-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Qegf9p+5g9sKs+jnGQ/00mLEUuSB2Pfsjlp5bzbc+qPKHaVaKWVxqvDXicIAPj66 m7KOe4lMg2wecfnqUh1b8w== 0000950103-94-001945.txt : 19940404 0000950103-94-001945.hdr.sgml : 19940404 ACCESSION NUMBER: 0000950103-94-001945 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FREEPORT MCMORAN COPPER & GOLD INC CENTRAL INDEX KEY: 0000831259 STANDARD INDUSTRIAL CLASSIFICATION: 1000 IRS NUMBER: 742480931 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-09916 FILM NUMBER: 94519440 BUSINESS ADDRESS: STREET 1: ONE E FIRST ST STE 1600 STREET 2: FIRST INTERSTATE BANK BLDG CITY: RENO STATE: NV ZIP: 89509 BUSINESS PHONE: 7026883000 FORMER COMPANY: FORMER CONFORMED NAME: FREEPORT MCMORAN COPPER COMPANY INC DATE OF NAME CHANGE: 19910114 10-K 1 ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1993 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _________________ Commission file number 1-9916 FREEPORT-McMoRan COPPER & GOLD INC. Organized in Delaware I.R.S. Employer Identification No. 74-2480931 First Interstate Bank Building, One East First Street, Suite 1600, Reno, Nevada 89501 Registrant's telephone number, including area code: (702) 688-3000 Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class on Which Registered - -------------------- --------------------- Class A Common Stock Par Value $0.10 New York Stock Exchange and per Share Australian Stock Excahnge Depositary Shares Representing 2-16/17 New York Stock Exchange shares of Special Preference Stock Par Value $0.10 per Share Depositary Shares Representing 0.05 New York Stock Exchange shares of Step-Up Convertible Preferred Stock Par Value $0.10 per Share Depositary Shares Representing 0.05 New York Stock Exchange shares of Gold-Denominated Preferred Stock Par Value $0.10 per Share Depositary Shares, Series II, Representing New York Stock Exchange 0.05 shares of Gold-Denominated Preferred Stock, Series II, Par Value $0.10 per Share Securities registered pursuant to Section 12(g) of the Act: None 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 ___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (X) The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $1,607,239,000 on March 15, 1994. On March 15, 1994, there were issued and outstanding 63,803,313 shares of Class A Common Stock, par value $0.10 per share, of which 1,547,700 shares were held by the registrant's parent, Freeport-McMoRan Inc., and 142,129,602 shares of Class B Common Stock, par value $0.10 per share, all of which were held by Freeport-McMoRan Inc. Documents Incorporated by Reference Portions of the registrant's Annual Report to stockholders for the year ended December 31, 1993 (Parts I, II and IV) and portions of the Proxy Statement dated March 31, 1994, submitted to the registrant's stockholders in connection with its 1994 Annual Meeting to be held on May 5, 1994 (Part III) TABLE OF CONTENTS ----------------- Part I................................................................ 1 Items 1 and 2. Business and Properties.............................. 1 Introduction...................................................... 1 P.T. Freeport Indonesia Company................................... 1 Contract of Work.................................................. 2 Ore Reserves...................................................... 2 Mining Operations................................................. 3 Exploration....................................................... 4 Milling, Expansion and Production................................. 6 Transportation and Other Infrastructure........................... 6 Marketing......................................................... 8 Republic of Indonesia............................................. 9 Rio Tinto Minera, S.A............................................. 10 Eastern Mining Company, Inc....................................... 10 Research and Development.......................................... 11 Environmental Matters............................................. 11 Employees......................................................... 12 Competition....................................................... 12 Item 3. Legal Proceedings.......................................... 12 Item 4. Submission of Matters to a Vote of Security Holders........ 13 Executive Officers of the Registrant................................ 13 Part II............................................................... 14 Item 5. Market for Registrant's Common Equity and Related Stockholder Matters....................................... 14 Item 6. Selected Financial Data.................................... 14 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.--.................... 14 Item 8. Financial Statements and Supplementary Data................ 15 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.--.................... 15 Part III.............................................................. 15 Items 10, 11, 12, and 13. Directors and Executive Officers of the Registrant, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management, and Certain Relationships and Related Transactions.............................................. 15 Part IV............................................................... 15 Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K....................................... 15 Signatures............................................................ 16 Index to Financial Statements......................................... F-1 Report of Independent Public Accountants.............................. F-1 Exhibit Index......................................................... E-1 PART I ------ Items 1 and 2. Business and Properties. - ---------------------------------------- INTRODUCTION Freeport-McMoRan Copper & Gold Inc., a Delaware corporation formed in 1987 ("FCX"), is a subsidiary of Freeport-McMoRan Inc. ("FTX"*). FCX's principal operating subsidiary is P.T. Freeport Indonesia Company ("PT-FI"), a limited liability company organized under the laws of the Republic of Indonesia and domesticated in Delaware. PT-FI engages in the exploration for and development, mining, and processing of copper, gold and silver in Indonesia and in the marketing of concentrates containing such metals worldwide. FCX believes that PT-FI has one of the lowest cost copper producing operations in the world, taking into account customary credits for related gold and silver production. FTX owns approximately 69.77% of FCX's common stock. FCX owns approximately 81.28% of the outstanding common stock of PT-FI. Of the remaining 18.72% of the outstanding PT-FI common stock, approximately 9.36% is owned by the Government of the Republic of Indonesia (the "Government") and approximately 9.36% is owned by an Indonesian corporation, P.T. Indocopper Investama Corporation ("PT-II"), in which FCX owns a 49% interest. FCX also has a subsidiary, Eastern Mining Company, Inc., ("Eastern Mining") which on April 29, 1993 was granted an exploration permit, giving it exclusive rights for a limited period to explore for minerals on 2.5 million acres adjacent to the 6.5 million acre exploration area covered by PT-FI's New COW (as defined below). On March 30, 1993, FCX acquired a 65% interest in the capital stock of Rio Tinto Minera, S.A. ("RTM"), a company primarily engaged in the smelting and refining of copper concentrates in Spain. In December 1993, RTM redeemed the remaining 35% interest. - -------------------------- *The term "FTX", as used in this report, means Freeport-McMoRan Inc., its divisions, and its direct and indirect subsidiaries and affiliates other than FCX, or any one or more of them, unless the context requires Freeport- McMoRan Inc. only. In January 1994, FCX redeemed its Zero Coupon Exchangeable Notes due 2011 (the "Notes"). Of the $118.6 million Notes outstanding at the initiation of the call, $118.3 million were exchanged into 6.7 million shares of FCX Class A Common Stock prior to the redemption of the Notes. The balance was redeemed for cash. Also in January 1994, FCX sold 4.3 million depositary shares, each representing 0.05 shares of its Gold-Denominated Preferred Stock, Series II to the public for net proceeds of $158.5 million. In August 1993, FCX sold 6.0 million depositary shares, each representing 0.05 shares of its Gold-Denominated Preferred Stock, to the public for net proceeds of $220.4 million. In July 1993, FCX sold 14.0 million depositary shares, each representing 0.05 shares of its Step-Up Convertible Preferred Stock, to the public for net proceeds of $340.7 million. P.T. FREEPORT INDONESIA COMPANY PT-FI's operations are located in the rugged highlands of the Sudirman Mountain Range in the province of Irian Jaya, Indonesia, located on the western half of the island of New Guinea. Over the last 25 years, PT-FI has met an extraordinary combination of engineering and construction challenges to develop its mining and milling complex and supporting infrastructure in one of the least explored areas in the world. PT-FI's largest mine, Grasberg, discovered in 1988, contains the largest single gold reserve and one of the three largest open-pit copper reserves of any mine in the world. In order to develop the Grasberg deposit, PT-FI undertook an expansion program in stages, initially from 20,000 metric tons of ore per day ("MTPD") to 57,000 MTPD. Expansion from 57,000 MTPD to 66,000 MTPD was completed in 1993 ahead of schedule and within budget. PT-FI has begun work on a further expansion of its overall mining and milling rate to 115,000 MTPD which is expected to be completed by year-end 1995 and to result in annual production rates approaching 1.1 billion pounds of copper and 1.5 million ounces of gold. CONTRACT OF WORK In 1967, PT-FI's predecessor, Freeport Indonesia, Incorporated, a Delaware corporation, ("FII") and the Government entered into a contract of work (the "1967 COW") governing FII's mining activities in Indonesia. From 1967 until the end of 1991, FII operated as the sole contractor for the production and marketing of certain minerals from a 24,700 acre area (the "1967 Mining Area"). On December 30, 1991, FII was merged into PT-FI in Delaware and PT-FI and the Government signed a new contract of work (the "New COW"), which superseded the 1967 COW. The New COW covers both the 1967 Mining Area and a contiguous 6.5 million acre exploration area (the "New COW Area"). The New COW has a 30-year term, with provisions for two 10-year extensions under certain conditions. The New COW contains a provision under which PT-FI must progressively relinquish its rights to the nonprospective parts of the New COW Area in amounts equal to 25% of the 6.5 million acres at the end of each of three specified periods, the first of which is set to expire on December 30, 1994, unless further extended by the Ministry of Mines, and the last of which is set to expire five to seven years after the signing of the New COW. In light of these relinquishment provisions, PT-FI has implemented an active exploration program with a focus on both what it believes to be the most promising exploration opportunities in the New Cow Area as well as identification of areas which appear to hold the least promise. The New COW also contains provisions for PT-FI to conduct or cause to be conducted a feasibility study relating to the construction of a copper smelting facility in Indonesia and for the eventual construction of such a facility by PT-FI, if such facility is deemed to be economically viable by PT-FI and the Government and is not constructed by others. PT-FI is pursuing with other companies the feasibility of constructing a copper smelting facility in Indonesia, in which PT-FI would hold a minority interest and supply approximately one-half of the smelter's currently anticipated copper concentrate requirements. ORE RESERVES Based upon published reports, FCX believes that PT-FI's Grasberg deposit contains the largest single gold reserve and one of the three largest open-pit copper reserves of any mine in the world. Proved and probable ore reserves at December 31, 1993 were approximately 1,074.1 million tons* at an average grade of 1.31% copper, 1.47 grams of gold per ton and 4.04 grams of silver per ton compared with approximately 733.2 million tons of ore with an average grade of 1.47% copper, 1.72 grams of gold per ton and 3.87 grams of silver per ton at December 31, 1992. Primarily as a result of the drilling operations at the Grasberg mine (see "Mines in Production" below), PT-FI's proved and probable copper and gold reserves as of December 31, 1993 have increased, net of production since December 31, 1988 by approximately 319% and 574%, respectively, and from year-end 1992 by 28% and 22%, respectively. - -------------------------- * As used herein, "ton" refers to a metric ton, which is equivalent to 2,204.62 pounds on a dry weight basis. This increase in proved and probable reserves, net of production, reflects the addition of approximately 340.9 million tons of ore since December 31, 1992 (a 46% increase) as the result of a drilling program that includes data obtained from the surface down to approximately the 3,100 meter elevation at the Grasberg ore body. PT-FI's proved and probable reserves at Grasberg do not include reserves below the 3,100 meter level. PT-FI has begun driving an adit (the "Amole adit") from the mill site to a point below the currently delineated Grasberg ore body at the 2,900 meter level. The Amole adit, expected to be completed in 1996, will facilitate further deep exploration to delineate the extent of the Grasberg deposit below the 3,100 meter level. Preliminary drilling from the existing 3,700 meter adit indicates significant additional mineralization below the existing proved and probable reserves. There can be no assurance, however, that PT-FI's exploration programs will result in the delineation of additional reserves in commercial quantities. For further information with respect to the copper, gold and silver content of proved and probable ore reserves of PT-FI, reference is made to Note 11 to the financial statements of FCX referred to on page F-1 hereof (the "FCX Financial Statements"), incorporated herein by reference. MINING OPERATIONS Mines in Production PT-FI currently has two mines in operation: the Ertsberg East and the Grasberg, both within the 1967 Mining Area. PT-FI milled ore at an average rate of approximately 57,600 MTPD in 1992 and 62,300 MTPD in 1993. Open pit mining of the Grasberg ore body commenced in January 1990. In 1993, Grasberg mine output totaled approximately 19.8 million tons of ore, providing approximately 81% of total PT-FI ore production. Production from the Grasberg ore body, averaged approximately 54,100 MTPD during 1993. Ertsberg East is an underground mine which commenced production in 1980. Block caving operations are conducted in two separate zones of the ore body with a common haulage level at 3,530 meters elevation. In 1993, mine output from Ertsberg East totaled approximately 4.4 million tons of ore and provided approximately 18% of total PT-FI ore production. Production from Ertsberg East averaged approximately 12,200 MTPD during 1993. The Ertsberg East mine is expected to be depleted by the second half of 1994 and production primarily from Grasberg, supplemented by production from the Intermediate Ore Zone (the "IOZ") ore body (see "Mines in Development" below), is expected to offset the Ertsberg East production. Mines in Development Three major additions to PT-FI's underground mining operations, which are intended to replace existing underground production areas when they become depleted, have previously been developed: the DOM (from the Dutch word meaning "cathedral") ore body, the Deep Ore Zone (the "DOZ") ore body and the IOZ ore body. The IOZ is located vertically between the Ertsberg East and the DOZ ore bodies. The DOM ore body's initial working level is some 380 meters above the Erstberg East mining operation. The DOM ore body will initially be mined using the block caving method. Pre-production development is complete and the first block cave area has been prepared. All maintenance, warehouse and service facilities are in place. Production at the DOM has been deferred as a result of the continued increase in the Grasberg ore reserves. The mine being developed at the IOZ ore body is situated approximately 350 meters above the 2,900 meter level adit. Delineation drilling and pre- production development began in 1991. The IOZ is being developed to gradually replace production from the Ertsberg East mine beginning in 1994 using the same block caving method. Mining will proceed downward from the IOZ to the DOZ. The DOZ, also an underground mine within the 1967 Mining Area, lies vertically below the IOZ ore body and is currently capable of production. Initial production from the DOZ commenced in 1989. However, at the end of 1991, mine output from the DOZ was temporarily suspended, and it is anticipated that it will resume once the IOZ ore body has been depleted sometime after 1998. EXPLORATION In addition to continued delineation of the Grasberg deposit and other deposits discussed above, PT-FI is continuing its ongoing exploration program for copper and gold mineralization within the 1967 Mining Area. Two anomalous zones in the vicinity of PT-FI's current mining activities are under active exploratory drilling. The Big Gossan and Wanagon mineralizations are located west of the Erstberg open pit, southwest of the Grasberg ore body and anchor the ends of a clearly defined mineralized structure trending roughly east-west for 4.5 kilometers. The Big Gossan mineralization, as drilled to date, extends approximately 1,100 meters from just east of the intersection of the Amole adit. Over 50 holes have been drilled from the Amole adit and from an exploration drift being driven in a westerly direction parallel to the Big Gossan structure, which drilling resulted in the addition of 8.5 million metric tons of ore at an average grade of 2.4% copper and 0.77 grams of gold per metric ton to PT-FI's total proved and probable reserves at December 31, 1993. Earlier surface drilling of the western portion of the Big Gossan anomaly, approximately 300-500 meters west of the underground drilling, established a mineral resource in excess of 6 million metric tons with an average grade of 5% copper and 2.9 grams of gold per metric ton which is not included in PT-FI's total proved and probable reserves at December 31, 1993. Further underground exploration of the resources established by the surface drilling as well as the area between it and the reserves discovered near the Amole adit will be carried out in 1994 from the exploration drift as it is extended. Mine planning for development of the Big Gossan resource has commenced with development estimated to cost approximately $100 million and to begin in late 1994 or early 1995. During the first quarter of 1993, PT-FI initiated helicopter-supported surface drilling of the Wanagon gold/silver/copper prospect. Seven holes were drilled during 1993 at Wanagon, located approximately 2 kilometers northwest of Big Gossan and approximately 3 kilometers southwest of Grasberg. Significant copper values have been encountered below the 2,900 meter elevation. Target evaluation in other parts of the 1967 Mining Area is also continuing. Preliminary exploration of the New COW Area has indicated many promising targets. Extensive stream sediment sampling within the new acreage has generated analytical results which are being evaluated. This sampling program, when coupled with regional mapping completed on the ground and from aerial photographs, has led to the outlining of over 50 exploration targets. PT-FI has also completed a fixed-wing air-magnetometer survey of the entire New COW Area. Detailed follow-up exploration of these anomalies by additional mapping and sampling and through the use of both aerial and ground magnetic surveys is now in progress. Systematic drilling of these targets has already commenced with mineralization being discovered at several prospects. Additional drilling is required to determine if any of these are commercially viable. PT-FI has focused its initial drilling in the New COW Area on two prospects 30 kilometers and 40 kilometers north of Grasberg that display anomalous geochemical and magnetic characteristics. Although these prospects require additional exploratory drilling, initial results indicate a large mineralized district that covers three times the aerial extent or approximately 75,000 acres when compared to the original 24,700-acre district that contained the Ertsberg, Grasberg, Ertsberg East, IOZ, DOZ, Big Gossan and DOM ore bodies. The discovery of widespread igneous activity, including volcanic rocks, in these new areas indicates the potential for Grasberg-type stockwork and porphyry deposits as well as skarn-type copper/gold deposits similar to the Ertsberg, Ertsberg East, IOZ, DOZ and DOM ore bodies. PT-FI has also initiated drilling programs for four other prospects. Drilling results are being interpreted. No assurance can be given that any of these new areas contain commercially exploitable mineral deposits. PT-FI's exploration expenditures were $31.7 million for 1993, compared to $12.2 million for 1992. MILLING, EXPANSION AND PRODUCTION Milling Most of the ore from PT-FI's mines moves by a conveyor system to an ore pass through which it drops to the mill site. At the mill site, which is located approximately 2,900 meters above sea level, the ore is crushed and ground. The powdered ore is then mixed in tanks with chemical reagents and continuously agitated with air. At this stage the copper-bearing concentrate rises to the top of the tanks from which it is removed and thickened. The product leaves the mill site as a thickened concentrate slurry, consisting of approximately 65% solids by weight. During 1993, the recovery rates for the milling facilities averaged approximately 87.0% of the copper content, 76.2% of the gold content and 67.2% of the silver content of the ore processed, compared to 88.2%, 73.7% and 65.5%, respectively, during 1992. Expansion In 1993 PT-FI completed, within budget and ahead of schedule, the expansion of its production facilities increasing its mining and milling capacity from 57,000 MTPD to 66,000 MTPD at its Indonesian complex. During 1993 mill production averaged 62,300 MTPD. PT-FI has begun work on a further expansion of its overall mining and milling rate to 115,000 MTPD at an estimated cost of approximately $685 million, excluding the capital required for the Enhanced Infrastructure Project (the "EIP") and other infrastructure improvements, of which approximately $120 million had been spent through December 31, 1993. This expansion is expected to be completed by or about year end 1995. Funding for this expansion will be obtained from existing cash balances, cash flow from operations and additional financing, if required. Such expansion beyond 66,000 MTPD will also require certain Government approvals. This expansion will further PT-FI's goal of approaching annual copper production of 1.1 billion pounds and annual gold production of approximately 1.5 million ounces. Production In 1993 PT-FI achieved record copper production of 658.4 million recoverable pounds, approximately 6% more than in 1992. Gold production was a record 786,700 recoverable ounces, an increase of approximately 23% over 1992. For a summary of PT-FI's production, sales and average product realizations for 1993 and the previous four years, reference is made to "Selected Financial and Operating Data" appearing on page 17 of FCX's 1993 Annual Report to stockholders, which is incorporated herein by reference. TRANSPORTATION AND OTHER INFRASTRUCTURE Transportation From the mill site, the thickened concentrate is pumped through two 115 kilometer pipelines to the port-site facility at Amamapare. At the port-site the slurry is filtered, dried and stored for shipping. When ships arrive, they are loaded at the dock facilities at the port-site until they draw their maximum water. The ships then normally move to deeper water, where loading is completed from shuttling barges. Other Infrastructure The location of PT-FI's operations in a remote and undeveloped area requires that such operations be virtually self-sufficient. The facilities, in addition to those described above, include an airport, a heliport, a 119 kilometer road with bridges and tunnels, an aerial service tramway to transport personnel, equipment and supplies to the mines, a hospital and two town sites with schools, housing and other required facilities sufficient to support approximately 12,000 persons, including approximately 360 who are located at the port-site. In conjunction with the expansion of the mining and processing facilities to 115,000 MTPD, the first phase of the EIP is being implemented. The EIP is a long term program created (1) to provide certain infrastructure facilities needed for PT-FI's operations, (2) to enhance the quality of conditions for PT-FI's employees and (3) to develop and promote the growth of local and other third party activities and enterprises in Irian Jaya through the construction of certain required physical support facilities. The full EIP includes plans for various commercial, residential, educational, retail, medical, recreational, environmental and other infrastructure facilities to be constructed during the next ten to twenty years. Depending on the long-term growth of PT-FI's operations, the total cost of the EIP could range between $500 million and $600 million. The first phase of the EIP is needed to support the 115,000 MTPD expansion. FCX anticipates that the first phase, which includes various residential, community and commercial facilities and an extension of the principal road which will enable vehicle traffic to travel all the way to the port-site, will be completed by mid-1996. PT-FI has entered into certain agreements with Huarte S.A. ("Huarte"), a Spanish construction and engineering company. These agreements cover the design, engineering and construction of the facilities to be constructed in the first phase of the EIP. Together, the agreements give Huarte responsibility to deliver completed facilities to PT-FI. In March 1993, PT-FI entered into a joint venture agreement with P.T. ALatieF Nusakarya Corporation ("ALatieF"), an Indonesian investor, pursuant to which PT-FI will sell to a joint venture or ventures (the "ALatieF Joint Venture") certain existing infrastructure assets and certain assets to be constructed as part of the EIP for total consideration of $270 million. The ALatieF Joint Venture, which is owned one-third by PT-FI and two-thirds by ALatieF, is expected to purchase approximately $90 million of EIP assets annually over the period 1993-1995, with funding provided by equity contributions from the ALatieF Joint Venture partners ($90 million) and debt financing ($180 million), which is expected to be guaranteed by PT-FI, FCX or both. The sale of the first group of assets to the ALatieF Joint Venture, primarily dormitory-style residential properties and associated food service facilities, was completed in December 1993, for a price of $90 million. The sales which are anticipated for 1994 and later are subject to the execution of definitive agreements and certain Government approvals. The acquired assets will be made available to PT-FI and its employees and designees under arrangements which will provide the ALatieF Joint Venture with a guaranteed minimum rate of return on its investment. Certain existing EIP related contracts with Huarte will be assigned to the ALatieF Joint Venture as appropriate. In December 1993, PT-FI announced the execution of a Letter of Intent with Duke Energy Corp. ("DE") and PowerLink Corporation ("PL"), pursuant to which PT-FI would sell its existing and to be constructed power generation and transmission assets and certain other power-related assets to a joint venture (the "Power Joint Venture") whose ownership would consist of DE (30%), PL (30%), PT-FI (30%) and an Indonesian investor (10%). The total value of the transaction is estimated at $200 million and is expected to be concluded in two phases. The first sale, representing the existing assets, is expected to exceed $100 million and to occur in mid-1994. The final sale, representing the to-be-constructed expansion-related assets, is expected to occur during the first half of 1995. Under the agreement, the Power Joint Venture will own these assets and be responsible for providing the electrical power services required by PT-FI at its mining, milling and support operations in Irian Jaya, Indonesia, including the power services required for the expansion of ore throughput to 115,000 MTPD. PT-FI has also entered into two separate letters of intent with respect to the sale to joint ventures of certain aircraft, airport and related operations (the "Airport Joint Venture") and certain construction equipment, certain port facilities and related marine, logistics and related assets (the "Port Joint Venture"). PT-FI would have a 25% equity interest in the Airport Joint Venture, with certain Indonesian investors controlling the remainder. PT-FI would enter into one or more agreements with the Airport Joint Venture for air transport services for both passengers and cargo. It is expected that the purchase price of the assets transferred to the Airport Joint Venture will be approximately $30 million. The Port Joint Venture is expected to be owned by a multinational shipping concern and three to five Indonesian investors (one of which is expected to be ALatieF). PT-FI is not expected to have an equity interest in the Port Joint Venture. PT-FI would enter into one or more agreements with the Port Joint Venture for use of the transferred assets. It is expected that the purchase price of the assets transferred to the Port Joint Venture will not exceed $100 million. The foregoing letters of intent are not binding and are subject to the execution of definitive agreements, financing, and certain Government approvals. No assurance can be given that any of these transactions will be consummated. MARKETING PT-FI's copper concentrates, which contain significant gold and silver components, are sold primarily under long-term, U. S. dollar-denominated contracts, pursuant to which the selling price is based on world metals prices, generally the London Metal Exchange ("LME") settlement prices for Grade A copper metal, less certain allowances. Under a major long-term contract signed in late 1990, approximately 44% of the concentrates produced by PT-FI in 1993 were sold to a group of Japanese copper smelting companies. PT-FI also supplies copper concentrates to other Asian, European and North American smelters and international trading companies under long-term sales agreements. Virtually all of PT-FI's 1993 production of copper concentrates was sold under prior commitments, and PT-FI has commitments from various parties to purchase virtually all of its estimated 1994 production of copper concentrates. For further detail with respect to sales of concentrates, see Note 8 to the FCX Financial Statements. For average realizations per recoverable pound of copper, see "Selected Financial and Operating Data" on page 17 of FCX's 1993 Annual Report to stockholders. PT-FI has in place a price protection program that eliminates exposure to copper price declines below an average $.90 per recoverable pound for estimated copper sales priced during 1994, while allowing full benefit to PT-FI for prices above that level. The cost of the 1994 price protection program, $6 million, is included in product inventories and is being amortized as an adjustment to revenues as sales are priced during 1994. REPUBLIC OF INDONESIA The economy of Indonesia is based on export commodity agriculture, the extraction of petroleum, natural gas and other mineral resources, wholesale and retail trade and, to an increasing extent, manufacturing. Indonesia has a presidential republic system of government. President Suharto assumed power in 1966 following an attempted communist coup and has been in power since then. The Government has maintained a high degree of stability for the past 26 years. President Suharto was re-elected in March 1993 to serve a sixth consecutive five-year term. The Government has promoted policies designed to help develop Indonesia economically and has encouraged foreign investment in numerous areas where such investment would benefit the Indonesian economy. Indonesia's foreign investment policy is expressed in the 1967 Foreign Capital Investment Law. It provides basic guarantees of remittance rights and protection against nationalization, a framework for incentives and some basic rules as to the other rights and obligations of foreign investors. PT-FI's rights and obligations relating to taxes, exchange controls, repatriation and other matters are governed by the New COW, which was concluded pursuant to the 1967 Foreign Capital Investment Law. PT-FI has had and continues to enjoy a good working relationship with the Government. PT-FI's mining complex was Indonesia's first copper mining project and was the first major foreign investment made in Indonesia following the new economic development program instituted by the Suharto administration in 1967. PT-FI works closely with the various levels of the Government in development efforts in the vicinity of its operations. PT-FI incurs significant costs associated with providing health and educational assistance, job training, employment opportunities, agricultural assistance and other community development services and facilities for the Indonesian people living in the areas of its operations. In 1990 PT-FI established a foundation to provide educational and work opportunities for the benefit of the people of Irian Jaya. Over the next several years, PT-FI will contribute at least $10 million to the foundation for community projects. PT-FI also has in place a long-term business development program to provide financing and support for new and emerging businesses, many of which are expected to be suppliers of goods and services for PT-FI's operations. Over time, PT-FI anticipates investing $25 million in this program. FCX has the benefit of political risk insurance from the Overseas Private Investment Corporation, the Multilateral Investment Guaranty Agency and other insurers, where available, which covers a portion of its interest in PT-FI. The insurance is primarily designed to cover certain breach of contract risks. RIO TINTO MINERA, S.A. In March 1993, FCX acquired a 65% interest in RTM, which is principally engaged in the smelting and refining of copper in Spain, for approximately $50 million, excluding transaction costs. In December 1993, RTM redeemed the remaining 35% interest for approximately $19 million. RTM has announced plans to expand its smelter production capacity from its current 150,000 metric tons of metal per year to approximately 180,000 metric tons of metal per year by 1995 at a cost of approximately $50 million. RTM is studying further expansion to as much as 270,000 metric tons of metal production per year. During 1993, PT-FI supplied RTM with approximately 90,000 metric tons of copper concentrate and is expected to supply approximately 150,000 metric tons in 1994, providing for approximately 20% and 33%, respectively, of RTM's requirements in those years. Beginning in 1996, PT-FI is expected to provide the RTM smelter with approximately one-half of its copper concentrate requirements. For further information concerning RTM, reference is made to the information set forth in Item 7 below. EASTERN MINING COMPANY, INC. FCX's subsidiary Eastern Mining was granted an exploration permit (the "SIPP") in April 1993 which gives exclusive rights for a limited period to explore for minerals on 2.5 million acres (the "SIPP Area") adjacent to the New COW Area. Preliminary exploration of the SIPP Area is under way. A draft of a contract of work ("Eastern Mining Draft") was initialled on January 30, 1993 by the Ministry of Mines and Energy of Indonesia and Eastern Mining which covers the SIPP Area. The Eastern Mining Draft will be submitted to the President of Indonesia, with execution of a definitive contract of work expected in 1994. The Eastern Mining Draft, as initialled, provides for a 30-year term and for two 10-year extensions under certain circumstances. Upon execution, an Indonesian limited liability company will be formed to hold the definitive contract of work which initially is to be owned 80% by Eastern Mining and 10% by each of PT-II and an unrelated Indonesian corporation. RESEARCH AND DEVELOPMENT In February 1993, FTX outsourced its corporate engineering, research and development, corporate environmental and corporate safety functions and, to that end, contracted with a new company initially owned and staffed by former employees of FTX, Crescent Technology, Inc. ("Crescent"), that furnishes services to FTX. Crescent maintains engineering and mine development groups in New Orleans, Louisiana, which provide engineering, design and construction supervision activities required to implement new ventures and apply improvements to existing operations of PT-FI and RTM. ENVIRONMENTAL MATTERS FTX and its affiliates, including FCX, have a history of commitment to environmental responsibility. Since the 1940s, long before the general public recognized the importance of maintaining environmental quality, FTX has conducted, and continues to conduct, preoperational, bioassay, marine ecological and other environmental surveys to determine the environmental compatibility of its operations. FTX's Environmental Policy commits its operations to full compliance with applicable laws and regulations. FTX has contracted with Crescent whose environmental specialists develop and implement environmental programs that include the activities of PT-FI. The management of PT-FI believes that it is in compliance with Indonesian environmental laws, rules and regulations. PT-FI had a team of environmental scientists from a leading Indonesian scientific institution conduct a study to update its 1984 Environmental Evaluation Study, with particular focus on its 66,000 MTPD expansion program, and which addressed the anticipated effect of PT-FI's expansion to 66,000 MTPD on the environment within the study area including water quality, aquatic and terrestrial biology, hydrology, geomorphology, oceanography, sociology and economics. The study was submitted to the Government, and a formal hearing was held on the document. The Government then requested PT-FI to update the document to include future expansion plans. An additional environmental evaluation study was submitted in late 1993 with respect to the proposed expansion of production to 115,000 MTPD, and it was approved in February 1994. PT-FI and RTM, through FTX, maintain insurance coverage in amounts deemed prudent for certain types of damages associated with environmental liabilities which arise from sudden, unexpected and unforeseen events. PT-FI has made, and continues to make, expenditures at its operations for protection of the environment. Government and public emphasis on environmental matters can be expected to require PT-FI to incur additional costs, which will be charged against income from future operations. It is possible that the Government could revise its environmental laws and/or regulations periodically. The impact, if any, of such possible revisions on PT-FI's operations cannot be accurately predicted. However, PT-FI does not anticipate that any investments which might be required will have a significant adverse impact on its future operations, liquidity, capital resources or financial position. EMPLOYEES In order to allow access to the FTX employee benefit plans for United States citizens employed full time in PT-FI's and RTM's businesses, such persons are formally employed by certain United States subsidiaries of FTX. For all operational purposes, however, such individuals are regarded as employees of PT-FI or RTM, respectively, and references herein to PT-FI or RTM employees include such individuals. FCX, PT-FI and FTX are parties to a Management Services Agreement (the "Management Agreement") pursuant to which FTX furnishes general executive, administrative, financial, accounting, legal, environmental, tax, research and development, sales and certain other services to FCX and PT-FI. The term of the Management Agreement is unlimited, subject to termination by any of the parties on December 31 of any year and subject to at least six months' prior written notice. FCX and PT-FI reimburse FTX at FTX's cost, including allocated overhead, for such services on a monthly basis. For further information with respect to the Management Agreement, including costs reimbursed to FTX, reference is made to Note 9 to the FCX Financial Statements. As of December 31, 1993, PT-FI had a total of 6,054 employees (approximately 94% Indonesian), compared with 4,983 employees (approximately 91% Indonesian) at year-end 1992. In addition, as of December 31, 1993, PT-FI had approximately 6,600 contract workers, most of whom were Indonesian. Approximately 40% of PT-FI's Indonesian employees are members of the All Indonesia Workers' Union, which operates under Government supervision, with which a labor agreement covering PT-FI's hourly paid Indonesian employees runs until September 30, 1995. PT-FI experienced no work stoppages in 1993, and relations with the union have generally been good. As of December 31, 1993, RTM had a total of 1,216 employees, of which 1,003 employees are covered by union contracts. RTM experienced limited work stoppages in 1993, but relations with these unions have also generally been good. COMPETITION PT-FI competes with other mining companies in connection with the sale of its mineral concentrates and the recruitment and retention of qualified personnel. Some competing companies possess financial resources equal to or greater than those of PT-FI. The management of FCX believes that PT-FI is one of the lowest cost copper producers in the world, taking into account credits for related gold and silver production. Item 3. Legal Proceedings. - --------------------------- Although FCX may be from time to time involved in various legal proceedings of a character normally incident to the ordinary course of its business, the management of FCX believes that potential liability in any such pending or threatened proceedings would not have a material adverse effect on the financial condition or results of operations of FCX. FCX, through FTX, maintains liability insurance to cover some, but not all, potential liabilities normally incident to the ordinary course of its business as well as other insurance coverages customary in its business, with such coverage limits as management deems prudent. Item 4. Submission of Matters to a Vote of Security Holders. - ------------------------------------------------------------- Not applicable. Executive Officers of the Registrant. - ------------------------------------- In addition to the elected executive officers of FCX (the "Elected FCX Executive Officers"), certain employees of affiliates of FCX are deemed by FCX to be executive officers of FCX (the "Designated FCX Executive Officers") for purposes of the federal securities laws. Listed below are the names and ages, as of March 15, 1994, of each of the Elected FCX Executive Officers and the Designated FCX Executive Officers, together with the principal positions and offices with FCX, FTX, and PT-FI held by each. All officers of FCX, FTX, and PT-FI are elected or appointed for one year terms, subject to death, resignation or removal. Name Age Position or Office ---- --- ------------------ Richard C. Adkerson 47 Senior Vice President of FCX. Senior Vice President of FTX. Commissioner of PT-FI. John G. Amato 50 General Counsel of FCX. General Counsel of FTX. Commissioner of PT-FI. Richard H. Block* 43 Senior Vice President of FTX. Thomas J. Egan* 49 Senior Vice President of FTX. Charles W. Goodyear 36 Senior Vice President of FCX. Senior Vice President of FTX. Commissioner of PT-FI. Hoediatmo Hoed* 54 President Director of PT-FI. W. Russell King* 44 Senior Vice President of FTX. Rene L. Latiolais* 51 Director of FCX. Director, President, and Chief Operating Officer of FTX. Commissioner of PT-FI. George A. Mealey 60 Director, President, and Chief Executive Officer of FCX. Executive Vice President of FTX. Director and Executive Vice President of PT-FI. James R. Moffett 55 Director and Chairman of the Board of FCX. Director, Chairman of the Board, and Chief Executive Officer of FTX. President Commissioner of PT-FI. - -------------------- * This individual is a Designated FCX Executive Officer and not an Elected FCX Executive Officer. He is deemed by FCX to be a Designated FCX Executive Officer solely for purposes of the federal securities laws in view of his position and responsibilities as an officer of FTX or PT- FI, as applicable; he holds no actual position as an officer of FCX. The individuals listed above, with the exceptions of Messrs. Adkerson, Amato, and Goodyear, have served FCX, FTX, or PT-FI in various executive capacities for at least the last five years. Until 1989, Mr. Adkerson was a partner in Arthur Andersen & Co., an independent public accounting firm, and Mr. Goodyear was a Vice President of Kidder, Peabody & Co. Incorporated, an investment banking firm. During the past five years and prior to that period, Mr. Amato has been engaged in the private practice of law and has served as outside counsel to FCX, FTX, and PT-FI. PART II ------- Item 5. Market for Registrant's Common Equity and Related Stockholder - ----------------------------------------------------------------------------- Matters. -------- The information set forth under the caption "FCX Class A Common Shares" and "Class A Common Share Dividends", on the inside back cover of FCX's 1993 Annual Report to stockholders, is incorporated herein by reference. As of March 15, 1994, there were 2,355 record holders of FCX's Class A common stock. Item 6. Selected Financial Data. - --------------------------------- The Information set forth under the caption "Selected Financial and Operating Data", on page 17 of FCX's 1993 Annual Report to stockholders, is incorporated herein by reference. FCX's ratio of earnings to fixed charges for each of the years 1989 through 1993, inclusive, was 27.6x, 9.2x, 4.5x, 6.5x and 3.6x respectively. For this calculation, earnings consist of income from continuing operations before income taxes, minority interest and fixed charges. Fixed charges include interest and that portion of rent deemed representative of interest. Item 7. Management's Discussion and Analysis of Financial - ----------------------------------------------------------------- Condition and Results of Operations. ----------------------------------- ORE RESERVE ADDITIONS AND ONGOING EXPLORATION PROGRAM Total estimated proved and probable recoverable reserves at P.T. Freeport Indonesia Company (PT-FI), Freeport-McMoRan Copper & Gold Inc.'s (FCX or the Company) principal operating unit, have increased since December 31, 1992, by 5.9 billion pounds of copper (a 28 percent increase), 7.0 million ounces of gold (a 22 percent increase), and 32.0 million ounces of silver (a 72 percent increase), bringing PT-FI's total year-end 1993 estimated proved and probable recoverable reserves to 26.8 billion pounds of copper, 39.1 million ounces of gold and 76.7 million ounces of silver. The increases, net of production during the year, were added primarily at the Grasberg deposit, but also include additions at the Company's underground mine at the DOZ (Deep Ore Zone) deposit and the recently discovered Big Gossan deposit. In addition to continued delineation of the Grasberg deposit and other deposits including Big Gossan, PT-FI is proceeding with its ongoing exploration program for mineralization within the original mining area. During 1993, PT-FI initiated helicopter-supported surface drilling of the Wanagon gold/silver/copper prospect, located 1.5 miles northwest of Big Gossan and 2 miles southwest of Grasberg, where seven holes were drilled. Significant copper mineralization has been encountered below the 2,900 meter elevation. Preliminary exploration of the new contract of work area (New COW Area) has indicated numerous promising targets. Extensive stream sediment sampling within the new acreage has generated analytical results which are being evaluated. This sampling program, when coupled with regional mapping completed on the ground and from aerial photographs, has led to the outlining of over 50 exploration targets. PT-FI has also completed a fixed-wing air-magnetometer survey of the entire New COW Area. Detailed follow-up exploration of these anomalies by additional mapping and sampling and through the use of both aerial and ground magnetic surveys is now in progress. Systematic drilling of these targets has already commenced with significant mineralization being discovered at several prospects. Additional drilling is required to determine if any of these are commercially viable. Initial surface and stream sampling began on an additional 2.5 million acres, just north and west of our existing COW area, on which an affiliate has an exploration permit and a pending COW. 1993 RESULTS OF OPERATIONS COMPARED WITH 1992 After discussions with the staff of the Securities and Exchange Commission (SEC), FCX is reclassifying certain expenses and accruals previously recorded in 1993 as restructuring and valuation of assets. In response to inquiries, the Company advised the SEC staff that $15.5 million originally reported as restructuring and valuation of assets represented the cumulative effect of changes in accounting principle resulting from the adoption of the new accounting policies that the Company considered preferable, as described in Note 1 to the financial statements. The Company also informed the SEC staff of the components of other charges included in the amount originally reported as restructuring and valuation of assets. The Company concluded that the reclassification and the related supplemental disclosures more accurately reflect the nature of these charges to 1993 net income in accordance with generally accepted accounting principles. These reclassifications had no impact on net income or net income per share. FCX reported 1993 net income applicable to common stock of $21.9 million ($.11 per share) compared with net income of $122.9 million ($.66 per share) for 1992. The results for 1993 reflect (a) a $15.7 million loss for Rio Tinto Minera, S.A. (RTM) since its acquisition (Note 3) and (b) charges totaling $52.6 million ($30.4 million to net income or $.15 per share), of which $28.3 million was noncash, related to (1) restructuring the administrative organization at Freeport-McMoRan Inc. (FTX), the parent company of FCX, (2) adjustments to general and administrative expenses and site production and delivery costs discussed below, and (3) changes in accounting principle, discussed further in Note 1 to the financial statements. Operating income was lower in 1993 due to a lower gross margin resulting primarily from lower copper realizations; higher exploration expenses; administrative restructuring costs (Note 1); and higher general and administrative costs. Also impacting net income were lower interest expense resulting from reduced debt levels, a higher effective tax rate, and an increase in preferred dividends (Notes 4 and 5). Revenues in 1993 increased as a result of the acquisition of RTM, adding sales of copper cathodes and anodes ($204.9 million), gold bullion ($57.4 million), and other products ($26.1 million). Excluding RTM, revenues declined 4 percent when compared to 1992. Copper price realizations, taking into account PT-FI's $.90 per pound price protection program, were 12 percent lower than in 1992, but gold price realizations were up 6 percent. Although ore production averaged 62,300 metric tons of ore milled per day (MTPD) in 1993 (8 percent higher than in 1992), copper sales volumes decreased slightly from 1992 primarily because of sales from inventory in 1992. Gold sales volumes in 1993 benefited from significantly higher fourth-quarter 1993 gold grades (a 46 percent increase over fourth- quarter 1992 and a 38 percent increase over third-quarter 1993), which are not anticipated to continue in 1994, and an increase in gold recovery rates for the year which improve with higher gold grades. See Selected Financial and Operating Data. A reconciliation of revenues from 1992 to 1993 is presented below (in millions): Revenues - 1992 ........................................... $714.3 RTM revenues ........................................... 288.4 Elimination of intercompany sales.......................... (47.7) Concentrate: Price realizations: Copper ............................................... (84.7) Gold ............................................... 14.7 Sales volumes: Copper ............................................... (5.5) Gold ............................................... 30.2 Treatment charges 23.6 Adjustments to prior year concentrate sales ............. (13.0) Other ............................................... 5.6 ------ Revenues - 1993 $925.9 ====== Revenues also benefited from a decline in treatment charges of 3.4 cents per pound from 1992, resulting from a tightening in the concentrate market, as the industry's inventories were reduced for much of 1993. Additionally, lower copper prices led to lower treatment charges since these charges vary with the price of copper. Adjustments to prior year concentrate sales include changes in prices on all metals for prior year open sales as well as the related impact on treatment charges. Open copper sales at the beginning of 1993 were recorded at an average price of $1.04 per pound, but subsequently were adjusted downward as copper prices fell during the year, negatively impacting 1993 revenues. As of December 31, 1993, 213.4 million pounds of copper remained to be contractually priced during future quotational periods. As a result of PT-FI's price protection program, discussed below, these pounds are recorded at $.90 per pound. The copper price on the London Metal Exchange (LME) was $.84 per pound on February 1, 1994. In June 1993, two of PT-FI's four mill level ore passes caved, resulting in a blockage of a portion of the ore pass delivery system. The blockage's primary effect was to limit mill throughput to approximately 40,700 MTPD for approximately eight weeks. The impact of the blockage was minimized by using an ore stockpile adjacent to the mill and installing conveyors to alternative ore pass systems. The ore pass blockage has been rectified through the temporary use of alternative delivery systems and by- passes. A permanent delivery system is expected to be in service by mid- 1994. The copper recovery rate for 1993 was adversely affected because the ore milled from the stockpile contained higher than normal oxidized copper, which yields lower copper recoveries. The Company's insurance policies are expected to cover the property damage and business interruption claims relative to the blockage. PT-FI's unit site production and delivery costs, excluding the $10.0 million charge discussed below, increased slightly from 1992 primarily as a result of costs incurred in connection with the ore pass blockage and an increase in production overhead costs related to expansion activities. Unit cash production costs declined significantly to 31.1 cents per pound in 1993 from 40.7 cents per pound in 1992, benefiting from higher gold and silver credits, lower treatment charges, and reduced royalties primarily due to lower copper prices on which such royalties are based. PT-FI's depreciation rate increased from 7.4 cents per recoverable pound during 1992 to 8.3 cents in 1993, reflecting the increased cost relating to the 66,000 MTPD expansion. As a result of the reserve additions discussed earlier, PT-FI's depreciation rate is expected to decrease to 7.5 cents per recoverable pound for 1994, absent any other significant changes in ore reserves. In addition, FCX is amortizing costs in excess of book value ($2.4 million of amortization in 1993) relating to certain capital stock transactions with PT-FI. Amortization of these excess costs is expected to be $3.6 million per year starting in 1994. Exploration expenditures in Irian Jaya totaled $31.7 million in 1993, compared to $12.2 million in 1992 and are projected to be approximately $35 million in 1994. Exploration expenditures in Spain are expected to be approximately $6 million in 1994. FCX's general and administrative expenses increased from $68.5 million in 1992 to $81.4 million in 1993 primarily because of the additional personnel and facilities needed due to the expansion at PT-FI and the acquisition of RTM. Included in the 1993 expense is $5.0 million for RTM (since its acquisition in March 1993) and charges of $6.3 million primarily consisting of a write-off of deferred charges incurred in 1992 related to a planned securities offering that was withdrawn ($2.0 million) and costs to downsize FCX's computing and management information systems (MIS) structure ($4.0 million). Further increases in general and administrative expenses by FCX are anticipated in conjunction with continuing expansion at PT-FI. General and administrative expenses, including those of RTM, are currently expected to increase by approximately 25 percent in 1994. During the second quarter of 1993, FTX undertook a restructuring of its administrative organization. This restructuring represented a major step by FTX to lower its costs of operating and administering its businesses in response to weak market prices of the commodities produced by its operating units. As part of this restructuring, FTX significantly reduced the number of employees engaged in administrative functions, changed its MIS environment to achieve efficiencies, reduced its needs for office space, outsourced a number of administrative functions, and implemented other actions to lower costs. As a result of this restructuring process, the level of FCX's administrative cost has been reduced substantially over what it would have been otherwise, which benefit will continue in the future. However, the restructuring process entailed incurring certain one-time costs by FTX, portions of which were allocated to FCX pursuant to its management services agreement with FTX. FCX's restructuring costs totaled $20.8 million, including $10.7 million allocated from FTX based on historical allocations, consisting of the following: $8.3 million for personnel related costs; $3.2 million relating to excess office space and furniture and fixtures resulting from the staff reduction; $6.1 million relating to the cost to downsize its computing and MIS structure; and $3.2 million of deferred charges relating to PT-FI's 1989 credit facility which was substantially revised in June 1993. As of December 31, 1993, the remaining accrual for these restructuring costs totaled $1.5 million relating to excess office space. In connection with the restructuring project, FCX changed its accounting systems and undertook a detailed review of its accounting records. As a result of this process, FCX recorded a $10.0 million charge to site production and delivery costs comprised of the following: $5.0 million for materials and supplies inventory obsolescence; $2.5 million for revised estimates of value added taxes and import duties related to prior years; and $2.5 million of adjustments for various items identified in converting its accounting system. Interest expense was $15.3 million during 1993 compared with $18.9 million in 1992, excluding $24.5 million and $24.0 million of capitalized interest, respectively. The New COW provides a 35 percent corporate income tax rate for PT-FI and a 15 percent withholding tax on interest for debt incurred after the signing of the New COW and on dividends paid to FCX by PT-FI. The additional withholding required on interest and on dividends paid to FCX by PT-FI, and a $15.7 million loss by RTM for which no tax benefit is recorded, results in a 1993 effective tax rate of 52 percent (Note 6). TRENDS AND OUTLOOK - MARKETING PT-FI's copper concentrates, which contain significant amounts of recoverable gold and silver, are sold primarily under long-term sales agreements which accounted for virtually all of PT-FI's 1993 sales. PT-FI has commitments from various parties to purchase virtually all of its estimated 1994 production. Concentrate sales agreements provide for provisional billings based on world metals prices, primarily the LME, generally at the time of loading. As is customary within the industry, sales under these long-term contracts usually "final-price" within a few months of shipment. Certain terms of the long-term contracts, including treatment charges, are negotiated annually on a portion of the tonnage to reflect current market conditions. Treatment charges have declined during 1993 as a result of the tightening in the concentrate market and are expected to remain at or below 1993 levels. RTM has commitments from most of its suppliers for 1994 treatment charge rates in excess of current spot market rates. The increased production at PT-FI has required it to market its concentrate globally. Its principal markets include Japan, Asia, Europe and North America. PT-FI's mill throughput is currently forecast to be approximately 67,000 MTPD for 1994 as it continues to integrate new mill equipment for the expansion to 115,000 MTPD. Current estimates for 1994 production are approximately 700 million pounds of copper and 780,000 ounces of gold for PT-FI and 165,000 ounces of gold at RTM. RTM, whose smelter can be expanded, was acquired to provide low-cost smelter capacity for a portion of PT-FI's concentrate and to improve PT-FI's competitive position in marketing concentrate to other parties. During 1993, copper prices dropped to their lowest levels since 1987, reflecting lower demand caused by the continuing global recession, but recovered to a level in excess of $.80 per pound. Prices for copper, gold, and silver are influenced by many factors beyond the Company's control and can fluctuate sharply. PT-FI has a price protection program for virtually all of its estimated copper sales to be priced in 1994 at an average floor price of $.90 per pound of copper, while allowing full benefit from prices above this amount. Based on projected 1994 PT-FI copper sales of approximately 720 million pounds, a 1 cent per pound change in the average annual copper price received over $.90 per pound would have an approximately $6 million effect on pretax operating income and cash flow. Based on projected 1994 gold sales of approximately 800,000 ounces by PT- FI, a $10 per ounce change in the average annual gold price received would have an approximately $8 million effect on 1994 pretax operating income and cash flow. CAPITAL RESOURCES AND LIQUIDITY Cash flow from operations decreased to $158.5 million during 1993 compared with $252.6 million for 1992, due primarily to lower net income and an increase in inventories. Materials and supplies increased over year-end 1992 as additional explosives, reagents and chemicals, fuel, and spare parts are required for the expanding PT-FI operations. For the year ended December 31, 1993, consolidated working capital decreased by $352.0 million from December 31, 1992, primarily as a result of a $358.0 million decrease in cash and short-term investments, which was used to reduce long- term debt and fund capital expenditures, and the negative working capital position of RTM. Cash flow used in investing activities totaled $463.5 million compared with $579.7 million in 1992. Capital expenditures increased 23 percent in 1993 due to increased expansion activities. During 1992, FCX acquired an indirect interest in PT-FI for $211.9 million. Cash flow used in financing activities totaled $53.1 million compared with $618.2 million provided by financing activities in 1992. FCX issued shares of its Step-Up Preferred Stock and its Gold-Denominated Preferred Stock during 1993 for net proceeds totaling $561.1 million. Net proceeds from the two offerings were used in part to reduce borrowings under the PT- FI amended credit agreement by a net $537.0 million, thereby increasing the facility's availability for general corporate purposes and the continued expansion of mining and milling operations. Also in 1993, the Company received net proceeds of $80.0 million from the sale of a portion of PT- FI's infrastructure assets (Note 10). In 1992, $212.5 million was received from the sale of a 10 percent interest in PT-FI to Indonesian investors in December 1991 and $392.0 million was received from the sale of Class A common stock and Special Preference Stock. Dividend payments rose in 1993 due to increased Class A shares outstanding and dividends paid on the Special Preference and Preferred Stock issued in 1992 and 1993. FCX called its Zero Coupon Exchangeable Notes (Note 7) for redemption in January 1994 (substantially all of which were exchanged for Class A common stock) and completed a public offering of its Gold-Denominated Preferred Stock, Series II (Note 4) which yielded net proceeds of $158.5 million to be used primarily for expansion related activities. Cash flow from operations increased to $252.6 million during 1992 compared with $73.9 million for 1991, due primarily to higher net income. Customer accounts receivable rose by $76.1 million to $130.6 million because of increased sales. Partially offsetting the increase in receivables was an increase in accounts payable and accrued liabilities associated with expansion activities. Cash flow used in investing activities increased to $579.7 million during 1992 compared with $240.0 million for 1991, due to increased capital expenditures for the 57,000 MTPD expansion and the purchase of an indirect interest in PT-FI. Cash flow from financing activities increased $415.8 million in 1992 compared with 1991, primarily due to the sale of Class A common stock, Special Preference Stock, and a 10 percent interest in PT-FI to Indonesian investors. The proceeds from these financing activities were used to purchase an indirect interest in PT-FI and to fund ongoing expansion related expenditures. RTM's principal operations currently consist of a copper smelter. The FCX purchase proceeds will be used by RTM for working capital requirements and capital expenditures, including funding a portion of the expansion of its smelter production capacity (expected to cost approximately $50 million) from its current 150,000 metric tons of metal per year to 180,000 metric tons of metal per year by mid-1995. RTM is also studying further expansion of the smelter facilities to as much as 270,000 metric tons of metal production per year and is assessing the opportunity to expand its tankhouse operations from 135,000 metric tons per year to 215,000 metric tons per year. RTM's 1993 cash flow from operations was negative ($5.9 million) primarily due to cash requirements related to shut-down costs for RTM's gold mine. RTM has relied on short-term credit facilities and the FCX purchase proceeds to fund this shortfall. RTM is currently evaluating financing alternatives to fund its short-term needs and to provide long- term funding for expansion. RTM's future cash flow is dependent on a number of variables including fluctuations in the exchange rate between the United States dollar and the Spanish peseta, future prices and sales volumes of gold, the size and timing of the smelter and tankhouse expansions, and the supply/demand for smelter capacity and its impact on related treatment and refining charges. During 1992, the Company established the Enhanced Infrastructure Project (EIP). The full EIP (currently expected to involve aggregate cost of as much as $500 million to $600 million) includes plans for commercial, residential, educational, retail, medical, recreational, environmental and other infrastructure facilities to be constructed during the next 20 years for PT-FI operations. The EIP will develop and promote the growth of local and other third-party activities and enterprises in Irian Jaya through the creation of certain necessary support facilities. The initial phase of the EIP is under construction and is scheduled for completion in 1995. Additional expenditures for EIP assets beyond the initial phase depend on the long-term growth of PT-FI's operations and would be expected to be funded by third-party financing sources, which may include debt, equity or asset sales. As discussed in Note 10, certain portions of the EIP and other existing infrastructure assets are expected to be sold in the near future to provide additional funds for the expansion to 115,000 MTPD. Through 1995, capital expenditures are expected to be greater than cash flow from operations. Upon completion of the previously announced 115,000 MTPD expansion by year-end 1995, annual production is expected to approach 1.1 billion pounds of copper and 1.5 million ounces of gold. Subsequently, capital expenditures will be determined by the results of FCX's exploration activities and ongoing capital maintenance programs. Estimated capital expenditures for 1994 and 1995 for the expansion to 115,000 MTPD, the initial phase of the EIP, ongoing capital maintenance expenditures, and the expansion of RTM's smelter to 180,000 metric tons of metal per year are expected to range from $850 million to $950 million and will be funded by operating cash flow, sales of existing and to-be- constructed infrastructure assets and a wide range of financing sources the Company believes are available as a result of the future cash flow from PT- FI's mineral reserve asset base. These sources include, but are not limited to, PT-FI's credit facility and the public and private issuances of securities (including the January 1994 public offering of Gold-Denominated Preferred Stock, Series II). The New COW contains provisions for PT-FI to conduct or cause to be conducted a feasibility study relating to the construction of a copper smelting facility in Indonesia and for the eventual construction of such a facility, if it is deemed to be economically viable by PT-FI and the Government of Indonesia (the Government). PT-FI has participated in a group assessing the feasibility of constructing a copper smelting facility in Indonesia. PT-FI amended its $550.0 million credit agreement in June 1993. The amended credit agreement, which, among other things eliminated a required debt service reserve and provided a lower interest rate, is guaranteed by FCX and FTX, and is structured as a three year revolving line of credit followed by a 3 1/2 year reducing revolver. As of February 1, 1994, $425.0 million was available to PT-FI under the credit facility. To the extent FTX and its other subsidiaries incur additional debt, the amount available to PT-FI under the credit facility may be reduced (Note 7). Payment of future dividends by FCX will depend on the payment of dividends by PT-FI, which, in turn, depends on PT-FI's economic resources, profitability, cash flow and capital expenditures. It is the policy of PT- FI to maximize its dividend payments to stockholders, taking into account its operational cash needs including debt service requirements. FCX currently pays an annual cash dividend of 60 cents per share to its common shareholders. Management anticipates that this dividend will continue at this level through completion of the expansion in 1995, absent significant changes in the prices of copper and gold. However, FCX's Board of Directors determines its dividend payment on a quarterly basis and in its discretion may change or maintain the dividend payment. In determining dividend policy, the Board of Directors considers many factors, including current and expected future prices and sales volumes, future capital expenditure requirements, and the availability and cost of financing from third parties. PT-FI has had good relations with the Government since it commenced operations in Indonesia in 1967. The New COW provides that the Government will not nationalize the mining operations of PT-FI or expropriate assets of PT-FI. Disputes under the New COW are to be resolved by international arbitration. The 1967 Foreign Capital Investment Law, which expresses Indonesia's foreign investment policy, provides basic guarantees of remittance rights and protection against nationalization, a framework for incentives and some basic rules as to other rights and obligations of foreign investors. ENVIRONMENTAL FTX and affiliates, including FCX, have a history of commitment to environmental responsibility. Since the 1940s, long before public attention focused on the importance of maintaining environmental quality, FTX has conducted preoperational, bioassay, marine ecological, and other environmental surveys to ensure the environmental compatibility of its operations. FTX's Environmental Policy commits FTX's operations to full compliance with local, state, and federal laws and regulations. The Company believes it is in compliance with Indonesian environmental laws, rules, and regulations. The Company had a team of environmental scientists from a leading Indonesian scientific institution conduct a study to update its 1984 Environmental Impact Assessment that covered expansion to 66,000 MTPD. Subsequently, that document was expanded by other independent scientists to cover all environmental aspects of the current expansion to 115,000 MTPD. The latest study document was submitted to the Government in December 1993. Based on preliminary hearings, the Company believes the study document will be accepted substantially as submitted. The Company has made, and will continue to make, expenditures at its operations for protection of the environment. Increasing emphasis on environmental matters can be expected to require the Company to incur additional costs, which will be charged against income from future operations. On the basis of its analysis of its operations in relation to current and presently anticipated environmental requirements, management does not anticipate that these investments will have a significant adverse impact on its future operations, liquidity, capital resources, or financial position. 1992 RESULTS OF OPERATIONS COMPARED WITH 1991 FCX reported 1992 net income of $122.9 million ($.66 per share) compared with 1991 net income of $96.2 million ($.53 per share). A reconciliation of revenues from 1991 to 1992 is presented below (in millions): Revenues - 1991 .............................................. $467.5 Price realizations: Copper ..................................................... 8.8 Gold........................................................ (7.4) Sales volumes: Copper...................................................... 218.5 Gold ....................................................... 95.7 Treatment charges............................................. (73.0) Adjustments to prior year concentrate sales................... 12.5 Other......................................................... (8.3) ------ Revenues - 1992 .............................................. $714.3 ====== Revenues increased 53 percent in 1992, reflecting higher production rates due to the mine/mill expansion, higher gold grades, and the sale of all year-end 1991 inventory. Price realizations were relatively unchanged between years (2 percent increase in copper realizations and 5 percent decrease in gold realizations), but sales volumes benefited significantly from the expansion, higher gold grades, and inventory sales discussed above. Copper sales volumes increased 48 percent and gold sales volumes increased 71 percent. Partially offsetting the benefit from sales volumes increases was a 3.6 cents per pound increase in treatment charges because of tight market conditions in the smelting industry early in 1992 and increased spot market sales attributable to higher than anticipated production due to the early completion of the 57,000 MTPD expansion program. A $5.7 million upward revenue adjustment was made in 1992 compared with a $6.8 million downward revenue adjustment in 1991 for prior year concentrate sales contractually priced during the year. Cost of sales for 1992 were $357.2 million, an increase of 47 percent from 1991 due primarily to the 48 percent increase in copper sales volumes. Unit site production and delivery costs in 1992 approximated 1991 costs. FCX's depreciation rate declined from an average 8.7 cents per recoverable pound in 1991 to 7.4 cents in 1992 because of the significant increase in ore reserves during 1991. Interest expense was $18.9 million during 1992 compared with $21.5 million in 1991, excluding $24.0 million and $18.3 million of capitalized interest, respectively. The 1992 general and administrative expenses rose to $68.5 million from $40.6 million in 1991, because of several financing transactions and operational and environmental studies in 1992 which required additional corporate personnel whose salaries and related overhead, were charged to the Company. General and administrative expenses also increased because of the additional personnel and facilities needed in Indonesia for the expanding operations. Minority interest share of net income reflects FCX's 80 percent ownership interest in PT-FI for 1992, compared with its 90 percent interest during 1991. ___________________________ The results of operations reported and summarized above are not necessarily indicative of future operating results. The information set forth under the caption "FCX Class A Common Shares" and "Class A Common Share Dividends", on the inside back cover of FCX's 1993 Annual Report to stockholders, is incorporated herein by reference. As of March 15, 1994, there were 2,355 record holders of FCX's Class A common stock. Item 8. Financial Statements and Supplementary Data. - ----------------------------------------------------- The financial statements of FCX, the notes thereto, the report of management and the report thereon of Arthur Andersen & Co., appearing on pages 25 through 39, inclusive, of FCX's 1993 Annual Report to stockholders, are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting - ---------------------------------------------------------------------------- and Financial Disclosure. ------------------------- Not applicable. PART III -------- Items 10, 11, 12, and 13. Directors and Executive Officers of the Registrant, - ------------------------------------------------------------------------------ Executive Compensation, Security Ownership of Certain Beneficial -------------------------------------------------------------------- Owners and Management, and Certain Relationships and Related ----------------------------------------------------------------- Transactions. ------------- The information set forth under the captions "Voting Procedure" and "Election of Directors", beginning on pages 1 and 5, respectively, of the Proxy Statement dated March 31, 1994, submitted to the stockholders of FCX in connection with its 1994 Annual Meeting to be held on May 5, 1994, is incorporated herein by reference. PART IV ------- Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. - -------------------------------------------------------------------------- (a)(1), (a)(2), and (d). Financial Statements. See Index to Financial Statements appearing on page F-1 hereof. (a)(3) and (c). Exhibits. See Exhibit Index beginning on page E-1 hereof. (b). Reports on Form 8-K. No reports on Form 8-K were filed by the registrant during the fourth quarter of 1993. SIGNATURES ---------- Pursuant to the requirements of Section 13 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, on March 29, 1994. FREEPORT-McMoRan COPPER & GOLD INC. BY: /s/ James R. Moffett -------------------------------- James R. Moffett Chairman of the Board Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 29, 1994. /s/ James R. Moffett Chairman of the Board and - ------------------------------ Director James R. Moffett George A. Mealey* President, Chief Executive Officer and Director (Principal Executive Officer) Stephen M. Jones* Vice President and Chief Financial Officer (Principal Financial Officer) C. Donald Whitmire* Controller (Principal Accounting Officer) Leland 0. Erdahl* Director Ronald Grossman* Director Rene L. Latiolais* Director Wolfgang F. Siegel* Director Elwin E. Smith* Director Eiji Umene* Director *By: /s/ James R. Moffett ------------------------------- James R. Moffett Attorney-in-Fact INDEX TO FINANCIAL STATEMENTS ------------------------------ The financial statements of FCX, the notes thereto, and the report thereon of Arthur Andersen & Co. appearing on pages 25 through 39, inclusive, of FCX's 1993 Annual Report to stockholders are incorporated by reference. The financial statement schedules listed below should be read in conjunction with such financial statements contained in FCX's 1993 Annual Report to stockholders. Page ---- Report of Independent Public Accountants........................ F-1 II-Amounts Receivable from Employees............................ F-2 III-Condensed Financial Information of Registrant............... F-3 V-Property, Plant and Equipment................................. F-6 VI-Accumulated Depreciation and Amortization.................... F-7 X-Supplementary Income Statement Information.................... F-8 Schedules other than those schedules listed above have been omitted since they are either not required or not applicable or the required information is included in the financial statements or notes thereof. * * * REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ---------------------------------------- We have audited, in accordance with generally accepted auditing standards, the financial statements as of December 31, 1993 and 1992 and for each of the three years in the period ended December 31, 1993 included in Freeport-McMoRan Copper & Gold Inc.'s annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated January 25, 1994. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in the index above are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. Arthur Andersen & Co. New Orleans, Louisiana January 25, 1994 FREEPORT-McMoRan COPPER & GOLD INC. SCHEDULE II - AMOUNTS RECEIVABLE FROM EMPLOYEES for the years ended December 31, 1993, 1992 and 1991
Balance at Balance at Beginning Amounts End of Period ------------------- -------------- Employee of Period Additions Collected Written Current Long- Off Term - ------------------- ---------- --------- --------- --------- ------- ------ 1993: - ---- Usman S. Pamuntjak $305,910 $ - $305,910 - $ - $ - Hoediatmo Hoed 248,069 - 25,668 - 25,663 196,738 Adrianto Machribie 480,000 200,000 65,500 - 73,200 541,300 1992: - ---- Usman S. Pamuntjak 339,900 - 33,990 - 33,990 271,920 Hoediatmo Hoed 271,425 256,625 279,981 - 25,663 222,406 Adrianto Machribie - 500,000 20,000 - 60,000 420,000 1991: - ---- Usman S. Pamuntjak 339,900 - - - 33,990 305,910 Hoediatmo Hoed 291,625 - 20,200 - 22,400 249,025 a. Under the (PT-FI) residential loan policy, Mr. Pamuntjak, President of PT-FI until December 31, 1990, Mr. Hoed, President of PT-FI effective January 1, 1991, and Mr. Machribie, Vice President of PT-FI, borrowed $525,450, $360,000 and $700,000, respectively. Mr. Pamuntjak retired from PT-FI on December 31, 1990 and on January 1, 1991 signed a consulting services agreement with PT-FI. For the performance of his services under this agreement, PT-FI forgave, as compensation, 10 percent of the indebtedness in 1992. The consulting services agreement with Mr. Pamuntjak was terminated in January 1993, at which time Mr. Pamuntjak repaid the balance of the loan. Effective September 1992, Mr. Hoed executed a new loan in the amount of $256,625 which was used to pay off the remaining balance of the existing loan; 10 percent of the principal amount of the new loan will be forgiven annually. Effective August 1992, Mr. Machribie borrowed $500,000 consisting of one loan for $400,000 (First Loan) and a second loan for $100,000 (Second Loan). As long as Mr. Machribie remains in the employ of PT- FI, 10 percent of the principal amount of the First Loan and 20 percent of the principal amount of the Second Loan will be forgiven annually; a pro rata amount of $20,000 was forgiven in 1992. Additionally, effective July 6, 1993, Mr. Machribie borrowed $200,000. This loan will be repaid over 15 years through monthly salary deductions in the amount of $1,100, which began in August 1993.
FREEPORT-McMoRan COPPER & GOLD INC. SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT Balance Sheets December 31, ---------------------------- 1993 1992 ---------- -------- (In Thousands) ASSETS Cash and short-term investments $ 427 $174,760 Interest receivable 7,582 1,739 Receivable from Government of Indonesia 2,247 8,535 Notes receivable-PT-FI 1,064,888 458,274 Investment in PT-FI 145,959 106,169 Investment in PTII 75,601 74,401 Investment in RTM 43,254 - Other Assets 2,011 115 ---------- -------- Total assets $1,341,969 $823,993 ========== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable & accrued liabilities $ 32,468 $ 3,953 Zero coupon exchangeable notes 102,039 173,583 Amount due to FTX 12,270 - RTM stock subscription payable 12,644 - Other liabilities and deferred credits 2,001 - Mandatory Redeemable Gold-Denominated Preferred Stock 232,620 - Stockholders' equity 947,927 646,457 ------- -------- Total liabilities and stockholders' equity $1,341,969 $823,993 ========== ======== Statements of Income Years Ended December 31, ------------------------------------- 1993 1992 1991 -------- --------- -------- (In Thousands) Income from investment in PT-FI and PTII, net of PT-FI tax provision $ 53,861 $128,220 $100,472 Net loss from investment in RTM (15,666) - - Elimination of intercompany profit (6,610) - - General and administrative expenses (5,207) (4,802) (3,280) Depreciation and amortization (2,397) (200) (1,134) Interest expense (8,017) (16,518) (8,767) Interest income on PT-FI notes receivable: Zero coupon exchangeable notes 19,175 18,326 8,767 Promissory notes 9,292 11,097 - 8.235% convertible 14,036 - - Step-up perpetual convertible 12,785 - - Gold production payment loan 4,055 - - Other income (expense), net (406) 5,561 101 Provision for income taxes (24,085) (11,791) - ------- -------- -------- Net income 50,816 129,893 96,159 Preferred dividends (28,954) (7,025) - ------- -------- -------- 21,862 $122,868 $ 96,159 ======= ======== ======== FREEPORT-McMoRan COPPER & GOLD INC. SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued) Statements of Cash Flow Years Ended December 31, ----------------------------- 1993 1992 1991 -------- -------- -------- (In Thousands) Cash flow from operating activities: Net income $ 50,816 $129,893 $ 96,159 Adjustments to reconcile net income to net cash provided by operating activities: Income from investment in PT-FI and PTII (53,861) (128,220) (100,472) Net loss from investment in RTM 15,666 - - Elimination of intercompany profit 6,610 - - Dividends received from PT-FI 132,048 78,214 126,330 Accretion of note receivable - PT-FI, net (9,104) (1,808) - Depreciation and amortization 2,397 200 1,134 (Increase) decrease in accounts receivable - 20,000 (20,000) Increase (decrease) in accounts payable (646) 597 (18) Other (5,959) (1,854) - -------- -------- -------- Net cash provided by operating activities 137,967 97,022 103,133 -------- -------- -------- Cash flow from investing activities: Received from Government of Indonesia 6,288 3,911 5,615 Investment in RTM (43,642) - - Investment in PTII - (211,892) - Investment in Freeport Hasa Inc. - (1) - -------- -------- -------- Net cash provided by (used in) investing activities (37,354) (207,982) 5,615 -------- -------- -------- Cash flow from financing activities: Cash dividends paid: Class A common stock (33,298) (26,088) (22,000) Class B common stock (85,277) (85,277) (78,171) Special preference stock (15,708) (4,407) - Step-Up preferred stock (5,590) - - Gold-denominated preferred stock (1,683) - - Net proceeds from issuance of zero coupon notes - - 218,560 Proceeds from Class A common stock offering - 174,142 - Proceeds from Depositary shares offerings 561,090 217,867 - Proceeds from sale of stock to Bakrie - 212,484 - Proceeds from FTX 20,650 - - Repayment to FTX (8,380) - - Loans to PT-FI (706,750) (212,484) (218,560) -------- -------- -------- Net cash provided by (used) in financing activities (274,946) 276,237 (100,171) -------- -------- -------- Net increase (decrease) in cash and short-term investments (174,333) 165,277 8,577 Cash and short-term investments at beginning of year 174,760 9,483 906 -------- -------- -------- Cash and short-term investments at end of year $ 427 $174,760 $ 9,483 ======== ======== ======== Interest paid $ 213 $ - $ - ======== ======== ======== Taxes paid $ 22,723 $ 11,762 $ - ======== ======== ======== a. The footnotes contained in FCX's 1993 Annual Report to stockholders are an integral part of these statements. b. Effective December 31, 1991, PT-FI issued 21,300 of its shares, representing a 10 percent interest in PT-FI, to a publicly traded entity owned by Indonesian investors for $212.5 million, pursuant to an agreement negotiated in early 1991. FCX guaranteed the buyer's financing for this purchase and accordingly, deferred the gain on the sale. In December 1992, FCX purchased approximately 49 percent of the capital stock of P.T. Indocopper Investama Corporation (PTII), a publicly traded Indonesian entity which owned 10 percent of the outstanding common stock of PT-FI. PTII acquired the 10 percent of the outstanding common stock of PT-FI from the Indonesian investors who acquired the shares on December 31, 1991. When FCX recorded its investment in PTII it utilized purchase accounting and thus eliminated the deferred gain of $138.6 million on the original sale to the Indonesian investors against the cost of the 4.9 percent indirect interest in PT-FI. The excess cost resulting from the purchase ($69.5 million) is reflected in FCX's consolidated balance sheet as property, plant and equipment and is being amortized over the remaining life of the Contract of Work (approximately 28 years), at a rate of approximately $2.4 million per year. This property, plant and equipment is included in the condensed balance sheet as part of FCX's investment in PTII. FREEPORT-McMoRan COPPER & GOLD INC. SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT for the years ended December 31, 1993, 1992, and 1991 Col. A Col. B Col. C Col. D Col. E Col. F - --------------------- ------------ --------- ----------- --------- ---------- Balance at Balance at Beginning of Additions Retirements Other-Add End of Description Period at Cost and Sales (Deduct) Period - --------------------- ------------ --------- ----------- --------- --------- (In Thousands) 1993: - ---- Exploration and development costs $ 137,576 $ 9,365 $ - $ - $ 146,941 Plant and equipment 1,306,363 751,131 (2,882) (29,331) 2,025,281 ---------- -------- ------- --------- ---------- $1,443,939 $760,496 $(2,882) $ (29,331) $2,172,222 ========== ======== ======= ========= ========== 1992: - ---- Exploration and development costs $ 135,548 $ 2,028 $ - $ - $ 137,576 Plant and equipment 876,481 365,820 (5,445) 69,507 (a) 1,306,363 ---------- -------- ------- --------- ---------- $1,012,029 $367,848 $(5,445) $ 69,507 $1,443,939 ========== ======== ======= ========= ========== 1991: - ---- Exploration and development costs $ 129,138 $ 6,410 $ - $ - $ 135,548 Plant and equipment 748,851 233,544 (3,729) (102,185)(a) 876,481 ---------- -------- ------- --------- ---------- $ 877,989 $239,954 $(3,729) $(102,185) $1,012,029 ========== ======== ======= ========= ========== a. See note (b) on Schedule III. FREEPORT-McMoRan COPPER & GOLD INC. SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION for the years ended December 31, 1993, 1992, and 1991 Col. A Col. B Col. C Col. D Col. E Col. F - ------------------------- ----------- ----------- ---------- --------- ------- Balance at Additions Balance Beginning Charged to Retire- at of Costs and ments Other-Add End of Description Period Expenses(a) and Sales (Deduct) Period - ------------------------- ----------- ----------- --------- --------- ------ (In Thousands) 1993: Accumulated - ---- depreciation and amortization $450,527 $67,906 $(2,732) $ 9,918 $525,619 ======== ======= ======= ======= ======== 1992: Accumulated - ---- depreciation and amortization $410,354 $48,272 $(5,438) $(2,661) $450,527 ======== ======= ======= ======= ======== 1991: Accumulated - ---- depreciation and amortization $375,818 $38,397 $(3,729) $ (132) $410,354 ======== ======= ======= ======= ======== a. Mine and mill assets, including estimated future capital costs, are depreciated on the unit-of-production method while the remaining assets are depreciated on a straight-line basis. FREEPORT-McMoRan COPPER & GOLD INC. SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION for the years ended December 31, 1993, 1992, and 1991 Col. A Col. B - -------------------------------------- ------------------------------------ Description Charged to Costs and Expenses - -------------------------------------- ------------------------------------ 1993 1992 1991 ------- ------- ------- (In Thousands) Maintenance and repairs $78,335 $68,623 $52,061 ======= ------- ------- Taxes, other than payroll and income taxes: Value added tax $ 4,164 $ 792 $ 1,371 Shippers tax - - (12) Fiscal 259 263 60 P.I.U.D. 3,050 3,148 2,716 ------- ------- ------- $ 7,473 $ 4,203 $ 4,135 ======= ======= ======= Royalties $ 9,539 $15,708 $10,355 ======= ======= ======= Freeport-McMoRan Copper & Gold Inc. Exhibit Index Sequentially Exhibit Numbered Number Page ------ ------------ 3.1 Composite copy of the Certificate of Incorporation of FCX. 3.2 By-Laws of FCX, as amended. Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K of FCX for the fiscal year ended December 31, 1992 (the "FCX 1992 Form 10-K"). 4.1 Certificate of Designations of the 7% Convertible Exchangeable Special Preference Stock (the "Special Preference Stock") of FCX. Incorporated by reference to Exhibit 5 to the Form 8 Amendment No. 1 dated July 16, 1992 (the "Form 8 Amendment") to the Application for Registration on Form 8-A of FCX dated July 2, 1992. 4.2 Deposit Agreement dated as of July 21, 1992 among FCX, Mellon Securities Trust Company, as Depositary, and holders of depositary receipts ("Depositary Receipts") evidencing certain Depositary Shares, each of which, in turn, represents 2-16/17 shares of Special Preference Stock. Incorporated by reference to Exhibit 2 to the Form 8 Amendment. 4.3 Form of Depositary Receipt. Incorporated by reference to Exhibit 1 to the Form 8 Amendment. 4.4 Certificate of Designations of the Step-Up Convertible Preferred Stock (the "Step-Up Convertible Preferred Stock") of FCX. 4.5 Deposit Agreement dated as of July 1, 1993 among FCX, Mellon Securities Trust Company, as Depositary, and holders of depositary receipts ("Step-Up Depositary Receipts") evidencing certain Depositary Shares, each of which, in turn, represents 0.05 shares of Step-Up Convertible Preferred Stock. 4.6 Form of Step-Up Depositary Receipt. 4.7 Certificate of Designations of the Gold-Denominated Preferred Stock (the "Gold-Denominated Preferred Stock") of FCX. 4.8 Deposit Agreement dated as of August 12, 1993 among FCX, Mellon Securities Trust Company, as Depositary, and holders of depositary receipts ("Gold-Denominated Depositary Receipts") evidencing certain Depositary shares, each of which, in turn, represents 0.05 shares of Gold Denominated Preferred Stock. 4.9 Form of Gold-Denominated Depositary Receipt. 4.10 Credit Agreement dated as of June 1, 1993 (the "PT-FI Credit Agreement") among PT-FI, the several banks which are parties thereto (the "PT-FI Banks"), Morgan Guaranty Trust Company of New York, as PT-FI Trustee (the "PT-FI Trustee"), and Chemical Bank, as agent (the "PT-FI Bank Agent"). 4.11 First Amendment dated as of February 2, 1994 to the PT-FI Credit Agreement among PT-FI, the PT-FI Banks, the PT- FI Trustee and the PT-FI Bank Agent. 4.12 Second Amendment dated as of March 1, 1994 to the PT-FI Credit Agreement among PT-FI, the PT-FI Banks, the PT- FI Trustee and the PT-FI Bank Agent. 4.13 Agreement dated as of May 1, 1988 between Freeport Minerals Company and FCX assigning certain stockholder rights and obligations. Incorporated by reference to Exhibit 10.13 to Registration No. 33-20807. 10.1 Design, Engineering and Related Services Contract dated as of September 15, 1992 between PT-FI and Fluor Daniel Engineers & Constructors, Ltd. Incorporated by reference to Exhibit 10.1 to the FCX 1992 Form 10-K. 10.2 Site Services Contract dated as of September 15, 1992 between PT-FI and Fluor Daniel Eastern, Inc. Incorporated by reference to Exhibit 10.2 to the FCX 1992 Form 10-K. 10.3 Contract of Work dated December 30, 1991 between The Government of the Republic of Indonesia and PT-FI. Incorporated by reference to Exhibit 10.20 to the FCX 1991 Form 10-K. 10.4 Management Services Agreement dated as of May 1, 1988 among FCX, FII and FTX. Incorporated by reference to Exhibit 10.01 to Registration No. 33- 20807. 10.5 Concentrate Sales Agreement dated as of December 30, 1990 between FII and Dowa Mining Co., Ltd., Furukawa Co., Ltd., Mitsubishi Materials Corporation, Mitsui Mining & Smelting Co., Ltd., Nittetsu Mining Co., Ltd., Nippon Mining Co., Ltd. and Sumitomo Metal Mining Co., Ltd. (Confidential information omitted and filed separately with the Securities and Exchange Commission.) Incorporated by reference to Exhibit 10.3 to the Annual Report on Form 10-K of FCX for the fiscal year ended December 31, 1990. 12.1 FCX Computation of Ratio of Earnings to Fixed Charges. 13.1 Those portions of the 1993 Annual Report to stockholders of FCX which are incorporated herein by reference. 18.1 Letter from Arthur Andersen & Co. concerning changes in accounting principles. 21.1 Subsidiaries of FCX. 23.1 Consent of Arthur Andersen & Co. dated March 25, 1994. 24.1 Certified resolution of the Board of Directors of FCX authorizing this report to be signed on behalf of any officer or director pursuant to a Power of Attorney. 24.2 Powers of Attorney pursuant to which this report has been signed on behalf of certain officers and directors of FCX. EX-3.1 2 Exhibit 3.1 COMPOSITE COPY OF THE CERTIFICATE OF INCORPORATION OF FREEPORT-McMoRan COPPER & GOLD INC. FIRST: The name of the corporation is FREEPORT-McMoRan COPPER & GOLD INC. SECOND: The address of the registered office of the corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, and the name of its registered agent at such address is The Corporation Trust Company. THIRD: The nature of the business or purposes to be conducted or promoted are: 1. To enter into, maintain, operate and carry on the business of mining in all its branches in the United States of America and in any other part of the world, and to quarry, mine, pump, extract, remove and otherwise produce, and to grind, treat, concentrate, smelt, refine, dress and otherwise prepare, produce, buy, sell and in every way deal in and with minerals, ores, concentrates and other mineral and chemical substances of all kinds, metallic and nonmetallic, including, but without in any way limiting the generality of the foregoing, antimony, barite, chromium, coal, cobalt, copper, gas, gold, iron, lead, molybdenum, nickel, oil, potash, salt, silica, sand, silver, sulphur, tantalum, tin, titanium, tungsten, uranium, zinc and ores and concentrates thereof. 2. To purchase, locate, denounce, lease or otherwise acquire, take, hold and own, and to assign, transfer, lease, exchange, mortgage, pledge, sell or otherwise dispose of and in any manner deal with and contract with reference to, mines, wells, mining claims, mining rights, mineral lands, mineral leases, mineral rights, royalty rights, water rights, timber lands, timber and timber rights, and real and personal property of every kind, and any interest therein, in the United States of America or in any other country, to prospect, explore, work, exercise, develop, manage, operate and turn the same to account, and to engage in mining, geological, economic, feasibility, development, and other studies in the United States of America or in any other country. 3. To make, manufacture, treat, process, produce, buy, sell and in every way deal in and with minerals, ores, concentrates and chemicals of every description, organic or inorganic, natural or synthetic, in the form of raw materials, intermediate or finished products and any other related products and substances whatsoever related thereto or of a like or similar nature or which may enter into the manufacture of any of the foregoing or be used in connection therewith, and derivatives and by-products derived from the manufacture thereof and products to be made therefrom and generally without limitation by reference of the foregoing, all other products and substances of every kind, character and description. 4. To engage in any lawful act or activity, whether or not related to the foregoing, for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: I. The total number of shares of all classes of capital stock that the corporation shall have authority to issue is 312,000,000 shares, with a par value of $0.10 per share. Of such shares, 110,000,000 shares shall consist of Special Stock, 200,000,000 shares shall consist of Class B Common Stock and 2,000,000 shares shall consist of Preferred Stock. II. Special Stock. A. Class A Common Stock Within the limits of the authorized Special Stock, the Corporation shall have authority to designate shares of Special Stock as shares of Class A Common Stock, the terms of which are as follows: (1) Dividends. (a) Until and including May 1, 1993 (the "Preferential Period"), the holders of shares of Class A Common Stock will be entitled to receive cumulative cash dividends (the "Cumulative Dividend") when, as and if declared by the Board of Directors of the corporation, payable quarterly on the first day of each February, May, August and November, at an annual rate equal to $0.205 per share for periods commencing August 1, 1992; provided, if the corporation shall subdivide or split by dividend or otherwise the issued shares of Class A Common Stock into a larger number of shares or combine the issued shares of Class A Common Stock into a smaller number of shares, such annual rate shall be adjusted by multiplying such annual rate by a fraction, the numerator of which shall be the number of shares of Class A Common Stock that are issued and outstanding prior to such subdivision, split or combination and the denominator of which shall be the total number of shares of Class A Common Stock that are issued and outstanding following such subdivision, split or combination; provided further, that the Board of Directors may, at any time during the Preferential Period, at its sole discretion, increase the amount of the Cumulative Dividend to which holders of Class A Common Stock will be entitled. During the Preferential Period, Cumulative Dividends on the Class A Common Stock will accrue and be cumulative from the date of its original issue and will be payable to the holder of record on such respective record dates as may be fixed by the Board of Directors in advance of the payment of each Cumulative Dividend. (b) Unless full Cumulative Dividends on all outstanding shares of Class A Common Stock for all past quarterly dividend periods in the Preferential Period and for the current quarterly dividend period (if during the Preferential Period) have been paid, or declared and set apart for payment, (i) the corporation may not declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, the Class B Common Stock or any other stock of the corporation ranking junior to the Class A Common Stock as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the corporation (the Class B Common Stock and such other stock being referred to hereinafter as "Junior Stock") other than a dividend payable solely in Junior Stock, (ii) neither the corporation nor any subsidiary of the corporation may purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification of Junior Stock, or the exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, and (iii) neither the corporation nor any subsidiary of the corporation may make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock. If the funds available for the payment of dividends are insufficient to pay in full the Cumulative Dividends payable on all outstanding shares of Class A Common Stock and any other series or class of capital stock ranking on a parity as to dividends with the Class A Common Stock, the total available funds to be paid in partial dividends on the Class A Common Stock and such other series or class shall be divided among the Class A Common Stock and such other series or class in proportion to the aggregate amount of dividends accrued and unpaid with respect to the Class A Common Stock and such other series or class. Accruals of Cumulative Dividends will not bear interest. (c) After full Cumulative Dividends on all outstanding shares of Class A Common Stock for all past quarterly dividend periods in the Preferential Period and the current quarterly dividend period (if during the Preferential Period) and full preferential dividends on all outstanding shares of any other series of Special Stock ranking senior in priority as to payment of such preferential dividends to the Class B Common Stock have been paid, or declared and set apart for payment, the corporation may declare dividends on the Class B Common Stock for such quarter in an amount per share up to the per share Cumulative Dividend for such current quarter on the Class A Common Stock. No additional dividends may be declared or paid in such quarter on the Class B Common Stock unless an equal additional amount per share shall be declared or paid on the Class A Common Stock and any other series of Special Stock entitled to participate therein. (d) After May 1, 1993, and after full Cumulative Dividends on all outstanding shares of Class A Common Stock for all past quarterly dividend periods in the Preferential Period have been paid, or declared and set apart for payment, the Class A Common Stock and the Class B Common Stock shall be treated for all purposes as though they were of the same class. Prior to such time, the corporation may not split or reclassify the Class B Common Stock or pay a dividend in Class B Common Stock on the Class B Common Stock, unless it similarly splits or reclassifies the Class A Common Stock or pays a similar dividend in Class A Common Stock on the Class A Common Stock. (2) Liquidation Rights. Until May 1, 1993, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the corporation or P.T. Freeport Indonesia Company ("PT- FI"), after payment or provision for payment of the debts and other liabilities of the Corporation or PT-FI, the holders of Class A Common Stock will be entitled to receive in cash out of the remaining net assets of the corporation an amount per share initially equal to $2.1875 reduced by 1.25 per cent on each quarterly dividend payment date commencing August 1, 1988, plus accrued and unpaid dividends, before any distribution is made or set apart for the holders of Junior Stock; provided, if the corporation shall subdivide or split by dividend or otherwise the issued shares of Class A Common Stock into a larger number of shares or combine the issued shares of Class A Common Stock into a smaller number of shares, such amount per share as in effect at the time of such subdivision, split or combination shall be adjusted by multiplying such amount per share by a fraction, the numerator of which shall be the number of shares of Class A Common Stock that are issued and outstanding prior to such subdivision, split or combination and the denominator of which shall be the total number of shares of Class A Common Stock that are issued and outstanding following such subdivision, split or combination. If the amounts payable with respect to the Class A Common Stock are not paid in full, the holders of the Class A Common Stock and any stock of the corporation on a parity with Class A Common Stock as to distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the corporation will have the right to share ratably in any distribution of the remaining assets of the corporation in proportion to the full respective preferential amounts to which they are entitled. After payment of the full amount of the liquidating distribution to which the holders of the Class A Common Stock are entitled, the holders of shares of Class B Common Stock will be entitled to participate in any distribution of the remaining assets by the corporation up to an amount per share equal to the per share liquidating distribution (excluding any amounts received with respect to accrued and unpaid preferential dividends) received by the holders of the Class A Common Stock, subject to the rights of the holders of any other class or series of the corporation's capital stock. Thereafter, the holders of the Class A Common Stock and the holders of the Class B Common Stock shall be entitled to participate in any distribution of the remaining assets on an equal per share basis, subject to the rights of the holders of any other class or series of the corporation's capital stock. A consolidation or merger of the corporation or PT-FI with one or more corporations other than Freeport-McMoRan Inc. or any of its subsidiaries of affiliates (the "FTX Group") or the sale of all or substantially all of the assets of the corporation or PT-FI outside the FTX Group will be deemed to be a liquidation, dissolution or winding up of the corporation or PT-FI. In the event of any nationalization or expropriation of PT-FI's rights under its current Contract of Work with the Government of Indonesia or all or substantially all of the operating assets of PT-FI prior to May 1, 1993, the corporation will effect a liquidation or dissolution in a manner designed to maximize the remaining assets of the corporation available for distribution. The Class A Common Stock will have a similar preferential right in the event of any such voluntary or involuntary liquidation, dissolution or winding up of the corporation or PT-FI after May 1, 1993 to the extent, but only to the extent, of any accrued and unpaid cumulative dividends applicable to the Preferential Period. (3) At all times during the Preferential Period, there shall remain outstanding shares of Class B Common Stock in an amount equal to not less than sixty percent of the total of all shares of Class A Common Stock, other Special Stock and Class B Common Stock then issued and outstanding. (4) No Preferred Stock may be issued during the Preferential Period. B. Additional Shares of Special Stock The Board of Directors is expressly authorized to adopt, from time to time, a resolution or resolutions providing for the issuance of the remaining 70,000,000 shares of Special Stock in one or more series, to fix the number of shares in each such series (subject to the aggregate limitations thereon in this Article), and to fix the designations, powers, preferences and rights and the qualifications, limitations and restrictions of each such series. Within the limits of the authorized Special Stock, the corporation will be authorized to issue additional shares of Class A Common Stock and shares of additional Special Stock (including stock having preferential rights which are similar to those of Class A Common Stock but which extend beyond the Preferential Period, providing that during the Preferential Period such rights do not permit the payment of preferential dividends per share in excess of the preferential rights of the Class A Common Stock), including the issuance in exchange for shares of Class B Common Stock of such shares for sale to the public. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following (which may vary as between the different series of Special Stock): (a) The number of shares constituting the shares of the series and the distinctive designation of the series; (b) The dividend rate of the shares of the series and the extent, if any, to which dividends thereon shall be cumulative; (c) Whether shares of the series shall be redeemable and, if redeemable, the redemption price payable on redemption thereof, which price may, but need not, vary according to the time or circumstances of such redemption; (d) The amount or amounts payable upon the shares of the series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation prior to any payment or distribution of the assets of the corporation to any class or classes of stock of the corporation ranking junior to the Special Stock; (e) Whether the shares of the series shall be entitled to the benefit of a sinking or retirement fund to be applied to the purchase or redemption of shares of the series and, if so entitled, the amount of such fund and the manner of its application, including the price or prices at which the shares may be redeemed or purchased through the application of such fund; (f) Whether the shares of the series shall be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the corporation, and, if so convertible or exchangeable, the conversion price or prices, or the rates of exchange, and the adjustment thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange; (g) The extent, if any, to which the holders of shares of the series shall be entitled to vote on any questions or in any proceedings or to be represented at and to receive notice of any meeting of stockholders of the corporation; (h) Whether, and the extent to which, any of the voting powers, designations, preferences, rights, qualifications, limitations or restrictions of any such series may be made dependent upon facts ascertainable outside of this Certificate of Incorporation or of any amendment hereto or outside the resolution or resolutions providing for the issuance of such series adopted by the Board of Directors, provided that the manner in which such facts shall operate upon the voting powers, designations, preferences, rights, qualifications, limitations or restrictions of such series is clearly and expressly set forth in the resolution or resolutions providing for the issuance of such series adopted by the Board of Directors; and (i) Any other preferences, privileges or powers and any relative, participating, optional or other special rights and qualifications, limitations or restrictions of such series, as the Board of Directors may deem advisable, which shall not affect adversely any other class or series of Special Stock at the time outstanding and which shall not be inconsistent with the provisions of this Certificate of Incorporation. III. (a) Except as described in Paragraph II above, the holders of outstanding shares of Special Stock, including Class A Common Stock, and Class B Common Stock are entitled to receive dividends out of assets legally available therefor at such times and such equal per share amounts as the Board of Directors may from time to time determine and upon liquidation, dissolution or winding up of the corporation, the holders of Special Stock, including Class A Common Stock, and Class B Common Stock are entitled to receive on an equal per share basis the assets of the corporation which are legally available for distribution, after payment of all debts and other liabilities of the corporation, except as otherwise provided by the Board of Directors, pursuant to clause (B)(d) of Paragraph II above, with respect to any series of Special Stock other than the Class A Common Stock. The shares of Special Stock, including Class A Common Stock, and Class B Common Stock are neither redeemable nor convertible, and the holders thereof have no preemptive or subscription rights to purchase any securities of the corporation, except as otherwise provided by the Board of Directors, pursuant to clauses (B)(c) and (B)(f) of Paragraph II above, with respect to any series of Special Stock other than the Class A Common Stock. (b) Each outstanding share of Special Stock, including Class A Common Stock, and Class B Common Stock is entitled to one vote on all matters submitted to a vote of stockholders, except as otherwise provided by the Board of Directors, pursuant to clause (B)(g) of Paragraph II above, with respect to any series of Special Stock other than the Class A Common Stock. There is no cumulative voting. The Special Stock entitled to vote, including Class A Common Stock, and the Class B Common Stock shall vote as a single class, except that, during the Preferential Period, the holders of the Class A Common Stock shall be entitled to vote as a separate class upon any proposed amendment to this Certificate of Incorporation or any merger transaction or recapitalization if as a result the aggregate number of authorized shares of Special Stock, including Class A Common Stock, would increase beyond 110,000,000 shares or the par value of the Class A Common Stock would increase or decrease or the powers, preferences or special rights of the Class A Common Stock would be altered or changed so as to affect the holders thereof adversely. IV. Preferred Stock. The Preferred Stock may be divided into and issued in series. The Board of Directors is hereby expressly authorized, at any time or from time to time, to divide any or all of the shares of the Preferred Stock into series, and in the resolution or resolutions establishing a particular series, before issuance of any of the shares thereof, to fix and determine the powers, designations, preferences and relative, participating, optional or other rights, and any qualifications, limitations or restrictions, of the series so established, to the fullest extent now or hereafter permitted by the laws of the State of Delaware, including, but not limited to, the variations between different series in the following respects: (a) The distinctive serial designation of such series; (b) The annual dividend rate for such series; and the date or dates from which dividends shall commence to accrue; (c) The redemption price or prices, if any, for shares of such series and the terms and conditions on which such shares may be redeemed; (d) The sinking fund provisions, if any, for the redemption or purchase of shares of such series; (e) The preferential amount or amounts payable upon shares of such series in the event of the voluntary or involuntary liquidation of the corporation; (f) The voting rights of shares of such series; (g) The terms and conditions, if any, upon which shares of such series may be converted and the class or classes or series of shares of the corporation into which such shares may be converted; and (h) Such other terms, limitations and relative rights and preferences, if any, of shares of such series as the Board of Directors may, at the time of such resolutions, lawfully fix and determine under the laws of the State of Delaware. All shares of the Preferred Stock shall be of equal rank with each other, regardless of series. FIFTH: The name and mailing address of the incorporator is: NAME MAILING ADDRESS _____ ________________ R. Blain Andrus 6110 Plumas Street Reno, Nevada 89509 SIXTH: The names and mailing addresses of the persons who are to serve as directors until the first annual meeting of stockholders or until their successors are elected and qualify are as follows: NAME MAILING ADDRESS ____ _______________ Milton H. Ward 1615 Poydras Street New Orleans, LA 70112 Joseph W. Murray Mountain City Star Route Elko, NV 89801 Richard Block Mountain City Star Route Elko, NV 89801 SEVENTH: In furtherance, and not in limitation, of the powers conferred by statute, (a) the Board of Directors is expressly authorized to adopt, amend or repeal the by-laws of the corporation in any manner not inconsistent with the laws of the State of Delaware or the certificate of incorporation of the corporation, subject to the power of the stockholders to adopt, amend or repeal the by-laws or to limit or restrict the power of the Board of Directors to adopt, amend or repeal the by-laws, and (b) the corporation may in its by-laws confer powers and authorities upon its Board of Directors in addition to those conferred upon it by statute. EIGHTH: Election of directors need not be by ballot unless the by-laws of the corporation shall so provide. NINTH: (a) A director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. (b) The Corporation shall indemnify any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, to the fullest extent permitted by applicable law. The determination as to whether such person has met the standard required for indemnification shall be made in accordance with applicable law. Expenses incurred by such a director, officer, employee or agent in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article NINTH. (c) The provisions of this Article NINTH shall be deemed to be a contract between the corporation and each person who serves as such director, officer, employee or agent of the corporation in any capacity at any time while this Article NINTH is in effect. No repeal or modification of the foregoing provisions of this Article NINTH nor, to the fullest extent permitted by law, any modification of law shall adversely affect any right or protection of a director, officer, employee or agent of the corporation existing at the time of such repeal or modification. The foregoing indemnification shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any applicable law, by-law, agreement, vote of stockholders or disinterested directors or otherwise. TENTH: The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. EX-4.4 3 Exhibit 4.4 CERTIFICATE OF DESIGNATIONS OF STEP-UP CONVERTIBLE PREFERRED STOCK (Par Value $0.10 Per Share) OF FREEPORT-McMoRan COPPER & GOLD INC. Pursuant to Section 151(g) of the General Corporation Law of the State of Delaware We, the undersigned, being a Vice President and the Secretary, respectively, of Freeport-McMoRan Copper & Gold Inc. (hereinafter called the "Corporation"), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware, DO HEREBY CERTIFY: FIRST. The Certificate of Incorporation of the Corporation, as amended (hereinafter called the "Certificate of Incorporation"), authorizes the issuance of 2,000,000 shares of Preferred Stock, par value $0.10 per share, of which no shares are currently issued. The Board of Directors of the Corporation is authorized by the Certificate of Incorporation to provide, without further stockholder action, for the issuance of any or all of the shares of the Preferred Stock in one or more series, with such designation, powers, preferences and relative, participating, optional or other rights, and any qualifications, limitations or restrictions thereof, as may be determined by the Board of Directors of the Corporation with respect to each particular series prior to the issue thereof. SECOND. The Board of Directors of the Corporation, acting by Unanimous Written Consent dated June 24, 1993, and a Special Committee thereof, pursuant to authority specifically granted to it by such Board of Directors, acting by Unanimous Written Consent dated June 29, 1993, duly adopted the following resolutions authorizing the creation and issuance of a series of Preferred Stock to be known as "Step-up Convertible Preferred Stock." RESOLVED, that the Board of Directors, pursuant to authority vested in it by the provisions of the Certificate of Incorporation of the Corporation, hereby authorizes the issuance of a series of Preferred Stock of the Corporation and hereby fixes the number, designation, preferences, rights and any qualifications, limitations or restrictions thereof as follows: 1. Designation. (a) 700,000 shares of Preferred Stock of the Corporation are hereby constituted as a series of Preferred Stock designated as "Step-Up Convertible Preferred Stock" (hereinafter called "this Series"). Each share of this Series shall be identical in all respects with the other shares of this Series except as to the dates from and after which dividends thereon shall be cumulative. The Board of Directors is authorized to increase or decrease (but not below the number of shares of this Series then outstanding) the number of shares of this Series. (b) Shares of this Series which have been converted into Class A Common Stock of the Corporation ("Class A Common Stock"), redeemed for cash, Class A Common Stock or a combination thereof, or purchased by the Corporation shall be cancelled, and shall revert to authorized but unissued shares of Preferred Stock undesignated as to series, and may be reissued as a part of this Series or may be reclassified and reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, all subject to the conditions or restrictions on issuance set forth in any resolution or resolutions adopted by the Board of Directors providing for the issue of such series of Preferred Stock. 2. Dividends. (a) The holders of shares of this Series shall be entitled to receive, but only out of funds legally available therefor, cash dividends as hereinafter provided. Such dividends shall be paid when, as and if declared by the Board of Directors on the first day of February, May, August and November in each year commencing November 1, 1993 (each such date being referred to herein as a "Dividend Payment Date") to holders of record on the record date determined by the Board of Directors in advance of the payment of each particular dividend. Such dividends shall be cumulative from the date of original issuance of the shares of this Series. (b) So long as any shares of this Series shall be outstanding, the Corporation shall not, unless full cumulative dividends for all past dividend periods shall have been paid or declared and set apart for payment upon all outstanding shares of this Series and the shares of any other class or series of Preferred Stock, the 7% Convertible Exchangeable Special Preference Stock (hereinafter called the "Special Preference Stock"), and any other class or series of stock of the Corporation ranking, as to dividends, on a parity with shares of this Series (the shares of any other class or series of Preferred Stock, the Special Preference Stock and any other class or series of stock of the Corporation ranking, as to dividends, on a parity with shares of this Series being herein referred to as "Parity Dividend Stock"), (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, the Class A Common Stock, Class B Common Stock of the Corporation ("Class B Common Stock") or any other stock of the Corporation ranking junior to this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation (the Class A Common Stock, the Class B Common Stock and any such other stock being herein referred to as "Junior Stock"), other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, or (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock. (c) If the funds available for the payment of dividends are insufficient to pay in full the dividends payable on all outstanding shares of this Series and shares of Parity Dividend Stock, the total available funds to be paid in partial dividends on the shares of this Series and shares of Parity Dividend Stock shall be divided among this Series and the Parity Dividend Stock in proportion to the aggregate amounts of dividends accrued and unpaid with respect to this Series and the Parity Dividend Stock. Accruals of dividends shall not bear interest. 3. Dividend Rate. The Dividend Rate on the shares of this Series for the period from the date of original issue thereof to and including August 1, 1996, shall be $25.00 per annum per share and for each Dividend Period thereafter shall be $35.00 per annum per share. Dividends in respect of the first Dividend Period shall accrue from the date of original issuance. The term "Dividend Period", as used herein, means (i), with respect to the November 1, 1993 Dividend Payment Date, the period from the date of original issuance of shares of this Series to and including such Dividend Payment Date, and (ii), with respect to any other Dividend Payment Date, the period commencing on the day following the immediately preceding Dividend Payment Date to and including such Dividend Payment Date. 4. Redemption. (a) The shares of this Series shall not be redeemable prior to August 1, 1996. On and after that date, the Corporation may, at its option, redeem the shares of this Series, in whole or in part, at any time or from time to time, as set forth herein, subject to the provisions described below. (b)(i) The shares of this Series may be redeemed for Class A Common Stock, at the option of the Corporation, at any time on or after August 1, 1996 and prior to August 1, 1999 only if, for 20 Trading Days within any period of 30 consecutive Trading Days, including the last Trading Day of such period, the Current Market Price of the Class A Common Stock on each of such 20 Trading Days exceeds 125% of the Conversion Price in effect on such Trading Day. In order to exercise this redemption option, the Corporation must issue a press release announcing the redemption (the "Press Release") prior to the opening of business on the third Trading Day after the condition in the preceding sentence has been met but in no event prior to August 1, 1996. The Press Release shall announce the redemption and set forth the number of shares of this Series which the Corporation intends to redeem. The Corporation may redeem shares of this Series pursuant to this Section 4(b) only if the Class A Common Stock is listed or admitted to trading on a national or regional securities exchange in the United States or reported by the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). (ii) Upon redemption of shares of this Series by the Corporation in accordance with Section 4(b)(i) hereof on the date specified in the notice to holders required under Section 4(b)(iii) hereof (the "Redemption Date"), each share of this Series so redeemed shall be redeemed for a number of shares of Class A Common Stock equal to $500.00 divided by the Conversion Price as of the opening of business on the Redemption Date. The Redemption Date shall be selected by the Corporation, shall be specified in the notice of redemption and shall be not less than 15 days or more than 60 days after the date on which the Corporation issues the Press Release. Upon any redemption of this Series for Common Stock pursuant to this Section 4(b), the Corporation shall pay any accrued and unpaid dividends for any Dividend Period ending on or prior to the Redemption Date. If a Redemption Date falls after a dividend payment record date and prior to the corresponding Dividend Payment Date, then each holder of shares of this Series at the close of business on such dividend payment record date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares before such Dividend Payment Date. In the case of any Redemption Date occurring prior to the record date for the November 1, 1996 Dividend Payment Date, the holders of the shares of this Series to be redeemed on such Redemption Date shall be entitled to any accrued and unpaid dividends through August 1, 1996 but not thereafter. Except as provided above, the Corporation shall make no payment or allowance for unpaid dividends, whether or not in arrears, on shares of this Series called for redemption under this Section 4(b) for Class A Common Stock or on the shares of Class A Common Stock issued upon such redemption. (iii) If the Corporation elects to redeem shares of this Series pursuant to Section 4(b)(i) hereof, notice of such redemption shall be given not more than four Business Days after the date on which the Corporation issues the Press Release, to each holder of record of the shares to be redeemed. Such notice shall be provided by first class mail, postage prepaid, at such holder's address as the same appears on the stock records of the Corporation, and shall state, as appropriate: (1) the Redemption Date; (2) the number of shares of this Series (expressed in one-twentieths of a share of this Series) to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares (expressed in one-twentieths of a share of this Series) to be redeemed from such holder; (3) the number of shares of Class A Common Stock to be issued with respect to each one-twentieth of a share of this Series; (4) the place or places at which certificates for such shares are to be surrendered for certificates representing shares of Class A Common Stock; and (5) the date on which dividends on the shares to be redeemed shall cease to accrue as provided herein. Failure to mail such notice, or any defect therein or in the mailing thereof, to any particular holder shall not affect the validity of the proceeding for the redemption of any shares so to be redeemed from any other holder. At the close of business on the Redemption Date, each holder of shares of this Series to be redeemed (unless the Corporation defaults in the delivery of the shares of Class A Common Stock or cash payable on such Redemption Date) shall be deemed to be the record holder of the number of shares of Class A Common Stock into which such shares of this Series are to be redeemed, regardless of whether such holder has surrendered the certificates representing such holder's shares of this Series that have been redeemed. As promptly as practicable after the surrender in accordance with said notice of the certificates for any such shares so redeemed (properly endorsed or assigned for transfer, if the Corporation shall so require and the notice shall so state), such shares shall be exchanged for certificates of shares of Class A Common Stock and any cash (without interest thereon) for which such shares have been redeemed. (c)(i) At any time on or after August 1, 1999, the shares of this Series may be redeemed, in whole or in part, at the option of the Corporation at a redemption price of $500.00 per share, plus an amount equal to all accrued and unpaid dividends to and including the date fixed for redemption. The Corporation may, except as provided below, pay the redemption price in cash, Class A Common Stock or any combination thereof; provided that the Corporation may elect to pay the redemption price in whole or in part in Class A Common Stock only if the Class A Common Stock is listed or admitted to trading on a national or regional securities exchange in the United States or reported by NASDAQ; and provided, further that any accrued and unpaid dividends must be paid in cash. (ii) At least 15 days but not more than 60 days prior to the date fixed for the redemption of the shares of this Series in accordance with Section 4(c)(i) hereof (the "Call Date"), a written notice will be mailed to each holder of record (and each beneficial owner to the extent required by law) of shares of this Series to be redeemed, notifying such holder of the Corporation's election to redeem such shares, stating the Call Date, stating the Corporation's election with respect to whether the payment of the redemption price is to be made in cash, Class A Common Stock or a combination thereof, and calling upon such holder to surrender to the Corporation on the Call Date at the place designated in such notice the certificate or certificates representing the number of shares specified therein. On or after the Call Date, each holder of shares of this Series to be redeemed must present and surrender his certificate or certificates for such shares to the Corporation at the place designated in such notice and thereupon the redemption price of such shares, in the manner elected by the Corporation, will be paid and/or delivered to or on the order of the person whose name appears on such certificate or certificates as the owner thereof and each surrendered certificate will be canceled. Except as provided in Section 4(c)(iv) hereof, the Corporation may not change the form of consideration (or components or percentages of components thereof) to be paid by the Corporation in respect of such redemption once the Corporation has given, or caused to be given, the applicable redemption notice. At the close of business on the Redemption Date, each holder of shares of this Series to be redeemed (unless the Corporation defaults in the delivery of the shares of Class A Common Stock or cash payable on such Redemption Date) shall be deemed to be the record holder of the number of shares of Class A Common Stock into which such shares of this Series are to be redeemed, regardless of whether such holder has surrendered the certificates representing such holder's shares of this Series that have been redeemed, dividends on the shares of this Series so redeemed shall cease to accrue, such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as holders of shares of this Series shall cease and terminate. (iii) If the Corporation elects to pay the redemption price by the delivery of Class A Common Stock, in whole or in part, the number of shares to be delivered in respect of the specified percentage of the redemption price to be paid in Class A Common Stock shall be equal to the dollar amount of such specified percentage of the redemption price divided by the Market Price of a share of Class A Common Stock. (iv) If the Market Price of the Class A Common Stock is less than 90 per cent of the Weighted Average Price of the Class A Common Stock over the five Trading Days immediately prior to the date of the notice of redemption provided for in Section 4(c)(ii), the Corporation, at its option, may elect to pay the entire redemption price on such Call Date in cash, rather than in whole or in part with the shares of Class A Common Stock specified in the notice of redemption; provided that, if the Corporation so elects to pay the entire redemption price in cash, the payment thereof shall be deferred until as of the tenth Business Day following publication of the notice of such election (the "Adjourned Call Date"), and in such event the Corporation shall pay, in addition to the redemption price, all accrued and unpaid dividends on the shares of this Series to be redeemed through the Adjourned Call Date. Upon determination of the actual number of shares of Class A Common Stock issuable in accordance with the foregoing provisions, the Corporation will publish such determination (and, if it is entitled to and so elects, notification of any exercise of the election provided for in the preceding sentence, of the Adjourned Call Date) promptly in The Wall Street Journal or another daily newspaper of national circulation. (d) No fractional shares or scrip representing fractions of shares of Class A Common Stock shall be issued upon redemption of this Series. Instead of any fractional interest in a share of Class A Common Stock that would otherwise be deliverable upon the redemption of a share of this Series, the Corporation shall pay to the holder of such share an amount in cash (computed to the nearest cent) based upon the Market Price of Class A Common Stock. If more than one share shall be surrendered for redemption at one time by the same holder, the number of full shares of Class A Common Stock issuable upon redemption thereof shall be computed on the basis of the aggregate number of shares of this Series so surrendered. (e) The Corporation covenants that any shares of Class A Common Stock issued upon redemption of this Series shall be duly and validly issued, fully paid and non- assessable, shall be issued from its authorized but unissued shares and, except as provided in Section 9 hereof, will be free from all taxes, liens and charges with respect to the issue thereof. The Corporation shall endeavor to list the shares of Class A Common Stock required to be delivered upon redemption of this Series, prior to such redemption, upon each national securities exchange, if any, upon which the outstanding Class A Common Stock is listed at the time of such delivery. The Corporation shall endeavor to take any action necessary to ensure that any shares of Class A Common Stock issued upon the redemption of this Series are freely transferable and not subject to any resale restrictions under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities or blue sky laws. (f) If less than all the outstanding shares of this Series are to be redeemed, the number of shares of this Series to be redeemed and the method of effecting such redemption, whether by lot or pro rata, shall be as determined by the Board of Directors. (g) At any time after a notice of redemption has been given in the manner prescribed herein with respect to a redemption in which the Corporation has elected to pay the redemption price in whole in cash, and prior to the date fixed for redemption, the Corporation may deposit in trust, with a bank or trust company identified in the notice of redemption having capital, surplus and undistributed profits aggregating at least $50,000,000, an aggregate amount of funds sufficient for such redemption (including dividends accrued on the shares of this Series called for redemption to the date fixed for redemption) for immediate payment in the appropriate amounts upon surrender of certificates for such shares. Any interest accrued on such funds shall be paid to the Corporation from time to time. Such deposit in trust shall be irrevocable, except that any funds deposited by the Corporation which shall not be required for the redemption for which they were deposited because of the exercise of rights of conversion subsequent to the date of deposit shall be returned to the Corporation forthwith, and any funds deposited by the Corporation which are unclaimed at the end of two years from the date fixed for such redemption shall be paid over to the Corporation upon its request, and upon such repayment the holders of the shares so called for redemption shall look only to the Corporation for payment of the appropriate amount. (h) From and after the date of the deposit of trust funds for the redemption of shares of this Series in accordance with the provisions of Section 4(g) hereof or, if no such deposit is made, from and after the date fixed for redemption (unless the Corporation shall default in making payment of the amount payable upon such redemption), whether or not certificates for shares so called for redemption have been surrendered by the holders thereof as described below, dividends on the shares of this Series so called for redemption shall cease to accrue, and such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the amount payable upon such redemption and, up to the close of business on the date fixed for such redemption, the right to convert such shares as set forth in Section 7 hereof) shall cease and terminate. Upon surrender in accordance with the notice of redemption of the certificates for any shares of this Series so redeemed (properly endorsed or assigned for transfer if the Corporation shall so require and the notice shall so state), the holder thereof shall be entitled to receive payment of the redemption price plus an amount equal to all accrued and unpaid dividends as aforesaid. If less than all of the shares represented by any such surrendered certificate are redeemed, the Corporation shall execute and deliver to the holder thereof, or to his written order, a certificate or certificates representing the unredeemed shares. (i) In no event shall the Corporation redeem less than all the outstanding shares of this Series and shares of any other series of stock of the Corporation ranking, as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation, on a parity with the shares of this Series ("Parity Stock") pursuant to this Section 4 unless full cumulative dividends for all past dividend periods shall have been paid or declared and set apart for payment upon all outstanding shares of this Series and the shares of such Parity Stock. (j) In connection with any redemption of shares of this Series solely for cash, the Corporation may enter into an agreement with one or more investment bankers or other purchasers for the purchase of the shares to be redeemed from the holders thereof and the conversion of such purchased shares into shares of Class A Common Stock as provided in Section 7 hereof. Such agreement shall provide that the amount to be paid by such purchasers to the holders of the shares of this Series to be redeemed shall not be less than the redemption price for such shares together with all accrued and unpaid dividends thereon to and including the date fixed for redemption and may provide further that such amount be deposited in trust, on or before the close of business on the date fixed for redemption, with a bank or trust company designated by the Corporation meeting the requirements set forth in Section 4(g) hereof. Notwithstanding anything to the contrary contained in this Section, the obligation of the Corporation to pay the redemption price of the shares of this Series to be redeemed, together with accrued and unpaid dividends thereon to the date fixed for redemption, shall be deemed to be satisfied and discharged to the extent such amount is so paid by such purchasers. If such an agreement is entered into, any shares of this Series to be redeemed that have not been duly surrendered for conversion by the holders thereof may, at the option of the Corporation, be deemed, to the fullest extent permitted by law, acquired by such purchasers from such holders and (notwithstanding anything to the contrary contained in this Section 4(j) or in Section 7 hereof) surrendered by such purchasers for conversion, all as of immediately prior to the close of business on the date fixed for redemption, subject to payment of the above amount as aforesaid. (k) Definitions. For purposes of this Section 4, the following terms shall have the meanings indicated: (i) "Accrued and unpaid dividends" in respect of any share of this Series shall mean an amount computed at the Dividend Rate for this Series from the date on which dividends on such share became cumulative to and including the date to which such dividends are to be accrued, less the aggregate amount of all dividends theretofore paid thereon. The amount accrued subsequent to the most recent Dividend Period shall be computed by dividing the quarterly dividend payment by the actual number of days in the uncompleted quarter, and thereafter multiplying this figure by the number of days in such quarter up to and including the date to which dividends are to be accrued. (ii) "Business Day" shall mean any day other than a Saturday or Sunday or a day on which state or federally chartered banking institutions in New York, New York are not required to be open. (iii) "Conversion Price" shall have the meaning set forth in, and shall be subject to adjustment from time to time as provided in, Section 7(d) hereof. (iv) "Current Market Price" in respect of the Class A Common Stock means the last reported sales price, regular way, on such day, or, if no sale takes place on such day, the average of the reported closing bid and asked prices on such day, regular way, in either case as reported in the composite transactions for the New York Stock Exchange or, if such security is not listed or admitted for trading on the New York Stock Exchange, on the principal national or regional securities exchange in the United States on which the Class A Common Stock is listed or admitted to trading, or if the Class A Common Stock is not listed or admitted to trading on a national or regional securities exchange in the United States, on the National Market System of NASDAQ or, if the Class A Common Stock is not quoted on such National Market System, the average of the closing bid and asked prices on such day in the over-the-counter market as reported by NASDAQ, or if bid and asked prices for such security on such day shall not have been reported through NASDAQ or by the National Quotation Bureau Incorporated, the average of the bid and asked prices on such day as furnished by any New York Stock Exchange member firm regularly making a market in such security selected for such purpose by the Board of Directors of the Corporation. (v) "Market Price" means the Weighted Average Price of a share of Class A Common Stock over the five Trading Day period ending on the third Business Day prior to the applicable Redemption Date or Call Date (or, if such third Business Day is not a Trading Day, on the last Trading Day prior to such Business Day), appropriately adjusted to take into account the occurrence, during the period commencing on the first of such Trading Days and ending on such Redemption Date or Call Date, of any event described in Section 7(d) hereof. (vi) "Trading Day" shall mean any day on which the securities in question are traded on the New York Stock Exchange, or if such securities are not listed or admitted for trading on the New York Stock Exchange, on the principal national or regional securities exchange on which such securities are listed or admitted, or if not listed or admitted for trading on any national or regional securities exchange, on the National Market System of NASDAQ, or if such securities are not quoted on such National Market System, in the applicable securities market in which the securities are traded. (vii) "Weighted Average Price" of a share of Class A Common Stock on any Trading Day or over any period of Trading Days means the weighted average per share sale price for all sales of shares of Class A Common Stock on such Trading Day or during such period, as the case may be (or, if the information necessary to calculate such weighted average per share sale price is not reported, the average of the high and low sale prices or, if no sales prices are reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and average ask prices) as reported in the composite transactions for the New York Stock Exchange, or if the Class A Common Stock is not listed or admitted to trading on such Exchange, as reported in the composite transactions for the principal national or regional securities exchange in the United States on which the Class A Common Stock is listed or admitted to trading, or if the Class A Common Stock is not listed or admitted to trading on a United States national or regional securities exchange, as reported by NASDAQ or by the National Quotation Bureau Incorporated; provided that, in the absence of such quotations, the Corporation shall be entitled to determine the Weighted Average Price on the basis of such quotations as it considers appropriate. 5. Voting Rights. (a) Except for the voting rights described below and except as otherwise provided by law, the holders of shares of this Series shall not be entitled to vote on any matter or to receive notice of, or to participate in, any meeting of the stockholders of the Corporation. Each share of Preferred Stock of this Series will be entitled to one vote on matters which holders of such series are entitled to vote. (b) Whenever dividends payable on shares of this Series shall be in default in an aggregate amount equal to or exceeding six full quarterly dividends on all shares of this Series at the time outstanding, the number of directors then constituting the Board of Directors of the Corporation shall be increased by two, and holders of shares of this Series shall, in addition to any other voting rights, have the right, voting separately as a class together with holders of all other series of stock of the Company ranking on a parity with such series of Preferred Stock either as to dividends or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been conferred and are exercisable (such other series of stock being herein referred to as "Other Voting Stock"), to elect such two additional directors. In such case, the Board of Directors will be increased by two directors, and the holders of Preferred Stock of such series (either alone or with the holders of Other Voting Stock) will have the exclusive right as members of such class, as described above, to elect two directors at the next annual meeting of stockholders. Whenever such right of the holders of shares of this Series shall have vested, such right may be exercised initially either at a special meeting of such holders as provided in Section 5(c) hereof or at any annual meeting of stockholders held for the purpose of electing directors, and thereafter at such annual meetings. The right of the holders of shares of this Series to vote together as a class with the holders of shares of any Other Voting Stock shall continue until such time as all dividends accrued on outstanding shares of this Series to the Dividend Payment Date next preceding the date of any such determination shall have been paid in full, or declared and set apart in trust for payment, at which time the right of the holders of shares of this Series so to vote shall terminate, except as herein or by law expressly provided, subject to revesting upon the occurrence of a subsequent default of the character mentioned above. (c) At any time when the right of the holders of shares of this Series to elect directors as provided in Section 5(b) hereof shall have vested, and if such right shall not already have been initially exercised, a proper officer of the Corporation, upon the written request of the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding, addressed to the Secretary of the Corporation, shall call a special meeting of the holders of shares of this Series and of such Other Voting Stock for the purpose of electing directors. Such meeting shall be held at the earliest practicable date upon the same form of notice as is required for annual meetings of stockholders at the place for the holding of annual meetings of stockholders of the Corporation (or such other suitable place as is designated by such officer). If such meeting shall not be called by a proper officer of the Corporation within 20 days after personal service of such written request upon the Secretary of the Corporation, or within 20 days after mailing the same within the United States of America, addressed to the Secretary of the Corporation at its principal office (such mailing to be evidenced by the registry receipt issued by the postal authorities), then the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding may designate in writing one of their number to call such a meeting at the expense of the Corporation, and such meeting may be called by such person so designated upon the same form of notice as is required for annual meetings of stockholders and shall be held at the place for the holding of annual meetings of stockholders of the Corporation (or such other suitable place as is designated by such person). Any holder of shares of this Series so designated shall have access to the registry books of the Corporation for the purpose of causing a meeting of stockholders to be called pursuant to this subsection (c). Notwithstanding anything to the contrary contained in this subsection (c), no such special meeting shall be called during the period within 90 days immediately preceding the date fixed for the next annual meeting of stockholders of the Corporation. (d) At any meeting held for the purpose of electing directors at which holders of shares of this Series shall have the right, voting together as a class with holders of shares of any Other Voting Stock to elect directors as provided in Section 5(b) hereof, the presence, in person or by proxy, of the holders of 33 1/3% of the aggregate number of shares of this Series and shares of such Other Voting Stock at the time outstanding shall be required and be sufficient to constitute a quorum of such class for the election of directors pursuant to such Section 5(b). At any such meeting or adjournment thereof, (i) the absence of a quorum of the shares of this Series and shares of such Other Voting Stock shall not prevent the election of the directors to be elected otherwise than pursuant to Section 5(b) hereof and (ii) in the absence of a quorum, either of the shares of this Series and shares of such Other Voting Stock or of any other shares of stock of the Corporation, or both, a majority of the holders, present in person or by proxy, of the class or classes of stock which lack a quorum shall have the power to adjourn the meeting for the election of directors whom they are entitled to elect, from time to time without notice other than announcement at the meeting, until a quorum shall be present. (e) During any period when the holders of shares of this Series shall have the right to vote together as a class with the holders of shares of any Other Voting Stock for directors as provided in Section 5(b) hereof, (i) the directors so elected by such holders shall continue in office until their successors shall have been elected by such holders or until termination of the rights of such holders to vote as a class for directors and (ii) any vacancies in the Board of Directors shall be filled only by a majority (even if that be only a single director) of the remaining directors theretofore elected by the holders of the class or classes of stock which elected the director whose office shall have become vacant. Immediately upon termination of the right of holders of this Series and any Other Voting Stock to vote as a class for directors, (i) the term of office of the directors so elected shall terminate and (ii) the number of directors shall be such number as may be provided for in the by-laws of the Corporation irrespective of any increase pursuant to the provisions of Section 5(b) hereof. (f) In addition to any other vote required by law, the Corporation shall not (i) amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of the Certificate of Incorporation (including this Certificate of Designations) so as to materially and adversely affect any right, preference, privilege or voting power of this Series or (ii) create, authorize or issue any series or class of stock ranking prior, either as to payment of dividends or distributions of assets upon liquidation, dissolution or winding up, to this Series, without the affirmative vote or consent of the holders of at least two-thirds of the aggregate number of shares of this Series at the time outstanding, voting as a separate class; provided, that any increase in the total number of authorized shares of Class A Common Stock, Special Stock or Preferred Stock, or the creation, authorization or issuance of any series of stock ranking, as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation, on a parity with the shares of this Series will not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers and provided, further, that no class vote of the holders of shares of this Series shall be required if, at or prior to the time when the actions described in clause (i) or (ii) of this Section 5(f) shall become effective, provision is made in accordance with Section 4 hereof for the redemption of all shares of this Series at the time outstanding. 6. Preference upon Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and of dividends and liquidation preferences in respect of any other stock of the Corporation ranking senior to the shares of this Series as to such payments, the holders of shares of this Series shall be entitled to receive, out of the remaining net assets of the Corporation, the amount of $500.00 in cash for each share of this Series, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid on each such share up to the date fixed for distribution, before any distribution shall be made to or set apart for the holders of any Junior Stock. If, after payment or provision for payment of the debts and other liabilities of the Corporation and of dividends and liquidation preferences in respect of any other stock of the Corporation ranking senior to the shares of this Series as to such payments, the remaining net assets of the Corporation are not sufficient to pay to the holders of shares of this Series the full amount of their preference set forth above, then the remaining net assets of the Corporation shall be divided among and paid to the holders of shares of this Series, holders of shares of Special Preference Stock and holders of shares of any other stock of the Corporation on a parity with this Series as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation ratably per share in proportion to the full per share amounts to which they respectively are entitled. For purposes of this Section 6, a consolidation or merger of the Corporation with one or more other Corporations or the sale of all or substantially all of the assets of the Corporation shall not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation. Subject to the rights of the holders of shares of any series or class of stock ranking on a parity as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation, after payment shall have been made in full to the holders of this Series as provided in this Section 6, the holders of any Junior Stock shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and shares of this Series shall not be entitled to share therein. 7. Conversion Privilege. (a) Subject to and upon compliance with the provisions of this Section 7, at the option of the holder thereof, each share of this Series may, at any time (unless shares of this Series shall be called for redemption, then, with respect to shares of this Series so called, until and including, but, if the Corporation shall not default in making payment of the amount payable on such redemption, not after, the close of business on the date fixed for redemption), be converted into a number of fully paid and nonassessable shares of Class A Common Stock equal to the quotient obtained by dividing $500.00 by the Conversion Price (as hereinafter defined) in effect at the Date of Conversion (as hereinafter defined). (b) In order to exercise the conversion privilege, any holder of shares of this Series to be converted shall surrender such shares to the Corporation at any time during usual business hours at the place or places (including a place in the Borough of Manhattan, The City of New York) maintained for such purpose, accompanied by a fully executed written notice, in substantially the form set forth on the reverse of the certificate representing shares of this Series, that the holder elects to convert such shares. Such notice shall also state the name or names (with address) in which the certificate or certificates for shares of Class A Common Stock shall be issued. Shares of this Series surrendered for conversion shall (if so required by the Corporation) be properly endorsed or assigned for transfer by the holder or his attorney duly authorized in writing. The holders of shares of this Series at the close of business on any record date for the payment of dividends on such shares will be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion thereof or the Corporation's default in the payment of the dividend due on such Dividend Payment Date. Shares of this Series surrendered for conversion during the period from the close of business on any record date for the payment of dividends on such shares to the opening of business on the corresponding Dividend Payment Date (except shares called for redemption on a Redemption Date or Call Date during the period from such record date to and including the Dividend Payment Date) must be accompanied by payment of an amount equal to the dividend payable on such shares on such Dividend Payment Date. A holder of shares of this Series on a record date for the payment of dividends on such shares who converts such shares on a Dividend Payment Date will receive the dividend payable on such shares by the Corporation on such date, and the converting holder need not include a payment in the amount of any such dividend upon surrender of such shares for conversion. As promptly as practicable after the receipt of such notice and the surrender of such shares of this Series as aforesaid, the Corporation shall, subject to the provisions of Section 9 hereof, issue and deliver at such place or places referred to in this subsection (b) to such holder, or on his written order, a certificate or certificates for the number of full shares of Class A Common Stock issuable on such conversion of shares of this Series in accordance with the provisions of this Section, and cash, as provided in Section 7(c) hereof, in respect of any fraction of a share of Class A Common Stock otherwise issuable upon such conversion. Such conversion shall be deemed to have been effected immediately prior to the close of business on the date (herein called the "Date of Conversion") on which such notice shall have been received by the Corporation and such shares of this Series shall have been surrendered as aforesaid, and the person or persons in whose name or names any certificate or certificates for shares of Class A Common Stock shall be issuable upon such conversion shall be deemed to have become on the Date of Conversion the holder or holders of record of the shares of Class A Common Stock represented thereby; provided, that any such surrender on any date when the registry books of the Corporation shall be closed shall constitute the person or persons in whose name or names the certificate or certificates for such shares are to be issued as the record holder or holders thereof for all purposes at the opening of business on the next succeeding day on which such registry books are open, but such conversion shall nevertheless be at the Conversion Price in effect at the close of business on the date when such shares of this Series shall have been so surrendered with the conversion notice. In the case of conversion of a portion, but less than all, of the shares of this Series represented by a certificate surrendered for conversion, the Corporation shall execute, and deliver to the holder thereof, or on his written order, a certificate or certificates representing the shares of this Series which the holder has not elected to convert into shares of Class A Common Stock. No payment or adjustment shall be made for dividends accrued on the shares of this Series converted as provided in this Section or for dividends or distributions accrued on any Class A Common Stock. (c) No fractions of shares or scrip representing fractions of shares shall be issued upon conversion of shares of this Series. If more than one share of this Series shall be surrendered for conversion at one time by the same holder, the number of full shares of Class A Common Stock which shall be issuable upon conversion of such shares shall be computed on the basis of the aggregate number of shares of this Series surrendered for conversion. If any fraction of a share of Class A Common Stock would, except for the provisions of this Section 7(c), be issuable on the conversion of any shares of this Series, the Corporation shall make payment in lieu thereof in an amount of United States dollars equal to the value of such fraction computed on the basis of the closing price of the Class A Common Stock as reported on the Composite Tape for New York Stock Exchange - Listed Stocks (or if the Class A Common Stock is not listed or admitted to trading on such exchange on the Date of Conversion, then on the principal national or regional securities exchange on which the Class A Common Stock is then listed or admitted to trading, or, if not listed or admitted to trading on any national or regional securities exchange, then as reported by the National Association of Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is no longer reporting information) on the last Trading Day prior to the Date of Conversion or if no such sale takes place on such day, the last sale price for such day shall be the average of the closing bid and asked prices regular way on the New York Stock Exchange (or if the Class A Common Stock is not listed or admitted to trading on such exchange, on the principal national securities exchange on which the Class A Common Stock is then listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, the average of the highest bid and lowest asked prices as reported by the National Association of Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is no longer reporting information) (any such last sale price being herein referred to as the "Last Sale Price"). If on such Trading Day the Class A Common Stock is not quoted by any such organization, the fair value of such Class A Common Stock on such day, as determined by the Board of Directors, shall be used. For the purpose of this subsection (c), the term "Trading Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which securities are not traded on such exchange or in such market. (d) The Conversion Price per share of Class A Common Stock issuable upon conversion of shares of this Series (herein called the "Conversion Price") shall initially be $30.75. The Conversion Price shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall (1) pay a dividend or make a distribution in shares of Class A Common Stock, (2) subdivide its outstanding shares of Class A Common Stock into a greater number of shares or (3) combine its outstanding shares of Class A Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such action shall be adjusted so that the holder of any shares of this Series thereafter surrendered for conversion shall be entitled to receive the number of shares of Class A Common Stock which he would have owned or have been entitled to receive immediately following such action had such shares been converted immediately prior thereto. An adjustment made pursuant to this subsection (d)(i) shall become effective immediately, except as provided in subsection (d)(v) below, after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination. (ii) In case the Corporation shall issue rights, warrants or options to all holders of Class A Common Stock entitling them (for a period not exceeding 45 days from the date of such issuance) to subscribe for or purchase shares of Class A Common Stock at a price per share less than the Recent Market Price per share (as determined pursuant to subsection (d)(iv) below) of the Class A Common Stock on the record date mentioned below, the Conversion Price shall be adjusted to a price, computed to the nearest cent, so that the same shall equal the price determined by multiplying: (1) the Conversion Price in effect immediately prior to the date of issuance of such rights or warrants by a fraction, of which (2) the numerator shall be (A) the number of shares of Class A Common Stock outstanding on the date of issuance of such rights, warrants or options, immediately prior to such issuance, plus (B) the number of shares which the aggregate offering price of the total number of shares so offered for subscription or purchase would purchase at such Recent Market Price, (determined by multiplying such total number of shares by the exercise price of such rights, warrants or options and dividing the product so obtained by such Recent Market Price), and of which (3) the denominator shall be (A) the number of shares of Class A Common Stock outstanding on the date of issuance of such rights, warrants or options, immediately prior to such issuance, plus (B) the number of additional shares of Class A Common Stock which are so offered for subscription or purchase. Such adjustment shall become effective immediately, except as provided in subsection (d)(v) below, after the record date for the determination of holders entitled to receive such rights and warrants. (iii) In case the Corporation shall distribute to all or substantially all holders of Class A Common Stock evidences of indebtedness, equity securities (including equity interests in the Corporation's Subsidiaries (as hereinafter defined)) other than Class A Common Stock, or other assets (other than cash dividends paid out of earned surplus of the Corporation or, if there shall be no earned surplus, out of net profits for the fiscal year in which the dividend is made and/or the preceding fiscal year), or shall distribute to all or substantially all holders of Class A Common Stock rights or warrants to subscribe for securities (other than those referred to in subsection (d)(ii) above), then in each such case the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying: (1) the Conversion Price in effect immediately prior to the date of such distribution by a fraction, of which (2) the numerator shall be the Recent Market Price per share (as determined pursuant to subsection (d)(iv) below) of the Class A Common Stock on the record date mentioned below less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive evidence of such fair market value, and described in a resolution of the Board of Directors filed with the transfer agent for the shares of this Series) of the portion of the assets, evidences of indebtedness and equity securities so distributed or of such subscription rights or warrants applicable to one share of Class A Common Stock, and of which (3) the denominator shall be such Recent Market Price per share of the Class A Common Stock. Such adjustment shall become effective immediately, except as provided in subsection (d)(v) below, after the record date for the determination of stockholders entitled to receive such distribution. As used herein, the term "Subsidiary" means (i) any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the Board of Directors or other persons performing similar functions are at the time directly or indirectly owned by the Corporation or (ii) any partnership of which more than 50% of the partnership interests are owned by the Corporation or any Subsidiary. (iv) For purposes of any computation under subsections (d)(ii) and (d)(iii) above, the Recent Market Price per share of Class A Common Stock on any date shall be deemed to be the average of the Last Sale Prices of a share of Class A Common Stock for the five consecutive Trading Days selected by the Corporation commencing not more than 20 Trading Days before and ending not later than the earliest of the date in question and the date before the "ex" date with respect to the issuance or distribution requiring such computation. If on any such Trading Day the Class A Common Stock is not quoted by any organization referred to in the definition of Last Sale Price in Section 7(c), the fair value of the Class A Common Stock on such day, as determined by the Board of Directors, shall be used. For purposes of this paragraph, the term "'ex' date", when used with respect to any issuance or distribution, means the first date on which the Class A Common Stock trades regular way on the principal national securities exchange on which the Class A Common Stock is listed or admitted to trading (or, if not so listed or admitted, on NASDAQ or a similar organization if NASDAQ is no longer reporting trading information) without the right to receive such issuance or distribution. (v) In any case in which this subsection (d) shall require that an adjustment be made immediately following a record date, the Corporation may elect to defer the effectiveness of such adjustment (but in no event until a date later than the effective time of the event giving rise to such adjustment), in which case the Corporation shall, with respect to any shares of this Series converted after such record date and before such adjustment shall have become effective (1) defer paying any cash payment pursuant to Section 7(c) hereof or issuing to the holder of shares of this Series the number of shares of Class A Common Stock issuable upon conversion in excess of the number of shares of Class A Common Stock issuable thereupon only on the basis of the Conversion Price prior to adjustment and (2) not later than five business days after such adjustment shall have become effective, pay to such holder the appropriate cash payment pursuant to Section 7(c) hereof and issue to such holder the additional shares of Class A Common Stock issuable on such conversion. (vi) No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price; provided, that any adjustments which by reason of this subsection (d)(vi) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. (vii) Whenever the Conversion Price is adjusted as herein provided, the Corporation shall promptly (1) file with the transfer agent for the shares of this Series a certificate of an officer of the Corporation (an "Officers' Certificate") setting forth the Conversion Price after such adjustment and setting forth in reasonable detail the facts requiring such adjustment and the calculations on which the adjustment is based, which certificate shall be conclusive evidence of the correctness of such adjustment and (2) mail or cause to be mailed a notice of such adjustment to each holder of shares of this Series at his address as the same appears on the registry books of the Corporation. Notwithstanding anything in this Section 7 to the contrary, the Corporation shall be entitled to make such reductions in the Conversion Price, in addition to those required by this Section 7, as it in its discretion shall determine to be advisable in order that any stock dividend, subdivision or combination of shares, distribution of rights or warrants to purchase stock or securities, distribution of securities convertible into or exchangeable for stock, or distribution of assets (other than cash dividends) hereafter made by the Corporation to its stockholders shall not be taxable. (e) In case of any reclassification or change of outstanding shares of Class A Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any consolidation of the Corporation with, or merger of the Corporation into, any other Person, or any merger of another Person into the Corporation (other than a merger which does not result in any reclassification, change, conversion, exchange or cancellation of outstanding shares of Class A Common Stock) or any sale or transfer of all or substantially all of the assets of the Corporation, the Corporation, or the Person formed by such consolidation or resulting from such merger or which acquires such assets, as the case may be, shall make effective provision in the articles or certificate of incorporation, providing that the holder of each share of this Series then outstanding shall have the right thereafter to convert such share only into the kind and amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer, by a holder of the number of shares of Class A Common Stock into which such shares of this Series might have been converted immediately prior to such reclassification, change, consolidation, merger, sale or transfer, assuming such holder of Class A Common Stock of the Corporation (i) is not a Person with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation or to which such sale or transfer was made, as the case may be ("constituent Person"), or an Affiliate (as hereinafter defined) of a constituent Person and (ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer (provided that if the kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer is not the same for each share of Class A Common Stock of the Corporation held immediately prior to such reclassification, change, consolidation, merger, sale or transfer by others than a constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this subsection (e) the kind and amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, sale or transfer by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). Such articles or certificate of incorporation shall provide for adjustments which, for events subsequent to the effective date of such articles or certificate of incorporation, shall be as nearly equivalent as may be practicable to the adjustments provided for herein. The above provisions of this subsection (e) shall similarly apply to successive reclassifications, changes, consolidations, mergers, sales or transfers. For the purpose of this subsection (e), the term "Person" means any individual, Corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof, and the term "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of the definition of "Affiliate", the term "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. (f) The Corporation shall reserve, free from preemptive rights, out of its authorized but unissued shares, sufficient shares of Class A Common Stock to provide for the conversion of the shares of this Series from time to time outstanding as such shares of this Series are presented for conversion. (g) The Corporation covenants that all shares of Class A Common Stock which may be issued upon conversion of shares of this Series will upon issue be duly and validly issued, fully paid and nonassessable by the Corporation and except as provided in Section 9 hereof free from all taxes, liens and charges with respect to the issue thereof. 8. Notice of Certain Events. In case: (a) the Corporation shall declare a dividend (or any other distribution) payable to the holders of Class A Common Stock (otherwise than cash dividends paid out of the earned surplus of the Corporation or, if there shall be no earned surplus, out of net profits for the fiscal year in which the dividend is made and/or the preceding fiscal year, and dividends payable in Class A Common Stock); or (b) the Corporation shall authorize the granting to the holders of Class A Common Stock of rights to subscribe for or purchase any shares of stock of any class or of any other rights or warrants; or (c) the Corporation shall authorize any reclassification or change of the Class A Common Stock (other than a subdivision or combination of its outstanding shares of Class A Common Stock or a change in par value, or from par value to no par value, or from no par value to par value), or any consolidation, merger or share exchange to which the Corporation is a party and for which approval of any stockholders of the Corporation is required, or the sale or conveyance of all or substantially all the property or business of the Corporation; or (d) there shall be proposed any voluntary or involuntary dissolution, liquidation or winding-up of the Corporation; then, the Corporation shall cause to be filed at the place or places maintained for the purpose of conversion of shares of this Series as provided in Section 7(b) hereof, and shall cause to be mailed to each holder of shares of this Series, at his address as it shall appear on the registry books of the Corporation, as promptly as possible but in any event at least 20 days before the date hereinafter specified (or the earlier of the dates hereinafter specified, in the event that more than one date is specified), a notice stating the date on which (i) a record is expected to be taken for the purpose of such dividend, distribution, rights, or warrants, or if a record is not to be taken, the date as of which the holders of Class A Common Stock of record to be entitled to such dividend, distribution, rights, or warrants are to be determined, or (ii) such reclassification, change, consolidation, merger, share exchange, sale, transfer, conveyance, dissolution, liquidation or winding-up is expected to become effective and the date, if any is to be fixed, as of which it is expected that holders of Class A Common Stock of record shall be entitled to exchange their shares of Class A Common Stock for securities or other property deliverable upon such reclassification, change, consolidation, merger, share exchange, sale, transfer, conveyance, dissolution, liquidation or winding-up. 9. Taxes. The Corporation will pay any and all documentary, stamp or similar taxes payable to the United States of America or any political subdivision or taxing authority thereof or therein in respect of the issue or delivery of (a) certificates for shares of this Series on redemption of less than all of the shares represented by any certificate for such shares surrendered for redemption or (b) certificates for shares of Class A Common Stock on redemption or conversion of shares of this Series pursuant to Section 4 or Section 7 hereof; provided, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of certificates for shares of this Series or Class A Common Stock, as the case may be, in a name other than that of the holder of shares of this Series to be redeemed or converted and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid. The Corporation extends no protection with respect to any other taxes imposed in connection with such redemption or conversion of shares of this Series. 10. No Other Rights. The shares of this Series shall not have any relative, participating, optional or other special rights and powers other than as set forth herein and other than any which may be provided by law. IN WITNESS WHEREOF, Freeport-McMoRan Copper & Gold Inc. has caused its corporate seal to be hereunto affixed and this Certificate of Designations to be signed by its Vice President and Secretary as of this 6th day of July, 1993. FREEPORT-McMoRan COPPER & GOLD INC. By /s/ Stephen M. Jones Name: Stephen M. Jones Title: Vice President (CORPORATE SEAL) Attest: By /s/ Michael C. Kilanowski, Jr. Name: Michael C. Kilanowski, Jr. Title: Secretary EX-4.5 4 Exhibit 4.5 FREEPORT-McMoRan COPPER & GOLD INC. and MELLON SECURITIES TRUST COMPANY, As Depositary and HOLDERS OF DEPOSITARY RECEIPTS ____________ DEPOSIT AGREEMENT ____________ Dated as of July 1, 1993 __________________________________________________ TABLE OF CONTENTS Page Parties . . . . . . . . . . . . . . . . . . . . 1 Recitals . . . . . . . . . . . . . . . . . . . 1 ARTICLE I DEFINITIONS "Certificate of Designations" . . . . . . . . . 1 "Certificate of Incorporation" . . . . . . . . 1 "Common Stock" . . . . . . . . . . . . . . . . 2 "Company" . . . . . . . . . . . . . . . . . . . 2 "Corporate Office" . . . . . . . . . . . . . . 2 "Deposit Agreement" . . . . . . . . . . . . . . 2 "Depositary" . . . . . . . . . . . . . . . . . 2 "Depositary Share" . . . . . . . . . . . . . . 2 "Depositary's Agent" . . . . . . . . . . . . . 2 "New York Office" . . . . . . . . . . . . . . . 3 "Receipt" . . . . . . . . . . . . . . . . . . . 3 "record holder" . . . . . . . . . . . . . . . . 3 "Registrar" . . . . . . . . . . . . . . . . . . 3 "Securities Act" . . . . . . . . . . . . . . . 3 "Stock" . . . . . . . . . . . . . . . . . . . . 3 ARTICLE II FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER, REDEMPTION AND CONVERSION OF RECEIPTS SECTION 2.01 Form and Transfer of Receipts . 3 SECTION 2.02 Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof . . . . . . . 4 SECTION 2.03 Redemption and Conversion of Stock . . . . . . . . . . . 5 SECTION 2.04 Register of Transfer of Receipts 8 SECTION 2.05 Combination and Split-ups of Receipts . . . . . . . . . 8 SECTION 2.06 Absence of Withdrawal Rights . . 8 SECTION 2.07 Limitations on Execution and Delivery, Transfer, Split-up, Combination, Surrender and Exchange of Receipts and Withdrawal or Deposit of Stock 8 SECTION 2.08 Lost Receipts, etc. . . . . . . . 9 SECTION 2.09 Cancellation and Destruction of Surrendered Receipts . . . . . 10 ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY SECTION 3.01 Filing Proofs, Certificates and Other Information . . . . . . 10 SECTION 3.02 Payment of Taxes or Other Governmental Charges . . . . . 10 SECTION 3.03 Withholding . . . . . . . . . . 11 SECTION 3.04 Representations and Warranties as to Stock . . . . . . . . . 11 ARTICLE IV THE STOCK, NOTICES SECTION 4.01 Cash Distributions . . . . . . . 12 SECTION 4.02 Distributions Other Than Cash . 12 SECTION 4.03 Subscription Rights, Preferences or Privileges . . . . . . . . 13 SECTION 4.04 Notice of Dividends, Fixing of Record Date for Holders of Receipts . 14 SECTION 4.05 Voting Rights . . . . . . . . . 14 SECTION 4.06 Changes Affecting Stock and Reclassifications, Recapitalizations, etc. . . . 15 SECTION 4.07 Reports . . . . . . . . . . . . 15 SECTION 4.08 Lists of Receipt Holders . . . . 15 ARTICLE V THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY SECTION 5.01 Maintenance of Offices, Agencies, Transfer Books by the Depositary; the Registrar . . . . . . . . 15 SECTION 5.02 Prevention or Delay in Performance by the Depositary, the Depositary's Agents, the Registrar or the Company . . . . . . . . . . . 16 SECTION 5.03 Obligations of the Depositary, the Depositary's Agents, the Registrar and the Company . . . . . . . 17 SECTION 5.04 Resignation and Removal of the Depositary, Appointment of Successor Depositary . . . . . 19 SECTION 5.05 Corporate Notices and Reports . 20 SECTION 5.06 Deposit of Stock by the Company 20 SECTION 5.07 Indemnification by the Company . 20 SECTION 5.08 Fees, Charges and Expenses . . . 21 ARTICLE VI AMENDMENT AND TERMINATION SECTION 6.01 Amendment . . . . . . . . . . . 21 SECTION 6.02 Termination . . . . . . . . . . 21 ARTICLE VII MISCELLANEOUS SECTION 7.01 Counterparts . . . . . . . . . . 22 SECTION 7.02 Exclusive Benefits of Parties . 23 SECTION 7.03 Invalidity of Provisions . . . . 23 SECTION 7.04 Notices . . . . . . . . . . . . 23 SECTION 7.05 Depositary's Agents . . . . . . 24 SECTION 7.06 Holders of Receipts Are Parties 24 SECTION 7.07 Governing Law . . . . . . . . . 24 SECTION 7.08 Headings . . . . . . . . . . . . 24 TESTIMONIUM . . . . . . . . . . . . . . . . . . 25 SIGNATURES . . . . . . . . . . . . . . . . . . 25 EXHIBIT A . . . . . . . . . . . . . . . . . . . A-1 DEPOSIT AGREEMENT DEPOSIT AGREEMENT, dated as of July 1, 1993 among Freeport-McMoRan Copper & Gold Inc., a Delaware corporation, Mellon Securities Trust Company, a New York trust company, as Depositary, and all holders from time to time of Receipts issued hereunder. W I T N E S S E T H: WHEREAS, the Company desires to provide as hereinafter set forth in this Deposit Agreement, for the deposit of shares of the Stock with the Depositary, as agent for the beneficial owners of the Stock, for the purposes set forth in this Deposit Agreement and for the issuance hereunder of the Receipts evidencing Depositary Shares representing an interest in the Stock so deposited; and WHEREAS, the Receipts are to be substantially in the form annexed as Exhibit A to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement. NOW, THEREFORE, in consideration of the premises contained herein, it is agreed by and among the parties hereto as follows: ARTICLE I DEFINITIONS The following definitions shall apply to the respective terms (in the singular and plural forms of such terms) used in this Deposit Agreement and the Receipts: "Certificate of Designations" shall mean the Certificate of Designations establishing and setting forth the rights, preferences, privileges and limitations of the Stock. "Certificate of Incorporation" shall mean the Certificate of Incorporation, as amended and restated from time to time, of the Company. "Common Stock" shall mean the Company's Class A Common Stock, par value $0.10 per share. "Company" shall mean Freeport McMoRan Copper & Gold Inc., a Delaware corporation, and its successors. "Corporate Office" shall mean the office of the Depositary in Ridgefield Park, New Jersey at which at any particular time its business in respect of matters governed by this Deposit Agreement shall be administered, which at the date of this Deposit Agreement is located at 85 Challenger Road. "Deposit Agreement" shall mean this agreement, as the same may be amended, modified or supplemented from time to time. "Depositary" shall mean Mellon Securities Trust Company, as Depositary hereunder, and any successor as Depositary hereunder. "Depositary Share" shall mean the rights evidenced by the Receipts executed and delivered hereunder, including the interests in Stock granted to holders of Receipts pursuant to the terms and conditions of the Deposit Agreement. Each Depositary Share shall represent an interest in 0.05 shares of Stock deposited with the Depositary hereunder and the same proportionate interest in any and all other property received by the Depositary in respect of such share of Stock and held under this Deposit Agreement. Subject to the terms of this Deposit Agreement, each record holder of a Receipt evidencing a Depositary Share or Shares is entitled, proportionately, to all the rights, preferences and privileges of the Stock represented by such Depositary Share or Shares, including the dividend, conversion, exchange, voting and liquidation rights contained in the Certificate of Designations, and to the benefits of all obligations and duties of the Company in respect of the Stock under the Certificate of Designations and the Certificate of Incorporation. "Depositary's Agent" shall mean an agent appointed by the Depositary as provided, and for the purposes specified, in Section 7.05. "New York Office" shall mean the office maintained by the Depositary in the Borough of Manhattan, The City of New York, which at the date of this Deposit Agreement is located at 120 Broadway. "Receipt" shall mean a Depositary Receipt executed and delivered hereunder, in substantially the form of Exhibit A hereto, evidencing Depositary Share or Shares, as the same may be amended from time to time in accordance with the provisions hereof. "record holder" or "holder" as applied to a Receipt shall mean the person in whose name a Receipt is registered on the books maintained by or on behalf of the Depositary for such purpose. "Registrar" shall mean any bank or trust company appointed to register ownership and transfers of Receipts as herein provided. "Securities Act" shall mean the Securities Act of 1933, as amended. "Stock" shall mean shares of the Company's Step-Up Convertible Preferred Stock, par value $0.10 per share. ARTICLE II FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER, REDEMPTION AND CONVERSION OF RECEIPTS SECTION 2.01. Form and Transfer of Receipts. Receipts shall be engraved or printed or lithographed on steel-engraved borders and shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. Receipts shall be executed by the Depositary by the manual signature of a duly authorized officer of the Depositary; provided, however, that such signature may be a facsimile if a Registrar (other than the Depositary) shall have countersigned the Receipts by manual signature of a duly authorized officer of the Registrar. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it shall have been executed as provided in the preceding sentence. The Depositary shall record on its books each Receipt executed as provided above and delivered as hereinafter provided. Receipts bearing the facsimile signature of anyone who was at any time a duly authorized officer of the Depositary shall bind the Depositary, notwithstanding that such officer has ceased to hold such office prior to the delivery of such Receipts. Receipts may be issued in denominations of any number of whole Depositary Shares. All Receipts shall be dated the date of their execution. Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law or regulation or with the rules and regulations of any securities exchange upon which the Stock or the Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date of issuance of the Stock or otherwise. Title to any Receipt (and to the Depositary Shares evidenced by such Receipt) that is properly endorsed or accompanied by a properly executed instrument of transfer shall be transferable by delivery with the same effect as in the case of investment securities in general; provided, however, that the Depositary may, notwithstanding any notice to the contrary, treat the record holder thereof at such time as the absolute owner thereof for the purpose of determining the person entitled to distributions of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes. SECTION 2.02. Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof. Subject to the terms and conditions of this Deposit Agreement, the Company or any holder of Stock may deposit such Stock under this Deposit Agreement by delivery to the Depositary of a certificate or certificates for the Stock to be deposited, properly endorsed or accompanied, if required by the Depositary, by a properly executed instrument of transfer in form satisfactory to the Depositary, together with (i) all such certifications as may be required by the Depositary in accordance with the provisions of this Deposit Agreement and (ii) a written order of the Company or such holder, as the case may be, directing the Depositary to execute and deliver to or upon the written order of the person or persons stated in such order a Receipt or Receipts for the number of Depositary Shares representing such deposited Stock. Upon receipt by the Depositary of a certificate or certificates for Stock to be deposited hereunder, together with the other documents specified above, the Depositary shall, as soon as transfer and registration can be accomplished, present such certificate or certificates to the registrar and transfer agent of the Stock for transfer and registration in the name of the Depositary or its nominee of the Stock being deposited. Deposited Stock shall be held by the Depositary in an account to be established by the Depositary at the Corporate Office. Upon receipt by the Depositary of a certificate or certificates for Stock to be deposited hereunder, together with the other documents specified above, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver, to or upon the order of the person or persons named in the written order delivered to the Depositary referred to in the first paragraph of this Section 2.02, a Receipt or Receipts for the number of whole Depositary Shares representing the Stock so deposited and registered in such name or names as may be requested by such person or persons. The Depositary shall execute and deliver such Receipt or Receipts at the New York Office, except that, at the request, risk and expense of any person requesting such delivery and for the account of such person, such delivery may be made at such other place as may be designated by such person. In each case, delivery will be made only upon payment by such person to the Depositary of all taxes and other governmental charges and any fees payable in connection with such deposit and the transfer of the deposited Stock. The Company shall deliver to the Depositary from time to time such quantities of Receipts as the Depositary may request to enable the Depositary to perform its obligations under this Deposit Agreement. SECTION 2.03. Redemption and Conversion of Stock. Whenever the Company shall elect to redeem shares of Stock into shares of Common Stock in accordance with the Certificate of Designations, it shall (unless otherwise agreed in writing with the Depositary) give the Depositary in its capacity as Depositary not less than 5 business days' prior notice of the proposed date of the mailing of a notice of redemption of Stock and the simultaneous redemption of the Depositary Shares representing the Stock to be redeemed and of the number of such shares of Stock held by the Depositary to be redeemed. The Depositary shall, as directed by the Company in writing, mail, first class postage prepaid, notice of the redemption of Stock and the proposed simultaneous redemption of the Depositary Shares representing the Stock to be redeemed not less than 15 and not more than 60 days prior to the date fixed for redemption of such Stock and Depositary Shares, to the record holders of the Receipts evidencing the Depositary Shares to be so redeemed at the addresses of such holders as the same appear on the records of the Depositary. Notwithstanding the foregoing, neither failure to mail or publish any such notice to one or more such holders nor any defect in any notice shall affect the sufficiency of the proceedings for redemption. The Company shall provide the Depositary with such notice, and each such notice shall state: the redemption date; the number of Depositary Shares to be redeemed if fewer than all the Depositary Shares held by any holder are to be redeemed the number of such Depositary Shares held by such holder to be so redeemed; in the case of a call for redemption, the call price payable upon redemption (and the form of consideration, whether cash, securities or other consideration, on which the redemption call price will be paid); the place or places where Receipts evidencing Depositary Shares to be redeemed are to be surrendered for redemption; whether the Company is depositing with a bank or trust company on or before the redemption date, the cash payable by the Company and the proposed date of such deposit; the amount of accrued and unpaid dividends payable per share of Stock to be redeemed to and including such redemption and that dividends in respect of the Stock represented by the Depositary Shares to be redeemed will cease to accrue on such redemption date (unless the Company shall default in delivering cash or other consideration at the time and place specified in such notice). On the date of any such redemption the Depositary shall surrender the certificate or certificates held by the Depositary evidencing the number of shares of Stock to be redeemed in the manner specified in the notice of redemption of Stock provided by the Company pursuant to the Certificate of Designations. The Depositary shall, thereafter, redeem the number of Depositary Shares representing such redeemed Stock upon the surrender of Receipts evidencing such Depositary Shares in the manner provided in the notice sent to record holders of Receipts. In case fewer than all the outstanding Depositary Shares are to be redeemed, the Depositary Shares to be redeemed shall be selected by the Depositary by lot or on a pro rata basis at the direction of the Company. Notice having been mailed by the Depositary as aforesaid, from and after the redemption date (unless the Company shall have failed to redeem the shares of Stock to be redeemed by it upon the surrender of the certificate or certificates therefor by the Depositary as described in the preceding paragraph), the Depositary Shares called for redemption shall be deemed no longer to be outstanding and all rights of the holders of Receipts evidencing such Depositary Shares (except the right to receive the cash, securities or form of consideration payable upon redemption upon surrender of such Receipts) shall, to the extent of such Depositary Shares, cease and terminate. The foregoing shall be subject further to the terms and conditions of the Certificate of Designations. If fewer than all of the Depositary Shares evidenced by a Receipt are called for redemption, the Depositary will deliver to the holder of such Receipt upon its surrender to the Depositary, together with the redemption price (whether to be paid in the form of cash, shares of Common Stock or other form or forms of consideration) and all accrued and unpaid dividends to and including the date fixed for redemption payable in respect of the Depositary Shares called for redemption, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption. The Depositary shall not be required (a) to issue, transfer or exchange any Receipts for a period beginning at the opening of business 15 days next preceding any selection of Depositary Shares and Stock to be redeemed and ending at the close of business on the day of the mailing of notice of redemption of Depositary Shares or (b) to transfer or exchange for another Receipt any Receipt evidencing Depositary Shares called or being called for redemption, in whole or in part except as provided in the immediately preceding paragraph of this Section 2.03. Whenever a record holder of Receipts shall duly deliver, in person or by a duly authorized attorney, such Receipts (properly endorsed or assigned for transfer, as the Depositary shall require) to the Depositary at the New York Office, together with written notice of such record holder's election to convert the Depositary Shares evidenced by such Receipts into Common Stock (provided that any delivery of Receipts evidencing Depositary Shares that have been called for redemption may not occur after the close of business on the date fixed for redemption), the Depositary shall promptly notify the Company of such record holder's election and deliver to the Company certificates evidencing such Stock as are represented by the Depositary Shares evidenced by such Receipts delivered by such record holder for conversion. From and after the close of business on any business day on which a record holder duly delivers the foregoing documents to the Depositary, such Depositary Shares shall be deemed converted into Common Stock at a conversion rate to be communicated to the Depositary in writing, which conversion rate will be equal to 0.05 times the conversion rate for each share of Stock as set forth in the Certificate of Designations. From and after the conversion date (unless the Company shall have failed to convert the shares of Stock to be converted by it upon the surrender of the certificate or certificates therefor by the Depositary as described in the immediately preceding paragraph), the Depositary Shares subject to conversion shall be deemed no longer to be outstanding and all rights of the holders of Receipts evidencing such Depositary Shares (except the right to receive the cash, securities or shares of Common Stock payable upon conversion upon surrender of such Receipts) shall, to the extent of such Depositary Shares, cease and terminate. To the extent that Depositary Shares are converted into shares of Common Stock and all of such shares of Common Stock cannot be distributed to the record holders of Receipts converted without creating fractional interests in such shares, the Company may distribute, or cause to be distributed, cash to such holders in lieu of delivery of such fractional shares or, if the Company elects not to make or cause to be made such a distribution, the Depositary may, with the consent of the Company, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of such shares of Common Stock at such place or places and upon such terms as it may deem proper, and the net proceeds of any such sale shall, subject to Section 3.02, be distributed or made available for distribution to such record holders that would otherwise receive fractional interests in such shares of Common Stock. SECTION 2.04. Register of Transfer of Receipts. Subject to the terms and conditions of this Deposit Agreement, the Depositary shall register on its books from time to time transfers of Receipts upon any surrender thereof at the Corporate Office, the New York Office or such other office as the Depositary may designate for such purpose, by the record holder in person or by a duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer, together with evidence of the payment of any transfer taxes as may be required by law. Upon such surrender, the Depositary shall execute a new Receipt or Receipts and deliver the same to or upon the order of the person entitled thereto evidencing the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered. SECTION 2.05. Combination and Split-ups of Receipts. Upon surrender of a Receipt or Receipts at the Corporate Office, the New York Office or such other office as the Depositary may designate for the purpose of effecting a split-up or combination of Receipts, subject to the terms and conditions of this Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in the authorized denominations requested evidencing the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered; provided, however, that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share. SECTION 2.06. Absence of Withdrawal Rights. Holders of Depositary Receipts are not entitled to receive the shares of Stock or money and other property, if any, represented by the Depositary Shares evidenced by such Receipts. SECTION 2.07. Limitations on Execution and Delivery, Transfer, Split-up, Combination, Surrender and Exchange of Receipts and Withdrawal or Deposit of Stock. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, surrender or exchange of any Receipt, the delivery of any distribution thereon or the withdrawal or deposit of Stock, the Depositary, any of the Depositary's Agents or the Company may require any or all of the following: (i) payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to the Stock being deposited or withdrawn or with respect to the Common Stock or other securities or property of the Company being issued upon conversion or redemption); (ii) production of proof satisfactory to it as to the identity and genuineness of any signature; and (iii) compliance with such reasonable regulations, if any, as the Depositary or the Company may establish not inconsistent with the provisions of this Deposit Agreement. The deposit of Stock may be refused, the delivery of Receipts against Stock or the registration of transfer, split-up, combination, surrender or exchange of outstanding Receipts and the withdrawal of deposited Stock may be suspended (i) during any period when the register of stockholders of the Company is closed, (ii) if any such action is deemed necessary or advisable by the Depositary, any of the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of this Deposit Agreement, or (iii) with the approval of the Company, for any other reason. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any shares of Stock that are required to be registered under the Securities Act unless a registration statement under the Securities Act is in effect as to such shares of Stock. SECTION 2.08. Lost Receipts, etc. In case any Receipt shall be mutilated or destroyed or lost or stolen, the Depositary shall execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt or in lieu of and in substitution for such destroyed, lost or stolen Receipt unless the Depositary has notice that such Receipt has been acquired by a bona fide purchaser; provided, however, that the holder thereof provides the Depositary with (i) evidence satisfactory to the Depositary of such destruction, loss or theft of such Receipt, of the authenticity thereof and of his ownership thereof, (ii) reasonable indemnification satisfactory to the Depositary or the payment of any charges incurred by the Depositary in obtaining insurance in lieu of such indemnification and (iii) payment of any expense (including fees, charges and expenses of the Depositary) in connection with such execution and delivery. SECTION 2.09. Cancellation and Destruction of Surrendered Receipts. All Receipts surrendered to the Depositary or any Depositary's Agent shall be cancelled by the Depositary. Except as prohibited by applicable law or regulation, the Depositary is authorized to destroy such Receipts so cancelled. ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY SECTION 3.01. Filing Proofs, Certificates and Other Information. Any person presenting Stock for deposit or any holder of a Receipt may be required from time to time to file such proof of residence or other information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper. The Depositary or the Company may withhold or delay the delivery of any Receipt, the registration of transfer, redemption, conversion or exchange of any Receipt, the withdrawal of the Stock represented by the Depositary Shares evidenced by any Receipt or the distribution of any dividend or other distribution until such proof or other information is filed, such certificates are executed or such representations and warranties are made. SECTION 3.02. Payment of Taxes or Other Governmental Charges. If any tax or other governmental charge shall become payable by or on behalf of the Depositary with respect to (i) any Receipt, (ii) the Depositary Shares evidenced by such Receipt, (iii) the Stock (or fractional interest therein) or other property represented by such Depositary Shares, or (iv) any transaction referred to in Section 4.06, such tax (including transfer, issuance or acquisition taxes, if any) or governmental charge shall be payable by the holder of such Receipt, who shall pay the amount thereof to the Depositary. Until such payment is made, registration of transfer of any Receipt or any split-up or combination thereof or any withdrawal of the Stock or money or other property, if any, represented by the Depositary Shares evidenced by such Receipt may be refused, any dividend or other distribution may be withheld and any part or all of the Stock or other property (including Common Stock received in connection with a conversion or redemption of Stock) represented by the Depositary Shares evidenced by such Receipt may be sold for the account of the holder thereof (after attempting by reasonable means to notify such holder prior to such sale). Any dividend or other distribution so withheld and the proceeds of any such sale may be applied to any payment of such tax or other governmental charge, the holder of such Receipt remaining liable for any deficiency. SECTION 3.03. Withholding. The Depositary shall act as the tax withholding agent for any payments, distributions and exchanges made with respect to the Depositary Shares and Receipts, and the Stock, Common Stock or other securities or assets represented thereby (collectively, the "Securities"). The Depositary shall be responsible with respect to the Securities for the timely (i) collection and deposit of any required withholding or backup withholding tax, and (ii) filing of any information returns or other documents with federal (and other applicable) taxing authorities. SECTION 3.04. Representations and Warranties as to Stock. In the case of the initial deposit of the Stock, the Company and, in the case of subsequent deposits thereof, each person so depositing Stock under this Deposit Agreement shall be deemed thereby to represent and warrant that such Stock and each certificate therefor are valid and that the person making such deposit is duly authorized to do so. Such representations and warranties shall survive the deposit of the Stock and the issuance of Receipts therefor. ARTICLE IV THE STOCK, NOTICES SECTION 4.01. Cash Distributions. Whenever the Depositary shall receive any cash dividend or other cash distribution on the Stock, the Depositary shall, subject to Section 3.02, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.04 such amounts of such sum as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; provided, however, that in case the Company or the Depositary shall be required by law to withhold and does withhold from any cash dividend or other cash distribution in respect of the Stock an amount on account of taxes, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any owner of Depositary Shares a fraction of one cent and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next sum received by the Depositary for distribution to record holders of Receipts then outstanding. SECTION 4.02. Distributions Other Than Cash. Whenever the Depositary shall receive any distribution other than cash, rights, preferences or privileges upon the Stock, the Depositary shall, subject to Section 3.02, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.04 such amounts of the securities or property received by it as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders, in any manner that the Depositary and the Company may deem equitable and practicable for accomplishing such distribution. If, in the opinion of the Company after consultation with the Depositary, such distribution cannot be made proportionately among such record holders, or if for any other reason (including any tax withholding or securities law requirement), the Depositary deems, after consultation with the Company, such distribution not to be feasible, the Depositary may, with the approval of the Company which approval shall not be unreasonably withheld, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Section 3.02, be distributed or made available for distribution, as the case may be, by the Depositary to record holders of Receipts as provided by Section 4.01 in the case of a distribution received in cash. SECTION 4.03. Subscription Rights, Preferences or Privileges. If the Company shall at any time offer or cause to be offered to the persons in whose names Stock is registered on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance be made available by the Depositary to the record holders of Receipts in such manner as the Company shall instruct (including by the issue to such record holders of warrants representing such rights, preferences or privileges); provided, however, that (a) if at the time of issue or offer of any such rights, preferences or privileges the Company determines and instructs the Depositary that it is not lawful or feasible to make such rights, preferences or privileges available to some or all holders of Receipts (by the issue of warrants or otherwise) or (b) if and to the extent instructed by holders of Receipts who do not desire to exercise such rights, preferences or privileges, the Depositary shall then, in each case, and if applicable laws or the terms of such rights, preferences or privileges so permit, sell such rights, preferences or privileges of such holders at public or private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall be distributed by the Depositary to the record holders of Receipts entitled thereto as provided by Section 4.01 in the case of a distribution received in cash. If registration under the Securities Act of the securities to which any rights, preferences or privileges relate is required in order for holders of Receipts to be offered or sold such securities, the Company shall promptly file a registration statement pursuant to the Securities Act with respect to such rights, preferences or privileges and securities and use its best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Receipts any right, preference or privilege to subscribe for or to purchase any securities unless and until such registration statement shall have become effective or unless the offering and sale of such securities to such holders are exempt from registration under the provisions of the Securities Act. If any other action under the law of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to holders of Receipts, the Company agrees with the Depositary that the Company will use its reasonable best efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. SECTION 4.04. Notice of Dividends, Fixing of Record Date for Holders of Receipts. Whenever (i) any cash dividend or other cash distribution shall become payable, or any distribution other than cash shall be made, or any rights, preferences or privileges shall at any time be offered, with respect to the Stock, or (ii) the Depositary shall receive notice of any meeting at which holders of Stock are entitled to vote or of which holders of Stock are entitled to notice or of the mandatory conversion of, or any election on the part of the Company to call for the redemption or exchange of, any shares of Stock, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Stock) for the determination of the holders of Receipts (x) who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or (y) who shall be entitled to give instructions for the exercise of voting rights at any such meeting or to receive notice of such meeting or of such conversion, exchange or redemption. SECTION 4.05. Voting Rights. Upon receipt of notice of any meeting at which the holders of Stock are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the record holders of Receipts a notice, which shall be provided by the Company and which shall contain (i) such information as is contained in such notice of meeting, (ii) a statement that the holders of Receipts at the close of business on a specified record date fixed pursuant to Section 4.04 will be entitled, subject to any applicable provision of law, the Certificate of Incorporation or the Certificate of Designations, to instruct the Depositary as to the exercise of the voting rights pertaining to the Stock represented by their respective Depositary Shares and (iii) a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of a Receipt on such record date, the Depositary shall endeavor insofar as practicable to vote or cause to be voted the Stock represented by the Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Company hereby agrees to take all reasonable action that may be deemed necessary by the Depositary in order to enable the Depositary to vote such Stock or cause such Stock to be voted. In the absence of specific instructions from the holder of a Receipt, the Depositary will abstain from voting to the extent of the Stock represented by the Depositary Shares evidenced by such Receipt. SECTION 4.06. Changes Affecting Stock and Reclassifications, Recapitalizations, etc. Upon any split-up, consolidation or any other reclassification of Stock, or upon any recapitalization, reorganization, merger, amalgamation or consolidation affecting the Company or to which it is a party or sale of all or substantially all of the Company's assets, the Depositary shall treat any shares of stock or other securities or property (including cash) that shall be received by the Depositary in exchange for or upon conversion of or in respect of the Stock as new deposited property under this Deposit Agreement, and Receipts then outstanding shall thenceforth represent the proportionate interests of holders thereof in the new deposited property so received in exchange for or upon conversion or in respect of such Stock. In any such case the Depositary may, in its discretion, with the approval of the Company, execute and deliver additional Receipts, or may call for the surrender of all outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited property. SECTION 4.07. Reports. The Company or, at the option of the Company, the Depositary shall forward to the holders of Receipts any reports and communications received from the Company that are received by the Depositary as the holder of Stock. SECTION 4.08. Lists of Receipt Holders. Promptly upon request from time to time by the Company, the Depositary shall furnish to it a list, as of a recent date, of the names, addresses and holdings of Depositary Shares of all persons in whose names Receipts are registered on the books of the Depositary. At the expense of the Company, the Company shall have the right to inspect transfer and registration records of the Depositary, any Depositary's Agent or the Registrar, take copies thereof and require the Depositary, any Depositary's Agent or the Registrar to supply copies of such portions of such records as the Company may request. ARTICLE V THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY SECTION 5.01. Maintenance of Offices, Agencies, Transfer Books by the Depositary; the Registrar. Upon execution of this Deposit Agreement in accordance with its terms, the Depositary shall maintain (i) at the New York Office facilities for the execution and delivery, registration, registration of transfer, surrender and exchange, split-up, combination, redemption, exchange and conversion of Receipts and deposit and withdrawal of Stock and (ii) at the Corporate Office and at the offices of the Depositary's Agents, if any, facilities for the delivery, registration, registration of transfer, surrender and exchange, split-up, combination, conversion, exchange and redemption of Receipts and deposit and withdrawal of Stock, all in accordance with the provisions of this Deposit Agreement. The Depositary, acting as transfer agent and Registrar, shall keep books at the Corporate Office for the registration and transfer of Receipts, which books at all reasonable times shall be open for inspection by the record holders of Receipts; provided that any such holder requesting to exercise such right shall certify to the Depositary that such inspection shall be for a proper purpose reasonably related to such person's interest as an owner of Depositary Shares. The Depositary shall consult with the Company upon receipt of any request for inspection. The Depositary may close such books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder. If the Receipts or the Depositary Shares evidenced thereby or the Stock represented by such Depositary Shares shall be listed on one or more stock exchanges, the Depositary shall, with the approval of the Company, appoint a Registrar for registry of such Receipts or Depositary Shares in accordance with the requirements of such exchange or exchanges. Such Registrar (which may be the Depositary if so permitted by the requirements of such exchange or exchanges) may be removed and a substitute registrar appointed by the Depositary upon the request or with the approval of the Company. In addition, if the Receipts, such Depositary Shares or such Stock are listed on one or more stock exchanges, the Depositary will, at the request of the Company, arrange such facilities for the delivery, registration, registration of transfer, surrender and exchange, split-up, combination, redemption or conversion of such Receipts, such Depositary Shares or such Stock as may be required by law or applicable stock exchange regulations. SECTION 5.02. Prevention or Delay in Performance by the Depositary, the Depositary's Agents, the Registrar or the Company. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall incur any liability to any holder of any Receipt, if by reason of any provision of any present or future law or regulation thereunder of the United States of America or of any other governmental authority or, in the case of the Depositary, the Registrar or any Depositary's Agent, by reason of any provision, present or future, of the Certificate of Incorporation or the Certificate of Designations or, in the case of the Company, the Depositary, the Registrar or any Depositary's Agent, by reason of any act of God or war or other circumstances beyond the control of the relevant party, the Depositary, any Depositary's Agent, the Registrar or the Company shall be prevented or forbidden from doing or performing any act or thing that the terms of this Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent, the Registrar or the Company incur any liability to any holder of a Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing that the terms of this Deposit Agreement provide shall or may be done or performed, or (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement except, in the case of the Depositary, any Depositary's Agent or the Registrar, if any such exercise or failure to exercise discretion is caused by its negligence or bad faith. SECTION 5.03. Obligations of the Depositary, the Depositary's Agents, the Registrar and the Company. The Company assumes no obligation and shall be subject to no liability under this Deposit Agreement or the Receipts to holders or other persons, except to perform in good faith such obligations as are specifically set forth and undertaken by it to perform in this Deposit Agreement. Each of the Depositary, the Depositary's Agents and the Registrar assumes no obligation and shall be subject to no liability under this Deposit Agreement or the Receipts to holders or other persons, except to perform such obligations as are specifically set forth and undertaken by it to perform in this Deposit Agreement without negligence or bad faith. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding with respect to Stock, Depositary Shares, Receipts or Common Stock that in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall be liable for any action or any failure to act by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Stock for deposit, any holder of a Receipt or any other person believed by it in good faith to be competent to give such advice or information. The Depositary, any Depositary's Agent, the Registrar and the Company may each rely and shall each be protected in acting upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Depositary, the Registrar and any Depositary's Agent may own and deal in any class of securities of the Company and its affiliates and in Receipts or Depositary Shares. The Depositary may also act as transfer agent or registrar of any of the securities of the Company and its affiliates. It is intended that neither the Depositary nor any Depositary's Agent nor the Registrar shall be deemed to be an "issuer" of the Stock, the Depositary Shares, the Receipts or the Common Stock or other securities issued upon conversion, exchange or redemption of the Stock under the federal securities laws or applicable state securities laws, it being expressly understood and agreed that the Depositary and any Depositary's Agent and the Registrar are acting only in a ministerial capacity; provided, however, that the Depositary agrees to comply with all information reporting and withholding requirements applicable to it under law or this Deposit Agreement in its capacity as Depositary. Neither the Depositary (or its officers, directors, employees or agents) nor any Depositary's Agent nor the Registrar makes any representation or has any responsibility as to the validity of the Registration Statement pursuant to which the Depositary Shares are registered under the Securities Act, the Stock, the Depositary Shares or any instruments referred to therein or herein, or as to the correctness of any statement made therein or herein; provided, however, that the Depositary is responsible for its representations in this Deposit Agreement. The Depositary assumes no responsibility for the correctness of the description that appears in the Receipts, which can be taken as a statement of the Company summarizing certain provisions of this Deposit Agreement. Notwithstanding any other provision herein or in the Receipts, the Depositary makes no warranties or representations as to the validity, genuineness or sufficiency of any Stock at any time deposited with the Depositary hereunder or of the Depositary Shares, as to the validity or sufficiency of this Deposit Agreement, as to the value of the Depositary Shares or as to any right, title or interest of the record holders of Receipts in and to the Depositary Shares except that the Depositary hereby represents and warrants as follows: (i) the Depositary has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its incorporation, with full power, authority and legal right under such law to execute, deliver and carry out the terms of this Deposit Agreement; (ii) this Deposit Agreement has been duly authorized, executed and delivered by the Depositary; and (iii) this Deposit Agreement constitutes a valid and binding obligation of the Depositary, enforceable against the Depositary in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Depositary shall not be accountable for the use or application by the Company of the Depositary Shares or the Receipts or the proceeds thereof. SECTION 5.04. Resignation and Removal of the Depositary, Appointment of Successor Depositary. The Depositary may at any time resign as Depositary hereunder by written notice via registered mail of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. The Depositary may at any time be removed by the Company by written notice of such removal delivered to the Depositary, such removal to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall, within 60 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor depositary, which shall be a bank or trust company, or an affiliate of a bank or trust company, having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000. If a successor depositary shall not have been appointed in 60 days, the resigning or removed Depositary may petition a court of competent jurisdiction to appoint a successor depositary. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Company, shall promptly execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all rights, title and interest in the Stock and any moneys or property held hereunder to such successor and shall deliver to such successor a list of the record holders of all outstanding Receipts. Any successor depositary shall promptly mail notice of its appointment to the record holders of Receipts. Any corporation into or with which the Depositary may be merged, consolidated or converted shall be the successor of such Depositary without the execution or filing of any document or any further act. Such successor depositary may execute the Receipts either in the name of the predecessor depositary or in the name of the successor depositary. SECTION 5.05. Corporate Notices and Reports. The Company agrees that it will deliver to the Depositary, and the Depositary will, promptly after receipt thereof, transmit to the record holders of Receipts, in each case at the address recorded in the Depositary's books, copies of all notices and reports (including financial statements) required by law, by the rules of any national securities exchange upon which the Stock, the Depositary Shares or the Receipts are listed or by the Certificate of Incorporation and the Certificate of Designations to be furnished by the Company to holders of Stock. Such transmission will be at the Company's expense and the Company will provide the Depositary with such number of copies of such documents as the Depositary may reasonably request. In addition, the Depositary will transmit to the record holders of Receipts at the Company's expense such other documents as may be requested by the Company. SECTION 5.06. Deposit of Stock by the Company. The Company agrees with the Depositary that neither the Company nor any company controlled by the Company will at any time deposit any Stock if such Stock is required to be registered under the provisions of the Securities Act and no registration statement is at such time in effect as to such Stock. SECTION 5.07. Indemnification by the Company. The Company agrees to indemnify the Depositary, any Depositary's Agent and any Registrar against, and hold each of them harmless from, any liability, costs and expenses (including reasonable fees and expenses of counsel) that may arise out of or in connection with its acting as Depositary, Depositary's Agent or Registrar, respectively, under this Deposit Agreement and the Receipts, except for any liability arising out of negligence, bad faith or willful misconduct on the part of any such person or persons. SECTION 5.08. Fees, Charges and Expenses. No fees, charges and expenses of the Depositary or any Depositary's Agent hereunder or of any Registrar shall be payable by any person other than the Company, except for any taxes and other governmental charges and except as provided in this Deposit Agreement. If, at the request of a holder of a Receipt, the Depositary incurs fees, charges or expenses for which it is not otherwise liable hereunder, such holder or other person will be liable for such fees, charges and expenses. All other fees, charges and expenses of the Depositary and any Depositary's Agent hereunder and of any Registrar (including, in each case, reasonable fees and expenses of counsel) incident to the performance of their respective obligations hereunder will be paid from time to time upon consultation and agreement between the Depositary and the Company as to the amount and nature of such fees, charges and expenses. ARTICLE VI AMENDMENT AND TERMINATION SECTION 6.01. Amendment. The form of the Receipts and any provision of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect that they may deem necessary or desirable; provided, however, that no such amendment that shall materially and adversely alter the rights of the holders of Receipts shall be effective as to outstanding Receipts until the expiration of 90 days after notice of such amendment shall have been given to the record holders of outstanding Receipts and unless such amendment shall have been approved by the holders of at least a majority of the Depositary Shares outstanding. Every holder of an outstanding Receipt at the time 90 days after such notice of amendment shall have been given shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by this Deposit Agreement as amended thereby. In no event shall any amendment impair the right, subject to the provisions of Sections 2.03, 2.06 and 2.07 and Article III, of any owner of any Depositary Shares to surrender the Receipt evidencing such Depositary Shares with instructions to the Depositary to deliver to the holder the Stock and all money and other property, if any, represented thereby, except in order to comply with mandatory provisions of applicable law. SECTION 6.02. Termination. Whenever so directed by the Company, the Depositary will terminate this Deposit Agreement by mailing notice of such termination to the record holders of all Receipts then outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate this Deposit Agreement if at any time 90 days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign and a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.04. If any Receipts shall remain outstanding after the date of termination of this Deposit Agreement, the Depositary thereafter shall discontinue the transfer of Receipts, shall suspend the distribution of dividends to the holders thereof and shall not give any further notices (other than notice of such termination) or perform any further acts under this Deposit Agreement, except as provided below and that the Depositary shall continue to collect dividends and other distributions pertaining to Stock, shall sell rights, preferences or privileges as provided in this Deposit Agreement and shall continue to deliver the Stock and any money and other property represented by Receipts, without liability for interest thereon, upon surrender thereof by the holders thereof. At any time after the expiration of two years from the date of termination, the Depositary may sell Stock then held hereunder at public or private sale, at such places and upon such terms as it deems proper and may thereafter hold in a segregated account the net proceeds of any such sale, together with any money and other property held by it hereunder, without liability for interest, for the benefit, pro rata in accordance with their holdings, of the holders of Receipts that have not heretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement except to account for such net proceeds and money and other property. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary, any Depositary's Agent and any Registrar under Sections 5.07 and 5.08. In the event this Deposit Agreement is terminated, the Company hereby agrees to use its best efforts to list the underlying Stock on the New York Stock Exchange, Inc. ARTICLE VII MISCELLANEOUS SECTION 7.01. Counterparts. This Deposit Agreement may be executed by the Company and the Depositary in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Deposit Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Deposit Agreement. Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary's Agents and shall be open to inspection during business hours at the Corporate Office and the New York Office and the respective offices of the Depositary's Agents, if any, by any holder of a Receipt. SECTION 7.02. Exclusive Benefits of Parties. This Deposit Agreement is for the exclusive benefit of the parties hereto, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. SECTION 7.03. Invalidity of Provisions. In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby. SECTION 7.04. Notices. Any notices to be given to the Company hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to the Company at 1615 Poydras St., New Orleans, Louisiana 70112, Attention: Secretary, or at any other place to which the Company may have transferred its principal executive office. Any notices to be given to the Depositary hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to the Depositary at the Corporate Office. Any notices given to any record holder of a Receipt hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to such record holder at the address of such record holder as it appears on the books of the Depositary or, if such holder shall have filed with the Depositary a written request that notices intended for such holder be mailed to some other address, at the address designated in such request. Delivery of a notice sent by mail, or by telegram or telex or telecopier shall be deemed to be effected at the time when a duly addressed letter containing the same (or a duly addressed letter confirming an earlier notice in the case of a telegram or telex or telecopier message) is deposited, postage prepaid, in a post office letter box. The Depositary or the Company may, however, act upon any telegram or telex or telecopier message received by it from the other or from any holder of a Receipt, notwithstanding that such telegram or telex or telecopier message shall not subsequently be confirmed by letter as aforesaid. SECTION 7.05. Depositary's Agents. The Depositary may, with the approval of the Company which approval shall not be unreasonably withheld, from time to time appoint one or more Depositary's Agents to act in any respect for the Depositary for the purposes of this Deposit Agreement and may vary or terminate the appointment of such Depositary's Agents. SECTION 7.06. Holders of Receipts Are Parties. Notwithstanding that holders of Receipts have not executed and delivered this Deposit Agreement or any counterpart thereof, the holders of Receipts from time to time shall be deemed to be parties to this Deposit Agreement and shall be bound by all of the terms and conditions, and be entitled to all of the benefits, hereof and of the Receipts by acceptance of delivery of Receipts. SECTION 7.07. Governing Law. This Deposit Agreement and the Receipts and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, and construed in accordance with, the law of the State of New York without giving effect to principles of conflict of laws. SECTION 7.08. Headings. The headings of articles and sections in this Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as a part of this Deposit Agreement or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts. IN WITNESS WHEREOF, Freeport-McMoRan Copper & Gold Inc. and Mellon Securities Trust Company have duly executed this Deposit Agreement as of the day and year first above set forth and all holders of Receipts shall become parties hereto by and upon acceptance by them of delivery of Receipts issued in accordance with the terms hereof. FREEPORT-McMoRan COPPER & GOLD INC. Attest: By:_______________________ By:_______________________ Authorized Officer MELLON SECURITIES TRUST COMPANY Attest: By:_______________________ By:_______________________ Authorized Officer EX-4.6 5 Exhibit 4.6 NOT MORE DEPOSITARY RECEIPT NOT MORE THAN 100,000 FOR DEPOSITARY SHARES, THAN 100,000 SHARES EACH REPRESENTING SHARES 0.05 OF A SHARE OF NUMBER STEP-UP CONVERTIBLE DEPOSITARY SHARES FCXP PREFERRED STOCK OF SEE REVERSE FOR CERTAIN DEFINITIONS CUSIP 35671D 50 1 FREEPORT-McMoRaN COPPER & GOLD INC. (incorporated under the laws of the State of Delaware) Mellon Securities Trust Company (the "Depositary") hereby certifies that is the registered owner of Depositary Shares (the "Depositary Shares"), each Depositary Share representing 0.05 of a share of Step-Up Convertible Preferred Stock, $0.10 par value (the "Stock"), of Freeport-McMoRan Copper & Gold Inc., a corporation duly organized and existing under the laws of the State of Delaware (the "Company"), deposited with the Depositary and the same proportionate interest in any and all other property received by the Depositary in respect of such shares of Stock and held by the Depositary under the Deposit Agreement (as defined below). Subject to the terms of the Deposit Agreement, each owner of a Depositary Share is entitled, proportionately, to all the rights, preferences and privileges of the Stock represented thereby, including the dividend, conversion, exchange, voting, liquidation and other rights contained in the Certificate of Designations establishing the rights, preferences, privileges and limitations of the Stock (the "Certificate of Designations"), copies of which are on file at the office of the Depositary at which at any particular time its business in respect of matters governed by the Deposit Agreement shall be administered, which at the time of the execution of the Deposit Agreement is located at the Depositary's corporate trust office in the Borough of Manhattan in the City of New York (the "New York City Office"). This Depositary Receipt ("Receipt") shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose unless this Receipt shall have been executed manually or, if a Registrar for the Receipts (other than the Depositary) shall have been appointed, by facsimile by the Depositary by the signature of a duly authorized officer and, if executed by facsimile signature of the Depositary, shall have been countersigned manually by such Registrar by the signature of a duly authorized officer. THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED STOCK. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY STOCK AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE DEPOSITARY SHARES, AS TO THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT, AS TO THE VALUE OF THE DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD HOLDERS OF THE DEPOSITARY RECEIPTS IN AND TO THE DEPOSITARY SHARES. The Company will furnish to any holder of this Receipt without charge, upon request addressed to its executive office, a full statement of the designation, relative rights, preferences and limitations of the shares of each authorized class, and of each class of preferred stock authorized to be issued, so far as the same may have been fixed, and a statement of the authority of the Board of Directors of the Company to designate and fix the relative rights, preferences and limitations of other classes. This Receipt is continued on the reverse hereof and the additional provisions therein set forth for all purposes have the same effect as if set forth at this place. Dated: MELLON SECURITIES TRUST COMPANY, as Depositary, Transfer Agent and Registrar By: Authorized Officer Further Conditions and Agreements Forming Part of this Receipt Appear on the Reverse Side FURTHER CONDITIONS AND AGREEMENTS FORMING PART OF THIS RECEIPT 1. The Deposit Agreement. Depositary Receipts (the "Receipts"), of which this Receipt is one, are made available upon the terms and conditions set forth in the Deposit Agreement, dated as of July 1, 1993 (the "Deposit Agreement"), among the Company, the Depositary and all holders from time to time of Receipts. The Deposit Agreement (copies of which are on file at the Corporate Office, the office maintained by the Depositary in the Borough of Manhattan, the City of New York which at the time of the execution of the Deposit Agreement is located at 120 Broadway, New York, N.Y. (the "New York Office") and at the office of any agent of the Depositary) sets forth the rights of holders of Receipts and the rights and duties of the Depositary. The statements made on the face and the reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are subject to the detailed provisions thereof, to which reference is hereby made, in the event of any conflict between the provisions of this Receipt and the provisions of the Deposit Agreement, the provisions of the Deposit Agreement will govern. 2. Definitions. Unless otherwise expressly herein provided, all defined terms used herein shall have the meanings ascribed thereto in the Deposit Agreement. 3. Redemption at the Option of the Company; Conversion at the Option of the Holder. Whenever the Company shall elect to redeem shares of Stock into shares of Class A Common Stock in accordance with the Certificate of Designations, it shall (unless otherwise agreed in writing with the Depositary) give the Depositary in its capacity as Depositary not less than 5 business days' prior notice of the proposed date of the mailing of a notice of redemption and the simultaneous redemption of the Depositary Shares representing the Stock to be redeemed and of the number of such shares of Stock held by the Depositary to be redeemed. The Depositary shall, as directed by the Company in writing, mail, first class postage prepaid, notice of the redemption of Stock and the proposed simultaneous, redemption of Depositary Shares representing the Stock to be redeemed, not less than 15 and not more than 60 days prior to the date fixed for redemption of such Stock and Depositary Shares, to the record holders of the Receipts evidencing the Depositary Shares to be so redeemed, at the addresses of such holders as the same appear on the records of the Depositary. On the date of any such redemption, the Depositary shall surrender the certificate or certificates held by the Depositary evidencing the number of shares of Stock to be redeemed in the manner specified in the notice of redemption. The Depositary shall, thereafter, redeem the number of Depositary Shares representing such redeemed Stock upon the surrender of Receipts evidencing such Depositary Shares in the manner provided in the notice sent to record holders of Receipts. In case fewer than all the outstanding Depositary Shares are to be redeemed, the Depositary Shares to be redeemed shall be selected by the Depositary by lot or on a pro rata basis at the direction of the Company. Notice having been mailed as aforesaid, from and after the redemption date (unless the Company shall have failed to redeem the shares of Stock to be redeemed by it upon the surrender of the certificate or certificates therefor by the Depositary as described above), the Depositary Shares called for redemption shall be deemed to be outstanding and all rights of the holders of Receipts evidencing such Depositary Shares (except the right to receive the shares of Class A Common Stock and cash, if any, payable upon redemption upon surrender of such Receipts) shall, to the extent of such Depositary Shares, cease and terminate. The foregoing is subject further to the terms and conditions of the Certificate of Designations. If fewer than all of the Depositary Shares evidenced by this Receipt are called for redemption, the Depositary will deliver to the holder of this Receipt upon its surrender to the Depositary, together with the redemption price (whether to be paid in the form of cash, shares of Class A Common Stock or other form or forms of consideration) and all accrued and unpaid dividends to and including the date fixed for redemption payable in respect of the Depositary Shares called for redemption, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption. Whenever a record holder of receipts shall duly deliver, in person or by a duly authorized attorney, such Receipts (properly endorsed or assigned for transfer, as the Depositary shall require) to the Depositary at the New York Office, together with written notice of such record holder's election to convert the Depositary Shares evidenced by such Receipts into Class A Common Stock (provided that any delivery of Receipts evidencing Depositary Shares that have been called for redemption may not not occur after the close of business on the date fixed for redemption) the Depositary shall promptly notify the Company of such record holder's election and deliver to the Company certificates evidencing such Stock as are represented by the Depositary Shares evidenced by such Receipts delivered by such record holder for conversion. From and after the close of business on any business day on which a record holder duly delivers the foregoing documents to the Depositary, such Depositary Shares shall be deemed converted into Class A Common Stock at a conversion rate to be communicated to the Depositary in writing, which conversion rate will be equal to 0.05 times the conversion rate for each share of Stock as set forth in the Certificate of Designations. 4. Withdrawal of Stock Not Permitted. Holders of Receipts are not entitled to receive any of the shares of Stock represented by such Receipts. 5. Transfers, Split-ups, Combinations. Subject to Paragraphs 6, 7 and 8 below, this Receipt is transferable on the books of the Depositary upon surrender of this Receipt to the Depositary at the Corporate Office or the New York Office, or at such other offices as the Depositary may designate properly endorsed or accompanied by a properly executed instrument of transfer, and upon such transfer the Depositary shall sign and deliver a Receipt or Receipts to or upon the order of the person entitled thereto, all as provided in and subject to the Deposit Agreement. This Receipt may be split into other Receipts or combined with other Receipts into one Receipt evidencing the same aggregate number of Depositary Shares evidenced by the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered; provided, however, that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share. 6. Conditions to Signing and Delivery, Transfer, etc. of Receipts. Prior to the execution and delivery, registration of transfer, split-up, combination, surrender or exchange of this Receipt, the delivery of any distribution hereon or the deposit of Stock, the Depositary, any of the Depositary's Agents or the Company may require any or all of the following: (i) payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to Stock being deposited or withdrawn or with respect to Class A Common Stock or other securities or property of the Company being issued upon conversion or redemption); (ii) production of proof satisfactory to it as to the identity and genuineness of any signature; and (iii) compliance with such reasonable regulations, if any, as the Depositary or the Company may establish not inconsistent with the Deposit Agreement. Any person presenting Stock for deposit, or any holder of this Receipt, may be required to file such proof of information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper. The Depositary or the Company may withhold or delay the delivery of this Receipt, the registration of transfer, redemption or conversion of this Receipt or the distribution of any dividend or other distribution until such proof or other information is filed, such certificates are executed or such representations and warranties are made. 7. Suspension of Delivery, Transfer, etc. The deposit of Stock may be refused and the delivery of this Receipt against Stock or the registration of transfer, split-up, combination, surrender or exchange of this Receipt may be suspended (i) during any period when the register of stockholders of the Company is closed, (ii) if any such action is deemed necessary or advisable by the Depositary, any of the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement, or (iii) with the approval of the Company, for any other reason. The Depositary shall not be required (a) to issue, transfer or exchange any Receipts for a period beginning at the opening of business 15 days next preceding any selection of Depositary Shares and Stock to be redeemed and ending at the close of business on the day of the mailing of notice of redemption of Depositary Shares or (b) to transfer or exchange for another Receipt any Receipt evidencing Depositary Shares called or being called for redemption, in whole or in part, subject to conversion except as provided in the last sentence of Paragraph 3. 8. Payment of Taxes or Other Governmental Charges. If any tax or other governmental charge shall become payable by or on behalf of the Depositary with respect to (i) this Receipt, (ii) the Depositary Shares evidenced by this Receipt, (iii) the Stock (or fractional interest therein) or other property represented by such Depositary Shares, or (iv) any transaction referred to in Section 4.06 of the Deposit Agreement, such tax (including transfer, issuance or acquisition taxes, if any, or governmental charge shall be payable by the holder of this Receipt, who shall pay the amount thereof to the Depositary. Until such payment is made, registration of transfer of this Receipt or any split-up or combination hereof may be refused, any dividend or other distribution may be withheld and any part or all of the Stock or other property (including Class A Common Stock or securities received in connection with a conversion or redemption of Stock) represented by the Depositary Shares evidenced by this Receipt may be sold for the account of the holder hereof (after attempting by reasonable means to notify such holder prior to such sale). Any dividend or other distribution so withheld and the proceeds of any such sale may be applied to any payment to such tax or other governmental charge, the holder of this Receipt remaining liable for any deficiency. 9. Amendment. The form of the Receipts and any provision of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect that they may deem necessary or desirable; provided, however, that no such amendment that shall materially and adversely alter the rights of the holders of Receipts shall be effective as to outstanding Receipts until the expiration of 90 days after notice of such amendment shall have been given to the record holders of outstanding Receipts and unless such amendment shall have been approved by the holders of at least a majority of the Depositary Shares outstanding. Every holder of an outstanding Receipt at the time 90 days after such notice of amendment shall have been given shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. 10. Fees, Charges and Expenses. The Company will pay all fees, charges and expenses of the Depositary, except for taxes (including transfer taxes, if any) and other governmental charges and such charges as are expressly provided in the Deposit Agreement to be at the expense of persons depositing Stock, holders of Receipts or other persons. 11. Title to Receipts. It is a condition of this Receipt, and every successive holder hereof by accepting or holding the same consents and agrees, that title to this Receipt (and to the Depositary Shares evidenced hereby), when properly endorsed or accompanied by a property executed instrument of transfer, is transferable by delivery with the same effect as in the case of investment securities in general; provided however that the Depositary may, notwithstanding any notice to the contrary, treat the record holder hereof at such time as the absolute owner hereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement and for all other purposes. 12. Dividends and Distributions. Whenever the Depositary shall receive any cash dividend or other cash distribution on the Stock, the Depositary shall, subject to the provisions of the Deposit Agreement, distribute to record holders of Receipts such amounts of such sums as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; provided, however, that in case the Company or the Depositary shall be required by law to withhold and does withhold from any cash dividend or other cash distribution in respect of the Stock an amount on account of taxes, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any owner of Depositary Shares a fraction of one cent and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next sum received by the Depositary for distribution to record holders of Receipts then outstanding. 13. Subscription Rights, Preferences or Privileges. If the Company shall at any time offer or cause to be offered to the persons in whose name Stock is registered on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance, subject to the provisions of the Deposit Agreement, be made available by the Depositary to the record holders of Receipts in such manner as the Company shall instruct. 14. Notice of Dividends, Fixing of Record Date. Whenever (i) any cash dividend or other cash distribution shall become payable, or any distribution other than cash shall be made, or any rights, preferences or privileges shall at any time be offered, with respect to the Stock, or (ii) the Depositary shall receive notice of any meeting at which holders of Stock are entitled to vote or of which holders of Stock are entitled to notice, or of the mandatory conversion of, or any election on the part of the Company to call for redemption of, any shares of Stock, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Stock) for the determination of the holders of Receipts (x) who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or (y) who shall be entitled to give instructions for the exercise of voting rights at any such meeting or of such meeting or to receive notice of such redemption. 15. Voting Rights. Upon receipt of notice of any meeting at which the holders of Stock are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the record holders of Receipts a notice, which shall contain (i) such information as is contained in such notice of meeting, (ii) a statement that the holders of Receipts at the close of business on a specified record date determined as provided in Paragraph 14 will be entitled, subject to any applicable provision of law, the Certificate of Incorporation or the Certificate of Designations, to instruct the Depositary as to the exercise of the voting rights pertaining to the Stock represented by their respective Depositary Shares, and (iii) a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of this Receipt on such record date the Depositary shall endeavor insofar as practicable to vote or cause to be voted the Stock represented by the Depositary Shares evidenced by this Receipt in accordance with the instructions set forth in such request. The Company hereby agrees to take all reasonable action that may be deemed necessary by the Depositary in order to enable the Depositary to vote such Stock or cause such Stock to be voted. In the absence of specific instructions from the holder of this Receipt, the Depositary will abstain from voting to the extent of the Stock represented by the Depositary Shares evidenced by this Receipt. 16. Reports, Inspection of Transfer Books. The Depositary shall make available for inspection by holders of Receipts of the Corporate Office, the New York City Office and at such other places as it may from time to time deem advisable during normal business hours any reports and communications received from the Company that are received by the Depositary as the holder of Stock. The Depositary, acting as transfer agent and Registrar, shall keep books at the Corporate Office for the registration and transfer of Receipts, which books at all reasonable times will be open for inspection by the record holders of Receipts; provided that any such holder requesting to exercise such right shall certify to the Depositary that such inspection shall be for a proper purpose reasonably related to such person's interest as an owner of Depositary Shares. 17. Liability of the Depositary, the Depositary's Agents, the Registrar and the Company. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall incur any liability to any holder of this Receipt, if by reason of any provision of any present or future law or regulation thereunder of any governmental authority or, in the case of the Depositary, the Registrar or any Depositary's Agent, by reason of any provision, present or future, of the Certificate of Incorporation or the Certificate of Designations or, in the case of the Company, the Depositary, the Registrar or any Depositary's Agent, by reason of any act of God or war or other circumstances beyond the control of the relevant party, the Depositary, any Depositary's Agent, the Registrar or the Company shall be prevented or forbidden from doing or performing any act or thing that the terms of the Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent, the Registrar or the Company incur any liability to any holder of this Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing that the terms of the Deposit Agreement provide shall or may be done or performed or (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement except, in the case of the Depositary, any Depositary's Agent or the Registrar, if such exercise or failure to exercise discretion is caused by its negligence or bad faith. 18. Obligations of the Depositary, the Depositary's Agent, the Registrar and the Company. The Company assumes no obligation and shall be subject to no liability under the Deposit Agreement or this Receipt to the holder hereof or other persons, except to perform in good faith such obligations as are specifically set forth and undertaken by it to perform in the Deposit Agreement. Each of the Depositary, the Depositary's Agents and the Registrar assumes no obligation and shall be subject to no liability under the Deposit Agreement or this Receipt to the holder hereof or other persons, except to perform such obligations as are specifically set forth and undertaken by it to perform in the Deposit Agreement without negligence or bad faith. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding with respect to Stock Depositary Shares or Receipts or Common Stock that in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company will be liable for any action or failure to act by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Stock for deposit, any holder of this Receipt or any other person believed by it in good faith to be competent to give such advice or information. 19. Termination of Deposit Agreement. Whenever so directed by the Company, the Depositary will terminate the Deposit Agreement by mailing notice of such termination to the record holders of all receipts then outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement if at any time 90 days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign and a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.04 of the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations thereunder except for its obligations to the Depositary, any Depositary's Agent and any Registrar under Sections 5.07 and 5.08 of the Deposit Agreement. If any Receipts remain outstanding after the date of termination of the Deposit Agreement, the Depositary thereafter shall discontinue all functions and be discharged from all obligations as provided in the Deposit Agreement, except as specifically provided therein. 20. Governing Law. The Deposit Agreement and this Receipt and all rights thereunder and hereunder and provisions thereof and hereof shall be governed by, and construed in accordance with, the law of the State of New York without giving effect to principles of conflict of laws. CONVERSION NOTICE To Freeport-McMoRan Copper & Gold Inc. The undersigned owner of the Depositary Shares evidenced by this Receipt hereof irrevocably exercises the option to convert the shares of Preferred Stock of Freeport-McMoRan Copper & Gold Inc. represented by such Depositary Shares or the number of full shares represented by the number of Depositary Shares set forth below, into shares of Class A Common Stock of Freeport-McMoRan Copper & Gold Inc. in accordance with the terms of the Certificate of Incorporation and the statement of designations, preferences and relative rights of the Preferred Stock of Freeport-McMoRan Copper & Gold Inc. and directs that the shares issuable and deliverable upon the conversion, together with any check in payment for fractional shares be issued in the name of and delivered to the undersigned unless a different name has been indicated below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay any transfer taxes payable with respect thereto. Dated: Fill in for registration of shares: ____________________________________ _______________________________ (Name) Signature Portion to be converted if less than all: ___________________________________ ________________Depositary Shares (Street Address) ___________________________________ _________________________________ (City, State and Zip Code) Social Security or Other Identification Number ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Receipt, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM--as tenants in common UNIF GIFT MIN ACT--_______Custodian______ TEN ENT__as tenants by the (Cust) (Minor) entireties under Uniform Gifts to Minors JT TEN--as joint tenants with Act_________________________ right of survivorship (State) and not as tenants in common Additional abbreviations may also be used though not in the above list. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ______________________________________ | | | | |____________________________________|________________________________ the within Receipts and all rights and interests represented by the Depositary Shares evidenced thereby, and hereby irrevocably constitutes and appoints __________________________________________________ his attorney, to transfer the same on the books of the within named Depositary, with full power of substitution in the premises. Dated:_____________________ Signature:__________________________________ NOTE: The signature to this assign- ment must correspond with the name as written upon the face of the Receipt in every particular, without alteration or enlargement, or any change whatever. EX-4.7 6 Exhibit 4.7 CERTIFICATE OF DESIGNATIONS OF GOLD-DENOMINATED PREFERRED STOCK (Par Value $0.10 Per Share) OF FREEPORT-McMoRan COPPER & GOLD INC. Pursuant to Section 151(g) of the General Corporation Law of the State of Delaware We, the undersigned, being a Vice President and the Secretary, respectively, of Freeport-McMoRan Copper & Gold Inc. (hereinafter called the "Corporation"), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware, DO HEREBY CERTIFY: FIRST. The Certificate of Incorporation of the Corporation, as amended (hereinafter called the "Certificate of Incorporation"), authorizes the issuance of 2,000,000 shares of Preferred Stock, par value $0.10 per share, of which 700,000 shares have been issued. The Board of Directors of the Corporation is authorized by the Certificate of Incorporation to provide, without further stockholder action, for the issuance of any or all of the shares of the Preferred Stock in one or more series, with such designation, powers, preferences and relative, participating, optional or other rights, and any qualifications, limitations or restrictions thereof, as may be determined by the Board of Directors of the Corporation with respect to each particular series prior to the issue thereof. SECOND. The Board of Directors of the Corporation, acting by Unanimous Written Consent dated July 21, 1993, and a Special Committee thereof, pursuant to authority specifically granted to it by such Board of Directors, acting by Unanimous Written Consent dated August 5, 1993, duly adopted the following resolutions authorizing the creation and issuance of a series of Preferred Stock to be known as "Gold-Denominated Preferred Stock." RESOLVED, that the Board of Directors, pursuant to authority vested in it by the provisions of the Certificate of Incorporation of the Corporation, hereby authorizes the issuance of a series of Preferred Stock of the Corporation and hereby fixes the number, designation, preferences, rights and any qualifications, limitations or restrictions thereof as follows: 1. Designation. (a) 300,000 shares of Preferred Stock of the Corporation are hereby constituted as a series of Preferred Stock designated as "Gold-Denominated Preferred Stock" (hereinafter called "this Series"). Each share of this Series shall be identical in all respects with the other shares of this Series. The Board of Directors is authorized to increase or decrease (but not below the number of shares of this Series then outstanding) the number of shares of this Series. (b) Shares of this Series which have been redeemed for cash as hereinafter provided or purchased by the Corporation shall be canceled, and shall revert to authorized but unissued shares of Preferred Stock undesignated as to series, and may be reissued as a part of this Series or may be reclassified and reissued as part of a new or existing series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, all subject to the conditions or restrictions on issuance set forth in any resolution or resolutions adopted by the Board of Directors providing for the issue of such series of Preferred Stock. 2. Dividends. (a) The holders of shares of this Series shall be entitled to receive, but only out of funds legally available therefor, cash dividends as hereinafter provided. Such dividends shall be paid when, as and if declared by the Board of Directors on the first day of February, May, August and November in each year commencing November 1, 1993 and ending August 1, 2003 (each such date being referred to herein as a "Dividend Payment Date") to holders of record on the record date determined by the Board of Directors in advance of the payment of each particular dividend; provided that dividends payable on August 1, 2003 (the "Mandatory Redemption Date") shall be paid as provided in Section 4. Such dividends shall be cumulative from the date of original issuance of the shares of this Series. (b) So long as any shares of this Series shall be outstanding, the Corporation shall not, unless full cumulative dividends for all past dividend periods shall have been paid or declared and set apart for payment upon all outstanding shares of this Series and the shares of any other class or series of Preferred Stock, the 7% Convertible Exchangeable Special Preference Stock (hereinafter called the "Special Preference Stock") and any other class or series of stock of the Corporation ranking, as to dividends, on a parity with shares of this Series (the shares of any other class or series of Preferred Stock, the Special Preference Stock and any other class or series of stock of the Corporation ranking, as to dividends, on a parity with shares of this Series being herein referred to as "Parity Dividend Stock"), (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, the Class A Common Stock of the Corporation (the "Class A Common Stock"), the Class B Common Stock of the Corporation ("Class B Common Stock") or any other stock of the Corporation ranking junior to this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation (the Class A Common Stock, the Class B Common Stock and any such other stock being herein referred to as "Junior Stock"), other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, or (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock. (c) If the funds available for the payment of dividends are insufficient to pay in full the dividends payable on all outstanding shares of this Series and shares of Parity Dividend Stock, the total available funds to be paid in partial dividends on the shares of this Series and shares of Parity Dividend Stock shall be divided among this Series and the Parity Dividend Stock in proportion to the aggregate amounts of dividends accrued and unpaid with respect to this Series and the Parity Dividend Stock. Accruals of dividends shall not bear interest. 3. Dividend Rate. (a) The Dividend Rate per quarter on each share of this Series shall be an amount equal to the Dollar Equivalent Value (as defined below) of 0.0175 ounces of gold. "Dollar Equivalent Value" means the applicable Reference Gold Price multiplied by the applicable number of ounces of gold. "Reference Gold Price" means, when used to calculate the amount of any dividend payable on any Dividend Payment Date (other than the Mandatory Redemption Date, as to which the calculation shall be made as provided in Section 4) the arithmetic average of the London P.M. gold fixing price for an ounce of gold in the London bullion market on each of the five trading days ending on the second trading day prior to the last day of the calendar quarter immediately preceding such Dividend Payment Date, as published in The Wall Street Journal (Eastern Edition) (or, if such prices are not published in The Wall Street Journal, as published in the Financial Times). If for any reason gold is not traded during any relevant period in the London bullion market or is not quoted in U.S. dollars in such market, gold will be valued during such period or portion thereof, as the case may be, on the basis of trading prices, quoted in U.S. dollars, in the then principal international trading market for gold as determined by the Corporation's Board of Directors. On or before the fifth business day preceding each record date for the payment of a dividend in respect of the shares of this Series, the Corporation will cause to be published in The Wall Street Journal (Eastern Edition) or, if such newspaper is not then published, in a newspaper or other publication of national circulation, the amount of the dividend payable in respect of each share of this Series on the next succeeding Dividend Payment Date. (b) Dividends in respect of the first Dividend Period shall accrue from the date of original issuance of the shares of this Series and shall be calculated on the basis of a year of 360 days consisting of 12 30-day months. The term "Dividend Period", as used herein, means (i), with respect to the November 1, 1993 Dividend Payment Date, the period from the date of original issuance of the shares of this Series to and including such Dividend Payment Date, and (ii), with respect to any other Dividend Payment Date, the period commencing on the day following the immediately preceding Dividend Payment Date to and including such Dividend Payment Date. 4. Redemption. (a) The shares of this Series shall be subject to mandatory redemption by the Corporation, out of funds legally available therefor, on the Mandatory Redemption Date at the Dollar Equivalent Value of 2.0 ounces of gold per share plus accrued and unpaid dividends (as hereinafter defined) to the Mandatory Redemption Date. (b) The shares of this Series shall not be subject to redemption at the option of the Corporation except as described in this Section 4(b). If on any Dividend Payment Date the total number of shares of this Series outstanding shall be less than 15% of the total number of shares of this Series outstanding on the 40th day following the date of original issuance of the shares of this Series, the Corporation shall have the option to redeem the outstanding shares of this Series, in whole but not in part, out of funds legally available therefor, at an amount equal to the Dollar Equivalent Value of 2.0 ounces of gold per share plus accrued and unpaid dividends (as hereinafter defined) to the date fixed for redemption. For purposes of determining the number of shares of this Series outstanding on any Dividend Payment Date, the shares of this Series acquired by the Corporation on or prior to such Dividend Payment Date and not theretofore canceled (or in the case of any shares of this Series represented by depositary shares, the depositary shares representing shares of this Series acquired by the Corporation on or prior to such Dividend Payment Date and not theretofore delivered to the depositary for the depositary shares for cancellation) shall be deemed to be outstanding. Notice of any such redemption as described in this Section 4(b) shall be mailed to holders of the shares of this Series within 30 days after such Dividend Payment Date in accordance with the provisions of Section 4(c). (c) At least 30 days but no more than 60 days prior to the date fixed for redemption of the shares of this Series in accordance with Section 4(a) or (b) hereof (the "Call Date"), a written notice will be mailed to each holder of record (and each beneficial owner to the extent required by law) of shares of this Series to be redeemed, notifying each holder of the Corporation's election to redeem such shares if such redemption is pursuant to Section 4(b), setting forth the method for determining the amount payable per share of this Series on the Call Date, stating the Call Date and calling upon such holder to surrender to the Corporation on the Call Date at the place designated in such notice the certificate or certificates representing the shares called for redemption. (d) At any time after a notice of redemption has been given in the manner prescribed in Section 4(a) or (b) and the amount payable on the date fixed for redemption can be determined by the Corporation, and prior to the date fixed for redemption, the Corporation may deposit in trust, with a bank or trust company identified in the notice of redemption having capital, surplus and undistributed profits aggregating at least $50,000,000, an aggregate amount of funds sufficient for such redemption (including dividends accrued on the shares of this Series called for redemption to the date fixed for redemption) for immediate payment in the appropriate amounts upon surrender of certificates for such shares. Any interest accrued on such funds shall be paid to the Corporation from time to time. Such deposit in trust shall be irrevocable, except that any funds deposited by the Corporation which are unclaimed at the end of two years from the date fixed for such redemption shall be paid over to the Corporation upon its request, and upon such repayment the holders of the shares so called for redemption shall look only to the Corporation for payment of the appropriate amount. (e) From and after the date of the deposit of trust funds for the redemption of shares of this Series in accordance with the provisions of Section 4(d) hereof or, if no such deposit is made, from and after the date fixed for redemption (unless the Corporation shall default in making payment of the amount payable upon such redemption), whether or not certificates for shares so called for redemption have been surrendered by the holders thereof as described below, dividends on the shares of this Series so called for redemption shall cease to accrue, and such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the amount payable upon such redemption) shall cease and terminate. Upon surrender in accordance with the notice of redemption of the certificates for any shares of this Series so redeemed (properly endorsed or assigned for transfer if the Corporation shall so require and the notice shall so state), the holder thereof shall be entitled to receive payment of the redemption price plus an amount equal to all accrued and unpaid dividends as aforesaid. (f) If the Corporation shall have failed to redeem all outstanding shares of this Series on the Mandatory Redemption Date then, until it shall have redeemed all outstanding Shares of this Series, the Corporation may not (i) declare, pay or set apart any amounts for dividends on, or make any other distribution in cash or other property in respect of, any Junior Stock other than a dividend payable solely in Junior Stock, (ii) purchase, redeem or otherwise acquire for value any shares of Junior Stock, directly or indirectly, other than as a result of a reclassification, exchange or conversion of one Junior Stock for or into another Junior Stock, or other than through the use of proceeds of a substantially contemporaneous sale of other Junior Stock, (iii) make any payment on account of, or set aside money for, a sinking or other like fund for the purchase, redemption or other acquisition for value of any shares of Junior Stock or (iv) purchase, redeem or otherwise acquire for value any shares of stock of the Corporation ranking on a parity with the shares of this Series as to dividends or distribution of assets upon liquidation, dissolution or winding up ("Parity Stock"). If the funds available for such mandatory redemption are insufficient to redeem all outstanding shares of this Series and any other series of Parity Stock which the Corporation is then obligated to redeem or purchase, the total available funds shall be divided among the shares of this Series and such other series in proportion to the aggregate amount of redemption or other purchase obligations with respect to this Series and such other series. (g) (i) Within 90 days following each Calculation Date (as defined below), the Corporation shall be required to prepare a certificate (a "Corporation Certificate") setting forth its determination of the Reserve Coverage Ratio (as defined below) as of such Calculation Date. If the Reserve Coverage Ratio, as shown on the Corporation Certificate prepared with respect to any Calculation Date is less than 5.0, the Corporation will be required to make an offer (a "Reserve Coverage Offer") to purchase, out of funds legally available therefor, at a price equal to the Dollar Equivalent Value of 2.0 ounces of gold per share of this Series plus accrued and unpaid dividends (as hereinafter defined) through the Purchase Date (as hereinafter defined), the smallest number of shares of this Series (rounded to the nearest 500 shares) such that, if all such shares had been repurchased on the relevant Calculation Date, the Reserve Coverage Ratio on that date would have been greater than or equal to 5.0. If the Corporation Certificate prepared with respect to any Calculation Date shows that the Reserve Coverage Ratio is less than 5.0, the Corporation shall include on such Certificate its calculation of the number of shares of this Series for which it is required to make an offer (the "Offer Amount"). (ii) If required to make a Reserve Coverage Offer, the Corporation will commence such offer not more than 60 days after the date of the Corporation Certificate by mailing a notice to all holders of record of the shares of this Series setting forth (A) that such notice is being given pursuant to a Reserve Coverage Offer, (B) the Offer Amount, (C) the method for determining the amount payable per share of this Series on the Purchase Date, (D) the last date ("the Purchase Date"), which shall not be less than 30 nor more 60 days after the date of such notice, by which a holder must elect whether to accept the Reserve Coverage Offer, (E) the procedures that such holder must follow to exercise its rights and (F) the procedures for withdrawing an election. The Corporation shall also cause a copy of such notice to be published in The Wall Street Journal (Eastern Edition) or another daily newspaper of national circulation. (iii) Holders electing to have shares of this Series purchased by the Corporation pursuant to a Reserve Coverage Offer will be required to surrender the certificates representing such shares, with an appropriate form duly completed, to the Corporation prior to the Purchase Date. Holders will be entitled to withdraw an election by a written notice of withdrawal delivered to the Corporation prior to the close of business on the Purchase Date. The notice of withdrawal shall state the number of shares of this Series and certificate numbers to which the notice of withdrawal relates and the number of shares and certificate numbers, if any, which remain subject to the election. If the aggregate number of shares of this Series tendered exceeds the Offer Amount, the Corporation will select the shares of this Series to be purchased on a pro rata basis as nearly as practicable. The Corporation shall, as promptly as reasonably practicable after the Purchase Date, cause payment to be mailed or delivered to each tendering holder in the amount of the purchase price, and any unpurchased shares of this Series to be returned to the holder thereof. (h) If, at the time of the mandatory redemption on the Mandatory Redemption Date or a Reserve Coverage Offer, the funds of the Corporation legally available for redemption or repurchase of the shares of this Series are insufficient to redeem or repurchase such shares, those funds legally available shall be used to redeem or repurchase the maximum possible number of shares, pro rata based upon the number of shares to be redeemed or delivered for purchase, as the case may be. At any time thereafter when additional funds of the Corporation become legally available for such purpose, such funds shall immediately be used to redeem or purchase, as the case may be, any additional shares of this Series which the Corporation is obligated to redeem or purchase, as the case may be, but which it has not so redeemed or purchased. (i) The Corporation shall not have the right to redeem shares of this Series pursuant to Section 4(a) or (b) unless full cumulative dividends for all past dividend periods shall have been paid or declared and set aside for payment upon all outstanding shares of this Series and all outstanding shares of other series of stock of the Corporation ranking, as to dividends, on a parity with the shares of this Series. (j) The Corporation will not consummate or permit any subsidiary to consummate any transaction involving the Corporation which would cause the Reserve Coverage Ratio to fall below 5.0 unless, immediately following consummation of such transaction, the Company will have sufficient legally available funds to complete any Reserve Coverage Offer required as a result thereof. (k) Definitions. For purposes of this Section 4, the following terms shall have the meanings indicated: (i) "accrued and unpaid dividends" per share of this Series (A) upon redemption on the Mandatory Redemption Date, (B) in the case of any Reserve Coverage Offer, (C) in the case of any optional redemption and (D) in the case of a liquidation event, shall be equal to the sum of (x) the aggregate amount of any accrued and unpaid dividends on such share through the next preceding Dividend Payment Date (calculated as provided in Section 3) plus (y) a proportionate amount of the regular quarterly dividend at the Dividend Rate for the period from the day following the immediately preceding Dividend Payment Date through the redemption date, Purchase Date or date of liquidating distribution (calculated on the basis of a year of 360 days consisting of twelve 30- day months) multiplied by the Reference Gold Price used to calculate the other amounts payable to holders of the shares of this Series in connection with such redemption, purchase or liquidation event. If a quarterly dividend is not declared and paid as provided in Section 3, the unpaid dividend that shall cumulate for such Dividend Period will be the amount of the dividend that would have been payable on the Dividend Payment Date if such dividend had been timely paid. (ii) "Calculation Date" means (i) December 31 of each year and (ii) the date of the consummation of each transaction undertaken by the Corporation or any subsidiary of the Corporation which would either (a) cause the Reserve Amount, as estimated by the Corporation, to decrease by 50% or more from the preceding Calculation Date or (b) cause the Reserve Coverage Ratio, as estimated by the Corporation, to fall below 5.0. (iii) The "Gold Amount" as of any Calculation Date means the product of (x) 2.0 ounces of gold and (y) the number of shares of this Series issued and outstanding as of such Calculation Date less the number of shares of this Series acquired by the Corporation on or prior to the date of preparation of a Corporation Certificate with respect to such Calculation Date. (iv) The "Reference Gold Price," when used to calculate any amount payable with respect to the shares of this Series (other than dividends payable on any Dividend Payment Date other than the Mandatory Redemption Date) or to purchase any shares of this Series on any date means the arithmetic average of the London P.M. gold fixing price for an ounce of gold in the London bullion market, as published in The Wall Street Journal (Eastern Edition) (or, if such prices are not published in The Wall Street Journal (Eastern Edition), as published in the Financial Times) on each of the twenty trading days ending on the second trading day prior to (i) in the case of the mandatory redemption of shares of this Series, the Mandatory Redemption Date, (ii) in the case of any offer to purchase shares of this Series due to a failure to meet the minimum Reserve Coverage Ratio on any Calculation Date, the date of commencement of such Reserve Coverage Offer, (iii) in the case of any optional redemption of shares of this Series, the date fixed for such redemption and (iv) in the case of a liquidation event, the date 30 days prior to the date fixed for the liquidating distribution. If for any reason gold is not traded during any relevant period in the London bullion market or is not quoted in U.S. dollars in such market, gold will be valued during such period or portion thereof, as the case may be, on the basis of trading prices, quoted in U.S. dollars, in the then principal international trading market for gold as determined by the Corporation's Board of Directors. (v) The "Reserve Amount" as of any Calculation Date means the Corporation's Proportionate Interest in the estimated proved and probable gold reserves of the Corporation and of any entity in which the Corporation has a direct or indirect beneficial ownership interest. The estimated proved and probable gold reserves shall be determined based upon evaluation methods generally applied by the mining industry. The Corporation's "Proportionate Interest" in any estimated proved and probable gold reserves shall be the Corporation's direct or indirect beneficial ownership interest in such reserves, giving effect to reductions required to reflect any beneficial ownership interest of any person other than the Corporation in such reserves. (vi) The "Reserve Coverage Ratio" shall be determined as of each Calculation Date by dividing (i) the Reserve Amount as of such Calculation Date by (ii) the Gold Amount as of such date. 5. Voting Rights. (a) Except for the voting rights described below and except as otherwise provided by law, the holders of shares of this Series shall not be entitled to vote on any matter or to receive notice of, or to participate in, any meeting of the stockholders of the Corporation. Each share of Preferred Stock of this Series will be entitled to one vote on matters which holders of such series are entitled to vote. (b) Whenever dividends payable on shares of this Series shall be in default in an aggregate amount equal to or exceeding six full quarterly dividends on all shares of this Series at the time outstanding, the number of directors then constituting the Board of Directors of the Corporation shall be increased by two, and holders of shares of this Series shall, in addition to any other voting rights, have the right, voting separately as a class together with holders of all other series of stock of the Company ranking on a parity with shares of this Series either as to dividends or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been conferred and are exercisable (such other series of stock being herein referred to as "Other Voting Stock"), to elect such two additional directors. In such case, the Board of Directors will be increased by two directors, and the holders of shares of this Series (either alone or with the holders of Other Voting Stock) will have the exclusive right as members of such class, as described above, to elect two directors at the next annual meeting of stockholders. Whenever such right of the holders of shares of this Series shall have vested, such right may be exercised initially either at a special meeting of such holders as provided in Section 5(c) hereof or at any annual meeting of stockholders held for the purpose of electing directors, and thereafter at such annual meetings. The right of the holders of shares of this Series to vote together as a class with the holders of shares of any Other Voting Stock shall continue until such time as all dividends accrued on outstanding shares of this Series to the Dividend Payment Date next preceding the date of any such determination shall have been paid in full, or declared and set apart in trust for payment, at which time the right of the holders of shares of this Series so to vote shall terminate, except as herein or by law expressly provided, subject to revesting upon the occurrence of a subsequent default of the character mentioned above. (c) At any time when the right of the holders of shares of this Series to elect directors as provided in Section 5(b) hereof shall have vested, and if such right shall not already have been initially exercised, a proper officer of the Corporation, upon the written request of the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding, addressed to the Secretary of the Corporation, shall call a special meeting of the holders of shares of this Series and of such Other Voting Stock for the purpose of electing directors. Such meeting shall be held at the earliest practicable date upon the same form of notice as is required for annual meetings of stockholders at the place for the holding of annual meetings of stockholders of the Corporation (or such other suitable place as is designated by such officer). If such meeting shall not be called by a proper officer of the Corporation within 20 days after personal service of such written request upon the Secretary of the Corporation, or within 20 days after mailing the same within the United States of America, addressed to the Secretary of the Corporation at its principal office (such mailing to be evidenced by the registry receipt issued by the postal authorities), then the holders of record of at least 10% of the aggregate number of shares of this Series and shares of any Other Voting Stock at the time outstanding may designate in writing one of their number to call such a meeting at the expense of the Corporation, and such meeting may be called by such person so designated upon the same form of notice as is required for annual meetings of stockholders and shall be held at the place for the holding of annual meetings of stockholders of the Corporation (or such other suitable place as is designated by such person). Any holder of shares of this Series so designated shall have access to the registry books of the Corporation for the purpose of causing a meeting of stockholders to be called pursuant to this subsection (c). Notwithstanding anything to the contrary contained in this subsection (c), no such special meeting shall be called during the period within 90 days immediately preceding the date fixed for the next annual meeting of stockholders of the Corporation. (d) At any meeting held for the purpose of electing directors at which holders of shares of this Series shall have the right, voting together as a class with holders of shares of any Other Voting Stock to elect directors as provided in Section 5(b) hereof, the presence, in person or by proxy, of the holders of 33 1/3% of the aggregate number of shares of this Series and shares of such Other Voting Stock at the time outstanding shall be required and be sufficient to constitute a quorum of such class for the election of directors pursuant to such Section 5(b). At any such meeting or adjournment thereof, (i) the absence of a quorum of the shares of this Series and shares of such Other Voting Stock shall not prevent the election of the directors to be elected otherwise than pursuant to Section 5(b) hereof and (ii) in the absence of a quorum, either of the shares of this Series and shares of such Other Voting Stock or of any other shares of stock of the Corporation, or both, a majority of the holders, present in person or by proxy, of the class or classes of stock which lack a quorum shall have the power to adjourn the meeting for the election of directors whom they are entitled to elect, from time to time without notice other than announcement at the meeting, until a quorum shall be present. (e) During any period when the holders of shares of this Series shall have the right to vote together as a class with the holders of shares of any Other Voting Stock for directors as provided in Section 5(b) hereof, (i) the directors so elected by such holders shall continue in office until their successors shall have been elected by such holders or until termination of the rights of such holders to vote as a class for directors and (ii) any vacancies in the Board of Directors shall be filled only by a majority (even if that be only a single director) of the remaining directors theretofore elected by the holders of the class or classes of stock which elected the director whose office shall have become vacant. Immediately upon termination of the right of holders of this Series and any Other Voting Stock to vote as a class for directors, (i) the term of office of the directors so elected shall terminate and (ii) the number of directors shall be such number as may be provided for in the by-laws of the Corporation irrespective of any increase pursuant to the provisions of Section 5(b) hereof. (f) In addition to any other vote required by law, the Corporation shall not (i) amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of the Certificate of Incorporation (including this Certificate of Designations) so as to materially and adversely affect any right, preference, privilege or voting power of this Series or (ii) create, authorize or issue any series or class of stock ranking prior, either as to payment of dividends or distributions of assets upon liquidation, dissolution or winding up, to this Series, without the affirmative vote or consent of the holders of at least two-thirds of the aggregate number of shares of this Series at the time outstanding, voting as a separate class; provided, that any increase in the total number of authorized shares of Class A Common Stock, Special Stock or Preferred Stock, or the creation, authorization or issuance of any series of stock ranking, as to dividends or distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation, on a parity with the shares of this Series will not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers and provided, further, that no class vote of the holders of shares of this Series shall be required if, at or prior to the time when the actions described in clause (i) or (ii) of this Section 5(f) shall become effective, provision is made in accordance with Section 4 hereof for the redemption of all shares of this Series at the time outstanding. 6. Preference upon Liquidation. (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and of dividends and liquidation preferences in respect of any other stock of the Corporation ranking senior to the shares of this Series as to such payments, the holders of shares of this Series shall be entitled to receive, out of the remaining net assets of the Corporation, the Dollar Equivalent Value of 2.0 ounces of gold in cash for each share of this Series, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid on each such share up to the date fixed for distribution, before any distribution shall be made to or set apart for the holders of any Junior Stock. If, after payment or provision for payment of the debts and other liabilities of the Corporation and of dividends and liquidation preferences in respect of any other stock of the Corporation ranking senior to the shares of this Series as to such payments, the remaining net assets of the Corporation are not sufficient to pay to the holders of shares of this Series the full amount of their preference set forth above, then the remaining net assets of the Corporation shall be divided among and paid to the holders of shares of this Series, holders of shares of any other class or series of Preferred Stock, holders of shares of Special Preference Stock and holders of shares of any other stock of the Corporation on a parity with this Series as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation ratably per share in proportion to the full per share amounts to which they respectively are entitled. For purposes of this Section 6(a) and Section 6(b), a consolidation or merger of the Corporation with one or more other Corporations or the sale of all or substantially all of the assets of the Corporation shall not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation. (b) Subject to the rights of the holders of shares of any series or class of stock ranking on a parity as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation, after payment shall have been made in full to the holders of this Series as provided in Section 6(a) and this Section 6(b), the holders of any Junior Stock shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and shares of this Series shall not be entitled to share therein. 7. Taxes. The Corporation will pay any and all documentary, stamp or similar taxes payable to the United States of America or any political subdivision or taxing authority thereof or therein in respect of the issue or delivery of certificates for shares of this Series on redemption of less than all of the shares represented by any certificate for such shares surrendered for redemption or pursuant to a Reserve Coverage Offer; provided, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of certificates for shares of this Series in a name other than that of the holder of shares of this Series to be redeemed or repurchased and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid. The Corporation extends no protection with respect to any other taxes imposed in connection with such redemption or repurchase of shares of this Series. 8. No Other Rights. The shares of this Series shall not have any relative, participating, optional or other special rights and powers other than as set forth herein and other than any which may be provided by law. IN WITNESS WHEREOF, Freeport-McMoRan Copper & Gold Inc. has caused its corporate seal to be hereunto affixed and this Certificate of Designations to be signed by its Vice President as of this 10th day of August, 1993. FREEPORT-McMoRan COPPER & GOLD INC. By: Name: Stephen M. Jones Title: Vice President (CORPORATE SEAL) Attest: By: Name: Michael C. Kilanowski Title: Secretary EX-4.8 7 Exhibit 4.8 FREEPORT-McMoRan COPPER & GOLD INC. and MELLON SECURITIES TRUST COMPANY, As Depositary and HOLDERS OF DEPOSITARY RECEIPTS ____________ DEPOSIT AGREEMENT ____________ Dated as of August 12, 1993 __________________________________________________ TABLE OF CONTENTS Page Parties . . . . . . . . . . . . . . . . . . . . 1 Recitals . . . . . . . . . . . . . . . . . . . 1 ARTICLE I DEFINITIONS "Certificate of Designations" . . . . . . . . . 1 "Certificate of Incorporation" . . . . . . . . 2 "Company" . . . . . . . . . . . . . . . . . . . 2 "Corporate Office" . . . . . . . . . . . . . . 2 "Deposit Agreement" . . . . . . . . . . . . . . 2 "Depositary" . . . . . . . . . . . . . . . . . 2 "Depositary Share" . . . . . . . . . . . . . . 2 "Depositary's Agent" . . . . . . . . . . . . . 2 "New York Office" . . . . . . . . . . . . . . . 2 "Receipt" . . . . . . . . . . . . . . . . . . . 3 "record holder" . . . . . . . . . . . . . . . . 3 "Registrar" . . . . . . . . . . . . . . . . . . 3 "Securities Act" . . . . . . . . . . . . . . . 3 "Stock" . . . . . . . . . . . . . . . . . . . . 3 ARTICLE II FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND REDEMPTION AND REPURCHASE OF RECEIPTS SECTION 2.01 Form and Transfer of Receipts . 3 SECTION 2.02 Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof . . . . . . . 4 SECTION 2.03 Redemption and Repurchase of Stock 5 SECTION 2.04 Register of Transfer of Receipts 8 SECTION 2.05 Combination and Split-ups of Receipts . . . . . . . . . 8 SECTION 2.06 Surrender of Receipts and Withdrawal of Stock . . . . . . . . . . . 8 SECTION 2.07 Limitations on Execution and Delivery, Transfer, Split-up, Combination and Surrender of Receipts and Withdrawal or Deposit of Stock . . . . . . 9 SECTION 2.08 Lost Receipts, etc. . . . . . . . 10 SECTION 2.09 Cancellation and Destruction of Surrendered Receipts . . . . . 10 ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY SECTION 3.01 Filing Proofs, Certificates and Other Information . . . . . . 11 SECTION 3.02 Payment of Taxes or Other Governmental Charges . . . . . 11 SECTION 3.03 Withholding . . . . . . . . . . 11 SECTION 3.04 Representations and Warranties as to Stock . . . . . . . . . 12 ARTICLE IV THE STOCK, NOTICES SECTION 4.01 Cash Distributions . . . . . . . 12 SECTION 4.02 Distributions Other Than Cash . 12 SECTION 4.03 Subscription Rights, Preferences or Privileges . . . . . . . . 13 SECTION 4.04 Notice of Dividends, Fixing of Record Date for Holders of Receipts . 14 SECTION 4.05 Voting Rights . . . . . . . . . 14 SECTION 4.06 Changes Affecting Stock and Reclassifications, Recapitalizations, etc. . . . 15 SECTION 4.07 Reports . . . . . . . . . . . . 15 SECTION 4.08 Lists of Receipt Holders . . . . 16 Page ARTICLE V THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY SECTION 5.01 Maintenance of Offices, Agencies, Transfer Books by the Depositary; the Registrar . . . . . . . . 16 SECTION 5.02 Prevention or Delay in Performance by the Depositary, the Depositary's Agents, the Registrar or the Company . . . . . . . . . . . 17 SECTION 5.03 Obligations of the Depositary, the Depositary's Agents, the Registrar and the Company . . . . . . . 17 SECTION 5.04 Resignation and Removal of the Depositary, Appointment of Successor Depositary . . . . . 19 SECTION 5.05 Corporate Notices and Reports . 20 SECTION 5.06 Deposit of Stock by the Company 21 SECTION 5.07 Indemnification by the Company . 21 SECTION 5.08 Fees, Charges and Expenses . . . 21 ARTICLE VI AMENDMENT AND TERMINATION SECTION 6.01 Amendment . . . . . . . . . . . 22 SECTION 6.02 Termination . . . . . . . . . . 22 ARTICLE VII MISCELLANEOUS SECTION 7.01 Counterparts . . . . . . . . . . 23 SECTION 7.02 Exclusive Benefits of Parties . 23 SECTION 7.03 Invalidity of Provisions . . . . 23 SECTION 7.04 Notices . . . . . . . . . . . . 24 SECTION 7.05 Depositary's Agents . . . . . . 24 SECTION 7.06 Holders of Receipts Are Parties 25 SECTION 7.07 Governing Law . . . . . . . . . 25 SECTION 7.08 Headings . . . . . . . . . . . . 25 TESTIMONIUM . . . . . . . . . . . . . . . . . . 26 SIGNATURES . . . . . . . . . . . . . . . . . . 26 EXHIBIT A . . . . . . . . . . . . . . . . . . . A-1 DEPOSIT AGREEMENT DEPOSIT AGREEMENT, dated as of August 12, 1993 among Freeport-McMoRan Copper & Gold Inc., a Delaware corporation, Mellon Securities Trust Company, a New York Trust Company, as Depositary, and all holders from time to time of Receipts issued hereunder. W I T N E S S E T H: WHEREAS, the Company desires to provide as hereinafter set forth in this Deposit Agreement, for the deposit of shares of the Stock with the Depositary, as agent for the beneficial owners of the Stock, for the purposes set forth in this Deposit Agreement and for the issuance hereunder of the Receipts evidencing Depositary Shares representing an interest in the Stock so deposited; and WHEREAS, the Receipts are to be substantially in the form annexed as Exhibit A to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement. NOW, THEREFORE, in consideration of the premises contained herein, it is agreed by and among the parties hereto as follows: ARTICLE I DEFINITIONS The following definitions shall apply to the respective terms (in the singular and plural forms of such terms) used in this Deposit Agreement and the Receipts: "Certificate of Designations" shall mean the Certificate of Designations establishing and setting forth the rights, preferences, privileges and limitations of the Stock. "Certificate of Incorporation" shall mean the Certificate of Incorporation, as amended and restated from time to time, of the Company. "Company" shall mean Freeport McMoRan Copper & Gold Inc., a Delaware corporation, and its successors. "Corporate Office" shall mean the office of the Depositary in Ridgefield Park, New Jersey at which at any particular time its business in respect of matters governed by this Deposit Agreement shall be administered, which at the date of this Deposit Agreement is located at 85 Challenger Road. "Deposit Agreement" shall mean this agreement, as the same may be amended, modified or supplemented from time to time. "Depositary" shall mean Mellon Securities Trust Company, as Depositary hereunder, and any successor as Depositary hereunder. "Depositary Share" shall mean the rights evidenced by the Receipts executed and delivered hereunder, including the interests in Stock granted to holders of Receipts pursuant to the terms and conditions of the Deposit Agreement. Each Depositary Share shall represent an interest in 0.05 shares of Stock deposited with the Depositary hereunder and the same proportionate interest in any and all other property received by the Depositary in respect of such share of Stock and held under this Deposit Agreement. Subject to the terms of this Deposit Agreement, each record holder of a Receipt evidencing a Depositary Share or Shares is entitled, proportionately, to all the rights, preferences and privileges of the Stock represented by such Depositary Share or Shares, including the dividend, redemption, voting and liquidation rights contained in the Certificate of Designations, and to the benefits of all obligations and duties of the Company in respect of the Stock under the Certificate of Designations and the Certificate of Incorporation. "Depositary's Agent" shall mean an agent appointed by the Depositary as provided, and for the purposes specified, in Section 7.05. "New York Office" shall mean the office maintained by the Depositary in the Borough of Manhattan, The City of New York, which at the date of this Deposit Agreement is located at 120 Broadway. "Receipt" shall mean a Depositary Receipt executed and delivered hereunder, in substantially the form of Exhibit A hereto, evidencing Depositary Share or Shares, as the same may be amended from time to time in accordance with the provisions hereof. "record holder" or "holder" as applied to a Receipt shall mean the person in whose name a Receipt is registered on the books maintained by or on behalf of the Depositary for such purpose. "Registrar" shall mean any bank or trust company appointed to register ownership and transfers of Receipts as herein provided. "Securities Act" shall mean the Securities Act of 1933, as amended. "Stock" shall mean shares of the Company's Gold-Denominated Preferred Stock, par value $0.10 per share. ARTICLE II FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND REDEMPTION AND REPURCHASE OF RECEIPTS SECTION 2.01. Form and Transfer of Receipts. Receipts shall be engraved or printed or lithographed on steel-engraved borders and shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. Receipts shall be executed by the Depositary by the manual signature of a duly authorized officer of the Depositary; provided, however, that such signature may be a facsimile if a Registrar (other than the Depositary) shall have countersigned the Receipts by manual signature of a duly authorized officer of the Registrar. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it shall have been executed as provided in the preceding sentence. The Depositary shall record on its books each Receipt executed as provided above and delivered as hereinafter provided. Receipts bearing the facsimile signature of anyone who was at any time a duly authorized officer of the Depositary shall bind the Depositary, notwithstanding that such officer has ceased to hold such office prior to the delivery of such Receipts. Receipts may be issued in denominations of any number of whole Depositary Shares. All Receipts shall be dated the date of their execution. Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law or regulation or with the rules and regulations of any securities exchange upon which the Stock or the Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date of issuance of the Stock or otherwise. Title to any Receipt (and to the Depositary Shares evidenced by such Receipt) that is properly endorsed or accompanied by a properly executed instrument of transfer shall be transferable by delivery with the same effect as in the case of investment securities in general; provided, however, that the Depositary may, notwithstanding any notice to the contrary, treat the record holder thereof at such time as the absolute owner thereof for the purpose of determining the person entitled to distributions of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes. SECTION 2.02. Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof. Subject to the terms and conditions of this Deposit Agreement, the Company or any holder of Stock may deposit such Stock under this Deposit Agreement by delivery to the Depositary of a certificate or certificates for the Stock to be deposited, properly endorsed or accompanied, if required by the Depositary, by a properly executed instrument of transfer in form satisfactory to the Depositary, together with (i) all such certifications as may be required by the Depositary in accordance with the provisions of this Deposit Agreement and (ii) a written order of the Company or such holder, as the case may be, directing the Depositary to execute and deliver to or upon the written order of the person or persons stated in such order a Receipt or Receipts for the number of Depositary Shares representing such deposited Stock. Upon receipt by the Depositary of a certificate or certificates for Stock to be deposited hereunder, together with the other documents specified above, the Depositary shall, as soon as transfer and registration can be accomplished, present such certificate or certificates to the registrar and transfer agent of the Stock for transfer and registration in the name of the Depositary or its nominee of the Stock being deposited. Deposited Stock shall be held by the Depositary in an account to be established by the Depositary at the Corporate Office. Upon receipt by the Depositary of a certificate or certificates for Stock to be deposited hereunder, together with the other documents specified above, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver, to or upon the order of the person or persons named in the written order delivered to the Depositary referred to in the first paragraph of this Section 2.02, a Receipt or Receipts for the number of whole Depositary Shares representing the Stock so deposited and registered in such name or names as may be requested by such person or persons. The Depositary shall execute and deliver such Receipt or Receipts at the New York Office, except that, at the request, risk and expense of any person requesting such delivery and for the account of such person, such delivery may be made at such other place as may be designated by such person. In each case, delivery will be made only upon payment by such person to the Depositary of all taxes and other governmental charges and any fees payable in connection with such deposit and the transfer of the deposited Stock. The Company shall deliver to the Depositary from time to time such quantities of Receipts as the Depositary may request to enable the Depositary to perform its obligations under this Deposit Agreement. SECTION 2.03. Redemption and Repurchase of Stock. Whenever the Company shall redeem shares of Stock in accordance with the Certificate of Designations, it shall (unless otherwise agreed in writing with the Depositary) give the Depositary in its capacity as Depositary not less than 5 business days' prior notice of the proposed date of the mailing of a notice of redemption of Stock and the simultaneous redemption of the Depositary Shares representing the Stock to be redeemed and of the number of such shares of Stock held by the Depositary to be redeemed. The Depositary shall, as directed by the Company in writing, mail, first class postage prepaid, notice of the redemption of Stock and the proposed simultaneous redemption of the Depositary Shares representing the Stock to be redeemed not less than 30 and not more than 60 days prior to the date fixed for redemption of such Stock and Depositary Shares, to the record holders of the Receipts evidencing the Depositary Shares to be so redeemed at the addresses of such holders as the same appear on the records of the Depositary. Notwithstanding the foregoing, neither failure to mail or publish any such notice to one or more such holders nor any defect in any notice shall affect the sufficiency of the proceedings for redemption. The Company shall provide the Depositary with such notice, and each such notice shall state: the method for determining the amount payable per Depositary Share; the redemption date; the number of Depositary Shares to be redeemed; and shall call upon each holder of Depositary Shares to surrender, on the redemption date and at the place or places designated by the Company, the Receipts evidencing Depositary Shares to be redeemed. On the date of any such redemption the Depositary shall surrender the certificate or certificates held by the Depositary evidencing the number of shares of Stock to be redeemed in the manner specified in the notice of redemption of Stock provided by the Company pursuant to the Certificate of Designations. The Depositary shall, thereafter, redeem the number of Depositary Shares representing such redeemed Stock upon the surrender of Receipts evidencing such Depositary Shares in the manner provided in the notice sent to record holders of Receipts. Notice having been mailed by the Depositary as aforesaid, from and after the redemption date (unless the Company shall have failed to redeem the shares of Stock to be redeemed by it upon the surrender of the certificate or certificates therefor by the Depositary as described in the preceding paragraph), the Depositary Shares called for redemption shall be deemed no longer to be outstanding and all rights of the holders of Receipts evidencing such Depositary Shares (except the right to receive the cash payable upon redemption upon surrender of such Receipts) shall, to the extent of such Depositary Shares, cease and terminate. The foregoing shall be subject further to the terms and conditions of the Certificate of Designations. If fewer than all of the Depositary Shares evidenced by a Receipt are called for redemption, the Depositary will deliver to the holder of such Receipt upon its surrender to the Depositary, together with the redemption price (to be paid in the form of cash) and all accrued and unpaid dividends to and including the date fixed for redemption payable in respect of the Depositary Shares called for redemption, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption. The Depositary shall not be required (a) to issue, transfer or exchange any Receipts for a period beginning at the opening of business 15 days next preceding any selection of Depositary Shares and Stock to be redeemed and ending at the close of business on the day of the mailing of notice of redemption of Depositary Shares or (b) to transfer or exchange for another Receipt any Receipt evidencing Depositary Shares called or being called for redemption, in whole or in part except as provided in the immediately preceding paragraph of this Section 2.03. Whenever the Company shall be required to make an offer to repurchase Depositary Shares representing Stock in accordance with the Certificate of Designations, it shall give the Depositary in its capacity as Depositary not less than 5 business days' prior notice of the required date of the mailing of a notice of the repurchase offer. The Depositary shall, as directed by the Company in writing, mail, first class postage prepaid, notice of the relevant terms of the repurchase offer, as provided by the Company, including: (i) that such notice is being given pursuant to a repurchase offer, (ii) the number of Depositary Shares and Stock for which the offer is being made, (iii) the method for determining the amount payable per Depositary Share, (iv) the last date, which shall not be less than 30 nor more than 60 days after the date of such notice, by which a holder must elect to accept the repurchase offer, (v) the procedures that such holder must follow to exercise its rights and (vi) the procedures for withdrawing an election. The Depositary shall, thereafter, receive from each holder electing to have Depositary Shares repurchased pursuant to the repurchase offer in accordance with the instructions in the notice, the holder's Depositary Share certificates, with an appropriate form duly completed prior to the repurchase date. Holders will be entitled to withdraw an election by a written notice of withdrawal delivered to the Depositary prior to the close of business on the repurchase date. The notice of withdrawal shall state the number of Depositary Shares and the certificate numbers to which the notice of withdrawal relates and the number of Depositary Shares and certificate numbers, if any, which remain subject to election. In case the aggregate number of Depositary Shares offered for repurchase by the holders exceeds the amount of Depositary Shares which the Company has offered to repurchase pursuant to the repurchase offer, the Depositary Shares to be repurchased shall be selected by the Depositary on a pro rata basis at the direction of the Company. The Depositary shall, at the direction of the Company, cause payment to be mailed or delivered to each tendering holder as promptly as reasonably practicable after the repurchase date, in the amount of the repurchase price, and any unpurchased Depositary Shares to be returned to the holder thereof. The foregoing is subject further to the terms and conditions of the Certificate of Designations. SECTION 2.04. Register of Transfer of Receipts. Subject to the terms and conditions of this Deposit Agreement, the Depositary shall register on its books from time to time transfers of Receipts upon any surrender thereof at the Corporate Office, the New York Office or such other office as the Depositary may designate for such purpose, by the record holder in person or by a duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer, together with evidence of the payment of any transfer taxes as may be required by law. Upon such surrender, the Depositary shall execute a new Receipt or Receipts and deliver the same to or upon the order of the person entitled thereto evidencing the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered. SECTION 2.05. Combination and Split-ups of Receipts. Upon surrender of a Receipt or Receipts at the Corporate Office, the New York Office or such other office as the Depositary may designate for the purpose of effecting a split-up or combination of Receipts, subject to the terms and conditions of this Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in the authorized denominations requested evidencing the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered; provided, however, that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share. SECTION 2.06. Surrender of Receipts and Withdrawal of Stock. (a) Except as provided in Section 2.06(b), no holder of a Receipt or Receipts shall have the right to withdraw any of the shares of Stock represented by such Receipts. (b) Notwithstanding Section 2.06(a), the Company shall have the right to withdraw any or all of the Stock (but only in whole shares of Stock) represented by the Depositary Shares and all money and other property, if any, represented by such Depositary Shares by surrendering the Receipt or Receipts evidencing such Depositary Shares at the Corporate Office, the New York Office or at such other office as the Depositary may designate for such withdrawals (and cancellation of the surrendered Receipts as provided in Section 2.09). After such surrender, without unreasonable delay, the Depositary shall deliver to the Company the whole number of shares of Stock and all such money and other property, if any, represented by the Depositary Shares evidenced by the Receipt or Receipts so surrendered for withdrawal. If the Receipt or Receipts delivered by the Company to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares in excess of the number of whole Depositary Shares representing the whole number of shares of Stock to be withdrawn, the Depositary shall at the same time, in addition to such whole number of shares of Stock and such money and other property, if any, to be withdrawn, deliver to the Company, or (subject to Section 2.04) upon its order, a new Receipt or Receipts evidencing such excess number of whole Depositary Shares. Delivery of the Stock and such money and other property being withdrawn may be made by the delivery of such certificates, documents of title and other instruments as the Depositary may deem appropriate, which, if required by the Depositary, shall be properly endorsed or accompanied by proper instruments of transfer. The Depositary shall deliver the Stock and the money and other property, if any, represented by the Depositary Shares evidenced by Receipts surrendered for withdrawal, without unreasonable delay, at the office at which such Receipts were surrendered, except that, at the request, risk and expense of the Company such delivery may be made, without unreasonable delay, at such other place as may be designated by the Company. For purposes of determining the number of Depositary Shares outstanding on any dividend payment date for purposes of Section 4(b) of the Certificate of Designations, the Receipts representing Depositary Shares acquired by the Company on or prior to such dividend payment date and not theretofore delivered to the Depositary for withdrawal and cancellation shall be deemed to be outstanding. SECTION 2.07. Limitations on Execution and Delivery, Transfer, Split-up, Combination and Surrender of Receipts and Withdrawal or Deposit of Stock. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, or surrender of any Receipt, the delivery of any distribution thereon or deposit of Stock, the Depositary, any of the Depositary's Agents or the Company may require any or all of the following: (i) payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to the Stock being deposited or withdrawn or with respect to property of the Company being issued upon redemption); (ii) production of proof satisfactory to it as to the identity and genuineness of any signature; and (iii) compliance with such reasonable regulations, if any, as the Depositary or the Company may establish not inconsistent with the provisions of this Deposit Agreement. The deposit of Stock may be refused, or the registration of transfer, split-up, combination or surrender of outstanding Receipts and the withdrawal of deposited Stock may be suspended (i) during any period when the register of stockholders of the Company is closed, (ii) if any such action is deemed necessary or advisable by the Depositary, any of the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of this Deposit Agreement, or (iii) with the approval of the Company, for any other reason. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any shares of Stock that are required to be registered under the Securities Act unless a registration statement under the Securities Act is in effect as to such shares of Stock. SECTION 2.08. Lost Receipts, etc. In case any Receipt shall be mutilated or destroyed or lost or stolen, the Depositary shall execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt or in lieu of and in substitution for such destroyed, lost or stolen Receipt unless the Depositary has notice that such Receipt has been acquired by a bona fide purchaser; provided, however, that the holder thereof provides the Depositary with (i) evidence satisfactory to the Depositary of such destruction, loss or theft of such Receipt, of the authenticity thereof and of his ownership thereof, (ii) reasonable indemnification satisfactory to the Depositary or the payment of any charges incurred by the Depositary in obtaining insurance in lieu of such indemnification and (iii) payment of any expense (including fees, charges and expenses of the Depositary) in connection with such execution and delivery. SECTION 2.09. Cancellation and Destruction of Surrendered Receipts. All Receipts surrendered to the Depositary or any Depositary's Agent shall be cancelled by the Depositary. Except as prohibited by applicable law or regulation, the Depositary is authorized to destroy such Receipts so canceled. ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY SECTION 3.01. Filing Proofs, Certificates and Other Information. Any person presenting Stock for deposit or any holder of a Receipt may be required from time to time to file such proof of residence or other information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper. The Depositary or the Company may withhold or delay the delivery of any Receipt, the registration of transfer or redemption of any Receipt, the withdrawal of the Stock represented by the Depositary Shares evidenced by any Receipt or the distribution of any dividend or other distribution until such proof or other information is filed, such certificates are executed or such representations and warranties are made. SECTION 3.02. Payment of Taxes or Other Governmental Charges. If any tax or other governmental charge shall become payable by or on behalf of the Depositary with respect to (i) any Receipt, (ii) the Depositary Shares evidenced by such Receipt, (iii) the Stock (or fractional interest therein) or other property represented by such Depositary Shares, or (iv) any transaction referred to in Section 4.06, such tax (including transfer, issuance or acquisition taxes, if any) or governmental charge shall be payable by the holder of such Receipt, who shall pay the amount thereof to the Depositary. Until such payment is made, registration or transfer of any Receipt or any split-up or combination thereof or any withdrawal of the Stock or money or other property, if any, represented by the Depositary Shares evidenced by such Receipt may be refused, any dividend or other distribution may be withheld and any part or all of the Stock or other property represented by the Depositary Shares evidenced by such Receipt may be sold for the account of the holder thereof (after attempting by reasonable means to notify such holder prior to such sale). Any dividend or other distribution so withheld and the proceeds of any such sale may be applied to any payment of such tax or other governmental charge, the holder of such Receipt remaining liable for any deficiency. SECTION 3.03. Withholding. The Depositary shall act as the tax withholding agent for any payments, distributions made with respect to the Depositary Shares and Receipts, and the Stock. The Depositary shall be responsible with respect to the Securities for the timely (i) collection and deposit of any required withholding or backup withholding tax, and (ii) filing of any information returns or other documents with federal (and other applicable) taxing authorities. SECTION 3.04. Representations and Warranties as to Stock. In the case of the initial deposit of the Stock, the Company and, in the case of subsequent deposits thereof, each person so depositing Stock under this Deposit Agreement shall be deemed thereby to represent and warrant that such Stock and each certificate therefor are valid and that the person making such deposit is duly authorized to do so. Such representations and warranties shall survive the deposit of the Stock and the issuance of Receipts therefor. ARTICLE IV THE STOCK, NOTICES SECTION 4.01. Cash Distributions. Whenever the Depositary shall receive any cash dividend or other cash distribution on the Stock, the Depositary shall, subject to Section 3.02, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.04 such amounts of such sum as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; provided, however, that in case the Company or the Depositary shall be required by law to withhold and does withhold from any cash dividend or other cash distribution in respect of the Stock an amount on account of taxes, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any owner of Depositary Shares a fraction of one cent and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next sum received by the Depositary for distribution to record holders of Receipts then outstanding. SECTION 4.02. Distributions Other Than Cash. Whenever the Depositary shall receive any distribution other than cash, rights, preferences or privileges upon the Stock, the Depositary shall, subject to Section 3.02, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.04 such amounts of the securities or property received by it as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders, in any manner that the Depositary and the Company may deem equitable and practicable for accomplishing such distribution. If, in the opinion of the Company after consultation with the Depositary, such distribution cannot be made proportionately among such record holders, or if for any other reason (including any tax withholding or securities law requirement), the Depositary deems, after consultation with the Company, such distribution not to be feasible, the Depositary may, with the approval of the Company which approval shall not be unreasonably withheld, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Section 3.02, be distributed or made available for distribution, as the case may be, by the Depositary to record holders of Receipts as provided by Section 4.01 in the case of a distribution received in cash. SECTION 4.03. Subscription Rights, Preferences or Privileges. If the Company shall at any time offer or cause to be offered to the persons in whose names Stock is registered on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance be made available by the Depositary to the record holders of Receipts in such manner as the Company shall instruct (including by the issue to such record holders of warrants representing such rights, preferences or privileges); provided, however, that (a) if at the time of issue or offer of any such rights, preferences or privileges the Company determines and instructs the Depositary that it is not lawful or feasible to make such rights, preferences or privileges available to some or all holders of Receipts (by the issue of warrants or otherwise) or (b) if and to the extent instructed by holders of Receipts who do not desire to exercise such rights, preferences or privileges, the Depositary shall then, in each case, and if applicable laws or the terms of such rights, preferences or privileges so permit, sell such rights, preferences or privileges of such holders at public or private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall be distributed by the Depositary to the record holders of Receipts entitled thereto as provided by Section 4.01 in the case of a distribution received in cash. If registration under the Securities Act of the securities to which any rights, preferences or privileges relate is required in order for holders of Receipts to be offered or sold such securities, the Company shall promptly file a registration statement pursuant to the Securities Act with respect to such rights, preferences or privileges and securities and use its best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Receipts any right, preference or privilege to subscribe for or to purchase any securities unless and until such registration statement shall have become effective or unless the offering and sale of such securities to such holders are exempt from registration under the provisions of the Securities Act. If any other action under the law of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to holders of Receipts, the Company agrees with the Depositary that the Company will use its reasonable best efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. SECTION 4.04. Notice of Dividends, Fixing of Record Date for Holders of Receipts. Whenever (i) any cash dividend or other cash distribution shall become payable, or any distribution other than cash shall be made, or any rights, preferences or privileges shall at any time be offered, with respect to the Stock, or (ii) the Depositary shall receive notice of any meeting at which holders of Stock are entitled to vote or of which holders of Stock are entitled to notice or any election on the part of the Company to call for the redemption of, any shares of Stock, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Stock) for the determination of the holders of Receipts (x) who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or (y) who shall be entitled to give instructions for the exercise of voting rights at any such meeting or to receive notice of such meeting or of such redemption. SECTION 4.05. Voting Rights. Upon receipt of notice of any meeting at which the holders of Stock are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the record holders of Receipts a notice, which shall be provided by the Company and which shall contain (i) such information as is contained in such notice of meeting, (ii) a statement that the holders of Receipts at the close of business on a specified record date fixed pursuant to Section 4.04 will be entitled, subject to any applicable provision of law, the Certificate of Incorporation or the Certificate of Designations, to instruct the Depositary as to the exercise of the voting rights pertaining to the Stock represented by their respective Depositary Shares and (iii) a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of a Receipt on such record date, the Depositary shall endeavor insofar as practicable to vote or cause to be voted the Stock represented by the Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Company hereby agrees to take all reasonable action that may be deemed necessary by the Depositary in order to enable the Depositary to vote such Stock or cause such Stock to be voted. In the absence of specific instructions from the holder of a Receipt, the Depositary will abstain from voting to the extent of the Stock represented by the Depositary Shares evidenced by such Receipt. SECTION 4.06. Changes Affecting Stock and Reclassifications, Recapitalizations, etc. Upon any split-up, consolidation or any other reclassification of Stock, or upon any recapitalization, reorganization, merger, amalgamation or consolidation affecting the Company or to which it is a party or sale of all or substantially all of the Company's assets, the Depositary shall treat any shares of stock or other securities or property (including cash) that shall be received by the Depositary in exchange for or in respect of the Stock as new deposited property under this Deposit Agreement, and Receipts then outstanding shall thenceforth represent the proportionate interests of holders thereof in the new deposited property so received in exchange for or in respect of such Stock. In any such case the Depositary may, in its discretion, with the approval of the Company, execute and deliver additional Receipts, or may call for the surrender of all outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited property. SECTION 4.07. Reports. The Company or, at the option of the Company, the Depositary shall forward to the holders of Receipts any reports and communications received from the Company that are received by the Depositary as the holder of Stock. SECTION 4.08. Lists of Receipt Holders. Promptly upon request from time to time by the Company, the Depositary shall furnish to it a list, as of a recent date, of the names, addresses and holdings of Depositary Shares of all persons in whose names Receipts are registered on the books of the Depositary. At the expense of the Company, the Company shall have the right to inspect transfer and registration records of the Depositary, any Depositary's Agent or the Registrar, take copies thereof and require the Depositary, any Depositary's Agent or the Registrar to supply copies of such portions of such records as the Company may request. ARTICLE V THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY SECTION 5.01. Maintenance of Offices, Agencies, Transfer Books by the Depositary; the Registrar. Upon execution of this Deposit Agreement in accordance with its terms, the Depositary shall maintain (i) at the New York Office facilities for the execution and delivery, registration, registration of transfer, surrender, split-up, combination and redemption of Receipts and deposit and withdrawal of Stock and (ii) at the Corporate Office and at the offices of the Depositary's Agents, if any, facilities for the delivery, registration, registration of transfer, surrender, split-up, combination, and redemption of Receipts and deposit and withdrawal of Stock, all in accordance with the provisions of this Deposit Agreement. The Depositary, acting as transfer agent and Registrar, shall keep books at the Corporate Office for the registration and transfer of Receipts, which books at all reasonable times shall be open for inspection by the record holders of Receipts; provided that any such holder requesting to exercise such right shall certify to the Depositary that such inspection shall be for a proper purpose reasonably related to such person's interest as an owner of Depositary Shares. The Depositary shall consult with the Company upon receipt of any request for inspection. The Depositary may close such books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder. If the Receipts or the Depositary Shares evidenced thereby or the Stock represented by such Depositary Shares shall be listed on one or more stock exchanges, the Depositary shall, with the approval of the Company, appoint a Registrar for registry of such Receipts or Depositary Shares in accordance with the requirements of such exchange or exchanges. Such Registrar (which may be the Depositary if so permitted by the requirements of such exchange or exchanges) may be removed and a substitute registrar appointed by the Depositary upon the request or with the approval of the Company. In addition, if the Receipts, such Depositary Shares or such Stock are listed on one or more stock exchanges, the Depositary will, at the request of the Company, arrange such facilities for the delivery, registration, registration of transfer, surrender, split-up, combination or redemption of such Receipts, such Depositary Shares or such Stock as may be required by law or applicable stock exchange regulations. SECTION 5.02. Prevention or Delay in Performance by the Depositary, the Depositary's Agents, the Registrar or the Company. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall incur any liability to any holder of any Receipt, if by reason of any provision of any present or future law or regulation thereunder of the United States of America or of any other governmental authority or, in the case of the Depositary, the Registrar or any Depositary's Agent, by reason of any provision, present or future, of the Certificate of Incorporation or the Certificate of Designations or, in the case of the Company, the Depositary, the Registrar or any Depositary's Agent, by reason of any act of God or war or other circumstances beyond the control of the relevant party, the Depositary, any Depositary's Agent, the Registrar or the Company shall be prevented or forbidden from doing or performing any act or thing that the terms of this Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent, the Registrar or the Company incur any liability to any holder of a Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing that the terms of this Deposit Agreement provide shall or may be done or performed, or (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement except, in the case of the Depositary, any Depositary's Agent or the Registrar, if any such exercise or failure to exercise discretion is caused by its negligence or bad faith. SECTION 5.03. Obligations of the Depositary, the Depositary's Agents, the Registrar and the Company. The Company assumes no obligation and shall be subject to no liability under this Deposit Agreement or the Receipts to holders or other persons, except to perform in good faith such obligations as are specifically set forth and undertaken by it to perform in this Deposit Agreement. Each of the Depositary, the Depositary's Agents and the Registrar assumes no obligation and shall be subject to no liability under this Deposit Agreement or the Receipts to holders or other persons, except to perform such obligations as are specifically set forth and undertaken by it to perform in this Deposit Agreement without negligence or bad faith. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding with respect to Stock, Depositary Shares or Receipts that in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall be liable for any action or any failure to act by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Stock for deposit, any holder of a Receipt or any other person believed by it in good faith to be competent to give such advice or information. The Depositary, any Depositary's Agent, the Registrar and the Company may each rely and shall each be protected in acting upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Depositary, the Registrar and any Depositary's Agent may own and deal in any class of securities of the Company and its affiliates and in Receipts or Depositary Shares. The Depositary may also act as transfer agent or registrar of any of the securities of the Company and its affiliates. It is intended that neither the Depositary nor any Depositary's Agent nor the Registrar shall be deemed to be an "issuer" of the Stock, the Depositary Shares, or the Receipts or other securities issued upon exchange or redemption of the Stock under the federal securities laws or applicable state securities laws, it being expressly understood and agreed that the Depositary and any Depositary's Agent and the Registrar are acting only in a ministerial capacity; provided, however, that the Depositary agrees to comply with all information reporting and withholding requirements applicable to it under law or this Deposit Agreement in its capacity as Depositary. Neither the Depositary (or its officers, directors, employees or agents) nor any Depositary's Agent nor the Registrar makes any representation or has any responsibility as to the validity of the Registration Statement pursuant to which the Depositary Shares are registered under the Securities Act, the Stock, the Depositary Shares or any instruments referred to therein or herein, or as to the correctness of any statement made therein or herein; provided, however, that the Depositary is responsible for its representations in this Deposit Agreement. The Depositary assumes no responsibility for the correctness of the description that appears in the Receipts, which can be taken as a statement of the Company summarizing certain provisions of this Deposit Agreement. Notwithstanding any other provision herein or in the Receipts, the Depositary makes no warranties or representations as to the validity, genuineness or sufficiency of any Stock at any time deposited with the Depositary hereunder or of the Depositary Shares, as to the validity or sufficiency of this Deposit Agreement, as to the value of the Depositary Shares or as to any right, title or interest of the record holders of Receipts in and to the Depositary Shares except that the Depositary hereby represents and warrants as follows: (i) the Depositary has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its incorporation, with full power, authority and legal right under such law to execute, deliver and carry out the terms of this Deposit Agreement; (ii) this Deposit Agreement has been duly authorized, executed and delivered by the Depositary; and (iii) this Deposit Agreement constitutes a valid and binding obligation of the Depositary, enforceable against the Depositary in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Depositary shall not be accountable for the use or application by the Company of the Depositary Shares or the Receipts or the proceeds thereof. SECTION 5.04. Resignation and Removal of the Depositary, Appointment of Successor Depositary. The Depositary may at any time resign as Depositary hereunder by written notice via registered mail of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. The Depositary may at any time be removed by the Company by written notice of such removal delivered to the Depositary, such removal to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall, within 60 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor depositary, which shall be a bank or trust company, or an affiliate of a bank or trust company, having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000. If a successor depositary shall not have been appointed in 60 days, the resigning or removed Depositary may petition a court of competent jurisdiction to appoint a successor depositary. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Company, shall promptly execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all rights, title and interest in the Stock and any moneys or property held hereunder to such successor and shall deliver to such successor a list of the record holders of all outstanding Receipts. Any successor depositary shall promptly mail notice of its appointment to the record holders of Receipts. Any corporation into or with which the Depositary may be merged, consolidated or converted shall be the successor of such Depositary without the execution or filing of any document or any further act. Such successor depositary may execute the Receipts either in the name of the predecessor depositary or in the name of the successor depositary. SECTION 5.05. Corporate Notices and Reports. The Company agrees that it will deliver to the Depositary, and the Depositary will, promptly after receipt thereof, transmit to the record holders of Receipts, in each case at the address recorded in the Depositary's books, copies of all notices and reports (including financial statements) required by law, by the rules of any national securities exchange upon which the Stock, the Depositary Shares or the Receipts are listed or by the Certificate of Incorporation and the Certificate of Designations to be furnished by the Company to holders of Stock. Such transmission will be at the Company's expense and the Company will provide the Depositary with such number of copies of such documents as the Depositary may reasonably request. In addition, the Depositary will transmit to the record holders of Receipts at the Company's expense such other documents as may be requested by the Company. SECTION 5.06. Deposit of Stock by the Company. The Company agrees with the Depositary that neither the Company nor any company controlled by the Company will at any time deposit any Stock if such Stock is required to be registered under the provisions of the Securities Act and no registration statement is at such time in effect as to such Stock. SECTION 5.07. Indemnification by the Company. The Company agrees to indemnify the Depositary, any Depositary's Agent and any Registrar against, and hold each of them harmless from, any liability, costs and expenses (including reasonable fees and expenses of counsel) that may arise out of or in connection with its acting as Depositary, Depositary's Agent or Registrar, respectively, under this Deposit Agreement and the Receipts, except for any liability arising out of negligence, bad faith or willful misconduct on the part of any such person or persons. SECTION 5.08. Fees, Charges and Expenses. No fees, charges and expenses of the Depositary or any Depositary's Agent hereunder or of any Registrar shall be payable by any person other than the Company, except for any taxes and other governmental charges and except as provided in this Deposit Agreement. If, at the request of a holder of a Receipt, the Depositary incurs fees, charges or expenses for which it is not otherwise liable hereunder, such holder or other person will be liable for such fees, charges and expenses. All other fees, charges and expenses of the Depositary and any Depositary's Agent hereunder and of any Registrar (including, in each case, reasonable fees and expenses of counsel) incident to the performance of their respective obligations hereunder will be paid from time to time upon consultation and agreement between the Depositary and the Company as to the amount and nature of such fees, charges and expenses. ARTICLE VI AMENDMENT AND TERMINATION SECTION 6.01. Amendment. The form of the Receipts and any provision of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect that they may deem necessary or desirable; provided, however, that no such amendment that shall materially and adversely alter the rights of the holders of Receipts shall be effective as to outstanding Receipts until the expiration of 90 days after notice of such amendment shall have been given to the record holders of outstanding Receipts and unless such amendment shall have been approved by the holders of at least a majority of the Depositary Shares outstanding. In no event shall any amendment impair the right, subject to the provisions of Sections 2.03, 2.06 and 2.07 and Article III, of any owner of any Depositary Shares to surrender the Receipt evidencing such Depositary Shares with instructions to the Depositary to deliver to the holder the Stock and all money and other property, if any, represented thereby, except in order to comply with mandatory provisions of applicable law. SECTION 6.02. Termination. Whenever so directed by the Company, the Depositary will terminate this Deposit Agreement by mailing notice of such termination to the record holders of all Receipts then outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate this Deposit Agreement if at any time 45 days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign and a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.04. If any Receipts shall remain outstanding after the date of termination of this Deposit Agreement, the Depositary thereafter shall discontinue the transfer of Receipts, shall suspend the distribution of dividends to the holders thereof and shall not give any further notices (other than notice of such termination) or perform any further acts under this Deposit Agreement, except as provided below and that the Depositary shall continue to collect dividends and other distributions pertaining to Stock, shall sell rights, preferences or privileges as provided in this Deposit Agreement and shall continue to deliver the Stock and any money and other property represented by Receipts, without liability for interest thereon, upon surrender thereof by the holders thereof. At any time after the expiration of two years from the date of termination, the Depositary may sell Stock then held hereunder at public or private sale, at such places and upon such terms as it deems proper and may thereafter hold in a segregated account the net proceeds of any such sale, together with any money and other property held by it hereunder, without liability for interest, for the benefit, pro rata in accordance with their holdings, of the holders of Receipts that have not heretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement except to account for such net proceeds and money and other property. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary, any Depositary's Agent and any Registrar under Sections 5.07 and 5.08. In the event this Deposit Agreement is terminated, the Company hereby agrees to use its best efforts to list the underlying Stock on the New York Stock Exchange, Inc. ARTICLE VII MISCELLANEOUS SECTION 7.01. Counterparts. This Deposit Agreement may be executed by the Company and the Depositary in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Deposit Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Deposit Agreement. Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary's Agents and shall be open to inspection during business hours at the Corporate Office and the New York Office and the respective offices of the Depositary's Agents, if any, by any holder of a Receipt. SECTION 7.02. Exclusive Benefits of Parties. This Deposit Agreement is for the exclusive benefit of the parties hereto, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. SECTION 7.03. Invalidity of Provisions. In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby. SECTION 7.04. Notices. Any notices to be given to the Company hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to the Company at 1615 Poydras St., New Orleans, Louisiana 70112, Attention: Secretary, or at any other place to which the Company may have transferred its principal executive office. Any notices to be given to the Depositary hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to the Depositary at the Corporate Office. Except as provided in the next paragraph, any notices given to any record holder of a Receipt hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to such record holder at the address of such record holder as it appears on the books of the Depositary or, if such holder shall have filed with the Depositary a written request that notices intended for such holder be mailed to some other address, at the address designated in such request. In addition, whenever the Certificate of Designations requires any notice to be published, the Depositary will, if requested by the Company, cause such notice to be published in the manner directed by the Company. Delivery of a notice sent by mail, or by telegram or telex or telecopier shall be deemed to be effected at the time when a duly addressed letter containing the same (or a duly addressed letter confirming an earlier notice in the case of a telegram or telex or telecopier message) is deposited, postage prepaid, in a post office letter box. The Depositary or the Company may, however, act upon any telegram or telex or telecopier message received by it from the other or from any holder of a Receipt, notwithstanding that such telegram or telex or telecopier message shall not subsequently be confirmed by letter as aforesaid. SECTION 7.05. Depositary's Agents. The Depositary may, with the approval of the Company which approval shall not be unreasonably withheld, from time to time appoint one or more Depositary's Agents to act in any respect for the Depositary for the purposes of this Deposit Agreement and may vary or terminate the appointment of such Depositary's Agents. SECTION 7.06. Holders of Receipts Are Parties. Notwithstanding that holders of Receipts have not executed and delivered this Deposit Agreement or any counterpart thereof, the holders of Receipts from time to time shall be deemed to be parties to this Deposit Agreement and shall be bound by all of the terms and conditions, and be entitled to all of the benefits, hereof and of the Receipts by acceptance of delivery of Receipts. SECTION 7.07. Governing Law. This Deposit Agreement and the Receipts and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, and construed in accordance with, the law of the State of New York without giving effect to principles of conflict of laws. SECTION 7.08. Headings. The headings of articles and sections in this Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as a part of this Deposit Agreement or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts. IN WITNESS WHEREOF, Freeport-McMoRan Copper & Gold Inc. and Mellon Securities Trust Company have duly executed this Deposit Agreement as of the day and year first above set forth and all holders of Receipts shall become parties hereto by and upon acceptance by them of delivery of Receipts issued in accordance with the terms hereof. FREEPORT-McMoRan COPPER & GOLD INC. Attest: By:_______________________ By:_______________________ Authorized Officer MELLON SECURITIES TRUST COMPANY Attest: By:_______________________ By:_______________________ Authorized Officer EXHIBIT A DEPOSITARY RECEIPT FOR DEPOSITARY SHARES EACH REPRESENTING ______________ (OF A) SHARE OF (Preferred STOCK) OF FREEPORT-McMoRan COPPER & GOLD INC. (Incorporated under the Laws of the State of Delaware) No. Mellon Securities Trust Company (the "Depositary") hereby certifies that ______________ is the registered owner of _______________ Depositary Shares (the "Depositary Shares"), each Depositary Share representing __________ of a share of (Preferred Stock), $0.10 par value (the "Stock"), of Freeport- McMoRan Copper & Gold Inc., a corporation duly organized and existing under the laws of the State of Delaware (the "Company"), deposited with the Depositary and the same proportionate interest in any and all other property received by the Depositary in respect of such shares of Stock and held by the Depositary under the Deposit Agreement (as defined below). Subject to the terms of the Deposit Agreement, each owner of a Depositary Share is entitled, proportionately, to all the rights, preferences and privileges of the Stock represented thereby, including the dividend, conversion, exchange, voting, liquidation and other rights contained in the Certificate of Designations establishing the rights, preferences, privileges and limitations of the Stock (the "Certificate of Designations"), copies of which are on file at the office of the Depositary at which at any particular time its business in respect of matters governed by the Deposit Agreement shall be administered, which at the time of the execution of the Deposit Agreement is located at __________________________ (the "Corporate Office"). This Depositary Receipt ("Receipt") shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose unless this Receipt shall have been executed manually or, if a Registrar for the Receipts (other than the Depositary) shall have been appointed, by facsimile by the Depositary by the signature of a duly authorized officer and, if executed by facsimile signature of the Depositary, shall have been countersigned manually by such Registrar by the signature of a duly authorized officer. THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED STOCK. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY STOCK AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE DEPOSITARY SHARES, AS TO THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT, AS TO THE VALUE OF THE DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD HOLDERS OF THE DEPOSITARY RECEIPTS IN AND TO THE DEPOSITARY SHARES. The Company will furnish to any holder of this Receipt without charge, upon request addressed to its executive office, a full statement of the designation, relative rights, preferences and limitations of the shares of each authorized class, and of each class of preferred stock authorized to be issued, so far as the same may have been fixed, and a statement of the authority of the Board of Directors of the Company to designate and fix the relative rights, preferences and limitations of other classes. This Receipt is continued on the reverse hereof and the additional provisions therein set forth for all purposes have the same effect as if set forth at this place. Dated: MELLON SECURITIES TRUST COMPANY, as Depositary and Registrar By:____________________________ Authorized Officer Further Conditions and Agreements Forming Part of this Receipt Appear on the Reverse Side. (FORM OF REVERSE OF DEPOSITARY RECEIPT) 1. The Deposit Agreement. Depositary Receipts (the "Receipts"), of which this Receipt is one, are made available upon the terms and conditions set forth in the Deposit Agreement, dated as of ___________ (the "Deposit Agreement"), among the Company, the Depositary and all holders from time to time of Receipts. The Deposit Agreement (copies of which are on file at the Corporate Office, the office maintained by the Depositary in the Borough of Manhattan, the City of New York which at the time of the execution of the Deposit Agreement is located at __________________ (the "New York Office") and at the office of any agent of the Depositary) sets forth the rights of holders of Receipts and the rights and duties of the Depositary. The statements made on the face and the reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are subject to the detailed provisions thereof, to which reference is hereby made. In the event of any conflict between the provisions of this Receipt and the provisions of the Deposit Agreement, the provisions of the Deposit Agreement will govern. 2. Definitions. Unless otherwise expressly herein provided, all defined terms used herein shall have the meanings ascribed thereto in the Deposit Agreement. 3. Redemption by the Company; Repurchase by the Company. Whenever the Company shall redeem shares of Stock in accordance with the Certificate of Designations, it shall (unless otherwise agreed in writing with the Depositary) give the Depositary in its capacity as Depositary not less than 5 business days' prior notice of the proposed date of the mailing of a notice or redemption and the simultaneous redemption of the Depositary shares representing the Stock to be redeemed and of the number of such shares of Stock held by the Depositary to be redeemed. The Depositary shall, as directed by the Company in writing, mail, first class postage prepaid, notice of the redemption, and the proposed simultaneous, redemption of Depositary Shares representing the Stock to be redeemed, not less than 30 and not more than 60 days prior to the date fixed for redemption of such Stock and Depositary Shares, to the record holders of the Receipts evidencing the Depositary Shares to be so redeemed, at the addresses of such holders as the same appear on the records of such holders as the same appear on the records of the Depositary. On the date of any such redemption the Depositary shall surrender the certificate or certificates held by the Depositary evidencing the number of shares of Stock to be redeemed in the manner specified in the notice of redemption. The Depositary shall, thereafter, redeem the number of Depositary shares representing such redeemed Stock upon the surrender of Receipts evidencing such Depositary Shares in the manner provided in the notice sent to record holders of Receipts. Notice having been mailed and published as aforesaid, from and after the redemption date (unless the Company shall have failed to redeem the shares of Stock to be redeemed by it upon the surrender of the certificate or certificates therefor by the Depositary as described above), the Depositary Shares called for redemption shall be deemed no longer to be outstanding and all rights of the holders of Receipts evidencing such Depositary Shares shall, to the extent of such Depositary Shares, cease and terminate. Whenever the Company shall be required to make a repurchase of Depositary Shares in accordance with the Certificate of Designations, it shall give the Depositary in its capacity as Depositary not less than 5 business days' prior notice of the required date of the mailing of a notice of the repurchase offer. The Depositary shall, as directed by the Company in writing, mail, first class postage prepaid, notice of the relevant terms and conditions of the repurchase offer, as provided by the Company, to the record holders of the Receipts evidencing the Depositary Shares to be repurchased by the Company, at the addresses of such holders as the same appear on the records of the Depositary. The Depositary shall, thereafter, collect any notices, guarantees and Receipts evidencing the Depositary Shares from the holders in the manner provided for in the notice sent to the holders from the Company. In case the aggregate number of Depositary Shares exceeds the amount the Company is required to repurchase, the Depositary Shares to be repurchased shall be selected by the Depositary on a pro rata basis at the direction of the Company. The foregoing is subject further to the terms and conditions of the Certificate of Designations. 4. Withdrawal of Stock Not Permitted. Holders of Receipts are not entitled to receive any of the shares of Stock represented by such Receipts. 5. Transfers, Split-ups, Combinations. Subject to Paragraphs 6, 7 and 8 below, this Receipt is transferable on the books of the Depositary upon surrender of this Receipt to the Depositary at the Corporate Office or the New York Office, or at such other offices as the Depositary may designate, properly endorsed or accompanied by a properly executed instrument of transfer, and upon such transfer the Depositary shall sign and deliver a Receipt or Receipts to or upon the order of the person entitled thereto, all as provided in and subject to the Deposit Agreement. This Receipt may be split into other Receipts or combined with other Receipts into one Receipt evidencing the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered; provided, however, that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share. 6. Conditions to Signing and Delivery, Transfer, etc., of Receipts. Prior to the execution and delivery, registration of transfer, split-up, combination, surrender or exchange of this Receipt, the delivery of any distribution hereon, the Depositary, any of the Depositary's Agents or the Company may require any or all of the following: (i) payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to Stock being deposited or withdrawn or with respect to other securities or property of the Company being issued upon redemption); (ii) production of proof satisfactory to it as to the identity and genuineness of any signature; and (iii) compliance with such reasonable regulations, if any, as the Depositary or the Company may establish not inconsistent with the Deposit Agreement. Any person presenting Stock for deposit, or any holder of this Receipt, may be required to file such proof of information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper. The Depositary or the Company may withhold or delay the delivery of this Receipt, the registration of transfer, redemption, or exchange of this Receipt, the withdrawal of the Stock represented by the Depositary Shares evidenced by this Receipt or the distribution of any dividend or other distribution until such proof or other information is filed, such certificates are executed or such representations and warranties are made. 7. Suspension of Delivery, Transfer, etc. The registration of transfer, split-up, combination, surrender or exchange of this Receipt may be suspended (i) during any period when the register of stockholders of the Company is closed, (ii) if any such action is deemed necessary or advisable by the Depositary, any of the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement, or (iii) with the approval of the Company, for any other reason. The Depositary shall not be required to issue, transfer or exchange any Receipts for a period beginning at the opening of business 15 days next preceding any selection of Depositary Shares and Stock to be redeemed and ending at the close of business on the day of the mailing of notice of redemption of Depositary Shares. 8. Payment of Taxes or Other Governmental Charges. If any tax or other governmental charge shall become payable by or on behalf of the Depositary with respect to (i) this Receipt, (ii) the Depositary Shares evidenced by this Receipt, (iii) the Stock (or fractional interest therein) or other property represented by such Depositary Shares, or (iv) any transaction referred to in Section 4.06, of the Deposit Agreement, such tax (including transfer, issuance or acquisition taxes, if any) or governmental charge shall be payable by the holder of this Receipt, who shall pay the amount thereof to the Depositary. Until such payment is made, registration of transfer of this Receipt or any split-up or combination hereof or any withdrawal of the Stock or money or other property, if any, represented by the Depositary Shares evidenced by this Receipt may be refused, any dividend or other distribution may be withheld and any part or all of the Stock or other property represented by the Depositary Shares evidenced by this Receipt may be sold for the account of the holder hereof (after attempting by reasonable means to notify such holder prior to such sale). Any dividend or other distribution so withheld and the proceeds of any such sale may be applied to any payment of such tax or other governmental charge, the holder of this Receipt remaining liable for any deficiency. 9. Amendment. The form of the Receipts and any provision of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect that they may deem necessary or desirable; provided, however, that no such amendment that shall materially and adversely alter the rights of the holders of Receipt shall be effective as to outstanding Receipts until the expiration of 90 days after notice of such amendment shall have been given to the record holders of outstanding Receipts and unless such amendment shall have been approved by the holders of at least a majority of the Depositary Shares outstanding. Every holder of an outstanding Receipt at the time 90 days after such notice of amendment shall have been given shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right, subject to the provisions of Paragraphs 3, 4 6, 7, and 8 hereof and of Sections 2.03, 2.06 and 2.07 and Article III of the Deposit Agreement, of the owner of the Depositary Shares evidenced by this Receipt to surrender this Receipt with instructions to the Depositary to deliver to the holder the Stock and all money and other property, if any, represented thereby, except in order to comply with mandatory provisions of applicable law. 10. Fees, Charges and Expenses. The Company will pay all fees, charges and expenses of the Depositary, except for taxes (including transfer taxes, if any) and other governmental charges and such charges as are expressly provided in the Deposit Agreement to be at the expense of persons depositing Stock, holders of Receipts or other persons. 11. Title to Receipts. It is a condition of this Receipt, and every successive holder hereof by accepting or holding the same consents and agrees, that title to this Receipt (and to the Depositary Shares evidenced hereby), when properly endorsed or accompanied by a properly executed instrument of transfer, is transferable by delivery with the same effect as in the case of investment securities in general; provided, however, that the Depositary may, notwithstanding any notice to the contrary, treat the record holder hereof at such time as the absolute owner hereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement and for all other purposes. 12. Dividends and Distributions. Whenever the Depositary shall receive any cash dividend or other cash distribution on the Stock, the Depositary shall, subject to the provisions of the Deposit Agreement, distribute to record holders of Receipts such amounts of such sums as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; provided, however, that in case the Company or the Depositary shall be required by law to withhold and does withhold from any cash dividend or other cash distribution in respect of the Stock an amount on account of taxes, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any owner of Depositary Shares a fraction of one cent and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next sum received by the Depositary for distribution to record holders of Receipts then outstanding. 13. Subscription Rights, Preferences or Privileges. If the Company shall at any time offer or cause to be offered to the persons in whose name Stock is registered on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance, subject to the provisions of the Deposit Agreement, be made available by the Depositary to the record holders of Receipts in such manner as the Company shall instruct. 14. Notice of Dividends, Fixing of Record Date. Whenever (i) any cash dividend or other cash distribution shall become payable, or any distribution other than cash shall be made, or any rights, preferences or privileges shall at any time be offered, with respect to the Stock, or (ii) the Depositary shall receive notice of any meeting at which holders of Stock are entitled to vote or of which holders of Stock are entitled to notice, or of the mandatory conversion of, or any election on the part of the Company to call for redemption or exchange of, any shares of Stock, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Stock) for the determination of the holders of Receipts (x) who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or (y) who shall be entitled to give instructions for the exercise of voting rights at any such meeting or of such meeting or to receive notice of such conversion, exchange or redemption. 15. Voting Rights. Upon receipt of notice of any meeting at which the holders of Stock are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the record holders of Receipts a notice, which shall contain (i) such information as is contained in such notice of meeting, (ii) a statement that the holders of Receipts at the close of business on a specified record date determined as provided in Paragraph 14 will be entitled, subject to any applicable provision of law, the Certificate of Incorporation or the Certificate of Designations, to instruct the Depositary as to the exercise of the voting rights pertaining to the Stock represented by their respective Depositary Shares, and (iii) a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of this Receipt on such record date the Depositary shall endeavor insofar as practicable to vote or cause to be voted the Stock represented by the Depositary Shares evidenced by this Receipt in accordance with the instructions set forth in such request. The Company hereby agrees to take all reasonable action that may be deemed necessary by the Depositary in order to enable the Depositary to vote such Stock or cause such Stock to be voted. In the absence of specific instructions from the holder of this Receipt, the Depositary will abstain from voting to the extent of the Stock represented by the Depositary Shares evidenced by this Receipt. 16. Reports, Inspection of Transfer Books. The Depositary shall make available for inspection by holders of Receipts at the Corporate Office, the New York Office and at such other places as it may from time to time deem advisable during normal business hours any reports and communications received from the Company that are received by the Depositary as the holder of Stock. The Depositary, acting as transfer agent and Registrar, shall keep books at the Corporate Office for the registration and transfer of Receipts, which books at all reasonable times will be open for inspection by the record holders of Receipts; provided that any such holder requesting to exercise such right shall certify to the Depositary that such inspection shall be for a proper purpose reasonably related to such person's interest as an owner of Depositary Shares. 17. Liability of the Depositary, the Depositary's Agents, the Registrar and the Company. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall incur any liability to any holder of this Receipt, if by reason of any provision of any present or future law or regulation thereunder of any governmental authority or, in the case of the Depositary, the Registrar or any Depositary's Agent, by reason of any provision present or future, of the Certificate of Incorporation or the Certificate of Designations or, in the case of the Company, the Depositary, the Registrar or any Depositary's Agent, by reason of any act of God or war or other circumstances beyond the control of the relevant party, the Depositary, any Depositary's Agent, the Registrar or the Company shall be prevented or forbidden from doing or performing any act or thing that the terms of the Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent, the Registrar or the Company incur any liability to any holder of this Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing that the terms of the Deposit Agreement provide shall or may be done or performed or (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement except, in the case of the Depositary, any Depositary's Agent or the Registrar, if such exercise or failure to exercise discretion is caused by its negligence or bad faith. 18. Obligations of the Depositary, the Depositary's Agent, the Registrar and the Company. The Company assumes no obligation and shall be subject to no liability under the Deposit Agreement or this Receipt to the holder hereof or other persons, except to perform in good faith such obligations as are specifically set forth and undertaken by it to perform in the Deposit Agreement. Each of the Depositary, the Depositary's Agents and the Registrar assumes no obligation and shall be subject to no liability under the Deposit Agreement or this Receipt to the holder hereof or other persons, except to perform such obligations as are specifically set forth and undertaken by it to perform in the Deposit Agreement without negligence or bad faith. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding with respect to Stock, Depositary Shares or Receipts or Common Stock that in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company will be liable for any action or failure to act by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Stock for deposit, any holder of this Receipt or any other person believed by it in good faith to be competent to give such advice or information. 19 Termination of Deposit Agreement. Whenever so directed by the Company, the Depositary will terminate the Deposit Agreement by mailing notice of such termination to the record holders of all Receipts then outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement if at any time 90 days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign and a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.04 of the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations thereunder except for its obligations to the Depositary, any Depositary's Agent and any Registrar under Sections 5.07 and 5.08 of the Deposit Agreement. If any Receipts remain outstanding after the date of termination of the Deposit Agreement, the Depositary thereafter shall discontinue all functions and be discharged from all obligations as provided in the Deposit Agreement, except as specifically provided therein. 20. Governing Law. The Deposit Agreement and this Receipt and all rights thereunder and hereunder and provisions thereof and hereof shall be governed by, and construed in accordance with, the law of the State of New York without giving effect to principles of conflict of laws. FORM OF ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the within Receipt and all rights and interests represented by the Depositary Shares evidenced thereby, and hereby irrevocably constitutes and appoints his attorney, to transfer the same on the books of the within-named Depositary, with full power of substitution in the premises. Dated: Signature:____________________________ NOTE: The signature to this assignment must correspond with the name as written upon the face of the Receipt in every particular, without alteration or enlargement, or any change whatever. EX-4.9 8 Exhibit 4.9 NOT MORE DEPOSITARY RECEIPT NOT MORE MORE MORE THAN 100,000 FOR DEPOSITARY SHARES, THAN 100,000 SHARES EACH REPRESENTING SHARES 0.05 OF A SHARE OF NUMBER GOLD-DENOMINATED FCXG PREFERRED STOCK DEPOSITARY SHARES OF SEE REVERSE FOR CERTAIN DEFINITIONS CUSIP 35671D 60 0 FREEPORT-MCMORAN COPPER & GOLD INC. (incorporated under the laws of the State of Delaware) Mellon Securities Trust Company (the "Depositary") hereby certifies that is the registered owner of Depositary Shares (the "Depositary Shares"), each Depositary Share representing 0.05 of a share of Gold-Denominated Preferred Stock, $0.10 par value (the "Stock"), of Freeport-McMoRan Copper & Gold Inc., a corporation duly organized and existing under the laws of the State of Delaware (the "Company"), deposited with the Depositary and the same proportionate interest in any and all other property received by the Depositary in respect of such shares of Stock and held by the Depositary under the Deposit Agreement (as defined below). Subject to the terms of the Deposit Agreement, each owner of a Depositary Share is entitled, proportionately, to all the rights, preferences and privileges of the Stock represented thereby, including the dividend, redemption, voting, liquidation and other rights contained in the Certificate of Designations establishing the rights, preferences, privileges and limitations of the Stock (the "Certificate of Designations"), copies of which are on file at the office of the Depositary at which at any particular time its business in respect of matters governed by the Deposit Agreement shall be administered, which at the time of the execution of the Deposit Agreement is located at the Depositary's corporate trust office in the Borough of Manhattan in the City of New York (the "New York City Office"). This Depositary Receipt ("Receipt") shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose unless this Receipt shall have been executed manually or, if a Registrar for the Receipts (other than the Depositary) shall have been appointed, by facsimile by the Depositary by the signature of a duly authorized officer and, if executed by facsimile signature of the Depositary, shall have been countersigned manually by such Registrar by the signature of a duly authorized officer. THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED STOCK. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY STOCK AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE DEPOSITARY SHARES, AS TO THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT, AS TO THE VALUE OF THE DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD HOLDERS OF THE DEPOSITARY RECEIPTS IN AND TO THE DEPOSITARY SHARES. The Company will furnish to any holder of this Receipt, without charge, upon request addressed to its executive office, a full statement of the designation, relative rights, preferences and limitations of the shares of each authorized class, and of each class of preferred stock authorized to be issued, so far as the same may have been fixed, and a statement of the authority of the Board of Directors of the Company to designate and by the relative rights, preferences and limitations of other classes. This Receipt is continued on the reverse hereof and the additional provisions therein set forth for all purposes have the same effect as if set forth at this place. Dated: MELLON SECURITIES TRUST COMPANY, as Depositary, Transfer Agent and Registrar By: Authorized Officer FURTHER CONDITIONS AND AGREEMENTS FORMING PART OF THIS RECEIPT 1. The Deposit Agreement. Depositary Receipts (the "Receipts"), of which this Receipt is one, are made available upon the terms and conditions set forth in the Deposit Agreement, dated as of August 12, 1993 (the "Deposit Agreement"), among the Company, the Depositary and all holders from time to time of Receipts. The Deposit Agreement (copies of which are on file at the office of the Depositary in Ridgefield Park, New Jersey, located at 85 Challenger Road (the "Corporate Office"), in the New York City Office and at the office of any agent of the Depositary) sets forth the rights of certain provisions of the Deposit Agreement and are subject to the detailed provisions thereof, to which reference is hereby made. In the event of any conflict between the provisions of this Receipt and the provisions of the Deposit Agreement, the provisions of the Deposit Agreement will govern. 2. Definitions. Unless otherwise expressly herein provided, all defined terms used herein shall have the meanings ascribed thereto in the Deposit Agreement. 3. Redemption by the Company; Repurchase by the Company. Whenever the Company shall redeem shares of Stock in accordance with the Certificate of Designation, it shall (unless otherwise agreed in writing with the Depositary) give the Depositary in its capacity as Depositary not less than 5 business days' prior notice of the proposed date of the mailing of a notice of redemption and the simultaneous redemption of the Deposit Shares representing the Stock to be redeemed and of the number of such shares of Stock held by the Depositary to be redeemed. The Depositary shall, as directed by the Company in writing, mail, first class postage prepaid, notice of the redemption of stock and the proposed simultaneous, redemption of Depositary Shares, to the record holders of the Receipts evidencing the Depositary Shares to be so redeemed, at the addresses of such holders as the same appear on the records of the Depositary. On the date of any such redemption, the Depositary shall surrender the certificate or certificates held by the Depositary evidencing the number of shares of stock to be redeemed in the manner specified in the notice of redemption. The Depositary shall, thereafter, redeem the number of Depositary Shares representing such redeemed Stock upon the surrender of Receipts evidencing such Depositary Shares in the manner provided in the notice sent to record holders of Receipts. Notice having been mailed as aforesaid, from and after the redemption date (unless the Company shall have failed to redeem the shares of Stock to be redeemed by it upon the surrender of the certificate or certificates therefor by the Depositary as described above), the Depositary Shares called for redemption shall be deemed no longer to be outstanding and all rights of the holders of Receipts evidencing such Depositary Shares (except the right to receive the cash, if any, payable upon redemption upon surrender of such Receipts) shall, to the extent of such Depositary Shares, cease and terminate. The foregoing is subject further to the terms and conditions of the Certificate of Designations. Whenever the Company shall be required to make a repurchase of Depositary Shares in accordance with the Certificate of Designations, it shall give the Depositary in its capacity as Depositary not less than 5 business days' prior notice of the required date of the mailing of a notice of the repurchase offer. The Depositary shall, as directed by the Company in writing, mail, first class postage prepaid, notice of the relevant terms and conditions of the repurchase offer, as provided by the Company, to the record holders of the Receipts evidencing the Depositary Shares to be repurchased by the Company, at the addresses of such holders as the same appear on the records of the Depositary. The Depositary shall, thereafter, collect any notices, guarantees and Receipts evidencing the Depositary Shares from the holders in the manner provided in the notice sent to the holders from the Company. In case the aggregate number of Depositary Shares exceeds the amount the Company is required to repurchase, the Depositary Shares to be repurchased shall be selected by the Depositary on a pro rata basis at the direction of the Company. The foregoing is subject further to the terms and conditions of the Certificate of Designations. 4. Withdrawal of Stock not Permitted. Holders of Receipts are not entitled to receive any of the shares of Stock represented by such Receipts. 5. Transfers, Split-ups, Combinations. Subject to Paragraphs 6, 7 and 8 below, this Receipt is transferable on the books of the Depositary upon surrender of this Receipt to the Depositary at the Corporate Office or the New York Office, or at such other offices as the Depositary shall sign and deliver a Receipt or Receipts to or upon the order of the person entitled thereto, all as provided in and subject to the Deposit Agreement. This Receipt may be split into other Receipts or combined with other Receipts into one Receipt evidencing the same aggregate umber of Depositary Shares evidenced by the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered; provided, however, that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share. 6. Conditions to Signing and Delivery, Transfer, etc. of Receipts. Prior to the execution and delivery, registration of transfer, split-up, combination, surrender or exchange of this Receipt or the delivery of any distribution hereon, the Depositary, any of the Depositary's Agents or the Company may require any or all of the following: (i) payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to Stock being deposited or withdrawn or with respect to other securities or property of the Company being issued upon redemption); (ii) production of proof satisfactory to it as to the identity and genuineness of any signature; and (iii) compliance with such reasonable regulations, if any, as the Depositary or the Company may establish not inconsistent with the Deposit Agreement. Any person presenting Stock for deposit, or any holder of this Receipt, may be required to file such proof of information, to execute such certificates and to make such representations and warranties of this Receipt, the registration of transfer, redemption or conversion of this Receipt or the distribution of any dividend or other distribution until such proof or other information is filed, such certificates are executed or such representations and warranties are made. 7. Suspension of Delivery, Transfer, etc. The registration of transfer, split-up, combination, surrender or exchange of this Receipt may be suspended (i) during any period when the register of stockholders of the Company is closed, (ii) if any such action is deemed necessary or advisable by the Depositary, any of the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement, or (iii) with the approval of the Company, for any other reason. The Depositary shall not be required (a) to issue, transfer or exchange any Receipts for a period beginning at the opening of business 15 days next preceding any selection of Depositary Shares and Stock to be redeemed and ending at the close of business on the day of the mailing of notice of redemption of Depositary Shares or (b) to transfer or exchange for another Receipt any Receipt evidencing Depositary Shares called or being called for redemption, in whole or in part, subject to conversion except as provided in the last sentence of Paragraph 3. 8. Payment of Taxes or Other Governmental Charges. If any tax or other governmental charge shall become payable by or on behalf of the Depositary with respect to (i) this Receipt, (ii) the Depositary Shares evidenced by this Receipt, (iii) the Stock (or fractional interest therein) or other property represented by such Depositary Shares, or (iv) any transaction referred to in Section 4.06 of the Deposit Agreement, such tax (including transfer, issuance or acquisition taxes, if any, or governmental charge shall be payable by the holder of this Receipt, who shall pay the amount thereof to the Depositary. Until such payment is made, registration or transfer of this Receipt or any split-up 9. Amendment. The form of the Receipts and any provision of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect that they may deem necessary or desirable, provided, however, that no such amendment that shall materially or adversely alter the rights of the holders of Receipts shall be effective as to outstanding Receipts until the expiration of 90 days after notice of such amendment shall have been given to the recorded holders of outstanding Receipts and unless such amendment shall have been approved by the holders of at least a majority of the Depositary Shares outstanding. Every holder of an outstanding Receipt at the time 90 days after such notice of amendment shall have been given shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. 10. Fees, Charges and Expenses. The Company will pay all fees, charges and expenses of the Depositary, except for taxes (including transfer taxes, if any) and other governmental charges and such charges as are expressly provided in the Deposit Agreement to be at the expense of persons depositing Stock, holders of Receipts or other persons. 11. Title to Receipts. It is a condition of this Receipt, and every successive holder hereof by accepting or holding the same consents and agrees, that title to this Receipt (and to the Depositary Shares evidenced hereby), when properly endorsed or accompanied by a property executed instrument of transfer, is transferable by delivery with the same effect as in the case of investment securities in general; provided however that the Depositary may, notwithstanding any notice to the contrary, treat the record holder hereof at such time as the absolute owner hereof for the for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement and for all other purposes. 12. Dividends and Distributions. Whenever the Depositary shall receive any cash dividend or other cash distribution on the Stock, the Depositary shall, subject to the provisions of the Deposit Agreement, distribute to record holders of Receipts such amounts of such sums as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; provided however, that in case the Company or the Depositary shall be required by law to withhold and does withhold from any cash dividend or other cash distribution in respect of the Stock an amount on account of taxes, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any owner of Depositary Shares a fraction of once cent and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next sum received by the Depositary for distribution to record holders of Receipts then outstanding. 13. Subscription Rights, Preferences or Privileges. If the Company shall at any time offer or cause to be offered to the persons in whose name Stock is registered on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance, subject to the provisions of the Deposit Agreement, be made available by the Depositary to the record holders of Receipts in such manner as the Company shall instruct. 14. Notice of Dividends, Fixing of Record Date. Whenever (i) any cash dividend or other cash distribution shall become payable, or any distribution other than cash shall be made, or any rights, preferences or privileges shall at any time be offered, with respect to the Stock, or (ii) the Depositary shall receive notice of any meeting at which holders of Stock are entitled to vote or of which holders of Stock are entitled to notice, or of the mandatory conversion of, or any election on the part of the Company to call for redemption of, any shares of Stock, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Stock) for the determination of the holders of Receipts (x) who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or (y) who shall be entitled to give instructions for the exercise of voting rights at any such meeting or of such meeting or to receive note of such redemption. 15. Voting Rights. Upon receipt of notice of any meeting at which the holders of Stock are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the record holders of Receipts a notice, which shall contain (i) such information as is contained in such notice of meeting, (ii) a statement that the holders of Receipts at the close of business on a specified record date determined as provided in Paragraph 14 will be entitled, subject to any applicable provision of law, the Certificate of Incorporation or the Certificate of Designations, to instruct the Depositary as to the exercise of the voting rights pertaining to the Stock represented by their respective Depositary Shares, and (iii) a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of this Receipt on such record date the Depositary shall endeavor insofar as practicable to vote or cause to be voted the Stock represented by the Depositary Shares evidenced by this Receipt in accordance with the instructions set forth in such request. The Company hereby agrees to take all reasonable action that may be deemed necessary by the Depositary in order to enable the Depositary to vote such Stock or cause such Stock to be voted. In the absence of specific instructions from the holder of this Receipt, the Depositary will abstain from voting to the extent of the Stock represented by the Depositary Shares evidenced by this Receipt. 16. Reports, Inspection of Transfer Books. The Depositary shall make available for inspection by holders of Receipts of the Corporate Office, the New York City Office and at such other places as it may from time to time deem advisable during normal business hours any reports and communications received from the Company that are received by the Depositary as the holder of Stock. The Depositary, acting as transfer agent and Registrar, shall keep books at the Corporate Office for the registration and transfer of Receipts, which books at all reasonable times will be open for inspection by the record holders of Receipts; provided that any such holder requesting to exercise such right shall certify to the Depositary that such inspection shall be for a proper purpose reasonably related to such persons, interest as an owner of Depositary Shares. 17. Liability of the Depositary, the Depositary's Agents, the Registrar and the Company. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall incur any liability to any holder of this Receipt, if by reason of any provision of any present or future law or regulation thereunder of any governmental authority or, in the case of the Depositary, the Registrar or any Depositary's Agent, by reason of any provision, present or future, of the Certificate of Incorporation or the Certificate of Designations or, in the case of the Company, the Depositary, the Registrar or any Depositary's Agent, by reason of any act of God or war or other circumstances beyond the control of the relevant party, the Depositary, any Depositary's Agent, the Registrar or the Company shall be prevented or forbidden from doing or performing any act or thing that the terms of the Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent, the Registrar or the Company incur any liability to any holder of this Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing that the terms of the Deposit Agreement provide shall or may be done or performed or (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement except, in the case of the Depositary, any Depositary's Agent or the Registrar, if such exercise or failure to exercise discretion is caused by its negligence or bad faith. 18. Obligations of the Depositary, the Depositary's Agent, the Registrar and the Company. The Company assumes no obligation and shall be subject to no liability under the Deposit Agreement or this Receipt to the holder hereof or other persons, except to perform in good faith such obligations as are specifically set forth and undertaken by it to perform in the Deposit Agreement. Each of the Depositary, the Depositary's Agents and the Registrar assumes no obligations and shall be subject to no liability under the Deposit Agreement or this Receipt to the holder hereof or other persons except to perform such obligations as are specifically set forth and undertaken by it to perform in the Deposit Agreement without negligence or bad faith. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding with respect to Stock Depositary Shares or Receipts or Common Stock that in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company will be liable for any action or failure to act by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Stock for deposit, any holder of this Receipt or any other person believed by it in good faith to be competent to give such advice or information. 19. Termination of Deposit Agreement. Whenever so directed by the Company, the Depositary will terminate the Deposit Agreement by mailing notice of such termination to the record holders of all Receipts then outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement if at any time 45 days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign and a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.04 of the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations thereunder except for its obligations to the Depositary, any Depositary's Agent and any Registrar under Sections 5.07 and 5.08 of the Deposit Agreement. If any Receipts remain outstanding after the date of termination of the Deposit Agreement, the Depositary thereafter shall discontinue all functions and be discharged from all obligations as provided in the Deposit Agreement, except as specifically provided therein. 20. Governing Law. The Deposit Agreement and its Receipts and the rights thereunder and hereunder and provisions thereof and hereof shall be governed by, and construed in accordance with, the law of the State of New York without giving effect to principles of conflict of laws. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Receipt, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common UNIF GIFT MIN ACT--______Custodian______ TEN ENT - as tenants by the (Cust) (Minor) entireties JT TEN - as joint tenants with under Uniform Gifts to Minors right of survivorship Act__________________________ and not as tenants in (State) common Additional abbreviations may be used though not in the above list. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto Please insert Social Security or other identifying number of Assignee ______________________________________ | | | | |____________________________________|__________________________________ the within Receipt and all rights and interests represented by the Depositary Shares evidenced thereby, and hereby irrevocably constitutes and appoints ____________________________________________his attorney, to transfer the same on the books of the within named Depositary, with full power of substitution in the premises. Dated:__________________________________________________________________ Signature:______________________________________________________________ NOTE: The signature to this assignment must correspond with the name as written upon the face of the Receipt in every particular, without alteration or enlargement, or any change whatever. EX-4.10 9 Exhibit 4.10 EXECUTION COPY ============================================================ P.T. FREEPORT INDONESIA COMPANY _______________________ $550,000,000 AMENDED CREDIT AGREEMENT Dated as of June 1, 1993 with CERTAIN BANKS, MORGAN GUARANTY TRUST COMPANY OF NEW YORK (for purposes of Article VIII only), as FI Trustee and CHEMICAL BANK, as Agent ============================================================ TABLE OF CONTENTS Page Parties and Recitals ................................ 1 ARTICLE I Definitions Section 1.1. Definitions .......................... 1 Section 1.2. Accounting Terms ..................... 25 Section 1.3. Section, Article, Exhibit and Schedule References ................ 26 ARTICLE II [Intentionally left blank] ARTICLE III The Loans Section 3.1. [Intentionally left blank] ........... 26 Section 3.2. Revolving Credit Facility ............ 26 Section 3.3. Loans ................................ 26 Section 3.4. Notice of Loans ...................... 27 Section 3.5. Promissory Notes ..................... 28 Section 3.6. Interest on Loans .................... 29 Section 3.7. Fees ................................. 29 Section 3.8. Maturity and Reduction of Commitments ........................ 30 Section 3.9. Interest on Overdue Amounts; Alternative Rate of Interest ....... 31 Section 3.10. Prepayment of Loans .................. 33 Section 3.11. Continuation and Conversion of Loans ............................. 34 Section 3.12. Reserve Requirements; Change in Circumstances ...................... 36 Section 3.13. Change in Legality ................... 40 Section 3.14. Indemnity ............................ 41 Section 3.15. Pro Rata Treatment ................... 42 Section 3.16. Sharing of Setoffs ................... 42 Section 3.17. Payments ............................. 43 Section 3.18. U.S. Taxes ........................... 44 Section 3.19. Indonesian Taxes ..................... 47 ARTICLE IV Representations and Warranties Section 4.1. Representations and Warranties........ 48 (a) Organization, Powers ............ 48 (b) Authorization ................... 49 (c) Governmental Approval ........... 49 (d) Enforceability .................. 50 (e) Financial Statements ............ 50 (f) Litigation; Compliance with Laws; etc. .................... 51 (g) Title, etc. ..................... 52 (h) Federal Reserve Regulations; Use of Proceeds ............... 53 (i) Taxes ........................... 54 (j) Employee Benefit Plans .......... 54 (k) Investment Company Act .......... 54 (l) Public Utility Holding Company Act ........................... 55 (m) Subsidiaries .................... 55 (n) Assigned Agreements ............. 55 (o) FI Security Documents ........... 55 (p) No Material Misstatements ....... 55 ARTICLE V Covenants Section 5.1. Affirmative Covenants of FTX ......... 56 (a) Financial Statements, etc. ...... 56 (b) Taxes and Claims ................ 58 (c) Maintenance of Existence; Conduct of Business ........... 58 (d) Compliance with Applicable Laws . 58 (e) Litigation ...................... 58 (f) ERISA ........................... 59 (g) [Intentionally left blank] ...... 59 (h) Security ........................ 59 (i) Insurance ....................... 60 (j) Access to Premises and Records .. 61 (k) FI Security Arrangements ........ 61 (l) Protection of Contract Rights ... 61 (m) Source of Interest .............. 62 (n) Further Assurances .............. 62 (o) Covenants regarding FI and FCX ....................... 63 Section 5.2. Negative Covenants of FTX ............ 63 (a) Conflicting Agreements .......... 63 (b) Borrowing Base Limits ........... 63 (c) Consolidation or Merger; Disposition of Assets and Capital Stock ................. 63 (d) Liens ........................... 65 (e) Current Ratios .................. 67 (f) Fixed Charge Ratios ............. 68 (g) Debt ............................ 68 (h) [Intentionally left blank] ...... 71 (i) Convertible Debt Payments ....... 71 (j) Ownership of Subsidiaries ....... 71 (k) Fiscal Year ..................... 72 (l) Investments in Nonrestricted Subsidiaries and Persons Not Subsidiaries .................. 72 (m) Federal Reserve Regulations ..... 73 (n) Certain Debt Agreements ......... 73 (o) Investments in the Major Subsidiaries .................. 73 (p) Investments in FCX .............. 74 (q) Equity Payments ................. 74 (r) Covenants Regarding IMC-Agrico .. 76 (s) Covenants Regarding ALatief-FI .. 77 Section 5.3. Additional Covenants of FI and FCX ......................... 77 ARTICLE VI Conditions of Credit Section 6.1. Conditions Precedent to Each Credit Event ................... 78 Section 6.2. Representations and Warranties with Respect to Credit Events ............ 78 ARTICLE VII Events of Default Section 7.1. Events of Default .................... 79 ARTICLE VIII The Agent and the FI Trustee Section 8.1. The Agent and the FI Trustee ......... 83 ARTICLE IX Guarantees Section 9.1. Guarantee ............................ 88 ARTICLE X Miscellaneous Section 10.1. Notices ............................. 90 Section 10.2. Survival of Agreement ............... 90 Section 10.3. Successors and Assigns; Participations; Purchasing Banks .. 91 Section 10.4. Expenses of the Banks; Indemnity .... 96 Section 10.5. Right of Setoff ..................... 98 Section 10.6. Applicable Law ...................... 98 Section 10.7. Waivers; Amendments ................. 98 Section 10.8. Severability ........................ 100 Section 10.9. Counterparts ........................ 100 Section 10.10. Headings ............................ 100 Section 10.11. Entire Agreement .................... 100 Section 10.12. Amendment Closing Date .............. 101 Section 10.13. Waiver of Jury Trial, etc. .......... 101 Section 10.14. Interest Rate Limitation ............ 101 Section 10.15. Jurisdiction; Consent to Service of Process ........................... 101 Section 10.16. Confidentiality ...................... 102 Section 10.17. Judgment Currency..................... 103 Schedule I Subsidiaries Schedule II-1 Applicable Margin for Loans Prior to and Including the Conversion Date Schedule II-2 Applicable Margin for Loans After the Conversion Date Schedule III Commitments of the Banks Schedule 4.1(c) Governmental Approvals Schedule 4.1(n) Assigned Agreements Schedule 5.2(d) Deemed Leases Exhibit A Terms of Subordination Exhibit B Form of Borrowing Confirmation for Loans Exhibit C Form of Promissory Note Exhibit D Form of Commitment Transfer Supplement CREDIT AGREEMENT entered into as of October 27, 1989, as amended through June 1, 1993, among P.T. FREEPORT INDONESIA COMPANY, a limited liability company organized under the laws of Indonesia and also domesticated in Delaware ("FI"), FREEPORT-McMoRan INC., a Delaware corporation ("FTX"), FREEPORT McMoRan COPPER & GOLD INC., a Delaware corporation ("FCX"), the undersigned banks (collectively, the "Banks"), MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a New York banking corporation (for purposes of Article VIII hereof only), as trustee for the Banks under the FI Trust Agreement and, in such capacity, as security agent for the Banks under the FI Security Documents (as herein defined) (in such capacity, the "FI Trustee") and CHEMICAL BANK, a New York banking corporation, as agent for the Banks (in such capacity, the "Agent"). FI has requested the Banks to extend credit to FI in order to enable it 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 $550,000,000. The proceeds of such borrowings are to be used for general corporate purposes, including, without limitation, the financing of acquisitions. The Banks are willing to make loans to FI upon the terms and subject to the conditions hereinafter set forth, including the guarantee by FTX and FCX (the "Guarantors") of the loans to FI. 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): "Adjusted CD Rate" means, with respect to any CD 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 sum of (a) a rate per annum equal to the product of (i) the Fixed CD Rate in effect for such Interest Period and (ii) Statutory Reserves, plus (b) the Assessment Rate. For purposes hereof, the term "Fixed CD Rate" shall mean the rate of interest determined by the Agent to be the arithmetic average (rounded upwards, if not already a whole multiple of 1/100 of 1%, to the next higher 1/100 of 1%) of the respective rates per annum notified to the Agent by the Reference Banks as the prevailing rate per annum bid at or about 10:00 a.m., New York City time, on the first Business Day of the Interest Period applicable to such CD Rate Loan by three New York City negotiable certificate of deposit dealers of recognized standing selected by each such Reference Bank for the purchase at face value from such Reference Bank of negotiable certificates of deposit of major United States money center banks in a principal amount approximately equal to such Reference Bank's portion of such CD Rate Loan and with a maturity comparable to such Interest Period. "ALatief" means P.T. ALatief Nusakarya Corporation, an Indonesian limited liability company. "ALatief-FI" means the joint venture company to be organized under the laws of Indonesia by FI and ALatief pursuant to the ALatief-FI Joint Venture Agreement. "ALatief-FI Joint Venture Agreement" means the Joint Venture Agreement made and entered into on March 11, 1993, between FI and ALatief, as such agreement may be amended as permitted by Section 5.2(s)(ii) and in effect from time to time. "ALatief-FI Transfer" means the transfer by FI of the non-mining infrastructure facilities, as described in the ALatief-FI Joint Venture Agreement, to ALatief-FI. "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" shall mean the rate of interest per annum announced by Chemical Bank from time to time 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" shall mean, 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 Chemical Bank from three New York City negotiable certificate of deposit dealers of recognized standing selected by it. "Federal Funds Effective Rate" shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of 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 Chemical Bank from three Federal funds brokers of recognized standing selected by it. If for any reason Chemical Bank 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 Chemical Bank 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. "Amendment Agreement" means the Second Amendment dated as of June 1, 1993, to the Credit Agreement dated as of October 27, 1989, as previously amended by the Amendment thereto dated as of December 20, 1991, among FI, the Guarantors, certain banks, the FI Trustee, the Agent, The Fuji Bank, Limited and Morgan Guaranty Trust Company of New York, as outgoing co-agents, and Morgan Guaranty Trust Company of New York, as outgoing agent for the Banks. "Amendment Closing Date" has the meaning assigned to such term in Section 2(b) of the Amendment Agreement. "Applicable CD Rate" means on a per annum basis, in respect of any Loan, for each day during the Interest Period for such Loan, the sum of (i) the Adjusted CD Rate as determined by the Agent plus (ii) the Applicable Margin. "Applicable LIBO Rate" means on a per annum basis, in respect of any Loan, for each day during the Interest Period for such Loan, the sum of (i) the LIBO Rate as determined by the Agent plus (ii) the Applicable Margin. "Applicable Margin" means, during each period set forth in Section 3.6(d), the rate per annum set forth opposite the applicable condition on Schedule II hereto for each type of Loan listed thereon. "Applicable Percentage" of any Bank means the percentage set opposite such Bank's name on Schedule III hereto. "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 net annual assessment rate (rounded upwards, if not already a whole multiple of 1/100 of 1%, to the next highest whole multiple of 1/100 of 1%) determined by the Agent to be payable to the Federal Deposit Insurance Corporation or any successor ("FDIC") for FDIC's insuring time deposits made in Dollars at offices of Chemical Bank in the United States as of the day two Business Days prior to the first day of such Interest Period. "Assigned Agreements" means the Contract of Work and the Concentrate Sales Agreements. "Assignment Agreement" means the Amended and Restated Pledge and Assignment and General Assignment of Accounts Receivable dated as of October 27, 1989, between FI and the FI Trustee, as such agreement may be further amended and in effect from time to time. "Available Borrowing Base" has the meaning assigned to such term in Article I of the FTX Credit Agreement. "Bank" means each bank signatory hereto and its successors and permitted assigns under Section 10.3(d). "Board" means the Board of Governors of the Federal Reserve System of the United States. "Borrowing Base" has the meaning assigned to such term in Article I of the FTX Credit Agreement. "Borrowing Base Bank" means each FTX Lender and, until such time as the FM Lenders shall by their written consent release all recourse under the FM Credit Agreement and the related documents against FTX, each FM Lender. "Borrowing Base Certificate" has the meaning assigned to such term in Article I of the FTX Credit Agreement. "Borrowing Base Debt" has the meaning assigned to such term in Article I of the FTX Credit Agreement. "Borrowing Base Factors" has the meaning assigned to such term in Section 2.1 of the FTX Credit Agreement. "Borrowing Date" means, with respect to any Loan, the date on which such Loan is disbursed. "Business Day" means a day on which the Banks are each open for business at their respective Domestic Offices; provided that when the term "Business Day" is used with respect to LIBO Rate Loans, such term shall mean a day on which the Banks are each also open for business at their respective LIBOR Offices. "Capital Interest" has the meaning assigned to such term in Section 4.01 of the IMC-Agrico Partnership Agreement. "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. "Cash Flow Ratio" means, for purposes of Schedules II-1 and II-2 hereto, at the end of any fiscal quarter, the cumulative sum, for the four consecutive fiscal quarters ending with such quarter, of FTX's (a) Consolidated Cash Flow, minus interest expense and capitalized interest paid or accrued on Debt and Corporate Group Loans and minus extraordinary or unusual nonrecurring cash items included in Consolidated Cash Flow, divided by (b) the aggregate principal amount of all Debt and Corporate Group Loans outstanding at the end of such fiscal quarter. "CD Rate Loan" means any Loan for which interest is determined, in accordance with the provisions hereof, at the Applicable CD Rate. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Collateral Agent" means Chemical Bank in its capacity as Collateral Agent for the Lenders (as defined in the FTX Intercreditor Agreement) under the FTX Intercreditor Agreement. "Commitment" means, with respect to each Bank, the Commitment of such Bank hereunder as set forth on Schedule III hereto, as the same may be permanently terminated or reduced from time to time pursuant to Section 3.8. 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 3.7(a). "Commitment Period" means the period commencing with and including the Original Execution Date and ending on but not including the Maturity Date. "Commitment Transfer Supplement" means a Commitment Transfer Supplement, substantially in the form of Exhibit D. "Concentrate Sales Agreements" means all contracts and agreements with respect to the sale or disposition of ores or minerals produced by the mining, concentrating and related operations conducted by FI pursuant to the Contract of Work, as such agreements may be amended and in effect from time to time. "Consolidated Cash Flow" means, with respect to any Person and for any fiscal quarter, the sum of (a) consolidated net income after taxes (before deducting minority interests in net income (loss) of consolidated subsidiaries, but disregarding all extraordinary or unusual noncash items in calculating such net income) of such Person and such Person's subsidiaries for such quarter; plus (b) consolidated interest paid or accrued on the Corporate Group Loans and on Debt by such Person or subsidiaries during such quarter and deducted in determining consolidated net income; plus (c) depreciation, depletion and amortization charges and deferred taxes deducted in computing consolidated net income; provided that such calculation will exclude items relating to Nonrestricted Subsidiaries. "Contract of Work" shall mean the Contract of Work made December 30, 1991, between the Ministry of Mines of the Government of the Republic of Indonesia, acting for and on behalf of the Government of the Republic of Indonesia, and FI, together with any related Implementation Agreement or Memorandum of Understanding with such Ministry of Mines acting on behalf of the Government of the Republic of Indonesia, as such agreement may be implemented, supplemented or amended and in effect from time to time. "Conversion Date" means June 28, 1996. "Corporate Group Facility" means this Agreement and the FTX Credit Agreement. "Corporate Group Loan Exposure" means the sum of Loan Exposure plus FTX Credit Agreement Loan Exposure. "Corporate Group Loans" means the Loans made hereunder and the FTX Credit Agreement Loans made under the FTX Credit Agreement. "Corporate Group Notes" means the Promissory Notes and the FTX Agreement Notes. "Credit Event" means the making of a Loan. "Debt" means at any time (1) Indebtedness for Borrowed Money, (2) the undischarged balance of any production payment, (3) the unearned balance of any advance payment received under any contract, and (4) debt created, issued, Guaranteed, incurred or assumed for the deferred (for 180 days or more) purchase price of property or services purchased; excluding, however, accrued expenses and accounts payable (other than for such deferred purchase price and/or for borrowed money) incurred in the ordinary course of business; provided that the same are not overdue in a material amount or, if overdue, are being contested in good faith and by appropriate proceedings and also excluding, for purposes of Section 7.1(i), any obligation or liability in respect of Debt (including the undischarged balance of any production payment and the unearned balance of any advance payment received under any contract) for the repayment or satisfaction of which the recourse of the creditor is limited to specified assets or properties (or the proceeds of production therefrom) of FTX or any Restricted Subsidiary. "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 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 Agent and FTX. "Equity Payment" means (i) any cash dividend on, or purchase, redemption or other payment in respect of, the capital stock of FTX (other than mandatory dividend payments on the Preferred Stock as in effect on the Amendment Closing Date), (ii) open market purchases by FTX of Depositary Units of FRP and (iii) open market purchases by FTX of capital stock of FCX. "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) which is a member of a group of which FTX is a member and which is under common control within the meaning of Section 414 of the Code. "Event of Default" means any Event of Default defined in Article VII. "FCC" means Freeport Chemical Company, a Delaware corporation. "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. "FI Borrowing Base" has the meaning assigned such term in Section 2.1 of the FTX Credit Agreement. "FI Free Cash" means the product of (i) the lesser of (x) the then outstanding Borrowing Base Debt of FI and (y) 95% of all amounts above $30,000,000 held by FI in cash or unencumbered Permitted Investments, and (ii) 1.0 minus the MS Factor of FI. "FI Obligations" has the meaning assigned to such term in Section 9.1. "FI Product" means ores or minerals produced by the FI Project or otherwise obtained from the Mining Area (as defined in the Contract of Work) and any kinds of products, including, without limitation, concentrates, produced from such ores or minerals. "FI Project" means the mining, concentrating and related operations conducted or to be conducted by FI in Irian Jaya, Indonesia, pursuant to the Contract of Work. "FI Receivables Purchase Agreement" means any agreement entered into by FI with respect to the sale by FI of accounts receivable. "FI Security Documents" means the FI Trust Agreement, the Assignment Agreement, the Surat Kuasa, the Fiduciary Transfer, the Fiduciary Assignment, the Fiduciary Power and all Uniform Commercial Code financing statements and their Indonesian equivalents required to be filed hereunder or under the FI Security Documents. "FI Trust Agreement" means the Trust Agreement dated as of May 15, 1970, as amended through the Amendment Closing Date, among FI, the Banks and the FI Trustee, as the same may be amended and in effect from time to time. "FI Trustee" means Morgan Guaranty Trust Company of New York, or any successor trustee, as trustee for the Banks pursuant to the FI Trust Agreement and, in such capacity, as security agent for the Banks under the FI Security Documents. "Fiduciary Assignment" means the Fiduciary Assignment of Accounts Receivable (the Penyerahan Hak Atas Tagihan) dated December 30, 1991, as amended by the First Amendment thereto dated the Amendment Closing Date, granted by FI to the FI Trustee, as the same may be further amended and in effect from time to time. "Fiduciary Power" means the Power of Attorney to Establish Fiduciary Transfer (Kuasa Untuk Memasang Penyerahan Hak Milik Fidusia) dated December 30, 1991, as amended by the First Amendment thereto dated the Amendment Closing Date, granted by FI to the FI Trustee (the "Amended Fiduciary Power"), as the same may be further amended and in effect from time to time. "Fiduciary Transfer" means the Fiduciary Transfer of Assets (Penyerahan Hak Secara Fidusia) dated December 30, 1991, as amended by the First Amendment thereto dated the Amendment Closing Date, granted by FI to the FI Trustee, as the same may be further amended and in effect from time to time. "Financial Officer" of any corporation means the principal financial officer, principal accounting officer, treasurer, assistant treasurer or controller of such corporation. "Fixed Charges" means, for any Person at the end of any fiscal quarter, the cumulative sum, for the four consecutive quarters ending with such quarter, of (a) the aggregate principal amount of all Corporate Group Loans required to be repaid pursuant to Section 3.8(b) of each of this Agreement and the FTX Credit Agreement and all Debt paid or payable by such Person and such Person's Subsidiaries (other than Nonrestricted Subsidiaries) during such quarters plus (b) all interest paid or payable on Debt and Corporate Group Loans by such Person and such Person's Subsidiaries (other than Nonrestricted Subsidiaries) during such quarters; provided, however, that any principal amount of Debt and any interest payable in one fiscal quarter and paid in another shall not be twice included in Fixed Charges; provided further, however, that any Corporate Group Loans prepaid pursuant to Section 3.10(a) or Section 3.10(c) of either this Agreement or the FTX Credit Agreement or continued or converted pursuant to Section 3.11 of either this Agreement or the FTX Credit Agreement and any other Debt prepaid, continued, converted or refinanced pursuant to similar provisions of agreements or instruments governing such other Debt shall not be included as Fixed Charges if such Debt would not otherwise have matured within three months of such prepayment, continuation, conversion or refinancing. "Fixed Charge Ratio" means for any Person at the end of any fiscal quarter, the quotient, for the four consecutive quarters ending with such quarter, of (a) Consolidated Cash Flow divided by (b) Fixed Charges. "FM Agent" means Chemical Bank as agent for the FM Lenders under the FM Credit Agreement. "FM Corporation" means FM Properties Inc., a Delaware corporation. "FM Credit Agreement" means the Credit Agreement dated as of June 11, 1992, among FM Properties, FTX, the FM Lenders and the FM Agent, as the same may be amended and in effect from time to time. "FM Lenders" means the banks party to the FM Credit Agreement. "FM Properties" means FM Properties Operating Co., a Delaware general partnership whose partners are FTX and FM Corporation. "FM Properties Credit" has the meaning assigned to such term in Section 2.1(iv) of the FTX Credit Agreement. "FM Properties Indebtedness" means the obligations of FM Properties under the FM Credit Agreement and up to $125,000,000 principal amount of the obligations of FM Properties (including Guarantees of obligations of Nonrestricted Subsidiaries as to which FM Properties became a guarantor) assumed in connection with the transfer by FTX of certain oil, gas and real estate assets to FM Properties as described in the Information Statement contained in the Registration Statement filed by FM Corporation on Form 10 with the SEC for the registration of the common stock, par value $.01 per share, and related preferred stock purchase rights of FM Corporation under the Securities Exchange Act of 1934, as such Form 10 was amended through June 9, 1992. "FRP" means Freeport-McMoRan Resource Partners, Limited Partnership, a Delaware limited partnership. "FRP Borrowing Base" has the meaning assigned such term in Section 2.1 of the FTX Credit Agreement. "FRP GPCo" means the direct or indirect Wholly-Owned Subsidiary of FTX which is the entity which has the rights and obligations of FRP GPCo as defined in and contemplated by the IMC-Agrico Contribution Agreement. "FRP Partner" means the Wholly-Owned Restricted Subsidiary, organized as a limited partnership, of which FRP will own a majority limited partnership interest and which has the rights and obligations of FRP Partner as defined in and contemplated by the IMC-Agrico Contribution Agreement. "FTX Agent" means Chemical Bank as agent for the FTX Lenders under the FTX Credit Agreement. "FTX Agreement Notes" means the promissory notes of FTX issued to the FTX Lenders pursuant to the FTX Credit Agreement. "FTX Borrowing Base" has the meaning assigned to such term in Section 2.1 of the FTX Credit Agreement. "FTX Credit Agreement" means the Amended and Restated Credit Agreement entered into as of May 15, 1991, as amended and restated in its entirety as of June 1, 1993, among FTX, FRP, the FTX Lenders and the FTX Agent, as the same may be further amended and in effect from time to time. "FTX Credit Agreement Loan" means any loan made by the FTX Lenders pursuant to the FTX Credit Agreement. "FTX Credit Agreement Loan Exposure" means the aggregate amount of unpaid principal of all FTX Credit Agreement Loans made by the FTX Lenders. "FTX Credit Agreement Total Commitment" means $800,000,000, the committed amount under the FTX Credit Agreement, as the same may be permanently terminated or reduced from time to time. "FTX Credit Event" means the making of an FTX Credit Agreement Loan. "FTX Free Cash" means the lesser of (i) the then outstanding Borrowing Base Debt of FTX and (ii) 75% of all amounts above $50,000,000 held by FTX in cash or unencumbered Permitted Investments. "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, among the Agent on behalf of the Banks, the FTX Agent on behalf of the FTX Lenders, the FM Agent on behalf of the FM Lenders, Hibernia National Bank, as agent for the Pel-Tex Bank Lenders, the Burke Parties (as defined therein) and Chemical Bank, as collateral agent, as such agreement may be further amended and in effect from time to time. "FTX Lenders" means the banks party to the FTX Credit Agreement. "FTX Pledge Agreement" means a pledge agreement in the form of Exhibit A-1 to the FTX Intercreditor Agreement, to be executed by FTX and delivered to the Collateral Agent pursuant to Section 5.1(h), as such agreement may be amended and in effect from time to time. "FTX Security Agreement" means a security agreement in the form of Exhibit B-1 to the FTX Intercreditor Agreement, to be executed by FTX and delivered to the Collateral Agent pursuant to Section 5.1(h), as such agreement may be amended and in effect from time to time. "FTX Subsidiary Pledge Agreement" means a pledge agreement in the form of Exhibit A-2 to the FTX Intercreditor Agreement, to be executed by a wholly-owned Restricted Subsidiary of FTX and delivered to the Collateral Agent pursuant to Section 5.1(h), as such agreement may be amended and in effect from time to time. "FTX Subsidiary Security Agreement" means a security agreement in the form of Exhibit B-2 to the FTX Intercreditor Agreement, to be executed by a wholly-owned Restricted Subsidiary of FTX and delivered to the Collateral Agent pursuant to Section 5.1(h), as such agreement may be amended and in effect from time to time. "GAAP" has the meaning assigned to such term in Section 1.2. "Governmental Authority" means any United States or Indonesian 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 to pay dividends or other distributions upon the stock of such other Person, or any obligation of such other Person, direct or indirect, (i) to purchase (or advance or supply funds for the purchase of) any security for the payment of such Debt, obligation, dividend or distribution, (ii) to purchase 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 (iii) 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. "Guarantor" has the meaning assigned to such term in the Introduction. "HLT" means a transaction which the Agent, on the basis of any of (i) applicable law, (ii) the rules, regulations, interpretations, guidelines, statements of policy, published or unpublished, or directives of Federal or state bank regulatory authorities and (iii) practices prevailing in the market as to the interpretation or application of items referred to in (i) or (ii) above, classifies as a "highly leveraged transaction" or gives a similar or successor classification. "IMC" means IMC Fertilizer, Inc., a Delaware corporation. "IMC-Agrico" means a general partnership whose partners will be FRP Partner, IMC Partner and IMC-Agrico MP, or such other entity which will have the rights and obligations of the Partnership as defined in and contemplated by the IMC-Agrico Contribution Agreement. "IMC-Agrico Contribution Agreement" means the Contribution Agreement dated as of April 5, 1993, between FRP and IMC, as amended and in effect from time to time as permitted by Section 5.2(r). "IMC-Agrico MP" means a corporation the equity interest in which will be owned by the FRP Partner and the IMC Partner, or such other entity (other than a direct or indirect subsidiary of IMC-Agrico) that shall have the rights and obligations of the Managing Partner as defined in and contemplated by the IMC-Agrico Contribution Agreement. "IMC-Agrico Parent Agreement" means the Parent Agreement to be entered into by and among IMC, FRP, FTX and IMC-Agrico, substantially in the form of Exhibit B to the IMC-Agrico Contribution Agreement, as amended and in effect from time to time as permitted by Section 5.2(r). "IMC Partner" means a corporation that has the rights and obligations of IMC GPCo as defined in and contemplated by the IMC-Agrico Contribution Agreement. "IMC-Agrico Partnership Agreement" means the Partnership Agreement to be entered into by and among FRP Partner, IMC Partner and IMC-Agrico MP, substantially in the form of Exhibit A to the IMC-Agrico Contribution Agreement, as amended and in effect from time to time as permitted by Section 5.2(r). "IMC-Agrico Transfer" means the transfer by FRP to IMC-Agrico of certain assets related to the phosphate chemicals business, as described in the IMC-Agrico Contribution Agreement. "Indebtedness for Borrowed Money" means, for any Person, all Guarantees of such person plus all liabilities of such Person, other than Corporate Group Loans and Guarantees thereof, in respect of (a) money borrowed, (b) notes, debentures, bonds or other obligations issued, (c) obligations for deferred payment for property purchased having an original maturity greater than one year after the date of incurrence thereof and (d) Capitalized Lease Obligations. "Indocopper Shareholders Agreement" means the Amended and Restated Shareholders Agreement dated as of November 12, 1992, by and among P.T. Indocopper Investama Corporation, FCX, certain individuals and P.T. Bakrie Investindo. "Indonesian Taxes" means all present and future income, stamp and other taxes, levies, imposts, deductions, charges, compulsory loans and withholdings whatsoever imposed, assessed, levied or collected by Indonesia or any political subdivision or taxing authority thereof or therein or any association or organization of which Indonesia may be a member (but excluding taxes or other similar governmental charges, fees or assessments imposed upon the net income of the Agent, the FI Trustee or any Bank which has its principal office in Indonesia or a branch office in Indonesia, unless the presence of such office is solely attributable to the enforcement of any rights hereunder or under any FI Security Document with respect to an Event of Default), together with interest thereon and penalties, fines and surcharges and other liabilities with respect thereto, if any, on or in respect of this Agreement, the Loans to FI, the FI Security Documents, the Assigned Agreements or the Corporate Group Notes of FI, the registration, recordation, notarization or other formalization of any thereof, and any payments of principal, interest, charges, fees or other amounts made on, under or in respect of any thereof. "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 3.17), or if earlier, the Maturity Date, and (ii) as to any other 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' or 90 days' duration, the date that would be the last day of such Interest Period if such Interest Period were of three months' or 90 days' duration) and the date of any conversion or continuation of such Loan to a Loan of a different type. "Interest Period" means (i) as to any LIBO Rate Loan, the period commencing on the date of such LIBO Rate Loan 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 FI may elect, (ii) as to any CD Rate Loan, a period of 30, 60, 90 or 180 days' duration, as FI may elect, commencing on the date of such CD Rate Loan and (iii) as to any Reference Rate Loan, the period commencing on the date of such Reference Rate Loan 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 Reference Rate Loan is converted to a Loan of another type or repaid or prepaid 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 may be selected with respect to a LIBO Rate Loan or a CD Rate Loan that would end later than a Reduction Date occurring after the making of such Loan if the aggregate outstanding principal amount of the Corporate Group Loans (after giving effect to all borrowings and payments of Corporate Group Loans made on the date of such Loan) having Interest Periods extending beyond such Reduction Date would otherwise exceed the aggregate amount of the Commitments as reduced on such Reduction Date, (3) no Interest Period with respect to any Loan shall end later than the Maturity Date and (4) interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period. "KfW" means Kreditanstalt fur Wiederaufbau, a corporation organized under the public law of the Federal Republic of Germany. "KfW Credit Agreement" means a credit agreement between FI and KfW pursuant to terms approved in writing by the FTX Agent, as amended and in effect from time to time. "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 such LIBO Rate Loan and for a maturity equal to the applicable Interest Period are offered in immediately available funds to the London branches of the Reference Banks in the London Interbank Market for Eurodollars 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 Agent and FTX, unless such Bank shall designate a different LIBOR Office by notice in writing to the Agent and FTX. "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 Partnership Agreement as in effect on the Amendment 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 3.2. "Loan Documents" means the Amendment Agreement, the Corporate Group Facility, the Corporate Group Notes, the FTX Intercreditor Agreement, the Security Agreement, the Pledge Agreement, the FI Security Documents 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. "Long-Term Concentrate Sales Agreement" means any Concentrate Sales Agreement with a term of at least one year. "Major Subsidiary" means each of FI and FRP. "Margin Stock" has the meaning assigned to such term in Regulation U of the Board, as the same is from time to time in effect. "Maturity Date" means December 31, 1999, or, if earlier, the date of termination of the Commitments pursuant to the terms hereof. "Memorandum of Understanding" means the Memorandum of Understanding dated as of December 27, 1991, between the Ministry of Mines and Energy of the Government of the Republic of Indonesia, and FI as amended, modified or supplemented and in effect from time to time. "MS Factor" has the meaning assigned to such term in Section 2.1 of the FTX Credit Agreement. "Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which FTX 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 Asset Value" means the present value assigned to an asset by FTX based on the assumptions utilized in the most recent engineering or other asset valuation report provided to each Borrowing Base Bank pursuant to Section 5.1(g), as adjusted for FTX's net ownership interest and after coverage as provided in the most recent Borrowing Base Certificates, as certified by the Treasurer or another Financial Officer of FTX for purposes of Section 2.5 of the FTX Credit Agreement. "Net Proceeds" means (i) the gross fair market value of the consideration or other amounts payable to or receivable by FTX, any Restricted Subsidiary and IMC-Agrico, in respect of any sales, transfers, distributions (other than cash dividends and dividends by FTX consisting of stock or units of the Subsidiaries) or other dispositions of assets or properties (including any capital or other equity interests owned, but excluding direct issuances of equity by FTX or a Restricted Subsidiary other than in the ordinary course of business, less (ii) the amount, if any, of all taxes (but including income taxes only to the extent such Person reasonably estimates that such income taxes will be paid on the date of the next income 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 FTX, any Restricted Subsidiary, IMC or any affiliate of IMC) 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); provided, however, that with respect to IMC-Agrico, for purposes of Section 2.5 of the FTX Credit Agreement, only the FRP Share in excess of $25,000,000 shall be deemed to constitute Net Proceeds. "FRP Share" means the Capital Interest of FRP Partner multiplied by the amount preceding this proviso. "1992 Form 10-K" has the meaning assigned to such term in Section 4.1(e). "Nonrestricted Subsidiary" means (i) any of the following: Bella Luna Incorporated, a Louisiana corporation, Eastern Mining Company Inc., a Delaware corporation, Freeport Copper Company, a Delaware corporation, Freeport-McMoRan Chile Inc., a Delaware corporation, Freeport-McMoRan Spain Incorporated, a Delaware corporation, Freeport-McMoRan Thaitex Company, a Delaware corporation, Freeport-Warim, Inc., a Delaware corporation, P.T. Indonesia Freeport Finance Company, an Indonesian corporation, Freeport Egyptian Sulphur Company, a Delaware corporation, Dill Holdings Incorporated, a Delaware corporation, Freeport International, Incorporated, a Delaware corporation, and Freeport Mining Company, a Delaware corporation, (ii) any Subsidiary of any Nonrestricted Subsidiary and (iii) any surviving corporation (other than FTX 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. By written notice to the 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 the aggregate principal amount of the Corporate Group Loans exceeds the Available Borrowing Base, 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. "Original Execution Date" means October 27, 1989. "Partnership Agreement" has the meaning assigned to such term in the FM Credit Agreement. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA. "Pel-Tex Agreements" means the Loan Agreement and related documents dated as of December 31, 1985, as amended and in effect from time to time, among FTX, as ultimate successor to FMP Operating Company (as purchaser), and 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 sellers). "Pel-Tex Bank Agreement" means the Credit Agreement dated as of December 31, 1985, among the Burke Parties, the banks named therein and Hibernia National Bank, as agent for such banks, as the same may be amended and in effect from time to time. "Pel-Tex Lenders" means, collectively, Burke Oil Company (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 (collectively, the "Burke Parties") and the banks party to the Pel-Tex Bank Agreement. "Permitted Investments" means (a) certificates of deposit of, or other bank accounts with, banks (or with their branches) having a short-term deposit rating issued by Moody's Investors Services, Inc., of P-1; (b) investments in readily marketable money market funds having assets in excess of one billion dollars, which assets have an average life of less than one year and an average quality of at least "A" as rated by Standard & Poor's Corporation or Moody's Investors Services, Inc.; and (c) commercial paper rated A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors Services, Inc. "Permitted Secured Swap" means any interest rate protection agreement or commodities price protection agreement between FTX, FI or FRP and any Bank that shall be ratably secured pursuant to this Agreement, the FTX Intercreditor Agreement, an intercreditor agreement relating to the assets of FI subject to the FI Security Documents and, in the case of any such interest rate or commodities price protection agreement with FI, the FI Security Documents. "Person" means an individual or a corporation, partnership, 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 pension plan (other than a Multiemployer Plan) which is subject to the provisions of Title IV of ERISA and which is maintained for employees of FTX or any ERISA Affiliate. "Pledge Agreement" means, collectively, the FTX Pledge Agreement and any FTX Subsidiary Pledge Agreement. "Power Facilities Transfer" means, collectively, each transfer by FI of electric power generation and transmission facilities with arrangements providing for the continued supply of electric power to the FI Project, all on terms and conditions approved by the Agent. "Preferred Stock" has the meaning assigned to such term in Section 5.2(q). "Promissory Notes" means the promissory notes of FI referred to in Section 3.5. "Reduction Date" has the meaning assigned to such term in Section 3.8(b). "Reference Banks" means Chemical Bank, ABN Amro Bank, N.V., and National Westminster bank, PLC. "Reference Rate Loan" means any Loan for which interest is determined, in accordance with the provisions hereof, at the Applicable Reference Rate. "Reportable Event" means any "reportable event" as defined in Section 4043(b) of ERISA or the regulations issued thereunder. "Required Banks" means at any time Banks having Commitments representing at least 66-2/3% of the aggregate Commitments hereunder. "Required Borrowing Base Banks" has the meaning assigned to such term in Article I of the FTX Credit Agreement. "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 FRP, FCX, FI, FRP Partner, FRP GPCo, FCC and any other Subsidiary that is not a Nonrestricted Subsidiary. "Sales Proceeds Account" has the meaning assigned to such term in the FI Trust Agreement. "Scheduled Principal Payments" for any period and for any Person means the aggregate principal amount of all Loans repaid pursuant to Section 3.10(b) by virtue of Section 3.8(b) in such period, (ii) the aggregate principal amount of all FTX Credit Agreement Loans repaid pursuant to Section 3.10(b) by virtue of Section 3.8(b) of the FTX Credit Agreement in such period, plus (iii) scheduled principal payments on all Debt. "SEC" means the Securities and Exchange Commission. "Security Agreement" means, collectively, the FTX Security Agreement and any FTX Subsidiary Security Agreement. "Shared Collateral" has the meaning assigned such terms 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 to which any Bank is subject (a) with respect to the Adjusted CD Rate, for new negotiable 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 of the Board). Such reserve percentages shall include, without limitation, those imposed under such Regulation D. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "Subordination Provisions" means the form of subordination provisions attached hereto as Exhibit A. "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. "Surat Kuasa" means the Surat Kuasa (Power of Attorney) dated December 30, 1991, as amended by the First Amendment thereto dated the Amendment Closing Date, granted by FI to the FI Trustee, as the same may be further amended and in effect from time to time. "Termination Event" means any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or for the appointment of a trustee to administer, any Plan. "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 10.3. "Unused Net Commitment Amount" means the amount of the FTX Credit Agreement Total Commitment less the Corporate Group Loan Exposure. "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 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) ("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 Amendment Closing Date and as applied by FTX in preparing the financial statements referred to in Section 4.1(e). SECTION 1.3. Section, Article, Exhibit and Schedule References. 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. ARTICLE II [Intentionally left blank.] ARTICLE III The Loans SECTION 3.1. [Intentionally left blank.] SECTION 3.2. 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 FI, at any time and from time to time during the Commitment Period, in an aggregate principal amount at any one time outstanding not to exceed such Bank's Applicable Percentage of the Unused Net Commitment Amount on the Borrowing Date for such Loan. Within the foregoing limits, FI may borrow, repay and reborrow, prior to the Maturity Date, all or any portion of the Commitments hereunder, subject to the terms, provisions and limitations set forth herein; provided, however, that no borrowing shall be made hereunder if (i) after giving effect thereto the principal amount outstanding of the Loans of any Bank would exceed the Commitment of such Bank or (ii) except for continuations or conversions of existing Loans during any applicable 90-day period referred to in Section 2.4 of the FTX Credit Agreement without increase in the principal amount of such Loans, the aggregate principal amount of all the Corporate Group Loans would exceed the lesser of (x) the then current Available Borrowing Base or (y) the then current FTX Credit Agreement Total Commitment. SECTION 3.3. Loans. (a) The Loans made by the Banks to FI on any one date shall be in a minimum aggregate principal amount of $5,000,000 and an integral multiple of $1,000,000. The first Loan by each Bank to FI made after the Amendment Closing Date shall be made against delivery to such Bank of an appropriate Promissory Note, payable to the order of such Bank in the amount of its Commitment, executed by FI, as referred to in Section 3.5. (b) Each Loan shall be either a Reference Rate Loan, a CD Rate Loan or a LIBO Rate Loan as FI may request pursuant to Section 3.4. Subject to the provisions of Sections 3.4 and 3.11, Loans of more than one type may be outstanding at the same time. (c) Each Bank shall make its portion, as determined under Section 3.15, of each Loan hereunder on the proposed date thereof by paying the amount required to the Agent in New York, New York in immediately available funds not later than 2:00 p.m., New York City time, and the Agent shall by 3:00 p.m., New York City time, credit the amounts so received to the general deposit account of FI with the 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 Agent shall have received notice from a Bank prior to the date of any Loan that such Bank will not make available to the Agent such Bank's portion of such Loan, the Agent may assume that such Bank has made such portion available to the Agent on the date of such Loan in accordance with this paragraph (c) and the Agent may, in reliance upon such assumption, make available to FI on such date a corresponding amount. If and to the extent that such Bank shall not have made such portion available to the Agent, such Bank and FI severally agree to repay to the 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 Agent at the interest rate applicable at such time to such Loan. If such Bank shall repay to the Agent such corresponding amount, such amount shall constitute such Bank's Loan for purposes of this Agreement. SECTION 3.4. Notice of Loans. (a) FI shall give the 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, (ii) in the case of a CD Rate Loan, not later than 10:30 a.m., New York City time, one Business Day before a proposed borrowing, and (iii) 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, FI may, subject to Section 3.14, revoke such notice by giving written or telex notice thereof to the 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, CD 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 CD Rate Loan or LIBO Rate Loan, the Interest Period or Interest Periods with respect thereto. If no election as to the type of Loan is specified in any such notice by FI, such Loan shall be a Reference Rate Loan. If no Interest Period with respect to any CD Rate Loan or LIBO Rate Loan is specified in any such notice by FI, then (x) in the case of a CD Rate Loan, FI shall be deemed to have selected an Interest Period of 30 days' duration and (y) in the case of a LIBO Rate Loan, FI shall be deemed to have selected an Interest Period of one month's duration. The Agent shall promptly advise the other Banks of any notice given by FI pursuant to this Section 3.4(a) and of each Bank's portion of the requested Loan. (b) FI may continue or convert all or any part of any Loan with a Loan of the same or a different type in accordance with Section 3.11 and subject to the limitations set forth therein. (c) Notwithstanding any provision to the contrary in this Agreement, FI shall not in any notice of borrowing under this Section 3.4 request any CD Rate Loan or LIBO Rate Loan which, if made, would result in more than 20 separate CD Rate Loans and LIBO Rate Loans of any Bank and CD Rate Loans and LIBO Rate Loans (each as defined in the FTX Credit Agreement) of any FTX Lender being outstanding under the Corporate Group Facility at any one time. 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 3.5. Promissory Notes. (a) The Loans made by each Bank to FI shall be evidenced by a Promissory Note duly executed on behalf of FI, dated the Original Execution Date, in substantially the form attached hereto as Exhibit C, payable to such Bank in a principal amount equal to its Commitment on such date. The outstanding principal balance of each Loan, as evidenced by such Promissory Note, shall be payable on the Maturity Date. Each Note shall bear interest from its date on the outstanding principal balance thereof, as provided in Section 3.6. (b) Each Bank, or the Agent on its behalf, shall, and is hereby authorized by FI to, endorse on the schedule attached to the Promissory Note delivered by FI 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 FI, as well as the date and amount of each payment and prepayment with respect thereto; provided, however, that the failure of any Bank or the Agent to make such a notation or any error in such a notation shall not affect the obligation of FI under such Promissory Note. SECTION 3.6. Interest on Loans. (a) Subject to the provisions of Section 3.9, 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), equal to the Applicable Reference Rate. Interest on each Reference Rate Loan shall be payable on the applicable Interest Payment Date. (b) Subject to the provisions of Section 3.9, each CD 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 CD Rate for the Interest Period in effect for such Loan. Interest on each CD Rate Loan shall be payable on each applicable Interest Payment Date. The Applicable CD Rate shall be determined by the Agent, and such determination shall be conclusive absent manifest error. The Agent shall promptly advise FI and each Bank of such determination. (c) Subject to the provisions of Section 3.9, 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. Interest on each such LIBO Rate Loan shall be payable on each applicable Interest Payment Date. The Applicable LIBO Rate shall be determined by the Agent, and such determination shall be conclusive absent manifest error. The Agent shall promptly advise FI and each Bank of such determination. (d) If the Applicable Margins for Loans change pursuant to Schedule II-1 or II-2 as a result of a change in the Cash Flow Ratio, such change shall become effective on the first day of the third month after the last day of the fiscal quarter with respect to which such Cash Flow Ratio was calculated and shall continue in effect until the first day of the third month after the last day of the next succeeding fiscal quarter for which a change in the Cash Flow Ratio would require a different Applicable Margin for Loans pursuant to Schedule II-1 or II-2. SECTION 3.7. Fees. (a) On the last Business Day of each March, June, September and December, and on the Maturity Date, FI shall pay each Bank, through the Agent, a commitment fee (a "Commitment Fee") from and including the Original Execution Date through and including the Maturity Date on (i) with respect to any quarter (or shorter period commencing with the Original Execution Date or ending on the date immediately preceding the Amendment Closing Date) prior to the Amendment Closing Date, the average daily unused amount of such Bank's Commitment (as defined in and calculated in accordance with this Agreement as in effect prior to the Amendment Closing Date), if any, equal to 1/4 of 1% per annum and (ii) with respect to any quarter after the Amendment Closing Date, the amount set forth in and pursuant to (and not in duplication of) Section 3.7(a) of the FTX Credit Agreement. (b) [Intentionally left blank.] (c) All Commitment Fees under this Section 3.7 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 3.8. (d) On the Amendment Closing Date FTX will also pay to each Bank a participation fee (a "Participation Fee") as set forth on Schedule IV to the FTX Credit Agreement, such fee to be paid pursuant to Section 3.7(d) of the FTX Credit Agreement and not in duplication of such fee. (e) FTX agrees to pay to the Agent, for its own account pursuant hereto and to the FTX Credit Agreement, on May 15th of each year, an agency fee (the "Agency Fee") as agreed between FTX and the Agent. SECTION 3.8. Maturity and Reduction of Commitments. (a) Upon at least five days' prior written or telex notice to the Agent, FI 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 lesser of (i) the aggregate principal amount of all Loans outstanding after such reduction and (ii) the amount of the FTX Credit Agreement Total Commitment on such date. (b) The Total Commitment shall be permanently reduced on the Conversion Date to the aggregate principal amount of the Loans outstanding on such date (after giving effect to any Loans made on such date). Thereafter, the Total Commitment shall be reduced on the last Business Day of March, June, September and December in each year (each a "Reduction Date"), commencing on September 30, 1996, by 14 consecutive reductions, each in an amount equal to the lesser of (i) 1/14th of the Total Commitment as in effect on the Conversion Date after reduction as aforesaid and (ii) the Total Commitment on such Reduction Date. (c) [Intentionally left blank.] (d) [Intentionally left blank.] (e) On the Maturity Date the Commitments shall terminate and any outstanding Loans shall be due and payable in full. SECTION 3.9. Interest on Overdue Amounts; Alternative Rate of Interest. (a) If FI shall default in the payment of the principal of or interest on any Corporate Group Loan or any other amount becoming due hereunder or under the FTX Credit Agreement), by acceleration or otherwise, FI 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 CD Rate Loan or LIBO Rate Loan, at a rate 2% above the rate which would otherwise be payable under Section 3.6(b) or (c), as the case may be, until the scheduled maturity date with respect thereto 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 CD Rate Loan or 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 Agent shall have determined (which determination shall be conclusive and binding upon FI 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 rate at which dollar deposits are being offered will not adequately and fairly reflect the cost to any Bank of making or maintaining the principal amount of such LIBO Rate Loan during such Interest Period or (iii) reasonable means do not exist for ascertaining the Applicable LIBO Rate, the Agent shall as soon as practicable thereafter give written or telex notice of such determination to FI and the other Banks, and any request by FI for the making, continuation or conversion of a LIBO Rate Loan pursuant to Section 3.4 or 3.11 shall, until the Agent shall have advised FI 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 Agent makes the determination specified in (ii) above, at the option of FI 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 FI if the Agent makes the determination specified in (ii) above with respect to three or more Banks. Each determination of the Agent hereunder shall be conclusive absent manifest error. (c) In the event, and on each occasion, that on or before the day on which the Adjusted CD Rate for a CD Rate Loan is to be determined, the Agent shall have determined (which determination shall be conclusive and binding upon FI absent manifest error) that (i) the Adjusted CD Rate for such Loan cannot be ascertained for any reason, including, without limitation, the inability or failure of the Agent to obtain sufficient bids in accordance with the terms of the definition of Base CD Rate, or (ii) that the Adjusted CD Rate for such CD Rate Loan will not adequately and fairly reflect the cost to any Bank of making or maintaining the principal amount of such CD Rate Loan during such Interest Period, the Agent shall, as soon as practicable thereafter, give written or telex notice of such determination to FI and the other Banks, and any request by FI for the making, continuation or conversion of a CD Rate Loan pursuant to Section 3.4 or 3.11 shall, until the Agent shall have advised FI 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 Agent makes the determination specified in (ii) above, at the option of FI 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 FI if the Agent makes the determination specified in (ii) above with respect to three or more Banks. Each determination by the Agent hereunder shall be conclusive absent manifest error. SECTION 3.10. Prepayment of Loans. (a) FI shall have the right at any time and from time to time to prepay any Loan, in whole or in part, subject to the requirements of Section 3.14 but otherwise without premium or penalty, upon prior written or telex notice to the 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) FI shall from time to time pay or prepay so much of the Loans as shall be necessary in order that (i) the aggregate principal amount of the Corporate Group Loans (after giving effect to any other prepayment of Corporate Group Loans on such date) outstanding will not exceed the FTX Credit Agreement Total Commitment then in effect and (ii) 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 then in effect. All prepayments under this Section shall be subject to Section 3.14. (c) Not later than 90 days after each reduction in the amount of the Borrowing Base as a result of any redetermination of the Borrowing Base Factors pursuant to Article II of the FTX Credit Agreement, FI shall prepay the outstanding Loans in such amount as may be necessary so that the aggregate principal amount of the outstanding Corporate Group Loans (after giving effect to any other prepayment of Corporate Group Loans on such date) does not exceed the Available Borrowing Base after giving effect to such reduction; provided, however, that if such reduction in the Borrowing Base is a result of any sales, transfers, distributions, or other dispositions of assets or properties (including, without limitation, shares of any capital stock or other equity interests of any Restricted Subsidiary) other than in the ordinary course of business, such 90-day grace period will not apply with respect to the required mandatory prepayment. During any such applicable 90-day period, continuations or conversions of Loans in accordance with Section 3.11 are permitted; provided that the Interest Periods for such continued or converted borrowings do not extend beyond such 90-day period unless the condition requiring prepayments pursuant to this Section 3.10(c) shall no longer exist. Any prepayment of any CD Rate Loan or LIBO Rate Loan pursuant to this Section 3.10(c) shall be subject to Section 3.14. (d) 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 FI 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 other 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. (e) The Loans of FI shall be paid or prepaid pursuant to Section 5.1(i). SECTION 3.11. Continuation and Conversion of Loans. FI shall have the right, subject to the provisions of Section 3.9, (i) on three Business Days' prior irrevocable notice by FI to the Agent, to continue or convert any type of Loans with LIBO Rate Loans, (ii) on one Business Day's prior irrevocable notice by FI to the Agent, to continue or convert any type of Loans with CD Rate Loans or (iii) with irrevocable notice by FI to the Agent by 10:30 a.m. on the date of such proposed continuation or conversion, to continue or convert any type of Loans with 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 FI to be continued or converted among the Banks in accordance with the respective amounts of their Commitments and the notice given to the Agent by FI shall specify the aggregate amount of Loans to be continued or converted; (b) in the case of a continuation or conversion of less than all Loans of FI, 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 FI 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 30 days may not be continued or converted with a CD Rate Loan and any portion of a Loan maturing or required to be prepaid in less than one month may not be continued or converted with a LIBO Rate Loan; (f) a CD Rate Loan or a LIBO Rate Loan may be continued or converted on the last day of the applicable Interest Period and, subject to Section 3.14, on any other day; (g) no Loan (or portion thereof) may be continued or converted into a CD Rate Loan or LIBO Rate Loan if, after such continuation or conversion, an aggregate of more than 20 separate CD Rate Loans and LIBO Rate Loans of any Bank and CD Rate Loans and LIBO Rate Loans (each as defined in the FTX Credit Agreement) of any FTX Lender would be outstanding under the Corporate Group Facility determined as set forth in Section 3.4(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, including clause (ii) of the proviso to Section 3.2; and (i) any portion of a LIBO Rate Loan or CD Rate Loan which cannot be converted into or continued as a LIBO Loan or CD Rate Loan by reason of (e) and (g) above shall be automatically converted at the end of the Interest Period in effect for such Loan into a Reference Rate Loan. The Agent shall communicate the information contained in each irrevocable notice delivered by FI pursuant to this Section 3.11 to the other Banks promptly after its receipt of the same. The Interest Period applicable to any CD Rate Loan or LIBO Rate Loan resulting from a continuation or conversion shall be specified by FI in the irrevocable notice of continuation or conversion delivered pursuant to this Section; provided, however, that if no such Interest Period shall be specified, FI shall be deemed to have selected an Interest Period in the case of a CD Rate Loan of 30 days' duration, and in the case of a LIBO Rate Loan of one month's duration. For purposes of this Section 3.11, notice received by the Agent from FI after 10:30 a.m., New York time, in the case of a request for a LIBO Rate Loan or a CD Rate Loan, or 2:00 p.m., New York time, in the case of a request for a Reference Rate Loan, on a Business Day shall be deemed to be received on the immediately succeeding Business Day. SECTION 3.12. Reserve Requirements; Change in Circumstances. (a) FI 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 FI), 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 FI directly for all amounts claimed pursuant to this Section 3.12(a). (b) Notwithstanding any other provision herein, if after the Amendment 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 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 with respect to any amount paid or to be paid by any Bank with respect to its LIBO Rate Loans or CD Rate Loans (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 FI Security Document with respect to an Event of Default); (ii) change the basis of taxation of payments to any Bank of principal of or interest on its LIBO Rate Loans or CD Rate Loans or other fees and amounts payable hereunder, or any combination of the foregoing (other than any franchise tax or tax or other similar governmental charges, fees or assessments based on the overall net income of any 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 FI Security Document with respect to an Event of Default); (iii) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with, for the account of or credit extended by any Bank (except any such reserve requirement which is reflected in the Adjusted CD Rate); (iv) impose on any such Bank or the London Interbank Market any other condition affecting this Agreement or LIBO Rate Loans or CD Rate Loans made by such Bank; or (v) 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 CD 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 CD 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 FI shall pay to such Bank 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 Amendment Closing Date pursuant to or arising out of the July 1988 report of the Basle Committee on Banking Regulations and Supervisory Practices entitled "International Convergence of Capital Measurement and Capital Standards", or the adoption after the Amendment Closing Date of any other law, rule, regulation or guideline regarding capital adequacy, or any change in any of the foregoing enacted after the Amendment Closing Date or in the interpretation or administration of any of the foregoing by any governmental authority, central bank or comparable agency 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 enacted after the Amendment Closing Date regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, 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 its obligations hereunder to a level below that which such Bank or such Bank's holding company could have achieved but for such 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 FI 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 3.18 (it being understood that a Bank may be reimbursed for any specific amount under only one such paragraph or Section), FI may, upon at least three Business Days' prior irrevocable written or telex notice to each of such Bank and the Agent, in whole permanently replace the Commitment of such Bank; provided that such notice must be given not later than the 30th day following the date of a demand for compensation made by such Bank; and provided that FI shall replace such Commitment with the commitment of a commercial bank satisfactory to the Agent. Such notice from FI shall specify an effective date for the termination of such Bank's Commitment which date shall not be later than the tenth 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), FI shall pay to the 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 3.18, as applicable. FI 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 CD Rate Loan or any part thereof or the accrual of any interest on any such Loan in accordance with the provisions of this clause (d) as set forth in Section 3.14. Upon the effective date of termination of any Bank's Commitment pursuant to this clause (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 FI 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 each Bank setting forth such amount or amounts as shall be necessary to compensate such Bank as specified in paragraph (a), (b) or (c) above, as the case may be, shall be delivered as soon as practicable to FI, and in any event within 90 days of the change giving rise to such amount or amounts, and shall be conclusive absent manifest error. FI 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. (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 clause (e) above 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 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. FI shall not be required to make any additional payment to any Bank pursuant to Section 3.12 (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 FI and the 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 3.12. FI agrees to furnish promptly to the Agent official receipts evidencing any withholding or deduction of any tax. SECTION 3.13. Change in Legality. (a) Notwithstanding anything to the contrary herein contained, if 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, then, by written notice to FI and to the Agent, such Bank may: (i) declare that LIBO Rate Loans will not thereafter be made by such Bank hereunder, whereupon FI 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 effective date of such notice as provided in paragraph (b) below, (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 3.10. (b) For purposes of Section 3.13(a), a notice to FI by any Bank shall be effective on the date of receipt by FTX. SECTION 3.14. Indemnity. FI shall indemnify each Bank against any loss or expense which such Bank may sustain or incur as a consequence of any failure by FI to fulfill on any Borrowing Date the applicable conditions set forth in Article VI, any failure by FI to borrow hereunder or to convert or continue any Loan hereunder after irrevocable notice of borrowing, continuation or conversion pursuant to Section 3.4 or 3.11 has been given, any payment, prepayment (except for any prepayment excluded by the terms of Section 5.1(i)) or conversion of a CD Rate Loan or LIBO Rate Loan to FI required by any other provision of this Agreement or otherwise made on a date other than the last day of the applicable Interest Period (whether by reason of voluntary prepayment, mandatory prepayment or otherwise), any default in payment or prepayment of the principal amount of any CD Rate Loan or LIBO Rate Loan to FI or any part thereof or interest accrued thereon, as and when due and payable (at the due date thereof, by irrevocable notice of prepayment or otherwise, including the occurrence of any Event of Default), including, but not limited to, any loss or reasonable expense sustained or incurred or to be sustained or incurred in liquidating or employing deposits from third parties acquired to effect or maintain such Loan or any part thereof as a CD Rate Loan or LIBO Rate Loan. Such loss or reasonable expense shall include, without limitation, an amount equal to the excess, if any, as reasonably determined by each affected Bank of (i) its cost of obtaining the funds for the Loan being paid, prepaid or converted or not borrowed, continued or converted (based on the Absolute Rate, Adjusted CD Rate or the LIBO Rate applicable thereto) for the period from the date of such payment, prepayment or conversion or failure to borrow, continue or convert to the last day of the Interest Period for such Loan (or, in the case of a failure to borrow, continue or convert, the Interest Period for such Loan which would have commenced on the date of such failure to borrow continue or convert) 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 Loan of the same type 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 FI and shall be conclusive absent manifest error. SECTION 3.15. Pro Rata Treatment. Except as permitted under any of Sections 3.9(b) or (c), 3.12, 3.13, 3.14, 3.18, 3.19 or 10.17, each borrowing under each type of Loan, each payment or prepayment of principal of the Promissory Notes, each payment of interest on the Promissory Notes, each other reduction of the principal or interest outstanding under the Promissory Notes, however achieved, including by setoff by any person, each payment of the Commitment Fees, each reduction of the Commitments and each continuation or conversion of Loans shall be made pro rata among the Banks in the proportions that their respective Commitments bear to the Total Commitment. Each Bank agrees that in computing such Bank's portion of any borrowing to be made hereunder, the Agent may, in its discretion, round each Bank's percentage of such borrowing to the next higher or lower whole dollar amount. SECTION 3.16. Sharing of Setoffs. Each Bank agrees that if it shall, through the exercise of a right of banker's lien, setoff or counterclaim against FI or either Guarantor, 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 (including any Indonesian law) or otherwise, obtain payment (voluntary or involuntary) in respect of any Promissory Note held by it as a result of which the unpaid principal portion of the Promissory Notes held by it shall be proportionately less than the unpaid principal portion of the Promissory Notes held by any other Bank, it shall be deemed to have simultaneously purchased from such other Bank at face value a participation in the Promissory Notes held by such other Bank, so that the aggregate unpaid principal amount of the Promissory Notes and participations in Promissory Notes held by each Bank shall be in the same proportion to the aggregate unpaid principal amount of all Promissory Notes then outstanding as the principal amount of the Promissory Notes held by it prior to such exercise of banker's lien, setoff or counterclaim was to the principal amount of all Promissory Notes outstanding prior to such exercise of banker's lien, setoff or counterclaim; provided, however, that if any such purchase or purchases or adjustments shall be made pursuant to this Section 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. FI and each Guarantor expressly consents to the foregoing arrangements and agrees that any Bank holding a participation in a Promissory Note 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 hereunder by FI or such Guarantors to such Bank as fully as if such Bank had made a Loan directly to FI in the amount of such participation. SECTION 3.17. Payments. (a) Except as otherwise provided in this Agreement, all payments and prepayments to be made by FI or either Guarantor 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, shall be made to the Agent at its Domestic Office for the account of the several Banks in immediately available funds. All such payments shall be made to the 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 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 Agent such Bank's Applicable Percentage of such Loan plus, if such payment is received by the 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 Agent at its Domestic Office, 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 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 FI 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 the provisions of Section 3.5 shall apply) 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 Agent shall have been notified by FI prior to the date on which any payment or prepayment is due hereunder (which notice shall be effective upon receipt) that FI does not intend to make such payment or prepayment, the Agent may assume that FI has made such payment or prepayment when due and the 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 FI has not in fact made such payment or prepayment to the Agent, such Bank shall, on demand, repay to the 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 Agent, at a rate per annum equal to the rate, in effect on such day, quoted by the Agent at its Domestic Office for the overnight "sale" to the other Banks of Federal funds. (e) All payments of the principal of or interest on the Loans or any other amounts to be paid to any Bank, the Agent or the FI Trustee 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 3.18. U.S. Taxes. (a) Except as required by law, any and all payments by FI hereunder shall be made, in accordance with Section 3.17, 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 Agent or any Bank (or any Transferee) and franchise taxes imposed on the Agent or any Bank (or Transferee) (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If as a result of a Change in Tax Law FI shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to the Banks (or any Transferee) or the 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 3.18) such Bank (or Transferee) or the 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) FI shall make such deductions and (iii) FI 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 3.18 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. "Change in Tax Law" means as to each Bank (or Transferee) the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (or in the application or official interpretation of any law), including an amendment, modification or revocation of an applicable tax treaty or a change in official position regarding the application or interpretation thereof, occurring after the Amendment Closing Date. (b) Within 30 days after the date of any payment of Taxes withheld by FI in respect of any payment to any Bank (or Transferee other than a participation holder) or the Agent, FI will furnish to the Agent, at its address referred to on the signature page, the original or a certified copy of a receipt evidencing payment thereof. (c) 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 deliver to FI such certificates, documents or other evidence, as required by the Code or Treasury Regulations issued pursuant thereto, including Internal Revenue Service Form 1001 or Form 4224 and any other certificate or statement of exemption required by Treasury Regulation Section 1.1441-1, 1.1441-4 or 1.1441-6(c) or any subsequent version thereof or successors thereto, 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 United States Federal withholding tax. Unless FI and the Agent have received forms or other documents satisfactory to them indicating that such payments hereunder or under the Promissory Notes are not subject to United States Federal withholding tax FI or the Agent shall withhold taxes from such payments at the applicable statutory rate. (d) FI 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 (c) above. (e) Any Bank (or Transferee) claiming any additional amounts payable pursuant to this Section 3.18 shall give notice to the Agent and FI within 90 days of the Change in Tax Law and use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by FI 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). The failure of any Bank (or Transferee) to give the required 90 day notice shall excuse FI from its obligation to pay additional amounts pursuant to this Section 3.18 incurred prior to the giving of such notice. (f) Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section 3.18 and Section 3.19 shall survive the payment in full of the principal of and interest on all Loans made hereunder. SECTION 3.19. Indonesian Taxes. (a) FI shall pay when due all Indonesian Taxes. (b) FI shall indemnify the Agent, the FI Trustee and each Bank (or Transferee) against, and shall reimburse the Agent, the FI Trustee and each Bank (or Transferee) upon demand for, any Indonesian Taxes paid by the Agent, the FI Trustee or such Bank (or Transferee) and any loss, liability, claim or expense (including interest, penalties, fines, surcharges and legal fees) which the Agent, the FI Trustee or such Bank may incur at any time arising out of or in connection with any failure of FI to make any payments of Indonesian Taxes when due. (c) All payments on account of the principal of or interest on the Loans made to FI, the Promissory Notes of FI and all other amounts payable by FI to or for the account of any Bank (or Transferee) or the Agent hereunder (including amounts payable under Section 3.19(a) or 3.19(b)) or to or for the FI Trustee under the FI Security Documents and to any of them under any other Loan Document shall be made free and clear of and without reduction by reason of any Indonesian Taxes. In the event that FI is required by any applicable law, decree or regulation to deduct or withhold Indonesian Taxes from any amounts payable on, under or in respect of this Agreement or any other Loan Document, FI shall make the required deduction or withholding, promptly pay the amount of such Indonesian Taxes to the appropriate taxing authorities and pay to the Agent such additional amounts as may be required, after the deduction or withholding of Indonesian Taxes, to enable each Bank (or Transferee), the FI Trustee or the Agent to receive from FI on the due date thereof, an amount equal to the full amount stated to be payable to such Bank (or Transferee), the FI Trustee or the Agent under this Agreement or any other applicable Loan Document. (d) Without in any way affecting FI's obligations under the other provisions of this Section 3.19, FI shall furnish to the Agent the originals or certified copies of all tax receipts in respect of each payment, deduction or withholding of Indonesian Taxes required to be made by applicable laws or regulations, within 45 days after the date on which each payment under this Agreement or any other Loan Document subject to Indonesian Taxes is made, and FI shall, at the request of any Bank (or Transferee), the FI Trustee or the Agent, promptly furnish to such Bank (or Transferee), the FI Trustee or the Agent any other information, documents and receipts that such Bank (or Transferee), the FI Trustee or the Agent may require to establish to its satisfaction that full and timely payment has been made of all Indonesian Taxes required to be paid hereunder. (e) FI will notify the Banks (through the Agent) promptly upon becoming aware of the application or imposition, or scheduled future application or imposition, of Indonesian Taxes; and each Bank (if not theretofore notified by FI) will notify FI of any such application or imposition which becomes known to its officers then supervising the Loans of such Bank hereunder as part of their normal duties, and of any change of its lending office or establishment or closing of a branch in Indonesia by such Bank which would give rise to the application or imposition of Indonesian Taxes. ARTICLE IV Representations and Warranties SECTION 4.1. Representations and Warranties. (i) FTX represents and warrants with respect to itself and FRP, (ii) the Guarantors and FI jointly and severally represent with respect to FI and (iii) the Guarantors jointly and severally represent with respect to FCX, in each case to each of the Banks, as follows: (a) Organization, Powers. Each of FTX, each Major Subsidiary and FCX (i) is duly organized, validly existing and in good standing under the laws of the State of Delaware and, in the case of FI, the laws of the Republic of Indonesia, (ii) has the requisite power and authority to own its property and assets (and, in the case of FI, has the requisite licenses to use real property not owned) 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 of FTX, FI and FCX 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, and FI has the power to borrow hereunder and to execute and deliver the Promissory Notes to be delivered by it. Each of FTX, each Major Subsidiary and FCX has all requisite corporate 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(h)) and the other Loan Documents to which it is or is to be, a party and the borrowings hereunder (i) have been duly authorized by all requisite corporate and, if required, stockholder action on the part of FI or the applicable Guarantor, as the case may be, and (ii) will not (A) violate (x) any Governmental Rule or the certificate or articles of incorporation or other constitutive documents or the By-laws 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 Pledge Agreement, the Security Agreement and the FI Security Documents. (c) Governmental Approval. Except for those consents, approvals and registrations listed on Schedule 4.1(c) 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 FI or either Guarantor, as appropriate, of this Agreement or any other Loan Document to which it is, or is to be, a party or the borrowings hereunder by FI. 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 any Guarantor or Major Subsidiary, 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 FI and each Guarantor, as applicable, and the Pledge Agreement, the Security Agreement and each other Loan Document to be entered into after the Amendment Closing Date will, upon its execution and delivery, constitute the legal, valid and binding obligations of FI or such Guarantor, as applicable, 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 income and changes in retained earnings and cash flow as of and for the fiscal years ended December 31, 1991 and 1992, all audited and certified by Arthur Andersen & Co., independent public accountants, included in FTX's Annual Report on Form 10-K for the year ended December 31, 1992 (the "1992 Form 10-K"), and unaudited consolidated balance sheets and statements of income and cash flow as of and for the fiscal quarter ended March 31, 1993 included in FTX's Quarterly Report on Form 10-Q for the quarter ended March 31, 1993. In addition, FTX has heretofore furnished to each of the Banks consolidated balance sheets and statements of income and cash flow for each Major Subsidiary and FCX as of and for the fiscal years ended December 31, 1991 and 1992, all audited and certified by Arthur Andersen & Co and unaudited consolidated balance sheets and statements of income and cash flow for each Major Subsidiary and FCX as of and for the fiscal quarter ended March 31, 1993. All such balance sheets and statements of income and cash flow present fairly the financial condition and results of operations of FTX and the Subsidiaries or of either Major Subsidiary or FCX, 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 the Subsidiaries or of either Major Subsidiary or FCX, as of the dates thereof 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, 1992, in the businesses, assets, operations, prospects or condition, financial or otherwise, of (i) FTX, (ii) FRP, (iii) FI, (iv) FCX or (v) FTX and the Subsidiaries taken as a whole. (f) Litigation; Compliance with Laws; etc. (i) Except as disclosed in the 1992 Form 10-K and any subsequent reports filed as of 20 days prior to the Amendment 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 FTX, threatened against or affecting FTX or any Subsidiary or the businesses, assets or rights of FTX 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 (including, in the case of FI, the Contract of Work) 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, either Major Subsidiary or FCX 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, either Major Subsidiary or FCX, or impair the validity or enforceability of, or the ability of FTX, either Major Subsidiary or FCX to perform its obligations under this Agreement or any of the other Loan Documents to which such Person is a party. (ii) Neither FTX 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 materially adverse effect on the businesses, assets, operations or condition, financial or otherwise, of FTX, either Major Subsidiary or FCX. Without limitation of the foregoing, FTX and each Subsidiary has complied with all Governmental Rules (including, in the case of FI, all such requirements under the Contract of Work and under environmental Governmental Rules of Indonesia) relating to environmental pollution or to environmental regulation or control or to employee health or safety where any such noncompliance could have a materially adverse effect on the businesses, assets, operations or condition, financial or otherwise, of FTX, either Major Subsidiary or FCX. Neither FTX nor any Subsidiary has received notice of any material failure so to comply. FTX's and the Subsidiaries' plants do not handle any hazardous wastes, hazardous substances, hazardous materials, toxic substances, toxic pollutants or substances similarly denominated, as those terms or similar terms are used in the Resource Conservation and Recovery Act, the Comprehensive Environmental Response Compensation and Liability Act, the Hazardous Materials Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or any other applicable law relating to environmental pollution or employee health and safety (and, in the case of FI, the equivalent substances to which the Contract of Work or the environmental Governmental Rules of Indonesia apply), in violation of any law or any regulations promulgated pursuant thereto where any such violation could have a materially adverse effect on the businesses, assets, operations or condition, financial or otherwise, of FTX, either Major Subsidiary or FCX. FTX is aware of no events, conditions or circumstances involving environmental pollution or contamination or employee health or safety that could reasonably be expected to result in material liability on the part of FTX or any Subsidiary. (g) Title, etc. FTX, each Major Subsidiary and FCX 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 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 FTX 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 and FI has the requisite licenses under the Governmental Rules of Indonesia to use the real property on which it conducts its business. (h) Federal Reserve Regulations; Use of Proceeds. (i) Neither FTX 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) FI will use the proceeds of all Loans made to it for its general corporate purposes, including the making of acquisitions. (iv) As of each date when this representation is made or deemed made, either FTX (i) owns directly and beneficially 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 (after giving effect to any Credit Event, FTX Credit Event, borrowing pursuant to the KfW Credit Agreement or Borrowing (as such term is defined in the FM Credit Agreement) or other increase in such credit occurring on such date and to any other obligations secured by such Margin Stock) or (ii) owns directly and beneficially assets other than 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 on such date (after giving effect to any Credit Event, FI Credit Event, borrowing pursuant to the KfW Credit Agreement or Borrowing (as such term is defined in the FM Credit Agreement) or other increase in such credit occurring on such date and to any other obligations secured by such Other Collateral. There are no Liens on such Margin Stock or such Other Collateral, as the case may be (other than those created by the Pledge Agreement), nor is there any Debt or any other obligation (other than the loans under the FM Credit Agreement, the Corporate Group Loans, the loans made pursuant to the KfW Credit Agreement, the Permitted Secured Swaps, the Pel-Tex Debt and Permitted Swaps (as such terms are defined in the FM Credit Agreement)) secured, directly or indirectly (within the meaning of Regulation U), by such Margin Stock or Other Collateral. (i) Taxes. FTX and the Subsidiaries have filed or caused to be filed all Federal, state and local tax returns and all Indonesian 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 FTX or any Subsidiary is contesting in good faith by appropriate proceedings, and with respect to which FTX or such Subsidiary shall, to the extent required by GAAP, have set aside on its books adequate reserves. (j) Employee Benefit Plans. FTX and each of its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the regulations and published interpretations thereunder. No Reportable Event has occurred with respect to any Plan as to which FTX or any ERISA Affiliate was required to file a report with the PBGC, and the present value of all vested benefit liabilities under each Plan maintained by FTX or an ERISA Affiliate (based on those assumptions used to fund such Plan) did not, as of the last annual valuation date applicable thereto, exceed by $25,000,000 the value of the assets of such Plan. Neither FTX nor any ERISA Affiliate has incurred any Withdrawal Liability that materially adversely affects the financial condition of FTX and its ERISA Affiliates taken as a whole. Neither FTX nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, where such reorganization has resulted or can reasonably be expected to result in an increase in the contributions required to be made to such Plan that would materially and adversely affect the financial condition of FTX and its ERISA Affiliates taken as a whole. (k) Investment Company Act. Neither FTX nor any Subsidiary is an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940. (l) Public Utility Holding Company Act. Neither FTX 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. (m) Subsidiaries. Schedule I constitutes a complete and correct list, as of the Amendment 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. FTX owns on such date, free and clear of all Liens, the percentage of voting shares or partnership interests outstanding of the Subsidiaries shown on Schedule I, and all such shares or partnership interests are validly issued and fully paid. (n) Assigned Agreements. Schedule 4.1(n) is a complete and correct list, as of the Amendment Closing Date, of each Long-Term Concentrate Sales Agreement (copies of which have heretofore been furnished to the Agent). FI is not in default in any material respect in its obligations under any Assigned Agreement nor is any counterparty to any such agreement in default in its obligations in any respect that could materially and adversely affect the ability of FI to perform its obligations under the Corporate Group Facility. (o) FI Security Documents. The Liens created by the FI Security Documents are in full force and effect and constitute first priority (except for Liens expressly permitted by Section 5.2(d), perfected security interests in favor of the FI Trustee for the benefit of the Banks in the property and assets stated to be subject to each such FI Security Document. (p) No Material Misstatements. No information, report (including any Borrowing Base Certificate and any exhibit, schedule or other attachment thereto or other document delivered in connection therewith), financial statement, exhibit or schedule prepared or furnished by FI or FTX to the Agent, any Bank or the FI Trustee 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. ARTICLE V Covenants SECTION 5.1. Affirmative Covenants of FTX. So long as any Bank shall have any Loan Exposure or any commitment to make a Loan hereunder, FTX agrees that, unless the Required Banks shall have otherwise consented in writing: (a) Financial Statements, etc. FTX shall furnish each Bank: (1) within 95 days after the end of each fiscal year of FTX, a consolidated balance sheet of FTX and its Subsidiaries, of each Major Subsidiary and of FCX as at the close of such fiscal year and consolidated statements of income and changes in retained earnings or partners' capital and cash flow of FTX and the Subsidiaries, of each Major Subsidiary and of FCX for such year, with the opinion thereon of Arthur Andersen & Co. or other independent public accountants of national standing selected by FTX; (2) within 50 days after the end of each of the first three quarters of each fiscal year of FTX, a consolidated balance sheet of FTX and its Subsidiaries, of each Major Subsidiary and of FCX as at the end of such quarter and consolidated statements of income of FTX and the Subsidiaries, of each Major Subsidiary and of FCX for such quarter and 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) promptly after their becoming available, (a) copies of all financial statements, reports and proxy statements which FTX, either Major Subsidiary or FCX shall have sent to its stockholders generally, (b) copies of all registration statements (excluding registration statements relating to employee benefit plans) and regular and periodic reports, if any, which FTX, either Major Subsidiary or FCX 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 agency pursuant to ERISA with respect to each Plan of FTX or any of the Subsidiaries; (4) within 95 days after the end of each fiscal year of FTX, a certificate by the Treasurer or other authorized Financial Officer of FTX, to the effect that no Event of Default or Default has occurred and is continuing, or if any Event of Default or Default has occurred and is continuing, describing the same in reasonable detail; (5) promptly upon the occurrence of any Termination Event, Event of Default, or any material default in the performance of any of its agreements containeduineSectiona5.1dora5.2,uther any other Loan Document (other than the FTX Credit Agreement), or the commencement of any proceeding regarding FTX or any Subsidiary under any Federal or state bankruptcy law, notice thereof, describing the same in reasonable detail; (6) at the time of provision of the financial statements referred to in clauses (1) and (2) above, an update of Schedule I to correct, add or delete any required information; (7) all the financial statements and other documents required to be furnished to the FTX Lenders pursuant to Section 4.1(a) of the FTX Credit Agreement and, so long as the guarantee by FTX of FM Properties' obligations under the FM Credit Agreement is in effect, all the financial statements and other documents required to be furnished to the FM Lenders pursuant to Section 4.1(a) of the FM Credit Agreement; provided, however, that FTX shall not be required to furnish duplicate copies of such financial statements or other documents to Banks which are also FTX Lenders or FM Lenders, as applicable; and (8) from time to time, such further information regarding the business, affairs and financial condition of FTX or any Subsidiary as any Bank may reasonably request. At the time FTX furnishes financial statements pursuant to the foregoing clauses (1) and (2), FTX will also furnish each Bank a certificate by the Treasurer or other authorized Financial Officer of FTX setting forth the calculation of: (a) the current ratios as determined in accordance with Section 5.2(e), (b) the fixed charge ratios as determined in accordance with Section 5.2(f), (c) the Cash Flow Ratio, (d) if the Facility is then an HLT, the calculation of the ratio set forth in Section 5.2(q) and (e) the Available Borrowing Base; provided that the Cash Flow Ratio shall be provided within 50 days of the end of each fiscal quarter. (b) Taxes and Claims. FTX shall, and shall cause each Subsidiary to, pay and discharge all taxes, assessments and governmental charges or levies, including Indonesian Taxes, 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 FTX 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 FTX 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. FTX shall, and shall cause each Major Subsidiary and FCX to, preserve and maintain its corporate 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. FTX 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 FTX, either Major Subsidiary or FCX, except where contested in good faith and by proper proceedings and with respect to which FTX or such Subsidiary shall have, to the extent required by GAAP, set aside on its books adequate reserves. (e) Litigation. FTX 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 FTX or any Subsidiary, 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 any Guarantor or Major Subsidiary or the ability of FI or either Guarantor to comply with their obligations under the Loan Documents. (f) ERISA. FTX shall, and shall cause each Subsidiary to, comply in all material respects with the applicable provisions of ERISA and furnish to the Agent (i) as soon as possible, and in any event within 30 days after any Responsible Officer of FTX or any ERISA Affiliate knows or has reason to know that any Reportable Event with respect to any Plan has occurred that alone or together with any other Reportable Event with respect to the same or another Plan could reasonably be expected to result in liability of FTX to the PBGC in an aggregate amount exceeding $10,000,000, a statement of a Financial Officer of FTX setting forth details as to such Reportable Event and the action that FTX proposes to take with respect thereto, together with a copy of the notice of such Reportable Event, if any, given to the PBGC, (ii) promptly after receipt thereof, a copy of any notice FTX or any ERISA Affiliate may receive from the PBGC relating to the intention of the PBGC to terminate any Plan or Plans or to appoint a trustee to administer any such Plan, (iii) within 10 days after a filing with the PBGC pursuant to Section 412(n) of the Code of a notice of failure to make a required installment or other payment with respect to a Plan, a statement of a Financial Officer of FTX setting forth details as to such failure and the action that FTX proposes to take with respect thereto, together with a copy of such notice given to the PBGC and (iv) promptly and in any event within 30 days after receipt thereof by FTX or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy of each notice received by FTX or any ERISA Affiliate concerning the imposition of Withdrawal Liability by a Multiemployer Plan. (g) [Intentionally left blank] (h) Security. (i) FI at all times shall comply with the provisions of the FI Security Documents and maintain in full force and effect all the rights, powers and benefits of the FI Trustee under the FI Security Documents in accordance with their terms, including (x) the validity and effectiveness of the powers of attorney granted by the Surat Kuasa and the Fiduciary Power and the fiduciary transfers effectuated by the Fiduciary Transfer and the Fiduciary Assignment and (y) maintenance of the security interest of the FI Trustee in the collateral required to be subjected to the Liens created by the FI Security Documents as a perfected first priority security interest as provided therein; and (ii) in the event (A) the aggregate principal amount of outstanding Corporate Group Loans exceeds for a period of 20 or more consecutive days the Available Borrowing Base, (B) an Event of Default shall occur and continue for a period of 20 or more consecutive days, or (C) any of the FM Lenders, the Pel-Tex Lenders or the FTX Lenders shall receive or be entitled to receive and have requested receipt of security or liens in or on any property of FTX or any of its Subsidiaries (other than the initial mortgages and security interests granted by FTX pursuant to Section 5.1(d) of the FM Credit Agreement and any security interests granted by FI to the FTX Lenders) as security for any amount owing under the FM Credit Agreement, the Pel-Tex Agreements or the Pel-Tex Bank Agreement or the FTX Credit Agreement, FTX and each of its wholly-owned Restricted Subsidiaries (other than FRP, FCX and FI and any Subsidiary of any of them) shall, subject to the FTX Intercreditor Agreement, provide the Banks, as security for the amounts owed by FTX hereunder, with the same security interests and pledges, in each case upon the same terms, as are provided by FTX and its wholly-owned Restricted Subsidiaries to the FTX Lenders, as set forth in Section 5.1(h)(ii)(ii) of the FTX Credit Agreement. (i) Insurance. FTX 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. The proceeds of any political risk insurance of FCX shall be applied promptly to the prepayment of the Loans of FI and the Loans pursuant to the FI Credit Agreement (it being understood that the allocation of such prepayments among such Loans shall be determined solely by FCX). Prepayments pursuant to this Section 5.1(i) shall not be subject to Section 3.14 unless the occurrence that entitles FCX to such insurance proceeds results in an Event of Default. (j) Access to Premises and Records. FTX 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 and its independent certified public accountants or other parties preparing consolidated or consolidating statements for it or on its behalf. (k) FI Security Arrangements. FI will (i) promptly assign all Long-Term Concentrate Sales Agreements and the proceeds from all FI Receivables Purchase Agreements in effect from time to time to the FI Trustee under, and in accordance with, Article III of the FI Trust Agreement and (ii) furnish to the Agent and each Bank copies of each Long-Term Concentrate Sales Agreement and FI Receivables Purchase Agreement entered into after the Amendment Closing Date, and each amendment, waiver or supplement to any Concentrate Sales Agreement which after such amendment, waiver or supplement would be a Long-Term Concentrate Sales Agreement, in each case promptly after the execution and delivery thereof. FI may permit Long-Term Concentrate Sales Agreements to expire or terminate in accordance with their terms. (l) Protection of Contract Rights. FI will not terminate, suspend, amend or grant waivers of any provisions of any of the Assigned Agreements or the FI Security Documents without the prior written consent of the Required Banks; provided, however, that FI may amend or waive provisions in any Concentrate Sales Agreement so long as such amendment or waiver will not materially adversely affect the business, financial condition or operations of FI or any rights of the FI Trustee or the Banks. FI will promptly furnish to the Banks and the Agent copies of any amendments to or waivers or supplements of the Assigned Agreements and the FI Security Documents. FI shall take all steps necessary or advisable to protect its rights (and the rights of the FI Trustee) under the Assigned Agreements and FI Security Documents. (m) Source of Interest. FI (i) will conduct business so that interest paid on the Loans of FI to any Bank (or Transferee) which is not a "related person" to FTX within the meaning of Section 861(c)(2)(B) of the Code as in effect on the Amendment Closing Date will be deemed to be income from sources without the United States within the meaning of Sections 861(a)(1)(A) and 861(c) of the Code as in effect on the Amendment Closing Date and (ii) will use its best efforts (without undue cost) to conduct business so that interest paid on the Loans of FI to any Bank (or Transferee) which is not a related person to FTX within the meaning of Section 861(c)(2)(B) of the Code (as it may be amended or substituted after the Amendment Closing Date) will be deemed to be income from sources without the United States within the meanings of Sections 861(a)(1)(A) and 861(c) of the Code (as it may be amended or substituted after the Amendment Closing Date). (n) Further Assurances. FI and the Guarantors 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 and any Indonesian equivalents), which may be required under applicable law, or which the Required Banks, the Agent or the FI Trustee may reasonably request, in order to effectuate the transactions contemplated by this Agreement and the FI Security Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created by the FI Security Documents and, if and when executed, the Security Agreement and the Pledge Agreement. (o) Covenants regarding FI and FCX. FTX shall cause FI and FCX to perform its covenants set forth in Section 5.3. SECTION 5.2. Negative Covenants of FTX. So long as any Bank shall have any Loan Exposure or any commitment to make a Loan hereunder, FTX agrees that, without the prior written consent of the Required Banks: (a) Conflicting Agreements. FTX shall not and shall cause its Restricted Subsidiaries not to enter into any agreement (other than this Agreement, the FTX Credit Agreement and the KfW Credit 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 persons which would prohibit or restrict (i) in the case of the Restricted Subsidiaries, the payments of dividends or other distributions (other than restrictions existing on the Amendment Closing Date) 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 permitted pursuant to Section 5.2(d)(xii)). (b) Borrowing Base Limits. Except to the extent expressly permitted by Section 2.4 of the FTX Credit Agreement or Section 3.10(c), FTX shall not at any time permit the sum of the Corporate Group Loan Exposure and all Borrowing Base Debt to exceed the then effective Borrowing Base. (c) Consolidation or Merger; Disposition of Assets and Capital Stock. FTX shall not, and shall not permit any Restricted Subsidiary to, merge into or consolidate with any corporation, or sell, lease, transfer or otherwise dispose of all or any substantial part of the assets of FTX or of any Restricted Subsidiary, including, without limitation, the rights of FI under the Contract of Work (except for (u) the IMC-Agrico Transfer and investments permitted by Section 5.2(r), (v) the ALatief-FI Transfer and investments permitted by Section 5.2(s), the Power Facilities Transfer and the transfer in respect of Contract Area Block B referred to in Section 8.1(i), (w) dispositions of accounts receivable, Permitted Investments and inventory in the ordinary course of business, provided that the proceeds of any sale of accounts receivable by FI are deposited in the Sales Proceeds Account (as defined in the FI Trust Agreement), (x) dispositions of obsolete or worn-out property, or real estate not used or useful in its business, (y) subject to the last sentence of Section 5.2(j) and to Sections 5.2(o) and (p), dispositions of assets by FTX or a Restricted Subsidiary to another Restricted Subsidiary or FTX and subject to Section 5.2(l), dispositions of assets by a Restricted Subsidiary to 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, and (z) to the extent permitted by Section 5.2(q), the payment of cash dividends by FTX or any Restricted Subsidiary and dividends by FTX consisting of stock or units of the Subsidiaries), whether now owned or hereafter acquired; except that: (i) FTX or any Restricted Subsidiary may merge or liquidate any corporation (other than, in the case of a Restricted Subsidiary, any Guarantor or Major Subsidiary) into itself; (ii) any Restricted Subsidiary (other than FCX and either Major Subsidiary) may be merged into any other corporation; provided that such corporation, immediately following such merger, shall be deemed a Restricted Subsidiary; and (iii) subject to the last sentence of Section 5.2(j), FTX or any Restricted Subsidiary may sell or otherwise dispose of any assets or securities of any Subsidiary; provided, however, that the gross fair market value of the consideration or other amounts payable to or receivable by FTX or such Restricted Subsidiary with respect to such sales or other dispositions is deemed to be Net Proceeds; provided, however, that in the case of a merger permitted by clause (i) above, immediately thereafter and giving effect thereto, FTX or, as the case may be, a Restricted Subsidiary would be the surviving corporation and, in the case of a merger permitted by clause (i) or clause (ii) above or of any disposition of assets or securities permitted by clause (iii) 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 (iii) above shall be permitted only if FTX or the respective Restricted Subsidiary shall receive fair consideration therefor, as determined by the Board of Directors of FTX or of such Restricted Subsidiary, as the case may be. It is understood and agreed that no transaction pursuant to a Deemed Lease shall be considered a disposition of assets within the meaning of this Section 5.2(c). (d) Liens. FTX shall not, nor shall it permit any Restricted Subsidiary to, create or suffer to exist any Lien upon any of its respective properties, revenues or assets, now owned or hereafter acquired, securing any indebtedness or obligation, except: (i) materialmen's, suppliers', tax and other like Liens arising in the ordinary course of FTX's 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 FTX's 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 Amendment Closing Date by FTX or any Restricted Subsidiary securing only Debt of FTX or any such Restricted Subsidiary that is otherwise without recourse to FTX or any such Restricted Subsidiary or any of its or their properties or assets; provided, however, that FTX complies with Section 5.2(g)(v); (iii) Liens, existing at the time of the acquisition by FTX 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 FTX or a Restricted Subsidiary, on such capital stock or assets so acquired or on the assets of the corporation so merged into FTX 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 securing Debt referred to in Section 5.2(g)(x); (v) Liens in favor of the Agent or the Banks or in favor of the Collateral Agent as provided in the FTX Intercreditor Agreement, Liens in favor of the Pel-Tex Lenders as permitted by the FTX Intercreditor Agreement, Liens, if any, in favor of the FTX Agent or the FTX Lenders or in favor of the Collateral Agent as provided in the FRP Security Agreement, the FRP Pledge Agreement, the FRP Subsidiary Security Agreement or the FRP Subsidiary Pledge Agreement, each as defined in the FTX Credit Agreement and Liens in favor of the Banks, the FTX Lenders, and the FI Trustee under the FI Security Documents, all as contemplated by Section 5.1(h) of the FTX Credit Agreement; (vi) Liens listed on Schedule 5.2(d) hereto securing obligations of FTX or a Restricted Subsidiary under Deemed Leases; (vii) Liens securing the Debt referred to in paragraphs (iv), (v), (viii) and (ix) of Section 5.2(g); (viii) Liens of lessors of property (in such capacity) leased by FTX or a Restricted Subsidiary pursuant to an Operating Lease, which Lien is limited to the property leased thereunder; (ix) the reciprocal collateral mortgages granted by FRP on its interests in Main Pass 299 sulphur and oil and gas interests to its joint venture partners; (x) 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 FTX or any of its Subsidiaries; (xi) Liens securing Permitted Secured Swaps between FI and any Bank; and (xii) extensions, renewals and replacements of Liens referred to in paragraphs (i), (ii), (iv), (vii), (viii), (ix), (x) and (xi) 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 Ratios. FTX shall not fail to maintain, as of the last day of each fiscal quarter, consolidated current assets of FTX and its consolidated Subsidiaries (other than Nonrestricted Subsidiaries but including minority interests) in an amount at least equal to the amount of consolidated current liabilities of FTX and its consolidated Subsidiaries (other than Nonrestricted Subsidiaries but including minority interests) and each Major Subsidiary shall not fail to maintain (on an individual, stand alone basis), on the last day of each fiscal quarter, consolidated current assets of it and its consolidated Subsidiaries (other than Nonrestricted Subsidiaries but including minority interests) at least equal to the amount of consolidated current liabilities of it and its consolidated Subsidiaries (other than Nonrestricted Subsidiaries but including minority interests). 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 (excluding shares which are, and which are held as, marketable securities) and advances to Nonrestricted Subsidiaries and other firms or companies in which FTX has a material investment, direct or indirect, or which have a direct or indirect material investment in FTX, shall not be included in current assets; (ii) current assets shall be increased by the portion of the Unused Net Commitment Amount which, under the terms of the Corporate Group Facility, will, if not sooner terminated or drawn down by FI or any Borrower (as defined in the FTX Credit Agreement), remain outstanding for at least twelve months following the time of determination; provided that if such availability is required by any Borrower (as defined in the FTX Credit Agreement) to comply with Section 5.2(e) of the FTX Credit Agreement, such availability will be considered to be a utilization of the Commitments (and consequently unavailable to FI for purposes of this paragraph (e)); and (iii) the current portion of long-term Debt shall not be included in current liabilities. (f) Fixed Charge Ratios. FTX and each Major Subsidiary shall not permit its respective Fixed Charge Ratio to be less than 1.25 to 1.00 at the end of any fiscal quarter. (g) Debt. Neither FTX nor any Restricted Subsidiary shall incur, create, assume or permit to exist any Debt of any of them except: (i) (A) up to $373,000,000 aggregate principal amount of FTX's 6.55% Convertible Subordinated Notes Due 2001; (B) $150,000,000 aggregate principal amount of FTX's 10-7/8% Senior Subordinated Debentures due 2001; (C) $750,000,000 aggregate face amount of FTX's Zero Coupon Convertible Subordinated Debentures Due 2006. (D) $1,035,000,000 aggregate face amount of FCX's Liquid Yield Option Notes due 2011 (Zero Coupon Subordinated Exchangeable Notes, "LYONS") or, subject to Section 2.2(IV) of the FTX Credit Agreement, unsecured refinancings thereof not involving an increase in the aggregate principal amount over the then accreted principal amount of the LYONS outstanding; (E) up to $75,000,000 aggregate principal amount outstanding pursuant to the KfW Credit Agreement; and (F) up to $800,000,000 aggregate principal amount outstanding pursuant to the FTX Credit Agreement. (ii) (A) Debt of FTX owing to a Subsidiary, provided that such Debt is subordinated to the Loans on the terms of Exhibit A hereto if the original term of such Debt is in excess of six months or could be extended at the option of FTX beyond six months from the original date of such Debt; (B) Debt of a Major Subsidiary owing to FTX so long as FTX does not have any Loans outstanding (whether made before or after the incurrence of Debt by such Major Subsidiary); (C) subject to Sections 5.2(o) and (p), Debt of FI owing to FCX or FCX owing to FI; and (D) subject to Sections 5.2(o) and (p), Debt of a Restricted Subsidiary other than a Major Subsidiary owing to FTX or any other Restricted Subsidiary; (iii) Debt incurred by FTX in any amount and Debt incurred by each Major Subsidiary not in excess of $30,000,000 in the aggregate for such Major Subsidiary, in each case pursuant to commercial paper or uncommitted lines of credit with commercial banks having a maturity of less than six months; (iv) purchase money indebtedness of FTX and any Restricted Subsidiary incurred in the ordinary course of business; (v) Debt of FTX and any Restricted Subsidiary secured by Liens described in Section 5.2(d)(ii) that is otherwise nonrecourse to FTX and each Restricted Subsidiary if not less than 20 days prior to the date such Debt is incurred, created or assumed FTX or such Restricted Subsidiary delivers to the Required Banks the terms of such Debt relating to the nonrecourse nature of such Debt and the Required Banks have not, on or prior to such date, given written notice to FTX or such Restricted Subsidiary of their objection thereto; (vi) Indebtedness for Borrowed Money (other than Guarantees and Capitalized Leases) of FTX that is subordinated to the Loans and FTX's guarantee pursuant to Section 9.1 if (A) 30 days prior to the incurrence of such Indebtedness for Borrowed Money, FTX delivers to each Bank the terms of the subordination provisions governing such Indebtedness for Borrowed Money, (B) FTX has not, prior to such incurrence, received notice that Banks having Commitments (as defined in the FTX Credit Agreement) representing at least 33-1/3% of the aggregate Commitments under and as defined in the FTX Credit Agreement have objected to such subordination provisions and (C) such Indebtedness for Borrowed Money has a maturity date of not less than ten years, with no scheduled repayments or amortization for at least ten years after such Indebtedness for Borrowed Money is incurred; (vii) Guarantees by FTX or any Restricted Subsidiary of (A) Debt (other than non-recourse Debt referred to in Section 5.2(g)(v)) or obligations of a Restricted Subsidiary or (B) Debt or obligations of Nonrestricted Subsidiaries or any other Person to the extent permitted by paragraphs (l), (r) and (s) of this Section 5.2; (viii) Capitalized Leases (including those resulting from sale and leaseback transactions) of FTX or any Restricted Subsidiary if at least 30 days prior to entering into any such Capitalized Lease, FTX or such Restricted Subsidiary delivers to each Bank the terms thereof and, in the case of FI (i) such Capitalized Leases are in connection with financings of the port facility, power plants, aircraft, ships, infrastructure assets or vehicles and (ii) the aggregate amount of any Capitalized Leases of FI in connection with financings of vehicles is not in excess of $25,000,000; and (ix) recourse liability of FTX or any Restricted Subsidiary in connection with the sale of accounts receivable by FTX or such Restricted Subsidiary, as the case may be; provided, however, that such recourse liability shall not be in excess of the sales price of the receivables so sold and, in the case of a sale of accounts receivable by FI, the proceeds of such sale are deposited in the Sales Proceeds Account in accordance with Article III of the FI Trust Agreement; and (x) other Debt not referred to in paragraphs (i) through (ix) of this Section 5.2(g), in an aggregate principal amount not exceeding $50,000,000. (h) [Intentionally left blank.] (i) Convertible Debt Payments. FTX may not make any payment on the Debt referred to in Section 5.2(g)(i)(A) and (C) except (x) in common stock of FTX with cash payment for fractional shares and (y) otherwise in an aggregate amount not in excess of $15,000,000. (j) Ownership of Subsidiaries. FTX shall not at any time directly or indirectly own shares or units of voting stock or interests having less than (x) 40% ownership interest in each of FRP and FI, (y) 50.1% ownership interest in FCX and (z) such voting power as provides effective control of the policy and direction of FRP, FCX and FI. FCX shall not at any time directly or indirectly own shares of voting stock or interests having less than 50.1% ownership interest in FI, including, so long as Section 4(c) of the Indocopper Shareholders Agreement and the definitions related thereto are in effect and have not been amended, shares of voting stock or interests held through P.T. Indocopper Investama Corporation. FTX shall own its interests in FRP, FCX and FI, and FCX shall own its interests in FI, free and clear of all Liens, except as contemplated by Section 5.1(h). FTX shall promptly notify the Agent in the event there occurs any significant decrease in its or FCX's percentage ownership of such voting power below that indicated in the most recent Borrowing Base Certificate or, in the case of its ownership, any decrease in such percentage interest below 50%. The ownership by FTX of equity interests in FRP shall be direct and not through any intervening entity. The ownership by the Guarantors of common stock of FI shall be direct and not through any intervening entity, except for the percentage of common stock held by FCX on the Amendment Closing Date through P. T. Indocopper Investama Corporation. FTX shall at no time permit any significant percentage of the assets of either Major Subsidiary or FCX to be transferred to another Subsidiary which is not a Restricted Subsidiary directly owned by FTX; provided, however, that the foregoing shall not prohibit the IMC-Agrico Transfer, the ALatief-FI Transfer, the Power Facilities Transfer or the transfer referred to in Section 8.1(i) in respect of Contract Area Block B. (k) Fiscal Year. FTX shall not change its fiscal year to end on any date other than December 31. (l) Investments in Nonrestricted Subsidiaries and Persons Not Subsidiaries. FTX and the Restricted Subsidiaries shall not make or permit to exist (x) any Guarantee by FTX or a Restricted Subsidiary of the Debt of any Person which is not a Restricted Subsidiary 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 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, any Nonrestricted Subsidiaries the aggregate outstanding amount of which under this clause (y) and Guarantees under clause (x) at any time exceeds by more than $50,000,000 the largest aggregate amount thereof outstanding at any time in the next preceding fiscal year of FTX; provided that, notwithstanding the provisions of clauses (x) and (y) above, FTX may (i) Guarantee the FM Properties Indebtedness and, so long as no Default or Event of Default shall have occurred and be continuing (or would result thereupon), make advances, loans and equity contributions to FM Properties, (ii) Guarantee obligations of FM Properties pursuant to any Permitted Swap (as defined in the FM Credit Agreement) provided that such Guarantee is granted on the same terms as FTX's Guarantee of the FM Properties Indebtedness, (iii) consummate the ALatief-FI Transfer and consummate Guarantees of ALatief-FI's initial financing as permitted pursuant to Sections 5.2(s)(i) and 5.2(s)(vii) and (iv) make investments as permitted under Section 5.2(r), all of which shall not be included in the calculation above regarding the prohibition on investments in Nonrestricted Subsidiaries and other entities in excess of $50,000,000 of the preceding year's aggregate investment. (m) Federal Reserve Regulations. FTX will not, and will cause the Major 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 of the Board (collectively, the "Margin Regulations"). FTX will not, and will cause the Major 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 4.1(h) at any time to be other than true and correct. In the event that the Company at any time believes that there exists a reasonable possibility that it will become unable to make the representation set forth in Section 4.1(h)(iv), and alternative methods for complying with the Margin Regulations in connection with this Agreement are available, the Lenders and the Company shall promptly enter into negotiations with a view to amending this Agreement to provide for such alternative methods of compliance. (n) Certain Debt Agreements. FTX shall not, without the prior written consent thereto of the Required Banks, (x) agree to any increase in the principal amount of, or interest rate on, or security for, any of the Debt referred to in Section 5.2(g)(i)(A)-(E) or (y) 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 Debt referred to in Section 5.2(g)(i)(A) and (B). (o) Investments in the Major Subsidiaries. Neither FTX nor any of its Restricted Subsidiaries shall 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 or acquire any interest whatsoever in the Major Subsidiaries or any Subsidiary of either of them, other than (i) investments existing on the Amendment Closing Date in shares of common stock or units of such Major Subsidiary, (ii) Debt permitted by Section 5.2(g)(ii), (iii) open market purchases of Depositary Units of FRP to the extent permitted by Section 5.2(q), (iv) purchases by FTX of equity interests in FRP sufficient to allow capital expenditures by FRP of up to $30,000,000 per annum, (v) investments by each Major Subsidiary and its Subsidiaries in Subsidiaries of such Major Subsidiary, (vi) investments in FI expressly contemplated by the Note Purchase Agreement dated as of July 2, 1991 among FCX and FI, (vii) investments in FI as a result of the issuance of common stock of FI in exchange for or discharge of FI's 8.235% Convertible Subordinated Debentures due 2007, (viii) Guarantees permitted by Section 5.2(g)(vii) and (ix) the advance by FCX to FI of the net proceeds of the Debt referred to in Section 5.2(g)(i)(D). (p) Investments in FCX. Except for (i) Guarantees permitted by Section 5.2(g)(vii), (ii) intercompany loans from FI to FCX and (iii) open market purchases of the common stock of FCX to the extent permitted by Section 5.2(q), FTX and the 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 (whether by transfer of assets or otherwise) or acquire 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, FCX the aggregate outstanding amount of which at any time exceeds by more than $60,000,000 the largest aggregate amount thereof outstanding at any time in the next preceding fiscal year of FTX. (q) Equity Payments. FTX 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), other than a failure to be in compliance with Section 3.2 resulting solely from a redetermination of the Borrowing Base Factors during a 90-day period as permitted by the last sentence of Section 2.4 of the FTX Credit Agreement, or if the Available Borrowing Base would, after giving effect to such Equity Payment, not remain at or above zero, without taking into account any redetermination of the Borrowing Base pursuant to Section 2.3 of the FTX Credit Agreement; provided, however, that FTX may pay cash dividends with respect to outstanding shares of (i) its Convertible Exchangeable Preferred Stock registered with the SEC by FTX's Registration Statement on Form S-3 No. 33-12816 and (ii) its $4.375 Convertible Exchangeable Preferred Stock, par value $1.00 ((i) and (ii) collectively, the "Preferred Stock") in accordance with the terms of the Preferred Stock. In addition to the limitations described in the immediately preceding sentence, if this credit facility is or would at any time be designated an HLT, FTX shall not make a proposed Equity Payment if the following ratio (excluding items relating to Non-Restricted Subsidiaries for purposes of such calculation) would not be greater than 1.30 to 1: Numerator: the sum for the preceding four fiscal quarters of FTX's (i) Consolidated Cash Flow, and (ii) any other Net Proceeds from asset sales not included in clause (i) above. Denominator: (x) the sum for the preceding three fiscal quarters of FTX's (i) interest paid plus capitalized interest on all Debt and Corporate Group Loans, (ii) Scheduled Principal Payments, (iii) Equity Payments and Preferred Stock dividends plus (y) the sum of FTX's (A) proposed Equity Payment, (B) all previous Equity Payments and Preferred Stock dividends during the current fiscal quarter and (C) Scheduled Principal Payments and projected interest payments on all Debt and Corporate Group Loans (using the interest rates applicable at the time of calculation of the ratio), in each case for the current quarter; provided, however, that any Corporate Group Loans prepaid pursuant to Section 3.10(a) or Section 3.10(c) of either this Agreement or the FTX Credit Agreement or continued or converted pursuant to Section 3.11 or either this Agreement or FTX Credit Agreement shall not be included in such calculation and any other Debt prepaid or refinanced pursuant to similar provisions of agreements or instruments governing such other Debt shall not be included in such calculation if such Debt would not otherwise have matured within three months of such prepayment, continuation, conversion or refinancing. (r) Covenants Regarding IMC-Agrico. (i) FTX and the 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 except (A) the IMC-Agrico Transfer and (B) in the case of FTX and the Restricted Subsidiaries, to the extent that the aggregate amount outstanding of which at any time does not exceed by more than $50,000,000 the largest aggregate amount thereof outstanding at any time in the next preceding fiscal year of FTX. (ii) FTX shall not permit IMC-Agrico to incur Debt, other than Debt to FTX or any Restricted Subsidiary permitted pursuant to paragraph (i) of this Section 5.2(r), in excess of $225,000,000 at any time outstanding, and shall not permit Debt of IMC-Agrico at any time outstanding owing to any Persons (other than FRP, any Subsidiary of FRP, IMC and any Subsidiary of IMC) to exceed $110,000,000. (iii) FTX (A) shall not permit 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 by FRP Partner, (B) shall notify the Agent of any proposed amendment to any of the IMC-Agrico Contribution Agreement, the IMC-Agrico Partnership Agreement or the IMC-Agrico Parent Agreement and (C) shall not, and shall not permit any of 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 Agent, such amendment would reasonably be expected to adversely affect the interests of the Banks. (iv) Neither FTX nor FRP shall permit its accounting of IMC-Agrico to be other than as a proportional consolidating interest unless FTX, FRP and the Agent have agreed upon mutually acceptable amendments to the financial covenants herein. (s) Covenants Regarding ALatief-FI. (i) FTX and FI shall not permit ALatief-FI to incur the initial transfer and the initial financing referred to in Section 7.2 of the ALatief-FI Joint Venture Agreement without the prior written consent of the Agent, such consent not to be unreasonably withheld, and, if FI shall not have Guaranteed such financing, without the prior written consent of the Required Borrowing Base Banks, each such consent to be conditioned upon the satisfactory factoring of such financing into the calculation of Borrowing Base Debt. (ii) FI shall notify the Agent of any proposed amendments to the ALatief-FI Joint Venture Agreement and, without the prior written consent of the Required Banks, FI shall not agree to amend the ALatief-FI Joint Venture Agreement if, in the opinion of the Agent, such amendment could adversely affect the interests of the Banks. SECTION 5.3. Additional Covenants of FI and FCX. So long as any Bank shall have any Loan Exposure or any commitment to make a Loan hereunder, FI and FCX each directly agrees with the Banks and the Agent that, without the prior written consent of the Required Banks, it will not, and will cause each of its own Subsidiaries not to, fail to comply with the provisions of Sections 5.1 and 5.2 which are applicable to it and FI will not materially alter the nature and scope of the business and activities in which it is engaged as of the Amendment Closing Date. ARTICLE VI Conditions of Credit 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 FI and the Guarantors and of 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 Agent shall have received a notice of such borrowing as required by Section 3.4; (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) there shall have been no amendments to the Certificate of Incorporation, the Certificate of Domestication or the Certificate of Limited Partnership, as applicable, or the By-laws or Partnership Agreement, as applicable, of any Guarantor or Major Subsidiary since the date of the Certificate furnished by FTX pursuant to Section 6(a) of the Amendment Agreement, other than amendments, if any, copies of which have been furnished to the Agent; and (v) except as permitted by the proviso to Section 5.2(c), there shall be no proceeding for the dissolution or liquidation of any Guarantor or Major Subsidiary or any proceeding to revoke the Certificate of Incorporation of FTX, FCX or FI or to rescind the partnership agreement of FRP or the corporate or partnership existence, which is pending or, to the knowledge of FTX, threatened against or affecting any Guarantor or Major Subsidiary. SECTION 6.2. Representations and Warranties with Respect to Credit Events. Each Credit Event shall be deemed a representation and warranty by FTX and FI 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 Corporate Group Note; or (b) default for five or more days in the payment when due of any interest on any Corporate Group Note, or of any other amount payable under the Corporate Group Facility; 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 Agent, the FTX Agent, the FI Trustee, any Bank or any FTX Lender pursuant hereto or to the FTX Credit Agreement 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, either Major Subsidiary or FCX in the due observance or performance of any covenant, condition or agreement in Section 5.1(c) or 5.1(h) of either this Agreement or the FTX Credit Agreement, other than the covenant to preserve and maintain all of such Person's rights, privileges and franchises desirable in the normal conduct of it business; or (e) default by FTX, either Major Subsidiary or FCX in the due observance or performance of any covenant, condition or agreement in Section 5.2 of this Agreement or in Section 5.2 of the FTX Credit Agreement (other than, in each case, paragraph (k)); or (f) default by FTX, either Major Subsidiary or FCX in the due observance or performance of any other covenant, condition or agreement in the Corporate Group Facility which shall remain unremedied for 30 days after written notice thereof shall have been given to such Person by any Bank; or (g) FTX or any Restricted Subsidiary 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 or, in the case of FI, any such law of Indonesia, (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 FTX or such Restricted Subsidiary 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 FTX or any Restricted Subsidiary, or of a substantial part of the property or assets of FTX or any Restricted Subsidiary, 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 FTX or any Restricted Subsidiary or for a substantial part of the property of FTX or any Restricted Subsidiary or (iii) the winding-up or liquidation of FTX or any Restricted Subsidiary; 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 any Debt of FTX or any Restricted Subsidiary if the effect of any such default shall be to accelerate, or to permit the holder or obligee of any 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 Debt in an aggregate amount in excess of $10,000,000; or any payment of principal or interest, regardless of amount, on any Debt of FTX or a Restricted Subsidiary in an aggregate principal amount 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 (j) a Reportable Event or Reportable Events, or a failure to make a required payment (within the meaning of Section 412(n)(1)(A) of the Code) shall have occurred with respect to any Plan or Plans that reasonably could be expected to result in liability of FTX to the PBGC or to a Plan in an aggregate amount exceeding $10,000,000 and, within 30 days after the reporting of any such Reportable Event to the Agent or after the receipt by the Agent of the statement required pursuant to clause (iii) of Section 5.1(f), the Agent shall have notified FI in writing that (i) the Required Banks have made a determination that, on the basis of such Reportable Event or Reportable Events or the receipt of such statement, there are reasonable grounds (A) for the termination of such Plan or Plans by the PBGC, (B) for the appointment by the appropriate United States District Court of a trustee to administer such Plan or Plans or (C) for the imposition of a lien in favor of a Plan and (ii) as a result thereof an Event of Default exists hereunder; or a trustee shall be appointed by a United States District Court to administer any such Plan or Plans; or the PBGC shall institute proceedings to terminate any Plan or Plans; or (k) FTX or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan, (ii) FTX or such ERISA Affiliate does not have reasonable grounds for contesting such Withdrawal Liability and is not in fact contesting such Withdrawal Liability in a timely and appropriate manner, and (iii) the amount of such Withdrawal Liability specified in such notice, when aggregated with all other amounts required to be paid to Multiemployer Plans in connection with Withdrawal Liabilities (determined as of the date or dates of such notification), exceeds $10,000,000 or requires payments exceeding $10,000,000 in any year; or (l) FTX or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if solely as a result of such reorganization or termination the aggregate annual contributions of FTX and its ERISA Affiliates to all Multiemployer Plans that are then in reorganization or have been or are being terminated have been or will be increased over the amounts required to be contributed to such Multiemployer Plans for their most recently completed plan years by an amount exceeding $10,000,000; (m) a final judgment for the payment of money in excess of $10,000,000 shall be rendered by a court or other tribunal against FTX or any Restricted Subsidiary 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 FTX or any Restricted Subsidiary to enforce any such judgment; (n) the security interest in the Contract of Work granted in the FI Trust Agreement shall be deemed to be invalid or fail to be in full force and effect or the Contract of Work shall be terminated or otherwise fail to be in full force and effect or shall be amended without the consent of the Required Banks in any manner which materially and adversely affects the rights and benefits granted to the FI Trustee and the Banks under the FI Security Documents; or the Ministry of Mines and Energy of Indonesia (or any successor entity) or the Government of Indonesia shall have taken any action in contravention of the Contract of Work which materially adversely affects FI's ability to perform its obligations under the Corporate Group Facility or the rights and benefits granted to the FI Trustee under any FI Security Document; or (o) any Governmental Authority shall condemn, seize, nationalize, assume the management of or appropriate any material portion of FI's property, assets or revenues (either with or without payment of compensation); then, and in any such event (other than an event with respect to FTX or either Major Subsidiary described in paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the Agent may, and at the request of the Required Banks shall, by written or telegraphic notice to FTX, 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 all sums then owing by FI 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 FI, anything contained herein or in any Promissory Note to the contrary notwithstanding standing or (iii) exercise any or all the remedies then available under the FI Security Documents, the Pledge Agreement or 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 FTX or either Major Subsidiary is the entity involved, all sums then owing by FI to the Banks upon the Promissory Notes or otherwise hereunder shall, without any declaration or other action by any Bank hereunder, be immediately due and payable and the Total Commitment hereunder shall be immediately terminated subject to the final sentence of this Section 7.1 without presentment, demand, protest or notice of any kind, all of which are expressly waived by FI, anything contained herein or in any Promissory Note to the contrary notwithstanding. Promptly following the making of any such declaration, the Agent shall give notice thereof to FI but failure to do so shall not impair the effect of such declaration. ARTICLE VIII The Agent and the FI Trustee SECTION 8.1. The Agent and the FI Trustee. (a) For convenience of administration and to expedite the transactions contemplated by this Agreement, Chemical Bank is hereby appointed as Agent and Collateral Agent for the Banks under this Agreement and Morgan Guaranty Trust Company of New York as trustee under the FI Trust Agreement is hereby appointed as FI Trustee for the Banks under the FI Security Documents. Each Bank (i) confirms and agrees to be bound by the terms of the FI Trust Agreement and (ii) agrees that the FI Trustee in accepting appointment and in acting as security agent under the FI Security Documents shall be entitled to all the rights, immunities, privileges, protections, exculpations, indemnifications, liens and other benefits applicable to its acting as trustee under the FI Trust Agreement. Neither the Agent nor the Collateral Agent shall have any duties or responsibilities with respect hereto except those expressly set forth herein. Each Bank hereby irrevocably appoints and expressly authorizes the Agent and the Collateral Agent, without hereby limiting any implied authority, to take such action as the Agent or the Collateral Agent, as applicable, on its behalf and to exercise such powers under this Agreement as are delegated to such Person by the terms hereof, together with such powers as are reasonably incidental thereto. Each of the Agent and the Collateral Agent may exercise any of its duties hereunder by or through their respective agents, officers or employees. In addition, each Bank hereby irrevocably (i) authorizes and directs the Collateral Agent to enter, on behalf of each of them, into the FTX Intercreditor Agreement and, as contemplated pursuant to this Agreement, the Pledge Agreement and the Security Agreement and (ii) authorizes and directs the FI Trustee to enter, on behalf of each of them, into the FI Security Documents, and in each case agrees to be bound by the terms thereof. (b) Neither the Agent, the Collateral Agent nor any of their respective directors, officers, agents or employees shall be liable to any Bank, FI or either Guarantor for any action taken or omitted to be taken by it or them in good faith under or in connection with this Agreement and shall neither be responsible to any Bank, FI or either Guarantor for the consequences of any oversight or error of judgment nor be answerable to any Bank, FI or either Guarantor for any loss unless the same shall happen through its or their gross negligence or wilful misconduct. The Agent may treat the payee of any Promissory Note as the holder thereof until written notice of transfer shall have been filed with it signed by such payee and in form satisfactory to the Agent. The Agent and the Collateral Agent may each consult with legal counsel selected by it and shall be entitled to rely upon the advice of such counsel as to its duties and shall not be liable for any action taken or suffered in good faith by it in accordance with the advice of such counsel. Neither the Agent nor the Collateral Agent shall be under a duty to enter into or pass upon the validity, effectiveness, genuineness or value of this Agreement, any Promissory Note or any other Loan Document, any other instrument or document delivered pursuant hereto or thereto or herewith or therewith, or any representation, warranty or agreement made herein or therein or in connection herewith or therewith, and the Agent and the Collateral Agent each shall be entitled to assume that the same are valid, effective and genuine in what they purport to be. Neither the Agent nor the Collateral Agent shall incur any liability under or in respect of this Agreement by acting upon any notice, consent, certificate, warranty or other paper or instrument believed by such Person to be genuine or authentic or to be signed by the proper party, or with respect to anything which it may do or refrain from doing in the reasonable exercise of its judgment, or which may seem to it to be necessary or desirable on such premises. (c) To the extent that either the Agent or the Collateral Agent shall not be reimbursed by FI or either Guarantor for any costs, liabilities or expenses incurred in such capacity or, to the extent the FI Trustee shall not be reimbursed by the Borrowers for any costs, liabilities or expenses incurred in its capacity as trustee under the FI Trust Agreement (including in its capacity as security agent under the FI Security Documents), each Bank agrees to indemnify such Person, pro rata in accordance with its Applicable Percentage, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on or incurred by or asserted against such Person in any way relating to or arising out of this Agreement or the FI Trust Agreement, as the case may be; provided, however, that no Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's, the Collateral Agent's or the FI Trustee's gross negligence or wilful misconduct. Each Bank agrees promptly to pay to the Agent, the Collateral Agent or the FI Trustee, as applicable, its pro rata portion of the statement of amounts payable by FI to such Person under this Agreement which are not paid by FI for any reason, within 30 days of the date such statement is sent to the Banks by such Person. (d) It is expressly understood and agreed that the obligations of the Agent and the Collateral Agent are only those expressly set forth with respect to it in this Agreement. The Agent shall not be required to take any action and shall have no obligations, except such actions and obligations which it is expressly required to take or observe by the terms of this Agreement. Each Bank agrees that the Agent shall be entitled to take any action which it is permitted to take hereunder, but shall only be required to take any such action at the written request of the Required Banks. The Agent and the Collateral Agent shall be entitled to assume that no Event of Default or Default has occurred and is continuing, unless such Person has actual knowledge of such fact or has received notice from a Bank that such Bank considers that an Event of Default or Default has occurred and is continuing and specifying the nature thereof. In the event that the Agent or the Collateral Agent shall have acquired actual knowledge of any such Event of Default or Default, such Person shall promptly give notice thereof to the Banks, and will take such action and assert such rights pursuant to this Agreement as the Required Banks shall direct. The Agent and the Collateral Agent shall in all cases be fully protected for any action taken pursuant to such directions. (e) The Agent and the Collateral Agent may resign at any time by giving written notice thereof to the Banks and FI and may be removed at any time with or without cause by the Required Banks. Upon any such resignation or removal, the Required Banks shall have the right to appoint, and FI shall have the right to approve (such approval not to be unreasonably withheld or delayed) a successor Agent or Collateral Agent, as the case may be. If no successor Agent or Collateral 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 Person's giving of notice of resignation or the Banks' removal of the retiring Person, then the retiring Person may, on behalf of the Banks, appoint a successor Agent or Collateral Agent, as the case may be, which shall be a Bank. Upon the acceptance of any appointment as Agent or Collateral Agent hereunder by a successor Agent or Collateral Agent, as the case may be, such successor Agent or Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Person, and the retiring Person shall be discharged from its duties and obligations hereunder. After any such retiring Person's resignation or removal hereunder as Agent or Collateral Agent, as applicable, the provisions of this Article VIII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Agent or Collateral Agent, as applicable, under this Agreement. (f) The 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 Agent shall assist each of the Collateral Agent and the FI Trustee in the performance of its duties as may be reasonably requested by such Person from time to time. (g) The obligations of the Agent, the Collateral Agent and the FI Trustee 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 and/or trustee capacity, such Bank shall be responsible for the acts and omissions relating to each such agency and/or trust function. (h) Without the prior written consent of the Required Banks, the Collateral Agent will not consent to any modification, supplement or waiver of the FTX Intercreditor Agreement. (i) Notwithstanding any other provision of this Section 8.1, the Agent will, at the request of FI, instruct the FI Trustee to release from the FI Trust Agreement and the other FI Security Documents (and enter into an amendment to the FI Trust Agreement and the other FI Security Documents and execute such other instruments as may be necessary in connection therewith) any interest of the FI Trustee in (i) the rights of FI under the Contract of Work in respect of all or any part of Contract Area Block B (as defined in the Contract of Work), without further consent by the Required Banks and the Required Banks (as defined in the FTX Credit Agreement) if, in the opinion or opinions of counsel acceptable to the Agent and in the opinion of the Agent, such release is to be effected without impairing or adversely affecting (A) the Lien and interest of the FI Trustee stated to be created in the rights of FI under the Contract of Work in respect of Contract Area Block A (as defined in the Contract of Work) and the FI Project (to the extent it includes the mining, concentrating, transportation, shipping and related operations of FI in respect of FI Product obtained or produced from Contract Area Block A) by the FI Trust Agreement and the other FI Security Documents, the Memorandum of Understanding and the Contract of Work or (B) the rights of FI relating to ownership and operation of the FI Project (to the extent it includes the mining, concentration, transportation, shipping and related operations of FI in respect of FI Product obtained or produced from Contract Area Block A), (ii) the property and rights to be transferred pursuant to the ALatief-FI Transfer and (iii) the property and rights to be transferred pursuant to the Power Facilities Transfer. ARTICLE IX Guarantees SECTION 9.1. Guarantee. As consideration for the Banks' obligations to lend hereunder, each Guarantor hereby unconditionally and irrevocably guarantees, as a primary obligor and not merely as a surety, the due and punctual payment of (x) the principal of and interest on each Promissory Note of FI, when and as due, whether at maturity, by acceleration, by notice of prepayment or otherwise, (y) all other monetary obligations of FI to the Banks, the Agent and the FI Trustee under this Agreement and (z) all amounts owing by FI to any Bank pursuant to any Permitted Secured Swap (collectively, the "FI Obligations"). Each Guarantor further agrees that the FI Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any such FI Obligation. Each Guarantor waives presentment to, demand of payment from and protest to FI of any of the FI Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. The obligations of each Guarantor under this Section 9.1 shall not be affected by (a) the failure of any Bank, the Agent or the FI Trustee to assert any claim or demand or to enforce any right or remedy against FI under the provisions of this Agreement or otherwise; (b) any rescission, waiver, amendment or modification of any of the terms or provisions of this Agreement, any Promissory Note any guarantee or any other agreement; (c) the release of any security held by any Bank, the Agent or the FI Trustee for the Obligations guaranteed by it or any of them; or (d) the failure of any Bank, the Agent or the FI Trustee to exercise any right or remedy against any other guarantor of the FI Obligations. Each Guarantor 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 any Bank, the Agent or the FI Trustee to any security held for payment of the FI Obligations or to any balance of any deposit account or credit on the books of such Bank in favor of FI or any other Person. The obligations of each Guarantor under this Section 9.1 shall not be subject to any reduction, limitation, impairment or termination for any reason, including, without limitation, any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the FI Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor under this Section 9.1 shall not be discharged or impaired or otherwise affected by the failure of any Bank, the Agent or the FI Trustee to assert any claim or demand or to enforce any remedy under this Agreement, any Promissory Note, any guarantee or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, wilful or otherwise, in the performance of the FI Obligations, or by any other act or omission which may or might in any manner or to any extent vary the risk of either Guarantor, or otherwise operate as a discharge of FTX or FCX as a matter of law or equity. Each Guarantor 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 any Obligation guaranteed by it (including, without limitation, any payment pursuant to this guarantee) is rescinded or must otherwise be restored by any Bank, the Agent or the FI Trustee upon the bankruptcy or reorganization of FI or otherwise. In furtherance of the foregoing and not in limitation of any other right which any Bank, the Agent or the FI Trustee may have at law or in equity against either Guarantor by virtue hereof, upon the failure of FI to pay any of the FI Obligations when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will, upon receipt of written demand by any Bank, the Agent or the FI Trustee, forthwith pay, or cause to be paid, to the Agent for distribution to the Banks, the Agent or the FI Trustee, as appropriate, in cash the amount of such unpaid FI Obligations, and at such time as all such FI Obligations owing to such Bank, the Agent, or the FI Trustee as applicable, have been indefeasibly paid in full and its Commitment terminated, such Bank shall, in a reasonable manner, assign the amount of such FI Obligations owed to it and paid by such Guarantor pursuant to this guarantee to such Guarantor, such assignment to be pro tanto to the extent to which the FI Obligations in question were discharged by such Guarantor or make such other disposition thereof as such Guarantor shall direct (all without recourse to such Bank, the Agent or the FI Trustee, as applicable and without any representation or warranty by such Bank, the Agent or the FI Trustee, as applicable. Upon payment by either Guarantor of any sums to a Bank, the Agent or the FI Trustee as provided above in this Section 9.1, all rights of such Guarantor against FI or the other Guarantor 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 indefeasible payment in full of all the FI Obligations to the Banks, the Agent and the FI Trustee and all the FI Obligations (as defined in the FTX Credit Agreement) and shall not be exercised by such Guarantor prior to indefeasible payment in full of all Corporate Group Loans and termination of the Commitments and the commitments under the FTX Credit Agreement. ARTICLE X Miscellaneous SECTION 10.1. 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. 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 three days after being sent by registered or certified mail, postage prepaid, return receipt requested, if by mail, or upon receipt if by any telecopy, telegraphic or telex communications equipment, in each case addressed to such party as provided in this Section 10.1 or in accordance with the latest unrevoked direction from such party. Any notice delivered to FTX hereunder shall be deemed also to have been given to FI, and such notice shall be deemed to have been given to FI on the day it is deemed to have been given to FTX. SECTION 10.2. Survival of Agreement. All covenants, agreements, representations and warranties made by FI or the Guarantors herein and in the certificates or other instruments prepared or delivered in connection with this Agreement shall be considered to have been relied upon by the Banks, the Agent and the FI Trustee 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 Corporate Group Note, any Commitment Fee or any other fee or amount payable under the Corporate Group Notes or the Corporate Group Facility is outstanding and unpaid and so long as the Commitments or the commitments under the FTX Credit Agreement have not been terminated. SECTION 10.3. Successors and Assigns; Participations; Purchasing Banks. (a) This Agreement shall be binding upon and inure to the benefit of FI, the Guarantors, the Banks, the Agent, the FI Trustee (for purposes of Article VIII only), all future holders of the Promissory Notes, and its respective successors and assigns, except that neither FTX, FI, nor FCX may assign 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; provided that no such pledge or assignment shall release a Bank from any of its obligations hereunder. (b) Any Bank may, in the ordinary course of its business and in accordance with applicable law, at any time sell to one or more banks or other entities ("Participants") participating interests in 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 FI and the Guarantors and the Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. FI and the Guarantors agree that if amounts outstanding under this Agreement and the Promissory Notes are due and unpaid, or shall have been declared 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 3.16. FI and the Guarantors also agree that each Participant shall be entitled to the benefits of Sections 3.12, 3.13, 3.14, 3.16, 3.18, 3.19 and 10.5 with respect to its participation in the Commitments and the Loans outstanding from time to time; provided that no Participant shall be entitled to receive any greater amount 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 had no such transfer occurred and provided further that the voting rights of any Participant would be limited to changes in amounts of Loan or Commitment, rates, fees and maturity affecting such Participant and release of all or substantially all the collateral for the FI Obligations. Each Bank selling a participation with a tenor longer than 183 days will use its best efforts to inform FTX of (i) the amount of any such participations sold and (ii) the identity of all Participants purchasing such participations. (c) [Intentionally left blank.] (d) This Agreement shall not be assignable by the Banks, except that a Bank may, in accordance with applicable law, and subject to Section 10.3(j), at any time assign by novation all or any part of its rights and obligations under this Agreement and its Promissory Notes (I) to any Bank or any affiliate thereof, without FI'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 FI's consent, such consent not to be unreasonably withheld (except that any Bank may assign its rights and obligations under this Agreement and any affiliate thereof and its Promissory Notes to any other Bank that is a party to this Agreement without the necessity of approval by FI or any Guarantor), pursuant to a Commitment Transfer Supplement in the form of Exhibit D hereto, executed by such Purchasing Bank, such transferor Bank (and, in the case of a Purchasing Bank that is not then a Bank or an affiliate thereof, by FI and the Agent), and delivered to the Agent for its recording in the Register. Assignments shall be by novation only. Upon such execution, delivery and recording (and, if required, consent of FI), from and after the Transfer Effective Date determined pursuant to such Commitment Transfer Supplement, (x) the Purchasing Bank thereunder shall (if not already a party hereto) be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Bank hereunder with a Commitment as set forth therein, and (y) the transferor Bank thereunder shall, to the extent provided in 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 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, FI, at its own expense, shall execute and deliver to the 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 Original Execution Date and shall otherwise be in the form of the Promissory Notes replaced thereby. The Promissory Note surrendered by the transferor Bank shall be returned by the Agent to FI marked "canceled". (e) The Agent shall maintain at its address referred to in Section 10.1 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. (f) 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 FI and the Agent) together with payment to the Agent of a registration and processing fee of $2,000, the 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 FI. (g) Subject to Section 10.16, FI authorizes each Bank to disclose to any Participant or Purchasing Bank (each, a "Transferee") and any prospective Transferee any and all financial information in such Bank's possession concerning FTX and its affiliates which has been delivered to such Bank by or on behalf of FTX or FI pursuant to this Agreement or which has been delivered to such Bank by or on behalf of FTX or FI in connection with such Bank's credit evaluation of FTX and its affiliates prior to becoming a party to this Agreement. (h) If, pursuant to this Section 10.3, any interest in this Agreement or any Promissory Note is transferred to any Transferee other than a Participant 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 Agent of such transfer, describing the terms thereof and indicating the identity and country of residence of each Transferee and (y) shall cause such Transferee, concurrently with the effectiveness of such transfer, (i) to represent to the transferor Bank (for the benefit of the transferor Bank, the Agent and FI) that under applicable law and treaties no taxes will be required to be withheld by the Agent, FI or the transferor Bank with respect to any payments to be made to such Transferee in respect of the Loans, (ii) to furnish to the transferor Bank (and, in the case of any Purchasing Bank registered in the Register, the Agent and FI) either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein such Transferee claims entitlement to complete exemption from U.S. Federal withholding tax on all interest payments hereunder) and (iii) to agree (for the benefit of the transferor Bank, the Agent and FI) to provide the transferor Bank (and, in the case of any Purchasing Bank registered in the Register, the Agent and FI) a new Form 4224 or Form 1001 upon the expiration or obsolescence of any previously delivered form and comparable statements in accordance with applicable U.S. laws and regulations and amendments duly executed and completed by such Transferee, and to comply from time to time with all applicable U.S. laws and regulations with regard to such withholding tax exemption. Notwithstanding any other provision contained herein to the contrary, FI and the Agent shall be entitled to deduct and withhold United States withholding taxes with respect to all payments to be made hereunder to or for such transferor Bank or Transferee as may be required by United States law due to such assignments and such transferor Bank or Transferee shall indemnify and hold harmless FI and the Agent from and against any tax, interest, penalty or other expense that FI and the 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. (i) If, pursuant to this Section 10.3, a Bank sells participating interests to a Participant which is organized under the laws of any jurisdiction other than the United States or any State thereof, the selling Bank shall cause such Participant, concurrently with the effectiveness of such sale, (i) to represent to the selling Bank (for the benefit of the selling Bank, the Agent and FI) that under applicable law and treaties no taxes will be required to be withheld by the Agent, FI or the selling Bank with respect to any payments to be made to such Participant in respect of the Loans, (ii) to furnish to the selling Bank either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein such Participant claims entitlement to complete exemption from U.S. Federal withholding tax on all interest payments hereunder) and (iii) to agree (for the benefit of the selling Bank, the Agent and FI) to provide the selling Bank a new Form 4224 or Form 1001 upon the expiration or obsolescence of any previously delivered form and comparable statements in accordance with applicable U.S. laws and regulations and amendments duly executed and completed by such Participant, and to comply from time to time with all applicable U.S. laws and regulations with regard to such withholding tax exemption. Notwithstanding any other provision contained herein to the contrary, FI and the Agent shall be entitled to deduct and withhold United States withholding taxes with respect to all payments to be made hereunder to or for such selling Bank or Participant as may be required by United States law due to such participations and such selling Bank or Participant shall indemnify and hold harmless FI and the Agent from and against any tax, interest, penalty or other expense that FI and the Agent may owe as a consequence of any selling Bank's failure to obtain tax forms securing complete exemption from U.S. withholding taxes. (j) Notwithstanding anything in this Section 10.3 to the contrary, (i) without the prior written consent of the Agent and FTX, no Bank which is an FM Lender shall (except as permitted by paragraph (a) of this Section 10.3 regarding assignments to Federal Reserve Banks) assign any interest in or Commitment under this Agreement or any Loans unless at the same time it shall also assign, to the same assignee, the same proportion of its interest in and commitment and loans outstanding under the FM Credit Agreement pursuant to the provisions governing assignments set forth therein and (ii) no Bank which is an FTX Lender shall (except as permitted by paragraph (a) of this Section 10.3 regarding assignments to Federal Reserve Banks) make any such assignment of its interests hereunder unless it shall also assign, to the same assignee, the same proportion of its interest in and commitment and loans outstanding under the FTX Credit Agreement. SECTION 10.4. Expenses of the Banks; Indemnity. (a) The Guarantors and FI agree, jointly and severally, to pay all out-of-pocket expenses reasonably incurred by the Agent in connection with the preparation of this Agreement and the Promissory Notes 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 Agent or any Bank in connection with the enforcement or protection of their rights in connection with this Agreement 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 Agent and, in connection with such enforcement or protection, the reasonable fees and disbursements of other counsel for any Bank. Each of the Guarantors and FI further agree, jointly and severally, that it shall indemnify the Banks, the Agent, the Collateral Agent and the FI Trustee 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, each of the Guarantors and FI agrees to pay, and to protect, indemnify and save harmless each Bank, the Agent, the Collateral Agent and the FI Trustee 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 the Agent shall be designated a party thereto) of any nature arising from or relating to the issuance or delivery of Promissory Notes or in connection with the enforcement of this Agreement or the other Loan Documents or relating to the use of proceeds of Loans hereunder for the purpose of acquiring equity securities of any other Person; provided, however, that FI and the Guarantors shall have no obligation to protect, indemnify and save harmless any Bank, the Agent, the Collateral Agent or the FI Trustee or any other Person otherwise entitled to indemnity hereunder with respect to any loss, liability, action, suit, judgment, demand, damage, cost or expense resulting from or attributable to the gross negligence or wilful misconduct of such Bank, the Agent, the Collateral Agent or the FI Trustee or such other Person. If any action, suit or proceeding arising from any of the foregoing is brought against any Bank, the Agent, the Collateral Agent or the FI Trustee or any other Person indemnified or intended to be indemnified pursuant to this Section 10.4, FI and the Guarantors, 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 FTX (which counsel shall be satisfactory to such Bank, the Agent, the Collateral Agent or the FI Trustee or other Person indemnified or intended to be indemnified). If either Guarantor or FI shall fail to do any act or thing which it has covenanted to do hereunder or any representation or warranty on the part of such Guarantor or FI contained in this Agreement shall be breached, any Bank, the Agent, the Collateral Agent or the FI Trustee 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, the Agent, the Collateral Agent or the FI Trustee shall be repayable to it by such Guarantor or FI immediately upon such Bank's or the Agent's demand therefor. (b) The provisions of this Section 10.4 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement or the FTX Credit Agreement, the consummation of the transactions contemplated hereby or thereby, the repayment of any of the Corporate Group Loans or any Corporate Group Notes, the invalidity or unenforceability of any term or provision of this Agreement or the FTX Credit Agreement or any Corporate Group Note, or any investigation made by or on behalf of any Bank, the Agent, any FTX Lender or the FTX Agent. All amounts due under this Section 10.4 shall be payable on written demand therefor. SECTION 10.5. Right of Setoff. If an Event of Default shall have occurred and be continuing and any Bank shall have requested the Agent to declare the Promissory Notes 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 FI against any of and all the obligations of FI 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 Fi 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 are in addition to other rights and remedies (including, without limitation, other rights of setoff) which such Bank may have. SECTION 10.6. 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 10.7. Waivers; Amendments. (a) No failure or delay of any Bank, the Agent or the FI Trustee 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, the Agent and the FI Trustee 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 or any Promissory Note or any other such document or agreement or consent to any departure by FI 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 FI in any case shall entitle FI 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 FI 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 of any principal or of interest on, any Promissory Note (including, without limitation, any such payment pursuant to Section 3.8 or paragraphs (b), (c) or (d) of Section 3.10), 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 the Commitment of any Bank without the written consent of such Bank, or change any fees to be paid to any Bank or the Agent hereunder without the written consent of such Bank or the Agent, as applicable, (iii) amend or modify the provisions of this Section, Sections 3.9 through 3.16 or Section 10.4 or Article IX or the definition of "Required Banks" or "Required Borrowing Base Banks", without the written consent of each Bank, (iv) release the collateral granted as security for the FI Obligations (except as expressly contemplated hereby), without the written consent of each Bank or (v) release any Guarantor of its obligations hereunder 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 the Agent hereunder without the written consent of the Agent. Each Bank and holder of any Promissory Note shall be bound by any modification or amendment authorized by this Section 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 10.8. 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 10.9. 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 Agent and FI. SECTION 10.10. 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 10.11. Entire Agreement. The Corporate Group Facility, the fee letters between the Agent and FTX 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 the Corporate Group Facility, such fee letters and the agreements set forth as exhibits hereto. Nothing in the Corporate Group Facility or in such other 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, such fee letters or the agreements set forth as exhibits hereto. SECTION 10.12. Amendment Closing Date. This Agreement, as amended herein, shall be effective on the Amendment Closing Date. SECTION 10.13. WAIVER OF JURY TRIAL, ETC. (a) EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY WAIVES 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, ANY DOCUMENT OR AGREEMENT ENTERED INTO IN CONNECTION HEREWITH AND ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. (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 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 10.14. Interest Rate Limitation. Notwithstanding anything herein or in the Promissory Notes to the contrary, if at any time the applicable interest rate, together with all fees and charges which are treated as interest 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 payable under the Promissory Note held by such Bank, together with all Charges payable to such Bank, shall be limited to the Maximum Rate. SECTION 10.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) EACH GUARANTOR AND FI 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, THE AGENT OR THE FI TRUSTEE MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AGAINST FI OR EITHER GUARANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. (b) EACH GUARANTOR AND FI 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 10.01. 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 10.16. Confidentiality. Each Bank agrees (which agreement shall survive the termination of this Agreement) that financial information, information from FTX's and its Subsidiaries' books and records, information concerning FTX's and its Subsidiaries' trade secrets and patents and any other information received from FTX 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 FTX; (ii) disclosure of information (other than that received from FTX and its 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 FTX or a Subsidiary hereunder; (iii) disclosure of information which is required by applicable law or to a governmental agency having supervisory 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 10.16; (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. SECTION 10.17. Judgment Currency. The specification of payment in Dollars and in New York City, New York, with respect to amounts payable to any Bank (or Transferee), the Agent or the FI Trustee hereunder and under the other Loan Documents is of the essence, and Dollars shall be the currency of account in all events. The payment obligations of FI or either Guarantor under this Agreement or any other Loan Document shall not be discharged by an amount paid in another currency or in another place, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on conversion to Dollars and transfer to New York City under normal banking procedures does not yield the amount of Dollars in New York City due hereunder. If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in Dollars into another currency (the "second currency"), the rate of exchange which shall be applied shall be that at which in accordance with normal banking procedures the Agent could purchase Dollars with the second currency on the Business Day next preceding that on which such judgment is rendered. The obligation of FI and each Guarantor in respect of any such sum due from it to the Agent, the FI Trustee or any Bank (or Transferee) hereunder or under any other Loan Document (an "entitled person") shall, notwithstanding the rate of exchange actually applied in rendering such judgment, be discharged only to the extent that on the Business Day following receipt by such entitled person of any sum adjudged to be due hereunder or under any other Loan Document in the second currency such entitled person may in accordance with normal banking procedures purchase in the free market and transfer to New York City Dollars with the amount of the second currency so adjudged to be due; and FI and each Guarantor hereby agree, as a separate obligation and notwithstanding any such judgment, jointly and severally to indemnify such entitled person against, and to pay such entitled person on demand, in Dollars in New York City, the difference between the sum originally due to such entitled person in Dollars and the amount of Dollars so purchased and transferred. 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. P.T. FREEPORT INDONESIA INDONESIA COMPANY, by /s/_____________________ Name: Robert M. Wohleber Title: Vice President and Treasurer 1615 Poydras Street New Orleans, Louisiana 70112 Attention: Robert M. Wohleber Vice President and Treasurer Telex: 8109515386 Telephone: 504-582-1758 Telecopy: 504-582-4511 FREEPORT-McMoRan INC., by /s/_____________________ Name: Robert M. Wohleber Title: Vice President and Treasurer 1615 Poydras Street New Orleans, Louisiana 70112 Attention: Robert M.Wohleber Vice President and Treasurer Telex: 8109515386 Telephone: 504-582-1758 Telecopy: 504-582-4511 FREEPORT-McMoRan COPPER & GOLD INC., by /s/_____________________ Name: Robert M. Wohleber Title: Vice President and Treasurer 1615 Poydras Street New Orleans, Louisiana 70112 Attention: Robert M. Wohleber Vice President and Treasuer Telex: 8109515386 Telephone: 504-582-1758 Telecopy: 504-582-4511 CHEMICAL BANK, individually and as Agent, by /s/_____________________ Name: Mary Jo Woodford Title: Vice President Domestic Office and LIBOR Office: 270 Park Avenue New York, New York 10017 Attention: Mary Jo Woodford Telephone: 212-270-8895 with a copy to John Gehebe Chemical Bank 270 Park Avenue New York, New York 10017 Telephone: 212-270-3531 Telecopy: 212-270-3871 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 MORGAN GUARANTY TRUST COMPANY OF NEW YORK (for purposes of Article VIII only), as FI Trustee, by /s/_____________________ Name: P.J. Crowley Title: Vice President EX-4.11 10 Exhibit 4.11 EXECUTION COPY FIRST AMENDMENT dated as of February 2, 1994 (this "Amendment"), to the Credit Agreement dated as of October 27, 1989, as amended through June 1, 1993 (the "Credit Agreement"), among P.T. FREEPORT INDONESIA COMPANY, a limited liability company organized under the laws of Indonesia and also domesticated in Delaware ("FI"), FREEPORT-McMoRan INC., a Delaware corporation ("FTX"), FREEPORT-McMoRan COPPER & GOLD INC., a Delaware corporation ("FCX"), the undersigned banks (collectively, the "Banks"), MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a New York banking corporation (for purposes of Article VIII thereof only), as trustee for the Banks under the FI Trust Agreement and, in such capacity, as security agent for the Banks under the FI Security Documents (in such capacity, the "FI Trustee") and CHEMICAL BANK, a New York banking corporation, as agent for the Banks (in such capacity, the "Agent"). Capitalized terms used herein and not otherwise defined herein shall have the meanings given such terms in the Credit Agreement. WHEREAS, FI, FTX, FCX, the Required Banks, the FI Trustee and the Agent have agreed that certain provisions of the Credit Agreement be amended in order that FRP may issue up to $150,000,000 aggregate principal amount of its Senior Subordinated Notes due 2004 (the "Securities"), as more particularly described in the Term Sheet relating to the Securities (the "Term Sheet") attached hereto as Exhibit A, which FRP has provided to the Banks. NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, FI, FTX, FCX, the FI Trustee, the Agent and the Required Banks hereby agree, on the terms and subject to the conditions set forth herein, as follows: SECTION 1. Approval of Form of the Securities. The Required Banks hereby approve the form of subordination provisions of the Securities attached hereto as Exhibit B and the other terms and conditions of the Securities as set forth in the Term Sheet and agree that FRP may, upon the effectiveness of this Amendment, issue the Securities with subordination provisions in the form of Exhibit B hereto and otherwise on the terms set forth in Exhibit A hereto. SECTION 2. Amendments to the Credit Agreement; Consent. (a) Section 1.1 of the Credit Agreement is hereby amended by deleting clause (ii) in the definition of "Equity Payment" and substituting a new clause (ii) as follows: "(ii) open market purchases by the Company or any Restricted Subsidiary of Depository Units of FRP or purchases or acquisitions, directly or indirectly, of any FRP Notes" (b) Section 1.1 of the Credit Agreement is hereby amended by adding the following definition: "'FRP Notes' has the meaning assigned to such term in Section 5.2(g)(i)(G)." (c) The Banks hereby consent to the amendment of Section 2.2 of the FTX Credit Agreement by adding a new clause (VI) thereto as follows and renumbering the existing clause "(VI)" as "(VII)": ", (VI) FTX, FRP or any Restricted Subsidiary shall determine to, or shall be required to make, any optional or mandatory prepayment, acquisition, repurchase or defeasance of the FRP Notes" and to the amendment of Section 2.4 of the FTX Credit Agreement by changing the reference to "clause (VI)" of Section 2.2 of the FTX Credit Agreement to "clause (VII)" thereof. (d) The Banks hereby consent to the amendment of Section 2.6 of the FTX Credit Agreement by the addition of the following at the end thereof: "If a Borrowing Base redetermination shall occur pursuant to clause (VI) of Section 2.2 because a 'Change in Control' (as defined in the indenture for the FRP Notes) has occurred which would require any offer to repurchase or redeem the FRP Notes or would permit the holders of the FRP Notes to require the FRP Notes to be prepaid, redeemed or repurchased, FTX and FRP acknowledge and agree that in making such redetermination of the Borrowing Base, the Banks may take into account such factors relating to the Change of Control as they shall, in their sole and unreviewable discretion, determine to be relevant or appropriate, including without limitation any perceived or prior lack of creditworthiness of the entity to result after such Change in Control, discounts to the value, timing or liklihood of realization of assets of FRP, FTX and their Subsidiaries or any other risks, whether or not similar to the foregoing. FTX and FRP irrevocably and unconditionally agree that they shall not contest or dispute any such redetermination of the Borrowing Base under any circumstance or claim whatsoever." (e) Section 5.1(a)(5) is hereby amended by the addition of the following at the end thereof; ", and 15 days prior written notice of any event referred to in Section 2.2(VI) of the FTX Credit Agreement, specifying the event in question in reasonable detail" (f) Section 5.2(c) of the Credit Agreement is hereby amended by adding a new sentence to the end thereof as follows: "Notwithstanding the foregoing, FTX and FRP shall not permit any Restricted Subsidiary which is not FRP or a Subsidiary of FRP as of January 1, 1994 (a "Non-FRP Subsidiary"), to merge or liquidate into or consolidate with FRP or any Subsidiary of FRP or to sell, lease, transfer or otherwise dispose of all or any significant percentage of the assets of any such Non-FRP Subsidiary to FRP or any of FRP's Subsidiaries nor shall FTX or FRP otherwise permit any Non-FRP Subsidiary to become a Subsidiary of FRP; provided that FRP and its Subsidiaries may create or acquire new Subsidiaries to the extent otherwise permitted hereby so long as such Subsidiaries were not previously Non-FRP Subsidiaries." (g) Section 5.2(g)(i) of the Credit Agreement is hereby amended by deleting the word "and" at the end of clause (E), by substituting "; and" for the period at the end of clause (F) and by adding the following new clause (G) as follows: "(G) $150,000,000 of aggregate principal amount of FRP's Senior Subordinated Notes due 2004 (the 'FRP Notes')." (h) Section 5.2 of the Credit Agreement is hereby amended by the addition of a new paragraph (t) as follows: "(t) FRP Notes. The FRP Obligations (as defined in Section 9.1) shall not cease to be at all times 'Senior Debt' as such term is used in the indenture for the FRP Notes and that FRP will not amend, waive or modify any provision of such indenture or of the FRP Notes without the prior written consent of the Required Banks. Without limitation of the foregoing, none of FTX, FRP or any Restricted Subsidiary shall, directly or indirectly, make any optional or mandatory prepayment, acquisition, repurchase or defeasance of the FRP Notes if after any Borrowing Base redetermination pursuant to Section 2.2(VI) of the FTX Credit Agreement, the Company would be out of compliance with Sections 3.2 and/or 5.2(b) after giving effect to such prepayment, acquisition, repurchase or defeasance." (i) Section 5.3 of the Credit Agreement is hereby amended by adding the following to the end of the first sentence thereof: ", including the provisions of Section 5.2(r) and (t)." SECTION 3. Conditions to Effectiveness. This Amendment shall become effective on the date of receipt (the "Effective Date") by the Agent of executed counterparts of this Amendment which, when taken together, bear the signatures of FI, FTX, FCX, the FI Trustee, the Agent and the Required Banks. SECTION 4. Counterparts. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument. SECTION 5. Limited Effect. Sections 1 and 2 hereof constitute a modification and amendment of the Credit Agreement effective as of the Effective Date. Except as, and until, expressly waived or modified by such Sections 1 and 2 hereof as of the Effective Date, the Credit Agreement shall continue in full force and effect in accordance with the provisions thereof as in effect immediately prior to the Effective Date. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Banks, the FI Trustee and the Agent under the Credit Agreement, nor alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. This Amendment shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 7. Expenses. FTX shall pay all out-of-pocket expenses incurred by the Agent in connection with the preparation of this Amendment, including, but not limited to, the reasonable fees and disbursements of Cravath, Swaine & Moore, special counsel for the Agent. SECTION 8. Headings. The headings of this Amendment are for reference only and shall not limit or otherwise affect the meaning hereof. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers or agents as of the date first above written. P.T. FREEPORT INDONESIA COMPANY, by ___________________________ Name: Title: FREEPORT-McMoRan INC., by ____________________________ Name: Title: FREEPORT-McMoRan COPPER & GOLD INC., by ___________________________ Name: Title: CHEMICAL BANK, individually and as Agent, by ____________________________ Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK (for purposes of Article VIII only), as FI Trustee, by ____________________________ Name: Title: ABN AMRO BANK, N.V., by ____________________________ Name: Title: ____________________________ Name: Title: ARAB BANKING CORPORATION, (B.S.C.), by _____________________________ Name: Title: THE BANK OF NOVA SCOTIA, by _____________________________ Name: Title: BANQUE PARIBAS, by _____________________________ Name: Title: BARCLAYS BANK PLC, by _____________________________ Name: Title: THE CHASE MANHATTAN BANK, N.A., by _____________________________ Name: Title: CHRISTIANA BANK, by _____________________________ Name: Title: _____________________________ Name: Title: COMMERZBANK AKTIENGESELLSCHAFT, by _____________________________ Name: Title: by _____________________________ Name: Title: DEUTSCHE BANK AG, New York Branch and/or Cayman Islands Branch, by _____________________________ Name: Title: _____________________________ Name: Title: FIRST NATIONAL BANK OF COMMERCE, by _____________________________ Name: Title: THE FUJI BANK, LIMITED, by _____________________________ Name: Title: THE INDUSTRIAL BANK OF JAPAN, LTD., New York Branch, by _____________________________ Name: Title: LTCB TRUST COMPANY, by _____________________________ Name: Title: MELLON BANK, N.A., by _____________________________ Name: Title: THE MITSUI TRUST AND BANKING COMPANY, LIMITED, New York Branch, by _____________________________ Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK, by _____________________________ Name: Title: NATIONAL WESTMINSTER BANK PLC, by _____________________________ Name: Title: NBD BANK, N.A., by _____________________________ Name: Title: N.M. ROTHSCHILD & SONS LIMITED, by _____________________________ Name: Title: P.T. BANK RAKYAT INDONESIA (PERSERO), by _____________________________ Name: Title: by _____________________________ Name: Title: BANK OF TOKYO TRUST COMPANY, by _____________________________ Name: Title: SOCIETE GENERALE, by _____________________________ Name: Title: WESTDEUTSCHE LANDESBANK GIROZENTRALE, New York and Cayman Islands Branches, by _____________________________ Name: Title: _____________________________ Name: Title: YASUDA TRUST AND BANKING COMPANY, LIMITED, by _____________________________ Name: Title: EX-4.12 11 Exhibit 4.12 SECOND AMENDMENT dated as of March 1, 1994 (this "Amendment"), to the Credit Agreement dated as of October 27, 1989, as amended and restated as of June 1, 1993 (as further amended by the First Amendment dated as of February 2, 1994, the "Credit Agreement"), among P.T. FREEPORT INDONESIA COMPANY, a limited liability company organized under the laws of Indonesia and also domesticated in Delaware ("FI"), FREEPORT-McMoRan INC., a Delaware corporation ("FTX"), FREEPORT-McMoRan COPPER & GOLD INC., a Delaware corporation ("FCX"), the undersigned banks (collectively, the "Banks"), MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a New York banking corporation (for purposes of Article VIII of the Credit Agreement only), as trustee for the Banks under the FI Trust Agreement and, in such capacity, as security agent for the Banks under the FI Security Documents (in such capacity, the "FI Trustee") and CHEMICAL BANK, a New York banking corporation, as agent for the Banks (in such capacity, the "Agent"). Capitalized terms used herein and not otherwise defined herein shall have the meanings given such terms in the Credit Agreement. WHEREAS, FI, FTX, FCX, the Required Banks, the FI Trustee and the Agent have agreed that certain provisions of the Credit Agreement be amended in order that P.T. ALatieF Freeport Finance Company B.V., a corporation organized under the laws of The Netherlands ("ALatieF B.V.") which is a wholly owned subsidiary of FCX, may issue up to $180,000,000 aggregate principal amount of its Senior Notes due 2001 to be guaranteed by FCX (the "Securities"), as more particularly described in the Registration Statement on Form S-3 relating to the Securities (the "Registration Statement") attached hereto as Exhibit A, which FCX has provided to the Banks. Any proceeds of issuance of the Securities in excess of $120,000,000 will be applied to prepay loans under the Chase ALatieF Agreement referred to in Section 2(j) hereof. NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, FI, FTX, FCX, the FI Trustee, the Agent and the Required Banks hereby agree, on the terms and subject to the conditions set forth herein, as follows: SECTION 1. Approval of Form of the Securities. The Required Banks hereby approve the terms and conditions of the Securities, the Underlying Notes (as defined in the Registration Statement) and PT-FI Note (as defined in the Registration Statement) as set forth in the Registration Statement and agree that, subject to approval by the Agent of the indenture relating to the Securities and the forms of the Underlying Notes and the PT-FI Note as being in accordance with the terms for the Securities set forth in the Registration Statement, upon the effectiveness of this Amendment, (a) ALatieF B.V. may issue the Securities, (b) ALatieF B.V. may loan the proceeds of the Securities to FI pursuant to the PT-FI Note and (c) FCX may guarantee the Securities, in each case on the terms set forth in the Registration Statement. FTX and FCX agree that ALatieF B.V. shall be a Restricted Subsidiary for all purposes under the Credit Agreement and the FTX Credit Agreement. SECTION 2. Amendments to the Credit Agreement; Consent. (a) Section 1.1 of the Credit Agreement is hereby amended by renumbering the existing clause (iii) in the definition of "Equity Payment" as clause (iv), and inserting immediately after clause (ii), a new clause (iii) as follows: ", (iii) purchases or acquisitions, directly or indirectly, of any B.V. Notes except to the extent made with cash of, or proceeds of dispositions of assets owned by, ALatieF-FI and/or any Infrastructure Affiliate (as defined in the Registration Statement on Form S-3 (the "B.V. Registration Statement") relating to the B.V. Notes), and" (b) Section 1.1 of the Credit Agreement is hereby amended by adding the following definition: "'B.V. Notes' has the meaning assigned to such term in Section 5.2(g)(i)(H)." (c) The Banks hereby consent to the amendment of Section 2.2 of the FTX Credit Agreement by adding a new clause (VII) thereto as follows and renumbering the existing clause "(VII)" as "(VIII)": ", (VII) FTX, FCX or any Restricted Subsidiary shall determine to, or shall be required to make, any optional or mandatory prepayment, acquisition, repurchase or defeasance of the B.V. Notes" (d) The Banks hereby consent to the amendment of Section 2.4 of the FTX Credit Agreement by substituting the following for the words "or (VII)" appearing therein: ", (VI) (but only so long as no optional or mandatory prepayment, acquisition, repurchase or defeasance of the FRP Notes shall occur or be committed to on a binding basis), (VII) (but only so long as no optional or mandatory prepayment, acquisition, repurchase or defeasance of the B.V. Notes shall occur or be committed to on a binding basis) or (VIII)" (e) The Banks hereby consent to the amendment of Section 2.6 of the FTX Credit Agreement by the replacement of the last two sentences thereof, as modified by the First Amendment to the FTX Credit Agreement, with the following: "If a Borrowing Base redetermination shall occur pursuant to clause (VI) or clause (VII) of Section 2.2 because a 'Change in Control' (as defined in the indenture for the FRP Notes) or a 'Repurchase Event' (as defined in the indenture for the B.V. Notes) has occurred which would require any offer to repurchase or redeem the FRP Notes or B.V. Notes, or would permit the holders of the FRP Notes or B.V. Notes to require the FRP Notes or B.V. Notes, as applicable, to be prepaid, redeemed or repurchased, FTX and FRP acknowledge and agree that in making such redetermination of the Borrowing Base, the Banks may take into account such factors relating to the Change of Control or Repurchase Event as they shall, in their sole and unreviewable discretion, determine to be relevant or appropriate, including without limitation any perceived or prior lack of creditworthiness of the entity to result after such Change in Control or Repurchase Event, discounts to the value, timing or likelihood of realization of assets of FRP, FTX and their Subsidiaries or any other risks, whether or not similar to the foregoing. FTX and FRP irrevocably and unconditionally agree that they shall not contest or dispute any such redetermination of the Borrowing Base under any circumstance or claim whatsoever." (f) Section 5.1(a)(5) of the Credit Agreement is hereby amended by the insertion of "or (VII)" immediately after the reference to "Section 2.2(VI)", as incorporated by the First Amendment to the Credit Agreement. (g) Section 5.2(c) of the Credit Agreement is hereby amended by adding a new sentence to the end thereof as follows: "Notwithstanding the foregoing, FTX and FCX shall not permit any Restricted Subsidiary which is not FI or a direct or indirect Subsidiary of FCX as of January 1, 1994 (a "Non-FCX Subsidiary"), to merge or liquidate into or consolidate with FCX, FI or any Subsidiary of FCX or to sell, lease, transfer or otherwise dispose of all or any significant percentage of the assets of any such Non-FCX Subsidiary to FCX, FI or any of FCX's Subsidiaries nor shall FTX, FCX or FI otherwise permit any Non-FCX Subsidiary to become a Subsidiary of FCX; provided that FCX and its Subsidiaries may create or acquire new Subsidiaries to the extent otherwise permitted hereby so long as such Subsidiaries were not previously Non-FCX Subsidiaries." (h) Section 5.2(g)(i) of the Credit Agreement is hereby amended by deleting the word "and" at the end of clause (F), by substituting "; and" for the period at the end of clause (G) and by adding the following new clause (H) as follows: "(H) ($180,000,000) of aggregate principal amount of P.T. ALatieF Freeport Finance Company B.V.'s Senior Notes due 2001 (the 'B.V. Notes'), the Guarantee by FCX of the B.V. Notes and the PT-FI Note (as defined in the B.V. Registration Statement)." (i) Section 5.2(o) of the Credit Agreement is hereby amended by substituting a "," for the word "and" prior to clause (ix) thereof and inserting the following as a new clause (x): "and (x) the advance by P.T. ALatieF Freeport Finance Company B.V. of the proceeds of the B.V. Notes to FI on the terms of the PT-FI Note (as defined in the B.V. Registration Statement)" (j) Section 5.2 of the Credit Agreement is hereby amended by the addition of new paragraphs (u), (v), (w) and (x) as follows: "(u) B.V. Notes. None of FTX, FCX or any Restricted Subsidiary shall, directly or indirectly, make any optional or mandatory prepayment, acquisition, repurchase or defeasance of the B.V. Notes if after any Borrowing Base redetermination pursuant to Section 2.2(VII) of the FTX Credit Agreement, the Company would be out of compliance with Sections 3.2 and/or 5.2(b) thereof after giving effect to such prepayment, acquisition, repurchase or defeasance. (v) Chase Borrowings. After the date of issuance of the B.V. Notes, FTX and FI shall not permit the aggregate principal amount of outstanding borrowings under the Credit Agreement dated as of December 15, 1993, among ALatief-FI, The Chase Manhattan Bank (National Association), as agent, and certain banks party thereto (the "Chase-ALatieF Agreement"), to exceed (x) $60,000,000 minus (y) the initial proceeds of the B.V. Notes in excess of $120,000,000, nor shall FTX and FI permit ALatief-FI or any Infrastructure Affiliate (as defined in the B.V. Registration Statement) to grant any additional security or collateral to secure any indebtedness or other obligations under the Chase- ALatieF Agreement (other than as required thereunder with respect to substitution or replacement of existing collateral), unless the Banks shall have the right, upon compliance with the requirements of the related Master Services Agreement (as defined in the B.V. Registration Statement) or such other similar document, to have continued use of the facilities with respect to which such additional security or collateral is granted after any default by FI; provided, however, that this paragraph (v) shall not be deemed to prevent FI or ALatief-FI from complying with the requirements of Section 8.23(b) of the Chase-ALatief Agreement, so long as assets so transferred continue to be subject to any Master Services Agreement (as defined in the B.V. Registration Statement) or such other similar agreement in a form approved by the Agent. (w) Service Contract Amendments. FTX, FCX and FI shall not enter into, or permit, without the prior written consent of the Agent, any amendment or modification to any Master Services Agreement (as defined in the B.V. Registration Statement) or any other similar agreement relating to FI's rights to use any asset referred to in Section 8.1(i)(B)(ii) or (iii), which would, in any manner, materially adversely affect the Banks or the ability of FI to comply with the provisions of the Credit Agreement, including without limitation, the right of the Banks, upon compliance with the requirements of the Master Services Agreement or such other agreement, to have continued use of any facilities comprising the Enhanced Infrastructure Project (as defined in the B.V. Registration Statement) or any other asset referred to in Section 8.1(i)(B)(ii) or (iii) after any default by FI; provided, however, that with respect to any such agreement, the consent required by this Section 5.2(w) shall be deemed to have been granted if such agreement is substantially in the approved form heretofore entered into in connection with the ALatief-FI Transfer. FTX, FCX and FI shall promptly notify the Agent of any proposed amendment or modification contemplated by this Section 5.2(w). (x) Joint Venture Agreements. FTX, FCX and FI shall not enter into, or permit, without the prior written consent of the Agent, any joint venture agreement, or amendment thereto, for any entity, including any Infrastructure Affiliate (as defined in the B.V. Registration Statement) (other than ALatief-FI), receiving infrastructure assets related to the Enhanced Infrastructure Project (as defined in the B.V. Registration Statement) or any other asset referred to in Section 8.1(i)(B)(ii) or (iii); provided, however, that with respect to any such agreement, the consent required by this Section 5.2(x) shall be deemed to have been granted if such agreement is substantially in the approved form of the ALatief-FI Joint Venture Agreement." SECTION 3. Conditions to Effectiveness. This Amendment shall become effective on the date of receipt (the "Effective Date") by the Agent of executed counterparts of this Consent which, when taken together, bear the signatures of FI, FTX, FCX and the Required Banks. SECTION 4. Counterparts. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument. SECTION 5. Limited Effect. Sections 1 and 2 hereof constitute a modification and amendment of the Credit Agreement effective as of the Effective Date. Except as, and until, expressly waived or modified by such Sections 1 and 2 hereof as of the Effective Date, the Credit Agreement shall continue in full force and effect in accordance with the provisions thereof as in effect immediately prior to the Effective Date. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Banks, the FI Trustee and the Agent under the Credit Agreement, nor alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. This Amendment shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 7. Expenses. FTX shall pay all out-of-pocket expenses incurred by the Agent in connection with the preparation of this Amendment, including, but not limited to, the reasonable fees and disbursements of Cravath, Swaine & Moore, special counsel for the Agent. SECTION 8. Headings. The headings of this Amendment are for reference only and shall not limit or otherwise affect the meaning hereof. SECTION 9. ALatieF B.V. Consent. By its signature below, ALatieF B.V., although not a party to the Credit Agreement, hereby consents and agrees to the provisions set forth herein and agrees to comply with the provisions herein applicable to it. IN WITNESS WHEREOF, the parties hereto have caused this Consent to be executed by their duly authorized officers or agents as of the date first above written. P.T. FREEPORT INDONESIA COMPANY, by ___________________________ Name: Title: FREEPORT-McMoRan INC., by ____________________________ Name: Title: FREEPORT-McMoRan COPPER & GOLD INC., by ___________________________ Name: Title: CHEMICAL BANK, individually and as Agent, by ____________________________ Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK (for purposes of Article VIII only), as FI Trustee, by ____________________________ Name: Title: ABN AMRO BANK, N.V., by ____________________________ Name: Title: by ____________________________ Name: Title: ARAB BANKING CORPORATION, (B.S.C.), by _____________________________ Name: Title: THE BANK OF NOVA SCOTIA, by _____________________________ Name: Title: BANK OF TOKYO TRUST COMPANY, by _____________________________ Name: Title: BANQUE PARIBAS, by _____________________________ Name: Title: by _____________________________ Name: Title: BARCLAYS BANK PLC, by _____________________________ Name: Title: THE CHASE MANHATTAN BANK, N.A., by _____________________________ Name: Title: CHRISTIANIA BANK, by _____________________________ Name: Title: by _____________________________ Name: Title: COMMERZBANK AKTIENGESELLSCHAFT, by _____________________________ Name: Title: by _____________________________ Name: Title: DEUTSCHE BANK AG, New York Branch and/or Cayman Islands Branch, by _____________________________ Name: Title: by _____________________________ Name: Title: FIRST NATIONAL BANK OF COMMERCE, by _____________________________ Name: Title: THE FUJI BANK, LIMITED, by _____________________________ Name: Title: THE INDUSTRIAL BANK OF JAPAN, LTD., New York Branch, by _____________________________ Name: Title: LTCB TRUST COMPANY, by _____________________________ Name: Title: MELLON BANK, N.A., by _____________________________ Name: Title: THE MITSUI TRUST AND BANKING COMPANY, LIMITED, New York Branch, by _____________________________ Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK, by _____________________________ Name: Title: NATIONAL WESTMINSTER BANK PLC, by _____________________________ Name: Title: NBD BANK, N.A., by _____________________________ Name: Title: N.M. ROTHSCHILD & SONS LIMITED, by _____________________________ Name: Title: P.T. BANK RAKYAT INDONESIA (PERSERO), by _____________________________ Name: Title: by _____________________________ Name: Title: SOCIETE GENERALE, by _____________________________ Name: Title: WESTDEUTSCHE LANDESBANK GIROZENTRALE, NewYork and/or Cayman Island Branches, by _____________________________ Name: Title: by _____________________________ Name: Title: YASUDA TRUST AND BANKING COMPANY, LIMITED, by _____________________________ Name: Title: P.T. ALATIEF FREEPORT FINANCE COMPANY B.V. (for purposes of Section 9 hereof only), by _____________________________ Name: Title: EX-12.1 12 Exhibit 12.1 FREEPORT-McMoRan COPPER & GOLD INC. Computation of Ratio of Earnings to Fixed Charges
Years Ended December 31, ----------------------------------------------- 1993 1992 1991 1990 1989 -------- -------- -------- -------- ------ (In Thousands) Income from continuing operations $ 60,670 $129,893 $101,962 $ 90,179 $ 98,927 Add: Provision for income taxes 67,589 103,726 45,585 88,330 89,624 Minority interest share of net income 9,134 31,075 12,199 13,726 17,415 Interest expense 15,327 18,897 21,451 13,517 187 Rental expense factor(a) 3,190 876 841 693 223 -------- -------- -------- -------- -------- Earnings available for fixed charges $155,910 $284,467 $182,038 $206,445 $206,376 ======== ======== ======== ======== ======== Interest expense $ 15,327 $ 18,897 $ 21,451 $ 13,517 $ 187 Capitalized interest 24,519 23,974 18,276 8,244 7,074 Rental expense factor(a) 3,190 876 841 693 223 -------- -------- -------- -------- -------- Fixed charges $ 43,036 $ 43,747 $ 40,568 $ 22,454 $ 7,484 ======== ======== ======== ======== ======== Ratio of earnings to fixed charges(b) 3.6x 6.5x 4.5x 9.2x 27.6x ==== ==== ==== ==== ===== a. Portion of rent which is deemed representative of interest. b. For purposes of this calculation, earnings consist of income from continuing operations before income taxes, minority interest and fixed charges. Fixed charges include interest and that portion of rent deemed representative of interest.
EX-13.1 13 Exhibit 13.1 FREEPORT-McMoRan COPPER & GOLD INC. BALANCE SHEETS December 31, ____________________ 1993 1992 _____ _____ ASSETS (In Thousands) Current assets: Cash and short-term investments................... $ 13,798 $ 371,842 Accounts receivable: Customers....................................... 122,527 130,587 Other........................................... 66,202 20,249 Inventories: Products........................................ 58,247 13,911 Materials and supplies.......................... 153,681 118,347 Prepaid expenses and other........................ 13,787 6,178 __________ _________ Total current assets............................ 428,242 661,114 __________ _________ Property, plant and equipment..................... 2,172,222 1,443,939 Less accumulated depreciation and amortization.... 525,619 450,527 __________ _________ Net property, plant and equipment............... 1,646,603 993,412 __________ _________ Other assets...................................... 41,808 39,479 __________ _________ Total assets...................................... $2,116,653 $1,694,005 ========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities.......... $ 218,083 $ 88,876 Current portion of long-term debt and short-term borrowings........................... 48,791 78,571 Accrued income and other taxes.................... 20,865 1,129 __________ _________ Total current liabilities....................... 287,739 168,576 Long-term debt, less current portion.............. 211,868 645,012 Accrued postretirement benefits and other liabilities............................... 188,165 15,558 Deferred income taxes............................. 201,553 196,953 Minority interest................................. 46,781 21,449 Mandatory redeemable gold-denominated preferred stock................................. 232,620 - Stockholders' equity: Special preference stock.......................... 224,400 224,400 Step-Up preferred stock........................... 350,000 - Class A common stock, par value $.10.............. 5,802 5,318 Class B common stock, par value $.10.............. 14,213 14,213 Capital in excess of par value of common stock.... 334,166 353,697 Cumulative foreign translation adjustment......... (10,012) - Retained earnings................................. 29,358 48,829 __________ _________ 947,927 646,457 __________ _________ Total liabilities and stockholders' equity........ $2,116,653 $1,694,005 ========== ========= The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan COPPER & GOLD INC. STATEMENTS OF INCOME Years Ended December 31, __________________________ 1993 1992 1991 ____ ____ ____ (In Thousands, Except Per Share Amounts) Revenues....................................... $925,932 $714,315 $467,522 Cost of sales: Site production and delivery................... 567,148 308,948 204,353 Depreciation and amortization.................. 67,906 48,272 38,397 ________ ________ ________ Total cost of sales.......................... 635,054 357,220 242,750 Exploration expenses........................... 33,748 12,185 6,502 Provision for restructuring charges............ 20,795 - - General and administrative expenses............ 81,399 68,481 40,550 ________ ________ ________ Total costs and expenses..................... 770,996 437,886 289,802 ________ ________ ________ Operating income............................... 154,936 276,429 177,720 Interest expense, net.......................... (15,327) (18,897) (21,451) Other income (expense), net.................... (2,216) 7,162 3,477 ________ ________ ________ Income before income taxes and minority interest 137,393 264,694 159,746 Provision for income taxes..................... (67,589) (103,726) (45,585) Minority interest.............................. (9,134) (31,075) (12,199) ________ ________ ________ Income before changes in accounting principle.. 60,670 129,893 101,962 Cumulative effect of changes in accounting principle, net of taxes and minority interest (9,854) - (5,803) ________ ________ ________ Net income..................................... 50,816 129,893 96,159 Preferred dividends............................ (28,954) (7,025) - ________ ________ ________ Net income applicable to common stock.......... $ 21,862 $122,868 $ 96,159 ======== ======== ======== Net income per share of common stock: Before changes in accounting principle....... $.16 $.66 $.56 Cumulative effect of changes in accounting principle.................................... (.05) - (.03) ________ ________ ________ $.11 $.66 $.53 ======== ======== ======== Average common shares outstanding.............. 197,929 187,343 182,130 ======== ======== ======== Dividends per common share..................... $.60 $.60 $.55 ======== ======== ======== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan COPPER & GOLD INC. STATEMENTS OF CASH FLOW Years End December 31, __________________________ 1993 1992 1991 ---- ---- ---- Cash flow from operating activities: (In Thousands) Net income.................................... $ 50,816 $129,893 $ 96,159 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of changes in accounting principle................... 9,854 - 5,803 Depreciation and amortization............... 67,906 48,272 38,397 Provision for restructuring charges, net of payments........................... 4,623 - - Deferred income taxes....................... 8,512 52,154 17,052 Amortization of discount on zero coupon exchangeable notes........................ 10,844 17,297 9,162 Minority interest's share of net income..... 9,134 31,075 12,199 (Increase) decrease in working capital, net of effect of acquisition: Amount due from FTX....................... - 20,000 (20,000) Accounts receivable....................... (16,904) (77,448) (24,647) Inventories............................... (36,669) (10,644) (50,086) Prepaid expenses and other................ (10,503) (4,157) (939) Accounts payable and accrued liabilities.. 32,792 44,035 (794) Accrued income and other taxes............ 19,736 1,129 (9,988) Other....................................... 8,404 963 1,554 ________ ________ ________ Net cash provided by operating activities..... 158,545 252,569 73,872 ________ ________ ________ Cash flow from investing activities: Capital expenditures.......................... (453,122) (367,842) (239,954) Purchase of indirect interest in PT-FI........ - (211,892) - Acquisition of RTM, net of cash acquired...... (10,390) - - ________ ________ ________ Net cash used in investing activities......... (463,512) (579,734) (239,954) ________ ________ ________ Cash flow from financing activities: Cash dividends paid: Common stock................................ (118,575) (111,365) (100,171) Preferred stock............................. (22,981) (4,407) - Minority interest........................... (19,143) (15,643) (8,945) Conversion of zero coupon exchangeable notes.. - (7,848) - Proceeds from debt............................ 397,971 153,000 103,000 Repayment of debt............................. (931,439) - (10,000) Net proceeds from infrastructure financing.... 80,000 - - Net proceeds from sale of: Step-Up preferred stock..................... 340,700 - - Gold-denominated preferred stock............ 220,390 - - Class A common stock........................ - 174,142 - Special preference stock.................... - 217,867 - Subsidiary interest......................... - 212,485 - Zero coupon exchangeable notes.............. - - 218,560 ________ ________ ________ Net cash provided by (used in) financing activities........................ (53,077) 618,231 202,444 ________ ________ ________ Net increase (decrease) in cash and short-term investments...................... (358,044) 291,066 36,362 Cash and short-term investments at beginning of year........................ 371,842 80,776 44,414 ________ ________ ________ Cash and short-term investments at end of year.............................. $ 13,798 $371,842 $ 80,776 ======== ======== ======== Interest paid................................. $ 29,122 $ 22,581 $ 32,482 ======== ======== ======== Income taxes paid............................. $ 39,314 $ 50,029 $ 38,521 ======== ======== ======== The accompanying notes, which include information in Notes 1, 2, 3, and 7 regarding noncash transactions, are an integral part of these financial statements. FREEPORT-McMoRan COPPER & GOLD INC. STATEMENTS OF STOCKHOLDERS' EQUITY Years End December 31, __________________________ 1993 1992 1991 ---- ---- ---- (In Thousands) Special Preference Stock: Balance at beginning of year................... $224,400 $ - $ - Sale of shares to the public.................. - 224,400 - ________ ________ ________ Balance at end of year...................... 224,400 224,400 - ________ ________ ________ Step-Up Preferred Stock: Sale of shares to the public.................. 350,000 - - ________ ________ ________ Class A common stock: Balance at beginning of year.................. 5,318 2,000 2,000 Two-for-one stock split....................... - 2,000 - Sale of shares to the public.................. - 863 - Conversion of zero coupon exchangeable notes.. 484 455 - ________ ________ ________ Balance at end of year...................... 5,802 5,318 2,000 ________ ________ ________ Class B common stock: Balance at beginning of year.................. 14,213 7,106 7,106 Two-for-one stock split....................... - 7,107 - ________ ________ ________ Balance at end of year...................... 14,213 14,213 7,106 ________ ________ ________ Capital in excess of par value of common stock: Balance at beginning of year.................. 353,697 163,439 167,451 Issuance cost of Mandatory Redeemable Gold- Denominated and Step-Up Preferred Stock..... (21,530) - - Sale of Class A and Special Preference Stock.. - 166,746 - Conversion of zero coupon exchangeable notes.. 79,241 69,945 - Two-for-one stock split....................... - (9,107) - Cash dividends on common stock................ (65,587) (37,326) (4,012) Dividends on preferred stocks................. (11,655) - - ________ ________ ________ Balance at end of year...................... 334,166 353,697 163,439 ________ ________ ________ Cumulative foreign translation adjustment: Current year adjustment....................... (10,012) - - ________ ________ ________ Retained earnings: Balance at beginning of year.................. 48,829 - - Net income.................................... 50,816 129,893 96,159 Cash dividends on common stock................ (52,988) (74,039) (96,159) Dividends on preferred stocks................. (17,299) (7,025) - ________ ________ ________ Balance at end of year...................... 29,358 48,829 - ________ ________ ________ Total stockholders' equity.................... $947,927 $646,457 $172,545 ======== ======== ======== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan COPPER & GOLD INC. NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation. The consolidated financial statements of Freeport-McMoRan Copper & Gold Inc. (FCX or the Company) include its majority-owned subsidiaries, including P.T. Freeport Indonesia Company (PT-FI) and Rio Tinto Minera, S.A. (RTM). Reclassifications were made to prior year financial statements to conform to the 1993 presentation. All significant intercompany transactions have been eliminated. Cash and Short-Term Investments. The Company considers highly liquid investments purchased with a maturity of three months or less to be cash equivalents. PT-FI and RTM cash is not available to FCX until cash dividends are paid to FCX. At December 31, 1993, PT-FI's net assets totaled $184.3 million, including $24.6 million of retained earnings. On January 5, 1994, PT-FI declared a $42.1 million dividend of which $36.1 million was due to FCX. At December 31, 1993, RTM's net assets totaled $40.2 million. RTM is not expected to pay a dividend to FCX in the near future. Inventories. Inventories are generally stated at the lower of cost or market. PT-FI uses the average cost method and RTM uses the first-in, first-out (FIFO) cost method. Property, Plant and Equipment. Property, plant and equipment is carried at cost. Mineral exploration costs are expensed as incurred, except in the year the property is deemed to contain a viable mineral deposit, in which case they are capitalized. Development costs, which include interest incurred during the construction and development period, are capitalized. Expenditures for replacements and improvements are capitalized. Depreciation expense for mining and milling operations is determined using the unit-of-production method based on estimates of recoverable reserves. Other assets, including RTM's smelter, are depreciated on a straight-line basis over estimated useful lives of 15 to 20 years for buildings and 3 to 25 years for machinery and equipment. Hedging. PT-FI has a price protection program for virtually all of its estimated copper sales to be priced in 1994 at an average floor price of $.90 per pound, while allowing full benefit from prices above that amount. The cost of this program ($6.0 million at December 31, 1993) is included in product inventories and will be amortized during 1994. Based on an average 1994 forward market price of approximately $.82 per pound of copper (December 31, 1993 forward prices per London Metal Exchange, LME), the market value of these contracts is approximately $56 million. The contracts are with a diversified group of financially strong counterparties. RTM has forward contracts for approximately 61 percent of its estimated 1994 gold production at $383.80 per ounce and 38 percent of its estimated 1995 gold production at $394.80 per ounce. RTM has also hedged approximately 53 percent and 38 percent of its estimated 1994 and 1995 silver production at $4.70 and $4.80 per ounce, respectively. Based on a market price of $390.65 per ounce of gold and $5.12 per ounce of silver (December 31, 1993 price per LME), these contracts are in a loss position of approximately $2 million. Additionally, RTM has a policy of eliminating significant exposure to copper price fluctuations by hedging purchases of concentrate at its smelter through the use of forward contracts. At December 31, 1993, RTM sold forward approximately 4.2 million pounds of its concentrate inventory at approximately $.78 per pound of copper. Concentrate Sales. Revenues associated with PT-FI's sales of metal concentrates are recorded net of royalties, treatment costs, and amortization of the cost of its price protection program. PT-FI's concentrate sales agreements provide for provisional billings based on world metals prices, primarily the LME, with actual settlement generally based on appropriate future metals prices. Revenues, recorded initially using provisional prices, are adjusted using current prices. At December 31, 1993, copper sales totaling 213.4 million pounds remained to be contractually priced at various times in 1994. As a result of PT-FI's price protection program, these pounds are recorded at an average price of $.90 per pound. Gold sales are priced according to individual contract terms. Foreign Translation Adjustment. The functional currency for RTM is the Spanish peseta. RTM's assets and liabilities are translated to U.S. dollars using the exchange rate in effect at the balance sheet date. The cumulative results of the translation adjustment are recorded as a separate component of stockholders' equity. Results of operations are translated using the average exchange rates during the period. Gains and losses resulting from foreign currency transactions, which were not material, are included in net income. Changes in Accounting Principle. During 1993, the Company adopted the following changes to accounting policies: Periodic Scheduled Maintenance Costs - Costs related to periodic scheduled maintenance (turnarounds) were previously capitalized when incurred and amortized generally over six months to two years. Effective January 1, 1993, the method of accounting was changed to expense these costs when incurred. Deferred Charges - The accounting for deferred charges was changed to provide for deferral of only those costs that directly relate to the acquisition, construction, and development of assets and to the issuance of debt and related instruments. Previously, certain other costs that benefitted future periods were amortized over the periods benefitted. Management Information Systems - Costs of management information systems (MIS) equipment and software that have a material impact on periodic measurement of net income are capitalized and amortized over their estimated productive lives. Other MIS costs, including equipment and purchased software that involve relatively immaterial amounts (currently individual expenditures of less than $.5 million) and short estimated productive lives (currently less than three years) are charged to expense when incurred. During 1993, approximately $3.5 million of equipment and purchased software was charged to expense. Previously, most expenditures for MIS equipment and purchased software were capitalized. The accounting for MIS costs was changed to recognize the rapid rate of technology change in MIS which results in short productive lives of equipment and software and a need for continuing investments. The changes in accounting policy were adopted to improve the measurement of operating results by reporting cash expenditures as expenses when incurred unless they are directly related to long-lived asset additions. In addition, the administrative costs of accounting for assets will be reduced by not capitalizing and amortizing relatively insignificant expenditures that do not have a material effect on measuring periodic net income. If these changes in accounting principle had not been adopted, 1993 income before changes in accounting principle would not have been materially different from the amount reported. If the changes in accounting principle had been applied in prior years, 1992 and 1991 net income would not have been materially different from amounts reported. Restructuring Charges. FCX recognized expense of $20.8 million during 1993 for restructuring the administrative organization (including primarily personnel related costs and a write-off of excess office facilities) of Freeport-McMoRan Inc. (FTX), the parent company of FCX, the cost to downsize PT-FI's computing and MIS structure, and a write-off of costs associated with PT-FI's previous credit agreement. See Management's Discussion and Analysis of Financial Condition and Results of Operations for information about a reclassification of restructuring charges from those previously reported resulting from views expressed by the Securities and Exchange Commission staff. 2. OWNERSHIP IN PT-FI In January 1991, the Government of Indonesia (the Government) increased its ownership in PT-FI from 8.9 percent to 10 percent by purchasing 2,242 PT-FI shares owned by FCX for $18.1 million. FCX withholds 40 percent of PT-FI dividends on all Government-owned shares until the non-interest bearing receivable ($2.2 million at December 31, 1993) is satisfied. In December 1991, FCX exchanged 21,300 shares of PT-FI common stock for a $212.5 million subordinated promissory note from PT-FI, reducing FCX's ownership in PT-FI to approximately 89 percent with the remaining 11 percent being owned by the Government. Interest on the note is due quarterly at a rate equal to the effective rate under PT-FI's amended credit agreement, and principal is payable in twenty equal, quarterly installments beginning January 2000. If interest or principal is in arrears, PT-FI cannot pay dividends on its common stock. In December 1991, PT-FI and the Government signed a new contract of work (New COW) which has a 30-year term with two 10-year extensions permitted. Under the New COW, FCX pays the Government a royalty of 1.5 percent to 3.5 percent on the value of copper sold, net of delivery costs and treatment and refining charges, and a 1 percent royalty on the sales value of gold and silver ($9.5 million in 1993, $15.7 million in 1992, and $10.5 million in 1991). The New COW required FCX to increase the ownership by Indonesian entities in PT-FI to 20 percent, which was achieved through the sale of 10 percent (21,300 shares) of PT-FI common stock to an entity owned by Indonesian investors on December 31, 1991. In December 1992, FCX purchased 49 percent (10.5 million shares) of the capital stock of the publicly traded Indonesian entity which owned the 10 percent of PT-FI sold in 1991. In December 1993, PT-FI issued 8,321 shares of its stock to FCX in exchange for the conversion of certain notes (Note 7). FCX's direct ownership in PT-FI totaled 80.8 percent and 80.0 percent at December 31, 1993 and 1992, respectively. In 1994, PT-FI issued an additional 6,169 shares of its stock to FCX for conversion of the remaining notes, increasing FCX's direct ownership in PT-FI to 81.3 percent. Each transaction discussed above used the fair market value of FCX Class A common stock at the time of the agreements as the basis to calculate the purchase and sale prices. 3. ACQUISITION OF RTM In March 1993, FCX acquired a 65 percent interest in RTM, which operates a copper smelter and a gold mine with an estimated remaining life of fewer than four years, by investing approximately $50 million, excluding transaction costs, to be used by RTM for working capital requirements and capital expenditures, including funding a portion of the costs of the expansion of its smelter production capacity from its current 150,000 metric tons of metal per year to 180,000 metric tons of metal per year by mid-1995. In December 1993, RTM redeemed the remaining 35 percent interest for approximately $19 million. Selected balance sheet information reflecting the allocation of the purchase price to the assets and liabilities acquired is as follows (in thousands): Current assets...........................................$101,454 Current liabilities......................................(158,445) Property, plant and equipment, net........................277,170 Other assets................................................5,358 Long-term debt............................................(38,941) Accrued postretirement benefits and other liabilities....(176,206) ________ Net cash investment......................................$ 10,390 ======== Unaudited pro forma data giving effect to the purchase of RTM as if it had been acquired on January 1 of each year is as follows: Years Ended December 31, _________________________ 1993 1992 ____ ____ Revenues (000s)....................................$1,024,097 $1,176,612 Operating income (000s)...............................152,484 267,951 Net income before changes in accounting principle (000s).......................22,578 96,760 Net income per share................................... .11 .52 The pro forma results are not necessarily indicative of the actual results that would have been achieved nor are they indicative of future results. 4. REDEEMABLE PREFERRED STOCK In August 1993, FCX sold publicly 6.0 million depositary shares representing 300,000 shares of its Gold-Denominated Preferred Stock. Each depositary share has a cumulative quarterly cash dividend equal to the value of 0.000875 ounces of gold and is subject to mandatory cash redemption in August 2003 for the value of 0.1 ounces of gold. The depositary shares are recorded at their offering price and are being reflected as a hedge of future gold sales for accounting purposes. The net proceeds from this offering ($220.4 million) were loaned to PT-FI in the form of a Gold Production Payment Loan, requiring quarterly production payments of 6,176 ounces of refined gold bullion or the dollar equivalent thereof. Based on the December 31, 1993 closing market price, these depositary shares had a market value of $258.0 million. In January 1994, FCX sold publicly 4.3 million depositary shares representing 215,279 shares of its Gold-Denominated Preferred Stock, Series II. Each depositary share has a cumulative quarterly cash dividend equal to the value of 0.0008125 ounces of gold and is subject to mandatory cash redemption in February 2006 for the value of 0.1 ounces of gold. The net proceeds from this offering ($158.5 million) were loaned to PT-FI under terms similar to the Gold Production Payment Loan discussed above. 5. STOCKHOLDERS' EQUITY FCX has 312.0 million authorized shares of capital stock consisting of 110.0 million of Special stock, 200.0 million of Class B common stock, and 2.0 million of Preferred stock. Special and Preferred Stock. At December 31, 1993, there were 84.4 million shares of Special stock issued and outstanding, 58.0 million as Class A common stock and 26.4 million as Special Preference Stock. In July 1992, FCX sold publicly 8.6 million shares of its Class A common stock and 9.0 million depositary shares. Each depositary share represents 2-16/17 shares of its 7% Convertible Exchangeable Special Preference Stock (Special Preference Stock), has a cumulative annual cash dividend of $1.75 (payable quarterly) and a $25 liquidation preference, and is convertible at the option of the holder into approximately 1.009 shares of FCX Class A common stock (equivalent to a conversion price of $24.77 per share of FCX Class A common stock). Beginning August 1, 1995, FCX may redeem these depositary shares for cash at $26.225 per share (declining ratably to $25 per share in March 2002) plus accrued and unpaid dividends. A portion of the proceeds were used to purchase the 49 percent interest in the publicly traded Indonesian entity which owned a 10 percent interest in PT-FI and $145.7 million, net of $4.3 million of expenses, was loaned to PT-FI in January 1993, in exchange for an 8.235% Convertible Subordinated Debenture due August 1, 2007. In July 1993, FCX sold publicly 14.0 million depositary shares representing 700,000 shares of its Step-Up Convertible Preferred Stock (Step-Up Preferred Stock). Each depositary share has a cumulative annual cash dividend of $1.25 through August 1, 1996 and thereafter $1.75 (payable quarterly) and a $25 liquidation preference, and is convertible at the option of the holder into approximately 0.826 shares of FCX Class A common stock (equivalent to a conversion price of $30.28 per share of FCX Class A common stock). From August 1, 1996 and prior to August 1, 1999, FCX may redeem these depositary shares for approximately 0.826 shares of FCX Class A common stock per depositary share if the market price of FCX Class A common stock exceeds certain specified levels. Thereafter, FCX may redeem these depositary shares at $25 per share (payable in FCX Class A common stock, cash or a combination of both, at FCX's option) plus accrued and unpaid dividends. The net proceeds from this offering ($341.3 million) were loaned to PT-FI in the form of a Step-Up Perpetual Convertible Subordinated Debenture bearing interest at the rate of 5.88 percent per annum through August 1, 1996 and 8.235 percent thereafter on the unpaid principal amount. 6. INCOME TAXES FCX records income taxes pursuant to Statement of Financial Accounting Standards No. 109. Substantially all temporary differences relate to property, plant and equipment. FCX has provided a valuation allowance for all tax credit carryforwards ($29.5 million) as these would only be utilized should FCX be required to pay regular U.S. tax, which FCX views as unlikely because Indonesian taxes exceed U.S. taxes. In addition, RTM, which is subject to a separate tax jurisdiction (Spain), has net operating loss carryforwards totaling approximately $108 million ($91 million pre-acquisition) which expire from 1994 to 1998. FCX has provided a valuation allowance for the full amount of these carryforwards as RTM has not generated taxable income in recent years. The provision for income taxes consists of the following: Years Ended December 31, ____________________________ 1993 1992 1991 ____ ____ ____ (In Thousands) Current income taxes: Indonesian...................................$54,994 $ 45,996 $20,198 United States..................................3,933 5,376 3,178 State............................................150 200 150 ______ ______ ______ 59,077 51,572 23,526 ______ ______ ______ Deferred income taxes: Indonesian.....................................4,600 52,771 43,240 Adjustment for change in rates under New COW... - - (26,465) United States.................................. - (617) 277 ______ ______ ______ 4,600 52,154 17,052 ______ ______ ______ Provision for income taxes......................$63,677 $103,726 $40,578 ====== ======== ====== Reconciliations of the differences between income taxes computed at the contractual Indonesian tax rate and income taxes recorded are as follows:
Years Ended December 31, ______________________________________________________________________ 1993 1992 1991 ___________________ ____________________ _____________________ Percent Percent Percent of Income of Income of Income Before Before Before Income Income Income Amount Taxes Amount Taxes Amount Taxes ______ ______ ______ ______ ______ ______ (Dollar Amounts In Thousands) Income taxes computed at contractual Indonesian rate...$42,656 35% $ 92,643 35% $62,342 42% Indonesian tax withheld on: Dividend payments..............19,765 16 11,732 4 - - Interest payments...............4,170 3 - - - - Increase (decrease) attributable to: Adjustment for change in rates under New COW................. - - - - (26,465) (18) Intercompany interest expense.(18,645) (15) - - - - RTM net loss....................5,500 5 - - - - United States tax...............4,083 3 5,302 2 3,370 2 Other, net......................6,148 5 (5,951) (2) 1,331 1 _______ __ ________ __ _______ __ Provision for income taxes......$63,677 52% $103,726 39% $40,578 27% ====== == ======== == ======= ==
7. LONG-TERM DEBT December 31, _______________ 1993 1992 ____ ____ (In Thousands) PT-FI revolver, average rate 4.4% in 1993 and 5.1% in 1992..$ 13,000 $550,000 Zero coupon exchangeable notes...............................102,039 173,583 ALatieF joint venture bank loan (Note 10).....................60,000 - Note payable to FTX, average rate 4.2%........................12,270 - RTM gold and silver denominated loans, average rate 1.3%......39,284 - RTM bank loan..................................................2,374 - RTM short-term borrowings, average rate 11%...................31,692 - ________ _______ 260,659 723,583 Less current portion and short-term borrowings................48,791 78,571 ________ _______ $211,868 $645,012 ======== ======== PT-FI amended its $550.0 million credit agreement in June 1993. The amended credit agreement (the Credit Agreement), guaranteed by FCX and FTX, is structured as a three year revolving line of credit followed by a 3 1/2 year reducing revolver. The Credit Agreement is part of an $800.0 million committed credit facility available to FTX and its subsidiaries including PT-FI, and is subject to a borrowing base, redetermined annually by the banks, which establishes maximum consolidated debt for FTX and its subsidiaries, including PT-FI. PT-FI's limit under the facility is $550.0 million subject to the borrowing base discussed above. Interest is variable and commitment fees are payable at 0.38 percent per annum on the average daily unused commitment. The Credit Agreement provides for working capital requirements, specified coverage of fixed charges, and restrictions on other borrowings. PT-FI assigned its existing and future sales contracts and pledged its rights under the New COW and its accounts receivables and other assets as security for its borrowings under the Credit Agreement. As of December 31, 1993, $547.5 million was available under the current borrowing base and $412.0 million of borrowings were unused under the credit facility. To the extent FTX and its other subsidiaries incur additional debt, the amount available to PT-FI under the Credit Agreement may be reduced. In July 1991, FCX sold $1.035 billion face amount of subordinated Zero Coupon Exchangeable Notes (the Notes). The net proceeds were loaned to PT-FI under similar terms. The remaining Notes outstanding were redeemed in January 1994. Notes with a face amount of $386.0 million, $322.6 million, and $326.4 million were presented for exchange in 1994, 1993, and 1992, respectively, for which FCX issued 5.8 million, 4.8 million, and 4.5 million shares of Class A common stock, and the Company paid $.3 million in 1994 and $7.9 million in 1992. As a result of the issuance by FCX of its Class A common stock, PT-FI issued 14,490 shares of its stock to FCX. Had the Company called the Notes for redemption on January 1, 1993, net income would have been $.10 per common share for 1993. In 1993, FCX borrowed funds from FTX for the acquisition of RTM and $12.3 million was outstanding at December 31, 1993. Interest accrues at a rate equal to the effective rate under the Credit Agreement and was $.2 million in 1993. RTM's gold and silver loans are payable with 107,800 ounces of gold (9,200 ounces payable quarterly) and 953,100 ounces of silver (105,900 ounces payable quarterly), and are carried at the market price of gold ($331.70 per ounce) and silver ($3.70 per ounce) at the date of FCX's acquisition. The loans are accounted for as a hedge. Interest is calculated on the outstanding ounces at the current prices on the date of payment. Based on the December 31, 1993 LME quotes for gold and silver, the market value of this debt was approximately $47 million. RTM also has several short-term credit facilities with banks. The stated rates of interest on these loans range from 3.7 percent to 13 percent. RTM has pledged certain of its assets as security for these loans. The minimum principal payments for debt scheduled for each of the five succeeding years based on the amounts outstanding at December 31, 1993, assuming the terms of the Credit Agreement are not extended and the note to FTX is repaid by borrowing from the Credit Agreement, are $48.8 million in 1994, $18.8 million in 1995, $15.0 million in 1996, $13.5 million in 1997, and $55.2 million in 1998. The Company has an interest rate exchange agreement resulting in a fixed rate of 8.3 percent on $85.7 million of financing at December 31, 1993, reducing $14.3 million annually through December 1999. Based on market conditions at December 31, 1993, unwinding this interest swap would cost an estimated $8.3 million. Capitalized interest totaled $24.5 million in 1993, $24 million in 1992, and $18.3 million in 1991. 8. MAJOR CUSTOMERS Historically, most of PT-FI's sales have been made under long-term contracts. The following table details the percentage of total product sold by PT-FI to its customers: Years Ended December 31, _________________________ 1993 1992 1991 ____ ____ ____ Long-term contracts Japanese companies.................................44% 34% 36% Swiss firm.........................................13 13 17 German firm.........................................7 7 11 Other..............................................35 12 12 Spot sales............................................1 34 24 The contract with a group of Japanese companies extends through December 31, 2000, whereas the contracts with the Swiss and German firms extend through December 31, 1995 and 1994, respectively. Certain terms of these long-term contracts are negotiated annually. There are several other long-term agreements in place, each accounting for less than 10 percent of 1993 sales. During 1993, PT-FI supplied RTM with approximately 90,000 metric tons of copper concentrate and is expected to supply approximately 150,000 metric tons in 1994, providing for approximately 20 percent and 33 percent, respectively, of RTM's requirements in those years. Beginning in 1996, PT-FI is expected to provide RTM with approximately one-half of its copper concentrate requirements. RTM's customers are located primarily in Spain and European Union countries, none of which accounted for over 10 percent of the Company's total revenues. 9. TRANSACTIONS WITH FTX AND EMPLOYEE BENEFITS Management Services Agreement. FTX furnishes general executive, administrative, financial, accounting, legal, and certain other services to the Company under a management services agreement terminable by either party on December 31 in any year, upon six months written notice. These costs, which include related overhead, are non-interest bearing, reimbursed monthly and totaled $49.0 million in 1993 (excluding $10.7 million of restructuring costs), $44.9 million in 1992, and $33.4 million in 1991. Pension Plans. Substantially all the employees seconded to the Company from FTX are covered by FTX's defined benefit plan for salaried employees. The accumulated benefits and plan assets are not determined separately from FTX and amounts allocated to FCX under this plan have not been material. As of December 31, 1993, FTX's accumulated benefit obligation under the plan was fully funded. PT-FI has a defined benefit plan covering substantially all of its Indonesian national employees which is funded through cash payments to retirees at the date of retirement. Benefits are based on years of service and level of compensation. It is anticipated that in order to comply with new Indonesian pension laws, certain amendments to the plan will be made in 1994 which will affect future benefits provided and funding requirements. These amendments are not expected to have a material effect on the financial statements. The actuarial present value of the accumulated benefit obligation, determined by the projected credit method, was fully accrued at December 31, 1993, and amounted to $6.0 million. The projected benefit obligation at December 31, 1993, was $11.9 million assuming a discount rate of 11 percent and an annual increase in future compensation levels of 9 percent. The pension expense for each of the three years in the period ended December 31, 1993, was not material. RTM has a contractual obligation to supplement the amounts paid to retired employees. Based on an assumed discount rate of 8 percent, the liability accrued for such payments totaled $79.4 million at December 31, 1993 ($76.6 million for retirees and $2.8 million for current employees). Since the initial acquisition, RTM has recorded expense of $5.2 million compared with cash payments of $8.0 million. This obligation is unfunded. Other Postretirement Benefits. FTX provides certain health care and life insurance benefits for retired employees, including employees seconded to FCX. Effective January 1, 1991, FCX adopted Statement of Financial Accounting Standards No. 106 (FAS 106) requiring current accrual for postretirement benefits other than pensions, recording an $11.4 million charge as the cumulative effect of the accounting change. The FAS 106 expense totaled $1.1 million in 1993 ($.2 million for service cost and $.9 million in interest for prior period services), $1.3 million in 1992 ($.3 million for service cost and $1.0 million in interest for prior period services), and $1.3 million in 1991 ($.4 million for service cost and $.9 million in interest for prior period services). Summary information of the plan is as follows: December 31, ______________ 1993 1992 ____ ____ (In Thousands) Actuarial present value of accumulated postretirement obligation: Retirees................................................. $ 9,953 $ 8,604 Fully eligible active plan participants.................. 1,312 2,077 Other active plan participants........................... 1,747 1,981 _______ _______ Total accumulated postretirement obligation................ 13,012 12,662 Unrecognized net loss...................................... (668) (575) _______ _______ Accrued postretirement benefit cost........................ $12,344 $12,087 ======= ======= In determining the FAS 106 amounts, FTX used an initial health care cost trend rate of 11.5 percent for 1993 (12 percent for 1992), decreasing 1/2 percent per year until reaching 6 percent. A 1 percent increase in the trend rate would increase the FAS 106 amounts by approximately 10 percent. The discount rate used was 7 percent in 1993 and 8.5 percent in 1992. FCX anticipates funding these costs, in addition to the annual cash costs, over the expected life of its mineral reserves. FTX has the right to modify or terminate these benefits. 10. COMMITMENTS AND CONTINGENCIES Environmental. PT-FI believes it is in compliance with all applicable Indonesian environmental laws, rules, and regulations. Based on current Indonesian environmental regulations, eventual mine closure and reclamation costs, at the mine in Irian Jaya, is not expected to be material. RTM's capital expenditures for 1994 are expected to include approximately $18 million to modify its sulphuric acid plants, including expanding their capacity, to comply with certain environmental standards in Spain. Additionally, at December 31, 1993 the Company had an accrual of $10.3 million related to RTM's impending mine closure and the eventual closure of its smelter. Long-Term Contracts and Operating Leases. At December 31, 1993, RTM had purchase commitments totaling $25.6 million related to the expansion of its smelter. In addition, it had commitments to purchase concentrate from third parties (excluding PT-FI) of 305,000 metric tons in 1994, 295,000 metric tons in 1995, 260,000 metric tons in 1996, 140,000 metric tons in 1997, and a total of 580,000 metric tons from 1998-2002, at then market prices. FCX's minimum annual contractual charges under noncancellable long-term contracts and operating leases which expire during the period 1994 to 2000, totals $35.4 million, with $11.8 million in 1994, $8.3 million in 1995, $6.1 million in 1996, $4.2 million in 1997, and $3.8 million in 1998. Total rental expense under long-term contracts and operating leases amounted to $15.4 million, $3.9 million, and $3.3 million in 1993, 1992, and 1991, respectively. Infrastructure Assets Sales. During 1993, the Company entered into a joint venture agreement with P.T. ALatieF Nusakarya Corporation (ALatieF), an Indonesian investor, which provides for the sale of certain portions of the to-be-constructed infrastructure assets and certain existing assets by PT-FI to a joint venture or ventures (the ALatieF Joint Venture) owned one-third by PT-FI and two-thirds by ALatieF for total consideration of $270.0 million. The acquired assets will be made available to PT-FI and its employees and designees under arrangements which will provide the ALatieF Joint Venture with a guaranteed minimum rate of return on its investment. Funding of the ALatieF Joint Venture is expected to be provided by $90.0 million in equity contributions from the ALatieF Joint Venture partners and $180.0 million in debt financing, which is expected to be guaranteed by PT-FI, FCX or both. The sale of the first group of assets to the ALatieF Joint Venture was completed in December 1993 for a price of $90.0 million. The sale was partially financed with a $60.0 million medium term loan facility which is guaranteed by PT-FI (Note 7). The variable rate loan has a 5 percent per year amortization with a balloon payment after five years. The ALatieF Joint Venture is consolidated and no gain or loss was recorded on the sale. The sales which are anticipated for 1994 and later are subject to the execution of definitive agreements and certain Government approvals. In December 1993, PT-FI announced the execution of a Letter of Intent with Duke Energy Corp. (Duke Energy), a wholly owned affiliate of Duke Power Company, and PowerLink Corporation (PowerLink), a subsidiary of Northstar Energy Corporation, pursuant to which PT-FI would sell its existing and to-be-constructed power generation and transmission assets and certain other power-related assets to a joint venture (the Power Joint Venture) whose ownership consists of Duke Energy (30 percent), PowerLink (30 percent), PT-FI (30 percent), and an Indonesian investor (10 percent). The total value of the transaction is estimated at $200 million and is expected to be concluded in two phases. The first sale, representing the existing assets, is expected to exceed $100 million and to occur in mid-1994. The final sale, representing the to-be-constructed expansion-related assets, is expected to occur during the first half of 1995. Under the agreement, the Power Joint Venture will own these assets and be responsible for providing the electrical power services required by PT-FI at its mining, milling, and support operations in Irian Jaya, Indonesia, including the power services required for the expansion of ore throughput to 115,000 metric tons of ore milled per day. The transaction is subject to the execution of definitive agreements between PT-FI and the Power Joint Venture, financing, and certain Government approvals. PT-FI is proceeding with plans to sell other non-operating assets under terms whereby the purchaser will operate the assets and provide services to PT-FI and its employees and designees. 11. MINERAL RESERVES (Unaudited) The Company's estimated proved and probable mineral reserves were as follows:
Average Ore Grade Per Ton Recoverable Content* _________________________________________________________ ______________________________ Year-End Ore Copper Gold Silver Copper Gold Silver ________ ___ ______ ____ ______ ______ ____ ______ (Metric Tons) (%) (Grams) (Ounce) (Grams) (Ounce) (Billions (Millions (Millions of Lbs.) of Ozs.) of Ozs.) PT-FI 1989 256,400,000 1.64 1.24 .040 5.23 .168 8.3 8.1 27.2 1990 445,741,000 1.59 1.71 .055 4.60 .148 13.9 19.5 34.7 1991 768,045,000 1.45 1.66 .053 3.86 .124 21.8 32.4 50.0 1992 733,173,000 1.47 1.72 .055 3.87 .124 20.9 32.1 44.7 1993 1,074,100,000 1.31 1.47 .047 4.04 .130 26.8 39.1 76.7 RTM 1993 12,700,000 - 1.03 .033 50.45 1.622 - 0.4 8.5 * Recoverable production and reserves are used synonymously with payable production and reserves.
12. SUMMARIZED QUARTERLY FINANCIAL INFORMATION (Unaudited) Net Income (Loss) Operating Applicable to Net Income (Loss) Revenues Income (Loss) Common Stock Per Share ________ _____________ _____________ ________________ (In Thousands, Except Per Share Amounts) 1993 ____ 1st Quarter a,b,c... $133,515 $ 25,454 $(5,160) $(.03) 2nd Quarter a,c..... 215,033 (18,463) (21,524) (.11) 3rd Quarter a....... 261,504 59,462 19,188 .10 4th Quarter......... 315,880 88,483 29,358 .15 ________ ________ ________ $925,932 $154,936 $21,862 .11 ======== ======== ======== 1992 ____ 1st Quarter......... $106,749 $ 35,212 $ 17,312 $.10 2nd Quarter......... 241,684 109,261 49,716 .27 3rd Quarter......... 157,114 58,658 23,379 .12 4th Quarter......... 208,768 73,298 32,461 .17 ________ ________ ________ $714,315 $276,429 $122,868 .66 ======== ======== ======== a. The quarterly results have been restated to reflect the cumulative effect of the changes in accounting principle (Note 1) and the RTM investment on a fully consolidated basis. FCX previously reported this investment using the equity method of accounting because FCX anticipated reducing its interest below 50 percent within one year of the initial investment in RTM. FCX is now considering alternative forms of financing. b. Includes a $9.9 million charge ($.05 per share), net of taxes and minority interest, for the cumulative effect of the changes in accounting principle (Note 1). c. Includes restructuring charges of $3.4 million ($1.9 million to net income or $.01 per share) and $17.4 million ($9.6 million to net income or $.05 per share) during the first and second quarters, respectively. The second quarter includes nonrecurring charges totaling $16.3 million ($9.0 million to net income or $.05 per share). FREEPORT-McMoRan COPPER & GOLD INC. SELECTED FINANCIAL AND OPERATING DATA Years Ended December 31, -------------------------------------------------------- 1993a 1992 1991 1990 1989 ---------- ---------- ---------- ---------- --------- (Financial data In Thousands, Except Per Share Amounts) FINANCIAL Revenues ......... $ 925,932 $ 714,315 $ 467,522 $ 434,148 $ 367,886 Operating income.. 154,936b 276,429 177,720 204,549 203,234 Net income........ 21,862c 122,868 96,159d 90,179 98,927 Net income per common share..... .11c .66 .53d .52 .58 Dividends paid per common share..... .60 .60 .55 .69 .56 Average common shares outstanding 197,929 187,343 182,130 173,432 170,760 At December 31: Property, plant.. and equipment, net............. 1,646,603 993,412 601,675 502,171 264,688 Total assets..... 2,116,653 1,694,005 1,157,615 676,727 415,072 Long-term debt, including current portion and short-term borrowings..... 260,659 723,583 631,961 294,000 130,000 Minority interest 46,781 21,449 14,237 8,899 19,632 Gold denominated preferred stock. 232,620 - - - - Stockholders' equity.......... 947,927 646,457 172,545 176,557 113,759 Common share price........... 25.00 21.88 16.44 8.00 5.38 ---------- ---------- ---------- ---------- --------- PT-FI OPERATING Ore milled Metric tons...... 22,743,000 21,070,000 13,956,000 11,569,000 9,009,000 Metric tons per day......... 62,300 57,600 38,200 31,700 24,700 Copper grade (%)... 1.57 1.59 1.77 1.61 1.84 Gold grade Grams per metric ton...... 1.46 1.35 1.23 .98 .60 Ounce per metric ton............. .047 .043 .040 .032 .019 Silver grade Grams per metric ton............ 4.02 4.79 5.90 6.96 10.30 Ounce per metric ton............ .129 .154 .190 .224 .331 Recovery rate (%) Copper........... 87.0 88.2 89.9 90.1 91.0 Gold ............ 76.2 73.7 79.6 79.8 84.0 Silver 67.2 65.5 75.4 73.4 73.0 Copper (thousands of recoverable pounds)e Production....... 658,400 619,100 466,700 361,800 317,400 Sales............ 645,700 651,800 439,700 348,000 317,800 Average realization per pound........ $.90 $1.03 $1.01 $1.20 $1.24 Gold (recoverable ounces) Production........ 786,700 641,000 420,800 284,000 139,000 Sales............. 762,900 679,300 397,900 273,000 140,000 Average realization per ounce........ $361.74 $340.11 $358.76 $378.30 $383.28 Silver (recoverable ounces) Production........ 1,541,200 1,642,500 1,567,900 1,749,000 1,971,000 Sales............. 1,480,900 1,804,400 1,620,900 1,664,000 1,979,000 Average realization per ounce........ $4.15 $3.72 $3.87 $4.61 $5.39 RTM OPERATING (since acquisition) Smelter operations (metric tons): Concentrate treated.......... 330,200 Anode production.. 135,800 Cathode production 103,100 Gold operations: Ore milled (metric tons per day).... 17,900 Grade Grams per metric ton............ 1.05 Ounce per metric ton............ .034 Production (recoverable ounces)......... 132,500 Average realization per ounce....... $369.06 a. Includes the operating results of Rio Tinto Minera, S.A. since acquisition in March 1993. b. Includes charges totaling $37.1 million ($14.7 million noncash) related to restructuring the administrative organization at Freeport-McMoRan Inc., the parent company of FCX, and adjustments to general and administrative expenses and site production and delivery costs as discussed further in Management's Discussion and Analysis. c. Includes the items discussed in Note B ($20.5 million after taxes and minority interest; $.10 per share) and a noncash charge of $9.9 million ($.05 per share) related to the changes in accounting principle as discussed in Note 1 to the financial statements. d. Reflects a noncash charge of $5.8 million ($.03 per share) for the cumulative effect of the change in accounting for postretirement benefits other than pensions and a $26.5 million ($.15 per share) reduction in the tax provision due to the signing of a new contract of work in December 1991. e. Recoverable production and reserves are used synonymously with payable production and reserves. FREEPORT-McMoRan COPPER & GOLD INC. REPORT OF MANAGEMENT Freeport-McMoRan Copper & Gold Inc. (the Company) is responsible for the preparation of the financial statements and all other information contained in this Annual Report. The financial statements have been prepared in conformity with generally accepted accounting principles and include amounts that are based on management's informed judgments and estimates. The Company maintains a system of internal accounting controls designed to provide reasonable assurance at reasonable costs that assets are safeguarded against loss or unauthorized use, and that transactions are executed in accordance with management's authorization and recorded and summarized properly. The system is tested and evaluated on a regular basis by the Company's internal auditors. In accordance with generally accepted auditing standards, the Company's independent public accountants have developed an overall understanding of our accounting and financial controls and have conducted other tests as they consider necessary to support their opinion on the financial statements. The Board of Directors, through its Audit Committee composed solely of non-employee directors, is responsible for overseeing the integrity and reliability of the Company's accounting and financial reporting practices and the effectiveness of its system of internal controls. The independent public accountants and internal auditors meet regularly with, and have access to, this committee, with and without management present, to discuss the results of their audit work. George A. Mealey Stephen M. Jones President and Vice President and Chief Executive Officer Chief Financial Officer REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF FREEPORT-McMoRan COPPER & GOLD INC.: We have audited the accompanying balance sheets of Freeport- McMoRan Copper & Gold Inc. (the Company), a Delaware Corporation, as of December 31, 1993 and 1992, and the related statements of income, cash flow and stockholders' equity for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 1993 and 1992 and the results of its operations and its cash flow for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles. As discussed in Notes 9 and 1 to the financial statements, effective January 1, 1991, the Company changed its method of accounting for postretirement benefits other than pensions and effective January 1, 1993, changed its method of accounting for periodic scheduled maintenance costs, deferred charges, and costs of management information systems. New Orleans, Louisiana, /s/ Arthur Andersen & Co. January 25, 1994 FCX CLASS A COMMON SHARES Our Class A common shares trade on the New York Stock Exchange (NYSE) and on the Australian Stock Exchange under the symbol "FCX". The FCX share price is reported daily in the financial press under "FMCG" in most listings of NYSE securities. At year-end 1993 the number of holders of record of our Class A common shares was 2,619. U.S. composite tape Class A common share price ranges during 1993 and 1992: 1993 1992 HIGH LOW HIGH LOW FIRST QUARTER $26.13 $19.63 $22.38 $16.38 SECOND QUARTER 27.38 22.38 22.94 21.13 THIRD QUARTER 26.25 17.63 23.50 19.75 FOURTH QUARTER 25.88 17.50 22.00 19.00 CLASS A COMMON SHARE DIVIDENDS FCX has a policy of distributing to its shareholders all dividends the company receives as the majority shareholder in PT-FI, less tax obligations, certain administrative costs, investment opportunities, and debt repayment. PT-FI also has a policy of maximizing its dividend payments after considering its operational, developmental, and exploratory needs as well as debt repayment. Cash dividends declared and paid for the quarterly periods of 1993 and 1992 were: 1993 AMOUNT RECORD PAYMENT PER SHARE DATE DATE FIRST QUARTER $.15 APR. 15, 1993 MAY 1, 1993 SECOND QUARTER .15 JUL. 15, 1993 AUG. 1, 1993 THIRD QUARTER .15 OCT. 15, 1993 NOV. 1, 1993 FOURTH QUARTER .15 JAN. 14, 1994 FEB. 1, 1994 1992 AMOUNT RECORD PAYMENT PER SHARE DATE DATE FIRST QUARTER $.15 APR. 15, 1992 MAY 1, 1992 SECOND QUARTER .15 JUL. 15, 1992 AUG. 1, 1992 THIRD QUARTER .15 OCT. 15, 1992 NOV. 1, 1992 FOURTH QUARTER .15 JAN. 15, 1993 FEB. 1, 1993 EX-18.1 14 Exhibit 18.1 March 25, 1994 Freeport-McMoRan Copper & Gold Inc. 1615 Poydras Street New Orleans, LA 70112 RE: Form 10-K Report for the year ended December 31, 1993 ----------------------------------------------------- This letter is written to meet the requirements of Regulation S-K calling for a letter from a registrant's independent accountants whenever there has been a change in accounting principle or practice. We have been informed that, as of January 1, 1993, Freeport-McMoRan Copper & Gold Inc. (FCX) changed its methods of accounting for the following items: 1. Turnarounds - the accounting for maintenance turnarounds was changed from the deferral method to the direct expense method. Previously, FCX deferred costs related to periodic scheduled maintenance (turnarounds) when incurred and amortized them on a straight-line basis, generally over six months to two years until the next scheduled turnaround. According to the management of FCX, this change was made to conform FCX's policy with that which is followed by its parent, Freeport- McMoRan Inc. (FTX). According to the management of FTX, which also changed its policy for accounting for turnarounds, this change was made to conform FTX's policy with that which is followed by IMC-Agrico Company, a joint venture to which substantially all of FTX's phosphate fertilizer production assets were contributed on July 1, 1993. 2. Deferred Charges - the accounting for deferred charges was changed to provide for deferral of only those costs that directly relate to the acquisition, construction and development of assets and to the issuance of debt and related instruments. Previously, certain other costs which benefitted future periods were deferred and amortized over the period benefitted. According to FTX management, they believe this change provides a better measure of operating results. In addition, the administrative costs of accounting for assets will be reduced by not deferring any relatively insignificant expenditures that do not have a material effect on measuring periodic net income. 3. Management Information Systems (MIS) Costs - Costs of MIS equipment and software that have a material impact on periodic measurement of net income are capitalized and amortized over their estimated productive lives. Other MIS costs, including equipment and purchased software that involve relatively immaterial amounts (currently individual expenditures of less than $500,000) and short estimated productive lives (currently less than three years) are charged to expense when incurred. Previously, most expenditures for MIS equipment and purchased software were capitalized. The accounting for MIS costs was changed to recognize the rapid rate of change in MIS, which results in short productive lives of equipment and software and a need for continuing investments. Generally within a two-to-three year period, if such hardware has not been replaced, significant upgrades will have been required. Within two years, maintenance costs on existing equipment often equals or exceeds replacement cost. Software is subject to constant modification to meet the needs of the changing hardware environment, as well as the changing business environment. Reasonable business judgement is required in determining appropriate application of accounting principles, including judgement regarding the cost and the materiality of the impact of accounting precision. A complete coordinated set of financial and reporting standards for determining the preferability of accounting principles among acceptable alternative principles has not been established by the accounting profession for the items referred to above. Thus, we cannot make an objective determination of whether the changes in accounting described in the preceding paragraph are to preferable methods. However, we have reviewed the pertinent factors, including those related to financial reporting, in these particular cases on a subjective basis, and our opinion stated below is based on our determination made in this manner. We are of the opinion that FCX's changes in methods of accounting are to acceptable alternative methods of accounting, which, based upon the reasons stated above for the respective changes (including the costs and benefits of alternative principles and the related materiality of the application thereof) and our discussions with you, are also preferable under the circumstances in these particular cases. In arriving at this opinion, we have relied on the business judgement and business planning of your management. Very truly yours, /s/ Arthur Andersen & Co. ------------------------ Arthur Andersen & Co. EX-21.1 15 Exhibit 21.1 List of Subsidiaries of FREEPORT-McMoRan COPPER & GOLD INC. Where Name Under Which Entity Organized It Does Business ------ --------- ---------------- P.T. Freeport Indonesia Company Indonesia Same and Delaware EX-23.1 16 Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our reports included herein or incorporated by reference in this Form 10-K, into Freeport-McMoRan Copper & Gold Inc.'s previously filed Registration Statements on Forms S-3 (File No. 33-45787, No. 33-63376, No. 33-66098 and No. 33-52257-01). /s/ Arthur Andersen & Co. New Orleans, Louisiana, March 25, 1994 EX-24.1 17 Exhibit 24.1 FREEPORT-McMoRan COPPER & GOLD INC. Certificate of Secretary I, Michael C. Kilanowski, Jr., Secretary of Freeport-McMoRan Copper & Gold Inc. (the "Corporation"), a Delaware corporation, do hereby certify that the following resolution was duly adopted by the Board of Directors of the Corporation at a meeting held on December 13, 1988, and that such resolution has not been amended, modified or rescinded and is in full force and effect: RESOLVED, That any report, registration statement or other form filed on behalf of this corporation pursuant to the Securities Exchange Act of 1934, or any amendment to any such report, registration statement or other form, may be signed on behalf of any director or officer of this corporation pursuant to a power of attorney executed by such director or officer. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of the Corporation this 29th day of March, 1994. /s/ Michael C. Kilanowski, Jr. ------------------------------ (SEAL) Michael C. Kilanowski, Jr. Secretary EX-24.2 18 Exhibit 24.2 POWER OF ATTORNEY BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS, and GEORGE A. MEALEY, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 1993 and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 29th day of March, 1994. /s/ C. Donald Whitmire C. Donald Whitmire POWER OF ATTORNEY BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS, and GEORGE A. MEALEY, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 1993 and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 29th day of March, 1994. /s/ Stephen M. Jones Stephen M. Jones POWER OF ATTORNEY BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS, and GEORGE A. MEALEY, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 1993 and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 29th day of March, 1994. /s/ Leland O. Erdahl Leland O. Erdahl POWER OF ATTORNEY BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS, and GEORGE A. MEALEY, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 1993 and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 29th day of March, 1994. /s/ Ronald Grossman Ronald Grossman POWER OF ATTORNEY BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS, and GEORGE A. MEALEY, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 1993 and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 29th day of March, 1994. /s/ Wolfgang F. Siegel Wolfgang F. Siegel POWER OF ATTORNEY BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS, and GEORGE A. MEALEY, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 1993 and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 29th day of March, 1994. /s/ Elwin E. Smith Elwin E. Smith POWER OF ATTORNEY BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"), does hereby make, constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS, and GEORGE A. MEALEY, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 1993 and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 29th day of March, 1994. /s/ Eiji Umene Eiji Umene POWER OF ATTORNEY BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"), does hereby make, constitute and appoint JAMES R. MOFFETT and GEORGE A. MEALEY, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 1993 and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 29th day of March, 1994. /s/ Rene L. Latiolais ---------------------- Rene L. Latiolais POWER OF ATTORNEY BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"), does hereby make, constitute and appoint JAMES R. MOFFETT and RENE L. LATIOLAIS, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the others and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 1993 and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney. EXECUTED this 29th day of March, 1994. /s/ George A. Mealey -------------------- George A. Mealey -----END PRIVACY-ENHANCED MESSAGE-----