SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1995
Commission File Number: 1-8124
Freeport-McMoRan Inc.
Incorporated in Delaware 13-3051048
(IRS Employer Identification No.)
1615 Poydras Street, New Orleans, Louisiana 70112
Registrant's telephone number, including area code:(504) 582-4000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X No
-- --
On October 20, 1995, there were issued and outstanding 28,066,098 shares of
the registrant's Common Stock, par value $0.01 per share.
FREEPORT-McMoRan INC.
TABLE OF CONTENTS
Page
Part I. Financial Information
Condensed Balance Sheets 3
Statements of Income 4
Statements of Cash Flow 6
Notes to Financial Statements 8
Remarks 10
Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Part II. Other Information 17
Signature 18
Exhibit Index E-1
FREEPORT-McMoRan INC.
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements.
---------------------
FREEPORT-McMoRan INC.
CONDENSED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1995 1994
------------- ------------
ASSETS (In Thousands)
Current assets:
Cash and short-term investments $ 28,746 $ 13,810
Accounts receivable 76,380 89,925
Inventories 106,699 109,677
Prepaid expenses and other 6,853 7,433
---------- ----------
Total current assets 218,678 220,845
Property, plant and equipment, net 974,344 964,539
Net assets of discontinued operations - 328,880
Other assets 62,768 135,178
---------- ----------
Total assets $1,255,790 $1,649,442
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 205,296 $ 191,553
Long-term debt, less current portion 300,915 1,122,070
Accrued postretirement benefits and
pension costs 165,659 158,707
Reclamation and mine shutdown reserves 133,377 112,777
Other liabilities and deferred credits 116,138 77,034
Minority interests 197,018 217,768
Stockholders' equity (deficit) 137,387 (230,467)
---------- ----------
Total liabilities and stockholders' equity $1,255,790 $1,649,442
========== ==========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan INC.
STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ---------------------
1995 1994 1995 1994
-------- -------- -------- --------
(In Thousands, Except Per Share Amounts)
Revenues $243,066 $189,803 $730,943 $560,190
Cost of sales:
Production and delivery 171,232 141,356 509,658 414,302
Depreciation and
amortization 11,230 9,543 32,642 37,389
-------- -------- -------- --------
Total cost of sales 182,462 150,899 542,300 451,691
Exploration expenses - - - 5,904
General and administrative
expenses 28,973 13,650 59,954 45,010
-------- -------- -------- --------
Total costs and expenses 211,435 164,549 602,254 502,605
-------- -------- -------- --------
Operating income 31,631 25,254 128,689 57,585
Interest expense, net (9,614) (17,347) (40,844) (54,373)
Other income (expense), net 926 140 1,577 (1,113)
-------- -------- -------- --------
Income before income taxes
and minority interests 22,943 8,047 89,422 2,099
(Provision) benefit for
income taxes (872) 4,482 (7,429) 11,893
Minority interests in net
income of consolidated
subsidiaries (21,440) (22,299) (71,851) (38,799)
-------- -------- -------- --------
Income (loss) from continuing
operations before
extraordinary item 631 (9,770) 10,142 (24,807)
Discontinued operations 24,967 21,222 340,424 73,529
-------- -------- -------- --------
Income before extraordinary
item 25,598 11,452 350,566 48,722
Extraordinary loss - - - (9,108)
-------- -------- -------- --------
Net income 25,598 11,452 350,566 39,614
Preferred dividends (1,095) (5,408) (41,187) (16,563)
-------- -------- -------- --------
Net income applicable to
common stock $ 24,503 $ 6,044 $309,379 $ 23,051
======== ======== ======== ========
Net income (loss) per primary share:
Continuing operations $.02 $(.42) $ .40 $(1.07)
Discontinued operations .88 .92 13.44 3.16
Extraordinary loss - - - (.39)
Preferred dividends (.04) (.24) (1.62) (.71)
---- ----- ------ ------
$.86 $ .26 $12.22 $ .99
==== ===== ====== ======
Net income (loss) per fully diluted share:
Continuing operations $.02 $(.42) $ .88 $(1.07)
Discontinued operations .88 .92 11.53 3.16
Extraordinary loss - - - (.39)
Preferred dividends (.04) (.24) (1.13) (.71)
---- ----- ------ ------
$.86 $ .26 $11.28 $ .99
==== ===== ====== ======
Average common and common equivalent
shares outstanding:
Primary 28,460 23,034 25,322 23,256
====== ====== ====== ======
Fully diluted 28,567 23,034 29,513 23,256
====== ====== ====== ======
Dividends per common share:
Cash $.09 $ - $ .09 $1.88
Property - 1.58 1.56 6.11
---- ----- ----- -----
$.09 $1.58 $1.65 $7.99
==== ===== ===== =====
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan INC.
STATEMENTS OF CASH FLOW (Unaudited)
Nine Months Ended
September 30,
-------------------
1995 1994
-------- --------
Cash flow from operating activities: (In Thousands)
Net income $350,566 $ 39,614
Adjustments to reconcile net income to net
cash provided by operating activities:
Extraordinary loss - 9,108
Depreciation and amortization 84,475 94,059
Amortization of debt discount and financing costs 15,522 25,300
Deferred income taxes 88,195 63,459
Recognition of unearned income (36,207) -
Minority interests' share of net income 154,844 104,257
Cash distribution from IMC-Agrico in excess of
interest in capital 31,751 33,801
Reclamation and mine shutdown expenditures (9,215) (6,968)
Gain on FCX securities transactions (435,060) (95,723)
Loss on recapitalization of FTX securities 44,371 -
(Increase) decrease in working capital, net of
effect of acquisition:
Accounts receivable 27,467 6,901
Inventories (22,318) (18,623)
Prepaid expenses and other (648) 9,262
Accounts payable and accrued liabilities 14,517 15,858
Other 5,726 (6,350)
-------- --------
Net cash provided by operating activities 313,986 273,955
-------- --------
Cash flow from investing activities:
Capital expenditures:
FCX (308,099) (533,453)
FRP (21,410) (21,775)
Other (1,893) (27,912)
Sales of assets 23,577 110,502
-------- --------
Net cash used in investing activities (307,825) (472,638)
-------- --------
Cash flow from financing activities:
Proceeds from sale of:
FRP 8 3/4% Senior subordinated notes $ - $146,125
FCX Preferred Stock - 252,985
FCX 9 3/4% Senior subordinated notes - 116,276
FCX Class A common shares 497,166 -
Purchase of FTX, FCX and FRP equity shares (130,733) (82,367)
Distributions paid to minority interests (151,277) (171,145)
Distribution of MOXY shares - (35,441)
Proceeds from (repayments of) debt, net (145,908) 145,578
Purchase/redemption of FTX securities:
10 7/8% Senior debentures - (142,919)
ABC debentures (280,826) -
6.55% Senior notes (14,955) -
Net proceeds from infrastructure financing 228,899 17,319
FTX cash dividends paid:
Common stock (2,740) (44,242)
Preferred stock (7,661) (16,641)
Other 3,712 2,164
-------- --------
Net cash provided by (used in) financing activities (4,323) 187,692
-------- --------
Net increase (decrease) in cash and short-term
investments 1,838 (10,991)
Net (increase) decrease attributable to discontinued
operations 13,098 (8,791)
Cash and short-term investments at beginning of year 13,810 25,987
-------- --------
Cash and short-term investments at end of period $ 28,746 $ 6,205
======== ========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan INC.
NOTES TO FINANCIAL STATEMENTS
1. REVERSE STOCK SPLIT
In October 1995, Freeport-McMoRan Inc. (FTX) effected a one-for-six reverse
split of its common stock. Accordingly, all common share and per share
amounts have been restated.
2. DISCONTINUED OPERATIONS
In July 1995, FTX distributed 117,909,323 shares of Freeport-McMoRan Copper
& Gold Inc. (FCX) Class B common stock to FTX common stockholders. As a
result, FTX no longer owns any interest in FCX. In connection with a
recapitalization of its liabilities, FTX sold 21.5 million shares of FCX
Class A common stock in May 1995 to RTZ Corporation PLC (RTZ) for $450
million cash, recognizing a pretax gain of $391.2 million, and another 2.4
million shares in July 1995 to RTZ for $50.2 million cash, recognizing a
pretax gain of $43.8 million in the third quarter. FTX's financial
statements have been restated to reflect the metals segment as a
discontinued operation. Discontinued operations results follow (in
millions):
Third Quarter Nine Months
-------------- ------------------
1995 1994 1995 1994
----- ------ ------ ------
Revenues $ - $313.4 $830.3 $861.0
===== ====== ====== ======
Income from discontinued
operations $ - $58.4 $222.0 $153.7
Minority interest - (24.1) (83.0) (65.5)
Provision for taxes - (28.3) (95.5) (72.4)
----- ----- ------ ------
- 6.0 43.5 15.8
Gain on FCX securities transactions 43.8 25.7 435.1 95.7
Deferred taxes no longer required - - 76.2 -
Recapitalization losses (Note 4) (1.0) - (44.3) -
Provision for taxes (17.8) (10.5) (170.1) (38.0)
----- ----- ------ ------
$25.0 $21.2 $340.4 $ 73.5
===== ===== ====== ======
Income from discontinued operations includes allocated interest from
FTX totaling $4.8 million for the third quarter of 1994 and $16.6 million
and $14.1 million for the nine-month period of 1995 and 1994, respectively.
3. SALE OF FREEPORT COPPER COMPANY STOCK
In September 1995, FCX paid FTX $25 million cash for 100 percent of the
stock of Freeport Copper Company whose sole asset is a 50 percent interest
in a joint venture with ASARCO Santa Cruz, Inc. controlling approximately
7,600 contiguous acres in Arizona. The joint venture is involved in a
research project for an experimental in-situ leaching process that would be
used to mine copper ore.
4. RECAPITALIZATION ACTIVITIES
In April 1995, FTX exchanged 1.9 million FTX common shares for 4 million
shares of its $4.375 Convertible Exchangeable Preferred Stock ($4.375
Preferred Stock) in accordance with an exchange offer whereby FTX
temporarily increased the FTX shares issuable upon conversion. As a result
of the exchange offer, FTX recorded a noncash charge of $33.5 million to
preferred dividends in the second quarter of 1995. As of September 30,
1995, 1 million shares ($50.1 million) of $4.375 Preferred Stock remained
outstanding and are convertible into FTX common stock at a conversion price
of $27.36 per share or the equivalent of 1.8 shares of FTX common stock for
each share of $4.375 Preferred Stock.
In June 1995, FTX redeemed $749.2 million principal amount of its Zero
Coupon Convertible Subordinated Debentures (ABC Debentures) for $280.8
million cash (equal to book value). Additionally in June 1995, FTX
redeemed $16.4 million face amount of 6.55% Convertible Subordinated notes
(6.55% Notes), with a book value of $14.1 million, for $15 million of cash.
Prior to the redemption, FTX increased the number of FTX common shares that
would be received upon conversion of the 6.55% Notes. Holders of $356.6
million face amount of 6.55% Notes converted their notes at the enhanced
rate into 3.3 million FTX common shares, resulting in an increase of $346.4
million to stockholders' equity. FTX recorded a pretax loss on
recapitalization of the ABC Debentures and 6.55% Notes totaling $44.3
million primarily because of enhancements to the conversion rates.
5. NEW CREDIT FACILITY
In July 1995, FTX entered into a new credit facility providing $400 million
of credit, all of which is available to Freeport-McMoRan Resource Partners,
Limited Partnership (FRP) and $75 million of which is available to FTX as
the holding company. The new variable rate facility matures July 2000 and
has covenants and security requirements which are similar to FTX's previous
credit agreement.
As part of the FTX restructuring, FCX assumed an obligation to
guarantee up to $90 million of the indebtedness of FM Properties Inc.
(FMPO)and FTX is paying an annual three percent fee to FCX on the amount
guaranteed. FTX agreed to guarantee an aggregate additional amount of FMPO
debt of up to approximately $60 million. At September 30, 1995, the
indebtedness of FMPO totaled approximately $116 million, of which $26
million was guaranteed by FTX.
6. ACQUISITION
In January 1995, FRP acquired essentially all of the domestic assets of
Pennzoil Co.'s sulphur division. Pennzoil will receive quarterly payments
from FRP over 20 years based on the prevailing price of sulphur. The
installment payments may be terminated earlier by FRP through the exercise
of a $65 million call option or by Pennzoil through a $10 million put
option. Neither option may be exercised prior to 1999. The purchase price
allocation follows (in thousands):
Current assets $ 5,635
Current liabilities (14,065)
Property, plant and equipment 60,159
Accrued long-term liabilities (51,729)
-------
Net cash investment $ -
=======
Accrued long-term liabilities include the estimated future installment
payments based on the prevailing sulphur price upon acquisition and
estimated future reclamation and mine shutdown costs.
7. PARENT COMPANY BALANCE SHEETS
The unaudited, unconsolidated condensed balance sheet of FTX as of
September 30, 1995 follows (in thousands):
Cash and short-term investments $ 4,891
Accounts receivable from FRP 46,000
Other current assets 26,744
Property, plant and equipment, net 49,053
Investment in FRP 209,314
Investment in FCX -
Other assets 6,108
--------
Total assets $342,110
========
Accounts payable and accrued liabilities $100,918
Long-term debt -
Other liabilities and deferred credits 103,805
Stockholders' equity 137,387
--------
Total liabilities and stockholders' equity $342,110
========
-----------------
Remarks
The information furnished herein should be read in conjunction with FTX's
financial statements contained in its 1994 Annual Report to stockholders
and incorporated by reference in its Annual Report on Form 10-K.
The information furnished herein reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results for
the periods. All such adjustments are, in the opinion of management, of a
normal recurring nature.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESTRUCTURE AND RECAPITALIZATION
In October 1995, Freeport-McMoRan Inc. (FTX) effected a one-for-six reverse
split of its common stock. Accordingly, all common and per share amounts
have been restated.
In July 1995, FTX declared a special tax-free dividend of the Class B
common stock of Freeport-McMoRan Copper & Gold Inc. (FCX) to FTX common
stockholders (Note 2). Prior to the distribution, FTX completed certain
recapitalization activities, including the sale of 23.9 million shares of
FCX Class A common stock for $500.2 million (Note 2), the
conversion/redemption of FTX's preferred stock and publicly held debt
securities (Note 4) and the repayment of FTX's parent company bank
borrowings using a portion of the proceeds from the FCX Class A common
stock sale. These activities allowed for the separation of FTX's
copper/gold and agricultural minerals businesses into two independent
financial and operating entities. FTX's ongoing business operations now
essentially consist of its 51.4 percent ownership in Freeport-McMoRan
Resource Partners, Limited Partnership (FRP).
RESULTS OF OPERATIONS
Because FTX no longer owns any interest in FCX, FTX's financial results
were restated to reflect the FCX metals segment as discontinued operations.
Third Quarter Nine Months
------------------ ------------------
1995 1994 1995 1994
------ ------ ------ ------
(In Millions, Except Per Share Amounts)
Revenues $243.1 $189.8 $730.9 $560.2
Operating income 31.6 a 25.3 128.7 a 57.6
Income (loss) from continuing
operations b $ 0.6 a $ (9.8) $ 10.2 a $(24.8)
Discontinued operations (Note 2) 25.0 21.2 340.4 73.5
Extraordinary loss - - - (9.1)
Preferred dividends (Note 4) (1.1) (5.4) (41.2) (16.5)
------ ------ ------ ------
Net income to common stock $ 24.5 $ 6.0 $309.4 $ 23.1
====== ====== ====== ======
a. Includes a $12.3 million noncash general and administrative expense
charge ($3.9 million to net income) under FTX's incentive compensation
program resulting from the rise in its common stock price during the third
quarter.
b. Includes minority interests after-tax charges of $5.2 million and $7.1
million for the third quarter of 1995 and 1994, respectively, and $10.2
million and $7.1 million for the nine-month period of 1995 and 1994,
respectively, because FTX was not paid a proportionate share of FRP
distributions during the period. For the third-quarter and nine-month
periods of 1994, FTX also recognized $4.6 million and $32.6 million,
respectively, of the gain deferred in connection with the public sale of
FRP units in 1992.
FTX benefited from significantly higher operating results from its
agricultural minerals segment during the 1995 periods, reflecting the
strengthening in the phosphate fertilizer markets which began in mid-1993
and has continued throughout 1995. FTX has not incurred any exploration
costs subsequent to the May 1994 formation of McMoRan Oil & Gas Co. (MOXY).
Interest expense was lower in the 1995 quarter because of reductions to
debt levels, which will continue to benefit future periods. Minority
interests share of 1995 net income reflects the higher level of earnings at
FRP and the minority interest charge discussed above.
Agricultural Minerals Operations
- --------------------------------
FTX's agricultural minerals segment, which includes FRP's fertilizer and
phosphate rock operations (conducted through IMC-Agrico)and its sulphur
business, reported third-quarter 1995 operating income of $40.9 million on
revenues of $234.7 million compared with operating income of $33.4 million
on revenues of $182.2 million for the 1994 period. Operating income for
the first nine months of 1995 was $145.1 million on revenues of $703.6
million compared with operating income of $84.8 million on revenues of
$531.2 million for the year-ago period. Significant items impacting
operating income follow (in millions):
Third Nine
Quarter Months
------- ------
Agricultural minerals operating income - 1994 $33.4 $84.8
----- ------
Increases (decreases):
Sales volumes 17.4 70.4
Realizations 31.7 99.8
Other 3.4 2.2
----- ------
Revenue variance 52.5 172.4
Cost of sales (35.0)a (102.7)a
General and administrative and other (10.0)b (9.4)b
----- ------
7.5 60.3
----- ------
Agricultural minerals operating income - 1995 $40.9 $145.1
===== ======
a. Includes a reduction to depreciation and amortization of $6 million and
$7.7 million for the third quarter of 1995 and 1994, respectively, and
$22.1 million and $14.9 million for the nine-month period of 1995 and 1994,
respectively, caused by FRP's disproportionate interest in IMC-Agrico cash
distributions.
b. Includes $8.5 million of the stock option charge discussed earlier.
FRP's third-quarter 1995 phosphate fertilizer sales volumes were
higher than those of the year-ago quarter, with IMC-Agrico experiencing
continued excellent export demand and strengthening domestic sales for
diammonium phosphate (DAP), its principal fertilizer product. These
increased exports coupled with the seasonal rebound in fall domestic
movement caused IMC-Agrico to restart its Taft fertilizer facility in
August 1995. Despite current industrywide capacity utilization approaching
100 percent, domestic phosphate fertilizer producer inventories have
recently declined. This tight supply/demand situation is reflected in the
improved phosphate fertilizer realizations. FRP's average DAP realization
increased 15 percent from the year-ago period (up 3 percent from the
previous quarter). FRP's 1995 DAP realizations include large forward sales
to China at below current market prices, contracted during mid-1995 and
late-1994 at then market terms. Unit production costs benefited from
ongoing cost savings achieved at IMC-Agrico, somewhat offset by higher raw
material costs for ammonia.
Fertilizer prices continue to rise into the fourth quarter and are
expected to remain firm for the near term, as the tight supply/demand
situation benefits producers at a time when no operable idle capacity
exists and several turnarounds are planned, including IMC-Agrico
facilities. Furthermore, strong domestic demand is expected to continue
into the spring of 1996 due to an expectation of a 13 percent increase in
planted corn acreage. Domestic corn and wheat ending stocks are currently
forecast to be at their lowest level in 20 years further strengthening
grain prices and the outlook for next spring's fertilizer use. FRP's
export sales through year-end 1995 will continue to come principally from
the agreement that was reached with China. IMC-Agrico is committed to
maintaining a reasonable balance between supply and demand and will adjust
production levels in response to market conditions.
FRP's third-quarter 1995 phosphate rock sales volumes were essentially
unchanged from the year-ago quarter. Ongoing phosphate rock sales volumes
will be negatively impacted by the expiration of a contract providing
annual sales of 1.5 million tons net to FRP. However, because of the low
margin associated with these sales, the impact to FRP's earnings is not
significant.
FRP's Main Pass and Culberson sulphur mines continued to perform well
during the quarter compared with the 1994 period when FRP had only the Main
Pass mine in operation. The 1995 quarter was hampered by the precautionary
shutting-in of Main Pass production because of a hurricane in the Gulf of
Mexico. FRP's increased production capacity, combined with continued
strong demand from the domestic phosphate fertilizer industry, resulted in
a 33 percent increase in sales volumes. FRP also benefited from the
continued strengthening in Tampa, Florida sulphur prices. To the extent
U.S. phosphate fertilizer production remains strong, improved sulphur
demand is expected to continue, although the availability of Canadian
sulphur limits the potential for significant price increases.
Third Quarter Nine Months
-------------------- -------------------
1995 1994 1995 1994
--------- ---------- --------- ---------
Phosphate fertilizers - primarily DAP
Sales (short tons) a 891,600 840,100 2,551,900 2,368,900
Average realized price b
All phosphate
fertilizers $167.96 $145.93 $165.17 $141.65
DAP 173.50 151.25 170.69 146.65
Phosphate rock
Sales (short tons) a 1,051,500 1,062,500 3,611,700 3,073,100
Average realized price b $21.53 $19.91 $21.94 $21.59
Sulphur
Sales (long tons) c 751,300 562,900 2,284,600 1,586,500
a. Reflects FRP's 45.1 percent and 46.5 percent share of the IMC-Agrico
assets for the years ended June 30, 1995 and 1994, respectively, while FRP
received 55 percent and 58.6 percent of the cash flow generated during such
periods. FRP's share of the IMC-Agrico assets for the year ended June 30,
1996 is 43.6 percent, while it will receive 53.1 percent of the cash flow.
b. Represents average realization f.o.b. plant/mine.
c. Includes internal consumption totaling 187,100 tons and 189,700 tons
for the third quarter of 1995 and 1994, respectively, and 555,700 tons and
564,500 tons for the nine-month period of 1995 and 1994, respectively.
Oil And Gas Operations
- ----------------------
Prior to the May 1994 distribution of MOXY shares, FTX's oil and gas
operations included exploring for new reserves. These activities generated
losses of $0.7 million and $11.7 million for the third-quarter and nine-
month periods of 1994, respectively. FTX's only significant oil and gas
operations subsequent to the MOXY distribution are FRP's production of oil
at Main Pass, as follows:
Third Quarter Nine Months
------------------ ----------------------
1995 1994 1995 1994
------- ------- --------- ---------
Sales (barrels) 524,600 417,900 1,686,400 1,853,000
Average realized price $15.58 $14.94 $15.86 $13.34
Earnings (in millions) $(1.0) $.2 $1.5 $2.2
Main Pass oil operating income was impacted by $1.4 million of the
previously discussed stock option charge. Third-quarter 1995 oil
production reflects the hurricane-related shut in and certain workover
activities. Net production for 1995 is estimated to total approximately
2.3 million barrels.
CAPITAL RESOURCES AND LIQUIDITY
Cash flow from operating activities increased during the first nine months
of 1995 to $314 million, compared with $274 million for the 1994 period,
primarily because of the significant increase in operating income. Cash
flow from operating activities included cash from discontinued operations
totaling $138.6 million and $162.9 million in 1995 and 1994, respectively.
Net cash used in investing activities was $307.8 million compared with
$472.6 million for the 1994 period. The 1995 period reflects lower
expenditures by discontinued operations and the 1994 period includes $110.5
million from the sale of assets. Net cash used in financing activities was
$4.3 million compared with $187.7 million provided by financing activities
in the 1994 period. During the nine-month 1995 period, FTX sold 23.9
million shares of FCX Class A common shares to RTZ for $497.2 million (net
of $3 million of expenses), while sales of FRP and FCX securities totaled
$515.4 million in the nine-month 1994 period. During the 1995 period
purchases of FTX, FCX and FRP equity securities totaled $130.7 million
compared with $82.4 million in the 1994 period under an established program
to acquire equity securities when warranted by market conditions. The 1995
period included net repayments of debt totaling $145.9 million compared
with net borrowings of $145.6 million for the 1994 period. During 1995,
FTX redeemed $280.8 million of its ABC debentures and $15 million of its
6.55% Senior notes while the 1994 period included payments of $142.9
million for the 10 7/8% Senior debentures. During 1995, FCX received
$228.9 million from the sale of certain of its infrastructure assets. After
the first quarter of 1994 and prior to the FCX spinoff, FTX had been
distributing FCX common stock in lieu of paying cash dividends.
On October 17, 1995, IMC-Agrico acquired the animal feed ingredients
business of Mallinckrodt Group Inc. for $110 million cash. Mallinckrodt's
animal feed ingredients business is one of the world's largest producers of
phosphate-based animal feed ingredients with an annual capacity in excess
of 700,000 tons. This business is IMC-Agrico's largest phosphoric acid
customer, consuming nearly 300,000 tons per year or about seven percent of
IMC-Agrico's phosphoric acid capacity. This acquisition provides high
quality diversification and growth for IMC-Agrico and enhances the joint
venture's flexibility in maximizing returns from its core phosphate
production.
Publicly owned FRP units have cumulative rights to receive quarterly
distributions of 60 cents per unit through the distribution for the quarter
ending December 31, 1996 (the Preference Period) before any distributions
may be made to FTX. On October 20, 1995, FRP declared a distribution of 60
cents per publicly held unit ($30.2 million) and 34 cents per FTX-owned
unit ($18.3 million), payable November 15, 1995, bringing the total unpaid
distribution due FTX to $382.4 million. As a result, an additional $6.6
million minority interest charge will be recognized by FTX during the
fourth quarter of 1995. Unpaid distributions due FTX will be recoverable
from one-half of the excess of future quarterly FRP distributions over 60
cents per unit for all units. The October 1995 distributable cash included
$49.2 million from IMC-Agrico. FRP's future distributions will be
dependent on the distributions received from IMC-Agrico and future cash
flow from FRP's sulphur and oil operations. In future periods, FTX's share
of the reported financial results of FRP will depend on the extent to which
FTX receives its proportionate share of FRP distributions. To the extent
that public unitholders receive a disproportionately large share of FRP
distributions, FTX will recognize a smaller share of FRP's reported
earnings than would be represented by its percentage ownership of FRP.
Because of the recapitalization and restructuring activities discussed
above, FTX's parent company obligations have been significantly reduced.
However, FTX will have certain cash requirements relating to its past
business activities including income tax settlements, oil and gas payments
and employee benefit liabilities. It potentially could also have future
cash requirements relating to its guarantee of the debt of FM Properties
Inc. (Note 5). FTX anticipates that its cash distributions from FRP and
amounts available to it under the new credit facility (Note 5) will be
sufficient to meet these obligations. The new credit facility provides
$400 million of credit available to FTX/FRP ($227 million available at
October 20, 1995), and $75 million of which is available to FTX as the
holding company ($75 million available at October 20, 1995). In August
1995, the FTX Board of Directors established a new dividend policy for FTX
common stock and declared a regular quarterly cash dividend of $0.09 per
common share. The new dividend policy will allow FTX to use additional
available funds to purchase FTX stock, purchase FRP units and/or invest in
new growth opportunities.
--------------------------------
The results of operations reported and summarized above are not necessarily
indicative of future operating results.
FREEPORT-McMoRan INC.
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K.
- -----------------------------------------
(a) The list of exhibits appearing on page E-1 hereof and the
exhibits immediately following said page are incorporated herein by
reference.
(b) Reports on Form 8-K.
One report on Form 8-K was filed by the registrant during the quarter
for which this report is filed. The Form 8-K was executed and filed on
July 11, 1995, reported information under Items 2 and 7, and contained the
following financial statements for Freeport-McMoRan Inc.: Unaudited Pro
Forma Statement of Income for the Year Ended December 31, 1994, Unaudited
Pro Forma Statement of Income for the Three Months Ended March 31, 1995,
and Unaudited Pro Forma Condensed Balance Sheet as of March 31, 1995.
FREEPORT-McMoRan INC.
SIGNATURE
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FREEPORT-McMoRan INC.
By: /s/ John T. Eads
---------------------------
John T. Eads
Controller - Financial Reporting
(authorized signatory and
Principal Accounting Officer)
Date: October 25, 1995
FREEPORT-McMoRan INC.
EXHIBIT INDEX
Sequentially
Numbered
Number Description Page
- ------ ----------- ------------
2.1 Distribution Agreement dated as of July 5, 1995,
between Freeport-McMoRan Inc. ("FTX") and
Freeport-McMoRan Copper & Gold Inc. ("FCX")
4.1 Credit Agreement dated as of June 30, 1995, among
FTX, Freeport-McMoRan Resource Partners, Limited
Partnership, certain banks, Chemical Bank
("Chemical"), as Administrative Agent and
Collateral Agent, and The Chase Manhattan Bank
(National Association) ("Chase"), as Documentary
Agent
4.2 Credit Agreement dated as of June 30, 1995, among
FTX, FCX, FM Properties Operating Co. ("FMPOC"),
certain banks, Chemical, as Administrative Agent,
and Chase, as Documentation Agent
4.3 FTX Guaranty Agreement dated as of July 17, 1995
4.4 Second Amended and Restated Note Agreement dated
as of June 30, 1995, among FTX, FCX, FMPOC,
Chemical, and Hibernia National Bank,
individually and as Agent
11.1 Freeport-McMoRan Inc. Computation of Net Income
per Common and Common Equivalent Share
27.1 Freeport-McMoRan Inc. Financial Data Schedule
CONFORMED COPY
DISTRIBUTION AGREEMENT
dated as of
July 5, 1995
between
FREEPORT-McMoRan INC.
and
FREEPORT-McMoRan COPPER & GOLD INC.
TABLE OF CONTENTS*
ARTICLE I
DEFINITIONS
Section 1.01. Definitions . . . . . . . . . . . . . . . . 2
ARTICLE II
THE DISTRIBUTION
Section 2.01. Cooperation Prior to the Distribution . . . 4
Section 2.02. FTX Board Action; Conditions Precedent
to the Distribution . . . . . . . . . . . . . . . . . . . . . 4
Section 2.03. The Distribution . . . . . . . . . . . . . 5
Section 2.04. Sale of Fractional Shares . . . . . . . . . 5
ARTICLE III
TRANSITION
Section 3.01. Transition . . . . . . . . . . . . . . . . 5
Section 3.02. Office Lease . . . . . . . . . . . . . . . 6
Section 3.03. Further Assurances and Consents . . . . . . 6
Section 3.04. Intercompany Accounts . . . . . . . . . . . 6
Section 3.05. Certain Intellectual Property Matters . . . 7
ARTICLE IV
INFORMATION
Section 4.01. Access to Information . . . . . . . . . . . 8
Section 4.02. Litigation Cooperation . . . . . . . . . . 8
Section 4.03. Tax Cooperation . . . . . . . . . . . . . . 8
Section 4.04. Reimbursement . . . . . . . . . . . . . . . 9
Section 4.05. Retention of Records . . . . . . . . . . . 9
Section 4.06. Confidentiality . . . . . . . . . . . . . . 9
ARTICLE V
REPRESENTATIONS AND COVENANTS
Section 5.01. Certain Prohibited Actions . . . . . . . . 10
Section 5.02. Representations and Covenants
Set Forth in the Ruling . . . . . . . . . . . . . . . . . . . . . 13
Section 5.03. State and Local Taxes . . . . . . . . . . . 13
Section 5.04. Applicability of Management Services
*The Table of Contents is not a part of this Agreement.
Agreement . . . . . . . . . . . . . . . . . . . . . 13
Section 5.05. Employee Matters . . . . . . . . . . . . . 13
ARTICLE VI
MISCELLANEOUS
Section 6.01. Expenses . . . . . . . . . . . . . . . . . 13
Section 6.02. Notices . . . . . . . . . . . . . . . . . . 13
Section 6.03. Amendment and Waiver . . . . . . . . . . . 14
Section 6.04. Arbitration . . . . . . . . . . . . . . . . 14
Section 6.05. Counterparts . . . . . . . . . . . . . . . 15
Section 6.06. Governing Law . . . . . . . . . . . . . . . 15
Section 6.07. Entire Agreement . . . . . . . . . . . . . 15
Section 6.08. Parties in Interest . . . . . . . . . . . . 15
Section 6.09. Specific Enforcement . . . . . . . . . . . 15
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT dated as of July 5, 1995 (the
"Agreement") between FREEPORT-McMoRan INC., a Delaware
corporation (together with its successors and permitted
assigns, "FTX"), and FREEPORT-McMoRan COPPER & GOLD INC., a
Delaware corporation (together with its successors and
permitted assigns, "FCX").
W I T N E S S E T H
WHEREAS, FTX owns as of the close of business on the
date hereof 117,909,323 shares of Class B Common Stock of
FCX;
WHEREAS, the Board of Directors of FTX has
determined that it is in the best interest of FTX and the
stockholders of FTX to distribute all of the outstanding
shares of FCX's Class B Common Stock which FTX owns at the
time of such distribution to the holders of FTX Common Stock
(the "Distribution");
WHEREAS, the parties have been members of an
affiliated group of companies, including FCX and its
affiliates, and FTX has entered into certain obligations for
the joint benefit of the members of the group which the
parties agree should be allocated among such members on a
fair and equitable basis;
WHEREAS, the parties have determined that it is
necessary and desirable to set forth the principal
transactions required to effect such Distribution and to
enter into other agreements that shall govern certain other
matters following such Distribution; and
WHEREAS, prior to the Distribution, FTX shall enter
into certain other agreements with FCX in addition to this
Agreement, including, but not limited to, the Employee
Benefits Allocation Agreement;
NOW, THEREFORE, in consideration of the mutual
agreements and covenants contained in this Agreement, the
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used herein, the
following terms have the following meaning:
"Action" means any claim, suit, arbitration,
inquiry, proceeding or investigation by or before any court,
governmental or other regulatory or administrative agency or
commission or any other tribunal.
"Affiliate" means, with respect to any Person, any
Person that is directly or indirectly controlled by such
Person; provided that for the purposes of this Agreement,
(i) IMC-Agrico Company shall be considered an Affiliate of
FTX, and (ii) FCX and its Affiliates shall not be considered
Affiliates of FTX. As used in this definition, the term
"control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management
and policies of the Person whether through ownership of
voting securities, by contract or otherwise.
"Class A Common Stock" means the Class A Common
Stock, par value $.10 per share, of FCX.
"Class B Common Stock" means the Class B Common
Stock, par value $.10 per share, of FCX.
"Commission" means the Securities and Exchange
Commission.
"Consent Solicitation Statement" means the Consent
Solicitation Statement of FCX dated February 7, 1995, as
supplemented by the letter of FCX dated March 8, 1995.
"Distribution Agent" means Mellon Securities Trust
Company, as agent of the holders of the FTX Common Stock.
"Distribution Date" means July 17, 1995.
"Employee Benefits Allocation Agreement" means an
employee benefits allocation agreement between FTX and FCX,
as amended from time to time.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"FCX Board" means the Board of Directors of FCX.
"Five-Year Period" means the five-year period
immediately following the Distribution Date.
"Form 8-A" means the registration statement on Form
8-A in respect of the Class B Common Stock filed with the
Commission under the Exchange Act on June 29, 1995, together
with any amendments thereto.
"FRP" means Freeport-McMoRan Resource Partners,
Limited Partnership, a Delaware publicly traded limited
partnership.
"FTX Common Stock" means the common stock, par value
$1.00 per share, of FTX.
"Implementation Agreement" means the Implementation
Agreement dated May 2, 1995 between FCX and RTZ.
"Management Services Agreement" means, individually
and collectively (unless otherwise indicated), (i) the
agreement dated as of May 1, 1988 between FTX, Freeport-
McMoRan Copper Company, Inc. and Freeport Indonesia,
Incorporated, and (ii) any transitional management services
agreement that may be entered into involving FTX, FCX and
PT-FI and that expires no later than one year after the
Distribution Date, pursuant to each of which FTX furnishes
from time to time certain services to FCX and PT-FI.
"NYSE" means the New York Stock Exchange, Inc.
"Person" means an individual, corporation,
association, partnership, organization, business,
governmental authority or regulatory body or any other
entity.
"Preferred Stock" means the 7% Convertible
Exchangeable Preferred Stock, the Step-Up Convertible
Preferred Stock, Series I and II of the Gold-Denominated
Preferred Stock and the Silver-Denominated Preferred Stock
of FCX, collectively.
"PT-FI" means P.T. Freeport Indonesia Company, an
Indonesian limited liability company that is domesticated in
Delaware.
"Record Date" means July 17, 1995.
"RTZ" means The RTZ Corporation PLC, a corporation
organized under the laws of England.
"Ruling" means the private letter ruling that the
Internal Revenue Service issued to FTX on November 21, 1994
and that addresses the United States federal income tax
consequences of the Distribution.
"Tax" means any net income, alternative or add-on
minimum, gross income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll,
employment, excise, transfer, recording, severance, stamp,
occupation, premium, property, environmental or other tax,
governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest, penalty,
addition to tax or additional amount related thereto.
"Two-Year Period" means the two-year period
immediately following the Distribution Date.
ARTICLE II
THE DISTRIBUTION
Section 2.01. Cooperation Prior to the
Distribution. (a) FCX has prepared and filed with the
Commission the Form 8-A, which includes or incorporates by
reference the Consent Solicitation Statement setting forth
appropriate disclosure concerning the capital stock of FCX
and any other appropriate matters required to be stated
therein. FCX shall use reasonable efforts to cause the Form
8-A to become effective under the Exchange Act.
(b) FTX and FCX shall take all such action as may
be necessary or appropriate under the securities or blue sky
laws of states or other political subdivisions of the United
States in connection with the Distribution and the
transactions contemplated by this Agreement.
(c) FCX shall prepare and file applications to list
the Class B Common Stock to be distributed by FTX on the
NYSE and the Australian Stock Exchange.
Section 2.02. FTX Board Action; Conditions
Precedent to the Distribution. FTX's Board of Directors has
on the date hereof established the Record Date and the
Distribution Date and appropriate procedures in connection
with the Distribution and the merger of FM Facilitating
Company, Inc. ("Facilitating") with and into FCX has been
consummated in accordance with the Agreement and Plan of
Merger dated as of February 7, 1995 between Facilitating and
FCX. In no event shall the Distribution occur unless the
following conditions shall have been satisfied or waived by
FTX:
(i) the Form 8-A shall have become effective under
the Exchange Act and the Commission shall have confirmed
that it has no further comments thereon; and
(ii) the Class B Common Stock shall have been
approved for listing on the NYSE, subject to official
notice of issuance.
Section 2.03. The Distribution. On the
Distribution Date, subject to the conditions set forth in
this Agreement, FTX shall cause the Distribution Agent to
distribute, on a pro rata basis and taking into account
Section 2.04, to the holders of record of FTX Common Stock
on the Record Date, all shares of Class B Common Stock held
by FTX on the Distribution Date. On the Distribution Date,
FTX shall relinquish any and all ownership interest of and
control over such shares of Class B Common Stock. During
the period commencing on the Distribution Date and ending
upon the date(s) on which certificates evidencing such
shares are mailed to holders of record of FTX Common Stock
on the Record Date or on which fractional shares of Class B
Common Stock are sold on behalf of such holders, the
Distribution Agent shall hold the Class B Common Stock on
behalf of such holders. FCX agrees to provide all
certificates evidencing shares of Class B Common Stock that
FTX shall require in order to effect the Distribution.
Section 2.04. Sale of Fractional Shares. FTX shall
appoint the Distribution Agent as agent for each holder of
record of FTX Common Stock who would receive in the
Distribution any fractional share of Class B Common Stock.
The Distribution Agent shall aggregate all such fractional
shares and sell them in an orderly manner after the
Distribution Date in the open market and, after completion
of such sales, distribute a pro rata portion of the gross
proceeds from such sales, based upon the average gross
selling price of all such fractional shares, to each
shareholder of FTX who would otherwise have received a
fractional share. FCX shall reimburse the Distribution
Agent for its reasonable costs, expenses and fees in
connection with the sale of fractional shares of Class B
Common Stock.
ARTICLE III
TRANSITION
Section 3.01. Transition. The parties agree that
prior to the Distribution FTX entered into certain
commitments and arrangements for the joint benefit of FTX,
FCX and their respective Affiliates. FCX and its Affiliates
have been allocated from time to time a portion of the costs
of such commitments and arrangements. The parties agree
that, to the extent applicable, the benefits of such
commitments and arrangements entered into by FTX prior to
the Distribution shall continue to be made available to FCX
and its Affiliates following the Distribution and that
following the Distribution each of the parties on whose
behalf such commitments and arrangements were made shall be
liable on a fair and equitable basis for its proportionate
share for any costs associated with such commitments and
arrangements.
Section 3.02. Office Lease. FTX has entered into
an office lease and ancillary agreements (the "Lease") in
respect of a portion of the building located at 1615 Poydras
Street, New Orleans, Louisiana, which houses the offices of
both FTX and FCX and includes the location of personnel who
have provided services to both parties. FCX and its
Affiliates have been allocated from time to time a portion
of the costs of the Lease and pursuant to the Management
Services Agreement FCX and its Affiliates shall continue to
pay a portion of the costs of the Lease. The parties agree
that, no later than one year after the Distribution Date,
they shall negotiate a fair and equitable agreement in
respect of the Lease pursuant to which the costs thereunder
and the use of the space covered thereby shall be allocated
on a fair and equitable basis for the balance of the term of
the Lease.
Section 3.03. Further Assurances and Consents. (a)
Each of the parties hereto shall execute and deliver such
further instruments of conveyance and assignment and shall
take such other actions as any other party may reasonably
request in order to effectuate the purposes of this
Agreement and to carry out the terms hereof.
(b) In addition to the actions specifically
provided for elsewhere in this Agreement, each of the
parties hereto shall use its reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be
done, all things, reasonably necessary, proper or advisable
under applicable laws, regulations and agreements or
otherwise to consummate and make effective the transactions
contemplated by this Agreement, including, without
limitation, using its reasonable efforts to obtain any
approvals, consents and assignments and to make any filings
and applications necessary or desirable in order to
consummate the transactions contemplated by this Agreement;
provided that no party hereto shall be obligated to pay any
consideration therefor (except for filing fees and other
similar charges) to any third party from whom such
approvals, consents and assignments are requested or to take
any action or omit to take any action if the taking of or
the omission to take such action would be unreasonably
burdensome to the party or its business.
Section 3.04. Intercompany Accounts. On the
Distribution Date, all intercompany loans, receivables and
payables in existence as of the Distribution Date between
FTX and FCX shall be settled for cash, except with respect
to any receivables and payables arising (i) under the
Management Services Agreement dated May 1, 1988 which have
not been billed as of the Distribution Date or (ii) in
connection with transferred employees, including
arrangements in respect of employee benefits. The excepted
receivables and payables shall be settled in ordinary
course.
Section 3.05. Certain Intellectual Property
Matters. The following provisions shall apply, from and
after the Distribution Date, except as shall otherwise be
agreed by FTX and FCX, to the use of the terms "Freeport-
McMoRan", "Freeport" and "McMoRan":
(i) except as provided below, neither FTX nor FCX
nor any of their subsidiaries, divisions or Affiliates
shall use the word "McMoRan" as part of the name of such
subsidiary, division or Affiliate;
(ii) FTX, FRP and FCX and their successors shall
be entitled to continue to use the term "Freeport-
McMoRan" in their corporate or partnership name, as the
case may be, but (A) such entities shall not permit the
use of such term in its name by any subsidiary, division
or Affiliate which does not, as of the Distribution Date,
use such term in its name and (B) with respect to each
subsidiary, division and Affiliate currently using the
term "Freeport-McMoRan" in its corporate, division or
Affiliate title, FTX, FRP and FCX will as soon as
practicable after the Distribution Date cause such
subsidiary, division or Affiliate to change its name to
one which does not include the term "Freeport-McMoRan"
or, except as provided below, "Freeport";
(iii) FCX shall be entitled to use the separate
word "Freeport" as part of the name of any of its
subsidiaries, divisions and Affiliates associated with
its Indonesian operations;
(iv) FTX and FRP shall be entitled to use the
separate word "Freeport" as part of the name of any of
their subsidiaries, divisions and Affiliates engaged in
the business of mining, extracting, processing or
marketing sulphur and other agricultural minerals and
chemicals; and
(v) except as set forth above, neither FTX, FCX
nor any of their subsidiaries, divisions and Affiliates
shall use the separate word "Freeport" as part of its
name.
ARTICLE IV
INFORMATION
Section 4.01. Access to Information. From and
after the date hereof, each party shall afford the other
party and its accountants, counsel and other designated
representatives reasonable access (including using
reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal
business hours to all records, books, contracts,
instruments, computer data and other data and information in
such party's possession relating to the business and affairs
of such other party (other than data and information subject
to an attorney/client or other privilege or otherwise
required to be kept confidential pursuant to binding
agreements), insofar as such access is reasonably required
by such other party including, without limitation, for
audit, accounting, Tax and litigation purposes, as well as
for purposes of fulfilling disclosure and reporting
obligations.
Section 4.02. Litigation Cooperation. Each party
shall use reasonable efforts to make available to the other
party, upon written request, its officers, directors,
employees and agents as witnesses to the extent that such
persons may reasonably be required in connection with any
Action arising out of the business of such other party and
its predecessors, if any, in which the requesting party may
from time to time be involved.
Section 4.03. Tax Cooperation. (a) Without
limiting the generality of Sections 3.03, 4.01, 4.02 or 4.05
and notwithstanding anything contained herein to the
contrary, FTX and FCX shall cooperate, and shall cause their
respective Affiliates to cooperate fully, at such time and
to the extent reasonably requested by the other party in
connection with (i) such other party's preparation and
filing of any Tax return or claim for refund of Tax, (ii)
such other party's ascertainment of the existence and amount
of any liability for, or refund of, Tax, or (iii) the
conduct of any audit, dispute or Action regarding Taxes in
which such other party is engaged. The cooperation under
this Section 4.03 by each party shall include, without
limitation, (i) the retention and provision on demand, until
the expiration of the applicable statute of limitations
(giving effect to any extension, waiver, or mitigation
thereof), of documentation and information regarding Taxes
and Tax returns that could be relevant to the Taxes of the
other party, (ii) the provision of additional information
and explanation of such documentation, information and
returns, (iii) the execution of any document regarding Taxes
that would be reasonably helpful to the other party, and
(iv) the use of a party's best efforts to obtain, from
governmental authorities or third parties, documentation or
information regarding Taxes that would be reasonably helpful
to the other party.
Section 4.04. Reimbursement. Each party providing
information or witnesses under Sections 4.01, 4.02 or 4.03
to any other party shall be entitled to receive from the
recipient, upon the presentation of invoices therefor,
payment for all out-of-pocket costs and expenses as may be
reasonably incurred in providing such information or
witnesses.
Section 4.05. Retention of Records. Except as
otherwise required by law or agreed to in writing, each
party shall preserve and retain all information relating to
the other party's business in accordance with the record
retention policies of such party as may be in effect from
time to time. Notwithstanding the foregoing, any party may
destroy or otherwise dispose of any information at any time;
provided that prior to such destruction or disposal, (i)
such party shall provide no less than 90 days prior written
notice to the other party, specifying the information
proposed to be destroyed or disposed of and (ii) if the
recipient of such notice shall request in writing prior to
the scheduled date for such destruction or disposal that any
of the information proposed to be destroyed or disposed of
be delivered to such requesting party, the party proposing
the destruction or disposal shall promptly arrange for the
delivery of such of the information as was requested at the
expense of the requesting party.
Section 4.06. Confidentiality. Each party shall
hold and shall cause its directors, officers, employees,
agents, consultants and advisors to hold in strict
confidence, unless compelled to disclose by judicial or
administrative process or, in the opinion of its counsel, by
other requirements of law, all information (other than any
such information relating solely to the business or affairs
of such party) concerning the other party (except to the
extent that such information can be shown to have been (i)
in the public domain through no fault of such party or (ii)
later lawfully acquired on a non-confidential basis from
other sources by the party to which it was furnished), and
neither party shall release or disclose such information to
any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors who
shall be advised of and agree in writing to comply with the
provisions of this Section 4.06. Each party shall be deemed
to have satisfied its obligation to hold confidential
information concerning or supplied by the other party if it
exercises the same care as it takes to preserve
confidentiality for its own similar information.
ARTICLE V
REPRESENTATIONS AND COVENANTS
Section 5.01. Certain Prohibited Actions. (a) Each
of FTX and FCX covenants that it shall comply with Section
5.01(b), to the extent that the prohibited actions specified
therein apply to it, unless it shall have first (i) obtained
either an opinion of nationally recognized tax counsel or a
supplemental private letter ruling from the Internal Revenue
Service, stating that the contemplated actions would not
adversely affect the tax-free nature of the Distribution or
the ability of FTX to rely on the Ruling, (ii) presented
such opinion of counsel or supplemental private letter
ruling to the other party, and (iii) described all material
aspects of the contemplated actions to such other party.
(b) (i) FTX and FCX shall not initiate or support
any action during the Five-Year Period that would in any
way change the ability of the holders of the Class B
Common Stock to elect at least 80% of the members of the
FCX Board and the ability of the holders of the Class A
Common Stock and the Preferred Stock, voting together as
a single class, to elect the remaining members of the FCX
Board, including, without limitation, voting to combine
the Class A Common Stock and the Class B Common Stock.
In addition, FCX shall not permit its shareholders to
vote during the Five-Year Period to change the described
voting structure.
(ii) During the Two-Year Period, FCX shall not
issue shares of any preferred stock that would not
entitle the holders to vote together with the Class A
Common Stock and the existing classes of Preferred Stock
in the election of certain members of the FCX Board.
(iii) During the Two-Year Period, FCX shall not
dispose of any of the common stock of PT-FI, subordinated
promissory notes of PT-FI or production payment loans of
PT-FI that it holds on the Distribution Date.
(iv) FCX shall use its best efforts to cause PT-FI
to (A) remain the operator under the Contract of Work
dated December 30, 1991 between PT-FI and the Government
of the Republic of Indonesia, and (B) continue the
conduct of its copper and gold business in a
substantially unchanged manner during the Two-Year Period
as such business is operated prior thereto and to use its
business assets in such business; provided that any
transaction contemplated or described in or in connection
with the following agreements shall not be taken into
account for the purposes of this Section 5.01(b)(iv): (I)
the Implementation Agreement, (II) the Participation
Agreement between PT-FI and an Indonesia limited
liability company to be formed as a wholly owned
subsidiary of RTZ, the form of which agreement is set
forth in Schedule 1 to the Implementation Agreement,
(III) the Credit Facility of up to $450 million between
PT-FI and a United Kingdom subsidiary of RTZ, the form of
which facility is set forth in Schedule 2 to the
Implementation Agreement, and (IV) any other agreements
between FTX, FCX, RTZ and their respective Affiliates.
(v) During the Two-Year Period, FTX shall not
dispose of the direct or indirect interests in FRP that
it holds on the Distribution Date; provided that FTX
shall be allowed to transfer interests in FRP pursuant to
compensatory or incentive stock options for employees,
officers or directors if FTX shall beneficially own at
least 50.1% of FRP following such transfer.
(vi) FTX shall use its best efforts to (A) remain
the administrative managing general partner of FRP during
the Two-Year Period, and (B) cause FRP to continue the
conduct of its sulphur and phosphate fertilizer
businesses in a substantially unchanged manner during the
Two-Year Period as such businesses are operated prior
thereto and to use its business assets in such
businesses.
(vii) During the Two-Year Period, FTX, FRP, FCX and
PT-FI shall not take affirmative steps to merge into
another entity, to liquidate or to sell or otherwise
dispose of any of their assets except for asset
dispositions made in the ordinary course of business.
(viii) FTX and FCX shall not directly or indirectly
redeem or otherwise reacquire shares of the FTX Common
Stock and the Class B Common Stock, respectively, during
the Two-Year Period except to the extent that (A) a
corporate business purpose shall support such redemption
or reacquisition, (B) the redeemed or reacquired stock
shall be widely held, (C) the redemption or reacquisition
shall be made on the open market, (D) to the best of the
knowledge of FTX or FCX, as the case may be, the
redemption or reacquisition shall not be made from a
director or officer, or any shareholder owning 1% or more
of the outstanding stock of the corporation, and (E) FTX
and FCX shall have no plan or intention, as of the
Distribution Date, that the aggregate amount of stock
repurchased would equal or exceed 20% of the outstanding
stock of the relevant corporation; provided that these
prohibitions shall not be effective as to the receipt by
FTX or FCX, as the case may be, of FTX Common Stock or
Class B Common Stock, respectively, in lieu of the
payment of cash upon the exercise by an employee, officer
or director of compensatory or incentive stock options.
Neither FTX nor FCX shall initiate a periodic stock
redemption program during the Two-Year Period unless such
program shall be expected to comply with the requirements
set forth in (A) through (E) of this Section
5.01(b)(viii).
(ix) FCX shall not redeem or otherwise reacquire the
Class B Common Stock during the Two-Year Period, to the
extent that such redemption or reacquisition would result
in the Class B Common Stock representing less than 50% of
the common equity of FCX.
(x) After the expiration of one year from the
Distribution Date, FTX and FCX shall not operate under
the Management Services Agreement. Except for the
temporary supply of certain administrative services under
such agreement, each of FTX and FCX shall arrange for the
provision of the administrative services requisite to the
conduct of its business. FTX and FRP shall conduct their
sulphur and phosphate fertilizer businesses through
employees, officers and directors of FTX or FRP or both
and FCX and PT-FI shall conduct their copper and gold
business through employees, officers and directors of FCX
or PT-FI or both; provided that the foregoing shall not
prevent certain individuals from being employees,
officers or directors of both FTX and FCX.
(c) For the purposes of this Section 5.01, a
transaction occurring at any point in time subsequent to the
expiration of the Two-Year Period or the Five-Year Period,
as the case may be, shall be deemed to occur within such
period if (i) such transaction results from a binding
commitment of the relevant entity entered into within such
period, or (ii) such transaction or a transaction of
substantially similar nature for Tax purposes shall have
been publicly announced, proposed (whether or not accepted)
or approved (in principle or otherwise) by its Board of
Directors (or, in the case of FRP, FTX) during such period.
Section 5.02. Representations and Covenants Set
Forth In the Ruling. Each of FTX and FCX hereby reaffirms
that the representations and covenants set forth in the
Ruling are valid as of the date hereof and covenants to
reaffirm on the Distribution Date that such representations
and covenants are valid on such date, in each case to the
extent that such representations and covenants apply to it.
Section 5.03. State and Local Taxes. Each of FTX
and FCX covenants that, in the event the two parties are
treated as members of a consolidated, combined or unitary
group in any taxable year for the purposes of state and
local income taxes in California, Kansas, Minnesota,
Montana, Nebraska or North Dakota or with respect to the
foreign metals business, it shall indemnify, defend and hold
harmless the other party and its Affiliates from and against
the portion of such taxes, together with any interest,
penalty, addition to tax or additional amount related to
such taxes, that is allocable to the indemnifying party
using principles analogous to those described in paragraph 4
of the Management Services Agreement dated May 1, 1988,
except for paragraphs 4(h) and 4(i) thereof.
Section 5.04. Applicability of the Management
Services Agreement. Subject to Section 5.01(b)(x), FTX, FCX
and PT-FI shall continue to comply with, and be bound by,
such provisions of the Management Services Agreement dated
May 1, 1988 as shall be applicable, including, without
limitation, paragraph 4 thereof.
Section 5.05. Employee Matters. Each of FTX and
FCX covenants that, except as otherwise agreed by FTX and
FCX, all employee matters and employee benefits arrangements
shall be governed by the Employee Benefits Allocation
Agreement, the form of which is attached hereto as
Exhibit A.
ARTICLE VI
MISCELLANEOUS
Section 6.01. Expenses. Except as specifically
provided in this Agreement, each of FTX and FCX shall pay
all costs and expenses incurred by it or on its behalf in
connection with this Agreement, the Distribution and the
transactions contemplated hereby and thereby, including,
without limitation, the fees and expenses of its own legal
counsel, accountants and financial and other advisors.
Section 6.02. Notices. All notices, requests and
other communications under this Agreement to any party shall
be in writing (including facsimile or similar writing) and
shall be given
if to FTX, to:
Freeport-McMoRan Inc.
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: General Counsel
Telecopier: (504) 585-3512
if to FCX, to:
Freeport-McMoRan Copper & Gold Inc.
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: General Counsel
Telecopier: (504) 585-3512
or to such other address or telecopier number as such party
may hereafter specify for the purpose by notice to the other
parties. Each such notice, request or other communication
shall be effective (i) if given by facsimile, when such
facsimile is transmitted to the telecopier number specified
in this Section 6.02 and transmission of the appropriate
number of pages is confirmed or (ii) if given by any other
means, when delivered at the address specified in this
Section 6.02.
Section 6.03. Amendment and Waiver. This Agreement
may not be altered or amended, nor may rights hereunder be
waived, except by an instrument in writing executed by each
party, or in the case of a waiver by an instrument in
writing executed by the party against whom such waiver is to
be effective. No waiver of any terms, provision or
condition of or failure to exercise or delay in exercising
any rights or remedies under this Agreement, in any one or
more instances, shall be deemed to be, or construed as, a
further or continuing waiver of any such term, provision,
condition, right or remedy or as a waiver of any other term,
provision or condition of this Agreement.
Section 6.04. Arbitration. All disputes between
FTX and its Affiliates, on the one hand, and FCX and its
Affiliates, on the other, arising out of or in connection
with this Agreement, or the breach thereof, shall be settled
by arbitration in New Orleans, Louisiana, in accordance with
the Rules of the American Arbitration Association in effect
at the time of such reference. Judgment upon the award
rendered may be entered in any court having jurisdiction or
application may be made to such court for a judicial
acceptance of the award and a order of enforcement, as the
case may be. The parties hereto agree to cooperate in good
faith to expedite to the maximum practicable extent the
conduct of any arbitral proceedings commenced under this
Agreement.
Section 6.05. Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original instrument, but all of which together
shall constitute but one and the same Agreement.
Section 6.06. Governing Law. This Agreement shall
be construed in accordance with, and governed by, the laws
of the State of Delaware.
Section 6.07. Entire Agreement. This Agreement and
the Employee Benefits Allocation Agreement shall constitute
the entire understanding of the parties hereto with respect
to the subject matter hereof, superseding all negotiations,
prior discussions and prior agreements and understandings
relating to such subject matter.
Section 6.08. Parties in Interest. Neither party
hereto may assign any of its rights or delegate any of its
duties under this Agreement without the prior written
consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto
and their respective successors and permitted assigns.
Nothing contained in this Agreement, express or implied, is
intended to confer upon any Person other than the parties
hereto, any benefits, rights or remedies.
Section 6.09. Specific Enforcement. FTX and FCX
acknowledge that the other would be irreparably harmed by a
breach of any provision of Section 5.01 or 5.02 of this
Agreement and that there would be no adequate remedy at law
or in damages to compensate for such breach. Each agrees
that the other shall be entitled to injunctive relief
requiring specific performance by FTX or FCX, as the case
may be, of any provision of Section 5.01 or 5.02 of this
Agreement and consents to the entry thereof.
IN WITNESS WHEREOF the parties hereto have caused
this Agreement to be executed as of the date first above
written.
FREEPORT-McMoRan INC.
By /s/ Rene L. Latiolais
Name: Rene L. Latiolais
Title: President and
Chief Operating Officer
FREEPORT-McMoRan COPPER & GOLD INC.
By /s/ George A. Mealey
Name: George A. Mealey
Title: President and
Chief Operating Officer
Exhibit A
EMPLOYEE BENEFITS ALLOCATION AGREEMENT
This Employee Benefits Allocation Agreement dated as
of July 5, 1995 is entered into between Freeport-McMoRan
Inc., a Delaware corporation ("FTX"), and Freeport-McMoRan
Copper & Gold Inc., a Delaware corporation ("FCX" or the
"Company").
Background
1. FTX currently owns common stock of FCX
representing a controlling interest in FCX.
2. From the date of its inception, FCX has employed
no United States employees, but has relied on FTX for
management and other services that have been provided
pursuant to a management services agreement among, inter
alia, FTX and FCX.
3. FTX intends to distribute to its common
stockholders, on a tax-free basis, all of the Class B Common
Stock, par value $0.10 per share, of FCX owned by FTX at the
time of such distribution (the "Distribution").
4. In connection with the Distribution, the parties
intend that FTX will continue for a period of time to
provide employment and management services to FCX pursuant
to the existing management services agreement and that
certain FTX employees will at a future time become employees
of FCX.
5. FTX and FCX wish to agree as to the allocation
of liabilities and responsibilities relating to the
transferred employees in connection with employee
compensation and benefit arrangements.
Agreement
1. Definitions. For purposes of this Agreement,
the following terms shall have the meaning set forth below.
(a) "Adjusted FCX Award" shall mean an option to
purchase, or stock appreciation right or stock incentive
unit relating to, FCX Shares that results from the
adjustment and conversion of an FTX Award pursuant to
Paragraph 6.
(b) "Adjusted FTX Award" shall mean an FTX Award
that is adjusted in accordance with the provisions of
Paragraph 6.
(c) "Adjusted Stock Award Plan" shall mean the
Freeport-McMoRan Copper & Gold Inc. Adjusted Stock Award
Plan, adopted pursuant to Paragraph 6.
(d) "Code" shall mean the Internal Revenue Code of
1986, as amended, and the regulations (including
temporary and proposed regulations) promulgated
thereunder.
(e) "Directors Plan" shall mean the Freeport-
McMoRan Copper & Gold Inc. 1995 Stock Option Plan for
Non-Employee Directors, adopted pursuant to
paragraph 6.
(f) "Distribution Date" shall mean the effective
date of the Distribution.
(g) "Dual Employee" shall mean an employee who
becomes a Transferred Employee but who thereafter also
remains employed by FTX or its subsidiaries (other than
FCX).
(h) "Effective Date" shall mean, with respect to
any Transferred Employee, such Employee's date of hire by
FCX or one of its subsidiaries.
(i) "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
(j) "FCX Individual Account Plan" shall mean one or
more defined contribution plans to be established or
designated by FCX for the benefit of Transferred
Employees, pursuant to Paragraph 5.
(k) "FCX Pension Plan" shall mean one or more
defined benefit pension plans to be established or
designated by FCX for the benefit of Transferred
Employees, pursuant to Paragraph 4.
(l) "FCX Shares" shall mean Class B Common Stock,
par value $0.10 per share, of FCX.
(m) "FTX AIP" shall mean the Freeport-McMoRan Inc.
Annual Incentive Plan.
(n) "FTX Award" shall mean an option, stock
appreciation right, limited right, stock incentive unit
or other award relating to FTX Shares that has been
granted under an FTX Stock Plan and is outstanding on the
Effective Date.
(o) "FTX Benefit Arrangements" shall mean each
employment, severance or similar contract, arrangement or
policy (exclusive of any such contract, arrangement or
policy that is terminable within 30 days without
liability of FTX or any of its affiliates), and each plan
or arrangement (whether or not written) providing for
severance benefits, insurance coverage (including any
self-insured arrangements), workers' compensation,
disability benefits, supplemental unemployment benefits,
vacation benefits, retirement benefits or for deferred
compensation, profit-sharing, bonuses, stock options,
stock appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation
or benefits that (i) is not an FTX Employee Plan, (ii) is
entered into or maintained, as the case may be, by FTX or
any of its affiliates (other than FCX) and (iii) covers
any Transferred Employee.
(p) "FTX EBP" shall mean the Freeport-McMoRan Inc.
Excess Benefits Plan.
(q) "FTX Employee Plans" shall mean each "employee
benefit plan", as defined in Section 3(3) of ERISA, that
(i) is subject to any provision of ERISA, (ii) is
maintained, administered or contributed to by FTX or any
of its affiliates (other than FCX) and (iii) covers any
Transferred Employee.
(r) "FTX Executive Plans" shall mean the FTX AIP,
the FTX LTPIP, the FTX PIAP, the FTX SECAP and the FTX
EBP.
(s) "FTX Individual Account Plan" shall mean the
Freeport-McMoRan Inc. Employee Capital Accumulation
Program.
(t) "FTX LTPIP" shall mean either or both of the
Freeport-McMoRan Inc. 1987 Long-Term Performance
Incentive Plan and the Freeport-McMoRan Inc. 1992 Long-
Term-Performance Incentive Plan.
(u) "FTX Pension Plan" shall mean the Freeport-
McMoRan Inc. Employee Retirement Plan.
(v) "FTX PIAP" shall mean the Freeport-McMoRan Inc.
Performance Incentive Awards Program.
(w) "FTX SECAP" shall mean the Freeport-McMoRan
Inc. Supplemental Executive Capital Accumulation Plan.
(x) "FTX Shares" shall mean shares of FTX common
stock, par value $1 per share.
(y) "FTX Stock Plan" shall mean any plan of FTX,
other than an FTX Executive Plan, under which any award
is or has been granted to FTX employees, officers or
directors and is outstanding on the Effective Date, which
award relates to FTX Shares, including, without
limitation, options, stock appreciation rights,
performance units, stock incentive units, Limited Rights,
as defined in any such Plan, tax-offset payment rights,
etc.
(z) "Retired Employees" shall mean all former,
retired and long-term disabled employees of FTX and its
subsidiaries (including FCX), as of the Distribution
Date.
(aa) "Rule 16b-3" shall mean Rule 16b-3 promulgated
under Section 16 of the Securities Exchange Act of 1934,
and any successor provision.
(bb) "Section 162(m)" shall mean Section 162(m) of
the Code and any memoranda or decisions issued by the
Internal Revenue Service or the Department of the
Treasury with respect thereto.
(cc) "Securities Act" shall mean the Securities Act
of 1933, as amended.
(dd) "SIU Plan" shall mean the Freeport-McMoRan
Copper & Gold Inc. Stock Incentive Unit Plan, adopted
pursuant to paragraph 6.
(ee) "Stock Plan" shall mean the Freeport-McMoRan
Copper & Gold Inc. 1995 Stock Option Plan, adopted
pursuant to Paragraph 6.
(ff) "Transferred Employees" shall mean those active
employees of FTX or its subsidiaries (other than FCX) who
by mutual agreement between FTX and FCX become employees
of FCX or one of its subsidiaries following the
Distribution. Any such employee shall be considered a
Transferred Employee whether or not such employee remains
employed by FTX following the Distribution.
2. Employment by FCX. (a) As used in this
Agreement, unless otherwise expressly stated or required by
context, "FTX employee", or words with similar effect, shall
refer to employees of any of FTX and its subsidiaries other
than FCX, and "FCX employee", or words with similar effect,
shall refer to employees of any of FCX and its subsidiaries.
(b) Each Transferred Employee will become an
employee of FCX as of such Transferred Employee's Effective
Date. Such employment shall initially be upon the same
terms and conditions, with the same wage or salary level,
seniority and job location as those on which or at which
such employees were employed by FTX immediately prior to
such Effective Date; provided, however, that in the case of
Dual Employees, such employment shall be on such terms and
conditions as are determined by the Board of Directors of
FCX. No provision of this Agreement shall preclude or
impair the ability of FCX to terminate the employment of any
Transferred Employee or to change the terms, conditions or
location of employment following the Effective Date.
3. Representations. (a) FTX has furnished or made
available to FCX copies or descriptions of all FTX Employee
Plans and FTX Benefit Arrangements.
(b) The FTX Pension Plan and the FTX Individual
Account Plan have each received a favorable determination
letter from the Internal Revenue Service and FTX knows of no
event or circumstance occurring or existing since the date
of such letter, in either case, that would cause such plan
to fail to be qualified under Section 401(a) of the Code, or
that would cause the trust related to such plan to fail to
be exempt from taxation under Section 501(a) of the Code.
(c) Each FTX Employee Plan and FTX Benefit
Arrangement has been maintained in substantial compliance
with its terms and with the requirements prescribed by any
and all statutes, orders, rules and regulations, including
but not limited to ERISA and the Code, that are applicable
thereto.
(d) No FTX Employee Plan is a "multiemployer plan",
as described in Sections 3(37) or 4001(a)(3) of ERISA.
(e) As of December 31, 1994, the fair market value
of the assets of the FTX Pension Plan (excluding for these
purposes any accrued but unpaid contributions) exceeded the
"Accumulated Benefit Obligation" of such Plan, as determined
for purposes of GAAP, using methods and assumptions required
under GAAP.
(f) The representations set forth in this Paragraph
3 shall survive until the obligations of the parties
hereunder have been fully performed.
4. Pension Plan. (a) At such time following the
Distribution Date as is agreed by FTX and FCX, FTX shall
cause the trustee of the FTX Pension Plan to segregate, in
accordance with the spin-off provisions set forth under
Section 414(l) of the Code and in accordance with the
provisions set forth below, the assets of the FTX Pension
Plan allocable to Transferred Employees (other than Dual
Employees) and shall make any and all filings and
submissions to the appropriate governmental agencies arising
in connection with such segregation of assets and all
necessary amendments to the FTX Pension Plan and related
trust agreement to provide for such segregation of assets
and the transfer of assets as described below. The assets
of the FTX Pension Plan allocable to Transferred Employees
shall be segregated in the form of cash and marketable
securities.
(b) The amount of such assets (the "Transfer
Amount") shall be equal to the Accumulated Benefit
Obligation of Transferred Employees other than Dual
Employees, determined under GAAP in accordance with SFAS 87,
or, if greater, the minimum amount that is necessary to
comply with Section 414(l) of the Code. The Transfer Amount
shall be determined as of a date mutually agreed by FTX and
FCX and shall be increased by appropriate earnings
attributable to the period from the date of such segregation
to the date of transfer described herein and reduced by a
pro rata share of the administrative expenses of the FTX
Pension Plan for such period and any benefit payments made
to Transferred Employees prior to the date of transfer of
the Transfer Amount. FTX shall provide the actuary
designated by FCX with all information necessary to verify
the calculation of the Transfer Amount.
(c) The disposition of the accrued benefits of Dual
Employees under the FTX Pension Plan and the FTX EBP, and
assets of the plan allocable thereto, if any, shall be as
mutually agreed by FTX and FCX.
(d) At such time as is agreed by FTX and FCX, FCX
shall establish or designate the FCX Pension Plan, which
shall be substantially comparable to the FTX Pension Plan,
shall take all necessary action to qualify such Plan under
the applicable provisions of the Code and shall make any and
all filings and submissions to the appropriate governmental
agencies required to be made by it in connection with the
transfer of assets described in this Paragraph 4. As soon
as practicable following the earlier of the receipt of a
favorable determination letter from the Internal Revenue
Service regarding the qualified status of the FCX Pension
Plan as amended to the date of transfer, or the issuance of
indemnities satisfactory to FTX and FCX, FTX shall cause the
trustee of the FTX Pension Plan to transfer the Transfer
Amount to the appropriate trustee designated by FCX under
the trust agreement forming a part of the FCX Pension Plan.
(e) In consideration for the transfer of assets
described herein, FCX shall, or shall cause one of its
subsidiaries to, effective as of the date of transfer
described herein, assume all of the obligations of FTX and
its subsidiaries in respect of benefits accrued by
Transferred Employees under the FTX Pension Plan (exclusive
of benefits paid prior to the date of transfer described
herein) on or prior to the mutually agreed date. Neither
FCX nor any of its affiliates shall assume any other
obligations or liabilities arising under or attributable to
the FTX Pension Plan.
(f) The liabilities of Transferred Employees under
the FTX EBP shall be calculated in accordance with the
methods and procedures specified above with respect to the
qualified pension plan to which the FTX EBP relates. In
consideration of a payment by FTX to FCX of an amount in
cash equal to the present value of such liabilities, FCX
will, or will cause one or more of its subsidiaries to,
assume all such liabilities of Transferred Employees.
5. Individual Account Plan. (a) At such time
following the Distribution Date as is agreed by FTX and FCX,
FTX shall (i) cause the trustee of the FTX Individual
Account Plan to identify the assets of the FTX Individual
Account Plan representing the full account balances of
Transferred Employees (other than Dual Employees) as of a
date mutually agreed by FTX and FCX, (ii) make any and all
filings and submissions to the appropriate governmental
agencies arising in connection with such segregation of
assets and (iii) make all necessary amendments to the FTX
Individual Account Plan and related trust agreement to
provide for such identification of assets and the transfer
of assets as described below. The manner in which the
account balances of Transferred Employees under the FTX
Individual Account Plan are invested shall not be affected
by such identification of assets.
(b) At such time as is agreed by FTX and FCX, FCX
shall establish or designate the FCX Individual Account
Plan, which shall be substantially comparable to the FTX
Individual Account Plan, shall take all necessary action to
qualify such plan under the applicable provisions of the
Code and register such plan under the Securities Act, if
applicable, and shall make any and all filings and
submissions to the appropriate governmental agencies
required to be made by it in connection with the transfer of
assets described in this Paragraph 5. As soon as
practicable following the earlier of the delivery to FTX of
a favorable determination letter from the Internal Revenue
Service regarding the qualified status of the FCX Individual
Account Plan as amended to the date of transfer, or the
issuance of indemnities satisfactory to FTX and FCX, FTX
shall cause the trustee of the FTX Individual Account Plan
to transfer in the form of cash or marketable securities (or
such other form, including participant loans, as may be
agreed by FCX and FTX) the full account balances of
Transferred Employees under the FTX Individual Account Plan
(which account balances will have been credited with
appropriate earnings attributable to the period from the
date of the identification thereof pursuant to Paragraph
5(a) to the date of transfer described herein), reduced by
any necessary benefit or withdrawal payments to or in
respect of Transferred Employees occurring during such
period, to the appropriate trustee as designated by FCX
under the trust agreement forming a part of the FCX
Individual Account Plan.
(c) Unless otherwise agreed by FTX and FCX, and
notwithstanding any other provision of this Paragraph 5 to
the contrary, any portion of such transferred account
balances that is invested in equity securities of either FCX
or FTX shall be transferred in the form of such securities.
After the Effective Date, the FTX Individual Account Plan
shall not be obligated to permit further investment in FCX
equity securities, and the FCX Individual Account Plan shall
not be obligated to permit further investment in FTX equity
securities.
(d) The disposition of the account balances of Dual
Employees under the FTX Individual Account Plan and FTX
SECAP shall be as mutually agreed by FTX and FCX.
(e) In consideration for the transfer of assets
described herein, FCX shall, or shall cause one or more of
its subsidiaries to, effective as of the date of transfer
described herein, assume all of the obligations of FTX and
its subsidiaries in respect of the account balances
accumulated by Transferred Employees under the FTX
Individual Account Plan (exclusive of any portion of such
account balances that are paid or otherwise withdrawn prior
to the date of transfer described herein) on or prior to the
mutually agreed date. Neither FCX nor any of its affiliates
shall assume any other obligations or liabilities arising
under or attributable to the FTX Individual Account Plan.
(f) The account balances of Transferred Employees
in the FTX SECAP will be transferred to FCX or one or more
of its subsidiaries using the same methods and procedures as
are specified above for the qualified plan to which the FTX
SECAP relates. In consideration of a cash payment by FTX to
FCX in an amount equal to such account balances of
Transferred Employees, FCX will, or will cause one or more
of its subsidiaries to, assume liability therefor.
6. Stock Plan Adjustments; Establishment of New
Stock Plans. (a) Effective as of the Effective Date, FCX
shall adopt the Adjusted Stock Award Plan, the Stock Plan,
the SIU Plan and the Directors Plan and shall take all
action necessary in regard to such plans to ensure
compliance with Rule 16b-3, Section 162(m) and the
Securities Act, as applicable and as deemed desirable by
FCX. The Adjusted Stock Award Plan shall be established for
the exclusive purpose of granting the Adjusted FCX Awards as
described in this Paragraph 6.
(b) Each outstanding FTX Award on the Effective
Date shall be converted, in accordance with the procedures
described in this Paragraph 6, into an Adjusted FTX Award
and an Adjusted FCX Award with the same features as such FTX
Award. The number of FCX Shares subject to an Adjusted FCX
Award shall be that number of FCX Shares that a record
holder of the number of FTX Shares underlying the related
FTX Award would have received in the Distribution.
(c) Each Adjusted FCX Award and each Adjusted FTX
Award will have the same remaining duration and other terms
and conditions as the FTX Award from which it was derived;
provided, however, that if an Adjusted FCX Award provides
the holder thereof with a stock option and if the FTX Award
from which such Adjusted FCX Award is derived has a term
that will expire prior to one hundred and eighty days after
the Effective Date, the term of such Adjusted FCX Award
shall expire on the one hundred and eightieth day after the
Effective Date; and further provided, however, that no
Adjusted FCX Award providing the holder thereof with a stock
option shall be exercisable prior to the ninetieth day after
the Effective Date. Without limiting the generality of the
foregoing, if an FTX Award contains a feature providing for
a cash payment upon exercise to defray in whole or in part
income tax obligations arising in connection therewith, then
the resulting Adjusted FCX Award and Adjusted FTX Award will
have such feature, and, if an FTX Award contains "limited
rights", then the resulting Adjusted FCX Award and Adjusted
FTX Award will have "limited rights".
(d) The exercise price of an Adjusted FTX Award
shall be determined by multiplying the exercise price of the
FTX Award from which such Adjusted FTX Award was derived by
a fraction, the numerator of which is the FTX Net
Distribution Value, as defined below, and the denominator of
which is the FTX Distribution Value, as defined below.
(e) The exercise price of an Adjusted FCX Award
shall be determined by multiplying the exercise price of the
FTX Award from which such Adjusted FCX Award was derived by
a fraction, the numerator of which is the FCX Distribution
Value, as defined below, and the denominator of which is the
FTX Distribution Value.
(f) For purposes of the foregoing, the "FCX
Distribution Value" shall be the weighted average when-
issued per share price of the FCX Shares on the New York
Stock Exchange on the first day on which the FCX Shares are
traded on a when-issued basis on the New York Stock
Exchange; the "FTX Distribution Value" shall be the weighted
average per share price of the FTX Shares on the New York
Stock Exchange on such trading day (trading with due bills,
if such date is after the record date of the Distribution)
and the "FTX Net-Distribution Value" shall be (i) the FTX
Distribution Value minus (ii) the product of the
Distribution Ratio, as hereinafter defined, and the FCX
Distribution Value. The "Distribution Ratio" shall mean the
number of FCX Shares distributed in the Distribution per FTX
Share, rounded to the nearest one-millionth (.000001) of an
FCX Share.
7. Deferred Compensation Liabilities. As of the
Transferred Employees' respective Effective Dates, FTX shall
calculate the liability of FTX and its subsidiaries other
than FCX in respect of such Transferred Employees' deferred
compensation, including without limitation deferred awards
under the FTX PIAP, FTX AIP, FTX LTPIP and predecessor
plans, if any. In consideration of a cash payment by FTX to
FCX in an amount equal to such accrued liability, FCX will,
or will cause one or more of its subsidiaries to, assume
such liability in respect of Transferred Employees.
Notwithstanding the foregoing, FTX liability in respect of
Dual Employees will be allocated as agreed by FTX and FCX.
8. Welfare Plans. (a) As of their respective
Effective Dates, subject to the provisions of Paragraph
8(d), Transferred Employees shall cease participation in all
FTX Employee Plans and FTX Benefit Arrangements providing
for health, medical, dental and life insurance or similar
benefits ("welfare plan"). Except as otherwise set forth in
this Agreement, FTX shall retain all obligations and
liabilities under the FTX Employee Plans and FTX Benefit
Arrangements.
(b) FTX's welfare plans shall retain liability for
and shall pay when due all benefits described in Paragraph
8(a) that are attributable to claims incurred prior to a
Transferred Employee's Effective Date by such Transferred
Employees (and his or her eligible dependents). FCX and its
welfare plans shall be liable for and shall pay when due all
such benefits attributable to claims incurred on or after a
Transferred Employee's Effective Date by such Transferred
Employees (and his or her eligible dependents). For such
purpose, unless otherwise agreed by FTX and FCX, a claim is
deemed incurred when the services that are the subject of
the claim are performed, when the death occurs (in the case
of life insurance), as of the date beginning a period of
absence eventually resulting in entitlement to benefits (in
the case of long-term disability benefits) and in the case
of a hospital stay, based on the date any such
hospitalization is initiated.
(c) The group health plans established by FCX for
the benefit of Transferred Employees shall (i) waive any
pre-existing condition limitations, (ii) waive any
eligibility waiting periods and (iii) give effect, in
determining or applying any deductible and maximum out-of-
pocket limitations to claims incurred, amounts paid by, and
amounts reimbursed to, such employees under the group health
plans maintained by FTX for their benefit immediately prior
to the applicable Effective Date.
(d) FCX will give Transferred Employees full credit
for purposes of eligibility, vesting and benefit accrual (as
such purposes may be applicable) under the employee benefit
plans of FCX for such employees' respective service
recognized for such purposes under the corresponding FTX
Employee Plan or FTX Benefit Arrangement.
(e) Notwithstanding any other provision of this
Paragraph 8 to the contrary, the welfare benefits of Dual
Employees after their respective Effective Dates shall be
provided as agreed by FTX and FCX.
(f) FTX and FCX shall provide each other with
copies of such records as are reasonably required to enable
the parties to perform their obligations hereunder.
(g) In respect of the Accumulated Post-Retirement
Benefit Obligation ("APBO") of FTX employees and FCX
employees under SFAS 106, FCX agrees to pay to FTX an amount
in cash equal to the excess, if any, of (i) the decrease in
FCX SFAS 106 APBO liability after the Distribution which is
attributable to the assumption by FTX of SFAS 106 APBO
liability which prior to the Distribution was reflected on
the audited balance sheet of FCX over (ii) the increase in
FCX SFAS 106 APBO liability after the Distribution which is
attributable to the assumption by FCX of SFAS 106 APBO
liability which prior to the Distribution was reflected on
the audited balance sheet of FTX. For purposes of this
Paragraph 8(g), APBO shall be calculated as of employees'
Effective Dates that relate to or coincide with the
termination of the management services agreement referred to
in Paragraph 4 under "Background", above. In the event that
the amount described in clause (ii) of this Paragraph 8(g)
exceeds the amount described in clause (i), FTX agrees to
pay to FCX an amount in cash equal to such excess.
9. Expenses. Each of FCX and FTX shall pay its own
expenses in connection with the performance of its
obligations under this Agreement.
10. Third-Party Beneficiaries. No provision of
this Agreement shall create any third party beneficiary
rights in any Transferred Employee, Retired Employee or any
employee or former employee of FTX (including any
beneficiary or dependent thereof), including any rights in
respect of continued employment or resumed employment, and
no provision of this Agreement shall create any rights in
any such persons in respect of any benefits that may be
provided, directly or indirectly, under any employee benefit
plan or arrangement.
11. Governing Law. This Agreement shall be
governed by and construed in accordance with the internal
laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed as of the date first above
written.
FREEPORT-McMoRan COPPER & GOLD INC.
By: /s/ George A. Mealey
Name: George A. Mealey
Title: President and Chief
Operating Officer
FREEPORT-McMoRan INC.
By: /s/ Rene L. Latiolais
Name: Rene L. Latiolais
Title: President and Chief
Operating Officer
Exhibit
EXECUTION COPY
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
FREEPORT-McMoRan INC.
_______________________
$400,000,000
CREDIT AGREEMENT
Dated as of June 30, 1995
with
CERTAIN BANKS,
CHEMICAL BANK,
as Administrative Agent,
FRP Collateral Agent and
FTX Collateral Agent,
and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
as Documentary Agent
TABLE OF CONTENTS
Page
Parties and Recitals ................................ 1
ARTICLE I
Definitions
Section 1.1. Definitions .......................... 2
Section 1.2. Accounting Terms ..................... 23
Section 1.3. Section, Article, Exhibit and
Schedule References, etc. .......... 23
ARTICLE II
The Loans
Section 2.1. Revolving Credit Facility ............ 24
Section 2.2. Loans ................................ 24
Section 2.3. Notice of Loans ...................... 25
Section 2.4. Promissory Notes ..................... 26
Section 2.5. Interest on Loans .................... 27
Section 2.6. Fees ................................. 28
Section 2.7. Maturity and Reduction of
Commitments ........................ 29
Section 2.8. Interest on Overdue Amounts;
Alternative Rate of Interest ....... 30
Section 2.9. Prepayment of Loans .................. 31
Section 2.10. Continuation and Conversion
of Loans ........................... 32
Section 2.11. Reserve Requirements; Change in
Circumstances ...................... 34
Section 2.12. Change in Legality ................... 38
Section 2.13. Indemnity ............................ 39
Section 2.14. Pro Rata Treatment ................... 39
Section 2.15. Sharing of Setoffs ................... 40
Section 2.16. Payments ............................. 41
Section 2.17. U.S. Taxes ........................... 42
Section 2.18. FTX or Restricted Subsidiary as
General Partner .................... 45
ARTICLE III
Representations and Warranties
Section 3.1. Representations and Warranties........ 46
(a) Organization, Powers ............ 46
(b) Authorization ................... 46
(c) Governmental Approvals ........... 47
(d) Enforceability .................. 47
(e) Financial Statements ............ 47
(f) Litigation; Compliance with
Laws; etc. .................... 48
(g) Title, etc. ..................... 49
(h) Federal Reserve Regulations;
Use of Proceeds ............... 49
(i) Taxes ........................... 50
(j) Employee Benefit Plans .......... 51
(k) Investment Company Act .......... 51
(l) Public Utility Holding Company
Act ........................... 51
(m) Subsidiaries .................... 51
(n) Environmental Matters............ 52
(o) Security Documents .............. 53
(p) No Material Misstatements ....... 54
ARTICLE IVC
Conditions to Initial Credit Event . . . . . . . 54
ARTICLE V
Covenants
Section 5.1. Affirmative Covenants of the
Borrowers ......................... 58
(a) Financial Statements, etc. ...... 58
(b) Taxes and Claims ................ 60
(c) Maintenance of Existence;
Conduct of Business ........... 60
(d) Compliance with Applicable Laws . 60
(e) Litigation ...................... 60
(f) ERISA ........................... 61
(g) Compliance with Environmental
Laws .......................... 61
(h) Preparation of Environmental
Reports ....................... 61
(i) Insurance ....................... 62
(j) Access to Premises and Records .. 62
(k) Further Assurances .............. 62
(l) Covenants regarding FRP ......... 63
Section 5.2. Negative Covenants of the Borrower ... 63
(a) Conflicting Agreements .......... 63
(b) Hedge Transactions .............. 63
(c) Consolidation or Merger;
Disposition of Assets and
Capital Stock ................. 64
(d) Liens ........................... 65
(e) Current Ratio ................... 68
(f) EBITDA Ratio .................... 68
(g) Debt ............................ 68
(h) Debt to Capital Ratio ........... 70
(i) Subordinated Debt Payments ...... 70
(j) Ownership of Subsidiaries ....... 70
(k) Fiscal Year ..................... 70
(l) Investments in Nonrestricted
Subsidiaries and Persons Not
Subsidiaries................... 70
(m) Federal Reserve Regulations ..... 71
(n) Certain Debt Agreements ......... 72
(o) FRP Transfers ................... 72
(p) Transactions with Affiliates .... 72
(q) Equity Payments ................. 73
(r) Covenants Regarding IMC-Agrico .. 73
(s) Scope of FRP's Business ......... 73
(t) Covenants Relating to RTZ
Transaction ................... 74
ARTICLE VI
Conditions to Credit Events
Section 6.1. Conditions Precedent to Each Credit
Event ............................... 75
Section 6.2. Representations and Warranties with
Respect to Credit Events ............ 76
ARTICLE VII
Events of Default
Section 7.1. Events of Default .................... 76
ARTICLE VIII
The Agents
Section 8.1. The Agents ............................ 80
ARTICLE IX
Miscellaneous
Section 9.1. Notices ............................. 85
Section 9.2. Survival of Agreement ............... 85
Section 9.3. Successors and Assigns;
Participations; Purchasing
Banks ............................. 85
Section 9.4. Expenses of the Banks; Indemnity .... 90
Section 9.5. Right of Setoff ..................... 92
Section 9.6. Applicable Law ...................... 93
Section 9.7. Waivers; Amendments ................. 93
Section 9.8. Severability ........................ 94
Section 9.9. Counterparts ........................ 95
Section 9.10. Headings ............................ 95
Section 9.11. Entire Agreement .................... 95
Section 9.12. Waiver of Jury Trial, etc. .......... 95
Section 9.13. Interest Rate Limitation ............ 96
Section 9.14. Jurisdiction; Consent to Service of
Process ........................... 96
Section 9.15. Confidentiality ...................... 97
Schedule I Applicable Margin for Loans and
Commitment Fees
Schedule II Commitments of the Banks
Schedule III Subsidiaries
Schedule IV Governmental Approvals
Schedule V Main Pass Properties
Schedule VI UCC Filing Offices
Schedule VII FM Properties Debt
Schedule VIII Deemed Leases
Schedule IX Ownership Schedule for IMC-Agrico
Schedule X Form of Subordination Terms
Schedule XI Summary Description of Restructuring
and RTZ Transaction
Exhibit A Form of Promissory Note
Exhibit B Form of Borrowing Notice
Exhibit C Form of Administrative
Questionnaire
Exhibit D Form of Commitment Transfer
Supplement
Exhibit E Form of FRP Security Agreement and
Mortgage
Exhibit F Form of FTX Security Agreement
Exhibit G Form of Second Amendment and
Restatement of FTX Intercreditor
Agreement
Exhibit H Form of Opinion of the General
Counsel of FTX
Exhibit I Form of Opinion of Davis
Polk & Wardwell
Exhibit J Form of Opinion of
Liskow & Lewis
Exhibit K Form of Opinion of Richards, Layton &
Finger
CREDIT AGREEMENT dated as of June 30,
1995, among FREEPORT-McMoRan RESOURCE
PARTNERS, LIMITED PARTNERSHIP, a Delaware
limited partnership ("FRP"), FREEPORT-McMoRan
INC., a Delaware corporation ("FTX"; FTX and
FRP being the "Borrowers"), the undersigned
financial institutions (collectively, the
"Banks"), CHEMICAL BANK, a New York banking
corporation ("Chemical"), as administrative
agent for the Banks (in such capacity, the
"Administrative Agent"), as collateral agent
for the Banks (in such capacity, the "FRP
Collateral Agent") under the FRP Security
Agreement (as defined below) and as
collateral agent for the Banks and certain
other lenders (in such capacity, the "FTX
Collateral Agent") under the FTX Security
Agreement (as defined below), and THE CHASE
MANHATTAN BANK (NATIONAL ASSOCIATION), a
national banking association ("Chase"), as
documentary agent for the Banks (in such
capacity, the "Documentary Agent"; the
Administrative Agent, the FRP Collateral
Agent, the FTX Collateral Agent and the
Documentary Agent being, collectively, the
"Agents").
FRP and FTX have requested the Banks to extend
credit on a secured basis to FRP and FTX in order to enable
them to borrow on a revolving credit basis at any time and
from time to time prior to the Maturity Date (as herein
defined). The aggregate principal amount of all revolving
credit loans at any time outstanding hereunder shall not
exceed $400,000,000; provided that the aggregate principal
amount of all revolving credit loans to FTX at any time
outstanding shall not exceed $75,000,000. The proceeds of
such borrowings are to be used to refinance outstanding
borrowings under the existing $800,000,000 Amended and
Restated Credit Agreement dated as of June 1, 1993, among
FTX, FRP, certain banks and Chemical, as agent for such
banks (the "Existing Credit Agreement"), and for corporate
purposes of the Borrowers but may not be used to prepay
subordinated debt of the Borrowers.
The Banks are willing to make secured loans to FRP
and to FTX upon the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises
and of the mutual covenants herein contained, the parties
hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions. As used in this
Agreement, the following terms have the meanings indicated
(any term defined in this Article I or elsewhere in this
Agreement in the singular and used in this Agreement in the
plural shall include the plural, and vice versa):
"Administrative Questionnaire" means an
Administrative Questionnaire in the form of Exhibit C.
"Affiliate" means, when used with respect to a
specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or
is Controlled by or is under common Control with the Person
specified.
"Agrico LP" means Agrico, Limited Partnership, a
Delaware limited partnership between FTX (as successor by
liquidation to Freeport Chemical Company), as general
partner, and FRP, as limited partner.
"Alternate Base Rate" means for any day, a rate
per annum (rounded upwards, if not already a whole multiple
of 1/100 of 1%, to the next higher 1/100 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day,
(b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect for such day
plus 1/2 of 1%. For purposes hereof, the term "Prime Rate"
means the rate of interest per annum publicly announced from
time to time by Chemical as its prime rate in effect at its
principal office in the City of New York; each change in the
Prime Rate shall be effective on the date such change is
publicly announced as being effective. "Base CD Rate" means
the sum of (x) the product of (i) the Three-Month Secondary
CD Rate and (ii) Statutory Reserves and (y) the Assessment
Rate. "Three-Month Secondary CD Rate" means, for any day,
the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such
day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published
in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-
month certificates of deposit of major money center banks in
New York City received at approximately 10:00 a.m., New York
City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing
selected by it. "Federal Funds Effective Rate" means, for
any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for the day of such transactions received
by the Administrative Agent from three Federal funds brokers
of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error)
that it is unable to ascertain the Base CD Rate or the
Federal Funds Effective Rate or both for any reason,
including the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined
without regard to clause (b) or (c), or both, of the first
sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist.
Any change in the Alternate Base Rate due to a change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal
Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"Applicable LIBO Rate" means on a per annum basis,
in respect of any LIBO Rate Loan, for each day during the
Interest Period for such Loan, the sum of (i) the LIBO Rate
as determined by the Administrative Agent plus (ii) the
Applicable Margin.
"Applicable Margin" means, with respect to any
LIBO Rate Loan or Reference Rate Loan, or with respect to
the Commitment Fees, as the case may be, the applicable
percentage for the relevant Borrower set forth on Schedule I
hereto under the caption "LIBOR Spread", "ABR Spread" or
"Fee Percentage", as the case may be, based upon the ratings
by S&P and Moody's, respectively, applicable on such date to
the Index Debt. For purposes of the foregoing, (i) if
either Moody's or S&P shall not have in effect a rating for
the Index Debt (other than by reason of the circumstances
referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a
rating of BB-/Ba3, unless such rating agency shall have in
effect a rating for senior subordinated unsecured, non-
credit enhanced, long-term indebtedness for borrowed money
of FRP, in which case such rating, increased by two
categories, shall be used as the Index Debt rating of such
rating agency so long as such rating agency has in effect
such a rating and does not have in effect a rating for Index
Debt; (ii) if the ratings established or deemed to have been
established by Moody's and S&P for the Index Debt shall fall
within different categories, the Applicable Margin shall be
based on the lower of the two ratings unless either of the
two ratings qualifies as "investment grade", in which case
the higher of the two ratings will apply; and (iii) if the
ratings established or deemed to have been established by
Moody's and S&P for the Index Debt shall be changed (other
than as a result of a change in the rating system of Moody's
or S&P), such change shall be effective as of the date on
which it is first announced by the applicable rating agency.
Each change in the Applicable Margin shall apply during the
period commencing on the effective date of such change and
ending on the date immediately preceding the effective date
of the next such change. If the rating system of Moody's or
S&P shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt
obligations, the Borrowers and the Banks shall negotiate in
good faith to amend this definition to reflect such changed
rating system or the non-availability of ratings from such
rating agency and, pending the effectiveness of any such
amendment, the Applicable Margin shall be determined by
reference to the rating most recently in effect prior to
such change or cessation.
"Applicable Percentage" of any Bank means the
percentage set opposite such Bank's name on Schedule II
hereto, as modified from time to time as provided hereby.
"Applicable Reference Rate" means on a per annum
basis in respect of any Reference Rate Loan, for any day,
the sum of the Alternate Base Rate plus the Applicable
Margin.
"Assessment Rate" means, with respect to each day
during an Interest Period, the annual rate (rounded upwards,
if not already a whole multiple of 1/100 of l%, to the next
highest whole multiple of 1/100 of 1%) most recently
estimated by the Administrative Agent as the then current
net annual assessment rate that will be employed in
determining amounts payable by Chemical to the Federal
Deposit Insurance Corporation or any successor ("FDIC") for
the FDIC's insuring time deposits made in Dollars at offices
of Chemical in the United States.
"Bank" means each bank signatory hereto and its
successors and permitted assigns under Section 9.3.
"Board" means the Board of Governors of the
Federal Reserve System of the United States.
"Borrowers" means FRP and FTX.
"Borrowing Date" means, with respect to any Loan,
the date on which such Loan is disbursed.
"Business Day" means any day other than a
Saturday, Sunday or a day on which banks in New York City
are authorized or required by law to close; provided,
however, that when used in connection with a LIBO Rate Loan,
the term "Business Day" shall also exclude any day on which
banks are not open for dealings in Dollar deposits in the
London interbank market.
"Capitalized Lease Obligation" means the
obligation of any Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
real and/or personal property which obligation is, or in
accordance with GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting
Standards Board) is required to be, classified and accounted
for as a capital lease on a balance sheet of such Person
under GAAP, and for purposes of this Agreement the amount of
such obligation shall be the capitalized amount thereof
determined in accordance with GAAP.
A "Change in Control" shall be deemed to have
occurred if (a) any Person or group (within the meaning of
Rule 13d-5 of the SEC as in effect on the date hereof) shall
own directly or indirectly, beneficially or of record,
shares representing 30% or more of the aggregate ordinary
voting power represented by the issued and outstanding
capital stock of FTX; or (b) a majority of the seats (other
than vacant seats) on the board of directors of FTX shall at
any time be occupied by Persons who were not (i) members of
the board of directors of FTX on the Closing Date,
(ii) appointed as, or nominated for election as, directors
by a majority of the directors who are (x) referred to in
clause (i) and (y) other directors who are appointed or
nominated in accordance with this clause (ii) or
(iii) nominated or appointed by RTZ, RTZ Indonesia or any
Affiliate of either thereof pursuant to its participation in
the Restructuring as contemplated by the Letter Agreement
dated as of March 7, 1995, between RTZ America and FTX and
FCX and the Stock Purchase Agreement.
"Circle C Agreement" means the Credit Agreement
dated as of February 6, 1992, as amended, by and between
Circle C Land Corp. and TCB.
"Closing Date" means the date of execution and
delivery of this Agreement and the Promissory Notes.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral Agents" mean the FRP Collateral Agent
and the FTX Collateral Agent.
"Commitment" means, with respect to each Bank, the
Commitment of such Bank hereunder to make revolving loans as
set forth on Schedule II hereto, or in the Commitment
Transfer Supplement pursuant to which such Bank assumed its
Commitment, as the same may be permanently terminated or
reduced from time to time pursuant to Section 2.7 and
pursuant to assignments by such Bank pursuant to
Section 9.3. The Commitment of each Bank shall
automatically and permanently terminate on the Maturity
Date.
"Commitment Fee" has the meaning assigned to such
term in Section 2.6(a).
"Commitment Termination Date" has the meaning
assigned to such term in Section 2.6(a).
"Commitment Transfer Supplement" means a
Commitment Transfer Supplement entered into by a Bank and an
assignee, and accepted by the Administrative Agent, in the
form of Exhibit D or such other form as shall be approved by
the Administrative Agent.
"Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Credit Event" means the making of a Loan.
"Debt" of any Person means, without duplication,
(a) all obligations of such Person for borrowed money,
(b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all
obligations of such Person for the unearned balance of any
payment received under any contract outstanding for 180
days, (d) all obligations of such Person under conditional
sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all
obligations of such Person issued or assumed as the deferred
purchase price of property or services (excluding (x) the
Pennzoil Obligations, (y) the up to $10,000,000 conditional
payment of FRP to Fertiberia due in 1998 to the extent not
reflected as a liability on FRP's balance sheet under GAAP
and (z) trade accounts payable and accrued obligations
incurred in the ordinary course of business so long as the
same are not 180 days overdue or, if overdue, are being
contested in good faith and by appropriate proceedings), (f)
all Debt of others secured by (or for which the holder of
such Debt has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by
such Person, whether or not the obligations secured thereby
have been assumed, (g) all Guarantees by such Person of Debt
of others, (h) all Capitalized Lease Obligations of such
Person, (i) all recourse obligations of such Person with
respect to sales of accounts receivable which would be shown
under GAAP on the balance sheet of such Person as a
liability, (j) all obligations of such Person as an account
party (including reimbursement obligations to the issuer of
a letter of credit) in respect of bankers' acceptances and
letters of credit Guaranteeing Debt and (k) all non-
contingent obligations of such Person as an account party
(including reimbursement obligations to the issuer of a
letter of credit) in respect of letters of credit other than
those referred to in clause (j) above. The Debt of any
Person shall include the Debt of any partnership in which
such Person is a general partner but shall exclude
obligations under leases which are characterized as
Operating Leases.
"Debt to Capital Ratio" means at the end of any
fiscal quarter, the ratio, expressed as a percentage, of the
aggregate principal amount of total consolidated Debt
outstanding of FRP (excluding working capital Debt of
IMC-Agrico in a principal amount not to exceed $75,000,000
multiplied by FRP's percentage capital interest in
IMC-Agrico) to FRP Capitalization.
"Deemed Lease" means an agreement characterized by
the parties thereto as a lease solely for income tax
purposes and as to which such parties have elected to have
the provisions of the former Section 168(f)(8) of the
Internal Revenue Code of 1954 apply.
"Default" means any event or condition which upon
the giving of notice or lapse of time or both would become
an Event of Default.
"Dollars" or "$" means United States Dollars.
"Domestic Office" means, for any Bank, the
Domestic Office set forth for such Bank on the signature
pages hereof, unless such Bank shall designate a different
Domestic Office by notice in writing to the Administrative
Agent and the Borrowers.
"EBITDA" means, for any fiscal quarter, the sum of
(a) FRP's consolidated net income (loss) (before deducting
minority interests in net income (loss) of consolidated
subsidiaries, but disregarding all extraordinary or unusual
noncash items in calculating such net income);
(b) consolidated interest paid or accrued on the Loans to
FRP and on other consolidated Debt of FRP during such
quarter and deducted in determining FRP's consolidated net
income; (c) FRP's consolidated depreciation, depletion and
amortization charges deducted in computing FRP's
consolidated net income; and (d) excess cash distributions
as reflected in FRP's statement of cash flows received by
FRP from IMC-Agrico; provided that such calculations of
items (a) through (c) will exclude items relating to
Nonrestricted Subsidiaries.
"EBITDA Ratio" means at the end of any fiscal
quarter, the cumulative sum, for the four consecutive fiscal
quarters ending with such quarter, of (a) FRP's EBITDA to
(b) interest expense and capitalized interest paid or
accrued on consolidated Debt of FRP including the Loans and
the proportional consolidation of the outstanding Debt of
IMC-Agrico, during such period.
"environment" shall mean ambient air, surface
water and groundwater (including potable water, navigable
water and wetlands), the land surface or subsurface strata
or as otherwise defined in any Environmental Law.
"Environmental Claim" means any written notice of
violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any
Governmental Authority or any Person for damages, injunctive
or equitable relief, personal injury (including sickness,
disease or death), Remedial Action costs, tangible or
intangible property damage, natural resource damages,
nuisance, pollution, any adverse effect on the environment
caused by any Hazardous Material, or for fines, penalties or
restrictions, resulting from or based upon: (a) the
existence, or the continuation of the existence, of a
Release (including sudden or non-sudden, accidental or non-
accidental Releases); (b) exposure to any Hazardous
Material; (c) the presence, use, handling, transportation,
storage, treatment or disposal of any Hazardous Material; or
(d) the violation of any Environmental Law or Environmental
Permit.
"Environmental Law" means any and all applicable
treaties, laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural
resources, the management, Release or threatened Release of
any Hazardous Material or to health and safety matters,
including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986,
42 U.S.C. Section 9601 et seq. (collectively "CERCLA"), the
Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and
Solid Amendments of 1984, 42 U.S.C. Section 6901 et seq.,
the Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1977, 33 U.S.C. Section 1251 et seq., the
Clean Air Act of 1970, as amended 42 U.S.C. Section 7401 et
seq., the Toxic Substances Control Act of 1976, 15 U.S.C.
Section 2601 et seq., the Occupational Safety and Health Act
of 1970, as amended, 29 U.S.C. Section 651 et seq., the
Emergency Planning and Community Right-to-Know Act of 1986,
42 U.S.C. Section 11001 et seq., the Safe Drinking Water Act
of 1974, as amended, 42 U.S.C. Section 300(f) et seq., the
Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq., and any similar or implementing state
or local law, and all amendments or regulations promulgated
thereunder.
"Environmental Permit" means any permit, approval,
authorization, certificate, license, variance, filing or
permission required by or from any Governmental Authority
pursuant to any Environmental Law.
"Equity Payment" means (i) any dividend or
distribution on, or purchase, redemption or other payment in
respect of, the capital stock of FTX or the partnership
units of FRP, whether in cash or in kind, and (ii) open
market purchases by FTX or any Restricted Subsidiaries of
Depositary Units of FRP (as defined in FRP Partnership
Agreement).
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business
(whether or not incorporated), that together with a
Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated
as a single employer under Section 414 of the Code.
"ERISA Event" means (i) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued
thereunder, with respect to a Plan; (ii) the adoption of any
amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code; (iii)
the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code),
whether or not waived; (iv) the incurrence of any liability
under Title IV of ERISA with respect to any Plan or
Multiemployer Plan, other than any liability for
contributions not yet due or payment of premiums not yet
due; (v) the receipt by a Borrower or any ERISA Affiliate
from the PBGC of any notice relating to the intention of the
PBGC to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (vi) the receipt by a Borrower or
any ERISA Affiliate of any notice concerning the imposition
of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; and
(vii) any other similar event or condition with respect to a
Plan or Multiemployer Plan that could reasonably result in
liability of a Borrower.
"Event of Default" means any Event of Default
defined in Article VII.
"FCX" means Freeport-McMoRan Copper & Gold Inc., a
Delaware corporation.
"FI" means P.T. Freeport Indonesia Company, a
limited liability company organized under the laws of
Indonesia and domesticated in Delaware.
"Financial Officer" of any corporation means the
principal financial officer, principal accounting officer,
treasurer, assistant treasurer or controller of such
corporation.
"FM Credit Agreement" means the Credit Agreement
dated as of June 30, 1995, among FM Properties, FTX, FCX,
the banks party thereto, Chemical, as Administrative Agent
and as FM Collateral Agent, and Chase, as Documentary Agent,
as the same may be amended or replaced from time to time.
"FM Properties" means FM Properties Operating Co.,
a Delaware general partnership whose partners are FTX and FM
Properties Inc.
"FM Properties Indebtedness" means the obligations
of FM Properties under the FM Credit Agreement and the
obligations of FM Properties listed on Schedule VII hereto.
"FRP Capitalization" means the sum, as of the end
of any fiscal quarter, of the aggregate principal amount of
the total consolidated Debt outstanding of FRP (excluding
working capital Debt of IMC-Agrico in a principal amount not
to exceed $75,000,000 multiplied by FRP's percentage capital
interest in IMC-Agrico) plus consolidated partners' capital
(excluding the effect of non-cash unusual or extraordinary
charges after December 31, 1994, on such partners' capital)
of FRP.
"FRP Collateral Agent" means Chemical in its
capacity as Collateral Agent for the Banks under the FRP
Security Agreement.
"FRP Partner" means Agrico LP or another
Restricted Subsidiary of FRP which has the rights and
obligations of FRP Partner as defined in and contemplated by
the IMC-Agrico Partnership Agreement.
"FRP Partnership Agreement" means the Amended and
Restated Agreement of Limited Partnership of Freeport-
McMoRan Resource Partners, Limited Partnership, dated as of
May 29, 1987 among FRP, FTX and FMRP Inc., as amended.
"FRP Security Agreement" means the security
agreement and mortgage in the form of Exhibit E, executed by
FRP and delivered to the FRP Collateral Agent pursuant to
Section 4.1(h), as such agreement may be amended and in
effect from time to time.
"FTX Collateral Agent" means Chemical in its
capacity as Collateral Agent for the Lenders (as defined in
the FTX Intercreditor Agreement) under the FTX Intercreditor
Agreement and the FTX Security Agreement.
"FTX Guaranty Agreement" means the Guaranty
Agreement dated as of July 17, 1995, pursuant to which FTX
guarantees a portion of the FM Properties Indebtedness.
"FTX Intercreditor Agreement" means the
Intercreditor Agreement entered into as of June 11, 1992, as
amended and restated in its entirety as of June 1, 1993, and
as of the Funding Date in the form attached hereto as
Exhibit G, among the Administrative Agent on behalf of the
Banks, the FM Agent on behalf of the FM Lenders, Hibernia
National Bank as agent for the Pel-Tex Lenders (each as
defined therein), TCB and Chemical, as FTX Collateral Agent,
as such agreement may be further amended and in effect from
time to time.
"FTX Security Agreement" means the security
agreement in the form of Exhibit F, executed by FTX and
delivered to the FTX Collateral Agent pursuant to
Section 4.1(g), as such agreement may be amended and in
effect from time to time.
"Funding Date" means the first date on which the
conditions to borrowing set forth in Articles IV and VI have
been satisfied.
"GAAP" has the meaning assigned to such term in
Section 1.2.
"Governmental Authority" means any Federal, state,
local or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Governmental Rule" means any statute, law,
treaty, rule, code, ordinance, regulation, permit,
certificate or order of any Governmental Authority or any
judgment, decree, injunction, writ, order or like action of
any court, arbitrator or other judicial or quasijudicial
tribunal.
"Guarantee" means, with respect to any Person, any
obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing
any Debt or obligation of any other Person in any manner,
whether directly or indirectly, and including, without
limitation, any agreement or obligation (i) to pay dividends
or other distributions upon the stock of such other Person,
or any obligation of such other Person, direct or indirect,
(ii) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or obligation or to
purchase (or advance or supply funds for the purchase of)
any security for the payment of such Debt, obligation,
dividend or distribution, (iii) to purchase or lease
property, securities or services for the purpose of assuring
the owner of such Debt or obligation or the holder of such
stock of the payment of such Debt, obligation, dividend or
distribution including, without limitation, any take-or-pay
contract or agreement to buy a minimum amount or quantity of
production or to provide an operating subsidy which, in each
case, is utilized for a third party financing, or (iv) to
maintain working capital, equity capital or any other
financial statement condition of the primary obligor, so as
to enable the primary obligor to pay such Debt, obligation,
dividend or distribution; provided, however, that the term
Guarantee shall not include any endorsement for collection
or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or
radioactive substances or wastes, hazardous or toxic
substances or wastes, pollutants, solid, liquid or gaseous
wastes, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated
biphenyls ("PCBs") or PCB-containing materials or equipment,
radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedge Agreement" means any interest rate,
currency or commodity swap, cap, floor or collar agreement
or similar hedging arrangement providing for the transfer or
mitigation of interest rate, commodity price or currency
value or exchange rate risks, either generally or under
specific contingencies.
"IMC" means IMC Global Operations Inc., a Delaware
corporation.
"IMC-Agrico" means the general partnership formed
pursuant to the IMC-Agrico Partnership Agreement.
"IMC Partner" means the Subsidiary of IMC that has
the rights and obligations of IMC GPCo as defined in and
contemplated by the IMC-Agrico Partnership Agreement.
"IMC-Agrico Partnership Agreement" means the
Amended and Restated Partnership Agreement dated as of
July 1, 1993, as further amended and restated as of May 26,
1995, by and among Agrico LP, a Delaware limited
partnership, IMC-Agrico GP Company, a Delaware corporation,
and IMC-Agrico MP Inc., a Delaware corporation, as amended
and in effect from time to time as permitted by
Section 5.2(r).
"Index Debt" means the senior, unsecured, non-
credit enhanced, long-term indebtedness for borrowed money
of FRP.
"Interest Payment Date" means (i) as to any
Reference Rate Loan, the next succeeding March 31, June 30,
September 30 or December 31 (subject to Section 2.16), or if
earlier, the Maturity Date, and (ii) as to any LIBO Rate
Loan, the last day of the Interest Period applicable to such
Loan (and, in the case of any Interest Period of more than
three months' duration, the date that would be the last day
of such Interest Period if such Interest Period were of
three months' duration) and the date of any continuation or
conversion of such Loan as or into a Loan of the same or a
different type.
"Interest Period" means (i) as to any LIBO Rate
Loan, the period commencing on the date of such LIBO Rate
Loan or on the last day of the immediately preceding
Interest Period applicable to such Loan, as the case may be,
and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day)
in the calendar month that is 1, 2, 3 or 6 months
thereafter, as the applicable Borrower may elect, and
(ii) as to any Reference Rate Loan, the period commencing on
the date of such Reference Rate Loan or on the last day of
the immediately preceding Interest Period applicable to such
Loan, as the case may be, and ending on the earliest of
(x) the next succeeding March 31, June 30, September 30 or
December 31, (y) the Maturity Date and (z) the date such
Loan is prepaid or converted as permitted hereby; provided,
however, that (1) if any Interest Period would end on a day
that shall not be a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless, with
respect to LIBO Rate Loans only, such next succeeding
Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding
Business Day, (2) no Interest Period with respect to any
Loan shall end later than the Maturity Date and (3) interest
shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest
Period.
"LIBO Rate" means, with respect to any LIBO Rate
Loan for any Interest Period, an interest rate per annum
(rounded upwards, if not already a whole multiple of 1/100
of 1%, to the next higher 1/100 of 1%) equal to the
arithmetic average of the respective rates per annum at
which Dollar deposits approximately equal in principal
amount to the Reference Banks' portions of such LIBO Rate
Loan and for a maturity equal to the applicable Interest
Period are offered in immediately available funds to the
principal London offices of the Reference Banks in the
London Interbank Market at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such
Interest Period.
"LIBO Rate Loan" means any Loan for which interest
is determined, in accordance with the provisions hereof, at
the Applicable LIBO Rate.
"LIBOR Office" means, for any Bank, the LIBOR
Office set forth for such Bank on the signature pages hereof
or as otherwise notified in writing to the Administrative
Agent and the Borrowers, unless such Bank shall designate a
different LIBOR Office by notice in writing to the
Administrative Agent and the Borrowers.
"Lien" means with respect to any asset, (a) a
mortgage, deed of trust, lien, pledge, encumbrance, charge
or security interest in or on such asset, (b) the interest
of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement
relating to such asset, (c) in the case of securities, any
purchase option, call or similar right of a third party with
respect to such securities (except for any purchase option,
call or similar right under the FRP Partnership Agreement as
in effect on the Closing Date or as modified from time to
time with the consent of the Required Banks) and (d) other
encumbrances of any kind, including, without limitation,
production payment obligations.
"Loan" means any loan made pursuant to
Section 2.1.
"Loan Documents" means this Agreement, the
Promissory Notes, the FTX Intercreditor Agreement, the
Security Agreements and all other agreements, certificates
and instruments now or hereafter entered into in connection
with any of the foregoing, in each case as amended and
modified from time to time.
"Loan Exposure" means the aggregate amount of
unpaid principal of all Loans made by the Banks.
"Main Pass" means FRP's interest in the Joint
Operating Agreement dated May 1, 1988, among FRP, Homestake
Sulphur Company and IMC Global Operations Inc., and the
Joint Operating Agreement dated June 5, 1990, among FRP,
Homestake Sulphur Company and IMC Global Operations Inc.,
and all rights and interests arising therefrom or in
connection therewith and all FRP's right, title and interest
to the leases, properties and assets subject to such Joint
Operating Agreements, including those listed on Schedule V
hereto.
"Margin Stock" has the meaning assigned to such
term in Regulation U.
"Material Adverse Effect" means (a) a materially
adverse effect on the business, assets, operations,
prospects or condition, financial or otherwise, of a
Borrower and its Subsidiaries taken as a whole, (b) material
impairment of the ability of a Borrower or any of its
Subsidiaries to perform any of its obligations under any
Loan Document to which it is or will be a party or
(c) material impairment of the rights of or benefits
available to the Banks under any Loan Document.
"Maturity Date" means the fifth anniversary of the
Closing Date, or, if earlier, the date of termination of the
Commitments pursuant to the terms hereof.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which a Borrower
or any ERISA Affiliate is making or accruing an obligation
to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make
contributions.
"Net Proceeds" means (i) the gross fair market
value of the consideration or other amounts payable to or
receivable by FRP, any of its Restricted Subsidiaries or
IMC-Agrico in respect of any sales, transfers, distributions
or other dispositions (including by merger or consolidation)
of assets or properties (including any capital or other
equity interests owned), less (ii) the amount, if any, of
all taxes (but only to the extent such Person reasonably
estimates that such taxes will be paid on the date of the
next tax filing by such Person or such affiliate of such
Person), and reasonable and customary fees, commissions,
costs and other expenses (other than those payable to FRP,
any of its Restricted Subsidiaries or IMC-Agrico) which are
incurred in connection with such sales, transfers,
distributions or other dispositions and are payable by the
seller or the transferor of the assets or property to which
such sales, transfers, distributions or other dispositions
relate, but only to the extent not already deducted in
arriving at the amount referred to in clause (i), and less
(iii) amounts used within 120 days from the date of closing
or effectiveness of the original transaction in question by
the seller or transferor to purchase other assets used in
the business of it and its Wholly-Owned Restricted
Subsidiaries and not pledged or encumbered to any other
Person.
"1994 Form l0-K" has the meaning assigned to such
term in Section 3.1(e).
"Nonrestricted Subsidiary" means (i) any of the
Subsidiaries listed on Schedule III hereto as a
Nonrestricted Subsidiary, (ii) any Subsidiary of any
Nonrestricted Subsidiary and (iii) any surviving corporation
(other than a Borrower or a Restricted Subsidiary) into
which any of such corporations referred to in clause (i) or
(ii) is merged or consolidated, subject to Section 5.2(c),
and (iv) any Subsidiary organized after the date of this
Agreement for the purpose of acquiring the stock or assets
of another Person or for start-up ventures or exploration
programs or activities and designated as a Nonrestricted
Subsidiary by FTX as of the time of its organization. By
written notice to the Administrative Agent, FTX may
(x) declare any Nonrestricted Subsidiary to be a Restricted
Subsidiary and such former Nonrestricted Subsidiary shall
thereafter be deemed to be a Restricted Subsidiary for all
purposes of this Agreement or (y) at any time other than
when a Default or Event of Default has occurred and is
continuing or would exist after giving effect to such
declaration, in any fiscal year, declare one or more
Restricted Subsidiaries, the interest of FTX in all of which
has an equity value or loan investment of less than
$5,000,000 in the aggregate, to be a Nonrestricted
Subsidiary and any such former Restricted Subsidiary shall
thereafter be deemed to be a Nonrestricted Subsidiary for
all purposes of this Agreement.
"Operating Lease" means any lease other than a
lease giving rise to a Capitalized Lease Obligation.
"PBGC" means the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.
"Pennzoil Obligations" means the deferred purchase
price obligations incurred by FRP in connection with the
purchase from Pennzoil Company of the Culberson mining
operations and associated physical assets.
"Permitted Investments" means customary portfolio
cash management investments made pursuant to prudent cash
management practices.
"Permitted Secured Swap" means any Hedge Agreement
between FTX or FRP and any Bank or its affiliates that shall
be ratably secured pursuant to the FTX Security Agreement or
the FRP Security Agreement, as applicable.
"Person" means any natural person, corporation,
partnership, joint venture, trust, incorporated or
unincorporated association, joint stock company, government
(or an agency or political subdivision thereof) or other
entity of any kind.
"Plan" means any employee pension benefit plan
(other than a Multiemployer Plan) which is subject to the
provisions of Title IV of ERISA or Section 412 of the Code
and in respect of which a Borrower or any ERISA Affiliate is
(or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Promissory Notes" means the promissory notes of
each Borrower referred to in Section 2.4.
"Properties" has the meaning assigned such term in
Section 3.1(n)(1).
"Reference Banks" means Chemical and Chase.
"Reference Rate Loan" means any Loan for which
interest is determined, in accordance with the provisions
hereof, at the Applicable Reference Rate.
"Register" has the meaning assigned such term in
Section 9.3(d).
"Regulation D" means Regulation D of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation G" means Regulation G of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Release" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, disposing, depositing,
dispersing, emanating or migrating of any Hazardous Material
in, into, onto or through the environment.
"Remedial Action" means (a) "remedial action" as
such term is defined in CERCLA, 42 U.S.C. Section 9601(24),
and (b) all other actions required by any Governmental
Authority or voluntarily undertaken to: (i) cleanup,
remove, treat, abate or in any other way address any
Hazardous Material in the environment; (ii) prevent the
Release or threat of Release, or minimize the further
Release of any Hazardous Material so it does not migrate or
endanger or threaten to endanger public health, welfare or
the environment; or (iii) perform studies and investigations
in connection with, or as a precondition to, (i) or (ii)
above.
"Required Banks" means, subject to Section 9.7(b),
at any time Banks having Commitments representing at least
66-2/3% of the aggregate Commitments hereunder or, if the
Commitments have been terminated, Banks holding Loans
representing at least 66-2/3% of the aggregate principal
amount of the Loans.
"Responsible Officer" of any corporation means any
executive officer or Financial Officer of such corporation
and any other officer or similar official thereof
responsible for the administration of the obligations of
such corporation in respect of this Agreement.
"Restricted Subsidiary" means any Subsidiary that
is not a Nonrestricted Subsidiary; provided, however, that
any Person through which FRP owns any interest in IMC-Agrico
shall at all times be a Restricted Subsidiary.
"Restructuring" means the transactions between FTX
and FCX (on the one hand) and RTZ, RTZ Indonesia and RTZ
America (on the other hand) pursuant to the Stock Purchase
Agreement, and the distribution on a generally tax free
basis (subject to exceptions approved by the Administrative
Agent and the Documentary Agent) by FTX to its shareholders
of the shares of FCX, thereby leaving FTX as a holding
company for FRP and leaving FCX as the publicly held holding
company for FI, together with arrangements required by or
effectuated in connection with such distribution with
respect to existing contractual agreements and indebtedness
of FTX, FRP, FCX and FI, all on terms substantially the same
as those disclosed in writing to the Banks prior to the
Closing Date or otherwise satisfactory to the Required Banks
(including all tax, accounting, corporate and partnership
matters).
"RTZ" means the RTZ Corporation PLC, a company
organized under the laws of England.
"RTZ America" means RTZ America, Inc., a Delaware
corporation and a wholly owned subsidiary of RTZ.
"RTZ Indonesia" means RTZ Indonesia Limited, a
company organized under the laws of England and a wholly
owned subsidiary of RTZ.
"S&P" means Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc.
"SEC" means the Securities and Exchange
Commission.
"Security Agreements" means, collectively, the FRP
Security Agreement and the FTX Security Agreement.
"Shared Collateral" has the meaning assigned to
such term in the FTX Intercreditor Agreement.
"Statutory Reserves" means a fraction (expressed
as a decimal), the numerator of which is the number one and
the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including,
without limitation, any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by
the Board and any other banking authority, domestic or
foreign, to which the Administrative Agent or any Bank
(including any branch, Affiliate, or other funding office
making or holding a Loan) is subject (a) with respect to the
Base CD Rate (as such term is used in the definition of
"Alternate Base Rate"), for new negotiable nonpersonal time
deposits in Dollars of over $100,000 with maturities
approximately equal to the applicable Interest Period, and
(b) with respect to the LIBO Rate, for Eurocurrency
Liabilities (as defined in Regulation D). Such reserve
percentages shall include, without limitation, those imposed
under Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change
in any reserve percentage.
"Stock Purchase Agreement" means the Agreement
dated as of May 2, 1995, by and between FTX, FCX, RTZ, RTZ
Indonesia and RTZ America as approved by the Banks and in
effect on the Closing Date and as amended from time to time
as permitted by Section 5.2(t).
"Subsidiary" means as to any Person, any
corporation at least a majority of whose securities having
ordinary voting power for the election of directors (other
than securities having such power only by reason of the
happening of a contingency) are at the time owned by such
Person and/or one or more other Subsidiaries of such Person
and any partnership (other than joint ventures for which the
intention under the applicable agreements, including
operating agreements, if any, is that such joint ventures be
partnerships solely for purposes of the Code) in which such
Person or a Subsidiary of such Person is a general partner;
provided that unless otherwise specified, "Subsidiary" means
a Subsidiary of FTX and provided, further, that FM
Properties, FM Corporation and IMC-Agrico shall not at any
time be Subsidiaries for any purposes of this Agreement.
"TCB" means Texas Commerce Bank National
Association, a national banking association.
"Third Party" has the meaning assigned to such
term in Section 5.2(l).
"Total Commitment" means the sum of all the then
effective Commitments.
"Transfer Effective Date" has the meaning assigned
to such term in each Commitment Transfer Supplement.
"Transferee" means any Participant or Purchasing
Bank, as such terms are defined in Section 9.3.
"Wholly-Owned Restricted Subsidiary" means any
Subsidiary, all of the stock of which is at the time owned
by FTX, FRP and/or one or more other Wholly-Owned Restricted
Subsidiaries of either of them.
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2. Accounting Terms. Except as
otherwise herein specifically provided, each accounting term
used herein shall have the meaning given it under United
States generally accepted accounting principles in effect
from time to time (with such changes thereto as are approved
or concurred in from time to time by the Borrowers'
independent public accountants, as applicable) applied on a
basis consistent with those used in preparing the financial
statements referred to in Section 5.1(a) ("GAAP"); provided,
however, that each reference in Section 5.2 hereof, or in
the definition of any term used in Section 5.2 hereof, to
GAAP shall mean generally accepted accounting principles as
in effect on the Closing Date and as applied by Borrowers in
preparing the financial statements referred to in
Section 3.1(e). In the event any change in GAAP materially
affects any provision of this Agreement, the Banks and the
Borrowers agree that they shall negotiate in good faith in
order to amend the affected provisions in such a way as will
restore the parties to their respective positions prior to
such change, and until such amendment becomes effective the
Borrowers' compliance with such provisions shall be
determined on the basis of GAAP as in effect immediately
before such change in GAAP became effective.
SECTION 1.3. Section, Article, Exhibit and
Schedule References, etc. Unless otherwise stated, Section,
Article, Exhibit and Schedule references made herein are to
Sections, Articles, Exhibits or Schedules, as the case may
be, of this Agreement. Whenever the context may require,
any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes"
and "including" shall be deemed to be followed by the phrase
"without limitation". Except as otherwise expressly
provided herein, any reference in this Agreement to any Loan
Document shall mean such document as amended, restated,
supplemented or otherwise modified from time to time.
ARTICLE II
The Loans
SECTION 2.1. Revolving Credit Facility. Upon the
terms and subject to the conditions and relying upon the
representations and warranties herein set forth, each Bank,
severally and not jointly, agrees to make Loans to the
Borrowers, at any time and from time to time on or after the
Funding Date, and until the earlier of the Maturity Date and
the termination of the Commitment of such Bank in accordance
with the terms hereof, in an aggregate principal amount at
any one time outstanding not to exceed such Bank's
Applicable Percentage of the then effective unused Total
Commitment on the Borrowing Date for such Loan. Within the
foregoing limits, the Borrowers may borrow, repay and
reborrow, prior to the Maturity Date, Loans subject to the
terms, provisions and limitations set forth herein;
provided, however, that the aggregate principal amount of
all Loans to FTX at any time outstanding shall not exceed
$75,000,000 or such lesser amount determined pursuant to
Section 2.7.
SECTION 2.2. Loans. (a) The Loans made by the
Banks to any Borrower on any one date shall be in an
aggregate principal amount which is (i) an integral multiple
of $1,000,000 and not less than $5,000,000 or (ii) equal to
the remaining available balance of the applicable
Commitments. The Loans by each Bank to each Borrower made
after the Funding Date shall be made against an appropriate
Promissory Note, payable to the order of such Bank in the
amount of its Commitment, executed by such Borrower and
delivered to such Bank on the Closing Date, as referred to
in Section 2.4.
(b) Each Loan shall be either a Reference Rate
Loan or a LIBO Rate Loan as the relevant Borrower may
request pursuant to Section 2.3. Subject to the provisions
of Sections 2.3 and 2.10, Loans of more than one type may be
outstanding at the same time.
(c) Each Bank shall make its portion, as
determined under Section 2.14, of each Loan hereunder on the
proposed date thereof by paying the amount required to the
Administrative Agent in New York, New York in immediately
available funds not later than 2:00 p.m., New York City
time, and the Administrative Agent shall by 3:00 p.m.,
New York City time, credit the amounts so received to the
general deposit account of the appropriate Borrower with the
Administrative Agent or, if Loans shall not be made on such
date because any condition precedent to a borrowing herein
specified is not met, return the amounts so received to the
respective Banks. Unless the Administrative Agent shall
have received notice from a Bank prior to the date of any
Loan that such Bank will not make available to the
Administrative Agent such Bank's portion of such Loan, the
Administrative Agent may assume that such Bank has made such
portion available to the Administrative Agent on the date of
such Loan in accordance with this paragraph (c) and the
Administrative Agent may, in reliance upon such assumption,
make available to the applicable Borrower on such date a
corresponding amount. If the Administrative Agent shall
have so made funds available, then to the extent that such
Bank shall not have made such portion available to the
Administrative Agent, such Bank and the applicable Borrower
severally agree to repay without duplication to the
Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the
date such amount is made available to the applicable
Borrower until the date such amount is repaid to the
Administrative Agent at an interest rate equal to (i) in the
case of the Borrower, the interest rate applicable at the
time to the Loans comprising such borrowing and (ii) in the
case of such Bank, a rate determined by the Administrative
Agent to represent its cost of overnight or short-term funds
(which determination shall be conclusive absent manifest
error). If such Bank shall repay to the Administrative
Agent such corresponding amount, such amount shall
constitute such Bank's Loan for purposes of this Agreement.
SECTION 2.3. Notice of Loans. (a) A Borrower
requesting a Loan shall give the Administrative Agent
irrevocable telephonic (promptly confirmed in writing),
written, telecopy or telex notice in the form of Exhibit B
with respect to each Loan (i) in the case of a LIBO Rate
Loan, not later than 10:30 a.m., New York City time, three
Business Days before a proposed borrowing, and (ii) in the
case of a Reference Rate Loan, not later than 10:30 a.m.,
New York City time, on the date of a proposed borrowing.
Such notice shall be irrevocable (except that in the case of
a LIBO Rate Loan, such Borrower may, subject to
Section 2.13, revoke such notice by giving written or telex
notice thereof to the Administrative Agent not later than
10:30 a.m., New York City time, two Business Days before
such proposed borrowing) and shall in each case refer to
this Agreement and specify (1) the Borrower to which the
Loan then being requested is to be made, (2) whether the
Loan then being requested is to be a Reference Rate Loan or
LIBO Rate Loan, (3) the date of such Loan (which shall be a
Business Day) and amount thereof, and (4) if such Loan is to
be a LIBO Rate Loan, the Interest Period or Interest Periods
(which shall not end after the Maturity Date) with respect
thereto. If no election as to the type of Loan is specified
in any such notice by such Borrower, such Loan shall be a
Reference Rate Loan. If no Interest Period with respect to
any LIBO Rate Loan is specified in any such notice by a
Borrower, then the applicable Borrower shall be deemed to
have selected an Interest Period of one month's duration.
The Administrative Agent shall promptly advise the other
Banks of any notice given by a Borrower pursuant to this
Section 2.3(a) and of each Bank's portion of the requested
Loan.
(b) Each Borrower may continue or convert all or
any part of any Loan as or into a Loan of the same or a
different type in accordance with Section 2.10 and subject
to the limitations set forth herein. If a Borrower shall
not have delivered a borrowing notice in accordance with
this Section 2.3 prior to the end of the Interest Period
then in effect for any Loan of such Borrower requesting that
such Loan be converted or continued as permitted hereby,
then such Borrower shall (unless the Borrower has notified
the Administrative Agent, not less than three Business Days
prior to the end of such Interest Period, that such Loan is
to be repaid at the end of such Interest Period) be deemed
to have delivered a borrowing notice pursuant to Section 2.3
requesting that such Loan be converted into or continued as
a Reference Rate Loan of equivalent amount.
(c) Notwithstanding any provision to the contrary
in this Agreement, no Borrower shall in any borrowing notice
under this Section 2.3 request any LIBO Rate Loan which, if
made, would result in more than 20 separate LIBO Rate Loans
of any Bank. For purposes of the foregoing, Loans having
different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate
Loans.
SECTION 2.4. Promissory Notes. (a) The Loans
made by each Bank to each Borrower shall be evidenced by a
Promissory Note duly executed on behalf of such Borrower,
dated the Closing Date, in substantially the form attached
hereto as Exhibit A, payable to the order of such Bank in a
principal amount equal to its Commitment. The outstanding
principal balance of each Loan, as evidenced by such
Promissory Note, shall be payable on the Maturity Date. Each
Promissory Note shall bear interest from the date of the
first borrowing hereunder on the outstanding principal
balance thereof, as provided in Section 2.5.
(b) Each Bank shall maintain in accordance with
its usual practice an account or accounts evidencing the
indebtedness to such Bank resulting from each Loan made by
such Bank from time to time, including the amounts of
principal and interest payable and paid to such Bank from
time to time under this Agreement. Each Bank shall, and is
hereby authorized by each Borrower to, endorse on the
schedule attached to the Promissory Note delivered by such
Borrower to such Bank (or on a continuation of such schedule
attached to such Promissory Note and made a part thereof),
or otherwise record in such Bank's internal records, an
appropriate notation evidencing the date and amount of each
Loan from such Bank to such Borrower, as well as the date
and amount of each payment and prepayment with respect
thereto; provided, however, that the failure of any Bank to
make such a notation or any error in such a notation shall
not affect the obligation of such Borrower to repay the
Loans made by such Bank in accordance with the terms of this
Agreement and such Promissory Note.
(c) The Administrative Agent shall maintain
accounts for (i) the type of each Loan made and the Interest
Period applicable thereto, (ii) the amount of any principal
or interest due and payable or to become due and payable
from the applicable Borrower to each Bank hereunder and
(iii) the amount of any sum received by the Administrative
Agent hereunder from such Borrower and each Bank's share
thereof.
(d) The entries made in the accounts maintained
pursuant to paragraphs (b) and (c) of this Section 2.4 shall
be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the
failure of any Bank or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner
affect the obligations of the Borrowers to repay the Loans
in accordance with their terms.
SECTION 2.5. Interest on Loans. (a) Subject to
the provisions of Section 2.8, each Reference Rate Loan
shall bear interest at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be, when determined by
reference to the Prime Rate, and over a year of 360 days at
all other times), equal to the Applicable Reference Rate.
(b) Subject to the provisions of Section 2.8,
each Loan which is a LIBO Rate Loan shall bear interest at a
rate per annum (computed on the basis of the actual number
of days elapsed over a year of 360 days) equal to the
Applicable LIBO Rate for the Interest Period in effect for
such Loan.
(c) Interest on each Loan shall be payable on
each applicable Interest Payment Date. The Applicable
Reference Rate and the Applicable LIBO Rate shall be
determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
The Administrative Agent shall promptly advise the Borrowers
and each Bank of such determination.
SECTION 2.6. Fees. (a) The Borrowers shall pay
each Bank, through the Administrative Agent, on the last
Business Day of each March, June, September and December,
and on the date on which the Commitment of such Lender shall
be terminated as provided herein (the "Commitment
Termination Date"), in immediately available funds, a
commitment fee (a "Commitment Fee") from and including the
earlier of June 30, 1995, and the Funding Date through and
including the Commitment Termination Date on the average
daily amount of such Bank's Applicable Percentage of the
unused Total Commitment during the quarter (or shorter
period commencing with the earlier of June 30, 1995, and the
Funding Date or ending with the Commitment Termination Date)
ending on such date equal to the applicable Commitment Fee
Percentage set forth in Schedule I hereto for such Borrower.
(b) All Commitment Fees under this Section 2.6
shall be computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be.
The Commitment Fees due to each Bank shall cease to accrue
on the earlier of the Maturity Date and the termination of
the Commitment of such Bank pursuant to Section 2.7.
(c) The Borrowers agree to pay to the
Administrative Agent, for its own account, on the Closing
Date and on each anniversary thereof, an administration fee
(the "Administrative Fee") as agreed between the Borrowers
and the Administrative Agent.
(d) All such fees shall be paid on the dates due,
in immediately available funds, to the Administrative Agent
for distribution, if and as appropriate, among the Banks.
Once paid, all such fees shall be fully earned under any and
all circumstances.
SECTION 2.7. Maturity and Reduction of
Commitments. (a) Upon at least five days' prior written,
telecopied or telex notice to the Administrative Agent, the
Borrowers may without penalty at any time in whole
permanently terminate, or from time to time permanently
reduce, the Total Commitment, ratably among the Banks in
accordance with the amounts of their respective Commitments;
provided, however, that each partial reduction of the
Commitment Amount shall be in a minimum principal amount of
$5,000,000 and an integral multiple of $1,000,000; provided
further, that the Total Commitment may not be reduced to an
amount which is less than the aggregate principal amount of
all Loans outstanding after such reduction.
(b) The Total Commitment shall be automatically
and permanently reduced by an amount equal to (I) the Net
Proceeds of any non-ordinary course asset disposition by FRP
and its Restricted Subsidiaries and IMC-Agrico (other than
in each case, (i) dispositions of obsolete and worn-out
property or real estate not used or useful in its business,
(ii) sales of accounts receivable and (iii) sales of any
IMC-Agrico asset sales to the extent not resulting in
distributable cash to FRP or its Restricted Subsidiaries),
in excess of a cumulative aggregate amount of $25,000,000
for all such transactions during the term of this Agreement,
and (II) the net proceeds of any issuance of Debt to any
Third Party by FRP or its Restricted Subsidiaries after the
Closing Date (other than (A) Guarantees where no proceeds of
the related Debt are received by FRP or its Restricted
Subsidiaries, (B) Debt described in clauses (i), (ii),
(iii), (iv), (v), (vi), (vii), (viii) and (xi) of
Section 5.2(g) and (C) Capitalized Lease Obligations where a
related asset sale has already been counted for purposes of
this Section 2.7(b)), in excess of a cumulative aggregate
amount of $50,000,000 for all such transactions during the
term of this Agreement. The Total Commitment shall also be
automatically and permanently reduced by an amount equal to
such portion of the proceeds of any equity issuance (other
than pursuant to employee stock option plans and similar
arrangements and other than equity issued to fund a
permitted acquisition) by FRP and the Restricted
Subsidiaries to any Person other than the Borrowers and the
Restricted Subsidiaries as the Required Banks and the
Borrowers shall agree prior to the time of receipt of Net
Proceeds in respect of such equity issuance; provided that,
if such agreement shall not be reached prior to the time of
such receipt, the applicable portion shall be 50%. The
Commitment reductions required by this Section 2.7(b) shall
be effective as of the date of closing or effectiveness of
any transaction subject hereto; provided that with respect
to any non-cash Net Proceeds, such Commitment reductions
shall be effective as of the earlier of (x) the date of
receipt of cash proceeds thereof and (y) the first
anniversary of the date of closing or effectiveness of such
transaction, subject to any such non-cash proceeds in excess
of $5,000,000 being pledged to the relevant Collateral Agent
pursuant to the FRP Security Agreement as additional
collateral for the Loans and other obligations under the
Loan Documents and the Permitted Secured Swaps; and provided
further that to the extent prepayment of any LIBO Rate Loan
is required pursuant to this Section 2.7(b), such prepayment
may be made at the end of the current Interest Period for
such LIBO Rate Loan if the required prepayment would
otherwise give rise to breakage costs under Section
2.13(a)(i).
(c) On the Maturity Date, the Commitments shall
automatically terminate and any outstanding Loans shall be
due and payable in full.
SECTION 2.8. Interest on Overdue Amounts;
Alternative Rate of Interest. (a) If any Borrower shall
default in the payment of the principal of or interest on
any Loan or any other amount becoming due hereunder or under
any other Loan Document, by acceleration or otherwise, such
Borrower shall on demand from time to time pay interest, to
the extent permitted by law, on such defaulted amount up to
the date of actual payment (after as well as before
judgment):
(i) in the case of the payment of principal of or
interest on a LIBO Rate Loan, at a rate 2% above the
rate which would otherwise be payable under
Section 2.5(b) until the last date of the Interest
Period then in effect with respect to such Loan and
thereafter as provided in clause (ii) below; and
(ii) in the case of the payment of principal of or
interest on a Reference Rate Loan or any other amount
payable hereunder (other than principal of or interest
on any LIBO Rate Loan to the extent referred to in
clause (i) above), at a rate 2% above the Applicable
Reference Rate.
(b) In the event, and on each occasion, that on
the day two Business Days prior to the commencement of any
Interest Period for a LIBO Rate Loan the Administrative
Agent shall have determined (which determination shall be
conclusive and binding upon the Borrowers absent manifest
error) that (i) Dollar deposits in the requested principal
amount of such LIBO Rate Loan are not generally available in
the London Interbank Market, (ii) the rates at which Dollar
deposits are being offered will not adequately and fairly
reflect the cost to any Bank of making or maintaining such
LIBO Rate Loan during such Interest Period or
(iii) reasonable means do not exist for ascertaining the
Applicable LIBO Rate, the Administrative Agent shall as soon
as practicable thereafter give written, telecopied or telex
notice of such determination to the Borrowers and the other
Banks, and any request by a Borrower for the making of a
LIBO Rate Loan pursuant to Section 2.3 or 2.10 shall, until
the Administrative Agent shall have advised the Borrowers
and the Banks that the circumstances giving rise to such
notice no longer exist, be deemed to be a request for a
Reference Rate Loan; provided, however, that if the
Administrative Agent makes the determination specified in
(ii) above, at the option of such Borrower such request
shall be deemed to be a request for a Reference Rate Loan
only from such Bank referred to in (ii) above; provided
further, however, that such option shall not be available to
such Borrower if the Administrative Agent makes the
determination specified in (ii) above with respect to three
or more Banks. Each determination of the Administrative
Agent hereunder shall be conclusive absent manifest error.
SECTION 2.9. Prepayment of Loans. (a) Each
Borrower shall have the right at any time and from time to
time to prepay any of its Loans, in whole or in part,
subject to the requirements of Section 2.13 but otherwise
without premium or penalty, upon prior written or telex
notice to the Administrative Agent by 10:30 a.m., New York
City time, on the date of such prepayment; provided,
however, that each such partial prepayment shall be in a
minimum amount of $5,000,000 and an integral multiple of
$1,000,000.
(b) In the event of any termination of the
Commitments, each Borrower shall repay or prepay all its
outstanding Loans on the date of such termination. On the
date of any partial reduction of the Commitments pursuant to
Section 2.7, the Borrowers shall pay or prepay so much of
their respective Loans as shall be necessary in order that
the aggregate principal amount of the Loans (after giving
effect to any other prepayment of Loans on such date)
outstanding will not exceed the Total Commitment immediately
following such reduction.
(c) All prepayments under this Section 2.9 shall
be subject to Section 2.13. Each notice of prepayment
delivered pursuant to paragraph (a) above shall specify the
prepayment date and the principal amount of each Loan (or
portion thereof) to be prepaid, shall be irrevocable and
shall commit the Borrower giving such notice to prepay such
Loan by the amount stated therein on the date stated
therein. All prepayments shall be applied first to
Reference Rate Loans and then to LIBO Rate Loans and shall
be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment. Any amounts prepaid
may be reborrowed to the extent permitted by the terms of
this Agreement.
SECTION 2.10. Continuation and Conversion of
Loans. Each Borrower shall have the right, subject to the
provisions of Section 2.8, (i) on three Business Days' prior
irrevocable notice by such Borrower to the Administrative
Agent, to continue or convert any type of Loans as or into
LIBO Rate Loans, or (ii) with irrevocable notice by such
Borrower to the Administrative Agent by 10:30 a.m. on the
date of such proposed continuation or conversion, to
continue or convert any type of Loans as or into Reference
Rate Loans, in each case subject to the following further
conditions:
(a) each continuation or conversion shall be made
pro rata as to each type of Loan of a Borrower to be
continued or converted among the Banks in accordance
with the respective amounts of their commitments and
the notice given to the Administrative Agent by such
Borrower shall specify the aggregate principal amount
of Loans to be continued or converted;
(b) in the case of a continuation or conversion of
less than all Loans of any Borrower, the Loans
continued or converted shall be in a minimum aggregate
principal amount of $5,000,000 and an integral multiple
of $1,000,000;
(c) accrued interest on each Loan (or portion
thereof) being continued or converted shall be paid by
such Borrower at the time of continuation or
conversion;
(d) the Interest Period with respect to any Loan
made in respect of a continuation or conversion thereof
shall commence on the date of the continuation or
conversion;
(e) any portion of a Loan maturing or required to
be prepaid in less than one month may not be continued
as or converted into a LIBO Rate Loan;
(f) a LIBO Rate Loan may be continued or converted
on the last day of the applicable Interest Period and,
subject to Section 2.13, on any other day;
(g) no Loan (or portion thereof) may be continued
as or converted into a LIBO Rate Loan if, after such
continuation or conversion, an aggregate of more than
20 separate LIBO Rate Loans of any Bank would result,
determined as set forth in Section 2.3(c);
(h) no Loan shall be continued or converted if
such Loan by any Bank would be greater than the amount
by which its Commitment exceeds the amount of its other
Loans at the time outstanding or if such Loan would not
comply with the other provisions of this Agreement; and
(i) any portion of a LIBO Rate Loan which cannot
be converted into or continued as a LIBO Rate Loan by
reason of clause (e) or (g) above shall be
automatically converted at the end of the Interest
Period in effect for such Loan into a Reference Rate
Loan.
The Administrative Agent shall communicate the information
contained in each irrevocable notice delivered by the
applicable Borrower pursuant to this Section 2.10 to the
other Banks promptly after its receipt of the same.
The Interest Period applicable to any LIBO Rate
Loan resulting from a continuation or conversion shall be
specified by the applicable Borrower in the irrevocable
notice of continuation or conversion delivered pursuant to
this Section 2.10; provided, however, that if no such
Interest Period for a LIBO Rate Loan shall be specified, the
applicable Borrower shall be deemed to have selected an
Interest Period of one month's duration.
For purposes of this Section 2.10, notice received
by the Administrative Agent from a Borrower after
10:30 a.m., New York time, on a Business Day shall be deemed
to be received on the immediately succeeding Business Day.
SECTION 2.11. Reserve Requirements; Change in
Circumstances. (a) The Borrowers shall pay to each Bank on
the last day of each Interest Period for any LIBO Rate Loan
so long as such Bank may be required to maintain reserves
against Eurocurrency Liabilities as defined in Regulation D
of the Board (or so long as such Bank may be required to
maintain reserves against any other category of liabilities
which includes deposits by reference to which the interest
rate on any LIBO Rate Loan is determined as provided in this
Agreement or against any category of extensions of credit or
other assets of such Bank which includes any LIBO Rate Loan)
an additional amount (determined by such Bank and notified
to the Borrowers), equal to the product of the following for
each affected LIBO Rate Loan for each day during such
Interest Period:
(i) the principal amount of such affected LIBO
Rate Loan outstanding on such day; and
(ii) the remainder of (x) the product of Statutory
Reserves on such date times the Applicable LIBO Rate on
such day minus (y) the Applicable LIBO Rate on such
day; and
(iii) 1/360.
Each Bank shall separately bill the Borrowers directly for
all amounts claimed pursuant to this Section 2.11(a).
(b) Notwithstanding any other provision herein,
if after the Closing Date any change in condition or
applicable law or regulation or in the interpretation or
administration thereof (whether or not having the force of
law and including, without limitation, Regulation D of the
Board) by any Governmental Authority charged with the
administration or interpretation thereof shall occur which
shall:
(i) subject any Bank (which shall for the purpose
of this Section include any assignee or lending office
of any Bank) to any tax of any kind whatsoever with
respect to its LIBO Rate Loans or other fees or amounts
payable hereunder or change the basis of taxation of
any of the foregoing (other than taxes (including Non-
Excluded Taxes) described in Section 2.17 and other
than any franchise tax or tax or other similar
governmental charges, fees or assessments based on the
overall net income of such Bank by the U.S. Federal
government or by any jurisdiction in which such Bank
maintains an office, unless the presence of such office
is solely attributable to the enforcement of any rights
hereunder or under any Security Document with respect
to an Event of Default);
(ii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets
of, deposits with or for the account of or credit
extended by any Bank;
(iii) impose on any such Bank or the London
Interbank Market any other condition affecting this
Agreement or LIBO Rate Loans made by such Bank; or
(iv) impose upon any Bank any other condition with
respect to any amount paid or to be paid by any Bank
with respect to its LIBO Rate Loans or this Agreement;
and the result of any of the foregoing shall be to increase
the cost to any Bank of making or maintaining its LIBO Rate
Loans or Commitment hereunder, or to reduce the amount of
any sum (whether of principal, interest or otherwise)
received or receivable by such Bank or to require such Bank
to make any payment, in respect of any such Loan, in each
case by or in an amount which such Bank in its sole judgment
shall deem material, then the Borrower to which such Loan
was made shall pay to such Bank on demand such an amount or
amounts as will compensate the Bank for such additional
cost, reduction or payment.
(c) If any Bank shall have determined that the
applicability of any law, rule, regulation, agreement or
guideline adopted after the Closing Date regarding capital
adequacy, or any change after the Closing Date in any such
law, rule, regulation, agreement or guideline (whether such
law, rule, regulation, agreement or guideline has been
adopted) or in the interpretation or administration of any
of the foregoing by any Governmental Authority charged with
the interpretation or administration thereof, or compliance
by any Bank (or any lending office of such Bank) or any
Bank's holding company with any request or directive
regarding capital adequacy (whether or not having the force
of law) of any such Governmental Authority made or issued
after the Closing Date, has or would have the effect of
reducing the rate of return on such Bank's capital or on the
capital of such Bank's holding company, if any, as a
consequence of this Agreement or the Loans made pursuant
hereto to a level below that which such Bank or such Bank's
holding company could have achieved but for such
applicability, adoption, change or compliance (taking into
consideration such Bank's policies and the policies of such
Bank's holding company with respect to capital adequacy) by
an amount deemed by such Bank to be material, then from time
to time the Borrowers shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such
Bank's holding company for any such reduction suffered.
(d) If and on each occasion that a Bank makes a
demand for compensation pursuant to paragraph (a), (b) or
(c) above, or under Section 2.17 (it being understood that a
Bank may be reimbursed for any specific amount under only
one such paragraph or Section) the Borrowers may, upon at
least three Business Days' prior irrevocable written or
telex notice to each of such Bank and the Administrative
Agent, in whole permanently replace the Commitment of such
Bank; provided that such notice must be given not later than
the 90th day following the date of a demand for compensation
made by such Bank; and provided that the Borrowers shall
replace such Commitment with the Commitment of a commercial
bank satisfactory to the Administrative Agent. Such notice
from the Borrowers shall specify an effective date for the
termination of such Bank's Commitment which date shall not
be later than the 180th day after the date such notice is
given. On the effective date of any termination of such
Bank's Commitment pursuant to this clause (d), the Borrowers
shall pay to the Administrative Agent for the account of
such Bank (A) any Commitment Fees on the amount of such
Bank's Commitment so terminated accrued to the date of such
termination, (B) the principal amount of any outstanding
Loans held by such Bank plus accrued interest on such
principal amount to the date of such termination and (C) the
amount or amounts requested by such Bank pursuant to
clause (a), (b) or (c) above or Section 2.17, as applicable.
The Borrowers will remain liable to such terminated Bank for
any loss or expense that such Bank may sustain or incur as a
consequence of such Bank's making any LIBO Rate Loan or any
part thereof or the accrual of any interest on any such Loan
in accordance with the provisions of this Section 2.11(d) as
set forth in Section 2.13. Upon the effective date of
termination of any Bank's Commitment pursuant to this
Section 2.11(d) such Bank shall cease to be a "Bank"
hereunder; provided that no such termination of any such
Bank's Commitment shall affect (i) any liability or
obligation of the Borrowers or any other Bank to such
terminated Bank which accrued on or prior to the date of
such termination or (ii) such terminated Bank's rights
hereunder in respect of any such liability or obligation.
(e) A certificate of a Bank (or Transferee)
setting forth such amount or amounts as shall be necessary
to compensate such Bank (or Transferee) as specified in
paragraph (a), (b) or (c) (and in the case of paragraph (c),
such Bank's holding company) above or Section 2.17, as the
case may be, shall be delivered as soon as practicable to
the Borrowers, and in any event within 90 days of the change
giving rise to such amount or amounts, and shall be
conclusive absent manifest error. The appropriate Borrower
shall pay each Bank the amount shown as due on any such
certificate within 15 days after its receipt of the same.
In preparing such a certificate, each Bank may employ such
assumptions and allocations of costs and expenses as it
shall in good faith deem reasonable. The failure of any
Bank (or Transferee) to give the required 90 day notice
shall excuse the Borrowers from their obligations to pay
additional amounts pursuant to such Sections incurred for
the period that is 90 days or more prior to the date such
notice was required to be given.
(f) Failure on the part of any Bank to demand
compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital
within the 90 days required pursuant to Section 2.11(e)
shall not constitute a waiver of such Bank's rights to
demand compensation for any increased costs or reduction in
amounts received or receivable or reduction in return on
capital for any period after the date that is 90 days prior
to the date of the delivery of demand for compensation. The
protection of this Section 2.11 shall be available to each
Bank regardless of any possible contention of invalidity or
inapplicability of the law, regulation or condition which
shall have occurred or been imposed. No Borrower shall be
required to make any additional payment to any Bank pursuant
to Section 2.11(a) or (b) in respect of any such cost,
reduction or payment that could be avoided by such Bank in
the exercise of reasonable diligence, including a change in
the lending office of such Bank if possible without material
cost to such Bank. Each Bank agrees that it will promptly
notify the Borrowers and the Administrative Agent of any
event of which the responsible account officer shall have
knowledge which would entitle such Bank to any additional
payment pursuant to this Section 2.11. The Borrowers agree
to furnish promptly to the Administrative Agent official
receipts evidencing any payment of any tax.
SECTION 2.12. Change in Legality. (a) Notwith-
standing anything to the contrary herein contained, if after
the Closing Date any change in any law or regulation or in
the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof
shall make it unlawful for any Bank to make or maintain any
LIBO Rate Loan or to give effect to its obligations as
contemplated hereby with respect to any LIBO Rate Loan,
then, by written notice to the Borrowers and to the
Administrative Agent, such Bank may:
(i) declare that LIBO Rate Loans will not
thereafter (for the duration of such unlawfulness or
impracticality) be made by such Bank hereunder,
whereupon the Borrowers shall be prohibited from
requesting LIBO Rate Loans from such Bank hereunder
unless such declaration is subsequently withdrawn; and
(ii) require that all outstanding LIBO Rate Loans
made by it be converted to Reference Rate Loans, in
which event (A) all such LIBO Rate Loans shall be
automatically converted to Reference Rate Loans as of
the end of the applicable Interest Period, unless an
earlier conversion date is legally required, (B) all
payments and prepayments of principal which would
otherwise have been applied to repay the converted LIBO
Rate Loans shall instead be applied to repay the
Reference Rate Loans resulting from the conversion of
such LIBO Rate Loans and (C) the Reference Rate Loans
resulting from the conversion of such LIBO Rate Loans
shall be prepayable only at the times the converted
LIBO Rate Loans would have been prepayable,
notwithstanding the provisions of Section 2.9.
(b) Before giving any notice to the Borrowers and
the Administrative Agent pursuant to this Section 2.12, such
Bank shall designate a different LIBOR Office if such
designation will avoid the need for giving such notice and
will not in the judgment of such Bank, be otherwise
disadvantageous to such Bank. For purposes of
Section 2.12(a), a notice to the Borrowers by any Bank shall
be effective on the date of receipt by the Borrowers.
SECTION 2.13. Indemnity. Each Borrower shall
indemnify each Bank against any funding, redeployment or
similar loss or expense which such Bank may sustain or incur
as a consequence of (a) any event, other than a default by
such Bank in the performance of its obligations hereunder,
which results in (i) such Bank receiving or being deemed to
receive any amount on account of the principal of any LIBO
Rate Loan prior to the end of the Interest Period in effect
therefor (any of the events referred to in this clause (i)
being called a "Breakage Event") or (ii) any Loan to be made
by such Bank not being made after notice of such Loan shall
have been given by such Borrower hereunder or (b) any
default in the making of any payment or prepayment of any
amount required to be made hereunder. In the case of any
Breakage Event, such loss shall include an amount equal to
the excess, as reasonably determined by such Bank, of (i)
its cost of obtaining funds for the Loan which is the
subject of such Breakage Event for the period from the date
of such Breakage Event to the last day of the Interest
Period in effect (or which would have been in effect) for
such Loan over (ii) the amount of interest (as reasonably
determined by such Bank) that would be realized by such Bank
in reemploying the funds so paid, prepaid or converted or
not borrowed, continued or converted by making a LIBO Rate
Loan in such principal amount and with a maturity comparable
to such period. A certificate of any Bank setting forth any
amount or amounts which such Bank is entitled to receive
pursuant to this Section shall be delivered to the Borrowers
and shall be conclusive absent manifest error.
SECTION 2.14. Pro Rata Treatment. Except as
permitted under any of Sections 2.8(b), 2.11, 2.12, 2.13 or
2.17, each borrowing under each type of Loan, each payment
or prepayment of principal of the Loans, each payment of
interest on the Loans, each other reduction of the principal
or interest outstanding under the Loans, however achieved,
including by setoff by any Person, each payment of the
Commitment Fees, each reduction of the Commitments and each
conversion or continuation of Loans shall be allocated pro
rata among the Banks in the proportions that their
respective Commitments bear to the Total Commitment (or, if
such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their
outstanding Loans). Each Bank agrees that in computing such
Bank's portion of any borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each
Bank's percentage of such borrowing to the next higher or
lower whole Dollar amount.
SECTION 2.15. Sharing of Setoffs. Each Bank
agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim against any Borrower
or pursuant to a secured claim under Section 506 of Title 11
of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by
such Bank under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means obtain
payment (voluntary or involuntary) in respect of any Loan of
any Borrower held by it as a result of which the unpaid
principal portion of the Loans of such Borrower held by it
shall be proportionately less than the unpaid principal
portion of the Loans of such Borrower held by any other Bank
(other than as permitted under any of Sections 2.8(b), 2.11,
2.12, 2.13 or 2.17), it shall be deemed to have
simultaneously purchased from such other Bank at face value,
and shall promptly pay to such other Bank the purchase price
for, a participation in the Loans of such Borrower held by
such other Bank, so that the aggregate unpaid principal
amount of the Loans of such Borrower and participation in
Loans of such Borrower held by each Bank shall be in the
same proportion to the aggregate unpaid principal amount of
all Loans of such Borrower then outstanding as the principal
amount of the Loans of such Borrower held by it prior to
such exercise of banker's lien, setoff or counterclaim was
to the principal amount of all Loans of such Borrower
outstanding prior to such exercise of banker's lien, setoff
or counterclaim or other event; provided, however, that if
any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.15 and the payment giving rise
thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of
such recovery and the purchase price or prices or adjustment
restored without interest. To the fullest extent permitted
by applicable law, each Borrower expressly consents to the
foregoing arrangements and agrees that any Bank holding a
participation in a Loan of either Borrower deemed to have
been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any
and all moneys owing by such Borrower hereunder to such Bank
as fully as if such Bank had made a Loan directly to such
Borrower in the amount of such participation.
SECTION 2.16. Payments. (a) Except as otherwise
provided in this Agreement, all payments and prepayments to
be made by either Borrower to the Banks hereunder, whether
on account of Commitment Fees, payment of principal or
interest on the Promissory Notes or other amounts at any
time owing hereunder or under any other Loan Document, shall
be made to the Administrative Agent at its office at 270
Park Avenue, New York, New York, for the account of the
several Banks in immediately available funds. All such
payments shall be made to the Administrative Agent as
aforesaid not later than 10:30 a.m., New York City time, on
the date due; and funds received after that hour shall be
deemed to have been received by the Administrative Agent on
the following Business Day.
(b) As promptly as possible, but no later than
2:00 p.m., New York City time, on the date of each
borrowing, each Bank participating in the Loans made on such
date shall pay to the Administrative Agent such Bank's
Applicable Percentage of such Loan plus, if such payment is
received by the Administrative Agent after 2:00 p.m., New
York City time, on the date of such borrowing, interest at a
rate per annum equal to the rate in effect on such day,
quoted by the Administrative Agent at its office at 270 Park
Avenue, New York, New York, for the overnight "sale" to such
Bank of Federal funds. At the time of, and by virtue of,
such payment, such Bank shall be deemed to have made its
Loan in the amount of such payment. The Administrative
Agent agrees to pay any moneys, including such interest, so
paid to it by the lending Banks promptly, but no later than
3:00 p.m., New York City time, on the date of such
borrowing, to the appropriate Borrower in immediately
available funds.
(c) If any payment of principal, interest,
Commitment Fee or any other amount payable to the Banks
hereunder or under any Promissory Note shall fall due on a
day that is not a Business Day, then (except in the case of
payments of principal of or interest on LIBO Rate Loans, in
which case such payment shall be made on the next preceding
Business Day if the next succeeding Business Day would fall
in the next calendar month) such due date shall be extended
to the next succeeding Business Day, and interest shall be
payable on principal in respect of such extension.
(d) Unless the Administrative Agent shall have
been notified by the Borrowers prior to the date on which
any payment or prepayment is due hereunder (which notice
shall be effective upon receipt) that the Borrowers do not
intend to make such payment or prepayment, the
Administrative Agent may assume that the Borrowers have made
such payment or prepayment when due and the Administrative
Agent may in reliance upon such assumption (but shall not be
required to) make available to each Bank on such date an
amount equal to the portion of such assumed payment or
prepayment such Bank is entitled to hereunder, and, if the
Borrowers have not in fact made such payment or prepayment
to the Administrative Agent, such Bank shall, on demand,
repay to the Administrative Agent the amount made available
to such Bank, together with interest thereon in respect of
each day during the period commencing on the date such
amount was made available to such Bank and ending on (but
excluding) the date such Bank repays such amount to the
Administrative Agent, at a rate per annum equal to the rate,
determined by the Administrative Agent to represent its cost
of overnight or short-term funds (which determination shall
be conclusive absent manifest error).
(e) All payments of the principal of or interest
on the Loans or any other amounts to be paid to any Bank or
the Administrative Agent under this Agreement or any of the
other Loan Documents shall be made in Dollars, without
reduction by reason of any currency exchange expense.
SECTION 2.17. U.S. Taxes. (a) Any and all
payments by any Borrower hereunder shall be made, in
accordance with Section 2.16, free and clear of and without
deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all
liabilities with respect thereto imposed by the United
States or any political subdivision thereof, excluding
taxes imposed on the net income of an Agent or any Bank (or
Transferee) and franchise taxes of an Agent or any Bank (or
Transferee), as applicable, as a result of a connection
between the jurisdiction imposing such taxes and such Agent
or such Bank (or Transferee), as applicable, other than a
connection arising solely from such Agent or such Bank (or
Transferee), as applicable, having executed, delivered,
performed its obligations or received a payment under, or
enforced, this Agreement (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Non-Excluded
Taxes"). If any Borrower shall be required by law to deduct
any Non-Excluded Taxes from or in respect of any sum payable
hereunder to the Banks (or any Transferee) or an Agent,
(i) the sum payable shall be increased by the amount
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 2.17) such Bank (or Transferee) or an
Agent (as the case may be) shall receive an amount equal to
the sum it would have received had no such deductions been
made, (ii) such Borrower shall make such deductions and
(iii) such Borrower shall pay the full amount deducted to
the relevant taxing authority or other Governmental
Authority in accordance with applicable law; provided,
however, that no Transferee of any Bank shall be entitled to
receive any greater payment under this Section 2.17 than
such Bank would have been entitled to receive with respect
to the rights assigned, participated or otherwise
transferred unless such assignment, participation or
transfer shall have been made at a time when the
circumstances giving rise to such greater payment did not
exist.
(b) In addition, the Borrowers agree to bear and
to pay to the relevant Governmental Authority in accordance
with applicable law any current or future stamp or
documentary taxes or any other similar excise taxes, charges
or similar levies that arise from any payment made hereunder
or from the execution, delivery, registration or enforcement
of, or otherwise with respect to, this Agreement or any
other Loan Document and any property taxes that arise from
the enforcement of this Agreement or any other Loan Document
("Other Taxes").
(c) The Borrowers will indemnify each Bank (or
Transferee) and each Agent for the full amount of Non-
Excluded Taxes and Other Taxes (including Non-Excluded Taxes
or Other Taxes imposed on amounts payable under this
Section 2.17) paid by such Bank (or Transferee) or such
Agent, as the case may be, and any liability (including
penalties, interest and expenses (including reasonable
attorney's fees and expenses)) arising therefrom or with
respect thereto. A certificate as to the amount of such
payment or liability prepared by a Bank or Agent, or the
Administrative Agent on behalf of such Bank or Agent, absent
manifest error, shall be final, conclusive and binding for
all purposes. Such indemnification shall be made within
30 days after the date such Bank (or Transferee) or such
Agent, as the case may be, makes written demand therefor.
(d) Within 30 days after the date of any payment
of Non-Excluded Taxes or Other Taxes by any Borrower to the
relevant Governmental Authority, such Borrower will furnish
to the Administrative Agent, at its address referred to on
the signature page, the original or a certified copy of a
receipt issued by such Governmental Authority evidencing
payment thereof.
(e) At the time it becomes a party to this
Agreement or a Transferee, each Bank (or Transferee) that is
organized under the laws of a jurisdiction outside the
United States shall (in the case of a Transferee, subject to
the immediately succeeding sentence) deliver to the
Borrowers either a valid and currently effective Internal
Revenue Service Form 1001 or Form 4224 or, in the case of a
Bank (or Transferee) claiming exemption from U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a
Form W-8, or any subsequent version thereof or successors
thereto, (and if such Bank (or Transferee) delivers a
Form W-8, a certificate representing that such Bank (or
Transferee) is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of the
Borrowers and is not a controlled foreign corporation
related to the Borrowers (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly
executed by such Bank (or Transferee) establishing that such
payment is (i) not subject to United States Federal
withholding tax under the Code because such payment is
effectively connected with the conduct by such Bank (or
Transferee) of a trade or business in the United States or
(ii) totally exempt from (or in case of a Transferee,
entitled to a reduced rate of) United States Federal
withholding tax. Notwithstanding any other provision of
this Section 2.17(e), no Transferee shall be required to
deliver any form pursuant to this Section 2.17(e) that such
Transferee is not legally able to deliver. In addition,
each Bank (or Transferee) shall deliver such forms promptly
upon the obsolescence or invalidity of any form previously
delivered, but only, in such case, to the extent such Bank
(or Transferee) is legally able to do so.
(f) Notwithstanding anything to the contrary
contained in this Section 2.17, no Borrower shall be
required to pay any additional amounts to any Bank (or
Transferee) in respect of United States Federal withholding
tax pursuant to paragraph (a) above if the obligation to pay
such additional amounts would not have arisen but for a
failure by such Bank (or Transferee) to comply with the
provisions of paragraph (e) above.
(g) Any Bank (or Transferee) claiming any
additional amounts payable pursuant to this Section 2.17
shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document
requested by the Borrowers or to change the jurisdiction of
its applicable lending office if the making of such a filing
or change would avoid the need for or reduce the amount of
any such additional amounts which may thereafter accrue and
would not, in the sole determination of such Bank, be
otherwise disadvantageous to such Bank (or Transferee).
(h) Without prejudice to the survival of any
other agreement contained herein, the agreements and
obligations contained in this Section 2.17 shall survive the
payment in full of the principal of and interest on all
Loans made hereunder.
(i) Nothing contained in this Section 2.17 shall
require any Bank (or Transferee) or the Administrative Agent
to make available any of its income tax returns (or any
other information that it deems to be confidential or
proprietary).
SECTION 2.18. FTX or Restricted Subsidiary as
Limited Partner. Notwithstanding anything to the contrary
contained in this Agreement or any Promissory Note, with
respect to any direct liabilities of FRP to the Banks under
this Agreement, its Promissory Notes or the other Loan
Documents, FTX and any Restricted Subsidiary solely in its
capacity as a partner of FRP shall be deemed to be limited,
rather than general, partners of FRP. Nothing in this
Section 2.18 shall be deemed in any way to derogate from or
affect FTX's own direct obligations under this Agreement,
its Promissory Note or the other Loan Documents.
ARTICLE III
Representations and Warranties
SECTION 3.1. Representations and Warranties. As
of the Funding Date and each other date upon which such
representations and warranties are required to be made or
deemed made pursuant to Section 6.1(i), (i) FTX represents
and warrants with respect to itself and (ii) FTX and FRP
jointly and severally represent and warrant with respect to
FRP, in each case to each of the Banks, as follows:
(a) Organization, Powers. Each Borrower (i) is
duly organized, validly existing and in good standing
under the laws of the State of Delaware, (ii) has the
requisite power and authority to own its property and
assets and to carry on its business as now conducted
and as proposed to be conducted, and (iii) is qualified
to do business in every jurisdiction where such
qualification is required, except where the failure so
to qualify would not have a material adverse effect on
its condition, financial or otherwise. Each Borrower
has the power to execute, deliver and perform its
obligations under this Agreement and the other Loan
Documents to which it is or is to be a party, to borrow
hereunder and to execute and deliver any Promissory
Notes to be delivered by it. Each Borrower has all
requisite corporate or partnership power, and has all
material governmental licenses, authorizations,
consents and approvals necessary to own its own assets
and carry on its business as now being or as proposed
to be conducted.
(b) Authorization. The execution, delivery and
performance of this Agreement (including, without
limitation, performance of the obligations set forth in
Section 5.1(k)) and the other Loan Documents to which
each Borrower is or is to be, a party and the
borrowings hereunder (i) have been duly authorized by
all requisite corporate or partnership and, if
required, stockholder or partner, action on the part of
each Borrower, as the case may be, and (ii) will not
(A) violate (x) any Governmental Rule or the
certificate or articles of incorporation or limited
partnership or other constitutive documents or the By-
laws, partnership agreement or regulations of such
Person or (y) any provisions of any indenture,
agreement or other instrument to which such Person is a
party, or by which such Person or any of their
respective properties or assets are or may be bound,
(B) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or
both) a default under any indenture, agreement or other
instrument referred to in (ii)(A)(y) above or
(C) result in the creation or imposition of any Lien,
charge or encumbrance of any nature whatsoever upon any
property or assets of such Person, except as
contemplated by the Security Agreements.
(c) Governmental Approvals. Except for those
consents, approvals and registrations listed on
Schedule IV hereto, each of which has been obtained and
is in full force and effect, no registration with or
consent or approval of, or other action by, any
Governmental Authority is or will be required in
connection with the execution, delivery and performance
by either Borrower of this Agreement or any other Loan
Document to which it is, or is to be, a party or the
borrowings hereunder by either Borrower. Other than
routine authorizations, permissions or consents which
are of a minor nature and which are customarily granted
in due course after application or the denial of which
would not materially adversely affect the business,
financial condition or operations of either Borrower,
such Person has all franchises, licenses, certificates,
authorizations, approvals or consents from all
national, state and local governmental and regulatory
authorities required to carry on its business as now
conducted and as proposed to be conducted.
(d) Enforceability. This Agreement and each of
the other Loan Documents to which it is a party
constitutes a legal, valid and binding obligation of
each Borrower, in each case enforceable in accordance
with its respective terms (subject, as to the
enforcement of remedies against such Person, to
applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting creditors' rights
against such Person generally in connection with the
bankruptcy, reorganization or insolvency of such Person
or a moratorium or similar event relating to such
Person).
(e) Financial Statements. FTX has heretofore
furnished to each of the Banks consolidated balance
sheets and statements of operations and changes in
retained earnings and cash flow as of and for the
fiscal years ended December 31, 1993 and 1994, all
audited and certified by Arthur Andersen LLP,
independent public accountants, included in FTX's
Annual Report on Form 10-K for the year ended
December 31, 1994 (the "1994 Form 10-K"), and unaudited
consolidated balance sheets and statements of
operations and cash flow as of and for the fiscal
quarter ended March 31, 1995 included in FTX's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995. In addition, FRP has heretofore
furnished to each of the Banks consolidated balance
sheets and statements of operations and cash flow for
FRP as of and for the fiscal years ended December 31,
1993 and 1994, all audited and certified by Arthur
Andersen LLP and unaudited consolidated balance sheets
and statements of operations and cash flow for FRP as
of and for the fiscal quarter ended March 31, 1995.
All such balance sheets and statements of operations
and cash flow present fairly the financial condition
and results of operations of FTX and its Subsidiaries
or of FRP and its Subsidiaries, as applicable, as of
the dates and for the periods indicated. Such
financial statements and the notes thereto disclose all
material liabilities, direct or contingent, of FTX and
its Subsidiaries or of FRP and its Subsidiaries, as
applicable, as of the dates thereof which are required
to be disclosed in the footnotes to financial
statements prepared in accordance with GAAP. The
financial statements referred to in this Section 3.1(e)
have been prepared in accordance with GAAP. There has
been no material adverse change since December 31,
1994, in the businesses, assets, operations, prospects
or condition, financial or otherwise, of (i) FTX,
(ii) FRP, (iii) FTX and its Subsidiaries taken as a
whole or (iv) FRP and its Subsidiaries taken as a
whole.
(f) Litigation; Compliance with Laws; etc.
(i) Except as disclosed in the 1994 Form 10-K and any
subsequent reports filed as of 20 days prior to the
Closing Date with the SEC on Form 10-Q or Form 8-K
which have been delivered to the Banks, there are no
actions, suits or proceedings at law or in equity or by
or before any governmental instrumentality or other
agency or regulatory authority now pending or, to the
knowledge of the Borrowers, threatened against or
affecting the Borrowers or any Subsidiary or the
businesses, assets or rights of the Borrowers or any
Subsidiary (i) which involve this Agreement or any of
the other Loan Documents or any of the transactions
contemplated hereby or thereby or the collateral for
the Loans or (ii) as to which there is a reasonable
possibility of an adverse determination and which, if
adversely determined, could, individually or in the
aggregate, materially impair the ability of FTX or FRP
to conduct its business substantially as now conducted,
or materially and adversely affect the businesses,
assets, operations, prospects or condition, financial
or otherwise, of FTX or FRP, or impair the validity or
enforceability of, or the ability of FTX or FRP to
perform its obligations under, this Agreement or any of
the other Loan Documents to which it is a party.
(ii) Neither the Borrowers nor any Subsidiary is
in violation of any Governmental Rule, or in default
with respect to any judgment, writ, injunction, decree,
rule or regulation of Governmental Authority, where
such violation or default could result in a Material
Adverse Effect.
(g) Title, etc. The Borrowers and the
Subsidiaries have good and valid title to their
respective material properties, assets and revenues
(exclusive of oil, gas and other mineral properties on
which no development or production activities are being
conducted following discovery of commercially
exploitable reserves), free and clear of all Liens
except such Liens as are permitted by Section 5.2(d)
and except for covenants, restrictions, rights,
easements and minor irregularities in title which do
not individually or in the aggregate interfere with the
occupation, use and enjoyment by the respective
Borrower or the respective Subsidiary of such
properties and assets in the normal course of business
as presently conducted or materially impair the value
thereof for use in such business.
(h) Federal Reserve Regulations; Use of Proceeds.
(i) Neither of the Borrowers nor any Subsidiary is
engaged principally, or as one of its important
activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.
(ii) No part of the proceeds of the Loans will be
used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, for any
purpose which entails a violation of, or which is
inconsistent with, the provisions of the Regulations of
the Board, including, without limitation,
Regulations G, U or X thereof.
(iii) Each Borrower will use the proceeds of all
Loans made to it to refinance borrowings by it under
the Existing Credit Agreement and for its ongoing
general corporate purposes and for acquisition
transactions permitted hereunder (including
acquisitions of FRP units).
(iv) As of the Funding Date (A) the collateral
subject to the FTX Security Agreement (1) constitutes
Margin Stock with a current market value (within the
meaning of Regulation U) at least equal to twice the
aggregate amount of credit secured, directly or
indirectly (within the meaning of Regulation U), by
such Margin Stock on such date or (2) constitutes
collateral which is not Margin Stock ("Other
Collateral") with a current market value (within the
meaning of Regulation U) at least equal to twice the
aggregate amount of credit secured, directly or
indirectly (within the meaning of Regulation U), by
such Other Collateral (including, in each case, as
credit secured for such purpose the entire amount of
the Commitments to make Loans to FTX), and (B) there
are no Liens on such Margin Stock or such Other
Collateral, as the case may be (other than those
created by the FTX Security Agreement). As of the date
of each borrowing made by FRP, not more than 25% of the
value of the assets directly or indirectly securing the
Loans and Permitted Secured Swaps of FRP constitutes
Margin Stock.
(i) Taxes. The Borrowers and the Subsidiaries
have filed or caused to be filed all material Federal,
state, local and foreign tax returns which are required
to be filed by them, and have paid or caused to be paid
all taxes shown to be due and payable on such returns
or on any assessments received by any of them, other
than any taxes or assessments the validity of which the
relevant Borrower or Subsidiary is contesting in good
faith by appropriate proceedings, and with respect to
which the relevant Borrower or Subsidiary shall, to the
extent required by GAAP, have set aside on its books
adequate reserves.
(j) Employee Benefit Plans. Each of the
Borrowers and its ERISA Affiliates is in compliance in
all material respects with the applicable provisions of
ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has
occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events, could
materially and adversely affect the financial condition
and operations of the Borrowers and the ERISA
Affiliates, taken as a whole. The present value of all
benefit liabilities under each Plan, determined on a
plan termination basis (based on those assumptions used
for financial disclosure purposes in accordance with
Statement of Financial Accounting Standards No. 87 of
the Financial Accounting Standards Board ("SFAS 87")
did not, as of the last annual valuation date
applicable thereto, exceed by more than $5,000,000 the
value of the assets of such Plan, and the present value
of all benefit liabilities of all underfunded Plans,
determined on a plan termination basis (based on those
assumptions used for financial disclosure purposes in
accordance with SFAS 87) did not, as of the last annual
valuation dates applicable thereto, exceed by more than
$5,000,000 the value of the assets of all such
underfunded Plans.
(k) Investment Company Act. Neither Borrower nor
any Subsidiary is an "investment company" as defined
in, or subject to regulation under, the Investment
Company Act of 1940, as amended from time to time.
(l) Public Utility Holding Company Act. Neither
Borrower nor any Subsidiary is a "holding company", or
a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as
amended from time to time.
(m) Subsidiaries. Schedule III constitutes a
complete and correct list, as of the Closing Date or
the date of any update thereof required by
Section 5.1(a)(6), of all Restricted Subsidiaries with
at least $1,000,000 in total assets, indicating the
jurisdiction of incorporation or organization of each
corporation or partnership and the percentage of shares
or units owned on such date directly or indirectly by
FTX in each. Each entity shown as a parent company
owns on such date, free and clear of all Liens (other
than the Liens required or permitted by Section
3.1(o)), the percentage of voting shares or partnership
interests outstanding of its Subsidiaries shown on
Schedule III, and all such shares or partnership
interests are validly issued and fully paid.
(n) Environmental Matters. (1) The properties
owned or operated by the Borrowers and their
Subsidiaries and by IMC-Agrico (the "Properties") and
all operations of the Borrowers and their Subsidiaries
and IMC-Agrico are in compliance, and in the last three
years have been in compliance, with all Environmental
Laws and all necessary Environmental Permits have been
obtained and are in effect, except to the extent that
such non-compliance or failure to obtain any necessary
permits, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect;
(2) there have been no Releases or threatened
Releases at, from, under or proximate to the
Properties or otherwise in connection with the
operations of the Borrowers or their Subsidiaries
or IMC-Agrico, which Releases or threatened
Releases, in the aggregate, could reasonably be
expected to result in a Material Adverse Effect;
(3) neither the Borrowers nor any of their
Subsidiaries nor IMC-Agrico has received any
notice of an Environmental Claim in connection
with the Properties or the operations of the
Borrowers or their Subsidiaries or IMC-Agrico or
with regard to any Person whose liabilities for
environmental matters the Borrowers or their
Subsidiaries or IMC-Agrico has retained or
assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in the
aggregate, could reasonably be expected to result
in a Material Adverse Effect, nor do the Borrowers
or their Subsidiaries have reason to believe that
any such notice will be received or is being
threatened; and
(4) Hazardous Materials have not been
transported from the Properties, nor have
Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of the
Properties in a manner that could give rise to
liability under any Environmental Law, nor have
the Borrowers or their Subsidiaries or IMC-Agrico
retained or assumed any liability, contractually,
by operation of law or otherwise, with respect to
the generation, treatment, storage or disposal of
Hazardous Materials, which transportation,
generation, treatment, storage or disposal, or
retained or assumed liabilities, in the aggregate,
could reasonably be expected to result in a
Material Adverse Effect.
The representations set forth in this Section 3.1(n) with
respect to IMC-Agrico are given to the best knowledge after
due inquiry of the Borrowers and their Subsidiaries (which
shall be deemed to include the actual knowledge of Crescent
Technology, Inc.).
(o) Security Documents. (i) The FTX Security
Agreement is effective to create in favor of the FTX
Collateral Agent, for the ratable benefit of the
parties to the FTX Intercreditor Agreement, a legal,
valid and enforceable security interest in the Shared
Collateral (as defined in the FTX Security Agreement);
the Shared Collateral has been delivered to the FTX
Collateral Agent on or before the Funding Date and the
FTX Security Agreement constitutes a fully perfected
first priority Lien on, and security interests in, all
right, title and interest of the pledgors thereunder in
such Shared Collateral and the proceeds thereof, in
each case prior and superior in right to any other
Person subject to the restriction on conversion of Unit
Equivalents referred to in Section 5.2(d)(viii) and
Section 27 of the FTX Security Agreement.
(ii) The FRP Security Agreement is effective to
create in favor of the FRP Collateral Agent, for the
ratable benefit of the Banks, a legal, valid and
enforceable security interest in the Collateral (as
defined in the FRP Security Agreement) and, when
financing statements in appropriate form are filed in
the offices specified on Schedule VI hereto, the FRP
Security Agreement shall constitute a fully perfected
Lien on, and security interest in, all right, title and
interest of the grantor thereunder in such Collateral
and the proceeds thereof, in each case prior and
superior in right to any other Person, except as
provided in Articles 34, 35 and 36 of the FRP Security
Agreement.
(p) No Material Misstatements. No information,
report (including any exhibit, schedule or other
attachment thereto or other document delivered in
connection therewith), financial statement, exhibit or
schedule prepared or furnished by either Borrower to
the Administrative Agent or any Bank in connection with
this Agreement or any of the other Loan Documents or
included therein or any information provided to
Cravath, Swaine & Moore in connection with the
preparation of the environmental due diligence summary
memorandum referred to in paragraph (m) of Article IV
contained or contains any material misstatement of fact
or omitted or omits to state any material fact
necessary to make the statements therein, taken as a
whole in the light of the circumstances under which
they were made, not misleading.
ARTICLE IV
Conditions to Initial Credit Event
Subject to satisfaction of the conditions to each
Credit Event required by Section 6.1, the Borrowers may not
borrow Loans hereunder until the first date (the "Funding
Date") upon which the following conditions have been
satisfied:
(a) Each Bank shall have received its duly
executed Promissory Notes complying with the provisions
of Section 2.4.
(b) The Administrative Agent and the Documentary
Agent shall have received, on behalf of themselves and
the Banks, a favorable written opinion of (i) the
General Counsel of FTX, substantially to the effect set
forth in Exhibit H, (ii) Davis Polk & Wardwell, counsel
for the Borrowers, substantially to the effect set
forth in Exhibit I and (iii) Liskow & Lewis, special
Louisiana counsel for the Borrowers, substantially to
the effect set forth in Exhibit J, in each case
(A) dated the Funding Date, (B) addressed to the Agents
and the Banks, and (C) covering such other matters
relating to the Restructuring, the Loan Documents and
the transactions contemplated thereby as the
Administrative Agent and the Documentary Agent shall
reasonably request, and the Borrowers hereby instruct
such counsel to deliver such opinions.
(c) All legal matters incident to this Agreement,
the borrowings and extensions of credit hereunder and
the other Loan Documents shall be satisfactory to the
Banks and to Cravath, Swaine & Moore, special counsel
for the Agents.
(d) The Administrative Agent and the Documentary
Agent shall have received (i) a copy of the certificate
of incorporation or partnership certificate (as
applicable), including all amendments thereto, of each
Borrower, certified as of a recent date by the
Secretary of State of the state of its organization,
and a certificate as to the good standing of each
Borrower as of a recent date, from such Secretary of
State; (ii) a certificate of the Secretary or Assistant
Secretary of each Borrower dated the Funding Date and
certifying (A) that attached thereto is a true and
complete copy of the by-laws or partnership agreement
(as applicable) of such Borrower as in effect on the
Funding Date and at all times since a date prior to the
date of the resolutions described in clause (B) below,
(B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors
of such Borrower (in the case of FRP, the Board of
Directors of its managing general partner) authorizing
the execution, delivery and performance of the Loan
Documents to which such Person is a party and the
borrowings hereunder, and that such resolutions have
not been modified, rescinded or amended and are in full
force and effect, (C) that the certificate of
incorporation and by-laws or partnership certificate
and partnership agreement (as applicable) of such
Borrower have not been amended since the date of the
last amendment thereto shown on the certificate of good
standing furnished pursuant to clause (i) above or the
date of the certificate furnished pursuant to clause
(ii) above, as applicable, and (D) as to the incumbency
and specimen signature of each officer executing any
Loan Document or any other document delivered in
connection herewith on behalf of such Borrower; (iii) a
certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (ii)
above; and (iv) such other documents as the Banks or
Cravath, Swaine & Moore, special counsel for the
Agents, may reasonably request.
(e) The Administrative Agent and the Documentary
Agent shall have received a certificate, dated the
Funding Date and signed by a Financial Officer of each
Borrower, confirming compliance with the conditions
precedent set forth in paragraphs (i) and (iii) of
Section 6.1.
(f) The Administrative Agent shall have received
all fees and other amounts due and payable on or prior
to the Funding Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrowers
hereunder or under any other Loan Document.
(g) The FTX Security Agreement shall have been
duly executed by the parties thereto and delivered to
the FTX Collateral Agent and shall be in full force and
effect, and the Unit Equivalents (as defined in the FRP
Partnership Agreement) in FRP owned by FTX and required
to be pledged under the FTX Security Agreement shall
have been duly and validly pledged thereunder to the
FTX Collateral Agent for the ratable benefit of the
parties to the FTX Intercreditor Agreement.
(h) The FRP Security Agreement shall have been
duly executed by the parties thereto and shall have
been delivered to the FRP Collateral Agent and shall be
in full force and effect on such date and each document
(including each Uniform Commercial Code financing
statement) required by law or reasonably requested by
the Administrative Agent to be filed, registered or
recorded in order to create in favor of the FRP
Collateral Agent for the benefit of the Banks a valid,
legal and perfected first-priority security interest in
and lien on the Collateral described in such agreement
(subject only to the Liens described in
Section 5.2(d)(viii) of the FRP Security Agreement and
Articles 34, 35 and 36 of the FRP Security Agreement
and Schedule A to the FRP Security Agreement) shall
have been delivered to the Collateral Agent.
(i) The Restructuring shall have been completed
on a generally tax-free basis (subject to exceptions
approved by the Administrative Agent and the
Documentary Agent), including arrangements in
connection with the Restructuring with respect to
existing indebtedness of FTX, FRP, FCX and FI, all on
terms substantially the same as those described in
Schedule XI or otherwise satisfactory to the Required
Banks (including all tax, accounting, corporate and
partnership matters), and the Administrative Agent and
the Documentary Agent shall have received satisfactory
opinions of counsel with respect to the Restructuring,
its tax status and related matters as they shall
reasonably request.
(j) In connection with the Restructuring, all
Debt of FTX shall have been repaid and cancelled (or,
in the case of the Existing Credit Agreement, refunded
by borrowings hereunder) and all Guarantees of Debt by
FTX (other than the Guarantees referred to in
Section 5.2(g)(xi)) shall have been released.
(k) Closing and satisfaction of the conditions to
initial borrowing under a new $200,000,000
Chemical/Chase Bank credit facility for FI and FCX and
the amendment and restatement of the existing
$550,000,000 Chemical/Chase Bank credit facility for FI
shall have occurred substantially simultaneously with
the Funding Date.
(l) All outstanding loans under the Existing
Credit Agreement shall have been repaid in full and the
Existing Credit Agreement and the commitments of the
banks party thereto shall have been terminated.
(m) The Administrative Agent shall have received
an environmental due diligence summary memorandum in
form, scope and substance reasonably satisfactory to
the Banks, from Cravath, Swaine & Moore as to certain
environmental hazards, liabilities or Remedial Action
to which IMC-Agrico, the Borrowers or their
Subsidiaries may be subject.
(n) The Borrowers shall have delivered to the
Administrative Agent statements in conformity with the
requirements of Federal Reserve Form U-1 referred to in
Regulation U.
(o) The Stock Purchase Agreement shall be in full
force and effect in the form as in effect on the
Closing Date or as amended as permitted by
Section 5.2(t).
ARTICLE V
Covenants
SECTION 5.1. Affirmative Covenants of the
Borrowers. Each of the Borrowers covenants and agrees with
each Bank and Agent that from and after the Funding Date and
so long as this Agreement shall remain in effect and until
the Commitments have been terminated and the principal of
and interest on each Loan, all fees and all other expenses
or amounts payable under any Loan Document shall have been
paid in full, that, unless the Required Banks otherwise
provide prior written consent:
(a) Financial Statements, etc. The Borrowers
shall furnish each Bank:
(1) within 95 days after the end of each
fiscal year, a consolidated balance sheet of such
Borrower and its Subsidiaries and of IMC-Agrico as
at the close of such fiscal year and consolidated
statements of operation and changes in retained
earnings or partners' capital and cash flow of it
and its Subsidiaries and of IMC-Agrico for such
year, with the opinion thereon of Arthur Andersen
LLP (Ernst & Young LLP, in the case of IMC-Agrico)
or other independent public accountants of
national standing selected by it or IMC-Agrico, as
applicable, to the effect that such consolidated
financial statements fairly present the financial
condition and results of operations of such
Borrower and IMC-Agrico, as applicable, on a
consolidated basis in accordance with GAAP
consistently applied, except as disclosed in such
auditor's report;
(2) within 50 days after the end of each of
the first three quarters of each of its fiscal
years, a consolidated balance sheet of such
Borrower and its Subsidiaries and of IMC-Agrico as
at the end of such quarter and consolidated
statements of income of it and its Subsidiaries
and of IMC-Agrico, for such quarter and for the
period from the beginning of the fiscal year to
the end of such quarter, certified in the case of
each Borrower by a Financial Officer of FTX as
fairly presenting the financial condition and
results of operations of the Borrowers on a
consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end
audit adjustments;
(3) promptly after their becoming available,
(a) copies of all financial statements, reports
and proxy statements which such Borrower shall
have sent to its stockholders or unitholders
generally, (b) copies of all registration
statements (excluding registration statements
relating to employee benefit plans) and regular
and periodic reports, if any, which it shall have
filed with the SEC, or any governmental agency
substituted therefor, and (c) if requested by any
Bank, copies of each annual report filed with any
Governmental Authority pursuant to ERISA with
respect to each Plan of such Borrower or any of
the Subsidiaries;
(4) promptly upon the occurrence of any
Default or Event of Default, the occurrence of any
default under any other Loan Document, the
commencement of any proceeding regarding the
Borrowers or any of their Subsidiaries or IMC-
Agrico under any Federal or state bankruptcy law,
any other development that has resulted in, or
could reasonably be expected to result in, a
Material Adverse Effect, notice thereof,
describing the same in reasonable detail;
(5) at the time of provision of the financial
statements referred to in clauses (1) and (2)
above, an update of Schedule III to correct, add
or delete any required information; and
(6) from time to time, such further
information regarding the business, affairs and
financial condition of the Borrowers or any
Subsidiary or IMC-Agrico as any Bank may
reasonably request.
At the time the Borrowers furnish financial statements
pursuant to the foregoing clauses (1) and (2), FRP will
also furnish each Bank a certificate signed by its
Treasurer or other authorized Financial Officer setting
forth the calculation of: (a) its current ratio as
determined in accordance with Section 5.2(e), (b) its
EBITDA Ratio as determined in accordance with
Section 5.2(f) and (c) its Debt to Capital Ratio
determined in accordance with Section 5.2(h) and the
Borrowers will furnish a certificate by their
Treasurers or other authorized Financial Officer
certifying that no Default or Event of Default has
occurred, or if such a Default or Event of Default has
occurred, specifying the nature and extent thereof and
any corrective action taken or proposed to be taken
with respect thereto.
(b) Taxes and Claims. The Borrowers shall, and
shall cause each of its Subsidiaries to, pay and
discharge all taxes, assessments and governmental
charges or levies, imposed upon it or upon its income
or profits, or upon any property belonging to it, prior
to the date on which material penalties attach thereto;
provided that neither Borrower nor any Subsidiary shall
be required to pay any such tax, assessment, charge or
levy, the payment of which is being contested in good
faith by proper proceedings and with respect to which
such Borrower or such Subsidiary shall have, to the
extent required by GAAP, set aside on its books
adequate reserves and such contest operates to suspend
collection of the contested obligation, tax, assessment
or charge and enforcement of a Lien.
(c) Maintenance of Existence; Conduct of
Business. Each Borrower shall preserve and maintain
its corporate or partnership existence and all its
rights, privileges and franchises necessary or
desirable in the normal conduct of its business;
provided that nothing herein shall prevent any
transaction permitted by Section 5.2(c).
(d) Compliance with Applicable Laws. Each
Borrower shall, and shall cause each of its
Subsidiaries to, comply with the requirements of all
applicable laws, rules, regulations and orders of any
Governmental Authority, a breach of which would
materially and adversely affect its consolidated
financial condition or business, except where contested
in good faith and by proper proceedings and with
respect to which such Borrower or Subsidiary shall
have, to the extent required by GAAP, set aside on its
books adequate reserves.
(e) Litigation. The Borrowers shall promptly
give to each Bank notice in writing of all litigation
and all proceedings before any Governmental Authority
or arbitration authorities affecting the Borrowers or
any Subsidiary or IMC-Agrico, except those which, if
adversely determined, do not relate to the Loan
Documents and which would not have a material adverse
effect on the business, assets, operations or financial
condition of the Borrowers or IMC-Agrico or the
Borrowers' ability to comply with their obligations
under the Loan Documents.
(f) ERISA. Each Borrower shall, and shall cause
each of its Subsidiaries to, comply in all material
respects with the applicable provisions of ERISA and
the Code and furnish to the Administrative Agent as
soon as possible, and in any event within 30 days after
any Responsible Officer of the Borrowers or any ERISA
Affiliate knows or has reason to know that, any ERISA
Event has occurred that alone or together with any
other ERISA Event could reasonably be expected to
result in liability of the Borrowers in an aggregate
amount exceeding $25,000,000 or requires payment
exceeding $10,000,000 in any year, a statement of a
Financial Officer of such Borrower setting forth
details as to such ERISA Event and the action that such
Borrower proposes to take with respect thereto.
(g) Compliance with Environmental Laws. Each
Borrower shall comply, and cause its Subsidiaries and
all lessees and other Persons occupying the Properties
to comply, in all material respects with all
Environmental Laws and Environmental Permits applicable
to its operations and Properties; obtain and renew all
material Environmental Permits necessary for its
operations and Properties; and conduct any Remedial
Action in accordance with Environmental Laws; provided,
however, that none of the Borrowers or any of their
Subsidiaries shall be required to undertake any
Remedial Action to the extent that its obligation to do
so is being contested in good faith and by proper
proceedings and appropriate reserves are being
maintained with respect to such circumstances.
(h) Preparation of Environmental Reports. If a
default caused by reason of a breach of Section 3.1(n)
or 5.1(g) shall have occurred and be continuing, at the
request of the Required Banks through the
Administrative Agent, the Borrowers shall provide to
Banks within 45 days after such request, at the expense
of the Borrowers, an environmental site assessment
report for the Properties (which are the subject of
such default) prepared by an environmental consulting
firm acceptable to the Administrative Agent, indicating
the presence or absence of Hazardous Materials and the
estimated cost of any compliance or Remedial Action in
connection with such Properties.
(i) Insurance. The Borrowers and each Restricted
Subsidiary shall (i) keep its insurable properties
adequately insured at all times; (ii) maintain such
other insurance, to such extent and against such risks,
including fire, flood and other risks insured against
by extended coverage, as is customary with companies in
the same or similar businesses; (iii) maintain in full
force and effect public liability insurance against
claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use
of any properties owned, occupied or controlled by it
in such amount as it shall reasonably deem necessary;
and (iv) maintain such other insurance as may be
required by law.
(j) Access to Premises and Records. The
Borrowers and each Subsidiary shall maintain financial
records in accordance with GAAP, and, at all reasonable
times and as often as any Bank may reasonably request,
permit representatives of any Bank to have access to
its financial records and its premises and to the
records and premises of any of its Subsidiaries and to
make such excerpts from and copies of such records as
such representatives deem necessary and to discuss its
affairs, finances and accounts with its officers and
its independent certified public accountants or other
parties preparing consolidated or consolidating
statements for it or on its behalf.
(k) Further Assurances. Each Borrower shall, and
shall cause its Subsidiaries to, execute any and all
further documents, financing statements, agreements and
instruments, and take all further actions (including
filing Uniform Commercial Code financing statements),
which may be required under applicable law, or which
the Required Banks, the Administrative Agent or the
Documentary Agent may reasonably request, in order to
effectuate the transactions contemplated by this
Agreement and the other Loan Documents and in order to
grant, preserve, protect and perfect the validity and
first priority of the security interests created by the
Security Agreements. The Borrowers agree to provide
such evidence as the Collateral Agent shall reasonably
request as to the perfection and priority status of
each such security interest and Lien.
(l) Covenants Regarding FRP. FTX shall cause FRP
to perform the covenants relating to FRP set forth in
Sections 5.1 and 5.2.
SECTION 5.2. Negative Covenants of the Borrowers.
Each of the Borrowers covenants and agrees with each Bank
and Agent that, from and after the Funding Date and so long
as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and
interest on each Loan, all fees and all other expenses or
amounts payable under any Loan Document have been paid in
full, that, without the prior written consent of the
Required Banks:
(a) Conflicting Agreements. Each Borrower shall
not and shall cause its Restricted Subsidiaries not to
enter into any agreement containing any provision which
would be violated or breached by the performance of
their obligations under any Loan Document or under any
instrument or document delivered or to be delivered by
them hereunder or thereunder or in connection herewith
or therewith, including any agreement with any Person
which would prohibit or restrict (i) in the case of FRP
and the other Restricted Subsidiaries and IMC-Agrico,
the payments of dividends or other distributions or
(ii) the ability of such entities to create Liens on
any of their assets (other than assets which are
subject to Liens permitted pursuant to paragraphs (ii),
(iii), (iv), (vi), (vii) and (viii) of Section 5.2(d)
and extensions and renewals and replacements thereof to
the extent permitted pursuant to Section 5.2(d)(x) and
the Liens permitted by paragraphs (ii) and (v) of
Section 5.2(r)); provided that IMC-Agrico may be
subject to negative pledge, dividend payment and
financial covenant provisions no more restrictive than
those in effect on the Closing Date.
(b) Hedge Transactions. The Borrowers and the
Restricted Subsidiaries will enter into or become
obligated with respect to Hedge Agreements only in the
ordinary course of business to hedge or protect against
actual or reasonably anticipated exposures and not for
speculation.
(c) Consolidation or Merger; Disposition of
Assets and Capital Stock. Each Borrower shall not, and
shall not permit any Restricted Subsidiary or IMC-
Agrico to, merge into or consolidate with any other
Person or permit any other Person to merge into or
consolidate with it, or sell, lease, transfer or
otherwise dispose of (in one transaction or a series of
transactions) all or any substantial part of its assets
(whether now owned or hereafter acquired) or any
capital stock of any Restricted Subsidiary, except for
(i) the investments permitted by Section 5.2(r),
(ii) dispositions of accounts receivable and
dispositions of inventory in the ordinary course of
business, (iii) dispositions of obsolete or worn-out
property, or real estate not used or useful in its
business, (iv) subject to Section 5.2(o) and (p),
dispositions of assets by the Borrowers or a Restricted
Subsidiary to another Restricted Subsidiary or a
Borrower, (v) subject to Section 5.2(l), dispositions
of assets by a Borrower or a Restricted Subsidiary to a
Third Party, (vi) to the extent permitted by
Section 5.2(q), the payment of dividends in cash or
kind by a Borrower or any Restricted Subsidiary, (vii)
subject to Section 2.7(b), sale and leaseback
transactions, (viii) the transactions comprising the
Restructuring and (ix) investments in Permitted
Investments and dispositions thereof; and except that:
(x) the Borrowers or any Restricted
Subsidiary may merge or liquidate any corporation
(other than, in the case of a Restricted
Subsidiary, FTX or FRP) into itself;
(y) any Restricted Subsidiary (other than
FRP) may be merged into any other corporation;
provided that such corporation, immediately
following such merger, shall be deemed a
Restricted Subsidiary; and
(z) subject to Sections 2.7(b) and 5.2(j),
the Borrowers or any Restricted Subsidiary may
sell or otherwise dispose of (including by merger
or consolidation) any assets or securities of any
Subsidiary (other than (A) a 50.1% ownership
interest in FRP on a fully diluted basis pledged
pursuant to the FTX Security Agreement, (B) a
50.1% ownership interest in Main Pass pledged
pursuant to the FRP Security Agreement, (C) the
applicable percentage ownership interest in IMC-
Agrico set forth on Schedule IX hereto pledged
pursuant to the FRP Security Agreement and (D)
non-cash proceeds pledged under the Security
Agreements as required by Section 2.7(b));
provided, however, that in the case of a merger
permitted by clause (x) above, immediately thereafter
and giving effect thereto, such Borrower or, as the
case may be, a Restricted Subsidiary would be the
surviving corporation and, in the case of a merger
permitted by clause (x) or clause (y) above or of any
disposition of assets or securities permitted by
clause (z) above, no Default or Event of Default would,
immediately thereafter and giving effect thereto, have
occurred and be continuing. Each sale or other
disposition permitted by clause (z) above shall be
permitted only if the Borrower or the respective
Restricted Subsidiary shall receive fair consideration
therefor, as determined by the Board of Directors of
the Borrower or of such Restricted Subsidiary, as the
case may be, and certified by its Treasurer or another
of its Financial Officers to the Administrative Agent.
It is understood and agreed that no transaction
pursuant to a Deemed Lease (as in effect on the Closing
Date or as amended from time to time with the approval
of the Administrative Agent) shall be considered a
disposition of assets within the meaning of this
Section 5.2(c).
(d) Liens. Each Borrower shall not, nor shall it
permit any of its Restricted Subsidiaries to, create,
incur, assume, or suffer to exist any Lien upon any of
its respective properties, revenues or assets
(including stock or other securities of any Person,
including any Subsidiary), now owned or hereafter
acquired, except:
(i) required margin deposits on permitted
Hedge Agreements and foreign currency exchange
agreements, surety and appeal bonds and
materialmen's, suppliers', tax and other like
Liens arising in the ordinary course of its or
such Restricted Subsidiary's business securing
obligations which are not overdue or are being
contested in good faith by appropriate proceedings
and as to which adequate reserves have been set
aside on its books to the extent required by GAAP,
Liens arising in connection with workers'
compensation, unemployment insurance and progress
payments under government contracts, and other
Liens incident to the ordinary conduct of its or
such Restricted Subsidiary's business or the
ordinary operation of property or assets and not
incurred in connection with the obtaining of any
Debt or Guarantee;
(ii) Liens on assets or properties not owned
as of the Closing Date by a Borrower or any
Restricted Subsidiary securing only purchase money
Debt of such Borrower or such Restricted
Subsidiary permitted by Section 5.2(g)(vii), which
Liens are limited to the specific property the
purchase of which is financed by such Debt;
(iii) Liens, existing at the time of the
acquisition by a Borrower or any Restricted
Subsidiary of the majority of the capital stock or
all the assets of any other corporation or
existing at the time of the merger of any such
corporation into a Borrower or a Restricted
Subsidiary, on such capital stock or assets so
acquired or on the assets of the corporation so
merged into such Borrower or such Restricted
Subsidiary; provided, however, that such
acquisition or merger (and the discharge of such
Liens referred to in the immediately succeeding
proviso) shall not otherwise result in an Event of
Default or Default; and provided further that all
such Liens shall be discharged within 180 days
after the date of the respective acquisition or
merger;
(iv) Liens in favor of the Administrative
Agent or the Banks or in favor of the FTX
Collateral Agent as provided in the FTX
Intercreditor Agreement and the FTX Security
Agreement, Liens in favor of TCB and the Pel-Tex
Lenders as permitted by the FTX Intercreditor
Agreement, and Liens in favor of the FRP
Collateral Agent as provided in the FRP Security
Agreement, all as contemplated by Section 3.1(o);
(v) Liens listed on Schedule VIII hereto
securing obligations of a Borrower or a Restricted
Subsidiary under Deemed Leases (as in effect on
the Closing Date or as amended from time to time
with the approval of the Administrative Agent);
(vi) Liens (as in effect on the Closing Date)
securing the Pennzoil Obligations on only the
related assets purchased from Pennzoil Company;
(vii) Liens of lessors of property (in such
capacity) leased by a Borrower or a Restricted
Subsidiary pursuant to an Operating Lease or a
permitted Capitalized Lease Obligation, which Lien
in any such case is limited to the property leased
thereunder;
(viii) the reciprocal collateral mortgages and
rights of first refusal granted by FRP on Main
Pass to its joint venture partners, the right of
first offer granted by FRP on IMC-Agrico to IMC,
and the restrictions on conversion of Unit
Equivalents into Depositary Units (as such terms
are defined in the FRP Partnership Agreement) as
in effect on the Closing Date or as modified with
the consent of the Required Banks;
(ix) zoning restrictions, easements, rights-
of-way, restrictions on use of real property and
other similar encumbrances incurred in the
ordinary course of business which, in the
aggregate, are not substantial in amount and do
not materially detract from the value of the
property subject thereto or interfere with the
ordinary conduct of the business of a Borrower or
any of its Subsidiaries; and
(x) extensions, renewals and replacements of
Liens referred to in paragraphs (i), (ii), (iv),
(vii), (viii) and (ix) of this Section 5.2(d);
provided that any such extension, renewal or
replacement Lien shall be limited to the property
or assets covered by the Lien extended, renewed or
replaced and that the obligations secured by any
such extension, renewal or replacement Lien shall
be in an amount not greater than the amount of the
obligations secured by the Lien extended, renewed
or replaced.
(e) Current Ratio. FRP shall not fail to
maintain, as of the last day of each fiscal quarter,
consolidated current assets of FRP (excluding
Nonrestricted Subsidiaries) in an amount at least equal
to the amount of consolidated current liabilities of
FRP (excluding Nonrestricted Subsidiaries). For
purposes hereof, consolidated current assets and
consolidated current liabilities shall be determined in
accordance with GAAP, except that (i) investments in
shares of corporations (other than shares which are,
and which are held as, marketable securities) and
advances to Nonrestricted Subsidiaries and other firms
or companies in which FRP has a material investment,
direct or indirect, or which have a direct or indirect
material investment in FRP, shall not be included in
current assets; (ii) current assets shall be increased
by the available portion of the Commitments which,
under the terms of this Agreement, will, if not sooner
terminated or drawn down by either Borrower, remain
outstanding for at least twelve months following the
time of determination; and (iii) the current portion of
long-term Debt shall not be included in current
liabilities.
(f) EBITDA Ratio. FRP shall not permit its
EBITDA Ratio to be less than 1.25 to 1.00 at the end of
any fiscal quarter.
(g) Debt. Neither Borrower nor any Restricted
Subsidiary shall incur, create, assume or permit to
exist any Debt of any of them except:
(i) the Loans;
(ii) $150,000,000 aggregate principal amount
of FRP's 8-3/4% Senior Subordinated Notes due
2004, but not any extensions, renewals,
replacements or refunding of such Debt;
(iii) Debt secured by the Liens permitted by
Section 5.2(d)(iii); provided that such Debt is
discharged within 180 days of the relevant
acquisition or merger;
(iv) unsecured recourse liabilities (not in
excess of the uncollectible amounts of the
accounts receivable sold) of FRP arising from the
sale of accounts receivable;
(v) unsecured loans and advances between the
Restricted Subsidiaries and to the Restricted
Subsidiaries from FRP;
(vi) unsecured subordinated loans by FTX to
FRP on the terms of Schedule X hereto so long as
no Loans are outstanding to FTX;
(vii) purchase money Debt of FRP secured by
Liens referred to in Section 5.2(d)(ii) not in
excess of the purchase price of the related asset
in each individual case and not in excess of
$25,000,000 principal amount for all such
outstanding purchase money Debt in the aggregate;
(viii) unsecured Debt of FRP with a maturity
less than 90 days pursuant to uncommitted lines of
credit with an outstanding aggregate principal
amount not at any time in excess of $10,000,000;
(ix) subject to Section 2.7(b), additional
Debt (including Guarantees of any Debt of a Third
Person and Capitalized Lease Obligations) of FRP
with an outstanding aggregate principal amount not
at any time in excess of $50,000,000 which shall,
except for Liens of Capitalized Lease Obligations
permitted by Section 5.2(d)(ii) or (vii), be
unsecured;
(x) additional Debt of FRP fully subordinated
to the Loans on terms approved by the
Administrative Agent, the net proceeds of which
shall, to the extent required by Section 2.7(b),
permanently reduce the Commitments and be applied
to repay any outstanding Loans; and
(xi) the Guarantee of the FM Properties
Indebtedness (not in excess of $68,811,000
aggregate principal amount) by FTX pursuant to the
FTX Guaranty Agreement and FTX's own direct non-
principal and interest obligations (including
joint and several liability with FM Properties)
under the FM Credit Agreement and the
documentation evidencing the other FM
Indebtedness.
(h) Debt to Capital Ratio. FRP shall not permit
its Debt to Capital Ratio to exceed 65% at the end of
any fiscal quarter.
(i) Subordinated Debt Payments. The Borrowers
and the Restricted Subsidiaries shall not, directly or
indirectly, make any principal payment on, or
repurchase of, any subordinated debt referred to in
clauses (ii) and (x) of Section 5.2(g) with proceeds of
the Loans.
(j) Ownership of Subsidiaries. FTX shall not at
any time directly or indirectly own shares or units of
voting stock or interests having on a fully diluted
basis less than (x) 50.1% ownership interest in FRP and
(y) such voting power as provides effective control of
the policy and direction of FRP. FRP shall not at any
time directly or indirectly have less than a 50.1%
interest on a fully diluted basis in Main Pass or less
than the applicable ownership percentage on a fully
diluted basis of IMC-Agrico set forth on Schedule IX
hereto. FTX shall own its interests in FRP and Agrico
LP, and FRP shall own its interests in Main Pass and
IMC-Agrico (including its interest in Agrico LP), free
and clear of all Liens, except as contemplated by
Section 3.1(o) and Section 5.2(d)(viii). The Borrowers
shall promptly notify the Administrative Agent in the
event there occurs any significant decrease in such
ownership of FRP by FTX and of Main Pass and IMC-Agrico
by FRP below that indicated in the most recent version
of Schedule III and of any decrease in such voting
control or ownership percentage interest below 50.1% or
the required percentage set forth on Schedule IX
hereto, as applicable, in each case on a fully diluted
basis. The ownership by FTX of equity interests in FRP
shall be direct and not through any intervening entity.
The ownership by (i) FRP of its interests in Main Pass
and the FRP Partner and (ii) by the FRP Partner of its
interests in IMC-Agrico shall each be direct and not
through any intervening entity.
(k) Fiscal Year. Each Borrower shall not change
its fiscal year to end on any date other than
December 31.
(l) Investments in Nonrestricted Subsidiaries and
Persons Not Subsidiaries. The Borrowers and their
Restricted Subsidiaries shall not make or permit to
exist (x) any Guarantee by it or a Restricted
Subsidiary or IMC-Agrico of the Debt of any Person
which is not IMC-Agrico (but in the case of IMC-Agrico,
only to the extent permitted by Section 5.2(r)) or a
Restricted Subsidiary, including Nonrestricted
Subsidiaries, FCX and FI (each such Person being a
"Third Party") in excess of available amounts of Debt
of FRP permitted under Section 5.2(g)(ix), or (y) any
loans or advances to, or purchase any stock, other
securities or evidences of indebtedness of, or permit
to exist any investment (whether by transfer of assets
or otherwise) or acquire any investment whatsoever in
or any other payment for the benefit of, any Third
Parties the aggregate outstanding amount of which under
this clause (y) at any time exceeds by more than
$50,000,000 the largest aggregate amount thereof
outstanding at any time in FTX's preceding fiscal year;
provided that, notwithstanding the provisions of
clauses (x) and (y) above, (i) FTX (but not any
Restricted Subsidiary, including FRP, nor IMC-Agrico)
may Guarantee (or be jointly and severally liable with
FM Properties for) the FM Properties Indebtedness as
permitted by Section 5.2(g)(x) on the terms of the
agreements set forth on Schedule VII hereto and provide
an environmental indemnity pursuant to the FM Credit
Agreement, (ii) the Borrowers and the Restricted
Subsidiaries may make investments as permitted under
Section 5.2(r), (iii) FTX may make term loans of up to
$10,000,000 to FM Properties and (iv) the Borrowers and
the Restricted Subsidiaries may invest in Permitted
Investments all of which shall not be included in the
calculation of such $50,000,000 annual limit.
(m) Federal Reserve Regulations. The Borrowers
will not, and will cause their Subsidiaries not to, use
the proceeds of any Loan in any manner that would
result in a violation of, or be inconsistent with, the
provisions of Regulations G, U or X. The Borrowers
will not, and will cause their Subsidiaries not to,
take any action at any time that would (A) result in a
violation of the substitution and withdrawal
requirements of said Regulations, in the event the same
should become applicable to this Agreement or any Loan
or (B) cause the representation and warranty contained
in Section 3.1(h) at any time to be other than true and
correct. In the event that the Borrowers at any time
believe that there exists a reasonable possibility that
they will become unable to make the representation set
forth in Section 3.1(h)(iv), and alternative methods
for complying the Margin Regulations in connection with
this Agreement are available, the banks and the
Borrowers shall promptly enter into negotiations with a
view to amending this Agreement to provide for such
alternative methods of compliance.
(n) Certain Debt Agreements. FRP shall not,
without the prior written consent thereto of the
Required Banks, amend, supplement or change in any
material manner, any of the terms or provisions of any
agreement, note or other instrument governing or
evidencing its 8-3/4% Senior Subordinated Notes Due
2004 which would shorten the maturity, change the
amortization schedule or increase the cost of such
Debt to FRP.
(o) FRP Transfers. FRP shall not make any
contribution or transfer of any substantial portion of
its assets to any Restricted Subsidiary other than a
Wholly-Owned Restricted Subsidiary all equity in which
shall be pledged pursuant to the FRP Security Agreement
to the FRP Collateral Agent as additional security for
the Loans to FRP.
(p) Transactions with Affiliates. Other than the
transactions constituting the Restructuring, the
Borrowers and their Restricted Subsidiaries shall not
sell or transfer any property or assets to, or purchase
or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its
Affiliates (other than among Wholly-Owned Restricted
Subsidiaries), except that as long as no Default or
Event of Default shall have occurred and be continuing,
the Borrowers or any Restricted Subsidiary may engage
in any of the foregoing transactions (i) in the case of
a transaction between a Borrower or a Restricted
Subsidiary of a Borrower and a non-Wholly-Owned
Restricted Subsidiary, the relevant Borrower has
determined that such transaction is in the best
interests of such Borrower and (ii) in the case of any
other transaction between a Borrower or a Restricted
Subsidiary and an Affiliate which is not a Restricted
Subsidiary, at prices and on terms and conditions not
less favorable to the Borrower or such Restricted
Subsidiary than could be obtained on an arm's-length
basis from unrelated third parties.
(q) Equity Payments. The Borrowers shall not
make an Equity Payment if there is then continuing any
Default or Event of Default (or a Default or Event of
Default would result therefrom or exist after giving
effect thereto).
(r) Covenants Regarding IMC-Agrico. (i) The
Borrowers and their Restricted Subsidiaries shall not
make or permit to exist any loans or advances to, or
purchase any stock, other securities or evidences of
indebtedness of, or permit to exist any investment
whatsoever in or make any Guarantee with respect to any
such loans, advances, purchases, investments or
acquisitions of interest made by any Person with
respect to, or any other payment for the benefit of,
IMC-Agrico the aggregate outstanding amount of which
exceeds by more than $50,000,000 the largest aggregate
amount thereof outstanding at any time in FTX's
preceding fiscal year.
(ii) FRP shall not permit IMC-Agrico to incur Debt
in excess of $225,000,000 at any time outstanding, of
which Debt owing to any Persons other than FRP, any
Restricted Subsidiary of FRP, IMC and any Subsidiary of
IMC ("Third Party Debt")(x) shall not at any time
exceed $110,000,000 and (y) may be secured only by
accounts receivable and inventory of IMC-Agrico;
provided that (A) the $25,000,000 principal amount of
Parish of St. James, Louisiana, 7.7% Solid Waste
Disposal Revenue Bonds, Series 1992 (and any refunding
thereof) may be secured by the assets securing such
Bonds as of the Closing Date and (B) other Third Party
Debt of IMC-Agrico not in excess of $50,000,000
aggregate principal amount may be secured by any other
assets of IMC-Agrico.
(iii) FRP (A) shall not permit the FRP Partner to
agree, without the prior written consent of the
Required Banks, (x) to amend Section 6.04(a), (b) or
(d) or Section 6.07 of the IMC-Agrico Partnership
Agreement or any defined term included in either such
Section or (y) to enter into any agreement which
conflicts with either Section which would in the case
of either (x) or (y) dilute the control of FRP Partner
or narrow the scope of the decisions subject to vote or
approval by FRP Partner, (B) shall not consent to any
material change in the nature of business conducted by
IMC-Agrico, (C) shall notify the Administrative Agent
of any proposed amendment to any of the IMC-Agrico
Partnership Agreement or any other material agreement
relating to IMC-Agrico and shall provide a copy of any
such proposed amendment to the Administrative Agent and
(D) shall not, and shall not permit its Subsidiaries
to, in each case without the prior written consent of
the Required Banks, agree to amend any such agreement
if, in the opinion of the Administrative Agent, such
amendment could reasonably be expected to result in a
Material Adverse Effect.
(iv) Neither FTX nor FRP shall permit its
accounting for IMC-Agrico to be other than as a
proportional consolidating interest unless the
Borrowers and the Required Banks have agreed upon
mutually acceptable amendments to the financial
covenants herein.
(v) FTX and FRP shall, to the full extent of
their direct or indirect rights and approvals under the
IMC-Agrico Partnership Agreement, their direct or
indirect membership on the Policy Committee for IMC-
Agrico and otherwise pursuant to their ownership
interests in IMC-Agrico and IMC-Agrico MP, use their
best efforts to cause IMC-Agrico to comply (and shall
not approve or consent to any non-compliance by IMC-
Agrico) with the provisions of Sections 5.1(b), 5.1(c),
5.1(d), 5.1(g), 5.1(i), 5.1(j), 5.2(a), 5.2(d) (with
the liens securing third-party Debt of IMC-Agrico
pursuant to Section 5.2(r)(ii)(y) permitted and
excluding clauses (ii), (iv), (v), (vi) and (viii) from
Section 5.2(d) as applied to IMC-Agrico pursuant to
this Section 5.2(r)(v)) and 5.2(p) as if IMC-Agrico
were a Restricted Subsidiary; provided that, subject to
Section 7.1(g), (h), (i), (j) and (k), FRP shall not be
in Default under this Section 5.2(r)(v) if IMC causes
IMC-Agrico to fail to comply with such Sections and FRP
has not approved or consented to such non-compliance.
(s) Scope of FRP's Business. FRP shall not
materially alter the nature of the business and
activities in which it is engaged as of the Closing
Date.
(t) Covenants Relating to RTZ Transaction.
Without the prior written consent of the Required
Banks, FTX shall not, directly or indirectly, (i) enter
into any amendment or modification of any of the Stock
Purchase Agreement which would impair the ability of
the Borrowers or the Restricted Subsidiaries to perform
all of their respective obligations under the Loan
Documents, (ii) consent to any assignment by RTZ, RTZ
Indonesia or RTZ America of the Stock Purchase
Agreement or their respective obligations thereunder or
(iii) waive any material default by RTZ, RTZ Indonesia
or RTZ America. Subject to the foregoing and the other
terms of the Loan Documents, FTX may enter into and
perform its obligations under the Stock Purchase
Agreement.
ARTICLE VI
Conditions to Credit Events
SECTION 6.1. Conditions Precedent to Each Credit
Event. Each Credit Event shall be subject to the following
conditions precedent:
(i) the representations and warranties on the part
of FTX and FRP contained in the Loan Documents shall be
true and correct in all material respects at and as of
the date of such Credit Event as though made on and as
of such date;
(ii) the Administrative Agent shall have received a
notice of such borrowing as required by Section 2.3;
(iii) no Event of Default shall have occurred and be
continuing on the date of such Credit Event or would
result from such Credit Event;
(iv) the Loans to be made by the Banks on such
date, and the use of the proceeds thereof and the
security arrangements contemplated hereby shall not
result in a violation of Regulation U, Regulation G or
Regulation X, as in effect on the date of such
borrowing. If required by Regulation U as a result of
such use of proceeds, FTX shall have delivered to the
Bank a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in Regulation U.
(v) there shall have been no amendments to the
Certificate of Incorporation or the Certificate of
Limited Partnership, as applicable, or to the By-laws
or Partnership Agreement, as applicable, of FTX or FRP
since the date of the Certificates furnished by the
Borrowers on the Funding Date, other than amendments,
if any, copies of which have been furnished to the
Administrative Agent; and
(vi) there shall be no proceeding for the
dissolution or liquidation of FTX or FRP or any
proceeding to revoke the Certificate of Incorporation
of FTX or to rescind the partnership agreement of FRP
or its respective corporate or partnership existence,
which is pending or, to the knowledge of the Borrowers,
threatened against or affecting FTX or FRP.
SECTION 6.2. Representations and Warranties with
Respect to Credit Events. Each Credit Event shall be deemed
a representation and warranty by the Borrowers that the
conditions precedent to such Credit Event, unless otherwise
waived in accordance herewith, shall have been satisfied.
ARTICLE VII
Events of Default
SECTION 7.1. Events of Default. If any of the
following acts or occurrences (an "Event of Default") shall
occur and be continuing:
(a) default for three or more days in the payment
when due of any principal of any Loan; or
(b) default for five or more days in the payment
when due of any interest on any Loan, or of any other
amount payable under the Loan Documents; or
(c) any representation or warranty made or deemed
made in or in connection with any Loan Document or in
any certificate, letter or other writing or instrument
furnished or delivered to the Banks or the Agents
pursuant to any Loan Document shall prove to have been
incorrect in any material respect when made or
effective or reaffirmed and repeated, as the case may
be; or
(d) default by FTX or FRP in the due observance or
performance of any covenant, condition or agreement in
Section 5.1(a)(4) with respect to notices of Defaults
or Events of Default, 5.1(c) or 5.1(k) of this
Agreement, other than the covenant to preserve and
maintain all of such Person's rights, privileges and
franchises desirable in the normal conduct of its
business; or
(e) default by the Borrowers or any Restricted
Subsidiary in the due observance or performance of any
covenant, condition or agreement in Section 5.2 of this
Agreement other than Section 5.2(k); or
(f) default by the Borrowers or any Restricted
Subsidiary in the due observance or performance of any
other covenant, condition or agreement in the Loan
Documents which shall remain unremedied for 30 days
after written notice thereof shall have been given to
such Borrower by the Administrative Agent or any Bank;
or
(g) either Borrower or any Restricted Subsidiary
or IMC-Agrico shall (i) voluntarily commence any
proceeding or file any petition seeking relief under
Title 11 of the United States Code, as now constituted
or hereafter amended, or any other Federal or state
bankruptcy, insolvency, liquidation or similar law,
(ii) consent to the institution of, or fail to
contravene in a timely and appropriate manner, any
proceeding or the filing of any petition described in
clause (h) below, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian,
sequestrator or similar official for such Borrower or
such Restricted Subsidiary or IMC-Agrico or for a
substantial part of its property or assets, (iv) file
an answer admitting the material allegations of a
petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debt as they
become due or (vii) take any action for the purpose of
effecting any of the foregoing; or
(h) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of
competent jurisdiction seeking (i) relief in respect of
either Borrower or any Restricted Subsidiary or IMC-
Agrico, or of a substantial part of the property or
assets of either Borrower or any Restricted Subsidiary
or IMC-Agrico, under Title 11 of the United States
Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator or similar
official for either Borrower or any Restricted
Subsidiary or IMC-Agrico or for a substantial part of
the property of either Borrower or any Restricted
Subsidiary or IMC-Agrico or (iii) the winding-up or
liquidation of a Borrower or any Restricted Subsidiary
or IMC-Agrico; and such proceeding or petition shall
continue undismissed for 60 days, or an order or decree
approving or ordering any of the foregoing shall
continue unstayed and in effect for 30 days; or
(i) default shall be made with respect to (x) the
Pennzoil Obligations or (y) Hedge Agreements or (z) any
Debt of either Borrower or any Restricted Subsidiary or
IMC-Agrico if the effect of any such default shall be
to accelerate, or to permit the holder or obligee of
any such obligations or Debt (or any trustee on behalf
of such holder or obligee) to accelerate (with or
without notice or lapse of time or both), the maturity
of such Debt, the payment of any net termination value
in respect of Hedge Agreements and/or the payment of
the Pennzoil Obligations, as applicable, in an
aggregate amount in excess of $10,000,000; or any
payment, regardless of amount, of (A) net termination
value on any such obligation in respect of Hedge
Agreements, (B) any deferred purchase amount on the
Pennzoil Obligations and/or (C) any Debt of either
Borrower or a Restricted Subsidiary or of IMC-Agrico,
as applicable, in an aggregate principal amount (or in
the case of a Hedge Agreement, net termination value)
in excess of $10,000,000, shall not be paid when due,
whether at maturity, by acceleration or otherwise
(after giving effect to any period of grace specified
in the instrument evidencing or governing such Debt or
other obligation); or
(j) an ERISA Event shall have occurred with
respect to any Plan or Multi-Employer Plan that, when
taken together with all other ERISA Events, reasonably
could be expected to result in liability of either
Borrower and/or any Restricted Subsidiary and the
Borrowers' ERISA Affiliates in an aggregate amount
exceeding $25,000,000 or requires payments exceeding
$10,000,000 in any year; or
(k) one or more judgments for the payment of money
in an aggregate amount in excess of $10,000,000 shall
be rendered by a court or other tribunal against either
Borrower or any Restricted Subsidiary or IMC-Agrico and
shall remain undischarged for a period of
45 consecutive days during which execution of such
judgment shall not have been effectively stayed; or any
action shall be legally taken by a judgment creditor to
levy upon assets or properties of either Borrower or
any Restricted Subsidiary to enforce any such judgment;
or
(l) any security interest purported to be created
by either Security Agreement shall cease to be, or
shall be asserted by the Borrowers or any of their
Affiliates not to be, a valid, perfected, first
priority security interest in the securities, assets or
properties covered thereby, except to the extent that
any such loss of perfection or priority results from
the failure of the FTX Collateral Agent or the FRP
Collateral Agent to maintain possession of certificates
representing securities pledged under the Security
Agreements to the extent that such pledged securities
are certificated securities; or
(m) there shall have occurred a Change in Control;
then, and in any such event (other than an event with
respect to either Borrower described in paragraph (g)
or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent
may, and at the request of the Required Banks shall, by
written, telecopied, telex or telegraphic notice to the
Borrowers, take one or more of the following actions at
the same or different times: (i) declare the Total
Commitment to be terminated, whereupon the Total
Commitment shall forthwith terminate; (ii) declare the
Loans and all other sums then owing by the Borrowers
under the Loan Documents to be forthwith due and
payable, whereupon all the principal of the Loans so
declared to be due and payable, together with accrued
interest thereon and any unpaid accrued fees and all
other liabilities of the Borrowers accrued hereunder
and under any other Loan Document, shall become and be
immediately due and payable without presentment,
demand, protest or other notice of any kind, all of
which are hereby expressly waived by each Borrower,
anything contained herein or in any Promissory Note to
the contrary notwithstanding or (iii) exercise any or
all the remedies then available under the Security
Agreements; provided, however, that upon the occurrence
of any event described in paragraph (g) or (h) of this
Section 7.1 as to which a Borrower is the entity
involved, the Commitments will forthwith terminate and
all sums then owing by the Borrowers to the Banks upon
the Promissory Notes or otherwise hereunder shall,
without any declaration or other action by any Bank or
Agent hereunder, be immediately due and payable and the
Total Commitment hereunder shall be immediately
terminated without presentment, demand, protest or
other notice of any kind, all of which are expressly
waived by each Borrower, anything contained herein or
in any Promissory Note or other Loan Document to the
contrary notwithstanding. Promptly following the
making of any such declaration, the Administrative
Agent shall give notice thereof to the Borrowers but
failure to do so shall not impair the effect of such
declaration.
ARTICLE VIII
The Agents
SECTION 8.1. The Agents. (a) For convenience of
administration and to expedite the transactions contemplated
by this Agreement, Chemical is hereby appointed as
Administrative Agent, FTX Collateral Agent and FRP
Collateral Agent for the Banks under this Agreement and the
Security Agreements and Chase is hereby appointed as the
Documentary Agent for the Banks under this Agreement. None
of the Agents shall have any duties or responsibilities with
respect hereto except those expressly set forth herein or in
the other Loan Documents. Each Bank, and each subsequent
holder of any Promissory Note by its acceptance thereof,
hereby irrevocably appoints and expressly authorizes the
Agents, without hereby limiting any implied authority, to
take such action as the Agents may deem appropriate on its
behalf and to exercise such powers under this Agreement as
are specifically delegated to such Person by the terms
hereof, together with such powers as are reasonably
incidental thereto. The Administrative Agent is hereby
expressly authorized by the Banks, without hereby limiting
any implied authority, (a) to receive on behalf of the Banks
all payments of principal of and interest on the Loans and
all other amounts due to the Banks hereunder, and promptly
to distribute to each Bank its proper share of each payment
so received; (b) to give notice on behalf of the Banks to
the Borrowers of any Event of Default specified in this
Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder
or as directed by the Required Banks; and (c) to distribute
to each Bank copies of all notices, financial statements and
other materials delivered by the Borrowers pursuant to this
Agreement as received by the Administrative Agent. Without
limiting the generality of the foregoing, the Collateral
Agents are hereby expressly authorized to execute any and
all documents (including releases) with respect to the
collateral under the Security Agreements and the rights of
the secured parties with respect thereto, as contemplated by
and in accordance with the provisions of this Agreement and
the Security Agreements. Each of the Agent and the
Collateral Agents may exercise any of its duties hereunder
by or through their respective agents, officers or
employees. In addition, each Bank hereby irrevocably
authorizes and directs the Collateral Agents to enter, on
behalf of each of them, into the FTX Intercreditor Agreement
(in the case of the FTX Collateral Agent) and the Security
Agreements as contemplated pursuant to this Agreement.
(b) None of the Agents or any of their respective
directors, officers, agents or employees shall be liable as
such for any action taken or omitted to be taken by any of
them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document
delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance
or observance by the Borrowers or any other party of any of
the terms, conditions, covenants or agreements contained in
any Loan Document. The Agents shall not be responsible to
the Banks or the holders of the Notes for the due execution,
genuineness, validity, enforceability or effectiveness of
this Agreement, the Notes or any other Loan Documents or
other instruments or agreements. The Administrative Agent
may deem and treat the payee of any Promissory Note as the
owner thereof for all purposes hereof until it shall have
received from the payee of such Promissory Note notice,
given as provided herein, of the transfer thereof in
compliance with Section 9.3. The Agents shall in all cases
be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required
Banks and, except as otherwise specifically provided herein,
such instructions and any action or inaction pursuant
thereto shall be binding on all the Banks and each
subsequent holder of any Promissory Note. Each Agent shall,
in the absence of knowledge to the contrary, be entitled to
rely on any instrument or document believed by it in good
faith to be genuine and correct and to have been signed or
sent by the proper Person or Persons. None of the Agents
nor any of their respective directors, officers, employees
or agents shall have any responsibility to the Borrowers or
any other party on account of the failure of or delay in
performance or breach by any Bank of any of its obligations
hereunder or to any Bank on account of the failure of or
delay in performance or breach by any other Bank or the
Borrowers or any other party of any of their respective
obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each of the Agents may
execute any and all duties hereunder by or through agents or
employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action
taken or suffered in good faith by it in accordance with the
advice of such counsel. The Banks hereby acknowledge that
none of the Agents shall be under any duty to take any
discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement unless it shall be
requested in writing to do so by the Required Banks.
(c) To the extent that any Agent shall not be
reimbursed by the Borrowers for any costs, liabilities or
expenses incurred in such capacity, each Bank agrees (i) to
reimburse the Agents, on demand (in the amount of its
Applicable Percentage hereunder) of any expenses incurred
for the benefit of the Banks by the Agents, including
counsel fees and compensation of agents and employees paid
for services rendered on behalf of the Banks and (ii) to
indemnify and hold harmless each Agent and any of its
directors, officers, employees or agents, on demand, in the
amount of such Applicable Percentage, from and against any
and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against it in its
capacity as Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or
any action taken or omitted by it or any of them under this
Agreement or any other Loan Document; provided, however,
that no Bank shall be liable to an Agent for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or wilful misconduct of
such Agent or of its directors, officers, employees or
agents.
(d) With respect to the Loans made by it
hereunder and the Promissory Notes issued to it, each Agent
in its individual capacity and not as Agent shall have the
same rights and powers as any other Bank and may exercise
the same as though it were not an Agent, and the Agents and
their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrowers
or any Subsidiary or other Affiliate thereof as if it were
not an Agent.
(e) Subject to the appointment and acceptance of
a successor Agent as provided below, any Agent may resign at
any time by giving written notice thereof to the Banks and
the Borrowers. Upon any such resignation, the Required
Banks shall have the right to appoint, and the Borrowers
shall have the right to approve (such approval not to be
unreasonably withheld or delayed) a successor Administrative
Agent, Collateral Agent or Documentary Agent, as the case
may be. If no successor Agent, Collateral Agent or
Documentary Agent, as the case may be, shall have been so
appointed and approved and shall have accepted such
appointment, within 30 days after the retiring Agent's
giving of notice of resignation, then the retiring Person
may, on behalf of the Banks, appoint a successor
Administrative Agent, Collateral Agent or Documentary Agent,
as the case may be, which shall be a Bank with an office in
New York, New York, having a combined capital and surplus of
at least $500,000,000 or an Affiliate of any such Bank.
Upon the acceptance of any appointment as Administrative
Agent, Collateral Agent or Documentary Agent hereunder by a
successor Administrative Agent, Collateral Agent or
Documentary Agent, as the case may be, such successor
Administrative Agent, Collateral Agent or Documentary Agent
shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall from and after such date be
discharged from its duties and obligations hereunder. After
any such retiring Agent's resignation hereunder as
Administrative Agent, Collateral Agent or Documentary Agent,
as applicable, the provisions of this Article VIII and
Section 9.4 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was acting as
the Administrative Agent, Collateral Agent or Documentary
Agent, as applicable.
(f) The Administrative Agent and the Documentary
Agent shall be responsible for supervising the preparation,
execution and delivery of this Agreement and the other
agreements and instruments contemplated hereby, any
amendment or modification thereto and the closing of the
transactions contemplated hereby and thereby. In addition,
the Administrative Agent shall assist each Collateral Agent
in the performance of its duties as may be reasonably
requested by such Collateral Agent from time to time.
(g) The obligations of the Administrative Agent,
each Collateral Agent and the Documentary Agent shall be
separate and several and neither of them shall be
responsible or liable for the acts or omissions of the
other, except, to the extent that any such Agent serves in
more than one agent capacity, such Agent shall be
responsible for the acts and omissions relating to each such
agency function.
(h) Without the prior written consent of the
Required Banks, the Administrative Agent and the FTX
Collateral Agent will not consent to any modification,
supplement or waiver of the FTX Intercreditor Agreement or,
except to the extent required by the FTX Intercreditor
Agreement, the FTX Security Agreement and the FRP Collateral
Agent will not consent to any modification, supplement or
waiver of the FRP Security Agreement.
(i) Each Bank acknowledges that it has,
independently and without reliance upon the Agents or any
other Bank and based on such documents and information as it
has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without
reliance upon the Agents or any other Bank and based on such
documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement or any
other Loan Document, any related agreement or any document
furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.1. Notices. Notices and other
communications provided for herein shall be in writing and
shall be delivered by hand or overnight or same day courier
service or mailed or sent by telex, telecopy, graphic
scanning or other telegraphic communications equipment of
the sending party to the appropriate party's address set
forth on the signature pages hereof; provided that notices
by or to FRP may be given by or to FTX as its general
partner, and notices stated to be given by or to the
"Borrowers" may be given by or to FTX on behalf of both
Borrowers. All notices and other communications given to
any party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given on the date of
receipt if hand delivered or delivered by any telecopy,
telegraphic or telex communications equipment or three days
after being sent by registered or certified mail, postage
prepaid, return receipt requested, in each case addressed to
such party as provided in this Section 9.1 or in accordance
with the latest unrevoked direction from such party.
SECTION 9.2. Survival of Agreement. All
covenants, agreements, representations and warranties made
by the Borrowers herein and in the certificates or other
instruments prepared or delivered in connection with this
Agreement or any other Loan Document shall be considered to
have been relied upon by the Banks and the Agents and shall
survive the making by the Banks of the Loans and the
execution and delivery to the Banks of the Promissory Notes
evidencing such Loans regardless of any investigation made
by the Banks or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued
interest on any Note, any Commitment Fee or any other fee or
amount payable under the Loan Documents is outstanding and
unpaid and so long as the Commitments have not been
terminated.
SECTION 9.3. Successors and Assigns;
Participation; Purchasing Banks. (a) This Agreement shall
be binding upon and inure to the benefit of FTX, FRP, the
Banks, the Agents, all future holders of the Promissory
Notes, and their respective successors and assigns, except
that neither FTX nor FRP may assign, delegate or transfer
any of its rights or obligations under this Agreement
without the prior written consent of each Bank. Any Bank
may at any time pledge or assign all or any portion of its
rights under this Agreement and the Promissory Notes issued
to it to a Federal Reserve Bank to secure extensions of
credit by such Federal Reserve Bank to such Bank; provided
that no such pledge or assignment shall release a Bank from
any of its obligations hereunder or substitute any such
Federal Reserve Bank for such Bank as a party hereto.
(b) Any Bank may, in accordance with applicable
law, at any time sell to one or more banks or other entities
("Participants") participating interests in all or a portion
of any Loan owing to such Bank, any Promissory Note held by
such Bank, any Commitment of such Bank or any other interest
of such Bank hereunder. In the event of any such sale by a
Bank of participating interests to a Participant, such
Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, such
Bank shall remain the holder of any such Promissory Note for
all purposes under this Agreement and the Borrowers and the
Agents shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations
under this Agreement. The Borrowers agree that if amounts
outstanding under this Agreement and the Promissory Notes
are due and unpaid, or shall have been declared due or shall
have become due and payable upon the occurrence of an Event
of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in
amounts owing under this Agreement and any Promissory Note
to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under this
Agreement or any Promissory Note; provided that such right
of setoff shall be subject to the obligation of such
Participant to share with the Banks, and the Banks agree to
share with such Participant, as provided in Section 2.15.
The Borrowers also agree that each Participant shall be
entitled to the benefits of Sections 2.11, 2.12, 2.13, 2.15,
2.17 and 9.5 with respect to its participation in the
Commitments and the Loans outstanding from time to time as
if it were a Bank; provided that no Participant shall be
entitled to receive any greater payment pursuant to such
Sections than the transferor Bank would have been entitled
to receive in respect of the amount of the participation
transferred by such transferor Bank to such Participant
unless such participation shall have been made at a time
when the circumstances giving rise to such greater payment
did not exist; and provided that the voting rights of any
Participant would be limited to amendments, modifications or
waivers decreasing any fees payable hereunder or the amount
of principal of or the rate at which interest is payable on
the Loans, extending any scheduled principal payment date or
date fixed for the payment of interest on the Loans,
changing or extending the Commitments or release of all or
substantially all the collateral for the Loans.
(c) Any Bank may, in accordance with applicable
law and subject to Section 9.3(h), at any time assign by
novation all or any part of its rights and obligations under
this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it and the Promissory
Notes held by it) (I) to any Bank or any Affiliate thereof,
without the Borrowers' consent, or (II) to one or more
additional banks or financial institutions (any such entity
referred to in clause (I) or (II) being a "Purchasing Bank")
with the consent of the Administrative Agent and the
Borrowers, such consent not to be unreasonably withheld (it
being understood that the Borrowers may withhold their
consent to a Purchasing Bank (i) which is not a commercial
bank or savings and loan institution or (ii) which would, as
of the effective date of such assignment, be entitled to
claim compensation under Section 2.11 which the transferor
Bank would not be entitled to claim as of such date),
pursuant to a Commitment Transfer Supplement in the form of
Exhibit D, executed by such Purchasing Bank and such
transferor Bank (and, in the case of a Purchasing Bank that
is not then a Bank or an Affiliate thereof, by the Borrowers
and the Administrative Agent), and delivered for its
recording in the Register to the Administrative Agent,
together with the Promissory Notes subject to such
assignment, the registration and processing fee required by
Section 9.3(e) and an Administrative Questionnaire for the
Purchasing Bank if it is not already a Bank. Assignments
shall be by novation only and a proportionate interest in
the Loans and Commitments to both FRP and FTX (and the
related Promissory Notes) must be assigned. Upon such
execution, delivery and recording (and, if required, consent
of the Borrowers and the Administrative Agent), from and
after the Transfer Effective Date determined pursuant to
such Commitment Transfer Supplement (which shall be at least
five days after the execution and delivery thereof), (x) the
Purchasing Bank thereunder shall (if not already a party
hereto) be a party hereto and have the rights and
obligations of a Bank hereunder with a Commitment as set
forth in such Commitment Transfer Supplement, and (y) the
transferor Bank thereunder shall, to the extent assigned by
such Commitment Transfer Supplement, be released from its
obligations under this Agreement (and, in the case of a
Commitment Transfer Supplement covering all or the remaining
portion of a transferor Bank's rights and obligations under
this Agreement, such transferor Bank shall cease to be a
party hereto). Such Commitment Transfer Supplement shall be
deemed to amend this Agreement (including Schedule II
hereto) to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Bank (if not already
a party hereto) and the resulting adjustment of Applicable
Percentages arising from the purchase by such Purchasing
Bank of all or a portion of the rights and obligations of
such transferor Bank under this Agreement and the Promissory
Notes. On or prior to the Transfer Effective Date
determined pursuant to such Commitment Transfer Supplement,
each Borrower, at its own expense, shall execute and deliver
to the Administrative Agent in exchange for the surrendered
Promissory Note a new Promissory Note to the order of such
Purchasing Bank in an amount equal to the Commitment assumed
by it pursuant to such Commitment Transfer Supplement (in
the case of FTX, such Purchasing Bank's Applicable
Percentage of the lesser of (A) $75,000,000 and (B) the
portion of the then effective Total Commitment which may be
used for borrowings by FTX) and, if the transferor Bank has
retained a Commitment hereunder, a new Promissory Note to
the order of the transferor Bank in an amount equal to the
Commitment retained by it hereunder (in the case of FTX,
such transferor Bank's Applicable Percentage of the lesser
of (X) $75,000,000 and (Y) the portion of the then effective
Total Commitment which may be used for borrowings by FTX).
Such new Promissory Notes shall be dated the Closing Date
and shall otherwise be in the form of the Promissory Notes
replaced thereby. The Promissory Notes surrendered by the
transferor Bank shall be returned by the Administrative
Agent to the Borrowers marked "canceled".
(d) The Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, shall maintain at
one of its offices in The City of New York a copy of each
Commitment Transfer Supplement delivered to it and a
register (the "Register") for the recordation of the names
and addresses of the Banks and the Commitment of, and
principal amount of the Loans owing to, each Bank from time
to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the parties hereto may
treat each Person whose name is recorded in the Register as
the owner of the Loan recorded therein for all purposes of
this Agreement. The Register shall be available for
inspection by the parties hereto at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer
Supplement executed by a transferor Bank and a Purchasing
Bank (and, in the case of a Purchasing Bank that is not then
a Bank or an affiliate thereof, by the Borrowers and the
Administrative Agent) together with payment to the
Administrative Agent of a registration and processing fee of
$3,500, the Administrative Agent shall (i) promptly accept
such Commitment Transfer Supplement and (ii) on the Transfer
Effective Date determined pursuant thereto record the
information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and
the Borrowers.
(f) Subject to Section 9.15, the Borrowers
authorize each Bank to disclose to any Participant or
Purchasing Bank (each, a "Transferee") and any prospective
Transferee any and all financial and other information in
such Bank's possession concerning the Borrowers and its
Affiliates which has been delivered to such Bank by or on
behalf of the Borrowers pursuant to this Agreement or which
has been delivered to such Bank by or on behalf of the
Borrowers in connection with such Bank's credit evaluation
of the Borrowers and their Affiliates prior to becoming a
party to this Agreement.
(g) If, pursuant to this Section 9.3, any
interest in this Agreement or any Promissory Note is
transferred to any Transferee which is organized under the
laws of any jurisdiction other than the United States or any
State thereof, the transferor Bank (x) shall immediately
notify the Administrative Agent of such transfer, describing
the terms thereof and indicating the identity and country of
residence of each Transferee. Such transferor Bank or
Transferee shall indemnify and hold harmless the Borrowers
and the Administrative Agent from and against any tax,
interest, penalty or other expense that the Borrowers and
the Administrative Agent may incur as a consequence of any
failure to withhold United States taxes applicable because
of any transfer or participation arrangement that is not
fully disclosed to them as required hereunder.
(h) By executing and delivering a Commitment
Transfer Supplement, the transferor Bank thereunder and the
Purchasing Bank thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as
follows: (i) such transferor Bank warrants that it is the
legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim and that its
Commitment, and the outstanding balance of its Loans, in
each case without giving effect to assignments thereof which
have not become effective, are as set forth in such
Commitment Transfer Supplement, (ii) except as set forth in
(i) above, such transferor Bank makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value
of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto, or the
financial condition of the Borrowers or any Subsidiary or
the performance or observance by the Borrowers or any
Subsidiary of any of its obligations under this Agreement,
any other Loan Document or any other instrument or document
furnished pursuant hereto; (iii) such Purchasing Bank
represents and warrants that it is legally authorized to
enter into such Commitment Transfer Supplement; (iv) such
Purchasing Bank confirms that it has received a copy of this
Agreement, together with copies of the most recent financial
statements, if any, delivered pursuant to Section 5.1 and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Commitment Transfer Supplement; (v) such
Purchasing Bank will independently and without reliance upon
the Agents, such transferor Bank or any other Bank and based
on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this
Agreement; (vi) such Purchasing Bank appoints and authorizes
the Agents to take such action as agent on its behalf and to
exercise such respective powers under this Agreement and the
other Loan Documents as are delegated to the Agents by the
terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such Purchasing Bank agrees
that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are
required to be performed by it as a Bank.
SECTION 9.4. Expenses of the Banks; Indemnity.
(a) The Borrowers agree, jointly and severally, to pay all
out-of-pocket expenses reasonably incurred by the Agents in
connection with the preparation and administration of this
Agreement, the Promissory Notes and the other Loan Documents
or with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated) or
reasonably incurred by the Agents or any Bank in connection
with the enforcement or protection of their rights in
connection with this Agreement and the other Loan Documents
or with the Loans made or the Promissory Notes issued
hereunder (whether through negotiations, legal proceedings
or otherwise), including, but not limited to, the reasonable
fees and disbursements of Cravath, Swaine & Moore, special
counsel for the Agents, and, in connection with such
enforcement or protection, the reasonable fees and
disbursements of other counsel for any Bank. The Borrowers
further jointly and severally agree that they shall
indemnify the Banks and the Agents from and hold them
harmless against any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the
execution and delivery of or in connection with the
performance of this Agreement, any of the Promissory Notes
or any of the other Loan Documents. Further, the Borrowers
jointly and severally agree to pay, and to protect,
indemnify and save harmless each Bank, each Agent and each
of their respective officers, directors, shareholders,
employees, agents and servants from and against, any and all
losses, liabilities (including liabilities for penalties),
actions, suits, judgments, demands, damages, costs or
expenses (including, without limitation, attorneys' fees and
expenses) in connection with any investigative,
administrative or judicial proceeding, whether or not such
Bank or Agent shall be designated a party thereto of any
nature arising from or relating to (i) the execution or
delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated thereby, the
performance by the parties thereto of their respective
obligations thereunder or the consummation of the
transactions contemplated hereby and thereby (including the
Restructuring) or (ii) the use of the proceeds of the Loans;
and the Borrowers also jointly and severally agree to pay,
and to protect, indemnify and save harmless each Bank, each
Agent and each of their respective officers, directors,
shareholders, employees, agents and servants from and
against, any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments,
demands, damages, costs or expenses (including, without
limitation, attorneys' fees and expenses in connection with
any investigative, administrative or judicial proceeding,
whether or not such Bank or Agent shall be designated a
party thereto) of any nature arising from or relating to any
actual or alleged presence or Release of Hazardous Materials
on any property owned or operated by IMC-Agrico, the
Borrowers or any of the Subsidiaries, or any Environmental
Claim related in any way to IMC-Agrico, the Borrowers or the
Subsidiaries or arising from or in connection with the
environmental due diligence summary memorandum referred to
in paragraph (m) of Article IV; provided that any such
indemnity referred to in this sentence shall not, as to any
indemnified Person, be available to the extent that such
losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and
non appealable judgment to have resulted from the gross
negligence or wilful misconduct of such indemnified Person.
If any action, suit or proceeding arising from any of the
foregoing is brought against any Bank, Agent or other Person
indemnified or intended to be indemnified pursuant to this
Section 9.4, the Borrowers, to the extent and in the manner
directed by such indemnified party, will resist and defend
such action, suit or proceeding or cause the same to be
resisted and defended by counsel designated by the Borrowers
(which counsel shall be satisfactory to such Bank, Agent or
other Person indemnified or intended to be indemnified). If
the Borrowers shall fail to do any act or thing which it has
covenanted to do hereunder or any representation or warranty
on the part of the Borrowers contained in this Agreement
shall be breached, any Bank or Agent may (but shall not be
obligated to) do the same or cause it to be done or remedy
any such breach, and may expend its funds for such purpose.
Any and all amounts so expended by any Bank or Agent shall
be repayable to it by the Borrowers immediately upon such
Bank's or such Agent's demand therefor.
(b) The provisions of this Section 9.4 shall
remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby or
thereby, the repayment of any of the Loans or any Promissory
Notes, the invalidity or unenforceability of any term or
provision of this Agreement, any other Loan Document or any
Promissory Note, or any investigation made by or on behalf
of any Bank or any Agent. All amounts due under this
Section 9.4 shall be payable on written demand therefor.
SECTION 9.5. Right of Setoff. If an Event of
Default shall have occurred and be continuing and the Loans
shall have been accelerated or any Bank shall have requested
the Administrative Agent to declare the Loans immediately
due and payable pursuant to Article VII, then each Bank is
hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand,
provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the
credit or the account of either Borrower against any of and
all the obligations of such Borrower now or hereafter
existing under this Agreement and the Promissory Notes held
by such Bank, irrespective of whether or not such Bank shall
have made any demand under this Agreement or such Promissory
Notes and although such obligations may be unmatured. Each
Bank agrees promptly to notify the Borrowers after any such
setoff and application made by such Bank, but the failure to
give such notice shall not affect the validity of such
setoff and application. The rights of each Bank under this
Section 9.5 are in addition to other rights and remedies
(including, without limitation, other rights of setoff)
which such Bank may have.
SECTION 9.6. APPLICABLE LAW. THIS AGREEMENT AND
THE PROMISSORY NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.7. Waivers; Amendments. (a) No
failure or delay of any Bank or Agent in exercising any
power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or
power. The rights and remedies of the Banks and the Agents
hereunder and under the other documents and agreements
entered into in connection herewith are cumulative and not
exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of this
Agreement, any other Loan Document or any Promissory Note or
any other such document or agreement or consent to any
departure by any Borrower therefrom shall in any event be
effective unless the same shall be authorized as provided in
paragraph (b) below, and then such waiver or consent shall
be effective only in the specific instance and for the
purpose for which given. No notice or demand on any
Borrower in any case shall entitle such Borrower to any
other or further notice or demand in similar or other
circumstances. Each holder of any of the Promissory Notes
shall be bound by any amendment, modification, waiver or
consent authorized as provided herein, whether or not such
Promissory Note shall have been marked to indicate such
amendment, modification, waiver or consent.
(b) This Agreement and the Security Agreements
(including any provision hereof or thereof) may not be
waived, amended or modified except pursuant to an agreement
or agreements in writing entered into by the Borrowers and
the Required Banks; provided, however, that no such
agreement shall (i) change the principal amount of, or
extend or advance the maturity of or any date for the
payment (other than pursuant to Section 2.7(b), which may be
amended by the Required Banks) of any principal of or
interest on, any Promissory Note (including, without
limitation, any such payment pursuant to Section 2.7(c) or
paragraph (a) or (b) of Section 2.9), or waive or excuse any
such payment or any part thereof, or change the rate of
interest on any Promissory Note, without the written consent
of each holder affected thereby, (ii) change or extend the
Commitment of any Bank without the written consent of such
Bank, or change any fees to be paid to any Bank or Agent
hereunder without the written consent of such Bank or the
Agent, as applicable, (iii) amend or modify the provisions
of this Section 9.7, Sections 2.8 through 2.15 or
Section 9.4 or the definition of "Required Banks", without
the written consent of each Bank or (iv) release the
collateral granted as security under the Security Agreements
(except as expressly required hereby or thereby), without
the written consent of each Bank; and provided further that
no such agreement shall amend, modify or otherwise affect
the rights or duties of an Agent hereunder without the
written consent of such Agent. Each Bank and holder of any
Promissory Note shall be bound by any modification or
amendment authorized by this Section 9.7 regardless of
whether its Promissory Notes shall be marked to make
reference thereto, and any consent by any Bank or holder of
a Promissory Note pursuant to this Section shall bind any
Person subsequently acquiring a Promissory Note from it,
whether or not such Promissory Note shall be so marked.
SECTION 9.8. Severability. In the event any one
or more of the provisions contained in this Agreement or in
the Promissory Notes should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
or therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
SECTION 9.9. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become
effective when copies hereof which, when taken together,
bear the signatures of each of the parties hereto shall be
delivered or mailed to the Administrative Agent and the
Borrowers.
SECTION 9.10. Headings. Article and Section
headings and the Table of Contents used herein are for
convenience of reference only and are not to affect the
construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 9.11. Entire Agreement. This Agreement,
the other Loan Documents, the fee letters between the Agents
and the Borrowers and the exhibits and schedules hereto
contain the entire agreement among the parties hereto with
respect to the Loans and the related transactions. Any
previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement, such
fee letters and the other Loan Documents. Nothing in this
Agreement or in the other Loan Documents, expressed or
implied, is intended to confer upon any party other than the
parties hereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the
other Loan Documents.
SECTION 9.12. WAIVER OF JURY TRIAL, ETC.
(A) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.12.
(b) Except as prohibited by law, each party
hereto hereby waives any right it may have to claim or
recover in any litigation referred to in paragraph (a) of
this Section 9.12 any special, indirect, exemplary, punitive
or consequential damages or any damages other than, or in
addition to, actual damages.
(c) Each party hereto (i) certifies that no
representative, agent or attorney of any Bank has
represented, expressly or otherwise, that such Bank would
not, in the event of litigation, seek to enforce the
foregoing waivers and (ii) acknowledges that it has been
induced to enter into this Agreement or any other document,
as applicable, by, among other things, the mutual waivers
and certifications herein.
SECTION 9.13. Interest Rate Limitation.
Notwithstanding anything herein or in the Promissory Notes
to the contrary, if at any time the interest rate applicable
to any Loan, together with all fees, charges and other
amounts which are treated as interest on such Loan under
applicable law (collectively the "Charges"), as provided for
herein or in any other document executed in connection
herewith, or otherwise contracted for, charged, received,
taken or reserved by any Bank, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted
for, charged, taken, received or reserved by such Bank in
accordance with applicable law, the rate of interest in
respect of such Loan hereunder or payable under the
Promissory Note held by such Bank, together with all Charges
payable to such Bank, shall be limited to the Maximum Rate
and, to the extent lawful, the interest and Charges that
would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section 9.13
shall be cumulated and the interest and Charges payable to
such Bank in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until
such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall
have been received by such Bank.
SECTION 9.14. JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (A) EACH BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW
YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO
THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF
THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED
IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT
SHALL AFFECT ANY RIGHT THAT ANY BANK OR AGENT MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AGAINST
ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.
(B) EACH BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY
AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY NEW YORK STATE
OR FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(C) EACH PARTY TO THIS AGREEMENT IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 9.1. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 9.15. Confidentiality. Each Bank agrees
(which agreement shall survive the termination of this
Agreement) that financial information, information from the
Borrowers' and their Subsidiaries' books and records,
information concerning the Borrowers' and their
Subsidiaries' trade secrets and patents and any other
information received from the Borrowers and their
Subsidiaries hereunder shall be treated as confidential by
such Bank, and each Bank agrees to use its best efforts to
ensure that such information is not published, disclosed or
otherwise divulged to anyone other than employees or
officers of such Bank and its counsel and agents; provided
that it is understood that the foregoing shall not apply to:
(i) disclosure made with the prior written
authorization of a Borrower;
(ii) disclosure of information (other than that
received from the Borrowers and their Subsidiaries
prior to or under this Agreement) already known by, or
in the possession of, such Bank without restrictions on
the disclosure thereof at the time such information is
supplied to such Bank by a Borrower or its Subsidiaries
hereunder;
(iii) disclosure of information which is required by
applicable law or to a governmental agency having
supervisory or regulatory authority over any party
hereto;
(iv) disclosure of information in connection with
any suit, action or proceeding in connection with the
enforcement of rights hereunder or in connection with
the transaction contemplated hereby or thereby;
(v) disclosure to any bank (or other financial
institution) which may acquire a participation or other
interest in the Loans or rights of any Bank hereunder;
provided that such bank (or other financial
institution) agrees to maintain any such information to
be received in accordance with the provisions of this
Section 9.15;
(vi) disclosure by any party hereto to any other
party hereto or their counsel or agents;
(vii) disclosure by any party hereto to any entity,
or to any subsidiary of such an entity, which owns,
directly or indirectly, more than 50% of the voting
stock of such party, or to any subsidiary of such an
entity; or
(viii) disclosure of information that prior to such
disclosure has become public knowledge through no
violation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above
written.
FREEPORT-McMoRan INC.,
by /s/ R. Foster Duncan
______________________________
Name: R. Foster Duncan
Title: Treasurer
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: R. Foster Duncan
Treasurer
Telex: 8109515386
Telephone: 504-582-4628
Telecopy: 504-582-4511
FREEPORT-McMoRan RESOURCE PARTNERS,
LIMITED PARTNERSHIP,
by FREEPORT McMoRan Inc.,
its Administrative Managing
General Partner,
by R. Foster Duncan
______________________________
Name: R. Foster Duncan
Title: Treasurer
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: R. Foster Duncan
Treasurer
Telex: 8109515386
Telephone: 504-582-4628
Telecopy: 504-582-4511
CHEMICAL BANK, individually and as
Administrative Agent, FTX Collateral
Agent and FRP Collateral Agent,
by /s/ R. Potter
______________________________
Name: Ronald Potter
Title: Managing Director
Domestic Office and LIBOR Office
270 Park Avenue
New York, New York 10017
Attention: Ralph Iskander
Telephone: 212-270-3977
Telecopy: 212-270-4711
with copies to: Stuart Miller
Attention:
Telephone: 212-270-3523
Telecopy: 212-270-2325
with copies to:
Agent Bank Services
140 East 45th Street
New York, New York 10017
Attention: Hilma Gabbidon
Telephone: 212-622-0693
Telex: 353006 ABSCNYK
Telecopy: 212-622-0002
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), individually and as
Documentary Agent,
by /s/ Alexander S. Rapetski
________________________________
Name: Alexander S. Rapetski
Title: Vice President
DOMESTIC OFFICE AND LIBOR OFFICE:
One Chase Manhattan Plaza (4th Floor)
New York, NY 10081
Attention: Nicholas J. Chirekos
Vice President
Telephone: 212-552-2395
Telecopy: 212-552-7773
ADDRESS FOR NOTICES:
One Chase Manhattan Plaza (4th Floor)
New York, NY 10081
Attention: Vilma Francis
Assistant Treasurer
Telephone: 212-552-7883
Telecopy: 212-552-7175
EXECUTION COPY____________________________________________________________
CREDIT AGREEMENT
Dated as of June 30, 1995
Among
FM PROPERTIES OPERATING CO.,
FREEPORT-McMoRan INC.,
FREEPORT-McMoRAN COPPER & GOLD INC.,
The Banks Named Herein,
CHEMICAL BANK,
as Administrative Agent
and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
as Documentary Agent
____________________________________________________________
TABLE OF CONTENTS
Page
Parties and Recitals . . . . . . . . . . . . . . . . . 1
ARTICLE I
Definitions
Section 1.1. Definitions . . . . . . . . . . . . . . 2
Section 1.2. Accounting Terms . . . . . . . . . . . 23
Section, Article, Exhibit and Schedule
Section 1.3. References, etc. . . . . . . . . . . 23
Section 1.4. Incorporated Agreements and Definitions 24
ARTICLE II
The Loans
Section 2.1. Revolving Credit Facility . . . . . . . 24
Section 2.2. Loans . . . . . . . . . . . . . . . . . 25
Section 2.3. Notice of Loans . . . . . . . . . . . . 26
Section 2.4. Promissory Notes . . . . . . . . . . . 27
Section 2.5. Interest on Loans . . . . . . . . . . . 28
Section 2.6. Fees . . . . . . . . . . . . . . . . . 28
Maturity and Reduction of
Section 2.7. Commitments . . . . . . . . . . . . . 29
Interest on Overdue Amounts; Alternative
Section 2.8. Rate of Interest . . . . . . . . . . 30
Section 2.9. Prepayment of Loans . . . . . . . . . . 31
Section 2.10. Continuation and Conversion of Loans . 32
Reserve Requirements; Change in
Section 2.11. Circumstances . . . . . . . . . . . . 33
Section 2.12. Change in Legality . . . . . . . . . . 37
Section 2.13. Indemnity . . . . . . . . . . . . . . . 38
Section 2.14. Pro Rata Treatment . . . . . . . . . . 39
Section 2.15. Sharing of Setoffs . . . . . . . . . . 39
Section 2.16. Payments . . . . . . . . . . . . . . . 40
Section 2.17. U.S. Taxes . . . . . . . . . . . . . . 42
FTX or Restricted Subsidiary as Limited
Section 2.18. Partner . . . . . . . . . . . . . . . 45
ARTICLE III
Representations and Warranties
Representations and Warranties of the
Section 3.1. Partnership . . . . . . . . . . . . . 45
(a) Organization, Powers . . . . . . 45
(b) Authorization . . . . . . . . . 46
(c) Governmental Approval . . . . . 46
(d) Enforceability . . . . . . . . . 47
(e) Financial Statements . . . . . . 47
(f) Litigation; Compliance with
Laws, etc. . . . . . . . . . . 48
(g) Title, etc. . . . . . . . . . . 49
(h) Federal Reserve Regulations;
Use of Proceeds . . . . . . . 49
(i) Taxes . . . . . . . . . . . . . 50
(j) Employee Benefit Plans . . . . . 50
(k) Environmental Matters . . . . . 50
(l) Investment Company Act . . . . . 52
(m) Public Utility Holding Company
Act . . . . . . . . . . . . . 52
(n) Subsidiaries . . . . . . . . . . 52
(o) Solvency . . . . . . . . . . . . 52
(p) Key Assets . . . . . . . . . . . 53
(q) No Material Misstatements . . . 53
Representations and Warranties of
Section 3.2. FTX . . . . . . . . . . . . . . . . . 53
(a) Organization, Powers . . . . . 53
(b) Authorization . . . . . . . . . 53
(c) Governmental Approval . . . . . 54
(d) Enforceability . . . . . . . . . 54
(e) Litigation; Compliance with
Laws, etc. . . . . . . . . . . 55
(f) Representations Incorporated By
Reference from the FTX Credit
Agreement . . . . . . . . . . . 55
(g) Florida Environmental Liability 55
(h) No Material Misstatements . . 55
Section 3.3. Representations and Warranties of FCX . 56
(a) Organization, Powers . . . . . . 56
(b) Authorization . . . . . . . . . 56
(c) Governmental Approval . . . . . 57
(d) Enforceability . . . . . . . . . 57
(e) Litigation; Compliance with
Laws, etc. . . . . . . . . . . 58
(f) Representations Incorporated By
Reference from the FCX Credit
Agreement . . . . . . . . . . 58
(g) No Material Misstatements . . . 58
ARTICLE IV
Covenants
Affirmative Covenants of the
Section 4.1. Partnership . . . . . . . . . . . . . 59
(a) Financial Statements, etc. . . . 59
(b) Obligations, Taxes and Claims . 61
(c) Maintenance of Existence;
Conduct of Business . . . . . 62
(d) Compliance with Applicable Laws 62
(e) Litigation . . . . . . . . . . . 62
(f) ERISA . . . . . . . . . . . . . 63
(g) Insurance . . . . . . . . . . . 63
(h) Access to Premises and Records . 63
(i) Compliance with Environmental
Laws . . . . . . . . . . . . . 64
(j) Preparation of Environmental
Reports . . . . . . . . . . . 64
Negative Covenants of the
Section 4.2. Partnership . . . . . . . . . . . . . 64
(a) Conflicting Agreements . . . . . 64
(b) Material Agreements . . . . . . 65
(c) Mergers and Consolidations . . . 65
(d) Liens . . . . . . . . . . . . . 65
(e) Investments, Loans, Advances
and Acquisitions . . . . . . . 67
(f) Distributions . . . . . . . . . 68
(g) Indebtedness . . . . . . . . . . 69
(h) Sale and Lease-Back
Transactions . . . . . . . . . 70
(i) Transactions with Affiliates . . 71
(j) Fiscal Year . . . . . . . . . . 71
(k) Business of Partnership
and Subsidiaries . . . . . . . 71
(l) Federal Reserve Regulations; Use
of Proceeds . . . . . . . . . 71
(m) Certain Debt Agreements . . . . 72
(n) Swaps . . . . . . . . . . . . . 72
(o) Assets of Subsidiaries . . . . . 72
Section 4.3. Affirmative Covenants of FTX . . . . . 73
(a) Affirmative Covenants
Incorporated by Reference from
the FTX Credit Agreement . . . 73
(b) Partnership's Covenants and
FTX . . . . . . . . . . . . . 73
Section 4.4. Negative Covenants of FTX . . . . . . . 73
(a) Negative Covenants Incorporated
by Reference from the FTX
Credit Agreement . . . . . . . 73
(b) Material Agreements . . . . . . 74
Section 4.5. Affirmative Covenants of FCX . . . . . 74
Section 4.6. Negative Covenants of FCX . . . . . . . 74
ARTICLE V
Conditions of Credit
Conditions Precedent to Initial
Section 5.1. Borrowing . . . . . . . . . . . . . . 75
Conditions Precedent to Each
Section 5.2. Borrowing . . . . . . . . . . . . . . 79
Representations and Warranties with
Section 5.3. Respect to Borrowings . . . . . . . . 80
ARTICLE VI
Events of Default
Section 6.1. Events of Default . . . . . . . . . . . 80
ARTICLE VII
FTX Undertaking
Section 7.1. FTX Undertaking . . . . . . . . . . . . 84
ARTICLE VIII
The Agents
Section 8.1. The Agents . . . . . . . . . . . . . . 85
ARTICLE IX
Miscellaneous
Section 9.1. Notices . . . . . . . . . . . . . . . . 89
Section 9.2. Survival of Agreement . . . . . . . . . 90
Successors and Assigns; Participations;
Section 9.3. Purchasing Banks . . . . . . . . . . 90
Section 9.4. Expenses of the Banks; Indemnity . . . 95
Section 9.5. Right of Setoff . . . . . . . . . . . . 97
Section 9.6. Applicable Law . . . . . . . . . . . . 98
Section 9.7. Waivers; Amendments . . . . . . . . . . 98
Section 9.8. Severability . . . . . . . . . . . . . 99
Section 9.9. Counterparts . . . . . . . . . . . . . 99
Section 9.10. Headings . . . . . . . . . . . . . . . 99
Section 9.11. Entire Agreement . . . . . . . . . . . 99
Section 9.12. Waiver of Jury Trial, etc. . . . . . . 100
Section 9.13. Interest Rate Limitation . . . . . . . 100
Section 9.14. Jurisdiction; Consent to Service of 101
Process . . . . . . . . . . . . . . .
Section 9.15. Confidentiality . . . . . . . . . . . . 102
SCHEDULE I Applicable Margin; Commitment Fees
SCHEDULE II Commitments
SCHEDULE III Key Assets
SCHEDULE IV Florida Properties
SCHEDULE V Subsidiaries
SCHEDULE VI Litigation
Exhibit A Form of Promissory Note
Exhibit B Form of Borrowing Notice
Exhibit C Form of Commitment Transfer Supplement
Exhibit D Form of Administrative Questionnaire
Exhibit E Form of Subordination Terms
Exhibit F Form of Opinion of the General Counsel
of FTX and FCX
Exhibit G Form of Opinion of Davis Polk & Wardwell
Exhibit H Form of FTX/FMPO Credit Agreement
Exhibit I Form of FM Intercreditor Agreement
Exhibit J Form of Reimbursement Agreement
Exhibit K Form of FTX Guaranty
Exhibit L Form of FCX Guaranty
CREDIT AGREEMENT dated as of June 30, 1995, among FM
PROPERTIES OPERATING CO., a Delaware general partnership
(the "Partnership" or the "Borrower"), FREEPORT-McMoRan
INC., a Delaware corporation ("FTX"), FREEPORT-McMoRan
COPPER & GOLD INC., a Delaware corporation ("FCX"; FTX and
FCX being the "Guarantors"), the undersigned banks
(collectively, the "Banks") and CHEMICAL BANK, a New York
banking corporation ("Chemical"), as administrative agent
for the Banks (in such capacity, the "Administrative
Agent"), and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), a national banking association, as
Documentation Agent for the Banks (the "Documentation
Agent"; the Administrative Agent and the Documentation Agent
being, collectively, the "Agents").
A. FTX has a 0.2% general partnership interest in and
serves as managing general partner of the Partnership, and
the Company (as herein defined) directly and indirectly has
the remaining 99.8% general partnership interest in the
Partnership.
B. In connection with the Restructuring (as herein
defined), the Partnership wishes to refinance its borrowings
under the Existing FM Credit Agreement and to provide that
FCX and FTX will each severally guarantee a portion of the
loans under this Agreement.
C. FTX, FCX and the Partnership have requested the
Banks to extend credit, subject to the terms and conditions
of this Agreement, in order to enable the Partnership to
borrow on a revolving basis, at any time and from time to
time prior to the Maturity Date (as herein defined), an
aggregate principal amount at any time outstanding not in
excess of $50,000,000. The proceeds of such borrowings are
to be used to refinance certain existing borrowings and for
general partnership purposes, subject to certain limitations
provided herein. The Banks are willing to extend such
credit to the Partnership on the terms and subject to the
conditions herein set forth.
D. FTX is party to the FTX Credit Agreement and FCX is
party to the FCX Credit Agreement (as herein defined).
Certain terms and provisions used or set forth in such
Credit Agreements are incorporated by reference herein, as
specified below, and wherever so incorporated shall be
deemed to be a part hereof as though fully set forth herein.
Wherever any provisions of such Credit Agreements are
incorporated by reference herein, such provisions shall be
deemed to be so incorporated with the same effect as though
fully set forth herein, it being understood that any refer-
ence in such provisions to "this Agreement" shall be deemed
to be a reference to this Agreement, as appropriate.
Accordingly, FTX, FCX, the Partnership, the Banks and
the Agents agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions. As used in this Agreement,
the following terms have the meanings indicated (any term
defined in this Article I or elsewhere in this Agreement in
the singular and used in this Agreement in the plural shall
include the plural, and vice versa):
"Administrative Questionnaire" means an Administrative
Questionnaire in the form of Exhibit C.
"Affiliate" means, when used with respect to a
specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or
is Controlled by or is under common Control with the Person
specified.
"Administrative Services Agreement" means the
Administrative Services Agreement dated as of June 11, 1992,
between FTX and the Company, in the form provided prior to
the date hereof by FTX to the Banks.
"Alternate Base Rate" means for any day, a rate per
annum (rounded upwards, if not already a whole multiple of
1/100 of 1%, to the next higher 1/100 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day,
(b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect for such day
plus 1/2 of 1%. For purposes hereof, the term "Prime Rate"
means the rate of interest per annum publicly announced from
time to time by Chemical as its prime rate in effect at its
principal office in the City of New York; each change in the
Prime Rate shall be effective on the date such change is
publicly announced as being effective. "Base CD Rate" means
the sum of (x) the product of (i) the Three-Month Secondary
CD Rate and (ii) Statutory Reserves and (y) the Assessment
Rate. "Three-Month Secondary CD Rate" means, for any day,
the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such
day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published
in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-
month certificates of deposit of major money center banks in
New York City received at approximately 10:00 a.m., New York
City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing
selected by it. "Federal Funds Effective Rate" means, for
any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for the day of such transactions received
by the Administrative Agent from three Federal funds brokers
of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error)
that it is unable to ascertain the Base CD Rate or the
Federal Funds Effective Rate or both for any reason,
including the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined
without regard to clause (b) or (c), or both, of the first
sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist.
Any change in the Alternate Base Rate due to a change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal
Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"Applicable LIBO Rate" means on a per annum basis, in
respect of any LIBO Rate Loan, for each day during the
Interest Period for such Loan, the sum of (i) the LIBO Rate
as determined by the Administrative Agent plus (ii) the
Applicable Margin.
"Applicable Margin" means, with respect to any Loan,
the applicable percentage set forth on Schedule I hereto.
"Applicable Percentage" of any Bank means the
percentage set opposite such Bank's name on Schedule II
hereto, as modified from time to time as provided hereby.
"Applicable Reference Rate" means on a per annum basis
in respect of any Reference Rate Loan, for any day, the sum
of the Alternate Base Rate plus the Applicable Margin.
"Assessment Rate" means, with respect to each day
during an Interest Period, the annual rate (rounded upwards,
if not already a whole multiple of 1/100 of l%, to the next
highest whole multiple of 1/100 of 1%) most recently
estimated by the Administrative Agent as the then current
net annual assessment rate that will be employed in
determining amounts payable by Chemical to the Federal
Deposit Insurance Corporation or any successor ("FDIC") for
the FDIC's insuring time deposits made in Dollars at offices
of Chemical in the United States.
"Assignment and Acceptance Effective Date" has the
meaning assigned to such term in each Assignment and Accep-
tance.
"Bank" means each bank signatory hereto and its
successors and permitted assigns under Section 9.3.
"Board" means the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing" shall mean a group of Loans of a single
Type made by the Banks on a single date and as to which a
single Interest Period is in effect.
"Borrowing Date" means, with respect to any Loan, the
date on which such Loan is disbursed.
"Burke Parties" means, collectively, Burke Oil Co.
(formerly Pel-Tex Oil Company, Inc.), Chenier Oil Company,
Inc., Burke and Pel-Tex Oil Company, Inc., doing business as
Burmont Company, Earl P. Burke, Jr. and Fay Stouder Burke,
as assignors of the Pel-Tex Agreements to the Pel-Tex
Lenders.
"Business Day" means any day other than a Saturday,
Sunday or a day on which banks in New York City are
authorized or required by law to close; provided, however,
that when used in connection with a LIBO Rate Loan, the term
"Business Day" shall also exclude any day on which banks are
not open for dealings in Dollar deposits in the London
interbank market.
"Capitalized Lease Obligation" means the obligation of
any Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or
personal property which obligation is, or in accordance with
GAAP (including Statement of Financial Accounting Standards
No. 13 of the Financial Accounting Standards Board) is
required to be, classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP, and for
purposes of this Agreement the amount of such obligation
shall be the capitalized amount thereof determined in
accordance with GAAP.
A "Change in Control" shall be deemed to have occurred
if FTX shall for any reason cease to be the sole managing
general partner of the Partnership or the functions of FTX
as the managing general partner of the Partnership shall
generally be carried out for any reason by any person other
than FTX; provided that no Change in Control shall be deemed
to have occurred if any subsidiary of FTX designated by FTX
to discharge the duties of FTX as the managing general
partner of the Partnership shall carry out the functions of
FTX as managing general partner of the Partnership.
"Circle C Property" has the meaning assigned such term
in Section 4.2(g)(ii).
"Circle C Subsidiary" has the meaning assigned such
term in Section 4.2(g)(ii).
"Closing Date" means the date of execution and delivery
of this Agreement and the Promissory Notes.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral Agents" mean the FM Collateral Agent, the
FCX Collateral Agent and the FTX Collateral Agent.
"Commitment" means, with respect to each Bank, the
Commitment of such Bank hereunder to make revolving loans as
set forth on Schedule II hereto, or in the Assignment and
Acceptance pursuant to which such Bank assumed its
Commitment, as the same may be permanently terminated or
reduced from time to time pursuant to Section 2.7 and
pursuant to assignments by such Bank pursuant to
Section 9.3. The Commitment of each Bank shall
automatically and permanently terminate on the Maturity
Date.
"Commitment Fee" has the meaning assigned to such term
in Section 2.6(a).
"Commitment Termination Date" has the meaning assigned
to such term in Section 2.6(a).
"Commitment Transfer Supplement" means a Commitment
Transfer Supplement entered into by a Bank and an assignee,
and accepted by the Administrative Agent, in the form of
Exhibit D or such other form as shall be approved by the
Administrative Agent.
"Company" means FM Properties Inc., a Delaware
corporation, which holds directly and indirectly a 99.8%
general partnership interest in the Partnership.
"Control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the
management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Credit Event" means the making of a Loan.
"Default" means any event or condition which upon the
giving of notice or lapse of time or both would become an
Event of Default.
"Distribution Agreement" means the Distribution
Agreement dated as of June 10, 1992, among FTX, the Company
and the Partnership, in the form provided prior to the date
hereof by FTX to the Banks.
"Dollars" or "$" means United States Dollars.
"Domestic Office" means, for any Bank, the Domestic
Office set forth for such Bank on the signature pages
hereof, unless such Bank shall designate a different
Domestic Office by notice in writing to the Administrative
Agent and the Borrower.
"environment" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and
wetlands), the land surface or subsurface strata or as
otherwise defined in any Environmental Law.
"Environmental Claim" means any written notice of
violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any
Governmental Authority or any Person for damages, injunctive
or equitable relief, personal injury (including sickness,
disease or death), Remedial Action costs, tangible or
intangible property damage, natural resource damages,
nuisance, pollution, any adverse effect on the environment
caused by any Hazardous Material, or for fines, penalties or
restrictions, resulting from or based upon: (a) the
existence, or the continuation of the existence, of a
Release (including sudden or non-sudden, accidental or non-
accidental Releases); (b) exposure to any Hazardous
Material; (c) the presence, use, handling, transportation,
storage, treatment or disposal of any Hazardous Material; or
(d) the violation of any Environmental Law or Environmental
Permit.
"Environmental Law" means any and all applicable
treaties, laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural
resources, the management, Release or threatened Release of
any Hazardous Material or to health and safety matters,
including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986,
42 U.S.C. SECTION 9601 et seq. (collectively "CERCLA"), the Solid
Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Amendments
of 1984, 42 U.S.C. SECTION 6901 et seq., the Federal Water
Pollution Control Act, as amended by the Clean Water Act of
1977, 33 U.S.C. SECTION 1251 et seq., the Clean Air Act of 1970,
as amended 42 U.S.C. SECTION 7401 et seq., the Toxic Substances
Control Act of 1976, 15 U.S.C. SECTION 2601 et seq., the
Occupational Safety and Health Act of 1970, as amended,
29 U.S.C. SECTION 651 et seq., the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. SECTION 11001 et
seq., the Safe Drinking Water Act of 1974, as amended,
42 U.S.C. SECTION 300(f) et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. SECTION 1801 et seq., and any
similar or implementing state or local law, and all
amendments or regulations promulgated thereunder.
"Environmental Permit" means any permit, approval,
authorization, certificate, license, variance, filing or
permission required by or from any Governmental Authority
pursuant to any Environmental Law.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether
or not incorporated), that together with the Borrower, is
treated as a single employer under Section 414(b) or (c) of
the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer
under Section 414 of the Code.
"ERISA Event" means (i) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued
thereunder, with respect to a Plan; (ii) the adoption of any
amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code; (iii)
the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code),
whether or not waived; (iv) the incurrence of any liability
under Title IV of ERISA with respect to any Plan or
Multiemployer Plan, other than any liability for
contributions not yet due or payment of premiums not yet
due; (v) the receipt by the Borrower or any ERISA Affiliate
from the PBGC of any notice relating to the intention of the
PBGC to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (vi) the receipt by the Borrower or
any ERISA Affiliate of any notice concerning the imposition
of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; and
(vii) any other similar event or condition with respect to a
Plan or Multiemployer Plan that could reasonably result in
liability of the Borrower.
"Event of Default" means any Event of Default defined
in Article VI.
"Existing FM Credit Agreement" has the meaning assigned
such term in Section 5.1(e).
"FCX" means Freeport-McMoRan Copper & Gold Inc., a
Delaware corporation.
"FCX Collateral Agent" means Chemical in its capacity
as FCX Collateral Agent for the Lenders (as defined in the
FCX Intercreditor Agreement) under the FCX Pledge
Agreements.
"FCX Credit Agreement" means the $200,000,000 Credit
Agreement dated as of June 30, 1995, among FCX, FI, certain
banks, Chemical Bank, as Administrative Agent and FCX
Collateral Agent, The Chase Manhattan Bank (National
Association), as Documentary Agent, and First Trust of New
York, National Association, as FI Trustee.
"FCX Guaranty" means the FCX Guaranty Agreement dated
as of June 30, 1995, by FCX of the Loans, the Pel-Tex Debt
and the loans under the TCB Credit Agreement, substantially
in the form of Exhibit L, as such agreement may be amended
and in effect from time to time.
"FCX Intercreditor Agreement" means the Intercreditor
Agreement in the form of Exhibit H to the FCX Credit
Agreement, as such Agreement may be amended and in effect
from time to time.
"FCX Pledge Agreements" means the pledge agreements in
the forms of Exhibits E-1 and E-2 to the FCX Credit
Agreement, to be executed by FCX and delivered to the FCX
Collateral Agent, as such agreement may be amended and in
effect from time to time.
"Financial Officer" of any entity means the principal
financial officer, principal accounting officer, treasurer,
assistant treasurer or controller of such entity; provided
that the Financial Officers of FTX, as managing general
partner of the Partnership, shall be deemed to be Financial
Officers of the Partnership.
"FI" means P.T. Freeport Indonesia Company, a limited
liability company organized under the laws of Indonesia and
domesticated in Delaware.
"Florida Joint Venture Agreement" means the Joint
Venture Agreement dated as of June 11, 1992, between IMC-
Agrico and the Partnership, in the form provided prior to
the date hereof by FTX to the Banks.
"FM Florida Properties Co." means FM Florida Properties
Co., a Delaware general partnership between the Partnership
and IMC-Agrico, formed pursuant to the Florida Joint Venture
Agreement.
"FM Intercreditor Agreement" means the Intercreditor
Agreement among FCX, FTX, the Administrative Agent and the
Pel-Tex Agent in the form of Exhibit I hereto, as such
Agreement may be amended and in effect from time to time.
"FRP" means Freeport-McMoRan Resource Partners, Limited
Partnership, a Delaware limited partnership.
"FTX Collateral Agent" means Chemical in its capacity
as FTX Collateral Agent for the Lenders (as defined in the
FTX Intercreditor Agreement) under the FTX Security
Agreement.
"FTX Credit Agreement" means the Credit Agreement dated
as of June 30, 1995, among FTX, FRP, certain banks, Chemical
Bank, as Administrative Agent and FTX Collateral Agent, and
The Chase Manhattan Bank (National Association), as
Documentary Agent.
"FTX/FMPO Credit Agreement" means the Credit Agreement
dated as of the Funding Date, between FTX and the Company,
in the form of Exhibit H hereto, as such agreement may be
amended as permitted hereby and in effect from time to time.
"FTX Guaranty" means the FTX Guaranty Agreement dated
as of June 30, 1995, providing for the guarantee by FTX of
the Loans, the Pel-Tex Debt and the loans under the TCB
Credit Agreement, substantially in the form of Exhibit K, as
such agreement may be amended and in effect from time to
time.
"FTX Intercreditor Agreement" means the Intercreditor
Agreement entered into as of June 11, 1992, as amended and
restated in its entirety as of June 1, 1993, and as of the
Funding Date in the form attached to the FTX Credit
Agreement as Exhibit G, among the Administrative Agent on
behalf of the Banks, the FTX Agent on behalf of the FTX
Lenders, the Pel-Tex Agent on behalf of the Pel-Tex Lenders
(each as defined therein), TCB and Chemical, as FTX
Collateral Agent, as such agreement may be further amended
and in effect from time to time.
"FTX Term Loan" has the meaning assigned such term in
the last clause of Section 4.2(g).
"FTX Security Agreement" means the security agreement
in the form of Exhibit F to the FTX Credit Agreement,
executed by FTX and delivered to the FTX Collateral Agent as
such agreement may be amended and in effect from time to
time.
"Funding Date" means the first date on which the
conditions to borrowing set forth in Article V have been
satisfied.
"GAAP" has the meaning assigned to such term in
Section 1.2.
"Governmental Authority" means any Federal, state,
local or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Governmental Rule" means any statute, law, treaty,
rule, code, ordinance, regulation, permit, certificate or
order of any Governmental Authority or any judgment, decree,
injunction, writ, order or like action of any court,
arbitrator or other judicial or quasijudicial tribunal.
"Guarantee" means, with respect to any Person, any
obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing
any Indebtedness or obligation of any other Person in any
manner, whether directly or indirectly, and including,
without limitation, any agreement or obligation (i) to pay
dividends or other distributions upon the stock of such
other Person, or any obligation of such other Person, direct
or indirect, (ii) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or
obligation or to purchase (or advance or supply funds for
the purchase of) any security for the payment of such
Indebtedness, obligation, dividend or distribution, (iii) to
purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or
obligation or the holder of such stock of the payment of
such Indebtedness, obligation, dividend or distribution
including, without limitation, any take-or-pay contract or
agreement to buy a minimum amount or quantity of production
or to provide an operating subsidy which, in each case, is
utilized for a third party financing, or (iv) to maintain
working capital, equity capital or any other financial
statement condition of the primary obligor, so as to enable
the primary obligor to pay such Indebtedness, obligation,
dividend or distribution; provided, however, that the term
Guarantee shall not include any endorsement for collection
or deposit in the ordinary course of business.
"Guaranties" shall mean the FCX Guaranty and the FTX
Guaranty.
"Hazardous Materials" means all explosive or
radioactive substances or wastes, hazardous or toxic
substances or wastes, pollutants, solid, liquid or gaseous
wastes, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated
biphenyls ("PCBs") or PCB-containing materials or equipment,
radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedge Agreement" means any interest rate, currency or
commodity swap, cap, floor or collar agreement or similar
hedging arrangement providing for the transfer or mitigation
of interest rate, commodity price or currency value or
exchange rate risks, either generally or under specific
contingencies.
"IMC-Agrico" means the general partnership formed
pursuant to the IMC-Agrico Partnership Agreement.
"IMC-Agrico Partnership Agreement" means the Amended
and Restated Partnership Agreement dated as of July 1, 1993,
by and among Agrico LP, a Delaware limited partnership, IMC-
Agrico GP Company, a Delaware corporation, IMC-Agrico MP
Inc., a Delaware corporation, as amended and in effect from
time to time as permitted by Section 5.2(r) of the FTX
Credit Agreement as incorporated herein by reference.
"Indebtedness" of any Person means, without
duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all
obligations of such Person for the unearned balance of any
payment received under any contract outstanding for 180
days, (d) all obligations of such Person under conditional
sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all
obligations of such Person issued or assumed as the deferred
purchase price of property or services (excluding trade
accounts payable and accrued obligations incurred in the
ordinary course of business so long as the same are not
180 days overdue or, if overdue, are being contested in good
faith and by appropriate proceedings), (f) all Indebtedness
of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by
such Person, whether or not the obligations secured thereby
have been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capitalized Lease
Obligations of such Person, (i) all recourse obligations of
such Person with respect to sales of accounts receivable
which would be shown under GAAP on the balance sheet of such
Person as a liability, (j) all obligations of such Person as
an account party (including reimbursement obligations to the
issuer of a letter of credit) in respect of bankers'
acceptances and letters of credit Guaranteeing Indebtedness
and (k) all non-contingent obligations of such Person as an
account party (including reimbursement obligations to the
issuer of a letter of credit) in respect of letters of
credit other than those referred to in clause (j) above.
The Indebtedness of any Person shall include the
Indebtedness of any partnership in which such Person is a
general partner but shall exclude obligations under leases
which are characterized as Operating Leases.
"Intercreditor Documents" means the FM Intercreditor
Agreement, the FTX Intercreditor Agreement and the FCX
Intercreditor Agreement.
"Interest Payment Date" means (i) as to any Reference
Rate Loan, the next succeeding March 31, June 30,
September 30 or December 31 (subject to Section 2.16), or if
earlier, the Maturity Date, and (ii) as to any LIBO Rate
Loan, the last day of the Interest Period applicable to such
Loan (and, in the case of any Interest Period of more than
three months' duration, the date that would be the last day
of such Interest Period if such Interest Period were of
three months' duration) and the date of any continuation or
conversion of such Loan as or into a Loan of the same or a
different type.
"Interest Period" means (i) as to any LIBO Rate Loan,
the period commencing on the date of such LIBO Rate Loan or
on the last day of the immediately preceding Interest Period
applicable to such Loan, as the case may be, and ending on
the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter, as
the Borrower may elect, and (ii) as to any Reference Rate
Loan, the period commencing on the date of such Reference
Rate Loan or on the last day of the immediately preceding
Interest Period applicable to such Loan, as the case may be,
and ending on the earliest of (x) the next succeeding
March 31, June 30, September 30 or December 31, (y) the
Maturity Date and (z) the date such Loan is prepaid or
converted as permitted hereby; provided, however, that
(1) if any Interest Period would end on a day that shall not
be a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, with respect to
LIBO Rate Loans only, such next succeeding Business Day
would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business
Day, (2) no Interest Period with respect to any Loan shall
end later than the Maturity Date and (3) interest shall
accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest
Period.
"Key Assets" means the properties and assets of the
Borrower shown on Schedule III.
"LIBO Rate" means, with respect to any LIBO Rate Loan
for any Interest Period, an interest rate per annum (rounded
upwards, if not already a whole multiple of 1/100 of 1%, to
the next higher 1/100 of 1%) equal to the arithmetic average
of the respective rates per annum at which Dollar deposits
approximately equal in principal amount to Chemical's
portions of such LIBO Rate Loan and for a maturity equal to
the applicable Interest Period are offered in immediately
available funds to the principal London offices of
Chemical's in the London Interbank Market at approximately
11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"LIBO Rate Loan" means any Loan for which interest is
determined, in accordance with the provisions hereof, at the
Applicable LIBO Rate.
"LIBOR Office" means, for any Bank, the LIBOR Office
set forth for such Bank on the signature pages hereof or as
otherwise notified in writing to the Administrative Agent
and the Borrower, unless such Bank shall designate a
different LIBOR Office by notice in writing to the
Administrative Agent and the Borrower.
"Lien" means with respect to any asset, (a) a mortgage,
deed of trust, lien, pledge, encumbrance, charge or security
interest in or on such asset, (b) the interest of a vendor
or a lessor under any conditional sale agreement, capital
lease or title retention agreement relating to such asset,
(c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such
securities and (d) other encumbrances of any kind,
including, without limitation, production payment
obligations.
"Loans" means the revolving loans made by the Banks to
the Borrower pursuant to Section 2.1. Each Loan shall be
either a LIBO Rate Loan or a Reference Rate Loan.
"Loan Documents" means this Agreement, the Promissory
Notes, the FCX Guaranty, the FTX Guaranty, the
Intercreditor Agreements, the Security Agreements and all
other agreements, certificates and instruments now or
hereafter entered into in connection with any of the
foregoing, in each case as amended and modified from time to
time.
"Loan Exposure" means the aggregate amount of unpaid
principal of all Loans made by the Banks.
"Margin Stock" has the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" means (a) a materially
adverse effect on the business, assets, operations,
prospects or condition, financial or otherwise, of a
Guarantor or the Borrower and the Subsidiaries taken as a
whole, (b) material impairment of the ability of a Guarantor
or the Borrower or any of the Subsidiaries to perform any of
its obligations under any Loan Document to which it is or
will be a party or (c) material impairment of the rights of
or benefits available to the Banks under any Loan Document.
"Material Agreements" means the Distribution Agreement,
the Partnership Agreement, the Administrative Services
Agreement, the FRP Joint Venture Agreement, the
Reimbursement Agreement and the FTX/FMPO Credit Agreement.
"Maturity Date" means the second anniversary of the
Closing Date, or, if earlier, the date of termination of the
Commitments pursuant to the terms hereof.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower
or any ERISA Affiliate is making or accruing an obligation
to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make
contributions.
"Net Proceeds" shall mean in connection with any
permitted asset sale, the proceeds thereof (including any
condemnation award and any payment or settlement of a
casualty insurance claim not used to restore the related
property) in the form of cash or cash equivalents (including
any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only
as and when received), net of the following, without
duplication: (i) customary and reasonable attorneys' fees,
accountants' fees, investment banking fees, brokerage
commissions, all closing costs, and other customary fees and
expenses actually incurred in connection therewith as
transaction costs, and bona fide reserves and deposits, and
(ii) any taxes paid or reasonably estimated to be payable
solely in respect of such permitted asset sale as a result
thereof by the owner of such asset (after taking into
account any available tax credits or deductions).
"1994 FCX Form 10-K" means the Annual Report on Form
10-K of FCX for the year ended December 31, 1994.
"1994 FM Form 10-K" means the Annual Report on Form 10-
K of the Company for the year ended December 31, 1994.
"1994 FTX Form 10-K" means the Annual Report on
Form 10-K of FTX for the year ended December 31, 1994.
"Operating Lease" means any lease other than a lease
giving rise to a Capitalized Lease Obligation.
"Partnership Agreement" means the Amended and Restated
Agreement of General Partnership dated as of June 11, 1992,
among FTX, the Company and FMOP Sub Inc., in the form
provided prior to the date hereof by FTX to the Banks.
"Partnership Obligations" means the principal and
interest on each Loan and all other amounts payable by the
Borrower hereunder and under the other Loan Documents,
including fees, indemnities and reimbursement of costs and
expenses.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Pel-Tex Agent" means Hibernia National Bank, as Agent
for the Pel-Tex Banks.
"Pel-Tex Agreements" means the Note Agreement and
related documents dated as of December 31, 1985, as amended
and restated and in effect from time to time, between the
Partnership (as ultimate successor to FMP Operating Company)
and the Pel-Tex Banks (as successor to the Burke Parties).
"Pel-Tex Bank Agreement" means the Credit Agreement
dated as of December 31, 1985, as amended and in effect from
time to time, among the Burke Parties, the Pel-Tex Banks and
Pel-Tex Agent.
"Pel-Tex Banks" means, collectively, the banks which
were parties to the Pel-Tex Bank Agreement and, in
connection with satisfaction on the Burke Parties of the
Pel-Tex Bank Agreement, became the successors to the Burke
Parties under the Pel-Tex Agreements (and the successors and
assigns of such Banks).
"Pel-Tex Debt" means the Indebtedness permitted by
Section 4.2(g)(i).
"Pel-Tex Lenders" means, collectively, the Pel-Tex
Banks and the Pel-Tex Agent.
"Pel-Tex Obligations" means, without duplication, all
amounts owing by, and all other obligations (including
without limitation in respect of fees, indemnities and reim-
bursement of costs or expenses), whether direct or contin-
gent, now or hereafter existing, due or to become due, mone-
tary or otherwise, of the Partnership to the Pel-Tex Lenders
in connection with the Pel-Tex Agreements.
"Permitted Investments means:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed
by, the United States of America, in each case maturing
within 90 days from the date of acquisition thereof;
(b) investments in commercial paper maturing within 90
days from the date of acquisition thereof and having, at
such date of acquisition, an A-1 credit rating from
Standard & Poor's Corporation or a P-1 credit rating from
Moody's Investors Service, Inc.;
(c) investments in certificates of deposit, banker's
acceptances and time deposits (onshore or offshore)
maturing within 90 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any
commercial bank, foreign or domestic, having a short-term
deposit rating issued by Moody's Investor Service, Inc. of
P-1;
(d) investments in readily marketable money market
funds having assets in excess of $1,000,000,000, which
assets have an average life of less than one year; and
(e) other investment instruments approved in writing by
the Required Banks.
"Permitted Swap" means any Hedge Agreement between the
Partnership or any Subsidiary and any Bank or its affiliates
that shall not require the payment of any up-front fee or
other up-front amount or any advance payment (including such
a payment in lieu of periodic payments of amounts accrued
during any period).
"Person" means any natural person, corporation,
partnership, joint venture, trust, incorporated or
unincorporated association, joint stock company, government
(or an agency or political subdivision thereof) or other
entity of any kind.
"Plan" means any employee pension benefit plan (other
than a Multiemployer Plan) which is subject to the
provisions of Title IV of ERISA or Section 412 of the Code
and in respect of which the Borrower or any ERISA Affiliate
is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Promissory Note" means a promissory note of the
Borrower, substantially in the form of Exhibit A, as
applicable, evidencing the Loans.
"Promissory Notes" means the promissory notes of the
Borrower referred to in Section 2.4.
"Property" has the meaning assigned such term in
Section 3.1(k).
"Reimbursement Agreement" means the Reimbursement
Agreement between the Partnership and FTX and FCX in the
form of Exhibit J hereto as such agreement may be amended as
permitted hereby and in effect from time to time.
"Reference Rate Loan" means any Loan for which interest
is determined, in accordance with the provisions hereof, at
the Applicable Reference Rate.
"Register" has the meaning assigned such term in
Section 9.3(d).
"Regulation D" means Regulation D of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation G" means Regulation G of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as from
time to time in effect and all official rulings andinterpretations
thereunder or thereof.
"Release" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, disposing, depositing,
dispersing, emanating or migrating of any Hazardous Material
in, into, onto or through the environment.
"Remedial Action" means (a) "remedial action" as such
term is defined in CERCLA, 42 U.S.C. Section 9601(24), and
(b) all other actions required by any Governmental Authority
or voluntarily undertaken to: (i) cleanup, remove, treat,
abate or in any other way address any Hazardous Material in
the environment; (ii) prevent the Release or threat of
Release, or minimize the further Release of any Hazardous
Material so it does not migrate or endanger or threaten to
endanger public health, welfare or the environment; or
(iii) perform studies and investigations in connection with,
or as a precondition to, (i) or (ii) above.
"Required Banks" means, subject to Section 9.7(b), at
any time Banks having Commitments representing at least 66-
2/3% of the aggregate Commitments hereunder or, if the
Commitments have been terminated, Banks having outstanding
Loans representing at least 66-2/3% of the aggregate
principal amount of the outstanding Loans.
"Responsible Officer" of any entity means any executive
officer or Financial Officer of such entity and any other
officer or similar official thereof responsible for the
administration of the obligations of such entity in respect
of this Agreement; provided that the Responsible Officers of
FTX, as managing general partner of the Partnership, shall
be deemed to be Responsible Officers of the Partnership.
"Restricted Subsidiary" has the meaning assigned to
such term in the FTX Credit Agreement or the FCX Credit
Agreement, as applicable.
"Restructuring" means the transactions between FTX and
FCX (on the one hand) and RTZ, RTZ Indonesia and RTZ America
(on the other hand) pursuant to the Stock Purchase
Agreement, and the distribution on a generally tax free
basis (subject to exceptions approved by the Administrative
Agent and the Documentary Agent) by FTX to its shareholders
of the shares of FCX, thereby leaving FTX as a holding
company for FRP and leaving FCX as the publicly held holding
company for FI, together with arrangements required by or
effectuated in connection with such distribution with
respect to existing contractual agreements and indebtedness
of FTX, FRP, FCX and FI, all on terms substantially the same
as those set forth in Schedule XI to the FTX Credit
Agreement or otherwise satisfactory to the Required Banks
(including all tax, accounting, corporate and partnership
matters).
"RTZ" means the RTZ Corporation PLC, a company
organized under the laws of England.
"RTZ America" means RTZ America, Inc., a Delaware
corporation and a wholly owned subsidiary of RTZ.
"RTZ Indonesia" means RTZ Indonesia Limited, a company
organized under the laws of England and a wholly owned
subsidiary of RTZ.
"SEC" means the Securities and Exchange Commission.
"Security Agreements" means, collectively, the FCX
Pledge Agreements and the FTX Security Agreement.
"Specified Entities" means FTX, FCX, the Company, the
Restricted Subsidiaries of FTX and FCX, the Partnership and
the Subsidiaries.
"Statutory Reserves" means a fraction (expressed as a
decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate
of the maximum reserve percentages (including, without
limitation, any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board
and any other banking authority, domestic or foreign, to
which the Administrative Agent or any Bank (including any
branch, Affiliate, or other funding office making or holding
a Loan) is subject (a) with respect to the Base CD Rate (as
such term is used in the definition of "Alternate Base
Rate"), for new negotiable nonpersonal time deposits in
Dollars of over $100,000 with maturities approximately equal
to the applicable Interest Period, and (b) with respect to
the LIBO Rate, for Eurocurrency Liabilities (as defined in
Regulation D). Such reserve percentages shall include,
without limitation, those imposed under Regulation D.
Statutory Reserves shall be adjusted automatically on and as
of the effective date of any change in any reserve
percentage.
"Subordination Terms" means the form of subordination
terms set forth as Exhibit E hereto.
"subsidiary" means, with respect to any Person, any
corporation at least a majority of whose securities having
ordinary voting power for the election of directors (other
than securities having such power only by reason of the
happening of a contingency) are at the time owned by such
Person and/or one or more other subsidiaries of such Person
and any partnership (other than joint ventures for which the
intention under the applicable agreements, including
operating agreements, if any, is that such joint ventures be
partnerships solely for purposes of the Code) in which such
person or a subsidiary of such person is a general partner.
"Subsidiary" means any subsidiary of the Partnership.
"TCB" means Texas Commerce Bank National Association, a
national banking association (and its successors and
assigns).
"TCB Borrower" means the borrower under the TCB Credit
Agreement.
"TCB Borrower Properties" means the Mortgaged Property
described in (and as defined in) the TCB Deed of Trust.
"TCB Collateral" means all of the TCB Borrower's
properties or assets, now owned or hereafter acquired,
including without limitation the TCB Borrower Properties.
"TCB Credit Agreement" means the Credit Agreement dated
as of February 6, 1992, as amended to the date hereof and as
further amended and in effect from time to time, between the
TCB Borrower and TCB.
"TCB Deed of Trust" means the Deed of Trust (with
security agreement and financing statement) recorded in
Volume 11620, Page 1213 of the real property records of
Travis County, Texas, and in the official public records of
Hays County, Texas.
"Threshold Amount" means, with respect to FTX, FCX
and/or their Restricted Subsidiaries, $10,000,000, and, with
respect to the Partnership or any Subsidiary, $5,000,000.
"Total Commitment" means the sum of all the then
effective Commitments.
"Transfer" means the transfer by FTX to the Partnership
of certain oil, gas and real estate assets, pursuant to and
in accordance with the Distribution Agreement, all as
described in the Form 10.
"Transfer Effective Date" has the meaning assigned to
such term in each Commitment Transfer Supplement.
"Transferee" means any Participant or Purchasing Bank,
as such terms are defined in Section 9.3.
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2. Accounting Terms. Except as otherwise
herein specifically provided, each accounting term used
herein shall have the meaning given it under United States
generally accepted accounting principles in effect from time
to time (with such changes thereto as are approved or
concurred in from time to time by the Partnership's or FTX's
independent public accountants, as applicable) applied on a
basis consistent with those used in preparing the financial
statements referred to in Section 5.1(a) of the FTX Credit
Agreement ("GAAP"); provided, however, that each reference
in Section 5.2, or in the definition of any term used in
Section 5.2, to GAAP shall mean generally accepted
accounting principles as in effect on the Closing Date and
as applied by FTX in preparing the financial statements
referred to in Section 3.1(e). In the event any change in
GAAP materially affects any provision of this Agreement, the
Banks and the Borrower agree that they shall negotiate in
good faith in order to amend the affected provisions in such
a way as will restore the parties to their respective
positions prior to such change, and until such amendment
becomes effective the Borrower's compliance with such
provisions shall be determined on the basis of GAAP as in
effect immediately before such change in GAAP became
effective.
SECTION 1.3. Section, Article, Exhibit and Schedule
References, etc. Unless otherwise stated, Section, Article,
Exhibit and Schedule references made herein are to Sections,
Articles, Exhibits or Schedules, as the case may be, of this
Agreement. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase
"without limitation". Except as otherwise expressly
provided herein, any reference in this Agreement to any Loan
Document shall mean such document as amended, restated,
supplemented or otherwise modified from time to time.
SECTION 1.4. Incorporated Agreements and Definitions.
Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the FTX
Credit Agreement or the FCX Credit Agreement, as applicable,
and the definitions of such terms, and of any other terms
included in such definitions are hereby incorporated by
reference into this Agreement (but only for the purpose of
ascertaining the meanings of such incorporated definitions).
For purposes of such incorporation by reference, the FTX
Credit Agreement and the FCX Credit Agreement shall
automatically mean such agreements in the form modified or
amended from time to time, without the necessity of any
further action or approval pursuant to this Agreement. If
either the FCX Credit Agreement or the FTX Credit Agreement
shall be terminated, for purposes of this Agreement, the
provisions of the terminated agreement incorporated herein
shall be deemed to be those as in effect immediately prior
to such termination.
ARTICLE II
The Loans
SECTION 2.1. Revolving Credit Facility. Upon the
terms and subject to the conditions and relying upon the
representations and warranties herein set forth, each Bank,
severally and not jointly, agrees to make Loans to the
Borrower, at any time and from time to time on or after the
Funding Date, and until the earlier of the Maturity Date and
the termination of the Commitment of such Bank in accordance
with the terms hereof, in an aggregate principal amount not
to exceed such Bank's Applicable Percentage of the then
effective unused Total Commitment on the Borrowing Date for
such Loan. Within the foregoing limits, the Borrower may
borrow, repay and reborrow, prior to the Maturity Date,
Loans subject to the terms, provisions and limitations set
forth herein.
SECTION 2.2. Loans. (a) The Loans made by the Banks
to the Borrower on any one date shall be in an aggregate
principal amount which is (i) an integral multiple of
$1,000,000 or (ii) equal to the remaining available balance
of the applicable Commitments. The Loans by each Bank to
the Borrower made on and after the Funding Date shall be
made against an appropriate Promissory Note, payable to the
order of such Bank in the amount of its Commitment, executed
by the Borrower and delivered to such Bank on the Closing
Date, as referred to in Section 2.4.
(b) Each Loan shall be either a Reference Rate Loan or
a LIBO Rate Loan as the Borrower may request pursuant to
Section 2.3. Subject to the provisions of Sections 2.3 and
2.10, Loans of more than one type may be outstanding at the
same time.
(c) Each Bank shall make its portion, as determined
under Section 2.14, of each Loan hereunder on the proposed
date thereof by paying the amount required to the
Administrative Agent in New York, New York in immediately
available funds not later than 2:00 p.m., New York City
time, and the Administrative Agent shall by 3:00 p.m.,
New York City time, credit the amounts so received to the
general deposit account of the Borrower with the
Administrative Agent or, if Loans shall not be made on such
date because any condition precedent to a borrowing herein
specified is not met, return the amounts so received to the
respective Banks. Unless the Administrative Agent shall
have received notice from a Bank prior to the date of any
Loan that such Bank will not make available to the
Administrative Agent such Bank's portion of such Loan, the
Administrative Agent may assume that such Bank has made such
portion available to the Administrative Agent on the date of
such Loan in accordance with this paragraph (c) and the
Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding
amount. If the Administrative Agent shall have so made
funds available, then to the extent that such Bank shall not
have made such portion available to the Administrative
Agent, such Bank and the Borrower severally agree to repay
without duplication to the Administrative Agent forthwith on
demand such corresponding amount together with interest
thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is
repaid to the Administrative Agent at an interest rate equal
to (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such
borrowing and (ii) in the case of such Bank, a rate
determined by the Administrative Agent to represent its cost
of overnight or short-term funds (which determination shall
be conclusive absent manifest error). If such Bank shall
repay to the Administrative Agent such corresponding amount,
such amount shall constitute such Bank's Loan for purposes
of this Agreement.
SECTION 2.3. Notice of Loans. (a) In order to
request a Loan, the Borrower shall give the Administrative
Agent irrevocable telephonic (promptly confirmed in
writing), written, telecopy or telex notice in the form of
Exhibit B with respect to each Loan (i) in the case of a
LIBO Rate Loan, not later than 10:30 a.m., New York City
time, three Business Days before a proposed borrowing, and
(ii) in the case of a Reference Rate Loan, not later than
10:30 a.m., New York City time, on the date of a proposed
borrowing. Such notice shall be irrevocable (except that in
the case of a LIBO Rate Loan, the Borrower may, subject to
Section 2.13, revoke such notice by giving written or telex
notice thereof to the Administrative Agent not later than
10:30 a.m., New York City time, two Business Days before
such proposed borrowing) and shall in each case refer to
this Agreement and specify (1) whether the Loan then being
requested is to be a Reference Rate Loan or LIBO Rate Loan,
(2) the date of such Loan (which shall be a Business Day)
and amount thereof, and (3) if such Loan is to be a LIBO
Rate Loan, the Interest Period or Interest Periods (which
shall not end after the Maturity Date) with respect thereto.
If no election as to the type of Loan is specified in any
such notice by the Borrower, such Loan shall be a Reference
Rate Loan. If no Interest Period with respect to any LIBO
Rate Loan is specified in any such notice by the Borrower,
then the Borrower shall be deemed to have selected an
Interest Period of one month's duration. The Administrative
Agent shall promptly advise the other Banks of any notice
given by the Borrower pursuant to this Section 2.3(a) and of
each Bank's portion of the requested Loan.
(b) The Borrower may continue or convert all or any
part of any Loan as or into a Loan of the same or a
different type in accordance with Section 2.10 and subject
to the limitations set forth herein. If the Borrower shall
not have delivered a borrowing notice in accordance with
this Section 2.3 prior to the end of the Interest Period
then in effect for any Loan of the Borrower requesting that
such Loan be converted or continued as permitted hereby,
then the Borrower shall (unless the Borrower has notified
the Administrative Agent, not less than three Business Days
prior to the end of such Interest Period, that such Loan is
to be repaid at the end of such Interest Period) be deemed
to have delivered a borrowing notice pursuant to Section 2.3
requesting that such Loan be converted into or continued as
a Reference Rate Loan of equivalent amount.
(c) Notwithstanding any provision to the contrary in
this Agreement, the Borrower shall not in any borrowing
notice under this Section 2.3 request any LIBO Rate Loan
which, if made, would result in more than 8 separate LIBO
Rate Loans of any Bank. For purposes of the foregoing,
Loans having different Interest Periods, regardless of
whether they commence on the same date, shall be considered
separate Loans.
SECTION 2.4. Promissory Notes. (a) The Loans made by
each Bank to the Borrower shall be evidenced by a Promissory
Note duly executed on behalf of the Borrower, dated the
Closing Date, in substantially the form attached hereto as
Exhibit A, payable to the order of such Bank in a principal
amount equal to its Commitment. The outstanding principal
balance of each Loan, as evidenced by such Promissory Note,
shall be payable on the Maturity Date. Each Promissory Note
shall bear interest from the date of the first borrowing
hereunder on the outstanding principal balance thereof, as
provided in Section 2.5.
(b) Each Bank shall maintain in accordance with its
usual practice an account or accounts evidencing the
indebtedness to such Bank resulting from each Loan made by
such Bank from time to time, including the amounts of
principal and interest payable and paid to such Bank from
time to time under this Agreement. Each Bank shall, and is
hereby authorized by the Borrower to, endorse on the
schedule attached to the Promissory Note delivered by the
Borrower to such Bank (or on a continuation of such schedule
attached to such Promissory Note and made a part thereof),
or otherwise record in such Bank's internal records, an
appropriate notation evidencing the date and amount of each
Loan from such Bank to the Borrower, as well as the date and
amount of each payment and prepayment with respect thereto;
provided, however, that the failure of any Bank to make such
a notation or any error in such a notation shall not affect
the obligation of the Borrower to repay the Loans made by
such Bank in accordance with the terms of this Agreement and
such Promissory Note.
(c) The Administrative Agent shall maintain accounts
for (i) the type of each Loan made and the Interest Period
applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from
the Borrower to each Bank hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder from
the Borrower and each Bank's share thereof.
(d) The entries made in the accounts maintained
pursuant to paragraphs (b) and (c) of this Section 2.4 shall
be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the
failure of any Bank or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner
affect the obligations of the Borrower to repay the Loans in
accordance with their terms.
SECTION 2.5. Interest on Loans. (a) Subject to the
provisions of Section 2.8, each Reference Rate Loan shall
bear interest at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 365 or
366 days, as the case may be, when determined by reference
to the Prime Rate, and over a year of 360 days at all other
times), equal to the Applicable Reference Rate.
(b) Subject to the provisions of Section 2.8, each
Loan which is a LIBO Rate Loan shall bear interest at a rate
per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the
Applicable LIBO Rate for the Interest Period in effect for
such Loan.
(c) Interest on each Loan shall be payable on each
applicable Interest Payment Date. The Applicable Reference
Rate and the Applicable LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be
conclusive absent manifest error. The Administrative Agent
shall promptly advise the Borrower and each Bank of such
determination.
SECTION 2.6. Fees. (a) The Borrower shall pay each
Bank, through the Administrative Agent, on the last Business
Day of each March, June, September and December, and on the
date on which the Commitment of such Lender shall be
terminated as provided herein (the "Commitment Termination
Date"), in immediately available funds, a commitment fee (a
"Commitment Fee") from and including the Closing Date
through and including the Commitment Termination Date on the
average daily amount of such Bank's Applicable Percentage of
the unused Total Commitment during the quarter (or shorter
period commencing with the earlier of June 30, 1995, and the
Funding Date or ending with the Commitment Termination Date)
ending on such date equal to the applicable Commitment Fee
Percentage set forth in Schedule I hereto.
(b) All Commitment Fees under this Section 2.6 shall
be computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be.
The Commitment Fees due to each Bank shall cease to accrue
on the earlier of the Maturity Date and the termination of
the Commitment of such Bank pursuant to Section 2.7.
(c) The Borrower agrees to pay to the Administrative
Agent, for its own account, on the Closing Date and on each
anniversary thereof, an administration fee (the
"Administrative Fee") as agreed between the Borrower and the
Administrative Agent.
(d) All such fees shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for
distribution, if and as appropriate, among the Banks. Once
paid, all such fees shall be fully earned under any and all
circumstances.
SECTION 2.7. Maturity and Reduction of Commitments.
(a) Upon at least five days' prior written, telecopied or
telex notice to the Administrative Agent, the Borrower may
without penalty at any time in whole permanently terminate,
or from time to time permanently reduce, the Total
Commitment, ratably among the Banks in accordance with the
amounts of their respective Commitments; provided, however,
that each partial reduction of the Commitment Amount shall
be in a minimum principal amount of $1,000,000 and an
integral multiple of $1,000,000; provided further that the
Total Commitment may not be reduced to an amount which is
less than the aggregate principal amount of all Loans
outstanding after such reduction.
(b) The Total Commitment shall be automatically and
permanently reduced by an amount equal to 50% of the Net
Proceeds of any Key Asset sale. The Total Commitment shall
also be automatically and permanently reduced by an amount
equal to such portion of the proceeds of any equity issuance
(other than pursuant to employee option plans and similar
arrangements) by the Borrower and the Subsidiaries to any
Person other than the Borrower and the Subsidiaries. The
Commitment reductions required by this Section 2.7(b) shall
be effective as of the date of closing or effectiveness of
any transaction subject hereto; provided that with respect
to any non-cash Net Proceeds, such Commitment reductions
shall be effective as of the date of receipt of cash
proceeds thereof.
(c) On the Maturity Date, the Commitments shall
automatically terminate and any outstanding Loans shall be
due and payable in full.
SECTION 2.8. Interest on Overdue Amounts; Alternative
Rate of Interest. (a) If the Borrower shall default in the
payment of the principal of or interest on any Loan or any
other amount becoming due hereunder or under any other Loan
Document, by acceleration or otherwise, the Borrower shall
on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount up to the date of
actual payment (after as well as before judgment):
(i) in the case of the payment of principal of or
interest on a LIBO Rate Loan, at a rate 2% above the rate
which would otherwise be payable under Section 2.5(b)
until the last date of the Interest Period then in effect
with respect to such Loan and thereafter as provided in
clause (ii) below; and
(ii) in the case of the payment of principal of or
interest on a Reference Rate Loan or any other amount
payable hereunder (other than principal of or interest on
any LIBO Rate Loan to the extent referred to in clause (i)
above), at a rate 2% above the Applicable Reference Rate.
(b) In the event, and on each occasion, that on the
day two Business Days prior to the commencement of any
Interest Period for a LIBO Rate Loan the Administrative
Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower absent manifest
error) that (i) Dollar deposits in the requested principal
amount of such LIBO Rate Loan are not generally available in
the London Interbank Market, (ii) the rates at which Dollar
deposits are being offered will not adequately and fairly
reflect the cost to any Bank of making or maintaining such
LIBO Rate Loan during such Interest Period or
(iii) reasonable means do not exist for ascertaining the
Applicable LIBO Rate, the Administrative Agent shall as soon
as practicable thereafter give written, telecopied or telex
notice of such determination to the Borrower and the other
Banks, and any request by the Borrower for the making of a
LIBO Rate Loan pursuant to Section 2.3 or 2.10 shall, until
the Administrative Agent shall have advised the Borrower and
the Banks that the circumstances giving rise to such notice
no longer exist, be deemed to be a request for a Reference
Rate Loan; provided, however, that if the Administrative
Agent makes the determination specified in (ii) above, at
the option of the Borrower such request shall be deemed to
be a request for a Reference Rate Loan only from such Bank
referred to in (ii) above; provided further, however, that
such option shall not be available to the Borrower if the
Administrative Agent makes the determination specified in
(ii) above with respect to three or more Banks. Each
determination of the Administrative Agent hereunder shall be
conclusive absent manifest error.
SECTION 2.9. Prepayment of Loans. (a) The Borrower
shall have the right at any time and from time to time to
prepay any of its Loans, in whole or in part, subject to the
requirements of Section 2.13 but otherwise without premium
or penalty, upon prior written or telex notice to the
Administrative Agent by 10:30 a.m., New York City time, on
the date of such prepayment; provided, however, that each
such partial prepayment shall be in a minimum amount of
$1,000,000 and an integral multiple of $1,000,000.
(b) In the event of any termination of the
Commitments, the Borrower shall repay or prepay all its
outstanding Loans on the date of such termination. On the
date of any partial reduction of the Commitments pursuant to
Section 2.7, including as required by Section 2.7(b), the
Borrower shall pay or prepay so much of their respective
Loans as shall be necessary in order that the aggregate
principal amount of the Loans (after giving effect to any
other prepayment of Loans on such date) outstanding will not
exceed the Total Commitment immediately following suchreduction.
(c) All prepayments under this Section 2.9 shall be
subject to Section 2.13. Each notice of prepayment
delivered pursuant to paragraph (a) above shall specify the
prepayment date and the principal amount of each Loan (or
portion thereof) to be prepaid, shall be irrevocable and
shall commit the Borrower upon giving such notice to prepay
such Loan by the amount stated therein on the date stated
therein. All prepayments shall be applied first to
Reference Rate Loans and then to LIBO Rate Loans and shall
be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment. Any amounts prepaid
may be reborrowed to the extent permitted by the terms of
this Agreement.
SECTION 2.10. Continuation and Conversion of Loans.
The Borrower shall have the right, subject to the provisions
of Section 2.8, (i) on three Business Days' prior
irrevocable notice by the Borrower to the Administrative
Agent, to continue or convert any type of Loans as or into
LIBO Rate Loans, or (ii) with irrevocable notice by the
Borrower to the Administrative Agent by 10:30 a.m. on the
date of such proposed continuation or conversion, to
continue or convert any type of Loans as or into Reference
Rate Loans, in each case subject to the following further
conditions:
(a) each continuation or conversion shall be made pro
rata as to each type of Loan to be continued or converted
among the Banks in accordance with the respective amounts
of their commitments and the notice given to the
Administrative Agent by the Borrower shall specify the
aggregate principal amount of Loans to be continued or
converted;
(b) in the case of a continuation or conversion of less
than all Loans, the Loans continued or converted shall be
in a minimum aggregate principal amount of $3,000,000 and
an integral multiple of $1,000,000;
(c) accrued interest on each Loan (or portion thereof)
being continued or converted shall be paid by the Borrower
at the time of continuation or conversion;
(d) the Interest Period with respect to any Loan made
in respect of a continuation or conversion thereof shall
commence on the date of the continuation or conversion;
(e) any portion of a Loan maturing or required to be
prepaid in less than one month may not be continued as or
converted into a LIBO Rate Loan;
(f) a LIBO Rate Loan may be continued or converted on
the last day of the applicable Interest Period and,
subject to Section 2.13, on any other day;
(g) no Loan (or portion thereof) may be continued as or
converted into a LIBO Rate Loan if, after such
continuation or conversion, an aggregate of more than 8
separate LIBO Rate Loans of any Bank would result,
determined as set forth in Section 2.3(c);
(h) no Loan shall be continued or converted if such
Loan by any Bank would be greater than the amount by which
its Commitment exceeds the amount of its other Loans at
the time outstanding or if such Loan would not comply with
the other provisions of this Agreement; and
(i) any portion of a LIBO Rate Loan which cannot be
converted into or continued as a LIBO Rate Loan by reason
of clause (e) or (g) above shall be automatically
converted at the end of the Interest Period in effect for
such Loan into a Reference Rate Loan.
The Administrative Agent shall communicate the information
contained in each irrevocable notice delivered by the
Borrower pursuant to this Section 2.10 to the other Banks
promptly after its receipt of the same.
The Interest Period applicable to any LIBO Rate Loan
resulting from a continuation or conversion shall be
specified by the Borrower in the irrevocable notice of
continuation or conversion delivered pursuant to this
Section 2.10; provided, however, that if no such Interest
Period for a LIBO Rate Loan shall be specified, the Borrower
shall be deemed to have selected an Interest Period of one
month's duration.
For purposes of this Section 2.10, notice received by
the Administrative Agent from the Borrower after 10:30 a.m.,
New York time, on a Business Day shall be deemed to be
received on the immediately succeeding Business Day.
SECTION 2.11. Reserve Requirements; Change in
Circumstances. (a) The Borrower shall pay to each Bank on
the last day of each Interest Period for any LIBO Rate Loan
so long as such Bank may be required to maintain reserves
against Eurocurrency Liabilities as defined in Regulation D
of the Board (or so long as such Bank may be required to
maintain reserves against any other category of liabilities
which includes deposits by reference to which the interest
rate on any LIBO Rate Loan is determined as provided in this
Agreement or against any category of extensions of credit or
other assets of such Bank which includes any LIBO Rate Loan)
an additional amount (determined by such Bank and notified
to the Borrower), equal to the product of the following for
each affected LIBO Rate Loan for each day during such
Interest Period:
(i) the principal amount of such affected LIBO Rate
Loan outstanding on such day; and
(ii) the remainder of (x) the product of Statutory
Reserves on such date times the Applicable LIBO Rate on
such day minus (y) the Applicable LIBO Rate on such day;
and
(iii) 1/360.
Each Bank shall separately bill the Borrower directly for
all amounts claimed pursuant to this Section 2.11(a).
(b) Notwithstanding any other provision herein, if
after the Closing Date any change in condition or applicable
law or regulation or in the interpretation or administration
thereof (whether or not having the force of law and
including, without limitation, Regulation D of the Board) by
any Governmental Authority charged with the administration
or interpretation thereof shall occur which shall:
(i) subject any Bank (which shall for the purpose of
this Section include any assignee or lending office of any
Bank) to any tax of any kind whatsoever with respect to
its LIBO Rate Loans or other fees or amounts payable
hereunder or change the basis of taxation of any of the
foregoing (other than taxes (including Non-Excluded Taxes)
described in Section 2.17 and other than any franchise tax
or tax or other similar governmental charges, fees or
assessments based on the overall net income of such Bank
by the U.S. Federal government or by any jurisdiction in
which such Bank maintains an office, unless the presence
of such office is solely attributable to the enforcement
of any rights hereunder or under any Security Agreement
with respect to an Event of Default);
(ii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of,
deposits with or for the account of or credit extended by
any Bank;
(iii) impose on any such Bank or the London Interbank
Market any other condition affecting this Agreement or
LIBO Rate Loans made by such Bank; or
(iv) impose upon any Bank any other condition with
respect to any amount paid or to be paid by any Bank with
respect to its LIBO Rate Loans or this Agreement;
and the result of any of the foregoing shall be to increase
the cost to any Bank of making or maintaining its LIBO Rate
Loans or Commitment hereunder, or to reduce the amount of
any sum (whether of principal, interest or otherwise)
received or receivable by such Bank or to require such Bank
to make any payment, in respect of any such Loan, in each
case by or in an amount which such Bank in its sole judgment
shall deem material, then the Borrower shall pay to such
Bank on demand such an amount or amounts as will compensate
the Bank for such additional cost, reduction or payment.
(c) If any Bank shall have determined that the
applicability of any law, rule, regulation, agreement or
guideline adopted after the Closing Date regarding capital
adequacy, or any change after the Closing Date in any such
law, rule, regulation, agreement or guideline (whether such
law, rule, regulation, agreement or guideline has been
adopted) or in the interpretation or administration of any
of the foregoing by any Governmental Authority charged with
the interpretation or administration thereof, or compliance
by any Bank (or any lending office of such Bank) or any
Bank's holding company with any request or directive
regarding capital adequacy (whether or not having the force
of law) of any such Governmental Authority made or issued
after the Closing Date, has or would have the effect of
reducing the rate of return on such Bank's capital or on the
capital of such Bank's holding company, if any, as a
consequence of this Agreement or the Loans made pursuant
hereto to a level below that which such Bank or such Bank's
holding company could have achieved but for such
applicability, adoption, change or compliance (taking into
consideration such Bank's policies and the policies of such
Bank's holding company with respect to capital adequacy) by
an amount deemed by such Bank to be material, then from time
to time the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such
Bank's holding company for any such reduction suffered.
(d) If and on each occasion that a Bank makes a demand
for compensation pursuant to paragraph (a), (b) or (c)
above, or under Section 2.17 (it being understood that a
Bank may be reimbursed for any specific amount under only
one such paragraph or Section) the Borrower may, upon at
least three Business Days' prior irrevocable written or
telex notice to each of such Bank and the Administrative
Agent, in whole permanently replace the Commitment of such
Bank; provided that such notice must be given not later than
the 90th day following the date of a demand for compensation
made by such Bank; and provided that the Borrower shall
replace such Commitment with the Commitment of a commercial
bank satisfactory to the Administrative Agent. Such notice
from the Borrower shall specify an effective date for the
termination of such Bank's Commitment which date shall not
be later than the 180th day after the date such notice is
given. On the effective date of any termination of such
Bank's Commitment pursuant to this clause (d), the Borrower
shall pay to the Administrative Agent for the account of
such Bank (A) any Commitment Fees on the amount of such
Bank's Commitment so terminated accrued to the date of such
termination, (B) the principal amount of any outstanding
Loans held by such Bank plus accrued interest on such
principal amount to the date of such termination and (C) the
amount or amounts requested by such Bank pursuant to
clause (a), (b) or (c) above or Section 2.17, as applicable.
The Borrower will remain liable to such terminated Bank for
any loss or expense that such Bank may sustain or incur as a
consequence of such Bank's making any LIBO Rate Loan or any
part thereof or the accrual of any interest on any such Loan
in accordance with the provisions of this Section 2.11(d) as
set forth in Section 2.13. Upon the effective date of
termination of any Bank's Commitment pursuant to this
Section 2.11(d) such Bank shall cease to be a "Bank"
hereunder; provided that no such termination of any such
Bank's Commitment shall affect (i) any liability or
obligation of the Borrower or any other Bank to such
terminated Bank which accrued on or prior to the date of
such termination or (ii) such terminated Bank's rights
hereunder in respect of any such liability or obligation.
(e) A certificate of a Bank (or Transferee) setting
forth such amount or amounts as shall be necessary to
compensate such Bank (or Transferee) as specified in
paragraph (a), (b) or (c) (and in the case of paragraph (c),
such Bank's holding company) above or Section 2.17, as the
case may be, shall be delivered as soon as practicable to
the Borrower, and in any event within 90 days of the change
giving rise to such amount or amounts, and shall be
conclusive absent manifest error. The Borrower shall pay
each Bank the amount shown as due on any such certificate
within 15 days after its receipt of the same. In preparing
such a certificate, each Bank may employ such assumptions
and allocations of costs and expenses as it shall in good
faith deem reasonable. The failure of any Bank (or
Transferee) to give the required 90 day notice shall excuse
the Borrower from their obligations to pay additional
amounts pursuant to such Sections incurred for the period
that is 90 days or more prior to the date such notice was
required to be given.
(f) Failure on the part of any Bank to demand
compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital
within the 90 days required pursuant to Section 2.11(e)
shall not constitute a waiver of such Bank's rights to
demand compensation for any increased costs or reduction in
amounts received or receivable or reduction in return on
capital for any period after the date that is 90 days prior
to the date of the delivery of demand for compensation. The
protection of this Section 2.11 shall be available to each
Bank regardless of any possible contention of invalidity or
inapplicability of the law, regulation or condition which
shall have occurred or been imposed. The Borrower shall not
be required to make any additional payment to any Bank
pursuant to Section 2.11(a) or (b) in respect of any such
cost, reduction or payment that could be avoided by such
Bank in the exercise of reasonable diligence, including a
change in the lending office of such Bank if possible
without material cost to such Bank. Each Bank agrees that
it will promptly notify the Borrower and the Administrative
Agent of any event of which the responsible account officer
shall have knowledge which would entitle such Bank to any
additional payment pursuant to this Section 2.11. The
Borrower agree to furnish promptly to the Administrative
Agent official receipts evidencing any payment of any tax.
SECTION 2.12. Change in Legality. (a) Notwith-
standing anything to the contrary herein contained, if after
the Closing Date any change in any law or regulation or in
the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof
shall make it unlawful for any Bank to make or maintain any
LIBO Rate Loan or to give effect to its obligations as
contemplated hereby with respect to any LIBO Rate Loan,
then, by written notice to the Borrower and to the
Administrative Agent, such Bank may:
(i) declare that LIBO Rate Loans will not thereafter
(for the duration of such unlawfulness or impracticality)
be made by such Bank hereunder, whereupon the Borrower
shall be prohibited from requesting LIBO Rate Loans from
such Bank hereunder unless such declaration is
subsequently withdrawn; and
(ii) require that all outstanding LIBO Rate Loans made
by it be converted to Reference Rate Loans, in which event
(A) all such LIBO Rate Loans shall be automatically
converted to Reference Rate Loans as of the end of the
applicable Interest Period, unless an earlier conversion
date is legally required, (B) all payments and prepayments
of principal which would otherwise have been applied to
repay the converted LIBO Rate Loans shall instead be
applied to repay the Reference Rate Loans resulting from
the conversion of such LIBO Rate Loans and (C) the
Reference Rate Loans resulting from the conversion of such
LIBO Rate Loans shall be prepayable only at the times the
converted LIBO Rate Loans would have been prepayable,
notwithstanding the provisions of Section 2.9.
(b) Before giving any notice to the Borrower and the
Administrative Agent pursuant to this Section 2.12, such
Bank shall designate a different LIBOR Office if such
designation will avoid the need for giving such notice and
will not in the judgment of such Bank, be otherwise
disadvantageous to such Bank. For purposes ofSection 2.12(a),
a notice to the Borrower by any Bank shall
be effective on the date of receipt by the Borrower.
SECTION 2.13. Indemnity. The Borrower shall indemnify
each Bank against any funding, redeployment or similar loss
or expense which such Bank may sustain or incur as a
consequence of (a) any event, other than a default by such
Bank in the performance of its obligations hereunder, which
results in (i) such Bank receiving or being deemed to
receive any amount on account of the principal of any LIBO
Rate Loan prior to the end of the Interest Period in effect
therefor (any of the events referred to in this clause (i)
being called a "Breakage Event") or (ii) any Loan to be made
by such Bank not being made after notice of such Loan shall
have been given by the Borrower hereunder or (b) any default
in the making of any payment or prepayment of any amount
required to be made hereunder. In the case of any Breakage
Event, such loss shall include an amount equal to the
excess, as reasonably determined by such Bank, of (i) its
cost of obtaining funds for the Loan which is the subject of
such Breakage Event for the period from the date of such
Breakage Event to the last day of the Interest Period in
effect (or which would have been in effect) for such Loan
over (ii) the amount of interest (as reasonably determined
by such Bank) that would be realized by such Bank in
reemploying the funds so paid, prepaid or converted or not
borrowed, continued or converted by making a LIBO Rate Loan
in such principal amount and with a maturity comparable to
such period. A certificate of any Bank setting forth any
amount or amounts which such Bank is entitled to receive
pursuant to this Section shall be delivered to the Borrower
and shall be conclusive absent manifest error.
SECTION 2.14. Pro Rata Treatment. Except as permitted
under any of Sections 2.8(b), 2.11, 2.12, 2.13 or 2.17, each
borrowing under each type of Loan, each payment or
prepayment of principal of the Loans, each payment of
interest on the Loans, each other reduction of the principal
or interest outstanding under the Loans, however achieved,
including by setoff by any Person, each payment of the
Commitment Fees, each reduction of the Commitments and each
conversion or continuation of Loans shall be allocated pro
rata among the Banks in the proportions that their
respective Commitments bear to the Total Commitment (or, if
such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their
outstanding Loans). Each Bank agrees that in computing such
Bank's portion of any borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each
Bank's percentage of such borrowing to the next higher or
lower whole Dollar amount.
SECTION 2.15. Sharing of Setoffs. Each Bank agrees
that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim against the Borrower
or pursuant to a secured claim under Section 506 of Title 11
of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by
such Bank under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means obtain
payment (voluntary or involuntary) in respect of any Loan
held by it as a result of which the unpaid principal portion
of the Loans held by it shall be proportionately less than
the unpaid principal portion of the Loans held by any other
Bank (other than as permitted under any of Sections 2.8(b),
2.11, 2.12, 2.13 or 2.17), it shall be deemed to have
simultaneously purchased from such other Bank at face value,
and shall promptly pay to such other Bank the purchase price
for, a participation in the Loans held by such other Bank,
so that the aggregate unpaid principal amount of the Loans
and participation in Loans held by each Bank shall be in the
same proportion to the aggregate unpaid principal amount of
all Loans of the Borrower then outstanding as the principal
amount of the Loans held by it prior to such exercise of
banker's lien, setoff or counterclaim was to the principal
amount of all Loans of the Borrower outstanding prior to
such exercise of banker's lien, setoff or counterclaim or
other event; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this
Section 2.15 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment
restored without interest. To the fullest extent permitted
by applicable law, the Borrower expressly consents to the
foregoing arrangements and agrees that any Bank holding a
participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the
Borrower hereunder to such Bank as fully as if such Bank had
made a Loan directly to the Borrower in the amount of such
participation.
SECTION 2.16. Payments. (a) Except as otherwise
provided in this Agreement, all payments and prepayments to
be made by the Borrower to the Banks hereunder, whether on
account of Commitment Fees, payment of principal or interest
on the Promissory Notes or other amounts at any time owing
hereunder or under any other Loan Document, shall be made to
the Administrative Agent at its office at 270 Park Avenue,
New York, New York, for the account of the several Banks in
immediately available funds. All such payments shall be
made to the Administrative Agent as aforesaid not later than
10:30 a.m., New York City time, on the date due; and funds
received after that hour shall be deemed to have been
received by the Administrative Agent on the following
Business Day.
(b) As promptly as possible, but no later than
2:00 p.m., New York City time, on the date of each
borrowing, each Bank participating in the Loans made on such
date shall pay to the Administrative Agent such Bank's
Applicable Percentage of such Loan plus, if such payment is
received by the Administrative Agent after 2:00 p.m., New
York City time, on the date of such borrowing, interest at a
rate per annum equal to the rate in effect on such day,
quoted by the Administrative Agent at its office at 270 Park
Avenue, New York, New York, for the overnight "sale" to such
Bank of Federal funds. At the time of, and by virtue of,
such payment, such Bank shall be deemed to have made its
Loan in the amount of such payment. The Administrative
Agent agrees to pay any moneys, including such interest, so
paid to it by the lending Banks promptly, but no later than
3:00 p.m., New York City time, on the date of such
borrowing, to the Borrower in immediately available funds.
(c) If any payment of principal, interest, Commitment
Fee or any other amount payable to the Banks hereunder or
under any Promissory Note shall fall due on a day that is
not a Business Day, then (except in the case of payments of
principal of or interest on LIBO Rate Loans, in which case
such payment shall be made on the next preceding Business
Day if the next succeeding Business Day would fall in the
next calendar month) such due date shall be extended to the
next succeeding Business Day, and interest shall be payable
on principal in respect of such extension.
(d) Unless the Administrative Agent shall have been
notified by the Borrower prior to the date on which any
payment or prepayment is due hereunder (which notice shall
be effective upon receipt) that the Borrower does not intend
to make such payment or prepayment, the Administrative Agent
may assume that the Borrower has made such payment or
prepayment when due and the Administrative Agent may in
reliance upon such assumption (but shall not be required to)
make available to each Bank on such date an amount equal to
the portion of such assumed payment or prepayment such Bank
is entitled to hereunder, and, if the Borrower has not in
fact made such payment or prepayment to the Administrative
Agent, such Bank shall, on demand, repay to the
Administrative Agent the amount made available to such Bank,
together with interest thereon in respect of each day during
the period commencing on the date such amount was made
available to such Bank and ending on (but excluding) the
date such Bank repays such amount to the Administrative
Agent, at a rate per annum equal to the rate, determined by
the Administrative Agent to represent its cost of overnight
or short-term funds (which determination shall be conclusive
absent manifest error).
(e) All payments of the principal of or interest on
the Loans or any other amounts to be paid to any Bank or the
Administrative Agent under this Agreement or any of the
other Loan Documents shall be made in Dollars, without
reduction by reason of any currency exchange expense.
SECTION 2.17. U.S. Taxes. (a) Any and all payments
by the Borrower hereunder shall be made, in accordance with
Section 2.16, free and clear of and without deduction for
any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities
with respect thereto imposed by the United States or any
political subdivision thereof, excluding taxes imposed on
the net income of the Administrative Agent or any Bank (or
Transferee) and franchise taxes of the Administrative Agent
or any Bank (or Transferee), as applicable, as a result of a
connection between the jurisdiction imposing such taxes and
the Administrative Agent or such Bank (or Transferee), as
applicable, other than a connection arising solely from the
Administrative Agent or such Bank (or Transferee), as
applicable, having executed, delivered, performed its
obligations or received a payment under, or enforced, this
Agreement (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Non-Excluded Taxes"). If the
Borrower shall be required by law to deduct any Non-Excluded
Taxes from or in respect of any sum payable hereunder to the
Banks (or any Transferee) or the Administrative Agent,
(i) the sum payable shall be increased by the amount
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 2.17) such Bank (or Transferee) or the
Administrative Agent (as the case may be) shall receive an
amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law;
provided, however, that no Transferee of any Bank shall be
entitled to receive any greater payment under this
Section 2.17 than such Bank would have been entitled to
receive with respect to the rights assigned, participated or
otherwise transferred unless such assignment, participation
or transfer shall have been made at a time when the
circumstances giving rise to such greater payment did not
exist.
(b) In addition, the Borrower agrees to bear and to
pay to the relevant Governmental Authority in accordance
with applicable law any current or future stamp or
documentary taxes or any other similar excise taxes, charges
or similar levies that arise from any payment made hereunder
or from the execution, delivery, registration or enforcement
of, or otherwise with respect to, this Agreement or any
other Loan Document and any property taxes that arise from
the enforcement of this Agreement or any other Loan Document
("Other Taxes").
(c) The Borrower will indemnify each Bank (or
Transferee) and each Agent for the full amount of Non-
Excluded Taxes and Other Taxes (including Non-Excluded Taxes
or Other Taxes imposed on amounts payable under this
Section 2.17) paid by such Bank (or Transferee) or such
Agent, as the case may be, and any liability (including
penalties, interest and expenses (including reasonable
attorney's fees and expenses)) arising therefrom or with
respect thereto. A certificate as to the amount of such
payment or liability prepared by a Bank or Agent, or the
Administrative Agent on behalf of such Bank or Agent, absent
manifest error, shall be final, conclusive and binding for
all purposes. Such indemnification shall be made within
30 days after the date the Bank (or Transferee) or the
Agent, as the case may be, makes written demand therefor.
(d) Within 30 days after the date of any payment of
Non-Excluded Taxes or Other Taxes by the Borrower to the
relevant Governmental Authority, the Borrower will furnish
to the Administrative Agent, at its address referred to on
the signature page, the original or a certified copy of a
receipt issued by such Governmental Authority evidencing
payment thereof.
(e) At the time it becomes a party to this Agreement
or a Transferee, each Bank (or Transferee) that is organized
under the laws of a jurisdiction outside the United States
shall (in the case of a Transferee, subject to the
immediately succeeding sentence) deliver to the Borrower
either a valid and currently effective Internal Revenue
Service Form 1001 or Form 4224 or, in the case of a Bank (or
Transferee) claiming exemption from U.S. Federal withholding
tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any
subsequent version thereof or successors thereto, (and if
such Bank (or Transferee) delivers a Form W-8, a certificate
representing that such Bank (or Transferee) is not a bank
for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not
a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)),
properly completed and duly executed by such Bank (or
Transferee) establishing that such payment is (i) not
subject to United States Federal withholding tax under the
Code because such payment is effectively connected with the
conduct by such Bank (or Transferee) of a trade or business
in the United States or (ii) totally exempt from (or in case
of a Transferee, entitled to a reduced rate of) United
States Federal withholding tax. Notwithstanding any other
provision of this Section 2.17(e), no Transferee shall be
required to deliver any form pursuant to this
Section 2.17(e) that such Transferee is not legally able to
deliver. In addition, each Bank (or Transferee) shall
deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered, but only, in
such case, to the extent such Bank (or Transferee) is
legally able to do so.
(f) Notwithstanding anything to the contrary contained
in this Section 2.17, the Borrower shall not be required to
pay any additional amounts to any Bank (or Transferee) in
respect of United States Federal withholding tax pursuant to
paragraph (a) above if the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank
(or Transferee) to comply with the provisions of
paragraph (e) above.
(g) Any Bank (or Transferee) claiming any additional
amounts payable pursuant to this Section 2.17 shall use
reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested
by the Borrower or to change the jurisdiction of its
applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any
such additional amounts which may thereafter accrue and
would not, in the sole determination of such Bank, be
otherwise disadvantageous to such Bank (or Transferee).
(h) Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations
contained in this Section 2.17 shall survive the payment in
full of the principal of and interest on all Loans made
hereunder.
(i) Nothing contained in this Section 2.17 shall
require any Bank (or Transferee) or the Administrative Agent
to make available any of its income tax returns (or any
other information that it deems to be confidential or
proprietary).
SECTION 2.18. FTX or Restricted Subsidiary as Limited
Partner. Notwithstanding anything to the contrary contained
in this Agreement or any Promissory Note, with respect to
any direct liabilities of the Borrower to the Banks under
this Agreement, its Promissory Notes or the other Loan
Documents, FTX and any Restricted Subsidiary solely in its
capacity as a partner of the Borrower shall be deemed to be
limited, rather than general, partners of the Borrower.
Subject to the foregoing, the Partnership Obligations shall
be fully recourse to the Borrower and all its assets and
properties. Nothing in this Section 2.18 shall be deemed in
any way to derogate from or affect FTX's own direct
obligations under this Agreement (including Section 7.1),
the FTX Guaranty or the other Loan Documents.
ARTICLE III
Representations and Warranties
SECTION 3.1. Representations and Warranties of the
Partnership. As of the Funding Date, and each other date
upon which such representations and warranties are required
to be made or deemed made pursuant to Section 4.2(i), the
Partnership represents and warrants to each of the Banks as
follows:
(a) Organization, Powers. The Partnership is duly
organized, validly existing and in good standing under the
laws of the State of Delaware, has the requisite power and
authority to own its property and assets and to carry on
its business as now conducted and is qualified to do
business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not
have a material adverse effect on the condition, financial
or otherwise, of the Partnership. The Partnership has the
power to execute, deliver and perform its obligations
under this Agreement and any other Loan Documents executed
and delivered or to be executed and delivered by the Part-
nership at any time, to borrow hereunder, to execute and
deliver the Promissory Notes to be delivered by it and to
countersign and accept the terms of the FM Intercreditor
Agreement.
(b) Authorization. The execution, delivery and
performance of this Agreement, any other Loan Documents
executed and delivered or to be executed and delivered by
the Partnership at any time, the Borrowings hereunder, the
execution and delivery of the Promissory Notes to be
delivered by it and the countersignature and the
acceptance of the terms of the FM Intercreditor Agreement
(i) have been duly authorized by all requisite partnership
and, if required, partner action on the part of the
Partnership and all requisite corporate, and, if required,
shareholder, action on the part of FTX and the Company and
(ii) will not (A) violate (x) any provision of law,
statute, rule or regulation or the constitutive documents
(including, without limitation, the Partnership Agreement
(as it may be amended and in effect from time to time) or
regulations of the Partnership, FTX or the Company,
(y) any order of any court, or any rule, regulation or
order of any other agency of government binding upon the
Partnership, FTX or the Company or any of their assets or
(z) any provisions of any indenture, agreement or other
instrument to which the Partnership, FTX or the Company is
a party, or by which the Partnership, FTX or the Company
or any of their properties or assets are or may be bound,
(B) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both)
a default under any indenture, agreement or other
instrument referred to in (ii)(A)(z) above or (C) result
in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any property or
assets of the Partnership, FTX or the Company, except for
the Mortgages and the FTX Security Agreement.
(c) Governmental Approval. No registration with or
consent or approval of, or other action by, any Federal,
state or other governmental agency, authority or
regulatory body is or will be required in connection with
the execution, delivery and performance of this Agreement
or any other Loan Document, the execution and delivery of
the Promissory Notes or the Borrowings hereunder, except
(i) such as have been made and obtained and are in full
force and effect and (ii) such security filings and
recordations as may be required in connection with the
grant of any Lien contemplated by the Mortgages.
(d) Enforceability. Each of this Agreement and the
other Loan Documents executed and delivered by the
Partnership constitutes (or, as to any Loan Document
contemplated hereby to be executed and delivered by the
Partnership at any future date, will constitute) a legal,
valid and binding obligation of the Partnership, in each
case enforceable in accordance with its terms (subject, as
to the enforcement of remedies against the Partnership, to
applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting creditors' rights
against the Partnership generally in connection with the
bankruptcy, reorganization or insolvency of the
Partnership or a moratorium or similar event relating to
the Partnership).
(e) Financial Statements. FTX has heretofore
furnished to each of the Banks consolidated balance sheets
and statements of operations and changes in retained
earnings and cash flow of the Company as of and for the
fiscal years ended December 31, 1993 and 1994, all audited
and certified by Arthur Andersen LLP, independent public
accountants, and included in the 1994 FM Form 10-K, and
unaudited consolidated balance sheets and statements of
operations and cash flow of the Company as of and for the
fiscal quarter ended March 31, 1995, included in the
Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995. In addition, the Partnership has
heretofore furnished to each of the Banks unaudited
consolidated balance sheets and statements of operations
and cash flow for the Partnership as of and for the fiscal
years ended December 31, 1993 and 1994, and for the fiscal
quarter ended March 31, 1995, all certified by the
Treasurer or another authorized Financial Officer of the
Partnership. All such balance sheets and statements of
operations and cash flow present fairly the financial
condition and results of operations of the Company, the
Partnership and their subsidiaries, as of the dates and
for the periods indicated. The financial statements
referred to in this Section 4.1(e) and the notes thereto
disclose all material liabilities, direct or contingent,
of the Company, the Partnership and their subsidiaries, as
of the dates thereof and which are required to be shown on
financial statements prepared in accordance with GAAP.
The financial statements referred to in this Section
4.1(e) have been prepared in accordance with GAAP. There
has been no material adverse change since December 31,
1994, in the businesses, assets, operations, prospects or
condition, financial or otherwise, of (i) the Company,
(ii) the Partnership, (iii) the Company and its
subsidiaries taken as a whole or (iv) the Partnership and
the Subsidiaries taken as a whole.
(f) Litigation; Compliance with Laws, etc.
(i) Except as disclosed in Schedule VI hereto or in the
1994 FM Form 10-K and any subsequent reports filed as of
20 days prior to the date hereof with the SEC on Form 10-Q
or Form 8-K which have been delivered to the Banks, there
are no actions, suits or proceedings at law or in equity
or by or before any governmental instrumentality or other
agency or regulatory authority now pending or, to the
knowledge of the Partnership, threatened against or
affecting the Partnership or any Subsidiary or the
businesses, assets or rights of the Partnership or any
Subsidiary (i) which involve this Agreement, any other
Loan Document or any of the transactions contemplated
hereby or thereby or (ii) as to which there is a rea-
sonable possibility of an adverse determination and which,
if adversely determined, could, individually or in the
aggregate, materially impair the ability of the
Partnership to conduct its business substantially as
described in the 1994 FM Form 10-K, or materially and
adversely affect the business, assets, operations,
prospects or condition, financial or otherwise, of the
Partnership, or impair the validity or enforceability of,
or the ability of the Partnership to perform its
obligations under, this Agreement or any other Loan
Document.
(ii) Neither the Partnership nor any Subsidiary is in
violation of any law, or in default with respect to any
judgment, writ, injunction, decree, rule or regulation of
any court or governmental agency or instrumentality, where
such violation or default could have a Material Adverse
Effect on the business, assets, operations or condition,
financial or otherwise, of the Partnership. Without
limitation of the foregoing, the Partnership and each
Subsidiary has complied with all Environmental Laws where
any such noncompliance could have a Material Adverse
Effect on the business, assets, operations or condition,
financial or otherwise, of the Partnership. Neither the
Partnership nor any Subsidiary has received notice of any
material failure so to comply. The Partnership's and the
Subsidiaries' plants do not handle any Hazardous Materials
in violation of any Environmental Law where any such
violation could have a Material Adverse Effect on the
business, assets, operations or condition, financial or
otherwise, of the Partnership. The Partnership and FTX
are aware of no events, conditions or circumstances
involving contaminants or employee health or safety that
could reasonably be expected to result in material
liability on the part of the Partnership or any
Subsidiary.
(g) Title, etc. The Partnership has good and
defensible title to its material properties, assets and
revenues (exclusive of oil, gas and other mineral
properties on which no development or production
activities following discovery of commercially exploitable
reserves are being conducted), free and clear of all Liens
except such as are permitted by Section 4.2(d) and except
for covenants, restrictions, rights, easements and minor
irregularities in title which do not individually or in
the aggregate interfere with the occupation, use and
enjoyment by the Partnership or the respective Subsidiary
of such properties and assets in the normal course of
business as presently conducted or materially impair the
value thereof for use in such business.
(h) Federal Reserve Regulations; Use of Proceeds.
(i) Neither the Partnership nor any Subsidiary is engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing
or carrying Margin Stock.
(ii) No part of the proceeds of the Loans will be
used, whether directly or indirectly, and whether imme-
diately, incidentally or ultimately, for any purpose which
entails a violation of, or which is inconsistent with, the
provisions of the Regulations of the Board, including,
without limitation, Regulations G, U or X thereof.
(iii) The Partnership will use the proceeds of all
Loans made to it to refinance existing outstandings under
the Existing FM Credit Agreement and to finance general
partnership purposes of the Partnership and the
Subsidiaries, subject to and in accordance with operating
budgets to be reviewed and approved by the Required Banks.
(i) Taxes. The Partnership and the Subsidiaries have
filed or caused to be filed all Federal, state and local
tax and information returns which are required to be filed
by them, and have paid or caused to be paid all taxes
shown to be due and payable on such returns or on any
assessments received by any of them, other than any taxes
or assessments the validity of which the Partnership or
any Subsidiary is contesting in good faith by appropriate
proceedings, and with respect to which the Partnership or
such Subsidiary shall, to the extent required by GAAP,
have set aside on its books adequate reserves.
(j) Employee Benefit Plans. Each of the Borrower and
its ERISA Affiliates is in compliance in all material
respects with the applicable provisions of ERISA and the
Code and the regulations and published interpretations
thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other
such ERISA Events, could materially and adversely affect
the financial condition and operations of the Borrower and
the ERISA Affiliates, taken as a whole. The present value
of all benefit liabilities under each Plan, determined on
a plan termination basis (based on those assumptions used
for financial disclosure purposes in accordance with
Statement of Financial Accounting Standards No. 87 of the
Financial Accounting Standards Board ("SFAS 87") did not,
as of the last annual valuation date applicable thereto,
exceed by more than $5,000,000 the value of the assets of
such Plan, and the present value of all benefit
liabilities of all underfunded Plans, determined on a plan
termination basis (based on those assumptions used for
financial disclosure purposes in accordance with SFAS 87)
did not, as of the last annual valuation dates applicable
thereto, exceed by more than $5,000,000 the value of the
assets of all such underfunded Plans.
(k) Environmental Matters. (1) The properties owned
or operated by the Borrower and the Subsidiaries (the
"Properties") and all operations of the Borrower and the
Subsidiaries are in compliance, and in the last three
years have been in compliance, with all Environmental Laws
and all necessary Environmental Permits have been obtained
and are in effect, except to the extent that such non-
compliance or failure to obtain any necessary permits, in
the aggregate, could not reasonably be expected to result
in a Material Adverse Effect;
(2) there have been no Releases or threatened Releases
at, from, under or proximate to the Properties or
otherwise in connection with the operations of the
Borrower or the Subsidiaries, which Releases or threatened
Releases, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect;
(3) neither the Borrower nor any of the Subsidiaries
has received any notice of an Environmental Claim in
connection with the Properties or the operations of the
Borrower or the Subsidiaries or with regard to any Person
whose liabilities for environmental matters the Borrower
or the Subsidiaries has retained or assumed, in whole or
in part, contractually, by operation of law or otherwise,
which, in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, nor do the Borrower
or the Subsidiaries have reason to believe that any such
notice will be received or is being threatened; and
(4) Hazardous Materials have not been transported from
the Properties, nor have Hazardous Materials been
generated, treated, stored or disposed of at, on or under
any of the Properties in a manner that could give rise to
liability under any Environmental Law, nor have the
Borrower or the Subsidiaries retained or assumed any
liability, contractually, by operation of law or
otherwise, with respect to the generation, treatment,
storage or disposal of Hazardous Materials, which
transportation, generation, treatment, storage or
disposal, or retained or assumed liabilities, in the
aggregate, could reasonably be expected to result in a
Material Adverse Effect.
(5) The Partnership and the Subsidiaries do not have
any ownership or control rights in respect of the
properties listed on Schedule IV which could result in any
environmental or reclamation liability for the Partnership
and the Subsidiaries relating to such properties.
(l) Investment Company Act. Neither the Partnership
nor any Subsidiary is an "investment company" as defined
in, or subject to regulation under, the Investment Company
Act of 1940.
(m) Public Utility Holding Company Act. Neither the
Partnership nor any Subsidiary is a "holding company", or
a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(n) Subsidiaries. Schedule V constitutes a complete
and correct list as of the Closing Date or the date of any
update thereof required by Section 4.1(a)(12) of all the
Subsidiaries with at least $1,000,000 in total assets,
indicating the jurisdiction of incorporation or
organization of each such Subsidiary and the percentage of
voting shares or units owned on such date directly or
indirectly by the Partnership in each such Subsidiary.
The Partnership owns as of such date, free and clear of
all Liens (other than those expressly permitted by this
Agreement), the percentage of voting shares or units
outstanding of the Subsidiaries shown on Schedule V, and
all such shares or units are validly issued and fully
paid.
(o) Solvency. (i) The fair salable value of the
assets of the Partnership and the Subsidiaries will exceed
the amount that will be required to be paid on or in
respect of the Indebtedness and other obligations of the
Partnership and the Subsidiaries as they become absolute
and mature.
(ii) The Partnership and the Subsidiaries will not
have unreasonably small capital to carry out their
businesses as conducted or as proposed to be conducted.
(iii) The Partnership, on a consolidated basis, does
not intend to, and does not believe that it will, incur
Indebtedness and other obligations beyond its ability to
pay such Indebtedness and obligations as they mature
(taking into account the timing and amounts of cash to be
received by it and the amounts to be payable on or in
respect of such Indebtedness and obligations).
(p) Key Assets. Schedule III sets forth properties of
the Partnership constituting the Key Assets.
(q) No Material Misstatements. No information, report
(including any exhibit, schedule or other attachment
thereto or other document delivered in connection
therewith), financial statement, exhibit or schedule
prepared or furnished by the Borrower or the Subsidiaries
to the Administrative Agent or any Bank in connection with
this Agreement or any of the other Loan Documents or
included therein contained or contains any material
misstatement of fact or omitted or omits to state any
material fact necessary to make the statements therein, in
the light of the circumstances under which they were made,
not misleading.
SECTION 3.2. Representations and Warranties of FTX.
As of the Funding Date, and each other date upon which such
representations and warranties are required to be made or
deemed made pursuant to Section 4.2(i), FTX represents and
warrants to each of the Banks as follows:
(a) Organization, Powers. FTX is duly organized,
validly existing and in good standing under the laws of
the State of Delaware, has the requisite power and
authority to own its property and assets and to carry on
its business as now conducted and is qualified to do
business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not
have a material adverse effect on the condition, financial
or otherwise, of FTX. FTX has the power to execute,
deliver and perform its obligations under this Agreement,
the FM Intercreditor Agreement, the FTX Guaranty, the FTX
Security Agreement and any other Loan Document executed
and delivered or to be executed and delivered by it at any
time, to guarantee the Loans pursuant to the FTX Guaranty
and to countersign and accept the terms of the FTX
Intercreditor Agreement.
(b) Authorization. The execution, delivery and
performance of this Agreement (including, without limi-
tation, performance of obligations set forth in Sec-
tion 7.1), the FM Intercreditor Agreement, the FTX
Guaranty, the FTX Security Agreement and any other Loan
Documents executed and delivered or to be executed and
delivered by FTX at any time, the guarantee of the Loans
pursuant to the FTX Guaranty and the countersignature and
acceptance of the terms of the FTX Intercreditor Agreement
(i) have been duly authorized by all requisite corporate
and, if required, shareholder, action on the part of FTX
and (ii) will not (A) violate (x) any provision of law,
statute, rule or regulation or the certificate or articles
of incorporation or other constitutive documents or the
By-laws or regulations of FTX, (y) any order of any court,
or any rule, regulation or order of any other agency of
government binding upon FTX or (z) any provisions of any
indenture, agreement or other instrument to which FTX is a
party, or by which FTX or any of its properties or assets
are or may be bound, (B) be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of
time or both) a default under any indenture, agreement or
other instrument referred to in (ii)(A)(z) above or
(C) result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any
property or assets of FTX, except pursuant to the FTX
Security Agreement.
(c) Governmental Approval. No registration with or
consent or approval of, or other action by, any Federal,
state or other governmental agency, authority or
regulatory body is or will be required in connection with
the execution, delivery and performance of this Agreement
or any other Loan Document, or the guarantee of the Loans
pursuant to the FTX Guaranty except (i) such as have been
made and obtained and are in full force and effect and
(ii) such security filings and recordations as may be
required in connection with the grant of any Lien under
the FTX Security Agreement.
(d) Enforceability. Each of this Agreement and the
other Loan Documents executed and delivered by FTX
constitutes (or, as to any Loan Document contemplated
hereby to be executed and delivered by FTX at any future
date, will constitute) a legal, valid and binding
obligation of FTX, in each case enforceable in accordance
with its terms (subject, as to the enforcement of remedies
against FTX, to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting
creditors' rights against FTX generally in connection with
the bankruptcy, reorganization or insolvency of FTX or a
moratorium or similar event relating to FTX).
(e) Litigation; Compliance with Laws; etc.
(i) Except as disclosed in the 1994 FTX Form 10-K and any
subsequent reports filed as of 20 days prior to the date
hereof with the SEC on Form 10-Q or Form 8-K which have
been delivered to the Banks, there are no actions, suits
or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or regulatory
authority now pending or, to the knowledge of FTX,
threatened against or affecting FTX or any of its
subsidiaries or the businesses, assets or rights of FTX or
any of its subsidiaries (i) which involve this Agreement
or any other Loan Document or any of the transactions
contemplated hereby or thereby or (ii) as to which there
is a reasonable possibility of an adverse determination
and which, if adversely determined, could, individually or
in the aggregate, materially impair the ability of FTX or
FRP to conduct its business substantially as now
conducted, or materially and adversely affect the
businesses, assets, operations, prospects or condition,
financial or otherwise, of FTX or FRP, or impair the
validity or enforceability of, or the ability of FTX to
perform its obligations under, this Agreement or any other
Loan Document.
(f) Representations Incorporated By Reference from the
FTX Credit Agreement. Section 3.1 of the FTX Credit
Agreement (other than paragraphs (a), (b), (c), (d),
(f)(i), (h)(ii) and (iii) and (p) thereof) is hereby
incorporated by reference herein with the same force and
effect as though fully set forth herein in its entirety
and shall be deemed made each time the representations in
this Section 3.2 are made or deemed made.
(g) Florida Environmental Liability. The Partnership
and the Subsidiaries do not have any ownership or control
rights in respect of the properties listed on Schedule IV
which could result in any environmental or reclamation
liability for the Partnership and the Subsidiaries
relating to such properties.
(h) No Material Misstatements. No information, report
(including any exhibit, schedule or other attachment
thereto or other document delivered in connection
therewith), financial statement, exhibit or schedule
prepared or furnished by FTX or its subsidiaries to the
Administrative Agent or any Bank in connection with this
Agreement or any of the other Loan Documents or included
therein or any information provided to Cravath, Swaine &
Moore in connection with the preparation of the
environmental due diligence summary memorandum referred to
in paragraph (m) of Article IV of the FTX Credit Agreement
contained or contains any material misstatement of fact or
omitted or omits to state any material fact necessary to
make the statements therein, in the light of the
circumstances under which they were made, not misleading.
SECTION 3.3. Representations and Warranties of FCX.
As of the Funding Date, and each other date upon which such
representations and warranties are required to be made or
deemed made pursuant to Section 4.2(i), FCX represents and
warrants to each of the Banks as follows:
(a) Organization, Powers. FCX is duly organized,
validly existing and in good standing under the laws of
the State of Delaware and FI is duly organized and validly
existing under the laws of Indonesia and is duly
domesticated under the laws of the State of Delaware.
Each of FCX and FI has the requisite power and authority
to own its property and assets and to carry on its
business as now conducted and is qualified to do business
in every jurisdiction where such qualification is
required, except where the failure so to qualify would not
have a material adverse effect on the condition, financial
or otherwise, of FCX or FI. FCX has the power to execute,
deliver and perform its obligations under this Agreement,
the FM Intercreditor Agreement, the FCX Guaranty, the FCX
Pledge Agreements and any other Loan Document executed and
delivered or to be executed and delivered by it at any
time, to guarantee the Loans pursuant to the FCX Guaranty
and to countersign and accept the terms of the FCX
Intercreditor Agreement.
(b) Authorization. The execution, delivery and
performance of this Agreement, the FM Intercreditor
Agreement, the FCX Guaranty, the FCX Pledge Agreement and
any other Loan Documents executed and delivered or to be
executed and delivered by FCX at any time, the guarantee
of the Loans pursuant to the FCX Guaranty and the
countersignature and acceptance of the terms of the FCX
Intercreditor Agreement (i) have been duly authorized by
all requisite corporate and, if required, shareholder,
action on the part of FCX and (ii) will not (A) violate
(x) any provision of law, statute, rule or regulation or
the certificate or articles of incorporation or other
constitutive documents or the By-laws or regulations of
FCX, (y) any order of any court, or any rule, regulation
or order of any other agency of government binding upon
FCX or (z) any provisions of any indenture, agreement or
other instrument to which FCX is a party, or by which FCX
or any of its properties or assets are or may be bound,
(B) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both)
a default under any indenture, agreement or other
instrument referred to in (ii)(A)(z) above or (C) result
in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any property or
assets of FCX, except pursuant to the FCX Pledge
Agreements.
(c) Governmental Approval. No registration with or
consent or approval of, or other action by, any Federal,
state or other governmental agency, authority or
regulatory body is or will be required in connection with
the execution, delivery and performance of this Agreement
or any other Loan Document, or the guarantee of the Loans
pursuant to the FCX Guaranty except (i) such as have been
made and obtained and are in full force and effect and
(ii) such security filings and recordations as may be
required in connection with the grant of any Lien under
the FCX Pledge Agreements.
(d) Enforceability. Each of this Agreement and the
other Loan Documents executed and delivered by FCX
constitutes (or, as to any Loan Document contemplated
hereby to be executed and delivered by FCX at any future
date, will constitute) a legal, valid and binding
obligation of FCX, in each case enforceable in accordance
with its terms (subject, as to the enforcement of remedies
against FCX, to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting
creditors' rights against FCX generally in connection with
the bankruptcy, reorganization or insolvency of FCX or a
moratorium or similar event relating to FCX).
(e) Litigation; Compliance with Laws; etc.
(i) Except as disclosed in the 1994 FCX Form 10-K and any
subsequent reports filed as of 20 days prior to the date
hereof with the SEC on Form 10-Q or Form 8-K which have
been delivered to the Banks, there are no actions, suits
or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or regulatory
authority now pending or, to the knowledge of FCX,
threatened against or affecting FCX or any of its
subsidiaries or the businesses, assets or rights of FCX or
any of its subsidiaries (i) which involve this Agreement
or any other Loan Document or any of the transactions
contemplated hereby or thereby or (ii) as to which there
is a reasonable possibility of an adverse determination
and which, if adversely determined, could, individually or
in the aggregate, materially impair the ability of FCX or
FI to conduct its business substantially as now conducted,
or materially and adversely affect the businesses, assets,
operations, prospects or condition, financial or
otherwise, of FCX or FI, or impair the validity or
enforceability of, or the ability of FCX to perform its
obligations under, this Agreement or any other Loan
Document.
(f) Representations Incorporated By Reference from the
FCX Credit Agreement. Section 4.1 of the FCX Credit
Agreement (other than paragraphs (a), (b), (c), (d),
(f)(i), (h)(ii) and (iii) and (q) thereof and the first
sentence of paragraph (o) thereof) is hereby incorporated
by reference herein with the same force and effect as
though fully set forth herein in its entirety and shall be
deemed made each time the representations in this
Section 3.3 are made or deemed made.
(g) No Material Misstatements. No information, report
(including any exhibit, schedule or other attachment
thereto or other document delivered in connection
therewith), financial statement, exhibit or schedule
prepared or furnished by FCX or its subsidiaries to the
Administrative Agent or any Bank in connection with this
Agreement or any of the other Loan Documents or included
therein or any information provided to Cravath, Swaine &
Moore in connection with the preparation of the
environmental due diligence summary memorandum referred to
in Section 6.1(l) of the FCX Credit Agreement contained or
contains any material misstatement of fact or omitted or
omits to state any material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading.
ARTICLE IV
Covenants
SECTION 4.1. Affirmative Covenants of the Partnership.
Commencing as of the Funding Date and so long thereafter as
any Bank shall have any Commitment hereunder or the
principal of or interest on any Loan shall be unpaid, unless
the Required Banks shall have otherwise consented in
writing:
(a) Financial Statements, etc. The Partnership shall
furnish each Bank:
(1) within 95 days after the end of each fiscal
year of the Company, a consolidated balance sheet of
the Company and its subsidiaries (including the
Partnership) as at the close of such fiscal year and
consolidated statements of operations and of cash flow
of the Company and its subsidiaries for such year, with
the opinion thereon of Arthur Andersen LLP or other
independent public accountants of national standing
selected by the Company;
(2) within 50 days after the end of each of the
first three quarters of each fiscal year of the
Company, a consolidated balance sheet of the Company
and its subsidiaries as at the end of such quarter and
consolidated statements of operations of the Company
and its subsidiaries for such quarter and consolidated
statements of operations and of cash flow of the
Company for the period from the beginning of the fiscal
year to the end of such quarter, certified by the
Treasurer or other authorized financial or accounting
officer of FTX;
(3) within 95 days after the end of each fiscal
year of the Partnership, a consolidated unaudited
balance sheet of the Partnership and the Subsidiaries
as at the close of such fiscal year and consolidated
unaudited statements of operations and of cash flow of
the Partnership and the Subsidiaries for such year,
certified by the Treasurer or other authorized
financial or accounting officer of FTX;
(4) within 50 days after the end of each of the
first three quarters of each fiscal year of the
Partnership, a consolidated balance sheet of the
Partnership and the Subsidiaries as at the end of such
quarter and consolidated statements of operations of
the Partnership and the Subsidiaries for such quarter
and consolidated statements of operations and of cash
flows of the Partnership and the Subsidiaries for the
period from the beginning of the fiscal year to the end
of such quarter, certified by the Treasurer or other
authorized financial or accounting officer of FTX;
(5) at the time of the provision of the financial
statements referred to in clauses (1) through (4)
above, an update of Schedule V to correct, add or
delete any required information in reasonable detail
satisfactory to the Administrative Agent demonstrating
compliance with the covenant contained in
Section 4.2(o);
(6) promptly after their becoming available,
(a) copies of all financial statements, reports and
proxy statements which the Company shall have sent to
its shareholders generally, (b) copies of all
registration statements (excluding registration
statements relating to employee benefit plans) and
regular and periodic reports, if any, which the Company
shall have filed with the SEC or with any national
securities exchange and (c) if requested by any Bank,
copies of each annual report filed with any
governmental agency pursuant to ERISA with respect to
each Plan of the Partnership or any of the
Subsidiaries;
(7) within 95 days after the end of each fiscal
year of the Partnership, a certificate by a Financial
Officer of the Partnership, to the effect that no Event
of Default or Default has occurred and is continuing,
or if an Event of Default or Default has occurred and
is continuing, specifying the nature and extent thereof
and the corrective action (if any) proposed to be taken
with respect thereto;
(8) promptly upon the occurrence of any ERISA
Event, Event of Default, Default or the commencement of
any proceeding regarding the Company, the Partnership
or any Subsidiary under any Federal or state bankruptcy
law, notice thereof, describing the same in reasonable
detail;
(9) promptly upon the occurrence of any
development that, in the judgment of the Partnership,
has resulted in, or could reasonably be anticipated to
result in, a material adverse effect on the business,
assets, operations or financial condition of the
Partnership or its ability to comply with its
obligations under the Loan Documents, notice thereof,
describing the same in reasonable detail;
(10) promptly after any sale of a Key Asset,
information identifying such Key Asset, the purchaser
and the purchase price therefor, together with any
other information requested by the Administrative
Agent;
(11) fifteen days prior to the grant of any
permitted Liens in favor of FTX or FCX, copies of all
agreements, documents or instruments pertaining thereto;
(12) promptly after the execution thereof and
subject to Section 4.2(b) and Section 4.4(b), a copy,
certified by a Responsible Officer, of each amendment,
supplement, change or waiver to any Material Agreement
(including, without limitation, to the Partnership
Agreement); and
(13) from time to time, such further information
regarding the business, affairs and financial condition
of the Company, the Partnership or any Subsidiary as
any Bank may reasonably request.
(b) Obligations, Taxes and Claims. The Partnership
shall, and shall cause each Subsidiary to, pay its
Indebtedness and other obligations promptly and in
accordance with their terms and pay and discharge all
taxes, assessments and governmental charges or levies
imposed upon it, upon its income or profits or upon any
property belonging to it, prior to the date on which
material penalties attach thereto; provided that neither
the Partnership nor any Subsidiary shall be required to
pay any such tax, assessment, charge or levy, the payment
of which is being contested in good faith by proper
proceedings and with respect to which the Partnership or
such Subsidiary shall have, to the extent required by
GAAP, set aside on its books adequate reserves.
(c) Maintenance of Existence; Conduct of Business.
The Partnership shall preserve and maintain its
independent legal existence as a partnership; preserve and
maintain all its rights, privileges and franchises
necessary or desirable in the normal conduct of its
business; segregate its individual assets and business
functions from those of FTX, its subsidiaries, the Company
and its other subsidiaries, if any (which shall not
prohibit FTX from acting as managing general partner of
the Partnership), including without limitation segregating
its bank and investment accounts from those of FTX, its
subsidiaries, the Company or its other subsidiaries, if
any; maintain and preserve all property material to the
conduct of its business and keep such property in good
repair, working order and condition and from time to time
make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in
connection therewith may be properly conducted at all
times.
(d) Compliance with Applicable Laws. The Partnership
shall, and shall cause each Subsidiary to, comply with the
requirements of all applicable laws, rules, regulations
and orders of any governmental authority, a breach of
which would materially and adversely affect the
consolidated financial condition or business of the
Partnership and the Subsidiaries, except where contested
in good faith and by proper proceedings and with respect
to which the Partnership shall have, to the extent
required by GAAP, set aside on its books adequate
reserves.
(e) Litigation. The Partnership shall promptly give
to each Bank notice in writing of all litigation and all
proceedings before any governmental or regulatory agencies
or arbitration authorities affecting the Partnership or
any Subsidiary, except those which do not relate to the
Loan Documents and which, if adversely determined, would
not have a Material Adverse Effect.
(f) ERISA. The Borrower shall, and shall cause each
of the Subsidiaries to, comply with all material respects
with the applicable provisions of ERISA and the Code and
furnish to the Administrative Agent as soon as possible,
and in any event within 30 days after any Responsible
Officer of the Borrower or any ERISA Affiliate knows or
has reason to know that, any ERISA Event has occurred that
alone or together with any other ERISA Event could
reasonably be expected to result in liability of the
Borrower in an aggregate amount exceeding $25,000,000 or
requires payment exceeding $10,000,000 in any year, a
statement of a Financial Officer of the Borrower setting
forth details as to such ERISA Event and the action that
the Borrower proposes to take with respect thereto.
(g) Insurance. The Partnership and each Subsidiary
shall (i) keep its insurable properties adequately insured
at all times; (ii) maintain such other insurance, to such
extent and against such risks, including fire, flood and
other risks insured against by extended coverage, as is
customary with persons in the same or similar businesses;
(iii) maintain in full force and effect public liability
insurance against claims for personal injury or death or
property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or
controlled by it in such amount as it shall reasonably
deem necessary; and (iv) maintain such other insurance as
may be required by law.
(h) Access to Premises and Records. The Partnership
and each Subsidiary shall maintain financial records in
accordance with GAAP, and, at all reasonable times and as
often as any Bank may reasonably request, permit
representatives of any Bank to have access to its
financial records and its premises and to the records and
premises of any of its subsidiaries, if any, and to make
such excerpts from such records as such representatives
deem necessary and to discuss its affairs, finances and
accounts with its officers, if any, and the officers of
FTX, as managing general partner, and the Partnership's
independent certified public accountants or other parties
preparing consolidated or consolidating statements for the
Partnership or on its behalf.
(i) Compliance with Environmental Laws. The Borrower
shall comply, and cause the Subsidiaries and all lessees
and other Persons occupying the Properties to comply, in
all material respects with all Environmental Laws and
Environmental Permits applicable to its operations and
Properties; obtain and renew all material Environmental
Permits necessary for its operations and Properties; and
conduct any Remedial Action in accordance with
Environmental Laws; provided, however, that neither the
Borrower nor any of the Subsidiaries shall be required to
undertake any Remedial Action to the extent that its
obligation to do so is being contested in good faith and
by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.
(j) Preparation of Environmental Reports. If a
default caused by reason of a breach of Section 3.1(k) or
4.1(i) shall have occurred and be continuing, at the
request of the Required Banks through the Administrative
Agent, the Borrower shall provide to Banks within 45 days
after such request, at the expense of the Borrower, an
environmental site assessment report for the Properties
(which are the subject of such default) prepared by an
environmental consulting firm acceptable to the
Administrative Agent, indicating the presence or absence
of Hazardous Materials and the estimated cost of any
compliance or Remedial Action in connection with such
Properties.
SECTION 4.2. Negative Covenants of the Partnership.
Commencing as of the Funding Date and so long thereafter as
any Bank shall have any Commitment hereunder or the
principal of or interest on any Loan shall be unpaid, with-
out the prior written consent of the Required Banks:
(a) Conflicting Agreements. The Partnership shall
not, and shall not permit any Subsidiary to, enter into
any agreement containing any provision which (i) would be
violated or breached by the performance of its obligations
under any Loan Document or under any instrument or
document delivered or to be delivered by it hereunder or
thereunder or in connection herewith or therewith or
(ii) would prohibit or restrict the payments of dividends
or other distributions by any Subsidiary.
(b) Material Agreements. The Partnership shall not
amend, supplement, change, terminate or waive any material
provision of any Material Agreement unless the Banks shall
have received 30 days' notice of such amendment,
supplement, change, termination or waiver and the Required
Banks shall not have objected thereto on the ground that
it would, in their judgment, adversely affect the rights
or interests of the Banks; provided that, if the
Partnership shall not have given such 30 days' notice, the
Partnership shall not amend, supplement, change, terminate
or waive any material provision of any Material Agreement
unless the Required Banks shall have given their written
consent thereto.
(c) Mergers and Consolidations. The Partnership shall
not, and shall not permit any Subsidiary to, merge into or
consolidate with any other person or permit any other
person to merge into or consolidate with it, except that
if at the time thereof and immediately after giving effect
thereto no Event of Default or Default shall have occurred
and be continuing (i) any wholly owned Subsidiary may
liquidate into the Partnership in a transaction in which
the Partnership is the surviving entity, (ii) any wholly
owned Subsidiary may merge into or consolidate with any
other wholly owned Subsidiary in a transaction in which
the surviving entity is a wholly owned Subsidiary and no
person other than the Partnership or a wholly owned
Subsidiary receives any consideration and (iii) any
Subsidiary may merge into or consolidate with any other
person in a transaction in which the surviving person is a
Subsidiary of which the Partnership owns a percentage of
the equity, directly or indirectly, at least equal to the
percentage of the equity that it owned in the merging or
consolidating Subsidiary immediately prior to such merger
or consolidation and in which no person other than the
Partnership receives any consideration, except as
permitted by paragraph (D) of Section 4.2(e).
(d) Liens. The Partnership shall not, nor shall it
permit any Subsidiary to, create, incur, permit or suffer
to exist any Lien upon any of their respective properties
or assets (including without limitation stock or other
securities of, or ownership interest in, any person
including any Subsidiary) now owned or hereafter acquired
or on any income or revenues or rights in respect of any
thereof, except:
(i) materialmen's, suppliers', tax and other
similar Liens arising in the ordinary course of the
Partnership's or such Subsidiary's business securing
obligations which are not overdue or are being
contested in good faith by appropriate proceedings and
as to which adequate reserves have been set aside on
its books to the extent required by GAAP; Liens arising
in connection with workers' compensation, unemployment
insurance and progress payments under government
contracts; and other Liens incident to the ordinary
conduct of the Partnership's or such Subsidiary's
business or the ordinary operation of property or
assets and not incurred in connection with the
obtaining of any Indebtedness and which do not in the
aggregate materially detract from the value of their
assets or materially impair the use thereof in the
operation of their businesses;
(ii) zoning restrictions, easements, rights-of-
way, restrictions on use of real property and other
similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial
in amount and do not materially detract from the value
of the property subject thereto or interfere with the
ordinary conduct of the business of the Partnership or
any Subsidiary;
(iii) Liens of lessors of property (in such
capacity) leased by the Partnership, which Liens are
limited to the property leased thereunder;
(iv) Liens on property of the Partnership in favor
of FTX and FCX securing the obligations of the
Partnership under the FTX/FMPO Credit Agreement and the
Reimbursement Agreement on the real estate assets of
the Partnership (excluding the TCB Collateral) that are
subject to, and granted in accordance with and on the
terms of, the FM Intercreditor Agreement; and
(v) as of the exercise of either of the options
referred to in Sections 4.2(g)(ii)(A) and (B),
(A) Liens in favor of FTX and FCX on the TCB Borrower
Properties securing the Guaranties and (B) Liens in
favor of TCB on the TCB Collateral securing the
obligations of the TCB Borrower under the TCB Credit
Agreement.
(e) Investments, Loans, Advances and Acquisitions.
The Partnership shall not, and shall not permit any
Subsidiary to, (i) purchase, lease or otherwise acquire
(in one transaction or a series of transactions) all or
any substantial part of the assets of, (ii) purchase, hold
or acquire any capital stock, evidences of indebtedness or
other securities of, (iii) make or permit to exist any
loans or advances to or (iv) make or permit to exist any
investment or any other interest in, any other Person, or
contribute assets to any joint ventures with parties which
are not the Borrower or a Subsidiary, except:
(A) investments by the Partnership existing on the
Closing Date in the capital stock of the Subsidiaries;
(B) loans by the Partnership to the TCB Borrower
or the Circle C Subsidiary not in excess of the
interest expense payable by such entity on the TCB
Credit Agreement;
(C) (i) advances by the Partnership to the TCB
Borrower, the Circle C Subsidiary or any other Sub-
sidiary in the amount of such Subsidiary's reasonable
operating expenses (including development costs for the
Circle C Property); provided that such advances shall
be made only upon or after the incurrence of such
expenses and only to the extent utilized to pay such
expenses within thirty days of the date of any such
advance; and (ii) investments in joint ventures and
development arrangements, not in excess of an aggregate
amount of $10,000,000 for all such advances and
investments made pursuant to this clause (C);
(D) Permitted Investments; and
(E) if at the time thereof and after giving effect
thereto no Default or Event of Default shall have
occurred and be continuing, the Partnership may
acquire, for nominal consideration only, assets
constituting, or the capital stock of, TCB Borrower,
subject to 20 days' prior written notice to the Banks
of such acquisition describing the terms of such
acquisition and the prior approval of such terms of the
Required Banks.
(f) Distributions. The Partnership shall not, and
shall not permit any Subsidiary to, (i) pay, directly or
indirectly, or make any distribution (by reduction of
Partnership equity (including any option, warrant or other
right to acquire any Partnership equity), capital or
otherwise) or any dividend, whether in cash, property,
securities or a combination thereof, with respect to any
Partnership equity (including any option, warrant or other
right to acquire any Partnership equity), (ii) directly or
indirectly make any redemption, repurchase or repayment of
Partnership equity (including any option, warrant or other
right to acquire any Partnership equity), (iii) purchase,
redeem or acquire any capital stock of the Company (or any
option, warrant or other right to acquire any such capital
stock) or (iv) make any payment, redemption, repurchase or
other acquisition or retirement for value of any
Indebtedness of the Company (which shall not include any
Indebtedness of the Partnership or of any Subsidiary);
provided, however, that (i) any Subsidiary may declare and
pay dividends or make other distributions to the Partner-
ship and (ii) the Partnership may make such distributions
from time to time to the extent (but only to the extent)
required to enable the Company to pay (A) all reasonable
out-of-pocket expenses arising under the Administrative
Services Agreement (as it may be amended as permitted
hereby and in effect from time to time) which have become
due at or prior to the time of such distribution, (B) the
Company's actual current combined federal, state and local
cash tax liability (including estimated payments required
by applicable law) arising from or attributed to the
Company's Partnership equity interest, but only to the
extent such distributions are in fact utilized to pay such
taxes within 30 days of the date of any distribution, and
(C) all other reasonable and necessary general and
administrative cash expenses, not in excess of $2,000,000
per 12-month period, relating to the management of the
Company's Partnership equity interest.
(g) Indebtedness. Neither the Partnership nor any
Subsidiary shall incur, create, assume or permit to exist
any Indebtedness of any of them except:
(i) Indebtedness of the Partnership not to exceed
$68,000,000 in aggregate principal amount outstanding
on the date hereof incurred pursuant to the Pel-Tex
Agreements, but not any extensions, renewals or
replacements of such Indebtedness; and provided that no
payments on the principal amount of such Indebtedness
may be made, directly or indirectly, from proceeds of
the Loans;
(ii) in the event the Partnership shall exercise
its option pursuant to the Agreement dated as of Feb-
ruary 6, 1992, among Steven P. Bartlett (the sole
shareholder of the TCB Borrower), the Partnership (as
successor to Longhorn Properties Inc., a Delaware
corporation), and the TCB Borrower, to purchase all of
the authorized and issued capital stock of the TCB
Borrower, then the TCB Borrower may continue to be
obligated in respect of the outstanding Indebtedness
not in excess of $40,812,000 under the TCB Credit
Agreement, or in the event the Partnership shall
exercise its option pursuant to the Option Agreement
dated as of February 6, 1992, between the TCB Borrower
and David B. Armbrust, as Trustee (and filed as a part
of such Exhibit), to cause a Subsidiary (the "Circle C
Subsidiary") to purchase the assets of the TCB Borrower
referred to as the "Property" in such Option Agreement
(the "Circle C Property"), then such Subsidiary may
assume the outstanding Indebtedness not in excess of
$40,812,000 under the TCB Credit Agreement and the
related obligations to FTX and FCX in respect of the
Guaranties of the TCB Credit Agreement; and any
extensions, renewals or replacements of such
Indebtedness, in any case;
(iii) Indebtedness owed by the Partnership to FTX
and/or FCX for loans made under the FTX/FMPO Credit
Agreement so long as no Default or Event of Default has
occurred and is continuing; provided that all such
loans other than the FTX Term Loan (as defined below)
may be incurred only as subordinated upon the
Subordination Terms to the Senior Debt (as defined in
the Subordination Terms) for the benefit of the holders
of such Senior Debt (which Subordination Terms shall be
contained in or attached to such promissory notes and
to which FTX or FCX, as applicable, shall evidence its
agreement by countersigning such promissory notes)
subject to and in accordance with the FM Intercreditor
Agreement and not permit payments of principal or
interest, prior to the Maturity Date and the payment of
all principal of and interest on the Loans and all fees
and other expenses or amounts owed hereunder and
termination of the Commitments;
(iv) Indebtedness evidenced by the Promissory
Notes; and
(v) Unsecured Indebtedness of the Partnership not
otherwise permitted by the foregoing clauses of this
Section 4.2(g) incurred in the ordinary course of
business, not for borrowed money, including letters of
credit in favor of municipalities to facilitate the
construction of infrastructure (such as utilities) for
the Mortgaged Properties.
The Partnership may borrow up to $10,000,000 in aggregate
principal amount (the "FTX Term Loan") from time to time
under clause (iii) above on an unsubordinated term basis
and may repay any or all of such amount borrowed, from
proceeds of Loans or otherwise.
(h) Sale and Lease-Back Transactions. The Partnership
shall not, and shall not permit any Subsidiary to, enter
into any arrangement, directly or indirectly, with any
person whereby it shall sell or transfer any property,
real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or
lease such property or other property which it intends to
use for substantially the same purpose or purposes as the
property being sold or transferred.
(i) Transactions with Affiliates. The Partnership
shall not, and shall not permit any Subsidiary to, sell or
transfer any property or assets to, purchase or acquire
any property or assets from, perform any services for or
otherwise engage in any other transactions with, any
Affiliate of the Partnership, except that as long as no
Default or Event of Default shall have occurred and be
continuing, the Partnership or any Subsidiary may engage
in any of the foregoing transactions in the ordinary
course of business on an arm's-length and fair value
basis; provided that the foregoing shall not prohibit
(i) the joint venture between the Partnership and IMC-
Agrico providing for the joint development of certain
Florida real estate pursuant to, and on the terms of, the
Florida Joint Venture Agreement (as it may be amended as
permitted hereby and in effect from time to time),
(ii) FTX from making permitted advances to the Partnership
pursuant to the FTX/FMPO Credit Agreement (as it may be
amended as permitted hereby and in effect from time to
time), (iii) FTX from acting as the managing general
partner of the Partnership or (iv) any other transactions
expressly permitted by this Agreement, including pursuant
to Section 4.2(e) or the Administrative Services
Agreement.
(j) Fiscal Year. The Partnership shall not change its
fiscal year to end on any date other than December 31.
(k) Business of Partnership and Subsidiaries. The
Partnership shall not, and shall not permit any Subsidiary
to, engage at any time in any business or business
activity other than as described in the 1994 FM Form 10-K
and business activities reasonably incidental thereto.
(l) Federal Reserve Regulations; Use of Proceeds. The
Partnership will not (i) use the proceeds of any Loan in
any manner that would result in a violation of, or be
inconsistent with, the provisions of Regulations G, U or X
of the Board, (ii) take any action at any time that would
cause the representation and warranty contained in
Section 3.2(h) at any time to be other than true and
correct, (iii) use any part of the proceeds of any Loan,
directly or indirectly, immediately, incidentally or
ultimately, to purchase or carry Margin Stock or to refund
indebtedness originally incurred for such purpose or (iv)
directly or indirectly use the proceeds of any Borrowing
(x) to repay principal on any Indebtedness (subordinate or
otherwise) other than the FTX Term Loan so long as no
default or event of default has occurred or is continuing
or would result therefrom or (y) to purchase any
investments or properties except to the extent permitted
by Section 4.2(e)(C).
(m) Certain Debt Agreements. The Partnership shall
not, without the prior written consent thereto of the
Required Banks, amend, supplement or change in any
material manner (including any earlier maturity date or
amortization schedule) any of the terms or provisions of
any agreement, note or other instrument governing or
evidencing any of the Indebtedness referred to in para-
graphs (i) through (iii) of Section 4.2(g) or, with
respect to the Indebtedness referred to in paragraph (iv)
of such Section, any of the terms and provisions
(including without limitation the Subordination Terms)
required by such paragraph or the FM Intercreditor
Agreement.
(n) Swaps. Neither the Partnership nor any Subsidiary
shall enter into, or be obligated in respect of, any Hedge
Agreement; provided that (i) the Partnership may enter
into any Permitted Swap so long as the aggregate notional
amounts under all such Permitted Swaps shall not at any
time be in excess of the amount of the related
Indebtedness (that bears interest at a floating rate)
permitted under Section 4.2(g) and outstanding at such
time and (ii) upon the exercise by the Partnership of
either of the options referred to in Section 4.2(g)(ii),
the resulting Subsidiary obligated for the Indebtedness
referred to under such Section 4.2(g)(ii) or the Part-
nership may enter into any Permitted Swap so long as the
aggregate notional amount under such Permitted Swap shall
not at any time be in excess of the amount of Indebtedness
(that bears interest at a floating rate) permitted under
such Section 4.2(g)(ii) and outstanding at such time;
provided further that no Permitted Swap shall be secured
unless all the Banks consent thereto.
(o) Assets of Subsidiaries. The Partnership shall not
transfer any Key Assets to the Subsidiaries or permit the
Subsidiaries, collectively, to own or hold any assets at
any time other than (i) those assets owned by the
Subsidiaries on the Closing Date, (ii) investments
permitted by Section 4.2(e)(D) and (iii) assets acquired
from the TCB Borrower as permitted by Section 4.2(g)(ii).
SECTION 4.3. Affirmative Covenants of FTX. So long as
any Bank shall have any Commitment hereunder or the
principal of or interest on any Loan shall be unpaid, unless
the Required Banks shall otherwise consent in writing:
(a) Affirmative Covenants Incorporated by Reference
from the FTX Credit Agreement. FTX will at all times be
in full compliance with Section 5.1 of the FTX Credit
Agreement, which is hereby incorporated by reference
herein with the same force and effect as though fully set
forth herein in its entirety; provided that the references
therein to "Default", "Event of Default", "Bank" and
"Agents" or "Agent" are replaced herein with references to
Default, Event of Default, Bank and the Agents or Agent
hereunder, respectively.
(b) Partnership's Covenants and FTX. FTX, in its
capacity as managing general partner of the Partnership,
shall cause the Partnership to perform and to comply with
its covenants set forth in Sections 4.1 and 4.2 and to
otherwise act in accordance with this Agreement. FTX
shall at all times be a general partner of the Partnership
and the sole managing general partner of the Partnership
and shall at all times generally carry out the functions
of the managing general partner of the Partnership;
provided that the foregoing shall not prevent FTX from
delegating to any of its subsidiaries FTX's duties as the
managing general partner of the Partnership.
SECTION 4.4. Negative Covenants of FTX. So long as
any Bank shall have any Commitment hereunder or the prin-
cipal of or interest on any Loan shall be unpaid, without
the prior written consent of the Required Banks:
(a) Negative Covenants Incorporated by Reference from
the FTX Credit Agreement. FTX will not at any time fail
to be in full compliance with Section 5.2 of the FTX
Credit Agreement, which is hereby incorporated by
reference herein with the same force and effect as though
fully set forth herein in its entirety; provided that the
references therein to "this Agreement", "this Agreement,
the Pledge Agreement or the Security Agreement",
"Default", "Event of Default", "Banks", "Required Banks"
and "Agents" or "Agent" are replaced herein with
references to this Agreement, this Agreement or any other
Loan Document, Default, Event of Default, Banks, Required
Banks and Agents or Agent hereunder, respectively.
(b) Material Agreements. FTX shall not amend,
supplement, change, terminate or waive any material
provision of any Material Agreement unless the Banks shall
have received 30 days' notice of such amendment,
supplement, change, termination or waiver and the Required
Banks shall not have objected thereto on the ground that
it would, in their judgment, adversely affect the rights
or interests of the Banks; provided that if FTX shall not
have given such 30 days' notice, FTX shall not amend,
supplement, change, terminate or waive any material
provision of any Material Agreement unless the Required
Banks shall have given their written consent thereto.
SECTION 4.5. Affirmative Covenants of FCX. So long as
any Bank shall have any Commitment hereunder or the
principal of or interest on any Loan shall be unpaid, unless
the Required Banks shall otherwise consent in writing, FCX
will at all times be in full compliance with Section 5.1 of
the FCX Credit Agreement, which is hereby incorporated by
reference herein with the same force and effect as though
fully set forth herein in its entirety; provided that the
references therein to "Default", "Event of Default", "Bank"
and "Agents" or "Agent" are replaced herein with references
to Default, Event of Default, Bank and the Agents or Agent
hereunder, respectively.
SECTION 4.6. Negative Covenants of FCX. So long as
any Bank shall have any Commitment hereunder or the prin-
cipal of or interest on any Loan shall be unpaid, without
the prior written consent of the Required Banks, FCX will
not at any time fail to be in full compliance with
Section 5.2 of the FCX Credit Agreement, which is hereby
incorporated by reference herein with the same force and
effect as though fully set forth herein in its entirety;
provided that the references therein to "this Agreement",
"this Agreement, the Pledge Agreement or the Security
Agreement", "Default", "Event of Default", "Banks",
"Required Banks" and "Agents" or "Agent" are replaced herein
with references to this Agreement, this Agreement or any
other Loan Document, Default, Event of Default, Banks,
Required Banks and Agents or Agent hereunder, respectively.
ARTICLE V
Conditions of Credit
SECTION 5.1. Conditions Precedent to Initial
Borrowing. On the Funding Date, and as conditions precedent
to the initial Borrowing by the Borrower to occur on such
date, each of the following conditions shall have been
satisfied:
(a) Each Bank shall have received the following:
(i) a copy of the Certificates of Incorporation of
FTX and FCX as in effect on the date hereof and each
amendment, if any, subsequent thereto, certified as of
a recent date by the Secretary of State of the State of
Delaware as being a true and correct copy of such
documents on file in his office;
(ii) the signed Certificate of the Secretary of
State of the State of Delaware, in regular form, dated
as of a recent date, listing the Certificate of
Incorporation of FTX and FCX as in effect on such
recent date and each subsequent amendment thereto on
file in his office and stating that such documents are
the only charter documents of FTX and FCX on file in
his office and that FTX and FCX are duly incorporated
and in good standing in the State of Delaware, has
filed all franchise tax returns and has paid all
franchise taxes required by law to be filed and paid by
FTX and FCX to the date of his Certificate;
(iii) the signed Certificate of the Secretary or
an Assistant Secretary of FTX, dated the Closing Date
and certifying, among other things, (A) a true and
correct copy of resolutions adopted by the Board of
Directors of FTX authorizing the making and performance
of this Agreement and the other Loan Documents (includ-
ing the FTX Guaranty) executed and delivered or to be
executed and delivered, as applicable, by FTX, and the
countersignature and acceptance by FTX of the FTX
Intercreditor Agreement, (B) that such resolutions have
not been modified, rescinded or amended and are in full
force and effect, (C) a true and correct copy of the
By-laws of FTX as in effect on the Closing Date and at
all times since a date prior to the date of the
resolutions described in (A) above, (D) that the
Certificate of Incorporation of FTX has not been
amended since the date of the last amendment shown on
the certificate referred to in (ii) above, and (E) the
incumbency and specimen signatures of each officer of
FTX executing the foregoing documents and any other
documents delivered to the Banks in connection herewith
on behalf of FTX; and a certificate of another officer
of FTX as to the incumbency and signature of such
Secretary or Assistant Secretary;
(iv) the signed Certificate of the Secretary or an
Assistant Secretary of FCX, dated the Closing Date and
certifying, among other things, (A) a true and correct
copy of resolutions adopted by the Board of Directors
of FCX authorizing the making and performance of this
Agreement and the other Loan Documents (including the
FCX Guaranty) executed and delivered or to be executed
and delivered, as applicable, by FCX, and the
countersignature and acceptance by FCX of the FCX
Intercreditor Agreement, (B) that such resolutions have
not been modified, rescinded or amended and are in full
force and effect, (C) a true and correct copy of the
By-laws of FCX as in effect on the Closing Date and at
all times since a date prior to the date of the
resolutions described in (A) above, (D) that the
Certificate of Incorporation of FCX has not been
amended since the date of the last amendment shown on
the certificate referred to in (ii) above, and (E) the
incumbency and specimen signatures of each officer of
FCX executing the foregoing documents and any other
documents delivered to the Banks in connection herewith
on behalf of FCX; and a certificate of another officer
of FCX as to the incumbency and signature of such
Secretary or Assistant Secretary;
(v) the signed Certificate of (A) the Chairman of
the Board, the President or any executive or senior
vice president and (B) the Chief Financial Officer, the
Controller or the Treasurer of FTX, dated the Closing
Date and certifying that (1) the representations and
warranties of FTX contained herein are true and correct
as of the Closing Date and (2) that there exists no
Default or Event of Default relating to FTX or the
Partnership; and
(vi) the signed Certificate of (A) the Chairman of
the Board, the President or any executive or senior
vice president and (B) the Chief Financial Officer, the
Controller or the Treasurer of FCX, dated the Closing
Date and certifying that (1) the representations and
warranties of FCX contained herein are true and correct
as of the Closing Date and (2) that there exists no
Default or Event of Default relating to FCX.
(b) The Administrative Agent shall have received all
fees and other amounts due and payable to the Agents or
the Banks on or prior to the Closing Date.
(c) All outstanding loans under the Credit Agreement
dated as of June 11, 1992, among the Partnership, FTX, the
banks named therein and Chemical Bank, as agent and as
collateral agent (the "Existing FM Credit Agreement")
shall have been repaid in full and the Existing FM Credit
Agreement and the commitments of the banks party thereto
shall have been terminated.
(d) The Administrative Agent shall have received fully
executed copies of the Guaranties and the Material
Agreements, all of which shall be in full force and
effect.
(e) Each Bank shall have received the signed
certificate of (i) the Chairman of the Board, the
President or any executive or senior vice president and
(ii) the Chief Financial Officer, the Controller or the
Treasurer of both FTX and the Partnership (or, if there
shall be no such officers of the Partnership appointed, of
FTX as managing general partner of the Partnership), dated
the Funding Date and confirming compliance with the
conditions precedent in this Section.
(f) Each Bank shall have received the favorable
written opinions of (i) the General Counsel of FTX and FCX
and (ii) Davis Polk & Wardwell, each dated the Funding
Date, addressed to the Banks, substantially in the forms
of Exhibits F and G, respectively, covering such matters
related to the transactions contemplated hereby as the
Administrative Agent may request and otherwise
satisfactory to Cravath, Swaine & Moore, counsel for the
Agents. FTX and the Partnership recognize that the Banks
are relying on such opinions in extending credit pursuant
to this Agreement, and FTX and the Partnership hereby
direct such counsel to deliver such opinions to the Banks.
(g) Each Bank shall have received (i) a certificate of
the Secretary or an Assistant Secretary of the Partnership
(or, if there shall be no such officer appointed, of FTX
as managing general partner of the Partnership), dated the
Funding Date and certifying (A) that attached thereto are
true and complete copies of the Partnership Agreement and
all other constitutive documents, if any, of the
Partnership as in effect on the date of such certificate
and at all times since the resolution of the Partnership
described in item (B) below, (B) that attached thereto is
a true and complete copy of a resolution or similar
authorization adopted by FTX, as managing general partner
of the Partnership, authorizing the execution, delivery
and performance of this Agreement and the other Loan
Documents executed and delivered or to be executed and
delivered, as applicable, by the Partnership, the
countersignature and acceptance by the Partnership of the
FM Intercreditor Agreement and the Borrowings hereunder by
the Partnership, and that such resolution or authorization
has not been modified, rescinded or amended and is in full
force and effect and (C) as to the incumbency and specimen
signature of each officer executing on behalf of the
Partnership the foregoing documents and any other document
delivered or to be delivered in connection herewith or
therewith; (ii) a certificate of another officer of the
Partnership (or, if there shall be no such officer
appointed, of FTX as managing general partner of the
Partnership) as to the incumbency and signature of such
Secretary or Assistant Secretary; and (iii) such other
instruments and documents as any Bank or Cravath, Swaine &
Moore, counsel for the Agents, may reasonably request.
(h) Each Bank shall have received a Promissory Note,
each duly executed by the Partnership, payable to such
Bank's order and otherwise complying with the provisions
of Section 2.4.
(i) The FM Intercreditor Agreement, the FCX
Intercreditor Agreement and the FTX Intercreditor
Agreement shall each have been executed and delivered by
all parties thereto other than the Administrative Agent
and, in the case of the FM Intercreditor Agreement, the FM
Collateral Agent, and countersigned and delivered by FTX,
FCX or the Partnership, as applicable, and the Agents and
each Bank shall have received a copy of such Intercreditor
Documents.
(j) There shall be no proceeding for the dissolution
or liquidation of the Partnership or any proceeding to
rescind the Partnership Agreement or the existence of the
Partnership which is pending or, to the knowledge of FTX
or the Partnership, threatened against or affecting the
Partnership.
(k) All legal matters incident to this Agreement, the
other Loan Documents and the Borrowings hereunder shall be
satisfactory to Cravath, Swaine & Moore, counsel for the
Agents.
By its execution and delivery of this Agreement, and unless
prior to the Funding Date it shall have provided written
notice to the Administrative Agent and FTX indicating
otherwise, each Bank has evidenced its satisfaction with
each matter set forth in this Section requiring satisfaction
on its part.
SECTION 5.2. Conditions Precedent to Each Borrowing.
Each Borrowing shall be subject to the following conditions
precedent:
(a) the representations and warranties on the part of
the Partnership contained in Section 3.1, on the part of
FTX contained in Section 3.2 and on the part of FCX
contained in Section 3.3 shall be true and correct in all
material respects at and as of the date of such Borrowing
as though made on and as of such date;
(b) the Administrative Agent shall have received a
notice of such Borrowing as required by Section 2.3; and
(c) no Event of Default or Default shall have occurred
and be continuing on the date of such Borrowing or would
result from such Borrowing.
SECTION 5.3. Representations and Warranties with
Respect to Borrowings. Each Borrowing shall be deemed a
representation and warranty by FTX and the Partnership,
jointly and severally, that the conditions precedent to each
such Borrowing, unless otherwise waived in accordance
herewith, shall have been satisfied as of the date of such
Borrowing.
ARTICLE VI
Events of Default
SECTION 6.1. Events of Default. If any of the
following acts or occurrences (an "Event of Default") shall
occur and be continuing:
(a) default for three or more days in the payment when
due (whether at the due date thereof, at a date fixed for
prepayment thereof, by acceleration thereof or otherwise)
of any principal of any Promissory Note;
(b) default for three or more days in the payment when
due of any interest on any Promissory Note or of any other
amount payable under this Agreement or any other Loan
Document;
(c) any representation or warranty made or deemed made
in or in connection with this Agreement, any other Loan
Document or in any certificate, report, financial
statement, letter or other writing or instrument furnished
or delivered to the Agents or any Bank pursuant hereto or
thereto shall prove to have been incorrect in any material
respect when made, effective or reaffirmed and repeated,
as the case may be;
(d) default in the due observance or performance of any
covenant, condition or agreement in Section 4.1(a)(8), the
first clause of Section 4.1(c), Section 4.2 (other than
paragraph (j) thereof), Section 4.4 (other than
Section 5.2(k) of the FTX Credit Agreement, as such
Section is incorporated by reference under
Section 4.4(a)), Section 4.6 (other than Section 5.2(k) of
the FCX Credit Agreement as such Section is incorporated
by reference under Section 4.6) or Section 4.3(b) as it
relates to any of the foregoing;
(e) default by FTX or FCX in the due observance or
performance of any covenant, condition or agreement
incorporated in Section 4.3(a) or contained in Section 4.5
which shall remain unremedied for 30 days after written
notice thereof shall have been given to the Borrower by
any Bank;
(f) default by FTX or the Partnership in the due
observance or performance of any other covenant, condition
or agreement contained in any Loan Document which shall
remain unremedied for 10 days after written notice thereof
shall have been given to the Borrower by any Bank;
(g) any Specified Entity shall (i) voluntarily commence
any proceeding or file any petition seeking relief under
Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state
bankruptcy, insolvency, liquidation or similar law,
(ii) consent to the institution of, or fail to contravene
in a timely and appropriate manner, any proceeding or the
filing of any petition described in clause (h) below,
(iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar
official for such Specified Entity or for a substantial
part of its property or assets, (iv) file an answer
admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) become
unable, admit in writing its inability or fail generally
to pay its debt as they become due or (vii) take any
action for the purpose of effecting any of the foregoing;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of
competent jurisdiction seeking (i) relief in respect of
any Specified Entity, or of a substantial part of the
property or assets of any Specified Entity, under Title 11
of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy,
insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian,
sequestrator or similar official for any Specified Entity
or for a substantial part of the property or assets of any
Specified Entity or (iii) the winding up or liquidation of
any Specified Entity; and such proceeding or petition
shall continue undismissed for 60 days, or an order or
decree approving or ordering any of the foregoing shall
continue unstayed and in effect for 30 days;
(i) default shall be made with respect to (x) Hedge
Agreements of any Specified Entity or (y) any Indebtedness
of any Specified Entity if the effect of any such default
shall be to accelerate, or to permit the holder or obligee
of any such obligations or Indebtedness (or any trustee on
behalf of such holder or obligee) to accelerate (with or
without notice or lapse of time or both), the maturity of
such Indebtedness or the payment of any net termination
value in respect of Hedge Agreements, as applicable, in an
aggregate amount in excess of the Threshold Amount; or any
payment, regardless of amount, of (A) net termination
value on any such obligation in respect of Hedge
Agreements and/or (B) any Indebtedness of any Specified
Entity in an aggregate principal amount (or in the case of
a Hedge Agreement, net termination value) in excess of the
Threshold Amount, shall not be paid when due, whether at
maturity, by acceleration or otherwise (after giving
effect to any period of grace specified in the instrument
evidencing or governing such Indebtedness or other
obligation);
(j) an ERISA Event shall have occurred with respect to
any Plan or Multi-Employer Plan that, when taken together
with all other ERISA Events, reasonably could be expected
to result in liability of FTX, FCX or the Borrower and/or
any Restricted Subsidiary of FCX or FTX and/or the
Borrower's ERISA Affiliates in an aggregate amount
exceeding the Threshold Amount or requires payments
exceeding the Threshold Amount in any year;
(k) any security interest purported to be created by
any Security Agreement shall cease to be, or shall be
asserted by the Borrower, FTX, FCX or any of their
Affiliates not to be, a valid, perfected, first priority
security interest in the securities, assets or properties
covered thereby, except to the extent that any such loss
of perfection or priority results from the failure of the
FTX Collateral Agent or the FCX Collateral Agent to
maintain possession of any certificates representing
securities pledged under the Security Agreements to the
extent that such pledged securities are certificated
securities;
(l) a final judgment for the payment of money shall be
rendered by a court or other tribunal against any
Specified Entity in excess of the Threshold Amount and
shall remain undischarged for a period of 45 consecutive
days during which execution of such judgment shall not
have been stayed effectively; or any action shall be
legally taken by a judgment creditor to levy upon assets
or properties of any Specified Entity to enforce any such
judgment;
(m) the Partnership Agreement (as it may be amended and
in effect from time to time) (or any successor agreement
pursuant to which FTX is appointed and authorized to act
as the managing general partner of the Partnership) shall
cease to be, or shall be asserted by FTX not to be, in
full force and effect and enforceable in all material
respects in accordance with its terms;
(n) the FTX Guaranty, the FCX Guaranty or any Loan
Document shall cease to be, or shall be asserted by FTX,
FCX or the Partnership or any of their Affiliates not to
be, in full force and effect and enforceable in all
material respects in accordance with its terms; or
(o) there shall have occurred a Change in Control;
then, and in any such event (other than an event with
respect to FTX, FCX, FRP, FI or the Partnership described in
paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Administrative
Agent may, and at the request of the Required Banks shall,
by written or telecopy notice to the Borrower, take one or
more of the following actions at the same or different
times: (i) declare the Commitments to be terminated,
whereupon they shall forthwith terminate; (ii) declare all
sums then owing by the Borrower under the Promissory Notes
or otherwise owing hereunder to be forthwith due and
payable, whereupon all such sums shall become and be
immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein,
in any other Loan Document or in any Intercreditor Document
to the contrary notwithstanding or (iii) exercise (or cause
the Collateral Agents to exercise) any or all the remedies
then available under the Security Agreements; and upon the
occurrence of any event with respect to FTX, FCX, FRP, FI or
the Partnership described in paragraph (g) or (h) of this
Section, all sums then owing by the Borrower under the
Promissory Notes or otherwise owing hereunder shall, without
any declaration or other action by any Bank or the Agents
hereunder, be immediately due and payable and all
Commitments hereunder shall be immediately terminated
without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived by the Borrower,
anything contained herein, in any other Loan Document or in
any other Intercreditor Document to the contrary
notwithstanding and the Administrative Agent may, and at the
request of the Required Banks shall, exercise any or all of
the remedies then available under the Security Agreements.
Promptly following the making of any such declaration, the
Administrative Agent shall give notice thereof to the
Borrower but failure to do so shall not impair, under any
circumstances, the effect of such declaration.
ARTICLE VII
FTX Undertaking
Section 7.1. FTX Undertaking. In addition to and not
in derogation from its obligations under the FTX Guaranty,
FTX hereby agrees that it shall be jointly and severally
liable with the Borrower for each of the Partnership
Obligations (other than principal and interest on the Loans,
with respect to which FTX has guaranteed a certain amount
thereof with respect to the Loans pursuant to the FTX
Guaranty). FTX agrees that it shall pay on demand any such
Partnership Obligations for which it is liable pursuant to
this Section 7.1 which has remained unpaid by the Borrower
for five Business Days after such amount is due or demanded
from the Borrower; provided that if an event referred to in
Section 6.1(g) or (h) has occurred with respect to the
Borrower, such amounts shall be payable on demand by FTX
without the necessity of any demand on the Borrower. The
obligations of FTX under this Section 7.1 shall be deemed to
be a guarantee of payment and not of collection. Upon
payment by FTX of any sums to a Bank or an Agent as provided
above in this Section 7.1, all rights of FTX against the
Partnership arising as a result thereof by way of right of
subrogation or otherwise shall in all respects be
subordinated and junior in right of payment to the prior
payment in full of all the Partnership Obligations to the
Banks and the Agents and shall not be exercised by FTX prior
to payment in full of all Partnership Obligations and
termination of the Commitments. If any amount shall be paid
to FTX on account of any amount paid by FTX pursuant to this
guarantee or otherwise at any time when all the Partnership
Obligations shall not be paid in full, such amount shall be
held in trust by FTX for the benefit of the Agent, and the
Banks and shall forthwith be paid to the Administrative
Agent to be credited and applied to the Partnership
Obligations, whether matured or unmatured. At such time as
all Partnership Obligations owing to such bank have been
paid in full and its Commitment terminated, each Bank shall,
in a reasonable manner, assign (subject to the continued
effectiveness and the reinstatement provided for above) the
amount of the Partnership Obligations owed to it and paid by
FTX pursuant to this Section 7.1 to FTX, such assignment to
be pro tanto to the extent to which the Partnership
Obligations in question were discharged by FTX, or make such
other disposition thereof as FTX shall reasonably direct
(all without any representation or warranty by, or any
recourse to, such Bank).
ARTICLE VIII
The Agents
SECTION 8.1. The Agents. (a) For convenience of
administration and to expedite the transactions contemplated
by this Agreement, Chemical is hereby appointed as
Administrative Agent, FTX Collateral Agent and FCX
Collateral Agent for the Banks under this Agreement and the
Security Agreements and Chase is hereby appointed as the
Documentary Agent for the Banks under this Agreement. None
of the Agents shall have any duties or responsibilities with
respect hereto except those expressly set forth herein.
Each Bank, and each subsequent holder of any Promissory Note
by its acceptance thereof, hereby irrevocably appoints and
expressly authorizes the Agents, without hereby limiting any
implied authority, to take such action as the Agents may
deem appropriate on its behalf and to exercise such powers
under this Agreement as are specifically delegated to such
Person by the terms hereof, together with such powers as are
reasonably incidental thereto. The Administrative Agent is
hereby expressly authorized by the Banks, without hereby
limiting any implied authority, (a) to receive on behalf of
the Banks all payments of principal of and interest on the
Loans and all other amounts due to the Banks hereunder, and
promptly to distribute to each Bank its proper share of each
payment so received; (b) to give notice on behalf of each of
the Banks to the Borrower of any Event of Default specified
in this Agreement of which the Administrative Agent has
actual knowledge acquired in connection with its agency
hereunder; and (c) to distribute to each Bank copies of all
notices, financial statements and other materials delivered
by the Borrower pursuant to this Agreement as received by
the Administrative Agent. Without limiting the generality
of the foregoing, the Collateral Agents are hereby expressly
authorized to execute any and all documents (including
releases) with respect to the Collateral and the rights of
the secured parties with respect thereto, as contemplated by
and in accordance with the provisions of this Agreement and
the Security Agreements. Each of the Agents may exercise
any of its duties hereunder by or through their respective
agents, officers or employees. In addition, each Bank
hereby irrevocably authorizes and directs each Collateral
Agent to enter, on behalf of each of them, into the
respective Intercreditor Agreement and Security Agreements
as contemplated pursuant to this Agreement.
(b) None of the Agents or any of their respective
directors, officers, agents or employees shall be liable as
such for any action taken or omitted to be taken by any of
them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document
delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance
or observance by the Borrower or any other party of any of
the terms, conditions, covenants or agreements contained in
any Loan Document. The Agents shall not be responsible to
the Banks or the holders of the Notes for the due execution,
genuineness, validity, enforceability or effectiveness of
this Agreement, the Notes or any other Loan Documents or
other instruments or agreements. The Administrative Agent
may deem and treat the payee of any Promissory Note as the
owner thereof for all purposes hereof until it shall have
received from the payee of such Promissory Note notice,
given as provided herein, of the transfer thereof in
compliance with Section 9.3. The Agents shall in all cases
be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required
Banks and, except as otherwise specifically provided herein,
such instructions and any action or inaction pursuant
thereto shall be binding on all the Banks and each
subsequent holder of any Promissory Note. Each Agent shall,
in the absence of knowledge to the contrary, be entitled to
rely on any instrument or document believed by it in good
faith to be genuine and correct and to have been signed or
sent by the proper Person or Persons. None of the Agents
nor any of their respective directors, officers, employees
or agents shall have any responsibility to the Borrower or
any other party on account of the failure of or delay in
performance or breach by any Bank of any of its obligations
hereunder or to any Bank on account of the failure of or
delay in performance or breach by any other Bank or the
Borrower or any other party of any of their respective
obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each of the Agents may
execute any and all duties hereunder by or through agents or
employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action
taken or suffered in good faith by it in accordance with the
advice of such counsel. The Banks hereby acknowledge that
none of the Agents shall be under any duty to take any
discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement unless it shall be
requested in writing to do so by the Required Banks.
(c) To the extent that any Agent shall not be
reimbursed by the Borrower for any costs, liabilities or
expenses incurred in such capacity, each Bank agrees (i) to
reimburse the Agents, on demand (in the amount of its
Applicable Percentage hereunder) of any expenses incurred
for the benefit of the Banks by the Agents, including
counsel fees and compensation of agents and employees paid
for services rendered on behalf of the Banks and (ii) to
indemnify and hold harmless each Agent and any of its
directors, officers, employees or agents, on demand, in the
amount of such Applicable Percentage, from and against any
and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against it in its
capacity as Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or
any action taken or omitted by it or any of them under this
Agreement or any other Loan Document; provided, however,
that no Bank shall be liable to an Agent for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or wilful misconduct of
such Agent or of its directors, officers, employees or
agents.
(d) With respect to the Loans made by it hereunder and
the Promissory Notes issued to it, each Agent in its
individual capacity and not as Agent shall have the same
rights and powers as any other Bank and may exercise the
same as though it were not an Agent, and the Agents and
their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower
or any Subsidiary or other Affiliate thereof as if it were
not an Agent.
(e) Subject to the appointment and acceptance of a
successor Agent as provided below, any Agent may resign at
any time by giving written notice thereof to the Banks and
the Borrower. Upon any such resignation, the Required Banks
shall have the right to appoint, and the Borrower shall have
the right to approve (such approval not to be unreasonably
withheld or delayed) a successor Administrative Agent,
Collateral Agent or Documentary Agent, as the case may be.
If no successor Agent, Collateral Agent or Documentary
Agent, as the case may be, shall have been so appointed and
approved and shall have accepted such appointment, within
30 days after the retiring Agent's giving of notice of
resignation, then the retiring Person may, on behalf of the
Banks, appoint a successor Administrative Agent, Collateral
Agent or Documentary Agent, as the case may be, which shall
be a Bank with an office in New York, New York, having a
combined capital and surplus of at least $500,000,000 or an
Affiliate of any such Bank. Upon the acceptance of any
appointment as Administrative Agent, Collateral Agent or
Documentary Agent hereunder by a successor Administrative
Agent, Collateral Agent or Documentary Agent, as the case
may be, such successor Administrative Agent, Collateral
Agent or Documentary Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall
be discharged from its duties and obligations hereunder.
After any such retiring Agent's resignation hereunder as
Administrative Agent, Collateral Agent or Documentary Agent,
as applicable, the provisions of this Article VIII and
Section 9.4 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was acting as
the Administrative Agent, Collateral Agent or Documentary
Agent, as applicable.
(f) The Administrative Agent and the Documentary Agent
shall be responsible for supervising the preparation,
execution and delivery of this Agreement and the other
agreements and instruments contemplated hereby, any
amendment or modification thereto and the closing of the
transactions contemplated hereby and thereby. In addition,
the Administrative Agent shall assist each Collateral Agent
in the performance of its duties as may be reasonably
requested by such Collateral Agent from time to time.
(g) The obligations of the Administrative Agent, each
Collateral Agent and the Documentary Agent shall be separate
and several and neither of them shall be responsible or
liable for the acts or omissions of the other, except, to
the extent that a Bank serves in more than one agent
capacity, such Bank shall be responsible for the acts and
omissions relating to each such agency function.
(h) Without the prior written consent of the Required
Banks, the Administrative Agent and each Collateral Agent
will not consent to any modification, supplement or waiver
of any Intercreditor Agreement or, except to the extent
required by an Intercreditor Agreement, the related Security
Agreement.
(i) Each Bank acknowledges that it has, independently
and without reliance upon the Agents or any other Bank and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Bank also acknowledges that
it will, independently and without reliance upon the Agents
or any other Bank and based on such documents and informa-
tion as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking
action under or based upon this Agreement or any other Loan
Document, any related agreement or any document furnished
hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.1. Notices. Notices and other
communications provided for herein shall be in writing and
shall be delivered by hand or overnight or same day courier
service or mailed or sent by telex, telecopy, graphic
scanning or other telegraphic communications equipment of
the sending party to the appropriate party's address set
forth on the signature pages hereof; provided that notices
by or to the Borrower may be given by or to FTX as its
general partner. All notices and other communications given
to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the
date of receipt if hand delivered or delivered by any
telecopy, telegraphic or telex communications equipment or
three days after being sent by registered or certified mail,
postage prepaid, return receipt requested, in each case
addressed to such party as provided in this Section 9.1 or
in accordance with the latest unrevoked direction from such
party.
SECTION 9.2. Survival of Agreement. All covenants,
agreements, representations and warranties made by the
Borrower or the Guarantors herein and in the certificates or
other instruments prepared or delivered in connection with
this Agreement or any other Loan Document shall be
considered to have been relied upon by the Banks and the
Agents and shall survive the making by the Banks of the
Loans and the execution and delivery to the Banks of the
Promissory Notes evidencing such Loans regardless of any
investigation made by the Banks or on their behalf, and
shall continue in full force and effect as long as the
principal of or any accrued interest on any Note, any
Commitment Fee or any other fee or amount payable under the
Loan Documents is outstanding and unpaid and so long as the
Commitments have not been terminated.
SECTION 9.3. Successors and Assigns; Participation;
Purchasing Banks. (a) This Agreement shall be binding upon
and inure to the benefit of the Borrower, FTX, FCX, the
Banks, the Agents, all future holders of the Promissory
Notes, and their respective successors and assigns, except
that none of the Borrower, FTX nor FCX may assign, delegate
or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Bank.
Any Bank may at any time pledge or assign all or any portion
of its rights under this Agreement and the Promissory Notes
issued to it to a Federal Reserve Bank to secure extensions
of credit by such Federal Reserve Bank to such Bank;
provided that no such pledge or assignment shall release a
Bank from any of its obligations hereunder or substitute any
such Federal Reserve Bank for such Bank as a party hereto.
(b) Any Bank may, in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in all or a portion
of any Loan owing to such Bank, any Promissory Note held by
such Bank, any Commitment of such Bank or any other interest
of such Bank hereunder. In the event of any such sale by a
Bank of participating interests to a Participant, such
Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, such
Bank shall remain the holder of any such Promissory Note for
all purposes under this Agreement and the Borrower and the
Agents shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations
under this Agreement. The Borrower agree that if amounts
outstanding under this Agreement and the Promissory Notes
are due and unpaid, or shall have been declared due or shall
have become due and payable upon the occurrence of an Event
of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in
amounts owing under this Agreement and any Promissory Note
to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under this
Agreement or any Promissory Note; provided that such right
of setoff shall be subject to the obligation of such
Participant to share with the Banks, and the Banks agree to
share with such Participant, as provided in Section 2.15.
The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.11, 2.12, 2.13, 2.15,
2.17 and 9.5 with respect to its participation in the
Commitments and the Loans outstanding from time to time as
if it were a Bank; provided that no Participant shall be
entitled to receive any greater payment pursuant to such
Sections than the transferor Bank would have been entitled
to receive in respect of the amount of the participation
transferred by such transferor Bank to such Participant
unless such participation shall have been made at a time
when the circumstances giving rise to such greater payment
did not exist; and provided that the voting rights of any
Participant would be limited to amendments, modifications or
waivers decreasing any fees payable hereunder or the amount
of principal of or the rate at which interest is payable on
the Loans, extending any scheduled principal payment date or
date fixed for the payment of interest on the Loans,
changing or extending the Commitments or release of all or
substantially all the collateral for the Loans.
(c) Any Bank may, in accordance with applicable law
and subject to Section 9.3(h), at any time assign by
novation all or any part of its rights and obligations under
this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it and the Promissory
Notes held by it) (I) to any Bank or any Affiliate thereof,
without the Borrower's consent, or (II) to one or more
additional banks or financial institutions (any such entity
referred to in clause (I) or (II) being a "Purchasing Bank")
with the consent of the Administrative Agent and the
Borrower, such consent not to be unreasonably withheld (it
being understood that the Borrower may withhold its consent
to a Purchasing Bank (i) which is not a commercial bank or
savings and loan institution or (ii) which would, as of the
effective date of such assignment, be entitled to claim
compensation under Section 2.11 which the transferor Bank
would not be entitled to claim as of such date), pursuant to
a Commitment Transfer Supplement in the form of Exhibit D,
executed by such Purchasing Bank and such transferor Bank
(and, in the case of a Purchasing Bank that is not then a
Bank or an Affiliate thereof, by the Borrower and the
Administrative Agent), and delivered for its recording in
the Register to the Administrative Agent, together with the
Promissory Notes subject to such assignment, the
registration and processing fee required by Section 9.3(e)
and an Administrative Questionnaire for the Purchasing Bank
if it is not already a Bank. Assignments shall be by
novation. Upon such execution, delivery and recording (and,
if required, consent of the Borrower and the Administrative
Agent), from and after the Transfer Effective Date
determined pursuant to such Commitment Transfer Supplement
(which shall be at least five days after the execution and
delivery thereof), (x) the Purchasing Bank thereunder shall
(if not already a party hereto) be a party hereto and have
the rights and obligations of a Bank hereunder with a
Commitment as set forth in such Commitment Transfer
Supplement, and (y) the transferor Bank thereunder shall, to
the extent assigned by such Commitment Transfer Supplement,
be released from its obligations under this Agreement (and,
in the case of a Commitment Transfer Supplement covering all
or the remaining portion of a transferor Bank's rights and
obligations under this Agreement, such transferor Bank shall
cease to be a party hereto). Such Commitment Transfer
Supplement shall be deemed to amend this Agreement
(including Schedule II hereto) to the extent, and only to
the extent, necessary to reflect the addition of such
Purchasing Bank (if not already a party hereto) and the
resulting adjustment of Applicable Percentages arising from
the purchase by such Purchasing Bank of all or a portion of
the rights and obligations of such transferor Bank under
this Agreement and the Promissory Notes. On or prior to the
Transfer Effective Date determined pursuant to such
Commitment Transfer Supplement, the Borrower, at its own
expense, shall execute and deliver to the Administrative
Agent in exchange for the surrendered Promissory Note a new
Promissory Note to the order of such Purchasing Bank in an
amount equal to the Commitment assumed by it pursuant to
such Commitment Transfer Supplement and, if the transferor
Bank has retained a Commitment hereunder, a new Promissory
Note to the order of the transferor Bank in an amount equal
to the Commitment retained by it hereunder. Such new
Promissory Notes shall be dated the Closing Date and shall
otherwise be in the form of the Promissory Notes replaced
thereby. The Promissory Notes surrendered by the transferor
Bank shall be returned by the Administrative Agent to the
Borrower marked "canceled".
(d) The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at one
of its offices in The City of New York a copy of each
Commitment Transfer Supplement delivered to it and a
register (the "Register") for the recordation of the names
and addresses of the Banks and the Commitment of, and
principal amount of the Loans owing to, each Bank from time
to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the parties hereto may
treat each Person whose name is recorded in the Register as
the owner of the Loan recorded therein for all purposes of
this Agreement. The Register shall be available for
inspection by the parties hereto at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer
Supplement executed by a transferor Bank and a Purchasing
Bank (and, in the case of a Purchasing Bank that is not then
a Bank or an affiliate thereof, by the Borrower and the
Administrative Agent) together with payment to the
Administrative Agent of a registration and processing fee of
$3,500, the Administrative Agent shall (i) promptly accept
such Commitment Transfer Supplement and (ii) on the Transfer
Effective Date determined pursuant thereto record the
information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and
the Borrower.
(f) Subject to Section 9.15, the Borrower and the
Guarantors authorizes each Bank to disclose to any
Participant or Purchasing Bank (each, a "Transferee") and
any prospective Transferee any and all financial and other
information in such Bank's possession concerning the
Guarantors, the Borrower and their Affiliates which has been
delivered to such Bank by or on behalf of the Borrower
pursuant to this Agreement or which has been delivered to
such Bank by or on behalf of the Borrower in connection with
such Bank's credit evaluation of the Borrower, the
Guarantors and their Affiliates prior to becoming a party to
this Agreement.
(g) If, pursuant to this Section 9.3, any interest in
this Agreement or any Promissory Note is transferred to any
Transferee which is organized under the laws of any
jurisdiction other than the United States or any State
thereof, the transferor Bank (x) shall immediately notify
the Administrative Agent of such transfer, describing the
terms thereof and indicating the identity and country of
residence of each Transferee. Such transferor Bank or
Transferee shall indemnify and hold harmless the Borrower
and the Administrative Agent from and against any tax,
interest, penalty or other expense that the Borrower and the
Administrative Agent may incur as a consequence of any
failure to withhold applicable United States taxes because
of any transfer or participation arrangement that is not
fully disclosed to them as required hereunder.
(h) By executing and delivering a Commitment Transfer
Supplement, the transferor Bank thereunder and the
Purchasing Bank thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as
follows: (i) such transferor Bank warrants that it is the
legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim and that its
Commitment, and the outstanding balance of its Loans, in
each case without giving effect to assignments thereof which
have not become effective, are as set forth in such
Commitment Transfer Supplement, (ii) except as set forth in
(i) above, such transferor Bank makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value
of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto, or the
financial condition of the Borrower or any Subsidiary or the
performance or observance by the Guarantors, the Borrower or
any Subsidiary of any of its obligations under this
Agreement, any other Loan Document or any other instrument
or document furnished pursuant hereto; (iii) such Purchasing
Bank represents and warrants that it is legally authorized
to enter into such Commitment Transfer Supplement; (iv) such
Purchasing Bank confirms that it has received a copy of this
Agreement, together with copies of the most recent financial
statements, if any, delivered pursuant to Section 5.1 and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Commitment Transfer Supplement; (v) such
Purchasing Bank will independently and without reliance upon
the Agents, such transferor Bank or any other Bank and based
on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this
Agreement; (vi) such Purchasing Bank appoints and authorizes
the Agents to take such action as agent on its behalf and to
exercise such respective powers under this Agreement and the
other Loan Documents as are delegated to the Agents by the
terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such Purchasing Bank agrees
that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are
required to be performed by it as a Bank.
SECTION 9.4. Expenses of the Banks; Indemnity.
(a) The Borrower and FTX, jointly and severally, agree to
pay all out-of-pocket expenses reasonably incurred by the
Agents in connection with the preparation and administration
of this Agreement, the Promissory Notes and the other Loan
Documents or with any amendments, modifications or waivers
of the provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated) or
reasonably incurred by the Agents or any Bank in connection
with the enforcement or protection of their rights in
connection with this Agreement and the other Loan Documents
or with the Loans made or the Promissory Notes issued
hereunder (whether through negotiations, legal proceedings
or otherwise), including, but not limited to, the reasonable
fees and disbursements of Cravath, Swaine & Moore, special
counsel for the Agents, and, in connection with such
enforcement or protection, the reasonable fees and
disbursements of other counsel for any Bank. The Borrower
and FTX, jointly and severally, further agree that they
shall indemnify the Banks and the Agents from and hold them
harmless against any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the
execution and delivery of or in connection with the
performance of this Agreement, any of the Promissory Notes
or any of the other Loan Documents. Further, the Borrower
and FTX, jointly and severally, agree to pay, and to
protect, indemnify and save harmless each Bank, each Agent
and each of their respective officers, directors,
shareholders, employees, agents and servants from and
against, any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments,
demands, damages, costs or expenses (including, without
limitation, attorneys' fees and expenses) in connection with
any investigative, administrative or judicial proceeding,
whether or not such Bank or Agent shall be designated a
party thereto of any nature arising from or relating to (i)
the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the
transactions contemplated hereby and thereby (including the
Restructuring) or (ii) the use of the proceeds of the Loans;
and the Borrower also agrees to pay, and to protect,
indemnify and save harmless each Bank, each Agent and each
of their respective officers, directors, shareholders,
employees, agents and servants from and against, any and all
losses, liabilities (including liabilities for penalties),
actions, suits, judgments, demands, damages, costs or
expenses (including, without limitation, attorneys' fees and
expenses in connection with any investigative,
administrative or judicial proceeding, whether or not such
Bank or Agent shall be designated a party thereto) of any
nature arising from or relating to any actual or alleged
presence or Release of Hazardous Materials on any property
owned or operated by the Borrower or any of the
Subsidiaries, or any Environmental Claim related in any way
to the Borrower or the Subsidiaries or arising from or in
connection with the environmental due diligence summary
memorandum referred to in paragraph (m) of Article IV of the
FTX Credit Agreement; provided that any such indemnity
referred to in this sentence shall not, as to any
indemnified Person, be available to the extent that such
losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and
non appealable judgment to have resulted from the gross
negligence or wilful misconduct of such indemnified Person.
If any action, suit or proceeding arising from any of the
foregoing is brought against any Bank, Agent or other Person
indemnified or intended to be indemnified pursuant to this
Section 9.4, the Borrower and FTX, jointly and severally, to
the extent and in the manner directed by such indemnified
party, will resist and defend such action, suit or
proceeding or cause the same to be resisted and defended by
counsel designated by the Borrower (which counsel shall be
satisfactory to such Bank, Agent or other Person indemnified
or intended to be indemnified). If the Borrower or FTX
shall fail to do any act or thing which it has covenanted to
do hereunder or any representation or warranty on the part
of the Borrower, FTX or FCX contained in this Agreement
shall be breached, any Bank or Agent may (but shall not be
obligated to) do the same or cause it to be done or remedy
any such breach, and may expend its funds for such purpose.
Any and all amounts so expended by any Bank or Agent shall
be repayable to it by the Borrower and FTX, jointly and
severally, immediately upon such Bank's or such Agent's
demand therefor.
(b) The provisions of this Section 9.4 shall remain
operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation
of the transactions contemplated hereby or thereby, the
repayment of any of the Loans or any Promissory Notes, the
invalidity or unenforceability of any term or provision of
this Agreement, any other Loan Document or any Promissory
Note, or any investigation made by or on behalf of any Bank
or any Agent. All amounts due under this Section 9.4 shall
be payable on written demand therefor.
SECTION 9.5. Right of Setoff. If an Event of Default
shall have occurred and be continuing and the Loans shall
have been accelerated or any Bank shall have requested the
Administrative Agent to declare the Loans immediately due
and payable pursuant to Article VI, then each Bank is hereby
authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time
owing by such Bank to or for the credit or the account of
the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement and
the Promissory Notes held by such Bank, irrespective of
whether or not such Bank shall have made any demand under
this Agreement or such Promissory Notes and although such
obligations may be unmatured. Each Bank agrees promptly to
notify the Borrower after any such setoff and application
made by such Bank, but the failure to give such notice shall
not affect the validity of such setoff and application. The
rights of each Bank under this Section 9.5 are in addition
to other rights and remedies (including, without limitation,
other rights of setoff) which such Bank may have.
SECTION 9.6. APPLICABLE LAW. THIS AGREEMENT AND THE
PROMISSORY NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.7. Waivers; Amendments. (a) No failure or
delay of any Bank or Agent in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The
rights and remedies of the Banks and the Agents hereunder
and under the other documents and agreements entered into in
connection herewith are cumulative and not exclusive of any
rights or remedies which they would otherwise have. No
waiver of any provision of this Agreement, any other Loan
Document or any Promissory Note or any other such document
or agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same
shall be authorized as provided in paragraph (b) below, and
then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No
notice or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in
similar or other circumstances. Each holder of any of the
Promissory Notes shall be bound by any amendment,
modification, waiver or consent authorized as provided
herein, whether or not such Promissory Note shall have been
marked to indicate such amendment, modification, waiver or
consent.
(b) Neither this Agreement nor any provision hereof
may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the
Borrower and the Required Banks; provided, however, that no
such agreement shall (i) change the principal amount of, or
extend or advance the maturity of or any date for the
payment (other than pursuant to Section 2.7(b), which may be
amended by the Required Banks) of any principal of or
interest on, any Promissory Note (including, without
limitation, any such payment pursuant to Section 2.7(c) or
paragraph (a) or (b) of Section 2.9), or waive or excuse any
such payment or any part thereof, or change the rate of
interest on any Promissory Note, without the written consent
of each holder affected thereby, (ii) change or extend the
Commitment of any Bank without the written consent of such
Bank, or change any fees to be paid to any Bank or Agent
hereunder without the written consent of such Bank or the
Agent, as applicable, (iii) amend or modify the provisions
of this Section 9.7, Sections 2.8 through 2.15 or
Section 9.4 or the definition of "Required Banks", without
the written consent of each Bank or (iv) release the
collateral granted as security under the Security Agreements
(except as expressly required hereby or thereby), without
the written consent of each Bank; and provided further that
no such agreement shall amend, modify or otherwise affect
the rights or duties of an Agent hereunder without the
written consent of such Agent. Each Bank and holder of any
Promissory Note shall be bound by any modification or
amendment authorized by this Section 9.7 regardless of
whether its Promissory Notes shall be marked to make
reference thereto, and any consent by any Bank or holder of
a Promissory Note pursuant to this Section shall bind any
Person subsequently acquiring a Promissory Note from it,
whether or not such Promissory Note shall be so marked.
SECTION 9.8. Severability. In the event any one or
more of the provisions contained in this Agreement or in the
Promissory Notes should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
or therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
SECTION 9.9. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become
effective when copies hereof which, when taken together,
bear the signatures of each of the parties hereto shall be
delivered or mailed to the Administrative Agent and the
Borrower.
SECTION 9.10. Headings. Article and Section headings
and the Table of Contents used herein are for convenience of
reference only and are not to affect the construction of, or
to be taken into consideration in interpreting, this
Agreement.
SECTION 9.11. Entire Agreement. This Agreement, the
other Loan Documents, the fee letters between the Agents and
the Borrower and the exhibits and schedules hereto contain
the entire agreement among the parties hereto with respect
to the Loans and the related transactions. Any previous
agreement among the parties with respect to the subject
matter hereof is superseded by this Agreement, such fee
letters and the other Loan Documents. Nothing in this
Agreement or in the other Loan Documents, expressed or
implied, is intended to confer upon any party other than the
parties hereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the
other Loan Documents.
SECTION 9.12. WAIVER OF JURY TRIAL, ETC. (A) EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.12.
(b) Except as prohibited by law, each party hereto
hereby waives any right it may have to claim or recover in
any litigation referred to in paragraph (a) of this
Section 9.12 any special, indirect, exemplary, punitive or
consequential damages or any damages other than, or in
addition to, actual damages.
(c) Each party hereto (i) certifies that no
representative, agent or attorney of any Bank has
represented, expressly or otherwise, that such Bank would
not, in the event of litigation, seek to enforce the
foregoing waivers and (ii) acknowledges that it has been
induced to enter into this Agreement or any other document,
as applicable, by, among other things, the mutual waivers
and certifications herein.
SECTION 9.13. Interest Rate Limitation.
Notwithstanding anything herein or in the Promissory Notes
to the contrary, if at any time the interest rate applicable
to any Loan, together with all fees, charges and other
amounts which are treated as interest on such Loan under
applicable law (collectively the "Charges"), as provided for
herein or in any other document executed in connection
herewith, or otherwise contracted for, charged, received,
taken or reserved by any Bank, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted
for, charged, taken, received or reserved by such Bank in
accordance with applicable law, the rate of interest in
respect of such Loan hereunder or payable under the
Promissory Note held by such Bank, together with all Charges
payable to such Bank, shall be limited to the Maximum Rate
and, to the extent lawful, the interest and Charges that
would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section 9.13
shall be cumulated and the interest and Charges payable to
such Bank in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until
such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall
have been received by such Bank.
SECTION 9.14. JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (A) THE BORROWER, FTX AND FCX EACH HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK
STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA
SITTING IN NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT,
AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN
SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY
BANK OR AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY AGAINST THE BORROWER OR ITS PROPERTIES
IN THE COURTS OF ANY JURISDICTION.
(B) THE BORROWER, FTX AND FCX EACH HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY
LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY NEW
YORK STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(C) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS
TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 9.1. NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
SECTION 9.15. Confidentiality. Each Bank agrees
(which agreement shall survive the termination of this
Agreement) that financial information, information from the
Borrower's and its Subsidiaries' books and records,
information concerning the Borrower's and its Subsidiaries'
trade secrets and patents and any other information received
from the Borrower and its Subsidiaries hereunder shall be
treated as confidential by such Bank, and each Bank agrees
to use its best efforts to ensure that such information is
not published, disclosed or otherwise divulged to anyone
other than employees or officers of such Bank and its
counsel and agents; provided that it is understood that the
foregoing shall not apply to:
(i) disclosure made with the prior written
authorization of the Borrower or FTX;
(ii) disclosure of information (other than that received
from the Borrower and its Subsidiaries, FTX or FCX prior
to or under this Agreement) already known by, or in the
possession of, such Bank without restrictions on the
disclosure thereof at the time such information is
supplied to such Bank by the Borrower or its Subsidiaries,
FTX or FCX hereunder;
(iii) disclosure of information which is required by
applicable law or to a governmental agency having
supervisory or regulatory authority over any party hereto;
(iv) disclosure of information in connection with any
suit, action or proceeding in connection with the
enforcement of rights hereunder or in connection with the
transaction contemplated hereby or thereby;
(v) disclosure to any bank (or other financial
institution) which may acquire a participation or other
interest in the Loans or rights of any Bank hereunder;
provided that such bank (or other financial institution)
agrees to maintain any such information to be received in
accordance with the provisions of this Section 9.15;
(vi) disclosure by any party hereto to any other party
hereto or their counsel or agents;
(vii) disclosure by any party hereto to any entity, or to
any subsidiary of such an entity, which owns, directly or
indirectly, more than 50% of the voting stock of such
party, or to any subsidiary of such an entity; or
(viii) disclosure of information that prior to such
disclosure has become public knowledge through no
violation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above
written.
FM PROPERTIES OPERATING CO.,
by FREEPORT-McMoRan INC.,
its Managing General Partner,
by /s/ R. Foster Duncan
______________________________
Name: R. Foster Duncan
Title: Treasurer
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: R. Foster Duncan
Treasurer
Telephone: 504-582-4628
Telecopy: 504-582-4511
FREEPORT-McMoRan INC.,
by /s/ R. Foster Duncan
______________________________
Name: R. Foster Duncan
Title: Treasurer
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: R. Foster Duncan
Treasurer
Telex: 8109515386
Telephone: 504-582-4628
Telecopy: 504-582-4511
FREEPORT-McMoRan COPPER & GOLD INC.,
by /s/ R. Foster Duncan
______________________________
Name: R. Foster Duncan
Title: Treasurer
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: R. Foster Duncan
Treasurer
Telex: 8109515386
Telephone: 504-582-4628
Telecopy: 504-582-4511
CHEMICAL BANK, individually and as
Administrative Agent, FTX Collateral
Agent, FM Collateral Agent and FRP
Collateral Agent
by /s/ R. Potter
______________________________
Name: Ronald Potter
Title: Managing Director
Domestic Office and LIBOR Office
270 Park Avenue
New York, New York 10017
Attention: Ralph Iskander
Telephone: 212-270-3977
Telecopy: 212-270-4711
with a copy to
Attention: Stuart Miller
Telephone: 212-270-3235
Telecopy: 212-270-2625
with copies to:
Agent Bank Services
140 East 45th Street
New York, New York 10017
Attention: Hilma Gabbidon
Telephone: 212-622-0693
Telex: 353006 ABSCNYK
Telecopy: 212-622-0002
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), individually and as
Documentary Agent,
by /s/ Nicholas J. Chirekos
________________________________
Name: Nicholas J. Chirekos
Title: Vice President
DOMESTIC OFFICE AND LIBOR OFFICE:
One Chase Manhattan Plaza (4th Floor)
New York, NY 10081
Attention: Nicholas J. Chirekos
Vice President
Telephone: 212-552-2395
Telecopy: 212-552-7773
ADDRESS FOR NOTICES:
One Chase Manhattan Plaza (4th Floor)
New York, NY 10081
Attention: Vilma Francis
Assistant Treasurer
Telephone: 212-552-7883
Telecopy: 212-552-7175
CONFORMED COPY
FTX GUARANTY AGREEMENT
FTX GUARANTY AGREEMENT dated as of July 17, 1995 by
Freeport-McMoRan Inc., a Delaware corporation (including its
successors, "FTX").
WHEREAS in connection with the spin-off of Freeport-
McMoRan Copper & Gold Inc., a Delaware corporation ("FCX")
from FTX, each of FTX and FCX has agreed that it will
provide a partial guaranty of the FMPO Loans, the FMPO Notes
and the Circle C Notes (as hereinafter defined).
NOW THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, FTX agrees as
follows:
ARTICLE I
GUARANTY
SECTION 1.01 Definitions. The following terms, as
used herein, have the following meanings:
"Credit Documents" means (i) the FMPO Credit
Agreement dated as of June 30, 1995 (as the same may be
amended from time to time, the "FMPO Credit Agreement")
among FM Properties Operating Co., a Delaware general
partnership ("FMPO"), FTX, FCX, the banks listed on the
signature pages thereof, Chemical Bank, as administrative
agent thereunder and The Chase Manhattan Bank, as
documentary agent thereunder, (ii) the Second Amended and
Restated Note Agreement dated as of June 30, 1995 (as the
same may be amended from time to time, the "Pel-Tex Note
Agreement") among FMPO, FTX and FCX, as guarantors, Hibernia
National Bank, as agent and Hibernia National Bank and
Chemical Bank, as banks, and any notes issued thereunder
(the "FMPO Notes") and (iii) the Circle C Credit Agreement
dated as of February 6, 1992 between Circle C Land Corp., a
Texas corporation ("Circle C") and Texas Commerce Bank
National Association as amended by six amendments dated June
11, 1992, November 16, 1992, May 5, 1993, September 1, 1993,
February 2, 1994 and July 17, 1995 respectively (as the same
may be further amended from time to time, the "Circle C
Credit Agreement") and any note issued thereunder (each a
"Circle C Note") in each case as amended from time to time.
"FCX Guaranty" means the guarantee of FCX as set
forth in the FCX Guaranty Agreement dated as of July 17,
1995 by FCX.
"FCX Guaranty Limit" means $90,000,000 subject to
reduction pursuant to Section 2.02 of the FCX Guaranty
Agreement.
"FMPO Loan" means each Loan made under the FMPO
Credit Agreement.
"FMPO Obligations" means the principal of and
interest on each (i) FMPO Loan, (ii) FMPO Note and (iii)
Circle C Note; provided that in no event shall the aggregate
principal amount of the FMPO Loans exceed $50,000,000, the
aggregate principal amount of the FMPO Notes exceed
$68,000,000 (or any amount thereof once repaid be
reborrowed) or the aggregate principal amount of the Circle
C Notes exceed $40,811,428.
"FTX Basic Guaranty Limit" means $45,000,000 subject
to reduction pursuant to Section 2.02.
"FTX Excess Guaranty Limit" means $23,811,428
subject to reduction pursuant to Section 2.02.
"Pro Rata Share" means, as to the FMPO Loans, the
FMPO Notes and the Circle C Notes, the outstanding principal
amount of the FMPO Loans, the FMPO Notes or the Circle C
Notes, as the case may be, as a percentage of the aggregate
outstanding principal amount of the FMPO Loans, the FMPO
Notes and the Circle C Notes.
SECTION 1.02. The Guaranty. Subject to the
provisions of Article II, FTX hereby unconditionally and
irrevocably guarantees as a primary obligor and not merely
as a surety, the due and punctual payment when and as due
(whether at stated maturity, by notice of prepayment, upon
acceleration or otherwise) of the FMPO Obligations, and
subject to Section 2.03, FTX shall forthwith on demand pay
the amount not so paid at the place and in the manner
specified in the respective Credit Document. This Guaranty
is a guaranty of payment when due and not of collection.
FTX hereby waives presentment to, demand of payment from,
notice of intent to accelerate to, notice of acceleration
to, notice of protest and dishonor to, and protest to FMPO
or Circle C of any of the FMPO Obligations, and also waives
notice of acceptance of this Guaranty and notice of protest
for nonpayment.
SECTION 1.03. Guaranty Unconditional. Subject to
the provisions of Article II, the obligations of FTX
hereunder shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(i) any rescission, extension, renewal, settlement,
compromise, waiver or release in respect of any
obligation of FMPO or Circle C under the Credit
Documents, by operation of law or otherwise;
(ii) any modification or amendment of or supplement
to the Credit Documents;
(iii) any guarantee or any release, impairment,
non-perfection or invalidity of any direct or indirect
security for any obligation of FMPO or Circle C under the
Credit Documents;
(iv) any change in the corporate existence,
structure or ownership of FMPO or Circle C, or any
insolvency, bankruptcy, reorganization or other similar
proceeding affecting FMPO or Circle C or their respective
assets or any resulting release or discharge of any
obligation of FMPO or Circle C contained in the Credit
Documents;
(v) the existence of any claim, set-off or other
rights which FTX may have at any time against FMPO or
Circle C, any Agent, any Bank or any other corporation or
person, whether in connection herewith or any unrelated
transactions, provided subject to any subordination
agreements relating to any such claims, that nothing
herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to
or against FMPO or Circle C for any reason of the Credit
Documents, or any provision of applicable law or
regulation purporting to prohibit the payment by FMPO or
Circle C of the FMPO Obligations or any other amount
payable by FMPO or Circle C under the Credit Documents;
(vii) any other act or omission to act or delay of
any kind by FMPO or Circle C, any beneficiary of this
Guaranty or any other corporation or person or any other
circumstance whatsoever which might, but for the
provisions of this paragraph, constitute a legal or
equitable discharge of or defense to FTX's obligations
hereunder or to the FMPO Obligations;
(viii) any failure of any beneficiary of this
Guaranty to assert any claim or demand or to enforce any
right or remedy against FMPO or Circle C under the
provisions of the Credit Documents, the FCX Guaranty, any
other security document, any intercreditor document or
any other loan document; or
(ix) any failure of any beneficiary of this
Guaranty to exercise any right or remedy against any
other guarantor (including any subsidiary) of the FMPO
Obligations.
SECTION 1.04. Discharge Only Upon Payment In Full;
Reinstatement In Certain Circumstances. FTX's obligations
hereunder shall remain in full force and effect until the
earlier of the date on which (x) the commitments under the
Credit Documents shall have terminated and the FMPO
Obligations shall have been indefeasibly paid in full or (y)
indefeasible payments made hereunder with respect to
principal equal to the FTX Basic Guaranty Limit plus the FTX
Excess Guaranty Limit and all corresponding amounts of
interest have likewise been paid. If at any time any FMPO
Obligation is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization
of FMPO or Circle C or otherwise, FTX's obligations
hereunder with respect to such payment shall be reinstated
as though such payment had been due but not made at such
time.
SECTION 1.05. Waiver by the Guarantor. FTX
irrevocably waives acceptance hereof, presentment, demand,
protest, notice of intent to accelerate, notice of
acceleration and any notice not provided for herein, as well
as any requirement that at any time any action be taken by
any beneficiary of this Guaranty, corporation or person
against FMPO, Circle C or any other entity or person.
SECTION 1.06. Subrogation. Upon making any payment
with respect to FMPO or Circle C hereunder, FTX shall be
subrogated to the rights of the payee against FMPO or Circle
C with respect to such payment; provided that FTX shall not
enforce any payment by way of subrogation until all FMPO
Obligations and all other amounts payable by FMPO or Circle
C under the Credit Documents have been paid in full and all
commitments to lend thereunder have been terminated.
SECTION 1.07. Stay of Acceleration. If
acceleration of the time for payment of any FMPO Obligation
or any other amount payable by FMPO or Circle C under the
Credit Documents is stayed upon the insolvency, bankruptcy
or reorganization of FMPO or Circle C, all such amounts
otherwise subject to acceleration under the terms of the
Credit Documents shall nonetheless be payable by FTX
hereunder as if no such stay was in effect.
ARTICLE II
GUARANTY LIMIT
SECTION 2.01. Guaranty Limit. FTX shall be liable
under this Guaranty Agreement with respect to principal of
the FMPO Obligations for an amount equal to the FTX Basic
Guaranty Limit plus the FTX Excess Guaranty Limit and at any
time the amount to which the holders of the FMPO Loans, FMPO
Notes and Circle C Notes are entitled hereunder shall be
limited to their respective Pro Rata Shares of the FTX Basic
Guaranty Limit plus the FTX Excess Guaranty Limit, together
with interest accrued and unpaid thereon.
SECTION 2.02. Reduction of Guaranty Limit. Upon
indefeasible payment of any principal amount of the FMPO
Notes or, in the case of FMPO Loans or the Circle C Notes,
the permanent reduction of the commitments with respect
thereto (with corresponding repayment such that principal
amount does not exceed such reduced commitments) thereof,
(i) the FTX Excess Guaranty Limit shall be automatically
reduced by an amount equal to such payment on the FMPO Notes
or reduction in such commitments, (ii) if the FTX Excess
Guaranty Limit has been reduced to zero, the FCX Guaranty
Limit shall be automatically reduced by an amount equal to
such payment or reduction in commitments in excess of the
amount necessary to reduce the FTX Excess Guaranty Limit to
zero and (iii) if both the FTX Excess Guaranty Limit and the
FCX Guaranty Limit have been reduced to zero, the FTX Basic
Guaranty Limit shall be automatically reduced by an amount
equal to such payment or reduction in commitments in excess
of the amount necessary to reduce the FTX Excess Guaranty
Limit and the FCX Guaranty Limit to zero.
SECTION 2.03. Demand Made Last With Respect To FTX
Excess Guaranty Limit. Notwithstanding anything herein to
the contrary, so long as no Guarantor Default has occurred
and is continuing, no demand shall be made hereunder with
respect to the FTX Excess Guaranty Limit until (i) no amount
is available hereunder with respect to the FTX Basic
Guaranty Limit and (ii) no amount is available hereunder
with respect to the FCX Guaranty Limit. For purposes
hereof, a Guarantor Default means a default under subsection
7.1(a), (b), (g) or (h) of the Credit Agreement dated as of
June 30, 1995 among Freeport-McMoRan Resource Partners,
Limited Partnership, FTX, the banks party thereto, Chemical
Bank, as administrative agent and collateral agent and The
Chase Manhattan Bank, as documentary agent or subsection
7.1(a), (b), (g) or (h) of the Credit Agreement dated as of
June 30, 1995 among P.T. Indonesia Company, FCX, the banks
party thereto, First Trust, National Association, as FI
Trustee, Chemical Bank as Administrative Agent and as FCX
Collateral Agent, and the Chase Manhattan Bank (National
Association), as Documentary Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Corporate and Governmental
Authorization; No Contravention. FTX hereby represents and
warrants to the holders of the FMPO Obligations that the
execution, delivery and performance by FTX of this Guaranty
Agreement are within FTX's corporate powers, have been duly
authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental
body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-
laws of FTX or of any agreement, judgment, injunction,
order, decree or other instrument binding upon FTX and will
not cause or result in imposition of any lien on any asset
of FTX.
SECTION 3.02 Binding Effect. This Guaranty
Agreement constitutes a valid and binding agreement of FTX
enforceable in accordance with its terms. This Guaranty
Agreement shall inure to the benefit of present and future
holders of the FMPO Obligations.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01 Governing Law; Submission to
Jurisdiction. This Guaranty Agreement shall be governed by
and construed in accordance with the laws of the State of
New York. FTX hereby submits to the nonexclusive
jurisdiction of the United States District Court for the
Southern District of New York and of any New York State
court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Guaranty
Agreement. FTX irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in
an inconvenient forum.
SECTION 4.02 Waiver of Jury Trial. FTX hereby
irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or relating to this Guaranty
Agreement.
SECTION 4.03 No Waiver by Delay. No delay or
omission to exercise any right or power accruing under any
default, omission or failure of performance hereunder shall
impair any such right or power or shall be construed to be a
waiver thereof, but any such right or power may be exercised
from time to time and as often as may be deemed expedient.
SECTION 4.04 Notices. All notices, requests and
other communications shall be in writing (including
facsimile transmission or similar writing) and shall be
mailed or sent by the sending party to: (i) in the case of
FTX, at its address set forth on the signature page hereof
or as otherwise notified to the beneficiaries of this
Guaranty or (ii) in the case of any other party, at its
address provided for in the Credit Documents.
IN WITNESS WHEREOF, FTX has caused this Guaranty
Agreement to be duly executed by R. Foster Duncan,
Treasurer, as of the day and year first above written.
FREEPORT-McMoRan INC.
By: /s/ R. Foster Duncan
Name: R. Foster Duncan
Title:Treasurer
1615 Poydras Street
New Orleans, LA 70112
Attention: R. Foster Duncan
Treasurer
SECOND AMENDED AND RESTATED
NOTE AGREEMENT
AMONG
FM PROPERTIES OPERATING CO.
(as Borrower)
FREEPORT-McMoRan INC. and
FREEPORT-McMoRan COPPER & GOLD INC.
(as Guarantors)
AND
HIBERNIA NATIONAL BANK
and CHEMICAL BANK
(as Banks)
Originally Dated: December 31, 1985
Firstly Amended and Restated: as of June 11, 1992
Secondly Amended and Restated: as of June 30, 1995
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS............................... 3
1.1 Defined Terms................................... 3
1.2 Other Definitional Provisions................... 11
SECTION 2. SALE OF ASSETS........................... 11
2.1 Conveyances of the Assets....................... 11
2.2 Loan............................................ 11
SECTION 3. THE LOAN.................................. 11
3.1 Notes........................................... 11
3.2 Optional Prepayments............................ 12
3.3 Interest Rate and Payment Dates................. 12
3.4 Exculpation..................................... 13
3.5 Acknowledgment and Modification of Notes........ 14
SECTION 4. SECURITY.................................. 14
4.1 Security........................................ 14
4.2 Required Collateralization (FTX)................ 14
4.3 Required Collateralization (FCX)................ 15
SECTION 5. REPRESENTATIONS AND WARRANTIES............ 15
5.1 Partnership Existence; Compliance with Law...... 15
5.2 Partnership Power; Authorization; Enforceable
Obligations................................... 16
5.3 No Legal Bar.................................... 17
5.4 No Material Litigation.......................... 18
5.5 No Default...................................... 18
5.6 Title, etc...................................... 18
5.7 No Burdensome Restrictions...................... 19
5.8 Taxes........................................... 19
5.9 Federal Regulations............................. 19
5.10 ERISA........................................... 19
5.11 Investment Company Act.......................... 19
SECTION 6. CONDITIONS PRECEDENT...................... 19
6.1 Conditions to Effectiveness..................... 19
(a) Agreement.................................. 19
(b) First Amendment to Loan Participation
Agreement................................ 20
(c) Intercreditor Agreements, Guaranties
and Security Agreements.................. 20
(d) Credit Agreements.......................... 20
(e) FM Properties Partnership and Corporate
Proceedings.............................. 20
(f) FTX Corporate Proceedings.................. 20
(g) FCX Corporate Proceedings.................. 20
(h) Legal Opinions............................. 20
(i) No Default or Event of Default............. 21
(j) Additional Matters......................... 21
SECTION 7. AFFIRMATIVE COVENANTS..................... 21
7.1 Financial Statements............................ 21
7.2 Payment of Obligations.......................... 23
7.3 Notices; Reports................................ 23
SECTION 8. ADDITIONAL COVENANTS...................... 25
8.1 Covenants Incorporated by Reference from
FM Properties Credit Agreement................ 25
8.2 Covenants Incorporated by Reference from
FTX Credit Agreement.......................... 26
8.3 Covenants Incorporated by Reference from
FCX Credit Agreement.......................... 26
SECTION 9. EVENTS OF DEFAULT......................... 27
9.1 Event of Default................................ 27
9.2 Acceleration Payment............................ 30
SECTION 10. FTX GUARANTEE............................ 30
10.1 Guarantee by FTX................................. 30
SECTION 11. MISCELLANEOUS............................ 31
11.1 Notices......................................... 31
11.2 Amendments and Waivers.......................... 32
11.3 No Waiver; Cumulative Remedies.................. 33
11.4 Payment of Expenses and Taxes................... 33
11.5 The Agent....................................... 33
11.6 Survival of Representations and Warranties...... 34
11.7 Counterparts.................................... 34
11.8 Governing Law................................... 34
11.9 Binding Effect.................................. 34
SECOND AMENDED AND RESTATED NOTE AGREEMENT
SECOND AMENDED AND RESTATED NOTE AGREEMENT dated as of June
30, 1995 among FM Properties Operating Co., a Delaware general
partnership ("FM Properties"), Freeport-McMoRan Inc., a Delaware
corporation ("FTX"), FREEPORT-McMoRan COPPER & GOLD INC., a
Delaware corporation ("FCX") (FTX and FCX, the "Guarantors"),
HIBERNIA NATIONAL BANK, a national banking association
("Hibernia") and CHEMICAL BANK, a New York banking corporation
("Chemical") (Hibernia and Chemical, the "Banks"), and Hibernia,
as Agent for the Banks (the "Agent").
RECITALS
A. FMP Operating Company, a Limited Partnership
("Purchaser") and Pel-Tex Oil Company, Inc., Chenier Oil Company,
Inc., Burke and Pel-Tex Oil Company, Inc., d/b/a Burmont Company,
Fay Stouder Burke and Earl P. Burke, Jr. (collectively, the
"Sellers") executed a Note Agreement dated as of December 31,
1985, as amended by First Amendment to Note Agreement dated March
15, 1986, Second Amendment to Note Agreement dated March 28,
1990, Third Amendment to Note Agreement dated November 9, 1990
and Fourth Amendment to Note Agreement dated as of June 30, 1991
(collectively, the "Note Agreement") relating to the issuance by
Purchaser to the Sellers of promissory notes in the aggregate
principal sum of $74,000,000 due January 2, 1996.
B. Pursuant to a reorganization of Purchaser and
affiliated companies, Purchaser merged with and into a Delaware
limited partnership, which Delaware limited partnership merged
with and into Freeport-McMoRan Oil and Gas Company ("Old FMOG
Co.") (the "First Merger"). Old FMOG Co. succeeded to all of the
assets and liabilities of Purchaser.
C. Pursuant to a further reorganization (the "Second
Merger"), Old FMOG Co. merged with and into Freeport-McMoRan
Acquisition Company, a newly-formed wholly-owned subsidiary of
FTX which changed its name to Freeport-McMoRan Oil & Gas Company
("New FMOG Co."). New FMOG Co. succeeded to all of the assets
and liabilities of Old FMOG Co.
D. Pursuant to a further reorganization (the "Third
Merger"), New FMOG Co. merged with and into FTX. FTX succeeded
to all the assets and liabilities of New FMOG Co.
E. Pursuant to a further reorganization (the "FM
Transfer"), FTX transferred certain domestic oil and gas
properties and real estate properties held for development and
owned by FTX and its subsidiaries to FM Properties, in return for
which FM Properties assumed certain liabilities of FTX, including
liabilities and obligations under the Note Agreement. Because of
the FM Transfer, it was necessary to amend the Note Agreement in
certain respects, and because the Note Agreement had been amended
four times and was required to be amended once more, the parties
executed an Amended and Restated Note Agreement (the "First
Restated Note Agreement") reflecting all such amendments to date.
F. Pursuant to a further reorganization (the "FI
Collateralization"), P.T. Freeport Indonesia Company ("FI")
granted certain collateral to certain banks pursuant to a certain
Credit Agreement, dated as of June 1, 1993 among FI, FTX, FCX,
certain banks, and Morgan Guaranty Trust Company of New York and
Chemical as agents. Because of the FI Collateralization, it was
necessary to amend the First Restated Note Agreement, and the
Sellers, FM Properties, the Banks and the Agent executed a First
Amendment to Amended and Restated Note Agreement dated as June 1,
1993.
G. Pursuant to a Transfer of Notes and Release of
Indebtedness Agreement (the "FM Properties Transfer") among the
Sellers, FM Properties, FTX, and the Banks, dated as of May 5,
1995, (i) FM Properties prepaid the Notes in favor of the Sellers
in the principal amount of $6,000,000, (ii) the Sellers
transferred all of their right, title and interest in the Notes,
the First Restated Note Agreement (as amended) and all other
documents executed in connection therewith to the Banks, and
(iii) the Banks released and relieved the Sellers from any
further obligations in connection with the Notes, the First
Restated Note Agreement (as amended) and related documents so
that thereafter, the Banks became substituted for the Sellers
pursuant to the Notes, First Restated Note Agreement (as amended)
and related documents.
H. Pursuant to a further reorganization (the "FCX Spin
Off"), FTX will transfer to its shareholders all of the shares of
FCX owned by FTX, thereby leaving FTX as a holding company for
Freeport-McMoRan Resource Partners, Limited Partnership ("FRP")
and leaving FCX as a publicly-held holding company for FI. In
connection with the FCX Spin Off, FM Properties and FTX have
requested certain modifications to the First Restated Note
Agreement (as amended), including, without limitation: (i) an
extension of the maturity date of the Notes from January 2, 1996
to June 30, 1996; (ii) a change in the interest rate to LIBOR
plus 1.375% per annum beginning January 3, 1996; (iii) the
release of the Banks' rights to obtain a security interest in
assets of FM Properties; and (iv) the substitution of partial
guaranties by FTX and FCX for the existing guaranty of FTX
(100%). Because of the substantial changes required to be made
to accommodate the FCX Spin Off, the parties hereto wish to
execute a Second Amended and Restated Note Agreement (this
"Agreement").
NOW, THEREFORE, for the considerations originally recited in
the First Restated Note Agreement and otherwise recited herein,
FM Properties, FTX, FCX, the Banks and the Agent hereby agree to
further amend and restate the First Restated Note Agreement dated
as of June 30, 1995 (as amended), to read as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. The following terms shall have the
following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Agent" shall mean Hibernia National Bank as agent for
the Banks pursuant to this Credit Agreement.
"Agreement" shall mean this Second Amended and Restated
Note Agreement, as the same from time to time may be
amended, supplemented or modified.
"Banks" shall mean Hibernia and Chemical.
"Business Day" shall mean a day other than a Saturday,
Sunday or other day on which commercial banks in New York,
New York or New Orleans, Louisiana are authorized or
required by law to close.
"Capitalized Lease Obligation" means the obligation of
any Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or
personal property which obligation is, or in accordance with
GAAP (including Statement of Financial Accounting Standards
No. 13 of the Financial Accounting Standards Board) is
required to be, classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP, and for
purposes of this Agreement the amount of such obligation
shall be the capitalized amount thereof determined in
accordance with GAAP.
"Chemical" shall mean Chemical Bank, a New York banking
corporation.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commonly Controlled Entity" shall mean an entity,
whether or not incorporated, which is under common control
with FM Properties, FTX or FCX within the meaning of Section
414(b) or (c) of the Code.
"Company" shall mean FM Properties Inc., a Delaware
corporation, which has been organized as a wholly-owned
Subsidiary of FTX and which, as of the date hereof, holds a
99.8% general partnership interest in FM Properties.
"Contingent Obligation" shall mean with respect to any
Person, any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or obligation of any other
Person in any manner, whether directly or indirectly, and
including, without limitation, any agreement or obligation
(i) to pay dividends or other distributions upon the stock
of such other Person, or any obligation of such other
Person, direct or indirect, (ii) to purchase or pay (or
advance or supply funds for the purchase or payment of) such
Indebtedness or obligation or to purchase (or advance or
supply funds for the purchase of) any security for the
payment of such Indebtedness, obligation, dividend or
distribution, (iii) to purchase or lease property,
securities or services for the purpose of assuring the owner
of such Indebtedness or obligation or the holder of such
stock of the payment of such Indebtedness, obligation,
dividend or distribution including, without limitation, any
take-or-pay contract or agreement to buy a minimum amount or
quantity of production or to provide an operating subsidy
which, in each case, is utilized for a third party
financing, or (iv) to maintain working capital, equity
capital or any other financial statement condition of the
primary obligor, so as to enable the primary obligor to pay
such Indebtedness, obligation, dividend or distribution;
provided, however, that the term Contingent Obligation shall
not include any endorsement for collection or deposit in the
ordinary course of business.
"Contractual Obligation" shall mean as to any Person,
any provision of any security issued by such Person or of
any agreement, instrument or undertaking to which such
Person is a party or by which it is bound or to which any of
its property is subject.
"Default" shall mean any of the events specified in
Section 9, whether or not any requirement for the giving of
notice, the lapse of time, or both, or any other condition
specified therein, has been satisfied.
"Dollars" and "$" shall mean dollars in the lawful
currency of the United States of America.
"Effective Date" shall mean the date on which the FCX
Spin Off is consummated, provided that all of the other
conditions precedent contained in Section 6 hereof have also
been satisfied.
"ERISA" shall mean the Employees Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any trade or business
(whether or not incorporated), that together with the
Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section
302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.
"ERISA Event" means (i) any "Reportable Event" as
defined in Section 4043 of ERISA or the regulations issued
thereunder, with respect to a Plan; (ii) the adoption of any
amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code; (iii)
the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code),
whether or not waived; (iv) the incurrence of any liability
under Title IV of ERISA with respect to any Plan or
Multiemployer Plan, other than any liability for
contributions not yet due or payment of premiums not yet
due; (v) the receipt by the borrower or any ERISA affiliate
from the PBGC of any notice relating to the intention of the
PBGC to terminate any Plan or Plans or to appoint a trustee
to administer any Plans; (vi) the receipt by FM Properties,
FTX or FCX of any notice concerning the imposition of
withdrawal liability or a determination that a Multiemployer
Plan is, or is excepted to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; and
(vii) any other similar event or condition with respect to a
Plan or Multiemployer Plan that could reasonably result in
liability of FM Properties, FTX or FCX, as the case may be.
"Event of Default" shall mean any of the events
specified in Section 9, provided that any requirement for
the giving of notice, the lapse of time, or both, or any
other condition specified therein, has been satisfied.
"Exchange Agreement" shall mean the Interest Rate
Exchange Agreement between Hibernia and the Exchange Bank
dated as of December 31, 1985, whereby the Agent agrees to
pay the Exchange Bank a fixed rate of interest and the
Exchange Bank agrees to pay the Agent a floating rate of
interest.
"Exchange Bank" shall mean Chemical.
"FCX" shall mean Freeport-McMoRan Copper & Gold Inc., a
Delaware corporation.
"FCX Credit Agreement" shall mean that certain Credit
Agreement among FCX, FI, First Trust of New York, National
Association, as trustee, Chemical as administrative and
collateral agent, The Chase Manhattan Bank (National
Association),as documentary agent, and certain banks, dated
as of June 30, 1995, relating to a $200,000,000 credit
facility to FCX and FI, as such credit agreement may be
amended from time to time.
"FCX Guaranty" shall mean the partial guarantee of the
Obligations by FCX pursuant to that certain FCX Guaranty
Agreement by FCX in favor of the Agent and others, dated as
of June 30, 1995.
"FI" shall mean P.T. Freeport Indonesia Company, a
limited liability company organized under the laws of
Indonesia and domesticated in Delaware.
"FI Credit Agreement" shall mean that certain Credit
Agreement among FI, FTX, FCX, First Trust of New York,
National Association, as trustee, Chemical as agent and
collateral agent, The Chase Manhattan Bank (National
Association) as documentary agent, and certain banks, dated
as of October 27, 1989, relating to a $550,000,000 credit
facility to FI, as such credit agreement may be amended from
time to time.
"FM Properties Credit Agreement" shall mean that
certain Credit Agreement among FM Properties, FTX, FCX,
Chemical as administrative and collateral agent, The Chase
Manhattan Bank (National Association) as documentary agent,
and certain banks, dated as of June 30, 1995, relating to a
$50,000,000 credit facility to FM Properties, as such credit
agreement may be amended from time to time.
"FRP" shall mean Freeport-McMoRan Resource Partners,
Limited Partnership, a Delaware limited partnership.
"FTX" shall mean Freeport-McMoRan Inc., a Delaware
corporation.
"FTX Credit Agreement" shall mean that certain Credit
Agreement among FTX, FRP, Chemical as administrative and
collateral agent, The Chase Manhattan Bank (National
Association) as documentary agent, and certain banks, dated
as of June 30, 1995, relating to a $400,000,000 credit
facility to FRP and FTX, as such credit agreement may be
amended from time to time.
"FTX Guaranty" shall mean the partial guarantee of the
Obligations by FTX pursuant to that certain FTX Guaranty
Agreement by FTX in favor of the Agent and others, dated as
of June 30, 1995.
"GAAP" shall mean generally accepted accounting
principles applied on a consistent basis.
"Hibernia" shall mean Hibernia National Bank, a
national banking association.
"Indebtedness" shall mean, without duplication, (a) all
obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such
Person for the unearned balance of any payment received
under any contract outstanding for 180 days, (d) all
obligations of such Person under conditional sale or other
title retention agreements relating to property or assets
purchased by such Person, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property
or services (excluding trade accounts payable and accrued
obligations incurred in the ordinary course of business so
long as the same are not 180 days overdue or, if overdue,
are being contested in good faith and by appropriate
proceedings), (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien
on property owned or acquired by such Person, whether or not
the obligations secured thereby have been assumed, (g) all
Guarantees by such Person of Indebtedness of others, (h) all
Capitalized Lease Obligations of such Person, (i) all
recourse obligations of such Person with respect to sales of
accounts receivable which would be shown under GAAP on the
balance sheet of such Person as a liability, (j) all
obligations of such Person as an account party (including
reimbursement obligations to the issuer of a letter of
credit) in respect of bankers' acceptances and letters of
credit guaranteeing Indebtedness and (k) all non-contingent
obligations of such Person as an account party (including
reimbursement obligations to the issuer of a letter of
credit) in respect of letters of credit other than those
referred to in clause (j) above. The Indebtedness of any
Person shall include the Indebtedness of any partnership in
which such Person is a general partner but shall exclude
obligations under leases which are characterized as
Operating Leases.
"Intercreditor Agreements" shall mean (i) the FTX
Intercreditor Agreement dated as of June 11, 1992, as
amended and restated in its entirety as of June 1, 1993 and
as further amended and restated in its entirety as of the
Effective Date among Chemical on behalf of certain banks
pursuant to the FTX Credit Agreement, Chemical on behalf of
certain banks pursuant to the FM Properties Credit
Agreement, the Agent, Texas Commerce Bank, and Chemical as
collateral agent, as such agreement may be further amended
and in effect from time to time; (ii) the FCX Intercreditor
Agreement dated as of the Effective Date among Chemical as
agent for the banks pursuant to the FCX Credit Agreement,
Chemical on behalf of certain banks pursuant to the FM
Properties Credit Agreement, Chemical on behalf of certain
banks pursuant to the FI Credit Agreement, the Agent, Texas
Commerce Bank and Chemical as collateral agent, as such
agreement may be further amended and in effect from time to
time; and (iii) the FM Properties Intercreditor Agreement
dated as of the Effective Date, among FM Properties, FTX,
FCX, the Agent, and Chemical on behalf of certain banks
pursuant to the FM Properties Credit Agreement and Chemical,
as collateral agent, as such Intercreditor and Subordination
Agreement may be amended and in effect from time to time.
"LIBOR" with respect to each Reference Period, means
the rate of interest calculated for such Reference Period by
the Agent as follows:
(a) On the Determination Date for such Reference Period,
the Agent will obtain from the Dow Jones Telerate Matrix for
British Bankers Association Interest Settlement Rates
("Telerate Screen") the offered quotations for Dollar
Deposits as of 11:00 A.M. (London time) on such
Determination Date; if at least two such offered quotations
shall appear on the Telerate Screen, the LIBOR shall be the
arithmetic mean of such offered quotations (rounded, if
necessary, upwards to the nearest 1/32 of 1%), as determined
by the Agent;
(b) If fewer than two such offered quotations shall appear
on the Telerate Screen, the Agent will request each
Reference Bank to provide the Agent with its offered
quotation for Dollar Deposits to leading banks in London
interbank market as of approximately 11:00 A.M. (London
time) on such Determination Date; if at least two Reference
Banks provide the Agent with such offered quotations, LIBOR
shall be the arithmetic mean (rounded as aforesaid) of such
offered quotations, as determined by the Agent;
(c) If fewer than two Reference Banks provide the Agent
with such offered quotations, LIBOR shall be the rate per
annum which the Agent determines to be the arithmetic mean
(rounded as aforesaid) of the offered quotations which
leading banks in New York City selected by the Agent are
quoting in the New York interbank market on the
Determination Date (or if such a day is not a Business Day,
the next succeeding Business Day) for Dollar Deposits to
leading European banks; or
(d) If such offered quotations are not available, LIBOR
shall be the same as the LIBOR in effect for the last
preceding Reference Period for which the LIBOR was
established pursuant to any of the procedures set forth in
the foregoing paragraphs (a) and (b).
"Determination Date", with respect to any Reference Period,
means the second Business Day in London before the first day
of such Reference Period. "Dollar Deposits", with respect
to each Reference Period, means Dollar deposits for a period
of three months through January 2, 1996, and one, two or
three months thereafter, commencing on the first day of such
Reference Period, and in an amount equal to $70,000,000;
provided, however, that if quotations appearing on the
Telerate Screen do not indicate a Dollar amount, such
quotations shall be deemed to be for Dollar deposits in an
amount equal to $70,000,000; provided further, however, that
if quotations appear on the Telerate Screen only in Dollar
amounts other than $70,000,000, the quotations, if any, for
Dollar deposits next higher than $70,000,000, but not in
excess of $100,000,000 shall be deemed to be quotations for
Dollar deposits of $70,000,000. "Reference Banks", with
respect to any Determination Date, means the principal
London offices of the reference banks shown on the Telerate
Screen. "Reference Period" means a one-month, two-month or
three-month period at FM Properties' option but no Reference
Period may extend beyond June 30, 1996. "LIBOR Reserve
Adjustment" shall mean the percentage rate per annum equal
to (i) a fraction the numerator of which is LIBOR and the
denominator of which is one (1.00) minus the Reserve
Percentage (as defined below) expressed as a decimal, minus
(ii) LIBOR. The "Reserve Percentage" is that percentage
which is specified from time to time as the maximum reserve
requirement against "Eurodollar liabilities" under
Regulation D of the Board of Governors of the Federal
Reserve System (or any successor) for commercial banks.
"Lien" shall have the meaning set forth in the
Intercreditor Agreements.
"Loan" shall mean the $68,000,000 term loan by the
Banks to FM Properties, representing the balance of the
purchase price to be paid by FM Properties for the purchase
of certain assets by the Purchaser from the Sellers.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower
or any ERISA Affiliate is making or accruing an obligation
to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make
contributions.
"Notes" shall have the meaning set forth in Subsection
3.1.
"Obligations" shall mean the Loan, together with
accrued interest thereon, and any and every other debt,
liability and obligation, direct and contingent, liquidated
or unliquidated, due or to become due, whether now existing
or hereafter arising pursuant to this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.
"Person" shall mean an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental
authority or other entity of whatever nature.
"Plan" shall mean any employee pension benefit plan
(other than a Multiemployer Plan) which is subject to the
provisions of Title IV of ERISA or Section 412 of the Code
and in respect of which FM Properties or any ERISA Affiliate
is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Purchaser" shall mean FMP Operating Company, a Limited
Partnership, a Texas limited partnership.
"Regulation S-X" means Regulation S-X promulgated by
the Securities and Exchange Commission.
"Requirement of Law" shall mean as to any Person, the
Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person,
including a Certificate of Limited Partnership, if any, and
any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its
property is subject.
"Responsible Officer" of any entity shall mean any
executive officer or financial officer of such entity and
any other officer or similar official thereof responsible
for the administration of the obligations of such entity in
respect of this Agreement; provided that the Responsible
Officers of FTX, as managing general partner of FM
Properties, shall be deemed to be Responsible Officers of FM
Properties.
"Subsidiary" shall have the meaning set forth in the FM
Properties Credit Agreement, the FTX Credit Agreement, the
FCX Credit Agreement or the FI Credit Agreement, as
applicable.
"Termination Date" shall mean June 30, 1996 or, if
applicable, any earlier date on which the obligation to pay
the Notes in full shall mature pursuant to this Agreement.
1.2 Other Definitional Provisions. (a) All terms defined
in this Agreement shall have the defined meanings when used in
the Notes or in any certificate or other document made or
delivered pursuant hereto unless the context shall otherwise
require.
(b) The words "hereof", "herein", and "hereunder" and words
of similar import when used in this Agreement, and section,
subsection, schedule and exhibit references are references to
this Agreement unless otherwise specified.
(c) As used herein and in the Notes, and in any certificate
or other document made or delivered pursuant hereto, accounting
terms not specifically defined herein shall have the respective
meanings given to them under GAAP.
SECTION 2. SALE OF ASSETS
2.1 Conveyances of the Assets. On December 31, 1985, the
Sellers conveyed certain assets to the Purchaser.
2.2 Loan. As payment for the assets originally conveyed by
Sellers to the Purchaser, Purchaser agreed to pay the purchase
price for the assets to the Sellers. Through successive
transactions, FM Properties has assumed the obligations of the
Purchaser, and the Banks have acquired the rights of the Sellers.
Accordingly, FM Properties hereby agrees to pay the Loan to the
Banks in full on the Termination Date.
SECTION 3. THE LOAN
3.1 Notes. The Obligations of FM Properties to pay the
Loan and interest thereon shall be evidenced by the respective
Notes, originally executed by the Purchaser, dated December 31,
1985 and payable to the respective Sellers, as endorsed and
transferred by the Sellers to the Agent for the benefit of the
Banks. Each Note shall bear interest for the period from the
date thereof until payment in full of the principal amount
thereof at the interest rate per annum stated in Subsection 3.3.
Interest on each Note shall be payable at such times as are
specified in Subsection 3.3. Anything to the contrary herein or
in any other agreement executed in connection herewith
notwithstanding, the Banks shall not charge, take, collect or
receive, and FM Properties shall not be obligated to pay to the
Banks, any amounts constituting interest on the Loan in excess of
the maximum rate permitted by applicable law. If, for any
reason, any payments charged, taken, collected or received on the
Loan shall exceed the maximum rate permitted by applicable law,
the holder of the Notes shall refund to FM Properties, or at the
option of such holder, credit against the principal of the Notes
such portion of said interest as shall be necessary to cause the
interest actually paid, charged, received or collected and
retained on the Notes to equal the maximum rate permitted by
applicable law.
3.2 Optional Prepayments. FM Properties shall have the
right to prepay the Obligations in whole or in part at any time
prior to January 2, 1996, but only after 15 days' prior notice to
the Agent of the intention to do so; provided, however that FM
Properties shall pay Hibernia as a prepayment premium the amount
which Hibernia is obligated to pay the Exchange Bank for the
early termination of the Exchange Agreement with respect to the
Exchange Agreement (if the prepayment is in full) or, if
possible, for the early termination or reduction of the Exchange
Agreement; provided further, however, that should any such early
termination or reduction of the Exchange Agreement resulting from
a permitted prepayment by FM Properties result in a credit under
the Exchange Agreement rather than an early termination penalty,
then FM Properties shall be entitled to receive such credit. FM
Properties shall have the right to prepay the Obligations in
whole or in part at any time after January 2, 1996, but only
after 15 days' prior notice to the Agent of its intention to do
so; provided, however, that if such prepayment should be on a day
other than the last day of a Reference Period, FM Properties
shall pay the Banks as a prepayment premium any loss which the
Banks may sustain as a result of such prepayment during a
Reference Period, the Agent's calculation of such loss to be
conclusive absent manifest error.
3.3 Interest Rate and Payment Dates. (a) For the period
through and including January 2, 1996, each Note shall bear
interest at the rate of 10.6208% per annum, plus or minus a
variable rate per annum equal to the LIBOR Reserve Adjustment.
Interest shall be payable in arrears on January 2, 1996.
(b) For the period from January 3, 1996 through the
Termination Date, each Note shall bear interest at the rate of
LIBOR plus one and three-eighths (1.375%) percent per annum.
Interest shall be payable in arrears on the last day of each
Reference Period.
(c) The fixed rate component of interest described in
Section 3.3(a) is computed on the basis of a year of 360/360 days
and the variable rate component of interest described in Section
3.3(b) is computed on the basis of the actual number of days
elapsed over a year of 360 days.
(d) If any applicable domestic or foreign law, treaty, rule
or regulation, or any interpretation or administration thereof by
any governmental authority (i) changes the basis of taxation of
payments to the Banks on any principal or interest for other
amounts attributable to interest at LIBOR (other than taxes
imposed on the overall net income of the Banks); (ii) changes,
imposes or deems applicable any reserve, special deposit or
similar requirements in respect of advances bearing interest at
LIBOR (excluding those for which the Banks are fully compensated
pursuant to adjustments made in the definition of LIBOR) or
against assets of, deposits with or for the account of or credit
extended by the Banks; or (iii) imposes on the Banks or the
interbank eurocurrency deposit and transfer market any other
condition affecting advances bearing interest at LIBOR, and the
result of any of the foregoing is to increase the cost to the
Banks of funding or maintaining the Loan at LIBOR or to reduce
the amount of any sum receivable by the Banks in respect of
advances bearing interest at LIBOR, then the Agent shall promptly
notify FM Properties in writing of the happening of such event
and accompanying such notice shall be a summary of the supporting
calculation, and FM Properties shall upon demand pay to the Banks
such additional amount or amounts as will compensate the Banks
for such additional cost or reduction. The Agent's calculation
shall be deemed conclusive absent manifest error.
3.4 Exculpation. Subject to the rights of the Banks
against FTX and FCX under the FTX Guaranty and the FCX Guaranty,
each of the Banks agree for themselves and their heirs,
successors and assigns that any claim against FM Properties
which may arise for payment of the principal of and interest on
the Notes and for fees, expenses and all other amounts payable by
FM Properties hereunder shall be made only against and shall be
limited to FM Properties and that no judgment, order or execution
entered in any suit, action or proceeding, whether legal or
equitable, with respect to payment of the Notes shall be obtained
or enforced against any partner of FM Properties or the assets of
any partner of FM Properties, any right to proceed against the
partners of FM Properties as a result of their capacity as a
partner of FM Properties, individually or their respective assets
in respect of payment of the Notes being hereby expressly waived,
renounced and remitted by each of the Banks for themselves and
their heirs, successors and assigns. Nothing in this Subsection
3.4, however, shall be deemed to be a waiver by any of the Banks
or any other holders of the Notes of any right to proceed against
any of the partners of FM Properties or their respective assets
in respect of claims other than for payment of the Notes, which
such Banks or other holders may have against such partner or
assets, and nothing in this Subsection 3.4 shall be construed so
as to prevent any of the Banks or any other holders of the Notes
from commencing any action, suit or proceeding with respect to,
or causing legal papers to be served upon, any partner of FM
Properties for the purpose of obtaining jurisdiction over FM
Properties. Furthermore, nothing contained in this Subsection
3.4 shall be deemed to diminish, waive or affect in any manner
the rights of the Agent, Banks, or Banks' assigns, against FTX,
FCX or their assets under and pursuant to the FTX Guaranty or the
FCX Guaranty or any Liens or rights of the Agent or Banks as
contemplated or provided for in the Intercreditor Agreements.
3.5 Acknowledgment and Modification of Notes. FM
Properties and the Banks agree that (i) the Notes are hereby
amended to extend the maturity dates thereof from January 2, 1996
to June 30, 1996 and (ii) all references to the Note Agreement in
the Notes shall be deemed to refer to this Agreement.
SECTION 4. SECURITY
4.1 Security. The Obligations of FM Properties in favor of
the Banks are secured by the following:
(i) FTX Guaranty and FCX Guaranty.
(ii) All Liens and rights of the Banks as contemplated
or provided for in the Intercreditor Agreements,
including the Shared Collateral and any Substitute
Collateral.
4.2 Required Collateralization (FTX). If FTX or any
Subsidiary of FTX (other than FRP pursuant to the FTX Credit
Agreement, or any other Subsidiary of FTX or FRP that becomes a
direct borrower under the FTX Credit Agreement) grants, pledges
or otherwise furnishes any Lien or other collateral or security
to any bank pursuant to the FTX Credit Agreement, the FTX
Guaranty or the FTX Intercreditor Agreement, then
contemporaneously therewith (and with equal priority on a ratable
basis as provided in the FTX Intercreditor Agreement), FTX and/or
such Subsidiary, as the case may be, shall (i) grant, pledge or
otherwise furnish the same Lien and other collateral and security
to the Banks (or to the collateral agent under the FTX
Intercreditor Agreement for the benefit of the Banks) as security
for the FTX Guaranty and (ii) execute, acknowledge, file, record
and deliver to the Banks (or to the collateral agent under the
FTX Intercreditor Agreement for the benefit of the Banks) the
same security instruments and other agreements which are
executed, acknowledged, filed, recorded or delivered to or for
the benefit of such banks or other lenders or creditors, in each
case revised reflecting the Banks as the secured party and the
Obligations as the secured indebtedness, all as contemplated by
the FTX Intercreditor Agreement.
4.3 Required Collateralization (FCX). If FCX or any
Subsidiary (other than FI pursuant to the FCX Credit Agreement or
the FI Credit Agreement or any Subsidiaries of FI pursuant to the
FCX Credit Agreement or the FI Credit Agreement or any other
Subsidiary of FCX that becomes a direct borrower under the FCX
Credit Agreement) grants, pledges or otherwise furnishes any Lien
or other collateral or security to any bank or other lender or
creditor under or pursuant to the FCX Credit Agreement, or the
FCX Guaranty or the FCX Intercreditor Agreement, then
contemporaneously therewith (and with equal priority on a ratable
basis as provided in the FCX Intercreditor Agreement), FCX and/or
such Subsidiary, as the case may be, shall (i) grant, pledge or
otherwise furnish the same Lien and other collateral and security
to the Banks (or to the collateral agent under the FCX
Intercreditor Agreement for the benefit of the Banks) as security
for the FCX Guaranty and (ii) execute, acknowledge, file, record
and deliver to the Banks (or to the Collateral Agent under the
FCX Intercreditor Agreement for the benefit of the Banks) the
same security instruments and other agreements which are
executed, acknowledged, filed, recorded or delivered to or for
the benefit of such banks or other lenders or creditors, in each
case revised reflecting the Banks as the secured party and the
Obligations as the secured indebtedness, all as contemplated by
the FCX Intercreditor Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES
FM Properties represents and warrants to the Banks as of the
Effective Date:
5.1 Partnership Existence; Compliance with Law. (a) FM
Properties (i) is a general partnership duly formed, validly
existing and in good standing under the laws of the State of
Delaware, (ii) has the partnership power and authority to own and
operate its properties, to operate the property it operates and
to conduct the business in which it is currently engaged, (iii)
is duly qualified to do business and is in good standing in every
jurisdiction in which it owns a material amount of property or
conducts a material amount of business and in which such
qualification is necessary, and (iv) is in compliance with all
Requirements of Law except to the extent that the failure to
comply therewith could not have a material adverse effect on the
business, operations, property or financial or other condition of
FM Properties, and could not materially and adversely affect the
ability of FM Properties to perform its obligations under this
Agreement and the Notes.
(b) FTX (i) is a corporation duly formed, validly existing
and in good standing under the laws of the State of Delaware,
(ii) has the corporate power and authority to own and operate its
properties, to operate the property it operates and to conduct
the business in which it is currently engaged, (iii) is duly
qualified to do business and is in good standing in every
jurisdiction in which it owns a material amount of property or
conducts a material amount of business and in which such
qualification is necessary, and (iv) is in compliance with all
Requirements of Law except to the extent that the failure to
comply therewith could not have a material adverse effect on the
business, operations, property or financial or other condition of
FTX, and could not materially and adversely affect the ability of
FTX to perform its obligations under this Agreement and the FTX
Guaranty.
(c) FCX (i) is a corporation duly formed, validly existing
and in good standing under the laws of the State of Delaware,
(ii) has the corporate power and authority to own and operate its
properties, to operate the property it operates and to conduct
the business in which it is currently engaged, (iii) is duly
qualified to do business and is in good standing in every
jurisdiction in which it owns a material amount of property or
conducts a material amount of business and in which such
qualification is necessary, and (iv) is in compliance with all
Requirements of Law except to the extent that the failure to
comply therewith could not have a material adverse effect on the
business, operations, property or financial or other condition of
FCX, and could not materially and adversely affect the ability of
FCX to perform its obligations under this Agreement and the FCX
Guaranty.
5.2 Partnership Power; Authorization; Enforceable
Obligations. (a) FM Properties has the power and authority and
the legal right to make, deliver and perform its obligations
under this Agreement and the Notes and has taken (and each of its
partners has taken) all necessary action to authorize the
incurring of the Obligations on the terms and conditions of this
Agreement and the Notes and to authorize the execution and
delivery of this Agreement and the performance of this Agreement
and the Notes. No consent or authorization of, filing with, or
other act by or in respect of any governmental authority is
required in connection with the Obligations thereunder or with
the execution and delivery, performance, validity or
enforceability of this Agreement or the Notes. This Agreement
has been executed and delivered on behalf of FM Properties and
constitutes a legal, valid and binding obligation of FM
Properties enforceable against FM Properties in accordance with
its terms, except as enforceability may be affected by general
principles of equity or may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally.
(b) FTX has the power and authority and the legal right to
make, deliver and perform its obligations under this Agreement
and the FTX Guaranty and has taken all necessary corporate action
to authorize the guaranty of the Obligations on the terms and
conditions of this Agreement and the FTX Guaranty and to
authorize the execution and delivery of this Agreement and the
performance of this Agreement and the FTX Guaranty. No consent
or authorization of, filing with, or other act by or in respect
of any governmental authority is required in connection with the
Obligations thereunder or with the execution and delivery,
performance, validity or enforceability of this Agreement or the
FTX Guaranty. This Agreement and the FTX Guaranty have been
executed and delivered on behalf of FTX and constitutes a legal,
valid and binding obligation of FTX enforceable against FTX in
accordance with its terms, except as enforceability may be
affected by general principles of equity or may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium (in
the case of such events relating to FTX as distinct from FM
Properties) or similar laws affecting the enforcement against FTX
of creditors' rights generally.
(c) FCX has the power and authority and the legal right to
make, deliver and perform its obligations under this Agreement
and the FCX Guaranty and has taken all necessary corporate action
to authorize the guaranty of the Obligations on the terms and
conditions of this Agreement and the FCX Guaranty and to
authorize the execution and delivery of this Agreement and the
performance of this Agreement and the FCX Guaranty. No consent
or authorization of, filing with, or other act by or in respect
of any governmental authority is required in connection with the
Obligations thereunder or with the execution and delivery,
performance, validity or enforceability of this Agreement, the
Notes or the FCX Guaranty. This Agreement and the FCX Guaranty
have been executed and delivered on behalf of FCX and constitutes
a legal, valid and binding obligation of FCX enforceable against
FCX in accordance with its terms, except as enforceability may be
affected by general principles of equity or may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium (in
the case of such events relating to FCX as distinct from FM
Properties) or similar laws affecting the enforcement against FCX
of creditors' rights generally.
5.3 No Legal Bar. The execution and delivery of this
Agreement by FM Properties, FTX and FCX and the performance of
this Agreement by FM Properties, FTX and FCX, the Notes by FM
Properties, the FTX Guaranty by FTX and the FCX Guaranty by FCX
will not violate any Requirement of Law or Contractual Obligation
of FM Properties, FTX or FCX and will not result in or require
the creation or imposition of any material Lien on any of its
property or assets or revenues pursuant to the provisions of a
mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which FM Properties, FTX or FCX is a
party or by which it is contractually bound, other than as
contemplated by the Intercreditor Agreements, respectively.
5.4 No Material Litigation. No litigation, investigation
or proceeding of or before any arbitrator or governmental
authority is pending or, to the knowledge of FM Properties, FTX
or FCX, threatened by or against FM Properties, FTX or FCX or
against any of its properties or revenues (a) with respect to
this Agreement, the Notes, the FTX Guaranty or the FCX Guaranty,
or any of the transactions contemplated hereby, or (b) that, if
adversely determined, would have a material adverse effect on the
business, operations, property or financial or other condition of
FM Properties, FTX or FCX, except as follows: (i) FM Properties
Operating Co. v. City of Austin, No. A-94-CA-647-IN, United
States District Court for the Western District of Texas, Austin
Division (pending appeal to the 5th Circuit); and (ii) Notice of
Intent to Sue dated May 7, 1995 by SOS Legal Defense Fund with
the Secretary of the Interior providing the 60-day notice
requested under the Endangered Species Act to attach the 10-A
Permit issued to FM Properties Operating Co.
5.5 No Default. Neither FM Properties, FTX nor FCX is in
default under or with respect to any Contractual Obligation in
any respect that could be material and adverse to the business,
operations, property or financial or other condition of FM
Properties, FTX or FCX or that could materially adverse affect
the ability of FM Properties, FTX or FCX to perform its
obligations under this Agreement, the Notes, the FTX Guaranty or
the FCX Guaranty. No Default or Event of Default hereunder has
occurred and is continuing.
5.6 Title, etc. FM Properties, FTX and FCX have good and
valid title to their material properties, assets and revenues
(exclusive of oil, gas and other mineral properties on which no
development or production activities following discovery of
commercially exploitable reserves are being conducted), free and
clear of all Liens except such as are permitted by the FM
Properties Credit Agreement, the FTX Credit Agreement and the FCX
Credit Agreement and except for covenants, restrictions, rights,
easements and minor irregularities in title which do not
individually or in the aggregate interfere with the occupation,
use and enjoyment by FM Properties, FTX or FCX of such properties
and assets in the normal course of business as presently
conducted or materially impair the value thereof for use in such
business.
5.7 No Burdensome Restrictions. No Contractual Obligation
of FM Properties, FTX or FCX and no Requirement of Law materially
adversely affects or insofar as FM Properties, FTX or FCX may
reasonably foresee will materially adversely affect the ability
of FM Properties, FTX or FCX to perform their obligations under
this Agreement, the Notes, the FTX Guaranty or the FCX Guaranty.
5.8 Taxes. FM Properties, FTX and FCX have filed or caused
to be filed all tax returns that to their knowledge are required
to be filed unless appropriate extensions have been obtained and
have paid all taxes shown to be due and payable on said returns
or on any assessments made against them or any of their property
and all other taxes, fees or charges of any other governmental
authority (except to the extent protested in good faith by
appropriate proceedings); and no tax liens have been filed and,
to the knowledge of FM Properties, FTX or FCX, as the case may
be, no claims are being asserted with respect to any such taxes,
fees or other charges.
5.9 Federal Regulations. Neither FM Properties, FTX nor
FCX is or will be engaged principally or as one of its important
activities, in the business of extending credit for the purpose
of "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation
U of the Board of Governors of the Federal Reserve System as now
and from time to time hereafter in effect. No part of the
proceeds of any loans hereunder will be used for "purchasing" or
"carrying" "margin stock" as so defined or for any purpose that
violates, or that would be inconsistent with, the provisions of
the Regulations of such Board of Governors. If requested by any
Seller, FM Properties, FTX and FCX will furnish to the Banks a
statement in conformity with the requirements of Federal Reserve
Form U-1 referred to in said Regulation U to the foregoing
effect.
5.10 ERISA. No ERISA Event has occurred with respect to
any Plan.
5.11 Investment Company Act. FM Properties is not an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of
1940, as amended.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Effectiveness. The following constitute
conditions precedent to the effectiveness of this Agreement:
(a) Agreement. The Banks shall have received this
Agreement, executed by a Responsible Officer of FM Properties,
FTX and FCX.
(b) First Amendment to Loan Participation Agreement. The
Banks shall have executed the First Amendment to Loan
Participation Agreement between the Banks (i) extending the
maturity date of the Notes, (ii) providing for the interest rate
on the Notes after January 2, 1996, and (iii) reflecting the
provisions of this Agreement.
(c) Intercreditor Agreements, Guaranties and Security
Agreements. The Banks shall have received executed copies of the
Intercreditor Agreements, FTX Guaranty and FCX Guaranty and if
requested by the Banks, copies of the security agreements
executed in connection therewith, in form and substance
satisfactory to the Banks.
(d) Credit Agreements. The Banks shall have received
copies of the executed FM Properties Credit Agreement, FTX Credit
Agreement, FCX Credit Agreement and FI Credit Agreement, with all
exhibits and schedules, in form and substance satisfactory to the
Banks.
(e) FM Properties Partnership and Corporate Proceedings.
(i) The Banks shall have received a certificate of the Secretary
or Assistant Secretary of FTX, as managing general partner of FM
Properties, certifying (i) that attached thereto is a true and
correct copy of the partnership agreement of FM Properties, (ii)
that attached thereto is a true and correct copy of the
certificate of incorporation of FTX, (iii) that attached thereto
is a true and correct copy of resolutions of the board of
directors of FTX, as managing general partner of FM Properties,
authorizing the execution of this Agreement and all documents
related hereto, and (iv) the incumbency of the officer(s) of FTX,
as managing general partner, executing this Agreement and all
documents related hereto.
(f) FTX Corporate Proceedings. (i) The Banks shall have
received a certificate of the Secretary or Assistant Secretary of
FTX, certifying (i) that attached thereto is a true and correct
copy of resolutions of the board of directors of FTX authorizing
the execution of this Agreement and the FTX Guaranty and all
documents related thereto and (ii) the incumbency of the
officer(s) of FTX, executing this Agreement, the FTX Guaranty and
all documents related hereto.
(g) FCX Corporate Proceedings. (i) The Banks shall have
received a certificate of the Secretary or Assistant Secretary of
FCX, certifying (i) that attached thereto is a true and correct
copy of resolutions of the board of directors of FCX authorizing
the execution of this Agreement and the FCX Guaranty and all
documents related thereto and (ii) the incumbency of the
officer(s) of FCX, executing this Agreement, the FCX Guaranty and
all documents related hereto.
(h) Legal Opinions. The Banks shall have received (i) an
opinion of John G. Amato, counsel to FM Properties, dated the
Effective Date in form and substance satisfactory to the Agent
and addressed to the Banks, and (ii) an opinion of Davis Polk &
Wardwell, counsel to FTX and FCX, dated the Effective Date in
form and substance satisfactory to the Agent and addressed to the
Banks.
(i) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on the Effective
Date or would result after giving effect to the FCX Spin Off.
(j) Additional Matters. All other documents and legal
matters in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory in form and substance
to the Banks, the Agent and their counsel.
SECTION 7. AFFIRMATIVE COVENANTS
FM Properties hereby agrees that, so long as this Agreement
remains in effect and any Note remains outstanding and unpaid,
unless the Banks shall have otherwise consented in writing, FM
Properties shall:
7.1 Financial Statements. Furnish to the Banks and the
Agent the following:
(a) within 95 days after the end of each fiscal year
of FM Properties, the Company, FTX and FCX, a consolidated
balance sheet of FM Properties, the Company, FTX and FCX as
at the close of such fiscal year and consolidated statements
of operations and of cash flow of FM Properties, the
Company, FTX and FCX, for such year, with the opinion
thereon of Arthur Andersen & Co. or other independent public
accountants of national standing (as to the Company, FTX and
FCX) and certified by a Responsible Officer of FTX (as to FM
Properties);
(b) within 50 days after the end of each of the first
three quarters of each fiscal year of FM Properties, the
Company, FTX and FCX, consolidated balance sheets of FM
Properties, the Company, FTX and FCX as at the end of such
quarter and consolidated statements of operations of FM
Properties, the Company, FTX and FCX for such quarter and
consolidated statements of operations and of cash flow of FM
Properties, the Company, FTX and FCX for the period from the
beginning of the fiscal year to the end of such quarter,
certified by a Responsible Officer of FTX (as to FM
Properties and FTX), the Company (as to the Company) and of
FCX (as to FCX);
(c) promptly after their becoming available, (a)
copies of all financial statements, reports and proxy
statements which the Company, FTX or FCX shall have sent to
their respective shareholders generally, (b) copies of all
registration statements (excluding registration statements
relating to employee benefit plans) and regular and periodic
reports, if any, which the Company, FTX or FCX shall have
filed with the SEC or with any national securities exchange
and (c) if requested by any Bank, copies of each annual
report filed with any governmental agency pursuant to ERISA
with respect to each Plan of FM Properties or any of its
Subsidiaries;
(d) within 95 days after the end of each fiscal year
of FM Properties, a certificate by a Responsible Officer of
FM Properties, to the effect that no Event of Default or
Default has occurred and is continuing, or if an Event of
Default or Default has occurred and is continuing,
specifying the nature and extent thereof and the corrective
action (if any) proposed to be taken with respect thereto;
(e) promptly upon the occurrence of any ERISA Event,
Event of Default, Default (as such terms are defined in the
FM Properties Credit Agreement, the FTX Credit Agreement,
the FCX Credit Agreement or the FI Credit Agreement) or the
commencement of any proceeding regarding FM Properties, the
Company, FTX or FCX or any Subsidiary of such entities under
any Federal or state bankruptcy law, notice thereof,
describing the same in reasonable detail;
(f) promptly upon the occurrence of any development
that, in the judgment of FM Properties, has resulted in, or
could reasonably be anticipated to result in, a material
adverse effect on the business, assets, operations or
financial condition of FM Properties or its ability to
comply with its obligations under this Agreement or the
Notes, notice thereof, describing the same in reasonable
detail;
(g) Copies of (i) all executed amendments to the FM
Properties Credit Agreement, the FTX Credit Agreement, the
FCX Credit Agreement or the FI Credit Agreement as soon as
available and copies of all requests for amendments to the
FM Properties Credit Agreement, the FTX Credit Agreement,
the FCX Credit Agreement or the FI Credit Agreement
simultaneously with the distribution of such proposed
amendments to the lenders (as a whole) under the FM
Properties Credit Agreement, the FTX Credit Agreement, the
FCX Credit Agreement or the FI Credit Agreement; and (ii)
all requests for consent or waiver submitted by FM
Properties to the lenders (as a whole) under the FM
Properties Credit Agreement, by FTX or FRP under the FTX
Credit Agreement, by FCX or FI under the FCX Credit
Agreement or by FI under the FI Credit Agreement, in each
case as soon as available.
(h) from time to time, such further information
regarding the business, affairs and financial condition of
FM Properties, the Company, FTX or FCX or any Subsidiary of
such entities as the Agent or any Bank may reasonably
request.
All such financial statements shall be complete and correct in
all material respects and be prepared in reasonable detail and in
accordance with GAAP consistently applied.
7.2 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent,
as the case may be, all material Indebtedness, Contingent
Obligations, taxes, assessments or governmental charges or
levies, and other obligations of whatever nature (except as
contested in good faith by appropriate proceedings) of FM
Properties.
7.3 Notices; Reports. Promptly give notice, or a report,
as the case may be, to the Agent and Banks:
(a) Of the occurrence of any Default or Event of
Default (stating that such notice is a "notice of default")
and in addition to such notice deliver to the Banks a
certificate signed by a Responsible Officer describing in
detail the steps FM Properties has taken or proposes to take
to remedy such Default or Event of Default;
(b) Of any (i) default or event of default under any
material Contractual Obligation of FM Properties, FTX or FCX
or (ii) litigation, investigation or proceeding which may
exist at any time between FM Properties, FTX or FCX and any
governmental authority, which in either case might have a
material adverse effect on the business, operations,
property or financial or other condition of FM Properties,
FTX or FCX;
(c) Of any litigation or proceeding affecting FM
Properties, FTX or FCX that could have a material adverse
effect upon the business, operations, property or financial
or other condition of FM Properties, FTX or FCX;
(d) Concurrently with the delivery of the financial
statements referred to in Subsection 7.1(a) and (b), a
certificate of a Responsible Officer of each of FM
Properties, FTX or FCX, as the case may be, stating that, to
the best of such officer's knowledge, each of FM Properties,
FTX or FCX, as the case may be, during such period has
observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this
Agreement to be observed, performed or satisfied by it, and
that such officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate;
(e) Of the following events, as soon as possible and
in any event within 10 days after FM Properties, FTX or FCX
knows of: (i) the occurrence or expected occurrence of any
ERISA Event with respect to any Plan, or (ii) the
institution of proceedings or the taking or expected taking
of any other action by PBGC, FM Properties, FTX or FCX or
any Commonly Controlled Entity to terminate, withdraw or
partially withdraw from any Plan with respect to a
Multiemployer Plan, the Reorganization or Insolvency of the
Plan (as defined by ERISA) and in addition to such notice,
deliver to the Agent whichever of the following may be
applicable: (A) a certificate of the Responsible Officer of
FM Properties, FTX or FCX, as the case may be, setting forth
details as to such ERISA Event and the action that FM
Properties, FTX or FCX or Commonly Controlled Entity
proposes to take with respect thereto, together with a copy
of any notice of such ERISA Event that may be required to be
filed with PBGC, or (B) any notice delivered by PBGC
evidencing its intent to institute such proceedings or any
notice to PBGC that such Plan is to be terminated, as the
case may be;
(f) Of a material adverse change in the business,
operations, property or financial or other condition of FM
Properties, FTX or FCX;
(g) In the event of the filing or institution of
voluntary or involuntary bankruptcy proceedings by or
against FM Properties, the Company, FTX or FCX.
Each notice pursuant to this subsection shall be accompanied by a
statement of the Responsible Officer of FM Properties, FTX or
FCX, as the case may be, setting forth details of the occurrence
referred to therein and stating what action FM Properties, FTX or
FCX, as the case may be, proposes to take with respect thereto.
For all purposes of clause (e) of this subsection, FM Properties,
FTX or FCX, as the case may be, shall be deemed to have all
knowledge attributable to the administrator of such Plan.
SECTION 8. ADDITIONAL COVENANTS
FM Properties, FTX and FCX hereby agree that, so long as any
Note remains outstanding and unpaid, FM Properties, FTX or FCX,
as the case may be, shall:
8.1 Covenants Incorporated by Reference from the FM
Properties Credit Agreement. (a) FM Properties will at all times
be in full compliance with Section 4.1 of the FM Properties
Credit Agreement, which is hereby incorporated by reference
herein with the same force and effect as though fully set forth
herein in its entirety; provided that the references therein to
"Default", "Event of Default", "Bank" or "Agents" are replaced
with the references to "Default", "Event of Default", "Banks" and
"Agent" hereunder, respectively.
(b) FM Properties will not at any time fail to be in full
compliance with Section 4.2 of the FM Properties Credit
Agreement, which is hereby incorporated by reference herein with
the same force and effect as though fully set forth herein in its
entirety; provided that the references therein to "this
Agreement", "this Agreement", "this Agreement", the Pledge
Agreement or the Security Agreement", "Default", "Event of
Default", "Banks", "Banks", "Required Banks" and "Agents" or
"Agent" are replaced herein with references to "this Agreement",
"Default", "Event of Default", "Banks" and "Agent" hereunder,
respectively.
(c) FM Properties shall not amend, supplement, change,
terminate or waive any material provision of any Material
Agreement (as defined in the FM Properties Credit Agreement)
unless the Agent shall have received 30 days' notice of such
amendment, supplement, change, termination or waiver and the
Agent shall not have objected thereto on the ground that it
would, in its judgment, adversely affect the rights or interest
of the Banks; provided that if FM Properties shall not have given
such 30 days' notice, FM Properties shall not amend, supplement,
change, terminate or waive any material provision of any Material
Agreement unless the Agent shall have given its written consent
thereto.
(d) In the event that (i) any of the sections of the FM
Properties Credit Agreement in effect as of the Effective Date
referred to in this Agreement are renumbered or relocated within
the FM Properties Credit Agreement, this Agreement shall be
deemed to be amended to refer to the redesignated or relocated
sections; and (ii) to the extent that any of the sections of the
FM Properties Credit Agreement are amended or waivers are
obtained prior to the occurrence of an Event of Default under the
FM Properties Credit Agreement, this Agreement shall henceforth
refer to such sections as amended or waived.
8.2 Covenants Incorporated by Reference from the FTX Credit
Agreement. (a) FTX will at all times be in full compliance with
Section 5.1 of the FTX Credit Agreement, which is hereby
incorporated by reference herein with the same force and effect
as though fully set forth herein in its entirety; provided that
the references therein to "Default", "Event of Default", "Bank"
or "Agents" are replaced with the references to "Default", "Event
of Default", "Banks" and "Agent" hereunder, respectively.
(b) FTX will not at any time fail to be in full compliance
with Section 5.2 of the FTX Credit Agreement, which is hereby
incorporated by reference herein with the same force and effect
as though fully set forth herein in its entirety; provided that
the references therein to "this Agreement", "this Agreement", the
Pledge Agreement or the Security Agreement", "Default", "Event of
Default", "Banks", "Required Banks" and "Agents" or "Agent" are
replaced herein with references to "this Agreement", "this
Agreement", "Default", "Event of Default", "Banks", "Banks" and
"Agent" hereunder, respectively.
(c) In the event that (i) any of the sections of the FTX
Credit Agreement in effect as of the Effective Date referred to
in this Agreement are renumbered or relocated within the FTX
Credit Agreement, this Agreement shall be deemed to be amended to
refer to the redesignated or relocated sections; and (ii) to the
extent that any of such sections of the FTX Credit Agreement are
amended or waivers are obtained prior to the occurrence of an
Event of Default under the FTX Credit Agreement, this Agreement
shall henceforth refer to such sections as amended or waived.
Notwithstanding the foregoing, in the event that any amendment or
waiver of the FTX Credit Agreement deletes (rather than amends or
waives) any one or more of the following financial covenants:
Sections 5.2(f) (EBITDA Ratio), 5.2(h) (Debt to Capital Ratio) or
5.2(q) (Equity Payments) without the prior written consent of the
Banks, then, for purposes of complying with the provisions of
this Section 8.2, the provisions of Sections 5.2(f), 5.2(h) and
5.2(q) shall be deemed to have continued as in effect immediately
prior to the deletion of such section(s).
8.3 Covenants Incorporated by Reference from the FCX Credit
Agreement. (a) FCX will at all times be in full compliance with
Section 5.1 of the FCX Credit Agreement, which is hereby
incorporated by reference herein with the same force and effect
as though fully set forth herein in its entirety; provided that
the references therein to "Default", "Event of Default", "Bank"
or "Agents" are replaced with the references to "Default", "Event
of Default", "Banks" and "Agent" hereunder, respectively.
(b) FCX will not at any time fail to be in full compliance
with Section 5.2 of the FCX Credit Agreement, which is hereby
incorporated by reference herein with the same force and effect
as though fully set forth herein in its entirety; provided that
the references therein to "this Agreement", "this Agreement, the
Pledge Agreement or the Security Agreement", "Default", "Event of
Default", "Banks", "Required Banks" and "Agents" or "Agent" are
replaced herein with references to "this Agreement", "this
Agreement", "Default", "Event of Default", "Banks", "Banks" and
"Agent" hereunder, respectively.
(c) In the event that (i) any of the sections of the FCX
Credit Agreement in effect as of the Effective Date referred to
in this Agreement are renumbered or relocated within the FCX
Credit Agreement, this Agreement shall be deemed to be amended to
refer to the redesignated or relocated sections; and (ii) to the
extent that any of such sections of the FCX Credit Agreement are
amended or waivers are obtained prior to the occurrence of an
Event of Default under the FCX Credit Agreement, this Agreement
shall henceforth refer to such sections as amended or waived.
Notwithstanding the foregoing, in the event that any amendment or
waiver of the FCX Credit Agreement deletes (rather than amends or
waives) any one or more of the following financial covenants:
Sections 5.2(b) (Borrowing Base Limits) 5.2(f) (EBITDA Ratio) or
5.2(q) (Equity Payments) without the prior written consent of the
Banks, then, for purposes of complying with the provisions of
this Section 8.3, the provisions of Sections 5.2(b), 5.2(f) and
5.2(q) shall be deemed to have continued as in effect immediately
prior to the deletion of such section(s).
SECTION 9. EVENTS OF DEFAULT
9.1 Event of Default. Upon the occurrence of any of the
following events:
(a) FM Properties shall default for three or more days
in the payment when due (whether at the due date thereof, at
a date fixed for prepayment thereof, by acceleration thereof
or otherwise) of any principal on any Note; or
(b) FM Properties shall default for three or more days
in the payment when due of any interest on any Note or any
other amount payable under this Agreement; or
(c) Any representation or warranty made by FM
Properties herein or by FTX or FCX or which is contained in
any certificate, document or financial or other statement
furnished at any time under or in connection with this
Agreement shall prove to have been incorrect in any material
respect on or as of the date made; or
(d) FM Properties shall default (i) in the observance
or performance of any of the covenants or agreements
contained in Section 7 or Section 8.1(a) hereof, and such
default shall remain unremedied for 30 days after written
notice thereof shall have been given to FM Properties by the
Agent; or (ii) in the observance or performance of any of
the covenants or agreements contained in Section 8.1(b)
hereof (except for a change in FM Properties' fiscal year);
or
(e) FTX or FCX shall default (i) in the observance of
any of the covenants or agreements contained in Section
8.2(a) or Section 8.3(a) hereof, and such default shall
remain unremedied for 30 days after written thereof shall
have been given to FM Properties by the Agent; or (ii) in
the observance of any of the covenants or agreements
contained in Section 8.2(b) or Section 8.3(b) hereof (except
for a change in FTX's or FCX's fiscal year); or
(f) FM Properties, FTX and FCX shall fail to pay any
amounts due to the Agent pursuant to the Agent's Fee
Agreement on or before the second Business Day following
notice of non-payment from the holder of the Notes; or
(g) An "Event of Default" (as defined in the FM
Properties Credit Agreement, the FTX Credit Agreement, the
FCX Credit Agreement or the FI Credit Agreement) shall occur
and be continuing; or
(h) (i) FM Properties, FTX or FCX, or any
Subsidiaries thereof, shall commence any case, proceeding or
other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for
it or for all or any substantial part of its assets, or FM
Properties, FTX or FCX, or any Subsidiary thereof, shall
make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against FM Properties, FTX
or FCX, or any Subsidiaries thereof, any case, proceeding or
other action of a nature referred to in case, proceeding or
other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against FM Properties, FTX or FCX,
or any Subsidiaries thereof, any case, proceeding or other
action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of
an order for any such relief which shall not have been
vacated, discharged or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) FM
Properties, FTX or FCX, or any Subsidiaries thereof, shall
take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii) or (iii) above; or (v) FM
Properties, FTX or FCX, or any Subsidiaries thereof, shall
generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they may become
due;
(i) an ERISA Event shall have occurred with respect to
any Plan or Multiemployer Plan that, when taken together
with all other ERISA Events, reasonably could be expected to
result in liability of FM Properties, FTX or FCX in an
aggregate amount exceeding the following threshold amounts
or requires payments exceeding the following threshold
amounts in any year: for FM Properties $5,000,000, for FTX
$10,000,000 or for FCX $10,000,000;
(j) the FTX Guaranty or the FCX Guaranty shall cease
to be, or shall be asserted by FM Properties, FTX or FCX or
any of their affiliates not to be in full force and effect
and enforceable in all material respects in accordance with
its terms; or
(k) FTX shall for any reason cease to be the sole
managing general partner of FM Properties or the functions
of FTX as the managing general partner of FM Properties
shall generally be carried out for any reason by any person
other than FTX; provided that FTX may designate any of its
Subsidiaries to discharge the duties of FTX as managing
general partner of the FM Properties;
then, and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (h) above,
the Obligations hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement including the prepayment
premium described in Subsection 9.2 hereof and the Notes shall
immediately become due and payable, and (B) if such event is any
other Event of Default, the holders of the Notes may, by notice
to FM Properties, declare the Obligations hereunder (with accrued
interest thereon) and all other amounts owing under this
Agreement and the Notes to be due and payable forthwith,
whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby
expressly waived.
9.2 Acceleration Payment. In the event that the
Obligations become due and payable in full pursuant to Subsection
9.1, FM Properties shall immediately pay Hibernia, in addition to
all other amounts due hereunder, an acceleration premium equal to
any amount which FM Properties would have been obligated to pay
Hibernia in the case of a voluntary prepayment for the early
termination of the Exchange Agreement pursuant to Section 3.2
hereof.
SECTION 10. FTX GUARANTEE
10.1 Guarantee by FTX. Pursuant to the FTX Guaranty and
the FCX Guaranty, FTX and FCX taken together, guarantee the full
repayment of principal and interest on the Notes. As additional
consideration for the Banks permitting the FCX Spin Off, and in
addition to the Obligations guaranteed by FTX pursuant to the FTX
Guaranty and by FCX pursuant to the FCX Guaranty, FTX hereby
unconditionally and irrevocably guarantees, solidarily as a
primary obligor and not merely as a surety, the due and punctual
payment of (i) the prepayment premium described in Section 3.2
hereof, (ii) the costs and expenses described in Section 11.4(a)
hereof or the acceleration payment described in Section 9.2
hereof, (iii) the indemnity payments described in Section 11.4(b)
hereof, and (iv) all other Obligations (other than the payment of
principal and interest on the Notes) of FM Properties pursuant to
this Agreement ("Other Amounts").
FTX waives presentment to, demand of payment from and
protest to FM Properties or FTX of any of the Other Amounts and
also waives notice of acceptance of its guarantee and notice of
protest for nonpayment. The obligations of FTX under this
Section shall not be affected by (a) the failure of the Agent to
assert Other Amounts against FM Properties under the provisions
of this Agreement, any other security documents, any
intercreditor document, or otherwise; (b) any rescission, waiver,
amendment or modification of any of the terms or provisions of
the Other Amounts; (c) the release of any guarantee or any
security held by the Agent for the Other Amounts; or (d) the
failure of the Agent to exercise any right or remedy against any
other guarantor of the Other Amounts.
FTX further agrees that its guarantee constitutes a
guarantee of payment when due and not of collection and waives
any right to require that any resort be had by the Agent to any
other guarantee or any security held for payment of the Other
Amounts or to any balance of any deposit account or credit on the
books of the Agent or any Bank in favor of FM Properties or to
any other partner of FM Properties or any other Person.
FTX further agrees that its guarantee shall continue to
be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on the
Other Amounts (including, without limitation, any payment
pursuant to this guarantee) is rescinded or must otherwise be
restored by the Agent upon the bankruptcy or reorganization of FM
Properties or otherwise.
Upon payment by FTX of the Other Amounts to the Agent
and the Banks as provided above in this Section, all rights of
FTX against FM Properties arising as a result thereof by way of
right of subrogation or otherwise shall in all respects be
subordinated and junior in right of payment to the prior payment
in full of all FM Properties Obligations to the Banks and shall
not be exercised by FTX prior to payment in full of all FM
Properties Obligations.
SECTION 11. MISCELLANEOUS
11.1 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be prior and
in writing or by telegraph, telecopy or telex and, unless
otherwise expressly provided herein, shall be deemed to have been
duly given or made upon receipt by the proper party, or when
delivered by hand, after three days when deposited in the mail,
air postage prepaid, or, in the case of telegraphic notice, when
delivered to the telegraph company, or, in the case of telex
notice, when sent, answerback received, addressed as follows in
the case of FM Properties, FTX, FCX, the Banks and the Agent, or
to such address as may be hereafter notified in writing by the
respective parties hereto and any future holders of the Notes:
FM Properties: FM Properties Operating Co.
1615 Poydras Street
P. O. Box 61119
New Orleans, Louisiana 70112/70161
Attention: Treasury Department
Telex No. 8109515386
Answerback FREE-SULPH NO
Telecopy No. (504 582-4511
FTX: Freeport-McMoRan Inc.
1615 Poydras Street
P. O. Box 61119
New Orleans, Louisiana 70112/70161
Attention: Treasury Department
Telex No. 8109515386
Answerback: FREE-SULPH NO
Telecopy No.: (504) 582-4511
FCX: Freeport-McMoRan Copper & Gold Inc.
1615 Poydras Street
P. O. Box 61119
New Orleans, Louisiana 70112/70161
Attention: Treasury Department
Telex No. 8109515386
Answerback: FREE-SULPH NO
Telecopy No.: (504) 582-4511
Agent: Hibernia National Bank
313 Carondelet Street
P. O. Box 61540
New Orleans, Louisiana 70112/70161
Attention: Manager, Commercial Banking
Telex No.: 587492
Answerback: HIBBANK-NLN
Telecopy No.: (504) 533-2060
Banks: Hibernia National Bank
313 Carondelet Street
P. O. Box 61540
New Orleans, Louisiana 70112/70161
Attention: Bruce Ross
Telex No.: 587492
Answerback: HIBBANK-NLN
Telecopy No.: (504) 533-2060
Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Ralph Iskander
Telex No.: 353006
Answerback: ABSCNYK
Telecopy No.: (212) 270-4711
11.2 Amendments and Waivers. With the written consent of
the Banks, FTX and FCX, FM Properties may, from time to time,
enter into written amendments, supplements or modifications
hereto for the purpose of adding any provisions to this Agreement
or the Notes or changing in any manner the rights of FM
Properties hereunder or thereunder, and the Banks may execute and
deliver to FM Properties a written instrument waiving, on such
terms and conditions as the Banks may specify in such instrument,
any of the requirements of this Agreement or the Notes or any
Default or Event of Default and its consequences. Any such
waiver and any such amendment, supplement or modification shall
be binding upon FM Properties, the Banks and all future holders
of the Notes. In the case of any waiver, FM Properties and the
Banks shall be restored to their former position and rights
hereunder and under the outstanding Notes, and any Default or
Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent
thereon.
11.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent or
the Banks, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative
and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 Payment of Expenses and Taxes. FM Properties agrees
(a) to pay or reimburse the Agent and the Banks for all their
costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes, the
FTX Guaranty and the FCX Guaranty, and any such other documents
including, without limitation, reasonable fees and disbursements
of counsel to the Banks and (b) to pay, indemnify, and hold the
Banks and Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the enforcement or
non-performance of this Agreement, the Notes, the FTX Guaranty
and the FCX Guaranty, unless caused by the misconduct or
negligence of the Banks or the Agent. The agreements in this
Subsection shall survive the termination of this Agreement.
11.5 The Agent. (a) The Banks acknowledge that
simultaneously with the FM Properties Transfer, the Banks
executed a Loan Participation Agreement dated as of May 5, 1995,
in which the Agent, as the holder of record of the Notes, sold a
participation interest in the Notes to Chemical. Simultaneously
with the execution of this Agreement, the Banks have executed a
first amendment to the aforesaid Loan Participation Agreement (i)
extending the maturity date of the Notes, (ii) providing for the
interest rate on the Notes after January 2, 1996, and (iii)
otherwise reflecting the terms of this Agreement. The Banks
agree that the right of the Agent and the Banks, between
themselves, shall be as set forth in said Loan Participation
Agreement as amended.
(b) FM Properties agrees to pay Agent, for Hibernia's
account, a non-refundable agent's fee of $15,000 on January 3,
1996. This payment is in addition to the obligation of FM
Properties to pay certain exchange fees and agent's fees to the
Agent pursuant to the Amended and Restated Agent's Fee Agreement
among FM Properties, FTX and the Agent dated as of May 5, 1995.
11.6 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto or
in connection herewith shall survive the execution and delivery
of this Agreement and the Notes.
11.7 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of
separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
11.8 Governing Law. This Agreement and the Notes and the
rights and obligations of the parties under this Agreement and
the Notes shall be governed by, and construed and interpreted in
accordance with, the law of the State of Louisiana.
11.9 Binding Effect. This Agreement shall become effective
when it shall have been executed by the Banks, FM Properties, FTX
and FCX and thereafter shall be binding upon and inure to the
benefit of the Agent, Banks, FM Properties, FTX and FCX, and
their respective successors and assigns, except that neither FM
Properties, FTX nor FCX shall have the right to assign its rights
hereunder or any interest herein without the prior written
consent
of the Banks. The Banks may assign all of their rights hereunder
without the prior written consent of FM Properties, FTX or FCX.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by themselves or
their proper and duly authorized officers as of the day and year
first above written.
FM PROPERTIES OPERATING COMPANY
BY: FREEPORT-McMoRan INC.,
Managing General Partner
By:
R. Foster Duncan
Its Treasurer
FREEPORT-McMoRan INC.
By:
R. Foster Duncan
Its Treasurer
FREEPORT-McMoRan COPPER & GOLD, INC.
By:
R. Foster Duncan
Its Treasurer
HIBERNIA NATIONAL BANK, as Agent
and Bank
By:
Bruce L. Ross
Its Vice President
CHEMICAL BANK, as Bank
By:
Its Vice President
EXHIBIT 11.1
FREEPORT-McMoRan INC.
COMPUTATION OF NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
1995 1994 1995 1994
-------- -------- -------- --------
(In Thousands, Except Per Share Amounts)
Primary:
Net income applicable to
common stock $24,503 $6,044 $309,379 $23,051
======= ====== ======== =======
Average common shares
outstanding 28,115 22,973 25,129 23,154
Common stock equivalents:
Stock options 345 61 193 102
------ ------ ------ ------
Common and common equivalent
shares 28,460 23,034 25,322 23,256
====== ====== ====== ======
Net income per common and
common equivalent share $.86 $.26 $12.22 $.99
==== ==== ====== ====
Fully diluted:
Net income applicable to
common stock:
Net income $24,503 $6,044 $309,379 $23,051
Plus preferred dividends - - 7,660 -
Plus interest, net of tax
effect, on convertible
subordinated debentures - - 15,921 -
------- ------ -------- -------
Net income applicable to
common stock $24,503 $6,044 $332,960 $23,051
======= ====== ======== =======
Average common shares
outstanding 28,115 22,973 25,129 23,154
Common stock equivalents:
Stock options 452 61 345 102
Convertible securities:
Preferred stock - - 913 -
Convertible subordinated
debentures - - 3,126 -
------- ------- ------ -------
Common and common equivalent
shares 28,567 23,034 29,513 23,256
====== ====== ====== ======
Net income per common and
common equivalent share $.86 $.26 $11.28 $.99
==== ==== ====== ====
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 28,746
<SECURITIES> 0
<RECEIVABLES> 49,605
<ALLOWANCES> 0
<INVENTORY> 106,699
<CURRENT-ASSETS> 218,678
<PP&E> 1,946,659
<DEPRECIATION> 972,315
<TOTAL-ASSETS> 1,255,790
<CURRENT-LIABILITIES> 205,296
<BONDS> 300,915
<COMMON> 199,014
0
50,084
<OTHER-SE> (111,711)
<TOTAL-LIABILITY-AND-EQUITY> 1,255,790
<SALES> 730,943
<TOTAL-REVENUES> 730,943
<CGS> 542,300
<TOTAL-COSTS> 542,300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,844
<INCOME-PRETAX> 89,422
<INCOME-TAX> 7,429
<INCOME-CONTINUING> 10,142
<DISCONTINUED> 340,424
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 303,379
<EPS-PRIMARY> 12.22
<EPS-DILUTED> 11.28
</TABLE>
