FREEPORT-McMoRan COPPER & GOLD INC.
(a Delaware corporation)
FCX INVESTMENT LTD.
(a Cayman Islands exempted limited liability company)
8 1/4% Convertible Senior Notes due 2006
PURCHASE AGREEMENT
Dated: August 1, 2001
TABLE OF CONTENTS
Page
Section 1. Representations and Warranties by the Issuers 3
(a) Representations and Warranties 3
(b) Officer's Certificates 12
Section 2. Sale and Delivery to Initial Purchaser; Closing 12
(a) Securities 12
(b) Option Securities 12
(c) Payment 13
(d) Denominations; Registration 13
Section 3. Covenants of the Issuers 13
(a) Offering Memorandum 13
(b) Notice and Effect of Material Events 14
(c) Amendment to Offering Memorandum and Supplements14
(d) Qualification of Securities for Offer and Sale 14
(e) Rating of Securities 14
(f) DTC 15
(g) Use of Proceeds 15
(h) Restriction on Sale of Securities 15
(i) Restriction on Sale of Common Stock 15
(j) PORTAL Designation 15
(k) Reporting Requirements 15
(l) Co-Obligor 15
Section 4. Payment of Expenses 16
(a) Expenses 16
(b) Termination of Agreement 16
Section 5. Conditions of Initial Purchaser's Obligations 16
(a) Opinion of Counsel for Issuers 16
(b) Opinion of Counsel for Initial Purchaser 16
(c) Officers' Certificate 17
(d) Accountants' Comfort Letter 17
(e) Bring-down Comfort Letter 17
(f) No Downgrading 17
(g) PORTAL 18
(h) Lock-Up Agreements 18
(i) Registration Rights Agreement 18
(j) Indenture and Pledge Agreement 18
(k) Pledge of Securities 18
(l) Opinion of Accountants as to Sufficiency of
Initial Pledged Securities 18
(m) Refinancing Transactions 18
(n) Conditions to Purchase of Option Securities 18
(o) Additional Documents 20
(p) Termination of Agreement 20
Section 6. Subsequent Offers and Resales of the Securities 20
(a) Offer and Sale Procedures 20
(b) Covenants of the Issuers 21
(c) Qualified Institutional Buyer 22
Section 7. Indemnification 22
(a) Indemnification of Initial Purchaser 22
(b) Indemnification of Issuers 23
(c) Actions against Parties; Notification 23
(d) Settlement without Consent if Failure
to Reimburse 24
(e) Engagement Letter Superseded 24
Section 8. Contribution 24
Section 9. Representations, Warranties and Agreements
to Survive Delivery 25
Section 10. Termination of Agreement 25
(a) Termination; General 25
(b) Liabilities 26
Section 11. Notices 26
Section 12. Parties 26
Section 13. GOVERNING LAW AND TIME 26
Section 14. Effect of Headings 27
SCHEDULES
Schedule A - Pricing Information
Schedule B - List of Designated Subsidiaries
Schedule C - List of Persons Subject to Lock-Up
EXHIBITS
Exhibit A - Form of Opinion of Issuers' Counsel
Exhibit B - Form of Lock-Up Agreement
FREEPORT-McMoRan COPPER & GOLD INC.
(a Delaware corporation)
FCX INVESTMENT LTD.
(a Cayman Islands exempted limited liability company)
$525,000,000
8 1/4% Convertible Senior Notes due 2006
PURCHASE AGREEMENT
August 1, 2001
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Freeport-McMoRan Copper & Gold Inc., a Delaware corporation
(the "Company"), and FCX Investment Ltd., a Cayman Islands
exempted limited liability company (the "Co-Obligor," and
together with the Company, the "Issuers," and each, an "Issuer"),
confirm their agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx" or the
"Initial Purchaser"), with respect to the issue and sale by the
Issuers and the purchase by the Initial Purchaser of $525,000,000
aggregate principal amount of the Issuers' 8 1/4% Convertible Senior
Notes due 2006 (the "Notes"), and with respect to the grant by
the Issuers to the Initial Purchaser of the option described in
Section 2(b) hereof to purchase all or any part of an additional
$78,750,000 principal amount of Notes to cover overallotments, if
any. The aforesaid $525,000,000 principal amount of Notes (the
"Initial Securities") to be purchased by the Initial Purchaser
and all or any part of the $78,750,000 principal amount of Notes
subject to the option described in Section 2(b) hereof (the
"Option Securities") are hereinafter called, collectively, the
"Securities". The Securities are to be issued pursuant to an
indenture to be dated as of August 7, 2001 (the "Indenture")
between the Issuers and The Bank of New York, as trustee (the
"Trustee"). Securities issued in book-entry form will be issued
to Cede & Co. as nominee of The Depository Trust Company ("DTC")
pursuant to a letter agreement, to be dated as of the Closing
Time (as defined in Section 2(c)), among the Issuers, the Trustee
and DTC.
The Securities are convertible into shares of, at the option
of the holders of the Securities, Class A Common Stock, par value
$.10 per share (the "Class A Common Stock"), or Class B Common
Stock, par value $.10 per share, of the Company (the "Class B
Common Stock," and together with the Class A Common Stock, the
SCommon Stock") in accordance with the terms of the Securities
and the Indenture, at the initial conversion price specified in
Schedule A hereto.
The Initial Purchaser and its direct and indirect
transferees will be entitled to the benefits of a Registration
Rights Agreement (the "Registration Rights Agreement") dated as
of the Closing Time (as defined in Section 2(c)) between the
Issuers and the Initial Purchaser. In addition, the Co-Obligor
will enter into a Collateral Pledge and Security Agreement (the
"Pledge Agreement") dated as of the Closing Time (as defined in
Section 2(c)) among the Co-Obligor, the Trustee and The Bank of
New York, as Collateral Agent (the "Collateral Agent") for the
benefit of the holders of the Securities.
The Issuers understand that the Initial Purchaser proposes
to make an offering of the Securities on the terms and in the
manner set forth herein and agree that the Initial Purchaser may
resell, subject to the conditions set forth herein, all or a
portion of the Securities to purchasers ("Subsequent Purchasers")
at any time after this Agreement has been executed and delivered.
The Securities are to be offered and sold through the Initial
Purchaser without being registered under the Securities Act of
1933, as amended (the "1933 Act"), in reliance upon exemptions
therefrom. Pursuant to the terms of the Securities and the
Indenture, investors that acquire Securities may only resell or
otherwise transfer such Securities if such Securities are
hereafter registered under the 1933 Act or if an exemption from
the registration requirements of the 1933 Act is available
(including the exemption afforded by Rule 144A ("Rule 144A") of
the rules and regulations promulgated under the 1933 Act by the
Securities and Exchange Commission (the "Commission")).
The Issuers have prepared and delivered to the Initial
Purchaser copies of a preliminary offering memorandum dated July
30, 2001 (the "Preliminary Offering Memorandum") and have
prepared and will deliver to the Initial Purchaser, on the date
hereof or the next succeeding day, copies of a final offering
memorandum dated August 1, 2001 (the "Final Offering
Memorandum"), each for use by the Initial Purchaser in connection
with its solicitation of purchases of, or offering of, the
Securities. "Offering Memorandum" means, with respect to any
date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum
or the Final Offering Memorandum, or any amendment or supplement
to either such document), including exhibits thereto and any
documents incorporated therein by reference, which has been
prepared and delivered by the Issuers to the Initial Purchaser in
connection with their solicitation of purchases of, or offering
of, the Securities.
All references in this Agreement to financial statements and
schedules and other information which are "contained," "included"
or "stated" in the Offering Memorandum (or other references of
like import) shall be deemed to mean and include all such
financial statements and schedules and other information that are
incorporated by reference in the Offering Memorandum; and all
references in this Agreement to amendments or supplements to the
Offering Memorandum shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934
(the "1934 Act") that is incorporated by reference in the
Offering Memorandum.
It is understood and agreed that as soon as practical after
the Closing Time, but in no event later than October 31, 2001,
the Company and PT Freeport Indonesia Company, an Indonesian
majority-owned subsidiary of the Company that is domesticated in
the State of Delaware ("PTFI"), will use their best efforts to
enter into (i) an amendment (the "FCX/PTFI Facility Amendment")
to the $450,000,000 senior revolving credit facility under the
Credit Agreement dated as of June 30, 1995, as amended, among the
Company, PTFI, Chase Manhattan Bank, as administrative agent,
security agent and documentary agent, First Trust of New York,
National Association, as trustee, and the banks listed therein
(as so amended, the "FCX/PTFI Facility") and (ii) an amendment
(the "PTFI Facility Amendment," and together with the FCX/PTFI
Facility Amendment, the "Facility Amendments") to the
$550,000,000 senior secured revolving credit facility under the
Credit Agreement dated as of October 27, 1989, as amended, among
the Company, PTFI, Chase Manhattan Bank, as administrative agent,
security agent and documentary agent, First Trust of New York,
National Association, as trustee, and the banks listed therein
(as so amended, the "PTFI Facility," and together with the
FCX/PTFI Facility, the "Facilities"), in each case on
substantially the terms described in the Offering Memorandum.
The foregoing transactions are collectively referred to herein as
the "Refinancing Transactions."
Section 1. Representations and Warranties by the Issuers.
(a) Representations and Warranties. Each of the Issuers,
jointly and severally, represents and warrants to the Initial
Purchaser as of the date hereof and as of the Closing Time
referred to in Section 2(c) hereof, and, if any Option Securities
are purchased, as of the relevant Date of Delivery referred to in
Section 2(b) hereof, and agrees with the Initial Purchaser, as
follows:
(i) Offering Memorandum. The Offering Memorandum does
not, and at the Closing Time (and, if any Option Securities
are purchased, at the relevant Date of Delivery) will not,
include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided that this
representation, warranty and agreement shall not apply to
statements in or omissions from the Offering Memorandum made
in reliance upon and in conformity with information
furnished to the Issuers in writing by the Initial Purchaser
expressly for use in the Offering Memorandum.
(ii) Incorporated Documents. The Offering Memorandum as
delivered from time to time shall incorporate by reference
the most recent Annual Report of the Company on Form 10-K
filed with the Commission and each Quarterly Report of the
Company on Form 10-Q and each Current Report of the Company
on Form 8-K filed with the Commission since the filing of
the end of the fiscal year to which such Annual Report
relates. The documents incorporated or deemed to be
incorporated by reference in the Offering Memorandum at the
time they were or hereafter are filed with the Commission
complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations"),
and, when read together with the other information in the
Offering Memorandum, at the time the Offering Memorandum was
issued and at the Closing Time (and, if any Option
Securities are purchased, at the relevant Date of Delivery),
did not and will not include an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading.
(iii) Independent Accountants. The accountants who
certified the financial statements and supporting schedules
included in the Offering Memorandum are independent public
accountants with respect to the Company and its subsidiaries
within the meaning of Regulation S-X under the 1933 Act.
(iv) Financial Statements. The financial statements,
together with the related schedules and notes, included in
the Offering Memorandum present fairly the financial
position of the Company and its consolidated subsidiaries at
the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on
a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Offering
Memorandum present fairly in accordance with GAAP the
information required to be stated therein. The selected
financial data and the summary financial information
included in the Offering Memorandum present fairly the
information shown therein and have been compiled on a basis
consistent with that of the audited financial statements
included in the Offering Memorandum.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the
Offering Memorandum, except as otherwise stated therein, (A)
there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"),
(B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect
to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or
distribution of any kind declared, paid or made by any
Issuer on any class of its capital stock.
(vi) Good Standing of the Issuers. The Company has been
duly organized and is validly existing as a corporation in
good standing under the laws of the State of Delaware and
has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in
the Offering Memorandum and to enter into and perform its
obligations under this Agreement; the Co-Obligor has been
duly incorporated and is validly existing as an exempted
limited liability company in good standing under the laws of
the Cayman Islands and has all corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum and to
enter into and perform its obligations under this Agreement;
and each of the Issuers is duly qualified as a foreign
corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) Good Standing of Designated Subsidiaries. Each
"significant subsidiary" of the Company (as such term is
defined in Rule 1-02 of Regulation S-X), each of which is
listed on Schedule B hereto (each a "Designated Subsidiary"
and, collectively, the "Designated Subsidiaries") has been
duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business
as described in the Offering Memorandum and is duly
qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Offering Memorandum,
all of the issued and outstanding capital stock of the Co-
Obligor and each Designated Subsidiary has been duly
authorized and validly issued, is fully paid and non-
assessable, and 50% or more of the issued and outstanding
capital stock of PTFI, PT Xxxx Eastern Minerals and FM
Services Company, and all of the issued and outstanding
capital stock of Atlantic Copper, S.A. ("Atlantic Copper"),
and the Co-Obligor is owned by the Company, directly or
through subsidiaries, and except for the capital stock of
Atlantic Copper, all such capital stock is owned by the
Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of the Designated
Subsidiaries was issued in violation of any preemptive or
similar rights of any securityholder of such Designated
Subsidiary; the other subsidiaries of the Company other than
Designated Subsidiaries, considered in the aggregate as a
single subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X; and
the Co-Obligor has no subsidiary.
(viii) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in
the Offering Memorandum in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements, employee benefit plans referred to
in the Offering Memorandum or pursuant to the exercise of
convertible securities or options referred to in the
Offering Memorandum). The shares of issued and outstanding
capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; none
of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by each Issuer.
(x) Authorization of the Indenture, the Pledge Agreement
and the Registration Rights Agreement. Each of the
Indenture, the Pledge Agreement and the Registration Rights
Agreement has been duly authorized by each Issuer and, when
executed and delivered by each Issuer and the other parties
thereto, will constitute a valid and binding agreement of
each Issuer, enforceable against each Issuer in accordance
with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law) and except as rights to
indemnification and contribution under the Registration
Rights Agreement may be limited under applicable law.
(xi) Authorization of the Securities. The Securities
have been duly authorized and, at the Closing Time, will
have been duly executed by each Issuer and, when
authenticated, issued and delivered in the manner provided
for in the Indenture and delivered against payment of the
purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of each Issuer,
enforceable against each Issuer in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers) reorganization,
moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement
thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the
Indenture, the Pledge Agreement and the Registration Rights
Agreement.
(xii) Description of the Securities, the Indenture, the
Pledge Agreement and the Registration Rights Agreement. The
Securities, the Indenture, the Pledge Agreement and the
Registration Rights Agreement will conform in all material
respects to the respective statements relating thereto
contained in the Offering Memorandum and will be in
substantially the respective forms last delivered to the
Initial Purchaser prior to the date of this Agreement.
(xiii) Authorization and Description of Common Stock. The
Common Stock conforms to all statements relating thereto
contained or incorporated by reference in the Offering
Memorandum and such description conforms to the rights set
forth in the instruments defining the same. Upon issuance
and delivery of the Securities in accordance with this
Agreement and the Indenture, the Securities will be
convertible at the option of the holder thereof for shares
of Common Stock in accordance with the terms of the
Securities and the Indenture; the shares of Common Stock
issuable upon conversion of the Securities have been duly
authorized and reserved for issuance upon such conversion by
all necessary corporate action and such shares, when issued
upon such conversion, will be validly issued and will be
fully paid and non-assessable; the shares of Common Stock
issuable at the Issuers' option upon repurchase of the
Securities at the option of the holder thereof upon a Change
of Control (as defined in the Indenture) will have been,
prior to the issuance thereof, duly authorized by all
necessary corporate action and such shares, if and when
issued in accordance with the terms of the Securities and
the Indenture, will be validly issued and will be fully paid
and non-assessable; no holder of such shares will be subject
to personal liability by reason of being such a holder; and
the issuance of such shares upon such conversion or
repurchase will not be subject to the preemptive or other
similar rights of any securityholder of the Company.
(xiv) Absence of Defaults and Conflicts. None of the
Issuers or any of their subsidiaries is in violation of its
charter, by-laws or other organizational documents or in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to
which any Issuer or any of its subsidiaries is a party or by
which or any of them may be bound, or to which any of the
property or assets of any Issuer or any of its subsidiaries
is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance
of this Agreement, the Indenture, the Pledge Agreement, the
Registration Rights Agreement and the Securities and any
other agreement or instrument entered into or issued or to
be entered into or issued by any Issuer in connection with
the transactions contemplated hereby or thereby or in the
Offering Memorandum and the consummation of the transactions
contemplated herein and in the Offering Memorandum
(including the issuance and sale of the Securities and the
use of the proceeds from the sale of the Securities as
described in the Offering Memorandum under the caption "Use
of Proceeds" and the issuance of the shares of Common Stock
issuable upon conversion of the Securities) and compliance
by any Issuer with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a
breach of, or default or a Repayment Event (as defined
below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of
any Issuer or any of its subsidiaries pursuant to, the
Agreements and Instruments except as disclosed in the
Offering Memorandum and except for such conflicts, breaches
or defaults or liens, charges or encumbrances that, singly
or in the aggregate, would not result in a Material Adverse
Effect, nor will such action result in any violation of the
provisions of the charter, by-laws or other organizational
documents of any Issuer or any of the Designated
Subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over any Issuer or any of the
Designated Subsidiaries or any of their assets, properties
or operations. As used herein, a "Repayment Event" means
any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of
such indebtedness by any Issuer or any of its subsidiaries.
(xv) Absence of Labor Dispute. No labor dispute with the
employees of the Issuers or any of their subsidiaries exists
or, to the knowledge of the Issuers, is imminent, and the
Issuers are not aware of any existing or imminent labor
disturbance by the employees of any of their or any of their
subsidiaries' principal suppliers, manufacturers, customers
or contractors, which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xvi) Absence of Proceedings. Except as disclosed in the
Offering Memorandum, there is no action, suit, proceeding,
inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Issuers, threatened,
against or affecting any Issuer or any of its subsidiaries
which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of
any Issuer or any of its subsidiaries or the consummation of
the transactions contemplated by this Agreement, the
Indenture, the Pledge Agreement, the Registration Rights
Agreement or the Securities or the performance by any Issuer
of its obligations hereunder and thereunder. The aggregate
of all pending legal or governmental proceedings to which
the any Issuer or any of its subsidiaries is a party or of
which any of their respective property or assets is the
subject which are not described in the Offering Memorandum,
including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a
Material Adverse Effect.
(xvii) Possession of Intellectual Property. The Issuers
and their subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and none of
the Issuers or any of their subsidiaries has received any
notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate
to protect the interest of the Issuers or any of their
subsidiaries therein, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding)
or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing
with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or
governmental authority or agency is necessary or required
for the performance by each Issuer of its obligations
hereunder, in connection with the offering, issuance or sale
of the Securities hereunder, the issuance of shares of
Common Stock upon conversion of the Securities or the
consummation of the transactions contemplated by this
Agreement or for the due execution, delivery or performance
of the Indenture, the Pledge Agreement, the Registration
Rights Agreement or the Securities by each Issuer or the
consummation of the transactions contemplated thereunder,
except such as have been already obtained and except such as
may be required by the Federal and state securities laws
with respect to the each Issuer's obligations under the
Registration Rights Agreement.
(xix) Possession of Licenses and Permits. The Issuers and
their subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the
Issuers and their subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or
in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be
in full force and effect would not have a Material Adverse
Effect; and none of the Issuers or any of their subsidiaries
has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses
which are not described in the Offering Memorandum and
which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xx) Title to Property. The Issuers and their
subsidiaries have good and marketable title to all real
property owned by the Issuers and their subsidiaries and
good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of
any kind except such as (a) are described in the Offering
Memorandum or (b) do not, singly or in the aggregate, result
in a Material Adverse Effect; and all of the leases and
subleases material to the business of the Issuers and their
subsidiaries, considered as one enterprise, and under which
the Issuers or any of their subsidiaries holds properties
described in the Offering Memorandum, are in full force and
effect, and none of the Issuers or any of their
subsidiaries has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights
of the Issuers or any of their subsidiaries under any of the
leases or subleases mentioned above, or affecting or
questioning the rights of the Issuers or any subsidiary
thereof to the continued possession of the leased or
subleased premises under any such lease or sublease, which
claim, if resolved against the Issuers or such subsidiary,
would result in a Material Adverse Effect.
(xxi) Environmental Laws. Except as described in the
Offering Memorandum and except such matters as would not,
singly or in the aggregate, result in a Material Adverse
Effect, (A) none of the Issuers or any of their subsidiaries
is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative
interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating
to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Issuers and their
subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are
each in compliance with their requirements, (C) there are no
pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the
Issuers or any of their subsidiaries and (D) there are no
events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or
an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the
Issuers or any of their subsidiaries relating to Hazardous
Materials or Environmental Laws.
(xxii) Restrictions on Subsidiaries. Other than Atlantic
Copper, no subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution
on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's
property or assets to the Company or any other subsidiary of
the Company, except as may be described in or contemplated
by the Offering Memorandum, and except such prohibitions
that, singly or in the aggregate, would not result in a
Material Adverse Effect.
(xxiii) Registration Rights. Except as may be
described in the Offering Memorandum, there are no
contracts, agreements or understandings between any Issuer
and any person granting such person the right to require any
Issuer to include any securities with the Securities to be
registered pursuant to the Registration Rights Agreement.
(xxiv) Taxes. The Issuers and each of their subsidiaries
have filed all foreign, federal, state and local tax returns
that are required to be filed or have requested extensions
thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect) and have paid all
taxes required to be paid by any of them and any other
assessment, fine or penalty levied against any of them, to
the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is
currently being contested in good faith or as would not have
a Material Adverse Effect.
(xxv) Insurance. The Issuers and each of their
subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in
which they are engaged; none of the Issuers or any such
subsidiary has been refused any insurance coverage sought or
applied for; and none of the Issuers or any such subsidiary
has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage
expires or to be obtain similar coverage from similar
insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect.
(xxvi) Investment Company Act. Each Issuer is not, and
upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds
therefrom as described in the Offering Memorandum will not
be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxvii) Similar Offerings. None of the Issuers or
any of their affiliates, as such term is defined in Rule
501(b) under the 1933 Act (each, an "Affiliate"), has,
directly or indirectly, solicited any offer to buy, sold or
offered to sell or otherwise negotiated in respect of, or
will solicit any offer to buy, sell or offer to sell or
otherwise negotiate in respect of, in the United States or
to any United States citizen or resident, any security which
is or would be integrated with the sale of the Securities in
a manner that would require the Securities to be registered
under the 1933 Act.
(xxviii) Rule 144A Eligibility. The Securities are
eligible for resale pursuant to Rule 144A and will not be,
at the Closing Time, of the same class as securities listed
on a national securities exchange registered under Section 6
of the 1934 Act, or quoted in a U.S. automated interdealer
quotation system.
(xxix) No General Solicitation. None of the Issuers, their
Affiliates or any person acting on its or any of their
behalf (other than the Initial Purchaser, as to whom the
Issuers make no representation) has engaged or will engage,
in connection with the offering of the Securities, in any
form of general solicitation or general advertising within
the meaning of Rule 502(c) under the 1933 Act.
(xxx) No Registration Required. Subject to compliance by
the Initial Purchaser with the representations and
warranties set forth in Section 2 and the procedures set
forth in Section 6 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the
Initial Purchaser and to each Subsequent Purchaser in the
manner contemplated by this Agreement and the Offering
Memorandum to register the Securities under the 1933 Act or
to qualify the Indenture under the Trust Indenture Act of
1939, as amended (the "1939 Act").
(xxxi) Reporting Company. The Company is subject to the
reporting requirements of Section 13 or Section 15(d) of the
0000 Xxx.
(xxxii) Regulation M. The Issuers have not taken,
and will not take, directly or indirectly, any action
prohibited by Regulation M under the 1934 Act in connection
with the offering of the Securities.
(xxxiii) Security Interest. The Pledge Agreement will
create valid security interests in the collateral purported
to be covered thereby securing the Co-Obligor's obligations
under the Notes to the extent contemplated by the Pledge
Agreement and the Indenture, which security interests are
and will remain perfected first-priority security interests.
(xxxiv) Representations and Warranties in the Pledge
Agreement. Each of the representations and warranties made
by the Co-Obligor in the Pledge Agreement is true and
correct.
(b) Officer's Certificates. Any certificate signed by any
officer of any Issuer or any of its subsidiaries delivered to the
Initial Purchaser or to counsel for the Initial Purchaser in
connection with the matters covered by this Agreement shall be
deemed a representation and warranty by such Issuer to the
Initial Purchaser as to the matters covered thereby.
Section 2. Sale and Delivery to Initial Purchaser; Closing.
(a) Securities. On the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Issuers agree to sell to the
Initial Purchaser, and the Initial Purchaser agrees to purchase
from the Issuers, at the price set forth in Schedule A, all of
the Initial Securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Issuers hereby
grant an option to the Initial Purchaser to purchase up to an
additional $78,750,000 principal amount of Securities at the same
price per share set forth in Schedule A for the Initial
Securities, plus accrued interest, if any, from the Closing Time
to the Date of Delivery (as defined below). The option hereby
granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the
purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial
Securities upon notice by the Initial Purchaser to the Issuers
setting forth the number of Option Securities as to which the
Initial Purchaser is then exercising the option and the time and
date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be
determined by the Initial Purchaser, but shall not be later than
seven full business days after the exercise of said option, nor
in any event prior to the Closing Time, as hereinafter defined.
(c) Payment. Payment of the purchase price for, and delivery
of certificates for, the Securities shall be made at the office
of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or at such other place as shall be agreed upon by the
Initial Purchaser and the Issuers, at 9:00 A.M. (eastern time) on
the fourth business day after the date hereof (unless postponed
in accordance with the provisions of Section 11), or such other
time not later than ten business days after such date as shall be
agreed upon by the Initial Purchaser and the Issuers (such time
and date of payment and delivery being herein called the "Closing
Time").
In addition, in the event that any or all of the Option
Securities are purchased by the Initial Purchaser, payment of the
purchase price for, and delivery of certificates for, such Option
Securities shall be made at the above-mentioned offices, or at
such other place as shall be agreed upon by the Initial Purchaser
and the Issuers, on each Date of Delivery as specified in the
notice from the Initial Purchaser to the Issuers.
Payment shall be made to the Issuers by wire transfer of
immediately available funds to a bank account designated by the
Issuers, against delivery to the Initial Purchaser for its
account of certificates for the Securities to be purchased by it.
(d) Denominations; Registration. Certificates for the
Initial Securities and the Option Securities, if any, shall be in
such denominations ($1,000 or integral multiples of $1,000 in
excess thereof) and registered in such names as the Initial
Purchaser may request in writing at least one full business day
before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates representing the Initial
Securities and the Option Securities, if any, shall be made
available for examination and packaging by the Initial Purchaser
in The City of New York not later than 10:00 A.M. on the last
business day prior to the Closing Time or the relevant Date of
Delivery, as the case may be.
Section 3. Covenants of the Issuers. Each Issuer, jointly
and severally, covenants with the Initial Purchaser as follows:
(a) Offering Memorandum. The Issuers, as promptly as
possible, will furnish to the Initial Purchaser, without charge,
such number of copies of the Preliminary Offering Memorandum, the
Final Offering Memorandum and any amendments and supplements
thereto and documents incorporated by reference therein as the
Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events. The Issuers will
immediately notify the Initial Purchaser, and confirm such notice
in writing, of (x) any filing made by the Issuers of information
relating to the offering of the Securities with any securities
exchange or any other regulatory body in the United States or any
other jurisdiction, and (y) prior to the completion of the
placement of the Securities by the Initial Purchaser as evidenced
by a notice in writing from the Initial Purchaser to the Issuers,
any material changes in or affecting the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise which (i) make any statement in the Offering
Memorandum false or misleading or (ii) are not disclosed in the
Offering Memorandum. In such event or if during such time any
event shall occur as a result of which it is necessary, in the
reasonable opinion of any of the Issuers, their counsel, the
Initial Purchaser or counsel for the Initial Purchaser, to amend
or supplement the Final Offering Memorandum in order that the
Final Offering Memorandum not include any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in the light of the
circumstances then existing, the Issuers will forthwith amend or
supplement the Final Offering Memorandum by preparing and
furnishing to the Initial Purchaser an amendment or amendments
of, or a supplement or supplements to, the Final Offering
Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchaser) so that, as so
amended or supplemented, the Final Offering Memorandum will not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances existing at the time it is
delivered to a Subsequent Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The
Issuers will advise the Initial Purchaser promptly of any
proposal to amend or supplement the Offering Memorandum and will
not effect such amendment or supplement without the consent of
the Initial Purchaser. Neither the consent of the Initial
Purchaser, nor the Initial Purchaser's delivery of any such
amendment or supplement, shall constitute a waiver of any of the
conditions set forth in Section 5 hereof.
(d) Qualification of Securities for Offer and Sale. The
Issuers will use their best efforts, in cooperation with the
Initial Purchaser, to qualify the Securities for offering and
sale under the applicable securities laws of such states and
other jurisdictions as the Initial Purchaser may designate and
will maintain such qualifications in effect as long as required
for the sale of the Securities; provided, however, that none of
the Issuers shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so
subject.
(e) Rating of Securities. The Issuers shall take all
reasonable action necessary to enable Standard & Poor's Ratings
Services, a division of McGraw Hill, Inc. ("S&P"), and Xxxxx'x
Investors Service Inc. ("Moody's") to provide their respective
credit ratings of the Securities.
(f) DTC. The Issuers will cooperate with the Initial
Purchaser and use their best efforts to permit the Securities to
be eligible for clearance and settlement through the facilities
of DTC.
(g) Use of Proceeds. The Issuers will use the net proceeds
received by them from the sale of the Securities in the manner
specified in the Offering Memorandum under "Use of Proceeds."
(h) Restriction on Sale of Securities. During a period of 90
days from the date of the Offering Memorandum, none of the
Issuers will, without the prior written consent of Xxxxxxx Xxxxx,
directly or indirectly, issue, sell, offer or agree to sell,
grant any option for the sale of, or otherwise dispose of, any
other debt securities of any Issuer or securities of any Issuer
that are convertible into, or exchangeable for, the Securities or
such other debt securities.
(i) Restriction on Sale of Common Stock. During a period of
90 days from the date of the Offering Memorandum, the Company
will not, without the prior written consent of Xxxxxxx Xxxxx,
directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant
for the sale of, lend or otherwise transfer or dispose of any
share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of
the foregoing or (ii) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be
sold hereunder, (B) any shares of Common Stock issued by the
Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and
referred to in the Offering Memorandum, (C) any shares of Common
Stock issued or options to purchase Common Stock granted pursuant
to existing employee benefit plans of the Company referred to in
the Offering Memorandum or (D) any shares of Common Stock issued
pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(j) PORTAL Designation. The Issuers will use their best
efforts to permit the Securities to be designated PORTAL
securities in accordance with the rules and regulations adopted
by the National Association of Securities Dealers, Inc. ("NASD")
relating to trading in the PORTAL Market.
(k Reporting Requirements. The Issuers, during the period
when the Offering Memorandum is required to be delivered pursuant
to Section 6(a)(vi) hereof, will file all documents required to
be filed with the Commission pursuant to the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act
Regulations.
(l Co-Obligor. So long as any of the Securities are
outstanding, the Co-Obligor will not issue any shares of its
capital stock or other equity interests in the Co-Obligor to any
person other than the Company or its subsidiaries, and the
Company shall cause the Co-Obligor to remain a wholly-owned
subsidiary of the Company at all times.
Section 4. Payment of Expenses.
(a Expenses. Each Issuer, jointly and severally, will pay
all expenses incident to the performance of the Issuers'
obligations under this Agreement, the Securities, the Indenture,
the Pledge Agreement and the Registration Rights Agreement,
including, but not limited to, (i) the preparation, printing,
delivery to the Initial Purchaser and any filing of the Offering
Memorandum (including financial statements and any schedules or
exhibits and any document incorporated therein by reference) and
of each amendment or supplement thereto, (ii) the preparation,
issuance and delivery of the certificates for the Securities to
the Initial Purchaser, including any transfer taxes, any stamp or
other duties payable upon the sale, issuance and delivery of the
Securities to the Initial Purchaser and any charges of DTC in
connection therewith, (iii) the fees and disbursements of the
Issuers' counsel, accountants and other advisors, (iv) the
qualification of the Securities under securities laws in
accordance with the provisions of Section 3(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel
for the Initial Purchaser in connection therewith and in
connection with the preparation of the Blue Sky Survey, or any
supplement thereto, (v) the fees and expenses of the Trustee and
the Collateral Agent, including the fees and disbursements of
counsel for the Trustee and the Collateral Agent in connection
with the Indenture, the Pledge Agreement and the Securities, (vi)
any fees payable in connection with the rating of the Securities
and (vii) any fees and expenses payable in connection with the
initial and continued designation of the Securities as PORTAL
securities under the PORTAL Market Rules pursuant to NASD Rule
5322.
(b Termination of Agreement. If this Agreement is
terminated by the Initial Purchaser in accordance with the
provisions of Section 5 or Section 10(a)(i) hereof, each Issuer,
jointly and severally, shall reimburse the Initial Purchaser for
all of its out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Initial Purchaser.
Section 5. Conditions of Initial Purchaser's Obligations.
The obligations of the Initial Purchaser hereunder are subject to
the accuracy of the representations and warranties of the Issuers
contained in Section 1 hereof or in certificates of any officer
of any Issuer or any of its subsidiaries delivered pursuant to
the provisions hereof, to the performance by the Issuers of their
covenants and other obligations hereunder, and to the following
further conditions:
(a Opinion of Counsel for Issuers. At the Closing Time, the
Initial Purchaser shall have received the favorable opinion,
dated as of the Closing Time, of Jones, Walker, Waechter,
Poitevent, Carrere & Xxxxxxx, L.L.P., counsel for the Issuers,
substantially in the form Exhibit A hereto.
(b Opinion of Counsel for Initial Purchaser. At the Closing
Time, the Initial Purchaser shall have received the favorable
opinion, dated as of the Closing Time, of Xxxxx Xxxx & Xxxxxxxx,
counsel for the Initial Purchaser, with respect to the matters
set forth in numbered paragraphs 6 through 10, inclusive, 12, 19
and the first paragraph immediately following the fifth paragraph
of qualifications, limitations and assumptions of Exhibit A
hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law
of the State of New York and the federal law of the United States
and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Initial Purchaser.
Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of any Issuer and its
subsidiaries and certificates of public officials.
(c Officers' Certificate. At the Closing Time, there shall
not have been, since the date hereof or since the respective
dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course
of business, and the Initial Purchaser shall have received a
certificate of the President or a Vice President of each Issuer
and of the chief financial or chief accounting officer of each
Issuer, dated as of the Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and
correct with the same force and effect as though expressly made
at and as of the Closing Time, and (iii) each Issuer has complied
with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the Closing Time.
(d Accountants' Comfort Letter. At the time of the
execution of this Agreement, the Initial Purchaser shall have
received from Xxxxxx Xxxxxxxx LLP, independent public
accountants, a letter dated such date, in form and substance
satisfactory to the Initial Purchaser containing statements and
information of the type ordinarily included in accountants'
"comfort letters" to Initial Purchaser with respect to the
financial statements and certain financial information contained
in the Offering Memorandum.
(e Bring-down Comfort Letter. At the Closing Time, the
Initial Purchaser shall have received from Xxxxxx Xxxxxxxx LLP a
letter, dated as of the Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (d) of this Section, except that the specified date
referred to shall be a date not more than three business days
prior to the Closing Time.
(f No Downgrading. Since the date of this Agreement, there
shall not have occurred a downgrading in the rating assigned to
any of the Issuers' securities by any "nationally recognized
statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the 1933 Act, and
no such organization shall have publicly announced that it has
under surveillance or review, with possible negative
implications, its rating of the Securities or any of the Issuers'
other securities.
(g PORTAL. At the Closing Time, the Securities shall have
been designated for trading on PORTAL.
(h Lock-Up Agreements. At the date of this Agreement, the
Initial Purchaser shall have received an agreement substantially
in the form of Exhibit B hereto signed by the persons listed on
Schedule C hereto.
(i Registration Rights Agreement. At the Closing Time, the
Initial Purchaser shall have received counterparts of the
Registration Rights Agreement duly executed by the Issuers.
(j Indenture and Pledge Agreement. At the Closing Time, the
Initial Purchaser shall have received a copy of the Indenture and
the Pledge Agreement, in each case duly executed by each of the
parties thereto.
(k Pledge of Securities. As of the Closing Time, the
Issuers shall have caused a portion of the proceeds from this
offering to be applied to purchase the Initial Pledged Securities
(as defined in the Pledge Agreement) and deposited such Initial
Pledged Securities into the Collateral Account (as defined in the
Pledge Agreement) to be held therein subject to the terms of the
Pledge Agreement and the Co-Obligor shall have granted the
assignment and security interest and made the pledge and
assignment contemplated by the Pledge Agreement.
(l Opinion of Accountants as to Sufficiency of Initial
Pledged Securities. At the Closing Time, the Initial Purchasers
shall have received written verification from Xxxxxx Xxxxxxxx
LLP, or another nationally recognized firm of independent public
accountants selected by the Issuers, as to the mathematical
accuracy of the computation of the sufficient level of the
Initial Pledged Securities, upon receipt of scheduled interest
and principal payments of such Initial Pledged Securities, to
provide for payment in full of the first six scheduled interest
payments due on the Initial Securities.
(m Refinancing Transactions. At the Closing Time, the
Initial Purchaser shall have received evidence satisfactory to it
of the commitment of the lenders under the Facilities to
consummate the Refinancing Transactions on substantially the
terms and conditions as described in the Offering Memorandum.
(n Conditions to Purchase of Option Securities. In the
event that the Initial Purchaser exercises its option provided in
Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Issuers
contained herein and the statements in any certificates furnished
by any Issuer or any subsidiary thereof hereunder shall be true
and correct as of each Date of Delivery and, at the relevant Date
of Delivery:
(i Officers' Certificate. The Initial Purchaser shall
have received a certificate, dated such Date of Delivery, of
the President or a Vice President of each Issuer and of the
chief financial or chief accounting officer of each Issuer
confirming that the certificate delivered at the Closing
Time pursuant to Section 5(c) hereof remains true and
correct as of such Date of Delivery.
(ii Opinion of Counsel for Issuers. The Initial
Purchaser shall have received the favorable opinion of
Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx,
L.L.P., counsel for the Issuers, dated such Date of
Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(a) hereof.
(iii Opinion of Counsel for Initial Purchaser. The
Initial Purchaser shall have received the favorable opinion
of Xxxxx Xxxx & Xxxxxxxx, counsel for the Initial Purchaser,
dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(b) hereof.
(iv Bring-down Comfort Letter. The Initial Purchaser
shall have received a letter from Xxxxxx Xxxxxxxx LLP, in
form and substance satisfactory to the Initial Purchaser and
dated such Date of Delivery, substantially in the same form
and substance as the letter furnished to the Initial
Purchaser pursuant to Section 5(e) hereof, except that the
"specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to
such Date of Delivery.
(v No Downgrading. Subsequent to the date of this
Agreement, no downgrading shall have occurred in the rating
accorded any of the Issuers' securities by any "nationally
recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2)
under the 1933 Act, and no such organization shall have
publicly announced that it has under surveillance or review
its ratings of any of the Issuers' securities.
(vi Pledge of Securities. As of the relevant Date of
Delivery, the Issuers shall have caused such portion of the
proceeds from the sale of the Option Securities to be
applied to purchase Additional Pledged Securities (as
defined in the Pledge Agreement) which, upon the receipt of
the scheduled principal and interest payments thereon would
be sufficient to provide for the payment in full of the
first six scheduled interest payments due on such Option
Securities and deposited such Additional Pledged Securities
into the Collateral Account (as defined in the Pledge
Agreement) to be held therein subject to the terms of the
Pledge Agreement and the Co-Obligor shall have granted the
assignment and security interest made the pledge and
assignment contemplated by the Pledge Agreement.
(vii Opinion of Accountants as to Sufficiency of
Additional Pledged Securities. At the relevant Date of
Delivery, the Initial Purchasers shall have received written
verification from Xxxxxx Xxxxxxxx LLP, or another nationally
recognized firm of independent public accountants selected
by the Issuers, as to the mathematical accuracy of the
computation of the sufficient level of the Additional
Pledged Securities, upon receipt of scheduled interest and
principal payments of such Additional Pledged Securities, to
provide for payment in full of the first six scheduled
interest payments due on the Option Securities issued in
connection therewith.
(o Additional Documents. At the Closing Time and at each
Date of Delivery, counsel for the Initial Purchaser shall have
been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated,
or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Issuers in connection with the issuance and sale of the
Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Initial Purchaser and
counsel for the Initial Purchaser.
(p Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required
to be fulfilled, this Agreement, or, in the case of any condition
to the purchase of Option Securities, on a Date of Delivery which
is after the Closing Time, the obligations of the Initial
Purchaser to purchase the relevant Option Securities, may be
terminated by the Initial Purchaser by notice to the Issuers at
any time at or prior to the Closing Time or such Date of
Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 7, 8 and 9
shall survive any such termination and remain in full force and
effect.
Section 6. Subsequent Offers and Resales of the Securities.
(a Offer and Sale Procedures. The Initial Purchaser and the
Issuers hereby establish and agree to observe the following
procedures in connection with the offer and sale of the
Securities:
(i Offers and Sales only to Qualified Institutional
Buyers. Offers and sales of the Securities shall only be
made to persons whom the offeror or seller reasonably
believes to be qualified institutional buyers, as defined in
Rule 144A under the 1933 Act ("Qualified Institutional
Buyers").
(ii No General Solicitation. No general solicitation or
general advertising (within the meaning of Rule 502(c) under
the 0000 Xxx) will be used in the United States in
connection with the offering or sale of the Securities.
(iii Purchases by Non-Bank Fiduciaries. In the case of a
non-bank Subsequent Purchaser of a Security acting as a
fiduciary for one or more third parties, each third party
shall, in the judgment of the Initial Purchaser, be a
Qualified Institutional Buyer.
(iv Subsequent Purchaser Notification. The Initial
Purchaser will take reasonable steps to inform, and cause
each of its U.S. affiliates to take reasonable steps to
inform, persons acquiring Securities from the Initial
Purchaser or affiliate, as the case may be, in the United
States that the Securities (A) have not been and will not be
registered under the 1933 Act, (B) are being sold to them
without registration under the 1933 Act in reliance on Rule
144A or in accordance with another exemption from
registration under the 1933 Act, as the case may be, and (C)
may not be offered, sold or otherwise transferred except (1)
to the Company or a subsidiary thereof, (2) outside the
United States in accordance with Regulation S, or (3) inside
the United States (w) in accordance with Rule 144A to a
person whom the seller reasonably believes is a Qualified
Institutional Buyer that is purchasing such Securities for
its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the offer,
sale or transfer is being made in reliance on Rule 144A, (x)
to an institutional "accredited investor" within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under
the 1933 Act that is purchasing for its own account or for
the account of such an institutional accredited investor,
(y) pursuant to a registration statement which has been
declared effective under the 1933 Act or (z) pursuant to
another available exemption from registration under the 1933
Act.
(v Restrictions on Transfer. The transfer restrictions
and the other provisions set forth in the Offering
Memorandum under the heading "Notice to Investors",
including the legend required thereby, shall apply to the
Securities except as otherwise agreed by the Issuers and the
Initial Purchaser.
(vi Delivery of Offering Memorandum. The Initial
Purchaser will deliver to each purchaser of the Securities
from the Initial Purchaser, in connection with its original
distribution of the Securities, a copy of the Offering
Memorandum, as amended and supplemented at the date of such
delivery.
(b Covenants of the Issuers. Each Issuer, jointly and
severally covenants with the Initial Purchaser as follows:
(i Integration. Each Issuer agrees that it will not
and will cause its Affiliates not to, directly or
indirectly, solicit any offer to buy, sell or make any offer
or sale of, or otherwise negotiate in respect of, securities
of any Issuer of any class if, as a result of the doctrine
of "integration" referred to in Rule 502 under the 1933 Act,
such offer or sale would render invalid (for the purpose of
(i) the sale of the Securities by the Issuers to the Initial
Purchaser, (ii) the resale of the Securities by the Initial
Purchaser to Subsequent Purchasers or (iii) the resale of
the Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the 1933 Act
provided by Section 4(2) thereof or by Rule 144A thereunder
or otherwise.
(ii Rule 144A Information. Each Issuer agrees that, in
order to render the Securities eligible for resale pursuant
to Rule 144A under the 1933 Act, while any of the Securities
remain outstanding, it will make available, upon request, to
any holder of Securities or prospective purchasers of
Securities the information specified in Rule 144A(d)(4),
unless such Issuer furnishes information to the Commission
pursuant to Section 13 or 15(d) of the 1934 Act.
(iii Restriction on Resales. While any of the Securities
remain outstanding, each Issuer will not, and will cause its
Affiliates not to, resell any Securities which they acquire.
(c Qualified Institutional Buyer. The Initial Purchaser
represents and warrants to, and agrees with, the Issuers that it
is a "qualified institutional buyer" within the meaning of Rule
144A under the 1933 Act.
Section 7. Indemnification.
(a Indemnification of Initial Purchaser. Each Issuer,
jointly and severally, agrees to indemnify and hold harmless the
Initial Purchaser and each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Offering Memorandum or the
Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
(ii against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency
or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that
(subject to Section 7(d) below) any such settlement is
effected with the written consent of the Issuers; and
(iii against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by
Xxxxxxx Xxxxx), reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the
extent arising out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Issuers by
the Initial Purchaser expressly for use in the Offering
Memorandum (or any amendment thereto).
(b Indemnification of Issuers. The Initial Purchaser agrees
to indemnify and hold harmless the Issuers and each person, if
any, who controls the Issuers within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Offering Memorandum in reliance upon and in conformity with
written information furnished to the Issuers by the Initial
Purchaser expressly for use in the Offering Memorandum.
(c Actions against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to
each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the
case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx
Xxxxx, and, in the case of parties indemnified pursuant to
Section 7(b) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may participate
at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except
with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel
for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this
Section or Section 8 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any
indemnified party.
(d Settlement without Consent if Failure to Reimburse. If
at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it
shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request
prior to the date of such settlement.
(e Engagement Letter Superseded. The terms of the
engagement letter entered into between the Company and the
Initial Purchaser, dated July 16, 2001 (the "Engagement Letter"),
are hereby superceded and replaced in their entirety by the terms
of this Agreement, including any and all indemnity provisions
contained in the Engagement Letter, which are specifically
replaced by the provisions contained in this Section 7,
notwithstanding the fact that the Engagement Letter provides that
provisions relating to indemnity shall survive its termination.
Section 8. Contribution. If the indemnification provided
for in Section 7 hereof is for any reason unavailable to or
insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative
benefits received by the Issuers on the one hand and the Initial
Purchaser on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of
the Issuers on the one hand and of the Initial Purchaser on the
other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers on the one
hand and the Initial Purchaser on the other hand in connection
with the offering of the Securities pursuant to this Agreement
shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Securities pursuant
to this Agreement (before deducting expenses) received by the
Issuers and the total underwriting discount received by the
Initial Purchaser, bear to the aggregate initial offering price
of the Securities.
The relative fault of the Issuers on the one hand and the
Initial Purchaser on the other hand shall be determined by
reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information
supplied by the Issuers or by the Initial Purchaser and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Issuers and the Initial Purchaser agree that it would
not be just and equitable if contribution pursuant to this
Section were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this
Section shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section, the Initial
Purchaser shall not be required to contribute any amount in
excess of the amount by which the total price at which the
Securities purchased and sold by it hereunder exceeds the amount
of any damages which the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
For purposes of this Section, each person, if any, who
controls the Initial Purchaser within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Initial Purchaser, and each person,
if any, who controls the Issuers within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Issuers.
Section 9. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements
contained in this Agreement or in certificates of officers of any
Issuer or any of its subsidiaries submitted pursuant hereto shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Initial Purchaser or
controlling person, or by or on behalf of the Issuers, and shall
survive delivery of the Securities to the Initial Purchaser.
Section 10. Termination of Agreement.
(a Termination; General. The Initial Purchaser may
terminate this Agreement, by notice to the Issuers, at any time
at or prior to the Closing Time (i) if there has been, since the
time of execution of this Agreement or since the respective dates
as of which information is given in the Offering Memorandum, any
material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the
financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development
involving a prospective change in national or international
political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the
Initial Purchaser, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or
materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange
or the New York Stock Exchange or in the Nasdaq National Market
has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices
have been required, by any of said exchanges or by such system or
by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof,
and provided further that Sections 1, 7, 8 and 9 shall survive
such termination and remain in full force and effect.
Section 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Initial Purchaser shall be
directed to the it at Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention of Equity Capital Markets;
notices to the Issuers shall be directed to them at 0000 Xxxxxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000, attention of Xxxxxxx X.
Xxxxxxxx.
Section 12. Parties. This Agreement shall inure to the
benefit of and be binding upon the Initial Purchaser and the
Issuers and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Initial
Purchaser and the Issuers and their respective successors and the
controlling persons and officers and directors referred to in
Sections 7 and 8 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Initial Purchaser and the
Issuers and their respective successors, and said controlling
persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from the Initial
Purchaser shall be deemed to be a successor by reason merely of
such purchase.
Section 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN,
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section 14. 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.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Issuers a
counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement between the Initial
Purchaser and the Issuers in accordance with its terms.
Very truly yours,
FREEPORT-McMoRan COPPER &
GOLD INC.
By: ____________________________
Name:
Title:
FCX INVESTMENT LTD.
By: ____________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: ____________________________
Authorized Signatory
SCHEDULE A
FREEPORT MCMORAN COPPER & GOLD INC.
FCX INVESTMENT LTD.
$525,000,000 8 1/4% Convertible Senior Notes due 2006
1. The initial offering price of the Securities shall be
100% of the principal amount thereof, plus accrued interest, if
any, from the date of issuance.
2. The purchase price to be paid by the Initial Purchaser
for the Securities shall be 96.5% of the principal amount
thereof.
3. The interest rate on the Securities shall be 8 1/4% per
annum.
4. The Securities shall be convertible into shares of, at
the option of the holder, Class A Common Stock, par value $.10
per share or Class B Common Stock, par value $.10 per share, of
the Company at an initial conversion price of $14.30 per share
(equivalent to a conversion rate of 69.9301 shares of Class A
Common Stock or Class B Common Stock per $1,000 principal amount
of Securities).
5. The Co-Obligor shall pledge a portfolio of U.S.
government securities to secure the payment of the first six
scheduled installments of interest.
6. The Securities shall be redeemable, in whole or in
part, at the option of the Issuers on or after July 31, 2004.
7. Holders of the Securities shall have the option to
require the Issuers to repurchase the Securities upon a Change of
Control of the Company, in cash or in Common Stock.
8. Registration rights shall be granted to the holders of
the Securities.
SCHEDULE B
List of Designated Subsidiaries
PT Freeport Indonesia
PT Xxxx Eastern Minerals
Atlantic Copper, S.A.
FM Services Company
SCHEDULE C
List of Persons Subject to Lock-Up
All directors and executive officers of the Company:
A. Directors
Xxxxxx X. Xxxxxxx, Xx.
Xxxxxx X. Xxxxx III
R. Xxxxx Xxxxxxxx
Xxxxxx X. Day
Xxxxxx X. Xxxx
H. Xxxxx Xxxxxx, Xx.
Xxxxx Y.L. Xxxxxxxxxx
X. Xxxxxxx Xxxxxxxx
Xxxxx Xxx Xxxxxx
Xxxxxxxxx X. XxXxxxxx
Xxxxx X. Xxxxxxx
X.X. Xxxxxx, Xx.
X. Xxxxxxxxx Xxx
X. Xxxxxx Xxxxxxx
B. Executive Officers
Name Title
Xxxxx X. Xxxxxxx Chairman of the Board & Chief Executive Officer
Xxxxxxx X. Xxxxxxxx President & Chief Financial Officer
Adrianto Machribie President Director of PT Freeport Indonesia
Exhibit A
FORM OF OPINION OF ISSUERS' COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Freeport-McMoRan Copper & Gold Inc. and FCX
Investment Ltd.
8 1/4% Convertible Senior Notes Due 2006
Ladies and Gentlemen:
We have served as counsel to Freeport-McMoRan Copper & Gold
Inc., a Delaware corporation (the "Company"), and FCX Investment
Ltd., a Cayman Islands exempted limited liability company (the
"Co-Obligor," and together with the Company, the "Issuers," and
each an "Issuer") in connection with the sale of 8 1/4% Convertible
Senior Notes due 2006 (the ANotes@) pursuant to an indenture (the
"Indenture") dated August 7, 2001 by and among the Company, the
Co-Obligor and The Bank of New York, as trustee (the "Trustee"),
and a Purchase Agreement dated August 1, 2001 (the "Purchase
Agreement") by and among the Company, the Co-Obligor and Xxxxxxx
Xxxxx & Co. Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
(the "Initial Purchaser"). This opinion is furnished to you
pursuant to Section 5(a) of the Purchase Agreement at the request
of the Issuers. Capitalized terms used but not defined herein
will have the meanings assigned to them in the Purchase
Agreement.
In connection with rendering the opinions expressed herein,
we have examined (1) the Offering Memorandum, (2) the following
documents (collectively, the "Transaction Documents"): (a) the
Purchase Agreement, (b) the Registration Rights Agreement, (c)
the Indenture, and (d) the Pledge Agreement, and (3) the
corporate records of the Company and its subsidiaries, including
without limitation, their organizational documents, stock records
and records of the proceedings of stockholders, the boards of
directors and committees thereof. We have also relied upon
factual representations made by the Issuers and the Initial
Purchaser in the Purchase Agreement and upon such other
documents, records, certificates and other instruments, including
certificates of public officials and officers of the Issuers, as
we have deemed appropriate, copies of which have been furnished
to you.
In our examination of such documents, we have assumed
without verification that (1) the Purchase Agreement,
Registration Rights Agreement, the Indenture and the Pledge
Agreement have been duly authorized, executed and delivered by
the parties thereto other than the Issuers and are enforceable
against such parties in accordance with the terms thereof, (2)
the authenticity of all documents submitted to us as originals,
(3) the conformity to the originals of all documents submitted to
us as conformed, certified or photostatic copies, (4) the
accuracy and completeness of all corporate records made available
to us by the Company, and (5) the genuineness of all signatures
on all documents and instruments examined by us.
Based on the foregoing, and subject to the qualifications,
limitations and assumptions set forth herein, we are of the
opinion that:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware; the Co-Obligor has been duly incorporated and
is validly existing as an exempted limited liability company in
good standing under the laws of the Cayman Islands.
2. Each Issuer has the power and authority to own, lease
and operate its properties and to conduct its business as
described in the Offering Memorandum and to enter into and
perform its obligations under the Purchase Agreement.
3. To our best knowledge and following due inquiry of
appropriate representatives of the Company, each Issuer is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good
standing would not result in a Material Adverse Effect.
4. The Company's authorized Common Stock is as set forth
in the Offering Memorandum under the caption "Description of
Common Stock" and all of the outstanding shares of the Company's
Common Stock have been duly authorized and validly issued, are
fully paid and nonassessable and, to our best knowledge and
following due inquiry of appropriate representatives of the
Company, have not been issued in violation of preemptive or other
similar rights of any securityholder of the Company.
5. PT Freeport Indonesia has been duly domesticated and is
in good standing under the laws of the State of Delaware; FM
Service Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware; and Atlantic Copper, S.A. has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of Spain; each of PT Freeport Indonesia,
FM Service Company, and Atlantic Copper, S.A. has power and
authority to own, lease and operate its properties and to conduct
its business as described in the Offering Memorandum and, to our
best knowledge and following due inquiry of appropriate
representatives of the Company, is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not result in a Material
Adverse Effect; all of the issued and outstanding shares of
capital stock of each of the Co-Obligor, PT Freeport Indonesia,
FM Services Company and Atlantic Copper, S.A. as shown in the
Offering Memorandum as beneficially owned by the Company have
been duly authorized, validly issued and are fully paid and
nonassessable and, to our best knowledge, are owned by the
Company as shown in the Offering Memorandum free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity, other than a security interest in the issued and
outstanding shares of Atlantic Copper, S.A.
6. The Purchase Agreement has been duly authorized,
executed and delivered by each Issuer.
7. Each of the Indenture and the Registration Rights
Agreement has been duly authorized, executed and delivered by
each Issuer and, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a
valid and binding agreement of each Issuer, enforceable against
each Issuer in accordance with its terms.
8. The Pledge Agreement has been duly authorized, executed
and delivered by the Co-Obligor and, assuming the due
authorization, execution and delivery thereof by the other
parties thereto, constitutes a valid and binding agreement of the
Co-Obligor enforceable against the Co-Obligor in accordance with
its terms.
9. The Securities are in the form contemplated by the
Indenture and have been duly authorized by each Issuer and, when
executed by each Issuer and authenticated by the Trustee in the
manner provided in the Indenture, assuming the due authorization,
execution and delivery of the Indenture by the Trustee and
assuming that the Securities are issued and delivered against
payment of the purchase price therefor, will constitute valid and
binding obligations of each Issuer, enforceable against each
Issuer, in accordance with their terms.
10. Upon issuance and delivery of the Securities in
accordance with the Purchase Agreement and the Indenture, the
Securities shall be convertible at the option of the holder
thereof for shares of Common Stock in accordance with the terms
of the Securities and the Indenture; the shares of Common Stock
issuable upon conversion of the Securities have been duly
authorized and reserved for issuance upon such conversion by all
necessary corporate action; such shares, when issued upon such
conversion, will be validly issued and will be fully paid and
nonassessable and no holder of such Common Stock will be subject
to personal liability by reason of being such a holder.
11. The issuance of the shares of Common Stock upon
conversion of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company, other
than certain preemptive rights and a right of first offer of Rio
Tinto plc and its affiliates, which rights have been waived.
12. The Securities, the Indenture and the Pledge Agreement
and the Registration Rights Agreement conform in all material
respects to the descriptions thereof contained in the Offering
Memorandum.
13. The documents incorporated by reference in the Offering
Memorandum (other than the financial statements and supporting
schedules therein, as to which we render no opinion), when they
were filed with the Commission, complied as to form in all
material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder.
14. Except as described in the Offering Memorandum, there
is not pending or, to our best knowledge and following due
inquiry of appropriate representatives of the Company, threatened
any action, suit, proceeding, inquiry or investigation, to which
either Issuer or any subsidiary thereof is a party, or to which
the property of either Issuer or any subsidiary thereof is
subject, before or brought by any court or governmental agency or
body, domestic or foreign, which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or
assets of the Company taken as a whole, or the consummation of
the transactions contemplated in the Purchase Agreement, the
Indenture, the Pledge Agreement, the Registration Rights
Agreement or the Securities or the performance by each Issuer of
its obligations thereunder or the transactions contemplated by
the Offering Memorandum.
15. The information in the Offering Memorandum under the
captions "Refinancing Transactions," "Description of the Notes,"
"Description of Common Stock" and "Certain United States Federal
Income Tax Considerations," in Part I, Item 3 of the Company's
most recent Annual Report on Form 10-K under the caption "Legal
Proceedings," in Part II, Item 1 of the Company's most recent
Quarterly Report on Form 10-Q under the caption "Legal
Proceedings" and in the Company's most recent Proxy Statement on
Schedule 14A under the caption "Certain Transactions," to the
extent that it constitutes matters of law, summaries of legal
matters, the Issuers' charter, bylaws or other organizational
documents or legal proceedings, or legal conclusions, has been
reviewed by us and fairly present and summarize, in all material
respects, the matters referred to therein.
16. All descriptions in the Offering Memorandum of
contracts and other documents to which any Issuer or any if its
subsidiaries is a party fairly present and summarize, in all
material respects, the matters referred to therein; to our best
knowledge and following due inquiry of appropriate
representatives of the Company, there are no material contracts,
indentures, mortgages, loan agreements, notes, leases or other
agreements that would be required to be filed as exhibits to the
Company's reports filed with the Commission under the 1934 Act
that are incorporated by reference in the Offering Memorandum.
17. To our best knowledge and following due inquiry of
appropriate representatives of the Company, (a) none of the
Issuers or any of their subsidiaries is in violation of its
charter, by-laws or other organizational documents and (b) no
default by any Issuer or any of its subsidiaries exists in the
due performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement that is
described or referred to in the Offering Memorandum or
incorporated by reference therein, except in each such case for
violations or defaults as would not, individually or in the
aggregate, result in a Material Adverse Effect.
18. No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any
court or government authority or agency, domestic or foreign
(other than such as may be required under the applicable
securities laws of the various jurisdictions in which the
Securities will be offered or sold, as to which we need express
no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Purchase Agreement
or the due execution, delivery or performance of the Indenture,
the Pledge Agreement, the Registration Rights Agreement or the
Securities by any Issuer or for the offering, issuance, sale or
delivery of the Securities to the Initial Purchaser or the resale
by the Initial Purchaser in accordance with the terms of the
Purchase Agreement or the issuance of shares of Common Stock upon
conversion of the Securities, except as may be required by
federal and state securities laws with respect to the Issuer's
obligations under the Registration Rights Agreement.
19. Assuming the accuracy of the representations,
warranties and covenants of the Issuers in paragraphs (xxvii) and
(xxix) of Section 1(a) and in Section 6 and the Initial Purchaser
in Section 6 contained in the Purchase Agreement, no registration
of the Securities under the 1933 Act and no qualification of the
Indenture under the Trust Indenture Act is necessary in
connection with the offer, sale and delivery of the Securities to
the Initial Purchaser and the initial resale of the Securities by
the Initial Purchaser in the manner contemplated by the Purchase
Agreement and the Offering Memorandum. No opinion is expressed,
however, as to when or under what circumstances any of the
Securities initially sold by the Initial Purchaser may be
reoffered or resold.
20. The execution, delivery and performance by the Issuers
of the Purchase Agreement, the Indenture, the Pledge Agreement,
the Registration Rights Agreement and the Securities and the
consummation of the transactions contemplated therein and in the
Offering Memorandum (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the
Securities as described in the Offering Memorandum under the
caption "Use of Proceeds" and the issuance of the shares of
Common Stock issuable upon conversion of the Securities) and
compliance by each Issuer with its obligations under the Purchase
Agreement, the Indenture, the Pledge Agreement, the Registration
Rights Agreement and the Securities do not and will not, whether
with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment
Event (as defined in Section 1(a)(xiv) of the Purchase Agreement)
under or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of any Issuer or any
subsidiary thereof pursuant to any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or any other
agreement, known to us, to which any Issuer or any of its
subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of any Issuer or
any subsidiary thereof is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would
not have a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter, by-laws or
other organizational documents of any Issuer or any of its
subsidiaries, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, having jurisdiction over any
Issuer or any of its subsidiaries or any of their respective
properties, assets or operations.
21. Each Issuer is not, and upon issuance and sale of the
Securities as contemplated in the Purchase Agreement and the
application of the net proceeds therefrom as described in the
Offering Memorandum will not be, an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act.
22. The Pledge Agreement is effective to create, in favor
of the Collateral Agent for the benefit of the Trustee and for
the ratable benefits of the Holders (collectively, the "Secured
Parties"), a valid security interest (the "Security Interest") in
all right, title and interest of the Co-Obligor in the Collateral
(as defined in the Pledge Agreement) to secure the Obligations
(as defined therein) to the extent that the Uniform Commercial
Code as in effect in the State of New York (the "UCC") or 31
C.F.R. Part 357 is applicable thereto and governs the creation of
security interests therein (such Collateral, the "Specified
Collateral").
23. With respect to Specified Collateral that consists of
U.S. Government Obligations (as defined in the Indenture) that
are held in a "Participant's Securities Account" (as defined in
31 C.F.R. section 357.2) with a Federal Reserve Bank pursuant to the
Treasury/Reserve Automated Debt Entry System ("TRADES"), upon the
Collateral Agent's indication by book entry that such U.S.
Government Obligations have been credited to the Collateral
Account (as defined in the Pledge Agreement) as contemplated in
the Pledge Agreement, the Security Interest in a security
entitlement in respect thereof will be perfected and the
Collateral Agent will have control (within the meaning of Section
8-106 of the UCC) of such security entitlement.
24. With respect to Specified Collateral that consists of
uncertificated securities, upon the registration of such
uncertificated securities by the issuer thereof in the name of
the Collateral Agent, the Security Interest in such
uncertificated securities will be perfected, the Collateral Agent
will have control (within the meaning of Section 8-106 of the
UCC) of such uncertificated securities and the Collateral Agent
will be a protected purchaser (within the meaning of Section 8-
303(a) of the UCC) thereof (assuming the Collateral Agent has no
prior notice of an adverse claim).
25. With respect to Specified Collateral that consists of
security entitlements or financial assets, upon the crediting of
such financial assets or the financial assets underlying such
security entitlements to the Collateral Account, the Security
Interest in a security entitlement in respect of such financial
assets will be perfected and the Collateral Agent will have
control (within the meaning of Section 8-106 of the UCC) of such
security entitlement.
The opinions expressed herein are subject to the following
qualifications, limitations and assumptions:
1. All of our opinions are subject to (a) the application
of any fraudulent conveyance, fraudulent transfer, fraudulent
obligation or similar law, (b) bankruptcy, insolvency,
reorganization, moratorium, receivership and other similar laws
relating to or affecting the enforcement of creditors' rights
generally, and (c) general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good
faith and fair dealing, and the possible unavailability of
specific performance or injunctive relief.
2. We express no opinion as to the indemnification,
exculpation, choice of law, consent to jurisdiction and
severability provisions contained in any of the Transaction
Documents or any Blue Sky laws of any jurisdiction.
3. Certain rights and remedies contained in the Pledge
Agreement may be rendered ineffective or limited by applicable
laws or judicial decisions governing such provisions but which,
in our opinion, do not affect the validity of the Pledge
Agreement and will not interfere with the practical realization
of the rights and benefits of the security intended to be
provided therein or thereby.
4. We express no opinion as to (a) except as expressly set
forth herein, the perfection or priority of any security interest
or other lien created pursuant to any of the Transaction
Documents or (b) the right of any Person, other than the
Collateral Agent, to enforce any right or avail itself of any
remedy set forth in the Pledge Agreement.
5. The perfection of the liens created by the Pledge
Agreement in or with respect to any Collateral constituting
"proceeds," as defined in the UCC, will be a continuously
perfected security interest if the interest in the original
Collateral was perfected; but such security interest will cease
to be a perfected lien and will become unperfected twenty-one
days after receipt of the proceeds by the applicable debtor
unless (a) a filed Financing Statement covers the original
Collateral, the proceeds are Collateral in which a security
interest may be perfected by filing in the office or offices
where such Financing Statement was filed and the proceeds are
not acquired with cash proceeds or (b) the proceeds are
identifiable cash proceeds or (c) the security interest in the
proceeds is perfected within twenty days after receipt of the
proceeds by the applicable debtor.
We have participated in conferences with officers and other
representatives of the Company, representatives of the
independent public or certified public accountants for the
Company and with representatives of the Initial Purchaser at
which the contents of the Offering Memorandum and related matters
were discussed and, although we are not passing upon and do not
assume any responsibility for, and have not made any independent
verification of, the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum (other than as
specified above), on the basis of the foregoing, nothing has come
to our attention that would lead us to believe that the Offering
Memorandum, as of its date or at the Closing Time contained or
contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading (it being understood that no
opinion is expressed as to the financial statements or other
financial data derived therefrom, included or incorporated by
reference in the Offering Memorandum).
The opinions rendered herein are specifically limited to the
General Corporation Law of the State of Delaware, the laws of the
State of Louisiana and the federal laws of the United States of
America. For purposes of expressing the opinions contained in
paragraphs 7, 8, 9, 22, 23, 24 and 25 above, we note that the
laws of the State of New York expressly govern the Purchase
Agreement, the Indenture, the Registration Rights Agreement and
the Pledge Agreement. We are not licensed to practice law in New
York; accordingly, we have assumed, with your consent and without
investigation, that the laws of New York are the same as the laws
of the State of Louisiana on matters pertaining to such
agreements. In addition, as to the matters addressed therein
pertaining to the laws of the Cayman Islands we have relied with
your consent on the opinion, dated the date hereof, of Xxxxxx and
Xxxxxx, special Cayman Islands counsel to the Issuers, and as to
the matters addressed therein pertaining to the laws of Spain we
have relied with your consent on the opinion, dated the date
hereof, of Linklaters & Alliance, counsel to Atlantic Copper,
S.A.; we believe that the Initial Purchaser is justified in
relying on such opinions, copies of which are attached.
Whenever our opinion is given with respect to the existence
or absence of facts (or legal conclusions which necessarily are
based upon the existence or absence of facts) and is indicated to
be based on our best knowledge, it is intended to signify that,
during the course of our representation of the Company, no
information has come to the conscious awareness of any attorney
in our firm who has had active involvement with such
representation that would give any such person actual knowledge
of the existence or absence of such facts, and that except to the
extent expressly set forth, we have not undertaken any
independent investigation to determine or verify the existence or
absence of facts, and no inference as to such knowledge or the
existence or absence of such facts should be drawn from our
representation of the Company.
We assume no obligation to revise or supplement this opinion
should such currently applicable laws be changed by legislative
action, judicial decision or otherwise.
This opinion is being rendered solely to you in connection
with the above matter and, accordingly, may not be relied upon by
you for any other purpose or furnished to, or relied on by, any
other person without our prior written consent. We express no
opinion as to any matter other than expressly set forth above,
and no other opinion is to or may be interpreted or implied
herefrom. This opinion is given as of the date hereof and is
based upon the facts and circumstances presently known to us, and
we undertake no, and hereby disclaim any, obligation to advise
you of any change in the matters set forth herein.
The foregoing expresses our legal opinion as to the matters
set forth above and is based upon our professional knowledge and
judgment at this time; it is not, however, to be construed as a
guarantee, nor is it a warranty that a court considering such
matters would not rule in a manner contrary to the opinions set
forth above.
Very truly yours,
Jones, Walker, Waechter, Poitevent,
Carrere & Xxxxxxx L.L.P.
By:___________________________
Xxxxxxx X. Xxxxxxxx XX
Exhibit B
FORM OF LOCK-UP AGREEMENT TO BE DELIVERED
PURSUANT TO SECTION 5(h)
August 1, 2001
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Offering by Freeport-McMoRan Copper & Gold
Inc.
and FCX Investment Ltd.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or
director]1 of Freeport-McMoRan Copper & Gold Inc., a Delaware
corporation (the "Company"), understands that Xxxxxxx Xxxxx &
Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx
Xxxxx") proposes to enter into a Purchase Agreement (the
"Purchase Agreement") with the Company and FCX Investment Ltd., a
Cayman Islands exempted company (together with the Company, the
"Issuers"), providing for the offering of $525,000,000 aggregate
principal amount (or up to $603,750,000 if the overallotment
option is exercised in full) of the Issuers' 8 1/4% Convertible
Senior Notes due 2006 (the "Securities"). In recognition of the
benefit that such an offering will confer upon the undersigned as
a stockholder [and an officer and/or director] of the Company,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned
agrees with the Initial Purchaser to be named in the Purchase
Agreement that, during a period of 90 days from the date of the
Purchase Agreement, the undersigned will not, without the prior
written consent of Xxxxxxx Xxxxx, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant for the sale of, lend or
otherwise dispose of or transfer any shares of the Company's
Class A Common Stock, par value $.10 per share, or Class B Common
Stock, par value $.10 per share (collectively, the "Common
Stock"), or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter
acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition,
or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of Common Stock or any
securities convertible into or exchangeable for Common Stock,
whether any such swap or transaction described in (i) or (ii)
above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
The foregoing sentence shall not apply to (i) transfers of
shares of Common Stock or options to purchase the Common Stock
made as a bona fide gift or gifts, provided that the donee or
donees thereof agree to be bound by the restrictions set forth
herein and (ii) transfers of shares of Common Stock or options to
purchase the Common Stock made to any trust for the direct or
indirect benefit of the undersigned or the immediate family of
the undersigned, provided that the trustee of the trust agrees to
be bound by the restrictions set forth herein, and provided
further that any such transfer shall not involve a disposition
for value.
Very truly yours,
Signature: ___________________________
Print Name: _________________________
