and the Documentary Agent shall be responsible for supervising the preparation, execution and delivery of this Agreement and the other agreements and instruments contemplated hereby, any amendment or modification thereto and the closing of the transactions contemplated hereby and thereby. In addition, the Administrative Agent shall assist each Collateral Agent in the performance of its duties as may be reasonably requested by such Collateral Agent from time to time. (g) The obligations of the Administrative Agent, each Collateral Agent and the Documentary Agent shall be separate and several and neither of them shall be responsible or liable for the acts or omissions of the other, except, to the extent that any such Agent serves in more than one agent capacity, such Agent shall be responsible for the acts and omissions relating to each such agency function. (h) Without the prior written consent of the Required Banks, the Administrative Agent and the FTX Collateral Agent will not consent to any modification, supplement or waiver of the FTX Intercreditor Agreement or, except to the extent required by the FTX Intercreditor Agreement, the FTX Security Agreement and the FRP Collateral Agent will not consent to any modification, supplement or waiver of the FRP Security Agreement. (i) Each Bank acknowledges that it has, independently and without reliance upon the Agents or any other Bank and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Agents or any other Bank and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement or any other Loan Document, any related agreement or any document furnished hereunder or thereunder. ARTICLE IX Miscellaneous SECTION 9.1. Notices. Notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight or same day courier service or mailed or sent by telex, telecopy, graphic scanning or other telegraphic communications equipment of the sending party to the appropriate party's address set forth on the signature pages hereof; provided that notices by or to FRP may be given by or to FTX as its general partner, and notices stated to be given by or to the "Borrowers" may be given by or to FTX on behalf of both Borrowers. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if hand delivered or delivered by any telecopy, telegraphic or telex communications equipment or three days after being sent by registered or certified mail, postage prepaid, return receipt requested, in each case addressed to such party as provided in this Section 9.1 or in accordance with the latest unrevoked direction from such party. SECTION 9.2. Survival of Agreement. All covenants, agreements, representations and warranties made by the Borrowers herein and in the certificates or other instruments prepared or delivered in connection with this Agreement or any other Loan Document shall be considered to have been relied upon by the Banks and the Agents and shall survive the making by the Banks of the Loans and the execution and delivery to the Banks of the Promissory Notes evidencing such Loans regardless of any investigation made by the Banks or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Note, any Commitment Fee or any other fee or amount payable under the Loan Documents is outstanding and unpaid and so long as the Commitments have not been terminated. SECTION 9.3. Successors and Assigns; Participation; Purchasing Banks. (a) This Agreement shall be binding upon and inure to the benefit of FTX, FRP, the Banks, the Agents, all future holders of the Promissory Notes, and their respective successors and assigns, except that neither FTX nor FRP may assign, delegate or transfer any of its rights or obligations under this Agreement without the prior written consent of each Bank. Any Bank may at any time pledge or assign all or any portion of its rights under this Agreement and the Promissory Notes issued to it to a Federal Reserve Bank to secure extensions of credit by such Federal Reserve Bank to such Bank; provided that no such pledge or assignment shall release a Bank from any of its obligations hereunder or substitute any such Federal Reserve Bank for such Bank as a party hereto. (b) Any Bank may, in accordance with applicable law, at any time sell to one or more banks or other entities ("Participants") participating interests in all or a portion of any Loan owing to such Bank, any Promissory Note held by such Bank, any Commitment of such Bank or any other interest of such Bank hereunder. In the event of any such sale by a Bank of participating interests to a Participant, such Bank's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Bank shall remain solely responsible for the performance thereof, such Bank shall remain the holder of any such Promissory Note for all purposes under this Agreement and the Borrowers and the Agents shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. The Borrowers agree that if amounts outstanding under this Agreement and the Promissory Notes are due and unpaid, or shall have been declared due or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement and any Promissory Note to the same extent as if the amount of its participating interest were owing directly to it as a Bank under this Agreement or any Promissory Note; provided that such right of setoff shall be subject to the obligation of such Participant to share with the Banks, and the Banks agree to share with such Participant, as provided in Section 2.15. The Borrowers also agree that each Participant shall be entitled to the benefits of Sections 2.11, 2.12, 2.13, 2.15, 2.17 and 9.5 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it were a Bank; provided that no Participant shall be entitled to receive any greater payment pursuant to such Sections than the transferor Bank would have been entitled to receive in respect of the amount of the participation transferred by such transferor Bank to such Participant unless such participation shall have been made at a time when the circumstances giving rise to such greater payment did not exist; and provided that the voting rights of any Participant would be limited to amendments, modifications or waivers decreasing any fees payable hereunder or the amount of principal of or the rate at which interest is payable on the Loans, extending any scheduled principal payment date or date fixed for the payment of interest on the Loans, changing or extending the Commitments or release of all or substantially all the collateral for the Loans. (c) Any Bank may, in accordance with applicable law and subject to Section 9.3(h), at any time assign by novation all or any part of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it and the Promissory Notes held by it) (I) to any Bank or any Affiliate thereof, without the Borrowers' consent, or (II) to one or more additional banks or financial institutions (any such entity referred to in clause (I) or (II) being a "Purchasing Bank") with the consent of the Administrative Agent and the Borrowers, such consent not to be unreasonably withheld (it being understood that the Borrowers may withhold their consent to a Purchasing Bank (i) which is not a commercial bank or savings and loan institution or (ii) which would, as of the effective date of such assignment, be entitled to claim compensation under Section 2.11 which the transferor Bank would not be entitled to claim as of such date), pursuant to a Commitment Transfer Supplement in the form of Exhibit D, executed by such Purchasing Bank and such transferor Bank (and, in the case of a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Borrowers and the Administrative Agent), and delivered for its recording in the Register to the Administrative Agent, together with the Promissory Notes subject to such assignment, the registration and processing fee required by Section 9.3(e) and an Administrative Questionnaire for the Purchasing Bank if it is not already a Bank. Assignments shall be by novation only and a proportionate interest in the Loans and Commitments to both FRP and FTX (and the related Promissory Notes) must be assigned. Upon such execution, delivery and recording (and, if required, consent of the Borrowers and the Administrative Agent), from and after the Transfer Effective Date determined pursuant to such Commitment Transfer Supplement (which shall be at least five days after the execution and delivery thereof), (x) the Purchasing Bank thereunder shall (if not already a party hereto) be a party hereto and have the rights and obligations of a Bank hereunder with a Commitment as set forth in such Commitment Transfer Supplement, and (y) the transferor Bank thereunder shall, to the extent assigned by such Commitment Transfer Supplement, be released from its obligations under this Agreement (and, in the case of a Commitment Transfer Supplement covering all or the remaining portion of a transferor Bank's rights and obligations under this Agreement, such transferor Bank shall cease to be a party hereto). Such Commitment Transfer Supplement shall be deemed to amend this Agreement (including Schedule II hereto) to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Bank (if not already a party hereto) and the resulting adjustment of Applicable Percentages arising from the purchase by such Purchasing Bank of all or a portion of the rights and obligations of such transferor Bank under this Agreement and the Promissory Notes. On or prior to the Transfer Effective Date determined pursuant to such Commitment Transfer Supplement, each Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Promissory Note a new Promissory Note to the order of such Purchasing Bank in an amount equal to the Commitment assumed by it pursuant to such Commitment Transfer Supplement (in the case of FTX, such Purchasing Bank's Applicable Percentage of the lesser of (A) $75,000,000 and (B) the portion of the then effective Total Commitment which may be used for borrowings by FTX) and, if the transferor Bank has retained a Commitment hereunder, a new Promissory Note to the order of the transferor Bank in an amount equal to the Commitment retained by it hereunder (in the case of FTX, such transferor Bank's Applicable Percentage of the lesser of (X) $75,000,000 and (Y) the portion of the then effective Total Commitment which may be used for borrowings by FTX). Such new Promissory Notes shall be dated the Closing Date and shall otherwise be in the form of the Promissory Notes replaced thereby. The Promissory Notes surrendered by the transferor Bank shall be returned by the Administrative Agent to the Borrowers marked "canceled". (d) The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices in The City of New York a copy of each Commitment Transfer Supplement delivered to it and a register (the "Register") for the recordation of the names and addresses of the Banks and the Commitment of, and principal amount of the Loans owing to, each Bank from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and the parties hereto may treat each Person whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes of this Agreement. The Register shall be available for inspection by the parties hereto at any reasonable time and from time to time upon reasonable prior notice. (e) Upon its receipt of a Commitment Transfer Supplement executed by a transferor Bank and a Purchasing Bank (and, in the case of a Purchasing Bank that is not then a Bank or an affiliate thereof, by the Borrowers and the Administrative Agent) together with payment to the Administrative Agent of a registration and processing fee of $3,500, the Administrative Agent shall (i) promptly accept such Commitment Transfer Supplement and (ii) on the Transfer Effective Date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Banks and the Borrowers. (f) Subject to Section 9.15, the Borrowers authorize each Bank to disclose to any Participant or Purchasing Bank (each, a "Transferee") and any prospective Transferee any and all financial and other information in such Bank's possession concerning the Borrowers and its Affiliates which has been delivered to such Bank by or on behalf of the Borrowers pursuant to this Agreement or which has been delivered to such Bank by or on behalf of the Borrowers in connection with such Bank's credit evaluation of the Borrowers and their Affiliates prior to becoming a party to this Agreement. (g) If, pursuant to this Section 9.3, any interest in this Agreement or any Promissory Note is transferred to any Transferee which is organized under the laws of any jurisdiction other than the United States or any State thereof, the transferor Bank (x) shall immediately notify the Administrative Agent of such transfer, describing the terms thereof and indicating the identity and country of residence of each Transferee. Such transferor Bank or Transferee shall indemnify and hold harmless the Borrowers and the Administrative Agent from and against any tax, interest, penalty or other expense that the Borrowers and the Administrative Agent may incur as a consequence of any failure to withhold United States taxes applicable because of any transfer or participation arrangement that is not fully disclosed to them as required hereunder. (h) By executing and delivering a Commitment Transfer Supplement, the transferor Bank thereunder and the Purchasing Bank thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such transferor Bank warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that its Commitment, and the outstanding balance of its Loans, in each case without giving effect to assignments thereof which have not become effective, are as set forth in such Commitment Transfer Supplement, (ii) except as set forth in (i) above, such transferor Bank makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto, or the financial condition of the Borrowers or any Subsidiary or the performance or observance by the Borrowers or any Subsidiary of any of its obligations under this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto; (iii) such Purchasing Bank represents and warrants that it is legally authorized to enter into such Commitment Transfer Supplement; (iv) such Purchasing Bank confirms that it has received a copy of this Agreement, together with copies of the most recent financial statements, if any, delivered pursuant to Section 5.1 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Commitment Transfer Supplement; (v) such Purchasing Bank will independently and without reliance upon the Agents, such transferor Bank or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (vi) such Purchasing Bank appoints and authorizes the Agents to take such action as agent on its behalf and to exercise such respective powers under this Agreement and the other Loan Documents as are delegated to the Agents by the terms hereof, together with such powers as are reasonably incidental thereto; and (vii) such Purchasing Bank agrees that it will perform in accordance with their terms all the obligations which by the terms of this Agreement are required to be performed by it as a Bank. SECTION 9.4. Expenses of the Banks; Indemnity. (a) The Borrowers agree, jointly and severally, to pay all out-of-pocket expenses reasonably incurred by the Agents in connection with the preparation and administration of this Agreement, the Promissory Notes and the other Loan Documents or with any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions hereby contemplated shall be consummated) or reasonably incurred by the Agents or any Bank in connection with the enforcement or protection of their rights in connection with this Agreement and the other Loan Documents or with the Loans made or the Promissory Notes issued hereunder (whether through negotiations, legal proceedings or otherwise), including, but not limited to, the reasonable fees and disbursements of Cravath, Swaine & Moore, special counsel for the Agents, and, in connection with such enforcement or protection, the reasonable fees and disbursements of other counsel for any Bank. The Borrowers further jointly and severally agree that they shall indemnify the Banks and the Agents from and hold them harmless against any documentary taxes, assessments or charges made by any Governmental Authority by reason of the execution and delivery of or in connection with the performance of this Agreement, any of the Promissory Notes or any of the other Loan Documents. Further, the Borrowers jointly and severally agree to pay, and to protect, indemnify and save harmless each Bank, each Agent and each of their respective officers, directors, shareholders, employees, agents and servants from and against, any and all losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, damages, costs or expenses (including, without limitation, attorneys' fees and expenses) in connection with any investigative, administrative or judicial proceeding, whether or not such Bank or Agent shall be designated a party thereto of any nature arising from or relating to (i) the execution or delivery of this Agreement or any other Loan Document or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder or the consummation of the transactions contemplated hereby and thereby (including the Restructuring) or (ii) the use of the proceeds of the Loans; and the Borrowers also jointly and severally agree to pay, and to protect, indemnify and save harmless each Bank, each Agent and each of their respective officers, directors, shareholders, employees, agents and servants from and against, any and all losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, damages, costs or expenses (including, without limitation, attorneys' fees and expenses in connection with any investigative, administrative or judicial proceeding, whether or not such Bank or Agent shall be designated a party thereto) of any nature arising from or relating to any actual or alleged presence or Release of Hazardous Materials on any property owned or operated by IMC-Agrico, the Borrowers or any of the Subsidiaries, or any Environmental Claim related in any way to IMC-Agrico, the Borrowers or the Subsidiaries or arising from or in connection with the environmental due diligence summary memorandum referred to in paragraph (m) of Article IV; provided that any such indemnity referred to in this sentence shall not, as to any indemnified Person, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non appealable judgment to have resulted from the gross negligence or wilful misconduct of such indemnified Person. If any action, suit or proceeding arising from any of the foregoing is brought against any Bank, Agent or other Person indemnified or intended to be indemnified pursuant to this Section 9.4, the Borrowers, to the extent and in the manner directed by such indemnified party, will resist and defend such action, suit or proceeding or cause the same to be resisted and defended by counsel designated by the Borrowers (which counsel shall be satisfactory to such Bank, Agent or other Person indemnified or intended to be indemnified). If the Borrowers shall fail to do any act or thing which it has covenanted to do hereunder or any representation or warranty on the part of the Borrowers contained in this Agreement shall be breached, any Bank or Agent may (but shall not be obligated to) do the same or cause it to be done or remedy any such breach, and may expend its funds for such purpose. Any and all amounts so expended by any Bank or Agent shall be repayable to it by the Borrowers immediately upon such Bank's or such Agent's demand therefor. (b) The provisions of this Section 9.4 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby or thereby, the repayment of any of the Loans or any Promissory Notes, the invalidity or unenforceability of any term or provision of this Agreement, any other Loan Document or any Promissory Note, or any investigation made by or on behalf of any Bank or any Agent. All amounts due under this Section 9.4 shall be payable on written demand therefor. SECTION 9.5. Right of Setoff. If an Event of Default shall have occurred and be continuing and the Loans shall have been accelerated or any Bank shall have requested the Administrative Agent to declare the Loans immediately due and payable pursuant to Article VII, then each Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of either Borrower against any of and all the obligations of such Borrower now or hereafter existing under this Agreement and the Promissory Notes held by such Bank, irrespective of whether or not such Bank shall have made any demand under this Agreement or such Promissory Notes and although such obligations may be unmatured. Each Bank agrees promptly to notify the Borrowers after any such setoff and application made by such Bank, but the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Bank under this Section 9.5 are in addition to other rights and remedies (including, without limitation, other rights of setoff) which such Bank may have. SECTION 9.6. APPLICABLE LAW. THIS AGREEMENT AND THE PROMISSORY NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 9.7. Waivers; Amendments. (a) No failure or delay of any Bank or Agent in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Banks and the Agents hereunder and under the other documents and agreements entered into in connection herewith are cumulative and not exclusive of any rights or remedies which they would otherwise have. No waiver of any provision of this Agreement, any other Loan Document or any Promissory Note or any other such document or agreement or consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be authorized as provided in paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any Borrower in any case shall entitle such Borrower to any other or further notice or demand in similar or other circumstances. Each holder of any of the Promissory Notes shall be bound by any amendment, modification, waiver or consent authorized as provided herein, whether or not such Promissory Note shall have been marked to indicate such amendment, modification, waiver or consent. (b) This Agreement and the Security Agreements (including any provision hereof or thereof) may not be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Banks; provided, however, that no such agreement shall (i) change the principal amount of, or extend or advance the maturity of or any date for the payment (other than pursuant to Section 2.7(b), which may be amended by the Required Banks) of any principal of or interest on, any Promissory Note (including, without limitation, any such payment pursuant to Section 2.7(c) or paragraph (a) or (b) of Section 2.9), or waive or excuse any such payment or any part thereof, or change the rate of interest on any Promissory Note, without the written consent of each holder affected thereby, (ii) change or extend the Commitment of any Bank without the written consent of such Bank, or change any fees to be paid to any Bank or Agent hereunder without the written consent of such Bank or the Agent, as applicable, (iii) amend or modify the provisions of this Section 9.7, Sections 2.8 through 2.15 or Section 9.4 or the definition of "Required Banks", without the written consent of each Bank or (iv) release the collateral granted as security under the Security Agreements (except as expressly required hereby or thereby), without the written consent of each Bank; and provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of an Agent hereunder without the written consent of such Agent. Each Bank and holder of any Promissory Note shall be bound by any modification or amendment authorized by this Section 9.7 regardless of whether its Promissory Notes shall be marked to make reference thereto, and any consent by any Bank or holder of a Promissory Note pursuant to this Section shall bind any Person subsequently acquiring a Promissory Note from it, whether or not such Promissory Note shall be so marked. SECTION 9.8. Severability. In the event any one or more of the provisions contained in this Agreement or in the Promissory Notes should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 9.9. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract, and shall become effective when copies hereof which, when taken together, bear the signatures of each of the parties hereto shall be delivered or mailed to the Administrative Agent and the Borrowers. SECTION 9.10. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. SECTION 9.11. Entire Agreement. This Agreement, the other Loan Documents, the fee letters between the Agents and the Borrowers and the exhibits and schedules hereto contain the entire agreement among the parties hereto with respect to the Loans and the related transactions. Any previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement, such fee letters and the other Loan Documents. Nothing in this Agreement or in the other Loan Documents, expressed or implied, is intended to confer upon any party other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents. SECTION 9.12. WAIVER OF JURY TRIAL, ETC. (A) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.12. (b) Except as prohibited by law, each party hereto hereby waives any right it may have to claim or recover in any litigation referred to in paragraph (a) of this Section 9.12 any special, indirect, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. (c) Each party hereto (i) certifies that no representative, agent or attorney of any Bank has represented, expressly or otherwise, that such Bank would not, in the event of litigation, seek to enforce the foregoing waivers and (ii) acknowledges that it has been induced to enter into this Agreement or any other document, as applicable, by, among other things, the mutual waivers and certifications herein. SECTION 9.13. Interest Rate Limitation. Notwithstanding anything herein or in the Promissory Notes to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the "Charges"), as provided for herein or in any other document executed in connection herewith, or otherwise contracted for, charged, received, taken or reserved by any Bank, shall exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for, charged, taken, received or reserved by such Bank in accordance with applicable law, the rate of interest in respect of such Loan hereunder or payable under the Promissory Note held by such Bank, together with all Charges payable to such Bank, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 9.13 shall be cumulated and the interest and Charges payable to such Bank in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Bank. SECTION 9.14. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (A) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY BANK OR AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. (B) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. (C) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.1. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. SECTION 9.15. Confidentiality. Each Bank agrees (which agreement shall survive the termination of this Agreement) that financial information, information from the Borrowers' and their Subsidiaries' books and records, information concerning the Borrowers' and their Subsidiaries' trade secrets and patents and any other information received from the Borrowers and their Subsidiaries hereunder shall be treated as confidential by such Bank, and each Bank agrees to use its best efforts to ensure that such information is not published, disclosed or otherwise divulged to anyone other than employees or officers of such Bank and its counsel and agents; provided that it is understood that the foregoing shall not apply to: (i) disclosure made with the prior written authorization of a Borrower; (ii) disclosure of information (other than that received from the Borrowers and their Subsidiaries prior to or under this Agreement) already known by, or in the possession of, such Bank without restrictions on the disclosure thereof at the time such information is supplied to such Bank by a Borrower or its Subsidiaries hereunder; (iii) disclosure of information which is required by applicable law or to a governmental agency having supervisory or regulatory authority over any party hereto; (iv) disclosure of information in connection with any suit, action or proceeding in connection with the enforcement of rights hereunder or in connection with the transaction contemplated hereby or thereby; (v) disclosure to any bank (or other financial institution) which may acquire a participation or other interest in the Loans or rights of any Bank hereunder; provided that such bank (or other financial institution) agrees to maintain any such information to be received in accordance with the provisions of this Section 9.15; (vi) disclosure by any party hereto to any other party hereto or their counsel or agents; (vii) disclosure by any party hereto to any entity, or to any subsidiary of such an entity, which owns, directly or indirectly, more than 50% of the voting stock of such party, or to any subsidiary of such an entity; or (viii) disclosure of information that prior to such disclosure has become public knowledge through no violation of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. FREEPORT-McMoRan INC., by /s/ R. Foster Duncan ______________________________ Name: R. Foster Duncan Title: Treasurer 1615 Poydras Street New Orleans, Louisiana 70112 Attention: R. Foster Duncan Treasurer Telex: 8109515386 Telephone: 504-582-4628 Telecopy: 504-582-4511 FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP, by FREEPORT McMoRan Inc., its Administrative Managing General Partner, by R. Foster Duncan ______________________________ Name: R. Foster Duncan Title: Treasurer 1615 Poydras Street New Orleans, Louisiana 70112 Attention: R. Foster Duncan Treasurer Telex: 8109515386 Telephone: 504-582-4628 Telecopy: 504-582-4511 CHEMICAL BANK, individually and as Administrative Agent, FTX Collateral Agent and FRP Collateral Agent, by /s/ R. Potter ______________________________ Name: Ronald Potter Title: Managing Director Domestic Office and LIBOR Office 270 Park Avenue New York, New York 10017 Attention: Ralph Iskander Telephone: 212-270-3977 Telecopy: 212-270-4711 with copies to: Stuart Miller Attention: Telephone: 212-270-3523 Telecopy: 212-270-2325 with copies to: Agent Bank Services 140 East 45th Street New York, New York 10017 Attention: Hilma Gabbidon Telephone: 212-622-0693 Telex: 353006 ABSCNYK Telecopy: 212-622-0002 THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), individually and as Documentary Agent, by /s/ Alexander S. Rapetski ________________________________ Name: Alexander S. Rapetski Title: Vice President DOMESTIC OFFICE AND LIBOR OFFICE: One Chase Manhattan Plaza (4th Floor) New York, NY 10081 Attention: Nicholas J. Chirekos Vice President Telephone: 212-552-2395 Telecopy: 212-552-7773 ADDRESS FOR NOTICES: One Chase Manhattan Plaza (4th Floor) New York, NY 10081 Attention: Vilma Francis Assistant Treasurer Telephone: 212-552-7883 Telecopy: 212-552-7175 EX-4 4 EXECUTION COPY____________________________________________________________ CREDIT AGREEMENT Dated as of June 30, 1995 Among FM PROPERTIES OPERATING CO., FREEPORT-McMoRan INC., FREEPORT-McMoRAN COPPER & GOLD INC., The Banks Named Herein, CHEMICAL BANK, as Administrative Agent and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Documentary Agent ____________________________________________________________ TABLE OF CONTENTS Page Parties and Recitals . . . . . . . . . . . . . . . . . 1 ARTICLE I Definitions Section 1.1. Definitions . . . . . . . . . . . . . . 2 Section 1.2. Accounting Terms . . . . . . . . . . . 23 Section, Article, Exhibit and Schedule Section 1.3. References, etc. . . . . . . . . . . 23 Section 1.4. Incorporated Agreements and Definitions 24 ARTICLE II The Loans Section 2.1. Revolving Credit Facility . . . . . . . 24 Section 2.2. Loans . . . . . . . . . . . . . . . . . 25 Section 2.3. Notice of Loans . . . . . . . . . . . . 26 Section 2.4. Promissory Notes . . . . . . . . . . . 27 Section 2.5. Interest on Loans . . . . . . . . . . . 28 Section 2.6. Fees . . . . . . . . . . . . . . . . . 28 Maturity and Reduction of Section 2.7. Commitments . . . . . . . . . . . . . 29 Interest on Overdue Amounts; Alternative Section 2.8. Rate of Interest . . . . . . . . . . 30 Section 2.9. Prepayment of Loans . . . . . . . . . . 31 Section 2.10. Continuation and Conversion of Loans . 32 Reserve Requirements; Change in Section 2.11. Circumstances . . . . . . . . . . . . 33 Section 2.12. Change in Legality . . . . . . . . . . 37 Section 2.13. Indemnity . . . . . . . . . . . . . . . 38 Section 2.14. Pro Rata Treatment . . . . . . . . . . 39 Section 2.15. Sharing of Setoffs . . . . . . . . . . 39 Section 2.16. Payments . . . . . . . . . . . . . . . 40 Section 2.17. U.S. Taxes . . . . . . . . . . . . . . 42 FTX or Restricted Subsidiary as Limited Section 2.18. Partner . . . . . . . . . . . . . . . 45 ARTICLE III Representations and Warranties Representations and Warranties of the Section 3.1. Partnership . . . . . . . . . . . . . 45 (a) Organization, Powers . . . . . . 45 (b) Authorization . . . . . . . . . 46 (c) Governmental Approval . . . . . 46 (d) Enforceability . . . . . . . . . 47 (e) Financial Statements . . . . . . 47 (f) Litigation; Compliance with Laws, etc. . . . . . . . . . . 48 (g) Title, etc. . . . . . . . . . . 49 (h) Federal Reserve Regulations; Use of Proceeds . . . . . . . 49 (i) Taxes . . . . . . . . . . . . . 50 (j) Employee Benefit Plans . . . . . 50 (k) Environmental Matters . . . . . 50 (l) Investment Company Act . . . . . 52 (m) Public Utility Holding Company Act . . . . . . . . . . . . . 52 (n) Subsidiaries . . . . . . . . . . 52 (o) Solvency . . . . . . . . . . . . 52 (p) Key Assets . . . . . . . . . . . 53 (q) No Material Misstatements . . . 53 Representations and Warranties of Section 3.2. FTX . . . . . . . . . . . . . . . . . 53 (a) Organization, Powers . . . . . 53 (b) Authorization . . . . . . . . . 53 (c) Governmental Approval . . . . . 54 (d) Enforceability . . . . . . . . . 54 (e) Litigation; Compliance with Laws, etc. . . . . . . . . . . 55 (f) Representations Incorporated By Reference from the FTX Credit Agreement . . . . . . . . . . . 55 (g) Florida Environmental Liability 55 (h) No Material Misstatements . . 55 Section 3.3. Representations and Warranties of FCX . 56 (a) Organization, Powers . . . . . . 56 (b) Authorization . . . . . . . . . 56 (c) Governmental Approval . . . . . 57 (d) Enforceability . . . . . . . . . 57 (e) Litigation; Compliance with Laws, etc. . . . . . . . . . . 58 (f) Representations Incorporated By Reference from the FCX Credit Agreement . . . . . . . . . . 58 (g) No Material Misstatements . . . 58 ARTICLE IV Covenants Affirmative Covenants of the Section 4.1. Partnership . . . . . . . . . . . . . 59 (a) Financial Statements, etc. . . . 59 (b) Obligations, Taxes and Claims . 61 (c) Maintenance of Existence; Conduct of Business . . . . . 62 (d) Compliance with Applicable Laws 62 (e) Litigation . . . . . . . . . . . 62 (f) ERISA . . . . . . . . . . . . . 63 (g) Insurance . . . . . . . . . . . 63 (h) Access to Premises and Records . 63 (i) Compliance with Environmental Laws . . . . . . . . . . . . . 64 (j) Preparation of Environmental Reports . . . . . . . . . . . 64 Negative Covenants of the Section 4.2. Partnership . . . . . . . . . . . . . 64 (a) Conflicting Agreements . . . . . 64 (b) Material Agreements . . . . . . 65 (c) Mergers and Consolidations . . . 65 (d) Liens . . . . . . . . . . . . . 65 (e) Investments, Loans, Advances and Acquisitions . . . . . . . 67 (f) Distributions . . . . . . . . . 68 (g) Indebtedness . . . . . . . . . . 69 (h) Sale and Lease-Back Transactions . . . . . . . . . 70 (i) Transactions with Affiliates . . 71 (j) Fiscal Year . . . . . . . . . . 71 (k) Business of Partnership and Subsidiaries . . . . . . . 71 (l) Federal Reserve Regulations; Use of Proceeds . . . . . . . . . 71 (m) Certain Debt Agreements . . . . 72 (n) Swaps . . . . . . . . . . . . . 72 (o) Assets of Subsidiaries . . . . . 72 Section 4.3. Affirmative Covenants of FTX . . . . . 73 (a) Affirmative Covenants Incorporated by Reference from the FTX Credit Agreement . . . 73 (b) Partnership's Covenants and FTX . . . . . . . . . . . . . 73 Section 4.4. Negative Covenants of FTX . . . . . . . 73 (a) Negative Covenants Incorporated by Reference from the FTX Credit Agreement . . . . . . . 73 (b) Material Agreements . . . . . . 74 Section 4.5. Affirmative Covenants of FCX . . . . . 74 Section 4.6. Negative Covenants of FCX . . . . . . . 74 ARTICLE V Conditions of Credit Conditions Precedent to Initial Section 5.1. Borrowing . . . . . . . . . . . . . . 75 Conditions Precedent to Each Section 5.2. Borrowing . . . . . . . . . . . . . . 79 Representations and Warranties with Section 5.3. Respect to Borrowings . . . . . . . . 80 ARTICLE VI Events of Default Section 6.1. Events of Default . . . . . . . . . . . 80 ARTICLE VII FTX Undertaking Section 7.1. FTX Undertaking . . . . . . . . . . . . 84 ARTICLE VIII The Agents Section 8.1. The Agents . . . . . . . . . . . . . . 85 ARTICLE IX Miscellaneous Section 9.1. Notices . . . . . . . . . . . . . . . . 89 Section 9.2. Survival of Agreement . . . . . . . . . 90 Successors and Assigns; Participations; Section 9.3. Purchasing Banks . . . . . . . . . . 90 Section 9.4. Expenses of the Banks; Indemnity . . . 95 Section 9.5. Right of Setoff . . . . . . . . . . . . 97 Section 9.6. Applicable Law . . . . . . . . . . . . 98 Section 9.7. Waivers; Amendments . . . . . . . . . . 98 Section 9.8. Severability . . . . . . . . . . . . . 99 Section 9.9. Counterparts . . . . . . . . . . . . . 99 Section 9.10. Headings . . . . . . . . . . . . . . . 99 Section 9.11. Entire Agreement . . . . . . . . . . . 99 Section 9.12. Waiver of Jury Trial, etc. . . . . . . 100 Section 9.13. Interest Rate Limitation . . . . . . . 100 Section 9.14. Jurisdiction; Consent to Service of 101 Process . . . . . . . . . . . . . . . Section 9.15. Confidentiality . . . . . . . . . . . . 102 SCHEDULE I Applicable Margin; Commitment Fees SCHEDULE II Commitments SCHEDULE III Key Assets SCHEDULE IV Florida Properties SCHEDULE V Subsidiaries SCHEDULE VI Litigation Exhibit A Form of Promissory Note Exhibit B Form of Borrowing Notice Exhibit C Form of Commitment Transfer Supplement Exhibit D Form of Administrative Questionnaire Exhibit E Form of Subordination Terms Exhibit F Form of Opinion of the General Counsel of FTX and FCX Exhibit G Form of Opinion of Davis Polk & Wardwell Exhibit H Form of FTX/FMPO Credit Agreement Exhibit I Form of FM Intercreditor Agreement Exhibit J Form of Reimbursement Agreement Exhibit K Form of FTX Guaranty Exhibit L Form of FCX Guaranty CREDIT AGREEMENT dated as of June 30, 1995, among FM PROPERTIES OPERATING CO., a Delaware general partnership (the "Partnership" or the "Borrower"), FREEPORT-McMoRan INC., a Delaware corporation ("FTX"), FREEPORT-McMoRan COPPER & GOLD INC., a Delaware corporation ("FCX"; FTX and FCX being the "Guarantors"), the undersigned banks (collectively, the "Banks") and CHEMICAL BANK, a New York banking corporation ("Chemical"), as administrative agent for the Banks (in such capacity, the "Administrative Agent"), and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking association, as Documentation Agent for the Banks (the "Documentation Agent"; the Administrative Agent and the Documentation Agent being, collectively, the "Agents"). A. FTX has a 0.2% general partnership interest in and serves as managing general partner of the Partnership, and the Company (as herein defined) directly and indirectly has the remaining 99.8% general partnership interest in the Partnership. B. In connection with the Restructuring (as herein defined), the Partnership wishes to refinance its borrowings under the Existing FM Credit Agreement and to provide that FCX and FTX will each severally guarantee a portion of the loans under this Agreement. C. FTX, FCX and the Partnership have requested the Banks to extend credit, subject to the terms and conditions of this Agreement, in order to enable the Partnership to borrow on a revolving basis, at any time and from time to time prior to the Maturity Date (as herein defined), an aggregate principal amount at any time outstanding not in excess of $50,000,000. The proceeds of such borrowings are to be used to refinance certain existing borrowings and for general partnership purposes, subject to certain limitations provided herein. The Banks are willing to extend such credit to the Partnership on the terms and subject to the conditions herein set forth. D. FTX is party to the FTX Credit Agreement and FCX is party to the FCX Credit Agreement (as herein defined). Certain terms and provisions used or set forth in such Credit Agreements are incorporated by reference herein, as specified below, and wherever so incorporated shall be deemed to be a part hereof as though fully set forth herein. Wherever any provisions of such Credit Agreements are incorporated by reference herein, such provisions shall be deemed to be so incorporated with the same effect as though fully set forth herein, it being understood that any refer- ence in such provisions to "this Agreement" shall be deemed to be a reference to this Agreement, as appropriate. Accordingly, FTX, FCX, the Partnership, the Banks and the Agents agree as follows: ARTICLE I Definitions SECTION 1.1. Definitions. As used in this Agreement, the following terms have the meanings indicated (any term defined in this Article I or elsewhere in this Agreement in the singular and used in this Agreement in the plural shall include the plural, and vice versa): "Administrative Questionnaire" means an Administrative Questionnaire in the form of Exhibit C. "Affiliate" means, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. "Administrative Services Agreement" means the Administrative Services Agreement dated as of June 11, 1992, between FTX and the Company, in the form provided prior to the date hereof by FTX to the Banks. "Alternate Base Rate" means for any day, a rate per annum (rounded upwards, if not already a whole multiple of 1/100 of 1%, to the next higher 1/100 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect for such day plus 1/2 of 1%. For purposes hereof, the term "Prime Rate" means the rate of interest per annum publicly announced from time to time by Chemical as its prime rate in effect at its principal office in the City of New York; each change in the Prime Rate shall be effective on the date such change is publicly announced as being effective. "Base CD Rate" means the sum of (x) the product of (i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (y) the Assessment Rate. "Three-Month Secondary CD Rate" means, for any day, the secondary market rate for three-month certificates of deposit reported as being in effect on such day (or, if such day shall not be a Business Day, the next preceding Business Day) by the Board through the public information telephone line of the Federal Reserve Bank of New York (which rate will, under the current practices of the Board, be published in Federal Reserve Statistical Release H.15(519) during the week following such day), or, if such rate shall not be so reported on such day or such next preceding Business Day, the average of the secondary market quotations for three- month certificates of deposit of major money center banks in New York City received at approximately 10:00 a.m., New York City time, on such day (or, if such day shall not be a Business Day, on the next preceding Business Day) by the Administrative Agent from three New York City negotiable certificate of deposit dealers of recognized standing selected by it. "Federal Funds Effective Rate" means, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate or both for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to clause (b) or (c), or both, of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective Rate, respectively. "Applicable LIBO Rate" means on a per annum basis, in respect of any LIBO Rate Loan, for each day during the Interest Period for such Loan, the sum of (i) the LIBO Rate as determined by the Administrative Agent plus (ii) the Applicable Margin. "Applicable Margin" means, with respect to any Loan, the applicable percentage set forth on Schedule I hereto. "Applicable Percentage" of any Bank means the percentage set opposite such Bank's name on Schedule II hereto, as modified from time to time as provided hereby. "Applicable Reference Rate" means on a per annum basis in respect of any Reference Rate Loan, for any day, the sum of the Alternate Base Rate plus the Applicable Margin. "Assessment Rate" means, with respect to each day during an Interest Period, the annual rate (rounded upwards, if not already a whole multiple of 1/100 of l%, to the next highest whole multiple of 1/100 of 1%) most recently estimated by the Administrative Agent as the then current net annual assessment rate that will be employed in determining amounts payable by Chemical to the Federal Deposit Insurance Corporation or any successor ("FDIC") for the FDIC's insuring time deposits made in Dollars at offices of Chemical in the United States. "Assignment and Acceptance Effective Date" has the meaning assigned to such term in each Assignment and Accep- tance. "Bank" means each bank signatory hereto and its successors and permitted assigns under Section 9.3. "Board" means the Board of Governors of the Federal Reserve System of the United States. "Borrowing" shall mean a group of Loans of a single Type made by the Banks on a single date and as to which a single Interest Period is in effect. "Borrowing Date" means, with respect to any Loan, the date on which such Loan is disbursed. "Burke Parties" means, collectively, Burke Oil Co. (formerly Pel-Tex Oil Company, Inc.), Chenier Oil Company, Inc., Burke and Pel-Tex Oil Company, Inc., doing business as Burmont Company, Earl P. Burke, Jr. and Fay Stouder Burke, as assignors of the Pel-Tex Agreements to the Pel-Tex Lenders. "Business Day" means any day other than a Saturday, Sunday or a day on which banks in New York City are authorized or required by law to close; provided, however, that when used in connection with a LIBO Rate Loan, the term "Business Day" shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market. "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. A "Change in Control" shall be deemed to have occurred if FTX shall for any reason cease to be the sole managing general partner of the Partnership or the functions of FTX as the managing general partner of the Partnership shall generally be carried out for any reason by any person other than FTX; provided that no Change in Control shall be deemed to have occurred if any subsidiary of FTX designated by FTX to discharge the duties of FTX as the managing general partner of the Partnership shall carry out the functions of FTX as managing general partner of the Partnership. "Circle C Property" has the meaning assigned such term in Section 4.2(g)(ii). "Circle C Subsidiary" has the meaning assigned such term in Section 4.2(g)(ii). "Closing Date" means the date of execution and delivery of this Agreement and the Promissory Notes. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Collateral Agents" mean the FM Collateral Agent, the FCX Collateral Agent and the FTX Collateral Agent. "Commitment" means, with respect to each Bank, the Commitment of such Bank hereunder to make revolving loans as set forth on Schedule II hereto, or in the Assignment and Acceptance pursuant to which such Bank assumed its Commitment, as the same may be permanently terminated or reduced from time to time pursuant to Section 2.7 and pursuant to assignments by such Bank pursuant to Section 9.3. The Commitment of each Bank shall automatically and permanently terminate on the Maturity Date. "Commitment Fee" has the meaning assigned to such term in Section 2.6(a). "Commitment Termination Date" has the meaning assigned to such term in Section 2.6(a). "Commitment Transfer Supplement" means a Commitment Transfer Supplement entered into by a Bank and an assignee, and accepted by the Administrative Agent, in the form of Exhibit D or such other form as shall be approved by the Administrative Agent. "Company" means FM Properties Inc., a Delaware corporation, which holds directly and indirectly a 99.8% general partnership interest in the Partnership. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and "Controlling" and "Controlled" shall have meanings correlative thereto. "Credit Event" means the making of a Loan. "Default" means any event or condition which upon the giving of notice or lapse of time or both would become an Event of Default. "Distribution Agreement" means the Distribution Agreement dated as of June 10, 1992, among FTX, the Company and the Partnership, in the form provided prior to the date hereof by FTX to the Banks. "Dollars" or "$" means United States Dollars. "Domestic Office" means, for any Bank, the Domestic Office set forth for such Bank on the signature pages hereof, unless such Bank shall designate a different Domestic Office by notice in writing to the Administrative Agent and the Borrower. "environment" shall mean ambient air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata or as otherwise defined in any Environmental Law. "Environmental Claim" means any written notice of violation, claim, demand, order, directive, cost recovery action or other cause of action by, or on behalf of, any Governmental Authority or any Person for damages, injunctive or equitable relief, personal injury (including sickness, disease or death), Remedial Action costs, tangible or intangible property damage, natural resource damages, nuisance, pollution, any adverse effect on the environment caused by any Hazardous Material, or for fines, penalties or restrictions, resulting from or based upon: (a) the existence, or the continuation of the existence, of a Release (including sudden or non-sudden, accidental or non- accidental Releases); (b) exposure to any Hazardous Material; (c) the presence, use, handling, transportation, storage, treatment or disposal of any Hazardous Material; or (d) the violation of any Environmental Law or Environmental Permit. "Environmental Law" means any and all applicable treaties, laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. SECTION 9601 et seq. (collectively "CERCLA"), the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Amendments of 1984, 42 U.S.C. SECTION 6901 et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. SECTION 1251 et seq., the Clean Air Act of 1970, as amended 42 U.S.C. SECTION 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. SECTION 2601 et seq., the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. SECTION 651 et seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. SECTION 11001 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. SECTION 300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C. SECTION 1801 et seq., and any similar or implementing state or local law, and all amendments or regulations promulgated thereunder. "Environmental Permit" means any permit, approval, authorization, certificate, license, variance, filing or permission required by or from any Governmental Authority pursuant to any Environmental Law. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA Affiliate" means 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 Plan; (vi) the receipt by the Borrower or any ERISA Affiliate of any notice concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected 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 the Borrower. "Event of Default" means any Event of Default defined in Article VI. "Existing FM Credit Agreement" has the meaning assigned such term in Section 5.1(e). "FCX" means Freeport-McMoRan Copper & Gold Inc., a Delaware corporation. "FCX Collateral Agent" means Chemical in its capacity as FCX Collateral Agent for the Lenders (as defined in the FCX Intercreditor Agreement) under the FCX Pledge Agreements. "FCX Credit Agreement" means the $200,000,000 Credit Agreement dated as of June 30, 1995, among FCX, FI, certain banks, Chemical Bank, as Administrative Agent and FCX Collateral Agent, The Chase Manhattan Bank (National Association), as Documentary Agent, and First Trust of New York, National Association, as FI Trustee. "FCX Guaranty" means the FCX Guaranty Agreement dated as of June 30, 1995, by FCX of the Loans, the Pel-Tex Debt and the loans under the TCB Credit Agreement, substantially in the form of Exhibit L, as such agreement may be amended and in effect from time to time. "FCX Intercreditor Agreement" means the Intercreditor Agreement in the form of Exhibit H to the FCX Credit Agreement, as such Agreement may be amended and in effect from time to time. "FCX Pledge Agreements" means the pledge agreements in the forms of Exhibits E-1 and E-2 to the FCX Credit Agreement, to be executed by FCX and delivered to the FCX Collateral Agent, as such agreement may be amended and in effect from time to time. "Financial Officer" of any entity means the principal financial officer, principal accounting officer, treasurer, assistant treasurer or controller of such entity; provided that the Financial Officers of FTX, as managing general partner of the Partnership, shall be deemed to be Financial Officers of the Partnership. "FI" means P.T. Freeport Indonesia Company, a limited liability company organized under the laws of Indonesia and domesticated in Delaware. "Florida Joint Venture Agreement" means the Joint Venture Agreement dated as of June 11, 1992, between IMC- Agrico and the Partnership, in the form provided prior to the date hereof by FTX to the Banks. "FM Florida Properties Co." means FM Florida Properties Co., a Delaware general partnership between the Partnership and IMC-Agrico, formed pursuant to the Florida Joint Venture Agreement. "FM Intercreditor Agreement" means the Intercreditor Agreement among FCX, FTX, the Administrative Agent and the Pel-Tex Agent in the form of Exhibit I hereto, as such Agreement may be amended and in effect from time to time. "FRP" means Freeport-McMoRan Resource Partners, Limited Partnership, a Delaware limited partnership. "FTX Collateral Agent" means Chemical in its capacity as FTX Collateral Agent for the Lenders (as defined in the FTX Intercreditor Agreement) under the FTX Security Agreement. "FTX Credit Agreement" means the Credit Agreement dated as of June 30, 1995, among FTX, FRP, certain banks, Chemical Bank, as Administrative Agent and FTX Collateral Agent, and The Chase Manhattan Bank (National Association), as Documentary Agent. "FTX/FMPO Credit Agreement" means the Credit Agreement dated as of the Funding Date, between FTX and the Company, in the form of Exhibit H hereto, as such agreement may be amended as permitted hereby and in effect from time to time. "FTX Guaranty" means the FTX Guaranty Agreement dated as of June 30, 1995, providing for the guarantee by FTX of the Loans, the Pel-Tex Debt and the loans under the TCB Credit Agreement, substantially in the form of Exhibit K, as such agreement may be amended and in effect from time to time. "FTX Intercreditor Agreement" means the Intercreditor Agreement entered into as of June 11, 1992, as amended and restated in its entirety as of June 1, 1993, and as of the Funding Date in the form attached to the FTX Credit Agreement as Exhibit G, among the Administrative Agent on behalf of the Banks, the FTX Agent on behalf of the FTX Lenders, the Pel-Tex Agent on behalf of the Pel-Tex Lenders (each as defined therein), TCB and Chemical, as FTX Collateral Agent, as such agreement may be further amended and in effect from time to time. "FTX Term Loan" has the meaning assigned such term in the last clause of Section 4.2(g). "FTX Security Agreement" means the security agreement in the form of Exhibit F to the FTX Credit Agreement, executed by FTX and delivered to the FTX Collateral Agent as such agreement may be amended and in effect from time to time. "Funding Date" means the first date on which the conditions to borrowing set forth in Article V have been satisfied. "GAAP" has the meaning assigned to such term in Section 1.2. "Governmental Authority" means any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body. "Governmental Rule" means any statute, law, treaty, rule, code, ordinance, regulation, permit, certificate or order of any Governmental Authority or any judgment, decree, injunction, writ, order or like action of any court, arbitrator or other judicial or quasijudicial tribunal. "Guarantee" means, 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 Guarantee shall not include any endorsement for collection or deposit in the ordinary course of business. "Guaranties" shall mean the FCX Guaranty and the FTX Guaranty. "Hazardous Materials" means all explosive or radioactive substances or wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or gaseous wastes, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls ("PCBs") or PCB-containing materials or equipment, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law. "Hedge Agreement" means any interest rate, currency or commodity swap, cap, floor or collar agreement or similar hedging arrangement providing for the transfer or mitigation of interest rate, commodity price or currency value or exchange rate risks, either generally or under specific contingencies. "IMC-Agrico" means the general partnership formed pursuant to the IMC-Agrico Partnership Agreement. "IMC-Agrico Partnership Agreement" means the Amended and Restated Partnership Agreement dated as of July 1, 1993, by and among Agrico LP, a Delaware limited partnership, IMC- Agrico GP Company, a Delaware corporation, IMC-Agrico MP Inc., a Delaware corporation, as amended and in effect from time to time as permitted by Section 5.2(r) of the FTX Credit Agreement as incorporated herein by reference. "Indebtedness" of any Person means, 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 Documents" means the FM Intercreditor Agreement, the FTX Intercreditor Agreement and the FCX Intercreditor Agreement. "Interest Payment Date" means (i) as to any Reference Rate Loan, the next succeeding March 31, June 30, September 30 or December 31 (subject to Section 2.16), or if earlier, the Maturity Date, and (ii) as to any LIBO Rate Loan, the last day of the Interest Period applicable to such Loan (and, in the case of any Interest Period of more than three months' duration, the date that would be the last day of such Interest Period if such Interest Period were of three months' duration) and the date of any continuation or conversion of such Loan as or into a Loan of the same or a different type. "Interest Period" means (i) as to any LIBO Rate Loan, the period commencing on the date of such LIBO Rate Loan or on the last day of the immediately preceding Interest Period applicable to such Loan, as the case may be, and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect, and (ii) as to any Reference Rate Loan, the period commencing on the date of such Reference Rate Loan or on the last day of the immediately preceding Interest Period applicable to such Loan, as the case may be, and ending on the earliest of (x) the next succeeding March 31, June 30, September 30 or December 31, (y) the Maturity Date and (z) the date such Loan is prepaid or converted as permitted hereby; provided, however, that (1) if any Interest Period would end on a day that shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, with respect to LIBO Rate Loans only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (2) no Interest Period with respect to any Loan shall end later than the Maturity Date and (3) interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period. "Key Assets" means the properties and assets of the Borrower shown on Schedule III. "LIBO Rate" means, with respect to any LIBO Rate Loan for any Interest Period, an interest rate per annum (rounded upwards, if not already a whole multiple of 1/100 of 1%, to the next higher 1/100 of 1%) equal to the arithmetic average of the respective rates per annum at which Dollar deposits approximately equal in principal amount to Chemical's portions of such LIBO Rate Loan and for a maturity equal to the applicable Interest Period are offered in immediately available funds to the principal London offices of Chemical's in the London Interbank Market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. "LIBO Rate Loan" means any Loan for which interest is determined, in accordance with the provisions hereof, at the Applicable LIBO Rate. "LIBOR Office" means, for any Bank, the LIBOR Office set forth for such Bank on the signature pages hereof or as otherwise notified in writing to the Administrative Agent and the Borrower, unless such Bank shall designate a different LIBOR Office by notice in writing to the Administrative Agent and the Borrower. "Lien" means with respect to any asset, (a) a mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement relating to such asset, (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities and (d) other encumbrances of any kind, including, without limitation, production payment obligations. "Loans" means the revolving loans made by the Banks to the Borrower pursuant to Section 2.1. Each Loan shall be either a LIBO Rate Loan or a Reference Rate Loan. "Loan Documents" means this Agreement, the Promissory Notes, the FCX Guaranty, the FTX Guaranty, the Intercreditor Agreements, the Security Agreements and all other agreements, certificates and instruments now or hereafter entered into in connection with any of the foregoing, in each case as amended and modified from time to time. "Loan Exposure" means the aggregate amount of unpaid principal of all Loans made by the Banks. "Margin Stock" has the meaning assigned to such term in Regulation U. "Material Adverse Effect" means (a) a materially adverse effect on the business, assets, operations, prospects or condition, financial or otherwise, of a Guarantor or the Borrower and the Subsidiaries taken as a whole, (b) material impairment of the ability of a Guarantor or the Borrower or any of the Subsidiaries to perform any of its obligations under any Loan Document to which it is or will be a party or (c) material impairment of the rights of or benefits available to the Banks under any Loan Document. "Material Agreements" means the Distribution Agreement, the Partnership Agreement, the Administrative Services Agreement, the FRP Joint Venture Agreement, the Reimbursement Agreement and the FTX/FMPO Credit Agreement. "Maturity Date" means the second anniversary of the Closing Date, or, if earlier, the date of termination of the Commitments pursuant to the terms hereof. "Multiemployer Plan" means 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. "Net Proceeds" shall mean in connection with any permitted asset sale, the proceeds thereof (including any condemnation award and any payment or settlement of a casualty insurance claim not used to restore the related property) in the form of cash or cash equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received), net of the following, without duplication: (i) customary and reasonable attorneys' fees, accountants' fees, investment banking fees, brokerage commissions, all closing costs, and other customary fees and expenses actually incurred in connection therewith as transaction costs, and bona fide reserves and deposits, and (ii) any taxes paid or reasonably estimated to be payable solely in respect of such permitted asset sale as a result thereof by the owner of such asset (after taking into account any available tax credits or deductions). "1994 FCX Form 10-K" means the Annual Report on Form 10-K of FCX for the year ended December 31, 1994. "1994 FM Form 10-K" means the Annual Report on Form 10- K of the Company for the year ended December 31, 1994. "1994 FTX Form 10-K" means the Annual Report on Form 10-K of FTX for the year ended December 31, 1994. "Operating Lease" means any lease other than a lease giving rise to a Capitalized Lease Obligation. "Partnership Agreement" means the Amended and Restated Agreement of General Partnership dated as of June 11, 1992, among FTX, the Company and FMOP Sub Inc., in the form provided prior to the date hereof by FTX to the Banks. "Partnership Obligations" means the principal and interest on each Loan and all other amounts payable by the Borrower hereunder and under the other Loan Documents, including fees, indemnities and reimbursement of costs and expenses. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA. "Pel-Tex Agent" means Hibernia National Bank, as Agent for the Pel-Tex Banks. "Pel-Tex Agreements" means the Note Agreement and related documents dated as of December 31, 1985, as amended and restated and in effect from time to time, between the Partnership (as ultimate successor to FMP Operating Company) and the Pel-Tex Banks (as successor to the Burke Parties). "Pel-Tex Bank Agreement" means the Credit Agreement dated as of December 31, 1985, as amended and in effect from time to time, among the Burke Parties, the Pel-Tex Banks and Pel-Tex Agent. "Pel-Tex Banks" means, collectively, the banks which were parties to the Pel-Tex Bank Agreement and, in connection with satisfaction on the Burke Parties of the Pel-Tex Bank Agreement, became the successors to the Burke Parties under the Pel-Tex Agreements (and the successors and assigns of such Banks). "Pel-Tex Debt" means the Indebtedness permitted by Section 4.2(g)(i). "Pel-Tex Lenders" means, collectively, the Pel-Tex Banks and the Pel-Tex Agent. "Pel-Tex Obligations" means, without duplication, all amounts owing by, and all other obligations (including without limitation in respect of fees, indemnities and reim- bursement of costs or expenses), whether direct or contin- gent, now or hereafter existing, due or to become due, mone- tary or otherwise, of the Partnership to the Pel-Tex Lenders in connection with the Pel-Tex Agreements. "Permitted Investments means: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, in each case maturing within 90 days from the date of acquisition thereof; (b) investments in commercial paper maturing within 90 days from the date of acquisition thereof and having, at such date of acquisition, an A-1 credit rating from Standard & Poor's Corporation or a P-1 credit rating from Moody's Investors Service, Inc.; (c) investments in certificates of deposit, banker's acceptances and time deposits (onshore or offshore) maturing within 90 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any commercial bank, foreign or domestic, having a short-term deposit rating issued by Moody's Investor Service, Inc. of P-1; (d) investments in readily marketable money market funds having assets in excess of $1,000,000,000, which assets have an average life of less than one year; and (e) other investment instruments approved in writing by the Required Banks. "Permitted Swap" means any Hedge Agreement between the Partnership or any Subsidiary and any Bank or its affiliates that shall not require the payment of any up-front fee or other up-front amount or any advance payment (including such a payment in lieu of periodic payments of amounts accrued during any period). "Person" means any natural person, corporation, partnership, joint venture, trust, incorporated or unincorporated association, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind. "Plan" means 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 the Borrower 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. "Promissory Note" means a promissory note of the Borrower, substantially in the form of Exhibit A, as applicable, evidencing the Loans. "Promissory Notes" means the promissory notes of the Borrower referred to in Section 2.4. "Property" has the meaning assigned such term in Section 3.1(k). "Reimbursement Agreement" means the Reimbursement Agreement between the Partnership and FTX and FCX in the form of Exhibit J hereto as such agreement may be amended as permitted hereby and in effect from time to time. "Reference Rate Loan" means any Loan for which interest is determined, in accordance with the provisions hereof, at the Applicable Reference Rate. "Register" has the meaning assigned such term in Section 9.3(d). "Regulation D" means Regulation D of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. "Regulation G" means Regulation G of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. "Regulation U" means Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. "Regulation X" means Regulation X of the Board as from time to time in effect and all official rulings andinterpretations thereunder or thereof. "Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Hazardous Material in, into, onto or through the environment. "Remedial Action" means (a) "remedial action" as such term is defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any Governmental Authority or voluntarily undertaken to: (i) cleanup, remove, treat, abate or in any other way address any Hazardous Material in the environment; (ii) prevent the Release or threat of Release, or minimize the further Release of any Hazardous Material so it does not migrate or endanger or threaten to endanger public health, welfare or the environment; or (iii) perform studies and investigations in connection with, or as a precondition to, (i) or (ii) above. "Required Banks" means, subject to Section 9.7(b), at any time Banks having Commitments representing at least 66- 2/3% of the aggregate Commitments hereunder or, if the Commitments have been terminated, Banks having outstanding Loans representing at least 66-2/3% of the aggregate principal amount of the outstanding Loans. "Responsible Officer" of any entity means 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 the Partnership, shall be deemed to be Responsible Officers of the Partnership. "Restricted Subsidiary" has the meaning assigned to such term in the FTX Credit Agreement or the FCX Credit Agreement, as applicable. "Restructuring" means the transactions between FTX and FCX (on the one hand) and RTZ, RTZ Indonesia and RTZ America (on the other hand) pursuant to the Stock Purchase Agreement, and the distribution on a generally tax free basis (subject to exceptions approved by the Administrative Agent and the Documentary Agent) by FTX to its shareholders of the shares of FCX, thereby leaving FTX as a holding company for FRP and leaving FCX as the publicly held holding company for FI, together with arrangements required by or effectuated in connection with such distribution with respect to existing contractual agreements and indebtedness of FTX, FRP, FCX and FI, all on terms substantially the same as those set forth in Schedule XI to the FTX Credit Agreement or otherwise satisfactory to the Required Banks (including all tax, accounting, corporate and partnership matters). "RTZ" means the RTZ Corporation PLC, a company organized under the laws of England. "RTZ America" means RTZ America, Inc., a Delaware corporation and a wholly owned subsidiary of RTZ. "RTZ Indonesia" means RTZ Indonesia Limited, a company organized under the laws of England and a wholly owned subsidiary of RTZ. "SEC" means the Securities and Exchange Commission. "Security Agreements" means, collectively, the FCX Pledge Agreements and the FTX Security Agreement. "Specified Entities" means FTX, FCX, the Company, the Restricted Subsidiaries of FTX and FCX, the Partnership and the Subsidiaries. "Statutory Reserves" means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including, without limitation, any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board and any other banking authority, domestic or foreign, to which the Administrative Agent or any Bank (including any branch, Affiliate, or other funding office making or holding a Loan) is subject (a) with respect to the Base CD Rate (as such term is used in the definition of "Alternate Base Rate"), for new negotiable nonpersonal time deposits in Dollars of over $100,000 with maturities approximately equal to the applicable Interest Period, and (b) with respect to the LIBO Rate, for Eurocurrency Liabilities (as defined in Regulation D). Such reserve percentages shall include, without limitation, those imposed under Regulation D. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "Subordination Terms" means the form of subordination terms set forth as Exhibit E hereto. "subsidiary" means, with respect to any Person, any corporation at least a majority of whose securities having ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) are at the time owned by such Person and/or one or more other subsidiaries of such Person and any partnership (other than joint ventures for which the intention under the applicable agreements, including operating agreements, if any, is that such joint ventures be partnerships solely for purposes of the Code) in which such person or a subsidiary of such person is a general partner. "Subsidiary" means any subsidiary of the Partnership. "TCB" means Texas Commerce Bank National Association, a national banking association (and its successors and assigns). "TCB Borrower" means the borrower under the TCB Credit Agreement. "TCB Borrower Properties" means the Mortgaged Property described in (and as defined in) the TCB Deed of Trust. "TCB Collateral" means all of the TCB Borrower's properties or assets, now owned or hereafter acquired, including without limitation the TCB Borrower Properties. "TCB Credit Agreement" means the Credit Agreement dated as of February 6, 1992, as amended to the date hereof and as further amended and in effect from time to time, between the TCB Borrower and TCB. "TCB Deed of Trust" means the Deed of Trust (with security agreement and financing statement) recorded in Volume 11620, Page 1213 of the real property records of Travis County, Texas, and in the official public records of Hays County, Texas. "Threshold Amount" means, with respect to FTX, FCX and/or their Restricted Subsidiaries, $10,000,000, and, with respect to the Partnership or any Subsidiary, $5,000,000. "Total Commitment" means the sum of all the then effective Commitments. "Transfer" means the transfer by FTX to the Partnership of certain oil, gas and real estate assets, pursuant to and in accordance with the Distribution Agreement, all as described in the Form 10. "Transfer Effective Date" has the meaning assigned to such term in each Commitment Transfer Supplement. "Transferee" means any Participant or Purchasing Bank, as such terms are defined in Section 9.3. "Withdrawal Liability" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. SECTION 1.2. Accounting Terms. Except as otherwise herein specifically provided, each accounting term used herein shall have the meaning given it under United States generally accepted accounting principles in effect from time to time (with such changes thereto as are approved or concurred in from time to time by the Partnership's or FTX's independent public accountants, as applicable) applied on a basis consistent with those used in preparing the financial statements referred to in Section 5.1(a) of the FTX Credit Agreement ("GAAP"); provided, however, that each reference in Section 5.2, or in the definition of any term used in Section 5.2, to GAAP shall mean generally accepted accounting principles as in effect on the Closing Date and as applied by FTX in preparing the financial statements referred to in Section 3.1(e). In the event any change in GAAP materially affects any provision of this Agreement, the Banks and the Borrower agree that they shall negotiate in good faith in order to amend the affected provisions in such a way as will restore the parties to their respective positions prior to such change, and until such amendment becomes effective the Borrower's compliance with such provisions shall be determined on the basis of GAAP as in effect immediately before such change in GAAP became effective. SECTION 1.3. Section, Article, Exhibit and Schedule References, etc. Unless otherwise stated, Section, Article, Exhibit and Schedule references made herein are to Sections, Articles, Exhibits or Schedules, as the case may be, of this Agreement. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". Except as otherwise expressly provided herein, any reference in this Agreement to any Loan Document shall mean such document as amended, restated, supplemented or otherwise modified from time to time. SECTION 1.4. Incorporated Agreements and Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the FTX Credit Agreement or the FCX Credit Agreement, as applicable, and the definitions of such terms, and of any other terms included in such definitions are hereby incorporated by reference into this Agreement (but only for the purpose of ascertaining the meanings of such incorporated definitions). For purposes of such incorporation by reference, the FTX Credit Agreement and the FCX Credit Agreement shall automatically mean such agreements in the form modified or amended from time to time, without the necessity of any further action or approval pursuant to this Agreement. If either the FCX Credit Agreement or the FTX Credit Agreement shall be terminated, for purposes of this Agreement, the provisions of the terminated agreement incorporated herein shall be deemed to be those as in effect immediately prior to such termination. ARTICLE II The Loans SECTION 2.1. Revolving Credit Facility. Upon the terms and subject to the conditions and relying upon the representations and warranties herein set forth, each Bank, severally and not jointly, agrees to make Loans to the Borrower, at any time and from time to time on or after the Funding Date, and until the earlier of the Maturity Date and the termination of the Commitment of such Bank in accordance with the terms hereof, in an aggregate principal amount not to exceed such Bank's Applicable Percentage of the then effective unused Total Commitment on the Borrowing Date for such Loan. Within the foregoing limits, the Borrower may borrow, repay and reborrow, prior to the Maturity Date, Loans subject to the terms, provisions and limitations set forth herein. SECTION 2.2. Loans. (a) The Loans made by the Banks to the Borrower on any one date shall be in an aggregate principal amount which is (i) an integral multiple of $1,000,000 or (ii) equal to the remaining available balance of the applicable Commitments. The Loans by each Bank to the Borrower made on and after the Funding Date shall be made against an appropriate Promissory Note, payable to the order of such Bank in the amount of its Commitment, executed by the Borrower and delivered to such Bank on the Closing Date, as referred to in Section 2.4. (b) Each Loan shall be either a Reference Rate Loan or a LIBO Rate Loan as the Borrower may request pursuant to Section 2.3. Subject to the provisions of Sections 2.3 and 2.10, Loans of more than one type may be outstanding at the same time. (c) Each Bank shall make its portion, as determined under Section 2.14, of each Loan hereunder on the proposed date thereof by paying the amount required to the Administrative Agent in New York, New York in immediately available funds not later than 2:00 p.m., New York City time, and the Administrative Agent shall by 3:00 p.m., New York City time, credit the amounts so received to the general deposit account of the Borrower with the Administrative Agent or, if Loans shall not be made on such date because any condition precedent to a borrowing herein specified is not met, return the amounts so received to the respective Banks. Unless the Administrative Agent shall have received notice from a Bank prior to the date of any Loan that such Bank will not make available to the Administrative Agent such Bank's portion of such Loan, the Administrative Agent may assume that such Bank has made such portion available to the Administrative Agent on the date of such Loan in accordance with this paragraph (c) and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If the Administrative Agent shall have so made funds available, then to the extent that such Bank shall not have made such portion available to the Administrative Agent, such Bank and the Borrower severally agree to repay without duplication to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent at an interest rate equal to (i) in the case of the Borrower, the interest rate applicable at the time to the Loans comprising such borrowing and (ii) in the case of such Bank, a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error). If such Bank shall repay to the Administrative Agent such corresponding amount, such amount shall constitute such Bank's Loan for purposes of this Agreement. SECTION 2.3. Notice of Loans. (a) In order to request a Loan, the Borrower shall give the Administrative Agent irrevocable telephonic (promptly confirmed in writing), written, telecopy or telex notice in the form of Exhibit B with respect to each Loan (i) in the case of a LIBO Rate Loan, not later than 10:30 a.m., New York City time, three Business Days before a proposed borrowing, and (ii) in the case of a Reference Rate Loan, not later than 10:30 a.m., New York City time, on the date of a proposed borrowing. Such notice shall be irrevocable (except that in the case of a LIBO Rate Loan, the Borrower may, subject to Section 2.13, revoke such notice by giving written or telex notice thereof to the Administrative Agent not later than 10:30 a.m., New York City time, two Business Days before such proposed borrowing) and shall in each case refer to this Agreement and specify (1) whether the Loan then being requested is to be a Reference Rate Loan or LIBO Rate Loan, (2) the date of such Loan (which shall be a Business Day) and amount thereof, and (3) if such Loan is to be a LIBO Rate Loan, the Interest Period or Interest Periods (which shall not end after the Maturity Date) with respect thereto. If no election as to the type of Loan is specified in any such notice by the Borrower, such Loan shall be a Reference Rate Loan. If no Interest Period with respect to any LIBO Rate Loan is specified in any such notice by the Borrower, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. The Administrative Agent shall promptly advise the other Banks of any notice given by the Borrower pursuant to this Section 2.3(a) and of each Bank's portion of the requested Loan. (b) The Borrower may continue or convert all or any part of any Loan as or into a Loan of the same or a different type in accordance with Section 2.10 and subject to the limitations set forth herein. If the Borrower shall not have delivered a borrowing notice in accordance with this Section 2.3 prior to the end of the Interest Period then in effect for any Loan of the Borrower requesting that such Loan be converted or continued as permitted hereby, then the Borrower shall (unless the Borrower has notified the Administrative Agent, not less than three Business Days prior to the end of such Interest Period, that such Loan is to be repaid at the end of such Interest Period) be deemed to have delivered a borrowing notice pursuant to Section 2.3 requesting that such Loan be converted into or continued as a Reference Rate Loan of equivalent amount. (c) Notwithstanding any provision to the contrary in this Agreement, the Borrower shall not in any borrowing notice under this Section 2.3 request any LIBO Rate Loan which, if made, would result in more than 8 separate LIBO Rate Loans of any Bank. For purposes of the foregoing, Loans having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Loans. SECTION 2.4. Promissory Notes. (a) The Loans made by each Bank to the Borrower shall be evidenced by a Promissory Note duly executed on behalf of the Borrower, dated the Closing Date, in substantially the form attached hereto as Exhibit A, payable to the order of such Bank in a principal amount equal to its Commitment. The outstanding principal balance of each Loan, as evidenced by such Promissory Note, shall be payable on the Maturity Date. Each Promissory Note shall bear interest from the date of the first borrowing hereunder on the outstanding principal balance thereof, as provided in Section 2.5. (b) Each Bank shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness to such Bank resulting from each Loan made by such Bank from time to time, including the amounts of principal and interest payable and paid to such Bank from time to time under this Agreement. Each Bank shall, and is hereby authorized by the Borrower to, endorse on the schedule attached to the Promissory Note delivered by the Borrower to such Bank (or on a continuation of such schedule attached to such Promissory Note and made a part thereof), or otherwise record in such Bank's internal records, an appropriate notation evidencing the date and amount of each Loan from such Bank to the Borrower, as well as the date and amount of each payment and prepayment with respect thereto; provided, however, that the failure of any Bank to make such a notation or any error in such a notation shall not affect the obligation of the Borrower to repay the Loans made by such Bank in accordance with the terms of this Agreement and such Promissory Note. (c) The Administrative Agent shall maintain accounts for (i) the type of each Loan made and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Bank hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Bank's share thereof. (d) The entries made in the accounts maintained pursuant to paragraphs (b) and (c) of this Section 2.4 shall be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any Bank or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrower to repay the Loans in accordance with their terms. SECTION 2.5. Interest on Loans. (a) Subject to the provisions of Section 2.8, each Reference Rate Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, when determined by reference to the Prime Rate, and over a year of 360 days at all other times), equal to the Applicable Reference Rate. (b) Subject to the provisions of Section 2.8, each Loan which is a LIBO Rate Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the Applicable LIBO Rate for the Interest Period in effect for such Loan. (c) Interest on each Loan shall be payable on each applicable Interest Payment Date. The Applicable Reference Rate and the Applicable LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. The Administrative Agent shall promptly advise the Borrower and each Bank of such determination. SECTION 2.6. Fees. (a) The Borrower shall pay each Bank, through the Administrative Agent, on the last Business Day of each March, June, September and December, and on the date on which the Commitment of such Lender shall be terminated as provided herein (the "Commitment Termination Date"), in immediately available funds, a commitment fee (a "Commitment Fee") from and including the Closing Date through and including the Commitment Termination Date on the average daily amount of such Bank's Applicable Percentage of the unused Total Commitment during the quarter (or shorter period commencing with the earlier of June 30, 1995, and the Funding Date or ending with the Commitment Termination Date) ending on such date equal to the applicable Commitment Fee Percentage set forth in Schedule I hereto. (b) All Commitment Fees under this Section 2.6 shall be computed on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be. The Commitment Fees due to each Bank shall cease to accrue on the earlier of the Maturity Date and the termination of the Commitment of such Bank pursuant to Section 2.7. (c) The Borrower agrees to pay to the Administrative Agent, for its own account, on the Closing Date and on each anniversary thereof, an administration fee (the "Administrative Fee") as agreed between the Borrower and the Administrative Agent. (d) All such fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, among the Banks. Once paid, all such fees shall be fully earned under any and all circumstances. SECTION 2.7. Maturity and Reduction of Commitments. (a) Upon at least five days' prior written, telecopied or telex notice to the Administrative Agent, the Borrower may without penalty at any time in whole permanently terminate, or from time to time permanently reduce, the Total Commitment, ratably among the Banks in accordance with the amounts of their respective Commitments; provided, however, that each partial reduction of the Commitment Amount shall be in a minimum principal amount of $1,000,000 and an integral multiple of $1,000,000; provided further that the Total Commitment may not be reduced to an amount which is less than the aggregate principal amount of all Loans outstanding after such reduction. (b) The Total Commitment shall be automatically and permanently reduced by an amount equal to 50% of the Net Proceeds of any Key Asset sale. The Total Commitment shall also be automatically and permanently reduced by an amount equal to such portion of the proceeds of any equity issuance (other than pursuant to employee option plans and similar arrangements) by the Borrower and the Subsidiaries to any Person other than the Borrower and the Subsidiaries. The Commitment reductions required by this Section 2.7(b) shall be effective as of the date of closing or effectiveness of any transaction subject hereto; provided that with respect to any non-cash Net Proceeds, such Commitment reductions shall be effective as of the date of receipt of cash proceeds thereof. (c) On the Maturity Date, the Commitments shall automatically terminate and any outstanding Loans shall be due and payable in full. SECTION 2.8. Interest on Overdue Amounts; Alternative Rate of Interest. (a) If the Borrower shall default in the payment of the principal of or interest on any Loan or any other amount becoming due hereunder or under any other Loan Document, by acceleration or otherwise, the Borrower shall on demand from time to time pay interest, to the extent permitted by law, on such defaulted amount up to the date of actual payment (after as well as before judgment): (i) in the case of the payment of principal of or interest on a LIBO Rate Loan, at a rate 2% above the rate which would otherwise be payable under Section 2.5(b) until the last date of the Interest Period then in effect with respect to such Loan and thereafter as provided in clause (ii) below; and (ii) in the case of the payment of principal of or interest on a Reference Rate Loan or any other amount payable hereunder (other than principal of or interest on any LIBO Rate Loan to the extent referred to in clause (i) above), at a rate 2% above the Applicable Reference Rate. (b) In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a LIBO Rate Loan the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower absent manifest error) that (i) Dollar deposits in the requested principal amount of such LIBO Rate Loan are not generally available in the London Interbank Market, (ii) the rates at which Dollar deposits are being offered will not adequately and fairly reflect the cost to any Bank of making or maintaining such LIBO Rate Loan during such Interest Period or (iii) reasonable means do not exist for ascertaining the Applicable LIBO Rate, the Administrative Agent shall as soon as practicable thereafter give written, telecopied or telex notice of such determination to the Borrower and the other Banks, and any request by the Borrower for the making of a LIBO Rate Loan pursuant to Section 2.3 or 2.10 shall, until the Administrative Agent shall have advised the Borrower and the Banks that the circumstances giving rise to such notice no longer exist, be deemed to be a request for a Reference Rate Loan; provided, however, that if the Administrative Agent makes the determination specified in (ii) above, at the option of the Borrower such request shall be deemed to be a request for a Reference Rate Loan only from such Bank referred to in (ii) above; provided further, however, that such option shall not be available to the Borrower if the Administrative Agent makes the determination specified in (ii) above with respect to three or more Banks. Each determination of the Administrative Agent hereunder shall be conclusive absent manifest error. SECTION 2.9. Prepayment of Loans. (a) The Borrower shall have the right at any time and from time to time to prepay any of its Loans, in whole or in part, subject to the requirements of Section 2.13 but otherwise without premium or penalty, upon prior written or telex notice to the Administrative Agent by 10:30 a.m., New York City time, on the date of such prepayment; provided, however, that each such partial prepayment shall be in a minimum amount of $1,000,000 and an integral multiple of $1,000,000. (b) In the event of any termination of the Commitments, the Borrower shall repay or prepay all its outstanding Loans on the date of such termination. On the date of any partial reduction of the Commitments pursuant to Section 2.7, including as required by Section 2.7(b), the Borrower shall pay or prepay so much of their respective Loans as shall be necessary in order that the aggregate principal amount of the Loans (after giving effect to any other prepayment of Loans on such date) outstanding will not exceed the Total Commitment immediately following suchreduction. (c) All prepayments under this Section 2.9 shall be subject to Section 2.13. Each notice of prepayment delivered pursuant to paragraph (a) above shall specify the prepayment date and the principal amount of each Loan (or portion thereof) to be prepaid, shall be irrevocable and shall commit the Borrower upon giving such notice to prepay such Loan by the amount stated therein on the date stated therein. All prepayments shall be applied first to Reference Rate Loans and then to LIBO Rate Loans and shall be accompanied by accrued interest on the principal amount being prepaid to the date of prepayment. Any amounts prepaid may be reborrowed to the extent permitted by the terms of this Agreement. SECTION 2.10. Continuation and Conversion of Loans. The Borrower shall have the right, subject to the provisions of Section 2.8, (i) on three Business Days' prior irrevocable notice by the Borrower to the Administrative Agent, to continue or convert any type of Loans as or into LIBO Rate Loans, or (ii) with irrevocable notice by the Borrower to the Administrative Agent by 10:30 a.m. on the date of such proposed continuation or conversion, to continue or convert any type of Loans as or into Reference Rate Loans, in each case subject to the following further conditions: (a) each continuation or conversion shall be made pro rata as to each type of Loan to be continued or converted among the Banks in accordance with the respective amounts of their commitments and the notice given to the Administrative Agent by the Borrower shall specify the aggregate principal amount of Loans to be continued or converted; (b) in the case of a continuation or conversion of less than all Loans, the Loans continued or converted shall be in a minimum aggregate principal amount of $3,000,000 and an integral multiple of $1,000,000; (c) accrued interest on each Loan (or portion thereof) being continued or converted shall be paid by the Borrower at the time of continuation or conversion; (d) the Interest Period with respect to any Loan made in respect of a continuation or conversion thereof shall commence on the date of the continuation or conversion; (e) any portion of a Loan maturing or required to be prepaid in less than one month may not be continued as or converted into a LIBO Rate Loan; (f) a LIBO Rate Loan may be continued or converted on the last day of the applicable Interest Period and, subject to Section 2.13, on any other day; (g) no Loan (or portion thereof) may be continued as or converted into a LIBO Rate Loan if, after such continuation or conversion, an aggregate of more than 8 separate LIBO Rate Loans of any Bank would result, determined as set forth in Section 2.3(c); (h) no Loan shall be continued or converted if such Loan by any Bank would be greater than the amount by which its Commitment exceeds the amount of its other Loans at the time outstanding or if such Loan would not comply with the other provisions of this Agreement; and (i) any portion of a LIBO Rate Loan which cannot be converted into or continued as a LIBO Rate Loan by reason of clause (e) or (g) above shall be automatically converted at the end of the Interest Period in effect for such Loan into a Reference Rate Loan. The Administrative Agent shall communicate the information contained in each irrevocable notice delivered by the Borrower pursuant to this Section 2.10 to the other Banks promptly after its receipt of the same. The Interest Period applicable to any LIBO Rate Loan resulting from a continuation or conversion shall be specified by the Borrower in the irrevocable notice of continuation or conversion delivered pursuant to this Section 2.10; provided, however, that if no such Interest Period for a LIBO Rate Loan shall be specified, the Borrower shall be deemed to have selected an Interest Period of one month's duration. For purposes of this Section 2.10, notice received by the Administrative Agent from the Borrower after 10:30 a.m., New York time, on a Business Day shall be deemed to be received on the immediately succeeding Business Day. SECTION 2.11. Reserve Requirements; Change in Circumstances. (a) The Borrower shall pay to each Bank on the last day of each Interest Period for any LIBO Rate Loan so long as such Bank may be required to maintain reserves against Eurocurrency Liabilities as defined in Regulation D of the Board (or so long as such Bank may be required to maintain reserves against any other category of liabilities which includes deposits by reference to which the interest rate on any LIBO Rate Loan is determined as provided in this Agreement or against any category of extensions of credit or other assets of such Bank which includes any LIBO Rate Loan) an additional amount (determined by such Bank and notified to the Borrower), equal to the product of the following for each affected LIBO Rate Loan for each day during such Interest Period: (i) the principal amount of such affected LIBO Rate Loan outstanding on such day; and (ii) the remainder of (x) the product of Statutory Reserves on such date times the Applicable LIBO Rate on such day minus (y) the Applicable LIBO Rate on such day; and (iii) 1/360. Each Bank shall separately bill the Borrower directly for all amounts claimed pursuant to this Section 2.11(a). (b) Notwithstanding any other provision herein, if after the Closing Date any change in condition or applicable law or regulation or in the interpretation or administration thereof (whether or not having the force of law and including, without limitation, Regulation D of the Board) by any Governmental Authority charged with the administration or interpretation thereof shall occur which shall: (i) subject any Bank (which shall for the purpose of this Section include any assignee or lending office of any Bank) to any tax of any kind whatsoever with respect to its LIBO Rate Loans or other fees or amounts payable hereunder or change the basis of taxation of any of the foregoing (other than taxes (including Non-Excluded Taxes) described in Section 2.17 and other than any franchise tax or tax or other similar governmental charges, fees or assessments based on the overall net income of such Bank by the U.S. Federal government or by any jurisdiction in which such Bank maintains an office, unless the presence of such office is solely attributable to the enforcement of any rights hereunder or under any Security Agreement with respect to an Event of Default); (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by any Bank; (iii) impose on any such Bank or the London Interbank Market any other condition affecting this Agreement or LIBO Rate Loans made by such Bank; or (iv) impose upon any Bank any other condition with respect to any amount paid or to be paid by any Bank with respect to its LIBO Rate Loans or this Agreement; and the result of any of the foregoing shall be to increase the cost to any Bank of making or maintaining its LIBO Rate Loans or Commitment hereunder, or to reduce the amount of any sum (whether of principal, interest or otherwise) received or receivable by such Bank or to require such Bank to make any payment, in respect of any such Loan, in each case by or in an amount which such Bank in its sole judgment shall deem material, then the Borrower shall pay to such Bank on demand such an amount or amounts as will compensate the Bank for such additional cost, reduction or payment. (c) If any Bank shall have determined that the applicability of any law, rule, regulation, agreement or guideline adopted after the Closing Date regarding capital adequacy, or any change after the Closing Date in any such law, rule, regulation, agreement or guideline (whether such law, rule, regulation, agreement or guideline has been adopted) or in the interpretation or administration of any of the foregoing by any Governmental Authority charged with the interpretation or administration thereof, or compliance by any Bank (or any lending office of such Bank) or any Bank's holding company with any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority made or issued after the Closing Date, has or would have the effect of reducing the rate of return on such Bank's capital or on the capital of such Bank's holding company, if any, as a consequence of this Agreement or the Loans made pursuant hereto to a level below that which such Bank or such Bank's holding company could have achieved but for such applicability, adoption, change or compliance (taking into consideration such Bank's policies and the policies of such Bank's holding company with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank or such Bank's holding company for any such reduction suffered. (d) If and on each occasion that a Bank makes a demand for compensation pursuant to paragraph (a), (b) or (c) above, or under Section 2.17 (it being understood that a Bank may be reimbursed for any specific amount under only one such paragraph or Section) the Borrower may, upon at least three Business Days' prior irrevocable written or telex notice to each of such Bank and the Administrative Agent, in whole permanently replace the Commitment of such Bank; provided that such notice must be given not later than the 90th day following the date of a demand for compensation made by such Bank; and provided that the Borrower shall replace such Commitment with the Commitment of a commercial bank satisfactory to the Administrative Agent. Such notice from the Borrower shall specify an effective date for the termination of such Bank's Commitment which date shall not be later than the 180th day after the date such notice is given. On the effective date of any termination of such Bank's Commitment pursuant to this clause (d), the Borrower shall pay to the Administrative Agent for the account of such Bank (A) any Commitment Fees on the amount of such Bank's Commitment so terminated accrued to the date of such termination, (B) the principal amount of any outstanding Loans held by such Bank plus accrued interest on such principal amount to the date of such termination and (C) the amount or amounts requested by such Bank pursuant to clause (a), (b) or (c) above or Section 2.17, as applicable. The Borrower will remain liable to such terminated Bank for any loss or expense that such Bank may sustain or incur as a consequence of such Bank's making any LIBO Rate Loan or any part thereof or the accrual of any interest on any such Loan in accordance with the provisions of this Section 2.11(d) as set forth in Section 2.13. Upon the effective date of termination of any Bank's Commitment pursuant to this Section 2.11(d) such Bank shall cease to be a "Bank" hereunder; provided that no such termination of any such Bank's Commitment shall affect (i) any liability or obligation of the Borrower or any other Bank to such terminated Bank which accrued on or prior to the date of such termination or (ii) such terminated Bank's rights hereunder in respect of any such liability or obligation. (e) A certificate of a Bank (or Transferee) setting forth such amount or amounts as shall be necessary to compensate such Bank (or Transferee) as specified in paragraph (a), (b) or (c) (and in the case of paragraph (c), such Bank's holding company) above or Section 2.17, as the case may be, shall be delivered as soon as practicable to the Borrower, and in any event within 90 days of the change giving rise to such amount or amounts, and shall be conclusive absent manifest error. The Borrower shall pay each Bank the amount shown as due on any such certificate within 15 days after its receipt of the same. In preparing such a certificate, each Bank may employ such assumptions and allocations of costs and expenses as it shall in good faith deem reasonable. The failure of any Bank (or Transferee) to give the required 90 day notice shall excuse the Borrower from their obligations to pay additional amounts pursuant to such Sections incurred for the period that is 90 days or more prior to the date such notice was required to be given. (f) Failure on the part of any Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital within the 90 days required pursuant to Section 2.11(e) shall not constitute a waiver of such Bank's rights to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital for any period after the date that is 90 days prior to the date of the delivery of demand for compensation. The protection of this Section 2.11 shall be available to each Bank regardless of any possible contention of invalidity or inapplicability of the law, regulation or condition which shall have occurred or been imposed. The Borrower shall not be required to make any additional payment to any Bank pursuant to Section 2.11(a) or (b) in respect of any such cost, reduction or payment that could be avoided by such Bank in the exercise of reasonable diligence, including a change in the lending office of such Bank if possible without material cost to such Bank. Each Bank agrees that it will promptly notify the Borrower and the Administrative Agent of any event of which the responsible account officer shall have knowledge which would entitle such Bank to any additional payment pursuant to this Section 2.11. The Borrower agree to furnish promptly to the Administrative Agent official receipts evidencing any payment of any tax. SECTION 2.12. Change in Legality. (a) Notwith- standing anything to the contrary herein contained, if after the Closing Date any change in any law or regulation or in the interpretation thereof by any Governmental Authority charged with the administration or interpretation thereof shall make it unlawful for any Bank to make or maintain any LIBO Rate Loan or to give effect to its obligations as contemplated hereby with respect to any LIBO Rate Loan, then, by written notice to the Borrower and to the Administrative Agent, such Bank may: (i) declare that LIBO Rate Loans will not thereafter (for the duration of such unlawfulness or impracticality) be made by such Bank hereunder, whereupon the Borrower shall be prohibited from requesting LIBO Rate Loans from such Bank hereunder unless such declaration is subsequently withdrawn; and (ii) require that all outstanding LIBO Rate Loans made by it be converted to Reference Rate Loans, in which event (A) all such LIBO Rate Loans shall be automatically converted to Reference Rate Loans as of the end of the applicable Interest Period, unless an earlier conversion date is legally required, (B) all payments and prepayments of principal which would otherwise have been applied to repay the converted LIBO Rate Loans shall instead be applied to repay the Reference Rate Loans resulting from the conversion of such LIBO Rate Loans and (C) the Reference Rate Loans resulting from the conversion of such LIBO Rate Loans shall be prepayable only at the times the converted LIBO Rate Loans would have been prepayable, notwithstanding the provisions of Section 2.9. (b) Before giving any notice to the Borrower and the Administrative Agent pursuant to this Section 2.12, such Bank shall designate a different LIBOR Office if such designation will avoid the need for giving such notice and will not in the judgment of such Bank, be otherwise disadvantageous to such Bank. For purposes ofSection 2.12(a), a notice to the Borrower by any Bank shall be effective on the date of receipt by the Borrower. SECTION 2.13. Indemnity. The Borrower shall indemnify each Bank against any funding, redeployment or similar loss or expense which such Bank may sustain or incur as a consequence of (a) any event, other than a default by such Bank in the performance of its obligations hereunder, which results in (i) such Bank receiving or being deemed to receive any amount on account of the principal of any LIBO Rate Loan prior to the end of the Interest Period in effect therefor (any of the events referred to in this clause (i) being called a "Breakage Event") or (ii) any Loan to be made by such Bank not being made after notice of such Loan shall have been given by the Borrower hereunder or (b) any default in the making of any payment or prepayment of any amount required to be made hereunder. In the case of any Breakage Event, such loss shall include an amount equal to the excess, as reasonably determined by such Bank, of (i) its cost of obtaining funds for the Loan which is the subject of such Breakage Event for the period from the date of such Breakage Event to the last day of the Interest Period in effect (or which would have been in effect) for such Loan over (ii) the amount of interest (as reasonably determined by such Bank) that would be realized by such Bank in reemploying the funds so paid, prepaid or converted or not borrowed, continued or converted by making a LIBO Rate Loan in such principal amount and with a maturity comparable to such period. A certificate of any Bank setting forth any amount or amounts which such Bank is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. SECTION 2.14. Pro Rata Treatment. Except as permitted under any of Sections 2.8(b), 2.11, 2.12, 2.13 or 2.17, each borrowing under each type of Loan, each payment or prepayment of principal of the Loans, each payment of interest on the Loans, each other reduction of the principal or interest outstanding under the Loans, however achieved, including by setoff by any Person, each payment of the Commitment Fees, each reduction of the Commitments and each conversion or continuation of Loans shall be allocated pro rata among the Banks in the proportions that their respective Commitments bear to the Total Commitment (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Loans). Each Bank agrees that in computing such Bank's portion of any borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Bank's percentage of such borrowing to the next higher or lower whole Dollar amount. SECTION 2.15. Sharing of Setoffs. Each Bank agrees that if it shall, through the exercise of a right of banker's lien, setoff or counterclaim against the Borrower or pursuant to a secured claim under Section 506 of Title 11 of the United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Bank under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means obtain payment (voluntary or involuntary) in respect of any Loan held by it as a result of which the unpaid principal portion of the Loans held by it shall be proportionately less than the unpaid principal portion of the Loans held by any other Bank (other than as permitted under any of Sections 2.8(b), 2.11, 2.12, 2.13 or 2.17), it shall be deemed to have simultaneously purchased from such other Bank at face value, and shall promptly pay to such other Bank the purchase price for, a participation in the Loans held by such other Bank, so that the aggregate unpaid principal amount of the Loans and participation in Loans held by each Bank shall be in the same proportion to the aggregate unpaid principal amount of all Loans of the Borrower then outstanding as the principal amount of the Loans held by it prior to such exercise of banker's lien, setoff or counterclaim was to the principal amount of all Loans of the Borrower outstanding prior to such exercise of banker's lien, setoff or counterclaim or other event; provided, however, that if any such purchase or purchases or adjustments shall be made pursuant to this Section 2.15 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without interest. To the fullest extent permitted by applicable law, the Borrower expressly consents to the foregoing arrangements and agrees that any Bank holding a participation in a Loan deemed to have been so purchased may exercise any and all rights of banker's lien, setoff or counterclaim with respect to any and all moneys owing by the Borrower hereunder to such Bank as fully as if such Bank had made a Loan directly to the Borrower in the amount of such participation. SECTION 2.16. Payments. (a) Except as otherwise provided in this Agreement, all payments and prepayments to be made by the Borrower to the Banks hereunder, whether on account of Commitment Fees, payment of principal or interest on the Promissory Notes or other amounts at any time owing hereunder or under any other Loan Document, shall be made to the Administrative Agent at its office at 270 Park Avenue, New York, New York, for the account of the several Banks in immediately available funds. All such payments shall be made to the Administrative Agent as aforesaid not later than 10:30 a.m., New York City time, on the date due; and funds received after that hour shall be deemed to have been received by the Administrative Agent on the following Business Day. (b) As promptly as possible, but no later than 2:00 p.m., New York City time, on the date of each borrowing, each Bank participating in the Loans made on such date shall pay to the Administrative Agent such Bank's Applicable Percentage of such Loan plus, if such payment is received by the Administrative Agent after 2:00 p.m., New York City time, on the date of such borrowing, interest at a rate per annum equal to the rate in effect on such day, quoted by the Administrative Agent at its office at 270 Park Avenue, New York, New York, for the overnight "sale" to such Bank of Federal funds. At the time of, and by virtue of, such payment, such Bank shall be deemed to have made its Loan in the amount of such payment. The Administrative Agent agrees to pay any moneys, including such interest, so paid to it by the lending Banks promptly, but no later than 3:00 p.m., New York City time, on the date of such borrowing, to the Borrower in immediately available funds. (c) If any payment of principal, interest, Commitment Fee or any other amount payable to the Banks hereunder or under any Promissory Note shall fall due on a day that is not a Business Day, then (except in the case of payments of principal of or interest on LIBO Rate Loans, in which case such payment shall be made on the next preceding Business Day if the next succeeding Business Day would fall in the next calendar month) such due date shall be extended to the next succeeding Business Day, and interest shall be payable on principal in respect of such extension. (d) Unless the Administrative Agent shall have been notified by the Borrower prior to the date on which any payment or prepayment is due hereunder (which notice shall be effective upon receipt) that the Borrower does not intend to make such payment or prepayment, the Administrative Agent may assume that the Borrower has made such payment or prepayment when due and the Administrative Agent may in reliance upon such assumption (but shall not be required to) make available to each Bank on such date an amount equal to the portion of such assumed payment or prepayment such Bank is entitled to hereunder, and, if the Borrower has not in fact made such payment or prepayment to the Administrative Agent, such Bank shall, on demand, repay to the Administrative Agent the amount made available to such Bank, together with interest thereon in respect of each day during the period commencing on the date such amount was made available to such Bank and ending on (but excluding) the date such Bank repays such amount to the Administrative Agent, at a rate per annum equal to the rate, determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error). (e) All payments of the principal of or interest on the Loans or any other amounts to be paid to any Bank or the Administrative Agent under this Agreement or any of the other Loan Documents shall be made in Dollars, without reduction by reason of any currency exchange expense. SECTION 2.17. U.S. Taxes. (a) Any and all payments by the Borrower hereunder shall be made, in accordance with Section 2.16, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto imposed by the United States or any political subdivision thereof, excluding taxes imposed on the net income of the Administrative Agent or any Bank (or Transferee) and franchise taxes of the Administrative Agent or any Bank (or Transferee), as applicable, as a result of a connection between the jurisdiction imposing such taxes and the Administrative Agent or such Bank (or Transferee), as applicable, other than a connection arising solely from the Administrative Agent or such Bank (or Transferee), as applicable, having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Non-Excluded Taxes"). If the Borrower shall be required by law to deduct any Non-Excluded Taxes from or in respect of any sum payable hereunder to the Banks (or any Transferee) or the Administrative Agent, (i) the sum payable shall be increased by the amount necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.17) such Bank (or Transferee) or the Administrative Agent (as the case may be) shall receive an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant taxing authority or other Governmental Authority in accordance with applicable law; provided, however, that no Transferee of any Bank shall be entitled to receive any greater payment under this Section 2.17 than such Bank would have been entitled to receive with respect to the rights assigned, participated or otherwise transferred unless such assignment, participation or transfer shall have been made at a time when the circumstances giving rise to such greater payment did not exist. (b) In addition, the Borrower agrees to bear and to pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp or documentary taxes or any other similar excise taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document and any property taxes that arise from the enforcement of this Agreement or any other Loan Document ("Other Taxes"). (c) The Borrower will indemnify each Bank (or Transferee) and each Agent for the full amount of Non- Excluded Taxes and Other Taxes (including Non-Excluded Taxes or Other Taxes imposed on amounts payable under this Section 2.17) paid by such Bank (or Transferee) or such Agent, as the case may be, and any liability (including penalties, interest and expenses (including reasonable attorney's fees and expenses)) arising therefrom or with respect thereto. A certificate as to the amount of such payment or liability prepared by a Bank or Agent, or the Administrative Agent on behalf of such Bank or Agent, absent manifest error, shall be final, conclusive and binding for all purposes. Such indemnification shall be made within 30 days after the date the Bank (or Transferee) or the Agent, as the case may be, makes written demand therefor. (d) Within 30 days after the date of any payment of Non-Excluded Taxes or Other Taxes by the Borrower to the relevant Governmental Authority, the Borrower will furnish to the Administrative Agent, at its address referred to on the signature page, the original or a certified copy of a receipt issued by such Governmental Authority evidencing payment thereof. (e) At the time it becomes a party to this Agreement or a Transferee, each Bank (or Transferee) that is organized under the laws of a jurisdiction outside the United States shall (in the case of a Transferee, subject to the immediately succeeding sentence) deliver to the Borrower either a valid and currently effective Internal Revenue Service Form 1001 or Form 4224 or, in the case of a Bank (or Transferee) claiming exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest", a Form W-8, or any subsequent version thereof or successors thereto, (and if such Bank (or Transferee) delivers a Form W-8, a certificate representing that such Bank (or Transferee) is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of the Code)), properly completed and duly executed by such Bank (or Transferee) establishing that such payment is (i) not subject to United States Federal withholding tax under the Code because such payment is effectively connected with the conduct by such Bank (or Transferee) of a trade or business in the United States or (ii) totally exempt from (or in case of a Transferee, entitled to a reduced rate of) United States Federal withholding tax. Notwithstanding any other provision of this Section 2.17(e), no Transferee shall be required to deliver any form pursuant to this Section 2.17(e) that such Transferee is not legally able to deliver. In addition, each Bank (or Transferee) shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered, but only, in such case, to the extent such Bank (or Transferee) is legally able to do so. (f) Notwithstanding anything to the contrary contained in this Section 2.17, the Borrower shall not be required to pay any additional amounts to any Bank (or Transferee) in respect of United States Federal withholding tax pursuant to paragraph (a) above if the obligation to pay such additional amounts would not have arisen but for a failure by such Bank (or Transferee) to comply with the provisions of paragraph (e) above. (g) Any Bank (or Transferee) claiming any additional amounts payable pursuant to this Section 2.17 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by the Borrower or to change the jurisdiction of its applicable lending office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Bank, be otherwise disadvantageous to such Bank (or Transferee). (h) Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section 2.17 shall survive the payment in full of the principal of and interest on all Loans made hereunder. (i) Nothing contained in this Section 2.17 shall require any Bank (or Transferee) or the Administrative Agent to make available any of its income tax returns (or any other information that it deems to be confidential or proprietary). SECTION 2.18. FTX or Restricted Subsidiary as Limited Partner. Notwithstanding anything to the contrary contained in this Agreement or any Promissory Note, with respect to any direct liabilities of the Borrower to the Banks under this Agreement, its Promissory Notes or the other Loan Documents, FTX and any Restricted Subsidiary solely in its capacity as a partner of the Borrower shall be deemed to be limited, rather than general, partners of the Borrower. Subject to the foregoing, the Partnership Obligations shall be fully recourse to the Borrower and all its assets and properties. Nothing in this Section 2.18 shall be deemed in any way to derogate from or affect FTX's own direct obligations under this Agreement (including Section 7.1), the FTX Guaranty or the other Loan Documents. ARTICLE III Representations and Warranties SECTION 3.1. Representations and Warranties of the Partnership. As of the Funding Date, and each other date upon which such representations and warranties are required to be made or deemed made pursuant to Section 4.2(i), the Partnership represents and warrants to each of the Banks as follows: (a) Organization, Powers. The Partnership is duly organized, validly existing and in good standing under the laws of the State of Delaware, has the requisite power and authority to own its property and assets and to carry on its business as now conducted and is qualified to do business in every jurisdiction where such qualification is required, except where the failure so to qualify would not have a material adverse effect on the condition, financial or otherwise, of the Partnership. The Partnership has the power to execute, deliver and perform its obligations under this Agreement and any other Loan Documents executed and delivered or to be executed and delivered by the Part- nership at any time, to borrow hereunder, to execute and deliver the Promissory Notes to be delivered by it and to countersign and accept the terms of the FM Intercreditor Agreement. (b) Authorization. The execution, delivery and performance of this Agreement, any other Loan Documents executed and delivered or to be executed and delivered by the Partnership at any time, the Borrowings hereunder, the execution and delivery of the Promissory Notes to be delivered by it and the countersignature and the acceptance of the terms of the FM Intercreditor Agreement (i) have been duly authorized by all requisite partnership and, if required, partner action on the part of the Partnership and all requisite corporate, and, if required, shareholder, action on the part of FTX and the Company and (ii) will not (A) violate (x) any provision of law, statute, rule or regulation or the constitutive documents (including, without limitation, the Partnership Agreement (as it may be amended and in effect from time to time) or regulations of the Partnership, FTX or the Company, (y) any order of any court, or any rule, regulation or order of any other agency of government binding upon the Partnership, FTX or the Company or any of their assets or (z) any provisions of any indenture, agreement or other instrument to which the Partnership, FTX or the Company is a party, or by which the Partnership, FTX or the Company or any of their properties or assets are or may be bound, (B) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in (ii)(A)(z) above or (C) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any property or assets of the Partnership, FTX or the Company, except for the Mortgages and the FTX Security Agreement. (c) Governmental Approval. No registration with or consent or approval of, or other action by, any Federal, state or other governmental agency, authority or regulatory body is or will be required in connection with the execution, delivery and performance of this Agreement or any other Loan Document, the execution and delivery of the Promissory Notes or the Borrowings hereunder, except (i) such as have been made and obtained and are in full force and effect and (ii) such security filings and recordations as may be required in connection with the grant of any Lien contemplated by the Mortgages. (d) Enforceability. Each of this Agreement and the other Loan Documents executed and delivered by the Partnership constitutes (or, as to any Loan Document contemplated hereby to be executed and delivered by the Partnership at any future date, will constitute) a legal, valid and binding obligation of the Partnership, in each case enforceable in accordance with its terms (subject, as to the enforcement of remedies against the Partnership, to applicable bankruptcy, reorganization, insolvency, moratorium and similar laws affecting creditors' rights against the Partnership generally in connection with the bankruptcy, reorganization or insolvency of the Partnership or a moratorium or similar event relating to the Partnership). (e) Financial Statements. FTX has heretofore furnished to each of the Banks consolidated balance sheets and statements of operations and changes in retained earnings and cash flow of the Company as of and for the fiscal years ended December 31, 1993 and 1994, all audited and certified by Arthur Andersen LLP, independent public accountants, and included in the 1994 FM Form 10-K, and unaudited consolidated balance sheets and statements of operations and cash flow of the Company as of and for the fiscal quarter ended March 31, 1995, included in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995. In addition, the Partnership has heretofore furnished to each of the Banks unaudited consolidated balance sheets and statements of operations and cash flow for the Partnership as of and for the fiscal years ended December 31, 1993 and 1994, and for the fiscal quarter ended March 31, 1995, all certified by the Treasurer or another authorized Financial Officer of the Partnership. All such balance sheets and statements of operations and cash flow present fairly the financial condition and results of operations of the Company, the Partnership and their subsidiaries, as of the dates and for the periods indicated. The financial statements referred to in this Section 4.1(e) and the notes thereto disclose all material liabilities, direct or contingent, of the Company, the Partnership and their subsidiaries, as of the dates thereof and which are required to be shown on financial statements prepared in accordance with GAAP. The financial statements referred to in this Section 4.1(e) have been prepared in accordance with GAAP. There has been no material adverse change since December 31, 1994, in the businesses, assets, operations, prospects or condition, financial or otherwise, of (i) the Company, (ii) the Partnership, (iii) the Company and its subsidiaries taken as a whole or (iv) the Partnership and the Subsidiaries taken as a whole. (f) Litigation; Compliance with Laws, etc. (i) Except as disclosed in Schedule VI hereto or in the 1994 FM Form 10-K and any subsequent reports filed as of 20 days prior to the date hereof with the SEC on Form 10-Q or Form 8-K which have been delivered to the Banks, there are no actions, suits or proceedings at law or in equity or by or before any governmental instrumentality or other agency or regulatory authority now pending or, to the knowledge of the Partnership, threatened against or affecting the Partnership or any Subsidiary or the businesses, assets or rights of the Partnership or any Subsidiary (i) which involve this Agreement, any other Loan Document or any of the transactions contemplated hereby or thereby or (ii) as to which there is a rea- sonable possibility of an adverse determination and which, if adversely determined, could, individually or in the aggregate, materially impair the ability of the Partnership to conduct its business substantially as described in the 1994 FM Form 10-K, or materially and adversely affect the business, assets, operations, prospects or condition, financial or otherwise, of the Partnership, or impair the validity or enforceability of, or the ability of the Partnership to perform its obligations under, this Agreement or any other Loan Document. (ii) Neither the Partnership nor any Subsidiary is in violation of any law, or in default with respect to any judgment, writ, injunction, decree, rule or regulation of any court or governmental agency or instrumentality, where such violation or default could have a Material Adverse Effect on the business, assets, operations or condition, financial or otherwise, of the Partnership. Without limitation of the foregoing, the Partnership and each Subsidiary has complied with all Environmental Laws where any such noncompliance could have a Material Adverse Effect on the business, assets, operations or condition, financial or otherwise, of the Partnership. Neither the Partnership nor any Subsidiary has received notice of any material failure so to comply. The Partnership's and the Subsidiaries' plants do not handle any Hazardous Materials in violation of any Environmental Law where any such violation could have a Material Adverse Effect on the business, assets, operations or condition, financial or otherwise, of the Partnership. The Partnership and FTX are aware of no events, conditions or circumstances involving contaminants or employee health or safety that could reasonably be expected to result in material liability on the part of the Partnership or any Subsidiary. (g) Title, etc. The Partnership has good and defensible title to its 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 Section 4.2(d) 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 the Partnership or the respective Subsidiary 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. (h) Federal Reserve Regulations; Use of Proceeds. (i) Neither the Partnership nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock. (ii) No part of the proceeds of the Loans will be used, whether directly or indirectly, and whether imme- diately, incidentally or ultimately, for any purpose which entails a violation of, or which is inconsistent with, the provisions of the Regulations of the Board, including, without limitation, Regulations G, U or X thereof. (iii) The Partnership will use the proceeds of all Loans made to it to refinance existing outstandings under the Existing FM Credit Agreement and to finance general partnership purposes of the Partnership and the Subsidiaries, subject to and in accordance with operating budgets to be reviewed and approved by the Required Banks. (i) Taxes. The Partnership and the Subsidiaries have filed or caused to be filed all Federal, state and local tax and information returns which are required to be filed by them, and have paid or caused to be paid all taxes shown to be due and payable on such returns or on any assessments received by any of them, other than any taxes or assessments the validity of which the Partnership or any Subsidiary is contesting in good faith by appropriate proceedings, and with respect to which the Partnership or such Subsidiary shall, to the extent required by GAAP, have set aside on its books adequate reserves. (j) Employee Benefit Plans. Each of the Borrower and its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, could materially and adversely affect the financial condition and operations of the Borrower and the ERISA Affiliates, taken as a whole. The present value of all benefit liabilities under each Plan, determined on a plan termination basis (based on those assumptions used for financial disclosure purposes in accordance with Statement of Financial Accounting Standards No. 87 of the Financial Accounting Standards Board ("SFAS 87") did not, as of the last annual valuation date applicable thereto, exceed by more than $5,000,000 the value of the assets of such Plan, and the present value of all benefit liabilities of all underfunded Plans, determined on a plan termination basis (based on those assumptions used for financial disclosure purposes in accordance with SFAS 87) did not, as of the last annual valuation dates applicable thereto, exceed by more than $5,000,000 the value of the assets of all such underfunded Plans. (k) Environmental Matters. (1) The properties owned or operated by the Borrower and the Subsidiaries (the "Properties") and all operations of the Borrower and the Subsidiaries are in compliance, and in the last three years have been in compliance, with all Environmental Laws and all necessary Environmental Permits have been obtained and are in effect, except to the extent that such non- compliance or failure to obtain any necessary permits, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; (2) there have been no Releases or threatened Releases at, from, under or proximate to the Properties or otherwise in connection with the operations of the Borrower or the Subsidiaries, which Releases or threatened Releases, in the aggregate, could reasonably be expected to result in a Material Adverse Effect; (3) neither the Borrower nor any of the Subsidiaries has received any notice of an Environmental Claim in connection with the Properties or the operations of the Borrower or the Subsidiaries or with regard to any Person whose liabilities for environmental matters the Borrower or the Subsidiaries has retained or assumed, in whole or in part, contractually, by operation of law or otherwise, which, in the aggregate, could reasonably be expected to result in a Material Adverse Effect, nor do the Borrower or the Subsidiaries have reason to believe that any such notice will be received or is being threatened; and (4) Hazardous Materials have not been transported from the Properties, nor have Hazardous Materials been generated, treated, stored or disposed of at, on or under any of the Properties in a manner that could give rise to liability under any Environmental Law, nor have the Borrower or the Subsidiaries retained or assumed any liability, contractually, by operation of law or otherwise, with respect to the generation, treatment, storage or disposal of Hazardous Materials, which transportation, generation, treatment, storage or disposal, or retained or assumed liabilities, in the aggregate, could reasonably be expected to result in a Material Adverse Effect. (5) The Partnership and the Subsidiaries do not have any ownership or control rights in respect of the properties listed on Schedule IV which could result in any environmental or reclamation liability for the Partnership and the Subsidiaries relating to such properties. (l) Investment Company Act. Neither the Partnership nor any Subsidiary is an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940. (m) Public Utility Holding Company Act. Neither the Partnership nor any Subsidiary is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. (n) Subsidiaries. Schedule V constitutes a complete and correct list as of the Closing Date or the date of any update thereof required by Section 4.1(a)(12) of all the Subsidiaries with at least $1,000,000 in total assets, indicating the jurisdiction of incorporation or organization of each such Subsidiary and the percentage of voting shares or units owned on such date directly or indirectly by the Partnership in each such Subsidiary. The Partnership owns as of such date, free and clear of all Liens (other than those expressly permitted by this Agreement), the percentage of voting shares or units outstanding of the Subsidiaries shown on Schedule V, and all such shares or units are validly issued and fully paid. (o) Solvency. (i) The fair salable value of the assets of the Partnership and the Subsidiaries will exceed the amount that will be required to be paid on or in respect of the Indebtedness and other obligations of the Partnership and the Subsidiaries as they become absolute and mature. (ii) The Partnership and the Subsidiaries will not have unreasonably small capital to carry out their businesses as conducted or as proposed to be conducted. (iii) The Partnership, on a consolidated basis, does not intend to, and does not believe that it will, incur Indebtedness and other obligations beyond its ability to pay such Indebtedness and obligations as they mature (taking into account the timing and amounts of cash to be received by it and the amounts to be payable on or in respect of such Indebtedness and obligations). (p) Key Assets. Schedule III sets forth properties of the Partnership constituting the Key Assets. (q) No Material Misstatements. No information, report (including any exhibit, schedule or other attachment thereto or other document delivered in connection therewith), financial statement, exhibit or schedule prepared or furnished by the Borrower or the Subsidiaries to the Administrative Agent or any Bank in connection with this Agreement or any of the other Loan Documents or included therein contained or contains any material misstatement of fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. SECTION 3.2. Representations and Warranties of FTX. As of the Funding Date, and each other date upon which such representations and warranties are required to be made or deemed made pursuant to Section 4.2(i), FTX represents and warrants to each of the Banks as follows: (a) Organization, Powers. FTX is duly organized, validly existing and in good standing under the laws of the State of Delaware, has the requisite power and authority to own its property and assets and to carry on its business as now conducted and is qualified to do business in every jurisdiction where such qualification is required, except where the failure so to qualify would not have a material adverse effect on the condition, financial or otherwise, of FTX. FTX has the power to execute, deliver and perform its obligations under this Agreement, the FM Intercreditor Agreement, the FTX Guaranty, the FTX Security Agreement and any other Loan Document executed and delivered or to be executed and delivered by it at any time, to guarantee the Loans pursuant to the FTX Guaranty and to countersign and accept the terms of the FTX Intercreditor Agreement. (b) Authorization. The execution, delivery and performance of this Agreement (including, without limi- tation, performance of obligations set forth in Sec- tion 7.1), the FM Intercreditor Agreement, the FTX Guaranty, the FTX Security Agreement and any other Loan Documents executed and delivered or to be executed and delivered by FTX at any time, the guarantee of the Loans pursuant to the FTX Guaranty and the countersignature and acceptance of the terms of the FTX Intercreditor Agreement (i) have been duly authorized by all requisite corporate and, if required, shareholder, action on the part of FTX and (ii) will not (A) violate (x) any provision of law, statute, rule or regulation or the certificate or articles of incorporation or other constitutive documents or the By-laws or regulations of FTX, (y) any order of any court, or any rule, regulation or order of any other agency of government binding upon FTX or (z) any provisions of any indenture, agreement or other instrument to which FTX is a party, or by which FTX or any of its properties or assets are or may be bound, (B) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in (ii)(A)(z) above or (C) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any property or assets of FTX, except pursuant to the FTX Security Agreement. (c) Governmental Approval. No registration with or consent or approval of, or other action by, any Federal, state or other governmental agency, authority or regulatory body is or will be required in connection with the execution, delivery and performance of this Agreement or any other Loan Document, or the guarantee of the Loans pursuant to the FTX Guaranty except (i) such as have been made and obtained and are in full force and effect and (ii) such security filings and recordations as may be required in connection with the grant of any Lien under the FTX Security Agreement. (d) Enforceability. Each of this Agreement and the other Loan Documents executed and delivered by FTX constitutes (or, as to any Loan Document contemplated hereby to be executed and delivered by FTX at any future date, will constitute) a legal, valid and binding obligation of FTX, in each case enforceable in accordance with its terms (subject, as to the enforcement of remedies against FTX, to applicable bankruptcy, reorganization, insolvency, moratorium and similar laws affecting creditors' rights against FTX generally in connection with the bankruptcy, reorganization or insolvency of FTX or a moratorium or similar event relating to FTX). (e) Litigation; Compliance with Laws; etc. (i) Except as disclosed in the 1994 FTX Form 10-K and any subsequent reports filed as of 20 days prior to the date hereof with the SEC on Form 10-Q or Form 8-K which have been delivered to the Banks, there are no actions, suits or proceedings at law or in equity or by or before any governmental instrumentality or other agency or regulatory authority now pending or, to the knowledge of FTX, threatened against or affecting FTX or any of its subsidiaries or the businesses, assets or rights of FTX or any of its subsidiaries (i) which involve this Agreement or any other Loan Document or any of the transactions contemplated hereby or thereby or (ii) as to which there is a reasonable possibility of an adverse determination and which, if adversely determined, could, individually or in the aggregate, materially impair the ability of FTX or FRP to conduct its business substantially as now conducted, or materially and adversely affect the businesses, assets, operations, prospects or condition, financial or otherwise, of FTX or FRP, or impair the validity or enforceability of, or the ability of FTX to perform its obligations under, this Agreement or any other Loan Document. (f) Representations Incorporated By Reference from the FTX Credit Agreement. Section 3.1 of the FTX Credit Agreement (other than paragraphs (a), (b), (c), (d), (f)(i), (h)(ii) and (iii) and (p) thereof) is hereby incorporated by reference herein with the same force and effect as though fully set forth herein in its entirety and shall be deemed made each time the representations in this Section 3.2 are made or deemed made. (g) Florida Environmental Liability. The Partnership and the Subsidiaries do not have any ownership or control rights in respect of the properties listed on Schedule IV which could result in any environmental or reclamation liability for the Partnership and the Subsidiaries relating to such properties. (h) No Material Misstatements. No information, report (including any exhibit, schedule or other attachment thereto or other document delivered in connection therewith), financial statement, exhibit or schedule prepared or furnished by FTX or its subsidiaries to the Administrative Agent or any Bank in connection with this Agreement or any of the other Loan Documents or included therein or any information provided to Cravath, Swaine & Moore in connection with the preparation of the environmental due diligence summary memorandum referred to in paragraph (m) of Article IV of the FTX Credit Agreement contained or contains any material misstatement of fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. SECTION 3.3. Representations and Warranties of FCX. As of the Funding Date, and each other date upon which such representations and warranties are required to be made or deemed made pursuant to Section 4.2(i), FCX represents and warrants to each of the Banks as follows: (a) Organization, Powers. FCX is duly organized, validly existing and in good standing under the laws of the State of Delaware and FI is duly organized and validly existing under the laws of Indonesia and is duly domesticated under the laws of the State of Delaware. Each of FCX and FI has the requisite power and authority to own its property and assets and to carry on its business as now conducted and is qualified to do business in every jurisdiction where such qualification is required, except where the failure so to qualify would not have a material adverse effect on the condition, financial or otherwise, of FCX or FI. FCX has the power to execute, deliver and perform its obligations under this Agreement, the FM Intercreditor Agreement, the FCX Guaranty, the FCX Pledge Agreements and any other Loan Document executed and delivered or to be executed and delivered by it at any time, to guarantee the Loans pursuant to the FCX Guaranty and to countersign and accept the terms of the FCX Intercreditor Agreement. (b) Authorization. The execution, delivery and performance of this Agreement, the FM Intercreditor Agreement, the FCX Guaranty, the FCX Pledge Agreement and any other Loan Documents executed and delivered or to be executed and delivered by FCX at any time, the guarantee of the Loans pursuant to the FCX Guaranty and the countersignature and acceptance of the terms of the FCX Intercreditor Agreement (i) have been duly authorized by all requisite corporate and, if required, shareholder, action on the part of FCX and (ii) will not (A) violate (x) any provision of law, statute, rule or regulation or the certificate or articles of incorporation or other constitutive documents or the By-laws or regulations of FCX, (y) any order of any court, or any rule, regulation or order of any other agency of government binding upon FCX or (z) any provisions of any indenture, agreement or other instrument to which FCX is a party, or by which FCX or any of its properties or assets are or may be bound, (B) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in (ii)(A)(z) above or (C) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any property or assets of FCX, except pursuant to the FCX Pledge Agreements. (c) Governmental Approval. No registration with or consent or approval of, or other action by, any Federal, state or other governmental agency, authority or regulatory body is or will be required in connection with the execution, delivery and performance of this Agreement or any other Loan Document, or the guarantee of the Loans pursuant to the FCX Guaranty except (i) such as have been made and obtained and are in full force and effect and (ii) such security filings and recordations as may be required in connection with the grant of any Lien under the FCX Pledge Agreements. (d) Enforceability. Each of this Agreement and the other Loan Documents executed and delivered by FCX constitutes (or, as to any Loan Document contemplated hereby to be executed and delivered by FCX at any future date, will constitute) a legal, valid and binding obligation of FCX, in each case enforceable in accordance with its terms (subject, as to the enforcement of remedies against FCX, to applicable bankruptcy, reorganization, insolvency, moratorium and similar laws affecting creditors' rights against FCX generally in connection with the bankruptcy, reorganization or insolvency of FCX or a moratorium or similar event relating to FCX). (e) Litigation; Compliance with Laws; etc. (i) Except as disclosed in the 1994 FCX Form 10-K and any subsequent reports filed as of 20 days prior to the date hereof with the SEC on Form 10-Q or Form 8-K which have been delivered to the Banks, there are no actions, suits or proceedings at law or in equity or by or before any governmental instrumentality or other agency or regulatory authority now pending or, to the knowledge of FCX, threatened against or affecting FCX or any of its subsidiaries or the businesses, assets or rights of FCX or any of its subsidiaries (i) which involve this Agreement or any other Loan Document or any of the transactions contemplated hereby or thereby or (ii) as to which there is a reasonable possibility of an adverse determination and which, if adversely determined, could, individually or in the aggregate, materially impair the ability of FCX or FI to conduct its business substantially as now conducted, or materially and adversely affect the businesses, assets, operations, prospects or condition, financial or otherwise, of FCX or FI, or impair the validity or enforceability of, or the ability of FCX to perform its obligations under, this Agreement or any other Loan Document. (f) Representations Incorporated By Reference from the FCX Credit Agreement. Section 4.1 of the FCX Credit Agreement (other than paragraphs (a), (b), (c), (d), (f)(i), (h)(ii) and (iii) and (q) thereof and the first sentence of paragraph (o) thereof) is hereby incorporated by reference herein with the same force and effect as though fully set forth herein in its entirety and shall be deemed made each time the representations in this Section 3.3 are made or deemed made. (g) No Material Misstatements. No information, report (including any exhibit, schedule or other attachment thereto or other document delivered in connection therewith), financial statement, exhibit or schedule prepared or furnished by FCX or its subsidiaries to the Administrative Agent or any Bank in connection with this Agreement or any of the other Loan Documents or included therein or any information provided to Cravath, Swaine & Moore in connection with the preparation of the environmental due diligence summary memorandum referred to in Section 6.1(l) of the FCX Credit Agreement contained or contains any material misstatement of fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. ARTICLE IV Covenants SECTION 4.1. Affirmative Covenants of the Partnership. Commencing as of the Funding Date and so long thereafter as any Bank shall have any Commitment hereunder or the principal of or interest on any Loan shall be unpaid, unless the Required Banks shall have otherwise consented in writing: (a) Financial Statements, etc. The Partnership shall furnish each Bank: (1) within 95 days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries (including the Partnership) as at the close of such fiscal year and consolidated statements of operations and of cash flow of the Company and its subsidiaries for such year, with the opinion thereon of Arthur Andersen LLP or other independent public accountants of national standing selected by the Company; (2) within 50 days after the end of each of the first three quarters of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries as at the end of such quarter and consolidated statements of operations of the Company and its subsidiaries for such quarter and consolidated statements of operations and of cash flow of the Company for the period from the beginning of the fiscal year to the end of such quarter, certified by the Treasurer or other authorized financial or accounting officer of FTX; (3) within 95 days after the end of each fiscal year of the Partnership, a consolidated unaudited balance sheet of the Partnership and the Subsidiaries as at the close of such fiscal year and consolidated unaudited statements of operations and of cash flow of the Partnership and the Subsidiaries for such year, certified by the Treasurer or other authorized financial or accounting officer of FTX; (4) within 50 days after the end of each of the first three quarters of each fiscal year of the Partnership, a consolidated balance sheet of the Partnership and the Subsidiaries as at the end of such quarter and consolidated statements of operations of the Partnership and the Subsidiaries for such quarter and consolidated statements of operations and of cash flows of the Partnership and the Subsidiaries for the period from the beginning of the fiscal year to the end of such quarter, certified by the Treasurer or other authorized financial or accounting officer of FTX; (5) at the time of the provision of the financial statements referred to in clauses (1) through (4) above, an update of Schedule V to correct, add or delete any required information in reasonable detail satisfactory to the Administrative Agent demonstrating compliance with the covenant contained in Section 4.2(o); (6) promptly after their becoming available, (a) copies of all financial statements, reports and proxy statements which the Company shall have sent to its 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 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 the Partnership or any of the Subsidiaries; (7) within 95 days after the end of each fiscal year of the Partnership, a certificate by a Financial Officer of the Partnership, 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; (8) promptly upon the occurrence of any ERISA Event, Event of Default, Default or the commencement of any proceeding regarding the Company, the Partnership or any Subsidiary under any Federal or state bankruptcy law, notice thereof, describing the same in reasonable detail; (9) promptly upon the occurrence of any development that, in the judgment of the Partnership, has resulted in, or could reasonably be anticipated to result in, a material adverse effect on the business, assets, operations or financial condition of the Partnership or its ability to comply with its obligations under the Loan Documents, notice thereof, describing the same in reasonable detail; (10) promptly after any sale of a Key Asset, information identifying such Key Asset, the purchaser and the purchase price therefor, together with any other information requested by the Administrative Agent; (11) fifteen days prior to the grant of any permitted Liens in favor of FTX or FCX, copies of all agreements, documents or instruments pertaining thereto; (12) promptly after the execution thereof and subject to Section 4.2(b) and Section 4.4(b), a copy, certified by a Responsible Officer, of each amendment, supplement, change or waiver to any Material Agreement (including, without limitation, to the Partnership Agreement); and (13) from time to time, such further information regarding the business, affairs and financial condition of the Company, the Partnership or any Subsidiary as any Bank may reasonably request. (b) Obligations, Taxes and Claims. The Partnership shall, and shall cause each Subsidiary to, pay its Indebtedness and other obligations promptly and in accordance with their terms and pay and discharge all taxes, assessments and governmental charges or levies imposed upon it, upon its income or profits or upon any property belonging to it, prior to the date on which material penalties attach thereto; provided that neither the Partnership nor any Subsidiary shall be required to pay any such tax, assessment, charge or levy, the payment of which is being contested in good faith by proper proceedings and with respect to which the Partnership or such Subsidiary shall have, to the extent required by GAAP, set aside on its books adequate reserves. (c) Maintenance of Existence; Conduct of Business. The Partnership shall preserve and maintain its independent legal existence as a partnership; preserve and maintain all its rights, privileges and franchises necessary or desirable in the normal conduct of its business; segregate its individual assets and business functions from those of FTX, its subsidiaries, the Company and its other subsidiaries, if any (which shall not prohibit FTX from acting as managing general partner of the Partnership), including without limitation segregating its bank and investment accounts from those of FTX, its subsidiaries, the Company or its other subsidiaries, if any; maintain and preserve all property material to the conduct of its business and keep such property in good repair, working order and condition and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times. (d) Compliance with Applicable Laws. The Partnership shall, and shall cause each Subsidiary to, comply with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, a breach of which would materially and adversely affect the consolidated financial condition or business of the Partnership and the Subsidiaries, except where contested in good faith and by proper proceedings and with respect to which the Partnership shall have, to the extent required by GAAP, set aside on its books adequate reserves. (e) Litigation. The Partnership shall promptly give to each Bank notice in writing of all litigation and all proceedings before any governmental or regulatory agencies or arbitration authorities affecting the Partnership or any Subsidiary, except those which do not relate to the Loan Documents and which, if adversely determined, would not have a Material Adverse Effect. (f) ERISA. The Borrower shall, and shall cause each of the Subsidiaries to, comply with all material respects with the applicable provisions of ERISA and the Code and furnish to the Administrative Agent as soon as possible, and in any event within 30 days after any Responsible Officer of the Borrower or any ERISA Affiliate knows or has reason to know that, any ERISA Event has occurred that alone or together with any other ERISA Event could reasonably be expected to result in liability of the Borrower in an aggregate amount exceeding $25,000,000 or requires payment exceeding $10,000,000 in any year, a statement of a Financial Officer of the Borrower setting forth details as to such ERISA Event and the action that the Borrower proposes to take with respect thereto. (g) Insurance. The Partnership and each Subsidiary shall (i) keep its insurable properties adequately insured at all times; (ii) maintain such other insurance, to such extent and against such risks, including fire, flood and other risks insured against by extended coverage, as is customary with persons in the same or similar businesses; (iii) maintain in full force and effect public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled by it in such amount as it shall reasonably deem necessary; and (iv) maintain such other insurance as may be required by law. (h) Access to Premises and Records. The Partnership and each Subsidiary shall maintain financial records in accordance with GAAP, and, at all reasonable times and as often as any Bank may reasonably request, permit representatives of any Bank to have access to its financial records and its premises and to the records and premises of any of its subsidiaries, if any, and to make such excerpts from such records as such representatives deem necessary and to discuss its affairs, finances and accounts with its officers, if any, and the officers of FTX, as managing general partner, and the Partnership's independent certified public accountants or other parties preparing consolidated or consolidating statements for the Partnership or on its behalf. (i) Compliance with Environmental Laws. The Borrower shall comply, and cause the Subsidiaries and all lessees and other Persons occupying the Properties to comply, in all material respects with all Environmental Laws and Environmental Permits applicable to its operations and Properties; obtain and renew all material Environmental Permits necessary for its operations and Properties; and conduct any Remedial Action in accordance with Environmental Laws; provided, however, that neither the Borrower nor any of the Subsidiaries shall be required to undertake any Remedial Action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances. (j) Preparation of Environmental Reports. If a default caused by reason of a breach of Section 3.1(k) or 4.1(i) shall have occurred and be continuing, at the request of the Required Banks through the Administrative Agent, the Borrower shall provide to Banks within 45 days after such request, at the expense of the Borrower, an environmental site assessment report for the Properties (which are the subject of such default) prepared by an environmental consulting firm acceptable to the Administrative Agent, indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance or Remedial Action in connection with such Properties. SECTION 4.2. Negative Covenants of the Partnership. Commencing as of the Funding Date and so long thereafter as any Bank shall have any Commitment hereunder or the principal of or interest on any Loan shall be unpaid, with- out the prior written consent of the Required Banks: (a) Conflicting Agreements. The Partnership shall not, and shall not permit any Subsidiary to, enter into any agreement containing any provision which (i) would be violated or breached by the performance of its obligations under any Loan Document or under any instrument or document delivered or to be delivered by it hereunder or thereunder or in connection herewith or therewith or (ii) would prohibit or restrict the payments of dividends or other distributions by any Subsidiary. (b) Material Agreements. The Partnership shall not amend, supplement, change, terminate or waive any material provision of any Material Agreement unless the Banks shall have received 30 days' notice of such amendment, supplement, change, termination or waiver and the Required Banks shall not have objected thereto on the ground that it would, in their judgment, adversely affect the rights or interests of the Banks; provided that, if the Partnership shall not have given such 30 days' notice, the Partnership shall not amend, supplement, change, terminate or waive any material provision of any Material Agreement unless the Required Banks shall have given their written consent thereto. (c) Mergers and Consolidations. The Partnership shall not, and shall not permit any Subsidiary to, merge into or consolidate with any other person or permit any other person to merge into or consolidate with it, except that if at the time thereof and immediately after giving effect thereto no Event of Default or Default shall have occurred and be continuing (i) any wholly owned Subsidiary may liquidate into the Partnership in a transaction in which the Partnership is the surviving entity, (ii) any wholly owned Subsidiary may merge into or consolidate with any other wholly owned Subsidiary in a transaction in which the surviving entity is a wholly owned Subsidiary and no person other than the Partnership or a wholly owned Subsidiary receives any consideration and (iii) any Subsidiary may merge into or consolidate with any other person in a transaction in which the surviving person is a Subsidiary of which the Partnership owns a percentage of the equity, directly or indirectly, at least equal to the percentage of the equity that it owned in the merging or consolidating Subsidiary immediately prior to such merger or consolidation and in which no person other than the Partnership receives any consideration, except as permitted by paragraph (D) of Section 4.2(e). (d) Liens. The Partnership shall not, nor shall it permit any Subsidiary to, create, incur, permit or suffer to exist any Lien upon any of their respective properties or assets (including without limitation stock or other securities of, or ownership interest in, any person including any Subsidiary) now owned or hereafter acquired or on any income or revenues or rights in respect of any thereof, except: (i) materialmen's, suppliers', tax and other similar Liens arising in the ordinary course of the Partnership's or such Subsidiary's business securing obligations which are not overdue or are being contested in good faith by appropriate proceedings and as to which adequate reserves have been set aside on its books to the extent required by GAAP; Liens arising in connection with workers' compensation, unemployment insurance and progress payments under government contracts; and other Liens incident to the ordinary conduct of the Partnership's or such Subsidiary's business or the ordinary operation of property or assets and not incurred in connection with the obtaining of any Indebtedness and which do not in the aggregate materially detract from the value of their assets or materially impair the use thereof in the operation of their businesses; (ii) zoning restrictions, easements, rights-of- way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Partnership or any Subsidiary; (iii) Liens of lessors of property (in such capacity) leased by the Partnership, which Liens are limited to the property leased thereunder; (iv) Liens on property of the Partnership in favor of FTX and FCX securing the obligations of the Partnership under the FTX/FMPO Credit Agreement and the Reimbursement Agreement on the real estate assets of the Partnership (excluding the TCB Collateral) that are subject to, and granted in accordance with and on the terms of, the FM Intercreditor Agreement; and (v) as of the exercise of either of the options referred to in Sections 4.2(g)(ii)(A) and (B), (A) Liens in favor of FTX and FCX on the TCB Borrower Properties securing the Guaranties and (B) Liens in favor of TCB on the TCB Collateral securing the obligations of the TCB Borrower under the TCB Credit Agreement. (e) Investments, Loans, Advances and Acquisitions. The Partnership shall not, and shall not permit any Subsidiary to, (i) purchase, lease or otherwise acquire (in one transaction or a series of transactions) all or any substantial part of the assets of, (ii) purchase, hold or acquire any capital stock, evidences of indebtedness or other securities of, (iii) make or permit to exist any loans or advances to or (iv) make or permit to exist any investment or any other interest in, any other Person, or contribute assets to any joint ventures with parties which are not the Borrower or a Subsidiary, except: (A) investments by the Partnership existing on the Closing Date in the capital stock of the Subsidiaries; (B) loans by the Partnership to the TCB Borrower or the Circle C Subsidiary not in excess of the interest expense payable by such entity on the TCB Credit Agreement; (C) (i) advances by the Partnership to the TCB Borrower, the Circle C Subsidiary or any other Sub- sidiary in the amount of such Subsidiary's reasonable operating expenses (including development costs for the Circle C Property); provided that such advances shall be made only upon or after the incurrence of such expenses and only to the extent utilized to pay such expenses within thirty days of the date of any such advance; and (ii) investments in joint ventures and development arrangements, not in excess of an aggregate amount of $10,000,000 for all such advances and investments made pursuant to this clause (C); (D) Permitted Investments; and (E) if at the time thereof and after giving effect thereto no Default or Event of Default shall have occurred and be continuing, the Partnership may acquire, for nominal consideration only, assets constituting, or the capital stock of, TCB Borrower, subject to 20 days' prior written notice to the Banks of such acquisition describing the terms of such acquisition and the prior approval of such terms of the Required Banks. (f) Distributions. The Partnership shall not, and shall not permit any Subsidiary to, (i) pay, directly or indirectly, or make any distribution (by reduction of Partnership equity (including any option, warrant or other right to acquire any Partnership equity), capital or otherwise) or any dividend, whether in cash, property, securities or a combination thereof, with respect to any Partnership equity (including any option, warrant or other right to acquire any Partnership equity), (ii) directly or indirectly make any redemption, repurchase or repayment of Partnership equity (including any option, warrant or other right to acquire any Partnership equity), (iii) purchase, redeem or acquire any capital stock of the Company (or any option, warrant or other right to acquire any such capital stock) or (iv) make any payment, redemption, repurchase or other acquisition or retirement for value of any Indebtedness of the Company (which shall not include any Indebtedness of the Partnership or of any Subsidiary); provided, however, that (i) any Subsidiary may declare and pay dividends or make other distributions to the Partner- ship and (ii) the Partnership may make such distributions from time to time to the extent (but only to the extent) required to enable the Company to pay (A) all reasonable out-of-pocket expenses arising under the Administrative Services Agreement (as it may be amended as permitted hereby and in effect from time to time) which have become due at or prior to the time of such distribution, (B) the Company's actual current combined federal, state and local cash tax liability (including estimated payments required by applicable law) arising from or attributed to the Company's Partnership equity interest, but only to the extent such distributions are in fact utilized to pay such taxes within 30 days of the date of any distribution, and (C) all other reasonable and necessary general and administrative cash expenses, not in excess of $2,000,000 per 12-month period, relating to the management of the Company's Partnership equity interest. (g) Indebtedness. Neither the Partnership nor any Subsidiary shall incur, create, assume or permit to exist any Indebtedness of any of them except: (i) Indebtedness of the Partnership not to exceed $68,000,000 in aggregate principal amount outstanding on the date hereof incurred pursuant to the Pel-Tex Agreements, but not any extensions, renewals or replacements of such Indebtedness; and provided that no payments on the principal amount of such Indebtedness may be made, directly or indirectly, from proceeds of the Loans; (ii) in the event the Partnership shall exercise its option pursuant to the Agreement dated as of Feb- ruary 6, 1992, among Steven P. Bartlett (the sole shareholder of the TCB Borrower), the Partnership (as successor to Longhorn Properties Inc., a Delaware corporation), and the TCB Borrower, to purchase all of the authorized and issued capital stock of the TCB Borrower, then the TCB Borrower may continue to be obligated in respect of the outstanding Indebtedness not in excess of $40,812,000 under the TCB Credit Agreement, or in the event the Partnership shall exercise its option pursuant to the Option Agreement dated as of February 6, 1992, between the TCB Borrower and David B. Armbrust, as Trustee (and filed as a part of such Exhibit), to cause a Subsidiary (the "Circle C Subsidiary") to purchase the assets of the TCB Borrower referred to as the "Property" in such Option Agreement (the "Circle C Property"), then such Subsidiary may assume the outstanding Indebtedness not in excess of $40,812,000 under the TCB Credit Agreement and the related obligations to FTX and FCX in respect of the Guaranties of the TCB Credit Agreement; and any extensions, renewals or replacements of such Indebtedness, in any case; (iii) Indebtedness owed by the Partnership to FTX and/or FCX for loans made under the FTX/FMPO Credit Agreement so long as no Default or Event of Default has occurred and is continuing; provided that all such loans other than the FTX Term Loan (as defined below) may be incurred only as subordinated upon the Subordination Terms to the Senior Debt (as defined in the Subordination Terms) for the benefit of the holders of such Senior Debt (which Subordination Terms shall be contained in or attached to such promissory notes and to which FTX or FCX, as applicable, shall evidence its agreement by countersigning such promissory notes) subject to and in accordance with the FM Intercreditor Agreement and not permit payments of principal or interest, prior to the Maturity Date and the payment of all principal of and interest on the Loans and all fees and other expenses or amounts owed hereunder and termination of the Commitments; (iv) Indebtedness evidenced by the Promissory Notes; and (v) Unsecured Indebtedness of the Partnership not otherwise permitted by the foregoing clauses of this Section 4.2(g) incurred in the ordinary course of business, not for borrowed money, including letters of credit in favor of municipalities to facilitate the construction of infrastructure (such as utilities) for the Mortgaged Properties. The Partnership may borrow up to $10,000,000 in aggregate principal amount (the "FTX Term Loan") from time to time under clause (iii) above on an unsubordinated term basis and may repay any or all of such amount borrowed, from proceeds of Loans or otherwise. (h) Sale and Lease-Back Transactions. The Partnership shall not, and shall not permit any Subsidiary to, enter into any arrangement, directly or indirectly, with any person whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred. (i) Transactions with Affiliates. The Partnership shall not, and shall not permit any Subsidiary to, sell or transfer any property or assets to, purchase or acquire any property or assets from, perform any services for or otherwise engage in any other transactions with, any Affiliate of the Partnership, except that as long as no Default or Event of Default shall have occurred and be continuing, the Partnership or any Subsidiary may engage in any of the foregoing transactions in the ordinary course of business on an arm's-length and fair value basis; provided that the foregoing shall not prohibit (i) the joint venture between the Partnership and IMC- Agrico providing for the joint development of certain Florida real estate pursuant to, and on the terms of, the Florida Joint Venture Agreement (as it may be amended as permitted hereby and in effect from time to time), (ii) FTX from making permitted advances to the Partnership pursuant to the FTX/FMPO Credit Agreement (as it may be amended as permitted hereby and in effect from time to time), (iii) FTX from acting as the managing general partner of the Partnership or (iv) any other transactions expressly permitted by this Agreement, including pursuant to Section 4.2(e) or the Administrative Services Agreement. (j) Fiscal Year. The Partnership shall not change its fiscal year to end on any date other than December 31. (k) Business of Partnership and Subsidiaries. The Partnership shall not, and shall not permit any Subsidiary to, engage at any time in any business or business activity other than as described in the 1994 FM Form 10-K and business activities reasonably incidental thereto. (l) Federal Reserve Regulations; Use of Proceeds. The Partnership will not (i) use the proceeds of any Loan in any manner that would result in a violation of, or be inconsistent with, the provisions of Regulations G, U or X of the Board, (ii) take any action at any time that would cause the representation and warranty contained in Section 3.2(h) at any time to be other than true and correct, (iii) use any part of the proceeds of any Loan, directly or indirectly, immediately, incidentally or ultimately, to purchase or carry Margin Stock or to refund indebtedness originally incurred for such purpose or (iv) directly or indirectly use the proceeds of any Borrowing (x) to repay principal on any Indebtedness (subordinate or otherwise) other than the FTX Term Loan so long as no default or event of default has occurred or is continuing or would result therefrom or (y) to purchase any investments or properties except to the extent permitted by Section 4.2(e)(C). (m) Certain Debt Agreements. The Partnership shall not, without the prior written consent thereto of the Required Banks, amend, supplement or change in any material manner (including any earlier maturity date or amortization schedule) any of the terms or provisions of any agreement, note or other instrument governing or evidencing any of the Indebtedness referred to in para- graphs (i) through (iii) of Section 4.2(g) or, with respect to the Indebtedness referred to in paragraph (iv) of such Section, any of the terms and provisions (including without limitation the Subordination Terms) required by such paragraph or the FM Intercreditor Agreement. (n) Swaps. Neither the Partnership nor any Subsidiary shall enter into, or be obligated in respect of, any Hedge Agreement; provided that (i) the Partnership may enter into any Permitted Swap so long as the aggregate notional amounts under all such Permitted Swaps shall not at any time be in excess of the amount of the related Indebtedness (that bears interest at a floating rate) permitted under Section 4.2(g) and outstanding at such time and (ii) upon the exercise by the Partnership of either of the options referred to in Section 4.2(g)(ii), the resulting Subsidiary obligated for the Indebtedness referred to under such Section 4.2(g)(ii) or the Part- nership may enter into any Permitted Swap so long as the aggregate notional amount under such Permitted Swap shall not at any time be in excess of the amount of Indebtedness (that bears interest at a floating rate) permitted under such Section 4.2(g)(ii) and outstanding at such time; provided further that no Permitted Swap shall be secured unless all the Banks consent thereto. (o) Assets of Subsidiaries. The Partnership shall not transfer any Key Assets to the Subsidiaries or permit the Subsidiaries, collectively, to own or hold any assets at any time other than (i) those assets owned by the Subsidiaries on the Closing Date, (ii) investments permitted by Section 4.2(e)(D) and (iii) assets acquired from the TCB Borrower as permitted by Section 4.2(g)(ii). SECTION 4.3. Affirmative Covenants of FTX. So long as any Bank shall have any Commitment hereunder or the principal of or interest on any Loan shall be unpaid, unless the Required Banks shall otherwise consent in writing: (a) Affirmative Covenants Incorporated by Reference from the FTX Credit Agreement. 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" and "Agents" or "Agent" are replaced herein with references to Default, Event of Default, Bank and the Agents or Agent hereunder, respectively. (b) Partnership's Covenants and FTX. FTX, in its capacity as managing general partner of the Partnership, shall cause the Partnership to perform and to comply with its covenants set forth in Sections 4.1 and 4.2 and to otherwise act in accordance with this Agreement. FTX shall at all times be a general partner of the Partnership and the sole managing general partner of the Partnership and shall at all times generally carry out the functions of the managing general partner of the Partnership; provided that the foregoing shall not prevent FTX from delegating to any of its subsidiaries FTX's duties as the managing general partner of the Partnership. SECTION 4.4. Negative Covenants of FTX. So long as any Bank shall have any Commitment hereunder or the prin- cipal of or interest on any Loan shall be unpaid, without the prior written consent of the Required Banks: (a) Negative Covenants Incorporated by Reference from the FTX Credit Agreement. 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 or any other Loan Document, Default, Event of Default, Banks, Required Banks and Agents or Agent hereunder, respectively. (b) Material Agreements. FTX shall not amend, supplement, change, terminate or waive any material provision of any Material Agreement unless the Banks shall have received 30 days' notice of such amendment, supplement, change, termination or waiver and the Required Banks shall not have objected thereto on the ground that it would, in their judgment, adversely affect the rights or interests of the Banks; provided that if FTX shall not have given such 30 days' notice, FTX shall not amend, supplement, change, terminate or waive any material provision of any Material Agreement unless the Required Banks shall have given their written consent thereto. SECTION 4.5. Affirmative Covenants of FCX. So long as any Bank shall have any Commitment hereunder or the principal of or interest on any Loan shall be unpaid, unless the Required Banks shall otherwise consent in writing, 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" and "Agents" or "Agent" are replaced herein with references to Default, Event of Default, Bank and the Agents or Agent hereunder, respectively. SECTION 4.6. Negative Covenants of FCX. So long as any Bank shall have any Commitment hereunder or the prin- cipal of or interest on any Loan shall be unpaid, without the prior written consent of the Required Banks, 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 or any other Loan Document, Default, Event of Default, Banks, Required Banks and Agents or Agent hereunder, respectively. ARTICLE V Conditions of Credit SECTION 5.1. Conditions Precedent to Initial Borrowing. On the Funding Date, and as conditions precedent to the initial Borrowing by the Borrower to occur on such date, each of the following conditions shall have been satisfied: (a) Each Bank shall have received the following: (i) a copy of the Certificates of Incorporation of FTX and FCX as in effect on the date hereof and each amendment, if any, subsequent thereto, certified as of a recent date by the Secretary of State of the State of Delaware as being a true and correct copy of such documents on file in his office; (ii) the signed Certificate of the Secretary of State of the State of Delaware, in regular form, dated as of a recent date, listing the Certificate of Incorporation of FTX and FCX as in effect on such recent date and each subsequent amendment thereto on file in his office and stating that such documents are the only charter documents of FTX and FCX on file in his office and that FTX and FCX are duly incorporated and in good standing in the State of Delaware, has filed all franchise tax returns and has paid all franchise taxes required by law to be filed and paid by FTX and FCX to the date of his Certificate; (iii) the signed Certificate of the Secretary or an Assistant Secretary of FTX, dated the Closing Date and certifying, among other things, (A) a true and correct copy of resolutions adopted by the Board of Directors of FTX authorizing the making and performance of this Agreement and the other Loan Documents (includ- ing the FTX Guaranty) executed and delivered or to be executed and delivered, as applicable, by FTX, and the countersignature and acceptance by FTX of the FTX Intercreditor Agreement, (B) that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) a true and correct copy of the By-laws of FTX as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in (A) above, (D) that the Certificate of Incorporation of FTX has not been amended since the date of the last amendment shown on the certificate referred to in (ii) above, and (E) the incumbency and specimen signatures of each officer of FTX executing the foregoing documents and any other documents delivered to the Banks in connection herewith on behalf of FTX; and a certificate of another officer of FTX as to the incumbency and signature of such Secretary or Assistant Secretary; (iv) the signed Certificate of the Secretary or an Assistant Secretary of FCX, dated the Closing Date and certifying, among other things, (A) a true and correct copy of resolutions adopted by the Board of Directors of FCX authorizing the making and performance of this Agreement and the other Loan Documents (including the FCX Guaranty) executed and delivered or to be executed and delivered, as applicable, by FCX, and the countersignature and acceptance by FCX of the FCX Intercreditor Agreement, (B) that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) a true and correct copy of the By-laws of FCX as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in (A) above, (D) that the Certificate of Incorporation of FCX has not been amended since the date of the last amendment shown on the certificate referred to in (ii) above, and (E) the incumbency and specimen signatures of each officer of FCX executing the foregoing documents and any other documents delivered to the Banks in connection herewith on behalf of FCX; and a certificate of another officer of FCX as to the incumbency and signature of such Secretary or Assistant Secretary; (v) the signed Certificate of (A) the Chairman of the Board, the President or any executive or senior vice president and (B) the Chief Financial Officer, the Controller or the Treasurer of FTX, dated the Closing Date and certifying that (1) the representations and warranties of FTX contained herein are true and correct as of the Closing Date and (2) that there exists no Default or Event of Default relating to FTX or the Partnership; and (vi) the signed Certificate of (A) the Chairman of the Board, the President or any executive or senior vice president and (B) the Chief Financial Officer, the Controller or the Treasurer of FCX, dated the Closing Date and certifying that (1) the representations and warranties of FCX contained herein are true and correct as of the Closing Date and (2) that there exists no Default or Event of Default relating to FCX. (b) The Administrative Agent shall have received all fees and other amounts due and payable to the Agents or the Banks on or prior to the Closing Date. (c) All outstanding loans under the Credit Agreement dated as of June 11, 1992, among the Partnership, FTX, the banks named therein and Chemical Bank, as agent and as collateral agent (the "Existing FM Credit Agreement") shall have been repaid in full and the Existing FM Credit Agreement and the commitments of the banks party thereto shall have been terminated. (d) The Administrative Agent shall have received fully executed copies of the Guaranties and the Material Agreements, all of which shall be in full force and effect. (e) Each Bank shall have received the signed certificate of (i) the Chairman of the Board, the President or any executive or senior vice president and (ii) the Chief Financial Officer, the Controller or the Treasurer of both FTX and the Partnership (or, if there shall be no such officers of the Partnership appointed, of FTX as managing general partner of the Partnership), dated the Funding Date and confirming compliance with the conditions precedent in this Section. (f) Each Bank shall have received the favorable written opinions of (i) the General Counsel of FTX and FCX and (ii) Davis Polk & Wardwell, each dated the Funding Date, addressed to the Banks, substantially in the forms of Exhibits F and G, respectively, covering such matters related to the transactions contemplated hereby as the Administrative Agent may request and otherwise satisfactory to Cravath, Swaine & Moore, counsel for the Agents. FTX and the Partnership recognize that the Banks are relying on such opinions in extending credit pursuant to this Agreement, and FTX and the Partnership hereby direct such counsel to deliver such opinions to the Banks. (g) Each Bank shall have received (i) a certificate of the Secretary or an Assistant Secretary of the Partnership (or, if there shall be no such officer appointed, of FTX as managing general partner of the Partnership), dated the Funding Date and certifying (A) that attached thereto are true and complete copies of the Partnership Agreement and all other constitutive documents, if any, of the Partnership as in effect on the date of such certificate and at all times since the resolution of the Partnership described in item (B) below, (B) that attached thereto is a true and complete copy of a resolution or similar authorization adopted by FTX, as managing general partner of the Partnership, authorizing the execution, delivery and performance of this Agreement and the other Loan Documents executed and delivered or to be executed and delivered, as applicable, by the Partnership, the countersignature and acceptance by the Partnership of the FM Intercreditor Agreement and the Borrowings hereunder by the Partnership, and that such resolution or authorization has not been modified, rescinded or amended and is in full force and effect and (C) as to the incumbency and specimen signature of each officer executing on behalf of the Partnership the foregoing documents and any other document delivered or to be delivered in connection herewith or therewith; (ii) a certificate of another officer of the Partnership (or, if there shall be no such officer appointed, of FTX as managing general partner of the Partnership) as to the incumbency and signature of such Secretary or Assistant Secretary; and (iii) such other instruments and documents as any Bank or Cravath, Swaine & Moore, counsel for the Agents, may reasonably request. (h) Each Bank shall have received a Promissory Note, each duly executed by the Partnership, payable to such Bank's order and otherwise complying with the provisions of Section 2.4. (i) The FM Intercreditor Agreement, the FCX Intercreditor Agreement and the FTX Intercreditor Agreement shall each have been executed and delivered by all parties thereto other than the Administrative Agent and, in the case of the FM Intercreditor Agreement, the FM Collateral Agent, and countersigned and delivered by FTX, FCX or the Partnership, as applicable, and the Agents and each Bank shall have received a copy of such Intercreditor Documents. (j) There shall be no proceeding for the dissolution or liquidation of the Partnership or any proceeding to rescind the Partnership Agreement or the existence of the Partnership which is pending or, to the knowledge of FTX or the Partnership, threatened against or affecting the Partnership. (k) All legal matters incident to this Agreement, the other Loan Documents and the Borrowings hereunder shall be satisfactory to Cravath, Swaine & Moore, counsel for the Agents. By its execution and delivery of this Agreement, and unless prior to the Funding Date it shall have provided written notice to the Administrative Agent and FTX indicating otherwise, each Bank has evidenced its satisfaction with each matter set forth in this Section requiring satisfaction on its part. SECTION 5.2. Conditions Precedent to Each Borrowing. Each Borrowing shall be subject to the following conditions precedent: (a) the representations and warranties on the part of the Partnership contained in Section 3.1, on the part of FTX contained in Section 3.2 and on the part of FCX contained in Section 3.3 shall be true and correct in all material respects at and as of the date of such Borrowing as though made on and as of such date; (b) the Administrative Agent shall have received a notice of such Borrowing as required by Section 2.3; and (c) no Event of Default or Default shall have occurred and be continuing on the date of such Borrowing or would result from such Borrowing. SECTION 5.3. Representations and Warranties with Respect to Borrowings. Each Borrowing shall be deemed a representation and warranty by FTX and the Partnership, jointly and severally, that the conditions precedent to each such Borrowing, unless otherwise waived in accordance herewith, shall have been satisfied as of the date of such Borrowing. ARTICLE VI Events of Default SECTION 6.1. Events of Default. If any of the following acts or occurrences (an "Event of Default") shall occur and be continuing: (a) 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 of any Promissory Note; (b) default for three or more days in the payment when due of any interest on any Promissory Note or of any other amount payable under this Agreement or any other Loan Document; (c) any representation or warranty made or deemed made in or in connection with this Agreement, any other Loan Document or in any certificate, report, financial statement, letter or other writing or instrument furnished or delivered to the Agents or any Bank pursuant hereto or thereto shall prove to have been incorrect in any material respect when made, effective or reaffirmed and repeated, as the case may be; (d) default in the due observance or performance of any covenant, condition or agreement in Section 4.1(a)(8), the first clause of Section 4.1(c), Section 4.2 (other than paragraph (j) thereof), Section 4.4 (other than Section 5.2(k) of the FTX Credit Agreement, as such Section is incorporated by reference under Section 4.4(a)), Section 4.6 (other than Section 5.2(k) of the FCX Credit Agreement as such Section is incorporated by reference under Section 4.6) or Section 4.3(b) as it relates to any of the foregoing; (e) default by FTX or FCX in the due observance or performance of any covenant, condition or agreement incorporated in Section 4.3(a) or contained in Section 4.5 which shall remain unremedied for 30 days after written notice thereof shall have been given to the Borrower by any Bank; (f) default by FTX or the Partnership in the due observance or performance of any other covenant, condition or agreement contained in any Loan Document which shall remain unremedied for 10 days after written notice thereof shall have been given to the Borrower by any Bank; (g) any Specified Entity shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, liquidation or similar law, (ii) consent to the institution of, or fail to contravene in a timely and appropriate manner, any proceeding or the filing of any petition described in clause (h) below, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for such Specified Entity or for a substantial part of its property or assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debt as they become due or (vii) take any action for the purpose of effecting any of the foregoing; (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of any Specified Entity, or of a substantial part of the property or assets of any Specified Entity, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official for any Specified Entity or for a substantial part of the property or assets of any Specified Entity or (iii) the winding up or liquidation of any Specified Entity; and such proceeding or petition shall continue undismissed for 60 days, or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for 30 days; (i) default shall be made with respect to (x) Hedge Agreements of any Specified Entity or (y) any Indebtedness of any Specified Entity if the effect of any such default shall be to accelerate, or to permit the holder or obligee of any such obligations or Indebtedness (or any trustee on behalf of such holder or obligee) to accelerate (with or without notice or lapse of time or both), the maturity of such Indebtedness or the payment of any net termination value in respect of Hedge Agreements, as applicable, in an aggregate amount in excess of the Threshold Amount; or any payment, regardless of amount, of (A) net termination value on any such obligation in respect of Hedge Agreements and/or (B) any Indebtedness of any Specified Entity in an aggregate principal amount (or in the case of a Hedge Agreement, net termination value) in excess of the Threshold Amount, shall not be paid when due, whether at maturity, by acceleration or otherwise (after giving effect to any period of grace specified in the instrument evidencing or governing such Indebtedness or other obligation); (j) an ERISA Event shall have occurred with respect to any Plan or Multi-Employer Plan that, when taken together with all other ERISA Events, reasonably could be expected to result in liability of FTX, FCX or the Borrower and/or any Restricted Subsidiary of FCX or FTX and/or the Borrower's ERISA Affiliates in an aggregate amount exceeding the Threshold Amount or requires payments exceeding the Threshold Amount in any year; (k) any security interest purported to be created by any Security Agreement shall cease to be, or shall be asserted by the Borrower, FTX, FCX or any of their Affiliates not to be, a valid, perfected, first priority security interest in the securities, assets or properties covered thereby, except to the extent that any such loss of perfection or priority results from the failure of the FTX Collateral Agent or the FCX Collateral Agent to maintain possession of any certificates representing securities pledged under the Security Agreements to the extent that such pledged securities are certificated securities; (l) a final judgment for the payment of money shall be rendered by a court or other tribunal against any Specified Entity in excess of the Threshold Amount and shall remain undischarged for a period of 45 consecutive days during which execution of such judgment shall not have been stayed effectively; or any action shall be legally taken by a judgment creditor to levy upon assets or properties of any Specified Entity to enforce any such judgment; (m) the Partnership Agreement (as it may be amended and in effect from time to time) (or any successor agreement pursuant to which FTX is appointed and authorized to act as the managing general partner of the Partnership) shall cease to be, or shall be asserted by FTX not to be, in full force and effect and enforceable in all material respects in accordance with its terms; (n) the FTX Guaranty, the FCX Guaranty or any Loan Document shall cease to be, or shall be asserted by FTX, FCX or the Partnership 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 (o) there shall have occurred a Change in Control; then, and in any such event (other than an event with respect to FTX, FCX, FRP, FI or the Partnership described in paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Banks shall, by written or telecopy notice to the Borrower, take one or more of the following actions at the same or different times: (i) declare the Commitments to be terminated, whereupon they shall forthwith terminate; (ii) declare all sums then owing by the Borrower under the Promissory Notes or otherwise owing hereunder to be forthwith due and payable, whereupon all such sums shall become and be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein, in any other Loan Document or in any Intercreditor Document to the contrary notwithstanding or (iii) exercise (or cause the Collateral Agents to exercise) any or all the remedies then available under the Security Agreements; and upon the occurrence of any event with respect to FTX, FCX, FRP, FI or the Partnership described in paragraph (g) or (h) of this Section, all sums then owing by the Borrower under the Promissory Notes or otherwise owing hereunder shall, without any declaration or other action by any Bank or the Agents hereunder, be immediately due and payable and all Commitments hereunder shall be immediately terminated without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein, in any other Loan Document or in any other Intercreditor Document to the contrary notwithstanding and the Administrative Agent may, and at the request of the Required Banks shall, exercise any or all of the remedies then available under the Security Agreements. Promptly following the making of any such declaration, the Administrative Agent shall give notice thereof to the Borrower but failure to do so shall not impair, under any circumstances, the effect of such declaration. ARTICLE VII FTX Undertaking Section 7.1. FTX Undertaking. In addition to and not in derogation from its obligations under the FTX Guaranty, FTX hereby agrees that it shall be jointly and severally liable with the Borrower for each of the Partnership Obligations (other than principal and interest on the Loans, with respect to which FTX has guaranteed a certain amount thereof with respect to the Loans pursuant to the FTX Guaranty). FTX agrees that it shall pay on demand any such Partnership Obligations for which it is liable pursuant to this Section 7.1 which has remained unpaid by the Borrower for five Business Days after such amount is due or demanded from the Borrower; provided that if an event referred to in Section 6.1(g) or (h) has occurred with respect to the Borrower, such amounts shall be payable on demand by FTX without the necessity of any demand on the Borrower. The obligations of FTX under this Section 7.1 shall be deemed to be a guarantee of payment and not of collection. Upon payment by FTX of any sums to a Bank or an Agent as provided above in this Section 7.1, all rights of FTX against the Partnership 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 the Partnership Obligations to the Banks and the Agents and shall not be exercised by FTX prior to payment in full of all Partnership Obligations and termination of the Commitments. If any amount shall be paid to FTX on account of any amount paid by FTX pursuant to this guarantee or otherwise at any time when all the Partnership Obligations shall not be paid in full, such amount shall be held in trust by FTX for the benefit of the Agent, and the Banks and shall forthwith be paid to the Administrative Agent to be credited and applied to the Partnership Obligations, whether matured or unmatured. At such time as all Partnership Obligations owing to such bank have been paid in full and its Commitment terminated, each Bank shall, in a reasonable manner, assign (subject to the continued effectiveness and the reinstatement provided for above) the amount of the Partnership Obligations owed to it and paid by FTX pursuant to this Section 7.1 to FTX, such assignment to be pro tanto to the extent to which the Partnership Obligations in question were discharged by FTX, or make such other disposition thereof as FTX shall reasonably direct (all without any representation or warranty by, or any recourse to, such Bank). ARTICLE VIII The Agents SECTION 8.1. The Agents. (a) For convenience of administration and to expedite the transactions contemplated by this Agreement, Chemical is hereby appointed as Administrative Agent, FTX Collateral Agent and FCX Collateral Agent for the Banks under this Agreement and the Security Agreements and Chase is hereby appointed as the Documentary Agent for the Banks under this Agreement. None of the Agents shall have any duties or responsibilities with respect hereto except those expressly set forth herein. Each Bank, and each subsequent holder of any Promissory Note by its acceptance thereof, hereby irrevocably appoints and expressly authorizes the Agents, without hereby limiting any implied authority, to take such action as the Agents may deem appropriate on its behalf and to exercise such powers under this Agreement as are specifically delegated to such Person by the terms hereof, together with such powers as are reasonably incidental thereto. The Administrative Agent is hereby expressly authorized by the Banks, without hereby limiting any implied authority, (a) to receive on behalf of the Banks all payments of principal of and interest on the Loans and all other amounts due to the Banks hereunder, and promptly to distribute to each Bank its proper share of each payment so received; (b) to give notice on behalf of each of the Banks to the Borrower of any Event of Default specified in this Agreement of which the Administrative Agent has actual knowledge acquired in connection with its agency hereunder; and (c) to distribute to each Bank copies of all notices, financial statements and other materials delivered by the Borrower pursuant to this Agreement as received by the Administrative Agent. Without limiting the generality of the foregoing, the Collateral Agents are hereby expressly authorized to execute any and all documents (including releases) with respect to the Collateral and the rights of the secured parties with respect thereto, as contemplated by and in accordance with the provisions of this Agreement and the Security Agreements. Each of the Agents may exercise any of its duties hereunder by or through their respective agents, officers or employees. In addition, each Bank hereby irrevocably authorizes and directs each Collateral Agent to enter, on behalf of each of them, into the respective Intercreditor Agreement and Security Agreements as contemplated pursuant to this Agreement. (b) None of the Agents or any of their respective directors, officers, agents or employees shall be liable as such for any action taken or omitted to be taken by any of them except for its or his own gross negligence or wilful misconduct, or be responsible for any statement, warranty or representation herein or the contents of any document delivered in connection herewith, or be required to ascertain or to make any inquiry concerning the performance or observance by the Borrower or any other party of any of the terms, conditions, covenants or agreements contained in any Loan Document. The Agents shall not be responsible to the Banks or the holders of the Notes for the due execution, genuineness, validity, enforceability or effectiveness of this Agreement, the Notes or any other Loan Documents or other instruments or agreements. The Administrative Agent may deem and treat the payee of any Promissory Note as the owner thereof for all purposes hereof until it shall have received from the payee of such Promissory Note notice, given as provided herein, of the transfer thereof in compliance with Section 9.3. The Agents shall in all cases be fully protected in acting, or refraining from acting, in accordance with written instructions signed by the Required Banks and, except as otherwise specifically provided herein, such instructions and any action or inaction pursuant thereto shall be binding on all the Banks and each subsequent holder of any Promissory Note. Each Agent shall, in the absence of knowledge to the contrary, be entitled to rely on any instrument or document believed by it in good faith to be genuine and correct and to have been signed or sent by the proper Person or Persons. None of the Agents nor any of their respective directors, officers, employees or agents shall have any responsibility to the Borrower or any other party on account of the failure of or delay in performance or breach by any Bank of any of its obligations hereunder or to any Bank on account of the failure of or delay in performance or breach by any other Bank or the Borrower or any other party of any of their respective obligations hereunder or under any other Loan Document or in connection herewith or therewith. Each of the Agents may execute any and all duties hereunder by or through agents or employees and shall be entitled to rely upon the advice of legal counsel selected by it with respect to all matters arising hereunder and shall not be liable for any action taken or suffered in good faith by it in accordance with the advice of such counsel. The Banks hereby acknowledge that none of the Agents shall be under any duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement unless it shall be requested in writing to do so by the Required Banks. (c) To the extent that any Agent shall not be reimbursed by the Borrower for any costs, liabilities or expenses incurred in such capacity, each Bank agrees (i) to reimburse the Agents, on demand (in the amount of its Applicable Percentage hereunder) of any expenses incurred for the benefit of the Banks by the Agents, including counsel fees and compensation of agents and employees paid for services rendered on behalf of the Banks and (ii) to indemnify and hold harmless each Agent and any of its directors, officers, employees or agents, on demand, in the amount of such Applicable Percentage, from and against any and all liabilities, taxes, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against it in its capacity as Agent or any of them in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted by it or any of them under this Agreement or any other Loan Document; provided, however, that no Bank shall be liable to an Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or wilful misconduct of such Agent or of its directors, officers, employees or agents. (d) With respect to the Loans made by it hereunder and the Promissory Notes issued to it, each Agent in its individual capacity and not as Agent shall have the same rights and powers as any other Bank and may exercise the same as though it were not an Agent, and the Agents and their Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not an Agent. (e) Subject to the appointment and acceptance of a successor Agent as provided below, any Agent may resign at any time by giving written notice thereof to the Banks and the Borrower. Upon any such resignation, the Required Banks shall have the right to appoint, and the Borrower shall have the right to approve (such approval not to be unreasonably withheld or delayed) a successor Administrative Agent, Collateral Agent or Documentary Agent, as the case may be. If no successor Agent, Collateral Agent or Documentary Agent, as the case may be, shall have been so appointed and approved and shall have accepted such appointment, within 30 days after the retiring Agent's giving of notice of resignation, then the retiring Person may, on behalf of the Banks, appoint a successor Administrative Agent, Collateral Agent or Documentary Agent, as the case may be, which shall be a Bank with an office in New York, New York, having a combined capital and surplus of at least $500,000,000 or an Affiliate of any such Bank. Upon the acceptance of any appointment as Administrative Agent, Collateral Agent or Documentary Agent hereunder by a successor Administrative Agent, Collateral Agent or Documentary Agent, as the case may be, such successor Administrative Agent, Collateral Agent or Documentary Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. After any such retiring Agent's resignation hereunder as Administrative Agent, Collateral Agent or Documentary Agent, as applicable, the provisions of this Article VIII and Section 9.4 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was acting as the Administrative Agent, Collateral Agent or Documentary Agent, as applicable. (f) The Administrative Agent and the Documentary Agent shall be responsible for supervising the preparation, execution and delivery of this Agreement and the other agreements and instruments contemplated hereby, any amendment or modification thereto and the closing of the transactions contemplated hereby and thereby. In addition, the Administrative Agent shall assist each Collateral Agent in the performance of its duties as may be reasonably requested by such Collateral Agent from time to time. (g) The obligations of the Administrative Agent, each Collateral Agent and the Documentary Agent shall be separate and several and neither of them shall be responsible or liable for the acts or omissions of the other, except, to the extent that a Bank serves in more than one agent capacity, such Bank shall be responsible for the acts and omissions relating to each such agency function. (h) Without the prior written consent of the Required Banks, the Administrative Agent and each Collateral Agent will not consent to any modification, supplement or waiver of any Intercreditor Agreement or, except to the extent required by an Intercreditor Agreement, the related Security Agreement. (i) Each Bank acknowledges that it has, independently and without reliance upon the Agents or any other Bank and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Agents or any other Bank and based on such documents and informa- tion as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement or any other Loan Document, any related agreement or any document furnished hereunder or thereunder. ARTICLE IX Miscellaneous SECTION 9.1. Notices. Notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight or same day courier service or mailed or sent by telex, telecopy, graphic scanning or other telegraphic communications equipment of the sending party to the appropriate party's address set forth on the signature pages hereof; provided that notices by or to the Borrower may be given by or to FTX as its general partner. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if hand delivered or delivered by any telecopy, telegraphic or telex communications equipment or three days after being sent by registered or certified mail, postage prepaid, return receipt requested, in each case addressed to such party as provided in this Section 9.1 or in accordance with the latest unrevoked direction from such party. SECTION 9.2. Survival of Agreement. All covenants, agreements, representations and warranties made by the Borrower or the Guarantors herein and in the certificates or other instruments prepared or delivered in connection with this Agreement or any other Loan Document shall be considered to have been relied upon by the Banks and the Agents and shall survive the making by the Banks of the Loans and the execution and delivery to the Banks of the Promissory Notes evidencing such Loans regardless of any investigation made by the Banks or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Note, any Commitment Fee or any other fee or amount payable under the Loan Documents is outstanding and unpaid and so long as the Commitments have not been terminated. SECTION 9.3. Successors and Assigns; Participation; Purchasing Banks. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, FTX, FCX, the Banks, the Agents, all future holders of the Promissory Notes, and their respective successors and assigns, except that none of the Borrower, FTX nor FCX may assign, delegate or transfer any of its rights or obligations under this Agreement without the prior written consent of each Bank. Any Bank may at any time pledge or assign all or any portion of its rights under this Agreement and the Promissory Notes issued to it to a Federal Reserve Bank to secure extensions of credit by such Federal Reserve Bank to such Bank; provided that no such pledge or assignment shall release a Bank from any of its obligations hereunder or substitute any such Federal Reserve Bank for such Bank as a party hereto. (b) Any Bank may, in accordance with applicable law, at any time sell to one or more banks or other entities ("Participants") participating interests in all or a portion of any Loan owing to such Bank, any Promissory Note held by such Bank, any Commitment of such Bank or any other interest of such Bank hereunder. In the event of any such sale by a Bank of participating interests to a Participant, such Bank's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Bank shall remain solely responsible for the performance thereof, such Bank shall remain the holder of any such Promissory Note for all purposes under this Agreement and the Borrower and the Agents shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. The Borrower agree that if amounts outstanding under this Agreement and the Promissory Notes are due and unpaid, or shall have been declared due or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement and any Promissory Note to the same extent as if the amount of its participating interest were owing directly to it as a Bank under this Agreement or any Promissory Note; provided that such right of setoff shall be subject to the obligation of such Participant to share with the Banks, and the Banks agree to share with such Participant, as provided in Section 2.15. The Borrower also agrees that each Participant shall be entitled to the benefits of Sections 2.11, 2.12, 2.13, 2.15, 2.17 and 9.5 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it were a Bank; provided that no Participant shall be entitled to receive any greater payment pursuant to such Sections than the transferor Bank would have been entitled to receive in respect of the amount of the participation transferred by such transferor Bank to such Participant unless such participation shall have been made at a time when the circumstances giving rise to such greater payment did not exist; and provided that the voting rights of any Participant would be limited to amendments, modifications or waivers decreasing any fees payable hereunder or the amount of principal of or the rate at which interest is payable on the Loans, extending any scheduled principal payment date or date fixed for the payment of interest on the Loans, changing or extending the Commitments or release of all or substantially all the collateral for the Loans. (c) Any Bank may, in accordance with applicable law and subject to Section 9.3(h), at any time assign by novation all or any part of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it and the Promissory Notes held by it) (I) to any Bank or any Affiliate thereof, without the Borrower's consent, or (II) to one or more additional banks or financial institutions (any such entity referred to in clause (I) or (II) being a "Purchasing Bank") with the consent of the Administrative Agent and the Borrower, such consent not to be unreasonably withheld (it being understood that the Borrower may withhold its consent to a Purchasing Bank (i) which is not a commercial bank or savings and loan institution or (ii) which would, as of the effective date of such assignment, be entitled to claim compensation under Section 2.11 which the transferor Bank would not be entitled to claim as of such date), pursuant to a Commitment Transfer Supplement in the form of Exhibit D, executed by such Purchasing Bank and such transferor Bank (and, in the case of a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Borrower and the Administrative Agent), and delivered for its recording in the Register to the Administrative Agent, together with the Promissory Notes subject to such assignment, the registration and processing fee required by Section 9.3(e) and an Administrative Questionnaire for the Purchasing Bank if it is not already a Bank. Assignments shall be by novation. Upon such execution, delivery and recording (and, if required, consent of the Borrower and the Administrative Agent), from and after the Transfer Effective Date determined pursuant to such Commitment Transfer Supplement (which shall be at least five days after the execution and delivery thereof), (x) the Purchasing Bank thereunder shall (if not already a party hereto) be a party hereto and have the rights and obligations of a Bank hereunder with a Commitment as set forth in such Commitment Transfer Supplement, and (y) the transferor Bank thereunder shall, to the extent assigned by such Commitment Transfer Supplement, be released from its obligations under this Agreement (and, in the case of a Commitment Transfer Supplement covering all or the remaining portion of a transferor Bank's rights and obligations under this Agreement, such transferor Bank shall cease to be a party hereto). Such Commitment Transfer Supplement shall be deemed to amend this Agreement (including Schedule II hereto) to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Bank (if not already a party hereto) and the resulting adjustment of Applicable Percentages arising from the purchase by such Purchasing Bank of all or a portion of the rights and obligations of such transferor Bank under this Agreement and the Promissory Notes. On or prior to the Transfer Effective Date determined pursuant to such Commitment Transfer Supplement, the Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Promissory Note a new Promissory Note to the order of such Purchasing Bank in an amount equal to the Commitment assumed by it pursuant to such Commitment Transfer Supplement and, if the transferor Bank has retained a Commitment hereunder, a new Promissory Note to the order of the transferor Bank in an amount equal to the Commitment retained by it hereunder. Such new Promissory Notes shall be dated the Closing Date and shall otherwise be in the form of the Promissory Notes replaced thereby. The Promissory Notes surrendered by the transferor Bank shall be returned by the Administrative Agent to the Borrower marked "canceled". (d) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in The City of New York a copy of each Commitment Transfer Supplement delivered to it and a register (the "Register") for the recordation of the names and addresses of the Banks and the Commitment of, and principal amount of the Loans owing to, each Bank from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and the parties hereto may treat each Person whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes of this Agreement. The Register shall be available for inspection by the parties hereto at any reasonable time and from time to time upon reasonable prior notice. (e) Upon its receipt of a Commitment Transfer Supplement executed by a transferor Bank and a Purchasing Bank (and, in the case of a Purchasing Bank that is not then a Bank or an affiliate thereof, by the Borrower and the Administrative Agent) together with payment to the Administrative Agent of a registration and processing fee of $3,500, the Administrative Agent shall (i) promptly accept such Commitment Transfer Supplement and (ii) on the Transfer Effective Date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Banks and the Borrower. (f) Subject to Section 9.15, the Borrower and the Guarantors authorizes each Bank to disclose to any Participant or Purchasing Bank (each, a "Transferee") and any prospective Transferee any and all financial and other information in such Bank's possession concerning the Guarantors, the Borrower and their Affiliates which has been delivered to such Bank by or on behalf of the Borrower pursuant to this Agreement or which has been delivered to such Bank by or on behalf of the Borrower in connection with such Bank's credit evaluation of the Borrower, the Guarantors and their Affiliates prior to becoming a party to this Agreement. (g) If, pursuant to this Section 9.3, any interest in this Agreement or any Promissory Note is transferred to any Transferee which is organized under the laws of any jurisdiction other than the United States or any State thereof, the transferor Bank (x) shall immediately notify the Administrative Agent of such transfer, describing the terms thereof and indicating the identity and country of residence of each Transferee. Such transferor Bank or Transferee shall indemnify and hold harmless the Borrower and the Administrative Agent from and against any tax, interest, penalty or other expense that the Borrower and the Administrative Agent may incur as a consequence of any failure to withhold applicable United States taxes because of any transfer or participation arrangement that is not fully disclosed to them as required hereunder. (h) By executing and delivering a Commitment Transfer Supplement, the transferor Bank thereunder and the Purchasing Bank thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such transferor Bank warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that its Commitment, and the outstanding balance of its Loans, in each case without giving effect to assignments thereof which have not become effective, are as set forth in such Commitment Transfer Supplement, (ii) except as set forth in (i) above, such transferor Bank makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto, or the financial condition of the Borrower or any Subsidiary or the performance or observance by the Guarantors, the Borrower or any Subsidiary of any of its obligations under this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto; (iii) such Purchasing Bank represents and warrants that it is legally authorized to enter into such Commitment Transfer Supplement; (iv) such Purchasing Bank confirms that it has received a copy of this Agreement, together with copies of the most recent financial statements, if any, delivered pursuant to Section 5.1 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Commitment Transfer Supplement; (v) such Purchasing Bank will independently and without reliance upon the Agents, such transferor Bank or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (vi) such Purchasing Bank appoints and authorizes the Agents to take such action as agent on its behalf and to exercise such respective powers under this Agreement and the other Loan Documents as are delegated to the Agents by the terms hereof, together with such powers as are reasonably incidental thereto; and (vii) such Purchasing Bank agrees that it will perform in accordance with their terms all the obligations which by the terms of this Agreement are required to be performed by it as a Bank. SECTION 9.4. Expenses of the Banks; Indemnity. (a) The Borrower and FTX, jointly and severally, agree to pay all out-of-pocket expenses reasonably incurred by the Agents in connection with the preparation and administration of this Agreement, the Promissory Notes and the other Loan Documents or with any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions hereby contemplated shall be consummated) or reasonably incurred by the Agents or any Bank in connection with the enforcement or protection of their rights in connection with this Agreement and the other Loan Documents or with the Loans made or the Promissory Notes issued hereunder (whether through negotiations, legal proceedings or otherwise), including, but not limited to, the reasonable fees and disbursements of Cravath, Swaine & Moore, special counsel for the Agents, and, in connection with such enforcement or protection, the reasonable fees and disbursements of other counsel for any Bank. The Borrower and FTX, jointly and severally, further agree that they shall indemnify the Banks and the Agents from and hold them harmless against any documentary taxes, assessments or charges made by any Governmental Authority by reason of the execution and delivery of or in connection with the performance of this Agreement, any of the Promissory Notes or any of the other Loan Documents. Further, the Borrower and FTX, jointly and severally, agree to pay, and to protect, indemnify and save harmless each Bank, each Agent and each of their respective officers, directors, shareholders, employees, agents and servants from and against, any and all losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, damages, costs or expenses (including, without limitation, attorneys' fees and expenses) in connection with any investigative, administrative or judicial proceeding, whether or not such Bank or Agent shall be designated a party thereto of any nature arising from or relating to (i) the execution or delivery of this Agreement or any other Loan Document or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder or the consummation of the transactions contemplated hereby and thereby (including the Restructuring) or (ii) the use of the proceeds of the Loans; and the Borrower also agrees to pay, and to protect, indemnify and save harmless each Bank, each Agent and each of their respective officers, directors, shareholders, employees, agents and servants from and against, any and all losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, damages, costs or expenses (including, without limitation, attorneys' fees and expenses in connection with any investigative, administrative or judicial proceeding, whether or not such Bank or Agent shall be designated a party thereto) of any nature arising from or relating to any actual or alleged presence or Release of Hazardous Materials on any property owned or operated by the Borrower or any of the Subsidiaries, or any Environmental Claim related in any way to the Borrower or the Subsidiaries or arising from or in connection with the environmental due diligence summary memorandum referred to in paragraph (m) of Article IV of the FTX Credit Agreement; provided that any such indemnity referred to in this sentence shall not, as to any indemnified Person, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non appealable judgment to have resulted from the gross negligence or wilful misconduct of such indemnified Person. If any action, suit or proceeding arising from any of the foregoing is brought against any Bank, Agent or other Person indemnified or intended to be indemnified pursuant to this Section 9.4, the Borrower and FTX, jointly and severally, to the extent and in the manner directed by such indemnified party, will resist and defend such action, suit or proceeding or cause the same to be resisted and defended by counsel designated by the Borrower (which counsel shall be satisfactory to such Bank, Agent or other Person indemnified or intended to be indemnified). If the Borrower or FTX shall fail to do any act or thing which it has covenanted to do hereunder or any representation or warranty on the part of the Borrower, FTX or FCX contained in this Agreement shall be breached, any Bank or Agent may (but shall not be obligated to) do the same or cause it to be done or remedy any such breach, and may expend its funds for such purpose. Any and all amounts so expended by any Bank or Agent shall be repayable to it by the Borrower and FTX, jointly and severally, immediately upon such Bank's or such Agent's demand therefor. (b) The provisions of this Section 9.4 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby or thereby, the repayment of any of the Loans or any Promissory Notes, the invalidity or unenforceability of any term or provision of this Agreement, any other Loan Document or any Promissory Note, or any investigation made by or on behalf of any Bank or any Agent. All amounts due under this Section 9.4 shall be payable on written demand therefor. SECTION 9.5. Right of Setoff. If an Event of Default shall have occurred and be continuing and the Loans shall have been accelerated or any Bank shall have requested the Administrative Agent to declare the Loans immediately due and payable pursuant to Article VI, then each Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement and the Promissory Notes held by such Bank, irrespective of whether or not such Bank shall have made any demand under this Agreement or such Promissory Notes and although such obligations may be unmatured. Each Bank agrees promptly to notify the Borrower after any such setoff and application made by such Bank, but the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Bank under this Section 9.5 are in addition to other rights and remedies (including, without limitation, other rights of setoff) which such Bank may have. SECTION 9.6. APPLICABLE LAW. THIS AGREEMENT AND THE PROMISSORY NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 9.7. Waivers; Amendments. (a) No failure or delay of any Bank or Agent in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Banks and the Agents hereunder and under the other documents and agreements entered into in connection herewith are cumulative and not exclusive of any rights or remedies which they would otherwise have. No waiver of any provision of this Agreement, any other Loan Document or any Promissory Note or any other such document or agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be authorized as provided in paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances. Each holder of any of the Promissory Notes shall be bound by any amendment, modification, waiver or consent authorized as provided herein, whether or not such Promissory Note shall have been marked to indicate such amendment, modification, waiver or consent. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Banks; provided, however, that no such agreement shall (i) change the principal amount of, or extend or advance the maturity of or any date for the payment (other than pursuant to Section 2.7(b), which may be amended by the Required Banks) of any principal of or interest on, any Promissory Note (including, without limitation, any such payment pursuant to Section 2.7(c) or paragraph (a) or (b) of Section 2.9), or waive or excuse any such payment or any part thereof, or change the rate of interest on any Promissory Note, without the written consent of each holder affected thereby, (ii) change or extend the Commitment of any Bank without the written consent of such Bank, or change any fees to be paid to any Bank or Agent hereunder without the written consent of such Bank or the Agent, as applicable, (iii) amend or modify the provisions of this Section 9.7, Sections 2.8 through 2.15 or Section 9.4 or the definition of "Required Banks", without the written consent of each Bank or (iv) release the collateral granted as security under the Security Agreements (except as expressly required hereby or thereby), without the written consent of each Bank; and provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of an Agent hereunder without the written consent of such Agent. Each Bank and holder of any Promissory Note shall be bound by any modification or amendment authorized by this Section 9.7 regardless of whether its Promissory Notes shall be marked to make reference thereto, and any consent by any Bank or holder of a Promissory Note pursuant to this Section shall bind any Person subsequently acquiring a Promissory Note from it, whether or not such Promissory Note shall be so marked. SECTION 9.8. Severability. In the event any one or more of the provisions contained in this Agreement or in the Promissory Notes should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 9.9. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract, and shall become effective when copies hereof which, when taken together, bear the signatures of each of the parties hereto shall be delivered or mailed to the Administrative Agent and the Borrower. SECTION 9.10. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. SECTION 9.11. Entire Agreement. This Agreement, the other Loan Documents, the fee letters between the Agents and the Borrower and the exhibits and schedules hereto contain the entire agreement among the parties hereto with respect to the Loans and the related transactions. Any previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement, such fee letters and the other Loan Documents. Nothing in this Agreement or in the other Loan Documents, expressed or implied, is intended to confer upon any party other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents. SECTION 9.12. WAIVER OF JURY TRIAL, ETC. (A) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.12. (b) Except as prohibited by law, each party hereto hereby waives any right it may have to claim or recover in any litigation referred to in paragraph (a) of this Section 9.12 any special, indirect, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. (c) Each party hereto (i) certifies that no representative, agent or attorney of any Bank has represented, expressly or otherwise, that such Bank would not, in the event of litigation, seek to enforce the foregoing waivers and (ii) acknowledges that it has been induced to enter into this Agreement or any other document, as applicable, by, among other things, the mutual waivers and certifications herein. SECTION 9.13. Interest Rate Limitation. Notwithstanding anything herein or in the Promissory Notes to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the "Charges"), as provided for herein or in any other document executed in connection herewith, or otherwise contracted for, charged, received, taken or reserved by any Bank, shall exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for, charged, taken, received or reserved by such Bank in accordance with applicable law, the rate of interest in respect of such Loan hereunder or payable under the Promissory Note held by such Bank, together with all Charges payable to such Bank, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 9.13 shall be cumulated and the interest and Charges payable to such Bank in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Bank. SECTION 9.14. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (A) THE BORROWER, FTX AND FCX EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY BANK OR AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. (B) THE BORROWER, FTX AND FCX EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. (C) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.1. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. SECTION 9.15. Confidentiality. Each Bank agrees (which agreement shall survive the termination of this Agreement) that financial information, information from the Borrower's and its Subsidiaries' books and records, information concerning the Borrower's and its Subsidiaries' trade secrets and patents and any other information received from the Borrower and its Subsidiaries hereunder shall be treated as confidential by such Bank, and each Bank agrees to use its best efforts to ensure that such information is not published, disclosed or otherwise divulged to anyone other than employees or officers of such Bank and its counsel and agents; provided that it is understood that the foregoing shall not apply to: (i) disclosure made with the prior written authorization of the Borrower or FTX; (ii) disclosure of information (other than that received from the Borrower and its Subsidiaries, FTX or FCX prior to or under this Agreement) already known by, or in the possession of, such Bank without restrictions on the disclosure thereof at the time such information is supplied to such Bank by the Borrower or its Subsidiaries, FTX or FCX hereunder; (iii) disclosure of information which is required by applicable law or to a governmental agency having supervisory or regulatory authority over any party hereto; (iv) disclosure of information in connection with any suit, action or proceeding in connection with the enforcement of rights hereunder or in connection with the transaction contemplated hereby or thereby; (v) disclosure to any bank (or other financial institution) which may acquire a participation or other interest in the Loans or rights of any Bank hereunder; provided that such bank (or other financial institution) agrees to maintain any such information to be received in accordance with the provisions of this Section 9.15; (vi) disclosure by any party hereto to any other party hereto or their counsel or agents; (vii) disclosure by any party hereto to any entity, or to any subsidiary of such an entity, which owns, directly or indirectly, more than 50% of the voting stock of such party, or to any subsidiary of such an entity; or (viii) disclosure of information that prior to such disclosure has become public knowledge through no violation of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. FM PROPERTIES OPERATING CO., by FREEPORT-McMoRan INC., its Managing General Partner, by /s/ R. Foster Duncan ______________________________ Name: R. Foster Duncan Title: Treasurer 1615 Poydras Street New Orleans, Louisiana 70112 Attention: R. Foster Duncan Treasurer Telephone: 504-582-4628 Telecopy: 504-582-4511 FREEPORT-McMoRan INC., by /s/ R. Foster Duncan ______________________________ Name: R. Foster Duncan Title: Treasurer 1615 Poydras Street New Orleans, Louisiana 70112 Attention: R. Foster Duncan Treasurer Telex: 8109515386 Telephone: 504-582-4628 Telecopy: 504-582-4511 FREEPORT-McMoRan COPPER & GOLD INC., by /s/ R. Foster Duncan ______________________________ Name: R. Foster Duncan Title: Treasurer 1615 Poydras Street New Orleans, Louisiana 70112 Attention: R. Foster Duncan Treasurer Telex: 8109515386 Telephone: 504-582-4628 Telecopy: 504-582-4511 CHEMICAL BANK, individually and as Administrative Agent, FTX Collateral Agent, FM Collateral Agent and FRP Collateral Agent by /s/ R. Potter ______________________________ Name: Ronald Potter Title: Managing Director Domestic Office and LIBOR Office 270 Park Avenue New York, New York 10017 Attention: Ralph Iskander Telephone: 212-270-3977 Telecopy: 212-270-4711 with a copy to Attention: Stuart Miller Telephone: 212-270-3235 Telecopy: 212-270-2625 with copies to: Agent Bank Services 140 East 45th Street New York, New York 10017 Attention: Hilma Gabbidon Telephone: 212-622-0693 Telex: 353006 ABSCNYK Telecopy: 212-622-0002 THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), individually and as Documentary Agent, by /s/ Nicholas J. Chirekos ________________________________ Name: Nicholas J. Chirekos Title: Vice President DOMESTIC OFFICE AND LIBOR OFFICE: One Chase Manhattan Plaza (4th Floor) New York, NY 10081 Attention: Nicholas J. Chirekos Vice President Telephone: 212-552-2395 Telecopy: 212-552-7773 ADDRESS FOR NOTICES: One Chase Manhattan Plaza (4th Floor) New York, NY 10081 Attention: Vilma Francis Assistant Treasurer Telephone: 212-552-7883 Telecopy: 212-552-7175 EX-4 5 CONFORMED COPY FTX GUARANTY AGREEMENT FTX GUARANTY AGREEMENT dated as of July 17, 1995 by Freeport-McMoRan Inc., a Delaware corporation (including its successors, "FTX"). WHEREAS in connection with the spin-off of Freeport- McMoRan Copper & Gold Inc., a Delaware corporation ("FCX") from FTX, each of FTX and FCX has agreed that it will provide a partial guaranty of the FMPO Loans, the FMPO Notes and the Circle C Notes (as hereinafter defined). NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, FTX agrees as follows: ARTICLE I GUARANTY SECTION 1.01 Definitions. The following terms, as used herein, have the following meanings: "Credit Documents" means (i) the FMPO Credit Agreement dated as of June 30, 1995 (as the same may be amended from time to time, the "FMPO Credit Agreement") among FM Properties Operating Co., a Delaware general partnership ("FMPO"), FTX, FCX, the banks listed on the signature pages thereof, Chemical Bank, as administrative agent thereunder and The Chase Manhattan Bank, as documentary agent thereunder, (ii) the Second Amended and Restated Note Agreement dated as of June 30, 1995 (as the same may be amended from time to time, the "Pel-Tex Note Agreement") among FMPO, FTX and FCX, as guarantors, Hibernia National Bank, as agent and Hibernia National Bank and Chemical Bank, as banks, and any notes issued thereunder (the "FMPO Notes") and (iii) the Circle C Credit Agreement dated as of February 6, 1992 between Circle C Land Corp., a Texas corporation ("Circle C") and Texas Commerce Bank National Association as amended by six amendments dated June 11, 1992, November 16, 1992, May 5, 1993, September 1, 1993, February 2, 1994 and July 17, 1995 respectively (as the same may be further amended from time to time, the "Circle C Credit Agreement") and any note issued thereunder (each a "Circle C Note") in each case as amended from time to time. "FCX Guaranty" means the guarantee of FCX as set forth in the FCX Guaranty Agreement dated as of July 17, 1995 by FCX. "FCX Guaranty Limit" means $90,000,000 subject to reduction pursuant to Section 2.02 of the FCX Guaranty Agreement. "FMPO Loan" means each Loan made under the FMPO Credit Agreement. "FMPO Obligations" means the principal of and interest on each (i) FMPO Loan, (ii) FMPO Note and (iii) Circle C Note; provided that in no event shall the aggregate principal amount of the FMPO Loans exceed $50,000,000, the aggregate principal amount of the FMPO Notes exceed $68,000,000 (or any amount thereof once repaid be reborrowed) or the aggregate principal amount of the Circle C Notes exceed $40,811,428. "FTX Basic Guaranty Limit" means $45,000,000 subject to reduction pursuant to Section 2.02. "FTX Excess Guaranty Limit" means $23,811,428 subject to reduction pursuant to Section 2.02. "Pro Rata Share" means, as to the FMPO Loans, the FMPO Notes and the Circle C Notes, the outstanding principal amount of the FMPO Loans, the FMPO Notes or the Circle C Notes, as the case may be, as a percentage of the aggregate outstanding principal amount of the FMPO Loans, the FMPO Notes and the Circle C Notes. SECTION 1.02. The Guaranty. Subject to the provisions of Article II, FTX hereby unconditionally and irrevocably guarantees as a primary obligor and not merely as a surety, the due and punctual payment when and as due (whether at stated maturity, by notice of prepayment, upon acceleration or otherwise) of the FMPO Obligations, and subject to Section 2.03, FTX shall forthwith on demand pay the amount not so paid at the place and in the manner specified in the respective Credit Document. This Guaranty is a guaranty of payment when due and not of collection. FTX hereby waives presentment to, demand of payment from, notice of intent to accelerate to, notice of acceleration to, notice of protest and dishonor to, and protest to FMPO or Circle C of any of the FMPO Obligations, and also waives notice of acceptance of this Guaranty and notice of protest for nonpayment. SECTION 1.03. Guaranty Unconditional. Subject to the provisions of Article II, the obligations of FTX hereunder shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by: (i) any rescission, extension, renewal, settlement, compromise, waiver or release in respect of any obligation of FMPO or Circle C under the Credit Documents, by operation of law or otherwise; (ii) any modification or amendment of or supplement to the Credit Documents; (iii) any guarantee or any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of FMPO or Circle C under the Credit Documents; (iv) any change in the corporate existence, structure or ownership of FMPO or Circle C, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting FMPO or Circle C or their respective assets or any resulting release or discharge of any obligation of FMPO or Circle C contained in the Credit Documents; (v) the existence of any claim, set-off or other rights which FTX may have at any time against FMPO or Circle C, any Agent, any Bank or any other corporation or person, whether in connection herewith or any unrelated transactions, provided subject to any subordination agreements relating to any such claims, that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (vi) any invalidity or unenforceability relating to or against FMPO or Circle C for any reason of the Credit Documents, or any provision of applicable law or regulation purporting to prohibit the payment by FMPO or Circle C of the FMPO Obligations or any other amount payable by FMPO or Circle C under the Credit Documents; (vii) any other act or omission to act or delay of any kind by FMPO or Circle C, any beneficiary of this Guaranty or any other corporation or person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to FTX's obligations hereunder or to the FMPO Obligations; (viii) any failure of any beneficiary of this Guaranty to assert any claim or demand or to enforce any right or remedy against FMPO or Circle C under the provisions of the Credit Documents, the FCX Guaranty, any other security document, any intercreditor document or any other loan document; or (ix) any failure of any beneficiary of this Guaranty to exercise any right or remedy against any other guarantor (including any subsidiary) of the FMPO Obligations. SECTION 1.04. Discharge Only Upon Payment In Full; Reinstatement In Certain Circumstances. FTX's obligations hereunder shall remain in full force and effect until the earlier of the date on which (x) the commitments under the Credit Documents shall have terminated and the FMPO Obligations shall have been indefeasibly paid in full or (y) indefeasible payments made hereunder with respect to principal equal to the FTX Basic Guaranty Limit plus the FTX Excess Guaranty Limit and all corresponding amounts of interest have likewise been paid. If at any time any FMPO Obligation is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of FMPO or Circle C or otherwise, FTX's obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time. SECTION 1.05. Waiver by the Guarantor. FTX irrevocably waives acceptance hereof, presentment, demand, protest, notice of intent to accelerate, notice of acceleration and any notice not provided for herein, as well as any requirement that at any time any action be taken by any beneficiary of this Guaranty, corporation or person against FMPO, Circle C or any other entity or person. SECTION 1.06. Subrogation. Upon making any payment with respect to FMPO or Circle C hereunder, FTX shall be subrogated to the rights of the payee against FMPO or Circle C with respect to such payment; provided that FTX shall not enforce any payment by way of subrogation until all FMPO Obligations and all other amounts payable by FMPO or Circle C under the Credit Documents have been paid in full and all commitments to lend thereunder have been terminated. SECTION 1.07. Stay of Acceleration. If acceleration of the time for payment of any FMPO Obligation or any other amount payable by FMPO or Circle C under the Credit Documents is stayed upon the insolvency, bankruptcy or reorganization of FMPO or Circle C, all such amounts otherwise subject to acceleration under the terms of the Credit Documents shall nonetheless be payable by FTX hereunder as if no such stay was in effect. ARTICLE II GUARANTY LIMIT SECTION 2.01. Guaranty Limit. FTX shall be liable under this Guaranty Agreement with respect to principal of the FMPO Obligations for an amount equal to the FTX Basic Guaranty Limit plus the FTX Excess Guaranty Limit and at any time the amount to which the holders of the FMPO Loans, FMPO Notes and Circle C Notes are entitled hereunder shall be limited to their respective Pro Rata Shares of the FTX Basic Guaranty Limit plus the FTX Excess Guaranty Limit, together with interest accrued and unpaid thereon. SECTION 2.02. Reduction of Guaranty Limit. Upon indefeasible payment of any principal amount of the FMPO Notes or, in the case of FMPO Loans or the Circle C Notes, the permanent reduction of the commitments with respect thereto (with corresponding repayment such that principal amount does not exceed such reduced commitments) thereof, (i) the FTX Excess Guaranty Limit shall be automatically reduced by an amount equal to such payment on the FMPO Notes or reduction in such commitments, (ii) if the FTX Excess Guaranty Limit has been reduced to zero, the FCX Guaranty Limit shall be automatically reduced by an amount equal to such payment or reduction in commitments in excess of the amount necessary to reduce the FTX Excess Guaranty Limit to zero and (iii) if both the FTX Excess Guaranty Limit and the FCX Guaranty Limit have been reduced to zero, the FTX Basic Guaranty Limit shall be automatically reduced by an amount equal to such payment or reduction in commitments in excess of the amount necessary to reduce the FTX Excess Guaranty Limit and the FCX Guaranty Limit to zero. SECTION 2.03. Demand Made Last With Respect To FTX Excess Guaranty Limit. Notwithstanding anything herein to the contrary, so long as no Guarantor Default has occurred and is continuing, no demand shall be made hereunder with respect to the FTX Excess Guaranty Limit until (i) no amount is available hereunder with respect to the FTX Basic Guaranty Limit and (ii) no amount is available hereunder with respect to the FCX Guaranty Limit. For purposes hereof, a Guarantor Default means a default under subsection 7.1(a), (b), (g) or (h) of the Credit Agreement dated as of June 30, 1995 among Freeport-McMoRan Resource Partners, Limited Partnership, FTX, the banks party thereto, Chemical Bank, as administrative agent and collateral agent and The Chase Manhattan Bank, as documentary agent or subsection 7.1(a), (b), (g) or (h) of the Credit Agreement dated as of June 30, 1995 among P.T. Indonesia Company, FCX, the banks party thereto, First Trust, National Association, as FI Trustee, Chemical Bank as Administrative Agent and as FCX Collateral Agent, and the Chase Manhattan Bank (National Association), as Documentary Agent. ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.01 Corporate and Governmental Authorization; No Contravention. FTX hereby represents and warrants to the holders of the FMPO Obligations that the execution, delivery and performance by FTX of this Guaranty Agreement are within FTX's corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by- laws of FTX or of any agreement, judgment, injunction, order, decree or other instrument binding upon FTX and will not cause or result in imposition of any lien on any asset of FTX. SECTION 3.02 Binding Effect. This Guaranty Agreement constitutes a valid and binding agreement of FTX enforceable in accordance with its terms. This Guaranty Agreement shall inure to the benefit of present and future holders of the FMPO Obligations. ARTICLE IV MISCELLANEOUS SECTION 4.01 Governing Law; Submission to Jurisdiction. This Guaranty Agreement shall be governed by and construed in accordance with the laws of the State of New York. FTX hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Guaranty Agreement. FTX irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. SECTION 4.02 Waiver of Jury Trial. FTX hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Guaranty Agreement. SECTION 4.03 No Waiver by Delay. No delay or omission to exercise any right or power accruing under any default, omission or failure of performance hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. SECTION 4.04 Notices. All notices, requests and other communications shall be in writing (including facsimile transmission or similar writing) and shall be mailed or sent by the sending party to: (i) in the case of FTX, at its address set forth on the signature page hereof or as otherwise notified to the beneficiaries of this Guaranty or (ii) in the case of any other party, at its address provided for in the Credit Documents. IN WITNESS WHEREOF, FTX has caused this Guaranty Agreement to be duly executed by R. Foster Duncan, Treasurer, as of the day and year first above written. FREEPORT-McMoRan INC. By: /s/ R. Foster Duncan Name: R. Foster Duncan Title:Treasurer 1615 Poydras Street New Orleans, LA 70112 Attention: R. Foster Duncan Treasurer EX-4 6 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 EX-11 7 EXHIBIT 11.1 FREEPORT-McMoRan INC. COMPUTATION OF NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------- 1995 1994 1995 1994 -------- -------- -------- -------- (In Thousands, Except Per Share Amounts) Primary: Net income applicable to common stock $24,503 $6,044 $309,379 $23,051 ======= ====== ======== ======= Average common shares outstanding 28,115 22,973 25,129 23,154 Common stock equivalents: Stock options 345 61 193 102 ------ ------ ------ ------ Common and common equivalent shares 28,460 23,034 25,322 23,256 ====== ====== ====== ====== Net income per common and common equivalent share $.86 $.26 $12.22 $.99 ==== ==== ====== ==== Fully diluted: Net income applicable to common stock: Net income $24,503 $6,044 $309,379 $23,051 Plus preferred dividends - - 7,660 - Plus interest, net of tax effect, on convertible subordinated debentures - - 15,921 - ------- ------ -------- ------- Net income applicable to common stock $24,503 $6,044 $332,960 $23,051 ======= ====== ======== ======= Average common shares outstanding 28,115 22,973 25,129 23,154 Common stock equivalents: Stock options 452 61 345 102 Convertible securities: Preferred stock - - 913 - Convertible subordinated debentures - - 3,126 - ------- ------- ------ ------- Common and common equivalent shares 28,567 23,034 29,513 23,256 ====== ====== ====== ====== Net income per common and common equivalent share $.86 $.26 $11.28 $.99 ==== ==== ====== ==== EX-27 8
5 1,000 9-MOS DEC-31-1995 SEP-30-1995 28,746 0 49,605 0 106,699 218,678 1,946,659 972,315 1,255,790 205,296 300,915 199,014 0 50,084 (111,711) 1,255,790 730,943 730,943 542,300 542,300 0 0 40,844 89,422 7,429 10,142 340,424 0 0 303,379 12.22 11.28
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