Exhibit 10.26
AMENDMENT dated as of August 11, 2000 to the
Credit Agreement dated as of December 12, 1997, as amended
and restated as of November 17, 1998, as amended as of
January 20, 1999 (the "Credit Agreement"), among FREEPORT-
McMoRan SULPHUR LLC, a Delaware limited liability company
(the "Borrower"); McMoRan EXPLORATION CO., a Delaware
corporation, as guarantor (in such capacity, the
"Guarantor"); the several lenders from time to time party
thereto (collectively, the "Lenders"), THE CHASE MANHATTAN
BANK, a New York banking corporation ("Chase"), as
administrative agent for the Lenders (in such capacity, the
"Administrative Agent"), as documentary agent for the
Lenders (in such capacity, the "Documentary Agent") and as
collateral agent for the Lenders (in such capacity, the
"Collateral Agent"; the Administrative Agent, the
Documentary Agent and the Collateral Agent being,
collectively, the "Agents") and HIBERNIA NATIONAL BANK, a
national banking association ("Hibernia"), as co-agent for
the Lenders (the "Co-Agent").
WHEREAS, the Borrower and the Guarantor have requested that the
Lenders approve amendments to certain provisions of the Credit Agreement;
WHEREAS in order to induce the Lenders to amend certain
provisions of the Credit Agreement and make further advances, the Borrower
and the Guarantor are willing to grant security interests to the Collateral
Agent for the benefit of the Secured Parties (as defined below) in certain
Collateral (as defined below) and have executed a Security Agreement,
certain Mortgages and other related documents of even date herewith;
WHEREAS the Borrower and the Guarantor have agreed to make
various additional filings to perfect interests in the Collateral as soon as
practicable after the date hereof (and, in any event, not later than 45 days
hereafter);
WHEREAS the Required Lenders are willing, on the terms, subject
to the conditions and to the extent set forth below, to amend such
provisions; and
WHEREAS capitalized terms used and not otherwise defined herein
shall have the meanings assigned to them in the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto
hereby agree, on the terms and subject to the conditions set forth herein,
as follows:
SECTION 1. Amendments. Effective as of the Amendment Effective
Date (as defined in Section 3 hereof), the Credit Agreement is hereby
amended as follows:
(a) The preamble is amended by deleting the figure "$100,000,000"
in the last sentence of the second paragraph thereof and inserting in lieu
thereof the figure "$64,500,000".
(b) Schedule II to the Credit Agreement is replaced with Schedule
II attached hereto. Each of Schedules V, VI, VII, VIII, IX and X and
Exhibit A-1 attached hereto shall become Schedules V, VI, VII, VIII, IX and
X and Exhibit A-1 respectively, to the Credit Agreement. Schedule I to the
Credit Agreement is deleted in its entirety.
(c) The following definitions are added to Section 1.01 in their
appropriate alphabetical position:
"Amendment" means the Amendment to this Agreement dated as
of August 11, 2000.
"Amendment Effective Date" is defined in Section 3 of the
Amendment.
"Buy-Out" means the prepayment and satisfaction in full of
the Borrower's deferred purchase price obligations owed to Devon
Energy pursuant to Section 2.7(a) of the Asset Purchase Agreement
dated October 22, 1994 between Freeport-McMoRan Resource Partners,
Limited Partnership and Pennzoil Company (a predecessor to Devon
Energy).
"Casualty" shall mean any casualty or insured damage to any
portion of any Mortgaged Property.
"Casualty Proceeds" shall mean all insurance proceeds,
damages, claims and rights of action under any insurance policies with
respect to any Casualty.
"Closure Costs" means (i) the termination and closure costs
associated with the suspension of the Main Pass Sulphur Operations,
including costs with respect to severance, environmental and other
obligations associated with such suspension, (ii) severance costs with
respect to the Port Sulphur, Louisiana terminal and (iii) the cost of
the Buy-Out.
"Collateral" shall mean all the "Collateral" as defined in
any Security Document and shall also include the Mortgaged Property.
"Collateral Agent" shall mean The Chase Manhattan Bank, in
its capacity as collateral agent.
"Collateral Requirement" means the requirement that:
(a) on or prior to the Amendment Effective Date, the
Security Agreement shall have been duly executed by the
Borrower and the Guarantor and shall have been delivered to
the Collateral Agent and shall be in full force and effect
on such date and each document (including each Uniform
Commercial Code financing statement) required by law or
reasonably requested by the Administrative Agent to be
filed, registered or recorded in order to create in favor
of the Collateral Agent for the benefit of the Secured
Parties a valid, legal and perfected first-priority
security interest in and lien on the Collateral (subject to
any Lien expressly permitted by Section 5.02(d)) described
in such agreement shall have been delivered to the
Collateral Agent;
(b) on or prior to the Amendment Effective Date, all
outstanding equity interests in McMoRan Oil & Gas LLC and
Freeport-McMoRan Sulphur LLC and all outstanding equity
interests in each Restricted Subsidiary owned by the
Borrower or the Guarantor shall have been pledged pursuant
to the Security Agreement (except that the Borrower and the
Guarantor shall not be required to pledge more than 65% of
the outstanding voting equity interests of any foreign
Subsidiary) and the Collateral Agent shall have received
any certificates or other instruments representing all such
equity interests, together with undated stock powers or
other instruments of transfer with respect thereto duly
endorsed in blank;
(c) on or prior to the Amendment Effective
Date,(i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or
reasonably requested by the Collateral Agent to be filed,
registered or recorded to create the Liens intended to be
created by the Security Documents and to perfect such Liens
to the extent required by, and with the priority required
by, the Security Documents, shall have been delivered to
the Collateral Agent for filing, registration or recording,
and (ii) the Collateral Agent shall have received such
legal opinions of special and local counsel as the
Collateral Agent or the Required Lenders may reasonably
request with respect to the creation and perfection of the
Liens intended to be created by the Security Documents, in
form and substance satisfactory to the Collateral Agent and
its counsel. It is understood and agreed that, in addition
to Uniform Commercial Code financing statements, post-
closing filings under 46 U.S.C. 31301 et seq. (the "Ship
Mortgage Act") will be made as soon as practicable, but in
no event later than 45 days following the Amendment
Effective Date.
(d) On or prior to the Amendment Effective Date, (i)
each Mortgage, in form and substance satisfactory to the
Lenders, relating to each of the Mortgaged Properties shall
have been duly executed by the parties thereto and
delivered to the Collateral Agent and shall be in full
force and effect, (ii) each of such Mortgaged Properties
shall not be subject to any Lien other than those permitted
under Section 5.02(d), (iii) each of such Security
Documents shall have been filed and recorded in the
recording office as specified on Schedule VIII (or a
lender's title insurance policy, in form and substance
acceptable to the Collateral Agent, insuring such Security
Document as a first lien on such Mortgaged Property
(subject to any Lien permitted by Section 5.02(d)) shall
have been received by the Collateral Agent) and, in
connection therewith, the Collateral Agent shall have
received evidence satisfactory to it of each such filing
and recordation and (iv) the Collateral Agent shall have
received such other documents, including a policy or
policies of title insurance issued by a nationally
recognized title insurance company, together with such
endorsements, coinsurance and reinsurance as may be
requested by the Collateral Agent and the Lenders, insuring
the Mortgages as valid first liens on the Mortgaged
Properties, free of Liens other than those permitted under
Section 5.02(d), together with such surveys, abstracts,
appraisals and legal opinions required to be furnished
pursuant to the terms of the Mortgages or as reasonably
requested by the Collateral Agent or the Lenders; provided
that the obligations set forth in clauses (iii) and (iv)
hereof, to the extent unable to be satisfied prior to the
Amendment Effective Date, may be satisfied as soon as
practicable but in no event later than (i) with respect to
the Mortgage filings, 10 days following the Amendment
Effective Date and (ii) with respect to the title insurance
policies (including a new survey to delete the survey
exception from such policies), 45 days following the
Amendment Effective Date.
(e) On or prior to the Amendment Effective Date, the
Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies
required by Section 5.01 and the applicable provisions of
the Security Documents, each of which shall be endorsed or
otherwise amended to include a "standard" or "New York"
lender's loss payable endorsement and to name the
Collateral Agent as additional insured, in form and
substance satisfactory to the Administrative Agent.
(f) On or prior to the Amendment Effective Date, the
Lenders shall be satisfied as to the amount and nature of
any environmental and employee health and safety exposures
to which either of the Borrower or the Guarantor may be
subject and the plans of such Borrower or Guarantor with
respect thereto.
With respect to any property or asset of the Borrower or the
Guarantor which is subject to a prohibition on granting a lien or
security interest, the Borrower or the Guarantor, as applicable,
shall use its best efforts to obtain all required consents to
permit such property and assets to become subject to liens and
security interests under the Security Documents as soon as
practicable (and, in any event, within 45 days after the
Amendment Effective Date). Notwithstanding the foregoing, with
respect to any assets of the Borrower or the Guarantor consisting
of real property, intellectual property, railroad cars or ocean
going vessels, in the event that the requirements of clauses (c)
and (d) above are not satisfied by the Amendment Effective Date
with respect to such assets, the Collateral Requirement shall not
be deemed to be unsatisfied so long as the Borrower and the
Guarantor are exercising their best efforts to satisfy such
requirements; provided that the requirements of clauses (c) and
(d) above are satisfied with respect to each such asset by the
date that is 45 days after the Amendment Effective Date (or, if
not satisfied with respect to assets which are subject to (i) the
Deed of Trust, Mortgage, Security Agreement and Financing
Statement, dated as of January 3, 1995, from Freeport-McMoRan
Resource Partners Limited, Limited Partnership, to Xxxxx X.X.
Xxxxxx, Xx., as trustee, and Pennzoil Company, or (ii) the Lease
Agreement between Tampa Port Authority and Freeport-McMoRan
Sulphur LLC dated January 1, 2000, by such date despite best
efforts of the Borrower and the Guarantor to obtain required
waivers and consents, the Borrower and the Guarantor continue to
use best efforts to provide such mortgages, liens and security
interests as soon as practicable thereafter). The Borrower, the
Guarantor, the Agents and the Lenders agree that, notwithstanding
the performance of certain procedures with respect to Collateral
after the Amendment Effective Date, the various liens and
security interests are intended to be granted substantially
contemporaneously with the extension of credit under this
Agreement (and that the grace period is extended solely as a
convenience to the Borrower and the Guarantor).
"Condemnation" shall mean the institution of any
action or proceeding for the taking of any Mortgaged Property, or
any part thereof or interest therein, for public or quasi-public
use under the power of eminent domain, by reason of any public
improvement or condemnation proceeding, or in any other manner.
"Condemnation Proceeds" shall mean all proceeds of any
Condemnation.
"Main Pass Sulphur Operations" means the businesses
and operations of the Borrower to the extent relating to the
exploration, production, development and processing only of
sulphur allocable to the Borrower's sulphur and salt lease
bearing serial number OCS-G9372, granted effective May 1, 1998 by
the United States Department of the Interior, Minerals Management
Services, as lessor, to Freeport-McMoRan Resource Partners,
Limited Partnership, IMC Fertilizer, Inc. and Felmont Oil
Corporation as lessees, covering all of Block 299, Main Pass
Area, South and East Addition, OCS Leasing Map, Louisiana Map No.
10A.
"Mortgage" means a mortgage or deed of trust in form
and substance satisfactory to the Collateral Agent and its
counsel.
"Mortgaged Property" means the real property fee and
leasehold estates listed on Schedule V.
"Non-Operative Asset" means any asset of the Borrower,
the Guarantor or any Restricted Subsidiary which is not related
to the normal business operations of such Person or is obsolete
and worn-out property or real estate not used or useful in the
business of such Person.
"Perfection Certificate" has the meaning assigned to
such term in the Security
Agreement.
"Sale Date" means the date of receipt of the Net
Proceeds from the sale or other disposition of the Sulphur
Services Business.
"Secured Parties" shall have the meaning assigned to
such term in any Security Document.
"Security Agreement" means the Security Agreement
among the Borrower, the Guarantor and the Collateral Agent for
the benefit of the Secured Parties, substantially in the form of
Exhibit A-1.
"Security Documents" means the Security Agreement, the
Mortgages and each other agreement or instrument executed and
delivered to secure the Obligations.
"Sulphur Services Business" means the sulphur
businesses and operations of the Borrower to the extent not
already included in the description set forth in the definition
of "Main Pass Sulphur Operations' and not including the business
and operations of the Borrower in connection with the Xxxxxxxxx,
Grand Isle, Caminada and Grand Ecaille properties.
(d) The definition of "Agents" in the preamble to the
Credit Agreement is hereby amended by inserting the text "and Chase,
as collateral agent for the Lenders (in such capacity, the "Collateral
Agent")" after the text "Documentary Agent".
(e) Each of the following definitions in Section 1.01 is
amended and restated in its entirety as follows:
"Applicable Margin" means (a) with respect to any LIBO
Rate Loan, 2.00%, (b) with respect to any Reference Rate Loan,
1.00%, and (c) with respect to the Commitment Fees, 0.50%.
"Loan Documents" means the Amendment, the Credit
Agreement, the Security Documents and all other agreements,
certificates and instruments now or hereafter entered into in
connection therewith or in furtherance thereof, in each case as
amended and modified from time to time.
"Maturity Date" means the earliest of (i) April 30,
2001, (ii) the Sale Date and (iii) the date of termination of the
Commitments pursuant to the terms hereof.
"Net Proceeds" means (i) the gross fair market value
of the consideration or other amounts payable to or receivable by
the Borrower, the Guarantor, or any of the Restricted
Subsidiaries in respect of any sales, transfers, distributions or
other dispositions (including by merger or consolidation) of
assets or properties (including any capital or other equity
interests owned), less (ii) the amount, if any, of all taxes (but
only to the extent such Person reasonably estimates that such
taxes will be paid on the date of the next tax filing by such
Person or such Affiliate of such Person), and reasonable and
customary fees, commissions, costs and other expenses (other than
those payable to the Guarantor, the Borrower or any of the
Restricted Subsidiaries) which are incurred in connection with
such sales, transfers, distributions or other dispositions and
are payable by the seller or the transferor (or an Affiliate of
the seller or the transferor) of the assets or property to which
such sales, transfers, distributions or other dispositions
relate, but only to the extent not already deducted in arriving
at the amount referred to in clause (i).
(f) Section 2.07(b) is amended and restated in its entirety
as follows:
(b) In the event and on each occasion that any Net
Proceeds are received by or on behalf of the Borrower, the
Guarantor or any Restricted Subsidiary in respect of any asset
disposition (including any sale, transfer or other disposition of
any asset of such Person (other than a disposition of inventory
in the ordinary course of business)) on or after the Amendment
Effective Date by the Borrower the Guarantor, or any Restricted
Subsidiary, the Total Commitments shall be permanently reduced by
an amount equal to such Net Proceeds (and Loans repaid so that
amounts outstanding do not exceed Total Commitments); provided,
however, that up to $4,500,000 of Net Proceeds from the sale of
the Xxxxxxxxx and Grand Isle properties may be received by or on
behalf of the Borrower without any reduction of Total
Commitments; provided further, however, that, the aggregate
reduction in Total Commitments pursuant to this paragraph with
respect to dispositions of Non-Operative Assets shall be limited
to (A) 50% of the amount by which the aggregate cumulative Net
Proceeds from all dispositions of Non-Operative Assets on or
after the Amendment Effective Date exceed $1,000,000 but are less
than $5,000,000 and (B) 100% of the amount by which the aggregate
cumulative Net Proceeds from all dispositions of Non-Operative
Assets on or after the Amendment Effective Date exceed
$5,000,000. The Commitment reductions required by this Section
2.07(b) shall be effective as of the date of closing or
effectiveness of any transaction subject hereto.
(g) A new Section 2.07(d) shall be inserted in its
entirety as follows:
In the event that there shall occur any Casualty or
Condemnation and the Borrower or the Guarantor receives any
Casualty Proceeds or Condemnation Proceeds, as the case may be,
then the Total Commitments shall be permanently reduced by an
amount equal to such Casualty Proceeds or Condemnation Proceeds
(and Loans repaid so that amounts outstanding do not exceed Total
Commitments), provided, however, that the Total Commitments shall
not be reduced (i) to the extent Casualty Proceeds or
Condemnation Proceeds, individually or in the aggregate, are less
than $3,000,000 in any 12-month period and the Borrower or the
Guarantor, as applicable, has advised the Agents in writing that
such proceeds shall be applied to the rebuilding or replacement
of the damaged, destroyed or condemned assets or property and the
Borrower or the Guarantor in fact uses such proceeds to rebuild
or replace such assets or property within 360 days following
receipt of such proceeds, with the Total Commitments being
reduced by the amount of such unused proceeds after such 360-day
period; or (ii) in the event that the Casualty Proceeds or
Condemnation Proceeds, individually or in the aggregate, equal or
exceed $3,000,000 in any 12-month period and the Borrower or the
Guarantor has requested in writing that the Required Lenders
consent to the intended use of such proceeds and the Required
Lenders have consented to such use. The Commitment reductions
required by this Section 2.07(d) shall be effective as of the
date of receipt of any Casualty Proceeds or Condemnation
Proceeds, as the case may be.
(h) Section 3.01(b) is amended by inserting the words
"other than any Lien created hereunder or under the Security
Documents" at the end thereof.
(i) Section 3.01(e) is amended and restated in its entirety
as follows:
(e) Financial Statements. The Guarantor has
heretofore furnished to each of the Lenders (i) an audited
consolidated balance sheet and consolidated statements of
operations, stockholder's equity and cash flows of it and its
Subsidiaries (including the Borrower and its Subsidiaries) as of
and for the fiscal year ended December 31, 1999 and (ii)
unaudited consolidated balance sheets of the Guarantor and its
Subsidiaries (including the Borrower and its Subsidiaries) for
each of the fiscal quarters ending on March 31, 2000 and on
June 30, 2000 and related consolidated statements of operations
and cash flows for each of the periods commencing with January 1,
2000 and ending on each of March 31, 2000 and June 30, 2000 (and
separated unaudited consolidated balance sheets and related
consolidated statements of operations and its Subsidiaries
excluding the effect of Nonrestricted Subsidiaries). All such
financial statements present fairly the financial condition and
results of operations of the Guarantor and its Subsidiaries as of
the dates and for the periods indicated. Such financial
statements and the notes thereto disclose all material
liabilities, direct or contingent, of the Guarantor and its
consolidated Subsidiaries as of the dates thereof which are
required to be disclosed in the footnotes to financial statements
prepared in accordance with GAAP. The financial statements
referred to in this Section 3.01(e) have been prepared in
accordance with GAAP. There has been no material adverse change
since (i) June 30, 2000, in the businesses, assets, operations,
prospects or condition, financial or otherwise, of the Borrower
and its Subsidiaries, taken as a whole, and (ii) June 30, 2000,
in the businesses, assets, operations, prospects or condition,
financial or otherwise, of the Guarantor.
(j) Section 3.01(f) is amended by inserting the following
text at the end thereof:
Certificates of occupancy and permits are in effect for
each Mortgaged Property as currently constructed.
(k) Section 3.01(g) is amended by inserting the following
text at the end thereof:
Neither the Borrower nor the Guarantor has received any
notice of, nor has any knowledge of, any pending or contemplated
condemnation proceeding affecting any Mortgaged Property or any
sale or disposition thereof in lieu of condemnation. Neither the
Borrower nor the Guarantor is obligated under any right of first
refusal, option or other contractual right to sell, assign or
otherwise dispose of any Mortgaged Property or any interest
therein.
(l) Section 3.01(h)(iii) is amended and restated in its
entirety as follows:
(iii) The Borrower (A) will use the proceeds of all
Loans made to it before the Amendment Effective Date for the
funding of capital expenditures, working capital and general
corporate purposes, (B) will use up to $55,000,000 of the
proceeds of Loans made to it on or after the Amendment Effective
Date for working capital (including (i) transaction costs
relating to the Amendment and (ii) up to $3,000,000 for the
repayment of advances made to the Borrower or the Guarantor by
McMoRan Oil & Gas LLC to the extent such advances are made on or
after August 9, 2000 and on or before the Amendment Effective
Date) and to pay for Closure Costs and (C) will use any proceeds
of Loans made to it on or after the Amendment Effective Date that
exceed $55,000,000 solely to finance the Buy-Out.
(m) A new Section 3.01(q) shall be inserted after
Section 3.01(p):
(q) Security Documents. (i) The Security Agreement is
effective to create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral and, when
financing statements in appropriate form are filed in the offices
specified on the Perfection Certificate, the Security Agreement
shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the grantors thereunder in
such Collateral, in each case prior and superior in right to any
other Person, other than with respect to Liens expressly
permitted by Section 5.02(d).
(ii) The Mortgages are effective to create in favor of
the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable Lien on all of the
respective mortgagee's right, title and interest in and to the
Mortgaged Property thereunder and the proceeds thereof, and when
the Mortgages are filed in the offices specified on
Schedule VIII, the Mortgages shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest
of such mortgagee in such Mortgaged Property and the proceeds
thereof, in each case prior and superior in right to any other
Person, other than with respect to the rights of Persons pursuant
to Liens expressly permitted by Section 5.02(d) or Liens listed
as exceptions on the applicable title insurance policy.
(n) A new Section 3.01(r) shall be inserted after
Section 3.01(q):
(r) Property Addresses. (i) Schedule IX lists
completely and correctly as of the Amendment Effective Date all
real property owned by the Borrower and the Guarantor and the
addresses thereof. The Borrower and the Guarantor own in fee all
the real property set forth on Schedule IX.
(ii) Schedule X lists completely and correctly as of
the Amendment Effective Date all real property leased by the
Borrower and the Guarantor and the addresses thereof. The
Borrower and the Guarantor have valid leases in all the real
property set forth on Schedule X.
(o) Section 5.01(i) is amended by inserting the text "(A)"
at the beginning thereof and by inserting the following text at the
end thereof:
(B) Each of the Borrower and the Guarantor shall, and the
Guarantor shall cause each of the Restricted Subsidiaries to,
cause all such policies covering any Collateral to be endorsed or
otherwise amended to include a "standard" or "New York" lender's
loss payable endorsement, in form and substance satisfactory to
the Collateral Agent, which endorsement shall provide that, from
and after the Amendment Effective Date, if the insurance carrier
shall have received written notice from the Administrative Agent
or the Collateral Agent of the occurrence of an Event of Default,
the insurance carrier shall pay all proceeds otherwise payable to
the Borrower or the Guarantor under such policies directly to the
Collateral Agent; cause all such policies to provide that neither
the Borrower, the Administrative Agent, the Collateral Agent nor
any other party shall be a coinsurer thereunder and to include
coverage on a replacement cost basis, without any deduction for
depreciation, and such other provisions as the Administrative
Agent or the Collateral Agent may reasonably require from time to
time to protect their interests; deliver original or certified
copies of all such policies to the Collateral Agent; cause each
such policy to provide that it shall not be canceled, materially
modified or not renewed (i) by reason of nonpayment of premium
upon not less than 10 days' prior written notice thereof by the
insurer to the Administrative Agent and the Collateral Agent
(giving the Administrative Agent and the Collateral Agent the
right to cure defaults in the payment of premiums) or (ii) for
any other reason upon not less than 30 days' prior written notice
thereof by the insurer to the Administrative Agent and the
Collateral Agent; deliver to the Administrative Agent and the
Collateral Agent, prior to the cancellation, material
modification or nonrenewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Administrative
Agent and the Collateral Agent) together with evidence
satisfactory to the Administrative Agent and the Collateral Agent
of payment of the premium therefor.
(C) Each of the Borrower and the Guarantor shall, and the
Guarantor shall cause each of the Restricted Subsidiaries to, if
at any time the area in which the Premises (as defined in the
Mortgages) are located is designated (i) a "flood hazard area" in
any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), obtain flood
insurance in such total amount as the Administrative Agent, the
Collateral Agent or the Required Lenders may from time to time
reasonably require, and otherwise comply with the National Flood
Insurance Program as set forth in the Flood Disaster Protection
Act of 1973, as it may be amended from time to time, or (ii) a
"Zone 1" area, obtain earthquake insurance in such total amount
as the Administrative Agent, the Collateral Agent or the Required
Lenders may from time to time require. Such flood or earthquake
coverage may be included on policies insuring other perils.
(D) Each of the Borrower and the Guarantor shall, and the
Guarantor shall cause each of the Restricted Subsidiaries to,
with respect to any Mortgaged Property, carry and maintain
comprehensive general liability insurance including the "broad
form CGL endorsement" and coverage on an occurrence basis against
claims made for personal injury (including bodily injury, death
and property damage) and umbrella liability insurance against any
and all claims, in no event for a combined single limit of less
than $25,000,000, naming the Collateral Agent as an additional
insured, on forms reasonably satisfactory to the Collateral
Agent.
(E) Each of the Borrower and the Guarantor shall, and the
Guarantor shall cause each of the Restricted Subsidiaries to,
notify the Administrative Agent and the Collateral Agent
immediately whenever any separate insurance concurrent in form or
contributing in the event of loss with that required to be
maintained under this Section 5.01 is taken out by the Borrower;
and promptly deliver to the Administrative Agent and the
Collateral Agent the certificates of insurance.
(p) Section 5.01(l) is amended by inserting the words "and
to satisfy the Collateral Requirement" after the words "and the other
Loan Documents" and immediately before the period at the end of such
Section. Section 5.01(l) is further amended by inserting the
following text at the end thereof:
Without limiting the foregoing, each of the Borrower and
the Guarantor shall, and the Guarantor shall cause its Restricted
Subsidiaries to, execute any and all further documents, financing
statements, agreements and instruments, and take all further
action (including filing Uniform Commercial Code and other
financing statements, mortgages and deeds of trust) that may be
required in order to grant, preserve, protect and perfect the
validity and first priority of the security interests created or
intended to be created by the Security Documents. The Borrower
and the Guarantor agree to, and the Guarantor shall cause its
Restricted Subsidiaries to, provide such evidence as the
Collateral Agent shall reasonably request as to the perfection
and priority status of each such security interest and Lien.
(q) Section 5.01(n) and Section 5.01(o) are hereby inserted
in their entirety as follows:
(n) Information Regarding Collateral. (i) Each of the
Borrower and the Guarantor shall, and the Guarantor shall cause
its Restricted Subsidiaries to, furnish to the Administrative
Agent prompt written notice of any change (a) in the Borrower's,
the Guarantor's or any of the Guarantor's Restricted
Subsidiaries' corporate name or in any trade name used to
identify any of them in the conduct of its business or in the
ownership of its properties, (b) in the location of the
Borrower's, the Guarantor's or any of the Guarantor's Restricted
Subsidiaries' chief executive office, their principal place of
business, any office in which they maintain books or records
relating to Collateral owned by them or any office or facility at
which Collateral owned by any of them is located (including the
establishment of any such new office or facility), (c) in the
Borrower's, the Guarantor's or any of the Guarantor's Restricted
Subsidiaries' identity or corporate structure or (d) in the
Borrower's, the Guarantor's or any of the Guarantor's Restricted
Subsidiaries' Federal Taxpayer Identification Numbers. The
Borrower, the Guarantor, and each of the Guarantor's Restricted
Subsidiaries agree not to effect or permit any change referred to
in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in
order for the Collateral Agent to continue at all times following
such change to have a valid, legal and perfected security
interest in all the Collateral. The Borrower, the Guarantor, and
each of the Guarantor's Restricted Subsidiaries also agree
promptly to notify the Administrative Agent if any material
portion of the Collateral is damaged or destroyed.
(ii) Each year, at the time of delivery of the annual
financial statements with respect to the preceding fiscal year
pursuant to Section 5.01(a), each of the Borrower and the
Guarantor shall deliver to the Administrative Agent a certificate
of a Financial Officer setting forth the information required
pursuant to Section 2 of the Perfection Certificate or confirming
that there has been no change in such information since the date
of the Perfection Certificate delivered on the Amendment
Effective Date or the date of the most recent certificate
delivered pursuant to this Section 5.01.
(o) Information Regarding Litigation, Sale of Sulphur
Services Business. (i) The Borrower shall keep the Lenders
informed of any and all developments with respect to lawsuit No.
462776 (Freeport-McMoRan Sulphur LLC versus IMC-Agrico Company
(now IMC Phosphates Company)).
(ii) The Borrower will immediately notify the Lenders in
writing of any event or condition reasonably likely to result in
a material adverse impact on the ability of the Borrower to
dispose of the Sulphur Services Business or any of its asset
components.
(r) Section 5.02(c) is amended and restated in its entirety
as follows:
(c) Consolidation or Merger; Disposition of Assets
and Capital Stock. Neither the Borrower nor the Guarantor shall,
and the Guarantor shall not permit any Restricted Subsidiary to,
merge into or consolidate with any other Person or permit any
other Person to merge into or consolidate with it, or sell,
lease, transfer or otherwise dispose of any of its assets,
including any capital stock or other ownership interests of the
Borrower or any Restricted Subsidiary, except for (i)
dispositions of inventory in the ordinary course of business,
(ii) disposition of the Xxxxxxxxx and Grand Isle properties,
(iii) subject to Sections 5.02(l) and (m), dispositions of assets
by the Borrower, the Guarantor or a Restricted Subsidiary to
another Restricted Subsidiary, the Borrower or the Guarantor,
(iv) investments in Permitted Investments and dispositions
thereof; and except that:
(A) the Borrower, the Guarantor or any Restricted
Subsidiary may merge or liquidate any other Person into
itself;
(B) any Restricted Subsidiary may be merged into any
other Person; provided that such other Person, immediately
following such merger, shall be deemed a Restricted
Subsidiary;
(C) the Borrower or any Restricted Subsidiary may
make, subject to Section 2.07(b), dispositions of (i) Non-
Operative Assets and (ii) the Sulphur Services Business,
provided that if the Sulphur Services Business is sold or
otherwise disposed of, the Net Proceeds thereof shall be in
a sufficient amount to reduce the Total Commitments to zero
and to prepay all outstanding Loans pursuant to Section
2.07(b);
(D) FSC may merge with and into Sulphur LLC pursuant
to the terms and conditions of the FSC Merger; and
(E) the Guarantor may sell or otherwise dispose of
(including by merger or consolidation) any assets of or any
securities of any Nonrestricted Subsidiary;
provided, however, that in the case of a merger permitted by
clause (A) above, immediately after giving effect thereto, the
Borrower, the Guarantor or, as the case may be, a Restricted
Subsidiary would be the surviving Person and, in the case of a
merger permitted by clause (A) or (B) above or of any disposition
of assets or securities permitted by clause (C) above, no Default
or Event of Default would, immediately after and giving effect
thereto, have occurred and be continuing. Each sale or other
disposition permitted by clause (C) above shall be permitted only
if the Borrower or the Restricted Subsidiary shall receive fair
consideration therefor, as determined by the Board of Directors
of the Borrower or of such Restricted Subsidiary, as the case may
be, and certified by its Treasurer or another of its Financial
Officers to the Administrative Agent.
(s) Each of clauses (ii) and (iii) of Section 5.02(d) is
deleted and the following is inserted in lieu thereof:
(ii) Liens granted to Homestake Sulphur Company (successor
in interest to Felmont Oil Corporation) with respect to (x)
that certain sulphur and salt lease bearing serial number
OCS-G 9372 and related properties and interests,(y) that
certain oil and gas lease bearing serial number OCS-G 12362
and related properties and interests, and (z) the proceeds
of each of the foregoing.
(iii) Deposits to secure the performance of letters of
credit, surety and appeal bonds, performance bonds and
other similar arrangements in connection with the Buy-Out
in an aggregate amount not to exceed $3,500,000.
(t) Section 5.02(e) is amended and restated in its
entirety as follows:
(e) Minimum EBITDA. The Guarantor shall not permit
the sum of the EBITDA for the fiscal quarter ending September 30,
2000 plus the EBITDA for the fiscal quarter ending December 31,
2000 to be less than $6,000,000
(u) Section 5.02(f) is deleted and the following is
inserted in lieu thereof:
(f) [intentionally omitted]
(v) Section 5.02(g) is amended and restated in its
entirety as follows:
(g) Debt. Neither the Borrower, the Guarantor, nor
any Restricted Subsidiary shall incur, create, assume or permit
to exist any Debt of any of them except:
(i) the Loans;
(ii) Debt existing on the Amendment Effective Date and set
forth on Schedule VI;
(iii) unsecured loans and advances between the Restricted
Subsidiaries, to any Restricted Subsidiary from the
Borrower or the Guarantor, to the Borrower from any
Restricted Subsidiary or the Guarantor and to the Guarantor
from the Borrower or any Restricted Subsidiary; and
(iv) unsecured Debt of the Borrower to any Nonrestricted
Subsidiary; provided that (A) such Debt shall not require
any payment of principal, interest, fees or any other
amounts until a date later than the later of (x) August 2,
2001 and (y) the date that is 91 days after the Maturity
Date and (B) such Debt is subordinated to the Obligations
on terms satisfactory to the Required Lenders;
(w) Section 5.02(j) is amended and restated in its entirety
as follows:
(j) Investments in Nonrestricted Subsidiaries and
Persons Not Subsidiaries. Neither the Guarantor, the Borrower
nor any of the Restricted Subsidiaries shall make or permit to
exist any Guarantee by it or a Restricted Subsidiary of the Debt
of any Person which is not a Restricted Subsidiary, including
Nonrestricted Subsidiaries (each such Person being a "Third
Party") or any loans or advances to, any purchase of stock, other
securities or evidences of indebtedness of, or any investment
(whether by transfer of assets or otherwise) or acquisition of
any investment whatsoever in or any other payment for the benefit
of, any Third Parties except:
(i) repayment of up to $3,000,000 of advances made to
the Borrower or the Guarantor by McMoRan Oil & Gas LLC to
the extent such advances are made on or after August 9,
2000 and on or before the Amendment Effective Date;
(ii) the investments existing on the Amendment
Effective Date and set forth on Schedule VII; and
(iii) Permitted Investments.
(x) Section 5.02(n) is amended and restated in its entirety
as follows:
(n) Equity Payments. Neither the Borrower nor the
Guarantor shall make any Equity Payment.
(y) A new Section 5.02(p) is inserted following Section
5.02(o) and shall read as follows:
(p) Use of Proceeds. The Borrower will not use the
proceeds of Loans other than for the purposes described in
Section 3.01(h)(iii) and in the amounts therein specified.
(z) Section 7.01(m) is amended by replacing the period at
the end thereof with the text "; and".
(aa) Sections 7.01(n) and (o) are inserted in their
entirety as follows:
(n) any security interest purported to be created by any
Security Document shall cease to be, or shall be asserted by the
Borrower or the Guarantor not to be, a valid, perfected, first
priority (except as otherwise expressly provided in this
Agreement or such Security Document) security interest in the
assets or properties covered thereby, except to the extent that
such loss is covered by a lender's title insurance policy and the
related insurer promptly after such loss shall have acknowledged
in writing that such loss is covered by such title insurance
policy; and
(o) the requirements of clauses (c) and (d) of the
definition of "Collateral Requirement" shall not have been
satisfied within 45 days after the Amendment Effective Date.
(bb) The proviso in the second to last sentence of Section
7.01 is amended and restated in its entirety as follows:
provided, however, that upon the occurrence of any event
described in clause (g), (h) or (o) of this Section 7.01 as to
which the Borrower or the Guarantor is the entity involved, the
Commitments will forthwith terminate and all sums then owing by
the Borrower to the Lenders on the Loans or otherwise hereunder
shall, without any declaration or other action by any Lender or
Agent hereunder, be immediately due and payable and the Total
Commitment hereunder shall be immediately terminated without
presentment, demand, protest or other notice of any kind, all of
which are expressly waived by the Borrower, anything contained
herein or in any other Loan Document to the contrary
notwithstanding.
(cc) The first sentence of Subsection (a) of Article VIII
is amended by inserting the text "and Collateral Agent" after the text
"Documentary Agent".
(dd) Subsection (a) of Article VIII is further amended by
inserting the following text at the end thereof:
Without limiting the generality of the foregoing, the
Agents are hereby expressly authorized to execute any and all
documents (including releases) with respect to the Collateral and
the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this
Agreement and the Security Documents.
(ee) Section 10.07(b) is amended by inserting the
following clause (v):
"or, (v) release all or any substantial part of the
Collateral, without the written consent of each Lender;"
SECTION 2. Representations and Warranties. Each of the
Borrower and the Guarantor represents and warrants to each of the
Lenders that, after giving effect to the amendments contemplated
hereby, (a) the representations and warranties of the Borrower or the
Guarantor, as applicable set forth in the Loan Documents are true and
correct in all material respects on and as of the date of this
Amendment, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects as of the earlier date) and (b) no Default or Event
of Default has occurred and is continuing.
SECTION 3. Effectiveness. This Amendment shall become
effective as of the first date (the "Amendment Effective Date") when
the following conditions are satisfied:
(a) The Administrative Agent (or its counsel) shall
have received duly executed counterparts hereof that, when taken
together, bear the signatures of each of the Borrower, the
Guarantor and the Required Lenders;
(b) The Administrative Agent shall have received, on
behalf of themselves and the Lenders, a favorable written opinion
of Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P.,
counsel for the Guarantor and the Borrower, in a form
satisfactory to the Administrative Agent and counsel to the
Administrative Agent, in each case (A) dated the Amendment
Effective Date, (B) addressed to the Agents and the Lenders, and
(C) covering such matters relating to the Loan Documents, and the
transactions contemplated thereby, as the Administrative Agent
shall reasonably request, and each of the Guarantor and the
Borrower hereby instructs such counsel to deliver such opinions.
(c) All legal matters incident to this Amendment, the
borrowings and extensions of credit under the Credit Agreement or
the other Loan Documents shall be satisfactory to the
Administrative Agent and counsel to the Administrative Agent.
(d) The Administrative Agent shall have received (i)
a copy of the articles of organization, including all amendments
thereto, of the Borrower and the certificate of incorporation,
including all amendments thereto, of the Guarantor, each
certified as of a recent date by the Secretary or Assistant
Secretary of the Borrower and the Guarantor, and a long-form good
standing certificate of each of the Borrower and the Guarantor as
of a recent date, from the Secretary of State of the state of its
organization; (ii) a certificate of the Secretary or Assistant
Secretary of each of the Borrower and the Guarantor dated the
Amendment Effective Date and certifying (A) in the case of the
Guarantor, that attached thereto is a true and complete copy of
the by-laws of the Guarantor as in effect on the Amendment
Effective Date and at all times since a date prior to the date of
the resolutions described in clause (B) below and, in the case of
the Borrower, that attached thereto is a true and complete copy
of the operating agreement of the Borrower as in effect on the
Amendment Effective Date and at all times since a date prior to
the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted
by the Board of Directors of the Guarantor, individually and in
its capacity as the sole member of the Borrower, authorizing the
execution, delivery and performance of the Loan Documents to
which the Borrower or the Guarantor is a party and the borrowings
hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that
neither the certificate of incorporation and By-laws of the
Guarantor nor the articles of organization and the operating
agreement of the Borrower have been amended since the date of the
last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above or date of the certificate
furnished pursuant to clause (i) above, as applicable, and (D) as
to the incumbency and specimen signature of each officer
executing any Loan Document or any other document delivered in
connection herewith on behalf of the Borrower and the Guarantor;
(iii) a certificate of a Responsible Officer as to the incumbency
and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above; and (iv)
such other documents as the Administrative Agent or its counsel
may reasonably request.
(e) The Agents shall have received a certificate,
dated the Amendment Effective Date and signed by a Responsible
Officer of the Guarantor, confirming compliance with the
conditions precedent set forth in paragraphs (i) and (iii) of
Section 6.01.
(f) The Administrative Agent shall have received all
fees and other amounts due and payable on or prior to the
Amendment Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder or under any
other Loan Document, such expenses to include the legal fees of
Cravath, Swaine & Xxxxx, counsel to the Agents; Xxxxxx & Xxxxxx,
special Texas counsel to the Agents; Liskow & Xxxxx, special
Louisiana counsel to the Agents; and Holland & Knight, special
Florida counsel to the Agents.
(g) The Collateral Requirement shall have been
satisfied and the Collateral Agent shall have received a
completed Perfection Certificate dated the Amendment Effective
Date and signed by a Responsible Officer of each of the Borrower
and the Guarantor, together with all attachments contemplated
thereby, including the results of a search of the Uniform
Commercial Code (or equivalent) filings made with respect to the
Borrower and the Guarantor in the jurisdictions contemplated by
the Perfection Certificate, together with copies of the financing
statements (or similar documents) disclosed by such search, and
accompanied by evidence reasonably satisfactory to the Collateral
Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by the Credit Agreement or have
been released.
SECTION 4. Amendment Fee; Duration Fee. (a) The Borrower
agrees to pay to each Lender that executes and delivers a copy of this
Amendment to the Administrative Agent (or its counsel) on or prior to
August 11, 2000 an amendment fee in an amount equal to 0.375% of such
Lender's aggregate unused Commitment and outstanding Loans as of the
Amendment Effective Date; provided that the Borrower shall have no
liability for any such amendment fee if this Amendment does not become
effective. Such amendment fee shall be payable to each Lender
entitled to receive such fee on (i) the Amendment Effective Date, in
the case of each Lender entitled to receive such fee on the Amendment
Effective Date, or (ii) the date that is two Business Days after the
date that the Administrative Agent (or its counsel) receives an
executed copy of this Amendment from such Lender, in the case of each
Lender that becomes entitled to receive such fee after the Amendment
Effective Date.
(b) The Borrower agrees to pay to each Lender a duration
fee in an amount equal to 0.375% of such Lender's aggregate unused
Commitment and outstanding Loans as of January 31, 2001; provided that
(A) this Amendment has become effective prior to January 31, 2001 and
(B) that the Commitments have not been terminated and all outstanding
Loans have not been repaid in full prior to January 31, 2001. Such
duration fee shall be payable to each Lender entitled to receive such
fee on January 31, 2001.
SECTION 5. Applicable Law. THIS AMENDMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
SECTION 6. No Other Amendments. Except as expressly set
forth herein, this Amendment shall not by implication or otherwise
limit, impair, constitute a waiver of, or otherwise affect the rights
and remedies of any party under, the Credit Agreement or any Loan
Document, nor alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in
the Credit Agreement or any Loan Document, all of which are ratified
and affirmed in all respects and shall continue in full force and
effect. Nothing herein shall be deemed to entitle the Borrower to a
consent to, or a waiver, amendment, modification or other change of,
any of the terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement or any other Loan Document in
similar or different circumstances. This Amendment shall apply and be
effective only with respect to the provisions of the Credit Agreement
specifically referred to herein.
SECTION 7. Counterparts. This Amendment may be executed
in two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute but
one contract. Delivery of an executed counterpart of a signature page
of this Amendment by facsimile transmission shall be as effective as
delivery of a manually executed counterpart of this Amendment.
SECTION 8. Headings. Section headings used herein are for
convenience of reference only, are not part of this Amendment and are
not to affect the construction of, or to be taken into consideration
in interpreting, this Amendment.
IN WITNESS WHEREOF, the Borrower, the Guarantor and the
undersigned Lenders have caused this Amendment to be duly executed by
their duly authorized officers, all as of the date first above
written.
FREEPORT-McMoRan SULPHUR LLC,
by /s/ Xxxx X. Xxxx
--------------------------
Name: Xxxx X. Xxxx
Title: Vice President & Treasurer
McMoRan EXPLORATION CO., as Guarantor,
by /s/ Xxxx X. Xxxx
--------------------------
Name: Xxxx X. Xxxx
Title: Assistant Treasurer
THE CHASE MANHATTAN BANK, individually and
as Administrative Agent, Documentary Agent
and Collateral Agent,
by /s/ Xxxxx X. Xxxxxx
-------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
HIBERNIA NATIONAL BANK,
by /s/ Xxx X. Xxxxxxx
-------------------------
Name: Xxx X. Xxxxxxx
Title: Vice President
BANK OF MONTREAL,
by /s/ Xxx X. Xxxxxxx
-------------------------
Name: Xxx X. Xxxxxxx
Title: Director
THE BANK OF NOVA SCOTIA,
by /s/ M.D. Xxxxx
-------------------------
Name: M.D. Xxxxx
Title: Agent
THE BANK OF TOYKO-MITSUBISHI, LTD.,
HOUSTON AGENCY,
by /s/ Xxxx XxXxxx
------------------------
Name: Xxxx XxXxxx
Title: Vice President & Manager
BANK ONE, LOUISIANA, NA (f/k/a First
National Bank of Commerce)
by /s/ Xxxx X. Xxxxxxxxx, XX
--------------------------
Name: Xxxx X. Xxxxxxxxx, XX
Title: Vice President
THE FUJI BANK LIMITED-HOUSTON AGENCY,
by /s/ Xxxx Xxxxx
--------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President and
Manager
MELLON BANK, N.A.,
by /s/ Xxxxxxx X. Xxxxxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Title: Lending Officer
