Exhibit 10.6
EXECUTION COPY
FMPO GUARANTEE AGREEMENT dated as of
December 15, 1997 (this "Guarantee"), by FM
Properties Inc., a Delaware corporation
("FMPO"), for the benefit of the lender
party to the Consolidated Credit Agreement
(as defined below) from time to time (the
"Lenders").
WHEREAS, Freeport-McMoRan Inc., a Delaware
corporation ("FTX"), intends to consummate a merger, whereby
FTX shall be merged with and into IMC Global Inc., a
Delaware corporation ("IGL"), by the end of 1997 (the
"Merger"), and as a condition thereof FTX has, with th
consent of the Lenders, transferred to FMPO, and FMPO has
assumed, FTX's interest as managing general partner of FM
Properties Operating Co., a Delaware general partnership
("FMPOC").
WHEREAS, in connection therewith, (i) FMPOC, as
the borrower under the Amended and Restated Credit Agreement
dated as of December 20, 1996, among FMPOC, FTX, the banks
party thereto and The Chase Manhattan Bank ("Chase")(the
"FMPOC Revolving Facility"), and as the borrower under the
Second Amended and Restated Note Agreement, as amended,
dated as of June 30, 1995, among FMPOC, FTX, Hibernia
National Bank and Chase (the "FMPOC Term Loan Facility")
and (ii) Circle C Land Corp., a Texas corporation ("Circle
C"), as the borrower under the Amended and Restated Credit
Agreement dated as of December 20, 1996, between Circle C
and Texas Commerce Bank National Association (the "Circle
Loan Facility", and together with the FMPOC Revolving
Facility and the FMPOC Term Loan Facility, the "Existing
Credits"), desire to amend and restate the terms and
provisions of the Existing Credits and consolidate such
terms and provisions into the Amended, Restated an
Consolidated Credit Agreement dated as of the date hereof,
among FMPOC, Circle C, FMPO, the financial institutions
listed on the signature pages thereof and Chase, as
administrative agent and documentary agent thereunder (as
amended or modified and in effect from time to time, the
"Consolidated Credit Agreement").
WHEREAS, it is the intent of the parties to the
Consolidated Credit Agreement that the Consolidated Credit
Agreement (i) shall evidence the Borrower's Debt under the
Existing Credits, (ii) has been entered into as an
amendment, restatement and consolidation of the obligations
of the Borrowers under the Existing Credits and (iii) is in
no way intended to constitute a novation of any of the
Borrower's Debt which was evidenced by any of the Existing
Credits.
WHEREAS, it is a condition to the execution of the
Consolidated Credit Agreement that FMPO execute this
Guarantee.
NOW THEREFORE, in consideration of the premises
and of the mutual covenants herein contained, FMPO hereby
agrees as follows:
ARTICLE I
GUARANTEE
SECTION 1.01. Definitions. (a) The following
terms, as used herein, have the following meanings:
"Borrowers" means FMPOC and Circle C.
"Consolidated Credit Agreement" has the meaning
assigned to such term in the preamble to this Guarantee.
Coverage Period" has the meaning assigned to such
term in Section 1.04.
"FTX Credit Agreement" means the Credit Agreement
dated as of November 14, 1996, among FTX, Freeport-McMoRan
Resource Partners, Limited Partnership, a Delaware limited
partnership, the banks party thereto and Chase, as
administrative agent, collateral agent and documentary
agent. The FTX Credit Agreement shall automatically mean
such agreement in the form modified or amended from time to
time, without the necessity of any further action or
approval pursuant to this Guarantee.
"Loan" means each Loan made under the Consolidated
Credit Agreement.
"Obligations" means the payment of principal an
interest on the Loans, the reimbursement in full of any
amounts drawn under a Letter of Credit, and the posting of
cash collateral in respect of Letters of Credit, and the
payment of all Fees, expenses and other amounts (including,
without limitation, indemnities) payable under the Loan
Documents.
(b) Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to
such terms in the Consolidated Credit Agreement.
(c) Unless otherwise stated, Section and Article
references made herein are to Sections and Articles, as the
case may be, of this Guarantee. Except as otherwise
expressly provided herein, any reference in this Guarantee
to any Loan Document shall mean such document as amended,
restated, supplemented or otherwise modified from time to
time.
SECTION 1.02. The Guarantee. FMPO hereby
unconditionally and irrevocably guarantees as a primary
obligor and not merely as a surety the due and punctual
payment and performance when and as due (whether at stated
maturity, by notice of prepayment, upon acceleration or
otherwise) of the Obligations. FMPO agrees that it shall
pay on demand any of the Obligations for which it is liable
pursuant to this Guarantee which has remained unpaid by the
relevant Borrower for five Business Days after such amount
is due or demanded from the relevant Borrower; provided that
if an event referred to in Section 7.01(h) or (i) of the
Consolidated Credit Agreement has occurred with respect to a
Borrower, such amounts shall be payable on demand by FMPO
without the necessity of any demand on such Borrower. The
obligations of FMPO under this Guarantee shall be a
guarantee of payment and not of collection. Upon payment by
FMPO of any sums to a Lender or an Agent as provided above
in this Guarantee, FMPO shall be subrogated to the rights of
such Lender or Agent, as applicable, against such Borrower
with respect to such payment; provided, that all rights of
FMPO against a Borrower arising as a result thereof by way
of right of subrogation or otherwise shall in all respect
be subordinated and junior in right of payment to the prior
payment in full of all the Obligations to the Lenders and
the Agents and shall not be exercised by FMPO prior to
payment in full of all Obligations and termination of the
Commitments. If any amount shall be paid to FMPO on account
of any amount paid by FMPO pursuant to this Guarantee or
otherwise at any time when all the Obligations shall not be
paid in full, such amount shall be held in trust by FMPO for
the benefit of Agents and the Lenders and shall forthwith be
paid to the Administrative Agent to be credited and applied
to the Obligations, whether matured or unmatured. At such
time as all Obligations owing to each Lender have been paid
in full and its Commitment terminated, each Lender shall, in
a reasonable manner, assign (subject to the continued
effectiveness and the reinstatement provided for above) the
amount of the Obligations owed to it and paid by FMPO
pursuant to this Guarantee to FMPO, such assignment to be
pro tanto to the extent to which the Obligations in question
were discharged by FMPO, or make such other disposition
thereof as FMPO shall reasonably direct (all without any
representation or warranty by, or any recourse to, such
Lender).
SECTION 1.03. Guarantee Unconditional. The
obligations of FMPO hereunder shall be unconditional and
absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise
affected by:
(i) any rescission, extension, renewal,
settlement, compromise, waiver or release in respect of
any obligation of either Borrower under the
Consolidated Credit Agreement, by operation of law or
otherwise;
(ii) any modification or amendment of or supplement
to the Consolidated Credit Agreement;
(iii) any guarantee or any release, impairment,
non-perfection or invalidity of any direct or indirect
security for any obligation of either Borrower under
the Consolidated Credit Agreement;
(iv) any change in the corporate existence,
structure or ownership of either Borrower, or any
insolvency, bankruptcy, reorganization or other similar
proceeding affecting either Borrower or their
respective assets, or any resulting release or
discharge of any obligation of either Borrower
contained in the Consolidated Credit Agreement;
(v) the existence of any claim, set-off or other
rights that FMPO may have at any time against either
Borrower, any Agent, any Lender or any other
corporation or person, whether in connection herewith
or any unrelated transactions; provided that, subject
to any subordination agreements relating to any such
claims, nothing herein shall prevent the assertion of
any such claim by separate suit or compulsory
counterclaim;
(vi) any invalidity or unenforceability relating to
or against either Borrower for any reason of the
Consolidated Credit Agreement, or any provision of
applicable law or regulation purporting to prohibit the
payment by either Borrower of the Obligations or any
other amount payable by either Borrower under the
Consolidated Credit Agreement;
(vii) any other act or omission to act or delay of
any kind by either Borrower, any beneficiary of this
Guarantee, or any other corporation or person, or any
other circumstance whatsoever, that might, but for the
provisions of this paragraph, constitute a legal or
equitable discharge of or defense to FMPO's obligations
hereunder or to the Obligations;
(viii) any failure of any beneficiary of this
Guarantee to assert any claim or demand or to enforce
any right or remedy against either Borrower under the
provisions of the Consolidated Credit Agreement, any
other security document, any intercreditor document or
any other loan document; or
(ix) any failure of any beneficiary of this
Guarantee to exercise any right or remedy against any
other guarantor (including any subsidiary) of the
Obligations.
SECTION 1.04. Discharge only upon Payment in
Full; Reinstatement in Certain Circumstances. FMPO'
obligations hereunder shall remain in full force and effect
until the earlier of the date on which (x) the commitments
under the Consolidated Credit Agreement shall have
terminated and the Obligations shall have been indefeasibly
paid in full or (y) indefeasible payment has been made
hereunder. If at any time any Obligation is rescinded or
must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of either Borrower or
otherwise, FMPO's obligations hereunder with respect to such
payment shall be reinstated as though such payment had been
due but not made at the time initially paid.
SECTION 1.05. Waiver by FMPO. Except to the
extent set forth in Section 1.02, FMPO irrevocably waives
acceptance hereof, presentment, demand, protest, notice of
intent to accelerate, notice of acceleration and any notice
not provided for herein or in the Consolidated Credit
Agreement, as well as any requirement that at any time any
action be taken by any beneficiary of this Guarantee,
corporation or person against either Borrower, any other
guarantor or any other entity or person.
SECTION 1.06. Stay of Acceleration. If
acceleration of the time for payment of any Obligation or
any other amount payable by either Borrower under the
Consolidated Credit Agreement is stayed upon the insolvency,
or reorganization of either Borrower, all such amounts
otherwise subject to acceleration under the terms of the
Consolidated Credit Agreement shall nonetheless be payable
by FMPO hereunder as if no such stay was in effect.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties. As
of the Effective Date and each other date upon which such
representations and warranties are required to be made or
deemed made pursuant to Section 6.01(i) of the Consolidated
Credit Agreement, and for so long as this Guarantee shall
remain in effect, FMPO shall be deemed to have made to each
Lender, Issuing Bank and Agent each of the representations
and warranties of FMPO, as a Restricted Entity, contained in
Section 3.01 of the Consolidated Credit Agreement, as may be
in effect from time to time, which representations and
warranties, along with the definitions of the terms utilized
therein and any related provisions, as the same may be
amended, restated or otherwise modified from time to time,
are hereby incorporated by reference herein and shall apply
with the same force and effect as though set forth herein in
their entirety.
ARTICLE III
COVENANTS
SECTION 3.01. Affirmative Covenants of FMPO.
From and after the Effective Date and so long as this
Guarantee shall remain in effect and until the Commitments
have been terminated and the principal of and interest on
each Loan, all Fees and all other expenses or amounts
payable under any Loan Document shall have been paid in full
and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in
full, unless the Required Lenders otherwise provide prior
written consent, FMPO shall at all times be in full
compliance with the covenants and agreements of FMPO, as a
Restricted Entity, contained in Section 5.01 of the
Consolidated Credit Agreement, as may be in effect from time
to time, which covenants and agreements, as the same may be
amended, restated or otherwise modified from time to time,
are hereby incorporated by reference herein and shall apply
with the same force and effect as though set forth herein in
their entirety.
SECTION 3.02. Negative Covenants of FMPO. From
and after the Effective Date and so long as this Agreement
shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any
Loan Document have been paid in full, and all Letters of
Credit have been canceled or have expired and all amounts
drawn thereunder have been reimbursed in full, without the
prior written consent of the Required Lenders, FMPO shall
not at any time fail to be in full compliance with the
covenants and agreements of FMPO, as a Restricted Entity,
contained in Section 5.02 of the Consolidated Credit
Agreement, as may be in effect from time to time, which
covenants and agreements, as the same may be amended,
restated or otherwise modified from time to time, are hereby
incorporated by reference herein and shall apply with the
same force and effect as though set forth herein in their
entirety.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Successors and Assigns. Subject to
Section 1.04, this Guarantee shall be binding upon and inure
to the benefit of the Borrowers, the Lenders, the Issuing
Banks, the Agents and their respective successors and
assigns, except that FMPO may not assign, delegate or
transfer any of its rights or obligations hereunder or any
interest herein (and any such attempted assignment,
delegation or transfer shall be void).
SECTION 4.02. Waivers; Amendments. (a) No
failure or delay of any Lender, Issuing Bank or Agent in
exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and
remedies of the Lenders, the Issuing Banks and the Agents
hereunder and under the other documents and agreements
entered into in connection herewith are cumulative and not
exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of this
Guarantee or consent to any departure by FMPO 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 FMPO in any case shall entitle FMPO to any other
or further notice or demand in similar or other
circumstances.
(b) This Agreement (including any provision
hereof) may not be waived, amended or modified except
pursuant to an agreement or agreements in writing entered
into between FMPO and the Administrative Agent, with the
prior written consent of the Required Lenders.
SECTION 4.03. Survival of Guarantee. All
covenants, agreements, representations and warranties made
by FMPO herein and in the certificates or other instruments
prepared or delivered in connection with this Guarantee or
any other Loan Document shall be considered to have been
relied upon by the Lenders, the Issuing Banks and the Agents
and shall survive the making by the Lenders of the Loans or
the issuing of Letters of Credit by the Issuing Banks
regardless of any investigation made by the Lenders or
Issuing Banks, as applicable, or by their respective
representatives or agents, and shall continue in full force
and effect as long as the principal of or any accrued
interest on any Loan, L/C Disbursement, Fee or other fee or
amount payable under the Loan Documents is outstanding an
unpaid and so long as the Commitments or any outstanding
Letters of Credit issued under the Consolidated Credit
Agreement have not been terminated or have not expired.
SECTION 4.04. Governing Law; Submission to
Jurisdiction. This Guarantee shall be governed by and
construed in accordance with the laws of the State of New
York. FMPO hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern
District of New York and of any New York State court sitting
in New York City for purposes of all legal proceedings
arising out of or relating to this Guarantee. FMPO
irrevocably waives, to the fullest extent permitted by law,
any objection that it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.um.
SECTION 4.05. Waiver of Jury Trial. FMPO hereby
irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or relating to this
Guarantee.
SECTION 4.06. Notices. All notices, requests any
other communications shall be in writing (including
facsimile transmission or similar writing) and shall be
mailed or sent by the sending party to: (i) in the case of
FMPO, at its address set forth in Section 10.01 of the
Consolidated Credit Agreement or as otherwise notified to
the beneficiaries of this Guarantee or (ii) in the case of
any other party, at its address set forth in the Loan
Document
IN WITNESS WHEREOF, FMPO has caused this Guarantee
to be duly executed by its officer thereunto duly
authorized, as of the day and year first above written.
FM PROPERTIES INC.,
by /s/ Xxxxxx X. Xxxxx
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Name:Xxxxxx X. Xxxxx
Title: Treasurer
