-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, MM3ZQv0u1MPDmMB5i/wIA9zXeyBLC3brVy45AsHlAfNECCutcZbnR9US/4DB8sdV gRg4aFIaQZgfLUEwrkNThw== 0000895345-95-000040.txt : 19950531 0000895345-95-000040.hdr.sgml : 19950531 ACCESSION NUMBER: 0000895345-95-000040 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19950522 DATE AS OF CHANGE: 19950525 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FREEPORT MCMORAN COPPER & GOLD INC CENTRAL INDEX KEY: 0000831259 STANDARD INDUSTRIAL CLASSIFICATION: 1000 IRS NUMBER: 742480931 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-41332 FILM NUMBER: 95541573 BUSINESS ADDRESS: STREET 1: ONE E FIRST ST STE 1600 STREET 2: FIRST INTERSTATE BANK BLDG CITY: RENO STATE: NV ZIP: 89509 BUSINESS PHONE: 7026883000 FORMER COMPANY: FORMER CONFORMED NAME: FREEPORT MCMORAN COPPER COMPANY INC DATE OF NAME CHANGE: 19910114 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RTZ INDONESIA LTD CENTRAL INDEX KEY: 0000945534 STANDARD INDUSTRIAL CLASSIFICATION: 0000 STATE OF INCORPORATION: X0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 6 ST JAMES S SQUARE CITY: LONDON STATE: X0 ZIP: 00000 BUSINESS PHONE: 011441719302399 MAIL ADDRESS: STREET 1: FRIED FRANK HARRIS SHRIVER & JACOBSON STREET 2: ONE NEW YORK PLAZA CITY: NEW YORK STATE: NY ZIP: 10004 SC 13D 1 SCHEDULE 13D OMB APPROVAL OMB Number: 3235-0145 Expires: October 31, 1997 Estimated average burden hours per form 14.90 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. )* FREEPORT-McMoRan COPPER & GOLD INC. (Name of Issuer) CLASS A COMMON STOCK, PAR VALUE $0.10 PER SHARE (Title of Class of Securities) 35671D 10 5 (CUSIP Number) Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attn: Allen I. Isaacson (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) MAY 12, 1995 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d- 1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [x] (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP NO. 35671D 10 5 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON RTZ INDONESIA LIMITED 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* AF, OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION ENGLAND NUMBER OF 7 SOLE VOTING POWER SHARES NONE BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 21,531,100 EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON NONE WITH 10 SHARED DISPOSITIVE POWER 21,531,100 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 25,119,617 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 28.3% 14 TYPE OF REPORTING PERSON* CO - -2- SCHEDULE 13D CUSIP No. 35671D 10 5 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON THE RTZ CORPORATION PLC 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC, AF, OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION ENGLAND NUMBER OF 7 SOLE VOTING POWER SHARES NONE BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 21,531,100 EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON NONE WITH 10 SHARED DISPOSITIVE POWER 21,531,100 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 25,119,617 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 28.3% 14 TYPE OF REPORTING PERSON* CO - -3- ITEM 1. Security and Issuer This Statement on Schedule 13D relates to the Class A Common Stock, par value $0.10 per share ("FCX Class A Common Stock"), of Freeport-McMoRan Copper & Gold Inc., a Delaware Corporation ("FCX"). The principal executive offices of FCX are located at First Interstate Bank Building, One East First Street, Suite 1600, Reno, Nevada 89501. ITEM 2. Identity and Background This Statement is being filed by RTZ Indonesia Limited ("RTZI"), a company organized under the laws of England and an indirect wholly owned subsidiary of The RTZ Corporation PLC ("RTZ"), a company organized under the laws of England, and by RTZ. (RTZI is wholly owned by R.T.Z. Overseas Holdings Limited, which is wholly owned by Overseas Minerals Limited, which is wholly owned by R.T.Z. International Holdings Limited, which is wholly owned by RTZ.) The business address of each of RTZI and RTZ is 6 St. James's Square, London SW1Y 4LD, England. RTZ and RTZI have entered into a Joint Filing Agreement, dated May 22, 1995, attached hereto as Exhibit (1). RTZ is one of the world's leading international mining companies. RTZ's substantial interests in mining include: copper, gold, iron ore, aluminum, zinc and silver in metals; coal and uranium in energy; and borates, titanium dioxide feedstock, talc, diamonds and zircon in other minerals. RTZI, which was formed to acquire the shares of FCX Class A Common Stock, is an indirect wholly owned subsidiary of RTZ. The name, business address, principal occupation or employment and citizenship of each of the directors and executive officers of RTZI and of RTZ are set forth on Schedule I and are incorporated herein by reference. During the last five years, neither RTZ nor RTZI nor, to the best knowledge of RTZ and RTZI, any of the persons listed on Schedule I hereto, (i) has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. Source and Amount of Funds or Other Consideration The total consideration for the acquisition of 21,531,100 shares of FCX Class A Common Stock is $450 million. No separate consideration was paid for the grant to RTZI by Freeport- McMoRan Inc., a Delaware corporation ("FTX"), of an option to purchase 3,588,517 shares of FCX Class A Common Stock (the "Option"). Approximately $200 million of the funds to acquire the shares of FCX Class A Common Stock acquired by RTZI came from working capital of RTZ. The balance came from the public commercial paper program of RTZ America, Inc. ("RTZA"), a Delaware corporation and wholly owned subsidiary of RTZ. (Such commercial paper is guaranteed by RTZ.) The funds from both RTZ and RTZA were then made available to RTZI through a series of intra-group transactions among RTZ and its wholly-owned subsidiaries. - -4- ITEM 4. Purpose of Transaction Purchase Agreement. Pursuant to an Agreement dated as of May 2, 1995 (the "Purchase Agreement"), between RTZI, RTZ and RTZA, on the one hand, and FTX and FCX, on the other hand, on May 12, 1995, RTZI purchased 21,531,100 shares of FCX Class A Common Stock from FTX. The Purchase Agreement also provides for certain transactions in connection with the planned restructuring of FTX and FCX described in FCX's Consent Solicitation Statement, dated February 7, 1995, pursuant to which shares of Class B Common Stock, par value $.10 per share, of FCX (the "FCX Class B Common Stock") held by FTX at the time of distribution will be distributed (the "Spin-Off") pro rata to holders of Common Stock, par value $.10 per share, of FTX (the "FTX Common Stock"). Pursuant to the terms of the Purchase Agreement, RTZI also received the Option (which, under certain circumstances, as set forth in the Purchase Agreement, must be exercised) to acquire from FTX prior to the Spin-Off up to 3,588,517 additional shares of FCX Class A Common Stock (the "Class A Common Stock"; together with the FCX Class A Common Stock, the "FCX Common Stock") at $20.90 per share. The Purchase Agreement also requires that FTX call its 6.55% Convertible Subordinated Notes, due 2001 (the "6.55% Notes"), for redemption. If requested by FTX, RTZA is required by the Purchase Agreement to make an all-cash tender offer (the "Tender Offer") for such 6.55% Notes for a price and on such other terms mutually acceptable to FTX and RTZA and to convert any such 6.55% Notes acquired in the Tender Offer into FTX Common Stock. If RTZA acquires any such FTX Common Stock and holds it at the time of the Spin-Off, it would receive shares of FCX Class B Common Stock in connection with the Spin-Off. Under certain circumstances, as set forth in the Purchase Agreement, RTZI may be required to purchase additional shares of FCX Class A Common Stock from FTX, at $20.90 per share. The maximum amount that RTZI may be required to spend with respect to such purchases is the amount equal to the aggregate redemption price (including accrued and unpaid interest) for all 6.55% Notes, reduced by the aggregate redemption price (including accrued and unpaid interest) of any 6.55% Notes previously converted into FTX Common Stock, and by other potential deductions referred to in the Purchase Agreement. Representations and Warranties and Conduct of Business Prior to and Following the Spin-Off. The Purchase Agreement provides for customary covenants of each of RTZ, RTZI, RTZA, FTX and FCX in respect of the period prior to the Spin-Off and for customary representations and warranties. In addition, FTX agreed not to sell or otherwise dispose of shares of FCX Class A Common Stock or FCX Class B Common Stock prior to the Spin-Off without the consent of RTZ for a purchase price per share of less than $20.90. Acquisition and Disposition of Shares of FCX Common Stock. Pursuant to the Purchase Agreement, RTZ, RTZA, RTZI, and their affiliates may not without the consent of FCX or FTX, as the case may be, acquire any shares of FTX's $4.375 Convertible Exchangeable Preferred Stock, par value $1.00 per share, FTX Common Stock or shares of any capital stock of FCX entitled to vote for the election of directors ("FCX Voting Stock") during the period from the date of - -5- the Purchase Agreement to the date the FCX Class B Common Stock is distributed in the Spin-Off, except as provided in the Purchase Agreement. In addition, during the five-year period following the Spin-Off (i) RTZ and RTZA may not sell, exchange, transfer or otherwise dispose of any shares of FTX Common Stock received upon conversion of the 6.55% Notes or any shares of FCX Class B Common Stock received in the Spin-Off, and (ii) RTZ, RTZA and their affiliates may not acquire shares of FCX Class B Common Stock, in each case subject to certain exceptions set forth in the Purchase Agreement. Pursuant to the Purchase Agreement, RTZI has been granted certain pre-emptive rights, subject to certain exceptions, in the event FCX issues, sells or grants shares of FCX Common Stock or securities convertible into or exchangeable for, or warrants, options or other rights to purchase, shares of FCX Common Stock, whether by public offering or otherwise. In the event that any such issuance, sale or grant does not involve a public offering and the consideration is not securities or assets of another company, RTZI will have the right to purchase (i) a proportionate number of such securities or (ii) all of such securities subject to the approval of the board of directors of FCX under certain circumstances. In the event of any such proposed issuance, sale or grant of such securities (i) in connection with any acquisition of securities or assets of another company or otherwise, or (ii) in a public offering, RTZI will have the right to purchase up to a proportionate number of such securities. Any issuance, sale or grant by FCX to RTZI pursuant to such provisions will be on terms no less favorable than that of the proposed issuance, sale or grant and, with respect to securities offered in a public offering, for a price equal to the public offering price per share. In the event of any transaction for consideration other than cash, the purchase price will be based on the public market price or, if the security is not publicly traded, will be agreed between the parties or determined by an independent appraiser. In the event RTZ and its affiliates fail to beneficially own, in the aggregate, at least 5% of the then outstanding shares of FCX Common Stock, the pre-emptive rights provisions described in the three foregoing paragraphs terminate. The Purchase Agreement provides that to the extent the transactions contemplated thereby result in RTZ or any of its affiliates becoming an "interested stockholder" as defined in the Delaware General Corporation Law 203 ("DGCL 203") of FTX or FCX, the boards of directors of FTX and FCX have approved such transactions for the purposes of DGCL 203. The Purchase Agreement also provides that, except as described above, RTZ and its affiliates will not be directly or indirectly restricted from future acquisitions of shares of FCX Voting Stock, except that approval of FCX's board of directors will be required for RTZ or its affiliates, alone or acting in concert with others, to acquire beneficial ownership of shares of FCX Voting Stock as will elect a majority of the directors of FCX. The board of directors of each of FTX and FCX has agreed pursuant to the Purchase Agreement that if FCX adopts a "rights plan," "poison pill" or other plan or arrangement which provides for the distribution to its shareholders, by way of dividend or otherwise, of shares of capital stock of FCX, warrants, options or other rights to purchase shares of capital stock of FCX, or securities convertible into or exchangeable for shares of capital stock of FCX, upon the occurrence of specified events, then any - -6- transactions between FCX and any of its affiliates, on the one hand, and RTZ and any of its affiliates, on the other hand, and any transactions by RTZ or its affiliates relating to shares of the capital stock of FCX, or warrants, options or other rights to purchase shares of capital stock of FCX, or securities convertible into or exchangeable for shares of capital stock of FCX, shall be excluded from such specified events, unless such transactions result in the acquisition by RTZ and its affiliates of beneficial ownership of shares of FCX Voting Stock as will elect a majority of the directors of FCX. The board of directors of FCX has also approved any future acquisitions by RTZ and its affiliates of FCX Voting Stock for the purposes of DGCL 203 to the extent such acquisitions do not result in the acquisition by RTZ and its affiliates of beneficial ownership of shares of FCX Voting Stock as will elect a majority of the directors of FCX. Voting and Board of Directors. The Purchase Agreement provides that following the completion of RTZI's purchase of 21,531,100 shares of FCX Class A Common Stock pursuant to the Purchase Agreement, RTZI and RTZA will have the right to nominate for submission to FCX's stockholders the number of directors which is proportionately equal to the aggregate percentage ownership of RTZI and RTZA of all outstanding shares of FCX Class A Common Stock and FCX Class B Common Stock, subject to certain limitations. FCX has agreed to include such individuals nominated by RTZA and RTZI with the directors recommended by the management of FCX and to not take any actions which may be inconsistent with, conflict with, or otherwise hinder, the election of such individuals. Pursuant to the Purchase Agreement, no later than the earlier of 60 days after the Spin-Off Date or January 2, 1996, FCX will appoint the persons nominated by RTZA and RTZI as interim directors to take office until the following stockholders' meeting or consent solicitation for the election of directors. If the number of directors of FCX is reduced to less than 10, RTZA and RTZI will have the right to nominate no less than one director to be elected by holders of FCX Class A Common Stock for submission to FCX's stockholders, provided that RTZI continues to hold substantially all of the shares of FCX Class A Common Stock purchased pursuant to the Purchase Agreement. In the event RTZ and its affiliates fail to beneficially own, in the aggregate, at least 5% of the then outstanding shares of FCX Common Stock, the rights and obligations described in the foregoing paragraph shall terminate. Pursuant to the Purchase Agreement, RTZ, RTZA and RTZI have agreed that for as long as they and their affiliates beneficially own, in the aggregate, more than 5% of the outstanding shares of FCX Voting Stock, and directors nominated by RTZA and RTZI as described in the second preceding paragraph continue to serve as directors of FCX, then RTZ, RTZA and RTZI will cause such FCX Voting Stock to (i) be represented in person or proxy at each stockholder meeting or consent solicitation, and (ii) vote its shares for the election of the slate of directors recommended by a majority of the board of directors of FCX, which will include the nominees of RTZA and RTZI. Registration Rights Agreement. Pursuant to the Purchase Agreement, FCX has entered into a Registration Rights Agreement with RTZ, RTZA and RTZI (the "FCX Registration Rights Agreement"), pursuant to which RTZ has the right to request five times that FCX effect a registered public offering of, and RTZI and RTZA have the right to participate in a registered public offering by FCX or by another stockholder by selling in such offering, shares of FCX - -7- Common Stock acquired by RTZI and RTZA pursuant to the Purchase Agreement. The rights are exercisable at any time after the earlier of the Spin-Off and December 31, 1995, and expire on December 31, 2021. Implementation Agreement. FCX and RTZ have entered into an Implementation Agreement, dated as of May 2, 1995 (the "Implementation Agreement"), pursuant to which, among other things, affiliates of FCX and FTX will enter into a Participation Agreement and a non-recourse Credit Facility in the form attached to the Implementation Agreement, subject to such changes as may be agreed. The Implementation Agreement provides that FCX will promptly establish an operating committee, one of the three members of which will be appointed by RTZ. PT-FI Joint Venture. The Participation Agreement provides for the establishment of exploration joint ventures involving the Contract of Work ("COW") held by P.T. Freeport Indonesia Company ("PT-FI"), a subsidiary of FCX. Under the exploration joint venture arrangements, an affiliate of RTZ to be organized under the laws of Indonesia ("PT-RTZ") will acquire a 40% undivided interest in the COW held by PT-FI, but excluding any interest in PT-FI's current mining and milling operations. Under the joint venture arrangements, PT-FI will establish Operating and Exploration Committees on which representatives of PT-RTZ will serve to approve exploration expenditures in the COW and PT-RTZ will pay all further exploration costs approved by the committees until PT-RTZ (or an affiliate) has paid an aggregate of $100 million in respect of exploration expenses related to the COW held by PT-FI and related to the COW held by P.T.-Irja as discussed below. By virtue of these arrangements, PT-RTZ will acquire a 40% undivided interest in future approved expansion projects in Block A of PT-FI's COW, where the existing mining and milling interests are located, and affiliates of RTZ will provide up to a maximum of $750 million of funding to develop such projects (of which up to $450 million will be provided pursuant to the non- recourse Credit Facility). Affiliates of RTZ will receive 100% of incremental cash flow attributed to the expansion projects until they have received an amount equal to the funds they have provided for approved expansion projects plus interest based on RTZ's cost of borrowing. Subsequently, the parties will share ratably in incremental cash flow with 60% to PT-FI and 40% to PT-RTZ. Future expansion projects in Block A of PT-FI's COW will exclude any interest in future production equivalent to FCX's expanded 118,000 tonnes of ore per day milling operations based on its proved and probable ore reserves as at December 31, 1994. Apart from RTZ's provision of the $750 million for Block A expansions, all costs of development projects mutually agreed upon will be shared ratably in proportion to the parties' ownership interests therein. PT-Irja Joint Venture. The Implementation Agreement provides that each of FCX and RTZ will negotiate in good faith with a view to agreeing as soon as practicable one or more agreements in respect of the COW held by P.T. Irja Eastern Minerals Corporation, an indirect subsidiary of FCX, in substantially the form of the Participation Agreement, as modified to reflect the parties' intentions as set out in the letter of intent, dated March 7, 1995, between FCX and RTZ, or otherwise to provide an alternative structure which achieves the same business - -8- objective on a mutually more favorable basis from tax, accounting, corporate and regulatory perspectives. Spanish Acquisitions. The Implementation Agreement provides that each of FCX and RTZ will negotiate in good faith with a view to agreeing as soon as practicable one or more agreements in respect of the acquisition by RTZ and its subsidiaries of a 25% interest in the Huelva smelter of Rio Tinto Minera S.A. ("RTM") and certain exploration rights of RTM and its subsidiaries in Spain at a price pro rata to FCX's cost of acquisition, or otherwise to provide an alternative structure which achieves the same business objective on a mutually more favorable basis from tax, accounting, corporate and regulatory perspectives. Alternative Structure. If the Participation Agreement does not become effective by December 31, 1996, RTZ is entitled either to terminate the Implementation Agreement or to restructure it in a specified manner with a view toward preserving equivalent financial benefits for both parties. The foregoing descriptions of the Purchase Agreement, the FCX Registration Rights Agreement and the Implementation Agreement are not intended to be complete and are qualified in their entirety by the complete text of each of such documents, all of which are incorporated herein by reference. Copies of such documents are being filed herewith as Exhibits (2), (3) and (4), respectively. ITEM 5. Interest in Securities of the Issuer (a) As of May 19, 1995, RTZ and RTZI beneficially owned 25,119,617 shares of Class A Common Stock, representing 12.2% of all shares of FCX Common Stock outstanding and 28.3% of the shares of FCX Class A Common Stock outstanding. (Such calculation is based on 85,183,908 shares of FCX Class A Common Stock issued and outstanding as of May 19, 1995, and 205,443,231 shares of FCX Common Stock issued and outstanding as of May 19, 1995, which information was provided by FCX.) Of such 25,119,617 shares of FCX Class A Common Stock beneficially owned by RTZ and RTZI, 21,531,100 shares are directly owned by RTZI and 3,588,517 shares are subject to the Option granted to RTZI. (b) RTZI has the power, and RTZ may be deemed to share the power, to vote and dispose of the 21,531,100 shares of FCX Class A Common Stock. Upon the exercise in full of the Option, RTZI would have the power, and RTZ may be deemed to share the power, to vote and dispose of an additional 3,588,517 shares of FCX Class A Common Stock. (c) Except for the purchase of 21,531,100 shares of FCX Class A Common Stock and the receipt of the Option to purchase 3,588,517 shares of FCX Class A Common Stock as set forth herein, and the other potential transactions provided for in the Purchase Agreement, no transactions in shares of FCX Class A Common Stock were effected during the past 60 days by RTZI, RTZ or any person listed on Schedule I. To the knowledge of RTZ and RTZI, none of the persons listed on Schedule I beneficially owns any shares of FCX Class A Common Stock. (d) No other person is known by RTZ or RTZI to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of FCX Class A Common Stock beneficially owned by them, except that - -9- FTX has such power and such right with respect to the shares subject to the Option, subject to the terms of the Purchase Agreement. ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer The response to Item 4 is incorporated by reference herein. Except as described in Item 4, none of RTZ or RTZI or, to the knowledge of RTZ and RTZI, any of the persons listed on Schedule I hereto, is a party to any contract, arrangement, understanding or relationship with respect to any securities of FCX. ITEM 7. Material to be Filed as Exhibits (1) Joint Filing Agreement, dated May 22, 1995, between The RTZ Corporation PLC and RTZ Indonesia Limited. (2) Agreement, dated as of May 2, 1995, by and between Freeport- McMoRan Inc. and Freeport-McMoRan Copper & Gold Inc., on the one hand, and The RTZ Corporation PLC, RTZ Indonesia Limited and RTZ America, Inc., on the other hand, including Exhibits C, D and 8.1.15 thereto, the Schedules thereto and Registration Rights Agreement entered into pursuant thereto between Freeport-McMoRan Inc., The RTZ Corporation PLC and RTZ America, Inc., dated May 12, 1995. (3) Registration Rights Agreement, dated as of May 12, 1995, between Freeport-McMoRan Copper & Gold Inc., on the one hand, and The RTZ Corporation PLC, RTZ Indonesia Limited and RTZ America, Inc., on the other hand, entered into pursuant to the Agreement referred to in (2) above. (4) Implementation Agreement, dated as of May 2, 1995, between Freeport-McMoRan Copper & Gold Inc. and The RTZ Corporation PLC, including form of Participation Agreement to be entered into between P.T. Freeport Indonesia Company and an affiliate of The RTZ Corporation PLC to be organized under the laws of Indonesia, and form of Loan Agreement to be entered into between P.T. Freeport Indonesia, Company and an affiliate of The RTZ Corporation PLC organized under the laws of England. - -10- SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: May 22, 1995 RTZ INDONESIA LIMITED By:/s/ John S. Bradley Name: John S. Bradley Title: Director RTZ CORPORATION PLC By:/s/ John S. Bradley Name: John S. Bradley Title: Secretary - -11- Schedule I DIRECTORS AND OFFICERS OF THE RTZ CORPORATION PLC ("RTZ") Executive Directors* Name Title/Principal Occupation R.P. Wilson Chief Executive of RTZ R. Adams Director of Planning and Development of RTZ C.R.H. Bull Finance Director of RTZ R.L. Clifford Mining Director of RTZ The Lord Holme of Cheltenham CBE Director of External Affairs & Human Resources of RTZ J.C.A. Leslie Mining Director of RTZ G.H. Sage Industrial Minerals Director of RTZ Officers J.S. Bradley Secretary of RTZ Each of the foregoing directors and officers of RTZ is a citizen of the United Kingdom. The business address of each is: The RTZ Corporation PLC, 6 St. James's Square, London, SW1Y 4LD, England. Non-Executive Directors Principal Business Address of Corporation in which Principal Occupation is Name Principal Occupation Conducted Sir Derek Birkin TD Non-Executive Chairman 6 St. James's Square of RTZ, a group which London, SW1Y 4LD mines metals and England industrial minerals worldwide. The Lord Alexander of Chairman of National 41 Lothbury, Weedon QC Westminster Bank PLC, a London, EC2P 2BP London based group which England provides an extensive range of banking and financial services, both domestic and international. The Lord Armstrong of Non-Executive director of New Court Ilminster GCB CVO N M Rothschild & Sons St. Swithin's Lane Limited, a UK merchant London, EC4P 4DU, bank. England - -12- R.V. Giordano KBE Chairman of British Gas Rivermill House, plc, a group which 152 Grosvenor Road, purchases, transmits, London, SW1V 3JL, distributes and supplies England gas in the UK. Sir Denys Henderson Chairman of The Rank 6 Connaught Place Organisation plc, a group London, W2 2EZ, which supplies products England and services to the film and television industries, and operates recreation and leisure facilities in the UK and overseas. Sir Martin Jacomb Chairman of the British 10 Spring Gardens, Council, a government London, SW1A 2BN, sponsored organisation to England promote British culture. Each of the foregoing non-executive directors of RTZ is a citizen of the United Kingdom, other than Mr. R.V. Giordano KBE, who is a citizen of the United States. DIRECTORS AND OFFICERS OF RTZ INDONESIA LIMITED Name Title Principal Occupation J.S. Bradley Director Secretary of RTZ S.F. McAdam Director Chief Accountant of RTZ I.C. Ratnage Director Treasurer of RTZ M.M. Freeman Director Deputy Secretary of RTZ G.C. Lloyd-Davis Director and Assistant Secretary Secretary of RTZ Each of the foregoing directors and officers of RTZ Indonesia Limited is a citizen of the United Kingdom. The business address of each of the foregoing is: 6 St. James's Square, London, SW1Y 4LD, England. - -13- DIRECTORS AND OFFICERS OF R.T.Z. INTERNATIONAL HOLDINGS LIMITED Name Title* Principal Occupation J.S. Bradley Director Secretary of RTZ S.F. McAdam Director Chief Accountant of RTZ I.C. Ratnage Director Treasurer of RTZ M.M. Freeman Director Deputy Secretary of RTZ G.C. Lloyd-Davis Director and Assistant Secretary Secretary of RTZ Each of the foregoing directors and officers of R.T.Z. International Holdings Limited is a citizen of the United Kingdom. The business address of each of the foregoing is: 6 St. James's Square, London, SW1Y 4LD, England. DIRECTORS AND OFFICERS OF R.T.Z. OVERSEAS LIMITED Name Title* Principal Occupation J.S. Bradley Director Secretary of RTZ S.F. McAdam Director Chief Accountant of RTZ I.C. Ratnage Director Treasurer of RTZ M.M. Freeman Director Deputy Secretary of RTZ C. Lenon Director Head of Taxation of RTZ G.C. Lloyd-Davis Director and Assistant Secretary Secretary of RTZ Each of the foregoing directors and officers of R.T.Z. Overseas Limited is a citizen of the United Kingdom. The business address of each of the foregoing is: 6 St. James's Square, London, SW1Y 4LD, England. DIRECTORS AND OFFICERS OF OVERSEAS MINERALS LIMITED Name Title* Principal Occupation M.M. Freeman Director Deputy Secretary of RTZ B.G. Gale Director Assistant Secretary of RTZ C. Lenon Director Head of Taxation of RTZ G.C. Lloyd-Davis Director Assistant Secretary of RTZ - -14- Officers Ms. T.J. Barclay Secretary Secretarial Assistant of RTZ Each of the foregoing directors and officers of Overseas Minerals Limited is a citizen of the United Kingdom. The business address of each of the foregoing is: 6 St. James's Square, London, SW1Y 4LD, England.* * In the United Kingdom, executive directors also serve as officers. - -15- INDEX OF EXHIBITS (1) Joint Filing Agreement, dated May 22, 1995, between The RTZ Corporation PLC and RTZ Indonesia Limited. (2) Agreement, dated as of May 2, 1995, by and between Freeport- McMoRan Inc. and Freeport-McMoRan Copper & Gold Inc., on the one hand, and The RTZ Corporation PLC, RTZ Indonesia Limited and RTZ America, Inc., on the other hand, including Exhibits C, D and 8.1.15 thereto, the Schedules thereto and Registration Rights Agreement entered into pursuant thereto between Freeport-McMoRan Inc., The RTZ Corporation PLC and RTZ America, Inc., dated May 12, 1995. (3) Registration Rights Agreement, dated as of May 12, 1995, between Freeport-McMoRan Copper & Gold Inc., on the one hand, and The RTZ Corporation PLC, RTZ Indonesia Limited and RTZ America, Inc., on the other hand, entered into pursuant to the Agreement referred to in (2) above. (4) Implementation Agreement, dated as of May 2, 1995, between Freeport-McMoRan Copper & Gold Inc. and The RTZ Corporation PLC, including form of Participation Agreement to be entered into between P.T. Freeport Indonesia Company and an affiliate of The RTZ Corporation PLC to be organized under the laws of Indonesia, and form of Loan Agreement to be entered into between P.T. Freeport Indonesia Company and an affiliate of The RTZ Corporation PLC organized under the laws of England. *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. ______________________ * In the United Kingdom, executive directors also serve as officers. EX-99 2 EXHIBIT 1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(f) promulgated under the Securities Exchange Act of 1934, the undersigned agree to the joint filing of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the shares of common stock, par value $0.10 per share, of Freeport-McMoRan Copper & Gold Inc., and further agree that this Joint Filing Agreement be included as an Exhibit thereto. In addition, each party to this Agreement expressly authorizes each other party to this Agreement to file on its behalf any and all amendments to such Statement. Date: May 22, 1995 THE RTZ CORPORATION PLC By:/s/ John S. Bradley Name: John S. Bradley Title: Secretary RTZ INDONESIA LIMITED By:/s/ John S. Bradley Name: John S. Bradley Title: Director EX-2 3 EXHIBIT 2 AGREEMENT DATED AS OF MAY 2, 1995 by and between FREEPORT-McMoRan INC. and FREEPORT-McMoRan COPPER & GOLD INC., on the one hand, and The RTZ CORPORATION PLC, RTZ INDONESIA LIMITED and RTZ AMERICA, INC., on the other hand AGREEMENT, dated as of May 2, 1995, by and between Freeport-McMoRan Inc., a Delaware corporation ("Parent"), and Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"), on the one hand, and The RTZ Corporation PLC, a company organized under the laws of England ("RTZ"), RTZ Indonesia Limited, a company organized under the laws of England (the "Purchaser") and a subsidiary of RTZ, and RTZ America, Inc., a Delaware corporation ("RTZA") and a subsidiary of RTZ, on the other hand. Capitalized terms that are used herein are defined in this Agreement. RECITALS WHEREAS, the parties desire to effect certain transactions relating to the restructuring of Parent and the Company and to the distribution by Parent of all of the shares of Class B Common Stock owned by Parent as of the distribution date thereof, in the form of a stock dividend to the holders of Parent Common Stock (the "Spin-Off"). NOW, THEREFORE, in consideration of the terms and conditions set forth herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. Definitions. 1.1 "ABC Debentures" means Zero Coupon Convertible Subordinated Debentures due 2006 of Parent. 1.2 "ABC Redemption Date" shall have the meaning set forth in Section 4.1(a). 1.3 "Additional Purchase Notice" shall have the meaning set forth in Section 6.1(a). 1.4 "Additional Shares" shall have the meaning set forth in Section 6.1(a). 1.5 "Additional Stock Closing" shall have the meaning set forth in Section 6.3(a). 1.6 "Additional Stock Closing Date" shall have the meaning set forth in Section 6.3(a). 1.7 "Affiliate" means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person. 1.8 "Affiliate Agreements" shall have the meaning set forth in Section 9.1.4. 1.9 "business day" shall mean any day other than a Saturday, Sunday or a day which shall be in the City of London or the City of New York a legal holiday or a day on which banking institutions are authorized or obligated by law or other government action to close. 1.10 "Class A Common Stock" means the Class A Common Stock, par value $.10 per share, of the Company. 1.11 "Class A Directors" shall mean the directors elected by the holders of Class A Common Stock. 1.12 "Class B Common Stock" means the Class B Common Stock, par value $.10 per share, of the Company. 1.13 "Class B Directors" shall mean the directors elected by the holders of Class B Common Stock. 1.14 "Code" means the Internal Revenue Code of 1986, as amended. 1.15 "Company" or "FCX" means Freeport-McMoRan Copper & Gold Inc., a Delaware corporation. 1.16 "Company Common Stock" means Class A Common Stock, Class B Common Stock and any other shares of common equity of the Company. 1.17 "Company Material Adverse Effect" shall mean any adverse effect or change (alone or taken together with others) in the business, condition (financial or otherwise), assets, Liabilities, properties, operations or results of operations of the Company or its subsidiaries material to the Company and its subsidiaries taken as a whole, provided that no Company Material Adverse Effect shall be deemed to result from general changes in economic conditions or any change affecting copper or gold mining companies generally (including laws and regulations applicable to such companies, other than such laws and regulations of any governmental or regulatory authority in Indonesia). 1.18 "Company Notice" shall have the meaning set forth in Section 11(a). 1.19 "Company Registration Rights Agreement" shall mean the Registration Rights Agreement substantially in the form attached hereto as Exhibit A. - -2 1.20 "Company Voting Stock" shall mean any capital stock of the Company which is then entitled to vote for the election of directors. 1.21 "Consent Solicitation Statement" means the Consent Solicitation Statement of the Company, dated February 7, 1995 relating to, among other things, approval of the Merger and New Certificate of Incorporation. 1.22 "Debt Issues" shall have the meaning set forth in Section 4.1(a). 1.23 "Declaration Date" shall mean the date upon which Parent shall declare the record date for the Spin-Off. 1.24 "DGCL" means the Delaware General Corporation Law, as amended. 1.25 "Distribution Date" shall have the meaning set forth in Section 7(a). 1.26 "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time. 1.27 "Facilitating Company" means FM Facilitating Company, Inc., a Delaware corporation. 1.28 "$4.375 Parent Preferred Stock" means $4.375 Convertible Exchangeable Preferred Stock, par value $1.00 per share, of Parent. 1.29 "GAAP" means United States generally accepted accounting principles. 1.30 "governmental or regulatory authority" means any government or political subdivision thereof, whether Federal, state, local or foreign, or any agency or instrumentality of any such government or political subdivision. 1.31 "including" and "including, without limitation," and other forms of such terms, with respect to any matter or thing, shall be construed to mean "including but not limited to" such matter or thing. 1.32 "Indemnified Party" shall have the meaning set forth in Section 13.4(d). - -3 1.33 "Indemnifying Party" shall have the meaning set forth in Section 13.4(d). 1.34 "Indenture" means the Indenture between Freeport-McMoRan Inc. and Chemical Bank, as Trustee, dated as of November 9, 1990, as supplemented by Supplemental Indenture No. 1 and Supplemental Indenture No. 2. 1.35 "IRS" means the Internal Revenue Service of the United States of America. 1.36 "Laws" shall mean any foreign or domestic (Federal, state or local) law, statute, ordinance, rule or regulation or bodies of law. 1.37 "Liabilities" means any direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise, of a kind required by GAAP to be set forth on a financial statement (including the notes thereto). 1.38 "Majority Shares" means the number of shares of Company Voting Stock as will elect a majority of the directors of the Company; provided that, solely for purposes of such calculation, the shares of Company Voting Stock issuable upon exercise of warrants, options or other rights, or upon conversion or exchange of convertible or exchangeable securities, owned by RTZ and its Affiliates, shall be treated as outstanding Company Voting Stock. 1.39 "Merger" means the merger of Facilitating Company with and into the Company pursuant to the Merger Agreement. 1.40 "Merger Agreement" means the Agreement and Plan of Merger, dated February 7, 1995, between the Company and Facilitating Company. 1.41 "New By-laws" means the By-laws of the Company substantially in the form attached as Exhibit 2 to Annex I to the Consent Solicitation Statement. 1.42 "New Certificate of Incorporation" means the Certificate of Incorporation of the Company substantially in the form attached as Exhibit 1 to Annex I to the Consent Solicitation Statement. 1.43 "NYSE" means The New York Stock Exchange, Inc. 1.44 "Offer Price" shall have the meaning set forth in Section 11(a). - -4 1.45 "Option" shall have the meaning set forth in Section 6.2(a). 1.46 "Option Notice" shall have the meaning set forth in Section 6.2(a). 1.47 "Option Shares" shall have the meaning set forth in Section 6.2(a). 1.48 "Parent" or "FTX" means Freeport-McMoRan Inc., a Delaware corporation. 1.49 "Parent Common Stock" means the Common Stock, par value $.10 per share, of Parent and any other shares of common equity of Parent. 1.50 "Parent Material Adverse Effect" shall mean any adverse effect or change (alone or taken together with others) in the business, condition (financial or otherwise), assets, Liabilities, properties, operations or results of operations of Parent or its subsidiaries material to Parent and its subsidiaries taken as a whole, provided that no Parent Material Adverse Effect shall be deemed to result from general changes in economic conditions or any change affecting agrichemical or copper or gold mining companies generally (including laws and regulations applicable to such companies, other than such laws and regulations of any governmental or regulatory authority in Indonesia). 1.51 "Parent Registration Rights Agreement" shall mean the Registration Rights Agreement substantially in the form attached hereto as Exhibit B. 1.52 "Permits" means all licenses, permits, orders, approvals, registrations, authorizations, qualifications and filings with and under all Federal, state, local or foreign Laws and governmental or regulatory authorities and all industry or other nongovernmental self-regulatory organizations that are necessary for the conduct of the applicable Person's business and the ownership of its properties. 1.53 "Person" means a corporation, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental or regulatory authority. 1.54 "Proposed Closing Date" shall have the meaning set forth in Section 3.2(a). 1.55 "Public Offering" shall have the meaning set forth in Section 11(b). 1.56 "Purchaser" means RTZ Indonesia Limited, a company organized under the laws of England and a subsidiary of RTZ. - -5 1.57 "Purchaser Notice" shall have the meaning set forth in Section 11(f). 1.58 "Related Agreements" means, individually and collectively, the Company Registration Rights Agreement and the Parent Registration Rights Agreement. 1.59 "RTZ" means The RTZ Corporation PLC, a company organized under the laws of England. 1.60 "RTZA" means RTZ America, Inc., a Delaware corporation and a subsidiary of RTZ. 1.61 "Schedule 14D-1" shall have the meaning set forth in Section 5.1(b). 1.62 "Schedule 14D-9" shall have the meaning set forth in Section 5.1(d). 1.63 "SEC" means the Securities and Exchange Commission. 1.64 "SEC Reports" shall have the meaning set forth in Section 8.1.8(a). 1.65 "Securities Act" means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time. 1.66 "6.55% Notes" means the 6.55% Convertible Subordinated Notes due January 15, 2001, of Parent. 1.67 "6.55% Redemption Date" shall have the meaning set forth in Section 4.1(a). 1.68 "6.55% Redemption Price" shall have the meaning set forth in Section 6.1(b). 1.69 "6.55% Remainder" shall have the meaning set forth in Section 6.1(b). 1.70 "Spin-Off" shall have the meaning set forth in the Recitals. - -6 1.71 "Spin-Off Private Letter Ruling" means the private letter ruling to Parent from the IRS dated November 21, 1994 concerning the Spin-Off, together with any supplements and amendments thereto. 1.72 "Stock Closing" shall have the meaning set forth in Section 3.2(b). 1.73 "Stock Closing Date" shall have the meaning set forth in Section 3.2(b). 1.74 "Supplemental Indenture No. 1" means Freeport-McMoRan Inc. Supplemental Indenture No. 1, dated as of February 5, 1991, relating to the Series of 6.55% Convertible Subordinated Notes due January 15, 2001. 1.75 "Supplemental Indenture No. 2" means Freeport-McMoRan Inc. Supplemental Indenture No. 2, dated as of July 15, 1991, relating to the Series of Zero Coupon Convertible Subordinated Debentures due 2006 (ABC Securities). 1.76 "Tender Offer" shall have the meaning set forth in Section 5.1(b). 1.77 "Termination Notice" shall have the meaning set forth in Section 6.1(c). 1.78 "Trustee" means Chemical Bank, as trustee under the Indenture. 2. Registration Rights Agreements. Simultaneously with the Stock Closing (i) the Company and the Purchaser shall execute and deliver the Company Registration Rights Agreement, and (ii) Parent and RTZA shall execute and deliver the Parent Registration Rights Agreement. 3. Purchases of Class A Common Stock. 3.1 Sale of Shares. Upon the terms and subject to the conditions set forth in this Agreement, at the Stock Closing, Parent shall sell to the Purchaser, and the Purchaser shall purchase, 21,531,100 shares of Class A Common Stock, free and clear of any and all liens, encumbrances, equities or adverse claims, at a purchase price per share of $20.90, the total purchase price being rounded to $450,000,000. - -7 3.2 Stock Closing. (a) No later than 5 business days prior to the Stock Closing, Parent shall deliver written notice to the Purchaser stating the proposed date for the Stock Closing (the "Proposed Closing Date"). (b) Upon the terms and subject to the conditions of this Agreement, the closing of the transactions contemplated by this Article 3 (the "Stock Closing") shall take place at the offices of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, New York, commencing at 10:00 a.m. (New York local time) on the Proposed Closing Date, or as soon as possible thereafter, upon satisfaction or waiver of the applicable conditions set forth in Article 10 hereof, or at such other time and/or place and/or on such other date as the parties may mutually agree (the "Stock Closing Date"). No later than 3 business days prior to the Stock Closing Date, Parent shall provide written notice to the Purchaser specifying the accounts to which payment shall be made. (c) At the Stock Closing (i) Parent shall deliver to the Purchaser the certificates representing 21,531,100 shares of Class A Common Stock purchased in accordance with this Article 3, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank, with all necessary transfer tax and other documentary stamps affixed thereto, (ii) the Purchaser shall pay to Parent in consideration for the shares being purchased, by wire transfer of immediately available funds, the aggregate purchase price equal to $450,000,000, and (iii) the parties hereto shall execute and deliver such certificates, documents and instruments as may be required to be executed or delivered pursuant to the terms hereof. 4. Certain Actions by Parent. 4.1 Redemption of the 6.55% Notes and the ABC Debentures. (a) Parent shall redeem the 6.55% Notes and the ABC Debentures (the "Debt Issues") as soon as is reasonably practicable after consummation of the Stock Closing, and in any case, prior to the Spin-Off; provided that Parent shall give notice of the redemption of one of the Debt Issues within 24 hours after the Stock Closing and notice of the redemption of the other Debt Issue as soon as is reasonably practicable thereafter. The redemption date specified in such notice with respect to the 6.55% Notes is herein called the "6.55% Redemption Date" and that with respect to the ABC Debentures is herein called the "ABC Redemption Date". (b) If Parent causes RTZA to commence the Tender Offer in accordance with Section 5.1(a) hereof, the 6.55% Redemption Date shall be midnight - -8 on the Sunday following the expiration of the Tender Offer, which shall occur at 5:00 p.m. (New York City time) on the prior Friday. (c) Prior to mailing the notice of redemption in respect of the 6.55% Notes and in respect of the ABC Debentures, Parent shall have obtained, and furnished to RTZA a copy of, the consent of the Trustee in writing that the notice to the Trustee with respect to the 6.55% Notes and the notice to the Trustee with respect to the ABC Debentures, respectively, as contemplated by this Agreement, each constitutes sufficient notice for purposes of the respective Indenture. 5. Tender Offer for, and Conversion of, 6.55% Notes. 5.1 Tender Offer. (a) No later than 5 business days prior to sending a notice of redemption with respect to the 6.55% Notes, Parent shall deliver written notice to RTZA stating whether or not Parent elects to cause RTZA to commence the Tender Offer in accordance with this Article 5. (b) If Parent requests in accordance with Section 5.1(a) hereof that RTZA commence a tender offer, Parent and RTZA shall at such time agree on the price to be offered in, and the conditions to, such all-cash tender offer for all outstanding 6.55% Notes (the "Tender Offer") and, thereafter, subject to Sections 5.1(c), (e) and (f) hereof and to the receipt of the written consent referred to in Section 8.1.8(c), RTZA shall commence the Tender Offer. In connection therewith, RTZA shall take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to cause the consummation of the Tender Offer, including the filing with the SEC, the NYSE and any other applicable governmental or regulatory authorities of a Tender Offer Statement on Schedule 14D-1 and any amendments thereto and any other offering documents required to be filed therewith (the "Schedule 14D-1"). The expiration of the Tender Offer shall occur at 5:00 p.m. (New York local time) on the twenty-first business day, or if such twenty-first business day is not a Friday, on the first Friday following the twenty-first business day, following the commencement thereof (unless extended with the consent of the parties hereto), whereupon, subject to the satisfaction of the conditions to the Tender Offer, RTZA shall purchase the 6.55% Notes tendered therein in accordance with the terms of the Tender Offer. (c) RTZA shall not be obligated to commence the Tender Offer unless prior thereto it shall have received a certificate from the chief financial officer of Parent, dated no earlier than the date the notice of redemption of the 6.55% Notes is mailed to the Trustee and to the holders thereof in accordance with Article 4 hereof, to the effect that, to the best of his knowledge, no event has occurred or is - -9 contemplated by this Agreement which causes Parent to believe that the nonrecognition provisions of Code Section 355(a)(1) and (c) shall not apply with respect to the Spin-Off, other than as a result of Code Section 367(e). (d) No later than the date on which the Schedule 14D-1 is filed with the SEC (i) Parent shall file with the SEC, the NYSE and any other applicable governmental or regulatory authorities a Solicitation/Recommendation Statement on Schedule 14D-9 and any other necessary or appropriate documentation (the "Schedule 14D-9"), and (ii) Parent shall mail to holders of record of 6.55% Notes the Schedule 14D-1, the Schedule 14D-9 and related documents. (e) If Parent requests that RTZA commence the Tender Offer, Parent and RTZA will also agree at such time upon the terms mutually acceptable to Parent and RTZA upon which RTZA will have the right to acquire shares of Parent Common Stock upon conversion of the 6.55% Notes purchased in the Tender Offer. In connection therewith, Parent shall take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to permit such acquisition of Parent Common Stock. (f) Parent and RTZA shall enter into an agreement with the Trustee and Mellon Securities Trust Company pursuant to which all 6.55% Notes validly tendered and purchased in the Tender Offer shall be converted into Parent Common Stock, upon the terms referred to in Section 5.1(e), immediately upon expiration of the Tender Offer and prior to the 6.55% Redemption Date. (g) As promptly as practicable after the 6.55% Redemption Date, Parent shall provide written notice to the Purchaser of the aggregate principal amount of 6.55% Notes redeemed by Parent. 5.2 Conversion of 6.55% Notes. In accordance with the terms of Section 5.1(f), all 6.55% Notes purchased by RTZA in the Tender Offer shall be converted into shares of Parent Common Stock upon the terms referred to in Section 5.1(e), and, no later than the day following the expiration of the Tender Offer, RTZA shall become the holder of record of such shares. As soon as practicable following expiration of the Tender Offer, Parent shall cause to be issued and delivered to RTZA certificates representing the shares of Parent Common Stock issuable in connection with such conversion. 5.3 Transfer of Shares Issued Upon Conversion. Except to the extent such sales occur on the NYSE, RTZA shall not, prior to the Distribution Date, sell or transfer any shares of Parent Common Stock received upon conversion of the 6.55% Notes unless the purchaser or transferee thereof shall have represented to RTZA in - -10 writing that such purchaser or transferee (i) is a "United States person" as defined in Code Section 7701(a)(30), (ii) is not an entity controlled by any person other than a United States person, (iii) has no plan or intention to sell, prior to the Spin-Off, any shares of Parent Common Stock to a person that is (A) not a United States person or (B) an entity controlled by a person that is not a United States person, and (iv) if such purchaser or transferee is or becomes, prior to the Distribution Date, a holder of at least 5% of the Parent Common Stock, will represent that it has no plan or intention to sell, exchange, transfer or otherwise dispose of, following the Spin-Off, such shares of Parent Common Stock or any shares of Class B Common Stock which such purchaser or transferee may receive in the Spin- Off. Notwithstanding the foregoing, RTZA shall not sell on the public market any shares of Parent Common Stock during the period commencing on the date on which the Parent Common Stock trades "ex-dividend" (i.e., without the Class B Common Stock which would be distributed to the holder of such stock pursuant to the Spin- Off) and ending on the Distribution Date. 5.4 Code Section 367(e) Indemnification. (a) If RTZA or any Affiliate of RTZA owns shares of Parent Common Stock as of the Distribution Date, RTZA will indemnify Parent for 50% of any Section 367(e) Tax Cost. The "Section 367(e) Tax Cost" shall mean the sum of (a) any federal, state and local income and franchise taxes based in whole or in part on net income ("Income Tax or Income Taxes") paid by Parent to the extent resulting from a determination by Parent (subject to the provisions of Section 5.4(h) or (i), if applicable) or a Taxing Authority that Code Section 367(e) applies to any Class B Common Stock received by RTZA or any Affiliate of RTZA in the Spin-Off and (b) any interest and penalties paid by Parent related thereto. The amount described in (a) of the preceding sentence shall equal the excess of (i) the sum of the Income Taxes actually paid by Parent with respect to the taxable year in which the Spin-Off occurred (the "Spin-Off Year"), over (ii) the total amount of Income Taxes that would have been paid with respect to the Spin-Off Year if there had been no determination that Code Section 367(e) applies to any Class B Common Stock received by RTZA or any Affiliate of RTZA in the Spin-Off. In calculating the Section 367(e) Tax Cost, the Income Taxes actually paid by Parent with respect to the Spin-Off Year shall reflect such carryovers of net operating losses, tax credits and other tax attributes as are available to Parent as of the end of the Spin-Off Year. Notwithstanding anything to the contrary contained in this Section 5.4, the tax attributes to which Parent becomes entitled after the Spin-Off Year that are attributable to taxable years after the Spin-Off Year shall not be taken into account in calculating the Section 367(e) Tax Cost. Notwithstanding anything contained in this Section 5.4 to the contrary, Parent shall determine, in its reasonable good faith discretion, the position that it shall take on its Income Taxes returns submitted to any Taxing Authority. RTZA shall not challenge, using the dispute resolution procedure set forth in Section 5.4(c), the - -11 appropriateness, but not the calculation of, the filing positions adopted by Parent on its Income Taxes returns. (b) Parent shall provide a certificate of its chief financial officer notifying RTZA of any obligation to indemnify Parent pursuant to this Section 5.4 at least 30 days prior to the date specified in such certificate on which Parent intends to pay the Section 367(e) Tax Cost to which such obligation to indemnify Parent relates, together with a statement from a "Big Six" accounting firm (which may be Parent's independent auditor) setting forth in detail a calculation of the Section 367(e) Tax Cost. Notwithstanding anything contained in Section 5.4(c) to the contrary, RTZA shall pay the amount shown due on such officer's certificate no later than 5 days prior to the date that Parent specified in such officer's certificate as the date on which it intends to pay such Section 367(e) Tax Cost. Within 5 days after the date of payment specified in such officer's certificate, Parent shall provide RTZA with a second certificate of its chief financial officer stating that payment of the Section 367(e) Tax Cost giving rise to the indemnification obligation has been made, specifying the date and amount of payment, or return such indemnification payment to RTZA. If Parent is required to make a payment to RTZA as a result of its receipt of a refund of a previously paid Section 367(e) Tax Cost in accordance with Section 5.4(d) or the resolution of a dispute in RTZA's favor in accordance with Section 5.4(c), Parent shall make such payment within 5 days of the receipt of the refund or the resolution of the dispute. (c) In the event that a dispute arises as to the calculation of the Section 367(e) Tax Cost, an independent "Big Six" accounting firm mutually acceptable to RTZA and Parent shall be selected to resolve the dispute (the costs of which shall be shared equally by RTZA and Parent). (d) If, subsequent to the date on which RTZA first indemnifies Parent, Parent is informed by a Taxing Authority of the need to pay an additional Section 367(e) Tax Cost or receives a refund of a previously paid Section 367(e) Tax Cost, Parent shall promptly notify RTZA in writing, the Section 367(e) Tax Cost shall be recomputed, any excess of the amount previously paid by RTZA over 50% of such recomputed Section 367(e) Tax Cost shall be repaid to RTZA, and any excess of 50% of such recomputed Section 367(e) Tax Cost over the amount previously paid by RTZA shall be paid by RTZA in each case in accordance with the procedures of Section 5.4(b). (e) Parent will notify RTZA promptly in writing if any taxing agency makes, orally or in writing, any assertion that Section 367(e) applies to any Class B Common Stock received by RTZA or any Affiliate of RTZA in the Spin-Off (a "Section 367(e) Issue"). Parent shall (i) keep RTZA fully apprised, on a timely basis, of any developments relating to its contest of a Section 367(e) Issue, (ii) consult RTZA with - -12 respect to the contest of such issue, and (iii) after such issue has been referred to an IRS Appeals Officer, permit RTZA to participate, at RTZA's sole cost and expense, in meetings (including telephonic conferences) regarding a Section 367(e) Issue. (f) An "Open Issue" shall mean an issue in connection with which Parent or any Consolidated Subsidiary may be liable for Income Taxes, interest and penalties, and which has not been settled or otherwise resolved pursuant to a Determination. A "Determination" shall mean, with respect to federal income taxes, a determination under Code Section 1313, and, with respect to Income Taxes other than federal income taxes, any final determination of the liability in respect of an Income Tax that, under applicable law, is not subject to further appeal, review or modification through administrative or judicial proceedings or otherwise. A "Material Open Issue" shall mean an Open Issue or a number of Open Issues in the aggregate, with respect to which the potential tax liability of Parent or any Consolidated Subsidiary exceeds $5,000,000 exclusive of interest and penalties, except for Section 367(e) Issues. A "Consolidated Subsidiary" shall mean any corporation which files a consolidated return with Parent for federal income tax purposes in the Spin-Off Year or a Related Year. A "Related Year" shall mean any taxable year which is audited by a governmental authority responsible for levying, auditing or otherwise supervising the administration of Income Taxes (a "Taxing Authority"), in conjunction with the Spin- Off Year. A "Settling Party" shall be whichever of RTZA or Parent is willing to settle a Section 367(e) Issue on certain terms acceptable to a Taxing Authority and a "Contesting Party" shall be the other party if it is unwilling to so settle. (g) Parent shall choose the forum in which a Section 367(e) Issue is to be contested; provided that RTZA shall choose such forum if (i) a Taxing Authority has proposed a settlement on certain terms, (ii) RTZA has become the Contesting Party, (iii) Parent has become the Settling Party, and (iv) there is no Material Open Issue for the Spin-Off Year or any Related Year. (h) Parent shall have the right to settle a Section 367(e) Issue at any time; provided that in determining whether to settle, Parent (i) shall exercise its reasonable business judgment in good faith, taking into account the merits of the Section 367(e) Issue, the interests of Parent and RTZA, the risks and potential costs and benefits of further contesting the Section 367(e) Issue, and such other criteria as Parent shall consider to be appropriate, and (ii) shall not make a concession on or "trade" any issue that has an effect on the amount of the Section 367(e) Issue for a concession by a Taxing Authority on an issue that does not affect RTZA and its Affiliates. Notwithstanding the foregoing, Parent shall not settle a Section 367(e) Issue if (i) RTZA has requested that Parent not settle such issue, (ii) RTZA has become the Contesting Party, (iii) Parent has become the Settling Party, and (iv) there is no Material Open Issue with respect to the Spin-Off Year or any Related Year. - -13 (i) Notwithstanding anything contained in this Section 5.4 to the contrary, the provisions of this Section 5.4(i) shall apply if (A) either Parent or RTZA has become the Settling Party, (B) the other party has become the Contesting Party, and (C) Parent has not settled the Section 367(e) Issue. If the provisions of this Section 5.4(i) apply, (i) the Contesting Party shall thereafter pay all costs and expenses of pursuing any courses of action in connection with the Section 367(e) Issue (including, without limitation, the costs of participating in administrative and judicial proceedings to challenge the Taxing Authority's position with respect to such issue), (ii) if the Contesting Party is RTZA, RTZA shall indemnify Parent for a total amount equal to the RTZA Contesting Tax Cost, and (iii) if the Contesting Party is Parent, RTZA shall indemnify Parent for a total amount equal to the RTZA Settling Tax Cost, in each of (ii) and (iii) with appropriate adjustment for any amounts previously paid pursuant to Sections 5.4(b) and (d). If the provisions of this Section 5.4(i) apply, RTZA or Parent, as the case may be, shall promptly remit to the other party, after a Determination has been reached, (i) an amount such that RTZA shall have indemnified Parent in total for an amount equal to the RTZA Contesting Tax Cost or the RTZA Settling Tax Cost, as the case may be, or (ii) if the Parent Settling Tax Cost exceeds the Final Section 367(e) Tax Cost, an amount such that Parent shall have paid to the Taxing Authorities and to RTZA in the aggregate an amount equal to such Parent Settling Tax Cost. The RTZA Contesting Tax Cost shall be the excess, if any, of (I) the Section 367(e) Tax Cost computed on the basis of a Determination with respect to each of the Income Taxes (the "Final Section 367(e) Tax Cost"), over (II) the sum of (a) 50% of the amount which the Final Section 367(e) Tax Cost would have been if the Section 367(e) Issue had been settled on the terms upon which, and at the time at which, Parent and the Taxing Authority had been willing to settle and (b) interest on the unpaid amount thereof at the rate applicable to overpayments under Code Section 6621, calculated for the period beginning on the date that RTZA became the Contesting Party and ending on the date of the Determination which is the basis for indemnification under this Section 5.4(i) (the sum described in (II) shall be denoted as the "Parent Settling Tax Cost"). The RTZA Settling Tax Cost shall be the sum of (a) 50% of the amount which the Final Section 367(e) Tax Cost would have been if the Section 367(e) Issue had been settled on the terms upon which, and at the time at which, RTZA and the Taxing Authority had been willing to settle and (b) interest on the unpaid amount thereof at the rate applicable to overpayments under Code Section 6621, calculated for the period beginning on the date that Parent became the Contesting Party and ending on the date of the Determination which is the basis for indemnification under this Section 5.4(i). If pursuant to this Section 5.4(i), a Contesting Party contests a Section 367(e) Issue by paying Income Taxes and seeking a refund thereof, it shall fund the full amount of such payment less the excess, if any, of (i) the amount the Settling Party would have paid, had the Section 367(e) Issue been settled on the terms upon which, and at the time at which, the Settling Party and the Taxing Authority had been willing to settle, over - -14 (ii) the amounts already paid by the Settling Party; provided that, if the Contesting Party is RTZA, RTZA shall fund such payment by extending an interest-free loan to Parent. (j) Each of the parties hereto and their Affiliates shall furnish or cause to be furnished to Parent or RTZA, as the case may be, upon request, as promptly as practicable, such reasonable information and reasonable assistance relating to a Section 367(e) Issue as is reasonably necessary for Parent's filing of its Income Taxes returns, provision of information requested by a Taxing authority, preparation for any audit covering the Spin-Off Year or a Related Year, and Parent's or RTZA's prosecution or defense of any claim, suit or proceeding relating to a Section 367(e) Issue. Each of the parties hereto and their Affiliates shall cooperate with Parent or RTZA, as the case may be, in the conduct of any audit or proceeding relating to a Section 367(e) Issue, and shall execute and deliver such powers of attorney and other documents as are necessary to carry out the intent of this Section 5.4(j). Nothing in this Section 5.4(j) shall be construed to require the parties hereto, or their Affiliates, to make any representations or warranties not expressly contemplated by this Agreement. 6. Purchase of Additional Shares and Option Shares. 6.1 Request to Purchase Additional Shares. (a) Upon the terms and subject to the conditions set forth in this Agreement, if Parent redeems any 6.55% Notes in accordance with Article 4 hereof, then (whether or not a Tender Offer has occurred) provided that the rights granted to holders in connection with the redemption of the 6.55% Notes are acceptable to Purchaser, Parent may request, by the delivery to the Purchaser of a written notice (the "Additional Purchase Notice") or a copy of the Escrow Notice referred to in Section 6.1(d) at any time after the later of the ABC Redemption Date and the 6.55% Redemption Date, that the Purchaser purchase, and the Purchaser shall purchase from Parent, that number of shares of Class A Common Stock set forth in the Additional Purchase Notice (the "Additional Shares"), at a purchase price per share of $20.90, on the date provided in the Additional Purchase Notice or the Escrow Notice, but, in the case of the Additional Purchase Notice, no earlier than the date 3 business days thereafter and no later than the date 5 business days prior to the Distribution Date; provided that, (x) if the 6.55% Redemption Date is scheduled to occur prior to the ABC Redemption Date and (y) the ABC Conversion Value is an amount which is less than 85% of the ABC Redemption Value (the "Article 6 Event"), then the Additional Purchase Notice or Escrow Notice, as the case may be, may be delivered to the Purchaser at any time after the receipt by Purchaser of the notice specified in Section 5.1(g). The "ABC Conversion Value" means the product of the number of shares of Parent Common Stock issuable upon conversion of $1000 principal amount of ABC Debentures, times the Average Trading Price. The "Average Trading Price" means the average daily stock price of Parent Common Stock - -15 for the ten trading days immediately prior to the 6.55% Redemption Date. The "ABC Redemption Value" means the redemption price for the ABC Debentures per $1,000 principal amount of the ABC Debentures (including any accrued interest component thereof). (b) Notwithstanding anything contained herein to the contrary, in no event shall the aggregate purchase price paid by the Purchaser for the Additional Shares pursuant to Section 6.1(a) exceed the amount equal to the excess of (I) the sum of (x) the product of the 6.55% Redemption Price per $1,000 of face value of the 6.55% Notes times the quotient of (A) the 6.55% Remainder divided by (B) $1,000, plus (y) accrued and unpaid interest on the 6.55% Remainder to and including the 6.55% Redemption Date, over (II) the aggregate accreted value of ABC Debentures, if any, surrendered for conversion by the holders thereof; provided, that if the Article 6 Event shall have occurred and the ABC Redemption Date shall not yet have occurred, the aggregate accreted value of ABC Debentures surrendered for conversion shall be deemed to be zero for purposes of this clause (II). The term "6.55% Remainder" means the aggregate principal amount of the 6.55% Notes redeemed by Parent in accordance with Section 4.1 hereof. The "6.55% Redemption Price" shall mean the redemption price for the 6.55% Notes as determined in accordance with the Indenture, which redemption price is $912.14 per $1,000 of face value of the 6.55% Notes for the twelve-month period commencing January 15, 1995. (c) In the event Parent determines not to exercise its right to cause Purchaser to purchase Additional Shares in accordance with this Section 6.1, Parent shall deliver written notice (the "Termination Notice") to the Purchaser of such determination as promptly as practicable after such determination is made, but no later than 8 business days prior to the Distribution Date, whereupon the obligation of Purchaser to purchase any shares of Class A Common Stock in accordance with this Section 6.1 shall terminate. (d) In the event the 6.55% Redemption Date is scheduled to occur prior to the ABC Redemption Date, at any time after receipt by the Purchaser of the notice specified in Section 5.1(g), Parent may by written notice request (the "Escrow Request") that Purchaser deposit with the Escrow Agent (as defined below) the funds referred to in this Section 6.1(d) on a date no earlier than three business days following the date of such request. No later than such date specified in such request (i) Purchaser shall, in accordance with an escrow agreement reasonably acceptable to Parent and Purchaser, deposit with an Escrow Agent (the "Escrow Agent") mutually acceptable to Purchaser and Parent (it being agreed that the Trustee is mutually acceptable) an amount equal to the sum of (x) the product of the 6.55% Redemption Price times the 6.55% Remainder, plus (y) accrued and unpaid interest on the 6.55% Remainder to and including the 6.55% Redemption Date, and (ii) Parent shall deposit with such Escrow - -16 Agent the number of shares of Class A Common Stock, (together with stock powers duly executed in blank) equal to the amount of funds deposited by Purchaser pursuant to clause (i) above divided by $20.90. Such Escrow Agent shall hold such funds and stock in escrow pending receipt of notice from Parent (the "Escrow Notice"), pursuant to which Parent shall instruct the Escrow Agent to transfer, and the Escrow Agent shall transfer, to Parent from the funds deposited by Purchaser an amount not greater than the amount calculated in accordance with Section 6.1(b) hereof (the "Section 6.1(d) Amount"); provided that, if the Article 6 Event has occurred, the Escrow Notice may be delivered at any time and, if the Article 6 Event has not occurred, the Escrow Notice may be delivered no earlier than the next business day following the ABC Redemption Date, but in either case, no later than the date 8 business days prior to the Distribution Date. The escrow agreement shall provide that, simultaneously with such transfer to Parent of such funds, the Escrow Agent shall (I) transfer to Purchaser the excess, if any, of the amount deposited by Purchaser (including any interest earned) over the Section 6.1(d) Amount; (II) transfer and deliver to Purchaser the number of shares of Class A Common Stock equal to the Section 6.1(d) Amount divided by $20.90 (together with such executed stock powers effecting the transfer to Purchaser of such number of shares of Class A Common Stock); and (III) deliver to Parent the remainder of the shares of Class A Common Stock, if any, not transferred and delivered to Purchaser in accordance with clause II above. The escrow agreement shall further provide for the return to Purchaser of the funds deposited (plus any interest earned thereon) and the return to Parent of the shares of Class A Common Stock deposited, if the Escrow Notice has not been given within 60 days after the date of the Escrow Request referred to in the first sentence of this Section 6.1(d). 6.2 Option to Purchase Class A Common Stock. (a) The Purchaser shall have the option (the "Option") to purchase from Parent, and Parent shall sell to the Purchaser, the number of shares of Class A Common Stock set forth in the Option Notice (the "Option Shares"), at a purchase price per share of $20.90, provided that the number of Option Shares shall not exceed 3,588,517 shares of Class A Common Stock. No later than the fifth business day following receipt of the Additional Purchase Notice, the Escrow Notice or the Termination Notice, as the case may be, the Purchaser shall deliver written notice to Parent (the "Option Notice"), which shall state the number of shares of Class A Common Stock in respect of which the Option is being exercised or, subject to Section 6.2(b), if none, that the Purchaser elects not to exercise the Option. (b) If RTZA has not acquired any 6.55% Notes pursuant to the terms hereof, and Parent has previously delivered the Termination Notice, the Purchaser shall, in the Option Notice, exercise the Option to purchase 3,588,517 shares of Class A Common Stock at a purchase price per share of $20.90 in accordance with this Article 6. - -17 6.3 Purchase of Additional Shares and Option Shares. (a) Upon the terms and subject to the conditions of this Agreement, the closings of the transactions contemplated by Section 6.1 and Section 6.2 (each, an "Additional Stock Closing") shall take place at the offices of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, New York, commencing at 10:00 a.m. (New York local time), in the case of the purchase of the Additional Shares, on the date specified in the Additional Purchase Notice or the Escrow Notice in accordance with Section 6.1(a) and, in the case of the purchase of the Option Shares, on the third business day following the delivery of the Option Notice or, in either case, at such other time and/or place and/or on such other dates as the parties may mutually agree (each, an "Additional Stock Closing Date"). No later than 2 business days prior to an Additional Stock Closing Date, Parent shall provide written notice to the Purchaser and the Escrow Agent specifying the accounts to which payment shall be made on such Additional Stock Closing Date. (b) At an Additional Stock Closing (i) Parent shall deliver, or cause to be delivered, to the Purchaser the certificates representing the number of shares of Class A Common Stock purchased in accordance with Section 6.1 and/or Section 6.2, as the case may be, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank, with all necessary transfer tax and other documentary stamps affixed thereto, (ii) the Purchaser shall pay, or cause to be paid, to Parent in consideration for the shares being purchased, by wire transfer of immediately available funds, the aggregate purchase price equal to the sum of (x) subject to the provisions of Section 6.1(b), the product of $20.90 times the number of Additional Shares, if any, plus (y) the product of $20.90 times the number of Option Shares, if any, and (iii) the parties hereto shall execute and deliver such certificates, documents and instruments as may be required to be executed or delivered pursuant to the terms hereof. 7. Spin-Off and Merger. (a) As promptly as it deems practicable after the latest to occur of the 6.55% Redemption Date, the ABC Redemption Date and (if (i) an Option Notice pursuant to which the Purchaser elects to purchase shares, or (ii) an Additional Purchase Notice or Escrow Notice, in either case, has been delivered in accordance with Article 6) the final Additional Stock Closing, to the extent not otherwise prohibited by applicable Law or regulation or a judgment, injunction, order or decree of a proper governmental or regulatory authority of competent jurisdiction, Parent shall declare the record date for the Spin- Off, which shall also be the date on which the shares of Class B Common Stock will be distributed to holders of Parent Common Stock (the "Distribution Date"); provided that, - -18 (i) if Parent requests RTZA to commence the Tender Offer and RTZA acquires any 6.55% Notes in connection with the Tender Offer, then Parent shall delay the Declaration Date a reasonable period of time (it being agreed that a delay of 60 business days is reasonable for purposes of this Section 7(a)(i)), (ii) if the Purchaser elects not to exercise the Option with respect to all 3,588,517 shares of Class A Common Stock, or if Parent otherwise wishes to sell shares of Class A Common Stock prior to the Spin- Off, then Parent may delay the Declaration Date a reasonable period of time in order to permit it to sell any Class A Common Stock that it desires to sell, and (iii) prior to the Spin-Off, Parent shall have received satisfactory confirmation that the nonrecognition provisions of Code Section 355(a)(1) and (c) shall apply, such that no gain or loss shall be recognized to Parent or its shareholders, other than as a result of Code Section 367(e). (b) In accordance with the terms of the Consent Solicitation Statement, no later than the business day immediately preceding the Distribution Date, the Company and Facilitating Company will file a certificate of merger with the Secretary of State of the State of Delaware, which certificate will state that the Merger shall become effective upon the filing thereof with the Secretary of State of the State of Delaware, and make all other filings or recordings required by Delaware Law in connection with the Merger. 8. Representations and Warranties. 8.1 Representations and Warranties of Parent and the Company . Parent severally with respect to representations and warranties as to Parent and its subsidiaries and Affiliates (other than the Company and its direct and indirect subsidiaries), and the Company severally with respect to representations and warranties as to the Company and its direct and indirect subsidiaries, represent and warrant to RTZ, RTZA and the Purchaser as follows: 8.1.1 Organization and Qualifications . Each of Parent, the Company and their respective material subsidiaries is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation and has the requisite corporate power and authority to own and operate its properties and to carry on its business as it is now being conducted. Each of Parent, the Company and their respective material subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in every jurisdiction in which the nature of the business conducted or properties owned or leased or the nature of its activities makes - -19 such qualification necessary, except for those jurisdictions where the failure to be so qualified would not, individually or in the aggregate, have a Parent Material Adverse Effect or a Company Material Adverse Effect. 8.1.2 Capitalization. (a) Schedule 8.1.2 sets forth the authorized capital stock of each of Parent and the Company and the number of outstanding shares of capital stock of each of Parent and the Company as of April 30, 1995. All of the outstanding shares of capital stock of each of Parent and the Company have been duly authorized and validly issued and are fully paid and non-assessable. Except as set forth on Schedule 8.1.2, there are no shares of capital stock of either Parent or the Company authorized, issued or outstanding, and except as set forth on Schedule 8.1.2., there are no outstanding subscriptions, options, warrants, rights, convertible or exchangeable securities or other agreements or commitments of any character relating to the issued or unissued capital stock or other securities of the Company or Parent obligating the Company or Parent to issue, deliver or sell, or cause to be issued, delivered or sold, or to make any payments based upon the value of, shares of capital stock or other securities of the Company or Parent or obligating the Company or Parent to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment. There are no voting trusts or other agreements or understandings to which either Parent or the Company is a party with respect to the voting of capital stock of Parent or the Company. Parent and the Company have furnished to the Purchaser and RTZA all agreements, commitments and understandings to which any of Parent, the Company or their respective subsidiaries is a party and which relate to the capital stock of Parent, the Company or any of their respective subsidiaries. (b) The shares of Class A Common Stock purchased by the Purchaser at the Stock Closing, the shares of Class A Common Stock purchased by the Purchaser at an Additional Stock Closing, if any, the shares of Parent Common Stock issued to RTZA upon conversion of the 6.55% Notes, if any, and the shares of Class B Common Stock, if any, received by RTZA in the Spin-Off, will have been duly authorized and, upon the issuance thereof, will be validly issued, fully paid and non- assessable with no personal liability attaching to the ownership thereof. The issuance to the Purchaser of the shares of Class A Common Stock at the Stock Closing, the issuance to the Purchaser of the shares of Class A Common Stock at an Additional Stock Closing, if any, the issuance to RTZA of the shares of Parent Common Stock upon conversion of the 6.55% Notes, if any, and the distribution of the shares of Class B Common Stock, if any, to RTZA in the Spin-Off, is not and will not be subject to preemptive rights of any Person. - -20 8.1.3 Authority. (a) Each of Parent and the Company has the requisite corporate power and authority to enter into this Agreement and the Related Agreements to which either Parent or the Company is or will be a party and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Related Agreements to which either Parent or the Company is or will be a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by each of Parent's and the Company's Board of Directors and, except as set forth on Schedule 8.1.3, no other corporate proceedings on the part of Parent or the Company are necessary to authorize this Agreement or the Related Agreements to which either of them is or will be a party or the transactions contemplated hereby and thereby, except for the approval of stockholders specified in paragraphs (b) and (c) of this Section 8.1.3, which have been obtained. This Agreement has been, and the Related Agreements, when executed and delivered by each of Parent and the Company pursuant to Article 2 hereof, will be, duly and validly executed and delivered by each of Parent and the Company, respectively. This Agreement constitutes, and the Related Agreements, when executed and delivered by each of Parent and the Company pursuant to Article 2 hereof, will constitute, a valid and binding agreement of Parent and the Company, respectively, enforceable against Parent and the Company, respectively, in accordance with their respective terms, subject to bankruptcy, reorganization, insolvency, moratorium and other Laws affecting the enforcement of creditors' rights generally and subject to general equitable principles. (b) Each of the New Certificate of Incorporation and the New By-laws has been approved by the Board of Directors of the Company and the New Certificate of Incorporation has been approved by the stockholders of the Company; and no other corporate proceedings on the part of the Company are necessary to authorize and adopt the New Certificate of Incorporation or the New By-laws. (c) The Merger Agreement has been approved by the Board of Directors of each of Parent, the Company and Facilitating Company and the stockholders of the Company and Facilitating Company; and no other corporate proceedings on the part of Parent, the Company or Facilitating Company are necessary to authorize and consummate the transactions contemplated thereby. (d) The Spin-Off has been approved by the Board of Directors of Parent; and, except as set forth on Schedule 8.1.3, no other corporate proceedings on the part of Parent or the Company are necessary to authorize and consummate the transactions contemplated thereby. - -21 (e) To the extent the transactions contemplated by this Agreement result in RTZ or its Affiliates becoming an "interested stockholder" (as defined in DGCL 203) of Parent or the Company, the Board of Directors of Parent and the Company, respectively, have approved the transactions contemplated by this Agreement for purposes of DGCL 203. To the extent the transactions contemplated by this Agreement result in RTZ or its Affiliates becoming an "Interested Party" (as defined in the New Certificate of Incorporation), the Board of Directors has approved the transactions contemplated by this Agreement for purposes of paragraph (a) of Article SEVENTH of the New Certificate of Incorporation. The Board of Directors of each of Parent and the Company have approved, for purposes of such 203 and Article SEVENTH, any subsequent acquisitions in one or more transactions by RTZ or its Affiliates of shares of Company Common Stock or warrants, options or other rights to purchase shares of Company Common Stock, or securities convertible into or exchangeable for shares of Company Common Stock, provided that as a result of such acquisitions the shares of Company Common Stock beneficially owned by RTZ and its Affiliates does not equal or exceed the number of Majority Shares. 8.1.4 Title . Parent has good and valid title to any shares of Class B Common Stock beneficially owned by it which shall be exchanged pursuant to Section 9.2.2, and has good and valid title to the shares of Class B Common Stock beneficially owned by it which shall be distributed to RTZA in the Spin-Off, in each case, free and clear of all liens, encumbrances, equities or adverse claims. Parent shall have good and valid title to the shares of Class A Common Stock received upon the exchange pursuant to Section 9.2.2 and sold to the Purchaser pursuant to Article 3 and/or Article 6 hereof, free and clear of all liens, encumbrances, equities or adverse claims. 8.1.5 Compliance with Other Instruments . Neither Parent, the Company nor any of their respective material subsidiaries is in violation of any term of its certificate of incorporation or by-laws, as in effect on the date hereof. None of the execution, delivery and performance of this Agreement or any Related Agreement to which Parent, the Company or any of their respective subsidiaries is a party or any of the transactions contemplated hereby or thereby, does or will, with or without the passage of time or the giving of notice or both, (i) violate, conflict with, or result in a breach of, or default under, any agreement, obligation or commitment to which Parent, the Company or any of their respective subsidiaries is a party or by which Parent, the Company or any of their respective subsidiaries is bound, (ii) assuming the transfers, consents, licenses, approvals, waivers, expirations of waiting periods, authorizations, declarations and filings, if any, set forth in Schedule 8.1.6 are obtained or made, violate any provision of any applicable Law or Permit to which Parent, the Company or any of their respective subsidiaries is subject, (iii) violate any order, judgment or decree applicable to Parent, the Company or any of their respective subsidiaries, (iv) conflict with, or result in a breach of, or default under, any term of Parent's, the Company's or any of their respective - -22 material subsidiaries' certificate of incorporation or by-laws in effect on the date hereof or the New Certificate of Incorporation or New By-laws, or (v) result in the creation of any mortgage, pledge, lien, encumbrance, or charge upon any of the properties or assets of Parent, the Company or any of their respective subsidiaries except, in the case of clauses (i), (ii), (iii) and (v), for any such items which, individually or in the aggregate, would not reasonably be expected (x) to have or result in a Company Material Adverse Effect or a Parent Material Adverse Effect, (y) to materially impair the ability of the Company or Parent to consummate the transactions contemplated by this Agreement or the Related Agreements, or (z) to materially impair the ability of RTZ, RTZA or the Purchaser to receive the benefits of the transactions contemplated by this Agreement or the Related Agreements. 8.1.6 Consents . Except as set forth on Schedule 8.1.6, no transfer, consent, license, approval, waiver, expiration of waiting period, authorization or declaration of, and no filing or registration with, any governmental or regulatory authority or other third party is required to be obtained or made by Parent, the Company or any of their respective subsidiaries in connection with the execution, delivery and performance of this Agreement or any Related Agreement or the consummation of the transactions contemplated hereby and thereby, other than such other transfers, consents, licenses, approvals, waivers, expirations of waiting periods, authorizations, declarations or filings, which if not obtained or made, individually or in the aggregate, would not reasonably be expected (x) to have or result in a Company Material Adverse Effect or a Parent Material Adverse Effect, (y) to materially impair the ability of the Company or Parent to consummate the transactions contemplated by this Agreement or the Related Agreements, or (z) to materially impair the ability of RTZ, RTZA or the Purchaser to receive the benefits of the transactions contemplated by this Agreement or the Related Agreements. 8.1.7 Actions Pending . There is no action, suit, investigation or proceeding pending or (to the knowledge of Parent or the Company) threatened against Parent, the Company or any of their respective subsidiaries or any of their respective properties or assets by or before any court, arbitrator or governmental or regulatory authority, department, commission, board, bureau, agency or instrumentality, which questions the validity or enforceability of, or seeks to enjoin or invalidate, this Agreement or any Related Agreement or any action taken or to be taken pursuant hereto or thereto, or which has had or is reasonably likely to have or result in a Parent Material Adverse Effect or Company Material Adverse Effect, and neither Parent, the Company nor any of their respective subsidiaries is in default in any material respect with respect to any material judgment, order, writ, injunction, decree or award. - -23 8.1.8 SEC Reports. (a) Each of Parent and the Company has filed all registration statements, proxy statements, annual and quarterly reports and other documents required to be filed by it under the Securities Act or Exchange Act since December 31, 1992. Each of the Parent and the Company has delivered to the Purchaser and RTZA its Annual Reports on Form 10-K for the year ended December 31, 1994, and all registration statements, proxy statements, consent solicitation statements and reports under the Securities Act or Exchange Act filed by the Company after such date, each as filed with the SEC (collectively, the "SEC Reports"). Each SEC Report complied as to form in all material respects with the requirements of its respective report form and on the date of filing did not, and any registration statement, report, proxy statement or information statement filed by Parent or the Company with the SEC prior to the Distribution Date will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. (b) Except as otherwise disclosed in the SEC Reports (i) there are no material agreements, obligations or commitments among any of Parent, the Company or any of their respective subsidiaries, Affiliates or stockholders, (ii) Parent, Company and their respective subsidiaries are in compliance in all material respects with all applicable federal, state, local and foreign laws and regulations relating to protection of the environment and human health, and are in compliance with all other applicable federal, state, local and foreign laws and regulations, including, without limitation, those relating to equal employment opportunity, employee safety and health and welfare, except, in either case, where the failure to comply, individually or in the aggregate, has not had or would not reasonably be expected to have or result in a Company Material Adverse Effect or a Parent Material Adverse Effect and (iii) there are no claims, notices, civil, criminal or administrative actions, suits, hearings, investigations, inquiries or proceedings pending or, to the best knowledge of Parent or the Company, threatened, against Parent, the Company or any of their respective subsidiaries that are based on or related to any material environmental matters, including any disposal of hazardous substances at any place, or the failure to have any required environmental permits, and there are no past or present conditions that Parent or the Company has reason to believe are likely to give rise to any material liability or other material obligations of Parent, the Company or any of their respective subsidiaries under any environmental laws. (c) With respect solely to information describing Parent and the Company, at the time the Schedule 14D-1 (and any amendment thereto) is filed, if ever, the Schedule 14D-1 (or any amendment thereto) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or - -24 necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading, provided that Parent and the Company shall have given their prior written consent to any such description prior to the filing of the Schedule 14D-1 (or any amendment thereto). 8.1.9 Financial Statements. The financial statements of Parent and the Company (including any related schedules and/or notes) included in the SEC Reports have been prepared in accordance with GAAP consistently followed (except as indicated in the notes thereto) throughout the periods involved and fairly present the consolidated financial condition, results of operations and changes in stockholders' equity of Parent and the Company, respectively, as of the dates thereof and for the periods ended on such dates (in each case subject, as to interim statements, to changes resulting from year-end adjustments, none of which will be material in amount or effect), and neither Parent nor the Company has any material Liabilities not reflected in Parent's or the Company's balance sheet as of December 31, 1994, included in the SEC Reports, other than any such liabilities incurred in the ordinary course of business since December 31, 1994 or as set forth on Schedule 8.1.9. Except as otherwise contemplated by this Agreement, any Related Agreement, any Affiliate Agreement or the Consent Solicitation Statement, since December 31, 1994, each of Parent, the Company and their respective subsidiaries have operated their respective businesses only in the ordinary course and there has been no event or events which, individually or in the aggregate, have had or would reasonably be expected to have or result in a Parent Material Adverse Effect or a Company Material Adverse Effect. 8.1.10 Compliance with Laws; Permits. Except as set forth on Schedule 8.1.10, each of Parent, the Company and their respective subsidiaries is in compliance with all Laws, except where noncompliance, individually or in the aggregate, has not had or would not reasonably be expected to have or result in a Parent Material Adverse Effect or a Company Material Adverse Effect. Except as set forth on Schedule 8.1.10, none of Parent, the Company or any of their respective subsidiaries has received any notice of any alleged violation of Law applicable to it or any of their respective Affiliates from a governmental or regulatory authority of proper jurisdiction, or any formal notice of any alleged violation of Law applicable to it or any of their respective Affiliates from any other Person, other than any alleged violation, which if proven, would not reasonably be expected to have or result in a Company Material Adverse Effect or a Parent Material Adverse Effect. Except as set forth on Schedule 8.1.10, each of Parent, the Company and their respective subsidiaries has all Permits required for the conduct of its business as presently conducted and the ownership, maintenance or operation of its properties and assets ("Material Permits," which shall not include any such Permits, the failure of which to have, individually or in the aggregate, would not reasonably be expected to have or result in a Company Material Adverse Effect or a Parent Material Adverse Effect). All of such Material Permits are valid and in full - -25 force and effect. The holder of each Permit has duly performed and is in compliance with all of its obligations under such Permits, except to the extent that noncompliance, individually or in the aggregate, would not reasonably be expected to have or result in a Company Material Adverse Effect or a Parent Material Adverse Effect. No event has occurred with respect to the Material Permits which allows, or after notice or lapse of time or both would allow, the suspension, limitation, revocation, non-renewal or termination thereof or would result in any other material impairment of the rights of the holder thereof in and under any of the Material Permits, and no terminations thereof or proceedings to suspend, limit, revoke or terminate any Material Permit (to the knowledge of Parent or the Company) have been threatened. 8.1.11 Books and Records. All the books, records and accounts of Parent, the Company and their respective subsidiaries are in all material respects true and complete, are maintained in accordance with good business practice and all Laws applicable to its business, and accurately present and reflect in all material respects all of the transactions therein described. 8.1.12 Financial Advisors and Brokers. Other than PaineWebber Incorporated, whose fees and expenses will be paid by Parent, none of Parent, the Company or any of their respective subsidiaries has employed any investment banker, broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions, finders' fees or similar payment in connection with the transactions contemplated hereby. 8.1.13 Accuracy of Information. All documents delivered by or on behalf of Parent, the Company or their respective subsidiaries in connection with this Agreement are true and correct in all material respects. To the best of the knowledge of Parent and the Company, neither this Agreement nor any Related Agreement nor any certificate, information, documents or other written disclosure document referred to herein or furnished to RTZ or any of its Affiliates pursuant to this Agreement or any Related Agreement or in connection with the transactions contemplated hereby or thereby contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made, in the context in which made, not materially false or misleading. To the best knowledge of Parent and the Company, there is no fact that has not been disclosed to RTZ that could reasonably be expected to impair the ability of Parent, the Company or their respective subsidiaries to perform this Agreement or any Related Agreement and the transactions contemplated hereby and thereby or to materially impair the ability of RTZ, RTZA or the Purchaser to receive the benefits of the transactions contemplated by this Agreement or the Related Agreements. 8.1.14 Consolidated Group. For federal income tax purposes, the Company is not and will not be a member of a consolidated return group of - -26 which Parent is a member in the tax year in which the Spin-Off occurs. Except as set forth on Schedule 8.1.14, which exceptions relate to (i) consolidated, combined or unitary return positions required on audit or other administrative review, or (ii) in the case of returns as filed in which Parent has reported the foreign metals business as a separate line of business, for state and local income tax purposes, the Company is not and will not be a member of a consolidated or combined or unitary return group of which Parent is a member in the tax year in which the Spin-Off occurs. 8.1.15 Tax Sharing Agreement. Except (i) as set forth on Schedule 8.1.15, which exceptions pertain solely to continuing obligations with respect to years prior to the year in which the Spin-Off occurs or (ii) with respect to the provisions of the Distribution Agreement, as described in Exhibit 8.1.15, neither the Company nor any of its subsidiaries is a party to, and neither has any rights or obligations under, any tax sharing agreement or arrangement or similar understanding to which Parent is a member or to any contract which would otherwise subject the Company or any of its subsidiaries to any liability for taxes (including interest and penalties) of Parent or any of its Affiliates (other than the Company and its subsidiaries). 8.2 Representations and Warranties of RTZ, the Purchaser and RTZA. Each of RTZ, the Purchaser and RTZA represents and warrants to Parent and the Company as follows: 8.2.1 Organization. Each of RTZ, RTZA and the Purchaser is a company duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization. 8.2.2 Authority. Each of RTZ, the Purchaser and RTZA has the requisite corporate power and authority to enter into this Agreement and the Related Agreements to which it is or will be a party and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Related Agreements to which it is or will be a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by each of RTZ's, the Purchaser's and RTZA's Board of Directors and no other corporate proceedings on the part of RTZ, the Purchaser or RTZA are necessary to authorize this Agreement or the Related Agreements to which it is or will be a party or the transactions contemplated hereby and thereby. This Agreement has been, and the Related Agreements, when executed and delivered by each of RTZ, the Purchaser and RTZA, as the case may be, pursuant to Article 2 hereof, will be, duly and validly executed and delivered by each of RTZ, the Purchaser and RTZA, respectively. This Agreement constitutes, and the Related Agreements, when executed and delivered by each of RTZ, the Purchaser and RTZA, as the case may be, pursuant to Article 2 hereof, will constitute, a valid and binding agreement of each of RTZ, the Purchaser and RTZA, respectively, enforceable - -27 against RTZ, the Purchaser and RTZA, respectively, in accordance with their respective terms, subject to bankruptcy, reorganization, insolvency, moratorium and other Laws affecting the enforcement of creditors' rights generally and subject to general equitable principles. 8.2.3 Compliance with Other Instruments. None of the execution, delivery and performance of this Agreement or any Related Agreement to which RTZ, RTZA or the Purchaser or any of their respective subsidiaries is a party or any of the transactions contemplated hereby or thereby, does or will, with or without the passage of time or the giving of notice or both, (i) violate, conflict with, or result in a breach of, or default under, any agreement, obligation or commitment to which RTZ, RTZA or the Purchaser or any of their respective subsidiaries is a party or by which RTZ, RTZA or the Purchaser or any of their respective subsidiaries is bound, (ii) assuming the transfers, consents, licenses, approvals, waivers, expirations of waiting periods, authorizations, declarations and filings, if any, set forth in Schedule 8.2.4 are obtained or made, violate any provision of any applicable Law or Permit to which RTZ, RTZA or the Purchaser or any of their respective subsidiaries is subject, (iii) violate any order, judgment, or decree applicable to RTZ, RTZA or the Purchaser or any of their respective subsidiaries, or (iv) conflict with, or result in a breach of or default under, any term of RTZ's, RTZA's or the Purchaser's or any of their respective material subsidiaries' constituent documents in effect on the date hereof, except, in the case of clause (i), (ii) or (iii), for any such items which, individually or in the aggregate, would not reasonably be expected to materially impair the ability of RTZ, RTZA or the Purchaser to consummate the transactions contemplated by this Agreement or the Related Agreements. 8.2.4 Consents. Except as set forth on Schedule 8.2.4, no transfer, consent, license, approval, waiver, expiration of waiting period, authorization or declaration of, and no filing or registration with, any governmental or regulatory authority is required to be obtained or made by RTZ, the Purchaser or RTZA in connection with the execution, delivery and performance of this Agreement or any Related Agreement or the transactions contemplated hereby or thereby, other than such other transfers, consents, licenses, approvals, waivers, expirations of waiting periods, authorizations, declarations or filings, which if not obtained or made, individually or in the aggregate, would not reasonably be expected to materially impair the ability of RTZ, RTZA or the Purchaser to consummate the transactions contemplated by this Agreement or the Related Agreements. 8.2.5 Actions Pending. There is no action, suit, investigation or proceeding pending or (to the knowledge of RTZ, the Purchaser or RTZA) threatened against RTZ, the Purchaser or RTZA or any of their respective subsidiaries by or before any court, arbitrator or governmental or regulatory authority, department, commission, board, bureau, agency or instrumentality, which questions the - -28 validity or enforceability of, or seeks to enjoin or invalidate, this Agreement or any Related Agreement or any action taken or to be taken pursuant hereto or thereto. 8.2.6 Investment Representations. The Purchaser is acquiring the shares of Class A Common Stock pursuant to this Agreement for its own account, solely for investment purposes and not with a view to, or for resale in connection with, the distribution thereof in violation of federal or applicable state securities laws. 8.2.7 Financial Advisors and Brokers. Other than Lehman Brothers, Inc., whose fees and expenses will be paid by RTZ, RTZA and/or the Purchaser, neither the Purchaser nor RTZA has employed any investment banker, broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions, finders' fees or similar payment in connection with the transactions contemplated hereby. 8.2.8 Ownership of Securities of Parent and the Company. As of the date of this Agreement, RTZ, RTZA, the Purchaser and their respective Affiliates do not together own more than 1% of the outstanding capital stock of Parent or of the Company. 8.2.9 Accuracy of Information. To the best of the knowledge of RTZ, RTZA and the Purchaser, no representation or warranty of RTZ, RTZA or the Purchaser contained in this Agreement, any Related Agreement or in any Schedule or Exhibit hereto or thereto contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made, in the context in which made, not materially false or misleading. 9. Covenants. 9.1 Covenants of All Parties. Each of the parties hereto covenants and agrees as follows: 9.1.1 Cooperation. The parties hereto shall use their respective reasonable efforts, and shall cooperate with each other, to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable, to cause the conditions set forth in Article 10 to be satisfied and to cause the consummation of the transactions contemplated by this Agreement and the Related Agreements in accordance with the terms and conditions hereof and thereof. 9.1.2 Breach of Representations and Warranties. None of the parties hereto will knowingly or voluntarily take any action which would cause or constitute a material breach of any of the representations or warranties set forth in Article 8 hereof, or which would cause any of such respective representations and - -29 warranties to be materially inaccurate. Each of the parties will, in the event of, and promptly after becoming aware of the occurrence of, or the pending or threatened occurrence of, such a material breach or inaccuracy, notify the other parties of such breach or inaccuracy in reasonable detail and will use its reasonable efforts to prevent or promptly remedy such breach or inaccuracy. 9.1.3 Communications with Regulators. (a) With respect to the transactions contemplated by this Agreement and the Related Agreements, but except with respect to the IRS, each of Parent and the Company on the one hand, and each of the Purchaser and RTZA, on the other hand, shall notify the other parties promptly of the receipt by it of any comments from the SEC, the NYSE or any other governmental or regulatory authority (other than the IRS) or their respective staffs and of any request by the SEC, the NYSE or any other governmental or regulatory authority (other than the IRS) for amendments or supplements to any filings made by or on behalf of it or for additional information and will supply the other parties with copies of all correspondence between it and its representatives, on the one hand, and the SEC, the NYSE or any other governmental or regulatory authority (other than the IRS) or the members of their respective staffs or any other governmental officials (other than the IRS), on the other hand, with respect to any filings made by or on behalf of it. (b) Each of Parent and the Company (i) shall notify RTZA promptly of the receipt by Parent or the Company of any comments from the IRS or its staff regarding the Spin-Off and of any request by the IRS for amendments or supplements to the Spin-Off Private Letter Ruling or for additional information, (ii) shall supply RTZA with draft copies of all written correspondence from it or its representatives in sufficient time so as to give RTZA and its representatives an opportunity to comment on such correspondence, shall consider all such comments in good faith and, in particular, shall not make any representations about RTZ or its Affiliates without RTZ's written consent, (iii) shall supply RTZA with copies of all correspondence between it and its representatives, on the one hand, and the IRS or the members of its staff or any other governmental officials, on the other hand, with respect to the Spin-Off Private Letter Ruling, and (iv) shall advise RTZA of any proposed meetings (including telephonic conferences) with the IRS in advance thereof and permit, to the extent practicable, determined in Parent's or the Company's good faith judgment, as the case may be, a representative of RTZA to attend such meetings (including telephonic conferences) and to participate therein to the extent such meetings discuss RTZ or any of its Affiliates; provided, however, to the extent that it is not practicable for RTZA to attend any such meetings, Parent or Company, as the case may be, shall promptly notify RTZA of the content of such meetings (including telephonic conferences). - -30 9.1.4 Affiliate Agreements. Each of Parent and the Company shall take, or cause to be taken, all actions and do, or cause to be done, all things, and shall cause their respective Affiliates to take, or cause to be taken, all actions and do, or cause to be done, all things, necessary or appropriate pursuant to any agreement between Parent, the Company or any of their respective Affiliates, on the one hand, and RTZ, the Purchaser, RTZA or any of their respective Affiliates, on the other hand (collectively, the "Affiliate Agreements"), and each of RTZ, the Purchaser and RTZA shall take, or cause to be taken, all actions and do, or cause to be done all things, and shall cause their respective Affiliates to take, or cause to be taken, all actions and do, or cause to be done, all things, necessary or appropriate pursuant to any Affiliate Agreements. 9.1.5 Certain Specified Actions. Each of Parent, Company, RTZ, RTZA and the Purchaser shall not take any of the actions specified on Schedule 9.1.5 during the periods specified therein. 9.2 Covenants of Parent and the Company. In addition to the covenants and agreements in Section 9.1 hereof, each of Parent and the Company covenants and agrees as follows: 9.2.1 Conduct of Business Pending the Spin-Off. Except as otherwise contemplated by this Agreement, the Consent Solicitation Statement or any Affiliate Agreement or as specified in Schedule 9.2.1, from and after the date hereof and prior to completion of the Spin-Off, neither Parent nor the Company shall, without the prior written consent of the Purchaser and RTZA, enter into any transaction, contract, agreement, commitment, plan or arrangement which would reasonably be expected to have or result in a Parent Material Adverse Effect or a Company Material Adverse Effect or would materially impair or materially adversely affect the ability of Parent, the Company or any of their respective Affiliates or the Purchaser, RTZA or any of their respective Affiliates to consummate the transactions contemplated by this Agreement, the Consent Solicitation Statement or any Affiliate Agreement or would reasonably be expected to materially impair the ability of RTZ, RTZA or the Purchaser to receive the benefits of the transactions contemplated by this Agreement or any Affiliate Agreement (including any transaction, contract, agreement, commitment, plan, arrangement or other action which might impair or adversely affect the Spin-Off Private Letter Ruling). As of the date of the Spin-Off, the representations referred to in Exhibit 8.1.15 shall be reaffirmed between Parent and the Company pursuant to the Distribution Agreement. Subsequent to the completion of the Spin-Off, neither Parent nor the Company shall, without the prior written consent of RTZA, take any prohibited actions described in Exhibit 8.1.15. Notwithstanding anything to the contrary contained in this Section 9.2.1, Parent and the Company shall have the right to take any action described in this Section 9.2.1 (including activities described in Exhibit 8.1.15) if they first obtain either a - -31 supplemental private letter ruling from the IRS or an opinion of nationally recognized tax counsel, reasonably satisfactory to RTZ, that such action shall not adversely affect the tax-free nature of the Spin-Off or the ability of Parent to rely on the Spin-Off Private Letter Ruling. 9.2.2 Exchange of Shares. On or prior to the Stock Closing Date and each Additional Stock Closing Date, the Company shall issue and deliver to Parent, in exchange for shares of Class B Common Stock owned by Parent, a sufficient number of shares of Class A Common Stock to permit Parent to consummate the applicable transactions on such closing date as contemplated by Article 3 or Article 6 hereof, as the case may be. 9.2.3 Certain Arrangements Following the Spin-Off. As promptly as practicable after the date hereof, Parent and the Company shall enter into (i) a Benefit Allocation Agreement containing substantially the same terms set forth in Exhibit C and (ii) a Transition Management Services Agreement containing substantially the same terms set forth in Exhibit D. 9.3 Covenants of Parent. In addition to the covenants and agreements in Section 9.1 and 9.2 hereof, Parent covenants and agrees as follows: 9.3.1 Minimum Price of Sales. From and after the date hereof and prior to completion of the Spin-Off, without the prior written consent of RTZ, Parent shall not sell, transfer, assign, exchange or otherwise dispose of any shares of Class A Common Stock or Class B Common Stock owned by it, or grant any option or right to purchase such shares or any legal or beneficial interest therein for a purchase price per share of less than $20.90. 9.4 Covenants of the Company. In addition to the covenants and agreements set forth in Section 9.1 and 9.2, the Company covenants and agrees as follows: 9.4.1 Right to Nominate Directors. After completion of the Purchaser's purchase of Class A Common Shares pursuant to Article 3, the Purchaser and RTZA will have the right to nominate for submission to the Company's stockholders at stockholders' meetings or in connection with any consent solicitation for the election of directors, the number of directors (rounded to the nearest whole number) (which nominees may be nominees for Class A Directors or Class B Directors) which is proportionately equal to the aggregate percentage ownership of the Purchaser and RTZA of all outstanding shares of Class A Common Stock and Class B Common Stock; provided, that the percentage that the number of Class B Directors nominated by the Purchaser and RTZA bears to the total number of Class B Directors shall not exceed the - -32 percentage that the number of shares of Class B Common Stock owned by the Purchaser and RTZA bears to the total number of outstanding shares of Class B Common Stock (rounded down to the nearest whole number). The Company shall include the directors nominated pursuant to the foregoing sentence in the directors recommended by management, and shall not take any actions which may be inconsistent with, conflict with, or otherwise hinder, the election of such individuals. No later than the earlier of 60 days after the Distribution Date or January 2, 1996, the Company shall appoint the number of persons nominated by the Purchaser and RTZA in accordance with the foregoing sentence as interim directors to take office until the next stockholders' meeting or consent solicitation for the election of directors. Notwithstanding anything contained herein to the contrary, (i) if the number of directors of the Company is less than ten, the Purchaser and RTZA will have the right to so nominate for submission to the Company's stockholders, no less than one Class A Director, provided that the Purchaser continues to hold substantially all the shares of Class A Common Stock purchased hereunder, and (ii) if at any time the Company shall no longer be subject to the reporting requirements of the Exchange Act, the Company shall cause the directors nominated by the Purchaser and RTZA in accordance with this Section 9.4.1 to be elected as directors. 9.5 Covenants of RTZ, RTZA and the Purchaser. In addition to the covenants and agreements set forth in Section 9.1, RTZA covenants and agrees as follows: 9.5.1 Lack of Certain Stock Ownership. Except as a result of the transactions described in this Agreement, RTZ, RTZA, the Purchaser and their Affiliates will not acquire any shares of $4.375 Parent Preferred Stock, Parent Common Stock or Company Voting Stock at any point during the period from and including the date hereof to and including the Distribution Date. 9.5.2 Certain Specified Actions. Each of RTZ, RTZA and the Purchaser shall not take any of the actions specified on Schedule 9.5.2 during the periods specified therein. 9.6 Additional Covenants. 9.6.1 Future Acquisitions. RTZ and its Affiliates will not be directly or indirectly restricted from future acquisitions of shares of Company Voting Stock, except that approval of the Company Board of Directors will be required for RTZ or its Affiliates, alone or acting in concert with others, to acquire beneficial ownership of shares of Company Voting Stock equal to the Majority Shares. Without limiting the generality of the foregoing, the Board of Directors of each of Parent and the Company hereby agree that if the Company adopts a "rights plan," "poison pill" or other plan or arrangement which provides for the distribution to its shareholders, by way of dividend or - -33 otherwise, of shares of capital stock of the Company, warrants, options or other rights to purchase shares of capital stock of the Company, or securities convertible into or exchangeable for shares of capital stock of the Company, upon the occurrence of specified events, then any transactions between the Company and any of its Affiliates, on the one hand, and RTZ and any of its Affiliates, on the other hand, and any transactions by RTZ or its Affiliates relating to shares of the capital stock of the Company, or warrants, options or other rights to purchase shares of capital stock of the Company, or securities convertible into or exchangeable for shares of capital stock of the Company shall be excluded from such specified events, unless such transactions result in the acquisition by RTZ and its Affiliates of beneficial ownership of shares of Company Voting Stock equal to the Majority Shares. 9.6.2 Voting. RTZ, RTZA and the Purchaser agree that if at any time, and for so long as, RTZ, RTZA, the Purchaser or their Affiliates beneficially own, in the aggregate, more than 5% of the outstanding shares of Company Voting Stock, and directors nominated pursuant to Section 9.4.1 (or replacements therefor) continue to serve as directors of the Company, RTZ, RTZA and the Purchaser (i) shall cause all such Company Voting Stock as of the record date of each stockholder meeting or consent of stockholders of the Company to be represented, in person or by proxy, at each such meeting or in such consent, and (ii) shall, with respect to any action at any stockholder meeting or by consent of the stockholders of the Company which action relates solely to the electing of directors, cause all such Company Voting Stock to be voted at each such meeting or by such consent for election of the slate of directors as affirmatively recommended by a majority of the Board of Directors of the Company, which will include the nominees of the Purchaser and RTZA pursuant to Section 9.4.1 hereof. 10. Conditions to Stock Closings. 10.1 Conditions to Stock Closing. 10.1.1 Conditions to the Obligations of All Parties. The obligations of each of the parties hereto to consummate the Stock Closing shall be subject to the satisfaction (or waiver by each of the parties hereto) at or prior to the Stock Closing of each of the following conditions: (a) The consummation of the Stock Closing and the consummation of the other transactions contemplated by this Agreement or any Affiliate Agreement shall not be prohibited by any order or injunction of a United States federal or state court of competent jurisdiction, or other governmental or regulatory authority of competent jurisdiction of the United States, the United Kingdom, Indonesia, or Spain, and there shall not have been any action taken or any statute, rule or regulation enacted, promulgated or deemed applicable to the Stock Closing or the other transactions - -34 contemplated by this Agreement or any Affiliate Agreement by any United States federal or state government or governmental agency or other governmental or regulatory authority of competent jurisdiction of the United States, the United Kingdom, Indonesia, or Spain, that makes consummation of the Stock Closing or such transactions illegal. (b) Each other party and its Affiliates shall have complied in all material respects with its agreements and covenants contained herein or in any Affiliate Agreement to be performed on or prior to the Stock Closing, and all representations and warranties of each other party and its Affiliates contained herein or in any Affiliate Agreement shall be true and correct in all material respects on and as of the Stock Closing with the same effect as though made on and as of the Stock Closing Date. (c) All consents, approvals, authorizations, exemptions and waivers from governmental agencies as specified in Schedules 8.1.6 and 8.2.4 and required to consummate the transactions contemplated by this Agreement and any Affiliate Agreement shall have been obtained (except for such consents, approvals, authorizations, exemptions and waivers, the absence of which would not prohibit such sale or render such sale illegal). 10.1.2 Conditions to Obligations of the Purchaser. The obligations of the Purchaser to consummate the Stock Closing shall be subject to the satisfaction (or waiver by the Purchaser) of each of the following additional conditions: (a) The Purchaser shall have received the opinion of Davis Polk & Wardwell, counsel for Parent and the Company, in form and substance reasonably requested by Purchaser. (b) Each of Parent and the Company shall have delivered to the Purchaser a certificate of the President and the chief financial officer of each of Parent and the Company, dated the Stock Closing Date, satisfactory in form and substance to the Purchaser and its counsel, certifying that (i) each of Parent and the Company has complied in all material respects with its agreements and covenants contained herein to be performed on or prior to the Stock Closing, and (ii) all representations and warranties of Parent and the Company set forth in Article 8 hereof are true and correct in all material respects on and as of the Stock Closing with the same effect as though made on and as of the Stock Closing Date. (c) Each of Parent and the Company shall have delivered to the Purchaser resolutions of the Board of Directors of Parent and the Company, respectively, duly certified by the Secretary of Parent and the Company, respectively, authorizing and approving the transactions contemplated hereby. - -35 (d) No event shall have occurred or be threatened which is reasonably likely to make impossible or impracticable the satisfaction of any express condition to the effectiveness of or closing under any Affiliate Agreement. (e) Purchaser shall have received a certificate of the chief financial officer of Parent, dated the date of the Stock Closing, to the effect that, to the best of his knowledge, no event has occurred or is contemplated by this Agreement which causes Parent to believe that the nonrecognition provisions of Code Section 355(a)(1) and (c) shall not apply with respect to the Spin-Off, other than as a result of Code Section 367(e). (f) Each of Parent and the Company shall have received the consent of the banks party to Parent's current credit facilities, in form and substance reasonably satisfactory to Parent and the Company, and such consents shall not have been revoked or Parent and the Company shall have received assurances satisfactory to Parent and the Company that such consents will be forthcoming. 10.1.3 Conditions to Obligations of Parent. The obligations of Parent to consummate the Stock Closing shall be subject to the satisfaction or waiver by Parent to each of the following additional conditions: (a) Parent shall have received the opinion of Fried, Frank, Harris, Shriver & Jacobson, counsel for RTZ, the Purchaser and RTZA, and the opinion of C.H.H. Lawton, Esq. of RTZ, in each case, in form and substance reasonably requested by Parent. (b) Each of RTZ, the Purchaser and RTZA shall have delivered to Parent a certificate of the President and the chief financial officer of each of the Purchaser and RTZA, dated the Stock Closing Date, satisfactory in form and substance to Parent and its counsel, certifying that (i) each of RTZ, the Purchaser and RTZA has complied in all material respects with its agreements and covenants contained herein to be performed on or prior to the Stock Closing and (ii) all representations and warranties of each of RTZ, the Purchaser and RTZA set forth in Article 8 hereof are true and correct in all material respects on and as of the Stock Closing with the same effect as though made on and as of the Stock Closing Date. (c) No event shall have occurred or be threatened which is reasonably likely to make impossible or impracticable the satisfaction of any express condition to the effectiveness of or closing under any Affiliate Agreement. (d) Nothing shall have occurred which causes Parent to believe that the nonrecognition provisions of Code Section 355(a)(1) and (c) shall not apply with respect to the Spin-Off, other than as a result of Code Section 367(e). - -36 10.2 Conditions to Additional Stock Closings. 10.2.1 Conditions to the Obligations of All Parties. The obligations of each of the parties hereto to consummate each Additional Stock Closing shall be subject to the satisfaction or waiver by each of the parties hereto of each of the following conditions: (a) The Stock Closing shall have been consummated. (b) The consummation of such Additional Stock Closing shall not be prohibited by any order or injunction of a United States federal or state court of competent jurisdiction, or other governmental or regulatory authority of competent jurisdiction of the United States, the United Kingdom, Indonesia, or Spain, and there shall not have been any action taken or any statute, rule or regulation enacted, promulgated or deemed applicable to such Additional Stock Closing by any United States federal or state government or governmental agency or other governmental or regulatory authority of competent jurisdiction of the United States, the United Kingdom, Indonesia, or Spain, that makes consummation of such Additional Stock Closing illegal. 10.2.2 Conditions to Obligations of the Purchaser. The obligations of the Purchaser to consummate each Additional Stock Closing shall be subject to the satisfaction (or waiver by the Purchaser) of each of the following conditions: prior to the date the notice of redemption of the 6.55% Notes is sent to the Trustee and the holders thereof, (i) there shall have occurred no Company Material Adverse Effect or Parent Material Adverse Effect and (ii) no change (or any condition, event or development) shall have occurred which, with or without the giving of notice or lapse of time, is reasonably likely to result in a Company Material Adverse Effect or Parent Material Adverse Effect. 11. Preemptive Rights; Rights of First Offer. (a) In case of the proposed issuance, sale or grant by the Company of shares of Company Common Stock or securities convertible into or exchangeable for, or warrants, options or other rights to purchase, shares of Company Common Stock, the Company shall deliver to the Purchaser written notice of its intent to issue, sell or grant such securities, which shall specify the number and kind of securities proposed to be issued, sold or granted, whether such issuance, sale or grant will be effected through a transaction involving a Public Offering or otherwise, and, if the transaction does not involve a Public Offering, the amount and type of consideration which the Company proposes to be paid for such securities (the "Offer Price"), and the - -37 other material terms and conditions of the proposed issuance, sale or grant (the "Company Notice"). (b) In the event of any such proposed issuance, sale or grant in any transaction involving a Public Offering, the Purchaser shall have the right, exercisable by written notice to the Company in accordance with Section 11(e), to purchase up to such number of shares of Company Common Stock, or securities, warrants, options or rights as will preserve the Purchaser's and RTZA's then existing percentage ownership of the outstanding shares of Company Common Stock as at a record date not more than 30 days prior to such issuance, sale or grant; provided that any such purchases made by the Purchaser pursuant to this Section 11(b) shall be made (i) at the time of the closing with respect to such Public Offering and in accordance with the Purchaser Notice given prior to the effective date of the registration statement related thereto, (ii) pursuant to an exemption from the registration requirements of the Securities Act and (iii) at a price equal to the public offering price of such shares of Company Common Stock or such securities, warrants, options or rights. The term "Public Offering" means an offering of any such securities pursuant to a registration statement under the Securities Act which results in the widespread distribution of such securities to the public. (c) Subject to Section 11(d), in the event of any such proposed issuance, sale or grant in any transaction not involving a Public Offering, the Purchaser shall have the right, exercisable by written notice to the Company in accordance with Section 11(e), to purchase (i) such number of shares of Company Common Stock, or securities, warrants, options or rights, as will preserve the Purchaser's and RTZA's then existing percentage ownership of the outstanding shares of Company Common Stock as at a record date not more than 30 days prior to such issuance, sale or grant, or (ii) all of such shares of Company Common Stock, securities, warrants, options or rights, provided that approval of the Company Board of Directors will be required to the extent that as a result of such purchases the shares of Company Voting Stock beneficially owned by RTZ and its Affiliates, alone or acting in concert with others, equals or exceeds the number of Majority Shares. (d) In the event of any such proposed issuance, sale or grant of any such securities in connection with any acquisition of securities or assets of another company or otherwise, the Purchaser shall have the right, exercisable by written notice to the Company in accordance with Section 11(e), to purchase up to such number of shares of Company Common Stock, or securities, warrants, options or rights as will preserve the Purchaser's and RTZA's then existing percentage ownership of the outstanding shares of Company Common Stock as at a record date not more than 30 days prior to such issuance, sale or grant. - -38 (e) Any issuance, sale or grant by the Company to the Purchaser pursuant to this Section 11 shall be on terms no less favorable than that of the proposed issuance, sale or grant and for a price in cash and, with respect to securities offered pursuant to Section 11(b) hereof, for a price equal to the public offering price per share, and, with respect to securities offered pursuant to Section 11(c) or Section 11(d) hereof, for a price no greater than the Offer Price; provided that in the event of any transaction contemplated by Section 11(b) or Section 11(c) for consideration other than cash or any transaction contemplated by Section 11.1(d), the purchase price per share of such securities purchased by the Purchaser shall be in cash and shall be no greater than the average of the closing prices of such securities on the NYSE or other national securities exchange on which such securities are listed or quoted for the 10 business days preceding the announcement of such transaction, or if the security is not so listed or authorized for quotation, the product of the average of the closing bid and asked prices reported by the National Association of Securities Dealers Automated Quotation System for the ten business days preceding the announcement of such transaction, or if not so listed or authorized for quotation, the fair market value of the securities as agreed between the Purchaser and the Company or, failing agreement within 10 days from the establishment of the Offer Price, as determined by an independent appraiser mutually acceptable to the Purchaser and the Company. (f) Within 10 business days after the date of receipt by the Purchaser of the Company Notice, the Purchaser shall send the Purchaser Notice to the Company. The term "Purchaser Notice" means any written notice given by the Purchaser, pursuant to which the Purchaser elects whether to purchase securities in accordance with this Section 11 and, in the case of a transaction contemplated by Section 11(c), which states whether the Purchaser elects to purchase its proportionate share or all of the securities. The Purchaser Notice shall be deemed to be an irrevocable commitment to purchase from the Company the number of securities which the Purchaser specifies in the Purchaser Notice. The closing of any purchase of securities pursuant to this Article 11 shall occur as promptly as practicable after receipt by the Company of the Purchaser Notice, on such date and at such time as the Purchaser and the Company shall agree; provided that such closing will not take place earlier than the date of the issuance, sale or grant giving rise to the Purchaser's rights under this Article 11. Such closing shall take place at the offices of Fried, Frank, Harris, Shriver & Jacobson, presently at One New York Plaza, New York, New York 10004, or at such other place as the Purchaser and the Company shall agree. (g) If the Purchaser fails to deliver the Purchaser Notice within 10 business days after receipt of the Company Notice, or if in the Purchaser Notice the Purchaser elects not to purchase securities in accordance with this Article 11, then the Company (i) shall be under no obligation to sell any of the securities proposed to be issued, sold or granted to the Purchaser, and (ii) may, within a period of six months from - -39 the date of the Company Notice, sell all the securities proposed to be issued, sold or granted to one or more third parties for cash at a price per share which, with respect to shares offered pursuant to Section 11(b) hereof, shall be not less than the public offering price per share, and, with respect to securities offered pursuant to Section 11(c) or Section 11(d) hereof, shall be not less than the Offer Price. (h) The provisions of Section 11 shall not apply to any of the following transactions: (i) the grant of stock options to any director, officer or employee of the Company, or any consultant or advisor who is receiving cash compensation from the Company; (ii) the issuance of shares of Company Common Stock upon the exercise of any of the options specified in clause (i) above; and (iii) the issuance of shares of Company Common Stock issued pursuant to the terms of warrants, options, rights or convertible or exchangeable securities (x) as set forth on Schedule 8.1.2 or (y) issued, sold or granted in compliance with the provisions of this Article 11. 12. Termination. 12.1 Termination Prior to Stock Closing. This Agreement may be terminated and the transactions contemplated by this Agreement and the Related Agreements may be abandoned at any time prior to the Stock Closing: (i) by the mutual written consent of the parties hereto; or (ii) by any party hereto, if there is a failure of any of the conditions specified in Section 10.1.1 hereof or the Stock Closing has not taken place on or prior to December 31, 1995. 12.2 Effect of Termination. In the event this Agreement is terminated pursuant to Section 12.1.1, all further obligations of the parties hereunder shall terminate, except that nothing in this Article 12 shall relieve any party hereto of any liability for breach of this Agreement. 13. Miscellaneous. 13.1 Transfer Taxes. Parent and the Company jointly and severally agree that it will pay, and will hold the Purchaser and RTZA harmless from, any and all liability with respect to any United States federal, state and local stamp or similar transfer taxes which may be determined to be payable in connection with the execution and delivery and performance of this Agreement or any Related Agreement and the transactions described herein and therein or any modification, amendment or alteration of the terms or provisions of this Agreement or any Related Agreement and the transactions described herein and therein. - -40 13.2 Survival of Representations, Warranties and Agreements, Etc. All representations and warranties contained herein or made in writing by any party in connection herewith shall survive the execution and delivery of this Agreement, except that the representations and warranties contained in Sections 8.1.7, 8.1.8, 8.1.9, 8.1.10, 8.1.11, 8.1.13, 8.2.5 and 8.2.9 hereof shall survive the execution and delivery of this Agreement only until the date which is 2 years after the Distribution Date. All statements contained in any certificate or other instrument delivered by Parent or the Company pursuant to this Agreement or any Related Agreement or in connection with the transactions contemplated hereby or thereby shall constitute representations and warranties by the Parent or the Company under this Agreement. All agreements contained herein shall survive indefinitely until, by their respective terms, they are no longer operative. 13.3 Expenses. Except as otherwise provided herein, each of Parent, the Company, RTZ, the Purchaser and RTZA shall pay all costs and expenses incurred by it or on its behalf in connection with this Agreement, any Related Agreement and the transactions contemplated hereby and thereby, including, without limiting the generality of the foregoing, fees and expenses of its own financial consultants, accountants and counsel. 13.4 Indemnification. (a) Parent shall indemnify, defend and hold harmless RTZ, the Purchaser and RTZA against all liability, loss or damage, together with all reasonable costs and expenses related thereto (including reasonable legal and accounting fees and expenses) ("RTZ Damages") incurred or suffered by RTZ, the Purchaser or RTZA, arising from the untruth, inaccuracy or breach of any of the representations, warranties, covenants or agreements made by Parent herein. (b) The Company shall indemnify, defend and hold harmless RTZ, the Purchaser and RTZA against all RTZ Damages incurred or suffered by RTZ, the Purchaser or RTZA, arising from the untruth, inaccuracy or breach of any of the representations, warranties, covenants or agreements made by the Company herein. (c) RTZ, the Purchaser and RTZA, jointly and severally, shall indemnify, defend and hold harmless Parent and the Company against all liability, loss or damage, together with all reasonable costs and expenses related thereto (including reasonable legal and accounting fees and expenses), incurred or suffered by Parent or the Company arising from the untruth, inaccuracy or breach of any of the representations, warranties, covenants or agreements made by each of them herein. - -41 (d) Any party seeking indemnification hereunder (the "Indemnified Party") (i) shall promptly notify the other party (the "Indemnifying Party") of the pendency of any claim or proceeding asserted by any third party against the Indemnified Party pursuant to which indemnity may be sought hereunder, (ii) shall permit the Indemnifying Party to assume the defense of the Indemnified Party with respect to any such claim or proceeding at the Indemnifying Party's sole cost and expense, and (iii) shall not settle any claim or proceeding for which indemnity may be sought hereunder without the consent of the Indemnifying Party. Except as otherwise provided for in this Agreement (including without limitation Section 13.8 hereof), this Section 13.4 shall provide the exclusive remedy for any misrepresentation or breach of warranty, covenant, or agreement arising out of this Agreement or the transactions contemplated hereby. 13.5 Termination of Certain Provisions. (a) In the event that RTZ and its Affiliates fail to beneficially own in the aggregate, at any time after the Stock Closing Date, at least 5% of the then outstanding shares of the Company Common Stock, Section 9.4.1 and Article 11 hereof shall terminate and have no further force and effect and all rights and obligations of the parties hereto under the provisions of such sections shall thereafter cease. (b) Notwithstanding anything herein to the contrary, except as otherwise agreed by RTZ, RTZA and the Purchaser, the Company and Parent will not be entitled to deliver the notice pursuant to Section 5.1(a), the notice pursuant to Section 6.1(c), the request pursuant to Section 6.1(d) or any Additional Purchase Notice pursuant to Section 6.1(a) after December 31, 1995; provided further that any such notice, whenever given, shall not provide for, or otherwise result in, the obligation of RTZA and/or Purchaser, as the case may be, to commence the Tender Offer, to purchase Additional Shares or to purchase Option Shares, in each case, after June 30, 1996. 13.6 Further Assurances. Each party hereto shall do and perform or cause to be done and performed all further acts and things and shall execute and deliver all other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Related Agreements and the consummation of the transactions contemplated hereby and thereby. 13.7 Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to the principles of conflicts of law thereof. Each party hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction (except for the purposes - -42 of or proceedings regarding enforcement) of courts of the State of New York located in the Borough of Manhattan in The City of New York and of the United States District Court for the Southern District of New York (the "New York Courts") for any litigation arising out of or relating to this Agreement or any Related Agreement and the transactions contemplated hereby and thereby (and agrees not to commence any litigation relating thereto except in such courts), waives any objection to the laying of venue of any such litigation in the New York Courts and agrees not to plead or claim in any New York Court that such litigation brought therein has been brought in an inconvenient forum. 13.8 Specific Performance. The parties hereto agree that money damages or other remedy at law would not be sufficient or adequate remedy for any breach or violation of, or a default under, this Agreement by them and that in addition to all other remedies available to them, each of them shall be entitled to the fullest extent permitted by law to an injunction restraining such breach, violation or default or threatened breach, violation or default and to any other equitable relief, including without limitation specific performance, without bond or other security being required. 13.9 Notice. All notices and other communications hereunder shall be in writing and, unless otherwise provided herein, shall be deemed to have been given when received by the party to whom such notice is to be given at its address set forth below, or such other address for the party as shall be specified by notice given pursuant hereto: (a)If to Parent or the Company, to it at: Freeport-McMoRan 1615 Poydras Street New Orleans, Louisiana 70112 Attn:General Counsel Fax:(504) 585-3513 with a copy to: Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 Attn:E. Deane Leonard, Esq. and David W. Ferguson, Esq. Fax:(212) 450-4800 - -43 (b) If to RTZ or the Purchaser to: The RTZ Corporation PLC 6 St. James's Square London SWIY 4LD England Attn: The Company Secretary with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attn: Allen I. Isaacson, P.C. (c) If to RTZA to: RTZ America, Inc. 100 Quentin Roosevelt Blvd. Suite 503 Garden City, NY 11530 Attn: The Company Secretary with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attn: Allen I. Isaacson, P.C. 13.10 Binding Effect; Assignment. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns. Neither this Agreement nor any of the rights hereunder may be assigned by any of the parties hereto without the consent of the other parties. 13.11 Amendment and Modification. This Agreement may be amended, modified, supplemented or waived only by written agreement of the party against whom enforcement of such amendment, modification, supplement or waiver is sought. 13.12 Headings; References; Execution in Counterparts; Interpretation. The headings and captions contained herein are for convenience only and shall not control or affect the meaning or construction of any provision hereof. All article, section, schedule, exhibit and paragraph references are to this Agreement, unless otherwise expressly provided. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and which together shall constitute one and the same instrument. In this Agreement, unless the context otherwise requires, words in the singular number or in the plural number shall each include the singular number and the plural number. 13.13 Entire Agreement. This Agreement, the Schedules and Exhibits attached hereto, constitute the entire agreement, and supersede all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof. 13.14 Publicity. Promptly following the execution and delivery of the Agreement, the parties hereto shall issue a press release in an agreed form. Thereafter the parties hereto shall consult regarding the content and timing of any formal disclosure to be made at any time after the date hereof. Notwithstanding the foregoing, each of the parties hereto may, in documents required to be filed by it with any governmental or regulatory authority, make such statements with respect to the transactions contemplated hereby as each may be advised is legally necessary upon advice of its counsel. - -44- PAGE 45 INTENTIONALLY OMITTED - -45- IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written. FREEPORT-McMoRan INC. By: /s/ James R. Moffet Name: James R. Moffett Title: Chairman of the Board FREEPORT-McMoRan COPPER & GOLD INC. By: /s/ George A. Mealey Name: George A. Mealey Title: President THE RTZ CORPORATION PLC By: /s/ R. Adams Name: Robert Adams Title: Director RTZ INDONESIA LIMITED By /s/ G.C. Lloyd-Davis Name: G.C. Lloyd-Davis Title: Director, Secretary RTZ AMERICA, INC. By /s/ C. Lenon Name: C. Lenon Title: President - -46 TABLE OF CONTENTS Page 1. Definitions................................................1 2. Registration Rights Agreements.............................7 3. Purchases of Class A Common Stock..........................7 3.1 Sale of Shares.......................................7 3.2 Stock Closing........................................7 4. Certain Actions by Parent..................................8 4.1 Redemption of the 6.55% Notes and the ABC Debentures. 8 5. Tender Offer for, and Conversion of, 6.55% Notes...........9 5.1 Tender Offer.........................................9 5.2 Conversion of 6.55% Notes...........................10 5.3 Transfer of Shares Issued Upon Conversion...........10 5.4 Code Section 367(e) Indemnification.................11 6. Purchase of Additional Shares and Option Shares...........15 6.1 Request to Purchase Additional Shares...............15 6.2 Option to Purchase Class A Common Stock.............17 6.3 Purchase of Additional Shares and Option Shares.....17 7. Spin-Off and Merger.......................................18 8. Representations and Warranties............................19 8.1 Representations and Warranties of Parent and the ............Company.............................................19 8.1.1 Organization and Qualifications.............19 8.1.2 Capitalization..............................19 8.1.3 Authority...................................20 - - i - Page 8.1.4 Title......................................21 8.1.5...Compliance with Other Instruments..........22 8.1.6 Consents...................................22 8.1.7 Actions Pending............................23 8.1.8 SEC Reports................................23 8.1.9 Financial Statements.......................24 8.1.10 Compliance with Laws; Permits.............24 8.1.11 Books and Records.........................25 8.1.12 Financial Advisors and Brokers............25 8.1.13 Accuracy of Information...................25 8.1.14 Consolidated Group........................26 8.1.15 Tax Sharing Agreement.....................26 8.2 Representations and Warranties of RTZ, the Purchaser and RTZA............................................26 8.2.1 Organization................................26 8.2.2 Authority...................................26 8.2.3 Compliance with Other Instruments...........27 8.2.4 Consents....................................27 8.2.5 Actions Pending.............................28 8.2.6 Investment Representations..................28 8.2.7 Financial Advisors and Brokers..............28 8.2.8 Ownership of Securities of Parent and the Company.............................................28 8.2.9 Accuracy of Information.....................28 - - ii - Page 9. Covenants.................................................28 9.1 Covenants of All Parties............................28 9.1.1 Cooperation.................................28 9.1.2 Breach of Representations and Warranties....29 9.1.3 Communications with Regulators..............29 9.1.4 Affiliate Agreements........................30 9.1.5 Certain Specified Actions...................30 9.2 Covenants of Parent and the Company.................30 9.2.1 Conduct of Business Pending the Spin-Off....30 9.2.2 Exchange of Shares..........................31 9.2.3 Certain Arrangements Following the Spin-Off. 31 9.3 Covenants of Parent.................................31 9.3.1 Minimum Price of Sales......................31 9.4 Covenants of the Company............................31 9.4.1 Right to Nominate Directors.................31 9.5 Covenants of RTZ, RTZA and the Purchaser............32 9.5.1 Lack of Certain Stock Ownership.............32 9.5.2 Certain Specified Actions...................32 9.6 Additional Covenants................................32 9.6.1 Future Acquisitions.........................32 9.6.2 Voting......................................33 10. Conditions to Stock Closings..............................33 10.1 Conditions to Stock Closing........................33 - - iii - Page 10.1.1 Conditions to the Obligations of All Parties....................................33 10.1.2 Conditions to Obligations of the Purchaser.34 10.1.3 Conditions to Obligations of Parent........35 10.2 Conditions to Additional Stock Closings.............35 10.2.1 Conditions to the Obligations of All Parties....................................35 10.2.2 Conditions to Obligations of the Purchaser.36 11. Preemptive Rights; Rights of First Offer..................36 12. Termination...............................................39 12.1 Termination Prior to Stock Closing..................39 12.2 Effect of Termination...............................39 13. Miscellaneous.............................................39 13.1 Transfer Taxes.....................................39 13.2 Survival of Representations, Warranties and Agreements, Etc....................................39 13.3 Expenses...........................................40 13.4 Indemnification....................................40 13.5 Termination of Certain Provisions..................41 13.6 Further Assurances.................................41 13.7 Governing Law......................................41 13.8 Specific Performance...............................41 13.9 Notice.............................................42 13.10 Binding Effect; Assignment........................43 13.11 Amendment and Modification........................43 13.12 Headings; References; Execution in Counterparts; Interpretation....................................43 - - v - Page 13.13 Entire Agreement..................................43 13.14 Publicity.........................................43 - - v - List of Exhibits Exhibit A Form of Company Registration Rights Agreement Exhibit B Form of Parent Registration Rights Agreement Exhibit C Term Sheet for Benefit Allocation Agreement Exhibit D Term Sheet for Transaction Management Services Agreement Exhibit 8.1.15 Certain Actions List of Schedules Schedule 8.1.2 -- Capitalization Schedule 8.1.3 -- Authority Schedule 8.1.6 -- Consents Schedule 8.1.9 -- Financial Statements Schedule 8.1.10 -- Compliance with Laws; Permits Schedule 8.1.14 -- Consolidated Group Schedule 8.1.15 -- Tax Sharing Agreements Schedule 8.2.4 -- Consents Schedule 9.1.5 -- Maintenance of the Voting Structure of the Company Schedule 9.2.1 -- Conduct of Business Pending the Spin-Off Schedule 9.5.2 -- Certain Disallowed Transactions EX-99 4 EXHIBITS C, D, 8.1.15 EXHIBIT C Term Sheet for Benefit Allocation Agreement Retiree Medical, Dental and Life Insurance (FAS 106) Liability Liabilities for all current retirees to remain with FTX. Liabilities for all current employees to follow the employees (i.e., FTX to retain liability for those employees who remain with FTX; liability transferred to FCX for employees who go with FCX). Liabilities for dual employees to go to the "primary" employer in each case. FCX to make a "true-up" payment to FTX to cover FCX's share of the retiree medical liability for those employees who provided services to FCX. SECAP, EBP and Deferred VCIP/AIP/PIAP/LTPIP Liabilities for all current retirees to remain with FTX. Liabilities for all current employees to follow the employees. Liabilities for dual employees to be split on a pro-rata basis. FCX to be paid an amount by FTX equal to the liability assumed by FCX. Pension Plan Liabilities Liabilities and corresponding plan assets for all current retirees to remain with FTX. Liabilities and corresponding plan assets for all current employees to follow the employees. Liabilities/Assets for dual employees to be split on a pro-rata basis. Stock Options, Stock Appreciation Rights, Stock Incentive Units Upon the FTX/FCX split, the exercise price of existing FTX options/SARs/SIUs will be adjusted and new FCX options/SARs/SIUs will be granted in accordance with the terms of the FCX Adjusted Stock Award Plan. FCX to be paid an amount by FTX equal to the liability assumed by FCX. EXHIBIT D Term Sheet for Transition Management Services Agreement Overview The management services agreement in effect as of the date first above written and containing substantially the terms set forth below shall remain in effect following the Distribution Date. Under the Spin-Off Private Letter Ruling, management services will be transitioned over to the Company within one year of the Distribution Date. Parent Supplied Administrative Services Parent furnishes to the Company, as the Company may request or require from time to time, the following services: 1. periodic advice and consultation 2. accounting, financial, legal, tax and insurance 3. employee personnel 4. research and development 5. systems and communication 6. geological, engineering, design, procurement, environmental and construction management 7. sales and marketing 8. such other services as are customarily provided by the Parent to the Company as of the Distribution Date. Company Supplied Services The Company provides Parent with the use of its employees with expertise in mineral exploration and development. Costs The services provided by the Company or Parent, as the case may be, are performed for an amount equal to the fully allocated cost basis and are charged to the Company or Parent, as the case may be, in accordance with reasonable policies and procedures which are in effect from time to time for intercompany allocation of costs. Technology Parent has granted to the Company the non-exclusive right and license, subject to certain conditions, to use certain technologies relating to the processing of copper. EXHIBIT 8.1.15 The following are certain actions which Parent and the Company would agree not to take, unless they first obtained either an opinion of nationally recognized tax counsel or a supplemental private letter ruling from the IRS that the contemplated action would not adversely affect the tax-free nature of the Spin-Off or the ability of Parent to rely on the Spin-Off Private Letter Ruling, under the Distribution Agreement to be signed between Parent and the Company. Capitalized terms used herein and not otherwise defined have the meaning ascribed to them in the Agreement Dated as of May 2, 1995 by and between Freeport McMoRan Inc. and Freeport McMoRan Copper & Gold Inc., on the one hand, and The RTZ Corporation PLC, RTZ Indonesia Limited and RTZ America, Inc., on the other hand. Parent and the Company will not initiate or support any action during the five-year period following the Spin-Off that would in any way change the ability of the holders of the Class B Common Stock to elect at least 80% of the members of the Board of Directors of the Company and the ability of the holders of the Class A Common Stock and the Preferred Stock of the Company to elect the remaining members of the Board, including without limitation, voting to combine the Class A Common Stock and Class B Common Stock. During the two-year period following the Spin-Off (the "Two-Year Period"), the Company will not issue shares of any preferred stock that would not entitle the holders to vote together with the Class A Common Stock and the existing classes of Preferred Stock in the election of the members of the Board of the Company. During the Two-Year Period, the Company will not dispose of any of its direct interests in P.T. Freeport Indonesia Company ("PT-FI"). Except for any transactions that are contemplated in the Participation Agreement, the Loan Agreement, the Implementation Agreement and any other agreement between the Company, RTZ and their respective subsidiaries, the Company will use its best efforts to cause PT-FI to continue the conduct of its copper and gold business in a substantially unchanged manner during the Two-Year Period as such business is operated prior thereto and to use its business assets in such business. During the Two-Year Period, Parent will not dispose of its direct or indirect interests in Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"). PAGE> During the Two-Year Period, Parent, FRP, the Company and PT-FI will not take affirmative steps to merge into another corporation, to liquidate or to sell or otherwise dispose of any of their assets except for asset dispositions made in the ordinary course of business. Parent and the Company will not directly or indirectly redeem or otherwise reacquire shares of their Common Stock and Class B Common Stock, respectively, during the Two-Year Period, except to the extent that (i) a corporate business purpose supports such redemption or reacquisition, (ii) the redeemed or reacquired stock is widely held, (iii) the redemption or reacquistion is made in the open market, (iv) to the best of the knowledge of Parent or the Company, as the case may be, the redemption or reacquisition is not made from (a) directors or officers or (b) any shareholder owning 1% or more of the outstanding stock of the corporation, and (v) Parent and the Company will have no plan or intention, as of the date of the Spin-Off, that the aggregate amount of stock repurchased would equal or exceed 20% of the outstanding stock of the relevant corporation. Furthermore, neither Parent nor the Company will initiate a periodic stock redemption program during the Two-year Period unless such program would be expected to comply with the requirements described in (i) through (v) above. The Company will not redeem or otherwise reacquire share of its Class B Common Stock during the Two-Year Period, to the extent that such redemption or reacquisition would result in the Class B Common Stock representing less than 50% of the common equity of the Company. The Transitional Management Services Agreement will last for no more than one year. Except for the temporary supply of certain administrative services for one year, each of Parent and the Company will arrange for the provision of the administrative services requisite to the conduct of its business. Each of Parent and the Company will reaffirm, as of the date of the Spin-Off, that all of the representations set forth in the Spin-Off Private Letter Ruling secured from the IRS remain valid. EX-99 5 SCHEDULES SCHEDULE 8.1.2 FCX Capitalization as of April 30, 1995 Authorized Outstanding Class B Common Stock 200,000,000 139,980,763 Special Stock(1) Class A Common Stock(2) 88,600,000 65,804,268 Special Preference(3) 26,400,000 26,341,176 Undesignated Special Stock 135,000,000 0 Total Special Stock 250,000,000 92,145,444 Preferred Stock Step-Up Convertible Preferred(4) 700,000 700,000 Gold-Denominated Preferred(5) 300,000 300,000 Gold-Denominated Preferred Series II(6) 215,279 215,279 Silver-Denominated Preferred(7) 119,000 119,000 Undesignated Preferred Stock 48,665,721 0 Total Preferred Stock 50,000,000 1,334,279 (1) The Board of Directors of FCX has the right to designate authorized and unissued shares of Special Stock as additional Class A Common Shares or as one or more additional series of capital stock. The currently designated shares of Special Shares are 88,600,000 Class A Shares and 26,400,000 Special Preference Shares. (2) In addition to the currently outstanding Class A Common Shares, additional Class A Common Shares have been authorized for the issuance upon conversion of the Special Preferences Shares (9.1 million Class A Shares) and upon conversion of the Step-Up Convertible Preferred Shares (11.7 million Class A Shares). Reflects FCX purchases of 168,300 shares of Class A stock pursuant to its share repurchase (purchases through April 30, 1995) program including 81,200 shares which will not settle until after April 30, 1995. (3) The Special Preference Shares currently are represented by an aggregate of 8,956,000 Depositary Shares, each representing 2-16/17 Special Preference Shares. (4) The Step-Up Convertible Preferred Shares are represented by an aggregate of 14,000,000 Depositary Shares, each representing 0.05 Step-Up Convertible Preferred Shares. (5) The Gold-Denominated Preferred Shares are represented by an aggregate of 6,000,000 Depositary Shares, each representing 0.05 Gold-Denominated Preferred Shares. (6) The Gold-Denominated Preferred Series II Shares are represented by an aggregate of 4,305,580 Depositary Shares, each representing 0.05 Gold-Denominated Preferred Series II Shares. (7) The Silver-Denominated Preferred Shares are represented by an aggregate of 4,760,000 Depositary Shares, each initially representing 0.025 Silver-Denominated Preferred Shares. FTX Capitalization as of April 30, 1995 Authorized Outstanding Common Stock(1)(2) 300,000,000 147,935,714 Preferred Stock $4.375 Convertible Exchangeable(3) 5,000,000 1,001,690 Undesignated Preferred Stock 45,000,000 0 Total Preferred Stock 50,000,000 1,001,690 (1) Outstanding shares do not include (i) 13.9 million shares of common stock authorized for issuance under FTX's stock option plans (including 2.4 million available for future grants) of which 7.8 million shares were issuable upon exercise of stock options outstanding at March 31, 1995, excluding stock appreciation rights outstanding at March 31, 1995 (see Note 2), (ii) 11 million shares authorized for issuance upon conversion of FTX's Zero Coupon Convertible Subordinated Debentures (ABC's), (iii) 18.4 million shares authorized for issuance upon conversion of FTX's 6.55% Convertible Subordinated Notes, and (iv) 2.4 million shares authorized for issuance upon exchange of FTX's $4.375 Convertible Exchangeable Preferred Stock (see Note 2). (2) This schedule does not take into account exercises of stock options by employees which may occur between April 30 and the date of signing of the Stock Purchase Agreement. (3) In accordance with an exchange offer, FTX accepted for exchange 3,998,310 shares of its $4.375 Convertible Exchangeable Preferred Stock for 11,395,181 shares of its common stock. Each of the remaining shares of $4.375 Convertible Exchangeable Preferred Stock is convertible into FTX common stock at a conversion price of $21.26 per share or the equivalent of 2.35 shares of FTX common stock. - -2- SCHEDULE 8.1.3 AUTHORITY NONE SCHEDULE 8.1.6 CONSENTS 1. In accordance with the provisions of the existing Chemical Bank credit facilities, certain consents are required. However, Chemical Bank, as Agent under the existing credit facilities, has agreed in a letter agreement dated as of April 27, 1995 to underwrite such consents. SCHEDULE 8.1.9 FINANCIAL STATEMENTS NONE SCHEDULE 8.1.10 COMPLIANCE WITH LAWS; PERMITS NONE SCHEDULE 8.1.14 California Kansas Minnesota Montana Nebraska North Dakota SCHEDULE 8.1.15 TAX SHARING AGREEMENT Section 4 of the Management Services Agreement dated as of May 1, 1988 between Freeport-McMoRan Copper Company, Inc., Freeport Indonesia, Incorporated and Freeport-McMoRan Inc. contains a tax sharing agreement for the period during which the companies were members of an affiliated group that filed a consolidated federal income tax return. SCHEDULE 8.2.4 CONSENTS NONE EX-99 6 SCHEDULES SCHEDULE 9.1.5 MAINTENANCE OF THE VOTING STRUCTURE OF THE COMPANY Parent, the Company, RTZA, RTZ, the Purchaser and each of their Affiliates shall not initiate or support any action during the five-year period following the Spin-Off that would in any way change the ability of the holders of the Class B Common Stock to elect at least 80% of the members of the Board of Directors of the Company and the ability of the holders of the Class A Common Stock and the Preferred Stock of the Company to elect the remaining members of the Board of Directors, including without limitation voting to combine the Class A Common Stock and Class B Common Stock. SCHEDULE 9.2.1 CONDUCT OF BUSINESS PENDING THE SPIN-OFF NONE SCHEDULE 9.5.2 CERTAIN DISALLOWED TRANSACTIONS RTZA and RTZ will not during the five-year period following the Spin-Off sell, exchange, transfer or otherwise dispose of any shares of Parent Common Stock received upon the conversion of the 6.55% Notes or any shares of the Class B Common Stock received in the Spin-Off with respect thereto unless they first obtain either a supplemental private letter ruling from the IRS or an opinion of nationally recognized tax counsel, reasonably satisfactory to Parent, that such disposition will not adversely affect the tax- free nature of the Spin-Off or the ability of Parent to rely on the Spin-Off Private Letter Ruling, in each case other than with respect to Section 367(e). RTZA, RTZ and their Affiliates shall not acquire Class B Common Stock (whether by effecting open market transactions, initiating a tender offer for such stock or otherwise) in a transaction that is not described in this Agreement during the five-year period following the Spin-Off, unless they first obtain either a supplemental private letter ruling from the IRS or an opinion of nationally recognized tax counsel, reasonably satisfactory to Parent, that such acquisition shall not adversely affect the tax-free nature of the Spin-Off or the ability of Parent to rely on the Spin-Off Private Letter Ruling. EX-10 7 REGISTRATION RIGHTS REGISTRATION RIGHTS AGREEMENT between FREEPORT-McMoRan INC., on the one hand, and THE RTZ CORPORATION PLC, and RTZ AMERICA, INC., on the other hand Dated as of May 12, 1995 REGISTRATION RIGHTS AGREEMENT, dated as of May 12, 1995, between FREEPORT-McMoRan INC., a Delaware corporation (the "Company"), The RTZ CORPORATION PLC, a company organized under the laws of England ("RTZ"), and RTZ AMERICA, INC., a Delaware corporation ("RTZA") and a subsidiary of RTZ. 1. Definitions. As used herein, unless the context otherwise requires, the following terms have the following respective meanings: 1.1 "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. 1.2 [Reserved] 1.3 [Reserved] 1.4 "Common Stock" means the common stock, par value $.10 per share, of the Company. 1.5 "Commission" means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. 1.6 "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Securities Exchange Act of 1934, as amended, shall include a reference to the comparable section, if any, of any such similar Federal statute. 1.7 "Person" means a corporation, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency. 1.8 "Purchase Agreement" shall have the meaning set forth in Section 2. 1.9 "Registration Expenses" means all expenses incident to the Company's performance of or compliance with Section 3, including, without limitation, all registration, filing and NASD fees, all listing fees, all fees and expenses of complying with securities or blue sky laws (including, without limitation, reasonable fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities), all word processing, duplicating and printing expenses, messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of "cold comfort" letters required by or incident to such performance and compliance, any fees and disbursements of underwriters (including, without limitation, fees and expenses of counsel to the underwriters) customarily paid by issuers or sellers of securities; provided, however, that Registration Expenses shall exclude, and RTZ shall pay, or cause to be paid, all underwriters' fees and underwriting discounts and commissions and transfer taxes in respect of the Registrable Securities being registered and the fees and expenses of counsel to RTZ and RTZA. 1.10 "Registrable Securities" means the shares of Common Stock acquired by RTZA in connection with the transactions contemplated by the Purchase Agreement, and any other securities issued in respect of, in exchange for, or in substitution of, such shares of Common Stock acquired by RTZA in connection with the transactions contemplated by the Purchase Agreement, whether by reorganization, recapitalization, reclassification, merger, consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets, distribution to stockholders or combination of the shares or any other change in the Company's capital structure, or otherwise. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (a) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (b) they shall have been sold as permitted by, and in compliance with, Rule 144 (or successor provision) promulgated under the Securities Act, or (c) they shall have ceased to be outstanding. 1.11 "Required Number of Shares" means Registrable Securities having at the time of a request for registration under Section 3.1 a minimum anticipated offering price (before underwriters' commissions and discounts) of at least $50,000,000; provided, that if RTZA then owns Registrable Securities having such a minimum anticipated offering price of less than $50,000,000 the term "Required Number of Shares" shall mean such number of shares of Registrable Securities then owned by RTZA. 1.12 [Reserved] 1.13 "Section 3.1 Sale Amount" shall have the meaning set forth in Section 3.1(g). 1.14 "Section 3.2 Sale Amount" shall have the meaning set forth in Section 3.2(c). 1.15 "Securities Act" means the Securities Act of 1933, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. References to a particular section of the Securities Act of 1933 shall include a reference to the comparable section, if any, of any such similar federal statute. - -2- 2. Background. Pursuant to an Agreement dated as of May 2, 1995 (the "Purchase Agreement"), between the Company, Freeport- McMoRan Inc., RTZ, RTZ Indonesia Limited, and RTZA and the transactions contemplated thereby, RTZA may acquire shares of Common Stock. 3. Registration Under the Securities Act, etc. 3.1. Registration on Request. (a) Request. At any time prior to December 31, 2021 upon the written request of RTZ that the Company effect the registration under the Securities Act of the Required Number of Shares (as defined in Section 1), the Company will use its best efforts to effect the registration under the Securities Act of the Registrable Securities which the Company has been so requested to register by RTZ. (b) Registration of Other Securities. Whenever the Company shall effect a registration pursuant to this Section 3.1 in connection with an underwritten offering requested by RTZ, no securities other than Registrable Securities of RTZA shall be included among the securities covered by such registration unless (a) the managing underwriter of such offering shall have advised RTZ in writing that the inclusion of such other securities would not adversely affect such offering, and (b) RTZ shall have consented in writing to the inclusion of such other securities, which consent may be subject to terms and conditions determined by RTZ in its sole reasonable discretion (any Person in respect of whose securities the managing underwriter and RTZ so consents is referred to as a "Selling Holder"). (c) Registration Statement Form. Registrations under this Section 3.1 shall be on such appropriate registration form of the Commission as shall be selected by the Company or by means of a shelf registration pursuant to Rule 415 under the Securities Act, if so requested by RTZ and if the Company is then eligible to use such a registration. (d) Expenses. The Company will pay the Registration Expenses in connection with any registration requested pursuant to this Section 3.1. (e) Effective Registration Statement. Subject to Section 3.1(i), a registration requested pursuant to this Section 3.1 shall not be deemed to have been effected (i) unless a registration statement with respect thereto has become effective and has been kept continuously effective for a period of at least 120 days (or such shorter period which will terminate when all the Registrable Securities covered by such registration statement have been sold pursuant thereto), (ii) if after it has become effective, such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason - -4- not attributable to RTZA and has not thereafter become effective, or (iii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by reason of a failure on the part of RTZA. (f) Selection of Underwriters. The underwriter or underwriters of each underwritten offering of the Registrable Securities so to be registered shall be selected by RTZ and the managing underwriter(s) shall be reasonably acceptable to the Company. (g) Priority in Requested Registration. If the managing underwriter of any underwritten offering shall advise the Company in writing (with a copy to RTZ) that, in its opinion, the number of Registrable Securities and other securities (if any) requested to be included in such registration exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to RTZ (the "Section 3.1 Sale Amount"), the Company will include in such registration: (i) first, the Registrable Securities requested by RTZ to be included in such registration; and (ii) second, to the extent the number of Registrable Securities requested by RTZ to be included in such registration is less than the Section 3.1 Sale Amount, the shares of Common Stock requested to be included by such other Selling Holders, with the reasonable consent of RTZ. (h) Limitations on Registration on Request. Notwithstanding anything in this Section 3.1 to the contrary, in no event will the Company be required to effect, in the aggregate pursuant to this Section 3.1, more than five registrations pursuant to this Agreement. (i) Right to Withdraw. RTZ shall have the right to notify the Company in writing that it has determined that the registration statement prepared pursuant to this Section 3.1 be abandoned or withdrawn, provided that such request shall be irrevocable and (i) if the Company receives such a request from RTZ after a registration statement with respect to such Registrable Securities has been filed, then (A) RTZ's request shall be counted for purposes of the requests for which RTZ is entitled pursuant to this Section 3.1 and (B) the Company shall pay all Registration Expenses in connection with such request for registration; and (ii) if the Company receives such a request from RTZ before a registration statement with respect to such Registrable Securities has been filed, then (A) RTZ's request shall not be counted for purposes of - -4- the requests for registration to which RTZ is entitled pursuant to this Section 3.1 and (B) RTZ shall pay all Registration Expenses in connection with such request for registration; provided, further, however, that if because of a material adverse change in the business of the Company the managing underwriter shall have advised RTZ that the Registrable Securities covered by the registration statement cannot be sold in an orderly manner in an offering within a price range reasonably acceptable to RTZ, then (A) RTZ's request shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to this Section 3.1 and (B) the Company shall pay all Registration Expenses in connection with such request for registration; provided, further, if upon the fifth request for registration made by RTZ pursuant to this Section 3.1 (excluding requests that are not counted pursuant to this Section 3.1(i)) the managing underwriter of any underwritten offering shall advise RTZ that the Registrable Securities covered by the registration statement cannot be sold in an orderly manner in such offering within a price range reasonably acceptable to RTZ because of any reason other than a material adverse change in the business of the Company, then RTZ shall have the one-time right to notify the Company in writing that it has determined that the registration statement be abandoned or withdrawn and to make the election described in the following sentence. Upon such notice pursuant to the last proviso of the preceding sentence, at the election of RTZ, either (a) RTZ's request shall be counted for purposes of the requests for which RTZ is entitled pursuant to this Section 3.1 and the Company shall pay all Registration Expenses in connection with such request for registration or (b) RTZ shall pay all Registration Expenses in connection with such request for registration and RTZ's request shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to this Section 3.1. 3.2. Incidental Registration. (a) Right to Include Registrable Securities. If the Company proposes at any time to register any of its securities under the Securities Act by registration on Forms S-1, S-2 or S-3 or any successor or similar form(s) (except registrations on such Forms or similar form(s) solely for registration of securities in connection with an employee benefit plan or dividend reinvestment plan or an acquisition, merger, reorganization, or consolidation), whether or not for sale for its own account, it will each such time give prompt written notice to RTZ of its intention to do so; provided that this Section 3.2 shall not apply to any registration of securities of the Company after December 31, 2021. Upon the written request of RTZ made as promptly as practicable and in any event within 30 days after the receipt of any such notice (15 days if the Company states in such written notice or gives telephonic notice to RTZ, with written confirmation to follow promptly thereafter, that (i) such registration will be on Form S-3 and (ii) such shorter period of time is required because of a planned filing date) - -5- (which request shall specify the Registrable Securities intended to be disposed of by RTZA), the Company will use its best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by RTZ; provided, however, that if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company shall give written notice of such determination to RTZ and (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from any obligation of the Company to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of RTZ to request that such registration be effected as a registration under Section 3.1 and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities for the same period as the delay in registering such other securities. No registration effected under this Section 3.2 shall relieve the Company of its obligation to effect any registration upon request under Section 3.1. If a registration is to cover an underwritten offering, such Registrable Securities shall be included in the underwriting on the same terms and conditions as the securities otherwise being sold through the underwriters. (b) Expenses. The Company will pay all Registration Expenses in connection with registration of Registrable Securities requested pursuant to this Section 3.2. (c) Priority in Incidental Registrations. If the managing underwriter of any underwritten offering shall inform the Company of its belief that the number or type of Registrable Securities and other securities (if any) requested to be included in such registration would materially adversely affect such offering, then the Company will include in such registration, to the extent of the number and type which the Company is so advised can be sold in (or during the time of) such offering ("Section 3.2 Sale Amount"), (i) first, in the case of an offering initiated by a stockholder who has been granted registration rights in accordance with Section 6, those of such stockholder or, in the case of an offering initiated by the Company, those for the Company's account, and (ii) second, to the extent the Section 3.2 Sale Amount is not exceeded, such Registrable Securities requested by RTZ to be included in such registration. (d) Selection of Managing Underwriter. The managing underwriter of any underwritten offering pursuant to this Section 3.2 shall be selected by the Company at its sole discretion. (e) Right to Withdraw. RTZ shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement pursuant to - -6- this Section 3.2 by giving written notice to the Company of its request to withdraw, as soon as reasonably practicable, and in any case, prior to the execution of the underwriting agreement, in the case of an underwritten offering, or at any time, in all other cases, provided that any such withdrawal request shall be irrevocable and, after making such a request, the Company shall not be obligated to include Registrable Securities of RTZA in such registration; provided further that RTZ shall reimburse the Company for the applicable share of filing fees paid by the Company with respect to the Registered Securities of RTZA. 3.3. Registration Procedures. If and whenever the Company is required to use its best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 3.1 and 3.2, the Company will use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof and will as expeditiously as possible: (i) prepare and (as soon as practicable, and in any event within 75 days in the case of Forms S-1 or S-2 and 45 days in the case of a registration requested on Form S-3 after the end of the period within which requests for registration may be given to the Company) file with the Commission the requisite registration statement to effect such registration and thereafter use its best efforts to cause such registration statement to become effective; provided that before filing a registration statement or prospectus or any amendments or supplements thereto, or comparable statements under securities or blue sky laws of any jurisdiction, the Company will furnish to the counsel of RTZ and the underwriters, if any, copies of all such documents proposed to be filed (including all exhibits thereto), which documents will be subject to the reasonable review of such counsel and the Company will give consideration to the reasonable suggestions of such counsel; (ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities and other securities covered by such registration statement for such period as shall be required for the disposition of all of such Registrable Securities and other securities, provided that such period need not exceed 120 days; (iii) furnish, without charge, to RTZ and each underwriter such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), - -7- such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, as RTZ and such underwriters may reasonably request; (iv) for up to 120 days after the effective date of the registration statement for such Registrable Securities to use its best efforts (x) to register or qualify all Registrable Securities and other securities covered by such registration statement under such other securities or blue sky laws of such States of the United States of America where an exemption is not available and as RTZ shall reasonably request, (y) to keep such registration or qualification in effect for so long as such registration statement remains in effect, and (z) to take any other action which may be reasonably necessary or advisable to enable such sellers to consummate the disposition in such jurisdictions of the securities to be sold by RTZA, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this subdivision (iv) be obligated to be so qualified or to consent to general service of process in any such jurisdiction; (v) furnish to RTZ, RTZA and each underwriter, if any, participating in the offering of the securities covered by such registration statement, a signed counterpart of (x) an opinion of counsel for the Company, and (y) a "comfort" letter signed by the independent public accountants who have certified the Company's financial statements included or incorporated by reference in such registration statement covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the accountant's comfort letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' comfort letters delivered to the underwriters in underwritten public offerings of securities (and dated the dates such opinions and comfort letters are customarily dated); - -8- (vi) notify RTZ, RTZA and each managing underwriter, if any, participating in the offering of the securities covered by such registration statement, (a) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, in the judgment of the Company, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, in the light of the circumstances under which they were made, and at the request of any such seller promptly prepare and furnish to it a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, in the judgment of the Company, as thereafter delivered to the purchasers of such securities, such prospectus shall 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 in the light of the circumstances under which they were made, (b) when the prospectus or any supplement or post-effective amendment has been filed, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective, (c) of any request by the Commission for amendments or supplements to the registration statement or the prospectus or for additional information (and deliver promptly to RTZ (or its counsel) and each managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to such registration statement), (d) of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose, (e) if at any time the representations and warranties of the Company contemplated by Section 3.4 below cease to be accurate in all material respects, and - -9- (f) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities or other securities covered by the registration statement for sale in any jurisdiction or the initiation or threatening of any proceeding of such purpose; (vii) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first full calendar month after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder, and promptly furnish to RTZ and each underwriter a copy of any amendment or supplement to such registration statement or prospectus; (viii) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities and other securities covered by such registration statement from and after a date not later than the effective date of such registration; (ix) use its best efforts to list all Registrable Securities and other securities covered by such registration statement on any national securities exchange or national quotations system on which Registrable Securities of the same class covered by such registration statement are then listed and, if not so listed, to be listed on a national securities exchange or, failing that, to be designated as qualified for trading on the NASD automated quotation system and, if designated as qualified for trading on the NASD automated quotation system, use its best efforts to secure designation of all such Registrable Securities covered by such registration statement as a NASDAQ "national market system security" within the meaning of Rule 11Aa2-1 under the Exchange Act or, failing that, to secure NASDAQ authorization for such Registrable Securities and, without limiting the generality of the foregoing, to arrange for at least two market makers to register as such with respect to such Registrable Securities with the NASD; (x) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Registrable Securities or other securities included in such registration statement for sale in any jurisdiction, use its best efforts promptly to obtain the withdrawal of such order; and - -10- (xi) take all such other actions as are customary, necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities. The Company may require RTZA to furnish the Company in writing as promptly as reasonably practicable such information regarding RTZA and the distribution of such securities as the Company may from time to time reasonably request in writing. RTZ agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in subparagraph (vii)(a) or (vii)(d) of this Section 3.3, RTZ will cause RTZA forthwith to discontinue such holder's disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until receipt by RTZ and RTZA of the copies of the supplemented or amended prospectus contemplated by subparagraph (vii)(a) of this Section 3.3 and, if so directed by the Company, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in the possession of RTZ and RTZA, of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. If the disposition by RTZA of its securities is discontinued pursuant to the foregoing sentence, the Company shall extend the period of effectiveness of the registration statement by the number of days during the period from and including the date of the giving of notice to and including the date when RTZ and RTZA shall have received copies of the supplemented or amended prospectus contemplated by subparagraph (vii)(a) of this Section 3.3 (or such shorter period which shall terminate when all the Registrable Securities covered by such registration statement have been sold pursuant thereto); and, if the Company shall not so extend such period, RTZ's request pursuant to which such registration statement was filed shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to Section 3.1 hereof. 3.4. Underwritten Offerings. (a) Requested Underwritten Offerings. If requested by the underwriters for any underwritten offering pursuant to a registration requested under Section 3.1, the Company will enter into an underwriting agreement with such underwriters for such offering, such agreement to be reasonably satisfactory in substance and form to the Company, RTZ, RTZA and the underwriters and to contain such representations and warranties by the Company and such other terms as are generally prevailing in agreements of that type, including, without limitation, indemnities to such underwriters and persons who control (within the meaning of the Securities Act) such underwriters to the effect and to the extent provided in Section 3.7. Each of RTZ and RTZA will cooperate with the Company in the negotiation of the underwriting agreement and will give consideration to the reasonable suggestions of the Company regarding the form thereof. RTZA shall be a party to such underwriting agreement and may, at its - -11- option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of RTZA and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of RTZA. RTZA shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding RTZA, its ownership of and title to its Registrable Securities, its intended method of distribution and any other representations required by law; provided, however, that the liabilities of RTZ and RTZA to any underwriter or any other Person under such underwriting agreement shall be limited to liabilities arising from misstatements in RTZA's representations and warranties and shall in no event exceed, in the aggregate, the amount of net proceeds received by RTZA from the sale of Registrable Securities in the offering to which such underwriting agreement relates. (b) Incidental Underwritten Offerings. If the Company proposes to register any of its securities under the Securities Act as contemplated by Section 3.2 and such securities are to be distributed by or through one or more underwriters, the Company will, if requested by RTZ and subject to Section 3.2(c), arrange for such underwriters to include all the Registrable Securities to be offered and sold by RTZA to be distributed by such underwriters. RTZA shall be a party to the underwriting agreement between the Company and such underwriters and may, at its option, require that any or all of the representations and warranties by, and the other agreements including, without limitation, indemnities to such underwriters and persons who control (within the meaning of the Securities Act) such underwriters to the effect and to the extent provided in Section 3.7 on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of RTZA and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of RTZA. RTZA shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding RTZA, its ownership of and title to its Registrable Securities and its intended method of distribution or any other representations required by law; provided, however, that the liabilities of RTZ and RTZA to any underwriter or any other Person under such underwriting agreement shall be limited to liabilities arising from misstatements in RTZA's representations and warranties and shall in no event exceed, in the aggregate, the amount of net proceeds received by RTZA from the sale of Registrable Securities in the offering to which such underwriting agreement relates. (c) Holdback Agreements. (i) Each of RTZ and RTZA agrees not to effect any public disposition of any Registrable Securities, and not to effect any such disposition of any other equity security of the Company of the same class as the - -12- Registrable Securities or of any security convertible into or exchangeable or exercisable for any equity security of the Company of the same class as the Registrable Securities, including dispositions pursuant to Rule 144 under the Securities Act, during the 15 days prior to, and during the 120- day period beginning on, the effective date of any registration statement pertaining to securities of the Company of the same class as the Registrable Securities or securities convertible into or exchangeable or exercisable for any equity security of the Company of the same class as the Registrable Securities (except as part of such registration or if such registration is made with respect to an employee benefit, employee stock option, dividend reinvestment or any other benefit plan or with respect to the registration of securities in connection with any acquisition, merger, reorganization or consolidation) ; provided that RTZ and RTZA has received written notice from the Company of such registration and a good faith estimate of the effective date thereof, and provided, further that any Person to whom registration rights have been granted after the date of the Purchase Agreement to the extent permitted by Section 6 and any other Person selling securities in such offering shall have agreed not to effect any such disposition during a period no shorter than the period referred to in this Section 3.4(c)(i). If the foregoing restriction on public dispositions by RTZ and RTZA applies (other than as a result of an underwritten public offering in which RTZA sells Registrable Securities), during the period of effectiveness of any registration statement covering Registrable Securities requested by RTZ to be registered pursuant to Section 3.1, the Company shall extend the period of effectiveness of such registration statement by the number of days during which such restriction applied; and, if the Company shall not so extend such period, RTZ's request pursuant to which such registration statement was filed shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to Section 3.1 hereof. (ii) If any registration of Registrable Securities pursuant to Section 3.1 shall be in connection with an underwritten public offering, the Company agrees (i) not to effect any public sale or distribution of any of its equity securities of the same class as the Registrable Securities or of any security convertible into or exchangeable or exercisable for any equity security of the Company of the same class as the Registrable Securities (other than any such sale or distribution of such securities in connection with any acquisition, merger, reorganization or consolidation by the Company or any subsidiary of the Company or in connection with an employee benefit, employee stock option, dividend reinvestment or other benefit plan) during the period after RTZ requests such registration pursuant to Section 3.1 (but not more than 15 days prior to the Company's good faith estimate of the effective date of such Registration Statement) to the date which is 120-days after the effective date of such registration statement (except as part of such registration) and (ii) that any agreement entered into after the date of the Purchase Agreement pursuant to which the Company issues or agrees to issue any privately placed equity securities shall contain a provision under which holders of such - -13- securities agree not to effect any public sale or distribution of any such securities during the period referred to in the foregoing clause (i), including any sale pursuant to Rule 144 under the Securities Act (except as part of such registration, if permitted). 3.5. Preparation: Reasonable Investigation. In connection with the preparation and filing of each registration statement under the Securities Act pursuant to this Agreement, the Company will give RTZ, RTZA, their underwriters, if any, and their respective counsel and accountants the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and, to the extent practicable, each amendment thereof or supplement thereto, and give each of them such access to its books and records (to the extent customarily given to underwriters of the Company's securities) and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of such holders' and such underwriters' respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act; provided, that RTZ, RTZA and their respective assignees hereunder shall use their reasonable best efforts to coordinate any such investigation of the books and records at the Company and any such discussions with the Company's officers and accountants so that all such investigations occur at the same time and all such discussions occur at the same time. 3.6. Limitations, Conditions and Qualifications to Obligations under Registration Covenants. The obligation of the Company to use its best efforts to cause the Registrable Securities to be registered under the Securities Act is subject to the following limitations, conditions and qualifications. The Company shall be entitled to postpone for a reasonable period of time (but not exceeding 150 days and no more than once in any twelve month period) the filing of any registration statement otherwise required to be prepared and filed by it pursuant to Section 3.1 if the Company determines, in its reasonable judgment, that such registration and offering would interfere with any material financing, acquisition, merger, consolidation or other material transaction involving the Company or any of its Affiliates or would require premature disclosure of any of the foregoing transactions or at a time when audited financial statements are not available or when the Company is in possession of material information which, in the exercise of its reasonable judgment, the Company deems advisable not to disclose in a registration statement, and promptly gives RTZ, RTZA and each managing underwriter, if any, written notice of such delay, including a general statement of the reasons for such postponement and an approximation of the anticipated delay. If the Company shall so postpone the filing of a registration statement, RTZ shall have the right to withdraw the request for registration by giving written notice to the Company within 30 days after receipt of the notice of postponement and, in the event of such withdrawal, such request shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to Section 3.1 hereof. - -14- 3.7. Indemnification. (a)Indemnification by the Company. In the event of any registration of any securities of the Company under the Securities Act, the Company will, and hereby does, indemnify and hold harmless, in the case of any registration statement filed pursuant to Section 3.1 or 3.2, RTZ and RTZA and their respective directors, officers, and each other Person who participates as an underwriter (as defined in the Securities Act) in the offering or sale of such securities and each other Person, if any, who controls such seller or any such underwriter within the meaning of the Securities Act (a "Controlling Person") or participates in the offering of such securities (a "Participating Person"), against any losses, claims, damages or liabilities, joint or several, to which RTZ, RTZA or any such director, officer, underwriter, Controlling Person or Participating Person may become subject under the Securities Act or otherwise, insofar as losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made not misleading, or (iii) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration, and, subject to Section 3.7(c), the Company will reimburse RTZ, RTZA and each such director, officer, underwriter, Controlling Person or Participating Person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding; provided, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company through an instrument executed by or on behalf of such seller or underwriter, as the case may be, specifically stating that it is for use in the preparation thereof; and provided, further, that the Company shall not be liable to any Person who participates as an underwriter in the offering or sale of Registrable Securities or any other Person, if any, who controls such underwriter within the meaning of the Securities Act, in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of such Person's failure to send or give a copy of the final prospectus, as the same may be then supplemented or amended, to the Person asserting an untrue - -15- statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such Person if such statement or omission was corrected in such final prospectus so long as such final prospectus, and any amendments or supplements thereto, have been furnished to such underwriter. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller or any such director, officer, partner, Controlling Person or Participating Person and shall survive the transfer of such securities by RTZA. (b) Indemnification by RTZ. As a condition to including any Registrable Securities in any registration statement, the Company shall have received an undertaking satisfactory to it from RTZA and RTZ to jointly and severally indemnify and hold harmless (in the same manner and to the same extent as set forth in subdivision (a) of this Section 3.7) the Company, and each director of the Company, each officer of the Company and each other Person, if any, who controls the Company within the meaning of the Securities Act or participates in the offering of such securities, with respect to any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, but only to the extent such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by or on behalf of RTZA specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement; provided, however, that the liability of RTZ and RTZA under this Section 3.7(b) and Section 3.7(d) shall be limited, in the aggregate, to the amount of net proceeds received by RTZA from the sale of Registrable Securities in the offering giving rise to such liability. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of such securities by RTZA. (c)Notices of Claims, etc. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding subdivisions of this Section 3.7, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action; provided, however, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding subdivisions of this Section 3.7, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties is reasonably likely to exist in respect of such claim, the indemnifying party shall be entitled to participate in and, to assume the defense - -16- thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defense thereof and the indemnified party notifies the indemnifying party of such indemnified party's judgment and the basis therefor. No indemnifying party shall be liable for any settlement of any action or proceeding effected without its written consent, which consent shall not be unreasonably withheld. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. (d) Contribution. If the indemnification provided for in this Section 3.7 shall for any reason be held by a court to be unavailable to an indemnified party under subparagraph (a) or (b) hereof in respect of any loss, claim, damage or liability, or any action or proceeding in respect thereof, then, in lieu of the amount paid or payable under subparagraph (a) or (b) hereof, the indemnified party and the indemnifying party under subparagraph (a) or (b) hereof shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating the same), (i) in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and the indemnified party, on the other hand, which resulted in such loss, claims, damage or liability, or action or proceeding in respect thereof, with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action or proceeding in respect thereof, as well as any other relevant equitable considerations or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as shall be appropriate to reflect the relative benefits received by the indemnifying party and the indemnified party from the offering of the securities covered by such registration statement, as well as any other relevant equitable considerations. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. In addition, no Person shall be obligated to contribute hereunder any amounts in payment for any settlement of any action or claim effected without such Person's consent, which consent shall not be unreasonably withheld. Notwithstanding anything in this Section 3.7(d) to the contrary, the liability of RTZ and RTZA under this Section 3.7(d) and Section 3.7(b) shall be limited, in the aggregate, to the any amount of net proceeds - -17- received by RTZA from the sale of Registrable Securities in the offering giving rise to such liability. (e) Other Indemnification. Indemnification and contribution similar to that specified in the preceding subdivisions of this Section 3.7 (with appropriate modifications) shall be given by the Company, RTZ and RTZA with respect to any required registration or other qualification of securities under any federal or state law or regulation of any governmental authority other than the Securities Act. The indemnification agreements contained in this Section 3.7 shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract. (f) Indemnification Payments. The indemnification and contribution required by this Section 3.7 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred. In any case in which it shall be judicially determined that a party is not entitled to indemnification or contribution, any payments previously received by such party hereunder shall be promptly reimbursed. 4. Rule 144. The Company shall take all actions reasonably necessary to enable holders of Registrable Securities to sell such securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission including, without limiting the generality of the foregoing, filing on a timely basis all reports required to be filed by the Exchange Act. Upon the request of RTZ or RTZA, the Company will deliver to it a written statement as to whether it has complied with such requirements. 5. Nominees for Beneficial Owners. In the event that any Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its election in writing delivered to the Company, be treated as the holder of such Registrable Securities for purposes of any request or other action by any holder or holders of Registrable Securities pursuant to this Agreement or any determination of any number or percentage of Registrable Securities held by any holder or holders of Registrable Securities contemplated by this Agreement. If the beneficial owner of any Registrable Securities so elects, the Company may require assurances reasonably satisfactory to it of such owner's beneficial ownership of such Registrable Securities. 6. No Inconsistent Agreements. The Company will not, on or after the date of this Agreement, enter into any agreement with respect to its securities which is inconsistent with the rights granted to RTZ and RTZA in this Agreement or otherwise conflicts with the provisions hereof, other than any lock-up agreement with the - -18- underwriters in connection with any registered offering effected hereunder, pursuant to which the Company shall agree not to register for sale, and the Company shall agree not to sell or otherwise dispose of, Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, for a specified period following the registered offering. The Company has not previously entered into any agreement with respect to its securities granting any registration rights to any Person. The rights granted to RTZ and RTZA hereunder do not in way conflict with and are not inconsistent with any other agreements to which the Company is a party or by which it is bound. 7. No Required Sale. Nothing in this Agreement shall be deemed to create an independent obligation on the part of RTZ or RTZA to sell any Registrable Securities pursuant to any effective registration statement. 8. Adjustments. In the event that any capital stock or other securities are issued in respect of, in exchange for, or in substitution of, any Registrable Securities by reason of any reorganization, recapitalization, reclassification, merger, consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets, distribution to stockholders or combination of the shares of Registrable Securities or any other change in the Company's capital structure, appropriate adjustments shall be made in this Agreement so as to fairly and equitably preserve, as far as practicable, the original rights and obligations of the parties hereto under this Agreement. The Company agrees that it shall not effect or permit to occur any combination or subdivision of shares which would adversely affect the ability of RTZ or RTZA to include any Registrable Securities in any registration contemplated by this Agreement or the marketability of such Registrable Securities in any such registration. 9. Further Assurances. Each party hereto shall do and perform or cause to be done and performed all further acts and things and shall execute and deliver all other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 10. Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to the principles of conflicts of law thereof. Each party hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of courts of the State of New York located in the Borough of Manhattan in The City of New York and of the United States District Court for the Southern District of New York (the "New York Courts") for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation relating thereto except in such courts), waives any objection to the laying of venue of any such litigation in the New York Courts and agrees not to plead - -19- or claim in any New York Court that such litigation brought therein has been brought in an inconvenient forum. 11. Specific Performance. The parties hereto agree that money damages or other remedy at law would not be sufficient or adequate remedy for any breach or violation of, or a default under, this Agreement by them and that in addition to all other remedies available to them, each of them shall be entitled to the fullest extent permitted by law to an injunction restraining such breach, violation or default or threatened breach, violation or default and to any other equitable relief, including without limitation specific performance, without bond or other security being required. 12. Notice. All notices and other communications hereunder shall be in writing and, unless otherwise provided herein, shall be deemed to have been given when received by the party to whom such notice is to be given at its address set forth below, or such other address for the party as shall be specified by notice given pursuant hereto: (a) If to the Company, to it at: Freeport-McMoRan Inc. 1615 Poydras Street New Orleans, Louisiana 70112 Attn: General Counsel Fax: (504) 585-3513 with a copy to: Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 Attn: E. Deane Leonard, Esq. and David W. Ferguson, Esq. Fax: (212) 450-4800 (c) If to RTZ to: The RTZ Corporation PLC 6 St. James's Square London SW1Y 4LD England Attn: The Corporate Secretary Fax: 011-44-171-930-3249 - -20- with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: Allen I. Isaacson, P.C. Fax: (212) 859-4000 (d) If to RTZA to: RTZ America, Inc. 100 Quentin Roosevelt Blvd. Suite 503 Garden City, NY 11530 Attn: The Corporate Secretary Fax: (516) 794-5073 with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: Allen I. Isaacson, P.C. Fax: (212) 859-4000 13. Binding Effect; Assignment. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns. Neither this Agreement nor any of the rights hereunder may be assigned by any of the parties hereto without the consent of the other parties, except that RTZ and RTZA may assign all or part of its rights under this Agreement (subject to an appropriate assumption of related obligations under this Agreement) to any person to whom or which RTZA sells or transfers any Registrable Securities, and such transferees may similarly assign such rights. 14. Amendment and Modification. This Agreement may be amended, modified, supplemented or waived only by written agreement of the party against whom enforcement of such amendment, modification, supplement or waiver is sought. - -21- 15. Headings; References; Execution in Counterparts; Interpretation. The headings and captions contained herein are for convenience only and shall not control or affect the meaning or construction of any provision hereof. All article, section, schedule, exhibit and paragraph references are to this Agreement, unless otherwise expressly provided. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and which together shall constitute one and the same instrument. The use of the word "including" in this Agreement shall be by way of example rather than by limitation. In this Agreement, unless the context otherwise requires, words in the singular number or in the plural number shall each include the singular number and the plural number. 16. Entire Agreement. This Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof. 17. Invalidity of Provision. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction. If any restriction or provision of this Agreement is held unreasonable, unlawful or unenforceable in any respect, such restriction or provision shall be interpreted, revised or applied in the manner that renders it lawful and enforceable to the fullest extent possible under law. - -22- IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written. FREEPORT-McMoRan INC. By /s/ Michael C. Kilanowski, Jr. Name: Michael C. Kilanowski, Jr. Title: Secretary THE RTZ CORPORATION PLC By /s/ Allen I. Isaacson Name: Allen I. Isaacson, P.C. Title: Attorney-In-Fact RTZ AMERICA, INC. By /s/ William M. Higgins Name: William M. Higgins Title: Vice President - -23- EX-10 8 EXHIBIT 3 REGISTRATION RIGHTS AGREEMENT between FREEPORT-McMoRan COPPER & GOLD INC., on the one hand, and THE RTZ CORPORATION PLC, RTZ AMERICA, INC. and RTZ INDONESIA LIMITED, on the other hand Dated as of May 12, 1995 REGISTRATION RIGHTS AGREEMENT, dated as of May 12, 1995, between FREEPORT-McMoRan COPPER & GOLD INC., a Delaware corporation (the "Company"), The RTZ CORPORATION PLC, a company organized under the laws of England ("RTZ"), and RTZ INDONESIA LIMITED, a company organized under the laws of England ("RTZ Subsidiary") and a subsidiary of RTZ, and RTZ AMERICA, INC., a Delaware corporation ("RTZA") and a subsidiary of RTZ. 1. Definitions. As used herein, unless the context otherwise requires, the following terms have the following respective meanings: 1.1 "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. 1.2 "Class A Common Stock" shall have the meaning set forth in Section 2. 1.3 "Class B Common Stock" shall have the meaning set forth in Section 2. 1.4 "Common Stock" means, individually and collectively, Class A Common Stock and Class B Common Stock. 1.5 "Commission" means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. 1.6 "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Securities Exchange Act of 1934, as amended, shall include a reference to the comparable section, if any, of any such similar Federal statute. 1.7 "Person" means a corporation, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency. 1.8 "Purchase Agreement" shall have the meaning set forth in Section 2. 1.9 "Registration Expenses" means all expenses incident to the Company's performance of or compliance with Section 3, including, without limitation, all registration, filing and NASD fees, all listing fees, all fees and expenses of complying with securities or blue sky laws (including, without limitation, reasonable fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities), all word processing, duplicating and printing expenses, messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of "cold comfort" letters required by or incident to such performance and compliance, any fees and disbursements of underwriters (including, without limitation, fees and expenses of counsel to the underwriters) customarily paid by issuers or sellers of securities; provided, however, that Registration Expenses shall exclude, and RTZ shall pay, or cause to be paid, all underwriters' fees and underwriting discounts and commissions and transfer taxes in respect of the Registrable Securities being registered and the fees and expenses of counsel to RTZ and all RTZ Selling Stockholders. 1.10 "Registrable Securities" means the shares of Common Stock acquired by RTZ Subsidiary and/or RTZA in connection with the transactions contemplated by the Purchase Agreement, and any other securities issued in respect of, in exchange for, or in substitution of, such shares of Common Stock acquired by RTZ Subsidiary and/or RTZA in connection with the transactions contemplated by the Purchase Agreement, whether by reorganization, recapitalization, reclassification, merger, consolidation, spin- off, partial or complete liquidation, stock dividend, split-up, sale of assets, distribution to stockholders or combination of the shares or any other change in the Company's capital structure, or otherwise. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (a) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (b) they shall have been sold as permitted by, and in compliance with, Rule 144 (or successor provision) promulgated under the Securities Act, or (c) they shall have ceased to be outstanding. 1.11 "Required Number of Shares" means Registrable Securities having at the time of a request for registration under Section 3.1 a minimum anticipated offering price (before underwriters' commissions and discounts) of at least $50,000,000; provided, that if RTZ Subsidiary and RTZA then own in the aggregate Registrable Securities having such a minimum anticipated offering price of less than $50,000,000 the term "Required Number of Shares" shall mean such number of shares of Registrable Securities then owned in the aggregate by RTZ Subsidiary and RTZA. 1.12 "RTZ Selling Stockholders" means, individually and collectively, RTZA, if Registrable Securities owned by RTZA are proposed to be sold pursuant to Section 3.1 or Section 3.2, and RTZ Subsidiary, if Registrable Securities owned by RTZ Subsidiary are proposed to be sold pursuant to Section 3.1 or Section 3.2. 1.13 "Section 3.1 Sale Amount" shall have the meaning set forth in Section 3.1(g). - -2- 1.14 "Section 3.2 Sale Amount" shall have the meaning set forth in Section 3.2(c). 1.15 "Securities Act" means the Securities Act of 1933, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. References to a particular section of the Securities Act of 1933 shall include a reference to the comparable section, if any, of any such similar federal statute. 2. Background. Pursuant to an Agreement dated as of May 2, 1995 (the "Purchase Agreement"), between the Company, Freeport- McMoRan Inc., RTZ, RTZ Subsidiary, and RTZA and the transactions contemplated thereby, RTZ Subsidiary is acquiring shares of Class A Common Stock, $.10 par value per share, of the Company ("Class A Common Stock"), RTZ Subsidiary may acquire additional shares of Class A Common Stock and RTZA may acquire shares of Class B Common Stock, $.10 par value per share, of the Company ("Class B Common Stock"). 3. Registration Under the Securities Act, etc. 3.1. Registration on Request. (a) Request. At any (i) time after the Distribution Date (as defined in the Purchase Agreement) or, if the Distribution Date shall not have occurred prior to December 31, 1995, from and after December 31, 1995, but (ii) prior to December 31, 2021 upon the written request of RTZ that the Company effect the registration under the Securities Act of the Required Number of Shares (as defined in Section 1), the Company will use its best efforts to effect the registration under the Securities Act of the Registrable Securities which the Company has been so requested to register by RTZ. (b) Registration of Other Securities. Whenever the Company shall effect a registration pursuant to this Section 3.1 in connection with an underwritten offering requested by RTZ, no securities other than Registrable Securities of any RTZ Selling Stockholder shall be included among the securities covered by such registration unless (a) the managing underwriter of such offering shall have advised RTZ in writing that the inclusion of such other securities would not adversely affect such offering, and (b) RTZ shall have consented in writing to the inclusion of such other securities, which consent may be subject to terms and conditions determined by RTZ in its sole reasonable discretion (any Person in respect of whose securities the managing underwriter and RTZ so consents is referred to as a "Selling Holder"). (c) Registration Statement Form. Registrations under this Section 3.1 shall be on such appropriate registration form of the Commission as shall be - -3- selected by the Company or by means of a shelf registration pursuant to Rule 415 under the Securities Act, if so requested by RTZ and if the Company is then eligible to use such a registration. (d) Expenses. The Company will pay the Registration Expenses in connection with any registration requested pursuant to this Section 3.1. (e) Effective Registration Statement. Subject to Section 3.1(i), a registration requested pursuant to this Section 3.1 shall not be deemed to have been effected (i) unless a registration statement with respect thereto has become effective and has been kept continuously effective for a period of at least 120 days (or such shorter period which will terminate when all the Registrable Securities covered by such registration statement have been sold pursuant thereto), (ii) if after it has become effective, such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable to any RTZ Selling Stockholder and has not thereafter become effective, or (iii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by reason of a failure on the part of any RTZ Selling Stockholder. (f) Selection of Underwriters. The underwriter or underwriters of each underwritten offering of the Registrable Securities so to be registered shall be selected by RTZ and the managing underwriter(s) shall be reasonably acceptable to the Company. (g) Priority in Requested Registration. If the managing underwriter of any underwritten offering shall advise the Company in writing (with a copy to RTZ) that, in its opinion, the number of Registrable Securities and other securities (if any) requested to be included in such registration exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to RTZ (the "Section 3.1 Sale Amount"), the Company will include in such registration: (i) first, the Registrable Securities requested by RTZ to be included in such registration; and (ii) second, to the extent the number of Registrable Securities requested by RTZ to be included in such registration is less than the Section 3.1 Sale Amount, the shares of Common Stock requested to be included by such other Selling Holders, with the reasonable consent of RTZ. (h) Limitations on Registration on Request. Notwithstanding anything in this Section 3.1 to the contrary, in no event will the Company be required to effect, in the aggregate pursuant to this Section 3.1, more than five registrations pursuant to this Agreement. - -4- (i) Right to Withdraw. RTZ shall have the right to notify the Company in writing that it has determined that the registration statement prepared pursuant to this Section 3.1 be abandoned or withdrawn, provided that such request shall be irrevocable and (i) if the Company receives such a request from RTZ after a registration statement with respect to such Registrable Securities has been filed, then (A) RTZ's request shall be counted for purposes of the requests for which RTZ is entitled pursuant to this Section 3.1 and (B) the Company shall pay all Registration Expenses in connection with such request for registration; and (ii) if the Company receives such a request from RTZ before a registration statement with respect to such Registrable Securities has been filed, then (A) RTZ's request shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to this Section 3.1 and (B) RTZ shall pay all Registration Expenses in connection with such request for registration; provided, further, however, that if because of a material adverse change in the business of the Company the managing underwriter shall have advised RTZ that the Registrable Securities covered by the registration statement cannot be sold in an orderly manner in an offering within a price range reasonably acceptable to RTZ, then (A) RTZ's request shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to this Section 3.1 and (B) the Company shall pay all Registration Expenses in connection with such request for registration; provided, further, if upon the fifth request for registration made by RTZ pursuant to this Section 3.1 (excluding requests that are not counted pursuant to this Section 3.1(i)) the managing underwriter of any underwritten offering shall advise RTZ that the Registrable Securities covered by the registration statement cannot be sold in an orderly manner in such offering within a price range reasonably acceptable to RTZ because of any reason other than a material adverse change in the business of the Company, then RTZ shall have the one-time right to notify the Company in writing that it has determined that the registration statement be abandoned or withdrawn and to make the election described in the following sentence. Upon such notice pursuant to the last proviso of the preceding sentence, at the election of RTZ, either (a) RTZ's request shall be counted for purposes of the requests for which RTZ is entitled pursuant to this Section 3.1 and the Company shall pay all Registration Expenses in connection with such request for registration or (b) RTZ shall pay all Registration Expenses in connection with such request for registration and RTZ's request shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to this Section 3.1. - -5- 3.2. Incidental Registration. (a) Right to Include Registrable Securities. If the Company proposes at any time to register any of its securities under the Securities Act by registration on Forms S-1, S-2 or S-3 or any successor or similar form(s) (except registrations on such Forms or similar form(s) solely for registration of securities in connection with an employee benefit plan or dividend reinvestment plan or an acquisition, merger, reorganization, or consolidation), whether or not for sale for its own account, it will each such time give prompt written notice to RTZ of its intention to do so; provided that this Section 3.2 shall not apply to any registration of securities of the Company after December 31, 2021. Upon the written request of RTZ made as promptly as practicable and in any event within 30 days after the receipt of any such notice (15 days if the Company states in such written notice or gives telephonic notice to RTZ, with written confirmation to follow promptly thereafter, that (i) such registration will be on Form S-3 and (ii) such shorter period of time is required because of a planned filing date) (which request shall specify the Registrable Securities intended to be disposed of by any RTZ Selling Stockholder), the Company will use its best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by RTZ; provided, however, that if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company shall give written notice of such determination to RTZ and (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from any obligation of the Company to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of RTZ to request that such registration be effected as a registration under Section 3.1 and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities for the same period as the delay in registering such other securities. No registration effected under this Section 3.2 shall relieve the Company of its obligation to effect any registration upon request under Section 3.1. If a registration is to cover an underwritten offering, such Registrable Securities shall be included in the underwriting on the same terms and conditions as the securities otherwise being sold through the underwriters. (b) Expenses. The Company will pay all Registration Expenses in connection with registration of Registrable Securities requested pursuant to this Section 3.2. (c) Priority in Incidental Registrations. If the managing underwriter of any underwritten offering shall inform the Company of its belief that the number or type of Registrable Securities and other securities (if any) requested to be - -6- included in such registration would materially adversely affect such offering, then the Company will include in such registration, to the extent of the number and type which the Company is so advised can be sold in (or during the time of) such offering ("Section 3.2 Sale Amount"), (i) first, in the case of an offering initiated by a stockholder who has been granted registration rights in accordance with Section 6, those of such stockholder or, in the case of an offering initiated by the Company, those for the Company's account, and (ii) second, to the extent the Section 3.2 Sale Amount is not exceeded, such Registrable Securities requested by RTZ to be included in such registration. (d) Selection of Managing Underwriter. The managing underwriter of any underwritten offering pursuant to this Section 3.2 shall be selected by the Company at its sole discretion. (e) Right to Withdraw. RTZ shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement pursuant to this Section 3.2 by giving written notice to the Company of its request to withdraw, as soon as reasonably practicable, and in any case, prior to the execution of the underwriting agreement, in the case of an underwritten offering, or at any time, in all other cases, provided that any such withdrawal request shall be irrevocable and, after making such a request, the Company shall not be obligated to include Registrable Securities of any RTZ Selling Stockholder in such registration; provided further that RTZ shall reimburse the Company for the applicable share of filing fees paid by the Company with respect to the Registered Securities of any such RTZ Selling Stockholder. 3.3. Registration Procedures. If and whenever the Company is required to use its best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 3.1 and 3.2, the Company will use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof and will as expeditiously as possible: (i) prepare and (as soon as practicable, and in any event within 75 days in the case of Forms S-1 or S-2 and 45 days in the case of a registration requested on Form S-3 after the end of the period within which requests for registration may be given to the Company) file with the Commission the requisite registration statement to effect such registration and thereafter use its best efforts to cause such registration statement to become effective; provided, that before filing a registration statement or prospectus or any amendments or supplements thereto, or comparable statements under securities or blue sky laws of any jurisdiction, the Company will furnish to the counsel of RTZ and the underwriters, if any, copies of all such documents proposed to be filed (including all exhibits thereto), which documents will be subject to the reasonable review of such - -7- counsel and the Company will give consideration to the reasonable suggestions of such counsel; (ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities and other securities covered by such registration statement for such period as shall be required for the disposition of all of such Registrable Securities and other securities, provided, that such period need not exceed 120 days; (iii) furnish, without charge, to RTZ and each underwriter such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, as RTZ and such underwriters may reasonably request; (iv) for up to 120 days after the effective date of the registration statement for such Registrable Securities to use its best efforts (x) to register or qualify all Registrable Securities and other securities covered by such registration statement under such other securities or blue sky laws of such States of the United States of America where an exemption is not available and as RTZ shall reasonably request, (y) to keep such registration or qualification in effect for so long as such registration statement remains in effect, and (z) to take any other action which may be reasonably necessary or advisable to enable such sellers to consummate the disposition in such jurisdictions of the securities to be sold by any RTZ Selling Stockholder, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this subdivision (iv) be obligated to be so qualified or to consent to general service of process in any such jurisdiction; (v) furnish to RTZ, each RTZ Selling Stockholder and each underwriter, if any, participating in the offering of the securities covered by such registration statement, a signed counterpart of - -8- (x) an opinion of counsel for the Company, and (y) a "comfort" letter signed by the independent public accountants who have certified the Company's financial statements included or incorporated by reference in such registration statement covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the accountant's comfort letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' comfort letters delivered to the underwriters in underwritten public offerings of securities (and dated the dates such opinions and comfort letters are customarily dated); (vi) notify RTZ, each RTZ Selling Stockholder and each managing underwriter, if any, participating in the offering of the securities covered by such registration statement, (a) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, in the judgment of the Company, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, in the light of the circumstances under which they were made, and at the request of any such seller promptly prepare and furnish to it a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, in the judgment of the Company, as thereafter delivered to the purchasers of such securities, such prospectus shall 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 in the light of the circumstances under which they were made, (b) when the prospectus or any supplement or post-effective amendment has been filed, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective, (c) of any request by the Commission for amendments or supplements to the registration statement or the prospectus or for additional information (and deliver promptly to RTZ (or its counsel) and each - -9- managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to such registration statement), (d) of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose, (e) if at any time the representations and warranties of the Company contemplated by Section 3.4 below cease to be accurate in all material respects, and (f) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities or other securities covered by the registration statement for sale in any jurisdiction or the initiation or threatening of any proceeding of such purpose; (vii) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first full calendar month after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder, and promptly furnish to RTZ and each underwriter a copy of any amendment or supplement to such registration statement or prospectus; (viii) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities and other securities covered by such registration statement from and after a date not later than the effective date of such registration; (ix) use its best efforts to list all Registrable Securities and other securities covered by such registration statement on any national securities exchange or national quotations system on which Registrable Securities of the same class covered by such registration statement are then listed and, if not so listed, to be listed on a national securities exchange or, failing that, to be designated as qualified for trading on the NASD automated quotation system and, if designated as qualified for trading on the NASD automated quotation system, use its best efforts to secure designation of all such - -10- Registrable Securities covered by such registration statement as a NASDAQ "national market system security" within the meaning of Rule 11Aa2-1 under the Exchange Act or, failing that, to secure NASDAQ authorization for such Registrable Securities and, without limiting the generality of the foregoing, to arrange for at least two market makers to register as such with respect to such Registrable Securities with the NASD; (x) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Registrable Securities or other securities included in such registration statement for sale in any jurisdiction, use its best efforts promptly to obtain the withdrawal of such order; and (xi) take all such other actions as are customary, necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities. The Company may require each RTZ Selling Stockholder to furnish the Company in writing as promptly as reasonably practicable such information regarding such RTZ Selling Stockholder and the distribution of such securities as the Company may from time to time reasonably request in writing. RTZ agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in subparagraph (vii)(a) or (vii)(d) of this Section 3.3, RTZ will cause each RTZ Selling Stockholder forthwith to discontinue such holder's disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until receipt by RTZ and each RTZ Selling Stockholder of the copies of the supplemented or amended prospectus contemplated by subparagraph (vii)(a) of this Section 3.3 and, if so directed by the Company, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in the possession of RTZ and each RTZ Selling Stockholder, of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. If the disposition by the RTZ Selling Stockholders of their securities is discontinued pursuant to the foregoing sentence, the Company shall extend the period of effectiveness of the registration statement by the number of days during the period from and including the date of the giving of notice to and including the date when RTZ and each RTZ Selling Stockholder shall have received copies of the supplemented or amended prospectus contemplated by subparagraph (vii)(a) of this Section 3.3 (or such shorter period which shall terminate when all the Registrable Securities covered by such registration statement have been sold pursuant thereto); and, if the Company shall not so extend such period, RTZ's request pursuant to which such - -11- registration statement was filed shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to Section 3.1 hereof. 3.4. Underwritten Offerings. (a) Requested Underwritten Offerings. If requested by the underwriters for any underwritten offering pursuant to a registration requested under Section 3.1, the Company will enter into an underwriting agreement with such underwriters for such offering, such agreement to be reasonably satisfactory in substance and form to the Company, RTZ, each RTZ Selling Stockholder and the underwriters and to contain such representations and warranties by the Company and such other terms as are generally prevailing in agreements of that type, including, without limitation, indemnities to such underwriters and persons who control (within the meaning of the Securities Act) such underwriters to the effect and to the extent provided in Section 3.7. Each of RTZ and each RTZ Selling Stockholder will cooperate with the Company in the negotiation of the underwriting agreement and will give consideration to the reasonable suggestions of the Company regarding the form thereof. Each RTZ Selling Stockholder shall be a party to such underwriting agreement and may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such RTZ Selling Stockholder and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such RTZ Selling Stockholder. None of the RTZ Selling Stockholders shall be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such RTZ Selling Stockholder, its ownership of and title to its Registrable Securities, its intended method of distribution and any other representations required by law; provided, however, that the liabilities of RTZ and all RTZ Selling Stockholders to any underwriter or any other Person under such underwriting agreement shall be limited to liabilities arising from misstatements in the RTZ Selling Stockholders' representations and warranties and shall in no event exceed, in the aggregate, the amount of net proceeds received by all RTZ Selling Stockholders from the sale of Registrable Securities in the offering to which such underwriting agreement relates. (b) Incidental Underwritten Offerings. If the Company proposes to register any of its securities under the Securities Act as contemplated by Section 3.2 and such securities are to be distributed by or through one or more underwriters, the Company will, if requested by RTZ and subject to Section 3.2(c), arrange for such underwriters to include all the Registrable Securities to be offered and sold by any RTZ Selling Stockholder to be distributed by such underwriters. Each RTZ Selling Stockholder shall be a party to the underwriting agreement between the Company and such underwriters and may, at its option, require that any or all of the representations and - -12- warranties by, and the other agreements including, without limitation, indemnities to such underwriters and persons who control (within the meaning of the Securities Act) such underwriters to the effect and to the extent provided in Section 3.7 on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such RTZ Selling Stockholder and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such RTZ Selling Stockholder. None of the RTZ Selling Stockholders shall be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such RTZ Selling Stockholder, its ownership of and title to its Registrable Securities and its intended method of distribution or any other representations required by law; provided, however, that the liabilities of RTZ and all RTZ Selling Stockholders to any underwriter or any other Person under such underwriting agreement shall be limited to liabilities arising from misstatements in the RTZ Selling Stockholders' representations and warranties and shall in no event exceed, in the aggregate, the amount of net proceeds received by all RTZ Selling Stockholders from the sale of Registrable Securities in the offering to which such underwriting agreement relates. (c) Holdback Agreements. (i) Each of RTZ, RTZ Subsidiary and RTZA agrees not to effect any public disposition of any Registrable Securities, and not to effect any such disposition of any other equity security of the Company of the same class as the Registrable Securities or of any security convertible into or exchangeable or exercisable for any equity security of the Company of the same class as the Registrable Securities, including dispositions pursuant to Rule 144 under the Securities Act, during the 15 days prior to, and during the 120- day period beginning on, the effective date of any registration statement pertaining to securities of the Company of the same class as the Registrable Securities or securities convertible into or exchangeable or exercisable for any equity security of the Company of the same class as the Registrable Securities (except as part of such registration or if such registration is made with respect to an employee benefit, employee stock option, dividend reinvestment or any other benefit plan or with respect to the registration of securities in connection with any acquisition, merger, reorganization or consolidation); provided that RTZ, RTZ Subsidiary and RTZA has received written notice from the Company of such registration and a good faith estimate of the effective date thereof, and provided, further that any Person to whom registration rights have been granted after the date of the Purchase Agreement to the extent permitted by Section 6 and any other Person selling securities in such offering shall have agreed not to effect any such disposition during a period no shorter than the period referred to in this Section 3.4(c)(i). If the foregoing restriction on public dispositions by RTZ, RTZ Subsidiary and RTZA applies (other than as a result of an underwritten public offering in which any RTZ Selling Stockholder sells Registrable Securities), during the period of effectiveness of any registration statement covering Registrable Securities requested by - -13- RTZ to be registered pursuant to Section 3.1, the Company shall extend the period of effectiveness of such registration statement by the number of days during which such restriction applied; and, if the Company shall not so extend such period, RTZ's request pursuant to which such registration statement was filed shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to Section 3.1 hereof. (ii) If any registration of Registrable Securities pursuant to Section 3.1 shall be in connection with an underwritten public offering, the Company agrees (i) not to effect any public sale or distribution of any of its equity securities of the same class as the Registrable Securities or of any security convertible into or exchangeable or exercisable for any equity security of the Company of the same class as the Registrable Securities (other than any such sale or distribution of such securities in connection with any acquisition, merger, reorganization or consolidation by the Company or any subsidiary of the Company or in connection with an employee benefit, employee stock option, dividend reinvestment or other benefit plan) during the period after RTZ requests such registration pursuant to Section 3.1 (but not more than 15 days prior to the Company's good faith estimate of the effective date of such Registration Statement) to the date which is 120-days after the effective date of such registration statement (except as part of such registration) and (ii) that any agreement entered into after the date of the Purchase Agreement pursuant to which the Company issues or agrees to issue any privately placed equity securities shall contain a provision under which holders of such securities agree not to effect any public sale or distribution of any such securities during the period referred to in the foregoing clause (i), including any sale pursuant to Rule 144 under the Securities Act (except as part of such registration, if permitted). 3.5. Preparation: Reasonable Investigation. In connection with the preparation and filing of each registration statement under the Securities Act pursuant to this Agreement, the Company will give RTZ, each RTZ Selling Stockholder, their underwriters, if any, and their respective counsel and accountants the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and, to the extent practicable, each amendment thereof or supplement thereto, and give each of them such access to its books and records (to the extent customarily given to underwriters of the Company's securities) and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of such holders' and such underwriters' respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act; provided, that RTZ, each RTZ Selling Stockholder and their respective assignees hereunder shall use their reasonable best efforts to coordinate any such investigation of the books and records at the Company and any such discussions with the Company's officers and accountants so that all such investigations occur at the same time and all such discussions occur at the same time. - -14- 3.6. Limitations, Conditions and Qualifications to Obligations under Registration Covenants. The obligation of the Company to use its best efforts to cause the Registrable Securities to be registered under the Securities Act is subject to the following limitations, conditions and qualifications. The Company shall be entitled to postpone for a reasonable period of time (but not exceeding 150 days and no more than once in any twelve month period) the filing of any registration statement otherwise required to be prepared and filed by it pursuant to Section 3.1 if the Company determines, in its reasonable judgment, that such registration and offering would interfere with any material financing, acquisition, merger, consolidation or other material transaction involving the Company or any of its Affiliates or would require premature disclosure of any of the foregoing transactions or at a time when audited financial statements are not available or when the Company is in possession of material information which, in the exercise of its reasonable judgment, the Company deems advisable not to disclose in a registration statement, and promptly gives RTZ, each RTZ Selling Stockholder and each managing underwriter, if any, written notice of such delay, including a general statement of the reasons for such postponement and an approximation of the anticipated delay. If the Company shall so postpone the filing of a registration statement, RTZ shall have the right to withdraw the request for registration by giving written notice to the Company within 30 days after receipt of the notice of postponement and, in the event of such withdrawal, such request shall not be counted for purposes of the requests for registration to which RTZ is entitled pursuant to Section 3.1 hereof. 3.7. Indemnification. (a) Indemnification by the Company. In the event of any registration of any securities of the Company under the Securities Act, the Company will, and hereby does, indemnify and hold harmless, in the case of any registration statement filed pursuant to Section 3.1 or 3.2, RTZ and each RTZ Selling Stockholder and their respective directors, officers, and each other Person who participates as an underwriter (as defined in the Securities Act) in the offering or sale of such securities and each other Person, if any, who controls such seller or any such underwriter within the meaning of the Securities Act (a "Controlling Person") or participates in the offering of such securities (a "Participating Person"), against any losses, claims, damages or liabilities, joint or several, to which RTZ, each RTZ Selling Stockholder or any such director, officer, underwriter, Controlling Person or Participating Person may become subject under the Securities Act or otherwise, insofar as losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the - -15- statements therein in light of the circumstances in which they were made not misleading, or (iii) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration, and, subject to Section 3.7(c), the Company will reimburse RTZ, each RTZ Selling Stockholder and each such director, officer, underwriter, Controlling Person or Participating Person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding; provided, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company through an instrument executed by or on behalf of such seller or underwriter, as the case may be, specifically stating that it is for use in the preparation thereof; and provided, further, that the Company shall not be liable to any Person who participates as an underwriter in the offering or sale of Registrable Securities or any other Person, if any, who controls such underwriter within the meaning of the Securities Act, in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of such Person's failure to send or give a copy of the final prospectus, as the same may be then supplemented or amended, to the Person asserting an untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such Person if such statement or omission was corrected in such final prospectus so long as such final prospectus, and any amendments or supplements thereto, have been furnished to such underwriter. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller or any such director, officer, partner, Controlling Person or Participating Person and shall survive the transfer of such securities by any RTZ Selling Stockholder. (b) Indemnification by RTZ. As a condition to including any Registrable Securities in any registration statement, the Company shall have received an undertaking satisfactory to it from each RTZ Selling Stockholder and RTZ to jointly and severally indemnify and hold harmless (in the same manner and to the same extent as set forth in subdivision (a) of this Section 3.7) the Company, and each director of the Company, each officer of the Company and each other Person, if any, who controls the Company within the meaning of the Securities Act or participates in the offering of such securities, with respect to any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, but only to the extent such statement or alleged statement or omission or alleged omission - -16- was made in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by or on behalf of the RTZ Selling Stockholder specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement; provided, however, that the liability of RTZ and all RTZ Selling Stockholders under this Section 3.7(b) and Section 3.7(d) shall be limited, in the aggregate, to the amount of net proceeds received by all RTZ Selling Stockholders from the sale of Registrable Securities in the offering giving rise to such liability. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of such securities by any RTZ Selling Stockholder. (c) Notices of Claims, etc. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding subdivisions of this Section 3.7, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action; provided, however, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding subdivisions of this Section 3.7, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties is reasonably likely to exist in respect of such claim, the indemnifying party shall be entitled to participate in and, to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defense thereof and the indemnified party notifies the indemnifying party of such indemnified party's judgment and the basis therefor. No indemnifying party shall be liable for any settlement of any action or proceeding effected without its written consent, which consent shall not be unreasonably withheld. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. - -17- (d) Contribution. If the indemnification provided for in this Section 3.7 shall for any reason be held by a court to be unavailable to an indemnified party under subparagraph (a) or (b) hereof in respect of any loss, claim, damage or liability, or any action or proceeding in respect thereof, then, in lieu of the amount paid or payable under subparagraph (a) or (b) hereof, the indemnified party and the indemnifying party under subparagraph (a) or (b) hereof shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating the same), (i) in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and the indemnified party, on the other hand, which resulted in such loss, claims, damage or liability, or action or proceeding in respect thereof, with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action or proceeding in respect thereof, as well as any other relevant equitable considerations or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as shall be appropriate to reflect the relative benefits received by the indemnifying party and the indemnified party from the offering of the securities covered by such registration statement, as well as any other relevant equitable considerations. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. In addition, no Person shall be obligated to contribute hereunder any amounts in payment for any settlement of any action or claim effected without such Person's consent, which consent shall not be unreasonably withheld. Notwithstanding anything in this Section 3.7(d) to the contrary, the liability of RTZ and all RTZ Selling Stockholders under this Section 3.7(d) and Section 3.7(b) shall be limited, in the aggregate, to the any amount of net proceeds received by all RTZ Selling Stockholders from the sale of Registrable Securities in the offering giving rise to such liability. (e) Other Indemnification. Indemnification and contribution similar to that specified in the preceding subdivisions of this Section 3.7 (with appropriate modifications) shall be given by the Company, RTZ and each RTZ Selling Stockholder with respect to any required registration or other qualification of securities under any federal or state law or regulation of any governmental authority other than the Securities Act. The indemnification agreements contained in this Section 3.7 shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract. (f) Indemnification Payments. The indemnification and contribution required by this Section 3.7 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred. In any case in which it shall be judicially determined that a party is not entitled to indemnification or contribution, any payments previously received by such party hereunder shall be promptly reimbursed. - -18- 4. Rule 144. The Company shall take all actions reasonably necessary to enable holders of Registrable Securities to sell such securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission including, without limiting the generality of the foregoing, filing on a timely basis all reports required to be filed by the Exchange Act. Upon the request of RTZ or any RTZ Selling Stockholder, the Company will deliver to it a written statement as to whether it has complied with such requirements. 5. Nominees for Beneficial Owners. In the event that any Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its election in writing delivered to the Company, be treated as the holder of such Registrable Securities for purposes of any request or other action by any holder or holders of Registrable Securities pursuant to this Agreement or any determination of any number or percentage of Registrable Securities held by any holder or holders of Registrable Securities contemplated by this Agreement. If the beneficial owner of any Registrable Securities so elects, the Company may require assurances reasonably satisfactory to it of such owner's beneficial ownership of such Registrable Securities. 6. No Inconsistent Agreements. The Company will not, on or after the date of this Agreement, enter into any agreement with respect to its securities which is inconsistent with the rights granted to RTZ, RTZ Subsidiary and RTZA in this Agreement or otherwise conflicts with the provisions hereof, other than any lock-up agreement with the underwriters in connection with any registered offering effected hereunder, pursuant to which the Company shall agree not to register for sale, and the Company shall agree not to sell or otherwise dispose of, Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, for a specified period following the registered offering. The Company has not previously entered into any agreement with respect to its securities granting any registration rights to any Person. The rights granted to RTZ, RTZ Subsidiary and RTZA hereunder do not in way conflict with and are not inconsistent with any other agreements to which the Company is a party or by which it is bound. 7. No Required Sale. Nothing in this Agreement shall be deemed to create an independent obligation on the part of any of RTZ, RTZ Subsidiary or RTZA to sell any Registrable Securities pursuant to any effective registration statement. 8. Adjustments. In the event that any capital stock or other securities are issued in respect of, in exchange for, or in substitution of, any Registrable Securities by reason of any reorganization, recapitalization, reclassification, merger, consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets, distribution to stockholders or combination of the shares of Registrable Securities or any - -19- other change in the Company's capital structure, appropriate adjustments shall be made in this Agreement so as to fairly and equitably preserve, as far as practicable, the original rights and obligations of the parties hereto under this Agreement. The Company agrees that it shall not effect or permit to occur any combination or subdivision of shares which would adversely affect the ability of RTZ, RTZ Subsidiary or RTZA to include any Registrable Securities in any registration contemplated by this Agreement or the marketability of such Registrable Securities in any such registration. 9. Further Assurances. Each party hereto shall do and perform or cause to be done and performed all further acts and things and shall execute and deliver all other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 10. Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to the principles of conflicts of law thereof. Each party hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of courts of the State of New York located in the Borough of Manhattan in The City of New York and of the United States District Court for the Southern District of New York (the "New York Courts") for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation relating thereto except in such courts), waives any objection to the laying of venue of any such litigation in the New York Courts and agrees not to plead or claim in any New York Court that such litigation brought therein has been brought in an inconvenient forum. 11. Specific Performance. The parties hereto agree that money damages or other remedy at law would not be sufficient or adequate remedy for any breach or violation of, or a default under, this Agreement by them and that in addition to all other remedies available to them, each of them shall be entitled to the fullest extent permitted by law to an injunction restraining such breach, violation or default or threatened breach, violation or default and to any other equitable relief, including without limitation specific performance, without bond or other security being required. 12. Notice. All notices and other communications hereunder shall be in writing and, unless otherwise provided herein, shall be deemed to have been given when received by the party to whom such notice is to be given at its address set forth below, or such other address for the party as shall be specified by notice given pursuant hereto: (a) If to the Company, to it at: - -20- Freeport-McMoRan Inc. 1615 Poydras Street New Orleans, Louisiana 70112 Attn: General Counsel Fax: (504) 585-3513 with a copy to: Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 Attn: E. Deane Leonard, Esq. and David W. Ferguson, Esq. Fax: (212) 450-4800 (c) If to RTZ Subsidiary or RTZ to: The RTZ Corporation PLC 6 St. James's Square London SW1Y 4LD England Attn: The Corporate Secretary Fax: 011-44-171-930-3249 with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: Allen I. Isaacson, P.C. Fax: (212) 859-4000 (d) If to RTZA to: RTZ America, Inc. 100 Quentin Roosevelt Blvd. Suite 503 Garden City, NY 11530 - -21- Attn: The Corporate Secretary Fax: (516) 794-5073 with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: Allen I. Isaacson, P.C. Fax: (212) 859-4000 13. Binding Effect; Assignment. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns. Neither this Agreement nor any of the rights hereunder may be assigned by any of the parties hereto without the consent of the other parties, except that RTZ, RTZ Subsidiary and/or RTZA may assign all or part of its rights under this Agreement (subject to an appropriate assumption of related obligations under this Agreement) to any person to whom or which RTZ Subsidiary or RTZA sells or transfers any Registrable Securities, and such transferees may similarly assign such rights. 14. Amendment and Modification. This Agreement may be amended, modified, supplemented or waived only by written agreement of the party against whom enforcement of such amendment, modification, supplement or waiver is sought. 15. Headings; References; Execution in Counterparts; Interpretation. The headings and captions contained herein are for convenience only and shall not control or affect the meaning or construction of any provision hereof. All article, section, schedule, exhibit and paragraph references are to this Agreement, unless otherwise expressly provided. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and which together shall constitute one and the same instrument. The use of the word "including" in this Agreement shall be by way of example rather than by limitation. In this Agreement, unless the context otherwise requires, words in the singular number or in the plural number shall each include the singular number and the plural number. 16. Entire Agreement. This Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof. - -22- 17. Invalidity of Provision. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction. If any restriction or provision of this Agreement is held unreasonable, unlawful or unenforceable in any respect, such restriction or provision shall be interpreted, revised or applied in the manner that renders it lawful and enforceable to the fullest extent possible under law. - -23- IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written. FREEPORT-McMoRan COPPER & GOLD INC. By /s/ Michael C. Kilanowski, Jr. Name: Michael C. Kilanowski, Jr. Title: Secretary THE RTZ CORPORATION PLC By /s/ Allen I. Isaacson Name: Allen I. Isaacson, P.C. Title: Attorney-In-Fact RTZ INDONESIA LIMITED By /s/ Allen I. Isaacson Name: Allen I. Isaacson, P.C. Title: Attorney-In-Fact RTZ AMERICA, INC. By /s/ William M. Higgins Name: William M. Higgins Title: Vice President - -24- EX-10 9 EXHIBIT 4 Dated 1995 FREEPORT-McMoRan COPPER & GOLD INC. and THE RTZ CORPORATION PLC IMPLEMENTATION AGREEMENT RTZ Legal Department 6 St James's Square London SW1Y 4LD PSW/Agrts/A-455(9) - -1- THIS IMPLEMENTATION AGREEMENT is made as of 2 May 1995 BETWEEN: (1) FREEPORT-McMoRan COPPER & GOLD INC. of 1615 Poydras Street, New Orleans, LA 70112, U.S.A. ("FCX") and (2) THE RTZ CORPORATION PLC of 6 St. James's Square, London SW1Y 4LD ("RTZ") WHEREAS (A) By a letter of intent dated March 7, 1995 from FCX to RTZ and signed by RTZ as of March 7, 1995 (the "Letter of Intent"), FCX and RTZ confirmed their mutual intention with respect to participation by RTZ or one or more of its subsidiaries in certain transactions relating to operations of FCX and its subsidiaries (B) The transactions referred to in the Letter of Intent include, among other things, (i) the establishment of joint ventures, and certain financing arrangements in connection therewith, to explore and develop within the Contract Areas covered by the PT-FI Contract of Work and the PT-IRJA Contract of Work (ii) the purchase by RTZ or one or more subsidiaries of RTZ of 25% of the Huelva smelter of Rio Tinto Minera S.A. ("RTM"), FCX's wholly-owned Spanish subsidiary, and of the RTM group's related Spanish exploration rights at a price pro rata to FCX's cost of acquisition (iii) the establishment by FCX of an operating committee which will include representatives of FCX and RTZ and which will, among other things, be involved generally in day-to-day operations of the businesses of FCX and its operating subsidiaries (C) The transactions referred to in (i) of Recital (B) above will involve the incorporation by RTZ in Indonesia of one or more limited liability subsidiaries (D) The parties wish to record in a legally binding agreement the steps they will take in order to implement the transactions referred to in Recital (B) above and have agreed to guarantee the obligations of their respective subsidiaries under the Transaction Agreements IT IS AGREED as follows: - -2- DEFINITIONS 1. (1) Capitalised terms used in this Agreement that are not defined in this Agreement shall have the respective meanings given to them in the PT-FI Participation Agreement (including the annexes thereto). (2) In this Agreement unless the context otherwise requires, the following terms shall have the following meanings: (a) "Eastern Minerals Contract Area" means the Contract Area as defined in the PT-IRJA Contract of Work (b) "Effective Date" has the meaning assigned to that expression in the PT-FI Participation Agreement (c) "Exploration Obligation" means the obligation on the part of RTZ contained in Clause 6(1) (d) "Government" means The Government of the Republic of Indonesia (e) "Indonesian Closing" means the closing of the transactions contemplated by Clause 4(1) (f) "Indonesian Documents" means the PT-FI Participation Agreement, the RTZ Loan Agreement, the Security Agreements and the documents to be executed in connection therewith pursuant to the terms thereof (g) "Indonesian Operations" means together the operations of PT-FI in the PT-FI Contract Area and the operations of PT-IRJA in the Eastern Minerals Contract Area (h) "Intercreditor Agreement" means the agreement to be entered into between, among others, the Banks, RTZ Lender, PT-RTZ and the trustee under the Security Agreements, in form and substance satisfactory to the parties thereto and FCX, containing provisions reflecting the Bank Consent Letters attached to this Agreement as Exhibit B (i) "Letter of Intent" means the letter of intent referred to in recital (A) (j) "PT-FI" means P.T. Freeport Indonesia Company, a limited liability company organised under the laws of the Republic of Indonesia and domesticated in the State of Delaware, USA - -3- (k) "PT-FI Contract Area" means the Contract Area as defined in the PT-FI Contract of Work, comprising Contract Area Block A and Contract Area Block B (l) "PT-FI Contract of Work" means the Contract of Work dated 30 December 1991 between the Government and PT-FI whereby the Government appointed PT-FI as the sole contractor for the Government with respect to the PT-FI Contract Area, with the sole rights to explore, mine, process, store, transport, market, sell and dispose of Products (as defined in the PT-FI Contract of Work) in the PT-FI Contract Area (m) "PT-FI Participation Agreement" means the participation agreement between PT-FI and PT-RTZ (including all annexes and schedules thereto) in relation to the PT-FI Contract Area in the form set out in Schedule 1 to this Agreement or as the same may be amended by mutual agreement (n) "PT-IRJA" means P.T. IRJA Eastern Minerals Corporation, a limited liability company organised under the laws of the Republic of Indonesia (o) "PT-IRJA Agreements" means the agreement(s) referred to in Clause 5(1) (p) "P.T. IRJA Closing" means the closing of the transactions contemplated by Clause 5(1) (q) "PT-IRJA Contract of Work" means the Contract of Work dated 15 August 1994 between the Government and PT-IRJA whereby the Government appointed PT- IRJA as the sole contractor for the Government with respect to the Eastern Minerals Contract Area, with the sole rights to explore, mine, process, store, transport, market, sell and dispose of Products (as defined in the PT-IRJA Contract of Work) in the Eastern Minerals Contract Area (r) "PT-RTZ" means the limited liability company in Indonesia first mentioned in Clause 3 which shall be party to the PT-FI Participation Agreement (s) "RTM" means Rio Tinto Minera S.A. (t) "RTZ-Approved Costs" has the meaning assigned to that expression in Clause 6(3) - -4- (u) "RTZ Lender" means the wholly-owned subsidiary of RTZ organised or to be organised under the laws of England which RTZ designates as the lender under the RTZ Loan Agreement (v) "RTZ Loan Agreement" means the agreement (including all annexes and schedules thereto) between PT-FI and RTZ Lender whereby RTZ Lender agrees to make available to PT-FI a facility of up to $450,000,000 to fund one or more Approved Expansion Projects in the form set out in Schedule 2 to this Agreement or as the same may be amended by mutual agreement (w) "Security Agreements" means the Trust Agreement to be executed by PT-FI in order, inter alia, to provide security for the RTZ Loan as provided in and scheduled to the RTZ Loan Agreement (including the Trust Arrangements described in Exhibit A to this Agreement together with the power of attorney and any other documents referred to therein) (x) "Spanish Closing" means the closing of the transactions contemplated by Clause 5(2) (y) "Spanish Documents" means the agreements as referred to in Clause 5(2) (z) "Stock Purchase Agreement" means the Agreement of even date between Freeport-McMoRan Inc. and FCX, on the one hand, and RTZ, RTZ Indonesia Limited and RTZ America, Inc., on the other hand (aa) "subsidiary" has the meaning assigned to that expression in Section 736 of the Companies Act 1985 of Great Britain (bb) "Transaction Agreements" means any one or more of the following agreements, namely the Indonesian Documents, the PT-IRJA Agreements and the Spanish Documents. (3) In this Agreement (a) references to any document or agreement includes such document or agreement as amended, novated, substituted, varied, supplemented or replaced from time to time (b) references to any statute, code, decree, regulation or ordinance or to any provision thereof includes any modification or re- enactment thereof or any provision substituted therefor and all statutory or other instruments issued thereunder - -5- (c) headings to clauses, sub-clauses, Schedules or Annexes are for convenience only and shall not affect the interpretation of this Agreement. OPERATING COMMITTEE OF FCX 2. (1) FCX shall, promptly following the date of this Agreement, establish an Operating Committee, among other things to: (a) monitor progress towards meeting the conditions precedent to the various closings referred to in this Agreement (b) receive reports on the operations from time to time of FCX and its operating subsidiaries (c) design appropriate actions for presentation to and consideration by the board of directors of FCX respecting the operating subsidiaries of FCX (d) develop plans and make recommendations to the board of directors of FCX (e) monitor execution of plans approved by the board of directors of FCX and the incurring of Exploration Costs contemplated in Clause 6(1)(a), and (f) subject to the control of the board of directors of FCX, be involved generally in day-to-day operations of the businesses of FCX and its operating subsidiaries. (2) The Operating Committee referred to in Clause 2(1) above will have the following members and, unless otherwise agreed between FCX and RTZ, no others: (a) the President and Chief Operating Officer of FCX, as Chairman (b) one member appointed by RTZ (c) the General Manager of the mining operations of PT-FI. Each of FCX, PT-FI and RTZ may appoint one or more alternates to act in the absence of the regular member appointed by it. Any alternate so acting shall be deemed a member of the Operating Committee. Appointments shall be made or changed by written notice to the other Committee members. - -6- ESTABLISHMENT OF INDONESIAN SUBSIDIARY(IES) 3. As soon as practicable after the date of this Agreement, RTZ shall use its best endeavours to procure that there is established a limited liability company in Indonesia which is an indirect wholly-owned subsidiary of RTZ and, subject to the conditions contained herein, RTZ will procure that such company will enter into the PT-FI Participation Agreement and become a Participant (as defined in the PT-FI Participation Agreement) with the rights and obligations with respect to the PT-FI Contract of Work and the PT-FI Contract Area therein contained. Should the PT-IRJA Agreements require or RTZ elect to have as the RTZ party thereto a limited liability company established in Indonesia which is other than P.T.-RTZ, RTZ shall use its best endeavours to procure that such a limited liability company is established as soon as practicable (such other limited liability company being hereafter referred to as PT-RTZ2). FCX shall render to RTZ all such assistance as RTZ may reasonably require to facilitate the establishment of the limited liability company(ies) referred to in this Clause 3. INDONESIAN CLOSING 4. The Indonesian Closing shall take place at RTZ's offices in London, England on the fifth Business Day after the last of the conditions precedent referred to in Clauses 9(1)(a), 9(2) and 9(3) to be satisfied or waived shall have been satisfied or waived by the party or parties entitled to waive the same as provided in the paragraphs concerned of such sub-clauses (or at such other place or places and/or on such other date as FCX and RTZ may agree) when the following shall occur: (a) FCX shall procure that PT-FI shall execute each of the following agreements: (i) the PT-FI Participation Agreement (ii) the Assignment of an Interest in the Contract of Work scheduled to the PT-FI Participation Agreement (iii) the RTZ Loan Agreement (iv) the Security Agreements (b) RTZ shall procure that P.T.-RTZ shall execute the following agreements: (i) the PT-FI Participation Agreement (ii) the Assignment of an Interest in the Contract of Work scheduled to the PT-FI Participation Agreement - -7- (c) RTZ shall procure that RTZ Lender shall execute each of the following agreements: (i) the RTZ Loan Agreement (ii) the Security Agreements. OTHER CLOSINGS 5. (1) As soon as practicable after the date of this Agreement, each of FCX and RTZ shall negotiate in good faith with a view to agreeing as soon as practicable one or more agreements in respect of the Eastern Minerals Contract Area in substantially the form of the PT-FI Participation Agreement as modified to reflect the parties' intentions as set out in the Letter of Intent or otherwise to provide an alternative structure which achieves the same business objective on a mutually more favourable basis from tax, accounting, corporate and regulatory perspectives. Each of FCX and RTZ shall procure that, as soon as practicable after the form and content of such agreement(s) are agreed, it will (if itself a party to any such agreement) execute the same or procure (in any other case) that its subsidiary or subsidiaries which is or are to be party to any such agreement(s) execute the same. If any such agreement(s) contain conditions precedent which are required to be satisfied or fulfilled, each of FCX and RTZ shall use its best endeavours to ensure satisfaction or fulfilment of the same as soon as practicable. (2) As soon as practicable after the date of this Agreement, each of FCX and RTZ shall negotiate in good faith with a view to agreeing as soon as practicable one or more agreements in respect of the Spanish purchases referred to in paragraph (ii) of Recital (B) which reflect their mutual intention in respect thereof set out in the Letter of Intent or any alternative structure which achieves the same business objective on a more favourable basis from tax, accounting, corporate and regulatory perspectives. Each of FCX and RTZ shall procure that, as soon as practicable after the form and content of such agreement(s) are agreed, it will (if itself a party to any such agreement) execute the same or procure (in any other case) that its subsidiary or subsidiaries which is or are to be party to any such agreement(s) execute the same. If any such agreement(s) contain conditions precedent which are required to be satisfied or fulfilled, each of FCX and RTZ shall each use its best endeavours to ensure satisfaction or fulfilment of the same as soon as practicable. Failure by the parties hereto to reach agreement on the agreements referred to in this Clause 5(2) shall not affect the validity or enforceability of the remainder of this Agreement. EXPLORATION OBLIGATION 6. (1) Subject to the Indonesian Closing occurring (except as otherwise agreed to in writing by RTZ), RTZ shall procure that P.T.-RTZ and the RTZ subsidiary party to the P.T. IRJA Agreements (whether PT-RTZ2 or some other subsidiary of RTZ) shall: - -8- (a) reimburse PT-FI and P.T. IRJA respectively for all Exploration Costs (including, without limitation, any costs incurred in respect of the Feasibility Study referred to in Clause 8(2)(b)) which are incurred after the date of this Agreement and up to the date of the Indonesian Closing pursuant to PT-FI's or (as the case may be) P.T. IRJA's respective existing Exploration budgets for 1995 or regular annual Exploration budgets for 1996 up to a maximum aggregate amount of $50,000,000 (or such greater amount as RTZ at its sole discretion may agree) (b) after the Indonesian Closing, pay in accordance with the terms of the PT-FI Participation Agreement or the P.T. IRJA Agreements (as the case may be) all Exploration Costs approved by the relevant Exploration Committee incurred in respect of the PT-FI Contract Area or (as the case may be) the Eastern Minerals Contract Area up to a maximum aggregate sum of $[100,000,000 - A], where A is the aggregate sum reimbursed pursuant to Clause 6(1)(a) above, provided that not less than $40,000,000 of the aggregate sum referred to above shall be reimbursed or paid by P.T.-RTZ in respect of Contract Area Block A (as defined in the PT-FI Contract of Work) and that not less than $10,000,000 of the aggregate sum referred to above shall be reimbursed or paid by the RTZ subsidiary party to the P.T. IRJA Agreements in respect of the Eastern Minerals Contract Area. (2) Subject to the Indonesian Closing occurring, should RTZ-Approved Costs not equal or exceed $100,000,000 on the fifth anniversary of the Effective Date, RTZ shall, at its option, either pay to the Operator under the PT-FI Participation Agreement the difference between $100,000,000 and the total of RTZ-Approved Costs on the fifth anniversary of the Effective Date or procure that there is re-assigned to PT-FI and to the FCX party to the P.T.-IRJA Agreements all interests in the respective Contracts of Work, revenues, assets and other property assigned to or owned by P.T.-RTZ (in the case of the re-assignment to PT-FI) or the subsidiary of RTZ party to the P.T.-IRJA Agreements (in the case of the re-assignment to the FCX party to the P.T.-IRJA Agreements), in the event of which re-assignments P.T.-RTZ and the RTZ subsidiary party to the P.T.-IRJA Agreements will have no further interest in or obligations in respect of the PT-FI Participation Agreement or (as the case may be) the PT-IRJA Agreements and all rights and obligations of all of the parties to the Indonesian Documents and the P.T.-IRJA Agreements executed prior to such re-assignments will terminate. (3) In this Clause 6, (a) "RTZ-Approved Costs" means together (i) the aggregate of Exploration Costs reimbursed by P.T.-RTZ and the RTZ subsidiary party to the P.T.-IRJA Agreements pursuant to Clause 6(1)(a) and Exploration Costs incurred or - -9- approved pursuant to the PT-FI Participation Agreement or the P.T.-IRJA Agreements and (ii) costs or expenditure which are/is not incurred but which are/is approved by RTZ for expenditure (and in respect of which RTZ or P.T.-RTZ or the RTZ subsidiary party to the P.T.-IRJA Agreements had made funds available to the Operator under the PT-FI Contract of Work or the Operator under the P.T.-IRJA Contract of Work at such time or times over the period ending on the fifth anniversary of the Effective Date as such costs shall have been approved by RTZ) on labour, supplies, contract costs and other costs directly attributable or allocable to Exploration in the PT-FI Contract Area or the Eastern Minerals Contract Area, including fully loaded labour, logistical support costs, facility and other miscellaneous costs required to support these activities (b) reference to approval by RTZ means approval either by the board of directors of P.T.-RTZ or (as the case may be) the subsidiary of RTZ party to the PT-IRJA Agreements or by the representative(s) on the relevant Exploration Committee appointed or nominated by P.T.-RTZ pursuant to the PT-FI Participation Agreement or (as the case may be) the subsidiary of RTZ party to the PT-IRJA Agreements. REPRESENTATIONS AND WARRANTIES 7. (1) FCX represents and warrants to RTZ that, except as mentioned in Schedule 3 to this Agreement: (a) each of FCX and its subsidiaries which are to be parties to any of the Transaction Agreements is, or will be at the time of execution by any such subsidiary of any of the Transaction Agreements, a corporation duly organised, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has, or will have at the time of execution by it of any of the Transaction Agreements, the requisite corporate power and authority to own and operate its properties and to carry on its business as it is now being or will be conducted. Each of FCX and such of its subsidiaries is, or will be at the time of execution by it of any of the Transaction Agreements, duly qualified to do business as a foreign corporation and is, or will be at the time of execution by it of any of the Transaction Agreements, in good standing in every jurisdiction in which the nature of the business conducted or properties owned or leased or the nature of its activities makes such qualification necessary - -10- (b) FCX has the requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorised and approved by FCX's board of directors and no other corporate proceedings on the part of FCX are necessary to authorise this Agreement or the transactions contemplated hereby. This Agreement constitutes a valid and binding agreement of FCX, enforceable against it in accordance with its terms, subject to bankruptcy, reorganisation, insolvency, moratorium or other laws affecting the enforcement of creditors' rights generally and subject to any limitations acts and to general equitable principles (c) the execution, delivery and performance by FCX of this Agreement and by its subsidiaries which are to be parties to any of the Transaction Agreements of any of the Transaction Agreements to which they are to be parties does not and will not, with or without the passage of time or the giving of notice or both (i) contravene, conflict with, or result in a breach of or default under, any agreement, obligation or commitment to which FCX, or any of its subsidiaries which are to be parties to any of the Transaction Agreements is a party or by which FCX, or any of its subsidiaries which are to be parties to any of the Transaction Agreements is bound, (ii) contravene any provision of any applicable law or permit to which FCX, or any of its subsidiaries which are to be parties to any of the Transaction Agreements is subject, (iii) contravene any order, judgment or decree applicable to FCX, or any of its subsidiaries which are to be parties to any of the Transaction Agreements, (iv) conflict with, or result in a breach under, any term of the constitutional documents of FCX, or any of its subsidiaries which are to be parties to any of the Transaction Agreements or (v) result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the property or assets of FCX, or any of its subsidiaries which are to be parties to any of the Transaction Agreements except, in the case of paragraphs (i), (ii), (iii) and (v), for any such items which, individually or in the aggregate, would not reasonably be expected (y) materially to impair the ability of FCX or any of its subsidiaries which are to be parties to any of the Transaction Agreements to consummate the transactions contemplated by this Agreement or the Transaction Agreements, or (z) materially to impair the ability of RTZ or any of its subsidiaries which are to be parties to any of the Transaction Agreements to receive the benefit of the transactions contemplated by this Agreement or the Transaction Agreements - -11- (d) no transfer, consent, licence, approval, waiver, authorisation or declaration of, and no filing or registration with, any governmental or regulatory authority or third party is required to be obtained or made by FCX or any of its subsidiaries which are to be parties to any of the Transaction Agreements in connection with the execution, delivery and performance of this Agreement (in the case of FCX) or any of the Transaction Agreements (in the case of its subsidiaries which are to be parties to the Transaction Agreements) or the consummation of the transactions contemplated hereby or thereby, other than such transfers, consents, licences, approvals, waivers, authorisations, declarations, filings or registrations, which, if not obtained or made, individually or in the aggregate, would not reasonably be expected (y) materially to impair the ability of FCX or any of its subsidiaries which are to be parties to any of the Transaction Agreements to consummate the transactions contemplated by this Agreement or the Transaction Agreements, or (z) materially to impair the ability of RTZ or any of its subsidiaries which are to be parties to any of the Transaction Agreements to receive the benefit of the transactions contemplated by this Agreement or the Transaction Agreements (e) there is no action, suit, investigation or proceeding pending or (to the knowledge of FCX) threatened against FCX or any of its subsidiaries which are to be parties to any of the Transaction Agreements or any of their respective properties or assets by or before any court, arbitrator or governmental or regulatory authority, department, commission, board, bureau, agency or instrumentality, which questions the validity or enforceability of, or seeks to invalidate, this Agreement or any of the Transaction Agreements or any action taken or to be taken pursuant to this Agreement or any of the Transaction Agreements, or which has or is reasonably likely to have a material adverse effect on the ability of FCX or any of its subsidiaries which are to be parties to any of the Transaction Agreements to perform its or their respective obligations under this Agreement or any of the Transaction Agreements and none of FCX and its subsidiaries which are to be parties to the Transaction Agreements is in default in any material respect with respect to any material judgment, order, writ, injunction, decree or award (f) each of FCX and its subsidiaries which are to be parties to the Transaction Agreements is in compliance in all material respects with all applicable laws, except where non-compliance, individually or in the aggregate, would or does not have or result in a material adverse effect on the ability of FCX or any of its subsidiaries which are to be parties to any of the Transaction Agreements to perform its or their respective obligations under this Agreement or any of the - -12- Transaction Agreements. None of FCX and its subsidiaries which are to be parties to the Transaction Agreements has received any notice of any alleged violation of law applicable to it from a governmental or regulatory authority of proper jurisdiction or any formal notice of any alleged violation of law applicable to it or any such subsidiaries from any other person, other than any alleged violation, which if proven, would not reasonably be expected to have or result in a material adverse effect on the ability of FCX or any of its subsidiaries which are to be parties to any of the Transaction Agreements to perform its or their respective obligations under this Agreement or any of the Transaction Agreements (g) FCX is the sole registered and beneficial owner of 81.28% of the outstanding shares of PT-FI, 49% of the shares of P.T. Indocopper Investama (an Indonesian Company which owns 9.36% of the shares of PT-FI) and 100% of the shares of Eastern Mining Company Inc., a Delaware corporation which owns 80% of the shares of P.T. IRJA and FCX represents and warrants to RTZ that Eastern Mining Company Inc. is the sole registered and beneficial owner of 80% of the shares of P.T. IRJA and that it is the indirect owner of 100% of the shares of RTM. All such shares have been duly issued and are fully-paid or properly credited as fully-paid and are beneficially owned by FCX or the companies mentioned in the immediately preceding sentence free from all security interests, options, equities, claims, powers of attorney or other third party rights (including without limitation, rights of pre-emption) of any nature whatsoever. Without prejudice to the generality of the foregoing, no third party has any right to vote such shares (whether in whole or in part) or to exercise or enjoy any other rights (including a right to dividends or to appoint directors) in relation to such shares (h) FCX has delivered to or made available to RTZ or its affiliates all geological data and other similar information in FCX's possession or control derived from PT-FI's, P.T. IRJA's or RTM's activities in the PT-FI Contract Area or, as the case may be, the Eastern Minerals Contract Area or, as the case may be, Spain which any person interested in acquiring a participating interest in any of such areas would reasonably be expected to wish to see and all other information reasonably requested by RTZ or its Affiliates in FCX's possession or control concerning the PT-FI Contract of Work, the P.T. IRJA Contract of Work, PT-FI's operations in the PT-FI Contract Area, P.T. IRJA's operations under the P.T. IRJA Contract of Work, RTM's area of operations and the disposal of Products - -13- (i) FCX is not a party to any agreement or under any other obligation under or pursuant to which it agrees to procure that PT-FI shall create or give or permit to subsist in favour of any third party any Encumbrance over P.T.-RTZ's share of the Joint Account Assets or over any revenues allocated to PT-RTZ (or to which P.T.-RTZ is entitled) under the PT-FI Participation Agreement. (2) RTZ represents and warrants to FCX that, except as mentioned in Schedule 4: (a) each of RTZ and its subsidiaries which are to be parties to any of the Transaction Agreements is, or will be at the time of execution by any such subsidiary of any of the Transaction Agreements, a corporation duly organised, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has, or will have at the time of execution by it of any of the Transaction Agreements, the requisite corporate power and authority to own and operate its properties and to carry on its business as it is now being or will be conducted (b) RTZ has the requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorised and approved by RTZ's board of directors and no other corporate proceedings on the part of RTZ are necessary to authorise this Agreement or the transactions contemplated hereby. This Agreement constitutes a valid and binding agreement of RTZ, enforceable against it in accordance with its terms, subject to bankruptcy, reorganisation, insolvency, moratorium or other laws affecting the enforcement of creditors' rights generally and subject to any limitations acts and to general equitable principles (c) the execution, delivery and performance by RTZ of this Agreement and by its subsidiaries which are to be parties to any of the Transaction Agreements of any of the Transaction Agreements to which they are to be parties does not and will not, with or without the passage of time or the giving of notice or both (i) contravene, conflict with, or result in a breach of or default under, any agreement, obligation or commitment to which RTZ, or any of its subsidiaries which are to be parties to any of the Transaction Agreements is a party or by which RTZ, or any of its subsidiaries which are to be parties to any of the Transaction Agreements is bound, (ii) contravene any provision of any applicable law or permit to which RTZ, or any of its subsidiaries which are to be parties to any of the Transaction Agreements is subject, (iii) contravene any - -14- order, judgment or decree applicable to RTZ, or any of its subsidiaries which are to be parties to any of the Transaction Agreements, (iv) conflict with, or result in a breach under, any term of the constitutional documents of RTZ, or any of its subsidiaries which are to be parties to any of the Transaction Agreements or (v) result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the property or assets of RTZ, or any of its subsidiaries which are to be parties to any of the Transaction Agreements except, in the case of paragraphs (i), (ii), (iii) and (v), for any such items which, individually or in the aggregate would not reasonably be expected (y) materially to impair the ability of RTZ or any of its subsidiaries which are to be parties to any of the Transaction Agreements to consummate the transactions contemplated by this Agreement or the Transaction Agreements, or (z) materially to impair the ability of FCX or any of its subsidiaries which are to be parties to any of the Transaction Agreements to receive the benefit of the transactions contemplated by this Agreement or the Transaction Agreements (d) no transfer, consent, licence, approval, waiver, authorisation or declaration of, and no filing or registration with, any governmental or regulatory authority or third party is required to be obtained or made by RTZ or any of its subsidiaries which are to be parties to the Transaction Agreements in connection with the execution, delivery and performance of this Agreement or any of the Transaction Agreements (as the case may be) or the consummation of the transactions contemplated hereby or thereby, other than such transfers, consents, licences, approvals, waivers, authorisations, declarations, filings or registrations, which if not obtained or made, individually or in the aggregate, would not reasonably be expected (y) materially to impair the ability of RTZ or any of its subsidiaries which are to be parties to any of the Transaction Agreements to consummate the transactions contemplated by this Agreement or the Transaction Agreements, or (z) materially to impair the ability of FCX or any of its subsidiaries which are to be parties to any of the Transaction Agreements to receive the benefit of the transactions contemplated by this Agreement or the Transaction Agreements (e) there is no action, suit, investigation or proceeding pending or (to the knowledge of RTZ) threatened against RTZ or any of its subsidiaries which are to be parties to any of the Transaction Agreements or any of their respective properties or assets by or before any court, arbitrator or governmental or regulatory authority, department, commission, board, bureau, agency or instrumentality, which questions the validity or enforceability of, or seeks to invalidate, this Agreement or any of the Transaction Agreements or - -15- any action taken or to be taken pursuant to this Agreement or any of the Transaction Agreements, or which has or is reasonably likely to have a material adverse effect on the ability of RTZ or any of its subsidiaries which are to be parties to any of the Transaction Agreements to perform its or their respective obligations under this Agreement or any of the Transaction Agreements and none of RTZ and its subsidiaries which are to be parties to the Transaction Agreements is in default in any material respect with respect to any material judgment, order, writ, injunction, decree or award (f) each of RTZ and its subsidiaries which are to be parties to the Transaction Agreements is in compliance in all material respects with all applicable laws, except where non-compliance, individually or in the aggregate, would or does not have or result in a material adverse effect on the ability of RTZ or any of its subsidiaries which are to be parties to any of the Transaction Agreements to perform its or their respective obligations under this Agreement or any of the Transaction Agreements. None of RTZ and its subsidiaries which are to be parties to the Transaction Agreements has received any notice of any alleged violation of law applicable to it from a governmental or regulatory authority of proper jurisdiction or any formal notice of any alleged violation of law applicable to it or any such subsidiaries from any other person, other than any alleged violation, which if proven, would not reasonably be expected to have or result in a material adverse effect on the ability of RTZ or any of its subsidiaries which are to be parties to any of the Transaction Agreements to perform its or their respective obligations under this Agreement or any of the Transaction Agreements. (3) Each of FCX and RTZ represents and warrants to the other that, to the best of its knowledge, it is unaware of any facts or circumstances which have not been disclosed in this Agreement and which should have been disclosed to the other party in order to prevent the representations and warranties given by it in this Clause 7 from being materially misleading. COVENANTS 8. (1) Each of FCX and RTZ covenants and agrees with the other of them as follows: (a) It shall use its best endeavours and shall co- operate with the other of them to take or cause to be taken all acts and to do or cause to be done all things necessary, proper or desirable to enable the conditions set out in Clause 9 to be satisfied as soon as practicable after the date of this Agreement and to cause the consummation of - -16- the transactions contemplated by this Agreement in accordance with the terms and conditions of this Agreement. (b) It will not knowingly or voluntarily take any action which could cause or constitute a breach of any of the representations and warranties on its part set out in Clause 7 or which would cause any of such respective representations and warranties to be materially inaccurate and in the event of its becoming aware of the occurrence of, or the pending or threatened occurrence of any such breach or inaccuracy, it will promptly notify the other of them of such breach or inaccuracy and use its reasonable efforts to prevent or remedy promptly such breach or inaccuracy. (c) It shall notify the other of them promptly of the receipt by it of any written comments of or other written notification fromany governmental or regulatory authority which relates in a material way to the other's interest in this Agreement or any of the transactions contemplated hereby and will supply the other of them with copies of all correspondence with any governmental or regulatory authority concerning such matters. (d) It shall, subject to obtaining the consent of the other (which shall not be unreasonably withheld), have the right to second a reasonable number of its staff or the staff of its Affiliates to the Affiliates of the other. (2) In addition to the covenants and agreements set out in Clause 8(1) above, FCX covenants and agrees with RTZ that, (a) from and after the date of this Agreement, (i) FCX shall not and FCX shall procure that none of its Affiliates shall enter into any agreement, contract, transaction, commitment, plan or arrangement or do any act or thing which may materially and adversely impair or affect the ability of any such or any other Affiliate of FCX to consummate any of the transactions contemplated by this Agreement (ii) FCX shall procure that PT-FI shall comply with the covenants and undertakings on its part contained in Clauses 7.1, 7.2, 7.5.1.2, 9.4 and, except in respect of transactions disclosed in the Stock Purchase Agreement, 9.6 of the PT-FI Participation Agreement and Clauses 8(1)(b) and 8(1)(c) of the RTZ Loan Agreement in the same manner as if it had - -17- executed each of the PT-FI Participation Agreement and the RTZ Loan Agreement as of the date of this Agreement and (b) until the Effective Date, RTZ shall have the sole right (i) to propose as the subject of a Feasibility Study an Expansion Project which satisfies the criteria specified in, or agreed pursuant to, Clause 10.5 and which would be the first Approved Expansion Project and (ii) to determine that the Expansion Project which is the subject of such Feasibility Study shall be the first Approved Expansion Project, for which purpose the approval of the board of directors of FCX and the board of directors (and, if required under its constituent documents, the board of commissioners) of PT-FI shall be deemed to have been given and (c) without prejudice to the covenant on its part contained in Clause 8(1)(a), it will use its best endeavours to agree with RTZ a form of Intercreditor Agreement and Trust Agreement which protects the interests of the parties as envisaged in the Indonesian Documents and which, in the case of the Intercreditor Agreement, contains provisions reflecting the Bank Consent Letters attached to this Agreement as Exhibit B and which, in the case of the Trust Agreement, contains provisions reflecting the Trust Arrangements as described in Exhibit A to this Agreement and in the Bank Consent Letters, and to co-operate with RTZ in persuading the other parties to those Agreements to execute the same in the forms agreed between PT-FI and RTZ. CONDITIONS PRECEDENT 9. (1) The obligations of each of FCX and RTZ to consummate: (a) the Indonesian Closing shall be subject to the satisfaction (or waiver by each of FCX and RTZ) at or prior to the Indonesian Closing of each of the following conditions: (i) the consummation of the Indonesian Closing and the consummation of the transactions contemplated by each of the Indonesian Documents shall not be prohibited by any order or injunction of a United States, English or Indonesian federal, state, national or provincial court of competent jurisdiction or by the European Court of Justice, or other governmental or regulatory authority of the United States, the European Union, the United Kingdom, or Indonesia, and there shall not have been any action taken or any statute, rule or regulation enacted, promulgated or deemed applicable to the Indonesian Closing or the transactions contemplated by - -18- any of the Indonesian Documents by any United States, European, United Kingdom or Indonesian federal, state, national or provincial government or governmental agency or other governmental or regulatory authority of the United States, European Union, the United Kingdom or Indonesia, that makes consummation of the Indonesian Closing or such transactions illegal or unlawful; (ii) each of the other party and its Affiliates shall have complied in all material respects with its agreements and covenants contained in this Agreement to be performed on or prior to the Indonesian Closing, and all representations and warranties of each of the other party and its Affiliates contained in this Agreement or in any of the Indonesian Documents shall be true and correct in all material respects on and as of the Indonesian Closing with the same effect as though made on and as of the date of the Indonesian Closing by reference to the facts and circumstances then existing; (b) each of the P.T.-IRJA Closing and the Spanish Closing shall be subject to the satisfaction (or waiver by each of FCX and RTZ) at or prior to such Closing of each of the following conditions: (i) the consummation of such Closing and the consummation of the transactions contemplated by each of the P.T.-IRJA Agreements or, as appropriate, the Spanish Documents shall not be prohibited by any order or injunction of a United States, English, Indonesian or Spanish federal, state, national or provincial court of competent jurisdiction or by the European Court of Justice, or other governmental or regulatory authority of the United States, the European Union, the United Kingdom, Indonesia or Spain, and there shall not have been any action taken or any statute, rule or regulation enacted, promulgated or deemed applicable to such Closing or the transactions contemplated by any of the P.T.-IRJA Agreements or, as appropriate, the Spanish Documents by any United States, European, United Kingdom, Indonesian or Spanish federal, state, national or provincial government or governmental agency or other governmental or regulatory authority of the United States, European Union, the United Kingdom, Indonesia or Spain, that makes consummation of such Closing or such transactions illegal or unlawful; (ii) each of the other party and its Affiliates shall have complied in all material respects with its agreements and covenants - -19- contained in this Agreement to be performed on or prior to such Closing, and all representations and warranties of each of the other party and its Affiliates contained in this Agreement or in any of the P.T.-IRJA Agreements or, as appropriate, the Spanish Documents shall be true and correct in all material respects on and as of such Closing with the same effect as though made on and as of the date of such Closing by reference to the facts and circumstances then existing; (iii) the prior occurrence of the Indonesian Closing. (2) The obligations of RTZ to consummate the Indonesian Closing shall be subject to the satisfaction (or waiver by RTZ) of each of the following additional conditions: Legal Opinions (i) RTZ, P.T.-RTZ and RTZ Lender shall each have received opinions of Indonesian counsel for PT-FI in form and substance reasonably requested by RTZ relating to the Indonesian Documents and the transactions contemplated thereby (ii) RTZ, RTZ Lender and P.T.-RTZ shall each have received the opinion of Cravath Swaine & Moore, U.S. counsel for lenders to the Banks in form and substance reasonably requested by RTZ relating to the Intercreditor Agreement and the Security Agreements Corporate Approvals (iii) each of FCX and its subsidiaries which are to be parties to the Indonesian Documents shall have delivered to RTZ resolutions of the boards of directors (and, where required under their constituent documents, the boards of commissioners) of FCX and its subsidiaries which are to be parties to the Indonesian Documents respectively, duly certified by the Secretary or President-Director of each such company respectively, authorising and approving the transactions contemplated in the Indonesian Documents to which such company is to be party and authorising execution of the same (iv) FCX shall have delivered to RTZ a certificate of a Vice-President of FCX dated the date of the Indonesian Closing, - -20- satisfactory in form and substance to RTZ, certifying that (1) FCX has complied in all material respects with its agreements and covenants contained in this Agreement to be performed on or prior to the date of the Indonesian Closing and (2) all representations and warranties on the part of FCX set out in Clause 7 of this Agreement are true and correct in all material respects on and as of the Indonesian Closing with the same effect as though made on and as of the date of the Indonesian Closing by reference to the facts and circumstances then existing (v) each of the subsidiaries of FCX which are to be parties to the Indonesian Documents shall have delivered to RTZ a certificate of a duly authorised Director of each such subsidiary dated the date of the Indonesian Closing, satisfactory in form and substance to RTZ, certifying that all (if any) representations and warranties on their part set out in the Indonesian Documents are true and accurate in all material respects on and as of the Indonesian Closing. External Factors (vi) from the date of this Agreement to the Indonesian Closing, no change (or any condition, event or development involving a prospective change) shall have occurred or be threatened in the business, properties, assets, liabilities, condition (financial or otherwise), results of operations, or prospects of PT-FI, P.T. IRJA or the Indonesian Operations which may reasonably be expected to affect materially and adversely the operation of the PT-FI Participation Agreement, including, without limitation the benefit expected to be derived by RTZ therefrom (vii) on or after the date of this Agreement there shall not have occurred any outbreak or escalation of hostilities involving Indonesia or the province of Irian Jaya or the declaration by Indonesia of war or an emergency in respect of any civil or military insurrection occurring nationally or in the province of Irian Jaya - -21- Incorporation of P.T.-RTZ (viii) the incorporation of P.T.-RTZ in form and substance satisfactory to RTZ Basis of Tax (ix) RTZ shall have been satisfied that P.T.- RTZ will be subject to Indonesian tax as defined in the Convention between the Government of Great Britain and Northern Ireland and the Government of the Republic of Indonesia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains on its profits from Indonesian Operations calculated in accordance with the laws of Indonesia by deducting from its proportionate share of revenues from Indonesian Operations costs and liabilities incurred in Indonesian Operations or otherwise subject to the tax payable in Indonesia (on profits from Joint Operations calculated as above) which will be allowed as a credit against UK corporation tax under the provisions of Section 790 of the Income and Corporation Taxes Act 1988 of Great Britain Indonesianisation (x) RTZ shall have been satisfied that P.T.- RTZ will be required to introduce Indonesian shareholding into P.T.-RTZ in accordance with Governmental Regulation No.20 of 1994 (PP20) of the Republic of Indonesia and not in the manner set out in Article 24 of the PT-FI Contract of Work. Governmental and Other Third Party Approvals (xi) PT-FI shall have received the prior written approval, in form and substance satisfactory to RTZ, of the Minister of Mines and Energy, acting for and on behalf of the Government of the Republic of Indonesia, to the Assignment of an Interest in the PT-FI Contract of Work (xii) RTZ shall have received such evidence as it may require (including, without limitation, the Intercreditor Agreement duly executed by the parties thereto other than P.T.-RTZ and RTZ Lender) that the lenders and other creditors referred to in Schedule 5 to this Agreement have released, waived or consented to any and all rights they may have to P.T.-RTZ's share of the Joint Account Assets (as defined in the PT-FI - -22- Participation Agreement) or any part thereof or over any revenues allocated to P.T.-RTZ (or to which P.T.-RTZ is entitled) under the PT-FI Participation Agreement or to the P.T.-RTZ Assets (as defined in the PT-FI Participation Agreement) and to the execution by PT-FI of the Assignment of an Interest in the PT-FI Contract of Work or as otherwise required in connection with the Security Agreements (xiii)RTZ shall have received the Security Agreements duly executed by the parties thereto other than PT-FI, RTZ Lender and (if it is a party thereto) PT-RTZ (xiv) each of FTX and FCX shall have received the consent of the banks party to FTX's current credit facilities, in form and substance reasonably satisfactory to RTZ, to the definitive Indonesian Documents, and such consents shall not have been revoked (xv) PT-FI shall have received the approval, if required, of the Co-ordinating Team for Management of Offshore Commercial Loans under Presidential Decree No.39 of 1991 and of Bank Indonesia in accordance with the Foreign Capital Investment Law (No.1 of 1967) (as amended) to the RTZ Loan Agreement (xvi) RTZ shall have received in form and substance satisfactory to it copies of any and all other resolutions, authorisations, approvals, consents and licences, corporate, governmental or otherwise necessary or desirable on the part of FCX, PT-FI or any of FCX's other subsidiaries which are to be parties to the Indonesian Documents for the entry into and performance by FCX, or, as the case may be, PT-FI or any of FCX's other subsidiaries which are to be parties to the Indonesian Documents of its respective obligations under the Indonesian Documents to which it is to be party, for the transactions and matters to be implemented thereunder and/or for the validity and enforceability against FCX or, as the case may be, PT-FI or any of FCX's other subsidiaries which are to be parties to the Indonesian Documents of the Indonesian Documents to which it is to be party (3) The obligations of FCX to consummate the Indonesian Closing shall be subject to the satisfaction (or waiver by FCX) of each of the following additional conditions: - -23- Legal Opinion(s) (i) FCX shall have received the opinion of Indonesian counsel for RTZ in form and substance reasonably requested by FCX relating to the PT-FI Participation Agreement Corporate Approvals (ii) each of RTZ Lender and P.T.-RTZ shall have delivered to FCX resolutions of the boards of directors of RTZ Lender and P.T.-RTZ respectively, duly certified by the Secretary of RTZ Lender and the President Director of P.T.-RTZ respectively, authorising and approving the transactions contemplated in the Indonesian Documents to which such company is to be party and authorising execution of the same (iii) RTZ shall have delivered to FCX a certificate of the Secretary of RTZ dated the date of the Indonesian Closing, satisfactory in form and substance to FCX, certifying that (1) RTZ has complied in all material respects with its agreements and covenants contained in this Agreement to be performed on or prior to the date of the Indonesian Closing and (2) all representations and warranties on the part of RTZ set out in Clause 7 of this Agreement are true and correct in all material respects on and as of the Indonesian Closing with the same effect as though made on the date of the Indonesian Closing by reference to the facts and circumstances then existing (iv) P.T.-RTZ shall have delivered to FCX a certificate of the President Director of P.T.-RTZ dated the date of the Indonesian Closing, satisfactory in form and substance to FCX, certifying that all of the representations and warranties on its part set out in the PT-FI Participation Agreement are true and correct in all material respects on and as of the Indonesian Closing Third Party Approvals (v) FCX shall have received copies of the releases, waivers or consents by the Lenders and other creditors referred to in Schedule 5 to this Agreement of any and all rights they may have to P.T.-RTZ's share of the Joint Account Assets (as defined in the PT-FI Participation Agreement) or any part thereof or over any revenues allocated to P.T.-RTZ (or to which P.T.-RTZ is entitled) under the PT- FI Participation - -24- Agreement or to the P.T.-RTZ Assets (as defined in the PT-FI Participation Agreement) and to the execution by PT-FI of the Assignment of an Interest in the PT-FI Contract of Work or as otherwise required in connection with the Security Agreements (vi) each of FTX and FCX shall have received the consent of the banks party to FTX's current credit facilities, in form and substance reasonably satisfactory to FCX, to the definitive Indonesian Documents, and such consents shall not have been revoked. (4) The obligation of FCX to cause PT-FI to execute and deliver the Assignment of Interest in COW attached as Schedule 2 to the PT-FI Participation Agreement (and the obligation of PT-FI to so execute and deliver such Assignment) shall be subject to the satisfaction (or waiver by FCX) of the additional condition that the necessary Indonesian governmental consents or approvals shall have been obtained. GUARANTEES 10. (1) (a) FCX hereby unconditionally and irrevocably undertakes and agrees with RTZ to cause the due and punctual performance, payment and observance by each of its subsidiaries (including, without limitation, PT-FI) which are parties to any of the Transaction Agreements, in whatever capacity, and its successors of all of the terms, covenants, conditions, agreements and undertakings on the part of each such subsidiary to be performed or observed under and in accordance with this Agreement or any of the Transaction Agreements (all of such terms, covenants, conditions, agreements and undertakings on the part of such subsidiaries being collectively the "FCX Guaranteed Obligations") and agrees to indemnify RTZ and each of RTZ's subsidiaries which are parties to the Transaction Agreements against all loss, damage, liability, costs and expenses which RTZ or any such of RTZ's subsidiaries may suffer through or arising from any breach by any of FCX's subsidiaries which are parties to any of the Transaction Agreements of any of the FCX Guaranteed Obligations. Should any of FCX's subsidiaries which are parties to any of the Transaction Agreements fail for any reason in any manner whatsoever to perform, pay or observe, or shall be relieved, precluded or excused for any reason (other than in accordance with the express terms of this Agreement or any of the Transaction Agreement) from performing, paying or observing any of the FCX Guaranteed Obligations when the same shall be required to be performed, paid or observed under the terms of this Agreement or any of the Transaction Agreements, FCX shall itself duly and punctually perform, pay or observe, or cause to be duly and - -25- punctually performed, paid or observed, the obligations that any of FCX's subsidiaries which are parties to any of the Transaction Agreements failed to perform, pay or observe or was so relieved, precluded or excused (other than in accordance with the express terms of this Agreement or any of the Transaction Agreements). The undertakings and agreements of FCX under this Clause 10(1) are referred to as the "FCX Guarantee". (b) The obligations of FCX under the FCX Guarantee shall be irrevocable, absolute and unconditional and shall remain in full force and effect and shall not be released, discharged or impaired in any way for any reason, including, without limitation, by reason of: (i) any lack of validity or enforceability of, or the ability of any of FCX's subsidiaries which are parties to any of the Transaction Agreements or FCX to perform, pay or observe, the FCX Guaranteed Obligations or this Agreement (including the FCX Guarantee), (ii) the absence of any action to enforce the same, (iii) any waiver or consent by any of FCX's subsidiaries which are parties to any of the Transaction Agreements with respect to any provisions of this Agreement or the Transaction Agreements, (iv) the recovery of or any failure to recover any judgment against any of FCX's subsidiaries which are parties to any of the Transaction Agreements, (v) any extension of the time for performance of any FCX Guaranteed Obligations or this Agreement, (vi) the presence or absence of any action to enforce the FCX Guaranteed Obligations or this Agreement or (vii) any bankruptcy or reorganisation or similar proceeding involving any of FCX's subsidiaries which are parties to any of the Transaction Agreements or FCX or the rejection of this Agreement or any of the Transaction Agreements in the course of or as a result of such proceeding. (c) If RTZ or any of RTZ's subsidiaries which are parties to any of the Transaction Agreements is required by any court or otherwise to return to FCX, any Affiliate of FCX or any custodian trustee, debtor in possession, liquidator or other similar person, entity or official acting in relation to FCX or any such Affiliate of FCX, any amount paid by FCX or any such Affiliate of FCX and FCX's obligations under the FCX Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect, as though such payment by FCX or any such Affiliate of FCX had not been made. (d) FCX hereby irrevocably waives promptness, diligence, notice of acceptance and any other notice with respect to the FCX Guaranteed Obligations, the FCX Guarantee and this Agreement. - -26- (e) FCX hereby irrevocably waives any requirement that RTZ or any of RTZ's subsidiaries which are parties to any of the Transaction Agreements pursue or exhaust any right or take any action whatsoever against or with respect to any other person or any other security. (2) (a) RTZ hereby unconditionally and irrevocably undertakes and agrees with FCX to cause the due and punctual performance, payment and observance by each of its subsidiaries which are parties to any of the Transaction Agreements, in whatever capacity, and its successors of all of the terms, covenants, conditions, agreements and undertakings on the part of each such subsidiary to be performed or observed under and in accordance with this Agreement or any of the Transaction Agreements (all of such terms, covenants, conditions, agreements and undertakings on the part of such subsidiaries being collectively the "RTZ Guaranteed Obligations") and agrees to indemnify FCX and each of FCX's subsidiaries which are parties to the Transaction Agreements against all loss, damage, liability, costs and expenses which FCX or any such of FCX's subsidiaries may suffer through or arising from any breach by any of RTZ's subsidiaries which are parties to any of the Transaction Agreements of any of the RTZ Guaranteed Obligations. Should any of RTZ's subsidiaries which are parties to any of the Transaction Agreements fail for any reason in any manner whatsoever to perform, pay or observe, or shall be relieved, precluded or excused for any reason (other than in accordance with the express terms of this Agreement or any of the Transaction Agreements) from performing, paying or observing any of the RTZ Guaranteed Obligations when the same shall be required to be performed, paid or observed under the terms of this Agreement or any of the Transaction Agreements, RTZ shall itself duly and punctually perform, pay or observe, or cause to be duly and punctually performed, paid or observed, the obligations that any of RTZ's subsidiaries which are parties to any of the Transaction Agreements failed to perform, pay or observe or was so relieved, precluded or excused (other than in accordance with the express terms of this Agreement or any of the Transaction Agreements). The undertakings and agreements of RTZ under this Clause 10(2) are referred to as the "RTZ Guarantee". (b) The obligations of RTZ under the RTZ Guarantee shall be irrevocable, absolute and unconditional and shall remain in full force and effect and shall not be released, discharged or impaired in any way for any reason, including, without limitation, by reason of: (i) any lack of validity or enforceability of, or the ability of any of RTZ's subsidiaries which are parties to any of the Transaction Agreements or RTZ to perform, pay or observe, the RTZ - -27- Guaranteed Obligations or this Agreement (including the RTZ Guarantee), (ii) the absence of any action to enforce the same, (iii) any waiver or consent by any of RTZ's subsidiaries which are parties to any of the Transaction Agreements with respect to any provisions of this Agreement or the Transaction Agreements, (iv) the recovery of or any failure to recover any judgment against any of RTZ's subsidiaries which are parties to any of the Transaction Agreements, (v) any extension of the time for performance of any RTZ Guaranteed Obligations or this Agreement, (vi) the presence or absence of any action to enforce the RTZ Guaranteed Obligations or this Agreement or (vii) any bankruptcy or reorganisation or similar proceeding involving any of RTZ's subsidiaries which are parties to any of the Transaction Agreements or RTZ or the rejection of this Agreement or any of the Transaction Agreements in the course of or as a result of such proceeding. (c) If FCX or any of FCX's subsidiaries which are parties to any of the Transaction Agreements is required by any court or otherwise to return to RTZ, any Affiliate of RTZ or any custodian trustee, debtor in possession, liquidator or other similar person, entity or official acting in relation to RTZ or any such Affiliate of RTZ, any amount paid by RTZ or any such Affiliate of RTZ and RTZ's obligations under the RTZ Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect, as though such payment by RTZ or any such Affiliate of RTZ had not been made. (d) RTZ hereby irrevocably waives promptness, diligence, notice of acceptance and any other notice with respect to the RTZ Guaranteed Obligations, the RTZ Guarantee and this Agreement. (e) RTZ hereby irrevocably waives any requirement that FCX or any of FCX's subsidiaries which are parties to any of the Transaction Agreements pursue or exhaust any right or take any action whatsoever against or with respect to any other person or any other security. ALTERNATIVE ARRANGEMENTS 11. (1) Should the Indonesian Closing not have occurred for any reason prior to or on 31 December 1996, RTZ shall have the option at its absolute discretion to elect by written notice to FCX within a period of 30 days thereafter that (a) this Agreement shall lapse in which event it shall so lapse and neither party shall have any further obligations to the other hereunder save of any breaches of this Agreement occurring prior to such time or - -28- (b) (i) FCX shall enter into formal undertakings providing that the parties will operate under the Transaction Agreements and FCX shall guarantee that RTZ and its Affiliates will receive the equivalent financial benefits which would have been received by RTZ and its Affiliates pursuant to the terms of the Transaction Agreements and (ii) the Exploration Obligation shall apply to RTZ and RTZ shall in addition provide up to $750,000,000 for Approved Expansion Projects in accordance with the PT-FI Participation Agreement through other means (if necessary) and on such terms reasonably satisfactory to RTZ and FCX which provide the parties with the equivalent financial benefits which would have been received by RTZ, FCX and their respective Affiliates pursuant to the terms of the Indonesian Documents. (2) Should PT-FI be unable to obtain Advances under the RTZ Loan Agreement for reasons other than the operation of Clauses 4(2)(a) or 4(2)(b) of the RTZ Loan Agreement, RTZ will use all reasonable endeavours to provide the funding which would have been provided under the RTZ Loan Agreement through other means reasonably satisfactory to RTZ and FCX. Any such funds will be repayable solely through utilisation of 100% of Incremental Expansion Cashflow resulting from Approved Expansion Projects as defined in the PT-FI Participation Agreement. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS, ETC 12. All representations and warranties contained herein or made in writing by any party in connection herewith shall survive the execution and delivery of this Agreement, except that the representations and warranties contained in Clauses 7(1)(e), 7(1)(f), 7(1)(h), 7(2)(e) and 7(2)(f) shall survive the execution and delivery of this Agreement only until the date which is two years after the Effective Date. All statements contained in any certificate or other instrument delivered by either party pursuant to this Agreement or in connection with the transactions contemplated hereby or thereby shall constitute representations and warranties by such party under this Agreement. All agreements contained in this Agreement shall survive indefinitely until, by their respective terms, they are no longer operative. EXPENSES 13. Except as otherwise provided herein, each of FCX and RTZ shall pay all costs and expenses incurred by it or on its behalf in connection with this Agreement and of the Indonesian Documents or the Spanish Documents and the transactions contemplated hereby or thereby, including, without limiting the generality of the foregoing, fees and expenses of its own financial consultants, accountants and counsel. - -29- INDEMNITIES 14. FCX shall indemnify, defend and hold harmless RTZ against all liability, loss or damage, together with all reasonable costs and expenses related thereto (including legal and accounting fees and expenses), arising from the untruth, inaccuracy or breach of any of the representations, warranties, covenants or agreements made by FCX in this Agreement. RTZ shall indemnify, defend and hold harmless FCX against all liability, loss or damage, together with all reasonable costs and expenses related thereto (including legal and accounting fees and expenses), arising from the untruth, inaccuracy or breach of any of the representations, warranties, covenants or agreements made by RTZ in this Agreement. CONFIDENTIALITY AND PUBLIC STATEMENTS 15. (1) Except as otherwise provided in this Clause 15, the terms and conditions of this Agreement, and all data, reports, records and other information of any kind treated or defined as Confidential Information in any of the Transaction Agreements (such terms, conditions, data, reports, records and information being in this Clause 15 "Confidential Information") shall be treated by the parties as confidential and neither party shall reveal or otherwise disclose such Confidential Information to third parties without the prior written consent of the other party. The foregoing restrictions shall not apply to the disclosure of Confidential Information pursuant to applicable law, the PT-FI Contract of Work or the PT-IRJA Contract of Work, the rules and regulations administered by the Securities & Exchange Commission, the rules of London Stock Exchange or of any stock or securities exchange on which the shares or stock of either of the parties or any of its Affiliates may from time to time be listed or as permitted by the terms of any of the Transaction Agreements or to any Affiliate (other than CRA Limited and any of its subsidiaries unless and until CRA Limited becomes a subsidiary of RTZ), to any public or private financing agency or institution or to any third party to which either party contemplates the transfer, sale, encumbrance or other disposition of all or part of its interest in the Indonesian Operations or RTM's Spanish operations or in its subsidiaries having interests in the same provided that in any such case only such Confidential Information as such third party shall have a legitimate business need to know shall be disclosed, and the person or company to whom disclosure is made shall first undertake in writing to protect the confidential nature of such information at least to the same extent as the parties are obligated under this Clause 15. In addition, (a) the foregoing restrictions shall not apply to Confidential Information which otherwise comes into the public domain and (b) notwithstanding anything to the contrary in this Clause 15, each party is permitted to use and disclose data arising from any of the operations the subject of this Agreement or any of the Transaction Agreements in its annual audited financial statements and notes thereto. (2) Should either FCX or RTZ be required to disclose Confidential Information to any government and appropriate agencies and departments thereof, to the extent required by law, the rules of the Securities & Exchange Commission or the London Stock Exchange or otherwise in response to a legitimate request for such Confidential - -30- Information, the party so required shall immediately and prior to any disclosure notify the other party hereto of such requirement and the terms thereof prior to such submission. (3) Except as may be required by applicable law or any listing agreement with any national securities exchange or the rules of the London Stock Exchange or of any stock exchange on which the shares or stock of either of the parties or any of its Affiliates may from time to time be listed, neither party to this Agreement shall issue any press release or make any public announcement or public disclosure with regard to any of the operations the subject of this Agreement or any of the Transaction Agreements including Confidential and non-Confidential Information, unless either (i) a draft of the proposed press release has been provided to the other party hereto at least twenty-four hours prior to its proposed release in order to permit such party to comment thereon or (ii) such press release or other public statement contains factual information (or discussion or analysis of or comment based upon such factual information) previously provided to such party by the other party provided that neither will present projections or forward-looking information that is attributed to the other party or any of its Affiliates without the prior written consent of the other party. FURTHER ASSURANCES 16. Each party hereto shall do and perform or cause to be done and performed all further acts and things and shall execute and deliver all other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Indonesian Documents and the Spanish Documents and the consummation of the transactions contemplated hereby and thereby. FORCE MAJEURE 17. The obligations of the parties to this Agreement, other than the payment of money provided hereunder, shall be suspended and any period of time mentioned in this Agreement shall be extended to the extent and for the period that performance or the ability of one or both of the parties to exercise rights or carry out obligations or otherwise act as permitted by or in accordance with this Agreement is prevented by any cause, whether foreseeable or unforeseeable, beyond its reasonable control. The affected party shall promptly give notice to the other party of the suspension of performance, stating therein the nature of the suspension, the reasons therefor and the expected duration thereof and the affected party shall resume performance as soon as reasonably possible. GOVERNING LAW 18. This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to the principles of conflicts of law thereof. Each of FCX and RTZ hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction, except for the purposes of or proceedings regarding enforcement, which may - -31- take place in any relevant jurisdiction, of the courts of the State of New York located in the Borough of Manhattan and of the United States of America located in the Borough of Manhattan (the "New York Courts") for any litigation arising out of or relating to this Agreement, waives any objection to the laying of venue of any such litigation in the New York Courts and agrees not to plead or claim in any New York Court that such litigation brought therein has been brought in an inconvenient forum. SPECIFIC PERFORMANCE 19. The parties hereto agree that money damages or other remedy at law would not be sufficient or adequate remedy for any breach or violation of, or a default under, this Agreement by them and that in addition to all other remedies available to them, each of them shall be entitled to an injunction restraining such breach, violation or default or threatened breach, violation or default and to any other equitable relief, including without limitation specific performance, without bond or other security being required. NOTICES 20. All notices and other communications hereunder shall be in writing and, unless otherwise provided herein, shall be deemed to have been given when received by the party to whom such notice is to be given at its address set forth below, or such other address for the party as shall be specified by notice given pursuant hereto: (a) If to FCX, to it at: 1615 Poydras Street New Orleans LA 70112 USA Attention: General Counsel with a copy to: Davis Polk & Wardwell 450 Lexington Avenue New York NY 10017 USA Attention: E. Deane Leonard (b) If to RTZ, to it at: 6 St. James's Square London SW1Y 4LD England Attention: The Secretary with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York New York 10004-1980 USA - -32- Attention: Allen Isaacson with a copy to: Arthur Robinson & Hedderwicks Stock Exchange Centre 530 Collins Street Melbourne Australia Attention: Bruce Johnston BINDING EFFECT: ASSIGNMENT 21. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, legal representatives, successors and permitted assigns. Neither this Agreement nor any of the rights hereunder may be assigned by either FCX or RTZ without the consent of the other of them. AMENDMENT AND MODIFICATION 22. This Agreement may be amended, modified, supplemented or waived only by written agreement of the party against whom enforcement of such amendment, modification, supplement or waiver is sought. HEADINGS; REFERENCES; EXECUTION IN COUNTERPARTS; INTERPRETATION 23. All article, section, schedule, exhibit and paragraph references are to this Agreement, unless otherwise expressly provided. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and which together shall constitute one and the same instrument. ENTIRE AGREEMENT 24. This Agreement, the Schedules and Exhibits attached hereto constitute the entire agreement, and supersede all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof. SEVERABILITY 25. If part of this Agreement is, or is found to be, illegal, invalid or unenforceable under applicable law and either the Indonesian Closing has taken place or, notwithstanding such illegality, invalidity or unenforceability, the Indonesian Closing may still take place, then the remaining clauses of this Agreement shall continue in full force and effect. - -33- IN WITNESS whereof the parties have executed this Agreement the day and year first before written. - -34- SCHEDULE 1 PT-FI Participation Agreement See the document attached and marked "X". - -35- SCHEDULE 2 RTZ Loan Agreement See the document attached and marked "Y". - -36- SCHEDULE 3 Exceptions to Representations and Warranties of FCX 7(1)(c)(i) 1. PT-FI and PR-IRJA will require the approval of the Minister of Mines and Energy of the Government of the Republic of Indonesia in accordance with the provisions of Article 29 of their respective COWs prior to execution and delivery of the "Deed of Assignment of Interest in COW" in respect of such COWs. 2. Substantially all of PT-FI's assets have been pledged to the banks under the existing Chemical credit facilities. However, agreements in principle have been reached with the bank agent under the current corporate credit facilities (and FCX's and PT-FI's agents under new corporate credit facilities to be entered into after the "Spin-off") pursuant to which they have agreed to underwrite the existing and proposed new credit facilities, subject to (i) their consent to final terms of the PT-FI Participation Agreement, the RTZ Loan Agreement and all other documentation related thereto, (ii) their consent to the form and substance of the trust and intercreditor agreements related thereto, and (iii) the amendment of the current corporate credit facility documentation in conformity with the bank lenders' letters of consent. 3. For purposes of this schedule, consents will be required from the lenders under the Term Loan and Working Capital Agreement among Rio Tinto Metal, S.A., the lenders party thereto and Barclays Bank PLC as agent, and under related documents. 7(1)(c) (ii) None. 7(1)(c)(iii) None. 7(1)(c)(iv) None. 7(1)(c)(v) None, other than as created by the Transaction Agreements. 7(1)(d) - -37- 1. PT-FI and PT-IRJA will require the approval of the Minister of Mines and Energy of the Government of the Republic of Indonesia in accordance with the provisions of Article 29 of their respective COWs prior to execution and delivery of the "Deed of Assignment of Interest in COW" in respect of such COWs. 2. Governmental and/or regulatory consents may be needed in respect of the Spanish Documents, depending upon the structure of the transactions. 3. For bank consents, see 7(1)(c)(i) above. 7(1)(g) 1. The PT-FI shares owned by FCX will be pledged to the bank lenders under the corporate credit facility to be entered into after the "Spin-off" and under which FCX and PT-FI will be the borrowers and under the proposed new FM Properties Operating Company ("FMPO") credit facility as security for FCX's guarantee of a portion of FMPO's debt. Agreements in principle regarding the RTZ transaction have been executed as of April 27, 1995 with the agents for the lenders under the new proposed credit facilities pursuant to which such agents have agreed to underwrite the new credit facilities subject to: (i) approval of the final terms of the PT-FI Participation Agreement, the RTZ Loan Agreement and all documentation related thereto, (ii) consent to the form and substance of the trust and intercreditor agreements related thereto, and (iii) amendment of the current credit facilities in conformity with the bank lenders' letters of consent. 2. Pursuant to its guarantee of the 9% Senior Secured Notes of P.T. AlatieF Freeport Finance Company B.V. due 2001, FCX has pledged its PT-FI stock equally and ratably with the other secured parties. 3. Pursuant to a contemplated amendment to the Note Agreement dated as of June 11, 1992, as amended and restated, between FMPO and certain lenders (the Pel-Tex Note), FCX will guarantee a portion of the debt of FMPO under the Pel-Tex Note and will secure such guarantee by a pledge of the shares of PT-FI held by FCX. 4. Pursuant to a contemplated amendment to the Credit Agreement dated February 6, 1992 between Circle C Land Corp. and Texas Commerce Bank, as amended, FCX will guarantee a portion of the debt of Circle C Land Corp. under this Credit Agreement and will secure such guarantee by a pledge of the shares of PT-FI held by FCX. 5. Pursuant to that certain letter agreement dated July 1, 1976, the Government of the Republic of Indonesia has a pre- emptive right to purchase such proportion of any new shares issued by PT-FI as is necessary to maintain the same percentage ownership of all issued and outstanding PT-FI shares as it had immediately prior to the issuance of such new shares. - -38- 6. Pursuant to that certain letter agreement, dated November 11, 1993 between PT-FI and PT Indocopper Investama Corporation (PTIIC), PTIIC has a five-year option to purchase PT-FI shares from FCX under certain conditions should PTIIC wish to restore the 10% ownership of PT-FI it had prior to the issuance in December, 1993 and January, 1994 of new PT-FI shares to FCX. 7. The Articles of Association of PT-IRJA provide pre-emptive rights for each shareholder to purchase such proportion of any new share issued by PT-IRJA as is necessary to maintain the same percentage ownership of all issued and outstanding PT-IRJA shares as it had immediately prior to the issuance of such new shares. - -39- SCHEDULE 4 Exceptions to Representations and Warranties of RTZ 1. Indonesia (a) 7(2)(a), 7(2)(c)(ii), 7(2)(d) and 7(2)(f) The following approvals and other actions are required for the due formation of each of PT-RTZ and PT-RTZ2 and to enable each of them to execute, deliver and perform its obligations under the Transaction Agreements to which it is to be party, to consummate the transactions contemplated thereby and to carry on its business in compliance with applicable laws: (i) the approval and recommendation of the Minister of Mines and Energy of the Republic of Indonesia to the investments proposed to be made by it pursuant to the Transaction Agreements; (ii) the approval and recommendation of the Capital Investment Board of the Republic of Indonesia to the investments proposed to be made by it pursuant to the Transaction Agreements; (iii) the grant of an investment licence pursuant to the Foreign Capital Investment Law of the Republic of Indonesia (No 1 of 1967) as amended); (iv) the approval to the Articles of Association of that company (as contained in its Deed of Establishment) of the Minister of Justice of the Republic of Indonesia, the registration of that Deed of Establishment at the District Court of the company's domicile and the publication of those Articles of Association in the State Gazette of the Republic of Indonesia. (b) 7(2)(c)(ii), 7(2)(d) and 7(2)(f) The following further approvals and other actions are required in order that each of PT-RTZ and PT-RTZ2 may execute, deliver and perform its obligations under the Transaction Agreements to which it is party, to consummate the transactions contemplated thereby and to carry on its business in compliance with applicable laws: (i) the issue of a tax registration number in accordance with the Income Tax Law (1983); (ii) the issue of certain operating and business licences under applicable regulations; - -40- (iii) the approval of Bank Indonesia to borrowings undertaken by it for these purposes; (iv) the prior approval of the Minister of Mines and Energy of the Republic of Indonesia in accordance with the provisions of the PT- FI Contract of Work and the PT-IRJA Contract of Work to the execution and delivery of the Assignment of Interest in the Contract of Work in relation thereto; (v) (in relation to the RTZ Loan) the approval (if required) of the Co-ordinating Team for Management of Offshore Commercial Loans under Presidential Decree No 39 of 1991 and of Bank Indonesia in accordance with the Foreign Capital Investment Law (No 1 of 1967) as amended of the Republic of Indonesia. (c) 7(2)(d) and 7(2)(f) If RTZ is to participate in the PT-IRJA Agreements by way of a shareholding in PT-IRJA, particulars of that shareholding must be reported to the Capital Investment Board of the Republic of Indonesia and, in accordance with applicable policy, the prior approval of the Minister of Mines and Energy is required. 2. Spain Governmental and/or regulatory consents may be needed in respect of the Spanish Documents, depending upon the structure of the transactions. - -41- SCHEDULE 5 Lenders and Other Creditors whose consent/release is required 1. Under the Amended and Restated Credit Agreement dated as of June 1, 1993 among FTX, FRP, the Banks party thereto and Chemical Bank as Agent; the Credit Agreement dated as of October 27, 1989, as amended and restated as of June 1, 1993 among PT-FI, FTX, FCX, the Banks party thereto, First Trust, National Association, as trustee, and Chemical Bank, as Agent; the Credit Agreement dated as of June 11, 1992, as amended, among FMPO, FTX, the Banks party thereto and Chemical Bank as Agent and Collateral Agent for the Banks, substantially all or PT-FI's assets have been pledged to the bank group. However, agreements in principle regarding the RTZ transaction have been executed as of April 27, 1995 with Chemical Bank, as Agent for the existing and proposed new credit facilities, and Chase Manhattan Bank (National Association), as the Agent for the proposed credit facilities, pursuant to which such Agents have agreed to underwrite such agreement in principle. 2. PT-FI's current bank lenders under its corporate credit facility (and FCX's and PT-FI's lenders under new corporate credit facilities to be entered into after the "Spin-off") have reserved the right (i) to consent to the PT-FI Participation Agreement, the RTZ Loan Agreement and all other documentation related thereto, (ii) to consent to the form and substance of the trust and intercreditor agreements related thereto, (iii) to obtain a security interest in FCX's and PT-FI's interests in the PT-FI Participation Agreement, the RTZ Loan Agreement and all other documentation related thereto, and (iv) to approve the amendment of the current PT-FI corporate credit facility documentation in conformity with the bank lenders' letters of consent. 3. Such other lenders, creditors and other third parties whose contracts with PT-FI and/or FCX prohibit or restrict: (a) the execution and delivery by PT-FI of the PT-FI Participation Agreement and the consummation of the transactions contemplated thereby, including without limitation, (i) the execution and delivery of the Assignment of an Interest in the Contract of Work, (ii) the formation of the Participation, (iii) all Joint Account Assets being held by the Operator in the name of PT-FI but being and remaining the property of PT-FI and PT-RTZ severally in proportion to their respective Participating Interests, (iv) the making available to the Participation, of, among other things, the interest of PT-FI in the PT-FI Contract of Work, PT-FI's share of the Joint Account Assets and the PT-FI Available Assets and (v) the allocation by PT-FI of rights in relation to Incremental Expansion Cashflow; (b) the Disposal by PT-FI, on an unencumbered basis, of any present or future property or assets or any interests in them; - -42- (c) the granting by PT-FI of Encumbrances over any of its property or assets, in particular, on a first priority basis. - -43- FREEPORT-McMoRan COPPER & GOLD INC. By /s/ George A. Mealey Name: George A. Mealey Title: President THE RTZ CORPORATION PLC By /s/ R. Adams Name: Robert Adams Title: Director - 46 - EX-99 10 PARTICIPATION AGREEMENT Dated 1995 (1) P.T. FREEPORT INDONESIA COMPANY (2) [PT-RTZ] PARTICIPATION AGREEMENT with respect to the Contract Area The RTZ Corporation PLC Legal Department 6 St James's Square London SW1Y 4LD Tele: 0171 930 2399 TABLE OF CONTENTS Page No. CLAUSE 1 DEFINITIONS..........................................1 1.2 Interpretation................................10 1.3 Headings......................................10 CLAUSE 2 PURPOSES AND TERM...................................10 2.1 General.......................................10 2.2 Purposes......................................11 2.3 Assignment of COW.............................11 2.4 Term..........................................11 2.5 Termination...................................12 CLAUSE 3 RELATIONSHIP OF THE PARTICIPANTS....................13 3.1 Contribution of Use of Assets.................13 3.2 Obligations Several and Not Joint.............13 3.3 Not a Partnership.............................13 3.4 No Authority to Act for other Participants....13 3.5 No Joint Receipt of Income....................14 3.6 Area of Mutual Interest.......................14 3.7 Other Business Opportunities..................15 3.8 Waiver of Right to Partition..................15 3.9 Employees.....................................15 3.10 Title.........................................15 CLAUSE 4 REPRESENTATIONS AND WARRANTIES......................16 4.1 Capacity......................................16 4.2 PT-FI Representations and Warranties..........16 4.3 Disclosures...................................18 CLAUSE 5 EXPLORATION CONTRIBUTIONS BY PARTICIPANTS...........18 5.1 Exploration Contribution by P.T.-RTZ..........18 5.2 Additional Cash Contributions.................18 CLAUSE 6 INTERESTS OF PARTICIPANTS...........................19 6.1 Participating Interests.......................19 6.2 Changes in Participating Interests............19 6.3 Default in Making Contributions...............20 6.4 Continuing Liabilities upon Adjustment of the Participating Interests.......................24 CLAUSE 7 COVENANTS AND RIGHTS................................25 7.1 Mutual Covenants..............................25 7.2 PT-FI Covenants...............................25 7.3 P.T.-RTZ Covenant.............................27 7.4 Power of Attorney.............................27 7.5 Retained PT-FI Rights.........................28 CLAUSE 8 COMMITTEES..........................................29 8.1 Exploration Committee.........................29 8.2 Operating Committee...........................30 8.3 Other Committees..............................30 8.4 Quorum........................................31 8.5 Decisions.....................................31 8.6 Meetings......................................31 8.7 Action without Meeting........................32 8.8 Close-down....................................32 CLAUSE 9 OPERATOR............................................33 9.1 Appointment...................................33 9.2 Powers and Duties of Operator.................33 9.3 No Fee........................................37 9.4 Standard of Care..............................37 9.5 Resignation; Deemed Offer to Resign...........37 9.6 Transactions with Affiliates..................39 CLAUSE 10 FEASIBILITY STUDY INTO EXPANSION....................39 CLAUSE 11 GREENFIELD PROJECTS AND LATER EXPANSION PROJECTS....41 CLAUSE 12 SOLE RISK...........................................42 CLAUSE 13 PROGRAMMES AND BUDGETS..............................44 CLAUSE 14 TAXATION IN INDONESIA...............................44 CLAUSE 15 TRANSFER OF PARTICIPATING INTERESTS.................45 15.1 General.......................................45 15.2 Limitations on Free Transferability...........45 15.3 First Offer Right.............................46 15.4 Exceptions to First Offer Right...............46 CLAUSE 16 GENERAL PROVISIONS....................................47 16.1 Notices.......................................47 16.2 Waiver........................................47 16.3 Modification..................................47 16.4 Force Majeure.................................48 16.5 Governing Law.................................49 16.6 Penalties.....................................50 16.7 Rule Against Perpetuities.....................50 16.8 Further Assurances............................50 16.9 Confidentiality and Public Statements.........51 16.10 Entire Agreement; Successors and Assigns......52 16.11 Severability..................................52 16.12 Indonesian Law Waiver.........................52 16.13 Tax Covenant..................................52 Schedule 1 Privatisation Agreements............................54 Schedule 2 Deed of Assignment of Interest in COW...............57 Schedule 3 Exceptions to Representations and Warranties........60 Annex A Product Schedule....................................62 Annex B Financial and Accounting Procedures.................63 - - 1 - THIS AGREEMENT is made 1995 BETWEEN: (1) P.T. FREEPORT INDONESIA COMPANY, a limited liability company organised under the laws of the Republic of Indonesia and domesticated in the State of Delaware, U.S.A. ("PT-FI") and (2) [P.T.-RTZ], a limited liability company organised under the laws of the Republic of Indonesia ("P.T.-RTZ") WHEREAS (A) By a Contract of Work dated 30 December 1991 made between The Government of the Republic of Indonesia (the "Government") and PT-FI, the Government appointed PT-FI as the sole contractor for the Government with respect to the Contract Area, as defined in the Contract of Work, with the sole rights to explore, mine, process, store, transport, market, sell, and dispose of Products, as defined below, in the Contract Area (defined as aforesaid) (B) PT-FI desires P.T.-RTZ and P.T.-RTZ desires to participate in operations under the COW (as defined below) on the terms and conditions hereinafter appearing IT IS HEREBY AGREED as follows: 1. DEFINITIONS 1.1 In this Agreement (including the Schedules and Annexes hereto), unless the context otherwise requires, the following terms shall have the following meanings: 1.1.1 "Affiliate" or "Affiliates" means any person, company, partnership, joint venture, or other form of enterprise which directly or indirectly controls, or is controlled by or is under common control with, a Participant. The term "control" as used herein means possession, directly or indirectly, of the power to direct or cause direction of management and policies through ownership of voting securities, contract, voting trust or otherwise; 1.1.2 "Agreement" means this Participation Agreement, including all amendments and modifications thereof, and all schedules and annexes hereto, which are incorporated herein by this reference; - - 2 - 1.1.3 "Annual Budget Meeting" means the meeting defined in Clause 8.6; 1.1.4 "Approved Expansion Project" means any project of Expansion in Contract Area Block A which has been approved by the boards of directors of PT-FI, FCX and P.T.-RTZ or is otherwise an Approved Expansion Project in accordance with Clause 10.3; 1.1.5 "Approved Programme and Budget" means a Programme and Budget which has been approved by the boards of directors of PT- FI and P.T.-RTZ upon the recommendation of the relevant Exploration Committee or the Operating Committee, as appropriate, as provided in Clause 8.5 and paragraph 10.1 of the Financial and Accounting Procedures; 1.1.6 "Area of Mutual Interest" has the meaning assigned to that expression in Clause 3.6; 1.1.7 "Assignment" means the assignment referred to in Clause 2.3; 1.1.8 "board of directors" of PT-FI or P.T.-RTZ shall mean the respective board of directors and/or board of commissioners (if any) of such entity, whichever is the appropriate body (whether pursuant to its constitutional documents or law) for the decision or action in question; 1.1.9 "Budget" means a detailed estimate of all costs to be incurred by the Participants with respect to a Programme and an estimated schedule of cash calls to be made therefor; 1.1.10 "Budgetary Period" means the budgetary period established in a Programme and Budget; 1.1.11 "Chargeable Operations" has the meaning assigned to that expression in the Financial and Accounting Procedures; 1.1.12 "Close-down" means a decision by the boards of directors of PT-FI, FCX and P.T.-RTZ, upon the recommendation of the Operating Committee, to cease all Mining and Processing in the Contract Area; - - 3 - 1.1.13 "Committee" means whichever committee during the applicable time (be that the Exploration Committee in respect of either Contract Area Block A or Contract Area Block B or the Operating Committee or a committee established pursuant to Clause 8.3) is responsible for the subject matter under this Agreement as provided in Clause 8; 1.1.14 "Confidential Information" means the confidential information referred to in Clause 16.9; 1.1.15 "Contract Area" means the area defined as such under the COW; 1.1.16 "Contract Area Block" means, as appropriate or as the context requires, either Contract Area Block A or Contract Area Block B; 1.1.17 "Contract Area Block A" has the meaning assigned to that expression in the COW; 1.1.18 "Contract Area Block B" has the meaning assigned to that expression in the COW; 1.1.19 "Cover Payment" means the payment described in Clause 6.3.2; 1.1.20 "COW" means the Contract of Work referred to in Recital (A) of this Agreement and includes any other contract of work, whenever granted, for the conduct of Exploration, Development or Mining in all or any part of the Contract Area; 1.1.21 "Cut-off Date" means the last day of the final Year covered in the Product Schedule, as the same may be extended pursuant to Clause 16.4.2; 1.1.22 "Defaulting Participant" means the Participant referred to in Clause 6.3; 1.1.23 "Development" has the meaning assigned to that expression in the Financial and Accounting Procedures; 1.1.24 "Dispose" means, in relation to any relevant property, to sell, transfer, assign, declare oneself a trustee of or part with the - - 4 - use or benefit of or otherwise deal with the relevant property (or any interest therein); 1.1.25 "dollar" or "$" means a dollar being the lawful currency of the United States of America; 1.1.26 "Effective Date" means the date of this Agreement; 1.1.27 "Encumbrance" means any mortgage, pledge, lien, charge, power of attorney, assignment for the purpose of providing security, hypothecation, security interest or trust arrangement for the purpose of providing security and any other security agreement or arrangement; 1.1.28 "Enterprise Operations" means all operations within the Contract Area under the COW by or on behalf of PT-FI or by or on behalf of PT-FI and P.T.-RTZ, including the Mining of the 10-K Reserves and Joint Operations, but excluding Sole Risk Ventures; 1.1.29 "Expansion" means a Development which is designed to increase the productive capacity of existing facilities (whether comprising PT-FI Available Assets or Joint Account Assets and whether Mining, milling and delivery facilities and related infrastructure) for the obtaining of Products from the aggregate resources in Contract Area Block A (being both the 10-K Reserves and reserves other than the 10-K Reserves) at an aggregate rate in excess of the then existing production capacity of such facility; 1.1.30 "Exploration" has the meaning assigned to that expression in the Financial and Accounting Procedures; 1.1.31 "Exploration Committee" means a committee established under Clause 8.1; 1.1.32 "Exploration Costs" has the meaning assigned to that expression in the Financial and Accounting Procedures; 1.1.33 "Exploration Obligation" has the meaning assigned to that expression in the Implementation Agreement; 1.1.34 "FCX" means Freeport-McMoRan Copper & Gold Inc., a Delaware corporation; - - 5 - 1.1.35 "Feasibility Study" means a report showing the economic viability of a proposed Development project, which may relate to Expansion, and shall include (i) reasonable assessment of the size and quality of the minable reserves of Minerals, (ii) reasonable assessments of the amenability of the Minerals to metallurgical treatment, (iii) reasonable description of the work, equipment, supplies and permitting, if any, required to bring the prospective deposit of Minerals into commercial production and the estimated costs thereof, (iv) conclusions regarding the economic viability of bringing the prospective deposit of Minerals into commercial production, (v) an analysis of the impact which such project will have on the existing Enterprise Operations and Sole Risk Programmes and (vi) such other information as may be appropriate to allow banking and other financial institutions familiar with the mining business to make a firm decision whether or not to advance funds sufficient to finance the Expansion in whole or in part; 1.1.36 "Financial and Accounting Procedures" means the document so entitled, in the form attached to this Agreement as Annex B; 1.1.37 "Government" means the Government of the Republic of Indonesia; 1.1.38 "Greenfield Project" means a Development project which does not rely to any significant extent on PT-FI Available Assets, the 10-K Reserves or the Joint Account Assets constituting part of any prior approved project; 1.1.39 "Implementation Agreement" means the agreement so designated between FCX and RTZ dated as of 2 May 1995; 1.1.40 "Incremental Expansion Cashflow" has the meaning assigned to that expression in the Financial and Accounting Procedures; 1.1.41 "Incremental Expansion Revenues" has the meaning assigned to that expression in the Financial and Accounting Procedures; 1.1.42 "Incremental Production" has the meaning assigned to that expression in the Financial and Accounting Procedures; - - 6 - 1.1.43 "Joint Account Assets" means all Products (in whatever form) derived from Joint Operations prior to their being sold and all other real and personal property, tangible and intangible, held by or for the benefit of the Participants for the purposes of Joint Operations, but excluding the PT-FI Assets and the P.T.- RTZ Assets; 1.1.44 "Joint Operations" means the conduct of the following activities: (i) Approved Expansion Projects; (ii) Exploration in the Contract Area; (iii) Development and Mining in Contract Area Block B and, after the Cut-off Date, if there has, before such Date, been a first Approved Expansion Project, also in Contract Area Block A and (iv) any other activities in or in relation to the Contract Area which the Participants agree to conduct under the terms of this Agreement, including Joint Operations Greenfield Projects, but excluding Sole Risk Ventures; 1.1.45 "Liabilities" or "Liability" means any and all claims, demands, investigations, judgements, losses, liabilities, costs and expenses, including reasonable attorneys' fees; 1.1.46 "LIBOR" means a rate of interest which is equal to three month U.S dollar Libor as published in the London Financial Times; 1.1.47 "Memorandum Equity Account" means an account established for each Participant pursuant to paragraph 2 of the Financial and Accounting Procedures; 1.1.48 "Minerals" has the meaning assigned to that expression in the COW; 1.1.49 "Mining" means the mining, extracting, producing, handling, milling or other processing of Minerals and the marketing and selling of Products therefrom; - - 7 - 1.1.50 "Non-defaulting Participant" means a Participant which is not the Defaulting Participant as described in Clause 6.3; 1.1.51 "Operating Committee" means the committee established under Clause 8.2; 1.1.52 "Operator" means the person or entity appointed under Clause 9.1 or any successor Operator; 1.1.53 "Participation" means the business arrangement of the Participants under this Agreement; 1.1.54 "Participant(s)" means any person(s) or entity(ies) that from time to time have Participating Interests; 1.1.55 "Participating Interest" means, at any time, with respect to Contract Area Block A or Contract Area Block B, the percentage interest then applicable to each Participant with respect to such Contract Area Block determined in accordance with this Agreement (including the Financial and Accounting Procedures), provided that, if such expression is used with reference to assets, it shall refer to an interest in the Joint Account Assets and Joint Operations; 1.1.56 "Privatisation Agreements" means the agreements listed in Schedule 1 to this Agreement; 1.1.57 "Processing" has the meaning assigned to that expression in the COW; 1.1.58 "Product Schedule" means the Product Schedule annexed hereto as Annex A, setting out the planned production of Products for each Year from 1995 to 2021 as the same may be amended pursuant to Clause 16.4.2; 1.1.59 "Products" has the meaning assigned to that expression in the COW; 1.1.60 "Programme" means a description in reasonable detail of Joint Operations or Sole Risk Ventures, as appropriate, to be conducted for a Year or any longer period, which is prepared and approved in accordance with paragraph 10.1 of the Financial and Accounting Procedures; - - 8 - 1.1.61 "Proposing Participant" means the Participant referred to in Clause 10.1; 1.1.62 "PT-FI Assets" means together (i) the PT-FI Available Assets (ii) the right, title and interest of PT- FI in and under the COW and all authorisations issued pursuant to the COW and (iii) all other real and personal assets, tangible and intangible, of PT-FI, including without limitation, cash, accounts receivable, inventories and capital stock and indebtedness of other corporations, including its interests in the Gresik smelter and any assets in respect of Sole Risk Ventures of PT-FI, but excluding all Joint Account Assets or interests therein; 1.1.63 "PT-FI Available Assets" means together (i) all real and personal property, tangible and intangible, held by PT- FI from time to time which are used or intended to be used for Exploration, Development or Mining in the Contract Area, including, without limitation, mills and infrastructure (ii) the right, title and interest of PT- FI in and to the Privatisation Agreements and (iii) except for the purpose of the Financial and Accounting Procedures, capital replacements hereafter of physical property subject to Privatisation Agreements or constituting PT-FI Available Assets, but excluding those items specified in paragraph (iii) of the definition of "PT-FI Assets" and excluding all Joint Account Assets, assets relating to Sole RiskVentures or interests therein; 1.1.64 "P.T.-RTZ Assets" means together - - 9 - (i) the interest of P.T.-RTZ in and under the COW pursuant to the Assignment (ii) any assets in respect of Sole Risk Ventures of P.T.-RTZ and (iii) all other real and personal assets, tangible and intangible, of P.T.-RTZ, but excluding all Joint Account Assets or interests therein; 1.1.65 "RTZ" means The RTZ Corporation PLC, an English company; 1.1.66 "RTZ Loan" has the meaning assigned to the expression "Loan" in the RTZ Loan Agreement; 1.1.67 "RTZ Loan Agreement" means the facility agreement [of even date herewith] between PT-FI and [RTZ UK company] whereby [RTZ UK company] agrees to make available to PT-FI a facility of up to $450,000,000 to fund one or more Approved Expansion Projects; 1.1.68 "Sales Revenues" has the meaning assigned to that expression in the Financial and Accounting Procedures; 1.1.69 "Sharing Commencement Date" has the meaning assigned to that expression in the Financial and Accounting Procedures; 1.1.70 "Sole Risk Programme" has the meaning assigned to it in Clause 10.3; 1.1.71 "Sole Risk Venture" means any activity carried out by a Participant in the Contract Area on its own account pursuant to Clauses 10 and 12; 1.1.72 "Specified Area" means the area referred to as such in Clause 10.1; 1.1.73 "subsidiary" has the meaning assigned to it in the Implementation Agreement; 1.1.74 "Taxes" means all present and future income and other taxes, levies, imposts, duties, charges, deductions and withholdings - - 10 - whatsoever together with interest thereon and penalties with respect thereto; 1.1.75 "10-K Reserves" means the proved and probable ore reserves as at 31 December 1994 in Contract Area Block A being 1,125.6 million tonnes at an average grade of 1.30% copper, 1.42 grams of gold per tonne and 4.06 grams of silver per tonne; 1.1.76 "Trust Agreement" means [Insert here description of Trust Agreement after it has been negotiated and agreed. It will be the Trust Agreement scheduled to the RTZ Loan Agreement and which provides the various matters described in Exhibit A to the Implementation Agreement.]; 1.1.77 "Year" means a calendar year commencing on 1 January. 1.2 Interpretation In this Agreement 1.2.1 References to any document or agreement, including the COW, includes such document or agreement as amended, novated, substituted, varied, supplemented or replaced from time to time. 1.2.2 References to any Act of Parliament, code, decree, regulation or ordinance or to any provision thereof include any modification or re-enactment thereof or any provision substituted therefor and all statutory or other instruments issued thereunder. 1.2.3 References to a party to this Agreement or any other document or agreement include such party's successors or permitted assigns. 1.3 Headings Headings to Clauses, sub-clauses, Schedules or Annexes are for convenience only and shall not affect the interpretation of this Agreement. 2. PURPOSES AND TERM 2.1 General PT-FI and P.T.-RTZ hereby agree that all of their rights and obligations as between themselves relating to Joint Operations, Sole Risk Ventures and other operations within the Contract Area shall be subject to and governed by this Agreement. - - 11 - 2.2 Purposes This Agreement is entered into for the following purposes and for no others, and shall serve as the exclusive means by which the Participants, or either of them, accomplish such purposes: 2.2.1 to conduct Exploration within the Contract Area, including the evaluation of Development or Mining opportunities within the Contract Area; 2.2.2 to engage in Development and Mining within the Contract Area if so decided in the manner provided in this Agreement; 2.2.3 to engage in the Disposal of Products derived from Joint Operations; 2.2.4 to allocate costs of and revenues derived from Joint Operations; 2.2.5 to regulate as between the parties the conduct of Joint Operations and Sole Risk Ventures in the Contract Area; 2.2.6 to regulate as between the parties to the extent provided herein the conduct by PT- FI of its activities in the Contract Area, other than in respect of Joint Operations, using the PT-FI Available Assets and PT- FI's right, title and interest in and under the COW and all authorisations issued pursuant to the COW; 2.2.7 to regulate the procedures for making a Close-down decision and for implementing that decision; and 2.2.8 to perform any other operation or activity necessary, appropriate or incidental to any of the foregoing. 2.3 Assignment of COW Simultaneously with signature of this Agreement, PT-FI and P.T.-RTZ shall execute an assignment of interests in the COW in the form set out in Schedule 2 to this Agreement or in such other form as P.T.-RTZ may reasonably require provided that such interests shall be reassigned by P.T.-RTZ to PT-FI in the circumstances provided for in Clause 6(2) of the Implementation Agreement. 2.4 Term The term of this Agreement shall commence on the Effective Date and shall continue until the occurrence of any of the following events: - - 12 - 2.4.1 the termination of the COW and the termination of all rights of the Participants to conduct Exploration, Development and Mining in the Contract Area and completion of a final accounting between the Participants as provided in Clause 2.5.2; or 2.4.2 the agreement by the Participants permanently to cease Joint Operations and terminate this Agreement and completion of a final accounting between the Participants as provided in Clause 2.5.2; or 2.4.3 the reduction of the Participating Interest of one of the Participants in both Contract Area Block A and Contract Area Block B to zero (including a reduction pursuant to the operation of the proviso to Clause 2.3); or 2.4.4 the Disposal of all Joint Account Assets and the completion of a final accounting between the Participants as provided in Clause 2.5.2; or 2.4.5 the bankruptcy, dissolution or withdrawal of any Participant, unless all of the remaining Participants agree to continue this Agreement, and completion of a final accounting between the Participants as provided in Clause 2.5.2. 2.5 Termination Upon expiry of the term of this Agreement: 2.5.1 all unpaid Liabilities properly incurred arising out of Joint Operations during the term of this Agreement shall be paid by the Participants as provided in this Agreement 2.5.2 the Operator shall take all action necessary to wind up the activities of the Participation, and all costs and expenses incurred in connection with the termination of the Participation shall be expenses chargeable to the Participants. Where the term of this Agreement expires pursuant to Clauses 2.4.1, 2.4.2, 2.4.4 or 2.4.5, the Joint Account Assets shall be paid, applied, or distributed in satisfaction of all Liabilities of the Participation arising out of Joint Operations to third parties. Thereafter, all other Joint Account Assets shall be sold and the proceeds, together with any remaining cash, shall be distributed to the Participants in proportion to their Participating Interests in Contract Area Block A or, as appropriate, Contract Area Block B at the time of such distribution, subject as provided in Clause 6.1 or the Financial and Accounting Procedures, after first satisfying out of a Participant's share any Liabilities owed by that Participant to the other - - 13 - 2.5.3 the Participants shall enter into such other agreements and arrangements as may be necessary or appropriate in the circumstances to regulate the conduct of any Sole Risk Ventures in the Contract Area which are to continue after expiry of the term of this Agreement. 3. RELATIONSHIP OF THE PARTICIPANTS 3.1 Contribution of Use of Assets 3.1.1 PT-FI agrees to make available in accordance with the terms of this Agreement the PT-FI Available Assets for the purposes of Enterprise Operations without charge to the Participants except as otherwise provided in this Agreement. 3.1.2 PT-FI and P.T.-RTZ agree that their respective rights under the COW will be made available to the Participants without charge for the purposes of Joint Operations. 3.2 Obligations Several and Not Joint The liability of the Participants shall be several and not joint nor joint and several. Each Participant shall be liable to the other only for its obligations as set out in this Agreement. 3.3 Not a Partnership Nothing contained in this Agreement shall be deemed to constitute either Participant the partner of the other, nor, except as otherwise herein expressly provided, to constitute either Participant the agent or legal representative of the other or to create any fiduciary relationship between them. 3.4 No Authority to Act for other Participants No Participant shall have any authority to act for or to assume any obligation or responsibility on behalf of the other Participant, except as otherwise expressly provided herein. Each Participant shall indemnify, defend and hold harmless the other Participant and its Affiliates (including, without limitation, direct and indirect parent companies), and its or their respective directors, commissioners, officers, shareholders, employees, agents and attorneys, from and against any Liabilities which may be imposed upon, asserted against or incurred by any of them and which arise out of or result from any act of or any assumption of Liability by the indemnifying Participant, or any of its directors, commissioners, officers, shareholders, employees, agents, attorneys and Affiliates, done or undertaken, or apparently done or undertaken, on behalf of the other Participant, except pursuant to the authority expressly granted herein or as otherwise agreed in writing between the Participants. - - 14 - 3.5 No Joint Receipt of Income The Participants acknowledge that it is not their intention to receive income jointly as a result of the Participation. 3.6 Area of Mutual Interest 3.6.1 General Any exploration permit, contract of work, mineral lease, right or interest, including an equity interest or option to acquire an equity interest in an entity owning any of the foregoing, including rights and interests which do not directly involve Mining but which may be useful in connection with the Joint Operations (collectively, "Mining Rights") acquired during the term of this Agreement by or on behalf of a Participant or an Affiliate (other than, in the case of P.T.-RTZ, and for so long as CRA Limited is not a subsidiary of RTZ, CRA Limited and its subsidiaries) of a Participant (the "Acquirer") which is situated in the province of Irian Jaya, Indonesia (the "Area of Mutual Interest") shall be subject to the terms and provisions of this Clause 3.6, except Mining Rights acquired pursuant to an Approved Programme and Budget or Sole Risk Ventures. 3.6.2 Notice Within 30 days after acquisition of Mining Rights or the right to acquire any Mining Rights wholly or partially within the Area of Mutual Interest, the Participant being the Affiliate of the Acquirer ("Acquirer's Participant") shall notify the other Participant of such acquisition. The Acquirer's Participant's notice shall describe in detail the acquisition, the Mining Rights covered thereby and the cost thereof and the Acquirer's Participant shall procure that there is made available for inspection by the other Participant any and all such information concerning the Mining Rights. 3.6.3 Option Exercised Within 30 days after receiving the Acquirer's Participant's notice, the other Participant shall elect, by notice to the Acquiring Participant, that an Affiliate of such other Participant shall: (a) accept an interest in the Mining Rights equal to the other Participant's Participating Interest at the date of this Agreement; or (b) not to acquire an interest in the Mining Rights. If a Participant entitled to make an election under this Clause 3.6.3 fails to give notice within the time allotted, such failure shall be deemed an election by such Participant not to accept an interest in - - 15 - the Mining Rights and the Mining Rights shall not be subject to the same terms, mutatis mutandis, as this Agreement. If a Participant entitled to make an election under this Clause 3.6.3 makes a timely election to accept an interest in the Mining Rights, the Acquirer's Participant shall procure that the Acquirer shall, subject to all necessary Governmental consents, convey to an Affiliate of the other Participant nominated by the other Participant, by appropriate instrument, an undivided interest in the Mining Rights equal to such Participant's Participating Interest at the date of this Agreement. If such Participant has elected that an Affiliate shall accept an interest in Mining Rights pursuant to this Clause 3.6.3, the Mining Rights shall be held on the same terms as this Agreement, mutatis mutandis to those with respect to Contract Area Block B, unless the Participants agree otherwise. The Participant which is not the Acquirer's Participant shall procure that its Affiliate acquiring the interest in the Mining Rights shall promptly pay to the Acquirer its proportionate share of the latter's actual out-of-pocket acquisition costs. 3.7 Other Business Opportunities Except as expressly provided in Clause 3.6, each Participant shall have the right independently to engage in and receive full benefits from business activities outside the Contract Area, whether or not in competition with the Enterprise Operations, without consulting the other. Except as expressly provided in Clause 3.6, no Participant shall have any obligation to the other under this Agreement with respect to any opportunity to acquire any property outside the Contract Area at any time, or within the Contract Area after the termination of this Agreement. Except as otherwise agreed by the Participants, whether in this Agreement or subsequently, neither Participant shall conduct any activity inside the Contract Area other than Enterprise Operations, Sole Risk Ventures and activities which do not adversely affect the carrying out of the Enterprise Operations and any Sole Risk Ventures, without the prior written approval of the other. 3.8 Waiver of Right to Partition The Participants hereby waive and release all rights of partition, or of sale in lieu thereof, or other division of Joint Account Assets, including any rights provided by law. 3.9 Employees Employees of one Participant are not and shall not be employees of the other Participant or of the Participation. 3.10 Title All Joint Account Assets acquired by the Operator for Joint Operations may be held in the name of PT-FI but, subject to any mandatory provisions of applicable law, the beneficial interest therein shall be for the - - 16 - benefit of PT-FI and P.T.-RTZ severally in proportion to their respective Participating Interests. Subject to any mandatory provisions of applicable law, each of the Participants agrees to execute appropriate documents to reflect any changes in Participating Interests which may occur hereunder from time to time and to execute, and register with the appropriate Governmental authorities, the necessary document(s) to effect the transfer of any property as contemplated by this Agreement. 4. REPRESENTATIONS AND WARRANTIES 4.1 Capacity Each of the parties represents, warrants and undertakes to the other(s) as follows: 4.1.1 it is a company duly incorporated and in good standing in its place of incorporation and that it is qualified to do business and is in good standing in those jurisdictions where necessary in order to carry out the purposes of this Agreement; 4.1.2 it has the capacity to enter into and perform its obligations under this Agreement and, in the case of PT-FI, the Assignment and all transactions contemplated herein or (as appropriate) therein and that all corporate and, except as mentioned in Schedule 3 to this Agreement, other actions required to authorise it to enter into and perform its obligations under this Agreement and, in the case of PT-FI, the Assignment have been properly and duly taken; 4.1.3 this Agreement constitutes, and, in the case of PT-FI, the Assignment will constitute its legal, valid and binding obligation, save as enforcement may be limited by bankruptcy, reorganisation, insolvency, moratorium or other laws affecting the enforcement of creditors' rights generally and subject to any limitations acts and to general equitable principles; 4.1.4 the execution, delivery and performance by it or any other party to this Agreement of this Agreement and, in the case of PT-FI, the Assignment and the transactions implemented hereunder or (as appropriate) thereunder do not and will not contravene, conflict with or constitute a default under (a) any law or regulation or any official or judicial order, judgment, injunction or decree applicable to it or (b) its constitutional documents or (c) any agreement or document to which it is a party or which is binding upon it or any of its assets. 4.2 PT-FI Representations and Warranties Subject to the matters stated in Schedule 3 and in addition to the representations, warranties and - - 17 - undertakings contained in Clause 4.1, PT-FI represents, warrants and undertakes to P.T.-RTZ as follows: 4.2.1 the shareholders in PT-FI are FCX, as to 81.28%, the Government as to 9.36% and PT Indocopper Investama Corporation as to 9.36%; 4.2.2 it has all authorisations, consents and licences necessary to conduct its activities in the Contract Area as presently conducted; 4.2.3 it is up to date on all payments, filings, or other requirements in respect of the COW and there are no existing or threatened actions, suits, claims or proceedings in relation thereto, and PT-FI has not received any notice of violation or claim alleging any violation of any law, rule, regulation, or permit, including without limitation any environmental law, rule, regulation or permit, in connection with the COW except any thereof where such violation or claim would not, individually or in the aggregate, have a material adverse effect on the rights of PT-FI and P.T.-RTZ under the COW; 4.2.4 it has delivered to or made available to P.T.- RTZ or its Affiliates all geological data and other similar information in PT-FI's possession or control derived from its activities in the Contract Area which any person interested in acquiring a Participating Interest in the Contract Area would reasonably be expected to wish to see and all other information or copies thereof reasonably requested by them concerning the COW, its operations in the Contract Area and the disposal of Products, including, but not limited to, true and correct copies of all contracts relating to the COW and the Contract Area of which PT-FI has knowledge; 4.2.5 all activities by PT-FI under the COW up to the date of this Agreement have in all material respects been in accordance with the requirements of the Government and Indonesian law and there has been no breach by PT-FI of any of the provisions of the COW or of any other agreement binding upon it the breach of which might have a material adverse effect on the ability of PT-FI to carry out the Enterprise Operations; 4.2.6 there has been no material breach by the Government of any of the provisions of the COW and PT-FI has not received any indication from the Government that the Government is seeking to re-negotiate any of the terms of the COW; - - 18 - 4.2.7 to the best of PT-FI's knowledge, there has been no material breach by any third party of any material contract with PT-FI in relation to PT-FI's activities under the COW or the sale of Products; 4.2.8 there are no material litigation, arbitration or administrative proceedings or claims currently in progress or, so far as PT-FI is aware, pending or threatened against PT-FI or any of its assets under the COW or any material contract to which PT-FI is a party in relation to PT-FI's activities under the COW or the sale of Products; 4.2.9 PT-FI is not a party to any agreement or under any other obligation under or pursuant to which it has created or given or permitted to subsist or is obliged or bound to create or give or permit to subsist in favour of any third party any Encumbrance over P.T.-RTZ's share of the Joint Account Assets or over any revenues allocated to P.T.-RTZ (or to which P.T.-RTZ is entitled) under this Agreement; 4.2.10 P.T.-RTZ's interest in the COW pursuant to the Assignment is not subject to any Encumbrance created or given by PT-FI in favour of any third party. 4.3 Disclosures Each of the parties represents and warrants to the other(s) that it is unaware of any facts or circumstances which have not been disclosed in this Agreement and which should have been disclosed to the other party in order to prevent the representations and warranties given by it in this Clause 4 from being materially misleading. 5. EXPLORATION CONTRIBUTIONS BY PARTICIPANTS 5.1 Exploration Contribution by P.T.-RTZ P.T.-RTZ shall pay, in accordance with paragraph 10.3 of the Financial and Accounting Procedures, all Exploration Costs approved by an Exploration Committee after the Effective Date until the Exploration Obligation has been satisfied, including the expenditure of not less than $40,000,000 in respect of Contract Area Block A. 5.2 Additional Cash Contributions After the Exploration Obligation has been satisfied, the Participants shall contribute funds for Approved Exploration Programmes and Budgets in proportion to their respective Participating Interests, subject to their rights to conduct Sole Risk Ventures. - - 19 - 6. INTERESTS OF PARTICIPANTS 6.1 Participating Interests 6.1.1 At the date of this Agreement, except as otherwise provided in this Agreement (including the Financial and Accounting Procedures), the Participating Interests of the Participants in Contract Area Block A and in Contract Area Block B are: PT-FI sixty per cent (60%) P.T.-RTZ forty per cent (40%). The Participating Interests of the Participants shall not be changed except as provided in this Agreement (including the Financial and Accounting Procedures) and each Participant's Participating Interest in Contract Area Block A may, as provided in this Agreement and the Financial and Accounting Procedures, be different from its Participating Interest in Contract Area Block B. 6.1.2 There shall be allocated to the Participants the revenues and shares thereof calculated in accordance with the Financial and Accounting Procedures. 6.1.3 All costs and liabilities incurred in or attributable to Chargeable Operations in the Contract Area shall be allocated to and borne by the Participants in accordance with the Financial and Accounting Procedures. 6.1.4 Participating Interests shall be calculated to three decimal places and rounded to two (e.g. 1.519% rounded to 1.52%). Decimals of .005 and less shall be rounded down. 6.2 Changes in Participating Interests A Participant's Participating Interest may be changed as follows:- 6.2.1 in the event of default by a Participant in making its agreed upon contribution to an Approved Programme and Budget, followed by an election by the other Participant to invoke Clause 6.3.2.3; or 6.2.2 transfer by a Participant of less than all its Participating Interest in accordance with Clause 15; or 6.2.3 acquisition of less than all of the Participating Interest of the other Participant, however arising. - - 20 - In the event of a change in a Participant's Participating Interest with respect to either Contract Area Block A or Contract Area Block B, there will, subject to obtaining any necessary Governmental approval, be a corresponding and proportionate change in the Participant's interest in the COW with respect to Contract Area Block A (subject to PT-FI's rights with respect to the 10-K Reserves and PT-FI Assets) or the COW with respect to Contract Area Block B, as the case may be. 6.3 Default in Making Contributions If a Participant defaults in its obligation to pay a contribution or cash call properly payable or made under this Agreement (including the Financial and Accounting Procedures), (such Participant being a "Defaulting Participant"), 6.3.1 All rights of the Defaulting Participant to receive its proportionate share of the Incremental Expansion Cashflow of Approved Expansion Projects, or the revenues from Contract Area Block B, Joint Operations Greenfield Projects in Contract Area Block A or, as the case may be, in any Year after the Cut-off Date, the revenues from Joint Operations, shall be suspended until such time as the default has been remedied and until such time, such proportionate share shall go to the Non-Defaulting Participant(s), who shall apply such share of the relevant revenues or (as the case may be) Incremental Expansion Cashflow first, to make any contribution or meet any cash calls not made or met by the Defaulting Participant or made or met on its behalf, and second, to pay the indebtedness and unpaid and accrued interest thereon then owing by the Defaulting Participant to such Non- Defaulting Participant pursuant to Clause 6.3.2. The right of a Defaulting Participant to receive its proportionate share of the relevant revenues or (as the case may be) the Incremental Expansion Cashflow shall be reinstated at the first time when such Participant is not in default in its obligation to make a contribution or meet a cash call and all indebtedness and interest thereon arising out of the making by the Non-Defaulting Participant of Cover Payments has been paid in full. 6.3.2.1 The other Participant, by notice to the Defaulting Participant, may at any time, but shall not be obliged to, elect to make such contribution or meet such cash call on behalf of the Defaulting Participant (a "Cover Payment"). If more than one Cover Payment is made by the other Participant in relation to the same Contract Area Block, such Cover Payments shall be - - 21 - aggregated and the rights and remedies described herein pertaining to an individual Cover Payment shall be read to apply to the aggregated Cover Payments. 6.3.2.2 Each Cover Payment shall constitute indebtedness due from the Defaulting Participant to the Non-Defaulting Participant, which indebtedness, together with interest (calculated from the date of the Cover Payment at the rate specified in paragraph 10.3.3 of the Financial and Accounting Procedures) shall be payable upon demand. 6.3.2.3 If a Cover Payment shall have been made, upon the giving of not less than 5 days' prior notice to the Defaulting Participant, whether or not payment thereof has been demanded under Clause 6.3.2.2, the Non-Defaulting Participant may, but shall not be obliged to, elect to effect an adjustment of the Defaulting Participant's Participating Interest in the relevant Contract Area Block pursuant to this Clause 6.3.2.3; provided, however, that if within such 5 day period the Defaulting Participant shall evidence to the reasonable satisfaction of the Non- Defaulting Participant that it will have the funds to, and will, within 10 days of the expiry of such 5 day period, pay all indebtedness owing by the Defaulting Participant to the Non-Defaulting Participant, then such adjustment of Participating Interest may not be effected until the end of such additional 10 day period. Upon such election, or, if applicable, at the end of such additional 10 day period, an amount equal to 125% times the Cover Payment shall be deducted from the Defaulting Participant's relevant Memorandum Equity Account for the relevant Contract Area Block and added to the relevant Memorandum Equity Account for that Contract Area Block of the Non-Defaulting Participant and the Participating Interests of the Participants shall be recalculated based on the relevant adjusted Memorandum Equity Accounts. 6.3.2.4 Notwithstanding anything to the contrary contained in this Agreement, failure by PT-FI to make a - - 22 - contribution or respond to a cash call shall not constitute a default hereunder if such failure occurs prior to the time an aggregate sum of $750,000,000 has been spent on one or more Approved Expansion Projects and is wholly attributable to the failure by PT-FI to receive advances under the RTZ Loan Agreement. 6.3.3 If as a consequence of the adjustment of a Defaulting Participant's relevant Memorandum Equity Account under Clause 6.3.2.3 its recalculated Participating Interest in Contract Area Block A or, as the case may be, Contract Area Block B is less than 10% (such adjustment being a "Forced Sale Adjustment"), then 6.3.3.1 the Defaulting Participant shall be deemed to have elected to withdraw from participation in Joint Operations in Contract Area Block A or, as the case may be, Contract Area Block B 6.3.3.2 the Defaulting Participant shall sell to the Non-Defaulting Participant and the Non-Defaulting Participant shall buy all of the Defaulting Participant's Participating Interest in Contract Area Block A or, as the case may be, Contract Area Block B for a price equal to the proportion of the Fair Market Value of the Joint Account Assets attributable to Contract Area Block A or, as the case may be, Contract Area Block B as at the date on which its Participating Interest first reduces below 10% which is proportionate to the Defaulting Participant's recalculated Participating Interest therein 6.3.3.3 completion of the sale and purchase under Clause 6.3.3.2 shall take place within 90 days after establishment of the Fair Market Value. The Defaulting Participant shall be liable for all costs and expenses of the sale and purchase (other than the purchase price) and shall indemnify the Non-Defaulting Participant against all adverse tax consequences of the sale and purchase 6.3.3.4 for the purposes of Clause 6.3.3.2, the Fair Market Value of the Joint Account Assets attributable to Contract Area Block A or, as the case may be, - - 23 - Contract Area Block B means the amount determined by the Participants. Should the Participants be unable within 30 days after a Forced Sale Adjustment to agree as to the Fair Market Value of the Defaulting Participant's Participating Interest to be sold pursuant to Clause 6.3.3.2, the Participants shall, within 10 days after the expiration of such 30 day period, attempt to select one reasonably acceptable, internationally recognised independent investment bank to determine the Fair Market Value of the Defaulting Participant's Participating Interest, which determination shall be binding on all Participants. Should the Participants be unable to agree upon a mutually acceptable investment bank within such 10 day period, each of the Participants shall have 10 additional days to select one internationally recognised investment bank to determine the Fair Market Value of the Defaulting Participant's Participating Interest. Each such investment bank or, in default of selection by either Participant, the sole investment bank so selected shall, within 30 days of being requested to do so, determine the Fair Market Value of the Defaulting Participant's Participating Interest provided however that, where two such investment banks are so selected, the Fair Market Value of such interest shall be the average of their respective determinations if and only if the lower of the two determinations is at least 90% of the higher of the two determinations. If it is not, then such two investment banks shall select a third internationally recognised investment bank to determine the Fair Market Value of the Defaulting Participant's Participating Interest, and the Fair Market Value of such interest (i) shall be such third determination if such third determination is a figure between the two previous determinations; (ii) shall be the lower of the two previous determinations if the third determination is lower than both the two previous determinations; and (iii) shall be the higher of the two previous determinations if the third determination is higher than both the two previous determinations. The Participants shall each pay 50% of the costs of the services and expenses of the investment bank(s) - - 24 - 6.3.3.5 upon completion of the sale and purchase under Clause 6.3.3.2 the Defaulting Participant shall cease to conduct any activities in Contract Area Block A or, as the case may be, Contract Area Block B (other than then existing Sole Risk Ventures and other than, in the case of PT-FI, PT-FI's rights with respect to the 10-K Reserves and any retained rights referred to in Clause 7.5) and shall surrender to the Non-Defaulting Participant the right to conduct all such activities 6.3.3.6 each of the Participants appoints the other its attorney, such appointment becoming effective upon its becoming a Defaulting Participant, with power in its name or otherwise to do all such things and sign or execute all such deeds or documents as may be necessary or desirable to complete any of the transactions referred to in this Clause 6.3.3, and (without limitation) for that purpose to appear in the name of the Defaulting Participant before any notary or other Government official in Indonesia. 6.4 Continuing Liabilities Upon Adjustment of the Participating Interests Any reduction of a Participant's Participating Interest under this Clause 6 shall not relieve such Participant of its share of any Liability, whether it accrues before or after such reduction, arising out of Joint Operations in Contract Area Block A or, as the case may be, Contract Area Block B conducted after the Effective Date and prior to such reduction. For purposes of this Clause 6, such Participant's share of such Liability shall, subject to Clause 6.1 and the Financial and Accounting Procedures, be equal to its Participating Interest in the relevant Contract Area Block at the time such Liability was incurred. The increased Participating Interest accruing to a Participant as a result of the reduction of the other Participant's Participating Interest shall be free from Encumbrances arising by, through or under such other Participant, except those to which both Participants have given their written consent or are otherwise subject (including, without limitation, royalties payable under the COW). Each Participant's Participating Interest shall be shown in the books of the Operator. - - 25 - 7. COVENANTS AND RIGHTS 7.1 Mutual Covenants Each of the Participants covenants and agrees with the other that: 7.1.1 it will give prompt notice to the other Participant of any notice of default, lawsuit, proceeding, action or damage of which it becomes aware and which might affect the Joint Account Assets, the Contract Area or the COW 7.1.2 it will only conduct operations within or relating to the Contract Area in accordance with the provisions of the COW and this Agreement and, without prejudice to the foregoing, not at any time do or cause or permit to be done any act or omission which results or might result in a breach of the provisions of the COW, this Agreement or any other agreement binding upon it a breach of which might have a material adverse effect on Joint Operations. 7.2 PT-FI Covenants PT-FI covenants and agrees with P.T.- RTZ that it will: 7.2.1 At all times comply with and perform all its obligations under the Privatisation Agreements and exercise its rights under the Privatisation Agreements in consultation with P.T.-RTZ and in a manner which does not adversely affect the carrying out of the Joint Operations and will not enter into any other agreements in the nature of Privatisation Agreements (other than as listed in Schedule 1) except in consultation with P.T.-RTZ; 7.2.2 Prepare its annual financial statements in accordance with accounting principles generally accepted in the U.S.A. except as otherwise stated therein and based on accounting policies consistently applied in all respects except as otherwise stated therein and at the time of the issue thereof send to P.T.-RTZ copies of the same; 7.2.3 As and when required by P.T.-RTZ furnish to P.T.-RTZ promptly such financial or other information, data or maps relating to the Contract Area and the Enterprise Operations therein and thereon as P.T.-RTZ may from time to time require; 7.2.4 Furnish to P.T.-RTZ a copy of each material return and report (and each other return and report requested specifically by P.T.- RTZ) - -26- submitted to the Government under the COW and, with respect to major returns and reports (as determined from time to time by the Participants), do so within a reasonable time before the latest day for such submission to permit time for review by P.T.-RTZ provided that tax returns shall not be included in this sub- Clause 7.2.4; 7.2.5 Not, without the prior written consent of P.T.- RTZ, create or permit to exist any Encumbrance on or Dispose, except in the ordinary course of business, of the whole or any part of the PT-FI Available Assets or its right, title and interest in and under the COW or any authorisations issued pursuant to the COW or the Joint Account Assets, other than, with respect to Dispositions, sales otherwise permitted by this Agreement and, with respect to Encumbrances, (i) the security in favour of [RTZ-UK Lender] referred to in the RTZ Loan Agreement, (ii) Encumbrances in favour of the existing bank lenders to PT- FI or the lenders under any replacement or refinancing thereof, (iii) Encumbrances in favour of lenders on PT-FI Available Assets or on PT-FI's share of the Joint Account Assets or, with P.T.-RTZ's consent, on all of the Joint Account Assets, (iv) Encumbrances on replacements of assets under Privatisation Agreements and (v) Encumbrances on replacements of PT-FI Available Assets, provided that the lenders holding Encumbrances referred to in (ii) and (iii) above shall have executed documents recognising P.T.-RTZ's rights to the same extent as have PT-FI's existing bank lenders in connection with this Agreement; 7.2.6 Do and cause to be done all things necessary to preserve and keep in full force and effect its rights and authorisations with respect to the COW and the Contract Area, at all times comply with and cause to be complied with all applicable laws, the violation of which would be materially adverse to the Enterprise Operations and obtain and maintain in full force and effect all authorisations, approvals, consents, licences and exemptions with respect to the COW and the Contract Area, in each case where the failure to obtain or maintain which would be materially adverse to Enterprise Operations, promptly effect all filings, registrations and notarisations and promptly comply with all other requirements in any such case which may at any time be required with respect to or under this Agreement, the COW and Enterprise Operations, and the continued due performance of its obligations hereunder or thereunder or the validity or enforceability of this Agreement and the COW, and P.T.-RTZ shall provide to PT-FI all such information in relation to P.T.- RTZ's participation in Joint Operations as PT-FI may reasonably - - 27 - require and which is not otherwise available to PT-FI in order to enable PT-FI to fulfill its obligations under this Clause 7.2.6; 7.2.7 Notify P.T.-RTZ immediately upon becoming aware of the actual or threatened revocation or variation of any such authorisation as is referred to in Clause 7.2.6; 7.2.8 Without the prior written consent of P.T.-RTZ, not agree to any waiver or amendment of the terms of the COW which would have a material adverse effect on P.T.-RTZ's Participating Interest; 7.2.9 Not take any action, including actions using the PT-FI Available Assets, which would prejudice either the institution, completion or operation of any first Approved Expansion Project as described in Clause 10.5 and any projects of Expansion thereafter or any activity of PT-FI authorised hereunder; 7.2.10 Make available the PT-FI Available Assets and its right, title and interest in and under the COW and all authorisations issued pursuant to the COW for their use in Joint Operations on a first priority basis with respect to any PT-FI Available Assets which are not, at the time, being employed with respect to activities permitted by Clause 7.5, and on a shared basis that reflects equitably the needs of the parties with respect to other PT-FI Available Assets; 7.2.11 Without prejudice to any other provisions of this Agreement, not take any action or permit any action to be taken which will affect materially and adversely P.T.-RTZ's Participating Interest but PT-FI shall not be deemed to be in breach of this Clause merely because it exercises any right contained in Clauses 6.3 and 15 of this Agreement. 7.3 P.T.-RTZ Covenant P.T.-RTZ covenants and agrees with PT-FI that, without the prior written consent of PT- FI, it will not create or permit to exist any Encumbrance on or Dispose, except in the ordinary course of business, of the whole or any part of the interests assigned in the Assignment or the Joint Account Assets, or violate any applicable law if the effect thereof would be materially adverse to the Enterprise Operations provided that P.T.-RTZ may create Encumbrances in favour of project lenders on P.T.-RTZ's share of the Joint Account Assets or, with PT-FI's consent, on all of the Joint Account Assets. 7.4 Power of Attorney Each of the Participants hereby appoints the other Participant its attorney in its name or otherwise to do all such things and - - 28 - sign or execute all such deeds or documents as may be necessary or desirable to cure any and each default by that Participant under the COW or, in the case of P.T.-RTZ, its assigned interest in the COW and (without limitation) to appear in the name of the appointor before any notary or other Government official in Indonesia. 7.5 Retained PT-FI Rights 7.5.1 Existing Operations 7.5.1.1 Subject to Clause 7.5.1.2, PT-FI shall have the right, without the need to obtain the consent of P.T.- RTZ, to continue to carry on Mining activities with the use of the PT-FI Available Assets, including activities which, through optimisation or fine tuning of its operations and facilities, may result in treatment of ore at a rate in excess of 118,000 tonnes per day and shall have the right to use and make changes to the PT-FI Available Assets so long as such activities do not prejudice the undertaking of the first Approved Expansion Project at the current millsite, as described in Clause 10.5. 7.5.1.2 PT-FI will not undertake any Expansion project (as opposed to optimisation or fine tuning) in Contract Area Block A other than as part of Joint Operations or take any other action which will prejudice the undertaking of the first Approved Expansion Project at the current millsite, provided that if no project for Expansion which meets the criteria specified in, or agreed pursuant to, Clause 10.5 has been proposed by P.T.-RTZ to the Operating Committee before the tenth anniversary of the Effective Date, (i) the foregoing limitation on PT- FI's ability to enter into an Expansion project other than as part of Joint Operations shall no longer be applicable, (ii) PT-FI shall be entitled to enter into such a project either as a Sole Risk Venture or, if it elects at its option to offer P.T.-RTZ a right of participation and P.T.-RTZ accepts such offer, as part of Joint Operations, in which latter event, [RTZ UK Lender] shall remain obliged to make available the loan funds contemplated by the RTZ Loan Agreement, and (iii) except as set out in the immediately preceding item - - 29 - (ii), P.T.-RTZ will not have a right to participate in any revenues from nor will it be obliged to contribute to any costs in respect of Contract Area Block A, even after the Cut-off Date, except with respect to Joint Operations Greenfield Projects and Sole Risk Ventures in Contract Area Block A in which P.T.-RTZ has participated. 7.5.1.3 PT-FI shall be entitled to retain 100% of all revenues, including Sales Revenues, received by PT-FI from Contract Area Block A prior to the Sharing Commencement Date, except for any revenues from Joint Operations Greenfield Projects and Sole Risk Ventures in which P.T.-RTZ shall have participated. 7.5.2 Privatisation Agreements Without prejudice and subject to the covenants on the part of PT-FI contained in Clause 7.2, PT-FI shall have the right, without the need to obtain the consent of P.T.-RTZ, to conduct activities in accordance with the Privatisation Agreements existing on the Effective Date or described in Schedule 1 provided that the consent of P.T.-RTZ shall be obtained prior to any material change in the terms thereof which results in an increase in the burdens of PT-FI thereunder, other than as described in Schedule 1. The Participants will discuss the possibility of future agreements in the nature of Privatisation Agreements on the basis of the financial requirements of the Participants. If PT- FI wishes to sell and lease back further of the PT-FI Available Assets (as part of such future agreements or otherwise) or to sell any part thereof reasonably deemed by it to be surplus to its requirements in relation to Enterprise Operations, it shall be permitted to do so provided such action does not affect materially and adversely the institution, completion or operation of any Approved Expansion Projects or the availability of the use of such assets, if required, for Joint Operations. 8. COMMITTEES 8.1 Exploration Committees The Participants will, not later than thirty days after the Effective Date, establish both an Exploration Committee for Contract Area Block A and an Exploration Committee for Contract Area Block B, in each case to determine overall policies, objectives, procedures, methods and actions for incurring the Exploration Costs. Until the Exploration Obligation has been satisfied, each Participant may appoint two members to each of the Exploration Committees. Once the - -30- Exploration Obligation has been satisfied, PT-FI may appoint an additional member to each of the Exploration Committees. Each Participant may appoint one or more alternates to act in the absence of a regular member. Any alternate so acting shall be deemed a member. Appointments shall be made or changed by written notice to the other Participant. 8.2 Operating Committee PT-FI shall establish an Operating Committee to, among other things: (i) receive reports on all operations within the Contract Area, including Joint Operations, (ii) design for presentation to the boards of directors of PT-FI and P.T.-RTZ appropriate actions respecting the Joint Operations, (iii) develop plans and make recommendations to the board of directors of PT-FI, (iv) monitor execution of plans approved by the board of directors of PT-FI, and (v) subject to the control of the board of directors of PT-FI, be involved generally in directing day-to-day operations of the business of PT-FI, but will not determine policies, objectives, procedures, methods and actions for incurring Exploration Costs, which will continue to be determined by the relevant Exploration Committee. The Operating Committee will have three members, comprising the Chief Operating Officer of PT-FI as Chairman, the General Manager (Mining Operations) of PT-FI and one member appointed by P.T.-RTZ. Each of PT-FI and P.T.-RTZ may appoint one or more alternates to act in the absence of the regular member appointed by it. Any alternate so acting shall be deemed a member. Appointments shall be made or changed by written notice to the other Committee members. 8.3 Other Committees A special Tax Committee will be established to administer the provisions of Clause 16.13 of this Agreement. Other committees may be established as required on which PT-FI shall be entitled to have majority representation provided that, on any committee established in respect of a Sole Risk Programme undertaken by P.T.-RTZ, P.T.-RTZ shall be entitled to have majority representation and that PT-FI and P.T.-RTZ shall be entitled to have equal representation on the special Tax Committee. - -31- 8.4 Quorum At any Committee meetings, a quorum will exist if a representative of each Participant is present at the meeting. If at the time a meeting is convened, a quorum is not present, the meeting may, upon notice to the parties entitled to be represented at the meeting, be adjourned to a date no sooner than twenty nor later than thirty days following such originally scheduled meeting. Those members who attend the rescheduled meeting shall be deemed to constitute a quorum and may adopt any resolutions or take any other action not inconsistent with the provisions of this Agreement. 8.5 Decisions Each party entitled to be represented, acting through its appointed members, shall have a vote on a Committee. Each member of a Committee shall have one vote. With respect to the approval of an Approved Expansion Project or of Programmes and Budgets, the function of the Operating Committee will be to recommend the same for the approval of the boards of directors of, in the case of an Approved Expansion Project, PT-FI, FCX and P.T.-RTZ and, in the case of Programmes and Budgets, PT-FI and P.T.-RTZ. No project for Expansion shall be an Approved Expansion Project unless and until it has been approved by the boards of directors of PT-FI, FCX and P.T.-RTZ (and each project of Expansion shall be an Approved Expansion Project if and when it has been so approved) or is otherwise an Approved Expansion Project in accordance with Clause 10.3 and no Programme and Budget shall be an Approved Programme and Budget unless and until it has been approved by the boards of directors of PT-FI and P.T.-RTZ. Subject to the foregoing, all decisions of each Committee shall be taken by simple majority vote of members present in person or by proxy except that all decisions relating to Approved Expansion Projects, including a decision regarding a material departure from the scope or cost of any Approved Expansion Project, shall, subject to Clause 10.3, require the approval of representatives of both Participants. 8.6 Meetings The Operator shall call the first meetings of the Exploration Committees within thirty days of the formation thereof. The purpose of such first meetings shall be to propose and agree the first Programme and Budget for the remainder of that Year provided that until such a first Programme and Budget has been agreed, Exploration activities will be conducted in accordance with the Exploration programme for 1995 in existence at the date of the Implementation Agreement or, if this Agreement is executed after 31 December 1995, the then existing Exploration programme of PT-FI which does not cover a period in excess of 12 months. Thereafter the Exploration Committees and the Operating - -32- Committee shall hold at least four meetings per Year, one of which shall be in December to propose the relevant Programme and Budget for the subsequent calendar year (the "Annual Budget Meeting"). The Operator shall give thirty days' notice to the Participants of each meeting. Additionally, any Participant or the Operator may call a special meeting upon fifteen days' notice to the other Participant(s) and to the Operator if the Operator is not calling the meeting. In case of emergency, reasonable notice of a special meeting shall suffice. All meetings shall be held in a mutually agreed place, failing which in New Orleans. Each notice of a meeting shall include an itemised agenda prepared by the Operator in the case of a regular meeting, or by the Participant calling the meeting in the case of a special meeting, but any matters may be considered with the consent of the Participants. The Operator shall prepare minutes of all meetings and shall distribute copies of such minutes to the Participants within thirty days after the meeting. The minutes, when signed by all Participants (and no signature shall be unreasonably withheld or delayed), shall be the official record of the decisions made by a Committee and shall be binding on the Participants and on the Operator. Each of the Participants shall bear its own costs of attendance at meetings of Committees. The Operator shall be entitled to be present at all meetings of a Committee unless such Committee otherwise resolves but the Operator shall not be counted in the quorum or be entitled to vote in its capacity as Operator. 8.7 Action Without Meeting In lieu of meetings, a Committee may hold telephone conferences, so long as all decisions are immediately confirmed in writing and signed by all the parties entitled to be represented at meetings of that Committee, and a member appointed by each party entitled to be represented at meetings of that Committee has a reasonable opportunity to be included in any such conference. 8.8 Close-down 8.8.1 If either Participant shall determine that, in its best judgment, Close-down shall occur within 11 years thereafter, it shall notify the other Participant and the Operator. Within 30 days after receipt of notice of such determination, the other Participant shall notify the first Participant whether or not it agrees with such determination. If there is a disagreement as to such determination, the Participants shall seek to achieve a mutually agreed expected date of Close- down (an "Anticipated Close-down Date"). In the absence of such an agreement, the dispute shall be referred to the firm of independent mining consultants which has most recently - -33- reviewed and confirmed the reserves in the Contract Area for Form 10-K reporting purposes, whose determination as to the Anticipated Close- down Date shall be binding on both Participants. 8.8.2 Within 90 days after a final determination of the Anticipated Close-down Date, the Operator shall deliver to the Participants its best estimate of the anticipated Close-down Costs. In December of the Year in which such determination of the Anticipated Close-down Date shall have been finally determined, and in December of each of the nine subsequent Years, each Participant shall secure the payment of 10% of the Close-down Costs payable by such Participant (in accordance with the Financial and Accounting Procedures), by such methods as shall be determined by agreement of the Participants or, in the absence of agreement, by (i) the purchase of bonds with an investment rating of A (or the then equivalent rating) or better and (ii) the delivery of such bonds to the Trustee under the Trust Agreement or such other trustee as shall be agreed by the Participants. The proceeds of such bonds or other form of security shall be made available, as required, to pay such Close- down Costs. 8.8.3 In the case of a Sole Risk Venture, the Participant undertaking the Sole Risk Venture shall provide for the anticipated Close-down Costs as provided in Clauses 8.8.1 and 8.8.2, unless an alternate method of funding Close-down Costs has been approved by the non-Participating Participant(s). 9. OPERATOR 9.1 Appointment Except as provided in Clauses 9.5 and 12.2, PT-FI shall be the Operator for all operations under the COW or this Agreement. The Operator shall report to the Committees. 9.2 Powers and Duties of Operator Subject to the provisions of this Agreement, the Operator shall, in addition to those powers and duties contained elsewhere in this Agreement, have the following powers and duties which shall be discharged in accordance with each Programme and Budget: 9.2.1 The Operator shall manage, direct and control Enterprise Operations. - -34- 9.2.2 The Operator shall prepare and present to each member of the appropriate Committee proposed Programmes and Budgets in accordance with paragraph 10.1 of the Financial and Accounting Procedures. 9.2.3 The Operator shall make cash calls as provided in paragraph 10.3 of the Financial and Accounting Procedures and on receipt of amounts from the Participants pursuant to paragraph 10.3 of the Financial and Accounting Procedures shall make all expenditures necessary to carry out Approved Programmes and Budgets and shall promptly advise the relevant Committee if it lacks sufficient funds to carry out its responsibilities under this Agreement. 9.2.4 The Operator shall make distributions of cashflow as provided in this Agreement (including the Financial and Accounting Procedures) and should the Operator default in making any such distributions and the default continues for 30 days after (i) (in the absence of any dispute or, in the event of a dispute, as regards the undisputed amount) notice from any Participant of non-payment or (ii) (in the event of a dispute, as to the disputed amount) final determination of such amount as provided in the Financial and Accounting Procedures, any Participant shall have the right to declare an Allocation Event (as defined in the Trust Agreement). 9.2.5 The Operator shall implement Approved Expansion Projects and other Expansions. 9.2.6 The Operator shall sell on behalf of the Participants the Products derived from Joint Operations on terms which shall be discussed with the Participants. In carrying out its obligations pursuant to Clause 9.2.6, the Operator shall conduct such hedging and other price protection activities as are authorised by each Participant. However, the costs and benefits of such price protection activities shall be specifically allocated to and borne solely by the authorising Participant. 9.2.7 The Operator shall: (a) purchase or otherwise acquire all material, supplies, equipment, water, utility and transportation services required for operations, such purchases and - -35- acquisitions to be made on such terms as the Operator shall prudently approve, taking into account all of the circumstances, including the existence of prior agreements and arrangements; (b) obtain such customary warranties and guarantees as are available in connection with such purchases and acquisitions, taking into account all of the circumstances; and (c) keep the Joint Account Assets free and clear of all Encumbrances, except for those existing at the time of, or created concurrent with, the acquisition of such Joint Account Assets and those which are otherwise permitted by this Agreement, including Clause 7.2.5, or with the consent of the Participants. 9.2.8 The Operator shall: (a) make or arrange for all payments required by the COW, leases, claims, grants, permits, licences, concessions, contracts and other agreements related to the Joint Account Assets; (b) pay all Taxes, assessments and like charges on Enterprise Operations and Joint Account Assets except Taxes determined or measured by a Participant's net income subject to the provisions of Clause 14 and (c) do all other acts reasonably necessary to maintain the Joint Account Assets and the COW. 9.2.9 The Operator shall: (a) apply for all necessary permits, licences and approvals; (b) comply with applicable laws and regulations; (c) notify promptly the relevant Committee of any allegations of substantial violation thereof; and (d) prepare and file all reports or notices required for Joint Operations. The Operator shall not be in breach of this provision if a violation has occurred in spite of the Operator's good faith efforts to comply, and the Operator has in a timely manner cured or disposed of such violation. 9.2.10 The Operator shall prosecute and defend, but shall not initiate without consulting the Participants any litigation or administrative proceedings arising out of Joint Operations. The Participants shall have the right to participate, at their own expense, in such litigation or administrative proceedings. - -36- 9.2.11 The Operator shall maintain for the account of the Participants with respect to the Joint Operations such basic insurance as it shall reasonably deem to be necessary for prudent operation (details of which it shall supply to each Participant) and, to the extent practicable, shall also make available, at the individual Participant's cost, such additional insurance, including business interruption insurance, as the individual Participants shall desire. The premium for such basic insurance will be a charge to the Participation and for such additional insurance to the Participant(s) requesting the same. No other insurance shall be provided for the benefit of the Participants. However, after consultation with the other Participant, any Participant may procure and maintain at its cost and expense such other insurance as it shall determine and such other insurance shall be solely for the benefit of the Participant procuring the same and the premium therefor shall not be a charge to the Participation. Further, such insured Participant shall indemnify the other Participants not named as insured in such additional insurance policy against any claim of the insurer by subrogation or otherwise. 9.2.12 Except where the Participants are expressly permitted to Dispose of Joint Account Assets by the terms of this Agreement, the Operator may not Dispose of Joint Account Assets, whether by sale, assignment, abandonment or other transfer, except in the ordinary course of business. 9.2.13 The Operator shall have the right (subject to Clause 9.6) to carry out its responsibilities hereunder through agents, Affiliates or independent contractors. 9.2.14 The Operator shall keep and maintain all accounting and financial records in accordance with the Financial and Accounting Procedures. 9.2.15 The persons employed in the Joint Operations will not be employees of the Participation. 9.2.1 At all reasonable times, the Operator shall provide the relevant Committee or the representative of any Participant, upon request, access to, and the right to inspect and copy all information acquired in Joint Operations, including, but not limited to, maps, drill logs, core tests, reports, surveys, assays, analyses, production reports, operations, technical, accounting and financial records. In addition, the Operator shall allow each Participant, at its sole risk and expense, and subject to reasonable safety regulations, to inspect the - -37- Joint Account Assets and observe Enterprise Operations at all reasonable times, so long as the inspecting Participant does not unreasonably interfere with Enterprise Operations. 9.2.17 The Operator shall undertake all other activities reasonably necessary to fulfill the foregoing. The Operator shall not be in default of its duties under this Clause 9.2 if its inability to perform results from the failure of either Participant to perform acts or to contribute amounts required of it by this Agreement, but this shall not relieve any Participant which is the Operator of any liability in its capacity as a Participant. 9.3 No Fee Except as otherwise agreed or provided for in the Financial and Accounting Procedures, the Operator shall not be entitled to any fee or other compensation for acting as Operator. 9.4 Standard of Care The Operator shall conduct all Enterprise Operations (including the marketing of Products) in a good, workmanlike and efficient manner, in accordance with sound mining and other applicable industry standards and practices, and in accordance with applicable laws, the terms and provisions of the COW and any leases, licences, permits, contracts and other agreements pertaining to the Joint Account Assets. Without prejudice to the generality of the foregoing, the Operator shall maintain in good working order all material assets taken as a whole from time to time used in Enterprise Operations or Sole Risk Ventures. The Operator shall not be liable to any Participant for any act or omission in its capacity as Participant (insofar as such act or omission relates to conduct of operations in the Contract Area) or as Operator resulting in damage or loss except to the extent caused by or attributable to its wilful misconduct or gross negligence. 9.5 Resignation; Deemed Offer to Resign The Operator may resign upon 90 days' prior notice. In addition, the Operator shall be deemed to have resigned forthwith upon an Event of Resignation, as defined below and, as provided in the Intercreditor Agreement, P.T.-RTZ shall, if at the time of such Event of Resignation, P.T.-RTZ is an indirect or direct subsidiary of RTZ, automatically become substitute Operator with respect to the COW. Similarly, if the Operator shall resign upon 90 days' prior notice, P.T.-RTZ will become Operator with respect to the COW if P.T.-RTZ shall at the time be a direct or indirect subsidiary of RTZ. For the purposes of this Agreement, an Event of Resignation shall mean one of the following occurrences: - -38- 9.5.1 an Event of Default shall have occurred under [ N.B. Insert here details of PT-FI's bank agreement(s)] which gives the banks a right to cause PT-FI to resign as Operator and the banks have elected to exercise such right; or 9.5.2 the Government has given PT-FI a notice of default under Article 20 of the COW and PT-FI has not within 30 days (unless the default relates to failure to make payments pursuant to Article 12 or 13 of the COW, in which event 20 days) after receipt thereof either corrected such default or obtained the withdrawal or stay of such notice, unless the question has been submitted to arbitration, in which event it shall be an Event of Resignation if PT-FI has not corrected such default within 10 days after affirmation of such default by arbitration; or 9.5.3 FCX and its Affiliates shall cease to own at least such number of shares of the capital stock of PT-FI as shall permit FCX and its Affiliates to elect a majority of the board of directors and of the board of commissioners of PT-FI; or 9.5.4 any person shall, except with the consent of RTZ, acquire such number of shares of the capital stock of FCX as shall permit such person to elect a majority of the board of directors of FCX; or 9.5.5 a general meeting of shareholders of the Operator resolves that the Operator be liquidated or the Operator suffers the appointment of a receiver, liquidator, administrator, assignee, custodian, trustee, sequestrator or similar official for a substantial part of its assets in a proceeding brought against or initiated by it, and such appointment is neither made ineffective nor discharged within ninety days after the making thereof or such appointment is consented to, requested by or acquiesced in by it; or 9.5.6 the Operator commences a voluntary case under any applicable bankruptcy, insolvency or similar law now or hereafter in effect; or consents to the entry of an order of relief in an involuntary case under any such law or to the appointment of or taking possession by a receiver, liquidator, administrator, assignee, custodian, trustee, sequestrator or other similar official of any substantial part of its assets; or makes a general assignment for the benefit of creditors; or 9.5.7 entry is made against the Operator of a judgment, decree or order for relief by a court of competent jurisdiction in an involuntary case commenced against the Operator under any applicable bankruptcy, - -39- insolvency or other similar law of any jurisdiction now or hereafter in effect. [Events to be reviewed when Intercreditor Agreement finalised] 9.6 Transactions With Affiliates If the Operator engages an Affiliate of either Participant to provide services hereunder or to perform any of the obligations of the Operator, it shall do so on terms no more favourable to the Affiliate than would be the case with an unrelated person in an arm's length transaction provided that arrangements with Affiliates consistent with the Management Services Agreement presently in existence between Freeport-McMoRan Inc. and PT-FI or between FCX and PT-FI, and substitute arrangements no more onerous to PT-FI, shall not constitute a violation of the foregoing. 10. FEASIBILITY STUDY INTO EXPANSION 10.1 At such time (whether before or after the Effective Date) as a Participant is of the good faith and reasonable opinion that an economically viable project of Expansion or Development may be possible in any area of the Contract Area (the "Specified Area") (the "Expansion Project"), such Participant (the "Proposing Participant") may propose that a Feasibility Study be prepared to assess the economic viability of such Expansion Project. Such proposal (the "Proposal") shall be made to the Operating Committee and shall detail the information upon which the Proposing Participant has based its opinion. The Specified Area shall be defined in terms of a three-dimensional physical description. Within 30 days following the Operating Committee's receipt of the Proposal, the Operating Committee shall vote whether to authorise the Operator to conduct a Feasibility Study relating to such Proposal, except that, if the Proposal relates to an Expansion Project which satisfies the criteria specified in, or agreed pursuant to, Clause 10.5 and would be the first Approved Expansion Project, such approval shall be deemed to have been given. If the Operating Committee approves the Proposal, the Operator shall conduct a Feasibility Study relating thereto. If the Operating Committee does not approve the Proposal, the Proposing Participant may, at its sole risk and expense, proceed with the project as described in the Proposal as a Sole Risk Programme, to which the provisions of this Agreement relating to Sole Risk Programmes and Sole Risk Ventures shall apply. 10.2 Upon completion of any such Feasibility Study as is referred to in Clause 10.1 (including any initiated before the Effective Date and completed after - -40- the Effective Date), the Operator will deliver a copy of the results thereof to the Operating Committee and to the boards of directors of FCX, PT-FI and P.T.-RTZ respectively. Within 90 days following receipt of such results or, if the Expansion Project does not involve project financing on a joint basis and is not to be financed through the proceeds of the RTZ Loan Agreement, then within such additional reasonable period of time, not exceeding six months, as shall be necessary for either Participant to receive assurance of necessary bank financing, the boards of directors of FCX and PT-FI, on one hand, and of P.T.-RTZ, on the other, shall either 10.2.1 approve, and authorise the commencement of construction of, the Expansion Project in accordance with its terms; 10.2.2 agree in principle that the Expansion Project be carried out as Joint Operations but disagree as to scope or related Budget; or 10.2.3 decline to approve the Expansion Project. 10.3 Notwithstanding any other provision of this Agreement to the contrary, for a period of ten years from the date hereof, P.T.-RTZ shall have the sole right (i) to propose as the subject of a Feasibility Study an Expansion Project which satisfies the criteria specified in, or agreed pursuant to, Clause 10.5 and which would be the first Approved Expansion Project and (ii) to determine that the Expansion Project which is the subject of such Feasibility Study shall be the first Approved Expansion Project, for which purpose the approval of the board of directors of PT-FI shall be deemed to have been given. Accordingly, whether or not the board of directors of PT-FI or the board of directors of FCX approve such Expansion Project, such Expansion Project shall, provided it is approved by the board of directors of P.T.-RTZ, be an Approved Expansion Project for all purposes of this Agreement. 10.4 Except in relation to the Expansion Project falling within Clause 10.3 as to which the provisions of Clause 10.3 shall apply, if the boards of directors of FCX, PT-FI and P.T.-RTZ do not agree on the scope and Budget of an Expansion Project as mentioned in Clause 10.2.2, the matter shall be left open for an additional period of 30 days to allow for further discussion. If the boards of directors shall decline to approve the Expansion Project within such 30 day period, the board of directors of the Proposing Participant may, within a further period of 30 days thereafter by notice to the other Participant and the Operator elect, subject, in the case of PT-FI, to the limitation specified in Clause 7.5.12, to carry out such Expansion Project as a sole risk venture (a "Sole Risk Programme") and, unless the other Participant, within a further period of 30 days after receipt of the - -41- Proposing Participant's notice of election, elects by written notice to the Proposing Participant and the Operator to join in such Sole Risk Programme (in which case the Expansion Project shall become part of Joint Operations), the Proposing Participant shall have the right to carry out the Expansion Project as a Sole Risk Venture provided that it commences work within one year after the date of its written election to carry out such Expansion Project as a Sole Risk Venture, and provided further that, in the case of any Sole Risk Programme carried out by P.T.-RTZ, unless P.T.-RTZ has obtained the prior written consent of PT- FI, the Sole Risk Programme is not based to any significant degree on the accelerated mining of the 10-K Reserves. 10.5 No project shall be capable of being the first Approved Expansion Project unless it is a project for Expansion which is (a) based on the aggregate of (i) the 10-K Reserves and (ii) New Reserves of not less than 400,000,000 tonnes containing an average of 0.5% copper and 0.5 grammes/tonne of gold (or the economic equivalent thereof), unless FCX and P.T.-RTZ shall agree that a smaller reserve would suffice and (b) designed to result in the treatment of ore mined from the aggregate resources in Contract Area Block A (being both the 10-K Reserves and the above-mentioned New Reserves) at an aggregate rate in excess of 118,000 tonnes per day. In this Clause 10.5, "New Reserves" means proved and probable ore reserves situated in Contract Area Block A which are additional to the 10-K Reserves. 11. GREENFIELD PROJECTS AND LATER EXPANSION PROJECTS 11.1 The Participants will plan together, in accordance with the procedures set out in Clause 10, the Development of any new Greenfield Project in Contract Area Block A or Contract Area Block B, and any project of Expansion which is to be funded wholly without the use of the proceeds of the RTZ Loan and the related direct investment by P.T.-RTZ. The procedures outlined in Clause 10 and the Financial and Accounting Procedures will be applicable. 11.2 If any project referred to in Clause 11.1 is to be developed as part of Joint Operations, the financing of such project, insofar as it is not to be funded by way of the RTZ Loan and the related direct investment by P.T.-RTZ, will be either on a joint basis, in which event the financing costs will be part of the Operating Costs for purposes of the Financial and Accounting Procedures, or on an individual basis, in which event each Participant will be solely liable for its financing costs but will be entitled to determine the form which such financing will take, including, if such Participant so desires, sale and leaseback transactions so long as such transactions relate - -42- solely to such Participant's interest in the Joint Account Assets and do not prejudice or unduly interfere with the carrying on of Enterprise Operations or previously established Sole Risk Ventures. The costs and benefits of any such project carried on as part of Joint Operations will, subject to the above provisions of this Clause 11.2 and Clause 6.1 and the Financial and Accounting Procedures, be borne by the Participants in proportion to their respective Participating Interests in Contract Area Block A or Contract Area Block B, as the case may be. 11.3 If, pursuant to the procedures set out in Clause 10, any project referred to in Clause 11.1 is not to be developed as part of Joint Operations, either Participant may treat the project as a Sole Risk Venture under the provisions of Clauses 10 and 12. 12. SOLE RISK 12.1 If a Proposing Participant shall proceed with a Sole Risk Programme and unless otherwise agreed by the Participants, for so long as the Sole Risk Programme continues or the Proposing Participant continues to conduct operations on its own account in the Specified Area: 12.1.1 the Specified Area shall not be eligible for Joint Operations and the Proposing Participant shall have the exclusive right to carry out the Sole Risk Programme and any subsequent work programmes as it may think fit in the Specified Area at its sole risk and cost and the other Participant shall, to the extent necessary and so far as it is able and without prejudice to the existing Enterprise Operations, provide full rights of ingress, egress and regress to, from and over the Specified Area and the remainder of the Contract Area so that the Proposing Participant may exercise such right. Without prejudice to the generality of the foregoing, to the extent that the Sole Risk Venture requires the use of PT-FI Available Assets and PT-FI support services, and the use of these assets and support services does not prejudice then or later the conduct of Enterprise Operations, PT-FI will make available and charge to the Sole Risk Venture the direct and allocable costs of providing such assets and services; 12.1.2 the Participant which is not the Proposing Participant shall cease to have any rights to the production of Minerals or proceeds therefrom from operations in the Specified Area provided that the rights of the Proposing Participant will relate solely to the obtaining of exclusive rights to the proved - -43- and probable reserves in the three-dimensional physical area of the Specified Area, as described in the Feasibility Study with respect to the project in question, to the extent such reserves constitute the basis for the project, as presented to the Participants pursuant to Clause 10, but will not thereby obtain rights with respect to any other reserves. Any further Expansion within the Specified Area, but not constituting part of the Sole Risk Programme, will be subject to the procedure provided in Clause 11 for approval of Programmes, but with protections afforded to the holder of the Sole Risk Programme which are comparable to those afforded PT-FI with respect to the 10-K Reserves and the related PT-FI Available Assets. 12.2 All Sole Risk Programmes shall be conducted by the Operator appointed under this Agreement, unless it declines to act as operator with respect thereto, in which event the operator with respect thereto shall be the person designated as operator by the Participant for whose account the Sole Risk Venture is being conducted, subject to the reasonable approval of PT- FI. The Operator or other operator shall have, with respect to the Sole Risk Venture, the same powers, rights and obligations as are applicable to the Operator's activities with respect to Enterprise Operations. In the event of any conflict between the conduct of Enterprise Operations and a Sole Risk Programme, the Operator shall give priority to Enterprise Operations. 12.3 Should the Operator conduct a Sole Risk Programme on behalf of a Participant which is not also the Operator, the charges provided for in the Financial and Accounting Procedures with respect to such Sole Risk Programme shall be payable or repayable to the Operator upon demand. The Operator shall be authorised to establish such procedures as are reasonably necessary to obtain such payments from revenues otherwise payable to such Participant or to issue cash calls with respect thereto to such Participant. 12.4 Should the board of directors of any Participant determine, in any Year, not to participate in the proposed Exploration Programme for such Year as recommended by the Exploration Committee, or if no Programme is recommended by the Committee, the board of directors of either Participant may elect, upon 30 days' notice after having submitted a proposed Exploration Programme to the other Participant, to carry out such Programme as a Sole Risk Venture, unless within such period the other Participant elects to join in such Programme. If no such election by the other Participant is made, - -44- (a) if the proposed Programme is in Contract Area Block B, the declining Participant shall not be entitled to participate in that or any subsequent Exploration Programmes or in any subsequent Development Projects in Contract Area Block B other than any Development Projects already begun or pursuant to Exploration Programmes and subsequent Development Projects based on Feasibility Studies which have theretofore been approved [NB This will also apply in relation to the Eastern Minerals Area] (b) if the proposed Programme is in Contract Area Block A, the absence of any such election by the other Participant shall not affect that other Participant's rights to participate in any subsequent Exploration Programmes or in any subsequent Development Projects except that if the Participant which carries out the Programme as a Sole Risk Programme subsequently puts forward a proposal for Development based on such Sole Risk Programme, the other Participant shall not, in reaching a decision whether or not to participate in such Development Project, be entitled to see or use any data relating to such Exploration Sole Risk Programme. 13. PROGRAMMES AND BUDGETS Joint Operations shall be conducted, expenses shall be incurred and Joint Account Assets shall be acquired pursuant only to Approved Programmes and Budgets. The Financial and Accounting Procedures contains, among other things, provisions concerning the preparation, review and approval of Programmes and Budgets. 14. TAXATION IN INDONESIA It is the intention of the Participants that each of the Participants should be liable for Indonesian Taxes on income separately according to its participation in Joint Operations and any of its Sole Risk Ventures (and with respect to PT-FI, its interest in the 10-K Reserves and the other Enterprise Operations). Each Participant shall be directly responsible for and shall directly pay all such Taxes applicable to such Participant in Indonesia. Each Participant shall individually and timely file its own Indonesian Tax returns with the relevant authorities and independently file pertinent claims and recover Tax credits to the extent permitted by applicable law. Each Participant shall provide to the other promptly all such information reasonably requested by the other to enable such other to comply with its obligations under this Clause 14. Failure by a Participant to make any payment of Indonesian Income Tax which is due and payable by the Participant and which would result in a default under the - -45- COW shall entitle the Operator after 3 business days' notice to the Participant to make the required payment on behalf of the Participant and withhold such amount from sums otherwise due to such Participant under this Agreement. 15. TRANSFER OF PARTICIPATING INTERESTS 15.1 General Subject to the provisions of this Clause 15, a Participant shall have the right to transfer, grant, assign, and otherwise commit or dispose (all such rights to be referred to as "transfer" in this Clause 15) to any third party all or any part of its Participating Interest. 15.2 Limitations on Free Transferability The transfer right of a Participant in Clause 15.1 shall be subject to the following terms and conditions:- 15.2.1 no transferee of all or part of its Participating Interest shall have the rights of a Participant unless and until the transferring Participant has provided to the other Participants notice of the transfer, and the transferee, as of the effective date of the transfer, has committed in writing to be bound by this Agreement to the same extent and nature as the transferring Participant; 15.2.2 no transfer permitted by this Clause 15 shall relieve the transferring Participant of its share of any Liability, whether accruing before or after such transfer, which arises out of Joint Operations conducted after the Effective Date and prior to such transfer; 15.2.3 the transferring Participant and the transferee shall indemnify the other Participant against all adverse tax consequences of the transfer; 15.2.4 no transfer shall be made of less than a 10% Participating Interest (unless it is the balance of the transferor's Participating Interest) and no such transfer shall result in the transferring Participant retaining less than a 10% Participating Interest provided that a Participant will be entitled, in connection with the financing of a Sole Risk Programme or an Approved Programme and Budget, subject to the other sub- clauses of this Clause 15.2, to transfer a partial interest of less than a 10% Participating Interest, or a partial interest that relates only to a specific geographic area, so long as such transfer and such financing do not materially and adversely affect any Joint Operations; 15.2.5 no transfer shall be made to a person which is bankrupt, insolvent, liable to be wound up, which is not of good financial standing or - -46- which is otherwise objectionable on reasonable grounds from the viewpoint of the interests of the Participation; 15.2.6 such transfer shall be subject to a first offer right in favour of the other Participant as provided in Clause 15.3; 15.2.7 such transfer shall in no case affect the rights of the non-transferring Participant under the COW; 15.2.8 such transfer shall include the right to receive revenues from Enterprise Operations to the extent enjoyed by the transferor, but shall not include the right to participate in any Committees described in Clause 8 of this Agreement or in Clause 2 of the Implementation Agreement or to be an Operator as described in Clause 10 of this Agreement, unless the non-transferring Participants consent to the transfer of the right in question, which consent may be withheld for any reason; and 15.2.9 such transfer shall be subject to prior Government approval. In addition, until the RTZ Loan has been repaid in full, no transferee of the whole or any part of PT- FI's Participating Interest in Contract Area Block A shall have the rights of a Participant unless and until it has committed in writing to be bound by the repayment provisions of the RTZ Loan Agreement to the extent of the Participating Interest transferred. 15.3 First Offer Right Except as otherwise provided in Clause 15.4, if a Participant desires to transfer all or any part of its Participating Interest, including an interest therein that relates only to a specific geographic area, it shall first offer to sell such part to the other Participant on terms to be agreed. The Participants shall thereupon use all reasonable endeavours to agree the terms of the sale. If despite using all such reasonable endeavours, the Participants fail to agree on the terms of the sale within a period of 60 days after the date of the offer referred to in this Clause 15.3, the Participant desiring to sell shall have the right for the period of 180 days following the expiry of such 60 day period to sell such part of its Participating Interest to a third party. If the Participant desiring to sell shall fail to consummate such a sale to any third party within 180 days after such Participant shall become entitled hereunder to sell to such third party, no sale or transfer may thereafter be made by such Participant without again complying with the provisions of this Clause 15.3. 15.4 Exceptions to First Offer Right Clause 15.3 shall not apply to the following transfers:- - -47- 15.4.1 transfer by a Participant of all or any part of its interest in this Agreement or any Participating Interest to an Affiliate; 15.4.2 corporate merger, consolidation, amalgamation or reorganisation of a Participant for the purposes of a financial reconstruction; 15.4.3 transfers among Participants which are expressly required or permitted by the provisions of this Agreement. 16. GENERAL PROVISIONS 16.1 Notices All notices, payments and other required communications hereunder ("Notice") between the parties shall be in writing and shall be addressed, respectively, as follows: All Notices shall be given (a) by personal delivery to each of the other parties, or (b) by electronic communication, with a confirmation sent by registered or certified mail, return receipt requested. All Notices shall be effective and shall be deemed delivered (i) if by personal delivery on the date of delivery and (ii) if by electronic communication on the date of receipt of the electronic communication. A party may change its address from time to time by Notice to the other parties. If to PT-FI: [_________________________________ __________________________________ __________________________________ __________________________________ Attention: _________________________________] If to P.T.-RTZ: [_________________________________ __________________________________ __________________________________ __________________________________ Attention: The Company Secretary _________________________________] 16.2 Waiver The failure of a party to insist on the strict performance of any provision of this Agreement or to exercise any right, power or remedy upon a breach hereof shall not constitute a waiver of any provision of this Agreement or limit the party's right thereafter to enforce any provision or exercise any right. 16.3 Modification No modification or amendment of this Agreement shall be valid unless made in writing and duly signed by all the parties. If, in the - -48- event of experience gained through the operation of this Agreement, the parties agree that application of any of its provisions results in a material inequity to (a) party(ies), then the parties agree that they will meet to discuss possible changes in such provision(s) proposed by one or more parties as a means of obviating such inequity. 16.4 Force Majeure 16.4.1 The obligations of a Participant, other than the payment of money provided hereunder, shall be suspended and any period of time mentioned in this Agreement shall be extended to the extent and for the period that performance or the ability of one or both of the Participants to exercise rights or carry out obligations or otherwise act as permitted by or in accordance with this Agreement is prevented by any cause, whether foreseeable or unforeseeable, beyond its reasonable control, including, without limitation, labour disputes (however arising and whether or not employee demands are reasonable or within the power of the Participant to grant); acts of God; laws, regulations, orders, proclamations, instructions or requests of any government or governmental entity; judgments or orders of any court; inability to obtain on reasonably acceptable terms any public or private exploration or exploitation, right, licence, permit or concession; curtailment or suspension of activities to remedy or avoid an actual or alleged, present or prospective violation of federal, state or local environmental standards; acts of war or conditions arising out of or attributable to war, whether declared or undeclared; riot, civil strife, insurrection or rebellion; fire, explosion, earthquake, storm, flood, sink holes, drought or other adverse weather condition; delay or failure by suppliers or transporters of materials, parts supplies, services or equipment or by contractors or sub-contractors' shortage of, or inability to obtain, labour, transportation, materials, machinery, equipment, supplies, utilities, or services; accidents; breakdown of equipment, machinery or facilities; or any other cause, whether similar or dissimilar to the foregoing. The affected Participant shall promptly give notice to the other Participant of the suspension of performance, stating therein the nature of the suspension, the reasons therefor and the expected duration thereof. The affected Participant shall resume performance as soon as reasonably possible. During the period of suspension, the obligations of the Participants to advance funds pursuant to paragraph 10.3 of the Financial and Accounting Procedures shall be reduced to levels consistent with the Joint Operations which are capable of being carried on in the circumstances. - -49- 16.4.2 Should any of the causes referred to in Clause 16.4.1 result in the actual production of Products from Enterprise Operations (other than Greenfield Projects) in Contract Area Block A in any Year (the "Actual Production") falling short of the planned production of such Products for the Year as shown in the then current programme and budget (which, in the case of Joint Operations, shall be the Approved Programme and Budget) for that Year (the "Planned Production") , the Product Schedule shall be amended as follows: (i) The scheduled production of Products for the Year in question as shown in the Product Schedule shall be reduced in accordance with the following formula: A D = - x C B where D is the revised scheduled production for the Year in question, A is the Actual Production, B is the Planned Production and C is the scheduled production of Products for that Year as shown in the Product Schedule prior to the occurrence of the cause and the production which is D shall be substituted in the Product Schedule as the scheduled production of Products for the Year in question. (ii) The shortfall in production being C - D (as defined in (i) above) shall be added to the final Year of production as shown by the Product Schedule prior to the occurrence of the cause or causes. If, in the final Year, the scheduled production as so revised would exceed the production which would result from a daily rate of 118,000 tonnes per day, the excess shall be carried forward to the subsequent Year (and the Cut-off Date shall be extended accordingly) and appropriate adjustments made to the production of recovered metal for that Year. 16.5 Governing Law 16.5.1 This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 16.5.2 Each of the parties irrevocably agrees that any suit, action or proceedings (together in this Clause 16.5 referred to as "Proceedings") arising out of or in connection with this Agreement shall be brought in any United States Federal or New York State court sitting in the borough of Manhattan, City of New York and, except for the purposes of or Proceedings regarding enforcement, which may take place in any relevant jurisdiction, submits to the exclusive jurisdiction of the courts in such borough. - -50- 16.5.3 Each of the parties irrevocably waives any objection which it may have now or hereafter to the laying of venue of any Proceedings in any such court as is referred to in this Clause 16.5 and any claim that any such Proceedings have been brought in an inconvenient forum. Each of the parties hereby to the fullest extent permitted by law waives any right it may have to have any Proceedings take the form of a trial by jury. 16.5.4 Each of the parties hereby irrevocably designates, appoints and empowers, in the case of the United States Federal Courts in New York and the New York State courts, CT Corporation System, having offices at the date hereof at 1633 Broadway, New York, N.Y. 10019, U.S.A. to receive, for and on behalf of itself, service of process in such jurisdictions in any legal action or proceedings with respect to this Agreement or any judgment in connection herewith and agrees that failure by such process agent to give notice of such service of process to it shall not impair or affect the validity of such service or of any judgment based thereon. 16.6 Penalties It is agreed between the parties that, while the percentage and rate set out in Clause 6.3.2.3 and paragraph 10.3.3 of the Financial and Accounting Procedures are considered fair and reasonable and a genuine pre-estimate of the loss to the non-Defaulting Participants, if it should be found that either of such percentage and rate be unenforceable as going beyond what is fair and reasonable or a genuine pre-estimate in the circumstances and if by substituting a different percentage or rate for the percentage or rate set out in Clause 6.3.2.3 or paragraph 10.3.3 of the Financial and Accounting Procedures it would be enforceable, then there shall be substituted such next high percentage or rate as shall render Clause 6.3.2.3 or paragraph 10.3.3 of the Financial and Accounting Procedures valid and enforceable. 16.7 Rule Against Perpetuities Any right or option to acquire any interest in real or personal property under this Agreement must be exercised, if at all, so as to vest such interest in the acquirer within twenty-one years less one day after the death of the last known descendent of Queen Victoria alive on the Effective Date. 16.8 Further Assurances Each of the Participants agrees that it shall take from time to time such actions and sign or execute such additional instruments as may be reasonably necessary or convenient to implement and carry out the intent and purpose of this Agreement. - -51- 16.9 Confidentiality and Public Statements Except as otherwise provided in this Clause 16.9, the terms and conditions of this Agreement, and all data, reports, records and other information of any kind whatsoever developed or acquired by any Participant in connection with this Participation, shall be treated by the Participants as confidential (hereinafter called "Confidential Information"), and no Participant shall reveal or otherwise disclose such Confidential Information to third parties without the prior written consent of the other Participant(s). The foregoing restrictions shall not apply to the disclosure of Confidential Information pursuant to the terms of the COW or the request of the Government, the laws, rules and regulations administered by the Securities & Exchange Commission or the rules of any stock or securities exchange on which the shares or stock of either of the Participants or any of its Affiliates may from time to time be listed or to any Affiliate (other than CRA Limited and any of its subsidiaries unless and until CRA Limited becomes a subsidiary of RTZ), to any public or private financing agency or institution, to any contractors or subcontractors which the Participants may engage and to employees and consultants of the Participants or to any third party to which a Participant contemplates the transfer, sale, assignment, encumbrance or other disposition of all or part of its Participating Interest pursuant to Clause 16; provided that in any such case only such Confidential Information as such third party shall have a legitimate business need to know shall be disclosed, and the person or company to whom disclosure is made shall first undertake in writing to protect the confidential nature of such information at least to the same extent as the parties are obligated under this Clause 16.9. In addition, (a) the foregoing restrictions shall not apply to Confidential Information which otherwise comes into the public domain and (b) notwithstanding anything to the contrary in this Clause 16.9, each Participant is permitted to use and disclose data arising from the Participation in its annual audited financial statements and notes thereto. In the event that a Participant is required to disclose Confidential Information to any government and appropriate agencies and departments thereof, to the extent required by law or in response to a legitimate request for such Confidential Information, the Participant so required shall immediately and prior to any disclosure notify the other Participants hereto of such requirement and the terms thereof prior to such submission. The provisions of this Clause 16.9 shall apply during the term of this Agreement and shall continue to apply to any Participant which forfeits, surrenders, assigns, transfers or otherwise disposes of its Participating Interest for one year following the date of such occurrence. - -52- Except as may be required by applicable law or any listing agreement with any national securities exchange or the rules of any stock exchange on which the shares or stock of either of the Participants or any of its Affiliates may from time to time be listed, no party to this Agreement shall issue any press release or make any public announcement or public disclosure with regard to the Participation or its financial performance or condition, including Confidential and non-Confidential Information, unless either (i) a draft of the proposed press release has been provided to the other party hereto at least twenty-four hours prior to its proposed release in order to permit such party to comment thereon or (ii) such press release or other public statement contains factual information (or discussion or analysis of or comment based upon such factual information) previously provided to such party by the other party provided that neither will present projections or forward-looking information that is attributed to the other party or any of its Affiliates without the prior written consent of the other party. 16.10 Entire Agreement; Successors and Assigns This Agreement, together with the Implementation Agreement and the other documents referred to therein, contains the entire understanding of the parties and supersedes all prior agreements and understandings between the parties relating to the subject matter hereof. This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties. 16.11 Severability If part of this Agreement is rendered illegal, invalid or unenforceable under applicable law, the remaining clauses of this Agreement shall continue in force. 16.12 Indonesian Law Waiver Each of the Participants waives those provisions of Article 1266 of the Civil Code of the Republic of Indonesia (if and to the extent that, notwithstanding Clause 16.5, that Article is applicable to this Agreement) which would otherwise require the order of a court as a precondition to termination of this Agreement. 16.13 Tax Covenant In recognition of the fact that the Participants and the transactions contemplated by this Agreement may be affected adversely over the life of the Chargeable Operations, by the interaction of the laws relating to Taxes under multiple taxing jurisdictions, the Participants agree that they will cooperate with a view to minimizing the adverse tax impact of the various jurisdictions on the Participants to the extent such can be accomplished without material adverse affect on the conduct of the Chargeable Operations and the other Participant. The Participants will consult and - -53- work together to ensure that neither party takes any action which prejudices the Tax position of the other. The Participants hereby agree that each will endeavour to make such adjustments in the way in which Chargeable Operations are conducted, or in the terms of this Agreement, or in their other relationships, as may be reasonably requested by the other Participant to avoid or minimize any adverse tax impact on such Participant while taking into account any adverse tax or operational impact on Chargeable Operations and on the other Participant. IN WITNESS WHEREOF the authorised representatives of the parties hereto have signed this Agreement as of the date first above written. - -54- SCHEDULE 1 Privatisation Agreements 1. Joint Venture Agreement dated as of March 11, 1993 between P.T. ALatieF Nusakarya Corporation ("ANC") and PT-FI (the "ALatief J.V. Agreement"). The ALatief J.V. Agreement provides for the sale and purchase of US$270 million of infrastructure assets consisting primarily of warehouses, a hotel, housing (single and multi-family and dormitories), and food service, medical, retail and recreational facilities by the end of 1995. Master Services Agreement, dated December 15, 1993 between Alatief Freeport Infrastructure Corporation ("AFIC") and PT- FI regarding the operation and management of certain non- mining infrastructure assets for the benefit of PT-FI, as amended April 15, 1994 and April 19, 1994. Master Services Agreement, dated August 11, 1994, between AFIC and PT-FI regarding the operation and management of certain non-mining infrastructure assets for the benefit of PT-FI. Master Services Agreement, dated August 11, 1994 between Alatief Freeport Hotel Corporation ("AFHC") and PT-FI regarding the provision of hotel management services for the Sheraton Inn at Timika. Management Contract, dated October 28, 1993 between PT-FI and Indo-Pacific Sheraton Limited regarding the management of the Sheraton Inn at Timika which was assigned by Indo- Pacific Sheraton Limited to Sheraton Overseas Management Corporation on October 28, 1993. By Assignment, dated August 11, 1994 PT-FI assigned its rights and obligations under such Contract and other hotel privatisation agreements to AFHC. As of April 1995, transactions involving the sale of approximately US$198 million of infrastructure assets have been closed with P.T. ALatief Freeport Infrastructure Company ("AFIC") purchasing approximately US$156 million and P.T. ALatief Freeport Hotel Company ("AFHC") purchasing US$42 million. AFIC and AFHC are each owned 2/3rds by ANC and 1/3rd by PT-FI. ANC and PT-FI are currently discussing amending the ALatief J.V. Agreement to add additional infrastructure assets, thereby increasing the total amount of the infrastructure sales provided for in the ALatief J.V. Agreement to approximately US$350-450 million, and to restructure financing for the transaction on more favourable terms. - -55- 2. Asset Purchase Agreement dated as of December 26, 1994 between P.T. Puncakjaya Power ("PTPJP") and PT-FI (the "Asset Purchase Agreement"). The Asset Purchase Agreement provides for the sale and purchase of US$215 million of infrastructure assets consisting primarily of electric power generation and transmission facilities by the end of 1995. Power Sales Agreement, dated as of December 27, 1994 between P.T. Puncakjaya Power ("Seller") and P.T. Freeport Indonesia Company ("Buyer") providing for Seller to make available, sell and deliver to Buyer and to certain designees of Buyer, and for Buyer to purchase from Seller, certain electric capacity and electricity. Operation, Maintenance and Management Agreement, dated and effective as of January 30, 1995, between P.T. Puncakjaya Power ("Owner") and P.T. Nusantara Power Services ("Operator") providing for Operator to furnish certain services to Owner on a cost reimburable basis for the operation, maintenance and management of the Mill Site Facility, the Timika Facility, the New Town Facility, the Milepost 38/39 Facility and the Port Site Facility. As of April 1995, transactions involving the sale of US$100 million of infrastructure assets had been closed. 3. Purchase and Sale Agreement dated as of March 22, 1995 between ANC, P&O Singapore Pte. Ltd., P.T. ALatief P&O Port Development Company and PT-FI (the "Purchase and Sale" Agreement"). Master Services Agreement, dated March 22, 1995 between P.T. Alatief P & O Port Development Company ("PTAPPDC") and PT-FI regarding the operation and management of the port, marine and logistics assets by PTAPPDC for the benefit of PT-FI. The Purchase and Sale Agreement provides for the purchase and sale of US$100 million of infrastructure assets consisting primarily of tugboats, motorised barges, wharfs and warehouses, cranes and other cargo handling equipment, concentrate drying equipment, heavy trucks and maintenance facilities. This transaction was closed on March 22, 1995. 4. Joint Venture Agreement dated as of March 18, 1994 among P.T. Airfast Indonesia, P.T. Giga Haksa and PT-FI (the "Aviation J.V. Agreement"). The Aviation J.V. Agreement provides for the sale and purchase of approximately US$48 million of infrastructure assets consisting primarily of aircraft and helicopters, spare parts and aviation support facilities by the end of 1995. - -56- The transaction is expected to close in 1995. 5. PT-FI is currently negotiating with an Indonesian company concerning the sale and purchase of infrastructure assets constituting essentially all of PT-FI's potable water treatment and distribution facilities and sewerage treatment and collection facilities. PT-FI expects to enter into agreements resulting in the closing of a sale of such assets in 1995 or 1996. 6. PT-FI is currently negotiating with an Indonesian company concerning the sale and purchase of infrastructure assets constituting essentially all of PT-FI's solid waste treatment, storage and disposal facilities. PT-FI expects to enter into agreements resulting in the closing of a sale of such assets in 1995 or 1996. 7. PT-FI is currently negotiating with certain Indonesian companies concerning the sale and purchase of infrastructure assets constituting a steel fabrication shop and industrial gases plant. PT-FI expects to enter into agreements resulting in the closing of a sale of such assets in 1995 or 1996. 8. PT-FI has filed, and expects to shortly receive approval for the formation of a service company tentatively named Mining Services Company International ("MSCI"). It is expected that in 1995 or 1996 MSCI will enter into agreements for the provision of certain mining related services to PT-FI, PT- IRJA, other related companies, and potentially third parties. It is not anticipated that any significant amount of assets will be transferred to the MSCI, although PT-FI personnel may be transferred to MSCI. - -57- SCHEDULE 2 Deed of Assignment of Interest in COW ASSIGNMENT OF INTEREST THIS AGREEMENT is made the day of 1995 between PT Freeport Indonesia Company, a corporation organised and existing under the laws of Indonesia (hereinafter referred to as the "Assignor") and PT-RTZ, a corporation organised and existing under the laws of Indonesia (hereinafter referred to as the "Assignee"). WHEREAS, the Assignor has a 100% undivided ownership interest in and to the Contract of Work made 30 December 1991 between the Minister of Mines and Energy of the Republic of Indonesia, acting for and on behalf of the Government of the Republic of Indonesia, and the Assignor (hereinafter referred to as the "Contract of Work"); AND WHEREAS, under the terms of the Contract of Work the Assignor is now conducting certain development, mining and processing activities in the Contract Area Block A (as defined in the Contract of Work) and is implementing a plan for expansion of the capacity of its facilities for treatment of ore mined from Contract Area Block A to a design rate of 118,000 metric tonnes per day (hereinafter, together with all assets and rights reserved to PT-FI pursuant to the terms of the Participation Agreement, referred to as the "Existing Project"); AND WHEREAS under the terms of a Participation Agreement made [ ] between the Assignor and the Assignee (hereinafter called the "Participation Agreement") the Assignee is entitled at this time to an assignment of a 40% undivided ownership interest in and to the Contract of Work subject to the rights and obligations of the parties in relation to the Existing Project, as set out in the Participation Agreement. NOW, THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements herein contained and subject to the terms and conditions hereinafter set out, the Parties hereto agree as follows: 1. The Assignor does hereby assign, set over, transfer and convey unto the Assignee a 40% undivided ownership interest in and to the Contract of Work and all benefit and advantage derived or to be derived therefrom (subject to the rights and obligations of the parties in relation to the Existing Project as set out in the Participation Agreement) (hereinafter called the "Assigned Interest") to have and to hold the same unto the Assignee on the terms, conditions and obligations contained in the Contract of Work insofar as they relate to the Assigned Interest. - -58- This Assignment is subject to all terms and conditions of the Participation Agreement. 2. The Assignee hereby accepts the assignment of the Assigned Interest and covenants and agrees that it shall, at all times hereafter be bound by, observe and perform all of the provisions of the Contract of Work to be observed and performed by the Assignor, insofar as they relate to the Assigned Interest, to the same extent as if the Assignee had been a party thereto in the place and stead of the Assignor in respect of the Assigned Interest. 3. PTFIC shall remain responsible to the Government of the Republic of Indonesia for the conduct of all operations under the Contract of Work and for all communications with the Government of the Republic of Indonesia under the Contract of Work on behalf of itself and PT-RTZ. 4. The undivided ownership interest in and to the Contract of Work as at the Effective Date after giving effect to the assignment of the Assigned Interest and subject to the rights and obligations of the parties in relation to the Existing Project as set out in the Participation Agreement shall be as follows: (i) PT Freeport Indonesia Company 60% (ii) PT-RTZ 40% 5. Each of the Assignor and the Assignee covenants and agrees with the other of them that at the request [and cost] of the other it will execute such further assurances and do all such further acts as may reasonably required for the purpose of vesting the Assigned Interest in the Assignee. 6. The address of the Assignee for notices shall be: [ ] 7. This Assignment shall enure to the benefit of and be binding on the Parties hereto and their respective successors and assigns. IN WITNESS WHEREOF the Parties have executed this Assignment on the date first stated above. PT FREEPORT INDONESIA COMPANY By: ........................................................... Title: President Director/Attorney-in-fact - -59- PT-RTZ By: ........................................................... Title: President Director/Attorney-in-fact - -60- SCHEDULE 3 Exceptions to Representations and Warranties A. PT-FI 4.1.2 None. 4.2.9 and 4.2.10 1. Assignment of the Contract of Work pursuant to the Trust Agreement dated as of May 15, 1970, as amended and restated, between PT-FI and First Trust, National Association (successor to Morgan Guaranty Trust Company of New York). 2. Assignment to Privatisation counterparties specified in Schedule 1 of rights to use, occupy and construct facilities on certain parcels of land on which infrastructure assets are situated which have been sold by PT-FI to such entities, and rights to pass over other land as reasonably necessary to gain ingress and egress to such parcels. B. P.T.-RTZ - -61- P.T. FREEPORT INDONESIA COMPANY By : _____________________________________ Its : _____________________________________ [P.T.-RTZ] By : _____________________________________ Its : _____________________________________ - -62- ANNEX A Product Schedule Recovered Metal in Concentrate Year Cu (mil. lbs) Au (000 oz.) Ag (000 oz.) 1995 1,029 1,318 2,872 1996 1,085 1,379 2,828 1997 1,140 1,791 2,969 1998 1,033 1,365 3,275 1999 1,165 1,503 3,822 2000 1,069 1,262 4,103 2001 1,132 1,397 3,943 2002 1,090 1,375 3,795 2003 1,082 1,610 4,045 2004 1,052 1,657 3,703 2005 1,082 1,695 3,730 2006 1,099 1,653 3,934 2007 1,099 1,631 4,045 2008 1,110 1,614 4,158 2009 1,107 1,589 4,203 2010 1,099 1,567 4,296 2011 1,049 1,269 4,138 2012 1,035 1,283 4,010 2013 1,066 1,471 4,268 2014 1,066 1,461 4,277 2015 1,057 1,493 4,156 2016 1,044 1,529 3,768 2017 1,008 1,589 3,359 2018 1,008 1,589 3,359 2019 1,024 1,589 3,396 2020 1,027 1,593 3,405 2021 219 344 716 TOTAL 28,076 39,616 98,573 - -63- ANNEX B Financial and Accounting Procedures 1. Accounting Definitions Terms which are not defined in this Annex shall have the meaning ascribed to them in the Agreement of which this Annex B is a part. 1.1 Definitions Applicable to Contract Area Block A and Contract Area Block B A. "AFE" means an authorisation for expenditures in relation to a capital expenditure project. B. "Capital Costs" means all expenditures incurred in connection with or allocable to a capital project including fully loaded labour, materials, equipment and contractors' costs, engineering, procurement, including freight costs and handling, construction and management costs, allocated owners' cost, infrastructure and logistic support, support costs, Taxes other than those imposed on net income of the Participants, general and administrative costs, land acquisition and preparation costs (if any), legal and regulatory costs, pre-stripping and pre-production costs, initial fill, spares and consumables, capitalised finance costs, and any associated working capital, but excluding depreciation, non-cash charges, interest (other than capitalised finance costs), payments in the nature of principal and interest under Privatisation Agreements, and accounting provisions and reserves. Capital Costs shall not include any Exploration Costs. C. "Chargeable Operations" means operations, including support activities, related to Mining and Processing of Minerals and marketing and delivery of Products produced from the Contract Area and excluding (i) any operations or activities of PT-FI not related to or associated with the Contract Area and (ii) any operations or activities of parties subject to the Privatisation Agreements to the extent that they are operations or activities of third parties unconnected with Enterprise Operations. D. "Close-down Costs" means all costs incurred in or allocable to Close-down, including without limitation, rehabilitation of the - -64- environment, the removal of buildings, equipment, infrastructure and other tangible property, costs incurred in terminating equipment, supply, service and employment contracts, and costs incurred in terminating and surrendering the COW. Close- down Costs shall include all such costs incurred within the period ten Years prior to the Anticipated Close-down Date and prior to such date all such costs shall be treated as Operating Costs. E. "Development" means all preparation for the removal and recovery of Products, including the construction or installation of a mine or heap leach facilities, ore and waste handling facilities, mining equipment, or any other improvement to be used for Mining, handling, transportation or milling of Minerals or other processing or marketing of Products, including infrastructure and logistic support facilities associated therewith. It is acknowledged that certain expenditures may involve activities that relate to both Exploration and Development. In such cases, the primary purpose of the activity related to such expenditure shall govern its classification as Exploration or Development. F. "Eastern Minerals COW" means the contract of work dated 15 August 1994 made between the Government and P.T. IRJA Eastern Minerals Corporation with respect to the Contract Area as therein defined. G. "Exploration" means all activities, excluding Development and Mining, directed towards ascertaining or appraising the existence, location, quantity, quality or commercial value of deposits of Minerals (other than the 10-K Reserves) and the feasibility of Development or Mining in relation to those deposits. It is acknowledged that certain expenditures may involve activities that relate to both Exploration and Development. In such cases, the primary purpose of the activity related to such expenditure shall govern its classification as Exploration or Development. H. "Exploration Costs" means all labour, supplies, equipment, contract costs and other costs directly attributable or allocable to Exploration including fully loaded labour, logistical support costs, facility and other miscellaneous costs required to support these activities. I. "Operating Costs" means the aggregate of: (a) expenditure, adjusted for changes in inventory, that is either directly incurred or allocable to Chargeable Operations, - -65- including but not limited to production, maintenance and repair costs, logistical support and freight and handling costs, infrastructure and support facility costs (including similar expenditures under Privatisation Agreements), Taxes (other than those imposed on net income of the Participants), and general and administrative costs of the kind identified in PT-FI's annual financial statements for the period ended 31 December 1994 under the heading "General and Administrative Costs", but excluding depreciation, non-cash charges, interest, payments in the nature of principal and interest under Privatisation Agreements, and accounting provisions and reserves; (b) Replacement Capital Costs in carrying out Chargeable Operations (including such expenditures under Privatisation Agreements); and (c) the cash element of specific accounting provisions incurred in the normal course of business in conducting Chargeable Operations . Exploration Costs, Taxes on net income of the Participants, and financing costs in connection with any financing arrangement entered into separately by a Participant (including without limitation, payments in the nature of principal and interest under Privatisation Agreements undertaken separately) shall not be treated as Operating Costs incurred in carrying out Chargeable Operations. Financing costs (including without limitation, payments in the nature of principal and interest under Privatisation Agreements) in connection with any financing arrangement entered into jointly by the Participants shall be included in Operating Costs. J. "Replacement Capital Costs" means Capital Costs incurred other than for Expansion, a Greenfield Project or a Sole Risk Venture. K. "Sales Revenues" means the value of Products sold based on actual prices realised (or which would have been realised but for any hedging and other price protection activities), net of smelting and refining charges, royalties and other selling expenses. - -66- 1.2 Definitions Applicable to Approved Expansion Projects Only A. "Expansion Share of Costs" in any Year means that proportion of the Operating Costs in respect of Contract Area Block A in that Year which is represented by a fraction the numerator of which is the Incremental Expansion Revenues for that Year and the denominator of which is Total Sales Revenues from Contract Area Block A in that Year, and in any Year where Incremental Expansion Revenues is nil or deemed to be nil, "Expansion Share of Costs" shall be nil or be deemed to be nil. Operating Costs and Sales Revenues from Greenfield Projects and Sole Risk Ventures shall be excluded from this calculation. B. "Incremental Expansion Cashflow" in any Year means Incremental Expansion Revenues in that Year less Expansion Share of Costs in that Year. C. "Incremental Expansion Revenues" in any Year means the Sales Revenues in respect of Incremental Production sold in that Year or part thereof in which sales of Incremental Production occurred, with sales from inventory deemed to be sold on a first-in, first-out basis, and any negative value of "Incremental Expansion Revenues" in any Year shall be deemed to be nil with respect to such period but shall be carried forward to the next Year in which there are Incremental Expansion Revenues. D. "Incremental Production" in any Year means the excess of: (i) the actual production in that Year of Products from Contract Area Block A, including actual production resulting from Approved Expansion Projects, but excluding actual production resulting from Greenfield Projects and Sole Risk Ventures; over (ii) the scheduled production of Products for such Year as shown in the Product Schedule (as such schedule may be adjusted pursuant to Clause 16.4.2 of the Agreement). Production of Products from Contract Area Block A at any time prior to the Sharing Commencement Date shall not be treated as Incremental Production. - -67- E. "Sharing Commencement Date" means the date following the commissioning of the first Approved Expansion Project on which the first Sales Revenues from such project are accrued. F. "Total Sales Revenues" in any Year means the weighted average Sales Revenues of all Products produced from Contract Area Block A (excluding Greenfield Projects and Sole Risk Ventures) sold in that Year. 2. Memorandum Equity Accounts A separate Memorandum Equity Account will be established by the Operator for each Participant for each of Contract Area Block A and Contract Area Block B. Each such Memorandum Equity Account shall be credited with such Participant's contribution to Capital Costs (other than Replacement Capital Costs and Capital Costs for Sole Risk Ventures) attributable to such Contract Area Block. The Memorandum Equity Account of each Participant shall be credited with such Participant's contributions to Capital Costs, regardless of how such contributions were financed by a Participant (including funding to PT-FI under the RTZ Loan), but such Memorandum Equity Accounts shall not be credited for contributions to Capital Costs financed jointly by the Participants through project financing which encumbers the interests of both Participants. Specifically: (A) Approved Expansion Projects up to $750,000,000. The first $750,000,000 of Capital Costs incurred pursuant to AFE's for Approved Expansion Projects shall be credited 60% to PT-FI's Memorandum Equity Account and 40% to P.T.-RTZ'S Memorandum Equity Account, with funding for PT-FI's proportionate share of such Capital Costs being provided pursuant to the RTZ Loan. (B) Approved Expansion Projects in Excess of $750,000,000. All Capital Costs incurred pursuant to AFE's for Approved Expansion Projects in excess of $750,000,000 shall be credited to the Memorandum Equity Account of each Participant in proportion to its contribution to such Capital Costs. - -68- 3. Exploration Activities 3.1 General Separate accounts will be maintained for Exploration Costs incurred in respect of Contract Area Block A and Contract Area Block B and in respect of the Contract Area as defined in the Eastern Minerals COW ("Eastern Area"). 3.2 Joint Operations Exploration Costs P.T.-RTZ will pay all Exploration Costs approved by the relevant Exploration Committee for Exploration in Contract Area Block A and Contract Area Block B until the Exploration Obligation has been satisfied, including the expenditure of not less than $40,000,000 in respect of Contract Area Block A. Thereafter, the Participants will pay all Exploration Costs in proportion to their respective Participating Interests in Contract Area Block A and Contract Area Block B. 3.3 Exploration Costs for Sole Risk Ventures All Exploration Costs for a Sole Risk Venture in Exploration shall be paid by the Participant undertaking such Sole Risk Venture. 3.4 Statements of Exploration Costs Monthly statements of Joint Operations Exploration Costs and Sole Risk Venture Exploration Costs will be prepared by the Operator and submitted to the Exploration Committee or the Participant undertaking the Sole Risk Venture, as appropriate, so that actual Exploration Costs may be monitored. 3.5 Payment for Exploration Costs Exploration Costs will be included in the monthly cash calls made pursuant to paragraph 10.3 of this Annex. 4. Feasibility Studies 4.1 General Separate accounts will be maintained for each Feasibility Study and will be reported by the Operator to the relevant Exploration Committee or Operating Committee, or to the Participant undertaking a Sole Risk Venture, as appropriate. 4.2 Joint Operations Feasibility Studies Prior to the date any AFE is approved as a result of a Feasibility Study, the costs of the Feasibility Study shall be Exploration Costs. In the event that an AFE is approved as a result of the Feasibility Study, then from and after the date that such AFE is approved, any additional Feasibility Study costs shall be Capital Costs of the project rather than Exploration Costs. - -69- 4.3 Sole Risk Feasibility Studies All costs of a Feasibility Study of a Sole Risk Venture shall be paid by the Participant undertaking the Feasibility Study as a Sole Risk Venture. There shall however be no reimbursement to the non-participating Participant of previously incurred costs. 4.4 Statements of Feasibility Study Costs Monthly statements of the costs of each Joint Operations Feasibility Study and Sole Risk Venture Feasibility Study will be prepared by the Operator and submitted to the relevant Exploration Committee or Operating Committee or the Participant undertaking the Sole Risk Venture, as appropriate, so that actual costs of Feasibility Study may be monitored. 4.5 Payment of Feasibility Study Costs The costs of each Feasibility Study will be included as Exploration Costs or, as appropriate, Capital Costs, in the monthly cash calls made pursuant to paragraph 10.3 of this Annex. 5. Joint Operations in Contract Area Block A 5.1 Pre-Expansion Period "Pre-Expansion Period" means the period commencing on the Effective Date and continuing until the date that the first Approved Expansion Project in Contract Area Block A has been approved by the boards of directors of FCX, PT-FI, and P.T.-RTZ or, pursuant to Clause 10.3, approved by the board of directors of P.T.-RTZ. During the Pre-Expansion Period, all revenues from and all Capital Costs and Operating Costs in respect of Contract Area Block A are attributable 100% to PT-FI except for revenues, Capital Costs and Operating Costs in respect of Joint Operations Greenfield Projects (as to which paragraphs 5.4 and 6 of this Annex shall apply) and Sole Risk Ventures undertaken by P.T.-RTZ, if any (as to which, subject to any express provision to the contrary in this Annex or the Agreement, P.T.- RTZ shall be entitled to all revenues attributable). 5.2 Development Period 5.2.1 "Development Period" means the period commencing with the date that the first Approved Expansion Project in Contract Area Block A has been approved by the boards of directors of FCX, PT-FI and P.T.-RTZ or, pursuant to Clause 10.3, approved by the board of directors of P.T.-RTZ and continuing until the Sharing Commencement Date. During the Development Period, all revenues from Contract Area Block A are attributable 100% to PT-FI except for revenues in - -70- respect of Joint Operations Greenfield Projects (as to which paragraphs 5.4 and 6 of this Annex shall apply) and Sole Risk Ventures undertaken by P.T.-RTZ, if any (as to which, subject to any express provision to the contrary in this Annex or the Agreement, P.T.-RTZ shall be entitled to all revenues attributable). During the Development Period, all Capital Costs and all Operating Costs in respect of Contract Area Block A are attributable 100% to PT-FI except for: (i) all Capital Costs attributable to Approved Expansion Projects, as to which the provisions of 5.2.2 of this Annex shall apply (ii) all Capital Costs and Operating Costs attributable to or in respect of Joint Operations Greenfield Projects as to which the provisions of paragraphs 5.4 and 6 of this Annex shall apply (iii) all costs of Sole Risk Ventures undertaken by P.T.-RTZ, all of which shall, subject to any express provision to the contrary in this Annex or the Agreement, belong to and be borne by P.T.-RTZ. 5.2.2 Approved Expansion Projects 5.2.2.1 General For each Approved Expansion Project, an AFE will be prepared detailing budgeted expenditures of Capital Costs anticipated to be incurred. Separate accounts will be maintained for each AFE. 5.2.2.2 Allocation of Approved Expansion Project Development Costs (a) Approved Expansion Projects up to $750,000,000 Until such time as aggregate Capital Costs for Approved Expansion Projects reach $750,000,000, these Capital Costs will be allocated to and be borne by the Participants in proportion to their respective Participating Interests in Contract Area Block A and PT- FI's share will be funded through the RTZ Loan. - -71- (b) Approved Expansion Projects in Excess of $750,000,000 Capital Costs for Approved Expansion Projects after aggregate Capital Costs for Approved Expansion Projects exceed $750,000,000 will be allocated to and be borne by the Participants in proportion to their respective Participating Interests in Contract Area Block A. 5.2.3 Statements of Approved Expansion Project Development Costs Monthly statements of Approved Expansion Project Development costs will be prepared by the Operator and submitted to the Operating Committee so that actual Development costs may be monitored. 5.2.4 Payment for Development Costs Payment for Development Costs will be included in the monthly cash calls made pursuant to paragraph 10.3 of this Annex. 5.3 Production Period 5.3.1 "Production Period" means the period commencing on the Sharing Commencement Date for the first Approved Expansion Project and continuing thereafter for so long as Joint Operations are producing Products from Contract Area Block A. During the Production Period, the revenues from Contract Area Block A shall be allocated between the Participants as follows: (a) until and including the Cut-off Date P.T.- RTZ shall be entitled to such share as is proportionate to its Participating Interest in Contract Area Block A of all Incremental Expansion Revenues and of revenues related to Joint Operations Greenfield Projects as provided in paragraphs 5.4 and 6 of this Annex (b) after the Cut-off Date, P.T.-RTZ shall be entitled to such share as is proportionate to its Participating Interest in Contract Area Block A of all revenues derived from Joint Operations in Contract Area Block A (c) P.T.-RTZ shall be entitled to all revenues attributable to Sole Risk Ventures undertaken by P.T.-RTZ - -72- (d) PT-FI shall be entitled, as between the Participants, to all revenues from Contract Area Block A other than those allocated to P.T.-RTZ pursuant to sub- paragraphs (a), (b) and (c) above. During the Production Period, the costs of or attributable to Contract Area Block A shall be allocated to and borne by the Participants as between themselves as follows: (i) until and including the Cut-off Date, P.T.-RTZ shall be obliged to contribute such share of the following costs as is proportionate to its Participating Interest in Contract Area Block A and of no other costs of or attributable to Contract Area Block A: (A) Expansion Share of Costs (B) Capital Costs of Approved Expansion Projects only (C) Joint Operations Greenfield Projects (ii) after the Cut-off Date, P.T.-RTZ shall be obliged to contribute such share of Operating Costs and of Capital Costs of Joint Operations in Contract Area Block A other than Sole Risk Ventures as is proportionate to its Participating Interest in Contract Area Block A (iii) the costs of or attributable to each Sole Risk Venture in Contract Area Block A undertaken by P.T.-RTZ shall be allocated to and borne by P.T.-RTZ (iv) all costs of or attributable to operations in Contract Area Block A other than those allocated to and borne by P.T.-RTZ pursuant to sub-paragraphs (i), (ii) or (iii) above shall, as between the Participants, be allocated to and borne by PT-FI. 5.3.2 General Each month during the Production Period prior to the Cut-off Date, Incremental Expansion Cashflow shall be computed by the Operator and distributed to the Participants in proportion to their Participating Interests in Contract Area Block A; provided however, PT-FI shall assign to [RTZ UK Lender] all of its interest in such distributions of Incremental Expansion Cashflow pursuant to the RTZ Loan Agreement until such RTZ Loan has been repaid (including, for the avoidance of doubt, all interest under the RTZ - -73- Loan Agreement). Each month during the Production Period from and after the Cut-off Date, all revenues and costs in respect of Joint Operations in Contract Area Block A shall be considered in determining the amount to be distributed to the Participants in proportion to their Participating Interests in Contract Area Block A. (a) Incremental Expansion Revenue Each month during the Production Period, Incremental Expansion Revenue will be computed by the Operator and included in the computation of Incremental Expansion Cashflow for such month. (b) Expansion Share of Costs Each month during the Production Period, Expansion Share of Costs will be computed by the Operator and included in the computation of Incremental Expansion Cashflow for such month. (c) Incremental Expansion Cashflow Each month during the Production Period, Incremental Expansion Cashflow will be computed by the Operator and distributed to the Participants or, in the case of PT-FI, its assignee for the time being, in the proportions attributable to each not later than the 20th business day after the end of the month. The amount distributed will be based on the best estimate of Incremental Expansion Revenue less Expansion Share of Costs for such month. (d) Statements of Incremental Expansion Cashflow Monthly statements will be prepared by the Operator showing details of the Incremental Expansion Cashflow computation. A copy of the statements will be distributed to the Participants not later than the 20th business day after the end of the month. (e) Adjustment Any adjustment that is determined to be required at any time shall be included in the next monthly statement. (f) Annual Adjustment Not later than 45 business days after the end of each Year during the Production Period, a statement of the previous Year's Incremental Expansion Cashflow shall be prepared by the Operator and distributed. If the annual settlement statement indicates an overpayment of Incremental Expansion Cashflow, each Participant shall pay the Operator its share of such overpayment within 30 - -74- business days. If the annual settlement statement indicates an underpayment of Incremental Expansion Cashflow, the Operator shall pay to each Participant its share of such underpayment within 30 business days. 5.4 Joint Operations Greenfield Projects in Contract Area Block A Joint Operations Greenfield Projects in Contract Area Block A will be accounted for in a manner comparable to that provided in paragraph 6 of this Annex in respect of Joint Operations in Contract Area Block B. All costs, including allocable costs, of and revenue related to Greenfield Projects in Contract Area Block A will be excluded from costs of and revenues derived from other operations in Contract Area Block A. 6. Joint Operations in Contract Area Block B 6.1 Development Phase "Development Phase" means the period commencing with the date on which the first Joint Operations Greenfield Project in Contract Area Block B has been approved by the boards of directors of PT-FI and P.T.-RTZ and continuing until the date following commissioning of such project on which the first Sales Revenues from such project are accrued. 6.1.1 General For each Joint Operations Development project, an AFE will be prepared by the Operator detailing budgeted expenditures of Capital Costs anticipated to be incurred. Separate accounts will be maintained for each AFE. 6.1.2 Allocation of Joint Operations Development Costs All Capital Costs incurred in Joint Operations in Contract Area Block B will be allocated to and borne by the Participants in proportion to their respective Participating Interests in Contract Area Block B and included in monthly cash calls made pursuant to paragraph 10.3 of this Annex. 6.1.3 Statements of Development Costs Monthly statements will be prepared by the Operator showing details of Joint Operations Development costs. These statements will be submitted to the Operating Committee not later than the 20th business day after the end of the month so that actual Joint Operations Development costs may be monitored. 6.1.4 Payment for Development Costs Payment for Development costs will be included in the monthly cash calls made pursuant to paragraph 10.3 of this Annex. - -75- 6.2 Production Phase "Production Phase" means the period commencing on the date following commissioning of the first Joint Operations Greenfield Project on which the first Sales Revenues from such project are accrued and continuing for so long as Joint Operations are producing Products from Contract Area Block B. 6.2.1 General During the Production Phase, all revenues and costs in respect of Joint Operations in Contract Area Block B shall be allocated to and be borne by the Participants in proportion to their Participating Interests in Contract Area Block B. All revenues and costs in respect of Joint Operations in Contract Area Block B shall be considered in determining the amount to be distributed to the Participants in proportion to their respective Participating Interests in Contract Area Block B. (a) Revenue Each month during the Production Phase, the revenues that result from Joint Operations in Contract Area Block B will be computed by the Operator and included in the computation of cashflow from Joint Operations in Contract Area Block B for such month. (b) Operating Costs Each month during the Production Phase, the Operating Costs that result from Joint Operations in Contract Area Block B will be computed by the Operator and included in the computation of cashflow from Joint Operations in Contract Area Block B for such month. (c) Cashflow Each month during the Production Phase, the cashflow will be computed by the Operator by subtracting Operating Costs that result from Joint Operations in Contract Area Block B from revenues that result from Joint Operations in Contract Area Block B and the net amount of this calculation will be distributed to the Participants in the proportions to which they are entitled not later than the 20th business day after the end of the month. The amount distributed will be based on the best estimate of revenues and Operating Costs from Contract Area Block B for such month. (d) Statements of Cashflow Monthly statements will be prepared by the Operator showing details of the cashflow computation and delivered to the Participants not later than the 20th business day after the end of the month. - -76- (e) Adjustment Any adjustment that is determined to be required at any time shall be included in the next monthly statement. 7. Accounting for Sole Risk Ventures 7.1 Conduct of Operations Upon the establishment of a Sole Risk Venture, the Operator, as determined pursuant to the Agreement, or some other entity selected as operator of the Sole Risk Venture in accordance with the Agreement (also in this Annex referred to as the Operator), will be responsible for the conduct of the operations of such venture, including its accounting requirements, and will be paid a reasonable fee for such services. 7.2 Determination of Costs and Revenues Separate accounts will be maintained for each Sole Risk Venture. All costs, including allocable costs, of and revenue related to Sole Risk Ventures will be excluded from the costs of and revenues derived from Enterprise Operations. 7.3 Use of PT-FI Available Assets To the extent that the Sole Risk Venture requires the use of PT-FI Available Assets and PT-FI support services, and the use of these assets and support services does not prejudice then or later the conduct of Enterprise Operations, PT-FI will make available and charge to the Sole Risk Venture the direct and allocable costs of providing such assets and services. 7.4 Sole Risk Venture Revenues and Costs All revenues and costs derived from any Sole Risk Venture will be directly attributed by the Operator to the Participant undertaking the Sole Risk Venture. The net amount of revenues less costs will be included in the monthly cash call made pursuant to paragraph 10.3 of this Annex for settlement (in the case of a negative amount) or distribution (in the case of a positive amount) to the Participant undertaking the Sole Risk Venture as appropriate. 7.5 Sole Risk Venture Reports The Operator will summarise each month all costs, including charges associated with the use of PT-FI Available Assets and support services, and revenues derived from the Sole Risk Venture during that month and deliver this report to the Participant undertaking the Sole Risk Venture not later than the 20th business day after the end of the month. 7.6 Programmes and Budgets Programme and Budgets for Sole Risk Ventures shall be approved and administered in a manner comparable to that provided in paragraph 10.1 of this Annex. - -77- 7.7 Co-operation Each Participant shall provide in a timely manner to the Operator all information that is within such Participant's knowledge, possession or control which the Operator may require in order to perform its accounting responsibilities for Sole Risk Ventures. If the Operator is not PT-FI, the Operator shall provide in a timely manner to PT-FI all information that is within such Operator's knowledge, possession or control which PT-FI may require in connection with fulfilling its obligations under the COW. 8. Accounting for Hedging Activities The revenues allocated to the Participants shall be adjusted to reflect the effect of any hedging and other price protection activities authorised by the Participants pursuant to Clause 9.2.5 of the Agreement. Prior to entering into any hedging or other price protection activities authorised in writing by any Participant, the Participant authorising such activities shall make appropriate arrangements, satisfactory to the Operator, whereby the Operator is protected from and assured that it will never be required to use its own funds in connection with the placing or maintaining of any such hedging or other price protection activities. 9. Accounting Records, Inspection of Books 9.1 Required Records & Accounts (A) The Operator shall keep comprehensive and accurate records and accounts of all Exploration Costs, Operating Costs, costs in respect of Feasibility Studies, and costs in respect of Development which are capable of separate identification, with respect to: (i) Approved Expansion Projects, (ii) Joint Operations with respect to Contract Area Block A, (iii) Joint Operations Greenfield Projects with respect to Contract Area Block A, (iv) Joint Operations with respect to Contract Area Block B, (v) Sole Risk Ventures, - -78- (vi) Chargeable Operations and any other operations within the Contract Area any part of the costs of which are borne by each Participant. The costs of support and infrastructure facilities and activities shall be allocated to the activities for which they are utilised. The costs of support and infrastructure facilities and activities which are located in one Contract Area Block, but utilised in support of activities in one or more Contract Area Block, shall be allocated to the activities in the Contract Area Blocks in accordance with actual utilisation. (B) The records and accounts in respect of activities in Contract Area Block A shall be capable of identifying Incremental Expansion Revenue and other revenues, those attributable to Joint Operations other than Approved Expansion Projects and those attributable to all other activities in Contract Area Block A, and costs attributable to the activities, sub- divided as above. The records and accounts in respect of activities in Contract Area Block B shall show separately the costs and revenues of each project. Activity attributable to Sole Risk Ventures by either Participant within the Contract Area shall likewise be separately identifiable within the records and accounts. The records and accounts in respect of Greenfield Projects in Contract Area Block A, activities in Contract Area Block B and Sole Risk Ventures will separately identify direct costs of these projects from costs otherwise allocated thereto. (C) All records and accounts referred to above shall be prepared and maintained in accordance with generally accepted accounting principles in the United States. Accordingly, revenues recognised and costs incurred shall include, in the normal course of business, accruals to appropriately reflect the operations of the business conducted during a given month or year. All accounting terms used in this Annex will, except to the extent otherwise expressly provided for, be determined in accordance with generally accepted accounting principles in the United States. - -79- (D) Subject to compliance with the express provisions of this Annex, the Operator's basic accounting systems and accounting practices, policies and procedures will apply. (E) All such records and accounts shall be retained for a period of 10 years or as required for compliance with tax or other regulatory requirements or as otherwise agreed to by the Participants. 9.2 Audits (A) The Operator shall order an annual examination of the accounting and financial records kept by it in respect of activities in the Contract Area for each Year. (B) The audits shall be conducted by a firm of accountants of international standing selected by the Operator and approved by the Operating Committee and such accountants shall provide certification that the records and accounts have been properly maintained in accordance with the provisions of this Agreement and that the revenues and costs have been properly calculated and allocated to the Participants in accordance with the provisions of this Annex and the Agreement. 9.3 Right of Participants to Inspect Records Without prejudice to any other provision of this Annex or the Agreement, representatives of each Participant (including for this purpose its accountants or another appointed firm of accountants) shall be entitled upon reasonable prior notice at all reasonable times during normal working hours to inspect and obtain copies of all documents, records and accounts under the control of the Operator relating to Enterprise Operations or the Participation provided always that the frequency and duration of inspections shall be without undue hindrance to the proper conduct of Enterprise Operations or the activities of the Operator. Without prejudice to the above, but subject to the proviso, the Operator shall also give to the Participants and their accountants during normal working hours such access to the Operator's books and records and such explanation of the same as the Participants or their accountants may reasonably require in order to verify the revenues from Sole Risk Ventures undertaken by such Participants, Contract Area Block B, Incremental Expansion Cashflow, Joint Operations Greenfield Projects in Contract Area Block A and, after the Cut- off Date, revenues from Joint Operations in the Contract Area and costs attributable to the same. - -80- 9.4 Right of Participants to Conduct Audit (A) Without prejudice to any other provision of this Annex or the Agreement, representatives of each Participant (including for this purpose its accountants or another appointed firm of accountants) will be entitled, upon reasonable notice and at its own cost, to conduct an audit of the accounting and financial records of operations to which these Financial and Accounting Procedures apply for any Year, provided, however, that any such audit shall be conducted within eighteen months after the end of the Year to which the audit pertains and any claim for an adjustment must be made within thirty-six months after the end of the Year to which such adjustment pertains. (B) Should such audit reveal an alleged error in the statement of revenues and costs or in the calculation of the revenues and costs allocated to each Participant, notice of the alleged error shall be given promptly to each Participant and the Participants shall thereupon use all reasonable endeavours to reconcile any differences. (C) Should the Participants be unable to reconcile the differences to their mutual satisfaction within a period of 60 days following the notice referred to above, the dispute shall be referred to an independent firm of accountants of international standing appointed by agreement between the Participants or in default of such agreement within a period of 30 days following the expiry of the period of 60 days referred to above, by the President for the time being of the American Institute of Certified Public Accountants on the application of either of the Participants. (D) Such independent firm of accountants shall act as an expert and not as an arbitrator and it shall be directed to find for one Participant or the other. Its costs shall be borne by the Participant losing the issue in question and its determination shall be final and binding upon the Participants and the Operator. (E) If it is agreed between the Participants or determined by the expert that an error has been made to the calculation of the revenues and costs from operations to which these Financial and Accounting Procedures apply, such payments or reimbursements as shall be appropriate to correct such error shall be made by the Participants and the Operator shall make any and all necessary entries and - -81- corrections to the relevant Memorandum Equity Accounts of each Participant. 9.5 Fair clause The Participants agree that if any of the methods for determining charges and credits applicable to operations under the Agreement set out above prove to be unfair or inequitable to either party, the Participants will in good faith endeavour to agree on changes deemed necessary. 10. Other Financial and Accounting Matters 10.1 Programmes and Budgets 10.1.1 Joint Operations Pursuant to Programmes and Budgets Joint Operations shall be conducted, expenses shall be incurred and Joint Account Assets shall be acquired only pursuant to Approved Programmes and Budgets. 10.1.2 Preparation of Programmes and Budgets The Operator shall, not less than one month prior to the Annual Budget Meeting (which shall be held annually in December as provided in Clause 8.6 of the Agreement), prepare and submit to the relevant Committee for recommendation to the boards of directors of the Participants for the next ensuing Budgetary Period separate proposed Programmes and Budgets for Exploration and for Development and Mining. Any Programme which includes the undertaking of an Approved Expansion Project (or the relevant part of it) shall be based upon the programme for implementation thereof contained in the Feasibility Study relating thereto. Each Programme and/or Budget, as proposed and approved, shall contain, as appropriate, a breakdown on a quarterly basis of the following: (a) a reasonably detailed description of the Joint Operations to be undertaken with respect to each of Contract Area Block A and Contract Area Block B; (b) an itemised estimate of the Capital Costs and Operating Costs to be incurred, distinguishing between Replacement Capital Costs and new Capital Costs and between Exploration and Development and Mining and between Contract Area Block A and Contract Area Block B; - -82- (c) itemised schedules of estimated production of Products; (d) itemised estimates of revenues; (e) estimates of the amounts and timing of expected cash requirements from the Participants; and (f) such other items as the Operator may deem necessary or desirable or as either Participant may reasonably require. 10.1.3 Review and Approval of Proposed Programmes and Budgets (a) At the Annual Budget Meeting, the relevant Exploration Committee or Operating Committee shall review the Operator's proposed Programme and Budget and either submit it unchanged to the boards of directors of PT-FI and P.T.-RTZ for their approval or instruct the Operator to make specified revisions and submit the revised proposal to such boards for their approval. (b) Revisions, modifications and amendments to Programmes and Budgets may be initiated by the Operator, the relevant Exploration or Operating Committee or the board of directors of PT-FI or P.T.-RTZ, provided that no material revision, modification or amendment shall be made without the approval of both such boards of directors. (c) Any Programme and Budget, or any revision modification and amendment thereto, shall be deemed to be approved by any board of directors which does not, within thirty days after receipt, disapprove the same and notify the other board of directors and relevant Exploration or Operating Committee of its disapproval (including explanation thereof in reasonable detail). (d) Except as otherwise specified in the Agreement or this Annex, unbudgeted AFEs, and budgeted AFEs in excess of amounts fixed from time to time by the relevant Exploration or Operating Committee, shall be submitted by the Operator and subject to the approval by such Committee, provided that any AFE which is in excess of amounts fixed from time to time by the boards of directors of PT-FI and P.T.-RTZ or which requires unbudgeted expenditure in excess of 5% of any Programme and Budget (whether individually or as part - -83- of a group of related expenditures) shall also be subject to the approval of such boards of directors in the manner set out in paragraph 10.1.3(c). (e) Except as provided in Clause 10.3 of the Agreement, should the board of directors of PT-FI or P.T.-RTZ disapprove any Programme and Budget or any revision, modification or amendment thereto, both boards of directors and the relevant Exploration Committee or Operation Committee shall endeavour in good faith to resolve the difference(s) and reach mutual agreement on the applicable Programme and Budget as soon as possible. 10.1.4 Budget Overruns; Programme Changes The Operator shall immediately notify the relevant Committee of any material departure from an Approved Programme and Budget. As soon as practicable following the Operator becoming aware that the costs to be incurred under an Approved Budget are likely to be exceeded by more than 10%, then unless such excess is directly caused by an emergency or unexpected expenditure made pursuant to paragraph 10.2 of this Annex or otherwise authorised by the Participants, the Operator shall prepare a revised Programme and Budget for that Year and submit it as soon as practicable to the relevant Committee for review, and if needed, for recommendation for approval by the boards of directors of the Participants. 10.2 Emergency or Unexpected Expenditures In case of emergency, the Operator may take such action it deems necessary to protect life, limb or property, to protect the Enterprise Operations or Sole Risk Ventures or to comply with law or government regulation. Likewise, the Operator may make expenditures for unexpected events which are beyond its reasonable control and which do not result from a breach by it of its standard of care. In the case of either an emergency or unexpected expenditures, the Operator shall promptly notify the Participants of the emergency or unexpected expenditure, and the Operator shall be reimbursed therefor by the Participants as provided in Clause 6.1 of the Agreement and this Annex. - -84- 10.3 Cash Calls 10.3.1 On the basis of the Approved Programme and Budget or revision thereof, the Operator shall submit to each Participant prior to the fifth business day of each calendar month, a billing for estimated cash requirements for the next following calendar month, taking into consideration any cash the Operator has on hand from Joint Operations and any timing differences of actual expenditures from the Approved Programme and Budget, and identifying the separate contribution obligations of each Participant in accordance with the provisions of this Annex and the Agreement and any reimbursement obligations under Clause 12 of the Agreement relating to Sole Risk Ventures. 10.3.2 Prior to the first business day of the month for which the funds are requested, each Participant shall pay to the Operator by wire transfer to the bank account designated by the Operator, its share of the estimated amount as is shown in the billing unless the share of the amount shown therein is manifestly incorrect. 10.3.3 Time is of the essence of payment of each billing. A Participant that fails to meet cash calls in the amount and at the times specified in this paragraph 10.3 shall be in default, and the amount of the defaulted cash call shall bear interest from the date due at an annual rate equal to 5% above LIBOR as published in the London Financial Times on the business day immediately prior to the date of default. 10.3.4 All funds in excess of immediate cash requirements shall be invested in interest-bearing accounts, for the benefit of the Participants provided that all funds representing the Exploration Obligation shall be so invested solely for the benefit of P.T.-RTZ. 10.3.5 Should the Operator be required to pay large sums of money on behalf of the Participants which were unforeseen at the time of providing the monthly cash call, the Operator may make written request for special advances which shall be payable not later than the fifth business day after receipt of such notice. - -85- 10.4 Close-down Costs 10.4.1 Close-down Costs directly attributable to a Sole Risk Venture shall be allocated to and borne by the Participant undertaking the Sole Risk Venture. 10.4.2 Notwithstanding any other provision to the contrary in this Annex or the Agreement but subject to paragraph 10.4.1 above, each Participant agrees to pay and shall be liable to pay in respect of Close-down, that proportion of Close-down Costs which the value of Products sold by or for such Participant over the life of the COW bears to the value of all Products sold by or for the Participants over the life of the COW. Final salvage shall be credited to the Participants in the same proportion as Close- down Costs are allocated to them. 10.4.3 For purposes of paragraph 10.4.2(b), "value" is determined by reference to the actual realised price of Products sold (or which would have been realised but for any price protection activities), adjusted for inflation, net of smelting and refining charges, royalties, and other selling expenses. EX-99 11 CREDIT FACILITY Dated 1995 P.T. FREEPORT INDONESIA COMPANY and [RTZ UK COMPANY] Credit Facility of up to $450,000,000 THIS AGREEMENT is made 1995 BETWEEN (1) P.T. FREEPORT INDONESIA COMPANY of [address] ("PT-FI") and (2) [RTZ UK Company] of 6 St. James's Square, London SW1Y 4LD, England (the "RTZ Lender") WHEREAS (A) By a Contract of Work dated 30 December 1991 made between The Government of the Republic of Indonesia (the "Government") and PT-FI, the Government appointed PT-FI as the sole contractor for the Government with respect to the Contract Area, as defined in the Contract of Work, with the sole rights to explore, mine, process, store, transport, market, sell and dispose of Products (as defined in the Contract of Work) in the Contract Area (defined as aforesaid) (B) By a participation agreement of even date herewith between PT-FI and [P.T.-RTZ], PT-FI and P.T.-RTZ agreed, inter alia, to participate in operations under the COW (as defined below) (C) RTZ Lender and P.T.-RTZ are both subsidiaries of The RTZ Corporation PLC (D) RTZ Lender has agreed to make available to PT-FI a loan facility of up to but not exceeding a maximum aggregate principal amount to be advanced of $450,000,000, repayment of which is to be discharged solely out of PT-FI's share of Incremental Expansion Cashflow (as defined below) IT IS AGREED as follows INTERPRETATION 1. (1) In this Agreement (a) "Additional Amounts" means such additional amounts as may be required, after the deduction or withholding of Applicable Taxes (including Applicable Taxes with respect to any Additional Amounts), to enable RTZ Lender to receive from PT-FI and retain an amount equal to the full amount stated to be payable to RTZ Lender under Clause 6 of this Agreement, subject to the limit on the rate of Applicable Taxes as a result of the proviso to the definition of "Applicable Taxes" (b) "Advance" means the principal amount of each borrowing by PT-FI under this Agreement 2 (c) "Advance Date" means, in relation to each Advance, the date specified as such in the relative Advance Request or, on and after the making thereof, the date on which it was made (d) "Advance Request" means a request, substantially in the form of Schedule 2 to this Agreement, made by PT-FI to RTZ Lender in accordance with Clause 5 for an Advance to be made by RTZ Lender to PT-FI under this Agreement (e) "Applicable Taxes" means all present and future Taxes (whether or not collectable by deduction or withholding) imposed in the Republic of Indonesia, the United States of America or any jurisdiction through or out of which such payment is made or any political subdivision or taxing authority thereof on any payment (other than of principal) by PT-FI to RTZ Lender under this Agreement (other than Taxes imposed, assessed, levied or collected on or with respect to the net income of RTZ Lender), provided that such Applicable Taxes will, with respect to each taxing jurisdiction, be at a rate which does not exceed the rate of withholding on interest giving effect, in each case, to any applicable Tax treaty, with RTZ Lender qualified thereunder as a United Kingdom person and "Applicable Tax" shall be construed accordingly (f) "Approved Expansion Project" has the meaning assigned to it in the Participation Agreement (g) "Approved Programme and Budget" has the meaning assigned to it in the Participation Agreement (h) "Available Commitment" means at any time $450,000,000 less the aggregate amount of the Advances which have theretofore been made (i) "Bank Credit Agreement[s]" means [the credit agreement(s) pursuant to which the banks that are parties to the Intercreditor Agreement have made available to PT-FI from time to time loans secured by, among other things, PT-FI's interest in the COW] (j) "Banks" means the banks that are parties to the Intercreditor Agreement (k) "Business Day" means a day on which banks and foreign exchange markets are open for business in London and New York City (l) "Commitment" means the obligation of RTZ Lender under and subject to the terms of this Agreement to make available to PT-FI 3 Advances of an aggregate principal amount not exceeding the Available Commitment (m) "Contract Area Block A" has the meaning assigned to it in the Participation Agreement (n) "COW" means the Contract of Work referred to in Recital (A) (o) "Default" means any Event of Default and any event which, with the giving of any notice and/or the expiry of time and/or the fulfilment of any other condition stated in Clause 11(1) below would be or become an Event of Default (p) "Dispose" has the meaning assigned to that expression in the Participation Agreement (q) "Encumbrance" means any mortgage, deed of trust or other trust arrangement for the purpose of providing security, deed to secure debt or any other security agreement or arrangement, pledge, hypothecation, assignment for the purpose of providing security, security interest, encumbrance, lien or charge of any kind, whether voluntarily incurred or arising by operation of law, by statute, contract or otherwise, affecting any property, including any power of attorney or agreement to grant any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature of a security interest and/or the filing of or agreement to give any financing statement (other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the UCC or comparable law of any jurisdiction with respect to any property (r) "Enterprise Operations" has the meaning assigned to it in the Participation Agreement (s) "Event of Default" means any of the events specified in Clause 11(1) below (t) "Expansion" has the meaning assigned to it in the Participation Agreement (u) "Facility" means the credit facility granted to PT-FI by RTZ Lender in this Agreement (v) "Feasibility Study" has the meaning assigned to it in the Participation Agreement 4 (w) "Government" has the meaning assigned to it in Recital (A) (x) "Governmental Authority" means the Government (including the President and any Minister), any Indonesian state, provincial, local or foreign court or governmental agency, authority, instrumentality or regulatory body (y) "Incremental Expansion Cashflow" has the meaning assigned to it in the Participation Agreement (z) "Incremental Expansion Revenues" has the meaning assigned to it in the Participation Agreement (aa) "Intercreditor Agreement" means the agreement dated as of [ ] 1995 made between, among other parties, the Banks under the Bank Credit Agreement[s] and RTZ Lender, under which a trustee has been appointed as trustee and security agent (i) for the Banks pursuant to the [Banks' Security Documents] (as defined in the Intercreditor Agreement) and (ii) RTZ Lender, pursuant to which the parties to the agreement have agreed to regulate their respective rights and interests inter se (bb) "Lender Lien" means the Encumbrance on PT-FI's Participating Interest in Incremental Expansion Cashflow granted by PT-FI to RTZ Lender in the Security Documents (cc) "Lender's UK Group" means the group of companies comprising The RTZ Corporation PLC and its United Kingdom subsidiaries, where subsidiary has the meaning assigned to it in Section 736 of the Companies Act 1985 of Great Britain (dd) "Loan" means together the Relevant Approved Expansion Project Loans (ee) "Month" means a calendar month (ff) "Operator" has the meaning assigned to it in the Participation Agreement (gg) "Participating Interest" has the meaning assigned to it in the Participation Agreement (hh) "Participation Agreement" means the participation agreement referred to in Recital (B) 5 (ii) "Prescribed Rate" has the meaning assigned to such expression in Clause 6(3)(a) below (jj) "Programme" and "Budget" each has the meaning assigned to it in the Participation Agreement (kk) "Reference Banks" means together Morgan Guaranty Trust Company of New York, Barclays Bank PLC, Deutsche Bank AG, ABN-AMRO Bank N.V. and Chemical Bank and any bank mutually selected by RTZ Lender and PT-FI pursuant to Clause 6(3)(d) below to replace any of such banks and "Reference Bank" means each and any of them (ll) "Relevant Costs" means costs, expenses and expenditures to be incurred as comprised in and pursuant to one or more Approved Programmes and Budgets and Applicable Taxes and Additional Amounts payable from Advances as provided in this Agreement (mm) "Relevant Approved Expansion Project" means an Approved Expansion Project in or towards the financing of which proceeds of Advances made under this Agreement are or will be applied (nn) "Relevant Approved Expansion Project Loan" means the aggregate outstanding principal amount of all Advances made to PT-FI under this Agreement in respect of the Relevant Approved Expansion Project together with all interest and commitment fees added thereto as provided in Clause 6(4) below (oo) "Security Documents" means together the Trust Agreement and the security documents referred to in the Trust Agreement (pp) "Taxes" includes all present and future income and other taxes, levies, imposts, assessments, duties, charges, deductions and withholdings whatsoever together with interest thereon and penalties with respect thereto and "Tax" and "Taxation" shall be construed accordingly (qq) "Transaction Documents" means together the Implementation Agreement, the Participation Agreement, the Intercreditor Agreement, the Security Documents and this Agreement (rr) "Trust Agreement" means [the trust agreement between, among others, PT-FI and the Trustee in the form or substantially in the form set out in Schedule 3 to this Agreement] 6 (ss) "Trustee" means First Trust, National Association, successor to Morgan Guaranty Trust Company of New York under the Trust Agreement and any successor under the Trust Agreement (tt) "UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York or, as appropriate, the Uniform Commercial Code (or equivalent) as in effect from time to time in any other relevant jurisdiction (uu) "U.S.A." means the United States of America, any state or territory thereof and the District of Columbia (vv) "Year" means a calendar year commencing 1 January (ww) "dollars" and "$" means the lawful currency for the time being of the U.S.A. (2) In this Agreement, (a) the contents page hereof and the headings in this Agreement are for convenience only and shall be ignored in construing this Agreement (b) references to a "person" shall include an individual, company, corporation, firm, partnership, joint venture, association, trust or agency of a state (in each case, whether or not having a separate legal personality) (c) references to any document or agreement, including, without limitation, the COW, shall include such document or agreement as amended, novated, substituted, varied, supplemented or replaced from time to time (d) references to a party to this Agreement or to a Reference Bank or any other person mentioned in this Agreement shall include such party's or person's successors or permitted assigns (e) references to this Agreement shall include all schedules and annexes hereto. AMOUNT 2. Subject to the terms of this Agreement, RTZ Lender grants to PT-FI a dollar loan facility whereby RTZ Lender, when requested by PT-FI pursuant to an Advance Request and subject as aforesaid, will make to PT-FI Advances denominated in dollars of an aggregate amount not to exceed $450,000,000. PURPOSE 3. The proceeds of each Advance shall be applied only in or towards financing payment of Relevant Costs of one or more Approved Expansion Projects (and PT-FI 7 undertakes so to apply each such Advance) and no Advance shall be drawn by PT-FI unless the proceeds of such Advance are or will be so applied within thirty days after the Advance Date. CONDITIONS PRECEDENT 4. (1) The obligations of RTZ Lender to make the first Advance to PT-FI under this Agreement are subject to the condition that RTZ Lender shall first have received all of the following in form and substance satisfactory to it: (a) a copy of a resolution of the board of directors of PT-FI approving the transactions and matters to be implemented under the Transaction Documents to which it is to be party and authorising a specified person or persons to execute and deliver on its behalf the Transaction Documents to which it is to be party, and to execute and deliver and/or despatch all notices, certificates and other documents to be executed and delivered and/or despatched in connection with any of the Transaction Documents, such copies to be accompanied by a certificate of PT-FI signed by any authorised officer on behalf of the board of directors confirming that the utilisation by PT- FI of up to $450,000,000 of the Facility would not cause any borrowing limit contained in the Articles of PT-FI or in any other agreement or instrument to which PT-FI is a party to be exceeded (b) a copy of the signatures of those persons authorised to execute and deliver on behalf of PT-FI the Transaction Documents to which it is to be party and of those persons authorised to execute and deliver and/or despatch on behalf of PT-FI all notices, certificates and other documents in connection therewith (c) a copy of each of the Security Documents duly executed by PT-FI together with evidence that the Encumbrance in favour of RTZ Lender created by such documents has been perfected and all taxes, stamp duties and fees payable in respect thereof have been duly paid; (d) a legal opinion of Ali Budiardjo, Negroho & Reksodiputro, Indonesian legal advisers to PT- FI, addressed to RTZ Lender in form and substance reasonably satisfactory to RTZ Lender (e) a legal opinion of Davis Polk & Wardwell, US Counsel to PT-FI, addressed to RTZ Lender in form and substance reasonably satisfactory to RTZ Lender (f) a copy of the Participation Agreement duly executed by each of the parties to it (g) a copy of the Intercreditor Agreement duly executed by each of the other parties to it and such other evidence that such agreement is in full force and effect as RTZ Lender may reasonably require. 8 (2) The obligations of RTZ Lender in respect of the making of each Advance under this Agreement are subject to the further conditions precedent that both at the time of the relative Advance Request and at the Advance Date: (a) no Event of Default under Clauses 11(1)(a), (e), (i), (j) or (k) shall have occurred and be continuing or would result from or be in existence immediately after the making of such Advance which has not been waived by RTZ Lender (b) no Event of Default, act of war, insurrection, rebellion, earthquake or other event of like impact has occurred as a result of which RTZ Lender has determined that, in its reasonable judgment, it is unlikely that the Relevant Approved Expansion Project will proceed to completion, in which event RTZ Lender will nevertheless make Advances (not to exceed the Available Commitment) to cover cash calls required to pay obligations in respect of the Relevant Approved Expansion Project outstanding at the time of the call which the Participants are legally obliged to pay or which are agreed between the Participants to be necessary to pay the costs of suspending or terminating such Relevant Approved Expansion Project. (3) If any event shall occur as a result of which RTZ Lender (whether before or after Incremental Expansion Cashflow starts being generated) shall cease to have access to 100% of PT- FI's share of Incremental Expansion Cashflow, if any, (including the failure to have the benefit of the Intercreditor Agreement and the Trust Agreement, or comparable protection), RTZ Lender's obligation to make Advances shall be suspended until such time as RTZ Lender shall again have access to such share of Incremental Expansion Cashflow, it being understood that RTZ Lender and PT-FI shall use their respective best efforts to cure the event giving rise to such cessation of access to such share of Incremental Expansion Cashflow. AVAILABILITY OF ADVANCES 5. (1) Subject to the terms of this Agreement, PT-FI may require that an Advance be made to it under this Agreement by delivering to RTZ Lender prior to 10am (London time) on the fifth Business Day before the proposed Advance Date, a duly completed Advance Request. (2) Each Advance Request shall specify: (a) the amount of the proposed Advance, which shall not be in such an amount as to exceed the Available Commitment (b) (unless previously notified to RTZ Lender in writing and not revoked in accordance with this Agreement) the details of the bank and account to which the proceeds of the proposed Advance are to be made available 9 (c) the Relevant Approved Expansion Project, together with, in the case of the first Advance Request in respect of a Relevant Approved Expansion Project, PT-FI's best estimate, taken from the Feasibility Study for the Relevant Approved Expansion Project, of (i) the aggregate of the projected Relevant Costs of the Relevant Approved Expansion Project (ii) the period over which the projected Relevant Costs of the Relevant Approved Expansion Project will be incurred and (iii) an assumed repayment schedule based upon the application of 100% of PT-FI's share of Incremental Expansion Cashflow, such schedule to be derived from the related Feasibility Study (d) reasonable details of the Relevant Costs of the Relevant Approved Expansion Project in question and that such sums fall due and that such proceeds will be so applied within thirty days after the proposed Advance Date. (3) Subject to the terms of this Agreement, each Advance Request shall be irrevocable. Each Advance Request shall be based on a cash call (pursuant to paragraph 10.3 of the Accounting Procedures constituting part of the Participation Agreement) with respect to an Approved Expansion Project. LENDER RETURN 6. (1) There shall be determined separately for each Relevant Approved Expansion Project the rate of interest applicable to Advances made to finance payment of Relevant Costs of that Relevant Approved Expansion Project. (2) The rate of interest applicable to a Relevant Approved Expansion Project Loan shall be the rate per annum determined by RTZ Lender in accordance with Clause 6(3) below to be the Prescribed Rate for that Relevant Approved Expansion Project. (3) (a) Not later than the third Business Day before the proposed Advance Date for the first Advance under this Agreement in respect of each Relevant Approved Expansion Project, RTZ Lender shall select, at its absolute discretion, three of the Reference Banks and ask each of the three Reference Banks selected to provide RTZ Lender with a quote of (1) the rate of interest at which such Reference Bank would be prepared to make available to a subsidiary of The RTZ Corporation PLC a loan facility on the following basis: (i) the loan would be in an amount equal to the estimate given by PT-FI pursuant to Clause 5(2)(c)(i) in relation to the Relevant Approved Expansion Project 10 (ii) the loan would be capable of being drawn over the period estimated by PT-FI pursuant to Clause 5(2)(c)(ii) in relation to the Relevant Approved Expansion Project (iii) the loan would have an assumed repayment schedule based upon the application of 100% of PT-FI's share of Incremental Expansion Cashflow, such schedule to be derived from the related Feasibility Study (iv) the rate of interest should be a floating rate, based on a margin over LIBOR, LIBOR being the rate quoted by the Reference Bank in the ordinary course of business in the London Interbank Eurodollar Market at or about 11.00am (London time) on the day the Reference Bank supplies to RTZ Lender its rate for the offering of dollar deposits for a period of up to six months (v) the loan would be unconditionally guaranteed, as to principal and interest, by The RTZ Corporation PLC and (2) the rate of any commitment fee. The Prescribed Rate for the Relevant Approved Expansion Project Loan shall be the arithmetic mean (rounded up, if necessary, to the nearest fourth decimal place) of the respective rates quoted to RTZ Lender, provided that if any of the Reference Banks shall be unable or otherwise fails to supply a rate by 1.00pm (London time) on the date falling ten Business Days after the date of RTZ Lender's request, RTZ Lender shall select another Reference Bank or Banks to provide a quote on the basis set out above and provided further that if, by 1.00pm (London Time) on the date falling two Business Days before the end of the Month in which the first addition to the Relevant Approved Expansion Project Loan is to be made pursuant to Clause 6(4) below, RTZ Lender shall not have received a rate from each of three of the Reference Banks, the Prescribed Rate shall be determined by RTZ Lender on the basis of the quotations of each of the Reference Banks which have supplied a rate. The rate of any commitment fee applicable to the Relevant Approved Expansion Project Loan shall be the arithmetic mean (rounded up, if necessary, to the nearest fourth decimal place) of the respective rates or fees (as appropriate) quoted by the Reference Banks whose quotes of the rates of interest are used by RTZ Lender in determining the Prescribed Rate applicable to the Relevant Approved Expansion Project Loan. (b) RTZ Lender shall determine in accordance with Clause 6(3)(a) above and notify to PT-FI not later than the Business Day before the end of the Month in which the first addition to the Relevant 11 Approved Expansion Project Loan is to be made pursuant to Clause 6(4) below the Prescribed Rate and commitment fee applicable to the Relevant Approved Expansion Project Loan. (c) Each Relevant Approved Expansion Project Loan (including, for the avoidance of doubt, interest and commitment fee, previously or to be added pursuant to Clause 6(4) below) shall accrue interest at the Prescribed Rate applicable to that Relevant Approved Expansion Project Loan. (d) Should any of the Reference Banks cease to carry on business as a bank, the parties shall mutually select another bank with a credit rating reasonably equivalent to that enjoyed at the date of this Agreement by the Reference Bank in question to replace such Reference Bank. (4) There shall be added to and become part of each Relevant Approved Expansion Project Loan on the last Business Day of each Month the following amounts to the extent not paid: (a) interest accrued thereon calculated in accordance with Clauses 6(3)(a) above and 6(5)(a) below and (b) an amount equivalent to a commitment fee in respect thereof calculated in accordance with Clauses 6(3)(b) above and 6(5)(b) below. (5) RTZ Lender shall, in respect of each Relevant Approved Expansion Project Loan, calculate (on a basis of a 360 day year, comprising 12 months of 30 days each) the interest and commitment fee (if any) to be added to the Relevant Approved Expansion Project Loan on the last Business Day of each Month by multiplying (a) in the case of the interest to be added, the Relevant Approved Expansion Project Loan as at the end of the Month in question (immediately prior to the addition on the last Business Day of that Month of any amounts pursuant to Clause 6(4)(a)) by the Prescribed Rate applicable to the Relevant Approved Expansion Project Loan, expressed as a monthly rate, where such monthly rate shall be the interest factor which, when compounded for 12 months, equals the Prescribed Rate applicable to the Relevant Approved Expansion Project Loan (b) in the case of the commitment fee to be added, the difference between the estimate given by PT- FI pursuant to Clause 5(2)(c)(i) in relation to the Relevant Approved Expansion Project and the Relevant Approved Expansion Project Loan as at the end of the Month in question (immediately prior to the addition on the last Business Day of that Month of any amounts pursuant to Clause 12 6(4)(b)) by the rate of commitment fee applicable to the Relevant Approved Expansion Project Loan, expressed as a monthly rate, where such monthly rate shall be the factor which, when compounded for 12 months, equals the rate of the commitment fee applicable to the Relevant Approved Expansion Project Loan. RTZ Lender shall, not later than the fifth Business Day after the end of each Month, send to PT-FI a statement showing the aggregate amount of the Relevant Approved Expansion Project Loan outstanding at the end of the previous Month (prior to the addition of the sums mentioned next) together with the interest and commitment fee applicable during and added to the Relevant Approved Expansion Project Loan at the end of the Month and shall give to PT-FI such explanation regarding the calculation of the interest and commitment fee added as PT-FI may reasonably require. (6) Each determination by Lender of the Prescribed Rate and the rate of commitment fee applicable to a Relevant Approved Expansion Project Loan and the amounts of interest accrued on the Relevant Approved Expansion Project Loan and commitment fee applicable thereto shall, in the absence of manifest error, be conclusive. REPAYMENT OF LOAN 7. (1) Except as otherwise provided in this Agreement, beginning on the Sharing Commencement Date (as defined in the Participation Agreement), PT-FI will pay to (or, in the case of payments in respect of Applicable Taxes and Additional Amounts, on behalf of) RTZ Lender 100% of PT-FI's share (determined in accordance with the Participation Agreement) of the Incremental Expansion Cashflow until the Loan is repaid in full. PT-FI shall not be required to repay the Loan or pay any other obligation under this Agreement from any of its assets other than that constituting 100% of PT-FI's share of Incremental Expansion Cashflow provided that in any event the Loan shall mature and be repayable in full on the earlier of the date which is 25 years after the date of the first Advance under this Agreement and the date which is 15 years after the date of the last Advance under this Agreement and provided further that, on such earlier date, PT-FI may, in lieu of repaying the Loan, at its option assign to RTZ Lender all of PT-FI's rights to Incremental Expansion Cashflow in full and final satisfaction of all PT-FI's obligations hereunder and in no circumstances shall PT-FI require or have the right to require RTZ Lender to reassign the same to PT-FI. (2) With effect from the Sharing Commencement Date (defined as above), PT-FI shall, not later than the twentieth Business Day after the end of each Month, pay to (or, in the case of payments of Applicable Taxes and Additional Amounts, on behalf of) RTZ Lender in dollars the whole of such share of the Incremental Expansion Cashflow for the immediately preceding Month distributed to PT-FI by the Operator in accordance with the terms of the Participation Agreement. Each such payment shall be accompanied by a statement containing details of the Incremental Expansion Cashflow computation. 13 (3) Not later than 45 Business Days after the end of each Year after the date of commissioning of the first Approved Expansion Project, PT-FI shall send to RTZ Lender a statement showing for the previous Year (or part thereof) the Incremental Expansion Cashflow, such statement to contain sufficient data to enable RTZ Lender to verify the calculation thereof. If the annual statement indicates an overpayment of Incremental Expansion Cashflow, RTZ Lender shall pay to PT-FI a sum equal to the excess within 30 Business Days. If the annual statement indicates an underpayment of Incremental Expansion Cashflow, PT-FI shall pay to RTZ Lender a sum equal to the shortfall within 30 Business Days. (4) Each payment under this Clause 7 shall be applied to Relevant Approved Expansion Project Loans in the following order of priority: (i) first, to any Applicable Taxes or Additional Amounts then payable; (ii) secondly, to any amounts of commitment fee or interest then payable, rateably; (iii) thirdly, to the principal amount of the Relevant Approved Expansion Loans in the order in which the first Advance thereunder is made so that no payment shall be applied to the principal amount of any Relevant Approved Expansion Project Loan other than the first until the principal amount of the first has been repaid in full and so on. UNDERTAKINGS 8. (1) PT-FI undertakes with RTZ Lender that, from the date of this Agreement until all its liabilities under this Agreement have been discharged: (a) PT-FI will notify RTZ Lender of any Default promptly upon PT-FI becoming aware of the same and of any remedial action being taken (b) PT-FI will not take any action or fail to take any action, including actions or failures to act under the COW, the Participation Agreement or any of the Transaction Documents, if the effect of any such action or failure to act would have a material adverse effect on the ability of PT- FI to carry out Enterprise Operations or affect materially and adversely the access of RTZ Lender to 100% of PT-FI's share of Incremental Expansion Cashflow or to affect materially and adversely the rights of RTZ Lender under the Transaction Documents (c) PT-FI will give prompt notice to RTZ Lender of any notice of default, lawsuit, proceeding, action or damage of which it becomes aware which might materially and adversely affect the ability of PT-FI to carry out Enterprise Operations or the access of RTZ Lender to 100% of PT-FI's share of Incremental Expansion Cashflow or might materially and adversely affect the rights of RTZ Lender under the Transaction Documents 14 (d) PT-FI shall at all times maintain in full force and effect for the benefit of RTZ Lender a first priority lien with respect to 100% of PT-FI's share of Incremental Expansion Cashflow, free and clear of all Encumbrances except for a subordinated lien in favour of the Banks parties to the Intercreditor Agreement to the extent provided for in the Intercreditor Agreement (e) PT-FI shall not Dispose of any part of its share of Incremental Expansion Revenues without the prior written consent of RTZ Lender and in the event of any such Disposal, PT-FI shall procure that the transferee commits in writing to RTZ Lender to be bound by the repayment provisions of this Agreement to the extent of the Participating Interest or such other interest transferred (f) PT-FI shall at its own expense execute any and all further deeds, documents, agreements and instruments, and take all such further actions as may be required under applicable law or which RTZ Lender may reasonably request in order to perfect the transactions contemplated by this Agreement and the Trust Agreement, subject to the Intercreditor Agreement and in order to grant, preserve, protect and perfect the validity and first priority of the Lender Lien with respect to 100% of PT-FI's share of Incremental Expansion Cashflow. (2) RTZ Lender shall record in RTZ Lender's internal records separately for each Relevant Approved Expansion Project Loan the date and amount of each Advance from RTZ Lender to PT-FI, the amount of interest and other sums added to the Relevant Approved Expansion Project Loan on the last Business Day of each Month and the date each such amount is added, and the date and amount of each payment by PT-FI to RTZ Lender under this Agreement with respect to the Relevant Approved Expansion Project Loan provided that the failure of RTZ Lender to make or any error in any such entries shall not affect the obligations of PT-FI under this Agreement. ILLEGALITY 9. If any change in or the introduction of any law, regulation, treaty or (whether or not having the force of law) official directive or rule of any governmental, fiscal, monetary or regulatory (including any self regulatory) authority, organisation or agency of or in the United Kingdom, Indonesia or the U.S.A., or any change in the interpretation, administration or application thereof by the relevant courts or other authority, organisation or agency in any such jurisdiction or compliance by RTZ Lender therewith, shall make it unlawful or contrary to any such regulation, treaty, official directive or rule for RTZ Lender to make available or fund or maintain or to give effect to its obligations as contemplated hereby, RTZ Lender may, by notice thereof to PT-FI, declare that, to the extent that they are so unlawful or contrary to such regulation, treaty, official directive or rule, RTZ Lender's obligations to PT-FI hereunder shall be suspended forthwith whereupon such obligations and RTZ Lender's Commitment shall be so suspended until such time as such condition is no longer operative. If and to the extent that the continued 15 lending thereof by RTZ Lender would cause RTZ Lender to be in breach of such law, regulation, treaty, official directive or rule, PT-FI will co-operate with RTZ Lender with a view to enabling RTZ Lender to transfer the Loan, its rights under the Trust Agreement and its obligations under this Agreement to another subsidiary of The RTZ Corporation PLC incorporated in a jurisdiction where there is no such illegality provided that if no such subsidiary acceptable to both PT-FI and The RTZ Corporation PLC is identified within a period of twelve months, RTZ Lender's obligations to PT-FI hereunder shall be terminated. PAYMENTS 10. (1) All payments to be made by PT-FI to RTZ Lender under this Agreement shall be made in dollars in same day funds to such account at such bank or office in New York City as RTZ Lender shall designate by notice to PT-FI given not less than five Business Days prior to the date of such payment. (2) All payments to be made by RTZ Lender to PT-FI under this Agreement shall be made in dollars in same day funds to such account at such bank or office as PT-FI may designate by notice to RTZ Lender given not less than five Business Days prior to the date of such payment or as PT-FI shall designate in the relevant Advance Request. (3) (a) PT-FI shall pay to or on behalf of RTZ Lender from the sources specified below (the "Specified Sources") an amount equal to all Applicable Taxes with respect to amounts payable under this Agreement, together with any Additional Amounts, in accordance with Clause 10(3)(c). Payments from Specified Sources shall mean: (i) in the period before any Incremental Expansion Cashflow is generated, out of Advances (not to exceed the Available Commitment) and should any proposed Advance in respect of such payments otherwise cause the Available Commitment to be exceeded, PT-FI may, at its option, either suspend claiming a deduction for interest on the Loan (but interest will nevertheless continue to accrue in the manner provided in this Agreement) or request an advance from RTZ Lender for the excess which shall be granted on the same terms as those applicable to Advances under this Agreement but at a rate of interest reflecting a loan to PT-FI and not to The RTZ Corporation PLC (ii) in the period after Incremental Expansion Cashflow begins to be generated, subject to Clause 10(3)(c), first, from Incremental Expansion Cashflow available at the time of payment and secondly, to the extent that there is insufficient to meet any payment, from Advances (not be exceed the Available Commitment) and should any proposed Advance 16 in respect of such payments otherwise cause the Available Commitment to be exceeded, PT-FI may. at its option, either suspend claiming a deduction for interest on the Loan (but interest will nevertheless continue to accrue in the manner provided in this Agreement) or request an advance from RTZ Lender for the excess which shall be granted on the same terms as those applicable to Advances under this Agreement but at a rate of interest reflecting a loan to PT-FI and not to The RTZ Corporation PLC. (b) PT-FI shall from the Specified Sources indemnify RTZ Lender against and reimburse RTZ Lender upon demand for any Applicable Taxes or Additional Amounts paid by RTZ Lender and any loss, liability, claim or expenses (including interest, penalties, fines, surcharges and legal fees) which RTZ Lender may incur at any time arising out of or in connection with any failure of PT-FI to make any payments of Applicable Taxes or Additional Amounts. (c) PT-FI shall pay or account to the relevant taxation or other authorities from the Specified Sources within the period permitted by applicable law the full amount of any Applicable Tax or Additional Amounts payable hereunder and within thirty days after each payment by PT-FI hereunder of any such Applicable Tax or Additional Amounts, PT-FI shall deliver to RTZ Lender evidence (including receipts where obtained within that period) that such Applicable Tax or Additional Amounts have been duly remitted to the appropriate authority. If any such receipts are obtained after the expiry of such thirty day period, PT-FI shall furnish copies thereof promptly to RTZ Lender. PT-FI shall promptly pay to RTZ Lender from the Specified Sources the full amount of any Applicable Taxes and Additional Amounts in respect thereof upon receipt of notice from RTZ Lender of the imposition and amount of such Applicable Tax and Additional Amounts when such Applicable Tax and Additional Amounts are imposed on any payment in the hands of RTZ Lender. (d) If, following the imposition of any Applicable Tax or Additional Amount, under this Clause 10(3), RTZ Lender determines in its absolute discretion that it has obtained a refund of Tax payable by it or obtained or used a credit or any other relief against Tax on its profits or income (any of the foregoing being a "Tax Credit") which RTZ Lender in its absolute discretion is able to quantify and identify as attributable to Applicable Tax or the Additional Amounts paid by PT-FI, then, if RTZ Lender can do so without any adverse consequences for itself or any other company in RTZ Lender's 17 Group, RTZ Lender shall treat as a payment made pursuant to Clause 7 such proportion of that Tax Credit as RTZ Lender in its absolute discretion may determine will leave RTZ Lender and each other company in RTZ Lender's Group (after that reimbursement) in no better or worse position in respect of their worldwide Tax liabilities than they would have been in if no payment by PT-FI of Applicable Taxes or Additional Amounts had been required. RTZ Lender shall have absolute discretion as to whether to claim any Tax Credit (and, if it does claim, the extent, order and manner in which it does so) and whether any amount is due from it under this Clause 10(3)(d) (and, if so, what amount and when). RTZ Lender shall not be obliged to disclose any information regarding its Tax affairs and computations or those of any other company in RTZ Lender's Group. (e) RTZ Lender warrants to PT-FI that RTZ Lender is fully eligible for the benefits of the "Interest" provision of the double taxation treaty between the United Kingdom and the United States of America and of the double taxation treaty between the United Kingdom and The Republic of Indonesia. Each of PT-FI and RTZ Lender shall provide to the other promptly and file with any relevant taxation or other authority all information, documents, certificates and returns reasonably required by the other or necessary in order to enable RTZ Lender and PT-FI to claim the benefits of any relevant double taxation treaty in respect of the lower rate of withholding tax on payments other than principal. DEFAULT 11. (1) Each of the events set out below is an Event of Default (whether or not caused by any reason whatsoever outside the control of PT-FI or any other person): (a) if default is made in the payment of any sum due under this Agreement on the due date and otherwise in accordance with the provisions of this Agreement and such failure shall continue for 30 days after notice by RTZ Lender; or (b) if PT-FI for any reason fails duly and promptly to perform or observe any of its material obligations under this Agreement or any of the other Transaction Documents to which it is party and such failure shall continue for 30 days after notice by RTZ Lender; or (c) if any authorisation, approval or consent necessary for PT-FI to enter into or perform this Agreement or any of the other Transaction Documents to which it is party or to ensure that this Agreement or any of the other Transaction Documents is legal, valid and enforceable is revoked or terminated or expires and is not renewed; 18 or (d) if for any reason the Intercreditor Agreement or any of the Security Documents shall cease to be valid, legally binding and enforceable; or (e) if the maturity of the indebtedness under the Bank Credit Agreement[s] has been accelerated as a result of an Event of Default as defined in and under the Bank Credit Agreement[s]; or (f) if PT-FI shall abandon or postpone indefinitely or resolve to abandon or postpone indefinitely Enterprise Operations in or relating to Contract Area Block A or shall no longer be entitled to carry on Enterprise Operations in or relating to Contract Area Block A, whether because of its default under or termination of the COW or for any reason whatsoever; or (g) if the COW shall be terminated or otherwise fail to be in full force and effect or shall be amended without the consent of RTZ Lender in any manner which materially and adversely affects the rights and benefits granted to RTZ Lender under the Transaction Documents or the Minister of Mines and Energy of Indonesia (or any successor entity) or the Government shall take any action in contravention of the COW or otherwise which materially and adversely affects PT-FI's ability to perform its obligations under the Transaction Documents to which it is a party or the rights and benefits granted to RTZ Lender under any of the Transaction Documents; or (h) any Governmental Authority shall condemn, seize, nationalise, consume the management of or appropriate any material part of PT-FI's Property, assets or revenues (with or without payment of compensation); or (i) if a general meeting of shareholders of PT-FI resolves that PT-FI be liquidated or PT-FI suffers the appointment of a receiver, liquidator, administrator, assignee, custodian, trustee, sequestrator or similar official for a substantial part of its assets in a proceeding brought against or initiated by it, and such appointment is neither made ineffective nor discharged within ninety days after the making thereof or such appointment is consented to, requested by or acquiesced in by it; or (j) if PT-FI commences a voluntary case under any applicable bankruptcy, insolvency or similar law now or hereafter in effect; or consents to the entry of an order of relief in an involuntary case under any such law or to the appointment of or taking possession by a receiver, liquidator, administrator, assignee, custodian, trustee, sequestrator or other similar official of any substantial part of its assets; or makes a general assignment for the benefit of creditors; or (k) if entry is made against PT-FI of a judgement, decree or order for relief by a court of competent jurisdiction in an involuntary case commenced against PT-FI under any applicable bankruptcy, 19 insolvency or other similar law of any jurisdiction now or hereafter in effect. (2) In the case of any such event as is mentioned in Clause 11(1), and at any time thereafter if any such event shall then be continuing, RTZ Lender may, by written notice to PT-FI, (a) declare that an Allocation Event (as defined in the Trust Agreement) shall have occurred under the Trust Agreement and/or (b) exercise or cause the Trustee to exercise any or all of the remedies available to RTZ Lender or the Trustee under the Security Documents or the Intercreditor Agreement, including, without limitation, any action required to enforce RTZ Lender's rights with respect to 100% of PT-FI's share of Incremental Expansion Cashflow. EXPENSES 12. Each of PT-FI and RTZ Lender shall bear its own costs and expenses incurred in the preparation and negotiation of this Agreement and the other Transaction Documents. Any and all documentary taxes, assessments, notarial or other fees or charges levied by any Governmental Authority by reason of the execution and delivery of or in connection with the performance of this Agreement or any of the other Transaction Documents shall be borne equally between PT-FI and RTZ Lender. ASSIGNMENT 13. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors, but is not assignable without the written consent of the other party hereto provided that RTZ Lender may assign without such consent of PT-FI to a member of RTZ Lender's UK Group without the written consent of the other party hereto. Nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies under or by reason of this Agreement. Any transfer by PT-FI of its Participating Interest in accordance with the Participation Agreement, to the extent such assignment relates to its interests in Incremental Expansion Cashflow, shall be subject to the terms and provisions of the Transaction Documents. No such assignment or transfer shall be effective until there is executed and delivered to RTZ Lender an instrument or instruments in form and substance satisfactory to RTZ Lender evidencing the agreement of the transferee to assume all of the liabilities and to perform all of the obligations and duties under this Agreement and the other Transaction Documents to which PT-FI is party. No such assignment or transfer shall relieve PT-FI of its obligations under this Agreement. NOTICES 14. (1) Except as otherwise stated herein, all notices, demands or other communications hereunder to any party hereto shall be made in writing and shall be deemed to be duly given or made when delivered to such party addressed to it at its address specified in the relevant part of Schedule 1 to this Agreement, or at such other address as such party may hereafter specify for such purpose to the others by notice. 20 (2) A notice or other communication received on a non- working day or after 5.00pm on a working day in the place of receipt shall be deemed to be served on the next following working day in such place. GOVERNING LAW 15. (1) This Agreement shall be governed and construed in accordance with the laws of the State of New York. (2) Each of the parties irrevocably agrees that any suit, action or proceedings (together in this Clause 15 referred to as "Proceedings") arising out of or in connection with this Agreement, except for Proceedings regarding enforcement which may be brought in any jurisdiction, shall be brought in the courts of the Borough of Manhattan in the State of New York and submits to the exclusive jurisdiction of each such court. (3) Each of the parties irrevocably waives any objection which it may have now or hereafter to the laying of venue of any Proceedings in any such court as is referred to in this Clause 15 and any claim that any such Proceedings have been brought in an inconvenient forum. Each of the parties hereby to the fullest extent permitted by law waives any right it may have to have any Proceedings take the form of a trial by jury. (4) Nothing contained in this Clause 15 shall limit the rights of any party to take proceedings against any other party in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not. MISCELLANEOUS 16. If any provision of this Agreement or the Security Documents is prohibited or unenforceable in any jurisdiction such prohibition or unenforceability shall not invalidate the remaining provisions of this Agreement or the Security Documents or affect the validity or enforceability of such provision in any other jurisdiction. IN WITNESS whereof the parties have caused this Agreement to be signed on the date first above written. 21 SCHEDULE 1 Address for Notices to PT-FI P.T. Freeport Indonesia Company Plaza 89, 5th Floor Jl.H.R. Rasuna Said Kav.X-7 No.6 Jakarta 12940 Indonesia Telephone: 62 21 850 4555 Telex: 44415 FIIJKTIA Fax: 62 21 850 6736 Attention: President-Director with a copy to: P.T. Freeport Indonesia Company 1615 Poydras Street New Orleans, LA 70112 Telephone: 504 582 4000 Telex: 6275993 Fax: 504 585 3513 Attention: General Counsel Address for Notices to RTZ Lender 6 St. James's Square London SW1Y 4LD Telephone: 0171 930 2399 Telex: 24639 RTZLDN G Fax: 0171 930 3249 Attention:The Secretary with a copy to: The Treasurer The RTZ Corporation PLC 6 St. James's Square London SW1Y 4LD Fax: 0171 930 3249 22 SCHEDULE 2 Form of Advance Request To: [name and address of RTZ Lender] Attention: [Date] REQUEST Agreement dated [ ] 199[ ] Dear Sirs We refer to the Facility constituted by an agreement (the "Agreement") dated [ ] 199[ ] made between this Company as Borrower and [ ] as RTZ Lender. Terms defined in the Agreement have the same meanings herein. We hereby give you notice pursuant to Clause 5 of the Agreement that we require an Advance to be made to us under the Agreement as follows: (a) Drawdown Date: (b) Amount: We set out below the Approved Expansion Project in or towards the financing of which the proceeds of the Advance will be applied: [ ] [In the first Advance Request in respect of a Relevant Approved Expansion Project only: [Our best estimate, taken from the feasibility study for the Approved Expansion Project referred to above approved pursuant to Clauses 10 and 11 of the Participation Agreement, of (i) the aggregate of the projected Relevant Costs of the Approved Expansion Project is $ (ii) the period over which the projected Relevant Costs of the Approved Expansion Project will be incurred is years (iii) we attach an assumed repayment schedule based on the application of 100% of our Incremental Expansion Cashflow based on the related Feasibility Study of the Approved Expansion Project.] We set out below details of the Relevant Costs in or towards the financing of which the proceeds of the Advance will be applied and confirm that such proceeds will be applied within thirty days after the proposed Advance Date: 23 [ ] We confirm that no Event of Default has occurred and is continuing or would occur as a result of the making of the proposed Advance which has not been waived. Yours faithfully 24 SCHEDULE 3 Trust Agreement 25 P.T. FREEPORT INDONESIA COMPANY By: Name: Title: [RTZ Company] By: Name: Title: EX-99 12 DESCRIPTION OF TRUST AGREEMENT Exhibit A DESCRIPTION OF TRUST ARRANGEMENT 1. Trust Estate. To give effect to the arrangements contemplated by the credit facilities, the Participation Agreement and the RTZ Loan Agreement and to preserve and protect the respective rights of the parties thereunder, an independent third party trustee (First Trust is the existing trustee) will hold in trust (i) the COW, (ii) all concentrate sales contracts, (iii) all receipts from sales of concentrate (to be directed to trust accounts) and (iv) the power of attorney (surat kuasa) and all Indonesian security agreements. 2. Sales Receipts. All receipts from sales of concentrate from operations in Block A (other than Sole Risk Projects) will be directed to a single trust payments account. Sales receipts from Block B and Sole Risk Projects will be directed respectively to separate trust payments accounts. Prior to any allocation event, such cash receipts will be swept daily to a general PT-FI account, and PT-FI will pay its various obligations, including operating expenses, debt service and payments to be made to PT-RTZ. 3. Trust Payments Accounts. If an allocation event occurs, cash received in the trust payments accounts at any time thereafter will not be swept into the general PT-FI account but, instead, will be retained by the Trustee and applied by the Trustee strictly in accordance with the Financial and Accounting Procedures annexed to the Participation Agreement, the RTZ Loan Agreement, Bank Credit Agreements and the Intercreditor Agreement. 4. Security Arrangements and Remedies. The lenders will be able to institute an "allocation" event, triggering the allocation set forth above, upon an event of default under the credit facilities. RTZ will be able to institute an allocation event upon the occurrence of certain specified events pursuant to the RTZ Loan Agreement or the Participation Agreement. With respect to the credit facilities, dedication of 100% of base production cashflow to the credit facilities (a "blockage" event) will require a separate notice (which may be given concurrently with an allocation notice) by the lenders upon an event of default. It is anticipated that PT-FI will pledge to the lenders its right to receive 60% of Incremental Expansion Cashflow after the RTZ Loan has been paid. 5. Operatorship. The lenders agree that, if they have the right to replace PT-FI as operator, they will (subject to certain conditions to be agreed upon related to RTZ's ability to perform and to RTZ's agreement to operate consistently with the terms of the credit facilities) appoint PT-RTZ or an Affiliate of PT-RTZ reasonably acceptable to the Banks to so act providing PT-RTZ or its Affiliate, as the case may be, agrees that it will so act. The lenders agree that, should PT-FI resign, or be deemed to have resigned, pursuant to the Participation Agreement, they will thereupon consent to PT-RTZ or an Affiliate of PT-RTZ reasonably acceptable to the Banks to so act (subject only to the aforementioned conditions). 6. Power of Attorney. A new power of attorney (surat kuasa) will be granted to the trustee by PT-FI (in substitution of the present power held by the lenders) granting the trustee the right in certain specified circumstances (each a "replacement event") to perform and exercise in the name of PT-FI the rights and duties of PT-FI under the COW and generally to conduct the activities of PT-FI in the Contract Area as fully and effectually as if conducted by PT-FI itself. The specified circumstances shall include, without limitation, events of defaults under the credit facilities and PT-FI's resignation, or deemed resignation, under the Participation Agreement. The power of attorney will be written in terms which will expressly permit PT-RTZ to be substituted for the trustee (subject only to the aforementioned conditions) and to act under the power as fully and effectually as could the trustee. The trustee shall, upon request of PT-RTZ, exercise its rights under the power of attorney, including the substitution of PT-RTZ (subject to such conditions), promptly on its being satisfied that a replacement event has occurred. 7. Duration. The trust arrangement will continue to operate after repayment of the credit facilities (and any replacements or substitutes thereof) until the termination of the Participation Agreement, and, if an allocation event occurs during such period, cash received in the trust payment accounts at any time thereafter will be applied solely in accordance with the Financial and Accounting Procedures annexed to the Participation Agreement and, if still outstanding, the RTZ Loan Agreement. The costs of the trustee shall be allocated to the relevant Trust Payments Account and shall be met by PT-FI and PT-RTZ in proportion to their Participating Interests in the activities which are subject to such Trust Payments Account. 8. A similar trust arrangement will be established for the PT- IRJA Contract of Work area and the activities undertaken therein. EX-10 13 RESTRUCTURING Freeport-McMoRan Inc. Exhibit B Freeport-McMoRan Inc. R. Foster Duncan 1615 Poydras Street Treasurer New Orleans, LA 70112 Telephone: 504-582-4628 P.O. Box 61119 Fax: 504-582-4511 New Orleans, LA 70161 April 27, 1995 Re: Restructuring of Freeport-McMoRan Inc. Thank you for agreeing to underwrite our new credit facilities. Enclosed for your review is a description of (1) the spin-off of Freeport-McMoRan Copper & Gold Inc. ("FCX") and (2) the plans of FTX and FCX to enter into a strategic alliance with The RTZ Corporation PLC ("RTZ") and RTZ America Inc. (the "RTZ Transaction"), as to both of which we have informed you previously and details of which are set out in the Exhibit hereto. In order for us to proceed with our discussions with RTZ toward execution of definitive documentation, we are requesting that you indicate your agreement in principle to the RTZ Transaction, subject to your further satisfaction with the final terms of the definitive documentation. As you are aware, under the proposed FCX/FI credit facility, the security interest granted to the lenders will include cash flows from PT-FI's Contract of Work, Block A. As described in more detail in the attachment, the RTZ Transaction will include the sharing of certain incremental cash flows from future expansion projects related to Block A. Cash flows from the current base production in Block A of 118,000 tonnes per day, in effect produced from the amount of PT-FI's year-end 1994 10-K ore reserve base, will remain reserved to PT-FI (and, consequently, to its lenders) and RTZ's interest will be only in any incremental cash flow derived from production in excess of such current base production due to any expansion projects RTZ has funded on a joint venture basis or a sole risk basis. Please refer to the attachment for further detail regarding the RTZ Transaction. In reliance upon your agreement in principle, the parties intend to enter into a stock purchase agreement governing the purchase of FCX stock and related transactions and, at the same time, a master agreement attaching forms of definitive documentation regarding the joint venture, which definitive documentation will be subject to your satisfaction as provided below. If you agree in principle to the RTZ Transaction as outlined above and in the attachment, subject to your satisfaction with the final terms of the definitive documentation regarding such transaction prior to your entering into our new credit facilities, please countersign this letter and return it via facsimile (504-582-4511) to R. Foster Duncan, Treasurer of Freeport-McMoRan Inc., no later than Friday, May 5, 1995. We understand such agreement in principle to include specifically your agreement that, subject to your satisfaction with the final terms of the RTZ Transaction and the definitive terms of the documentation regarding such transaction, (1) you will cooperate and negotiate in good faith with RTZ regarding intercreditor and revenue sharing arrangements to give effect to the foregoing, (2) you will consent to the joint venture arrangements and the loan described in the attachment, (3) you will consent to the lien on the expansion cash flows (those attributable to expansion projects funded on a joint venture basis or on a sole risk basis by RTZ) and that such cash flows can be assigned and pledged to RTZ, (4) you will consent to the lien on (X) the 40% undivided interest to be acquired by RTZ in the COW insofar as it relates to expansion projects funded on a joint venture basis or on a sole risk basis by RTZ in Block A (it being understood that expansion projects exclude PT-FI's current milling and mining operations in Block A, i.e., the current base production in Block A of 118,000 tonnes per day, in effect produced from PT-FI's year-end 1994 10-K ore reserve base), (Y) the 40% undivided interest to be acquired by RTZ in the COW insofar as it relates to Block B and agree such interests may be assigned to RTZ and (Z) RTZ's 40% interest in all Products obtained or other property produced by or acquired by the joint venture expansion projects in Block A or joint venture expansion projects in Block B, (5) PTFI may (subject to certain exceptions to be agreed upon related to RTZ's ability to perform and to RTZ's agreement to operate consistently with the terms of the credit facilities) be replaced with RTZ or an affiliate of RTZ reasonably acceptable to the Banks as operator of the joint venture as described in the attachment and (6) FCX may guaranty PTFI's obligations under the participation agreement which governs the terms of the joint venture. Please return the original executed signature pages to Mr. Woolery via overnight courier c/o Cravath, Swaine & 2 Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019-7475 (telephone: 212-474-1000). Very truly yours, FREEPORT-MCMORAN INC. By: /s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer FREEPORT-MCMORAN COOPER & GOLD INC. By: /s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer P.T. FREEPORT INDONESIA COMPANY By: /s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer Agreed and accepted on this _____ day of April, 1995: The Chase Manhattan Bank, N.A. Name of Bank By: /s/ Nicholas J. Chirzkos Name: Nicholas J. Chirzkos Title: Vice President 3 Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019-7475 (telephone: 212-474-1000). Very truly yours, FREEPORT-MCMORAN INC. By:________________________________________ Name: Title: FREEPORT-MCMORAN COOPER & GOLD INC. By:________________________________________ Name: Title: P.T. FREEPORT INDONESIA COMPANY By:________________________________________ Name: Title: Agreed and accepted on this 27th day of April, 1995: Chemical Bank Name of Bank By: /s/ Theodore L. Parker Name: Theodore L. Parker Title: Vice President 3 Chemical Bank 270 Park Avenue New York, NY 10017-2070 April 27, 1995 Freeport-McMoRan Inc. Freeport-McMoRan Resource Partners, Limited Partnership Freeport-McMoRan Copper & Gold Inc. P.T. Freeport Indonesia Company 1615 Poydras Street New Orleans, Louisiana 70112 Attention of: Mr. R. Foster Duncan Senior Secured Revolving Credit Facilities Consent Letter Ladies and Gentlemen: Reference is made to: (i) the Amended and Restated Credit Agreement (the "FTX-FRP Credit Agreement") dated as of June 1, 1993 among Freeport-McMoRan Inc. ("FTX"), Freeport McMoRan Resource Partners, Limited Partnership ("FRP"), the Banks party thereto and Chemical Bank (as Agent for the Banks), (ii) the Credit Agreement dated as of October 27, 1989, as amended and restated as of June 1, 1993 and as further amended (the "FI Credit Agreement"), among P.T. Freeport Indonesia Company ("FI"), FTX, Freeport-McMoRan Copper & Gold Inc. ("FCX"), the Banks party thereto, First National Bank, National Association (as successor to Morgan Guaranty Trust Company of New York as trustee for the Banks under the FI Trust Agreement) and Chemical Bank (as Agent for the Banks), (iii) the Credit Agreement dated as of June 11, 1992, as amended (the "FMPO Credit Agreement"), among FM Properties Operating Co. ("FMPO"), FTX, the Banks party thereto and Chemical Bank as Agent and Collateral Agent for the Banks (the FTX-FRP Credit Agreement, the FI Credit Agreement and the FMPO Credit Agreement being collectively referred to herein as the "Credit Agreements") and (iv) the consents attached hereto (the "Consents") delivered to the Banks party to the respective Credit Agreements in connection with the proposed transaction between FTX, FCX, The RTZ Corporation PLC ("RTZ") and RTZ America Inc. described therein. Terms used but not defined herein have the meaning assigned to such terms in the FTX-FRP Credit Agreement. In the event that (A) (i) any Bank shall not provide its consent under the FTX-FRP Credit Agreement, the FI Credit Agreement or the FMPO Credit Agreement, as the case may be, pursuant to the Consents attached hereto and (ii) the consent of such Bank is necessary to obtain approval of the Consent Letter by the requisite number of Banks under the FRP-FTX Credit Agreement, the FI Credit Agreement or the FMPO Credit Agreement, as the case may be; or (B) if Chemical Bank has approved the definitive documentation and (i) any Bank shall not provide the necessary consents, waivers and/or agreements, as the case may be, under any of the FTX-FRP Credit Agreement, the FI Credit Agreement or the FMPO Credit Agreement, as the case may be, in respect of the definitive documentation (and the transactions contemplated thereby) relating to the transactions described herein and in the attachments hereto, and (ii) the consent of such Bank is necessary to obtain the approval of such definitive documentation under the FTX-FRP Credit Agreement, the FI Credit Agreement or the FMPO Credit Agreement, as the case may be, then, in each case, Chemical agrees to (I) make a binding offer to purchase at par such Bank's rights and obligations under such Credit Agreement and to use its best efforts to consummate such purchase in accordance with Section 10.3 of the FTX-FRP Credit Agreement, Section 10.3 of the FI Credit Agreement or Section 9.3 of the FMPO Credit Agreement, as the case may be, and to provide such consents, waivers and agreements, as the case may be, and/or (II) refinance the Credit Agreements on the same terms (except as modified to reflect and to permit the transactions described herein and in the attachments hereto, as contemplated by the approved definitive documentation) with banks which provide such consents, waivers and agreements, as the case may be; provided that, Chemical's obligations hereunder shall be subject to the condition that, after giving effect to the waivers and consents in the Consents with respect to each of the respective Credit Agreements, there shall not have occurred and be continuing any Default or Event of Default under any such Credit Agreements. By execution and delivery of this letter agreement, Chemical, in its capacity as a Bank, indicates its agreement in principle to the transactions described herein and in the attachments, subject to Chemical's satisfaction with the final terms of the definitive documentation regarding such transactions. Such agreement in principle includes specifically Chemical's agreement that, subject to its satisfaction with the final terms of the definitive documentation regarding such transactions, (1) Chemical consents to the joint venture arrangements and the loan described in the attachments, (2) Chemical will consent to release the lien on the expansion cash flows (those attributable to expansion projects funded on a joint venture basis or on a sole risk basis by RTZ) and that such cash flows can be assigned and pledged to RTZ, (3) Chemical will consent to release the lien on (X) the 40% undivided interest to be acquired by RTZ in the COW insofar as it relates to expansion projects funded on a joint venture basis or on a sole risk basis by RTZ in Block A (it being understood that expansion projects exclude PT-FI's current milling and mining operations in Block A, i.e., the current base production in Block A of 118,000 tonnes per day, in effect produced from PT-FI's year-end 1994 10-K ore reserve base), (Y) the 40% undivided interest to be acquired by RTZ in the COW insofar as it relates to Block B and agree such interests may be assigned to RTZ and (Z) RTZ's 40% interest in all Products obtained or other property produced by or acquired by the joint venture expansion projects in Block A or joint venture expansion projects in Block B, (4) Chemical agrees that PT-FI may (subject to certain exceptions to be agreed upon related to RTZ's ability to perform and to RTZ's agreement to operate consistently with the terms of the credit facilities) be replaced with RTZ or an affiliate of RTZ as operator reasonably acceptable to Chemical of the joint venture as described herein and in the attachments, (5) Chemical agrees that FCX may guaranty PT-FI's obligations under the participation agreement which governs the terms of the joint venture, and (6) Chemical agrees to enter into mutually satisfactory agreements with RTZ so that the respective revenue priorities and lien rights are respected. Such agreement in principle also includes specifically Chemical's agreement, subject to such satisfaction, that the proposed terms of the new senior secured revolving credit facilities which will amend or replace the Credit Agreements will be changed to reflect and permit the transactions described herein and in the attachments hereto, as contemplated by the approved definitive documentation. This letter agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York. If the foregoing correctly sets forth our understanding, please indicate your acceptance hereof by signing in the appropriate space below and returning to each of us one of the enclosed duplicate originals hereof, whereupon this letter shall become a binding agreement between us. Very truly yours, CHEMICAL BANK, By: /s/ Theodore L. Parker Name: Theodore L. Parker Title: Vice President CHEMICAL SECURITIES INC., By: /s/ W. Durand Eppler Name: W. Durand Eppler Title: Managing Director Accepted and agreed to as of the date first written above: FREEPORT-MCMORAN INC. By: /s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer FREEPORT-MCMORAN RESOURCE PARTNERS LIMITED PARTNESHIP, By: FREEPORT-MCMORAN INC., its Administrative Managing General Partner, By: /s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer FREEPORT-MCMORAN COPPER & GOLD INC., By: /s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer P.T. FREEPORT INDONESIA COMPANY, By: /s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer FM PROPERTIES OPERATING CO., By: Freeport-McMoRan Inc., its Managing General Partner, By: /s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer Chemical Bank The Chawe Manhattan Bank 270 Park Avenue (Natioanl Association) New York, NY 10017-2070 One Chase Manhattan Plaza New York, NY 10081 April 27, 1995 Freeport-McMoRan Inc. Freeport-McMoRan Resource Partners, Limited Partnership Freeport-McMoRan Copper & Gold Inc. P.T. Freeport Indonesia Company 1615 Poydras Street New Orleans, Louisiana 70112 Attention of: Mr. R. Foster Duncan Senior Secured Revolving Credit Facilities Amended Commitment Letter Ladies and Gentlemen: Reference is made to the Commitment Letter, dated as of January 25, 1995 (including attachments thereto, the "Commitment Letter"), among Freeport-McMoRan Inc. ("FTX"), Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), Freeport-McMoRan Copper and Gold Inc. ("FCX"), P.T. Freeport Indonesia Company ("FI"), Chemical Bank ("Chemical"), Chemical Securities Inc. ("CSI"), The Chase Manhattan Bank (National Association) ("Chase") and Chase Securities, Inc. ("Chase Securities"). Capitalized terms used but not defined herein have the meaning assigned to such terms in the Commitment Letter. You have advised Chemical, CSI, Chase and Chase Securities that, in addition to the Restructuring transactions described in the Commitment Letter, FTX and FCX plan to enter into a strategic alliance with the RTZ Corporation PLC ("RTZ") and RTZ American Inc. as described in the letter attached as Exhibit A hereto (the "RTZ" Transaction"). Based on FTZ's and FCX's plan to enter into the RTZ Transaction, each of Chemical and Chase is pleased to confirm to you its reinstatement of its several commitment to provide one half of the $750,000,000 principal amount of the FI Senior Secured Credit Facility and one half of the $400,000,000 principal amount of the FRP Senior Secured Credit Facility, each substantially on the terms and conditions set forth in this letter agreement, the Commitment Letter and the respective Term Sheets attached as Exhibits A-1, A-2 and B to the Commitment Letter. In accordance with the provisions of the Commitment Letter, Chemical continues to reserve the right, prior to the execution of definitive documentation (the "Closing"), to syndicate all or a portion of such commitments to one or more financial institutions reasonable acceptable to you which will become parties to the definitive credit documentation (together with Chemical and Chase, the "Lenders"). In addition, Chemical's and Chase's commitments hereunder are subject to (i) the negotiation, execution and delivery prior to [June 30,] 1995, of definitive documentation with respect to the Credit Facility satisfactory in form and substance to Chemical, Chase and counsel for the Agents and (ii) the conditions included in the Commitment Letter. This letter constitutes an amendment to the Commitment Letter, which except as amended hereby, shall remain in full force and effect in accordance with its terms. After your acceptance hereof, all references to the Commitment Letter in the Fee Letters, the Term Sheets or other documentation relating to the Credit Facility shall be Deemed to refer to the Commitment Letter as amended hereby. If the foregoing correctly sets forth our understanding, please indicate your acceptance hereof by signing in the appropriate space below and returning to each of us one of the enclosed duplicate originals hereof, whereupon this letter shall become a binding agreement between us. Very truly yours, CHEMICAL BANK, by Theodore L. Parker Name: Theodore L. Parker Title: Vice President - -2- CHEMICAL SECURITIES INC, by/s/ W. Durand Eppler Name: W. Durand Eppler Title: Managing Director CHASE SECURITIES, INC. by/s/ Andrew C. Mahder Name: Andrew C. Mahder Title: Vice President THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), by/s/ Nicholas J. Chirzkos Name: Nicholas J. Chirzkos Title: Vice President Accepted and agreed to as of the date first written above: FREEPORT-McMoRan INC., by /s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP, by FREEPORT-McMoRan INC., its Administrative Managing General Partner, by/s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer FREEPORT-McMoRan COPPER & GOLD INC., by /s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer - -3- P.T. FREEPORT INDONESIA COMPANY, by/s/ R. Foster Duncan Name: R. Foster Duncan Title: Treasurer - -4- Description of Freeport Restructuring A. Spin-Off of Freeport-McMoRan Cooper & Gold Inc. On May 3, 1994, Freeport-McMoRan Inc. ("FTX") announced plans to spin-off its subsidiary, Freeport-McMoRan Copper & Gold Inc. ("FCX"), pursuant to an essentially tax-free distribution to its common stockholders, on a pro rata basis, of all of the shares of the Class B Common Stock of FCX which it owns at the time of such distribution (the "Distribution"). Because of the tremendous growth of FCX's common equity market value since its organization in 1987, FTX and FCX believe that the Distribution is necessary in order for FCX to continue its growth and development of business opportunities without conflicting with the financial needs and priorities of FTX. A series of steps will be taken prior to the Distribution. First, both FTX and FCX will recapitalize or refinance certain of their existing indebtedness. Accordingly, FTX plans to call for redemption or otherwise cause to be converted or discharged all of its outstanding convertible debt. The ability to do so is dependent to a large extent on its arrangements with RTZ. These arrangements and FTX's recapitalization are described in more detail below. Likewise, as you are aware, FCX is in the process of refinancing its existing indebtedness. FCX and P.T. Freeport Indonesia Company ("PT-FI"), a subsidiary of FCX, will enter into two senior secured revolving credit facilities with Chemical Bank, as Administrative Agent, and The Chase Manhattan Bank (National Association), as Documentary Agent, including an amendment to the existing $550 million facility under which PT-FI will be the borrower and a new $200 million facility under which either FCX or PT-FI may borrow. In addition, a separate facility for FTX and Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), will replace the existing $800 million FTX/FRP credit arrangements, the availability of which is now reduced by PT-FI's borrowings under its existing $550,000,000 facility. In addition, prior to the Distribution, FCX will effect a recapitalization by merging a newly created, wholly owned Delaware subsidiary of FCX with and into FCX (the "Merger"). The Merger will result in a number of changes to FCX'S capital structure. These changes include altering the voting rights of FCX so that the shareholders of its Class B Common Stock elect 80% of the FCX directors and shareholders of its Class A Common Stock and preferred stock together elect 20% of the FCX directors. Such changes in voting power are required in order to permit the Distribution to be tax-free for federal income tax purposes. Consummation of the Merger has been approved by the shareholders of FCX's Class A Common Stock and Class B Common Stock, who also approved the establishment of new stock option, stock-based award and cash bonus plans for its directors, officers and employees and the amendment of its Certificate of Incorporation to reduce FCX's vulnerability to unsolicited takeover proposals. After the completion of the FTX refinancing and the consummation of the Merger, FTX will spin off FCX in the Distribution. FTX currently owns all of the shares of Class B Common Stock of FCX. Pursuant to the Distribution, FTX will distribute all of the shares of FCX Class B Common Stock which it owns at such time pro rata to its common stockholders. In connection with the Distribution, FCX will repay in full its intercompany indebtedness to FTX. Certain obligations previously incurred by FTX, including liabilities with respect to space and equipment leases and employee benefits relating to employees transferred to FCX, will be transferred to FCX. In addition, up to $90 million of FTX's existing guarantee of FM Properties Operating Co.'s indebtedness will be assumed b FCX. Following the Distribution, FTX will retain its interests in the sulphur and agricultural minerals business It will remain engaged in the business of mining and selling sulphur through its interest in FRP, a Delaware limited partnership, and in the business of mining, developing, producing and marketing phosphate fertilizers through its interest in and through FRP's interest in a joint venture partnership IMC-Agrico Company. B. RTZ Transactions and -FTX Recapitilization 1. On March 7, 1995, FTX signed letters of intent with The RTZ Corporation PLC ("RTZ") and RTZ America Inc. ("RTZ America") whereby RTZ subsidiaries may acquire up to approximately 19% of the outstanding common equity of FCX and up to approximately 12% of the outstanding common equity of FTX. In addition, FCX and subsidiaries of FCX will enter into joint ventures with RTZ and subsidiaries of RTZ pursuant to which RTZ's subsidiaries will fund up to $850 million of exploration and development projects on lands controlled by FCX's Indonesian subsidiaries and RTZ will acquire 25% of FCX's Spanish smelter operations and mineral exploration program. 2. Pursuant to its arrangements with RTZ, FTX will sell approximately 21.5 million shares of the Class A Common Stock of FCX (which is approximately 10.4% of the outstanding common equity of FCX) to RTZ for $450 million. RTZ has an option to - -2- purchase from FTX an additional 3.5 million shares of Class A Common Stock for $75 million. FTX will use the proceeds from the sale of these shares of FCX Class A Common Stock to call for redemption in accordance with their terms its Zero Coupon Convertible Subordinated Debentures (the "ABC Debentures"), to repay certain of its long-term debt and, to the extent that there are any proceeds remaining, for other corporate purposes. 3. FTX will also call for redemption its 6.55% Convertible Subordinated Notes (the "6.55% Notes"). In connection with the redemption of the 6.55% Notes, RTZ America, if requested by FTX, will make an all-cash tender offer for all of the 6.55% Notes and will convert any 6.55% Notes it acquires in the tender offer into the Common Stock of FTX. As a result of the tender offer or otherwise, it is expected that most of the 6.55% Notes will be converted into FTX Common Stock rather than being redeemed. If FTX purchases any of the 6.55% Notes in redemption, however, RTZ, if requested, will purchase additional FCX Class A Common Stock from FTX. 4. In order to effect such sales of FCX Class A Common Stock, FTX will convert a sufficient amount of shares of the FCX Class B Common Stock it owns into shares of FCX Class A Common Stock. 5. In addition, FTX has completed an offer of shares of its Common Stock in exchange for its $4.375 Convertible Exchangeable Preferred Stock, at a ratio of 2.85 shares of Common Stock for each share of such Preferred Stock. 6. If RTZ America acquires and converts all of the 6.55% Notes and RTZ exercises the option to acquire the additional 3.5 million shares of the FCX Class A Common Stock, RTZ and RTZ America will own, in the aggregate after giving effect to the spin- off, up to approximately 19% of the outstanding common equity of FCX and, if the shares obtained on conversion of the 6.55% Notes are retained through the Distribution, approximately 12% of the common equity of FTX anticipated to be outstanding (after completion of FTX's restructuring). 7. In addition to RTZ America's acquisition of FTX and FCX stock, RTZ and FCX have agreed to establish joint ventures to explore and develop the Contracts of Work ("COWs") held by PT-FI and by P.T. Irja Eastern Minerals Corporation ("PT-IRJA"), an Indonesian limited liability company in which FCX's wholly owned subsidiary, Eastern Mining Company, Inc., a Delaware corporation, owns an 80% interest. Under the joint venture arrangements, subsidiaries of RTZ will acquire a 40% undivided interest, in (i) the COW held by PT-IRJA (the "PT-IRJA Area"); (ii) in the COW held by PT-FL insofar as it relates to Contract Area Block B (as defined in PT-FI's COW); and (iii) in the COW held by PT-FI insofar as it relates to expansion projects funded on a joint venture basis - -3- or on a sole risk basis by RTZ in Contract Area Block A (as defined in PT-FI's COW) (it being understood that expansion projects exclude PT-FI's current mining and milling operations in Block A, i.e., the current base production in Block A of 118,000 tonnes per day, in effect produced from PT-FI's year-end 1994 10-K ore reserve base). 8. All Products (as defined in PT-FI's COW) obtained or other property produced by or acquired by the joint venture expansion projects in BLOCK A or joint venture projects in Block B will be held in the name of PT-FI as operator of such joint venture but shall be and remain the property of PT-FI and RTZ severally in proportion to their interests in the joint venture. In addition, PT-FI will make its 60% interest in PT-FI's COW insofar as it relates to expansion projects funded on a joint venture basis or on a sole risk basis by RTZ in Block A (it being understood that expansion projects exclude PT-FI's current mining and milling operations in Block A, i.e., the current base production in Block A of 118,000 tonnes per day, in effect produced from PT-FI's year-end 1994 10-K ore reserve base) available to the joint venture. FCX will guarantee PT-FI's obligations under the participation agreement which governs the terms of the joint venture. 9. Under the joint venture arrangements, subsidiaries of RTZ will pay for all further exploration approved by an Exploration Committee established by FCX and RTZ until RTZ has paid an aggregate of $100 million. Thereafter, the parties will pay additional exploration costs ratably in proportion to their participating interests in such projects (on a 60%/40% basis except for sole risk ventures). The parties will pay the costs to develop additional projects in Block A (after RTZ has funded its $750 million as outlined below), and of all projects in Block B and in the PT-IRJA Area, ratably in accordance with their participating interests in such projects. 10. In addition, RTZ will provide 100% of certain specified costs (up to $750 million), including mining development, equipment and working capital, of future expansion projects of PT- FI's current milling operations in Block A, subject generally to proving up of 400 million tonnes of reserves incremental to the 1994 year-end 10-K reserves. RTZ's contribution of $750 million for such Block A expansion projects is being structured as a $450 million loan to PT-FI, with recourse only to PT-FI's cash flows attributable to such Block A expansion projects, and as a direct investment by RTZ of $300 million. In return, PT-FI will grant to RTZ a first priority lien upon PT-FI's 60% interest in incremental cash flow resulting from the expansion of operations under PT-FI's COW and RTZ will receive 100% of incremental cash flow attributable to PT-FI's 60% undivided interest in such expansion projects until it has received in respect of the loan an amount equal to the funds it has provided through the loan plus interest on the loan based on RTZ's cost of borrowing, after which RTZ will continue to receive 40% and PT-FI will receive 60% of incremental cash flow for the remaining life of such expansion projects. A condition to the making of the - -4- $450,000,000 loan by RTZ will be the release by the Banks, subject to satisfactory intercreditor arrangements, of any lien that they may now have or hereafter acquire with respect to (i) RTZ's 40% interest in all Products obtained or other property produced by or acquired by the joint venture expansion projects in Block A or joint venture projects in Block B and in incremental cash flow resulting from the expansion of operations under PT-FI's COW, and (ii) RTZ's undivided 40% interest (subject to the following sentence) in PT- FI's right, title and interest in, to and under PT-FI's COW insofar as it relates to expansion projects funded on a joint venture basis or on a sole risk basis by RTZ in Block A (it being understood that expansion projects exclude PT-FI's current mining and milling operations in Block A, i.e., the current base production in Block A of 118,000 tonnes per day, in effect produced from PT-FI's year-end- 1994 10-K ore reserve base) and in the COW insofar as it relates to Block B. No payments to RTZ in respect of the loan or the investment will be made until the expansion projects have begun to generate such incremental cash flows. 11. In addition, FCX/PT-FI will (subject to certain exceptions to be agreed upon related to RTZ's ability to perform and to RTZ's agreement to operate consistently with the terms of the credit facilities) be replaced as operator of the joint venture by RTZ or an affiliate of RTZ reasonably acceptable to the Banks if the Banks have the right to remove FCX/PT-FI as operator and decide to exercise such right. In addition, in certain other circumstances to be agreed, such as the bankruptcy of FCX, the bankruptcy of PT-FI, the loss of control of PT-FI by FCX, or certain other circumstances to be agreed upon, RTZ may have the right to become the operator. 12. PT-FL shall continue to receive 100% of all cash flow from its current Block A operations until its year-end 1994 10- K ore reserves have been mined out in 2021. 13. In addition, a subsidiary of RTZ will purchase a 25% interest in FCX's Huelva, Spain copper smelter and RTZ will also acquire a 25% interest in FCX's Spanish mineral exploration program. 14. In addition, the outstanding guarantees of FTX relating to the debt of FM Properties Operating Co. ("FMPO"), a partnership principally owned by FM Properties Inc. ("FMPI"), will be refinanced in conjunction with a currently planned refinancing of FMPO's indebtedness. If such refinancing has not occurred at the time of the Distribution, however, FTX will retain primary responsibility with respect to $45 million of the indebtedness and FCX will unconditionally guarantee the remaining $90 million, pending a refinancing or subsequent sale of properties by FMPO. 15. The foregoing will require that PT-FI's bank lenders, (1) consent to the joint venture arrangements and the loan described above, (2) release the lien on the expansion cash flows (those attributable to expansion projects funded on a joint venture - -5- basis or on a sole risk basis by RTZ) and that such cash flows can be assigned and pledged to RTZ, (3) release the lien on (X) the 40% undivided interest to be acquired by RTZ in the COW insofar as it relates to expansion projects funded on a joint venture basis or on a sole risk basis by RTZ in Block A (it being understood that expansion projects exclude PT-FI's current mining and milling operations in Block A, i.e., the current base production in Block A of 118,000 tonnes per day, in effect produced from PT-FI's year-end 1994 10-K ore reserve base), (Y) the 40% undivided interest to be acquired by RTZ in the COW insofar as it relates to Block B and agree such interests may be assigned to RTZ and (Z) RTZ's 40% interest in all Products obtained or other property produced by or acquired by the joint venture expansion projects in Block A or joint venture projects in Block B, (4) agree that PT-FI may (subject to certain exceptions to be agreed upon related to RTZ's ability to perform and to RTZ's agreement to operate consistently with the terms of the credit facilities) be replaced with RTZ or an affiliate of RTZ reasonably acceptable to the Banks as operator of the joint venture as described above, (5) agree that FCX may guaranty PT-FI's obligations under the participation agreement which governs the terms of the joint venture and (6) enter into mutually satisfactory agreements with RTZ so that the respective revenue priorities and lien rights are respected. 16. In order to give effect to the foregoing, trust arrangements of the type described in Exhibit A hereto will be implemented. - -6- DESCRIPTION OF TRUST ARRANGEMENT Trust Estate. To give effect to the arrangements contemplated by the credit facilities, the participation agreement and the production payment loan and to preserve and protect the respective rights of the parties thereunder, an independent third party trustee (First Trust is the existing trustee) would hold in trust (i) the COW, (ii) all concentrate sales contracts, (iii) all receipts from sales of concentrate (to be directed to trust accounts) and (iv) the surat kuasa and all Indonesian security agreements. Sales Receipts. All receipts from sales of concentrate from PTFI's existing operations and approved expansion projects would be directed to a single "trust payments account". (Sales receipts from sole risk and greenfield projects would be directed to separate trust accounts.) It is anticipated that, prior to any allocation event, such cash receipts would be swept daily to a general PTFI account, and that PTFI would pay its various obligations, including operating expenses, debt service and payments to be made to PTRTZ. Trust Payments Account. If an allocation event has occurred, cash received in the trust payments account will be charged with operating costs, as defined in and in accordance with the accounting procedures (which will contemplate monthly estimated calculations with an annual true-up). The remainder would be split between base production cash flow and expansion cash flow (it being understood that expansion cash flows exclude PT-FI's current mining and milling operations in Block A, i.e., the current base production in Block A of 118,000 tonnes per day, in effect produced from PT-FI's year-end 1994 10-K ore reserve base). Expansion cash flow would be allocated 60% for the account of PTFI and 40% for the account of PTRTZ. PTRTZ's share would be payable to it. For so long as the production payment loan is outstanding, PTFI's 60% share will be 100% dedicated to repayment of such loan; thereafter PTFI's share would be paid to it. Subject to the occurrence of a blockage event, base production cash flow would be paid to PTFI, which would be responsible for payment of PTFI corporate credit and infrastructure debt service. Security Arrangements and Remedies. The lenders would be able to institute an "allocation" event, triggering the allocation set forth above, upon an event of default under the credit facilities. RTZ would be able to institute an allocation event upon the occurrence of certain specified events to be agreed with respect to the production payment loan or the participation agreement. In such an event, the payment of operating expenses and dedication to PTRTZ would be implemented by the trustee; with respect to the credit facilities, dedication of 100% of base production cash flow to the credit facilities (a "blockage" event) would require a separate notice (which may be given concurrently with an allocation notice) by the lenders upon an event of default. It is anticipated that PTFI would pledge to the lenders its right to receive 60% of expansion cash flow after the production payment loan has been paid. The lenders agree that if they have the right to replace PTFI as operator they will (subject to certain exceptions to be agreed upon related to RTZ's ability to perform and to RTZ's agreement to operate consistently with the terms of the credit facilities) appoint RTZ or an affiliate of RTZ reasonably acceptable to the Banks to so act, and RTZ agrees that it will so act. Freeport-McMoRan Inc. R. Foster Duncan 1615 Poydras Street Treasurer New Orleans, LA 70112 Telephone: 504-582-4628 P.O. Box 61119 Fax: 504-582-4511 New Orleans, LA 70161 April 27, 1995 Re: Restructuring of Freeport-McMoRan Inc. Enclosed for your review is a description of (1) the spin-off of Freeport-McMoRan Copper & Gold Inc. ("FCX") and (2) the plans of FTX and FCX to enter into a strategic alliance with The RTZ Corporation PLC ("RTZ") and RTZ America Inc. (the "RTZ Transaction"), as to both of which we have informed you previously and details of which are set out in the Exhibit hereto. In order for us to proceed with our discussions with RTZ toward execution of definitive documentation, we are requesting that you indicate your agreement in principle to the RTZ Transaction, subject to your further approval of the final terms of the definitive documentation. As you are aware, under the original FTX/FCX/FI credit facility, the security interest granted to the lenders includes cash flows from PT-FI's Contract of Work, Block A. As described in more detail in the attachment, the RTZ Transaction will include the sharing of certain incremental cash flows from future expansion projects related to Block A. Cash flows from the current base production in Block A of 118,000 tonnes per day, in effect produced from the amount of PT-FI's year-end 10-K ore reserve base, will remain reserved to PT-FI (and, consequently, to its lenders) and RTZ's interest will be only in any incremental cash flow derived from production in excess of such current base production due to any expansion projects RTZ has funded on a joint venture basis or on a sole risk basis. Please refer to the attachment for further detail regarding the RTZ Transaction. In reliance upon your agreement in principle, the parties intend to enter into a stock purchase agreement governing the purchase of FCX stock and related transactions and, at the same time, a master agreement attaching forms of definitive documentation regarding the joint venture, which definitive documentation will be subject to your satisfaction as provided below. If you agree in principle to the RTZ Transaction as outlined above and in the attachment, subject to your further approval of the final terms of the definitive documentation regarding such transaction, please countersign this letter and return it via facsimile (504-582-4511) to R. Foster Duncan, Treasurer of Freeport-McMoRan Inc., with a copy via facsimile to James Woolery of Cravath, Swaine & Moore, counsel for the Agent (212-474-3700), no later than Friday, May 5, 1995. We understand such agreement in principle to include specifically your agreement that, subject to your satisfaction with the final terms of the RTZ Transaction and the definitive terms of the documentation regarding such transaction, (1) you will cooperate and negotiate in good faith with RTZ regarding intercreditor and revenue sharing arrangements to give effect to the foregoing, (2) you will consent to the joint venture arrangements and the loan described in the attachment, (3) you will consent to release the lien on the expansion cash flows (those attributable to expansion projects funded on a joint venture basis or on a sole risk basis by RTZ) and that such cash flows can be assigned and pledged to RTZ, (4) you will consent to release the lien on (X) the 40% undivided interest to be acquired by RTZ in the COW insofar as it relates to expansion projects funded on a joint venture basis or on a sole risk basis by RTZ in Block A (it being understood that expansion projects exclude PT-FI's current milling and mining operations in Block A, i.e., the current base production in Block A of 118,000 tonnes per day, in effect produced from PT-FI's year-end 1994 10-K ore reserve base), (Y) the 40% undivided interest to be acquired by RTZ in the COW insofar as it relates to Block B and agree such interests may be assigned to RTZ and (Z) RTZ's 40% interest in all Products obtained or other property produced by or acquired by the joint venture expansion projects in Block A or joint venture expansion projects in Block B, (5) PTFI may (subject to certain exceptions to be agreed upon related to RTZ's ability to perform and to RTZ's agreement to operate consistently with the terms of the credit facilities) be replaced with RTZ or an affiliate of RTZ reasonably acceptable to the Banks as operator of the joint venture as described in the attachment and (6) FCX may guaranty PTFI's obligations under the participation agreement which governs - -2- the terms of the joint venture. Please return the original executed signature pages to Mr. Woolery via overnight courier c/o Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019-7475 (telephone: 212-474-1000). Very truly yours R. Foster Duncan Agreed and accepted on this __ day of April, 1995: Name of Bank By Name: Title: - -3- Freeport-McMoRan Inc. R. Foster Duncan 1615 Poydras Street Treasurer New Orleans, LA 70112 Telephone: 504-582-4628 P.O. Box 61119 Fax: 504-582-4511 New Orleans, LA 70161 April 27, 1995 To: The Banks Referred to Below Re: Freeport-McMoRan Inc. Recapitalization Reference is made to: (i) the Amended and Restated Credit Agreement (the "FTX-FRP Credit Agreement") dated as of June 1, 1993 among Freeport-McMoRan Inc. ("FTX"), Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"), the Banks party thereto and Chemical Bank (as Agent for the Banks), (ii) the Credit Agreement dated as of October 27, 1989, as amended and restated as of June 1, 1993 and as further amended (the "FI Credit Agreement"), among P.T. Freeport Indonesia Company ("FI"), FTX, Freeport-McMoRan Copper & Gold Inc. ("FCX"), the Banks party thereto First National Bank, National Association (as successor to Morgan Guaranty Trust Company of New York, as trustee for the Banks under the FI Trust Agreement) and Chemical Bank (as Agent for the Banks), and (iii) to the Credit Agreement dated as of June 11, 1992, as amended (the "FMPO Credit Agreement"), among FM Properties Operating Co. ("FMPO"), FTX, the Banks party thereto and Chemical Bank as Agent and Collateral Agent for the Banks (the FTX-FRP Credit Agreement, the FI Credit Agreement and the FMPO Credit Agreement being collectively referred to herein as the "Credit Agreements"). Terms used but not defined herein have the meaning assigned to such terms in the FTX-FRP Credit Agreement. As you are aware, FTX plans to recapitalize its indebtedness prior to its spinoff of FCX. The recently announced transactions with RTZ enable FTX to proceed with this recapitalization. Under the most likely scenario, FTX intends to sell to RTZ shares of FCX currently held by FTX representing a 12.2% ownership interest in FCX. The total proceeds from a sale of a 12.2% ownership interest would be approximately $525 million (approximately $490 million after tax). Actual sales to RTZ will vary depending on the outcome of subsequent events described below. All such sales to RTZ will result in reductions to the FTX Borrowing Base pursuant to the formula in Section 2.5 of the FTX-FRP Credit Agreement. On March 24, 1995, FTX commenced its recapitalization program by offering holders of the $4.375 Convertible Exchangeable Preferred Stock (the "Preferred Stock") the option to exchange each share of Preferred Stock into 2.85 shares of FTX common stock. Net proceeds from the sale of FCX shares to RTZ will be used by FTX to call the Zero Coupon Convertible Subordinated Debentures due 2006 ("ABC's") for approximately $282 million in cash. FTX will also call the 6.55% Convertible Subordinated Notes due January 15, 2001 (the "6.55%'s") and the holders will have the option of receiving cash or converting their securities into shares of FTX common stock. FTX may decide to change the terms of the conversion of the 6.55%'s. While FTX management is confident the 6.55% holders will elect to convert, some portion of the 6.55% holders may elect not to convert to FTX shares and cash will therefore be required to satisfy the call price for these securities. However, even in the event that there are no 6.55% conversions to equity, FTX can raise up to approximately $653 million in aggregate (net of taxes) through its arrangement with RTZ from the sale of FCX shares, and would have cash outflows of approximately $644 million ($282 million for the ABC's plus $352 million for the 6.55%'s in the event that no 6.55% holders convert). While the FTX revolver may be needed on an interim basis, no net uses of the FTX revolver would therefore be required in order to complete the recapitalization. We have attached for your convenience a pro forma Borrowing Base availability calculation which details this scenario. In order to consummate the actions described above, it is necessary for FTX to obtain the following consents and waivers under the Credit Agreements: 1. A consent by the Required Borrowing Base Banks not to exercise their right under Section 2.2(III) of the FTX-FRP Credit Agreement to redetermine the Borrowing Base Factors if FTX's direct or indirect aggregate ownership of FI decreases below 50% on a fully diluted basis as a result of the sale by FTX of shares of FCX to RTZ on the terms described above (in no event to decrease below 43%); 2. To the extent necessary to permit the payment of cash on the ABC's and 6.55%'s in the aggregate amounts and on the terms described above, a waiver by the Banks of compliance by FTX with the terms of Section 5.2(i) of both the FTX-FRP Credit Agreement and the FI Credit Agreement prohibiting payment on the ABC's and 6.55%'s except (x) in common stock of FTX (with cash payment for fractional shares) and (y) otherwise in an aggregate amount not in excess of $15,000,000; 3. A consent by the Banks under Section 5.2(n)(i) of the FTX- FRP Credit Agreement and Section 5.2(n) of the FI Credit Agreement to any change in the conversion terms for stock issuances and timing provisions of the 6.55%'s; and - -4- 4. The waivers and conditions outlined above are conditioned upon the execution of and the Agent's satisfaction with the terms of the Stock Purchase Agreement to be executed in connection with the transactions with RTZ referred to above. Execution of this letter agreement shall constitute agreement and acceptance of the waivers and consents described in paragraphs 1, 2 and 3 above with respect to the terms outlined above by each Bank under each of the Credit Agreements to which it is a party. Following receipt by the Agent of executed counterparts of this letter agreement which, when taken together, bear the signatures of FTX, FRP, FMPO, FI, the Agent and the Required Banks (as defined under each of the respective Credit Agreements), this letter agreement shall become effective upon the satisfaction of the conditions outlined in paragraph 4 above. This letter agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument. Except as expressly set forth herein, this letter agreement shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Banks and the Agent under the respective Credit Agreements, nor alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the respective Credit Agreements, all of which are ratified and affirmed in all respects and shall continue in full force and effect. This letter agreement shall apply and be effective only with respect to the provisions of the respective Credit Agreements specifically referred to herein. Except as expressly set forth herein, the respective Credit Agreements shall continue in full force and effect in accordance with the provisions thereof. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York. FTX shall pay all out-of-pocket expenses incurred by the Agent in connection with the preparation of this letter agreement, including, but not limited to, the reasonable fees and disbursements of Cravath, Swaine & Moore, counsel for the Agent. - -4- If the foregoing correctly sets forth our understanding, please indicate your acceptance hereof by signing in the appropriate space below and returning to the Agent one of the enclosed duplicate originals hereof, whereupon this letter agreement shall become a binding agreement between us. Very truly yours, Freeport-McMoRan Inc., by R. Foster Duncan Treasurer Freeport-McMoRan Resource Partners, Limited Partnership by Freeport-McMoRan Inc. its Administrative Managing General Partner, R. Foster Duncan Treasurer P.T. Freeport Indonesia Company by R. Foster Duncan Treasurer - -4- FM Properties Operating Co., by Freeport-McMoRan Inc. its Managing General Partner, R. Foster Duncan Treasurer Agreed and accepted on this ___ day of April, 1995: Name of Bank by Name: Title: - -4- Proforma Borrowing Base Availability Assumes No Conversion of 6.55% Notes Assumptions A Initial sale of 21.5 million shares of FCX common stock to RTZ for $450 million ($430 million net of tax); subsequent sale 14.4 million shares to RTZ for $301 million ($223 million net of tax). B Repayments of ABC's in the amount of $281 million and 6.55% in the amount of $352 million. These events have the following effects on the FTX Bank Debt and Borrowing Base: FTX Bank Debt Actual Balance - March 31, 1995 $281,500 Less Net Proceeds of RTZ Sales (652,603) Plus: Retirement of ABC's 281,487 Plus: Retirement of 6.55%'s 352,416 Proforma Balance - March 31, 1995 262,800 FTX Borrowing Base Reduction (as required under Section 2.5 of the FTX Credit Agreement) Actual Balance - March 31, 1995 1,800,000 Less: Net Proceeds $150MM X 50% (75,000) $150MM X 75% (112,500) $353MM X 100% (352,003) Proforma Balance - March 31, 1995 1,259,697 Availability Figures In $Millions 3/31/95 3/31/95 (Actual) (Proforma) FTX Borrowing Base $1,600.0 $1,259.9 Plus MS Factors: FRP (.486) 166.7 166.7 PTFI (.409 to .570) 157.9 220.1 Total adjusted base $2,124.6 $1,646.7 Less: (262.8) FTX: Bank Debt ($281.5) ($262.8) Subordinated Debt/Other (598.2) 0.0 FM Properties Guarantee/Debt (138.3) (138.3) (net) FRP Bank Debt (179.0) (179.0) Public Debt (150.0) (150.0) IMC-Agrico/Other (14.1) (14.1) FCX/PTFI: Bank Debt (35.0) (35.0) Privatization - Debt/Leases (351.3) (351.3) Caterpillar/Other (88.3) (88.3) Total Borrowing Base Debt ($1,813.0) $1,198.7) Credit Availability Availability Under Borrowing Base $311.0 $448.1 Availability Under Bank Facility $304.5 $323.2 -----END PRIVACY-ENHANCED MESSAGE-----