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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1993
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________to_______________
Commission file number 1-9164
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
Organized in Delaware I.R.S. Employer Identification No. 72-1067072
1615 Poydras Street, New Orleans, Louisiana 70112
Registrant's telephone number, including area code: (504) 582-4000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
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Depositary Units New York Stock Exchange
8 3/4% Senior Subordinated Notes due 2004 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes /X/ No _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/
The aggregate market value of the Depositary Units held by non-affiliates of
the registrant was approximately $981,011,000 on March 10, 1994.
Documents Incorporated by Reference
Portions of the registrant's Annual Report to unitholders for the year ended
December 31, 1993 (Parts I, II, III and IV).
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TABLE OF CONTENTS
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Page
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Part I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Items 1
and 2. Business and Properties . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . 1
Management . . . . . . . . . . . . . . . . . . . . . . 2
Agricultural Minerals. . . . . . . . . . . . . . . . . 3
Fertilizer Business . . . . . . . . . . . . . . . . 3
Sulphur Business. . . . . . . . . . . . . . . . . . 7
Oil. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Geothermal . . . . . . . . . . . . . . . . . . . . . . 11
Competition. . . . . . . . . . . . . . . . . . . . . . 11
Research and Development . . . . . . . . . . . . . . . 12
Environmental Matters. . . . . . . . . . . . . . . . . 12
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of Security Holders. . 13
Part II . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters. . . . . . . . . . . 14
Item 6. Selected Financial Data. . . . . . . . . . . . . . . . 14
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . 14
Item 8. Financial Statements and Supplementary Data. . . . . . 14
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. . . . . . . . . 14
Part III . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Item 10. Directors and Executive Officers of the Registrant . . 15
Item 11. Executive Compensation . . . . . . . . . . . . . . . . 16
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . . . . 17
Item 13. Certain Relationships and Related Transactions . . . . 19
Part IV . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K . . . . . . . . . . . . . . 19
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Index to Financial Statements . . . . . . . . . . . . . . . . . F-1
Report of Independent Public Accountants. . . . . . . . . . . . F-1
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . E-1
PART I
Items 1 and 2. Business and Properties.
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INTRODUCTION
Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), a
Delaware limited partnership organized in 1986, participates in one of the
largest and lowest cost phosphate fertilizer producers in the world through
its joint venture interest in IMC-Agrico Company, a Delaware general
partnership ("IMC-Agrico"). IMC-Agrico's business includes the mining and
sale of phosphate rock, the production, distribution and sale of phosphate
fertilizers, and the extraction of uranium oxide from phosphoric acid. FRP's
business also includes exploration for and mining, transportation and sale of
sulphur, and the development and production of oil reserves at Main Pass Block
299 ("Main Pass"), offshore Louisiana in the Gulf of Mexico. For information
with respect to industry segments, including export sales and major customers,
reference is made to Note 8 to the financial statements of FRP referred to on
page F-1 hereof (the "FRP Financial Statements").
On July 1, 1993, FRP and IMC Fertilizer, Inc. ("IMC")
contributed their respective phosphate fertilizer businesses, including the
mining and sale of phosphate rock and the production, distribution and sale
of phosphate chemicals, uranium oxide and related products, to IMC-Agrico.
As a result of the formation of IMC-Agrico, FRP expects that it and IMC
together will be able to achieve by the middle of 1995 at least $95 million
per year of savings in aggregate production costs and selling,
administrative and general expenses. In addition, FRP believes that the
location of several of the IMC-Agrico manufacturing and storage facilities
on the Mississippi River gives IMC-Agrico a competitive advantage over
other fertilizer producers in transporting fertilizers to the U.S.
farmbelt.
FRP has completed development of the Main Pass sulphur and oil
reserves which it discovered in 1988 and in which it has a 58.3% interest.
Sulphur production at minimal levels began during the second quarter of
1992. Sulphur production achieved full design operating rates of 5,500
long tons per day (approximately 2 million long tons per year) on schedule
in December 1993, and has since sustained production at or above that
level. (See "Sulphur Business - Production" under "Agricultural Minerals"
below.) Oil production commenced in the fourth quarter of 1991 and
averaged approximately 19,400 barrels per day during 1993. (See "Oil"
below.)
The Managing General Partners and the Special General Partners of
FRP are Freeport-McMoRan Inc. ("FTX"*) and FMRP Inc. ("FMRP"), a wholly
owned subsidiary of FTX. The current capitalization of FRP consists of an
aggregate 1% basic general partnership interest (the "FRP Basic Interest"),
units of limited partnership interest ("FRP Units") of which a portion is
deposited with Mellon Bank, N.A., as depositary units ("FRP Depositary
Units"), and additional units of general partnership interest ("FRP Unit
Equivalents"). FRP Depositary Units are listed and publicly traded on the
New York Stock Exchange ("NYSE"). Unless otherwise indicated, FRP Units,
FRP Depositary Units and FRP Unit Equivalents are sometimes hereinafter
referred to, individually and collectively, as "Partnership Units".
Including the FRP Basic Interest, FTX and FMRP, as of March 10,
1994, held Partnership Units representing an approximate 51.31% interest in
FRP, with the remaining interest being publicly owned and traded on the
NYSE. The public unitholders are entitled, through the cash distribution
for the fourth quarter of 1996, to receive minimum quarterly distributions
prior to any distribution on the partnership units held by FTX and FMRP.
Prior to the completion of Main Pass, FRP pursued a policy of funding the
cash distribution to unitholders from asset sales and borrowings under its
Credit Agreement, in addition to distributable cash from operations.
However, with the completion of the Main Pass development, FRP no longer
intends to supplement distributable cash with borrowings. For additional
information with respect to FRP distributions, reference is made to Note 3
to the FRP Financial Statements.
Fertiberia, S.L. ("Fertiberia"), a Spanish corporation, is the
successor through bankruptcy - reorganization proceedings to the
reorganized phosphate and nitrogen fertilizer businesses of FESA
Fertilizantes Espanoles, S.A. ("FESA"), formerly the principal
manufacturer of chemical fertilizers in Spain. On September 28, 1993
Freeport-McMoRan Management Services, S.A. ("FMMS"), an affiliate of FRP,
entered into a Management Agreement with Fertiberia pursuant to which FMMS
agreed to direct the management of all phases of Fertiberia's fertilizer
business for a one-year period in return for reimbursement of FMMS's costs.
FRP also entered into an Investment Agreement with FESA, whereby if FRP
determines during the same one-year period that Fertiberia is financially
viable and able to generate an adequate return to shareholders, FRP will
make an equity investment in Fertiberia and acquire a controlling interest
in Fertiberia. The terms of the investment will be negotiated by FRP and
FESA. If FRP determines that Fertiberia is not viable, it will have no
further obligation with respect to Fertiberia.
MANAGEMENT
As provided in the FRP partnership agreement, limited partners
may not take part in the management of FRP. FTX, as Administrative
Managing General Partner, exercises all management powers over the business
and affairs of FRP.
FRP does not have directors. Instead, directors and officers of
FTX, along with FRP's officers, perform all FRP management functions and
carry out the activities of FRP. Such officers of FRP continue to be
employees or officers of FTX or its subsidiaries, but, subject to certain
exceptions, are employed principally for the operation of FRP's businesses.
Pursuant to the FRP partnership agreement, FTX also furnishes general
executive, administrative, financial, accounting, legal, environmental,
tax, research and development, sales and certain other services to FRP and
is reimbursed by FRP for all direct and indirect costs in connection
therewith. FTX and FMRP Inc. do not receive any compensation as general
partners of FRP. For additional information with respect to management,
reference is made to Note 6 to the FRP Financial Statements.
AGRICULTURAL MINERALS
FRP's agricultural minerals segment consists of FRP's interest in
the IMC-Agrico fertilizer business and FRP's sulphur business.
Fertilizer Business
IMC-Agrico Company
On July 1, 1993, FRP and IMC contributed their respective
phosphate fertilizer businesses, including the mining and sale of phosphate
rock and the production, distribution and sale of phosphate chemicals,
uranium oxide and related products, to IMC-Agrico. At the time, FRP and
IMC were among the largest integrated phosphate fertilizer producers in the
world and both were among the lowest cost producers. As a result of the
formation of IMC-Agrico, FRP expects that it and IMC together will be able
to achieve by the middle of 1995 at least $95 million per year of savings
in aggregate production costs and selling, administrative and general
expenses. Under the IMC-Agrico Partnership Agreement (the "Partnership
Agreement"), IMC-Agrico will distribute quarterly to the Partners
Distributable Cash, as defined in the Partnership Agreement, based on
sharing ratios that vary from year to year for the first five fiscal years
ending June 30, 1998, and are based on the parties' initial projections of
their respective contributions to the cash flow of IMC-Agrico and on an
equal sharing of the anticipated synergistic savings. For further
information, see Note 2 to the FRP Financial Statements.
IMC holds its interest in IMC-Agrico through a special purpose
Delaware corporation (the "IMC Partner"), and FRP holds its interest in
IMC-Agrico through a special purpose Delaware limited partnership (the "FRP
Partner"). The managing partner of IMC-Agrico is a Delaware corporation
which is jointly owned by the IMC Partner and the FRP Partner, but as to
which the IMC Partner has the right to elect a majority of the directors in
the absence of a Material Breach Event, as defined in the Partnership
Agreement. IMC-Agrico is governed by a policy committee (the "Policy
Committee") with equal representation from the IMC Partner and the FRP
Partner, which establishes policies relating to the strategic direction of
IMC-Agrico and assures that such policies are implemented. The Policy
Committee has the sole authority to make certain Major Decisions, as
defined in the Partnership Agreement, including the creation of major
indebtedness, major acquisitions and dispositions, and approval of budgets,
subject to the authority of the Chief Executive Officers of the FRP Partner
and the IMC Partner to resolve disputes.
Phosphate Rock
IMC-Agrico mines phosphate rock in Florida for both internal
production of phosphoric acid at plants in Florida and Louisiana and
phosphate rock sales to external customers under long-term contracts and in
the spot market. The rock is reacted with sulphuric acid, produced in part
from sulphur from Main Pass, to provide phosphoric acid which is then
further processed at IMC-Agrico's fertilizer plants. IMC-Agrico's annual
phosphate rock capacity is approximately 31.5 million tons per year and
accounts for approximately 55% of U.S. phosphate rock capacity and 15% of
world capacity. The phosphate rock mines contributed by FRP and IMC to
IMC-Agrico produced 22.3 million tons of phosphate rock in fiscal year
ended June 30, 1993 compared to a total production by U.S. phosphate mines
of 45.1 million tons of phosphate rock.
IMC-Agrico's phosphate mining operations and production plants
are located in Polk, Hillsborough, Hardee and Manatee Counties in central
Florida. Production has been at less than full capacity because of reduced
demand and actions to control inventory. IMC-Agrico's Kingsford mine was
idled in May 1993 due to weak market conditions. In February 1994, IMC-
Agrico restarted Kingsford in order to meet product grade specifications of
existing phosphate rock supply contracts. In July 1993, IMC-Agrico had
temporarily reduced phosphate rock mining operations at Four Corners, its
largest mine, in conjunction with its temporary curtailment of diammonium
phosphate ("DAP") production; however, in January 1994, Four Corner mine
increased production in conjunction with the restart of IMC-Agrico's Taft
plant in December 1993. See "Phosphate Chemicals" below. In October 1993,
IMC-Agrico reopened its Clear Springs mine and idled its Payne Creek mine
for operational reasons. IMC-Agrico's results of operations will not be
materially affected by the idling of the Payne Creek phosphate rock mine
because the product previously produced at this mine is being produced at
other mines. IMC-Agrico also leases, under a long-term contract, two
phosphate rock processing plants from Brewster Phosphates. The annual
capacity of these two plants is approximately 5 million tons. Until
recently, one of the two plants was operated for screening pebble products,
while the second plant remains closed indefinitely subject to improved
market conditions.
As of December 31, 1993, FRP, through IMC-Agrico, had proved and
probable reserves of 215.2 million tons, plus an additional 196.1 million
tons of phosphate rock deposits. (Deposits are ore bodies which require
additional economic and mining feasibility studies before they can be
classified as reserves.) For information with respect to FRP's phosphate
rock reserves, reference is made to Note 9 to the FRP Financial Statements.
For information concerning FRP's sales of phosphate rock, see "Selected
Financial and Operating Data" on page 13 of FRP's 1993 Annual Report to
unitholders, which is incorporated herein by reference.
On December 31, 1993, FRP concluded the sale of approximately
3,500 acres of phosphate mining land in Polk County, Florida to Tampa
Electric Company, a public utility, for an aggregate purchase price of
$12.5 million, plus interest from the date of the initial agreement. The
buyer will assume FRP's reclamation obligations on the land, resulting in
substantial savings to FRP. FRP reported a gain of $10.7 million in 1993
related to this sale. This previously mined land is an example of the
conversion of former phosphate mining lands to industrial use. This
transaction is not necessarily indicative of values that may be achieved in
subsequent transactions.
Phosphate Chemicals
IMC-Agrico manufactures fertilizer and related products,
including sulphuric acid, phosphoric acid, granulated phosphates
(principally DAP, monoammonium phosphate ("MAP") and granular triple
superphosphate ("GTSP")), anhydrous ammonia and urea. IMC-Agrico's
fertilizer operations consist of six plants, three in central Florida and
three on the Mississippi River in Louisiana.
IMC-Agrico's plants located in Florida consist of New Wales,
Nichols and South Pierce. The New Wales plant, located near Mulberry,
Florida, has facilities for the production of sulphuric acid, phosphoric
acid, DAP, MAP and GTSP. Currently idled, the Nichols facility, located at
Nichols, Florida, has facilities for the production of sulphuric acid,
phosphoric acid and DAP. Nichols was idled in May 1993 in response to
extremely depressed market conditions. However, in March 1994, due to
improving market conditions, IMC-Agrico announced that it would resume
production at the Nichols facility in May 1994. South Pierce, located at
Bartow, Florida, has facilities for the production of sulphuric acid,
phosphoric acid, GTSP and technical grade DAP and MAP for industrial uses.
IMC-Agrico's Faustina, Uncle Sam and Taft plants are located in
Louisiana. The Faustina plant, located at Donaldsonville, Louisiana, has
facilities for the production of anhydrous ammonia, urea, sulphuric acid,
phosphoric acid, DAP and MAP. The Uncle Sam plant, located at Uncle Sam,
Louisiana, has facilities for the production of sulphuric acid and
phosphoric acid. The Taft plant, located at Taft, Louisiana, has
facilities for the manufacture of DAP and MAP. The Taft plant, idled in
July 1993, was restarted in December 1993.
IMC-Agrico's plants have an estimated annual sustainable capacity
to produce 530,000 tons of anhydrous ammonia, 260,000 tons of urea,
approximately 10.4 million tons of sulphuric acid, and approximately 8.2
million tons of granulated phosphates. IMC-Agrico's phosphoric acid
capacity is approximately 4.0 million tons of contained P205*,
approximately 32% of U.S. production capacity and 11% of world capacity.
With significant production curtailments in 1993, IMC-Agrico and the assets
contributed to IMC-Agrico by the Company and IMC produced approximately 8.5
million tons of sulphuric acid, 3.3 million tons of phosphoric acid, and
6.4 million tons of granulated phosphates.
Phosphate rock, sulphur and ammonia are the three principal raw
materials used in the production of phosphate chemicals. Phosphate rock is
supplied by IMC-Agrico's Florida mines. FRP and IMC both have interests in
a joint venture which began mining sulphur reserves at Main Pass in April
1992. FRP continues to operate the Main Pass joint venture through
Freeport Sulphur Company ("FSC"), its sulphur division. FRP and IMC
entered into an agreement to supply IMC-Agrico with its sulphur
requirements. FRP supplies its share of the requirements through FSC. IMC
supplies its share of the requirements through its share of Main Pass
production and purchases from third parties. IMC-Agrico's ammonia needs
are fulfilled primarily by third party domestic suppliers under long-term
contracts and by internal production at its Faustina plant.
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* P205 is an industry term indicating a product's phosphate content
measured chemically in units of phosphorous pentoxide.
Marketing
Since July 1, 1993, all fertilizer marketing functions for FRP
have been handled by IMC on behalf of IMC-Agrico. IMC-Agrico markets
products throughout the eastern two-thirds of the United States in the
domestic market and, primarily through the American Phosphate Export
Association ("Amphos"), a Webb-Pomerene association, overseas. Phoschem
and Phosrock, the primary units of Amphos, market phosphate chemical
fertilizers and phosphate rock, respectively, for IMC-Agrico and two U.S.
firms.
Since the formation of IMC-Agrico, IMC-Agrico had used
approximately 54% of its phosphate rock shipments at its plants in Florida
and Louisiana, with most of the balance being sold in the domestic market.
Approximately 53% of IMC-Agrico's granulated phosphate fertilizer shipments
in 1993 were sold in the domestic market, with the balance sold abroad.
Although phosphate fertilizer sales are fairly constant from
month to month, the largest sales periods occur prior to the fall and
spring planting of agricultural crops. Historically, domestic sales taper
off after the spring planting season but this drop in domestic sales occurs
at a time when major international buyers purchase product for mid-year
delivery.
World phosphate prices declined to a nearly 20 year low during
mid-1993, due to a number of factors, including a significant decline in
import demand by China, a sharp increase in U.S. producer held stocks of
finished phosphate fertilizers to record levels, intense competition in
offshore markets traditionally served by U.S. producers, particularly MAP
from the former Soviet Union, unsettled import policies in other key
overseas markets such as India and continued lower demand in Europe. As a
result, FRP's results in 1992 and 1993 have been adversely affected. FRP
believes that the price outlook for phosphate fertilizers has improved
substantially based in part on a return by China to the marketplace at more
traditional volume levels, a significant reduction in the stocks of
finished phosphate materials held by producers (in spite of a moderate
improvement in operating rates) and an improved domestic demand outlook for
this coming spring season due to last year's poor harvest caused by the
widespread flooding in the Midwest.
Uranium
The phosphate rock used in the production of phosphoric acid
contains small amounts of uranium. At its uranium extraction facilities,
IMC-Agrico extracts and processes uranium oxide ("yellowcake") as a by-
product of phosphoric acid. Production of yellowcake is dependent on the
quantity and uranium content of phosphoric acid produced by its host
plants. Yellowcake, after further processing, is used as a fuel by
electric utilities. Although IMC-Agrico has the capacity to extract
uranium oxide at several phosphoric acid plants, production has been
suspended at certain of the plants because of the depressed market price of
uranium oxide, and, at present, uranium does not significantly contribute
to IMC-Agrico's revenues.
Operating and Environmental Hazards
The production of fertilizers involves the handling of chemicals,
some of which may have the potential, if released in sufficient quantities,
to expose IMC-Agrico to certain liabilities. However, IMC-Agrico has a
program in place to minimize the potential for such releases. FRP, through
FTX, and IMC-Agrico carry insurance for certain of these risks, and
management believes that the types and limits of such insurance coverages
are adequate and consistent with prudent business practices.
Sulphur Business
FRP, through FSC, is involved in the exploration for and mining,
purchase, transportation, terminaling and sale of sulphur. Most of FRP's
sulphur assets are located in the Gulf of Mexico offshore Louisiana.
Production
During 1993, FRP produced sulphur from its Caminada and Main Pass
sulphur mines located in federal waters in the Gulf of Mexico. The
Caminada and Main Pass mines utilize the Frasch Mining process, which
involves the drilling of wells and the injection of superheated water into
the underground sulphur deposit to melt the solid sulphur, which is then
brought to the surface in liquid form. FRP has been using the Frasch
process for over 80 years. FRP has also developed technology which allows
it to use sea water in the Frasch process. FRP is not aware of any other
company that has developed Frasch sulphur mines using superheated sea
water. For additional information with respect to FRP's sales, reference
is made to "Selected Financial and Operating Data" appearing on page 13 of
FRP's 1993 Annual Report to unitholders, which is incorporated herein by
reference.
Main Pass, discovered by FRP in 1988, currently has the highest
production rate of any sulphur mine in the world and the largest existing
Frasch sulphur reserve in North America. The Main Pass offshore complex,
more than a mile in length, is one of the largest structures of its type in
the world and the largest in the Gulf of Mexico. The Main Pass mine, which
began initial production at minimal levels in the second quarter of 1992,
is estimated to contain proved recoverable sulphur reserves totaling 66.2
million long tons (38.6 million long tons net to FRP) at December 31, 1993.
The mine is owned 58.3% by FRP, 25% by IMC and 16.7% by Homestake Sulphur
Company ("Homestake"). The development and production of the Main Pass
reserves are being conducted by FTX, through FSC, on behalf of FRP, as
operator of the Main Pass joint venture, pursuant to a management services
agreement. At Main Pass, sulphur production reached design production
capacity of 5,500 long tons per day (approximately 2 million long tons per
year) on schedule in December 1993 and has since sustained production at or
above that level. Main Pass is subject to a 12.5% federal royalty based on
net mine revenues.
Because of the significant improvements in Main Pass sulphur
production, declining production rates at Caminada and falling sulphur
prices, the marginally profitable Caminada operation ceased in January
1994. The shutdown of Caminada will have no significant impact on FRP's
reported earnings.
The primary fuel source at Main Pass is natural gas. A contract
with an initial term of 20 years has been executed for the purchase of
natural gas at market based prices.
FRP currently supplements its sulphur production by purchasing
from third party sources. A significant quantity of this sulphur is
purchased from companies which recover sulphur in the production of oil and
natural gas and the refining of petroleum products.
For information with respect to FRP's sulphur reserves, reference
is made to Note 9 to the FRP Financial Statements.
Marketing
The sulphur produced by FRP is transported by barge to its
storage, handling and shipping facilities located at Port Sulphur,
Louisiana, where recovered sulphur purchased from others or transported for
others may also be received. Sulphur is transported from Port Sulphur by
barge to IMC-Agrico and customer plants on the Mississippi River and by
tanker to FRP's terminal at Tampa, Florida. Similar facilities at
Pensacola, Florida, and Galveston, Texas, are used for storage, handling
and shipping of sulphur purchased from others or transported for others.
FRP also processes and transports for a fee both IMC's and Homestake's
share of Main Pass sulphur and serves as marketing agent for Homestake.
FRP's sulphur is used in the manufacture of sulphuric acid,
which, in turn, is primarily used to produce phosphoric acid, the basic
material for the production of phosphate fertilizers. The phosphate
fertilizer industry, including the IMC-Agrico phosphate facilities,
accounts for approximately 92% of FRP's total sulphur sales. A small
number of companies consume a large portion of the total sulphur consumed
in the United States. Substantially all of the sulphur sold by FRP is
supplied under contracts having a term of one to three years. FRP also had
foreign sales of 12,800 tons and 13,400 tons of sulphur during 1992 and
1993, respectively. FRP has entered into a long-term contract to supply
IMC-Agrico Company with sulphur. For additional information with respect
to FRP's sales of sulphur, reference is made to "Selected Financial and
Operating Data" appearing on page 13 of FRP's 1993 Annual Report to
unitholders.
Globally, approximately 60% of annual sulphur demand arises from
the production of phosphate fertilizers. Many of the same factors which
have adversely impacted global fertilizer demand have caused sulphur demand
to decline for the past five years. Despite a decline in mined sources of
sulphur, global inventories increased in 1993 due to a large increase in
vatting in western Canada. The Company believes, however, that sales
agreements in place with IMC-Agrico and other customers give it significant
insulation against a potential market surplus. Sulphur prices at Tampa,
the principal market for the Company's sulphur, fell to under $55 per long
ton at the end of 1993 compared to $140 per long ton in early 1991.
Exploration
Currently, FRP has interests in three other sulphur leases in the
Gulf of Mexico which expire in 1998. In 1993, FRP elected not to drill
three offshore leases which were subsequently allowed to expire. In
addition, FRP has evaluated the results of its exploration efforts in Egypt
located in the North Sinai Desert. This location is estimated to contain
10.1 million long tons of sulphur. FRP does not plan to develop this
project in the immediate future but will retain its concession by
performing minimal maintenance activities.
OIL
The Main Pass project also contains oil* reserves associated with
the same caprock reservoir at Main Pass as the sulphur reserves. The
development and production of these Main Pass reserves are being conducted
by FTX on behalf of FRP, as operator of the joint venture, pursuant to a
management services agreement. As of December 31, 1993, FRP estimates that
remaining proved recoverable oil reserves at Main Pass are 20.8 million
barrels (10.0 million barrels net to FRP). FRP is engaged in oil
operations only at Main Pass and does not currently intend to pursue oil
operations that are not related to Main Pass.
For information relating to estimates of FRP's net interests in
proved oil reserves as of December 31, 1993, and for supplementary
information relating to estimates of discounted future net cash flows from
proved oil reserves, and changes in such estimates, reference is made to
Note 9 to the FRP Financial Statements. No favorable or adverse event or
major discovery has occurred since December 31, 1993, that FRP believes
would cause a significant change in estimated proved reserves.
Production and Marketing Conditions
Since completion of development drilling in mid-April 1993, oil
production for the Main Pass joint venture has increased significantly and
averaged over 20,000 barrels of oil per day ("BOPD") for December 1993.
Because of the complexities of producing sour crude in an offshore
environment, periodic curtailments down to 5,500 BOPD may be required to
perform maintenance repairs. The Company's share of oil production was
approximately 3.4 million barrels for 1993. Production in 1994 is expected
to approximate that of 1993, with the anticipated drilling of additional
wells expected to offset a production decline in existing wells in 1994.
Production is expected to decline thereafter. For information concerning
FRP's sales during the year ended December 31, 1993, reference is made to
"Selected Financial and Operating Data" appearing on page 13 of FRP's 1993
Annual Report to unitholders, incorporated herein by reference. For
information concerning the interaction between concurrent oil and sulphur
production, see "Sulphur Business" above.
_________
* As used in this portion of the report, "oil" refers to crude oil,
condensate and natural gas liquids.
Oil prices have historically exhibited, and can be expected to
continue to exhibit, volatility as a result of such factors as political
uncertainty in the Middle East, actions of the Organization of Petroleum
Exporting Countries and changes in worldwide weather and economic
conditions. Main Pass oil contains sulphur and is generally heavier than
other Gulf Coast crude oils. As a result, it sells at a discount relative
to Gulf Coast crude oils containing less sulphur and to lighter grade crude
oils.
Acreage
FRP's interest in Main Pass, in federal waters offshore
Louisiana, constitutes the only oil property owned by FRP. The property
consists of 1,125 gross acres (656 acres net to FRP) and is fully developed
within the meaning of governmental reporting requirements.
FRP possesses a leasehold interest in its Main Pass oil property
which is maintained by production and will remain in effect until
production and drilling and development operations cease. FRP believes
that the lease terms are sufficient to allow for reasonable development of
the reserves.
Operating Hazards
FRP's oil activities are subject to all of the risks normally
incident to the development and production of sour oil, including blowouts,
cratering and fires, each of which could result in injury to personnel
and/or damage to property. Additionally, offshore operations are subject
to marine perils, including hurricanes and other adverse weather
conditions. FRP, through FTX, carries insurance for certain of these
risks, and management believes that the types and limits of such insurance
coverages are adequate and consistent with prudent business practices.
Government Regulation
Domestic oil operations are subject to extensive state and
federal regulation. Compliance is often burdensome, and failure to comply
carries substantial penalties. The heavy and increasing regulatory burden
on the oil industry increases the cost of doing business and, consequently,
affects profitability.
Federal laws and regulations impose liability upon the lessee
under a federal lease for the cost of cleanup of pollution resulting from a
lessee's operations, and such lessee could be subject to liability for
pollution damages. A serious incident of pollution may also result in a
requirement to suspend or cease operations in the particular area. FRP,
through FTX, carries insurance against some, but not all, of these risks.
For further information with respect to environmental risks and FRP's
responses thereto, see "Environmental Matters" below.
GEOTHERMAL
In April 1993, FRP sold its remaining interests in producing
geothermal properties for $63.5 million to Calpine Corporation, consisting
of $23 million in cash and interest-bearing notes totaling $40.5 million,
recognizing a $31 million charge to expense and recording a $9 million
charge for impairment of its undeveloped geothermal properties. These
notes provided that the entire principal amount could be repaid at a
discount according to a specified schedule. FRP received a prepayment of
$36.9 million including accrued interest, in February 1994, which
represented full payment on these notes.
In 1993 FRP sold its undeveloped geothermal energy assets located
in the Salton Sea area of the Imperial Valley of southern California to
Magma Power Company, and certain of its affiliates, for consideration
consisting of a current cash payment and the right to future payments based
on the development of geothermal projects on its former leases. FRP still
retains its undeveloped geothermal energy assets located in the Medicine
Lake area of northern California.
COMPETITION
The fertilizer and phosphate rock mining industries are highly
competitive. In this global business, IMC-Agrico faces stiff competition
from overseas producers, most of which are state supported, especially
those in North Africa, and most recently those in the former Soviet Union.
In the United States, IMC-Agrico competes against a number of major
phosphate fertilizer producers, including large cooperatives. FRP, through
IMC-Agrico, is one of the largest and lowest cost producers of phosphate
rock and the largest integrated producer of phosphate fertilizers in the
world. FRP's significant phosphate rock and sulphur reserves and
production, through IMC-Agrico and FSC, substantially reduce the
sensitivity of its phosphate fertilizer costs to changes in raw material
prices. The strategic location of fertilizer operations on the Mississippi
River system reduces transportation costs for finished products sold in the
Midwest farmbelt. FRP believes that its internal production of raw
materials, through FSC and IMC-Agrico, and the strategic location of
IMC-Agrico's operations provide it with a competitive advantage over other
United States based producers. Nevertheless, world phosphate fertilizer
prices declined to a nearly 20-year low during mid-1993, due to a number of
factors, including a significant decline in import demand by China, a sharp
increase in U.S. producer held stocks of finished phosphate fertilizers to
record levels, intense competition in offshore markets traditionally served
by U.S. producers, particularly MAP from the former Soviet Union, unsettled
import policies in other key overseas markets such as India and continued
lower demand in Europe. As a result, FRP's results in 1992 and 1993 have
been adversely affected. FRP believes that the price outlook for phosphate
fertilizers has improved substantially based in part on a return by China
to the marketplace at more traditional volume levels, a significant
reduction in the stocks of finished phosphate materials held by producers
(in spite of a moderate improvement in operating rates) and an improved
domestic demand outlook for this coming spring season due to last year's
poor harvest caused by the widespread flooding in the Midwest.
In 1993, three companies operating domestic Frasch sulphur mines
accounted for approximately 18% of total domestic consumption of sulphur in
all forms. Domestic recovered sulphur, produced by more than 50 companies
at more than 130 refineries and gas treatment plants, supplied
approximately 55%, while imported sulphur, primarily from Canada and
Mexico, accounted for approximately 15% of domestic sulphur consumption.
The remaining 12% of domestic sulphur consumption was met in the form of
sulphuric acid produced in metals smelting operations and from imported
sulphuric acid. FRP's production of sulphur accounts for approximately 12%
of domestic and 4% of world elemental sulphur production for the year ended
December 31, 1993. With the achievement of full operations at Main Pass at
the end of 1993, FRP became the largest Frasch sulphur producer in the
world.
A large number of companies and individuals are engaged in the
development and production of oil. Many of these companies possess
financial resources equal to or greater than those of FRP.
RESEARCH AND DEVELOPMENT
In February 1993, FTX outsourced its corporate engineering,
research and development, corporate environmental and corporate safety
functions and, to that end, contracted with a new company initially owned
and staffed by former employees of FTX, Crescent Technology, Inc.
("Crescent"), that furnishes similar services to FTX. Crescent owns and
operates laboratory and pilot plant facilities at Belle Chasse, Louisiana,
where mineral analyses, metallurgical work and other research and testing
are conducted which contribute to FTX's commercial operations, including
those of FRP. Additionally, Crescent maintains engineering and mine
development groups in New Orleans, Louisiana, which provide the
engineering, design and construction supervision activities required to
implement new ventures and apply improvements to existing operations of
FRP.
ENVIRONMENTAL MATTERS
FTX and FRP have a history of commitment to environmental
responsibility. Since the 1940s, long before the general public recognized
the importance of maintaining environmental quality, FTX has conducted
preoperational, bioassay, marine ecological and other environmental surveys
to ensure the environmental compatibility of its operations. FTX's
Environmental Policy commits its operations to full compliance with
applicable laws and regulations. FTX has contracted with Crescent to
develop and implement corporatewide environmental programs that include the
activities of FRP and to study and implement methods to reduce discharges
and emissions. For information concerning the outsourcing of certain of
FTX's functions to Crescent, see "Research and Development" above.
FRP's operations are subject to federal, state and local laws and
regulations relating to the protection of the environment. Exploration,
mining, development and production of natural resources, and the chemical
processing operations of IMC-Agrico, like similar operations of other
companies, may affect the environment. Moreover, such operations may
involve the extraction, handling, production, processing, treatment,
storage, transportation and disposal of materials and waste products which,
under certain conditions, may be toxic or hazardous and expressly regulated
under environmental laws. Present and future environmental laws and
regulations applicable to the operations of FRP or IMC-Agrico may require
substantial capital expenditures or affect their operations in other ways
that cannot now be accurately predicted.
FRP has made, and continues to make, expenditures at its
operations for protection of the environment. In 1992, at a cost of $35.7
million, FRP completed the replacement of two sulphuric acid production
units at an existing fertilizer plant thereby substantially reducing air
emissions and increasing plant efficiency. As successor to FRP, IMC-Agrico
completed at the end of 1993, at a cost of $27 million, an innovative
drainage and cover plan for phosphogypsum storage areas in Louisiana to
substantially reduce substances in wastewater discharged from its
fertilizer operations. Future operations of this kind are projected to
require additional investments of $30 million between 1994 and 2004.
Continued government and public emphasis on environmental matters
can be expected to result in increased future investments for environmental
controls. On analyzing its operations and those of IMC-Agrico in relation
to current and anticipated environmental requirements, FRP does not expect
that these investments will have a significant impact on its future
operations or financial condition. For additional information concerning
environmental matters, reference is made to the information set forth
in Item 7 below.
Item 3. Legal Proceedings.
-----------------
Although FRP may be from time to time involved in various legal
proceedings of a character normally incident to the ordinary course of its
businesses, FRP believes that potential liability in any such pending or
threatened proceedings would not have a material adverse effect on the
financial condition or results of operations of FRP. FRP, through FTX,
maintains liability insurance to cover some, but not all, potential
liabilities normally incident to the ordinary course of its businesses as
well as other insurance coverages customary in its businesses, with such
coverage limits as management deems prudent.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
-------------------------------------------------
The information set forth under the captions "FRP Units" and
"Cash Distributions", on the inside back cover of FRP's 1993 Annual Report
to unitholders is incorporated herein by reference. As of March 10, 1994,
there were approximately 18,606 record holders of FRP Units.
Item 6. Selected Financial Data.
-----------------------
The information set forth under the caption "Selected Financial
and Operating Data" on page 13 of FRP's 1993 Annual Report to unitholders
is incorporated herein by reference.
FRP's ratio of earnings to fixed charges for each of the years
1989 through 1993, inclusive, was 4.8x, 16.5x, 4.4x, 1.0x and a shortfall
of $233.5 million, respectively. For purposes of this calculation,
earnings are income from continuing operations before fixed charges. Fixed
charges are interest and that portion of rent deemed representative of
interest.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
-----------------------------------------------------------
IMC-AGRICO COMPANY
Freeport-McMoRan Resource Partners, Limited Partnership (FRP) and IMC
Fertilizer, Inc. (IMC) formed a joint venture (IMC-Agrico Company),
effective July 1, 1993, for their respective phosphate fertilizer
businesses, including phosphate rock and uranium. IMC-Agrico Company is
governed by a policy committee having equal representation from each
company and is managed by IMC. Combined annual savings of at least $95
million in production, marketing, and general and administrative costs are
expected to result from this transaction, the full effect beginning by the
end of the second year of operations. The operating efficiencies
achievable by the joint venture should enable it to generate positive cash
flow in a low-price environment, such as that experienced in 1993, and to
be in a position to earn significant profits if product prices rise to
historical levels. As discussed below and in Note 4 to the financial
statements, significant restructuring charges were recorded in connection
with this transaction.
As a result of the joint venture, FRP is engaged in the phosphate rock
mining, fertilizer production, and uranium oxide extraction businesses only
through IMC-Agrico Company. FRP will continue to operate its sulphur and
oil businesses. FRP has varying sharing ratios in IMC-Agrico Company, as
discussed in Note 2 to the financial statements, which were based on the
projected contributions of FRP and IMC to the cash flow of the joint
venture and on an equal sharing of the anticipated savings.
FRP transferred the assets it contributed to IMC-Agrico Company at
their book carrying cost and proportionately consolidates its interest in
IMC-Agrico Company. As a result, FRP's operating results subsequent to the
formation of IMC-Agrico Company vary significantly in certain respects from
those previously reported. Phosphate fertilizer realizations and unit
production costs were fundamentally changed as the majority of the FRP
contributed fertilizer production facilities are located on the Mississippi
River, whereas the IMC contributed fertilizer production facilities are
located in Florida. Fertilizer produced on the Mississippi River commands
a higher sales price in the domestic market because of its proximity to
markets; however, raw material transportation costs at the Florida
facilities are lower for phosphate rock, partially offset by increased
sulphur transportation costs.
1993 RESULTS OF OPERATIONS COMPARED WITH 1992
After discussions with the staff of the Securities and Exchange Commission
(SEC), FRP is reclassifying certain expenses and accruals previously
recorded in 1993 as restructuring and valuation of assets. In response to
inquiries, FRP advised the SEC staff that $3.2
million originally reported as restructuring and valuation of assets
represented the cumulative effect of changes in accounting principle
resulting from the adoption of the new accounting policies that FRP
considered preferable, as described in Note 1 to the financial statements.
FRP also informed the SEC staff of the components of other charges
included in the amount originally reported as restructuring and valuation
of assets. FRP concluded that the reclassification and the related
supplemental disclosures more accurately reflect the nature of these
charges to 1993 net income in accordance with generally accepted accounting
principles. These reclassifications had no impact on net income or net
income per share.
FRP incurred a net loss of $246.1 million ($2.37 per unit) for 1993
compared with net income of $20.2 million ($.20 per unit) for 1992.
Results for 1993 were adversely impacted by charges totaling $197.3 million
($1.90 per unit) related to (a) restructuring the administrative
organization at Freeport-McMoRan Inc. (FTX), the general partner of FRP
(Note 4), (b) asset sales/recoverability charges (Note 4), (c) adjustments
to general and administrative expenses and production and delivery costs
discussed below, and (d) changes in accounting principle, discussed further
in Note 1 to the financial statements. Excluding these items, 1993
earnings were lower reflecting significant decreases in phosphate
fertilizer, phosphate rock, sulphur, and oil revenues, primarily due to
reduced sales volumes and average market prices for these products (see
Selected Financial and Operating Data). Depreciation and amortization
expense declined primarily because of reduced sales volumes. The reduction
in general and administrative expenses reflects the benefits from the 1993
restructuring activities, partially offset by charges resulting from the
restructuring project discussed below. Interest expense increased, as no
interest was capitalized subsequent to the Main Pass sulphur operations
becoming operational for accounting purposes in July 1993.
Restructuring Activities. During the second quarter of 1993, FTX undertook
a restructuring of its administrative organization. This restructuring
represented a major step by FTX to lower its costs of operating and
administering its businesses in response to weak market prices of the
commodities produced by its operating units. As part of this
restructuring, FTX significantly reduced the number of employees engaged in
administrative functions, changed its management information system (MIS)
environment to achieve efficiencies, reduced its needs for office space,
outsourced a number of administrative functions, and implemented other
actions to lower costs. As a result of this restructuring process, which
included the formation of IMC-Agrico Company, the level of FRP's
administrative cost has been reduced substantially over what it would have
been otherwise, which benefit will continue in the future. However, the
restructuring process entailed incurring certain one-time costs by FTX, a
portion of which were allocated to FRP pursuant to its management services
agreement with FTX.
FRP's restructuring costs totaling $33.9 million, including $22.1
million allocated from FTX based on historical allocations, consisting of
the following: $15.5 million for personnel related costs; $7.0 million
relating to excess office space and furniture and fixtures resulting from
the staff reduction; $1.8 million relating to the cost to downsize its
computing and MIS structure; $8.8 million related to costs directly
associated with the formation of IMC-Agrico Company; and $.8 million of
deferred charges relating to FRP's credit facility which was substantially
revised in June 1993. As of December 31, 1993, the remaining accrual for
these restructuring costs totaled $3.1 million.
In connection with the restructuring project, FRP changed its
accounting systems and undertook a detailed review of its accounting
records and valuation of various assets and liabilities. As a result of
this process, FRP recorded charges totaling $24.9 million, comprised of the
following: (a) $10.0 million of production and delivery costs consisting
of $6.3 million for revised estimates of environmental liabilities and $3.7
million primarily for adjustments in converting accounting systems, (b)
$7.6 million of depreciation and amortization costs consisting of $6.5
million for estimated future abandonment and reclamation costs and $1.1
million for the write-down of miscellaneous properties, and (c) $7.3
million of general and administrative expenses consisting of $4.0 million
to downsize FRP's computing and MIS structure and $3.3 million for the
write-off of miscellaneous assets.
Agricultural Minerals Operations
FRP's agricultural minerals segment, which includes its fertilizer,
phosphate rock, and sulphur businesses, reported a loss of $55.9 million on
revenues of $619.3 million for 1993 compared with earnings of $18.0 million
on revenues of $799.0 million for 1992. Significant items impacting the
segment earnings are as follows (in millions):
Agricultural minerals earnings - 1992 $ 18.0
Major increases (decreases)
Sales volumes (67.4)
Realizations (103.2)
Other (9.1)
------
Revenue variance (179.7)
Cost of sales 81.4*
General and administrative and other 24.4*
(73.9)
------
Agricultural minerals earnings - 1993 $(55.9)
======
- - - -------
* Includes $17.5 million in cost of sales and $7.3 million in general and
administrative expenses resulting from the restructuring project discussed
above.
Weak industrywide demand and changes attributable to FRP's
participation in IMC-Agrico Company resulted in FRP's 1993 reported sales
volumes for diammonium phosphate (DAP), its principal fertilizer product,
declining 17 percent from that of a year-ago. The weakness in the
phosphate fertilizer market prompted IMC-Agrico Company to make strategic
curtailments in its phosphate fertilizer production. However, late in the
year increased export purchases contributed to a rise in market prices,
helping to rekindle domestic buying interests which had been unwilling to
make purchase commitments. The increased demand, coupled with low
industrywide production levels, caused reduced inventory levels. Late in
1993, IMC-Agrico Company increased its production levels in response to the
improving markets and projected domestic and international demand for its
fertilizer products. Unit production cost, excluding $17.5 million of
changes related to the restructuring project, declined from 1992 reflecting
initial production efficiencies from the joint venture, reduced raw
material costs for sulphur, and lower phosphate rock mining expenses,
partially offset by increased natural gas costs and lower production
volumes. FRP's realization for DAP was lower reflecting the near 20-year
low prices realized during 1993 as well as an increase in the lower-priced
Florida sales by IMC-Agrico Company.
FRP believes that the outlook for 1994 is for improved prices caused
by more normal market demand. Spot market prices improved from a low of
nearly $100 per short ton of DAP (central Florida) in July 1993 to just
over $140 per ton by year end. Industry inventories at year end were below
average levels, despite a fourth quarter rebound in industry production.
Export demand is expected to remain at more normal levels during the first
half of 1994, with China, India, and Pakistan expected to be active
purchasers. Additionally, domestic phosphate fertilizer demand is expected
to benefit from increased corn acreage planted due to lower government set-
asides and to increased fertilizer application rates necessitated by the
widespread flooding that caused a depletion of nutrients in a number of
midwestern states.
FRP's proportionate share of the larger IMC-Agrico Company phosphate
rock operation caused 1993 sales volumes to increase from 1992, with IMC-
Agrico Company operating its most efficient facilities to minimize costs.
Combined sulphur production from the Caminada and Main Pass mines
increased compared with 1992; however, sales volumes declined 16 percent,
primarily because of reduced purchases by IMC-Agrico Company resulting from
its curtailed fertilizer production. Due to the significant decline in the
market price of sulphur, FRP recorded a second-quarter 1993 noncash charge
to earnings (not included in segment earnings) for the excess of
capitalized cost over expected realization of its non-Main Pass sulphur
assets, primarily the Caminada sulphur mine (Note 4). Due to significant
improvements in Main Pass sulphur production, FRP ceased the marginally
profitable Caminada operations in January 1994. The shutdown of Caminada
will have no material impact on FRP's reported earnings. Although reduced
global demand has forced production cutbacks worldwide, sulphur prices
remain depressed. A rebound in price is not expected until demand
improves.
At Main Pass, sulphur production increased significantly during 1993
and achieved, on schedule, full design operating rates of 5,500 tons per
day (approximately 2 million tons per year) in December 1993 and has since
sustained production at or above that level. As a result of the production
increases, Main Pass sulphur became operational for accounting purposes
beginning July 1, 1993. Recognizing Main Pass sulphur operations in income
and discontinuing associated capitalized interest did not affect cash flow,
but adversely affected reported operating results.
Oil Operation
1993 1992
---- ----
Sales (barrels) 3,443,000 4,884,000
Average realized price $14.43 $15.91
Earnings (in millions) $(1.5) $4.6
Since completion of development drilling in mid-April 1993, oil
production for the Main Pass joint venture (in which FRP owns a 58.3
percent interest) increased significantly, averaging over 20,000 barrels
per day for December 1993. Production for 1994 is expected to approximate
that of 1993 if water encroachment follows current trends, with the
anticipated drilling of additional wells (estimated to cost FRP
approximately $4 million) offsetting a production decline in existing
wells. Due to the dramatic decline in oil prices at year-end, FRP recorded
a $60.0 million charge to earnings (not included in segment earnings)
reflecting the excess net book value of its Main Pass oil investment over
the estimated future net cash flow to be received. Future price declines,
increases in costs, or negative reserve revisions could result in an
additional charge to future earnings.
CAPITAL RESOURCES AND LIQUIDITY
Net cash used in operating activities during 1993 was $2.9 million compared
with $120.1 million net cash provided during 1992, due primarily to lower
income from operations. Net cash provided by investing activities was $2.5
million compared with $209.9 million used for 1992, reflecting the reduced
level of capital expenditures (following completion of Main Pass
development expenditures and the cost efficiency program during 1992) and
the proceeds from asset sales. Net cash provided by financing activities
during 1993 was $17.8 million reflecting net borrowings of $139.0 million
partially offset by lower distributions resulting from unpaid distributions
to FTX since early-1992 (discussed below), compared with $93.1 million for
1992 which had a net reduction of borrowings totaling $186.2 million funded
by $430.5 million in proceeds from the public sale of FRP units in February
1992.
Cash flow from operations for 1992 was $120.1 million compared with
$106.5 million for 1991. Net cash used in investing activities declined to
$209.9 million from $346.9 million in 1991, due primarily to reduced
capital expenditures. Net cash provided by financing activities declined
to $93.1 million in 1992 from $243.5 million in 1991, with 1991 including
net borrowings of $421.2 million.
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. FRP has announced that beginning with the distribution
for the fourth quarter of 1993 it no longer intends to supplement
distributable cash with borrowings. Therefore, FRP's future distributions
will be dependent on the distributions received from IMC-Agrico Company,
which will primarily be determined by prices and sales volumes of its
commodities and cost reductions achieved by its combined operations, and
the future cash flow of FRP's oil and sulphur operations (including
reclamation expenditures related to its non-Main Pass sulphur assets). On
January 21, 1994, FRP declared a distribution of 60 cents per publicly held
unit ($30.3 million) and 12 cents per FTX-owned unit ($6.2 million),
payable February 15, 1994, bringing the total unpaid distribution due FTX
to $239.2 million. Unpaid distributions due FTX will be recoverable from
future FRP cash available for quarterly distributions as discussed in Note
3 to the financial statements. The January 1994 distribution included
$30.9 million received from IMC-Agrico Company for its fourth-quarter 1993
distribution (including $9.3 million from working capital reductions) and
$13.0 million in proceeds from the sale of certain previously mined
phosphate rock acreage.
In September 1993, FTX agreed to manage for one year Fertiberia, S.L.,
the restructured phosphate and nitrogen fertilizer businesses of FESA
Fertilizantos Espanoles, a wholly owned subsidiary of ERCROS, S.A., a
Spanish conglomerate. FTX has assumed no financial obligations during this
period. The goal of the management services agreement is to establish
Fertiberia as a financially viable concern. If financial viability can be
established, FRP has agreed to negotiate the acquisition of a controlling
equity interest in Fertiberia.
In June 1993, FTX amended its credit agreement in which FRP
participates, extending its maturity (Note 5). As of February 1, 1994,
$425.0 million was available under the credit facility. To the extent FTX
and its other subsidiaries incur additional debt, the amount available to
FRP under the credit facility may be reduced. FRP believes that its short-
term cash requirements will be met from internally generated funds and
borrowings under its existing credit facility.
ENVIRONMENTAL
FTX and its affiliates, including FRP, have a history of
commitment to environmental responsibility. Since the 1940s, long before
public attention focused on the importance of maintaining environmental
quality, FTX and its affiliates have conducted preoperational, bioassay,
marine ecological, and other environmental surveys to ensure the
environmental compatibility of its operations. FTX's Environmental Policy
commits FTX and its affiliates' operations to full compliance with local,
state, and federal laws and regulations, and prescribes the use of periodic
environmental audits of all domestic facilities to evaluate compliance
status and communicate that information to management. FTX has access to
environmental specialists who have developed and implemented corporatewide
environmental programs. FTX's operating units, including FRP, continue to
study and implement methods to reduce discharges and emissions.
Federal legislation (sometimes referred to as "Superfund") requires
payments for cleanup of certain abandoned waste disposal sites, even though
such waste disposal activities were performed in compliance with
regulations applicable at the time of disposal. Under the Superfund
legislation, one party may, under certain circumstances, be required to
bear more than its proportional share of cleanup costs at a site where it
has responsibility pursuant to the legislation, if payments cannot be
obtained from other responsible parties. Other legislation mandates
cleanup of certain wastes at unabandoned sites. States also have
regulatory programs that can mandate waste cleanup. Liability under these
laws involves inherent uncertainties.
FRP has received notices from governmental agencies that it is one of
many potentially responsible parties at certain sites under relevant
federal and state environmental laws. Further, FRP is aware of additional
sites for which it may receive such notices in the future. Some of these
sites involve significant cleanup costs; however, at each of these sites
other large and viable companies with equal or larger proportionate shares
are among the potentially responsible parties. The ultimate settlement for
such sites usually occurs several years subsequent to the receipt of
notices identifying potentially responsible parties because of the many
complex technical and financial issues associated with site cleanup. FRP
believes that the aggregation of any costs associated with these potential
liabilities will not exceed amounts accrued and expects that any costs
would be incurred over a period of years.
FRP, through FTX, maintains insurance coverage in amounts deemed
prudent for certain types of damages associated with environmental
liabilities which arise from unexpected and unforeseen events and has an
indemnification agreement covering certain acquired sites (Note 7).
FRP has made, and will continue to make, expenditures at its
operations for protection of the environment. Continued government and
public emphasis on environmental issues can be expected to result in
increased future investments for environmental controls, which will be
charged against income from future operations. Present and future
environmental laws and regulations applicable to FRP's operations may
require substantial capital expenditures and may affect its operations in
other ways that cannot now be accurately predicted.
1992 RESULTS OF OPERATIONS COMPARED WITH 1991
FRP reported 1992 net income of $20.2 million ($.20 per unit) compared with
$15.0 million ($.18 per unit) for 1991, which included an insurance
settlement gain (Note 7) of $17.7 million ($.21 per unit) and a charge of
$96.8 million ($1.16 per unit) to reflect the cumulative effect of the
change in accounting principle for postretirement benefits other than
pensions (Note 6). Excluding the nonrecurring items, income for 1992 was
lower primarily because of reduced agricultural minerals and uranium
earnings, partially offset by profitable Main Pass oil operations.
Revenues were virtually unchanged from 1991 with increases in oil and
phosphate rock revenues partially offsetting a decrease in phosphate
fertilizer revenues. Production and delivery costs as a percent of
revenues declined due to increased oil production, which has lower
production and delivery costs than FRP's other products. Depreciation and
amortization expense rose primarily because of higher oil production, and
general and administrative expenses increased due to the additional effort
and support required by Main Pass. Interest costs of $19.1 million for
1992 and $23.3 million for 1991, associated primarily with Main Pass
development, were capitalized.
Agricultural Minerals Operations
Revenues and earnings for 1992 totaled $799.0 million and $18.0 million
compared with $880.5 million and $78.9 million for 1991, respectively,
reflecting weak market prices for phosphate fertilizers and sulphur.
However, FRP's 1992 average unit production cost for phosphate fertilizers
was lower than during 1991. Significant items impacting the segment
earnings are as follows (in millions):
Agricultural minerals earnings - 1991 $ 78.9
Major increases (decreases)
Sales volumes 27.0
Realizations (107.8)
Other (.7)
------
Revenue variance (81.5)
Cost of sales 41.9
General and administrative and other (21.3)
------
(60.9)
------
Agricultural minerals earnings - 1992 $ 18.0
======
Phosphate fertilizer sales volumes were slightly lower during 1992,
whereas the average realization was 13 percent lower. Phosphate fertilizer
realizations declined steadily throughout 1992 because of curtailed
purchases by China, the largest single fertilizer importer, and supply and
demand uncertainty in Europe, the former Soviet Union, and India. Also
contributing to the decline in prices were lower raw material costs, most
notably for sulphur, as producers in the weakening market passed along
these cost savings to buyers in an attempt to preserve market share. FRP's
phosphate rock and fertilizer facilities operated at or near capacity, with
the 1992 phosphate fertilizer unit production cost averaging 7 percent less
than during 1991 due to reduced raw material costs for sulphur and lower
phosphate rock mining expenses, despite higher natural gas costs. Unit
production cost also benefited during the latter part of 1992 as FRP
completed a $60.0 million capital program to improve efficiency and lower
costs.
Sulphur production and sales volumes for 1992 declined 8 percent and 7
percent, respectively, from 1991 as the Garden Island Bay and Grand Isle
mines ceased production in 1991. However, production increased at the
Caminada mine, which had a significantly lower unit production cost than
either Garden Island Bay or Grand Isle had prior to depletion, resulting in
an average sulphur unit production cost 7 percent lower than during 1991.
FRP's 1992 sulphur realization reflects the price declines which occurred
since mid-1991, as world sulphur markets were burdened by the collapse of
the Soviet Union as well as by a further decline in demand in Western
Europe. During 1992, several Canadian sulphur marketers built inventory
rather than accept depressed prices; however, others intensified their
efforts to sell into the important Tampa, Florida market.
Phosphate rock production and sales benefited from the capacity
expansion completed in mid-1992 at one of FRP's two operated phosphate rock
mines, and also reflect the output from FRP's Central Florida Pebbledale
property, where sales began in July 1991 under a mining agreement with IMC.
Oil Operation
1992 1991
--------- -------
Sales (barrels) 4,884,000 350,800
Average realized price $15.91 $13.34
Earnings (in millions) $4.6 $(.6)
Earnings for Main Pass, which initiated oil production in late 1991,
benefited from FRP's marketing efforts, which alleviated earlier problems
related to its high-sulphur oil, and high average production rates.
______________________________________
The results of operations reported and summarized above are not necessarily
indicative of future operating results.
Item 8. Financial Statements and Supplementary Data.
-------------------------------------------
The financial statements of FRP, the notes thereto and the report
thereon of Arthur Andersen & Co., appearing on pages 20 through 32
inclusive, of FRP's 1993 Annual Report to unitholders, are incorporated
herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
-----------------------------------------------------------
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
--------------------------------------------------
FRP has no directors; instead, the general partners in FRP, FTX
and FMRP Inc., perform comparable functions for FRP. In addition to the
elected executive officers of FRP (the "Elected FRP Executive Officers"),
certain employees of the general partners have management responsibilities
with respect to FRP and are thus deemed by FRP to be executive officers of
FRP (the "Designated FRP Executive Officers") for purposes of the federal
securities laws.
The following table shows, as of March 15, 1994, the names, ages,
positions with the general partners and principal occupations of the
Elected FRP Executive Officers and the Designated FRP Executive Officers
(collectively, the "FRP Executive Officers"):
Name Age Positions and Principal Occupations
---- --- -----------------------------------
Richard C. Adkerson 47 Senior Vice President of FTX.
John G. Amato 50 General Counsel of FRP. General Counsel of FTX.
Director of FMRP Inc.
Richard H. Block 43 Senior Vice President - Fertilizer Operations of
FRP. Senior Vice President of FTX.
R. Foster Duncan 40 Senior Vice President of FRP.
Thomas J. Egan 49 Senior Vice President of FTX.
Robert B. Foster 50 Senior Vice President - Sulphur Operations of
FRP.
Charles W. Goodyear 36 Senior Vice President - Finance and Accounting
and Chief Financial Officer of FRP. Senior Vice
President of FTX. Director of FMRP Inc.
W. Russell King 44 Senior Vice President of FTX.
Rene L. Latiolais 51 President and Chief Executive Officer of FRP.
Director, President, and Chief Operating
Officer of FTX. Director, Chairman of the Board,
and President of FMRP Inc.
George A. Mealey 60 Executive Vice President of FTX. Director,
President, and Chief Executive Officer of
Freeport-McMoRan Copper & Gold Inc., a subsidiary
of FTX.
James R. Moffett 55 Director, Chairman of the Board, and Chief
Executive Officer of FTX.
All of the individuals above, with the exceptions of Messrs.
Adkerson, Amato, Duncan and Goodyear, have served FTX or FRP in various
executive capacities for at least the last five years. Until 1989, Mr.
Adkerson was a partner in Arthur Andersen & Co., an independent public
accounting firm, Mr. Duncan was First Vice President and Manager-Corporate
Finance of Howard Weil Labouisse Friedrichs Incorporated, a brokerage firm,
and Mr. Goodyear was a Vice President of Kidder, Peabody & Co.
Incorporated, an investment banking firm. During the past five years and
prior to that period, Mr. Amato has been engaged in the private practice
of law and has served as outside counsel to FTX and FRP.
All Elected FRP Executive Officers and all officers of FTX serve
at the pleasure of the Board of Directors of FTX. All officers of FMRP
Inc. serve at the pleasure of the Board of Directors of FMRP Inc.
According to (i) the Forms 3 and 4 and any amendments thereto
filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
("Section 16") and furnished to FRP during 1993 by persons subject to
Section 16 at any time during 1993 with respect to securities of FRP ("FRP
Section 16 Insiders"), (ii) the Forms 5 with respect to 1993 and any
amendments thereto filed pursuant to Section 16 and furnished to FRP by FRP
Section 16 Insiders, and (iii) the written representations from certain FRP
Section 16 Insiders that no Form 5 with respect to the securities of FRP
was required to be filed by such FRP Section 16 Insider, respectively, with
respect to 1993, no FRP Section 16 Insider failed to file altogether or
timely any Forms 3, 4, or 5 required by Section 16 with respect to the
securities of FRP or to disclose on such Forms transactions required to be
reported thereon.
Item 11. Executive Compensation.
----------------------
FRP does not employ any of the FRP Executive Officers, nor does
it compensate them for their services. The FRP Executive Officers are
either employed or retained by FTX. The President and Chief Executive
Officer of FRP, Rene L. Latiolais, is employed by FTX. The four most
highly compensated FRP Executive Officers other than Mr. Latiolais are
James R. Moffett, Richard H. Block, Charles W. Goodyear, and W. Russell
King; they are also employed by FTX. The determination as to which FRP
Executive Officers were the most highly compensated was made by reference
to the total annual salary and bonus for 1993 of each of the FRP Executive
Officers employed by FTX that was allocated to FRP by FTX pursuant to the
FRP partnership agreement on the basis of time devoted to FRP activities.
The services of all the FRP Executive Officers and the services
of the other officers of FRP are provided to FRP by FTX under the FRP
partnership agreement. FRP reimburses FTX at FTX's cost, including
allocated overhead, for such services. All the FRP Executive Officers are
compensated exclusively by FTX for their services to FRP. All the FRP
Executive Officers are eligible to participate in certain FTX benefit plans
and programs. The total costs to FTX for the FRP Executive Officers,
including the costs borne by FTX with respect to such plans and programs,
are allocated to FRP, to the extent practicable, in proportion to the time
spent by such FRP Executive Officers on FRP affairs. No other payment is
made by FRP to FTX for providing such compensation and benefit plans and
programs to the FRP Executive Officers.
Reference is made to the information set forth under the caption
"Management" above and to the information set forth in Note 6 to the FRP
Financial Statements.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
-----------------------------------------------
According to information furnished by the person known to FRP to
be a beneficial owner of more than 5% of Partnership Units, the number of
Partnership Units beneficially owned by such person as of December 31,
1993, was as follows:
Number of
Partnership Units Percent
Beneficially of
Name and Address of Person Owned Class
- - - -------------------------- ----------------- -------
Freeport-McMoRan Inc. 52,170,192(a) 50.8
1615 Poydras Street
New Orleans, Louisiana 70112
_________
(a) These Partnership Units consist of 18,582 FRP Depositary Units and
52,151,610 FRP Unit Equivalents. FTX has sole voting and investment
power with respect to such Partnership Units.
The other general partner in FRP, FMRP Inc., did not own
beneficially any Partnership Units as of December 31, 1993.
According to information furnished by each of the Elected FRP
Executive Officers and the Designated FRP Executive Officers (collectively,
the "FRP Executive Officers"), the number of FRP Depositary Units and
shares of FTX common stock ("FTX Shares") beneficially owned by each of
them as of December 31, 1993, was as follows:
Number of Number of
FRP Depositary Units FTX Shares
Name of Individual Beneficially Beneficially
or Identity of Group Owned(a) Owned(a)
- - - -------------------- -------------------- ------------
Richard H. Block 2,184 70,661(b)
Charles W. Goodyear 0 188,597(b)(c)
W. Russell King 990 64,119(b)
Rene L. Latiolais 539(d) 517,590(b)
James R. Moffett 65,439(e) 3,313,162(b)(e)
11 FRP Executive
Officers as a group,
including those
persons named above 76,468(f) 5,033,771(f)
- - - --------
(a) Except as otherwise noted, the individuals referred to have sole
voting and investment power with respect to such FRP Depositary Units
and FTX Shares. With the exception of Mr. Moffett, who beneficially
owns 2.3% of the outstanding FTX Shares, each of the individuals
referred to holds less than 1% of the outstanding FRP Depositary Units
and FTX Shares, respectively.
(b) Includes FTX Shares held by the trustee under the Employee Capital
Accumulation Program of FTX, as follows: Mr. Block, 11,765 FTX Shares;
Mr. Goodyear, 2,113 FTX Shares; Mr. King, 9,510 FTX Shares; Mr.
Latiolais, 15,191 FTX Shares; Mr. Moffett, 21,293 FTX Shares; all FRP
Executive Officers as a group (10 persons), 79,188 FTX Shares. Also
includes FTX Shares that could be acquired within 60 days after December
31, 1993 upon the exercise of options granted pursuant to the employee
stock option plans of FTX, as follows: Mr. Block, 58,896 FTX Shares;
Mr. Goodyear, 186,420 FTX Shares; Mr. King, 19,168 FTX Shares; Mr.
Latiolais, 332,426 FTX Shares; Mr. Moffett, 1,764,434 FTX Shares; all FRP
Executive Officers as a group (11 persons), 3,079,436 FTX Shares.
(c) Includes 64 FTX Shares held in a retirement account for the benefit of
Mr. Goodyear.
(d) Includes 405 FRP Depositary Units held for the benefit of Mr. Latiolais
by the custodian under FRP's Depositary Unit Reinvestment Plan.
(e) Includes a total of 39,600 FRP Depositary Units and 214,648 FTX Shares
held for the benefit of a trust with respect to which Mr. Moffett and an
FRP Executive Officer, as co-trustees of such trust, have sole voting and
investment power but have no beneficial interest therein. Mr. Moffett
and such FRP Executive Officer disclaim beneficial ownership of such FRP
Depositary Units and FTX Shares held for the benefit of such trust.
Includes a total of 25,839 FRP Depositary Units and 85,140 FTX Shares
held for the benefit of two trusts created by Mr. Moffett for the benefit
of his two children, who are adults. An FRP Executive Officer and
another individual, as co-trustees of the two trusts, have sole voting
and investment power with respect to such FRP Depositary Units and FTX
Shares held for the benefit of such trusts but have no beneficial
interest therein. Mr. Moffett and such FRP Executive Officer disclaim
beneficial ownership of such FRP Depositary Units and FTX Shares held for
the benefit of such trusts. Includes a total of 88,000 FTX Shares held
for the benefit of a trust created by Mr. Moffett for the benefit of an
educational fund and his two children, who are adults. An FRP Executive
Officer and another individual, as co-trustees of such trust, have sole
voting and investment power with respect to such FTX Shares held for the
benefit of such trust but have no beneficial interest therein. Mr.
Moffett and such FRP Executive Officer disclaim beneficial ownership of
such FTX Shares held for the benefit of such trust.
(f) See notes (b) through (e) above. Includes 724 FTX Shares that may be
acquired upon the conversion of 6.55% Convertible Subordinated Notes due
January 15, 2001 of FTX ("FTX Notes") held in trust for the benefit of
one of the FRP Executive Officers, 2,682 FTX Shares that may be acquired
upon the conversion of Zero Coupon Convertible Subordinated Debentures
due 2006 of FTX held in trust for the benefit of such FRP Executive
Officer, and 90 FTX Shares that may be acquired upon the conversion of
FTX Notes held in trust for the benefit of the spouse of such FRP
Executive Officer. Includes 6 FRP Depositary Units and 1,516 FTX Shares
held in trust for the benefit of one of the FRP Executive Officers, 92
FTX Shares held in trust for the benefit of the spouse of such FRP
Executive Officer as to which beneficial ownership is disclaimed, and
1,000 FTX Shares held by such FRP Executive Officer as custodian as to
which beneficial ownership is disclaimed. These total numbers of FRP
Depositary Units and FTX Shares represent less than 1% of the outstanding
FRP Depositary Units and approximately 3.5% of the outstanding FTX
Shares, respectively.
Item 13. Certain Relationships and Related Transactions.
----------------------------------------------
Reference is made to the information set forth under the caption
"Management" above, to the information set forth in Item 11 above and to
the information set forth in Note 6 to the FRP Financial Statements.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
---------------------------------------------------------------
(a)(1), (a)(2), and (d). Financial Statements. Reference is
made to the Index to Financial Statements appearing on page F-1 hereof.
(a)(3) and (c). Exhibits. Reference is made to the Exhibit
Index beginning on page E-1 hereof.
(b). Reports on Form 8-K. No reports on Form 8-K were filed by
the registrant during the fourth quarter of 1993.
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, on
March 29, 1994.
FREEPORT-McMoRan RESOURCE
PARTNERS, LIMITED PARTNERSHIP
By: FREEPORT-McMoRan INC.,
Its Administrative Managing
General Partner
By: /s/ James R. Moffett
----------------------------
James R. Moffett
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities indicated on March 29, 1994.
/s/ Rene L. Latiolais President and Chief Executive Officer
- - - ----------------------- of Freeport-McMoRan Resource
Rene L. Latiolais Partners, Limited Partnership and
Director of Freeport-McMoRan Inc.
(Principal Executive Officer)
/s/ Charles W. Goodyear Senior Vice President and Chief
- - - ----------------------- Financial Officer of Freeport-McMoRan
Charles W. Goodyear Resource Partners, Limited
Partnership
(Principal Financial Officer)
/s/ Nancy D. Bonner Vice President and Controller of
- - - ----------------------- Freeport-McMoRan Resource Partners,
Nancy D. Bonner Limited Partnership
(Principal Accounting Officer)
Robert W. Bruce III* Director of Freeport-McMoRan Inc.
Thomas B. Coleman* Director of Freeport-McMoRan Inc.
William H. Cunningham* Director of Freeport-McMoRan Inc.
Robert A. Day* Director of Freeport-McMoRan Inc.
William B. Harrison, Jr.* Director of Freeport-McMoRan Inc.
Henry A. Kissinger* Director of Freeport-McMoRan Inc.
Bobby Lee Lackey* Director of Freeport-McMoRan Inc.
Gabrielle K. McDonald* Director of Freeport-McMoRan Inc.
W. K. McWilliams, Jr.* Director of Freeport-McMoRan Inc.
/s/ James R. Moffett Director, Chairman of the Board
- - - ----------------------- and Chief Executive Officer
James R. Moffett of Freeport-McMoRan Inc.
George Putnam* Director of Freeport-McMoRan Inc.
B. M. Rankin, Jr.* Director of Freeport-McMoRan Inc.
Benno C. Schmidt* Director of Freeport-McMoRan Inc.
J. Taylor Wharton* Director of Freeport-McMoRan Inc.
Ward W. Woods, Jr.* Director of Freeport-McMoRan Inc.
*By: /s/ James R. Moffett
-----------------------
James R. Moffett
Attorney-in-Fact
INDEX TO FINANCIAL STATEMENTS
The financial statements of FRP, the notes thereto, and the report
thereon of Arthur Andersen & Co., appearing on pages 20 through 32,
inclusive, of FRP's 1993 Annual Report to unitholders are incorporated by
reference.
The financial statement schedules listed below should be read in
conjunction with such financial statements contained in FRP's 1993 Annual
Report to unitholders.
Page
----
Report of Independent Public Accountants.........................F-1
III-Condensed Financial Information of Registrant................F-2
V-Property, Plant and Equipment..................................F-5
VI-Accumulated Depreciation and Amortization.....................F-6
VIII-Valuation and Qualifying Accounts...........................F-7
X-Supplementary Income Statement Information.....................F-8
Schedules other than those listed above have been omitted, since they
are either not required, not applicable or the required information is
included in the financial statements or notes thereof.
* * *
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have audited, in accordance with generally accepted auditing
standards, the financial statements as of December 31, 1993 and 1992 and
for each of the three years in the period ended December 31, 1993 included
in Freeport-McMoRan Resource Partners, Limited Partnership's annual report
to unitholders incorporated by reference in this Form 10-K, and have issued
our report thereon dated January 25, 1994. Our audits were made for the
purpose of forming an opinion on those statements taken as a whole. The
schedules listed in the index above are the responsibility of the Company's
management and are presented for purposes of complying with the Securities
and Exchange Commission's rules and are not part of the basic financial
statements. The schedules for the years ended December 31, 1993, 1992 and
1991 have been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly state in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
/s/ Arthur Andersen & Co.
-------------------------
Arthur Andersen & Co.
New Orleans, Louisiana,
January 25, 1994
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEETS
December 31,
-------------------
1993 1992
---- ----
(In Thousands)
ASSETS
Current assets:
Cash and short-term investments $ 5,300 $ 7,099
Accounts receivable:
Customers 6,193 50,399
Other 12,811 12,175
Inventories:
Products 31,458 141,216
Materials and supplies 7,877 29,060
Prepaid expenses and other 273 22,214
---------- ----------
Total current assets 63,912 262,163
Property, plant and equipment-net 532,927 1,074,332
Investment in IMC-Agrico Company 483,070 -
Other assets 100,628 157,012
---------- ----------
Total assets $1,180,537 $1,493,507
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and accrued liabilities $ 37,175 $ 102,366
Current portion of long-term debt - 1,575
---------- ----------
Total current liabilities 37,175 103,941
Long-term debt, less current portion 475,900 356,563
Reclamation and mine shutdown reserves 58,896 55,152
Accrued postretirement benefits and other liabilities 116,162 118,156
Partners' capital 492,404 859,695
---------- ----------
Total liabilities and partners' capital $1,180,537 $1,493,507
========== ==========
The footnotes contained in FRP's 1993 Annual Report to unitholders are an
integral part of these statements.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------
1993 1992 1991
---- ---- ----
(In Thousands)
<S> <C> <C> <C>
Revenues $ 424,717 $877,058 $885,209
Cost of sales:
Production and delivery 352,194 652,169 691,932
Depreciation and amortization 81,521 119,259 59,502
-------- -------- --------
Total cost of sales 433,715 771,428 751,434
Exploration expenses 3,092 5,814 2,895
Provision for restructuring charges 33,947 - -
Loss on valuation and sale of assets, net 114,802 - -
General and administrative expenses 58,660 79,073 63,684
-------- -------- --------
Total costs and expenses 644,216 856,315 818,013
-------- -------- --------
Operating income (loss) (219,499) 20,743 67,196
Interest expense, net (12,293) (869) (506)
Equity in earnings of IMC-Agrico Company 1,037 - -
Uranium royalties and fees - - 18,452
Gain on insurance settlement - - 17,684
Other income, net 8,344 337 9,013
-------- -------- --------
Income (loss) before changes in accounting principle (222,411) 20,211 111,839
Cumulative effect of changes in accounting principle (23,700) - (96,793)
-------- -------- --------
Net income (loss) $(246,111) $ 20,211 $ 15,046
========= ======== ========
</TABLE>
The footnotes contained in FRP's 1993 Annual Report to unitholders are an
integral part of these statements.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------
1993 1992 1991
---- ---- ----
(In Thousands)
<S> <C> <C> <C>
Cash flow from operating activities:
Net income (loss) $(246,111) $ 20,211 $ 15,046
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Cumulative effect of changes in accounting principle 23,700 - 96,793
Depreciation and amortization 81,521 119,259 59,502
Other noncash charges to income 7,150 - -
Provision for restructuring charges, net of payments 3,143 - -
Loss on valuation and sale of assets, net 114,802 - -
Equity in (earnings) of IMC-Agrico Company (1,037) - -
Gain on insurance settlement - - (17,684)
(Increase) decrease in working capital,
net of effect of acquisitions and dispositions:
Accounts receivable (1,552) 18,317 (2,520)
Inventories (4,750) (9,983) 1,758
Prepaid expenses and other 1,933 (9,995) 37
Accounts payable and accrued liabilities 1,561 (3,011) (21,091)
Reclamation and mine shutdown expenditures (9,980) (18,038) (16,601)
Other 2,935 3,301 (8,732)
-------- -------- --------
Net cash provided by (used in) operating activities (26,685) 120,061 106,508
-------- -------- --------
Cash flow from investing activities:
Capital expenditures:
Main Pass (37,427) (117,902) (291,993)
Other (10,152) (86,815) (80,179)
Sale of assets 49,961 - -
Net insurance settlement proceeds - 2,970 17,800
Other 4,711 (8,189) 7,494
-------- -------- --------
Net cash provided by (used in) investing activities 7,093 (209,936) (346,878)
-------- -------- --------
Cash flow from financing activities:
Distributions to partners (121,180) (151,210) (200,870)
Investments by FTX and affiliates - - 23,169
Proceeds from debt 572,137 639,891 614,650
Repayment of debt (433,164) (826,095) (193,427)
Proceeds from sale of partnership units - 430,534 -
-------- -------- --------
Net cash provided by financing activities 17,793 93,120 243,522
-------- -------- --------
Net increase (decrease) in cash and short-term
investments (1,799) 3,245 3,152
Cash and short-term investments at beginning of year 7,099 3,854 702
-------- -------- --------
Cash and short-term investments at end of year $ 5,300 $ 7,099 $ 3,854
======== ======== ========
Interest paid $ 22,997 $ 19,818 $ 22,015
======== ======== ========
</TABLE>
The footnotes contained in FRP's 1993 Annual Report to unitholders notes
are an integral part of these statements.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
for the years ended December 31, 1993, 1992, and 1991
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D Col. E Col. F
----------- ------------ ---------- ----------- ---------- ----------
Balance at Retirements Balance at
Beginning of Additions and Other-Add End
Description Period at Cost(a) Sales (Deduct) of Period
----------- ------------ ---------- ----------- ---------- ----------
(In Thousands)
<S> <C> <C> <C> <C> <C>
1993:
Sulphur $ 597,662 $ 29,740 $ (2,100) $ (3,080) $ 622,222
Fertilizer 731,106 16,530 (3,384) 206,044(b) 950,296
Oil 184,555 4,939 - - 189,494
---------- -------- -------- -------- ----------
$1,513,323 $ 51,209 $ (5,484) $202,964 $1,762,012
========== ======== ======== ======== ==========
1992:
Sulphur $ 501,602 $ 96,269 $ (709) $ 500 $ 597,662
Fertilizer 659,431 73,955 (2,313) 33 731,106
Oil 179,863 5,088 (396) - 184,555
---------- -------- -------- -------- ----------
$1,340,896 $175,312 $ (3,418) $ 533 $1,513,323
========== ======== ======== ======== ==========
1991:
Sulphur $ 300,218 $224,281 $(25,174) $ 2,277 $ 501,602
Fertilizer 589,948 70,085 (1,634) 1,032 659,431
Oil 100,751 80,589 (558) (919) 179,863
---------- -------- -------- -------- ----------
$ 990,917 $374,955 $(27,366) $ 2,390 $1,340,896
========== ======== ======== ======== ==========
a. Includes capitalized interest of $11.1 million in 1993, $19.1 million
in 1992, and $23.3 million in 1991.
b. Represents FRP's proportionate share of the IMC-Agrico Company joint
venture property, plant and equipment (see Note 2 to the Financial
Statements included in the 1993 Annual Report of FRP, the "Financial
Statements") in excess of the FRP contributed amounts.
</TABLE>
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION
for the years ended December 31, 1993, 1992, and 1991
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D Col. E Col. F
----------- ----------- ----------- ----------- ----------- -----------
Additions
Balance at Charged to Retirements Balance at
Beginning of Costs and and Other-Add End
Description Period Expenses(a) Sales (Deduct) of Period
----------- ----------- ----------- ----------- ----------- -----------
(In Thousands)
<S> <C> <C> <C> <C> <C>
1993:
Sulphur $108,771 $ 14,277 $ (296) $ 13,269 $136,021
Fertilizer 273,744 48,926 (654) 187,890(b) 509,905
Oil 56,476 33,883 - 54,767(c) 145,126
-------- -------- -------- -------- --------
$438,991 $ 97,086 $ (950) $255,926 $791,052
======== ======== ======== ======== ========
1992:
Sulphur $ 99,874 $ 13,659 $ (159) $ (4,603) $108,771
Fertilizer 226,547 52,640 (1,914) (3,529) 273,744
Oil 4,958 52,960 - (1,442) 56,476
-------- -------- -------- -------- --------
$331,379 $119,259 $ (2,073) $ (9,574) $438,991
======== ======== ======== ======== ========
1991:
Sulphur $118,290 $ 12,058 $(25,165) $ (5,309) $ 99,874
Fertilizer 189,324 43,376 (578) (5,575) 226,547
Oil - 4,068 - 890 4,958
-------- -------- -------- -------- --------
$307,614 $ 59,502 $(25,743) $ (9,994) $331,379
======== ======== ======== ======== ========
<FN>
a. Note 1 to the Financial Statements describes FRP's depreciation and
amortization methods.
b. Represents FRP's proportionate share of the IMC-Agrico Company joint
venture accumulated depreciation and amortization (see Note 2 to the
Financial Statements) in excess of the FRP contributed amounts.
c. Primarily represents the write-down of Main Pass oil costs due to the
fourth-quarter decline in oil prices, as discussed in Note 4 to the
financial statements.
</TABLE>
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
for the years ended December 31, 1993, 1992, and 1991
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D. Col. E
- - - ----------------------- ------------ ------------------------ --------- ----------
Additions
---------
Balance at Charged to Charged to Balance at
Beginning of Costs and Other Other-Add End
Description Period Expenses Accounts (Deduct) of Period
- - - ----------------------- ------------ ------------------------ --------- ----------
(In Thousands)
Reserves and allowances
deducted from asset
accounts:
Reclamation and mine
shutdown reserves:
<S> <C> <C> <C> <C> <C>
1993:
Sulphur $35,200 $27,562 $ - $(5,475) $57,287
Fertilizer 18,543 5,365 - 14,529 (a) 38,437
Oil 1,409 1,021 - (821) 1,609
------- ------- --- ------- -------
$55,152 $33,948 $ - $ 8,233 (b) $97,333
======= ======= === ======= =======
1992:
Sulphur $29,715 $ 4,335 $ - $ 1,150 $35,200
Fertilizer 21,772 7,123 - (10,352) 18,543
Oil - 1,443 - (34) 1,409
------- ------- --- ------- -------
$51,487 $12,901 $ - $ (9,236)(c) $55,152
======= ======= === ======= =======
1991:
Sulphur $26,636 $ 5,212 $ - $ (2,133) $29,715
Fertilizer 27,297 5,575 - (11,100) 21,772
------- ------- --- ------- -------
$53,933 $10,787 $ - $(13,233)(d) $51,487
======= ======= === ======= =======
<FN>
a. Includes $19.7 million which represents FRP's proportionate share of
the IMC-Agrico Company joint venture liabilities (see Note 2 to the
Financial Statements) in excess of the FRP contributed amounts.
b. Includes expenditures of $13.2 million, net of a $1.7 million decrease
in short-term payables and the item discussed in Note a.
c. Includes expenditures of $21.2 million, net of a $12 million decrease
in short-term payables.
d. Includes expenditures of $20.2 million, net of a $7 million decrease in
short-term payables.
</TABLE>
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
for the years ended December 31, 1993, 1992, and 1991
<TABLE>
<CAPTION>
Col. A Col. B
- - - ----------------------------------------------- ---------------------------------
Charged to Costs and Expenses
---------------------------------
Item 1993 1992 1991
- - - ----------------------------------------------- -------- -------- --------
(In Thousands)
<S> <C> <C> <C>
Maintenance and repairs $75,332 $117,550 $113,035
Taxes, other than payroll and income taxes:
Sales and severance $15,054 $ 18,758 $ 16,781
Property 8,927 6,205 6,219
------- -------- --------
$23,981 $ 24,963 $ 23,000
======= ======== ========
Royalties $ 9,586 $ 4,680 $ 14,143
======= ======== ========
</TABLE>
Freeport-McMoRan Resource Partners, Limited Partnership
Exhibit Index
Sequentially
Exhibit Numbered
Number Page
- - - ------- ----------------
3.1 Amended and Restated Agreement of
Limited Partnership of FRP dated as
of May 29, 1987 (the "FRP Partnership
Agreement") among FTX, Freeport
Phosphate Rock Company and Geysers
Geothermal Company, as general
partners, and Freeport Minerals
Company, as general partner and
attorney-in-fact for the limited
partners, of FRP. Incorporated by
reference to Exhibit B to the
Prospectus dated May 29, 1987
included in FRP's Registration
Statement on Form S-1, as amended, as
filed with the Commission on May 29,
1987 (Registration No. 33-13513).
3.2 Amendment to the FRP Partnership
Agreement dated as of April 6, 1990
effected by FTX, as Administrative
Managing General Partner of FRP.
Incorporated by reference to Exhibit
19.3 to the Quarterly Report on Form
10-Q of FRP for the quarter ended
March 31, 1990 (the "FRP 1990 First
Quarter Form 10-Q").
3.3 Amendment to the FRP Partnership
Agreement dated as of January 27,
1992 between FTX, as Administrative
Managing General Partner, and FMRP
Inc., as Managing General Partner, of
FRP. Incorporated by reference to
Exhibit 3.3 to the Annual Report on
Form 10-K of FRP for the fiscal year
ended December 31, 1991 (the "FRP
1991 Form 10-K").
3.4 Amendment to the FRP Partnership
Agreement dated as of October 14,
1992 between FTX, as Administrative
Managing General Partner, and FMRP
Inc., as Managing General Partner, of
FRP. Incorporated by reference to
Exhibit 3.4 to the Annual Report on
Form 10-K of FRP for the fiscal year
ended December 31, 1992 (the "FRP
1992 Form 10-K").
3.5 Amended and Restated Certificate of
Limited Partnership of FRP dated June
12, 1986 (the "FRP Partnership
Certificate"). Incorporated by
reference to Exhibit 3.3 to FRP's
Registration Statement on Form S-1,
as amended, as filed with the
Commission on June 20, 1986
(Registration No. 33-5561).
3.6 Certificate of Amendment to the FRP
Partnership Certificate dated as of
January 12, 1989.
3.7 Certificate of Amendment to the FRP
Partnership Certificate dated as of
December 29, 1989. Incorporated by
reference to Exhibit 19.1 to the FRP
1990 First Quarter Form 10-Q.
3.8 Certificate of Amendment to the FRP
Partnership Certificate dated as of
April 12, 1990. Incorporated by
reference to Exhibit 19.4 to the FRP
1990 First Quarter Form 10-Q.
4.1 Deposit Agreement dated as of June
27, 1986 (the "Deposit Agreement")
among FRP, The Chase Manhattan Bank,
N.A. ("Chase") and Freeport Minerals
Company ("Freeport Minerals"), as
attorney-in-fact of those limited
partners and assignees holding
depositary receipts for units of
limited partnership interests in FRP
("Depositary Receipts"). Incorporated
by reference to Exhibit 28.4 to the
Current Report on Form 8-K of FTX
dated July 11, 1986.
4.2 Resignation dated December 26, 1991
of Chase as Depositary under the
Deposit Agreement and appointment
dated December 27, 1991 of Mellon
Bank, N.A. ("Mellon") as successor
Depositary, effective January 1,
1992. Incorporated by reference to
Exhibit 4.5 to the FRP 1991 Form
10-K.
4.3 Service Agreement dated as of January
1, 1992 between FRP and Mellon
pursuant to which Mellon will serve
as Depositary under the Deposit
Agreement and Custodian under the
Custodial Agreement. Incorporated by
reference to Exhibit 4.6 to the FRP
1991 Form 10-K.
4.4 Amendment to the Deposit Agreement
dated as of November 18, 1992 between FRP and Mellon.
Incorporated by reference to Exhibit 4.4 to the
FRP 1992 Form 10-K.
4.5 Form of Depositary Receipt.
Incorporated by reference to Exhibit
4.5 to the FRP 1992 Form 10-K.
4.6 Custodial Agreement regarding the FRP
Depositary Unit Reinvestment Plan
among FTX, FRP and Chase, effective
as of April 1, 1987 (the "Custodial
Agreement"). Incorporated by refer-
ence to Exhibit 19.1 to the Quarterly
Report on Form 10-Q of FRP for the
quarter ended June 30, 1987.
4.7 FRP Depositary Unit Reinvestment
Plan. Incorporated by reference to
Exhibit 4.4 to the FRP 1991 Form 10-K.
4.8 Credit Agreement dated as of June 1,
1993 (the "FTX/FRP Credit Agreement")
among FTX, FRP, the several banks
which are parties thereto (the
"FTX/FRP Banks") and Chemical Bank,
as Agent (the "FTX/FRP Bank Agent").
4.9 First Amendment dated as of February
2, 1994 to the FTX/FRP Credit Agreement
among FTX, FRP, the FTX/FRP
Banks and the FTX/FRP Bank Agent.
4.10 Second Amendment dated as of March 1,
1994 to the FTX/FRP Credit Agreement
among FTX, FRP, the FTX/FRP Banks and
the FTX/FRP Bank Agent.
4.11 Subordinated Indenture as of October
26, 1990 between FRP and
Manufacturers Hanover Trust Company
("MHTC") as the Trustee, relating to
$150,000,000 principal amount of 8
3/4% Senior Subordinated Notes due
2004 of FRP (the "Subordinated
Indenture").
4.12 First Supplemental Indenture dated as
of February 15, 1994 between FRP and
Chemical Bank, as Successor to MHTC,
as Trustee, to the Subordinated Indenture.
10.1 Contribution Agreement dated as of
April 5, 1993 between FRP and IMC
(the "FRP-IMC Contribution
Agreement"). Incorporated by
reference to Exhibit 2.1 to the
Current Report on Form 8-K of FRP
dated July 15, 1993 (the "FRP July
15, 1993 Form 8-K").
10.2 First Amendment dated as of July 1,
1993 to the FRP-IMC Contribution
Agreement. Incorporated by reference
to Exhibit 2.2 to the FRP July 15,
1993 Form 8-K.
10.3 Amended and Restated Partnership
Agreement dated as of July 1, 1993
among IMC-Agrico GP Company, Agrico,
Limited Partnership and IMC-Agrico MP
Inc. Incorporated by reference to
Exhibit 2.3 to the FRP July 15, 1993
Form 8-K.
10.4 Parent Agreement dated as of July 1,
1993 among IMC, FRP, FTX and IMC-
Agrico. Incorporated by reference to
Exhibit 2.4 to the FRP July 15, 1993
Form 8-K.
12.1 FRP Computation of Ratio of Earnings
to Fixed Charges.
13.1 Those portions of the 1993 Annual
Report to unitholders of FRP which
are incorporated herein by reference.
18.1 Letter of Arthur Andersen & Co.
concerning changes in accounting principles.
21.1 List of Subsidiaries of Freeport McMoRan
Resource Partners, Limited Partnership
23.1 Consent of Arthur Andersen & Co.
dated March 25, 1994.
24.1 Powers of Attorney pursuant to which
this report has been signed on behalf
of certain directors of FTX.
Exhibit 3.6
CERTIFICATE OF AMENDMENT TO
AMENDED AND RESTATED CERTIFICATE
OF LIMITED PARTNERSHIP
OF
FREEPORT-McMoRan RESOURCE PARTNERS,
LIMITED PARTNERSHIP
WHEREAS, on April 17, 1986, a Certificate of Limited
Partnership in the name of Freeport-McMoRan Resource Partners, L.P. (the
"Partnership") was filed with the Secretary of State of the State of
Delaware (the "Original Certificate"); and
WHEREAS, on June 13, 1986, an Amended and Restated Certificate
of Limited Partnership changing the name of the Partnership to
Freeport-McMoRan Resource Partners, Limited Partnership was filed with
the Secretary of State of the State of Delaware (the "Amended and
Restated Certificate"); and
WHEREAS, effective December 31, 1988, Geysers Geothermal
Company, a Delaware corporation and a general partner in the Partnership,
merged into McMoRan Oil & Gas Co., a Delaware corporation;
WHEREAS, the partners in the Partnership wish to amend the
Amended and Restated Certificate to reflect that, as a result of the
aforementioned merger, McMoRan Oil & Gas Co. has succeeded Geysers
Geothermal Company as a general partner in the Partnership effective
December 31, 1988;
NOW, THEREFORE, pursuant to the provisions of the Delaware
Revised Uniform Limited Partnership Act (the "Delaware Act"), as amended,
the undersigned does hereby make, subscribe and swear to the following
amendment in writing according to the laws of the State of Delaware:
Article IV of the Amended and Restated Certificate of Limited
Partnership of Freeport-McMoRan Resource Partners, Limited Partnership is
hereby amended so that said Article IV shall henceforth read in its
entirety as follows:
"IV.
The names and addresses of each general partner of the Partnership
are as follows:
Name Address
---- -------
Freeport-McMoRan Inc. 1615 Poydras Street
New Orleans, Louisiana
70112
Freeport Phosphate Rock 1615 Poydras Street
Company New Orleans, Louisiana
70112
Freeport Minerals Company 1615 Poydras Street
New Orleans, Louisiana
70112
McMoRan Oil & Gas Co. 1615 Poydras Street
New Orleans, Louisiana
70112"
IN WITNESS WHEREOF, the undersigned has executed and sworn to this
Certificate of Amendment to Amended and Restated Certificate of Limited
Partnership of Freeport-McMoRan Resource Partners, Limited Partnership as of
this 12th day of January, 1989.
FREEPORT MINERALS COMPANY,
As Administrative
Managing Partner
By:
-------------------------
Milton H. Ward
Chairman of the Board
and President
Exhibit 4.8
EXECUTION COPY
=========================================================================
FREEPORT-McMoRan INC.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
_______________________
$800,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of June 1, 1993
with
CERTAIN BANKS
and
CHEMICAL BANK,
as Agent
=========================================================================
TABLE OF CONTENTS
Page
Parties and Recitals ................................ 1
ARTICLE I
Definitions
Section 1.1. Definitions .......................... 1
Section 1.2. Accounting Terms ..................... 27
Section 1.3. Section, Article, Exhibit and
Schedule References ................ 27
ARTICLE II
Borrowing Base Determinations
Section 2.1. Annual Determination of Borrowing
Base ............................... 27
Section 2.2. Redetermination of Borrowing Base .... 29
Section 2.3. Redetermination Based on Equity
Payments ........................... 30
Section 2.4. Grace Period for Compliance with
Section 3.2 Upon Borrowing
Base Redeterminations .............. 30
Section 2.5. Reduction of Borrowing Base from
Sales of Assets .................... 31
Section 2.6. Nonreviewability of Borrowing Base
Redetermination .................... 31
ARTICLE III
The Loans
Section 3.1. (Intentionally Left Blank) ........... 32
Section 3.2. Revolving Credit Facility ............ 32
Section 3.3. Loans ................................ 32
Section 3.4. Notice of Loans ...................... 33
Section 3.5. Promissory Notes ..................... 34
Section 3.6. Interest on Loans .................... 35
Section 3.7. Fees ................................. 35
Section 3.8. Maturity and Reduction of
Commitments ........................ 36
Section 3.9. Interest on Overdue Amounts;
Alternative Rate of Interest ....... 38
Section 3.10. Prepayment of Loans .................. 39
Section 3.11. Continuation and Conversion of
Loans .............................. 40
Section 3.12. Reserve Requirements; Change in
Circumstances ...................... 42
Section 3.13. Change in Legality ................... 47
Section 3.14. Indemnity ............................ 47
Section 3.15. Pro Rata Treatment ................... 48
Section 3.16. Sharing of Setoffs ................... 49
Section 3.17. Payments ............................. 50
Section 3.18. U.S. Taxes ........................... 51
Section 3.19. (Intentionally Left Blank) ........... 53
Section 3.20. Company or Restricted Subsidiary as
General Partner .................... 53
ARTICLE IV
Representations and Warranties
Section 4.1. Representations and Warranties........ 54
(a) Organization, Powers ............ 54
(b) Authorization ................... 54
(c) Governmental Approval ........... 55
(d) Enforceability .................. 55
(e) Financial Statements ............ 56
(f) Litigation; Compliance with
Laws; etc. .................... 57
(g) Title, etc. ..................... 58
(h) Federal Reserve Regulations;
Use of Proceeds ............... 59
(i) Taxes ........................... 60
(j) Employee Benefit Plans .......... 60
(k) Investment Company Act .......... 61
(l) Public Utility Holding Company
Act ........................... 61
(m) Subsidiaries .................... 61
(n) (Intentionally left blank) ...... 61
(o) (Intentionally left blank) ...... 61
(p) No Material Misstatements ....... 61
ARTICLE V
Covenants
Section 5.1. Affirmative Covenants of the Company . 62
(a) Financial Statements, etc. ...... 62
(b) Taxes and Claims ................ 64
(c) Maintenance of Existence;
Conduct of Business ........... 64
(d) Compliance with Applicable Laws . 64
(e) Litigation ...................... 65
(f) ERISA ........................... 65
(g) Borrowing Base Certificate ...... 66
(h) Security ........................ 66
(i) Insurance ....................... 69
(j) Access to Premises and Records .. 69
(k) (Intentionally left blank) ...... 70
(l) (Intentionally left blank) ...... 70
(m) (Intentionally left blank) ...... 70
(n) Further Assurances .............. 70
(o) Covenants Regarding FRP ......... 70
Section 5.2. Negative Covenants of the Company .... 70
(a) Conflicting Agreements .......... 70
(b) Borrowing Base Limits ........... 71
(c) Consolidation or Merger;
Disposition of Assets and
Capital Stock ................. 71
(d) Liens ........................... 72
(e) Current Ratios .................. 75
(f) Fixed Charge Ratios ............. 76
(g) Debt ............................ 76
(h) (Intentionally Left Blank) ...... 79
(i) Convertible Debt Payments ....... 79
(j) Ownership of Subsidiaries ....... 79
(k) Fiscal Year ..................... 80
(l) Investments in Nonrestricted
Subsidiaries and Persons Not
Subsidiaries................... 80
(m) Federal Reserve Regulations ..... 81
(n) Certain Debt Agreements ......... 81
(o) Investments in the Major
Subsidiaries .................. 81
(p) Investments in FCX .............. 82
(q) Equity Payments ................. 82
(r) Covenants Regarding IMC-Agrico .. 83
(s) Covenants Regarding ALatief-FI .. 85
Section 5.3. Additional Covenants of FRP .......... 85
ARTICLE VI
Conditions of Credit
Section 6.1. Conditions Precedent to Each Credit
Event ............................... 85
Section 6.2. Representations and Warranties with
Respect to Credit Events ............ 86
ARTICLE VII
Events of Default
Section 7.1. Events of Default .................... 86
ARTICLE VIII
The Agent
Section 8.1. The Agent ............................ 91
ARTICLE IX
Guarantees
Section 9.1. Guarantee by the Company ............. 95
ARTICLE X
Miscellaneous
Section 10.1. Notices ............................. 97
Section 10.2. Survival of Agreement ............... 97
Section 10.3. Successors and Assigns;
Participations; Purchasing
Banks ............................. 98
Section 10.4. Expenses of the Banks; Indemnity .... 103
Section 10.5. Right of Setoff ..................... 105
Section 10.6. Applicable Law ...................... 105
Section 10.7. Waivers; Amendments ................. 105
Section 10.8. Severability ........................ 107
Section 10.9. Counterparts ........................ 107
Section 10.10. Headings ............................ 107
Section 10.11. Entire Agreement .................... 107
Section 10.12. Restatement Closing Date ............ 107
Section 10.13. Waiver of Jury Trial, etc. .......... 107
Section 10.14. Interest Rate Limitation ............ 108
Section 10.15. Jurisdiction; Consent to Service of
Process ........................... 108
Section 10.16. Confidentialiy ...................... 109
Section 10.17. (Intentionally left blank) .......... 110
Schedule I Subsidiaries
Schedule II-1 Applicable Margin for Loans Prior to and
Including the Conversion Date
Schedule II-2 Applicable Margin for Loans After the
Conversion Date
Schedule III Commitments of the Banks
Schedule 4.1(c) Governmental Approvals
Schedule 4.1(n) Assigned Agreements
Schedule 5.2(d) Deemed Leases
Exhibit A Terms of Subordination
Exhibit B Form of Borrowing Confirmation for Loans
Exhibit C Form of Promissory Note
Exhibit D Form of Commitment Transfer Supplement
Exhibit E (Intentionally Left Blank)
Exhibit F (Intentionally Left Blank)
Exhibit G-1 Form of FRP Pledge Agreement
Exhibit G-2 Form of FRP Subsidiary Pledge Agreement
Exhibit H-1 Form of FRP Security Agreement
Exhibit H-2 Form of FRP Subsidiary Security
Agreement
Exhibit I-1 Form of IMC-Agrico Note
Exhibit I-2 Form of FCX Note
AMENDED AND RESTATED CREDIT AGREEMENT
entered into as of May 15, 1991, as amended
and restated as of June 1, 1993, among
FREEPORT-McMoRan INC., a Delaware corporation
(the "Company" or "FTX"), FREEPORT-McMoRan
RESOURCE PARTNERS, LIMITED PARTNERSHIP, a
Delaware limited partnership ("FRP" or the
"Borrowing Subsidiary"), the undersigned
banks (collectively, the "Banks"), and
CHEMICAL BANK, a New York banking
corporation, as agent for the Banks (in such
capacity, the "Agent")
The Company and FRP have requested the Banks to
extend credit to the Company and FRP 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
$800,000,000 less the aggregate principal amount of loans
outstanding at such time under the FI Credit Agreement (as
hereinafter defined). The proceeds of such borrowings are
to be used for general corporate purposes, including,
without limitation, the financing of acquisitions.
The Banks are willing to make loans to the Company
and to FRP upon the terms and subject to the conditions
hereinafter set forth, including the guarantee by the
Company of loans to FRP.
NOW, THEREFORE, in consideration of the premises
and of the mutual covenants herein contained, the parties
hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions. As used in this
Agreement, the following terms have the meanings indicated
(any term defined in this Article I or elsewhere in this
Agreement in the singular and used in this Agreement in the
plural shall include the plural, and vice versa):
"Adjusted CD Rate" means, with respect to any CD
Rate Loan for any Interest Period, an interest rate per
annum (rounded upwards, if not already a whole multiple of
1/100 of 1%, to the next higher 1/100 of 1%) equal to the
sum of (a) a rate per annum equal to the product of (i) the
Fixed CD Rate in effect for such Interest Period and
(ii) Statutory Reserves, plus (b) the Assessment Rate. For
purposes hereof, the term "Fixed CD Rate" shall mean the
rate of interest determined by the Agent to be the
arithmetic average (rounded upwards, if not already a whole
multiple of 1/100 of 1%, to the next higher 1/100 of 1%) of
the respective rates per annum notified to the Agent by the
Reference Banks as the prevailing rate per annum bid at or
about 10:00 a.m., New York City time, on the first Business
Day of the Interest Period applicable to such CD Rate Loan
by three New York City negotiable certificate of deposit
dealers of recognized standing selected by each such
Reference Bank for the purchase at face value from such
Reference Bank of negotiable certificates of deposit of
major United States money center banks in a principal amount
approximately equal to such Reference Bank's portion of such
CD Rate Loan and with a maturity comparable to such Interest
Period.
"ALatief" means P.T. ALatief Nusakarya
Corporation, an Indonesian limited liability company.
"ALatief-FI" means the joint venture company to be
organized under the laws of Indonesia by FI and ALatief
pursuant to the ALatief-FI Joint Venture Agreement.
"ALatief-FI Joint Venture Agreement" means the
Joint Venture Agreement made and entered into on March 11,
1993, between FI and ALatief, as such agreement may be
amended as permitted by Section 5.2(s)(ii) and in effect
from time to time.
"ALatief-FI Transfer" means the transfer by FI of
the non-mining infrastructure facilities, as described in
the ALatief-FI Joint Venture Agreement, to ALatief-FI.
"Alternate Base Rate" means for any day, a rate
per annum (rounded upwards, if not already a whole multiple
of 1/100 of 1%, to the next higher 1/100 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day,
(b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect for such day
plus 1/2 of 1%. For purposes hereof, the term "Prime Rate"
shall mean the rate of interest per annum announced by
Chemical Bank from time to time as its prime rate in effect
at its principal office in the City of New York; each change
in the Prime Rate shall be effective on the date such change
is publicly announced as being effective. "Base CD Rate"
means the sum of (x) the product of (i) the Three-Month
Secondary CD Rate and (ii) Statutory Reserves and (y) the
Assessment Rate. "Three-Month Secondary CD Rate" shall
mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of
New York (which rate will, under the current practices of
the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or,
if such rate shall not be so reported on such day or such
next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of
major money center banks in New York City received at
approximately 10:00 a.m., New York City time, on such day
(or, if such day shall not be a Business Day, on the next
preceding Business Day) by Chemical Bank from three New York
City negotiable certificate of deposit dealers of recognized
standing selected by it. "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the
Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for the day of such transactions received
by Chemical Bank from three Federal funds brokers of
recognized standing selected by it. If for any reason
Chemical Bank shall have determined (which determination
shall be conclusive absent manifest error) that it is unable
to ascertain the Base CD Rate or the Federal Funds Effective
Rate or both for any reason, including the inability or
failure of Chemical Bank to obtain sufficient quotations in
accordance with the terms thereof, the Alternate Base Rate
shall be determined without regard to clause (b) or (c), or
both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate shall
be effective on the effective date of such change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal
Funds Effective Rate, respectively.
"Amendment Agreement" means the Amendment
Agreement dated as of June 1, 1993, among the Company, the
Borrowing Subsidiary, the Banks, the Departing Banks (as
defined therein and the Agent.
"Applicable CD Rate" means on a per annum basis,
in respect of any Loan, for each day during the Interest
Period for such Loan, the sum of (i) the Adjusted CD Rate as
determined by the Agent plus (ii) the Applicable Margin.
"Applicable LIBO Rate" means on a per annum basis,
in respect of any Loan, for each day during the Interest
Period for such Loan, the sum of (i) the LIBO Rate as
determined by the Agent plus (ii) the Applicable Margin.
"Applicable Margin" means, during each period set
forth in Section 3.6(d), the rate per annum set forth
opposite the applicable condition on Schedule II hereto for
each type of Loan listed thereon.
"Applicable Percentage" of any Bank means the
percentage set opposite such Bank's name on Schedule III
hereto.
"Applicable Reference Rate" means on a per annum
basis in respect of any Reference Rate Loan, for any day,
the sum of the Alternate Base Rate plus the Applicable
Margin.
"Assessment Rate" means with respect to each day
during an Interest Period, the net annual assessment rate
(rounded upwards, if not already a whole multiple of 1/100
of l%, to the next highest whole multiple of 1/100 of 1%)
determined by the Agent to be payable to the Federal Deposit
Insurance Corporation or any successor ("FDIC") for FDIC's
insuring time deposits made in Dollars at offices of
Chemical Bank in the United States as of the day two
Business Days prior to the first day of such Interest
Period.
"Assigned Agreements" means the Contract of Work
and the Concentrate Sales Agreements.
"Assignment Agreement" means the Amended and
Restated Pledge and Assignment and General Assignment of
Accounts Receivable dated as of October 27, 1989, between FI
and the FI Trustee, as such agreement may be further amended
or modified and in effect from time to time.
"Available Borrowing Base" means at any time the
amount of the Borrowing Base at such time minus the
aggregate principal amount outstanding at such time of all
Borrowing Base Debt, net of unamortized discount, if any, FI
Free Cash and FTX Free Cash; provided, however, that the
Available Borrowing Base shall be reduced only once by the
aggregate principal amount of any Guarantees already
deducted in the calculation of the Available Borrowing Base.
"Bank" means each bank signatory hereto and its
successors and permitted assigns under Section 10.3(d).
"Board" means the Board of Governors of the
Federal Reserve System of the United States.
"Borrowers" means the Company and the Borrowing
Subsidiary.
"Borrowing Base" means at any time the amount (not
in excess of the then effective Borrowing Base Cap approved
by the Required Borrowing Base Banks) calculated as the
Borrowing Base then in effect pursuant to Article II.
"Borrowing Base Bank" means each Bank and, until
such time as the FM Lenders shall by their written consent
release all recourse under the FM Credit Agreement and the
related documents against FTX, each FM Lender.
"Borrowing Base Cap" has the meaning assigned to
such term in Section 2.1.
"Borrowing Base Certificate" means a certificate
described in Section 5.1(g), duly completed by a Responsible
Officer certifying the attachments thereto as those
described in such Section.
"Borrowing Base Debt" means (A) all Debt of the
Company or any Restricted Subsidiary referred to in
Section 5.2(g), other than clauses (i)(F), (ii), (iv), (v)
and (vii)(A); (B) 45%, or such other percentage as
represents FRP's then current Capital Interest, of the Debt
of IMC-Agrico referred to in Section 5.2(r); (C) Guarantees
of the Company or any Restricted Subsidiary, to the extent
related to the payment of Debt, including, without
limitation, Guarantees by FI of the Debt of ALatief-FI and
Guarantees by the Company of FM Properties Indebtedness, but
in each case without duplication of any other category
referred to in this definition; provided that the Guarantee
by the Company of FM Properties Indebtedness shall be deemed
offset to the extent of the FM Properties Credit; and (D)
upon the incurrence of the initial financing referred to in
Section 7.2 of the ALatief-FI Joint Venture Agreement
(unless such financing is Guaranteed by FI) an amount (not
in excess of the principal amount of such financing)
satisfactory to the Required Borrowing Base Banks.
"Borrowing Base Factors" has the meaning assigned
to such term in Section 2.1.
"Borrowing Date" means, with respect to any Loan,
the date on which such Loan is disbursed.
"Borrowing Subsidiary" means FRP.
"Business Day" means a day on which the Banks are
each open for business at their respective Domestic Offices;
provided that when the term "Business Day" is used with
respect to LIBO Rate Loans, such term shall mean a day on
which the Banks are each also open for business at their
respective LIBOR Offices.
"Capital Interest" has the meaning assigned to
such term in Section 4.01 of the IMC-Agrico Partnership
Agreement.
"Capitalized Lease Obligation" means the
obligation of any Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
real and/or personal property which obligation is, or in
accordance with GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting
Standards Board) is required to be, classified and accounted
for as a capital lease on a balance sheet of such Person
under GAAP, and for purposes of this Agreement the amount of
such obligation shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Flow Ratio" means, for purposes of
Schedules II-1 and II-2 hereto, at the end of any fiscal
quarter, the cumulative sum, for the four consecutive fiscal
quarters ending with such quarter, of the Company's
(a) Consolidated Cash Flow, minus interest expense and
capitalized interest paid or accrued on Debt and Corporate
Group Loans and minus extraordinary or unusual nonrecurring
cash items included in Consolidated Cash Flow, divided by
(b) the aggregate principal amount of all Debt and Corporate
Group Loans outstanding at the end of such fiscal quarter.
"CD Rate Loan" means any Loan for which interest
is determined, in accordance with the provisions hereof, at
the Applicable CD Rate.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral Agent" means Chemical Bank in its
capacity as Collateral Agent for the Lenders (as defined in
the FTX Intercreditor Agreement) under the FTX Intercreditor
Agreement.
"Commitment" means, with respect to each Bank, the
Commitment of such Bank hereunder as set forth on
Schedule III hereto, as the same may be permanently
terminated or reduced from time to time pursuant to
Section 3.8. The Commitment of each Bank shall
automatically and permanently terminate on the Maturity
Date.
"Commitment Fee" has the meaning assigned to such
term in Section 3.7(a).
"Commitment Period" means the period commencing
with and including the Original Execution Date and ending on
but not including the Maturity Date.
"Commitment Transfer Supplement" means a
Commitment Transfer Supplement, substantially in the form of
Exhibit D.
"Concentrate Sales Agreements" means all contracts
and agreements with respect to the sale or disposition of
ores or minerals produced by the mining, concentrating and
related operations conducted by FI pursuant to the Contract
of Work, as such agreements may be amended and in effect
from time to time.
"Consolidated Cash Flow" means, with respect to
any Person and for any fiscal quarter, the sum of
(a) consolidated net income after taxes (before deducting
minority interests in net income (loss) of consolidated
subsidiaries, but disregarding all extraordinary or unusual
noncash items in calculating such net income) of such Person
and such Person's subsidiaries for such quarter;
(b) consolidated interest paid or accrued on the Corporate
Group Loans and on Debt by such Person or subsidiaries
during such quarter and deducted in determining consolidated
net income; plus (c) depreciation, depletion and
amortization charges and deferred taxes deducted in
computing consolidated net income; provided that such
calculation will exclude items relating to Nonrestricted
Subsidiaries.
"Contract of Work" shall mean the Contract of Work
made December 30, 1991, between the Ministry of Mines of the
Government of the Republic of Indonesia, acting for and on
behalf of the Government of the Republic of Indonesia, and
FI, together with any related Implementation Agreement or
Memorandum of Understanding with such Ministry of Mines
acting on behalf of the Government of the Republic of
Indonesia, as such agreement may be implemented,
supplemented or amended and in effect from time to time.
"Conversion Date" means June 28, 1996.
"Corporate Group Facility" means this Agreement
and the FI Credit Agreement.
"Corporate Group Loan Exposure" means the sum of
Loan Exposure plus FI Credit Agreement Loan Exposure.
"Corporate Group Loans" means the Loans made
hereunder and the FI Credit Agreement Loans made under the
FI Credit Agreement.
"Corporate Group Notes" means the Promissory Notes
and the FI Agreement Notes.
"Credit Event" means the making of a Loan.
"Debt" means at any time (1) Indebtedness for
Borrowed Money, (2) the undischarged balance of any
production payment, (3) the unearned balance of any advance
payment received under any contract, and (4) debt created,
issued, Guaranteed, incurred or assumed for the deferred
(for 180 days or more) purchase price of property or
services purchased; excluding, however, accrued expenses and
accounts payable (other than for such deferred purchase
price and/or for borrowed money) incurred in the ordinary
course of business; provided that the same are not overdue
in a material amount or, if overdue, are being contested in
good faith and by appropriate proceedings and also
excluding, for purposes of Section 7.1(i), any obligation or
liability in respect of Debt (including the undischarged
balance of any production payment and the unearned balance
of any advance payment received under any contract) for the
repayment or satisfaction of which the recourse of the
creditor is limited to specified assets or properties (or
the proceeds of production therefrom) of the Company or any
Restricted Subsidiary.
"Deemed Lease" means an agreement characterized by
the parties thereto as a lease solely for income tax
purposes and as to which such parties have elected to have
the provisions of the former Section 168(f)(8) of the
Internal Revenue Code of 1954 apply.
"Default" means any event which upon the giving of
notice or lapse of time or both would become an Event of
Default.
"Dollars" or "$" means United States Dollars.
"Domestic Office" means, for any Bank, the
Domestic Office set forth for such Bank on the signature
pages hereof, unless such Bank shall designate a different
Domestic Office by notice in writing to the Agent and the
Company.
"Equity Payment" means (i) any cash dividend on,
or purchase, redemption or other payment in respect of, the
capital stock of the Company (other than mandatory dividend
payments on the Preferred Stock as in effect on the
Restatement Closing Date), (ii) open market purchases by the
Company of Depositary Units of FRP and (iii) open market
purchases by the Company of capital stock of FCX.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) which is a member of a group
of which the Company is a member and which is under common
control within the meaning of Section 414 of the Code.
"Event of Default" means any Event of Default
defined in Article VII.
"Facility Fee" has the meaning assigned to such
term in Section 3.7(b).
"FCC" means Freeport Chemical Company, a Delaware
corporation.
"FCX" means Freeport-McMoRan Copper & Gold Inc., a
Delaware corporation.
"FCX Note" means a promissory note for the benefit
of the Company evidencing all loans made by the Company to
(or notes, debentures, bonds or other obligations issued to
the Company by) FCX with the proceeds of Loans,
substantially in the form of Exhibit I-2.
"FI" means P.T. Freeport Indonesia Company, a
limited liability company organized under the laws of
Indonesia and domesticated in Delaware.
"FI Agent" means Chemical Bank as agent for the FI
Lenders under the FI Credit Agreement.
"FI Agreement Notes" means the promissory notes of
FI issued to the FI Lenders pursuant to the FI Credit
Agreement.
"FI Amendment Agreement" means the Second
Amendment dated as of June 1, 1993, among FI, the FI
Lenders, the Departing Banks (as defined therein), the
Departing Agents (as defined therein) and the FI Agent.
"FI Amendment Closing Date" has the meaning
assigned to such term in Section 2(b) of the FI Amendment
Agreement.
"FI Borrowing Base" has the meaning assigned such
term in Section 2.1.
"FI Credit Agreement" means the Amended and
Restated Credit Agreement entered into as of October 27,
1989, as amended as of December 20, 1991, and as of June 1,
1993, among FI, the FI Lenders, the FI Trustee (for purposes
of Article VIII only) and the FI Agent, as the same may be
further amended and in effect from time to time.
"FI Credit Agreement Loan" means any loan made by
the FI Lenders pursuant to the FI Credit Agreement.
"FI Credit Agreement Loan Exposure" means the
aggregate amount of unpaid principal of all FI Credit
Agreement Loans made by the FI Lenders.
"FI Credit Agreement Total Commitment" means
$550,000,000, the committed amount, as the same may be
permanently terminated or reduced from time to time.
"FI Credit Event" means the making of an FI Credit
Agreement Loan.
"FI Free Cash" means the product of (i) the lesser
of (x) the then outstanding Borrowing Base Debt of FI and
(y) 95% of all amounts above $30,000,000 held by FI in cash
or unencumbered Permitted Investments, and (ii) 1.0 minus
the MS Factor of FI.
"FI Lenders" means the banks party to the FI
Credit Agreement.
"FI Obligations" has the meaning assigned to such
term in Section 9.1.
"FI Product" means ores or minerals produced by
the FI Project or otherwise obtained from the Mining Area
(as defined in the Contract of Work) and any kinds of
products, including, without limitation, concentrates,
produced from such ores or minerals.
"FI Project" means the mining, concentrating and
related operations conducted or to be conducted by FI in
Irian Jaya, Indonesia, pursuant to the Contract of Work.
"FI Receivables Purchase Agreement" means any
agreement entered into by FI with respect to the sale by FI
of accounts receivable.
"FI Security Documents" means the FI Trust
Agreement, the Assignment Agreement, the Surat Kuasa, the
Fiduciary Transfer, the Fiduciary Assignment, the Fiduciary
Power and all Uniform Commercial Code financing statements
and their Indonesian equivalents required to be filed
hereunder or under the FI Security Documents.
"FI Trust Agreement" means the Trust Agreement
dated as of May 15, 1970, as amended through the FI
Amendment Closing Date, among FI, the Banks, the FI Lenders
and the FI Trustee, as the same may be further amended and
in effect from time to time.
"FI Trustee" means Morgan Guaranty Trust Company
of New York, or any successor trustee, as trustee for the FI
Lenders pursuant to the FI Trust Agreement and, in such
capacity, as security agent for the FI Lenders under the FI
Security Documents.
"Fiduciary Assignment" means the Fiduciary
Assignment of Accounts Receivable (the Penyerahan Hak Atas
Tagihan) dated December 30, 1991, as amended by the First
Amendment thereto dated the FI Amendment Closing Date,
granted by FI to the FI Trustee, as the same may be further
amended and in effect from time to time.
"Fiduciary Power" means the Power of Attorney to
Establish Fiduciary Transfer (Kuasa Untuk Memasang
Penyerahan Hak Milik Fidusia) dated December 30, 1991, as
amended by the First Amendment thereto dated the FI
Amendment Closing Date, granted by FI to the FI Trustee (the
"Fiduciary Power"), as the same may be further amended and
in effect from time to time.
"Fiduciary Transfer" means the Fiduciary Transfer
of Assets (Penyerahan Hak Secara Fidusia) dated December 30,
1991, as amended by the First Amendment thereto dated the FI
Amendment Closing Date, granted by FI to the FI Trustee, as
amended and in effect from time to time.
"Financial Officer" of any corporation means the
principal financial officer, principal accounting officer,
treasurer, assistant treasurer or controller of such
corporation.
"Fixed Charges" means, for any Person at the end
of any fiscal quarter, the cumulative sum, for the four
consecutive quarters ending with such quarter, of (a) the
aggregate principal amount of all Corporate Group Loans
required to be repaid pursuant to Section 3.8(b) of each of
this Agreement and the FI Credit Agreement and all Debt paid
or payable by such Person and such Person's Subsidiaries
(other than Nonrestricted Subsidiaries) during such quarters
plus (b) all interest paid or payable on Debt and Corporate
Group Loans by such Person and such Person's Subsidiaries
(other than Nonrestricted Subsidiaries) during such
quarters; provided, however, that any principal amount of
Debt and any interest payable in one fiscal quarter and paid
in another shall not be twice included in Fixed Charges;
provided further, however, that any Corporate Group Loans
prepaid pursuant to Section 3.10(a) or Section 3.10(c) of
either this Agreement or the FI Credit Agreement or
continued or converted pursuant to Section 3.11 of either
this Agreement or the FI Credit Agreement and any other Debt
prepaid, continued, converted or refinanced pursuant to
similar provisions of agreements or instruments governing
such other Debt shall not be included as Fixed Charges if
such Debt would not otherwise have matured within three
months of such prepayment, continuation, conversion or
refinancing.
"Fixed Charge Ratio" means for any Person at the
end of any fiscal quarter, the quotient, for the four
consecutive quarters ending with such quarter, of
(a) Consolidated Cash Flow divided by (b) Fixed Charges.
"FM Agent" means Chemical Bank as agent for the FM
Lenders under the FM Credit Agreement.
"FM Corporation" means FM Properties Inc., a
Delaware corporation.
"FM Credit Agreement" means the Credit Agreement
dated as of June 11, 1992, among FM Properties, the Company,
the FM Lenders and the FM Agent, as the same may be amended
and in effect from time to time.
"FM Lenders" means the banks party to the FM
Credit Agreement.
"FM Properties" means FM Properties Operating Co.,
a Delaware general partnership whose partners are the
Company and FM Corporation.
"FM Properties Credit" has the meaning assigned to
such term in Section 2.1(iv).
"FM Properties Indebtedness" means the obligations
of FM Properties under the FM Credit Agreement and up to
$125,000,000 principal amount of the obligations of FM
Properties (including Guarantees of obligations of
Nonrestricted Subsidiaries as to which FM Properties became
a guarantor) assumed in connection with the transfer by the
Company of certain oil, gas and real estate assets to FM
Properties as described in the Information Statement
contained in the Registration Statement filed by FM
Corporation on Form 10 with the SEC for the registration of
the common stock, par value $.01 per share, and related
preferred stock purchase rights of FM Corporation under the
Securities Exchange Act of 1934, as such Form 10 was amended
through June 9, 1992.
"FRP" means Freeport-McMoRan Resource Partners,
Limited Partnership, a Delaware limited partnership.
"FRP Borrowing Base" has the meaning assigned such
term in Section 2.1.
"FRP GPCo" means the direct or indirect Restricted
Subsidiary of the Company, the common stock of which is
wholly-owned by FCC, which is the entity which has the
rights and obligations of FRP GPCo as defined in and
contemplated by the IMC-Agrico Contribution Agreement.
"FRP Obligations" has the meaning assigned to such
term in Section 9.1.
"FRP Partner" means the limited partnership of
which FRP will own a majority limited partnership interest
and which has the rights and obligations of FRP Partner as
defined in and contemplated by the IMC-Agrico Contribution
Agreement.
"FRP Pledge Agreement" means a pledge agreement in
the form of Exhibit G-1, to be executed by FRP and delivered
to the Collateral Agent pursuant to section 5.1(h), as such
agreement may be amended and in effect from time to time.
"FRP Security Agreement" means a security
agreement in the form of Exhibit H-1, to be executed by FRP
and delivered to the Collateral Agent pursuant to
Section 5.1(h), as such agreement may be amended and in
effect from time to time.
"FRP Subsidiary Pledge Agreement" means a pledge
agreement in the form of Exhibit G-2, to be executed by a
Wholly-Owned Restricted Subsidiary of FRP and delivered to
the Collateral Agent pursuant to Section 5.1(h), as such
agreement may be amended and in effect from time to time.
"FRP Subsidiary Security Agreement" means a
security agreement in the form of Exhibit H-2, to be
executed by a Wholly-Owned Restricted Subsidiary of FRP and
delivered to the Collateral Agent pursuant to
Section 5.1(h), as such agreement may be amended and in
effect from time to time.
"FTX Borrowing Base" has the meaning assigned to
such term in Section 2.1.
"FTX Free Cash" means the lesser of (i) the then
outstanding Borrowing Base Debt of the Company and (ii) 75%
of all amounts above $50,000,000 held by the Company in cash
or unencumbered Permitted Investments.
"FTX Intercreditor Agreement" means the
Intercreditor Agreement entered into as of June 11, 1992, as
amended and restated in its entirety as of June 1, 1993,
among the Agent on behalf of the Banks, the FI Agent on
behalf of the FI Lenders, the FM Agent on behalf of the FM
Lenders, Hibernia National Bank as agent for the Pel-Tex
Bank Lenders, the Burke Parties (as defined therein) and
Chemical Bank, as collateral agent, as such agreement may be
further amended and in effect from time to time.
"FTX Pledge Agreement" means a pledge agreement in
the form of Exhibit A-1 to the FTX Intercreditor Agreement,
to be executed by FTX and delivered to the Collateral Agent
pursuant to Section 5.1(h), as such agreement may be amended
and in effect from time to time.
"FTX Security Agreement" means a security
agreement in the form of Exhibit B-l to the FTX
Intercreditor Agreement, to be executed by FTX and delivered
to the Collateral Agent pursuant to Section 5.1(h), as such
agreement may be amended and in effect from time to time.
"FTX Subsidiary Pledge Agreement" means a pledge
agreement in the form of Exhibit A-2 to the FTX
Intercreditor Agreement, to be executed by a wholly-owned
Restricted Subsidiary of FTX and delivered to the Collateral
Agent pursuant to Section 5.1(h), as such agreement may be
amended and in effect from time to time.
"FTX Subsidiary Security Agreement" means a
security agreement in the form of Exhibit B-2 to the FTX
Intercreditor Agreement, to be executed by a wholly-owned
Restricted Subsidiary of FTX and delivered to the Collateral
Agent pursuant to Section 5.1(h), as such agreement may be
amended and in effect from time to time.
"GAAP" has the meaning assigned to such term in
Section 1.2.
"Governmental Authority" means any United States
or Indonesian Federal, state, local or foreign court or
governmental agency, authority, instrumentality or
regulatory body.
"Governmental Rule" means any statute, law,
treaty, rule, code, ordinance, regulation, permit,
certificate or order of any Governmental Authority or any
judgment, decree, injunction, writ, order or like action of
any court, arbitrator or other judicial or guasijudicial
tribunal.
"Guarantee" means, with respect to any Person, any
obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing
any Debt or obligation of any other Person in any manner,
whether directly or indirectly, and including, without
limitation, any agreement to pay dividends or other
distributions upon the stock of such other Person, or any
obligation of such other Person, direct or indirect, (i) to
purchase (or advance or supply funds for the purchase of)
any security for the payment of such Debt, obligation,
dividend or distribution, (ii) to purchase property,
securities or services for the purpose of assuring the owner
of such Debt or obligation or the holder of such stock of
the payment of such Debt, obligation, dividend or
distribution including, without limitation, any take-or-pay
contract or agreement to buy a minimum amount or quantity of
production or to provide an operating subsidy which, in each
case, is utilized for a third party financing, or (iii) to
maintain working capital, equity capital or any other
financial statement condition of the primary obligor, so as
to enable the primary obligor to pay such Debt, obligation,
dividend or distribution; provided, however, that the term
Guarantee shall not include any endorsement for collection
or deposit in the ordinary course of business.
"HLT" means a transaction which the Agent, on the
basis of any of (i) applicable law, (ii) the rules,
regulations, interpretations, guidelines, statements of
policy, published or unpublished, or directives of Federal
or state bank regulatory authorities and (iii) practices
prevailing in the market as to the interpretation or
application of items referred to in (i) or (ii) above,
classifies as a "highly leveraged transaction" or gives a
similar or successor classification.
"IMC" means IMC Fertilizer, Inc., a Delaware
corporation.
"IMC-Agrico" means a general partnership whose
partners will be FRP Partner, IMC Partner and IMC-Agrico MP,
or such other entity which will have the rights and
obligations of the Partnership as defined in and
contemplated by the IMC-Agrico Contribution Agreement.
"IMC-Agrico Contribution Agreement" means the
Contribution Agreement dated as of April 5, 1993, between
FRP and IMC, as amended and in effect from time to time as
permitted by Section 5.2(r).
"IMC-Agrico MP" means a corporation, the equity
interest in which will be owned by the FRP Partner and the
IMC Partner, or such other entity (other than a direct or
indirect subsidiary of IMC-Agrico) that shall have the
rights and obligations of the Managing Partner as defined in
and contemplated by the IMC-Agrico Contribution Agreement.
"IMC-Agrico Note" means, collectively, the
promissory notes for the benefit of each of FTX and FRP and
any other Wholly-Owned Restricted Subsidiary, in each case
evidencing all loans made by such Person to (or notes,
debentures, bonds or other obligations issued to such Person
by) each of IMC-Agrico, FRP Partner and FRP GPCo with the
proceeds of Loans, substantially in the form of Exhibit I-1.
"IMC-Agrico Parent Agreement" means the Parent
Agreement to be entered into by and among IMC, FRP, FTX and
IMC-Agrico, substantially in the form of Exhibit B to the
IMC-Agrico Contribution Agreement, as amended and in effect
from time to time as permitted by Section 5.2(r).
"IMC Partner" means a corporation that has the
rights and obligations of IMC GPCo as defined in and
contemplated by the IMC-Agrico Contribution Agreement.
"IMC-Agrico Partnership Agreement" means the
Partnership Agreement to be entered into by and among FRP
Partner, IMC Partner and IMC-Agrico MP, substantially in the
form of Exhibit A to the IMC-Agrico Contribution Agreement,
as amended and in effect from time to time as permitted by
Section 5.2(r).
"IMC-Agrico Transfer" means the transfer by FRP to
IMC-Agrico of certain assets related to the phosphate
chemicals business, as described in the IMC-Agrico
Contribution Agreement.
"Indebtedness for Borrowed Honey" means, for any
Person, all Guarantees of such person plus all liabilities
of such Person, other than Corporate Group Loans and
Guarantees thereof, in respect of (a) money borrowed,
(b) notes, debentures, bonds or other obligations issued,
(c) obligations for deferred payment for property purchased
having an original maturity greater than one year after the
date of incurrence thereof and (d) Capitalized Lease
Obligations.
"Indocopper Shareholders Agreement" means the
Amended and Restated Shareholders Agreement dated as of
November 12, 1992, by and among P.T. Indocopper Investama
Corporation, FCX, certain individuals and P.T. Bakrie
Investindo.
"Interest Payment Date" means (i) as to any
Reference Rate Loan, the next succeeding March 31, June 30,
September 30 or December 31 (subject to Section 3.17), or if
earlier, the Maturity Date, and (ii) as to any other Loan,
the last day of the Interest Period applicable to such Loan
(and, in the case of any Interest Period of more than three
months' or 90 days' duration, the date that would be the
last day of such Interest Period if such Interest Period
were of three months' or 90 days' duration) and the date of
any conversion or continuation of such Loan to a Loan of a
different type.
"Interest Period" means (i) as to any LIBO Rate
Loan, the period commencing on the date of such LIBO Rate
Loan and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day)
in the calendar month that is 1, 2, 3 or 6 months
thereafter, as the applicable Borrower may elect, (ii) as to
any CD Rate Loan, a period of 30, 60, 90 or 180 days'
duration, as the applicable Borrower may elect, commencing
on the date of such CD Rate Loan and (iii) as to any
Reference Rate Loan, the period commencing on the date of
such Reference Rate Loan and ending on the earliest of
(x) the next succeeding March 31, June 30, September 30 or
December 31, (y) the Maturity Date and (z) the date such
Reference Rate Loan is converted to a Loan of another type
or repaid or prepaid as permitted hereby; provided, however,
that (1) if any Interest Period would end on a day that
shall not be a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, with
respect to LIBO Rate Loans only, such next succeeding
Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding
Business Day, (2) no Interest Period may be selected with
respect to a LIBO Rate Loan or a CD Rate Loan that would end
later than a Reduction Date occurring after the making of
such Loan if the aggregate outstanding principal amount of
the Corporate Group Loans (after giving effect to all
borrowings and payments of Corporate Group Loans made on the
date of such Loan) having Interest Periods extending beyond
such Reduction Date would otherwise exceed the aggregate
amount of the Commitments as reduced on such Reduction Date,
(3) no Interest Period with respect to any Loan shall end
later than the Maturity Date and (4) interest shall accrue
from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"KfW" means Kreditanstalt f r Wiederaufbau, a
corporation organized under the public law of the Federal
Republic of Germany.
"KfW Credit Agreement" means a credit agreement
between FI and KfW pursuant to terms approved in writing by
the Agent, as amended and in effect from time to time.
"LIBO Rate" means, with respect to any LIBO Rate
Loan for any Interest Period, an interest rate per annum
(rounded upwards, if not already a whole multiple of 1/100
of 1%, to the next higher 1/100 of 1%) equal to the
arithmetic average of the respective rates per annum at
which dollar deposits approximately equal in principal
amount to such LIBO Rate Loan and for a maturity equal to
the applicable Interest Period are offered in immediately
available funds to the London branches of the Reference
Banks in the London Interbank Market for Eurodollars at
approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
"LIBO Rate Loan" means any Loan for which interest
is determined, in accordance with the provisions hereof, at
the Applicable LIBO Rate.
"LIBOR Office" means, for any Bank, the LIBOR
Office set forth for such Bank on the signature pages hereof
or as otherwise notified in writing to the Agent and the
Company, unless such Bank shall designate a different LIBOR
Office by notice in writing to the Agent and the Company.
"Liens" means with respect to any asset, (a) a
mortgage, deed of trust, lien, pledge, encumbrance, charge
or security interest in or on such asset, (b) the interest
of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement
relating to such asset, (c) in the case of securities, any
purchase option, call or similar right of a third party with
respect to such securities except for any purchase option,
call or similar right under the Partnership Agreement as in
effect on the Restatement Closing Date or as modified from
time to time with the consent of the Required Banks and
(d) other encumbrances of any kind, including, without
limitation, production payment obligations.
"Loan" means any loan made pursuant to
Section 3.2.
"Loan Documents" means the Amendment Agreement,
the Corporate Group Facility, the Corporate Group Notes, the
FTX Intercreditor Agreement, the Security Agreement, the
Pledge Agreement, the FI Security Documents and all other
agreements, certificates and instruments now or hereafter
entered into in connection with any of the foregoing, in
each case as amended and modified from time to time.
"Loan Exposure" means the aggregate amount of
unpaid principal of all Loans made by the Banks.
"Long-Term Concentrate Sales Agreement" means any
Concentrate Sales Agreement with a term of at least one
year.
"Major Subsidiary" means each of FI and FRP.
"Margin Stock" has the meaning assigned to such
term in Regulation U of the Board, as the same is from time
to time in effect.
"Maturity Date" means December 31, 1999, or, if
earlier, the date of termination of the Commitments pursuant
to the terms hereof.
"Memorandum of Understanding" means the Memorandum
of Understanding dated as of December 27, 1991, between the
Ministry of Mines and Energy of the Government of the
Republic of Indonesia, acting for and on behalf of said
Government, and FI, as amended, modified or supplemented and
in effect from time to time.
"MS Factor" has the meaning assigned to such term
in Section 2.1.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Company
or any ERISA Affiliate is making or accruing an obligation
to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make
contributions.
"Net Asset Value" means the present value assigned
to an asset by the Company based on the assumptions utilized
in the most recent engineering or other asset valuation
report provided to each Borrowing Base Bank pursuant to
Section 5.1(g), as adjusted for the Company's net ownership
interest and after coverage as provided in the most recent
Borrowing Base Certificates, as certified by the Treasurer
or another Financial Officer of the Company for purposes of
Section 2.5.
"Net Proceeds" means (i) the gross fair market
value of the consideration or other amounts payable to or
receivable by the Company, any Restricted Subsidiary and
IMC-Agrico, in respect of any sales, transfers,
distributions (other than cash dividends and dividends by
the Company consisting of stock or units of the
Subsidiaries) or other dispositions of assets or properties
(including any capital or other equity interests owned, but
excluding direct issuances of equity by the Company or a
Restricted Subsidiary other than in the ordinary course of
business, less (ii) the amount, if any, of all taxes (but
including income taxes only to the extent such Person
reasonably estimates that such income taxes will be paid on
the date of the next income tax filing by such Person or
such affiliate of such Person), and reasonable and customary
fees, commissions, costs and other expenses (other than
those payable to the Company, any Restricted Subsidiary, IMC
or any affiliate of IMC) which are incurred in connection
with such sales, transfers, distributions or other
dispositions and are payable by the seller or the transferor
of the assets or property to which such sales, transfers,
distributions or other dispositions relate, but only to the
extent not already deducted in arriving at the amount
referred to in clause (i); provided, however, that with
respect to IMC-Agrico, for purposes of Section 2.5, only the
FRP Share in excess of $25,000,000 shall be deemed to
constitute Net Proceeds. "FRP Share" means the Capital
Interest of FRP Partner multiplied by the amount preceding
this proviso.
"1992 Form l0-K" has the meaning assigned to such
term in Section 4.1(e).
"Nonrestricted Subsidiary" means (i) any of the
following: Bella Luna Incorporated, a Louisiana
corporation, Eastern Mining Company Inc. a Delaware
corporation, Freeport Copper Company, a Delaware
corporation, Freeport-McMoRan Chile Inc., a Delaware
corporation, Freeport-McMoRan Spain Incorporated, a Delaware
corporation, Freeport-McMoRan Thaitex Company, a Delaware
corporation, Freeport-Warim, Inc., a Delaware corporation,
P.T. Indonesia Freeport Finance Company, an Indonesian
corporation, Freeport Egyptian Sulphur Company, a Delaware
corporation, Dill Holdings Incorporated, a Delaware
corporation, Freeport International, Incorporated, a
Delaware corporation, and Freeport Mining Company, a
Delaware corporation, (ii) any Subsidiary of any
Nonrestricted Subsidiary and (iii) any surviving corporation
(other than the Company or a Restricted Subsidiary) into
which any of such corporations referred to in clause (i) or
(ii) is merged or consolidated, subject to Section 5.2(c)
and (iv) any Subsidiary organized after the date of this
Agreement for the purpose of acquiring the stock or assets
of another Person or for start-up ventures or exploration
programs or activities. By written notice to the Agent, the
Company may (x) declare any Nonrestricted Subsidiary to be a
Restricted Subsidiary and such former Nonrestricted
Subsidiary shall thereafter be deemed to be a Restricted
Subsidiary for all purposes of this Agreement or (y) at any
time other than when a Default or Event of Default has
occurred and is continuing or the aggregate principal amount
of the Corporate Group Loans exceeds the Available Borrowing
Base, in any fiscal year, declare one or more Restricted
Subsidiaries, the interest of the Company in all of which
has an equity value or loan investment of less than
$5,000,000 in the aggregate, to be a Nonrestricted
Subsidiary and any such former Restricted Subsidiary shall
thereafter be deemed to be a Nonrestricted Subsidiary for
all purposes of this Agreement.
"Operating Lease" means any lease other than a
lease giving rise to a Capitalized Lease Obligation.
"Original Execution Date" means May 15, 1991.
"Partnership Agreement" has the meaning assigned
to such term in the FM Credit Agreement.
"PBGC" means the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.
"Pel-Tex Agreements" means the Loan Agreement and
related documents dated as of December 31, 1985, as amended
and in effect from time to time, among the Company, as
ultimate successor to FMP Operating Company (as purchaser),
and Pel-Tex Oil Company, Inc., Chenier Oil Company, Inc.,
Burke and Pel-Tex Oil Company, Inc., doing business as
Burmont Company, Earl P. Burke, Jr., and Fay Stouder Burke
(as sellers).
"Pel-Tex Bank Agreement" means the Credit
Agreement dated as of December 31, 1985, among the Burke
Parties, the banks named therein and Hibernia National Bank,
as agent for such banks, as the same may be amended and in
effect from time to time.
"Pel-Tex Lenders" means, collectively, Burke Oil
Company (formerly, Pel-Tex Oil Company, Inc.), Chenier Oil
Company, Inc., Burke and Pel-Tex Oil Company, Inc., doing
business as Burmont Company, Earl P. Burke, Jr., and Fay
Stouder Burke (collectively, the "Burke Parties") and the
banks party to the Pel-Tex Bank Agreement.
"Permitted Investments" means (a) certificates of
deposit of, or other bank accounts with, banks (or with
their branches) having a short-term deposit rating issued by
Moody's Investors Services, Inc., of P-l; (b) investments in
readily marketable money market funds having assets in
excess of one billion dollars, which assets have an average
life of less than one year and an average quality of at
least "A" as rated by Standard & Poor's Corporation or
Moody's Investors Services, Inc.; and (c) commercial paper
rated A-1 by Standard & Poor's Corporation or P-l by Moody's
Investors Services, Inc.
"Permitted Secured Swap" means any interest rate
protection agreement or commodities price protection
agreement between FTX, FI or FRP and any Bank that shall be
ratably secured pursuant to this Agreement, the FTX
Intercreditor Agreement, an intercreditor agreement relating
to the assets of FI subject to the FI Security Documents
and, in the case of any such interest rate or commodities
price protection agreement with FI, the FI Security
Documents.
"Person" means an individual or a corporation,
partnership, trust, incorporated or unincorporated
association, joint stock company, government (or an agency
or political subdivision thereof) or other entity of any
kind.
"Plan" means any pension plan (other than a
Multiemployer Plan) which is subject to the provisions of
Title IV of ERISA and which is maintained for employees of
the Company or any ERISA Affiliate.
"Pledge Agreement" means, collectively, the FRP
Pledge Agreement, any FRP Subsidiary Pledge Agreement, the
FTX Pledge Agreement and any FTX Subsidiary Pledge
Agreement.
"Policies", with respect to the Agent and any
Borrowing Base Bank, means the normal policy guidelines on
price parameters, cost escalations and discount and other
factors and technical assumptions customarily used by the
Agent or Borrowing Base Bank in evaluating energy and
natural resource-related credits.
"Power Facilities Transfer" means, collectively,
each transfer by FI of electric power generation and
transmission facilities with arrangements providing for the
continued supply of electric power to the FI Project, all on
terms and conditions approved by the Agent.
"Preferred Stock" has the meaning assigned to such
term in Section 5.2(q).
"Promissory Notes" means the promissory notes of
each Borrower referred to in Section 3.5.
"Reduction Date" has the meaning assigned to such
term in Section 3.8(b).
"Reference Banks" means Chemical Bank, ABN Amro
Bank, N.V. and National Westminster Bank, PLC.
"Reference Rate Loan" means any Loan for which
interest is determined, in accordance with the provisions
hereof, at the Applicable Reference Rate.
"Reportable Event" means any "reportable event" as
defined in Section 4043(b) of ERISA or the regulations
issued thereunder.
"Required Banks" means at any time Banks having
Commitments representing at least 66-2/3% of the aggregate
Commitments hereunder.
"Required Borrowing Base Banks" means at any time
Borrowing Base Banks having at least 66-2/3% of the
aggregate amount of (i) the outstanding Commitments under
this Agreement plus, (ii) until such time as the FM Lenders
shall by their written consent release all recourse under
the FM Credit Agreement and the related documents against
FTX, at all times before and on the Conversion Date (as
defined in the FM Credit Agreement), the aggregate amount of
the outstanding commitments under the FM Credit Agreement,
and at all times after the Conversion Date (as so defined),
the aggregate amount of the outstanding loans under the FM
Credit Agreement.
"Responsible Officer" of any corporation means any
executive officer or Financial Officer of such corporation
and any other officer or similar official thereof
responsible for the administration of the obligations of
such corporation in respect of this Agreement.
"Restatement Closing Date" shall have the meaning
given such term in the Amendment Agreement.
"Restricted Subsidiary" means FRP, FCX, FI, FRP
Partner, FRP GPCo, FCC and any other Subsidiary that is not
a Nonrestricted Subsidiary.
"Sales Proceeds Account" has the meaning assigned
to such term in the FI Trust Agreement.
"Scheduled Principal Payments" for any period and
for any Person means (i) the aggregate principal amount of
all Loans repaid pursuant to Section 3.10(b) by virtue of
Section 3.8(b) in such period, (ii) the aggregate principal
amount of all FI Credit Agreement Loans repaid pursuant to
Section 3.10(b) by virtue of Section 3.8(b) of the FI Credit
Agreement in such period, plus (iii) scheduled principal
payments on all Debt.
"SEC" means the Securities and Exchange
Commission.
"Security Agreement" means, collectively, the FRP
Security Agreement, any FRP Subsidiary Security Agreement,
the FTX Security Agreement and any FTX Subsidiary Security
Agreement.
"Shared Collateral" has the meaning assigned such
terms in the FTX Intercreditor Agreement.
"Statutory Reserves" means a fraction (expressed
as a decimal), the numerator of which is the number one and
the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including,
without limitation, any marginal, special, emergency, or
supplemental reserves) expressed as a decimal established by
the Board and any other banking authority to which any Bank
is subject (a) with respect to the Adjusted CD Rate, for new
negotiable time deposits in Dollars of over $100,000 with
maturities approximately equal to the applicable Interest
Period and (b) with respect to the LIBO Rate, for
Eurocurrency Liabilities (as defined in Regulation D of the
Board). Such reserve percentages shall include, without
limitation, those imposed under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as
of the effective date of any change in any reserve
percentage.
"Subordination Provisions" means the form of
subordination provisions attached hereto as Exhibit A.
"Subsidiary" means as to any Person, any
corporation at least a majority of whose securities having
ordinary voting power for the election of directors (other
than securities having such power only by reason of the
happening of a contingency) are at the time owned by such
Person and/or one or more other Subsidiaries of such Person
and any partnership (other than joint ventures for which the
intention under the applicable agreements, including
operating agreements, if any, is that such joint ventures be
partnerships solely for purposes of the Code) in which such
Person or a Subsidiary of such Person is a general partner;
provided that unless otherwise specified, "Subsidiary" means
a Subsidiary of the Company and provided, further, that FM
Properties, FM Corporation and IMC-Agrico shall not at any
time be Subsidiaries for any purposes of this Agreement.
"Surat Kuasa" means the Surat Kuasa (Power of
Attorney) dated December 30, 1991, as amended by the First
Amendment thereto dated the FI Amendment Closing Date,
granted by FI to the FI Trustee, as the same may be further
amended and in effect from time to time.
"Termination Event" means any event or condition
which constitutes grounds under Section 4042 of ERISA for
the termination of, or for the appointment of a trustee to
administer, any Plan.
"Total Commitment" means the sum of all the then
effective Commitments.
"Transfer Effective Date" has the meaning assigned
to such term in each Commitment Transfer Supplement.
"Transferee" means any Participant or Purchasing
Bank, as such terms are defined in Section 10.3.
"Unused Net Commitment Amount" means the aggregate
amount of the Commitments less the Corporate Group Loan
Exposure.
"Wholly-Owned Restricted Subsidiary" means any
Subsidiary, all of the stock of which is at the time owned
by FTX, FRP and/or one or more other Wholly-Owned Restricted
Subsidiaries of either of them.
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2. Accounting Terms. Except as
otherwise herein specifically provided, each accounting term
used herein shall have the meaning given it under United
States generally accepted accounting principles in effect
from time to time (with such changes thereto as are approved
or concurred in from time to time by the Company's
independent public accountants, as applicable) applied on a
basis consistent with those used in preparing the financial
statements referred to in Section 5.1(a) ("GAAP"); provided,
however, that each reference in Section 5.2 hereof, or in
the definition of any term used in Section 5.2 hereof, to
GAAP shall mean generally accepted accounting principles as
in effect on the Restatement Closing Date and as applied by
the Company in preparing the financial statements referred
to in Section 4.1(e).
SECTION 1.3. Section, Article, Exhibit and
Schedule References. Unless otherwise stated, Section,
Article, Exhibit and Schedule references made herein are to
Sections, Articles, Exhibits or Schedules, as the case may
be, of this Agreement.
ARTICLE II
Borrowing Base Determinations
SECTION 2.1. Annual Determination of Borrowing
Base. On or prior to the May 1 following the receipt by
each Borrowing Base Bank of the annual Borrowing Base
Certificate delivered pursuant to Section 5.1(g), the Agent
shall determine, based upon the assumption that the
Company's ownership interests in the Restricted Subsidiaries
will remain equal to the respective levels set forth in the
schedule referred to in Section 5.1(g)(C) attached to the
most recent Borrowing Base Certificate and upon the
information (including information as to projected cash
flows) contained in such Borrowing Base Certificate and the
reports attached thereto and on the Agent's Policies, (i) a
borrowing base calculated using the projected future cash
flow attributable to the Company's directly and indirectly
owned assets (the "FTX Borrowing Base"), (ii) a separate
borrowing base calculation for FRP (the "FRP Borrowing
Base") based on the projected future cash flow associated
with the assets of FRP, (iii) a separate borrowing base
calculation for FI (the "FI Borrowing Base") based on the
projected future cash flow associated with the assets of FI,
(iv) a separate borrowing base calculation for FM Properties
(the "FM Properties Credit") based on the projected future
cash flow associated with the assets of FM Properties (so
long as, and to the extent that, those assets are owned by
FM Properties and the guarantee by the Company of any FM
Properties Indebtedness is still outstanding), such credit
not to exceed the amount of the Company's guarantee and
(v) a maximum amount for the Borrowing Base (the "Borrowing
Base Cap"; the FTX Borrowing Base, the FRP Borrowing Base,
the FI Borrowing Base, the FM Properties Credit and the
Borrowing Base Cap being the "Borrowing Base Factors"). For
purposes of this Agreement, the "Borrowing Base" shall be an
amount (not, however, in excess of the Borrowing Base Cap)
calculated from time to time equal to the sum of (1) the
then effective FTX Borrowing Base, (2) an amount
attributable to FRP equal to the product of its MS Factor
(as defined below) and the sum of its aggregate outstanding
principal amount of Borrowing Base Debt plus its Loans
hereunder and (3) an amount attributable to FI equal to the
product of its MS Factor and the sum of its aggregate
outstanding principal amount of Borrowing Base Debt plus its
Corporate Group Loans; provided that the Borrowing Base
shall not include any amounts under clause (2) or (3) above
for Borrowing Base Debt or Corporate Group Loans of FRP and
FI in a principal amount above their respective Borrowing
Bases. The calculation of the Borrowing Base shall take
into account a percentage for FRP and FI, respectively (its
"MS Factor"), equal to the fully-diluted percentage of
effective third party ownership level (taking into account
third party ownership level of any intermediate entity such
as FCX) of each of FRP and FI from time to time, as affected
by the sale or issuance of equity interests or otherwise.
The recommended Borrowing Base Factors as determined by the
Agent shall be promptly communicated to the Borrowing Base
Banks together with the list of the Nonrestricted
Subsidiaries (if any) included in such calculation. The
Borrowing Base Banks shall promptly consider and approve or
disapprove the recommended Borrowing Base Factors, and upon
approval of such recommendations by the Required Borrowing
Base Banks by notice to the Agent, such approved amounts
shall constitute the effective Borrowing Base Factors. In
the event that the Agent's recommended Borrowing Base
Factors are not approved by the Required Borrowing Base
Banks, the Agent shall work with the Borrowing Base Banks to
agree upon revised Borrowing Base Factors acceptable to the
Required Borrowing Base Banks. Such determination of the
Borrowing Base Factors by the Agent and such approval or
nonapproval by the Required Borrowing Base Banks of the
effective Borrowing Base Factors shall be based on their
respective Policies. Each such determination (and each
redetermination as provided for below) of the Borrowing Base
Factors shall remain in effect until the next succeeding
calculation and approval of the Borrowing Base Factors in
the manner provided in this Article II.
SECTION 2.2. Redetermination of Borrowing Base.
It is hereby acknowledged and agreed by the Borrowers if at
any time (I) the Company does not furnish a Borrowing Base
Certificate on the required date and as required by
Section 5.1(g), (II) as provided in Section 2.3 after giving
effect to a proposed Equity Payment the Company's Available
Borrowing Base shall be below $125,000,000, (III) the
Company's direct and indirect aggregate ownership of FRP or
FI shall decrease below 50% on a fully diluted basis,
(IV) the terms of the Debt referred to in
Section 5.2(g)(i)(D) shall be modified or any refinancing of
such Debt shall have terms differing from those of the Debt
refinanced, in any such case in any respect which the
Required Borrowing Base Banks determine is materially
adverse to the interests of the Borrowing Base Banks,
(V) the fully diluted percentage of ownership of the Company
in FCX shall decrease by three percentage points from that
reflected in the most recent Borrowing Base Certificate as a
result of issuance of common stock of FCX in exchange for or
discharge of the Debt referred to in Section 5.2(g)(i)(D) or
(VI) the Required Borrowing Base Banks provide written
notice to the Agent prior to September 1 of any year that,
in their reasonable opinion, circumstances have arisen since
the most recent calculation of the Borrowing Base Factors
that would cause a material decrease in the amount of any of
such items if they were to be recalculated on the date of
such notice, then in any such case the Required Borrowing
Base Banks shall have the right to redetermine the Borrowing
Base Factors to be effective for the remainder of the period
originally to have been covered by the Borrowing Base
Certificate then in effect, at whatever amount they deem
appropriate in their best judgment, based on all information
reasonably available to them at such time. Not more than
twice in any calendar year the Company may request by
written notice to the Agent a redetermination of the
Borrowing Base Factors in accordance with the procedures
provided in Section 2.1.
SECTION 2.3. Redetermination Based on Equity
Payments. If the Company shall determine to make an Equity
Payment, and if after giving effect to such proposed Equity
Payment the Company's Available Borrowing Base would then be
less than $125,000,000, then (i) the Company shall provide
written notice to the Agent 15 days (or as soon as
practicable) prior to the date of the proposed Equity
Payment, together with a calculation of the Company's
Available Borrowing Base after giving effect to such
proposed Equity Payment, and (ii) the Required Borrowing
Base Banks may redetermine the Borrowing Base Factors taking
into account such proposed Equity Payment; provided,
however, that nothing shall preclude the Company from making
such Equity Payment if otherwise permitted by
Section 5.2(q).
SECTION 2.4. Grace Period for Compliance With
Section 3.2 Upon Borrowing Base Redeterminations. If the
Company is out of compliance with Section 3.2 either
(x) subsequent to an Equity Payment as a result of a
redetermination of the Borrowing Base Factors pursuant to
clause (II) of Section 2.2 by the Borrowing Base Banks (as
distinct from any other cause, including additional
incurrences of Debt by the Company or otherwise) or (y) as a
result of a redetermination of the Borrowing Base Factors
pursuant to Section 2.1 or clause (III), (IV), (V) or (VI)
of Section 2.2, then so long as no other Default or Event of
Default shall have occurred and be continuing, the Company
shall have 90 days from the date of such redetermination
(90 days from the later of the date of such redetermination
and the date of such Equity Payment, in the case of a
redetermination pursuant to clause (II) of Section 2.2) in
which to come into compliance with Section 3.2, and during
such 90-day period may continue or convert (without any
increase in principal amount) existing Loans pursuant to
Section 3.11, but not for periods extending beyond such
90-day period until the Borrowers are in compliance. No
such 90-day grace period shall be applicable to any
redetermination of the Borrowing Base Factors pursuant to
clause (I) of Section 2.2 or to any reduction of the
Borrowing Base pursuant to Section 2.5.
SECTION 2.5. Reduction of Borrowing Base from
Sales of Assets. Upon receipt by the Company, a Restricted
Subsidiary or IMC-Agrico of Net Proceeds (other than with
respect to the ALatief-FI Transfer, the IMC-Agrico Transfer,
the Power Facilities Transfer, permitted sales of accounts
receivable, sale and leaseback transactions and permitted
transfers of assets from the Company to a Restricted
Subsidiary or from a Restricted Subsidiary to the Company or
another Restricted Subsidiary), the Borrowing Base shall be
immediately and automatically reduced for the period
remaining until the next succeeding redetermination of the
Borrowing Base Factors pursuant to Section 2.1 or 2.2 by the
amounts indicated below on the basis of the then cumulative
Net Proceeds (other than with respect to the ALatief-FI
Transfer, the IMC-Agrico Transfer, permitted sales of
accounts receivable, sale and leaseback transactions and
permitted transfers of assets from the Company to a
Restricted Subsidiary or from a Restricted Subsidiary to the
Company or another Restricted Subsidiary) received since the
last annual redetermination of Borrowing Base Factors as
follows:
(i) until such cumulative Net Proceeds exceed
$175,000,000, by the greater of (x) 50% of such Net
Proceeds and (y) the Net Asset Value of the assets
sold;
(ii) when such cumulative Net Proceeds exceed
$175,000,000 but not $350,000,000, by the greater of
(x) 75% of such Net Proceeds in excess of $175,000,000
and (y) the Net Asset Value of the assets sold; and
(iii) after such cumulative Net Proceeds exceed
$350,000,000, by 100% of such Net Proceeds in excess of
$350,000,000.
SECTION 2.6. Nonreviewability of Borrowing Base
Redetermination. It is hereby acknowledged and agreed by
the Borrowers that each such determination and
redetermination of the Borrowing Base Factors by the Agent
and/or Required Borrowing Base Banks shall be made in their
sole and absolute discretion and shall be final, binding on
and nonreviewable by the Borrowers and none of the Agent or
any Borrowing Base Bank shall be required to disclose to any
Borrower its Policies.
ARTICLE III
The Loans
SECTION 3.1. (Intentionally Left Blank.)
SECTION 3.2. Revolving Credit Facility. Upon the
terms and subject to the conditions and relying upon the
representations and warranties herein set forth, each Bank,
severally and not jointly, agrees to make Loans to the
Borrowers, at any time and from time to time during the
Commitment Period, in an aggregate principal amount at any
one time outstanding not to exceed such Bank's Applicable
Percentage of the Unused Net Commitment Amount on the
Borrowing Date for such Loan. Within the foregoing limits,
the Borrowers may borrow, repay and reborrow, prior to the
Maturity Date, all or any portion of the Commitments
hereunder, subject to the terms, provisions and limitations
set forth herein; provided, however, that no borrowing shall
be made hereunder if (i) after giving effect thereto the
principal amount outstanding of the Corporate Group Loans of
any Bank (including those made in such Bank's capacity as an
FI Lender) would exceed the Commitment of such Bank or
(ii) except for continuations or conversions of existing
Loans during any applicable 90-day period referred to in
Section 2.4 without increase in the principal amount of such
Loans, the aggregate principal amount of all the Corporate
Group Loans would exceed the lesser of (x) the then current
Available Borrowing Base or (y) the then current Total
Commitment.
SECTION 3.3. Loans. (a) The Loans made by the
Banks to any Borrower on any one date shall be in a minimum
aggregate principal amount of $5,000,000 and an integral
multiple of $1,000,000. The first Loan by each Bank to each
Borrower made after the Restatement Closing Date shall be
made against delivery to such Bank of an appropriate
Promissory Note, payable to the order of such Bank in the
amount of its Commitment, executed by such Borrower, as
referred to in Section 3.5.
(b) Each Loan shall be either a Reference Rate
Loan, a CD Rate Loan or a LIBO Rate Loan as the Company may
request pursuant to Section 3.4. Subject to the provisions
of Sections 3.4 and 3.11, Loans of more than one type may be
outstanding at the same time.
(c) Each Bank shall make its portion, as
determined under Section 3.15, of each Loan hereunder on the
proposed date thereof by paying the amount required to the
Agent in New York, New York in immediately available funds
not later than 2:00 p.m., New York City time, and the Agent
shall by 3:00 p.m., New York City time, credit the amounts
so received to the general deposit account of the
appropriate Borrower with the Agent or, if Loans shall not
be made on such date because any condition precedent to a
borrowing herein specified is not met, return the amounts so
received to the respective Banks. Unless the Agent shall
have received notice from a Bank prior to the date of any
Loan that such Bank will not make available to the Agent
such Bank's portion of such Loan, the Agent may assume that
such Bank has made such portion available to the Agent on
the date of such Loan in accordance with this paragraph (c)
and the Agent may, in reliance upon such assumption, make
available to the applicable Borrower on such date a
corresponding amount. If and to the extent that such Bank
shall not have made such portion available to the Agent,
such Bank and the applicable Borrower severally agree to
repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the
date such amount is made available to the applicable
Borrower until the date such amount is repaid to the Agent
at the interest rate applicable at the time to such Loan.
If such Bank shall repay to the Agent such corresponding
amount, such amount shall constitute such Bank's Loan for
purposes of this Agreement.
SECTION 3.4. Notice of Loans. (a) A Borrower
requesting a Loan shall give the Agent irrevocable
telephonic (promptly confirmed in writing), written,
telecopy or telex notice in the form of Exhibit B with
respect to each Loan (i) in the case of a LIBO Rate Loan,
not later than 10:30 a.m., New York City time, three
Business Days before a proposed borrowing, (ii) in the case
of a CD Rate Loan, not later than 10:30 a.m., New York City
time, one Business Day before a proposed borrowing, and
(iii) in the case of a Reference Rate Loan, not later than
10:30 a.m., New York City time, on the date of a proposed
borrowing. Such notice shall be irrevocable (except that in
the case of a LIBO Rate Loan, such Borrower may, subject to
Section 3.14, revoke such notice by giving written or telex
notice thereof to the Agent not later than 10:30 a.m., New
York City time, two Business Days before such proposed
borrowing) and shall in each case refer to this Agreement
and specify (1) 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, CD 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 CD Rate Loan or LIBO Rate Loan, the Interest Period or
Interest Periods with respect thereto. If no election as to
the type of Loan is specified in any such notice by such
Borrower, such Loan shall be a Reference Rate Loan. If no
Interest Period with respect to any CD Rate Loan or LIBO
Rate Loan is specified in any such notice by a Borrower,
then (x) in the case of a CD Rate Loan, the applicable
Borrower shall be deemed to have selected an Interest Period
of 30 days' duration and (y) in the case of a LIBO Rate
Loan, such Borrower shall be deemed to have selected an
Interest Period of one month's duration. The Agent shall
promptly advise the other Banks of any notice given by a
Borrower pursuant to this Section 3.4(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 with a Loan of the same or a different
type in accordance with Section 3.11 and subject to the
limitations set forth therein.
(c) Notwithstanding any provision to the contrary
in this Agreement, no Borrower shall in any notice of
borrowing under this Section 3.4 request any CD Rate Loan or
LIBO Rate Loan which, if made, would result in more than 20
separate CD Rate Loans and LIBO Rate Loans of any Bank and
CD Rate Loans and LIBO Rate Loans (each as defined in the FI
Credit Agreement) of any FI Lender being outstanding under
the Corporate Group Facility at any one time. For purposes
of the foregoing, Loans having different Interest Periods,
regardless of whether they commence on the same date, shall
be considered separate Loans.
SECTION 3.5. Promissory Notes. (a) The Loans
made by each Bank to each Borrower shall be evidenced by a
Promissory Note duly executed on behalf of such Borrower,
dated the original Execution Date, in substantially the form
attached hereto as Exhibit C, payable to such Bank in a
principal amount equal to its Commitment on such date. The
outstanding principal balance of each Loan, as evidenced by
such Promissory Note, shall be payable on the Maturity Date.
Each Note shall bear interest from its date on the
outstanding principal balance thereof, as provided in
Section 3.6.
(b) Each Bank, or the Agent on its behalf, shall,
and is hereby authorized by 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 or
the Agent to make such a notation or any error in such a
notation shall not affect the obligation of such Borrower
under such Promissory Note.
SECTION 3.6. Interest on Loans. (a) Subject to
the provisions of Section 3.9, each Reference Rate Loan
shall bear interest at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be), equal to the
Applicable Reference Rate. Interest on each Reference Rate
Loan shall be payable on the applicable Interest payment
Date.
(b) Subject to the provisions of Section 3.9,
each CD Rate Loan shall bear interest at a rate per annum
(computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the Applicable CD Rate for
the Interest Period in effect for such Loan. Interest on
each CD Rate Loan shall be payable on each applicable
Interest Payment Date. The Applicable CD Rate shall be
determined by the Agent, and such determination shall be
conclusive absent manifest error. The Agent shall promptly
advise the Company and each Bank of such determination.
(c) Subject to the provisions of Section 3.9,
each Loan which is a LIBO Rate Loan shall bear interest at a
rate per annum (computed on the basis of the actual number
of days elapsed over a year of 360 days) equal to the
Applicable LIBO Rate for the Interest Period in effect for
such Loan. Interest on each such LIBO Rate Loan shall be
payable on each applicable Interest Payment Date. The
Applicable LIBO Rate shall be determined by the Agent, and
such determination shall be conclusive absent manifest
error. The Agent shall promptly advise the Company and each
Bank of such determination.
(d) If the Applicable Margins for Loans change
pursuant to Schedule II-1 or II-2 as a result of a change in
the Cash Flow Ratio, such change shall become effective on
the first day of the third month after the last day of the
fiscal quarter with respect to which such Cash Flow Ratio
was calculated and shall continue in effect until the first
day of the third month after the last day of the next
succeeding fiscal quarter for which a change in the Cash
Flow Ratio would require a different Applicable Margin for
Loans pursuant to Schedule II-1 or II-2.
SECTION 3.7. Fees. (a) The Company shall pay
each Bank, through the Agent, on the last Business Day of
each March, June, September and December, and on the
Maturity Date, in immediately available funds, a commitment
fee (a "Commitment Fee") from and including the Original
Execution Date through and including the Maturity Date on
(i) with respect to any quarter (or shorter period
commencing with the original Execution Date or ending on the
date immediately preceding the Restatement Closing Date)
prior to the Restatement Closing Date, the average daily
amount of such Bank's Applicable Percentage of the Unused
Net Commitment Amount (as defined in and calculated in
accordance with this Agreement as in effect prior to the
Restatement Closing Date), if any, equal to 1/4 of 1% per
annum and (ii) with respect to any quarter after the
Restatement Closing Date, the average daily amount of such
Bank's Applicable Percentage of the Unused Net Commitment
Amount during the quarter (or shorter period commencing with
the Restatement Closing Date or ending with the Maturity
Date) ending on such date equal to 0.375% per annum.
(b) The Company shall pay each Bank, through the
Agent, on the last Business Day of each March, June,
September and December and on the Restatement Closing Date,
in immediately available funds, a facility fee (a "Facility
Fee") from and including the Original Execution Date through
and including the date immediately preceding the Restatement
Closing Date on the average daily amount of such Bank's
Applicable Percentage of the Total Commitment (as defined in
and calculated in accordance with this Agreement as in
effect prior to the Restatement Closing Date) if any, equal
to 1/8 of l% per annum.
(c) All Commitment Fees and Facility Fees under
this Section 3.7 shall be computed on the basis of the
actual number of days elapsed in a year of 365 or 366 days,
as the case may be. The Commitment Fees due to each Bank
shall cease to accrue on the earlier of the Maturity Date
and the termination of the Commitment of such Bank pursuant
to Section 3.8.
(d) On the Restatement Closing Date, the Company
will also pay to each Bank a participation fee (a
"Participation Fee") as set forth on Schedule IV hereto.
(e) The Company agrees to pay to the Agent, for
its own account, on May 15th of each year, an agency fee
(the "Agency Fee") as agreed between the Company and the
Agent.
SECTION 3.8. Maturity and Reduction of
Commitments. (a) Upon at least five days' prior written or
telex notice to the Agent, the Company 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 (i) the aggregate
principal amount of all Corporate Group Loans outstanding
after such reduction or (ii) the FI Credit Agreement Total
Commitment.
(b) The Total Commitment shall be permanently
reduced on the Conversion Date to the aggregate principal
amount of the Corporate Group Loans outstanding on such date
(after giving effect to any Corporate Group Loans made on
such date). Thereafter, the Total Commitment shall be
reduced on the last Business Day of March, June, September
and December in each year (each a "Reduction Date")
commencing on September 30, 1996, by 14 consecutive
reductions, each in an amount equal to the lesser of
(i) 1/14th of the Total Commitment as in effect on the
Conversion Date after reduction as aforesaid and (ii) the
Total Commitment on such Reduction Date.
(c) On the 45th day after each Reduction Date,
the Total Commitment shall also be automatically and
permanently reduced by an amount equal to the amount by
which (x) 70% of Consolidated Cash Flow of the Company
(minus minority interests deducted in determining net
income) for such fiscal quarter exceeds (y) the sum of
(i) the required reduction pursuant to Section 3.8(b) in the
Total Commitment on the Reduction Date which was the last
day of such fiscal quarter and (ii) the sum of the scheduled
principal payments on all Debt for such quarter and the
aggregate amount of all interest paid during such fiscal
quarter by the Company and the Restricted Subsidiaries.
(d) Simultaneously with any termination or
reduction of the Total Commitment pursuant to paragraph (b)
or (c) of this Section 3.8, the Borrowers shall pay to the
Agent for the account of the Banks the Commitment Fees on
the amount of the Commitments so terminated or reduced owed
through the date of such termination or reduction.
(e) On the Maturity Date the Commitments shall
terminate and any outstanding Loans shall be due and payable
in full.
SECTION 3.9. Interest on Overdue Amounts;
Alternative Rate of Interest. (a) If any Borrower shall
default in the payment of the principal of or interest on
any Corporate Group Loan or any other amount becoming due
hereunder or under the FI Credit Agreement, 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 CD Rate Loan or LIBO Rate Loan, at a rate
2% above the rate which would otherwise be payable
under Section 3.6(b) or (c), as the case may be, until
the scheduled maturity date with respect thereto and
thereafter as provided in clause (ii) below; and
(ii) in the case of the payment of principal of or
interest on a Reference Rate Loan or any other amount
payable hereunder (other than principal of or interest
on any CD Rate Loan or LIBO Rate Loan to the extent
referred to in clause (i) above), at a rate 2% above
the Applicable Reference Rate.
(b) In the event, and on each occasion, that on
the day two Business Days prior to the commencement of any
Interest Period for a LIBO Rate Loan the Agent shall have
determined (which determination shall be conclusive and
binding upon 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 rate at which dollar
deposits are being offered will not adequately and fairly
reflect the cost to any Bank of making or maintaining the
principal amount of such LIBO Rate Loan during such Interest
Period or (iii) reasonable means do not exist for
ascertaining the Applicable LIBO Rate, the Agent shall as
soon as practicable thereafter give written or telex notice
of such determination to the Company and the other Banks,
and any request by a Borrower for the making, continuation
or conversion of a LIBO Rate Loan pursuant to Section 3.4 or
3.11 shall, until the Agent shall have advised the Company
and the Banks that the circumstances giving rise to such
notice no longer exist, be deemed to be a request for a
Reference Rate Loan; provided, however, that if the Agent
makes the determination specified in (ii) above, at the
option of 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
Agent makes the determination specified in (ii) above with
respect to three or more Banks. Each determination of the
Agent hereunder shall be conclusive absent manifest error.
(c) In the event, and on each occasion, that on
or before the day on which the Adjusted CD Rate for a CD
Rate Loan is to be determined, the Agent shall have
determined (which determination shall be conclusive and
binding upon the Borrowers absent manifest error) that
(i) the Adjusted CD Rate for such Loan cannot be ascertained
for any reason, including, without limitation, the inability
or failure of the Agent to obtain sufficient bids in
accordance with the terms of the definition of Base CD Rate,
or (ii) that the Adjusted CD Rate for such CD Rate Loan will
not adequately and fairly reflect the cost to any Bank of
making or maintaining the principal amount of such CD Rate
Loan during such Interest Period, the Agent shall, as soon
as practicable thereafter, give written or telex notice of
such determination to the Company and the other Banks, and
any request by a Borrower for the making, continuation or
conversion of a CD Rate Loan pursuant to Section 3.4 or 3.11
shall, until the Agent shall have advised the Company and
the Banks that the circumstances giving rise to such notice
no longer exist, be deemed to be a request for a Reference
Rate Loan; provided, however, that if the Agent makes the
determination specified in (ii) above, at the option of 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 Agent makes the
determination specified in (ii) above with respect to three
or more Banks. Each determination by the Agent hereunder
shall be conclusive absent manifest error.
SECTION 3.10. Prepayment of Loans. (a) Each
Borrower shall have the right at any time and from time to
time to prepay any Loan, in whole or in part, subject to the
requirements of Section 3.14 but otherwise without premium
or penalty, upon prior written or telex notice to the Agent
by 10:30 a.m., New York City time, on the date of such
prepayment; provided, however, that each such partial
prepayment shall be in a minimum amount of $5,000,000 and an
integral multiple of $1,000,000.
(b) On the date of any termination or reduction
of the Commitments pursuant to Section 3.8, 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 Corporate Group Loans (after giving effect to
any other prepayment of Corporate Group Loans on such date)
outstanding will not exceed the Total Commitment immediately
following such termination or reduction. All prepayments
under this Section shall be subject to Section 3.14.
(c) Not later than 90 days after each reduction
in the amount of the Borrowing Base as a result of any
redetermination of the Borrowing Base Factors pursuant to
Article II, the Borrowers shall prepay the outstanding Loans
in such amount as may be necessary so that the aggregate
principal amount of outstanding Corporate Group Loans (after
giving effect to any other prepayment of Corporate Group
Loans on such date) does not exceed the Available Borrowing
Base after giving effect to such reduction; provided,
however, that if such reduction in the Borrowing Base is a
result of any sales, transfers, distributions, or other
dispositions of assets or properties (including, without
limitation, shares of any capital stock or other equity
interests of any Restricted Subsidiary) other than in the
ordinary course of business, such 90-day grace period will
not apply with respect to the required mandatory prepayment.
During any such applicable 90-day period, continuations or
conversions of Loans in accordance with Section 3.11 are
permitted; provided that the Interest Periods for such
continued or converted borrowings do not extend beyond such
90-day period unless the condition requiring prepayments
pursuant to this Section 3.10(c) shall no longer exist. Any
prepayment of any CD Rate Loan or LIBO Rate Loan pursuant to
this Section 3.10(c) shall be subject to Section 3.14.
(d) Each notice of prepayment delivered pursuant
to paragraph (a) above shall specify the prepayment date and
the principal amount of each Loan (or portion thereof) to be
prepaid, shall be irrevocable and shall commit 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 other
Loans and shall be accompanied by accrued interest on the
principal amount being prepaid to the date of prepayment.
Any amounts prepaid may be reborrowed to the extent
permitted by the terms of this Agreement.
SECTION 3.11. Continuation and Conversion of
Loans. Each Borrower shall have the right, subject to the
provisions of Section 3.9, (i) on three Business Days' prior
irrevocable notice by the Company to the Agent, to continue
or convert any type of Loans with LIBO Rate Loans, (ii) on
one Business Day's prior irrevocable notice by the Company
to the Agent, to continue or convert any type of Loans with
CD Rate Loans or (iii) with irrevocable notice by the
Company to the Agent by 10:30 a.m. on the date of such
proposed continuation or conversion, to continue or convert
any type of Loans with Reference Rate Loans, in each case
subject to the following further conditions:
(a) each continuation or conversion shall be made
pro rata as to each type of Loan of 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 Agent by the Company shall
specify the aggregate amount of Loans to be continued
or converted;
(b) in the case of a continuation or conversion of
less than all Loans of 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
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 30 days may not be continued or
converted with a CD Rate Loan and any portion of a Loan
maturing or required to be prepaid in less than one
month may not be continued or converted with a LIBO
Rate Loan;
(f) a CD Rate Loan or a LIBO Rate Loan may be
continued or converted on the last day of the
applicable Interest Period and, subject to
Section 3.14, on any other day;
(g) no Loan (or portion thereof) may be continued
or converted into a CD Rate Loan or LIBO Rate Loan if,
after such continuation or conversion, an aggregate of
more than 20 separate CD Rate Loans and LIBO Rate Loans
of any Bank and CD Rate Loans and LIBO Rate Loans (each
as defined in the FI Credit Agreement) of any FI Lender
would be outstanding under the Corporate Group Facility
determined as set forth in Section 3.4(c);
(h) no Loan shall be continued or converted if
such Loan by any Bank would be greater than the amount
by which its Commitment exceeds the amount of its other
Loans at the time outstanding or if such Loan would not
comply with the other provisions of this Agreement,
including clause (ii) of the proviso to Section 3.2;
and
(i) any portion of a LIBO Rate Loan or CD Rate
Loan which cannot be converted into or continued as a
LIBO Loan or CD Rate Loan by reason of (e) and (g)
above shall be automatically converted at the end of
the Interest Period in effect for such Loan into a
Reference Rate Loan.
The Agent shall communicate the information contained in
each irrevocable notice delivered by the applicable Borrower
pursuant to this Section 3.11 to the other Banks promptly
after its receipt of the same.
The Interest Period applicable to any CD Rate Loan
or LIBO Rate Loan resulting from a continuation or
conversion shall be specified by the applicable Borrower in
the irrevocable notice of continuation or conversion
delivered pursuant to this Section; provided, however, that
if no such Interest Period shall be specified, the
applicable Borrower shall be deemed to have selected an
Interest Period in the case of a CD Rate Loan of 30 days'
duration, and in the case of a LIBO Rate Loan of one month's
duration.
For purposes of this Section 3.11, notice received
by the Agent from the Company after 10:30 a.m., New York
time, in the case of a request for a LIBO Rate Loan or a CD
Rate Loan, or 2:00 p.m., New York time, in the case of a
request for a Reference Rate Loan, on a Business Day shall
be deemed to be received on the immediately succeeding
Business Day.
SECTION 3.12. Reserve Requirements; Change in
Circumstances. (a) 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 Company directly for all
amounts claimed pursuant to this Section 3.12(a).
(b) Notwithstanding any other provision herein,
if after the Restatement Closing Date any change in
condition or applicable law or regulation or in the
interpretation or administration thereof (whether or not
having the force of law and including, without limitation,
Regulation D of the Board) by any authority charged with the
administration or interpretation thereof shall occur which
shall:
(i) subject any Bank (which shall for the purpose
of this Section include any assignee or lending office
of any Bank) to any tax with respect to any amount paid
or to be paid by any Bank with respect to its LIBO Rate
Loans or CD Rate Loans (other than any franchise tax or
tax or other similar governmental charges, fees or
assessments based on the overall net income of such
Bank by the U.S. Federal government or by any
jurisdiction in which such Bank maintains an office,
unless the presence of such office is solely
attributable to the enforcement of any rights hereunder
or under any FI Security Document with respect to an
Event of Default);
(ii) change the basis of taxation of payments to
any Bank of principal of or interest on its LIBO Rate
Loans or CD Rate Loans or other fees and amounts
payable hereunder, or any combination of the foregoing
(other than any franchise tax or tax or other similar
governmental charges, fees or assessments based on the
overall net income of any Bank by the U.S. Federal
government or by any jurisdiction in which such Bank
maintains an office unless the presence of such office
is solely attributable to the enforcement of any rights
hereunder or under any FI Security Document with
respect to an Event of Default);
(iii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets
of, deposits with, for the account of or credit
extended by any Bank (except any such reserve
requirement which is reflected in the Adjusted CD
Rate);
(iv) impose on any such Bank or the London
Interbank Market any other condition affecting this
Agreement or LIBO Rate Loans or CD Rate Loans made by
such Bank; or
(v) impose upon any Bank any other condition with
respect to any amount paid or to be paid by any Bank
with respect to its LIBO Rate Loans or CD Rate Loans or
this Agreement;
and the result of any of the foregoing shall be to increase
the cost to any Bank of making or maintaining its LIBO Rate
Loans or CD Rate Loans or Commitment hereunder, or to reduce
the amount of any sum (whether of principal, interest or
otherwise) received or receivable by such Bank or to require
such Bank to make any payment, in respect of any such Loan,
in each case by or in an amount which such Bank in its sole
judgment shall deem material, then the Borrower to which
such Loan was made shall pay to such Bank such an amount or
amounts as will compensate the Bank for such additional
cost, reduction or payment.
(c) If any Bank shall have determined that the
applicability of any law, rule, regulation, agreement or
guideline adopted after the Restatement Closing Date
pursuant to or arising out of the July 1988 report of the
Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital
Measurement and Capital Standards", or the adoption after
the Restatement Closing Date of any other law, rule,
regulation or guideline regarding capital adequacy, or any
change in any of the foregoing enacted after the Restatement
Closing Date or in the interpretation or administration of
any of the foregoing by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any
lending office of such Bank) or any Bank's holding company
with any request or directive enacted after the Restatement
Closing Date regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of
reducing the rate of return on such Bank's capital or on the
capital of such Bank's holding company, if any, as a
consequence of its obligations hereunder to a level below
that which such Bank or such Bank's holding company could
have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies and the
policies of such Bank's holding company with respect to
capital adequacy) by an amount deemed by such Bank to be
material, then from time to time 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 3.18 (it being understood that a
Bank may be reimbursed for any specific amount under only
one such paragraph or Section) the Company may, upon at
least three Business Days' prior irrevocable written or
telex notice to each of such Bank and the Agent, in whole
permanently replace the Commitment of such Bank; provided
that such notice must be given not later than the 30th day
following the date of a demand for compensation made by such
Bank; and provided that the Company shall replace such
Commitment with the Commitment of a commercial bank
satisfactory to the Agent. Such notice from the Company
shall specify an effective date for the termination of such
Bank's Commitment which date shall not be later than the
tenth day after the date such notice is given. On the
effective date of any termination of such Bank's Commitment
pursuant to this clause (d), the Company shall pay to the
Agent for the account of such Bank (A) any Commitment Fees
on the amount of such Bank's Commitment so terminated
accrued to the date of such termination, (B) the principal
amount of any outstanding Loans held by such Bank plus
accrued interest on such principal amount to the date of
such termination and (C) the amount or amounts requested by
such Bank pursuant to clause (a), (b) or (c) above or
Section 3.18, as applicable. 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 CD Rate Loan or any part
thereof or the accrual of any interest on any such Loan in
accordance with the provisions of this clause (d) as set
forth in Section 3.14. Upon the effective date of
termination of any Bank's Commitment pursuant to this
clause (d) such Bank shall cease to be a "Bank" hereunder;
provided that no such termination of any such Bank's
Commitment shall affect (i) any liability or obligation of
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 each Bank setting forth such
amount or amounts as shall be necessary to compensate such
Bank as specified in paragraph (a), (b) or (c) above, as the
case may be, shall be delivered as soon as practicable to
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.
(f) Failure on the part of any Bank to demand
compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital
within the 90 days required pursuant to clause (e) above
shall not constitute a waiver of such Bank's rights to
demand compensation for any increased costs or reduction in
amounts received or receivable or reduction in return on
capital for any period after the date that is 90 days prior
to the date of the delivery of demand for compensation. The
protection of this Section shall be available to each Bank
regardless of any possible contention of invalidity or
inapplicability of the law, regulation or condition which
shall have occurred or been imposed. No Borrower shall be
required to make any additional payment to any Bank pursuant
to Section 3.12 (a) or (b) in respect of any such cost,
reduction or payment that could be avoided by such Bank in
the exercise of reasonable diligence, including a change in
the lending office of such Bank if possible without material
cost to such Bank. Each Bank agrees that it will promptly
notify the Company and the Agent of any event of which the
responsible account officer shall have knowledge which would
entitle such Bank to any additional payment pursuant to this
Section 3.12. The Company agrees to furnish promptly to the
Agent official receipts evidencing any withholding or
deduction of any tax.
SECTION 3.13. Change in Legality. (a) Notwith-
standing anything to the contrary herein contained, if any
change in any law or regulation or in the interpretation
thereof by any governmental authority charged with the
administration or interpretation thereof shall make it
unlawful for any Bank to make or maintain any LIBO Rate Loan
or to give effect to its obligations as contemplated hereby,
then, by written notice to the Borrowers and to the Agent,
such Bank may:
(i) declare that LIBO Rate Loans will not
thereafter 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 effective date of such notice as provided in
paragraph (b) below, (B) all payments and prepayments
of principal which would otherwise have been applied to
repay the converted LIBO Rate Loans shall instead be
applied to repay the Reference Rate Loans resulting
from the conversion of such LIBO Rate Loans and (C) the
Reference Rate Loans resulting from the conversion of
such LIBO Rate Loans shall be prepayable only at the
times the converted LIBO Rate Loans would have been
prepayable, notwithstanding the provisions of
Section 3.10.
(b) For purposes of Section 3.13(a), a notice to
the Borrowers by any Bank shall be effective on the date of
receipt by the Company.
SECTION 3.14. Indemnity. Each Borrower shall
indemnify each Bank against any loss or expense which such
Bank may sustain or incur as a consequence of any failure by
such Borrower to fulfill on any Borrowing Date the
applicable conditions set forth in Article VI, any failure
by such Borrower to borrow hereunder or to convert or
continue any Loan hereunder after irrevocable notice of
borrowing, continuation or conversion pursuant to
Section 3.4 or 3.11 has been given, any payment, prepayment
or conversion of a CD Rate Loan or LIBO Rate Loan to such
Borrower required by any other provision of this Agreement
or otherwise made on a date other than the last day of the
applicable Interest Period (whether by reason of voluntary
prepayment, mandatory prepayment or otherwise), any default
in payment or prepayment of the principal amount of any CD
Rate Loan or LIBO Rate Loan to such Borrower or any part
thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, by irrevocable notice of
prepayment or otherwise, including the occurrence of any
Event of Default), including, but not limited to, any loss
or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits
from third parties acquired to effect or maintain such Loan
or any part thereof as a CD Rate Loan or LIBO Rate Loan.
Such loss or reasonable expense shall include, without
limitation, an amount equal to the excess, if any, as
reasonably determined by each affected Bank of (i) its cost
of obtaining the funds for the Loan being paid, prepaid or
converted or not borrowed, continued or converted (based on
the Absolute Rate, Adjusted CD Rate or the LIBO Rate
applicable thereto) for the period from the date of such
payment, prepayment or conversion or failure to borrow,
continue or convert to the last day of the Interest Period
for such Loan (or, in the case of a failure to borrow,
continue or convert, the Interest Period for such Loan which
would have commenced on the date of such failure to borrow,
continue or convert) over (ii) the amount of interest (as
reasonably determined by such Bank) that would be realized
by such Bank in reemploying the funds so paid, prepaid or
converted or not borrowed, continued or converted by making
a Loan of the same type in such principal amount and with a
maturity comparable to such period. A certificate of any
Bank setting forth any amount or amounts which such Bank is
entitled to receive pursuant to this Section shall be
delivered to the Company and shall be conclusive absent
manifest error.
SECTION 3.15. Pro Rata Treatment. Except as
permitted under any of Sections 3.9(b) or (c), 3.12, 3.13,
3.14, 3.18, 3.19 or 10.17, each borrowing under each type of
Loan, each payment or prepayment of principal of the
Promissory Notes, each payment of interest on the Promissory
Notes, each other reduction of the principal or interest
outstanding under the Promissory Notes, however achieved,
including by setoff by any person, each payment of the
Commitment Fees or Facility Fees, each reduction of the
Commitments and each continuation or conversion of Loans
shall be made pro rata among the Banks in the proportions
that their respective Commitments bear to the Total
Commitment. Each Bank agrees that in computing such Bank's
portion of any borrowing to be made hereunder, the Agent
may, in its discretion, round each Bank's percentage of such
borrowing to the next higher or lower whole dollar amount.
SECTION 3.16. Sharing of Setoffs. Each Bank
agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim against any Borrower
or against the Company as guarantor of the FRP Obligations
under Article IX, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such
secured claim, received by such Bank under any applicable
bankruptcy, insolvency or other similar law (including any
Indonesian law) or otherwise, obtain payment (voluntary or
involuntary) in respect of any Promissory Note of any
Borrower held by it as a result of which the unpaid
principal portion of the Promissory Notes of such Borrower
held by it shall be proportionately less than the unpaid
principal portion of the Promissory Notes of such Borrower
held by any other Bank, it shall be deemed to have
simultaneously purchased from such other Bank at face value
a participation in the Promissory Notes of such Borrower
held by such other Bank, so that the aggregate unpaid
principal amount of the Promissory Notes of such Borrower
and participations in Promissory Notes of such Borrower held
by each Bank shall be in the same proportion to the
aggregate unpaid principal amount of all Promissory Notes of
such Borrower then outstanding as the principal amount of
the Promissory Notes of such Borrower held by it prior to
such exercise of banker's lien, setoff or counterclaim was
to the principal amount of all Promissory Notes of such
Borrower outstanding prior to such exercise of banker's
lien, setoff or counterclaim; provided, however, that if any
such purchase or purchases or adjustments shall be made
pursuant to this Section and the payment giving rise thereto
shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment
restored without interest. Each Borrower and the Company as
guarantor of the FRP Obligations expressly consents to the
foregoing arrangements and agrees that any Bank holding a
participation in a Promissory Note of any 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 or by the
Company as guarantor of the FRP Obligations to such Bank as
fully as if such Bank had made a Loan directly to such
Borrower in the amount of such participation.
SECTION 3.17. Payments. (a) Except as otherwise
provided in this Agreement, all payments and prepayments to
be made by either Borrower or the Company as guarantor of
the FRP Obligations to the Banks hereunder, whether on
account of Commitment Fees, Facility Fees, payment of
principal or interest on the Promissory Notes or other
amounts at any time owing hereunder, shall be made to the
Agent at its Domestic Office for the account of the several
Banks in immediately available funds. All such payments
shall be made to the Agent as aforesaid not later than
10:30 a.m., New York City time, on the date due; and funds
received after that hour shall be deemed to have been
received by the Agent on the following Business Day.
(b) As promptly as possible, but no later than
2:00 p.m., New York City time, on the date of each
borrowing, each Bank participating in the Loans made on such
date shall pay to the Agent such Bank's Applicable
Percentage of such Loan plus, if such payment is received by
the Agent after 2:00 p.m., New York City time, on the date
of such borrowing, interest at a rate per annum equal to the
rate in effect on such day, quoted by the Agent at its
Domestic Office, for the overnight "sale" to such Bank of
Federal funds. At the time of, and by virtue of, such
payment, such Bank shall be deemed to have made its Loan in
the amount of such payment. The Agent agrees to pay any
moneys, including such interest, so paid to it by the
lending Banks promptly, but no later than 3:00 p.m., New
York City time, on the date of such borrowing, to 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 the provisions of Section 3.5 shall apply) such
due date shall be extended to the next succeeding Business
Day, and interest shall be payable on principal in respect
of such extension.
(d) Unless the Agent shall have been notified by
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 Agent may assume that the
Borrowers have made such payment or prepayment when due and
the Agent may in reliance upon such assumption (but shall
not be required to) make available to each Bank on such date
an amount equal to the portion of such assumed payment or
prepayment such Bank is entitled to hereunder, and, if the
Borrowers have not in fact made such payment or prepayment
to the Agent, such Bank shall, on demand, repay to the Agent
the amount made available to such Bank, together with
interest thereon in respect of each day during the period
commencing on the date such amount was made available to
such Bank and ending on (but excluding) the date such Bank
repays such amount to the Agent, at a rate per annum equal
to the rate, in effect on such day, quoted by the Agent at
its Domestic Office for the overnight "sale" to the other
Banks of Federal funds.
(e) All payments of the principal of or interest
on the Loans or any other amounts to be paid to any Bank or
the 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 3.18. U.S. Taxes. (a) Except as
required by law, any and all payments by any Borrower
hereunder shall be made, in accordance with Section 3.17,
free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto imposed by the United States or any political
subdivision thereof, excluding taxes imposed on the net
income of the Agent or any Bank (or any Transferee) and
franchise taxes imposed on the Agent or any Bank (or
Transferee) (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If as a result of a
Change in Tax Law any Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable
hereunder to the Banks (or any Transferee) or the Agent,
(i) the sum payable shall be increased by the amount
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 3.18) such Bank (or Transferee) or the
Agent (as the case may be) shall receive an amount equal to
the sum it would have received had no such deductions been
made, (ii) 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 3.18 than
such Bank would have been entitled to receive with respect
to the rights assigned, participated or otherwise
transferred unless such assignment, participation or
transfer shall have been made at a time when the
circumstances giving rise to such greater payment did not
exist.
"Change in Tax Law" means as to each Bank (or
Transferee) the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law
(or in the application or official interpretation of any
law), including an amendment, modification or revocation of
an applicable tax treaty or a change in official position
regarding the application or interpretation thereof,
occurring after the Restatement Closing Date.
(b) Within 30 days after the date of any payment
of Taxes withheld by any Borrower in respect of any payment
to any Bank (or Transferee other than a participation
holder) or the Agent, such Borrower will furnish to the
Agent, at its address referred to on the signature page, the
original or a certified copy of a receipt evidencing payment
thereof.
(c) At the time it becomes a party to this
Agreement or a Transferee, each Bank (or Transferee) that is
organized under the laws of a jurisdiction outside the
United States shall deliver to the Company such
certificates, documents or other evidence, as required by
the Code or Treasury Regulations issued pursuant thereto,
including Internal Revenue Service Form 1001 or Form 4224
and any other certificate or statement of exemption required
by Treasury Regulation Section 1.1441-1, 1.1441-4 or
1.1441-6(c) or any subsequent version thereof or successors
thereto, properly completed and duly executed by such Bank
(or Transferee) establishing that such payment is (i) not
subject to United States Federal withholding tax under the
Code because such payment is effectively connected with the
conduct by such Bank (or Transferee) of a trade or business
in the United States or (ii) totally exempt from United
States Federal withholding tax. Unless the Borrower and the
Agent have received forms or other documents satisfactory to
them indicating that such payments hereunder or under the
Promissory Notes are not subject to United States Federal
withholding tax the Borrower or the Agent shall withhold
taxes from such payments at the applicable statutory rate.
(d) 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 (c) above.
(e) Any Bank (or Transferee) claiming any
additional amounts payable pursuant to this Section 3.18
shall give notice to the Agent and the Company within
90 days of the Change in Tax Law and use reasonable efforts
(consistent with legal and regulatory restrictions) to file
any certificate or document requested by the Company 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). The failure of any Bank (or
Transferee) to give the required 90 day notice shall excuse
each Borrower from its obligation to pay additional amounts
pursuant to this Section 3.18 incurred prior to the giving
of such notice.
(f) Without prejudice to the survival of any
other agreement contained herein, the agreements and
obligations contained in this Section 3.18 shall survive the
payment in full of the principal of and interest on all
Loans made hereunder.
SECTION 3.19. (Intentionally Left Blank)
SECTION 3.20. Company or Restricted Subsidiary as
General 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 or its Promissory Notes, the Company 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 3.20 shall be
deemed in any way to derogate from or affect the Company's
own direct obligations under this Agreement or its guarantee
of the FRP Obligations pursuant to Section 9.1.
ARTICLE IV
Representations and Warranties
SECTION 4.1. Representations and Warranties.
(i) The Company represents and warrants with respect to
itself, FCX and FI and (ii) the Company 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, FI and
FCX (i) is duly organized, validly existing and in good
standing under the laws of the State of Delaware and,
in the case of FI, the laws of the Republic of
Indonesia, (ii) has the requisite power and authority
to own its property and assets (and, in the case of FI,
has the requisite licenses to use real property not
owned) and to carry on its business as now conducted
and as proposed to be conducted, and (iii) is qualified
to do business in every jurisdiction where such
qualification is required, except where the failure so
to qualify would not have a material adverse effect on
its condition, financial or otherwise. Each Borrower,
FI and FCX has the power to execute, deliver and
perform its obligations under this Agreement and the
other Loan Documents to which it is or is to be a
party, to borrow hereunder and to execute and deliver
any Promissory Notes to be delivered by it. Each
Borrower, FI and FCX has all requisite corporate power,
and has all material governmental licenses,
authorizations, consents and approvals necessary to own
its own assets and carry on its business as now being
or as proposed to be conducted.
(b) Authorization. The execution, delivery and
performance of this Agreement (including, without
limitation, performance of the obligations set forth in
Section 5.1(h)) and the other Loan Documents to which
it is or is to be, a party and the borrowings hereunder
(i) have been duly authorized by all requisite
corporate or partnership and, if required, stockholder
or partner, action on the part of the Company, each
Borrower, FI or FCX, 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 Pledge Agreement, the Security
Agreement and the FI Security Documents.
(c) Governmental Approval. Except for those
consents, approvals and registrations listed on
Schedule 4.1(c) hereto, each of which has been obtained
and is in full force and effect, no registration with
or consent or approval of, or other action by, any
Governmental Authority is or will be required in
connection with the execution, delivery and performance
by either Borrower, FI or FCX, as appropriate, of this
Agreement or any other Loan Document to which it is, or
is to be, a party or the borrowings hereunder by 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, FI or FCX, 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, FI and FCX, as applicable, and the
Pledge Agreement, the Security Agreement and each other
Loan Document to be entered into after the Restatement
Closing Date will, upon its execution and delivery,
constitute the legal, valid and binding obligations of
such Borrowers, FI or FCX party thereto, 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. The Company has
heretofore furnished to each of the Banks consolidated
balance sheets and statements of income and changes in
retained earnings and cash flow as of and for the
fiscal years ended December 31, 1991 and 1992, all
audited and certified by Arthur Andersen & Co.,
independent public accountants, included in the
Company's Annual Report on Form 10-K for the year ended
December 31, 1992 (the "1992 Form 10-K"), and unaudited
consolidated balance sheets and statements of income
and cash flow as of and for the fiscal quarter ended
March 31, 1993 included in the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31,
1993. In addition, the Company has heretofore
furnished to each of the Banks consolidated balance
sheets and statements of income and cash flow for each
Major Subsidiary and FCX as of and for the fiscal years
ended December 31, 1991 and 1992, all audited and
certified by Arthur Andersen & Co and unaudited
consolidated balance sheets and statements of income
and cash flow for each Major Subsidiary and FCX as of
and for the fiscal quarter ended March 31, 1993. All
such balance sheets and statements of income and cash
flow present fairly the financial condition and results
of operations of the Company and the Subsidiaries or of
either Major Subsidiary or FCX, as of the dates and for
the periods indicated. Such financial statements and
the notes thereto disclose all material liabilities,
direct or contingent, of the Company and the
Subsidiaries or of either Major Subsidiary or FCX, as
of the dates thereof which are required to be shown on
financial statements prepared in accordance with GAAP.
The financial statements referred to in this
Section 4.1(e) have been prepared in accordance with
GAAP. There has been no material adverse change since
December 31, 1992, in the businesses, assets,
operations, prospects or condition, financial or
otherwise, of (i) the Company, (ii) FRP, (iii) FI,
(iv) FCX or (v) the Company and the Subsidiaries taken
as a whole.
(f) Litigation; Compliance with Laws; etc.
(i) Except as disclosed in the 1992 Form 10-K and any
subsequent reports filed as of 20 days prior to the
Restatement 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 Company, threatened against or
affecting the Company or any Subsidiary or the
businesses, assets or rights of the Company or any
Subsidiary (i) which involve this Agreement or any of
the other Loan Documents or any of the transactions
contemplated hereby or thereby or the collateral for
the Loans (including, in the case of FI, the Contract
of Work) or (ii) as to which there is a reasonable
possibility of an adverse determination and which, if
adversely determined, could, individually or in the
aggregate, materially impair the ability of the
Company, either Major Subsidiary or FCX to conduct its
business substantially as now conducted, or materially
and adversely affect the businesses, assets,
operations, prospects or condition, financial or
otherwise, of the Company, either Major Subsidiary or
FCX, or impair the validity or enforceability of, or
the ability of the Company, either Major Subsidiary or
FCX to perform its obligations under this Agreement or
any of the other Loan Documents to which such Person is
a party.
(ii) Neither the Company nor any Subsidiary is in
violation of any law, or in default with respect to any
judgment, writ, injunction, decree, rule or regulation
of any court or governmental agency or instrumentality,
where such violation or default could have a materially
adverse effect on the businesses, assets, operations or
condition, financial or otherwise, of the Company,
either Major Subsidiary or FCX. Without limitation of
the foregoing, the Company and each Subsidiary has
complied with all Governmental Rules (including, in the
case of FI, all such requirements under the Contract of
Work and under environmental Governmental Rules of
Indonesia) relating to environmental pollution or to
environmental regulation or control or to employee
health or safety where any such noncompliance could
have a materially adverse effect on the businesses,
assets, operations or condition, financial or
otherwise, of the Company, either Major Subsidiary or
FCX. Neither the Company nor any Subsidiary has
received notice of any material failure so to comply.
The Company's and the Subsidiaries' plants do not
handle any hazardous wastes, hazardous substances,
hazardous materials, toxic substances, toxic pollutants
or substances similarly denominated, as those terms or
similar terms are used in the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act,
the Clean Air Act, the Clean Water Act or any other
applicable law relating to environmental pollution or
employee health and safety (and, in the case of FI, the
equivalent substances to which the Contract of Work or
the environmental Governmental Rules of Indonesia
apply), in violation of any law or any regulations
promulgated pursuant thereto where any such violation
could have a materially adverse effect on the
businesses, assets, operations or condition, financial
or otherwise, of the Company, either Major Subsidiary
or FCX. The Company is aware of no events, conditions
or circumstances involving environmental pollution or
contamination or employee health or safety that could
reasonably be expected to result in material liability
on the part of the Company or any Subsidiary.
(g) Title, etc. The Company, each Major
Subsidiary and FCX have good and valid title to their
respective material properties, assets and revenues
(exclusive of oil, gas and other mineral properties on
which no development or production activities are being
conducted following discovery of commercially
exploitable reserves), free and clear of all Liens
except such as are permitted by Section 5.2(d) and
except for covenants, restrictions, rights, easements
and minor irregularities in title which do not
individually or in the aggregate interfere with the
occupation, use and enjoyment by the Company or the
respective Subsidiary of such properties and assets in
the normal course of business as presently conducted or
materially impair the value thereof for use in such
business and FI has the requisite licenses under the
Governmental Rules of Indonesia to use the real
property on which it conducts its business.
(h) Federal Reserve Regulations; Use of Proceeds.
(i) Neither the Company 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 for its general corporate purposes,
including the making of acquisitions.
(iv) As of each date when this representation is
made or deemed made, either the Company (i) owns
directly and beneficially Margin Stock with a current
market value (within the meaning of Regulation U) at
least equal to twice the aggregate amount of credit
secured, directly or indirectly (within the meaning of
Regulation U), by such Margin Stock on such date (after
giving effect to any Credit Event, FI Credit Event or
Borrowing (as such term is defined in the FM Credit
Agreement) or other increase in such credit occurring
on such date and to any other obligations secured by
such Margin Stock) or (ii) owns directly and
beneficially assets other than Margin Stock ("Other
Collateral") with a current market value (within the
meaning of Regulation U) at least equal to twice the
aggregate amount of credit secured, directly or
indirectly (within the meaning of Regulation U), by
such Other Collateral on such date (after giving effect
to any Credit Event, FI Credit Event or Borrowing (as
such term is defined in the FM Credit Agreement) or
other increase in such credit occurring on such date
and to any other obligations secured by such Other
Collateral). There are no Liens on such Margin Stock
or such Other Collateral, as the case may be (other
than those created by the Pledge Agreement), nor is
there any Debt or any other obligation (other than the
loans under the FM Credit Agreement, the Corporate
Group Loans, the Permitted Secured Swaps, the Pel-Tex
Debt and Permitted Swaps (as such terms are defined in
the FM Credit Agreement)) secured, directly or
indirectly (within the meaning of Regulation U), by
such Margin Stock or Other Collateral.
(i) Taxes. The Company and the Subsidiaries have
filed or caused to be filed all Federal, state and
local tax returns and all Indonesian tax returns which
are required to be filed by them, and have paid or
caused to be paid all taxes shown to be due and payable
on such returns or on any assessments received by any
of them, other than any taxes or assessments the
validity of which the Company or any Subsidiary is
contesting in good faith by appropriate proceedings,
and with respect to which the Company or such
Subsidiary shall, to the extent required by GAAP, have
set aside on its books adequate reserves.
(j) Employee Benefit Plans. The Company and each
of its ERISA Affiliates is in compliance in all
material respects with the applicable provisions of
ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred with
respect to any Plan as to which the Company or any
ERISA Affiliate was required to file a report with the
PBGC, and the present value of all vested benefit
liabilities under each Plan maintained by the Company
or an ERISA Affiliate (based on those assumptions used
to fund such Plan) did not, as of the last annual
valuation date applicable thereto, exceed by
$25,000,000 the value of the assets of such Plan.
Neither the Company nor any ERISA Affiliate has
incurred any Withdrawal Liability that materially
adversely affects the financial condition of the
Company and its ERISA Affiliates taken as a whole.
Neither the Company nor any ERISA Affiliate has
received any notification that any Multiemployer Plan
is in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and no Multiemployer Plan
is reasonably expected to be in reorganization or to be
terminated, where such reorganization has resulted or
can reasonably be expected to result in an increase in
the contributions required to be made to such Plan that
would materially and adversely affect the financial
condition of the Company and its ERISA Affiliates taken
as a whole.
(k) Investment Company Act. Neither the Company
nor any Subsidiary is an "investment company" as
defined in, or subject to regulation under, the
Investment Company Act of 1940.
(l) Public Utility Holding Company Act. Neither
the Company nor any Subsidiary is a "holding company",
or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as
amended.
(m) Subsidiaries. Schedule I constitutes a
complete and correct list, as of the Restatement
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 the Company in each. The Company owns on
such date, free and clear of all Liens, the percentage
of voting shares or partnership interests outstanding
of the Subsidiaries shown on Schedule I, and all such
shares or partnership interests are validly issued and
fully paid.
(n) (Intentionally Left Blank)
(o) (Intentionally Left Blank)
(p) No Material Misstatements. No information,
report (including any Borrowing Base Certificate and
any exhibit, schedule or other attachment thereto or
other document delivered in connection therewith),
financial statement, exhibit or schedule prepared or
furnished by either Borrower to the 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.
ARTICLE V
Covenants
SECTION 5.1. Affirmative Covenants of the
Company. So long as any Bank shall have any Loan Exposure
or any commitment to make a Loan hereunder, the Company
agrees that, unless the Required Banks shall have otherwise
consented in writing:
(a) Financial Statements, etc. The Company 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, of each
Major Subsidiary and of FCX as at the close of
such fiscal year and consolidated statements of
income and changes in retained earnings or
partners' capital and cash flow of the Company and
the Subsidiaries, of each Major Subsidiary and of
FCX for such year, with the opinion thereon of
Arthur Andersen & Co. or other independent public
accountants of national standing selected by 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, of each Borrowing
Subsidiary and of FCX as at the end of such
quarter and consolidated statements of income of
the Company and the Subsidiaries, of each
Borrowing Subsidiary and of FCX for such quarter
and for the period from the beginning of the
fiscal year to the end of such quarter, certified
by the Treasurer or other authorized financial or
accounting officer of the Company;
(3) promptly after their becoming available,
(a) copies of all financial statements, reports
and proxy statements which the Company, either
Major Subsidiary or FCX shall have sent to its
stockholders generally, (b) copies of all
registration statements (excluding registration
statements relating to employee benefit plans) and
regular and periodic reports, if any, which the
Company, either Major Subsidiary or FCX shall have
filed with the SEC, or any governmental agency
substituted therefor, and (c) if requested by any
Bank, copies of each annual report filed with any
governmental agency pursuant to ERISA with respect
to each Plan of the Company or any of the
Subsidiaries;
(4) within 95 days after the end of each
fiscal year of the Company, a certificate by the
Treasurer or other authorized Financial Officer of
the Company, to the effect that no Event of
Default or Default has occurred and is continuing,
or if any Event of Default or Default has occurred
and is continuing, describing the same in
reasonable detail;
(5) promptly upon the occurrence of any
Termination Event, Event of Default, or any
material default in the performance of any of its
agreements contained in Section 5.1 or 5.2, the
occurrence of any default under any other Loan
Document (other than the FI Credit Agreement), or
the commencement of any proceeding regarding the
Company or any Subsidiary under any Federal or
state bankruptcy law, notice thereof, describing
the same in reasonable detail;
(6) at the time of provision of the financial
statements referred to in clauses (1) and (2)
above, an update of Schedule I to correct, add or
delete any required information;
(7) all the financial statements and other
documents required to be furnished to the FI
Lenders pursuant to Section 4.1(a) of the FI
Credit Agreement and, so long as the guarantee by
FTX of FM Properties' obligations under the FM
Credit Agreement is in effect, all the financial
statements and other documents required to be
furnished to the FM Lenders pursuant to
Section 4.1(a) of the FM Credit Agreement;
provided, however, that the Company shall not be
required to furnish duplicate copies of such
financial statements or other documents to Banks
which are also FI Lenders or FM Lenders, as
applicable; and
(8) from time to time, such further
information regarding the business, affairs and
financial condition of the Company or any
Subsidiary as any Bank may reasonably request.
At the time the Company furnishes financial statements
pursuant to the foregoing clauses (1) and (2), the
Company will also furnish each Bank a certificate by
the Treasurer or other authorized Financial Officer of
the Company setting forth the calculation of: (a) the
current ratios as determined in accordance with
Section 5.2(e), (b) the fixed charge ratios as
determined in accordance with Section 5.2(f), (c) the
Cash Flow Ratio, (d) if the Facility is then an HLT,
the calculation of the ratio set forth in
Section 5.2(q) and (e) the Available Borrowing Base;
provided that the Cash Flow Ratio shall be provided
within 50 days of the end of each fiscal quarter.
(b) Taxes and Claims. The Company shall, and
shall cause each Subsidiary to, pay and discharge all
taxes, assessments and governmental charges or levies,
including Indonesian Taxes, imposed upon it or upon its
income or profits, or upon any property belonging to
it, prior to the date on which material penalties
attach thereto; provided that neither the Company 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 Company 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 Company shall, and shall cause each
Major Subsidiary and FCX to, preserve and maintain its
corporate existence and all its rights, privileges and
franchises necessary or desirable in the normal conduct
of its business; provided that nothing herein shall
prevent any transaction permitted by Section 5.2(c).
(d) Compliance with Applicable Laws. The Company
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
Company, either Major Subsidiary or FCX, except where
contested in good faith and by proper proceedings and
with respect to which the Company or such Subsidiary
shall have, to the extent required by GAAP, set aside
on its books adequate reserves.
(e) Litigation. The Company 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
Company or any Subsidiary, except those which, if
adversely determined, do not relate to the Loan
Documents and which would not have a material adverse
effect on the business, assets, operations or financial
condition of the Company, FCX or either Major
Subsidiary or their ability to comply with their
obligations under the Loan Documents.
(f) ERISA. The Company shall, and shall cause
each Subsidiary to, comply in all material respects
with the applicable provisions of ERISA and furnish to
the Agent (i) as soon as possible, and in any event
within 30 days after any Responsible Officer of the
Company or any ERISA Affiliate knows or has reason to
know that any Reportable Event with respect to any Plan
has occurred that alone or together with any other
Reportable Event with respect to the same or another
Plan could reasonably be expected to result in
liability of the Company to the PBGC in an aggregate
amount exceeding $10,000,000, a statement of a
Financial Officer of the Company setting forth details
as to such Reportable Event and the action that the
Company proposes to take with respect thereto, together
with a copy of the notice of such Reportable Event, if
any, given to the PBGC, (ii) promptly after receipt
thereof, a copy of any notice the Company or any ERISA
Affiliate may receive from the PBGC relating to the
intention of the PBGC to terminate any Plan or Plans or
to appoint a trustee to administer any such Plan,
(iii) within 10 days after a filing with the PBGC
pursuant to Section 412(n) of the Code of a notice of
failure to make a required installment or other payment
with respect to a Plan, a statement of a Financial
Officer of the Company setting forth details as to such
failure and the action that the Company proposes to
take with respect thereto, together with a copy of such
notice given to the PBGC and (iv) promptly and in any
event within 30 days after receipt thereof by the
Company or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by
the Company or any ERISA Affiliate concerning the
imposition of Withdrawal Liability by a Multiemployer
Plan.
(g) Borrowing Base Certificate. The Company
shall, on or prior to April 1 in each year commencing
with 1994, furnish to each Borrowing Base Bank a
Borrowing Base Certificate dated as of April 1 of such
year. Such Borrowing Base Certificate shall have
attached thereto (A) an independent engineer's report
satisfactory to the Agent and dated as of the January 1
next preceding such April 1, on the oil and gas
properties of the Company, FRP and FM Properties, (B) a
report satisfactory to the Agent prepared by the
Company and dated as of the January 1 next preceding
such April 1, on the remaining assets (other than
current assets and the oil and gas properties covered
by the independent engineer's report in clause (A)
above) of the Company and its Subsidiaries and (C) a
schedule setting forth the projected ownership interest
of the Company in each of the Major Subsidiaries and
FCX and the projected cash flow associated with the
assets of each of the Restricted Subsidiaries (an
update of such schedule shall also be required to be
delivered to each Borrowing Base Bank on or prior to
each Borrowing Base redetermination).
(h) Security. (i) (Intentionally Left Blank)
(ii) In the event (A) the aggregate principal
amount of outstanding Corporate Group Loans exceeds for
a period of 20 or more consecutive days the Available
Borrowing Base, (B) an Event of Default shall occur and
continue for a period of 20 or more consecutive days,
or (C) any of the FM Lenders or the Pel-Tex Lenders
shall receive or be entitled to receive and have
requested receipt of security or liens in or on any
property of the Company or any of its Subsidiaries
(other than the initial mortgages and security
interests granted by the Company pursuant to
Section 5.1(d) of the FM Credit Agreement and the
security interests granted by FI pursuant to the FI
Security Documents) as security for any amount owing
under the FM Credit Agreement or under the Pel-Tex
Agreements or the Pel-Tex Bank Agreement, (i) FRP and
each of its Wholly-Owned Restricted Subsidiaries shall,
upon one Business Day's notice of the written request
of the Required Banks therefor, (x) execute and deliver
to the Collateral Agent, for the benefit of the Banks,
the IMC-Agrico Note, the FRP Pledge Agreement and a FRP
Subsidiary Pledge Agreement, respectively, and
certificates (the "Certificates") representing the
Pledged Securities (as defined therein but other than
the IMC-Agrico Note) accompanied by stock powers duly
executed in blank and (y) execute and deliver the FRP
Security Agreement and a FRP Subsidiary Security
Agreement, respectively, and take all steps deemed by
the Collateral Agent necessary or convenient to grant
the Collateral Agent, for the benefit of the Banks and
to secure the Loans owing by FRP, a perfected first
priority security interest in the Collateral (as
defined therein), subject only to Liens then existing
of the types referred to in Section 5.2(d) and to
restrictions then in effect permitted under
Section 5.2(a), including, without limiting the
generality of the foregoing, the execution and filing
in the proper governmental offices of financing
statements and the execution and delivery of all
mortgages, assignments, deeds of trust and other
agreements and instruments as may be required (in the
judgment of the Collateral Agent) by any state,
including without limitation the State of Louisiana, to
effect such purposes, and to use its best efforts to
obtain all consents required of any Person to effect
any of the foregoing and (ii) the Company and each of
its Wholly-Owned Restricted Subsidiaries (other than
FRP, FCX and FI and any Subsidiary of any of them)
shall, upon one Business Day's notice of the written
request of the Required Banks therefor, execute and
deliver to the Collateral Agent, for the benefit of the
Banks, the FI Lenders, the FM Lenders and the Pel-Tex
Lenders, the FCX Note, the FTX Pledge Agreement, any
FTX Subsidiary Pledge Agreement, the FTX Security
Agreement and any FTX Subsidiary Security Agreement,
respectively (it being the intention of the parties
that the FTX Pledge Agreement, any FTX Subsidiary
Pledge Agreement, the FTX Security Agreement and any
FTX Subsidiary Security Agreement attached as Exhibits
to the FTX Intercreditor Agreement shall govern the
security arrangements with respect to the Company and
that the FRP Pledge Agreement, any FRP Subsidiary
Pledge Agreement, the FRP Security Agreement and any
FRP Subsidiary Security Agreement shall govern the
security arrangements with respect to FRP) on the terms
required under such agreements with any certificates
representing the Pledged Securities (as defined therein
but other than the FCX Note) accompanied by stock
powers duly executed in blank and, with respect to such
security agreement, take all steps deemed by the
Collateral Agent necessary or convenient to grant the
Collateral Agent, for the benefit of the Banks, the FM
Lenders and the Pel-Tex Lenders, a perfected first
priority security interest in the Shared Collateral (as
defined in the FTX Intercreditor Agreement), subject
only to Liens then existing of the types referred to in
Section 5.2(d) and to restrictions then in effect
permitted under Section 5.2(a), if any, to secure on an
equal and ratable basis the outstanding obligations of
the Company hereunder, under the FI Credit Agreement,
under the KfW Credit Agreement and under any Permitted
Secured Swap between the Company and a Bank and the
Company's obligations under the FM Credit Agreement,
the Pel-Tex Agreements and the Pel-Tex Bank Agreement.
Thereafter, unless an Event of Default shall have
occurred and be continuing, (I) the Company may declare
and pay dividends consisting of any Pledged Securities
in accordance with the schedule attached to the then
most recent Borrowing Base Certificate, (II) FRP or any
of its Subsidiaries may sell or otherwise dispose of
any of its assets constituting Collateral under the FRP
Pledge Agreement, any FRP Subsidiary Pledge Agreement,
the FRP Security Agreement or any FRP Subsidiary
Security Agreement, respectively, if in each case all
the proceeds therefrom are promptly paid over to the
Collateral Agent (which shall apply such proceeds in
accordance with the terms of the applicable agreement)
and the Required Banks prior to each such sale or
disposition have determined in good faith (and so
notified the Company) that such proceeds represent the
then current fair market value of such assets and
(III) the Company or any of its Subsidiaries may sell
or otherwise dispose of any of its assets constituting
Shared Collateral under the FTX Intercreditor
Agreement, granted pursuant to the FTX Pledge
Agreement, any FTX Subsidiary Pledge Agreement, the FTX
Security Agreement or any FTX Subsidiary Security
Agreement, respectively, if in each case all the
proceeds therefrom are promptly paid over to the
Collateral Agent for application in accordance with the
FTX Intercreditor Agreement and the Required Lenders
(as defined in the FTX Intercreditor Agreement) prior
to each such sale or disposition have determined in
good faith (and so notified the Company) that such
proceeds represent the then current fair market value
of such assets. If the aggregate principal amount of
outstanding Corporate Group Loans does not at any time
during any 4-month period commencing thereafter exceed
the Available Borrowing Base and there shall not then
have occurred and be continuing any Default and/or
Event of Default, the Banks shall terminate the Pledge
Agreement and the Security Agreement and return the
Certificates and the IMC-Agrico Note to FRP or any of
its Subsidiaries, as the case may be, and shall return
any stock certificates pledged by the Company or its
Subsidiaries and the FCX Note to the Company or any of
its Subsidiaries, as the case may be; provided,
however, that if the Required Banks give written or
telex notice to the Company prior to the expiration of
such period, that they wish to extend such 4-month
period, the phrase "4-month period" in this sentence
shall be deemed to read "12-month period"; provided
further, that the FTX Pledge Agreement, the FTX
Subsidiary Pledge Agreement, the FTX Security Agreement
and the FTX Subsidiary Security Agreement shall not
terminate at such time and the FCX Note shall not be
returned if the FM Credit Agreement, the Pel-Tex
Agreements or the Pel-Tex Bank Agreement still require
continued collateral from the Company in which case
such security interests will terminate and the FCX Note
shall be returned at such time that the FM Credit
Agreement, the Pel-Tex Agreements and the Pel-Tex Bank
Agreement no longer require continued collateral from
the Company and no new event has occurred requiring the
granting of collateral pursuant to this
Section 5.1(h)(ii).
(i) Insurance. The Company 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 Company
and each Subsidiary shall maintain financial records in
accordance with GAAP, and, at all reasonable times and
as often as any Bank may reasonably request, permit
representatives of any Bank to have access to its
financial records and its premises and to the records
and premises of any of its subsidiaries, if any, and to
make such excerpts from such records as such
representatives deem necessary and to discuss its
affairs, finances and accounts with its officers and
its independent certified public accountants or other
parties preparing consolidated or consolidating
statements for it or on its behalf.
(k) (Intentionally Left Blank)
(l) (Intentionally Left Blank)
(m) (Intentionally Left Blank)
(n) 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 and
any Indonesian equivalents), which may be required
under applicable law, or which the Required Banks or
the Agent may reasonably request, in order to
effectuate the transactions contemplated by this
Agreement and the FI Security Documents and in order to
grant, preserve, protect and perfect the validity and
first priority of the security interests created by the
FI Security Documents and, if and when executed, the
Security Agreement and the Pledge Agreement.
(o) Covenants Regarding FRP. The Company shall
cause FRP to perform the covenants relating to it set
forth in Section 5.3.
SECTION 5.2. Negative Covenants of the Company.
So long as any Bank shall have any Loan Exposure or any
commitment to make a Loan hereunder, the Company agrees
that, without the prior written consent of the Required
Banks:
(a) Conflicting Agreements. The Company shall
not and shall cause its Restricted Subsidiaries not to
enter into any agreement (other than this Agreement,
the FI Credit Agreement and the KfW Credit Agreement)
containing any provision which would be violated or
breached by the performance of their obligations under
any Loan Document or under any instrument or document
delivered or to be delivered by them hereunder or
thereunder or in connection herewith or therewith,
including any agreement with any persons which would
prohibit or restrict (i) in the case of the Restricted
Subsidiaries, the payments of dividends or other
distributions (other than restrictions existing on the
Restatement Closing Date) or (ii) the ability of such
entities to create Liens on any of their assets (other
than assets which are subject to Liens permitted
pursuant to paragraphs (ii), (iii), (iv), (vi), (vii)
and (viii) of Section 5.2(d) and extensions and
renewals and replacements thereof permitted pursuant to
Section 5.2(d)(xii)).
(b) Borrowing Base Limits. Except to the extent
expressly permitted by Section 2.4 or 3.10(c), the
Company shall not at any time permit the sum of the
Corporate Group Loan Exposure and all Borrowing Base
Debt to exceed the then effective Borrowing Base.
(c) Consolidation or Merger; Disposition of
Assets and Capital Stock. The Company shall not, and
shall not permit any Restricted Subsidiary to, merge
into or consolidate with any corporation, or sell,
lease, transfer or otherwise dispose of all or any
substantial part of the assets of the Company or of any
Restricted Subsidiary, including, without limitation,
the rights of FI under the Contract of Work (except for
(u) the IMC-Agrico Transfer and investments permitted
by Section 5.2(r), (v) the ALatief-FI Transfer and
investments permitted by Section 5.2(s), the Power
Facilities Transfer and the transfer in respect of
Contract Area Block B referred to in Section 8.1(i),
(w) dispositions of accounts receivable, Permitted
Investments and inventory in the ordinary course of
business, provided that the proceeds of any sale of
accounts receivable by FI are deposited in the Sales
Proceeds Account (as defined in the FI Trust Agreement)
(x) dispositions of obsolete or worn-out property, or
real estate not used or useful in its business,
(y) subject to the last sentence of Section 5.2(j) and
to Sections 5.2(o) and (p), dispositions of assets by
the Company or a Restricted Subsidiary to another
Restricted Subsidiary or the Company and subject to
Section 5.2(l), dispositions of assets by a Restricted
Subsidiary to a Nonrestricted Subsidiary; provided,
however, that any Person through which FRP owns any
interest in IMC-Agrico shall at all times be a
Restricted Subsidiary, and (z) to the extent permitted
by Section 5.2(q), the payment of cash dividends by the
Company or any Restricted Subsidiary and dividends by
the Company consisting of stock or units of the
Subsidiaries), whether now owned or hereafter acquired;
except that:
(i) the Company or any Restricted Subsidiary
may merge or liquidate any corporation (other
than, in the case of a Restricted Subsidiary, the
Company, FCX or the Major Subsidiaries) into
itself;
(ii) any Restricted Subsidiary (other than FCX
and either Major Subsidiary) may be merged into
any other corporation; provided that such
corporation, immediately following such merger,
shall be deemed a Restricted Subsidiary; and
(iii) subject to the last sentence of
Section 5.2(j), the Company or any Restricted
Subsidiary may sell or otherwise dispose of any
assets or securities of any Subsidiary; provided,
however, that the gross fair market value of the
consideration or other amounts payable to or
receivable by the Company or such Restricted
Subsidiary with respect to such sales or other
dispositions is deemed to be Net Proceeds;
provided, however, that in the case of a merger
permitted by clause (i) above, immediately thereafter
and giving effect thereto, the Company or, as the case
may be, a Restricted Subsidiary would be the surviving
corporation and, in the case of a merger permitted by
clause (i) or clause (ii) above or of any disposition
of assets or securities permitted by clause (iii)
above, no Default or Event of Default would,
immediately thereafter and giving effect thereto, have
occurred and be continuing. Each sale or other
disposition permitted by clause (iii) above shall be
permitted only if the Company or the respective
Restricted Subsidiary shall receive fair consideration
therefor, as determined by the Board of Directors of
the Company or of such Restricted Subsidiary, as the
case may be. It is understood and agreed that no
transaction pursuant to a Deemed Lease shall be
considered a disposition of assets within the meaning
of this Section 5.2(c).
(d) Liens. The Company shall not, nor shall it
permit any Restricted Subsidiary to, create or suffer
to exist any Lien upon any of its respective
properties, revenues or assets, now owned or hereafter
acquired, securing any indebtedness or obligation,
except:
(i) materialmen's, suppliers', tax and other
like Liens arising in the ordinary course of the
Company's or such Restricted Subsidiary's business
securing obligations which are not overdue or are
being contested in good faith by appropriate
proceedings and as to which adequate reserves have
been set aside on its books to the extent required
by GAAP, Liens arising in connection with workers'
compensation, unemployment insurance and progress
payments under government contracts, and other
Liens incident to the ordinary conduct of the
Company's or such Restricted Subsidiary's business
or the ordinary operation of property or assets
and not incurred in connection with the obtaining
of any Debt or Guarantee;
(ii) Liens on assets or properties not owned
as of the Restatement Closing Date by the Company
or any Restricted Subsidiary securing only Debt of
the Company or any such Restricted Subsidiary that
is otherwise without recourse to the Company or
any such Restricted Subsidiary or any of its or
their properties or assets; provided, however,
that the Company complies with Section 5.2(g)(v);
(iii) Liens, existing at the time of the
acquisition by the Company 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 the Company or a Restricted
Subsidiary, on such capital stock or assets so
acquired or on the assets of the corporation so
merged into the Company or such Restricted
Subsidiary; provided, however, that such
acquisition or merger (and the discharge of such
Liens referred to in the immediately succeeding
proviso) shall not otherwise result in an Event of
Default or Default; and provided further that all
such Liens shall be discharged within 180 days
after the date of the respective acquisition or
merger;
(iv) Liens securing Debt referred to in
Section 5.2(g)(x);
(v) Liens in favor of the Agent or the Banks
or in favor of the Collateral Agent as provided in
the FTX Intercreditor Agreement, Liens in favor of
the Pel-Tex Lenders as permitted by the FTX
Intercreditor Agreement, Liens, if any, in favor
of the Agent or the Banks or in favor of the
Collateral Agent as provided in the FRP Security
Agreement, the FRP Pledge Agreement, the FRP
Subsidiary Security Agreement or the FRP
Subsidiary Pledge Agreement, and Liens in favor of
the Banks, the FI Lenders and the FI Trustee under
the FI Security Documents, all as contemplated by
Section 5.1(h) and liens in favor of KfW securing
Debt permitted by Section 5.2(g)(i)(E);
(vi) Liens listed on Schedule 5.2(d) hereto
securing obligations of the Company or a
Restricted Subsidiary under Deemed Leases;
(vii) Liens securing the Debt referred to in
paragraphs (iv), (v), (viii) and (ix) of
Section 5.2(g);
(viii) Liens of lessors of property (in such
capacity) leased by the Company or a Restricted
Subsidiary pursuant to an Operating Lease, which
Lien is limited to the property leased thereunder;
(ix) the reciprocal collateral mortgages
granted by FRP on its interests in Main Pass 299
sulphur and oil and gas interests to its joint
venture partners;
(x) zoning restrictions, easements, rights-
of-way, restrictions on use of real property and
other similar encumbrances incurred in the
ordinary course of business which, in the
aggregate, are not substantial in amount and do
not materially detract from the value of the
property subject thereto or interfere with the
ordinary conduct of the business of the Company or
any of its Subsidiaries;
(xi) Liens securing Permitted Secured Swaps
between FI and any Bank; and
(xii) extensions, renewals and replacements of
Liens referred to in paragraphs (i), (ii), (iv),
(vii), (viii), (ix), (x) and (xi) of this
Section 5.2(d); provided that any such extension,
renewal or replacement Lien shall be limited to
the property or assets covered by the Lien
extended, renewed or replaced and that the
obligations secured by any such extension, renewal
or replacement Lien shall be in an amount not
greater than the amount of the obligations secured
by the Lien extended, renewed or replaced.
(e) Current Ratios. The Company shall not fail
to maintain, as of the last day of each fiscal quarter,
consolidated current assets of the Company and its
consolidated Subsidiaries (other than Nonrestricted
Subsidiaries but including minority interests) in an
amount at least equal to the amount of consolidated
current liabilities of the Company and its consolidated
Subsidiaries (other than Nonrestricted Subsidiaries but
including minority interests) and each Major Subsidiary
shall not fail to maintain (on an individual, stand
alone basis), on the last day of each fiscal quarter,
consolidated current assets of it and its consolidated
Subsidiaries (other than Nonrestricted Subsidiaries but
including minority interests) at least equal to the
amount of consolidated current liabilities of it and
its consolidated Subsidiaries (other than Nonrestricted
Subsidiaries but including minority interests). For
purposes hereof, consolidated current assets and
consolidated current liabilities shall be determined in
accordance with GAAP, except that (i) investments in
shares of corporations (excluding shares which are, and
which are held as, marketable securities) and advances
to Nonrestricted Subsidiaries and other firms or
companies in which the Company has a material
investment, direct or indirect, or which have a direct
or indirect material investment in the Company, shall
not be included in current assets; (ii) current assets
shall be increased by the portion of the Unused Net
Commitment Amount which, under the terms of the
Corporate Group Facility, will, if not sooner
terminated or drawn down by either Borrower, remain
outstanding for at least twelve months following the
time of determination; provided that if such
availability is required by either Borrower to comply
with the provisions of this paragraph (e) or by FI to
comply with Section 5.2(e) of the FI Credit Agreement,
such availability will be considered to be a
utilization of the Commitments (and consequently
unavailable to the other Borrowers for purposes of this
paragraph (e)); and (iii) the current portion of long-
term Debt shall not be included in current liabilities.
(f) Fixed Charge Ratios. The Company shall not
permit the Fixed Charge Ratio of it or of either Major
Subsidiary to be less than 1.25 to 1.00 at the end of
any fiscal quarter.
(g) Debt. Neither the Company nor any Restricted
Subsidiary shall incur, create, assume or permit to
exist any Debt of any of them except:
(i) (A) up to $373,000,000 aggregate
principal amount of the Company's 6.55%
Convertible Subordinated Notes Due 2001;
(B) $150,000,000 aggregate principal amount
of the Company's 10-7/8% Senior Subordinated
Debentures due 2001;
(C) $750,000,000 aggregate face amount of the
Company's Zero Coupon Convertible Subordinated
Debentures Due 2006.
(D) $l,035,000,000 aggregate face amount of
FCX's Liquid Yield Option Notes due 2011 (Zero
Coupon Subordinated Exchangeable Notes, "LYONS")
or, subject to Section 2.2(IV), unsecured
refinancings thereof not involving an increase in
the aggregate principal amount over the then
accredited principal amount of the LYONS
outstanding;
(E) up to $75,000,000 aggregate principal
amount outstanding pursuant to the KfW Credit
Agreement; and
(F) up to $550,000,000 aggregate principal
amount outstanding pursuant to the FI Credit
Agreement.
(ii) (A) Debt of the Company owing to a
Subsidiary, provided that such Debt is
subordinated to the Loans on the terms of Exhibit
A hereto if the original term of such Debt is in
excess of six months or could be extended at the
option of the Company beyond six months from the
original date of such Debt;
(B) Debt of a Major Subsidiary owing to the
Company so long as the Company does not have any
Loans outstanding (whether made before or after
the incurrence of Debt by such Major Subsidiary);
(C) subject to Sections 5.2(o) and (p), Debt
of FI owing to FCX or FCX owing to FI; and
(D) subject to Sections 5.2(o) and (p), Debt
of a Restricted Subsidiary (other than a Major
Subsidiary) owing to the Company or any other
Restricted Subsidiary;
(iii) Debt incurred by the Company in any
amount and Debt incurred by each Major Subsidiary
not in excess of $30,000,000 in the aggregate for
such Borrowing Subsidiary, in each case pursuant
to commercial paper or uncommitted lines of credit
with commercial banks having a maturity of less
than six months;
(iv) purchase money indebtedness of the
Company and any Restricted Subsidiary incurred in
the ordinary course of business;
(v) Debt of the Company and any Restricted
Subsidiary secured by Liens described in
Section 5.2(d)(ii) that is otherwise nonrecourse
to the Company and each Restricted Subsidiary if
not less than 20 days prior to the date such Debt
is incurred, created or assumed the Company or
such Restricted Subsidiary delivers to the
Required Banks the terms of such Debt relating to
the nonrecourse nature of such Debt and the
Required Banks have not, on or prior to such date,
given written notice to the Company or such
Restricted Subsidiary of their objection thereto;
(vi) Indebtedness for Borrowed Money (other
than Guarantees and Capitalized Leases) of the
Company that is subordinated to the Loans and the
Company's guarantee pursuant to Section 9.1 if
(A) 30 days prior to the incurrence of such
Indebtedness for Borrowed Money, the Company
delivers to each Bank the terms of the
subordination provisions governing such
Indebtedness for Borrowed Money, (B) the Company
has not, prior to such incurrence, received notice
that Banks having Commitments representing at
least 33-1/3% of the aggregate Commitments
hereunder have objected to such subordination
provisions and (C) such Indebtedness for Borrowed
Money has a maturity date of not less than ten
years, with no scheduled repayments or
amortization for at least ten years after such
Indebtedness for Borrowed Money is incurred;
(vii) Guarantees by the Company or any
Restricted Subsidiary of (A) Debt (other than
nonrecourse Debt referred to in Section 5.2(g)(v))
or obligations of a Restricted Subsidiary or
(B) Debt or obligations of Nonrestricted
Subsidiaries or any other Person to the extent
permitted by paragraphs (l), (r) and (s) of this
Section 5.2;
(viii) Capitalized Leases (including those
resulting from sale and leaseback transactions) of
the Company or any Restricted Subsidiary if at
least 30 days prior to entering into any such
Capitalized Lease, the Company or such Restricted
Subsidiary delivers to each Bank the terms thereof
and, in the case of FI (i) such Capitalized Leases
are in connection with financings of the port
facility, power plants, aircraft, ships,
infrastructure assets or vehicles and (ii) the
aggregate amount of any Capitalized Leases of FI
in connection with financings of vehicles is not
in excess of $25,000,000;
(ix) recourse liability of the Company or any
Restricted Subsidiary in connection with the sale
of accounts receivable by the Company or such
Restricted Subsidiary, as the case may be;
provided, however, that such recourse liability
shall not be in excess of the sales price of the
receivables so sold and, in the case of a sale of
accounts receivable by FI, the proceeds of such
sale are deposited in the Sales Proceeds Account
in accordance with Article III of the FI Trust
Agreement; and
(x) other Debt not referred to in paragraphs
(i) through (ix) of this Section 5.2(g), in an
aggregate principal amount not exceeding
$50,000,000.
(h) (Intentionally Left Blank.)
(i) Convertible Debt Payments. The Company may
not make any payment on the Debt referred to in
Section 5.2(g)(i)(A) and (C) except (x) in common stock
of the Company with cash payment for fractional shares
and (y) otherwise in an aggregate amount not in excess
of $15,000,000.
(j) Ownership of Subsidiaries. The Company shall
not at any time directly or indirectly own shares or
units of voting stock or interests having less than
(x) 40% ownership interest in each of FRP and FI,
(y) 50.1% ownership interest in FCX and (z) such voting
power as provides effective control of the policy and
direction of FRP, FCX and FI. FCX shall not at any
time directly or indirectly own shares of voting stock
or interests having less than 50.1% ownership interest
in FI, including, so long as Section 4(c) of the
Indocopper Shareholders Agreement and the definitions
related thereto are in effect and have not been
amended, shares of voting stock or interests held
through P.T. Indocopper Investama Corporation. The
Company shall own its interests in FRP, FCX and FI, and
FCX shall own its interests in FI, free and clear of
all Liens, except as contemplated by Section 5.1(h).
The Company shall promptly notify the Agent in the
event there occurs any significant decrease in its or
FCX's percentage ownership of such voting power below
that indicated in the most recent Borrowing Base
Certificate or, in the case of its ownership, any
decrease in such percentage interest below 50%. The
ownership by the Company of equity interests in FRP
shall be direct and not through any intervening entity.
The ownership by the Company or FCX of common stock of
FI shall be direct and not through any intervening
entity, except for the percentage of common stock held
by FCX on the Restatement Closing Date through P. T.
Indocopper Investama Corporation. The Company shall at
no time permit any significant percentage of the assets
of either Borrowing Subsidiary or FCX to be transferred
to another Subsidiary which is not a Restricted
Subsidiary directly owned by the Company; provided,
however, that the foregoing shall not prohibit the
IMC-Agrico Transfer, the ALatief-FI Transfer, the Power
Facilities Transfer or the transfer referred to in
Section 8.1(i) in respect of Contract Area Block B.
(k) Fiscal Year. The Company 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 Company and the
Restricted Subsidiaries shall not make or permit to
exist (x) any Guarantee by the Company or a Restricted
Subsidiary of the Debt of any Person which is not a
Restricted Subsidiary or (y) any loans or advances to,
or purchase any stock, other securities or evidences of
indebtedness of, or permit to exist any investment
(whether by transfer of assets or otherwise) or acquire
any investment whatsoever in or make any Guarantee with
respect to any such loans, advances, purchases,
investments or acquisitions of interest made by any
Person with respect to, or any other payment for the
benefit of, any Nonrestricted Subsidiaries the
aggregate outstanding amount of which under this
clause (y) and Guarantees under clause (x) at any time
exceeds by more than $50,000,000 the largest aggregate
amount thereof outstanding at any time in the next
preceding fiscal year of the Company; provided that,
notwithstanding the provisions of clauses (x) and (y)
above, the Company may (i) Guarantee the FM Properties
Indebtedness and, so long as no Default or Event of
Default shall have occurred and be continuing (or would
result thereupon), make advances, loans and equity
contributions to FM Properties, (ii) Guarantee
obligations of FM Properties pursuant to any Permitted
Swap (as defined in the FM Credit Agreement) provided
that such Guarantee is granted on the same terms as the
Company's Guarantee of the FM Properties Indebtedness,
(iii) consummate the ALatief-FI Transfer and consummate
Guarantees of ALatief-FI's initial financing as
permitted pursuant to Sections 5.2(s)(i) and
5.2(s)(vii) and (iv) make investments as permitted
under Section 5.2(r), all of which shall not be
included in the calculation above regarding the
prohibition on investments in Nonrestricted
Subsidiaries and other entities in excess of
$50,000,000 of the preceding year's aggregate
investment.
(m) Federal Reserve Regulations. The Company
will not, and will cause the Major Subsidiaries not to,
use the proceeds of any Loan in any manner that would
result in a violation of, or be inconsistent with, the
provisions of Regulations G, U or X of the Board
(collectively, the "Margin Regulations"). The Company
will not, and will cause the Major Subsidiaries not to,
take any action at any time that would (A) result in a
violation of the substitution and withdrawal
requirements of said Regulations, in the event the same
should become applicable to this Agreement or any Loan
or (B) cause the representation and warranty contained
in Section 4.1(h) at any time to be other than true and
correct. In the event that the Company at any time
believes that there exists a reasonable possibility
that it will become unable to make the representation
set forth in Section 4.1(h)(iv), and alternative
methods for complying with the Margin Regulations in
connection with this Agreement are available, the Banks
and the Company shall promptly enter into negotiations
with a view to amending this Agreement to provide for
such alternative methods of compliance.
(n) Certain Debt Agreements. The Company shall
not, without the prior written consent thereto of the
Required Banks, (x) agree to any increase in the
principal amount of, or interest rate on, or security
for, any of the Debt referred to in
Section 5.2(g)(i)(A)-(E) or (y) amend, supplement or
change in any material manner (including any earlier
maturity date or amortization schedule), any of the
terms or provisions of any agreement, note or other
instrument governing or evidencing any of the Debt
referred to in Section 5.2(g)(i)(A) and (B).
(o) Investments in the Major Subsidiaries.
Neither the Company nor any of its Restricted
Subsidiaries shall make or permit to exist any loans or
advances to, or purchase any stock, other securities or
evidences of indebtedness of, or permit to exist any
investment or acquire any interest whatsoever in the
Major Subsidiary or any Subsidiary of either of them,
other than (i) investments existing on the Restatement
Closing Date in shares of common stock or units of such
Major Subsidiary, (ii) Debt permitted by
Section 5.2(g)(ii), (iii) open market purchases of
Depositary Units of FRP to the extent permitted by
Section 5.2(q), (iv) purchases by the Company of equity
interests in FRP sufficient to allow capital
expenditures by FRP of up to $30,000,000 per annum,
(v) investments by each Borrowing Subsidiary and its
Subsidiaries in Subsidiaries of such Major Subsidiary,
(vi) investments in FI expressly contemplated by the
Note Purchase Agreement dated as of July 2, 1991 among
FCX and FI, (vii) investments in FI as a result of the
issuance of common stock of FI in exchange for or
discharge of FI's 8.235% Convertible Subordinated
Debentures due 2007, (viii) Guarantees permitted by
Section 5.2(g)(vii) and (ix) the advance by FCX to FI
of the net proceeds of the Debt referred to in
Section 5.2(g)(i)(D).
(p) Investments in FCX. Except for
(i) Guarantees permitted by Section 5.2(g)(vii),
(ii) intercompany loans from FI to FCX and (iii) open
market purchases of the common stock of FCX to the
extent permitted by Section 5.2(q), the Company and the
Restricted Subsidiaries shall not make or permit to
exist any loans or advances to, or purchase any stock,
other securities or evidences of indebtedness of, or
permit to exist any investment (whether by transfer of
assets or otherwise) or acquire any investment
whatsoever in or make any Guarantee with respect to any
such loans, advances, purchases, investments or
acquisitions of interest made by any Person with
respect to, or any other payment for the benefit of,
FCX the aggregate outstanding amount of which at any
time exceeds by more than $60,000,000 the largest
aggregate amount thereof outstanding at any time in the
next preceding fiscal year of the Company.
(q) Equity Payments. The Company shall not make
an Equity Payment if there is then continuing any
Default or Event of Default (or a Default or Event of
Default would result therefrom), other than a failure
to be in compliance with Section 3.2 resulting solely
from a redetermination of the Borrowing Base Factors
during a 90-day period as permitted by the last
sentence of Section 2.4, or if the Available Borrowing
Base would, after giving effect to such Equity Payment,
not remain at or above zero, without taking into
account any redetermination of the Borrowing Base
pursuant to Section 2.3; provided, however, that the
Company may pay cash dividends with respect to
outstanding shares of (i) its Convertible Exchangeable
Preferred Stock registered with the SEC by the
Company's Registration Statement on Form S-3 No.
33-12816 and (ii) its $4.375 Convertible Exchangeable
Preferred Stock, par value $1.00 ((i) and (ii)
collectively, the "Preferred Stock") in accordance with
the terms of the Preferred Stock. In addition to the
limitations described in the immediately preceding
sentence, if this credit facility is or would at any
time be designated an HLT, the Company shall not make a
proposed Equity Payment if the following ratio
(excluding items relating to Non-Restricted
Subsidiaries for purposes of such calculation) would
not be greater than 1.30 to 1:
Numerator: the sum for the preceding four
fiscal quarters of the Company's (i) Consolidated
Cash Flow, and (ii) any other Net Proceeds from
asset sales not included in clause (i) above.
Denominator: (x) the sum for the preceding
three fiscal quarters of the Company's
(i) interest paid plus capitalized interest on all
Debt and Corporate Group Loans, (ii) Scheduled
Principal Payments, (iii) Equity Payments and
Preferred Stock dividends plus (y) the sum of the
Company's (A) proposed Equity Payment, (B) all
previous Equity Payments and Preferred Stock
dividends during the current fiscal quarter and
(C) Scheduled Principal Payments and projected
interest payments on all Debt and Corporate Group
Loans (using the interest rates applicable at the
time of calculation of the ratio), in each case
for the current quarter; provided, however, that
any Corporate Group Loans prepaid pursuant to
Section 3.10(a) or Section 3.10(c) of either this
Agreement or the FI Credit Agreement or continued
or converted pursuant to Section 3.11 or either
this Agreement or FI Credit Agreement shall not be
included in such calculation and any other Debt
prepaid or refinanced pursuant to similar
provisions of agreements or instruments governing
such other Debt shall not be included in such
calculation if such Debt would not otherwise have
matured within three months of such prepayment,
continuation, conversion or refinancing.
(r) Covenants Regarding IMC-Agrico. (i) The
Company and the Restricted Subsidiaries shall not make
or permit to exist any loans or advances to, or
purchase any stock, other securities or evidences of
indebtedness of, or permit to exist any investment
whatsoever in or make any Guarantee with respect to any
such loans, advances, purchases, investments or
acquisitions of interest made by any Person with
respect to, or any other payment for the benefit of,
IMC-Agrico except (A) the IMC-Agrico Transfer and
(B) in the case of the Company and the Restricted
Subsidiaries, to the extent that the aggregate amount
outstanding of which at any time does not exceed by
more than $50,000,000 the largest aggregate amount
thereof outstanding at any time in the next preceding
fiscal year of the Company.
(ii) The Company and FRP shall not permit
IMC-Agrico to incur Debt, other than Debt to the
Company or any Restricted Subsidiary permitted pursuant
to paragraph (i) of this Section 5.2(r), in excess of
$225,000,000 at any time outstanding, and shall not
permit Debt of IMC-Agrico at any time outstanding owing
to any Persons (other than FRP, any Subsidiary of FRP,
IMC and any Subsidiary of IMC) to exceed $110,000,000.
(iii) FRP (A) shall not permit FRP Partner to
agree, without the prior written consent of the
Required Banks, (x) to amend Section 6.04(a), (b) or
(d) or Section 6.07 of the IMC-Agrico Partnership
Agreement or any defined term included in either such
Section or (y) to enter into any agreement which
conflicts with either Section which would in the case
of either (x) or (y) dilute the control of FRP Partner
or narrow the scope of the decisions subject to vote by
FRP Partner, (B) shall notify the Agent of any proposed
amendment to any of the IMC-Agrico Contribution
Agreement, the IMC-Agrico Partnership Agreement or the
IMC-Agrico Parent Agreement and (C) shall not, and
shall not permit its Subsidiaries to, in each case
without the prior written consent of the Required
Banks, agree to amend any such agreement if, in the
opinion of the Agent, such amendment would reasonably
be expected to adversely affect the interests of the
Banks.
(iv) Neither the Company nor FRP shall permit its
accounting of IMC-Agrico to be other than as a
proportional consolidating interest unless the Company,
FRP and the Agent have agreed upon mutually acceptable
amendments to the financial covenants herein.
(s) Covenants Regarding ALatief-FI. (i) The
Company shall not permit ALatief-FI to incur the
initial transfer and the initial financing referred to
in Section 7.2 of the ALatief-FI Joint Venture
Agreement without the prior written consent of the
Agent, such consent not to be unreasonably withheld,
and, if FI shall not have Guaranteed such financing,
without the prior written consent of the Required
Borrowing Base Banks, each such consent to be
conditioned upon the satisfactory factoring of such
financing into the calculation of Borrowing Base Debt.
(ii) The Company shall cause FI to notify the
Agent of any proposed amendments to the ALatief-FI
Joint Venture Agreement and, without the prior written
consent of the Required Banks, the Company shall not
permit FI to amend the ALatief-FI Joint Venture
Agreement if, in the opinion of the Agent, such
amendment could adversely affect the interests of the
Banks.
SECTION 5.3. Additional Covenants of FRP. So
long as any Bank shall have any Loan Exposure or any
commitment to make a Loan hereunder, FRP directly agrees
with the Banks and the Agent that, without the prior written
consent of the Required Banks, it will not, and will cause
each of its own Subsidiaries not to, fail to comply with the
provisions of Sections 5.1 and 5.2 which are applicable to
it and them. FRP agrees that it will not materially alter
the nature and scope of the business and activities in which
it is engaged as of the Restatement Closing Date.
ARTICLE VI
Conditions of Credit
SECTION 6.1. Conditions Precedent to Each Credit
Event. Each Credit Event shall be subject to the following
conditions precedent:
(i) the representations and warranties on the part
of the Company, FCX and the Major Subsidiaries
contained in the Loan Documents shall be true and
correct in all material respects at and as of the date
of such Credit Event as though made on and as of such
date;
(ii) the Agent shall have received a notice of such
borrowing as required by Section 3.4;
(iii) no Event of Default shall have occurred and be
continuing on the date of such Credit Event or would
result from such Credit Event;
(iv) there shall have been no amendments to the
Certificate of Incorporation, the Certificate of
Domestication and/or the Certificate of Limited
Partnership, as applicable, or to the By-laws or
Partnership Agreement, as applicable, of the Company,
FCX or either Major Subsidiary since the date of the
Certificate furnished by the Company pursuant to
Section 6(a) of the Amendment Agreement, other than
amendments, if any, copies of which have been furnished
to the Agent; and
(v) except as permitted by the proviso to
Section 5.2(c), there shall be no proceeding for the
dissolution or liquidation of the Company, FCX or
either Major Subsidiary or any proceeding to revoke the
Certificate of Incorporation of the Company, FCX or FI
or to rescind the partnership agreement of FRP or the
corporate or partnership existence, which is pending
or, to the knowledge of the Company, threatened against
or affecting the Company, FCX or either Major
Subsidiary.
SECTION 6.2. Representations and Warranties with
Respect to Credit Events. Each Credit Event shall be deemed
a representation and warranty by the Company and FRP that
the conditions precedent to such Credit Event, unless
otherwise waived in accordance herewith, shall have been
satisfied.
ARTICLE VII
Events of Default
SECTION 7.1. Events of Default. If any of the
following acts or occurrences (an "Event of Default") shall
occur and be continuing:
(a) default for three or more days in the payment
when due of any principal of any Corporate Group Note;
or
(b) default for five or more days in the payment
when due of any interest on any Corporate Group Note,
or of any other amount payable under the Corporate
Group Facility; or
(c) any representation or warranty made or deemed
made in or in connection with any Loan Document or in
any certificate, letter or other writing or instrument
furnished or delivered to the Agent, the FI Agent, the
FI Trustee, any Bank or any FI Lender pursuant hereto
or to the FI Credit Agreement shall prove to have been
incorrect in any material respect when made or
effective or reaffirmed and repeated, as the case may
be; or
(d) default by the Company, either Major
Subsidiary or FCX in the due observance or performance
of any covenant, condition or agreement in
Section 5.1(c) or 5.1(h) of either this Agreement or
the FI Credit Agreement, other than the covenant to
preserve and maintain all of such Person's rights,
privileges and franchises desirable in the normal
conduct of it business; or
(e) default by the Company, either Major
Subsidiary or FCX in the due observance or performance
of any covenant, condition or agreement in Section 5.2
of this Agreement or in Section 5.2 of the FI Credit
Agreement (other than, in each case, paragraph (k)); or
(f) default by the Company, either Major
Subsidiary or FCX in the due observance or performance
of any other covenant, condition or agreement in the
Corporate Group Facility which shall remain unremedied
for 30 days after written notice thereof shall have
been given to such Borrower by any Bank; or
(g) the Company or any Restricted Subsidiary shall
(i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended,
or any other Federal or state bankruptcy, insolvency,
liquidation or similar law or, in the case of FI, any
such law of Indonesia, (ii) consent to the institution
of, or fail to contravene in a timely and appropriate
manner, any proceeding or the filing of any petition
described in clause (h) below, (iii) apply for or
consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for the
Company or such Restricted Subsidiary or for a
substantial part of its property or assets, (iv) file
an answer admitting the material allegations of a
petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debt as they
become due or (vii) take any action for the purpose of
effecting any of the foregoing; or
(h) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of
competent jurisdiction seeking (i) relief in respect of
the Company or any Restricted Subsidiary, or of a
substantial part of the property or assets of the
Company or any Restricted Subsidiary, under Title 11 of
the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy,
insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian,
sequestrator or similar official for the Company or any
Restricted Subsidiary or for a substantial part of the
property of the Company or any Restricted Subsidiary or
(iii) the winding-up or liquidation of the Company or
any Restricted Subsidiary; and such proceeding or
petition shall continue undismissed for 60 days, or an
order or decree approving or ordering any of the
foregoing shall continue unstayed and in effect for
30 days; or
(i) default shall be made with respect to any Debt
of the Company or any Restricted Subsidiary if the
effect of any such default shall be to accelerate, or
to permit the holder or obligee of any Debt (or any
trustee on behalf of such holder or obligee) to
accelerate (with or without notice or lapse of time or
both), the maturity of Debt in an aggregate amount in
excess of $10,000,000; or any payment of principal or
interest, regardless of amount, on any Debt of the
Company or a Restricted Subsidiary in an aggregate
principal amount in excess of $10,000,000, shall not be
paid when due, whether at maturity, by acceleration or
otherwise (after giving effect to any period of grace
specified in the instrument evidencing or governing
such Debt); or
(j) a Reportable Event or Reportable Events, or a
failure to make a required payment (within the meaning
of Section 412(n)(1)(A) of the Code) shall have
occurred with respect to any Plan or Plans that
reasonably could be expected to result in liability of
the Company to the PBGC or to a Plan in an aggregate
amount exceeding $10,000,000 and, within 30 days after
the reporting of any such Reportable Event to the Agent
or after the receipt by the Agent of the statement
required pursuant to clause (iii) of Section 5.1(f),
the Agent shall have notified the Company in writing
that (i) the Required Banks have made a determination
that, on the basis of such Reportable Event or
Reportable Events or the receipt of such statement,
there are reasonable grounds (A) for the termination of
such Plan or Plans by the PBGC, (B) for the appointment
by the appropriate United States District Court of a
trustee to administer such Plan or Plans or (C) for the
imposition of a lien in favor of a Plan and (ii) as a
result thereof an Event of Default exists hereunder; or
a trustee shall be appointed by a United States
District Court to administer any such Plan or Plans; or
the PBGC shall institute proceedings to terminate any
Plan or Plans; or
(k) the Company or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan
that it has incurred Withdrawal Liability to such
Multiemployer Plan, (ii) the Company or such ERISA
Affiliate does not have reasonable grounds for
contesting such Withdrawal Liability and is not in fact
contesting such Withdrawal Liability in a timely and
appropriate manner, and (iii) the amount of such
Withdrawal Liability specified in such notice, when
aggregated with all other amounts required to be paid
to Multiemployer Plans in connection with Withdrawal
Liabilities (determined as of the date or dates of such
notification), exceeds $10,000,000 or requires payments
exceeding $10,000,000 in any year; or
(l) the Company or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of
ERISA, if solely as a result of such reorganization or
termination the aggregate annual contributions of the
Company and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or have been or
are being terminated have been or will be increased
over the amounts required to be contributed to such
Multiemployer Plans for their most recently completed
plan years by an amount exceeding $10,000,000;
(m) a final judgment for the payment of money in
excess of $10,000,000 shall be rendered by a court or
other tribunal against the Company or any Restricted
Subsidiary and shall remain undischarged for a period
of 45 consecutive days during which execution of such
judgment shall not have been stayed effectively; or any
action shall be legally taken by a judgment creditor to
levy upon assets or properties of the Company or any
Restricted Subsidiary to enforce any such judgment;
(n) the security interest in the Contract of Work
granted in the FI Trust Agreement shall be deemed to be
invalid or fail to be in full force and effect or the
Contract of Work shall be terminated or otherwise fail
to be in full force and effect or shall be amended
without the consent of the Required Banks in any manner
which materially and adversely affects the rights and
benefits granted to the FI Trustee and the Banks under
the FI Security Documents; or the Ministry of Mines and
Energy of Indonesia (or any successor entity) or the
Government of Indonesia shall have taken any action in
contravention of the Contract of Work which materially
adversely affects FI's ability to perform its
obligations under the Corporate Group Facility or the
rights and benefits granted to the FI Trustee under any
FI Security Document; or
(o) any Governmental Authority shall condemn,
seize, nationalize, assume the management of or
appropriate any material portion of FI's property,
assets or revenues (either with or without payment of
compensation);
then, and in any such event (other than an event with
respect to the Company or either Borrowing Subsidiary
described in paragraph (g) or (h) above), and at any
time thereafter during the continuance of such event,
the Agent may, and at the request of the Required Banks
shall, by written or telegraphic notice to the Company,
take one or more of the following actions at the same
or different times: (i) declare the Total Commitment
to be terminated, whereupon the Total Commitment shall
forthwith terminate; (ii) declare all sums then owing
by the Borrowers 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 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 FI Security
Documents, the Pledge Agreement or the Security
Agreements; provided, however, that upon the occurrence
of any event described in paragraph (g) or (h) of this
Section 7.1 as to which the Company or either Major
Subsidiary is the entity involved, 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 hereunder, be immediately
due and payable and the Total Commitment hereunder
shall be immediately terminated subject to the final
sentence of this Section 7.1 without presentment,
demand, protest or notice of any kind, all of which are
expressly waived by each Borrower, anything contained
herein or in any Promissory Note to the contrary
notwithstanding. Promptly following the making of any
such declaration, the Agent shall give notice thereof
to the Company but failure to do so shall not impair
the effect of such declaration.
ARTICLE VIII
The Agent
SECTION 8.1. The Agent. (a) For convenience of
administration and to expedite the transactions contemplated
by this Agreement, Chemical Bank is hereby appointed as
Agent and Collateral Agent for the Banks under this
Agreement. Neither the Agent nor the Collateral Agent shall
have any duties or responsibilities with respect hereto
except those expressly set forth herein. Each Bank hereby
irrevocably appoints and expressly authorizes the Agent or
the Collateral Agent, without hereby limiting any implied
authority, to take such action as the Agent or the
Collateral Agent, as applicable, on its behalf and to
exercise such powers under this Agreement as are delegated
to such Person by the terms hereof, together with such
powers as are reasonably incidental thereto. Each of the
Agent and the Collateral Agent may exercise any of its
duties hereunder by or through their respective agents,
officers or employees. In addition, each Bank hereby
irrevocably authorizes and directs the Collateral Agent to
enter, on behalf of each of them, into the FTX Intercreditor
Agreement and, as contemplated pursuant to this Agreement,
the Pledge Agreement and the Security Agreement.
(b) Neither the Agent nor the Collateral Agent
nor any of their respective directors, officers, agents or
employees shall be liable to any Bank or any Borrower for
any action taken or omitted to be taken by it or them in
good faith under or in connection with this Agreement and
shall neither be responsible to any Bank or any Borrower for
the consequences of any oversight or error of judgment nor
be answerable to any Bank or any Borrower for any loss
unless the same shall happen through its or their gross
negligence or wilful misconduct. The Agent may treat the
payee of any Promissory Note as the holder thereof until
written notice of transfer shall have been filed with it
signed by such payee and in form satisfactory to the Agent.
The Agent and the Collateral Agent may each consult with
legal counsel selected by it and shall be entitled to rely
upon the advice of such counsel as to its duties and shall
not be liable for any action taken or suffered in good faith
by it in accordance with the advice of such counsel.
Neither the Agent nor the Collateral Agent shall be under a
duty to enter into or pass upon the validity, effectiveness,
genuineness or value of this Agreement, any Promissory Note
or any other Loan Document, any other instrument or document
delivered pursuant hereto or thereto or herewith or
therewith, or any representation, warranty or agreement made
herein or therein or in connection herewith or therewith,
and the Agent and the Collateral Agent each shall be
entitled to assume that the same are valid, effective and
genuine in what they purport to be. Neither the Agent nor
the Collateral Agent shall incur any liability under or in
respect of this Agreement by acting upon any notice,
consent, certificate, warranty or other paper or instrument
believed by such Person to be genuine or authentic or to be
signed by the proper party, or with respect to anything
which it may do or refrain from doing in the reasonable
exercise of its judgment, or which may seem to it to be
necessary or desirable on such premises.
(c) To the extent that either the Agent or the
Collateral Agent shall not be reimbursed by the Borrowers
for any costs, liabilities or expenses incurred in such
capacity, each Bank agrees to indemnify such Person, pro
rata in accordance with its Applicable Percentage, from and
against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever
which may be imposed on or incurred by or asserted against
such Person in any way relating to or arising out of this
Agreement; provided, however, that no Bank shall be liable
for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's or the
Collateral Agent's gross negligence or wilful misconduct.
Each Bank agrees promptly to pay to the Agent or the
Collateral Agent, as applicable, its pro rata portion of the
statement of amounts payable by the Borrowers to such Person
under this Agreement which are not paid by the Borrowers for
any reason, within 30 days of the date such statement is
sent to the Banks by such Person.
(d) It is expressly understood and agreed that
the obligations of the Agent and the Collateral Agent are
only those expressly set forth with respect to it in this
Agreement. The Agent shall not be required to take any
action and shall have no obligations, except such actions
and obligations which it is expressly required to take or
observe by the terms of this Agreement. Each Bank agrees
that the Agent shall be entitled to take any action which it
is permitted to take hereunder, but shall only be required
to take any such action at the written request of the
Required Banks. The Agent and the Collateral Agent shall be
entitled to assume that no Event of Default or Default has
occurred and is continuing, unless such Person has actual
knowledge of such fact or has received notice from a Bank
that such Bank considers that an Event of Default or Default
has occurred and is continuing and specifying the nature
thereof. In the event that the Agent or the Collateral
Agent shall have acquired actual knowledge of any such Event
of Default or Default, such Person shall promptly give
notice thereof to the Banks, and will take such action and
assert such rights pursuant to this Agreement as the
Required Banks shall direct. The Agent and the Collateral
Agent shall in all cases be fully protected for any action
taken pursuant to such directions.
(e) The Agent or the Collateral Agent may resign
at any time by giving written notice thereof to the Banks
and the Company and may be removed at any time with or
without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the
right to appoint, and the Company shall have the right to
approve (such approval not to be unreasonably withheld or
delayed) a successor Agent or Collateral Agent, as the case
may be. If no successor Agent or Collateral Agent, as the
case may be, shall have been so appointed and approved and
shall have accepted such appointment, within 30 days after
the retiring Person's giving of notice of resignation or the
Bank's removal of the retiring Person, then the retiring
Person may, on behalf of the Banks, appoint a successor
Agent or Collateral Agent, as the case may be, which shall
be a Bank. Upon the acceptance of any appointment as Agent
or Collateral Agent hereunder by a successor Agent or
Collateral Agent, as the case may be, such successor Agent
or Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of
the retiring Person, and the retiring Person shall be
discharged from its duties and obligations hereunder. After
any such retiring Person's resignation or removal hereunder
as Agent or Collateral Agent, as applicable, the provisions
of this Article VIII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the
Agent or Collateral Agent, as applicable, under this
Agreement.
(f) The Agent shall be responsible for
supervising the preparation, execution and delivery of this
Agreement and the other agreements and instruments
contemplated hereby, any amendment or modification thereto
and the closing of the transactions contemplated hereby and
thereby. In addition, the Agent shall assist the Collateral
Agent in the performance of its duties as may be reasonably
requested by such Person from time to time.
(g) The obligations of the Agent and the
Collateral 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 Collateral Agent will not consent to any
modification, supplement or waiver of the FTX Intercreditor
Agreement, the FRP Security Agreement, the FRP Subsidiary
Security Agreement, the FRP Pledge Agreement, or the FRP
Subsidiary Pledge Agreement.
ARTICLE IX
Guarantees
SECTION 9.1. Guarantee by the Company. As
consideration for the Banks' obligations to lend hereunder,
the Company hereby unconditionally and irrevocably
guarantees, as primary obligor and not merely as a surety,
the due and punctual payment of (x) the principal of and
interest on each Promissory Note of FRP, when and as due,
whether at maturity, by acceleration, by notice of
prepayment or otherwise, (y) all other monetary obligations
of FRP and its Wholly-Owned Restricted Subsidiaries to the
Banks and the Agent under this Agreement, the FRP Pledge
Agreement, the FRP Security Agreement, the FRP Subsidiary
Pledge Agreement and the FRP Subsidiary Securities Agreement
and (z) all amounts owing by FRP to any Bank pursuant to any
Permitted Secured Swap with FRP (collectively, the "FRP
Obligations"). The Company further agrees that the FRP
Obligations may be extended or renewed, in whole or in part,
without notice or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any
extension or renewal of any such Obligation.
The Company waives presentment to, demand of
payment from and protest to FRP of any of the FRP
Obligations and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment. The
obligations of the Company under this Section 9.1 shall not
be affected by (a) the failure of any Bank or the Agent to
assert any claim or demand or to enforce any right or remedy
against FRP under the provisions of this Agreement or
otherwise; (b) any rescission, waiver, amendment or
modification of any of the terms or provisions of this
Agreement, any Promissory Note, any guarantee or any other
agreement; (c) the release of any security held by any Bank
or the Agent for the FRP Obligations guaranteed by it or any
of them; or (d) the failure of any Bank or the Agent to
exercise any right or remedy against any other guarantor of
the FRP Obligations.
The Company further agrees that its guarantee
constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort
be had by any Bank or the Agent to any security held for
payment of the FRP Obligations guaranteed by it or to any
balance of any deposit account or credit on the books of
such Bank or the Agent in favor of the Borrowing Subsidiary
or any other Person.
The obligations of the Company under this
Section 9.1 shall not be subject to any reduction,
limitation, impairment or termination for any reason,
including, without limitation, any claim of waiver, release,
surrender, alteration or compromise, and shall not be
subject to any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations guaranteed
by it or otherwise. Without limiting the generality of the
foregoing, the obligations of the Company under this
Section 9.1 shall not be discharged or impaired or otherwise
affected by the failure of any Bank or the Agent to assert
any claim or demand or to enforce any remedy under this
Agreement, any Promissory Note, any guarantee or any other
agreement, by any waiver or modification of any thereof, by
any default, failure or delay, wilful or otherwise, in the
performance of the Obligations guaranteed by it, or by any
other act or omission which may or might in any manner or to
any extent vary the risk of the Company or otherwise operate
as a discharge of the Company as a matter of law or equity.
The Company further agrees that its guarantee
shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of
principal of or interest on any Obligation guaranteed by it
(including, without limitation, any payment pursuant to this
guarantee) is rescinded or must otherwise be restored by any
Bank or the Agent upon the bankruptcy or reorganization of
FRP or otherwise.
In furtherance of the foregoing and not in
limitation of any other right which any Bank or the Agent
may have at law or in equity against the Company by virtue
hereof, upon the failure of FRP Subsidiary to pay any of the
Obligations when and as the same shall become due, whether
at maturity, by acceleration, after notice of prepayment or
otherwise, the Company hereby promises to and will, upon
receipt of written demand by any Bank or the Agent,
forthwith pay, or cause to be paid, to the Agent for
distribution to the Banks or the Agent in cash the amount of
such unpaid FRP Obligations, and at such time as all such
FRP Obligations owing to such Bank or the Agent have been
indefeasibly paid in full and its Commitment terminated,
such Bank or the Agent shall, in a reasonable manner, assign
the amount of such FRP Obligations owed to it and paid by
the Company, pursuant to this guarantee to the Company, such
assignment to be pro tanto to the extent to which the
Obligations in question were discharged by the Company, or
make such other disposition thereof as the Company shall
direct (all without recourse to such Bank or the Agent and
without any representation or warranty by such Bank or the
Agent).
Upon payment by the Company of any sums to a Bank
or the Agent as provided above in this Section 9.1, all
rights of the Company against FRP arising as a result
thereof by way of right of subrogation or otherwise shall in
all respects be subordinated and junior in right of payment
to the prior indefeasible payment in full of all the FRP
Obligations to the Banks and the FI Obligations (as defined
in the FI Credit Agreement) to the FI Lenders and the Agent
and shall not be exercised by the Company prior to
indefeasible payment in full of all Corporate Group Loans
and termination of the Commitments and the commitments under
the FI Credit Agreement.
ARTICLE X
Miscellaneous
SECTION 10.1. Notices. Notices and other
communications provided for herein shall be in writing and
shall be delivered by hand or overnight or same day courier
service or mailed or sent by telex, telecopy, graphic
scanning or other telegraphic communications equipment of
the sending party to the appropriate party's address set
forth on the signature pages hereof. All notices and other
communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have
been given on the date of receipt if hand delivered or three
days after being sent by registered or certified mail,
postage prepaid, return receipt requested, if by any
telecopy, telegraphic or telex communications equipment, in
each case addressed to such party as provided in this
Section 10.01 or in accordance with the latest unrevoked
direction from such party.
SECTION 10.02. 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 shall be considered to have been relied upon by
the Banks and the Agent and shall survive the making by the
Banks of the Loans and the execution and delivery to the
Banks of the Promissory Notes evidencing such Loans
regardless of any investigation made by the Banks or on
their behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any
Corporate Group Note, any Commitment Fee or any other fee or
amount payable under the Corporate Group Notes or the
Corporate Group Facility is outstanding and unpaid and so
long as the Commitments or the commitments under the FI
Credit Agreement have not been terminated.
SECTION 10.3. Successors and Assigns;
Participations; Purchasing Banks. (a) This Agreement shall
be binding upon and inure to the benefit of the Company,
FRP, the Banks, the Agent, all future holders of the
Promissory Notes, and its respective successors and assigns,
except that neither the Company nor FRP may assign or
transfer any of its rights or obligations under this
Agreement without the prior written consent of each Bank.
Any Bank may at any time pledge or assign all or any portion
of its rights under this Agreement and the Promissory Notes
issued to it to a Federal Reserve Bank; provided that no
such pledge or assignment shall release a Bank from any of
its obligations hereunder.
(b) Any Bank may, in the ordinary course of its
business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants")
participating interest in any Loan owing to such Bank, any
Promissory Note held by such Bank, any Commitment of such
Bank or any other interest of such Bank hereunder. In the
event of any such sale by a Bank of participating interests
to a Participant, such Bank's obligations under this
Agreement to the other parties to this Agreement shall
remain unchanged, such Bank shall remain solely responsible
for the performance thereof, such Bank shall remain the
holder of any such Promissory Note for all purposes under
this Agreement and the Company and the Agent shall continue
to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this
Agreement. The Company agrees that if amounts outstanding
under this Agreement and the Promissory Notes are due and
unpaid, or shall have been declared or shall have become due
and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under
this Agreement and any Promissory Note to the same extent as
if the amount of its participating interest were owing
directly to it as a Bank under this Agreement or any
Promissory Note; provided that such right of setoff shall be
subject to the obligation of such Participant to share with
the Banks, and the Banks agree to share with such
Participant, as provided in Section 3.16. The Company also
agrees that each Participant shall be entitled to the
benefits of Sections 3.12, 3.13, 3.14, 3.16, 3.18, 3.19 and
10.5 with respect to its participation in the Commitments
and the Loans outstanding from time to time; provided that
no Participant shall be entitled to receive any greater
amount pursuant to such Sections than the transferor Bank
would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Bank to
such Participant had no such transfer occurred and provided
further that the voting rights of any Participant would be
limited to changes in amounts of Loan or Commitment, rates,
fees and maturity affecting such Participant and release of
all or substantially all the collateral for the FI
Obligations. Each Bank selling a participation with a
tenure longer than 183 days will use its best efforts to
inform the Company of (i) the amount of any such
participations sold and (ii) the identity of all
Participants purchasing such participations.
(c) (Intentionally Left Blank.)
(d) This Agreement shall not be assignable by the
Banks, except that a Bank may, in accordance with applicable
law, and subject to Section 10.3(j), at any time assign by
novation all or any part of its rights and obligations under
this Agreement and its Promissory Notes (I) to any Bank or
any affiliate thereof, without the Company'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 Company's consent,
such consent not to be unreasonably withheld (except that
any Bank may assign its rights and obligations under this
Agreement and its Promissory Notes to any other Bank that is
a party to this Agreement and any affiliate thereof without
the necessity of approval by the Company), pursuant to a
Commitment Transfer Supplement in the form of Exhibit D
hereto, executed by such Purchasing Bank, such transferor
Bank (and, in the case of a Purchasing Bank that is not then
a Bank or an affiliate thereof, by the Company and the
Agent), and delivered to the Agent for its recording in the
Register. Assignments shall be by novation only. Upon such
execution, delivery and recording (and, if required, consent
of the Company), from and after the Transfer Effective Date
determined pursuant to such Commitment Transfer Supplement,
(x) the Purchasing Bank thereunder shall (if not already a
party hereto) be a party hereto and, to the extent provided
in such Commitment Transfer Supplement, have the rights and
obligations of a Bank hereunder with a Commitment as set
forth therein, and (y) the transferor Bank thereunder shall,
to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this
Agreement (and, in the case of a Commitment Transfer
Supplement covering all or the remaining portion of a
transferor Bank's rights and obligations under this
Agreement, such transferor Bank shall cease to be a party
hereto). Such Commitment Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such
Purchasing Bank (if not already a party hereto) and the
resulting adjustment of Applicable Percentages arising from
the purchase by such Purchasing Bank of all or a portion of
the rights and obligations of such transferor Bank under
this Agreement and the Promissory Notes. On or prior to the
Transfer Effective Date determined pursuant to such
Commitment Transfer Supplement, the Company, at its own
expense, shall execute and deliver to the Agent in exchange
for the surrendered Promissory Note a new Promissory Note to
the order of such Purchasing Bank in an amount equal to the
Commitment assumed by it pursuant to such Commitment
Transfer Supplement and, if the transferor Bank has retained
a Commitment hereunder, a new Promissory Note to the order
of the transferor Bank in an amount equal to the Commitment
retained by it hereunder. Such new Promissory Notes shall
be dated the Original Execution Date and shall otherwise be
in the form of the Promissory Notes replaced thereby. The
Promissory Note surrendered by the transferor Bank shall be
returned by the Agent to the Company marked "canceled".
(e) The Agent shall maintain at its address
referred to in Section 10.1 a copy of each Commitment
Transfer Supplement delivered to it and a register (the
"Register") for the recordation of the names and addresses
of the Banks and the Commitment of, and principal amount of
the Loans owing to, each Bank from time to time. The
entries in the Register shall be conclusive, in the absence
of manifest error, and the parties hereto may treat each
Person whose name is recorded in the Register as the owner
of the Loan recorded therein for all purposes of this
Agreement. The Register shall be available for inspection
by the parties hereto at any reasonable time and from time
to time upon reasonable prior notice.
(f) Upon its receipt of a Commitment Transfer
Supplement executed by a transferor Bank and a Purchasing
Bank (and, in the case of a Purchasing Bank that is not then
a Bank or an affiliate thereof, by the Company and the
Agent) together with payment to the Agent of a registration
and processing fee of $2,000, the Agent shall (i) promptly
accept such Commitment Transfer Supplement and (ii) on the
Transfer Effective Date determined pursuant thereto record
the information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and
the Company.
(g) Subject to Section 10.16, the Company
authorizes each Bank to disclose to any Participant or
Purchasing Bank (each, a "Transferee") and any prospective
Transferee any and all financial information in such Bank's
possession concerning the Company and its affiliates which
has been delivered to such Bank by or on behalf of the
Company pursuant to this Agreement or which has been
delivered to such Bank by or on behalf of the Company in
connection with such Bank's credit evaluation of the Company
and its affiliates prior to becoming a party to this
Agreement.
(h) If, pursuant to this Section 10.3, any
interest in this Agreement or any Promissory Note is
transferred to any Transferee other than a Participant which
is organized under the laws of any jurisdiction other than
the United States or any State thereof, the transferor Bank
(x) shall immediately notify the Agent of such transfer,
describing the terms thereof and indicating the identity and
country of residence of each Transferee, and (y) shall cause
such Transferee, concurrently with the effectiveness of such
transfer, (i) to represent to the transferor Bank (for the
benefit of the transferor Bank, the Agent and the Company)
that under applicable law and treaties no taxes will be
required to be withheld by the Agent, the Company or the
transferor Bank with respect to any payments to be made to
such Transferee in respect of the Loans, (ii) to furnish to
the transferor Bank (and, in the case of any Purchasing Bank
registered in the Register, the Agent and the Company)
either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such Transferee
claims entitlement to complete exemption from U.S. Federal
withholding tax on all interest payments hereunder) and
(iii) to agree (for the benefit of the transferor Bank, the
Agent and the Company) to provide the transferor Bank (and,
in the case of any Purchasing Bank registered in the
Register, the Agent and the Company) a new Form 4224 or
Form 1001 upon the expiration or obsolescence of any
previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Transferee,
and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax
exemption. Notwithstanding any other provision contained
herein to the contrary, the Company and the Agent shall be
entitled to deduct and withhold United States withholding
taxes with respect to all payments to be made hereunder to
or for such transferor Bank or Transferee as may be required
by United States law due to such assignments and such
transferor Bank or Transferee shall indemnify and hold
harmless the Company and the Agent from and against any tax,
interest, penalty or other expense that the Company and the
Agent may incur as a consequence of any failure to withhold
United States taxes applicable because of any transfer or
participation arrangement that is not fully disclosed to
them as required hereunder.
(i) If, pursuant to this Section 10.3, a Bank
sells participating interests to a Participant which is
organized under the laws of any jurisdiction other than the
United States or any State thereof, the selling Bank shall
cause such Participant, concurrently with the effectiveness
of such sale, (i) to represent to the selling Bank (for the
benefit of the selling Bank, the Agent and the Company) that
under applicable law and treaties no taxes will be required
to be withheld by the Agent, the Company or the selling Bank
with respect to any payments to be made to such Participant
in respect of the Loans, (ii) to furnish to the selling Bank
either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such Participant
claims entitlement to complete exemption from U.S. Federal
withholding tax on all interest payments hereunder) and
(iii) to agree (for the benefit of the selling Bank, the
Agent and the Company) to provide the selling Bank a new
Form 4224 or Form 1001 upon the expiration or obsolescence
of any previously delivered form and comparable statements
in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Participant,
and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax
exemption. Notwithstanding any other provision contained
herein to the contrary, the Company and the Agent shall be
entitled to deduct and withhold United States withholding
taxes with respect to all payments to be made hereunder to
or for such selling Bank or Participant as may be required
by United States law due to such participations and such
selling Bank or Participant shall indemnify and hold
harmless the Company and the Agent from and against any tax,
interest, penalty or other expense that the Company and the
Agent may owe as a consequence of any selling Bank's failure
to obtain tax forms securing complete exemption from U.S.
withholding taxes.
(j) Notwithstanding anything in this Section 10.3
to the contrary, (i) without the prior written consent of
the Agent and the Company, no Bank which is an FM Lender
shall (except as permitted by paragraph (a) of this
Section 10.3 regarding assignments to Federal Reserve Banks)
assign any interest in or commitment under this Agreement or
any Loans unless at the same time it shall also assign, to
the same assignee, the same proportion of its interest in
and commitment and loans outstanding under the FM Credit
Agreement pursuant to the provisions governing assignments
set forth therein and (ii) no Bank which is an FI Lender
shall (except as permitted by paragraph (a) of this
Section 10.3 regarding assignments to Federal Reserve Banks)
make any such assignment of its interests hereunder unless
it shall also assign, to the same assignee, the same
proportion of its interest in and commitment and loans
outstanding under the FI Credit Agreement.
SECTION 10.4. Expenses of the Banks; Indemnity.
(a) The Borrowers agree, jointly and severally, to pay all
out-of-pocket expenses reasonably incurred by the Agent in
connection with the preparation of this Agreement and the
Promissory Notes or with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not
the transactions hereby contemplated shall be consummated)
or reasonably incurred by the Agent or any Bank in
connection with the enforcement or protection of their
rights in connection with this Agreement or with the Loans
made or the Promissory Notes issued hereunder (whether
through negotiations, legal proceedings or otherwise),
including, but not limited to, the reasonable fees and
disbursements of Cravath, Swaine & Moore, special counsel
for the Agent and, in connection with such enforcement or
protection, the reasonable fees and disbursements of other
counsel for any Bank. The Company further agrees that it
shall indemnify the Banks, the Agent and the Collateral
Agent 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 Company agrees to pay, and to protect,
indemnify and save harmless each Bank, the Agent and the
Collateral 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 the Agent shall be designated a
party thereto) of any nature arising from or relating to the
issuance or delivery of Promissory Notes or in connection
with the enforcement of this Agreement or the other Loan
Documents or relating to the use of proceeds of Loans
hereunder for the purpose of acquiring equity securities of
any other Person; provided, however, that the Company shall
have no obligation to protect, indemnify and save harmless
any Bank, the Agent or the Collateral Agent or any other
Person otherwise entitled to indemnity hereunder with
respect to any loss, liability, action, suit, judgment,
demand, damage, cost or expense resulting from or
attributable to the gross negligence or wilful misconduct of
such Bank, the Agent or the Collateral Agent or such other
Person. If any action, suit or proceeding arising from any
of the foregoing is brought against any Bank, the Agent or
the Collateral Agent or any other Person indemnified or
intended to be indemnified pursuant to this Section 10.4,
the Company, 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 Company (which counsel
shall be satisfactory to such Bank, the Agent or the
Collateral Agent or other Person indemnified or intended to
be indemnified). If the Company 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 Company
contained in this Agreement shall be breached, any Bank, the
Agent or the Collateral 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, the Agent or
the Collateral Agent shall be repayable to it by the Company
immediately upon such Bank's or the Agent's demand therefor.
(b) The provisions of this Section 10.4 shall
remain operative and in full force and effect regardless of
the expiration of the term of this Agreement or the FI
Credit Agreement, the consummation of the transactions
contemplated hereby or thereby, the repayment of any of the
Corporate Group Loans or any Corporate Group Notes, the
invalidity or unenforceability of any term or provision of
this Agreement or the FI Credit Agreement or any Corporate
Group Note, or any investigation made by or on behalf of any
Bank, the Agent, the FI Lender or the FI Agent. All amounts
due under this Section 10.4 shall be payable on written
demand therefor.
SECTION 10.5. Right of Setoff. If an Event of
Default shall have occurred and be continuing and any Bank
shall have requested the Agent to declare the Promissory
Notes immediately due and payable pursuant to Article VII,
then each Bank is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the
credit or the account of any Borrower against any of and all
the obligations of such Borrower (and, in the case of the
Company, the Borrowing Subsidiary) 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 Company after any such
setoff and application made by such Bank, but the failure to
give such notice shall not affect the validity of such
setoff and application. The rights of each Bank under this
Section are in addition to other rights and remedies
(including, without limitation, other rights of setoff)
which such Bank may have.
SECTION 10.6. APPLICABLE LAW. THIS AGREEMENT AND
THE PROMISSORY NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.7. Waivers; Amendments. (a) No
failure or delay of any Bank or the 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 Agent
hereunder and under the other documents and agreements
entered into in connection herewith are cumulative and not
exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of this
Agreement or any Promissory Note or any other such document
or agreement or consent to any departure by 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) 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
Company and the Required Bank; provided, however, that no
such agreement shall (i) change the principal amount of, or
extend or advance the maturity of or any date for the
payment of any principal of or interest on, any Promissory
Note (including, without limitation, any such payment
pursuant to Section 3.8 or paragraph (b), (c) or (d) of
Section 3.10), or waive or excuse any such payment or any
part thereof, or change the rate of interest on any
Promissory Note, without the written consent of each holder
affected thereby, (ii) change the Commitment of any Bank
without the written consent of such Bank, or change any fees
to be paid to any Bank or the Agent hereunder without the
written consent of such Bank or the Agent, as applicable,
(iii) amend or modify the provisions of this Section,
Sections 3.9 through 3.16 or Section 10.4 or Article IX or
the definition of "Required Banks" or "Required Borrowing
Base Banks", without the written consent of each Bank,
(iv) release the collateral granted as security for the FI
Obligations (except as expressly contemplated hereby),
without the written consent of each Bank or (v) release the
Company of its obligations pursuant to Article IX without
the written consent of each Bank; and provided further that
no such agreement shall amend, modify or otherwise affect
the rights or duties of the Agent hereunder without the
written consent of the Agent. Each Bank and holder of any
Promissory Note shall be bound by any modification or
amendment authorized by this Section regardless of whether
its Promissory Notes shall be marked to make reference
thereto, and any consent by any Bank or holder of a
Promissory Note pursuant to this Section shall bind any
person subsequently acquiring a Promissory Note from it,
whether or not such Promissory Note shall be so marked.
SECTION 10.8. Severability. In the event any one
or more of the provisions contained in this Agreement or in
the Promissory Notes should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
or therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
SECTION 10.9. Counterparts. This Agreement may
be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become
effective when copies hereof which, when taken together,
bear the signatures of each of the parties hereto shall be
delivered or mailed to the Agent and the Company.
SECTION 10.10. Headings. Article and Section
headings and the Table of Contents used herein are for
convenience of reference only and are not to affect the
construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 10.11. Entire Agreement. The Corporate
Group Facility, the fee letters between the Agent and the
Company and the exhibits and schedules hereto contain the
entire agreement among the parties hereto with respect to
the Loans and the related transactions. Any previous
agreement among the parties with respect to the subject
matter hereof is superseded by the Corporate Group Facility,
such fee letters and the agreements set forth as exhibits
hereto. Nothing in this Corporate Group Facility or in such
other documents, expressed or implied, is intended to confer
upon any party other than the parties hereto any rights,
remedies, obligations or liabilities under or by reason of
this Agreement, such fee letters or the agreements set forth
as exhibits hereto.
SECTION 10.12. Restatement Closing Date. This
Agreement, as amended and restated herein, shall be
effective on the Restatement Closing Date.
SECTION 10.13. WAIVER OF JURY TRIAL, ETC.
(A) EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY DOCUMENT OR
AGREEMENT ENTERED INTO IN CONNECTION HEREWITH AND ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(b) Except as prohibited by law, each party
hereto hereby waives any right it may have to claim or
recover in any litigation referred to in paragraph (a) of
this Section any special, indirect, exemplary, punitive or
consequential damages or any damages other than, or in
addition to, actual damages.
(c) Each party hereto (i) certifies that no
representative, agent or attorney of any Bank has
represented, expressly or otherwise, that such Bank would
not, in the event of litigation, seek to enforce the
foregoing waivers and (ii) acknowledges that it has been
induced to enter into this Agreement or any other document,
as applicable, by, among other things, the mutual waivers
and certifications herein.
SECTION 10.14. Interest Rate Limitation.
Notwithstanding anything herein or in the Promissory Notes
to the contrary, if at any time the applicable interest
rate, together with all fees and charges which are treated
as interest under applicable law (collectively the
"Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted
for, charged, received, taken or reserved by any Bank, shall
exceed the maximum lawful rate (the "Maximum Rate") which
may be contracted for, charged, taken, received or reserved
by such Bank in accordance with applicable law, the rate of
interest payable under the Promissory Note held by such
Bank, together with all Charges payable to such Bank, shall
be limited to the Maximum Rate.
SECTION 10.15. JURISDICTION; CONSENT TO SERVICE
OF PROCESS. (A) EACH 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 THE AGENT MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
AGAINST ANY BORROWER OR FCX 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 10.01. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 10.16. Confidentiality. Each Bank agrees
(which agreement shall survive the termination of this
Agreement) that financial information, information from the
Company's and its Subsidiaries' books and records,
information concerning the Company's and its Subsidiaries'
trade secrets and patents and any other information received
from the Company 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 Company;
(ii) disclosure of information (other than that
received from the Company and its Subsidiaries prior to
or under this Agreement) already known by, or in the
possession of, such Bank without restrictions on the
disclosure thereof at the time such information is
supplied to such Bank by the Company or a Subsidiary
hereunder;
(iii) disclosure of information which is required
by applicable law or to a governmental agency having
supervisory authority over any party hereto;
(iv) disclosure of information in connection with
any suit, action or proceeding in connection with the
enforcement of rights hereunder or in connection with
the transaction contemplated hereby or thereby;
(v) disclosure to any bank (or other financial
institution) which may acquire a participation or other
interest in the Loans or rights of any Bank hereunder;
provided that such bank (or other financial
institution) agrees to maintain any such information to
be received in accordance with the provisions of this
Section 10.16;
(vi) disclosure by any party hereto to any other
party hereto or their counsel or agents;
(vii) disclosure by any party hereto to any
entity, or to any subsidiary of such an entity, which
owns, directly or indirectly, more than 50% of the
voting stock of such party, or to any subsidiary of
such an entity; or
(viii) disclosure of information that prior to
such disclosure has become public knowledge through no
violation of this Agreement.
SECTION 10.17. (Intentionally Left Blank.)
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
______________________________
Name: Robert M. Wohleber
Title: Vice President and
Treasurer
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: Robert M. Wohleber
Vice President and
Treasurer
Telex: 8109515386
Telephone: 504-582-1758
Telecopy: 504-582-4511
FREEPORT-McMoRan RESOURCE PARTNERS,
LIMITED PARTNERSHIP,
by FREEPORT McMoRan Inc.,
its Administrative Managing
General Partner,
by
______________________________
Name: Robert M. Wohleber
Title: Vice President and
Treasurer
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: Robert M. Wohleber
Vice President and
Treasurer
Telex: 8109515386
Telephone: 504-582-1758
Telecopy: 504-582-4511
CHEMICAL BANK, individually and as
Agent,
by
______________________________
Name: Mary Jo Woodford
Title: Vice President
Domestic Office and LIBOR Office
270 Park Avenue
New York, New York 10017
Attention: Mary Jo Woodford
Telephone: 212-270-8895
Telecopy: 212-270-4892
with copies to:
Attention: John Gehabe
Telephone: 212-270-3531
Telecopy: 212-270-3871
with copies to:
Agent Bank Services
140 East 45th Street
New York, New York 10017
Attention: Hilma Gabbidon
Telephone: 212-622-0693
Telex: 353006 ABSCNYK
Telecopy: 212-622-0002
FTX CREDIT AGREEMENT
ABN AMRO BANK N.V.,
by
_______________________________
Title: Group Vice President
by
_______________________________
Title: Assistant Vice President
Three Riverway - Suite 1600
Houston, TX 77056
Attention: David Wright
Assistant Vice President
Telephone: 713-964-3326
Telecopy: 713-629-7533
FTX CREDIT AGREEMENT
ARAB BANKING CORPORATION (B.S.C.),
by
_______________________________
Title: Vice President
245 Park Avenue
New York, NY 10167
Attention: Louise Weiss
Manager Credit
Administration
Telephone: 212-850-0600
Telecopy: 212-599-8385
With a copy of all correspondence to:
Arab Banking Corporation (B.S.C.)
600 Travis Street
Texas Commerce Tower - Suite 1900
Houston, TX 77002
Attention: Stephen A. Plauche
Vice President
Telephone: 713-227-8444
Telecopy: 713-227-6507
FTX CREDIT AGREEMENT
THE BANK OF NOVA SCOTIA,
by
______________________________
Title: Senior Assistant Agent
Atlanta Agency
600 Peachtree Street, N.E.
Suite 2700
Atlanta, GA 30308
Attention: F.C.H. Ashby
Senior Assistant Agent
Telephone: 404-877-1500
Telecopy: 404-888-8998
Copy to:
Houston Representative Office
1100 Louisiana Street
Suite 3000
Houston, TX 77002
Attention: Cynthia Deere
Representative
Telephone: 713-752-0900
Telecopy: 713-752-2425
FTX CREDIT AGREEMENT
BANK OF TOKYO TRUST COMPANY,
by
_____________________________
Title: Vice President
100 Broadway
New York, NY 10005
Attention: Victor Bulzacchelli
Vice President
Telephone: 212-766-3472
Telecopy: 212-349-7964
FTX CREDIT AGREEMENT
P.T. BANK RAKYAT INDONESIA (PERSERO),
NEW YORK AGENCY,
by
______________________________
Title: General Manager
______________________________
Title: Deputy General Manager
430 Park Avenue, 2nd Floor
New York, NY 10022
Attention: David Opdyke
Deputy General Manager
Telephone: 212-750-0222
Telecopy: 212-750-0648
FTX CREDIT AGREEMENT
BANQUE PARIBAS,
by
______________________________
Title:
1200 Smith Street
Two Allen Center, Suite 3100
Houston, TX 77002
Attention: Patrick Milon
Telephone: 713-659-4811
Telecopy: 713-659-3832
FTX CREDIT AGREEMENT
BARCLAYS BANK PLC,
by
______________________________
Title:
222 Broadway (11th Floor)
New York, NY 10038
Attention: Carol Cowan
Director
Dennis Ruggles
Associate Director
Telephone: 212-412-2956
212-412-2905
Telecopy: 212-412-7589
FTX CREDIT AGREEMENT
THE CHASE MANHATTAN BANK, N.A.,
by
________________________________
Name: Alexander S. Rapetski, II
Title: Vice President
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
FTX CREDIT AGREEMENT
CHRISTIANIA BANK,
by
_____________________________
Title:
by
_____________________________
Title:
11 West 42nd Street
(7th Floor)
New York, NY 10036
Attention: Jahn Roising
First Vice President
Telephone: 212-827-4837
Telecopy: 212-827-4888
FTX CREDIT AGREEMENT
COMMERZBANK AKTIENGESELLSCHAFT,
Atlanta Agency,
by
________________________________
Title: Vice President
by
________________________________
Title: Assistant Vice President
Domestic Lending Office:
Commerzbank AG, Atlanta Agency
Promenade 2
1230 Peachtree Street, N.E.
Suite 3500
Atlanta, GA 30309
Attention: Harry P. Yergey
Vice President
Telephone: 404-888-6500
Telecopy: 404-888-6539
Eurodollar Lending Office:
Commerzbank AG, Atlanta Agency/Grand
Cayman Branch
c/o Commerzbank AG, Atlanta Agency
FTX CREDIT AGREEMENT
DEUTSCHE BANK, A.G., New York Branch
and Cayman Island Branch,
by
______________________________
Title:
by
_______________________________
Title:
31 West Fifty-second Street
New York, NY 10019
Attention: Winfried Franke
Telephone: 212-474-8205
Telecopy: 212-474-8212
With a copy of all amendments and
waivers to:
31 West Fifty-second Street
New York, NY 10019
Attention: Sandra Bell
Vice President
Telephone: 212-474-8262
Telecopy: 212-474-8256
FTX CREDIT AGREEMENT
FIRST NATIONAL BANK OF COMMERCE,
by
______________________________
Title:
210 Baronne Street
New Orleans, Louisiana 70112
Attention: Keith Short
Assistant Vice President
Telephone: 504-561-1361
Telecopy: 504-561-7059
FTX CREDIT AGREEMENT
THE FUJI BANK, LIMITED,
by
______________________________
Title:
2 Houston Center, Suite 2800
909 Fannin Street
Houston, Texas 77010
Attention: William W. Brown
Assistant Vice President
Telephone: 713-759-1800
Telecopy: 713-759-0048
FTX CREDIT AGREEMENT
THE INDUSTRIAL BANK OF JAPAN, LTD.,
NEW YORK BRANCH
by
________________________________
Title: Senior Vice President
245 Park Avenue (23rd Floor)
New York, NY 10167
Attention: John Dippo
Vice President
Telephone: 212-309-6689
Telecopy: 212-557-3851
With a copy of all correspondence to:
333 Clay Street, Suite 4850
Houston, Texas 77002
Attention: David M. Fox, II
Assistant Vice President
Telephone: 713-651-9444
Telecopy: 713-651-9209
FTX CREDIT AGREEMENT
LTCB TRUST COMPANY,
by
______________________________
Title: Senior Vice President
165 Broadway, 49th Floor
New York, NY 10006
Attention: D. Ryan Tyler
Assistant Vice President
Telephone: 212-335-4561
Telecopy: 212-608-2371
FTX CREDIT AGREEMENT
MELLON BANK, N.A.,
by
________________________________
Title: Vice President
1100 Louisiana Street, Suite 3600
Houston, Texas 77002
Attention: E. Marc Cuenod, Jr.
Vice President
Telephone: 713-650-6066
Telecopy: 713-650-3409
FTX CREDIT AGREEMENT
THE MITSUI TRUST AND BANKING COMPANY,
LIMITED, New York Branch,
by
_______________________________
Title:
One World Financial Center
200 Liberty Street
New York, NY 10281
Attention: Dan Ward
Assistant Treasurer
Telephone: 212-341-0419
Telecopy: 212-945-4170
FTX CREDIT AGREEMENT
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK,
by
________________________________
Title:
60 Wall Street
New York, NY 10260
Attention: Philip McNeal
Vice President
Telephone: 212-648-7181
Telecopy: 212-837-5003
FTX CREDIT AGREEMENT
NBD BANK, N.A.,
by
______________________________
Title:
611 Woodward Avenue
Detroit, MI 19891
Attention: Douglas Liftman
Second Vice President
Energy Group
Telephone: (313) 225-1000
Telecopy: (313) 225-2649
FTX CREDIT AGREEMENT
N.M. ROTHSCHILD & SONS LIMITED,
by
______________________________
Title:
______________________________
Title:
New Court
St. Swithin's Lane
London, ENGLAND EC4 PP4DU
Attention: Michael Price
Assistant Director
Telephone: 011-44-71-280-5191
Telecopy: 011-44-71-280-5139
FTX CREDIT AGREEMENT
SOCIETE GENERALE, Southwest Agency,
by
_______________________________
Title:
1111 Bagby Street, Suite 2020
Houston, Texas 77002
Attention: Mark A. Cox,
Vice President
Telephone: 713-759-6315
Telecopy: 713-650-0824
With a copy of all correspondence to:
Brace, Well & Patterson
2900 South Tower
Pennzoil Place
Houston, Texas 77002
Attention: Mark Evans, Esq.
Telephone: 713-223-2900
Telecopy: 713-221-1212
FTX CREDIT AGREEMENT
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
New York and Cayman Islands Branches,
by
_______________________________
Title:
_______________________________
Title:
1211 Avenue of the Americas
New York, NY 10036
Attention: Robert Carino
Associate
Telephone: 212-852-6217
Telecopy: 212-852-6037
FTX CREDIT AGREEMENT
NATIONAL WESTMINSTER BANK PLC,
by
________________________________
Title:
175 Water Street (29th Floor)
New York, NY 10038
Attention: Thomas S. Olzenski
Senior Vice President
Telephone: 212-602-4322
Telecopy: 212-602-4402
FTX CREDIT AGREEMENT
YASUDA TRUST AND BANKING COMPANY,
LIMITED,
by
________________________________
Title: Vice President
One World Trade Center
Suite 8871
New York, NY 10048
Attention: Neil Chau
Vice President
Telephone: 212-432-2300
Telecopy: 212-432-0289
Exhibit 4.9
EXECUTION COPY
FIRST AMENDMENT dated as of February 2, 1994 (this
"Amendment"), to the Amended and Restated Credit
Agreement dated as of June 1, 1993 (the "Credit
Agreement"), among FREEPORT-McMoRan INC., a Delaware
corporation ("FTX"), FREEPORT-McMoRan RESOURCE
PARTNERS, LIMITED PARTNERSHIP, a Delaware limited
partnership ("FRP"), the undersigned banks
(collectively, the "Banks") and CHEMICAL BANK, a New
York banking corporation, as agent for the Banks (in
such capacity, the "Agent"). Capitalized terms used
herein and not otherwise defined herein shall have the
meanings given such terms in the Credit Agreement.
WHEREAS, FTX, FRP, the Required Banks and the Agent have agreed
that certain provisions of the Credit Agreement be amended in order that
FRP may issue up to $150,000,000 aggregate principal amount of its Senior
Subordinated Notes due 2004 (the "Securities"), as more particularly
described in the Term Sheet relating to the Securities (the "Term Sheet")
attached hereto as Exhibit A, which FRP has provided to the Banks.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, FTX, FRP, the Agent
and the Required Banks hereby agree, on the terms and subject to the
conditions set forth herein, as follows:
SECTION 1. Approval of Form of the Securities. The Required
Banks hereby approve the form of subordination provisions of the Securities
attached hereto as Exhibit B and the other terms and conditions of the
Securities as set forth in the Term Sheet and agree that FRP may, upon the
effectiveness of this Amendment, issue the Securities with subordination
provisions in the form of Exhibit B hereto and otherwise on the terms set
forth in Exhibit A hereto.
SECTION 2. Amendments to the Credit Agreement. (a) Section 1.1
of the Credit Agreement is hereby amended by deleting clause (ii) in the
definition of "Equity Payment" and substituting a new clause (ii) as
follows:
"(ii) open market purchases by the Company or any Restricted
Subsidiary of Depository Units of FRP or purchases or acquisitions,
directly or indirectly, of any FRP Notes"
(b) Section 1.1 of the Credit Agreement is hereby amended by
adding the following definition:
"'FRP Notes' has the meaning assigned to such term in Section
5.2(g)(i)(G)."
(c) Section 2.2 of the Credit Agreement is hereby amended by
adding a new clause (VI) as follows and renumbering the existing clause
"(VI)" as "(VII)":
", (VI) FTX, FRP or any Restricted Subsidiary shall determine
to, or shall be required to make, any optional or mandatory
prepayment, acquisition, repurchase or defeasance of the FRP
Notes"
and Section 2.4 of the Credit Agreement is hereby amended by changing the
reference to "clause (VI)" of Section 2.2 to "clause (VII)" thereof.
(d) Section 2.6 of the Credit Agreement is hereby amended by the
addition of the following at the end thereof:
"If a Borrowing Base redetermination shall occur pursuant to
clause (VI) of Section 2.2 because a 'Change in Control' (as
defined in the indenture for the FRP Notes) has occurred which
would require any offer to repurchase or redeem the FRP Notes or
would permit the holders of the FRP Notes to require the FRP
Notes to be prepaid, redeemed or repurchased, FTX and FRP
acknowledge and agree that in making such redetermination of the
Borrowing Base, the Banks may take into account such factors
relating to the Change of Control as they shall, in their sole
and unreviewable discretion, determine to be relevant or
appropriate, including without limitation any perceived or prior
lack of creditworthiness of the entity to result after such
Change in Control, discounts to the value, timing or liklihood of
realization of assets of FRP, FTX and their Subsidiaries or any
other risks, whether or not similar to the foregoing. FTX and
FRP irrevocably and unconditionally agree that they shall not
contest or dispute any such redetermination of the Borrowing Base
under any circumstance or claim whatsoever."
(e) Section 5.1(a)(5) is hereby amended by the addition of the
following at the end thereof;
", and 15 days prior written notice of any event referred to in
Section 2.2(VI), specifying the event in question in reasonable
detail"
(f) Section 5.2(c) of the Credit Agreement is hereby amended by
adding a new sentence to the end thereof as follows:
"Notwithstanding the foregoing, FTX and FRP shall not permit any
Restricted Subsidiary which is not FRP or Subsidiary of FRP as of
January 1, 1994 (a "Non-FRP Subsidiary"), to merge or liquidate
into or consolidate with FRP or any Subsidiary of FRP or to sell,
lease, transfer or otherwise dispose of all or any significant
percentage of the assets of any such Non-FRP Subsidiary to FRP or
any of FRP's Subsidiaries nor shall FTX or FRP otherwise permit
any Non-FRP Subsidiary to become a Subsidiary of FRP; provided
that FRP and its Subsidiaries may create or acquire new
Subsidiaries to the extent otherwise permitted hereby so long as
such Subsidiaries were not previously Non-FRP Subsidiaries."
(g) Section 5.2(g)(i) of the Credit Agreement is hereby amended
by deleting the word "and" at the end of clause (E), by substituting ";
and" for the period at the end of clause (F) and by adding the following
new clause (G) as follows:
"(G) $150,000,000 of aggregate principal amounts of FRP's Senior
Subordinated Notes due 2004 (the 'FRP Notes')."
(h) Section 5.2 of the Credit Agreement is hereby amended by the
addition of a new paragraph (t) as follows:
"(t) FRP Notes. The FRP Obligations (as defined in Section 9.1)
shall not cease to be at all times 'Senior Debt' as such term is
used in the indenture for the FRP Notes and that FRP will not
amend, waive or modify any provision of such indenture or of the
FRP Notes without the prior written consent of the Required
Banks. Without limitation of the foregoing, none of FTX, FRP or
any Restricted Subsidiary shall, directly or indirectly, make any
optional or mandatory prepayment, acquisition, repurchase or
defeasance of the FRP Notes if after any Borrowing Base
redetermination pursuant to Section 2.2(VI), the Company would be
out of compliance with Sections 3.2 and/or 5.2(b) after giving
effect to such prepayment, acquisition, repurchase or
defeasance."
(i) Section 5.3 of the Credit Agreement is hereby amended by
adding the following to the end of the first sentence thereof:
", including the provisions of Section 5.2(r) and (t)."
SECTION 3. Conditions to Effectiveness. This Amendment shall
become effective on the date of receipt (the "Effective Date") by the Agent
of executed counterparts of this Amendment which, when taken together, bear
the signatures of the FTX, FRP, the Agent and the Required Banks.
SECTION 4. Counterparts. This Amendment may be executed in
multiple counterparts, each of which shall constitute an original, but all
of which when taken together shall constitute but one instrument.
SECTION 5. Limited Effect. Sections 1 and 2 hereof constitute a
modification and amendment of the Credit Agreement effective as of the
Effective Date. Except as, and until, expressly waived or modified by such
Sections 1 and 2 hereof as of the Effective Date, the Credit Agreement
shall continue in full force and effect in accordance with the provisions
thereof as in effect immediately prior to the Effective Date. Except as
expressly set forth herein, this Amendment shall not by implication or
otherwise limit, impair, constitute a waiver of or otherwise affect the
rights and remedies of the Banks, the FI Trustee and the Agent under the
Credit Agreement, nor alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement, all of which are ratified and affirmed in all respects
and shall continue in full force and effect. This Amendment shall apply
and be effective only with respect to the provisions of the Credit
Agreement specifically referred to herein.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Expenses. FRP and FTX jointly and severally shall
pay all out-of-pocket expenses incurred by the Agent in connection with the
preparation of this Amendment, including, but not limited to, the
reasonable fees and disbursements of Cravath, Swaine & Moore, special
counsel for the Agent.
SECTION 8. Headings. The headings of this Amendment are for
reference only and shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their duly authorized officers or agents as of the date
first above written.
FREEPORT-McMoRan INC.,
by
____________________________
Name:
Title:
FREEPORT-McMoRan RESOURCE PARTNERS,
LIMITED PARTNERSHIP,
by FREEPORT McMoRan INC., its
Administrative Managing
General Partner,
by
___________________________
Name:
Title:
CHEMICAL BANK, individually and as
Agent,
by
____________________________
Name:
Title:
ABN AMRO BANK, N.V.,
by
____________________________
Name:
Title:
____________________________
Name:
Title:
ARAB BANKING CORPORATION, (B.S.C.),
by
_____________________________
Name:
Title:
THE BANK OF NOVA SCOTIA,
by
_____________________________
Name:
Title:
BANQUE PARIBAS,
by
_____________________________
Name:
Title:
BARCLAYS BANK PLC,
by
_____________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.,
by
_____________________________
Name:
Title:
CHRISTIANA BANK,
by
_____________________________
Name:
Title:
_____________________________
Name:
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
DEUTSCHE BANK AG, New York Branch
and/or Cayman Islands Branch,
by
_____________________________
Name:
Title:
_____________________________
Name:
Title:
FIRST NATIONAL BANK OF COMMERCE,
by
_____________________________
Name:
Title:
THE FUJI BANK, LIMITED,
by
_____________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LTD.,
New York Branch,
by
_____________________________
Name:
Title:
LTCB TRUST COMPANY,
by
_____________________________
Name:
Title:
MELLON BANK, N.A.,
by
_____________________________
Name:
Title:
THE MITSUI TRUST AND BANKING
COMPANY, LIMITED, New York Branch,
by
_____________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK,
by
_____________________________
Name:
Title:
NATIONAL WESTMINSTER BANK PLC,
by
_____________________________
Name:
Title:
NBD BANK, N.A.,
by
_____________________________
Name:
Title:
N.M. ROTHSCHILD & SONS LIMITED,
by
_____________________________
Name:
Title:
P.T. BANK RAKYAT INDONESIA
(PERSERO),
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
BANK OF TOKYO TRUST COMPANY,
by
_____________________________
Name:
Title:
SOCIETE GENERALE,
by
_____________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, New York and Cayman
Islands Branches,
by
_____________________________
Name:
Title:
_____________________________
Name:
Title:
YASUDA TRUST AND BANKING COMPANY,
LIMITED,
by
_____________________________
Name:
Title:
Exhibit 4.10
SECOND AMENDMENT dated as of March 1,
1994 (this "Amendment"), to the Amended and
Restated Credit Agreement dated as of June 1,
1993 (as amended by the First Amendment dated
as of February 2, 1994, the "Credit
Agreement"), among FREEPORT-McMoRan INC., a
Delaware corporation ("FTX"), FREEPORT-
McMoRan RESOURCE PARTNERS, LIMITED
PARTNERSHIP, a Delaware limited partnership
("FRP"), the undersigned banks (collectively,
the "Banks") and CHEMICAL BANK, a New York
banking corporation, as agent for the Banks
(in such capacity, the "Agent"). Capitalized
terms used herein and not otherwise defined
herein shall have the meanings given such
terms in the Credit Agreement.
WHEREAS, FTX, FRP, the Required Banks and the
Agent have agreed that certain provisions of the Credit
Agreement be amended in order that P.T. ALatieF Freeport
Finance Company B.V., a corporation organized under the laws
of The Netherlands ("ALatieF B.V.") which is a wholly owned
subsidiary of FCX, may issue up to $180,000,000 aggregate
principal amount of its Senior Notes due 2001 to be
guaranteed by FCX (the "Securities"), as more particularly
described in the Registration Statement on Form S-3 relating
to the Securities (the "Registration Statement") attached
hereto as Exhibit A, which FCX has provided to the Banks.
Any proceeds of issuance of the Securities in excess of
$120,000,000 will be applied to prepay loans under the
Chase-ALatieF Agreement referred to in Section 2(j) hereof.
NOW, THEREFORE, in consideration of the premises
and the agreements, provisions and covenants herein
contained, FTX, FRP, the Agent and the Required Banks hereby
agree, on the terms and subject to the conditions set forth
herein, as follows:
SECTION 1. Approval of Form of the Securities.
The Required Banks hereby approve the terms and conditions
of the Securities, the Underlying Notes (as defined in the
Registration Statement) and the PT-FI Note (as defined in
the Registration Statement) as set forth in the Registration
Statement and agree that, subject to approval by the Agent
of the indenture relating to the Securities and the forms of
the Underlying Notes and the PT-FI Note as being in
accordance with the terms for the Securities set forth in
the Registration Statement, upon the effectiveness of this
Amendment, (a) ALatieF B.V. may issue the Securities,
(b) ALatieF B.V. may loan the proceeds of the Securities to
FI pursuant to the PT-FI Note and (c) FCX may guarantee the
Securities, in each case on the terms set forth in the
Registration Statement. FTX and FRP agree that ALatieF B.V.
shall be a Restricted Subsidiary for all purposes under the
Credit Agreement and the FI Credit Agreement.
SECTION 2. Amendments to the Credit Agreement;
Consent. (a) Section 1.1 of the Credit Agreement is
hereby amended by renumbering the existing clause (iii) in
the definition of "Equity Payment" as clause (iv), and
inserting immediately after clause (ii), a new clause (iii)
as follows:
", (iii) purchases or acquisitions, directly or
indirectly, of any B.V. Notes except to the extent made
with cash of, or proceeds of dispositions of assets
owned by, ALatieF-FI and/or any Infrastructure
Affiliate (as defined in the Registration Statement on
Form S-3 (the "B.V. Registration Statement") relating
to the B.V. Notes), and"
(b) Section 1.1 of the Credit Agreement is hereby
amended by adding the following definition:
"'B.V. Notes' has the meaning assigned to such term in
Section 5.2(g)(i)(H)."
(c) Section 2.2 of the Credit Agreement is hereby
amended by adding a new clause (VII) as follows and
renumbering the existing clause "(VII)" as "(VIII)":
", (VII) FTX, FCX or any Restricted Subsidiary
shall determine to, or shall be required to make,
any optional or mandatory prepayment, acquisition,
repurchase or defeasance of the B.V. Notes"
(d) Section 2.4 of the Credit Agreement is hereby
amended by substituting the following for the words "or
(VII)" appearing therein:
", (VI) (but only so long as no optional or
mandatory prepayment, acquisition, repurchase or
defeasance of the FRP Notes shall occur or be
committed to on a binding basis), (VII) (but only
so long as no optional or mandatory prepayment,
acquisition, repurchase or defeasance of the B.V.
Notes shall occur or be committed to on a binding
basis) or (VIII)"
(e) Section 2.6 of the Credit Agreement is hereby
amended by the replacement of the last two sentences
thereof, as modified by the First Amendment to the Credit
Agreement, with the following:
"If a Borrowing Base redetermination shall occur
pursuant to clause (VI) or clause (VII) of
Section 2.2 because a 'Change in Control' (as
defined in the indenture for the FRP Notes) or a
'Repurchase Event' (as defined in the indenture
for the B.V. Notes) has occurred which would
require any offer to repurchase or redeem the FRP
Notes or B.V. Notes, or would permit the holders
of the FRP Notes or B.V. Notes to require the FRP
Notes or B.V. Notes, as applicable, to be prepaid,
redeemed or repurchased, FTX and FRP acknowledge
and agree that in making such redetermination of
the Borrowing Base, the Banks may take into
account such factors relating to the Change of
Control or Repurchase Event as they shall, in
their sole and unreviewable discretion, determine
to be relevant or appropriate, including without
limitation any perceived or prior lack of
creditworthiness of the entity to result after
such Change in Control or Repurchase Event,
discounts to the value, timing or likelihood of
realization of assets of FRP, FTX and their
Subsidiaries or any other risks, whether or not
similar to the foregoing. FTX and FRP irrevocably
and unconditionally agree that they shall not
contest or dispute any such redetermination of the
Borrowing Base under any circumstance or claim
whatsoever."
(f) Section 5.1(a)(5) of the Credit Agreement is
hereby amended by the insertion of "or (VII)" immediately
after the reference to "Section 2.2(VI)", as incorporated by
the First Amendment to the Credit Agreement.
(g) Section 5.2(c) of the Credit Agreement is
hereby amended by adding a new sentence to the end thereof
as follows:
"Notwithstanding the foregoing, FTX and FCX shall
not permit any Restricted Subsidiary which is not
FI or a direct or indirect Subsidiary of FCX as of
January 1, 1994 (a "Non-FCX Subsidiary"), to merge
or liquidate into or consolidate with FCX, FI or
any Subsidiary of FCX or to sell, lease, transfer
or otherwise dispose of all or any significant
percentage of the assets of any such Non-FCX
Subsidiary to FCX, FI or any of FCX's Subsidiaries
nor shall FTX, FCX or FI otherwise permit any Non-
FCX Subsidiary to become a Subsidiary of FCX;
provided that FCX and its Subsidiaries may create
or acquire new Subsidiaries to the extent
otherwise permitted hereby so long as such
Subsidiaries were not previously Non-FCX
Subsidiaries."
(h) Section 5.2(g)(i) of the Credit Agreement is
hereby amended by deleting the word "and" at the end of
clause (F), by substituting "; and" for the period at the
end of clause (G) and by adding the following new clause (H)
as follows:
"(H) ($180,000,000) of aggregate principal amount
of P.T. ALatieF Freeport Finance Company B.V.'s
Senior Notes due 2001 (the 'B.V. Notes'), the
Guarantee by FCX of the B.V. Notes and the PT-FI
Note (as defined in the B.V. Registration
Statement)."
(i) Section 5.2(o) of the Credit Agreement is
hereby amended by substituting a "," for the word "and"
prior to clause (ix) thereof and inserting the following as
a new clause (x):
"and (x) the advance by P.T. ALatieF Freeport
Finance Company B.V. of the proceeds of the B.V.
Notes to FI on the terms of the PT-FI Note (as
defined in the B.V. Registration Statement)"
(j) Section 5.2 of the Credit Agreement is hereby
amended by the addition of new paragraphs (u), (v), (w) and
(x) as follows:
"(u) B.V. Notes. None of FTX, FCX, FRP or any
Restricted Subsidiary shall, directly or
indirectly, make any optional or mandatory
prepayment, acquisition, repurchase or defeasance
of the B.V. Notes if after any Borrowing Base
redetermination pursuant to Section 2.2(VII), the
Company would be out of compliance with
Sections 3.2 and/or 5.2(b) after giving effect to
such prepayment, acquisition, repurchase or
defeasance.
(v) Chase Borrowings. After the date of issuance
of the B.V. Notes, FTX and FI shall not permit the
aggregate principal amount of outstanding
borrowings under the Credit Agreement dated as of
December 15, 1993, among ALatief-FI, The Chase
Manhattan Bank (National Association), as agent,
and certain banks party thereto (the "Chase-
ALatieF Agreement"), to exceed (x) $60,000,000
minus (y) the initial proceeds of the B.V. Notes
in excess of $120,000,000, nor shall FTX and FI
permit ALatief-FI or any Infrastructure Affiliate
(as defined in the B.V. Registration Statement) to
grant any additional security or collateral,
unless the Banks shall have the right, upon
compliance with the requirements of the related
Master Services Agreement (as defined in the B.V.
Registration Statement) or such other similar
document, to have continued use of the facilities
with respect to which such additional security or
collateral is granted, to secure any indebtedness
or other obligations under the Chase-ALatieF
Agreement (other than as required thereunder with
respect to substitution or replacement of existing
collateral); provided, however, that this
paragraph (v) shall not be deemed to prevent FI or
ALatief-FI from complying with the requirements of
Section 8.23(b) of the Chase-ALatieF Agreement, so
long as assets so transferred continue to be
subject to any Master Services Agreement (as
defined in the B.V. Registration Statement) or
such other similar agreement in a form approved by
the Agent.
(w) Service Contract Amendments. FTX, FCX and FI
shall not enter into, or permit, without the prior
written consent of the Agent, any amendment or
modification to any Master Services Agreement (as
defined in the B.V. Registration Statement) or any
other similar agreement relating to FI's rights to
use any asset referred to in Section 8.1(i)(B)(ii)
or (iii) of the FI Credit Agreement, which would,
in any manner, materially adversely affect the
Banks or the ability of FI to comply with the
provisions of the FI Credit Agreement, including
without limitation, the right of the Banks, upon
compliance with the requirements of the Master
Services Agreement or such other agreement, to
have continued use of any facilities comprising
the Enhanced Infrastructure Project (as defined in
the B.V. Registration Statement) or any other
asset referred to in Section 8.1(i)(B)(ii) or
(iii) of the FI Credit Agreement after any Default
by FI; provided, however, that with respect to any
such agreement, the consent required by this
Section 5.2(w) shall be deemed to have been
granted if such agreement is substantially in the
approved form heretofore entered into in
connection with the ALatief-FI Transfer. FTX, FCX
and FI shall promptly notify the Agent of any
proposed amendment or modification contemplated by
this Section 5.2(w).
(x) Joint Venture Agreements. FTX, FCX and FI
shall not enter into, or permit, without the prior
written consent of the Agent, any joint venture
agreement, or amendment thereto, for any entity,
including any Infrastructure Affiliate (as defined
in the B.V. Registration Statement) (other than
ALatief-FI), receiving infrastructure assets
related to the Enhanced Infrastructure Project (as
defined in the B.V. Registration Statement) or any
other asset referred to in Section 8.1(i)(B)(ii)
or (iii) of the FI Credit Agreement; provided,
however, that with respect to any such agreement,
the consent required by this Section 5.2(x) shall
be deemed to have been granted if such agreement
is substantially in the approved form of the
ALatief-FI Joint Venture Agreement."
SECTION 3. Conditions to Effectiveness. This
Amendment shall become effective on the date of receipt (the
"Effective Date") by the Agent of executed counterparts of
this Consent which, when taken together, bear the signatures
of FTX, FRP, the Agent and the Required Banks.
SECTION 4. Counterparts. This Amendment may be
executed in multiple counterparts, each of which shall
constitute an original, but all of which when taken together
shall constitute but one instrument.
SECTION 5. Limited Effect. Sections 1 and 2
hereof constitute a modification and amendment of the Credit
Agreement effective as of the Effective Date. Except as,
and until, expressly waived or modified by such Sections 1
and 2 hereof as of the Effective Date, the Credit Agreement
shall continue in full force and effect in accordance with
the provisions thereof as in effect immediately prior to the
Effective Date. Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit,
impair, constitute a waiver of or otherwise affect the
rights and remedies of the Banks and the Agent under the
Credit Agreement, nor alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants
or agreements contained in the Credit Agreement, all of
which are ratified and affirmed in all respects and shall
continue in full force and effect. This Amendment shall
apply and be effective only with respect to the provisions
of the Credit Agreement specifically referred to herein.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
SECTION 7. Expenses. FTX shall pay all out-of-
pocket expenses incurred by the Agent in connection with the
preparation of this Amendment, including, but not limited
to, the reasonable fees and disbursements of Cravath,
Swaine & Moore, special counsel for the Agent.
SECTION 8. Headings. The headings of this
Amendment are for reference only and shall not limit or
otherwise affect the meaning hereof.
SECTION 9. ALatieF B.V. Consent. By its
signature below, ALatieF B.V., although not a party to the
Credit Agreement, hereby consents and agrees to the
provisions set forth herein and agrees to comply with the
provisions herein applicable to it.
IN WITNESS WHEREOF, the parties hereto have caused
this Consent to be executed by their duly authorized
officers or agents as of the date first above written.
P.T. FREEPORT INDONESIA
COMPANY,
by
___________________________
Name:
Title:
FREEPORT-McMoRan INC.,
by
____________________________
Name:
Title:
FREEPORT-McMoRan COPPER & GOLD
INC.,
by
___________________________
Name:
Title:
CHEMICAL BANK, individually and as
Agent,
by
____________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK (for purposes of Article
VIII only), as FI Trustee,
by
____________________________
Name:
Title:
ABN AMRO BANK, N.V.,
by
____________________________
Name:
Title:
by
____________________________
Name:
Title:
ARAB BANKING CORPORATION, (B.S.C.),
by
_____________________________
Name:
Title:
THE BANK OF NOVA SCOTIA,
by
_____________________________
Name:
Title:
BANK OF TOKYO TRUST COMPANY,
by
_____________________________
Name:
Title:
BANQUE PARIBAS,
_____________________________
Name:
Title:
BARCLAYS BANK PLC,
by
_____________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.,
by
_____________________________
Name:
Title:
CHRISTIANIA BANK,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
DEUTSCHE BANK AG, New York Branch
and/or Cayman Islands Branch,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
FIRST NATIONAL BANK OF COMMERCE,
by
_____________________________
Name:
Title:
THE FUJI BANK, LIMITED,
by
_____________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LTD.,
New York Branch,
by
_____________________________
Name:
Title:
LTCB TRUST COMPANY,
by
_____________________________
Name:
Title:
MELLON BANK, N.A.,
by
_____________________________
Name:
Title:
THE MITSUI TRUST AND BANKING
COMPANY, LIMITED, New York Branch,
by
_____________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK,
by
_____________________________
Name:
Title:
NATIONAL WESTMINSTER BANK PLC,
by
_____________________________
Name:
Title:
NBD BANK, N.A.,
by
_____________________________
Name:
Title:
N.M. ROTHSCHILD & SONS LIMITED,
by
_____________________________
Name:
Title:
P.T. BANK RAKYAT INDONESIA
(PERSERO),
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
SOCIETE GENERALE,
by
_____________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, New York and Cayman
Islands Branches,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
YASUDA TRUST AND BANKING COMPANY,
LIMITED,
by
_____________________________
Name:
Title:
P.T. ALATIEF FREEPORT
FINANCE COMPANY B.V.
(for purposes of
Section 9 hereof only),
by
_____________________________
Name:
Title:
Exhibit 4.11
========================================================
FREEPORT-McMoRan RESOURCE PARTNERS,
LIMITED PARTNERSHIP
AND
MANUFACTURERS HANOVER TRUST COMPANY, Trustee
Subordinated Indenture
Dated as of October 26, 1990
----------
========================================================
TABLE OF CONTENTS
----------
Page
----
PARTIES.............................................. 1
RECITALS
Authorization of Indenture...................... 1
Compliance with Legal Requirements.............. 1
Purpose of and Consideration for Indenture...... 1
ARTICLE ONE
DEFINITIONS
SECTION 1.1. Certain Terms Defined................. 1
Authenticating Agent.................. 2
Authorized Newspaper.................. 2
Board of Directors.................... 2
Board Resolution...................... 2
Business Day.......................... 2
Commission............................ 3
Composite Rate........................ 3
Corporate Trust Office................ 3
Coupon................................ 3
covenant defeasance................... 3
Depositary............................ 3
Dollar................................ 4
ECU................................... 4
Event of Default...................... 4
Foreign Currency...................... 4
Holder, Holder of Securities,
Securityholder...................... 4
Indebtedness.......................... 4
Indenture............................. 4
Interest.............................. 4
Issuer................................ 4
Issuer Order.......................... 4
Judgment Currency..................... 5
Officer's Certificate................. 5
Opinion of Counsel.................... 5
Original issue date................... 5
Original Issue Discount Security...... 5
Outstanding........................... 5
Periodic Offering..................... 6
Person................................ 6
principal............................. 7
record date........................... 7
Registered Global Security............ 7
Registered Security................... 7
Required Currency..................... 7
Responsible Officer................... 7
Security or Securities................ 7
Senior Indebtedness................... 7
Trust Indenture Act of 1939........... 8
Trustee............................... 8
Unregistered Security................. 8
U.S. Government Obligations........... 8
Yield to Maturity..................... 8
ARTICLE TWO
SECURITIES
SECTION 2.1. Forms Generally....................... 8
SECTION 2.2. Form of Trustee's Certificate
of Authentication................... 9
SECTION 2.3. Amount Unlimited; Issuable in Series.. 10
SECTION 2.4. Authentication and Delivery of
Securities.......................... 12
SECTION 2.5. Execution of Securities............... 17
SECTION 2.6. Certificate of Authentication......... 18
SECTION 2.7. Denomination and Date of
Securities; Payments of Interest.... 18
SECTION 2.8. Registration, Transfer and Exchange... 19
SECTION 2.9. Mutilated, Defaced, Destroyed, Lost
and Stolen Securities............... 24
SECTION 2.10. Cancellation of Securities;
Disposition Thereof................. 25
SECTION 2.11. Temporary Securities.................. 26
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1. Payment of Principal and Interest..... 27
SECTION 3.2. Offices for Payments, etc............. 27
SECTION 3.3. Appointment to Fill a Vacancy in
Office of Trustee................... 29
SECTION 3.4. Paying Agents......................... 29
SECTION 3.5. Written Statement to Trustee.......... 30
SECTION 3.6. Luxembourg Publications............... 30
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1. Issuer to Furnish Trustee Information
as to Names and Addresses of
Securityholders..................... 31
SECTION 4.2. Preservation and Disclosure of
Securityholders Lists............... 31
SECTION 4.3. Reports by the Issuer................. 33
SECTION 4.4. Reports by the Trustee................ 34
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1. Event of Default Defined; Acceleration
of Maturity; Waiver of Default...... 36
SECTION 5.2. Collection of Indebtedness by Trustee;
Trustee May Prove Debt.............. 39
SECTION 5.3. Application of Proceeds............... 42
SECTION 5.4. Suits for Enforcement................. 44
SECTION 5.5. Restoration of Rights on Abandonment
of Proceedings...................... 44
SECTION 5.6. Limitations on Suits by
Securityholders..................... 44
SECTION 5.7. Unconditional Right of
Securityholders to Institute
Certain Suits....................... 45
SECTION 5.8. Powers and Remedies Cumulative;
Delay or Omission Not Waiver of
Default............................. 45
SECTION 5.9. Control by Holders of Securities...... 46
SECTION 5.10. Waiver of Past Defaults............... 46
SECTION 5.11. Trustee to Give Notice of Default,
But May Withhold in Certain
Circumstances....................... 47
SECTION 5.12. Right of Court to Require Filing
of Undertaking to Pay Costs......... 48
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1. Duties and Responsibilities of the
Trustee; During Default; Prior to
Default............................. 48
SECTION 6.2. Certain Rights of the Trustee......... 50
SECTION 6.3. Trustee Not Responsible for Recitals,
Disposition of Securities or
Application of Proceeds Thereof..... 51
SECTION 6.4. Trustee and Agents May Hold
Securities or Coupons;
Collections, etc.................... 52
SECTION 6.5. Moneys Held by Trustee................ 52
SECTION 6.6. Compensation and Indemnification
of Trustee and Its Prior Claim...... 52
SECTION 6.7. Right of Trustee to Rely on
Officer's Certificate, etc.......... 53
SECTION 6.8. Qualification of Trustee;
Conflicting Interests............... 53
SECTION 6.9. Persons Eligible for Appointment
as Trustee.......................... 61
SECTION 6.10. Resignation and Removal; Appointment
of Successor Trustee................ 61
SECTION 6.11. Acceptance of Appointment by
Successor Trustee................... 63
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business of Trustee... 65
SECTION 6.13. Preferential Collection of Claims
Against the Issuer.................. 65
SECTION 6.14. Appointment of Authenticating Agent... 70
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1. Evidence of Action Taken by
Securityholders..................... 72
SECTION 7.2. Proof of Execution of Instruments and
of Holding of Securities............ 72
SECTION 7.3. Holders to be Treated as Owners....... 73
SECTION 7.4. Securities Owned by Issuer Deemed Not
Outstanding......................... 74
SECTION 7.5. Right of Revocation of Action Taken... 75
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without
Consent of Securityholders.......... 75
SECTION 8.2. Supplemental Indentures With Consent
of Securityholders.................. 77
SECTION 8.3. Effect of Supplemental Indenture...... 79
SECTION 8.4. Documents to Be Given to Trustee...... 79
SECTION 8.5. Notation on Securities in Respect of
Supplemental Indentures............. 80
SECTION 8.6. Subordination Unimpaired.............. 80
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1. Covenant Not to Merge, Consolidate,
Sell or Convey Property Except
Under Certain Conditions............ 80
SECTION 9.2. Successor Corporation Substituted..... 81
SECTION 9.3. Opinion of Counsel Delivered
to Trustee.......................... 81
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1. Satisfaction and Discharge of
Indenture........................... 82
SECTION 10.2. Application by Trustee of Funds
Deposited for Payment of Securities. 85
SECTION 10.3. Repayment of Moneys Held by Paying
Agent............................... 85
SECTION 10.4. Return of Moneys Held By Trustee and
Paying Agent Unclaimed for Two
Years............................... 86
SECTION 10.5. Indemnity For U.S. Government
Obligations......................... 86
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1. Limited Partners, General Partners,
Incorporators, Stockholders, Officers
and Directors of Issuer Exempt from
Individual Liability................ 87
SECTION 11.2. Provisions of Indenture for the Sole
Benefit of Parties and Holders of
Securities and Coupons.............. 87
SECTION 11.3. Successors and Assigns of Issuer
Bound by Indenture.................. 87
SECTION 11.4. Notices and Demands on Issuer,
Trustee and Holders of Securities
and Coupons......................... 88
SECTION 11.5. Officer's Certificates and Opinions
of Counsel; Statements to Be Con-
tained Therein...................... 89
SECTION 11.6. Payments Due on Saturdays, Sundays
and Holidays........................ 90
SECTION 11.7. Conflict of Any Provision of
Indenture with Trust Indenture
Act of 1939......................... 90
SECTION 11.8. New York Law to Govern................ 91
SECTION 11.9. Counterparts.......................... 91
SECTION 11.10. Effect of Headings.................... 91
SECTION 11.11. Securities in a Foreign Currency
or in ECU........................... 91
SECTION 11.12. Judgment Currency..................... 92
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1. Applicability of Article.............. 93
SECTION 12.2. Notice of Redemption; Partial
Redemptions......................... 93
SECTION 12.3. Payment of Securities Called for
Redemption.......................... 95
SECTION 12.4. Exclusion of Certain Securities from
Eligibility for Selection for
Redemption.......................... 97
SECTION 12.5. Mandatory and Optional Sinking
Funds............................... 97
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1. Securities and Coupons Subordinated
to Senior Indebtedness.............. 101
SECTION 13.2. Disputes with Holders of Certain
Senior Indebtedness................. 103
SECTION 13.3. Subrogation........................... 103
SECTION 13.4. Obligation of Issuer Unconditional.... 104
SECTION 13.5. Payments on Securities and
Coupons Permitted................... 105
SECTION 13.6. Effectuation of Subordination
by Trustee.......................... 105
SECTION 13.7. Knowledge of Trustee.................. 106
SECTION 13.8. Trustee May Hold Senior
Indebtedness........................ 106
SECTION 13.9. Rights of Holders of Senior
Indebtedness Not Impaired........... 106
SECTION 13.10. Article Applicable to Paying
Agents.............................. 107
SECTION 13.11. Trustee; Compensation Not
Prejudiced.......................... 107
TESTIMONIUM.......................................... 108
SIGNATURES........................................... 108
THIS INDENTURE, dated as of October 26, 1990
between FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNER-
SHIP, a Delaware limited partnership (the "Issuer"), and
Manufacturers Hanover Trust Company, a New York corporation,
as trustee (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue
from time to time of its unsecured subordinated debentures,
notes or other evidences of indebtedness to be issued in one
or more series (the "Securities") up to such principal amount
or amounts as may from time to time be authorized in accord-
ance with the terms of this Indenture;
WHEREAS, the Issuer has duly authorized the execu-
tion and delivery of this Indenture to provide, among other
things, for the authentication, delivery and administration
of the Securities; and
WHEREAS, all things necessary to make this Inden-
ture a valid indenture and agreement according to its terms
have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases
of the Securities by the holders thereof, the Issuer and the
Trustee mutually covenant and agree for the equal and propor-
tionate benefit of the respective holders from time to time
of the Securities and of the coupons, if any, appertaining
thereto as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following
terms (except as otherwise expressly provided or unless the
context otherwise clearly requires) for all purposes of this
Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section. All other
terms used in this Indenture that are defined in the Trust
Indenture Act of 1939 or the definitions of which in the
Securities Act of 1933 are referred to in the Trust Indenture
Act of 1939, including terms defined therein by reference to
the Securities Act of 1933 (except as herein otherwise
expressly provided or unless the context otherwise requires),
shall have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the
date of this Indenture. All accounting terms used herein and
not expressly defined shall have the meanings assigned to
such terms in accordance with generally accepted accounting
principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein",
"hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision. The terms defined in
this Article have the meanings assigned to them in this
Article and include the plural as well as the singular.
"Administrative General Partner" means Freeport-
McMoRan Inc.
"Authenticating Agent" shall have the meaning set
forth in Section 6.14.
"Authorized Newspaper" means a newspaper (which, in
the case of The City of New York, will, if practicable, be
The Wall Street Journal (Eastern Edition), in the case of the
United Kingdom, will, if practicable, be the Financial Times
(London Edition) and, in the case of Luxembourg, will, if
practicable, be the Luxemburger Wort) published in an offi-
cial language of the country of publication customarily
published at least once a day for at least five days in each
calendar week and of general circulation in The City of New
York, the United Kingdom or in Luxembourg, as applicable.
If it shall be impractical in the opinion of the Trustee to
make any publication of any notice required hereby in an
Authorized Newspaper, any publication or other notice in lieu
thereof which is made or given with the approval of the
Trustee shall constitute a sufficient publication of such
notice.
"Board of Directors" means either the Board of
Directors of the Administrative General Partner or any com-
mittee of such Board duly authorized to act hereunder on its
behalf.
"Board Resolution" means a copy of one or more
resolutions, certified by the secretary or an assistant
secretary of the Administrative General Partner to have been
duly adopted or consented to by the Board of Directors and to
be in full force and effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security,
a day that in the city (or in any of the cities, if more than
one) in which amounts are payable, as specified in the form
of such Security, is not a day on which banking institutions
are authorized or required by law or regulation to close.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under
the Securities Exchange Act of 1934, or if at any time after
the execution and delivery of this Indenture such Commission
is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such
duties on such date.
"Composite Rate" means, at any time, the rate of
interest, per annum, compounded semiannually, equal to the
sum of the rates of interest borne by the Securities of each
series (as specified on the face of the Securities of each
series, provided, that, in the case of the Securities with
variable rates of interest, the interest rate to be used in
calculating the Composite Rate shall be the interest rate
applicable to such Securities at the beginning of the year
in which the Composite Rate is being determined and,
provided, further, that, in the case of Securities which do
not bear interest, the interest rate to be used in calculat-
ing the Composite Rate shall be a rate equal to the yield to
maturity on such Securities, calculated at the time of
issuance of such Securities) multiplied, in the case of each
series of Securities, by the percentage of the aggregate
principal amount of the Securities of all series Outstanding
represented by the Outstanding Securities of such series.
For the purposes of this calculation, the aggregate principal
amounts of Outstanding Securities that are denominated in a
foreign currency, shall be calculated in the manner set forth
in Section 11.11.
"Corporate Trust Office" means the office of the
Trustee at which the corporate trust business of the Trustee
shall, at any particular time, be principally administered,
which office is, at the date as of which this Indenture is
dated, located in The City of New York.
"Coupon" means any interest coupon appertaining to
a Security.
"covenant defeasance" shall have the meaning set
forth in Section 10.1(C).
"Depositary" means, with respect to the Securities
of any series issuable or issued in the form of one or more
Registered Global Securities, the Person designated as
Depositary by the Company pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter
"Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than
one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with
respect to the Registered Global Securities of that series.
"Dollar" means the coin or currency of the United
States of America as at the time of payment is legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined
and revised from time to time by the Council of European
Communities.
"Event of Default" means any event or condition
specified as such in Section 5.1.
"Foreign Currency" means a currency issued by the
government of a country other than the United States.
"Holder", "Holder of Securities", "Securityholder"
or other similar terms mean (a) in the case of any Registered
Security, the person in whose name such Security is
registered in the security register kept by the Issuer for
that purpose in accordance with the terms hereof, and (b) in
the case of any Unregistered Security, the bearer of such
Security, or any Coupon appertaining thereto, as the case may
be.
"Indebtedness" shall have the meaning set forth in
Section 5.1.
"Indenture" means this instrument as originally
executed and delivered or, if amended or supplemented as
herein provided, as so amended or supplemented or both, and
shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
"Interest" means, when used with respect to non-
interest bearing Securities, interest payable after maturity.
"Issuer" means (except as otherwise provided in
Article Six) Freeport-McMoRan Resource Partners, Limited
Partnership, a Delaware limited partnership and, subject to
Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request
or order of the Issuer signed by the Administrative General
Partner which is signed in its name by the chairman of the
Board of Directors, the president, any vice president or the
treasurer of the Administrative General Partner.
"Judgment Currency" shall have the meaning set
forth in Section 11.12.
"Officer's Certificate" means a certificate signed
by the chairman of the Board of Directors, the president,
any vice president or the treasurer of the Administrative
General Partner and delivered to the Trustee. Each such
certificate shall include the statements provided for in
Section 11.5.
"Opinion of Counsel" means an opinion in writing
signed by the General Counsel of the Administrative General
Partner, or by such other legal counsel who may be an
employee of or counsel to the Issuer and who shall be satis-
factory to the Trustee. Each such opinion shall include the
statements provided for in Section 11.5.
"original issue date" of any Security (or portion
thereof) means the earlier of (a) the date of such Security
or (b) the date of any Security (or portion thereof) for
which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any
Security that provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof pursuant to Section 5.1.
"Outstanding" (except as otherwise provided in
Section 6.8), when used with reference to Securities, shall,
subject to the provisions of Section 7.4, mean, as of any
particular time, all Securities authenticated and delivered
by the Trustee under this Indenture, except
(a) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancella-
tion;
(b) Securities (other than Securities of any
series as to which the provisions of Article 10
hereof shall not be applicable), or portions
thereof, for the payment or redemption of which
moneys or U.S. Government Obligations (as provided
for in Section 10.1) in the necessary amount shall
have been deposited in trust with the Trustee or
with any paying agent (other than the Issuer) or
shall have been set aside, segregated and held in
trust by the Issuer for the Holders of such
Securities (if the Issuer shall act as its own
paying agent), provided that if such Securities, or
portions thereof, are to be redeemed prior to the
maturity thereof, notice of such redemption shall
have been given as herein provided, or provision
satisfactory to the Trustee shall have been made
for giving such notice; and
(c) Securities which shall have been paid or
in substitution for which other Securities shall
have been authenticated and delivered pursuant to
the terms of Section 2.9 (except with respect to
any such Security as to which proof satisfactory to
the Trustee is presented that such Security is held
by a person in whose hands such Security is a
legal, valid and binding obligation of the Issuer).
In determining whether the Holders of the requisite
principal amount of Outstanding Securities of any or all
series have given any request, demand, authorization, direc-
tion, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be
deemed to be Outstanding for such purposes shall be the
amount of the principal thereof that would be due and payable
as of the date of such determination upon a declaration of
acceleration of the maturity thereof pursuant to Section 5.1.
"Periodic Offering" means an offering of Securities
of a series from time to time, the specific terms of which
Securities, including, without limitation, the rate or rates
of interest, if any, thereon, the stated maturity or
maturities thereof and the redemption provisions, if any,
with respect thereto, are to be determined by the Issuer or
its agents upon the issuance of such Securities.
"Person" means any individual, corporation, part-
nership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any
agency or political subdivision thereof.
"principal" whenever used with reference to the
Securities or any Security or any portion thereof, shall be
deemed to include "and premium, if any".
"record date" shall have the meaning set forth in
Section 2.7.
"Registered Global Security", means a Security
evidencing all or a part of a series of Registered
Securities, issued to the Depositary for such series in
accordance with Section 2.4, and bearing the legend
prescribed in Section 2.4.
"Registered Security" means any Security registered
on the Security register of the Issuer.
"Required Currency" shall have the meaning set
forth in Section 11.12.
"Responsible Officer" when used with respect to the
Trustee means the chairman of the board of directors, any
vice chairman of the board of directors, the chairman of the
trust committee, the chairman of the executive committee, any
vice chairman of the executive committee, the president, any
vice president, (whether or not designated by numbers or
words added before or after the title "vice president") the
cashier, the secretary, the treasurer, any trust officer, any
assistant trust officer, any assistant vice president, any
assistant cashier, any assistant secretary, any assistant
treasurer, or any other officer or assistant officer of the
Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter
is referred because of his knowledge of and familiarity with
the particular subject.
"Security" or "Securities" (except as otherwise
provided in Section 6.8) has the meaning stated in the first
recital of this Indenture, or, as the case may be, Securities
that have been authenticated and delivered under this Inden-
ture.
"Senior Indebtedness" means obligations (other than
non-recourse obligations, the Securities or any other obliga-
tions specifically designated as being subordinate in right
of payment to Senior Indebtedness) of, or guaranteed or
assumed by, the Issuer for borrowed money or evidenced by
bonds, debentures, notes or other similar instruments, and
amendments, renewals, extensions, modifications and refund-
ings of any such indebtedness or obligation.
"Trust Indenture Act of 1939" (except as otherwise
provided in Sections 8.1 and 8.2) means the Trust Indenture
Act of 1939 as in force at the date as of which this Inden-
ture was originally executed.
"Trustee" means the Person identified as "Trustee"
in the first paragraph hereof and, subject to the provisions
of Article Six, shall also include any successor trustee.
"Trustee" shall also mean or include each Person who is then
a trustee hereunder and if at any time there is more than one
such Person, "Trustee" as used with respect to the Securities
of any series shall mean the trustee with respect to the
Securities of such series.
"Unregistered Security" means any Security other
than a Registered Security.
"U.S. Government Obligations" shall have the mean-
ing set forth in Section 10.1(A).
"Yield to Maturity" means the yield to maturity
on a series of securities, calculated at the time of issuance
of such series, or, if applicable, at the most recent
redetermination of interest on such series, and calculated in
accordance with accepted financial practice.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of
each series and the Coupons, if any, to be attached thereto
shall be substantially in such form (not inconsistent with
this Indenture) as shall be established by or pursuant to one
or more Board Resolutions (as set forth in a Board Resolution
or, to the extent established pursuant to rather than set
forth in a Board Resolution, an Officer's Certificate detail-
ing such establishment) or in one or more indentures sup-
plemental hereto, in each case with such appropriate inser-
tions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have
imprinted or otherwise reproduced thereon such legend or
legends or endorsements, not inconsistent with the provisions
of this Indenture, as may be required to comply with any law
or with any rules or regulations pursuant thereto, or with
any rules of any securities exchange or to conform to general
usage, all as may be determined by the officers executing
such Securities and Coupons, if any, as evidenced by their
execution of such Securities and Coupons.
The definitive Securities and Coupons, if any,
shall be printed, lithographed or engraved on steel engraved
borders or may be produced in any other manner, all as deter-
mined by the officers executing such Securities and Coupons,
if any, as evidenced by their execution of such Securities
and Coupons, if any.
SECTION 2.2 Form of Trustee's Certificate of
Authentication. The Trustee's certificate of authentication
on all Securities shall be in substantially the following
form:
"This is one of the Securities of the series desig-
nated herein referred to in the within-mentioned Subordinated
Indenture.
MANUFACTURERS HANOVER TRUST
COMPANY
,
------------------------
as Trustee
By
-----------------------
Authorized Officer"
If at any time there shall be an Authenticating
Agent appointed with respect to any series of Securities,
then the Trustee's Certificate of Authentication to be borne
by the Securities of each such series shall be substantially
as follows:
"This is one of the Securities of the series desig-
nated herein referred to in the within-mentioned Subordinated
Indenture.
MANUFACTURERS HANOVER TRUST
COMPANY
By
-----------------------
as Authenticating Agent,
By
-----------------------
Authorized Officer"
SECTION 2.3 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is
unlimited.
The Securities may be issued in one or more series
and the Securities of each such series shall rank equally and
pari passu with the Securities of each other series, but all
Securities issued hereunder shall be subordinate and junior
in right of payment, to the extent and in the manner set
forth in Article Thirteen, to all Senior Indebtedness of the
Issuer. There shall be established in or pursuant to one or
more Board Resolutions (and, to the extent established pur-
suant to rather than set forth in a Board Resolution, in an
Officer's Certificate detailing such establishment) or estab-
lished in one or more indentures supplemental hereto, prior
to the initial issuance of Securities of any series,
(1) the designation of the Securities of the
series, which shall distinguish the Securities of
the series from the Securities of all other series;
(2) any limit upon the aggregate principal
amount of the Securities of the series that may be
authenticated and delivered under this Indenture
(except for Securities authenticated and delivered
upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the series
pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3);
(3) if other than Dollars, the coin or cur-
rency in which the Securities of that series are
denominated (including, but not limited to, any
Foreign Currency or ECU);
(4) the date or dates on which the principal
of the Securities of the series is payable;
(5) the rate or rates at which the Securities
of the series shall bear interest, if any, the date
or dates from which such interest shall accrue, on
which such interest shall be payable and (in the
case of Registered Securities) on which a record
shall be taken for the determination of Holders to
whom interest is payable and/or the method by which
such rate or rates or date or dates shall be deter-
mined;
(6) the place or places where the principal
of and any interest on Securities of the series
shall be payable (if other than as provided in
Section 3.2);
(7) the right, if any, of the Issuer or any
Holder to redeem or cause to be redeemed
Securities, in whole or in part, at its option and
the period or periods within which, the price or
prices at which and any terms and conditions upon
which and the manner in which (if different from
the provision of Article 12 hereof), Securities of
the series may be so redeemed, pursuant to any
sinking fund or otherwise and/or method by which
such price or prices shall be determined;
(8) the obligation, if any, of the Issuer to
redeem, purchase or repay Securities of the series
pursuant to any mandatory redemption, sinking fund
or analogous provisions or at the option of a
Holder thereof and the price or prices (and/or the
method by which such price or prices shall be
determined) at which and the period or periods
within which and any terms and conditions upon
which Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant
to such obligation;
(9) if other than denominations of $1,000 and
any integral multiple thereof in the case of
Registered Securities, or $1,000 and $5,000 in the
case of Unregistered Securities, the denominations
in which Securities of the series shall be issu-
able;
(10) if other than the principal amount
thereof, the portion of the principal amount of
Securities of the series which shall be payable
upon declaration of acceleration of the maturity
thereof;
(11) if other than the coin or currency in
which the Securities of that series are
denominated, the coin or currency in which payment
of the principal of or interest on the Securities
of such series shall be payable;
(12) if the principal of or interest on the
Securities of such series are to be payable, at the
election of the Issuer or a Holder thereof, in a
coin or currency other than that in which the
Securities are denominated, the period or periods
within which, and the terms and conditions upon
which, such election may be made;
(13) if the amount of payments of principal
of and/or interest on the Securities of the series
may be determined with reference to the value or
price of any one or more commodities, currencies,
or indices, the manner in which such amounts will
be determined;
(14) whether the Securities of the series will
be issuable as Registered Securities (and if so,
whether such Securities will be issuable as
Registered Global Securities) or Unregistered
Securities (with or without Coupons), or any com-
bination of the foregoing, any restrictions
applicable to the offer, sale or delivery of
Unregistered Securities or the payment of interest
thereon and, if other than as provided in Section
2.8, the terms upon which Unregistered Securities
of any series may be exchanged for Registered
Securities of such series and vice versa;
(15) whether and under what circumstances the
Issuer will pay additional amounts on the
Securities of the series held by a person who is
not a U.S. person in respect of any tax, assessment
or governmental charge withheld or deducted and, if
so, whether the Issuer will have the option to
redeem such Securities rather than pay such addi-
tional amounts;
(16) if the Securities of such series are to
be issuable in definitive form (whether upon
original issue or upon exchange of a temporary
Security of such series) only upon receipt of
certain certificates or other documents or satis-
faction of other conditions, the form and terms of
such certificates, documents or conditions;
(17) any trustees, depositaries, authenticat-
ing or paying agents, transfer agents or registrars
or any other agents with respect to the Securities
of such series;
(18) any other events of default or covenants
with respect to the Securities of such series; and
(19) whether the provisions of Section 10.1(B)
hereof will not be applicable to Securities of such
series; and
(20) any other terms of the series (which
terms shall not be inconsistent with the provisions
of this Indenture).
All Securities of any one series and Coupons, if
any, appertaining thereto, shall be substantially identical,
except in the case of Registered Securities as to denomina-
tion and except as may otherwise be provided by or pursuant
to the Board Resolution or Officer's Certificate referred to
above or as set forth in any such indenture supplemental
hereto. All Securities of any one series need not be issued
at the same time and may be issued from time to time, consis-
tent with the terms of this Indenture, if so provided by or
pursuant to such Board Resolution, such Officer's Certificate
or in any such indenture supplemental hereto.
SECTION 2.4 Authentication and Delivery of
Securities. The Issuer may deliver Securities of any series
having attached thereto appropriate Coupons, if any, executed
by the Issuer to the Trustee for authentication together with
the applicable documents referred to below in this Section,
and the Trustee shall thereupon authenticate and deliver such
Securities to or upon the order of the Issuer (contained in
the Issuer Order referred to below in this Section) or pur-
suant to such procedures acceptable to the Trustee and to
such recipients as may be specified from time to time by an
Issuer Order. The maturity date, original issue date, inter-
est rate and any other terms of the Securities of such series
and Coupons, if any, appertaining thereto shall be determined
by or pursuant to such Issuer Order and procedures. If
provided for in such procedures, such Issuer Order may
authorize authentication and delivery pursuant to oral
instructions from the Issuer or its duly authorized agent,
which instructions shall be promptly confirmed in writing.
In authenticating such Securities and accepting the addi-
tional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive
(in the case of subparagraphs 2, 3 and 4 below only at or
before the time of the first request of the Issuer to the
Trustee to authenticate Securities of such series) and (sub-
ject to Section 6.1) shall be fully protected in relying
upon, unless and until such documents have been superceded or
revoked:
(1) an Issuer Order requesting such authen-
tication and setting forth delivery instructions if
the Securities and Coupons, if any, are not to be
delivered to the Issuer, provided that, with
respect to Securities of a series subject to a
Periodic Offering, (a) such Issuer Order may be
delivered by the Issuer to the Trustee prior to the
delivery to the Trustee of such Securities for
authentication and delivery, (b) the Trustee shall
authenticate and deliver Securities of such series
for original issue from time to time, in an
aggregate principal amount not exceeding the
aggregate principal amount established for such
series, pursuant to an Issuer Order or pursuant to
procedures acceptable to the Trustee as may be
specified from time to time by an Issuer Order, (c)
the maturity date or dates, original issue date or
dates, interest rate or rates and any other terms
of Securities of such series shall be determined by
an Issuer Order or pursuant to such procedures and
(d) if provided for in such procedures, such Issuer
Order may authorize authentication and delivery
pursuant to oral or electronic instructions from
the Issuer or its duly authorized agent or agents,
which oral instructions shall be promptly confirmed
in writing;
(2) any Board Resolution, Officer's Certifi-
cate and/or executed supplemental indenture
referred to in Sections 2.1 and 2.3 by or pursuant
to which the forms and terms of the Securities and
Coupons, if any, were established;
(3) an Officer's Certificate setting forth
the form or forms and terms of the Securities and
Coupons, if any, stating that the form or forms and
terms of the Securities and Coupons, if any, have
been established pursuant to Sections 2.1 and 2.3
and comply with this Indenture, and covering such
other matters as the Trustee may reasonably
request; and
(4) an Opinion of Counsel substantially to
the effect that:
(a) the forms of the Securities and
Coupons, if any, have been duly authorized and
established in conformity with the provisions
of this Indenture;
(b) in the case of an underwritten
offering, the terms of the Securities have
been duly authorized and established in con-
formity with the provisions of this Indenture,
and, in the case of an offering that is not
underwritten, certain terms of the Securities
have been established pursuant to a Board
Resolution, an Officer's Certificate or a
supplemental indenture in accordance with this
Indenture, and when such other terms as are to
be established pursuant to procedures set
forth in an Issuer Order shall have been
established, all such terms will have been
duly authorized by the Issuer and will have
been established in conformity with the provi-
sions of this Indenture;
(c) when the Securities and Coupons, if
any, have been executed by the Issuer and
authenticated by the Trustee in accordance
with the provisions of this Indenture and
delivered to and duly paid for by the pur-
chasers thereof, they will have been duly
issued under this Indenture and will be valid
and legally binding obligations of the Issuer,
enforceable in accordance with their respec-
tive terms, and will be entitled to the
benefits of this Indenture; and
(d) the execution and delivery by the
Issuer of, and the performance by the Issuer
of its obligations under, the Securities and
Coupons, if any, will not contravene any
provision of applicable law or the certificate
of incorporation or by-laws of the Issuer or
any agreement or other instrument binding upon
the Issuer or any of its subsidiaries that is
material to the Issuer and its subsidiaries,
considered as one enterprise, or, to the best
of such counsel's knowledge, any judgment,
order or decree of any governmental body,
agency or court having jurisdiction over the
Issuer or any subsidiary, and no consent,
approval or authorization of any governmental
body or agency is required for the performance
by the Issuer of its obligations under the
Securities and Coupons, if any, except such as
are specified and have been obtained and such
as may be required by the securities or blue
sky laws of the various states in connection
with the offer and sale of the Securities and
Coupons, if any.
In rendering such opinions, such counsel may
qualify any opinions as to enforceability by stating that
such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, liquidation, moratorium
and other similar laws affecting the rights and remedies of
creditors and is subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law). Such counsel may rely, as
to all matters governed by the laws of jurisdictions other
than the State of New York and the federal law of the United
States, upon opinions of other counsel (copies of which shall
be delivered to the Trustee), who shall be counsel reasonably
satisfactory to the Trustee, in which case the opinion shall
state that such counsel believes he and the Trustee are
entitled so to rely. Such counsel may also state that,
insofar as such opinion involves factual matters, he has
relied, to the extent he deems proper, upon certificates of
officers of the Issuer and its subsidiaries and certificates
of public officials.
The Trustee shall have the right to decline to
authenticate and deliver any Securities under this Section if
the Trustee, being advised by counsel, determines that such
action may not lawfully be taken by the Issuer or if the
Trustee in good faith by its board of directors or board of
trustees, executive committee, or a trust committee of direc-
tors or trustees or Responsible Officers shall determine that
such action would expose the Trustee to personal liability to
existing Holders or would affect the Trustee's own rights,
duties or immunities under the Securities, this Indenture or
otherwise.
If the Issuer shall establish pursuant to Section
2.3 that the Securities of a series are to be issued in the
form of one or more Registered Global Securities, then the
Issuer shall execute and the Trustee shall, in accordance
with this Section and the Issuer Order with respect to such
series, authenticate and deliver one or more Registered
Global Securities that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal
amount of all of the Securities of such series issued and not
yet cancelled, (ii) shall be registered in the name of the
Depositary for such Registered Global Security or Securities
or the nominee of such Depositary, (iii) shall be delivered
by the Trustee to such Depositary or pursuant to such
Depositary's instructions and (iv) shall bear a legend sub-
stantially to the following effect: "Unless and until it is
exchanged in whole or in part for Securities in definitive
registered form, this Security may not be transferred except
as a whole by the Depositary to the nominee of the Depositary
or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such
successor Depositary."
Each Depositary designated pursuant to Section 2.3
must, at the time of its designation and at all times while
it serves as Depositary, be a clearing agency registered
under the Securities Exchange Act of 1934 and any other
applicable statute or regulation.
SECTION 2.5 Execution of Securities. The
Securities and, if applicable, each Coupon appertaining
thereto shall be signed on behalf of the Issuer by the chair-
man of the board of directors, the president, any vice presi-
dent or the treasurer of the Administrative General Partner,
under its corporate seal (except in the case of Coupons)
which may, but need not, be attested. Such signatures may be
the manual or facsimile signatures of the present or any
future such chairman or officers. The seal of the
Administrative General Partner may be in the form of a fac-
simile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities. Typographical and
other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or
enforceability of any Security that has been duly authenti-
cated and delivered by the Trustee.
In case any officer of the Administrative General
Partner who shall have signed any of the Securities or
Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the
Coupon so signed appertains) shall be authenticated and
delivered by the Trustee or disposed of by the Issuer, such
Security or Coupon nevertheless may be authenticated and
delivered or disposed of as though the person who signed such
Security or Coupon had not ceased to be such officer of the
Administrative General Partner; and any Security or Coupon
may be signed on behalf of the Administrative General Partner
by such persons as, at the actual date of the execution of
such Security or Coupon, shall be the proper officers of the
Administrative General Partner, although at the date of the
execution and delivery of this Indenture any such person was
not such an officer.
SECTION 2.6 Certificate of Authentication. Only
such Securities as shall bear thereon a certificate of
authentication substantially in the form hereinbefore
recited, executed by the Trustee by the manual signature of
one of its authorized officers, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any
purpose. No Coupon shall be entitled to the benefits of this
Indenture or shall be valid and obligatory for any purpose
until the certificate of authentication on the Security to
which such Coupon appertains shall have been duly executed by
the Trustee. The execution of such certificate by the Trus-
tee upon any Security executed by the Issuer shall be con-
clusive evidence that the Security so authenticated has been
duly authenticated and delivered hereunder and that the
Holder is entitled to the benefits of this Indenture.
SECTION 2.7 Denomination and Date of Securities;
Payments of Interest. The Securities of each series shall be
issuable as Registered Securities or Unregistered Securities
in denominations established as contemplated by Section 2.3
or, with respect to the Registered Securities of any series,
if not so established, in denominations of $1,000 and any
integral multiple thereof. If denominations of Unregistered
Securities of any series are not so established, such
Securities shall be issuable in denominations of $1,000 and
$5,000. The Securities of each series shall be numbered,
lettered or otherwise distinguished in such manner or in
accordance with such plan as the chairman or the officers of
the Administrative General Partner executing the same may
determine with the approval of the Trustee, as evidenced by
the execution and authentication thereof.
Each Registered Security shall be dated the date of
its authentication. Each Unregistered Security shall be
dated as provided in or pursuant to the resolution or resolu-
tions of the Board of Directors referred to in Section 2.3.
The Securities of each series shall bear interest, if any,
from the date, and such interest shall be payable on the
dates, established as contemplated by Section 2.3.
The person in whose name any Registered Security of
any series is registered at the close of business on any
record date applicable to a particular series with respect
to any interest payment date for such series shall be
entitled to receive the interest, if any, payable on such
interest payment date notwithstanding any transfer or
exchange of such Registered Security subsequent to the record
date and prior to such interest payment date, except if and
to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series,
in which case such defaulted interest shall be paid to the
persons in whose names Outstanding Registered Securities for
such series are registered at the close of business on a
subsequent record date (which shall be not less than five
Business Days prior to the date of payment of such defaulted
interest) established by notice given by mail by or on behalf
of the Issuer to the Holders of Registered Securities not
less than 15 days preceding such subsequent record date. The
term "record date" as used with respect to any interest
payment date (except a date for payment of defaulted inter-
est) for the Securities of any series shall mean the date
specified as such in the terms of the Registered Securities
of such series established as contemplated by Section 2.3,
or, if no such date is so established, if such interest
payment date is the first day of a calendar month, the fif-
teenth day of the next preceding calendar month or, if such
interest payment date is the fifteenth day of a calendar
month, the first day of such calendar month, whether or not
such record date is a Business Day.
SECTION 2.8 Registration, Transfer and Exchange.
The Issuer will keep at each office or agency to be main-
tained for the purpose as provided in Section 3.2 for each
series of Securities a register or registers in which, sub-
ject to such reasonable regulations as it may prescribe, it
will provide for the registration of Registered Securities of
each series and the registration of transfer of Registered
Securities of such series. Such register shall be in written
form in the English language or in any other form capable of
being converted into such form within a reasonable time. At
all reasonable times such register or registers shall be open
for inspection by the Trustee.
Upon due presentation for registration of transfer
of any Registered Security of any series at any such office
or agency to be maintained for the purpose as provided in
Section 3.2, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or
transferees a new Registered Security or Registered
Securities of the same series, maturity date, interest rate
and original issue date in authorized denominations for a
like aggregate principal amount.
Unregistered Securities (except for any temporary
global Unregistered Securities) and Coupons (except for
Coupons attached to any temporary global Unregistered
Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered
Securities of any series (other than a Registered Global
Security, except as set forth below) may be exchanged for a
Registered Security or Registered Securities of such series
having authorized denominations and an equal aggregate prin-
cipal amount, upon surrender of such Registered Securities to
be exchanged at the agency of the Issuer that shall be main-
tained for such purpose in accordance with Section 3.2 and
upon payment, if the Issuer shall so require, of the charges
hereinafter provided. If the Securities of any series are
issued in both registered and unregistered form, except as
otherwise specified pursuant to Section 2.3, at the option of
the Holder thereof, Unregistered Securities of any series may
be exchanged for Registered Securities of such series having
authorized denominations and an equal aggregate principal
amount, upon surrender of such Unregistered Securities to be
exchanged at the agency of the Issuer that shall be main-
tained for such purpose in accordance with Section 3.2, with,
in the case of Unregistered Securities that have Coupons
attached, all unmatured Coupons and all matured Coupons in
default thereto appertaining, and upon payment, if the Issuer
shall so require, of the charges hereinafter provided. At
the option of the Holder thereof, if Unregistered Securities
of any series, maturity date, interest rate and original
issue date are issued in more than one authorized denomina-
tion, except as otherwise specified pursuant to Section 2.3,
such Unregistered Securities may be exchanged for Unregis-
tered Securities of such series having authorized denomina-
tions and an equal aggregate principal amount, upon surrender
of such Unregistered Securities to be exchanged at the agency
of the Issuer that shall be maintained for such purpose in
accordance with Section 3.2 or as specified pursuant to
Section 2.3, with, in the case of Unregistered Securities
that have Coupons attached, all unmatured Coupons and all
matured Coupons in default thereto appertaining, and upon
payment, if the Issuer shall so require, of the charges
hereinafter provided. Unless otherwise specified pursuant to
Section 2.3, Registered Securities of any series may not be
exchanged for Unregistered Securities of such series. When-
ever any Securities are so surrendered for exchange, the
Issuer shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange
is entitled to receive. All Securities and Coupons sur-
rendered upon any exchange or transfer provided for in this
Indenture shall be promptly cancelled and disposed of by the
Trustee and the Trustee will deliver a certificate of dis-
position thereof to the Issuer.
All Registered Securities presented for registra-
tion of transfer, exchange, redemption or payment shall (if
so required by the Issuer or the Trustee) be duly endorsed
by, or be accompanied by a written instrument or instruments
of transfer in form satisfactory to the Issuer and the Trus-
tee duly executed by the Holder or his attorney duly
authorized in writing.
The Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge that may be
imposed in connection with any exchange or registration of
transfer of Securities. No service charge shall be made for
any such transaction.
The Issuer shall not be required to exchange or
register a transfer of (a) any Securities of any series for a
period of 15 days next preceding the first mailing of notice
of redemption of Securities of such series to be redeemed,
(b) any Securities selected, called or being called for
redemption, in whole or in part, except, in the case of any
Security to be redeemed in part, the portion thereof not so
to be redeemed, or (c) any Security if the Holder thereof has
exercised his right, if any, to require the Issuer to repur-
chase such Security in whole or in part, except the portion
of such Security not required to be repurchased.
Notwithstanding any other provision of this Section
2.8, unless and until it is exchanged in whole or in part for
Securities in definitive registered form, a Registered Global
Security representing all or a portion of the Securities of a
series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or
by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such
nominee to a successor Depositary for such series or a
nominee of such successor Depositary.
If at any time the Depositary for any Registered
Securities of a series represented by one or more Registered
Global Securities notifies the Issuer that it is unwilling or
unable to continue as Depositary for such Registered
Securities or if at any time the Depositary for such
Registered Securities shall no longer be eligible under
Section 2.4, the Issuer shall appoint a successor Depositary
with respect to such Registered Securities. If a successor
Depositary for such Registered Securities is not appointed by
the Issuer within 90 days after the Issuer receives such
notice or becomes aware of such ineligibility, the Issuer's
election pursuant to Section 2.3 that such Registered
Securities be represented by one or more Registered Global
Securities shall no longer be effective and the Issuer will
execute, and the Trustee, upon receipt of an Officer's Cer-
tificate for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver,
Securities of such series in definitive registered form
without Coupons, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of
the Registered Global Security or Securities representing
such Registered Securities in exchange for such Registered
Global Security or Securities.
The Issuer may at any time and in its sole discre-
tion determine that the Registered Securities of any series
issued in the form of one or more Registered Global
Securities shall no longer be represented by a Registered
Global Security or Securities. In such event the Issuer will
execute, and the Trustee, upon receipt of an Officer's Cer-
tificate for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver,
Securities of such series in definitive registered form
without Coupons, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of
the Registered Global Security or Securities representing
such Registered Securities, in exchange for such Registered
Global Security or Securities.
If specified by the Issuer pursuant to Section 2.3
with respect to Securities represented by a Registered Global
Security, the Depositary for such Registered Global Security
may surrender such Registered Global Security in exchange in
whole or in part for Securities of the same series in defini-
tive registered form on such terms as are acceptable to the
Issuer and such Depositary. Thereupon, the Issuer shall
execute, and the Trustee shall authenticate and deliver,
without service charge,
(i) to the Person specified by such
Depositary a new Registered Security or Securities
of the same series, of any authorized denominations
as requested by such Person, in an aggregate prin-
cipal amount equal to and in exchange for such
Person's beneficial interest in the Registered
Global Security; and
(ii) to such Depositary a new Registered
Global Security in a denomination equal to the
difference, if any, between the principal amount of
the surrendered Registered Global Security and the
aggregate principal amount of Registered Securities
authenticated and delivered pursuant to clause (i)
above.
Upon the exchange of a Registered Global Security
for Securities in definitive registered form without Coupons,
in authorized denominations, such Registered Global Security
shall be cancelled by the Trustee or an agent of the Issuer
or the Trustee. Securities in definitive registered form
without Coupons issued in exchange for a Registered Global
Security pursuant to this Section 2.8 shall be registered in
such names and in such authorized denominations as the
Depositary for such Registered Global Security, pursuant to
instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee or an agent of the
Issuer or the Trustee. The Trustee or such agent shall
deliver such Securities to or as directed by the Persons in
whose names such Securities are so registered.
All Securities issued upon any transfer or exchange
of Securities shall be valid and legally binding obligations
of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities sur-
rendered upon such transfer or exchange.
Notwithstanding anything herein or in the terms of
any series of Securities to the contrary, none of the Issuer,
the Trustee or any agent of the Issuer or the Trustee (any of
which, other than the Issuer, shall rely on an Officer's
Certificate and an Opinion of Counsel) shall be required to
exchange any Unregistered Security for a Registered Security
if such exchange would result in adverse Federal income tax
consequences to the Issuer (such as, for example, the
inability of the Issuer to deduct from its income, as com-
puted for Federal income tax purposes, the interest payable
on the Unregistered Securities) under then applicable United
States Federal income tax laws.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost
and Stolen Securities. In case any temporary or definitive
Security or any Coupon appertaining to any Security shall
become mutilated, defaced or be destroyed, lost or stolen,
the Issuer in its discretion may execute, and upon the writ-
ten request of any officer of the Administrative General
Partner, the Trustee shall authenticate and deliver a new
Security of the same series, maturity date, interest rate and
original issue date, bearing a number or other distinguishing
symbol not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in
lieu of and in substitution for the Security so destroyed,
lost or stolen with Coupons corresponding to the Coupons
appertaining to the Securities so mutilated, defaced,
destroyed, lost or stolen, or in exchange or substitution for
the Security to which such mutilated, defaced, destroyed,
lost or stolen Coupon appertained, with Coupons appertaining
thereto corresponding to the Coupons so mutilated, defaced,
destroyed, lost or stolen. In every case the applicant for a
substitute Security or Coupon shall furnish to the Issuer and
to the Trustee and any agent of the Issuer or the Trustee
such security or indemnity as may be required by them to
indemnify and defend and to save each of them harmless and,
in every case of destruction, loss or theft, evidence to
their satisfaction of the destruction, loss or theft of such
Security or Coupon and of the ownership thereof and in the
case of mutilation or defacement shall surrender the Security
and related Coupons to the Trustee or such agent.
Upon the issuance of any substitute Security or
Coupon, the Issuer may require the payment of a sum suffi-
cient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses (includ-
ing the fees and expenses of the Trustee or its agent) con-
nected therewith. In case any Security or Coupon which has
matured or is about to mature or has been called for redemp-
tion in full shall become mutilated or defaced or be
destroyed, lost or stolen, the Issuer may instead of issuing
a substitute Security, pay or authorize the payment of the
same or the relevant Coupon (without surrender thereof except
in the case of a mutilated or defaced Security or Coupon), if
the applicant for such payment shall furnish to the Issuer
and to the Trustee and any agent of the Issuer or the Trustee
such security or indemnity as any of them may require to save
each of them harmless, and, in every case of destruction,
loss or theft, the applicant shall also furnish to the Issuer
and the Trustee and any agent of the Issuer or the Trustee
evidence to their satisfaction of the destruction, loss or
theft of such Security or Coupon and of the ownership
thereof.
Every substitute Security or Coupon of any series
issued pursuant to the provisions of this Section by virtue
of the fact that any such Security or Coupon is destroyed,
lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost
or stolen Security or Coupon shall be at any time enforceable
by anyone and shall be entitled to all the benefits of (but
shall be subject to all the limitations of rights set forth
in) this Indenture equally and proportionately with any and
all other Securities or Coupons of such series duly authenti-
cated and delivered hereunder. All Securities and Coupons
shall be held and owned upon the express condition that, to
the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of
mutilated, defaced or destroyed, lost or stolen Securities
and Coupons and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other
securities without their surrender.
SECTION 2.10 Cancellation of Securities; Disposi-
tion Thereof. All Securities and Coupons surrendered for
payment, redemption, registration of transfer or exchange, or
for credit against any payment in respect of a sinking or
analogous fund, if surrendered to the Issuer or any agent of
the Issuer or the Trustee or any agent of the Trustee, shall
be delivered to the Trustee or its agent for cancellation or,
if surrendered to the Trustee, shall be cancelled by it; and
no Securities or Coupons shall be issued in lieu thereof
except as expressly permitted by any of the provisions of
this Indenture. The Trustee or its agent shall dispose of
cancelled Securities and Coupons held by it and deliver a
certificate of disposition to the Issuer. If the Issuer or
its agent shall acquire any of the Securities or Coupons,
such acquisition shall not operate as a redemption or satis-
faction of the indebtedness represented by such Securities or
Coupons unless and until the same are delivered to the Trus-
tee or its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the
preparation of definitive Securities for any series, the
Issuer may execute and, upon Issuer Order, the Trustee shall
authenticate and deliver temporary Securities for such series
(printed, lithographed, typewritten or otherwise reproduced,
in each case in form satisfactory to the Trustee). Temporary
Securities of any series shall be issuable as Registered
Securities without coupons, or as Unregistered Securities
with or without coupons attached thereto, of any authorized
denomination, and substantially in the form of the definitive
Securities of such series but with such omissions, insertions
and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the
concurrence of the Trustee as evidenced by the execution and
authentication thereof. Temporary Securities may contain
such references to any provisions of this Indenture as may be
appropriate. Every temporary Security shall be executed by
the Issuer and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with
like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish
definitive Securities of such series and thereupon temporary
Registered Securities of such series may be surrendered in
exchange therefor without charge at each office or agency to
be maintained by the Issuer for that purpose pursuant to
Section 3.2 and, in the case of Unregistered Securities, at
any agency maintained by the Issuer for such purpose as
specified pursuant to Section 2.3, and the Trustee shall
authenticate and deliver in exchange for such temporary
Securities of such series an equal aggregate principal amount
of definitive Securities of the same series having authorized
denominations and, in the case of Unregistered Securities,
having attached thereto any appropriate Coupons. Until so
exchanged, the temporary Securities of any series shall be
entitled to the same benefits under this Indenture as defini-
tive Securities of such series, unless otherwise established
pursuant to Section 2.3. The provisions of this Section are
subject to any restrictions or limitations on the issue and
delivery of temporary Unregistered Securities of any series
that may be established pursuant to Section 2.3 (including
any provision that Unregistered Securities of such series
initially be issued in the form of a single global
Unregistered Security to be delivered to a depositary or
agency located outside the United States and the procedures
pursuant to which definitive or global Unregistered
Securities of such series would be issued in exchange for
such temporary global Unregistered Security).
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest.
The Issuer covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay or
cause to be paid the principal of, and interest on, each of
the Securities of such series (together with any additional
amounts payable pursuant to the terms of such Securities)
at the place or places, at the respective times and in the
manner provided in such Securities and in the Coupons, if
any, appertaining thereto and in this Indenture. The inter-
est on Securities with Coupons attached (together with any
additional amounts payable pursuant to the terms of such
Securities) shall be payable only upon presentation and
surrender of the several Coupons for such interest install-
ments as are evidenced thereby as they severally mature. If
any temporary Unregistered Security provides that interest
thereon may be paid while such Security is in temporary form,
the interest on any such temporary Unregistered Security
(together with any additional amounts payable pursuant to the
terms of such Security) shall be paid, as to the installments
of interest evidenced by Coupons attached thereto, if any,
only upon presentation and surrender thereof, and, as to the
other installments of interest, if any, only upon presenta-
tion of such Securities for notation thereon of the payment
of such interest, in each case subject to any restrictions
that may be established pursuant to Section 2.3. The inter-
est on Registered Securities (together with any additional
amounts payable pursuant to the terms of such Securities)
shall be payable only to or upon the written order of the
Holders thereof and, at the option of the Issuer, may be paid
by wire transfer or by mailing checks for such interest
payable to or upon the written order of such Holders at their
last addresses as they appear on the registry books of the
Issuer.
SECTION 3.2 Offices for Payments, etc. So long as
any Registered Securities are authorized for issuance pur-
suant to this Indenture or are outstanding hereunder, the
Issuer will maintain in The City of New York, an office or
agency where the Registered Securities of each series may be
presented for payment, where the Securities of each series
may be presented for exchange as is provided in this Inden-
ture and, if applicable, pursuant to Section 2.3 and where
the Registered Securities of each series may be presented for
registration of transfer as in this Indenture provided.
The Issuer will maintain one or more offices or
agencies in a city or cities located outside the United
States (including any city in which such an agency is
required to be maintained under the rules of any stock
exchange on which the Securities of such series are listed)
where the Unregistered Securities, if any, of each series and
Coupons, if any, appertaining thereto may be presented for
payment. No payment on any Unregistered Security or Coupon
will be made upon presentation of such Unregistered Security
or Coupon at an agency of the Issuer within the United States
nor will any payment be made by transfer to an account in, or
by mail to an address in, the United States unless pursuant
to applicable United States laws and regulations then in
effect such payment can be made without adverse tax conse-
quences to the Issuer. Notwithstanding the foregoing, pay-
ments in Dollars of Unregistered Securities of any series and
Coupons appertaining thereto which are payable in Dollars may
be made at an agency of the Issuer maintained in The City of
New York if such payment in Dollars at each agency maintained
by the Issuer outside the United States for payment on such
Unregistered Securities is illegal or effectively precluded
by exchange controls or other similar restrictions.
The Issuer will maintain in The City of New York,
an office or agency where notices and demands to or upon the
Issuer in respect of the Securities of any series, the
Coupons appertaining thereto or this Indenture may be served.
The Issuer will give to the Trustee written notice
of the location of each such office or agency and of any
change of location thereof. In case the Issuer shall fail to
maintain any agency required by this Section to be located in
The City of New York, or shall fail to give such notice of
the location or of any change in the location of any of the
above agencies, presentations and demands may be made and
notices may be served at the Corporate Trust Office of the
Trustee.
The Issuer may from time to time designate one or
more additional offices or agencies where the Securities of a
series and any Coupons appertaining thereto may be presented
for payment, where the Securities of that series may be
presented for exchange as provided in this Indenture and
pursuant to Section 2.3 and where the Registered Securities
of that series may be presented for registration of transfer
as in this Indenture provided, and the Issuer may from time
to time rescind any such designation, as the Issuer may deem
desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the
Issuer of its obligation to maintain the agencies provided
for in the first three paragraphs of this Section. The
Issuer will give to the Trustee prompt written notice of any
such designation or rescission thereof.
SECTION 3.3 Appointment to Fill a Vacancy in
Office of Trustee. The Issuer, whenever necessary to avoid
or fill a vacancy in the office of Trustee, will appoint,
in the manner provided in Section 6.10, a Trustee, so that
there shall at all times be a Trustee with respect to each
series of Securities hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer
shall appoint a paying agent other than the Trustee with
respect to the Securities of any series, it will cause such
paying agent to execute and deliver to the Trustee an instru-
ment in which such agent shall agree with the Trustee, sub-
ject to the provisions of this Section,
(a) that it will hold all sums received by it
as such agent for the payment of the principal of
or interest on the Securities of such series
(whether such sums have been paid to it by the
Issuer or by any other obligor on the Securities of
such series) in trust for the benefit of the
Holders of the Securities of such series, or
Coupons appertaining thereto, if any, or of the
Trustee, and
(b) that it will give the Trustee notice of
any failure by the Issuer (or by any other obligor
on the Securities of such series) to make any
payment of the principal of or interest on the
Securities of such series when the same shall be
due and payable.
The Issuer will, on or prior to each due date of
the principal of or interest on the Securities of such
series, deposit with the paying agent a sum sufficient to pay
such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify
the Trustee of any failure to take such action.
If the Issuer shall act as its own paying agent
with respect to the Securities of any series, it will, on or
before each due date of the principal of or interest on the
Securities of such series, set aside, segregate and hold in
trust for the benefit of the Holders of the Securities of
such series or the Coupons appertaining thereto a sum suffi-
cient to pay such principal or interest so becoming due. The
Issuer will promptly notify the Trustee of any failure to
take such action.
Anything in this Section to the contrary not-
withstanding, but subject to Section 10.1, the Issuer may at
any time, for the purpose of obtaining a satisfaction and
discharge with respect to one or more or all series of
Securities hereunder, or for any other reason, pay or cause
to be paid to the Trustee all sums held in trust for any such
series by the Issuer or any paying agent hereunder, as
required by this Section, such sums to be held by the Trustee
upon the trusts herein contained.
Anything in this Section to the contrary not-
withstanding, the agreement to hold sums in trust as provided
in this Section is subject to the provisions of Sections 10.3
and 10.4.
SECTION 3.5 Written Statement to Trustee. The
Issuer will deliver to the Trustee on or before March 31 in
each year (beginning with March 31, 1991) an Officer's Cer-
tificate (which need not comply with Section 11.5) stating
that in the course of the performance by the signers of their
duties as officers of the Administrative General Partner they
would normally have knowledge of any default by the Issuer in
the performance of any covenants contained in this Indenture,
stating whether or not they have knowledge of any such
default and, if so, specifying each such default of which the
signers have knowledge and the nature thereof.
SECTION 3.6 Luxembourg Publications. In the event
of the publication of any notice pursuant to Section 5.11,
6.8, 6.10(a), 6.11, 8.2, 10.4, 12.2 or 12.5, the party making
such publication in the Borough of Manhattan, The City of New
York and London shall also, to the extent that notice is
required to be given to Holders of Securities of any series
by applicable Luxembourg law or stock exchange regulation, as
evidenced by an Officer's Certificate delivered to such
party, make a similar publication in Luxembourg.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information
as to Names and Addresses of Securityholders. The Issuer and
any other obligor on the Securities covenant and agree that
they will furnish or cause to be furnished to the Trustee a
list in such form as the Trustee may reasonably require of
the names and addresses of the Holders of the Registered
Securities of each series:
(a) semiannually and not more than 15 days
after each March 1 and September 1, and
(b) at such other times as the Trustee may
request in writing, within 30 days after receipt by
the Issuer of any such request as of a date not
more than 15 days prior to the time such informa-
tion is furnished,
provided that if and so long as the Trustee shall be the
Security registrar for such series and all of the Securities
of any series are Registered Securities, such list shall not
be required to be furnished.
SECTION 4.2 Preservation and Disclosure of
Securityholders Lists. (a) The Trustee shall preserve, in
as current a form as is reasonably practicable, all informa-
tion as to the names and addresses of the Holders of each
series of Registered Securities (i) contained in the most
recent list furnished to it as provided in Section 4.1, (ii)
received by it in the capacity of Security registrar for such
series, if so acting, and (iii) filed with it within two
preceding years pursuant to 4.4(c)(ii). The Trustee may
destroy any list furnished to it as provided in Section 4.1
upon receipt of a new list so furnished.
(b) In case three or more Holders of Securities
(hereinafter referred to as "applicants") apply in writing to
the Trustee and furnish to the Trustee reasonable proof that
each such applicant has owned a Security for a period of at
least six months preceding the date of such application, and
such application states that the applicants desire to com-
municate with other Holders of Securities of a particular
series (in which case the applicants must all hold Securities
of such series) or with Holders of all Securities with
respect to their rights under this Indenture or under such
Securities and such application is accompanied by a copy of
the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such applica-
tion, at its election, either
(i) afford to such applicants access to the
information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of
this Section, or
(ii) inform such applicants as to the
approximate number of Holders of Registered
Securities of such series or of all Registered
Securities, as the case may be, whose names and
addresses appear in the information preserved at
the time by the Trustee, in accordance with the
provisions of subsection (a) of this Section, and
as to the approximate cost of mailing to such
Securityholders the form of proxy or other com-
munication, if any, specified in such application.
If the Trustee shall elect not to afford to such
applicants access to such information, the Trustee shall,
upon the written request of such applicants, mail to each
Securityholder of such series or all Holders of Registered
Securities, as the case may be, whose name and address
appears in the information preserved at the time by the
Trustee in accordance with the provisions of subsection (a)
of this Section a copy of the form of proxy or other com-
munication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within
five days after such tender, the Trustee shall mail to such
applicants and file with the Commission together with a copy
of the material to be mailed, a written statement to the
effect that, in the opinion of the Trustee, such mailing
would be contrary to the best interests of the Holders of
Registered Securities of such series or of all Registered
Securities, as the case may be, or would be in violation of
applicable law. Such written statement shall specify the
basis of such opinion. If the Commission, after opportunity
for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain
any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that
all the objections so sustained have been met, and shall
enter an order so declaring, the Trustee shall mail copies of
such material to all such Securityholders with reasonable
promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their
application.
(c) Each and every Holder of Securities and
Coupons, by receiving and holding the same, agrees with the
Issuer and the Trustee that neither the Issuer nor the Trus-
tee nor any agent of the Issuer or the Trustee shall be held
accountable by reason of the disclosure of any such informa-
tion as to the names and addresses of the Holders of
Securities in accordance with the provisions of subsection
(b) of this Section, regardless of the source from which such
information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant
to a request made under such subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer
covenants:
(a) to file with the Trustee, within 15 days
after the Issuer is required to file the same with
the Commission, copies of the annual reports and of
the information, documents, and other reports (or
copies of such portions of any of the foregoing as
the Commission may from time to time by rules and
regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or if the Issuer is not
required to file information, documents, or reports
pursuant to either of such Sections, then to file
with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to
time by the Commission, such of the supplementary
and periodic information, documents, and reports
which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934, in respect of a
debt security listed and registered on a national
securities exchange as may be prescribed from time
to time in such rules and regulations;
(b) to file with the Trustee and the Commis-
sion, in accordance with rules and regulations
prescribed from time to time by the Commission,
such additional information, documents, and reports
with respect to compliance by the Issuer with the
conditions and covenants provided for in this
Indenture as may be required from time to time by
such rules and regulations; and
(c) to transmit by mail to the Holders of
Securities within 30 days after the filing thereof
with the Trustee, in the manner and to the extent
provided in Section 4.4(c), such summaries of any
information, documents and reports required to be
filed by the Issuer pursuant to subsections (a) and
(b) of this Section as may be required to be trans-
mitted to such Holders by rules and regulations
prescribed from time to time by the Commission.
SECTION 4.4 Reports by the Trustee. (a) Within
60 days after May 15 of each year commencing with the year
1991, the Trustee shall transmit by mail to the Holders of
Securities, as provided in Subsection (c) of this Section, a
brief report dated as of such May 15 with respect to:
(i) its eligibility under Section 6.9 and
its qualification under Section 6.8, or in lieu
thereof, if to the best of its knowledge it has
continued to be eligible and qualified under such
Sections, a written statement to such effect;
(ii) the character and amount of any advances
(and if the Trustee elects so to state, the circum-
stances surrounding the making thereof) made by the
Trustee (as such) which remain unpaid on the date
of such report and for the reimbursement of which
it claims or may claim a lien or charge, prior to
that of the Securities of any series, on any
property or funds held or collected by it as Trus-
tee, except that the Trustee shall not be required
(but may elect) to report such advances if such
advances so remaining unpaid aggregate not more
than 1/2 of 1% of the principal amount of the
Securities of any series Outstanding on the date of
such report;
(iii) the amount, interest rate, and maturity
date of all other indebtedness owing by the Issuer
(or by any other obligor on the Securities) to the
Trustee in its individual capacity on the date of
such report, with a brief description of any
property held as collateral security therefor,
except any indebtedness based upon a creditor
relationship arising in any manner described in
Section 6.13(b)(2), (3), (4) or (6);
(iv) the property and funds, if any, physi-
cally in the possession of the Trustee (as such) on
the date of such report;
(v) any additional issue of Securities which
the Trustee has not previously reported; and
(vi) any action taken by the Trustee in the
performance of its duties under this Indenture
which it has not previously reported and which in
its opinion materially affects the Securities,
except action in respect of a default, notice of
which has been or is to be withheld by it in
accordance with the provisions of Section 5.11.
(b) The Trustee shall transmit to the
Securityholders of each series, as provided in subsection (c)
of this Section, a brief report with respect to the character
and amount of any advances (and if the Trustee elects so to
state, the circumstances surrounding the making thereof) made
by the Trustee, as such, since the date of the last report
transmitted pursuant to the provisions of subsection (a) of
this Section (or if no such report has yet been so trans-
mitted, since the date of this Indenture) for the reimburse-
ment of which it claims or may claim a lien or charge prior
to that of the Securities of such series on property or funds
held or collected by it as Trustee and which it has not
previously reported pursuant to this subsection (b), except
that the Trustee shall not be required (but may elect) to
report such advances if such advances remaining unpaid at any
time aggregate 10% or less of the principal amount of
Securities of such series outstanding at such time, such
report to be transmitted within 90 days after such time.
(c) Reports pursuant to this Section shall be
transmitted by mail:
(i) to all Holders of Registered Securities,
as the names and addresses of such Holders appear
upon the registry books of the Issuer;
(ii) to such other Holders of Securities as
have, within two years preceding such transmission,
filed their names and addresses with the Trustee
for that purpose; and
(iii) except in the case of reports pursuant to
subsection (b), to each Holder of a Security whose
name and address are preserved at the time by the
Trustee as provided in Section 4.2(a).
(d) A copy of each such report shall, at the time
of such transmission to Securityholders, be furnished to the
Issuer and be filed by the Trustee with each stock exchange
upon which the Securities of any applicable series are listed
and also with the Commission. The Issuer agrees to notify
the Trustee with respect to any series when and as the
Securities of such series become admitted to trading on any
national securities exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration
of Maturity; Waiver of Default. "Event of Default" with
respect to Securities of any series wherever used herein,
means each one of the following events which shall have
occurred and be continuing (whatever the reason for such
Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(a) default in the payment of any instalment
of interest upon any of the Securities of such
series as and when the same shall become due and
payable, and continuance of such default for a
period of 30 days; or
(b) default in the payment of all or any part
of the principal of any of the Securities of such
series as and when the same shall become due and
payable either at maturity, upon any redemption,
by declaration or otherwise; provided that, if such
default is a result of the voluntary redemption by
the Holders of such Securities, the amount thereof
shall be in excess of $10,000,000 or the equivalent
thereof in any currency or composite currency; or
(c) failure on the part of the Issuer duly to
observe or perform any other of the covenants or
agreements on the part of the Issuer in the
Securities of such series (other than a covenant or
warranty in respect of the Securities of such
series a default in the performance or breach of
which is elsewhere in this Section specifically
dealt with) or in this Indenture contained for a
period of 60 days after the date on which written
notice specifying such failure, stating that such
notice is a "Notice of Default" hereunder and
demanding that the Issuer remedy the same, shall
have been given by registered or certified mail,
return receipt requested, to the Issuer by the
Trustee, or to the Issuer and the Trustee by the
holders of at least 25% in aggregate principal
amount of the Outstanding Securities of such
series; or
(d) a court having jurisdiction in the
premises shall enter a decree or order for relief
in respect of the Issuer in an involuntary case
under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, cus-
todian, trustee, sequestrator (or similar official)
of the Issuer or for any substantial part of its
property or ordering the winding up or liquidation
of its affairs, and such decree or order shall
remain unstayed and in effect for a period of 60
consecutive days; or
(e) the Issuer shall commence a voluntary
case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an
involuntary case under any such law, or consent to
the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Issuer or
for any substantial part of its property, or make
any general assignment for the benefit of
creditors; or
(f) failure by the Issuer to make any payment
at maturity (or upon the redemption), including any
applicable grace period, in respect of indebted-
ness, which term as used herein means obligations
(other than the Securities of such series or non-
recourse obligations) of, or guaranteed or assumed
by, the Issuer for borrowed money or evidenced by
bonds, debentures, notes or other similar instru-
ments ("Indebtedness") in an amount in excess of
$50,000,000 or the equivalent thereof in any other
currency or composite currency and such failure
shall have continued for a period of thirty days
after written notice thereof shall have been given
by registered or certified mail, return receipt
requested, to the Issuer by the Trustee, or to the
Issuer and the Trustee by the holders of not less
than 25% in aggregate principal amount of the
Outstanding Securities of such series; or
(g) a default with respect to any Indebted-
ness, which default results in the acceleration of
Indebtedness in an amount in excess of $50,000,000
or the equivalent thereof in any other currency or
composite currency without such Indebtedness having
been discharged or such acceleration having been
cured, waived, rescinded or annulled for a period
of thirty days after written notice thereof shall
have been given by registered or certified mail,
return receipt requested, to the Issuer by the
Trustee, or to the Issuer and the Trustee by the
holders of not less than 25% in aggregate principal
amount of the Outstanding Securities of such
series; or
(h) any other Event of Default provided in
the supplemental indenture under which such series
of Securities is issued or in the form of Security
for such series;
provided that if any such failure, default or acceleration
referred to in clauses (f), (g) and (h) or the proviso to
clause (b) above shall cease to exist or be cured, waived,
rescinded or annulled, then the Event of Default hereunder by
reason thereof, and any acceleration under this Section 5.1
resulting solely therefrom, shall be deemed likewise to have
been thereupon cured.
If an Event of Default occurs and is continuing
with respect to the Securities of any series, then, and in
each and every such case, except for any series of Securities
the principal of which shall have already become due and
payable, either the Trustee or the Holders of not less than
25% in aggregate principal amount of the Securities of such
series then Outstanding hereunder by notice in writing to the
Issuer (and to the Trustee if given by Securityholders), may
declare the entire principal (or, if the Securities of such
series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of
such series) of all Securities of such series, and the inter-
est accrued thereon, if any, to be due and payable
immediately, and upon any such declaration, the same shall
become immediately due and payable.
The foregoing provisions, however, are subject to
the condition that if, at any time after the principal (or,
if the Securities are Original Issue Discount Securities,
such portion of the principal as may be specified in the
terms thereof) of the Securities of any series shall have
been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Issuer shall
pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest upon all the Securities
of each such series and the principal of any and all
Securities of such series which shall have become due other-
wise than by acceleration (with interest upon such principal
and, to the extent that payment of such interest is enforce-
able under applicable law, on overdue installments of inter-
est, at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities)
specified in the Securities of such series to the date of
such payment or deposit) and such amount as shall be suffi-
cient to cover reasonable compensation to the Trustee and
each predecessor Trustee, its agents, attorneys and counsel,
and all other expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith, and if any and
all Events of Default under the Indenture, other than the
non-payment of the principal of Securities which shall have
become due by acceleration, shall have been cured, waived or
otherwise remedied as provided herein -- then and in every
such case the Holders of a majority in aggregate principal
amount of all the Securities of such series then Outstanding,
by written notice to the Issuer and to the Trustee, may waive
all defaults with respect to each such series and rescind and
annul such declaration and its consequences, but no such
waiver or rescission and annulment shall extend to or shall
affect any subsequent default or shall impair any right
consequent thereon.
For all purposes under this Indenture, if a portion
of the principal of any Original Issue Discount Securities
shall have been accelerated and declared due and payable
pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and
annulled, the principal amount of such Original Issue Dis-
count Securities shall be deemed, for all purposes hereunder,
to be such portion of the principal thereof as shall be due
and payable as a result of such acceleration, and payment of
such portion of the principal thereof as shall be due and
payable as a result of such acceleration, together with
interest, if any, thereon and all other amounts owing there-
under, shall constitute payment in full of such Original
Issue Discount Securities.
SECTION 5.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt. The Issuer covenants that (a) in
case default shall be made in the payment of any instalment
of interest on any of the Securities of any series when such
interest shall have become due and payable, and such default
shall have continued for a period of 30 days or (b) in case
default shall be made in the payment of all or any part of
the principal of any of the Securities of any series when the
same shall have become due and payable, whether upon maturity
of the Securities of such series or upon any redemption or by
declaration or otherwise -- then upon demand of the Trustee,
the Issuer will pay to the Trustee for the benefit of the
Holders of the Securities of such series the whole amount
that then shall have become due and payable on all Securities
of such series, and such Coupons, for principal or interest,
as the case may be (with interest to the date of such payment
upon the overdue principal and, to the extent that payment of
such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such
series); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of col-
lection, including reasonable compensation to the Trustee and
each predecessor Trustee, their respective agents, attorneys
and counsel, and any expenses and liabilities incurred, and
all advances made, by the Trustee and each predecessor Trus-
tee except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the
Issuer may pay the principal of and interest on the
Securities of any series to the registered Holders, whether
or not the Securities of such Series be overdue.
In case the Issuer shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered
to institute any action or proceedings at law or in equity
for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final
decree, and may enforce any such judgment or final decree
against the Issuer or other obligor upon the Securities and
collect in the manner provided by law out of the property of
the Issuer or other obligor upon the Securities, wherever
situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative
to the Issuer or any other obligor upon the Securities under
Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the
Issuer or its property or such other obligor, or in case of
any other comparable judicial proceedings relative to the
Issuer or other obligor upon the Securities, or to the
creditors or property of the Issuer or such other obligor,
the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand pursuant to the provi-
sions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for
the whole amount of principal and interest (or, if
the Securities of any series are Original Issue
Discount Securities, such portion of the principal
amount as may be specified in the terms of such
series) owing and unpaid in respect of the
Securities of any series, and to file such other
papers or documents as may be necessary or
advisable in order to have the claims of the Trus-
tee (including any claim for reasonable compensa-
tion to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the
Securityholders allowed in any judicial proceedings
relative to the Issuer or other obligor upon the
Securities, or to the creditors or property of the
Issuer or such other obligor,
(b) unless prohibited by applicable law and
regulations, to vote on behalf of the holders of
the Securities of any series in any election of a
trustee or a standby trustee in arrangement, reor-
ganization, liquidation or other bankruptcy or
insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other
property payable or deliverable on any such claims,
and to distribute all amounts received with respect
to the claims of the Securityholders and of the
Trustee on their behalf; and any trustee, receiver,
or liquidator, custodian or other similar official
is hereby authorized by each of the Securityholders
to make payments to the Trustee, and, in the event
that the Trustee shall consent to the making of
payments directly to the Securityholders, to pay to
the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents,
attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a
result of negligence or bad faith.
Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or vote for
or accept or adopt on behalf of any Securityholder any plan
of reorganization, arrangement, adjustment or composition
affecting the Securities of any series or the rights of any
Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such
proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under
this Indenture, or under any of the Securities of any series
or Coupons appertaining to such Securities, may be enforced
by the Trustee without the possession of any of the
Securities of such series or Coupons appertaining to such
Securities or the production thereof on any trial or other
proceedings relative thereto, and any such action or proceed-
ings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disburse-
ments and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be
for the ratable benefit of the Holders of the Securities or
Coupons appertaining to such Securities in respect of which
such action was taken.
In any proceedings brought by the Trustee (and also
any proceedings involving the interpretation of any provision
of this Indenture to which the Trustee shall be a party) the
Trustee shall be held to represent all the Holders of the
Securities or Coupons appertaining to such Securities in
respect to which such action was taken, and it shall not be
necessary to make any Holders of such Securities or Coupons
appertaining to such Securities parties to any such proceed-
ings.
SECTION 5.3 Application of Proceeds. Any moneys
collected by the Trustee pursuant to this Article in respect
of any series shall, subject to the subordination provisions
hereof, be applied in the following order at the date or
dates fixed by the Trustee and, in case of the distribution
of such moneys on account of principal or interest, upon
presentation of the several Securities and Coupons appertain-
ing to such Securities in respect of which monies have been
collected and stamping (or otherwise noting) thereon the
payment, or issuing Securities of such series in reduced
principal amounts in exchange for the presented Securities of
like series if only partially paid, or upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses
applicable to such series in respect of which
monies have been collected, including any and all
amounts due the Trustee under Section 6.6;
SECOND: In case the principal of the
Securities of such series in respect of which
moneys have been collected shall not have become
and be then due and payable, to the payment of
interest on the Securities of such series in
default in the order of the maturity of the
installments of such interest, with interest (to
the extent that such interest has been collected by
the Trustee) upon the overdue installments of
interest at the same rate as the rate of interest
or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in such Securities,
such payments to be made ratably to the persons
entitled thereto, without discrimination or
preference;
THIRD: In case the principal of the
Securities of such series in respect of which
moneys have been collected shall have become and
shall be then due and payable, to the payment of
the whole amount then owing and unpaid upon all the
Securities of such series for principal and inter-
est, with interest upon the overdue principal, and
(to the extent that such interest has been col-
lected by the Trustee) upon overdue installments of
interest at the same rate as the rate of interest
or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of
such series; and in case such moneys shall be
insufficient to pay in full the whole amount so due
and unpaid upon the Securities of such series, then
to the payment of such principal and interest or
Yield to Maturity, without preference or priority
of principal over interest or Yield to Maturity,
or of interest or Yield to Maturity over principal,
or of any instalment of interest over any other
instalment of interest, or of any Security of such
series over any other Security of such series,
ratably to the aggregate of such principal and
accrued and unpaid interest or Yield to Maturity;
and
FOURTH: To the payment of the remainder, if
any, to the Issuer or any other person lawfully
entitled thereto.
SECTION 5.4 Suits for Enforcement. In case an
Event of Default has occurred, has not been waived and is
continuing, the Trustee may in its discretion proceed to
protect and enforce the rights vested in it by this Indenture
by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or other-
wise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture or to enforce
any other legal or equitable right vested in the Trustee by
this Indenture or by law.
SECTION 5.5 Restoration of Rights on Abandonment
of Proceedings. In case the Trustee or any Security Holder
shall have proceeded to enforce any right under this Inden-
ture and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been finally deter-
mined adversely to the Trustee or such Security Holder, then
and in every such case the Issuer and the Trustee shall be
restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Issuer,
the Trustee and the Securityholders shall continue as though
no such proceedings had been taken.
SECTION 5.6 Limitations on Suits by Security-
holders. No Holder of any Security of any series or of any
Coupon appertaining thereto shall have any right by virtue
or by availing of any provision of this Indenture to
institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this
Indenture, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any
other remedy hereunder, unless such Holder previously shall
have given to the Trustee written notice of default and of
the continuance thereof, as hereinbefore provided, and unless
also the Holders of not less than 25% in aggregate principal
amount of the Securities of such affected series then Out-
standing shall have made written request upon the Trustee to
institute such action or proceedings in its own name as
trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby
and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute
any such action or proceeding and no direction inconsistent
with such written request shall have been given to the Trus-
tee pursuant to Section 5.9; it being understood and
intended, and being expressly covenanted by the Holder of
every Security or Coupon with every other Holder and the
Trustee, that no one or more Holders of Securities of any
series or Coupons appertaining to such Securities shall have
any right in any manner whatever by virtue or by availing of
any provision of this Indenture to affect, disturb or
prejudice the rights of any other such Holder of Securities
or Coupons appertaining to such Securities, or to obtain or
seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of the applicable
series and Coupons appertaining to such Securities. For the
protection and enforcement of the provisions of this Section,
each and every Securityholder and the Trustee shall be
entitled to such relief as can be given either at law or in
equity.
SECTION 5.7 Unconditional Right of Securityholders
to Institute Certain Suits. Notwithstanding any other provi-
sion in this Indenture and any provision of any Security, the
right of any Holder of any Security or Coupon to receive
payment of the principal of and interest on such Security or
Coupon on or after the respective due dates expressed in such
Security or Coupon, or to institute suit for the enforcement
of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such
Holder.
SECTION 5.8 Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default. Except as provided in
Sections 2.9 and 5.6, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders of
Securities or Coupons is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any
Holder of Securities or Coupons to exercise any right or
power accruing upon any Event of Default occurring and con-
tinuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of
Default or an acquiescence therein; and, subject to Section
5.6, every power and remedy given by this Indenture or by
law to the Trustee or to the Holders of Securities or Coupons
may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Holders of
Securities or Coupons.
SECTION 5.9 Control by Holders of Securities. The
Holders of a majority in aggregate principal amount of the
Securities of any series affected at the time Outstanding
shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the
Trustee with respect to the Securities of such series pur-
suant to this Indenture; provided that such direction shall
not be otherwise than in accordance with law and the provi-
sions of this Indenture and provided further that (subject to
the provisions of Section 6.1) the Trustee shall have the
right to decline to follow any such direction if the Trustee,
being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken or if the
Trustee in good faith by its board of directors, the execu-
tive committee, or a trust committee of directors or Respon-
sible Officers of the Trustee shall determine that the action
or proceedings so directed would involve the Trustee in
personal liability or if the Trustee in good faith shall so
determine that the actions or forebearances specified in or
pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities of all series so
affected not joining in the giving of said direction, it
being understood that (subject to Section 6.1) the Trustee
shall have no duty to ascertain whether or not such actions
or forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of
the Trustee in its discretion to take any action deemed
proper by the Trustee and which is not inconsistent with such
direction or directions by Securityholders.
SECTION 5.10 Waiver of Past Defaults. Prior to
the acceleration of the maturity of any Securities as
provided in Section 5.1, the Holders of a majority in
aggregate principal amount of the Securities of any series at
the time Outstanding with respect to which an Event of
Default shall have occurred and be continuing may on behalf
of the Holders of all such Securities waive any past default
or Event of Default with respect to such series described in
Section 5.1 and its consequences, except a default in respect
of a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Security
affected (including, without limitation, the provisions with
respect to payment of principal of and interest on such
Security). In the case of any such waiver, the Issuer, the
Trustee and the Holders of all such Securities shall be
restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any sub-
sequent or other default or impair any right consequent
thereon.
Upon any such waiver, such default shall cease to
exist and be deemed to have been cured and not to have
occurred, and any Event of Default arising therefrom shall be
deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair
any right consequent thereon.
SECTION 5.11 Trustee to Give Notice of Default,
But May Withhold in Certain Circumstances. The Trustee shall
at Issuer's expense, within ninety days after the occurrence
of a default with respect to the Securities of any series,
give notice of all defaults with respect to that series known
to the Trustee (i) if any Unregistered Securities of that
series are then Outstanding, to the Holders thereof, by
publication at least once in an Authorized Newspaper in the
Borough of Manhattan, The City of New York and at least once
in an Authorized Newspaper in London (and, if required by
Section 3.6, at least once in an Authorized Newspaper in
Luxembourg) and (ii) to all Holders of Securities of such
series in the manner and to the extent provided in Section
4.4(c), unless in each case such defaults shall have been
cured before the mailing or publication of such notice (the
term "defaults" for the purpose of this Section being hereby
defined to mean any event or condition which is, or with
notice or lapse of time or both would become, an Event of
Default); provided that, except in the case of default in
the payment of the principal of or interest on any of the
Securities of such series, or in the payment of any sinking
fund instalment on such series, the Trustee shall be
protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust
committee of directors or trustees and/or Responsible
Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the
Securityholders of such series.
SECTION 5.12 Right of Court to Require Filing of
Undertaking to Pay Costs. All parties to this Indenture
agree, and each Holder of any Security or Coupon by his
acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture or in
any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any
party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply
to any suit instituted by the Trustee, to any suit instituted
by any Securityholder or group of Securityholders of any
series holding in the aggregate more than 10% in aggregate
principal amount of the Securities of such series then Out-
standing, or to any suit instituted by any Securityholder for
the enforcement of the payment of the principal of or inter-
est on any Security on or after the due date expressed in
such Security or any date fixed for redemption.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the
Trustee; During Default; Prior to Default. With respect to
the Holders of any series of Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default with
respect to the Securities of a particular series and after
the curing or waiving of all Events of Default which may have
occurred with respect to such series, undertakes to perform
such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has
not been cured or waived) the Trustee shall exercise with
respect to such series of Securities such of the rights and
powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct
of his own affairs.
No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own wilful
misconduct, except that
(a) prior to the occurrence of an Event of
Default with respect to the Securities of any
series and after the curing or waiving of all such
Events of Default with respect to such series which
may have occurred:
(i) the duties and obligations of the
Trustee with respect to the Securities of any
series shall be determined solely by the
express provisions of this Indenture, and the
Trustee shall not be liable except for the
performance of such duties and obligations as
are specifically set forth in this Indenture,
and no implied covenants or obligations shall
be read into this Indenture against the Trus-
tee; and
(ii) in the absence of bad faith on the
part of the Trustee, the Trustee may con-
clusively rely, as to the truth of the state-
ments and the correctness of the opinions
expressed therein, upon any statements, cer-
tificates or opinions furnished to the Trustee
and conforming to the requirements of this
Indenture; but in the case of any such state-
ments, certificates or opinions which by any
provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to deter-
mine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any
error of judgment made in good faith by a Respon-
sible Officer or Responsible Officers of the Trus-
tee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with
respect to any action taken or omitted to be taken
by it in good faith in accordance with the direc-
tion of the Holders pursuant to Section 5.9 relat-
ing to the time, method and place of conducting any
proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the
Trustee, under this Indenture.
None of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the per-
formance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for
believing that the repayment of such funds or adequate indem-
nity against such liability is not reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Sub-
ject to Section 6.1:
(a) the Trustee may rely and shall be
protected in acting or refraining from acting upon
any resolution, Officer's Certificate or any other
certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond,
debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have
been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand
of the Issuer mentioned herein shall be suffi-
ciently evidenced by an Officer's Certificate
(unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the
Board of Directors may be evidenced to the Trustee
by a copy thereof certified by the secretary or an
assistant secretary of the Administrative General
Partner;
(c) the Trustee may consult with counsel and
any written advice or any Opinion of Counsel shall
be full and complete authorization and protection
in respect of any action taken, suffered or omitted
to be taken by it hereunder in good faith and in
reliance thereon in accordance with such advice or
Opinion of Counsel;
(d) the Trustee shall be under no obligation
to exercise any of the trusts or powers vested in
it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to
the provisions of this Indenture, unless such
Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any
action taken or omitted by it in good faith and
believed by it to be authorized or within the
discretion, rights or powers conferred upon it by
this Indenture;
(f) prior to the occurrence of an Event of
Default hereunder and after the curing or waiving
of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or
matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper
or document unless requested in writing so to do by
the Holders of not less than a majority in
aggregate principal amount of the Securities of all
series affected then Outstanding; provided that,
if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the
security afforded to it by the terms of this Inden-
ture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition
to proceeding; the reasonable expenses of every
such investigation shall be paid by the Issuer or,
if paid by the Trustee or any predecessor Trustee,
shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder
either directly or by or through agents or attor-
neys not regularly in its employ and the Trustee
shall not be responsible for any misconduct or
negligence on the part of any such agent or attor-
ney appointed with due care by it hereunder.
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of Proceeds Thereof.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken
as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee
makes no representation as to the validity or sufficiency of
this Indenture or of the Securities or Coupons. The Trustee
shall not be accountable for the use or application by the
Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities
or Coupons; Collections, etc. The Trustee or any agent of
the Issuer or the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Securities or
Coupons with the same rights it would have if it were not the
Trustee or such agent and, subject to Sections 6.8 and 6.13,
may otherwise deal with the Issuer and receive, collect, hold
and retain collections from the Issuer with the same rights
it would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to
the provisions of Section 10.4 hereof, all moneys received by
the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were
received, but need not be segregated from other funds except
to the extent required by mandatory provisions of law.
Neither the Trustee nor any agent of the Issuer or the Trus-
tee shall be under any liability for interest on any moneys
received by it hereunder.
SECTION 6.6 Compensation and Indemnification of
Trustee and Its Prior Claim. The Issuer covenants and agrees
to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and the Issuer
covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or
on behalf of it in accordance with any of the provisions of
this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents
and other persons not regularly in its employ) except any
such expense, disbursement or advance as may arise from its
negligence or bad faith. The Issuer also covenants to indem-
nify the Trustee and each predecessor Trustee for, and to
hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration
of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending
itself against or investigating any claim or liability in the
premises. The obligations of the Issuer under this Section
to compensate and indemnify the Trustee and each predecessor
Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture.
Such additional indebtedness shall be a senior claim to that
of the Securities upon all property and funds held or col-
lected by the Trustee as such, except funds held in trust for
the benefit of the Holders of particular Securities or
Coupons, and the Securities are hereby subordinated to such
senior claim.
SECTION 6.7 Right of Trustee to Rely on Officer's
Certificate, etc. Subject to Sections 6.1 and 6.2, whenever
in the administration of the trusts of this Indenture the
Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omit-
ting any action hereunder, such matter (unless other evidence
in respect thereof be herein specifically prescribed) may, in
the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established
by an Officer's Certificate delivered to the Trustee, and
such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted by it under
the provisions of this Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting
Interests. (a) If the Trustee has or shall acquire any
conflicting interest, as defined in this Section, it shall,
within 90 days after ascertaining that it has such conflict-
ing interest, either eliminate such conflicting interest or
resign in the manner and with the effect specified in this
Indenture.
(b) In the event that the Trustee shall fail to
comply with the provisions of subsection (a) of this Section,
the Trustee shall, within 10 days after the expiration of
such 90 day period, transmit by mail notice of such failure
to the Securityholders in the manner and to the extent
required by Section 4.4(c) and, if any Unregistered
Securities are then Outstanding, shall publish notice of such
failure at least once in an Authorized Newspaper in the
Borough of Manhattan, The City of New York and at least once
in an Authorized Newspaper in London (and, if required by
Section 3.6, at least once in an Authorized Newspaper in
Luxembourg).
(c) For the purposes of this Section, the Trustee
shall be deemed to have a conflicting interest with respect
to Securities of any series if
(i) the Trustee is trustee under this Inden-
ture with respect to the Outstanding Securities of
any other series or is a trustee under another
indenture under which any other securities, or
certificates of interest or participation in any
other securities, of the Issuer are outstanding,
unless such other indenture is a collateral trust
indenture under which the only collateral consists
of Securities issued under this Indenture; provided
that there shall be excluded from the operation of
this paragraph this Indenture with respect to the
Securities of any other series and there shall also
be so excluded any other indenture or indentures
under which other securities, or certificates of
interest or participation in other securities, of
the Issuer are outstanding if (i) this Indenture is
and, if applicable, this Indenture and any series
issued pursuant to this Indenture and such other
indenture or indentures are wholly unsecured, and
such other indenture or indentures are hereafter
qualified under the Trust Indenture Act of 1939,
unless the Commission shall have found and declared
by order pursuant to Section 305(b) or Section
307(c) of the Trust Indenture Act of 1939 that
differences exist between the provisions of this
Indenture with respect to Securities of such series
and one or more other series, or the provisions of
this Indenture and the provisions of such other
indenture or indentures which are so likely to
involve a material conflict of interest as to make
it necessary in the public interest or for the
protection of investors to disqualify the Trustee
from acting as such under this Indenture with
respect to Securities of such series and such other
series, or under this Indenture or such other
indenture or indentures, or (ii) the Issuer shall
have sustained the burden of proving, on applica-
tion to the Commission and after opportunity for
hearing thereon, that trusteeship under this Inden-
ture with respect to Securities of such series and
such other series, or under this Indenture and such
other indenture or indentures is not so likely to
involve a material conflict of interest as to make
it necessary in the public interest or for the
protection of investors to disqualify the Trustee
from acting as such under this Indenture with
respect to Securities of such series and such other
series, or under this Indenture and such other
indentures;
(ii) the Trustee or any of its directors or
executive officers is an obligor upon the
Securities of any series issued under this Inden-
ture or an underwriter for the Issuer;
(iii) the Trustee directly or indirectly con-
trols or is directly or indirectly controlled by or
is under direct or indirect common control with the
Issuer or an underwriter for the Issuer;
(iv) the Trustee or any of its directors or
executive officers is a director, officer, partner,
employee, appointee, or representative of the
Issuer, or of an underwriter (other than the Trus-
tee itself) for the Issuer who is currently engaged
in the business of underwriting, except that (x)
one individual may be a director or an executive
officer, or both, of the Trustee and a director or
an executive officer, or both, of the Issuer, but
may not be at the same time an executive officer of
both the Trustee and the Issuer; (y) if and so long
as the number of directors of the Trustee in office
is more than nine, one additional individual may be
a director or an executive officer, or both, of the
Trustee and a director of the Issuer; and (z) the
Trustee may be designated by the Issuer or by any
underwriter for the Issuer to act in the capacity
of transfer agent, registrar, custodian, paying
agent, fiscal agent, escrow agent, or depositary,
or in any other similar capacity, or, subject to
the provisions of subsection (c)(i) of this Sec-
tion, to act as trustee, whether under an indenture
or otherwise;
(v) 10% or more of the voting securities of
the Trustee is beneficially owned either by the
Issuer or by any director, partner or executive
officer thereof, or 20% or more of such voting
securities is beneficially owned, collectively, by
any two or more of such persons; or 10% or more of
the voting securities of the Trustee is benefi-
cially owned either by an underwriter for the
Issuer or by any director, partner, or executive
officer thereof, or is beneficially owned, collec-
tively, by any two or more such persons;
(vi) the Trustee is the beneficial owner of,
or holds as collateral security for an obligation
which is in default, (x) 5% or more of the voting
securities or 10% or more of any other class of
security of the Issuer, not including the
Securities issued under this Indenture and
securities issued under any other indenture under
which the Trustee is also trustee, or (y) 10% or
more of any class of security of an underwriter for
the Issuer;
(vii) the Trustee is the beneficial owner of,
or holds as collateral security for an obligation
which is in default, 5% or more of the voting
securities of any person who, to the knowledge of
the Trustee, owns 10% or more of the voting
securities of, or controls directly or indirectly
or is under direct or indirect common control with,
the Issuer;
(viii) the Trustee is the beneficial owner of,
or holds as collateral security for an obligation
which is in default, 10% or more of any class of
security of any person who, to the knowledge of the
Trustee, owns 50% or more of the voting securities
of the Issuer; or
(ix) the Trustee owns on May 15 in any calen-
dar year, in the capacity of executor,
administrator, testamentary or inter vivos trustee,
guardian, committee or conservator, or in any other
similar capacity, an aggregate of 25% or more of
the voting securities, or of any class of security,
of any person, the beneficial ownership of a
specified percentage of which would have con-
stituted a conflicting interest under Section
6.8(c)(vi), (vii) or (viii). As to any such
securities of which the Trustee acquired ownership
through becoming executor, administrator, or tes-
tamentary trustee of an estate which included them,
the provisions of the preceding sentence shall not
apply, for a period of two years from the date of
such acquisition, to the extent that such
securities included in such estate do not exceed
25% of such voting securities or 25% of any such
class of security. Promptly after May 15 in each
calendar year, the Trustee shall make a check of
its holdings of such securities in any of the
above-mentioned capacities as of such May 15. If
the Issuer fails to make payment in full of prin-
cipal of or interest on any of the Securities when
and as the same becomes due and payable, and such
failure continues for 30 days thereafter, the
Trustee shall make a prompt check of its holdings
of such securities in any of the above-mentioned
capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding
the foregoing provisions of this paragraph, all
such securities so held by the Trustee, with sole
or joint control over such securities vested in it,
shall, but only so long as such failure shall
continue, be considered as though beneficially
owned by the Trustee for the purposes of subsec-
tions (c)(vi), (vii) and (viii) of this Section.
The specification of percentages in subsections
(c)(v) to (ix) inclusive of this Section shall not be con-
strued as indicating that the ownership of such percentages
of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the
purposes of subsections (c)(iii) or (vii) of this Section.
For the purposes of subsections (c)(vi), (vii),
(viii) and (ix), of this Section, only,
(i) the terms "security" and "securities"
shall include only such securities as are generally
known as corporate securities, but shall not
include any note or other evidence of indebtedness
issued to evidence an obligation to repay moneys
lent to a person by one or more banks, trust com-
panies, or banking firms, or any certificate of
interest or participation in any such note or
evidence of indebtedness;
(ii) an obligation shall be deemed to be in
default when a default in payment of principal
shall have continued for 30 days or more and shall
not have been cured; and
(iii) the Trustee shall not be deemed to be the
owner or holder of (x) any security which it holds
as collateral security, as trustee or otherwise,
for an obligation which is not in default as
defined in clause (ii) above, or (y) any security
which it holds as collateral security under this
Indenture, irrespective of any default hereunder,
or (z) any security which it holds as agent for
collection, or as custodian, escrow agent, or
depositary, or in any similar representative
capacity.
Except as provided above, the word "security" or
"securities" as used in this Section shall mean any note,
stock, treasury stock, bond, debenture, evidence of indebted-
ness, certificate of interest or participation in any profit-
sharing agreement, collateral trust certificate, preorganiza-
tion certificate or subscription, transferable share, invest-
ment contract, voting trust certificate, certificate of
deposit for a security, fractional undivided interest in oil,
gas or other mineral rights, or, in general, any interest or
instrument commonly known as a "security", or any certificate
of interest or participation in, temporary or interim cer-
tificate for, receipt for, guarantee of, or warrant or right
to subscribe to or purchase, any of the foregoing.
(d) For purposes of this Section:
(i) the term "underwriter" when used with
reference to the Issuer shall mean every person
who, within three years prior to the time as of
which the determination is made, has purchased from
the Issuer with a view to, or has offered or sold
for the Issuer in connection with, the distribution
of any security of the Issuer outstanding at such
time, or has participated or has had a direct or
indirect participation in any such undertaking, or
has participated or has had a participation in the
direct or indirect underwriting of any such under-
taking, but such term shall not include a person
whose interest was limited to a commission from an
underwriter or dealer not in excess of the usual
and customary distributors' or sellers' commission;
(ii) the term "director" shall mean any direc-
tor of a corporation or any individual performing
similar functions with respect to any organization
whether incorporated or unincorporated;
(iii) the term "person" shall mean an
individual, a corporation, a partnership, an
association, a joint-stock company, a trust, an
unincorporated organization, or a government or
political subdivision thereof; as used in this
paragraph, the term "trust" shall include only a
trust where the interest or interests of the
beneficiary or beneficiaries are evidenced by a
security;
(iv) the term "voting security" shall mean any
security presently entitling the owner or holder
thereof to vote in the direction or management of
the affairs of a person, or any security issued
under or pursuant to any trust, agreement or arran-
gement whereby a trustee or trustees or agent or
agents for the owner or holder of such security are
presently entitled to vote in the direction or
management of the affairs of a person;
(v) the term "Issuer" shall mean any obligor
upon the Securities; and
(vi) the term "executive officer" shall mean
the president, every vice president, every trust
officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual
customarily performing similar functions with
respect to any organization whether incorporated or
unincorporated, but shall not include the chairman
of the board of directors.
(e) The percentages of voting securities and
other securities specified in this Section shall be calcu-
lated in accordance with the following provisions:
(i) a specified percentage of the voting
securities of the Trustee, the Issuer or any other
person referred to in this Section (each of whom is
referred to as a "person" in this paragraph) means
such amount of the outstanding voting securities of
such person as entitles the holder or holders
thereof to cast such specified percentage of the
aggregate votes which the holders of all the out-
standing voting securities of such person are
entitled to cast in the direction or management of
the affairs of such person;
(ii) a specified percentage of a class of
securities of a person means such percentage of the
aggregate amount of securities of the class out-
standing;
(iii) the term "amount", when used in regard to
securities, means the principal amount if relating
to evidences of indebtedness, the number of shares
if relating to capital shares, and the number of
units if relating to any other kind of security;
(iv) the term "outstanding" means issued and
not held by or for the account of the issuer; the
following securities shall not be deemed outstand-
ing within the meaning of this definition:
(A) securities of an issuer held in a
sinking fund relating to securities of the
issuer of the same class;
(B) securities of an issuer held in a
sinking fund relating to another class of
securities of the issuer, if the obligation
evidenced by such other class of securities is
not in default as to principal or interest or
otherwise;
(C) securities pledged by the issuer
thereof as security for an obligation of the
issuer not in default as to principal or
interest or otherwise; and
(D) securities held in escrow if placed
in escrow by the issuer thereof;
provided, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is
entitled to exercise the voting rights thereof; and
(v) a security shall be deemed to be of the
same class as another security if both securities
confer upon the holder or holders thereof substan-
tially the same rights and privileges; provided,
that, in the case of secured evidences of indebted-
ness, all of which are issued under a single inden-
ture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed
sufficient to constitute such series different
classes and provided, further, that, in the case of
unsecured evidences of indebtedness, differences in
the interest rates or maturity dates thereof shall
not be deemed sufficient to constitute them
securities of different classes, whether or not
they are issued under a single indenture.
SECTION 6.9 Persons Eligible for Appointment as
Trustee. The Trustee for each series of Securities hereunder
shall at all times be a corporation organized and doing
business under the laws of the United States of America or of
any State or the District of Columbia having a combined
capital and surplus of at least $5,000,000, and which is
authorized under such laws to exercise corporate trust powers
and is subject to supervision or examination by Federal,
State or District of Columbia authority. Such corporation
shall have its principal place of business in The City of
New York if there be such a corporation in such location
willing to act upon reasonable and customary terms and condi-
tions. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condi-
tion so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of
this Section, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.10.
SECTION 6.10 Resignation and Removal; Appointment
of Successor Trustee. (a) The Trustee, or any trustee or
trustees hereafter appointed, may at any time resign with
respect to one or more or all series of Securities by giving
written notice of resignation to the Issuer and (i) if any
Unregistered Securities of a series affected are then Out-
standing, by giving notice of such resignation to the Holders
thereof, by publication at least once in an Authorized
Newspaper in the Borough of Manhattan, The City of New York,
and at least once in an Authorized Newspaper in London (and,
if required by Section 3.6, at least once in an Authorized
Newspaper in Luxembourg), (ii) if any Unregistered Securities
of a series affected are then Outstanding, by mailing notice
of such resignation to the Holders thereof who have filed
their names and addresses with the Trustee pursuant to Sec-
tion 4.4(c)(ii) at such addresses as were so furnished to the
Trustee and (iii) by mailing notice of such resignation to
the Holders of then Outstanding Registered Securities of each
series affected at their addresses as they shall appear on
the registry books. Upon receiving such notice of resigna-
tion, the Issuer shall promptly appoint a successor trustee
or trustees with respect to the applicable series by written
instrument in duplicate, executed by authority of the Board
of Directors, one copy of which instrument shall be delivered
to the resigning Trustee and one copy to the successor trus-
tee or trustees. If no successor trustee shall have been so
appointed with respect to any series and have accepted
appointment within 30 days after the mailing of such notice
of resignation, the resigning trustee may petition any court
of competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona fide
Holder of a Security or Securities of the applicable series
for at least six months may, subject to the provisions of
Section 5.12, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint
a successor trustee.
(b) In case at any time any of the following shall
occur:
(i) the Trustee shall fail to comply with the
provisions of Section 6.8 with respect to any
series of Securities after written request therefor
by the Issuer or by any Securityholder who has been
a bona fide Holder of a Security or Securities of
such series for at least six months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.9 and
shall fail to resign after written request therefor
by the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of
acting with respect to any series of Securities,
or shall be adjudged a bankrupt or insolvent, or a
receiver or liquidator of the Trustee or of its
property shall be appointed, or any public officer
shall take charge or control of the Trustee or of
its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee
with respect to the applicable series of Securities and
appoint a successor trustee for such series by written
instrument, in duplicate, executed by order of the Board of
Directors of the Administrative General Partner, one copy
of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to
the provisions of Section 5.12, any Securityholder who has
been a bona fide Holder of a Security or Securities of such
series for at least six months may on behalf of himself and
all others similarly situated, petition any court of com-
petent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such
series. Such court may thereupon, after such notice, if any,
as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The Holders of a majority in aggregate prin-
cipal amount of the Securities of each series at the time
outstanding may at any time remove the Trustee with respect
to Securities of such series and appoint a successor trustee
with respect to the Securities of such series by delivering
to the Trustee so removed, to the successor trustee so
appointed and to the Issuer the evidence provided for in
Section 7.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with
respect to any series and any appointment of a successor
trustee with respect to such series pursuant to any of the
provisions of this Section 6.10 shall become effective upon
acceptance of appointment by the successor trustee as
provided in Section 6.11.
SECTION 6.11 Acceptance of Appointment by Succes-
sor Trustee. Any successor trustee appointed as provided in
Section 6.10 shall execute and deliver to the Issuer and to
its predecessor trustee an instrument accepting such appoint-
ment hereunder, and thereupon the resignation or removal of
the predecessor trustee with respect to all or any applicable
series shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become
vested with all rights, powers, duties and obligations with
respect to such series of its predecessor hereunder, with
like effect as if originally named as trustee for such series
hereunder; but, nevertheless, on the written request of the
Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, sub-
ject to Section 10.4, pay over to the successor trustee all
moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee
all such rights, powers, duties and obligations. Upon
request of any such successor trustee, the Issuer shall
execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee
all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a prior claim upon all property
or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section
6.6.
If a successor trustee is appointed with respect to
the Securities of one or more (but not all) series, the
Issuer, the predecessor Trustee and each successor trustee
with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which
shall contain such provisions as shall be deemed necessary
or desirable to confirm that all the rights, powers, trusts
and duties of the predecessor Trustee with respect to the
Securities of any series as to which the predecessor Trustee
is not retiring shall continue to be vested in the predeces-
sor Trustee, and shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more
than one trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such trustees
co-trustees of the same trust and that each such trustee
shall be trustee of a trust or trusts under separate inden-
tures.
No successor trustee with respect to any series
of Securities shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such
successor trustee shall be qualified under the provisions
of Section 6.8 and eligible under the provisions of Section
6.9.
Upon acceptance of appointment by any successor
trustee as provided in this Section 6.11, the Issuer shall
give notice thereof (a) if any Unregistered Securities of a
series affected are then Outstanding, to the Holders thereof,
by publication of such notice at least once in an Authorized
Newspaper in the Borough of Manhattan, The City of New York
and at least once in an Authorized Newspaper in London (and,
if required by Section 3.6, at least once in an Authorized
Newspaper in Luxembourg), (b) if any Unregistered Securities
of a series affected are then Outstanding, to the Holders
thereof who have filed their names and addresses with the
Trustee pursuant to Section 4.4(c)(ii), by mailing such
notice to such Holders at such addresses as were so furnished
to the Trustee (and the Trustee shall make such information
available to the Issuer for such purpose) and (c) to the
Holders of Registered Securities of each series affected, by
mailing such notice to such Holders at their addresses as
they shall appear on the registry books. If the acceptance
of appointment is substantially contemporaneous with the
resignation, then the notice called for by the preceding
sentence may be combined with the notice called for by Sec-
tion 6.10. If the Issuer fails to give such notice within ten
days after acceptance of appointment by the successor trus-
tee, the successor trustee shall cause such notice to be
given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee. Any corporation into
which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to the cor-
porate trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided that such corporation
shall be qualified under the provisions of Section 6.8 and
eligible under the provisions of Section 6.9, without the
execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the
contrary notwithstanding.
In case at the time such successor to the Trustee
shall succeed to the trusts created by this Indenture any of
the Securities of any series shall have been authenticated
but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor
Trustee and deliver such Securities so authenticated; and, in
case at that time any of the Securities of any series shall
not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trus-
tee; and in all such cases such certificate shall have the
full force which it is anywhere in the Securities of such
series or in this Indenture provided that the certificate of
the Trustee shall have; provided, that the right to adopt the
certificate of authentication of any predecessor Trustee or
to authenticate Securities of any series in the name of any
predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
SECTION 6.13 Preferential Collection of Claims
Against the Issuer. (a) Subject to the provisions of this
Section, if the Trustee shall be or shall become a creditor,
directly or indirectly, secured or unsecured, of the Issuer
within four months prior to a default, as defined in subsec-
tion (c) of this Section, or subsequent to such a default,
then, unless and until such default shall be cured, the
Trustee shall set apart and hold in a special account for the
benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as
defined in this Section):
(1) an amount equal to any and all reductions
in the amount due and owing upon any claim as such
creditor in respect of principal or interest,
effected after the beginning of such four months'
period and valid as against the Issuer and its
other creditors, except any such reduction result-
ing from the receipt or disposition of any property
described in subsection (a)(2) of this Section, or
from the exercise of any right of set-off which the
Trustee could have exercised if a petition in
bankruptcy had been filed by or against the Issuer
upon the date of such default; and
(2) all property received by the Trustee in
respect of any claim as such creditor, either as
security therefor, or in satisfaction or composi-
tion thereof, or otherwise, after the beginning of
such four months' period, or an amount equal to the
proceeds of any such property, if disposed of,
subject, however, to the rights, if any, of the
Issuer and its other creditors in such property or
such proceeds.
Nothing herein contained, however, shall affect the
right of the Trustee:
(A) to retain for its own account (i) pay-
ments made on account of any such claim by any
person (other than the Issuer) who is liable
thereon, (ii) the proceeds of the bona fide sale of
any such claim by the Trustee to a third person,
and (iii) distributions made in cash, securities or
other property in respect of claims filed against
the Issuer in bankruptcy or receivership or in
proceedings for reorganization pursuant to Title 11
of the United States Code or applicable state law;
(B) to realize, for its own account, upon any
property held by it as security for any such claim,
if such property was so held prior to the beginning
of such four months' period;
(C) to realize, for its own account, but only
to the extent of the claim hereinafter mentioned,
upon any property held by it as security for any
such claim, if such claim was created after the
beginning of such four months' period and such
property was received as security therefor simul-
taneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at
the time such property was so received the Trustee
had no reasonable cause to believe that a default
as defined in subsection (c) of this Section would
occur within four months; or
(D) to receive payment on any claim referred
to in paragraph (B) or (C), against the release of
any property held as security for such claim as
provided in such paragraph (B) or (C), as the case
may be, to the extent of the fair value of such
property.
For the purposes of paragraphs (B), (C) and (D),
property substituted after the beginning of such four months'
period for property held as security at the time of such
substitution shall, to the extent of the fair value of the
property released, have the same status as the property
released, and, to the extent that any claim referred to in
any of such paragraphs is created in renewal of or in sub-
stitution for or for the purpose of repaying or refunding any
pre-existing claim of the Trustee as such creditor, such
claim shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the
funds and property held in such special account and the
proceeds thereof shall be apportioned between the Trustee,
the Securityholders and the Holders of other indenture
securities in such manner that the Trustee, such
Securityholders and the Holders of other indenture securities
realize, as a result of payments from such special account
and payments of dividends on claims filed against the Issuer
in bankruptcy or receivership or in proceedings for reor-
ganization pursuant to Title 11 of the United States Code or
applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Issuer of
the funds and property in such special account and before
crediting to the respective claims of the Trustee, such
Securityholders and the Holders of other indenture securities
dividends on claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable State law,
but after crediting thereon receipts on account of the indeb-
tedness represented by their respective claims from all
sources other than from such dividends and from the funds and
property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends"
shall include any distribution with respect to such claim, in
bankruptcy or receivership or in proceedings for reorganiza-
tion pursuant to Title 11 of the United States Code or
applicable State law, whether such distribution is made in
cash, securities or other property, but shall not include any
such distribution with respect to the secured portion, if
any, of such claim. The court in which such bankruptcy,
receivership or proceeding for reorganization is pending
shall have jurisdiction (i) to apportion between the Trustee,
such Securityholders and the Holders of other indenture
securities, in accordance with the provisions of this
paragraph, the funds and property held in such special
account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions
of this paragraph due consideration in determining the fair-
ness of the distributions to be made to the Trustee, such
Securityholders and the Holders of other indenture securities
with respect to their respective claims, in which event it
shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special
account or as security for any such claim, or to make a
specific allocation of such distributions as between the
secured and unsecured portions of such claims, or otherwise
to apply the provisions of this paragraph as a mathematical
formula.
Any Trustee who has resigned or been removed after
the beginning of such four months' period shall be subject to
the provisions of this subsection (a) as though such resigna-
tion or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four
months' period, it shall be subject to the provisions of this
subsection (a) if and only if the following conditions exist:
(i) the receipt of property or reduction of
claim which would have given rise to the obligation
to account, if such Trustee had continued as trus-
tee, occurred after the beginning of such four
months' period; and
(ii) such receipt of property or reduction of
claim occurred within four months after such resig-
nation or removal.
(b) There shall be excluded from the operation of
this Section a creditor relationship arising from
(1) the ownership or acquisition of
securities issued under any indenture or any
security or securities having a maturity of one
year or more at the time of acquisition by the
Trustee;
(2) advances authorized by a receivership or
bankruptcy court of competent jurisdiction or by
this Indenture for the purpose of preserving any
property which shall at any time be subject to the
lien of this Indenture or of discharging tax liens
or other prior liens or encumbrances thereon, if
notice of such advance and of the circumstances
surrounding the making thereof is given to the
Securityholders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course
of business in the capacity of trustee under an
indenture, transfer agent, registrar, custodian,
paying agent, fiscal agent or depositary, or other
similar capacity;
(4) an indebtedness created as a result of
services rendered or premises rented or an indeb-
tedness created as a result of goods or securities
sold in a cash transaction as defined in subsection
(c)(3) below;
(5) the ownership of stock or of other
securities of a corporation organized under the
provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a
creditor of the Issuer; or
(6) the acquisition, ownership, acceptance or
negotiation of any drafts, bills of exchange,
acceptances or obligations which fall within the
classification of self-liquidating paper as defined
in subsection (c)(4) of this Section.
(c) As used in this Section:
(1) the term "default" shall mean any failure
to make payment in full of the principal of or
interest upon any of the Securities or upon the
other indenture securities when and as such prin-
cipal or interest becomes due and payable;
(2) the term "other indenture securities"
shall mean securities upon which the Issuer is an
obligor (as defined in the Trust Indenture Act of
1939) outstanding under any other indenture (i)
under which the Trustee is also trustee, (ii) which
contains provisions substantially similar to the
provisions of subsection (a) of this Section, and
(iii) under which a default exists at the time of
the apportionment of the funds and property held in
said special account;
(3) the term "cash transaction" shall mean
any transaction in which full payment for goods or
securities sold is made within seven days after
delivery of the goods or securities in currency or
in checks or other orders drawn upon banks or
bankers and payable upon demand;
(4) the term "self-liquidating paper" shall
mean any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or
incurred by the Issuer for the purpose of financing
the purchase, processing, manufacture, shipment,
storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to,
possession of, or a lien upon the goods, wares or
merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise
previously constituting the security, provided the
security is received by the Trustee simultaneously
with the creation of the creditor relationship with
the Issuer arising from the making, drawing, nego-
tiating or incurring of the draft, bill of
exchange, acceptance or obligation; and
(5) the term "Issuer" shall mean any obligor
upon the Securities.
SECTION 6.14 Appointment of Authenticating Agent.
As long as any Securities of a series remain Outstanding, the
Trustee may, by an instrument in writing, appoint with the
approval of the Issuer an authenticating agent (the "Authen-
ticating Agent") which shall be authorized to act on behalf
of the Trustee to authenticate Securities, including
Securities issued upon exchange, registration of transfer,
partial redemption or pursuant to Section 2.9. Securities of
each such series authenticated by such Authenticating Agent
shall be entitled to the benefits of this Indenture and shall
be valid and obligatory for all purposes as if authenticated
by the Trustee. Whenever reference is made in this Indenture
to the authentication and delivery of Securities of any
series by the Trustee or to the Trustee's Certificate of
Authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an
Authenticating Agent for such series and a Certificate of
Authentication executed on behalf of the Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all
times be a corporation organized and doing business under the
laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
$5,000,000 (determined as provided in Section 6.9 with
respect to the Trustee) and subject to supervision or
examination by Federal or State authority.
Any corporation into which any Authenticating Agent
may be merged or converted, or with which it may be con-
solidated, or any corporation resulting from any merger,
conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the cor-
porate agency business of any Authenticating Agent, shall
continue to be the Authenticating Agent with respect to all
series of Securities for which it served as Authenticating
Agent without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating
Agent. Any Authenticating Agent may at any time, and if it
shall cease to be eligible shall, resign by giving written
notice of resignation to the Trustee and to the Issuer.
Upon receiving such a notice of resignation or upon
such a termination, or in case at any time any Authenticating
Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14 with respect to one or more
series of Securities, the Trustee shall upon receipt of an
Issuer Order appoint a successor Authenticating Agent and the
Issuer shall provide notice of such appointment to all
Holders of Securities of such series in the manner and to the
extent provided in Section 11.4. Any successor Authenticat-
ing Agent upon acceptance of its appointment hereunder shall
become vested with all rights, powers, duties and respon-
sibilities of its predecessor hereunder, with like effect as
if originally named as Authenticating Agent. The Issuer
agrees to pay to the Authenticating Agent for such series
from time to time reasonable compensation. The Authenticat-
ing Agent for the Securities of any series shall have no
responsibility or liability for any action taken by it as
such at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to
any Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by
Securityholders. Any request, demand, authorization, direc-
tion, notice, consent, waiver or other action provided by
this Indenture to be given or taken by a specified percentage
in principal amount of the Securityholders of any or all
series may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such
specified percentage of Securityholders in person or by agent
duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee.
Proof of execution of any instrument or of a writing appoint-
ing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Sections 6.1 and 6.2) con-
clusive in favor of the Trustee and the Issuer, if made in
the manner provided in this Article.
SECTION 7.2 Proof of Execution of Instruments and
of Holding of Securities. Subject to Sections 6.1 and 6.2,
the execution of any instrument by a Securityholder or his
agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any
Holder of any instrument may be proved by the
certificate of any notary public or other officer
of any jurisdiction authorized to take acknowl-
edgments of deeds or administer oaths that the
person executing such instruments acknowledged to
him the execution thereof, or by an affidavit of a
witness to such execution sworn to before any such
notary or other such officer. Where such execution
is by or on behalf of any legal entity other than
an individual, such certificate or affidavit shall
also constitute sufficient proof of the authority
of the person executing the same. The fact of the
holding by any Holder of an Unregistered Security
of any series, and the identifying number of such
Security and the date of his holding the same, may
be proved by the production of such Security or by
a certificate executed by any trust company, bank,
or recognized securities dealer wherever situated
satisfactory to the Trustee, if such certificate
shall be deemed by the Trustee to be satisfactory.
Each such certificate shall be dated and shall
state that on the date thereof a Security of such
series bearing a specified identifying number was
deposited with or exhibited to such trust company,
bank, or recognized securities dealer by the person
named in such certificate. Any such certificate
may be issued in respect of one or more
Unregistered Securities of one or more series
specified therein. The holding by the person named
in any such certificate of any Unregistered
Securities of any series specified therein shall be
presumed to continue for a period of one year from
the date of such certificate unless at the time of
any determination of such holding (1) another
certificate bearing a later date issued in respect
of the same Securities shall be produced, or (2)
the Security of such series specified in such
certificate shall be produced by some other person,
or (3) the Security of such series specified in
such certificate shall have ceased to be Outstand-
ing. Subject to Sections 6.1 and 6.2, the fact and
date of the execution of any such instrument and
the amount and numbers of Securities of any series
held by the person so executing such instrument and
the amount and numbers of any Security or
Securities for such series may also be proven in
accordance with such reasonable rules and regula-
tions as may be prescribed by the Trustee for such
series or in any other manner which the Trustee for
such series may deem sufficient.
(b) In the case of Registered Securities, the
ownership of such Securities shall be proved by the
Security register or by a certificate of the
Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The
Issuer, the Trustee and any agent of the Issuer or the Trus-
tee may deem and treat the person in whose name any Security
shall be registered upon the Security register for such
series as the absolute owner of such Security (whether or not
such Security shall be overdue and notwithstanding any nota-
tion of ownership or other writing thereon) for the purpose
of receiving payment of or on account of the principal of
and, subject to the provisions of this Indenture, interest on
such Security and for all other purposes; and neither the
Issuer nor the Trustee nor any agent of the Issuer or the
Trustee shall be affected by any notice to the contrary. The
Issuer, the Trustee and any agent of the Issuer or the Trus-
tee may treat the Holder of any Unregistered Security and
the Holder of any Coupon as the absolute owner of such
Unregistered Security or Coupon (whether or not such
Unregistered Security or Coupon shall be overdue) for the
purpose of receiving payment thereof or on account thereof
and for all other purposes and neither the Issuer, the Trus-
tee, nor any agent of the Issuer or the Trustee shall be
affected by any notice to the contrary. All such payments so
made to any such person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for moneys payable upon
any such Unregistered Security or Coupon.
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding. In determining whether the Holders of the
requisite aggregate principal amount of Outstanding
Securities of any or all series have concurred in any direc-
tion, consent or waiver under this Indenture, Securities
which are owned by the Issuer or any other obligor on the
Securities with respect to which such determination is being
made or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with
the Issuer or any other obligor on the Securities with
respect to which such determination is being made shall be
disregarded and deemed not to be Outstanding for the purpose
of any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying
on any such direction, consent or waiver only Securities
which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not
the Issuer or any other obligor upon the Securities or any
person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer or
any other obligor on the Securities. In case of a dispute as
to such right, the advice of counsel shall be full protection
in respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer
shall furnish to the Trustee promptly an Officer's Certifi-
cate listing and identifying all Securities, if any, known by
the Issuer to be owned or held by or for the account of any
of the above-described persons; and, subject to Sections 6.1
and 6.2, the Trustee shall be entitled to accept such
Officer's Certificate as conclusive evidence of the facts
therein set forth and of the fact that all Securities not
listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.5 Right of Revocation of Action Taken.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.1, of the taking of any
action by the Holders of the percentage in aggregate prin-
cipal amount of the Securities of any or all series, as the
case may be, specified in this Indenture in connection with
such action, any Holder of a Security the serial number of
which is shown by the evidence to be included among the
serial numbers of the Securities the Holders of which have
consented to such action may, by filing written notice at the
Corporate Trust Office and upon proof of holding as provided
in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the
Holder of any Security shall be conclusive and binding upon
such Holder and upon all future Holders and owners of such
Security and of any Securities issued in exchange or sub-
stitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto
is made upon any such Security. Any action taken by the
Holders of the percentage in aggregate principal amount of
the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action
shall be conclusively binding upon the Issuer, the Trustee
and the Holders of all the Securities affected by such
action.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Con-
sent of Securityholders. The Administrative General Partner,
when authorized by a resolution of its Board of Directors
and acting on behalf of the Issuer (which resolution may
provide general terms or parameters for such action and may
provide that the specific terms of such action may be deter-
mined in accordance with or pursuant to an Issuer Order),
and the Trustee may from time to time and at any time enter
into an indenture or indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act of
1939 as in force at the date of the execution thereof) for
one or more of the following purposes:
(a) to convey, transfer, assign, mortgage
or pledge to the Trustee as security for the
Securities of one or more series any property or
assets;
(b) to evidence the succession of another
corporation to the Issuer, or successive succes-
sions, and the assumption by the successor corpora-
tion of the covenants, agreements and obligations
of the Issuer pursuant to Article Nine;
(c) to add to the covenants of the Issuer
such further covenants, restrictions, conditions or
provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of
Securities or Coupons, and to make the occurrence,
or the occurrence and continuance, of a default in
any such additional covenants, restrictions, condi-
tions or provisions an Event of Default permitting
the enforcement of all or any of the several
remedies provided in this Indenture as herein set
forth; provided, that in respect of any such addi-
tional covenant, restriction, condition or provi-
sion such supplemental indenture may provide for
a particular period of grace after default (which
period may be shorter or longer than that allowed
in the case of other defaults) or may provide for
an immediate enforcement upon such an Event of
Default or may limit the remedies available to the
Trustee upon such an Event of Default or may limit
the right of the Holders of a majority in aggregate
principal amount of the Securities of such series
to waive such an Event of Default;
(d) to cure any ambiguity or to correct or
supplement any provision contained herein or in
any supplemental indenture which may be defective
or inconsistent with any other provision contained
herein or in any supplemental indenture, or to make
any other provisions as the Issuer may deem neces-
sary or desirable, provided that no such action
shall adversely affect the interests of the Holders
of the Securities or Coupons;
(e) to establish the form or terms of
Securities of any series or of the Coupons apper-
taining to such Securities as permitted by Sections
2.1 and 2.3; and
(f) to evidence and provide for the accept-
ance of appointment hereunder by a successor trus-
tee with respect to the Securities of one or more
series and to add to or change any of the provi-
sions of this Indenture as shall be necessary to
provide for or facilitate the administration of the
trusts hereunder by more than one trustee, pursuant
to the requirements of Section 6.11.
The Trustee is hereby authorized to join with the
Issuer in the execution of any such supplemental indenture,
to make any further appropriate agreements and stipulations
which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter
into any such supplemental indenture which affects the Trus-
tee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provi-
sions of this Section may be executed without the consent of
the Holders of any of the Securities at the time outstanding,
notwithstanding any of the provisions of Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent
of Securityholders. With the consent (evidenced as provided
in Article Seven) of the Holders of not less than a majority
in aggregate principal amount of the Securities at the time
Outstanding of any series affected by such supplemental
indenture, the Administrative General Partner, when
authorized by a resolution of its Board of Directors and
acting on behalf of the Issuer (which resolution may provide
general terms or parameters for such action and may provide
that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the
Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of execution thereof) for the purpose
of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the
rights of the Holders of the Securities of such series or of
the Coupons appertaining to such Securities; provided, that
no such supplemental indenture shall (a) extend the final
maturity of any Security, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce or alter the method of computa-
tion of any amount payable on redemption or repayment thereof
(or the time at which any such redemption may be made), or
make the principal thereof (including any amount in respect
of original issue discount), or interest thereon payable in
any coin or currency other than that provided in the
Securities and Coupons or in accordance with the terms
thereof, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 5.1
or the amount thereof provable in bankruptcy pursuant to
Section 5.2, or alter the provisions of Section 11.11 or
11.12 or impair or affect the right of any Securityholder to
institute suit for the payment thereof or, if the Securities
provide therefor, any right of repayment at the option of the
Securityholder, in each case without the consent of the
Holder of each Security so affected, provided, no consent of
any Holder of any Security shall be necessary under this
Section 8.2 to permit the Trustee and the Issuer to execute
supplemental indentures pursuant to Section 8.1(e) of this
Indenture, or (b) reduce the aforesaid percentage of
Securities of any series, the consent of the Holders of which
is required for any such supplemental indenture, without the
consent of the Holders of each Security so affected.
A supplemental indenture which changes or
eliminates any covenant or other provision of this Indenture
which has expressly been included solely for the benefit of
one or more particular series of Securities, or which
modifies the rights of Holders of Securities of such series,
or of Coupons appertaining to such Securities, with respect
to such covenant or provision, shall be deemed not to affect
the rights under this Indenture of the Holders of Securities
of any other series or of the Coupons appertaining to such
Securities.
Upon the request of the Administrative General
Partner, accompanied by a copy of a resolution of the Board
of Directors and acting on behalf of the Issuer (which
resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action
may be determined in accordance with or pursuant to an Issuer
Order) certified by the secretary or an assistant secretary
of the Administrative General Partner authorizing the execu-
tion of any such supplemental indenture, and upon the filing
with the Trustee of evidence of the consent of the Holders of
the Securities as aforesaid and other documents, if any,
required by Section 7.1, the Trustee shall join with the
Issuer in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not
be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance
thereof.
Promptly after the execution by the Issuer and the
Trustee of any supplemental indenture pursuant to the provi-
sions of this Section, the Trustee shall give notice thereof
(i) to the Holders of then Outstanding Registered Securities
of each series affected thereby, by mailing a notice thereof
by first-class mail to such Holders at their addresses as
they shall appear on the Security register, (ii) if any
Unregistered Securities of a series affected thereby are then
Outstanding, to the Holders thereof who have filed their
names and addresses with the Trustee pursuant to Section
4.4(c)(ii), by mailing a notice thereof by first-class mail
to such Holders at such addresses as were so furnished to the
Trustee and (iii) if any Unregistered Securities of a series
affected thereby are then Outstanding, to all Holders
thereof, by publication of a notice thereof at least once in
an Authorized Newspaper in the Borough of Manhattan, The City
of New York and at least once in an Authorized Newspaper in
London (and, if required by Section 3.6, at least once in an
Authorized Newspaper in Luxembourg), and in each case such
notice shall set forth in general terms the substance of such
supplemental indenture. Any failure of the Issuer to give
such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemen-
tal indenture.
SECTION 8.3 Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture pursuant
to the provisions hereof, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee,
the Issuer and the Holders of Securities of each series
affected thereby shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and condi-
tions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Inden-
ture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The
Trustee, subject to the provisions of Sections 6.1 and 6.2,
shall be entitled to receive an Officer's Certificate and an
Opinion of Counsel as conclusive evidence that any supplemen-
tal indenture executed pursuant to this Article Eight com-
plies with the applicable provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures. Securities of any series authenti-
cated and delivered after the execution of any supplemental
indenture pursuant to the provisions of this Article may bear
a notation in form approved by the Trustee for such series
as to any matter provided for by such supplemental indenture
or as to any action taken by Securityholders. If the Issuer
or the Trustee shall so determine, new Securities of any
series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of
this Indenture contained in any such supplemental indenture
may be prepared by the Issuer, authenticated by the Trustee
and delivered in exchange for the Securities of such series
then Outstanding.
SECTION 8.6 Subordination Unimpaired. This Inden-
ture may not be amended to alter the subordination of any of
the Outstanding Securities without the written consent of
each holder of Senior Indebtedness then outstanding that
would be adversely affected thereby.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Covenant Not to Merge, Consolidate,
Sell or Convey Property Except Under Certain Conditions. The
Issuer covenants that it will not merge or consolidate with
any corporation, partnership, or other entity or sell, lease
or convey all or substantially all of its assets to any other
person, unless (i) either the Issuer shall be the surviving
entity, or the successor entity or the person which acquires
by sale, lease or conveyance substantially all the assets of
the Issuer (if other than the Issuer) shall be a corporation
or partnership organized under the laws of the United States
of America or any State thereof or the District of Columbia
and shall expressly assume the due and punctual payment of
the principal of and interest on all the Securities and
Coupons, if any, according to their tenor, and the due and
punctual performance and observance of all of the covenants
and conditions of this Indenture to be performed or observed
by the Issuer, by supplemental indenture in form satisfactory
to the Trustee, executed and delivered to the Trustee by such
entity, and (ii) the Issuer, such person or such successor
entity, as the case may be, shall not, immediately after such
merger or consolidation, or such sale, lease or conveyance,
be in default in the performance of any such covenant or
condition.
SECTION 9.2 Successor Entity Substituted. In case
of any such consolidation, merger, sale, lease or con-
veyance, and following such an assumption by the successor
entity, such successor entity shall succeed to and be sub-
stituted for the Issuer, with the same effect as if it had
been named herein. Such successor entity may cause to be
signed, and may issue either in its own name or in the name
of the Issuer prior to such succession any or all of the
Securities issuable hereunder which together with any Coupons
appertaining thereto theretofore shall not have been signed
by the Issuer and delivered to the Trustee; and, upon the
order of such successor entity, instead of the Issuer, and
subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities together with any Coupons apper-
taining thereto which previously shall have been signed and
delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities which such successor
corporation thereafter shall cause to be signed and delivered
to the Trustee for that purpose. All of the Securities so
issued together with any Coupons appertaining thereto shall
in all respects have the same legal rank and benefit under
this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as
though all of such Securities had been issued at the date of
the execution hereof.
In case of any such consolidation, merger, sale,
lease or conveyance such changes in phrasing and form (but
not in substance) may be made in the Securities and Coupons
thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other
than a conveyance by way of lease) the Issuer or any succes-
sor entity which shall theretofore have become such in the
manner described in this Article shall be discharged from all
obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.
SECTION 9.3 Opinion of Counsel Delivered to Trus-
tee. The Trustee, subject to the provisions of Sections 6.1
and 6.2, shall be entitled to receive an Opinion of Counsel
as conclusive evidence that any such consolidation, merger,
sale, lease or conveyance, and any such assumption, and any
such liquidation or dissolution, complies with the applicable
provisions of this Indenture.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Inden-
ture. (A) If at any time (a) the Issuer shall have paid or
caused to be paid the principal of and interest on all the
Securities of any series Outstanding hereunder and all unma-
tured Coupons appertaining thereto (other than Securities of
such series and Coupons appertaining thereto which have been
destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.9) as and when the same shall
have become due and payable, or (b) the Issuer shall have
delivered to the Trustee for cancellation all Securities of
any series theretofore authenticated and all unmatured
Coupons appertaining thereto (other than any Securities of
such series and Coupons appertaining thereto which shall have
been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.9) or (c) in the
case of any series of Securities where the exact amount
(including the currency of payment) of principal of and
interest due on which can be determined at the time of making
the deposit referred to in clause (ii) below, (i) all the
Securities of such series and all unmatured Coupons apper-
taining thereto not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by
their terms to become due and payable within one year or are
to be called for redemption within one year under arrange-
ments satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Issuer shall have irrevocably
deposited or caused to be deposited with the Trustee as trust
funds the entire amount in cash (other than moneys repaid by
the Trustee or any paying agent to the Issuer in accordance
with Section 10.4) or, in the case of any series of
Securities the payments on which may only be made in Dollars,
direct obligations of the United States of America, backed by
its full faith and credit ("U.S. Government Obligations"),
maturing as to principal and interest at such times and in
such amounts as will insure the availability of cash, or a
combination thereof, sufficient in the opinion of a nation-
ally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay (A) the principal and interest on all
Securities of such series and Coupons appertaining thereto on
each date that such principal or interest is due and payable
and (B) any mandatory sinking fund payments on the dates on
which such payments are due and payable in accordance with
the terms of the Indenture and the Securities of such series;
and if, in any such case, the Issuer shall also pay or cause
to be paid all other sums payable hereunder by the Issuer,
then this Indenture shall cease to be of further effect
(except as to (i) rights of registration of transfer and
exchange of Securities of such Series and of Coupons apper-
taining thereto and the Issuer's right of optional redemp-
tion, if any, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities or Coupons, (iii) rights
of holders of Securities and Coupons appertaining thereto to
receive payments of principal thereof and interest thereon,
upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive
mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder
including any right to compensation and indemnification under
Section 6.6, (v) the rights of the Holders of Securities of
such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the
Trustee payable to all or any of them, and (vi) the obliga-
tions of the Issuer under Section 3.2) and the Trustee, on
demand of the Issuer accompanied by an Officer's Certificate
and an Opinion of Counsel and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging such
satisfaction of and discharging this Indenture; provided,
that the rights of Holders of the Securities and Coupons to
receive amounts in respect of principal of and interest on
the Securities and Coupons held by them shall not be delayed
longer than required by then-applicable mandatory rules or
policies of any securities exchange upon which the Securities
are listed. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly
incurred and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities of such
series.
(B) The following provisions shall apply to the
Securities of each series unless specifically otherwise
provided in a Board Resolution, Officer's Certificate or
indenture supplemental hereto provided pursuant to Section
2.3. In addition to discharge of the Indenture pursuant to
the next preceding paragraph, in the case of any series of
Securities the exact amounts (including the currency of
payment) of principal of and interest due on which can be
determined at the time of making the deposit referred to in
clause (a) below, the Issuer shall be deemed to have paid and
discharged the entire indebtedness on all the Securities of
such a series and the Coupons appertaining thereto on the
91st day after the date of the deposit referred to in sub-
paragraph (a) below, and the provisions of this Indenture
with respect to the Securities of such series and Coupons
appertaining thereto shall no longer be in effect (except as
to (i) rights of registration of transfer and exchange of
Securities of such series and of Coupons appertaining thereto
and the Issuer's right of optional redemption, if any, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen
Securities or Coupons, (iii) rights of Holders of Securities
and Coupons appertaining thereto to receive payments of
principal thereof and interest thereon, upon the original
stated due dates therefor (but not upon acceleration), and
remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) the rights, obligations, duties
and immunities of the Trustee hereunder, (v) the rights of
the Holders of Securities of such series and Coupons apper-
taining thereto as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any
of them and (vi) the obligations of the Issuer under Section
3.2) and the Trustee, at the expense of the Issuer, shall at
the Issuer's request, execute proper instruments acknowl-
edging the same, if
(a) with reference to this provision the
Issuer has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust
funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the
Holders of the Securities of such series and
Coupons appertaining thereto (i) cash in an amount,
or (ii) in the case of any series of Securities the
payments on which may only be made in Dollars, U.S.
Government Obligations, maturing as to principal
and interest at such times and in such amounts as
will insure the availability of cash or (iii) a
combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public
accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the
principal and interest on all Securities of such
series and Coupons appertaining thereto on each
date that such principal or interest is due and
payable and (B) any mandatory sinking fund payments
on the dates on which such payments are due and
payable in accordance with the terms of the Inden-
ture and the Securities of such series;
(b) such deposit will not result in a breach
or violation of, or constitute a default under, any
agreement or instrument to which the Issuer is a
party or by which it is bound;
(c) the Issuer has delivered to the Trustee
an Opinion of Counsel based on the fact that (x)
the Issuer has received from, or there has been
published by, the Internal Revenue Service a ruling
or (y) since the date hereof, there has been a
change in the applicable Federal income tax law, in
either case to the effect that, and such opinion
shall confirm that, the Holders of the Securities
of such series and Coupons appertaining thereto
will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to
Federal income tax on the same amount and in the
same manner and at the same times, as would have
been the case if such deposit, defeasance and
discharge had not occurred;
(d) the Issuer has delivered to the Trustee
an Officer's Certificate and an Opinion of Counsel,
each stating that all conditions precedent provided
for relating to the defeasance contemplated by this
provision have been complied with.
SECTION 10.2 Application by Trustee of Funds
Deposited for Payment of Securities. Subject to Section
10.4, all moneys deposited with the Trustee (or other
trustee) pursuant to Section 10.1 shall be held in trust
and applied by it to the payment, either directly or
through any paying agent (including the Issuer acting as
its own paying agent), to the Holders of the particular
Securities of such series and of Coupons appertaining
thereto for the payment or redemption of which such
moneys have been deposited with the Trustee, of all sums
due and to become due thereon for principal and inter-
est; but such money need not be segregated from other
funds except to the extent required by law.
SECTION 10.3 Repayment of Moneys Held by
Paying Agent. In connection with the satisfaction and
discharge of this Indenture with respect to Securities
of any series, all moneys then held by any paying agent
under the provisions of this Indenture with respect to
such series of Securities shall, upon demand of the
Issuer, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all
further liability with respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee
and Paying Agent Unclaimed for Two Years. Any moneys
deposited with or paid to the Trustee or any paying
agent for the payment of the principal of or interest on
any Security of any series or Coupons attached thereto
and not applied but remaining unclaimed for two years
after the date upon which such principal or interest
shall have become due and payable, shall, upon the
written request of the Issuer and unless otherwise
required by mandatory provisions of applicable escheat
or abandoned or unclaimed property law, be repaid to the
Issuer by the Trustee for such series or such paying
agent, and the Holder of the Securities of such series
and of any Coupons appertaining thereto shall, unless
otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property laws, there-
after look only to the Issuer for any payment which such
Holder may be entitled to collect, and all liability of
the Trustee or any paying agent with respect to such
moneys shall thereupon cease; provided, however, that
the Trustee or such paying agent, before being required
to make any such repayment with respect to moneys
deposited with it for any payment (a) in respect of
Registered Securities of any series, shall at the
expense of the Issuer, mail by first-class mail to
Holders of such Securities at their addresses as they
shall appear on the Security register, and (b) in
respect of Unregistered Securities of any series the
Holders of which have filed their names and addresses
with the Trustee pursuant to Section 4.4(c)(ii), shall
at the expense of the Issuer, mail by first class mail
to such Holders at such addresses, and (c) in respect of
Unregistered Securities of any series, shall at the
expense of the Issuer cause to be published once, in an
Authorized Newspaper in the Borough of Manhattan, The
City of New York and once in an Authorized Newspaper in
London (and if required by Section 3.6, once in an
Authorized Newspaper in Luxembourg), notice, that such
moneys remain and that, after a date specified therein,
which shall not be less than thirty days from the date
of such mailing or publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer.
SECTION 10.5 Indemnity for U.S. Government
Obligations. The Issuer shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on
or assessed against the U.S. Government Obligations
deposited pursuant to Section 10.1 or the principal or
interest received in respect of such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Limited Partners, General Part-
ners, Incorporators, Stockholders, Officers and Direc-
tors of Issuer Exempt from Individual Liability. No
recourse under or upon any obligation, covenant or
agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced
thereby, shall be had against any partner of the Issuer
or any incorporator, as such or against any past,
present or future stockholder, officer or director, as
such, of the Issuer, or any partner of the Issuer or of
any successor, either directly or through the Issuer or
any successor, under any rule of law, statute or con-
stitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and
released by the acceptance of the Securities and the
Coupons appertaining thereto by the Holders thereof and
as part of the consideration for the issue of the
Securities and the Coupons appertaining thereto.
SECTION 11.2 Provisions of Indenture for the
Sole Benefit of Parties and Holders of Securities and
Coupons. Nothing in this Indenture, in the Securities
or in the Coupons appertaining thereto, expressed or
implied, shall give or be construed to give to any
person, firm or corporation, other than the parties
hereto and their successors and the holders of Senior
Indebtedness and the Holders of the Securities or
Coupons, if any, any legal or equitable right, remedy or
claim under this Indenture or under any covenant or
provision herein contained, all such covenants and
provisions being for the sole benefit of the parties
hereto and their successors, the holders of the Senior
Indebtedness and the Holders of the Securities or
Coupons, if any.
SECTION 11.3 Successors and Assigns of Issuer
Bound by Indenture. All the covenants, stipulations,
promises and agreements in this Indenture contained by
or in behalf of the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer,
Trustee and Holders of Securities and Coupons. Any
notice or demand which by any provision of this Inden-
ture is required or permitted to be given or served by
the Trustee or by the Holders of Securities or Coupons
to or on the Issuer may be given or served by being
deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until
another address of the Issuer is filed by the Issuer
with the Trustee) to Freeport-McMoRan Resource Partners,
Limited Partnership, 1615 Poydras Street, New Orleans,
Louisiana 70112, Attention: Michael C. Kilanowski, Jr.,
Secretary. Any notice, direction, request or demand by
the Issuer or any Holder of Securities or Coupons to or
upon the Trustee shall be deemed to have been suffi-
ciently given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifi-
cally provided herein) addressed (until another address
of the Trustee is filed by the Trustee with the Issuer)
to Manufacturers Hanover Trust Company, 450 West 33rd
Street, 15th Floor, New York, New York 10001, Attention:
Corporate Trust Department.
Where this Indenture provides for notice to
Holders of Registered Securities, such notice shall be
sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage
prepaid, to each Holder entitled thereto, at his last
address as it appears in the Security register. Where
this Indenture provided for notice to Holders of
Unregistered Securities who have filed their names and
addresses pursuant to Section 4.4(c)(ii), such notice
shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-
class postage prepaid, to each Holder entitled thereto,
at his last address as it appears in such filing. In
any case where notice to such Holders is given by mail,
neither the failure to mail such notice, nor any defect
in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by
the person entitled to receive such notice, either
before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case, by reason of the suspension of or
irregularities in regular mail service, it shall be
impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice
as shall be reasonably satisfactory to the Trustee shall
be deemed to be a sufficient giving of such notice.
SECTION 11.5 Officer's Certificates and
Opinions of Counsel; Statements to Be Contained Therein.
Upon any application or demand by the Issuer to the
Trustee to take any action under any of the provisions
of this Indenture, the Issuer shall furnish to the
Trustee an Officer's Certificate stating that all condi-
tions precedent provided for in this Indenture relating
to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied
with, except that in the case of any such application or
demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture
relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in
this Indenture and delivered to the Trustee with respect
to compliance with a condition or covenant provided for
in this Indenture shall include (a) a statement that the
person making such certificate or opinion has read such
covenant or condition, (b) a brief statement as to the
nature and scope of the examination or investigation
upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that,
in the opinion of such person, he has made such examina-
tion or investigation as is necessary to enable him to
express an opinion as to whether or not such covenant
or condition has been complied with and (d) a statement
as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Any certificate, statement or opinion of an
officer of the Administrative General Partner may be
based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel,
unless such officer knows that the certificate or
opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual
matters, information with respect to which is in the
possession of the Administrative General Partner, upon
the certificate, statement or opinion of or repre-
sentations by an officer or officers of the Administra-
tive General Partner, unless such counsel knows that the
certificate, statement or opinion or representations
with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate, statement or opinion of an
officer of the Administrative General Partner or of
counsel may be based, insofar as it relates to account-
ing matters, upon a certificate or opinion of or repre-
sentations by an accountant or firm of accountants in
the employ of the Issuer, unless such officer or coun-
sel, as the case may be, knows that the certificate or
opinion or representations with respect to the account-
ing matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the
same are erroneous.
Any certificate or opinion of any independent
firm of public accountants filed with and directed to
the Trustee shall contain a statement that such firm is
independent.
SECTION 11.6 Payments Due on Saturdays,
Sundays and Holidays. If the date of maturity of inter-
est on or principal of the Securities of any series or
any Coupons appertaining thereto or the date fixed for
redemption or repayment of any such Security or Coupon
shall not be a Business Day, then payment of interest or
principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the
date fixed for redemption, or repayment, and, in the
case of payment, no interest shall accrue for the period
after such date.
SECTION 11.7 Conflict of Any Provision of
Indenture with Trust Indenture Act of 1939. If and to
the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included
in this Indenture which is required to be included
herein by any of Sections 310 to 317, inclusive, of the
Trust Indenture Act of 1939, such required provision
shall control.
SECTION 11.8 New York Law to Govern. This
Indenture and each Security and Coupon shall be deemed
to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accord-
ance with the laws of such State, except as may other-
wise be required by mandatory provisions of law.
SECTION 11.9 Counterparts. This Indenture
may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The
Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect
the construction hereof.
SECTION 11.11 Securities in a Foreign Cur-
rency or in ECU. Unless otherwise specified in an
Officer's Certificate delivered pursuant to Section 2.3
of this Indenture with respect to a particular series of
Securities, whenever for purposes of this Indenture any
action may be taken by the Holders of a specified per-
centage in aggregate principal amount of Securities of
all series or all series affected by a particular action
at the time Outstanding and, at such time, there are
Outstanding Securities of any series which are
denominated in a coin or currency other than Dollars
(including ECUs), then the principal amount of
Securities of such series which shall be deemed to be
Outstanding for the purpose of taking such action shall
be that amount of Dollars that could be obtained for
such amount at the Market Exchange Rate. For purposes
of this Section 11.11, Market Exchange Rate shall mean
the noon Dollar buying rate in New York City for cable
transfers of that currency published by the Federal
Reserve Bank of New York; provided, however, in the case
of ECUs, Market Exchange Rate shall mean the rate of
exchange determined by the Commission of the European
Communities (or any successor thereto) as published in
the Official Journal of the European Communities (such
publication or any successor publication, the "Jour-
nal"). If such Market Exchange Rate is not available
for any reason with respect to such currency, the Trus-
tee shall use, in its sole discretion and without
liability on its part, such quotation of the Federal
Reserve Bank of New York or, in the case of ECUs, the
rate of exchange as published in the Journal, as of the
most recent available date, or quotations or, in the
case of ECUs, rates of exchange from one or more major
banks in The City of New York or in the country of issue
of the currency in question, which for purposes of the
ECU shall be Brussels, Belgium, or such other quotations
or, in the case of ECU, rates of exchange as the Trustee
shall deem appropriate. The provisions of this
paragraph shall apply in determining the equivalent
principal amount in respect of Securities of a series
denominated in a currency other than Dollars in connec-
tion with any action taken by Holders of Securities
pursuant to the terms of this Indenture, including,
without limitation, any determination contemplated in
Section 5.1(f) or (g).
All decisions and determinations of the Trus-
tee regarding the Market Exchange Rate or any alterna-
tive determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in
the absence of manifest error, be conclusive to the
extent permitted by law for all purposes and irrevocably
binding upon the Issuer and all Holders.
SECTION 11.12 Judgment Currency. The Issuer
agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of
obtaining judgment in any court it is necessary to
convert the sum due in respect of the principal of or
interest on the Securities of any series (the "Required
Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange
used shall be the rate at which in accordance with
normal banking procedures the Trustee could purchase in
The City of New York the Required Currency with the
Judgment Currency on the day on which final unappealable
judgment is entered, unless such day is not a New York
Banking Day, then, to the extent permitted by applicable
law, the rate of exchange used shall be the rate at
which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New
York Banking Day preceding the day on which a final
unappealable judgment is entered, and (b) its obliga-
tions under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satis-
fied by any tender, or any recovery pursuant to any
judgment (whether or not entered in accordance with
subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or
recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or addi-
tional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of
the Required Currency so expressed to be payable and
(iii) shall not be affected by judgment being obtained
for any other sum due under this Indenture. For pur-
poses of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The
City of New York or a day on which banking institutions
in The City of New York are authorized or required by
law or executive order to close.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The
provisions of this Article shall be applicable to the
Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement
of Securities of a series except as otherwise specified
as contemplated by Section 2.3 for Securities of such
series.
SECTION 12.2 Notice of Redemption; Partial
Redemptions. Notice of redemption to the Holders of
Registered Securities of any series to be redeemed as a
whole or in part at the option of the Issuer shall be
given by mailing notice of such redemption by first
class mail, postage prepaid, at least 30 days and not
more than 60 days prior to the date fixed for redemption
to such Holders of Securities of such series at their
last addresses as they shall appear upon the registry
books. Notice of redemption to the Holders of
Unregistered Securities to be redeemed as a whole or in
part, who have filed their names and addresses with the
Trustee pursuant to Section 4.4(c)(ii), shall be given
by mailing notice of such redemption, by first class
mail, postage prepaid, at least 30 days and not more
than 60 prior to the date fixed for redemption, to such
Holders at such addresses as were so furnished to the
Trustee (and, in the case of any such notice given by
the Issuer, the Trustee shall make such information
available to the Issuer for such purpose). Notice of
redemption to all other Holders of Unregistered
Securities shall be published in an Authorized Newspaper
in the Borough of Manhattan, The City of New York and in
an Authorized Newspaper in London (and, if required by
Section 3.6, in an Authorized Newspaper in Luxembourg),
in each case, once in each of three successive calendar
weeks, the first publication to be not less than 30 nor
more than 60 days prior to the date fixed for redemp-
tion. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been
duly given, whether or not the Holder receives the
notice. Failure to give notice by mail, or any defect
in the notice to the Holder of any Security of a series
designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the
redemption of any other Security of such series.
The notice of redemption to each such Holder
shall specify the principal amount of each Security of
such series held by such Holder to be redeemed, the date
fixed for redemption, the redemption price, the place or
places of payment, that payment will be made upon
presentation and surrender of such Securities and, in
the case of Securities with Coupons attached thereto, of
all Coupons appertaining thereto maturing after the date
fixed for redemption, that such redemption is pursuant
to the mandatory or optional sinking fund, or both, if
such be the case, that interest accrued to the date
fixed for redemption will be paid as specified in such
notice and that on and after said date interest thereon
or on the portions thereof to be redeemed will cease to
accrue. In case any Security of a series is to be
redeemed in part only the notice of redemption shall
state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date
fixed for redemption, upon surrender of such Security, a
new Security or Securities of such series in principal
amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities of any
series to be redeemed at the option of the Issuer shall
be given by the Issuer or, at the Issuer's request, by
the Trustee in the name and at the expense of the
Issuer.
On or before the redemption date specified in
the notice of redemption given as provided in this
Section, the Issuer will deposit with the Trustee or
with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and
hold in trust as provided in Section 3.4) an amount of
money sufficient to redeem on the redemption date all
the Securities of such series so called for redemption
at the appropriate redemption price, together with
accrued interest to the date fixed for redemption. The
Issuer will deliver to the Trustee at least 70 days
prior to the date fixed for redemption an Officer's
Certificate stating the aggregate principal amount of
Securities to be redeemed. In case of a redemption at
the election of the Issuer prior to the expiration of
any restriction on such redemption, the Issuer shall
deliver to the Trustee, prior to the giving of any
notice of redemption to Holders pursuant to this Sec-
tion, an Officer's Certificate stating that such
restriction has been complied with.
If less than all the Securities of a series
are to be redeemed, the Trustee shall select, in such
manner as it shall deem appropriate and fair, Securities
of such Series to be redeemed in whole or in part.
Securities may be redeemed in part in multiples equal to
the minimum authorized denomination for Securities of
such series or any multiple thereof. The Trustee shall
promptly notify the Issuer in writing of the Securities
of such series selected for redemption and, in the case
of any Securities of such series selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the
redemption of Securities of any series shall relate, in
the case of any Security redeemed or to be redeemed only
in part, to the portion of the principal amount of such
Security which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for
Redemption. If notice of redemption has been given as
above provided, the Securities or portions of Securities
(subject to the parenthetical clause in the second
preceding sentence) specified in such notice shall
become due and payable on the date and at the place
stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed
for redemption, and on and after said date (unless the
Issuer shall default in the payment of such Securities
at the redemption price, together with interest accrued
to said date) interest on the Securities or portions of
Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining
thereto shall be void, and, except as provided in Sec-
tions 6.5 and 10.4, such Securities shall cease from
and after the date fixed for redemption to be entitled
to any benefit or security under this Indenture, and the
Holders thereof shall have no right in respect of such
Securities except the right to receive the redemption
price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such
Securities at a place of payment specified in said
notice, together with all Coupons, if any, appertaining
thereto maturing after the date fixed for redemption,
said Securities or the specified portions thereof shall
be paid and redeemed by the Issuer at the applicable
redemption price, together with interest accrued thereon
to the date fixed for redemption; provided that payment
of interest becoming due on or prior to the date fixed
for redemption shall be payable in the case of
Securities with Coupons attached thereto, to the Holders
of the Coupons for such interest upon surrender thereof,
and in the case of Registered Securities, to the Holders
of such Registered Securities registered as such on the
relevant record date subject to the terms and provisions
of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall
not be so paid upon surrender thereof for redemption,
the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the
rate of interest or Yield to Maturity (in the case of an
Original Issue Discount Security) borne by such
Security.
If any Security with Coupons attached thereto
is surrendered for redemption and is not accompanied by
all appurtenant Coupons maturing after the date fixed
for redemption, the surrender of such missing Coupon or
Coupons may be waived by the Issuer and the Trustee, if
there be furnished to each of them such security or
indemnity as they may require to save each of them
harmless.
Upon presentation of any Security redeemed in
part only, the Issuer shall execute and the Trustee
shall authenticate and deliver to or on the order of the
Holder thereof, at the expense of the Issuer, a new
Security or Securities of such series, of authorized
denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities
from Eligibility for Selection for Redemption.
Securities shall be excluded from eligibility for selec-
tion for redemption if they are identified by registra-
tion and certificate number in an Officer's Certificate
delivered to the Trustee at least 40 days prior to the
last date on which notice of redemption may be given as
being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Issuer or (b)
an entity specifically identified in such written state-
ment as directly or indirectly controlling or controlled
by or under direct or indirect common control with the
Issuer.
SECTION 12.5 Mandatory and Optional Sinking
Funds. The minimum amount of any sinking fund payment
provided for by the terms of the Securities of any
series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum
amount provided for by the terms of the Securities of
any series is herein referred to as an "optional sinking
fund payment". The date on which a sinking fund payment
is to be made is herein referred to as the "sinking fund
payment date".
In lieu of making all or any part of any
mandatory sinking fund payment with respect to any
series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such
series theretofore purchased or otherwise acquired
(except upon redemption pursuant to the mandatory sink-
ing fund) by the Issuer or receive credit for Securities
of such series (not previously so credited) theretofore
purchased or otherwise acquired (except as aforesaid) by
the Issuer and delivered to the Trustee for cancellation
pursuant to Section 2.10, (b) receive credit for
optional sinking fund payments (not previously so
credited) made pursuant to this Section, or (c) receive
credit for Securities of such series (not previously so
credited) redeemed by the Issuer through any optional
redemption provision contained in the terms of such
series. Securities so delivered or credited shall be
received or credited by the Trustee at the sinking fund
redemption price specified in such Securities.
On or before the 60th day next preceding each
sinking fund payment date for any series, the Issuer
will deliver to the Trustee an Officer's Certificate
(which need not contain the statements required by
Section 11.5) (a) specifying the portion of the man-
datory sinking fund payment to be satisfied by payment
of cash and the portion to be satisfied by credit of
Securities of such series and the basis for such credit,
(b) stating that none of the Securities of such series
has theretofore been so credited, (c) stating that no
defaults in the payment of interest or Events of Default
with respect to such series have occurred (which have
not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise
its right to make an optional sinking fund payment with
respect to such series and, if so, specifying the amount
of such optional sinking fund payment which the Issuer
intends to pay on or before the next succeeding sinking
fund payment date. Any Securities of such series to be
credited and required to be delivered to the Trustee in
order for the Issuer to be entitled to credit therefor
as aforesaid which have not theretofore been delivered
to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such
Officer's Certificate (or reasonably promptly thereafter
if acceptable to the Trustee). Such Officer's Certifi-
cate shall be irrevocable and upon its receipt by the
Trustee the Issuer shall become unconditionally
obligated to make all the cash payments or payments
therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the
Issuer, on or before any such 60th day, to deliver such
Officer's Certificate and Securities (subject to the
parenthetical clause in the second preceding clause)
specified in this paragraph, if any, shall not con-
stitute a default but shall constitute, on and as of
such date, the irrevocable election of the Issuer (i)
that the mandatory sinking fund payment for such series
due on the next succeeding sinking fund payment date
shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect
thereof and (ii) that the Issuer will make no optional
sinking fund payment with respect to such series as
provided in this Section.
If the sinking fund payment or payments (man-
datory or optional or both) to be made in cash on the
next succeeding sinking fund payment date plus any
unused balance of any preceding sinking fund payments
made in cash shall exceed $50,000 (or the equivalent
thereof in any Foreign Currency or ECU) or a lesser sum
in Dollars (or the equivalent thereof in any Foreign
Currency or ECU) if the Issuer shall so request with
respect to the Securities of any particular series, such
cash shall be applied on the next succeeding sinking
fund payment date to the redemption of Securities of
such series at the sinking fund redemption price
together with accrued interest to the date fixed for
redemption. If such amount shall be $50,000 (or the
equivalent thereof in any Foreign Currency or ECU) or
less and the Issuer makes no such request then it shall
be carried over until a sum in excess of $50,000 (or the
equivalent thereof in any Foreign Currency or ECU) is
available. The Trustee shall select, in the manner
provided in Section 12.2, for redemption on such sinking
fund payment date a sufficient principal amount of
Securities of such series to absorb said cash, as nearly
as may be, and shall (if requested in writing by the
Issuer) inform the Issuer of the serial numbers of the
Securities of such series (or portions thereof) so
selected. The Trustee, in the name and at the expense
of the Issuer (or the Issuer, if it shall so request
the Trustee in writing) shall cause notice of redemption
of the Securities of such series to be given in substan-
tially the manner provided in Section 12.2 (and with the
effect provided in Section 12.3) for the redemption of
Securities of such series in part at the option of the
Issuer. The amount of any sinking fund payments not so
applied or allocated to the redemption of Securities of
such series shall be added to the next cash sinking fund
payment for such series and, together with such payment,
shall be applied in accordance with the provisions of
this Section. Any and all sinking fund moneys held on
the stated maturity date of the Securities of any par-
ticular series (or earlier, if such maturity is
accelerated), which are not held for the payment or
redemption of particular Securities of such series shall
be applied, together with other moneys, if necessary,
sufficient for the purpose, to the payment of the prin-
cipal of, and interest on, the Securities of such series
at maturity.
On or before each sinking fund payment date,
the Issuer shall pay to the Trustee in cash or shall
otherwise provide for the payment of all interest
accrued to the date fixed for redemption on Securities
to be redeemed on the next following sinking fund pay-
ment date.
The Trustee shall not redeem or cause to be
redeemed any Securities of a series with sinking fund
moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during
the continuance of a default in payment of interest on
such Securities or of any Event of Default except that,
where the giving of notice of redemption of any
Securities shall theretofore have been made, the Trustee
shall redeem or cause to be redeemed such Securities,
provided that it shall have received from the Issuer a
sum sufficient for such redemption. Except as
aforesaid, any moneys in the sinking fund for such
series at the time when any such default or Event of
Default shall occur, and any moneys thereafter paid into
the sinking fund, shall, during the continuance of such
default or Event of Default, be deemed to have been
collected under Article Five and held for the payment of
all such Securities. In case such Event of Default
shall have been waived as provided in Section 5.10 or
the default cured on or before the sixtieth day preced-
ing the sinking fund payment date in any year, such
moneys shall thereafter be applied on the next succeed-
ing sinking fund payment date in accordance with this
Section to the redemption of such Securities.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Securities and Coupons Subor-
dinated to Senior Indebtedness. The Issuer covenants
and agrees, and each Holder of a Security or Coupon, by
his acceptance thereof, likewise covenants and agrees,
that the indebtedness represented by the Securities and
any Coupons and the payment of the principal of and
interest on each and all of the Securities and of any
Coupons is hereby expressly subordinated, to the extent
and in the manner hereinafter set forth, in right of
payment to the prior payment in full of Senior Indebted-
ness.
In the event (a) of any insolvency or
bankruptcy proceedings or any receivership, liquidation,
reorganization or other similar proceedings in respect
of the Issuer or a substantial part of its property, or
of any proceedings for liquidation, dissolution or other
winding up of the Issuer, whether or not involving
insolvency or bankruptcy, or (b) subject to the provi-
sions of Section 13.2 that (i) a default shall have
occurred with respect to the payment of principal of or
interest on or other monetary amounts due and payable on
any Senior Indebtedness, whether at maturity, by decla-
ration or otherwise, or (ii) there shall have occurred
an event of default (other than a default in the payment
of principal or interest or other monetary amounts due
and payable) in respect of any Senior Indebtedness, as
defined therein or in the instrument under which the
same is outstanding, permitting the holder or holders
thereof to accelerate the maturity thereof (with notice
or lapse of time, or both), and such event of default
shall have continued beyond the period of grace, if any,
in respect thereof, and, in the cases of subclauses (i)
and (ii) of this clause (b), such default or event of
default shall not have been cured or waived or shall not
have ceased to exist, or (c) that the principal of and
accrued interest on the Securities of any series shall
have been declared due and payable pursuant to Section
5.1 and such declaration shall not have been rescinded
and annulled as provided in Section 5.1 then:
(1) the holders of all Senior Indebted-
ness shall first be entitled to receive pay-
ment of the full amount due thereon, or provi-
sion shall be made, in accordance with the
terms of such Senior Indebtedness, for such
payment in money or money's worth, before the
Holders of any of the Securities or Coupons
are entitled to receive a payment on account
of the principal of or interest on the indeb-
tedness evidenced by the Securities or of the
Coupons, including, without limitation, any
payments made pursuant to Article Twelve;
(2) any payment by, or distribution of
assets of, the Issuer of any kind or charac-
ter, whether in cash, property or securities,
to which the Holders of any of the Securities
or Coupons or the Trustee would be entitled
except for the provisions of this Article
shall be paid or delivered by the person
making such payment or distribution, whether
the Issuer, a trustee in bankruptcy, a
receiver or liquidating trustee or otherwise,
directly to the holders of such Senior Indeb-
tedness or their representative or repre-
sentatives or to the trustee or trustees under
any indenture under which any instruments
evidencing any of such Senior Indebtedness may
have been issued, ratably according to the
aggregate amounts remaining unpaid on account
of such Senior Indebtedness held or repre-
sented by each, to the extent necessary to
make payment in full of all Senior Indebted-
ness remaining unpaid after giving effect to
any concurrent payment or distribution (or
provision therefor) to the holders of such
Senior Indebtedness, before any payment or
distribution is made to the Holders of the
indebtedness evidenced by the Securities or
Coupons or to the Trustee under this instru-
ment; and
(3) in the event that, notwithstanding
the foregoing, any payment by, or distribution
of assets of, the Issuer of any kind or
character, whether in cash, property or
securities, in respect of principal of, or
interest or premium (if any) on, the
Securities or in connection with any repur-
chase by the Issuer of the Securities, shall
be received by the Trustee or the Holders of
any of the Securities or Coupons before all
amounts (including without limitation, prin-
cipal, interest and premium (if any), (due
with respect to Senior Indebtedness is paid in
full, or provision made, in accordance with
the terms of such Senior Indebtedness for such
payment in money or money's worth, such pay-
ment or distribution in respect of principal
of or interest or premium (if any) on the
Securities or in connection with any repur-
chase by the Issuer of the Securities shall be
paid over to the Holders of such Senior Indeb-
tedness or their representative or repre-
sentatives or to the trustee or trustees under
any indenture under which any instruments
evidencing any such Senior Indebtedness may
have been issued, ratably as aforesaid, for
application to the payment of all amounts
(including without limitation, principal,
interest and premium (if any)) due with
respect to Senior Indebtedness remaining
unpaid until all such Senior Indebtedness
shall have been paid in full, after giving
effect to any concurrent payment or distribu-
tion (or provision therefor) to the holders of
such Senior Indebtedness.
Notwithstanding the foregoing, at
any time after the 91st day following the date
of deposit of cash or, in the case of
Securities payable only in Dollars, U.S.
Government Obligations pursuant to Section
10.1(A) or (B) (provided all other conditions
set out in such Section shall have been satis-
fied) the funds so deposited and any interest
thereon will not be subject to any rights of
Holders of Senior Indebtedness including,
without limitation, those arising under this
Article Thirteen.
SECTION 13.2 Disputes with Holders of Certain
Senior Indebtedness. Any failure by the Issuer to make
any payment on or perform any other obligation under
Senior Indebtedness, other than any indebtedness
incurred by the Issuer or assumed or guaranteed,
directly or indirectly, by the Issuer for money borrowed
(or any deferral, renewal, extension or refunding
thereof) or any indebtedness or obligation as to which
the provisions of this Section shall have been waived by
the Issuer in the instrument or instruments by which the
Issuer incurred, assumed, guaranteed or otherwise
created such indebtedness or obligation, shall not be
deemed a default or event of default under Section
13.1(b) if (i) the Issuer shall be disputing its obliga-
tion to make such payment or perform such obligation and
(ii) either (A) no final judgment relating to such
dispute shall have been issued against the Issuer which
is in full force and effect and is not subject to fur-
ther review, including a judgment that has become final
by reason of the expiration of the time within which a
party may seek further appeal or review, and (B) in the
event of a judgment that is subject to further review or
appeal has been issued, the Issuer shall in good faith
be prosecuting an appeal or other proceeding for review
and a stay of execution shall have been obtained pending
such appeal or review.
SECTION 13.3 Subrogation. Subject to the
payment in full of all Senior Indebtedness, the Holders
of the Securities and any Coupons shall be subrogated
(equally and ratably with the holders of all obligations
of the Issuer which by their express terms are subor-
dinated to Senior Indebtedness of the Issuer to the same
extent as the Securities are subordinated and which are
entitled to like rights of subrogation) to the rights of
the holders of Senior Indebtedness to receive payments
or distributions of cash, property or securities of the
Issuer applicable to the Senior Indebtedness until all
amounts owing on the Securities and any Coupons shall be
paid in full, and as between the Issuer, its creditors
other than holders of such Senior Indebtedness and the
Holders, no such payment or distribution made to the
holders of Senior Indebtedness by virtue of this Article
that otherwise would have been made to the Holders shall
be deemed to be a payment by the Issuer on account of
such Senior Indebtedness, it being understood that the
provisions of this Article are and are intended solely
for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
SECTION 13.4 Obligation of Issuer Uncondi-
tional. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities or any Coupons is
intended to or shall impair, as among the Issuer, its
creditors other than the holders of Senior Indebtedness
and the Holders, the obligation of the Issuer, which is
absolute and unconditional, to pay to the Holders the
principal of and interest on the Securities and the
amounts owed pursuant to any Coupons as and when the
same shall become due and payable in accordance with
their terms, or is intended to or shall affect the
relative rights of the Holders and creditors of the
Issuer other than the holders of Senior Indebtedness,
nor shall anything herein or therein prevent the Trustee
or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this
Article of the holders of Senior Indebtedness in respect
of cash, property or securities of the Issuer received
upon the exercise of any such remedy.
Upon payment or distribution of assets of the
Issuer referred to in this Article, the Trustee and the
Holders shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in
which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the
Issuer is pending or upon a certificate of the trustee
in bankruptcy, receiver, assignee for the benefit of
creditors, liquidating trustee or agent or other person
making any payment or distribution, delivered to the
Trustee or to the Holders, for the purpose of ascertain-
ing the persons entitled to participate in such payment
or distribution, the holders of the Senior Indebtedness
and other indebtedness of the Issuer, the amount thereof
or payable thereon, the amount paid or distributed
thereon and all other facts pertinent thereto or to this
Article.
In the absence of any such bankruptcy trustee,
receiver, assignee or other person, the Trustee shall be
entitled to rely upon a written notice by a Person
representing himself to be a holder of Senior Indebted-
ness (or a trustee or representative on behalf of such
holder) as evidence that such Person is a holder of
Senior Indebtedness (or is such a trustee or repre-
sentative). In the event that the Trustee determines,
in good faith, that further evidence is required with
respect to the right of any person as a holder of Senior
Indebtedness to participate in any payments or distribu-
tions pursuant to this Article Thirteen, the Trustee may
request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such person, as to the
extent to which such person is entitled to participate
in such payment or distribution, and as to other facts
pertinent to the rights of such person under this
Article Thirteen, and if such evidence is not furnished,
the Trustee may refuse to offer any payment to such
person pending judicial determination as to the right of
such person to receive such payment.
SECTION 13.5 Payments on Securities and
Coupons Permitted. Nothing contained in this Article or
elsewhere in this Indenture or in the Securities or
Coupons shall affect the obligations of the Issuer to
make, or prevent the Issuer from making, payment of the
principal of or interest on the Securities and of any
Coupons in accordance with the provisions hereof and
thereof, except as otherwise provided in this Article.
SECTION 13.6 Effectuation of Subordination by
Trustee. Each holder of Securities or Coupons, by his
acceptance thereof, authorizes and directs the Trustee
on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in
this Article and appoints the Trustee his attorney-in-
fact for any and all such purposes.
SECTION 13.7 Knowledge of Trustee. Not-
withstanding the provisions of this Article or any other
provisions of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts
that would prohibit the making of any payment of moneys
to or by the Trustee, or the taking of any other action
by the Trustee, unless and until the Trustee shall have
received written notice thereof mailed or delivered to
the Trustee at its Corporate Trust Office from the
Issuer, any Holder, any paying agent or the holder or
representative of any class of Senior Indebtedness;
provided that if at least three Business Days prior to
the date upon which by the terms hereof any such moneys
may become payable for any purpose (including, without
limitation, the payment of the principal of or interest
or premium (if any) on any Security or interest on any
Coupon) the Trustee shall not have received with respect
to such moneys the notice provided for in this Section,
then, anything herein contained to the contrary not-
withstanding, the Trustee shall have full power and
authority to receive such moneys and to apply the same
to the purpose for which they were received and shall
not be affected by any notice to the contrary that may
be received by it within three Business Days prior to or
on or after such date.
SECTION 13.8 Trustee May Hold Senior Indeb-
tedness. The Trustee shall be entitled to all the
rights set forth in this Article with respect to any
Senior Indebtedness at the time held by it, to the same
extent as any other holder of Senior Indebtedness, and
nothing in Section 6.3 or elsewhere in this Indenture
shall deprive the Trustee of any of its rights as such
holder.
SECTION 13.9 Rights of Holders of Senior
Indebtedness Not Impaired. No right of any present or
future holder of any Senior Indebtedness to enforce the
subordination herein shall at any time or in any way be
prejudiced or impaired by any act or failure to act on
the part of the Issuer or by any noncompliance by the
Issuer with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
With respect to the holders of Senior Indeb-
tedness, (i) the duties and obligations of the Trustee
shall be determined solely by the express provisions of
this Indenture, (ii) the Trustee shall not be liable
except for the performance of such duties and obliga-
tions as are specifically set forth in this Indenture,
(iii) no implied covenants or obligations shall be read
into this Indenture against the Trustee and (iv) the
Trustee shall not be deemed to be a fiduciary as to such
holders.
SECTION 13.10 Article Applicable to Paying
Agents. In case at any time any paying agent other than
the Trustee shall have been appointed by the Issuer and
be then acting hereunder, the term "Trustee" as used in
this Article shall in such case (unless the context
shall require otherwise) be construed as extending to
and including such paying agent within its meaning as
fully for all intents and purposes as if such paying
agent were named in this Article in addition to or in
place of the Trustee, provided, however, that Sections
13.7 and 13.8 shall not apply to the Issuer if it acts
as its own paying agent.
SECTION 13.11 Trustee; Compensation Not
Prejudiced. Nothing in this Article shall apply to
claims of, or payments to, the Trustee pursuant to
Section 6.6.
IN WITNESS WHEREOF, the parties hereto have
caused this Indenture to be duly executed, and the
appropriate corporate seals to be hereunto affixed and
attested, all as of October 26, 1990.
FREEPORT-McMoRan RESOURCE
PARTNERS, LIMITED PARTNERSHIP
By FREEPORT-McMoRan INC.
(Administrative Managing
General Partner)
By
----------------------------
Title: Senior Vice President
(CORPORATE SEAL)
Attest:
By
-------------------------
Title: Secretary, Freeport-
McMoRan Inc.
MANUFACTURERS HANOVER TRUST
COMPANY, as Trustee
By
----------------------------
Title:
(CORPORATE SEAL)
Attest:
By
-------------------------
Title:
STATE OF LOUISIANA )
) ss.:
PARRISH OF ORLEANS )
On this ____ of October, 1990 before me per-
sonally came RONALD GROSSMAN, to me personally known,
who, being by me duly sworn, did depose and say that he
resides at 22 Versailles Blvd., New Orleans, LA 70125;
that he is the Senior Vice President of Freeport-McMoRan
Inc., one of the corporations which executed the above
instrument; that he knows the corporate seal of said
corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that
he signed his name thereto by like authority.
(NOTARIAL SEAL)
-----------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ of October, 1990 before me per-
sonally came , to me personally known, who, being
by me duly sworn, did depose and say that he resides at
that he is a of ,
one of the corporations which executed the above instru-
ment; that he knows the corporate seal of said corpora-
tion; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
(NOTARIAL SEAL)
---------------------
Notary Public
Exhibit 4.12
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of
February 15, 1994 between FREEPORT-McMoRan RESOURCE PARTNERS,
LIMITED PARTNERSHIP, a Delaware limited partnership (the
"Issuer"), and Chemical Bank, as successor to Manufacturers
Hanover Trust Company, a New York corporation, as trustee
(the "Trustee"), to the SUBORDINATED INDENTURE, dated as of
October 26, 1990 between the Issuer and the Trustee (the
"Original Indenture", the Original Indenture, as supplemented
hereby, being referred to herein as the "Indenture"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized, as a new
series of Securities under the Indenture its 8 3/4% Senior
Subordinated Notes due 2004 (the "Notes");
WHEREAS, the Issuer has duly authorized the execu-
tion and delivery of this Supplemental Indenture to establish
the Notes as a series of Securities under the Indenture and
to provide for, among other things, the issuance of and the
form and terms of the Notes, additional covenants and Events
of Default for purposes of the Notes and the Holders thereof
and changes applicable to the Notes in the provisions of the
Original Indenture relating to subordination; and
WHEREAS, all things necessary to make this Sup-
plemental Indenture a valid agreement according to its terms
have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases
of the Notes by the Holders thereof, the Issuer and the
Trustee mutually covenant and agree for the equal and propor-
tionate benefit of the respective Holders from time to time
of the Notes as follows (all terms used in this Supplemental
Indenture which are defined in the Indenture having the
meanings assigned to them in the Indenture):
1. There is hereby established a series of
Securities under the Original Indenture to be designated the
"8 3/4% Senior Subordinated Notes due 2004" of the Issuer
(the "Notes"). The Notes shall be in the form of Exhibit A
hereto and shall have the terms specified in this Supplemen-
tal Indenture and in such Exhibit A. As provided in the
Indenture, no recourse under the Notes or the Indenture may
be had against any partner of the Issuer. Such partners have
no obligations under and are not liable in respect of the
Notes.
2. Definitions. The following terms, which are in
addition to those defined in Section 1.1 of the Original
Indenture, shall have the respective meanings specified in
this Section. Such terms shall apply only to the Notes
except to the extent specifically made applicable to any
other series of Securities by the Board Resolutions,
Officer's Certificate or supplemental indenture establishing
such series of Securities as provided for in Section 2.3 of
the Indenture.
"Administrative Managing General Partner" means
FTX, as Administrative Managing General Partner of the
Issuer, and any successor thereto as Administrative Managing
General Partner of the Issuer, and references in the Inden-
ture to the Administrative General Partner shall be deemed to
be references to the Administrative Managing General Partner.
"Affiliate" of any Person means any other Person
directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person. For the
purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agent Bank" means the Person or Persons desig-
nated as the agent under the Credit Agreement from time to
time; provided that if there is more than one Credit Agree-
ment at any time, the Agent Bank shall be the agent under the
Credit Agreement having the greatest aggregate loan and
unused commitment amount.
"Capital Lease Obligation" of any Person means the
obligation to pay rent or other payment amounts under a lease
of (or other Debt arrangements conveying the right to use)
real or personal property of such Person which is required to
be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person in
accordance with generally accepted accounting principles.
The stated maturity of such obligation shall be the date of
the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
"Credit Agreement" means the Amended and Restated
Credit Agreement dated as of June 1, 1993, among Freeport-
McMoRan Inc., the Issuer, the banks named therein and Chemi-
cal Bank, as agent for such banks, as amended (including any
amendment and restatement thereof), renewed, extended, sub-
stituted, refinanced, restructured, modified, supplemented,
restated or replaced from time to time.
"Debt" means (without duplication), with respect
to any Person, whether recourse is to all or a portion of
the assets of such Person, and whether or not contingent,
(i) all obligations of such Person for money borrowed,
including all obligations for the repayment of debt and
payments of other amounts under the Credit Agreement, (ii)
all obligations of such Person evidenced by bonds, deben-
tures, notes or other similar instruments, (iii) all obliga-
tions of such Person to pay the deferred purchase price of
property or services, except accounts payable arising in the
ordinary course of business, (iv) all Capital Lease Obliga-
tions of such Person, (v) the maximum fixed redemption or
repurchase price of Redeemable Stock of such Person, (vi) all
Debt of others secured by any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind on any asset of
such Person and (vii) all Debt of others and all dividends of
others Guaranteed by such Person or for the payment of which
such Person is directly or indirectly responsible. Not-
withstanding the foregoing, trade accounts payable and
liabilities arising in the ordinary course of business shall
not be considered Debt for purposes of this definition.
"FTX" means Freeport-McMoRan Inc., a Delaware
corporation.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt of any other Person and,
without limiting the generality of the foregoing, any obliga-
tion, direct or indirect, contingent or otherwise, (i) to
purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt (whether arising by virtue of part-
nership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other manner
the obligee of such Debt of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in
part); and "Guaranteed", "Guaranteeing" and "Guarantor" shall
have meanings correlative to the foregoing; provided,
however, that the Guarantee by any Person shall not include
endorsements by such Person for collection or deposit, in
either case in the ordinary course of business.
"Lien" means, with respect to any property or
assets, any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, lien,
charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance,
preference, priority or other security agreement or preferen-
tial arrangement of any kind or nature whatsoever on or with
respect to such property or assets (including, without
limitation, any conditional sale or other title retention
agreement having substantially the same economic effect as
any of the foregoing); provided, however, that "Lien" shall
not include a trust established for the purpose of defeasing
any Debt, pursuant to the terms evidencing or providing for
the issuance of such Debt.
"Offer" has the meaning specified in the definition
of Offer to Purchase.
"Offer to Purchase" means a written offer (the
"Offer") sent by the Issuer by first class mail, postage
prepaid, to each Holder of a Note at his address appearing in
the Security Register on the date of the Offer offering to
purchase up to the principal amount of Notes specified in
such Offer at the price specified in such Offer (as deter-
mined pursuant to this Indenture). Unless otherwise required
by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase which shall
be, subject to any contrary requirements of applicable law,
not less than 30 days or more than 60 days after the date of
such Offer and a settlement date (the "Purchase Date") for
purchase of Securities within five Business Days after the
Expiration Date. The Issuer shall notify the Trustee at
least 15 Business Days (or such shorter period as is accept-
able to the Trustee) prior to the mailing of the Offer of the
Issuer's obligation to make an Offer to Purchase, and the
Offer shall be mailed by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the
Issuer. The Offer shall contain information concerning the
business of the Issuer and its Subsidiaries which the Issuer
in good faith believes will enable such Holders to make an
informed decision with respect to the Offer to Purchase
(which at a minimum will include (i) the most recent annual
and quarterly financial statements and "Management's Discus-
sion and Analysis of Financial Condition and Results of
Operations" contained in the documents required to be filed
with the Trustee pursuant to Section 3.12 of the First Sup-
plemental Indenture (which requirements may be satisfied by
delivery of such documents together with the Offer), (ii) a
description of material developments in the Issuer's business
subsequent to the date of the latest of such financial state-
ments referred to in clause (i) (including a description of
the events requiring the Issuer to make the Offer to Pur-
chase), (iii) if applicable, appropriate pro forma financial
information concerning the Offer to Purchase and the events
requiring the Issuer to make the Offer to Purchase and (iv)
any other information required by applicable law to be
included therein. The Offer shall contain all instructions
and materials necessary to enable such Holders to tender
Notes pursuant to the Offer to Purchase. The Offer shall
also state:
(1) the Section of the Indenture pursuant to which
the Offer to Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the Out-
standing Notes offered to be purchased by the Issuer pursuant
to the Offer to Purchase (including, if less than 100%, the
manner by which such has been determined pursuant to the
Section hereof requiring the Offer to Purchase) (the "Pur-
chase Amount");
(4) the purchase price to be paid by the Issuer
for each $1,000 aggregate principal amount of Notes accepted
for payment (as specified pursuant to this Indenture) (the
"Purchase Price");
(5) that the Holder may tender all or any portion
of the Notes registered in the name of such Holder and that
any portion of a Note tendered must be tendered in an
integral multiple of $1,000 principal amount;
(6) the place or places where Notes are to be
surrendered for tender pursuant to the Offer to Purchase;
(7) that interest on any Note not tendered or
tendered but not purchased by the Issuer pursuant to the
Offer to Purchase will continue to accrue;
(8) that on the Purchase Date the Purchase Price
will become due and payable upon each Note accepted for
payment pursuant to the Offer to Purchase and that interest
thereon will cease to accrue on and after the Purchase Date;
(9) that each Holder electing to tender a Note
pursuant to the Offer to Purchase will be required to sur-
render such Note at the place or places specified in the
Offer prior to the close of business on the Expiration Date
(such Note being, if the Issuer or the Trustee so requires,
duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Trustee
duly executed by, the Holder thereof or his attorney duly
authorized in writing);
(10) that Holders will be entitled to withdraw all
or any portion of Notes tendered if the Issuer (or its Paying
Agent) receives, not later than the close of business on the
Expiration Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of the Notes the Holder tendered, the certificate
number or numbers of the Notes the Holder tendered and a
statement that such Holder is withdrawing all or a portion of
his tender;
(11) that (a) if Notes in an aggregate principal
amount less than or equal to the Purchase Amount are duly
tendered and not withdrawn pursuant to the Offer to Purchase,
the Issuer will purchase all such Notes and (b) if Notes in
an aggregate principal amount in excess of the Purchase
Amount are tendered and not withdrawn pursuant to the Offer
to Purchase, the Issuer will purchase Notes having an
aggregate principal amount equal to the Purchase Amount on a
pro rata basis (with such adjustments as may be deemed
appropriate so that only Notes in denominations of $1,000 or
integral multiples thereof will be purchased); and
(12) that in case of any Holder whose Note is
purchased only in part, the Issuer will execute, and the
Trustee will authenticate and deliver to the Holder of such
Note without service charge, a new Note or Notes, of any
authorized denomination as requested by such Holder, in an
aggregate principal amount equal to and in exchange for the
unpurchased portion of the Note so tendered.
Any Offer to Purchase shall be governed by and effected in
accordance with the Offer for such Offer to Purchase.
"Purchase Amount" has the meaning specified in the
definition of "Offer to Purchase".
"Purchase Date" has the meaning specified in the
definition of "Offer to Purchase".
"Purchase Price" has the meaning specified in the
definition of "Offer to Purchase".
"Redeemable Stock" of any Person means any equity
security of such Person that by its terms or otherwise is
required to be redeemed prior to the final stated maturity of
the Notes or is redeemable at the option of the holder prior
to the final stated maturity of the Notes.
"Related Person" of any Person means, without
limitation, any other Person owning (a) 10% or more of the
outstanding common stock of such Person (or, in the case of a
Person that is not a corporation, 10% or more of the equity
interest in such Person) or (b) 10% or more of the combined
voting power of the Voting Stock of such Person.
"Senior Debt" means all Debt of the Issuer, includ-
ing principal, premium, if any, and interest on (including
interest accruing after the filing of a petition initiating
any proceeding pursuant to any bankruptcy law, whether or not
allowed) or other amounts payable in connection with any Debt
of the Issuer, outstanding on the date of the First Sup-
plemental Indenture or thereafter created, incurred or
assumed (other than the Notes and any other Debt of the
Issuer which expressly provides by its terms or the terms of
the instrument creating or evidencing it that it is subor-
dinate in right of payment to any other Debt of the Issuer).
Without limiting the generality of the foregoing, "Senior
Debt" shall include the principal of and premium, if any, and
interest (including interest accruing after the occurrence of
an event of default or after the filing of a petition
initiating any proceeding pursuant to any bankruptcy law,
whether or not allowed) on all obligations of every nature of
the Issuer, from time to time owed to the lenders under or in
connection with the Credit Agreement, including without
limitation all fees, expenses, indemnities, reimbursement
obligations and all obligations with respect to any interest
rate protection agreement or commodities price protection
agreement with such Credit Agreement lenders. Notwithstand-
ing the foregoing, "Senior Debt" shall not include (A) Debt
of the Issuer to any Subsidiary of the Issuer (other than any
banks party to the Credit Agreement after exercise of
remedies thereunder) or (B) any liability for federal, state
or local taxes or other taxes owed by the Issuer.
"Senior Nonmonetary Default" has the meaning
specified in Section 13.3 of the First Supplemental Inden-
ture.
"Senior Payment Default" has the meaning specified
in Section 13.3 of the First Supplemental Indenture.
"Specified Senior Debt" has the meaning specified
in Section 13.3 of the First Supplemental Indenture.
"Subsidiary" of any Person means (i) a corporation
more than 50% of the outstanding Voting Stock of which is
owned, directly or indirectly, by such Person or by one or
more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person
(other than a corporation) in which such Person, or one or
more other Subsidiaries of such Person or such Person and one
or more other Subsidiaries thereof, directly or indirectly,
has at least a majority ownership and power to direct the
policies, management and affairs thereof.
"Voting Stock" of any Person means any and all
shares, interests, participations or other equivalents
(however designated) of such Person which ordinarily has
voting power for the election of directors (or persons per-
forming similar functions) of such Person."
3. For purposes of the Notes, and for the benefit
of the Holders thereof, Article Three of the Original Inden-
ture shall be amended by adding thereto the following addi-
tional covenants of the Issuer. Such covenants shall apply
only to the Notes except to the extent specifically made
applicable to any other series of Securities by the Board
Resolutions, Officer's Certificate or supplemental indenture
establishing such series of Securities as provided for in
Section 2.3 of the Indenture.
"SECTION 3.7 Limitation on Subordinated Liens.
So long as the Notes are Outstanding, the Issuer shall not,
and shall not permit any Subsidiary to, incur or suffer to
exist any Lien on property or assets now owned or hereinafter
acquired to secure Debt which is pari passu or (by the
express terms of such Debt or of the instrument creating or
evidencing it) subordinated in right of payment to the Notes
without making, or causing such Subsidiary to make, effective
provision for securing the Notes (and, if the Issuer shall so
determine, any other Debt of the Issuer which is not subor-
dinate to the Notes or of such Subsidiary) (x) equally and
ratably with such Debt as to such property or assets for so
long as such Debt shall be so secured or (y) in the event
such Debt is subordinate in right of payment to the Notes,
prior to such Debt as to such property or assets for so long
as such Debt will be so secured.
The foregoing restrictions will not apply to Liens
in respect of Debt which is pari passu or subordinated in
right of payment to the Notes existing at the date of the
First Supplemental Indenture or to:
(i) Liens on property existing at the time of
acquisition thereof (and not incurred in anticipa-
tion of the financing of such acquisition);
(ii) Liens on property of a Person existing
at the time such Person is merged into or con-
solidated with the Issuer or any Subsidiary;
(iii) Liens to secure Debt incurred for the
purpose of financing all or any part of the pur-
chase price or the cost of construction or improve-
ment of the property subject to such Liens;
provided, however, that (a) the principal amount of
any Debt secured by such a Lien does not exceed
100% of such purchase price or cost and (b) such
Lien does not extend to or cover any other property
other than such item of property and any improve-
ments on such item; and
(iv) Liens to secure any extension, renewal
or refinancing (or successive extensions, renewals
or refinancings), in whole or in part, of any Debt
secured by Liens referred to in the foregoing
clauses (i) to (iii) so long as such Lien does not
extend to any other property and the Debt so
secured is not increased.
SECTION 3.8 Limitation on Certain Debt. So long
as the Notes are Outstanding, the Issuer shall not incur any
Debt which by its terms is both (i) subordinated in right of
payment to any Senior Debt and (ii) senior in right of pay-
ment to the Notes.
SECTION 3.9 Transactions with Affiliates and
Related Persons. So long as the Notes are Outstanding, the
Issuer shall not, and shall not permit any Subsidiary to,
enter into any transaction or series of related transactions
involving aggregate consideration in excess of $1,000,000
and not in the ordinary course of business with an Affiliate
of the Issuer or a Related Person of the Issuer, including
any loan, advance or investment, either directly or
indirectly, unless:
(1) the Board of Directors or any Committee
of the Board of Directors of the Administrative
Managing General Partner of the Issuer (collec-
tively, the "Board") has adopted a resolution
approving such transaction as having terms no less
favorable to the Issuer or such Subsidiary than
those that could be obtained in a comparable arms
length transaction with an unrelated third party,
or
(2) the Issuer delivers to the Trustee an
opinion of a nationally recognized investment
banking firm stating that such transaction is fair
to the Issuer from a financial point of view.
For purposes of this covenant, transactions in the
ordinary course of business shall include but not be limited
to any transaction relating to:
(i) the payment to FTX or any of its Sub-
sidiaries, as unitholders of the Issuer, of
dividends and other distributions, including
deferred amounts, and the right to receive such
dividends or other distributions,
(ii) any arrangement that is either consis-
tent with past practices of the Issuer or approved
by the Board as being in the best interest of the
Issuer,
(iii) transactions between the Issuer or its
Subsidiaries and any employees, and
(iv) the payment of reasonable and customary
fees to the Managing General Partners of the
Issuer.
The above requirements shall not be applicable to
any transaction among the Issuer, its wholly owned Sub-
sidiaries, Agrico, Limited Partnership, IMC-Agrico Company,
or any combination thereof, nor shall compliance with the
requirements of the Credit Agreement, including the granting
of the Liens provided for therein, be regarded as transac-
tions with an Affiliate of the Issuer.
SECTION 3.10 Certain Sales of Assets. So long as
the Notes are Outstanding, the Issuer will not, and will not
cause or permit any Subsidiary to, consummate an Asset Dis-
position, unless: (i) the Issuer or such Subsidiary, as the
case may be, receives consideration at least equal to the
fair market value (as determined in good faith by the Board
whose determination thereof shall be conclusive) of the
shares or assets sold or otherwise disposed of; provided
that no consideration shall be required to be received by the
Issuer in the case of a transaction described in paragraph B
of the definition of "Net Proceeds" below, and (ii) either:
(a) within 360 days after the later of the
consummation of the Asset Disposition or the
receipt of Net Proceeds therefrom, the Issuer or
such Subsidiary applies (or in the case of clause
(2) below commences to apply) the Net Proceeds
either: (1) to acquire the Notes or to repay any
Senior Debt of the Issuer or any Debt which is
either pari passu to the Notes or secured by such
shares or assets sold or otherwise disposed of, (2)
to commence reinvestment, either directly or
through a Subsidiary of the Issuer, of such Net
Proceeds in any natural resource, fertilizer or
related business (including, without limitation,
the production, exploration, extraction, develop-
ment, marketing or refining of natural resources),
whether or not conducted by the Issuer as of the
date of the First Supplemental Indenture, and
delivers to the Trustee a Certificate of the
Administrative Managing General Partner outlining
the amount of the Net Proceeds to be used for the
proposed reinvestment and the approximate timing of
such reinvestment (it being understood that, in
connection with any reinvestment commenced in
accordance with this clause (2), the amount of Net
Proceeds deemed to be applied to such reinvestment
shall be the aggregate Net Proceeds estimated to be
required for such reinvestment as outlined in such
Certificate) or (3) to invest in Permitted Invest-
ments; or
(b) to the extent the Issuer or such Sub-
sidiary does not apply (or commence to apply) all
or any part of such Net Proceeds in accordance with
the immediately preceding clause (a), the Issuer
makes an Offer pursuant to an Offer to Purchase
in accordance with applicable law to purchase a
principal amount of the Notes and any other Debt
which is senior to or pari passu with the Notes and
which contains a covenant substantially similar to
this "Certain Sales of Assets" covenant equal to
the amount of such Net Proceeds which the Issuer or
such Subsidiary have not so applied (or commenced
to apply) pursuant to clause (a) above at 100% of
the principal amount plus accrued and unpaid inter-
est, if any.
Notwithstanding the foregoing, the Issuer shall not
be required to make an Offer to Purchase except to the extent
that the aggregate cumulative amount of Net Proceeds received
by the Issuer or any Subsidiary from all Asset Dispositions
and not previously applied as provided in either clauses (a)
or (b) of the next preceding sentence exceeds $150,000,000.
To the extent the Offer to Purchase is not fully subscribed
by the Holders of the Notes or other Debt, the Issuer may use
the remaining Net Proceeds for general partnership purposes,
including without limitation the payment of partnership
distributions.
If required to make an Offer to Purchase, the
Issuer will commence such offer not more than 360 days after
the later of the date of the consummation of the relevant
Asset Disposition or the receipt of Net Proceeds by the
Issuer or a Subsidiary. Prior to the Purchase Date, the
Issuer shall (i) accept for payment (on a pro rata basis, if
necessary) Notes or portions thereof tendered pursuant to the
Offer, in an aggregate principal amount equal to the Purchase
Amount applicable to the Notes or such lesser amount of the
Notes as shall have been tendered, (ii) deposit with the
Trustee, as paying agent (or, if the Issuer is acting as its
own paying agent, segregate and hold in trust), moneys suffi-
cient to pay the Purchase Price of all Notes or portions
thereof so accepted and (iii) deliver or cause to be
delivered to the Trustee all Notes so accepted together with
an Officer's Certificate stating the Notes or portions
thereof accepted for payment by the Issuer. If the aggregate
principal amount of the Notes tendered exceeds the applicable
Purchase Amount, the Issuer shall select the Notes to be
purchased on a pro rata basis to the nearest $1,000 of prin-
cipal amount. The Trustee, as paying agent, shall, on the
Purchase Date, mail or deliver payment to each Holder of a
Note or portion thereof so accepted for payment in the amount
of the Purchase Price, and the Issuer shall execute and the
Trustee shall promptly authenticate and mail a new Note equal
in principal amount to any unpurchased portion of the Notes
so surrendered. Any Note not accepted for payment shall be
promptly mailed or delivered by the Issuer to the Holder
thereof. The Issuer shall publicly announce the results of
the Offer on or as soon as practicable after the Purchase
Date.
"Asset Disposition" means, with respect to any
Person, any sale, transfer, conveyance, lease or other dis-
position (including, without limitation, by way of merger,
consolidation, spin-off, sale-leaseback or sale of shares of
capital stock in any subsidiary of such Person) by such
Person that is entered into and completed after the date of
the First Supplemental Indenture to any Person (other than
to the Issuer or a Subsidiary of any such Person and other
than in the ordinary course of business) of (i) any assets of
such Person or (ii) any shares of capital stock of such
Person's Subsidiaries, which, in either case, results in Net
Proceeds of $20,000,000 or more. For purposes of this
definition, the term "Asset Disposition" shall not include
any sales, transfer, conveyance, lease or other disposition
of assets and properties of the Issuer governed by Section
9.01 of the Original Indenture as modified by the First
Supplemental Indenture and does not include the granting of
any Lien unless and until the property subject to such Lien
is sold by or on behalf of the Person secured thereby.
"Net Proceeds" from an Asset Disposition means:
(A) cash payments received as consideration
for such Asset Disposition, including any cash
received by way of deferred payment of principal
pursuant to a note or installment receivable or
otherwise, but only as and when received (including
any cash received upon sale or disposition of such
note or receivable), but excluding any other con-
sideration received in the form of assumption by
the acquiring Person of Indebtedness or other
obligations relating to the property disposed of in
such Asset Disposition or received in any other
non-cash form; and
(B) (i) in the case of an Asset Disposition
other than an Asset Disposition described in clause
(iii) below, the aggregate fair market value of any
non-cash assets received as consideration for such
Asset Disposition, but only to the extent that such
non-cash assets are then distributed by the Issuer
as a distribution to its partners, (ii) in the case
of an Asset Disposition constituting a spin-off or
other distribution to its partners, the aggregate
fair market value on the date of such Asset Dis-
position of any non-cash assets that are dis-
tributed by the Issuer as a distribution to its
partners as part of such Asset Disposition, and
(iii) in the case of an Asset Disposition pursuant
to which the Issuer sells or otherwise conveys any
non-cash assets to any of its partners (other than
pursuant to a pro rata distribution to all of its
partners or any payments to FTX of deferred dis-
tributions) as consideration for the repurchase by
the Issuer of any of its partnership interests from
such partners, the aggregate fair market value of
the partnership interests repurchased provided that
in each such case the fair market value shall be
determined in good faith by the Board and such
determination shall be conclusive; and, provided
further, that, in the case of each of subclauses
(i), (ii) and (iii) of this clause (B), any such
Net Proceeds shall be deemed to have been received,
in respect of any Asset Disposition, at the time
when the Issuer distributes or otherwise sells or
conveys such non-cash assets to its partners;
in each case (A) or (B), net of all expenses,
commissions and other fees or obligations incurred,
all taxes required to be accrued and reasonable
reserves for the after-tax cost of any indemnifica-
tion (including environmental indemnification)
payments.
"Permitted Investment" means (i) interest bearing
deposit accounts in national or state banks having a combined
capital and surplus of not less than $100,000,000 and a
Moody's Bank Credit Report Service short-term deposit rating
of P-1; (ii) bankers' acceptances drawn on and accepted by
commercial banks having a combined capital and surplus of not
less than $100,000,000 and a Moody's Bank Credit Report
Service short term deposit rating of P-1; (iii) obligations
of the United States of America or any agency or instrumen-
tality of the United States of America; (iv) commercial or
finance company paper which is rated A-1 by Standard & Poor's
or P-1 by Moody's Investors Service; (v) corporate debt
securities rated A+ by Standard & Poor's or A-1 by Moody's
Investors Service; (vi) repurchase agreements with banking or
financial institutions having a combined capital and surplus
of not less than $100,000,000 and a Moody's Bank Credit
Report Service short-term deposit rating of P-1 with respect
to any of the foregoing obligations or securities; and (vii)
money market funds with assets of at least $1,000,000,000 and
portfolio guidelines consistent with the foregoing obliga-
tions and securities. Such investments shall have maturity
dates, or shall be subject to redemption by the holder at the
option of the holder, prior to the date which is one year
from the date of purchase of such investment.
SECTION 3.11 Provisions Related to Specified
Change of Control. So long as the Notes are Outstanding,
within 60 days of a Specified Change of Control, the Issuer
shall mail an Offer pursuant to an Offer to Purchase to
purchase all of the Outstanding Notes at a purchase price
equal to 101% of their aggregate principal amount plus
accrued interest to the Purchase Date. Prior to or concur-
rently with the mailing of the Offer, the Trustee will cause
a notice to be published in The Wall Street Journal (Eastern
Edition) or another daily newspaper of national circulation
stating (A) that such notice is being given pursuant to the
provisions of this Section 3.11 as a result of a Specified
Change in Control, (B) the Purchase Price per Note, (C) the
Purchase Date, (D) the procedures that such Holder must
follow to accept the Offer to Purchase and (E) the procedures
for withdrawing an acceptance of the Offer to Purchase.
Prior to the Purchase Date, the Issuer shall (i) accept for
payment Notes or portions thereof tendered pursuant to the
Offer, (ii) deposit with the Trustee, as paying agent, moneys
sufficient to pay the Purchase Price of all Notes or portions
thereof so accepted and (iii) deliver or cause to be
delivered to the Trustee all Notes so accepted together with
an Officer's Certificate stating the Notes or portions
thereof accepted for payment by the Issuer. The Trustee, as
paying agent, shall, on the Purchase Date, mail or deliver to
the Holders of the Notes or portions thereof so accepted
payment in an amount equal to the Purchase Price, and the
Trustee shall promptly authenticate and mail or deliver to
such Holders a new Note equal in principal amount to any
unpurchased portion of the Note surrendered as requested by
the Holder. Any Note not accepted for payment shall be
promptly mailed or delivered by the Issuer to the Holder
thereof. The Issuer shall publicly announce the results of
the Offer on or as soon as practicable after the Purchase
Date.
"Specified Change of Control" is defined to mean
when (a) any Person or any Persons (other than FTX and its
Affiliates) acting together which would constitute a "group"
(a "Group") for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended, together with any
Affiliates, shall beneficially own, directly or indirectly,
more than 50% of the total voting power of all classes of
Voting Stock of the Administrative Managing General Partner
of the Issuer, and (b) there shall be a Rating Decline within
the period of 60 days following the first public announcement
of the circumstance described in clause (a) (the
"Announcement") (which period shall be extended, if during
such 60 days either both Rating Agencies shall have placed
the Issuer on credit watch or one of the Rating Agencies
shall have placed the Issuer on credit watch and the other
Rating Agency shall have made the determination described in
the definition of Rating Decline, until such time as it can
be determined whether or not there has been a Rating
Decline). A "Rating Decline" shall be deemed to have
occurred if the Notes shall be rated by each of the Rating
Agencies at a rating which is lower than the rating of the
Notes by such Rating Agency on the day before the
Announcement by more than one gradation (whether or not
within the same Rating Category). "Rating Agency" means
Standard & Poor's and its successors ("S&P"), and Moody's
Investors Service Inc. and its successors ("Moody's"), or, if
S&P and Moody's or both shall not make a rating of the Notes
publicly available, a nationally recognized statistical
rating agency or agencies, as the case may be, selected by
the Issuer which shall be substituted for S&P or Moody's or
both, as the case may be; and "Rating Category" means each
major rating category symbolized by (x) in the case of S&P,
AAA, AA, A, BBB, BB, B, CCC, CC and C and each such Rating
Category shall include pluses or minuses ("gradations")
modifying such capital letters; (y) in the case of Moody's,
Aaa, Aa, A, Baa, Ba, B, Caa, Ca and C and each such Rating
Category shall include added numerals such as 1, 2 or 3
("gradations") modifying such letters; and (z) with respect
to any other Rating Agency, comparable or equivalent symbols.
SECTION 3.12 Provision of Financial Information.
So long as the Notes are Outstanding, the Issuer will provide
to the Trustee a copy of all the annual reports, quarterly
reports and other documents which the Issuer is required to
file with the Commission pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended, or any
successor provision thereto. If, during any reporting
period, the Issuer is not required to file such reports with
the Commission, the Issuer will provide to the Trustee the
same financial reports concerning the Issuer as if the Issuer
were so required."
4. For purposes of the Notes, and for the benefit
of the Holders thereof, Section 5.1 of the Original Indenture
shall be amended (i) by amending clause (b) of the definition
of "Events of Default" as set forth below, (ii) by substitut-
ing clause (f) of the definition of "Events of Default" as
set forth below for clauses (f) and (g), (iii) by adding to
such definition a new clause (g) as set forth below and (iv)
by adding immediately after the first paragraph of Section
5.1 the Insert set forth below; provided that the Trustee
shall not be deemed to have knowledge of any such amended or
added Event of Default (except for the Event of Default set
forth in clause (b)) unless and until either (a) a Respon-
sible Officer of the Trustee assigned to its Corporate Trust
Office shall have actual knowledge of such Event of Default
or (b) the Trustee shall have received written notice thereof
mailed or delivered to its Corporate Trust Office from the
Issuer, from any Holder or from the holder of any Debt or any
agent or representative thereof, including the trustee under
any such mortgage, indenture or other instrument which is the
subject of such Event of Default. Such amended and addi-
tional Events of Default shall apply only to the Notes except
to the extent specifically made applicable to any other
series of Securities by the Board Resolutions, Officer's
Certificate or supplemental indenture establishing such
series of Securities as provided for in Section 2.3 of the
Indenture.
"(b) default in the payment of all or any
part of the principal of any of the Notes as and
when the same shall become due and payable either
at maturity, upon any redemption, by declaration or
otherwise;"
"(f) a default under any bond, debenture,
note or other evidence of Debt for money borrowed
by the Issuer (including a default with respect to
Securities of any series other than the Notes)
having an aggregate principal amount outstanding of
at least $20,000,000 or under any mortgage, inden-
ture or instrument (including this Indenture) under
which there may be issued or by which there may be
secured or evidenced any Debt for money borrowed by
the Issuer having an aggregate principal amount
outstanding of at least $20,000,000 whether such
Debt now exists or shall hereafter be created (but
excluding in any case non-recourse Debt), which
default (A) shall constitute a failure to pay any
portion of the principal of such Debt when due and
payable after the expiration of any applicable
grace period with respect thereto or (B) shall have
resulted in such Debt becoming or being declared
due and payable prior to the date on which it would
otherwise have become due and payable, without such
Debt having been discharged or such acceleration
having been rescinded or annulled, in each such
case within 30 days after such default or such
acceleration, as the case may be;"
"(g) the rendering of a final judgment
or judgments against the Issuer or any Subsidiary
in an aggregate amount equal to or in excess of
$20,000,000, and any such judgments are not vacated
or discharged within 60 days after the judgment
becomes final and nonappealable;"
Insert: "If an Event of Default described in clause
(d) or clause (e) shall occur, the entire principal of the
Notes and the interest accrued thereon, if any, will ipso
facto become immediately due and payable, without any decla-
ration or other act on the part of the Trustee or any Holder
of the Notes."
5. For purposes of the Notes, and the benefit of
the Holders thereof, Article Nine of the Original Indenture
shall be amended by deleting Section 9.1 of the Original
Indenture and substituting therefor the following provisions.
Such amended provisions shall apply only to the Notes except
to the extent specifically made applicable to any other
series of Securities by the Board Resolutions, Officer's
Certificate or supplemental indenture establishing such
series of Securities as provided for in Section 2.3 of the
Indenture.
"SECTION 9.1 Covenant Not to Merge, Consolidate,
Sell or Convey Property Except Under Certain Conditions. So
long as the Notes are Outstanding, the Issuer covenants that
it will not (i) consolidate with or merge into any other
Person or permit any other Person to consolidate with or
merge into the Issuer or (ii) directly or indirectly, trans-
fer, sell, lease or otherwise dispose of all or substantially
all of its assets; unless:
(1) if the Issuer is not the surviving
entity, the successor entity or the Person which
acquires directly or indirectly by transfer, sale,
lease or other disposition all or substantially all
of the assets of the Issuer (the "Successor
Issuer") is organized under the laws of the United
States or any state thereof or the District of
Columbia and the Successor Issuer assumes all the
obligations of the Issuer under the Indenture and
the Notes by a supplemental indenture in form
satisfactory to the Trustee, executed and delivered
to the Trustee by the Successor Issuer; and
(2) immediately after giving effect to such
transaction, no Event of Default or event which,
with the giving of notice or the passage of time or
both, would constitute an Event of Default shall
have occurred and be continuing.
If the Successor Issuer is not a partnership, the
Indenture will be amended so that terms such as "partners"
and "distributions to partners" are revised to refer to
"Stockholders" and "dividends or other distributions to
stockholders" or similar terms that are appropriate to the
type of entity which constitutes the Successor Issuer."
6. For purposes of the Notes, and the benefit of
the Holders thereof, Section 10.1(B) of the Original Inden-
ture shall be replaced in its entirety by the following
provisions. Such provisions shall apply only to the Notes
except to the extent specifically made applicable to any
other series of Securities by the Board Resolutions,
Officer's Certificate or supplemental indenture establishing
such series of Securities as provided for in Section 2.3 of
the Indenture.
"(B) In addition to discharge of the Indenture
pursuant to the next preceding paragraph, in the case of the
Notes,
(x) the Issuer shall be deemed to have paid and
discharged the entire indebtedness on all the Notes on the
91st day after the date of the deposit referred to in sub-
paragraph (a) below, and the provisions of this Indenture
with respect to the Notes shall no longer be in effect
(except as to (i) rights of registration of transfer and
exchange of Notes and the Issuer's right of optional redemp-
tion, (ii) substitution of mutilated, defaced, destroyed,
lost or stolen Notes, (iii) rights of Holders of Notes to
receive payments of principal thereof and interest thereon,
upon the original stated due dates therefor (but not upon
acceleration), (iv) the rights, obligations, duties and
immunities of the Trustee hereunder, (v) the rights of the
Holders of Notes as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any
of them and (vi) the obligations of the Issuer under Section
3.2), such result being referred to herein as a "defeasance",
and the Trustee, at the expense of the Issuer, shall at the
Issuer's request, execute proper instruments acknowledging
the same, if
(a) with reference to this provision the
Issuer has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust
funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the
Holders of the Notes (i) cash in an amount, or (ii)
U.S. Government Obligations, maturing as to prin-
cipal and interest at such times and in such
amounts as will insure the availability of cash or
(iii) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of inde-
pendent public accountants expressed in a written
certification thereof delivered to the Trustee, to
pay the principal and interest on all Notes on the
date of maturity thereof or on a specified date
prior to their maturity, if such date is one upon
which the Notes may be optionally redeemed in
accordance with their terms and if the Issuer has
made arrangements with the Trustee satisfactory to
the Trustee for the optional redemption of all of
the Notes on such specified date;
(b) such deposit will not result in a breach
or violation of, or constitute a default under, any
agreement or instrument to which the Issuer is a
party or by which it is bound;
(c) no Event of Default or event that with
the passing of time or the giving of notice, or
both, shall constitute such an Event of Default
shall have occurred and be continuing;
(d) the Issuer has delivered to the Trustee
an Opinion of Counsel based on the fact that (x)
the Issuer has received from, or there has been
published by, the Internal Revenue Service a ruling
or (y) since the date hereof, there has been a
change in the applicable Federal income tax law, in
either case to the effect that, and such opinion
shall confirm that, the Holders of the Notes will
not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to
Federal income tax on the same amount and in the
same manner and at the same times, as would have
been the case if such deposit, defeasance and
discharge had not occurred;
(e) the Issuer has delivered to the Trustee
an Opinion of Counsel stating that such deposit
will not cause the Trustee or the trust so created
to be subject to the Investment Company Act of
1940; and
(f) the Issuer has delivered to the Trustee
an Officer's Certificate and an Opinion of Counsel,
each stating that all conditions precedent provided
for relating to the defeasance contemplated by this
provision have been complied with; and
(y) the Issuer shall be permitted to (i) omit
to comply with the covenants added to the Indenture by
paragraph 3 of the Supplemental Indenture, (ii) be no
longer subject to the Events of Default specified in
clauses (c) (with respect to covenants so added by such
paragraph 3), (f) and (g) of the definition of "Events
of Default" contained in Section 5.1 of the Indenture as
amended by paragraph 4 of the Supplemental Indenture
("Defeasable Events") and (iii) cease to comply with
Article Thirteen of the Indenture as amended by
paragraph 7 of the Supplemental Indenture, as of the
15th day after the date of the deposit referred to in
subparagraph (a) below, such result being referred to
herein as a "covenant defeasance", (it being understood
that, notwithstanding such covenant defeasance, the
obligation of the Issuer to pay and the rights of
Holders of the Notes to receive payments of principal
thereof and interest thereon, upon the original stated
due dates therefor, pursuant to Section 3.1 of the
Indenture shall remain in full force and effect); and
the Trustee, at the expense of the Issuer, shall at the
Issuer's request, execute proper instruments acknowl-
edging the same, if the Issuer notifies the Trustee that
the provisions of this Section 10.1(B) are being com-
plied with solely to effect a covenant defeasance and
if
(a) with reference to this provision the
Issuer has irrevocably deposited or caused to
be irrevocably deposited with the Trustee as
trust funds in trust, specifically pledged as
security for, and dedicated solely to, the
benefit of the Holders of the Notes (i) cash
in an amount, or (ii) U.S. Government Obliga-
tions, maturing as to principal and interest
at such times and in such amounts as will
insure the availability of cash or (iii) a
combination thereof, sufficient, in the
opinion of a nationally recognized firm of
independent public accountants expressed in a
written certification thereof delivered to the
Trustee, to pay the principal and interest on
all Notes on the date of maturity thereof or
on a specified date prior to their maturity,
if such date is one upon which the Notes may
be optionally redeemed in accordance with
their terms and if the Issuer has made arran-
gements with the Trustee satisfactory to the
Trustee for the optional redemption of all of
the Notes on such specified date;
(b) such deposit will not result in a
breach or violation of, or constitute a
default under, any agreement or instrument to
which the Issuer is a party or by which it is
bound;
(c) no Event of Default (other than an
Event of Default related to a Defeasable
Event) or event that with the passing of time
or the giving of notice, or both, shall con-
stitute such an Event of Default shall have
occurred and be continuing;
(d) the Issuer has delivered to the
Trustee an Opinion of Counsel to the effect
that, and such opinion shall confirm that, the
Holders of the Notes will not recognize
income, gain or loss for Federal income tax
purposes as a result of such deposit,
defeasance and discharge and will be subject
to Federal income tax on the same amount and
in the same manner and at the same times, as
would have been the case if such deposit,
defeasance and discharge had not occurred;
(e) the Issuer has delivered to the
Trustee an Opinion of Counsel stating that
such deposit will not cause the Trustee or
the trust so created to be subject to the
Investment Company Act of 1940; and
(f) the Issuer has delivered to the
Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that all
conditions precedent provided for relating to
the defeasance contemplated by this provision
have been complied with.
7. For purposes of the Notes, and the
benefit of the Holders thereof, Article Thirteen
of the Original Indenture shall be replaced in its
entirety by the following provisions. Such provi-
sions shall apply only to the Notes except to the
extent specifically made applicable to any other
series of Securities by the Board Resolutions,
Officer's Certificate or supplemental indenture
establishing such series of Securities as provided
for in Section 2.3 of the Indenture.
"SECTION 13.1 Notes Subordinate to
Senior Debt. The Issuer covenants and agrees, and
each Holder of a Note, by his acceptance thereof,
likewise covenants and agrees, that, to the extent
and in the manner hereinafter set forth in this
Article Thirteen, the indebtedness represented by
the Notes and the payment of the principal of (and
premium, if any) and interest on each and all of
the Notes (but not amounts owing to the Trustee by
the Issuer pursuant to Section 6.6 hereof) are
hereby expressly made subordinate and subject in
right of payment to the prior payment in full of
all Senior Debt.
SECTION 13.2 Payment Over of Proceeds
Upon Dissolution, Etc. In the event of (a) any
insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other
similar case or proceeding in connection therewith,
relative to the Issuer or to its creditors, as
such, or to its assets, or (b) any liquidation,
dissolution or other winding up of the Issuer,
whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (c) any
assignment for the benefit of creditors or any
other marshalling of assets and liabilities of the
Issuer, then and in any such event specified in
(a), (b) or (c) above (each such event, if any,
herein sometimes referred to as a "Proceeding") the
holders of Senior Debt shall first be entitled to
receive payment in full of all amounts payable with
respect to such Senior Debt, before the Holders of
the Notes are entitled to receive any payment on
account of principal of (or premium, if any) or
interest on the Notes or on account of purchase or
redemption or other acquisition of Notes by the
Issuer or any Affiliate of the Issuer (individually
and collectively, a "Notes Payment"), and to that
end the holders of Senior Debt shall be entitled to
receive, for application to the payment thereof,
any payment or distribution of any kind or charac-
ter, whether in cash, property or securities which
may be payable or deliverable in respect of the
Notes in any such Proceeding.
In the event that, notwithstanding the
foregoing provisions of this Section 13.2, the
Trustee or the Holder of any Note shall have
received any payment or distribution of assets of
the Issuer of any kind or character, whether in
cash, property or securities, before all Senior
Debt is paid in full, and if such fact shall, at or
prior to the time of such payment or distribution,
have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such
payment or distribution shall be held in trust for
the holders of Senior Debt and shall be paid over
or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, cus-
todian, assignee, agent or other Person making
payment or distribution of assets of the Issuer for
application to the payment of all Senior Debt
remaining unpaid, to the extent necessary to pay
all Senior Debt in full, after giving effect to any
concurrent payment or distribution to or for the
holders of Senior Debt.
For purposes of this Article Thirteen
only, the words "any payment or distribution of any
kind or character, whether in cash, property or
securities" shall not be deemed to include a pay-
ment or distribution of stock or securities of the
Issuer provided for by a plan of reorganization or
readjustment or of any other corporation provided
for by such plan of reorganization or readjustment
which stock or securities are subordinated in right
of payment to all then outstanding Senior Debt to
substantially the same extent as the Notes are so
subordinated as provided in this Article Thirteen;
provided that (i) the Senior Debt is assumed by the
new corporation, if any, resulting from any such
arrangement, reorganization or readjustment, and
(ii) the rights of the holders of the Senior Debt
are not, without the consent of such holders,
impaired by such arrangement, reorganization or
readjustment. The consolidation of the Issuer
with, or the merger of the Issuer into, another
Person or the liquidation or dissolution of the
Issuer following the conveyance or transfer of its
properties and assets substantially as an entirety
to another Person upon the terms and conditions set
forth in Article Nine shall not be deemed a
Proceeding for the purposes of this Section if the
Person formed by such consolidation or into which
the Issuer is merged or the Person which acquires
by conveyance or transfer such properties and
assets substantially as an entirety, as the case
may be, shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the
conditions set forth in Article Nine.
SECTION 13.3 No Payment When Senior
Debt in Default. In the event that any Senior
Payment Default (as defined below) shall have
occurred and be continuing, then no Notes Payment
shall be made unless and until such Senior Payment
Default shall have been cured or waived or shall
have ceased to exist or all amounts then due and
payable in respect of all Senior Debt shall have
been paid in full. For purposes hereof, "Senior
Payment Default" means any default in the payment
of principal of (or premium, if any) or interest on
Specified Senior Debt (as defined below), or any
other amount of Senior Debt owing, including the
payment of commitment or facility fees, letter of
credit fees or agency fees under the Credit Agree-
ment, when due, whether at the fixed maturity of
any such payment or by declaration of acceleration,
call for redemption or otherwise.
In the event that any Senior Nonmonetary
Default (as defined below) shall have occurred and
be continuing, then, upon the receipt by the Issuer
and the Trustee of written notice of such Senior
Nonmonetary Default from the Agent Bank for the
Credit Agreement or, if there is then no Credit
Agreement, from an authorized Person on behalf of
any holder of any other Specified Senior Debt, no
Notes Payment shall be made during the period (the
"Payment Blockage Period") commencing on the date
of such receipt of such written notice (the "Block-
age Notice") and ending on the earliest of (i) the
date, if any, on which the Specified Senior Debt to
which such default relates is discharged or such
default is waived or otherwise cured, (ii) the
179th day after the date of such receipt of such
written notice and (iii) the date, if any, on which
such Payment Blockage Period shall have been ter-
minated by written notice to the Issuer or Trustee
from the Agent Bank for the Credit Agreement, or
from the person who gave the Blockage Notice. In
any event, not more than one Payment Blockage
Period may be commenced during any period of 360
consecutive days, and there shall be a period of at
least 181 consecutive days in each period of 360
consecutive days when no Payment Blockage Period is
in effect. No Senior Nonmonetary Default that
existed or was continuing on the date of commence-
ment of any Payment Blockage Period with respect to
the Specified Senior Debt initiating such Payment
Blockage Period shall be, or be made, the basis for
the commencement of a subsequent Payment Blockage
Period unless such Senior Nonmonetary Default shall
have been cured or waived for a period of not less
than 90 consecutive days. For the purposes hereof,
"Specified Senior Debt" means (i) all Senior Debt
under the Credit Agreement and (ii) any other issue
of Senior Debt having a principal amount of at
least $10,000,000. For purposes hereof, "Senior
Nonmonetary Default" means the occurrence or exist-
ence of any event, circumstance, condition or state
of facts that, by the terms of any instrument
pursuant to which any Senior Debt is outstanding,
permits one or more holders of such Senior Debt (or
a trustee or agent on behalf of the holders
thereof) to declare such Senior Debt due and pay-
able prior to the date on which it would otherwise
become due and payable, other than a Senior Payment
Default.
In the event that, notwithstanding the
foregoing, the Issuer shall make any payment to the
Trustee or any Holder prohibited by the foregoing
provisions of this Section 13.3, and if such fact
shall, at or prior to the time of such payment,
have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such
payment shall be held in trust for the holders of
Senior Debt and shall be paid over and delivered
forthwith to the holders of the Senior Debt remain-
ing unpaid, to the extent necessary to pay in full
all the Senior Debt.
SECTION 13.4 Payment Permitted If No
Default. Nothing contained in this Article Thirteen
or elsewhere in this Indenture or in any of the
Notes shall prevent (a) the Issuer, at any time
except during the pendency of any Proceeding
referred to in Section 13.2 or under the conditions
described in Section 13.3, from making Notes Pay-
ments, or (b) the application by the Trustee of any
money deposited with it hereunder to Notes Payments
or the retention of such payment by the Holders,
if, at the time of such application by the Trustee,
it did not have knowledge that such payment would
have been prohibited by the provisions of this
Article Thirteen.
SECTION 13.5 Subrogation to Rights of
Holders of Senior Debt. Subject to the payment in
full of all amounts due or to become due on or in
respect of Senior Debt, the Holders of the Notes
shall be subrogated to the rights of the holders of
such Senior Debt to receive payments and distribu-
tion of cash, property and securities applicable to
the Senior Debt until the principal of (and
premium, if any) and interest on the Notes shall be
paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the
Senior Debt of any cash, property or securities to
which the Holders of the Notes or the Trustee would
be entitled except for the provisions of this
Article Thirteen, and no payments over pursuant to
the provisions of this Article Thirteen to the
holders of Senior Debt by Holders of the Notes or
the Trustee, shall, as among the Issuer, its
creditors other than holders of Senior Debt and the
Holders of the Notes, be deemed to be a payment or
distribution by the Issuer to or on account of the
Senior Debt.
SECTION 13.6 Provisions Solely to
Define Relative Rights. The provisions of this
Article Thirteen are and are intended solely for
the purpose of defining the relative rights of the
Holders on the one hand and the holders of Senior
Debt on the other hand. Nothing contained in this
Article Thirteen or elsewhere in this Indenture or
in the Notes is intended to or shall (a) impair, as
among the Issuer, its creditors other than holders
of Senior Debt and the Holders of the Notes, the
obligation of the Issuer, which is absolute and
unconditional (and which, subject to the rights
under this Article Thirteen of the holders of
Senior Debt, is intended to rank equally with all
other general obligations of the Issuer) to pay to
the Holders of the Notes the principal of (and
premium, if any) and interest on the Notes as when
the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights
against the Issuer of the Holders of the Notes and
creditors of the Issuer other than the holders of
Senior Debt; or (c) prevent the Trustee or the
Holder of any Note from exercising all remedies
otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if
any, under this Article Thirteen of the holders of
Senior Debt to receive cash, property and
securities otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 13.7 Trustee to Effectuate
Subordination. Each Holder of a Note by his accept-
ance thereof authorizes and directs the Trustee on
his behalf to take such action as may be necessary
or appropriate to effectuate the subordination
provided in this Article Thirteen and appoints the
Trustee his attorney-in-fact for any and all such
purposes.
SECTION 13.8 No Waiver of Subordination
Provisions. No right of any present or future
holder of any Senior Debt to enforce subordination
as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act
on the part of the Issuer or by any act or failure
to act, in good faith, by any such holder, or by
any noncompliance by the Issuer with the terms,
provisions and covenants of this Indenture, regard-
less of any knowledge thereof any such holder may
have or be otherwise charged with.
Without in any way limiting the
generality of the foregoing paragraph, the holders
of Senior Debt may, at any time and from time to
time, without the consent of or notice to the
Trustee or the Holders of the Notes, without incur-
ring responsibility to the Trustee or the Holders
of the Notes and without impairing or releasing the
subordination provided in this Article Thirteen or
the obligations hereunder of the Holders of the
Notes to the holders of Senior Debt, do any one or
more of the following: (i) change the manner,
place or terms of payment or extend the time of
payment of, or renew or alter, Senior Debt, or
otherwise amend or supplement in any manner Senior
Debt or any instrument evidencing the same or any
agreement under which Senior Debt is outstanding;
(ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise secur-
ing Senior Debt; (iii) release any Person liable in
any manner for the collection of Senior Debt; and
(iv) exercise or refrain from exercising any rights
against the Issuer and any other Person.
SECTION 13.9 Notice to Trustee. The
Issuer shall give prompt written notice to the
Trustee of any fact known to the Issuer which would
prohibit the making of any payment of moneys to or
by the Trustee in respect of the Notes and of any
subsequent event which would permit the making of
any such payment. Notwithstanding the provisions
of this Article Thirteen or any other provision of
this Indenture, the Trustee shall not be charged
with knowledge of the existence of any facts which
would prohibit the making of any payment to or by
the Trustee in respect of the Notes, unless and
until the Trustee shall have received written
notice thereof, mailed or delivered to the Trustee
at its corporate trust office, from the Issuer or a
holder of Senior Debt or from any trustee therefor
or an agent or representative thereof; provided
that if at least three Business Days prior to the
date upon which by the terms hereof any such moneys
may become payable for any purpose (including,
without limitation, the payment of the principal of
or interest or premium (if any) on any Note) the
Trustee shall not have received with respect to
such moneys the notice provided for in this Sec-
tion, then, anything herein contained to the con-
trary notwithstanding, the Trustee shall have full
power and authority to receive such moneys and to
apply the same to the purpose for which they were
received and shall not be affected by any notice to
the contrary that may be received by it within
three Business Days prior to or on or after such
date.
Subject to the provisions of Section 6.1,
the Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt
(or a trustee therefor or an agent or repre-
sentative thereof) to establish that such notice
has been given by a holder of Senior Debt (or a
trustee therefor or an agent or representative
thereof). In the event that the Trustee determines
in good faith that further evidence is required
with respect to the right of any Person as a holder
of Senior Debt to participate in any payment or
distribution pursuant to this Article Thirteen, the
Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to
the amount of Senior Debt held by such Person, the
extent to which such Person is entitled to par-
ticipate in such payment or distribution and any
other facts pertinent to the rights of such Person
under this Article Thirteen, and if such evidence
is not furnished, the Trustee may defer any payment
to such Person pending judicial determination as to
the right of such Person to receive such payment.
SECTION 13.10 Reliance on Judicial
Order or Certificate of Liquidating Agent. Upon
any payment or distribution of assets of the Issuer
referred to in this Article Thirteen, the Trustee,
subject to the provisions of Section 6.1, and the
Holders of the Notes shall be entitled to rely upon
any order or decree entered by any court of com-
petent jurisdiction in such Proceeding, or a cer-
tificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the
benefit of creditors, agent or other Person making
such payment or distribution, delivered to the
Trustee or to the Holders of Notes, for the purpose
of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the
Senior Debt and other Debt of the Issuer, the
amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Thir-
teen.
SECTION 13.11 Trustee Not Fiduciary for
Holders of Senior Debt. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of
Senior Debt and shall not be liable to any such
holders if it shall in good faith mistakenly pay
over or distribute to Holders of Notes or to the
Issuer or to any other Person cash, property or
securities to which any holders of Senior Debt
shall be entitled by virtue of this Article Thir-
teen or otherwise. The Trustee's duties with
respect to holders of Senior Debt are limited to
those specifically set forth in this Indenture, and
no implied covenants or obligations shall be con-
strued by any provision hereof.
SECTION 13.12 Rights of Trustee as
Holder of Senior Debt; Preservation of Trustee's
Rights. The Trustee in its individual capacity
shall be entitled to all the rights set forth in
this Article Thirteen with respect to any Senior
Debt which may at any time be held by it, to the
same extent as any other holder of Senior Debt, and
nothing in this Indenture shall deprive the Trustee
of any of its rights as such holder.
Nothing in this Article Thirteen shall
apply to claims of, or payments to, the Trustee
under or pursuant to Section 6.6.
SECTION 13.13 Applicability to Paying
Agents. In case at any time any Paying Agent other
than the Trustee shall have been appointed by the
Issuer and be then acting hereunder, the term
"Trustee" as used in this Article Thirteen shall in
such case (unless the context otherwise requires)
be construed as extending to and including such
Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were
named in this Article Thirteen in addition to or in
place of the Trustee; provided, however, that this
Section 13.13 shall not apply to the Issuer or any
Affiliate of the Issuer if it or such Affiliate
acts as Paying Agent.
SECTION 13.14 Defeasance of this
Article Thirteen. The subordination of the Notes
provided by this Article Thirteen is expressly made
subject to the provisions for discharge, defeasance
or covenant defeasance in Article Ten of the Inden-
ture and, anything herein to the contrary not-
withstanding, upon and subject to the effectiveness
of any such discharge, defeasance or covenant
defeasance, the Notes shall thereupon cease to be
subordinated pursuant to this Article Thirteen.
SECTION 13.15 Modification of Indenture
With Respect to Subordination. Notwithstanding the
provisions of Section 8.2 of the Original Inden-
ture, no supplemental indenture entered into pur-
suant thereto shall amend the provisions of the
Indenture with respect to subordination in a manner
that will adversely affect the Holders of the Notes
without the consent of the Holder of each Note so
affected.
SECTION 13.16 References to Senior
Indebtedness. All references in the Original
Indenture (other than in Article Thirteen) to
"Senior Indebtedness" shall be deemed to include
"Senior Debt" as defined in the First Supplemental
Indenture."
8. The Issuer hereby appoints the Trus-
tee as paying agent, transfer agent and registrar
for the Notes and the agency where notices and
demands to or upon the Issuer in respect of the
Notes or the Indenture may be served.
9. This Supplemental Indenture and each
Note shall be deemed to be a contract under the
laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of
such State, except as may otherwise be required by
mandatory provisions of law.
10. This Supplemental Indenture may be
executed in any number of counterparts, each of
which shall be an original; but such counterparts
shall together constitute but one and the same
instrument.
11. The recitals contained herein shall
be taken as the statements of the Issuer and the
Trustee assumes no responsibility for the correct-
ness of same. The Trustee makes no representations
as to the validity of this Supplemental Indenture.
IN WITNESS WHEREOF, the parties hereto
have caused this First Supplemental Indenture to be
duly executed, and the appropriate corporate seals
to be hereunto affixed and attested, all as of
February 15, 1994.
FREEPORT-McMoRan RESOURCE
PARTNERS, LIMITED PARTNERSHIP
By FREEPORT-McMoRan INC.
(Administrative Managing
General Partner)
By ____________________________
Title: Vice President and
Treasurer
(CORPORATE SEAL)
Attest:
By ___________________________
Title: Secretary, Freeport-
McMoRan Inc.
CHEMICAL BANK, as Trustee
By ____________________________
Title:
(CORPORATE SEAL)
Attest:
By _________________________
Title:
STATE OF LOUISIANA )
) ss.:
PARISH OF ORLEANS )
On this ____ of February, 1994 before me
personally came ____________, to me personally
known, who, being by me duly sworn, did depose and
say that he resides at _________________________;
that he is the ________________ of Freeport-McMoRan
Inc., one of the corporations which executed the
above instrument; that he knows the corporate seal
of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of
said corporation, and that he signed his name
thereto by like authority.
(NOTARIAL SEAL)
-----------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ of February, 1994 before me
personally came , to me personally known,
who, being by me duly sworn, did depose and say
that he resides at that he is a
of , one of the corporations which
executed the above instrument; that he knows the
corporate seal of said corporation; that the seal
affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed
his name thereto by like authority.
(NOTARIAL SEAL)
---------------------
Notary Public
Exhibit 12.1
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------------
1989 1990 1991 1992 1993
--------- --------- --------- ---------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Income (loss) from continuing operations $133,583 $243,647 $111,839 $20,211 $(222,411)
Add:
Interest expense 30,849 7,641 506 869 12,870
Rental expense factor(a) 2,352 1,678 1,915 2,371 1,378
-------- -------- -------- ------- ---------
Earnings available for fixed charges $166,784 $252,966 $114,260 $23,451 $(208,163)
======== ======== ======== ======= =========
Interest expense $ 30,849 $ 7,641 $ 506 $ 869 $ 12,870
Capitalized interest 1,805 6,000 23,271 19,116 11,070
Rental expense factor(a) 2,352 1,678 1,915 2,371 1,378
-------- -------- -------- ------- ---------
Fixed charges $ 35,006 $ 15,319 $ 25,692 $22,356 $ 25,318
======== ======== ======== ======= =========
Ratio of earnings to fixed charges(b) 4.8X 16.5X 4.4X 1.0X (c)
==== ===== ==== ====
<FN>
a. Portion of rent deemed representative of an interest factor.
b. For purposes of this calculation, earnings are income from continuing operations
before fixed charges. Fixed charges consist of interest and that portion of rent
deemed representative of interest.
c. Earnings were inadequate to cover fixed charges by $233.5 million.
</TABLE>
Exhibit 13.1
PORTIONS OF FRP's ANNUAL REPORT
INCORPORATED HEREIN BY REFERENCE
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
BALANCE SHEETS
December 31,
--------------------
1993 1992
------- -------
(In Thousands)
ASSETS
Current assets:
Cash and short-term investments $ 24,448 $ 7,099
Accounts receivable:
Customers 45,200 50,399
Other 17,702 12,175
Inventories:
Products 100,392 141,216
Materials and supplies 33,013 29,060
Prepaid expenses and other 2,143 22,214
---------- ----------
Total current assets 222,898 262,163
---------- ----------
Property, plant and equipment 1,762,012 1,513,323
Less accumulated depreciation and amortization 791,052 438,991
---------- ----------
Net property, plant and equipment 970,960 1,074,332
---------- ----------
Other assets 103,015 157,012
---------- ----------
Total assets $1,296,873 $1,493,507
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and accrued liabilities $ 78,443 $ 102,366
Current portion of long-term debt 465 1,575
---------- ----------
Total current liabilities 78,908 103,941
Long-term debt, less current portion 488,102 356,563
Reclamation and mine shutdown reserves 97,333 55,152
Accrued postretirement benefits and other liabilities 140,126 118,156
Partners' capital 492,404 859,695
---------- ----------
Total liabilities and partners' capital $1,296,873 $1,493,507
========== ==========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
Years Ended December 31,
---------------------------------
1993 1992 1991
---- ---- ----
(In Thousands,
Except Per Unit Amounts)
Revenues $669,160 $877,058 $885,209
Cost of sales:
Production and delivery 564,282 652,169 691,932
Depreciation and amortization 104,686 119,259 59,502
-------- -------- --------
Total cost of sales 668,968 771,428 751,434
Exploration expenses 3,092 5,814 2,895
Provision for restructuring charges 33,947 -- --
Loss on valuation and sale of assets, net 114,802 -- --
General and administrative expenses 66,769 79,073 63,684
-------- -------- --------
Total costs and expenses 887,578 856,315 818,013
-------- -------- --------
Operating income (loss) (218,418) 20,743 67,196
Interest expense, net (12,870) (869) (506)
Uranium royalties and fees -- -- 18,452
Gain on insurance settlement -- -- 17,684
Other income, net 8,877 337 9,013
-------- -------- --------
Income (loss) before changes in
accounting principle (222,411) 20,211 111,839
Cumulative effect of changes in
accounting principle (23,700) -- (96,793)
-------- -------- --------
Net income (loss) $(246,111) $ 20,211 $ 15,046
======== ======== ========
Net income (loss) per unit:
Before changes in accounting principle $(2.14) $.20 $1.34
Cumulative effect of changes in
accounting principle (.23) -- (1.16)
-------- -------- --------
$(2.37) $.20 $ .18
======== ======== ========
Average units outstanding 103,698 101,449 83,630
======== ======== ========
Distributions per publicly held unit $2.40 $2.40 $2.40
======== ======== ========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOW
Years Ended December 31,
---------------------------------
1993 1992 1991
---- ---- ----
(In Thousands)
Cash flow from operating activities:
Net income (loss) $(246,111) $ 20,211 $ 15,046
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Cumulative effect of changes in accounting
principle 23,700 -- 96,793
Depreciation and amortization 104,686 119,259 59,502
Other noncash charges to income 7,150 -- --
Provision for restructuring charges, net
of payments 3,143 -- --
Loss on valuation and sale of assets, net 114,802 -- --
Gain on insurance settlement -- -- (17,684)
(Increase) decrease in working capital,
net of effect of acquisitions and
dispositions:
Accounts receivable 710 18,317 (2,520)
Inventories 20,793 (9,983) 1,758
Prepaid expenses and other (495) (9,995) 37
Accounts payable and accrued
liabilities (31,427) (3,011) (21,091)
Reclamation and mine shutdown
expenditures (9,980) (18,038) (16,601)
Other 10,083 3,301 (8,732)
------- ------- --------
Net cash provided by (used in) operating
activities (2,946) 120,061 106,508
------- ------- --------
Cash flow from investing activities:
Capital expenditures:
Main Pass (37,427) (117,902) (291,993)
Other (14,743) (86,815) (80,179)
Sale of assets 49,961 -- --
Net insurance settlement proceeds -- 2,970 17,800
Other 4,711 (8,189) 7,494
------- ------- --------
Net cash provided by (used in)
investing activities 2,502 (209,936) (346,878)
------- ------- --------
Cash flow from financing activities:
Distributions to partners (121,180) (151,210) (200,870)
Investments by FTX and affiliates -- -- 23,169
Proceeds from debt 572,137 639,891 614,650
Repayment of debt (433,164) (826,095) (193,427)
Proceeds from sale of partnership units -- 430,534 --
------- ------- --------
Net cash provided by financing activities 17,793 93,120 243,522
------- ------- --------
Net increase in cash and short-term
investments 17,349 3,245 3,152
Cash and short-term investments
at beginning of year 7,099 3,854 702
------- ------- --------
Cash and short-term investments
at end of year $ 24,448 $ 7,099 $ 3,854
======= ======= ========
Interest paid $ 22,997 $ 19,818 $ 22,015
======= ======= ========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Units Outstanding Partners' Capital
---------------------- ---------------------------
General Limited Total General Limited Total
------- ------- ------ -------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1991 51,980 30,941 82,921 $453,105 $269,710 $722,815
Net income -- -- -- 9,339 5,707 15,046
Partnership distributions -- -- -- (126,601) (74,269) (200,870)
Investments by FTX 1,036 11 1,047 17,837 5,332 23,169
------ ------ ------ -------- -------- --------
Balance at December 31, 1991 53,016 30,952 83,968 353,680 206,480 560,160
Sale of partnership units 192 19,538 19,730 160,443 270,091 430,534
Net income -- -- -- 10,543 9,668 20,211
Partnership distributions -- -- -- (41,760) (109,450) (151,210)
Reallocation due to
disproportionate
distributions -- -- -- (41,787) 41,787 --
------ ------ ------ -------- -------- --------
Balance at December 31, 1992 53,208 50,490 103,698 441,119 418,576 859,695
Net loss -- -- -- (126,277) (119,834) (246,111)
Partnership distributions -- -- -- -- (121,180) (121,180)
Reallocation due to
disproportionate
distributions -- -- -- (62,176) 62,176 --
Other (3) 3 -- (23) 23 --
------ ------ ------ -------- -------- --------
Balance at December 31, 1993 53,205 50,493 103,698 $252,643 $239,761 $492,404
====== ====== ====== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Basis of Presentation. The financial statements of Freeport-McMoRan
Resource Partners, Limited Partnership (FRP), a Delaware limited
partnership (with Freeport-McMoRan Inc. (FTX) serving as general partner),
include all majority-owned subsidiaries. Investments in joint ventures and
partnerships are generally reflected using the proportionate consolidation
method in accordance with standard industry practice. Reclassifications
were made to prior year financial statements to conform to the 1993
presentation. All significant intercompany transactions have been
eliminated.
Cash and Short-Term Investments. FRP considers highly liquid investments
purchased with a maturity of three months or less to be cash equivalents.
Inventories. Inventories are generally stated at the lower of average cost
or market and removed at average cost.
Property, Plant and Equipment. Property, plant and equipment is carried at
cost. Cost of significant assets includes capitalized interest incurred
during the construction and development period. Expenditures for
replacements and improvements are capitalized. Depreciation expense for
mining and production assets, including mineral interests, is determined
using the unit-of-production method based on estimates of recoverable
reserves. Other assets are depreciated on a straight-line basis over
estimated useful lives of 17 to 30 years for buildings and 5 to 25 years
for machinery and equipment.
Oil Costs. FRP follows the successful efforts accounting method for its
sole oil property, Main Pass Block 299. Depreciation is determined using
the unit-of-production method.
Environmental Remediation and Compliance. Environmental expenditures that
relate to current operations are expensed or capitalized as appropriate.
Expenditures resulting from the remediation of an existing condition caused
by past operations, that do not contribute to current or future revenues,
are expensed. Liabilities are recognized for remedial activities when the
efforts are probable and the cost can be reasonably estimated.
FRP accrues estimated future expenditures to restore properties and
related facilities to a state required to comply with current environmental
and other regulations over the life of the properties. As of December 31,
1993, FRP had accrued $63.6 million for abandonment and restoration of its
non-Main Pass sulphur assets ($8.1 million reflected in accounts payable),
approximately one-half of which will be reimbursed by third parties, and
$43.1 million for reclamation of land relating to phosphate rock mining
activities ($4.6 million reflected in accounts payable). Based on current
costs, laws, and regulations, FRP estimates that its share of costs
relating to the abandonment and restoration of its Main Pass sulphur mine
will approximate $35 million, with essentially all costs to be incurred
after mine closure in approximately 30 years. These estimates can be
expected to be revised over time due to changes in government regulations,
operations, technology, and inflation.
Income Taxes. FRP is not a taxable entity and no income taxes are reported
in its financial statements; however, the tax consequences of owning FRP
units are included in the tax returns of the individual partners. The
financial statements were prepared in accordance with generally accepted
accounting principles that differ significantly from the basis for
reporting taxable income to unitholders.
Changes in Accounting Principle. During 1993, FRP adopted the following
changes to accounting policies:
Periodic Scheduled Maintenance Costs - Costs related to periodic scheduled
maintenance (turnarounds) were previously capitalized when incurred and
amortized generally over six months to two years. Effective January 1,
1993, the method of accounting was changed to expense these costs when
incurred, which conforms to the accounting policy of IMC-Agrico Company
(Note 2).
Deferred Charges - The accounting for deferred charges was changed to
provide for deferral of only those costs that directly relate to the
acquisition, construction, and development of assets and to the issuance of
debt and related instruments. Previously, certain other costs that
benefitted future periods were amortized over the periods benefitted.
Management Information Systems - Costs of management information systems
(MIS) equipment and software that have a material impact on periodic
measurement of net income are capitalized and amortized over their
estimated productive lives. Other MIS costs, including equipment and
purchased software that involve relatively immaterial amounts (currently
individual expenditures of less than $.5 million) and short estimated
productive lives (currently less than three years) are charged to expense
when incurred. During 1993, approximately $1 million of equipment and
purchased software was charged to expense. Previously, most expenditures
for MIS equipment and purchased software were capitalized. The accounting
for MIS costs was changed to recognize the rapid rate of technology change
in MIS which results in short productive lives of equipment and software
and a need for continuing investments.
The changes in accounting policy were adopted to improve the
measurement of operating results by reporting cash expenditures as expenses
when incurred unless they are directly related to long-lived asset
additions. In addition, the administrative costs of accounting for assets
will be reduced by not capitalizing and amortizing relatively insignificant
expenditures that do not have a material effect on measuring periodic net
income.
If these changes in accounting principle had not been adopted, 1993
income before change in accounting principle would not have been materially
different from the amount reported. If the changes in accounting principle
had been applied in prior years, 1992 net income would have been $11.7
million ($.11 per unit) and $15.9 million ($.19 per unit) for 1991.
2. IMC-AGRICO COMPANY
------------------
FRP and IMC Fertilizer, Inc. (IMC) formed a joint venture (IMC-Agrico
Company), operated by IMC, effective July 1, 1993, for their respective
phosphate fertilizer businesses, including phosphate rock and uranium.
FRP's "Current Interest", reflecting cash to be distributed from ongoing
operations, initially is 58.6 percent and its "Capital Interest",
reflecting the purchase or sale of long-term assets or any required capital
contributions to IMC-Agrico Company is 46.5 percent initially. These
ownership percentages decline in annual increments ultimately to 40.6
percent for the fiscal year ending June 30, 1998 and remain constant
thereafter.
FRP proportionately consolidates its interest in IMC-Agrico Company.
The assets of IMC-Agrico Company are not available to FRP until
distributions are paid by the joint venture. At December 31, 1993, the net
assets of IMC-Agrico Company totaled $1.5 billion. In January 1994, IMC-
Agrico Company declared a $52.8 million distribution payable in February
1994, of which $30.9 million is due to FRP.
FRP's pro forma results for 1993, assuming the joint venture was
formed on January 1, 1993, would be as follows (unaudited):
Revenues (000s) $642,624
Operating loss (000s) (229,633)
Net loss before changes in accounting principle (000s) (233,591)
Net loss per unit (2.25)
The pro forma results are not necessarily indicative of the actual
results that would have been achieved nor are they indicative of future
results.
3. OWNERSHIP AND DISTRIBUTIONS
---------------------------
In February 1992, FRP sold publicly 19.5 million new units, reducing FTX's
ownership in FRP from 63.1 percent to 51.3 percent. 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. FRP
no longer intends to supplement distributable cash with borrowings.
Therefore, FRP's future distributions will be dependent on the
distributions received from IMC-Agrico Company and future cash flow from
FRP's sulphur and oil operations.
On January 21, 1994, FRP declared a distribution of 60 cents per
publicly held unit ($30.3 million) and 12 cents per FTX-owned unit ($6.2
million) payable February 15, 1994, bringing the total unpaid distributions
due FTX to $239.2 million. During the Preference Period the unpaid FTX
distributions will be payable, after a 60 cents per unit quarterly
distribution is paid to all unitholders, equal to the lesser of any
deficiency or one-half of the amount by which distributable cash exceeds a
60 cents per unit distribution. Remaining distributable cash will be paid
to all unitholders in accordance with their percentage interests. After
the Preference Period distribution deficiencies on FTX-owned FRP units will
be paid in the manner described above after any deficiencies in the
cumulative quarterly distribution to the public are paid and a quarterly
distribution of 60 cents per unit has been paid to all unitholders.
4. RESTRUCTURING AND VALUATION CHARGES
-----------------------------------
Restructuring Charges. FRP recognized expense of $33.9 million during 1993
for restructuring the administrative organization (including personnel
related costs, the cost to downsize the computing and MIS structure, and a
write-off of excess facilities and other miscellaneous assets) of FTX,
primarily due to formation of IMC-Agrico Company. See Management's
Discussion and Analysis of Financial Condition and Results of Operations
for information about a reclassification of restructuring charges from
those previously reported resulting from views expressed by the Securities
and Exchange Commission staff.
Asset Sales/Recoverability. During 1993, FRP sold its remaining interests
in producing geothermal properties for $63.5 million, consisting of $23.0
million in cash and interest-bearing notes totaling $40.5 million (included
in other assets), recognizing a $31.0 million charge to expense and
recording a $9.0 million charge for impairment of its undeveloped
geothermal properties. FRP also recognized expense of $86.6 million for
the recovery of certain assets, primarily its investments in the non-Main
Pass sulphur assets because of persistent weak market conditions and the
Main Pass oil investment caused by a fourth-quarter decline in oil prices.
Additionally, FRP recognized a $11.8 million gain primarily from the sale
of certain previously mined phosphate rock acreage.
5. LONG-TERM DEBT
--------------
In June 1993, FTX amended its credit agreement (the Credit Agreement) in
which FRP participates, extending its maturity. The Credit Agreement is
structured as a three year revolving line of credit followed by a 3 1/2
year reducing revolver. The Credit Agreement in part of an $800.0 million
committed credit facility available to FTX and its subsidiaries, and is
subject to a borrowing base, redetermined annually by the banks, which
establishes maximum consolidated debt for FTX and its subsidiaries,
including FRP. As of December 31, 1993, $547.5 million was available under
the current borrowing base and $412.0 million of borrowings were unused
under the credit facility. To the extent FTX and its other subsidiaries
incur additional debt, the amount available to FRP under the Credit
Agreement may be reduced.
FTX guarantees any FRP bank borrowings and is required to retain
control of FRP. FRP is not permitted to enter into any agreement
restricting its ability to make distributions or create liens on and
security interests in its assets. Under certain circumstances FTX could be
required to pledge its FRP units and FRP could be required to grant a
security interest in its assets. The Credit Agreement provides for working
capital requirements, specified coverage of fixed charges, and restrictions
on other borrowings.
FRP has minimized amounts outstanding under the Credit Agreement by
borrowing excess funds from FTX ($100.9 million and $239.4 million
outstanding at December 31, 1993 and 1992, respectively). Interest was
charged (average rate of 4 percent in 1993 and 4.2 percent in 1992) based
on Credit Agreement rates and totaled $6.3 million in 1993 and $8.1 million
in 1992. Long-term debt at December 31, 1993 and 1992 under the Credit
Agreement was $375.0 million (average rate of 4.1 percent) and $110.0
million (average rate of 5.1 percent), respectively. The minimum principal
payments scheduled for each of the five succeeding years based on the
amounts outstanding at December 31, 1993, assuming the debt to FTX is
repaid by borrowings from the Credit Agreement and the terms of the Credit
Agreement are not extended, are $.5 million in 1994, $.5 million in 1995,
$68.4 million in 1996, $136.4 million in 1997, and $136.4 million in 1998.
FRP has an agreement with a third party fixing the interest rate on
$47.1 million of financing at an average of 10.2 percent through 1999.
Based on market conditions at December 31, 1993, unwinding the interest
swap would cost an estimated $7.2 million.
Capitalized interest totaled $11.1 million in 1993, $19.1 million in
1992, and $23.3 million in 1991.
6. PENSION AND OTHER EMPLOYEE BENEFITS
-----------------------------------
Management Services Agreement. FRP has no employees and a limited number
of officers, each of whom is an employee or officer of FTX. Under a
management services agreement, FRP reimburses FTX for costs related to
FRP's activities, including salaries and wages for operating personnel,
which totaled $137.5 million for 1993 (excluding $22.1 million of
restructuring costs), $202.0 million for 1992, and $160.0 million for 1991.
Upon formation of the IMC-Agrico Company joint venture, the operating
personnel related to FRP's transferred operations ceased to be covered by
the management services agreement with FTX. FTX operates the Main Pass oil
facilities and charges for specified overhead and other costs, FRP's share
being $.9 million in 1993, $1.9 million in 1992, and $2.6 million in 1991.
Pensions. Substantially all employees are covered by FTX's defined benefit
plan. The employees transferred to IMC-Agrico Company no longer accrue
additional benefits under the FTX plan, but rather earn benefits under the
IMC-Agrico Company plan. FTX does not separately determine accumulated
benefits and plan assets, and amounts allocated to FRP under the FTX plan
have not been material. As of December 31, 1993, FTX had fully funded its
accumulated benefit obligation under this plan.
The operator of IMC-Agrico Company maintains non-contributory pension
plans that cover substantially all of its employees who perform services
for IMC-Agrico Company. As of July 1, 1993, the actuarial present value of
the vested projected benefit obligation was $10.1 million based on a
discount rate of 8.5 percent and a 5 percent rate of increase in future
compensation levels. As of December 31, 1993, no funding of such plans had
occurred. FRP's share of the expense related to these plans totaled $1.5
million for 1993.
Other Postretirement Benefits. FTX provides certain health care and life
insurance benefits for retired employees. Effective January 1, 1991, FRP
adopted Statement of Financial Accounting Standards No. 106 (FAS 106)
requiring current accrual for postretirement benefits other than pensions,
recording a $96.8 million charge as the cumulative effect of the accounting
change. The FAS 106 expense allocated from FTX totaled $9.6 million in
1993 ($1.4 million for service cost and $8.2 million in interest for prior
period services), $9.8 million in 1992 ($1.1 million for service cost and
$8.7 million in interest for prior period services), and $9.5 million in
1991 ($1.3 million for service cost and $8.2 million in interest for prior
period services). Summary information of the plan is as follows:
December 31,
--------------
1993 1992
----- -----
(In Thousands)
Actuarial present value of accumulated
postretirement obligation:
Retirees $ 85,942 $ 72,576
Fully eligible active plan participants 10,821 17,519
Other active plan participants 9,761 16,705
-------- --------
Total accumulated postretirement obligation 106,524 106,800
Unrecognized net loss (4,724) (4,849)
-------- --------
Accrued postretirement benefit cost $101,800 $101,951
======== ========
In determining the FAS 106 amounts, FTX used an initial health care
cost trend rate of 11.5 percent for 1993 (12 percent for 1992), decreasing
1/2 percent per year until reaching 6 percent. A 1 percent increase in the
trend rate would increase the FAS 106 amounts by approximately 10 percent.
The discount rate used was 7 percent in 1993 and 8.5 percent in 1992. FTX
has the right to modify or terminate these benefits. FRP anticipates
funding these costs, in addition to the annual cash costs, over the
expected life of its mineral reserves.
The operator of IMC-Agrico Company will provide certain health care
benefits for future retired employees. At July 1, 1993, the accumulated
postretirement obligation was $16.6 million, which was unfunded, with FRP's
share of FAS 106 expense being $.4 million. In determining the FAS 106
amounts, the initial health care trend rate used was 15 percent, decreasing
gradually to 5.5 percent in 2003 and thereafter, and the discount rate used
was 8.5 percent. Employees are not vested and such benefits are subject to
change.
7. COMMITMENTS AND CONTINGENCIES
-----------------------------
Long-Term Contracts and Operating Leases. During 1991, one of FRP's
sulphur tankers ran aground resulting in a constructive loss and a $17.7
million insurance settlement gain. FRP has an agreement whereby beginning
in mid-1994 a third party will provide and operate a replacement sulphur
tanker for at least fifteen years for minimum annual payments of $12.8
million. FRP's minimum annual contractual charges under noncancellable
long-term contracts and operating leases, including the sulphur tanker,
which expire during the period 1994 to 2009 totals $216.4 million, with
$8.5 million in 1994, $16.8 million in 1995, $16.2 million in 1996, $14.9
million in 1997, and $14.8 million in 1998.
Environmental. FRP has made, and will continue to make, expenditures at
its operations for protection of the environment. FRP is subject to
contingencies as a result of environmental laws and regulations. The
related future cost is indeterminable due to such factors as the unknown
timing and extent of the corrective actions that may be required and the
application of joint and several liability. However, FRP believes that
such costs will not have a material adverse effect on its operations or
financial position.
As part of FRP's 1987 acquisition of certain fertilizer assets, the
seller agreed to indemnify FRP for any environmental remediation costs in
excess of an aggregate $5.0 million on certain identified sites. FRP
accrued the $5.0 million at the time of acquisition. The seller has
assumed control of these sites, and based on management's review of the
potential liabilities and the seller's financial condition, FRP concluded
that it is remote that FRP would have any additional liability. FRP
believes its exposure on other abandoned environmental sites will not
exceed amounts accrued and expects that any costs would be incurred over a
period of years.
8. SEGMENT FINANCIAL INFORMATION
-----------------------------
Agricultural
Minerals Oil Other Total
----------- -------- ---------- ---------
(In Thousands)
1993
Revenues $ 619,332 $ 49,828 $ - $ 669,160a
Operating loss (64,401) (1,545) (152,472)b (218,418)
Depreciation and amortization 70,803 33,883 - 104,686
Capital expenditures 46,270c 4,939d - 51,209
Total assets 1,194,304 44,887 57,682 e 1,296,873
1992
Revenues 799,032 78,026 - 877,058a
Operating income 16,625 4,644 (526) 20,743
Depreciation and amortization 66,299 52,960 - 119,259
Capital expenditures 170,224c 5,088d - 175,312
Total assets 1,233,085 128,535 131,887 e 1,493,507
1991
Revenues 880,452 4,757 - 885,209a
Operating income 70,921 (613) (3,112) 67,196
Depreciation and amortization 55,434 4,068 - 59,502
Capital expenditures 294,366c 80,589d - 374,955
Total assets 1,143,169 176,242 123,703 e 1,443,114
- - - --------
a. No customers accounted for 10 percent or more of total revenues.
Export sales accounted for 32 percent in 1993, 38 percent in 1992, and
39 percent in 1991.
b. Consists primarily of the restructuring charges and the loss on
valuation and sale of assets.
c. Includes development costs ($16.6 million in 1993 and $20.8 million in
1992) and capitalized interest ($11.1 million in 1993, $17.7 million in
1992, and $14.7 million in 1991) associated with the Main Pass sulphur
project prior to becoming operational for accounting purposes July 1,
1993.
d. Consists entirely of development costs, except for 1991 which included
$7.1 million of capitalized interest and $.9 million of capitalized
overhead.
e. Includes $49.5 million in 1993, $114.4 million in 1992, and $116.1
million in 1991 related to geothermal assets.
9. SUPPLEMENTARY MINERAL RESERVE INFORMATION (UNAUDITED)
-----------------------------------------------------
Proved and probable mineral reserves, including proved oil reserves, are as
follows:
December 31,
------------------------------------------------
1993 1992 1991 1990 1989
------- ------- ------- ------- -------
(In Thousands)
Sulphur-long tons a 38,637 41,570 42,780 44,125 45,265
Phosphate rock-short tons b 215,156 208,655 206,183 205,752 100,408
Oil-barrels c 9,962 13,861 18,496 18,785 --
- - - -----
a. Includes 38.6 million tons in 1993, 39.0 million tons in 1992, and 39.1
million tons in 1991-1989, net to FRP before royalties, at Main Pass,
subject to a 12.5 percent federal royalty based on net mine revenues.
b. For 1993 represents FRP's share, based on its current Capital Interest
ownership, of the IMC-Agrico Company reserves. Contains an average of
68 percent bone phosphate of lime. Approximately 3.6 tons of phosphate
rock are used to produce one ton of phosphoric acid and one pound of
uranium oxide. During 1990, FRP entered into exclusive long-term
purchase options for properties containing approximately 111 million
tons of phosphate rock reserves.
c. Changes in quantities reflect primarily production, except for 1993
which also includes a downward revision of .5 million barrels.
Estimates of discounted future net cash flows and changes in such
estimates, prepared in accordance with requirements prescribed by the
Financial Accounting Standards Board, are presented below.
December 31,
--------------------
1993 1992
-------- ---------
(In Thousands)
Future cash flows $103,112 $208,640
Future costs applicable to future cash flows:
Production costs (49,947) (64,451)
Development and abandonment costs (10,033) (12,978)
-------- --------
Future net cash flows 43,132 131,211
Discount for estimated timing of net cash flows
(10% discount rate) (3,295) (21,903)
-------- --------
Standardized measure of discounted future net cash
flows from proved oil reserves $ 39,837 $109,308
======== ========
Changes in standardized measure of discounted future
net cash flows from proved oil reserves:
Beginning of year $109,308 $103,022
Development costs incurred 4,939 5,088
Revisions:
Changes in prices (42,892) 34,515
Accretion of discount 10,931 10,302
Other changes, including revised estimates of
development costs, reserves, and rates of
production (4,301) 19,194
Revenues, less production costs (38,148) (62,813)
-------- --------
End of year $ 39,837 $109,308
======== ========
Standardized measure of discounted future net
cash flows from proved developed oil reserves $ 36,309 $ 76,264
======== ========
10. SUMMARIZED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
-----------------------------------------------------
<TABLE>
<CAPTION>
Operating Net Income Net Income
Revenues Income(Loss) (Loss) (Loss) Per Unit
-------- ------------- ------------- ---------------
(In Thousands, Except Per Unit Amounts)
<S> <C> <C> <C> <C>
1993
1st Quarter a $162,423 $ (59,527) $ (84,617) $(.82)
2nd Quarter b 201,684 (85,306) (79,616) (.77)
3rd Quarter 136,945 (16,813) (18,051) (.17)
4th Quarter c 168,108 (56,772) (63,827) (.62)
-------- --------- ---------
$669,160 $(218,418) $(246,111) (2.37)
======== ========= =========
1992
1st Quarter $228,536 $ 10,308 $ 7,625 $.08
2nd Quarter 244,518 15,237 17,673 .17
3rd Quarter 204,944 2,485 3,224 .03
4th Quarter 199,060 (7,287) (8,311) (.08)
-------- -------- --------
$877,058 $ 20,743 $ 20,211 .20
======== ======== ========
<FN>
a. Includes a $43.2 million charge ($.42 per unit) related to
administrative restructuring costs and the sale of producing geothermal
assets. Also includes a $23.7 million charge ($.23 per unit) for the
cumulative effect of the changes in accounting principle (Note 1).
b. Includes a $82.1 million charge ($.79 per unit) related to
restructuring charges, the recoverability of certain assets, and other
nonrecurring charges.
c. Includes a $60.0 million charge ($.58 per unit) related to the
recoverability of the Main Pass oil investment and a $10.7 million gain
($.11 per unit) from the sale of certain previously mined phosphate rock
acreage.
</TABLE>
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
REPORT OF MANAGEMENT
Freeport-McMoRan Inc., the Administrative Managing General Partner (the
General Partner) of Freeport-McMoRan Resource Partners, Limited Partnership
(the Partnership) is responsible for the preparation of the financial
statements and all other information contained in this Annual Report. The
financial statements have been prepared in conformity with generally
accepted accounting principles and include amounts that are based on
management's informed judgments and estimates.
The General Partner maintains a system of internal accounting controls
designed to provide reasonable assurance at reasonable costs that assets
are safeguarded against loss or unauthorized use, and that transactions are
executed in accordance with management's authorization and recorded and
summarized properly. The system is tested and evaluated on a regular basis
by the General Partner's internal auditors. In accordance with generally
accepted auditing standards, the Partnership's independent public
accountants have developed an overall understanding of our accounting and
financial controls and have conducted other tests as they consider
necessary to support their opinion on the financial statements.
The Board of Directors of the General Partner, through its Audit
Committee composed solely of non-employee directors, is responsible for
overseeing the integrity and reliability of the Partnership's accounting
and financial reporting practices and the effectiveness of its system of
internal controls. The independent public accountants and internal
auditors meet regularly with, and have access to, this committee, with and
without management present, to discuss the results of their audit work.
Rene L. Latiolais Charles W. Goodyear
President and Chief Executive Officer Senior Vice President and
Chief Financial Officer
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE PARTNERS OF FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP:
We have audited the accompanying balance sheets of Freeport-McMoRan
Resource Partners, Limited Partnership (the Partnership), a Delaware
Limited Partnership, as of December 31, 1993 and 1992, and the related
statements of operations, cash flow and changes in partners' capital for
each of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the General Partner's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial statements
of IMC-Agrico Company (the Joint Venture). The Partnership's share of the
Joint Venture constitutes 64 percent of assets and 34 percent of revenues
of the Partnership's totals as of December 31, 1993 and the year then
ended, respectively. Those statements were audited by other auditors whose
report has been furnished to us and our opinion, insofar as it relates to
the amounts included for the Partnership's interest in the Joint Venture,
is based solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
and the report of other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audits and the report of other auditors,
the financial statements referred to above present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1993
and 1992 and the results of its operations and its cash flow for each of
the three years in the period ended December 31, 1993 in conformity with
generally accepted accounting principles.
As discussed in Notes 6 and 1 to the financial statements, effective
January 1, 1991, the Partnership changed its method of accounting for
postretirement benefits other than pensions and effective January 1, 1993,
changed its method of accounting for periodic scheduled maintenance costs,
deferred charges, and costs of management information systems.
/s/ Arthur Andersen & Co.
New Orleans, Louisiana,
January 25, 1994
FREEPORT-McMoRan RESOURCES PARTNERS, LIMITED PARTNERSHIP
FINANCIAL AND OPERATING HIGHLIGHTS
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------------------------------
1993 1992 1991 1990 1989
----------- ---------- ---------- ---------- ----------
(In Thousands, Except Per Unit Amounts)
<S> <C> <C> <C> <C> <C>
Financial
Revenues $ 669,160 $ 877,058 $ 885,209 $ 850,651 $1,156,281
Operating income
(loss) (218,418)a 20,743 67,196 227,383d 131,583
Net income
(loss) (246,111)a,b 20,211 15,046c 243,647d 133,583
Net income (loss)
per unit (2.37)a,b .20 .18c 2.95d 1.65
Earnings by sources:e
Agricultural
minerals (55,889) 17,993 78,926 64,905 123,153
Oil (1,545) 4,644 (613) -- --
Uranium royalties
and fees -- -- 18,452 12,898 16,965
Geothermal -- -- -- 10,819 24,249
Distributions per
publicly
held unit 2.40 2.40 2.40 2.40 3.03
Average units
outstanding 103,698 101,449 83,630 82,556 81,041
At December 31:
Property, plant
and equipment,
net 970,960 1,074,332 1,009,517 683,303 860,455
Total assets 1,296,873 1,493,507 1,443,114 1,119,322 1,212,883
Long-term debt 488,102 356,563 542,766 120,817 327,070
Partners'
capital 492,404 859,695 560,160 722,815 658,523
Operating
Sales
Phosphate fertilizers
(short tons) f
Diammonium
phosphate 2,303,200 2,760,000 2,841,000 2,568,000 2,563,000
Monoammonium
phosphate
Granular 423,300 509,000 476,000 438,000 359,000
Powdered 55,400 -- -- -- --
Granular triple
superphosphate 564,700 715,000 710,000 717,000 680,000
Phosphate rock
(short tons)f 3,840,300 3,440,500 2,247,000 1,455,400 1,571,900
Sulphur (long
tons)g 1,973,200 2,346,100 2,528,200 2,491,000 2,557,400
Oil and condensate
(barrels) 3,443,000 4,884,000 350,800 -- --
<FN>
a. Includes charges totaling $173.6 million ($1.67 per unit) related to
restructuring the administrative organization at Freeport-McMoRan Inc.,
the general partner of FRP, reductions in the book carrying value of
certain assets to estimated recoverable amounts, and adjustments to
general and administrative expenses and production and delivery costs as
discussed in Management's Discussion and Analysis, net of a gain on the
sale of certain previously mined phosphate rock acreage.
b. Includes a $23.7 million charge ($.23 per unit) for the cumulative
effect of the changes in accounting principle as discussed in Note 1 to
the financial statements.
c. Includes a $17.7 million ($.21 per unit) insurance settlement gain from
hull damage sustained by one of FRP's sulphur tankers and a $96.8
million charge ($1.16 per unit) for the cumulative effect of the change
in accounting for postretirement benefits other than pensions.
d. Includes a $162.5 million gain ($1.97 per unit) from the sale and
restructuring of assets.
e. Excludes the items discussed in Notes A through D.
f. Beginning July 1, 1993, reflects FRP's 46.5% share of the assets of
IMC-Agrico Company during the year ended June 30, 1994. FRP is entitled
to 58.6% of the cash flow generated by IMC-Agrico Company during such
period.
g. Includes 1,138,800 tons, 1,654,300 tons, 1,612,400 tons, 1,564,000
tons, and 1,539,000 tons for 1993-1989, respectively, which represent
internal consumption and Main Pass start-up sales that are not included
in sales for accounting purposes.
</TABLE>
FRP UNITS
Our units trade on the New York Stock Exchange (NYSE) under the symbol
"FRP". The FRP unit price is reported daily in the financial press under
"FMRP" in most listings of NYSE securities. At year-end 1993, the number
of holders of record of the partnership's units was 19,000. Under federal
law, ownership of FRP units is limited to "United States citizens." A
United States citizen is defined as a person who is eligible to own
interests in federal mineral leases, which generally includes (i) U.S.
citizens, (ii) domestic entities owned by U.S. citizens, and (iii) domestic
corporations owned by U.S. citizens and/or certain foreign persons. Unit
price ranges on the NYSE composite tape during 1993 and 1992:
1993 1992
HIGH LOW HIGH LOW
FIRST QUARTER $20.63 $16.75 $26.88 $22.13
SECOND QUARTER 18.63 16.88 23.50 21.63
THIRD QUARTER 20.50 15.88 23.25 19.75
FOURTH QUARTER 21.00 15.88 22.50 17.38
CASH DISTRIBUTIONS
Cash distributions declared and paid to public unitholders during the past
12 months totaled $2.40 per unit. If, in any quarter through December 31,
1996, FRP's unitholders receive cash distributions of less than $0.60 per
publicly held unit, public unitholders are entitled to receive in
subsequent quarters any prior quarter's shortfall below $0.60 per publicly
held unit before any cash distributions may be made to holders of general
partnership interests. The total unpaid distribution due the general
partner is currently $239.2 million. Cash distributions of $0.60 per
publicly held unit were declared for each of the quarterly periods of 1993
and 1992 as shown below:
1993
RECORD PAYMENT
DATE DATE
FIRST QUARTER APR. 30, 1993 MAY 15, 1993
SECOND QUARTER JUL. 30, 1993 AUG. 14, 1993
THIRD QUARTER OCT. 29, 1993 NOV. 15, 1993
FOURTH QUARTER JAN. 31, 1994 FEB. 15, 1994
1992
RECORD PAYMENT
DATE DATE
FIRST QUARTER APR. 30, 1992 MAY 15, 1992
SECOND QUARTER JUL. 31, 1992 AUG. 14, 1992
THIRD QUARTER OCT. 30, 1992 NOV. 14, 1992
FOURTH QUARTER JAN. 29, 1993 FEB. 15, 1993
Cash distributions in 1993 were a return of capital for federal income tax
purposes and will generally not be taxed. In March unitholders will
receive individualized tax information for the previous year from the
partnership. For additional information, please contact the Investor
Relations Department.
FRP has announced that beginning with the cash distribution for the fourth
quarter of 1993 (scheduled for payment February 15, 1994), it no longer
intends to supplement distributable cash with borrowings. FRP's ability to
continue to distribute cash to its public unitholders is dependent on the
cash distributions received from IMC-Agrico Company, which will primarily
be determined by prices and sales volumes of its commodities and cost
reductions achieved by its combined operations, and the future cash flow of
FRP's sulphur and oil operations. As a result, future FRP distributions
will be impacted by the cyclical nature of its fertilizer business.
Exhibit 18.1
March 25, 1994
Freeport-McMoRan Resource Partners, Limited Partnership
1615 Poydras Street
New Orleans, LA 70112
RE: FORM 10-K REPORT FOR THE YEAR ENDED DECEMBER 31, 1993
-----------------------------------------------------
This letter is written to meet the requirements of Regulation S-K calling
for a letter from a registrant's independent accountants whenever there has
been a change in accounting principle or practice.
We have been informed that, as of January 1, 1993, Freeport-McMoRan
Resource Partners, Limited Partnership (FRP) changed its methods of
accounting for the following items:
1. TURNAROUNDS - the accounting for maintenance turnarounds was changed
from the deferral method to the direct expense method. Previously, FRP
deferred costs related to periodic scheduled maintenance (turnarounds)
when incurred and amortized them on a straight-line basis, generally
over six months to two years until the next scheduled turnaround.
According to the management of FRP, this change was made to conform
FRP's policy with that which is followed by IMC-Agrico Company, a joint
venture to which substantially all of FRP's phosphate fertilizer
production assets were contributed on July 1, 1993.
2. DEFERRED CHARGES - the accounting for deferred charges was changed to
provide for deferral of only those costs that directly relate to the
acquisition, construction and development of assets and to the issuance
of debt and related instruments. Previously, certain other costs which
benefitted future periods were deferred and amortized over the period
benefitted. According to FRP management, they believe this change
provides a better measure of operating results. In addition, the
administrative costs of accounting for assets will be reduced by not
deferring any relatively insignificant expenditures that do not have a
material effect on measuring periodic net income.
3. MANAGEMENT INFORMATION SYSTEMS (MIS) COSTS - Costs of MIS equipment
and software that have a material impact on periodic measurement of net
income are capitalized and amortized over their estimated productive
lives. Other MIS costs, including equipment and purchased software
that involve relatively immaterial amounts (currently individual
expenditures of less than $500,000) and short estimated productive
lives (currently less than three years) are charged to expense when
incurred. Previously, most expenditures for MIS equipment and
purchased software were capitalized. The accounting for MIS costs was
changed to recognize the rapid rate of change in MIS, which results in
short productive lives of equipment and software and a need for
continuing investments. Generally within a two-to-three year period,
if such hardware has not been replaced, significant upgrades will have
been required. Within two years, maintenance costs on existing
equipment often equals or exceeds replacement cost. Software is
subject to constant modification to meet the needs of the changing
hardware environment, as well as the changing business environment.
Reasonable business judgement is required in determining appropriate
application of accounting principles, including judgement regarding the
cost and the materiality of the impact of accounting precision.
A complete coordinated set of financial and reporting standards for
determining the preferability of accounting principles among acceptable
alternative principles has not been established by the accounting
profession for the items referred to above. Thus, we cannot make an
objective determination of whether the changes in accounting described
in the preceding paragraph are to preferable methods. However, we have
reviewed the pertinent factors, including those related to financial
reporting, in these particular cases on a subjective basis, and our
opinion stated below is based on our determination made in this manner.
We are of the opinion that FRP's changes in methods of accounting are
to acceptable alternative methods of accounting, which, based upon the
reasons stated above for the respective changes (including the costs
and benefits of alternative principles and the related materiality of
the application thereof) and our discussions with you, are also
preferable under the circumstances in these particular cases. In
arriving at this opinion, we have relied on the business judgement and
business planning of your management.
Very truly yours,
/s/ Arthur Andersen & Co.
------------------------
Arthur Andersen & Co.
Exhibit 21.1
List of Subsidiaries of
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
Where Name Under Which
Entity Organized It Does Business
------ --------- ----------------
IMC-Agrico Company Delaware Same
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our reports included herein or incorporated
by reference in this Form 10-K, into Freeport-McMoRan Resource Partners,
Limited Partnership's previously filed Registration Statement on Form S-3
(File No. 33-37441).
Very truly yours,
/s/ Arthur Andersen & Co.
------------------------
Arthur Andersen & Co.
New Orleans, Louisiana,
March 25, 1994
Exhibit 24.1
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Robert W. Bruce III
Robert W. Bruce III
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Thomas B. Coleman
Thomas B. Coleman
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ William H. Cunningham
William H. Cunningham
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Robert A. Day
Robert A. Day
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ William B. Harrison, Jr.
William B. Harrison, Jr.
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Henry A. Kissinger
Henry A. Kissinger
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Bobby Lee Lackey
Bobby Lee Lackey
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Gabrielle K. McDonald
Gabrielle K. McDonald
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ W. K. McWilliams, Jr.
W. K. McWilliams, Jr.
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ George Putnam
George Putnam
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ B. M. Rankin, Jr.
B. M. Rankin, Jr.
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Benno C. Schmidt
Benno C. Schmidt
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ J. Taylor Wharton
J. Taylor Wharton
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Ward W. Woods, Jr.
Ward W. Woods, Jr.
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT, RENE L. LATIOLAIS, and CHARLES W. GOODYEAR, and
each of them acting individually, his true and lawful
attorney-in-fact, with power to act without the others and
with full power of substitution, to execute, deliver and
file, for and on behalf of him, in his name and in his
capacity or capacities as aforesaid, an Annual Report of
FRP on Form 10-K for the year ended December 31, 1993, and
any amendment or amendments thereto and any other document
in support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Nancy D. Bonner
Nancy D. Bonner
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT and CHARLES W. GOODYEAR, and each of them acting
individually, his true and lawful attorney-in-fact, with
power to act without the others and with full power of
substitution, to execute, deliver and file, for and on
behalf of him, in his name and in his capacity or
capacities as aforesaid, an Annual Report of FRP on Form
10-K for the year ended December 31, 1993, and any
amendment or amendments thereto and any other document in
support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Rene L. Latiolais
Rene L. Latiolais
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Inc., a Delaware
corporation and Administrative Managing General Partner of
Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), does hereby make, constitute and appoint JAMES R.
MOFFETT and RENE L. LATIOLAIS, and each of them acting
individually, his true and lawful attorney-in-fact, with
power to act without the others and with full power of
substitution, to execute, deliver and file, for and on
behalf of him, in his name and in his capacity or
capacities as aforesaid, an Annual Report of FRP on Form
10-K for the year ended December 31, 1993, and any
amendment or amendments thereto and any other document in
support thereof or supplemental thereto, and the
undersigned hereby grants to said attorneys, and each of
them, full power and authority to do and perform each and
every act and thing whatsoever that said attorney or
attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might
or could do personally or in the capacity or capacities as
aforesaid, hereby ratifying and confirming all acts and
things which said attorney or attorneys may do or cause to
be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Charles W. Goodyear
Charles W. Goodyear
